Democrats’ Vision for Economy is GOP-Lite

“So, resolutely turning her back upon the house, she set out once more down the path, determined to keep straight on till she got to the hill. For a few minutes all went on well, and she was just saying, ‘I really SHALL do it this time–‘ when the path gave a sudden twist and shook itself (as she described it afterwards), and the next moment she found herself actually walking in at the door. ‘Oh, it’s too bad!’ she cried. `I never saw such a house for getting in the way! Never!'” –Lewis Carroll, Through the Looking Glass

Paul Jay of the Real News Network interviews Jeff Faux, Founder and now Distinguished Fellow of the Economic Policy Institute in Washington, DC. He is an activist, economist and writer, He has written extensively on issues from globalization to neighborhood development. His latest book is The Servant Economy; Where America’s Elite is Sending the Middle Class. Originally published at Real News Network.

A reasonably clear-eyed view of the Democrats, in simple language.

More at The Real News

Lots of interesting points. First, the Democrats think they’re going to do OK no matter what:

[FAUX:] You ask yourself: you know, what is going on with the Democrats that they think they can get away with, you know, another three years, maybe more, of this kind of anemic growth, which is declining–with declining wages, declining incomes, declining opportunities for young people? And if you look carefully at what they say, I think there are several things.

One is they think that they’re going to be okay, just like the bankers on the other side [sic] think they’re going to be okay. They’re going to be okay because the Democratic Party’s constituency is growing faster than the Republican Party’s, so that you have minorities, single women, immigrant groups that are growing faster than the white male base of the Republican Party. So the Democrats think that no matter what, they’re going to be doing okay in the future. … They also think, number two, that the Republicans will continue to scare the electorate.

Of course, we could generalize this to say that the political class thinks they’ll do OK, matter what. After all, wingnut welfare won’t go away even if the Democrat’s demographic Godot actually arrives one day.*

Second, and as a result, disemployment will remain permanently high.

[FAUX:] If you’re sitting in the White House now and talking–having this conversation with Paul and Jeff, one of the things you might say is, look, we got reelected when the unemployment rate averaged 9 percent. So doesn’t that mean we can get away with a weak recovery? Now, get away with it means that the Democrats don’t have to discomfort the business people who are financing them. … [S]o you’ve got this situation in which both Democrats and the Republicans in some sense are doing okay. You know, if the electorate could reelect Obama with a 9 percent average unemployment rate, well, maybe they can elect his Democratic successor with an 8 percent unemployment rate.


Third, there’s a blindingly obvious test for whether the Democrats are serious about changing anything: The filibuster:

[FAUX:] And the first–you know, after the president got reelected, the liberal press was full of this, oh, it’s a new Obama, he’s, you know, out there, going to fight for us, he learned his lesson. And the first test of this was the organization of the Senate and the issue of the filibuster.**

And, you know, there was a lot of talk in late November and December how the Democrats were going to get rid of this and they were going to allow the Senate to vote on important bills, you know, and pass them with 51 percent. Well, they opened the Senate, they reorganized it, and nothing happened. If you were president of the United States and you had gone through the last four years and you were seriously interested in changing the direction of this economy, you would have put all your political chits on changing that Senate rule. And they didn’t.

I agree with Faux on the test, but he’s got the timing wrong. The time for passing legislation with 51% Senate votes was in 2009 (as NC readers know). Change the filibuster in 2009, and you get — if you want — a right-sized stimulus package and Medicare for All, instead of the miserably inadequate stimulus we got, and a revision of the health insurance brokerage system crafted by a Wellpoint VP and greased for passage by a deal with Big Pharma. Heck, maybe you get Glass-Steagall back, and a genuine Pecora Commission instead of a kayfabe one. But the Democrats didn’t do the one thing that would bring about the changes that the remaining good will on their balance sheet had convinced voters they might do. And now the good will has almost gone, as indeed it should have, though it’s perhaps not written off.

* * *

And now we arrive at TINA (There Is No Alternative) once more: The path shakes itself, and we walk into the front door of the house we turned our back on.

[FAUX] You need a package that is stimulative of the private sector in spending. You need a package that certainly does not expand the foreign element in our economy, expand trade. As a matter of fact, you need a package to contract it and you need a package to provide for a better bargaining position for the American worker. And it’s not just union members. You know, unions were never a majority of the workforce, but the wage increases that unions got affected the rest of the economy. … Unions were the engine, really, the long-term engine of economic growth in the 20th century in this country. And by undercutting them, essentially we are taking a critical part of that engine and throwing it away. … I think the labor movement and other, you know, movements and what we call the sort of mainstream left need to face the brutal fact that the Democratic Party is not going to pull us out of this. So they’re going to have to start organizing. They’re going to have to start knocking off Democrats who are, you know, favoring austerity. And without some new force in this game, both Republicans and Democrats are united for another ten years of hard times. I don’t think this country’s going to be able to stand without some eruption of social tension.

But knocking off Democrats won’t help a bit; being an elected representative is, at this point, a sort of internship on the way to the real money on K Street (and most Democrats on the Hill, like most Republicans, are very well off anyhow). So how does a minor blip like losing an election reach a Democrat? I mean, at least, the sort of Democrat who can go up in a small plane without worrying? I don’t think it does. So I don’t see how “knocking off Democrats” helps.

But suppose that the Democratic Party — I know this is ridiculous, but bear with me — were electorally responsive. Legislation passes to re-empower union organizing. The SEIU leadership (say) turns from the craven careerists who helped sell ObamaCare instead of single payer into a modern version of the Wobblies, and organizes One Big Union of tens of millions (competing directly with the political parties, but never mind that). And presumably protectionist barriers go up to eliminate labor arbitrage. Does capital settle down happily to start making goods (and money!) here? I don’t think so, first because they’d have to give up a lot of power, second because they’d miss making people suffer, which they enjoy, and third because by this point the 1% are transnational and view nation-states as flags of convenience and great metropolises as pied-à-terres. So they just move everything off shore. After all, they bought one political system, so they can just buy another. Boeing moves to China (from Chicago); the banks move to London (good riddance, except for the jobs); Silicon Valley goes virtual in South East Asia. And so forth. All that’s left is coal, fracking, MacMansions, and Major League Football. And hippies and permaculturalists, of course.

Not an “alternative” I’m especially happy with; I think worse is worse, not better. It feels to me like a global problem has to be approached globally; but even leaving aside implementation details, something like a worldwide minimum wage to eliminate labor arbitrage*** faces massive collective action difficulties. And so the path shakes itself once again.

However, in what might be considered a corollary to Stein’s Law****, There Is No Alternative. Until There Is.

Readers? Can you come up with better proposals than Faux’s? Are there even plausible scenarios for better outcomes?

NOTE * As for scaring the electorate, yes indeed one might view the Republicans as the dogs who flush the game so the hunters can shoot it. Clean, earthy sport, what?

NOTE ** The filibuster, in this scenario, would be abolished when a new Senate session convenes, and the Senate passes its rules, which are passed by majority vote. Other scenarios also exist. Importantly, every player in Washington knows this, since it was all games out in the days of the “nuclear option,” when the Republicans were the ones who were going to abolish the filibuster by majority vote.

NOTE *** In Thailand, the minimum wage for a day’s labor is about the same price as a cafe latté in Siam Paragon, Bangkok’s über-hi so shopping mall. Obviously that’s wrong, and the poor shlubs in Thailand should see that just as much as the poor shlubs stateside.

NOTE **** “If something cannot go on forever, it will stop.”

