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Archive for July 14th, 2008

McCain Tosses Gramm

Posted in Main Blog (All Posts) on July 14th, 2008 4:40 am by HL

McCain Tosses Gramm
Time reports that Sen. John McCain has cut ties with former Sen. Phil Gramm (R-TX) and that he is no longer getting economic advice from him. 

The Pragmatic Pol
In a must-read piece, Ryan Lizza takes a look at the presumptive Democratic presidential nominee’s political rise and notes that “perhaps the greatest misconception about Barack Obama is that he is some sort of anti-establishment revolutionary. Rather, every stage of his political career has been marked by an eagerness to accommodate himself to existing institutions rather than tear them down or replace them.”

Obama “campaigns on reforming a broken political process, yet he has always played politics by the rules as they exist, not as he would like them to exist. He runs as an outsider, but he has succeeded by mastering the inside game.”

There Was a Class War. The Rich Won It.

Posted in Main Blog (All Posts) on July 14th, 2008 4:39 am by HL

There Was a Class War. The Rich Won It.
What happens if there’s a class war and only one side bothers to show up and fight it? That’s what happened over the last thirty years. There was a class war, and the rich won. Period. It’s over.

Real 1982 goods producing wage earner hourly wage

Real 1982 goods producing wage earner hourly wage

What happens if there’s a class war and only one side bothers to show up and fight it? That’s what happened over the last thirty years. There was a class war, and the rich won. Period. It’s over, they kicked our knees out from under us, put on their steel toed boots and spent the last thirty years telling us that they were going to trickle on us and we’re going to like it and beg for more.

Seems like hyperbole? It’s just the numbers. The top left shows the manufacturing wage earner’s hourly wages. Not “family income” which includes both of you going to work, but hourly wages. The only reason it’s goods producing is they go back longer, but other charts show the same pattern.

So, if you’re an ordinary slob, you haven’t had a raise in over 30 years. In fact, your real wage peaked over 30 years ago and it’s never recovered.

This would be ok if the US hadn’t been getting richer, getting more productive, ever since then, but I’m sure you won’t be surprised to hear that, well, actually, productivity and whatnot has kept going up. Yet somehow wages didn’t.

Damon Silvers, whom we can thank for the wages and productivity chart, thinks it has a lot to do with a hostile anti-union environment and with the simultaneous decline of progressive taxation. I’d say he’s got a big part of the picture though not all. The key part that he has right is simply that deliberate government policy meant an end to wage increases. Those deliberate government policies benefited the rich greatly, and the people in Washington and New York who made most of the decisions were very close to the people who benefited the most.

The main problem was this: real consumption of stuff that requires energy, specifically oil, could not be allowed to increase faster than the combination of oil supply increases and efficiency increases (we now produce twice the real GDP/barrel of oil we did in the 70s). If it did, not only do you get real widespread inflation, but you risk losing control over the price of oil.

We are now, of course, seeing what happens when you lose control over the price of oil.

The second big problem was that the oilarchies who were getting a lot of money with the new, higher price of oil, were not consumer societies and the money they were gaining was not being spread around. Rather it was pooling in the hands of a few nobles, chiefs and robbers and those folks needed something to spend that money on. Despite what some might think, trashing hotel rooms, doing blow and buying hookers can only use up a small amount of money, at least when you’re really really stinking rich.

In short, rich oilarchs were sitting on a pile of money and they wanted to buy things with it. Western things. Western… companies. There were two obvious ways to deal with that. You could put on some form of ownership controls, whether formal or informal, or you could make your rich rich enough to compete with their rich by inflating the value of the paper assets that they were competing over. In Europe they mostly chose to just say “no, you can’t buy that.” American elites were smarter though, they realized that this was a chance to become stinking rich.  If our rich people were rich enough, they could bid up the price of companies and assets so the oilarchs couldn’t snap them up.

So they made themselves rich. They reduced taxation on themselves in a number of ways, they broke union power, they got rid of old New Deal laws that had stopped speculation from getting too bubblicious and they went on a bubble spree – shoving money into various different asset classes, driving them into the stratosphere, taking the profits and then letting the taxpayer eat the loss. They took as much public infrastructure private as they could and they did so for cents on the dollar. They imported manufactured goods from the east to keep goods inflation down and they exported jobs to low cost domiciles to keep wage push inflation down.

They also ran, in most periods, very tight dollar policies, so that there were fewer dollars around than the rest of the world needed. Needing dollars badly, people had to sell to the US cheap. And since everyone from outside the US wanted in on whatever the bubble of the day was, they kept giving the US real stuff (oil, goods) for pieces of paper. Those pieces of paper represented something real, at the end of the day: they represented the future. But the future always seems a long way off until suddenly it’s today.

It was a death bet. And back in the late 70’s and late 80’s it was a good bet. Heck, it was even a good bet for many over the last ten years. If you expect to be dead before the bill arrives, who cares how big the bill is? Tim Russert just won that bet. Reagan won that bet. Jesse Helms won that bet. It was a good bet for a lot of powerful men (and a few powerful women) in their late forties or older.

