Ron Paul's deficit reduction plan

No commentary on this one (I have to write a book review) but below is Ron Paul's deficit reduction plan.

http://c3244172.r72.cf0.rackcdn.com/wp-content/uploads/2011/10/RestoreAmericaPlan.pdf

Markets Crazy.. or Political?

It's something of common sense that markets are, generally speaking, apolitical, and seek economically viable assets to invest in.  Sometimes under this model, which is widely used in the financial press, markets do unpredictable and bizarre things.

Take the case of Italy.  The Financial Times of London ran an article on Thursday about Silvio Berlusconi - Prime Minister and quasi-dictator of the center-right People of Liberty Party - and his tenuous grip to power.  Berlusconi has a political rap sheet longer than most lifelong criminals (between ownership of the largest media company, ties to the mafia, sex scandals galore, charges of general political corruption, and ties to a secret society devoted to the establishment of a more authoritarian government in Italy.  Between his own problems, and his close ties to other authoritarian regimes around the region, one should think that the downfall of Berlusconi could be only seen as a victory for the liberal cause.

Naturally, the markets disagree, or at the least, do not care about such trivialties.  As the FT reports, the 51st vote of confidence facing Berlusconi yesterday (in which he barely escaped ouster) has driven the markets to "punish" the "resulting paralysis in decision-making by driving up Italy's borrowing costs to levels that are unsustainable in the long term without substantial European support."  What kind of support?  See my earlier thoughts on Christopher Alessi's comments to the CFR regarding European "fiscal integration" and its implications for sovereign decisions to preserve a social democratic state.

Later in the article Erik Nielsen of Unicredit (an Italian financial company of considerable size and influence) noted with some puzzle that while "Italy surely has a number of problems ... I fail to understand why the market continues to underestimate fundamentals and policy measures which have already been taken in Rome."  Thus, the article concludes, unfavorable investor attitudes towards Italy vis-a-vis favorable attitudes towards the UK (with a somewhat more stable conservative leadership in the midst of an agenda involving the privatization of NHS) must be the result of markets being "truly out of tune with reality."

The reader, attempting to read with some degree of a critical eye, is left to wonder whether markets truly are crazy, or whether, perhaps, markets are engaging in something of a political crusade.  Why might Britain be considered different politically?  Without claiming to be any expert on Italian or British politics, what little I know is that Britain has had a far more thorough period of neoliberalization under Conservative (and then, ironically perhaps, Labour) leadership than Italy.  An alternative way to view this phenomenon is through the lens of the on-going neoliberal war against economic egalitarianism, the public sector, and the social-democratic state in Europe.

Some interesting food for thought

Here are a couple of articles at counterpunch. Call me one of the libertarians who, as Carson says, "gets mad when they see libertarians defending" "big business" against the onslaughts of the "Dirty Effing Hippies." (Quotes rearranged by me for functional purposes.) The second article is from Sheldon Richman, editor of the Freeman. He sympathizes with the protestors and can somewhat be identified with the wing of libertarianism Carson comes from (they run in the same circles) but his article is a little more of a plumb line libertarian analysis. More commentary to come but for now its late and I am going to bed.

http://www.counterpunch.org/2011/10/14/libertarians-and-occupy-wall-street/

http://www.counterpunch.org/2011/10/14/wall-street-couldnt-have-done-it-alone/

What is "Capitalism"?

The question is important to ask because often in times as these where dissent and radical opinion have suddenly come to be almost mainstream, the question of whether the capitalist political-economy is still viable for humanity is more than a mere conceit of a few Marxist intellectuals in a coffee house near a university.  Though, perhaps, not much more.

At any rate, the question has a substantive, ideological component, but I think also an important historical component.  Everyone in the United States is familiar with the basic narrative of capitalism.  Capitalism refers to  free markets, and un-intrusive state functions.  Capitalist countries are dominated by small business - the "engine of the economy" - while rigorous enforcement of property rights encourages the development of a fair, liberal democracy, with representative government that serves the popular will.

