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Welcome to the oligarchy

Michael Hudson on replacing economic democracy with financial oligarchy:

As my friend Marshall Auerback quipped in response to this speech, its message is familiar enough as a description of what is happening in the United States: “This is the Republican answer in Michigan. Take over the cities in crisis run by disfavored minorities, remove their democratically elected governments from power, and use extraordinary powers to mandate austerity.” In other words, no room for any agency like that advocated by Elizabeth Warren is to exist in the EU. That is not the kind of idealistic integration toward which Mr. Trichet and the ECB aim. He is leading toward what the closing credits of the film “Z” put on the screen: The things banned by the junta include: “peace movements, strikes, labor unions, long hair on men, The Beatles, other modern and popular music (‘la musique populaire’), Sophocles, Leo Tolstoy, Aeschylus, writing that Socrates was homosexual, Eugène Ionesco, Jean-Paul Sartre, Anton Chekhov, Harold Pinter, Edward Albee, Mark Twain, Samuel Beckett, the bar association, sociology, international encyclopedias, free press, and new math. Also banned is the letter Z, which was used as a symbolic reminder that Grigoris Lambrakis and by extension the spirit of resistance lives (zi = ‘he (Lambrakis) lives’).”[6]

As the Wall Street Journal accurately summarized the political thrust of Mr. Trichet’s speech, “if a bailed-out country isn’t delivering on its fiscal-adjustment program, then a ‘second stage’ could be required, which could possibly involve ‘giving euro-area authorities a much deeper and authoritative say in the formation of the county’s economic policies …’”[7] Eurozone authorities – specifically, their financial institutions, not democratic institutions aimed at protecting labor and consumers, raising living standards and so forth – “could have ‘the right to veto some national economic-policy decisions’ under such a regime. In particular, a veto could apply for ‘major fiscal spending items and elements essential for the country’s competitiveness.’ Paraphrasing Mr. Trichet’s lugubrious query, “In this union of tomorrow … would it be too bold in the economic field … to envisage a ministry of finance for the union?” the article noted that “Such a ministry wouldn’t necessarily have a large federal budget but would be involved in surveillance and issuing vetoes, and would represent the currency bloc at international financial institutions.”

My own memory is that socialist idealism after World War II was world-weary in seeing nation states as the instruments for military warfare. This pacifist ideology came to overshadow the original socialist ideology of the late 19th century, which sought to reform governments to take law-making power, taxing power and property itself out of the hands of the classes who had possessed it ever since the Viking invasions of Europe had established feudal privilege, absentee landownership and financial control of trading monopolies and, increasingly, the banking privilege of money creation.

My UMKC colleague, Prof. Bill Black commented recently in the UMKC economics blog: “One of the great paradoxes is that the periphery’s generally left-wing governments adopted so enthusiastically the ECB’s ultra-right wing economic nostrums – austerity is an appropriate response to a great recession. … Why left-wing parties embrace the advice of the ultra-right wing economists whose anti-regulatory dogmas helped cause the crisis is one of the great mysteries of life. Their policies are self-destructive to the economy and suicidal politically.”[8]

Greece and Ireland have become the litmus test for whether economies will be sacrificed in attempts to pay debts that cannot be paid. An interregnum is threatened during which the road to default and permanent austerity will carve out more and more land and public enterprises from the public domain, divert more and more consumer income to pay debt service and taxes for governments to pay bondholders, and more business income to pay the bankers.

If this is not war, what is?

And if this is war, even pacifists are entitled to self-defense.

The media

Of course they only cover the negative court rulings on the Affordable Care Act. It’s the narrative they’ve already written. Is it a surprise to anyone that the vast majority of “journalists” are lazy suck-ups to power?

Oh look

A stealth Social Security cut!

