“Corporations Are Artificial, Too”: Modern Corporate Capitalism Is Anything But Natural
One of the reasons it’s difficult for liberals to easily and effectively win arguments about economics with conservatives is that conservatives have a very simple mantra: let the natural forces of the market do their work. Government is seen as an interloper and distorter of Darwinian forces that would otherwise ultimately let all goods and services achieve their perfect prices with maximum efficiency.
There are a number of gigantic problems with that worldview, of course. The free market refuses to pay for a wide variety of crucial infrastructure items and investments in public health and safety; consumers are at an information and power disadvantage against unscrupulous companies; and human life and dignity are unacceptably cheap on the open market.
But there’s another key lie in the conservative “natural economy” story, which is that modern corporate capitalism is anything but natural. It’s an artificial system encoded arbitrarily into law and interpreted in a specific way that tends to give maximum advantage to executive and shareholders at the expense of society. Kent Greenfield examined right here at Washington Monthly one way in which that is true: the Dodge v. Ford case that explicitly denied corporations the right to engage in more socialistic practices and demanded that they only serve the bottom line for their shareholders. The corporate veil itself another artificial legal construct, as is the notion of corporate personhood.
Our society is built on rules and regulations, all of them socially and legally built out of artifice. That is just as equally true of business as it is of government.
By: David Atkins, Political Animal Blog, The Washington Monthly, January 24, 2015
“GOP Thinks The 47 Percent Aren’t Trying Hard Enough”: News Flash, Middle-Class Rowboats Are Taking On Water
Remember the “47 percent”?
During his 2012 campaign for the presidency, Mitt Romney was caught on tape describing nearly half the country in disparaging terms, labeling them moochers who want handouts. They are voters “who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it,” he said.
Romney’s remarks — and he stood by them immediately after his election defeat — didn’t just damage him; they also sullied the entire Republican Party, reinforcing its image as the lapdog of the very rich. Even now, as some of its strategists push hard for the GOP to reach out to ordinary working folks, its congressional leaders continue to protect the 1 percent.
If President Obama has no hope for passage of his ambitious program of “middle-class economics,” as he called it during last week’s State of the Union speech, at least he has a plan. His proposals for free community college, increasing the minimum wage and providing tax cuts to families in the middle of the economic spectrum have the advantage of recognizing the reality of income inequality.
So far, his GOP critics continue to resist that reality, sticking to the old Reagan-era bromide that a “rising tide lifts all boats.” Perhaps that’s true, but those middle-class rowboats are taking on water even as the rich float along comfortably in their yachts.
The growing gap between the haves and the have-nots is one of the most critical issues of our time, a dispiriting trend that has struck most Western economies. Because of complex forces, especially globalization and technology, the incomes of ordinary workers are falling further and further behind, even as the rich get, well, richer.
That’s not the fault of Democrats or Republicans, Libertarians or Socialists. Nor did this growing inequality start with the Great Recession. It started way back in the 1970s, as the factories that had powered the middle class started to shut down. American steel mills closed; textile mills went away; automotive plants moved out. The trends have simply accelerated since then, as robots power assembly lines and low-wage workers in places like Bangladesh sew garments once made in Maine and North Carolina.
Even now, in a resurgent economy, many families haven’t regained their footing. Their savings accounts have evaporated. They can’t replace the house they lost to foreclosure. They work two or three part-time jobs without benefits. And even those with full-time jobs aren’t living it up. According to The New York Times, the median weekly wage for full-time workers at the end of 2014 was $796, below the levels in 2009, when the expansion began.
Those workers are hardly moochers. They are struggling to find their way in a world where their skills have less value. They need help from a government that knows its role is to lend a hand, to steady the ladder, to help them find a toehold.
Even Romney, who is making noises about running again, has finally gotten the message. He has at least called for an increase in the minimum wage.
But most Republicans can’t get over the notion that those who haven’t made it simply aren’t trying hard enough, that if you’re stuck on the economic margins, it’s your own fault. Their allegiance to the very rich — people like the billionaire Koch brothers — overrides any concern for the vast middle.
