Archive for August, 2009

The Messiah reappoints Bernanke…

August 25, 2009 Leave a comment

In a statement indicating his commitment to an attempt to reflate the economy, the Messiah asked Bernanke to stay on as Federal Reserve Chair.

With Ben Bernanke, Larry Summers, Tim Geithner, Christina Romer, and Brad Setser serving on his economic team, the Messiah appears committed to treating this crisis as an ordinary downturn, using whatever is left of fiscal and monetary tools in a vain attempt to stem the collapse.

The reappointment is an admission that the crisis is far from resolved and will require extraordinary intervention to achieve something which might pass for stability. Bernanke is a student of trhe Great Depression, along with Christina Romer; Summers has published on maintaining the dollar as reserve cuirrency through manipulation of gold markets; Geithner and Setser both were involved in the U.S. dictated restructuring of less developed countries in the Brazil, Mexican, Asian, and Argentina Crises.

The team is very tilted toward imposing massive economic adjustments on ordinary people, bailing out financial giants, beating back threats to the dollar, and extending hours of work.

Since all of this will fail to stabilize the economy, and deflation will continue apace, we are left to wonder how a society organized around wage work will be able to transition to one that is no longer so organized – and cannot be so organized.

A rather distressing question, considering how dependent we are on the far flung, extremely sophisticated, highly complex, mechanism of production and distribution which supports our civilization.

Categories: General Comment

17 above 10; 12 above 11…

August 21, 2009 Leave a comment

and Alabama is in the house…

17 above 10

From Zero Hedge:

In a dramatic reversal to the moderating trend from the past several months, Mass Layoff Events surged from 256,357 in June to a whopping 336,654 in July, a 31% increase, and surprisingly the second highest reading for the year since January’s 388 thousand. Actual MLE increased by 21% from 2,519 to 3,054. The primary weakness was focused in the manufacturing sector, where claims jumped from 85 thousand to 154 thousand, an 81% increase.

As a reminder, the BLS defines a Mass Layoff Event as one that occurs when an establishment has at least 50 initial unemployment compensation claims filed against it within a five-week period and the layoff lasts longer than 30 days.

Another indication that purported recovery in unemployment is here to stay.

BLS Mass Layoff Events - August 21

Still more notes on the delveraging economy:

August 20, 2009 Leave a comment

What we have written here is all speculation based on our understanding of how the economy works. Please do not construe it to imply you have been wasting your life in a job which produces nothing, creates nothing, and only serves to empty your remaining years on this earth into a black hole of worthless activity.

To continue:

For the past seventy to eighty years, an increasing portion of transactions in our economy have been based on the exchange of some real thing for a notional placeholder – a valueless piece of fancy paper with a picture of a dead president on it – and, worse, by some promise of future payment in the form of this fancy piece of paper.

That real thing – a single family home, car, 42 in wide screen high definition plasma television, or pair of shoes – has long since suffered the ultimate end that all such goods suffer: It was consumed through days, months or years of use, until nothing remained of its original utility to us.

Shoes wear out, cars die by the side of the road, the television goes on the fritz right in the middle of American Idol.

Even a house, the most durable of our goods, eventually succumbs to old age.

It is what things do.

But, of all the goods mankind has ever created, there is one exception to this rule: Money.

gold4Money is never consumed because it exists simply to serve as the medium by which goods circulate in our society until these goods fall out of circulation to be consumed.

For instance, it has been estimated that eighty-five percent of all the gold mankind has ever pulled from the ground and stripped of its impurities lies somewhere in some vault of a central bank, or around the neck of some rap artist.

And, here is where it gets really interesting:

What is true for gold, is true for money in general. And, we believe, this also has to be true for the chain of incomplete transactions waiting to be completed since the Great Depression: Every transaction where someone made a purchase on credit that was not eventually completed with the creation and sale of a new good, is still hanging out there in our economy waiting to be completed- every home mortgage, car note, or bag of groceries, whether repaid or outstanding.

These incomplete transactions are sitting as an asset on the books of some financial institution or on the computer in the basement of some central bank.

Mind you, we’re not talking only about debt which has not yet been repaid with the fiat money in your wallet: even debt which has “officially” been repaid with dead presidents, but has not been replaced by a real good, must be considered incomplete.

The reason is simple: The dollar is a valueless piece of paper, which, while it can stand in the place of real money (gold or other precious metals) for purposes of facilitating transactions, cannot itself complete those transactions, i.e., can not do what real money does: replace the value of the good that has been transferred from seller to buyer.

Thus, in any such transaction, the seller has accepted, in return for his/her good, not the money equivalent of that good, but a pretty piece of paper.

This point must be understood: Should there arise a circumstance where real money is called for, where paper can no longer serve as a representative of this real money, because it has no value in and of itself, the aggregate value of all such transactions, all the way back to the moment the dollar was debased from gold, will vanish, as if they never occurred.

All of the “wealth” allegedly created by, and predicated on those transactions, collapses in a massive catastrophic implosion.

If these transactions expire without being completed – without the previously consumed good being replaced by a new good – the economic value of the transaction vanishes, in much the same way as the ledger value of your mortgage vanishes when you default and are foreclosed.

Since the great mass of these incomplete transactions will never be completed owing the the very structure of our economy, where superfluous work composes the great bulk of economic activity, and only adds to the volume of incomplete transactions. the only thing standing between current valuations of assets in the economy and this massive implosion is the relentless addition of even more such transactions.

For all these years, Washington has forced the use of fiat money in place of  money, because of the one attribute of money for which fiat cannot be substitute:  money’s irreconcilable antagonism to superfluous work, to work that that is meaningless and has no productive value.

The costs of this meaningless work is now embedded in the price of every good sold in our economy, every asset held, and, most of all, in the very employment of millions across this nation.

To evaporate, all that is now required is a trggering event: an event, we believe, that has already happened…

More notes on the deleveraging economy…

August 18, 2009 Leave a comment

The leverage we speak of is that set against your free time, your time to be human, your moments on this Earth which can either be spent enjoying your life or sitting in a meeting discussing the synergies arising from the company’s relationships with its vendors and customers, given rapidly changing technological interfaces.

You know: bullshit…

The leverage they speak of is also this choice, but couched in the obscuring discussion of consumer confidence; household, corporate, and public debt; and, complex financial instruments.

In fact, in all of this discussion of leverage there is only your free time.

Everything else can be measured in the moments you can be diverted from enjoying your free time to focus on your confidence as a consumer, your debt, and how you might be convinced to take on more of the latter to boost the former.

As we stated, our concept of leverage differs from that of economists in that they assume the debt incurred in a transaction whose completion is delayed indefinitely will eventually be paid in full with worthless, valueless, pictures of dead presidents.

Okay, fine.

Bear with us a moment as we peer into this dubious assumption – really, it will only hurt for about the rest of your working life.

We promise…


Inspired by the Messiah, I decide it is time to trade in my clunker for a spanking new 2009 Toyundai Skeezer, which gets 44 mpg, and has a factory installed diamond-laced-thingamajig-doohickie-where-am-I-now, with built-in turbo-thrusters, and a halo ring.

Thanks to the debt guy at the dealership, I incur only $20,000 of debt for this new monster of fuel efficiency, and, thanks to the Messiah, the Federal government incurs an additional $4,500 of debt, which, according to economists, I will pay in taxes over time.

Of course, both my $20,000 and Washington’s $4,500 merely exist as dancing electrons on some computer in the basement of the Federal Reserve – but, no worry! I am good for it.

You see, I have a job: Every day I rise from bed, and commute an hour to a desk, where my job is to inhale oxygen, and exhale carbon dioxide – break for lunch – and continue the process in the afternoon until exactly 4:15 pm.

Rinse and repeat for five years, and the car is mine.

The economists are satisfied with this transaction, so I am satisfied as well.

There is, however, a small problem: I have just purchased a 2009 Toyundai Skeezer, which gets 44 mpg, and has a factory installed diamond-laced-thingamajig-doohickie-where-am-I-now, with built-in turbo-thrusters, and a halo ring, in return for five years of shallow breathing – interrupted by trips to the water cooler to discuss this weekend’s football game.

I get a car, the economy gets a lot of carbon dioxide.

Every week in return for several thousand shallow breaths, my employer gives me dancing electrons which exists mainly on some computer in the basement of the Federal Reserve.

I, in turn, send some of those dancing electrons to the bank which financed my loan, and they accept it as payment for the car loan.

On any normal planet – or previous period of human history – where people would not elect Sarah Palin as governor, nor blow up Afghan wedding parties to make a political point – the exchange of a bit of dancing electrons for a 2009 Toyundai Skeezer, which gets 44 mpg, and has a factory installed diamond-laced-thingamajig-doohickie-where-am-I-now, with built-in turbo-thrusters, and a halo ring, might seem like fraudulent transaction.

People on those planets, or, in those periods of human history, might object that the exchange is not only fraudulent and unacceptable, but also indicative of an unbalanced mind.

They might strenuously object that the exchange of some part of five years of shallow breathing for a 2009 Toyundai Skeezer, which gets 44 mpg, and has a factory installed diamond-laced-thingamajig-doohickie-where-am-I-now, with built-in turbo-thrusters, and a halo ring, is an economically unsustainable transaction; and, that an economy built on such exchanges is doomed to collapse.

At this point, an economist would step in and explain:

So long as this incurred debt is replaced by another, larger, quantum of debt, the chain of transactions where something is sold for nothing can continue indefinitely.

If corporate debt is not enough, we can rely on consumer debt, and, after that, international debt, and finally, government debt.

And, when we have exhausted all the sources of debt, we can rely on that little computer in the basement of the Federal Reserve, which creates money out of dancing bits of electrons…


Notes on the deleveraging economy…

August 18, 2009 Leave a comment

The_meeting_is_boring-338x262In a previous post we pointed out that the expansion of superfluous working time was achieved by the addition of billion of superfluous hours of work to economy through leveraging the overly long hours of work in the goods producing sectors of the economy.

According to most economics analysts, we are now undergoing a massive deleveraging in this crisis.

It makes sense, considering the above, to discuss how our idea of leveraging/deleveraging differs from the idea as presented and discussed by economists, and to clearly delineate how this difference implies very different descriptions of the deleveraging process.

Generally, when economists speak of deleveraging, the idea they are trying to convey can be captured in the following quote:

First, in many Western countries the boom was created on a pile of debt held by consumers, corporations and some governments. As the global financier George Soros put it: “For 25 years [the West] has been consuming more than we have been producing … living beyond our means.”…

Second, these debts were racked up on the back of skyrocketing asset prices. In several countries, stock prices and house values soared far above their true long-term worth, creating paper wealth that millions of households used as collateral for their growing debts. The value of global financial assets grew from less than 45 per cent of global GDP in 2003 to nearly 490 per cent in 2007…

The final layer of the house of cards was the huge volume of money funnelled from China, Japan and the Middle East to Western banks and governments. Cheap savings from the East flooded into the West to finance ballooning deficits. From 1999 to 2006 the US current account deficit more than tripled, from $US63.3 billion to $US214.8 billion, balanced by huge surpluses in other countries, especially China.

Which is to say, economists think of leverage simply as a debt problem, an accumulation of debt to fund current needs: The individual who borrows money to put food on the table, the family who borrows to put an addition on its home, or, the country who borrows to cover their imports.

This form of leverage can be thought of as consuming before producing – we “purchase” a good today, a car for instance, but only complete the transaction some time in the future, perhaps in four or five years.

We have consumed the car before we have actually purchased it, using money borrowed from a third source – a bank; and, the transaction is completed only when we deliver the final payment to the bank, and receive the title to the car.

The logic of the economists’ debt leverage assumes the individual, family, or country, eventually produces something of equal value to the thing he/she or they have purchased with the debt they incurred in the transaction – perhaps ten or twenty 42 inch wide screen, high definition televisions.

The promise to pay hinges, therefore, on delivery to the market of those televisions having the same value as the car they purchased on credit.

Beijing, in other words, loans Washington $2.7 trillion, in expectation that the United States will some day produce the equivalent sum of exports to retire the loan.

A simple enough concept, but the difference between our conception of leverage and the one described above is this: In our conception of leverage the production part never takes place!

No televisions are produced to replace the car that gets consumed on credit, since the point of the transaction is to consume a car which, otherwise, would simply rot on the dealer’s lot.

Instead, in return for the car, the buyer/debtor sits through endless meetings where people discuss the quarterly marketing strategy for a new financial product designed to encourage more such transactions.

They use the word impact as a verb, consume lots of coffee or bottled water, and watch the clock, in excruciating agony, as it slowly ticks off the seconds until lunch.

Dutifully, the economist records this misery and adds the results to the Gross Domestic Product.

Why can shorter working time increase your standard of living?

August 17, 2009 Leave a comment

We figured it was time to throw this question out there, since it is commonly assumed that less work translates into a lower material standard of living.

We think the case can be made that the opposite is true: Engaging in work that has no useful economic value ultimately impoverishes you, reduces your standard of living, and, paradoxically, forces you to work longer to maintain the same standard of living.

To put it another way, by maintaining your long hours of work, Washington can extract vital resources it needs to maintain and expand its empire; and, Wall Street can, by the very same method, fatten its bonuses.

It is clear that a too long work week is directly connected to a number of ills, including the neglect of children as both parents spend increasing amounts of time away from home, but it also depresses your material standard of living, imposes heavy damage on the environment, and is the underlying generator of massive poverty and income inequality throughout the United States and the global economy.

We believe we are the first to tie all of these social ills into one bundle and link them directly to hours of work.

To understand how longer working time results in a lower standard of living we should begin by examining income inequality since 1992:

Zero Hedge: Historial income and net worth by income level since 1992

Zero Hedge: Income and net worth by income level since 1992

As you can see from the above chart, since 1992, net worth and income growth has been decidedly skewed toward the very wealthiest 10 per cent of the population.

According to the blog, Zero Hedge:

What is immediately obvious is that based on estimates by Bank of America, the 50% of US population which makes up the middle class, is responsible for the same amount of total consumption as the 10% of the upper class. Another observation is that the balance, 40% of population considered Low-Income consumers, is responsible only for 12% of total consumption.

Ther top 10 percent of the population now has a material standard of living equal to the entire middle class of the United States, and several times the poorest 40 percent of the population!

Even by the standards of inequality produced by two decades of economic disaster – the stagflation of the 1970s and the Reagan economic revolution of the 1980s – the poorest parts of American society, and even the middle class have suffered a massive collapse of their material standards of living.

And what of hours of work?

Economists love to trumpet the decline in hours of work in the United States as proof of improving material standards of living; an example of this is an article posted by Robert Whaples disputing Juliet Schor’s contention that Americans are overworked:

Some analysts, such as Schor (1992) have argued that the workweek increased substantially in the last half of the twentieth century. Few economists accept this conclusion, arguing that it is based on the use of faulty data (public opinion surveys) and unexplained methods of “correcting” more reliable sources. Schor’s conclusions are contradicted by numerous studies. … the average length of the workweek has dropped since 1950. Although median weekly hours were virtually constant for men, the upper tail of the hours distribution fell for those with little schooling and rose for the well-educated. In addition, Coleman and Pencavel also find that work hours declined for young and older men (especially black men), but changed little for white men in their prime working years. Women with relatively little schooling were working fewer hours in the 1980s than in 1940, while the reverse is true of well-educated women.

What Robert Whaples does not disclose is another equally important set of statistics regarding number of hours worked by all Americans: Individual hours worked have indeed fallen from a high of 34.6 hours in 1992 to 33 hours in 2009 – approximately 4.6 percent; but during the same period total hours worked by Americans have increased by 17.4 percent!

Individual versus aggregate hours of work

Individual versus aggregate hours of work

Individually, we may or may not be working less – there is little agreement on this – but taken as a population, there is no doubt we have been working longer and harder for a declining standard of living. As we have seen, no there has been no improvement in material standards of living for the vast majority of the population since 1992, yet this same population is working nearly 20 percent longer than it was in 1992!

Since, any given worker in an economy may or may not be doing any productive work – lawyers, for instance, contribute nothing to economic activity – it is total hours of work, not individual hours, which provide the basis for the material standard of living of any country. The way our economy is organized, we are quite like one collective worker, setting in motion one massive production machine. The effort of each individual to the total sum of the output of that machine is important, but only the combined effort makes our life possible.

This completely escapes the understanding of economists who continually focus on individual employment decisions while ignoring the necessary conditions of cooperation which alone provide for our material well being.

Being a lawyer, or a commodity trader, may vastly improve your standard of living – and even the standard of living of your clients – but it produces nothing, and only rearranges existing income into different hands – in the worse case, it only reinforces existing inequality, since those with the most money can afford the best lawyers and commodity traders.

Likewise, when you read that an “improvement” in GDP was achieved last quarter, because the U.S. government spent 13 percent more on defense than the previous quarter, you have to ask yourself did any of this spending result in an improved standard of living for the country, or did it just waste valuable resources?

There is one telltale sign that longer hours of work operate to reduce your standard of living: INFLATION.

One chart we like to play with is the changing ratio of jobs in agriculture, once the most labor intensive line of work in our economy, to the jobs which produce nothing – service jobs, including government employment.

In 1940 there were about 11 jobs in agriculture for every 19 service jobs; in the intervening years between 1940 and 2000, that ratio shifted decisively in favor of jobs which produce nothing. There were some 107 million jobs service jobs to just under 1 million jobs in agriculture.

During that same period of time, same period of time the median price of a single family home in the United States went from just under $3ooo.oo, to a whopping $119,600 – according to the census bureau.

We thought you might like to see what that looks on a chart:

Inflation and the ratio of employment in servces to agriculture

Inflation and the ratio of employment in servces to agriculture

And, as is clear from the chart, there is a clear correlation between the changing composition of the American work force and the inflationary spiral we have been suffering through for the past seventy years.

As the most labor intensive goods producing employment in the economy has given way to employment which produces nothing, inflation has worked as the mechanism to transfer the nation’s wealth to the wealthiest 10 percent of the economy – leaving the poor deep in poverty, and the middle class mired in debt.

Longer hours of work, since they do not increase the amount of goods produced in our economy, only add to the costs of those goods.

GM may, for instance, increase its employees, but if it is only adding lawyers, and not autoworkers, the additional employees do not add new cars – only new lawsuits. And, these new employees have to paid for by adding to the price of automobiles.

In the same fashion, when Washington increases is borrowing to build out its military machine, jobs can indeed be created, but those jobs do not result in a better material standard of living, they only result in the things which make life impossible: war materiel.

That same spending, however, still produces vast profits for a handful in society – increasing income inequality – while driving up the prices of goods and driving down your standard of living.

Such spending is the equivalent of the empty calories in a candy bar.

Make no mistake: longer hours of work only serve to keep you poor and in debt!

The policy of this administration to stimulate employment will only result in millions more falling into poverty here and around the globe.

Only shorter hours of work can reverse the decades long inflationary spiral which has been the most important mechanism for maintaining and extending income inequality.

Swords into plowshares: How the Messiah is creating jobs for you by preparing for World War III

August 15, 2009 Leave a comment

For those who still don’t get it: The brick and mortar of economic recovery and job creation is being fashioned out of the material of your life.

defense spending

Isaiah 2:4: And he shall judge among the nations, and shall rebuke many people: and they shall beat their swords into plowshares, and their spears into pruninghooks: nation shall not lift up sword against nation, neither shall they learn war any more.

From Contrarian Musings:

Raising GDP is not a hard thing to accomplish because GDP is really just a measure of spending. What really matters is the quality of the spending. If we are spending on productive investments that produce a long term return that is one thing, but if we are spending on consumer goods that produce nothing and depreciate over time, we are not creating wealth. If we are “investing” in housing, we are not creating wealth. If we increase government spending on defense (which rose 13% in the quarter), we are not creating wealth. If we increase government spending on welfare payments that are used for current consumption, we are not creating wealth. Wealth is created by saving and investment. Much has been made of the rise in the personal savings rate, but at this point government dissaving is offsetting all the good being done at the individual level.

Karl Denninger has this to say:

Real federal government consumption expenditures and gross investment increased 10.9 percent in the second quarter, in contrast to a decrease of 4.3 percent in the first. National defense increased 13.3 percent, in contrast to a decrease of 5.1 percent. Nondefense increased 6.0 percent, in contrast to a decrease of 2.5 percent. Real state and local government consumption expenditures and gross investment increased 2.4 percent, in contrast to a decrease of 1.5 percent.

So much for Obama destroying military spending eh? Uh, not so fast eh? 13% increase? Not bad. The Federal Government is attempting to pick up the pieces from the private sector, but without success. State and local governments are trying to pick up the pieces but all they’re doing is going bankrupt; do not expect to see this contribution repeated in the 3rd and 4th quarters, as they’re out of money!

The Daily Capitalist writes:

It is true that government spending grew at a 5.6% annual rate for the quarter, moderating the contraction in gross domestic product. But most of that increase came from the defense sector, not the nondefense sectors targeted by the American Recovery and Reinvestment Act. Defense spending grew at a 13.3% annual rate, in part a rebound from a 4.3 first quarter contraction. Nondefense spending grew at a 6% annual rate, contributing 0.15 percentage points to overall growth. The economy can use all of the help it can get, but it’s too soon to declare that federal spending is effectively making its way into the system.

Yes, we wanted to tell our brother he is not a chicken, but we needed the eggs…

What you might not know, and most blogs and reports we found did not mention: This second quarter 2009 GDP spending party came on the heels of the Moron’s third quarter 2008 defense spending surge of 18 percent:

Economic Growth in the Defense Sector: While the U.S. economy slowed in the third calendar quarter, defense spending leaped, far outstripping other government agencies. It is tempting to draw the conclusion that defense spending is somehow not aligned with the rest of the economy. Here is why that conclusion is incorrect. According to the Commerce Department’s Bureau of Economic Analysis (BEA), which tracks U.S. economic activity, defense spending rose 18.0 percent from the second calendar quarter to the third, on a seasonally adjusted, annualized basis in constant dollars.1 The third quarter of 2007 saw a similar increase, when the annualized rise in defense spending exceeded that of federal spending, which in turn also outpaced overall U.S. economic growth.

We assume there will be another such green shoot uptick in defense spending for this quarter, which will technically send the economy into positive territory. As you can see from the chart, projections are that defense spending will continue to rise until the recession is over.

Portrait of a Dragon King…

August 13, 2009 Leave a comment

“Power law distributions incarnate the notion that extreme events are not exceptional events. Instead, extreme events should be considered to be rather frequent and to result from the same organization principle(s) as those generating other events: because they belong to the same statistical distribution, this suggests common generating mechanism(s). In this view, a great earthquake is just an earthquake that started small … and did not stop …”

Didier Sornette, Dragon-Kings, Black Swans and the Prediction of Crises

EmploymentRecessionsJuly.jpg by Caculated Risk

EmploymentRecessionsJuly.jpg by Calculated Risk

So, curiosity got the better of us, and we decided to see if we could finish this portrait you have been busily sketching out – your masterpiece of 21st Century political-economic folk art.

We did some research on how the economic community projected this unfolding epic, and found a 2007 study produced up by John Schmitt and Dean Baker as they tried to get a handle on the worst case scenario for this recession:

If the next recession follows the pattern set by the three most recent downturns, a recession in 2008 would raise the national unemployment rate by … 3.8 percentage points (a severe recession along the lines of the early 1980s), increasing the number of unemployed Americans by … 5.8 million. Based on the historical pattern, the unemployment rate and the number of unemployed would continue to increase through … 2011 (to 8.4 percent in the case of a more severe economic downturn).

We admit, it did spark our imagination.

We began to build a projection from scratch based on the 1981 and 2001 recessions, which recessions have the reputation for being, respectively, the most severe recession and the longest recession of the post-war period.

And, here is the result: Comparing the actual 1981 and 2001 recessions, the actual data from the current recession, and our rendition of the projected course of this recession:


The Dragon King Recession

You’re gonna need a bigger boat.

What color was your unemployment line, Sojourner Truth?

August 13, 2009 Leave a comment

Jobless claims – up another 13,129, from 466,695 last week to 479,824 this week – provided another arkwardly horrendous moment in this entire sad affair for the boosters of the Messiah.

The body count continues to look as grim with 9,156,028 unemployed workers claiming unemployment benefits, down slightly from 9,326,787 last week.

An additional 14 million unemployed are not eligible for unemployment benefits, and do not appear in these statistics.

The difference in this months total body count from the previous total number claiming benefits is not explained, but perhaps as many as 60 percent of the nation’s unemployed are currently not eligible to collect unemployment benefits – either because they have exhausted their benefits, or were not legally qualified to collect.

These include those who left their job voluntarily, were fired for cause, or who were self-employed.

Estimates indicate that as many as 1.5 million more people may exhaust their benefits before the end of the year.

In Texas, the Republican governor has rejected extending unemployment benefits because, according to USA Today, “expanding the unemployment system would require raising taxes on businesses, thus ‘hurting our job-creation climate.’ Perry’s ‘ultimate goal is to make sure there are jobs out there, so that when this economic climate turns, folks can get back to work…'”


Surprisingly, we find ourselves in agreement with Governor Perry in rejecting the idea of further extending unemployment benefits. Like him, we believe people should not be paid to not work.

We can say this from personal experience: Not working is its own benefit – one which should be enjoyed by every member of society in equal proportion as the need for work declines.

Moreover, the problem confronting us in this crisis is not the absence of jobs, it is the absence of work and the refusal of both Washington and Wall Street to recognize this absence.

The problem of the 21st Century is the unemployment line – the relation of men and women to the means of life.

Sojourner-TruthMuch as the late and unlamented problem of the 20th Century came to be known as that of the Color Line, when it was really the problem of a planter class who refused to recognize that African-Americans were no longer their property, and who erected a myriad of legal, social, and cultural devices to seize back what they had lost in the Civil War, so the slave masters of this century refuse to acknowledge that they have already lost the right to impose the burden of life long toil on the 21st Century inheritors of the Legacy of Ham.

The Color Line was never about race – there is, in fact, no such things as race; it was a convenient fiction – it was about the relation of each man and woman in our society to work.

For centuries involuntary work was imposed on Africans under slavery, and, as the progress of capital advanced in this country, this imposition was converted, under conditions of competition, and, the political powerlessness of this newly freed class of citizens, to an exclusion FROM access to the industrial era means of life.

Through laws, custom, and naked violence, the former African slaves were maintained in an involuntary servitude to the planter class until as late as the mid-century, and denied equal access to modern industry.

What has happened since then (the defining influence on events even at that time) is that access to the means of life by not just the descendants of African slaves, but all the slaves of modern society – those who work for a living – are being progressively undermined by the abolition of work.

The competition for work (which, in the Twentieth Century, assumed the form of a racial divide but was never this latter divide upon any serious consideration) intensified as the natural improvement in the productivity of social labor progressively eliminated the need for work, and as this material need was succeeded by the entirely arbitrary extension of the social work day for the purpose of maximizing the extraction of surplus labor time in industry.

The entirely artificial creation of work – the deliberate manipulation of all the factors of economic life to extend your dependence on wage slavery – has become the over-riding political imperative of the moment.

Your life is being stolen from you by the very leaders in whom you have put your trust to protect you from the avaricious and rapacious vandalisms of the plunder bosses of Wall Street.

What is the expansion of the Federal Reserve balance sheets, but the expansion of the means to extend working time?

What is the stimulus plan, but the plan to stimulate you to engage in further unnecessary work?

What is the TARP, but the means to “unclog” the pipeline of debt peonage – to restart the manufacture of means by which you impose on yourself years of unnecessary labor?

nat_turnerYou are the modern slave, the despised collective property of handsomely dressed gentlemen, who pass you between themselves like Sally Hemmings was passed as a wedding gift to the new son-in-law.

This crisis is not about jobs – a job is merely the wrapper within which comes the possibility of access to the means of life.

The cost of that job to you are the hours you have to sacrifice in exchange for access to those means, and those hours are no longer set by economic necessity, but by political calculation.

Which is to say, Washington has made the political calculation that you will slave away your life for 40 hours a week in return for a job – in return, that is, for access to the means of life.

It is a well-formed calculation since, unlike your forebears, the stolen African men and women who built this nation, your acquiescence to this rape of your humanity depends not on dogs and guns, agents and fugitive slave laws, but on starvation – a contractual term so effective in its enforcement, it needn’t be mentioned or even acknowledged by one party to the other: it is assumed by both parties to be a natural law.

The problem then is not the wrapper – a job for everyone – but its content: the amount of work required in exchange for a job.

Washington, despite the Messiah’s promise of change, continues to side with Wall Street in demanding from you the longest possible duration of work in exchange for access to the means of life.

It is a duration of work which was already indefensible in the 1930s, and has only become intolerable in the intervening years, and particularly in this wretched eruption of unemployment.

Under such conditions, the demand by “progressives” for additional stimulus, such as the extension of unemployment benefits, is as bizarre and other-worldly as would have been a demand by Sojourner Truth or Nat Turner to open the western territories to slavery.

Hours of work must be reduced – there is no alternative to this!

No extension of unemployment benefits, no reform of health insurance laws, no rollout of an alleged green industry can substitute for this – all the promises of the Messiah and his economic team are as worthless as those pictures of dead presidents you carry around in your wallet.

Three times as long, and six times as deep (So far)

August 12, 2009 Leave a comment

In case you think we are exaggerating when we suggested in the last post that this recession is likely to combine the worst features of previous recessions – very long, like the recessions of 1990 and 2001, and very deep, like the pre-1990 recessions engineered by Washington, here is a second opinion:

From an interview of Nouriel Roubini on CNBC, this morning:

Q: Last week you made a speech in New York and your comments were definitely moving the markets, you said that the worst is behind but was this anything new that you said in your speech?

A: No, I did not say anything new. I was always consistent as I have been saying that the recession will last 24 months starting December 2007 and my view is going to be over only by the end of this year that is December. Last year, the optimists said that it will be short and shallow — only eight months — is now three times as long and six times as deep as the previous two and the recovery is also going to be weak.

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