Agenda-setting
I’ve complained before about all the attention that the angry liberals—Air America, Keith Olbermann, The Huffington Posties, etc.—are paying to the nutters on the right, and I’m going to do it again. Not only does this obsession absolve them of developing and selling an agenda, and put them in the position of being mouthpieces for a centrist, business-friendly administration—it reinforces the role of Glenn Beck as an agenda-setter. Just as Olbermann can’t let go of Cheney, Obama’s clearly still in the discursive grip of Reagan.
I’m no fan of economic crises as offering opportunities for political transformation—they could as easily, maybe more easily, break to the right as to the left, and they cause lots of suffering—but I had hoped that the near-meltdown of the financial system might lead to new ways of seeing, thinking, talking. Not yet.
Fresh audio
September 10 show, with:
Max Blumenthal, author of Republican Gomorrah, on the takeover of the GOP by the fundie nuts • Michael Yates, author of In and Out of the Working Class, on the working class, teaching economics, and the UFW (see his LBO piece on César Chávez here)
now posted in my radio archives. Opening commentary at here.
Liveblogging BHO
I’m be doing my first-ever “liveblogging” tonight. I’ll be punditizing for the Institute for Public Accuracy: here.
Delusions on the left
So it’s looking like the buzz around the Internet left is that Van Jones’s ouster is all about race. No doubt that’s part of the story—but does anyone really think the reaction from the right would have been much different had Obama appointed a white ex-Maoist to the job? For God’s sake, the right thinks cap and trade, the most conservative approach to the carbon crisis you could imagine, is a socialist plot to expropriate property, just like Obama’s scheme to subsidize the health insurance industry (aka “reform”) is socialized medicine.
Obama will keep ceding ground to them, because he wants to run a capital-friendly regime, but it will never be enough. At what point will people stop blaming things like the failure of white green organizations to fight a racist attack and start admitting to Obama’s loyalty to the deep structure of American capitalism?
The right is often nutty, delusionally so, but they also have a set of principles that they really believe in and they fight tirelessly for them. Yes, their hatred of Obama is partly fueled by race, but it’s also of a piece with the history of the American right. Hofstadter, in The Paranoid Style, quotes a woman as lamenting on Eisenhower’s re-election, “Four more years of socialism.” The teabaggers and town hallers are the same thing, 53 years later.
Now accepting apologies
Ha, so Van Jones is out (“White House Adviser on ‘Green Jobs’ Resigns”).
All you people who said I was being too “cynical” in my reading (“Obamamania, a febrile disease”) of Obamamania during the campaign: I’ll be holding an at home today and tomorrow to accept apologies. Line forms just outside the door.
PS: Why did they appoint him in the first place? Did they not get just how relentlessly nasty—and principled, actually—the right-wing is? Did they think they’d be reasonable about the appointment of a former Maoist, even one who’s been running at a blazing speed from that past?
Radio commentary, September 5, 2009
[No, it’s not time travel. The commentary I read on WBAI on Thursday, September 3, came out before the August employment report. I added an analysis of that for the KPFA version, included here, to be broadcast on the morning of September 5.]
If you watch MSNBC, which I do most nights (before switching to Fox, because it’s so much more energetic and perversely entertaining), you’ll hear that the Republicans are unfairly demonizing a president with a fundamentally popular agenda. Uh, not exactly. Obama’s slide in the polls is actually one for the record books.
He started with a pretty high standing. Since Eisenhower, the average first-term president enjoyed a 58% approval rating in the Gallup poll. Obama’s was 8 points higher than average, 66%. George W. Bush was also at 66% as his term started. Those are among the highest figures for first-term presidents in modern history. Eisenhower was at 74%, and LBJ at 71%. But Reagan and Bush Sr were both at 51%, 7 points below average, and 15 points below where Obama started.
