Article 43
Friday, July 29, 2011
Book: How the Hippies Saved Physics: Science, Counterculture, and the Quantum Revival
We all lives out lives in accordance with what we think is POSSIBLE, as well as what we think is RIGHT.
Scientistic (not scientific) materialism has been dominant in Western culture for a long time and it’s told us that spirituality is ALL NONSENSE.
That doesn’t encourage anyone’s spiritual life.....
Now as a culture we are beginning to realize that this world view has been too NARROW, the MYSTERIOUS REALMS of quantum physics says the universe is much more mysterious and may be open to spiritual factors. Of course this view can be taken too far, and the word “quantum” becomes just a buzzword to sell things. I have seen adds for quantum toothpaste and quantum toothbrushes.....
But there really is a BIGGER WORLD view involving quantum physics and, to my amazement as I read David Kaiser’s How the Hippies Saved Physics: Science, Counterculture, and the Quantum Revival, I not only understood it better, I realized I personally knew most of the young, hippy physicists who kept stimulating the field of mainstream physics so they would start paying serious attention to the quantum realm. Intellectually stimulating and personally entertaining, highly recommended.
Charles T. Tart.
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Thursday, July 28, 2011
Unemployed Need Not Apply
The Help-Wanted Sign Comes With a Frustrating Asterisk
By Catherine Pampell
NY Times
July 26, 2011
EVEN IF CONGRESS PASSED a measure forbidding companies from making current employment a requirement for job applicants, companies could still simply decide not to hire people who are out of work. Discrimination would be difficult to prove.
After all, there are legitimate reasons that many LONG-TERM unemployed workers may not be desirable job candidates. In some cases they may have been let go early in the recession, not just because business had slowed, but because they were incompetent.
Idle workers skills may atrophy, particularly in dynamic industries like technology. They may lose touch with their network of contacts, which is important for people in sales. BEATEN DOWN by MONTHS of rejection and idleness, they may not interview well or easily return to a 9-to-5 schedule.
“We may be seeing whats called statistical discrimination,” said Robert Shimer, a labor economist at the University of Chicago. On average, these workers might be less attractive, and employers don’t bother to look more closely to pick out THE GOOD ONES.
Employers receive so many applications for each opening that some may use current employment status as an easy filter. In some cases - as with Ms. Wiedemer, of Westminster, Colo. - recruiters merely assume employers do not want jobless workers.
“Clients don’t always tell us we don’t want to see resumes from unemployed workers, but WE CAN SENSE from what people have interested them in the past that they’re probably looking for somebody whos gainfully employed, who’s closer to the action,” said Dennis Pradarelli, a talent acquisition manager for Marbl, a recruiting firm in Brookfield, Wis. Many of the job ads posted by his firm seek workers who are “currently employed or only recently unemployed.”
Many firms that are not intentionally screening out the unemployed may still disqualify such applicants for having bad credit histories after having fallen behind on the bills - which they of course need a job to pay.
It’s not clear what can be done to pull workers out of this unemployment trap.
Government incentives for companies to hire unemployed workers have met with limited success. One such tax incentive from last year was poorly publicized, so most employers did not know about it. Better publicity may not suffice, either. An experiment from the 1980s found that telling companies that the unemployed were eligible for generous wage subsidies actually made employers less likely to hire such workers.
Job counselors often encourage the long-term unemployed to go back to school or volunteer to demonstrate that they are still productive, engaged members of society. But absent the actual acquisition of marketable skills - which many retraining programs do not provide it’s not clear such efforts improve the chances of being hired.
Mentally, it may be good for the candidate, but I think companies are still in a position to say “O.K., were looking for a candidate with the most up-to-date skills,” Mr. Pradarelli said. “If you’ve been out of pocket for two years, GOING BACK TO SCHOOL SOUNDS NICE, but it doesn’t make or break the situation.
The best solution, economists say, would be to encourage job growth more broadly, which may initially involve poaching people from other companies but could eventually draw even the least desirable workers back into jobs. During the boom years of the late ‘90s, the labor market was so tight that ex-convicts had relatively little trouble finding work.
