19 February 2014

Neoliberalism is destroying its last chance to save itself


In the opening weeks of 2014, a huge wave of capital fled the assets of the major emerging markets. In January, a total of $12.2 billion poured out of equities and $4.6 billion out of bonds. An additional $6.4 billion in equities and $1.95 billion in bonds decamped in the first week of February. Currency crises threatened Turkey, Argentina, and Ukraine; other key countries that rely on foreign financing — India, Brasil, Indonesia, South Africa — also seemed in danger.

Yet a few soothing words from the new Fed chair Janet Yellen staunched the panic among investors. A few days later, emerging market stocks further recovered with word that China’s banks are shrugging off the government’s efforts to rein in their creation of ever-higher levels of credit. Global investors now expect robust Chinese demand for raw materials to buoy the poor countries, drawing in their exports with the further inflation of the Chinese property bubble.

This was the second near-crisis sell-off in the emerging markets in less than half a year, but this time the outflows eclipsed the sales for all of 2013 in the space of a few weeks. Like last summer, the looming collapse was reversed on the strength of few well-timed remarks by central bankers, with no sign of repentance of the economic sins that supposedly called down investor anger.

Once again, last year’s claim is born out: “growing volatility is not a result of external forces acting upon the economy but what has become the defining output of the global economy itself.” The flows of capital being pushed through the global economy by the world’s major central banks are artificially oxygenating the decomposing body of neoliberal society. As the connection between the investors bearing this capital and the productive economy grows more and more tenuous, economic indicators and investor behavior become increasingly erratic. Even mainstream commentators recognize that the emerging markets crisis is merely in abeyance, though their interpretation of why that is so remains trapped in ideology.

One financial analyst counsels stoicism: economic crisis is the natural state of the emerging markets, so no need for undue concern. This is too glib — if an emerging market sell-off ran out of control, it could undo the illusions that keep the entire global system running. Because neoliberalism is living on borrowed time, maintaining investor “confidence” assumes an inordinately large role in forestalling global crisis.

For the moment, however, turmoil in these economies is unlikely to cause a general crisis. The poor countries just aren’t very important economically — despite holding two-thirds of the world’s people, they produce only one-fourth of the world’s value. US exports to the “fragile eight” countries represent just 0.7 percent of its gdp. Moreover, investors apparently still see the poor countries and rich countries (except Japan) as two separate destinations for investment rather than an interrelated unity, so money fleeing the emerging markets might simply inflate new bubbles in the developed economies. Reification to the rescue!

The risk posed by serial crises in the emerging markets is not so much the prospect of imminent collapse. The real danger is more long-term in nature: endemic uncertainty threatens our last best hope to put the global economy back on a sustainable foundation without facing some sort of catastrophe first.

30 December 2013

Notes on Party Politics





The shutdown of the federal government by right-wing fanatics last October triggered a rare bout of fresh thinking among progressives. Whatever else it was, it was also an object lesson in the capability of a relatively small but tightly organized, militant political faction to effectively—if temporarily—seize control of one of the major mass parties in the United States. Throughout the first half of October establishment Republicans and bewildered liberals helplessly looked on as the entrenched leadership of the Republican Party was utterly dominated by a well-funded and—more importantly—well articulated form of reactionary populism. The main liberal complaint against the shutdown—“but the Affordable Care Act is already the law!”—was of course entirely trivial, because it assumed that the whole affair could be reduced to a mere question of a positive legal fact.

The ideological extremism of the Tea Party goes beyond the dissatisfaction felt by rich people about the prospect of paying higher taxes. It taps into a deep well of existential dread about the fate of the country that is as fiercely ingenuous as it is dangerously delusional, and it channels this energy into a seething anti-government mass politics.

Although it may seem as if the radical elements of the Republican Party lost their great battle over the “Affordable Care Act,” it has been clear for some time that they have been winning the larger war. With each Tea-Party-orchestrated freakout in Washington, the political center of gravity shifts further to the right, and the lesson that ideological radicalization brings home the goods is further hammered home into the torpid brains of establishment Republicans.