In the latest Gallup poll, Obama’s approval rating is down to 54%, a decline of 12 points. The average for first-term presidents is a gain of 5 points. Losses of Obama’s magnitude but him in company I’m guessing he’d rather not be in: George W had taken a 10-point hit just before Semptember 11—though his approval rating soared after that unfortunate day. Jimmy Carter took a 12-point hit in his first nine months in office. But Nixon, Kennedy, and Reagan all gained 7 to 9 points. Bill Clinton offers a more cheering precedent for Obama—though he started with an approval rating 11 points below Obama’s, he fell by almost as much during his first nine months in office, and left office as one of the most popular presidents in the history of polling.
So what’s this all mean? Though Obama’s lost a few points among Democrats, especially moderate and conservative ones, most of his erosion comes from Republicans and Independents—despite all his efforts to woo them. This suggests a few things. One is that it makes little political sense to try to win over people who are disposed to hate you. And two is that liberals are a bunch of credulous suckers. At some point, they will join those to their right in jumping ship—maybe as soon as next week, once Obama ditches the public option in his health care reform scheme. And then, maybe, politics could get more interesting.
Speaking of health care reforms, we’ve heard a lot from the Sarah Palin/Betsy McCaughey right about how ObamaCare would create death panels who’d pull the plug on grandma. Though there’s a lot to hate about the health care reform schemes, the death panel thing is a complete invention of the loony right, which either can’t tell true from false, or is happy just to make stuff up if it suits their purposes.
The other day, the California Nurses Association, a vigorous supporter of a single-payer, Canadian style system, put out an interesting study of actually existing death panels: the practices of private insurers. They found that more than one in every five requests for medical claims filed by insured patients are rejected by California’s largest private insurers. They looked at seven years of data, 31 million claims, and found that 21% were rejected, despite being for procedures ordered by licensed physicians. Some companies rejected 30–40% of claims submitted. These weren’t frivolous rejections. People died because of them. But since they’re done by private insurers, and not some phantasmic public body, Sarah and Betsy aren’t fulminating about them.
And now, a special update for the KPFA and podcast audiences. Friday morning brought the release of the August U.S. employment report. It was a mixed bag. The unemployment rate took a surprisingly strong leap, but the rate of job loss continued to slow.
Before proceeding, a technical note. The monthly employment statistics come from two separate surveys, one of employers, also known as the establishment or payroll survey, and another of households. The sample size on the establishment survey is huge—around 300,000 employers. The household sample is much smaller, 60,000 households, but that’s still 50 times as large as a typical opinion poll. Both provide pretty good estimates done in a very timely manner, but they’re not perfect—and given the smaller size of its sample, the household survey is noisier (meaning it bounces around some from month to month).
The establishment survey reported a loss of 216,000 jobs in August, a number that would normally look terrible, but is actually the smallest loss in a year. The private sector lost 198,000 jobs, also the smallest number in a year, and well below the -477,000 average for the previous six months. Construction lost 65,000—but this time, residential building wasn’t in the lead. Losses in residential construction are slowing, suggesting that while housing—an important leading indicator for the broad economy—isn’t yet turning around, the bleeding has largely been stanched. And more than a third of industrial sectors actually added jobs in August, the most in nearly a year. Normally, a third would be a terrible number, but we’ve been down so long that terrible is starting to look up to me.
Some wit or other labeled this a “mancession,” because so many more men than women have been losing jobs. (The term has really caught on: Google turns up 49,500 hits on the word.) One sign of this is that the share of women workers in the establishment survey was 49.9% in July (the sex breakdown is available only with a month’s delay). Given the recent trend, it’s likely that it hit 50.0% in August – or, if not exactly, it will in September. When the recession began, not quite 49% of workers in the payroll survey were women. Of course, this is a long-term trend – when the Bureau of Labor Statistics first started the gender breakdown in 1964, just 32% of workers were women – but it looked for a while, in the late 1990s and early 2000s, that the female share of the workforce had plateaued. But the recent disemployment of men has changed that, to the point where the workforce is almost perfectly divided between men and women (though, of course, women are more likely than men to work part-time, and to earn considerably less money: some things haven’t changed).
