Archive for July, 2008

Is serious left criticism of government’s share of GDP possible? (14)

July 26, 2008 Leave a comment

Continued from here.

To the question, “Is serious left criticism of government’s share of GDP possible?”, we have so far offered a review of changes in that share from 1914 to the 21st Century.

We have offered an explanation for the changes in the government’s share of GDP, using the words and actions of successive administrations, and showing how these changes, in every case, were linked to what Bertrand Russell correctly called, “payment for past wars or preparation for future wars…”

In the case of the United States, by 1950, we suggest this, “public expenditure of most civilized Governments”, had been enshrined in national economic policy under the rubric, “Full Employment”, meaning not the right of Americans to a decent job with a living wage, but the conversion of the economy itself to building, supplying, maintaining, and provisioning a Cordon Militaire around the Soviet Union and its satellites.

It would seem to follow that whatever, “imbalances”, in the economy to which Jared Bernstein refers are connected to this militarization of the American economy, or, heavily influenced by that conversion.

The militarization of the economy is, fundamentally, the diversion of human effort from the satisfaction of human need – the diversion of human productive capacities from its logical conclusion in the act of human consumption; the detachment of the act of production from the act of consumption.

In practical terms, this presents the paradox of over-production and under-consumption in a new historical form, as massive effort is devoted to the production of military armaments, and other ex-consumption items, while millions go with basic needs unmet – education, housing, medical care, decent wages, etc. – necessary infrastructure crumbles into disrepair, and even to the bizarre outcome that poor backward nations like India and China provide, essentially gratis, hundred of billions in consumer goods and capital to the richest nation in human history.

Let them eat dirt cookies!

Above all else, it is a hellish and repugnant squandering of the wealth of the nation and the entire world – wealth which is not the least bit measured in the output of goods or by artificial statistics which are the fetish of economists, but only in our free time, and the possibilities for unencumbered self-development.

It is this astonishing waste of human effort that Jared Bernstein’s candidate, Barack Obama, and his opponent, John McCain, seek not only to continue, but to expand if either is elected to the Presidency this fall.

We could continue to wax eloquent  on the possibility for a society devoted to human needs, to human self-development, to the unprecedented burst of human creativity and productivity that would be unleashed with the breaking of the national security state.

Fine words, indeed! But, no more than wishing pigs to fly, were it not impossible that the present circumstances should continue.

Truth be known, we have no illusion you will waken from your stupor to seize your life back from the relentless machinery of empire – the designers of our present circumstances knew you better than your own mother – intellectually lazy, dissipate, incapable of forming a coherent thought – all in all, a populace completely in tune with all the most notable qualities of the present occupant of the White House.

Yes, the Moron is your special product.

Were circumstances to depend on you rousing yourself from a six decades long slumber, we might as well await the Second Coming.

Most notable in this regard: whatever your personal judgment as to the necessity for the Cordon Militare erected around the Soviet Union, no matter which side of the Cold War you held to be least offensive, no matter your political loyalties to dogmas of Republican or Democratic administrations, one fact stands in sharp relief:

The Soviet Union collapsed – just as predicted – nearly twenty years ago, yet, the machinery of war allegedly erected to counter its (again) alleged existential threat to the United States continues to grow unimpeded by any significant domestic opposition.

It disappeared…



Down the rabbit hole of history.

And, you are still cruising the oceans with carrier groups, while deadly hydra-headed missiles slip silently through the planet’s deep waters, threatening the extinction of life itself.

And, this is considered by the brightest and mostly worldly among you to be normal behavior.

The nations then dominated by the Soviet Union, whose military-industrial potentials were supposed to augment the military power of their Soviet overlords, are, today, being integrated into the G8, NATO and the European Union, and, in several cases, adding to the coalition of the willing currently piling up bodies in both Iraq and Afghanistan, or, stocking the aisles of Wal-Mart.

The Cordon Militaire erected around the now defunct Soviet threat, under the banner of containment, has now been given new life under the banner of Full Spectrum Dominance while you were watching reruns of American Idol.

Remember the Alamo!

