The new normal: Links & comments 7/29/14

Soak the Rich: An exchange on capital, debt and the future by David Graeber and Thomas Piketty, translated and reprinted by The Baffler.

David Graeber is an anthropologist and radical anarchist known for his book, Debt: the First 5,000 Years, which looks at the origins of money, taxes and debt.   Thomas Piketty is a politically moderate economist known for his book, Capital in the 21st Century, which looks at the persistence of gross inequality during the past few centuries.

I admire them for their opposite virtues—Graeber for his bold and original speculation, Piketty for his research and his refusal to assert anything that can’t be backed up by data.

Graeber believes the capitalist system is doomed.  Once it goes away, people will have a chance to create a new system without fear of bosses or police, and Graber does not see any point in trying to describe the specifics of what that new system will be.

Piketty says history indicates that capitalism has proved amazingly resilient in the face of change, and that there is no reason to think this time is different.  Furthermore, he said, any society has a need for capital, the means to invest accumulated wealth into the means of creating new wealth.  (This is a different definition of capital from the one in his book).  His attitude toward capitalism is: Mend it, don’t end it.

One thing they do agree on is the centuries-old tendency for wealth to be concentrated in a few hands, and the danger this poses to a democratic society.

On the Causes of Investment Decline in the U.S. Economy by Dr. Jack Rasmus, the Green Party’s shadow Federal Reserve chair.  Hat tip to Bill Harvey.

I have long thought that increasing the earning power of average Americans would make many things fall into place.  If people had more money to buy stuff, merchants would sell more stuff and manufacturers would make more stuff, and this would be to everybody’s benefit.

Jack Rasmus suggests that maybe this isn’t so.  Maybe getting people into debt and putting the squeeze on them is more profitable that creating useful goods and services.  If that’s so, we can’t look to private enterprise to recreate a high-wage, full-employment economy.

His solution is a massive public works program, which I agree is needed, but doesn’t address the problem he describes.

Defending Trade Unions While the Justices Are Away by David Coates.  Hat tip to Labor News in Rochester, NY.

Labor unions helped maintain American prosperity in the mid-20th century by fighting for good wages and job security.  But the union movement is handicapped by laws and court decisions that increasingly restrict unions while freeing corporations of responsibility.

In Harris v. Quinn, the Supreme Court ruled that home health-care workers in Illinois could not be required to pay dues the Service Employees International Union, but they were still entitled the benefits of the SEIU contract and to SEIU representation.  It is as if the Supreme Court ruled that I could not be required to pay my Rochester Gas and Electric bill, but RG&E is still obligated to supply me with gas and electricity.

Chris Dodd Warns of Coalition Between Populist Democrats and Republicans by Zach Carter for the Huffington Post.

Ex-Senator Chris Dodd, a Connecticut Democrat, gave a speech warning against trying to strengthen the Dodd-Frank financial reform bill.   He said in a speech to the Bipartisan Policy Center that opening up the bill to amendments would open a “Pandora’s box” that would be dangerous the financial services industry.

He said warned against right-wing Republicans and left-wing Democrats teaming up against Wall Street.   He probably was thinking of a bill co-sponsored by Senator Sherrod Brown (D-Ohio) and David Vitter (R-Louisiana) to break up the “too big to fail” banks, an unacceptable type of bipartisanship.  Dodd said breaking up big banks is unnecessary.

As Court Fees Rise, The Poor Are Paying the Price by Joseph Shapiro for National Public Radio.

The criminalization of poverty by Radley Balko for the Washington Post.

A majority of U.S. states have recreated the equivalent of debtors’ prisons.  They are trying to make their criminal justice system self-financing by charging fees for public defenders, the cost of a jury trial, room and board for jail and prison time, and parole and probation costs.   Poor people who can’t pay these fees go to jail, even though this has been ruled unconstitutional.

 

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