Transcript

Transcript

An Austerity Success Story in Slovenia

By Megan Greene, Bloomberg News

Jun 3, 2013 6:00 PM ET

Slovenia was among the first euro-area nations to run afoul of the macroeconomic imbalance procedure, a mechanism created in 2011 to monitor compliance with the currency union’s new rules. In April, the EU flagged the country’s high degree of corporate indebtedness. More than half of bank loans in Slovenia are to the nonfinancial corporate sector. Of these, more than 30 percent are nonperforming.

The Slovenian government responded with an ambitious reform program. Among other things, it pledged to inject 900 million euros ($1.18 billion) of capital into its three largest banks, and to move soured assets from these lenders to a bad bank, the Bank Asset Management Company, starting in June. Slovenian Finance Minister Uros Cufer also agreed to bring in an external auditing company to conduct an asset-quality review of the nation’s banks and to verify the size of the hole in this sector.

To raise money for the bank recapitalization, the Slovenian government announced it would sell 15 state-owned enterprises. This is even more ambitious than the Portuguese privatization program, widely considered to be the model for struggling euro-area governments.

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Even in the worst-case scenario, the cost of recapitalizing the banks and funding the bad bank amounts to no more than about 10 percent of Slovenia’s gross domestic product. This would increase the government’s debt burden to about 75 percent of GDP, still less than that of most other euro-area governments, including Germany.

That said, the trends in Slovenia are worrisome. Public debt has more than doubled from 22 percent of GDP in 2008 to almost 55 percent in 2012. This is partly because an economic slump, expected to continue for at least another year, has been eroding the denominator, GDP. The share of nonperforming corporate loans at Slovenia’s three largest banks tripled from about 10 percent in 2009 to 30 percent in 2012. The banks’ distress will keep cutting into lending, pushing still more corporate borrowers to the brink.

First of all I know the hypocritical concern about government debt and deficits is a pile of steaming, stinky manure.

That said I think we can all agree that subsidizing businesses that are already making incredible profits and paying their executives princely sums is a huge waste of money that could easily be spent on worthwhile things like bridges and public transportation, teachers and firemen and police; and this is true whether it’s the mere Billions that go to Gas and Oil or the Military Industrial Complex, or the TRILLIONS the Banksters tap at the Fed Discount Window.

Or even the paltry $500 Million that Bass Pro Shops get from State and Municipal Governments in tax breaks and infrastructure improvements for stores and jobs that never materialize.

In case you are unfamiliar with this enterprise, it’s basically the WalMart of outdoorsy stuff with the added kick of upscale presentation like indoor fishing ponds, the kind of place you can pick up your cammo and canoe in one stop.

You can also buy a Glock with a 40 round clip and some armor piercing or hollow points to fill them for huntin’ varmints.

All in all a triumph of entrepreneurial capitalism with annual sales of some $2.6 Billion and worth almost $3 Billion, all privately held by John L. Miller.

Bass Pro Billionaire Building Megastores With Boats, Guns

By Seth Lubove, Bloomberg News

Jun 3, 2013 4:55 PM ET

Bass Pro’s critics complain about the company’s practice of accepting municipal subsidies to build megastores in their communities, often with the understanding they would create jobs or increase tax revenue.

The Public Accountability Initiative, a Buffalo, New York-based research group, estimated in a 2010 report that Bass Pro-anchored retail projects had won more than $500 million in taxpayer subsidies.

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“Far from being surefire, Disney World-type attractions, Bass Pro stores often fail to spur growth and do not produce outsize economic advantages for the cities that subsidize their arrival,” the Public Accountability Initiative said in its report.

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In Buffalo, Bass Pro was poised to receive subsidies of $35 million to build a store in Canal Side, a 20-acre historic area, according to the Erie Canal Harbor Development Corp. After nine years of talks, the company pulled out in July 2010, following the Public Accountability Initiative report and a lawsuit filed against the company and municipal agencies by a group of citizens complaining about the subsidies.

“It’s sort of funny because they had had a lot of success in the local media in getting their story out,” said Kevin Connor, director of the Public Accountability Initiative.

Bass Pro said in its statement to Bloomberg News that because of “development challenges,” it gave up after spending $1 million in a good faith effort to locate in Buffalo.

The criticism was revived this year in Florida’s Hillsborough County, where commissioners debated whether to spend $6.25 million on road improvements to attract a Bass Pro store to Brandon. They approved the deal in February, despite complaints by small businesses that a larger competitor was being subsidized by the government.

Oh and his hiring practices are also discriminatory-

Bass Pro was sued in 2011 by the U.S. Equal Employment Opportunity Commission, which accused the company of discrimination against blacks and Hispanics in its hiring. While Morris isn’t named as a defendant, he’s accused in the complaint of condoning the hiring practices.

According to the third amended complaint filed in federal court in Houston on April 15, out of 14,374 employees hired during the EEOC’s administrative investigation, only 995, or 6.9 percent, were black. Only 8.4 percent, or 1,207, were Hispanic. Its investigation period ranged from 2005 to 2009, although it varied for certain stores.

The Banality of ‘Don’t Be Evil’

By JULIAN ASSANGE, The New York Times Sunday Review

Published: June 1, 2013

“THE New Digital Age” is a startlingly clear and provocative blueprint for technocratic imperialism, from two of its leading witch doctors, Eric Schmidt and Jared Cohen, who construct a new idiom for United States global power in the 21st century. This idiom reflects the ever closer union between the State Department and Silicon Valley, as personified by Mr. Schmidt, the executive chairman of Google, and Mr. Cohen, a former adviser to Condoleezza Rice and Hillary Clinton who is now director of Google Ideas.

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The book proselytizes the role of technology in reshaping the world’s people and nations into likenesses of the world’s dominant superpower, whether they want to be reshaped or not.

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It is not surprising that a respectable cast of the world’s most famous warmongers has been trotted out to give its stamp of approval to this enticement to Western soft power. The acknowledgments give pride of place to Henry Kissinger, who along with Tony Blair and the former C.I.A. director Michael Hayden provided advance praise for the book.

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The authors offer an expertly banalized version of tomorrow’s world: the gadgetry of decades hence is predicted to be much like what we have right now – only cooler. … Commodities just become more marvelous; young, urban professionals sleep, work and shop with greater ease and comfort; democracy is insidiously subverted by technologies of surveillance, and control is enthusiastically rebranded as “participation”; and our present world order of systematized domination, intimidation and oppression continues, unmentioned, unafflicted or only faintly perturbed.

The authors are sour about the Egyptian triumph of 2011. They dismiss the Egyptian youth witheringly, claiming that “the mix of activism and arrogance in young people is universal.” Digitally inspired mobs mean revolutions will be “easier to start” but “harder to finish.” Because of the absence of strong leaders, the result, or so Mr. Kissinger tells the authors, will be coalition governments that descend into autocracies. They say there will be “no more springs” (but China is on the ropes).

The authors fantasize about the future of “well resourced” revolutionary groups. A new “crop of consultants” will “use data to build and fine-tune a political figure.”

“His” speeches (the future isn’t all that different) and writing will be fed “through complex feature-extraction and trend-analysis software suites” while “mapping his brain function,” and other “sophisticated diagnostics” will be used to “assess the weak parts of his political repertoire.”

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The advance of information technology epitomized by Google heralds the death of privacy for most people and shifts the world toward authoritarianism. … But while Mr. Schmidt and Mr. Cohen tell us that the death of privacy will aid governments in “repressive autocracies” in “targeting their citizens,” they also say governments in “open” democracies will see it as “a gift” enabling them to “better respond to citizen and customer concerns.” In reality, the erosion of individual privacy in the West and the attendant centralization of power make abuses inevitable, moving the “good” societies closer to the “bad” ones.

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THE writing is on the wall, but the authors cannot see it. They borrow from William Dobson the idea that the media, in an autocracy, “allows for an opposition press as long as regime opponents understand where the unspoken limits are.”

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This book is a balefully seminal work in which neither author has the language to see, much less to express, the titanic centralizing evil they are constructing. “What Lockheed Martin was to the 20th century,” they tell us, “technology and cybersecurity companies will be to the 21st.” Without even understanding how, they have updated and seamlessly implemented George Orwell’s prophecy. If you want a vision of the future, imagine Washington-backed Google Glasses strapped onto vacant human faces – forever.

Obama’s Covert Trade Deal

By LORI WALLACH and BEN BEACHY, The New York Times

Published: June 2, 2013

THE Obama administration has often stated its commitment to open government. So why is it keeping such tight wraps on the contents of the Trans-Pacific Partnership, the most significant international commercial agreement since the creation of the World Trade Organization in 1995?

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This covert approach is a major problem because the agreement is more than just a trade deal. Only 5 of its 29 chapters cover traditional trade matters, like tariffs or quotas. The others impose parameters on nontrade policies. Existing and future American laws must be altered to conform with these terms, or trade sanctions can be imposed against American exports.

Remember the debate in January 2012 over the Stop Online Piracy Act, which would have imposed harsh penalties for even the most minor and inadvertent infraction of a company’s copyright? The ensuing uproar derailed the proposal. But now, the very corporations behind SOPA are at it again, hoping to reincarnate its terms within the Trans-Pacific Partnership’s sweeping proposed copyright provisions.

From another leak, we know the pact would also take aim at policies to control the cost of medicine. Pharmaceutical companies, which are among those enjoying access to negotiators as “advisers,” have long lobbied against government efforts to keep the cost of medicines down. Under the agreement, these companies could challenge such measures by claiming that they undermined their new rights granted by the deal.

And yet another leak revealed that the deal would include even more expansive incentives to relocate domestic manufacturing offshore than were included in Nafta – a deal that drained millions of manufacturing jobs from the American economy.

The agreement would also be a boon for Wall Street and its campaign to water down regulations put in place after the 2008 financial crisis. Among other things, it would practically forbid bans on risky financial products, including the toxic derivatives that helped cause the crisis in the first place.

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So why keep it a secret? Because Mr. Obama wants the agreement to be given fast-track treatment on Capitol Hill. Under this extraordinary and rarely used procedure, he could sign the agreement before Congress voted on it. And Congress’s post-facto vote would be under rules limiting debate, banning all amendments and forcing a quick vote.

Ron Kirk, until recently Mr. Obama’s top trade official, was remarkably candid about why he opposed making the text public: doing so, he suggested to Reuters, would raise such opposition that it could make the deal impossible to sign.

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Whatever one thinks about “free trade,” the secrecy of the Trans-Pacific Partnership process represents a huge assault on the principles and practice of democratic governance.

New Economic Perspectives continues to produce outstanding work.  This particular piece is a 2 part study (so far) by Michael Hoexter of Neoliberal economic philosophy and its apologia for what is nothing more than rank Class Warfare of the .1% against the 99.9%.

While I am highlighting what I consider the most salient points I strongly urge you to read the original which is not as wonky or hard to grasp as you might expect from an econo-blog.

Like a Wasting Disease, Neoliberals, Libertarians & the Right are Eating Away Society’s "Connective Tissue&quot – Part 1

By Michael Hoexter, New Economic Perspectives

May 29, 2013

In an industrial or post-industrial society, a civilization with a complex division of labor dispersed throughout a network of metropolitan regions connected with each other and with smaller cities and rural areas, a class of connecting goods and services is required to keep the society and economy cohesive and functioning.  Unlike the goods bought and sold on markets, these mediating or connecting goods are not themselves often objects of desire for purchase by those who use or otherwise benefit from them. In the hypotheses of social theorists and politicians influenced by neoclassical economic ideals, these goods, they think, ought to be delivered via markets and people ought to pay directly for them in market-like cash transactions. As it has turned out in reality, without a social and political commitment and social pressure to fund these goods and services, individuals in isolation and businesses as a group tend to want to “free ride” and not pay for connective goods and services that are usually the frame but not the focus of everyday consciousness in a modern society. Despite the lack of consistent private markets for most connective goods and services, these “in-between” goods and services are vital and fundamental to the existence and maintenance of something like a civilization, a livable complex society with a strong economy.

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If such connections were owned and controlled entirely by profit-minded corporations as has been flirted with over the past few decades, they could easily strangle the economy via the exertion of monopoly power and pricing.  The resulting “tollbooth economy” would be a neofeudal outcome, with owners of infrastructure exacting tolls on commerce and on society as a whole as did the feudal lords a millennium ago.  This is why government has been, in the successful mixed economy model that emerged during the 20th Century, the most common supplier, owner and operator of critical portions of the society’s infrastructure, the “in-between” places that connect people’s and corporations’ private properties.  The strong mixed economy model, typified by the European social democracies, Australia, the mid-20th Century US, and Canada, with a government regulating the private sector and providing many vital services, is actually the only successful model of a complex industrial or post-industrial society and economy.  Departures from a strong mixed-economy model are in the developed world necessarily speculative social experiments on a grand scale, even though these departures from what has worked in the past are almost never announced as such.

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Contemporary political disputes about the nature of government and its role in the economy can, in part, be boiled down to whether the parties involved believe that empathy is at all important to the functioning of society and, for that matter, is even worthy of attention.  The traditional Right sees empathy, except in certain extraordinary circumstances, as a sign of weakness or as a phenomenon of the “private sphere”, traditionally organized around the household and considered to be “feminized”, linked to the (misogynistic) notion of the feminine as being inferior in value to the masculine. Movements identified with the Left have tended to fight for the role of a generalized empathy with basic human needs and human solidarity within the public sphere, focusing for the most part on equal rights and “treating others as you would want to be treated”.   By contrast, the Right has often celebrated cruelty as a sign of toughness or loyalty to a cause, making room for empathy only in the context of mystical bonding rituals between for the most part men or between a leader and his followers.

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The Hidden Utopia of Neoliberalism

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There emerged various economic theories, which formed the “business end” of neoliberal policy recommendations that suggested that cutting taxes on the wealthy and loosening regulations would spur economic growth and also, in the wishful thinking of early supply-side theory, paradoxically increase tax collections because of that growth.  The model-individual within neoliberal political and economic theory was the entrepreneur or investor who needed to be given the maximal “freedom” from government intervention or influence to make judicious business or investing decisions.  The institution that should rule society according to neoliberalism was “the market”, the social area in which self-interested economic actors interacted, which should be likewise “freed” from government support or intervention.

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Neoliberalism’s worldview is utopian in this regard because neoliberals, as well as the extreme libertarian version of neoliberalism, have for the most part assumed as “givens” the already-existing benefits (to them) offered by a very substantial government and generated by the complex internetworked society it enables, yet wishing government itself would disappear or diminish, leaving its effects behind.  Thus in a form of magical thinking or “splitting“, neoliberals have come to believe as if it were accomplished fact that they can create a society that  is “purified” of government but leaves what they value from government, its products and services or their positive effects, behind, very much like Lewis Carroll’s Cheshire Cat.  Neoliberals and libertarians do not for the most part want to return to a society that is composed entirely of extended family networks, a tribal society in fact, or at least most of the Right’s mainstream does not have a taste for the likely emergence of  a Mad Max style world.

Neoliberalism, like traditional reactionary conservatism, also shuns the role of empathy in the public sphere, seeing in it a weakness or a trap, from which the “clean” purity of the market and competition would free us.  In the neoliberal worldview, everybody is almost entirely self-interested and no one, including political leaders, is doing anything out of a sense of human solidarity or obligation to humanity as a whole but rather out of a self-interested calculus. The ultimate neoliberal theory of politics, James Buchanan’s public choice theory, marginalizes or rules out the role of altruistic or public-spirited motivation in the actions of political leaders.  One wonders whether or when this theory based on neoclassical economics becomes a self-fulfilling prophecy, once the assumption of self-interest as a sole motivation in politics is made.  More altruistically minded people are certainly discouraged from entering government service within the current system of legalized corruption in American government.

Like a Wasting Disease, Neoliberals, Libertarians & the Right are Eating Away Society’s "Connective Tissue&quot – Part 2

By Michael Hoexter, New Economic Perspectives

May 29, 2013

Corporatocracy/Plutocracy:  The Neoliberal Compromise with Reality

While there are a certain number of “true believers” in the neoliberal ideal that tend to congregate around the banner of libertarianism or related concepts, a vast swath of the political class and ruling elite has been pulled to the right by neoliberalism without openly embracing its hidden utopia.  These political and economic “realists” or “pragmatists” tend to see the true believers in neoliberal ideology as either an ideological “fig-leaf” that can provide a more appealing cover for the agenda of existing large private interests or, occasionally, as a fanatical embarrassment if they show too strong a belief in libertarian ideals. The notion of defunding public services and reducing public regulation of the private sector has a powerful appeal to many corporate and wealthy interests.  So powerful is this appeal in fact that the label and concept of “libertarianism,”  which is now adopted by the most other-worldly, some would say “idealistic”, individuals in the neoliberal spectrum, was coined by a US business lobbyist in the late 1940’s.  

The potentially “messy” idealistic part of what now is called “libertarianism”, tends then in practice to be sidelined or filtered out of actual neoliberal politics and policy.  Monopolies and oligopolies are not confronted or broken up.  Government support and favorable treatment for large corporations are not cut but are often increased or rebranded and enhanced.  The neoliberal ideal is realized only insofar as the interests of the more vulnerable and less wealthy are shunted aside within the policies of government while the interests of the powerful and wealthy are promoted under the cover of the neoliberal ideal of a “streamlined” and “fiscally responsible” government. Tax burdens are cut for the wealthiest while the tax burdens of the middle and lower classes are increased.

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The seemingly universalizing philosophy of neoliberalism which bases its intellectual appeal and moral authority on the notion that it is about defending liberty, particularly liberty of the individual, then encounters a substantial inconsistency when confronted with the actions of neoliberals once they achieve political power.  The central raison d’etre of neoliberalism, defense of liberty, then appears to be more of a “belief of convenience” for most neoliberals, as the attractions of using political and military power to further their own personal agendas or the economic agendas of political patrons becomes paramount.  Even libertarians, who decry “coercion” by government, spend an inordinate amount of their energy criticizing taxation while often ignoring or minimizing the use and abuse of military force as well as infringements of human rights and civil liberties at home and abroad.  The primary liberty which concerns both them and more mainstream neoliberals is the freedom to own and exercise private property rights in as expansive a manner as possible.  It can be reasonably asserted that most libertarians are "propertarians", focused primarily on real and imagined threats to the private ownership of property.  “Freedom” becomes an ideological excuse for personal acquisitiveness and greed.

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Neoliberalism has seen some of its greatest triumphs in spreading its ideology throughout society by temporarily peeling away the traditional reactionary-Right envelope from which its original leaders emerged.  The early neoliberal leaders, Reagan, Pinochet, and Thatcher had some or all of the marks of the traditional authoritarian Right in their style of speech and the cultural preferences they expressed and represented.  Entirely different in appearance and mannerisms were the leaders of the more leftward parties that accommodated themselves to or adopted wholesale the neoliberal political-economic ideological framework.  Bill Clinton and Tony Blair in the 1990’s provided a younger “cooler” image, the image of the Baby Boom generation, while at the same time supporting a greater “marketization” of the economy and holding out the private financial and corporate economy as the model for all social organization.  Clinton, but also Blair to some degree, was known for his ability to “feel your pain”, to express a theatrical-seeming empathy for others that did not question the fundamentals of the neoliberal vision of society.

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The current US President, Obama, has functioned almost perfectly as an ersatz “Left” for media and political consumption, despite his for the most part right-of-center neoliberal policy initiatives and political philosophy.  During his tenure the sham conflict between Right and pseudo-Left has reached a fever pitch that obscures the advancing development and entrenchment of the plutocratic-corporatocratic class as the de facto rulers of the United States.  The neoliberal Right in America has become so ideologically extreme that Obama’s timid forays into corporate-friendly reform are treated as if they represent the cutting edge of progressivism by a media focused largely on politics as a series of culture and personality clashes or a “horse-race”.

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Obama’s solid support for corporate- and bank-friendly policy is hidden from the view of many behind his occasional soaring rhetoric and limp efforts at reform which to supporters, so far, have been treated as either progressive or a form of pragmatic progressivism that is the only “realistic” alternative.  A reformer more than Bush his predecessor, Obama is fundamentally a rationalizer of neoliberalism, solidly evincing the belief in the notion that government must remain a handmaiden of corporate interests and beholden to the rich for its supply of money, either for campaigns or via the notion that government acquires its money by taxation.  A generation of progressives that can remember only “identity politics” and neoliberal Presidencies of the Right and pseudo-Left  have been to date adequately fooled or cowed by Obama’s relatively sympathetic personality and cultural identity as the first African-American President to criticize him as openly and roundly as is needed.  The reticence to criticize Obama is as much an expression of racism as is the Right’s tendency to demonize him as a “Kenyan socialist”.

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Fundamentally the movement to create a better world is based on human empathy and caring for each other and for future generations.  “Left” neoliberal leaders like Clinton, Blair and now Obama attempt to consciously or unconsciously siphon off people’s empathic impulses to ends that are harmless to the neoliberal oligarchy, the dominance of the large financial institutions, multinational corporations, and very wealthy individuals.  More than even Clinton before him, Obama is a master of temporarily capturing the impulse to do good and turning it to ends that fundamentally will not change the basis of the current corrupt social-economic order.

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As I am finishing the writing of this long piece, we have had as clear a demonstration as any of the decades long attack on the connective function of government works in the collapse of the fifty year old I-5 bridge over Washington’s Skagit river.  This bridge and Interstate 5 tie the North America’s Pacific Coast more closely together.  That, in an earlier era, government, a government led by the more conservative American political party, the Republicans, bound Americans closer together via the building of the Interstate system and related infrastructure is an achievement that seems alien in the neoliberal era.  That the existing, outdated infrastructure of the US is now in dangerous disrepair is a tribute to the thirty year dominance of neoliberalism in American politics as well as the faulty, dominant ideas about government’s role and government finance that spring from it.

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After toying with climate change as an issue a number of times during his Administration, Obama is now flirting with the issue once again, calling out the extreme Right in Congress on their denial of human-caused global warming.  Obama could attempt to yoke the issue once again to his neoliberal vision of a government and society beholden to large private interests, while suggesting that it is an impossibility that we would have a government that steers independently of, for instance, the economic interests of the fossil fuel industry, as well as other incumbent industries.  He is capable of perverting this issue as he has others or flirting with and exhausting well intentioned people.  We will need to persist in viewing the world as it is, and resist the pull of leaders who attempt to hijack our better impulses for their own or their patrons’ purposes.

We will need in too short an order, to repair much of the damage that has been inflicted by neoliberal political actors upon our societies’ cohesiveness and ability to coordinate action.  All this needs to happen before it is too late for a recognizable human civilization to thrive on this planet.