Sunday, September 30, 2012

The End of Loser Liberalism

The End of Loser Liberalism

By Dean Baker

Book Review

By Richard Edward Noble

Dean Baker is an economist. He earned his B. A. from Swarthmore College and his Ph.D. in economics from the University of Michigan. He is currently co-director of The Center for Economic and Policy Research.

He has written a bunch of books. I downloaded this one for free. It is the first book by Mr. Baker that I have read but it won’t be the last.

Dean Baker calls himself a liberal progressive. Of late I have been referring to myself as a “progressive.” Mr. Baker is far more progressive than I am. He’s another “idea” man. And he does have ideas. At some points in this book I was laughing openly. Not at Mr. Baker but at his unique ability to turn the tables upside down and backwards on the smart crowd.

What a book this is!

The simplicity of many of his ideas makes a reader wonder why he never thought such things.

Mr. Baker is a free market man … I think. But he takes these free market principles and turns them back onto the hands and heads that have been feeding them to us all for these many confusing years. He makes an art of “quid pro quo.”
How many times have all of us worker types heard the sorrowful whine, But what can I do? The free market dictates.

When our paychecks are cut, it’s the free market competition. When we lose our jobs it free market competition. When they close down the plant and take it overseas, it’s the free market Global economy. When they take our home, it is simply the free market at work. When we can’t afford medical care, it is once again a simple matter of free market competition. Next we will have to dig our own graves preemtively to save the cemeteries on labor costs.

It’s the bottom line. It’s the way things are. It’s inevitable. It’s the way the free market operates.

It’s like the old Greek adage, “Magister Dixit, the Master has spoken.”
Well the gods may have stipulated and the Master of the free market may have spoken but the Master has a new interpreter, Dean Baker.

The Professor, as a free market advocate, takes these so called free market aphorisms and applies them to rich and poor alike, to the humble and the powerful, to the panhandler and the professional.

There were times when I thought my man Baker was just putting the world on, kind of a tongue in cheek thing. But if the man is joking the joke is on the rich, the powerful, the established and the smug.

This guy is good. He is not to be taken lightly. He gives details. Some of his solutions are truly frightening but frightening or not they are often more than justified and long overdue. Many of the ideas suggested, for the most part, have already been used and used regularly with religious zeal and conservative vindictiveness … but only from the top down, never from the bottom up. They have been applied to the working class, the poor and the middle class without compassion in a strict business, free market approach. Mr. Baker responds in kind. He’s tough but very enlightening. He goes to the gut of the matter and dives in with some very heavy body blows. Lots of good stuff here for the liberal arsenal.

Mr. Baker is a progressive for progressives. He has published several other books that I am definitely interested in reading that deal with the truth about Social Security, the Consumer Price Index, how the rich manipulate the system to stay rich and make themselves richer. Looks like some great stuff.

I will close this review with a few paragraphs taken from the conclusion of “The End of loser Liberalism.”

"It is not by luck, talent, and hard work that the rich are getting so much richer. It is by rigging the rules of the game: From a political perspective it is much better to say the progressive agenda is about setting fair rules for the market. The argument that highly paid professionals should face the same international competition as factory workers is a compelling one, and more arresting than the argument that we should redistribute money from the winners to the losers.

“Since public debate is so badly misinformed on almost all economic issues, most people will be hearing these arguments for the first time. Few realize that an agency of the government, the Federal Reserve Board, actively throws people out of work to fight inflation. Few know that the loss of manufacturing jobs and the downward pressure on wages of manufacturing workers are not accidental outcomes of trade agreements but rather the whole basis for them. (The enigma of trade is that it can make a whole country richer and yet most of its people poorer.) And hardly anyone understands that a higher valued dollar intensifies the hurtful effect of trade by putting further downward pressure on the wages of workers subject to international competition.

“Our Federal Reserve Policy, trade policy, and dollar policy redistribute income upward from the less advantaged to those who disproportionately control the nation’s wealth and political power. Each policy is designed for this outcome. Knowing this economic reality is not the same as changing it, but it is an important first step.

“Progressives have to start playing hardball. The right is not just trying to win elections; it is working to destroy the basis of progressive opposition. Breaking private sector unions in the 1980’s was not just getting lower cost labor; it was also a deliberate effort to undermine one of the pillars of progressive politics in the United States. Recent efforts at the state and federal level to weaken public sector unions are not about saving money for the government; they are deliberate efforts to destroy the strongest remaining segment of the labor movement.”

The author also explains the foolishness for attempts to privatize Social Security and Medicare. With regards to Social Security the author matter-of-factly states, “The only value question here is whether it is better for workers to keep their money or for the financial industry to have it.”

And Medicare: “The issue in this case is simply whether retired workers want to have 34 trillion pulled out of their pockets and handed over to the insurance and health care industries.”

This author has the brains, the knowledge and a lot of in-your-face arguments for the progressive side of the political spectrum.
Read Dean Baker’s “The End of Loser Liberalism” and load up. He’s got the ammunition and the firepower, speaking Republicanly.

Friday, September 28, 2012

The Truth About The Obama Phone

The Truth About The Obama Phone: pOn Thursday, the Drudge Report splashed a video of an undentified woman who claims to have recieved a free “Obama Phone.” The video has captured the attention of the right online, who see it as proof that Obama supporters are dependent on government. On his show today, Rush Limbaugh weighed in: So these are the [...]/p

Monday, September 17, 2012

Summer on the Moon - Adrian Folgelin

Summer on the Moon

By Adrian Fogelin

Book Review

By Richard E. Noble

This is a book about two good pals, Socko and Damien. They are teenagers stuck in poverty in a tenement inner city. They hang out on rooftops, play in broken elevators and idle their way in and out of trouble.

Junebug, a skinny, female pre-adult, is the third member of this tiny, inner city gang.

Junebug has had herself confiscated by “Rapp,” local gangsta wannabe who, along with “Meat” and several others, dominate the streets and rooftops in the immediate ghetto area.

A mixed sort of Dickensian good fortune strikes Socko and his struggling, hard working mom, Delia, and they move into “Moon Ridge Estates” – hence the title “Summer on the Moon.”

From here on the story rolls into mystery, crime, romance and adventure and is packed with interesting, realistic characters.

A great tale designed for young people but plenty of interest for any adult, male or female.

I hate to use the old cliche about a book being too good to put down but Adrian Folgelin certainly captured me. I put aside all my other reading and didn’t stop reading “Summer on the Moon” until I came to the last page.

For the conscientious parent, there is nothing in this story to shock or corrupt any child, no bad language or any other socially unredeaming quality.

I enjoyed reading this book very much. I don’t want to elaborate on any of the plot intrigues and spoil the story for future readers.

I have now read two of Adrian Folgelin’s books. “Sorta Sisters” was my first exposure to this author. She is very, very good. A talented and imaginative writer who specializes in books for young adults. She has written several. I will be reading more of Adrian Folgelin in the future.

Wednesday, September 12, 2012

Wednesday, September 05, 2012

Hooked on Books - J.K. Galbraith

A Short History of Financial Euphoria

John Kenneth Galbraith

Book Review

By Richard E. Noble

This book is indeed a “short” history of Financial Euphoria. I would have liked a much longer and more detailed history by Mr. Galbraith.

In a previous book, “The Great Crash 1929,” much of what is in this book has already been expressed. In fact, I think most of this work was excerpted directly from the “The Great Crash” verbatim.

The advantages of this little book are that all these cases of speculative mania and fraud are lumped together in this one volume with updated commentary and some modern day comparisons. The author covers these type incidences up to the crash of 1987 in the later part of the Reagan administration.

The author makes the point that all of these mania, panics or crashes have similar components. They are all based on speculation and leveraging.

The mania is attributed to basic insanity and the misguided notion that because someone is rich he must therefore be wise.

“In the first forward to this volume, I told of my hope that business executives, the inhabitants of the financial world and the citizens of speculative mood, tendency or temptation might be reminded of the way that not only fools but quite a lot of other people are recurrently separated from their money in the moment of speculative euphoria. I am less certain than when I then wrote of the social and personal value of such a warning. Recurrent speculative insanity and the associated financial depravation and larger devastation are, I am persuaded, inherent in the system. Perhaps it is better that this be recognized and accepted.”

There are two types of speculators who invariably get involved in these troublesome episodes or “bubbles.”

“There are those who are persuaded that some new price-enhancing circumstance is in control, and they expect the market to stay up and go up, perhaps indefinitely. It is adjusting to a new situation, a new world of greatly, even infinitely increasing returns and resulting values. Then there are those, superficially more astute and generally fewer in number, who perceive or believe themselves to perceive the speculative mood of the moment. They are in to ride the upward wave; their particular genius, they are convinced, will allow them to get out before the speculation runs its course. They will get the maximum reward from the increase as it continues; they will be out before the eventual fall.”

He points out that warnings about the temperamental nature of the present boom are never heeded and those who offer them are looked upon with derision.

“In the winter of 1929, Paul M. Warburg, the most respected banker of his time and one of the founding parents of the Federal Reserve System spoke critically of the then current orgy … and said that if it continued, there would ultimately be a disastrous collapse … He was held to be obsolete in his views, ‘he was sandbagging American prosperity.’”

This danger of speaking out against the speculative orgy as it is taking place often makes the bearer of such tidings the accused when the bubble finally bursts. It is a lose/lose situation in Mr. Galbraith’s estimation. Yet he points out that he did the same himself in 1986 … to no avail and much acrimony.

