Post-Peak Liberal ~~~ Life on the Downslope
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Post-Peak Liberal
The POTUS Position: Obama's State of the Union Address
"We were sent here to serve our citizens, not our own ambitions."
-- President Obama (State of the Union Address, 1/27/2010)
Pretty good speech from the President last night. I wouldn't say it struck me as too different from his previous speeches, at least in format and tone. Of course, he is a magnificent orator: smart but not overbearing, serious but playful, parental but not scolding. He tends to cast out a lot of policy buckshot in his speeches, and last night was no exception. I always get this vague feeling that every Obama address is like a fresh beginning, a series of "we need to start...."(s). And while that is a great style for campaigning, it's starting to wear thin as he gets further into his term. But that's just a minor, stylistic quibble, for now. Let's get into the speech itself.
These are my general observations on the address, from watching last night and reviewing the text this morning. There were four recurring points that Obama scattered through the whole thing. These are different than the overall ideological structure, which we'll get to later. These are just nuggets that kept popping up.
- Reprimands on Partisan Gridlock -- By my rough count, Obama lectured Congress on the evils of partisan bickering, grandstanding, and obstruction almost 20 times. While he mentioned that both parties were at fault, he clearly noted that the Republicans bear the brunt of the responsibility. He especially called them out for their supermajority shenanigans. He also reminded his own party that they still have large majorities in both houses, and that they need to man-up and get things done. I thought this trope was the strongest part of the speech. Obama came off as the serious adult in a room of embarrassed but snickering children, and the best line of the night was the one that sits at the top of this posting. The President has been relentlessly hammered from his own party for hewing to his bipartisan approach amidst the serial rebuffs of the GOP. But to his credit, Obama stuck to his guns last night, maintaining that he will not give up on building bridges to the Republican side of the aisle. Of course, when your general policies are pro-corporate and neoliberal, that makes it much easier to hold hands with your plutocratic buddies in the other party. But that's another issue. Suffice it to say, Obama came off as supremely Presidential in his scolds on hyper-partisanship.
- Reminders of Bills in Progress -- Several times, and slightly related to the reprimands mentioned above, the President reminded the people that many of the strategies he was proposing (jobs bill, climate bill, green energy investment, etc.) had already been passed by the House, but had not been acted on by the Senate, or had reached some other impasse in the legislative process. By doing this, he is informing the American people that he can only do so much as an executive -- it is the legislative branch that must actually craft the laws that implement policies. Obama has done this in the past, but he was particularly effective last night. Again, he was positioning himself as the adult in the discussion, prodding Congress to stop f'ing around and start delivering on the promises.
- Wall Street Bashing -- Many commentators were expecting, or maybe just hoping, that Obama would go whole-hog populist and ramp up the rhetoric against Wall Street, to take advantage of national sentiment. But while Obama did take some early digs, comparing the bank bailout to root canal surgery, it was not a theme that wound through the speech. Instead, he kept reminding us that the large banks are absolutely necessary for a properly-functioning economy. And while they are in need of re-regulation and reform, and need to be balanced by a robust community banking sector, they cannot just be scapegoated and destroyed to satisfy popular bloodlust. Now, depending on how cynical you are, you can see this one of two ways: it's either a mark of Obama's intellectual maturity and courage, sticking to his overall conception of the national economy; or, it's a comforting sop to the very institutions that helped bankroll his campaign. Either way, Obama did a fairly masterful job of starting off with Wall Street jibes, but then subtly weaving the banking sector back into the story as a crucial part of economic recovery.
- Tax Cuts -- Many thought that jobs jobs jobs was going to be the refrain in the State of the Union. But instead, what we got was tax cuts, tax cuts, tax cuts. I stopped keeping count after a while, but I would bet that tax cuts or tax credits were mentioned over 30 times. Again, you could see this cynically, as an absolutely necessary response to the free-floating Scott Brown-type anxiety swirling around over bailouts and government waste, or holistically, as part of his overall ideological understanding of the American economy (more on that below). Really, it's just a blending of the two. It defuses some of the populist conservative anger, and it fits in perfectly with the wonkish, neoliberal agenda.
So those were the recurring thematic nuggets that I noticed in the speech last night. But when you start looking at the ideological framework of the whole address, as well as the nitty-gritty substance of policy recommendations, things start to get murky. Stylistically and strategically, Obama's speech was brilliant, as usual. He set the right tone, communicated equally well to both the Congress and the wider American citizenry, and generally reset his short time in office within the larger context of general trends from the previous decades.
But what is the President's real understanding of the causes of and the solutions to the current recession? And what is his overall ideological picture of how labor, compensation, and economic development interact? At the very beginning of the speech, Obama makes this observation: "This recession has also compounded the burdens that America's families have been dealing with for decades -- the burden of working harder and longer for less." Now, this little gloss on declining wages appears within a larger description of other forms of economic decay, and a key indicator of Obama's view on class inequality is that he never returns to this theme that real household income and wealth have been steadily declining for decades, despite improved worker productivity.
In a previous set of posts on the Future of Work, I made the argument that this decoupling of wages from productivity, which actually began in the 1970s, is a crucial part of the massive shift of wealth away from the broader middle class to the corporate/investor elite. And as Les Leopold noted in his seminal book The Looting of America, this capture of wealth by a small elite is the main creator of the serial bubbles that the American economy has gone through in the last 20 years. It's really that simple. The American economy has been growing and growing, and workers have been improving their productivity, but the fruits of that economic success have been funneled upwards to a small number of beneficiaries. This excess capital then gets loaned back to the workers who created it, at exorbitant rates of interest, or it gets plowed into exotic and risky financial instruments that eventually unravel and collapse into dust. And of course, all along the way, huge executive salaries are sucked out of the system and whisked away to individual bank accounts (domestic and abroad), never to return.
There are other factors involved in the mass transfer of wealth from the middle and lower classes to the elite: the legal evolution of the corporation, technological unemployment and the de-skilling of labor, globalization and the offshoring of manufacturing, the hyper-sophistication of financial instruments made possible by computerization, etc. But there can be no mistaking the overall effect: inequalities in wealth and power are the most important political and social issues, for they are the root of almost every other problem with which we are dealing. Class warfare must be acknowledged, embraced, and waged. It's that simple. The more we tap dance around appalling facts like this [The top 1% of Americans control more wealth than the bottom 90%], the more we will spin our wheels.
What makes this situation even more intractable is that our mainstream politicians cannot talk about this class inequality, because one of the main features of this concentration of power is the capture of government itself by these same interests. With our winner-take-all electoral structure and loose campaign finance laws (made looser last week by the ridiculous Supreme Court decision on corporate funding of ads), the elite corporate and investor classes have literally become our government. It's not that the "special interests" have too much control over our government. They are our government. The Congress and the Executive branch are entirely made up of corporate lawyers and businesspeople, mostly rich ones. They fund each others' elections, then gerrymander the districts to ensure universal incumbent reelection. They come from and return to the lobbyshops and corporate boardrooms, writing each others' legislation and funding each others' pet projects. And on and on.
In short, it's very difficult for any national politician to long preserve the image of a true outsider, since by the time they get to the national stage, they have already been vetted, funded, and trained by the prevailing elite that controls the entire electoral process in the first place. This is why we only get pro-business, neoliberal, pro-growth politicians. All other dissenting points of view are weeded out at the beginning, starved for funds and necessary corporate media coverage.
From this perspective, one can see how ultimately anemic Obama's overall approach to the economy is. When he turned to the discussion of jobs and how to create them, we were right back into the eternal laundry list of policy approaches: a jobs bill (not much substance on what exactly is in this jobs bill), $30 billion for small banks to loan to small businesses, a green energy bill, a climate bill, new plants and equipment investment, financial regulation, funding for science research and innovation, an export initiative, trade bills, school loan reform, mortgage refinancing, and of course, health care reform.
Now, even though the general response to the speech has been positive, I find myself throwing my hat in with conservatives when I see yet another smorgasbord of programs like the ones mentioned above. I understand their perspective that this model puts too much of the economy's success into the hands of centralized bureaucracies. It just sounds like more spending on more stuff, even despite Obama's pledge to cut taxes and freeze discretionary government spending for three years (who thinks that's actually going to happen?). The guy is smart, to be sure, but his speeches tend towards a wonkish posturing, a rattling off of big ideas that will likely never materialize into improved conditions on the ground. No matter how lofty the intentions, top-down programs run by a centralized corporate elite are not likely to accrue many benefits to the regular guy on the street.
Behind all of these programs, I believe, is a flawed model of what our civilization could and should be. It is the conventional view of most of the political and corporate elite, to be sure, but that doesn't make it any less deficient. Basically the stance is that economic growth is good; it is government's job to foster economic growth on the macro-level, and allow individuals and families to reap the rewards on the micro-level. The government should thus help all businesses grow, by creating incentives towards investment in human and physical capital. Government is also responsible for maintaining an overall atmosphere of fairness and accountability in the markets, by providing regulation and oversight to prevent big players from abusing citizens. Other supporting frameworks for economic growth that are maintained by the government are education and national security.
This whole ideological system is so commonplace now amongst our political and media elite, that it's hard to see how ultimately empty it is. The country is essentially viewed as one large, harmonious machine for churning out economic growth. Education makes better workers, better workers make more money, more money means more investment, more investment means more jobs, more job mean more stuff, more stuff means happier people, happier people do whatever happy people do. At no point do truly important and interesting things come into play for consideration, and the controlling metaphors are never challenged. For example, endless economic growth inside a finite natural system is a tragic absurdity, and the unraveling of every major natural system on the planet is ample evidence of that madness. Or, how about the growing evidence that the One Person-One Job/One Family-One Dwelling social form is profoundly unsatisfying psychologically, resulting in epidemic levels of depression, anxiety, obesity, domestic violence, and drug addiction? Or the continued systematic disenfranchisement of African Americans, especially men, administered by a bogus drug enforcement policy that hides economic superfluity under the guise of criminality, giving us the largest prison population in the world?
In essence, the evidence is mounting that there will be no return to our old way of life, with full employment and maximum consumption and college for all. The lesson of the recession should be that too much of our prior economic activity was devoted to just keeping the system itself going. People served at the whim of the economy, not the other way around. We overworked and overspent, much of it just to distract ourselves from how dehumanized our social and natural environments had become.
Business interests are not the same as human interests. We are not part of a massive, harmonious machine where profit and work and economic growth all fit together in a neat little package. Freedom does not equal more stuff to choose from, and more stuff does not bring us fulfillment.
OK, I've already rambled on way too long, so I'll close with some great words from Michael Lind, in the latest issues of The Baffler.
But in the late twentieth century, the language of the corporate boardroom and the consulting firm replaced the language of Lockean republicanism. The individual was a firm, and the child was a start-up. Teachers were venture capitalists tasked with the mission of how best to invest "human capital" in a classroom full of fledgling enterprises competing with billions of other human firms in the new, borderless global marketplace.
Never mind that in reality, four-fifths of the U.S. workforce toils in the domestic service sector, engaged in activities that can only be performed in the United States and are immune to foreign competition. Never mind that, according to the Bureau of Labor Statistics, most of the jobs to be created within our borders require only a high school education plus brief on-the-job training. To continue in the vein of our age's overmastering marketing rhetoric, policymakers regard such data as lagging indicators. In the financialized discourse of post-Cold War America, the human capitalist has supplanted the citizen, to be equipped with tools by the investor-state and then sent out to flourish of fail in competition with legions of unseen rivals in the new global economy.... We have witnessed the financialization not only of the American economy but also of the American mind.
Michael Lind, "The O-Word" (The Baffler, Vol 2, No 1)
As great an orator as Obama is, we should recognize that he is but the most eloquent advocate of this worldview. I believe the strands of this social form are coming apart, and our paramount task as a nation is to either create something completely new or suffer the protracted buffeting of entropic collapse.
What if There is No "Recovery"?
This is the text of a rejected Op-Ed I sent into the Boston Globe, so it's a little less in-depth than usual. But I didn't want to let it go to waste.
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“When there’s trouble in Massachusetts, there’s trouble everywhere!” With these words from his victory address last week, the improbable Senator-elect Scott Brown may have augured a far broader state of affairs than he intended. He was, of course, speaking of impending woes for Democrats, big-government types, and aloof political elitists. But Brown’s election is likely a sign of an inevitable series of events that will force Americans to come to grips with a single terrifying question: What if there is no recovery?
Sometimes, despite the usual cliches about the rapid turnaround of the Washington news cycle, the long-term political future clicks into focus like the background of a Dutch landscape. The conventional wisdom, which seems accurate in this case, is that the Massachusetts outcome is a bad omen for Democrats in the midterms this fall. The GOP will certainly pick up seats, although retaining minority status. Then in 2014, there will probably be a massive reversal of power, with the Republicans taking both houses of Congress as well as the Presidency, sweeping the Obama hope-topia into the dustbin.
We can grant credence to this long prediction due to the political corner into which we have been painted by our two mainstream parties. Above all, the Democratic and Republican machines are designed to perform three interlocking functions: win elections, gather money to win those elections, and serve those funders via beneficial legislation. When conditions on the ground demand solutions that fall outside of these limited functions, our two parties struggle. They resort to the same tired narratives that have proven valuable in campaigns past, but are ill-suited to fixing the multiplicitous waves of decline that are lapping at our shores. Over the next few election cycles, we can thus expect a kind of musical chair politics, where the greatest electoral advantage will be the ability to run as outsider. Paradoxically, to actually be in power will be the wrong place to be, as Obama is finding out right now.
During these pendulous times, each major party will flail around for more creative ways to dress up their stock platforms. So we will hear more of the neo-trickle-down shtick that Scott Brown used to such effectiveness: ‘Taxes are bad! Tax cuts are good! Give us our money back! Unleash the entrepreneurial power of America!’ All very seductive claims, to be sure, but ultimately much too simple to address the macro-trends in globalization, wealth concentration, and technological unemployment that have completely changed the ratios of work and reward. On the Democratic side, there will be more calls for stimulus packages, better financial regulation, green job programs, etc. Again, much of this looks good on paper, but as conditions deteriorate and the tax-base for such endeavors enters permanent decline, the fiscal mechanisms for such projects disappear.
Ultimately, all of this inertia comes from a misunderstanding of the current recession. Liberals and conservatives both see our predicament as an anomaly caused by the housing bubble. Each see different demons in this bubble formation (do-gooder government interference in the market on one side, or greedy financial speculation on the other), but almost all commentators see recovery as possible, once all of the bad mojo is worked out of system.
But what if this is a misreading of our situation? What if the housing bubble was just the latest in a series of speculative misadventures made absolutely unavoidable by an overall structure that funnels the vast majority of the nation’s economic output to a very small financial/corporate elite? In this long view, American economic growth and productivity have been steadily surging for decades, but became uncoupled from worker compensation in the mid-1970s. Regular people have thus been working more and better, but getting less, with the resulting surplus being captured by the investor classes. All of that extra capital had to go somewhere, so it was shunted to serial financial instruments that promised outlandish returns. Of course, these instruments and their subsequent bubbles proved volatile and unsustainable, to say the least. It is a mistake to think that all of the myriad jobs that grew up around these bubbles will somehow come back, now that the hyper-speculative conditions that gave rise to them are gone.
The reality that will have to be acknowledged, before any type of recovery is possible, is that the fundamental relationships between labor, compensation, and economic growth have been inexorably altered. Labor input, in conditions of global competition and relentless technological de-skilling, is just not that valuable any more, in an overall sense. Certainly, there will continue to be many valuable jobs in America -- well-paid, skilled, and secure. But true full-employment, where anyone willing to work hard can get ahead and support a family, will recede as a realistic possibility, no matter how many job summits or small-business tax cuts we throw down.
How will America react to these new conditions? It's hard to say. As healthy men and women continue to get tossed out of work and home, and are unable to find new arrangements, the desperation, anxiety, and rage will build. As the major parties swap the unenviable positions of leadership, the finger-pointing and scapegoating will intensify, as their plutocratic, election-crafted narratives fade into disutility. This is unfortunately a recipe for either totalitarianism or unfettered empire-building. Excess popular energy will have to go somewhere, and the main pathways are internal persecution of undesirables or elimination of external evildoers. People will turn to strength, which in times of trouble tends towards hubris and cruelty.
A different, less-horrifying path would confront head-on the changing relationships of work, consumption, economic health, and individual reward. Our leaders should acknowledge that the full-employment world is behind us, but also that this is a development which opens up expansive new opportunities for cooperative endeavors of all kinds: in housing, business ownership, local government, and regional planning. Federal and state policies should be recrafted to create new tax and legal frameworks for pushing resources away from centralized planning towards autonomy at the smallest levels possible. In a very short time, it will become obvious that the individual and the family are simply not adequate home bases from which people can approach the wider spheres of government, economy, and environment. The creation of new collective social forms will prove to be the next great American project. But this will require a new kind of leadership from above and a cultural change from below.
What Can Brown Do For (To) You: A Massachusetts Postmortem
"When there's trouble in Massachusetts, there's trouble everywhere -- and now they know it."
-- Scott Brown (Victory Speech from 1/19/10)
There has been much weeping and gnashing of teeth across the great Commonwealth of Massachusetts this week, as well as a lot of proud conservative swagger. Both are well-earned or well-deserved, depending on your perspective. The amount of national ink spilled over the recent special Senatorial election, in which Republican Scott Brown upset Democratic dauphine Martha Coakley, has also been prodigious. Only hindsight will tell us whether or not this remarkable event was a historic bellweather for epic political change, or simply a one-time confluence of unique factors.
Last time, I outlined what I think will happen in the next couple election cycles: significant gains this fall for the GOP, but probably not majorities; then larger victories in 2012, resulting in Obama's ouster and recovered Republican majorities in both houses of Congress. After that, the "Musical Chair Politics" effect will kick in again, and the sitting party will get their clocks cleaned in 2014 and beyond. As I outlined last time, we're really into a situation where the last thing you want to be as a politician, come election season, is actually in power. It's going to continue to be the advantage of the adversary, as conditions deteriorate in the Long Emergency. SInce both of the main parties are completely owned by corporate interests (no, that's not quite right -- the major parties are actually made up of corporate interests: it's the exact same people), neither of them have any type of true, substantive policy agenda that could turn things around for the country. So I think we'll see a lot of pendulous action in the next few elections, where each side will be content to hone their outsider shtick to perfection, loudly shouting that the other side is messing things up because they're in bed with the "special interests" (just a reminder that a corporation that gives you money is part of the "Business Community," while one that gives cash to your opponent is a "Special Interest"). So the short attention span American public will continue to throw the bums out every couple years, and the other bums will fill the void until it's their turn to get slapped down. Not a pretty picture, and national collapse may preclude this neat unfolding anyway. But you get the idea.
In any case, enough of that. Let's get on to the Brown-Coakley race, and what it means for Massachusetts, America, health care reform --all that stuff. I won't belabor these things for very long, since plenty of other folks have jumped into the fray with their opinions and interpretations. We'll just look at a couple nuggets, and use them to jump off onto tangents and bigger questions, per usual.
THE CANDIDATES
- Martha Coakley was not really the most exciting politician to come down the pike, and I don't really know why she was the anointed frontrunner in the first place. But she certainly wasn't horrible. I've seen worse. And she does come across as a fairly competent Attorney General, with a moderately impressive record in standing up to big insurance corporations and corrupt contractors from the Big Dig. The Big Dig angle is fairly significant too, since this bloated behemoth of waste and fraud is really the poster-child for Bay State cronyism. She could and should have made major hay with these portfolio pieces (more below), but evidently didn't. In any case, those people, especially at the national level, who are blaming the candidate for everything are certainly overstating. She wasn't an awesome presence, but in the indigoest of indigo states, she shouldn't need to be.
- Similarly, those who are painting Scott Brown as the next Ronald Reagan are a little too close to an open glue tube. This is a good lookin' guy, certainly, with an attractive family and a pleasant overall demeanor (who would have figured that Mitt Romney would only be the second best-looking dude to hold high office in Massachusetts in the past decade?). And he does stay fairly on point, except when he's pimping out his own daughters on national TV. But for God's sake, the guy is one of only five sitting Republican state senators in Massachusetts (out of 40 seats), leaving him with a resume thinner than Bernie Madoff's stack of holiday thank-you cards. But to be fair, Brown's got other non-legislative credentials (National Guard, part of the JAG), and we can't poo-poo those patriotic achievements. But he was running to be one of the most powerful 100 people in the country, and his campaign website (www.brownforussenate.com) is embarrassingly scant in details on policy and credentials. But to be fair, he does drive a truck, I assume to transport voluminous amounts of legislation back and forth from the State House to his modest home each evening. So there's that.
THE CAMPAIGN
- It should be fairly clear from my remarks above that I don't think the candidates had too much to do with the ultimate outcome of the race this week. Coakley was blah, but her actual achievements should have far outweighed the thin resume of Mr. Brown -- in normal circumstances. This is Massachusetts, after all, and we're not just liberal-leaning -- we're a fairly brainy bunch, no matter what our political tendencies. There are a lot of independents in the Bay State, just as there are everywhere nowadays. But even if they were pissed at the national picture, independents would not normally choose a nobody over an accomplished statewide office-holder like Coakley. But these were obviously not normal times, as we'll see below.
