On Economy, Pessimism Abounds
Twenty years ago, in 1990, the American economy was in the third year of a deep recession. It was impossible to find a job. The 1980s housing bubble had popped; high-end housing prices in New York City dropped by 80 percent. Then, as now, the president seemed oblivious, aloof and clueless. Two years later, with no recovery in sight, angry voters turned him out of office.
But help was on the way. Something called the World Wide Web appeared in 1991. Two years later, Mosaic—the first graphic web browser, which would evolve into Netscape—was introduced. The Internet boom began. It flamed out seven years later, but in the meantime tens of millions of Americans collected new, higher paychecks. They spent their windfall. Consumer spending exploded. So did government tax revenues. When Bill Clinton left office in 2001, the Office of Management and Budget was projecting a $5 trillion surplus over the next ten years—enough to pay off the national debt and fund Social Security for decades. Unemployment had fallen to four percent. United States GDP accounted for a quarter of the global economy.
It’s different this time. We are in a deep depression: calculated the same way as it was in the 1930s, the unemployment rate is the same as it was in 1934. Global credit markets have stalled. Investment has ceased.
And help isn’t coming.
Despair oozes between the lines of media interviews of economists. Asked where the recovery will come from, they run down the list of theoretical possibilities, dismissing them one by one. The question remains unanswered. Which is, of course, the answer.
No one knows where the recovery will come from for a simple reason: It isn’t coming. Not any time soon.
“A robust rebound in retail sales earlier in the spring had fueled hopes that consumer spending—which makes up about 70% of U.S. economic activity—would give a strong lift to the recovery. But now that is looking increasingly unlikely,” reported The Los Angeles Times. “Households are not going to be the engine of growth for some time,” Paul Dales of Capital Economics told the newspaper.
“In past recoveries, booming construction activity led the way, fueling spending and other economic activity. That’s not happening this time,” said the Times.
If there’s some new technological innovation—like the Internet in the early 1990s—waiting in the wings, no one has heard or seen it.
Forget about Congress. The feds wasted hundreds of billions of dollars to bail out banks, insurance companies and big automakers who used our taxpayer money to give raises to their top executives and remodel their offices. Meanwhile, the stimulus that needed to happen—bailing out distressed homeowners, small businesses and individuals who lost their jobs—never happened. Now Congress is worried about the deficit. So read my lips: no new bailouts, not even one that might actually work.
Some think the U.S. could export its way out of the depression. But a radical restructuring of trade agreements and manufacturing infrastructure would have to come first, followed by years of expansion. U.S. policymakers haven’t even begun to think about the first move. Moreover, the rest of the world isn’t in a position to buy our stuff. The rate of expansion of the economies of China and Japan is slowing down. Germany and other EU nations are imposing austerity measures.
Globalization is key. Writing in The Wall Street Journal, John H. Makin argues that the actions of individual G20 nations threaten to bring the whole system crashing down in a Keynesian “paradox of thrift.”
Makin says: “Because all governments are simultaneously tightening fiscal policy, growth is cut so much that revenues collapse and budget deficits actually rise. The underlying hope or expectation that easier money, a weaker currency, and higher exports can somehow compensate for the negative impact on growth from rapid, global fiscal consolidation cannot be realized everywhere at once. The combination of tighter fiscal policy, easy money, and a weaker currency, which can work for a small open economy, cannot work for the global economy.”
Adds Mike Whitney of Eurasia Review: “Obama intends to double exports within the next decade. Every other nation has the exact same plan. They’d rather weaken their own currencies and starve workers than raise salaries and fund government work programs. Class warfare takes precedent over productivity, a healthy economy or even national solvency. Contempt for workers is the religion of elites.”
One can hardly blame workers for fighting back. Two weeks after hundreds of protesters rioted at the G20 summit meeting, Toronto police are pouring through thousands of photos and are using facial recognition software to track down offenders. They have even released a Top 10 “Most Wanted” list and related pictures of activists.
Whether or not the anti-globalization protesters are motivated by the struggle for liberation and economic equality, they symbolize the industrialized world’s best chance to prevent the economy from continuing its current process of slow-motion collapse. If the system cannot be saved by consumers, business or government, the system itself must be revamped and replaced. Late-period global capitalism’s constant cycle of booms and busts is unsustainable and intolerable. States must regulate and equalize incomes, and control production.
If the cops were smart, they would track down and arrest those people who really are ruining the economy. They could start by listing and releasing the photos of the attendees of the G20.
(Ted Rall is the author of “The Anti-American Manifesto,” to be published in September by Seven Stories Press. His website is tedrall.com.)