In the meantime, people like Ms. Wiedemer who has been out of work for three years are exhausting their benefits and piecing together what support they can from FOOD STAMPS and family members. And they are stuck hoping that economic growth manages to outpace their own descent into permanent economic exile.
“I worry that unemployment may eventually come down, not because OLDER WORKERS who have been UNEMPLOYED for a year or two find jobs,” Professor Shimer said, “but because older workers finally GIVE UP and DROP OUT of the labor force.”
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Discrimination Against The Unemployed
Scott Pelley
CBS News
August 12, 2012
They discovered it by accident. When Scott Pelley and his team of producers set out to profile JOE CARBONE AND HIS PLATFORM TO EMPLOYMENT PROGRAM, they started hearing the same complaint from people who are out of work: if you’ve been unemployed for a year or more, some companies won’t even give you an interview.
Although it’s not hard to find job ads that say “must be currently employed,” Pelley’s producer Henry Schuster says that bias against the jobless can often be insidious. “Some of these people refer to it as ‘the silent no,’” said Schuster. “But there’s also the pretty overt ‘we don’t want you.’”
Associate producer Rachael Kun spent nearly six months following the progress of a group of jobless men and women in Connecticut who were enrolled in the Platform for Employment program. “There’s obviously a stigma,” said Kun. “Employers tend to believe that it’s the individual’s fault if he can’t find a job.”
What do you think? Should there be a law against this kind of discrimination? Or is it a reasonable way for employers to choose the best candidate for a job?
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Out of Work Over 9 Months? Good Luck Finding a Job
By Ben Casselman
Wall Street Journal Blogs
August 7, 2013
Do the long-term unemployed face a stigma that keeps them from finding jobs? A new experiment suggests the answer is “yes” - at least for low-skilled workers.
The scourge of LONG-TERM UNEMPLOYED has been one of the defining characteristics of the recession and slow recovery. More than three million Americans have been out of work for more than a year, a figure that leaves out millions of others who have given up looking for work because they can’t find jobs. Economists worry many of them will never work again.
Particularly troubling are suggestions that the long-term jobless bear a stigma that leads companies to reject otherwise qualified candidates. The National Employment Law Project has highlighted job postings that explicitly REQUIRE APPLICANTS to be currently employed; many job-seekers have stories of interviews that ended shortly after the, “So, where are you working now?” questions.
Beyond such anecdotal evidence, however, economists have struggled to determine how big an issue the so-called scarring effect really is. Theres no question that workers who have been unemployed longer have a much tougher time finding work. But stigma is only one possible explanation for that pattern. Job seekers might lose hope over time stop searching as hard for work. Perhaps their networks break down over time, meaning they miss out on job opportunities because they hear about them late, or not at all. Or perhaps the best candidates get hired first, so the ones left in long-term unemployment are less attractive to employers for reasons unrelated to their joblessness. Economists have tried to isolate the various factors, with limited success.
Swedish economists Stefan Eriksson and Dan-Olof Rooth decided to test the theory head-on with a straightforward experiment. They applied for more than 3,500 jobs using nearly 8,500 fictitious resumes. Some of the made-up applicants had steady employment histories, some were currently employed but had been jobless at an earlier stage in their careers, and some were unemployed for various lengths of time. Then they waited to see who got called in for an interview. (The researchers quickly declined all interviews.)
In a forthcoming paper in the American Economic Review, the researchers find that short-term spells of unemployment (those of six months or less) had no effect on job-seekersҒ prospects. In fact, for low-skilled jobs, being short-term unemployed may have even been a slight advantage, perhaps because the workers could start right away.
But for the long-term unemployed, it was a different story: The callback rate decreases dramatically at nine months of unemployment,Ӕ the researchers write. For those applying for medium or low-skill jobs (those not requiring a college degree), being long-term unemployed reduced interview requests by 20%, the equivalent of shaving four years of work experience off their resumes.
Interestingly, the pattern didnt hold for those applying for jobs requiring a college degree. The researchers speculate companies may have more rigorous hiring processes for higher-skill jobs, and therefore are less influenced by the contents of resumes themselves. (Of course, thereҒs no way of knowing how the fictitious candidates would have fared if theyd gone through the interview process.)
The good news for the long-term unemployed: If they can find work, the stigma of their joblessness should wash away fairly quickly. Resumes that revealed a year-long unemployment spell in the past got the same response as those with a consistent work history. “One year of work experience is enough to reverse the negative signal of one year of past unemployment,” the researchers conclude.
Messrs. Eriksson and Rooth conducted their experiment in Sweden, but they argue their results likely apply to the U.S. as well, which has a relatively similar job market in many respects. But there’s some evidence their conclusions may be optimistic. Northeastern University graduate student Rand Ghayad conducted a similar experiment in the U.S. last year. His research, which hasnt yet been published, found that employers showed “a strong distaste for applicants with long spells of non-employment” - even when they had better experience than applicants who had been unemployed for less time.
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CWA Selling Out T-Mobile
Unions Are Selling You Out on AT&T T-Mobile - Pretending That T-Mobile Job Losses Will Actually be Job Gains
By Karl Bode
DSL Reports
July 13, 2011
According to the WASHINGTON POST, the Obama administration finds itself stuck between consumer advocacy on one hand, and unions on the other when it comes to approving AT&T’s $39 billion acquisition of T-Mobile. Unions very much support the deal, claiming it will bring high-speed Internet connections to rural areas more quickly and create 100,000 new jobs. Neither of those are necessarily true as we’ve explored; AT&T’s post T-Mobile broadband plans look no different than they do now, and such mergers usually result in the elimination of significant employee redundancies. Says the Post:
The merger would put eight out of 10 cellphone contracts in the hands of AT&T and its biggest competitor, Verizon Wireless. But the CWA says the new AT&T would generate about 100,000 jobs through a promised $8 billion in investment to expand its high-speed wireless network - a powerful argument at a time of soaring unemployment.
Which is interesting, except for the fact that those 100,000 jobs will never actually happen. The EPI study the CWA uses to pull that 100,000 job total number is actually referring to “job years”—which is defined as “one year of employment.” The real total of actual new jobs—if there are any—will be a small fraction of that total. In fact, layoffs will be a consistent story at both AT&T and Verizon, as both companies continue to lose traditional landline subscribers. AT&T’s U-Verse deployment has ALSO BEEN LARGELY FROZEN, impacting job creation. That’s before you get to the elimination of redundant T-Mobile retail locations, and the elimination of redundant T-Mobile support and executive positions.
That $8 billion investment number? Also not really quite what AT&T and the CWA would have you believe. AT&T has TOLD INVESTORS they expect the new, combined AT&T T-Mobile to reduce investment by $10 billion over 6 years as part of deal “synergies.” While AT&T insists they’ll spend $8 billion over 6 years following the merger (something they would have done anyway as they belatedly deployed LTE)—more network upgrade aggressive T-Mobile—based on historical averages—would have spent around $18 billion in capital investment over that period. In short, AT&T and the CWA are claiming job losses are job gains, and investment reductions are investment increases. Up is down, and black is white.
While the Post seems to think that the Obama Administration is hesitant even for a moment in approving the deal, the reality is the deal is getting approved regardless of how loud consumer advocates or union leaders debate.
The sad truth (for consumers, anyway) is that consumer advocates simply have no serious financial or political pull in this persistent deregulatory, merger-manic climate, and ignoring them won’t have any serious repercussions for an Obama administration that has already waffled on issues ranging from serious neutrality protections to telco immunity for breaking domestic surveillance laws. In fact, AT&T’s integral role in domestic surveillance is a huge reason why the deal will be quickly approved with only superficial conditions.
But what about the unions? Why are they supporting a merger that would result in less competition, potentially fewer jobs overall, and significant consumer harms including price hikes? Why give more power to a company like AT&T that historically engages in both anti-competitive and anti-union behavior? With waning influence, the unions are essentially willing to sell their soul for a measly 20,000 additional dues-paying members. Public Knowledge’s Art Brodsky PUT IT THIS WAY in a good piece he wrote back in June:
But what’s in it for the CWA? Remember that figure that allowing AT&T to buy T-Mobile will give 20,000 employees “a real opportunity” to form a union. What that number doesn’t tell you is that T-Mobile in 2009 was named “one of the 100 best companies to work for” by Fortune magazine, the first telecom company to be so included. Avoiding layoffs and having generous child care subsidies were the reasons they were included.
More to the point, T-Mobile now has about 40,000 employees. So CWA took half of them right off the top, assuming that their partner, job-killing but unionized AT&T, wouldn’t keep them around.
The bottom line: for a chance—just a chance—to get 20,000 new members, CWA is willing to lead progressive organizations and Democrats into a world in which AT&T and the (nonunion) Verizon Wireless rule the air, creating that almost duopoly, setting up a GSM monopoly, squeezing out smaller players and setting the stage for higher prices, fewer features on phones, and more stringent bandwidth caps.
For whatever reason, the CWA’s distortions aren’t highlighted by the Post. Most major news outlets also continue to pretend that rejection of the AT&T-T-Mobile deal is even a remote possibility, when in reality we’ve yet to see the current administration or the current FCC stand up to AT&T on any serious issue. Nobody should expect them to start now.
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CWA Is A Sham
As an ex ATT employee I can tell you first hand what CWA did to help me find another job within the company when ATT CLOSED OUR SHOP and laid us of… ABSOLUTELY NOTHING!
In fact, CWA all but blackmailed it’s members into accepting a contract that closed off any jobs in the core of ATT. That effectively gave us only one division to apply for and they were full with no openings.
When SBC, before they bought ATT announced that we were now Union employees. (Workers NEVER voted to Unionize!) I KNEW we were being SET UP.
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Wednesday, July 27, 2011
FAA Layoffs
Republican FAA Shutdown Costs 4,000 Jobs, Threatens 90,000
By Mike Hall
AFL-CIO
July 25, 2011
When Republican House leaders FORCED A SHUTDOWN of the Federal Aviation Administration (FAA) last week, they not only forced the layoff of 4,000 FAA workers, they also put at risk nearly 90,000 construction jobs at airports around the country.
FAA funding expired after midnight Friday because Republicans blocked temporary funding in an effort to overturn a new rule making union elections among rail and airline workers more democratic.
With a long-term FAA funding bill stalled, Congress could have passed temporary spending authority, as it has 20 times in the past without controversy. But like their tactics on debt ceiling negotiations, Republicans are demanding their way at any cost.
AFL-CIO President Richard Trumka called on Republicans to “stop playing ideological games” and to:
get down to the serious business of creating jobs, instead of laying off FAA aviation experts and tens of thousands of construction workers, who are already experiencing close to 20 percent unemployment rates nationally. Adding insult to injury, just as the government reaches its debt limit, this disruption of the FAA means that aviation taxes totaling up to $200 million a week - that normally fund our aviation infrastructure may instead end up in the airlines pockets.
Says AFL-CIO Transportation Trades Department (TTD) President Edward Wytkind:
Here we go again. House Republican leaders are playing political games at the expense of vital services and thousands of good jobs҅.Unfortunately in this game there are no winners. Republican leaders are holding hostage a simple funding extension of vital air safety programs, forcing furloughs on 4,000 FAA employees, jeopardizing thousands of construction jobs as airport projects are at risk and even sticking it to rural America by threatening their air service.
The FAA partial shutdown means no one is collecting the tax on airline tickets, costing the federal government $200 million a week.
It also means airport improvement construction jobs will be lost in every state and FAA aviation experts furloughed in 35 states, the District of Columbia and Puerto Rico. In Florida, for example, a total of 3,088 jobs are shut down or at risk, in Illinois its 3,286 and in Ohio itҒs 1,358.
