The Obama Hopemobile

Will we see a complete breakdown of the Obama Hopemobile (not to be mistaken for the Popemobile) by summers end? The collective anxiety of all who still retain a smidgen of faith in the Democratic Party is tangible. From the newspapers columnists, to the jabberwocky TV talking heads, to the windbag scribblers (like yours truly) producing unread (and unreadable?) blogs - everyone is watching and waiting. The whole idea that we can elect someone as our El Presidente and that one person will miraculously “fix things” is actually pretty naive. Barack Obama, the best of the litter, in terms or electable pols, had fashioned over time a political persona well to the right of any thinking person’s views - professional reactionaries (right wing talk show hosts, Fox TV performers and so-called "conservative pundits") excluded. If the truth were known on most issues I’m sure Obama would prefer a position well to the left of where he stands. But as his erstwhile minister, Reverend Wright, said as Obama skedaddled away from is former views, “what do you expect, he’s a politician.” He had to create an electable entity. A Ralph Nader or a Dennis Kucinich position on the issues would have doomed his enterprise from the start. We know that in order to be taken seriously by the managers of the hegemony, ‘acceptable positions’ on the issues must be assiduously taken.

We have grown weary of expecting much. We are so conditioned to seeing good ideas shrunk down and beaten into mush. And if anything requires courageous confrontation with the imposing and powerful corporate forces, forget it (read: a Single Payer plan was never even discussed in polite company.) If anything requires a breathtaking break with the past, a past that has failed us dismally, forget it. If anything requires exposure of the drooling, corrupt, reactionary, power hungry pack of hacks that hide behind the label Republican Party, forget it. Anyone with a grain of objectivity and the wits of an intelligent 12 year old knows that things are in a rapidly accelerating downward vortex – the US economy, global capitalism, the environment, the water supply, the weather. For christ’s sake we wont’ be able a get fish sandwich in couple of years if the world’s fisheries keep collapsing.

The US spends the most per-capita on health care of any country in the world and yet we are 32nd in infant mortality (UN statistics) well behind our long-time nemesis Cuba at 28th. As the recession grinds on and layoffs continue thousands lose their health insurance every day. 46 million of us wing it without any health insurance at all, knowing full well if we get seriously ill or get racked up bad in an accident, we are up Poop Creek big time. And yet it seems all heaven and hell is aligned against Obama getting even a modest and conservative plan intact through Congress.

And the plan that is being offered is indeed modest to a fault. The money machines, called health insurance companies, are being left intact - free to bamboozle and gouge again. The various others industries that make up the vast resource-gobbling medical-industrial complex that have morphed into virtual vampires are free to keep on sucking. The docs’ comfortable 6 and 7 figure incomes are not at risk. No, nobody as far as it now looks is going to take much of haircut on this. In fact that’s its key weakness - it’s going to cost a lot of money. In fact it's being deemed as “too expensive” especially for the right wing of Obama’s own Democratic Party, the Blue Dogs, who had no trouble voting for George W. Bush’s (a Prez from the opposition party no less) ‘supply side’ baloney tax cut for the rich, or for two wars - one totally unfounded and un-funded.

Only a small brave contingent of members of Congress were ever interested in discussing a real plan, a plan like every other industrialized country has – a Single Payer system. This would mean clearing the table of all the greed heads and parasites, and starting over. It would also mean doing what we are already doing for the senior citizens with Medicare, having the government take over the insurance side. We already have “medical socialism.” It’s called Medicare and Medicaid – for the old and for the (very) poor. With Single Payer the delivery would stay the same but all the payments would go through one big not-for-profit insurance company, the US government. I never hear the oldsters complaining about the “rationing of health care” under Medicare. But that said, some way to ‘de-incentivize’ gaming the system is crucial. Medicare works but costs way too much. And drives up the cost of the entire system. This is because Medicare t is based on fee-for-service not final outcomes. The more service rendered the more money collected. And forget Medicaid, it’s a loser because it relies half on the states. So it’s not uniform. Poor states provide poor coverage. The poor always get the feces dipped end of the stick. But Medicare is different. Everybody if they live long enough is entitled to it. It has been called the Cadillac of health care. But it costs us as taxpayer’s a fortune. It is not actuarially sound. It needs to be reworked, will have to be reworked even if Obama's initiative fails. When the baby boomers all become eligible, Medicare costs will knock us for a loop. The way Medicare is structured everybody has an incentive to maximize service, the suppliers, the providers, the users. And all of this is circumscribed in a law suite rich arena with malpractice lawyers waiting on the sidelines like vultures for the occasional (or not so occasional) error or adverse outcome that can be interpreted as an "error." So expensive tests and others services are maximized both for pecuniary reasons and to fend off potential malpractices suites. And then there is the expensive malpractice insurance that physicians must carry.