Changing the inflation calculation for Social Security benefits from CPI to chained CPI is a benefit cut by stealth.  Using the low inflation number would result in slightly smaller Social Security benefits every year. While the cuts would take place in small yearly increments the cumulative effect would be that over a seniors lifetime they would get tens of thousand less from Social Security (PDF).

I ain’t a-marchin’ anymore

Phil Ochs:


What Athenae said.

The negotiator

I think Ed misses the point, which is that this carefully-bipartisan massive slashing of government spending and entitlements is what Obama had in mind in the first place. Because while the man may be a tool, he is not a fool:

Let’s recap the Barack Obama school of governing and negotiation. First, you get the Republicans to admit that it’s totally unthinkable and utterly insane to let the government default. Second, agree that 50% of the problem – the entire revenue side – is off the table. Third, let the GOP beat concession after concession out of you by bluffing about default. Fourth, get “concessions” from the GOP – in this case, I’ll bet you $100 on Obama obtaining “defense cuts” that amount to snipping a few staplers and pencils from the Pentagon budget – that hand the Republicans a ready-made “He’s a-cuttin’ the Army while our brave men and women are in harm’s way!!” talking point. Fifth, go to the electorate in 2012 with the message that sure, I and the rest of the Democrats signed off on hacking up Social Security and Medicare, but, um, the Republicans wanted to cut them a little more than we ultimately allowed. That sounds like a winner, right? The Mighty Democrats fought bravely to make sure that your benefit cuts would be slightly smaller.

Good luck with that, idiot. This presidency has been like watching a man commit suicide for three years. At first you’re in a frenzy yelling “Stop! Don’t do that to yourself!” but after a while you just want him to hurry up and get it the hell over with already.

Suck it up

I was talking to a woman from the neighborhood last night – not dumb, just not educated or polished. She said to me, “What do you think is going to happen to our country? I keep wondering when somebody’s going to start setting things on fire, or start shooting at politicians. Because it can’t go on like this. People are hurting.”

This is where I have a problem with political elites, who see political problems as strategic puzzles. They’re sheltered, buffered, cocooned — whatever you want to call it. Maybe they’re just plain blind, or prone to wishful thinking. They have no visceral understanding of how bad it is out here, and how openly ordinary people – people who don’t even follow politics, for the most part – now talk of revolution.

Our cities are a pile of dry kindling, and sooner or later, there will be a match. And then, gated communities become the target zones. What, you think your $15-an-hour security guard will lay his life on the line for you because you tip him at Christmas? Dream on. Sooner or later, there will be a reckoning. People will take sides and it won’t be yours, Mrs. and Mrs. Exploiter.

I was thinking of that when I read Ian Welsh this morning.


Tom “The Mustache of Understanding” Friedman on the Middle East.

The cost of war

Wake up, Pennsylvania

The GOP-dominated PA state house approved their new budget last night, and thanks to a lot of tricky last-minute amendments and no public input, it looks like a right wing wish list — with Gov. Tom “I’m Owned by The Gas Industry” Corbett as Santa Claus. About the only bright spot in this mess is that a last-minute push for school vouchers failed — but Corbett says he’ll bring it back in the next session. The other highlight is that the budget displaces many, many costs to the local municipalities under the guise of “preventing” tax increases:

Corbett got most of what he wanted – deep spending cuts, no new taxes on natural gas or anything else – but only after his administration pushed through a last-minute Senate measure to shift control of billions in welfare funding from the legislature to his administration.

His welfare secretary said budget needs necessitated the change. “We have a savings target to meet, and we can’t wait months and months to do it,” Gary Alexander told The Inquirer Wednesday night.

But the measure set off alarms among advocates for the poor, who portrayed it as a power grab by the executive branch that would shred the safety net for hundreds of thousands of people – most of them women and children – who depend on government assistance.

Richard Weishaupt, a lawyer with Community Legal Services in Philadelphia, said past administrations had been given temporary authority over a narrow range of welfare services, but nothing so sweeping as what the Corbett administration is seeking.
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