But the household survey was rather discouraging. The share of the unjailed adult population working fell 0.2 point to 59.2%, its lowest level since early 1984. It’s down more than 5 points since its peak in 2000. In other words, when you adjust for population growth, almost all the employment gains of the 1980s and 1990s have been reversed.
The unemployment rate rose 0.3 point to 9.7%, a surprise given the behavior of other indicators, like the weekly jobless claims numbers that I often cite here. The broader U-6 rate, which includes those working part-time because that’s all they could find and discouraged workers, who’ve given up the job search as hopeless, rose 0.5 point to 16.8%. In line with the recession’s continuing pattern, most of the rise in unemployment came from permanent job losers (as opposed to those on temporary layoff, or those quitting voluntarily, or those just entering or re-entering the workforce). Over the last year, the number of unemployed is up 5.4 million; 4.4 million of those are permanent job losers.
Although there were some encouraging signs in the report, they’re mostly of the less bad rather than the actively good variety. Forward-looking components like temp and retail employment suggest we’re in for more of the same (that is, more less bad but not yet good) for some time to come, even if GDP growth turns up in the next quarter or two.
And the longer-term picture remains horrible. Total job losses in the recession are now almost 7 million, or 5.0% of total employment. (That’s the worst percentage loss of any recession since the post-World War II demobilization.) According to an IMF study, job losses in recessions caused by financial crises average 6.3%, suggesting that we’ve got another 1.7 million jobs to lose. Since we’re about 80% of the way to the average, the best you could say is that the edge of the woods is coming into view.
Ciao, public option
So it’s looking like Obama’s not only dropping the public option, he may be using the rejection as a way of distancing himself from the “left.” As Politico reports:
On health care, Obama’s willingness to forgo the public option is sure to anger his party’s liberal base. But some administration officials welcome a showdown with liberal lawmakers if they argue they would rather have no health care law than an incremental one. The confrontation would allow Obama to show he is willing to stare down his own party to get things done.
It’s all about “choice and competition,” you see. Forget about the experience of all those funny foreign countries!
PS: When’s the last time a Republican “stare[d] down his own party to get things done”?
Tongue-tied liberals
Every passing day reveals the toxic side-effects of the Obama presidency more clearly. The activist liberal left has largely either gone silent or cast itself in the role of apologist for power.
Let’s look at two sad examples. First, the war in Afghanistan. The other day, the New York Times reported that the antiwar movement plans a nationwide campaign this fall against the administration’s escalation of the war in what we’re now calling AfPak. Among the challenges facing the campaign, aside from the usual public indifference when it’s mostly other people being killed, is that “many liberals continue to support Mr. Obama, or at least are hesitant about openly criticizing him,” in the words of the reporter, James Dao.
Armed with a magnifying glass, Dao spied some signs of a growing disenchantment among liberals with their Pentagon- and Wall Street-friendly president. But such disenchantment has its limits, at least for now. Ilyse Hogue, a mouthpiece for MoveOn.org, disclosed that “There is not the passion around Afghanistan that we saw around Iraq. But there are questions.” How’s that for boldness? Questions.
Robert Greenwald, most famous for his anti-Wal-Mart movie, is now doing a documentary called Rethink Afghanistan, which is being released serially on YouTube and the like. Greenwald says his approach is “less incendiary” than the Wal-Mart film. “We lost funding from liberals who didn’t want to criticize Obama,” says Greenwald. “It’s been lonely out there.” Well-off liberals are entirely comfortable blasting Wal-Mart, which is vulgar and largely Republican. But don’t be too bold in criticizing—I mean questioning—our president, who is an elegant Democrat.
And then there’s health care. The Internet and the liberal weeklies are full of defenses of ObamaCare against the slurs of the right. Now there’s no denying that some of those slurs are truly demented concoctions. And there’s no doubt that Obama’s harshest critics on the right are racists, xenophobes, and mouth-breathing reactionaries who move their lips when they read. No doubt. They’re now the major source of Keith Olbermann’s nightly material.
