- David Graeber writes that unfettered capitalism will never tame itself, but will instead need to be countered by a sufficiently strong counter-movement to seriously question its underpinnings. And Thomas Frank follows up with Graeber about the warped incentives facing workers as matters stand now:
I think the spotlight on the financial sector did make apparent just how bizarrely skewed our economy is in terms of who gets rewarded and for what. There was this pall of mystification cast over everything pertaining to that sector—we were told, this is all so very complicated, you couldn’t possibly understand, it’s really very advanced science, you know, they are coming up with trading programs so complicated only astro-physicists can understand them, that sort of thing. We just had to take their word that, somehow, this was creating value in ways our simple little heads couldn’t possibly get around. Then after the crash we realized a lot of this stuff was not just scams, but pretty simple-minded scams, like taking bets you couldn’t possibly pay if you lost and just figuring the government would bail you out if you did. These guys weren’t creating value of any kind. They were making the world worse and getting paid insane amounts of money for it.- Meanwhile, Jared Bernstein writes about the damage done to our public policy by an undue willingness to accept simplistic (but false) assumptions:
Suddenly it became possible to see that if there’s a rule, it’s that the more obviously your work benefits others, the less you’re paid for it. CEOs and financial consultants that are actually making other people’s lives worse were paid millions, useless paper-pushers got handsomely compensated, people fulfilling obviously useful functions like taking care of the sick or teaching children or repairing broken heating systems or picking vegetables were the least rewarded.
(I)t’s widely argued that government actions that set wages or regulate commerce create “inefficiencies.” Regulate an industry and capital will flee; raise the national wage floor and employers will leave the market (or, in Piketty’s world, handily substitute machines for workers). Increase a marginal tax rate and workers will supply less labor; investors, less capital. Form a union and the unionized firm will face competitive disadvantages that will put it out of business. Provide a safety net benefit to someone and they’ll work less. Tax a polluter and you’ll crash GDP. Tax a financial “innovator” and credit markets will dry up.- And Murray Dobbin comments on how the concurrent slashing of government revenues and public services is leading to dystopian outcomes.
Conversely, cut back on a tax rate, a safety net program, the minimum wage, the unionization rate, financial oversight, and growth, jobs, and liquidity will flourish.
I’ve been arguing against these positions for decades, backed by considerable empirical evidence showing that moderate changes to tax rates, minimum wages, union density, the safety net, regulatory oversight and so on trigger nothing like the disasters their opponents claim and can yield important benefits (which is not to say there are no “negative impacts” at all). Yet the bar to win the anti-interventionist argument is set remarkably low. You don’t need evidence; you can just cite “basic economics.”
As another Thomas—Pynchon—said: “If they can get you asking the wrong questions, they don’t have to worry about answers.” Progressives have all kinds of ideas to shape a more equitable primary distribution. But those ideas will never get much oxygen if we remain voluntary trapped in the cramped debate of a short-sighted economics.
- Stephen Maher reports on Stephen Harper's latest abuse of appointment processes, as the Cons ignored the advice of their own selection committee in order to appoint the least experienced and most deferential possible candidate to act as the federal Privacy Commissioner. Dean Beeby notes that the Cons are still illegally collecting background information on access-to-information requesters long after promising to stop. And Scott Harris discusses how the Cons' compulsive secrecy includes refusing to clarify even points which have long been public - such as their nine-figure payoff to Newfoundland and Labrador in an effort to push CETA.
- All of which leads into Chantal Hebert's sudden insight into the Cons' wanton destruction - even if that may be something less than news to many of us.
- Finally, Rod Sweet writes about the oil industry's attitude toward the risks of new and untested operations - and why we shouldn't be surprised when BP-style disasters result:
The rapid expansion of deep water drilling worried him. “I had ongoing concerns with the risk of deep water drilling operations, concerns that started back when I was at Chevron,” he writes.
“They stemmed from just too many things going on simultaneously within the industry. The deep water rig fleet expanded by close to 300% over several years along with much turnover between drilling contractors and so I worried about the erosion of the level of competency that we were accustomed to, particularly at the driller and tool pusher levels.
“These deepwater wells are very complicated. There are downhole conditions that even very intelligent people struggle accurately to asses. The time when you had a drilling foreman who has seen everything and knows what to do in every situation is long gone.”
In his article Lacy insists that when it comes to disasters like Macondo the assumption that ‘this won’t happen’ still pervades the industry...