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. Calgacus

    Lambert – if that’s you, not Faux. Well, NO, on the last part.

    But suppose that the Democratic Party — I know this is ridiculous, but bear with me — were electorally responsive. …. Does capital settle down happily to start making goods (and money!) here?

    I don’t think so … third because by this point the 1% are transnational and view nation-states as flags of convenience and great metropolises as pied-à-terres. So they just move everything off shore.

    What an incredibly empty threat! Can they move the most naturally favored, the most arable land in the world offshore? Can the 1% kidnap the people of the United States offshore? They’ve been trying to destroy education for a long time. Are they not sowing dragons teeth? And last, their “power” comes from them and what army?

    You see my kind of loyalty was loyalty to one’s country, not to its institutions or its office-holders. The country is the real thing, the substantial thing, the eternal thing; it is the thing to watch over, and care for, and be loyal to; institutions are extraneous, they are its mere clothing, and clothing can wear out, become ragged, cease to be comfortable, cease to protect the body from winter, disease, and death. To be loyal to rags, to shout for rags, to worship rags, to die for rags—that is a loyalty of unreason, it is pure animal; it belongs to monarchy, was invented by monarchy; let monarchy keep it. I was from Connecticut, whose Constitution declares “that all political power is inherent in the people, and all free governments are founded on their authority and instituted for their benefit; and that they have at all times an undeniable and indefeasible right to alter their form of government in such a manner as they may think expedient.”

    Chapter 13: “Freemen”

    So the 1% can take some mere rags, at the very worst. Whoop-de-doo. The power is where it always was, where it always must be, as Twain knew. You can call “All that’s left” : “coal, fracking, MacMansions, and Major League Football. And hippies and permaculturalists, of course.” But all my money is on them that’s left. Just wake em up! (h/t here to Yves and this site, annihilator of somnolence.)

    Not an “alternative” I’m especially happy with; I think worse is worse, not better. You should be, it is a utopian emigration of the monarchists (corporatists), which is why it won’t happen; they know deep down they are parasites.

    It feels to me like a global problem has to be approached globally. No, no, no. Functional finance, floating currencies, full employment, the JG and not importing products made by foreign slave labor is quite enough. And the contagion would spread like the plague from a USA minus its corporate parasites. All that is necessary is for the people of the US, through its chattel and instrument, the US government, to exercise powers that politicians as recent as Kennedy, Johnson and probably Nixon understood and exercised just fine, let alone an FDR. Obama kisses bankster capitalist 1% ass because that is what he wants to do, not because he has to.

  2. Goin' South

    “The SEIU leadership (say) turns from the craven careerists who helped sell ObamaCare instead of single payer into a modern version of the Wobblies, and organizes One Big Union of tens of millions (competing directly with the political parties, but never mind that).”

    There is already a modern version of the Wobblies. They’re called the Wobblies. The IWW is organizing from Uganda ( to London ( to Portland, OR ( In most places in this country, they’re eschewing the rigged NLRA election game and employing solidarity unionism (

    And you won’t find them spending their time supporting Democrats or any other political party. It is and always has been prohibited by the union’s General Bylaws:

    “To the end of promoting industrial unity and of securing necessary discipline within the organization, the IWW refuses all alliances, direct or indirect, with any political parties or anti-political sects,and disclaims responsibility for any individual opinion or act that may be at variance with the purposes herein expressed.”

    No, the Wobs aren’t the vehicle to acquire the Holy Grail of Single Payer. Right now, they’re focused on empowering people to help themselves win the small battles on the way to winning larger ones. (“Every worker an organizer.”) They recognize that reliance on electoral politics to achieve goals is a shortcut that leads to a dead end.

    They are the wave of the future, not the business unions. Wob branches like mine are overwhelmingly made up not of old farts like me but people in their 20s. They’re committed, innovative and bold. Unlike the business union hierarchy, they’re working in the workplaces they’re trying to organize.

    And they’re not reformers conceding power to the Capitalists as long as the workers get a few more crumbs. From the Preamble to the Constitution:

    “Instead of the conservative motto, ‘A fair day’s wage for a fair day’s work,’ we must inscribe on our banner the revolutionary watchword, ‘Abolition of the wage system.'”

    1. banger

      That is one direction to go in. I would emphasize the essentials–finding ways of organizing life so that we are not dependent on wages by creating our own collectives and corporations. People need to have a living. I remember a lobbyist friend–very sensitive guy, extremely bright who wanted to get out of that slimy business but he had a house, a mate, a life and there was no alternative no place of refuge to decompress, and deprogram himself and he wasn’t the only one–yes, he could have sold the house lived on his savings but what then? It’s hard to take that step when you have no community to go to—no monastery to go to, no one who will nurse you, tell you that we’re all in it together and so on.

      1. Goin' South

        Agreed. For growing numbers of people, this society is failing to provide the basics even to the extent that it did in the past. Self-organization and mutual aid are not only goals; they’re necessities for survival.

        It’s a matter of baby steps, though. This culture has done a lot to suppress our natural inclinations toward organizing for mutual aid. On top of that, it’s done its best to convince us that we’re not competent to do things for ourselves.

        I moved into a tough, inner-city neighborhood about a 1 1/2 ago. We’re rehabbing an old, abandoned house ourselves. I’d like to see a community garden in one of the vacant lots, but my first step in that direction was not to pass out flyers and hope people would show up for a meeting. It also hasn’t been to go to the local development association for help. Instead, I planted a small garden last summer in our tiny back yard and gave away tomatoes and sunflower seeds to all the neighbors around me. This summer, I took another step: digging up the front yard and planting vegetables and flowers in it.

        A couple of days ago, a neighbor came up to me as I was suckering the tomatoes and asked me if I’d help her plant some tomatoes in her yard. I got my spade and happily went over there to help her with three plants. Others have stopped and chatted when they walked by, asking what I’d planted and offering compliments and encouragement. I’m hoping to overcome a couple of impediments to a community garden in this way:

        “We can’t grow anything around here.”


        “People like us can’t grow things. We don’t know how.”

        If we can put a dent in those misconceptions, that makes it easier for people to begin thinking about where they can garden, and how we might work together to accomplish it.

        Of course, some might say that my approach will take so long that I will be nothing but bones in the graveyard before there’s any community garden in my neighborhood, but I’m hoping that momentum can build.

        1. banger

          A great example–baby steps begin the process. This is all a new way to think for people and we need to open up people’s imagination. One thing is essential however. People tend to feel very disempowered and tend to pursue strictly private or escapist interests. My interest is in helping people understand that we live not so much in a “capitalist” system (that’s just an inadequate term) but in a mind-control regime. The best and the brightest are involved in advertising, PR, and “journalism.” They do try to manipulate our conscious minds but they are mainly focused on the unconscious minds. And because Americans tend to not believe there is an unconscious or that any of us have any depth they are easily manipulated, even so-called intellectuals who write without even having a clue as to what is happening on the psychic level.

          1. Goin' South

            And I have read your wisdom over the years, banger, and thank you for it.

            My personal way of keeping the imagination open relies in part on reminiscence of a time in my youth when it seemed my whole generation was determined to imagine what Durruti called the “new world.” This YouTube by the 60s acid rock and anarchist band Jefferson Airplane may seem dated and silly to some, but to me it remains an invitation to envision that new world along with a call to act on that vision. Dreams combined with action can equal change. In a society so bereft of visions and dreams, it is all that can sustain a future.


        2. Jim

          Going South, in my opinion you have just presented a concrete and persuasive example of the type of real organizing that we now need on a massive scale.

          First, you acted, you actually moved to a neighborhood of your choice. Second, you acted again and planted your own small garden. Third you acted again this summer in planting more vegetables and flowers in your front yard distributed some of your produce and now you have some neighbors thinking about doing the same thing.

          You have breathed real life into your commitment to self-organization and mutual aid as not only goals but as necessities of survival.

          Your are breaking with the received tradition of protest which considers mere exhortation as the spark.

          Through you actions you are offering your neighbors an opportunity to participate in a new experience–this is organizing beyond mere self-reflection–I see it as serious and potentially extremely powerful–congratulations.

          1. Goin' South

            Being powerless has some advantages. Among them is the joy at small accomplishments. You can hardly imagine how excited I was when my neighbor, who lives a very difficult life, asked me to help her with those tomatoes.

          2. Goin' South

            That process you laud has a name–“accompaniment”–given to it by Archbishop Romero of Nicaragua and picked up by Staughton and Alice Lynd. See Lynd’s Wobblies and Zapatistas for a thorough discussion of it.

            The idea is that anyone prone to activism can’t live outside a community, but must reside in it and stay there on a long term basis.

        3. Crazy Horse

          Speaking of gardening, Goin’ South–
          I grew up in a rural are 40 miles from the nearest city. City folks liked to drive out and imbibe of nature by having a picnic as of a Sunday. Now one such family of city slickers chose our front 40 for their picnic, leaving behind all manner of soda bottles, beer bottles, half eaten hamburgers and plastic lawn ornaments. My dad, being a gregarious type, drove the tractor out and chatted with them for a while. Having obtained their address in the suburbs of the city, the next time we went to the city for shopping we loaded the dump truck up with our month’s supply of garbage along with a few yards of manure from the dairy barn and delivered it to their front doorstep.

          Now I’m all in favor of more gardening by everybody. Since the front yards on the estates of people like Jamie Dimon tend to be rather large, they will each need deliveries from the stockyards from several trucks. And since there are only about 300 of these bastards that run the entire country, it will take some organizing to have the trucks all arrive at once led by armored bulldozers to break down the front gates. There you have it— more gardening and an opportunity for organizing all rolled into one.

          I know it isn’t the permanent cell in Guantanamo that the Overlords deserve, but such a collective action certainly might encourage them to emigrate to a stateless tax free offshore iceberg floating off the coast of Antarctica sooner rather than later.

          1. Goin' South

            I do wish you’d deliver some manure to me. I sit on top of about 8 inches of sandy topsoil underlain by the gods know how many inches of nearly pure sand. Great drainage, but more organic material please.

            I do doubt, however, that Jamie or my classmates Lloyd and Ben would appreciate such an unannounced delivery.

          2. Lambert Strether Post author

            Similar to Charles Sereno’s idea of simultaneous toilet-flushing — which could perhaps be executed simultaneously.

            “Operation Steaming Load,” we might call it.

          3. KeninSD

            While that’s a nice image to ponder, what makes you think that Jamie and company have only one mansion? Are your oligarchic overlords so impoverished that so few loads of manure can bring them to move from one, of many mansions?

    2. Eclair

      Yes, Goin’ South! Imagine my joy when I met real IWW members in Denver. I felt like an anthropologist upon discovering a tribe that everyone thought had been exterminated decades ago. Plus, there are anarchist collectives here.

      1. Jim

        Going South,

        The awareness and joy in small accomplishments is the foundation of autonomous conduct and eventually an autonomous political movement.

    3. Lambert Strether Post author

      Of course I know the Wobblies exist. But for the two-party system to produce the results Faux outlines, the SEIU would have to become the Wobblies. As the post says.

      1. Goin' South

        You’re missing the point, Lambert. Wobs didn’t and don’t do electoral politics. If you wanted a union to get involved in the Single Payer fight, it wouldn’t be the IWW.

        1. RanDomino

          On the other hand, the threat that a group or movement like the IWW could grow is a powerful motivation to the political establishment. That is, the politicians won’t give us what we need just because they’re benevolent or because we ask, but because we make it clear that if they don’t then there will be a revolution.

          1. Goin' South

            True enough. That’s really the story of the CIO in the 30s.

            But the Wobs don’t ask. We take what is ours. That’s direct action.

            Cops in Everett, WA: Who is your leader?

            Wobs: We are all leaders!

    4. sgt_doom

      As anyone in America with a minimum complement of neurons should know, there are ONLY two authentic unions left today: the Longshore Union and the nurses’ union (National Nurses United and affiliated unions). The others sold out long, long ago!

      GOP-lite is a profoundly misleading and really disingenuous description: authentic dems and progessives have been fighting against the likes of pure neocons (and Obama & Hillary Clinton appointees) such as Diana Farrell, Larry Summers, Timothy Geithner, Neal Wolin, Gene Sperling, Marc Grossman, Robert Mueller III, Robert Gates, James Comey, Peter Orszag, Larry Furhman, etc., etc., etc.

      Nothing light or lite about those neocon swine, just as there is nothing to distinguish the 100% neocon administration of Obama, from Bush #2, Clinton, Bush #1, and Reagan.

        1. Goin' South

          Also an old “red” union, the UE, the union of the workers at Republic Windows.

      1. Goin' South

        Lambert’s response is a good one.

        But in the spirit of your comment, IWW means FU to people like you.

  3. Paul

    “So they just move everything off shore”

    They can move their labor offshore but they can’t move their customers…and the two groups are for the most part the same people.

    Then consider that the U.S. is the consumer of last resort for the rest if the world…

    I doubt this would be as easy as you think.

    1. Lambert Strether Post author

      Well, it’s a vivid picture not a policy proposal. I’m thinking back to when I used to live in California, and you’d be driving through the desert and you’d see an abandoned mall, with weeds growing in the parking lot and the windows board up. Then, in just a few miles, you’d see a new mall, with all the big box stores helicoptered in and dropped on a slab and hooked up to water and power and a parking lot laid down over the soil.

      So I don’t see any reason why the elite wouldn’t treat the entire continental US like an abandoned mall. “There’s no percentage in it.”

      That might not be such a bad thing from the standpoint of an edible forest proponent, for example, except you just know they’d scorch as much earth as they could on their way out, for spite and to maintain TINA (Say, maybe that’s what fracking’s all about…)

    2. sgt_doom

      They can move their labor offshore but they can’t move their customers..

      No offense, Paul, but you’ve been listening to those professional liars, or clueless wonders (like that pathetic idiot Robert Reich, who never met a large data set in his life he could comprehend!) who still prattle on and on about some mythical “consumer-based economy” — when the exact opposite is the case.

      By 1999, that so-called consumer-based economy was history — America became a net importer of tech services, not an exporter!

      With the upper 15% doing the vast amount of consumption of that 70% consumption figure they always bandy about (integrate that figure with the GDP majority portion the top five banks make up, and the obvious becomes even more so), they have transformed that once existing consumer-based economy into their fantasy finance-based economy, where they reap all the benefits and profits, and the majority are rendered to serfdom.

      Mr. Strether’s comment to you is exactly on target!

    3. Me

      I have long been a strong supporter of taking over the factories. Yes, the parasites can go offshore with their stolen money but the workers can take over the damn factories and run them without the bosses (although I admit skills will have to be learned and financial capital will have to come from somewhere, or at least a solid plan as to how to run the factory and pay the former bosses for the taken over factory). If public money is used for anything it shouldn’t go to parasitic banks, public money should go to worker owned and run enterprises, although I know it won’t any time soon. Having said that, the issue is the private ownership of the means of production by a class that doesn’t create the vast majority of surplus. Bill Gates didn’t create tens of billions of dollars with his own hands. Those that worked at Microsoft did. He was a good businessman and had a good vision but he got as rich as he is because of the thousands of people who worked at Microsoft. He was able to monopolize the majority of the surplus they created and, because we have designed horrible institutions like corporations that allow the money to be monopolized by those at the top of the power pyramid, he was able to grow insanely rich off of the work of others. Is that not the fundamental issue, who owns the means of production? Who gets the surplus created by efficient economic institutions? The fact that one group owns the means of production while those that create the vast majority of the suplus don’t and have to rent themselves out to clothe, house and feed themselves is the fundamental issue. Where would the billionaires get their wealth if institutions were structured that way and private (parasitic) finance was replaced by public finance, where it can be run like a utility?

      I know this is light years away from where we are now but there is no way to turn this ship around without radical breaks from the past economically. If you confine yourself to the status quo there is no hope. The range of options available are all sure losers.

      None of us are even talking about ecology and the environment. If you include those factors then the current system is even less likely to survive much longer. The market economy is not structured to deal with those problems and there are endless problems as far as trying to solve the environmental and ecological issues we are dealing with through the market mechanism. We are living in very interesting times. It doesn’t have to be a bad thing, provided we are ok with dispensing with outdated ideas and economic systems.

  4. Jim Haygood

    ‘Unions were the engine, really, the long-term engine of economic growth in the 20th century in this country.’

    Just as Willie Sutton was the long-term engine of growth in the banking industry … no, really!

    The causes of economic growth remain mysterious, but they are likely to include education (human capital), technology (know how), capital markets, and enforcement of contracts.

    All of the players — managers, employees, consumers — naturally look after their own interests. But for any of these groups to claim they were the engine of growth would be megalomaniacal.

    1. Goin' South

      I’d put it somewhat differently than Lambert.

      Successful business unions temporized some of the more pernicious effects of Capitalism for as long as it took for Capitalists to understand how to manipulate the politicians and judges to weaken them. Entities from the AFL to, sadly, the CIO made it even easier by being seduced into the electoral politics shortcut. Walter Reuther was one of those seduced by the Kennedys and Johnson, but he saw his error shortly before he boarded a small, doomed aircraft.

      The business unions didn’t cure the problem. They merely treated its effects. And the disease mutated and has all but eliminated the effectiveness of the unions to accomplish even relief from the symptoms.

          1. Lambert Strether Post author

            Actually, no. Real Veblen readers can come up with better sourcing I am sure, but:

            Veblen made a distinction between the owners of ‘business’ (profit maximization through market manipulation, restriction of production and other similar practices) and ‘engineers’ or other managers in ‘industry’ (concerned with efficiency per se and with production for the satisfaction of human needs).

            Thinking to the role the SEIU played in running interference for ObamaCare, “business” (Veblen sense) seems to be exactly what “business unionism” (Wikipedia sense) devolved into.

          2. Goin' South

            It’s clear, Lambert, that if I say “x,” you’ll insist on “y.”

            But I brought up the term “business unions,” and it was in the sense well explained in the Wikipedia article:

            1) reformist, not revolutionary; and

            2) bureaucratic with “managers” who don’t work in the industries they represent and make far more than the workers they represent.

            Veblen has nothing to do with that terminology. He was completely unaware of the distinction as far as I know.

            It’s a disparaging term that distinguishes revolutionary, solidarity unionism unions like the IWW and CNT from Gompers-style trade unions that promise to deliver somewhat higher wages and benefits for workers but happily turn over “management” to the bosses they play golf with.

            1. Lambert Strether Post author

              “Maybe?” was an invitation to engage. I see it as enriching. Your mileage may vary, and apparently does. Adding that of course what you say is not true. Were it to be true as written, I would have to (a) respond to literally everything you write, and (b) never agree with any of it. Neither is true.

          3. Goin' South

            Your confusion results from mixing management and labor side. Veblen is analyzing the management class.

            And as Wobs (and my favorite t-shirt) say:

            “The working class and the employing class have nothing in common.”

            1. Lambert Strether Post author

              Adding, “nothing in common”? You mean either management is not a class of humans, or labor is not? Granted, it’s awfully hard to fit nuance onto a t-shirt.

          4. Goin' South

            This is truly getting absurd.

            I brought up the term “business union” and you made a guess as to its meaning. I provided what I meant, and you bizarrely rejected it. You might have responded, “Oh, that’s what you meant.” Instead, you wanted to argue about what I meant and insist it had some relation to Veblen. It doesn’t. Never did.

            And all this after I took such great care to provide a concrete example. ;)

            Lambert, I like you and share many of your views. I appreciate your contribution to this blog. Your links during the election season were extraordinary. For some reason, you jumped all over my ass on that health care thread because I criticized Single Payer and suggested a local alternative. I cooled my heels on this blog for a while out of respect for you and Yves, but over time, I’m inclined to state my views and not be intimidated by the usual blog tactics that have been practiced on the likes of DK and Eschaton from way back when.

            You could acknowledge when you’ve learned something new. On that health care thread, you were wrong about the REA being locally run. On this thread, you wrote the original post as if the Wobs were dead, and even worse, that they would be interested in some sort of conventional, electoral, political action. Finally, you didn’t know what “business unionism” was as opposed to “solidarity unionism.” You made a guess and were wrong.

            Then you resort to tactics worthy of the Obamabots on DK.

            It’s beneath you.

          5. Goin' South

            Re: your comment–

            “Adding, “nothing in common”? You mean either management is not a class of humans, or labor is not? Granted, it’s awfully hard to fit nuance onto a t-shirt.”

            We can all play “Propaganda.” Reductio ad absurdum is fun. See how you’ve evolved from someone who dreams of the “revival” of the IWW to one who shits on one of their oldest maxims? The IWW means what it says. You cannot be a boss and a member of the IWW. Sure, we are all human, but until the distinction between boss and worker is abolished, our interests are not the same.

          6. Goin' South

            Re: your reply–

            “Oh, OK. Thanks for the reference to Wikipedia, though. I never would have thought to look there.”

            Sadly, when it comes to the topic of business unionism vs. solidarity unionism, that is a good place for you to start. I was just trying to be helpful.

            I can recommend deeper readings when you’ve mastered the prereqs.

            1. Lambert Strether Post author

              Speaking of delivering manure, what a humongous thread to spin out from a simple play on words!

              Adding… What an odd comment.

              1. Wikipedia isn’t necessarily simpler or more complex than other sources, so I don’t see how its a matter of being ready, or not ready. The difference is that Wikipedia isn’t necessarily authoritative. Surely you can supply authoritative sources that can explain these ideas even to the meanest intelligence?

              2. Needless to say, good sources (as opposed to hasty links from Wikipedia) would educate the commentariat here at NC, which is a good thing. So why not do that, since (presumably) you’re a subject matter expert in the field?

              If you’re here to educate on unionism, co-ops, and so forth, then why not do that, given the chance?

          7. Goin' South

            As one of my favorite Muslims sings:

            “Maybe you’re right,
            Or maybe you’re wrong.
            I ain’t gonna argue with you no more.
            I’ve done it far too long.”

          8. Lambert Strether Post author

            @Goin’ South. Good. We’ve had discussions on sourcing before; I’m sure that NC readers will be waiting for mutual aid in the form of better (authoritative) sourcing on this topic as well.

      1. sgt_doom

        Please don’t lump in the Kennedys with the dreadful Johnson, who fundamentally flipped everything they tried to do in the shortened JFK administration (read Donald Gibson’s Battling Wall Street: The Kennedy Presidency, as well as Gerard Colby’s Thy Will Be Done for the birds-eye view on the non-revisionistic reality).

        1. Goin' South

          My point wasn’t that the Kennedys and LBJ were equivalent, but in Reuther’s case, it was first then Kennedys then Johnson who wooed him into the Democratic Party with promises that the CIO’s goals could be achieved legislatively with a D majority and WH. (See Nelson Lichtenstein’s Most Dangerous Man) Reuther knew how hard it was to make gains the old fashioned way–through organizing. He had the scars to prove it. And he was tempted by the electoral fool’s gold until the Vietnam War disabused him of the efficacy of the shortcut.

          1. banger

            Just to add to the Kennedy issue–at that time the electoral strategy was not irrational. Kennedy intended to seriously attack the corporate establishment as it was then and the national security state at the same time. He had to do so in a measured way to not alarm the American people. He managed to find an ally in Nikita Khrushchev who was willing to take a chance on standing up to his own military oligarchs. I think that was Kennedy’s first goal because he could, like Eisenhower see the writing on the wall–the alliance between the national security state, organized crime, and major corporations/Wall Street would, eventually strangling democracy.

            I urge anyone to read Jim Douglas’ book JFK and the Unspeakable who throws a lot of light on what Kennedy was up to. The letters exchanged between him and Khrushchev are a stunning read. Kennedy would have destroyed everything the Cold Warriors had built had he remained in office.

      2. sgt_doom

        The important aspect of the unions when they were at their strongest was that they brought the American economy closer to a real economic democracy, as opposed to the Corporate Fascist State which exists today!

      3. charles sereno

        “It’s beneath you.” (Goin’ South)
        As one old codger to another, that’s never a useful comment either to a superior or an equal. To a superior because it’s obsequious; to an equal because it’s unproductive.

    2. from Mexico

      And capitalists, and especially those of the finance variety, don’t claim that capital is the engine of growth?

      The reason that unions were the long-term engine of growth is that they ameliorated the effects of the capitalist dogma, which was and still is the dominant, or as John Gray puts it, “reigning mythology.”

    3. banger

      When we talk of “economic growth” what are we saying? I’m not sure I think economic growth is a good. It is, at best, a means to something. We have to become aware that economics is a service or a tool to attain something–the good society etc. But if we don’t know what a good society is then we have what we have now–a society dependent on “growth” in a direction no one is charting and maybe that’s good. But, at some point, we need to define what is good–currently, by default the “good” is to acquire more money, more power, more status and that is it. I see no other values here. The argument seems to be who gets what share. Well, in amoral universe the powerful will eventually own everything and everybody.

      1. REDPILLED

        Continued economic “growth” means continued exploitation of natural resources and, therefore, continued global warming and accelerated catastrophic climate change. Clearly, our current system is both suicidal AND omnicidal. It dooms the future of our next generations. If TINA is all we have, the game is over. The “American Dream” is like cancer: out-of-control growth and expansion, of Empire and consumerism. Eventually, the planet and nature will win, and we will all lose, unless a different, sustainable system is tried.

        1. banger

          Well that’s where we are headed–but growth can also mean, moving towards non-carbon energy, elegant engineering (conserving energy through design) and fundamentally retooling ourselves from a long-dead industrial system to the world that awaits us if we just chose to use the technology we have now to better our lot rather than have it used on us to control us and make us, eventually, slaves.

      2. Lambert Strether Post author

        I’ve heard it said somewhere here that collapsing the US economy was the elite’s answer to climate change (at least temporarily). Carbon usage went down, people put off medical care, which ultimately will decrease life expectancy, etc.

      3. jake chase

        Talk about economic growth is beside the point. Think about how much economic activity is totally destructive to human welfare and happiness. Economic growth is more hamburgers, more pollution, more brainless entertainment, more prostitution, more needless surgery, more dangerous drugs, more snooping and spying, more machine pistols, etc., etc. The more of this crap we produce the more people get to have jobs, drive ridiculous cars and trucks, smoke cigarettes, binge on alcohol, murder one another for fun and profit. WTF has happened to America? I just now happen to be reading The Rise of Silas Lapham, which seems to describe America circa 1870. People and things were transported by horses. Ordinary people somehow understood right from wrong without university education or media morality police or even a board of education. No labor unions either, but work still had dignity.

        Perhaps getting back to horses wouldn’t be a bad thing?

  5. TK421

    “Growth of Income Inequality Is Worse Under Obama than Bush”

    “under Bush, the 1% captured a disproportionate share of the income gains from the Bush boom of 2002-2007. They got 65 cents of every dollar created in that boom, up 20 cents from when Clinton was President. Under Obama, the 1% got 93 cents of every dollar created in that boom. That’s not only more than under Bush, up 28 cents. In the transition from Bush to Obama, inequality got worse, faster, than under the transition from Clinton to Bush. Obama accelerated the growth of inequality.”

    “GOP-lite”–yeah, right.

    1. banger

      That is all true–but even worse under Obama crime does pay and if you are of a certain class you can commit what we used to call economic crimes with impunity. Bush shredded the Constitutions–Obama burned it. Both have moved us away from the rule of law–now justice depends on who you know and how much lawyering you can buy–it was always true to some extent but today it is mainly true.

  6. diptherio

    Maybe this is the time for grassroots insurgencies in both major parties. Idk much about how the parties’ governance structures work, having been a lifelong independent, but might it be possible to “capture” enough local chapters to make a difference in party platforms? What would happen if all the Occupiers just became democrats (or republicans) with the idea of making a play for control of the party?

    It seems like we’re stuck, for the foreseeable future, with our two-party system. It might as well be in the Constitution, at this point. That being the case, maybe we should focus on making local Dem/Repub chapters the battleground, and eventually the DNC/RNC.

    1. banger

      I think what you propose just won’t work. Many people have done just that but in the end whoever goes up the chain on whatever level must contend with real power. I think it’s a mistake to depend on electoral politics as such. More important is acquiring power. Unions had power to the degree they could punish enemies and help friends. The left has, it seems to me, given up on politics–the shadow-play that we call politics is not politics it is show-biz. Real politics is about being able to mobilize enough people to shut down a company or a city. Or to be able to bring a bank or a corporation to its knees through targeted and well-planned boycotts and you might also throw a few more aggressive tactics as well that the left is too scared, in this country, to use.

      And that’s the point–cowards get nowhere in politics other than being punked. Part of the reason people are scared though is that they have no sense of community. If the left organized as a community say lived in the same neighborhoods, had their own businesses, discriminated against corporations bought only from cooperatives and collectives so that the movement was based on reality not this constant pleading to the rulers who just laugh at the left because they know what the power game is all about.

      But, as I wrote below, you have to choose between being entertained and being real.

      1. Goin' South

        Second everything you write in this comment.

        And people need to see the beneficial effects of solidarity and mutual aid in action while avoiding entanglement with bureaucracies of any kind, including non-profits.

        That can only take place in neighborhoods and local workplaces.

        It’s not like we’re rejecting the offer of real help from the governments or Establishment non-profits. At best, the Sane Rich and their servants show a little interest in keeping us alive for the time being. If we want more, we must do for ourselves, starting in our own neighborhoods and workplaces.

  7. banger

    Faux is the real deal–his analysis is clear and accurate. Most telling is his claim that it is pretty useless to pin your hopes on the Democratic Party and the reasons he gave were obvious. Gore Vidal said, sometime in the seventies when he was the best essayist writing in English (IMHO):

    “There is only one party in the United States, the Property Party … and it has two right wings: Republican and Democrat. Republicans are a bit stupider, more rigid, more doctrinaire in their laissez-faire capitalism than the Democrats, who are cuter, prettier, a bit more corrupt — until recently … and more willing than the Republicans to make small adjustments when the poor, the black, the anti-imperialists get out of hand. But, essentially, there is no difference between the two parties.”

    It is also true today–the main difference is that there is more of a show-biz/pro-wrestling air to the whole thing and that there are very few people in either party really interested in the welfare of the American people than was the case in the 1970s when both parties had some people who had a concern for the country and not just the Empire we have become.

    That said, Faux or anyone else on the left really are very good at analyzing the situation today–politically the situation is utterly sewed up and hopeless. Change, reform are pretty much out of the question. No reasonable plan about anything can even theoretically go forward. The left, in my view, needs to join the right in dismantling the system as much as possible. The federal gov’t was once a force for balancing the needs of the people against the needs of the oligarchs and it’s record in this century wasn’t half-bad but the balance of power has shifted and only drastic action will change it back.

    One of the reasons I love reading the Roman historian Livy is the comedic aspect of the struggle between the proles and the patricians–these people would go through the most extreme kinds of action even to the degree of refusing to defend Rome when it was being overrun by enemies–the patricians had to give in. Eventually, the oligarchs won out of course during the Roman civil wars full of secret plots, false-flag events, misinformation, treason, and culminating in the assassination of Julius Caesar, who had many similarities to Kennedy, and the ultimate accession of the Imperial system.

    Unlike the Romans, we have a chance to build something we have access to tools, incredible technology and social media that can reach around the world but we have, sadly, very weak characters corrupted by amusing ourselves to death and Neil Postman famously wrote about. Think about it–if the average American chooses entertainment over freedom what do you suppose is the only likely result? Precisely what we have now.

    1. Massinissa

      Julius Caesar similar to Kennedy?

      Please explain: I dont see any kind of relation other than an assassination. Its not as if Kennedy was going to crown himself Imperator.

      1. banger

        Julius was on the side of the reformers–the big conflict back then was between debtors and creditors–how honestly Julius was about all this I don’t know but that’s the story that has been told. Michael Parenti wrote an interesting book about it. In short, Julius was taking on the powers that be in Rome and lost just as Kennedy did–both men were, as all of us are, flawed.

        1. sgt_doom

          Between Michael Parenti’s outstanding book you mentioned (long one of the top thinkers in America) and Prof. Joseph Tainter’s wonderful and pithy article explaining some economic fine points in the demise of the Roman Empire:

          The picture becomes much clearer…..

  8. taunger

    Two points: first, agree with Calgacus and Paul that the elite leaving would not be a big deal; but as you and I have seen, much more violent repression would have to fail before that happens. Not likely . . .

    Secondly, Faux talks about stimulus, and Lambert about Unions, but I don’t see why the emphasis isn’t on reintroducing confiscatory tax rates on upper brakets. This seems like a straight forward populist policy: Is you boss’s work really worth 400X what you do? Don’t let him walk away with that money – use it to educate your children and to support the leisure time you remember before working.

    1. sgt_doom

      ..but I don’t see why the emphasis isn’t on reintroducing confiscatory tax rates on upper brakets.

      I quite agree with you, but please recall: on May 9th, the IRS announced on their web site they were undertaking the largest tax investigation in history, jointly with the UK and Australia, into offshore tax havens (a k a offshore finance centers), and within a week or so, the IRS chief had been fired.

      Any further thoughts?

  9. Ep3

    Yves, steins law does not apply to people and wealth. Because humans have had these problems since we settled down 10k years ago. As I said with your leverage vs. debt post, this is about kings and peasants. And we are still stuck in the time of the pharaohs. I just don’t see that going away anytime soon (3k years). Look at sports. We worship and pay players better than doctors. We think of these players as superhuman gods. If a football player with a charity (which most set up as tax fronts and they set them up for future employment, plus employment for friends and family), was stood next to some doctor working on the ground in inner city hospitals, people would pick the football player for being more charitable and a ‘better human being’. For whatever reason sacrificing money over time is considered more valuable.

  10. Brooklin Bridge

    The notion of GOP-lite is misleading. Democrats and Republicans are on exactly the same team and have been for some time. Different roles yes, different people, no. Indeed, Democrats are just as worried for Republicans as Republicans are since neither can continue the charade without the other.

    But they are also correct. For the time being they are both safe. It’s clear that the general population is utterly fooled, wants desperately to continue being fooled and is ready to get nasty with anyone who might pull the wool OFF their eyes.

    1. Massinissa

      Yeah, calling them ‘GoP Lite’ plays into the Lesser-Evilism mentality, which I abhor.

      And besides, look at Obama: Obama is not Bush Lite, Bush was Obama Lite.

      1. Doubt Wisdom

        Did you read how they shot some extra scenes for the Iron Man 3 movie with Chinese heroes, then included those only in the version shown in China?
        “The Democrats” are “The Republicans” with the extra scenes with black and women and gay extras thrown in. And some pretend caring about the damage done instead of exultation. Same damage though

        1. sgt_doom

          Wow! Perfectly phrased, and most cogently described!!!

          A truly BRAVO!!! comment, Good Citizen!

          Interesting to know that the Starr Foundation, the Gates Foundation and the Rockefeller Foundation have donated grants in the hundreds of millions (perhaps much more, for all I know) to China.

  11. hear hear

    the sort of Democrat who can go up in a small plane without worrying

    see, this is why we should be able to embed Gary Busey clapping animated gifs in comments

    1. Doug Terpstra

      Another favorite “… second, because [capital would] miss making people suffer, which they enjoy …” There is indeed a strain of sadism in capitalism.

  12. Aunty Jane

    Sheesh, we didn’t even talk about civil liberties and the next war or two as concerning “economic vision”.

  13. Rob Urie

    The conclusion, hippies and fracking, has the dependence backwards. Were Wall Street to move to London, good luck with that bailout thingy keeping it alive. The U.S. has functional state and community banks. Boeing lives from cost-plus government contracts from the U.S. that would end. Fracking is as destructive as it is because it is financialized– the extraction methods used are to repay debt quickly, not produce sustainable energy. Simple casing would remove many of the most destructive effects. What would remain are the land, people and infrastructure and the possibility for self-determination outside the predatory and extractive capitalist system. No more wars for oil. No more Monsanto forcing franfenfood on us. Another world is possible once we got past the fear of change.

  14. Dan Lynch

    Re: what if there were real political change and the 1% move offshore


    The key is to protect trade the way our founding fathers intended.

    If trade is protected and if Apple moves offshore, there will be an opportunity for some new American company to step up to the plate and serve that market in America.

    If trade is protected and if Microsoft moves offshore, there will be an opportunity for some new American company to serve that market in America (or maybe government sponsored open source software ?).

    If trade is protected and if the banks move to London, there will be an opportunity for public banks and credit unions and co-ops to fill that void.

