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.