This dynamic is not lost on keen observers from the left. If the American far-right can be motivated with the numbers and the organization to take the government hostage and impose their narrative upon public discourse for the better part of a month, then it seems plausible to suggest that a similar tactic might be deployed from the political left for progressive ends.

In the wake of the Tea Party’s government shutdown there has been no shortage of debate over whether or not emulating their tactics would be effective or even desirable for progressive objectives. Within this debate, the question of just what role the Democratic Party should play, if any, has loomed large, as have questions about the viability of third party electoral alternatives. Others argue that engagement with the U.S. electoral system amounts to political suicide, since it is basically like joining a game of cards in which the rules are rigged for the house to always win. Yet just last month we witnessed the election, for the first time in almost a century, of a dyed-in-the-wool socialist to the municipal government of a major U.S. city, along with a nearly-successful socialist victory in another major city. What might this portend?

21 December 2013

Our sweetly naïve financial analysts


After some reflection, I have concluded that this is not satire:
“The US economy has flattered to deceive several times in recent years, looking like it was set for a period of faster growth only to fall flat,” said Joseph Lake, US analyst for the Economist Intelligence Unit. 
But Mr Lake says he thinks this time is different. “We expect the US to embark on a sustained economic upswing in the coming quarters.”
What evidence is there that it’s not satire? Nothing more than the fact it was published in the Financial Times. One of the most notable characteristics of the age is that the only way to differentiate between The Onion and real news is by looking at the URL.

04 December 2013

Pensions must be savaged or the world doesn’t make sense


The last four years in the United States and Europe have been a long, multi-faceted struggle over a single question: who will bear the suffering of a society in disintegration? Neoliberalism can no longer sustain itself, and no effort is being made to create a new logic of economic growth. The only way to sustain the illusion that neoliberal society remains a going concern, then, is to plunder stored up value in different parts of the system in order to keep the engine running. It’s like eating the seed corn in the midst of a famine. And as everyone knows, it’s not the rich people who die in a famine.

26 October 2013

Should the left seek strategic alliances with progressive Democrats? Does it have a choice?

In this post I will offer some reasons why I think it's necessary for progressives, socialists, and anti-capitalists to engage with the Democratic Party in the electoral and legislative arenas if we are to have any hope of putting alternatives to capitalist economy in the forefront of public consciousness.

They drink the neoliberal Kool-Aid, but maybe we could crash their party?


My use of the word "engage" is deliberately indeterminate because the manner of this engagement is something I think ought to be debated. For now, let me stress that to engage with is not the same thing as to collaborate with. I am by no means recommending the left tow the Democratic Party leadership's line or do their bidding on the ground.

I am, however, asserting that the left should find a way to use the Democratic Party to force a public debate over crucial economic issues, such as collapsing private investment, lack of public services, regressive taxation and corporate welfare, mass unemployment and underemployment, and epoch-making wealth and income inequality. Presently, the right's anti-tax rhetoric reigns supreme. Where is the mainstream left's rhetoric of jobs? Where is its full-throated defense of popular social programs such as Social Security and Medicare?

These issues have been distorted, obscured, or ignored in mainstream political debate because of modern conservatism's tremendous success over roughly the last 30-45 years at pushing the public conversation and policy agenda steadily to the right.

The extent of the rightward shift was painstakingly clear earlier this month when the Tea Party forced the Republicans to shut down the government and risk default over the implementation of the Affordable Care Act.

17 October 2013

Who really won the shutdown battle?

In light of Congress' eleventh hour passage of a bill Wednesday night to avert a government default and end the shutdown that paralyzed the federal government for 16 days, the New York Times is declaring victory for the Democrats.


But is it really so? Although Republicans failed to achieve their stated goal of de-funding the Affordable Care Act (Romneycare) and were unable to wring further spending cuts from the Democrats, this is still a big win for austerity and further confirmation that the Tea Party strategy works. The deal approved by Congress leaves in place spending cuts that Republicans won during the last major fight over the debt ceiling in 2011, and current levels of funding remain far below those preferred by Democrats, hovering a mere 2% from the funding levels proposed in Paul Ryan's 2014 budget. Moreover, the deal will only fund the government through January 15 and raise the debt ceiling through February 7, portending yet another fiscal impasse and the possibility of more spending cuts. This is austerity, American style.

