Seismic Forces Rock the Parties

White height, © 2016 Susan Barsy
The newspapers I glimpsed while traveling communicated a sense of political calamity, the dismay of wonks, journalists, and miffed members of the GOP.  Trump, the party’s likely nominee, was causing the commotion, but the kerfuffle spoke volumes about the muddled condition of the party itself.  Something seismic is happening: the GOP’s ill-assorted components are about to morph into something new, or break apart.

In ordinary times, politicians, the media, and a vast network of consultants and experts promote ideological order and continuity.  The nation’s leaders use the media, and influential constituents use the leaders, to shape the citizenry’s vision, mapping out choice in a limited way.  A centrist ideology that is pro-corporate and pro-global has dominated both parties since the Clinton era, while ‘hard-liners’ of various stripes have increasingly dominated the GOP.  These modern-day fire-eaters may be against federal debt, reproductive rights, or even religious pluralism, but, collectively, they have skillfully gained sway within the Republican Party, with the dream of imposing their minority views on a moderate mainstream.

Trump has attacked the precepts of this centrist-right ideology, making him anathema to many leaders in both parties.  Are Americans voting for Trump because they are hateful and benighted, or are they supporting him because he alone is promising to jettison a set of ideas that has left much of the population stuck in the past and impoverished?  In either case, his ascendancy shows how completely the GOP establishment has lost touch with the people’s will.  The hegemony of the social conservatives and GOP moderates is over.  Paul Ryan and others who want Trump to shift in their direction hope to perpetuate it.  They’ll fail.

Will Donald Trump allow other GOP leaders to ‘handle’ him?  If he accepts orders from the likes of Paul Ryan, voters will conclude Trump is being co-opted and abandon him.  Ryan claims his goal is to ‘unify’ the party: if so, he could hardly have gone about it in a less auspicious way.  Why grand-stand when more might be accomplished quietly?  This crisis has exposed leading Republicans as shockingly short on political skills.  But then, how can a party whose leaders are famous for digging in their heels suddenly develop a genius for collective compromise?

In general, we can hardly blame Trump for the downward slide occurring in our political culture.  He has divined a set of issues that voters care about most passionately, and his ideological response has been more apt than that of any other prominent Republican.  We can abhor Trump’s crudeness and bigotry, and we can impede him by voting someone else into the presidency.  If I were a Republican party leader, however, I sure would be trying to salvage whatever is feasible about his ideology, and trying to integrate it into that of my party.

Trump’s main talking points have to do with restoring broad economic prosperity, insisting on corporate responsibility, and burnishing American citizenship’s prestige.  Trump’s ferocious hatred of outsourcing and unfair trade, his demand that something be done to relieve blue-collar pain, are oddly reminiscent of the leaderless Occupy movement’s themes.  Trump might not have it in him to be a successful president, but he’s been smashingly successful at reminding us that politics is ultimately about ideas not money.  Those who want to stop Trump need to counter his ideas with a positive agenda.  Can his opponents disavow their complacency?  Can they disavow their role in perpetuating a dysfunctional status quo?

Photograph by Susan Barsy

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The Shape of the Post-Recession Economy

How the Recession Reshaped the Economy by the New York Times (snapshot of graphic)

 

For those interested in the condition of the US economy, I highly recommend the detailed set of interactive graphics that the New York Times published online yesterday.  CLICK ON THE IMAGE OR HERE TO VIEW.  The graphics compile data on almost all the private-sector jobs in today’s economy, depicting how each of 255 sectors has fared since the economic downturn and giving figures for the average pay in each sector and the total number of jobs lost or gained.

Every time I see graphics of this quality, I wonder why the US government is incapable of producing statistical summaries that are as timely and as accessible to ordinary people.  While the government collects an enormous amount of data on almost every aspect of our economy and society, its performance is terrible when it comes to making facts about our country readily available on the internet for everyday use.

Many thanks to Jeremy Ashkenas and Alicia Parlapiano of the New York Times for designing a set of statistical representations that are so beautiful, informative, and easy to read.

The graphics show which sectors of the economy have recovered or never suffered a loss.  Others are newly created and growing (e.g. electronic shopping).  The oil and natural-gas sector, with many high-paying jobs, is growing great guns.  Yet others like air transportation and many sectors relating to homes and home-building are continuing to suffer and even decline.  The recession also accelerated the decline of certain ailing parts of the economy (such as traditional print media).  Overall, it seems obvious that the recession coincided with other major shifts in the economy, such as those caused by globalism and technological developments like the digital revolution.

Small Red House

Small red house, © 2014 Susan BarsyThe South Shore Line, an electric train that runs from South Bend Indiana into Chicago, runs through some of the most beautiful places along Lake Michigan as well as some of the poorest and dirtiest.  The simple beauty of the dunes, marshes, and woodlands that line the Lake alternates with a landscape that industry and humble labor of many sorts have shaped.

The train runs along the beautiful old Calumet Trail, a prairie path that has existed since Indian times, following the curve of the Lake across boundaries separating town from country, blurring the distinctions of ownership and governing.  All of northern Indiana and Chicago’s southern hinterland are seamlessly joined.  On both sides of the train flow thousands of properties—neat and messy, beautiful and ugly, thriving and moldering—suggesting every condition of American society.

It’s a hard train ride because so many neighborhoods are decrepit and decaying.  So many places—and people—are just scraping by.  Our America is not a spotless picture-perfect place.  Off the political grid are thousands of people subsisting in garbage-strewn trailer parks, or living in ramshackle housing with windows missing.  They are exiles from the land of opportunity.  Embarrassing aberrations with no place in the progressive narrative of the world’s greatest nation, they are geniuses of survival, disciples of the art of making something out of nothing.  With luck, every day is the same, where social isolation limns the horizon.

Is this the nation our forebears intended us to become?

Biden’s Arrow Hits Home


Joe Biden has mastered the political stump speech.  Watch the whole of his controversial campaign speech in Danville, Virginia, and you’ll see a great piece of Americana: a politician who knows how to work a crowd, seeking votes in a way that’s entertaining and folksy.  Biden’s allusion to slavery was hardly a gaffe; it was a logical and powerful way to get across a larger point about class and how Republicans have treated it for several decades.

We know Biden’s speech was a big success, because he was immediately excoriated as a dunce and a racist.  Blowback dominated the media for several days.  Romney huffily declared that Democrats had hit a new low and tried to get us to believe that Biden was a dangerous man whose message of division somehow “disgraced” the presidency.

Both sides questioned old Joe’s fitness and utility: Could he fill the presidential shoes if necessary?  Shouldn’t Obama drop him in favor of the sure-fire Hillary?  Democrats behaved predictably, too: instead of championing Biden and endorsing his underlying point, they grew sheepish.  If only they learned unity, the race wouldn’t even be close.

Puncturing the politics of avoidance
Yes, Biden hit a nerve, and he did it by puncturing the politics of avoidance that has been gripping the country.  Ever since the Reagan era, when Republicans managed to yoke together with one seamless ideology the economic interests of the elite with the social and moral concerns of people far more ordinary, class has been diminished as a potent source of political energy.  Republicans wish their supporters to believe that the interests of the wealthy and the less-so are the same.  To the extent that Democrats can pry this apart and present an alternative vision of class in American society, they will gain an important advantage over a Republican party that’s badly weakened already.

After all, this election is not “about jobs” or “the economy,” as Republicans say so blandly: it is about economic inequality and the role of the super-wealthy in our economic life.  It is about whether people like Mitt Romney, who has the whole world as his oyster, care about this nation’s economy and its ordinary people.

Romney would like voters to believe that his interests and theirs are just the same: that, if you feed the interests of his class, all will benefit; the interests of all classes will be served.  If that were the case, the recession would be ending, because American elites can write the script of the unfolding story.  They can decisively aid in restoring the nation’s economic health.  Leaders of America’s corporate class already have far more power than the president to see to it that Americans are more fully employed.

A party that’s drifted from its noble beginnings
Biden’s bald reference to slavery may well have pricked the conscience of Republicans who know how far their party has drifted from its noble beginnings.  In Lincoln’s time, Republicans were not only the champions of abolition: they were devoted to egalitarianism and to securing better economic prospects for lower-class whites.  The most radical Republicans advocated for full racial equality, a bracing proposition given the time.  Republicans were the ones who wanted to discuss such forbidden topics as slavery; it was Democrats who were proponents of silence, who wanted all discussion of “the peculiar institution” gagged.

Yet even then there were Republicans, such as Horace Greeley, who would not join the anti-slavery fight because they doubted whether the nation’s growing free-market system held out a sufficient promise of prosperity to American workers—even when those workers were white.  In the meantime, the persistence of slavery in America proved beyond a doubt that powerful elites, if left to their own devices, could not always be counted on to do the right thing.

Perhaps it was all that history that gave Biden’s arrow such a powerful zing.

The European Muddle

Like many great issues of the day, the euro mess is difficult to conceptualize.  Why not take a stab at it, though, since it’s something that could cause the US economy to collapse?

Here are links to a few graphics encapsulating different aspects of the European problem.  A few insights can be gained by interpreting them with our own 2008 financial crisis as a point of comparison.

The European Union faces at least two complex interrelated problems.  The first has to do with the condition of banks; the second has to do with the indebtedness of member countries.  There is also a third problem, which is more political.  It has to do with the structure of the EU itself and the poor tools it has for redressing “state-level” problems (critical weaknesses within member-nations like Greece and Spain) that threaten the euro’s value and stability.

Credit imbalances within the euro zone
The integration of nations within the eurozone encouraged capital flows within the community, while creating imbalances that threaten it, should the banks within one of the weaker countries fail.

This wonderful set of graphs published by the New York Times shows the interrelation among creditors and borrowers by country.  Done in late 2011, the graphs offer a general idea of how the stronger European economies—France’s in particular—would be affected if the banks of Greece and Italy were to go down.  French banks have many loans outstanding there and would incur grave losses, possibly fatal ones, were their weaker counterparts to fold.

Unlike in the US, the euro-zone lacks a mechanism like the Federal Reserve, which capably intervenes to stabilize and close or sell ailing US banks if necessary.  In 2008, the Treasury and Federal Reserve averted a general financial meltdown in the US this way.  They intervened directly in the affairs of troubled banks in the interest of keeping the whole banking system operating.  The panic of failing banks was mitigated;  otherwise, it would have spread like a contagion.  Our banking system was supported, and the problem was treated as a matter quite separate from that of the federal government’s own indebtedness or patterns of borrowing.

Until recently, the European Union could not behave similarly: it could not act to help banks, it could only give money to sovereignties.  On June 28th, however, the EU’s member-nations agreed to begin lending money to banks directly, a measure that untethers these two problems and allows a more flexible approach aimed specifically helping banks that might fail.  Nonetheless, it remains to be seen whether this will be much help, as the level of capital needed to stabilize the banks is very large.

Rising sovereign debt
Which leaves the other big problem: the rampant government spending in many EU countries, illustrated in this set of maps, also published by the New York Times.  The maps indicate the significant variation in the spending habits of the governments that make up the European Union.  In many of the EU countries, however, including some of the strongest—such as France and Germany—sovereign debt as a portion of GDP has been growing dramatically.  The difficulty of reining in spending and bringing the most profligate governments in line has led to popular unrest as well as political conflict over austerity measures and proposals for stringent fiscal reform.

It’s not clear, though, whether these disproportionately high debt burdens pose a threat to the long-term health of many of the stronger EU countries.  The more that the elements of the crisis can be differentiated and handled pragmatically on a case-by-case basis, the better the prospects for amelioration will be.  This is definitely a case where what’s good for the goose is NOT good for the gander–or in this case, more fitly, for the PIIGS (the acronym for Portugal, Italy, Ireland, Greece, and Spain).  Helping the most distressed banks may at least buy the EU time to address the more politically fractious issue of how to restore fiscal balance—a very different proposition in Greece than it is in France or Germany, and a more sensitive issue still for the euro zone as a whole.

RELATED:
The Sovereign Debt Exposure of the EU’s 10 Strongest Banks
, Forbes.
Paul Taylor, Euro Zone Fragmenting Faster Than the EU Can Act, The Independent (Dublin).

How the Fed Makes Us Lazy—and What We Can Do

https://i1.wp.com/upload.wikimedia.org/wikipedia/commons/thumb/3/3f/Ben_Bernanke_official_portrait.jpg/512px-Ben_Bernanke_official_portrait.jpg
This is not a post about hating the Fed and how we should get rid of it.  This is a post about the rest of us and how convenient it is to have the Fed to complain of.

I was tempted to title this post, “The rabble are out to crucify Ben—there’s even a Judas” (now that Paul Krugman, the Fed chief’s former Princeton colleague, has taken to assailing Benanke’s performance in print).  But that would have been just one more example of the phenomenon I’m out to criticize: finger-pointing.

It would be tough to judge a finger-pointing contest these days.  As the economy flails in the long wake of the financial crisis, everyone in every party seems to be training to become a finger-pointing champion.  What interests me about the attacks on the Fed, however, is that even anti-government types now seem caught up in thinking that tinkering with the government is the key to solving problems that—let’s face it—the American private sector created.

The federal government is powerful, but more powerful still are the aggregated interests that pump out more than $15 trillion worth of goods and services a year.  That was our GDP in 2011, a CIA Factbook figure.  If you hold a job, work in a profession, run a multinational, or own a small business, you are part of that great engine.  Simply put: we are the economy.  The mess is ours.

Perhaps this is why we feel such scorn for Ben Bernanke, a man so sincere and conscientious it’s irritating.  Love him or hate him, it’s hard to claim he isn’t doing his utmost to fulfill the Federal Reserve’s dual mandate, which is to stabilize prices AND move the country toward full employment.

That’s right: one soul at the helm of the Federal Reserve, believes that, by controlling the amount of money in circulation, he can sufficiently influence the sort of corporate decision-making needed to end joblessness.  He hopes that, by tweaking our monetary policy, he can prompt our American brothers to give another American brother a job, until every brother and sister in our economy is once again working.

This is why, in Mr Bernanke’s increasingly frequent public appearances and statements, he can be heard fretting about, say, whether long-term unemployment could lead to a permanent loss of human capital in the economy.  He truly believes that getting all of America back to work is his responsibility.

He may be the only American who feels that, unfortunately.  This is why hating the Fed is so misguided and self-deceiving.  Hating the Fed is a cop-out, a lazy habit that absolves the rest of us from looking around us and asking who else might bear some responsibility.  Our national preoccupation with monetary policy is a convenient dodge, diverting us from the fact that we ourselves could do something.

We are the economy.  Regardless of the shortcomings of the Fed and Mr Bernanke, we owe it to the jobless to recognize their lot as a social, civic, and humanitarian problem, one that’s in our power as a society to remedy.

Should we destroy the one thing that’s working?
Obviously not.  The Fed would matter a lot less if we could manage to get some other things working as well as it does.  If we didn’t have institutions like the Fed, it would be up to Americans in their respective states and communities to figure out how to alleviate joblessness and destitution and restore prosperity.

This was our lot earlier in our history, when Americans operated with a mere fraction of what now passes for economic understanding.  In those times, punishing downturns such as those occurring in 1837, 1873, and 1893, led not only to protracted suffering but also to constructive cultural and social ferment, an outpouring of philanthropic zeal, and more than a little genuine soul-searching.

The Panic of 1837, for instance, prompted the formation of some of our earliest urban relief organizations, while the banking crisis of 1856 gave way to a religious reawakening in 1857 known as “the Businessmen’s Revival.”  Chief among the converts were Manhattanites who concluded their own godlessness and greed were to blame for the economic adversity they were suffering.  Such heartfelt contrition and public avowal of responsibility, even in secular form, have been all but missing from our present-day financial crisis.

We can’t hope to lessen joblessness if we don’t recognize our obligations to one another.  We can’t hope for national prosperity when so many of our fellow Americans are jobless and poor.  The common-sense idea that we must care for one another, even if only for selfish reasons, is crucial if we are to re-energize our economy.  It might not be an idea Ben Bernanke can teach us, but it sure is one that we can use.

Want help  •  Foreswear laissez-faire  •  Use all the tools
Hire a fellow American  •  Talk to the rich guy

RELATED:
Susan Barsy, Fiscal Policy is not Economic Policy, Our Polity.
Dean Baker and Kevin Hassett, The Human Disaster of Unemployment, New York Times.
Rick Newman, To Fix the Federal Reserve, Fix Congress First, US News.
George F. Will, The Trap of the Federal Reserve’s Dual Mandate, Washington Post.
Ken McLean, The Fed’s Dual Mandate Dates to a 1946 Act, Washington Post.

Image: Official portrait of Federal Reserve chair Ben Bernanke, from this source.

May Day Meditations

Chicago's May Day Parade along Jackson Boulevard (Credit: Susan Barsy)
I WAS RUSHING out of my office building the other day when I ran smack dab into a May Day parade.  It took me a minute to realize it wasn’t just another Occupy rally.  No, the date was the first of May, when, by tradition, workers around the world take to the streets en masse, their parades a vivid display of emotion and identity.

Chicago police watching the 2012 May Day parade (Credit: Susan Barsy)It was striking was how un-specific this demonstration was.  It didn’t have much to do with labor in particular or something specific workers might actually need.  It seemed to have more to do with how unfair life is—a general proposition we might all assent to.

Bystanders watching the Chicago May Day parade at Dearborn & Jackson (Credit: Susan Barsy)Seeing the marchers made me think about how much the nature of work and the status of workers in the US has changed over the decades, since May Day observances first began.  International Workers Day, as it is officially called, was instituted to mark the anniversary of the Haymarket disturbances in Chicago when, in 1886, violence erupted as police sought to dispel a crowd that had gathered to protest police brutality toward workers demonstrating for the eight-hour day.  Eight policemen were killed, an unknown number of protesters were killed and injured, and 4 probably innocent demonstrators were later hanged in what was one of the most infamous incidents in labor history.

May Day protesters in front of the Dearborn Street Post Office, Chicago (Credit: Susan Barsy)The heroic struggles of those earlier generations of workers were quite remarkable.  Their disciplined efforts brought about many important gains: the abolition of child labor, the minimum wage, safety inspections, the 40-hour week.  Without the labor movement, most of us would not have anything like the standard of living we enjoy today.  One has only to dip into Freidrich Engels’ The Condition of the Working Classes in England or Rebecca Harding Davis’s Life in the Iron Mills or Jacob Riis’s How the Other Half Lives to recall why their struggles were necessary.

Bits of that story are told in photographs such as these, preserved at the Library of Congress.

Children wearing sashes in Hebrew and English bearing the words "Abolish Child Slavery"These girls were photographed on May Day in New York City in 1909.  Their sashes bear the words “Abolish Child Slavery” in English and Yiddish.

African American protester in 1909 wearing a hat card with the words "Bread of Revolution"This protester was a member of the I.W.W. (International Workers of the World), also known as “the Wobblies.”  Wobblies believed in the international brotherhood of labor and dreamed of improving conditions of workers the world over.  A labor movement like that today would still have much to do.  Looking at this photo makes me think of some of the labor movement’s missed opportunities.

Photograph of female garment workers in NYC parade, 1919 (Courteay Library of Congress)
In good times and bad, May Day has inspired expressions of worker pride, as displayed in this wonderful photograph of female garment workers in 1919.  You would never guess from looking at these ladies how very punishing their occupation was.

Maybe that is one of the differences between that era and today: whereas, then, many workers suffered from conditions that were local and immediate, the costs global capitalism inflicts on American workers are more abstract and harder to see.

There was a great deal to ponder in even a fleeting glimpse of a modern May Day parade.

Additional information regarding Library of Congress images:
here and here and here