More Pacifica: Marc Cooper writes…
My old friend Marc Cooper has a long post on Pacifica that concludes with some comments on my own recent rant on The state of WBAI (dire). Since it’s always nice to be noticed, I’ll overlook the rather patronizing tone of his “means well” and just respond to his conclusion that it’s all too late—the game’s over. If the game is really over, Marc, why did you devote 1,247 words to the topic before you get to that point?
Me, I think the situation is, as I said, dire, but not necessarily terminal. But almost every other word he writes in this post is true. Too much of the programming on KPFK (where Marc did a show for many years) and WBAI (where I’ve done a show for many years) sounds like it beamed from one of the smaller moons of Jupiter. The governance system of the network, with boards elected by staff and listeners, may sound nice in theory but has proved disastrous in practice. People run for the boards based on their political resumes, not their qualifications for running a radio station. (And, on second thought, the system doesn’t make sense in theory either: why should a board elected by a fraction of these eligible to vote, which is itself a fraction of the listeners, produce any coherent or admirable results?) Marc is also right about the silence and/or complicity of the left media and left media watchdogs on the devolution of Pacifica. As he points out, The Nation once editorially endorsed having the programming done by elected councils (something considerably worse than the current governance system), even though the magazine itself is edited by small professional staff, the chief of which is also one of the publication’s owners.
The network continues to bleed money. WBAI’s latest fundraiser, which took up much of August, was a flop, falling about 25% short of its goal. The flogging of sensational premiums, featuring conspiracy theories and health quackery, was at least supposed to bring in some quick cash, even if it did risk ruining our reputation and driving away sane listeners. But it’s not even bringing in the cash. To compensate for this failure, there’s going to be another mini-fundraiser on September 9 and 10, which will no doubt feature more chips-in-the-head and herbal magic stuff. The next day’s programming will be a commemoration of 9/11, one hour of which is supposed to be devoted to refuting Truther nonsense. One can only hope that the other twenty-three hours don’t promote it.
And one can only hope that Marc isn’t right, and it isn’t too late. Pacifica is a precious resource, with strong signals in the most important metro areas in the USA. It still carries lots of fine programming amidst the stuff that sounds like it originates from Eurydome or Pasithee. To save itself, Pacifica has to stop flogging nonsense in its fundraisers and try a dignified, quiet approach. The quantity of begging has to come down: we can’t fundraise for more than a quarter of the year—it’s suicidal. The moons of Jupiter stuff has to go. And so too does the governance system. The stations and the network need to be run by people who know what they’re doing and have some authority to do it. We need to do some serious research to find out where all our listeners have gone and why—and what might bring them back.
The nutters denounce this sort of agenda as “corporatization.” Against it, they proffer some notion of programming of, by, and for The Community, whatever that is. I’ve asked a lot of them to define The Community. They can’t, because it’s a figment of their imaginations.
So it’s either something like what I’ve just outlined, or Pacifica will have a date with the bankruptcy court. Its licenses are extremely valuable, probably worth hundreds of millions of dollars. Which makes me wonder: should it come to bankruptcy and the licenses are put up for auction, who would get the money? Hmmm. Any lawyers out there with some ideas?
The Real News, part 3
The third part of The Real News interview with me is up: WAGES AND THE CRISIS.
New radio product
Back after a long fundraising break. Freshly posted to my radio archives:
Paul Street, author of The Empire’s New Clothes, on the sorrows of Brand Obama • Christian Parenti, author of this article, on how the gov can kickstart the adoption of green technologies by the way it buys
The Real News, part 2
Part 2 of my interview with The Real News on The Crisis is up: THE LIMITS OF STIMULUS.
Me on The Real News
I’m interviewed on The Current Crisis by Paul Jay of The Real News: AUSTERITY IN THE FACE OF WEAKNESS.
Strike wave!
There are many ways to measure the death of organized labor as a social force in the U.S. Here’s what might be the most objective one: the virtual disappearance of labor’s ultimate weapon, the strike.