The laid off FAA workers include engineers, scientists, research analysts, administrative assistants, computer specialists, program managers and analysts, environmental protection specialists and community planners.
Says AFSCME President Gerald McEntee:
FAA employees should not have their livelihoods jeopardized because a few politicians want to play political games. The FAA employees we represent are hardworking public servants who are committed to maintaining what is undeniably the most efficient aviation system in the world. Congress should pass a short-term extension at once and recommit themselves to passing a long-term bill that does not take away the rights of working men and women.
The union election rule in question, adopted last year by the National Mediation Board (NMB), says air and rail union elections should be decided by a majority of votes cast. Previously, each worker who did not cast a vote in an air or rail representation election was automatically counted as a “No vote. If the old rule were applied to Congress, not a single sitting member would have been elected.
LARRY COHEN, Communications Workers of America (CWA) president, says:
It’s a sad day when extremists would rather shut down the FAA and force the layoff of thousands of workers than allow airline workers to vote in a union election under the same standards used in every other American election.
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Marvel At The Beast - Part 6
We measure progress by how many people can find a job that pays the mortgage; whether you can put a little extra money away at the end of each month so you can someday watch your child receive her college diploma. We measure progress in the 23 million new jobs that were created when Bill Clinton was President when the average American family saw its income go up $7,500 instead of down $2,000 like it has under George Bush.
- Barak Obama 2008
Mr. Obamas Scare Tactics to Get Democrats to Vote for His Republican Wall Street Plan
By Michael Hudson
Naked Capitalism
July 26, 2011
You know that the debt kerfuffle is as staged as melodramatically as a World Wrestling Federation exhibition when Mr. OBAMA makes the blatantly empty threat that if Congress does not “tackle the tough challenges of entitlement and tax reform, there won’t be MONEY to pay SOCIAL SECURITY checks next month.” In his debt speech last night (July 25), he threatened that if we default, “we would not have enough money to pay all of our bills - bills that include monthly Social Security checks, veterans benefits, and the government contracts we’ve signed with thousands of businesses.”
This is not remotely true. But it has become the scare theme for over a week now, ever since the President used almost the same words in his interview with CBS Evening News anchor Scott Pelley.
Of course the government will have enough money to pay the monthly Social Security checks. The Social Security administration has its own savings in Treasury bills. I realize that lawyers (such as Mr. Obama and indeed most American presidents) rarely understand economics. But this is a legal issue. Mr. Obama certainly must know that Social Security is solvent, with liquid securities to pay for many decades to come. Yet Mr. Obama has put Social Security at the very top of his hit list!
The most reasonable explanation for his empty threat is that he is trying to panic the elderly into hoping that somehow the budget deal he seems to have up his sleeve can save them. The reality, of course, is that they are being led to economic slaughter. (And not a word of correction reminding the President of financial reality from Rubinomics Treasury Secretary Geithner, neoliberal Fed Chairman Bernanke or anyone else in the Wall Street Democrat administration, formerly known as the Democratic Leadership Council.)
It is a con. Mr. Obama has come to bury Social Security, Medicare and Medicaid, not to save them. This was clear from the outset of his administration when he appointed his Deficit Reduction Commission, headed by avowed enemies of Social Security Republican Senator Alan Simpson of Wyoming, and President Clinton’s Rubinomics chief of staff Erskine Bowles. Mr. Obamas more recent choice of Republicans and Blue Dog Democrats be delegated by Congress to rewritethe tax code on a bipartisan manner so that it cannot be challenged is a ploy to pass a tax reform that democratically elected representatives never could be expected to do.
THE DEVIL is always in the details. And Wall Street lobbyists always have such details tucked away in their briefcases to put in the hands of their favored congressmen and dedicated senators. And in this case they have the President, who has taken their advice as to whom to appoint as his cabinet to act as factotums to capture the government on their behalf and create socialism for the rich.