The Senate Majority Leader, Harry Reid has announced the Senate will fail to deliver a bill by their August recess. As I write this, the whole thing is tied up the Senate Finance Committee (see http://www.nytimes.com/2009/07/28/us/politics/28baucus.html?hp) chaired by one Sen. Max Baucus from a big but unimportant, conservative, under populated western state - Montana. Baucus is known as a Blue Dog Democrat, a term meaning he is essentially a Republican calling himself a Democrat. The lack of unity of Democrats on this centerpiece issue is pathetic. Letting a small contingent of center-right Democrats hold all that has been already hashed out hostage is beyond tragic. How does this shit happen? The Blue Dogs essentially buy the arguments of the Republicans most of who would like nothing better than the whole thing to collapse into a pile of broken pieces as did the Clinton plan of ’92. The Blue Dogs allied with the Republicans are opposing the fundamental cost control mechanism, a government run option, that would compete with and corral in the money machine health insurance plans. They, the Blue Dogs, good “Republicans” that are see it as is “too socialistic.” Furthermore the Blue Meanies think it should be funded by those who already have health insurance, by reducing existing tax deductions. They are opposed to increasing the tax on the upper income biggies ($250,000 per year and up) whose after-tax income has skyrocketed in the previous Bushian era.

At lot hangs in the balance but at this point it doesn’t look good. Any bill that emerges will be a target rich environment for the mob of Red Meanies (Repubs) that want it to fail (or even worse are afraid it might actually work.) It could fail in two other ways, too: either being too comprised and watered down to get support from those who have carefully championed this for so long, the progressive and majority wing of the Democratic Party or Obama, himself. Or it gets rammed through but it’s a stinker and fails to perform because of its own internal contradictions - another way the Repubs could win big.

The problem is the Democrats in general and Obama and Harry Reid specifically are not big on playing hardball. That’s the one thing the Republicans have going for them, they are absolutely ruthless - they love hardball, and could care less about collateral damage or the truth.

The Day the Earth Stood Still

A person who hates or distrusts humankind is called a misanthrope. Maybe I’m not yet at the hating level yet but certainly I am well into the ‘distrusting’ zone. I’m starting to believe human beings are simply ‘no damn good.’ The remake of the movie The Day the Earth Stood Still played with this misanthropic perspective. But unfortunately it was a crummy movie. Expensively made with high production values, it was the usual blockbuster dreck. It features terrible acting by Keanu Reeves in a role that actually requires him to be stiff and boring, much lame dialogue, some extremely annoying characters (Jennifer Connelly’s character’s kid is an unpleasant whinny little dreadnaught-haired jerk) and the usual over-reliance on big buck computer generated graphics to blow lots of big things up in a big way. Yet, the basic concept had promise, an updated more broadly misanthropic version of the 1952 version’s more simplistic anti-militarism message.

In the original version the aliens arrive in a modest little 1950s scale “flying saucer” and try unsuccessfully to bring about world peace but wind up mounting a massive defensive retaliation against our puny array of laughably ineffective weaponry. This time, besides the usual defensive retaliation against our primitive peashooters, the aliens have decided they must destroy us to protect the planet from us. An intergalactic confederation somewhere has decided we are destroying a very unique life supporting celestial vessel, our Planet Earth, and we must be stopped since we are incapable of change. The concept had great promise. Too bad the movie turned out to be an unwatchable mess that required recourse to the Eject Button before anything was actually resolved. But judging from how things were going, it would no doubt have been resolved in the finest Hollywood tradition. One of the lead characters would heroically, individually, ruggedly save the entire human race, the entire planet and maybe even the entire universe. Ho hum.

When one starts seeing the human race as unredeemable, the idea that this movie was working with, one is inadvertently backing into the concept of ‘original sin.’ If you accept the idea of original sin, or more secularly, the inherent limitations of the human animal, it stands to reason our morally challenged nature will be reflected in all of our institutions.

One prime example of this is that we have inserted (and even promoted to almost a virtue status) the once widely reviled sin of greed to be the actual mainspring of our economic order, known as Capitalism. So is it any wonder that we are constantly ill served and often in crisis if we have a system of resource allocation that encourages a known form of misbehavior? Yet even if "greed" is formally if not effectively removed from the equation in a collectivist alternative, such as Socialism, other “sins” or in secular terms “human defects” reassert themselves and undermine the operational integrity of said revised arrangement. Such ignoble human characteristics as pride (careerism, egotism and the will to power) and sloth (manifested as alienation, insubordination, alcoholism and lack of pride in workmanship) reemerge. At least they did in the prime model of ‘real existing socialism’, the erstwhile Soviet Union. But they had other serious disadvantages working against them, too, such as no tradition of democracy. But that’s another story.