The graph above shows the annual number of major strikes, as tallied by the Bureau of Labor Statistics. (The front page for all their strike/lockout stats is here: Work Stoppages Home Page.) The figure for 2010 annualizes what we’ve experienced so far this year. The little uptick, from a total of 5 in 2009 to 20 in 2010, was boosted by a strike by 15,000 public sector construction workers in Chicago in July. Their strike produced 180,000 lost workdays last month, the highest total since 600,000 in October 2008. These numbers are nothing when compared to the peak of labor’s power, from the 1950s through the 1970s, when we saw as much as 60 million lost workdays a year, or 0.4% of the total number worked economy-wide (the record, set in 1959). Heck, it’s nothing compared even to 2000’s 20 million lost days, or 0.06% of the total.
All those right-wingers who long for the good old days of the 1950s might want to reconsider.
The state of WBAI (dire)
[I just sent this to Mitch Cohen, chair of the WBAI local station board, to be read at tomorrow night’s board meeting.]
To Mitch Cohen and the WBAI local station board:
I’ve been around WBAI for more than two decades. I started as a frequent interviewee on Samori Marksman’s show in 1987, moved on to regular commentaries on his show a few years later, and then began doing the Thursday editions of his Behind the News in 1995. I’ve watched the station go through considerable turmoil over the years, but the current situation has me more worried than ever. I was very relieved and hopeful when Bernard White and Co. were removed from office. But I’ve lost that feeling completely.
Our financial situation remains dire. Indeed, it’s hard to see how we can go on like this much longer. Not only are we not paying our bills, we’re dragging the whole Pacifica network deeper into the red. In this context, it’s easy to understand the temptation to offer sensational fundraising premiums to raise a lot of money quickly. But this strategy is proving disastrous.
A few words about those premiums. During the last few drives, WBAI has offered a variety of rather embarrassing videos and publications. We’ve now moved well beyond the familiar 9/11 conspiracies. Now we also have miracle cures (which, it wouldn’t surprise me, could put us at legal risk for offering, since they make claims about curing disease that, to put it gently, would be very difficult to prove), stories about chemtrails (the theory that the government, for some mysterious reason, is poisoning us by spraying chemicals from the sky), and most recently, a series of videos explaining how the Illuminati are about 90% of the way to taking everything over (it’s only a matter of time until they plant microchips in our heads and solidify a regime of total control). (Tastes of that stuff here and here.) I’m told, though I haven’t heard this stuff myself, that we’re also hawking the work of Kevin Trudeau, who’s been convicted of credit card fraud and has been fined for making false and misleading claims – and who’s been frequently sued by disgruntled customers. Of professional interest to me are stories about financiers and the Federal Reserve which have no basis in historical fact – and I say this as someone who knows more about Wall Street and central banks than anyone involved with Pacifica. Many of these narratives have deep roots in far-right politics – the Wall Street/Federal Reserve stuff has long been associated with crypto-fascist organizations like Willis Carto’s Liberty Lobby (e.g. the works of Eustace Mullins). Trudeau is a big fan of Matt Drudge and the odious Michael Savage.
None of this stuff can be taken seriously by anyone with an ongoing relationship with Planet Earth. For that reason alone, it’s a disgrace that we give it such prominence. The health claims expose us to prosecution and litigation – a legal risk we can’t possibly afford. But, that aside, airing this sort of stuff drives away sane and solvent listeners. Given the recent drop in our fulfillment rate, it seems reasonable to surmise that people who pledge on this stuff are more likely than most not to come through. So this strategy fails even on purely monetary grounds. But by driving away the audience, we’re undermining the station’s future. Do we really want to be known as the nonprofit telemarketing arm for lunatics and convicted criminals?
I’ve shared these concerns with interim program director Tony Bates and he dismisses my concerns as mere “outrage.”
We urgently need to figure out why we’ve lost listeners and how we can build the audience back up. This is not the way to go about it. It’s a guaranteed route to insolvency and ridicule.
The CBO’s deep, unappreciated gloom
In this article from LBO #128 (yes, it’s posted quickly to the web, but that doesn’t happen often, so you really should subscribe if you don’t), I talk about the lust that some people—within Wall Street, the Federal Reserve, and the world of punditry—have for getting the federal deficit down. Contrary to this I argued that this is really the wrong time to start thinking about that—we still need the short-term kick of deficit spending to help get the economy off the mat, and then over the longer term we need to rethink our economic model. But I do want to take a look at the evidence that deficit hawks use to scare people into the need for austerity: projections for the growth in federal debt over the next seven decades.
(Quick definitional housekeeping. The deficit is the difference between what the government takes in and what it spends. To make up the difference, the government has to borrow, which adds to its total debt outstanding. In the jargon of the trade, the deficit is a flow and debt is a stock.)
Seven decades is a really long time to do forecasting over, since the economics profession isn’t really all that good at forecasting next year. But you do have to think about these things, if only to do some half-rational planning. People who worry about pools of red ink say that countries face the risk of debt crisis when their total debt reaches somewhere around 100% of their GDP. There’s nothing magical about this, but let’s just assume that this is more or less correct for a moment. On the Congressional Budget Office’s projection, which I characterized as hysterical without much elaboration in the original article, the U.S. won’t reach that point until 2074. Yet scaremongers are using that possibility as an argument for hacking away at Social Security and Medicare starting sometime in the next few years.
But what about those projections? Why did I call them hysterical? Becase, for one reason, they assume that starting about 10 years from now, the U.S. will settle into a period of profound economic stagnation. To put a number on it, they project that from around 2020 through 2084, GDP growth will average 2% a year. To underscore the point, that’s over a period of 64 years—enough for a person born at the beginning of that period to reach very close to today’s retirement age by the end. How weak is 2% growth? It’s only a little over half the 3.7% average that prevailed from 1870 through 2009. There have only been a few brief periods in U.S. history when trend growth was this low—the 1930s and around about now, in fact. And that’s about it.
For the full historical perspective, see the graphs below. The top graph shows yearly GDP growth from 1870 through 2009 and the CBO’s projections for 2010–2084. The heavy line shows the underlying trend using a statistical technique called a Hodrick–Prescott (HP) filter. It’s sort of a high-tech average. Note that the projected 2020–2084 trendline is lower than just about every period in the long sweep of history. The next graph does the same, but with per capita figures. The results are very similar: the projected average of 1.2% (using population assumptions detailed in a moment), vs. a long-term historical average of 2.1%. And the trend is lower than almost every bygone period. And the bottom graph isolates the HP trends to emphasize just how at odds with the historical record the CBO’s projections are.
How do they come up with these numbers? I asked the CBO for clarification, but they haven’t responded. But asking around yields something like this. Over the long term, economic growth is a function of labor force growth and the productivity of that labor—how much workers can produce in an hour or year of work. The CBO apparently assumes that the labor force will grow very slowly—around 0.3–0.4% a year. That’s less than half the current rate, and about half the rate that the Census Bureau projects the population will grow in the coming decades. If that’s true, the share of the adult population working will shrink to levels we haven’t seen since, well maybe forever, and certainly in modern times. At the same time, they’re assuming record-low growth in productivity, probably around 1.5%, which is something like a third below the long-term average, and well below the rate clocked in the much maligned 1970s.
These assumptions are very similar to those underlying projections that the Social Security system will go broke. But if the economy grows at something closer to its long-term average, then that won’t happen. And the massive growth in debt won’t happen either, because the government will collect more in taxes than it would if we were locked in a semipermanent slump.
So what’s going on here? Is the CBO pushing these strange projections to promote an austerity agenda—cutting social spending and privatizing Social Security? Or are they really serious that a seventy-year near-depression awaits us? Inquiring minds want to know.