Remember the Maine!

Remember the Lusitania!

Remember Pearl Harbor!

Remember the 38th Parallel!

Remember the Gulf of Tonkin!

How often has some convenient outrage has been raised as a justification for you to do that which you have always been more than willing to do.

Were this latest outrage not to exist, would we not invent it?

It follows, thus, the events of September 11, 2001,  which have served to give justification the slaughter of a million Arabs, the befouling of mankind’s own cradle, and the overture to World War IV,  draw their power not from the wild fanaticism of cave dwellers, but from you.

And, just as likely,  the frustration of these designs hinge not on you,  as you imagine yourself – the injured and innocent party – but must be the very forces you unleash, which impose themselves on you as a consequence of your own actions, and, as an impenetrable barrier to the furtherance of your designs.

Simply stated, we are forced to consider the circumstance under which, despite your further efforts to extend government’s share of GDP  in service to your murderous perversities, the very extension of that share becomes an intolerable burden to you – a burden which must be thrown off on pain of your self-destruction.

To be continued

Is serious left criticism of government’s share of GDP possible? (13)

July 21, 2008 Leave a comment

Continued from here.

On January 12, 1951, President Truman sent his economic recommendations based on the findings of NSC-68 to Congress.

The preamble spoke of a dire existential threat:

We face enormously greater economic problems, as I transmit this fifth annual Economic Report, than at any time since the end of World War II. Although our economic strength is now greater than ever before, very large new burdens of long duration are now being imposed upon it.

The United States is pledged and determined, along with other free peoples, to cheek aggression and to advance freedom. Arrayed against the free world are large and menacing forces. The great manpower under the control of Soviet communism is being driven with fanatic zeal to build up military and industrial strength. We invite disaster if we underestimate the forces working against us.

To respond to the alleged threat posed by the Soviet Union, Truman call for, “a large and very rapid increase in our armed strength, while helping to strengthen our allies. This means more trained men in uniform, and more planes, tanks, ships, and other military supplies.”

To support this massive expansion, Truman outlined an immediate plan to divert the nation’s economic output from increasing consumer goods, to building “as rapidly as possible, an expansion of our capacity for producing military supplies. This must be substantially greater than would be required to achieve our present targets for armed strength; it must be large enough to enable us to swing rapidly into full-scale war production if necessity should require.”

Truman pushed to permanently enshrine “growth” as the fundamental economic policy of the nation. Such growth would be essential if the United States were to sustain a high rate of military expansion for a indefinite period of time, yet, continue to improve the living standards of Americans.

Truman demanded that Americans be required work a forty hours week, indefinitely, to sustain an equally indefinite military cordon around the Soviet Union.

But, given the requirements of the containment effort Truman proposed, even with an unnecessarily long 40 hour workweek the projected labor force in 1950 would be unequal to the task. The pool of available workers had to be expanded:

In terms of manpower, our present defense targets will require an increase of nearly one million men and women in the armed forces within a few months, and probably not less than four million more in defense production by the end of the year. This means that an additional 8 percent of our labor force, and possibly much more, will be required by direct defense needs by the end of the year.

These manpower needs will call both for increasing our labor force by reducing unemployment and drawing in women and older workers, and for lengthening hours of work in essential industries. These manpower requirements can be met. There will be manpower shortages, but they can be solved.

Although, in his own words, the economic strength of the nation had never been stronger – this coming on the heels of World War II when the United States had been able to divert 50 percent of its GDP to the war effort, causing what amounted to an inconvenience to American’s consumption standards – by the standards of what was being proposed by Truman even this massive economic power was insufficient! The nation would be required to maintain a similar, though substantially less intense, effort for decades if necessary.

Domestically, under the Truman Doctrine, the economy was no longer the means by which Americans satisfied their basic needs, it was being converted to the mere logistical tail of a newly emerging military empire.