But you’d be hard pressed to find a liberal who could actually explain the substance of the health care proposals, or even tries to. They’re presumed to be good, just because they come from “our” guy and they’re wrapped in expansive rhetoric that effectively disguises their corporate-friendly content.
And the quality of much of the opposition has only deepened the liberals’ defensive ardor. A few weeks ago, I heard someone I love and respect, an otherwise sophisticated and thoughtful person, say that “we” have to support the scheme just because “they” oppose it. Professional journalists, who should know how to scrutinize the content, typically do little better. So we’re condemned to dueling caricatures, and our health care system will continue to suck enormously.
Inbox contradictions
Within minutes of each other this morning, I got two emails on the state of the world economy.
One, from In Defense of Marxism (such is the political scene that even Marxists are on the defensive—doesn’t anyone even dream of revolution anymore?), The Unfolding Capitalist Crisis – a nightmare for workers everywhere. Its nut graf: “[I]n many ways the present crisis is potentially even more serious than that of 1929-33. Its scope is much wider than the thirties and its impact has been far swifter.”
And, from a completely different perspective, this from Wall Street’s favorite economist, Ed Hyman of ISI: “Unprecedented synchronized global upturn…. To an unprecedented extent economies are recovering across the world at the same time.”
Which is it? My guess is somewhere in between. Hyman’s upturn is a bounce off a sharp decline, while Marxists.com’s analysis consists heavily of anxious quotes from bourgeois pundits uttered during that sharp decline, from December 2008 to June 2009. Average the two and you get a long period of a crappy global economy.
Radio commentary, August 27, 2009
Not all that much to say. The economy continues to stumble along, not really declining, but not really improving either. First-time claims for unemployment insurance fell by 10,000 last week, but remain quite elevated. On a graph, the picture is of a distinct improvement during spring and early summer, followed by a stall. The number of people continuing to draw benefits fell by 119,000 the week before (the continuing claims numbers are always a week behind the initial claims figures), but they too remain quite elevated, and are only in the mildest of improving trends. And some of that decline may be the result of the unemployed running out their benefits rather than getting new jobs.
In other labor market news, last week, the Bureau of Labor Statistics issued its quarterly report on gross job flows. The familiar monthly employment numbers are the rather placid-seeming net results of massive turbulence—literally millions of jobs created less millions of jobs destroyed every month. Unfortunately these numbers are only available with an eight-month delay, so we’re only just learning what happened at the end of 2008. Still, the story is pretty compelling. In the last three months of 2008, there 6.7 million jobs created in the private sector (a combination of existing employers expanding and new ones sprouting up), and 8.5 million jobs destroyed (through layoffs and business failures), for a net change of -1.8 million. In percentage terms, the net change was the worst since the series began in 1992. But it wasn’t the gross losses that set a record—the end-2008 figure was well below the damage done in the third quarter of 2001. The real outlier was the weakness in gross gains, which set a new low by a comfortable margin, capping a two-year downtrend. Employers never went on anything like the 1990s hiring spree during the recent expansion—and now they’re not hiring at all.
Compared with the early 1990s recession, job losses in this downturn have come more from contracting establishments than from outright closures. That may help explain the recent strength in the productivity numbers—which is amazing. Employers are laying off workers and forcing the remaining staff to work twice has hard. In the bloodless world of numbers, that appears as an acceleration in productivity. To use the old language, it’s an increase in the rate of exploitation.
That’s been very good for profits. On Thursday morning, the Bureau of Economic Analysis reported strong corporate profits figures for the second quarter of this year. That’s a remarkable performance in such a deep recession. And what profits damage occurred last year was mostly in the financial sector—which now looks to be recovering. In fact, the scuttlebutt on Wall Street is that the big banks are making scads of money, but they’re going to try to hide it through accounting tricks so as not to attract bad publicity.
It’s amazing that despite the severity of this recession, almost nothing has changed in the broad economic or political structure, or in popular or elite consciousness. Which makes me wonder if this is really all over, or just the eye of the storm.
Fresh audio
Just posted: my August 27 radio show.
Ned Sublette, author of The Year Before the Flood and The World That Made New Orleans, on that city, its culture and music, and the aftermath of Katrina (plus the radio premiere of his song, “Between Piety and Desire”) • Adolph Reed on the dismal state of the left and the waning usefulness of “race” as a category
Get your LBO sample here
Article from LBO #119 freshly posted to the web: Americans: sick, poor, undereducated, overworked, smug. Or, “How American awfulness stacks up.” A review of the OECD’s latest Social Indicators, showing just how bad off the USA is compared with most other rich countries in a host of important ways.
We post samples from LBO to the web for free consumption—but only a few, and with a delay. If you like what you see, subscribe.
LBO News from Doug Henwood 
10 Comments
Posted on September 13, 2009 by Doug Henwood
Radio commentary, September 10, 2009
Thursday morning brought the release of the annual income, poverty, and health insurance numbers from the Census Bureau for 2008. As you might have guessed, the first year of the recession was pretty bad news for just about everyone. Median household income—the income right at the middle of the income distribution, with half of all households having higher incomes, and half lower—fell by 3.6%, the biggest yearly decline since these figures begin in 1967. All racial and ethnic groups took a hit: non-Hispanic whites were off 2.6%; blacks, off 2.8%; Asians, 4.4%; and so-called Hispanics, by 5.6%. Households of all ages lost income in 2008, with the exception of the over-65 set, who are protected by the cost of living increases in Social Security.
A few points. The one-year hit to incomes in 2008 is on a par with the multiyear hits taken in earlier recessions. For example, the 3.6% decline last year is larger than the decline we saw in the recession and weak recovery years of 1999 to 2002—three years of damage then more than condensed into one year of damage last year. And 2008 was only the beginning of the recession. Job losses didn’t accelerate, and unemployment didn’t really spike, until the fall of last year. The Economic Policy Institute estimates that this year’s decline is likely to be larger, in the 4.5–5.0% range. If anything like that happens, the total decline of over 8% will be the biggest recession hit to income since these numbers began 42 years ago. That’s coming after the weakest expansion in modern history. Gains during the 2001–7 expansion weren’t enough to reverse the declines of the previous recession years—the first time that’s happened ever. So before this recession is over—and I mean that not in the formal sense, but in the sense of how average people experience the economy, measured by the job market and household income—average incomes are likely to be 10% below where they were in 1999.
But not so the rich. A technical note before proceeding: these Census figures are derived from a survey of households. Because rich people don’t answer such surveys, and because there are so few of them that it’d be hard to find enough of them to take a meaningful sample, these annual reports miss things at the very high end. But you can get that from tax return data, which is available only with a delay of several years. The economists Thomas Piketty and Emmanuel Saez do just that, and their 2007 numbers were recently published. So while the bottom 90% of the population saw its income decline between 1999 and 2007, the richest 1% gained about 7%. The richest 0.01%, about 30,000 people, saw their income rise by 25%.
Not surprisingly, the poverty rate rose to 13.2% in 2008, from 12.7% in 2007. That’s the highest level since 1997; the Economic Policy Institute estimates that it will rise another 1.5 points this year to 14.7%, which would be the highest since 1992. For whites, the poverty rate was 11.2%; for blacks, 24.7%, more than twice as high. Among Latinos, it was 23.2%.
But some definitions are in order. Official poverty is defined as a pretax income under a specified amount that varies by family size; for a family of four, the line is just about $22,000 a year. This is a very undemanding standard; more honest definitions of poverty would set the line closer to $30,000, which would raise the poverty rate to around 20% or more.
And these figures are just snapshots of a given year. According to the Census Bureau, over the four year period ending in 2007, almost a third—31%—of Americans had at least one period in official poverty lasting two months or more. For a very rich country, we have a lot of poor people, and they are often very poor.
Finally, the number of people without health insurance rose by about 600,000 to 46.3 million. Measured as a share of the population, however, the uninsured remained at a constant 15.4%. But that means without insurance for the entire year; many more had bouts of uninsurance. And again, since the economy of 2009 was worse than 2008’s, the current levels are probably a lot higher—EPI estimates that it’s probably up by 5 million this year.
But apparently that’s not the way the Obama administration wants to count the uninsured. According to a very useful piece by Politico’s Carrie Brudoff Brown on what Obama said in Wednesday night’s health reform speech vs. what he actually meant, the administration says there are only 30 million uninsured, more than 16 million below the Census Bureau’s count. Where’d they go? Well about 10 million are undocumented immigrants, so they’re not worth talking about. Another 5–7 million are people who could go on Medicaid, but have not, for god knows what reason. Presto, 30 million. That’s a nice way to lower the bar, isn’t it?
And what a disappointing speech. Well, no, I can’t say that exactly, since I hadn’t expected much, but it’s terrible policy. The core of it is to require all of us to buy health insurance from private companies—with a $3,800 penalty if we don’t, according to Max Baucus’s proposal. Subsidies will be available for people with incomes of up to $66,000 (or $88,000, depending on which of the four bills floating around you read), but it will still be quite a burden for a lot of us. So instead of getting rid of the insurance companies, and their diabolical profits, executive bonuses, claims denials, and administrative overhead, the president will be delivering them ten of millions of new customers. This will do nothing to reduce costs.
And what about that public option? Well, as Brown’s Politico.com article reports, the insurance companies said they’d accept reforms requiring them to accept everyone, pre-existing conditions or no, only if the gov forced us all to become their customers. And the so-called public option, a government-run insurance company, would have to pay its way without any public subsidies, meaning that its premiums would probably be on a par with, or only slightly lower than, private insurers.
A friend pointed out to me the other day that the market capitalization—the value of all the outstanding stock—of the publicly traded health insurers is about $150 billion. Add a little premium to sweeten the pot and you could nationalize the lot of them for about $200 billion. The total administrative costs of the U.S. healthcare system, which are greatly inflated by all the paperwork and second-guessing of docs’ decisions generated by the insurance industry, are about $400 billion a year. Those administrative costs are about three times what a Canadian-style single payer system would cost. So that means we’d save about $250 billion a year by eliminating the waste caused by our private insurance system.
In other words, the nationalization could pay for itself in well under a year. But we can’t do that. It’d be Canadian or something.
Meanwhile, we’re hearing from a lot of Democrats/liberals/progressives/whatevers that we have to support health care reform, without much discussion of what’s actually in the proposal(s). ACORN, suffering from its own embarrassments, circulated an email last Thursday urging all of us to call our Senators and tell them to “stand up” to the insurance companies. Stand up for is more like it. Ilyse Hogue, spokestool for MoveOn.org, said in her Facebook status update just after Obama’s speech: “Finally, the president I elected.” What, the corporate-friendly one? That’s probably not what she meant, of course. Columnist David Sirota characterized Obama’s speech as sounding like it was delivered by President Rahm Emanuel. Well, no, it was delivered by President Barack Obama. It’s always the advisors, never the king, isn’t it?
Clearly we haven’t escaped the discursive grip of Ronald Reagan. Obama’s speech evoked the magic of the marketplace, in its fantasy of competition leading to cost control. And he concluded the address with a “God bless America,” a convention now that was introduced to modern American speechifying by Reagan.
Sure, many of these left-of-center supporters, who otherwise should know better, are inspired by the hideousness of so many of the president’s enemies, a gang of racist and ignorant cretins. But you’ve got to hand it to the right. They fight tirelessly for their beliefs, however nutty they can be. They don’t begin a struggle by pre-emptively compromising. I wish I could say the same for “our” side, whatever that is.
Share this: