Since its creation in 2005, the $34 billion lending program has provided 33 companies with government financing for alternative energy projects. The program has had some high-profile successes. It's helped set up 13 solar energy firms that are actively selling power into the grid.
But failed start-ups—namely Solyndra, Fisker Automotive and First Solar, which all received funds from the green lending program—have left taxpayers in the red.
In response to questions from CNBC.com, an energy department spokesman said expected losses on funding to VPG, Solyndra and others "only represent about 2 percent of our overall loan program portfolio of approximately $34 billion, and less than 10 percent of the loan loss reserve Congress set aside for the program."
Why did Solyndra fail? Because Obama was foolish enough to believe that venture capitalists were the real deal, the real innovators, the sung heroes of capitalism. He believed in that nonsense and all the other myths radiating from Silicon Valley. But as the economist Mariana Mazzucato points out in Entrepreneurial State (I have made my notes and clippings of this book public over here), it was not the state but venture capitalists who abandoned Solyndra as soon the road ahead looked rough...
The example of Solyndra illustrates how the sudden exit of VC [venture capitalists] can also ruin the prospects of companies developing innovative technologies that had also been supported by taxpayers. Solyndra was a one-time darling among clean-tech companies and first to obtain a loan guarantee as part of the US ARRA’s $37 billion loan guarantee programme. The programme was administered by the Department of Energy (DoE) under the executive director of the Loan Programs Office Jonathan Silver, who had joined the DoE in 2009 and was himself a former VC and hedge fund manager.
Solyndra had hoped that its CIGS solar PV technology would provide a significant cost advantage following an explosion in the price of raw silicon around 2008, the primary ingredient in market-dominating crystalline silicon (C-Si) solar panels. Shifts in global solar markets prevented Solyndra from capitalizing on its investments. Before Solyndra could exploit the economies of scale provided by its increased manufacturing capacity, the cost of raw silicon collapsed. The cost of competing C-Si solar PV technology also fell even more drastically than predicted as a result of Chinese development and investment in the technology.
Solyndra’s key business backers were venture capitalists (VC), and, like all VCs, they eagerly awaited an initial public offering (IPO), merger or acquisition to provide an ‘exit’ from their investments. Any of these ‘exits’ allows them to monetize the shares of stock they receive in exchange for investing in a given firm. The best-case scenario is obtaining massive financial returns reaped through capital gains created by the sale of stock as opposed to a return on investment created by cash flow from operations. But a successful ‘exit’ is not always possible in uncertain markets, as Solyndra proved. When Solyndra’s key investors abandoned their $1.1 billion investment, 1,000 jobs were lost, and a $535 million government-guaranteed loan was wasted. Rather than staying the course, in other words, Solyndra’s investors jumped ship.
A city-commissioned report (pdf) presented today before the City Council's Housing, Human Services, Health and Culture committee finds that approximately 42,000 Seattle homeowners—about a third of city residents with mortgages—are "underwater," with loan balances exceeding the value of their homes by an average of $92,000. This "negative equity" leaves borrowers unable to refinance or sell their homes, and thus only a lost job or an illness away from foreclosure, and potentially homelessness. And thanks to predatory lending practices during the real estate bubble, it's a foreclosure crisis that disproportionately affects communities of color.
The report, authored by Cornell Law School Professor Robert Hockett, goes on to recommend three creative options for addressing this crisis, and helping those in or facing foreclosure to keep their homes:
Two observations. First, no doubt critics will take note that due to the lack of access to proprietary data, some of Dr. Hockett's estimates of the severity of Seattle's foreclosure crisis are educated guesses. But that's not important. Whatever the size of the crisis, it remains no less severe for those who are in it. And so the city has an obligation to attempt to do what's best for its citizens.
Second, as experimental as these proposed solutions may be, they are at least worth exploring. The fact that lease swaps have yet to be fully vetted in court, or that the eminent domain strategy is currently facing legal challenges in Richmond, California, should not dissuade the council from giving these options serious consideration. Just because something hasn't been done, doesn't mean it can't be done. So the council deserves credit for taking a creative approach to an ongoing crisis faced by thousands of Seattle homeowners.
Those on the left must not play these kinds of games with capitalism...
74% of Americans feel secure in their jobs right now. Are they delusional? I know I am. http://t.co/qLXlP561CB
— Jeremy Olshan (@jolshan) September 6, 2013
As I have said before, the US abandoned economists or anything like economic policies/planning in the middle of the 70s. Around that time, the one profession, economics, was replaced by another, investment banking. The complex study of social reproduction and development was replaced with the extremely simple preoccupation not even with markets but making money (financial growth) from markets.
The reason for this shift was in part due to the fact that by the 70s (the end of the Golden Age of Capitalism), the US did actually solve the problem from which branch the main concerns of economics, scarcity. But if scarcity has been solved for 40 years—therefore making any reversion from the present dominant post-economic mode of rent-seeking to the earlier one of industrial development nothing but a complete waste of time and energy—is there any future for the economics profession? This is the deepest question possible, and its answer is: Yes. A glimpse of this future can found in the pages of a 2007 book, The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too, by an actual economist, James K. Galbraith. The relevant pages concern how the US can realistically address the pressing problem of climate change:
What are the elements of [a plan that deals with climate change]? A rough template can be drawn from the only major example of successful planning in the history of the United States: the economic mobilization for World War II. That mobilization doubled GDP within four years, reduced unemployment to zero, placed an army of 11 million men and women in the field, controlled inflation, and established both the technical and financial foundation for a generation of stable prosperity and social progress—albeit founded on ever-increasing use of fossil fuels. Unraveling fifty years of burning [fossil fuels] will require economic transformation on a similar scale...
One key is to keep the loss, and any required compensation, small by ensuring that feasible technical alternatives—for transportation, heating, and other basic needs—come into existence as they are needed. That is a matter of engineering, of the investment plan. Another key is to deliver compensation in deferred form—in effect, as an illiquid bond that generates purchasing power not in the present while the available technologies remain destructive, but in the future when they will have become more sustainable. This job—controlling the time flow of purchasing power to match the pace of technical transformation—is the economists’ job.
The Soviets had their famous (now chic) propaganda posters—and here was American capitalism's answer, in the form of workplace motivational posters by Mather & Company in Chicago.
They're pretty rich, from the emphasis on individualism and the dangers of communities ("gangs tie your hands!") to the fact that the only woman who appears in any of them is the object of the "criticism is necessary" poster.
This week, a University of Kent professor published new research showing that "being a perfectionist and highly motivated at work contributes directly to being a workaholic," which reduces people's "physical and mental well-being."
So go read those posters and do the opposite: Be lazy! Spend money! Join "gangs"!
It's for your health.
It took a few months, but forced federal budget cuts are costing hundreds of science and medical research jobs. Nearly half of the recipients who get federal science funding say they've recently laid off or will lay off scientists and researchers, because federal grants are tougher to win, according to a survey by the American Society for Biochemistry and Molecular Biology and 15 other scientific societies.There is no economic justification/reason for these cuts. None. The very irrationality of these cuts exposes the absence of economics in American life. But because they are irrational in economic terms does not mean they are irrational in other terms and social modes. These cuts find their reason only in what replaced economics forty years ago and became a zombie after the crash of 2008.
To see what society is like after economics, let's draw a few passages from Mariana Mazzucato's The Entrepreneurial State: Debunking Public vs. Private Myths in Risk and Innovation :
[T]he US government, through the NIH, and by extension via the US taxpayer, ‘has long been the nation’s (and the world’s) most important investor in knowledge creation in the medical fields’. This knowledge base was ‘indispensable’ and without it, venture capital and public equity funds would not have poured into the industry. They have ‘surfed the wave’ rather than created it.
National Institute of Health (NIH) labs, responsible for 75 per cent of the most radical new drugs, performs applied research. In both the cases of basic and applied research, what the government does is what the private sector is not willing to do. State funding makes things happen. The $10 billion pumped into the NIH by the ARRA is, according to Michael Grunwald, ‘driving some exciting breakthroughs in cancer research, Alzheimer’s, genomics, and much more’ (Andersen 2012). So the assumption that one can leave applied research to the business sector, and that this will spur innovation, is one with little evidence to support it...
While the State-funded labs have invested in the riskiest phase, the big pharmaceutical companies have preferred to invest in the less risky variations of existing drugs (a drug that simply has a different dosage than a previous version of the same drug).
So what is the private sector really up to?
[P]harma companies are spending a decreasing amount of funds on R&D at the same time that the State is spending more – all while increasing the amount they spend on share buybacks...
What are buybacks about?
[B]uyback schemes boost stock prices, benefitting senior executives, managers and investors that hold the majority of company stock. Boosting share prices does not create value (the point of innovation), but facilitates its extraction. Shareholders and executives are thus ‘rewarded’ for riding the innovation wave the State created.
The charred carcass of one of Queen Elizabeth’s own swans was found on a riverbank near Windsor Castle after having been barbecued and eaten, according to the police and a charity called Swan Lifeline... Until 1998, under a law dating to the 12th century, killing or injuring a swan was classified as treason, and the crown retains ownership of all unmarked mute swans in areas along the River Thames. Wild swans are also protected under a 1981 act, and to injure or kill a swan — let alone eat one — is against the law. Wendy Hermon of Swan Lifeline said that “the whole breast had been removed, and it looked like it had been eaten for lunch.” There was “just a swan skeleton left,” she said. “It’s absolutely disgusting, I can’t imagine the kind of people that would do this.” She said the carcass, with its feathers still attached, was taken by her group to be cremated.
Can't imagine the kind of wretch who'd catch and eat an urban bird, Ms. Hermon? Look no further!
Moreover, those swans were born and bred for eating—the royals loved them so much, they used to appropriate them from the poor:
The mute swan has been a much prized bird for many years. It appears to have been given Royal status in the 12th century, and thereafter, if a privately owned swan escaped, it became the property of the crown. By 1378 the office of 'Keeper of the King's Swans' was in existence and in a document entitled "The Lawes, Orders and Customs for Swans", dated 1482/3, the first law states that all swans owned by those who pay less than 5 marks a year Freehold were forefeit to the King. To own swans was, therefore, a status symbol and also provided a tasty ceremonial dish until superseded by the turkey early this century.
All the hungry Londoners should get themselves a swan. After 600 years of regal swan-swiping, the commoners deserve a few.
Right on—Governor Inslee is standing with the fast-food workers:
Voices of fast food workers today bring needed focus to hard working people struggling to share in Washington’s prosperity #strikepoverty
— Governor Inslee (@GovInslee) August 29, 2013
Fast food employees are expendable. Just fire and hire a new workforce. These people should have paid attention in school.
— Seth (@Seth11269) August 29, 2013
Sorry, conservative concern trolls, Governor Inslee is right. The unions are in this to elevate economic prosperity for workers across various sectors. Manufacturing industries have collapsed, leaving people stuck in low-wage service jobs, and striking works: It was American strikers who brought us the eight-hour workday.
But this isn't a problem for Republicans, a party of a whiter, male-er, privileged class that's not subjected to these shitty working conditions. They want businesses to fatten up as much as possible by paying their workers as little as possible. They love this economic caste system. We should actually thank these right-wingers for something: They're showing us that this strike isn't just about raising the minimum wage to $15 an hour, this strike is also about overcoming America's cultural contempt of the low-wage worker.
The New Yorker blog has a post about the demise of the Lusty Lady in San Francisco, the first US strip club to unionize and function as a workers' cooperative:
Some at the club see the demise of the Lusties—as the dancers call themselves—as evidence of how so much of what makes San Francisco progressive, and subversive, is getting pushed out in favor of the sleek and corporate. The nation’s only peep-show union shop, they’ll tell you, was smothered by a man behind what is considered the Walmart of San Francisco’s strip-club scene.
Talk to the landlord, Roger Forbes, and it’s about rent: the club didn’t make it in May, and had to go.
I'm sure the full story is more complicated than any workaday journalist would want to untangle—Lusty Lady SF was connected to Lusty Lady Seattle, but even those two parted company on extraordinarily complicated terms.
More importantly, the New Yorker story doesn't ask one of the most relevant questions: What will happen to that human (?) tongue embedded on that pencil?
(Photo and explanation after the jump.)
I wrote in the first post of this series, which is now called "Life After Economics," that the only document a student of economics in an advanced capitalist country needs to read (and read deeply and closely) is John Maynard Keynes' "Economic Possibilities for our Grandchildren." It was written in 1930, it's short, and it essentially states that when scarcity is resolved, the problem for society will be this: What will people do with the free time? Keynes:
Thus for the first time since his creation, man will be faced with his real, his permanent problem – how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well....Keynes predicated (correctly) that the citizens of a society that had solved the problem of scarcity would on average only need to work 15 hours a week. So the question is this: We have solved the sole problem of economics ("pressing... cares") and yet there has been no decline in the average working time in nearly 30 years. 40 hours a week is the standard we are stuck in. How did this come to be? The anthropologist David Graeber provides an excellent sketch of an answer in his short essay "Phenomenon of Bullshit Jobs":
In the year 1930, John Maynard Keynes predicted that, by century’s end, technology would have advanced sufficiently that countries like Great Britain or the United States would have achieved a 15-hour work week. There’s every reason to believe he was right. In technological terms, we are quite capable of this. And yet it didn’t happen. Instead, technology has been marshaled, if anything, to figure out ways to make us all work more. In order to achieve this, jobs have had to be created that are, effectively, pointless. Huge swathes of people, in Europe and North America in particular, spend their entire working lives performing tasks they secretly believe do not really need to be performed. The moral and spiritual damage that comes from this situation is profound. It is a scar across our collective soul. Yet virtually no one talks about it.For Graeber, bullshit jobs are usually the least useful and the most highly rewarded on the job market (corporate lawyer, for example). But my point is this: You will get more actual economic substance from this little paper than in all the Econ courses offered at even the most prestigious institutions. Why? Because Graeber's thoughts begin with the only text that you need to grasp if you are a student of economics in a developed country, "Economic Possibilities for our Grandchildren." What is taught in Econ 101 is not the real world; what you find in Keynes' piece of science fiction is precisely the First World that Econ 101 obscures.
That's a short list—right off the top of my head—of all the nice things we can't have because we are Americans and we are so fucking screwed. Most Americans aren't aware of just how screwed we are. While other industrialized western nations—not all of them Greece or Spain—manage to provide health care for all their citizens, require (by law!) four weeks (or more!) of paid (paid!) vacation (vacation!), generously subsidize childcare programs for working parents (you're on your own, American moms and dads!), and invest heavily in mass transit as a public and an environmental good, our political class and our liberal media have managed to convince us that these kinds of programs and public investments—any spending to promote the general welfare, as some liberal loons once put it—is simply unpossible! It cannot be done! Because socialism! Because freedom! Because Hitler! (You know that old joke about how a conservative is a liberal who got mugged last night? A liberal is a conservative who spent two days in hospital on a trip to Germany.)
We can add "student loans" to the list of the ways in which we Americans are 1. completely screwed and 2. completely unaware that we're being completely screwed. There's a roaring debate right now about just how financially devastating interest rates on student loans should be. Matt Taibbi (via Sullivan) has a great piece on the subject over at Rolling Stone:
Democrats—who, incidentally, receive at least twice as much money from the education lobby as Republicans—like to see the raging river of free-flowing student loans as a triumph of educational access. Any suggestion that saddling befuddled youngsters with tens of thousands of dollars in school debts is somehow harmful or counterproductive to society is often swiftly shot down by politicians or industry insiders as an anti-student position. The idea that limitless government credit might be at least enabling high education costs tends to be derisively described as the “Bennett hypothesis,” since right-wing moralist and notorious gambler/dick/hypocrite Bill Bennett once touted the same idea....
Conservatives, meanwhile, with their usual “Fuck everybody who complains about anything unless it’s us” mentality, tend to portray the student-loan “problem” as a bunch of spoiled, irresponsible losers who are simply whining about having to pay back money they borrowed with their eyes wide open. When Yale and Penn recently began suing students who were defaulting on their federal Perkins loans, a Cato Institute analyst named Neal McCluskey pretty much summed up the conservative take. “You could take a job at Subway or wherever to pay the bills,” he said. “It seems like basic responsibility to me.”
Basically: Dems want very-nearly-ruinous student loan interest rates locked in permanently while Republicans are pretending to want slightly-less-ruinous interest rates when what they're really trying to do is derail the Dem plan and permanently screw over college students by crushing them under utterly-and-completely ruinous interest rates—because, you know, higher education is for snobs and elitists and the GOP is tripling down on stupid party voters. If the Dems manage to win this one—if they can secure those ever-so-slightly-less-ruinous interest rates—it'll feel like a big victory for liberals and students and progressives in the same way that Obamacare felt like a victory for liberals and progressives when it's actually a conservative plan.
And here's a story that will break the hearts of people being crushed by student loan debt: We were in Germany earlier this month and a friend came up from Austria to spend a couple of days with us while we were visiting Berlin. He's a working journalist—they still have lots of those over there—but he was able to come to Berlin on the spur of the moment because he's taking some time off work to finish his PhD. Naturally, as an American, I assumed he was taking out student loans to cover his living expenses and tuition while he finishes that PhD of his. Ha ha! What an idiot I am! What a stupid and duped and clueless fucking American I am!
When I asked my friend what interest rates on student loans were like over there—on the assumption that he would know because he must've just taken one out—he looked at me like I was fucking crazy. He didn't have to take out a loan, he explained to me, slowly and carefully, in the way that one talks to an idiot. Because, you see, the Austrian government is paying him 60% of his salary while he takes time off to finish his PhD... because, you see, society benefits from a highly educated workforce and so education is something his government invests in heavily. Obviously, right? Any government run be reasonably sane and responsible people do the same, right?
Ha! Ha ha... ha. Yeah. It would be funny if it weren't so fucking infuriating.
So remember, my fellow duped Americans, while we're debating just how ruinous student debt here should be—very nearly ruinous, a.k.a. the liberal position? utterly and completely ruinous, a.k.a. the conservative position?—the Austrian government is paying my Austrian friend to finish his PhD because the general welfare!
We are so screwed.
UPDATE: Higher education in the United States could be tuition free...
How much would it cost make every single public two- and four-year college and university in the United States tuition free for all students? Probably less than you think.
By our estimates, after stripping off the amount that the government already spends to subsidize higher education—including at predatory for-profit institutions—the total amount of new money necessary is less than $13 billion a year. Thirteen billion is a lot of money, to be sure, but within the scope of the Federal budget it is less than one tenth of one percent of yearly spending — merely a rounding error.
Here’s how we arrived at that astonishing figure.
Wal-Mart grouses today to the New York Times about the economic recovery. Yeah, sure, lots of new jobs are being created but too many of those job are low-paying jobs and people in low-paying jobs can't afford to buy crap at Wal-Mart—you know, Wal-Mart, the huge retailer and "the world's most profitable company" where the pay is so low that thousands of the company's own employees are on food stamps and pubic assistance and can't afford to buy crap at Wal-Mart or other retailers? Wal-Mart is bitching about other companies and their lousy, low-paying jobs.
Reading that made me wanna go to Arkansas and punch a landmark of Hudson River School landscape painting.
To this WaPo post, "This chart might make you feel better about American inequality":
What this [chart is] telling us is that in India and Brazil, the poorest people are among the poorest people in the entire world, whereas the richest people are either middle-class, globally speaking, as is the case in India, or are for-real rich, as is the case in India. But if you’re in Russia and especially if you’re in the United States, the mere fact that you live there means that you are not (with some exceptions) poor in the global sense. The bottom fifth of Americans are still well above the middle of the world income distribution.
I offer this passage, which is in the final and dullest chapter (Taxes) of Adam Smith's An Inquiry into the Nature and Causes of the Wealth of Nations:
By necessaries I understand, not only the commodities which are indispensibly necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably, though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty, which, it is presumed, nobody can well fall into without extreme bad conduct. Custom, in the same manner, has rendered leather shoes a necessary of life in England.My one and only point: Nothing should make you feel better about American inequality.
True, the neoclassically trained economist Paul Krugman does echo the ideas of the leftist journalist Doug Henwood, but what is truly surprising is that someone as mainstream as Krugman even mentioned the almost unknown Polish economist Michał Kalecki (unknown because neoclassical economics, which is simply called economics today, basically has no sense of its own history).
Here is the matter: Out of the many explanations for why capital in the 70s decided to end its truce with labor, a truce that began around 1947 and initiated what many call the Golden Age of Capitalism (a great book on this subject is Capitalism Unleashed:Finance, Globalization, and Welfare by late Andrew Gyn—the link leads you to my highlights on the Kindle edition, which I hope are visible to the public), two stand, I think, closest to the truth: one is by the Italian Marxist economist Carlo Vercellone and the Polish economist Michał Kalecki.
With Vercellone, the end of the Golden Age of Capitalism has its roots in the rise of what the Marxist Autonomists call the "general intellect," a form of social production first recognized or mentioned by Marx in the Grundrisse. Vercellone argues that with the generalization or massification of productive techniques, knowledge, and information, the rich saw the power they had over the population deteriorate considerably. The more developed the society became, the more its subjects depended on one another rather than capital to make things happen. To escape this politically dangerous situation, the rich migrated from the manufacturing sector to the financial one. Banks, unlike factories or shops, can only be mastered by capital. And so the financialization of society (the movement from production to rent) is all about extending and spreading the power of a very small and specific class of people.
As for Kalecki, he wrote:
[U]nder a regime of permanent full employment, the "sack" would cease to play its role as a disciplinary measure. The social position of the boss would be undermined, and the self-assurance and class-consciousness of the working class would grow. Strikes for wage increases and improvements in conditions of work would create political tension.So the 70s were not about the collapse of Keynesian economics—indeed, it was a great success for the West—but the reinstitution of class power at the price of capitalism itself. As the South Korean economist Ha-Joon Chang frequently points out, capitalism has not performed as well under neoliberalism as it did under Keynesian (indeed, Kaleckian) macroeconomic policies. And so Krugman writes:
Two and a half years ago Mike Konczal reminded us of a classic 1943 (!) essay by Michal Kalecki, who suggested that business interests hate Keynesian economics because they fear that it might work — and in so doing mean that politicians would no longer have to abase themselves before businessmen in the name of preserving confidence.In short: Austerity is a political rather than economic program.
"At the university studied, that was decidedly not the case. Among the findings were that while 11 percent of faculty members at this university during the era of mandatory retirement worked after age 70 (with special arrangements), 60 percent of faculty members now work beyond the age of 70, and 15 percent retire at the age of 80 or older."That's real talk.
As I have said before: I would be happy to retire early, have more time to write, and allow more junior people to get academic jobs; if not for the fact that retirement would mean instant severe impoverishment. As it stands, there is no way I will be able to afford retirement before the age of 75 (I am 59 now); and even that looks shaky via current projections.
And I say this totally aware that I have a *much better* retirement fund than 85% of currently working-age Americans. The current efforts, in Detroit and elsewhere, to take away pensions and medical coverage from retired people is utterly obscene, and only shows how barbaric our society has become.
There are parallels between the Detroit of today and New York City in the 70s—the NYC that was told to "Drop Dead" and as a consequence became an experiment for the implementation of neoliberal policies: fiscal tightening (an attack on municipal labor) and the promotion of a business-friendly climate. In NYC's case, however, this experiment was conducted with something like a democracy still intact. Detroit, of course, has no democracy, and so it is an experiment of another kind, an experiment of neoliberal policies without meaningful public participation. If this Detroit succeeds, it is our future.
This summer, the Georgetown Public Policy Institute released a study (pdf here) with a surprising finding: During the recent recession years, new theater graduates have had lower rates of unemployment than their fellow arts grads: 6.4 percent compared to film/video/photography's 11.4 percent.
In fact, recent theater graduates had lower rates of unemployment than many of their fellow degree-holders in other, more "practical" fields: computer science (8.7 percent), information systems (14.7 percent), electrical engineering (7.6 percent), and business management (7.8 percent).
Show that to your parents when they tell you to major in something "real."
But here's the hitch—recent drama grads are more employed (more or less), but they're at the bottom of the earnings rankings, pulling in $25,000 a year.
Because even during recessions, restaurants run off the sweat of aspiring actors.
Sometimes I have to pull out my Marxist pipe and take a look at the actual state of things, and when I resume smoking, incorporate some of this reality into the room-filling dreamy smoke of our wonderful and inevitable socialist future. One such moment, a moment of not smoking, was reading this article in ChinaToday:
China's continued loss of talented individuals is being widely discussed following a report from the University of Hong Kong (HKU) indicating that a record number of Chinese mainland students have applied to the university.
The university said in a July report that a record 12,000 students from the mainland have applied to the university so far this year.
Survey results issued by the China Alumni Network in June showed that nearly 60 percent of students who received a high score at the National College Entrance Examination (NCEE) plan to obtain higher degrees overseas after finishing their bachelor's degrees in China.
Experts and the general public are asking the question: Is China losing in a global tug-of-war for future talents?
Huang Bin, 26, is set to fly to Florida to receive a doctorate in bio-pharmacy.
"This is a one-way ticket and I will not come back," said Huang, who was recently hired by a medical company in the United States.
Recall two recent reports. One:
Japan’s rapidly aging population is producing some interesting new business opportunities, including a booming market for adult diapers.
The Nikkei newspaper (subscription only) reported on Thursday that three Japanese paper companies—Daio, and Nippon Paper—are expanding their manufacturing facilities for what are politely called “incontinence products” due to an expected surge in demand. The Nikkei said adult diapers are expected to outsell baby diapers in Japan by 2020, but according to Unicharm, Japan’s biggest diaper maker, the tipping point was in 2011.
And then this one:
Former Florida governor Jeb Bush (R) argued Wednesday that the United States should pass immigration reform because the U.S. economy needs the labor of young immigrants, and immigrants are “more fertile.”Now put the two reports together in the first context of Japan's long-stagnant economy and then in the wider context of Dorling's demographic theory of capitalist growth, and you will not find Jeb Bush's statements to be racist or crazy. He is saying it like it is. Capitalism needs babies, but look at what's happening: Most established Americans are becoming, in terms of fertility rates, like Europeans and the Japaneses (the former hates immigrants; the latter has no immigrants to replenish its dwindling population; both have stagnant economies). What is keeping the capitalist economy of the US going? Immigrants, and it needs a constant fresh supply of them because once immigrants settle in the US they soon adopt the local and declining fertility rates.
“Immigrants create far more businesses than native-born Americans,” Bush said at the Faith and Freedom Coalition’s Road to the Majority conference. “Immigrants are more fertile, and they love families, and they have more intact families, and they bring a younger population. Immigrants create an engine of economic prosperity.”
But guess what: Japan is the future of capitalism. Why? Because eventually, we will begin to run out of immigrants (peak immigrants) and, globally, fertility rates will converge into a long decline to the current state of Japan (more about that in another post).
Wherever there is a great property, there is great inequality. For one very rich man, there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many. The affluence of the rich excites the indignation of the poor, who are often both driven by want, and prompted by envy to invade his possessions. It is only under the shelter of the civil magistrate, that the owner of that valuable property, which is acquired by the labour of many years, or perhaps of many successive generations, can sleep a single night in security. He is at all times surrounded by unknown enemies, whom, though he never provoked, he can never appease, and from whose injustice he can be protected only by the powerful arm of the civil magistrate, continually held up to chastise it. The acquisition of valuable and extensive property, therefore, necessarily requires the establishment of civil governmentYes, it is the man who for many (particularly in Reagan's moment) is to the invisible hand of the market what Jesus is to the invisible God up above. Yes, Adam Smith. Yes, he did believe that a free market was better for all. But, no, he was not naive about the dangers of a society that easily permits its policies to be directed by the interests of merchants. From deep in the third section of An Inquiry into the Nature and Causes of the Wealth of Nations:
Our merchants and master manufacturers complain much of the bad effects of high wages in raising the price, and thereby lessening the sale of their goods, both at home and abroad. They say nothing concerning the bad effects of high profits; they are silent with regard to the pernicious effects of their own gains; they complain only of those of other people
And he was very sober about the unionization of labor...
What are the common wages of labour, depends everywhere upon the contract usually made between those two parties, whose interests are by no means the same. The workmen desire to get as much, the masters to give as little, as possible. The former are disposed to combine in order to raise, the latter in order to lower, the wages of labour. It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily: and the law, besides, authorises, or at least does not prohibit, their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work, but many against combining to raise it. In all such disputes, the masters can hold out much longer
As Ha-Joon Chang points out in his essay "Poverty, Entrepreneurship, and Development," poor societies suffer from a terrific surplus of entrepreneurs, and this has nothing to do with some kind of culturally established faith in the almighty market, but because they have no other opportunities or ways to make ends meet in a society that distributes many of the necessities of life commercially.
We have started including the question “What are your ambitions for your children?” in surveys given to poor people around the world. The results are striking. Everywhere we have asked, the most common dream of the poor is that their children become government workers. Among very poor households in Udaipur, for example, 34 percent of the parents would like to see their son become a government teacher and another 41 percent want him to have a nonteaching government job; 18 percent more want him to be a salaried employee in a private firm. For girls, 31 percent would like her to be a teacher, 31 percent would want her to have another kind of government job, and 19 percent want her to be a nurse. The poor don’t see becoming an entrepreneur as something to aspire to. The emphasis on government jobs, in particular, suggests a desire for stability, as these jobs tend to be very secure even when they are not very exciting. And in fact, stability of employment appears to be the one thing that distinguishes the middle classes from the poor. In our eighteen-country data set, middle-class people are much more likely to have jobs that pay them weekly or monthly, rather than daily, which is a crude way to separate temporary and more permanent jobs.
In the US, were is often told that thing our hearts most long for is the chance to run our own business. We are told all that it takes to be the boss of you is a little ingenuity and resourcefulness. We are told that happiness is found when our true entrepreneurial spirit is expressed. When we lose a good job in the government or a corporation to some budget cuts, we soon hear from every side of the society that this is a golden opportunity to express this entrepreneurial spirit. But anyone who has ever owned a small business knows it's something you should not do without deep pockets and a commitment that's close to fanatical. And this is the point: It's not just that it's better and much more stable to work of a large organization, but many of us do not want to spend so much of our short lives on the massive amount of time and energy that's needed to keep a small and vulnerable business afloat. For most poor people in the world, to be left with nothing but entrepreneurship as a door to a living is to be condemned to boredom and poverty.
So, as the move to boycott Stoli and other Russian vodkas gains steam, some people are going to find themselves in tough corners: wanting to help, but not being able to convince straight bar owners to join the boycott.
While politically savvy and activist gay bar owners, workers, and patrons will be right on board, gay bars alone probably won't do the trick of economically hurting SPI and getting the oligarchs to pressure Putin to reverse course on homophobic laws and discrimination. The boycott needs to move to sports bars, hotel bars, mainstream restaurants that serve booze, and every corner bar in the land for it to succeed.
Changing one's twitter avatar won't get that done. Many straight bar owners won't care, or won't want to risk otherwise positive relationships with distributors (who give them discounts on this, that, and the other booze, beyond the Russian brands they handle). The liquor business is all about such quid pro quos and other personal relationships.
The joint I work at one night a week, for instance, is pretty lefty (it was long known as the "hippie bar" in the 'hood) but many long-time regulars swill Stoli like it's mother's milk (they claim it minimizes hangovers; I think not getting drunk minimizes hangovers even better, but whatever). I doubt very much that even my liberal-minded boss would go along with a boycott of Stoli; too many regulars would get angry (though it would have an effect: our distributor once told us we were the biggest black-label Stoli account in Illinois).
But on my shift? We're out of Stoli, sorry.
Particularly if you are poor:
Climbing the income ladder occurs less often in the Southeast and industrial Midwest, the data shows, with the odds notably low in Atlanta, Charlotte, Memphis, Raleigh, Indianapolis, Cincinnati and Columbus. By contrast, some of the highest rates occur in the Northeast, Great Plains and West, including in New York, Boston, Salt Lake City, Pittsburgh, Seattle and large swaths of California and Minnesota.In general, class mobility in the US is not all that (even Rick Santorum knows this). But if you are poor and in Atlanta, you are really fucked. The chances of you rising to the bottom of the middle class in that city are terribly small. Seattle, however, is not great (no place in the US is great) but considerably better than most cities...
A few days ago, the editorial board at the daily newspaper in the other Washington, seized upon Detroit's bankruptcy as an opportunity to advocate for slashing public employee pension benefits nationwide. Citing a Boston College study (pdf), collectively, our nation's "state and local pension plans have $3.8 trillion in unfunded liabilities," this Washington Post editorial direly warned.
The point is that long before cities reach the point of insolvency, unaffordable promises to their public-sector unions can raise borrowing costs and crowd out other public needs — such as parks, libraries, sanitation and public safety. And that’s not good for retaining a tax-paying middle-class population. Cities and states that wish to avoid a Detroit-like death spiral should start putting their retirement systems on a sustainable path now.
Uh-huh. Except, as economist Dean Baker points out, both the editors' math and their economic analysis are total bullshit. First, what the Boston College study really says, is this:
In the aggregate, the actuarial value of assets amounted to $2.8 trillion and liabilities amounted to $3.8 trillion, producing a funded ratio of 73 percent.
I guess one can forgive the Post's editors for not understanding the difference between a "liability" and an "unfunded liability," because they are stoopid, but $3.8 trillion minus $2.8 trillion equals... wait a minute... let me whip out my calculator... um, $1 trillion! "Never take anything in a Washington Post editorial at face value," concludes Baker—sage advice that should be applied to newspaper editorials in general.
Now I know what you're thinking: a trillion dollars is still a lot of money, right? Not when put in its proper context. This estimate, Baker explains, is over a 30-year period—the normal period for planning public pensions. Over that same 30 years, the discounted value of the GDP is estimated to be about $447 trillion, meaning that the estimated pension shortfall only amounts to about .22 percent of GDP. Hardly a crushing burden, concludes Baker:
Forbes magazine reports that Seattle is one of the world’s 15 most inventive cities.
The ranking is based on a metric known as “patent intensity” — that is, the ratio of patent applications to the total population. The patent data, collected by the Organization for Economic Co-Operation and Development, show 4.25 patent applications for every 10,000 residents in the Seattle metropolitan area. That is the 13th highest patent intensity in the world.
That's a sentence I never thought I'd write. But this quote from a couple of weeks ago, when Koppel appeared on NPR, is making the rounds:
We are privatizing ourselves into one disaster after another. We’ve privatized a lot of what our military is doing. We’ve privatized a lot of what our intelligence agencies are doing. We’ve privatized our very prison system in many parts of the country. We’re privatizing the health system within those prisons. And it’s not working well.
He's right, of course—the funny thing is, we're on the tail end of a two-term Obama administration, an administration that Republicans and Teabaggers promised would result in a socialist hell. In fact, we are now staring down the barrel of a privatized hell:
In Chicago, a Morgan Stanley-backed consortium took control of 36,000 public parking meters in a 75-year lease. Taxpayers must reimburse the private company when spaces are closed for street fairs or emergency weather conditions. The contract also prohibits the city from operating or permitting operation of a competing public parking facility. Even more outrageous, the city cannot make improvements to streets that contain parking meters, such as adding bicycle lanes or expanding the sidewalk.
In Denver, the private, foreign consortium that operates the Northwest Parkway can prevent any public road improvements near their toll road because they “might hurt the parkway financially” by providing an alternative route for drivers. Taxpayers are stuck with that contract for 99 years.
In 2012, Corrections Corporation of America (CCA), the largest private prison company in the country, sent a letter to 48 states offering to buy public prisons in exchange for a promise to keep the prisons 90 percent filled for 20 years. While the letter was a public relations fiasco for CCA, it turns out that many existing private prison contracts actually include “occupancy guarantees” of 90 percent and even 100 percent. Governments must keep prison beds filled or taxpayers have to pay the prison company for empty beds.
Speaking of perverse incentives and prison—how's that California prison strike going? (We're on day 12.) Looks like the prison guards are getting orders to break it:
This morning, I began reading Phil Mirowski's Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown....
This naturalization of market logic (or "values," to use de Angelis' language) was nothing more than a spell. This spell was broken in 2008, a year after The Beginning of History was published.I read that and thought: That writer sounds very familiar. I looked in the book's notes and found my name. The quote came from here.
The point of all this: When I argue that we now live in a post-neoliberal world, I do not mean that its practices or program have ceased (Ireland, Greece, and Portugal make it loud and clear that it's alive and kicking), but that the narrative of the market's universality is no longer unchallenged. The market is not the one and all; it has an outside, it has a limit.
Two things: Even though I'm used as an example of how not to think about neoliberalism, I'm happy that at least one person reads my posts on economics. Two, it is an honor to be listed next to Joseph Stiglitz. What Stiglitz wrote:
Neo-liberal market fundamentalism was always a political doctrine serving certain interests. It was never supported by economic theory. Nor, it should now be clear, is it supported by historical experience. Learning this lesson may be the silver lining in the cloud now hanging over the global economy.In a nutshell, my day is made. (My review of Mirowski's book will appear in the near future.)
Advocates for local fast-food workers have been circulating some budgeting tips for employees they found in a handout from McDonald's, Visa, and Wealth Watchers International®. The McD's sample budget says that if workers get a second job and don't pay their heating bill, they can earn half of what families need for a "secure" standard of living!
The numbers ("food" is not a category, but apparently comes out of the "spending money" budget—so fiscally helpful!):
(They left out a line item in the "expenses" column for wage theft.)
Here are some recent numbers from the Economic Policy Institute about what a one-parent/one-child household in the Seattle metro area needs to afford a "secure yet modest" standard of living:
The handout concludes: "Helping you succeed financially is one of the many ways McDonald's is creating a satisfying and rewarding work environment."
That's some bald-faced economics right there—and even the micro-economists (emphasis on micro) running the minimum-wage world know it.
At the table in council chamber, five employees from Qdoba, Wendy's, Burger King, and Taco Bell leaned into microphones and alleged dramatic violations of their rights as employees—wage theft, on-the-job injuries, denial of breaks. Larita McFall, a Qdoba employee, claimed that when 350 degree fry oil splashed her face a few months ago, a manager assured her she'd be okay and should get back to work. Juanita Porter alleged that her employer, Taco Bell, paid her for 43 hours of work in a pay period even though her time slip said she'd worked 71 hours. "They tried to tell me I didn’t work 71 hours because the computer kept me clocked in when I wasn’t there. I clock in manually, so I don’t see how that’s possible," she told the council.
She's right to call on the city for help; wage violations like these shouldn't be happening at all. As council members pointed out, the city has laws specifically criminalizing wage theft (it's a gross misdemeanor) and mandating sick leave. Said Council Member Burgess, "This is one of those issues where there's not much disagreement: Wage theft is wrong. The industry supported our ordinance"—an ordinance strengthening wage-theft protections that the council passed unanimously in 2011. But he also pointed out that since that ordinance passed, there's been zero prosecutions.
So is the problem with enforcement?
Credit ratings agency Standard & Poor's makes an extraordinarily revealing admission in its defense against government charges that it defrauded investors:
S&P said in its request to dismiss the case that the government can’t base its fraud claims on S&P’s assertions that its ratings were independent, objective and free of conflicts of interest because U.S. courts have found that such vague and generalized statements are the kind of “puffery” that a reasonable investor wouldn’t rely on.
In other words, S&P admits that its claims to do what it says it does are little more than advertising slogans—you know, like: "More doctors smoke Camels than any other cigarette."
So years ago, when I purchased term life insurance ahead of the birth of my daughter, and evaluated the reliability of insurers based on their credit ratings, I wasn't acting reasonably, according to S&P. Good to know.
Yay for capitalism!
Top Senate Democrats want a cap in place to protect students if interest rates spike. That is at odds with the slightly different proposals from President Barack Obama and various congressional Republicans, which are tied to 10-year Treasury bond rates and would include charges for administrative costs but would not include caps.
Republicans, who prefer a more market-based approach, often point out that the White House's proposal falls more in line with their own.
"When President Obama proposed letting the markets set interest rates instead, the Republican-led House passed a bill reflecting his plan," Jenkins said. "Republicans in the Senate came to the table with similar ideas. Unfortunately, Senate Democrats attacked the president's plan, refused to work with us, and allowed this rate hike to take effect, leaving for the July 4th holiday without passing a solution."
I propose here to interpret the important shift in materialism announced by Althusser in his late writings. He affirms the necessity of moving from a teleological dialectical materialism (Hegel and Marx) to a “materialism of the encounter” (Epicurus, Spinoza). According to the latter, chance, “void,” absence of intention, and purpose are essential ontological conditions of possibility for a self-differentiating real. Darwin’s concept of natural selection will be analysed here as a possible example of such a movement. The question will then be: how can we transfer what works at the level of nature to the political? What is the difference between natural and social selection?
The thing is this: Darwinian natural selection can produce new things, Malabou argues, because it's a process that has no direction or goal. Nothing is at the core of natural selection—no god, no purpose, no end. But with social selection (a college exam, a job interview, a presidential election), there is a goal, a something: the reproduction of the state of affairs. And so, initially we thought Obama came from nowhere (the color of his skin), but we eventually learned he came from somewhere (the content of his character). Obama was elected/selected because the system determined that skin color itself did not have enough nothingness (natural selection) to present a new politics, a new "encounter."