By Lukasz Pawlowski, April 1st, 2013 
In the ongoing American and British debates on the financial crisis and the best ways to bring the economy out of the woods, two opposite views repeatedly collide – the one represented by those who prioritize deficit reduction, the other by those who argue for recapitalizing the economy. The case of the United Kingdom shows that drastic cuts – if not supported by stimulus packages – instead of tackling the debt may actually inflate it. The American policy record on the other hand, proves that even substantial stimulus packages do not always lead to economic revival. It’s not enough to throw some extra money into the pool – equally important is what these resources actually fund and whether they are accompanied by structural reforms.
British clamps
Moody’s decision to downgrade UK’s rating from AAA to AA1 announced at the end of February was a serious blow to David Cameron’s government as it undermined the whole austerity program Conservatives embarked on precisely to regain the trust of both financial markets and rating agencies. Nonetheless, in a speech delivered on March 7th Prime Minister announced he would keep on the chosen course since – as his famous predecessor once asserted – for this policy “there is no alternative.”
Many British economists do, however, see an alternative, and their number grows as it becomes clear that the spending cuts introduced so far, instead of reducing the debt, have increased it (from 600 billion in 2008 to 1.1 trillion four years later to be precise). How is it possible to cut down on expenses and inflate the debt at the same time? Excessive savings lead to economic contraction, which in turn reduces state revenues and forces the government to continue on borrowing. “What truly is incredible” – argued Martin Wolf in his “Financial Times” column – “is that Mr. Cameron cannot understand that, if an entity that spends close to half of gross domestic product retrenches as the private sector is also retrenching, the decline in overall output may be so large that its finances end up worse than when . . .
Read more: Tighten or Stimulate? British v. American Economics
By Jeffrey C. Goldfarb, February 20th, 2013 
These Jo Freeman photos of the Rally and March Against Keystone XL Pipeline in Washington D.C. on Sunday demonstrate “what is to be done” by the left in Obama’s second term.
It is far from clear what Obama’s decision on the pipeline will be. A decision to go ahead would unarguably produce jobs, though for how long is in dispute. It would also likely lessen U.S. dependence on oil from the Middle East and Venezuela. It would certainly strengthen our relations with our major ally and neighbor, Canada. So the preemptive protest against Obama possible decision to support Keystone is well timed.
The attractive faces in the crowd with their creative signs, some witty, some mass produced, make clear that we face a profound problem, potentially critical of a possible decision, but amplifying the most surprising but also sensible points Obama made in his State of the Union Address:
“We can choose to believe that Superstorm Sandy, and the most severe drought in decades, and the worst wildfires some states have ever seen were all just a freak coincidence. Or we can choose to believe in the overwhelming judgment of science — and act before it’s too late.”
The President strengthened the significance and attention paid to this protest possible against himself. He certainly knew this would happen. But the interaction between decision and protest increases the likelihood that the U.S. will take its head out of the sand. We will debate the relative merits of Keystone, whether “carbon free, nuclear free” is possible or even desirable. But Obama will push forward at the very least with executive decisions, using an emerging consensus that “Climate . . .
Read more: Climate Change and the Art of Protest
By Lukasz Pawlowski, January 10th, 2013 
The American president has signed the bill drafted by Democratic and Republican leaders, which allows the United States to avoid “fiscal cliff.” The solution adopted by the Congress does not, however, solve the problem, but only touches some of its elements and postpones dealing with the others for a few weeks. So who won in this dramatic battle, fought late into the first night of the New Year? Choosing the winner depends on one’s point of view, but no matter the viewpoint we take, one thing seems to be certain – the national interest has lost.
Regardless of who we consider to be the main wrongdoer, it is difficult to identify a clear winner. Obama’s spin doctors are striving to present the agreement as a triumph of the administration, since it succeeded in making many Republicans vote in favor of tax increase for the first time in 20 years. For the richest Americans, with annual revenues of more than $ 400,000, the tax rate will rise from 35 percent to 39.6 percent, i.e. to the rates existing under Bill Clinton before George Bush’s cuts. The problem is that President Obama wanted to set up a new tax threshold at $ 250,000 of annual income. That’s a significant difference. The White House hoped the tax increase would bring $ 1.5 trillion over the next decade, but according to the current arrangements the federal government will receive a modest 600 billion. Given the scale of the U.S. debt, it’s not much, and what’s more, this money will only contribute to the U.S. budget, if all the citizens who should pay more actually do. But will they?
The main problem with taxing the rich is that while these are the people who have the most money to share, they also have the most money to find ways to avoid sharing. When a few months ago Mitt Romney (remember him?) revealed his 2011 tax return, it turned out he paid tax rate of 14 percent instead of 35 percent or, to put it in dollars, 1.9 million instead of 4.8 million. If every American . . .
Read more: The Fiscal Cliff: American Follies Seen from Abroad
By Jeffrey C. Goldfarb, December 8th, 2012 
In Reinventing Political Culture, I argue that there are four components to Barack Obama’s project in reinventing American political culture: (1) the politics of small things, using new media to capture the power of interpersonal political engagement and persuasion, (2) the revival of classical eloquence, (3) the redefinition of American identity and (4) the pursuit of good governance, rejecting across the board condemnations of big government, understanding the importance of the democratic state. I think that there is significant evidence for advances on all four fronts. The most difficult in the context of the Great Recession was the struggle for good governance, but now the full Obama Transformation, responding the Reagan Revolution, is gaining broad public acceptance.
The election was won using precise mobilization techniques. Key fully developed speeches by the President and his supporters, most significantly Bill Clinton, defined the accomplishments of the past for years and the promise of the next four. Obama’s elevation of the Great Seal motto E pluribus unum (in diversity union), defining the special social character and political strength of America, has won the day. And now, the era of blind antipathy to government is over.
The pendulum has finally swung back. The long conservative ascendancy has ended. A new commonsense has emerged. Obama’s reinvention of American political culture is rapidly advancing. The full effects of the 2012 elections are coming into view. The promise of 2008 is being realized. The counterattack of 2010 has been repelled. The evidence is everywhere to be seen, right in front of our eyes, and we should take note that it is adding up. Here is some evidence taken from reading the news of the past couple of days.
It is becoming clear that Obama’s tough stance in the fiscal cliff negotiations is yielding results. The Republicans now are accepting tax increases. Signs are good that this includes tax rates. A headline in the Times Friday afternoon: “Boehner Doesn’t Rule Out Raising Tax Rates.” A striking shift in economic policy is apparent: tax the rich before benefit cuts for the poor, government support for economic growth. . . .
Read more: The Reagan Revolution Ends! Obama’s Proceeds!
By James M. Jasper, November 29th, 2012 
At a Sixteenth Arrondissement party soon after I arrived in Paris in late 1984, I was cornered by a tipsy Frenchman who repeatedly exclaimed–in a tone more resigned than angry–“You’ve won! You’ve won.” This was all he would say, elaborations and explanations apparently being unnecessary.
Once I began to look for them, signs of American triumph were everywhere: Carl Lewis’s Olympics a few months before, Reagan’s enthusiastic re-election a few weeks before, and a sense that personal computers coming from garages in Silicon Valley would displace the tiny Minitel terminals linked to a central network for which the French had instead opted (a prescient model, but ten years before the internet could have made real use of them). After several months in Paris, I realized this handwringing was a daily theme in the Parisian press: the United States had won the economic game.
The idea was everywhere: the news detailed France’s economic crisis and America’s ascendency; top journalists and other members of the intelligentsia analyzed how France had gotten into its sad state; academics wrote books setting the crisis in world-historical context; politicians spun grandiose plans for pulling France out of its malaise. But no one took the schemes of the politicians seriously: the crisis, everyone knew, was there to stay. Thus Le Monde‘s annual report on the economic state of the world in early 1985 had on its cover a tiny boat, its sail in disarray, about to drop from the crest of a wave, and a large ocean liner placidly moving along in the distance. The dinghy flew several European flags, the steamer those of Japan and the United States.
It was not just France: the entire “old world” was implicated. It was just that: old, weary, perhaps exhausted. Many French, if it fit their current political rhetoric, were fond of pointing out that France had done better than most European countries. The French were happy that they were not the Germans, the Swiss, or even the Swedes who had beaten them this time. It was America, which is after all America, and Japan, that . . .
Read more: An American in Paris: Thinking about France, Taxes and the Good Life
By Douglas Voigt, September 20th, 2012 
“All truths – not only the various kinds of rational truth but also factual truth – are opposed to opinion in their mode of asserting validity. Truth carries within itself an element of coercion, and the frequently tyrannical truthtellers may be caused less by a failing of character than by the strain of habitually living under a kind of compulsion.” – Hannah Arendt (Between Past and Future. 1954, p. 243)
During the period immediately before someone leaves one city and moves to another, they seem to liberate themselves and experiment with abandon during that window of freedom, or fearfully adhere to the tired routines of a forgone order. Having witnessed the Eurocrisis unfold over the past two years from a window in Berlin, I recently thought I would have to move elsewhere due to conflict with the archaic hierarchy of a German university. I naturally rebelled and charged heedlessly into the freedom inherent in a contingent situation – refusing to comply with the hierarchy and arbitrary exercise of power so prevalent in the German university. With the comfortable order of my German life on the brink, I attempted to understand my position in German academia, as well as the European position under German hegemony. In so doing, I came to discover that the latter is not a debate between Keynesianism vs. neoliberal austerity, but a particularly virulent condition of wider academic and German culture: the need for truth.
If a traditional German university is a window into German culture as a whole, then the problem of truth becomes immediately apparent. Imagine riding horseback through the patchwork of political entities in medieval Germany, each with an independent lord holding absolute power over a small slice of territory, beholden only to the good grace of a distant and disinterested central authority. While riding through this landscape, the casual observer cannot help but notice that when moving from one lordship to another, the organization of labor and adherence to a unifying conception of community is entirely dictated by the lord. Some territories have jovial lords who interact with their subjects, interested in . . .
Read more: The Truth in Germany – from University to Euro
By Daryl Glaser, September 13th, 2012 
Was it a ‘tragedy’ or was it a ‘massacre’? Were the police, shocked by the killing of cops and security guards a few days before, entitled to feel threatened by an advancing column of panga-wielding strikers fortified with traditional medicine to immunise them from bullets? Or were the cops guilty of penning the strikers in, making an unnecessary attempt to disarm them by force, employing unconscionable firepower to block their escape and killing stragglers in cold blood? Who fired the first round of live ammunition?
What we do know is that on August 16th 34 striking miners were gunned down by police at Lonmin’s Marikana platinum mine in South Africa’s Northwest Province, and that there was at a minimum an unforgivable failure of police crowd control.
With luck, a government-appointed judicial commission will tell us who did what to whom and in what order. In the meantime South Africans nurse their bewilderment. Theirs is a violent land in which fifty people are slain daily in ‘ordinary’ criminal murder, and strikes are often enforced with deadly brutality, but a special shame attaches to a slaughter by state forces so redolent of apartheid-era massacres.
There are layers to this story. It’s about wage grievances, but also a battle between unions. Black platinum miners have until now been organised by the National Union of Mineworkers, a member of the ANC-aligned Congress of South African Trade Unions. Critics claim that NUM, a stalwart of the anti-apartheid struggle, is now a status quo union. Comfortable as management’s recognised bargaining partner, NUM resists calls for mine nationalisation. The union increasingly represents upwardly mobile above-ground workers rather than the rock drillers who do the most arduous work. The fact that NUM negotiated a better wage deal for the former than for the latter appears to have been a spark for the unrest.
Rock drillers have it hard. Platinum companies have invested little in surrounding communities. Those of its employees who do not wish to live in hostels are given living-out allowances to find their own accommodation nearby, where they are left . . .
Read more: The Marikana Strike Killings, South Africa
By Jeffrey C. Goldfarb, August 10th, 2012 
As I observed in my last post, I think that an OWS focus on debt, as Pamela Brown has been advocated, makes a lot of sense. We discussed this in the Wroclaw seminar. I continue to think about that discussion and how it relates to American electoral politics.
The issue of debt provides a way to keep focus on the frustration of the American Dream as it is part of the experience of many Americans, from the poor to the middle class to even the upper middle class. It is an issue of the concern of the 99%.
Yet, there are many activists in and theorists observing the movement who council against this, such as Jodi Dean. Debt is too individualized a problem. It would be better to focus on an issue of greater common, collective concern (e.g. the environment). The issue of debt is too closely connected to the right wing concern about deficits, and criticism of student debt can too easily become a criticism of higher education.
This presents a serious political problem. There is no broad agreement on debt as the central issue, and no leadership structure or decision making process which can decide on priorities. And of course, there are many other issues of contention. Primary among them, in my judgment, is the question of the relationship between OWS and American electoral politics.
It is here where the activists in OWS, like their new “new social movement” colleagues in Egypt and the Arab world more generally, are not prepared for practical politics. Coordinated strategy is beyond their capacity. One faction’s priority, debt or the reelection of President Obama, is not the concern of another’s, or even a position which it is forthrightly against. There are too many different positions within the movement for it to present a coherent sustained position. People with very different positions were able to join with each other and act politically thanks to the new media, but also thanks to that media, they were not required to work out their differences . . .
Read more: Politics as an End in Itself: Occupy Wall Street, Debt and Electoral Politics
By Gary Alan Fine, August 6th, 2012 
August 1, 2012 will be marked in American history as Chick-Fil-A Appreciation Day. Typically on such celebratory, capitalist occasions business owners show gratitude to their diners by a discount or a balloon. That Wednesday was topsy-turvy. Dan Cathy’s customers reversed the tradition, showering this Atlanta-based corporate CEO with consumptive love. Lines stretched around the block, a record-breaking scene. It was a bad day for poultry; a good day for cows.
I admire Cathy’s chicken sandwich and waffle fries as much as any fried mercantile repast, even though my patronage is spotty. A business that closes on Sunday so that diners can attend church has made a financial bow to belief. One can hardly imagine Einstein’s Bagels, say, closed on Saturday.
But several weeks ago, Dan Cathy crossed a line. He didn’t change his opinions, but those opinions became newly publicized. Mr. Cathy was quoted as defending traditional marriage – for God’s sake! – suggesting that gay marriage is “inviting God’s judgment on our nation.” I am not in the business of discerning God’s judgment. My concern is more parochial.
After Cathy’s remarks were broadcast, several politicians suggested that there was no place for Chick-Fil-A in their blue-state communities. Rahm Emanuel, no shrinking violet, opined that Cathy’s values were not “Chicago values.” Surely the Daleys would not have forgotten the Catholic Church down the street. Pandering attempts to banish the chain because of politics are clearly unconstitutional, particularly in the absence of evidence that they deny service to any customer.
Citizens properly have the choice to patronize whichever business they wish. Private boycotts for political reasons fall within our rights. The question is not whether such boycotts are legal, but whether they are wise.
I am troubled by choosing consumption based on the boss’s belief. Let us take the case – the case at hand – of “gay marriage.” In the United States today we are equally split . . .
Read more: Reflections on Chick-Fil-A Appreciation Day
By David Howell, June 22nd, 2012 
After the dismal employment numbers reported by the Labor Department for May, media attention has begun to focus on the summer job shortage for teenagers. According to one AP article published in news outlets around the globe, “Once a rite of passage to adulthood, summer jobs are disappearing,” which appeared under the heading “US teens now get adult competition for summer jobs.” A central theme has been the job competition from immigrants. Experts are quoted about the severe long-term consequences: lower skills, reduced labor force attachment, and rising inequality.
None of this is wrong, but we need a strong dose of common sense about priorities. Our labor market crisis – now in its 5th year – is centered on the inability of vast numbers of adult workers to find full-time jobs that pay living wages. That there is a major summer jobs shortage for teens is real, but it’s importance pales next to the costs of the employment problems of prime-age workers. If there is a teen crisis, it has much more to do with academic preparation and college completion than with the availability of summer jobs.
Yes, the job market for teens is likely to be as bad as last summer – we won’t know exactly how bad until the June and July numbers appear. But we do know that teen employment rates are at an all-time low. The employment rate for 16-19 year olds has collapsed since 2000, with similar huge declines in the early and late 2000s (from 45% to 36.2% between 2000 and 2004, and then from 34.3% to 25.5% between 2007 and 2010). Particularly worrisome is the sharp decline for 18-19 year old black teens: from 31.8% in 2007 to 23% in 2010. If there is any good news in these numbers, it is that between 2010 and 2012 these rates at least didn’t get much worse.
And yes, in the worst jobs collapse since the Great Depression, teenagers will face increasing competition from adults, and some of these will be immigrants. But this is nothing new – decades ago, Katherine . . .
Read more: The Teens Summer Jobs ‘Crisis’
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