- But the conventional wisdom that has emerged is that Coakley ran a stupendously bad campaign, and that's why Brown won. There is, of course, ample evidence for this. She was slow out of the gate. She didn't do enough banner-buys on heavily trafficked websites. She went on vacation. She came off as elitist with some gaffes about Curt Schilling and the Yankees, and standing in front of Fenway Park in the cold (Jon Stewart even zinged her for that one). So sure, you could write this off to bad campaigning, I guess. But to my mind, if this was really so significant, it would be more of an indictment of voter stupidity and gullibility than it would be of bad campaigning. After all, what so many are clamoring for now is competence in government. Much of the country really has moved beyond the typical campaign gotchas and snark-attacks (albeit, probably and unfortunately only temporarily). I think there's revisionism in this blasting of Coakley's campaign, more smoke than fire.
- Brown, for his part, ran a good campaign. But again, the breathless adulation of his electoral brilliance is just more revisionism. He just didn't make any major mistakes, which is fairly easy when you aren't currently associated with the party that is presiding over the implosion of the American Way of Life. Americans have short attention spans, so it's easy to run a conservative boilerplate campaign, spouting the usual pablum about lower taxes and the evils of Big Gub'mint. You have the luxury of knowing that the people will have long forgotten that it was these very policies that exacerbated all of our woes for the last few years (but to be fair, I do not blame Dubya for everything -- regular readers of this blog know that I trace our present state of affairs back a long way, winding through leaders from both left and right).
- One interesting note is that Coakley's ideal campaign would have been very tricky to pull off. She could have run as an outsider Democrat. She could have said that she was not going to just be a rubber stamp for Obama's agenda, but would instead stand against the fat cat corporations who are looting America. She could have highlighted her history of fighting big business corruption, and vowed to take that battle to her led-astray colleagues in the Senate. Of course, this would all have been tongue-in-cheek, with a knowing nod to Harry Reid and Obama on the side. But even though it would have been substantially dishonest, it likely would have defused Brown's outsider shtick and delivered a solid Coakley victory. The hard part would have been the primary, where she could not have gone too far in bashing the present Democratic powers without falling victim to her significant challengers. It's worth remembering that Coakley really blew her financial wad in the primary, and had meager resources with which to start the race against Brown. It would have been extremely difficult to run as an uber-Dem to win the primary, and then transform into an outsider for the general. But it would have worked, in my opinion.
THE STATE
- This level really deserves more attention than it's getting from the mainstream media. I guess it really can't be otherwise. I mean, how many people in Osh Kosh really care about what some nimrod in Peabody says about the wicked hack douchebags in the State House? But this really was a significant part of the electoral puzzle. If you look at the town-by-town map, you can see the Coakley supporters clustered in cities and the typical liberal enclaves of the Berkshires and the end of Cape Cod. Most of the towns (and thus the state) were for Brown. Non-Bostonians in Massachusetts are sick of what they see as rampant one-party arrogance and corruption. Our last couple House Speakers are under indictment. There was the 16-year epic debacle of the Big Dig, the largest highway and graft project in US history, so far over-budget that it will not be paid off until 2038. There's the saga of the Bulger brothers and their intimate enmeshment with law enforcement, state government, and brutal street crime. On and on.
- Massachusetts, in essence, is almost too blue. Now, I don't mean that people are too liberal. I like "liberals," in the older sense of the word: generous, giving, broadminded, unafraid of change. What I mean is that there is no systemic outlet for non-liberal views. The Democrats have had such a stranglehold on state politics for so long that massive reservoirs of resentment have built up. Monopolies are not good, in politics or business. One-party rule has resulted in too much corruption, nepotism, cronyism, insiderism -- the works. Disgruntled conservatives and independents dine on the endless streams of ressentiment porn served up by the Boston Herald and Fox 25 (the local Boston Fox affiliate). "How did this city worker get a $300 thousand a year job, and then only show up for work three days out of every month? Find out, as we confront this hack SOB in his driveway at 6AM! Next, on FOX."
- You get the idea. I think the people of Massachusetts were sending a message, to be sure. But as much as it was a message to the national Democrats, it was equally a shot across the bow of state Dems, including Governor Deval Patrick. The state has become a kind of symbol for the corruption of one-party rule, in need of dressing down.
THE NATION
- Finally, we get to the national scene, and I'll spend less time here, partly because there is a lot of quality stuff out there already, better than I can give. But also, I won't dwell here because I'm not totally freaked-out and panicked about the whole thing. Yah, Massachusetts elected a Republican Senator. Get over it. The world will go on. The time to panic is not now -- it was two years ago, five years ago, ten years ago. In reality, we should have been in slow-motion panic (wait, is that possible?) since the dire warnings of Dwight Eisenhower about the military-industrial complex in 1961, or the "Malaise Speech" of Jimmy Carter in 1979. In general, we have to pull ourselves away from this up-and-down obsession with the electoral horserace, where we are alternately panicked or oblivious, depending on whether it's the right time of year.
- Sure, Scott Brown's victory can be seen as the proverbial shot across the bow of the national Democratic Party and the President. But remember, Brown is only in for two years, and he will likely face a much stronger challenger next time around. And in the meantime, hello -- the Dems still have a substantial majority in both houses of Congress. The idea that 41 Republican Senators spell a death-knell for all-things liberal and good is preposterous, and shows just how pussy-ish the Dems have become.
- And then, let's remember the whole Musical Chair Politics metaphor. For the next few cycles, whoever happens to hold power when the electoral music stops is going to get pounded. Why? Because the long-term macrotrends that are unraveling our national economy and civilization are not going to be altered by another stimulus package, or a sweeping round of tax cuts, or by health care reform, or by the heroics of a John Galt entrepreneurial class. The Long Emergency is going to continue its glacial creep downwards, and our two plutocratic national parties are going to get scraped along and ground to dust in its inevitable march. We should be adjusting to these these macro-trends and creating the new social forms necessary to survive in a much different world, not worrying about the ascent of a hunky, truck-driving Senator.
Musical Chair Politics
"Politics is the shadow cast on society by big business."
-- John Dewey
Some polls have Coakley way ahead, some have the race in a dead heat. Who knows where the actual numbers sit? But the early spin from the GOP camp is that win or lose, the Republicans have already won in principle, making a horse race out of a contest in the bluest of all blue states. Now, if the race finishes up close, the Republicans really are correct in their assessment, and the omen for the mid-terms this fall is obvious. Barring a miraculous economic recovery, the Dems are in for a shellacking. I don't know the actual numbers of how many seats are expected to be hotly contested in the Senate this time around, and I've heard that the Dems will likely preserve majorities in both houses, albeit smaller ones. It's too early to really worry about that stuff, and it probably doesn't matter much in the long anyway.
Why? Because we're basically into an almost intractable political situation in the US, where the biggest liability in the years ahead will be to actually be in power at the time of any given election. It will be much easier, as economic and ecological conditions continue their entropic unraveling, to rail against the ruling party than to actually propose something constructive and helpful. And maybe the best thing of all, party-politics speaking, would be for Presidential and Congressional power to be split, so that each camp can blame national deterioration on good ol' gridlock. Think about it: who would actually want to be in control of the national situation right now, especially with an American attention span that can only process a few months of 'history' at a time, at best?
I envision a pretty successful mid-term season for the GOP this fall -- not majorities, but healthy gains certainly. Then, I would expect Obama to be a one-term President (again, excepting some enormous economic turnaround in the next year and a half), with Republicans taking back the White House and possibly the whole Congress (at least one half, I would say). But then, since the Republicans have no actual plans that will right the ship of state, despite their caterwauling about fiscal discipline and small government, they will cock things up again, and be in line for their own comeuppance in 2014. At which point the cycle begins again. Except that we likely won't make it that far with business as usual. More probably, there will be some major systemic breakdowns at the most basic levels of society and economy, and we will have either succumbed to more draconian, totalitarian leadership, or, hopefully, will have pulled the energy out of the whole top-down corrupt plutocracy from below by creating more sustainable social forms.
But back to the musical chairs analogy. How did we get to the point where it may be more advantageous, for electoral reasons, to be out of power than in? To understand this strange state of affairs, it may be helpful to return to the subject of two of the earliest posts on this blog site: The Conservative Story and The Liberal Story. In these posts, I outlined what I believe to be the rough contours of the main narratives that conservatives and liberals use to understand the world. For political operatives and wonks, ideas and sound-bites and polls are all-important. But for regular people on the street, what really matters are the stories in their heads about why things are the way they are. Humans are story-telling animals, and narrative structures are how we remember, categorize, and prioritize experience. The Culture Wars of the last few decades are thus really not about ideologies, but about the stories we tell ourselves.
The dominant feature in both the conservative and liberal narratives is theodicy. In theological terms, theodicy is the question of evil. Why do bad things happen to good people? Who or what is the devil? How do people overcome evil?, etc. But in the political realm, I think that our conservative and liberal theodicies are designed to explain the American Fall: that is, how did we go from the triumphant, muscular, dominant player in the world after WW2, to the debt-ridden, flabby, China-dependent, oil-dependent, culturally-debased crapscape we have now? Both mainline parties have to explain this general perception of American decline, not because it is the most obviously-important question or the most accurate framework for understanding reality (indeed it isn't, in my opinion). But accounting for America's fall from grace is necessary for two reasons: to address the general American mood of national pessimism, and to win elections in a winner-take-all electoral structure.
I encourage you to go back and read my full accounts of the Conservative and Liberal Stories (links above), but here are the quick versions. Conservatives see American decline as the result of liberal ungratefulness for, and rebellion against, the bedrock institutions that created our superiority in the first place: God, family, and country, not necessarily in that order. Like a spoiled teenager, we have mocked and abandoned these vital conservative institutions, instead embracing the reckless destruction of sexual license, cultural obscenity, and vocational laziness. In the conservative story, the virtues of civilization don't just happen; they must be guarded, cultivated, preserved, and vigorously defended. Without this jealous and diligent defense, our country has gone down the slippery slope of relativism, secularism, and blasphemy.
