Tag: Economics

Ordinarily I’ve avoided referencing pop culture in my posts, but forgive me again for doing so once more.  I’ve been inspired to write on this topic based on watching this past Thursday’s 30 Rock episode.  Its main idea implies that this naggingly persistent Great Recession was largely a result of those in big business who went for the easy, predictable sell and in so doing completely eliminated the idea of risk.  In the episode, a fictional company that has recently bought NBC’s parent company, General Election, has devised a scheme to generate an endless supply of guaranteed income–namely, hundreds of channels of pay-per-view internet pornography.  The revelation doesn’t sit well with Jack Donaghy, the Alec Baldwin character, a top ranking executive who is used to committing brainpower and elbow grease to creating innovations that sell, regardless of whether they are environmentally friendly, exploitative, gimmicky, or completely useless.  As he puts it, the new company has made his entire skill set obsolete and reduced making money to a robotic perpetual motion machine.

Many pertinent issues are raised in the episode.  Among the most notable is the suggestion as to whether or not consumerism and consumer capitalism ought to be viewed as some sort of necessary evil.  Jack Donaghy is frequently an unsympathetic character on the show, but he does represent the very American idea that buckets of money can be made for those clever and resourceful enough to come up with a product or concept the public will clamor for, regardless of how stupid, pointless, or wasteful it might be.  This has indeed been the criticism many of us on the Left have made over the years when we contemplate our obsession with the acquisition of possessions to no real positive end.   When played off the idea that even necessary evil has been corrupted by an unimaginative scheme which promises guaranteed rates of return and no possible margin for error, the larger question is whether our current economic downturn was, in part, caused by risk-averse thinking.  Have we exchanged necessary evil for unnecessary evil?

Instead of taking a chance and risking gaining either great wealth or a setback, it appears that some have ventured to circumvent the old ways.  Though I am certainly no fan of the capitalist system, it is my understanding that, based on its rules, anyone and everyone is given the opportunity to try their hand at making money.  Some efforts succeed and some efforts fail, certainly, but that’s just the nature of it.  Many have made fortunes and lost them outright and many have achieved much in the way of capital through the process of trial, error, and dogged determination.  But when that enterprising spirit and simultaneous revelation that one achieves when realizing that life itself is a series of ups and downs—when that become obscured by a desire to take the easy way out—then we all are simultaneously inhuman and poorer in the end.

Whether or not we believed that the American Dream was a dream deferred or a bad dream in the first place, it is interesting to ponder whether it has been royally short-circuited.  To be sure, there were certain economic theorists and historians who had long proposed that something like this was an inevitability.  Those in particular who espoused the theory of late capitalism would seem to be validated by the episode’s premise.  We who have long spoken out against the injustices and inequalities of the existing system have nonetheless learned to live with it, and the idea that a brand new enemy may have taken the place of the old is certainly worth contemplating.  Still, predicting the ultimate demise of capitalism is a bit like setting a date for the end of the world, if not the Second Coming.  As it is written, brothers and sisters, you don’t need anyone to write to you about times and dates.  For you know very well that the day of the Lord will come like a thief in the night.  

We've got to stop Wall Street from bringing us another economic disaster — before it happens.

Tell your U.S. Senators to crack down on Wall Street now.

A real financial reform package must include an independent Consumer Financial Protection Agency, restoration of the Glass-Steagall Act, and strict new limits on the derivatives market.

To protect citizens from rapacious banks, we need a Consumer Financial Protection Agency to stop abusive mortgages and credit card terms, and other predatory financial schemes.

The Glass-Steagall Act, which separated commercial and investment banking, was enacted after the financial crash of 1929, but it was repealed in 1999. It is crucial to preventing the reckless investing by commercial banks that caused some of the greatest financial disasters in U.S. history.

Rampant speculation in the unregulated derivatives market was a major factor in the collapse of the global financial system. We need tough new restrictions on the derivatives market, or speculators will continue to imperil our country's economic stability for short-term profit.

Tell your U.S. Senators today: support strong financial reform now!

No, this is not an essay on some X-rated movie.  It is about how the government and Wall Street have continually conspired to take and use any new money it can get its hands on, which, now means YOUR money.

The latest new “idea” floated by FDIC Chairwoman Sheila Bair is to have state pension funds buyout failed banks.

Now, I am not totally ignorant about economics, nor, am I a studied professor on the subject.  However, I’m not sure who could glean any meaningful information out of the following:

In a speech to the National Association for Business Economics Washington Policy Conference, FDIC Chairwoman Sheila Bair outlined what she called “a pre-funded resolution mechanism,” but did not specify what exactly that is. She instead said it would be “similar to the FDIC’s receivership authority for failed banks,” exposing only shareholders to risk, as opposed to the bank bailouts that saw billions of taxpayer dollars funneled into a near-crippled financial system.

“Shareholders and creditors would bear the losses, not the public,” she explained. “But, the process would be orderly and help prevent a catastrophic collapse of other firms.”

Go ahead, do your head shake to clear the cobwebs, and let’s talk about the latest plan for the government to get their hands on YOUR money.

   When I wrote this essay a lot of people asked me, “What should we do about it?”

 It’s a good question, but its also a trap. I’m not so arrogant as to believe that I know the perfect solution to our economic problems. Anyone that tells you they know is either a fool or a liar.

 However, that doesn’t mean we can’t discover where we went wrong once you apply a little logic and data to the situation.

 For instance, if you realize you have taken a wrong turn, it makes more sense to turn around and go back to the corner where the mistake was made, than it does to drive in a general direction and hope you can find your way home.

 When it comes to the economy, its pretty easy to discover when the wrong turn was made – 1972.

I was supposed to begin the long-delayed series of PTSD stories I’ve been planning, but before we begin, I need to tell y’all about something that just happened in my house.

For us it wasn’t a matter of life or death, but it is the kind of story that explains, perfectly, why we need to reform the health care system we have today-and for that matter, it’s also a great explanation of why a single-payer system would be a giant step forward for everyone in this country, whether you’re insured today or not.

It’s also hilarious and sad and frustrating, all at the same time-which makes today’s story a pretty good allegory for the current American way of doing health care.

So follow along, have a good laugh…and at the same time, take a minute to consider what could be, and how much less irritating things should be.

During the State of the Union address, President Obama noted what a slew of other previous Presidents have noted–that the United States of America needs to start exporting goods again.  Few people can disagree with a statement like this, but what Obama, nor any of his predecessors have ever discovered is precisely what one would need to trade with other countries and in what form this new invention would take.  If were wise enough to know, I’d probably be well on my way to being a very wealthy man, so I don’t underestimate the challenge in front of us.  However, though I believe that the capitalist system caters more to the selfish side of us more than the altruistic one, with selfishness does come innovation for the sake of maximum material gain, and in that regard, perhaps our basest instincts might come to everyone’s aid, at least for a time.

Careworn phrases like “good old fashioned American ingenuity” have been utilized over and over again for at least a century, insinuating strongly that there was no problem beyond our grasp which would not eventually render a solution.  And, honestly, I don’t think that this mode of thought nor of rhetorical framing has ever really gone away altogether.  But what I do think is that we don’t often look for these signs so much for where they are so much as where we think they ought to be.  Everyone can drive by and see the looming, titanic mass of buildings that house a paper processing plant or a textile mill, but the more subtle evidence of, say, a software design firm is much less visible to our senses and our psyches.  Even though we may be headed towards a purely service-based economy, other developing nations are only now in the process of beginning their industrial phase of growth.  Though our example might be the means by which they set their sights and chart their course, one must also crawl before one walks.  

If we were all more or less on the same page the whole world round regarding economic parity, then exporting commodities would be a much easier task.  Right now we do retain some residual elements of an earlier day, but often our products can’t compete globally because they cost more to produce and thus they cost more to purchase.  I honestly believe that we can be indebted to one of two stances in this instance, but not both.  Either we pay people more in line of a fair wage, granting them adequate benefits— recognizing that this will ensure that many countries can always buy what they need at a cheaper price from another source, or we slash costs to the bone and with them salaries and benefits.  It goes without saying that I would never advocate the second position, but for the future going forward that model might be the only option that makes our products look attractive and compelling to another country or region’s buyer, based on the current state of affairs as they exist today.

Speaking specifically about food, for example, I note that our own cultural attitudes are often to blame for much of the disparity.  The more affluent among us can afford to be socially conscious by means of pocketbook and pay two times as much for products at a Whole Foods or a locally-grown produce Farmer’s Market.  The poorest, of course, simply aren’t afforded this option.  Americans might cut corners or scrimp to buy a wide screen television or to save up to take a vacation, but never towards food.  Food is always supposed to be readily available, unquestionably cheap, and supremely varied.  Organic food is a kind of innovation of sorts, since though its stated purpose is to use older methods of cultivation, it still combines elements of more modern technological strategies with the tried-and-true methods of a different time.  Though it would never willfully adopt this label, organic food is itself a hybrid concept—one that seeks the middle ground between old and new.  

These, of course, are previously established channels and instances.  As for what product or products would find favor among the consumers of the globe, one assumes upon first thought that the most likely innovation would come in the form of some new technological breakthrough, one perhaps tied closely to the computer or the internet.  However, like organic food, perhaps it would be best to seek for something with a foot in old ways and a foot in newer formulations.  The most enterprising soul would be wise to recognize that products can be designed purely with the intention of always having a reliably steady stream of buyers and demand, or that they can be modified in the hopes of both making money and pulling in less developed countries and regions more economically in line with ours.  Straddling the gap between the way it has always been and they way it needs to be is partially why we are at the impasse in which we find ourselves.  While I do believe that the phrase “ethical capitalism” is a complete oxymoron, I do also recognize that if we are left with a system unable to be discarded for quite some time, it would be much easier if we limited as many disparities and points of difference between people as we could, since then it would be able for us to better address the remaining and still quite numerous problems left over.  