But some people lose death bets, and most people reading this today will lose this bet. You had your chance to die, now you’re going to get to live and pay. I suppose it’s better than the alternative, but I don’t imagine you’re going to enjoy it much.

So look at the last chart and remember: there was a class war. Most Americans never even showed up for it. And the rich won. Now they’re going to try and keep and expand their gains. As Naomi Klein has pointed out at great length, when things go wrong, it’s very easy to sell people snake oil, to take advantage of their fear and their despair.

Roosevelt told the American people not to fear. That there was nothing to fear but fear. Elsewhere other leaders whipped their people into fear and after fear, into fear driven aggression and hatred.

Even in lesser crises leaders will appear who offer to solve the problem without telling you how. In the eighties Americans turned from Jimmy Carter, with his negativity and his call to solve fundamental problems in fundamental ways to Reagan, promising “morning in America”. And let’s be honest: Reagan sort of fixed the problems. His fix, in one form or another, lasted almost twenty years, till kid Bush broke it. Sure it wasn’t a permanent fix, and sure it was fixed on the back of the middle and working classes and the cost was not having things like healthcare, the offshoring of huge numbers of jobs and so on. But gas prices went down. Interest rates went down. Inflation was tamed. Suburbs sprouted like weeds. Reagan delivered.

And the rich won their class war.

Reagan was working with a strong America. A fundamentally healthy America. He could afford to run the place down, because it was still in good repair, the baby Boomers were still young and so on. The cost of Reagan’s fix was that for over 30 years ordinary people haven’t had a raise.

The next such “fix” won’t leave wages even, it will, in real terms, halve them.

Could Miami’s “Little Havana” Turn To Obama?

Posted in Main Blog (All Posts) on July 14th, 2008 4:38 am by HL

Could Miami’s “Little Havana” Turn To Obama?

Miami's large Cuban population, often referred to as “Little Havana” has always been predominantly Republican. Sunday's New York Times Magazine has a five page article questioning whether Cuban support in Miami might shift and vote Democratic in November. Primarily it examines some Democratic challenges to traditionally Republican House seats in Florida, But it also touches on the Presidential election.

Backstage, something very new is happening. Call it the Miami Spring, or Cuban-American glasnost. This community that has clung for decades to its certainties — about the island itself, about the role the exile community would play after the Castro brothers passed from the scene, about where Cuban-Americans should situate themselves in terms of U.S. domestic politics — is in ferment. This matters not only in terms of the destiny of the Cuban-American community itself but also in terms of the 2008 elections since, despite claims made on background by some of Barack Obama’s advisers, Florida is likely to play a pivotal role in determining whether Obama or John McCain becomes president, and the Cuban-American vote is likely to play its usual outsize role in deciding which candidate prevails in the state.

The Times recounts Obama's May speech in Miami seeking the Cuban vote. The Times reports:[More…]

Whether Obama really expected to make inroads into the Cuban-American vote with the speech is questionable. When Hillary Clinton was still in the race, she was far more circumspect, even if, off the record, her aides expressed views not that dissimilar from those of the liberal Cuban-Americans whom Obama was echoing. But that the presumptive Democratic nominee would think the speech worth making at all, in a community where he is the subject of a great deal of mistrust and hostility and in a state where he is not polling well against Senator McCain, exemplifies the change that is taking place in the Cuban-American community.

But, is it a change that translate into votes? The Cuban exile community remains fiscally conservative. That bodes well for McCain. And the younger generation is, according to a few sources, apolitical.

Regarding the 300,000 or more people who have come from Cuba to the United States in the past 10 years, Rivera presented a subtle picture. “Anecdotally,” he told me, “it’s not that the post-1994 generation is pro-Castro, but instead that they think politics ruined their lives in Cuba, and so they are deeply apolitical. Whatever my Democratic friends may be telling themselves, whatever Raul [Martinez] and Joe [Garcia] may be hoping, they’re not ready to be energized politically.” There is little doubt that antipolitics is the strongest form of politics among these recent arrivals. Unlike earlier generations of exiles, most are not mourning the non-Communist Cuba that was and might have been. For them, Communism is a fact of life from childhood, not something alien — however much most may detest the regime and be glad to have made their way to the U.S. And while most would probably say they value the freedoms of the United States, there is little doubt that many, if not most, left for economic and family reasons.

One thing about Obama, he doesn't hesitate to go after voting blocks that are difficult for him to win over, whether it be evangelicals or Cubans. I just hope he makes the same concerted outreach to rural, working class voters. There are so many more of them and it's their votes in November that could be the deciding factor in whether we get a Democractic or Republican president.

US Terms

Posted in Main Blog (All Posts) on July 14th, 2008 4:37 am by HL

US Terms
Those restive Iraqis:

The failure of months of negotiations over the more detailed accord — blamed on both the Iraqi refusal to accept U.S. terms and the complexity of the task — deals a blow to the Bush administration’s plans to leave in place a formal military architecture in Iraq that could last for years.

And what where those “U.S. terms”?  Oh, right, it’s the Bush Rule Of Law.

The most contentious unresolved issue is the legal immunity of U.S. troops and Defense Department personnel from Iraqi prosecution for any alleged crime. “We’re trying to come onto the same page,” a second U.S. official close to the negotiations said. “But with U.S. forces in potential combat situations, we have some real bottom lines.
“But even on that question, it’s one thing on immunity if in the Iraqi mind it’s an agreement for U.S. troops forever,” he said. “It’s another thing if these immunity arrangements are temporary because U.S. forces are temporary.”

No accountability, no responsibility, no rules, no laws.

Deep Thought
Shouting “n****r” is ok as long as you mean it ironically.

Is the Global Oil Crunch a Myth?

Posted in Main Blog (All Posts) on July 14th, 2008 4:36 am by HL

Is the Global Oil Crunch a Myth?
Bush and his allies want the focus to be on OPEC, not the instability his foreign policy has wrought.

Africa: The Next Victim in Our Quest for Cheap Oil
The new book Curse of the Black Gold shows how Nigeria may be the epicenter of the full-blown resource wars to come.

Getting Rolled By Obama Is A Wake-Up Call for the Uprising

Posted in Main Blog (All Posts) on July 14th, 2008 4:35 am by HL

Getting Rolled By Obama Is A Wake-Up Call for the Uprising
One of the topics I discussed with Diane Rehm yesterday on her nationwide NPR show was the FISA fight, which Nathan Newman just referenced. I suggested that the effort by Netroots activists to use Obama’s own website as a…

Best China-Cuba Oil Line Yet

Posted in Main Blog (All Posts) on July 14th, 2008 4:34 am by HL

Best China-Cuba Oil Line Yet
Former Rep. Melissa Hart (R-PA), who’s running to get her seat back this year, concedes that China wasn’t drilling offshore Florida in Cuban waters when she repeated the GOP’s favorite myth of 2008 a few weeks ago — but they…

Politico chief comments on ‘surprise’

Posted in Main Blog (All Posts) on July 14th, 2008 4:33 am by HL

Politico chief comments on ‘surprise’
Politico chief comments on ‘surprise’

‘Muslim Obama’ magazine cover irks campaign
‘Muslim Obama’ magazine cover irks campaign

Schwarzenegger Confirms Link Between Global Warming And Wildfires, Hits Bush For Not Believing The Science

Posted in Main Blog (All Posts) on July 14th, 2008 4:32 am by HL

Schwarzenegger Confirms Link Between Global Warming And Wildfires, Hits Bush For Not Believing The Science
On Friday, the Bush administration “rejected its own experts’ conclusion that global warming poses a threat to the public welfare, launching a comment period that will delay action to reduce greenhouse gas emissions at least until the next president takes office.” As the Wonk Room’s Brad Johnson notes, EPA Administrator Stephen Johnson “attack[ed] the clear […]

On Friday, the Bush administration “rejected its own experts’ conclusion that global warming poses a threat to the public welfare, launching a comment period that will delay action to reduce greenhouse gas emissions at least until the next president takes office.” As the Wonk Room’s Brad Johnson notes, EPA Administrator Stephen Johnson “attack[ed] the clear and present threat of global warming” and dismissed it as a “‘complex’ issue that hinges on ‘interpretation of statutory terms.’”

The decision was quickly denounced by environmental experts, EPA staffers, and even a member of President Bush’s own party — California Gov. Arnold Schwarzenegger. In an interview this morning with ABC’s George Stephanopoulos, Schwarzenegger laments that the Bush administration “did not believe in global warming.” He adds that even if officials had done something on Friday, he would have thought it “bogus anyway…because you don’t change global warming and you don’t really have an effect by doing something six months before you leave office“:

[I]t just really means basically this administration did not believe in global warming, or they did not believe that they should do anything about it since China is not doing anything about it and since India is not willing to do the same thing, so why should we do the same thing.

But that’s not how we put a man on the moon. We did not say let everyone else do the same thing, then we will do it. We said we want to be the pioneers, we want to be out there in front. … I think we have a good opportunity to do the same thing, also, with fighting global warming.

As the Wonk Room’s Brad Johnson has explained, Schwarzenegger also confirmed that he believes the strong wildfires in California are partially a result of global warming. Watch it:

Schwarzenegger has repeatedly tried to call the Bush administration on its abysmal global warming record, exposing weak measures officials try to tout as groundbreaking. In April, Bush called for a “national goal” to halt the growth of U.S. carbon emissions by 2025. But as Schwarzenegger told PBS, “For him to say we should start really reducing greenhouse gases by the year 2025, by that time we’ll have no more glacier left.”

Transcript: (more…)

Israel Smiles, Iran Growls

Posted in Main Blog (All Posts) on July 14th, 2008 4:28 am by HL

Israel Smiles, Iran Growls
Jim Hoagland, Washington Post