Green Capitalism

Is it an oxymoron or just a plain dumb idea? I believe we can easily guess Rob Urie’s answer to this question:

The bottom line is one of commensurability. Economic production that produces toxic externalities like global warming, dead oceans, undrinkable water, unbreathable air, etc, depends on assigning little or no value to these. To make this very clear, Western economic ‘accounting’ places no value on these, on the most fundamental necessities of living beings, by design. As Oscar Wilde put it, a cynic is someone who knows the price of everything and the value of nothing. This is in fact a summation of Western economics; circumscription of the ‘knowable’ world by what has had a price tag put on it. The externalized costs of capitalist production are real— more real than the stuff in stores that is only ‘cheap’ because the true costs were lobbed off on people who haven’t yet fought back. To Mr. Krugman’s argument, even if technological innovation did reduce carbon emissions the people who would reap the benefits are not the same people who will pay the consequences— more carbon emissions is more even if the rate of growth is reduced.

Global warming is but shorthand for the increasingly conspicuous fact that the quest for ‘stuff’ has turned the entire planet into a noxious garbage dump. This concern might rightly be considered effete if ‘we,’ broadly considered, could exist in the garbage that some of us have created. But as global warming suggests, we can’t. The time for gimmicks, ‘technology,’ was a half century ago. And unless you missed this, the West is still plenty rich— rich in approximate proportion to the social and environmental catastrophes that capitalism has wrought. The question today is who pays, not what the costs are.

Cynicism in politics?

Paul Krugman noticed the cynic at work in a recent Romney gaffe and its aftermath:

Speaking in Michigan, Mr. Romney was asked about deficit reduction, and he absent-mindedly said something completely reasonable: “If you just cut, if all you’re thinking about doing is cutting spending, as you cut spending you’ll slow down the economy.” A-ha. So he believes that cutting government spending hurts growth, other things equal.

Romney, it seems, is a closeted Keynesian, which is a sin against modern Republicanism far worse than being a closeted gay man!

Romney aide Ryan Williams quickly attempted to control the damage Romney’s lapse caused:

“The governor’s point was that simply slashing the budget, with no affirmative pro-growth policies, is insufficient to get the economy turned around. However, he believes that budget cuts — especially in the context of President Obama’s unprecedented spending explosion — are a step in the right direction. As he made clear in his economic plan, he believes that spending cuts that reduce the size of government and balance the budget are crucial to economic growth and job creation.”

How might we reconcile Romney’s claim about government spending cuts and Ryan William’s ‘explanation’? It so happens that the two cannot be reconciled. Market fundamentalism demands that one makes a choice. One is either a fundamentalist or not. Krugman cheerfully concludes from this episode that Romney “…is running a campaign of almost pathological dishonesty.” Krugman continues to mine this political gold:

Every one of the Romney campaign’s major themes, from the attacks on President Obama for going around the world apologizing for America (he didn’t), to the insistence that Romneycare and Obamacare are very different (they’re virtually identical), to the claim that Mr. Obama has lost millions of jobs (which is only true if you count the first few months of his administration, before any of his policies had taken effect), is either an outright falsehood or deeply deceptive. Why the nonstop mendacity?

As I see it, it comes down to the cynicism underlying the whole enterprise. Once you’ve decided to hide your beliefs and say whatever you think will get you the nomination, to pretend to agree with people you privately believe are fools, why worry at all about truth?

Of course, I want to mention here that Barack Obama openly played to his party’s base in 2008. They believed him to be a left-of-center reformer and a defender of the rule of law while President Obama has been anything but such. That difference, namely, the gap between candidate Obama’s rhetoric and President Obama’s actions, reflects the cynicism which inheres in his political project. That project culminated with his winning the election, taking power and then serving the interests of the moneyed elite that paid for much of his campaign.

Cynics act as their wishes demand. Principles, truth, honesty, good faith, humanity — these are just tools the politician-cynic uses in her quest for power, as Machiavelli explained centuries back:

Therefore it is unnecessary for a prince to have all the good qualities I have enumerated [see this chapter], but it is very necessary to appear to have them. And I shall dare to say this also, that to have them and always to observe them is injurious, and that to appear to have them is useful; to appear merciful, faithful, humane, religious, upright, and to be so, but with a mind so framed that should you require not to be so, you may be able and know how to change to the opposite.

And you have to understand this, that a prince, especially a new one, cannot observe all those things for which men are esteemed, being often forced, in order to maintain the state, to act contrary to faith, friendship, humanity, and religion. Therefore it is necessary for him to have a mind ready to turn itself accordingly as the winds and variations of fortune force it, yet, as I have said above, not to diverge from the good if he can avoid doing so, but, if compelled, then to know how to set about it.

For this reason a prince ought to take care that he never lets anything slip from his lips that is not replete with the above-named five qualities, that he may appear to him who sees and hears him altogether merciful, faithful, humane, upright, and religious. There is nothing more necessary to appear to have than this last quality, inasmuch as men judge generally more by the eye than by the hand, because it belongs to everybody to see you, to few to come in touch with you. Every one sees what you appear to be, few really know what you are, and those few dare not oppose themselves to the opinion of the many, who have the majesty of the state to defend them; and in the actions of all men, and especially of princes, which it is not prudent to challenge, one judges by the result.

For that reason, let a prince have the credit of conquering and holding his state, the means will always be considered honest, and he will be praised by everybody because the vulgar are always taken by what a thing seems to be and by what comes of it; and in the world there are only the vulgar, for the few find a place there only when the many have no ground to rest on.

Quote of the day

Paul Krugman, once again:

Financial markets are cheering the deal that emerged from Brussels early Thursday morning. Indeed, relative to what could have happened — an acrimonious failure to agree on anything — the fact that European leaders agreed on something, however vague the details and however inadequate it may prove, is a positive development.

But it’s worth stepping back to look at the larger picture, namely the abject failure of an economic doctrine — a doctrine that has inflicted huge damage both in Europe and in the United States.

The doctrine in question amounts to the assertion that, in the aftermath of a financial crisis, banks must be bailed out but the general public must pay the price. So a crisis brought on by deregulation becomes a reason to move even further to the right; a time of mass unemployment, instead of spurring public efforts to create jobs, becomes an era of austerity, in which government spending and social programs are slashed.

This doctrine was sold both with claims that there was no alternative — that both bailouts and spending cuts were necessary to satisfy financial markets — and with claims that fiscal austerity would actually create jobs. The idea was that spending cuts would make consumers and businesses more confident. And this confidence would supposedly stimulate private spending, more than offsetting the depressing effects of government cutbacks.

Quote of the day

Today, Paul Krugman ridiculed the Wall Street kvetchers:

You see, until a few weeks ago [before Occupy Wall Street] it seemed as if Wall Street had effectively bribed and bullied our political system into forgetting about that whole drawing lavish paychecks while destroying the world economy thing. Then, all of a sudden, some people insisted on bringing the subject up again.

And their outrage has found resonance with millions of Americans. No wonder Wall Street is whining.

Left critics of capitalism have long lived among and written for Americans. What these critics have heretofore lacked is a large, receptive audience. Wall Street can look towards its past and present excesses in order to explain the emergence of an America receptive to proscribed thinking. They have made themselves the sign of America’s economic troubles.

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 Krugman properly mocked the financial elite and their retainers in his Sunday Opinion piece:

It remains to be seen whether the Occupy Wall Street protests will change America’s direction. Yet the protests have already elicited a remarkably hysterical reaction from Wall Street, the super-rich in general, and politicians and pundits who reliably serve the interests of the wealthiest hundredth of a percent.

And this reaction tells you something important — namely, that the extremists threatening American values are what F.D.R. called “economic royalists,” not the people camping in Zuccotti Park.

John Sherffius

Quotes of the Day

As one would expect, yesterday’s stock market plunge elicited a broad response. Here are a few of the first-responders whose comments were mostly directed towards the United States:

Paul Krugman wrote an “I told you so” column:

In case you had any doubts, Thursday’s more than 500-point plunge in the Dow Jones industrial average and the drop in interest rates to near-record lows confirmed it: The economy isn’t recovering, and Washington has been worrying about the wrong things.

It’s not just that the threat of a double-dip recession has become very real. It’s now impossible to deny the obvious, which is that we are not now and have never been on the road to recovery.

Steve Pearlstein asked: “Why is this happening?” His “Short answer: Because we never really fixed underlying structural problems in the U.S. and global economies that had been building for decades and caused the financial and economic crisis in 2008.” (Pearlstein then goes on to recommend an IMF-style structural adjustment program for the United States, a policy choice that, if implemented, would turn a tragedy into a global catastrophe.)

Martin Weisberg looked at America, specifically, at Washington, DC, and found a political catastrophe that will have enduring economic consequences:

It is difficult to remember a more dismal moment in American politics. The debt ceiling crisis and the agreement that ended it point to deep dysfunction in our system. In a variety of ways, the episode portends continued short-term economic misery and long-term national decline. It is as if the US chose at the last minute not to commit financial suicide — but only out of preference for a slower, more excruciating form of self-destruction.

The crisis has, however, been clarifying in several respects. We can now say with some confidence that Washington will be doing nothing more to help the ailing economy. President Barack Obama is trying to push an employment agenda. But for the federal government to spur growth or create jobs, it has to spend additional money. The antediluvian Republicans who control Congress do not think that demand can be expanded in this way. They believe that the 2009 stimulus bill, which prevented an even worse economy over the past two years, is responsible for the current weakness. Their approach of depression economics — embedded in the debt ceiling compromise — demands that we address the risk of a double-dip recession by cutting public expenditure immediately.

So instead of trying to pull out of the stall, the US economy will simply have to absorb whatever blow is coming.

Ezra Klein made these remarks about the clarity of vision found within America’s Versailles on the Potomac:

A dramatic gap has opened between the economy as Washington sees it — and wants to intervene in it — and the economy that exists. Whatever weak recovery we might have hoped for is being hindered by global commodity prices, consumer deleveraging, fears of flagging demand in emerging markets, earthquakes in Asia and much more. Globally, it’s been an almost uninterrupted run of crises and bad luck. Meanwhile, Washington just spent two months arguing over whether it would pay its bills or spark an unnecessary financial crisis.

I confess that I find it difficult to avoid spoiling myself with a bit of Schadenfreude over this recent stock market outcome. I have indulged myself because the stock market plunge aptly punctuates the ridiculous political calamity that was the Debt Ceiling Debate. The political elite wanted us to believe that addressing the deficit by cutting spending during a recession was the reasonable, adult and necessary solution for the country to adopt. Nevertheless, the stock market concluded otherwise. Market instability such as this brings with it a portentous expectation of another recession in the United States and around the world. Life could become riskier and harsher than it had been if another recession follows. Disaster capitalism indeed.

In conclusion, I will quote Bill Mitchell who stated what ought to be obvious to everyone but which is mostly ignored in the classless society found the United States:

My phone has been ringing a lot with journalists seeking my views on what is going on and radio stations lining up interviews and “news grabs”. There is a sense out there that we are sliding backwards quickly into financial collapse and recession. I sensed some panic today among the press. And they won’t believe me when I tell them it is a crisis but a totally confected crisis that has origins in class conflict (the top-end-of-town seeking ways to get more of the real output for themselves).