Fueled By Scotch

"I cannot call to mind a single instance where I have ever been irreverent, except toward the things which were sacred to other people." -Mark Twain

Category: Economy

A small point of clarification on false equivalence

by Cosmo Houck

On one of the slides I put up this morning it says “congressional gridlock”. I had mixed feelings about putting this in. On the one hand, congressional paralysis has been a real and frustrating thing. However, false equivalence in allotting blame between the two parties drives me nuts. So note, while I left it in, I by no means mean to suggest that the Dems are equally to blame for a lack of congressional productivity; I firmly believe that as the party of small government Republicans have an explicit incentive to make the functioning of government as inefficient as possible.

The Nature of the Problem 1.0 #OWS

by Cosmo Houck

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People ask me a lot to explain OWS to them. I’m not really sure why, because I haven’t been to any of the protests, and I haven’t been involved in any way. I think it’s just because I’m young and occasionally voice dissatisfaction with the status quo.

Anyway, while I can’t speak for any of the OWS protesters, I have some ideas about why they’re out there. In fact, I think anyone who’s confused just hasn’t been paying attention. It’s complicated, though, because there are so many things to be pissed off about there’s not always perfect ideological coherence between everyone who’s angry. For some reason this seems to be a problem for some people (journalists), and you can pick up on it whenever they describe protests as “inchoate”. I think there’s enough wrong out there that to expect everyone who shows up at a protest to conform to some overarching ideological purpose is absurd.

Anyway, it’s been bothering me, because there’s all this really disturbing information out there, stuff that should have people up in arms, and I get asked what OWS is all about–like it’s some great mystery. Maybe it’s just in my head, but I’d like to think a lot of people are out there because there’s a lot wrong with where we’re at.

The other day, through Gizmodo, I came across this presentation that Zach Holman gave. I thought it was pretty cool. Infographics seem to be all the rage, but they too often (in my eyes) subordinate information to style. A nice crisp and clean slide format seems like a happy compromise.

Then I got to thinking: many of the myriad challenges we face can be expressed pretty simply through some brutal numbers; what if instead of writing some absurdly long soliloquy, I could do it through slides?

My end result isn’t nearly as polished as its inspiration, but that’s what I decided to do. I used this color palette from Colour Lovers, and I got to work. There’s a lot I didn’t get to, foremost foreign policy and the enormous prison population in this country. There’s a lot that’s messed up. I’m happy with what I’ve got so far, but I’m not satisfied. Maybe if this meets a favorable reaction I’ll expand it.

Additionally, and this is really important, all I did was collate other peoples’ work here. I’ll list my sources after the gallery with the slide number–go check them out.

Sources:

SLIDE 3: Simple Google search for unemployment numbers

SLIDE 4: Huffington Post article on unemployed workers

SLIDE 5: The Weekly Standard on the income drop under Obama

SLIDE 7: A variety of graphs from Mother Jones on income inequality (this will pop up again later)

SLIDE 8 & 9: The Vanity Fair article credited with providing the 99% slogan for OWS

SLIDE 10 & 11: The Mother Jones graph compilation again

SLIDE 13: A few articles. I didn’t use ProPublica, but they have an accounting of the pure bailout money given to Wall Street. the New York Times has a much larger figure that takes into account other things, like loans. This is the number I used. And Bloomberg provides the information on banks investing money in government treasuries.

SLIDE 15: Took these names from two sources. The incomparable Glenn Greenwald on why Dems who fantasize about OWS support should rethink, and this Slate article (which, admittedly, makes the case that Wall Street doesn’t have remarkable ties to the administration)

SLIDE 17: The Greenwald article from above.

SLIDE 18: The WSJ.

SLIDE 20: Democracy in Distress.

SLIDE 24: Ok, this great quote came to my attention in a Gawker post about how a woman made it into an OWS sign and then lost her job. She took the quote from this thoughtful piece over at The Atlantic.

SLIDE 28-32: This new report from Citizens for Tax Justice and the Institute on Taxation and Economic Policy via Salon.

SLIDE 34 & 35: This report by the American Society of Civil Engineers.

SLIDE 37: The Huffington Post on college grads and entrepreneurship.

SLIDE 38: “The End of Men” over at The Atlantic got me thinking about this, and then I got that top five from NPR.

SLIDE 43: This great excerpt came from that same Vanity Fair piece again-the one credited with providing the OWS slogan.

SLIDE 44: I’ve seen this pop up on Facebook all prettified and everything, but I’m pretty sure this blog post is the origin point for this great Venn Diagram. Go check it out-it’s a good read and deserves credit.

SLIDE 45: I love this quote, and used it in my blog post “Much Ado About Voting“. Unfortunately, it’s only available online for $30 or so. For more info, check out my post.

And that’s it.

They sure look like a disorganized mob to me…

by Cosmo Houck

Source: http://www.vimeo.com/30081785

Insularity and Self Interest; the Mass Delusions of the Power Elite

by Cosmo Houck

In mind of the Occupy Wall Street protests going on nationally, and in light of clearly biased reporters convinced of their own objectivity, I thought I’d relate a conversation I had a year or so ago.

I have an aquaintance who I very much respect, and generally think of as a well-informed and intelligent individual. This person also makes quite a large salary (in excess of $250,000), and in a profession where they routinely come into contact with people who make even more money, and who possess a great deal of power.

I forget precisely what we were talking about at the beginning of the conversation (probably taxes) but I mentioned, out of hand, that anyone making $100,000 a year was reasonably wealthy. Not mansion and jet plane and Ferrari welathy, to be sure, but comfortably far better off than the median income in the United States ($50,303 in 2008). To be sure, there are areas of the country with higher costs of living, and that as a result also possess higher mdeian incomes, but I haven’t found anywhere yet where $100,000 is anything less than better off than a lot of other people.

$250,000, then, is rich. There is no doubt about that-at least as long as rich is a relative term, and dependent upon how you’re doing compared to everyone else.

Which brings up the core of my point, and one that is admittedly old news: people judge their wealth relative to the people they spend time around, and largely have no remote idea what the distribution of wealth nationally actually looks like.

This was highlighted in my conversation by my aquaintance’s heated assertions that their family was solidly middle class, and, in fact, struggling in the poor economy as much as anyone else. And besides-how dare I!-this aquaintance was around wall street traders and powerful people all the time who make millions; clearly, in comparison to them, my friend was positively impoverished.

This was the gist of the conversation, but I also wish I could capture the cloying condenscension at my naivete; ah, the young looking at actual income distribution, with no concern for the financial struggles of people making lots of money in the Real World.

That sense of condescension I’ve seen manifested throughout criticisms of the ongoing protests. It’s also become more and more problematic that people who are wealthy do not conceive of themselves as wealthy, largely; confined to interactions with people who make as a much money as they do, they are so divorced from the problems that the great majority of people face that they actually feel victimized and persecuted. Nevermind the millions of unemployed, the lack of new jobs, or the fact that the people who triggered the financial collapse faced no consequences of consequence.

I opined some time ago that I thought that in a common disgust at the corporate and political edifice in this country liberals and libertarians might see their interests converge; I think to some degree these protests have represented that. People have criticized a lack of coherent policy prescriptions, but those people are missing (to me) what is appealing about the protests. More than providing answers, they hold the potential to shine a lens on the chronic insularity and self interest of this country’s power elite which has led to the debasement of core American values like the maximization of equality of opportunity.

Oh, and all those Wall Street traders might be pyschopaths.

Crises and Capitalism

by Cosmo Houck

A couple weeks ago there was an editorial from the BBC that argued that capitalism and its process of creative destruction had played a pivotal role in all the bad things that have been happening lately, and that maybe we should pay some more attention to Marx than we usually do. It’s something I welcome simply because that kind of stuff doesn’t get a lot of play in the media, certainly not in this country, and if you ever want to figure something out I think it’s probably not the best policy to dismiss things out of hand.

It also reminded me of this video, which I saw through the recommendation of a friend last spring, and which I think also does a nice job of summarizing some arguments that may be familiar in academia but get essentially no play in the broader public sphere.

