Austerity & bankers’ coups: the NYC precedent
With the displacement of Greece’s elected government by Eurocrats acting in the interest of the country’s creditors, I thought this would be a good time to reprise the section of my 1997 book Wall Street that covers the New York City fiscal crisis of 1975, which was something of a dress rehearsal for the neoliberal austerity agenda that would go global in the 1980s. Certain celebrity academics are constantly cited for making this argument, but I was there first. You can download Wall Street for free by clicking here: Wall Street. This chapter, and this book, has… Read More
How to stop worrying about class
Today’s New York Times contains a fine example of how ideology works at the high end: report information that might trouble the established order, but conclude on a tranquilizing note that allows the comfortable reader to turn the page (or click “close tab”) without changing his or her worldview. Both functions are important. Outlets like the Times do report tons of important stuff that one would be hard-pressed to learn otherwise. But, as Alexander Cockburn put it long ago, a primary function of the bourgeois press is reassurance. The piece by Sabrina… Read More
A chat with Larry Summers (from 2000)
This is from Left Business Observer #94, May 2000. chatting with Larry LBO’s editor was lucky enough to run into Treasury Secretary Lawrence Summers at a party in Washington on April 15, and got to overhear some of his thoughts on the weekend’s events and even ask a few questions. Early in the evening, surrounded by what appeared to be some loyal scribes, Summers enthused about how “proactive” the DC cops were, having arrested some 600 demonstrators, “including many of the leaders.” Summers is evidently unaware that the Direct Action Network types… Read More
Yglesias reflects on bubbles
Matt Yglesias is still trying to figure out the late housing bubble. His latest approach is to separate structures and land, which leads him to this conclusion: I think it makes more sense to restrict the idea of a “bubble” to speculative asset like land (or stocks or gold or whatever) rather than to the actual building. A building boom may be (indeed probably is) in some sense “unsustainable” but when the boom collapses it’s not like an asset price bubble that leaves nothing in its wake but debt. A boom in structure… Read More
Clarifying executive power
Peter Frase is right (“Are CEOs workers, and should we care?”) that talking only about ratios of CEO to worker pay ignores positions in the M-C-M’ circuit. The pay of CEOs and other top executives is almost entirely a return on capital. Perhaps there’s some reward to skilled labor there, but nothing approaching $11 million. Unlike workers, who live under harsh labor discipline, your average CEO is lightly supervised by a board. It’s a rare day when a bad CEO gets fired. The CEO class enjoys an esprit de corps; they sit on… Read More
David Brooks: making stuff up, again
Ah, the charmed life of a New York Times columnist: you can say anything you want, true or not. David Brooks has a long history of, shall we say, careless use of evidence. Back in 2004, Sasha Issenberg did a masterful fact-checking of his earlier work: “Boo-Boos in Paradise.” Our serial fictioneer is at it again. In today’s column, he defends Germany’s stubborn insistence on austerity for the so-called PIIGS (Portugal, Ireland, Italy, Greece, and Spain) as a defense of “a simple moral formula: effort should lead to reward as often as… Read More
Don’t get me wrong…
After the previous post, on the problems of leaderlessness, I don’t want people to get the wrong impression. I feel nothing but deep admiration and gratitude for the Occupiers—in Zuccotti and elsewhere, from Tunis to Melbourne. As I stepped out into the cold rain this morning to pick up the papers—which included that Roula Khalaf piece—I thought: man, it must suck to be camping out in this. But I’m so happy there are people who do it anyway. So when I post something like that Khalaf excerpt, I want to remind people… Read More
Jacobin OWS correction
Bluestockings is at 172 Allen St, not 72 as I said earlier. 172! At least I got the time right: it’s at 7.
Maybe 99% is a bit much, but…
The last day or two I’ve been seeing some complaints that the chant of the Occupy Wall Street protesters that “We are the 99%” casts the net too widely, effacing all kinds of class, race, and gender distinctions. Well, yes, probably so. But I still find it cheering. It is a fact that over the last couple of decades, much of the growth in total income in the U.S. has gone to the upper reaches of society. For example, based on Census data, between 1982 and 2010, the richest fifth of society… Read More
The housing boom (cont.)
Matt Yglesias responded, sort of, to my comments (“Was there a housing boom? Yes.”) from yesterday, countering his curious assertion that there was no building boom in the mid-2000s, by conceding that there was a boom in construction employment after all. But he refuses to give up on the argument that there was no building boom. A few more words on this topic before laying it to rest. Yglesias graphs construction employment as a percentage of the civilian labor force with a line marking the average: Before proceeding, a little overview to… Read More
Does productivity = unemployment?
There’s a controversy aflame in the left–liberal blogosphere around a revelation in Ron Suskind’s new (and apparently error-riddled) book, Confidence Men. (Brad DeLong has the page.) Suskind reports on tense high-level meetings within the Obama administration as it became clear that the StimPak wasn’t really working. Unemployment was drifting higher, and the Keynesian faction—Christina Romer, then chair of the Council of Economic Advisors, and later Lawrence Summers, then resident wise man—was calling for more stimulus. Obama said no. It was politically impossible, but Obama also argued that the productivity revolution has made workers obsolete…. Read More
Heritage Foundation: severely truth-challenged
I usually shy away from mocking the right—it’s too easy, it’s overdone by liberals, and it’s often a gateway to apologetics for the Democrats. But this is a doozy. In an effort to prove that Obamacare is responsible for the recent weakening in the economic recovery, James Sherk of the Heritage Foundation presents this graph: Seems odd, doesn’t it, that the average of the first segment, January 2009–March 2010, is +67,600 a month when the graph is below 0 for almost the whole time? Well, yes it is. The actual average change in… Read More
PS: The Riksbank is right
I got a couple of emails asking me whether I agreed or disagreed with the passage from the Riksbank’s philosophy of money that I quoted yesterday. I agree. I guess that makes me a tough customer too—a hard-money Marxist, you might say.
Sweden: no paradise of monetary ease
Several people have commented that my characterization of the Swedish central bank—Sveriges Riksbank—as a pretty tough customer is wrong. They point to a rapid response to the 2008 financial crisis, more dramatic than that of the U.S. Federal Reserve. Yes, the Bank moved quickly to counteract the implosion. It flooded the system with liquidity—and briefly resorted to negative interest rates (though this was a largely symbolic gesture, since Swedish banks rarely borrow from the Riksbank). This is exactly what a central bank should do in the midst of a crisis. It also… Read More
Yglesias & neoliberalism
Matthew Yglesias regrets that his original commentary on monetary policy, and my disagreement with it, got hijacked by Henry Farrell and turned into an analysis of the limits of neoliberalism. (I also stand corrected that Yglesias hasn’t written in favor of a jobs program in the past—apparently he has, though there was no evidence of it in the piece I responded to.) I like what Farrell has to say, and agree with him: there’s a kind of liberal, or neoliberal technocratic approach to politics that boils down to, as Adolph Reed once put it,… Read More
LBO News from Doug Henwood 