THE BLACKBURN REPORT: September 2011

Friday, September 30, 2011

Phony Fear Factory

From the NY Times

The good news: After spending a year and a half talking about deficits, deficits, deficits when we should have been talking about jobs, job, jobs we’re finally back to discussing the right issue.

Published: September 29, 2011

Fred R. Conrad/The New York Times

Paul Krugman

Blog: The Conscience of a Liberal

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The bad news: Republicans, aided and abetted by many conservative policy intellectuals, are fixated on a view about what’s blocking job creation that fits their prejudices and serves the interests of their wealthy backers, but bears no relationship to reality.

Listen to just about any speech by a Republican presidential hopeful, and you’ll hear assertions that the Obama administration is responsible for weak job growth. How so? The answer, repeated again and again, is that businesses are afraid to expand and create jobs because they fear costly regulations and higher taxes. Nor are politicians the only people saying this. Conservative economists repeat the claim in op-ed articles, and Federal Reserve officials repeat it to justify their opposition to even modest efforts to aid the economy.

The first thing you need to know, then, is that there’s no evidence supporting this claim and a lot of evidence showing that it’s false.

The starting point for many claims that antibusiness policies are hurting the economy is the assertion that the sluggishness of the economy’s recovery from recession is unprecedented. But, as a new paper by Lawrence Mishel of the Economic Policy Institute documents at length, this is just not true. Extended periods of “jobless recovery” after recessions have been the rule for the past two decades. Indeed, private-sector job growth since the 2007-2009 recession has been better than it was after the 2001 recession.

We might add that major financial crises are almost always followed by a period of slow growth, and U.S. experience is more or less what you should have expected given the severity of the 2008 shock.

Still, isn’t there something odd about the fact that businesses are making large profits and sitting on a lot of cash but aren’t spending that cash to expand capacity and employment? No.

After all, why should businesses expand when they’re not using the capacity they already have? The bursting of the housing bubble and the overhang of household debt have left consumer spending depressed and many businesses with more capacity than they need and no reason to add more. Business investment always responds strongly to the state of the economy, and given how weak our economy remains you shouldn’t be surprised if investment remains low. If anything, business spending has been stronger than one might have predicted given slow growth and high unemployment.

But aren’t business people complaining about the burden of taxes and regulations? Yes, but no more than usual. Mr. Mishel points out that the National Federation of Independent Business has been surveying small businesses for almost 40 years, asking them to name their most important problem. Taxes and regulations always rank high on the list, but what stands out now is a surge in the number of businesses citing poor sales — which strongly suggests that lack of demand, not fear of government, is holding business back.

So Republican assertions about what ails the economy are pure fantasy, at odds with all the evidence. Should we be surprised?

At one level, of course not. Politicians who always cater to wealthy business interests say that economic recovery requires catering to wealthy business interests. Who could have imagined it?

Yet it seems to me that there is something different about the current state of economic discussion. Political parties have often coalesced around dubious economic ideas — remember the Laffer curve? — but I can’t think of a time when a party’s economic doctrine has been so completely divorced from reality. And I’m also struck by the extent to which Republican-leaning economists — who have to know better — have been willing to lend their credibility to the party’s official delusions.

Partly, no doubt, this reflects the party’s broader slide into its own insular intellectual universe. Large segments of the G.O.P. reject climate science and even the theory of evolution, so why expect evidence to matter for the party’s economic views?

And it also, of course, reflects the political need of the right to make everything bad in America President Obama’s fault. Never mind the fact that the housing bubble, the debt explosion and the financial crisis took place on the watch of a conservative, free-market-praising president; it’s that Democrat in the White House now who gets the blame.

But good politics can be very bad policy. The truth is that we’re in this mess because we had too little regulation, not too much. And now one of our two major parties is determined to double down on the mistakes that caused the disaster.

Prisoners Renew a Protest in California

By ERICA GOODE

Published: September 29, 2011

REPRINTS

SAN FRANCISCO — Corrections officials in Sacramento said Thursday that they would discipline inmates who participated in a renewed hunger striketo protest conditions in the state’s highest-security prisons, where some prisoners have been held in virtual isolation for decades.

Hunger Strike by Inmates Is Latest Challenge to California’s Prison System(July 8, 2011)

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More than 4,200 inmates at eight prisons have been refusing state-issued meals since Monday, according to the California Department of Corrections and Rehabilitation. The hunger strike, the second this year, is the latest problem to face state prison officials, who are under a Supreme Court order to reduce the state’s prison population by more than 30,000 people.

A memo was distributed to prisoners at the state’s 33 correctional institutions warning that if they took part in the hunger strike, they would be subject to disciplinary action that could include confiscation of canteen items like food they had bought.

Prisoners identified as leaders of the strike would also be removed from the general population and “placed in an administrative segregation unit,” according to the memo.

A hunger strike in July, which involved 6,600 inmates at its peak,ended after the department agreed to consider adjustments in the way inmates are assigned to the state’s three security housing units, where they are held in tightly controlled conditions that minimize human contact.

Scott Kernan, the under secretary of operations for the department, said that after the strike in July, the department “determined there was some validity to what the inmates’ concerns were.” The department is reviewing its procedures, he said.

But on Monday, inmates resumed the strike, saying that the department had not yet fully addressed their demands.

Those demands included modifying the practice of sending prisoners to security housing units for indefinite periods based on the judgment that they were involved in gang activities, and also abolishing the practice of “debriefing,” in which inmates are encouraged to gain release from the unit by renouncing their gang affiliations and providing information about them.

At Pelican Bay State Prison, in a remote northern region of the state, the average length of confinement for the 1,111 inmates in the security housing unit is 6.8 years, according to the department. Most inmates in the unit are confined in windowless cells, 7.6 feet by 11.6 feet, for 22 hours or more a day.

Donald Specter, director of the Prison Law Office in Berkeley, which provides free legal services to prisoners, said that given the standoff between the inmates and the prison officials, “I don’t really see how this can end happily or without tragedy.”

A version of this article appeared in print on September 30, 2011, on page A13 of the New York edition with the headline: Prisoner Protest Restarts in California.

REPRINTS

Thursday, September 29, 2011

Occupy Wall Street and the limits of spontaneous street protest

Previously Published on the Guardian UK

Those who, like me, expected the Occupy Wall Street protest to fizzle out, or be actively stomped out, after just a few days, have been surprised to see that after nearly two weeks, it is still going strong. Recent confrontations with the police – especially the 'pepper spray' incidents – have emboldened protesters and stimulated the kind of media attention many supporters complained was lacking in the demonstration's early days.

It is hard to disagree with Doug Henwood and others that insofar as any political ideology can be discerned from the protest, it would be the flavor du jour of American anti-corporate populism. But, in the absence of anything else, that's been enough to draw leftwing luminaries from Michael Moore, to Roseanne Barr, to Cornel West.

Sure, the fact that people are angered enough by the largely unpenalised greed and venality of major financial institutions to camp out in Zuccotti Park indefinitely is certainly a welcome development. But the protest leaves unanswered a number of questions about just what kind of effort it would take to create a more just society. The statement of purpose for the demonstration reads:

"The beauty of this new formula, and what makes this novel tactic exciting, is its pragmatic simplicity. [W]e talk to each other in various physical gatherings and virtual people's assemblies … we zero in on what our one demand will be, a demand that awakens the imagination and, if achieved, would propel us toward the radical democracy of the future …"

On a screen, this message has a sort of melodic appeal; in practice, its shortcomings are thrown into relief. Josh Sternberg of Mediaite.com, who visited the protest on Wednesday, noted:

"As of now, it's a haphazard process, as there's no leadership, no message. Nothing but a group of a few hundred people – and of that group, I saw about 10 to 15 actually take charge of something – trying to figure out what they're doing."

In addition to underscoring the folly of the current fascination with the "leaderless" protest, this illustrates the more general problem with the impulse on the American left to be "doing something" – without necessarily much idea of what that should be. We may be looking at what Liza Featherstone, Doug Henwood and Christian Parenti aptly termed "activistism" in their 2002 essay, "Action Will Be Taken":

"This brave new ideology combines the political illiteracy of hyper-mediated American culture with all the moral zeal of a 19th-century temperance crusade. In this worldview, all roads lead to more activism and more activists. And the one who acts is righteous.

"The activistists seem to borrow their philosophy from the factory boss in a Heinrich Böll short story who greets his employees each morning with the exhortation 'Let's have some action.' To which the workers obediently reply: 'Action will be taken!'"

Where, to their credit, the Wall Street occupiers differ from the "activistists" described by Featherstone et al is in their attempt to think of change in much broader, systemic terms – as muddled as their demands may be. But what they have in common with "activistism" is a misunderstanding of the relationship of the movement to the demonstration.

The parallels being drawn by protesters and some of the media between Occupy Wall Street and the Tahrir Square uprising in Egypt that began early this year are revealing. As Patrick Glennon writes for In These Times:

"The activists behind Occupy Wall Street hope to emulate the success of Tahrir Square, which was an integral force in the dethroning of former Egyptian President Hosni Mubarak last February. In Cairo's case, the occupied square became the most compelling symbol of the country's spontaneous rebellion against its autocratic leader."

