Prostitution, bankers, bail-outs and advertising

Trading on America's Puritanical Streak by Martha Nussbaum

The debate on prostitution is over. To paraphrase Bill Hicks, if you still think prostitution is morally wrong, I suggest taking a brief look around the world in which we live, and shutting your fucking mouth. Period. Sorry to be so blunt, but to waste another couple of keystrokes on this utterly concluded debate, this non-issue for the rational, would be an unconscionable waste of some .01 calories of energy.


The New Brahmins by Chan Akya

I could not disagree more with Mr. Akya's ideology, but he at least is correct about the danger of government bailouts directed only to aid the world's bankers. But what I really love about Mr. Akya are his frequent bouts of unintentional comedic writing.

Mr. Akya writes, in an attempted refutation of a reader's call for the world to adopt the Scandinavian market socialist model: "[t]hus, people's natural tendency to grow and become richer was sacrificed at the altar of this demon called market socialism. The net result is that Scandinavia boasts the highest incidence of suicides in the Western world." People's natural tendency to grow has certainly not been sacrificed in Scandinavia; people are quite a bit taller on average there than in just about any other region in the world. What remains is Mr. Akya's assertion that the Satanic ritual sacrifice of "people's natural tendency to ... become richer," in the name of the demon market socialism, led to Scandinavia's high suicide rate. (The plus side of this Faustian bargain must have been happiness; Scandinavians report the highest well-being of any people in the world.)
I would have to ask demonologist Akya precisely which evil spirit has led to Belgium, Russia, China, Japan and Korea's (among many others) higher suicide rates? Is is it the trampling of market socialism's hooved feet that has awarded the honor of 'highest suicide rate in the world' (148 per 100,000) upon downtrodden young southern Indian women?

Preposterous! Displaying a sort of collective Stockholm Syndrome, many residents of formerly colonized countries idealize and glorify their former colonizers. I would advise Mr. Akya to give up his crush on Anglo-Saxon economics.


Bernanke's Next Big Bail Out Plan by Mike Whitney

Whitney's economic reports on Counterpunch tend to be a bit on the alarmist side. (Funnily enough, they have so far tended to be more accurate then, obviously, all of the economic news on cable.) This article details rumors of a bailout plan in the works that would have the Fed buying up hundreds of billions of dollars worth of mortgage-backed securities. (I would write, "toxic mortgage-backed securities", but I think that would be a bit redundant nowadays.)

May the world be so lucky! Dollar-holding central banks and rich investors throughout the world need a kick in the rear to end the dollar's key currency status. This would be just such a kick...


Markets' weak spot is bad ad vice by Robert Skidelsky

There is a slow trickle of capitalists - in ideology if not necessarily in economic position - who have come to realize that their beloved system is in crisis. This article suggests that regulating advertisements, i.e., commercial propaganda, is the way to go to restore(?) health to the system. I, for one, am all for it. A key component of capitalist apologetics is the assumption that "perfect information" (which Joseph Stiglitz, among others, has demolished) obtains in a free market economy. A more realistic assumption would be perfect disinformation. Modern advertising uses the same psychological techniques as political propaganda, only the techniques have been refined far beyond anything recognizable from the golden age of political propaganda, the World War II-era. Today's commercial propaganda is devoted to ensuring that consumers do not have perfect, imperfect, or pretty much any kind of accurate information about the advertised product. Commercial propaganda aims to mislead, to convince, for example, that Budweiser is an expertly-crafted beer that makes its drinker sexier - disinformation - rather than providing accurate information: Bud is nearly tasteless swill made mostly from broken leftover rice because it is cheaper than barley, and the money saved in production costs can be poured into advertising.

Review: The Chinese Road to Socialism

The Chinese Road to Socialism: Economics of the Cultural Revolution by E. L Wheelwright and Bruce McFarlane

Interesting book on the political economy of the cultural revolution. Mao believed that revolution should be permanent, or at least continually reoccurring, to prevent the emergence and consolidation of an elite class - something that is clearly possible even in nominally Communist countries. Now that China has the capacity to provide all sorts of articles of wealth to its people, it would be a good time for another drive to level hierarchies, forcing managers to share manual labor and workers to learn and carry out management responsibilities.

Satire

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Dethroning the dollar: the most effective peace tactic

A Grand Global Bargain? Save the Economy, Dismantle the Empire by Michael Hudson
(As of the day of posting, there are a number of typos in the article that must be overlooked.)