COPYRIGHT 2010 TED RALL
65 Comments.
Paragraph 15: “Toronto police are pouring through thousands of photos…” That should be “poring.” (Merriam-Webster: Pore v. 1. to gaze intently; 2. to read or study attentively—usually used with over; 3. to reflect or meditate steadily) Let me know if you want a last-minute proofreader…
There was an 8 month recession July 1990 –
Mar 1991and it was not very deep. GDB decline was only 1.4%
Barry spent $150 million on 300 jobs at a battery factory. That’s $500,000 per worker. At this rate we’ll be a broke third world nation in no time.
the first thing we have to bear in mind when we project to revamp the system it is the necessity to transcend the world capital/labor contradiction.
in my view, this is now possible.
let us read as capital, and for that matter “the Lord of Capital”, he who operates, as a private concession, all the central banks in the world.
as labor, we identify all entrepreneurs and voluntary slaves. ¿isn’t it in exchange for a salary that man today accepts his condition of a slave?
the House of Rothschild and some friends, for instance, operate the federal reserve bank, the european central bank, the bank of england, the bank of japan, etc.
as a result, agriculture, industry, banking and trade, and public service companies in every nation have become “a piece” in the world empire of the Lord of Capital, the House of Rothschild.
¿IS THERE ANY POLITICAL OR ECONOMIC REASON OR NEED TO HAVE “those few boys” operate, ANY LONGER, the world central banks, privately and for a profit?.
IF WE were TO INDICATE WHERE TO MOVE,
a.- let us first know that money is not a commodity. money is a force tHAT enhances the flow of goods and services.
b.- let us imagine a world nation in which all nations participate on a free and equal basis. and the goal of every nation is to ensure that each one of its citizens does freely his best to his utmost possible.
c.- in such a world nation, let us imagine a project managers’bank in charge of providing ressources to all producers of goods and services, for a fee, as a true public servant…
WHAT DOES HISTORY have to say:
on july 14, 1789, the french monarchy was dethroned…and the money class took over…this money class instituted the republican state and selected in each nation leaders to political parties…
the state was born. and the state supplanted the nation!
two centuries later,a word emperor has emerged: the house of rothschild and his new world aristocracy which is made of the bosses of traditional political parties.
¿aren’t constitutions social contracts designed by members of political parties? ¿don’t the political parties, in turn, act as the executive, the legislative and the judiciary on behalf of the world emperor?
let us remember what alexander hamilton did when he became the treasury secretary of the united states of america:
he proposed the creation of a central bank, and to award its operation to john adams friends: dutch financiers of the independence wars with whom adams have been in business since 1782.
let us deprive the world emperor of his central bank concessions and a beautiful new world will come out of the ashes of the current crisis…and the capital/labor contradiction superseded…
.
¡and the crisis will then have fulfiled its purpose!
Route – We are already a broke third world nation, we’re just surrounded by so much material crap we think we’re not.
More importantly, Route, is this: We can go through an endless circle of “Carter did this – Reagan did that – Bush I did this – Clinton did that – . . . .etc ad nausea….but it’s all just a series of conventionally thought out, half hearted “gotcha”s being lobbed back and for across the Somme. They’re all ideographic, and therefore utterly useless for actually moving forward.
That’s the point…..that’s the point of all the ‘economic analysis’. . .it’s just a bunch of motormouths whose livelihood depends on them continuing to spew verbiage. Everyone is in lockdown mode, it’s like 1916…the machine grinds on but nothing is really happening….just making human sausage.
mmmm….sausage, I had some Extra Sage sausage this morning, it was delicious….
So until we break out of this asinine paradigm of “gotcha” conventions, we’re stuck…all the lifeboats are accounted for dude, and if you even know who Ted Rall is, you most likely don’t have a seat on one of them.
I’m not as pessimistic on this topic as you, Ted. To end this deep recession we are employing all three of the traditional stimulus methods: fiscal stimulus (i.e., increased government spending), monetary stimulus (i.e., very low interest rates), and tax stimulus (i.e., the unconscionable tax cuts Bush gave us are doing us some good in the current climate). Absolutely, I agree that we could do even more, but at least we don’t have Ronald Regan, the man whose “cure” for financial distress created a recession.
(BTW, I am no Obama apologist. He is proving to be worse than Bush when it comes to the wars and civil liberties; and that bailout should have gone to the homeowners, not the mortgage holders.)
States must regulate and equalize incomes, and control production
It’s to tempting to pass, so I have to ask: wasn’t 70 years of that crap enough in Eastern Europe? Pray tell, how do you equalize incomes between employees and business owners? How do you expect to achieve that (and to “control production”, no less!) and not have a huge, oppressive state apparatus in place?
Stick to writing about the wars in Asia, and spare us your economics wisdom.
“Pray tell, how do you equalize incomes between employees and business owners? “
I can use your own value theory of labor to answer your question:
1) the price of labor is determined by its value to the buyer.
2) the buyer only pays for labor it believes is necessary.
