If there were any doubt of the direction the Trump-dominated GOP is taking, Tucker Carlson’s monologue on Fox News Wednesday should remove it. Carlson’s not a political leader, but he’s a bellwether, and his words are already being cheered by prominent conservatives. Meant as a rebuttal to Mitt Romney’s New Year’s Day op-ed, the speech wasn’t original, but it reveals the degree to which Republicans have embraced the populist authoritarianism they once condemned.
Carlson began with several swipes against “bankers” who exploit the working class to line the pockets of spooky elites. If that anti-capitalist lingo sounds familiar, so does his contemptuous shrug at the ways free markets improve lives. “Does anyone still believe that cheaper iPhones or more Amazon deliveries of plastic garbage from China are going to make us happy? They haven’t so far.” This is a time-worn rhetorical technique of freedom’s enemies, who sneer at material standards of living in order to elevate abstract social goals over the needs of actual people. In fact, cheaper consumer goods have benefited Americans immeasurably. Some 85 million now own iPhones, for instance, and use them not as trinkets, but as work tools or devices to keep in touch with loved ones. And while Amazon may deliver “plastic garbage,” it also delivers syringes to diabetics, toys for special-needs kids, and even prosthetic limbs for the disabled—all, of course, made of plastic. Freer markets and abundant, affordable imports, have made the average American wealthier than Rockefeller, and 90 times richer than the average human being.
Does that translate into happiness? It depends. More wealth means better access to innovative medical technology, cheaper and safer transportation, cultural riches of art and music. But by making possible a wider spectrum of experiences and opportunities, it also means more chances for disappointment and fear—the real source of the “alienation” capitalism’s accused of generating. Money can’t buy happiness, but material prosperity is a necessary ingredient for the good life, and the practical elimination of poverty today is giving more people than ever before the opportunity to lead lives in ways that accomplish their own goals.
Government policies that curtail their choices are, by definition, obstacles to the pursuit of happiness and impose harms that politicians literally cannot imagine. Consider “cheap iPhones”: nobody can calculate the hours saved thanks to driving-directions features, the lives saved through quick access to 911, or the millions of simple, happy conversations that screentime or text messaging makes possible for families separated by long distances. To deride this as materialism is to scoff at simple, even beautiful human joys. Imagine the consequences of eliminating smartphones (you can’t) and you get a sense of the inhumane sentiments that anti-materialistic slogans conceal.
Yet to Carlson, economic freedom is disposable—”a tool…created by human beings” “like a staple gun or a toaster,” which politicians can eliminate if they decide it’s “weaken[ing]…families.” Since “the goal for America is…happiness”—which includes things like “dignity, purpose, self-control, independence, above all, deep relationships with other people”—the failure of international bankers to make people happy and give them rewarding family lives is grounds for bureaucratic control. Although pitched as anti-government populism, Carlson’s prescription is clear: government management of the economy in order to force citizens into what politicians consider “happiness.”
But America’s “goal” isn’t “happiness”—it’s freedom to pursue happiness. That phrase was written by people who rejected the idea that government gives us liberty to serve collective ends. Their commitment to self-determination has often been attacked by strongmen who think government should manage our choices in order to stabilize society. “Man is man only by virtue of the spiritual process in which he contributes as a member of familial, social groups, the nation,” wrote Benito Mussolini. “Fascism is therefore opposed to all individualistic abstractions based on eighteenth century materialism…[and] does not believe in the possibility of ‘happiness’ on earth as conceived by the economic literature of the 18th century.”
Yet free economic exchange is inseparable from genuine dignity and valuable relationships. That should be clear at least to women, who for generations were denied independence by laws that restricted their freedom, often in the name of preserving “the family” and protecting their virtue. The first stirrings of feminism did destabilize long-standing traditions about the family, as freedom usually does—witness the controversy over the climax of Ibsen’s A Doll’s House, in which Nora is so emboldened by her experiment with economic freedom that she finds strength to leave her unhappy marriage. Few women today would choose to return to an era when their fates were shaped by government to serve what officials considered the social good. Yet for Carlson, women’s economic freedom is among the most fundamental ills in our society. Thus he condemns hard-working female executives such as Sheryl Sandberg who think it’s “more virtuous to devote your life to some soulless corporation than it is to raise your own kids.”
Obviously family is important. But like everything, it’s a blessing when freely chosen, and a burden when conscripted as a political device by which the hopes and dreams of actual people are subordinated to the demands of political authorities. Restricting freedom in order to encourage “deep relationships with other people” doesn’t promote, but obliterates, dignity, self control, and independence. It’s a recipe for squalor and resentment, not happiness. Yet it’s the go-to recipe for authoritarians who see individual pursuits as trivial compared to the perpetuation of the state.
Freedom—economic or personal—is not “created by human beings.” It’s the rightful, natural state of all persons. It can unjustly be destroyed, but never transcended. Nor were the infinitely diverse institutions we call “the market” ever “created”—they’re a spontaneous order generated by the free choices of countless individuals pursuing happiness as they decide. Some of their choices may be foolish, or seem so to outsiders who lack full information. But the freedom to make choices, for all its disruptiveness, is the only thing “independence” or “happiness” can ever truly mean.
Capitalism Is Broken
The announcement came rolling from the Eccles Building at 2 p.m. Eastern…
No rate hike today.
Jerome Powell has decided to sit on his hands — for now.
In his very words:
It’s important that monetary policy not overreact to any one data point… The FOMC will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion.
That is precisely why the next move will be a rate cut.
We have reckoned lots lately about the inverted yield curve… and the recessionary menace it represents.
The 10-year versus 3-month yield curve recently inverted to its lowest level since April 2007.
Meantime, 10-year Treasury yields hover at two-year lows — 2.04%. One Bloomberg opinion piece instructs us to prepare for 1% yields.
As the old-timers know… the bond market gives a truer economic forecast than the chronically dizzied stock market.
Meantime, the New York Fed’s recession model reveals a 30% probability of recession within the next year.
It last gave those same odds in July 2007 — merely five months before the Great Recession was underway.
JP Morgan places the odds of recession in the second half of this year at 40%.
And Morgan Stanley gives a 60% likelihood of recession within the next year — the highest since the financial crisis.
Yes, the Federal Reserve will soon be cutting rates.
Conspicuously absent from today’s statement was the word “patient.” Thus Mr. Powell telegraphs that he is ready to move.
Federal funds futures presently give nearly 90% odds of a July rate cut.
The market further expects as many as three rate cuts by this time next year — perhaps four.
We are compelled to restate the blindingly obvious:
The Federal Reserve has lost its race with Old Man Time.
The opening whistle blew in December 2015… when Janet Yellen came off the blocks with a 0.25% rate hike.
If the Federal Reserve could cross the 4% finishing line in time, it could tackle the next recession with a full barrel of steam.
Alas… it never made it past 2.50%.
The Federal Reserve cannot return to “normal.”
The stock market will yell blue murder and take to violent rebellion if it tried — as happened last December.
No, Wall Street has Mr. Powell in its hip pocket — as it had Janet Yellen, as it had Ben Bernanke, as it had Alan Greenspan before him.
But it is not only the Federal Reserve…
Last year the world’s major central banks were pledging to “normalize.”
But now they are in panicked retreat…
All have taken to their heels, hoofing 180 degrees the other way.
Both the Bank of Japan and European Central Bank are now gabbling openly about rate cuts and/or additional quantitative easing.
“It’s all in the open now. Front and center. The new global easing cycle has begun before the last one ended.”
This is the considered judgment of Sven Henrich, he of NorthmanTrader.
We must agree.
Yet the central banks have only themselves to blame…
They grabbed hold of the poisoned apple during the financial crisis.
They gulped… and took the first fateful nibble. It proved nectar to the stock market.
Encouraged by the results, they soon munched the full dose… and later went plowing through the entire tainted orchard:
Zero interest rates, QE 1, 2 and 3 — Operation Twist — the lot of it.
Even with trade war raging and recession hovering, stocks are within 1% of record heights.
And so the banks are too far gone in sin to turn back now.
Their greatest casualty?
Henrich on the wages of central bank sin:
Let’s call a spade a spade: Equity markets and capitalism are broken. Neither can function on any sort of growth trajectory without the helping hand of monetary stimulus. Global growth figures, expectations and projections are collapsing all around us and markets are held up with promises of more easy money, in fact are jumping from central bank speech to central bank speech while bond markets scream slowdown.