So the speculative bubbles come and go and are endemic to the capitalistic system according to the Professor. He also suggests that they are cyclical. They reoccur every twenty or thirty years. They are directly proportional to the amount of time necessary for the previous fiasco to be forgotten and a new generation of semi-educated fools take their positions in the financial community.

“The circumstances that induce the current lapses into financial dementia have not changed in any truly operative fashion since the Tulipomania of 1636-1637. Individuals and institutions are captured by the wondrous satisfaction from accruing wealth. The associated illusion of insight is protected, in turn, by the oft noted public impression that intelligence, one’s own and that of others, marches in close step with the possession of money…”

The mistaken notion that since a person is rich he must be intelligent is emphasized over and over throughout the short text.
So what is Mr. Galbraith’s solution?

“The only remedy, in fact, is an enhanced skepticism that would resolutely associate intelligence with the acquisition, the deployment, or, for that matter, the administration of large sums of money … there is the possibility, even the likelihood, of self-approving and extravagantly error-prone behavior on the part of those closely associated with money … a further rule is that when a mood of excitement pervades a market or surrounds an investment prospect, when there is a claim of unique opportunity based on special foresight, all sensible people should circle the wagons; it is the time for caution … Yet beyond a better perception of the speculative tendency and process itself, there probably is not a great deal that can be done. Regulation outlawing financial incredulity or mass euphoria is not a practical possibility.”

This conclusion I find very interesting and extremely disappointing. After all his great insight and explanation of the circumstances precipitating these speculative fiascos he closes with: Regulation outlawing financial incredulity or mass euphoria is not a practical possibility.

This conclusion appears somewhat demented also. Mr. Galbraith, it appears, has completely forgotten that in most of these cases a crime was committed and that the euphoria involved was not inclusive of the masses, as he states, but of a select group of people within the masses reigning in the financial community.

The Tulipomania is rather unique. It seems to be the perfect example of innocent mass insanity. But most of the other cases involve crime and criminal personalities not simply a massive delusion. There was swamp land in the 20’s in Florida involving everyone’s favorite con-man Charles Ponzi. There were gold mines that didn’t exist and were never worked or mined. There were worthless stocks and bonds and real criminals involved in the various scams.

During the course of the book the author mentions that some of these individuals were punished with prison sentences or ostracized, and “justifiably so” says he.
Instead of fraud he now seems to be defining the criminal behavior involved in each of these scandals as “inciting financial incredulity or mass euphoria” which, I agree, would be difficult to prosecute.

Where is his outrage for the crimes and criminals involved?

I find it interesting to note that if a man robs a corner store with a gun and steals one hundred dollars, he will most likely end up in prison. The man or the men who rob millions of innocent people of their assets through fraud and other criminal shenanigans are given an indifferent shrug by Mr. Galbraith. “Oh dear, what to do?” seems to be the gist of it.

In our last scandal that nearly collapsed the economy of the entire world we clearly had criminal fraud, falsifying of documents, false testimony, false accounting procedures and figures and basic embezzlement.

Most of us were victims yet not participants in the speculative mass euphoria – just as in 1929 and in other of these big financial calamities.

We bought nothing and sold nothing. Yet when the final tabulations were given we lost tens of thousands, and some of us hundreds of thousands on our home equity and life savings. Our retirement pensions were looted.

A property that was estimated before the euphoria at $125,000 may now be estimated at $50,000 or less.

Because of the indulgences of the speculative euphoria in the financial and real estate sector we are all made to suffer and pay dearly. And the bandits are not even being pursued by a posse.

It seems that this was the mindset of those involved. They knew they were acting criminally but made the calculation that as long as the majority in their industry participated in the crime, they would be in effect “too many to be prosecuted.”

It now appears that they were correct. We have an obvious case here of “Crime and No Punishment.”

This indicates to me that this criminal behavior is far from over. The thief who is successful in his thievery is encouraged to rob again. The next massive robbery seems to me to be just a matter of time and manipulation.

At the beginning of this review I pointed out that Mr. Galbraith suggested that all of this business is inherent in the capitalist system – it is not only systemic but endemic. And now we find that it is also incurable and beyond regulation and justice.
So then we are to sit back and periodically – every twenty years or so – let our wealthier sector rob us of all or part of whatever it is we thought to be our little nest egg or share in this great society. Crime on the part of certain groups among us is inevitable and any type of preventative attempt on the part of us or society is futile.

If that is the reality of the capitalistic system, then maybe it is time to take a closer look at this capitalist system.
This is like saying: Men will rape women. So girls, ready yourselves for the event and get used to it.

This is very poor logic coming from a very intelligent man.

I need a better solution than what the good Professor is offering here.

Unfortunately, Mr. Galbraith died before this last economic disaster. I wish he lived to tell us his thoughts on this situation.