The academic left often blathers about I-don't-know-what in prose like this:

We can clearly see that there is no bi-univocal correspondence between linear signifying links or archi-writing, depending on the author, and this multireferential, multi-dimensional machinic catalysis. The symmetry of scale, the transversality, the pathic non-discursive character of their expansion: all these dimensions remove us from the logic of the excluded middle and reinforce us in our dismissal of the ontological binarism we criticised previously.

Not much of a rallying cry, that. "Down with ontological binarism! Up with symmetry of scale, transversality and pathic non-discursivity!"

This excerpt was written by the late Félix Guattari, a philosopher and psychotherapist. Guattari's attacks on capitalism came from a psychoanalytic perspective, which is to say that it was grounded in the writings of an Austrian psychologist whose name is one letter off from "fraud", and whose theories emerged from his own subjective experiences and Greek mythology. Incidentally, they have almost all been disproven by modern psychologists who use experiments rather than ideation and fantasy to arrive at an understanding of the mind.

And Guattari is by no means alone; from the little I expose myself to popular theories in academia, it would seem that this type of horseshit* is more the rule than the exception. Writing like this may be effective in gaining tenure, disciples, the adoration of youthful men and women and easy access to the student body(ies) - not to say that this is at all a bad thing. But one would hope that a leftwing academic's writing would be at least as effective at spreading wealth more evenly in society than at spreading legs at one's office or off-campus apartment.

(*My apologies; "horseshit" is inapt. Horseshit can be used as both fuel and fertilizer, while the output of so much of left wing academia can be used neither to fuel or fertilize any effective movement for social progress.)

In fact, the restricted utility of so much left wing academic writing would not be a problem at all if this sort of postmodern/poststructural/ postcomprehensible babble were not written by the left wing intelligentsia. But given the role of leftist academics as the brains (obviously) of any left wing movement, they are desperately needed to provide guidance and devise tactics and strategies in the evolution of society away from modern capitalism towards a new, more equitable system. There will be no Latourist, Lyotardian, Baudrillardist, or Deleuzian revolutionary regimes that lead people into emancipation upon defeating the combined forces of capitalism. Their and their heirs' theories are useless - but worse than useless, they are distracting.

One of the most important issues academics are distracted from is the dollar's status as the world's key currency. Michael Hudson has written two books on the subject, and in this article provides a refresher and update on the dollar's status as the U.S. credit crisis intensifies. Essentially, if the dollar loses its status as the reserve currency of choice for central banks, and the default currency for commodity trading, the U.S. military empire will fall. What is desperately needed now is for left wing academics to publicize the benefits of dethroning the dollar, and working out plans that could be implemented by foreign central banks to divest from their dollar-denominated assets in the least painful manner possible.

First, Hudson describes the debt crisis the U.S. has - through its leaders - gotten itself into:

"The reality is that the existing level of debts cannot be paid. The problem is by no means confined to the bottom of the economic pyramid, but is concentrated at the top. The U.S. Government itself turns out to be the world's largest subprime debtor. Its $2.5 trillion debt to foreign central banks--and even larger private-sector debt to other foreigners--cannot be paid, given the nation's heavy military and trade deficits. Recognition of this political fact at the core of the international financial system has led foreign governments and investors to dump dollar-denominated bonds and stock. This has driven down the dollar's exchange rate, raising dollarized prices for oil and other raw materials.

What is ironic is that the larger the U.S. trade deficits and foreign military spending have grown, the more of these dollars are turned over to foreign central banks by foreign exporters and other recipients of U.S. funds. Central banks then find themselves with little to spend their money on, except to buy U.S. Treasury securities. They have bought so many that Americans have not had to bear the cost [of] the U.S. federal budget deficit by buying the bonds to finance it. Foreigners have bought [these] bonds. This means that, [in] effect, they have loaned the U.S. Government the dollars and foreign exchange to wage its war in the Near East--a war that most foreign voters do not support! To fund the U.S. payments deficit and federal budget deficit is to subsidize this war.

In the last few years, foreign governments have sought some alternative to buying U.S. Treasury bills. But when the Chinese sought to buy Union Oil assets, Congress vetoed the deal, accusing government ownership of leading down the road to serfdom. For China to buy into U.S. privatizations, it would have to believe that the U.S. Congress would let it raise road tolls and other infrastructure access fees by enough to compensate it for the dollar's decline. The more likely response would be new complaints against the Yellow Peril. So foreign governments are finding themselves stuck with dollars they cannot use to buy real U.S. assets, and also cannot buy [...] U.S. exports now that the country is de-industrializing. All they can do is lend money to the U.S. Government."