For the fiscal years 1951 and 1952 combined, new obligational authority enacted or anticipated for our primary national security programs–for our military forces, for economic and military aid to other free nations, for atomic energy and stockpiling, and for related purposes–will probably total more than 140 billion dollars. Actual expenditures on these programs in the fiscal year 1950, the last full year before the Korean outbreak, totaled about 18 billion dollars. At the present time, they are running at an annual rate of somewhat more than 20 billion dollars. By the end of this calendar year, they should attain an annual rate between 45 and 55 billion dollars, or from 25 to 35 billion dollars above the present rate. The actions we are taking should enable us within twelve months, to expand this rate of expenditure very rapidly if necessity should require.

Current expenditures for these now represent about 7 percent of our total national output. By the end of this year, this proportion may rise to as much as 18 percent. This compares with the roughly 45 percent of our total output that we were devoting to defense during the peak year of World War II. While the present program is thus very substantially short of the requirements imposed by full-scale war, it nonetheless requires a major diversion of effort. Furthermore, there will be a much more severe drain on some particular supply lines. By the end of the year, our expanding defense programs, including stockpiling, may be absorbing up to a third or more of the total supply of some of our basic commodities, such as copper, aluminum, and natural rubber. While direct defense requirements for steel may not total more than 10 percent of total output, the needed expansion of our essential industrial capacity will require a much greater diversion of steel from ordinary civilian uses.

Longer term, Truman envisioned sufficient excess industrial capacity to produce 50,000 planes and 35,000 tanks a year. Diversion of civilian industrial capacity would be replaced by facilities devoted primarily to military output, such as was built during World War II. Additional capacity would be needed to ramp up production of steel, copper, power, and other basic material, without, “the necessity for irksome controls extending over a long period.”

Domestic supplies of the material were not enough, so the United States had to rely on and secure, “imported supplies. Expansion of domestic plants for treating low-grade ores, and of ore production facilities in Labrador and Venezuela, together with related transportation facilities…”

Unlike World War II, Truman’s Cordon Militaire would not be a crash effort, so building in the necessary production capacity could be stretched over decades:

If we were now engaged in full-scale war, we could not afford to devote manpower and materials to these longer-range programs. But to fall to do so under present circumstances would be short-sighted and potentially costly. Action now is essential, to make us stronger year by year in all of the components which enter into any military strength that we may need in future.

As Truman envisioned it, the steady and substantial involuntary contribution of unnecessary working time by tens of millions in the labor force, and ten of millions more identified to be drawn into the labor force over the succeeding decades, would be essential.

Truman’s economic recommendations were the poignant moment in the flowering of the Gospel of Full Employment – a full employment which aimed not at making sure every worker had a job, but at ensuring the productive capacity of the nation could be fully employed by successive administration in the task of building and maintaining the Empire.

To be continued

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

July 19, 2008 Leave a comment

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)

July 18, 2008 Leave a comment

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

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.


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

End this war too, Barack…

July 16, 2008 Leave a comment

From the news today, this:

Israel freed a notorious Lebanese attacker and four others Wednesday after Hezbollah handed over two black coffins with the bodies of Israel soldiers, a dramatic prisoner swap that closes a painful chapter from the 2006 war in Lebanon.

And,in Afghanistan we get word that US troops have abandoned their positions which were overrun last week:

Omar Sami, spokesman for the Nuristan provincial governor, said American and Afghan soldiers quit the base on Tuesday afternoon. He said they took the district mayor with them.

Sami said U.S. troops armed local police with more than 20 guns before they left, but that the officers had fled the village and crossed into neighboring Kunar province when 100 militants moved into Wanat.

Now is the time to press for a negotiated settlement in Afghanistan – before the administration can reinforce troops in the area.

If the Israelis can negotiate an agreement with Hezbollah, we should be able to negotiate an agreement with all Afghan parties to end this ridiculous conflict.

Barack, can you smell what we’re cooking?

Conyers: “We’re not doing impeachment, but he can talk about it,”

July 15, 2008 Leave a comment

House Judiciary Committee Chairman John Conyers Jr. has been forced by public pressure to hold a hearing on Rep. Dennis J. Kucinich’s article of impeachment against George W. (the Moron) Bush. He vows this hearing will not lead to an impeachment.

Full story here: