Shadow economic statistics (12.2008)

The original charts can be found at the Shadow Government Statistics website.


So bye-bye Miss American Pie…

David Lindorff characterizes the endgame of the American Century thusly:

Eventually, the economic slide will hit bottom and begin its slow climb back, as all recessions do, but there will be no return to the days of $500,000 McMansion developments, three-car garages and a new car every two or three years for both parents plus a car for each highschooler. Not only will banks no longer be able to offer such credit to clients. People, having been burned, will not be willing to borrow so much. Company health care benefits, pension programs or 401(k) matching programs that were slashed during this downturn will not be restored when the economy picks up again.

Over the last 20 years, America has degenerated into a nation of consumers, with 72 percent of Gross Domestic Product (sic) now being accounted for by consumer spending — most of it going for things that are produced overseas and shipped here.

That is not an economic model that is sustainable, and it is a model that has just suffered what is certainly a mortal blow.

What we are now seeing is the beginning of an inevitable downward adjustment in American living standards to conform with our actual place in the world.

Rove and Bush hold Congress in contempt

How could they not consider Congress loathsome?

Karl Rove intends to ignore his latest Congressional subpoena (about which see this, this and the articles linked therein) and will do so while appealing to the authority of President Bush, according to a Newsweek

If only Congress had impeached President Bush as it rightly should have…. If only the members of Congress were committed to the rule of law and to meeting their Constitutional responsibilities…. By delaying the inevitable, by refusing to discipline a sitting President whose actions demanded discipline, they merely put off working through the confrontation that must occur when Congress finds itself forced to bind a rogue executive to the law (Fisher, 1997, 181-182).


Sadism for the weak, mercy for the powerful

Americans discover hopelessness in the country's economic decline

While most war-profiteers and banksters continue to live large, lesser mortals, those individuals who lack access to capital, credit and political power, find themselves at wits' end. Capitalism is truly an economic system without a shred of pity and it proves especially merciless during a crisis. Nick Turse recently authored a concise report on the carnage brought about by the current economic crisis. It makes for grim but predictable reading. He concludes it with the following:

Across the United States, people have been reacting to dire circumstances with extreme acts, including murder, suicide and suicide attempts, self-inflicted injury, bank robberies, flights from the law, and arson, as well as resistance to eviction and armed self-defense. And yet, while various bailout schemes have been introduced and implemented for banks and giant corporations, no significant plans have been outlined or introduced into public debate, let alone implemented by Washington, to take strong measures to combat the dire circumstances affecting ordinary Americans.

There has been next to no talk of debt or mortgage forgiveness, or of an enhanced and massively bulked-up version of the Nixonian guaranteed income plan (which would pay stipends to the neediest), or of buying up and handing over the glut of homes on the market, with adequate fix-up funds, to the homeless, or of any significant gesture toward even the most modest redistributions of wealth. Until then, for many, hope will be nothing but a slogan, the body count will rise, and Americans will undoubtedly continue going to extremes [emphasis added].

American citizens can expect this class-based prejudice to thrive as long as the country's political and economic elite lack a capable opponent based in civil society, an opponent that targets concentrated political and economic power.

The House passed the stimulus bill

Not a single Republican Congressman or woman voted for the bill, according to reports (see this, this, this and this), presumably because the Democrat's plan lacked, among other things, the deep and regressive tax cuts which excite the Republicans so much.

Yet that the Republican Party has adopted this strategy is nearly awe-inspiring because of its paranoia and utter craziness. For, in the midst of the most personally and collectively dangerous economic crisis since the Great Depression, a crisis that can be directly and easily blamed on policies that characterize Reaganomics and the orthodoxy that emerged from it, what else can one say about the Congressional Republicans when they stubbornly try to reimpose their Party's line on a staggering economy. Do they mean to pursue this goal? Yes, according to this Christian Science Monitor report:

"We're going to continue to try to encourage the majority here in the Congress to incorporate a number of our ideas," said Senate minority leader Mitch McConnell (R) of Kentucky at a briefing on Tuesday.

Digby nicely depicts a few of the more annoying feature of this Republican posturing (a link to this article can be found here):

Can someone explain to me why I'm seeing Republican after Republican on television advising Americans on the right way to run the economy? Is there any reason why we should listen to them sanctimoniously lecturing us on "what's worked in the past" and telling us that the only way to cure the problems they themselves created are to do more of the same? They've always been known for chutzpah, but this takes the cake.

If a few Democrats could bother themselves to challenge their standing to make these assertions, that might be helpful. Or maybe one gasbag or spokesmodel could ask them why no matter whether the country is economically doing well or doing badly, their advice is always tax cuts. It would really be great if somebody, somewhere, could ask them why they think anyone should take them seriously on these issues considering the mess we are in today. I know that's a lot to ask during this time of reconciliation but honestly, it's infuriating to see them swarm the television and have to watch the media listen to their "analysis" and swallow it whole. If I didn't follow politics closely, I would think these people are the ones who won the election.

Surely, one might ask, the Democratic Party is now setting the Republicans straight about what the United States will do about its problems and the reasons they have for taking their actions? Well, no. The Democrats have refused to take the path of autonomous political action. Rather, the Party is instead seeking to generate a bipartisan decision on the economic question confronting the country. Compromise is their method. Yet, given America's current circumstances, I would say that the pursuit of this secondary goal is nearly as daft as the Republican adherence to their defunct political economics. It is foolish because the Republicans could not be expected to participate in the Democrat's consensus politics. Lacking a capacity to learn has long been a signature feature of modern Republicanism.

Nevertheless, the obstructionism of the Republican Party is edifying in one respect according to Glen Greenwald. From it we can learn that:

…Beltway "bipartisanship "means that Democrats adopt as many GOP beliefs as possible so what ultimately is done resembles Republican policies as much as possible (anyone doubting that should simply review these "bipartisan" votes of the last eight years).

Accordingly, then, Greenwald is

…glad that the stimulus package yesterday — which Democrats watered down and comprised on as much as possible to please Republicans — did not attract even a single Republican vote in the House: not one
[emphasis in the original].

I suspect Greenwald finds the Republican's obstinacy refreshing because their dogmatism negatively reflects the complete uselessness of a spinelessly conformist Democratic Party:

Republicans aren't interested in "bipartisanship" except to the extent that they can force Democrats to enact their policies even though they have only a small minority thanks to being so forcefully rejected by the citizenry. And why should they be interested in bipartisanship? Why should they vote for a stimulus package that they don't support and that is anathema to what their most ardent supporters believe?

If only the Democratic Party were so inspired….

But the Democrats — having committed to memory the 'hard lessons' of 1968, 1972 and 1980 — reject the rather sensible idea that "Partisanship [means] advocating…your own beliefs and discrediting the beliefs that you reject and believe are harmful," in Greenwald's words. They instinctively reject partisanship because they lack a distinct and enduring identity. They lack this identity because they are like the Republicans, a party that reflects the prerogatives of capital and defends America's empire.

Have the Democrats ever wondered why the Republicans mocked them for lacking ideas? They would know the reasons for this ill-treatment if they were honest. The abuse was and remains apt because the Democratic Party has been and remains the junior partner in the ruling consensus.

The contractions have begun

Giving birth to a new world order

The grim forecast, according to the International Monetary Fund (links to the original article can be found here and here):

"We now expect the global economy to come to a virtual halt," said IMF Chief Economist Olivier Blanchard in prepared remarks for a press briefing.

A graphical representation of this likely future:


The hypocrisy of the ‘political class’

It often seems that Glen Greenwald has made it his life's work to document this hypocrisy as one can find it in Washington, DC. For instance, in his latest Salon post, Greenwald compares the mandatory and severe prison sentences given to those convicted for committing petty crimes to the leniency demanded for those individuals who authorized heinous war crimes and the rankest abuse of the law:

Our political class has embraced mandatory minimum sentencing schemes as a way to eliminate mercy and sentencing flexibility for ordinary people who break the law (as opposed to Bush officials who do) [emphasis in the original].

The American way — sadism reserved for the weak, mercy showered on the powerful:

Under all circumstances, arguing that high political officials should be immunized from prosecution when they commit felonies such as illegal eavesdropping and torture would be both destructive and wrong [not to mention, in the case of the latter crimes, a clear violation of a treaty which the U.S. (under Ronald Reagan) signed and thereafter ratified]. But what makes it so much worse, so much more corrupted, is the fact that this "ignore-the-past-and-forget-retribution" rationale is invoked by our media elites only for a tiny, special class of people — our political leaders — while the exact opposite rationale ("ignore their lame excuses, lock them up and throw away the key") is applied to everyone else. That, by definition, is what a "two-tiered system of justice" means and that, more than anything else, is what characterizes (and sustains) deeply corrupt political systems. That's the two-tiered system which, for obvious reasons, our political and media elites are now vehemently arguing must be preserved.

The President needs to consult with St. Jude…

…before he again consults with Congressional Republicans. One can read the remarks he made yesterday after talking with House Republicans here.

Obama, the decider

According to reports (see this, this, this and this), Karl Rove's attorney has already sent Rove's most recent House Judiciary Committee subpoena to the White House for its opinion. The question the White House must address: Whether former President Bush retains the capacity to assert executive privilege in the matters at hand, namely, Rove's role in the Justice Department's Attorney dismissal and Siegelman scandals and whether Congress can force a President's advisors to give testimony.


Uncle Sam has money to burn….

The Arms Control Center produced this disturbing chart:

Mr. Evil faces the lights

According to a Talking Points Memo report, John Conyers (D-MI) yesterday (1.26.2009) issued a subpoena to Karl Rove ordering Rove to appear before the House Judiciary Committee early next month.

The Committee press release can be read here and the subpoena can be read here.

Times are tough


We love our credit cards

Ed Kemp defends here the "massive country debt is the source of our economic troubles" claim. The key component of this causal force: Private debt. His prediction: "The United States and the United Kingdom stand on the brink of the largest debt crisis in history."

Hope for the hopeless?

Richard Falk identifies a source of hope for the Palestinians:

Winning militarily but losing politically should not surprise students of modern warfare. After all, the United States won every battle in Vietnam and yet eventually lost the war. The same was true for the Soviet Union in Afghanistan, and indeed it was the general pattern in decolonization struggles. In such wars the militarily dominant side not only loses the war but generates a deep crisis at home and experiences a tarnished international reputation. What these counterinsurgency or neocolonial wars have in common is that "the enemy" is merged with civilian society; the fighting abandons the restraints of international humanitarian law; and by killing helpless civilians, the occupying or colonial power is perceived as committing war crimes. This has been the case in Gaza, with worldwide outrage inflicting on Israel a major defeat in the battle for public legitimacy, which in the end is often decisive in shaping the outcome of major conflicts.

Neither the United States nor Israel has discovered the limits of military power in the contemporary world. The leaders of both countries seem unable to learn the lesson of recent history: that occupation in the postcolonial world rarely produces the desired results at an acceptable cost. It is from this perspective, despite a horrific price in lives and suffering, that the Palestinians may be slowly winning the "second war," the legitimacy war, whose battlefield has become global. Perhaps the most impressive victory in a legitimacy war was won by South Africa's antiapartheid movement. If the Gaza conflict brings the Palestinian struggle for self-determination to the top of the global justice agenda, it will be a major victory for Hamas….

Military campaigns usually have a clear beginning and end, as well as a visible battlefield. In contrast, legitimacy wars have no clear boundaries and involve subtle shifts of public opinion that can alter the overall political climate in decisive ways. I believe the Gaza conflict, especially against the background of Israel's prior siege and its 2006 Lebanon misadventure, is approaching that tipping point. Despite the frightful punishment inflicted on Gaza's people, despite the bitterly divided Palestinian leadership, despite the cruelties of more than four decades of occupation, the Palestinians are poised to achieve victory.


Divide and conquer

Trying to strangle the triangulators with triangulation

Why did House Republicans adopt this tactic? Why would they expect to successfully divide the Democratic Party, pitting one fraction of that party against another? The Washington Independent has an explanation:

House Republicans are in unfamiliar and politically unpromising territory. Unlike their counterparts in the Senate, they have very few methods of slowing down or stopping legislation they don't like. Their influence was reduced two weeks ago by a rule change that effectively prevents members of the minority party from forcing votes on controversial amendments, one of the few cudgels the party had in the House.

In response, Republicans are attempting to link themselves to the popular Obama administration while criticizing the work of the Democratic Congress. The goal is to oppose Democratic policy without being seen as opposing or obstructing the president, a posture that, they hope, will put them in better position to win back voters if the Democrats' popularity falters.

Their chosen technique comes with risks, of course. The House Republican strategy would likely fail if the Republicans in general are seen as obstructing the passage of the Democratic Party's economic legislation while a disturbing economic crisis rages on. They might then acquire much of the blame for the specific course of the crisis, an achievement that would be appropriate in any case. It would also fail if the public treats the appearance of bipartisan cooperation as evidence reflecting the new President's political acumen and munificence but not a spirit of 'cooperation' originating within the House Republican caucus. And, of course, it would fail if the Republicans were to successfully hide within Obama's shadow and the President's programs then failed to resolve the diverse crises which now trouble the country. They would share in the blame

On the other hand, the tactic is not doomed to failure right from the get go. In fact, since the House Republicans clearly wish to secure their Party's power while also avoiding the taking of responsibility for the crisis situation Republican policies and methods had a hand in bringing about, they may actually succeed because they are excellent practitioners of this devious kind of self-promotion. But the odds of their succeeding are unfavorable. After all, the political and economic crises of the day are direct consequences of the policies that defined the Right Turn in American politics after 1980. This is not a situation which can be easily blamed on the Democrats. And the 2006 and 2008 elections suggest that the electorate has grown tired of the GOP.


Keith Olbermann interviews Russell Tice

Mr. Tice is a former NSA analyst and whistleblower. Tice prudently waited until the Bush cabal had relinquished state power before taking up once more the issue of NSA spying on American citizens. The interview spans two segments.

More GOP whining

Cheney and others get 'it' off their chests

This Cheney quote can be found at the Weekly Standard:

Asked for his reaction to Bush's decision Cheney said: "Scooter Libby is one of the most capable and honorable men I've ever known. He's been an outstanding public servant throughout his career. He was the victim of a serious miscarriage of justice, and I strongly believe that he deserved a presidential pardon. Obviously, I disagree with President Bush's decision."

And then there is this:

Bush's decision not to pardon Libby has angered many of the president's strongest defenders. One Libby sympathizer, a longtime defender of Bush, told friends she was "disgusted" by the president. Another described Bush as "dishonorable" and a third suggested that refusing to pardon Libby was akin to leaving a soldier on the battlefield.

Out of power but not out of whine

The Bush cabal returns home

Karl Rove now interprets history. He no longer makes it. Thus demoted and perceptibly bitter about the indignities he and his kind now suffer, his recent effort to interpret the Bush II Presidency is meant to teach the truth to those of us too dumb to get 'it':

…as Mr. Bush left Washington, in a last angry frenzy his critics again distorted his record, maligned his character and repeated untruths about his years in the Oval Office. Nothing they wrote or said changes the essential facts.

Rove then spends the rest of his article identifying the policies George W. Bush allegedly got right. His list makes for tedious reading, as one would expect, since his Boss bungled so much when he had state power in his hands! Oddly enough, Rove missed Bush's greatest and, perhaps, only real accomplishment. Bush failed to take the steps necessary to insulate himself and his crew from the legal challenges that await them. Freedom loving people everywhere can be grateful about his lack of foresight!

Obamanomics: Wrongheaded?

According to Mike Whitney, Obama's economic recovery program is very much wrong since it mostly looks set to apply additional monetary WD-40 to the credit market. Even the program's job creation component, the hoped-for byproduct of its stimulus package, means to provide coverage for the demand constraints now afflicting the economy. These constraints take the form of rising unemployment and underemployment, long-term real wage declines, massive personal debt, etc. Yet the stimulus wishes to undo these constraints mostly by incurring additional collective and personal debt. Whitney rightly emphasizes this point along with some of the consequences it entails:

The Obama economic recovery plan is a misreading of the real problem, which is not the availability of credit, but debt. Bernanke, Summers and Geithner are approaching the issue from the wrong end; they want to stimulate the economy through credit expansion and more red ink. This is just more of Greenspan's bubblenomics: the endless boom and bust cycle triggered by low interest crack sold to credulous speculators. The only ones who benefit are the Wall Street insiders….

It should come as no surprise that common Americans now rightly fear the consequences produced by their debt-driven consumption when their consuming will occur during an economic crisis, especially one which promises to be long and difficult. They rightly see the problem as a matter of providing for their personal security, which is, after all, their responsibility. It is because they are afraid and because their fears are rational that they

…will not lead the way out of this economic downturn. It's physically impossible. The country is undergoing a generational shift from profligate consumerism to thriftiness. Stimulus alone won't get people spending. Salaries will have to go up to make up for losses in retirement funds and housing prices; and the face-value of mortgages and credit card debt will have to be written down. Otherwise, spending will continue to falter and the economy will tank. No economic recovery plan has a chance of succeeding if it doesn't address these two key issues: higher wages and debt relief.

Naturally, the Federal Reserve does not want to deal with the underlying causes of the crisis. After all, they're in the credit-peddling business. The Fed's job is to generate business for the financial community, which means creating a favorable environment for credit expansion.

Indeed…. What the crisis demands is a national commitment to debt forgiveness and economic risk reduction for society as a whole, reindustrialization and even unionization! To be sure, a project with these features can only look Quixotic to most Americans.

In any case, the Fed and the government now in power care about more than just securing America's credit-peddling business. Among other things, they care about their internal and external authority, about social stability and system coherence, about their political legitimacy and America's military effectiveness. It is because they care about these specific ends that they must also master the numerous conflicts and related social costs the crisis promises to generate. Most notably these will include: The social disintegration typical of an economy boasting collapsing labor and consumer markets. From what, one might wonder, would most Americans draw upon to construct a collective identity, a sense of national purpose? What would motivate them to sacrifice their short-term well-being if they lack the imperial majesty of Pax Americana as well as immediate access to an abundance of goods and services? If neither guns nor butter are present, if America is not the City on the Hill, the exceptional and indispensible nation, then what? For, why would Americans submissively comply with the rigors of the American way of life if they lack the real and illusory benefits that were once part of that life? They would give their consent to their governors because they have a right to sleep under a bridge?

Microsoft announces imminent and future staff cuts

According to its recent earnings report:

In light of the further deterioration of global economic conditions, Microsoft announced additional steps to manage costs, including the reduction of headcount-related expenses, vendors and contingent staff, facilities, capital expenditures and marketing. As part of this plan, Microsoft will eliminate up to 5,000 jobs in R&D, marketing, sales, finance, legal, HR, and IT over the next 18 months, including 1,400 jobs today. These initiatives will reduce the company's annual operating expense run rate by approximately $1.5 billion and reduce fiscal year 2009 capital expenditures by $700 million.

This report emits a signal akin to that presented by a dead bird in a coal mine…

Chipping away at the Bush legacy

President Obama will close America's torture gulags, according to a New York Times report.

James K. Galbraith on Obamanomics

I found the link to the Realnews site at EconoSpeak.

A somber thought

It comes courtesy of Allen Nairn:

Obama, on taking office, will inherit a state pre-programmed in ways that kill civilians, a vast, globe-spanning machine on autopilot, unconstrained by murder law.

As president, Obama will instantly become the world's number one arms dealer, number one trainer of secret police, number one detonator of bombs, and number one sponsor of forces, US and foreign, that by objective definition do terrorism.


Snippets from Barack Obama’s ‘malaise’ and ‘morning in America’ speech

Reading today Obama's Inaugural Address, it occurred to me that the Reagan Revolution was nothing but a caesura into which America's New Right could play out the farce of a triumphant Americanism. When considered today, Reagan's Morning in America spectacle was but a billboard on the road of national decline. I thought of this because the new President greeted the world by telling it that the crisis of the moment is very real:

That we are in the midst of crisis is now well understood. Our nation is at war against a far-reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some but also our collective failure to make hard choices and prepare the nation for a new age.

Homes have been lost, jobs shed, businesses shuttered. Our health care is too costly, our schools fail too many, and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.

The crisis refers to more than just the evident institutional decay. Obama also found the cultural reflection of the crisis:

Less measurable, but no less profound, is a sapping of confidence across our land; a nagging fear that America's decline is inevitable, that the next generation must lower its sights.

Yet America is not hopeless. The country, it seems, can find a new beginning in the decline of the old. The malaise which so many sense is not America's collective fate:

On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.

On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn-out dogmas that for far too long have strangled our politics.

We remain a young nation, but in the words of Scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness.

But prosperity and freedom do not compose an indestructible inheritance. Thus:

What is required of us now is a new era of responsibility — a recognition, on the part of every American, that we have duties to ourselves, our nation and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character than giving our all to a difficult task.

Surely Jimmy Carter, who delivered his infamous malaise speech nearly 30 years ago, felt vindicated by President Obama's call to restrained and responsible action, to unity and by a historical moment which seemingly repudiates the Reagan Era. Obama seemingly preached a return to the austere pragmatism Carter advocated and practiced.

But a gotcha lurks within all of this Carter back-patting: Jimmy Carter's Presidency deserved to fail. I say this because the Carter administration made its destiny by being cut from the same rotten tree that gave the world the Reagan Revolution. Carter neither abandoned America's empire, the militarism that comes with an empire nor could he provide a credible solution to the stagflation crisis which marked the era. He brought Paul Volker to the Federal Reserve, provoked the Soviet invasion of Afghanistan, bungled the American response to the Nicaraguan and Iranian revolutions and gave the world his Carter Doctrine. Does Carter's fate — a one-term Presidency and dishonor at home — await Barack Obama because his administration will also practice a soft version of the American way? I suspect we shall soon know whether President Obama has the mettle to lead the country away from empire, militarism and misregulated finance capitalism. If he were to achieve these goals, which are not his stated goals, I believe posterity would favorably judge his tenure. These, after all, would comprise any responsible approach to America's crises.


Less than two hours till we can say with great confidence…

…that the current President cannot be any worse than the last.


A call to action

Honoring Martin Luther King

Kevin Alexander Gray celebrates Martin Luther King Day by calling for an American withdrawal from Iraq and Afghanistan as well as a disinvestment campaign targeting Israel.

So, this year we should honor King in an active sense. We should commit ourselves to organize against the American policy of violence and empire. The anti-war movement should apply pressure on Obama to withdraw from Iraq and Afghanistan. And, just as important, particularly amid the horror that has been visited on the people of Gaza; a broader peace movement must also build real economic and political pressure against Israel's immoral and criminal acts against the Palestinians. This King Day should mark the beginning of an organized push for American divestment from Israel.

A great American leader

This is Martin Luther King Day. Fortunately, we can only wonder about the fate of the Civil Rights movement and the country as a whole had it lacked a leader of this stature.


When are friends a burden?

When they will likely, violently and soon die on you, a point one may infer from this report about a young Palestinian man living in Gaza:

Anees told us tonight that he has no longer wants to make new friends because so many of his have died. A new friend may die tomorrow or disappear. He knew Rachel Corrie and she was the main reason he learned English. Others told us Anees went under fire to help Tom Hurndall get to the hospital when he was shot by IDF snipers.


Eric Holder pushes back

Despite fielding questions which addressed his role in Bill Clinton's questionable Marc Rich pardon, Eric Holder, Barack Obama's nominee for Attorney General, not only held his ground, he also admitted the United States practiced torture and affirmed, albeit softly, his commitment to the rule of law (see this but also this).

Alas, Holder might need the strength of Hercules to clean out the Department of Justice once he gets settled because the Bush regime has so thoroughly infested the place with political appointees who refuse to leave and Republican partisans posing as civil servants that it might take a great flood to rid the Department of every one of its GOP hacks.

All that’s holy is profaned…

The H.J. Heinz announced today that:

…the gherkin pickle, which has been featured on Heinz Ketchup labels since the 1890s, is making way for a vine-ripened tomato and a tagline that clearly communicates that the tomatoes in Heinz Tomato Ketchup are 'Grown not made.' The tomato imagery on the new label emphasizes Heinz's heritage as the world's largest processed tomato company with a deep dedication to tomato quality from seed to bottle.

"The tomato is what makes Heinz Ketchup so extraordinary, and so with all due respect to the pickle, which has served Heinz dutifully since the 19th century, we are shifting the spotlight to the tomato," said Heinz Chairman, President and CEO, William R. Johnson. "Heinz tomatoes, which we carefully nurture from seed to vine to bottle, make the perfect ketchup. The redesign of our label underscores this commitment and highlights the true hero of our iconic product, the tomato."


A natural right of ‘mere life’

While discussing Israel's Gaza Massacre and the credible reasons for this illegal action, Norman Finkelstein wrote the following:

The record is fairly clear. You can find it on the Israeli website, the Ministry of Foreign Affairs website. Israel broke the ceasefire by going into the Gaza and killing six or seven Palestinian militants. At that point — and now I'm quoting the official Israeli website — Hamas retaliated or, in retaliation for the Israeli attack, then launched the missiles.

Now, as to the reason why, the record is fairly clear as well. According to Ha'aretz, Defense Minister Barak began plans for this invasion before the ceasefire even began. In fact, according to yesterday's Ha'aretz, the plans for the invasion began in March. And the main reasons for the invasion, I think, are twofold. Number one; to enhance what Israel calls its deterrence capacity, which in layman's language basically means Israel's capacity to terrorize the region into submission. After their defeat in July 2006 in Lebanon, they felt it important to transmit the message that Israel is still a fighting force, still capable of terrorizing those who dare defy its word.

And the second main reason for the attack is because Hamas was signaling that it wanted a diplomatic settlement of the conflict along the June 1967 border. That is to say, Hamas was signaling they had joined the international consensus, they had joined most of the international community, overwhelmingly the international community, in seeking a diplomatic settlement. And at that point, Israel was faced with what Israelis call a Palestinian peace offensive. And in order to defeat the peace offensive, they sought to dismantle Hamas.

In sum, then, Finkelstein argues that the Israeli state attacked Gaza in order to reassert the efficacy of its military power and to reaffirm its willingness to engage in terroristic attacks in order to achieve its political goals; moreover, he argues that Israel wished to eliminate as a political option the conclusion of these hostilities by means of an agreement between the contending parties. In effect, Finkelstein's analysis depicts an Israeli state committed to maintaining a state of terror without end.

Michael Neumann, while also addressing the Gaza Massacre and, for that matter, the Israel-Palestine question as such, wrote the following:

The Palestinians in the occupied territories are in a state equivalent to slavery. The Palestinian Authority in the West Bank and Hamas in Gaza are not sovereigns. Israel has supreme authority in both areas. That means it can do literally whatever it likes to their inhabitants. This population has no political input whatever into their sovereign's decisions; the Palestinians in the occupied territories can't vote in Israeli elections. So the Israeli government has absolute power over these people, and they have no say at all in how they are treated. This is slavery without the muss and fuss of ownership. Slave revolts frequently involved the murder of innocent civilians, but I haven't seen much hand-wringing about the terrible morals of the rebels. Slaves and occupied peoples are accorded very generous rights of resistance. I doubt anyone today would condemn antebellum slaves on a plantation outside Charleston if they had used indiscriminate standoff weapons against that city. Allegedly freedom-loving Americans should therefore be particularly sympathetic to Palestinian resistance.

But what of Israel's right of self-defense? It exists, but it doesn't apply.

How, one might ask, could the right to self defense fail to apply to Israel with respect to its current conflict with the Gaza Palestinians? Hamas, after all, fires rockets into Israel. They knowingly and thus intentionally threaten Israeli civilians — noncombatants — with their acts. Some of these noncombatants are injured or killed by these attacks. Legally considered, the attacks are crimes. Yet Neumann is undeterred by this point. He continues:

Israel, when it conquered the occupied territories in 1967, could have established a sovereign Palestinian state. This would have made the Palestinians, not a subject people at the mercy of their conqueror, but an independent people, responsible for their own acts and for keeping the peace with other sovereign states. Had the Palestinians then attacked Israel, Israel would have had the right to respond in self-defense.

But Israel didn't do that. Instead, it kept the Palestinians at its mercy, and its mercy didn't materialize. Israel embarked on a settlement policy that amounted to a declaration of war on a helpless population. The settlements were part of a project to take the Palestinians' land, all of it, for the use and enjoyment of the Jewish people. Of course Israel did not explicitly say it was going to take from the Palestinians the very ground on which they stood. But the settlements kept spreading, mopping up an increasing share of vital resources, and behind them was a settler movement, hugely powerful not only in the occupied territories but in Israel itself. This bunch of coddled fanatics, many of them American, quite openly proclaimed their determination to secure the whole of Biblical Israel for exclusively Jewish use. The Israeli government backed these racial warriors with unlimited military protection and extensive financial support.

These trends continue to the present day.


This means that Israel is the aggressor in this conflict, and the Palestinians fight in self-defense. Under these circumstances, Israel's right of self-defense cannot justify Israeli violence. Israel is certainly entitled to protect its citizens by evacuation and other non-violent measures, but it is not entitled to harm a hair on the head of a Palestinian firing rockets into Israeli cities, whether or not these rockets kill innocent civilians.

When one reads the two articles together, it looks as though Neumann's analysis enhances Finkelstein's by completely undermining the position of Israel's apologists. Neumann's critique accomplishes this by starting with the historical fact that the Palestinians lack sovereignty. There is no Palestinian nation-state. They are a homeless and stateless people — strangers (Simmel, pp. 402-408) in Palestine and de facto "slaves" of the Israeli state. With them Israel can act with impunity; they are "bare life" as this term is analyzed by Agamben. As such, the Palestinians in Gaza lack the legal rights, political resources and material capacities they need to defend themselves with any real success against Israel's plans, resources and actions. Although the Palestinians are effectively powerless when compared to the powers held by the Israeli state, they can defend themselves against their antagonist, but only by engaging in putatively terrorist acts. That is, they are not wholly defenseless if by defense-able one includes engaging in these ineffective reprisals.

The Palestinians are thus alive and willful. And they clearly wish to will their survival. This comprises the political significance of the Palestinian counter-terror. usicnWhen considered as a nation, they have proven themselves unwilling to submit to Israel. We should not be surprised "…that those who are isolated are the first to revolt," as Ernst Bloch once put it (p. 7).

But international institutions typically judge their defensive efforts as beyond the pale, worthy of sanctions because targeting Israeli citizens is also wrong. Worse still is the fact that their attacks on Israel have long proven themselves ineffective in practice. They fail because they do little to deter the Israeli state even when they produce Israeli casualties. Nor do they motivate other countries or international entities to take steps meant to deter Israeli aggression. Indeed, Palestinian terror attacks often provide the pretext for another Israeli assault on a fraction of the Palestinian people. Given the history of this conflict and the logic that seems to govern it, I find it difficult to avoid concluding that a part of Israel elite accepts the strong possibility that the country will suffer these Palestinian attacks and the Israeli casualties they cause. Indeed, Israel's imperialists and militarists can consider the defensive efforts of the Palestinians to be an unavoidable cost the country must absorb when pursuing its political objectives in the region.

These objectives, unfortunately, point to the eventual removal of the Palestinians from Israel. How could one conclude otherwise when, on the one hand, the Palestinians cannot win the war on the ground and, on the other hand, as Neumann suggests, the political situation in Israel is such that Israel's local violence will end only with the local cleansing or genocide of the Palestinians. This political situation reflects the indisputable fact that Israeli expansion has been both ruthless and relentless in its methods. There is no reason to believe that Israel will embrace peace and diplomacy anytime soon. Therefore, the Palestinians may not only claim a right to defend themselves against Israel's thantopolitical (Agamben) project, they can also expect reasonable individuals — that is, individuals who recognize the validity of a Palestinian right to self-defense — to consider their claim just.

What is required of those who wish to put an end to this catastrophe? Finkelstein's concludes his article by pointing to the first steps any likely and feasible solution must have. He suggests, first, that Israel and the United States must be forced to observe the letter of international law and respect the sentiments of the 'international community.' To be sure, the attitude of the international community now mostly favors the Palestinian cause. Israel and the United States are nearly isolated in this matter and the Gaza massacre has only isolated further the two countries. Second, he suggests that the United States as a nation must correctly identify the de facto aggressor in this conflict: Israel. His recommendations implicitly and correctly express the belief that Israel can implement the illicit policies which mark its relationship with the Palestinians only because it enjoys America's material and political support.

For American citizens, therefore, the political task with respect to the Israel-Palestine question is both obvious and compelling. They must seek to terminate their country's material and political support for Israeli imperialism and state terrorism if they wish to avoid living and acting in tacit compliance with Israel's crimes.


Rioting in the Baltic region

Latvians object to their economic fate

Recent protests over Latvia's current economic troubles turned violent on January 13. According to the New York Times report, Latvian "President Valdis Zatlers threatened on Wednesday to call for a referendum which would allow voters to dissolve Parliament, saying trust in the government, including in its ability to deal with growing economic problems, had 'collapsed catastrophically.'"


Wishful thinking?

The soon to depart President promised the world that: "When I get out of here, I'm getting off the stage. I've had my time in the klieg lights." Perhaps. On the other hand, he might ask Pinochet or the Shah about the perils criminals like him face when they travel as private citizens.


Orthodoxy and its limits

Yves Smith of Naked Capitalism rightly takes to task the economics profession in general and the "normal science" specific to the practice. She made her criticisms because it is now obvious that most professional economists in the United States missed the many signs pointing to an impending and devastating economic crisis, that they are now failing to identify their mistaken analyses and prognostications and that they are also failing to learn from their mistakes in this matter.

A few choice snippets:

Economic policies in the US and most advanced economies are to a significant degree devised by economists. They also serve as policy advocates, and are regularly quoted in the business and political media and contribute regularly to op-ed pages.

We have just witnessed them make a massive failure in diagnosis. Despite the fact that there was rampant evidence of trouble on various fronts – a housing bubble in many countries (the Economist had a major story on it in June 2005 and as readers well know, prices rose at an accelerating pace), rising levels of consumer debt, stagnant average worker wages, lack of corporate investment, a gaping US trade deficit, insanely low spreads for risky credits — the authorities took the "everything is for the best in this best of all possible worlds" posture until the wheels started coming off. And even when they did, the vast majority were constitutionally unable to call its trajectory.


…there appears to be an extraordinary lack of introspection within the discipline despite having presided over a Katrina-like failure.

Orthodox economics — a declining research program?

No comment needed…

Writing about the ongoing Gaza massacre, Uri Avnery observed:

Nearly seventy ago, in the course of World War II, a heinous crime was committed in the city of Leningrad. For more than a thousand days, a gang of extremists called "the Red Army" held the millions of the town's inhabitants hostage and provoked retaliation from the German Wehrmacht from inside the population centers. The Germans had no alternative but to bomb and shell the population and to impose a total blockade, which caused the death of hundreds of thousands.

Some time before that, a similar crime was committed in England. The Churchill gang hid among the population of London, misusing the millions of citizens as a human shield. The Germans were compelled to send their Luftwaffe and reluctantly reduce the city to ruins. They called it the Blitz.

This is the description that would now appear in the history books — if the Germans had won the war.

Absurd? No more than the daily descriptions in our [Israeli] media, which are being repeated ad nauseam: the Hamas terrorists use the inhabitants of Gaza as "hostages" and exploit the women and children as "human shields", they leave us no alternative but to carry out massive bombardments, in which, to our deep sorrow, thousands of women, children and unarmed men are killed and injured.


Cable news sucks….

Arianna Huffington seems to agree with my judgment (the link comes from Naked Capitalism). She wrote:

Have you heard what's going on with the government's almost trillion-dollar bailout and how your money is being spent? Do you know all you need to know about who's managing all that taxpayer money — and how effectively it's being used?

Not if you're getting your news from cable TV. Judging by where the media are focusing their attention, you'd think the Blago/Burris/Reid and Kennedy/Paterson/Cuomo soap operas are the biggest issues facing the nation — and that little thing about the potential collapse of the world's largest economy is just a sideshow.


It appears that cable news and much of the media mainstream could care less about the pressing questions of the moment, that is, about the problems which will significantly shape the future of this country and the world. They do, however, obsessively ruminate over trivial issues like those mentioned by Huffington. Real journalists provide a stark contrast to this situation. They need to keep in check their cynical impulses in order to effectively describe the bad state of things. They focus on the events and issues which determine the fate of the country and its citizens. Pseudo-journalists, on the other hand, like the majority of those who staff America's major newsrooms are first rank cynics if they are anything. Kitsch and the banal are their stock in trade. If freedom in all its forms did not require the free and public exchange of opinions, then the output of these cynical journalists could be used when making a case for media censorship. But freedom does require the uninhibited and public exchange of opinions. And, more importantly, it requires critical reflection on the sources of contemporary cynicism, not bind tolerance of the cynics and their wares.


Something which sensible people can anticipate?

Ivan Eland asserts:

Somebody is going to have to whisper in President-elect Obama's ear that the unipolar moment has passed and the United States can no longer afford its informal worldwide empire. Even though the looming economic meltdown will likely be serious — and maybe even cataclysmic — the foreign policy chattering classes of both parties are on autopilot and have not yet abandoned their interventionist consensus. A rude awakening awaits.

Yes, it does. I can only make a wild guess about the event that could quickly and decisively undermine what appears to be a category-wide refusal to learn from experience. It does not promise to be pleasant, though.

Nevertheless, Eland lacks faith in Obama:

A soft landing for a declining empire is better than a hard one. Unfortunately, Obama seems captive to the liberal wing of the interventionist foreign policy establishment, just as George W. Bush was ensnared by the right wing of that same militaristic consensus.

Will it be effective?

The New York Times wonders if Obama's stimulus will work as a remedy to the depression given the President-elect's clear desire to achieve duopoly-wide support for his program.

The looming question, however, is: Does Washington have the stomach and the resources to design and implement a feasible recovery program which gives pride of place to a reindustrialization strategy, developing eco-friendly forms of production, distribution and consumption as well as restructuring the economy in general.

He must be ok since he has enemies like these

From a Politico report:

With only a longshot court appeal standing in the way of Democrat Al Franken's election to the Senate, Republicans are gritting their teeth and bracing for the arrival of a new senator whose every utterance will sound like nails on a chalkboard to them.


"I don't know if we've ever had an opponent who is so disliked by Republicans as Al Franken," said Minnesota Republican Party Chair Ron Carey, who cautioned that Coleman's election challenge could still turn the results back his way. "It's one thing to lose to an honorable opponent, but Al Franken is not considered an honorable opponent by Minnesota Republicans."

It is extremely ironic that Washington and Minnesota's rightwing political creatures are concerned that Franken will turn the Senate into a joke. But that concern is not as incongruous as their suggestion that the criticism they intend to direct at Franken will reveal Franken to be a blameworthy politician! From their mouths to God's ears!


Recession or depression?

Writing in the New Republic, John Judis suspects that the crisis is a depression:

We may not simply be facing a steep recession like that of the early 1980s, from which we can extricate ourselves in a year or two, but something resembling the Great Depression of the 1930s. For starters, the current crisis is global, which means that one part of the world can't lift the other out of its misery; everyone will go down together, which is what happened in the 1930s. Secondly, the downturn has combined an unusual decline in the real economy — employment in durable-goods manufacturing fell by 21.9 percent from 2000 to 2008 — with a financial crash precipitated by the bursting of the housing bubble. The bubble resulted from an attempt to sustain growth and employment in the face of an underlying decline, which, too, is what happened in the late 1920s.

Peter Morici also believes the crisis is a depression:

The challenges facing President-elect Barack Obama could not be clearer. The current economic slowdown has two structural causes — bad management practices at the large money center banks and the huge foreign trade deficit. These problems are not self-correcting.

The economy will not recover without fundamental changes in banking and trade policy. A large stimulus package, though necessary, will only give the economy a temporary lift but then unemployment will rise again and continue at unacceptable levels indefinitely without successively larger stimulus packages and huge federal budget deficits. The economy is a depression, not a recession.

Both propose economic restructuring as the only feasible remedy to the crisis. When the implications are drawn from their arguments, both seem to suggest that any successful redevelopmental program will have reindustrialization is a necessary condition.

The real issue: Will the Obama administration have the political and economic resources it will need to realize these reforms.

Grim December unemployment news

An economy falling freely towards an unknown nadir

The most recent Bureau of Labor Statistics report tells us that:

Nonfarm payroll employment declined sharply in December, and the unemployment rate rose from 6.8 to 7.2 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Payroll employment fell by 524,000 over the month and by 1.9 million over the last 4 months of 2008. In December, job losses were large and widespread across most major industry sectors.

The New York Times adds a few facts to the BLS report:

The 7.2 percent was the highest unemployment rate since January 1993, when the country was still shaking off a jobless recovery from the 1990-91 recession. The loss in total jobs for 2008 was the largest since 1945.

The Wall Street Journal predicts that the Federal Reserve will feel compelled to combat the problem by continuing the inflationary strategy it has adopted.

Shadow Stats, it is worth noting here, puts its alternate employment rate at nearly 18% for December:


A few of Barack Obama’s budget priorities during the economic crisis

Money for empire (see this, but also see this).

Money for finance capital (see this).

Less money for Social Security and Medicare (see this, this, this).


Krugman crunches numbers, has another bad dream

Economist Paul Krugman began a recent New York Times article by expressing his suspicion about the Obama stimulus:

Bit by bit we're getting information on the Obama stimulus plan, enough to start making back-of-the-envelope estimates of impact. The bottom line is this: we're probably looking at a plan that will shave less than 2 percentage points off the average unemployment rate for the next two years, and possibly quite a lot less. This raises real concerns about whether the incoming administration is lowballing its plans in an attempt to get bipartisan consensus.

He then did his arithmetic while relying on assumptions favorable to the Obama stimulus plan as it is known today. From the math and these assumptions Krugman inferred that the Obama plan will not significantly reduce unemployment. He then concluded with what may be considered his latest nightmare, although it is not that different than his last bad dream:

I see the following scenario: a weak stimulus plan, perhaps even weaker than what we're talking about now, is crafted to win those extra GOP votes. The plan limits the rise in unemployment, but things are still pretty bad, with the rate peaking at something like 9 percent and coming down only slowly. And then Mitch McConnell says "See, government spending doesn't work."

However, as Yves Smith of Naked Capitalism points out, Obama seems to be aware of the problem with his first stimulus program, his awareness being indicated as well as explained by his more recent claim that the United States will generate trillion dollar deficits for years to come (see this, this, this, this).

What this specific rejoinder misses is the President-elect's willingness to appease the Republicans, who ought to be reeling from the disasters created by their Party, their most recent Presidential regime and the McCain campaign last fall. Given the bellicose nature of the Republican Party and its base, along with its strident adherence to its creeds, Obama may never again have an opportunity to successfully if not efficiently push through a decisive economic program. He ought to take advantage of it when he can and he certainly should refuse to corrupt the program to mollify the competition.


Toyota will temporarily close auto plants in February and March

It will do so because of declining sales, especially sales in the United States, according to reports (see this, this and this).


Israel’s Gaza operation is a “monstrosity”

This was the reported (this article can also be read in CommonDreams) position taken on Saturday (1.3.2009) by Miguel d'Escoto Brockmann, of Nicaragua, the sitting President of the United Nations General Assembly. "Once again, the world is watching in dismay the dysfunctionality of the Security Council," d'Escoto Brockmann asserted in response to the United States undermining a Security Council statement calling for an end to the fighting in Gaza. CNN International includes d'Escoto Brockmann's statement in the following report:

Minnesota Supreme Court rejects Norm Coleman’s obstructionist petition

According to the Talking Points Memo report about the decision, Coleman has nearly run out of time and luck. The relevant court ruling can be read here.

Krugman’s nightmare

Paul Krugman's latest piece warns his readers that politically mucking around with stimulus legislation is dangerous. He concludes with:

It takes Congress months to pass a stimulus plan, and the legislation that actually emerges is too cautious. As a result, the economy plunges for most of 2009, and when the plan finally starts to kick in, it's only enough to slow the descent, not stop it. Meanwhile, deflation is setting in, while businesses and consumers start to base their spending plans on the expectation of a permanently depressed economy — well, you can see where this is going.


Does Obama intend to capitulate to Republican tax cut loons?

It currently looks that way, according to a Wall Street Journal report (the link comes via a fine analysis of the tax cut proposal in Naked Capitalism, but also see this, this, this, this, this and this). According to the Journal article:

President-elect Barack Obama and congressional Democrats are crafting a plan to offer about $300 billion of tax cuts to individuals and businesses, a move aimed at attracting Republican support for an economic-stimulus package and prodding companies to create jobs.

The size of the proposed tax cuts — which would account for about 40% of a stimulus package that could reach $775 billion over two years — is greater than many on both sides of the aisle in Congress had anticipated. It may make it easier to win over Republicans who have stressed that any initiative should rely more heavily on tax cuts rather than spending.

Why would a rational person prefer government spending to tax cuts? A few reasons:

  • The forsaken taxes that will thus remain in the hands of consumers and businesses may not be spent immediately on consumer goods or capital stock but used instead to pay down debt, saved for a rainy day, etc. This usage would dampen the stimulus effect produced by the stimulus program.
  • Compelling social needs exist which federal government spending can best address, needs, incidentally, that were directly or indirectly caused by the practical use made of the market fundamentalist creed over the past thirty years (on which, see this). These needs include infrastructure creation and repair, deeply underfunded medical, educational and welfare programs that successfully address primary human needs, etc.
  • Government spending provides a better and bigger bang for the buck, so to speak, than tax cuts meant to increase private spending.
  • The aid some states will need to remain solvent during the crisis.

A tax cut might have appeared to be a wise political gambit to Obama and his inner circle, although the ultimate success of this indulgence in real political manipulation is doubtful. I say this because the tax cut proposal recently floated in the press is sizing up to be a waste of money and a likely-to-fail attempt to co-opt Congressional Republicans and the noise machine which provides the GOP with ideological coverage. Building a bi-partisan consensus around a policy error is not the path the country needs to take, I would suspect.

The United States provides Israel with diplomatic coverage for the Gaza massacre

According to an Associated Press report, the United States "…blocked approval of a U.N. Security Council statement calling for an immediate cease-fire between Israel and Gaza's Hamas rulers…." U.N. Secretary-General Ban Ki-moon had already asked Israel to terminate its ground operations in Gaza, permit Gaza to receive humanitarian aid and protect civilians endangered by the fighting.

Class and distributional conflict in California

From a recent article in the Sacramento Bee (cited by Mish's Global Economic Trend Analysis and Naked Capitalism):

State workers donned their rhetorical boxing gloves in 2008 and slugged it out — with each other.

This column and its companion blog chronicled some of those battles: state workers in Sacramento vs. those everywhere else, staff vs. management, sworn law enforcement officers vs. non-sworn public safety workers, dues-paying union members vs. workers who pay reduced "fair share" fees and just about everyone, it seemed, vs. the correctional officers union.

Online, state workers defended themselves from attacks by private-sector workers and jabbed the governor (not so affectionately referred to as GAS) for wanting to furlough or lay off workers. And they attacked each other.

Forms of solidarity, such as unions, are most severely tested (and are most difficult to create) during those moments when they are needed most. Groups, organizations and the like will decompose when individuals feel compelled to survive as individuals without also affirming a sturdy commitment to any or most other individuals. Abstractly put, solidarity is the non-rational solution to the actual or potential lack of solidarity.