And then there is that other major human institution, ‘our font of moral redemption’, our commonly accepted means to ‘explain the inexplicable’, the very underpinning of all of our cultures: Religion. Second only to the timeless struggle over issues of simple tribal dominance, nothing has caused more wars than disagreements over religious doctrine especially when linked with religio-political ideologies like Theocracy or monarchical Divine Right. Furthermore, religion as an institution is failing dismally to address our lemming-like march toward global ecological suicide. Stewardship of the planet seems to be never even on the radar of the most activist and troublesome fundamentalist sects such as Muslim jihadists, Israel’s ultra-orthodox Judaic sects and American evangelical Christians and their rabid ‘right-to-life’ movement. In fact religiously inspired horrific Jihadist terrorist spectacles such as 9-11 and the fascist reaction of the Bushian-led US government have served as a major distraction from serious recognition of the gravity of our present ever-worsening environmental crisis.

So as we end the first decade on this new millennium, humankind remains bitterly divided. Scores of nation states continue in confrontation, individually or as members of alliances with a small group of larger, more powerful nation states retaining their economically exploitive and politically dominate status. This while doomsday nuclear weaponry threatens to continue to spread to ever less coherent political entities. Add to this the diverse religious, ethnic and racial tensions that often mutate into hatred and distrust. Sitting astride this whole mess is a self-interest driven global ruling class, unacknowledged by a corrupt corporate controlled Fourth Estate, and operating primarily behind the scenes. These puppet masters pull the strings of the world’s elected and un-elected “leaders.” Despite idealistically conceived global institutions such as the United Nations that are intended to harmonize and unify, these nation states remain a quarrelling dysfunctional family. This ongoing Spectacle serves as constant distraction from the ongoing massive transfer of global wealth into ever fewer hands. This redistribution upward occurs whether the world economy sputters in recession (as now is) or hyperventilates itself another financial bubble.

This perpetual global discord and continuing spirit of nationalistic Darwinian survival- of-the-fittest distracts us from our ‘forced march to oblivion’ as the entire planet overheats. Scientists keep reminding us that this planetary overheating is fostering cascading changes through little understood feedback loops resulting in ever more grave and unpredictable secondary effects. And yet we dither while our resource devouring war machines, our atavistic internecine religious squabbles and our ever recurring geo-political maneuvering continues to distract and immobilize. All the while an ever-growing portion of the world’s myriad life forms, human and non-human, struggle for the means for survival.

Against this is a feeble and cacophonous resistance by a hodgepodge of liberals, leftists, religious do-gooders, journalists, intellectuals and artists of all stripes, each who contain within themselves a personal mixture of vanity, lust, ambition, self-absorption and other human frailties and shortcomings. So the “resistance” has no lock on being defect-free. Yet where would we be without these people throughout history - resisting slavery, monarchy, child labor, apartheid, torture, nuclear weapons, war and so on. Some small improvements have been made over the years (few would try to defend slavery these days.) But progress is always subject to reactionary reversal as has occurred in the ‘dark sided’ days of Bush/Cheney. Will any further progress be made? Barack Obama claims to be on the side of human progress. We shall see…

Obama’s latest oratorical performance

While working on my latest painting (an Edward Hopperesque rendition of a seedy beach motel near where I live, the Sea Breeze), I listened on the radio to Barack Obama’s latest oratorical performance – his February 24th “State of the Union (Economy)” address to Congress. Obama is the first US president in my lifetime that I can stand to listen to for extended periods of time without wanting to regurgitate. I was too young and air headed to be interested in politics when JFK was around. Bill Clinton was smart enough. He could to reel off data and policy and complex thoughts without notes and all, but I always felt like he was a patent opportunist setting his sails to the prevailing political winds, what with all of his ‘triangulation’ and Republican-Lite domestic policies and ‘aggro’ international endeavors like bombing Belgrade (even as the real Republicans abhorred him for stealing their thunder as they rushed ever further to the right.) The rest of them I positively hated hearing speak, especially the so-called “Great Communicator” himself, Ronald Reagan. His phony avuncular grandfatherly style always left me cold, and the implications of his message left me angry and fearful. Richard Nixon used false sentiment and the usual patriotic treacle to cover his serious pathological addiction to power. Jimmy Carter was simply a disappointment with his good intentions and inept implementation; was this the best we could do after the crashing and burning of the Republican Party under Nixon? Of course, after eight long years of W. Bush’s bumbling torment of the English language trying to explain away his disastrous policies ineptly using intellectually dishonest constructs (and outright lies) cobbled together by of his stable of hack speechwriters, anyone would sound like Abraham Lincoln or Clarence Darrow. So Obama has it made in that regard. He is an excellent speaker with something of substance to say - and a program that I more or less agree with. Like a good college instructor, he his both interesting and informative.

But with things the way they are Barack Obama had his work cut out for him. His speech last week had to provide both necessary balm to a nation that is reeling from a quintuple whammy - and provide hope. Americans are being knocked silly by at least five interrelated shocks to their systems. First we have a plunge in material well-being like none I have seen in my lifetime. Virtually the entire middle and upper middle class is now suddenly poorer as the value of their primary asset, their house, continues to sink like a rock. Secondly, personal and family nest eggs are broken and running out of the cartons and all over the counter top as their stock market investments and the value of their 401Ks continues in free fall. The third factor is the profound loss of confidence in the very (de)regulatory establishment, itself. The government allowed the entire banking system to implode due to an appalling instance of greed and collective irresponsibility by Wall Street as they milked vast wealth out of the ever-expanding housing bubble. Now that the bubble has burst, the same fuckers have the supreme audacity to “request” hundreds of billions of taxpayer dollars to staunch the financial bleeding of their banks and investment houses. Yet despite the grudging largess of the taxpayers for so far 350 billion bucks and counting, the whole thing remains dysfunctional as ever with credit still frozen solid. The financial crisis (now worldwide) acts on the recession like supercharger moving it ever closer to into the category of yes - a Depression. So now, whammy Number Four - millions (billions worldwide) now face unemployment as the downturn feeds on itself and losses mount in more and more industries resulting in evermore workers hitting the bricks. Finally Number Five in this ‘quintuple whammy’ and the basic problem that started it all: foreclosures. Millions are losing their homes due to foreclosures as mortgage payments reset on properties whose values are plummeting. Neighborhoods formerly full of proud homeowners, being a homeowner was the primary element of the so-called American Dream, are now ghost towns. Of course, as in all economic processes it feeds on itself and the emptied housing tracts and neighborhoods lead to ever more of decline in housing values as unsold housing stock accumulates in aggregate.

Into this maelstrom young Mr. Obama has placed himself. His speech Tuesday night will only be remembered if his grandly ambitious plans work out as we all hope it does (except for that fat ass Rush Limbaugh and his Brown Shirt contingent on the far right). Even if we were not in an economic crisis of yet unknown magnitude with so far only hypothetical (and cautious) remedies being proposed and with no one really sure what will actually work, he would be in hot water. So much damage, irrespective of the current economic crisis, was done by Bush and his cabal of Republican Party Neanderthals in Congress, not to mention the neoconservative ideologues who commandeered his foreign policy and drove it over the cliff, Obama would be totally overwhelmed with just the clean up work. But confronting global warming (with renewable energy and capping carbon dioxide emissions,) implementing universal health care, pulling US troops out of Iraq without it descending into chaos (which he would be blamed for), the rubric cube of Afghanistan (potentially more of Viet Nam- type quagmire than even Iraq is,) taking on wasteful military spending, taking on agribusiness and their beloved farm subsidies, reversing Bush tax cuts for the rich and very rich, and somehow miraculously eventually cutting back on the deficit – and all at once. Each of these is a full-on, total immersion kind of issue involving bloody power struggles with very well entrenched, well funded and articulate defenders.

The very fact that he could tie them all together in credible package apprising the American people of their interrelationships is noteworthy and admirable. He was also able to communicate the fact that in this economic crisis when all bets are off, great latitude and opportunity for much needed change exists. It’s like a pinball machine that suddenly pops out several balls at once. An opportunity for a very high score as well as the danger of a very low one (due to serious distraction) both exists simultaneously.

The next year should be very interesting indeed!

That Knocking Sound was Serious

The big machine of global capitalism, has thrown a rod. That knocking sound being heard for years by Marxist and left-liberal economists has finally resulted in the connecting rod of capitalism (credit) actually disconnecting from the piston (production.) The engine has come apart inside and its internal parts are flailing around in a very ugly way.