We fear Mr. Henrich is correct.
We further fear capitalism will get another good round pummeling in the years to come…
The Federal Reserve’s false fireworks will land as duds against the next recession.
Cries will then go out for the artificial savior of government spending — Modern Monetary Theory (MMT).
Free college tuition… universal Medicare… jobs for all… a $15 minimum wage…a possible Green New Deal…
These and more will be in prospect.
Politicians will go running through the Treasury as a bull runs through a china shop… and leave the nation’s finances a shambles.
Only then — too late — will they discover that debt and deficits matter after all…
Managing editor, The Daily Reckoning
The Secrets of Surveillance Capitalism
Google surpassed Apple as the world’s most highly valued company in January for the first time since 2010. (Back then each company was worth less than 200 billion. Now each is valued at well over 500 billion.) While Google’s new lead lasted only a few days, the company’s success has implications for everyone who lives within the reach of the Internet. Why? Because Google is ground zero for a wholly new subspecies of capitalism in which profits derive from the unilateral surveillance and modification of human behavior. This is a new surveillance capitalism that is unimaginable outside the inscrutable high velocity circuits of Google’s digital universe, whose signature feature is the Internet and its successors. While the world is riveted by the showdown between Apple and the FBI, the real truth is that the surveillance capabilities being developed by surveillance capitalists are the envy of every state security agency. What are the secrets of this new capitalism, how do they produce such staggering wealth, and how can we protect ourselves from its invasive power?
“Most Americans realize that there are two groups of people who are monitored regularly as they move about the country. The first group is monitored involuntarily by a court order requiring that a tracking device be attached to their ankle. The second group includes everyone else…”
Some will think that this statement is certainly true. Others will worry that it could become true. Perhaps some think it’s ridiculous. It’s not a quote from a dystopian novel, a Silicon Valley executive, or even an NSA official. These are the words of an auto insurance industry consultant intended as a defense of “automotive telematics” and the astonishingly intrusive surveillance capabilities of the allegedly benign systems that are already in use or under development. It’s an industry that has been notoriously exploitative toward customers and has had obvious cause to be anxious about the implications of self-driving cars for its business model. Now, data about where we are, where we’re going, how we’re feeling, what we’re saying, the details of our driving, and the conditions of our vehicle are turning into beacons of revenue that illuminate a new commercial prospect. According to the industry literature, these data can be used for dynamic real-time driver behavior modification triggering punishments (real-time rate hikes, financial penalties, curfews, engine lock-downs) or rewards (rate discounts, coupons, gold stars to redeem for future benefits).
Bloomberg Business Week notes that these automotive systems will give insurers a chance to boost revenue by selling customer driving data in the same way that Google profits by collecting information on those who use its search engine. The CEO of Allstate Insurance wants to be like Google. He says, “There are lots of people who are monetizing data today. You get on Google, and it seems like it’s free. It’s not free. You’re giving them information; they sell your information. Could we, should we, sell this information we get from people driving around to various people and capture some additional profit source…? It’s a long-term game.”
Capitalism Versus Democracy
It was always just a matter of time before the reemergence of establishment Democrats reminded people why they were booted from power in 2016. As ugly as Donald Trump is and as not constructive as his tenure in the White House has been, the Democratic establishment would rather lose with establishment candidates and retrograde policies than loosen its grip on its service to the oligarchs.
Phrased differently, if Democrats cared about ‘defeating Trump,’ they would offer programs that people want. But they are so firmly in the grip of corporate interests and the oligarchs that they won’t do so. The Republicans are just as beholden, but they offer fewer (manufactured) illusions. They represent the interests of capital. This transparency provides political clarity for those who oppose their policies.
Graph: American politicians act as if the rich minority should control our politics. Policies in the public interest are invariably corrupted through the legislative process to serve them. This is a near perfect inversion of democratic control where the richest 1% + 9% would only exist at the behest of the polity. Because it concentrates wealth, capitalism is antithetical to democracy. American elections will remain a farce until democratic control is put in place.
When announcing a congressional Medicare for All hearing recently, senior Democrats sought to control the admissible language to exclude the phrase ‘Medicare for All.’ They intend to focus instead on ‘access’ to healthcare which keeps health insurers as the extractive layer that has given the U.S. the most expensive healthcare system in the world with the worst outcomes.
What this signals, for those to whom it isn’t yet obvious, is that there are no circumstances short of revolution that will move the Democrats from service to their rich patrons. Given the stakes of environmental crisis, deaths of despair overtaking the hinterlands and military inclinations pushing the U.S. toward wars it can’t win, Democrats are signaling that they would rather go down with the U.S.A. Titanic than offer up the solutions being put forward by young socialists.
Lest the larger picture be missed here, American capitalism, for which claims of ‘efficiency’ have been used to shape and rebuild the world, has produced the least efficient healthcare system in the world in order to fill the pockets of a class that feeds on human misery. Thanks to Obamacare, health insurance executives are now the most overpaid in the entire insurance industry. This, as medical bankruptcies are undiminished since passage of the law.
The illusion of political competition facilitates the lie of democratic control. Republicans deny climate science while the Democrats place the interests of the businesses that are degrading the environment ahead of the popular will when they craft nominally public policies. Look again at the graph above: given the numbers in terms of citizens represented (executives + oligarchs), why would they have any say in the determination of public policies in a democracy?
As was the case in 2016 and for decades prior, the so-called political center is a radical outlier in terms of formulating policies in the public interest. Fifteen times as many people in the U.S. die every year from not being able to afford healthcare than have died in all of the terrorist attacks of the last century. The political ‘center’ is code for the interests of capital. It is killing the planet and bleeding the polity dry. It functioned as misdirection when the vestiges of the New Deal were intact— before ‘precariat’ described everyone who isn’t in the 1%.
The West is now four decades into a neoliberal ‘experiment’ that has failed on its own terms, but that shows no signs of either waning from its own contradictions or being dislodged politically. The political ossification that it has created comes through class control of the public sphere, domination of the political process via campaign contributions and the economic role that corporations have assumed at the heart of Western political economy.
Graph: CO2 emissions are both fact and metaphor for the seemingly unstoppable march toward environmental Armageddon. The capitalist version of a Green New Deal is premised on greatly increasing destructive environmental production in order to reduce it at some as-yet unspecified future date. As basic arithmetic has it, 5 + 1 = 6, not 4. An eco-socialist GND requires getting capitalists out of the way while the American political establishment exists to keep them in control. Source: c2es.org
While confusion has been sown around the meaning of ‘corporatism’ that stood at the center of (Benito) Mussolini’s vision of the good life, a defining characteristic of both Italian and German fascism was capitalist-state alliances where state power was used for the benefit of select capitalists and select state actors. Labor unions were systematically disempowered, and the interests of powerful economic and state actors were put forward as those of the polity.
An irony of the present is that with all the mechanisms of capitalist-state control— a capitalist media that places business interests ahead of civic accountability; corporate control that regulates the lives of citizens as surely as totalitarian regimes throughout history; and the systematic immiseration and debasement of the democratic core of the polity; a plurality is still able to look past its own interests to the public good.
A secondary irony is that as true as denunciations of Donald Trump and the Republican Party may be, the Democratic establishment has no history of challenging the substance of their programs in recent decades. Establishment Democrats want to preclude a Green New Deal and Medicare for All as surely as Republicans do. Differences between the Parties are over how to best do so— outright opposition versus killing them legislatively.
And in fact, this difference in strategy suggests the basis of bourgeois loathing of the ‘lesser’ classes. Republicans deny climate science (the ignorant heathens) while Democrats accept its conclusions while continuing to let their donor class dictate policy that perpetuates environmental degradation. Given the stakes, the Paris Accord was a fig leaf placed over a missing environmental policy when Barack Obama gave it rhetorical support.
Here is the IPCC (UN) report, released a mere two years after Mr. Obama left office, stating that far more radical action is needed to address climate change. Here is IPBES (UN) report, released a mere two years after Mr. Obama left office, stating that far more radical action is needed to address mass extinction. Environmentalists have been providing evidence that radical action is needed for five decades.
The method of the Democrat’s grift is to hand public policy to business interests just as Republicans do, but through abstract devices like trade agreements. ALEC (American Legislative Exchange Council) writes local, state and Federal policies that Republicans put forward as legislative proposals. Democrats push trade agreements that have Investor-State Dispute Settlement clauses to prevent governments from passing laws in the public interest.
As the graph of total CO2 emissions (above) suggests, the effect is a continuity in public policies hidden behind a veil of faux political competition. The American bourgeois congratulates itself on its clear understanding of climate change while earning its living in the service of the oligarchs and corporate chiefs who benefit from environmental degradation. Democratic politicians sooth psyches through language of ‘working toward’ and ‘access’ that gets its professional class constituents from one PowerPoint presentation to the next. The point: the bourgeois are an impediment to effective public policies, not its guardians.
With their growing use of loyalty oaths and exclusionary tactics, Democrats have adopted the logic of the radical right for the reasons of the radical right— to protect the business interests of their donor class from rising bolshevism (socialism) and market mishaps. But commies didn’t crap the environment. And market mishaps are an aspect of capitalism, not socialism. So, Democrats are joining Republicans to protect capitalists from the consequences of their own practices.
Those not directly benefitting from it want to be protected from capitalist predation. Medicare for All, a Green New Deal, raising taxes on the rich and having a political voice are popular with the little people. The political establishment also exists to protect the oligarchs and corporate executives from democratic accountability.
The self-aggrandizing ‘Art of War’ drivel of 1980s capitalist mythology posed capitalist warriors competing against one another in the rough and tumble marketplace. By 2000 or so this had given way to K Street lobbyists, congress and the Federal Reserve doing back alley deals to protect them from market failure. Payday loans, government granted monopolies and instigating wars to sell munitions all combine state with private power to extract economic rents— market competition has nothing to do with it.
Any honest assessment of American business— war, financial gamesmanship, environmental degradation and pillaging the polity, would make evident that some fair portion of the oligarch class 1) belongs in prison and 2) should be made to give up its ill-gotten gains. Some politely worded version of this political program would likely win any election hands down, suggesting that the actual political center is a few miles left of the political establishment.
Graph: Any environmental accounting based in history would place the U.S., and more precisely capitalism, front and center as both cause and beneficiary of environmental degradation. The U.S. + the E.U., really Germany and Britain, caused climate change through greenhouse gas emissions from the dawn of the industrial revolution to the present. China has become to major emitter only recently. But Chinese emissions built the export economy that flooded the West with cheap imports. In other words, Western emissions were outsourced. Source: c2es.org
A question to be answered sooner rather than later is: what configuration of political economy is needed to resolve the multiple crises that are underway? With political hopefuls offering policy proposals going into the 2020 elections, those that aren’t tied to workable political economy are likely to be little more than empty posturing.
A Green New Deal and Medicare for All would alter economic relationships. The establishment posture is: we need for ‘our’ political proposals to serve multiple economic interests. Not addressed is that it is these very interests who turned a livable environment and health care into political problems in need of resolution. So why would they be 1) left intact and 2) considered ‘partners’ in resolving the problems they have created?
The path of least resistance within the establishment frame is market-friendly proposals like carbon taxes and public-private partnerships to build renewable energy technologies. The logic is to increase the use of environmentally destructive technologies to reduce them at some future point. Again, 5 + 1 = 6, not 4. The only path to meeting IPCC and IPBES (above) goals will be to reduce cumulative environmental degradation, meaning 5 – 1 = 4.
All of the establishment plans, including those from socialists, are variations on 5 + 1 = 6, again meaning that environmental degradation must increase to reduce it at some future point. This is the same capitalist ‘growth’ logic that isn’t working. Any plan that isn’t at least cognizant of this paradox should be rejected out of hand. Moving from industrial to human-scale agriculture will require land redistribution. If people can reconnect with ‘the world,’ they might even be happier for it.
Through the concentration of economic power, capitalism is antithetical to democracy. Capitalist ‘freedom’ is the freedom of the oligarchs to exert political control through this power. This contradiction explains why the polity has little to no influence over government policies, causing growing antipathy toward the political establishment. Democrats aren’t going to voluntarily abandon their donors and Republicans wouldn’t even pretend to, suggesting that the preferred direction of the political establishment will continue to be hard right.
As Democrats are in the process of demonstrating, existing political economy must be gotten out of the way before there is any chance that solutions to current crises will be workable.
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