Radio commentary, January 21, 2010

In the economic news, more stumbling along the bottom. On Thursday morning, the Labor Department (not, by the way, the Bureau of Labor Statistics, the main source of data in that agency, but in this case the Employment and Training Administration, another division within the Department—sorry to go all geeky on you) reported that first-time claims for unemployment insurance, filed by people who’ve just lost their jobs, rose by a sharp 36,000 last week. The Department said, however, that this rise was mostly the result of a holiday-related processing delays and not a sign of labor market deterioration. We shall see. The decline in initial claims had been one of the brighter spots on the economic landscape, so if this isn’t just a blip, there’s reason to worry.

The count of those continuing to draw jobless benefits, the so-called continuing claims series, extended the downtrend it’s been in since June. While that’s good news, cheer must be tempered by the fact that this regular count doesn’t include those drawing emergency and extended benefits. If you add them in, there’s hardly been any decline at all. The share of the unemployed accounted for by the very long-term jobless is at record levels, which underscores that this is more a systemic crisis than a merely cyclical one.

In happier news, the Conference Board’s index of leading indicators, which forecasts trends in the economy three to six months out, rose for the ninth consecutive month in December. That’s further confirmation that the recession is over and a weak recovery is underway. But I’m still thinking that we’ve got a rough year still ahead of us.

The economy isn’t the only thing suffering from a structural, and not merely cyclical, crisis. Our political system is as well. I quickly got tired of hearing all the liberal anguish over the result of the Senate race in Massachusetts. The Democrats brought the problem on themselves. A year of trying to seduce the Republicans into bipartisanship and giving the conservative wing of the Democratic party everything they want has brought Obama nothing but disrepute. For hardened streetfighters like the GOP, conciliation is a sign of weakness which only makes them bolder.

Of course, the liberal instinct is to blame this urge to compromise on the lack of brains or backbone or some other crucial bodily organ. I think that’s wrong. The fundamental problem of the Democrats is that they’re a party of capital that has to pretend for electoral reasons that it’s something else. So they make progressive noises to satisfy the base, but once in power, do the bidding of their funders. Sometimes these contradictory tendencies can be seen in one figure, like Obama himself, and sometimes in the wings of the party (e.g. the Progressive Caucus vs. the Blue Dogs). But in both cases, the more conservative faction, whether of personality or party, almost always prevails. That’s especially the case when there are no popular movements pushing them in a better direction. Those popular movements were partially disarmed by Obama’s victory. Maybe they’ll start coming to their senses now, especially as the Dems move right in response to the Massachusetts outcome.

But that’s not the whole story. Although a lot of liberals, and even more serious leftists, don’t like to admit it, there’s a deeply conservative streak in the American electorate. The “common sense”—the unschooled instincts imparted by upbringing and inherited ideology—of people in this country is individualist and self-reliant. That common sense has become increasingly dysfunctional. The U.S. reminds me in many ways of a startup company that’s grown so big that it needs a serious overhaul but is incapable of the necessary transformation. In the corporate example, you frequently see that the founders don’t want to turn things over to professional managers. They want to keep running the show on instinct and animal spirits. But those aren’t working anymore.

So too the U.S. The dog-eat-dog model of social Darwinism worked well (on its own terms—it was often horribly brutal) while the U.S. was growing rapidly in the 19th and early 20th centuries, but ever since growth slowed down in the 1970s, we’ve been in need of a rethink of the old model. But we’re incapable of it. Instead, we’ve tried ever more reckless applications of debt to keep things going. The recent financial crisis looked like the crisis of that approach, but we’re now emerging from the crisis phase without things having changed all that much. Obama’s making some hostile noises about breaking up large banks and putting their speculative activities on a leash, but I’ll believe it when I see it.

Taking on the fat cats

Obama playing golf with Robert Wolf, chair of UBS (far right).

The country seems to be rotting from within but the political and ideological systems are incapable of recognizing that fact, much less trying to deal with it. I wish I could detach myself from the consequences and find it all amusing, in the style of H.L. Mencken. But I can’t. And now I’ve got a kid who was born into this nuthouse, so I take it all far more personally. I hope we can get our act together and make this a less brutal place. But it’s hard to get hopeful. I guess this is what it’s like to live in the midst of imperial decline.

15 Comments on “Radio commentary, January 21, 2010

  1. It’s probably no consolation, but you’re not the only thinking person on the US “left” (as you say, “whatever that is”) who has concluded in the last week that the prospects for any kind of positive regeneration have hit a new low. The sense of resignation, to sitting by idly in face of so many obstacles to such a regeneration, is more and more palpable. It’s also contagious. Yuck.

  2. And I have to stomach being on the Democratic ballot in 2010…

    I spend most my time “explaining myself” to voters in a state (Georgia) where Republicans have run the state budget into the ground.

    There is a severe disconnect in the voting population between the social changes they want (health care reform, less money in politics, quality infrastructure) and the policies they oppose (helath care reform, less money in politics, quality infrastructure). They don’t hold substantive opposition–its cultural opposition. Oh and raising taxes is bad.