We are still in the middle of a shift between an industrial economy and an information-based one, but at times our benchmarks and guideposts are indebted to a by-gone epoch.  Nostalgia is strong and so is the resistance to the way things were always supposed to be.  For instance, I grew up in Birmingham, Alabama, a city which was forced to completely reinvent itself after the collapse of its native steel industry in the 1970’s.  In so doing, it embraced banking and a world-class health care center based around a university, both of which are the two largest employers in the metro area.  We might be wise to emulate their example, which is far from the only instance that a city teetered on a knife’s edge between survival and disaster and managed to righted itself.

It is a short-sighted, short-term gain over long-term ultimate resolution means of thinking that got us into our current mess.  American must learn that delayed gratification provides temporarily discomfort but eventual, eternal satisfaction.  Greed drives humans to go for the quick cash-in and the gravy train, instead of a more modest, but still very satisfying profit.  I don’t ascribe to a theory of American exceptionalism because I am too aware of the times at which we fall short, though I also recognize that we are far from the only country, society, or culture which has a tendency to opt for the quick fix rather than engaging in the soul-searching and introspection which leads towards true resolution.  Lasting success is based on hard work and research, not the accidental score.  

Neither do I count myself among the numbers of those who adopt a cynical tact towards American identity and greater purpose that seeks fault first and rarely gives room for success.  Somewhere between those who believe that our best days are yet to come and those who assert that we are soon going the way of the UK into second-tier country status is something close to the reality of the situation.  Still, what we require right now is a new kind of skill set, one willing to work with existing trends, rather than fight them, build up native industry without seeking salvation in the form of a foreign company with an open checkbook, pay a bit more than usual for household staples with the understanding that increased cost doesn’t always mean money wasted, and recognize that in a truly fair world, it shouldn’t matter who is number 1 or number 500.  If money is what makes the world go round, we can’t begin to get any other unfair construct in check until we ensure that monetary policy levels the playing field.  Real equality does not trickle-down and it never will.  

In light of recent discussion of national economic issues, I would like to revisit Bill Clinton’s 1992 slogan, “it’s the economy, stupid.”  Here I will look at the rhetorical clout offered in various promises, against the background of economic and political history, while arguing that it’s the entire capitalist system which needs to be revisited.

(Crossposted at Orange)

After a decade-long slide into semi-irrelevance, it’s now being announced that the major television broadcast networks are considering leaving behind the “free TV/advertiser supported” business model in order to turn themselves into something more closely resembling a cable operation; the idea being that they could create a second revenue stream from the same “subscriber fees” that are paid by cable and satellite operators to all the other channels those operators carry.

This has become necessary, according to the networks, partly because the market has become so fragmented…which, naturally, is cable’s fault-and presumably the fault of the disloyal viewer, as well.

Another reason driving the change is related to the desire of the networks to have a source of revenue that’s more reliable in times of economic downturn, when advertisers often try to husband scarce resources by cutting back on all their expenses, particularly advertising dollars.

Will this new change in the business model reverse the fortunes of the networks?

Is it possible that the networks are simply poor business managers?

And what about…Krystal Carey?

Tune in for the rest of the story-and we’ll find out.

Luck: Couple of months ago, my husband's stepmother's niece, 18 years old, wants heated windshield wipers. Can't find them online, files a patent and now Walmart wants the rights. True story. (seriously)

Why I am the Mom of the Year: If your five year old finds your vibrator and thinks it's a light saber, running around the house swinging it with both hands zroom-zroom, you might want to downsize or at least choose a different color. (no comment)

 Best Drinks Ever: Eiswein and Chocolate milk made with dark cocoa.

 I am a veteran, a mama of three and soon starting my junior year pursuing a degree in Microbiology, then on to PA school (please science gods). I am a eco-socialist libertarian progressive atheist who also happens to have a single economic thought progressives hate so you will have to be in the dark about because unlike vibrator stories, its personal. Proud Moment: I met Howard Dean in Iowa the week he made both the Newsweek and Time covers. I would have a picture if not for some asshole who bumped my husband as he took the picture. Because we were with Sen. Johnson people, we were able to hang around in the background with Dean and his people after the event. Pelosi's daughter was filming. I hope I am not on film. I haven't watched her documentary for just that reason. Stupid, I know.

My Favorite Joke:

Hi! -Christina

We’re diving deep into “geek world” today with a story that combines economic hardball, the periodic table of the elements, and a barely noticed provision of the Defense Authorization Act that seeks to break a monopoly which today gives China near-absolute control over the materials that make cell phones, electric cars, wind turbines, and pretty much every other tool of modern life possible.

If we successfully break the monopoly, we’ll be able to create millions of new manufacturing jobs in this country-and if we don’t, somebody else owns the 21st Century.

Ironically, the global warming we’re trying to fight with new green technologies might be an ally in our efforts to make those very same green technologies happen.

There’s a revolution in industrial processing going on, rare earths are at the center of it all…and in today’s story, the revolution will be televised.