    IMHO protecting trade and revitalizing American manufacturing is key. Even though robots do most of the manufacturing these days, manufacturing is still important because 1) manufacturing jobs “set the bar” for compensation across the entire economy and 2) manufacturing PRODUCES STUFF, and that’s the true wealth of any nation and 3) if manufacturing is protected from foreign competition then workers can organize and strike.

    American workers will not regain bargaining power so long as they have to compete with foreign countries or compete with a flood of immigrants. No racism intended, just the facts as I see them.

    1. banger

      Yes, but if workers are replaced by robots what then? We have to move on towards a world of sharing and trusting so that those that get left out don’t perish. We just don’t need productivity or industry as much as we need connection. I’ve seen people who have almost nothing thrive because they are connected to other people–that’s what human beings are meant to be.

    2. Stuffy

      Let ’em all in then. Lot’s of folks will take joy in wiping Iphone screens if it means a decent wage, modest dwelling, health care, a say in the direction of the company, democracy, freedom, all those other abused code words. What were seeing now with “immigration” is lawmakers sucking up to the ruling class, with a splash of appreciation for the latinos from both political brothels.

  15. steve from virginia

    There is the Democrat Automobile Party and the Republican Automobile Party. Congress and statehouses are simply gatherings of used car salesmen. Any person who has bought a car knows exactly the sorts of people they are dealing with.

    The foundation of growth is unsecured credit and nothing else; in fact, that precisely is what GDP growth represents: a tally of expansion of unsecured loans.

    Meanwhile, the world’s capital is annihilated by way of the lending process taken to its logical conclusion. Enough capital has been destroyed — put into gas tanks and burned up for nothing — to effect the price of what remains. Capital has become too costly for our waste-based economy to pay for. The hat has run out of rabbits, what remains are the monsters.

    Go ahead Naked Capitalists, stick your hands into the hat and see what demons you can pull out of it.

    1. Massinissa

      Sort of expecting to see Hitlers, Franco’s and Mussolinis in this hat, but then again, it wouldnt surprise me much if something worse is buried in the bottom somewhere.

  16. Dameocrat

    It is impossible to deal with the problem
    internationally. We don’t have international
    government and won’t in the near future. The
    best that can be done is reverse the incentives
    so labor arbitrage no longer pays. I agree with
    Robert Reich’s recent observation that Companies
    that outsource labor and send their money to tax
    havens should have the access to our markets,
    stongly curtailed. That would create a workers market, and the Bangledesh mentality would slowly disappear.

    I think Liz Warren has been one of the few good
    surprises among politicians in the last 20
    years. It is clear that if the left wants a
    politician that acts along FDR lines, we have to personally
    recruit them! Let’s recruit more Liz Warrens.

    As for any fanciful notion that we will be helped

    1. banger

      No we do have an international government it’s just not official. It is a sort of emergent system of the network variety–a series of laws and agreements–most of them made in back rooms among the powerful actors of the world, even what is called organized crime.

      Yes, Warren is a unique figure. She understands the situation–but what she proposes to do about it I don’t know. She’s had some great proposals–but they will go nowhere.

      1. Dameocrat

        Liz Warren was personally recruited by the left as an
        answer to Martha Coakley, who was a compromized
        neoliberal democrat. Coakley was owned by the
        health insurance companies. We find more people
        like Liz and her proposals will start going

        1. John

          Elizebeth Warren’s student loan bill puts the Ds and the Rs in a bind.

          If more students know about it and understood it and then demanded it the Ds and the Rs would have to pass it or the students would say they are against them. Especially because both the Ds’ and the Rs’ bills are so much worse for the students.

          Spread the word about it.

          The best way right now we have to get anything passed that helps the people is expose the evil intent on both sides of the aisle.

          1. Yves Smith

            No it most assuredly does NOT.

            1. Warren is perpetuating a bad system of debt financed higher education. Loans were becoming unaffordable (law school admissions down by over 15% and college applications starting to fall) and hitting the point where the schools were starting to address the cost equation (reports are they haven’t dropped their “rack” rate but were cutting far more deals, as in effectively offering discounts, to a ton more students).

            Lowering interest rates allows the schools to carry on as before and students to take out even BIGGER loans and be saddled with MORE debt by the time they were done.

            2. Warren’s fix applies only to private loans. That’s about 15% of the market and too often funds students who go to for-profit colleges, which are the worst ripoff.

            3. She’s gotten all sorts of private ridicule because her proposal is a foot-in-mouth-and-chew from a finance standpoint. The borrowing rate she mentioned was the OVERNIGHT rate. Education is not an overnight loan. She should have referenced a rate that fit the maturity of the loans, which is 5-10 years. The Treasury bond rate for 10 years is now 2.11%. Any borrowing rate below that is a subsidy to BORROWING and will perpetuate a bubble the same way QE is creating a new housing bubble by funding speculators.

            4. On top of that, the rate at which the banks BORROW is not the rate at which they lend. Ever. They have costs (underwriting and paying for the documentation and administration of the loans) so they have to mark up the interest rate at which they borrow to cover that.

            5. Her fix is only for one year. Even if it worked, it’s a gimmick.

            Now there was an emerging problem, that student loan interest rates are due to go up, so addressing that would have been worthwhile. But her bill is lame.

        2. Brooklin Bridge

          Elizabeth Warren campaigned significantly on getting to the bottom of the mortgage scandal and to why no help was getting to the homeowners. So now that seems to have magically been forgotten and all are focused on the student loan crisis. “Remains to be seen” is perhaps being somewhat optimistic.

          I’m hoping Yves is correct when she says Warren [and others] is/are slowly moving the Overton Window to the left. But I remain skeptical that any significant legislation really helping students or homeowners is going to materialize any time soon, never mind get signed by the Obamination.

          As the immutable sign on the bar says, “Free beer tomorrow”.* Bars are profit driven and neither Obama, nor any of the politicians in DC are compassion driven or even constituent’s interest driven. Indeed, given the climate, they would be downright ashamed to admit it if they were.

          *Taken, of all places from an utterly insipid guest on the utterly insipid Gwen Ifel program or re-run on PBS last night at the channel surfing hour.

      2. Lambert Strether Post author

        Warren may “understand,” but that’s not enough. From a portion of the interview I didn’t include:

        [FAUX:]So we have a Republican Party that just completely refuses to recognize how the economy works. We’ve got a Democratic Party that seems to recognize how the economy works, but really in the end doesn’t want to do anything about it.

        It’s not enough to ask good questions…

        1. banger

          What she understands is the condition of the middle-class and, contrary to conventional wisdom, the dramatic fall in the standard of living of most people. She’s researched and written about that problem because she’s an expert on bankruptcy. But she is not a radical–she’s a moderate old style liberal who believes the government is reformable. I don’t think it is–but she does understand the situation of most people better than most of the pols.

    2. sgt_doom

      Sorry, but you are waaay off (as the comment by Banger so excellently notes), and Robert Reich, who helped to promote what he is now criticizing (Haven’t you ever read that pathetic drivel of his, The Work of Nations? Nor read his completely cluessless remarks during the “jobless reocveries” of the Clinton Administration when Reich was his clueless secretary of commerce?) — the WTO Financial Services Agreement is indeed international gov’t — you might give that a read also sometime.

      1. Dameocrat

        Yeah he was a promoter of this globalization
        mess in the past. Hopefully he has now seen
        the light.

        Discontent is not a constructive
        proposal. Anyone who would promote the bitcoin
        frankly does not get the the problem is
        gangsterism among modern capitalists!

  17. Dameocrat

    helped by the right? That is like jumping from
    the frying pan to the fire. The right wants the
    opposite of what we want. The idea that we want
    the same thing is called neoliberalism. You
    can’t claim Obama and the DLC are compromized
    because their alliance with the right, when you
    propose something identical. You can’t seriously
    claim lesser evil voting is bad then promote Ron
    Paul as lesser evil!

  18. charles sereno

    A modest proposal:
    For more years than I care to remember, I’ve used the following example: What if we all flushed our toilets at a designated time to get attention where it counts? (Disclosure: I’m an anarcho-pacifist who doesn’t step on ants on the sidewalk, but not in the house.) Such an action is only meant to be illustrative. Really practical ideas easily gleaned, eg, from NC readers, that are not seriously harmful to other people, I think, might possibly be more effective than street demonstrations or voting for 3rd parties. This way every flush, sorry, vote would count inasmuch as it would be an untraceable (even to the DIA), disruptive threat should a designated demand not be met. Hope this is not too dumb.

    1. Lambert Strether Post author

      What a great metaphor and tactic and idea. “Flush ’em out.” I like the way it leverages a single infrastructural network — the same would work for flicking lights or turning off the teebee or cellular. It’s a form of virtual occupation. Non-violent, too.

      * * *

      I don’t want to denigrate the idea, so I’ll add be divider above ^^

      And so unifying! There could be the Straight Flush, the Gay Flush…

      1. sgt_doom

        And on the educational side, it might be important for the typical American to have some understanding of who the actual enemy is. Too often they are clueless as to who the owners are, believing those disinformational stories that they, the public through their 401(k)s and pension funds and the shareholders, are the owners, when in actuality there have always been shareholders and investors, but those pesky owners (once called robber barons and now referred to as “philanthropists”) seemed to have somehow disappeared from the Big Scene!

      2. Paul Tioxon

        This is what is now known as a Denial Of Service attack on the internet. Back in the good ole days, we did the same thing to Ma Bell by getting everyone we knew in the movement to call the same phone number at the same time to blow out the circuits. See Fire Sale in Die Hard movie franchise for more clever ideas. Attila used to knock out a keystone from the aqueducts to Roma for a denial of service attack on the aqua supply. Some tactics really are timeless.

          1. charles sereno

            Attila! Who woulda thought? Given there’s so many possibilities out there, I’m most concerned about what can be effective (eg, obligatorily reported by the MSM) while, at the same time, avoiding surveillance, infiltration, and, above all, not taking or seriously damaging lives.

  19. Greg T

    This is a difficult question. I think the correct answer is close to what’s being discussed here. Richard Wolfe and Gar Alperovitz write about it and I think they are closer to accurate than most conventional pundits and experts. Wolfe argues that the New Deal only occurred because the elites at the time were frightened that socialism/communism offered an alternative for the working class that would permanently threaten elite control. Of course, once New Deal policies were implemented, it wasn’t long before they came under assault. Alperovitz writes that reorganization of work around community and locality offers that alternative to destructive finance capitalism.

    On the optimistic side, we’re beginning to see attempts at extrication from global finance capitalism. The Occupy movements in the US, the Arab Spring, the massive protests against European austerity, bitcoin, Wikileaks are all examples of global, popular discontent. I suspect we’ll see more in the years ahead as the economy continues to excess ever larger segments of the population.

  20. William Neil

    Thanks Lambert. I liked this interview and the way Jeff Faux went about his analysis. I too think something is building, and will surprise us all, due to the painful economic forces which Faux sees in motion. It is interesting to put his view up against that of Gar Alperovitz’s “What Then Must We Do?”

    I would love to see these two debate “the high ground” of a strategy on the left, maybe on NC’s pages.

  21. Hugh

    We have gone through so many descriptions of this already. The Democratic and Republican parties are complementary evils. Each needs the other. They are a tag team. Good cop/bad cop. They are like football teams. One team wears red jersies, the other blue. One is not, however, pro-football and the other, anti-football. They trash talk and slug it out on the field, but at the end of the day, it’s still all football, and everyone draws a fat paycheck.

    Yet another way to look at this is in terms of class. We have a ruling class of the kleptocratic rich, the trusted servant class of the elites, of which our corrupt political classes, Democratic and Republican officeholders and leaders, form an important part, and lastly a class of serfs, what we call the 99%, i.e. us, on which the parasitic classes of the rich and elites prey and which they relentlessly loot.

    The rich and elites can not be reformed, and so they must be overthrown. We can not compete with them in terms of money and there is no need to use violence although they certainly will. What we need to do, all of us in the 99%, is simply to act together. If all of us said no to the rich and elites, they would be gone in an afternoon. That is the real secret of people power. It is also why the rich and elites are so ruthless in the class war they wage against us. They know this. They need us to be afraid of and to distrust one another because then we can not act together.

    Real wealth is not money or financial instruments. We the people, the land, and its resources are the real wealth of this country. The rich and elites can not offshore these. What the rich hold is virtual wealth, money. I would expect them to run and to hide as much of this as they can. But it is important to remember that if the people held power, we would have powerful tools to go after them. The dollar is the world’s reserve currency. The Fed acts as the world’s central bank. International banks depend on chartered affiliates in the US to operate internationally. And we would control all this apparatus the rich and elites constructed to loot us. Only now we could use it to repatriate what they have stolen.

    Also as I have written many times, movement first, party second. We must create a mass movement of Americans with a clear and compelling vision of the society we wish to build. I favor a society which is just, equitable, and prizes privacy and respect for each other.

    We must call on all Americans to join something bigger than themselves. We must translate that vision into a concise program: I advocate a society where all are guaranteed by all the building blocks for a good, decent, and meaningful life, that among these are good jobs that pay a living wage, good housing, healthcare, education, and retirement.

    Out of such a movement we can recruit candidates dedicated to these goals, and we can measure them against how well they fulfill them. This approach can work within or outside the current Constitutional order because it addresses the deeper questions to which the Constitution was itself a response.

    1. charles sereno

      For the romantics among us, can we think of kleptocrats as lords, elites as vassals, and the rest of us as serfs? For the non-romantics, if only us serfs were the 99%! It would just take a call to action to set things straight. That’s the rub. Those higher estates have protected their flanks with at least the upper decile. As my grandson used to say — “It’s just not fair!”

  22. KeninSD

    Here’s a proposal to change our weak and ineffective politicians and governing system. It has the virtue of being completely non-violent, highly effective and taking all of the oligarchy, from the top to the political class at all levels of government, by surprise. And it will propel a permanent change that will forever make money and it’s hidden influence, useless to the ruling class.

    I propose a “purposed hackathon” to uncover and make public every financial transaction made by any corporate and non-profit (read 501c4) entity. Every detail from source to offshore accounts. From hidden banks to pass-throughs to political campaign to politician to voting record. All, every single one!

    By publishing the money trail and knowing who’s taking what from whom, when, and in what amounts, we can get to the root of undue influence and corruption that exists in this country. All of these shady dealings can be published on wiki sites and the electorate can use it to force the change that our democracy needs to recover our country.

    We have the tools to expose the corrupt roots of our democracy. It’s much better than guns and violence and it’s invisible until the results are published and the corrupt have to publicly explain their lies. All transactions leave a trail that can be uncovered to reveal the relationships that the powerful prefer to keep private. Let’s use all available technology to return our republic to the citizens of our country, and the world.

    Sunshine still does wonders. Now, will the $500+MM Powerball winner in FL come forward to fund this dream? Or, will Anonymous volunteer some time and brain power to show that this can be done?

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