Archive for April, 2020

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We can almost calculate the moment when the unemployed losing patience will take their own fate into their own hands.

Friedrich Engels

This morning, the U.S. Department of Labor (pdf) reported that, during the week ending last Saturday, another 3.84 million American workers filed initial claims for unemployment compensation. That’s on top of 4.43 million workers who are laid off during the week ending on 18 April, 5.24 million workers during the week ending 11 April, 6.62 million workers during the week ending 4 April, 6.87 million workers during the week ending 28 March, and another 3.31 million in the previous week.

All told, more than 30 million American workers have filed initial unemployment claims during the past six weeks.

To put that into some kind of perspective, I calculated the initial claims totals for two other relevant 6-week periods: the worst point of the Second Great Depression (encompassing the weeks ending on 28 February, 7, 14, 21, and 28 March, and 4 April 2009) and the weeks immediately preceding the current depression (so, 8, 15, 22, and 29 February and 7 and 14 March 2020).

As readers can see in the chart above, the difference is stunning: 3.94 million workers filed initial claims during the worst 6-week period of 2009, 1.35 million from mid-February to mid-March of this year, and 26.45 million in the past six weeks.

Once again, keep in mind, the most recent numbers still don’t include perhaps millions of other American workers, since many states (such as Florida) are still addressing backlogs of claims. Masses of workers have been unsuccessful in applying for unemployment insurance because state websites are freezing and their phones are inundated with inquiries.

Moreover, because they’re only initial claims, the numbers also don’t include the 7.1 million American workers who were deemed officially unemployed in early March, before most of the shutdowns started.

Add them together, and the number of workers currently unemployed in the United States is now close to 37 million.* That would mean an American unemployment rate of something on the order of 22.4 percent, which week by week is getting close to the level (estimated to have been about 25 percent) last seen in the first Great Depression and more than double the highest rate (10 percent) experienced during the Second Great Depression.**

 

*At the highest of levels of unemployment following the 2007-08 crash, there were 15.3 million jobless Americans.

**We should also remember that, on average (since 1994), the U6 unemployment rate (which includes so-called discouraged workers and those working part-time for economic reasons) is 1.8 times the official (U3) unemployment rate. Thus, for example, the U6 unemployment rate was 17.1 percent in October 2009, when the official rate was 10 percent. Right now, we don’t have a good measure of the number of workers who either haven’t been able to file for unemployment or whose hours have been cut, forcing them to work part-time. There is no doubt, however, that the number of currently unemployed or underemployed workers is much higher than 37 million.

In 2011, the Business Insider Australia put together a gallery of photos from the Second Great Depression. Their justification was that, “In 50 years, when historians write about this period. . .it will be photos like these that tell the story.”

Their idea was to assemble a collection that would serve the same purpose as the iconic photos of the first Great Depression (many of them having been carefully staged, edited, and cropped), which tell a particular story of that time and the people who fell victim to its widespread, dramatic, and devastating economic and social crises.

I decided to do the same for the current economic depression—even though, I fully understand, it’s far from being over. Actually, I started out by musing about the bread lines in the 1930s in comparison to the long lines outside food banks in recent weeks. Later, the idea expanded and I ended up with the following fifteen photos.

Clearly, these do not rise to the level of many of the photos from the first Great Depression, by such famous photographers as Dorothea Lange, Walker Evans, and Marion Post Wolcott. They’re all, with one exception (by Tom Barrett, the tenth one in the sequence, in Milwaukee), copied from online news media.

But together they do tell a story of these times. . .

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G.E. employees and their families protest outside of Appliance Park in Louisville, KY

Cars line up in the parking lot at a drive-through food pantry at Woodland Mall in Grand Rapids, MI

A food bank at the Open Door Church of God in Christ in Brooklyn, NY

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Amazon employees hold a protest over conditions at the company’s distribution facility on Staten Island, NY

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Hew Kowalewski, a furloughed employee of Disney World, stands next to a window of his home in Kissimmee, FL

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People who lost their jobs wait in line to file for unemployment benefits at an Arkansas Workforce Center in Fayetteville

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Cashiers at a grocery store in Brooklyn, NY

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A worker carries Amazon boxes in New York City

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A tired healthcare worker is seen by the Brooklyn Hospital Center

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Downer Theatre in Milwaukee, WI

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34th Street in New York City

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Passengers on the 24 Divisadero bus in San Francisco, CA

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Central American migrants seeking asylum return to Mexico over the border bridge between El Paso and Ciudad Juarez

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A pedestrian walks past graffiti that reads “Rent Strike” in Seattle’s Capitol Hill neighborhood

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Milwaukee resident Jennifer Taff holds a sign as she waits in line to vote at Washington High School in Milwaukee, WI

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Ah, the things we end up doing during the lockdown. . .

I stumbled upon this video while searching for something else on my computer yesterday. It’s a talk I gave, “The New Reading of Marx’s Capital,” at the Lattelecom International Conference on New Strategies in the New World Order in Riga on 13 October 2011. So, because it may have some contemporary relevance, I decided to upload it and share it with readers.

Anyone who is interested can download the Powerpoint presentation I used by clicking on this link.

That I know of, there are only five other Youtube videos in which I appear (from 2000, 2003, 2012, 2016, and 2019).

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While we keep hearing the catchphrase “We’re all in this together,” most of us know we’re not.

Not in terms of the novel coronavirus pandemic. And even less in terms of the economic crisis caused by the response to the pandemic.

Just consider the lines that have formed. The lines of workers who are being subject to dangerous conditions while they commute to and labor in “essential” services and production; the lines of other workers who have been furloughed or laid off, who are waiting for their claims to be processed; the lines of the poor and needy waiting outside food pantries—their lives and livelihoods were precarious even before the pandemic. And now they’re even worse.

As it turns out, to judge from a survey conducted by Harris Poll and Lehigh University (pdf) in early April, the vast majority of Americans are well aware that something needs to be done to address the obscene levels of inequality in the United States. In response to the question “how important is it that the U.S. government commit to reducing economic inequality (i.e., the unequal distribution of income and opportunity between different groups) in this country within the next year?” 78 percent consider it to be somewhat or very important, while only 22 percent think it’s not very or not at all important. And those numbers are pretty consistent across different groups: gender, age, region, income, education, and so forth.

What that means is that the terms of the current debate—stay at home or reopen the economy, bail out corporations or states, and so on—miss the point entirely. What the vast majority of Americans want is for their government to commit itself to reducing the grotesque levels of economic inequality that preceded the pandemic, which have been highlighted by and only gotten more obscene during the current economic crisis.

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Three and a half weeks ago, Bernie Sanders became the last challenger to drop out of the race, thus clearing the way for Joe Biden to become the Democratic nominee on the November presidential ballot.

Since then, the novel coronavirus has engulfed the country (and, of course, the world), the U.S. economy has mostly come to a standstill, and tens of million American workers have joined the ranks of the unemployed, while “essential” workers are forced to commute to and labor in perilous conditions and jobless families have found it necessary to walk or take to their cars to wait in line by the thousands outside food banks.

Biden therefore has to find a way of presenting a progressive alternative to Trump by articulating some clear ideas, and perhaps eventually a detailed plan, to confront the most dramatic economic and social crises to face the United States since the first Great Depression.

Given the fact that Biden was the first choice of the conservative Democratic establishment, which breathed a sigh of relief when he and not Sanders (or, for that matter, Elizabeth Warren) became the presumptive nominee, he was quickly warned that he needed to pay attention to and incorporate ideas from progressive movements inside and outside the party.

Just hours after Sanders ended his campaign, seven groups made up of young left-wing activists—the Alliance for Youth Action, Justice Democrats, the March for Our Lives Action Fund, NextGen America, Student Action, the Sunrise Movement, and United We Dream Action—sent an open letter to Biden with a set of demands spanning policy and personnel to earn their support in the general election against Donald Trump.

Messaging around a “return to normalcy” does not and has not earned the support and trust of voters from our generation. For so many young people, going back to the way things were “before Trump” isn’t a motivating enough reason to cast a ballot in November. And now, the coronavirus pandemic has exposed not only the failure of Trump, but how decades of policymaking has failed to create a robust social safety net for the vast majority of Americans.

And then, a few weeks later, Bloomberg revealed that one of Biden’s economic advisers was none other than. . .Larry Summers.

As it turns out, Summers was the first name on the “Biden Do Not Reappoint” (or, alternatively, Do Not Resuscitate) list published last month by Robert Kuttner, who wrote that Summers in 2009 “not only lowballed the necessary economic stimulus and ended it prematurely, but he successfully fought for rescuing the biggest banks rather than taking them into temporary receivership.”

The response to Bloomberg’s scoop was quick and equally categorical. In a joint statement, two of the organizations that signed the open letter—Justice Democrats and the Sunrise Movement—announced they were launching a petition asking Biden to disavow Summers, whom the groups noted has a long history of advocating for harmful economic policies and a record of bigoted statements. And David Sirota, senior adviser and speechwriter on the Sanders campaign, tweeted that Biden “has chosen as his economic adviser the main Democratic proponent of the China PNTR deal and Wall Street deregulation. Apparently, Biden may really have meant it when he said ‘nothing will fundamentally change’.”

What is it about Summers that provokes such ire from progressive individuals and movements?

Perhaps the best place to begin is the piece that Michael Hirsh published in the National Journal back in 2013, when Barack Obama was considering Summers as the replacement for Federal Reserve Board Chairman Ben Bernanke. Hirsh noted that while “on paper, Summers is a superb candidate to succeed Bernanke in a post that the brilliant 58-year-old Harvard professor has pined for since his earliest days in Washington, he was “a very risky choice for chairman.”*

Why? Hirsh presented two main reasons: First, Summers often used his power and intellectual arrogance “to bully opponents into silence, even when they have been proved right.” Second, he had committed “a lot of errors in the past 20 years”—from his moves to deregulate Wall Street in the administration of Bill Clinton to the too-tepid response to the Second Great Depression under Obama—and “yet in no instance has Summers ever been known to publicly acknowledge a mistake.”**

Hirsh’s article played an important role—in addition to opposition from four Democrats on the Senate Banking Committee—in forcing Summers to withdraw his name from consideration for the post.***

As regular readers know, I have had my own running battle with Summers and his economic views on this blog. For example, I challenged him on the idea that inequality is necessary consequence of entrepreneurship; that capitalism has no inherent flaws and the problems of unemployment, inequality, and so on “can be addressed with proper fiscal and monetary policies”; that Summers, unlike most academics, has been very well paid to play on behalf of those who have a big stake in what’s being debated inside and outside the academy; that his “belated, poorly thought-out, population-driven ‘discovery’ of the possibility of secular stagnation” received undeserved accolades from other mainstream economists; that the cure for secular stagnation does not reveal a flaw in capitalism but instead has an easy fix, an increase in government-financed infrastructure spending; and finally that workers’ compensation depends on productivity growth and therefore it’s not necessary—and perhaps even counter-productive—to shift attention from growth to solving the problem of inequality.

More recently, Summers joined fellow Harvard economist Gregory Mankiw in criticizing the kind of wealth taxes that were proposed by Sanders and Warren (as scored by Emmanuel Saez and Gabriel Zucman)—because, among other things, wealthy people can avail themselves of many ways to avoid such taxes (thus reducing the projected revenues) and because closing loopholes would “involve placing limits on the ability to be charitable or to establish trusts for the benefits of grandchildren.”****

The fact is, Summers continues to represent, from his perch at Harvard, both the theoretical blinders and bullying stance of mainstream economics as well as the rush to return to “business as usual” within the Democratic Party.

If Biden wants to signal to wealthy donors and large corporations and banks that, if he somehow manages to defeat Trump in November, “nothing will fundamentally change,” then he really can’t do better than to stick with Summers.

 

*Back in 2013, my own choice, for what it’s worth, was Federal Reserve Governor Sarah Raskin.

**As I wrote in 2009, those characteristics (which Cornel West described as “a braininess that lacks wisdom and vision” and “a smartness that lacks a sensitivity to the poor and the marginal”) are a good description of most mainstream economists I have come across over the years.

***Kuttner, in a more recent piece, wrote that “After Summers personally complained to David Bradley, then the publisher of Atlantic Media, which owned National Journal, Hirsh was advised to seek other work—he ended up moving to Politico and then to Foreign Policy, though no errors were ever found in the Summers piece and no correction was ever issued.”

****If readers want to follow the debate, here is a link to the rejoinder by Saez and Zucman (pdf) and a follow-up response by Summers and his coauthor Natasha Sarin.

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