3) thus the value of any labor performed for a buyer can be described as necessary
4) since the value of all labor is necessary, the buyer happily pays the same price for any labor.
there is also this model.
http://arizmendi.coop/
US395 and Bucephalus, If you watch this, I promise to watch a video of your choosing and take a quiz on it.
http://www.youtube.com/watch?v=TBfHD2n13OA#t=31m57s
be prepared for a quiz.
Oleg, your “answer” makes no sense whatsoever, not economically, nor logically. I don’t think you got the point of my question, which goes directly to the heart of Rall’s ominous prescription (or, at least, my understanding of it): how do you make all employees (in every workplace) and all business owners (in every line of business) make the same amount of money? How do you “control production” without a hugely repressive state? I have nothing against cooperatives, they would be a natural arrangement in a free-market order, but I think what you want is for everyboy to be forced into a cooperative, right?
Noam sometimes has some right things to say about foreign policy (although a pacifist he ain’t), but he’s an economic illiterate. Though I don’t disagree with a critique of the enmeshment of the interests of big corporations and big government, I’m surprised that he doesn’t mention the ridiculous “war on drugs”, which magically makes criminals out of (mostly minority) non-violent people. I think I’m ready for my quiz.
Oleg,
Assuming for a minute all labor is necessary, the type of labor they do is not equal. A janitor is more easily replaced than a highly skilled engineer. And, generally speaking, a janitor can only satisfy the needs of a small finite group of people,where an engineer’s skills can be muliplied throughout millions of products satisfying the wants or needs of millions.
Oleg,
Thanks for the challenge, but I am not going to sit through a 49 minute video to take a quiz on something. If you have something to ask me, just ask.
Bucephalus and US395
Stop pretending that businesses hire and pay people they do not need to hire and pay. Once you have caught up to the Chicago School on that one, you can then decide if you want to follow them down the road of violating that principle by advocating for unequal pay despite all labor being necessary. if you think the janitor is not needed, you will not waste money hiring him.
Bucephalus, no one seriously believes the teachings of Hayek, Friedman and the Mount Pelier summit attendees, so stop using them as an excuse to avoid discussion. The supposed financial literates have all been exposed. They served their purpose. The international capitalist class now is unchained, and is acting strategically to further dis-entrench pro-democracy forces around the world. trickle down has officially dried up. Where have you been?
US395, stop pretending not to notice the link I sent you starts the video at 31:57. Just watch 3 minutes, I dare you.
US395, that was a funny joke about engineers having better job security than janitors.
Oleg,
I am not throwing names around, you are. Since you mentioned them, I might add that I don’t particularly worship Hayek or, especially, Friedman, but they were, nonetheless, respected scholars, who made cogent, albeit imperfect defense of free-market economics. Hayek having managed to overcome the pro-statist prejudices of the Swedish Central Bank. I lean more towards Von Mises myself.
Economics is a science, it is not to be “believed”, but rather to be logically argued, defended or fought. That having said, what no one takes seriously anymore is Marxist economics. NB, I said Chomsky is an “economics” illiterate, not a “financial” illiterate (which he probably is too). Find me a video of him debating a real economist, no matter of what orientation, instead of lecturing drooling fans, and we’ll talk. In the meantime, I’ll find a free-market video for your powerful analytical skills to chew on.
Where’s mi quiz?
Bucephalus, Economics may be a behavioral science. It cannot be a true science because it is too difficult to conduct experiments and measure results without a controlled environment. Only by paring down reality past any useful point can a measurable function be arrived at. If an economic theory calls itself scientific, it relies on too many fundamental unproven assumptions, and/or leaves too much out to be useful. Market failure is real and measurable, however. The market has been our only government for a while now, and by all accounts, the gen-Yers grandparents had it better.
There is no such thing as “marxist economics”, as far as I can tell. Perhaps you are talking about Dependency Theory? Your quiz will be forthcoming.
Oleg,
I didn’t say anything about job security. I am an ex engineer.
Oleg,
Where did I say that businesses hire and pay people they do not need to hire and pay.
US395, stop pretending not to notice the link I sent you starts the video at 31:57. Just watch 3 minutes, I dare you.
Ok Oleg, you caught me pretending. really i’m too scared. BTW you make an excellent wife.
US395, thanks so much. You make a splendid ex-engineer, as do countless surplus engineers. What are engineers supposed to do? Monitor world trade and immigration policy and have a quadruple, cross disciplinary major? Perhaps you have found a place where American workers can purchase unemployment insurance in the free market. I hope you have a job now. If not, all you need to do now is give the police a reason to arrest you, you can work for three hots and a cot, gauranteed!!
>>>I am not throwing names around, you are. Since you mentioned them, I might add that I don’t particularly worship Hayek or, especially, Friedman, but they were, nonetheless, respected scholars, who made cogent, albeit imperfect defense of free-market economics.>>>
Hayek. Friedman. Von Mises. These are names that most Americans have never heard of. Tell, me, bucephalus, why is that? If these people are so great, then why aren’t their names household words?