Take their insistence on resisting tax increases for the 1 percent — a plan proposed by Obama to pay for tax cuts for the middle and working classes. Republicans claim any tax hikes would kill the recovery. But that’s not so. George W. Bush’s tax cuts led to no new job growth, while Bill Clinton, who raised taxes, presided over a period of widespread prosperity.
So what do Republicans propose? So far, they’ve pushed building the Keystone pipeline, which would create about 42,000 jobs over a period of two years, but only about 35 permanent jobs. And, of course, the GOP still wants to kill Obamacare, a strategy that would create zero jobs.
That’s not much better than dismissing the 47 percent.
By: Cynthia Tucker, The National Memo, January 24, 2015
“Deliberate And Systemic”: Inequality Isn’t Inevitable, It’s Engineered. That’s How The 1% Have Taken Over
Who will look after the super-rich and think about their needs? It’s not easy for them: the 1% of the world’s population who by next year will own more global wealth than the 99%. Private security costs a fortune, and with the world becoming an increasingly unequal place a certain instability increases. It could be dangerous!
Very smartly, Oxfam International is raising such questions at the World Economic Forum at Davos, where the global elite gather to talk of big ideas and big money. Oxfam executive director, Winnie Byanyima, is arguing that this increasing concentration of wealth since the recession is “bad for growth and bad for governance”. What’s more, inequality is bad not just for the poor, but for the rich too. That’s why we have the likes of the IMF’s Christine Lagarde kicking off with warnings about rising inequality. Visceral inequality from foodbanks to empty luxury flats is still seen as somehow being in the eye of the beholder by the right – a narrative in which poverty is seen as an innate moral failure of the poor themselves has taken hold. This in turn sustains the idea that rich people deserve their incredible riches. Most wealth, though, is not earned: huge assets, often inherited, simply get bigger not because the individuals who own them are super talented, but because structures are in place to ensure this happens.
Most of us – I count myself – are economically inept. The economic climate is represented as a natural force, like uncontrollable weather. It’s a shame that the planet is getting hotter, just as it’s a shame that the rich are getting richer. But these things are man-made and not inevitable at all. In fact, there are deliberate and systemic reasons as to why this is happening.
The rich, via lobbyists and Byzantine tax arrangements, actively work to stop redistribution. Inequality is not inevitable, it’s engineered. Many mainstream economists do not question the degree of this engineering, even when it is highly dubious. This level of acceptance among economists of inequality as merely an unfortunate byproduct of growth, alongside their failure to predict the crash, has worryingly not affected their cult status among blinkered admirers.
Even the mild challenge of Thomas Piketty, with his heretical talk of public rather than private interest being essential to a functioning democracy, is revolutionary in a world which buys the conservative idea that the elixir of “growth” simply has to mean these huge extremes in income distribution.
That argument may now be collapsing. The contortions that certain pet economists make to defend the indefensible 1% are often to do with positing the super-rich as inherently talented and being self-made. The myth is that everyone is a cross between Steve Jobs and Bono; creative, entrepreneurial, unique. The reality is cloned inherited wealth and insane performance-related pay, eg the bankers who continue to reward themselves more than a million a year after overseeing the collapse of the industry.
There are always those who will side with the powerful against the powerless, and economists specialise in this. No wonder Prof Gregory Mankiw’s Harvard students walked out of his class following his ludicrous insistence that the system is not gamed for the rich. Such “theorists” flatter the rich by granting them some superpower, which is why they like rock star comparisons. In fact, international finance is peopled by interchangeable guys who are essentially just paying themselves double what they were 10 years ago. They may need to think of themselves as special. We don’t have to.
When we talk of neoliberalism, we are talking about something that has fuelled inequality and enabled the 1%. All it means is a stage of capitalism in which the financial markets were deregulated, public services privatised, welfare systems run down, laws to protect working people dismantled, and unions cast as the enemy.
Oxfam’s suggestions at Davos are attempts to claw back some basic rights, with talk of tax, redistribution, minimum wages and public services. But isn’t it rather incredible that a charity has to do this? The Occupy movement has dissipated, but we are seeing in Europe, primarily in Greece and Spain, a refusal to accept the austerity narrative that we appear to have wolfed down here in the UK.
Oxfam can appeal to the vanity of billionaires, but the truth is that’s not enough. The neoliberal project may fail not because of huge protest, but because reduced income means reduced demand. Never mind the angry proletariat, a disappointed middle-class is something all politicians fear. To stem inequality, it is imperative to stop seeing it as inevitable. It’s a choice. A choice very few of us have any say in. The poor are always with us. And now the deserving and undeserving super-rich are too? That’s just the way things are? No. This climate can also change.
By: Suzanne Moore, The Guardian, January 20, 2015
“Paths To The Presidency”: John Kasich And The Road Less Taken, Because It Goes Nowhere
Last month I spent a few minutes mocking a Cleveland Plain Dealer story that suggested big donors might hunt down Ohio Gov. John Kasich as he traipsed around the Mountain West plumping for a balanced budget constitutional amendment, and beg him to become the 2016 Republican presidential nominee. I half-thought the story was the product of somebody in Kashichland funnin’ a local reporter. I mean, really, a guy as seasoned as Kasich didn’t really think that was a viable strategy for becoming Leader of the Free World, did he?
But now we have a Wall Street Journal piece from the veteran national political reporter Janet Hook reporting the same madness:
If Ohio Gov. John Kasich is thinking of running for president, he’s taking a very circuitous route. Mr. Kasich, one of several Republican governors seen as potential candidates, is spending much of this week traveling through six sparsely populated Western states to promote balancing the budget.
Fresh off his inauguration to a second term as governor, Mr. Kasich is travelling from South Dakota to Wyoming to Idaho in a tour that ends Friday. He is trying to round up support for a constitutional amendment requiring a balanced federal budget — even as fiscal issues seem to be fading in Congress.
But then, after reporting that Kasich doesn’t admit this odd out-of-state travel schedule means he’s running for president, Hook cites it as one of several “paths to the presidency,” alongside those more conventional candidates are pursuing:
Mr. Kasich is part of a distinct posse of potential candidates — Republican governors that include Wisconsin Gov. Scott Walker, Indiana Gov. Mike Pence and outgoing Texas Gov. Rick Perry — who are angling to use their states’ records as calling cards in a bid for national office.
Mr. Kasich is proud of Ohio’s economic turnaround, and of his 2014 re-election by more than 30 percentage points. He has been trying to espouse a new brand of compassionate conservatism, supporting an expansion of Medicaid in his first term and saying in his second inaugural address, “Somehow we have lost the beautiful sound of our neighbors’ voices. Moving beyond ourselves and trying to share in the experience of others helps us open our minds, allows us to grow as people.”
But he is pairing that big-hearted message with fiscal conservatism, his trademark issue during his 18 years in Congress when he played a lead role in crafting a 1997 deal to eliminate the federal budget deficit.
So Ohio Record (including the kryptonite-to-conservatives Medicaid expansion) plus Balanced Budget somehow equals viable candidacy. It’s not easy to understand how, mechanically, anyone would win the nomination this way, unless Hook is buying the idea big donors will track him down somewhere in the Rockies and beg him to run.
You know what I think? A lot of MSM types think Kasich ought to be the kind of candidate the Republicans nominate, and that fiscal hawkery–the only part of the Constitutional Conservative ideology they understand–could be his ticket to ride.
Beyond that, there are an awful lot of people who think the current presidential nominating process, and particularly the role of the early states, is absurd, and would love to see someone defy it. But it keeps not happening. The last two serious candidates who tried to skip the early states–Democrat Al Gore in 1988 and Rudy Giuliani in 2008 (well, he didn’t originally plan to skip the early states but shifted away from them when support was not forthcoming) went nowhere. Perhaps someone with a massive national following and special credibility with the conservative activists who view the early states as their God-given choke point on the GOP nomination could get away with starting late and elsewhere. But not John Kasich.
By: Ed Kilgore, Contributing Writer, Political Animal Blog, The Washington Monthly, January 23, 2015
“No Sense Of History”: John McCain; ‘Everything I’ve Predicted … Has Come True’
Sen. John McCain (R-Ariz.) has reason to be pleased with his recent promotion. In the wake of the 2014 midterm elections, his party is not only in control of the Senate, but the Arizona Republican is now chairman of the Senate Armed Services Committee, a post he’s reportedly wanted for quite a while.
But when the senator looks around the world, he isn’t pleased at all.
“We are probably in the most serious period of turmoil in our lifetime,” said the 78-year-old Republican from Arizona, whose control of the committee is the culmination of decades of tenacious advocacy for a muscular foreign policy. “Everything I’ve predicted, unfortunately, has come true, whether it be in Iraq or whether it be Syria.”
The notion that all of John McCain’s predictions have “come true” isn’t just a bizarre boast, it’s also laughably and demonstrably untrue. As Rachel put it on the show awhile back, “Let the record show, John McCain was wrong about Iraq and the war in Iraq in almost every way that a person can be wrong about something like that.”
But it’s this argument, which McCain has made before, that we’re seeing “the most serious period of turmoil in our lifetime” that seems especially odd.
As we discussed the last time the senator made this assessment, McCain’s lifetime includes the entirety of World War II, Vietnam, and the Cold War. To suggest turmoil is greater or more “serious” now may be politically convenient – one assumes McCain is both eager to blame President Obama for unrest and anxious to make the case for more wars – but it’s also completely at odds with reality when considered in a historical context.
Dylan Matthews noted last week, “If anything, the world is safer than it’s ever been. The threat of nuclear exchange between the US and the Soviet Union has lifted. Great power wars of the kind that plagued Europe until 1945 are a thing of the past. Peoples’ odds of dying from violence, including warfare, have never been lower.”
I’m also reminded a good piece from Fareed Zakaria along the same lines, noting conditions in 1973, the year McCain was released from a Vietnamese prison. That year, Zakaria noted, several hundred thousand people died as a result of the war in Vietnam, tens of thousands died in the Yom Kippur War, OPEC imposed an oil embargo, and Cold War tensions pushed the United States literally to DEFCON 3.
Today’s world is unpredictable, but it doesn’t compare with the kinds of geopolitical dangers that existed for decades during the Cold War, not to mention before that period. […]
For all the problems, let’s keep in mind that we live today in a world with considerably fewer dangers. Nuclear war is unimaginable. The Russian-American nuclear arsenals are down to one-fifth their size in 1973 and at a much lower level of readiness. In 1973, Freedom House published its first annual account of political rights around the world. At the time, countries listed as “not free” outnumbered “free” countries. Today that is inverted, with the number of “free” countries having doubled. Open markets, trade and travel have boomed, allowing hundreds of millions to escape poverty and live better lives.
Of course there are crises, problems and tensions around the world. But no one with any sense of history would want to go back in time in search of less turmoil.
Around the same time, President Obama delivered remarks to White House interns and stressed the same point: “[D]espite how hard sometimes the world seems to be, and all you see on television is war and conflict and poverty and violence, the truth is that if you had to choose when to be born, not knowing where or who you would be, in all of human history, now would be the time. Because the world is less violent, it is healthier, it is wealthier, it is more tolerant and it offers more opportunity than any time in human history for more people than any time in human history.”
This isn’t to say that peace and stability reign around the globe. That’s never been the case, and it probably never will be. But to see alarming developments, here and abroad, as evidence of a world unraveling is to focus far too much on the trees and not enough on the forest.
McCain has been around for real periods of international turmoil. It’s easy, and perhaps ideologically satisfying, to insist conditions are worse now, but by literally no measure is that assessment accurate.
It’s likely that the senator has a political goal in mind: if Americans believe the world is coming apart, and that instability is scary, maybe the public will blame the president and reward McCain and his allies. Perhaps McCain will even persuade people that a few more wars will ease global tensions and paradoxically reduce violence.
But reality suggests no one should take his rhetoric seriously.
By: Steve Benen, The Maddow Blog, January 23, 2015
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