Despite the outsized influence of the Tea Party and clear evidence that its extremist strategy to whittle away the federal government is working, much of the left has persisted in demonizing the radical right. While it may feel good to do so, progressives should instead learn from the Tea Party's relentless attack on the Republican Party and pursue the same strategy against establishment Democrats, thereby pulling the Democratic Party as a whole to the left and moving the political system a step closer to sanity.
 

09 October 2013

Win First, Then Go to War: Thoughts on Tea Party Strategy

Reactions to the government shutdown range from fear to exasperation. The market seems genuinely disturbed, while the Finance Ministers, Presidents, and Prime Ministers of dozens of countries gently remind the US that the economy is international and that our crisis is theirs. It’s also telling that though both incidents proved to be (more or less) unrelated to the shutdown, neither journalists nor the public were surprised at the two deaths in DC last week and both were ready to fit them into a narrative of a country and a world on the brink.

But there is at least one group of Americans that is more resilient than worried, that sees this impasse as a crucible instead of a noose: the 20 percent of voters who identify with the Tea Party.

04 October 2013

Stop demonizing the Tea Party

 To all those who are rightly dismayed at the government shutdown and those responsible for it: please stop demonizing the Tea Party. I say this not in their defense! To the contrary, I think the danger posed by the Tea Party is boundless. Their increasing influence threatens to trigger a violent, catastrophic collapse in the global economy, which would then lead to suffering and death across the planet on a scale I don’t much care to contemplate in any detail. (Something to keep you up at night: the last time a highly integrated global economy collapsed, we got WWII.) So we absolutely must stop the Tea Party.

while arguably accurate, this is not helpful

But as paradoxical as it might seem, direct attacks on the Tea Party will do nothing to defuse the enormous threat they pose to us. Rather, the solution is to have some sympathy for these devils. Let us do to establishment Democrats what the Tea Party has done to establishment Republicans. But where the Tea Party movement is animated by a slash-and-burn small government vision, let our movement be animated by a contrary, progressive vision. In order to stop the Tea Party, we need to build an anti-austerity, anti-establishment political movement within the Democratic Party. But to see why this is the solution, we need a deeper analysis of the underlying forces that have led to the rise of the Tea Party. We have provided much of this analysis in various posts on this blog, and I have tried to compile them into a relatively brief overview in this post.

10 September 2013

Pursuing peace in an age of crisis



If we value peace and hate war, then it is not enough to call for peace and oppose warmongers. We must go on to take action against the root causes of war. What are they?
 
In Syria, the major triggers of the civil war seem to include economic distress, exacerbated by extended droughts caused by climate change. That story is not limited to Syria. To the contrary, if the stagnation / breakdown of the global economy continues, and as climate change effects continue to kick in, the conflict in Syria could soon pale in comparison to larger conflicts in more populous countries, not to mention wars that could break out between more significant world powers. We have earlier taken a look at the rumors of war in East Asia, and recently anti-American views have also been breaking out in China as the effects of the crisis intensify there (I hope we’ll return to this issue later; it deserves posts of its own).

Returning to the particular case of Syria: personally, I think that it would just make things worse if the US sent bombs into Syria, and so I am opposed. At the same time, keeping America’s bombs out of the country is hardly a great victory for humanity, since people are already dying in droves without help from the US military. But be that as it may, there is a bigger picture here, and if we really care about peace and avoiding the horrific violence of war, then we need to keep that bigger picture in view and formulate a strategy to match. We need to revive the global economy, rapidly end carbon emissions globally, and institute a global system of climate change mitigation. This is the only way to end the intensification of pressures which have led to Syria’s civil war (and the use of chemical weapons which may provoke a response from the US), and threaten to increasingly lead to violent conflicts.

So, to return to a familiar refrain on this blog, we need a strategy to overcome neoliberalism, because the neoliberal economy has fallen into permanent crisis and neoliberal ideology is incompatible with a serious climate change strategy. And our strategy to overcome neoliberalism must be global in scope; among other things, this involves rejecting the reactionary isolationism that drives so much of the opposition to the plans to bomb Syria (this is of course true on the right, but it is all too common on the left as well).

Of course this will be difficult. But if we refuse to tackle this larger strategic picture, then our calls for peace are at best naive.

30 August 2013

You Can’t Always Get What You Want


Yesterday I went to the Fight for Fifteen rally in Federal Plaza, Chicago. The usual suspects were in attendance, from  labor activists from Action Now and Jobs with Justice to a few rogue Wobblies and the inevitable Revolutionary Communist Party literature table. Participants were color coded by shirt. Workers gave uplifting testimony, Democratic legislators talked about how much they had learned from the workers, and the ceremony ended shortly after musical performances by an electro-traditional Mexican folk group and four break dancers. Media trucks with massive antennas broadcast their coverage, captured from cameras in the back. Police presence was constant but subdued until thirty minutes before the rally’s end time, when fifteen CPD on bikes approached on the sidewalk, stopped, turned, and waited for the event to end.

If you, like me, have been to rallies and protests and marches before, none of the above will surprise you—but then, and as others have already noted, the rally’s purpose was not to surprise or mobilize but to publicize. The control exercised on the demonstrators by the SEIU-based campaign made this abundantly clear. Yet though it was obviously a publicity event, when I tried to describe the rally to friends outside the left I found myself struggling to answer as basic a question as “Who’s the target?”

19 August 2013

We must go global: the case of South Korea

If we don’t go global, we can’t win.

Consider, for example, recent developments in South Korea around temporary employment (covered here at the Financial Times, behind a paywall). The rise of temp work in the US and other developed countries is symptomatic of neoliberalism. And as with other neoliberal trends, it is intensifying as the neoliberal economy breaks down. We might be familiar with hand-wringing on the subject in popular press in the US, but it is a global phenomenon (see also France, Germany, Japan, etc.).

South Korea has been hit especially hard by this trend, and has one of the highest rates of temp employment in the OECD, but it is now reversing the trend, thanks to some of the most militant labor unions in the world. Led by temporary workers, unions have taken up the cause of ending temp employment. Sustained labor unrest has resulted in billions of dollars in losses for major corporations, and tens of thousands of temp workers at Hyundai and other major corporations have been granted permanent status (or other benefits and contract improvements in lieu of permanent status).


12 August 2013

The Moral Imagination of Neoliberal Society


In an interesting essay on the Jacobin website, David V. Johnson describes the perils of moral sentimentalism, "an excessive, even obsessional tendency to view the world through the narrow lens of the moral." As described by Johnson, moral sentimentalism is a debasement of complex social and political issues into a simple matter of proper conduct, implying that any such problem can be boiled down to personal failings. This distracts attention from the systemic nature of serious social problems and acts as a powerful block to effectively addressing them through political projects that might hold a real potential to change the world.

Johnson tries to describe moral sentimentalism as something more than a ploy on the part of the rich to confuse the poor about their true interests. He stresses that moral sentimentalism "offers the fantasy of feeling empowered, of taking pride in their own individual conduct as all that really matters." Despite his gesture towards the very broad appeal of this world view, I don't think that Johnson convincingly shows that moral sentimentalism is anything other than a key stratagem in a class struggle rendered in mechanistic terms of economic interest. In other words, Johnson describes moral sentimentalism as part of the upper class's attempt to trick the poor into perpetuating their own class domination, but this does nothing to explain the way that these classes come into being in the first place.

Johnson is also attempting to draw a distinction between moral sentimentalism and genuine moral claims, and cautions against moral sentimentalism "because it ultimately serves immoral ends." But I'm skeptical that this distinction can be sustained. It's hard to argue against Johnson here because apart from noting that he "take[s] moral claims seriously," he doesn't define what real morality actually is. I would like to suggest that what Johnson is describing as moral sentimentalism might best be understood as the variety of morality that is most at home in our neoliberal society. The examples of moral sentimentalism that he gives are particularly debased, but I think that even very serious contemporary moral thinking partakes of a similar logic that I will try to begin teasing out in this post.

05 August 2013

Neoliberalism and the “carbon bubble”

In an earlier post I argued that overcoming neoliberalism is the key to saving humanity from climate apocalypse, based on the thought that the necessary political actions (examples: “heavy-handed interventions by the state into the economy, including a massive expansion of the public sector, and coercive intervention into the financial industry, agricultural industry, and manufacturing industry”) are incompatible with neoliberalism. In this post I want to address another consideration that leads to the same conclusion: the carbon bubble.

The math behind the notion of the carbon bubble is probably most familiar to climate activists from an article published a year ago by Bill McKibben in Rolling Stone entitled “Global Warming’s Terrifying New Math”. This article is a call to arms in which he declares that the the fossil fuel industry “is Public Enemy Number One to the survival of our planetary civilization”, which means that the task of the climate movement must be to destroy the industry’s political power. The piece went viral, and subsequently led to his Do the Math tour and 350.org’s “Fossil Free” divestment campaign.


29 July 2013

Only A Pawn in Their Game

White alienation is on the rise. “Going back to the 1980s, never have whites been so pessimistic about their futures,” according to a recent article about increasing economic insecurity published by the Associated Press. “Just 45 percent say their family will have a good chance of improving their economic position based on the way things are in America.”



Such pessimism corresponds, of course, to the objective economic situation facing the majority of white Americans. As the AP explains, “While racial and ethnic minorities are more likely to live in poverty, race disparities in the poverty rate have narrowed substantially since the 1970s, census data show. Economic insecurity among whites also is more pervasive than is shown in government data, engulfing more than 76 percent of white adults by the time they turn 60, according to a new economic gauge being published next year by the Oxford University Press.”

While decreasing racial disparities in the poverty rate hold out the possibility that whites and non-whites will come together in the face of shared economic immiseration to challenge the neoliberal policy regime responsible for their increasing insecurity, it is overly sanguine to believe that the collective experience of acute economic anxiety will lead inexorably to proletarian racial harmony. Indeed, the perverse racial equality promoted by neoliberalism’s program of universal dispossession is haunted by the specter of a racialized politics in which the objective social antagonisms of capitalism’s bio-polar class structure become increasingly displaced into threatening forms of populist chauvinism that could radically transform the American political landscape. As Walker has discussed at length in two recent posts, the unleashing of such reactionary forces could eventuate in a Rand Paul presidency, a scenario that harbors the possibility of accelerating national and international disintegration and hostility.

Our chances of averting such a catastrophe depend on our ability to articulate a narrative that will place the subjective experience of economic distress in an objective perspective that discloses the class-bound economic mechanisms driving contemporary inequality. As William Julius Wilson, a Harvard sociologist, tells the AP, “It’s time that America comes to understand that many of the nation’s biggest disparities, from education and life expectancy to poverty, are increasingly due to economic class position.” He goes on to caution, “There is the real possibility that white alienation will increase if steps are not taken to highlight and address inequality on a broad front.”

Unless progressives, socialists, and leftists can forge such a narrative and present it alongside a political program based on the regulation of financial corporations in the public interest and the creation of jobs through large-scale investment in infrastructure, transportation, and education, rising white alienation will continue to portend reaction.

19 July 2013

(Un)Education in America


Tomorrow's schools, today
In June I wrote a post about the internship and its role in the redefinition of labor and training. Widespread divestment from training, in which the cost of training is transferred from the employer onto workers, is manifesting itself as a demand for prior experience. Workers are to have been trained elsewhere, and are expected to hit the ground running. Paired with a general job shortage, these demands for experience can only be met at the workers’ expense, by paying for training programs or by working for free. The internship is a perfect example of this trend.

But there is another, arguably more important aspect of divestment from training—the turn toward cutting and streamlining public education. Primary and secondary schooling is intended to foster good citizenship, to provide care for children while their parents work, and to train productive future employees, among other things. Today, we are seeing a redefinition of the government’s role as educator and trainer that could prove vital to any future economy.