THE ABNORMAL NEW NORMAL
THE
ABNORMAL NEW NORMAL
by Norman Spinrad
(a presidential platform for a non-existent campaign)
“Things are more
like they are now than they ever have been before.”
--Dwight Eisenhower
“They wrote the biggest
rubber check in history and passed it off on themselves.
---Norman Spinrad,
GREENHOUSE SUMMER
What supposedly began in 2008 and was or still is so-called “Great
Recession” was or still is not primarily a recession nor did it begin with the
fiscal crash of 2008. One might trace it
back to the post-World War II reaction to the New Deal, one might trace it back
to the invention of the steam engine and the resultant Industrial Revolution,
but to arbitrarily bring the beginning of what is now being called “The New
Normal” down to a single event that occurred within the lifetime of many
Americans now living and suffering the not very indirect consequences, begin
with the air traffic controllers’ strike of 1981 and the resulting demolishment
of the Professional Air Traffic
Controllers Organization by the administration of Ronald Reagan.
Air
traffic controllers were civil service workers and therefore their union,
PATCO, was legally forbidden to strike.
But it struck anyway, for the usual improvement in pay and benefits, but
also demanding to be freed from the status of civil service workers so that
their union would in the future not be legally forbidden to strike.
Reagan
gave the air traffic controllers 48 hours to go back to work, and when they
didn’t obey his order, fired over 11,000 of them, banned them from federal jobs
for life, hired scabs to replace them, and had the union decertified.
I
was living in New York, but at the time the strike was called I was in Los
Angeles on business and preparing to fly home. I grew up in an extended family
with union connections and I had been taught from an early age that ladies and
gentlemen do not cross picket lines unless they have damn good reasons. I also did not need to be told that flying
across the country when the air traffic controllers had been replaced by
questionably qualified scabs might not really be too swift and idea for less
idealistic reasons.
Still,
I really wanted to get home, so I called Gene Roddenberry, who had been an
airline pilot, and asked him whether he would fly as an airline passenger under
such conditions, and got the answer that was not exactly unexpected, which was
“No way!”
Not
just the expected answer, but the welcomed answer, because I knew damn well
what was at stake here, that it really had to trump my desire to get home, and
I wanted my self-interest in personal safety to back up what I knew would have
to be the politically necessary decision.
Because
I knew that if Reagan got away with such a blatant piece of union busting, one
that also blatantly endangered airline passengers who screwed up their courage
to fly with quickly scooped up scab labor running the national air traffic
control system, it would only be the opening round of a campaign to break the
American labor movement as a whole.
You
didn’t need to be a strategic genius to know that the only way to defeat this
union-breaking Pearl Harbor attack would be for the AFL-CIO to call a general
strike. One of my family union connections was Jerry Wurf, President of the
America Federation of State, County and Municipal Employees, another union many
of whose locals were legally prohibited from striking. But that didn’t prevent Wurf from calling
strikes anyway, because the first non-negotiable demand was always that there
would be no negotiations about anything else, including ending the strike,
until it was agreed that the union would be held blameless for striking
illegally.
Why
didn’t the AFL-CIO do likewise? Call a
general strike and set up picket-lines that the Teamsters wouldn’t cross,
meaning no truck deliveries to airports or airport support facilities, until
Reagan re-certified PATCO, fired the scabs, forgave the strike, and negotiated
settlement terms with the union like a civilized employer. A display of union power instead of union
impotence.
Well
for one thing, George Meany, a hard-core son of a bitch who might have had the
brass balls to do it, was no longer the President of the AFL-CIO, Lane Kirkland
was, and he didn’t.
And
for another, the Teamsters had been thrown out of the AFL-CIO for various more
or less good reasons, and could not be counted on to support such a strike.
And
the clincher was that PATCO had been just about the only major labor union that
had supported their current destroyer Ronald Reagan in the 1980
presidential election, leaving them out there all alone, and the Gipper knew it,
hah, hah, hah.
The
rest of this sad story is the long downward slide of the American labor
movement into its caponized near-irrelevance in the New Normal in which we find
ourselves today.
#
In
simplified terms, the Republican Party began as a maverick third party that
elected Abraham Lincoln and then became the dominant party for decades, thanks
to the secession of the Confederate states and their temporary
disenfranchisement during Reconstruction and the champion of the freed
enfranchised former Southern slaves, while the Democrats became the party of
the reactionary white South and a minority elsewhere.
But
this isn’t the whole story, since the schism between the Northern Union free
states and the Southern slave states that precipitated the Civil War had an
economic aspect too. The more agrarian Southern economy was heavily dependent
on cotton plantations which were dependent on slave labor, and the more industrial Northern economy was not. So during the decades of Republican political
domination, as the American economy became more and more industrialized, the
party of Lincoln stepwise metamorphosed into the party of industrial and
financial interest, and during the same period, to some extent by default, the
less powerful Democratic party came to largely represent a coalition of
Southern white reactionaries, family and small scale farmers, and industrial
workers whose natural self-interest conflicted with that of the owners of the
banks and factories.
If
this sounds as if the party of Lincoln became the party of the upper economic
classes, that is exactly what happened. The Republican party, which had
begun as a radical party, became the party of economic conservatism,
representing the class self-interest of those benefiting from the economic
status quo, namely what the French call the “rentier class,” those who don’t
have to work for a living because they own things that make their money for
them, otherwise known as the rich.
Nor
was this really democratically illegitimate. Any democratic state is going to
end up with a party to represent such self-interest, and in good times it might
be able to command an electoral majority as long as such so-called trickle-down
economics allowed the good times to continue to roll.
But
of course no party can win elections by openly admitted that it is the
political champion of the self-interest of the rich minority. So the
Republicans did their rather successful best to mask this simple and
democratically legitimate but politically poisonous truth by declaring that
America is a “classless society” and “class self-interest” an “un-American”
concept synonymous with Godless Atheistic Communism. By thus demonizing the Democrats as akin to
socialists and socialists as akin to anarchists and anarchists as nihilistic
terrorists, the Republicans managed to win the majority of presidential
elections and dominate most Congresses until the economic shit hit the fan in
1929.
In
Germany, the economic collapse and mass unemployment destroyed the liberal
democratic Weimar Republic and ended up electing the Nazis, a racist,
dictatorial, chauvinistic party to be sure, but one whose full name was the
National Socialist Party, and not a true conservative party in economic terms.
In
the United States, this dire crisis in conservative economic capitalism
discredited not liberal democracy but the politically bankrupt economically
conservative Republican Party which had presided over the catastrophe, and
perhaps to a large extent at first merely by default, elected Franklin
Roosevelt and Democrats.
Roosevelt
was no socialist and the Democrats were not a socialist party, but the New
Deal, with its government-financed Works Project Administration employment
projects, its Social Security and Unemployment Insurance, farm subsidies,
support for unions, graduated income tax, and so forth, was indeed a liberal
democratic revolution that saved the American market economy from its own
self-destructive excesses, kept the presidency in Democratic hands for an
unbroken 20 years, and maintained a Congressional majority almost unbroken for
the same length of time.
After
these 20 years in the the political wilderness, the Republicans were so
marginalized that the only way they could finally win an election was to
nominate Dwight Eisenhower for President, a war hero so popular and so
politically neutral that there was speculation he might run as a Democrat
instead. Moreover, for much of his eight
years as President, Eisenhower confronted, and that was not exactly the correct
term, a Democratic Congress, and when his Vice President, Richard Nixon, ran to
succeed him, he lost to the Democrat John Kennedy.
When
Kennedy was killed, and Lyndon Johnson became President, he rammed the Civil
Rights Act through Congress, even though he openly admitted that it was going
to cost the Democratic party the so-called “Solid South” for at least an entire
generation. Which it did. But even so, Johnson was re-elected over
Barry Goldwater by a landslide.
The
Republican party was dead in the water or so it seemed. But the Viet Nam War, the Counterculture of
the 1960s, and the ruthless pragmatic cynicism of Richard Nixon saved it from
the tarpits. The Republican party had
been incapable of winning an election on its economic policies at least since
Herbert Hoover and its stock in trade, ala Joe McCarthy, had been to run
against commies, pinkos, and the Soviet Union, to pretty indifferent
results.
The
Viet Nam War and the rise of the Counterculture split the Democratic Party
between its center wing and its left
wing, the center being led by Johnson, and the left being led by Eugene
McCarthy and Robert Kennedy, presuming to challenge a sitting president of
their own party in the primaries in 1968 as well as each other. When Johnson pulled out of the race and Bobby
Kennedy was assassinated, the Democratic nomination came down to a contest
between Johnson’s Vice President, Hubert Humphrey, a one-time passionate
liberal constrained to support a war and a cultural conservatism he really
didn’t believe in, and McCarthy, the fair-haired boy of the moderate
Countercultural left who had no chance of being nominated and less of being
elected.
Humphrey
was still an economic liberal and the Republicans still the party of the class
self-interest of the economic power elite, but Nixon and his Vice Presidential
running mate and hatchetman, Spiro Agnew, made sure that the election of 1968
was contested on non-economic grounds.
As for the last 36 years or so, in order to win a national election, the
Republicans had to get voters to vote against their own economic self-interest
and this time they didn’t have a neutral war hero to do it with, they only had
Tricky Dick.
But
Dick proved tricky enough. And down and
dirty enough. Really down and really
dirty. Nixon and Agnew anointed
themselves and the Republican party the cultural warriors of the so-called
“Silent Majority” which they invented for the purpose and which, riled up
against one set of racial and/or cultural boogey men or another, has been the
demographic electoral base of the Republican party ever since.
You
are the majority. You are the only true
red, white, and blue Americans. Or rather we are. Because we Republicans are your only true
champions. We are the majority. We had
damn well better be because those who aren’t with us are against us and those
who are against us are the are evil enemies of the American Way of Life, so a
vote for them is a vote against ourselves.
The
party of the established economic power structures and the just plain rich
pandered to Bible Belt religious fundamentalists, cultural reactionaries,
closeted and not so closeted racists, and in general paranoid fear of whoever
they could brand as the Other in order to con such folks into voting against
their own economic self-interest.
In
1968 and 1972 and some distance beyond, it was hippies, New Left pinko
peaceniks, Godless Atheistic Whatevers, Sex, Drugs, and Rock and Roll, and,
well, in certain Southern quarters, uppitty niggers. In 2004, thanks to Osama bin Laden, it became
ragheads, and has been ever since. Plus
right-of-choice fetus murderers, wetback illegal immigrants, gays and their
right to gay marriage sympathizers, the Federal government itself, the UN’s
Black Helicopters, and the aliens in Hanger 51.
In
Weimar Germany, the economic powers that be made a deal with an anti-Communist
National Socialist Party and a nutcase named Adolph Hitler, who they were
confident they could control as the puppet masters.
But
the lunatics took over the asylum.
Welcome
to the Third Reich.
In
the United States, the Republican party economic puppet masters made a deal
with the paranoid right that in the 19th Century were known as the Know
Nothings in order to win elections.
The
lunatics do have a tendency to take over the asylum, now don’t they?
Welcome
to the Republican Mad Tea Party.
Welcome
to the House of Representatives.
Welcome
to the Congress of the United States.
#
The
Great Depression of the 1930s was the result of the bursting of a stock market
bubble, the resulting banking system crisis--the failure of out-of-control and
largely unregulated rapacious capitalism that screwed up the real market
economy and resulted in mass unemployment, which reduced demand because
consumers found themselves with less and less money, which reduced demand in a
downward spiral that fed on itself.
The
Great Recession which started in 2008 was the result of the bursting of a real
estate bubble, resulting in a bank system crisis which was only prevented from
become a failure of the largely deregulated banking system as a whole by loans
of taxpayer dollars, and in huge drops in homeowners’ wealth, which caused big
drops in consumer demand, which caused massive unemployment, which caused more
drop in demand, in a downward spiral that fed on itself.
Sounds
familiar? Plus ca change, plus la meme chose?
Or
not.
Because
the conditions into which the Great Recession was born were decades of change
different from those of the Great Depression that began in 1929. True, the deregulation of the banking system
emulated the lax regulation of the pre-New Deal era. But the concept of so-called “collateralized
debt obligations” that triggered the Great Recession did not exist in
1929. Nor did the bloated growth of the
virtual casino economy at the expense of the real productive economy resulting
in the extreme difference in wealth and income between the famous 1% and the
dwindling middle class.
Banks
indiscriminately wrote huge amounts of dodgy mortgages to people without the
income to keep paying the monthlies, many of them, if not the majority,
interest-only with big balloon payments due at the end of a short fixed period
the collection of which would be even more problematic.
They
did this to bundle them into derivative bonds called collateralized debt
obligations, which with the collusion of ratings agencies and certain
investment banks, hid the fact that the underlying debt obligations were the
financial and moral equivalent of gold-painted bricks and shares in the
Brooklyn Bridge, and palm them off on suckers who fancied themselves
sophisticated derivatives traders.
Yes,
the mortgage writers, the bundlers, investment banks, the hedge fund mavens,
the derivatives market, the rating agencies--the whole out of control virtual
casino economy based on nothing but bullshit and hot air and contributing
nothing to the real economy producing goods and services and therefore jobs and
consumer demand to purchase them, did indeed write the biggest rubber check in
history and pass it off on themselves.
The
Great Depression of the 1930s, with unemployment rates triple those at the peak
of the Great Recession, with a stock market crash that famously had wall street
mavens jumping out of windows, with no such thing as unemployment insurance,
Social Security, and so forth to cushion it at all, was such a catastrophe that
it could only result in one kind of
revolution or another, meaning a discontinuity, violent or not, democratic or
not, a Communist revolution which was a real fear at the time, a Fascist
revolution ala the replacement of the Weimar Republic by the Third Reich, or,
as fortunately happened, something like the New Deal.
The
New Deal was indeed a revolution.
Instead of a violent uprising against the powers that be who had created
the catastrophe, there was a democratic election which resulted in a landslide
victory by Franklin Roosevelt and Congressional Democrats. Instead of the overthrow of the market economy
by Marxist Communism, Fabian Socialism, or Fascist mercantilism, FDR, with an
overwhelming Congressional majority, rammed through a radical reform of the
American market economy and did much of it in the famous revolutionary 100
days.
Close
the banks temporarily to prevent further runs and the destruction of the
dollar. Massive deficit financed public
works programs to begin to sop up unemployment and increase consumer
demand. Farm subsides. Unemployment insurance. Social Security. A government that favored union power instead
of combating it. Redistributive tax
rates to shift income and wealth downward from the rich and into a growing
middle class.
Indeed
arguably creating the very mass American middle class that the so-called
Great Recession began the process of destroying. FDR was no flaming socialist but the wealthy
scion of a great establishment family.
FDR saved American capitalism and the American market economy from its
own greed and assholery by forging a social contract, a pragmatic deal, that
became the engine of the post World War II American economic prosperity, the
so-called “American Dream” which began to be dismantled by the Great Recession,
a crisis which is being morphed by the economic elite and power structure into
a permanent condition called “the New Normal.”
Roosevelt
and his New Deal took Rahm Emmanuel’s advice to “never waste a crisis” before
Emmanuel was even born to reform the American capitalist economy into something
capable of living long and prospering.
The uppercrust fools whose asses he was also saving hated FDR and the
New Deal for it, scarcely even able to utter his name, referring to their enemy
as “That Man.”
These
days, it’s the 1% & Co. who haven’t been wasting the crisis previously
known as the Great Recession to dismantle what’s left of the aptly-named New
Deal to return the economy to as close to the status quo ante as they can get,
only more so if they can manage it, A.K.A. “The New Normal.”
It
may seem as if the Congressional lunacy of cutting Federal spending while
unemployment is high and blocking a raise to the paltry Federal minimum wage of
$7.25 an hour, which at a full year’s full time employment won’t lift anyone
above the official poverty level, while the gap in terms of income and wealth
between the upper 1% and the remains of the middle class is growing rather than
diminishing, is the result of politically necessary pandering to the Tea Party
Know-Nothings on the part of the Republicans.
But
not if you follow the money.
If
one considers who is benefiting from the New Normal and who therefore wishes to
make it permanent, it begins to make cynical economic sense.
While
unemployment is high and wages are not only stagnant but have declined in
inflation-adjusted terms, while GNP growth is also stagnant and perpetually on
the edge of even dropping into negative territory, corporate profits are
sky-high, and the stock market is collectively feeling no pain.
Whether
one is paranoid enough to contend that this New Normal was deliberately created
or not, it’s easy enough to see that for the folks of the upper income bracket,
things are more like they are now than they have ever been since the advent of
the New Deal, thank you very much Ronald Reagan, George W. Bush, and the
fortunate crisis called “the Great Recession.”
The
social contract that the New Deal established between capital and labor,
between the rich and the mass middle class that it created out of the crisis of
the Great Depression which was the essence of the late lamented American Dream,
has been severely eroded if not destroyed.
The
caponization of the labor movement, high unemployment, and the option of
out-sourcing to low-wage countries thanks to “globalization” have driven down
American wages while increasing “productivity” and therefore profits--the
difference from what it costs to produce goods or services and what you can
sell them for. The lower tax rates on
capital gains than for earned income further engorges the slice of the pie
gobbled up by what the French call the “rentier” class, the people who don’t
actually have to work for a living.
If
that’s you, brother, the New Normal suits you just fine. You’re all right, Jack, now aren’t you?
In
the short run. Maybe even in the medium
run. However, as Malcolm X put it in a
difference context, sooner or later the chickens are going to come home to
roost. Because the New Normal has a
singularity at its core. In the long run
it won’t work because in absolute bottom line terms it simply can’t.
#
As
we all probably know, the prime directive of a market economy, A.K.A the Sacred
Bottom Line, is produce something as cheaply as you can and sell it for as much
as you can get, the result being profit.
Easy enough for anyone to understand in practice, but will it work in
theory?
No
it can’t.
Because
attaining the theoretic ultimate goal of the market economy, namely
making things for nothing and selling them for a ton of money, would destroy
it. If everything is produced by human
slave labor and/or robots, there aren’t going to be customers with the money to
buy what you produce for nothing.
In
absolute terms the prime directive of a market economy approaches a singularity
in the mathematics of the Sacred Bottom Line itself as a limit, an economic
black hole. If there are no labor
costs, unemployment is total, and there is no demand for what is produced. If the labor costs eat up too much of what
customers are willing to pay for anyone to make a profit, nothing will be
produced.
There
has to be a balance between those who make their living by working for it and
those who make their living on profit because the former are the main customers
of the latter. Without it a market
economy will either collapse of its own contradictions or be overthrown by the
desperate impoverished majority.
To
work in the long run even for the rich and super-rich, a market economy must
have a large and relatively prosperous middle class. That’s what the New Deal
created, or arguably rescued, from the ruins of the Great Depression. The vast
majority of people must have enough
money to at least consume the goods and services that they produce or the
economy will slide down the black hole.
That
in essence is the unwritten social contract of the American Dream and what made
it economically viable. That is the real
economy. That is what made America great.
But that balance is what the New Normal is threatening. The real economy that both supports a
prosperous middle class and thereby creates demand for the goods and services
that it produces has become overshadowed and disrupted by a virtual economy, a
casino economy, that produces nothing of real economic and social value, an
economic vampire bat that produces nothing but profit for itself.
Time
was, banks made money by getting deposits and making loans, the spread between
the interest they paid on deposits and the interest they charged on loans less
overhead being their profit. Time was,
companies issued stocks to raise capital in order to create or expand
businesses, stock exchanges existed so that people could buy and sell these
certificates of partial ownership and stockbrokers made their money by agenting
this necessary commerce.
Obviously banks, stock exchanges, and
stockbrokers performed services that were essential to the functioning of the
real economy which could hardly exist without them. Perhaps a bit less obviously, commodities
future exchanges also served the real economy by allowing farmers to get
advances on crops not yet harvested in order to finance the planting and
growing. This virtual economy, virtual
because it did not actually produce goods or crops or provide direct services
to consumers, was necessary to the commerce, industry, and agriculture of the
real economy, did not dominate it, and was not really parasitic upon it.
No
longer. Not in the era of the New
Normal.
Time
was, not that long ago, when the business sections of major newspapers like the
New York Times and the Los Angeles Times carried pages and pages
of direct stock quotes. No longer. Time was, even more recently, namely before
the Clinton administration, savings and commercial banks that lived off deposits
and loans were separated from trading banks that lived off trading stocks,
bonds, and derivatives. No longer.
The
virtual economy began innocently enough to service the real economy but then
began to spread and grow like a tumor metastasizing out of control.
Mutual
funds seemed innocent enough. Instead of
investing in individual stocks yourself, you could buy and sell stocks in
mutual funds which bought and sold large baskets of stocks for you. Thus were born the first primitive
derivatives.
But
now business sections of newspapers devote more space to mutual fund prices
than they do to the prices of the underlying stocks. Now there are things called index funds to
invest in which simply buy the stocks aggregated in stock indexes like the Dow
Jones and the Standard and Poor 100. And funds which don’t even buy underlying
stocks but in effect place bets on their movements. Funds, investment banks,
hedge funds, and more shadowy nameless entities, which don’t trade in stock or
bonds, but in complex derivatives of derivatives, like well, uh, collateralized
debt obligations and even basketed derivatives thereof.
Welcome
to the derivative economy.
Welcome
to the casino economy.
Welcome
to the virtual economy.
A
virtual economy so complex that 40% of its trades are now made back in forth in
nanoseconds or fractions of nanoseconds by computers not only buying and
selling but placing and withdrawing buy and sell orders in nanoseconds to
manipulate prices. A virtual economy so
virtual and so vast that it somehow makes a daily worldwide trade total whose
dollar value is greater than the GDP of the whole planet!
How
can this be possible?
Perhaps
at least in part because the New Normal makes it necessary.
When
millions of people are out of work and millions more are being squeezed out of
the middle class by declining wages, salaries, and real estate values, and
climbing student loan and credit card debt, thus depressing consumer demand,
which in turn depresses production, which in turn depresses business investment
in increased productive capacity, what is the top 1% or even the top 10% going
to do with all that money?
Well
what else can you do with what’s left over after you’ve bought your fourth
mansion, third yacht, second private jet, and lifetime stash of caviar,
Champaign, and cocaine, but invest it in making more money?
In
a healthy economy, that could generally mean investing in manufacturing,
agriculture, or consumer services expanding and or innovating to meet rising
demand, which in turn either increased employment if that were possible, or
empowered a tight labor market to command higher wages and salaries, thus
increasing demand, and so forth in a so-called upward virtuous spiral.
But
in the New Normal economy all that excess moola which the rich, filthy and
otherwise, can’t dispose of buying goodies, and can’t rationally invest in
meeting growing demand that isn’t there, ends up funneled into the virtual
economy of derivatives, derivatives of derivatives--a casino economy, where the
house is exponentially devolving into a literally mindless cabal of nanosecond
artificial intelligences gambling against against each other.
You
are saying that this can’t possibly continue forever? You are saying that sooner or later there has
to be a 1929 on electronically amplified steroids?
You
are saying that what I have just described is an economic singularity with its
ever ballooning greedy mouth opening up an ever widening black hole to sooner
or later gobble up the capitalist market economy in its entirety? You are saying that this is not Marxist dogma
but game theory inevitability run through the simple mathematics of the Sacred
Bottom Line?
Say
hello to the Abnormal New Normal.
Soon
or later, one way or another, you’re going to have to wave it goodbye.
#
“It’s
better to light a single candle than to curse the darkness.”
Mostly
attributed to John F. Kennedy, but sometimes, karmically appropriately, to
Eleanor Roosevelt. So since I don’t
really see anyone in Congress or the White House, or even in the mainstream
pundit parlor, doing much to suggest a way out of this Abnormal New Normal,
this black hole of a bummer, it seems I ought to at least give it the old
college try.
Not
so difficult in theory, but could it be done in political practice?
Not
so easy, because, like the New Deal, it wouldn’t just require a
revolution, it would have to be a revolution, because one way or
another, democratic or not, peaceful or violent, there’s no way out without
one. Because the Abnormal New Normal is
a singularity, an economic paradigm that isn’t merely not working, but can’t
work, a logical black hole that can’t just be modified but must be
replaced.
Just
what do I mean by a revolution? In the terms I’m using here, any revolution
is a paradigm shift, a discontinuity between one political, social, and
economic order and another that supercedes it.
It can, and perhaps most often is, a violent discontinuity like the
American Revolution or the Russian Revolution, but it doesn’t have to be. It can replace one constitutional framework
with another, but it doesn’t have to be that either, it can be accomplished at
the ballot box within the context of an existing constitution, like the New
Deal, or for that matter, in negative terms, the Abnormal New Normal itself.
But
you just can’t have a revolution without winners and losers, at least in the
short run. And that is what has to happen to rescue the American economy from
the Abnormal New Normal.
So
called “Monetarism,” the economic dogma that small changes in inflation rates,
interests and debt figures can leverage large changes in the real economy may
be true, but if it is, the reverse has to be true too, namely that you have to
screw up the real economy big time in order to effect such small changes in the
accountancy of the virtual economy, as the globalized version of the Abnormal
New Normal has disastrously done.
Tinkering
with less fiscal austerity, inflation
and interest rates, more government spending, and so forth may ameliorate
transitory economic recessions, but cannot resolve the existential flaw in the
system itself.
Which
is that the income and wealth of the dwindling middle class, which uses most of
its income to buy goods and services, has been shrinking, which reduces demand,
which reduces investment in increasing production, which reduces employment,
and innovation, and channels the surplus income of the already rich and
super-rich into the virtual casino economy where all it does is make the rich
richer.
So
what a revolution must accomplish is to shift income and wealth not so much
from the greedy to the needy but from the greedy to regrowing a demographically
and economically dominant middle class.
Which will increase demand. Which
will increase production. Which will
increase employment. Which will further
increase demand. Which will grow the
overall economy and therefore in the end even rescue the rentier class from its
own eventually self-destructive excessive greed.
In
theory at least, doing this does not exactly require Nobel level economic
rocket science.
Raise
and extend the scope of the Federal minimum wage so that any regular
full-time employment will raise income to say 120% above the poverty level and
index it to keep it that way.
Eliminate
the favorable tax rate for capital gains, tax all income equally but allow
income averaging. Raise the upper income
tax brackets a bit and lower the income tax rates on the middle class modestly.
Make
it illegal for an entity loaning funds to sell the debt to any other entity
without the expressed written consent of the debtor. Make nanosecond computerized trading in
stocks, bonds, derivatives, and anything else illegal.
Reinstate
the separation between banks that make their profits on the spread between loan
interest rates and deposit interest rates and “investment banks” that play in
the virtual casino markets.
Appoint
a Secretary of Labor who comes from the labor movement as a statement of which
side the government now is on, supporting the health of unions, and encouraging
the extension of unionization to low wage jobs currently without it.
Replace
unemployment insurance and welfare with a guaranteed minimum income for all
Americans as suggested with the moniker of a “negative income tax” by that
notorious pinko Richard M. Nixon. This
would not only save a lot of money by simplifying the machinery, no one’s
unemployment insurance would ever run out, no one would want to stay on welfare
who didn’t have to because welfare as a hand-out would be replaced by a
guaranteed annual income, and part-time work would be subsidized.
Everyone
would be guaranteed the same minimum income protection and those making large
salaries or high wages could always buy supplemental unemployment insurance if
they wanted to, just as one may choose to supplement Medicare now, creating a
new business for private enterprise.
These
glaringly just and glaringly obvious steps would not turn the Abnormal Normal
into a utopian Big Rock Candy Mountain.
They would not eliminate the economic stratification of American society
and turn it into a “classless society,” which would probably not be such a good
idea anyway. But they would turn
the downward economic spiral that the Abnormal New Normal has created into an
upward virtuous one.
Politically
impossible, you say?
Well,
given current politics, maybe it is. But
sooner or later either a revolution like it is going to happen within the
current democratic system, flawed and corrupted as it may be, or the
singularity towards which the Abnormal New Normal is careening will be reached,
the shit will hit the fan big time, and there will be a paradigm shift
without any guarantees that being caught in that one will be anyone’s
idea of a Rose Garden.
The
failed Weimar Republic, after all, was not replaced by an enlightened free
market utopia or worker’s paradise but by the Third Reich.
The
perfect is the enemy of the good.
And
the only justice there is, economic or otherwise, is the justice that we make.
end
I would add that any company or economic sector which wanted to still be anti-union would be required by law to make ALL employees a stock and VOTING shareholder in the current company they work for and with. Make the number of shares fairly divided among skill, tenure and seniority measures, and institute the Rule of Ten- where the lowest paid employees is not paid/given stock any less than one tenth (one seventh on non profits) the highest executive or board member...
ReplyDeleteExcellent analysis of recent economic history.
ReplyDeleteI have quoted one sentence in my blog, if that's all right with you; I believe all three of my readers need to see this article.
Another reason to emphasize the well-being of the working class, if the .1% get too easy a ride, they lose their edge, becoming easy meat for others.
ReplyDeleteNorman Spinrad, you are one of the few people remaining on the planet worth listening to. Your spot-on social commentary has permeated your novels since The Iron Dream, and your razor sharp perception is a breath of fresh air in a world full of ramblings of fools. Thank you.
ReplyDeleteThis is the most Complete explanation of the current status of the American Economy. Bernie Sanders is expressing this same scenario in his run for the President of the United States. Perhaps a few million people in the United states should read this. God Bless you Mr. Spinrad. Your are so right it isn't funny. Your book Russian Spring was a genius speculation on the exact issues we are facing today. You called it with the Berlin Wall coming down (Way before it did) and with the International Space Station. Now you are describing the BIG issue all Americans are facing with their future. The REVOLUTION is coming, lets watch and see.
ReplyDeleteVery astute. Bernie Sanders seems to be running on close to this platform.
ReplyDeleteThank you for everything, Norman Spinrad! Your work and thoughts are pure inspiration! Best wishes from Switzerland!
ReplyDeleteI've noticed that anyone who complains about "racism" simply hates Whites.
ReplyDeleteThanks for post.
ReplyDeleteVery informative post.
ReplyDeleteReally awesome
ReplyDeleteAnd the only justice there is, economic or otherwise, is the justice that we make.
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