Jonesing for a slump
The Bullet reprints the lead piece from LBO #128: “Jonesing for a slump: austerity in the face of weakness”
Annoying autoresponse
I emailed Random House publicity to see if I could set something up with Gary Shteyngart, who sounds pretty interesting. This is the autoresponse I got:
Thanks for your email. Please make certain that in all future emails you include the name of the book and author in your subject line. If you are listing requests, please do not send in an attachment, but in the body of the email. It is also important that you include all of your contact information, including your email address, in the body of your email. Only emails that pertain to *publicity* questions about *current* Random House Adult Trade, Villard, Random House Trade Paperbacks and Modern Library books will be responded to. Also, we do not ship books internationally; please contact the book’s publisher in your country for a review copy. If you have an inquiry for a different department or imprint, please contact them directly. This mailbox receives hundreds of emails with questions for other departments or imprints and unfortunately we just don’t have enough staff or time to redirect them all; thanks very much for your understanding! Lastly please note that as stated on our website, Random House does not accept unsolicited submissions. If you are uncertain as to what Random House imprint the book you seek is from, try referring to http://www.amazon.com and looking at the book’s listed information. Please see below for email addresses of other imprints, or visit our website at http://www.randomhouse.com/about/contact.html for more contact information. The Ballantine Publishing Group bfi@randomhouse.com Bantam Dell Books bdpublicity@randomhouse.com Crown Publishing Group crownpublicity@randomhouse.com Knopf knopfpublicity@randomhouse.com Pantheon/Schocken pantheonpublicity@randomhouse.com Random House Audio Publishing Group audio@randomhouse.com Random House Reference and Information Publishing referencepublicity@randomhouse.com Vintage Books and Anchor Books vintageanchorpublicity@randomhouse.com
And they don’t even sign it “Love.”
LBO 128 out
LBO #128—just emailed to electronic subscribers, and on press for the print audience.
Contents:
•Austerity in the face of weakness
•Andy Stern, stocks, and Social Security
•the energy picture: how the U.S. stacks up (badly), and how we’re doing on renewables (badly)
• The Nation moves its money
• localism in Portland
If you don’t already subscribe, please do: LBO subscription info. Paid subscriptions help keep the free stuff (this, radio show) going.
Radio commentary, July 15, 2010
burstlet fades
It’s now becoming quite obvious that the burst of strength in the first quarter of the year has given way to something much less yeasty. The rate of job growth has slowed dramatically, and the retail sales report released earlier in the week revealed that Americans just haven’t been spending money in the last few months with the vigor they showed in the winter and early spring. I’m not at all surprised by this development—this is what recoveries from financial crises look like. And the Federal Reserve has now come around to believing that the economy’s slowing down. That hasn’t stopped some of its more hawkish elements from advocating for an interest rate increase. But I don’t think they’re going to get their way anytime soon.
Dodd-Frank
[This was written before Goldman got fined, as the FT couldn’t resist calling it in a headline, an amount equal to five days trading revenues and had to admit to nothing of consequence. It’s stunning how little the greatest financial crisis and worst recession in 80 years has changed things.]
So the Senate passed the financial regulation bill on Thursday afternoon, sending it along to the White House for the president’s signature. It would be an exaggeration to call it nothing, but it would also be an exaggeration to call it a major transformation of the financial landscape.
The bill (text here)is named after Connecticut Senator Christopher Dodd, whose state is home to a good deal of the hedge fund industry, and Massachusetts Representative Barney Frank, whose state is home to a number of large mutual fund and money management firms. While Dodd–Frank will change the way Wall Street does business to some extent, bankers headed off the biggest threats, and security analysts estimate that the hit to profits will be less than 10%. Banks will be required to boost their capital—though this is part of a broader international effort coordinated through the Bank for International Settlements. One point: the capital requirements mandated (capital in this sense meaning a wad of hard cash that isn’t borrowed and therefore is free to tap into in a crisis) in this bill are in the range possessed by Lehman Bros. before it went under. So clearly that’s not much of a guarantee of anything.
Some other features. Banks will be forced to stop trading on their own account (the so-called Volcker Rule, named after former Fed chair Paul Volcker), and will also be required to spin off part of their derivatives business into separately capitalized subsidiaries. These moves put something of a firewall between those dangerous activities and a federal safety net. But regulators will have to devise specific rules based on the legislation, an activity in which bank lobbyists will no doubt figure prominently. And the rules won’t go into full effect for four to five years. The hodge-podge of regulators—the Fed, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Comptroller of the Currency, just to name a few—will be left largely intact, though they will be encouraged to consult more closely. That is less than Bush’s Treasury Secretary Henry Paulson wanted to do: in a Treasury paper issued late in his term, Paulson proposed creating a single overarching regulatory authority. Insurance will still be regulated at the state, and not the federal, level—a rare thing among the “advanced” countries, and a guarantee that regulation will continue to be fragmented and weak.
Bank regulators will be given the power to wind down large, system-threatening institutions before they go under instead of during or after their failure. But a $19 billion levy on the banks to prepay the costs of such resolutions was dropped—the same day that the House killed an effort to extend unemployment benefits, amidst the worst outbreak of long-term unemployment since the 1930s. Dropped as well was Obama’s original proposal for an independent and powerful consumer financial protection agency; instead, a new body will be created inside the Fed, an institution not previously known for its attentiveness in protecting consumers from hungry bankers. The original consumer agency was one of the few “progressive” elements in the Obama administration’s original finreg proposal—but they never fought hard for it, and so it was easily killed by industry lobbyists.
comforting anxious capital
Soon after the House passed the bill the other week, Treasury Secretary Timothy Geithner went on Lawrence Kudlow’s TV show to correct the perception, common in the so-called business community, that the administration is anti-business. The choice of outlet is interesting: Kudlow, a former Reagan administration budget official, is a militant supply sider and all-around right-winger with a one-dimensional worldview. Geithner appealed to that dimensional singularity by assuring Kudlow and his CNBC audience that the administration plans to keep a lid on the favorable tax treatment of capital gains and dividends, and emphasizing that “this president understands deeply that governments don’t create jobs, businesses create jobs.” The administration has a “pro-growth agenda,” which is a phrase that Kudlow loves to use himself. But despite all these efforts to placate capital, capital remains fairly hostile to the administration and its modest regulatory efforts—which will, no doubt, prompt further efforts by Obama & Co. to placate business, efforts that will never satisfy, and will so have to be repeated. And repeated.
LBO News from Doug Henwood 
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Posted on August 22, 2010 by Doug Henwood
Radio commentary, August 21, 2010
[Since today’s show was unusually filled with material —a rerun of the Diane Ravitch interview that first ran last April—I kept the introductory comments short. But I did want to get this on the record, for people who think I’m something of a happy-talker.]
Evidence of an economic slowdown continues to roll in. First-time claims for unemployment insurance, filed by people who’ve just lost their jobs, have been creeping up for the last few weeks after falling for most of the year. It’s quite possible that the weak job gains of the last few months—they were weak, but at least they were gains—could turn back into losses this month or next. That would be very bad news, both as a measure of the state of that abstraction we call the economy and for the human beings involved. Unemployment causes not only impoverishment, but depression (the mental as well as the economic kind), anxiety, sickness, and—no exaggeration—early death. But our leaders are more interested in how we can balance the budget by cutting Social Security—Obama has said he’s open to “modest adjustments” to “strengthen” it, which way of saying “cuts”—than a jobs program.
And the portents for the future are looking worse, too. The weekly leading index from the Economic Cycles Research Institute, designed to forecast changes in the broad economy three to six months out, has been trending downwards since April and is now at a point where a second leg of recession is looking like a real possibility. I’ve been saying for the last few months that we were in a weak recovery that would feel to many people like we were still in recession; we may now be on the verge of something worse.
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