If they champion the “capitalist free-market”, then every schoolchild would be learning not only their names, but would be required to read their books, since this is a capitalist society. It would make absolute sense to learn capitalist philosophy in a capitalist society. So why aren’t kids learning about these great masters?
I’ll tell you:
Because the free-market (i.e. capitalism) does not benefit the majority of people, and it never will. And the reason for that is because it is not *supposed* to. It’s only supposed to benefit the Elite of people, not the majority ordinary people. If the typical schoolkid were to learn Hayek or Friedman or Leo Strauss or Ayn Rand, it would be a disaster. This is because it would clearly show to said schoolkid that the philosophy of these masters is that the majority of people in the world are nothing but sacrificial cannon fodder. To be used, enjoyed, and then discarded when no longer needed.
And this is why Ronald Reagan read Milton Friedman’s works and had Friedman as an unofficial advisor, but never went on television to applaud Friedman’s great work, or make an effort to distribute his books, or give him his own television show, even though he had eight years to do so. Friedman is for the Elite Few, not for the Common Many.
“Where did I say that businesses hire and pay people they do not need to hire and pay.(sic)
“
I am very charitable in discussion, because I enjoy discussion. This means taking for granted that the person you are having a discussion with does not believe something totally asinine.
That said, I am glad you believe businesses hire people for philanthropic reasons. Would you like to elaborate?
That said, I am glad you believe businesses hire people for philanthropic reasons. Would you like to elaborate?
You are incorrect, I never said I believe that.
I hope you have a job now.
No I took a risk and started my own business.
Oleg,
Economics may not be a hard science like the ones we engineers love and cherish (Physics, Chemistry), – even though crazed Keynesians like to pretend it is -, but it’s most definitely a science in that investigation of cause and effect and logically defended arguments. You’re right about being impossible to run controlled experiments in economics, though: only the loonies who work in central banks believe that.
There is no such thing as “marxist economics”, as far as I can tell.
Silly me, I though the very same Karl fancied himself an economist. At least I’m not alone in thinking that:
http://en.wikipedia.org/wiki/Marxian_economics
The late Soviet Union’s universities churned out a good deal of Marxist/Marxian economists too. Wait, somewhere, they’re still actively teaching that:
Perhaps you are talking about Dependency Theory?
This is bullshit too, but it has nothing to do with economics, since its proponents were also economic illiterates. Didn’t stop some of them becoming economy czars and presidents.
Your quiz will be forthcoming.
I look forward to it.
1. Now that Obama owns GM, what is he doing with it?
a) trying to get all of the employees to vote for him
b) keeping factories open
c) closing factories
2. Starting when were the bulk of neoliberal programs instituted in the US?
a) 70s
b) 80s
c) 60s
d) both a and c
3. Where does the US addiction to cheap labor come from?
a) slavery
b) illegal immigration
c) World war II
d) early protectionism
e) both a and b
f) both a and d
4. Today, there are not enough jobs for everyone because of______________.
a) too much socialism
b) manufacturing being shifted outside the country
c) an over emphasis on the health of financial institutions rather than a broadly healthy economy
5. The internet was developed mostly by
a) entrepreneurship
b) consumer choice
c) public universities, government labs
d) 30 years of testing and development in the public sector
e) a and b
f) c and d
6. A classic example of state intervention in the economy can be seen in which of the following examples?
a) Andrew Carnegie utilizing the free labor of criminalized blacks
b) The New Deal
c) protectionism
d) all of the above
7. Economic growth will come as the result of
a) a functioning society with a strong government promoting the general welfare
b) eliminating worker protections and industry regulation, disciplining labor through international wage attrition
c) promoting capital flight
8. Half of the the US deficit is comprised of
a) entitlements
b) inefficiencies in the private health system
c) military spending
d) the bailout
9. Those who favor neoliberal economic policy advocate policies which lead to eliminate jobs, and then wonder why people are on unemployment.
T or F
annotations welcomed
Quoth Susan:
Hayek. Friedman. Von Mises. These are names that most Americans have never heard of. Tell, me, bucephalus, why is that? If these people are so great, then why aren’t their names household words?
For the same reason that neither are, say, Lord Keynes, Amartya Sen or Mangabeira Unger. The same reason Lady Gaga is a household name, actually. Then again, you purposefully ignore the distinction I made between Mises, as much of a pariah in policy circles as he is in the academy and Hayek and Friedman. And if I have to repeat myself, Friedman is not the “purest” free-market theorist there is.
That said, Friedman was not in charge of economic policy: people like Paul Volker, Alan Greenspan, Henry Paulson, Larry Summers were. These people are part and parcel of the crony corporatist, big government system you and I deplore. It might surprise you too that the US is not considered the epitome of the free-market by anyone except hard-core leftists:
http://en.wikipedia.org/wiki/Index_of_Economic_Freedom_historical_rankings
Free markets do benefit everyone, and it doesn’t benefit your argument that you have to resort to emotionally charged rhetoric to try to refute that. If anything, central planning is the one arrangement that uses people as “sacrificial cannon fodder” for their neatly designed five-year plans.
Thanks for this, Bucephalus!
The list ranks certain countries’ economic freedom. Hong Kong won. wow, Chile is still hanging in there (where did all those surplus workers go? I know I put them somewhere…). This list explains where all of the Norwegian day laborers at Home Depot came from…
The more the Heritage Foundation loves your country, the less you will
Hong Kong
Singapore
Ireland
Australia
United States
New Zealand
Canada
Chile
Switzerland
United Kingdom
Denmark
Estonia
The Netherlands
Iceland
Luxembourg
Finland
Japan
Mauritius
Bahrain
Belgium
Barbados
Cyprus
Germany
The Bahamas
Republic of China (Taiwan)
Lithuania
Sweden
Armenia
Trinidad and Tobago
Austria
Spain
Georgia
El Salvador
Norway
Slovakia
Botswana
Czech Republic
Latvia
Kuwait
Uruguay
I’ll redo question 1 on Oleg’s quiz. Should the federal government own any part of GM?
No.
US395
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I’ll redo question 1 on Oleg’s quiz. Should the federal government own any part of GM?
No.
No, it is much better that they are private so they can be free collaborate with the NAZI’s.
>>>Free markets do benefit everyone, and it doesn’t benefit your argument that you have to resort to emotionally charged rhetoric to try to refute that. If anything, central planning is the one arrangement that uses people as “sacrificial cannon fodder” for their neatly designed five-year plans.>>>
The free-markets do benefit everybody, you say? Well Venezuela had a free-market before Chavez came to power, and if you walked down the street in most neighborhoods in Caracas, you could be killed for your wristwatch and your shoes. But hey, the thief-murderers surely sold their loot, so I guess the free-market benefited them.
And you wanna talk about “five-year plans”. Well, Milton Friedman’s philosophy was applied in Chile after the coup by General Pinochet in 1973. A coup which caused the deaths and disappearances of thousands of people over a number of years. And if you want the gruesome details of how Friedman was at least partly if not wholly responsible for this, you can read Naomi Klein’s “The Shock Doctrine”. But what does Naomi Klein know? She’s just one of those nambi-pambi looney leftists who just so happened to be right about the Iraq War being an expensive boondoggle.
1. Now that Obama owns GM, what is he doing with it?
B
2. Starting when were the bulk of neoliberal programs instituted in the US?
a) 70s
B
3. Where does the US addiction to cheap labor come from?
A
4. Today, there are not enough jobs for everyone because of______________.
Both B and C.
5. The internet was developed mostly by
C
6. A classic example of state intervention in the economy can be seen in which of the following examples?
All of the above.
7. Economic growth will come as the result of
A
8. Half of the the US deficit is comprised of
C
9. Those who favor neoliberal economic policy advocate policies which lead to eliminate jobs, and then wonder why people are on unemployment.
True.
GM can be free collaborate with the NAZI’s
Oleg,
That’s your argument for government ownership of GM?
[GM selling out to the NAZIs] is your argument for government ownership of GM?
I think you must have meant to say:
GM selling out to the NAZI’s is the free market’s vote for fascism
Sure, okay. But it only tells part of the story. To build a truly great car (or plane, or internet…), development needs to occur in a government-subsidized and stipulated environment from the get-go. Take Volkswagen, for example. Porsche would never have dreamed of designing a car that was 50 years ahead of its time (30mpg, air cooled, easily serviced and affordable). Even Hitler understood that for-profit corporations could not be trusted to think outside the profit motive. Businessmen only need to beat their closest competitor by a little. Government mandate and subsidy makes possible huge innovation.
Now, if the government happens to be an agent of the corporations, this whole system breaks down as the corporations simply direct the government to act in corporate interest. Bailouts galore. The government starts doling out money to corporate welfare queens. Corporate welfare queens. Corporate welfare queens. Corporate welfare queens. Corporate welfare queens. Corporate welfare queens. Corporate welfare queens. Bailouts galore. Corporate welfare queens. Corporate Bailouts galore. Corporate welfare galore.. Corporate welfare queens. Corporate welfare queens. Corporate welfare queens. Corporate welfare queens. Corporate welfare queens. Bailouts galore. Corporate welfare queens. Corporate welfare.