There is no such thing, of course. When governments are run by the rich, it is called oligarchy. Plato’s dialogues made clear that rather than viewing societies as democracies or oligarchies, it was best to view them in motion. Democracies tended to polarize economically (mainly between creditors and debtors) into oligarchies. These in turn tended to make themselves into hereditary aristocracies. In time, leading families would fight among themselves, and one group (such as Kleisthenes in Athens in 507 BC) would take the people into his party and create a democracy. And so the eternal political triangle would go on.
THIS is WHAT IS HAPPENING today. Instead of enjoying what the Progressive Era anticipated, an evolution into socialism, with government providing basic infrastructure and other needs on a subsidized basis we are seeing a lapse back into NEO-FEUDALISM. The difference, of course, is that this time around society is not controlled by military grabbers of the land. Finance today achieves what military force did in times past. Instead of being tied to the land as under feudalism, families today may live wherever they want as long as they take on a lifetime of debt to pay the mortgage on whatever home they buy.
And instead of society paying land rent and tribute to conquerors, we pay the bankers. Just as access to the land was a precondition for families to feed themselves under feudalism, one needs access to credit, to water, medical care, pensions or Social Security and other basic needs today and must pay interest, fees and monopoly rent to the NEOFEUDAL oligarchy that is now making its deft move from the United States to Ireland and Greece.
The U.S. Government has spent $13 trillion in financial bailouts since Lehman Bros. failed in September 2008. But Mr. Obama warns that thirty years from now, the Social Security fund may run a $1 trillion deficit. It is to ward it off that he urges dismantling the plans for such payments now.
It seems that the $13 trillion used up all the money the government really has. The banks and Wall Street firms have taken the money and run. There is not enough to pay for Social Security, Medicare or other social spending that the Blue Dog Democrats and Republicans now plan to cut.
Not right away. The plan will be to paper over the current crisis by delegating the plans to a Deficit Reduction Commission #2, appointed from Congressional members.
Finally, we have Change we can believe in. Real change is always surprising, after all.
The faux crisis
Usually a crisis is needed to create a vacuum into which these toxic details are fed. Wall Street does not like real crises, of course except to make quick computer-driven speculative gains on the usual fibrillation of today’s zigzagging markets. But when it comes to serious money, the illusion of a crisis is preferred, staged melodramatically to wring the greatest degree of emotion out of the audience much like a good film editor edits a montage sequence. Will the speeding train run over the girl strapped to the tracks? Will she escape in time?
The train is debt; the girl is supposed to be the American economy. But she turns out to be Wall Street in disguise. The exercise turns out to be a not-so-divine comedy. Mr. Obama offers a plan that looks very Republican. But the Republicans say no. There is an illusion of a real fight. They say Obama is socialist.
Democrats express shock at the giveaway being threatened. Many say, “Where is the real Obama?” But it seems that the real Obama turns out to be a Republican Wall Street imposter in Democratic clothing. That is what the Democratic Leadership Committee basically is: Wall Street Democrats.
This is not as much of an oxymoron as it may sound. There is a reason why todays post-Clinton Democrats are the natural party to undo what FDR and earlier Democrats stood for. A Democratic Senate never would stand for such giveaways to Wall Street and double-cross of their urban constituency if a Republican president would propose what Mr. Obama is putting before them.
Here’s what the next Republican presidential candidate can say: You know that whatever we Republicans want, Mr. Obama will support us. If you donӒt want a Republican policy, they you should vote for me for president. Because a Democratic Congress will oppose a Republican policy if we propose it. But if Mr. Obama proposes it, congress will be de-toothed, and cannot resist.
It’s the same story in Britain, where the Labour Party is called upon to finish up the job that the Conservatives start but need New Labour to subdue popular opposition to privatizing the railroads and a Public/Private Partnership financial giveaway for the London tube line. And its the same story in France, where a Socialist government is supporting the privatization program dictated by the European Central Bank.
Round up the usual fallacies
Whenever one finds government officials and the media repeating an economic error as an incessant mantra, there always is a special interest at work. The financial sector in particular seeks to wrong-foot voters into believing that the economy will be plunged into crisis of Wall Street does not get its way Җ usually by freeing it from taxes and deregulating it.
