Archive for May, 2010

Today is the day we remember U.S. soldiers who died in military service. Since that number now includes 4400 soldiers who are victims of the war for oil in Iraq, we should also remember the 100,000 or so civilians who have died since the 2003 invasion.

We should also not forget the nonmilitary workers who have recently been murdered in the other capitalist adventures for fossil fuels—such as the 11 workers who died in BP’s Deepwater Horizon explosion, and the 29 workers who never made it out of Massey’s Upper Big Branch mine.

While Narayana Kocherlakota [pdf] laments the absence in 2008 of a macroeconomic playbook explaining how to respond to the economic crises, Brad DeLong [ht: nk] counters that orthodox macroeconomics has had a playbook that was first drafted 185 years ago.

Here’s Kocherlakota:

I believe that during the last financial crisis, macroeconomists (and I include myself among them) failed the country, and indeed the world. In September 2008, central bankers were in desperate need of a playbook that offered a systematic plan of attack to deal with fast evolving circumstances. Macroeconomics should have been able to provide that playbook. It could not. Of course, from a longer view, macroeconomists let policymakers down much earlier, because they did not provide policymakers with rules to avoid the circumstances that led to the global financial meltdown.

And DeLong:

That Narayana Kocherlakota and company did not know it existed–that he and his circle had never studied Kindleberger and Minsky, let alone Fisher and Bagehot and Mill, and knew Keynes and Hicks only as straw men to be ritually denounced as sources of error rather than smart people to be listened to–will doubtless appear to future generations as an interesting episode in the history of political economy. But nobody should confuse the failure of Kocherlakota’s branch of macroeconomics with the failure of macroeconomics in general.

For Kocherlakota, it’s all about adding computing power, market frictions, and external shocks to a “modern” macroeconomics based on Say’s Law. DeLong explains that, in order for a “general glut” to exist, it’s necessary to give up Say’s Law, understand the dynamics of a monetary economy, and allow the monetary and fiscal authorities to expand the supply of safe assets and expand government expenditures. Both Kocherlakota and DeLong have shown that, voilà, the rabbit can be pulled out of the hat!

While the two sides of the orthodox debate now have playbooks that admit the possibility of crises, neither is willing to connect that possibility to the dynamics of a specifically capitalist economy. In other words, neither wants to admit that an economy based on a capitalist exploitation inevitably creates the conditions of crisis. That, of course, would require a radically different playbook.

The U.S. national men’s team may do well at the upcoming World Cup finals. But the fact that they’re still an underdog is a testament to the strange class structure of U.S. football (or, if you prefer, soccer) that makes it different from the way the sport is organized in most other nations.

Consider the following: The women’s team has garnered many more international trophies (e.g., at the World Cup and the Olympics) than the men’s. The traditional sports media barely cover U.S. football, let alone the international game (although that seems to be changing, bit by bit). The game is played more widely (by girls and boys, in both urban and suburban areas, by whites and ethnic and racial minorities) and watched by more people (in the stadiums and on TV) than one would guess from the lack of media coverage (by white, male sports commentators). And there is no real farm system (as in other countries, with club academies and a proliferation of lower leagues) apart from colleges.

What this means, as Harry Browne explains, is that U.S. football is a much more white, middle-class and upper-class, suburban affair than in other countries. Such as France (where the national team is famously made up of North African immigrants and sons of immigrants). And Brazil (where many players are born in the favelas). And England (where it remains a sport of working-class players although, as I discovered at a match at Fulham’s Craven Cottage, of well-heeled fans).

That’s why the U.S. national team may, indeed, do well in South Africa—but only by beating all class expectations.

The big rip-off

Posted: 31 May 2010 in Uncategorized
Tags: , ,

I’ve just finished reading Michael Lewis’s The Big Short, aka “The Big Rip-off.” Lewis’s book is not the story of the financial crisis as it is commonly understood (the failure of Lehman Brothers, the global meltdown, TARP, etc.), but the story of the few investors (like Steve Eisman and Mike Burry) who saw through the great financial rip-off (of unregulated financial instruments) and made a tidy profit on shorting the system (of packaged and repackaged subprime mortgage derivatives and of insurance contracts) that was designed to rip us all off.

The new rip-off is what Lewis calls “shorting reform“:

Anyone who has seen my various web sites in recent years knows I’m a big fan of Banksy’s work—and of public/street art more generally.