Susan Stark
95%
1) actually, Obama is closing factories. about 20 are slated for elimination last I checked. He is following the neoliberal line right down the middle. You still get credit since, presumably, some will be left open. (-2.5)
2) while neoliberal adjustment is generally understood to have jumped into high gear in the 70s, it was really Kennedy’s tax break for the wealthiest one percent (taking the tax rate from 90% down to about %50) which really allowed newly cash-flooded private actors begin making the wheels turn. (-2.5)
Barry closed 2,000 GM dealerships costing 100,000 jobs. Decisions on which car dealerships to close as part of the auto industry bailout were based in part on race and gender, according to a report by Troubled Asset Relief Program Special Inspector General Neal M. Barofsky.
Sounds like Barry is a racist and sexist.
Sounds like Barry is a racist and sexist.
yep, especially against black people.
Oleg proposed the following quiz:
1. Now that Obama owns GM, what is he doing with it?
If the question were “what should he be doing”, my answer would be:
D) Let it go bankrupt, instead of tagging the bill of mismanagement on the unfortunate American and Canadian taxpayers.
2. Starting when were the bulk of neoliberal programs instituted in the US?
Oh, I see you’re adopting the meaningless “neoliberal” qualifier that’s so popular with the European Left. I can only hope it becomes more popular with Americans, because it refers to the old, Classical sense of Liberalism, instead of the misappropriated contemporary American meaning.
Answer: E) Monetarist is not the same as “neoliberal”.
3. Where does the US addiction to cheap labor come from?
Am I to take this “addiction” for granted and guess what’s in your head?
Answer:
E) Cheap has a very different meaning in most of the world.
4. Today, there are not enough jobs for everyone because of______________.
D) Unionized labor driving out industry from most Wetern countries.
5. The internet was developed mostly by
Ah, this takes the proverbial cake. The answer is obviously
A) & B), with a bit of C)
Now, I understand your using select factoids from your favorite leftist guru to drive your statist point, but believe I’d be delighted to argue protocol by protocol, RFC by RFC, standard by standard, IETF resume by resume. You will have a freaking hard time defending the “invention” of the “internet” by Gubmint.
6. A classic example of state intervention in the economy can be seen in which of the following examples?
D) all of the above,
Obviously, but you could also add eminent domain, if you were serious about it
7. Economic growth will come as the result of
D) People producing freely what their neighbors would be happy to trade their goods for.
8. Half of the the US deficit is comprised of
C) But I bet you’d be surprised I don’t like that either.
Not that the other items aren’t also a waste, but at least they don’t cost life and limb, literally.
9. Those who favor neoliberal economic policy advocate policies which lead to eliminate jobs, and then wonder why people are on unemployment.
Nonsense, but since you also menntioned this:
Chile is still hanging in there (where did all those surplus workers go? I know I put them somewhere…).
I will say that looking at this chart:
http://en.wikipedia.org/wiki/List_of_countries_by_unemployment_rate
Chile doesn’t seem to be faring all that bad compared to other Latin American countries (actually, considering all economic indices, Chile is a doing a lot better that the rest of us). And, unemployment rate wise, it seems to be doing a lot better than France, Italy or Spain, but I’m sure you’ll put that down to those countries’ “neoliberal” policies.
The free-markets do benefit everybody, you say? Well Venezuela had a free-market before Chavez came to power, and if you walked down the street in most neighborhoods in Caracas, you could be killed for your wristwatch and your shoes. But hey, the thief-murderers surely sold their loot, so I guess the free-market benefited them.
Susan, I know this is almost abstract for you, probably repeating talking points from other leftist sources about places far, far away, that you imagine you understand. Let me set you straight: Venezuela has never had a free-market, and if you disagree, tell me when was PDVSA a private company. People shooting you for your sneakers or your watch is still a common occurrence (just like it is, unfortunately, down here in Brazil) and people still look over their shoulders in Caracas. Difference is, it’s going downhill, unlike in most of Latin America.
And you wanna talk about “five-year plans”. Well, Milton Friedman’s philosophy was applied in Chile after the coup by General Pinochet in 1973. A coup which caused the deaths and disappearances of thousands of people over a number of years.
Let me repeat, you’re not lecturing someone from Iowa who has no idea where Chile is. First, like I said a couple times before, Friedman is not my prophet, and I don’t consider him the most authenticate, consistent or orthodox advocate of the free-market. Second, Chile under Pinochet was hardly a free-market economy, but it’s interesting to notice most of the “neoliberal” policies (to borrow Oleg’s misnomer) were kept by later, democratically elected, Socialist administrations. Third, the history of late 60’s and 70’s Latin America is a little bit more complicated that your lefty textbooks make it seem. I don’t mean to exonerate the brutal and bloody regimes of Pinochet, Videla and their counterparts in Uruguay, Paraguay and Brazil, but we should never forget the late Soviet Union (via its Cuban proxy) was radicalizing and driving leftist militants into armed action across the continent, radicalizing people on the other end of the political spectrum. Heavens, Colombia is still paying a heavy price for that and Peru still reels from it.
OTOH:
And if you want the gruesome details of how Friedman was at least partly if not wholly responsible for this, you can read Naomi Klein’s “The Shock Doctrine”. But what does Naomi Klein know? She’s just one of those nambi-pambi looney leftists who just so happened to be right about the Iraq War being an expensive boondoggle.
It’s not like Friedman or his “Chicago boys” from Chile were torturing or making the military torture leftist guerrillas!
Me, I prefer Naomi Wolf myself, she’s been a consistent critic of both wars, under both Fools-in-Chief, and the expansion of the police state in America, under both awful administrations. BTW, I was right about the Iraq war, too.
Oleg, I notice I let it slide earlier, but didn’t you mean “labor theory of value”, which, BTW, is a Marxist concept and not an Austrian one, in your convoluted and confused “explanation” for how to “equalize” salaries and profits?
Bucephalus,
Value theory of labor is the opposite of the labor theory of value. It’s the notion that the value of labor is determined simply by what someone is willing to pay for it. (It is somehow tied to marginal utility, but that is a bastardization of Bernoulli’s idle musing.
Oleg proposed the following quiz:
1. you are preaching to the choir. The Swedish model is the most attractive, I think; If a company cannot afford to pay its workers a living wage while competing globally, it is a failure. Let it die, and have amazing mandatory unemployment insurance that never runs out.
-2.5 for redundancy
2. [neoliberalism] refers to the old, Classical sense of Liberalism, instead of the misappropriated contemporary American meaning. Answer: E) Monetarist is not the same as “neoliberal”.
Quite wrong. The reforms are called neoliberal because your favorite classically liberal economists were dead already, and Freidman et al. had by now built some applicability (ie. monetarism) into the ideas. What do you think; would Von Mises had liked the idea of a central bank? Perhaps you would rather I describe the non Keynes-derived policy outcomes of the last 40 years as Classically liberal?
-1 for not answering the question and -2 for debauched etymology and ham-fisted parsimony
3. Where does the US addiction to cheap labor come from?
Am I to take this “addiction” for granted and guess what’s in your head?
Answer:
E) Cheap has a very different meaning in most of the world.
Cheap means not enough to live on. It means that everywhere.
-1
4. Today, there are not enough jobs for everyone because of______________.
D) Unionized labor driving out industry from most Wetern countries.
This, I would actually love to discuss in detail with you. For now I will just say that if the owners cannot afford to pay the workers even half of what they get, they should not be in business.
5. I’d be delighted to argue protocol by protocol, RFC by RFC, standard by standard, IETF resume by resume. You will have a freaking hard time defending the “invention” of the “internet” by Gubmint.
Ok lets start with RFC; It was invented by a guy at a state funded university, and developed it while collaborating with at least three other state institutions, including MIT and the Department of Defense. Perhaps we should start with you helping me find even one completely privately funded substrate of the internet, or anything at all.
-1 for debauchery
6. D) all of the above,
Obviously, but you could also add eminent domain, if you were serious about it
why bother with this supreme court. I can’t even see the ocean from the shore there are so many beach houses.
7. Economic growth will come as the result of
D) People producing freely what their neighbors would be happy to trade their goods for.
yay anarchy!
8. Half of the the US deficit is comprised of
C) But I bet you’d be surprised I don’t like that either.
Not that the other items aren’t also a waste, but at least they don’t cost life and limb, literally.
No. I am actually perpetually surprised with what we do not agree on because it is so basic.
9. Hey, Chile is doing alright..
yes Chile is doing fine. During the food riots, Pinochet finally kicked Milton and the supply-siders out and took a page from Keynes.
I never heard of such nonsense, and the exact term “value theory of labor”, or what you claim it stands for, is not Classical, Austrian, Keynesian or Friedmanite. Are you taking your economics classes from Chomsky by correspondence?
The price of labor is, of course, a function of how much the buyer is willing to pay, as well as how much the seller is willing to take. Supply and demand apply as usual. Lose the adverbs (“simply”, “solely” etc) and you’d be fine.
yeah, you will not find it on, wikipedia, Bucephalus. Sorry.
…not to Rag on Wiki. Check out this passage I found there of Milton Friedman talking about Von Mises:
“Fritz Machlup was a student of Mises’s, one of his most faithful disciples. At one of the Mont Pelerin meetings, Fritz gave a talk in which I think he questioned the idea of a gold standard; he came out in favor of floating exchange rates. Mises was so mad he wouldn’t speak to him for three years. Some people had to come around and bring them together again.”
Bucephalus, I think I am starting to like this Von Mises guy!
Let me summarize our conversation on the price of labor, and then add to it.
Bucephalus: “Pray tell, how do you equalize incomes between employees and business owners? “
Olegna78: Value theory of labor. The price of labor is determined by its value to the buyer
Bucephalus: didn’t you mean “labor theory of value”
Olegna78: No, I used the rearranged phrase because I mean the opposite of that. The value of labor is determined simply by what someone is willing to pay for it.
Bucephalus: I never heard of such nonsense. The price of labor is, of course, a function of how much the buyer is willing to pay, as well as how much the seller is willing to take.
It is a little like a Who’s on First sketch, but it appears we agree on where the value of labor comes from. I have some thoughts on the part about “what the seller is willing to take”.
Neither of us will get to see even an approximation of our ideal economy put into practice on any appreciable scale because of persistence of phenomena we both detest (forced slave labor, rigged markets, war-profiteering, transnational corporations conspiring with corrupt state systems to turn indigenous land into state-subsidized mega-farms and then employing some of the former land owners for a pittance). These phenomena, in varying degrees, will necessarily depress the value of everything around them, including any good or service passing through you or I.
example:
http://www.unicor.gov/services/contact_helpdesk/
note the ominous promise to potential outsourcers of “low labor costs” and “Locations throughout the country”!
I am sure you detest the US government’s employment of slaves. I do too. But more importantly, what effect to you suppose this should have upon the value of the labor of employees at, say, Lay-Z-Boy?
I’m glad I failed your Commie School of Wikipicking Economics, Oleg:
1. you are preaching to the choir. The Swedish model is the most attractive, I think;
OK, so you’re a social-democrat, who admires the standard Scandinavian welfare state. I won’t bother you with why I think it is unsustainable (hint: population growth), but I’ll ask you to please refrain from using Marxist jargon, ’cause that’s not what Sweden’s all about. Also, rethink your criticism of large corporations and their dealings with the state, since this is indeed part of the Swedish package. Consistency, please.
2. [neoliberalism] refers to the old, Classical sense of Liberalism, instead of the misappropriated contemporary American meaning. Answer: E) Monetarist is not the same as “neoliberal”.
Quite wrong. The reforms are called neoliberal because your favorite classically liberal economists were dead already, and Freidman et al. had by now built some applicability (ie. monetarism) into the ideas. What do you think; would Von Mises had liked the idea of a central bank? Perhaps you would rather I describe the non Keynes-derived policy outcomes of the last 40 years as Classically liberal?
No, you’re quite wrong. The term “neoliberal”, AFAIK, started out down here in Latin America, and was used as slur towards politicians who started out as socialists, but did a market-oriented backturn once they came to power. In that, it parallels the term “neoconservative”, for folks like Irving Kristol and Norman Podhoretz, who started out as leftists, but later converted to a somewhat conservative (more pro aggressive war than pro market) point of view. Of course, it’s only fair to call Von Mises a Classical Liberal. Of course, only in the US can Paul Krugman be called a “liberal”.
Cheap means not enough to live on. It means that everywhere.
That is not the case of the vast majority of Americans, unlike, unfortunately, in Latin America.
This, I would actually love to discuss in detail with you. For now I will just say that if the owners cannot afford to pay the workers even half of what they get, they should not be in business.
Because you say so? You realize your policy is only good for driving businesses out of business, right?
Ok lets start with RFC; It was invented by a guy at a state funded university, and developed it while collaborating with at least three other state institutions, including MIT and the Department of Defense. Perhaps we should start with you helping me find even one completely privately funded substrate of the internet, or anything at all.
Too bad the late, great Jon Postel isn’t alive to defend himself from the charge of being a government employee. See, you used the very word that kills your argument: “collaboration”. That means a lot of people worked together, and yes, some of that work was commissioned by the state. The vast majority of it was done by private companies and universities that are also funded by private companies. Your “customer” (i.e. Uncle Sam) doesn’t get sole or even major credit for it.
Here’s homewrok for you: go throughout all of the ~6000 RFCs at the IETF site (a non-governmental organization) and check the authors. Count the ‘.mil’ or ‘.us’. Then come back and talk.
Of course, this is talking about the standards that made the internet possible. Adoption of those standards and the creation of all neat things most people identify with “internet” was the job of the private sector. As usual.
why bother with this supreme court. I can’t even see the ocean from the shore there are so many beach houses.
Of course SCOTUS, never, ever does anything wrong. You don’t get to complain when they turn that city plot and the adjacent small businesses into a Walmart, right?
yay anarchy!
I see nothing wrong with anarchy.
No. I am actually perpetually surprised with what we do not agree on because it is so basic.
What’s basic? That people should do others’ bidding at gun point?
yes Chile is doing fine. During the food riots, Pinochet finally kicked Milton and the supply-siders out and took a page from Keynes.
The leap from Friedman to Keynes (and going back and forth) is a lot shorter than you make it seem.
yeah, you will not find it on, wikipedia, Bucephalus. Sorry.
You caught me. A Google search of those exact words produced nothing relevant, either. Care to reference, preferably on the work of the authors you attribute it to?