Later on, Hudson suggests one way to resolve the crisis facing the dollar:

"The only way to stop this hemorrhaging is to negotiate a debt writeoff, starting with the U.S. Treasury bonds held by foreign central banks. But what does the United States have to offer? To ask foreign governments to make an economic sacrifice of this magnitude cannot be negotiated without the U.S. Government negotiating a grand global bargain. Having little quid pro quo to offer, the most promising way to get foreign countries to voluntarily give up their financial claims on the U.S. economy must include the one thing America can offer--the military dimension.

There is only one way that I can see this being done. The United States would agree to dismantle all its overseas military bases (or at least, those outside of the Western Hemisphere). This would mean relinquishing its dream of imposing world hegemony by force of arms. This also would free it--and other countries--from the post-Cold-War arms race. It would help revive the 'real' economy's production and consumption by freeing revenue for spending on consumption and new direct investment. In the process it would free the United States from 'Pentagon capitalism,' that is, cost-plus production contracts that seemingly has led American industrial engineering to be incapable of cost-minimizing production methods, thereby losing what used to be its competitive technological advantage."

Reining in the Obama parade

The Obama Craze, by Matt Gonzalez

The mythology of Unitedstatesian democracy is that all citizens, by voting, enjoy an equal share in government. At the time of the country's founding, this idea was not much of a myth. Those who owned the country were the only ones granted a vote, so in reality the voters really did enjoy an equal share in government. This plutocratic system of government worked well enough in the past, because it could rightly be expected that those who owned the country would educate themselves about the country's affairs, and make sure that their elected representatives would carry out the policies they believed to be best for themselves. And so they did.

But as centuries passed, and the right to vote was extended to people (including women and Blacks) who only work for the people who own the country - and the old conception of how political power is shared was not modified - it has now become a myth. (It is this myth that makes Unitedstatesians pat themselves on the back, and look down on other countries where one's share in governmance is determined on the basis of one's military strength or economic sway.) In large part, this conception has become a myth because the people to whom the voting franchise was extended - people who do not own the country - do not educate themselves about the country's affairs. Or perhaps it would be more appropriate to say that they are not educated. Those with a desire to educate themselves will have a terribly difficult time at the task, as the free press (freedom of the press is guaranteed to all those who own one) is not in the business of providing information; it is in the business of selling eyeballs to advertisers. Such an arrangement is hardly conducive to providing the voting public with the information they would need to make a liberal democracy function as its promoters would have it.

Clearly, and contrary to myth, not everyone's share in governing power is equal. Those with economic power hold Class A shares in the United States Government, Inc., while those without economic power hold Class B shares. Class A shareholders can dictate policy by determining whose campaigns they fund, how they lobby the candidates they have funded after they get elected, and which issues they submit for debate to all shareholders and which issues, by ignoring them in the press, are left essentially undebatable by Class B shareholders. Class B shareholders merely get to vote, every couple of years, for the representatives whom the Class A shareholders have vetted and approved. Candidates who do not receive the approval of enough Class A shareholders - people like Dennis Kucinich, Ron Paul, Mike Gravel, Mike Huckabee, Ralph Nader, etc. - simply do not have a chance. The Class B shareholders have little idea of who these people are and what they stand for, because the Class A shareholders' media effectively excludes them.

Obama has received the approval of a critical mass of Class A shareholders, demonstrating they must not think him a hazard to their interests. The article above explains why: a voting record that evinces the kind of subservience to Class A shareholders that they have come to consider a prerequisite for holding public office. Obama has consistently taken anti-Class B positions on issues like the War on Iraq, class action lawsuits, credit card interest rates, limiting "pain and suffering" damages in medical malpractice lawsuits, private profit for mining companies on public land, nuclear industry regulation, energy policy, healthcare, NAFTA, Israel/Palestine - hell, even the fucking Mexican border fence. (Not that the border fence is in the interests of Class A shareholders, but it is a way for them to ensure they get enough Class B support to keep control of the Republican party.) What makes Obama an even more attractive candidate for the Class A set is that the Class B shareholders seem to think that he will represent their interests! What better way to deal with the disgruntled masses than by presenting them with someone they wrongly believe will represent them.

Perhaps, however, the Class A shareholders are wrong - maybe the disgruntled masses who become taken in by Obama's charisma and the hope for radical change that he sells will force Obama to represent them throughout his presidency. Through organization and coordinated effort, the Class B shareholders can match and even overcome the well-organized and highly coordinated Class A shareholders - ultimately fulfilling the now-mythical, but in the future, possible, potential of democracy. The powerless majority of Unitedstatesians organizing and becoming a force to be reckoned with is not an impossibility - and it is the only hope to be found in Obama's candidacy.

Economic stormclouds' silver lining

THE ROAD TO HYPERINFLATION, Part 3 - Inflation targeting, by Henry C K Liu

A lot of economic analysis in the major media is limited to the question of whether the Fed should cut rates or not - as if the most a government (through the central bank) can do to influence an economy is to raise or lower interest rates. This article on the current economic crisis is much more interesting. It argues that the best central banks can do by cutting rates is merely to temporarily delay the inevitable sharp intensification of the crisis, while causing hyperinflation. Or, with rate hikes, a central bank could keep inflation under control but at the cost of wrecking the economy and sharply raising unemployment.

But the article is actually optimistic, because the system it argues is headed for an acute crisis and possible collapse is not at all desirable. It ends with:

"The current crisis presents an opportunity for a catharsis to reform the greed-infected global economy away from senseless and wasteful competition, toward cooperative enterprise to rebuild a new world community based on human values, to achieve equality without conformity, with compassion for the less fortunate and respect for diversity. The wind of change is sweeping the world. "

Here are some choice excerpts:

"... in the popular press, Friedman was known also for his advocacy of a deregulated free market as the best option for sustaining economic growth, which raises the question of the need for central banking intervention to replace specie money of constant value with fiat currency of flexible elasticity. A free money market under a central banking regime is an oxymoron. Betting on Fed interest moves is the biggest speculative force in the market. Friedman apparently did not extend his love for free trade to the money market. The Friedman compromise was to manage the structural contradiction with a proposed steady expansion of the money supply at around 2%.

Still, Friedman’s love of free markets does not change that fact that totally free markets always lead to market failure. Free markets need regulation to remain free. Free market capitalism, the faith-based mantra of Larry Kudlow notwithstanding, is not the best path to prosperity; it is the shortest path to market failure.

Unregulated markets in goods have a structural tendency towards monopolistic market power to reduce price competition and to inch towards rising inflation. On the other side of the coin, unregulated money markets can lead to liquidity crises that cause deflation. The fundamental contradiction about central banking is that the central bank is both a market regulator and a market participant. It sets the rules of the money market game while it pretends to help the market to remain free by distorting the very same rules through the use of its monopolistic market power as a market participant not driven by profit motive.

The Fed is a believer of free markets who at the same time does not trust free markets. The response by ingenious market participants to the Fed’s schizophrenia is to set up a parallel game in the arena of structured finance in which the Fed is increasingly reduced to the role of a mere passive spectator. " It is the immensity of this parallel arena of structured finance that makes central bank rate cuts a useless tool to use in an attempt to restore health to the economy. Furthermore, the fact that what has been considered a healthy economy at least since the 80s is an enormously lopsided scheme in which only those at the very top of the pyramid do well forces the question: do we really want to restore this kind of "health" to the economy, or is it time for a radical re-thinking of how we want our economy to work?

And my favorite bit, on the television personalities and mainstream pundits who claim that stocks are now actually underpriced due to irrational, panicked selling:

"How many times can public figures be shown wrong by subsequent unfolding events before losing total credibility? The overused truism is now flooding the media: that credibility is like virginity - much easier to lose than to get it back. Like the resourceful pimp who promotes the virgin-like freshness of his prostitute by claiming that it is only her second sexual encounter, the "good fundamentals" of the economy is touted over and over again by influential public figures in the face of deepening systemic collapse and dwindling confidence. Gratuitous advice that the market was temporarily oversold and that every decline session presents a 'buying opportunity' continues to be standard pronouncement by those who are in the position to know better.

The faith-based Larry Kudlow & Company program on CNBC, where participants are asked to declare with solemn piety: 'I believe free market capitalism is the best route to prosperity' as an article of faith, is increasingly attracting viewers for its entertainment value rather than for the quality of its analysis, particularly when the host continues to repeat with a straight face his tiresome mantra that the Goldilocks economy is alive and well in the face of serious systemic financial disaster.

Back in the real world, Goldman Sachs analysts estimate that the total final loss on US subprime mortgages would exceed 80% of its March 2007 face value of $1.3 trillion, even if the meltdown does not spread throughout the $20 trillion total residential mortgage outstanding and beyond the housing sector into commercial real estate and corporate finance.

The bulk of this loss will ultimately be borne by pension funds whence the average worker around the world expects to receive money to fund his/her retirement needs. Market forces can resolve the financial crisis with a sharp and quick price correction from bubble levels but the politically sensitive Fed and Treasury are trying to engineering a 'soft landing' by extending the debt bubble, the penalty for which would be a decade or more of stagflation. Pathetically, supply-side market fundamentalists are clamoring for more government bail out of the market, with 'damn the economy' frenzy. It is the equivalent of the God-fearing faithful asking the Devil for help in easing the ordeal of faith. "

Review: State of Exception

State of Exception by Giorgio Agamben

Interesting for its historical examination of 'states of exception', where laws are suspended for the government to better deal with an emergency - an emergency which, conveniently, the government itself gets to define.

But when Agamben gets into the metaphysics of states of exception - are they within the law, outside of it, or the subsumption of the law's own negation? - I started feeling like I was slogging through the same cum-stained terrain of other intellectual masturbators - like Foucault.

BTW, yes, Agamben compares the US to fascist countries - and then compares them both with the Romans, among others. To clear things up though, there is nothing whatsoever objectionable to making comparisons, even between things or events that are held (even with great sanctimoniousness) to be incommensurable and utterly unique. What people really mean when they, with great indignation, object to a "comparison" between two things or events, is that they would object to the two things or events being equated. OK, so remember kids, comparisons are always OK, but relatively few things can be fairly equated. When your rightist friend nearly chokes on her own tongue in righteous anger when she hears someone making a comparison between fascist Germany and today's U.S., please politely remind her to conserve her indignation for the time when someone equates fascist Germany with today's U.S.

¿Si o no se puede?

Like prostitutes, the politicians most people like need to have just the right amount of experience: a complete rookie is no good, but neither is a grizzled veteran. This is unfair to prostitutes. As long as they have scrupulously used protection throughout their careers, so what if they have been in the business for a long time? But for the politician, it is different. There is no prophylactic effective enough to keep uncorrupted for any appreciable period of time a politician who has been in the business a long time, developed a large clientèle and moved up the party ladder. In fact, the only effective prophylactic in politics is abstinence.

Nietzsche wrote an aphorism to warn prospective politicians about the modern Unitedstatesian political system: "He who fights with monsters might take care lest he thereby become a monster. And if you gaze for long into an abyss, the abyss gazes also into you." What Nietzsche was trying to say was that the United States has been ruled for so long by such evil people - slaveowners, genocidal conquerors, robber barons, monopolists, industrialists, war profiteers, etc. - that you could call them monsters. And if you would want to fight these monsters in the arena of politics, you may have to become a monster yourself to stand a chance of winning. For instance, if you are Obama and want a chance to be elected, you will have to show that your views are inoffensive to the kind of monsters who have been ruling the country since its inception. Anyone who would take on problems like the military-industrial complex or the structural inequalities and injustices inherent in capitalism simply has no chance against the monsters of the political abyss. He or she would get eaten alive.




So is there hope in Obama? Listen to Bill Hicks (just change Clinton to Obama, and "Love Connection" with "American Idol" or something): (and George Carlin on the American Dream is appropriate as well)

Then again, while there is little hope in Obama himself, there is hope in the people who may elect him. People forget that the New Deal was not singlehandedly invented and implemented by FDR. Every advance for working people during FDR's presidency had to be pushed for by the organized left; it did not matter that public opinion was firmly behind him, a disorganized public is easily routed. Without the organized left, FDR would have been unable to accomplish anything in the face of the resistance put up by well-organized and fat-pocketed business interests. Take the example of the National Recovery Act, FDR's first major piece of legislation in office. From A People's History of the United States: "From the first, the NRA was dominated by big business and served their interests. As Bernard Bellush says (The Failure of the N.R.A) it's Title I 'turned much of the nation's power over to highly organized, well-financed trade associations and industrial combines. The unorganized public, otherwise known as the consumer, along with the members of the fledgling trade-union movement, had virtually nothing to say about the initial organization of the National Recovery Administration, or the formulation of basic policy.' [] Where organized labor was strong, Roosevelt moved to make some concessions to working people. But: 'Where organized labor was weak, Roosevelt was unprepared to withstand the pressures of industrial spokesmen to control the . . . NRA codes.'" I believe it was FDR who once told a left-wing supporter, "you must force me to do what you want me to do." No president, no matter how charismatic, can single-handedly defeat business and financial interests that are organized and united around a common objective. Unless, that is, popular interests unite and organize as well.

The movement now forming around Obama, if it gets organized and demonstrates staying power, may be the source of real hope. It could provide the organized counterweight to big business's legions of lobbyists, think tanks and the mass media. Time will tell. And although Obama's airy rhetoric and centrist positions make one leery, now is probably not the time to rail against him from the left, thereby making oneself more leftist than the Communist Party USA.

After all, he has got to be better than McCain:




Honorable mention: John McCain No, You Can't