Now, Banksy has a film, Exit Through the Gift Shop, which Ben Davis thinks is a poison valentine to the street art movement.

I haven’t seen the film yet (given my relative isolation on the mountain) but it wouldn’t surprise me if, in fact, Banksy uses his film to ask questions about the so-called street art movement. What counts as street art? (I changed the designation on this blog from graffiti to public art awhile back.) Has street art just become a form of global marketing—for commodities or for the artists themselves? (The pieces I have chosen for this site tend to have a “critical” edge, especially about economic issues.)

Gallery art focuses, ultimately, on selling status symbols to rich people, but for this very reason it tends to maintain a certain distance from corporate design. Street art is hostile to established commercial art channels, but has been altogether more comfortable moving in and out of mass commercial culture.

But, in my understanding of modern art history, there’s no artistic movement that has maintained a purely aesthetic sensibility separate from “the market” or, more generally, capitalist forms of economic organization. (I’d also argue the reverse: there’s no capitalism separate from notions of aesthetic value.)

The more interesting question is, does public/street art create, in the art itself, a notion of value distinct from capitalist value? Is there a sense in which public/street art represents something like the gift and therefore a critique of capitalist notions of value? I’ll have to see if Banksy poses a question like that when I finally have the opportunity to see his film. . .

It’s not just that the making of legislative sausage is enough to turn one’s stomach. It’s also that the sausage being made is inedible.

Matt Taibbi, in his inimitable fashion, explains how the Senate leadership gutted most of the real attempts at finance reform. The only real reform that made it through the Senate (although it will probably be watered down in conference) was the Bernie Sanders amendment to audit the Fed. Everything else—breaking up banks that grow Too Big to Fail, requiring banks to pay up front for their own bailouts, an independent consumer protection agency, and forcing the derivatives market into the light of day—were either voted down or qualified by the introduction of so many loopholes as to be rendered meaningless.

Here’s Taibbi on the weakening of the Consumer Finance Protection Bureau:

The CFPB was always a pretty good bet to pass in some form. Just as pushing through anything that could plausibly be called “health care reform” was a political priority for the Obama administration, creating a new agency with the words “consumer protection” in the title was destined from the start to be the signature effort of the finance bill, which is otherwise mostly a mishmash of highly technical new regulations. But that didn’t stop leading Democrats from doing what they could to chisel away at the thing. Throughout the process, Chris Dodd, the influential chairman of the Senate Banking Committee, has set new standards for reptilian disingenuousness – playing the role of stern banker-buster while taking millions in Wall Street contributions. Dodd worked overtime trying to craft a “bipartisan” bill with the Republican minority – in particular with Sen. Richard Shelby, the ranking Republican on the committee. With his dyed hair, porcine trunk and fleshy, powdery-white face, Shelby recalls an elderly sumo wrestler in drag. I happened to be in the Senate on the day that Shelby proposed a substitute amendment that would have stuffed the CFPB into the FDIC, effectively scaling back its power and independence. Throughout the debate, I was struck by the way that Dodd and his huge black caterpillar eyebrows kept crossing the aisle to whisper in Shelby’s ear. During these huddles, Dodd would gently pat Shelby’s back or hold his arm; it was like watching a love scene in a Japanese monster movie.

In the end, Wall Street, and their friends in the Senate and the Obama administration, will get the financial reform legislation they can live with—which means the same financial institutions that brought the world economy to its knees will win the war.

Picnic in Israel

Posted: 27 May 2010 in Uncategorized
Tags: , ,

For those of us in New England, the unseasonably warm weather makes it perfect picnic weather. Neve Gordon explains that, in Israel, picnics, like much else, are political events.

This past Saturday I also went on a picnic with my family, but in stark opposition to most Israeli picnics it tried to enact a remembering by exposing the continued domination and expulsion of Palestinians. We joined a group of Jews and Palestinians from Ta’ayush in the south Hebron desert to break bread together and bid farewell to Ezra Nawi, who the following day began serving a jail sentence for resisting Israel’s occupation.

We chose this spot because almost a decade ago the Palestinian cave dwellers who lived there were expelled from their ancestral land by Jewish settlers from Susya; these settlers were supported by the Israeli government, military and courts. Nawi and other Ta’ayush activists have, over the years, aided the expelled Palestinians to return to the last swathe of land they can still call their own.

Here’s the trailer for Citizen Nawi: