Tag Archives: Reactionary Economics

Apple — just a bad citizen

The New York Times reports that Apple Inc. is both anti-tax as a matter of principle and pays little to the states and countries which permit it to exist. Steve Jobs — Genius© — made it very clear that government ought to serve the interests of his company and that his company lacks a civic conscience:

In one of his last public appearances before his death, Steven P. Jobs, Apple’s chief executive, addressed Cupertino’s City Council last June, seeking approval to build a new headquarters.

Most of the Council was effusive in its praise of the proposal. But one councilwoman, Kris Wang, had questions.

How will residents benefit? she asked. Perhaps Apple could provide free wireless Internet to Cupertino, she suggested, something Google had done in neighboring Mountain View.

“See, I’m a simpleton; I’ve always had this view that we pay taxes, and the city should do those things,” Mr. Jobs replied, according to a video of the meeting. “That’s why we pay taxes. Now, if we can get out of paying taxes, I’ll be glad to put up Wi-Fi.”

He suggested that, if the City Council were unhappy, perhaps Apple could move. The company is Cupertino’s largest taxpayer, with more than $8 million in property taxes assessed by local officials last year.

Ms. Wang dropped her suggestion.

Think different, indeed….

Suicide nets surround an iPhone factory in China

Quote of the day

David Broad recently addressed the increasingly contentious political situation in Canada, one defined by the economic reactionaries and their work to impose an austerity regime on the country. He briefly characterized the situation thusly:

The Tories [in Canada] are also using trivial smoke and mirror tactics in trying to keep Canadians from focusing on austerity, such as playing up the budget announcement of doing away with the one cent piece, with mainstream journalists joking about being “penny pinched,” etc. But indications are that many Canadians will not be so easily fooled, especially as their circumstances deteriorate. The majority of Canadian voters did not vote for and do not support the Harper Tories. Strikes and other trade union actions are on the rise in Canada, Aboriginal peoples are becoming more vocal, Canadian youth have been participating in the Occupy Movement, and students in Quebec have risen up to oppose postsecondary tuition increases. Conservatives are quick to chant that Quebec has the lowest tuition in Canada, not wanting us to consider that perhaps postsecondary education should be free for all. Conservatives are also working to vilify all youth activists, using youth “riots” as an excuse, denying that such “riots” are not simply senseless vandalism but only understandable as the frustrations of discouraged young people who see a society that has little future for them.

Paul Krugman on ALEC

ALEC is the acronym of the American Legislative Exchange Council, a self-proclaimed non-partisan think tank which drafts legislation which is often made into law by the various states. For instance, ALEC wrote for and promoted the “kill at will” or “stand your ground” legislation that recently resulted in the Trayvon Martin killing. As a consequence of its efforts in this matter, ALEC has become a focal point for the Justice for Trayvon Martin movement. ALEC has earned this critical attention for the Martin killing and for much else, including Scott Walker‘s attack on the state of Wisconisn.

Krugman’s description of ALEC is both accurate and critical in intent:

What is ALEC? Despite claims that it’s nonpartisan, it’s very much a movement-conservative organization, funded by the usual suspects: the Kochs, Exxon Mobil, and so on. Unlike other such groups, however, it doesn’t just influence laws, it literally writes them, supplying fully drafted bills to state legislators. In Virginia, for example, more than 50 ALEC-written bills have been introduced, many almost word for word. And these bills often become law.

Many ALEC-drafted bills pursue standard conservative goals: union-busting, undermining environmental protection, tax breaks for corporations and the wealthy. ALEC seems, however, to have a special interest in privatization — that is, on turning the provision of public services, from schools to prisons, over to for-profit corporations. And some of the most prominent beneficiaries of privatization, such as the online education company K12 Inc. and the prison operator Corrections Corporation of America, are, not surprisingly, very much involved with the organization.

What this tells us, in turn, is that ALEC’s claim to stand for limited government and free markets is deeply misleading. To a large extent the organization seeks not limited government but privatized government, in which corporations get their profits from taxpayer dollars, dollars steered their way by friendly politicians. In short, ALEC isn’t so much about promoting free markets as it is about expanding crony capitalism.

ALEC — the well-funded defender and promoter of crony capitalism, desiccated democracy, political opacity and unaccountability as well as the socio-political environment which nurtures economic predation. In the last instance, it appears that Trayvon Martin was just unlucky prey for ALEC and some of its tools (George Zimmerman, the Florida state legislators linked to ALEC who passed
Florida’s Stand Your Ground law, etc.). But it is wise to keep one’s attention on the fact that Trayvon Martin was prey because the most Americans are prey.

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Quote of the day

Addressing the political situation which can be found in the world today — a situation defined by an epoch-marking economic crisis, by popular resistance to the austerity programs allegedly meant to overcome the crisis and by Barack Obama’s dedication to completing the neoconservative imperial political project — Mike Davis wrote:

In great upheavals, analogies fly like shrapnel. The electrifying protests of 2011—the on-going Arab spring, the ‘hot’ Iberian and Hellenic summers, the ‘occupied’ fall in the United States — inevitably have been compared to the anni mirabiles of 1848, 1905, 1968 and 1989. Certainly some fundamental things still apply and classic patterns repeat. Tyrants tremble, chains break and palaces are stormed. Streets become magical laboratories where citizens and comrades are created, and radical ideas acquire sudden telluric power. Iskra becomes Facebook. But will this new comet of protest persist in the winter sky or is it just a brief, dazzling meteor shower? As the fates of previous journées révolutionnaires warn us, spring is the shortest of seasons, especially when the communards fight in the name of a ‘different world’ for which they have no real blueprint or even idealized image.

But perhaps that will come later. For the moment, the survival of the new social movements — the occupiers, the indignados, the small European anti-capitalist parties and the Arab new left — demands that they sink deeper roots in mass resistance to the global economic catastrophe, which in turn presupposes — let’s be honest — that the current temper for ‘horizontality’ can eventually accommodate enough disciplined ‘verticality’ to debate and enact organizing strategies. It’s a frighteningly long road just to reach the starting points of earlier attempts to build a new world. But a new generation has at least bravely initiated the journey.

Solidarity and self-organization, as Davis notes, provide the antidote to the dead weight of the neoliberal past. A revolution may be defined as an attempt to begin the world anew, to demolish posterity’s monuments and to debunk its idols. Surprisingly, the world today appears to be, Davis suggests, on the cusp of making such an effort. Antisystemic social and political entities have appeared in many places. They have pushed tyrants from power, made a few Eurocrats nervous and forced some of America’s politicians to acknowledge popular distress. Davis goes on to locate one system-wide source of an antisystemic solidarity:

The campus rebellions of 1968 in Europe and the us were spiritually and politically fuelled by the Tet Offensive in Vietnam, guerrilla insurgencies in Latin America, the Cultural Revolution in China and the ghetto uprisings in the United States. Similarly the indignados of the last year have drawn primordial strength from the examples of Tunis and Cairo. (The several million children and grandchildren of Arab immigrants to southern Europe make this connection intimately vivid and militant.) As a result, passionate 20-year-olds now occupy squares on both shores of Braudel’s fundamental Mediterranean. In 1968, however, few of the white youth protesting in Europe (with the important exception of Northern Ireland) and the United States shared the existential realities of their counterparts in countries of the South. Even if deeply alienated, most could look forward to turning college degrees into affluent middle-class careers. Today, in contrast, many of the protesters in New York, Barcelona and Athens face prospects dramatically worse than those of their parents and closer to those of their counterparts in Casablanca and Alexandria. (Some of the occupiers of Zuccotti Park, if they had graduated ten years earlier, might have walked straight into $100,000 salaries at a hedge fund or investment bank. Today they work at Starbucks.)

Globally, young adult unemployment is at record levels, according to the ilo — between 25 and 50 per cent in most of the countries with youth-led protests. Moreover, in the North African crucible of the Arab revolution, a college degree is inversely related to likelihood of employment. In other countries as well, family investment in education, when incurred debt is considered, is paying negative dividends. At the same time, access to higher education has become more restricted, most dramatically in the us, uk and Chile.

Behold — a growing and youthful lumpenproletariat, a sometimes well-educated group with little to lose. Their history, much like the death of the American empire, has yet to made.

Chairs moving around the deck

According to a New York Times report:

After crisis talks on Sunday night, Prime Minister George Papandreou and his main rival agreed to create a new unity government in Greece that will not be led by Mr. Papandreou, according to a statement released Sunday night by the Greek president, who mediated the talks.

Mr. Papandreou and the opposition leader Antonis Samaras agreed to meet again on Monday to hammer out the details. The name of the new prime minister is not expected until then.

The new government is intended to govern for several months to put in place a debt agreement with the European Union, a step European leaders consider crucial to shoring up the euro. Then it is to hold a general election and dissolve.

The new government will unify around imposing a new austerity regime on Greece. It will exist only to serve that end. To be sure, this will not be an all-inclusive political settlement. After all, the government will not include representatives of the Greek protesters who have made their will known on this matter. It will merely be a unified Greek elite who will stand alongside of European Union political elite.

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Be scared, be very, very scared

Paul Krugman, a card carrying member of the reality-based community, wrote:

Reading the transcript of Tuesday’s Republican debate on the economy is, for anyone who has actually been following economic events these past few years, like falling down a rabbit hole. Suddenly, you find yourself in a fantasy world where nothing looks or behaves the way it does in real life.

And since economic policy has to deal with the world we live in, not the fantasy world of the G.O.P.’s imagination, the prospect that one of these people may well be our next president is, frankly, terrifying.

Quote of the day

Paul Craig Roberts, long a conservative, wrote:

Economic policy in the United States and Europe has failed, and people are suffering.

Economic policy failed for three reasons: (1) policymakers focused on enabling offshoring corporations to move middle class jobs, and the consumer demand, tax base, GDP, and careers associated with the jobs, to foreign countries, such as China and India, where labor is inexpensive; (2) policymakers permitted financial deregulation that unleashed fraud and debt leverage on a scale previously unimaginable; (3) policymakers responded to the resulting financial crisis by imposing austerity on the population and running the printing press in order to bail out banks and prevent any losses to the banks regardless of the cost to national economies and innocent parties.

Later on, Roberts observed: “This is what economic policy in the West has become — a tool of the wealthy used to enrich themselves by spreading poverty among the rest of the population.” Roberts refers here to what James Galbraith called the Predator State. Roberts eventually concluded his article with:

For four years interest rates, when properly measured, have been negative. Americans are getting by, maintaining living standards, by consuming their capital. Even those with a cushion are eating their seed corn. The path that the US economy is on means that the number of Americans without resources to sustain them will be rising. Considering the extraordinary political incompetence of the Democratic Party, the right wing of the Republican Party, which is committed to eliminating income support programs, could find itself in power. If the right-wing Republicans implement their program, the US will be beset with political and social instability. As Gerald Celente says, “when people have have nothing left to lose, they lose it.”

One point I wish to make: I do not believe the Democratic Party is as incompetent as Roberts suggests; I do believe instead that the Democratic Party is as morally, culturally and politically bankrupt as the Republican Party, including that party’s most reactionary component. Competence is not the problem for the Democrats. The problem broadly considered can be found in the political commitments of the two parties and the structural constraints which make creating an opposition party and opposition movements so difficult. To my mind, this broadly construed problem reflects the essence of the duopoly party system: There exists no viable alternative to the status quo — it’s the duopoly parties and non plus ultra.

Words of wisdom from Riotstan

The Guardian today reports that the aristocrat George Osborne, currently Britain’s Chancellor of the Exchequer, feels optimistic about the future and Britain:

The chancellor used his emergency statement to parliament to say that recent events in the global economy had “vindicated” the government’s deficit reduction programme, putting in a bullish performance after the Bank of England downgraded its UK growth forecasts for the fifth time this year.

George Osborne made the second of two emergency government statements, speaking after nine days of economic upheaval and one day after Bank of England governor Sir Mervyn King warned of more economic “turbulence” ahead, saying “headwinds were becoming stronger by the day”.

In his statement, Osborne acknowledged this squall of bad economic news, saying the FTSE had fared badly in the past month. “The huge overhang of debt means the recovery will be longer and harder than we had hoped,” he said.

“This is the most dangerous time for the global economy since 2008, and we should be clear about that.”

But he sought to turn events to his advantage, telling parliament the UK had become a “safe haven” for stock markets in recent days, with the unpredictability of stocks making an investment in UK bonds more attractive. Referring to recent market turbulence, he said: “The market for our government bonds has benefited.”

Tory Realism

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Finding good sense in the Wall Street Journal

Economist Ha-Joon Chang rightly informs his readers that the first phase of the post-2008 recovery had a distinct Keynesian flavor, and included activist government and stimulus spending. Most governments eventually abandoned the Keynesian approach, replacing it with one that reflected neoliberal verities. Ha-Joon Chang believes the neoliberal approach will end in failure. His reasons focus on the false premises embedded in that approach. These premises are:

  1. Governments must reduce their deficits before a recovery can begin.
  2. Governments must reduce welfare spending
  3. Governments must reduce welfare spending in order to secure long-term growth
  4. It is a mistake for governments to tax the rich
  5. Governments must reduce or eliminate regulation in order to secure long-term growth

Succinctly put, Chang’s analysis reflects an approach to modern economies which treats them as demand-constrained, not supply-constrained. I can’t argue with that.

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