Mr. Obamas first fallacy is that the government budget is like a family budget. But families canҒt writeIOUs and have the rest of the world treat it as money. Only governments can do that. It is a privilege that the banks would now like to obtain the ability to create credit freely on their computer keyboards, and charge interest for what is almost free, and what governments can indeed create for free. (That is the State Theory of Money. See the UMKC Economics Blog.)
Now, every family knows that a little credit card debt is manageable. But if we stay on the current path, our growing debt could cost us jobs and do serious damage to the economy. But economies need government money to grow - and this money is provided by running federal budget deficits. This has been the essence of Keynesian counter-cyclical spending for more than half a century. Until the present, it was Democratic Party policy.
Its true that Pres. Clinton ran a budget surplus. The economy survived by the commercial banking system supplying the credit needed to grow Җ at interest. To force the economy back into this reliance on Wall Street rather than on government, the government needs to stop running budget deficits. The economy will then have a choice: to shrink sharply, or to turn almost all the economic surplus over to banks as economic rent on their credit-creation privilege.
Mr. Obama also pretends that credit ratings agencies are able to act as mascots for their clients, the large financial underwriters, by making the entire economy pay even higher interest rates on its credit cards and banks. For the first time in history, Mr. Obama dissembled, our country’s Triple A credit rating would be downgraded, leaving investors around the world to wonder whether the United States is still a good bet. Interest rates would skyrocket on credit cards, mortgages, and car loans, which amounts to a huge tax hike on the American people.
The reality is that running a budget surplus would increase interest rates, by forcing the economy into captivity to the banking system. The Obama administration is now deep into its Orwellian rhetorical phase.
Why Wall Street needs Obama Democrats to shepherd Rubinomics #2 through Congress
During Mr. Obama’s speech I could not help feeling that I had heard it all before. And then I remembered. Back in 2008, Treasury Secretary Henry Paulson sought to counter Sheila Bairs argument that all FDIC-insured depositors would be able to ride out the September crisis, with only the reckless gamblers losing the gains they hoped to make on their free credit. If the financial system were allowed to collapse, he warned in his Reagan Library speech, t is the American people who would pay the price. This never has been just about the banks; it has always been about continued prosperity and opportunity for all Americans.
But of course, it is all about the banks! Wall Street knows that to get sufficient Congressional votes to roll back the New Deal, Social Security, Medicare and Medicaid, a Democratic president needs to be in office. A Democratic Congress would block any Republican president trying to make the kind of cuts that Mr. Obama is sponsoring. But Congressional Democratic opposition is paralyzed when President Obama himself - the liberal president par excellence, Americas Tony Blair - acts as cheerleader for cutting back entitlements and other social spending.
So just as the City of London backed Britain’s Labour Party in taking over when the Conservative Party could not take such radical steps as privatizing the railroads and London tube system, and just as Iceland’s Social Democrats sought to plunge the economy into debt peonage to Britain and Holland, and the Greek Socialist Party is leading the fight for privatization and bank bailouts, so in the United States the Democratic Party is to deliver its constituency urban labor, especially the racial minorities and the poor who are most injured by Pres. Obama’s austerity plan to Wall Street.
So Mr. Obama is doing what any good demagogue does: delivering his constituency to his campaign contributors on Wall Street. Yves Smith has aptly called it Obama’s Nixon goes to China moment in reverse.
The Republicans help by refraining from putting forth a credible alternative presidential candidate. The effect is to give Mr. Obama room to move far to the right wing of the political spectrum. Far enough so that it is his own Democrats who are most intent on scaling back Social Security, not the Republicans.
This is done most easily under pressure of near panic. This worked after September 1008 with TARP, after all. The Wall Street bailout melodrama should be viewed as a dress rehearsal for today’s debt-ceiling non-crisis.
Michael Hudson is a research professor of Economics at University of Missouri, Kansas City and a research associate at the Levy Economics Institute of Bard College
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