    Non voters don’t seem to have this disconnect, but I can’t seem to get them to want to vote–probably because they have accepted the decline of Empire while some of us are still fighting for a functioning Democratic Republic that no longer exisits?

    Sheldon Wolin’s Democracy Incorporated has come to mind a million times this week. A solution to any of this has not.

  3. Imperial decline, huh. Heard it before. Folks like Brenner make the mistake of taking a certain period of US capitalism and acting as if any deviation from it is a sign of decline. As if there is a trans-historic way that capitlism functions and as if it wasn’t always very fluid and changing. Brenner, not saying you do this Doug, compares the higlights of the postwar ‘long boom’ to show the declining nature of US and OECD capitalism. As if the center is not gaining from the transformations in the NIC’s and BRIC’s. I’m not saying that it is all positive but that it’s just different. The capitalist class in the US has never been stronger and there has never been less resistance in US history. Maybe they will destroy it themselves but then what was all that resistance for anyway?

  4. Maybe the lack of resistance is bad for the ruling class. The U.S. ruling class strengthened itself through the Progressive Era reforms, a response to working class uprisings during the Gilded Age, and in the early Cold War period, when the USSR was biting its ass. Now, they’ve got it easy, and all they want to do is count their money.

  5. I’ll bite at the geek bait. How come the BLS isn’t reporting the first time unemployment claims?

  6. In re the golf photo, there was a sweet headline on the Borowitz Report this week: Obama Rips Bankers Not Already in Cabinet.

  7. The BLS doesn’t do claims because the program is run out of the ETA. It’s a joint state-federal thing. The states report their numbers to the ETA, which releases them on the Thursday following the end of the week covered; continuing claims come with a delay of a week.

  8. Wolf is more than a golf partner and UBS honcho, he is a member of the President’s “Economic Recovery Advisory Board”.

  9. here is a dumb question…

    is Emergency Unemployment Compensation the same thing as extended unemployment benifits?

    Also have their been any follow up studies during this recession looking at the Clinton Welfare reforms impacts?

  10. “Rotting from within” – alludes to the big question: are there historical limits to the capitalist economy, and if yes, what are they? People took that question seriously in the 1930s, but the answers did not hold water. Now the problem is simply to get the question in play. It’s the subject of my No Rich, No Poor.

  11. “I can hire one-half of the working class to kill the other half.”Jay Gould 1888
    Bummer bein’ on the losing side in the class war,huh?All that teleological smoke about human progress,re-packaged throughout history as Christianity or Marxism,the great cleansing catastrophe/revolution followed by Paradise/dictatorship of the proleteriat vanishes,swept away by Thanatos.Freud got wrong -The Death drive trumps Eros every time.
    Besides the great unwashed ain’t interested in the soap you’re peddling anyway.Wal-Mart Uber Alles.Best thing you can expoect from the vast majority is indifference.Like Auden put it in The Shield of Achilles

    Barbed wire enclosed an arbitrary spot
    Where bored officials lounged (one cracked a joke)
    And sentries sweated for the day was hot:
    A crowd of ordinary decent folk
    Watched from without and neither moved nor spoke
    As three pale figures were led forth and bound
    To three posts driven upright in the ground.

    The mass and majesty of this world, all
    That carries weight and always weighs the same
    Lay in the hands of others; they were small
    And could not hope for help and no help came:
    What their foes like to do was done, their shame
    Was all the worst could wish; they lost their pride
    And died as men before their bodies died.

  12. The conventional wisdom is that Obama is being punished by voters for being too progressive. That’s good proof of a conservative mindset bias…

  13. I think the great hope of the ruling class is that somehow people who are in serious debt and are losing income by the week will start taking on more debt to save the system as we knew it. It’s possible that will happen, as people get used to the idea of debt again or are forced into it (the car just can’t be repaired again), but this just means that we’ll have another crisis not too many years from now. In fact, the banker (I’ve forgotten which one) who suggested that we’d have a new crisis every five to seven years may not be far off the mark.

  14. “The conventional wisdom is that Obama is being punished by voters for being too progressive. That’s good proof of a conservative mindset bias…”

    Or is it just proof of Democratic ineptitude?

    When you sit down and talk with people over coffee. Really sit down and discuss the ideas and why they like or dislike policies, positions, bills… what have you. I find that people aren’t as “conservative” or to use Chomsky’s term “reactionary” as they think.

    Most people that sound conservative to a pollster, or in simplistic political “debate” get their news from Fox. [Granted most Democrats fall into that category on a number of fronts–as they get their talking points from Obama machine.]

    To me these seem to be problems of information dissemination and voter engagement not some kind of conservative bias.

  15. To Jim Nichols:

    As I recall, first you exhaust your regular unemployment benefits (13-26 weeks), then your extended unemployment benefits (13 weeks). Then you get fully federally-funded benefits which are emergency benefits in that the federal government pays for all of them. Presently those benefits (13 weeks) are supplemented by additional benefits in states with high unemployment (6 weeks).

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