In the liberal story, the triumphs of WW2 were followed up by the full flowering of the incipient American ideals of freedom and justice. Blacks, women, and gays all made heroic strides in the 60s and 70s, winning rights that had for centuries been squashed by oppression and marginalization. These movements were not ungrateful and pointless rebellion, but rather fulfillments of the greatest values inherent in the founding of the country. All are created equal. Unfortunately, this project of equality and justice, which may have eventually made its way to economic rights for all, was derailed by a conservative backlash. Regressives of all types came out of the woodwork, to defend the ingrained privileges of race, gender, and religion. The Old Boy network and the entrenched white power structure could not abide the emerging autonomy of the masses, so they repackaged their bigotry and sexism as a battle over religious and cultural morality. Wedge issues like abortion and gay marriage were thus ginned up as acceptable proxies for more nefarious motives, operating as maximum mobilizers of electoral energy.
Ah, elections. This brings us to the other part of our major political narratives, and why they're not very good at explaining reality. In the paragraphs above, we looked at the general theodicies of conservatism and liberalism. Both have elements of truth, and both are, in some way, crafted to address the free-floating anxiety of an American public that senses long-term decline. But as a genuine picture of what has caused the major socioeconomic shifts of the last few decades, neither story even comes close to be satisfactory. Where is the ecological component, the understanding of how global economic and population pressures are squashing every major natural system on the planet? Where is an objective account of technology and its long-term impacts on the ratios of work-hours to salaries to macro-economic health? Is there any type of attempt to explain the general emergence of massive imbalances in power and wealth, both between countries and within many advanced countries like the US? Where is the recognition that consumerism is the prime mover in what many, both liberal and conservative, perceive as the dumbing-down and increased violence of our culture? Where is an account of how race relations are intricately tied up with the steadily-ballooning prison population and cycles of poverty? Rural blight and the collapse of family farming?
You get the idea. In area after area, our main political stories have nothing to say about the real levers of change, and how we might cooperatively attack the challenges of the present and future. Instead, we're subjected to morality plays, scapegoating, blame games, and oversimplifications of the stupidest sort. We're told that Democrats are evil socialists who want to destroy religion and set up a world government. Republicans are all knuckle-dragging gay bashers, hypocritically concerned with fetuses more than actual, full-fledged people. Voting records and omnibus spending bills are data-mined for endless attack ads about how Joe Blow wants to rape my babies or burn the elderly for winter heat.
Why all this crap? Because our political narratives are built for just one thing: winning elections. They are not there to uncover the truth, or advance the condition of the country, or pursue any kind of sustainable civilization. Like all aspects of business, the political outlook is short-term. Will it help me return a profit in the next quarter? Will it win the next election? And as the American electoral landscape has evolved over the last few decades, the business of winning elections has essentially become the entire political process itself. The actual legislative, executive, and judicial guts of the system have been completely given over to plutocratic interests, leaving nothing but the horserace crap for us regular citizens to sup on.
Really, nothing will change this political inertia in the near future. There are no "reforms" or "regulations" that can reverse the capture of government by big business. The only things that could even come close to turning around this charade of representative government are not likely to be implemented by those who would be ousted by the same innovations: proportional representation, public funding of elections, hard campaign spending caps, instant runoff voting, etc.
So prepare yourselves for some bumpy rides in the next couple election cycles. But don't despair, because in the new situation of musical chair politics, set within the downslope of the Long Emergency, today's crushing defeats are just preludes to the next cycle's inevitable reversals. As these spectacles continue to unfold, their ultimate ridiculousness will emerge eventually. Here's hoping that we will have turned our attention to more substantial, bottom-up arenas of potential social change in the meantime, rendering all this mainstream political posturing superfluous.
Hopecast for a PostPeak Decade
Well, the Naughts (or Oughts, or Empties) are over, and we thus prepare for a new decade. Last time, we did a kind of selective review of the last decade, which at bottom proved to be period of profound self-delusion, cultural illusion, and massive sociopolitical inertia, as serial waves of collapse lapped against the shores of our civilization.
What might the decade ahead hold for us? Rather than do straight-up forecasting, or a wish list of things I hope to happen, let's put together a kind of quasi-utopian fusion of the two: what can we expect to happen in the best of all possible scenarios? We'll try to create a amalgam of things that are likely to happen, and positive things we can do to make them happen. We can call it a "Hopecast,", for lack of a better term (or actually for lack of my brain-power this morning -- depths of winter here in New England, where everything is cold and stark and bereft of moisture).
- Collapse of Centralization: As the great Jim Kunstler is constantly reminding us, huge centralized bureaucracies of any kind, public or private, require a lot of physical and other kinds of energy to hold together. Large-scale enterprises that try to push human behavior away from natural tendencies must be continually coerced in some way or another, and coercion requires energy. Entropy, devolution, and creative destruction from below are continually eating away at all projects that concentrate power. We're seeing this now, as the Obama administration and Congressional Democrats shovel trillions of dollars into various failing, centralized systems: the War on Terror, the finance-industry plutocracy, business-friendly health care "reform," etc. In many respects, the instincts of the Tea Partiers are right on; they are correct in their distrust of huge, sprawling, federal spending, and the future indebtedness of their progeny. These top-down megaplans will all sputter, totter, and likely fail, due to the changing conditions of oil availability, the erosion of the planet's natural systems, and the declining value of labor (see my 3-part series on The Future of Work). Of course, the huge patch of willful blindness in the neo-grassroots conservative worldview includes: the culpability of their own GOP heroes in the ballooning of government; the unjustified pass given to a $1 trillion-a-year military establishment, which is somehow magically exempt from government inefficiency; and the utterly bogus idea that the "private" sphere of business is somehow different from the "public" sphere of the federal government (check the conditions on the ground, my conservative friends -- Big Guvmint and Big Business are the same dudes!). The awful truth of the last four decades is that power and wealth have become unsustainably concentrated into the hands of a very small elite. And rather than "share the wealth" (God forbid!), this cohort will hang onto their privileged position until the end, with the result that the supporting structures underneath their rise (mass consumption, political apathy, externalized environmental damage) will just dissolve, and the whole rotting mess will unravel.
- The Rise of Localism: This will be both a necessity and an opportunity. With the hollowing out and bankruptcy of centralized power systems, there will be a massive turn to our immediate physical and economic environments, and we'll need to rehabilitate them with gusto. Right now, we're seeing a designer precursor of localism. Well-to-do liberals and other progressive activist types have been pushing the Buy Local, Think Global thing for a while. And certainly, we can see the quickening pace of local produce and organic food production. Farmers Markets and Community Supported Agriculture are expanding at a rapid clip, which is a good thing. But when we look at the localization that will be necessary after the collapse of federal and state budgets, we're really talking about exponentially more radical change, especially when we throw in the massive shifts that will happen when Peak Oil gains more traction (global supply lines will shrink, personal motoring will prove problematic, air transport will be transformed to an elite activity, etc.). We're talking about major restructuring in how we arrange our living quarters, our labor patterns (more below), and the physical landscape itself. This will necessitate wholesale changes in land ownership laws, collective finance policies, zoning standards, infrastructure maintenance, etc. We should be looking at how to create multi-use, collective, self-reliant localities. As the financial resources of federal and state bureaucracies dry up, these upper levels of government should be going with the localizing flow, not fighting it. That means rewriting laws to make it easier and more rewarding for people to organize financially and physically on the local scale. Any policies that encourage hoarding of property and capital should be scrapped, and the legal standing of corporations should be drastically curtailed. I know this sounds pie-in-the-sky right now, but I think conditions will make these adjustments viable more quickly than one might imagine.
- Work: The December '09 jobs report was not good. After a small positive blip in November, the nation shed 85,000 more jobs in December, leaving the base unemployment rate at 10% and the full un-underemployed stat at 17.3% (and that's actually a lowball number, in my opinion, especially when we include the burgeoning prison population). Most economists see a continuing erosion in the months ahead, with the base rate approaching 10.8% by October. Everyone is holding their breath for a "turnaround," but I don't think it's coming. Like the recession in general, we're not seeing just a temporary setback in employment ratios, which will reverse itself once economic growth gets going again. What the serial economic bubbles (tech stock, real estate, credit card debt, health care) really mean is that we've been artificially propping up huge swaths of the economy with fake balance sheets, shady accounting, unsustainable financial instruments, and reckless lending and borrowing. The jobs spun out of these bubbles are thus not stable, permanent positions. And the overall collapse in leveraged lending means that these bubble jobs will not come back. Companies are going to continue to run leaner and meaner, utilizing less full-time labor and plowing more cash into labor-saving technological investments, which will exacerbate the jobs picture further. In the long view, we have simply de-skilled too much of the labor market to expect anything approaching the kind of purchasing power that we enjoyed in the bubble decades. We are no longer a nation that knows how to grow its own food, make and repair its own tools, and create and sustain its physical architectures and infrastructures. Oh sure, these things get done; food is grown here, and stuff is made here, roads get paved, and buildings get built. But large proportions of the population are not involved in these functions any more. The post-war shift to a service industry economy of "symbolic analysts" has really put much of our populace at risk of superfluity, and we're reaping the whirlwind now. I would not expect "full employment" to return any time soon, if ever.
- Bringing Functions in House: For a culture that places so much of its individuals' self-worth and identity on career, it is difficult to see the great opportunity present in the unraveling ratios of full employment. But as we encounter more long-term unemployment (the average jobless stretch now sits at 29 weeks, the longest since data started being collected in 1948), there is going to be an enormous pool of talent and time, millions people who will be ready, willing, and able to do countless tasks outside of the market economy that has jettisoned them. As the formalized, monetized economy continues to deliver products and services with less and less compensated labor, we should look to "re-laborize" as many of those functions as possible through de-monetized alternatives. This is similar to "import substitution" in global macroeconomics . Countries can certainly gain from international trade, but an overdependence on outside entities for everything leads to vulnerability. Self-reliance should thus be sought in some spheres. Similarly, if families and communities have to purchase all of their needs through the marketplace, they are overly vulnerable to downturns and recessions, as we are seeing. The freed-up labor from long-term unemployment can thus be seen as a giant opportunity to increase non-monetized self-reliance. There's just one problem: the current social form (One Person-One Job/One Family-One Dwelling) is not adequate to the task of de-formalizing economic functions. So we need another shift, which is....
