Some (more) thoughts on Barack’s economic plan…

N. Gregory Mankiw

We have been thinking about some of the reasoning which goes into the Party of Washington’s approach to this crisis and what their approach says about you.

From what we can tell by our admittedly superficial reading of the most recent economic literature – we are not fans of economists and rate them on the food chain somewhere just above fungi and lawyers, and considerably below plankton – surprisingly, Barack and his economic team think their approach will work because you are most probably destitute, impoverished, lacking any significant means of subsistence – such as food and shelter – and all resources which might be used to acquire or produce those means – insolvent.

Of course, you don’t think of yourself this way: You likely hang that meaningless label on your social status, middle class, but, were you to lose your job today, in a matter of months you would be a resident of some homeless shelter, and subsisting entirely on charity.

Were you to receive a tax cut from Washington, you would likely blow it in a month or two.

Whatever increase in your income you receive from your paltry wages quickly gets spent on basic necessities of life, or, servicing the mountain of debt gathered as unpaid bills on your kitchen table.

While your more successful peers have worked diligently and honestly – adding to the wealth bequeathed to them by their millionaire grandparents (who acquired those means from their millionaire slave-owning grandparents – its wonderful what centuries of unpaid labor can do for a portfolio) – you can’t touch a dollar without immediately trying to spend it on the latest gadget – like food, cell phones or 42 inch, high-definition, wide screen, plasma televisions, which, interestingly enough, began rolling out just as Washington mandated digital television to replace the old analog system, and which new technology promises amazing video images of the best reruns cable has to offer.

You are, in a phrase, dirt poor, by any useful definition of that term. If you looked up the term, penniless uneducated fucking hillbilly, in a dictionary, the definition would not only include your picture, but also your social security number, address, and phone number.

In economic theory, the term, penniless uneducated fucking hillbilly, goes by the more obfuscating term, rule of thumb consumer – a concept introduced into economic literature in a paper N. Gregory Mankiw prepared for the American Economic Association, in January 2000.

Greg, citing earlier research, concluded:

If we exclude home equity on the grounds that it is not always liquid, the mean [net worth] for this group falls to a negative $10,600, indicating that debts such as credit cards balances exceed financial assets. Net worth is zero or negative for 18.5 percent of households; excluding home equity, the number of households in the red rises to 28.7 percent.

Stated in ordinary American, Greg concludes a good 28 percent of American families don’t have a pot to piss in, nor a window to throw it out. They, like you, probably, are devoid of any resources to survive the loss of their jobs, or the slightest reduction in their wages. And. like you, they stand on the edge of financial disaster, hoping the wind doesn’t blow the wrong way.

And, boy did the wind blow the wrong way in 2008: 2.6 million jobs lost and counting, manufacturing employment falling for 23 months in a row, even service jobs getting swallowed up in the financial implosion on Wall Street.

(We might note: Greg’s insight, significant as it is, did not so much add to the body of human knowledge , as it did simply concede to Karl Marx what he had asserted some 150 years ago, when he wrote that capitalism would produce a, “mass of propertyless workers – the utterly precarious position of labour – power on a mass scale cut off from capital or from even a limited satisfaction and, therefore, no longer merely temporarily deprived of work itself as a secure source of life…,” however, we might simply be accused of nitpicking.)

The upshot of Greg’s insight into you as an economic category, is that you are completely reliant on selling yourself into slavery in order to eat, and feed your family.

If your wages fell, you would likely respond by working harder, longer – even taking on a second or third job – and, it is pretty unlikely you would ever see a wage increase which would allow you to work less – you are tied to your job by the constant threat of starvation.

And, from what we can see, there is nothing which says you have to be completely penniless: just that you should be so relatively hard up that you might, for example, be inclined to work longer hours whenever the opportunity presented itself, or, when you hit that credit card to repair your transmission, or, are suddenly faced with balloon payments on your alt-A mortgage.

Washington knows this about you, and, they know they can pretty much manipulate economic events which compel you to work longer hours, for less pay, as you drown in debt.

Hence, when Barack declares,

And above all, I will ask you join in the work of remaking this nation the only way its been done in America for two-hundred and twenty-one years – block by block, brick by brick, calloused hand by calloused hand.

He knows he really doesn’t have to ask: it is not exactly like you have a choice in the matter.

Is serious left criticism of government’s share of GDP possible? (Paranoia Interlude)

Continued from here:

Called me paranoid, but when I read Steve Casey’s afore-mentioned passage:

As [then Secretary of State Dean] Acheson noted in one discussion on how to sell NSC-68, “speeches alone would not do it, that people read and heard what was said and then turned their attention to other matters.” What was vital was an incident, a crisis in one of the many flash points of the Cold War. Seen in this light, the start of the Korean War on June 24, 1950, was a godsend.

It immediately calls to mind another passage of more recent vintage:

Any serious effort at transformation must occur within the larger framework of U.S. national security strategy, military missions and defense budgets. The United States cannot simply declare a “strategic pause” while experimenting with new technologies and operational concepts. Nor can it choose to pursue a transformation strategy that would decouple American and allied interests. A transformation strategy that solely pursued capabilities for projecting force from the United States, for example, and sacrificed forward basing and presence, would be at odds with larger American policy goals and would trouble American allies.
Further, the process of transformation, even if it brings revolutionary change, is likely to be a long one, absent some catastrophic and catalyzing event – like a new Pearl Harbor. Domestic politics and industrial policy will shape the pace and content of transformation as much as the requirements of current missions.

If you are well read, you will note this latter quote is from the document, REBUILDING AMERICA’S DEFENSES: Strategy, Forces and Resources For a New Century.

It styled itself as “A Report of The Project for the New American Century,” and was published, September 2000.

One year later, the twin towers fell.

History repeats itself, first as tragedy, second as farce. — K. Marx

To be continued

Is serious left criticism of government’s share of GDP possible? (12)

Continued from here.

Pop quiz:

It’s 1950, you’re Harry S. Truman, thirty-third President of the United States, and new CEO of America Inc., and you want to prepare for a long Cold War.

So, you’re going to need a lot of stuff, like copper, steel, bauxite, petroleum, enriched uranium, etc., for both your immediate military needs and as stockpiles in case of actual conflict.

You’re also going to want to add lots of new soldiers, sailors, airmen, and marines, so you will need lots of stuff to intake, process, train, house, outfit, and feed kids just out of high school (who are not exactly born with enough common sense to know which end of a rifle to hold, and have appetites the size of a small African village.)

You will need a lot of new whiz bang flash boom stuff, preferably loaded on shiny new rockets, and in shiny new bombers, capable of striking deep into Soviet territory.

Finally, since that stuff requires a lot of different scientists, engineers, and English majors – just who do you think gets to be the office manager – you’ll need to add capacity at the nation’s colleges and
universities.

How much is all this stuff going to cost you?

Your choices are:

1. As much as a liberal Democrat can tax and spend during a lifetime of “public service!”
2. As much as a conservative Republican can borrow (from the Social Security Trust Fund, China and Japan) and spend during a lifetime of denouncing “Socialized Medicine!”
3. More money than God. So have the Treasury get out the printing presses now!

If you answered 1, 2, or 3, shame on you!

You weren’t paying attention.

If you think this is all about money, you’re engaging in magical thinking, and I can prove it.

Do this for me:

Take a hundred dollar bill from your wallet. (If you are so impoverished you don’t have a hundred dollar bill, a ten dollar bill will do.) Set it on the table in front of you. Now, tell it to change itself into one hundred dollars (or ten dollars) worth of enriched uranium.

What did it do?

If your money is like my money, very little – it just sort of…laid there in front of you, with the picture of some dead historical figure staring vacantly into the middle distance. Dollars are like that – pretty pathetic when it comes to transforming themselves into instruments of murderous outrage, or 42 inch wide screen, high definition plasma televisions.

That’s why money is called an inanimate object.

People, on the other hand, are constantly turning one thing into another – give them some steel, silicon, rubber, chobham armor, titanium, textiles, and depleted uranium, some classroom training, and, a little time and effort, and they will give you a fully functioning M1 Abrams tank squad.

The key thing here, of course, is that last bit – “a little time and effort.”

If you eventually want to make hundreds of M1 Abrams tank squads, it will take – I’m guessing here – hundreds of times more time and effort.

And, if you want to make all those tank squads, plus MIRVed ICBMs, SLBMs, stealth bombers, six or seven fleets of naval armadas, a fully functioning military satellite communications network, while fighting at least three major wars, countless little ones, and God knows how many mini incursions, commissioning Mafia-contracted hits on foreign leaders, as you construct a dense network of military outposts encircling the globe, well that just might take the time and effort of tens of millions of people with a lot of time they don’t need to spend making real shit.

*************************************

This is, more or less, what Leon Keyserling, told the real President Truman in 1950 – although, of course, being an economist, he so completely couches it in ‘economese’ that you may not at first notice he is actually proposing you, your parents, and your kids, and Americans in general, literally be forced to work an unnecessarily longer workweek for decades!

According to Sourcewatch, Keyserling became chairman of the Council of Economic Advisers (CEA) in 1950, under Truman’s administration.

He came to Truman’s attention because, with the country facing a deep recession in 1949:

Keyserling proposed a threefold increase in nonmilitary federal spending, basing this approach on his experience with the economics of World War II. Because the growth of federal spending during the war seemingly had validated the ideas put forward by John Maynard Keynes in his book The General Theory of Employment, Interest, and Money (1936)…

Perhaps it was just a coincidence, but, we are told, around this very time Paul Nitze, who had just been named Director of Policy Planning for the State Department, was looking for a way to fund an aggressive new containment policy  directed at the Soviet Union, and, as fortune would have it, ran into Leon on the golf course.

We made up the part about the golf course, but it does seem to be a strange intersection of history that brought these two men together – Nitze, who based on his experience as chief of the Metals and Minerals Branch of the Board of Economic Warfare, and then as director of the Foreign Procurement and Development Branch of the Foreign Economic Administration, both during World War II; and, Keyserling, who had helped write the draft version of the unconstitutional National Industrial Recovery Act – along with the heads of General Electric and the US Chamber of Commerce.

Uh…er.

Oh, yeah. That is probably not so strange after all – fascism was all the rage during this period, however much it became something of a scandal following the discovery of Auschwitz.

In any case, we are told:

Eventually Paul Nitze, head of policy planning for the State Department, began to look for an economic argument for a significant increase in cold war military spending. He and Keyserling cooperated on developing such an argument in a top-secret National Security Council memorandum, NSC-68.

Keyserling wrote an assessment of the economic impact of a long term military containment of the Soviet Union which stated in part massive military power could be achieved by simply maintaing and extending the social work day of Americans:

These broad estimates are based on the assumption that working hours and the proportion of the population drawn into the active labor force would increase considerably above recent levels, although not approaching the peaks of World War II. With greater increases in labor effort than assumed in these estimates, a substantially greater increase in total output could be achieved.

This could provide the basis for a greater military production even while still maintaining the consumption standards outlined above….Given a major labor effort over the next two years, and given a substantial investment in basic productive facilities, there can be no doubt that the force targets presented in the report could, from the standpoint of our manpower and other resources, be maintained indefinitely…

NSC-68 carried this idea one step further:

With a high level of economic activity, the United States could soon attain a gross national product of $300 billion per year, as was pointed out in the President’s Economic Report (January 1950). Progress in this direction would permit, and might itself be aided by, a build-up of the economic and military strength of the United States and the free world; furthermore, if a dynamic expansion of the economy were achieved, the necessary build-up could be accomplished without a decrease in the national standard of living because the required resources could be obtained by siphoning off a part of the annual increment in the gross national product.

So, from now on, when Barack Obama or John McCain – or any other politician in Washington – trumpets a plan for more economic growth, you will know the exact purpose of this growth – to make you and your family work longer hours to support aircraft carriers prowling the Indian Ocean.

This, in fact may be how you would like to spend your spare time, but at least you now know why.

Of course, highlighting the above, we probably will be accused of being hysterical, and silly – speaking of NSC-68 with conspiratorial overtone, and charaterizing the leaders of this country as men and women with with dark and malevolent intentions.

However, there is this very small point provided by Steven Casey, whose work we cited earlier:

As [then Secretary of State Dean] Acheson noted in one discussion on how to sell NSC-68, “speeches alone would not do it, that people read and heard what was said and then turned their attention to other matters.” What was vital was an incident, a crisis in one of the many flash points of the Cold War. Seen in this light, the start of the Korean War on June 24, 1950, was a godsend.

Indeed, as the Wiki explains:

While there was little support for this program in Congress and at the Defense Department, the Korean War, which broke out in June 1950, in effect put the military Keynesianism of NSC-68 to work.

The first year of the Korean War produced a surplus in the federal budget as previously unemployed wage earners went back to work and paid taxes. It also produced the Federal Reserve-Treasury Accord of March 1951, which returned the monetary policy of the Federal Reserve system to its pre-World War II activist role, despite Keyserling’s opposition. In contrast to the situation after World War II, there was little increase in the national debt or evidence of pent-up demand after the Korean War. In fact, prices fell after the removal of wartime price controls during the administration of Republican President Dwight Eisenhower.

NSC-68 was off and running.

To be continued

Is serious left criticism of government’s share of GDP possible? (11)

Continued from here:

Kennan’s Long Telegram was succeeded by an extended article, “The Sources of Soviet Conduct,” published, according to Wikipedia, in the July 1947 issue of Foreign Affairs. Kennan predicted the demise, and/or moderation of the Soviet Union, owing to a long accumulation of unresolved, and chronic internal problems – including badly unbalanced economic development, totalitarian methods of governance, and generational changes which would eventually have expression with the Communist Party structure itself.

His article was warmly received in the United States, and he became something of a celebrity in all the right circles. His celebrity status even showered notice on his daughter, who was in college at the time.

According to Wikipedia, “His oldest daughter Grace … recalls fellow students calling her ‘Miss X’ in college. ‘He went from a normal, nice father to the father who wrote the X article,’ recalls Grace. ‘It was a big shock to discover that my dad, who had been just my dad, suddenly became public property.’”

Kennan felt the United States could, with adequate determination, and subtle, sophisticated pressure, contain the Soviet Union until such time as its internal conflicts would lead to its demise, or, drastic change. His policy of containment, formed the over-arching objective for NSC-68.

But there, at least in Kennan’s view, the similarities ended.

Kennan long rejected association with policies of the Cold War that came to be connected with his advocacy of containment. According to Wikipedia, Kennan saw containment as a political and economic policy, involving, of course, such adoption of means as were exemplified by the Central Intelligence Agency, but also economic assistance to rebuild and stabilize friendly countries.

NSC-68 was not about creative diplomacy and black bag operations. It was a less a reflective contemplation of the character of the Soviet system than it was a militant call to arms which would have the practical effect not only of virtually ensuring decades of American-Soviet conflict, but would entail something that was unthinkable until then: permanent American military expansion powered by an equally expansionist economic policy.

The picture drawn of Soviet capabilities by the authors of NSC-68 was stark, terrifying, and graphically described:

In present circumstances the capabilities of the USSR to threaten U.S. security by the use of armed forces, are dangerous and immediate:

a. The USSR, while not capable of sustained and decisive direct military attack against U.S. territory or the Western Hemisphere, is capable of serious submarine warfare and of a limited number of one-way bomber sorties.

b. Present intelligence estimates attribute to Soviet armed forces the capability of overrunning in about six months all of Continental Europe and the Near East as far as Cairo, while simultaneously occupying important continental points in the Far East. Meanwhile, Great Britain could be subjected to severe air and missile bombardment.

c. Russian seizure of these areas would ultimately enhance the Soviet war potential, if

sufficient time were allowed and Soviet leaders were able to consolidate Russian control and to integrate Europe into the Soviet system, this would permit an eventual concentration of hostile power which would pose an unacceptable threat to the security of the United States.

In six months, according to the authors of NSC-68, the American democracy could be surrounded by a sea of Soviet puppet states threatening it from all sides. Worse, according to the authors:

… by no later than 1955 the USSR will probably be capable of serious air attacks against the United States with atomic, biological and chemical weapons, of more extensive submarine operations (including the launching of short-range guided missiles), and of airborne operations to seize advance bases.

These words were written against a backdrop of great upheaval in the immediate postwar period:

In India, Great Britain was watching its colonial system unravel under the persistent resolve of determined nationalists – as Britons drove the Winston Churchill government out of power. In short order, anti-colonial war erupted against all the colonial powers.

In France, Communists appeared poised on the verge of victory in national elections, with France mired in its Dirty War, in Vietnam.

And, in China, these ugly predictions came against the backdrop of the victory of the Chinese Communist Party over the forces of China’s Kuomintang Party – bringing the number of people under non-capitalist governance to more than a quarter of the human race.

Uncle Sam’s club was open, but it was quite unclear it would have any customers:

The USSR has already engaged the United States in a struggle for power. While it cannot be predicted with certainty whether, or when, the present political warfare will involve armed conllict, nevertheless there exists a continuing danger of war at any time.

To assure its security, the authors proposed the United States undertake a permanent expansion, “of military readiness which can be maintained as long as necessary as a deterrent to Soviet aggression, as indispensable support to our political attitude toward the USSR, as a source of encouragement to nations resisting Soviet political aggression, and as an adequate basis for immediate military commitments and for rapid mobilization should war prove unavoidable.“

Domestically, the government should, “Assure the internal security of the United States against dangers of sabotage, subversion, and espionage.“

The over-riding goal of economic policy was not to be assuring the improvement in the standard of living of Americans, but to, “Maximize our economic potential, including the strengthening of our peace-time economy and the establishment of essential reserves readily available in the event of war.“

Finally, the government would need to mount an aggressive propaganda campaign to, “Keep the U.S. public fully informed and cognizant of the threats to our national security so that it will be prepared to support the measures which we must accordingly adopt.“

Of course, in the fine print of the report was this disclaimer: “Soviet military capabilities as set forth in this paper, while constituting potential threats to U.S. security which must be recognized, do not represent an evaluated estimate of Soviet intentions to utilize these capabilities…“

In other words, “So far as we know, the Soviet Union has no intentions of doing any of the things we have outlined, but: BOO!“

Given our own experience in the course of the events leading to this present war in Iraq, however, this footnote is a chilling reminder of the lengths to which Washington deliberately embarked on a strategy of wrapping its adversaries up in the very cloth of its own intentions.

The parallel with the present war is both astonishing for its brazen regurgitation of the earlier arguments, and disappointing in their lack of originality.

To be continued

Is serious left criticism of government’s share of GDP possible? (10)

Continued from here:

To really understand National Security Council Report No. 68 (NSC-68 ) you have to understand something about yourself.

You are more or less educated, thoughtful, compassionate, empathetic, and humane.

At least, that is how you imagine yourself. That is how you want to be known. Those are the words you want on your gravestone.

But, we know better, don’t we?

We know, in fact, you are capricious, unstable, irresponsible, ignorant, untutored, incapable of understanding any concept which can’t be written on a bumper-sticker, volatile, apathetic, moody, hysterical, withdrawn, complacent, lethargic, superficial, over-reactive, violent, panicky, and. above all, dangerous to human beings and pets.

Yeah, like a book – like a god-damned book, we can read you!

Insulted?

Tough.

Because, that is just how the people who developed and enshrined NSC-68 as national policy saw you; and, since that policy has remained more or less in force for 60 years, it is pretty obvious they were on to something – they captured that thing in you so repulsive you cannot admit its existence to yourself.

In fact, every time you hear a Washington politician address, “My Fellow Americans,” that is to whom he is talking: an ignorant, uncultured nation of boobs, who can be led around by the nose, and ordered to jump through hoops on command.

Do you imagine I am lying about all this?

Prove me a liar: simply download, and read this document, by Steven Casey, which describes in detail how you are seen by Washington, and how, based on that analysis of your weak-minded personality, they created a campaign to have you foot the bill for an unlimited decades-long buildup of American military force, at the expense of your hopes and dreams, and those of your family.

According to Casey:

Inside the foreign-policy establishment there was a widely held conviction that the public’s ignorance about foreign-policy issues, rather than always leading to apathy, often resulted in volatile oscillations, as the popular mood shifted rapidly between complacency and hysteria, withdrawal and engagement…the popular mood was highly unstable, often characterized by “sudden shifts of interest or preference.” As Almond succinctly put it, “the superficiality and instability of public attitudes toward foreign affairs creates the danger of under- and over-reaction to changes in the world political situation.”

Because the popular mood was highly susceptible to such violent mood swings, leaders had tread carefully, tailoring their message to suit current conditions. On occasion, this might well entail overselling, perhaps even exaggerating the importance of an international incident, in order to jolt the populace out of its torpor. But at the same time, clear dangers lurked in going too far in this direction, for such activity might also create an overreaction, perhaps even sparking a widespread popular hysteria. As a result, the goal of any information campaign was to generate interest in times of apathy, but without creating a panic when the mood swiftly began to shift.

In short, they played you like a fine violin.

Just as the Moron has played you in our present conflicts, exaggerating the threat posed by cave dwellers in the most inhospitable regions of western Pakistan to make you surrender your most basic constitutional rights, and celebrate the slaughter of 1.2 million Iraqis and Afghans.

To continue:

Wikipedia has this to say about NSC-68:

NSC-68 or National Security Council Report 68 was a 58 page classified report issued April 14, 1950 during the presidency of Harry Truman. Written in the formative stages of the Cold War, it has become one of the classic historical documents of the Cold War. NSC-68 would shape government actions in the Cold War for the next 20 years and has subsequently been labeled its “blueprint.” Truman officially signed NSC-68 on September 30, 1950. It was declassified in 1977.

This document, which was withheld from you for 27 years, and basically ignored for the last 30, had a profound impact on your life, the lives of your parents, and grandparents, and the lives of your children, who, even as I am writing this, are adding to the mountain of Iraqi corpses steadily accumulating in the Garden of Eden.

Which is not to say, had you, or your parents, or your grandparents been aware of this document at the time, things would have turned out differently. At the time it was written, America was flush with triumphalist spirit – the Axis powers had been defeated, and the rest of the planet was laid waste with massive damage to the infrastructure, and governments of many nations. Aside from Pearl Harbor, however, the United States had suffered no damage on its territory.

Still, an estimated 70 percent of Americans were prepared to raise their own taxes to boost military spending!

The impetus behind NSC-68 was obvious: seventy-two million people were dead, and we were the only operating concern open for business. It was as if Hurricane Katrina had wiped out all of New Orleans, yet, spared all the Wal-Marts. People needed everything from bread, to diapers, to matches and cigarettes, and ‘Uncle Sam’s’ Club was the only place to get them.

Given that the United States had for years been devoting half of its output to war, and had withdrawn 12 million men in the prime of their productive working years for the same period and applied them to the task of generating huge numbers of corpses in such place as Dresden, Normandy, and Hiroshima, you might expect that, with the end of hostilities, Americans might be entitled to a ‘peace dividend’.

It might have been fair to expect that as much as 50 percent of the workweek could have been shaved off without causing undue economic dislocation.

But, there were all those people who needed bread, and diapers, and matches and cigarettes. And, it seems, they were willing to agree to just about any terms the Truman administration dictated to get them. Americans had the opportunity to gather all the poker chips from the table, and everyone seemed willing to let them do it, in return for easy credit.

That is, everyone except the Soviet Union, which, in the eyes of the Truman administration, wasn’t playing nice.

Curious at this obstinacy, the administration sent a series of questions to the American embassy in Moscow, and received a detailed reply by none other than George F. Kennan. That answer, the so-called, Long Telegram, described the Soviet Union as:

…a political force committed fanatically to the belief that with US there can be no permanent modus vivendi, that it is desirable and necessary that the internal harmony of our society be disrupted, our traditional way of life be destroyed, the international authority of our state be broken, if Soviet power is to be secure. This political force has complete power of disposition over energies of one of world’s greatest peoples and resources of world’s richest national territory, and is borne along by deep and powerful currents of Russian nationalism. In addition, it has an elaborate and far-flung apparatus for exertion of its influence in other countries, an apparatus of amazing flexibility and versatility, managed by people whose experience and skill in underground methods are presumably without parallel in history. Finally, it is seemingly inaccessible to considerations of reality in its basic reactions. For it, the vast fund of objective fact about human society is not, as with us, the measure against which outlook is constantly being tested and re-formed, but a grab bag from which individual items are selected arbitrarily and tendentiously to bolster an outlook already preconceived.”

Kennan drew a picture of Soviet Union as an ominously resource wealthy people who were fanatical, hostile, subversive, jingoistic, unreasonable, delusional, and unable to separate reality from their dogmas.

Now, if this characterization of the Russian poeple sounds familiar to you, it should.

It was pretty much how the authors of NSC-68 described you!

To be continued

The most dangerous animal on earth: a white guy with a necktie

Just as the Moron readies to depart, two former Secretaries of State propose to reduce his powers to wage war.

And, it only took 1.2 million dead in Iraq and Afghanistan to provoke them to work up their courage and statesmanship.

The problem here, as any discerning student of history will note, any resolution by Congress on this issue is a dead letter, since, no matter who is elected, the next President will still have 1.5 million service-members under arms, in five different services, stationed throughout the United States and its territories, and in at least 7 different countries, and, including 13 aircraft carriers, with 2 more in construction, and 2 more planned, 18 Ohio class nuclear ballistic missile submarines, and the considerable offensive nuclear capability to lay waste to most of mankind.

As Commander-in-Chief, the President is the exclusive elected branch given the authority to decide how, and to what end, these forces will be deployed, short of a declaration of war.

Nothing Congress enacts into law can limit his control of these forces, save dismantling them.

Having delivered the machinery of empire into the hands of the Presidency, Congress has found its own power to be the first casualty – it can, and must, be ignored; treated as a noisome, chattering mob, and dismissed.

Offered – and this is of more than passing astonishment – a seat as mere advisers to the Presidency.

In short, the Secretaries are full of shit.

Can we have some more?

Jared Bernstein, the Democratic Party’s left-wing economist darling is on a tear again.

To paraphrase Former Vice President Mondale, Jared has revealed that Republicans will spend you into the poor house, as quickly as the Democrats – the difference being the Republicans won’t admit it, while the Democrats will wear their profligacy as a badge of honor:

… all this conservative talk about cutting spending is just that: idle chatter. When push comes to shove and political forces are in play — and when aren’t they? — McCain will support most government spending as much as the next guy or gal. Conservatives from Bruce Bartlett to Larry Kudlow to Grover Norquist can caterwaul from here to eternity about “holding the line on spending,” but the phrase is meaningless. It all comes down to cases, and there will always be cases, like these two bills targeted at offsetting the current failures in housing and labor markets, that are worth supporting. And enough politicians will support them such that they become law.

Having exposed the most recent Republican about face on the issues of unemployment benefits and the mortgage meltdown, Jared goes on to point out direct government spending as a share of GDP has held virtually unchanged at about 20 percent since 1959.

Thus, voters should expect to ante up at current levels despite the outcome of the November presidential elections:

… there are big differences between the D’s and the R’s on the role of government. But barring a percentage point of GDP either way, the differences amount less to the level of spending and more to competence and fiscal stewardship.

For Jared, this is good news for two reasons: first, it makes the current scale of government spending appear as the natural cost of governing a large, complex, and sophisticated economy which is, nevertheless, prone to, “market failures,” like economic downturns and crashing housing markets.

Second, It make it possible for him to declare, “If anything, the pressing needs of the environment, public infrastructure, and health care suggest that share is likely to go up before it comes down.”

So we are left with this Hobbesian choice:

No matter who runs the show, there will be spending, and it will cost roughly the same to have good government or lousy government.

We want to state, at this point, we a completely in favor of, “good government” – whatever that is. It is likely that, “good government,” is preferable to, “lousy government,” – and, we note, for emphasis, it has the word, “good,” right in its name!

Lousy government – who wants that:

… given [the Republican] addiction to big tax cuts and war, a conservative government would also be an evermore indebted government.

Wait a darn minute Jared. (We just loved his use of the word, “damn,” in his post – its just so edgy!!!)

Isn’t Barack in favor of big tax cuts and an unchanged pace of military spending?

Okay, he is against the war in Iraq – thus far – but he is offering no change in the level of military spending, promises to “rebuild” military forces, and will continue to wage a war in Afghanistan.

And, neither he, nor John McCain, will touch the sacred obligation of repaying the holders of the public debt.

So, how is he going to do all this, AND, address the, “the pressing needs of the environment, public infrastructure, and health care,” AND, stop accumulating more public debt?

Jared has the answer:

… we live in a complex world, where markets can provide only partial solutions to the challenges we face. Market failures abound, and government will unquestionably be called upon to repair these failures. For years, we’ve elected politicians who’ve railed against this reality, pretending that they can refund that fifth of the economy that we spend on government –”it’s your money!”– and still provide the services we want and need. To put it mildly, it hasn’t worked. We’re spending the same share as ever, yet we’ve squandered years when we could have been making progress against the challenges of globalization, of environmental degradation, of deteriorating infrastructure, of economic inequality, of costly inefficiencies in health care.

That answer, in short form is this:

For the past 50 years, your government “squandered” 20 percent of GDP and still failed to address fundamental economic damage caused by market failures.

Can we have some more?

Is serious left criticism of government’s share of GDP possible? (9)

Continued from here.

This is the background for National Security Council Memorandum 68 (NSC-68):

The United States emerged from from World War II – in somewhat better economic shape than it went in.

(We will ignore, for the time being, that this failed attempt at collective race suicide resulted in the slaughter of 72 million persons – roughly 4 percent of the population of the belligerents.)

The Great Depression had receded into the background of American life with a vengeance. Gross Domestic Product is estimated to have nearly doubled during the war, entire industries, built from scratch, and, an almost innumerable list of scientific and technological breakthroughs had added productive capacity of the society.

By 1939, the industries of all major nations were operating full on in a desperate heat to increase their military capabilities against their rivals.

By 1942, every major nation, save France, produced more than it had in 1938.

By 1945, owing to the massive destruction imposed on the Axis powers – Germany, Italy, and Japan – the Allies had increased their GDP from twice to 5 times the former.

The global impact of this massive ramping up of industry was quite simply staggering by the standards of the time: nearly 5 million military trucks produced by all countries; nearly 1 million aircraft of all types; 51 million metric tons of merchant shipping; 193 aircraft carriers.

We include the table below, drawn on data provided by the Wiki to give you an idea of the scale of the war effort:

According to data from the Bureau of Labor Statistics, 30 million voters in the goods producing sector supported themselves, plus another 16.5 million working in the services sector, plus, 6 million more in government, AND, an additional 16 million serving on active military service, in two major combat theaters, stretching more than two-thirds of the way around the globe!

According to another study:

In 1939 the United States devoted less than 2 percent of its national output to war, and about 70 percent to satisfying immediate civilian desires. The rest went to civilian government expenditures, private capital formation, and exports. By 1944, the war outlays were 40 percent of national output. Industrial production doubled from 1939 to 1945 (but 1939 was still a depression year), with production increasing at the rate of 15 percent per year. Manufacturing employment increased from 10,151,000 in 1939 to 16,558,000 in 1944, and the percentage of the work force involved in manufacturing increased from 19 to 26 percent. The rest of the people were neither farm nor factory workers (more women were at home than were in the factories, on the farm as workers, or in the military). All segments of the labor force decreased their percentage of workers except industry, the military and civil service. Agricultural employment fell from 9,450,000 in 1940 to 8,950,000 in 1944, while people in nonagricultural industries went from 37,980,000 in 1940 to 45,010,000 in 1944. Most of the increase came from sopping up unemployment (which was 8,120,000 in 1940 and only 670,000 in 1944) and employing more women.

Despite this massive, sustained war effort, the authors of this study noted:

The War Production Board thought that the American people during the war were “subjected to inconvenience, rather than sacrifice.” By comparison to the situation facing civilians in all other nations at war, it would be hard to argue with that assertion. At the height of the war the government spent $94 billion, and of that $81.6 billion-87 percent-was war spending. The budget was 80 times greater than in 1939, 54 times 1940 and 14 times 1941. But the budget expansion was such that civilians truly did not suffer because of the war, and when one considers that unemployment had all but disappeared and what joblessness remained was usually only temporary, the home front prospered. In terms of calories, people were generally fed better than they had been before the war, and they consumed more meat, shoes, clothing and energy.

Seventy-two million slaughtered human beings, yet, war had become an “inconvenience” for the civilian population.

Cold truth, perhaps, but no colder than this excerpt from an article published during our present war:

Since the start of the Iraq war four years ago this week, Americans have bought more than 110 million cell phones and spent $35 billion on HDTV sets.

They have moved into 5 million new homes, bought about 60 million new cars and trucks and watched the Dow Jones industrial average climb from 8,200 to 12,000 and beyond.

Despite bloodshed in Baghdad from a conflict lasting longer than U.S. participation in World War II, life for most Americans has clicked along without personal loss or even higher federal taxes to cover the fighting.

“We’re in a country where it isn’t clear in our daily routine that we’re living with war,” said Carolyn Marvin, a communications professor and cultural historian at the University of Pennsylvania’s Annenberg School for Communication.

For us as a nation, war has ceased even to be an inconvenience.

War good for business?

Hah!

Business has become good for war.

Thanks, in large part, to NSC-68

To be continued

Is serious left criticism of government’s share of GDP possible? (8)

Continued from here.

What we have asserted so far, in the previous seven articles, is not, in our minds, demonstrable facts – scientifically proven knowledge – but is being done to offer a reasonable answer to the question we have posed: Is serious left criticism of government’s share of GDP possible?

We want to emphasize this for two reasons:

1. We are not qualified to settle this issue to the extent required for a peer reviewed study in the field of economics. The material covered here bridges a wide field of separate inquiries, the expert voices for which are far more qualified than we to investigate and confirm, or, refute, in part or as a whole – however little attention it will ever get from them.
2. What we have asserted so far is of such minor importance, in comparison to that which we will assert next, that the spectrum of political thought in this country – left to right, conservative and liberal, Democrat and Republican – will immediately ignore it, as it strikes to the very root of government itself.

That assertion can be summed up briefly:

In this present crisis, government is not the solution to our problem; government is the problem. Ronald W. Reagan

We are, in other words, suggesting the left embrace this statement, and, provide the kind of honest criticism of government which is necessary to make that criticism the driving force of American politics.

We angrily reject the argument that embracing this view is an argument to embrace the author of the Welfare Queen myth, any more than embracing Socrates views on ethics is tantamount to seeking the company of boys.

Apart from the fact the right, including Ronald Reagan, never truly believed in the truth of this statement – just as they have, by and large, never disowned their gay children, practiced abstinence before marriage, or, avoided taking advantage of the most liberal abortion laws when circumstances required – they have not made even the slightest practical dent in the growing black hole of government spending.

So far as we can tell, there has never been a single Republican, or, Democratic admistration – federal, state or local – since the Great Depression which has spent fewer dollars, and, employed fewer people, by the end of its term in office than it had at the beginning.

Not one.

And, as we will show, the reason for this is simple: Since 1950, permanently, and, even before, as has been seen in the Great War, and, the Great Depression, government has emerged as an independent player, pursuing its own agenda, and exploiting the growing productive power of society on its behalf, against society – and, so far as we can tell, this condition exists not only in this country, but in all nations, simultaneously.

But, there is also another reason: the right has never been able to come to grips with the implications of Ronald Reagan’s statement – massive and sustained unemployment, economic collapse, the likes of which has not not been seen since, and would dwarf, the economic catastrophe which accompanied the Great Depression.

The potential for this calamity in the event of a reduction of government’s share of GDP can only be prevented by the reduction of the work week.

However, it is our belief, this calamity is likely not only in the case that Ronald Reagan’s dictum is observed, but, even if it is not.

To explain why, we now fast forward to the story of National Security Council Memorandum 68.

To be continued

Is serious left criticism of government’s share of GDP possible? (7)

Continued from here.

We would like to say there is at least one powerful argument in favor of Hunnicutt’s assertion that,

Roosevelt and the majority of Americans saw this free time as a tragedy that had to be eliminated by increasing economic activity-an activity stimulated by government spending if necessary.

Although true, it is just not related, in my opinion, to the unemployment crisis spawned by the Great Depression.

There is another cause, which predates the Great Depression, and, which Hunnicutt calls the only competing alternative to shorter work time on the part of American voters: the need for higher wages.

What we have to show, simply enough, is that this demand for higher wages became an over-riding concern of American voters by the time of the Great Depression, and, when combined with the catastrophic unemployment of the that event, made it possible for Roosevelt to offer his alternative approach as a conservative, palatable, alternative, bridging both concerns: avoiding unemployment and generating more income.

As the chart below shows, since 1914, and continuing until today, the price level has exploded upward in a persistent, secular, inflationary spiral.

A spiral which, based on figures supplied by the Bureau of Labor Statistics, has, over the past 94 years, made it necessary for voters to earn $2166 today for a basket of goods they could have purchased with $100 in 1914!

An argument could be made here, and we will make it, that even the catastrophic unemployment of the Great Depression affected only 25 percent of the population.

Inflation, on the other hand, though muted by the deflation of that event, continued to exert a powerful psychological pressure on the thinking of American voters – employed and unemployed alike – making Roosevelt’s expansionist policies appear to be a safer alternative to doing nothing, on one hand, and, reducing the work week, on the other.

In a monetary regime of rampant inflation, “free time,” is experienced as a tragedy not just in the obvious form of unemployment, but also in the associated forms of sub-employment, and, stagnant wages.

This free time can exist in the form of a voter unable to find work, unable to find enough work, forced by circumstances to accept lower wages for work, and, forced to accept year over year net negative increases in wages for work.

And, its resolution can appear in the form of extending the voter’s working time on a first job, adding a second job, adding more members of the household to the workforce, and, relying on extended family members to supplement income.

Thus we find, according to one study by Evan Roberts in 2003 – well after Hunnicutt’s paper, of course – this change in the labor force participation of married women:

One of the most important changes in the United States labor market in the twentieth century was the increased participation of married women. In 1900 just 5.6% of married women were in the labor market. By 1998 61.8% of all married women were working or looking for work. The change is all the more notable because the labor force participation rates of single women have grown not twelve hold, but just by half in the same century (from 43.5% to 68.1%). Increased participation by married women in the labor market has occurred because the relationship between characteristics of women and their families, and labor force participation at a point in time has changed.

Of course, the actual relationship between married women entering the labor force and inflation is far more complicated than this simple assertion – and, far beyond this blog’s ability to nail down.

However, the coincidence of these two trends – price level, and work force participation of married women – indicates there is much to be understood on the subject.

To be continued