Archive for February, 2014

greed

Yesterday in our class on A Tale of Two Depressions, we discussed Robert McElvaine’s notion of “moral economy” (which he introduces in chapter 9 of his book, The Great Depression: America, 1929-1941). The idea is that, during the first Great Depression, Americans were engaged in an intense debate between different moral economies (which McElvaine characterizes as the difference between the “cooperative individualism” of workers and the “acquisitive individualism” of businesspeople).

As I explained to students, all economic theories—for example, neoclassical, Keynesian, and Marxian theories—represent moral economies. And they arrive at very different conclusions concerning the justice or fairness of capitalism. Thus, for example, neoclassical economists argue that everyone gets what they deserve and, through the workings of the invisible hand, the result will be full employment. In contrast, Keynesian economics is based on the proposition that, while everyone may get what they deserve (with the possible exception of coupon-clippers), it’s quite possible that will result in less-then-full-employment equilibrium, which then requires the visible hand of government intervention. Marxian economists propose a third possibility: even if everyone gets what they deserve in markets, in production things are different (because of exploitation)—and the consequence, whether there’s an invisible or visible hand, is inequality and instability. In other words, the three economic theories represent radically different moral economies.

One student then invoked the idea of moral economy and blamed greed for causing the current crisis. I responded by making the distinction between individual greed and economic institutions, which like the different notions of fairness among economic theories leads to quite different solutions: throw the greedy bankers in jail (which of course we haven’t done) or change the economic institutions (which we haven’t done either).

Chris Dillow makes a similar distinction between “greedy bankers” and “overly powerful bankers.” His view is that “the habit of over-emphasizing individuals’ traits and under-emphasizing situational forces” leads us to “to moralize inequality; the rich are rich because they are greedy whilst the poor are poor because they are lazy.”

What this effaces is the fact that inequalities in capitalism are instead the result of inequalities of power – a power which rests in part upon ideology. Moralizing inequality tends to blind us to this fact. It creates the illusion that capitalism would be acceptable if only those at the top were better people, when in fact the faults in capitalism are structural and not due to the flaws of passing individuals.

That’s pretty much the same distinction I was trying to make, although I still want to characterize the two explanations as different moral economies: one is a moral economy of flawed individuals, while the other is a moral economy of flawed institutions.*

 

*Although I’m willing to admit I’m sympathetic to Dillow’s view for another reason: because he invokes my favorite football club and blames Crystal Palace fans (who greeted Wayne Rooney with chants of “you fat greedy bastard”) for committing the error of “blaming Rooney’s salary upon his personal character rather than upon his situation.”

 

coprorate-welfare

As a society, we cut food stamps and extended unemployment insurance compensation but, according to Good Jobs First, we extend enormous amounts of welfare to corporate behemoths.

Even then, as David Kay Johnston explains, those numbers do not include many other forms of subsidies to American business.

For example, Good Jobs First does not count federal subsidies. It also leaves out indirect subsidies like perpetual monopoly rights of way for pipelines as well as rules that limit competition in pharmaceuticals, telecommunications and a host of other industries.

Paco de Lucia RIP

Posted: 26 February 2014 in Uncategorized
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I own many of Paco de Lucia‘s albums and had the privilege of twice hearing him play in concert. He was both an accomplished flamenco guitarist (as above) and an innovative jazz musician (as below).

 

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Special mention

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Map of the day

Posted: 25 February 2014 in Uncategorized
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As Niraj Chokshi and David Beard report,

Before the recession smashed the record, long-term unemployment peaked at 26 percent thirty years ago. But in 2013 it was higher than that in 41 states and D.C. It’s highest in D.C., New Jersey and Florida, where more than 45 percent of the jobless are long-term unemployed (i.e. unable to find work after about six months of looking).

Only in America

Posted: 25 February 2014 in Uncategorized
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Rex Tillerson, CEO of ExxonMobil, has been SCREWED.

As Rebecca Leber [ht: sm] reports,

As ExxonMobil’s CEO, it’s Rex Tillerson’s job to promote the hydraulic fracturing enabling the recent oil and gas boom, and fight regulatory oversight. The oil company is the biggest natural gas producer in the U.S., relying on the controversial drilling technology to extract it.

The exception is when Tillerson’s $5 million property value might be harmed. Tillerson has joined a lawsuit that cites fracking’s consequences in order to block the construction of a 160-foot water tower next to his and his wife’s Texas home.

Meanwhile, Lisa Song, Jim Morris, and David Hasemyer report that air emissions from oil and gas development in Texas, especially in the Eagle Ford Shale area, are creating a natural and human disaster. Among their findings:

  • Texas’ air monitoring system is so flawed that the state knows almost nothing about the extent of the pollution in the Eagle Ford. Only five permanent air monitors are installed in the 20,000-square-mile region, and all are at the fringes of the shale play, far from the heavy drilling areas where emissions are highest.
  • Thousands of oil and gas facilities, including six of the nine production sites near the Buehrings’ house, are allowed to self-audit their emissions without reporting them to the state. The Texas Commission on Environmental Quality (TCEQ), which regulates most air emissions, doesn’t even know some of these facilities exist. An internal agency document acknowledges that the rule allowing this practice “[c]annot be proven to be protective.”
  • Companies that break the law are rarely fined. Of the 284 oil and gas industry-related complaints filed with the TCEQ by Eagle Ford residents between Jan. 1, 2010, and Nov. 19, 2013, only two resulted in fines despite 164 documented violations. The largest was just $14,250. (Pending enforcement actions could lead to six more fines).
  • The Texas legislature has cut the TCEQ’s budget by a third since the Eagle Ford boom began, from $555 million in 2008 to $372 million in 2014. At the same time, the amount allocated for air monitoring equipment dropped from $1.2 million to $579,000.
  • The Eagle Ford boom is feeding an ominous trend: A 100 percent statewide increase in unplanned, toxic air releases associated with oil and gas production since 2009. Known as emission events, these releases are usually caused by human error or faulty equipment.
  • Residents of the mostly rural Eagle Ford counties are at a disadvantage even in Texas, because they haven’t been given air quality protections, such as more permanent monitors, provided to the wealthier, more suburban Barnett Shale region near Dallas-Fort Worth.

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Special mention

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