Radio commentary, April 30, 2010
March on Wall Street
The WBAI studios are on Wall Street, of all places, so I was able to catch a glimpse of the anti-bank demonstration sponsored by the AFL-CIO and a coalition of community groups organized by National People’s Action (Showdown in America). It’s inspiring, but I’m afraid there’s just not the level of popular mobilization necessary to overcome the lobbying power of big finance. The unions are blowing off some steam today, but tomorrow they’ll go back to writing big checks to Democratic politicians and apologizing for their failings. And, I’ve got to say that it was entertaining to see those Goldman guys in the Congressional hotseat the other day, but I’m afraid it was little more than a ritual sacrifice designed to appease an angry electorate. Goldman will probably go on pretty much as before. I hope I’m wrong, of course.
Of course, given the conventions of modern protest, the cops wouldn’t let anyone onto Wall Street—everyone was safely penned onto Broadway, sparing the New York Stock Exchange any unpleasant passersby. A commentary from my 4-year-old son Ivan, who went along: “Why didn’t they go into the banks and yell at the bad people? And no one could see the signs or costumes unless they were looking out the window. And they’d only see their sides!” He’s onto something.
In the economic news, the recovery continues, with a couple of decent reports coming out of the housing market. Sales of both existing and especially new houses were up nicely in March. Much of the life, it’s hard to say just how much, came from the tax credit for first-time buyers—you do have to wonder if the market can survive the withdrawal of that stimulus. Prices aren’t recovering so quickly. The best measure of house prices we have, the S&P/Case-Shiller index, is up not quite 1% over the last year (though it’s most recent figure is for February, ancient history in these precincts). But much of the gain happened last year; prices in recent months have been pretty flat.
But the trend I’ve noted here over the last few weeks continues—people are buying again. The weekly chain store sales numbers are showing their best gain in years. Appropriately enough, the consumer confidence numbers from the Conference Board are showing an improving mood among the masses—mostly for the future, but perceptions of improvement in the job market were also impressive. It’s hard to say how much of that perceived improvement comes from personal experience and how much from hearing some more upbeat news in the media. But it does look like a recovery is underway. Or so the financial markets believe—at least until the bad news out of Europe (on which much more in a few moments) inspired more prudent sorts to put the champagne back in the chiller for now.
And, in the accurate words of Mohamed El-Erian, head man at Pimco, the world’s largest bondholder:
Markets are placing too much emphasis on the cyclical tail winds and not enough on the structural head winds. We recognize that it will take time for the market to fully understand that the global financial crisis was not a flesh wound, that the balance sheet adjustment hasn’t yet ended, and that the post-crisis phase is inherently complex. We have seen a massive stabilization of the financial market, but the hand-off from financial stabilization to a robust recovery on Main Street, which translates into the large employment creation we need [for] growth, is proving more difficult. So we worry over persistently high unemployment as well the robustness of the social safety nets.
Aside from the use of the tired “Main Street,” which would never appear on here except in a quote, this formulation can hardly be improved upon. It’s striking to see one of the royalty of finance show more concern about social safety nets than just about anyone in political life.
As I keep pointing out, the history of economies after financial crises is bleak; it typically takes years to mount any kind of sustained recovery. For now, we’re being lifted by tax breaks and deficit spending. But tax breaks expire and the deficit spending is set to be reversed within a year. (And Obama’s deficit commission is getting ready to bring out the really big and sharp knives—though there could be some political obstacles to realizing the agenda.) Our credit system is still a mess, and it would be insane to go back to the model of the 2001–2007 expansion, when debt grew nearly twice as fast as GDP, the most lopsided ratio in modern business cycle history—and despite all that credit juice, it was also the weakest of all the expansions. The tailwinds are pleasant at the moment, but without any serious structural reforms, it’s hard to see how the headwinds won’t be back.
And now, closer to home. A “member” of Pacifica, one Christopher Bayard Condon (like an assassin, he’s got three names), has proposed a resolution to the Pacifica National Board that would essentially require programmers to take 9/11 conspiracies seriously. It would increase airtime for Truthers, and deem those of us who don’t buy this paranoid nonsense in violation of the Pacifica mission. The KPFK local board has already passed such a resolution, but no one’s paid any attention to it, thank god. In fact, a KPFK producer told me that he wasn’t even aware of it. He, sensibly, has been broadcating critiques of this nuttery. All this Pacifica resolution needs is a board member to introduce it and it’s up for a vote.
First of all, it’s appalling that anyone would contemplate forcing Pacifica producers to embrace a party line. I’d sooner give this all up than obey such a thing. But it’s even worse that there are so many people who take this toxic waste seriously. Not only is it nonsensical in content, it destroys the mind. Obsessions about the melting point of steel and the shape of the nonexistent hole in the Pentagon take on a life of their own—as a commenter on my blog put it, this sort of reasoning becomes quite literally like a paranoid’s pathological mental processes.
We—the political left in general, and Pacifica specically—already have some serious credibility problems among the broad population The last thing we need is further marginalization, especially of the self-imposed kind. As damaging as this sort of nonsense is, it’s also politically destructive.
Don’t take my word for it. Connoisseurs of conspiracy might want to check out a 1998 report on Defense Department declassification procedures, prepared by the consulting firm Booz Allen & Hamilton, posted to the Federation of American Scientists website. They recommend that “[t]he use of the Internet could reduce the unrestrained public appetite for ‘secrets’ by providing good faith distraction material.” As an example of such material, they suggest “Diversion: List of interesting declassified material—i.e. Kennedy assassination data.”
So, consider this, conspiracy theorists: instead of analyzing all the rich material about capitalism and empire on the public record, you’re doing the Pentagon’s work for it by pursuing “distractions.” You’d almost think it’s a conspiracy.
“Why didn’t they go into the banks and yell at the bad people?”
Ivan already has shrewd tactical instincts. And in fact that is exactly what some people did: http://news.yahoo.com/s/ap/20100429/ap_on_bi_ge/us_wall_street_protest.
Sure, these are small first steps, and the union leadership is clearly trying to find a safe way for its members to blow off some steam, but it’s nevertheless notable that they’ve had to respond to rank-and-file sentiment at all—it’s been a while since they’ve done that.
Similarly, the release of the embarrassing Goldman emails was clearly precipitated by the Democrats’ belated realization that they need to appear more populist. Yes, it’s all an act, but despite that it can help produce some activity at the grass roots. Your radio show can play an important role in encouraging the movement to grow.
There is some excellent analysis of the banking swindles here: http://socialistworker.org/department/Economy. But the best coverage, as always, has been on the Daily Show: http://www.thedailyshow.com/watch/tue-april-27-2010/who-wants-to-beat-a-millionaire.
Speaking of the credit market mess, the corporate bond market deteriorated quite a bit this week.