The term dreaded “D word” for Depression is starting to appear more often as this thing radiates out and in all directions drawing in all of the once happy campers in our new globalized world economy. Many pundits such as NY Times columnist Tom Friedman were much enamored by the interconnection of it all. Well you were right, Tom, we are all connected and now it’s not such a good thing after all. As Wall Street goes so goes Main Street - and Main Streets all over the world. So we now see such riveting spectacles as a panicked exodus of foreign workers from that dazzling wonder on the shores of the Persian Gulf, that Tower of Babel ‘city state’ of Dubai. See: http://www.nytimes.com/2009/02/12/world/middleeast/12dubai.html?em. It seems like it was only weeks ago that CBS’s 60 Minutes had Mike Wallace being chauffeured around that shiny monstrosity of a city, that ultra eco-hostile Las Vegas of the Middle East, being shown ludicrous artificial islands shaped like miniature continents destined to contain multi-million dollar condos - or whatever and shopping malls the size of small cities. But now with crude oil having plummeted to a paltry $40 at barrel, all that oil wealth backed credit has been sucked into the Great Credit Vortex in the Sky. And the Chinese Communist Party’s “growth miracle” of quick and dirty planet killing capitalism-driven development (after all isn’t that how the West did it?) is grinding to an ugly halt with their unemployed masses starting to ominously rumble in restive discontent as they experience their first real business cycle. And the Europeans who have tried to walk the thin line between maintenance of their post WWII semi-socialist economies (pejoratively known in the US as “welfare states”) and at the same time paradoxically be born-again Anglo-American Thatcher/Reagan/Clinton/Bush Neoliberals. Now, alas, they have too been caught with their collective bloomers down. A February 15 NY Times story tells of the alarming rise in unemployment in Europe and elsewhere: http://www.nytimes.com/2009/02/15/business/15global.html?hp. Not only did the Euro bankers slurp down the same toxic subprime mortgage contaminated Kool Aid that the big boyz of Wall Street were guzzling, but now their economies are also being sucked into the resulting sudden downdraft of a global economic recession – a double whammy! And entire countries like Iceland that totally ‘ran their railroads’ on high profit banking pumping out juicy dividends to institutional investors (read pension funds and the like) are now toast (along with many retirement plans.) - whole countries bankrupt!


Everyone is drawn in on some level regardless of degree of active participation. But the hapless Third World poor that were already left out during the gravy years will also take a hit. It’s difficult to see how those billions of landless wretched masses in the those hell holes on earth like Chad or Haiti or Cambodia, people who live on $2 or less a day, could get much worse off. But if the NGOs that provide desperately needed assistance start receiving less donations, and they will, things will even become even more desperate for those who Franz Fanton called the ‘Wretched of the Earth.” And on the next level up, those “low wage platforms” countries that got much of our manufacturing base (China, India, El Salvador, Thailand) things are not much better. Workers there are being laid off en mass (and without and any recourse to anything like employment insurance or SSI.)


Those economies that never climbed aboard the Neoliberal Bandwagon (or were forced aboard by the IMF and World Bank like most of the Third World) are being drawn into this thing buy by what he economists refer to as “a fall in aggregate demand.” As international trade stalls the downturn feeds on itself. That is the nature of capitalism - feedback loops within feed back loops, creating all kinds of further amplification of the originating action. The very psychology of consumerism goes sour. A reluctance to consume sets in even with people who still have a reliable income or adequate assets. For instance in the last few months the savings rate in the US perversely went up just at the point when in an aggregate sense such behavior makes things worse. There something called the “multiplier effect” that determines the amount of new spending generated by a given unit of spending. The multiplier effect is in turn determined by something economists call the “marginal propensity to consume”, in other words an inclination to spend money. It falls when the media is full news of doom and gloom regarding the economy. It’s up when most people feels fat and sassy and prosperous - whether they really are or not (like when there owner-occupied house goes up 15% a year in value during a housing market bubble.)


No one knows where this is all headed. The only solution available appears to be to try to again fix (the financial sector) and fire up (stimulate investment and consumption) the creaky old engine of world capitalism. The US economy functions as the sort of the big master motor of world of capitalism, so it falls on the US it to get our economy up and running again. Plus it was our financial sector’s collapse that started the whole unraveling process. Weirdly our function has evolved into being the master consumers of goods and services produced by others with money loaned to us by others. How long can this go on?


Throughout the so-called prosperity of the 1990s and first decade of the new millennium the US economy has actually been running on empty, or more specifically on money that was borrowed. The US government, controlled by the worst batch of dogmatic right wing ideologues ever assembled in one place, the second Bush administration and its enablers in Congress, ran annual deficits that would have made Marie Antoinette proud. They ginned up not one but two wars while perversely reducing the government's income by lowering taxes. The idiots claimed by cutting federal taxes, primarily for the already very rich, it would lead to more over all investment - thus more jobs. It didn’t work! The investment went overseas or into speculation. Profits from off-shoring production went to the rich but few new jobs that paid well were created. The appalling trillion-dollar shortfall that resulted was made up for by our issuing bonds (Treasury Bills), which were bought up mainly by the Japanese and Chinese who were also by the way producing much of what we were buying. In short they were loaning us money to buy the stuff that they made! But that was on the government side, and worked in a cockeyed sort of way. But it still did not account for all the massive funding of the consumption required to keep a multi-trillion dollar economy afloat and growing. Remember capitalist economies either grow (bubbles and booms) - good. Or they contract (recessions and depressions) - bad.



So the trick is always to keep it growing by hook or crook; governments insuring low interest rates is one way, deficit spending is another. In the Bush years low interest rates, deficit spending and other inducements fed into a housing bubble, which produced zillions of dollars out of thin air. This was enough to feed the maws of a consumer driven economy as people (with or without money) bought houses right and left and the stuff that went into them along with new cars and boats and gadgets and vacations. Those who didn’t buy new houses extracted equity on loans on the every increasing value of their existing homes or ran up credit card debt that carried usurious interest rates. But this mass use of credit was in some ways worse than a Ponzi scheme. In a Ponzi scheme there is real money somewhere at the bottom coming in even though it is a fraud, and is eventually recognized as such. In a classic finance bubble, the fraud is underwritten and sanctioned by the financial sector and the powers-that-be even though increasingly there is little less and less real value there. Everybody conveniently ignores that the emperor is butt naked that is it (the bubble) has to burst eventually. Everybody conveniently ignores this unpleasant truth because real money is being extracted and spent and on real goods and services. And. of course the sharpies, the hedge fund managers, the short sellers and the adroit brokers of every stripe are making a killing getting in and out before the axe falls. But in reality it’s mostly simply fictitious capital, loans using other loans as collateral. When it finally pops the ordinary investor (and recent homebuyers) eats shit big time.


Now it is time dust off the old Keynesian pump priming deficit spending mechanism that worked (eventually) to get us out of the last Big One. But now we have a bigger problem even than FDR faced. The problem is not the obstruction neo-Hooverite Neanderthal Republicans, FDR had then too. In our time they are standing firmly in the way (with their talk radio and Fox News propaganda machines) and undermining things as best they can. After all they have everything to lose politically if it’s fixed on the Democrats’ watch and everything to gain if it’s not.) And not only is the mess more than partly their fault as even more ardent supporters of financial market deregulation than the Democrats, but far worse is the fact that were Republican Party let deficits go through the roof while they ran things. As a party to two unnecessary and criminally mishandled wars and axiomatic support for an ever more bloated military budget un-funded by government revenues, they are up to their blow-dried hair in responsibility for both creating a bad situation and now ardently undermining the means to correct it.

Posted by captkatz at 10:15 AM

Wooing the so-called "center"

Paul Krugman in Monday's (2/9) NY Times again expresses his dissatisfaction with Obama. This time in regard to the present condition of the so-called Stimulus Package as it moves forward. (See: http://www.nytimes.com/2009/02/09/opinion/09krugman.html.) He chastises Obama for wooing the so-called Democrat and Republican "centrists" who are only slightly less destructive than rest of the right to a solution to an economy in free fall. For these so-called centrists it is more a case of economic illiteracy than maliciousness. But in general the GOP has absolutely nothing at all to gain by cooperating one iota with Obama' s counter-recessionary gambit. So why pursue bipartisanship anyway? Apparently the Obama administration believes they can’t allow this program to be tied up and left hanging by a filibuster, while things continue to deteriorate. Hence the wooing of the so-called “centrists. ” Of course the entire US political spectrum has move steadily to right since the 1970s, so the concept of “the center” is really only relative. If this thing fails either through the undermining of its effectiveness or by its own inherent defects, they, the Republicans, win. Remember this is not 1933 and many things are different, and no one really knows what will work. So they don't want their fingerprints on it.

Most economists believe relative to the size if of the US economy, it’s too small, and (even in the House version) somewhat incorrectly focused (too many tax cuts to higher income people and business.) So the GOP will grandstand and filibuster and mess things up for the Demos as best they can while the confused ill-informed masses continue to hit the bricks and shutter their foreclosed castles.

Again this is not the 1930s and the complex array of media influences on the population is very different. Also FDR did not have to embark on a massive deficit spending program with a looming carry-over of a 10.7 trillion-dollar national debt already incurred. It is counter intuitive to most people that massive further borrowing is the only known means to arrest this free fall. Lowering taxes, as ineffective as it is, has a visceral appeal, and the intellectually dishonest, conniving right knows it.

I just wish Obama had started with a more radical and drastic original proposal so that there would have been more room for bargaining.

Goodbye George W, Hello Obama (and the unreal expectations so generated.)

It is a relief of the first order not to have that incredible buffoon, George W. Bush, sitting astride so of much power. Bush was such a perfect paragon of ruling class arrogance and privilege combined with a studied and refined indifference to the complexity of the world. He was the worst product of Texan oil ‘n cowboy culture, a little man with a big cowboy hat – as they say 'all hat and no cows '(or common sense.) And the damage he has left behind is immeasurable and serious. Stinking heaps of GOP/Bushian feces surround on all sides. Third Reich type legislation firmly in place like the rush-to-judgment Homeland Security Act (the name “Homeland”, so very close to the Germanic “Fatherland”) and the inexorable and fascistic Patriot and the Military Commissions Acts. And who will ever forget his a monarchical (and criminal) habit of simply ignoring any laws passed by Congress that he didn’t like by issuing so-called “signing statements.” And, of course, the US already in many quarters under suspicion for trying to run the world for its own economic and political advantage, was plunged into further disrepute by starting two seemingly endless wars. Also there is Gitmo, extraordinary rendition, torture as standard interrogation policy and so on. Add to that a full decade lost in confronting the world historical crisis of global warming. And finally by having his ideologically driven de-regulatory hacks allow the US financial and banking establishment go bananas with greed eventually shoving the global economy over the cliff.

Anyway we now have a shiny new president, Barack Obama ,who is refreshingly different from the Bush in every way possible to the extent that he is viewed by many as some sort of messiah. We will soon learn that, while Obama may indeed represent a quantum leap from his hapless predecessor, he, too, has feet of clay. But for now with only a few days into his reign, things already feel a lot better as he begings knocking down some the bulwarks of Bushland like closing Guantanamo, reversing some of the last-minute Bush federal regulation changes, allowing stem cell research and so forth were - all good but expected.

Yet we must brace ourselves for disappointment. No one can turn so much that is wrong around overnight. It will be a long hard many year slog through waist deep offal. And, to make matters worse his team so far is not exactly chock-full of "progressives", free thinkers or fresh new outsiders or whatever.

Here is a list of disappointment so to date:

Hillary Clinton: Secretary of State, Ugh! Her voice is annoying, and remember she was of one the more powerful members of Congress to be fooled by the Bushian full court press leading up to the Iraq invasion. Furthermore, her hubby, Bill Clinton’s foreign policy record was not exactly stellar. Bombing the bejesus of Serbia and blaming them for trying militarily to forestall Yugoslavia from disintegrating as a nation, bombing Iraq every week or so and wiping out the sewer system leading 100,000 (by UN estimates) children’s deaths there, making zero real progress on the Israel/Palestinian mess with the less than useless Dayton Accords, continuing with the irrational blockade of Cuba, AWOL on the Kyota Treaty and so on.

Robert Gates: Secretary of Defense. A case might be made that continuity will help with the complex problems of disengaging from Iraq and confronting failure in Afghanistan. But Gates is a Bush appointee and will lead to too much continuity. A clean break is demanded. Surely there are some centerist Democrats with a military background that would be better and would send a strong signal to the world that the bad old days of neocon Bushian adventurism by the US are over.

Laurence Summers: Chairman of the White Economic Council. Where did that choice come from? Larry Summers is most well remembered as the erstwhile President of Harvard cashiered for some ill advised speech he made in which he posited that woman had an inherent gender disadvantages in math and science. But apparently he is also an economist of some repute and served as Bill Clinton’s Secretary of the Treasury. Is that good? Clinton left office with a rare accomplishment, a budget surplus. His administration is also up to elbows in responsibility for the deregulatory mania of the financial sector that is the source of our present world economic meltdown. With all the smarties around why choose a Clinton retread?

Judd Gregg, Secretary of Commerce. This bipartisan bullshit is going to bite Obama in the ass. This Judd Gregg character is Republican Senator from New Hampshire. Surely he could have found a pro-business Democrat for that job. Gregg won't even vote for Obama’s economic stimulus package while he is still in the Senate. Also environmental groups are opposed to his support of fish farming.

There are others that reflect a center to center right position like the very Clinton-esque choice of Richard Holbrook as special envoy Afghanistan. But other choices are good like Hilda Solis for Secretary of Labor.

Obama was carried into power by a broad coalition of center-left types but he has never pretended to be any more than a centerist, himself (who had the good fortune to not be in Congress when the Iraq war was voted on.)

Nevertheless, Barack Obama is the best chance we have had in long time. I just hope he can play hardball effectively against the very ruthless, intellectually dishonest, highly influential, inveterate rabble rousing, Clinton-crippling American right wing. They may be wounded and they may be in pain, but that makes them all the more dangerous.

Paulson tries another gambit

Isn’t anybody ever going to admit that those in charge of confronting this now global economic crisis don’t have a clue. Henry Paulson now has again changed his mind on how to use his massive $700 billion slush fund (see http://www.nytimes.com/2008/11/13/business/economy/13bailout.html?hp.) It galled us all weeks ago to have watched how quickly the Congress, the talking heads on the tube, the Presidential candidates all capitulated and lined up behind such as a breathtakingly and appalling large figure. Think back in the past over all the ugly animal noises that emanated from both house of Congress over proposals to spend “paltry” little sums like $25B or so on spending packages that would given money to pre-schools programs or veterans or aspiring college students or whatever. And if and when any of these were finally grudgingly passed, they were immediately vetoed by his imminence ,“The Bush”, whining that we can’t afford it. Think how we once agonized over the costly Iraqi debacle running up some $ 2B a month and maybe hitting a trillion $ eventually. And now suddenly they turn around and almost instantly come up with 700 fucking billion dollars (and more) to bail out a bunch of greedy bankers (an maybe more for inept automakers)! And from where?

Somewhere in implementing the gargantuan exercise of shoveling money at the ailing financial sector by buying up the toxic debt someone realized that, ‘Hey this sucks!’ We are buying bad debt at some arbitrary price to try to stop a free fall in the value of the debt instruments when the source of the problem is somewhere else - the debt instruments are linked to mortgages on plummeting home prices.

As we now know the banks blew it big time and loaned into a classic bubble economy that fucking popped (which for years was predicted to happen.) Now the taxpayers have to bail them out. At this point the problem is the banks, big and small, don’t trust each other because they confidentially know how bad things are in their own bank. So we a get a monumental credit freeze which leads to equity sell offs in stock markets worldwide, which of course feeds on itself and thus this downward spiral. Ah yes, everything is interconnected. Once stock prices start to collapse traders get caught short and have to cash in their positions in other markets, like commodities and so commodities join equity stocks in the commode. At least oil prices also took a nosedive, so we won’t have that source of cost-push inflation - at least for a while.

Economists liked to talk about the “wealth effect”, the idea that with rising home values and juicy 401K people felt ‘fat and sassy’ and spent not unlike drunk sailors, foolishly draining equity out of the (inflated) home value and running up their credit cards (that carry usurious interest rates) to buy goods and services they could have maybe done without. But we now have the reverse of the “wealth effect”. People who have not even yet been directly impacted in terms of their day-to-day disposable income (they still have jobs) now suddenly feel a hell of a lot poorer – and they are! So they buy less stuff that they don’t really need, and aggregate demand falls, manufacturers cut back production due to rising inventories and lo and behold: layoffs. Now real cuts in disposable income start to occur with another round of reduced spending – and so it goes. So many feedback loops in a capitalist economy, loops within loops and they are all connected.

So after realizing maybe exchanging good money for garbage wasn't such a hot idea Paulson and the boyz upped and gave money to all the big banks whether they needed or not (they couldn’t give it only to the ones that really needed it and point out the real losers or they would have triggered a run on those outfits.) The idea was 're-capitalizing' the banks would free things up and lending would be forthwith. But greed has no limits. The banks just chuckled and used the money to do what they pleased. You see the real problem for the banks is their stock price are in the toilet. They want them back up there where they think they belongs. They (the bankers) personal fortunes depend on it. With this meltdown the really, really rich are now only really rich, and they don’t like it. In other words the bankers (and corporate ownership class in general) generally don’t give a rats ass about the about aggregate economy as a whole. It’s their particular firm (and personal fortune) that matters. Of course they must realize on another level that we all they we all sink or swim together. We are are naturally conditioned to look out for numro uno first, then secondly maybe the entire edifice.

Since the big bankers are such self-serving pricks (which Paulson should have known as he one of them), he is now redirecting his slush fund in other direction maybe even to the actual borrowers. Maybe they should have thought of that sooner. Whatever they are doing , it doesn’t seem to have lessened the pessimism as the Dow fell like a rock again today - over 400.