It’s easy to forget now, but in the immediate aftermath of the financial crisis even some pretty mainstream people were thinking it would have serious consequences for the faith people had in capitalism as a viable economic model. I mean, Michael Lewis, who is hardly a radical leftist, made a big deal in The Big Short about a couple of characters thinking it would have to mean the end of the free market system as it existed, and if I recall correctly he repeated those sentiments on things like The Daily Show. He was hardly alone either.

Of course, we know what’s happened since then: essentially nothing. And more than that, in the years since the immediate crisis, there has been a resurgence on the Republican right wing, with some serious libertarian ideals getting tossed around.

This is upsetting if you believe David Harvey and the BBC author up there because it means things are just going to get worse until we decide we want to run things differently. More immediately than that, though, is the dispiriting fact that not only is it in vogue to tout Friedman on the right, the other side gets no play on the big stage and with politicians.

On Unemployment and the American Dream

by Cosmo Houck

Earlier I took issue with what struck me as Jim Geraghty’s cavalier attitude towards the unemployed. My problems primarily stemmed from what I viewed as a certain cognitive dissonance; in my eyes he correctly identified the problem (workers who are uncompetitive in a global labor market) and promptly utterly misattributed the cause of the problem (American workers are lazy?) while also dismissing the actor that has the power to tackle structural issues (the government).

It also happens that today Steve Fraser and Joshua Freeman published a piece at Salon (originally from TomDispatch) entitled “The Secret history of America’s unemployment”. It’s lengthy, it’s good, you should go read it.

The part I’m most interested in, because it had a great impact on me a couple of years ago, is the process through which a permanently unemployed class became normalized. In Fraser’s and Freeman’s narrative this largely happens in the aftermath of World War II, an account that jives with the general framework I already have in my head of that particular period of time.

I bring all this up because in my sophomore year of college I had a moment that I struggled with quite a bit where I confronted the idea of the natural rate of unemployment (subsequently replaced by the NAIRU). The idea was advanced in the 60s by Milton Friedman (among others, but Friedman was who I read in college) and essentially boils down to this: there is a certain level of unemployment that is necessary for a capitalist state to function optimally. In other words, when things are working perfectly, some people won’t have jobs.

No doubt this seems mundane to my friends who are economists, and I realize I’ve greatly simplified complex ideas, but this pretty basic principle forced me to seriously reevaluate. While I’d long harbored doubts (shoved to the back of my mind) about the feasibility of our “American Dream” this forced me to confront them. If the system that purported to create “equality of opportunity” also required a permanently unemployed class, it seemed to me that regardless of how hard everyone worked someone was going to get screwed. And that’s how the American Dream died for me.

Of course, not everyone has an equal shot of being in that permanent underclass either—a phenomenon Friedman characterizes as a juxtaposition between chance and choice. In Free to Choose Friedman wrote, “The amount of each kind of resource each of us owns is partly the result of chance…Chance determines the kind of family and cultural environment into which we are born…Chance may destroy or enhance the resources we start with.” (21-22) Naturally, the other part that determines an individual’s place and role is the choices they make, and that’s the part Friedman emphasizes.

But it’s important to remember that Friedman also acknowledged the role of factors beyond choice, and that’s where Geraghty found himself last week. With the labor market now largely globalized, if institutions like public education and such consistently perform at a lower level here in the U.S.  American workers will find themselves on less and less competitive footing compared to the rest of the labor market, and there’s no reason that jobs that leave here have to come back. In a global capitalist economy there is going to be a permanent class of unemployed workers, and it seems to me there’s nothing really preventing a large portion of that population from being here, other than the fact that up until recently it has been worth it to hire Americans because we have been able to provide skilled labor that other places have not.

Free market theorists like to talk about all the benefits of a globalized economy (for instance, cheap products) but that doesn’t do much good to people without jobs who rely on government programs that are under assault for their subsistence. I don’t consider myself anti—capitalist; the ability of a capitalist economy to produce tremendous innovation is an enormous asset for our species, and it can provide great wealth. But the idea that we should just deregulate and cut government spending and let people fend for themselves in a system that not only is going to exploit a huge working population for their labor at low wages but ensure that some people remain unemployed at a structural level strikes me as shockingly inhumane.