- New Forms of Collective Living: I know, I'm banging the same old drum here. But what can I say? Repetition is one of my main weaknesses -- maybe it's good for the soul. In any case, I really am convinced that the long-term trends in employment ratios, environmental degradation, and cultural collapse point to the absolute necessity of creating a new form of collective living. As a reminder of my general outlook, I view human nature through a long lens. We are the product of millions of years of human, proto-human, and mammal evolution. Those processes have shaped and molded us to thrive in certain types of social and ecological conditions, what biologists call EEA (Environment of Evolutionary Adaptedness). As social primates, we require very specific settings for full development: intense, tribal groupings of 80 to 150 people or so, in intimate contact with natural surroundings. In the long view, the last 10,000 years of written history are just a blip; they cannot change the underlying needs of an organism that has been millions of years in the making. We need contact with many intimates, both human and natural, to fully mature -- and the current arrangements do not deliver. We overconsume, overindulge, drug ourselves, distract ourselves, transport ourselves to fantasy worlds -- all to fill the void opened up by having profoundly dehumanized social forms. As the great Paul Shepard noted, our recent social forms have cut us off from normal human ontogeny, resulting in a society of sick individuals. We need intense, close relationships with people, animals, trees, rocks, and rivers. Without these, we do not properly differentiate between internal and external, between self and Other, especially in the crucial adolescent period. We become, therefore, a narcissistic culture of grasping children, recreating juvenile patterns of hyper-competition and hyper-indulgence. Taking a step back from our "normal" lives, it is not hard to see how profoundly lonely and unsatisfying our current social forms are. We simply do not have enough intense interaction with other people or the natural world, and much of our consumer capitalist economy is predicated on churning out marginally-satisfying substitutes for these empty places.
- The Cooperative Weapon: In the years ahead, I think it will become increasingly clear that social and economic tinkering will not do the trick. There's this kind of pathological inertia right now in mainstream political discourse, a desperate desire to believe that, at some point, all of our old mechanisms will kick out their slumber and start delivering money and success and growth again. All we need to do is weather the storm, clean up some of the excesses and inefficiencies, and the great deity of the American Economy will unstick its giant treads from the frozen ground of recession and start churning along, finally carrying us back to the hallowed ground of vigorous consumption. I just don't think this is going to happen. What we are going to need is a different kind of home base for people, something radically different than the current American Algorithm, which will die a slow, painful, bewildering death. Now don't get me wrong, there are a lot of good causes and trends out there that are worth pursuing, and I'm sure a lot of them will be crucial parts of a successful American future: green jobs, sustainable energy, campaign finance reform, a redefined legal standing for the corporation, local manufacturing, etc. But I don't believe any of these things will get us pointed in the right direction if the base American social form stays the same. If we continue the One Person-One Job/One Family-One Dwelling social form, and fight to preserve it all costs, we will have lost the opportunity. These arrangements are simply flawed at their most basic levels: the rates of consumption are too high for ecological sustainability; their reliance on full-employment does not mesh with the emerging ratios of labor to economic output; their fundamentally atomizing nature cuts off community and group involvement at its root; they are intrinsically conducive to loneliness and anxiety, which gives artificial fuel to unneeded consumption. By contrast, collective social forms are able to attack virtually every systemic problem at once: collective ownership reduces individual risk, grouped purchasing reduces individual expenditures, combined mortgages/rents free up time for internal self-services, shared products reduce impacts on the environment, etc. In short, the current socioeconomic arrangements don't provide enough breathing space for individuals and families to get control over their finances, their time, their physical space, and their social activity. But collective social forms would provide a more powerful home base from which to attack changing conditions. More give, more flexibility, more room to evaluate and act.
- Retreat from the Consumer-Based Personality: With the rising importance of gear and gadget over the last couple decades, it is frightening to behold just how stuff-centered people have become. Now, I'm not just talking about people being greedy and "materialistic." Something much more profound is happening. The concentration of mainstream media, the proliferation of digital content, the ubiquity of the web, the explosion of personal electronics -- these are all reshaping the neural pathways of the modern consumer. People's attention and thought patterns are becoming hyperfocused on the ever-changing flow of packaged visual and audio content, which does not allow for broad scope, careful analysis, or historical perspective. These issues have been covered from every angle by able commentators, so we don't need to rehash here. But suffice it to say, a nervous, impatient, overstimulated populace accustomed to endless titillation is not well-equipped to deal with long term decline and macro-trends in social and ecological disintegration. And there is a chilling potential for American vulnerability to theocrats and dictators, provided that they can deliver some kind of motivating stimuli. But on the hopeful side, I do see a major opportunity with emerging collective social forms. As mentioned above, much of the energy of modern capitalism comes from the excessive consumption that compensates for the psychological bankruptcy and loneliness of the social form itself. When you take an inherently gregarious social primate evolved to live in intimate tribal settings, and then stick it into the arid atmospheres of the nuclear family and the modern workplace, you're going to end up with epidemic unhappiness and despair, conditions that can only be soothed with stimulants, baubles, and the virtual escapes of electronic media. But remember, that tribal primate is still in there, lurking in the breast of every person, honed by millions of years of evolution. It is there to be leveraged at any time, ready to flower forth if environmental conditions appropriate to its full development re-emerge. In this light, if we choose or are forced to create more collective social forms in the coming years of the Long Emergency, I believe that a lot of the overconsumptive energy of consumer capitalism will drop away, as people once again learn the simple pleasures of hanging out with their own kind. We all know that the best things in life are interpersonal. No sitcom can compare to the uncontrollable laughter that often comes in group get-togethers. As interesting as celebrity gossip is, we're much more alive when we dish the dirt on our compatriots at a social gathering. Watching sports on TV is sometimes good, but who doesn't feel more exhilarated with a romp or game in a field or on the beach? Think back to some of the peak experiences in your own life. My bet is that most, if not all of them, involve spending quality time with larger groups of family and friends, and not getting the high score on some video game.
Really what we're talking about in the near future is a cultural change, in the fullest sense. One American way of life is passing away, and its replacement has yet to be determined. Understandably, as our economic and ecological support structures melt down around our ankles, we're upset, anxious, and terrified. We desperately want someone to come in on a white horse and rescue our full-employment, our suburban mini-manors, our cheap gas, our easy second mortgages, and our mall shopping sprees. The Democrats and the Republicans continue their epic game of musical chairs, hoping that they're not the party in power as we careen from one election cycle to the next amidst continuing decline.
And in the worldview of the culture that is passing away, our problems look insurmountable, what I have earlier called "Concentric Circles of Collapse," or "Russian Nesting Dolls of Catastrophe." We seem to be embedded in vast, interlocking sets of problems: overpopulation, overconsumption, natural-systems collapse, economic recessions, global terrorism, cultural debasement -- you name it. But in reality, almost all of these intermeshed problems draw some energy from the basic social form of One Person-One Job/One Family-One Dwelling. It's not that this social form is the exact cause of everything bad in the world -- of course not. But a general shift to a more collective lifestyle would start drawing the wasted energy out many of these systemic logjams, all at the same time. We just need to have the creativity and the courage to see the world with new eyes.
Here's hoping that we can find those new eyes in the coming years.
And in the worldview of the culture that is passing away, our problems look insurmountable, what I have earlier called "Concentric Circles of Collapse," or "Russian Nesting Dolls of Catastrophe." We seem to be embedded in vast, interlocking sets of problems: overpopulation, overconsumption, natural-systems collapse, economic recessions, global terrorism, cultural debasement -- you name it. But in reality, almost all of these intermeshed problems draw some energy from the basic social form of One Person-One Job/One Family-One Dwelling. It's not that this social form is the exact cause of everything bad in the world -- of course not. But a general shift to a more collective lifestyle would start drawing the wasted energy out many of these systemic logjams, all at the same time. We just need to have the creativity and the courage to see the world with new eyes.
Here's hoping that we can find those new eyes in the coming years.
All for Naught: A Decade of Inertia and Illusion
We had fed the heart on fantasy,
The heart's grown brutal from the fare.
-- William Butler Yeats
Well, I guess it's time to do the obligatory review of the last decade: the Oughts, or the Naughts, or the Zeds, or whatever they're called. I don't really have any desire to do a chronological laundry list of the ins and outs of the last ten years -- there are plenty of those reviews out there already. Instead, let's look at a few events through the lens of inertia and illusion, two of the most salient features of the last decade.
(On a side plug, I highly recommend Chris Hedges book, The Empire of Illusion, from which I pulled the Yeats quote above. Hedges is a stellar columnist for www.truthdig.com, and you can see his stuff here)
We cruised into the Oughts fresh off the roller-coaster ride of Bill Clinton's two-term presidency. Standard liberal boilerplate, especially during Dubya's dog days, was that Clinton's reign was a glorious time for America, especially the economy. Deficits were down, portfolios were up, and sax music danced across the late-night airwaves. Of course, we should now know that this interpretation of Clinton's legacy is false. Sure, things looked good for some. But in reality, the 90s were the heyday of financial deregulation, the continued dismantling of the social safety net, and the ascent of glorious free-trade. The tech-stock bubble inflated and deflated, a precursor to the future housing bubble. And the disparity in wealth between the haves and the have-nots continued its frightening surge.
This is the inertia we carried into the new decade. Powerful forces were eroding the value of labor, squashing out the middle class, and concentrating power in fewer and fewer corporate hands. But there was little that regular people could do to stem the tide, and we ended up quasi-electing a monumentally underwhelming Good Ol' Boy to high office in 2000. Dubya was really the epitome of what many in the country desperately wanted to be: simple, optimistic, straight-shooting, and swaggering. That pill Gore was a total buzzkill: stiff, boring, effete, intellectual, and wonkish. Plus, he kept pointing out depressing stuff, like the earth cooking in its own juices. Who needed all that bringdownishness? With a major assist from the mainstream media's War Against Gore (see www.dailyhowler.com for the gruesome details), as well as the joke that was the Supreme Court, we had our pretend President. Dubya can be seen a giant wish by middle America that we had not become an utterly compromised plutocracy, despite the obvious fact that Bush had raised hundreds of millions from corporate interests for his campaign (as had Gore). Any hope that we could have a real populist or libertarian, anyone from the right or left who could speak and act against concentrated power, was out the window. Instead, we got the guy who talked like Mayberry RFD but acted like Enron.
And then, of course, the defining moment of the decade: September 11th. You can check out some of my older posts on 9/11 here and here, to get some background on my thoughts on the subject. But suffice it to say, our national response to the attacks, despite some early hopeful signs, was utterly illusory and delusional. Instead of using this profound tragedy as an opportunity to more fully engage a world with which normal Americans were woefully out of touch, we lurched into feel-good tales of national innocence and then Chuck Norris-type rage. We allowed the spectacle of the attack to overwhelm the paltry reality of the perpetrators themselves, and thus embarked on a multi-trillion dollar campaign of revenge. At every turn, we were cajoled, encouraged, and intimidated by the military-industrial-mainstream media cabal into supporting expensive, ineffective, and counterproductive assaults and occupations in Mesopotamia. We acted out a national script qua Steven Seagal movie, taking out the Muslim trash with gusto, albeit with a few hundred thousand innocent civilians as well (nobody's perfect). Of course, the legacy of these self-indulgent fantasy wars is still with us, and the American public is growing increasingly uneasy, choking down the acidic vomit of occupation and nation-building as the domestic economy melts into air.
Skip ahead to the rear-bracket tragic bookend of the Oughts, the massive recession/depression that began in earnest last fall, and in which we are obviously still embroiled. The standard interpretation of events holds that our current woes are really an aberration, an unfortunate (albeit huge) blip on an otherwise positive national trajectory of economic growth. In this other feel-good story, we would have been fine if there had just been better financial regulation (liberal take), or if do-gooding socialist-types had not forced mortgages on unworthy borrowers (conservative take). But if the system can be cleansed of these malfeasances, we can get back to the business of "recovery," whatever that might mean.
Of course, this is again a complete fantasy, a profound misreading of the current landscape as just a real estate bubble problem. The forces that have brought us to this place are long and powerful, stretching back to the mid-70s when labor-productivity began to diverge from wages. We have seen wealth and power slowly and inexorably concentrate into a ruling elite over the last few decades, and that class has taken control of the government and the corporate media, obscuring the slow-motion coup d'etat. Again, inertia rules the day, because the levers that move events are so deep and potent that regular people on the ground have very little ground from which to mount any meaningful challenge. So we tell ourselves that our problems are temporary, and we flail around for as many scapegoats as we can find: terrorists, socialists, immigrants, social deviants, bankers, Tiger Woods -- whatever. In place of real thought and action, angry self-righteousness rules the day.
Finally, let's look at the most important emerging reality of the last decade, one that paradoxically gets a lot of attention, but really not enough: the accelerating decline of every major natural system on the planet. Global warming gets the lion's share of the focus here, but climate change is just one piece of a distressing and terrifying whole. The list is nauseatingly familiar: collapse of world fisheries, massive deforestation, depletion of fresh water, build-up of toxic chemicals, wholesale erosion of global topsoils, breakneck species extinctions, etc. Most life and earth scientists believe that there are no significant systems or processes that are actually improving. Virtually everything is coming apart at the seams.
So sure, reducing greenhouse gases is important, and recycling more stuff is good. But the overriding illusion is that there is nothing intrinsically wrong with consumer capitalism itself. We just need greener and smarter jobs and products; and in fact, there is enormous opportunity for sustainable economic growth, if we can just get the right kinds of cutting-edge technologies researched, funded, and financed. Why, just weatherizing our homes and workplaces will save billions and billions, which we can then plow into wind turbine research and solar panel manufacturing.
The reality is much harsher. The trembling of the earth's systems is a sign that the basic algorithms of our civilization are askew. We are simply too large a presence on the planet, and we need to make massive reductions in our numbers and our technologies. We cannot have endless growth, economic or otherwise, within a finite system like the earth. All countries, rich and poor alike, will need to make enormous adjustments in their social forms to avoid the looming famines and dislocations on the horizon.
Cruising along in the background is Peak Oil. All of industrial civilization can be seen as the briefly-flowering portion of petro-depletion. We built all of our systems on the upslope of oil extraction, resulting in unsustainable ratios of energy to economic output and human well-being. As we continue on the downslope of Peak Oil, long-term trends in pricing and availability will render most centralized systems inoperable, so most grand plans on national and international levels will forever be out of reach.
Here's hoping that we can cast off the illusions and inertia of the Oughts, before the planet starts casting us off as the cancerous species we seemed determined to become.
Nobel Oblige
"We did not seek this conflict."
--- George W. Bush (Weekly Radio Address, 9/29/2001)
"The other [war] is a conflict that America did not seek."
--- Barack Obama (Nobel Prize Acceptance Speech, 12/10/2009)
I know I'm a little late to the game, considering that five days is an eternity in the current news cycle universe, but I had shopping to do -- so cut me some slack. Last week, the President begrudgingly but triumphantly accepted the Nobel Peace Prize, apparently for having some great ideas about peace and hope and brotherhood, ideas that may eventually come to fruition after industrial civilization has shriveled down to smoking entropic embers. On a related note, I was just nominated for an Oscar, thanks to this totally awesome idea I had for a movie in a bar one night. You see, there's these time-traveling, Ninja lesbians, and they go back to the days before Atlantis sank, and they...., they..... oh hell, that sucks.
In any case, Saint Barry has mind-melded with Dubya across almost a full decade, to declare before the world that the Global War on Terror, or whatever it's called nowadays, is not a fight we asked for. We're like snowy white innocent lambs -- until you eff with us, that is. Then we're your worst nightmares all rolled into one, like Chuck Norris with Steven Seagal for one fist and The Rock for the other.
Conservatives and other mainstream types have applauded Obama's tough Nobel speech, especially for eloquently sticking it to those peace-loving peaceniks in the heart of socialist Scandinavia. Sarah Palin and Newt Gingrich alike praised Obama for his willingness to remind the pansy Europeans that we've been yanking their latte-drenched stones out of the fire for a long time.
Obama: "The United States of America has helped underwrite global security for more than six decades with the blood of our citizens and the strength of our arms. We have done so out of enlightened self-interest -- because we seek a better future for our children and grandchildren, and we believe that their lives will be better if others' children and grandchildren can live in freedom and prosperity."
America has indeed been underwriting something for the last sixty years, but global security ain't it -- or at least, it is only a necessary condition for the real McCoy. What US foreign policy has been all about in recent decades is prying open a shy globe for the ascendancy of a corporate plutocracy. The guns remind our rainbowed brethren, via almost 800 military bases worldwide, that markets and economies must remain open to the marauding companies that have managed to gather the vast majority of the planet's wealth onto their balance sheets. And of course, as the leading exporter of weapons of mass destruction by a robust margin, the US has absolutely benefited from every shape and form of conflict, uprising, insurgence, war, invasion, cleansing, etc. We send the world's peoples the missiles and guns with which to kill each other. Then, we swoop in and "fix" everything with our own armies, racking up nice numbers for military contractors and greasing the skids for all kinds of business-friendly structural adjustments. In Emmanuel Todd's memorable phrase, we are the world's Arsonist-Fireman.
Obama's Nobel speech acknowledges none of these muddying complexities. Despite all of the courtier praise for Obama's wonkishness and intellectual chops, last week's address had the same crude, basically stupid, ideas at its core that were floating around in the immediate aftermath of 9/11. The role of corporate power is disappeared. The history of American military and clandestine interference in global affairs is forgotten without even a shrug. The CIA fixing elections and assassinating leaders and sponsoring coups to overthrow democratically-elected governments that wouldn't play corporate ball? No way! Sweet innocent ol' us would never do things like that.
Now I understand that Obama has very little to work with in the way of stock American intelligence amongst the citizenry. And for all I know, he may believe all of the shopworn pablum from his Nobel speech. But we're really into fruit of the poisonous tree territory here, in that if the originating ideas for war are bogus and incorrect on their face, then no amount of effort or money will ever deliver the desired results. Faulty premises cannot produce righteous outcomes.
Consider how little distance has been covered between Dubya in 2001 and Obama in 2009, in explaining why "the terrorists" hate us:
Bush: "Americans are asking, 'Why do they hate us?' They hate what they see right here in this chamber [Congress]: a democratically elected government. Their leaders are self-appointed. They hate our freedoms: our freedom of religion, our freedom of speech, our freedom to vote and assemble and disagree with each other....These terrorists kill not merely to end lives, but to disrupt and end a way of life. With every atrocity, they hope that America grows fearful, retreating from the world and forsaking our friends. They stand against us because we stand in their way."
Obama: "War, in one form or another, appeared with the first man....And yet, a decade into a new century, this old architecture is buckling under the weight of new threats. Terrorism has long been a tactic, but modern technology allows a few small men with outsized rage to murder innocents on a horrific scale....the growth of secessionist movements, insurgencies, and failed states -- all these things have increasingly trapped civilians in unending chaos.... Evil does exist in the world..."
Obama goes on to describe that, with the "dizzying pace of globalization" and the "cultural leveling of modernity," "it perhaps comes as no surprise that people fear the loss of what they cherish in their particular identities....In some places, this fear has led to conflict."
So for Bush, the terrorists are just jealous lunatics, while for Obama, they are essentially confused lunatics. In either case, the hyper-focus on "the terrorists" distracts from the much larger undercurrent of anti-American sentiment which allows extremists to bubble up in the first place. I described this in some earlier posts here and here, so I won't belabor the point. But suffice it to say, the obsession with the handful of criminals who actually pulled off 9/11, and then going after individuals as if they were a discrete set of evil incarnate, is supreme folly, especially when it is pursued via the massive tools of the military. Terrorists bubble up because of the general unrest spawned by specific anti-American grievances: the one-sided support of Israel, the continued American support of corrupt Islamic monarchies, and the sacrilegious quartering of troops in Muslim holy lands. Our refusal, out of the box, to examine American foreign policy as a primary cause of terrorist activity is both stupid and expensive. Remember, it's a hell of a lot cheaper to just stop supporting certain regimes than it is to wage endless wars to change cultures that have been entrenched for centuries. When Obama glosses over these facts, and continues to pretend that America is fighting some specific set of nefarious evildoers, then there literally will be no end to the cash and blood we'll spill into the sands of Mesopotamia.
But perhaps equally damaging is what Obama's trite approach does for how to achieve peace. We're treated to these gems of intellectual discovery:
"The belief that peace is desirable is rarely enough to achieve it. Peace requires responsibility. Peace entails sacrifice....a just peace includes not only civil and political rights -- it must encompass economic security and opportunity. For true peace is not just freedom from fear but freedom from want....development rarely takes place without security."
Heady stuff indeed! And how do we get all of this peace and development and freedom from want? How do we wage peace? We should use global sanctions when necessary, push for nuclear disarmament, work for human rights and political freedom, practice diplomacy with both friends and adversaries, help farmers feed their own people, work for education, medicine, shelter for all people. And oh yeah, work for clean energy to fight global warming.
It just seems very awkward to hear the President talk about how to establish all of these wonderful things around the world, as almost every one of them slips through the fingers of his own country's citizens. There is this deadly liberal gloss in his laundry list of worthy causes, a kind of undeserved self-righteousness that seems to assume that America somehow knows how to do these things already, and is thus the appropriate global ambassador for positive change.
This is what happens when a democracy has been replaced by a plutocracy. The real conditions of corporate ascendancy and hyper-concentration of wealth and power are disappeared, leaving the uneasy nausea that economic growth and consumer confidence are the only avenues of "recovery" recognized as legitimate by the ruling classes. All challengers to the corporate empire are crazy, and all resistance to the American definition of progress is portrayed as irrational terrorism.
The peace described by Obama will never exist -- indeed, it cannot exist. Food security, lifelong learning, humane medical care, dignified labor, true freedom (defined as "participation in power" by Cicero) --- these will never be byproducts of economic growth, no matter how much we might wish it. As industrial civilization continues its entropic slide downhill, we'll have to recreate all of these markers of real human progress from different seedbeds.
The Future of Work (Part 3)
Americans, perhaps more than any other people in the world, define themselves in relationship to their work. From early childhood, youngsters are constantly asked what they would like to be when they grow up. The notion of being a "productive" citizen is so imprinted on the nation's character that when one is suddenly denied access to a job, his or her self-esteem is likely to plummet. Employment is far more than a measure of income: for many it is the essential measure of self-worth. To be under-employed or unemployed is to feel unproductive and increasingly worthless.
-- Jeremy Rifkin, The End of Work
The unemployment numbers for November 2009 just came out, and they are "good." Job cuts were only 11,000 in November, a number that was expected to be much higher. The losses from September and October were also revised downwards from initial reports, another positive. Overall, the unemployment rate shrank from 10.2 to 10.0%, and the measure that includes part-timers who want full-time work and discouraged workers, also fell from 17.5 to 17.2%. The private sector saw the lowest shedding of jobs since December 2007. This is all good news, in the standard interpretation.
There are, however, some ominous signs that are related to long-term unemployment and the issues of technological under- and unemployment that we have been discussing in the previous two posts. First, the actual size of the labor force is still contracting. So even though the overall unemployment rate went down to 10.2%, much of this was due to people dropping out of the workforce altogether or going back to school, which pulls them out of the standard measurements. Second, long-term unemployment continues to swell. There are 5.9 million workers who have been out of work for more than 6 months, and the average length of time people are unemployed has stretched out to longer than 28 weeks -- both stats the worst since 1948 (more here). These statistics confirm what many of us already know anecdotally: for older and more experienced workers, those with more invested in the extensive financial commitments of supporting a household, the competition for jobs is beyond fierce. There is terror afoot, the dread that comes with the suspicion that years of expertise are actually a liability and not an asset. We all know the cliche: why hire a 40 or 50-year old who will expect a higher salary and decent benefits package, when there are young kids with more naturally-ingrained computer skills who will work for half? We've all had friends or loved ones who have sent out dozens or even hundreds of resumes, with nary a peep back in response.
Finally, most analysts expect that the long-term unemployment will stay low, likely in the 7 to 8% range well into 2012. The job sectors adding numbers in the last couple months, health care and professional services, are likely temporary and/or seasonal, while the Bubble Economy jobs in the construction, financial and retail sectors continued to contract.
In other words, what many pundits and pols see as the bottom of the recessionary trough, which should now reverse and climb back up to full employment and maximum consumption, may instead be the new baseline. We could be looking at 7-11% official unemployment for a long time, with its accompanying 15-20% full-gamut underemployed or discouraged counterpart. As we covered in the previous posts, technology captures and locks in human skill without the human part, creating completely new ratios between how much people-power is actually needed to churn out prodigious amounts of stuff. We just don't need the same number of well-paid workers to produce a full range of goods and services.
Of course, we have so much invested in the current living arrangements, both economically and culturally, that no "serious" person in a position of authority can entertain the notion that we're entering a completely different era of labor ratios and outputs. As Jeremy Rifkin's passage above points out, our self-worth and identities are so completely tied up with our working lives, it is inconceivable to envision a future where people might only need to spend 15 to 20 hours a week engaged in "productive" activity to make ends meet. That's crazy talk?
So instead, we have a desperate push to recreate conditions of economic growth and full employment. There is a pathological desire to pretend that the economic collapse and the housing bubbles were just anomalies that can be worked through the system like a warthog through an anaconda. Once we digest all that bad mojo, and slap some green job training and financial regulation into place, we'll be good to go again, and tri-weekly runs to Costco and Nordstrom's can resume. Robert Kuttner, along with other liberals, calls for more stimulus. He wants federal money to go first to states and localities, to preserve and fund jobs and projects already on the books -- a faster way to get money flowing than big infrastructure spending. But we need that infrastructure stuff too. As Kuttner explains:
All told, we need additional federal spending in the range of at least $500 billion. But won't this increase the deficit? Yes it will, and that is the whole point. We are in a classic downward spiral of reduced household income and wealth, and a weakened financial sector. Many businesses faced reduced consumer demand, compounded by a reluctance of banks to advance to any but the most blue chip borrowers. In this climate, GDP growth can turn positive but companies are reluctant to hire. Full recovery will not resume spontaneously based on household or business demand, and the only source of increased demand to break the cycle is the government.
Kuttner goes on to point out that in World War 2, the deficit was 29% of GDP, but growth was a robust 12% a year (the deficit today is only 10% of GDP). And similarly, the overall government debt in 1945 was 122% of GDP, while today it's only at 55%. So for many liberals, the examples of the Great Depression and World War 2 show how massive government debt and spending are perfectly capable of creating economic recovery and growth. Economist like Paul Krugman are thus constantly calling for more deficit spending, and rightly point out the hypocrisy of those who have no problem with a trillion dollar military budget, but are suddenly deficit hawks when it comes to social spending.
But the problem with using the Depression and World War 2 as examples of government-spawned recovery is that it underplays the overall, specific history of American social and physical development. Economists generally suffer from what could be called "hard-science envy." They want to be recognized as serious empirical thinkers, so they constantly create de-historicized numerical models. "The economy" is seen as some kind of objective thing, like a pulsar or a giraffe -- and thus it can be described and analyzed like any other scientific object. Abstract and abstruse issues and concepts rule the day, and the longitudinal limitations of actual people and ecosystems are not considered.
In a historical and environmental context, the recovery that followed the Great Depression and World War 2 was predicated on filling up the huge, empty landscape of America with the suburban project (the "American Dream"). We cluttered every corner of our country with shitty houses and their supporting, sprawling crap-scape. The whole thing was built on cheap oil, and is thus utterly unsustainable in the long run. Additionally, this suburban project temporarily sopped up all of the excess work that was jettisoned by the intense automation of the farming and factory sectors, creating a much fuller employment picture than underlying conditions warranted. Now, both fortunately and unfortunately, the suburban sprawl project is largely done -- the landscape is full. Oh sure, houses and commercial buildings still get built, but the labor ratios that applied when it was being laid down do not translate to what is needed for general maintenance and upgrading going forward.
So the post-war model of "recovery" cannot be replicated today. We're facing a different world, and we are already saddled with an extremely inappropriate social form, both ecologically and psychologically. The One Person-One Job/One Family-One Dwelling model has been unraveling for quite a while now, and the attempt shoehorn our future into the same patterns that were used to create our awful suburban civilization in the first place will prove totally unworkable. Our survival as a decent society will necessitate uncoupling our lifestyles from full-employment, economic growth, and maximum consumption. The future of work and life will be more collective, in whatever form it ultimately takes.
The Future of Work (Part 2)
No, the economic problems of the future will not be about growth but about something more nettlesome: the ineluctable increase in the number of people with no marketable skills, and technology's role not as the antidote to social conflict, but as its instigator.
-- Gregory Clark, "Tax & Spend, or Face the Consequences"
Last time, we began the discussion about Technological Unemployment and Underemployment. We saw that real wages and worker productivity began to diverge in the mid-1970s, allowing the surplus capital to gush upwards to a small, powerful economic elite. As families work harder and longer, the excess value that their labor provides is captured by corporate and financial classes that do not plow that money back into investments in the real economy, but rather sock it away in private bank accounts via bloated executive salaries and bonuses, or, even worse, park it in the exotic derivatives that have brought our financial system to a grinding halt. When we talk about the hyper-concentration of wealth in the hands of the few (the top 1% control more wealth than the bottom 90%), the mechanism that makes this possible is technological unemployment, the de-skilling of labor and its replacement with automation and technology.
But wait a minute, what about globalization, the collapse of labor unions, and the erosion of our educational system? Aren't those the real culprits here, and not technology? Well, yes and no. While important parts of the picture, these three variables are themselves actually just symptoms of the more-important technological undercurrents. After all, what drives globalization? It's the advanced computer and financial technologies that allow large corporations to control huge, sprawling supply chains with automated oversight. Sure, the cheap labor available in Asia and Mexico are crucial, but it is the new information technologies that allow for the maximum exploitation of global cost differentials.
And the collapse of labor unions? Sure, there are important legal and political policy decisions that have eroded the power of organized labor. And yes, the cheap labor from overseas provided leverage for management to force draconian concessions from unions. But the background variable that made this all possible was the radical de-skilling of work that comes with automation and computerization of tasks. The base power of labor unions is specialized skill, and once that skill get captured by machines, what's left of bargaining power? Certainly, lower-skilled sectors have had some success in organizing, but their modest gains are far outweighed by the general downward drift of wages in general. And the trajectory of automation is upwards, so that higher and higher levels of skilled occupations become threatened by technological factors. Yesterday, it was garment workers and assembly line personnel being replaced, today it is computer programmers. Very few people, I would wager, consider themselves too skilled to be replaced.
We're getting close to Keynes' notion that technological unemployment is about improved productivity "outrunning the pace at which we can find new uses for labor." But first a word about educational failure, because it is related. It is common to assail our educational system as failing to prepare our young ones for the high-tech demands of the future. To meet the challenges of capitalism's 'creative destruction,' whereby old sectors of work are swept away, education over the last few decades really needed to step up and attack the opportunities opened up by globalization and advanced information technology. It did not happen. Drop-out rates continue to swell, American children continue to trail the pack in math and science, and even successful high school graduates are hitting adulthood with an embarrassing lack of basic reading and thinking skills. We have become a nation of lazy dummies, unprepared for the glittering future economy of green industry, software engineering, and international law. We thus need to make an epic national push to educate our children (and adults) for the new realities.
But again, we're reversing the order of things. With the rapid pace of technological advance, can any one national populace really keep pace, educating its citizens to track with changes in the spheres of science, technology, and business? It is the nature of corporate-controlled technological change to sweep around the globe and grab what is needed at any particular time, in human labor, financial markets, or natural resources, and then to swoop out when conditions change and make another area more attractive. So for a while the US was ascendant, then the Middle East for its oil, now China for its rapidly industrializing base population. But tomorrow, if conditions change, the locus of change will switch to somewhere else. In all cases, the populations of the home countries are fixed, whereas technology and money can swirl around to wherever they are needed, often in the blink of an eye (think electronic finance, which moves trillions of dollars around the world every day). Real people on the ground will never be able to educate, reeducate, and retrain themselves to keep pace with the accelerating changes in technology. Sure, there will always be winners, and there will always be successful sectors of the economy as a whole. But the ranks of the winners will continue to shrink, and the bubbling cauldron of the losers' rage will eventually jump the rim. As Gregory Clark puts it:
The battle will be over how to get the economy's winners to pay for an increasingly costly poor.... With the march of technology, the size of a future American underclass dependent on public support for part of its livelihood is hard to predict: 10 million, 20 million, 100 million? We could imagine cities where entire neighborhoods are populated by people on state support....So, how do we operate a society in which a large share of the population is socially needy but economically redundant? There is only one answer. You tax the winners -- those with the still uniquely human skills, and those owning capital and land -- to provide for the losers.
Clark sees heavy redistributive taxation as the only way out of our current situation, and the United States certainly does have a lower overall tax burden than other Western, industrialized countries (see post from earlier this year, where we examined how the tax burden has been shifting away from corporations and the wealthy, and onto individuals and regular families). But if drastic redistribution of wealth is merely used to prop up the obsolete American Algorithm, whereby we force full employment and maximum consumption down the goose's gullet of our exhausted economy, then we will only be staving off the inevitable transition to a different kind of society -- which must happen.
Next time, we'll look at how both liberals and conservatives are doing their damnedest to deny the fundamental realities involved with technological unemployment and its ramifications for the future of the American economy and civlization. We'll see how our clueless leaders keep pushing stimulus, increased deficits, work-sharing, union-friendly laws, and tax cuts, all in the hope of resurrecting a way of life that has no future. And we'll try to predict how a different set of labor and living arrangements might affect the American psyche, which is heavily addicted to illusions of Horatio Alger and Yankee Bootstrap-ism.
The Future of Work (Part 1)
The disappearance of labor as a key factor of production [is emerging] as the critical unfinished business of capitalist society.
-- Peter F. Drucker (1993)
Yesterday was Black Friday, the glorious day after Thanksgiving, when crazed shoppers comb the land for bargains and hot products, and ubiquitous camera crews search the streets for potential trampling sites. A headline from the Boston Globe today reads, "As sales ring, hands wring: Number of shoppers up, but economy dampens spirits." After all, we've all heard the gruesome holiday calculus: more than two-thirds of America's GDP is based on consumer spending, and more than one-sixth of all retail spending is done during the Yuletide weeks (Note: although the former is a disputed statistic, it is the standard benchmark, so we'll go with it). Analysts, economists, and 'journalists' are all looking at the upcoming shopping season as a main indicator of whether our economy is really on the road to 'recovery,' as the stock market seems to suggest, or if it is still in the doldrums, as the job numbers warrant. Lurking behind this whole fantastical discussion of recovery is an unutterable possibility: that what's good for business may not necessarily be good for regular people. And this points us to a much larger discussion on the nature of work itself and the long-term hemorrhaging of the value of labor in our economy and society. Are we poised on the leading of edge of a return to the 'normal' state of affairs from the 1990s and early Oughts, with heavy borrowing, spending, and consuming reinvigorated? Or are we hearing the dying gasps of a full-employment economy that has been bandaged and duct-taped together for the last 30 years, and which must now mercifully but gut-wrenchingly expire?
Let's back up and start with a quick primer on how labor productivity relates to the housing bubble and the speculative finance meltdown of 2008. This quick account is taken from Les Leopold's excellent book, The Looting of America: How Wall Street's Game of Fantasy Finance Destroyed Our Jobs, Pensions, and Prosperity. Apologies for the long quotation, but he nails it, and I could do no better (from pg.178-179):
- Because productivity and real worker wages diverged starting in the 1970s, income gushed to the top -- to the richest 1 percent or so among us. Tax cuts for the wealthy, deregulation, globalization, antiunion policies, reduced social programs, and the declining value of the minimum wage all accelerated that process. The productivity bonus went to the investor class instead of to workers, where it had gone between 1945 and 1973.
- Some of that capital went to productive investments. But eventually it ran out of moderate-risk investment opportunities in the real economy. It became surplus capital when it could no longer find stable investments to make in the real economy.
- The problem of surplus capital that couldn't find a home was "solved" by the derivative industry. CDO-type [Collateralized Debt Obligation] investments offered higher rates of return, supposedly at little risk. The casino was open for business.
- Through the magic of fantasy-finance derivatives, these funds were recycled to cover risky consumer and corporate debt, and to create instruments that were leveraged again and again upon these debts. All this was enormously profitable for the financial firms that arranged, sold, and traded these products. It also made hundreds of billions of dollars available for both housing and credit card debt and for additional fantasy-finance betting. The surplus capital fueled the housing boom via the derivatives, and it led to a vast expansion of the financial sector.
- Meanwhile, working families had to work harder and longer to make ends meet. More and more families needed two wage earners. More families increased their debt loads.
- The bubble burst because that's what bubbles do. At some point marginal buyers could no longer buy enough houses or pay for the ones they had bought. Too many builders built too many homes because the boom had accelerated prices. American workers with stagnating real wages had reached their debt limits and could no longer fuel the boom.
- When the housing bubble burst, the entire fantasy-finance edifice that had been built upon it collapsed as well. Investors and banks all over the globe were loaded with toxic derivatives based on risky mortgages that had crashed in value. The risk supposedly had been engineered out of these derivatives, but it hadn't. Many financial institutions central to the economy became insolvent or nearly so. The banking system froze. The stock market crashed. The global economy tanked.
- And here we are.
This innocent-looking graph tells us more about our current predicament than the thousands of hours of indignant TV punditry or the thousands of gallons of op-ed ink that we have been exposed to over the last year or so. This shows that in the mid-70s, all of the excess value that was churned out by prodigious American economic growth started to move upwards, to the management and investor classes. Workers were doing a better job, working much more productively, and yet seeing none of that gain in their paychecks, after adjusting for inflation. This simple mechanism, improved productivity but flat real wages, accounts for almost every other dysfunction in the present economic environment: CEOs making 1700 times the base worker salary, instead of 45 times, as it was in 1970; household debt at around 130% of annual income, instead of 57%, as it was in 1970; the top 1% of US households controlling more wealth than the combined wealth of the bottom 90%. etc.
When push comes to shove, there are about 95 million people in America making less now than they made in 1973, despite the intervening decades of economic growth and improved worker productivity. The surplus value of American economic success is being siphoned off and delivered to an ever-smaller slice of the population. How can this be? Well, the usual culprits targeted by mainstream economists are globalization, declining educational infrastructure, and the collapse of unions. We all know the rough outlines on these factors, and they seem to fit together in a mutually-reinforcing structure. Overseas cheap labor and free-trade agreements drive high-paid manufacturing jobs to Asia and Mexico. As these 'high-skill' jobs disappear, they are replaced by non-unionized service jobs, which are lower-paying. To address this major change in the labor market, American education really needed to address the higher-tech needs of the newly-emerging industries -- but we dropped the ball. So we're now stuck with a highly-indebted but under-educated population, unable to compete with countries that can do things either more cheaply or with higher skill-levels, or both.
(It's a nice, neat story for a profoundly not-nice situation, and it can be dove-tailed into the Democratic and Republican master narratives fairly easily. We'll return to this subject later, but in general, liberals can use this analysis to call for more federal stimulus, especially in the educational and green job-training spheres. And conservatives can, less convincingly, continue to maintain that it is the bloated federal government itself which has prevented our post-war decades of growth from accruing to the masses. But as I said, we'll get to that stuff later.)
But right now, we need to address the deeper fact behind this uncoupling of productivity from real wages: Technological Unemployment.
In The General Theory of Employment, Interest and Money (1931), John Maynard Keynes described it thus:
We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come -- namely, 'technological unemployment.' This means unemployment due to our discovery of means of economizing the use of labor outrunning the pace at which we can find new uses for labor.
This is the classic Henry Ford conundrum. His revolutionary improvements in factory automation allowed him to produce the same number of cars with either far fewer workers or workers with lower-paying, de-skilled jobs . But how could he maximize his sales if there were less workers with enough money to buy them? In large part, this was the situation in the Great Depression as a whole. Some studies show that around half of the unemployment and underemployment in the Great Depression was caused not by bad economic conditions in general, but by huge leaps in productivity via automation; i.e., technological unemployment.
Now, the usual reply from mainstream economists is that technological advances, while closing off jobs in one sector, open up new opportunities in other areas. Sure, robots are now assembling our cars, and huge machinery is now harvesting our crops, resulting in many farm and factory workers being displaced. But these people have thus been freed up to move into the more advanced fields of computer engineering, technical writing, wind turbine manufacturing, etc. There is always creative destruction as capitalism surges and pulsates around the socioeconomic landscape, and there is much pain and suffering in the necessary adjustments. But eventually, the labor markets come around, and new generations develop different skills, allowing for the next phase of economic progress. Jeremy Rifkin calls this the "trickle-down theory of technology," the idea that advances in automation and machination will eventually accrue to the benefit of everyone (see The End of Work, 2004).
In some sense, the critics of technological unemployment are correct. Laid-off factory and farm workers don't stay unemployed forever, for the most part. They find different jobs, mostly in the service and knowledge sectors. But the key is that the ratios of value have changed. The advanced technologies capture the surplus value and transfer human skills into nonpersonal systems that need much less future human intervention. As Rifkin puts it:
The critics.. as well as a growing number of people already left at the wayside of the Third Industrial Revolution, are beginning to question where the new jobs are going to come from. In a world where sophisticated information and communication technologies will be able to replace more and more of the global workforce, it is unlikely that more than a fortunate few will be retrained for the relatively scarce high-tech scientific, professional, and managerial jobs made available in the emerging knowledge sector. The very notion that millions of workers displaced by the re-engineering and automation of the agricultural, manufacturing, and service sectors can be retrained to be scientists, engineers, technicians, executives, consultants, teachers, lawyers and the like, and then somehow find the appropriate number of job openings in the very narrow high-tech sector, seems at best a pipe dream, and at worst a delusion.
We should know this in our guts. Automation and technology make it possible to do more with less, so the resulting job landscape will be fewer people making more money, and lots more people making less money. That's what automation does; that's what improved technology means: less labor is need to produce the same amount of stuff or more. Technological un- and underemployment is what really started the great rift between productivity and real wages in the mid-1970s. And more importantly, it has become a permanent and undeniable part of our future, especially as we bump up against the limits of our natural world.
Next time, we'll look at how technological unemployment relates to the other variables in the collapse of real wages: globalization, decline of unions, and a failed educational infrastructure. We'll look at the importance of Keynes' crucial word in his description of technological unemployment: outrunning. And finally, we'll get into an analysis of how the current Democratic and Republican schemes for recovery ignore the realities of a post-full employment society, and what some sensible alternative policies might look like.
