Categotry Archives: It’s the Stupid Economy

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The Case Against Free Trade

Categories: A Day in the Life, Call and Response, It's the Stupid Economy, Politics (n.): a strife of interests masquerading, Primary Sources, The Wild Wild Web, Tags: , , , , ,

I spend a lot of time arguing on Facebook. It comes and goes as a use of time. It’s often frustrating, but in the best moments, it feels like there’s a real opportunity to change someone’s mind. Facebook has become this distilled part of the Internet where enough smart, thoughtful people spend enough time that it’s like tapping into a collective town square. The greatest democratic theorists always talked about the proverbial town square, the marketplace of ideas, a place where concepts are freely exchanged and rebutted and synthesized into the best decisions for our future.

Granted, my Facebook feed may be more like this than the average feed. In a world where people talk about their feeds being overly siloed and sectioned off from disagreeing opinions, the majority of my Facebook friends have been associated with APDA, the American Parliamentary Debate Association. This league of collegiate debaters has its flaws, but it does bring together a group of intellectuals who care about persuasion and the future of the planet’s people. And that’s pretty cool.

It also has plenty of people who disagree with me. Then again, the main reason my feed is probably not siloed into people who agree with me is because there are very few such people, if any. There’s a reason my site is called the Blue Pyramid, after all.

Anyway, a recent argument, primarily with some former Boston University debaters, but also with some former Cornell debaters, enabled me to distill a response to one of the most prominent arguments against free trade. And I feel like I want it to be in a more prominent and permanent place than a Facebook sub-comment thread. Both because I live to try to persuade but also because it proves that all the time spent arguing on Facebook doesn’t have to end fruitless with a feeling of unsettled angst. It’s not just wasted time. Even if a lot of it is.

As background, the initial discussion topic was Democrats and leftists, including Bernie Sanders, celebrating Donald Trump’s decision to pull the US out of the Trans-Pacific Partnership (TPP). I am one of those leftists celebrating this, as a lifelong opponent of free trade. We then got into a lot of the reasons I’m against free trade. Part of my case could be the entire book The Shock Doctrine. But I see free trade as problematic for even more reasons than Naomi Klein does. I see it as the proliferation of unfettered capitalism, the system that creates waste and worships waste as a value above all others. It places corporations in a superior position to nation-states – while I’m not a fan of either institution, I’d choose nation-states every time. They at least try to have popularly utile motives, whereas corporations care only about the bottom line.

But I’ve always believed the most damning thing about free trade, especially in its recent incarnations as something that mainstream establishment politicians want to see sweep the globe into one giant market where enormous Western multi-national corporations (MNCs) run wild and free, is that it’s telling a false story about competition. The narrative is that a level playing-field will enable those with the most talent and merit to rise and gives everyone an equal opportunity to succeed. The reality is that the playing-field purported as level is anything but. Free trade is giving some groups a 200-year head-start on a race and then celebrating how fair it is because everyone was allowed to run. Worse, those with all the monetary and power advantages of having been competing in a capitalist marketplace for vastly longer are the ones who write the rules of how the race will be run. The idea that this is passed off on the developing world as a fair fight is laughable.

I got two key counter-arguments in defense of free trade, though, which I want to reprint my responses to because I think they’re the most clear and cogent articulations of my beliefs on this complicated issue that I’ve put forward. And then I’d like to invite y’all to join the debate on this critical issue of our time if you have further counter-arguments.

The first counter-argument questioned, essentially, why I would advocate for protectionist trade when that essentially divides the world and what I ultimately want is a united world under the banner of a more socialist structure. Isn’t free trade a possible stepping stone to a united socialist world? Am I cutting off my nose to spite my face here?

My response:

Think of it like harm reduction vs. the AA model of addiction cessation.

Ultimately, I want the AA model for capitalism – no capitalism, nowhere. That’s my ideal. I recognize how unlikely it is, but that’s not going to stop me from railing against capitalism my whole life until other people see its flaws too.

But, in the meantime, we can also seek harm reduction. This is why I’ve spent most of my career in non-profits and why I’m not a pure accelerationist. I see protectionist trade as harm reduction. With free trade, the top-dog best-funded MNCs end up owning everything and superseding governments. They are able to make the rules and will turn the globe into an unfettered capitalist wasteland. Protectionist trade, while riddled with innate flaws of capitalism, curbs that outcome that the MNCs so desperately want. It enables some countries to protect themselves and their interests rather than being overrun by greedy colonialists.

Protectionism in America doesn’t really *directly* protect anything I care about, which is why people often assume I believe things I don’t when I align with Bernie and Trump on this issue. I don’t care about the American worker. I care about the Nigerian worker. And if the most powerful country in the world that holds most of the rapacious MNCs takes a big step away from free trade, it extends that trend around the globe, making it more likely the people I care about are saved from free trade’s devastation.

It’s kind of weird, I guess, that I vehemently agree with both Bernie Sanders and Donald Trump about the importance of opposing free trade, but not for the reasons they do. But it’s also why the typical rebuttal to economic populism doesn’t resonate with me. People are basically saying “those jobs ain’t coming back, fools!” And it’s true. Automation has killed American manufacturing, permanently. But I don’t care about that. Automation and free trade are both killing everyone’s jobs, pretty quickly, and part of our thread was about the need to develop safeguards in a post-work society. Which, by the way, will not be aided by allowing corporations to sue governments for implementing protections that limit profits. If we need to give universal basic income or benefits or even just the right not to be enslaved by a corporation to former workers who have been edited out of the economy, we will need to tax corporate profits to do that. Both of those things could be clear violations of the TPP as written. This is bad.

But then I got the seminal argument, the one I see most proliferated in defense of free trade, the golden myth propagated by everyone to carry the torch of free trade forward for a new generation. And my response to it was actually liked by the folks asking the questions and arguing against it. If I didn’t change their minds, I at least offered something to give them pause. So this is the main focus of this post and what I want people to think about.

The question:
“What do you make of the statistics that show that this sort of trade and development has reduced extreme poverty ($1 or $2 a day) to single digit percentages in 30 years from 60-70 percent, if I’m right…for all its manifest problems? And before industrial capitalism virtually everyone that lived in extreme poverty.”

My response:

I feel like what’s being calculated is highly misleading. On a capitalist spectrum, the numbers have slightly increased. But people have traded functional subsistence economies for being enslaved by a capitalist machine that destroys their countrysides and makes them all the property of foreign sweatshop-owners and foreign resource exploiters.

This is a complicated question, but there are a few key points in evaluating this widely propagated (mis)perception of free trade:

1. Comparison to pre-colonialism. The only suitable comparison of current standards of living is to pre-colonial days. Because I see free trade and directly colonial ownership as two phases of the same trend. And if you started with chattel slavery and then went to Jim Crow, you don’t get congratulated because Jim Crow is better than slavery. You get blamed for enslaving people in the first place. Developing world poverty was not an innate state of being as it’s represented as being – it was manufactured by colonialism. A shitty quick fix that puts everyone in the GDP matrix does not count as “lifting people out of poverty”. It’s rearranging the deck chairs on an unending disaster.

2. What is counted. My argument would be that if you’re living in a functional pre-colonial barter economy, or even a somewhat feudal economy, all of your labor and standard of living is invisible to conventional contemporary capitalist metrics. You may be making $0/day because you’re not paid in money or you’re paid in a money worthless compared to the American economy. But this does not mean that your life is awful or that you are even functionally poor relative to your actual sphere. Globalization puts everyone in the same race without recognizing that there are different definitions and perceptions of the good life in other countries and different scales of magnitude.

3. Winners and losers. These averages and things are often calculated with the few robber barons of each developing country factored in. Not only can this skew the math, but it recreates the wealth inequality situation over and over again in societies all over the globe. This is deeply problematic because capitalism tends to recreate its own kind of aggressive feudalism where the few rich people functionally own everyone else in society and can abuse them and get them to do whatever they want. That’s actually somewhat new in the US and it’s giving us Trump, endless government corruption and cronyism, and will eventually replace democracy with kleptocracy. That’s bad for everyone’s quality of life.

4. Materialism. The problem with poverty and quality of life as measured by GDP stats is that it puts the innate value on materialism. The ability to own toasters and cars and other things, regardless of how wasteful and problematic these things are. Are these really necessary for the good life? Refrigeration increases the convenience of your eating experience so you can run back to your 16 hour/day job. But that 16 hour/day job in the West is prompting the world’s largest stream of anti-depressants and people trying to mortgage their schedule to have one day at home where they actually cook a meal and taste their food. How to compare this to a pre-colonial society where people lived on the land, took 3 hours for each meal in a three-generation family under one roof, and took time to appreciate each other as people? It’s a hard question. Capitalism dismisses the latter situation as poverty because it doesn’t cut the mustard in dollars and cents. I think it’s probably objectively a preferable way to live. I don’t see someone being forced out of that to go work in the sweatshop so they can eat processed food that gives them cancer in the middle of a tenement as being “lifted out of poverty”. But that’s how it gets calculated.

5. Access to health care, the internet, etc. This is the one area where I think there may be some ground to argue that modern life and culture does improve quality of life across the board. The problem, though, is that the more unequally things are distributed, the less you can make arguments from this vantage. If socialism were the overriding philosophy, or even protectionist trade, then equal access to improved modern medicine, the internet, and quality education would be priorities. Unfortunately, free trade has created kleptocractic neo-feudalism in most developing countries, meaning that these fundamental improvements are proportionately accessible only to the rich. This is part of why I’m advocating for protectionist trade. If you run the state-run oil company and have some capitalism, you can still use those oil profits to give everyone hospitals, schools, roads, and internet-accessible phones. If it’s everyone for themselves in the MNC-run rat-race, those are only going to be accessible to the people at the top. I think this is the best conduit to improving lives and the best argument for the capitalists. But free trade actively hurts this benefit.

What do you think? Is free trade an unfettered step in our ever-upward trajectory of progress that only Luddites and idiots would oppose? Or is free trade a bill of goods being sold to us by ever-hungrier MNCs controlled by a Singularity-like focus on cancerous growth? Or something in the middle?

I welcome your responses and thoughts. Send me something, post on your blog and send me the link, argue with me on Facebook. This is an important discussion to be considering as we face the future.

If you’re connected to me or the debaters I was debating against on Facebook, you can also see:
The original post with all comments
The specific comment thread where we discussed these aspects of free trade at length

Using this image ought to stoke some reactions!

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The Singularity is Already Here

Categories: A Day in the Life, It's the Stupid Economy, Politics (n.): a strife of interests masquerading, Tags: , ,

The Singularity is already here. It’s corporations, not computers.

You’ve probably heard of the Singularity. It’s a hypothetical future event, dystopian in nature, wherein the need for human intervention in human affairs is swept aside by super-intelligent computers who self-teach, self-improve, and self-replicate their way to utter dominance. The idea is that if we create sufficiently smart artificial intelligence and give it the power to make autonomous decisions, it will eventually reach a critical mass of understanding that gives it unassailably more capability than humans could ever have. After all, computing power scales exponentially compared to human intelligence, or at least will in theory once we build a computer as impressive as a human brain. Given the history of chess computers starting out as pathetic and evolving into unmatched world champions, this is seen as academically a matter of time. The Singularity is taken as a when, not an if, by most serious scientific communities.

The scary part of the Singularity is not that there could be something more intelligent than human beings, either individually or collectively. It’s a blow to our ego we perhaps haven’t fully internalized, but the thing that really terrifies us is that we would be enslaved by our new hyper-smart robot overlords. It is a distinctly human fear that anything possessing more intelligence than we have wants to capture, kill, and enslave. Then again, we would have programmed the robots in the first place, so probably a legitimate concern that it would reflect traditional human values. And a lot of the doomsday scenarios proposed by scientists hand-wringing about the Singularity have this darkly comic note about what the robots might be trying to achieve. Because at the point of Singularity, the robot’s goal might just be to produce more cereal boxes or to organize the most efficient transportation system possible in Los Angeles, California. Yet with unlimited power fueled by unlimited intelligence, the robots could run wild, literally manipulating all human emotion and action into the cause of cereal box production or keeping the trains running on time. Robots and computers, after all, are not programmed with a multiplicity of functions and goals in mind. We teach them to value one thing at a time.

Let’s suspend, briefly, the obvious flaw in this theory, which is that something could simultaneously be smart enough to run circles around the collective intelligence of all of human history, yet sufficiently unsophisticated as to have literally one job. More advanced notions of the Singularity discuss a wider community of robots and computers all making each other more intelligent, but that also seems to conveniently leave out the ensuing debate they’d have about cereal boxes vs. LA transportation as priorities. And the idea that they might make their own decisions about what to value is often absent from the conversation entirely, though many observe that they are not likely to value human life with the same vigor that our own societies claim (yet fail) to. Then again, the movie adaptation of “I, Robot” offered a striking vision of the opposite dictum, namely a world where robots take the law “A robot may not injure a human being or, through inaction, allow a human being to come to harm” so seriously that they remove all free will from humans so they stop hurting each other. Which, hey, fair point. This is the same principle, near I as I can tell, that formed the basis of the Patriot Act.

But here’s what you need to know about what’s scary about the Singularity:
1. It’s a systematic structure that governs the goals and behaviors of all human society.
1. It manipulates and abuses human free will into doing terrible things to further its goals.
2. It cannot be stopped or reversed by humans.

What does that sound like to you?

Because to me, it sounds like free market corporate capitalism, circa 2017.

The programmed goal, of course, is the maximization of corporate profit. We live in a world where, under the label of “growing the economy”, maximization of corporate profit is seen as literally the only goal of individuals, groups, and government. Every speech by every Presidential candidate in 2016 (save for Bernie Sanders, and we all know how far he got) took for granted that this was the priority, nay, the purpose of government. Corporations are literally obliged to follow this dictate, under pain of lawsuit and removal from the economy. These same corporations and their minions are hastily trying to infuse the same goal into every government’s own laws, or supra-national laws, enabling people to sue the government for violation of the law of profit-seeking. The notion that profits must be made and must grow and that everything else good that can happen to people will flow from that fundamental principle stands as the unquestioned religious doctrine underpinning our society.

But here’s the insidious thing: no one is really making it happen. No one is pulling the strings. Oh sure, there are people like Milton Friedman and his henchmen who did the initial programming, that tried to plant as many people in as many positions of power to create this worldview. Like I say on the daily these days, read your Shock Doctrine. But the really dangerous thing about this world, now set in motion, is that there’s no one who feels like they are above the fundamental principle or has the power to stop it. We live in fear of “The Economy” like it’s a giant independent weather system or vengeful God, one that can be approached and we can react to, but is beyond our fundamental control. We don’t look at The Economy like a series of willful suspensions of disbelief or self-manipulations (you know, what it is). Instead, we see it as this all-powerful force of nature that governs who lives and dies, who lives well and lives poorly, who does what and how and why and every facet of existence therefrom.

But if you talk to a CEO, if you talk to a Board member, if you talk to the most powerful people on the planet, they will sigh and shake their head and try to convince you just how little power they have. A CEO will say they are hostages of the Board, of the profit mandate, of shareholders demanding growth. The Board will say the same about shareholders and legal obligations and that they can only do so much to influence the CEO they allegedly govern. And the shareholders will say they are just one of many in a sea of cacophonous opinions that only demand profit. No one is minding the store. The system is on autopilot, self-generating its goals. Even the Fed Chair feels pretty much enslaved by the whims of the market traders, who in turn feel powerless in the face of decisions made by CEOs and political leaders. It’s not even the tail wagging the dog. It’s the truly invisible hand.

Of course, this scenario is just as dystopian as us all being enslaved in the pursuit of cereal box production. Remarkably, that’s basically exactly what this scenario is. The pursuit of ever-spiraling economic growth is arguably the most destructive force in the history of humanity, jockeying to overtake nationalism with every passing day. (And it can’t be overlooked that this motivation fueled a lot of the greatest harms of imperialistic nationalism over the last half-millennium.)

For one, profit is literally waste. It is the money left over when everyone has already been fairly paid and accommodated. Seeking to maximize this is like programming the world to maximize trash accumulation. Which, not coincidentally, is also a major result of the infinite-growth profit motive. Profit is indifferent to consequences that are not in the realm of profit for the profit-seeker, from impoverishing others to creating literal miles-wide islands of trash in the Pacific Ocean to deforesting the entire planet. All that this motive cares about, like the production of cereal boxes, is the infinite maximization of money that is essentially waste.

Oh yes, I know there are theories that this waste will then get funneled back into the economy to help those poor people left behind. For one thing, this trickle-down notion had been thoroughly debunked even before the last ten years displayed a “recovery” that only helped the top 1-10% of the economy. But for another, even in the best case, this just funnels it back into a system that continues to have its only goal being generating more waste maximization for someone. If the someone rotates with the winds of The Economy, it can simulate the notion of upward mobility, but it’s still just choosing who gets to sit atop the largest trash heap. That person doesn’t end up really feeling any freer and any decisions they make to use that waste just go back into the same cycling system of waste creation.

Then we have environmental degradation. This is the most obvious and precipitous result of an infinite-growth model. As I’ve said repeatedly for years, the metaphor here is cancer. Infinite growth of cells that seemed helpful is literally what cancer is and it’s the deadliest and most intractable malady in current human existence. It’s almost like nature itself is trying to tell us something about how we live our lives! I mean, honestly, could the planet be any clearer? The growth model is unsustainable in every sense of the word, it is consuming resources the planet doesn’t have and converting those resources into poisons that are choking the planet and its inhabitants to death. And yet we blithely ride on autopilot, continuing to root for the cancer and fuel it in every way imaginable. Our best excuse for this is the idea that one of these cancer cells will grow big and powerful enough to come up with ways to defeat the cancer itself, while still not ceasing the necessary growth of the cancer. Or perhaps slightly more accurately, will come up with a way to enable the host to survive cancer while continuing the rapid reproduction and growth of the cancer cells. The premise seems deeply problematic. Even if this were theoretically possible, would we want to survive like that? Plenty of dystopian novels are engaging that question with a pretty universal two-letter answer.

This is to say nothing of wealth inequality, the other looming specter of unfettered capitalism. This is where the Singularity aspect of this charade starts to really ramp up, because the profit motive enables further and further consolidation of wealth. And that wealth is able to further and further buy off and corrupt elements of government control, regulation, and checks on power that would normally curb profit’s power. And this accelerates almost exponentially, where more money buys more power buys more deregulation to enable the accumulation of more money and repeat. It’s not a coincidence that Donald Trump, capitalist extraordinaire, is coming to power at this moment in human history. He may have technically spent less than Hillary Clinton on the campaign, but the popular thinkpiece meme that this means corporate spending on elections is no longer the magic bullet is dead wrong. He was the greater capitalist, the more accelerationist candidate for the corporate consumption of government. And many people are rightfully worried about what the country left to govern will even look like in four years after so much of its government has been chopped up and sold off to private interests.

Framing this as a partisan issue is deeply misleading, however. Bill Clinton, in the wake of Reagan’s popularity, championed privatization of everything and the reduction of government regulation as well. His slogan was not “It’s the safety net, stupid.” The fallout of violence, disenfranchisement, and poverty of his legacy is just now taking shape in the American understanding. He did just as much as Republican counterparts to dismantle any priorities for government that could rival the all-consuming profit-growth model. And now we have every government employee, literally and figuratively, deeply invested in the stock market. It’s a pyramid scheme I’ve discussed before, but the point bears repeating. When every worker in every non-profit sector, from government to schools to private non-profits, has their entire future invested, by mandate, in the world of publicly traded corporate profit, then there will be no one left to oppose the maximization of this corporate profit as an ultimate goal.

So stop your worrying about the Singularity! A far more insidious and dangerous Singularity is already here, already has lobotomized our collective imagination and replaced all of our hopes and fears with the generation of needless waste. Waste that’s killing the planet, killing those people who can’t keep up, and eventually consolidating all the wealth and power in a few small hands who still feel like those hands are tied to these all-powerful scheme. At least with cereal boxes, we might be able to see the absurdity of the system in practice. But when it’s as complex and self-serving as all the ways to maximize profit, when everyone is trained from birth to fear not having access to the wealth and privilege that comes with being on top of that profit ladder, it’s harder for us to see. Even today, as scientists rail against climate change and shout from the rooftops that something must be done, no one is connecting an end to climate change to the need to stop the corporate profit-growth model. We literally have a system designed to make humanity kill itself and its only known home in order to generate waste and no one wants to question it because the system seems even less controllable than the weather itself.

Think about that.

Again: We literally have a system designed to make humanity kill itself and its only known home in order to generate waste and no one wants to question it because the system seems even less controllable than the weather itself.

Of course, the problem is that, unlike robots that have us literally strapped into machines made to do their bidding, we can stop or reverse this Singularity. It gets harder every day, but we do have the power. We have to talk about this, have to observe the deep damage and destruction being done by the corporate profit-growth model, and start discussing better alternative ways of being. My favorite, as I’ve outlined before, is what I call The Maintenance Society. It’s a place to start. You may have a better idea. But any idea is better than this. As will become painfully obvious in retrospect to whoever digs up the carcass of this planet in a few millennia.

Maybe we just need to program super-intelligent robots to give us another priority. But I’d like to not count on that deus ex machina, or more accurately, that machinus ex deo. We can still save ourselves. We just have to recognize that the creation of ever more cereal boxes is not worth losing everything else.

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We’ve Come a Long Way, Baby

Categories: A Day in the Life, It's the Stupid Economy, Politics (n.): a strife of interests masquerading, Tags: , ,

cnbcscreenshot2a

Look at that headline. Look at it!

I know I was excited in my 6,000 word election recap to observe that the problems with our reported unemployment figure and its relationship to labor force participation data had become a mainstream understanding. But the headline of CNBC on jobs Friday? Wow. Now everyone understands what I first started talking about four years ago – the BLS headline figure for unemployment is not only not the whole picture of unemployment, it’s actively misleading.

Here, look, if we zoom out on the page, we can even see this headline in the sidebar:
cnbcscreenshot1a

Did you see it? The Labor Department says unemployment is at 4.6% — but here’s the bigger picture

It’s like Christmas. Well, it really almost is.

It may be weird or insensitive to gloat this much about something that represents the ongoing entrenched suffering of millions of Americans. But don’t misunderstand me. I’m gloating about being ahead of the curve on understanding a phenomenon that represents the revelation of past gaslighting of people who are suffering. This is a key distinction. I’m not excited that the unemployment rate has actually been above 10.6% for almost nine years. But I’m excited that people are talking about this fact widely and with greater awareness, because it means both that we are starting to get a better handle on the limits of capitalism and that other things I think may manifest themselves in the mainstream discussion. Like, for example, the idea that Donald Trump is a real threat to win the Presidency.

Oops.

While unemployment was reported to fall by 0.4% in November, it was one of those rare months where both Real Unemployment fell and the Reporting Gap increased noticeably. Real Unemployment did fall by 0.14% (to an 8-month low of 10.72%), presumably because seasonal hiring outpaced even normal seasonal adjustments in our consumer-obsessed culture. But the Reporting Gap increased by 0.16% (to a 6-month high of 6.12%), because holy hell is 4.6% not accurate.

Here are your charts:

Real Unemployment (red) and Reported Unemployment (blue), January 2009-November 2016

Real Unemployment (red) and Reported Unemployment (blue), January 2009-November 2016

Reporting Gap between Real and Reported Unemployment, January 2009-November 2016

Reporting Gap between Real and Reported Unemployment, January 2009-November 2016

The big picture is that an ever-increasing majority of the unemployed are invisible to BLS’ reported numbers, though are easily visible to a basic analysis of those same numbers. And really they aren’t invisible anymore, at the point where both the President-Elect and CNBC are talking about them all the time. And that’s something. Unfortunately, of course, it looks like the President-Elect’s prescription, much like adding even more cowbell to a Blue Oyster Cult hit, is going to be the same mistaken clang of lower taxes to bail out the rich and further inflate what is widely being seen as another calamitous bubble in our marketplace of exhausted ideas. The man who touted the problems with our current unemployment rate and painted himself the champion of the little guy remains a corporate kleptocrat with Reagany presumptions about how capitalism “works”. What else can you expect from our next Entertainer-in-Chief?

Have no fear, when Trump’s bubble bursts and unemployment, real and imagined, spikes further, I’ll be here to cover it in my dinky little Excel charts. Until then, let’s keep planning for the post-work economy, shall we? Stephen Hawking is starting to talk about it, but he still thinks that “retraining” is a good prescription for capitalism’s endless stream of “losers”, rather than realizing we need something to replace jobs and, ultimately, the whole system. But the surprise subhead is that Stephen Hawking is still a lot smarter than Donald Trump.


This is part of a continuing series on the under-reporting of unemployment in the United States of America.

Past posts (months indicate the month being analyzed – the post is in the month following):
May 2016
September 2015
July 2015
June 2015
March 2015
February 2015
December 2014 – labor force participation assessment
December 2014
November 2014
October 2014 – age assessment
October 2014
September 2014
August 2014
April 2014
December 2013 – seasonal assessment
December 2013
March 2013*
August 2012*
July 2012* – age assessment
July 2012*

*My initial analyses led to a slight over-reporting of the impact of the reporting gap, so the assessments in these posts are inflated, as explained and corrected in the December 2013 analysis.

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All Politics is Personal: The Epic and Foreseeable Failure of Hillary Clinton

Categories: A Day in the Life, It's the Stupid Economy, Politics (n.): a strife of interests masquerading, Tags: , ,

hrcconcession

Disclaimer: I have deliberately waited a week to post this since the election because most of my friends and people I care about have spent the week grieving. If you are still grieving, if you are tender from the election results, if you are mostly feeling fear and outrage, then I recommend you not read this post. This post is intended for people who have enough emotional distance from what happened on November 8th to start looking at the 2016 race critically and analytically. That may not be you. That may never be you. That’s okay. I’m really not trying to poke bears or badgers or hornets’ nests, but I do think the perspectives in this post are important to building a leftist movement in the wake of Donald Trump’s impending presidency.

Disclaimer Two: This post will not be focusing on racism, sexism, xenophobia, and homophobia as the roots of Donald Trump’s defeat of Hillary Clinton. I am not hereby claiming that these hateful perspectives had nothing to do with Trump’s election. It is, however, my belief that they were ultimately a pretty minor factor in Trump defeating Clinton. Many people have posted in the last week that anyone who thinks these isms and phobias were not 100% of the cause has no business speaking and is wrong. If you are one of these people, you may choose to read my post to see a counter-argument. But if you do and wish to respond, please do not accuse me of completely ignoring the role that these played in Trump’s election. You may reasonably argue that I minimized their role and I welcome a logical debate about that. I think that the role these factors played in Trump’s election both exists and is something that we basically can’t, as leftists, do anything to change or fix in the future. The racists, sexists, xenophobes, and homophobes are not the part of the country that we are reasonably trying to persuade. If you actually believe that 47-52% of the country belongs in those categories, then we have nothing to talk about in planning for a future, other than waiting 40-60 years for those folks to die. I prefer a more optimistic look at the future, and one that I think is warranted as soon as we stop nominating Clintons for high elected office.

Disclaimer Three: This post is long. If you’re looking for a TL;DR, I would read the title of the post. In other words, the disastrous defeat of Hillary Clinton is, primarily, the fault of Hillary Clinton and, to a lesser extent, her supporters. If you’re too offended by that notion to see how I reach that conclusion, we’ll both be happier if you stop reading now.

Introduction: Unemployment Numbers and the Gaslighting of the American Workforce

In July 2012, I began periodically posting about the emerging gap between the traditionally reported figures of American unemployment and the seeming reality of said unemployment. As the labor force drained of people in the wake of the Great Recession, with millions of Americans giving up looking for work, retiring early, and (most importantly) never entering the labor force in the first place, reported unemployment started to decline much faster than it seemed it should. Labor force participation dropped precipitously to ultimately 35-year lows, while reported unemployment recovered from an alleged peak of 10% to under 5%. My analysis showed that unemployment actually stayed above 11% for years and, as recently as June 2016, was still as high as 10.96%.

When I started posting about this, it was before the 2012 election, and the words “labor force participation” had seemingly never graced a newscast about unemployment figures. The reported 8% unemployment was seen as too high, but at least stabilizing – my data had the figure close to 13%. In July, I coined the term Reporting Gap for this nearly five-point figure that had been steadily climbing and observed this: “Suddenly it’s a little more clear why the jobs haven’t been coming back and why no one you know feels like the economy is getting better. Suddenly we have a chart that reflects how the recession has actually felt.”

The insidious thing about this gap, I observed repeatedly over the ensuing four years, is that it makes people who aren’t succeeding in the current economy feel like they’re crazy. If unemployment is reported as being 4.9% but is actually 11%, those 6.1% of missing people feel like they are total losers – that everyone else is getting a job and doing fine but there’s something individually wrong with them that keeps them in this ever-shrinking group of folks who just can’t get work. And over time, they start to doubt the narrative they’re being told about the economy and the world. Can they really be this pathetic? Or is there some book-cooking going on that shades them out of the picture?

A funny thing happened on the way to 2016. By this fall, every newscast was talking about labor force participation cratering and sometimes the participation rate would even be discussed before the much vaunted unemployment figure. News would actually note that a decline in unemployment often wasn’t a good thing, because it just meant more people had given up. I, of course, had nothing to do with this – nowhere near enough people read my blog to make a difference. But I had picked up on a trend early that eventually became too big and obvious to ignore: the “recovery” was one that edited out people and jobs and found a way to squeeze the remaining workers into “greater productivity” (longer, more stressful hours) to maximize profits. At one point, I superimposed the stock market recovery over the increase in the reporting gap and it was a nearly perfect fit. Corporate America had found a way to sustain the loss of jobs in the country while rebuilding its own successful business model. The rich got richer and the poor got nothing.

Enter Donald Trump. He didn’t use the same analysis I did of actually examining BLS’ own numbers and applying a reasonable labor force participation rate to them. Instead, he used U-6 and exaggerated it a little, sometimes a lot. He said unemployment was still 18-20%, which I don’t think it had ever been. I wrote about this in August 2015. He was very wrong with the specifics, but he was fundamentally right to observe that American workers had been set adrift and told that everything was fine. And he was angry about it. In speech after speech, he tapped into the feeling of being invalidated, the feeling of being gaslighted, of being told that you are not experiencing the economic hardship that you are. And in so doing, he galvanized people who knew there was something wrong with the tale of the recovery being spun by a Democratic administration and the media that didn’t sit with their own experiences. Obviously many of his prescriptions for the situation were wrong, like building a wall, and the idea of an outsourcing businessman being the savior of the newly unemployed stretches any feasible credulity. But if the reality you feel, deep down, that no one is validating, suddenly gets validated, you feel an immense loyalty to the guy who validated it. I would argue this is where Trump’s traction and real appeal to the people who swung this election began.

Why Bernie Would Have Been a Better Opponent in this Context

The idea that Donald Trump, billionaire with rich father and icon of all that is 1980s about America, would be the hero of the working class is, on face, laughable. The fact that he somehow pulled off this stunt is a remarkable testament to the willingness of the American voter to appreciate the message even if the messenger is the embodiment of its opposite. That said, Hillary Clinton was in no position to criticize Trump’s status as the messenger here and, aside from a few observations of the hypocrisy of the tycoon critiquing offshoring after having offshored tons of jobs, she didn’t try. It is perhaps the most American part of this whole election that in 2016, the two major parties nominated two gold-plated billionaires in the year of working class populism. Reminiscent, perhaps, of 2004, when the major parties offered two staunch defenders of the Iraq War at a time when the war was becoming deeply unpopular. No better evidence of the irrelevance of the major parties to popular democratic interests could be given.

But of course, there was a third road, which was Bernie Sanders. Now I am not here to say Bernie would have definitely definitely won the general election against Trump, though it is my belief he would have. And I’m certainly not here to cite as my main piece of evidence that polls which also said Hillary would be mopping up the floor of the general election with Trump’s toupee said that Bernie would do so to an even greater extent. What I will say is that Bernie would have had no problem attacking Donald Trump for being a businessman, a tycoon, and a lifelong enemy of the working class he now claimed to espouse. And rather than this accusation coming from, say, the pot, it would have been coming from a man whose style could most generously be described as “rumpled,” who had no evident personal wealth, and who had spent pretty much his entire waking life talking about the plight of the poor and working class. Suffice it to say that this would have measured up considerably better to Trump’s claim that he knew how to dismantle the system because he’d been rigging it than a person who wouldn’t release the transcripts of secret speeches she gave to bankers for the six figures “they offered.” If you’re a working class voter and you look at Trump and Clinton, you see two people who are nothing like you and you take the one who sounds like they know what you’re going through. If you’re that same voter and you look at Trump and Sanders, you see a guy who is nothing like you and one who reminds you of you, and they both have the same general message about relating to you. But one of them has lived a life you can connect with and the other has been its boss. There’s really no comparison.

Yes, yes, red scare, red scare. The voters who we were supposed to worry would condemn Bernie Sanders for honeymooning in Moscow and cozying up to communist Russia just voted overwhelmingly to elect a man who repeatedly praised a former KGB agent as the strongest leader he knew. Trump was basically overtly accepting help from the Russians, placing Hillary Clinton in the interesting position of playing McCarthy to Trump’s pinko ways. She warmed to the argument robustly, willingly invoking how she might go to war with Russia in the third debate just to demonstrate how dangerous Trump’s Russian connection could be. And look where that got her. Turns out this voting bloc that tipped the 2016 election was a lot more afraid of local bureaucrats than former Soviet ones.

Of course, the primary argument that Team Hillary used against Bernie throughout the primaries, one that got extraordinarily loud and obnoxious as the general election approached, was that the Republicans would dig up all kinds of crazy dirt on Bernie and throw it at him for – gasp! – the first time, whereas Hillary had “survived” twenty years of such bashing. There is no more absurd, disingenuous, or damaging argument that anyone made or thought during the whole campaign. And yet this line was absolute gospel, a full-scale mantra, for Hillary supporters up until a week ago. No counter-argument would be heard, even when I suggested that this was question-begging at absolute best. By “survive,” it is technically true that Hillary Clinton had not actually dropped dead from the long-running Republican campaign to discredit her and embroil her in scandal. But the truth of this argument depended on an outcome that never came, namely the presumption that she would be a successful Presidential candidate. She had blown an enormous presumptive lead in 2008. The only thing she was ever elected to in her life was a US Senate seat from New York, a state which has elected exactly one Republican Senator since 1980. In those races, she beat Rick Lazio, a four-term Congressman who was brought in late to replace scandal-ridden Rudy Giuliani, and John Spencer, a former mayor of Yonkers. In the latter election, despite running against a former mayor who had absolutely no chance, she spent a 2006 Senate-race-high $36 million on the campaign.

To say that these electoral wins amount to “surviving” years of attacks is just shoddy logic. This is without evaluating the merit of any of the attacks or not. You can argue that Clinton is the most clean-nosed politician in history and all the attacks are (pun intended) trumped up nonsense. You can argue that she’s super-corrupt and hasn’t been caught for half of what she’s tried. Doesn’t matter. The point is that two decades of her being associated with corruption, scandal, dishonesty, and changing her position on major issues was never an asset. It was not proof that she could survive anything. It was proof that she was a ridiculously vulnerable candidate for whom millions and millions of people had decided they could never ever vote, no matter what.

Yes, Bernie Sanders is a socialist, an atheist, and culturally Jewish. His wife once did something a little shady with her university position. No doubt all of these things would have peeled some voters away from him. But marginally? I don’t think there are any people who would be peeled there who voted for Hillary Clinton in the 2016 general election. His socialism? Right in line with the populism of 2016, and see the Russia analysis above. Atheism? Does anyone think Hillary Clinton believes in God or vote for her because of it? Judaism is a flashpoint for the racist Trumpers, sure, but did anyone who feels that way about Jews vote for Hillary? And a shady scandal involving a spouse… yeah. That’s going to be worse than the Clinton legacy.

So at best you get a push, and Bernie loses like Hillary did. Except, of course, that Bernie had momentous and excited enthusiasm behind him, was in tune with the year’s populist sentiment, could actually critique Trump’s elitism from a different vantage point, and had this little thing called humility. More on humility vs. entitlement in a bit. Suffice it to say that I think Bernie Sanders turns out a lot of folks who voted third party or stayed home this election, in addition to swinging those white working class Obama voters in Wisconsin, Michigan, Pennsylvania, and Ohio who swung this electoral college toward The Donald.

And that’s to say nothing of not having to bully people into voting for him as “the lesser of two evils”. Which, as a concept, is why Trump won.

The Lesser of Two Evils Made the Most Evil

Hillary’s camp was quick last Tuesday night to start blaming third party voters for everything. Facebook feeds, news media, and all manner of angry Clintonites have been quick to jab the finger at me and my kindred people, third party voters. Apparently it’s all our fault that Hillary Clinton couldn’t beat Donald Trump.

The reality, of course, is the opposite. If no one believed in the concept of voting for “the lesser of two evils” and everyone had refused to vote for someone they didn’t like or support, Clinton would have won the election easily.

According to CNN exit polls from the general election, 18% of voters this year disliked both candidates. They broke 49-29-22 for Trump-Clinton-third party. Trump won this election, as I long predicted he would, by winning the race to the bottom. Tons of Americans hated both of these candidates. Most of them stayed home, disgusted. Those who turned out and chose Trump or Clinton anyway overwhelmingly voted for Trump. Had they all voted for third party candidates, Trump’s total would have taken a 9% hit and Clinton’s only 5%, yielding an electoral landslide for the latter.

For reference, only 2% said they liked both major candidates and there wasn’t enough data here to even see how they split. Surprisingly, “love trumps hate” and “when they go low, we go high” were just slogans and had no impact on this race to the bottom.

The fact that 78% of voters who disliked both major candidates still voted for one of them signals just how bullied the American voter is by the mythology of the two-party duopoly. But it also leads us to one of the most important realities of this campaign: that the lesser of two evils cuts both ways. And this makes the most frequent and loudest rallying cry against Trump voters totally nonsensical. This rallying cry states that all Trump voters are awful, horrible, no good, very bad people who have evil in their hearts. They’re all racists, all sexists, all want everyone you know and love to suffer. And that is why they voted as they did.

My response to this is as follows: had Hillary Clinton won and I spent the next week of my life on Facebook decrying how every Hillary voter wants foreign Muslims to die painfully, how they’re all imperialist militarists, I just don’t think that would have been taken seriously.

Indeed, I had a little preview of this in an interaction with Edward Fu on Facebook the day of the election, when I said that a vote for Hillary was a vote for mass murder. He responded by asking “So to be clear – if I vote for Hillary I’m either uninformed or pro-mass murder?”

I responded with “Hillary Clinton believes in war as an effective tool for foreign policy. It seems very likely that she will start a major war in her presidency. Even if she doesn’t, she is likely to kill many more people than the already very hawkish Obama. I don’t think this issue is a priority for most voters, because it doesn’t particularly affect Americans. Or many people see it as inevitable or even good that a lot of our time and money is spent killing foreigners. I am happy to make it a priority to disagree.”

The point is that most Americans did not associate a Clinton vote with what I see as the greatest likely impact of her Presidency that never happened, namely major war(s). And while I would have depressedly taken to Facebook to remind everyone that they had voluntarily enabled whatever war emerged in her first term, most people were not thinking about this. They were thinking about glass ceilings and a slate of policies cribbed from Bernie Sanders and not Trump not Trump not Trump. But this is really important. Because most people voting for Trump were thinking about change and Republican appointments and not Clinton not Clinton not Clinton. Or really just the last part. They aren’t horrible people. They just hated Hillary Clinton a tiny bit more than they hated Donald Trump. And if you were willing to support America’s war with Syria or Russia or Iran or whoever the next appointed Bogeyman would be in the Clinton administration in order to beat Trump, maybe you can be a little more sympathetic to someone who was willing to support the same person David Duke did to beat Clinton.

If you just don’t buy this argument at all, I’m guessing it’s because you’re yelling the following argument:

“But She Was So Qualified!”

This argument for electoral viability, honestly, is almost as ridiculous as “she spent twenty years getting everyone to hate her, so how could she lose?” Americans do not, as a rule, vote for President based on qualifications. They vote for the person they like and trust. Or, this year, dislike and distrust the least.

You know what the previous biggest mismatch of Qualified vs. Unqualified presidential candidates was? 2008. John McCain vs. Barack Obama. Hint: Obama was less qualified. Spoiler alert: he trounced.

Indeed, the Democrats have always been bringing the less qualified winner to the party since FDR. Bill Clinton? Way less qualified than GHW Bush. Jimmy Carter? A virtual unknown. JFK? The textbook example of a greenhorn. People freaking loved these guys. Well, not Carter till he was out of office. But you get the idea.

I think this is all that needs to be said to rebut the argument that Clinton’s resume was not enough to overcome her being a woman. A Black man had vastly less qualification for the Presidency and dominated. And if you think America likes Black men more than White women, several million inmates would like to register their personal dissent. I am not going to say sexism had nothing to do with Clinton’s loss. But the evidence is just not there that this is what was predominantly behind her losing, especially as the more qualified candidate. In fact, a pretty convincing argument would say that being more qualified was a hindrance in this race, especially when following two terms of her party’s Presidency. The fact is that Hillary Clinton is uninspiring, uncharismatic, and pretty bad at campaigning. Late in the general election, even when she was supposed to be en route to a rout, even pro-Hillary thinkpieces could admit this and tried embracing it as a strength instead of recognizing its obvious weakness.

You can say that she gets held to a different standard as a woman. Somewhat. But Barack Obama also gets held to a different standard as a Black man. And he overcame it, because he is actually good at the things that lead to Presidential victories. And there are women who are good at those things too, who aren’t carrying two decades of baggage around that makes people rule out voting for them ever. Elizabeth Warren might have gotten 400 electoral votes heads-up against Trump.

And this is part of what makes it so hard to talk about this election with the crushed Clinton supporters. Because they had started to buy the argument that Clinton was the last best hope of womankind, that she even somehow embodied womankind itself. She succeeded in convincing her supporters that she was an avatar of all womanhood, that no matter her past and her dubious dealings with her husband, no matter that she was a First Lady before holding elected office, no matter that she changed positions on things depending on who was in the room with her at the time, she was a stand-in for all women. And I can understand why people would feel that way about the first woman major party nominee for President, and doubly so when going against Trump and his boorish misogyny. But this was not an election where “Do you like women?” was on the ballot or “Do you trust women to run the country?” was a voting issue. Hillary Clinton lost White women 53-43. She lost people who were somewhat bothered by Trump’s treatment of women 75-19. Seventy-five to nineteen. Hell, she lost 11% of those who said this treatment bothered them a lot!

This association with Hillary Clinton and womankind was one-sided and self-selective. And it started before the primary with the insidious campaign slogan “Ready for Hillary”. Do you see what they did there? The implication was that the only reason you could possibly oppose Hillary Clinton for President is if you weren’t ready for a woman President. This, of course, was followed by the slightly less insidious “I’m With Her” with basically the same connotations. The race was couched as those who are sexist vs. those who are not.

And up until last Tuesday, heck, up until this minute for many in her camp, they never ever stopped believing the truth of that concept. Which of course leads to depressing conclusions if you think that this was the last best woman for the job. Of course, Barack Obama’s slogan was not “Ready for Barack” or “I’m Not Racist”. He did not try to bully people into voting for him to prove they were not something awful. Instead, he talked about hope, change, and yes we can. And whether he delivered on those promises or not, those were effective strategic choices, proved to be effective again this year as Trump presented himself as the candidate of change.

Of course, Hillary Clinton had no avenue for being an advocate of change. She was the ultimate establishment figure, framing this as experience and steadiness. She was following two terms of her party’s Presidency and felt she had to say that those terms had gone well, ignoring those who felt otherwise. And this is not necessarily a reason we should blame Hillary Clinton for anything other than wanting to run. She was the wrong candidate for this time in history, for this office. But there was one major thing she did that exacerbated her non-change-ness, her establishmentarianism, her extreme un-Obamaism…

A Sense of Entitlement

Nothing made people like Hillary Clinton less than her overriding sense that she just deserved to be President. In 2008, she expected a coronation and was stopped on the way to the church. In 2016, she’d lined up enough of the party elders and intimidated all the other Democrats out of running, then made sure they rigged the race anyway when the going got unexpectedly rough. Time and again, she acted like it was just obvious that she had a sort of deed on the Presidency, that this was not a race or a question, that she could not possibly lose, that there was nothing for a serious voter to even consider. And for all Donald Trump’s defensive responses to being baited (with a tweet or otherwise), Clinton’s inability to shed her sense of entitlement was the more serious blunder.

She was unable to ever really articulate why she wanted to be President, other than falling back on the “Stronger Together” catchphrase (which, let’s face it, was only ever about pulling in disgruntled Bernie voters and really rankled after evidence of her operatives shafting Bernie emerged). When there’s a void in why someone says they want something and they self-evidently want it really really badly, you start to get nervous about why exactly they want that thing so much. Trump, for his part, at least had the line about taking time out of his busy days to save the country. He didn’t need money or power or fame because he had so much of it. (In an interesting side-note, I had the displeasure of reading American Psycho this summer and discovering that Donald Trump is basically the #2 character in the book. Future historians will have a field day with this.) When Clinton didn’t give a square answer to the same question, it was just too easy to pencil in nefarious corruption and scheming.

But nothing was worse than when this all came to a head with the election-losing comment by HRC. In a mirror image of Mitt Romney’s election-losing assessment that 47% of Americans just wanted hand-outs and not to work, Hillary Clinton called a large chunk of Trump’s supporters “a basket of deplorables”. Now, it was personal. Now, a sneering oligarch of the American power elite, someone who’d been helping run the country for decades, didn’t just ignore their suffering or claim that the country was doing better than they felt. She actually disdained them individually, as people. Condemning them not just as lazy, as Romney had done, but as morally evil. The self-reinforcing internal campaign monologue that only sexists could oppose the mighty Clinton Coronation had seeped out into the public with one fierce statement of bullying.

Would Clinton have won had she never said that? I don’t know. I’m inclined to think her other flaws were sufficient to sink her anyway. But the race was close enough (yes, yes, she won the popular vote, I know) that I believe a lot more of those 49% who disliked Trump and still voted for him might have stayed home without that comment. Or joined their Republican leaders in writing in Mitt or McCain or Ronald Reagan resurrected. And only someone so sure of victory, so truly honestly disdainful of others, is capable of saying something like that publicly. At the time, she was lauded by the media who’d all lined up to endorse her in fear of Trump for calling it like it was, for pointing out the horrible people propping up Trump. And look, many of those people are horrible and deplorable. But so are the war profiteers and bankers and, for God’s sake, George HW and W Bush, who all voted for Clinton. That doesn’t mean you come out and make a statement saying that you think the main reason people are voting for the other side is because they are personally bad humans.

(Incidentally, a lot of blame for this election loss should fall squarely on the person who made the social media meme that said all the former Presidents were voting for Clinton. Find me a person on this planet who respects both George W. Bush and Barack Obama, other than maybe Bill Clinton. That meme just alienated everyone a little and made Trump’s anti-establishment cred that much stronger. I’m kidding about the impact of this thing. A little. Maybe. It’s a weird viral world out there. Votes out for Harambe, who did not, in fact, get more votes than Jill Stein.)

“But, but, James Comey!”

I am much more open to the idea that James Comey contributed significantly to Hillary Clinton’s loss than third party voters. And not just because I’m not James Comey.

(But seriously, third party voters would have pretty much all stayed home if we had to vote for one of the two major party candidates. And you really think more Libertarian Gary Johnson voters would have broken for Clinton than Trump? Sadly, there are no exit polls on this, but trust me that the third party voters as a whole cost Trump more votes than Clinton. 52% of the electorate voted against the establishment this year.)

That said, I almost posted the day before the election that James Comey was in the pocket of the Clinton camp, because by raising and then silencing the investigation all before the election, he effectively was trying to demonstrate that there was no Clinton scandal to worry about. It’s hard to say if that hurt more than just not saying anything about the investigation at all in the last week, but if James Comey really were a Trump mole, why on God’s green Earth would he have said, literally, “there’s nothing to see here” the day before the election? It’s like LBJ giving a short speech promising that Goldwater would never use nukes the night before people went to the 1964 polls. Could you imagine? I mean, really?

Maybe Obama said he would fire him if he didn’t. That said, pretty empty threat, no? Is Obama really going to fire someone who raised questions about Clinton just before the election? Someday, Comey will write a tell-all book. And it probably will make something up about what happened, so we’ll never know.

In retrospect, it’s easy to say that Comey’s reopening and then quickly closing the investigation cost Clinton a lot of votes. But I just don’t know if there’s anything causal here, especially given that this argument is based on polls that proved to be faulty. And we don’t have polling data on the day before the election or the day of to indicate how many people switched back to Clinton when the investigation was suddenly slammed shut. Maybe Clinton was on pace to lose much bigger, but Comey helped almost save the day.

But here’s the thing: even if you can prove that Comey speaking cost Hillary Clinton the whole election, we’re back at “she’s survived twenty years of scandal!” If you’re right about Comey, then Hillary Clinton was literally entirely felled by the resurrection of a previously buried scandal that plagued her throughout the 2016 campaign season. And you all sneered and rolled your eyes and did your best G.D. Hillary Clinton impression to say that no scandal would ever beat this survivor. So if someone raising a question about one of this cornucopia of scandals really could undo what otherwise would have been a romp, was your candidate ever that strong to begin with?

Conclusion: “Storey, the Past is the Past – Why Re-Bury Hillary Clinton?”

A lot of pieces like this one have been criticized for beating a dead horse, stomping on a fallen hero, and unnecessarily carting out blame for someone who has already been wholly humiliated on the national stage. So what gives?

Firstly, and I wish I were joking about this, but I think it’s really important to start staving off the Hillary Clinton 2020 campaign NOW. I have talked to several people about this and they literally all believe that I am certifiable for even dreaming that Hillary would run again, but I am very very worried about this possibility and I want us all to think a lot about why it would be a very bad idea. As credibility for this prediction, I can only offer my election map prediction from July 2016 that I reposted the night before the election. Which showed a 312-220-6 win for Trump over Clinton, which proved to be 306-232 for Trump. You will not find many non-Republicans who saw what happened on November 8th coming.

(By the way, I haven’t yet called out Edward Fu for rudely and derisively arguing that this map demonstrated I had no ability to conduct political analysis. Scoreboard, sir.)

But beyond my fear of Clinton/Trump II: Apocalyptic Boogaloo in 2020, there is a battle underway for the soul of the Democratic Party, which, God help us, claims to still be the voice on the left. Howard Dean is running against Keith Ellison for DNC Chair. Bernie is being vocal about the change we need, but Chuck Schumer is leading the Senate Democrats. And how we view the results of 2016 has a lot to say about how we look to the future. If Clinton deserved to win but didn’t, if all womankind got rejected last Tuesday, if the basket of deplorables won the day and are all irretrievably evil, then there’s no hope or the hope we have will go to establishment Democrats just as corporate, corrupt, and militaristic as Clinton herself. If Clinton was a bad choice who made bad decisions, then we can start the conversation about a new direction. One that, arguably, is not all that new, because it looks like the very successful two campaigns of Barack Obama, but perhaps with more populism and more follow-through on the, y’know, change.

Because if there’s one thing Trump is unlikely to bring to Washington (and this should ironically reassure the most worried among you, though it worries me the most), it’s change. He’s already lining the Cabinet with the Old Guard Republicans. Newt Gingrich will be back. Nothing says change like 1994’s revolutionary in 2016. Mike Pence, or Baby Ted Cruz, is leading the transition team. Trump is trusting the same coalition that has been propping up Republicans for decades to “drain the swamp.” Plus his kids. His kids are new.

It would be a devastating mistake for the left to respond in kind, propping up its discredited elders for another run as well. We need new, fresh, exciting, energetic, charismatic, scandal-free leaders to take up the torch of left-wing ideals. Hopefully many of them will be women, people of color, LGBTQ individuals: exemplars of inclusivity without being seen as literal avatars of their particular intersectional group. And they should not bully people into voting for them because they are who they are. They should not complain about having to be accountable for past scandals, backroom deals, or changing their mind because they are who they are. And the country will love them for it.

Martin Luther King, Jr. asked that people be judged on the content of their character. He did not ask that they not be judged at all. The country judged Hillary Clinton on the content of her character. They judged Donald Trump on the content of his character, too. We can never again afford to support someone so plagued with character concerns, even against someone equally (or more) flawed. The ensuing race to the bottom is too close to be sure of, and way too close to feel entitled to.

In a long Facebook discussion during the election, one of the few I indulged in after Bernie had given up on the primaries, a former debater kept asking why I was evaluating Hillary Clinton and Donald Trump as people, rather than a set of ideas they espoused. I never responded to the last part, mostly because I’d already said I had made my last post in the thread. But it’s the title of this post. All politics is personal.

And the reason for that is the structure of our representative democracy. Outside of perhaps California, we don’t live in a direct democracy. We don’t vote on every issue. We don’t choose to go to war or not, to build a school or not. We elect people to do it for us. And this is why we have to like and trust those people. Because they are not robots programmed to fulfill their promises, nor are they a mere abstract slate of ideas. They are people. Flawed, greedy people who want power and money and to be liked and to make the world in their image. You can criticize the “have a beer with” standard all you want, doubly so for giving us both W Bush and Donald Trump. But it’s a proxy for something reasonable. Who do you want in your corner? Who would you be friends with? Who do you trust when the chips are down to stand in for you?

If we ignore this question or shame people who take it seriously, we’re never going to build a successful leftist movement in this country. And I have my doubts that the Democratic Party can ever build or even wants that movement. But now seems like the best chance in a long time to try.

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The Problem is Poverty

Categories: A Day in the Life, It's the Stupid Economy, Politics (n.): a strife of interests masquerading, Tags: , ,

PovertyPic

Domestically, we have one disease that kills more people than any other. That imprisons people in a life that falls short of their potential, that forces people into crime, addiction, homelessness, and illness. It’s a scourge upon men, women, and children, the very old, the very sick, the disempowered, disenfranchised, and marginalized. It has one cause: the lack of money in a capitalist system. It has every negative symptom you can imagine: from despair to death, and every form of ruin in between.

And yet the way we treat this disease, the way we tackle this malady, is categorically different than the way we approach everything else. There is no race for the cure to poverty, no attempt to stop poverty in its tracks before it starts, no effort to eradicate poverty entirely. Instead, we just try to patch up the symptoms for any given person and lift them out of it, getting them over it temporarily so others can be threshed back down to take their place. Maybe this is actually a bit more like how Americans view other diseases too, but it’s a devastatingly ineffective way to deal with any problem. To change this ineffectiveness, we need to acknowledge the structural factors that ensure the existence of poverty and recognize that only when those are altered or eliminated can we actually move the needle on poverty as a concept, not just move poverty around between different people.

My convictions about poverty being the root cause of all our domestic American ills doesn’t just stem from a predisposition against capitalism. It comes from almost a decade spent as a non-profiteer at various levels, in both direct service and administration. The problem we were treating was always poverty. Whether it manifest in addiction, abuse, hunger, or dropping out of school, the critical problem putting people in toxically stressful situations that led to bad impacts was always a lack of money. This is not to say that the rich cannot be addicted to drugs or commit physical violence or abuse, but that the reason that most people are susceptible to these things is because they are poor. Some people use drugs purely recreationally and lose control, but most people use drugs as a way of medicating their impossible financial situations, of finding some glimpse of happiness amidst the despair of their everyday world. Hunger, homelessness, lack of medical care, and other issues are more obviously and concretely the result of poverty. Crime and cycles of crime are almost entirely rooted in poverty. Yes, there are poor people who still resist the temptation to turn to crime and there are rich criminals, but most of the people rotting in American prisons were put there by cultural and societal cycles that left them with few to no viable opportunities to get ahead financially. The correlation between poverty and dropping out of high school is mammoth. Ditto the correlation between poverty and criminal conviction. Not least because the rich criminals can pay someone to keep them out of prison.

And where other problems exist, the way they manifest their harm is primarily through the vehicle of poverty. Far be it from me to say that various forms of oppression, from racism to sexism to homophobia to imperialism, don’t exist. But they manifest in one of two ways: violence or poverty. And violence is a very real issue and problem that is sometimes separate from poverty and trust me, as a pacifist I believe in stopping violence in all its forms. But at least we all recognize, codify laws, and work together to stand against violence (in all forms besides wars). There is not a major groundswell in society that says a certain amount of domestic or racist violence is super-necessary to a well-ordered society and the proper incentives. But we do make this argument about poverty all the time. Or at least, those defending capitalism do.

Other than violence, though, the fallout from racism, sexism, homophobia, and imperialism is primarily economic: it’s forcing people into poverty. Purveyors of these ‘isms deny jobs and opportunities to their targeted groups, deny them possible benefits or social programs that would lift them out, and generally demean their worth in a way that manifests in keeping them ensconced in poverty. There is still racism against Barack Obama and it’s unfortunate, but it doesn’t meaningfully reduce his ability to impact the world, because he’s kept himself out of poverty. Same with Michael Jordan or Oprah Winfrey or Neil deGrasse Tyson. Which is not to say that racism against them is still bad and something we should fight against, but they have largely been able to overcome its meaningful ability to negatively impact their life. Whereas the millions of their brothers and sisters who are being denied opportunities based on race do not enjoy this luxury.

Put another way, poverty is the enforcement mechanism for most of the harm done by ‘isms. The hate and myopia of ‘isms is obviously wrong on face, but it would have few to no teeth without the ability to keep people impoverished. Statistics that prove racism persists as a problem in our society tend to use poverty as the driving force of their proof, showing that traditionally marginalized groups enjoy fewer economic opportunities and experience worse financial outcomes than their white male peers. This demonstrates that most of the harm done here manifests in poverty. If poverty didn’t exist, haters would lose a key tool, perhaps the biggest single tool, in their arsenal of oppression.

The problem with how we approach poverty is that we see it as an individual issue. We take each person as a stand-alone case of poverty and then try to treat their individual symptoms, while ignoring the obvious fact that they suffer from a widespread and entrenched epidemic. This would be roughly akin to treating each individual person with AIDS as their own new unique case, trying to conquer the disease anew with each patient. It would be inefficient, ineffective, and unconscionable to take this approach with disease, and yet we suffer under the delusion that poverty is largely a choice and that a heightened sense of personal responsibility can defeat it.

This belief is exacerbated not only by Republican values, but by the fact that some people do seem to be able to lift themselves out of poverty by sheer force of will. Many of our stories about this phenomenon are exaggerated and even apocryphal, fueling our delusional obsession with this as the only viable solution to the problem. We ignore the real role of luck in their stories, or the hidden advantages they had over others that enabled their rise from poverty. And then we tout these few exceptional examples as proof that anyone facing crippling poverty can overcome it easily, with a little pluck or grit or a well-timed tug on the old bootstrap. We are a nation obsessed with this belief structure because treating poverty this way if it were a disease would be too horrifyingly callous and impossible to face. It’s tantamount to holding the few people whose inoperable cancers suddenly go into remission as the exemplars of how to treat and fight cancer. “Everyone can go into remission if they just try hard enough!” This is the brand of medicine we advocate for a whole society of people being driven toward untimely death by poverty.

Not buying that poverty is like a disease? It’s fueled by environmental and hereditary factors with statistical correlations nearly as high as transmission rates of most communicable diseases. People are vastly more likely to live in poverty if they are surrounded by people in poverty, if they live in high-poverty neighborhoods, if their family members (especially parents) suffer from poverty. It does irreparable physical, mental, and emotional harm to its sufferers. It is growing and spreading. Even when some people are able to recover, others become infected. Having suffered poverty makes one more likely to suffer from it in the future (making it more like a degenerative or recurring disease than, say, the chicken pox). If left untreated, it often kills the host.

Unlike disease, though, our capitalist society structurally requires a certain number of people to suffer from poverty in order to function in the image its constructed of itself. Capitalism hinges on people being driven into terrible and abusive jobs because they fear the impacts of poverty. It also requires them to not really realize that those same jobs keep them entrenched in poverty, clinging to a belief that if they work long enough or hard enough in those positions, they will eventually escape. This is roughly akin to downing placebos in the hope that they will cure a terminal disease. It might make you feel a little better in the short-term, but it won’t save you from what’s actually hurting you.

And yet even if you believe that personal responsibility is somehow a factor in someone being in poverty, the placebo treatment is an idiotic way to approach it. For example, lung cancer is a disease that we largely feel most sufferers experience because of choices they made earlier in life, and thus they bear some responsibility for it. However, we don’t thus say that the only solution we will offer lung cancer sufferers is to pop placebos and hope they get better or magically enter remission. We still treat their case like the disease it is, still spend billions seeking a cure for their ailment.

And yet the cure to poverty is staring us in the face. Create a system that doesn’t allow people to be poor. Where a basic standard of living cannot be infringed, no matter what choices or decisions you make. Where you will have a place to live, clothes to wear, food to eat, treatment of disease, and a safe place to be, no matter what. Less the safety part, this is literally what we guarantee prisoners, those most marginalized and maligned in our society, people who most would agree really have chosen to do something terrible with their lives. It’s sadly ironic that we feel that prisoners deserve a basic minimum and it would be inhumane to deny them these items, but children born into poverty deserve no such similar safety net. And we wonder why so many of those children grow up to wind up in prison.

The only argument I’ve ever really heard against guaranteeing a basic quality of life to all is that it costs too much and that it reduces the incentive to work. I feel like the folks making these arguments miss basic facts about human psychology. People are actually much more able to work effectively and more motivated to do so when they are not doing so at metaphorical gunpoint. And forcing people to work against their will is the moral equivalent of slavery. Actually, it’s the literal definition of slavery! The fact that slavery made some sort of unjust economic system appear to function is not a valid argument for slavery as a system.

But does this system actually work? A great deal of government and virtually the entirety of the non-profit sector spends their time and money fighting the uphill, ineffective battle with poverty. Treating one person at a time, one situation at a time as though it’s not part of a larger preventable disease, these groups spend billions and billions of dollars trying to eradicate poverty in a wholly ineffective manner. This would be saved in a system without poverty. Then there’s the prison system and police forces. Yes, there’d still be some violence and you’d need a skeleton crew of these industries even without poverty. But over 90% of crime would be eliminated. Which also would drastically reduce one of our most expensive industries – the court system. When you start to think about all the mechanisms and spending we have in place to reactively try to fight back against the tide of poverty rather than prevent it in the first place, you have enough money to fund poverty prevention many times over.

It’s only our belief that people in poverty somehow deserve it and/or our belief that capitalism as currently structured is intractably inevitable that keep us from changing this system, saving money, and saving just about everyone in our society. Both of these claims, about desert and inevitability, are facially laughable. The biggest single factor in determining whether one is impoverished is whether one’s parents are impoverished, the textbook definition of an immutable characteristic. A massive portion of those in poverty are children who lack the agency to make any decisions about their fate. And systems of society change constantly. We are constantly tweaking and altering aspects of our society, large and small, and every monarchy, dictatorship, and tribal structure that came before was equally convinced that they were at the terminal arrangement of human affairs before the next tide of change swept in. We are imprisoning ourselves in a myopic, idiotic, unnecessary cycle of disease. That is worse for most of its victims than prison itself. What will it take for us to recognize this reality and start working actively to change it?

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What We Talk About When We Talk About Unemployment

Categories: A Day in the Life, It's the Stupid Economy, Tags: ,

It’s been a while since I’ve visited the question of our unemployment figures in the United States and what they imply for the real state of our economy and our future, such as it is. When I first started posting about this four years ago, no one was particularly telling the story of labor force participation rates as a proxy for unemployment and how these rates were hiding the real story behind the glorious recovery narrative that everyone was being fed in the wake of the Great Recession.

Last week, somewhat hearteningly, almost everyone described a jobs report where unemployment purportedly fell from 5.0% to 4.7% as a disaster because of the corresponding drop in labor force participation. The narrative has finally largely caught up with the reality, even if the official numbers still enable media pundits to talk about “full employment” like it’s a stone’s throw away instead of the miles it actually is from nearly 11%. I don’t have enough of a readership to take any credit for the shift in the narrative cognizance, unless it’s as part of a much broader grassroots movement quietly observing that the BLS has no clothes in a country where tons of people have decided it no longer makes sense to even try to work. But it’s still great that people are talking about this more widely.

Part of why I haven’t posted in a bit is that unemployment numbers actually have been steadily falling in the last few months, at least through the March figures. The Reporting Gap, the distance between the reported percentage and the underlying reality when one accounts for labor force participation, was commensurately dropping, from a record-high of 6.52% in September to a two-year low of 5.67% in March. During this time, what I call Real Unemployment, accounting for those who’ve left the labor force, fell from 11.62% to 10.67%, nearly a full point. The reported figure in that span fluctuated between 4.9% and 5.1%, ultimately going from 5.1% to 5.0% from September to March.

This presents a damning flip-side to the problem I’ve been discussing here for four years. The media and the BLS were actually missing some real recovery and job strengthening that was happening during this six-month period. Granted that the larger headline might be unemployment remaining stuck above 10.5% for seven years and counting, but a 1% drop in six months was the second-best rally for employment during that whole span. Meanwhile, the media reported flatness and unchanged during this real improvement.

Of course, now we have the realization that 4.7% is not reflective of what actually happened in May. But it belies a more real story that the backtracking actually started in April. In April, unemployment popped back up to 10.96% from 10.67%. It was reported as steady at 5.0%. Then, in May, it was actually flat at 10.96%. This was the alleged disaster moment, when the 0.3% reported drop just showed fleeing the labor force. And that’s true, which is why the unemployment figure was actually flat. But the spike in unemployment actually happened the month before.

Here are your graphs:

Real Unemployment (red) and Reported Unemployment (blue), January 2009 - May 2016.

Real Unemployment (red) and Reported Unemployment (blue), January 2009 – May 2016.

Reporting Gap between real and reported unemployment, January 2009 - May 2016.

Reporting Gap between real and reported unemployment, January 2009 – May 2016.

Do any of these little fluctuations matter that much? Other than the distance between the notion of nearly full employment and more than seven sustained years over 10.5% unemployment? I would argue they do, especially when trying to spot trends. Labor force participation had cratered to 62.4% in September, but built all the way back up to 63.0% by March (a two-year high). Now it’s already back down to 62.6%, dropping by 0.2% each month. What does this portend for the economy? Are things already unraveling again, finally exposing the alleged recovery as hollow, shallow, and only benefiting those at the top? How will this impact the upcoming election?

Maybe having a one-month jump on the trends in these figures isn’t that big a deal. Maybe everyone talking about labor force participation in the same breath as unemployment means victory on this issue has already largely been achieved. But if we are headed for another official recession, it’s meaningful to realize that we’re starting from a place of 11% unemployment, not 5%, and that the hit to the economy that’s coming is on top of a problematic environment, not on top of a healthy one. At least if we’re looking at the bottom line for the bottom 50%, not the corporate titans.


This is part of a continuing series on the under-reporting of unemployment in the United States of America.

Past posts (months indicate the month being analyzed – the post is in the month following):
September 2015
July 2015
June 2015
March 2015
February 2015
December 2014 – labor force participation assessment
December 2014
November 2014
October 2014 – age assessment
October 2014
September 2014
August 2014
April 2014
December 2013 – seasonal assessment
December 2013
March 2013*
August 2012*
July 2012* – age assessment
July 2012*

*My initial analyses led to a slight over-reporting of the impact of the reporting gap, so the assessments in these posts are inflated, as explained and corrected in the December 2013 analysis.

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Unemployment Jumps in September, Reporting Gap Hits Record 6.52%

Categories: A Day in the Life, It's the Stupid Economy, Tags: ,

For every person listed as officially unemployed in yesterday’s jobs report, there are another 1.28 people who are really unemployed, but are not captured because they have left or never entered the labor force. In total terms, this means that 7,915,000 people are “unemployed” and another 9,140,784 are unemployed, but living in what I call the “Reporting Gap” where they cannot be seen by the official BLS numbers. These folks have either given up looking for work, were ineligible for unemployment because they’ve never had (and thus lost) a regular job, or have restructured their life outside of a legal job because they just don’t think it’s feasible for them. If our numbers were more honest, they’d show that over 17 million Americans are out of work, or 11.62% of the population.

Here are your charts:

Real (red) and reported (blue) unemployment, Jan 2009 - Sep 2015.

Real (red) and reported (blue) unemployment, Jan 2009 – Sep 2015.

Reporting Gap between real and reported unemployment, Jan 2009 - Sep 2015.

Reporting Gap between real and reported unemployment, Jan 2009 – Sep 2015.

Real unemployment is now at its highest rate since December 2014, when it was 11.66%. Unemployment has been above 11% for 77 consecutive months, since May 2009.

The Reporting Gap hit a record high of 6.52%, surpassing a record 6.23% from last month. It has been above 6% for four straight months, and above the reported unemployment rate for 10 straight months, since December 2014. This means that the official unemployment rate has been capturing less than half the unemployed for all of 2015.

I hasten to add that my real unemployment figure includes no one who is working part-time or less than they’d like to be. It includes no one who is working at all. Including people from that popular U-6 figure (currently 10%), would push the overall unemployment rate well above 15%. But I think U-6 unemployment, while capturing some job distress or under-utilization of the employment market, is far less accurate for the phrase unemployment than my figure, since people working even a couple hours a week are employed. Not one of the 17 million people I would call unemployed is working professionally (at least legally) so much as an hour a week.


This is part of a continuing series on the under-reporting of unemployment in the United States of America.

Past posts (months indicate the month being analyzed – the post is in the month following):
July 2015
June 2015
March 2015
February 2015
December 2014 – labor force participation assessment
December 2014
November 2014
October 2014 – age assessment
October 2014
September 2014
August 2014
April 2014
December 2013 – seasonal assessment
December 2013
March 2013*
August 2012*
July 2012* – age assessment
July 2012*

*My initial analyses led to a slight over-reporting of the impact of the reporting gap, so the assessments in these posts are inflated, as explained and corrected in the December 2013 analysis.

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Volkswagen and Corporate Impunity

Categories: A Day in the Life, It's the Stupid Economy, Politics (n.): a strife of interests masquerading, Tags: , ,

VWThinkGreed

“Corporation, n.: an ingenious device for obtaining individual profit without individual responsibility.”
-Ambrose Bierce, The Devil’s Dictionary, 1911

The only thing shocking about the recent incident involving Volkswagen lying about the emissions of their so-called “clean diesel” vehicles is that people are shocked by it.

Or, perhaps, that people seem to believe that Volkswagen is the only company doing something like this.

The entire structure of the way corporations are built and expected to act in modern America, especially large MNCs, is to incentivize and reward this kind of behavior. And increasingly, the advent of major so-called “free trade” deals is designed to give those corporations supremacy over the laws they already blatantly ignore. Law is merely national, while corporations are forever and supreme. And once the law officially gives primacy to the corporation over the nation-state, there will be nothing left to check the nearly ubiquitous cheating, skimming, corner-cutting, lying, and outright fraud that pervades the corporate reality.

The problem, as many corporate apologists have observed, is that corporations are designed and their leaders feel obliged to uphold only one principle: profit. Which, of course, is the opposite of principle, because it’s merely a count of dollars at the end of the day, however and wherever they were acquired. And the larger problem, of course, is that there is only one way to punish a corporation: by taking away money. But not and never all of the money. Only some of the money. Corporate dissolution is not an option the nation-state has given itself to combat misbehavior, nor, realistically, are any sorts of individual punishment like prosecution for fraud. In a world where not one CEO, banker, or financial engineer has faced prosecution for a financial crisis that defrauded and impoverished millions of actual human beings, how could anyone sitting in a corporate office elsewhere even begin to fear personal disempowerment, impoverishment, or imprisonment for any act they choose?

This system means that literally all incentives and disincentives are calculated financial transactions. That is merely the business of business. Just as profits are expected to outrun expenditures (pushing down wages, prices for goods, health insurance premiums, taxes, and anything else the corporation may have to pay), they are also expected to outrun fines, fees, and other wrist-slaps administered by less profitable organizations. The question of whether to lie, cheat, steal, commit fraud, violate sanctions, or otherwise take an illegal advantage is merely referred to the bean-counters. Will this, on average, make us more money than it costs? If yes, proceed.

I don’t doubt that there is a corporation somewhere, or maybe even a few, that are not operating by this principle. The great problem with economics as a theory of life is that it totally overlooks the human element, mechanistically assigning the exact same set of motivations and priorities to every single individual person without fail, ignoring the multitudinous diversity of actual people and their lives. Of course some corporations are run by people who believe in the rule of law or ethical principles or even (God forbid!) morality. Of course fear of losses is not the only thing driving everyone in all of their decisions on any given day. The scary thing is that, increasingly, these voices of purported reason (or tradition?) are getting drowned out by actual statutes that say a corporation is singularly beholden to its shareholders and that their only priority must be profit. We are on the verge of the concept that corporate leaders have a fiduciary obligation to commit as much fraud, deceit, and trickery as can outrun the punishments for it and pad the bottom line. Otherwise, they will face the wrath of investors who can rightfully point across the street to Volkswagen or down the hall to this or that bank that wantonly fixed currency prices or traded with allegedly isolated Iran and say “see, they’re trying to get every advantage they can! What are you doing for me?”

Like police impunity, like the war crimes committed by US Presidents, the only possible antidote for this ever-escalating race to the bottom is accountability. People have to believe and internalize that there can be consequences for bad behavior to feel it’s not worth it. And right now the scales are so badly tipped in the direction of total impunity that it will actually take several high-profile examples of accountability to even begin to suggest to the corporate bean-counters that punishment (real punishment that’s not just a few million dollars) is a reasonable possibility to be taken into the calculus. We could dissolve Volkswagen, imprison its executives, strip all wealth from said executives, and garnish their wages for life, and most corporations would merely recalibrate to lying a little less than VW did. That said, this level of punishment is many scales of magnitude beyond what even the most hawkish prosecutor is considering or even has as a disposable tool. Volkswagen will live through this, just as BP survived the oil spill and Exxon its own, as Blackwater survived its war crimes and all the tobacco companies have persisted. The worst possible punishment is to have to rebrand, and that’s only the worst because it actually costs more than the fines incurred for wrongdoing.

Anger at Volkswagen misses the point. It has its purpose, since it marginally drives up the chance that this will be the rare time there are moderate levels of accountability instead of zero to none. But all that is mostly Titanic deck-chairs. The lifeboats are questioning the whole system that incentivizes and openly encourages this behavior, that makes monsters of men, that takes most of the smartest and best educated minds in our world and turns them into coal-shovelers on a runaway train of profit for profit’s sake. It doesn’t matter where that train is headed or how much coal costs in human, animal, or planetary terms. More coal! This train must move, ever onward, into oblivion, spewing toxicity in every direction.

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Democracy at the Crossroads

Categories: A Day in the Life, It's the Stupid Economy, Politics (n.): a strife of interests masquerading, Tags: , ,

Corbyn

“Democracy is the worst form of government, except for all the others.”
-Winston Churchill

It is the fundamental human assumption that one lives at the time of terminal understanding of the world, the universe, and human affairs. This, I think, is the direct result of being temporal beings, doomed to live a finite existence making regular steady progress from birth to death on a planet that is always making its own equally steady journey. It is very challenging to see oneself as just at a sad point in the early part of history where not very much progress has been made and not very much is understood, nor will it be in one’s lifetime. This is a depressing and frustrating thought that leads to the apparent meaninglessness of one’s individual existence which is, in a very real sense, each person’s world. It is also, unfortunately, a true thought.

But we have toasters! We have airplanes and cars and iPhones and bombers! Surely this is the time of terminal understanding! Let’s turn to another celebrated British quote-maker on this one…

“For instance, on the planet Earth, man had always assumed that he was more intelligent than dolphins because he had achieved so much — the wheel, New York, wars and so on — whilst all the dolphins had ever done was muck about in the water having a good time. But conversely, the dolphins had always believed that they were far more intelligent than man — for precisely the same reasons.”
-Douglas Adams, The Hitchhiker’s Guide to the Galaxy

It’s really tough for us to wrap our minds around democracy being a failed and sort of silly experiment on the long journey toward functional government, or toward a favorable state of affairs for humanity. And yet I think it’s becoming increasingly clear that this is the fate democracy faces, and sooner than later depending on the outcome of the next few elections in the major states subscribing to this theory of government. But there is a last gasp of the democratic spirit asserting itself throughout these nation-states, a last desperate tide to prove that a government alleging to be of, by, and for the people can actually produce results that live up to this claim. It is the sudden popularity of far-left populism. It is the election of Alexis Tsipras in Greece, the appointment just now of Jeremy Corbyn to head the Labour Party in the UK, and the emerging and ongoing surge of Bernie Sanders to the top of the polls in the US.

These people are unlikely heroes, and it is their unlikeliness that drives much of their power and appeal. Corbyn and Sanders buck all the trends of traditional democratic power brokers. They are old, they identify as socialists, they can easily be characterized as disgruntled ranters. They don’t play well with others in their party because they’ve carried decades of conviction that consistently spurn the wishy-washy adjust-to-polls commercialism of the last three decades of so-called leftist politics in their country. While Labour and the Democrats have been out starting wars, chasing corporations, and trading their principles for money, Corbyn and Sanders have been diligently trotting out the real principles of a people-driven left-wing agenda. And until now, getting basically no traction outside a loyal following in their home districts.

So what’s changed? Why is 2015 the year that these aging scions of consistency get popular?

The reality is that politics as a whole in most Western democracies have swung so far to the right, that really no one besides Corbyn and Sanders can even be described as leftists anymore. There are several key causes that can be explained as a general combined force, but have come together to make the right-wing shift radically rightward and the center-left head to the right of where the right-wing used to be. The shifts have been multifarious and subtle enough to not be noticed as a radical pendulum shift, but all the little hops along the way have suddenly led us to a place where the outrageously radical left is the only thing standing to the left of true center.

Some causes:

1. The learning of the military-industrial complex since the Vietnam War.
While the left went out and celebrated finally stopping an utterly insane slaughterhouse in Vietnam, the right went home and tried to learn from their mistakes. They realized that drafts were always going to create problems, so they altered the draft system into the Selective Service and went to work advancing the de facto economic draft. They improved jingoistic propaganda to promote the military, brought militaristic pride into sports and other venues where it would attract low-income soldiers who felt they had few or no other options. And they continued to buy massive amounts of technology to ensure that war would be more devastating for the “enemy” and less costly for US soldiers. They realized that only a few people cared about the dead Vietnamese in that war, but it was all the American body-bags that meant the gravy train of war had to end. So war would have to become more antiseptic, with fewer American casualties, so that more wars could be fought more often. The first Iraq War was the perfect test of the new approach to militarism, and went off without a hitch. By the time of the “War on Terror”, the military-industrial complex had ensconced a perfect system that “didn’t do body counts”, embedded journalists and the media right into the military, made sure everyone was on the same team, and neutralized all opponents as un-American. I could write tens of post on the little insidious ways all this has manifest since 9/11, but the groundwork for it was laid long before. The result is that even a President who most of the country saw as quite leftist and won the Nobel Peace Prize regularly kills named individuals abroad (something that was explicitly against US policy pre-9/11), intervenes with weaponry, advice, and soldiers in most armed conflicts around the world, keeps operating a prison that holds people who have been their for a decade and a half without charges, and is on a rather unscrutinized war footing with several foreign nations or people in their territory. And really no one questions it, outside of people in the radical left.

2. The advancement of debt as a tool of control.
Call this more learning from the Vietnam era. In an age when the most academically inclined and ambitious young people all gathered together to think about the future of their country for an affordable price, these campuses fomented a strong awareness of the problems with that society and how to fix them. These students were being raised as future leaders, they saw themselves that way, and anything was possible. In today’s economic landscape, college students don’t think of the future as a place of possibility, by and large. They think of the present as a brief respite from the real world, an oasis of personal exploration before they have to start paying for it, literally, for the rest of their life. While some are starting to break away from this system quite recently, most still believe that the piece of paper that comes at the end of this spending spree is the only possible ticket for the future they imagine and that the alternatives are too ghastly to contemplate. As a result, they willingly sign away their future economic well-being to have some hope at an even further-flung future of economic well-being. Thus, today’s college students are far more interested in law school, investment banking, corporate consulting, and anything else that greases the wheels of the neo-capitalist machine because it offers the whisper of relief from their enormous indebtedness. It’s all well and good to debate the merits and ethics of a job when one has economic freedom. When facing six figures of crippling debt that one cannot declare bankruptcy from, the choice quickly seems like fealty to the highest corporate bidder or death. Most choose the former. And thus the greatest minds of my generation expend their energy fueling an immoral system that places profit above people unquestioningly. Worse, almost everyone in that system feels they have no choice and no control, thus they don’t feel agency over the people-defeating choices they make. This is an incredibly right-wing system, but people just see it as “the way things are”. The result is massive wealth consolidation at the top and increased desperation at the bottom. And the bottom is increasingly close to 50% or 60% of the population.

3. The unfettered rise of the corporation.
When the corporation is the only thing that can save us from our debt, we increasingly see ourselves as workers first and everything else (family members, Americans, humans) second. Or last. The increasing rise of disaster capitalism, sampled in the dot-com bust and accelerated to a fever pitch in 2008’s financial crisis, have forced the issue time and again of the corporation’s pre-eminence over the nation-state. There have been so many insidious large and small steps in this chain of events that they are almost too difficult to all chronicle, though I have blogged about many of them individually. The endless rhetoric that government is inefficient while corporations are ruthlessly efficient, even though only corporations produce the waste we call “profit”. The meme that lowering taxes creates growth, despite forty years of evidence to the contrary. The definition of everything about the success and health of society in economic terms, which enables us to support things like a bloated, crippling private health industry that routinely bankrupts thousands of people each day because that industry is a huge portion of the economy and the health of “The Economy” is all that matters. Free-trade deals and agreements that offer massive power to corporations at the expense of countries. Corporate personhood. Citizens United and an unending stream of decisions that give corporations the power to buy off the government. Massive deregulation. The investment of everyone’s retirement fund into the stock market. Too big to fail. Bailouts left, right, and center. Unending zero-percent interest, amounting to an endless free loan to corporations direct from the printers of currency themselves. The list goes on and on and on.

4. The rise of the prison-industrial complex.
An unabated series of “tough on crime” local authorities have been able to arm their police forces like our new high-firepower dehumanized military and funnel people into prisons or graves. The dire consequences of this reality have only gotten attention in the last 18 months, somehow, despite years of an administration with an African-American President perfectly positioned to discuss these issues and bring them to the fore. Our police imprison and kill more people than any law-enforcement authority in the world, by far, and they are so sequestered and marginalized and sent away for so long, that no one advocates for them whatsoever. Worse, the increasing rise of private prisons means that conditions are more dehumanizing than ever, in the name of profit and shareholders, our new gods in the increasingly right-wing world. Anyone who disagrees is seen as pro-crime, someone who wants the world to be more dangerous, and disregarded.

5. The destruction of social safety nets.
The Clinton administration, arguably more of a shift to the right than even the Reagan presidency, is largely responsible for this one, though it’s been ongoing for some time. Policies like workfare, putting more pressure on the unemployed, the destruction of school lunches and mental health facilities and everything else that takes care of people at the bottom have combined to make being poor totally unlivable. The fact that government is no longer taking care of people at the bottom increases the pressure on them to put themselves in the dead-end economy, which is why so many single mothers are now working 2-3 jobs and are still completely unable to pay their bills. Mythical memes like “welfare queens” have fueled this crazy rage at the poor that has led to a massive increase in homelessness that would be out of control were so many people not, through #4 above, now housed in prisons instead. Non-profits have emerged and grown to pick up the slack left by government absence, but even these (and I say this as a loyal non-profiteer) are increasingly beholden to corporations and the wealthy to fund their efforts, leading to almost none of them advocating for policy changes. The more that the government is put out of the business of taking care of those at the bottom, the more that those already doing well financially are seen as the saviors of everything in society, creating greater loyalty to their interests, just as investing government pensions in the stock market creates government interest in propping up its value.

These are the big ones, though you can see that each contains a bevy of large and incremental changes that have lulled us into this right-wing fantasy world. And there have been just enough socially leftist changes to distract us from what a massive rightward tilt every other policy has made. The rise of gay marriage and legal marijuana, almost entirely through popular referenda or the courts, have made us think that political progress in the last thirty years is somehow a mixed bag, when actually it’s a giant right-wing stomp. But these also illustrate the ever-widening gap between politicians and the people. When the people get to decide directly, then left-wing policies tend to be enacted. Politicians would never have implemented gay marriage, as seen by how many establishment politicians took forever to endorse the policy. It’s only the courts, who remain relatively loyal to a set of principles, and the people, who fundamentally don’t seem to want all this reactionary policy (but feel powerless to stop it) who can implement anything to the left of center.

But that may be starting to change as the real leftists make an unlikely last gasp to save our democracy from itself. The burdens of austerity and corporate control have been so massive, the shifts in our priorities so rapid and fundamental, that socialists are the only ones left to speak of alternatives. It’s not stunning that veterans of the sixties are often the only ones left to speak for this possibility, since so many Millennials and Xers are too resigned to the status quo to believe that corporate control can be curbed. The old are an unlikely voice for radicalism, but that has not dampened how compelling these voices have been.

Taking control of the traditional left-wing party is, of course, only the beginning. The mechanisms that modern democracies have put in place to thwart a left-wing resurgence are multifarious. Corbyn now heads the Labour Party, but can he win a national election? Surely he seems to be the person who can bring SNP voters that fled Labour last time back into the fold as the possibility of a real shift left becomes feasible. But all the money and traditional corporate-fueled media is solidly against him, so it remains to be seen how it will play out. And Sanders is increasingly taking the lead in the race to functionally head the Democratic Party, but there’s a long way to go. Will this be a replay of Eugene McCarthy in 1968, who upset incumbent LBJ and forced him out of the race, only to have the establishment regroup around RFK and HHH as alternatives, then kill off RFK so that Chicago’s convention could be stolen and the party restored to the power elites? Or will the momentum of Bernie be simply too popular, especially as the rise of Trump on the other side speaks to a populist rebellion that finally sees through the garbage of all the corporatist shenanigans above and wants a real change?

It’s an exciting time to look at these things, that much is clear. It may not be the terminal point of politics, but it’s a really exciting crossroads. We could realistically have a 2016 convention season that matters, where one or both of the delegate leaders have the nomination withheld by party elites as the Republican or Democratic establishment simply refuses to choose the person the people have chosen. And then what? Will we have four major candidates for President, including two major-party “choices” who the people have already rejected? Will there be any illusion of democracy after such an election season? Or will the parties go back to actually betting on the people and letting the chips fall where they may? Do corporations and the current complexes have enough of a hold on the pendulum that it cannot swing back naturally as political cycles tend to?

We’ll find out!

But to the extent that you can, you can influence these results. You, if you like the idea of democracy and want to give it another go, can try to be a believer. Don’t be skeptical, don’t give in to the voices saying “unelectable” and that it will never work. Because we get to choose. Or at least we can believe we can choose, and that might make all the difference.

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Free (Market) Fallin’

Categories: A Day in the Life, It's the Stupid Economy, Know When to Fold 'Em, Tags: , ,

Who doesn’t love Tom Petty?

I realize that what I’m about to discuss is not a glib and lighthearted topic for most of you out there. Largely because of the reasons I discussed here six months ago, involving retirement accounts and how you have been told to invest them all in the stock market and that the market always and only goes up. Last Friday, when the market plunged over 530 points the day after losing 357 points, NPR’s lead for the radio story was “Well, it’s a bad day to check your retirement account.” The ubiquitous penetration of market investment into these long-term “savings” instruments has only gotten more intricate since 2008. And it’s created a perverse incentive wherein most of the working core of society cares much more about the fate of corporate America and its top dogs than they should, because they see their ability to retire as wrapped up in the success of these multi-billionaires and their ventures.

It’s arguably an even more insidious and effective scheme than student-loan debt convincing a generation of young Americans to sell out rather than pursue their passions. At every stage of life, there’s now an American financial instrument guaranteed to make you prioritize the needs of the big corporation above those of your own moral compass or even personal financial fate. It’s all quite clever.

I happen to not have much in a retirement account, having cashed out what I could long ago and still trying to find a way to get the rest out before the alleged earliest date I can collect, currently slated as 20 February 2039. And no more than 5% of it was ever in stocks, and it certainly hasn’t been there in quite a while. Just as full disclosure of my own positions, which is good practice for anyone posting about the market, with or without giving advice.

Here’s the thing. People always try to explain what’s going on with the market and why things are happening or not. And most financial experts will tell you that the daily effort to attribute major swings in the market to one or maybe two key news events that day are only slightly more accurate than tea leaves. The market is complex, varied, over-leveraged, and unpredictable. To say “the market went down today on China fears” is not the same as saying a baseball team won because their star homered twice and the pitcher threw a shutout. It’s a little more like saying that the team won because 34,000 fans showed up. Like, yes, the fans may have helped the team win. But as the Orioles proved in April, you don’t need fans at all to win a home game.

But to the extent that what now seems by all measures to become at least a three-day slow-crash of the market can be attributed to any one thing, I think it’s best described as a giant tantrum. China, as they say, is just a red herring. Get it?

To the extent that there’s been a recovery in the United States economy in the last seven years, it’s been driven by an enormous transfer of wealth from the bottom 95% of Americans to the top 5%. The bailout was a giant metaphor for this kind of response to the Great Recession, but while income has stagnated and real employment has lagged, corporations have soared by cutting costs (wages, mostly), increasing productivity (longer hours and worse working conditions, mostly), and raking in financial incentives from the government (zero interest, mostly). While the stock market has been transformed to make us believe that it is a leading indicator of the health of the economy writ large, it is no such thing. It is an indicator of exactly what it indexes: the health and profitability of the largest and most successful corporations in society. And while an effort has been made to close the loop on this circular reasoning and make us all “shareholders” so we all feel (and are!) invested in the outcome of these corporations, most of us make most of our money from actual salaries rather than whatever extra we have to give back to companies. So our actual economic health derives from our own bottom line and not the company’s.

The problem with zero interest is that it all but guarantees that we all see the world through this corporate-driven lens rather than one of personal economic rebuilding. When I was growing up, I was taught to save and not to invest in the market. Because interest was around 5% and, as Albert Einstein allegedly used to say, “compound interest is the most powerful force in the universe.” As long as there have been financial instruments and economies, there’s been an assumption money saved will pay off over time. Which is why it’s so bizarre that people have described our present economy as recovering and healthy when you haven’t been able to conjure more than 1% interest from a savings account anywhere in approaching a decade. Despite what your state’s pension fund tells you, the stock market is not a savings account. It only feels that way because you are buying the rhetoric about the market’s unending meteoric rise and you can’t really stomach the idea of “making” 0.1% when inflation feels like it’s 25% on most everything you buy (except, perhaps, these days, gas).

So we’ve had a zero-interest world for a long time, simultaneously convincing the public that the stock market is the only viable place for their money and convincing corporations they don’t need to work to make money, because endless amounts of it are available free at the window. No wonder the corporate economy is booming! Any business can functionally print money for itself, just like the Federal Reserve itself. What’s not to love?

Well, the end of that reality is what’s not to love. Enter the tantrum.

Sure, China’s growth is only 7%. I guess that’s heartbreaking for people who felt that the country of over a billion people was going to generate better-than-Madoff returns forever. But analysts are, believe it or not, smarter than that. This has been foreseen. The skyrocketing growth that comes with a neo-industrial-revolution was never going to go on forever.

But the market really believes that free money, zero interest, can be the new reality forever. And they’re trying to take the Fed and new Chair Janet Yellen hostage.

I think that most market movers are making a play. They believe that if they can get the Dow Jones below 15,000 by the Fed meeting, she and her fellow Fed voters will have no choice but to promise to keep the free money flowing for the next year or so.

And before you think that my eye on the market is too heavily influenced by my own experience playing poker, I’ll counter with this: is there a difference? One of them is speculative gambling, a world of bluffs, calls, wins, losses, huge swings of money, the ability to read and predict the actions of others and react accordingly. The other is played in a casino with a deck of cards.

The market is bluffing, kids. They’re going all-in on free money.

Now don’t get me wrong. It’s possible that the entire pyramid scheme of the market, the illusion of the recovery, the enormous success of corporations and their big-money backers, is 100% dependent on 0% interest. It’s possible that this is only a semi-bluff, that they’re trying to manipulate the market so interest rates stay at rock-bottom, but they really are terrified to find out their worth in a world of even 0.5% interest. After all, the reasonable valuation for the Dow Jones is probably closer to 12,000 than 18,000. Unless, as I’ve observed before, you believe that not only has the economy recovered, but it’s the best economy that has ever been in this country by about 10-15%. Even the happiest true believers in this economy don’t believe that.

Regardless of which, I think it’s hard to imagine a scenario in which the market touches 18,000 again for a very long time. I humbly suggest you factor that into your own financial planning. The one exception will be if this stunt works and Yellen and friends capitulate and promise in September to leave the rate at zero indefinitely. Then the market will be at 19k by Christmas.

YellenPetty

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Trumpemployment

Categories: A Day in the Life, It's the Stupid Economy, Politics (n.): a strife of interests masquerading, Tags: , ,

I promise this isn’t just becoming a Donald Trump blog. Though it would be a way to get more traffic.

Trump is one of two candidates in the race, along with the person I actually support, Bernie Sanders, who is observing the flaws in the current methodology for calculating unemployment. Unfortunately, both Donald and Bernie are focusing on underemployment as a facet of unemployment, which is mixing apples and oranges and undermines the strength of the argument that unemployment, meaning joblessness, is actually 11.52%.

They’ve been popularizing the often-touted “U-6” unemployment figure, which includes both discouraged workers, captured in my Real Unemployment figure month to month on this blog, along with workers who are part-time but would rather be full-time. Don’t get me wrong, these underemployed workers matter and are part of a larger picture of an unhealthy and overrated jobs market. But they are categorically better off than people who have left or never entered the labor force and are thus not only ineligible for part-time work income, but for unemployment benefits of any kind.

Definitions from the BLS website:

Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule.

What’s amazing is that this inclusion itself nearly doubles the unemployment rate, from 5.3% to 10.4%. And yet this includes zero people who are actually outside of the labor force. And as we know, the labor force as a percentage of population is at a 38-year low, dating back to a time when it was still somewhat novel for women to be working regularly. That was October 1977, before I was born, when the Seattle Mariners had just completed their first season of existence, during Jimmy Carter’s first year in the White House.

By my calculations, factoring in just the truly unemployed, including those who’ve fled or been barred from the labor force, unemployment in July 2015 was unchanged at 11.52%. The Reporting Gap, measuring those left out by the ignorance of how labor force percentages impact unemployment, was also unchanged at an all-time high of 6.22%.

Here are your charts:

Unemployment, real and reported, from  January 2009 through July 2015.

Unemployment, real and reported, from January 2009 through July 2015.

Reporting Gap between real and reported unemployment, January 2009 through July 2015.

Reporting Gap between real and reported unemployment, January 2009 through July 2015.

If you add the difference between traditional U-3 unemployment and the U-6 figure that Trump and Sanders like back to the real figure of 11.52%, you get 16.62%. This is roughly how, I assume, Trump got the basis for his claim that he made during his announcement speech:

“Our real unemployment is anywhere from 18 to 20 percent. Don’t believe the 5.6. Don’t believe it.”
-Donald Trump, 16 June 2015

So I like where he’s going with that, but I think, like so many things Trump says and does, it’s a little exaggerated and more than a little mixed. Though 16.62% is really not that far from 18-20%, which is more than an alleged fact-checker like Politifact gave him credit for. Of course, Politifact makes irresponsible claims like this:

“For the sake of argument, let’s assume that half the additional increase in people out of the labor force comes from the Baby Boom retirement surge.”
-Politifact’s Louis Jacobson, 16 June 2015

We don’t have to just ballpark for the sake of argument. We can calculate this statistic based on data the BLS collects. And the fact is that Baby Boomers are delaying retirement because of the Great Recession, not fleeing the labor force. The Baby Boomers are responsible for 7.5% of the labor force drainage, as of October 2014, which I think you’ll agree is a bit shy of 50%.

Trump may be crazy and mixing his numbers. But if Trump and Sanders win their respective nominations, maybe the media will finally have to pay attention to the reality of the delusion that goes into reporting our unemployment figures in this country.


This is part of a continuing series on the under-reporting of unemployment in the United States of America.

Past posts (months indicate the month being analyzed – the post is in the month following):
June 2015
March 2015
February 2015
December 2014 – labor force participation assessment
December 2014
November 2014
October 2014 – age assessment
October 2014
September 2014
August 2014
April 2014
December 2013 – seasonal assessment
December 2013
March 2013*
August 2012*
July 2012* – age assessment
July 2012*

*My initial analyses led to a slight over-reporting of the impact of the reporting gap, so the assessments in these posts are inflated, as explained and corrected in the December 2013 analysis.

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Finance Lessons

Categories: A Day in the Life, It's the Stupid Economy, Politics (n.): a strife of interests masquerading, Tags: , ,

GreekProtest

I don’t know when we decided that someone’s moral worth, both individually and collectively, depended entirely on their ability to manipulate financial arrangements. But I think we should probably go back and un-decide that, posthaste.

Unfortunately, recent steps to increase corporate power and control, to vault the corporation (the only type of entity I like less than the nation-state) above the nation-state for preeminent domain over how people conduct their lives, are all but locked in. A done deal, you might say, if you were inclined toward the business end of things. Increasingly, there is no other end of things to be inclined toward.

Obviously, I’m talking in part about Greece. After talking a big game and getting everyone excited for a couple days that Greece was actually going to reject the fascism of finance to make people’s lives miserable and potentially unlivable, Tsipras backed down and Greece swallowed a deal that pays obeisance to the corporate gods of privatization and burdening the poor. Remember how we discussed that those who are successful have all the power to determine what success even is? When the wealthy or those with disproportionate pieces of the pie get to write the contracts (spoiler alert: they always write the contracts), then the poor end up paying. Every bailout and austerity measure disproportionately hits the poor, in taxes, in lack of a safety net, in the corrosion of basic civil society that comes from mortgaging the very notion of civil society and putting it up for fire-sale to a private entity.

There is also this high-minded moral condemnation that comes with all this, a heavy-handed rhetoric of “you deserve this” and “you lived beyond your means then, so suck it up now”. This presumes that more than a handful of people in Greece were responsible for the irresponsibilities of the initial accrual of debt. It’s like blaming the people who took bad mortgages in 2008 for the housing bubble/crisis. When you live in a society that worships home-ownership and tells you you’re worthless till you’ve hit that milestone, of course you’re going to take the loan when it’s offered. After all, it’s the bank’s job to know whether it’s a reasonable deal or not. Similarly, the average Greek citizen bearing the bulk of both direct and indirect costs of the new measures punishing them for their “misdeeds” had absolutely no role in decision-making for the circumstances that led them here. They may have enjoyed the theoretical benefits of a prosperous bubble, but could no more have stopped it and made Greece behave “responsibly” than they could have overthrown the government in Germany.

This notion that people are responsible for all actions of not only their governments, but their banks is frightening and irrational. I recognize that in the theory of conservation of finance, someone “has to pay” or be held responsible. And I guess the Greeks are geographically closer to the Greek bankers and former regimes than, say, the Swedes. But any notion that the connection is much stronger than that is pretty flimsy. Power and decision-making are what tip the scales in this arena, and the average Greek citizen had close to zero. The strongly-defended reaction of Germany and the Eurozone is a little like jailing the whole city of Baltimore because they “allowed” a murder to take place in their city limits. “Well,” the indignant authorities respond to cries of injustice “if you didn’t want this punishment, you should have elected people who would make sure no murder could possibly take place!” Airtight logic, no?

If you feel like we’ve seen this movie before, it’s because we have. Most poignantly in the 1920’s in Germany, which I guess helps explain the hypocritical fervor with which that country’s representatives now enact vengeance on the Greeks (see also freed slaves coming to Liberia and subjugating the local population and the whole Israel/Palestine debacle). The government running Germany and charged with paying impossible bills had nothing to do with the government that had decided to fight World War I, and indeed had far less responsibility for the war’s destruction than, say, the other European governments. And the people of Germany had far less power over the Kaiser’s decision set than anyone. But the whole nation’s people got blamed and penance was extracted, all with heavy-handed moralizing about the superiority of other European peoples. Now I guess I believe in a sliver of culpability for being willing to fight the war, albeit under coerced circumstances, and I suppose I feel there’s a comparable amount of culpability for cooperating with capitalist institutions at all (yep, I’m not absolved here, though I personally don’t believe in taking on debt). But that level of culpability is more like an asterisk than a warrant for an indeterminately long prison sentence. Someone said yesterday that 50 years is the “optimistic” timeline for payoff, that one of these unimaginable bills would come monthly for a half-century. Now, sure, I guess they just negotiated that down to forty years or something, but Jesus. Are we even thinking about these things, or are we just letting the invisible hand pin our arms behind our backs?

Don’t worry, kids. Nothing bad happened with that consistently humiliated and subjugated population in Germany in the ’20s. They were fine.

Corporate dehumanization and the expectation that everyone keeps up with the rules, learns them perfectly, and makes all the “right” decisions, mixes particularly badly with recent advances in technology. We’re talking oil and water, pills and alcohol, fireworks and forests kind of mixing here. My parents have been going through a series of micro-disasters stemming from this combination lately, including their newish car’s computer rebelling on them through sensors that almost cause accidents and my Dad getting locked out of his GMail for nearly a week because they (apparently?) thought his Albuquerque IP address was the source of Chinese hackers. When Alex got a new phone on our joint cell-phone account, my phone’s voicemail password suddenly stopped working and, when I got back in, I was told several “unauthorized attempts” had been made from my phone. This despite the fact that when my previous version of this phone had been stolen, they were perfectly happy to charge me for the unauthorized data bill that the thief had racked up.

The problem is that the computer always knows best who is who and what that means. It doesn’t seem to matter if you have the password that you’ve always had or the secret code, the algorithm will decide whether you’re real or not. There have been a lot of trippy neo-Frankenstein type movies made about this scenario, but it is a real-life and chilling set of circumstances that are developing. When my Dad offered to take his IDs into Google, they wouldn’t entertain the idea. There was no way to prove to GMail that he was who he always had been, except to input an attached cell-phone number to the account that had never been tied to the account. The computer assumed he had a cell-phone and that this phone was more intricate proof of his identity than anything human he could provide or prove.

In that same post linked above, I displayed a YouTube video of a scientist questioning ten tenets of scientific orthodoxy, including the idea that people are just machines. The prevailing belief system of those in power at this juncture is that we are all just machines and should become more machine-like in our behaviors, our “thinking” (air-quotes theirs). It’s the underlying premise not only of modern science, but also of economics. People are pre-programmed rational actors who deserve punishment and even being taken offline for deviating from the mechanistic behaviors of accumulating wealth, delivering productivity, and making smart financial decisions.

This would all almost be a reasonable way of ordering things if what smart financial decisions were stayed constant, sane, and fair. The heavy-handed moralizers of The Economy claim that finance is a lesson that can be learned, internalized, and applied to situations in a consistent manner and that everyone has equal access to the education to know the rules, learn the game, and play. Even if money were entirely equalized, though, this wouldn’t be true. Because the real winners in contemporary finance are those who manipulate the situation to their advantage. There’s nothing objective about the accumulation of wealth and power. It depends largely on not only your ability to swindle those who know less than you (in this one arena) out of their money, but even more on convincing the government to give you free money. Those that have succeeded in the last ten years in business did so primarily by convincing a vulnerable government to give them near-endless supplies of free cash, in the form of bailouts or interest-free lending. And the main way those people convinced said entities to float them is with, well, money. So the game is just to start with an unequally distributed good, then spread that good from those who happen to have it to those charged with making the decisions and, voila! Entrenchment at the top, paid for by those who never had power, influence, or money to begin with. Stupid people! They should have figured out a way to steal their own money in a way financial rules have arbitrarily deemed acceptable!

Among other things, this system is intensely immoral. Charging the uninformed, the downtrodden, the long tail of societies for the recklessness of their society’s hegemons while simultaneously rewarding other society’s hegemons for happening to outwit them… Really? This is the way we want to structure a global operation? And for what benefit? So we continue to drown an unwell planet in more terminally unnecessary plastic widgets? So we continue to cancerously grow our species until it chokes out all other life that had the misfortune of being born on Earth? If you’re going to celebrate the alleged lifting of people from poverty that you attribute to capitalism, you also have to revel in the creation of poverty it ensures every day, starting with the functional enslavement of Greece.

And then, hopefully, you ask where poverty came from in the first place. Poverty is not the natural order of things that capitalism saved us from. Poverty was invented by imperialists and robber barons, people who thought they could trick and swindle whole countries out from under the feet of people who’d always lived there. You may think we’ve come a long way from feudalism, but at least feudalism allowed people at the bottom to work their own land and save some of the food. People were not wholly owned subsidiaries of whatever wealthy decision-maker swindled them away from the other wealthy decision-maker.

There are other ways to structure a society, that give humanity back to the humans and recognize that cancerous amoral/immoral growth for the sake of enriching whoever has the reins today is not the objective of our existence. Or should not be. I know, I said “should”. I know science and economics tell you morality doesn’t exist. That appears to be the whole problem.

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Unemployment Spikes in June, Reporting Gap Sets New Record

Categories: A Day in the Life, It's the Stupid Economy, Tags: ,

The reality-bending nature of the reported unemployment figure in the United States hit a new high watermark, with the BLS today reporting that unemployment was at 5.3% when it actually spiked to 11.52%. They reported a decline of 0.2 points when it actually climbed 0.24 points. And while I am amazed and pleased that the media is at least starting to talk about labor-force participation rates when they report these statistics, no one in the mainstream is putting it in real figures that play ball with the types of figures that people expect to hear.

Unemployment in this country is actually over 11.5%. The gap between the reported figure and the real figure is a whopping 6.22%, an all-time high, or fully 117% of the reported rate! The last time the unemployment rate was reported to be over 6.2% was in May 2014. That’s a figure that currently represents the number of people who are left out of the labor force because of the Great Recession. Which they tell us ended years ago.

This month does reverse some recent positive trends that were happening in the actual unemployment situation. Unemployment in May 2015 hit an almost seven-year low of 11.28%. Yes, folks, for seven years, the unemployment rate has been been over 11.25%, or 1.25 points higher than the peak reported figure. If you’re wondering why this doesn’t feel like a recovery outside of the gambling halls of Wall Street, that’s why. But unemployment has been below 12% for over a year now and was steadily trickling downward until June.

Here are your charts:
RealVsReportedUnemployment-June2015

ReportingGap-June2015

It’s great that people are finally talking about why the reported unemployment rate went down or up and that it’s all about the labor-force participation. But once we realize that the labor-force participation rate is actually having a far greater impact on the unemployment rate than the reported unemployment rate itself and start talking in real terms about what the figure comparatively is to a healthy economy, then we’ll really be in business. Heh. Or, y’know, we’ll realize that the nature of work and business has fundamentally changed and it’s completely out-of-touch to talk about “full unemployment” (actually discussed on NPR last week!), perhaps ever again.


This is part of a continuing series on the under-reporting of unemployment in the United States of America.

Past posts (months indicate the month being analyzed – the post is in the month following):
March 2015
February 2015
December 2014 – labor force participation assessment
December 2014
November 2014
October 2014 – age assessment
October 2014
September 2014
August 2014
April 2014
December 2013 – seasonal assessment
December 2013
March 2013*
August 2012*
July 2012* – age assessment
July 2012*

*My initial analyses led to a slight over-reporting of the impact of the reporting gap, so the assessments in these posts are inflated, as explained and corrected in the December 2013 analysis.

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Unemployment Back Over 11.5%, Reporting Gap Ties Record

Categories: A Day in the Life, It's the Stupid Economy, Tags: ,

Usually these days, when the media reports “unemployment was flat, but job growth was sluggish,” you all know how to translate that by now. It means that unemployment actually ticked up through people leaving the labor force, but the BLS has ways of carefully ensuring that’s invisible to the public. It’s just like their repeated phrase in the monthly unemployment report that “labor force participation has been in a narrow range of 62.7% to 62.9%,” not realizing that the difference between a tenth of a percent in that number is worth 0.15% in the actual unemployment figure.

Actual unemployment ticked up in March, to 11.56%, the highest figure in three months. The Reporting Gap, measuring the distance between the published headline figure and the actual figure that accounts for labor force departure, jumped to 6.06%, matching its all-time high, also reached in December of last year. The Gap is now 110% of reported unemployment, also an all-time high.

Here are your graphs:

Actual (red) and reported (blue) unemployment, January 2009-March 2015.

Actual (red) and reported (blue) unemployment, January 2009-March 2015.

Reporting gap between actual and reported unemployment, January 2009-March 2015.

Reporting gap between actual and reported unemployment, January 2009-March 2015.

With labor force participation rates near a 40-year low, there is no real reason to believe unemployment will be under 11% anytime soon.


This is part of a continuing series on the under-reporting of unemployment in the United States of America.

Past posts (months indicate the month being analyzed – the post is in the month following):
February 2015
December 2014 – labor force participation assessment
December 2014
November 2014
October 2014 – age assessment
October 2014
September 2014
August 2014
April 2014
December 2013 – seasonal assessment
December 2013
March 2013*
August 2012*
July 2012* – age assessment
July 2012*

*My initial analyses led to a slight over-reporting of the impact of the reporting gap, so the assessments in these posts are inflated, as explained and corrected in the December 2013 analysis.

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Zero Sum Games and Conservativism

Categories: A Day in the Life, Hypothetically Speaking, It's the Stupid Economy, Politics (n.): a strife of interests masquerading, Tags: , , ,

Helpful advice from friendly people... or an offer to trade places?

Helpful advice from friendly people… or an offer to trade places?

I’m working on the budding theory that, if you can afford to quit your job, it may be at least a little immoral to keep it. Unless, I guess, you’re much better at it than someone else would be and it does good for society.

Whenever someone tells someone else “get a job” or says “they should get a job”, you should ask them who they want to stop working in order to make that possible. After all, it’s not like there are a bunch of unfilled job positions lying around out there with no one bothering to apply. If they are upset that someone is on welfare, they should realize that they are just asking that person to trade places with someone else. Who will, you know, be on welfare then.

Unless, of course, that person has enough money that they can get by without welfare. Meaning that they should probably quit and let someone who needs the money take over.

If you don’t believe this, then it’s pretty important to admit that either (a) the idea that one’s survival or quality of life should be tied to the happenstance of having a job is silly or (b) people are fundamentally unequal and those on the bottom rungs deserve to die for it. While many conservatives seem to believe in a dog-eat-dog approach, I don’t think that many will actually say that those who happen to have employment deserve to live more than those who don’t. And while there are safety nets, it’s these nets that conservatives so often rail against as increasing laziness. What it’s actually doing is compensating for the unequal math that ensures there are not enough jobs for everyone.

I guess this raises the fundamental question of what the purpose of a job is. If the job is to fulfill the function of that job, then great. Stop tying it to people’s survival and let the people who are best do those given jobs. If the job is to enable people to eat in exchange for their labor, then they should probably all be distributed to the people who most need to eat.

I guess if we could just directly control the number of jobs in the society, then this would be a little less of a dichotomous and contentious issue. Of course, that’s not really in the plan with all the capitalism and the treating “The Economy” like a mystical weather phenomenon. The economy doesn’t exist, of course. It’s a series of decisions about our society that we’ve ceded to chance. It’s like if we had the option to create a system of weather where none existed before. Bring hurricanes to Kansas, say, or tornadoes to the Bahamas. Just to see if it motivated people a little, or sometimes ruined everything for no particularly good reason. And then we could have a Chief Meteorologist go on TV and say “we’ve decided to raise storm door allotments for Jamaica, just in case they get more tornadoes. Also, we’re going to all start facing west and breathing heavily to deter hurricanes from coming in from that direction.”

I’m being slightly facetious. But probably not as facetious as you think.

What I guess an actual conservative might say is that everyone who can afford to quit their job should do so and start a business and then create more jobs. Except that to actually make statements like that, with all that “should” and moral implication, would probably rankle the conservative’s sense of freedom. I guess this was the point that Ayn Rand was trying to make all along, advocating for the radical freedom to burn the world down just because you’ve exploited the economy sufficiently to be able to corner all the matches and outlaw fire departments. Which I guess would be all right if ability to exploit the economy were some kind of grand test of character or strength or intelligence or worth.

Instead, it’s mostly just a roulette wheel to which we’ve ascribed enormous import. But at a certain point, we all basically agreed to stop even trying to spin it, to just let the thing turn and turn and turn on its own and hope we can sometimes predict its trajectory to angle the ball in the right spot. And meanwhile a few people get 35-to-1 payouts while everyone else is going broke.

At least when you’re standing at the actual roulette wheel, no one tells you to go get a job.

How did we get to this point? I know that fascism was really abhorrent and I know that the people calling themselves communists were mostly fascists, but is the right response really to just make people feel bad for losing a game of musical chairs where the number of chairs is designed to always diminish? Or at best stay stagnant? To have people’s guesses about what is a likely to increase or decrease in value determine every aspect of their quality of life? I mean, really, did anyone think very hard about this system at all?

There’s a way to reel it back in and at least get some control of it. We have to stop talking about the economy like it’s a thing. There are not bad economies or good economies. There are systems which make people thrive and cooperate and build what needs to be built (and avoid building what’s unnecessary). And there are systems which make people fight and cheat and steal and spend a great deal of time and energy on things that are useless. We choose these systems, we design and implement them. It’s when we believe that the systems are choosing us that we have the apex of a problem.

If the economy is bad, maybe it’s because the very notion of an economy is bad and we need to find a new system. And if it’s good, why is it designed to leave some people out, always? And what do you suggest we do with those people? Are you willing to trade places with them because you can afford to? If not, why not? Is this really a system of betterment and improvement of the society or is just about finding an excuse to behave as you might in the wild? A wild beyond our wildest actual observations, with interest rates and stock prices storming over the Sahara like a great tsunami of chaos, ready to wash away anyone and everyone in its wake.

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Unemployment Actually Down, Still Above 11%

Categories: A Day in the Life, It's the Stupid Economy, Tags: ,

Unemployment declined in February 2015 for the second straight month, to 11.42%. This is the lowest unemployment has been in the US since June 2009, when unemployment was 11.26%.

The Reporting Gap, which indicates how under-reported the official BLS figure is when failing to account for departures from the labor force, crept up to 5.92%, the third-highest rate to date. This puts the gap at nearly 108% of the reported figure, demonstrating that the BLS is ignoring 52% of those who are actually unemployed.

Unemployment in the US has been above 11% for 70 consecutive months. It has been above 10%, the highest reported figured by BLS during the Great Recession, for 72 consecutive months (six full years).

Here are your charts:

US actual (red) and report (blue) unemployment rate, 2009-2015

US actual (red) and report (blue) unemployment rate, 2009-2015

US "reporting gap" between actual and reported unemployment, 2009-2015

US “reporting gap” between actual and reported unemployment, 2009-2015

Unemployment in February was down 0.05% from January’s 11.47% and down sharply (0.24%) from December’s 11.66%. These are the most substantial improvements that have been demonstrated since late 2013, when unemployment fell below its spike in October 2013 to over 13%. Current trends seem to indicate that no one is re-entering the labor force, but those who have remained in the labor force are actually finding jobs at a slightly steadier pace at the outset of 2015. If these trends of improvement continue, unemployment may actually be below 10% by the end of 2016.


This is part of a continuing series on the under-reporting of unemployment in the United States of America.

Past posts (months indicate the month being analyzed – the post is in the month following):
December 2014 – labor force participation assessment
December 2014
November 2014
October 2014 – age assessment
October 2014
September 2014
August 2014
April 2014
December 2013 – seasonal assessment
December 2013
March 2013*
August 2012*
July 2012* – age assessment
July 2012*

*My initial analyses led to a slight over-reporting of the impact of the reporting gap, so the assessments in these posts are inflated, as explained and corrected in the December 2013 analysis.

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Overpopulation and the Growth Obsession

Categories: A Day in the Life, It's the Stupid Economy, Politics (n.): a strife of interests masquerading, Tags: , ,

Growth!

Growth!

Did you ever wonder why property values always (2008 aside) go up?

It just feels like one of those economic truths we imbibe at a young age, probably before we even take an Economics class, for those of us who are fortunate enough to grow up with educational opportunities. Cars will depreciate 50% when you drive them off the lot. You should save some of your money. The stock market’s long term trends are up (gulp). And housing and other land values will always rise over time.

In a world where the entire planet has been mapped and we haven’t started earnestly shipping people to Mars or Titan or Space Station XLVI, there’s really one fundamental reason for the value of property increasing. Overpopulation.

I guess one could say that it’s judgmental to call increases in population “overpopulation”. This is a touchy issue for a lot of people, not least of which are those who believe we are mandated to “be fruitful and multiply”. When I was younger, I was pretty convinced that overpopulation was the #2 moral issue in the world, behind violence, and I’d still probably put it in my top five. Most all of the direct causes of violence and injustice in our world derive from scarcity, and scarcity is directly related to overpopulation. No matter how equally we distributed resources and pooled efforts, we could not, tomorrow, support a planet of 100 billion people. And while that number seems utterly crazy, our current 7 billion would have seemed equally crazy to people a century ago.

I’m sure you’re all at least a little familiar with this chart:

World population, 0-2015

World population, 0-2015

That’s a terrifying growth rate. The acceleration of the human population on the world is pretty directly correlated to the overall negative impact our footprint is having on the planet. The first grips of the Industrial Revolution were dirty and destroyed certain regions (black moths, anyone?), but the full-scale acceleration of the size of the species has really started the wheels turning on some major devastation. I’m known among my peers for being a bit of a climate change skeptic (I just don’t believe we could possibly have enough data to be sure of the long-term trends), but I believe firmly that it’s good that people believe in climate change because it’s the first thing that’s been able to convince pretty much anyone to reconsider our obsession with growth and conquering nature. Somehow generating mass extinctions, dropping a miles-wide trash gyre into the Pacific, and slaughtering a healthy portion of the flora and fauna on the globe haven’t made anyone blink. I guess because the impact on us is less obvious. We have to believe that we will be uncomfortably hot or wet to start caring.

While I often go around lambasting human myopia, the swift upward trajectory of that chart at least explains our myopia a little bit. This sea change in growth and expansion of our planetary presence hit pretty recently and we weren’t prepared to think about it from a philosophical perspective. I’m being a bit charitable, of course, because the prevailing belief is that there are no philosophical perspectives to be had, full stop. Philosophy is a waste of time, they say, but science will cure all ills and answer all questions. This makes the desperation many scientists are expressing over climate change poignant almost to the point of humor – they keep banging the scientific drum, but a philosophical solution is their only hope. After all, science spends the rest of its time openly mocking and eschewing moral judgments or even ought statements whatsoever. Suddenly the scientific community is upset that no one is motivated by a moral judgment when they keep flinging sheets of data at people. It’s almost like we have to have a set of beliefs and principles and those will dictate our actions far better than any scientific “fact”.

I’ll get off my soapbox in a minute, but I don’t think it’s a coincidence that all this destruction has ramped up while we’ve been openly wrecking our institutions of philosophy and morality. Sure, most organized religions are riddled with some level of hypocrisy and corruption at the top, which is why I shy away from them. But it’s insane to conclude that because some human efforts to interpret God and morality on the planet have gone sour that the whole enterprise is bogus. This is exactly like finding out that James Frey made up parts of A Million Little Pieces and swearing off reading or learning about the scientist who manipulated the vaccine/autism study and saying that all science is fabricated. And yet, aided by the pre-eminent belief structures of our day (science and capitalism), that’s exactly what most people have done with not only religion, but also philosophy and morality of any kind. And we’re surprised by the greed, selfishness, and devastation our species is unleashing? You first have to believe that something can be wrong to even be capable of engaging the question of whether your own actions are wrong and then get to the heavy business of self-improvement.

So what assumptions and implicit moral judgments are ordering our daily life if we’ve handed the reigns to science and, far more influentially, capitalism? Well, the main one is growth.

I’ve talked a bit before on this blog about our cancerous obsession with growth on this planet and its ill effects. But I’ve usually discussed it in terms of how illogical it is to believe in eternal growth, like some sort of perpetual motion machine, just spinning up and up and up forever. Only recently did I realize that the engine of that growth – and the thing that seems to mask its illogic – is overpopulation. And property is the easiest place to see this. If we have a fixed amount of land in our world (face it, no one’s moving to the Great Pacific Garbage Patch), then it will only gain in real value if the population increases. If the population is stable, land values will be stable. And if the population decreases, land values will decrease.

No wonder it’s conventional wisdom of the capitalistic era to invest in land for a sure return! Just look at that spike in population, putting pressure on those land values. And sure, there’s a desirability cut to add in here, especially if we’re considering buildings on that land. People would rather live in New York City than rural Syria right now. People would rather live somewhere newly renovated than a jungled-over home in the Lower Ninth Ward. But those are only influences on the overall trend. Greater population, greater value.

And to an extent, this principle is what influences and generates a belief in all of capitalism. Every company must not only profit each year, but increase profits. But as long as more people are being born than are dying, there are new target markets to be acquired and it’s feasible to sell more every single year. The total insanity of this obsession with endless growth, rather than maintenance, is completely hidden by the skyrocketing overpopulation that makes it seem contextually sane.

And I guess it would be sane, to an extent, if our planet were not shuddering under the weight of the impact of our growth. If we could guarantee infinite resources and the ecosystems of the world weren’t folding up shop and disappearing, then it wouldn’t be so bad. Maybe this model even made sense when the planet’s population was 500 million people and had room for some more. But with the amount of understanding we’ve accumulated now, not to mention global connectedness, continuing on in this manner is criminal.

Obviously the solution to overpopulation is not some giant die-off. I do not wish to see a war or a plague or some kind of draconian set of death panels unleashed on the species. And, incidentally, I think this reality is an interesting refutation to that particular branch of conspiracy theories that hypothesizes that people will be slaughtered en masse after some kind of major round-up as the end-game of capitalism. To the extent that there might be a unified capitalist effort, it wants the opposite result. It needs a population of 10 billion, 20 billion to generate enough people in the lower class to keep the hierarchical structures intact. Slaughtering all those at the bottom would make the wheels fall off of capitalism because it would eliminate the scarcity that keeps people at the bottom hungry, afraid, and willing to work endlessly for virtually no remuneration.

But there must be a solution to overpopulation. Because we simply can’t go on like this. If anyone really examines and considers the implications of that chart sincerely, I think they’ll agree. Most people’s only alternative to limiting our growth trajectory is just hoping blindly that science figures out ways to solve problems faster than we generate them. That science will declare that food can be generated from air alone, or that we’re ready to terraform and colonize Mars tomorrow, opening up a whole new world to pillage and ruin, or that we have a fleet of space stations that can happily hold the extra 10 billion. This is what you get when you invest everything in science and ridicule philosophy – no one is really thinking about the long-term plan and everyone just hopes science invents some new piece of magic that makes the solution seem obvious and justifies not thinking about it creatively.

After all, what science rejects most heartily is the question why. Well, second most heartily, behind the question should. Science believes these inquiries are incoherent, replacing them wholly with what and how. But why is the question we need to be asking about infinite growth of the species. Do we really need to put 20 billion folks on this Earth? And won’t the scarcity that ensues be so devastating that we’ll have found a very ugly and deadly solution to the overpopulation problem by default?

I try to do a lot of thinking about what would steer the planetary course from a growth-oriented belief structure and system to a maintenance-oriented structure. The only people who have ever thought seriously about this and happened to have significant leadership positions are the Chinese government in the second half of the 20th century. Now I’m not here to defend all of their beliefs and decisions, but the one-child policy was a serious effort to curtail the wild endless growth of the population without resorting to a more dangerous solution to curb population growth. China, for the first time in human history, was willing to question the assumed absolute right to procreate as much as possible, and the results were quite positive for their society. And I think such a belief structure and willingness could only come from a society that favored communism to capitalism, because it stemmed from favoring equality and maintenance over inequality and growth.

Of course, all of that has now been lost and discarded. China has gotten in the growth game and is doing it better and faster than anyone, embracing capitalism and easing the one-child policy and its egalitarian roots. So it goes. But it does at least leave us with one piece of the blueprint for how to, eventually, build the maintenance-society.

But even if the planet weren’t about to start coughing and spluttering under the weight of all this human growth, I think shifting to a maintenance-society would still be a moral issue we must embrace. The byproduct of the growth-obsessed society is the accumulation of wealth at the top and poverty in the long, long tail of the plurality of society at the bottom. You want to know why the middle-class rhetoric of the last sixty years in America is so appealing? Because it’s where most people want to be. Even though we are taught to dream of riches and wealth and being able to figuratively or literally own our fellow person, the intuitive home for most folks is to be in the middle of the pack. The problem is that capitalism is constantly threshing most people in the middle of the pack downward and anointing a few people up to the top, constantly striving to stratify harder and harder as pressure is applied on everyone to work harder, faster, longer for less pay.

This is not some anomaly of the last few years in a down economy. It is happening everywhere and for good reason. It is the natural design of capitalism. It solves itself as a wealth accumulation and stratification system.

And even if we can hack back the worst effects of that to constantly alter it at the margins, why do we embrace such a system in the first place? The justification given is always growth. Look at how much we’ve grown under capitalism! Look at all the shiny new buildings! Look at all the people laboring harder than ever! Look at our stock portfolios! This engine is just going going going going going forever! Hooray!

But it’s pretty empty, especially when real quality of life is diminishing for most everyone. And the breakthroughs in technology and replacement of work are making people more desperate to work for less, rather than improving leisure and relaxation. We are reaching a horizon where, despite our perilously swift growth rate in population, if work and effort were equally distributed, most people would not have to work all that hard. The payment? We’d have to accept maintenance instead of growth. We’d have to have fewer children and accept that they will have lives that are more or less like our own, maybe slightly better or slightly worse. We’d have to get comfortable with a world where that goes on forever.

The problem is that we’ve conflated economic growth with all other kinds of progress. Making this declaration does not mean we’d stop researching science or inventing technology or curing diseases, let alone creating art or entertainment or social advancement. It means, in fact, that the focus would be on those endeavors for their own sake rather than as a means of economic advancement. Which mostly just means we’d lose the worst renditions of all those efforts. Gone would be the lousy mass-market paperback, the blockbuster action movie, Viagra for dogs, and anything else that exists merely because an army of marketing geniuses can convince you to buy it when it serves no purpose. Instead, we’d only have room and time for the truly inspired art, the worthwhile science, because these efforts would be made for communal benefit and their own inspiration instead of a cutthroat game of accumulation and self-advancement.

It may sound dreamily utopian, but it’s really the immediate natural consequence of a philosophical shift from growth to maintenance. The profit motive has happened to inspire some incredible things, it’s true. But those things did not require the profit motive to motivate them. People still want to make art and cure diseases even if no one is going to pay them for it. But the worst science and creativity we’ve seen is entirely motivated by making quick cash. And that’s what we need to eliminate.

Nowhere is this more obvious than in the bloated legal and financial architectures that are, to date, swallowing most of the best young minds I know. There is nothing gained from a society that invests most of its energies and prestige into these institutions. Law should be a technical thing that guides behavior quietly in the background, not that generates an entire industry that is constantly growing and consuming swaths of the society, putting more people in prison than in any other realm and making everyone fear for their endeavors and hire their own team of lawyers to read the fine print. Financial instruments, if we are to have them at all, should gently enable people to maintain their holdings so they can subsist at a reasonable quality of life, not gamble to be able to bow out of life artificially early or take advantage of others in society and leave them destitute. These things are crazy. No one would design a society willfully, philosophically, from the ground up, and include American legal and financial systems.

And yet the high remuneration and the twin pressures of a student debt machine and a terrible economy are funneling the best and brightest into these worlds, ensuring they do very little good for the world. The best among them promise that they will donate their riches someday to efforts that are actually producing something good for the world (or more often just trying to bail water from the negative byproducts), but this is much like nobly promising to repair a house after spending a life ransacking it. Isn’t it just better to do upkeep on what is, frankly, a pretty decent house in the first place?

All any of this takes to change is changing how we think about the world, our values, and what is good. Capitalism has taken an infectious and dangerous hold on our world outlook and it’s about to bring us all to the brink of ruin. Maybe not in my lifetime, maybe not in yours, but if we don’t start thinking about the 2150 world now, we’re being grossly irresponsible. It’s no coincidence that janitors and maintenance folks are the people we revere the least in our society. We have to flip our values, and fast, if we’re going to avoid the doomsday scenarios of slaughter, plague, or just barrenness on this planet.

They made a movie about a lot of this stuff last year, a movie that critics loved and no one wanted to see. It was really unnecessarily violent and brought me to the edge of walking out on those grounds alone, but the point it was making was excellent. It was called Snowpiercer and it modeled our planet as a perpetual-motion train, tiered by rigidly-enforced classes, and running literally on the sweat and toil of the torture of the children of the underclass. Periodically, a certain portion of the underclass would be slaughtered to maintain a safe number of people living on the train so that the little world did not grow beyond its means.

This movie got almost everything right with a grand metaphor about human structures. Where it failed, though, was limiting the size of the train. We don’t have some maniacal person at the top orchestrating the slaughter of the lower classes. We just add more and more people at every level and institute systems that wherever most of them are born, they will eventually die at the back of the train. And we hold up the few people who jump cars as models for everyone to show how fair and great this class struggle is.

The problem is that we have the resources to put everyone on the train in the middle of the pack. They’d just have to be okay with the train stopping. With us appreciating exactly what we have, exactly what we’ve been given. With striving and struggling to create new ideas and inventions for their own sake rather than to be better than our neighbor. With choosing to be a basketball player or a musician or a president because those are our true calling, not because they come with extra pay. With choosing to be a janitor, maybe, because maintenance is noble and true and what we should actually aspire to.

You may call me a dreamer. But there are alternatives to the nightmare train we’re on. And we can either choose to get off or watch the train, eventually, go over the side of a cliff. Sometimes it takes radical change that’s voluntary to avoid much more devastating, involuntary radical change.

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401(k)’s and IRAs are a Pyramid Scheme

Categories: A Day in the Life, It's the Stupid Economy, Tags: ,

Bernie Madoff, after being arrested in 2009.  If only he had called it "saving for retirement!"

Bernie Madoff, after being arrested in 2009. If only he had called it “saving for retirement!”

The stock market is booming! On Wednesday, February 25th, 2015, the Dow Jones Industrial Average closed at an all-time record-high of 18,224.57 points. This is getting awfully close to triple the March 2009 lows and is, according to all the experts, a sign that the economy is officially Back (TM). It’s also a sign that everyone should always invest all expendable capital in the market because it has a unidirectional future: up!

Right?

Well, as long as people keep buying into the pyramid. Your investment will definitely pay off as long as you can convince five more people behind you to make the same investment. So far, this has been a pretty effective strategy for keeping the empty engine of stock market growth churning and covering up for gaping holes in the economy, like the fact that unemployment is actually over 11%.

But you don’t need to convince anyone to buy into the pyramid! That work is already being handled by the private equity firms that manage your 401(k) and IRA funds, your replacement for savings accounts in the New Economy. They keep using the recent past performance of skyrocketing market growth to convince more and more employers and individuals to ditch silly things like interest in favor of the big-money roller-coaster of US corporate equities. The percentage of individually held assets in these funds is becoming dizzying, especially when measured as a percentage of the total market capitalization of the stock market as a whole. And it can only go up, as long as regularly forced increments of investment continue to be drawn from every working man, woman, and child in the United States.

According to the World Federation of Exchanges (WFE), the total market capitalization of the two major US markets is a little over $26 trillion, a number that no one alive is possibly capable of understanding. The world’s market capitalization is approaching $64 trillion, which, ditto. We can at least pretend to understand the relationship between a number like 26 and a number like 64, so maybe just forget the trillion? I dunno.

Meanwhile, according to the Commerce Department, US asset managers are running about $19 trillion worth of US pension assets, mostly through 401(k)’s and IRAs, though I’m sure there are a smattering of larger pension funds in there as well. Though that number is from the end of 2012, so I’m sure the last two years have seen vast growth in that category. After all, something called the Investment Company Institute put the 2012 figure at $19.9 trillion and the 2013 figure at $23 trillion, a 15.5% increase in one year. So it’s probably much higher by the end of 2014, which is where the $26 trillion market capitalization figure comes from.

Now, granted, not all of that money is invested directly into the US stock market. Some of it goes into the global markets, though a pretty small percentage. Some of it is managed by stodgy old conservatives who put it into negative-savings-rate fixed income funds or the like. We’re not actually to the point of craziness where the entire market is held by pension and retirement funds of one kind or another (at which point the pyramid will be looking mighty unstable indeed). But let’s try to get an estimate of what the percentage really is, a number that no one seems to want to report and has to be extrapolated from various reports.

Here, I made you a chart:

Based on data from the ICI and a couple extrapolations.

Based on data from the ICI and a couple extrapolations.

Please note that the 50% figure for other institutions was just a super-conservative figure I threw together that by all accounts is probably much higher. It’s too hard to scrape together data from individual investments and national, state, and local pension funds and all that extra jazz. It’s also worth noting that the 61% figure is extrapolated from the average between investors in their 60’s (~50%) and investors in their 20’s (~72%) as far as equity holdings, so that number may actually be a bit aggressive. So let’s round this chart down to $15 trillion to be extra-extra conservative.

What was that total US market cap again? $26 trillion?

Again, I know that not all of these equities are US stocks. Some people are buying UK companies or investing in China and Russia. So it’s not actually 58% of the US stock market that’s held by these kinds of funds. Maybe it’s 50%. Maybe it’s 45%. But whatever it is, it’s an unbelievable and unprecedented percentage of total investment in the market that’s been generated by a few wealth managing companies auto-investing into the stock market.

It should be noted that they don’t invest in the stock market because it will have a good return or because stocks are safe or something. They just invest in the stock market because you’re supposed to invest in the market. Which is kind of the definition how pyramid-scheme buying works. You buy something because other people buy it and, as long as everyone unthinkingly follows this mantra, the returns will increase.

The problems here should be obvious. All this investment is not being made by shrewdly calculating people hoping to garner safe and viable investments for their clients, whatever the rhetoric is. At best, it’s blind pyramid-scheme buying and at worst, it’s directly manipulated. There are countless articles all over the Internet about the fact that most hedge funds and money management companies are directly using their clients’ money to serve the interests of the company’s direct investments instead, often ensuring that they profit off the decline of the held accounts. The moral hazard of managing other people’s money is well documented. And then there’s the more common and popular critique of 401k’s as discussed in this Salon article, demonstrating the enormous fees levied for the privilege of dumping your money in the market. At best, they are skimming massive percentages off the top that consume your return; at worst, they are making these charges for the courtesy of squandering and mismanaging your retirement.

One of the only reasons this massive wealth transfer and propping-up of the stock market has been able to be perpetrated is the obsession with destroying interest rates. If interest rates were close to their traditional rate of 5%, stock market returns and their commensurate volatility would not look so attractive. But when most retail banks straight-facedly offer “savings” accounts with interest rates that you need several decimal places to see a number that is not zero and the highest-return online savings are capped at 1%, the desperation of those trying to save becomes quite high. Especially when the inflation number was manipulated to exclude fuel and food costs, or what most people spend most of their money on, as they skyrocketed through most of this decade (admittedly, this trend is now substantially altered with $2/gallon gas, but we don’t know for how long).

And then, of course, you have all the lobbying to move the behemoth government-run pension funds into equities while further deregulating the behavior of the investment bankers running them. This is pretty well chronicled in this Intercept article, further fueling the campaign to prop up the entire market.

Maybe 45%-50% of investment doesn’t sound like a lot. But without it, the Dow Jones would be at 9,000 or 10,000 points right now instead of 18,000. You know, a figure that’s a little bit off the lows, but still nothing like a recovery. Or, in other words, exactly where employment actually is, or where the economy feels like it is to everyone except the top echelons of society. And I know defenders of these practices would point out that all those investors with all this money in the market have made huge sums for their retirement investment in the last few years, as proof of this working. But you know who made tons of money in returns before they suddenly didn’t? Bernie Madoff’s clients.

You may say this is an oversimplification, but I challenge anyone to come up with something that’s behind the rally other than just a vast over-investment of forced stock buys for retirement accounts on the fundamental assumption that The Market Always Goes Up. Yes, some of the balance sheets of these companies have improved by laying off workers, paying workers vastly less, draining more work and hours out of workers, and keeping the supply chain extra-lean. But that’s not why 401(k)’s and IRAs are pouring money into these companies. They’re pouring money into these companies because it’s the theory of how these investments are designed and we have several recent years of inflated return percentages to justify it.

Even if we weren’t comparing things to the 2008 lows, do you really believe that the landscape of the US economy is the best it’s ever been? Do you really believe that corporations are fiscally healthier than ever before? Because that’s what the market is trying to sell you on, conceptually. Even the biggest bulls in the world don’t actually believe that this is true. The pre-crash high of the stock market was 13,895 points, reached in late September of 2007. This figure, as we all now know, was vastly inflated by the housing bubble and irrational exuberance. But the market now tells us that things are 31% better than in 2007. Just stop and think about that for a minute. Admittedly the economy was doing pretty well in the 90s and maybe even part of the 00s, but we all know that the 2007 number was fakely generated by phony investments, mortgage-backed securities, and blind faith in the boom. And stocks are ONE-THIRD HIGHER than they were then?!

People made fun of people for not realizing that there was nothing behind Bernie Madoff’s get-rich-quick investment scheme. And I know, deep down, that there is actually nothing behind money of any kind, that currency (fiat or otherwise) is all a fake belief system that we generate for ourselves. But there are still levels of fabrication. And this one, my friends, is a real whopper.

Bernie Madoff had 162 pages worth of clients, whose losses totaled $65 billion. That’s a lot of money, but it’s $0.065 trillion. The exposure to retirement investment accounts in the US alone is $26 trillion (exactly 400 times the Madoff investments) and covers pretty much everybody. I don’t think many of you reading this out there fail to have one of these accounts in some form or another.

After all, the people will more easily fall for a big lie than a small one.

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Labor Force Participation Rates Falling Twice as Fast as Predicted

Categories: A Day in the Life, It's the Stupid Economy, Tags: ,

Contrary to what you might imagine about the Bureau of Labor Statistics (BLS) and its record-keeping on the purported unemployment situation, they are fairly aware of the impact of the crashing labor force participation rate on the overall employment picture. And contrary to the joyous daze caused in most of the media by pronouncements that the unemployment rate is at a 6.5-year low of 5.6%, BLS even seems to realize that the labor force participation rate is going to continue to fall. More and more media outlets are picking up sour notes about the absurdly low-seeming unemployment rate and how it mostly reflects workers fleeing (or never entering) the labor force, rather than actually, y’know, getting jobs. Indeed, they have done reports on this very issue.

To channel Condoleezza Rice at a hearing here, I believe the report was titled Labor force projections to 2022: the labor force participation rate continues to fall.

Written in December 2013, the report makes the dire prediction that the labor force will plummet to 61.6% by the end of 2022. This number, of course, would be an over 2% drop from the attributed end of 2012 rate of 63.7% and continue to distort the unemployment figure drastically. Because not only are those 2% of the overall population people who would normally be counted toward unemployment, but unemployment uses the labor force as its denominator, meaning that the percentage of people with jobs looks higher because it is a percentage of the labor force, not the overall population. And if we keep excluding more and more jobless individuals from the labor force to begin with, the proportion of those with jobs in the remaining smaller section of the population will rise. When really those 2% of the populous should be counted as being in both the numerator and denominator, swelling the rolls of the unemployed drastically.

How drastically? By 108% last month alone, as I’ve reported. At least if we count all the people who’ve left or failed to enter the labor force since the advent of the so-called Great Recession.

61.6% certainly sounds bad, but similarly, 2022 sounds like a long time from now. A really long time from now. So how accurate is that prediction?

Well, we’re already halfway there. It’s been two years since the predicted starting point for that decade-long trajectory and labor force participation stands at a 36-year-low of 62.7%. We’ve dropped 1.0 points out of a total of 2.1 points in the predicted 10-year fall, in just a fifth of the time.

So I ran some numbers and graphs to see what kind of pace we’re on:

Labor Force Participation, 2013-2014.

Labor Force Participation, 2013-2014.

Looks bad, but a little up-and-down. Let’s put a trend-line on that:

Labor Force Participation, 2013-2014, with trend-line.

Labor Force Participation, 2013-2014, with trend-line.

Now we can clearly see through the noise that there’s a steady pace of decline, that the general direction is down and what that rate is likely to be. So when do we hit 61.6%?

Labor Force Participation, with projected trend-line through June 2017.

Labor Force Participation, with projected trend-line through June 2017.

Roughly June 2017. Which is, uh, five and a half years before December 2022. Or a bit over twice as fast as predicted. 2.22 times as fast, if we’re being technical about it. But hey, give them the extra 0.22 times as margin of error, just in case my prediction is somehow too speedy.

Now, yes, their prediction algorithm is certainly more statistically sophisticated than my little trend-line. As they note at the end of their report, “In order to carry out its projections, BLS analyzes and projects the labor force participation rates of 136 different groups, including the two genders, 17 age groups, and four race and ethnicity categories.” I just used the overall population and ran with it, even though I probably have the tools to do a decently robust age analysis after what I put together a couple months ago.

But here’s the thing – I really don’t think they would have predicted it would take just two years to get to 62.7% and then another eight to get down to 61.6%. Or if they did, it feels like that decision was driven by irrationally exuberant optimism. The fact is that the employment picture has stymied every optimistic prediction, save for those of people unsophisticated enough to not look beyond the headline-published number and its allegedly precipitous decline. Unemployment is actually over 11.5%, not below 6%. We’ve just conveniently sidestepped reality by benefiting from a number that encourages people to be discouraged and leave the labor force entirely. And when BLS itself recognizes that this trend will continue, but seems too cautious in their ten-year projection, it feels like we should just stop talking about a recovery already. Or at least one that helps those below the very top shelf of our self-imposed economic structures.


This is part of a continuing series on the under-reporting of unemployment in the United States of America.

Past posts (months indicate the month being analyzed – the post is in the month following):
December 2014
November 2014
October 2014 – age assessment
October 2014
September 2014
August 2014
April 2014
December 2013 – seasonal assessment
December 2013
March 2013*
August 2012*
July 2012* – age assessment
July 2012*

*My initial analyses led to a slight over-reporting of the impact of the reporting gap, so the assessments in these posts are inflated, as explained and corrected in the December 2013 analysis.

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No, Unemployment Didn’t Just Decline

Categories: A Day in the Life, It's the Stupid Economy, Tags: ,

It went up.

Unemployment in the United States actually rose in December 2014 from the previous month, from 11.56% to 11.66%. This is largely the result of a revision to November numbers declaring the unemployment rate during that month to be 11.56% instead of the previously released figure of 11.71%. The Reporting Gap, or the gap between the BLS’ official headline published figure and the actual figure that accounts for departures from the labor force, rose to a record high 6.06%. This is now 108% of the reported figure for unemployment, also a record high. The previous high for the Reporting Gap was set in September 2014, when the Gap stood at 6.04% over a reported figure of 5.9%.

Without the revision of November’s numbers, unemployment would actually have dropped by 0.05%. Of course, the reported figure plunged by a full 0.2% to 5.6%, the first time the figure has been that low since June 2008, when actual unemployment was a mere 6.87%. The last time unemployment was actually below 5.7% was in March 2007, when real unemployment was 5.54% and was reported to be at 4.4%.

Most importantly, the actual rate of unemployment, counting people who have left the labor force, remains 1.66 percentage points above the highest reported figure of the millennium.

While the American media has made much of a so-called “recovery” from the Great Recession that began in 2008, befuddlement continues to be reported on the nature of this recovery, how it is slow, protracted, and does not seem to be impacting those at the bottom of the economic ladder. Constant confusion has been expressed as to why it doesn’t “feel” like a recovery and why so many people seem to be unable to get work when the unemployment rate has purportedly plunged to almost economically desirable levels from a supposed peak at 10%. The Reporting Gap, which directly measures the number of hidden unemployed who have left the labor force, can be seen as a barometer of this otherwise inexplicable feeling. Not only have wages continued to stagnate, but the actual employment situation remains dire, despite much-vaunted reports that say otherwise.

Awareness of the issue of people leaving the labor force has been increasing over the past few months and years as people scramble to figure out why happy days appear to not be here again. Given that labor force participation hit a 36-year low in December 2014, it seems unbelievable that more people are not aware of the impacts of this loophole in how unemployment is reported by the BLS.

Real unemployment has been in double-digits since March 2009, marking almost six straight years where the actual number of unemployed has been larger than the reported peak of the unemployment crisis.

Here are your charts:

Real unemployment (red) and reported unemployment (blue), 2009-2014.

Real unemployment (red) and reported unemployment (blue), 2009-2014.

The Reporting Gap between real and reported rates, 2009-2014.

The Reporting Gap between real and reported rates, 2009-2014.

NB: The graphs above were edited on 10 January 2015 after I realized that I’d accidentally pulled October’s graphs instead. I normally don’t edit things on this page, but this seems to be a sufficiently trivial mistake and something a little misleading, so it warrants a quick change. The above graphs are now accurate, circa December 2014.


This is part of a continuing series on the under-reporting of unemployment in the United States of America.

Past posts (months indicate the month being analyzed – the post is in the month following):
November 2014
October 2014 – age assessment
October 2014
September 2014
August 2014
April 2014
December 2013 – seasonal assessment
December 2013
March 2013*
August 2012*
July 2012* – age assessment
July 2012*

*My initial analyses led to a slight over-reporting of the impact of the reporting gap, so the assessments in these posts are inflated, as explained and corrected in the December 2013 analysis.

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