Archive for December, 2009
Only Brad Delong, the economist with the prehensile tail, sees the world in terms of “smart” and “stupid.” (OK, he’s not the only one but the arrogance expressed in his blog postings does put him near the top of the group of generally derisive and dismissive mainstream economists.)
His 30 December list includes a reference to David Harvey’s “Organizing for the Anti-Capitalist Transition” as the “STUPIDEST THING I’VE SEEN TODAY.” While I certainly don’t agree with everything Harvey writes, in this posting or elsewhere, his ideas cannot be so easily dismissed.
So, what is it with Delong—that he disagrees with Harvey’s argument (which certainly doesn’t make Harvey stupid) or it’s just plain old red-baiting (hence the phrase, stupid is as stupid does)?
According to Bloomberg, 2009 was a banner year for anti-union activity on the part of Target, Michaels, and other corporations.
Companies have added anti-union videos to training programs, required employees to sit through anti-union meetings and hired outside labor-relations consultants as a pre-emptive strike against a union organizing campaign.
The best parts of the article are, of course, the quotes from the corporations themselves:
“The whole culture that currently allows us to be a low- cost producer while paying top wages would probably be destroyed” by the legislation, Craig Milum, president of Milum Textile Services, a Phoenix-based linen supplier, said in an interview.
CVS Caremark’s policy is to “communicate with our employees on an ongoing basis on a variety of issues,” Carolyn Castel, a spokeswoman for the biggest U.S. drugstore chain, said in an e-mailed statement.
“We are constantly engaging our co-workers about unions,” said Mona Liss, a spokeswoman for Ikea, the world’s biggest home-furnishings retailer.
2009 is shaping up to have been the year in which the War on Unions was added to the War on Terror.
We could have had real healthcare reform: universal coverage by distributing the surplus created by and appropriated from workers. Instead, we’ll have—at least according to the Senate vote—a plan that strengthens capitalism, by increasing the profits of private insurers as well as the profits of all corporations that will need to pay less to hire workers.
That’s what Bob Herbert understands in his critique of the “middle-class tax time bomb ticking in the Senate’s version of President Obama’s effort to reform health care.”
The problem is in the financing, the 40-percent excise tax on so-called Cadillac health plans.
The dirty little secret behind this onerous tax is that no one expects very many people to pay it. The idea is that rather than fork over 40 percent in taxes on the amount by which policies exceed the threshold, employers (and individuals who purchase health insurance on their own) will have little choice but to ratchet down the quality of their health plans.These lower-value plans would have higher out-of-pocket costs, thus increasing the very things that are so maddening to so many policyholders right now: higher and higher co-payments, soaring deductibles and so forth. Some of the benefits of higher-end policies can be expected in many cases to go by the boards: dental and vision care, for example, and expensive mental health coverage.
This means corporations will have to pay less to get access to labor power (thus increasing their profits) and workers will pay more to get access to decent health care (thus lowering their real wages).
“In the real world, companies cut costs and they pocket the money,” said Larry Cohen, president of the Communications Workers of America and a leader of the opposition to the tax. “Executives tell the shareholders: ‘Hey, higher profits without any revenue growth. Great!’ ”
Clearly, this is not health care reform you can believe in.
You know people have tried to put me off as being crazy. Sometimes it’s to your advantage for people to think you’re crazy.
Simon Johnson reviews Andrew Ross Sorkin’s Too Big To Fail and two related books, Duff McDonald’s biography of Jamie Dimon (Last Man Standing), and Peter Goodman’s broader retrospective on the political origins and social impact of the crisis (Past Due).
Here’s his conclusion:
The most significant result of the financial crisis is the emergence of six large banks that are undoubtedly too big to fail and therefore enjoy a strengthened government guarantee; Goldman, JPMorgan, Citigroup, Bank of America, Wells Fargo and Morgan Stanley are the beneficiaries of the doom loop. The most significant non-result is the fact that no comprehensive legislation has yet been passed to reform the financial sector. Without really serious reform, we have every reason to start counting down to the next financial crisis, and to the next fleet of Mercedes lining up before the New York Fed.
The fact is, this is one of the key threads of U.S. political economy since at least the late-nineteenth century: the existence of financial institutions that are allowed to grow and suck up a larger and larger share of the surplus, with friends in Washington (both Republican and Democrat) and the discipline of economics (both conservative and liberal), and then creating the conditions for a crash. At that point, there’s a hew and cry for reform, which the financial sector manages to evade and undermine, until the next crash. Each and every time, both a tragedy and a farce.
Just to prove the point, here’s a photo from a press conference held on 3 June 2003—just about the time subprime lending was starting to go wild—to announce a new initiative aimed at reducing the regulatory burden on banks. Representatives of four of the five government agencies responsible for financial supervision (Jim McLaughlin of the American Bankers Association, Harry Doherty of America’s Community Bankers, FDIC Vice Chairman John Reich, and Ken Guenther of the Independent Community Bankers of America) used tree shears to attack a stack of paper representing bank regulations. The fifth representative, James Gilleran of the Office of Thrift Supervision, wielded a chainsaw.