But just what is the parallel here? It seems more stylistic and rhetorical than anything else. After all, we now know the uprising in Egypt to have been anything but spontaneous. "Spontaneous" is a label frequently applied by the media to describe insurgencies that to them appear to have come out of nowhere. In fact, the circulation among Egyptian protestors of a 26-page leaflet providing a blueprint for action suggests a great deal of foresight and preparation by organisers. As Robert Dreyfuss of the Nation wrote:

"Contrary to some media reports, which have portrayed the upsurge in Egypt as a leaderless rebellion, a fairly well-organised movement is emerging to take charge, comprising students, labor activists, lawyers, a network of intellectuals, Egypt's Islamists, a handful of political parties and miscellaneous advocates for 'change'."

Which brings us to my central point: what is the purpose of protest? As history shows, protests can certainly be effective in winning concessions from those in power, but only to the extent that they are representative of broader movements. When it is effective, protest itself is little more than the public expression of a major social mobilisation already organised.

In all probability, Occupy Wall Street will achieve no measurable political change; the best-case scenario for participants is that they will leave Wall Street with wind in their sails. The scope has already widened as plans emerge for similar protests in cities like Boston and Los Angeles. These protests, though, will continue to draw from a relatively narrow pool of self-selecting participants. And without any clear definition of goals or constituency, without organisation of a leadership structure or an attempt to form coalitions with established movements, they are likely to skew towards a voluntaristic politics of "witness-bearing". The endorsement that protesters received Thursday from the New York Transit Workers Union is a major step in the right direction, but without more support and links like this, they risk remaining isolated from the broad class-based movement that is needed to alter the shape of the American political and economic terrain – a movement that can unite the 99% against the 1%, to use their supporters' formulation.

The advent of "hashtag activism" has been greeted with breathless claims about the birth of a new form of technology-based social movement. While such technologies can be extremely useful tools, they do not represent alternatives to the exhausting, age-old work of meeting people where they are, hearing their concerns, reaching common ground, building trust and convincing them that it is in their interests to act politically to change their circumstances. There are no shortcuts here; or to put it another way, it's not the protests that matter, but what happens in the time in between.

Michael Moore On Occupy Wall Street: We’re The Majority, ‘Never Forget That’

by Alex Alvarez | 9:21 pm, September 28th, 2011

Filmmaker Michael Moore, who continues his vigil at the ongoing Occupy Wall Street protest in lower Manhattan, dropped in on The Last Word to let host Lawrence O’Donnell know how things are going.

Moore kicked things off by giving a synopsis of what the protest is not about:

We’re not down here to support Senate bill 2567. We’re beyond that. They had their chance a long time ago to try and fix this. They didn’t fix it because they’re in the pocket of these people down here on Wall Street. So this is not about supporting some piece of legislation or “let’s get behind some politician.”

“It’s not about ‘policy wonkness’ or ‘Beltway bullshit,’” he continued, to the delighted soundless clapping of those around him. He also noted that he cannot believe he lives in a country where people on Wall Street haven’t had to face a single arrest while 100 peaceful protesters are arrested.

“Well, you live in a country where that kind of thing has to be protested and is being protested,” offered O’Donnell. He then turned the conversation over to a question he’d received on Twitter — a question that many have had since the protest’s inception: “I wonder if mmoore could articulate some specific, tangible goals 4 this protest, as I’ve yet 2 hear any & really would like to.” Indeed, @leenie909!

Moore said that this protest is unlike others because “there’s no membership form, there’s no one person who comes in here and says ‘Now this is our agenda and this is the way it ought to be!”

He also added that there were a whole variety of Americans participating (even “Ron Paul people”), and that they had strength in numbers:

This is our country. We’re the majority. The majority. We’re the majority. Never forget that, that the people who work for a living in this country, we are the people. Not the people up here who are taking people’s pensions and their bank accounts and ruining it and destroying their lives. They are not running this country anymore. They think they are, but that’s gonna come to an end right now.”

Thursday, September 22, 2011

Why 'Occupy Wall Street' makes sense

Banks are sitting on cash hoards and corporate profits are riding high – yet ordinary US taxpayers face joblessness and cuts

o Amy Goodman

o guardian.co.uk, Wednesday 21 September 2011 10.15 EDT

If 2,000 Tea Party activists descended on Wall Street, you would probably have an equal number of reporters there covering them. Yet 2,000 people did occupy Wall Street last Saturday. They weren't carrying the banner of the Tea Party, the Gadsden flag with its coiled snake and the threat "Don't Tread on Me". Yet their message was clear: "We are the 99% that will no longer tolerate the greed and corruption of the 1%." They were there, mostly young, protesting the virtually unregulated speculation of Wall Street that caused the global financial meltdown.

One of New York's better-known billionaires, Mayor Michael Bloomberg, commented on the protests: "You have a lot of kids graduating college, can't find jobs. That's what happened in Cairo. That's what happened in Madrid. You don't want those kinds of riots here."

Riots? Is that really what the Arab Spring and the European protests are about?

Perhaps to the chagrin of Mayor Bloomberg, that is exactly what inspired many who occupied Wall Street. In its most recent communique, the Wall Street protest umbrella group said:

"On Saturday we held a general assembly, two thousand strong. … By 8pm on Monday we still held the plaza, despite constant police presence. … We are building the world that we want to see, based on human need and sustainability, not corporate greed."

Speaking of the Tea Party, Texas Governor Rick Perry has caused a continuous fracas in the Republican presidential debates with his declaration that the US's revered social security system is a "Ponzi scheme" Charles Ponzi was the con artist who swindled thousands in 1920 with a fraudulent promise for high returns on investments. A typical Ponzi scheme involves taking money from investors, then paying them off with money taken from new investors, rather than paying them from actual earnings. Social security is actually solvent, with a trust fund of more than $2.6tn. The real Ponzi scheme threatening the US public is the voracious greed of Wall Street banks.

I interviewed one of the "Occupy Wall Street" protest organisers. David Graeber teaches at Goldsmiths, University of London, and has authored several books – most recently, Debt: The First 5,000 Years. Graeber points out that, in the midst of the financial crash of 2008, enormous debts between banks were renegotiated. Yet only a fraction of troubled mortgages have gotten the same treatment. He said:

"Debts between the very wealthy or between governments can always be renegotiated and always have been throughout world history. … It's when you have debts owed by the poor to the rich that suddenly debts become a sacred obligation, more important than anything else. The idea of renegotiating them becomes unthinkable."

President Barack Obama has proposed a jobs plan and further efforts to reduce the deficit. One is a so-called millionaire's tax, endorsed by billionaire Obama supporter Warren Buffett. The Republicans call the proposed tax "class warfare". Graeber commented:

"For the last 30 years, we've seen a political battle being waged by the super-rich against everyone else, and this is the latest move in the shadow dance, which is completely dysfunctional economically and politically. It's the reason why young people have just abandoned any thought of appealing to politicians. We all know what's going to happen. The tax proposals are a sort of mock populist gesture, which everyone knows will be shot down. What will actually probably happen would be more cuts to social services."

Outside in the cold Tuesday morning, the demonstrators continued their fourth day of the protest with a march amidst a heavy police presence and the ringing of an opening bell at 9.30am for a "people's exchange", just as the opening bell of the New York Stock Exchange is rung. While the bankers remained secure in their bailed-out banks, outside, the police began arresting protesters. In a just world, with a just economy, we have to wonder: who would be out in the cold? Who would be getting arrested?

• Denis Moynihan contributed research to this column

Why 2,000 People Needed to Occupy Wall Street: Banks Are Raking in Profits While Taxpayers Are Getting Screwed

Banks are sitting on cash hoards and corporate profits are riding high -- yet ordinary US taxpayers face joblessness and cuts.

September 21, 2011 |

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Riots? Is that really what the Arab Spring and the European protests are about?

Perhaps to the chagrin of Mayor Bloomberg, that is exactly what inspired many who occupied Wall Street. In its most recent communique, the Wall Street protestumbrella group said:

"On Saturday we held a general assembly, two thousand strong. … By 8pm on Monday we still held the plaza, despite constant police presence. … We are building the world that we want to see, based on human need and sustainability, not corporate greed."

Speaking of the Tea Party, Texas GovernorRick Perry has caused a continuous fracas in the Republican presidential debates with his declaration that the US's revered social security system is a "Ponzi scheme" Charles Ponzi was the con artist who swindled thousands in 1920 with a fraudulent promise for high returns on investments. A typical Ponzi scheme involves taking money from investors, then paying them off with money taken from new investors, rather than paying them from actual earnings. Social security is actually solvent, with a trust fund of more than $2.6tn. The real Ponzi scheme threatening the US public is the voracious greed of Wall Street banks.

"Debts between the very wealthy or between governments can always be renegotiated and always have been throughout world history. … It's when you have debts owed by the poor to the rich that suddenly debts become a sacred obligation, more important than anything else. The idea of renegotiating them becomes unthinkable."

"For the last 30 years, we've seen a political battle being waged by the super-rich against everyone else, and this is the latest move in the shadow dance, which is completely dysfunctional economically and politically. It's the reason why young people have just abandoned any thought of appealing to politicians. We all know what's going to happen. The tax proposals are a sort of mock populist gesture, which everyone knows will be shot down. What will actually probably happen would be more cuts to social services."

Denis Moynihan contributed research to this column.

Amy Goodman is the host of the nationally syndicated radio news program, Democracy Now!.