It's almost a joke to write even though that is word for word what I was taught through grade school, and certainly in law school.  Privatization and property - the state protection of the owners of capital - encourages democracy.  Maybe back in early 2006 when I was 23 years old and eager to hang my Juris Doctor on the wall of my office in some skyscraper somewhere, that actually made sense.  In 2011, it's almost laughable.

Yet, my personal feelings notwithstanding, many people still draw this grade school distinction between 'capitalism' and 'socialism.'  The real problem with the economy, they might say, is that the state has grown too large, has intruded too far into the economy.  This is fundamentally the province of socialists.  The more educated sophists here might suggest that this begins with the well-intentioned socialist call for reform, and redistribution that elites - perhaps understood as a kind of crude socialist themselves - co-opt to insulate themselves from competition, use the state to socialize their risks while maintaining the paradigm of private profit.

The narrative seems compelling if you're only partly listening while you watch Jersey Shore or huff paint thinner.  The problem is that historically, this makes no sense.  The term capitalist was originally used merely to describe people who owned capital.  That's it. The first references to a sort of capitalist political economy were made in reference to a political system and economy that was dominated by capitalists, and this was popularized, in a critical tone, by Karl Marx (though he didn't coin the term, and he often referred more to the 'capitalist mode of production').  Therefore, in a descriptive tone, capitalism merely refers, or should merely refer if one is loyal to the etymology, to the political-economy dominated by the private ownership of capital, and widely characterized by the investment of capital, extraction of profit, and reinvestment for more profit.  One needs only read the first page of any business section in any major newspaper to see how this reflects the real world.

If the origin of the term 'capitalism' has nothing to do with democracy, free markets,  or small business, why do we think of it in those terms popularly, particularly in the United States?  There are a few answers we might consider, but in my view there is one very compelling explanation: corporate propaganda.  As a preface, this explanation is a double edged sword.  At once it is dangerous to merely assume that the beliefs of millions are purely the product of calculated attempts to deceive by corporate elites.  The effects of propaganda should not necessarily be so simplistically understood.  I would argue much of it merely involves the use and abuse of language - the construction of a relationship between emotive expressions and simple concepts. Capitalism is us, free enterprise, prosperity, competition, low prices, abundance, freedom, and democracy.  All this and more can be yours if you allow corporations to act unfettered in solely their own interests.  (For more on this process, check out Selling Free Enterprise: The Business Assault on Labor and Liberalism 1945-1960 by Elizabeth Fones-Wolf, PR!: A Social History of Spin by Stuart Ewen, and Taking the Risk Out of Democracy: Corporate Propaganda Versus Freedom and Liberty by Alex Carey).

For the first time in my life, now, it seems like the erstwhile "radical" notion of criticizing capitalism has reached the edges of mainstream politics.  Perhaps that will be a lasting feature of discourse until something somewhat extreme changes, or perhaps it will taper off if the Occupy protests cannot last the winter.  Either way, it is important to work on encouraging the use of the word 'capitalism' descriptively in any critical context.  Now there is a real opportunity to appeal to nominally conservative people who are equally fed up with the extension of American power abroad, and the dangerous links connecting Washington with finance.

Get out of Banks

As if this article is needed to drive the point home at this juncture.  Just do it, whatever few people are reading. Credit Unions are the only acceptable financial institution if you're a decent human being.

The Virtual Senate in Action

There's a concept called the 'virtual senate' in some literature on international economics and political science that is more popularly used often by Noam Chomsky.  It refers to a state of affairs when capital controls have been removed from major states allowing large lenders and investors to freely move capital from one country to another without hindrance.  In that situation, if the major institutional lenders and investors who, more or less, control capital markets are unhappy with policy in a given nation or region, they can pull their investments, and go somewhere more friendly to their narrow interests.  In a very real sense, this challenges the very basis of sovereign democratic governments by constraining the spectrum of policy decisions governments can make without facing economic disaster.

Last week, the CFR published an interview with a fellow from the Peterson Institute for International Economics named Christopher Alessi.  There are a couple key notions that even the publisher of the website found particularly important to note.  First, when asked why the European sovereign debt crisis is causing such "extreme global market volatility," Mr. Alessi replies that it is the "inability of the European authorities to act ... combined with the generalized crisis of confidence in Europe that is creating this incredible volatility that we are seeing in the global markets."  Unpacked, this statement demonstrates the virtual senate in action.  On the one hand, we could interpret him to mean that investors and lenders are like frightened children, unable and unwilling to commit their resources to economic activity in European and US markets.  When seen in that light, it seems unlikely that such a characterization is accurate when describing the nature of inconceivably large banks and multinationals.  The second, and in my opinion, more accurate interpretation of this statement is that because European authorities have been unwilling to commit to a large enough bailout for banks, and coincident severe social austerity (e.g., the end of the European social democratic state as we know it), investors and lenders have fled elsewhere - emerging markets who are experiencing good growth, US government debt, gold, etc.  I think it would be quite naive of us to perceive this sentiment as anything but a statement about the political aspirations of lenders and investors who want to keep the Euro, and reshape the political nature of the European states.

In some respects, this (perhaps) radical interpretation of such a seemingly benign statement is vindicated by his economic prescriptions.  Naturally, he calls for European authorities to "recapitalize" the banking system, and "stabilize the markets."  I was just reading a paper by Gerald Epstein and Thomas Ferguson last night on the Federal Reserve's response to the 1929 market collapse in the US, and virtually the same language, at least in the latter, was used to describe the "stability" brought to the bond markets, by propping up railroad bonds that amounted to a total of 1/3rd of major New York banks' debt investments.  In other words, and very simply, Mr. Alessi is calling for a bailout of private banks.  Naturally, at no point does Mr. Alessi contend that the banks should then be placed under national or quasi-national control, to be disassembled in an orderly fashion, or to serve the interests of policy rather than profit.  That, I should think, is truly a radical notion that cannot even be conceived if you are educated enough to work at the Peterson Institute.  Indeed, when considering whether tobail out Greece and force banks to take a large, but not catastrophic, loss, or to "recapitalize" the banks so that they are able to sustain a "more thorough restructuring in Greece" (interpret as you will), he suggests the latter because "the costs of having an undercapitalized banking system are too big."

As a final suggestion, he notes that "you need to have more fiscal integration coming out of this" and that "you have considerably more fiscal integration already."  For Mr. Alessi, the crisis has, at "a very rapid pace" already encouraged more economic integration, and notes that in the long run there might be "euro bonds."  I think his implications here are quite clear.  There has been more fiscal integration because countries like Greece, Spain, Italy, and France have all capitulated to the pressures of the central, undemocratic Eurozone leadership to implement unpopular policies of austerity.  That might be a step more towards the federated US model.  With greater fiscal integration on the horizon for the neoliberal revolutionaries in Europe, and with the virtual senate at work to undermine any European politicking for any end but the needs of profit, one is left to wonder if the post-war social democratic state in Europe is in serious danger of extinction.

Herman Cain is a douche.

I will keep my first post short and sweet. I'm beginning to believe, or rather have always believed, that the more vigorous a politician defends himself the more likely it is that he is lying. Cain almost goes ballistic when Ron Paul pointed out his past statements about the Fed tonight. Granted, Cain didn't say the word "ignorant," but he did say that the people who are calling for an audit "don't know enough about it." Typical republitards are hilarious sometimes.

http://www.huffingtonpost.com/2011/10/11/ron-paul-herman-cain-fed-audit-gop-debate_n_1006228.html

and one more just to demonstrate how much of a republitard this guy is. This one gives the whole context of what Cain said about the federal reserve.

http://www.youtube.com/watch?v=gTUseC3-Q8E

What's this place about?

It's more likely that the readership here will be pretty narrow, but in the off chance that others find this place, here's a quick primer on what to expect.

There are four contributors to this blog, each with similar but distinctly different political, economic, and social views.  The point of this blog is to foster discussion and awareness about current events around the world, historical events that may seem interesting or relevant in some way, political and social theory, or relative issues.  It's a broad canvas to cover, but that's part of the appeal.