Friday, September 27, 2013
Wednesday, September 25, 2013
Ruth and Jeremy
I HEAR COMMENTS SOMETIMES FROM MY CONTEMPORARIES that kids today
don’t know the meaning of discipline, that there is currently an
epidemic of parents spoiling their children, and so on.
While contemporary parenting probably falls short in some ways, it is worth understanding that older people have been lodging similar complaints about the supposedly easier lives of the Younger Generation since the earliest days of civilization — perhaps even before there existed lawns that kids needed to get off of — and it has always been anywhere from a wild exaggeration to complete nonsense.
About 20 years ago, I lived on the northern border of Oakland, in the Rockridge district. There was a place there called the Buttercup Café, which had food that was both pretty good and reasonably priced. I had very little money then, so I usually stopped in for a cup of soup — all I could usually afford — after work.
I was something of a regular there and got to know the waitresses pretty well. There was one waitress named Ruth, and we got to be pretty good friends, in the way waitresses and regulars sometimes do. On rainy winter nights when business was slow I would sit at the counter and we’d talk for hours about where we’d grown up and what we thought of the world.
She’d grown up hard and close to the bone, in a hardscrabble little Iron Range town somewhere in northeastern Minnesota. Her dad was a Jim Beam aficionado, and I got the sense in our conversations that his drinking was a sore subject with her. She never talked much about it, and I respected her too much to pry, but it was there in her eyes sometimes when she talked about back home.
Some people move to California for economic reasons, some for the climate. I got the sense from Ruth that Minnesota was a place from which she had fled.
We were talking one night about northern California and some of the cultural differences she’d noticed since she’d moved here from her small Midwestern town. “One thing,” she said, “is how parents treat their kids out here — they just let them run wild! No discipline at all. Back home, if you did wrong you got a beating — none of this ‘time out’ stuff.
“You’ve gotta keep kids in line. When I have kids, that’s how I’m going to raise them.”
Hearing her say that triggered an old memory. I stared out the window for a moment at the rain dripping off the awning, then turned back to her and said, “Ruth, let me tell you about Jeremy.”
When I was elementary school-aged in my old neighborhood in Richmond, I often attended a day camp run by the city in Wildcat Canyon, in the El Cerrito hills. On summer weekday mornings I would walk over to Cutting Boulevard and catch a yellow city school bus up the hill to the camp location.
Jeremy was about 7 years old, and he would always ride at the very back of the bus on the way to camp, sitting in the middle of the long bench seat so he could see everything going on in the bus during the daily ride up to Wildcat — almost as if he was afraid of missing something. He had striking eyes — light brown, inquisitive and filled with wonder. The world appeared to be endlessly fascinating to him, and he radiated a simple joy that I found very inspiring.
Each morning when I got on the bus I would look back at Jeremy — I felt a little protective of him. One day toward the end of the summer, I looked back as I boarded the bus and was immediately struck by a change in him.
He looked tired, weary, and the light in his eyes had gone out — like something important inside of him had broken.
I gave one of the counselors, a pretty blonde teenager, a look and motioned with my head toward the back of the bus. We walked back together and sat down across the aisle from each other, one row in front of Jeremy.
“What’s wrong, Jer’?” she asked.
He paused a moment, then pulled up the hem of the right leg of his short pants. On the front of his thigh was an angry purple bruise.
“What happened, Jeremy? Who did that to you?”
He looked up at us, his eyes filled with bewilderment and hurt, and said, “My daddy.”
When I finished telling this story to Ruth in the Buttercup Café, her eyes looked as if they were straining to hold back a river of tears.
“That’s … really sad,” she finally said.
“Yes, Ruth, it is.”
I moved to another town a short while later and lost touch with Ruth, but I hope she is married to a nice, sober guy — and I hope they give their kids time outs when they misbehave.
While contemporary parenting probably falls short in some ways, it is worth understanding that older people have been lodging similar complaints about the supposedly easier lives of the Younger Generation since the earliest days of civilization — perhaps even before there existed lawns that kids needed to get off of — and it has always been anywhere from a wild exaggeration to complete nonsense.
About 20 years ago, I lived on the northern border of Oakland, in the Rockridge district. There was a place there called the Buttercup Café, which had food that was both pretty good and reasonably priced. I had very little money then, so I usually stopped in for a cup of soup — all I could usually afford — after work.
I was something of a regular there and got to know the waitresses pretty well. There was one waitress named Ruth, and we got to be pretty good friends, in the way waitresses and regulars sometimes do. On rainy winter nights when business was slow I would sit at the counter and we’d talk for hours about where we’d grown up and what we thought of the world.
She’d grown up hard and close to the bone, in a hardscrabble little Iron Range town somewhere in northeastern Minnesota. Her dad was a Jim Beam aficionado, and I got the sense in our conversations that his drinking was a sore subject with her. She never talked much about it, and I respected her too much to pry, but it was there in her eyes sometimes when she talked about back home.
Some people move to California for economic reasons, some for the climate. I got the sense from Ruth that Minnesota was a place from which she had fled.
We were talking one night about northern California and some of the cultural differences she’d noticed since she’d moved here from her small Midwestern town. “One thing,” she said, “is how parents treat their kids out here — they just let them run wild! No discipline at all. Back home, if you did wrong you got a beating — none of this ‘time out’ stuff.
“You’ve gotta keep kids in line. When I have kids, that’s how I’m going to raise them.”
Hearing her say that triggered an old memory. I stared out the window for a moment at the rain dripping off the awning, then turned back to her and said, “Ruth, let me tell you about Jeremy.”
When I was elementary school-aged in my old neighborhood in Richmond, I often attended a day camp run by the city in Wildcat Canyon, in the El Cerrito hills. On summer weekday mornings I would walk over to Cutting Boulevard and catch a yellow city school bus up the hill to the camp location.
Jeremy was about 7 years old, and he would always ride at the very back of the bus on the way to camp, sitting in the middle of the long bench seat so he could see everything going on in the bus during the daily ride up to Wildcat — almost as if he was afraid of missing something. He had striking eyes — light brown, inquisitive and filled with wonder. The world appeared to be endlessly fascinating to him, and he radiated a simple joy that I found very inspiring.
Each morning when I got on the bus I would look back at Jeremy — I felt a little protective of him. One day toward the end of the summer, I looked back as I boarded the bus and was immediately struck by a change in him.
He looked tired, weary, and the light in his eyes had gone out — like something important inside of him had broken.
I gave one of the counselors, a pretty blonde teenager, a look and motioned with my head toward the back of the bus. We walked back together and sat down across the aisle from each other, one row in front of Jeremy.
“What’s wrong, Jer’?” she asked.
He paused a moment, then pulled up the hem of the right leg of his short pants. On the front of his thigh was an angry purple bruise.
“What happened, Jeremy? Who did that to you?”
He looked up at us, his eyes filled with bewilderment and hurt, and said, “My daddy.”
When I finished telling this story to Ruth in the Buttercup Café, her eyes looked as if they were straining to hold back a river of tears.
“That’s … really sad,” she finally said.
“Yes, Ruth, it is.”
I moved to another town a short while later and lost touch with Ruth, but I hope she is married to a nice, sober guy — and I hope they give their kids time outs when they misbehave.
Thursday, June 13, 2013
Genius in Spray Paint
Most
eloquent graffiti I ever saw, on a wall across the street from the
military induction center in downtown Oakland in 1983: "Fuck yr attitude
of feigned superiority"
Monday, June 03, 2013
To Be Working and Poor in America
Darksyde at Daily Kos has a poignant post up about what it is to be the working poor in America. I have some personal experience with this, and can confirm that it sucks. I can also confirm that it is all too common in that situation to hear some variation of, "Why don't you just _________?" from people who have very little idea what it means to be barely scraping by in our economic system.
Thursday, May 30, 2013
It's a Spiritual Thing, Too
While much has been written (by the left, at least) of the economic consequences of wealth inequality in the United States, less often mentioned is the spiritual damage wrought by greed on both the Rich and the Rest.
If prodigal Wall Street could have walked with truly open eyes among their victims in those cities of cloth and nylon erected by the foreclosed-upon that sprang up outside many cities in the wake of the mortgage crisis, their hearts would have been broken. Not by the deprivation and primitive material circumstances, but by the realization that in a very real way, the people there had infinitely more riches than the Wall Streeters did.
The residents of those tent cities realized and enjoyed the fundamental mutuality that is the very essence of being children of God. They knew that they are truly brothers and sisters, and shared what they have with one another not by writing a check, but by making room at their camp stove for a stranger who had it worse than them.
It is worth mentioning that I have known people in my personal life who “came from money.” Some have been generous and warmhearted to a fault. But a story I keep hearing is of entire families where whole generations of children sit and wait for someone to die so they can come into their money. I hear of such circumstances and feel both revulsion and pity at the spiritual desolation this represents, and also a metaphysical dread for a society that considers this as unremarkable as the (related?) fact that millions of its children live in poverty.
I believe the spiritual desolation that is all too common in our rich, and the material deprivation of our poor, are inseparably related. They are both symptoms of greed — and not just at a personal level. They are deeply ingrained in the fabric of our society.
Lest anyone think I’m pointing fingers from some summit of wisdom and holiness, I’ll hasten to add that the greed and desolation I describe lives very much in me, too.
On many Wednesday evenings, I have fed the homeless of Berkeley at a Lutheran Church near the Cal campus. I started doing this a couple years ago when a friend of mine, who was then just back into Alcoholic Anonymous meetings and sobriety after many years out, recommended the experience.
Doing this has changed me. At first, it took some getting used to, in particular the smells of people who sleep rough in the streets, who have no dental care, no medical care, their faces and bodies begrimed by the doorways that are their pillows every night, and from some the odor of whatever chemical they use to ease the pain of being forgotten.
There are as many stories in the meal hall as there are diners.
One guy bought a house and, because he was naive, was cheated of thousands of dollars. In the end he had no house and had lost his job and was on the streets.
That’s the thing about dealing one on one with homeless people: You hear their stories, and they become just people.
They stop being a category — a mental abstraction, a “them” — and become richly complex individuals with stories as filled with vice and divine grace as my own.
When I started going to the meal hall in Berkeley, I thought I was bringing Christ’s compassion to the people there — but I realized as time went on that they were really bringing Christ to me. In those weary faces at the tables, I saw Christ staring back at me, asking me where I’d been all this time.
He had been out there, in doorways, shivering in cold rain and stumbling in rags, waiting for me to show up.
I feed Him in His homeless, and in return, in an act of astounding and tender mercy, He has shown me the depths of my own brokenness.
Most of all He has shown me that we need to somehow tear down the walls that separate us from one another.
If prodigal Wall Street could have walked with truly open eyes among their victims in those cities of cloth and nylon erected by the foreclosed-upon that sprang up outside many cities in the wake of the mortgage crisis, their hearts would have been broken. Not by the deprivation and primitive material circumstances, but by the realization that in a very real way, the people there had infinitely more riches than the Wall Streeters did.
The residents of those tent cities realized and enjoyed the fundamental mutuality that is the very essence of being children of God. They knew that they are truly brothers and sisters, and shared what they have with one another not by writing a check, but by making room at their camp stove for a stranger who had it worse than them.
It is worth mentioning that I have known people in my personal life who “came from money.” Some have been generous and warmhearted to a fault. But a story I keep hearing is of entire families where whole generations of children sit and wait for someone to die so they can come into their money. I hear of such circumstances and feel both revulsion and pity at the spiritual desolation this represents, and also a metaphysical dread for a society that considers this as unremarkable as the (related?) fact that millions of its children live in poverty.
I believe the spiritual desolation that is all too common in our rich, and the material deprivation of our poor, are inseparably related. They are both symptoms of greed — and not just at a personal level. They are deeply ingrained in the fabric of our society.
Lest anyone think I’m pointing fingers from some summit of wisdom and holiness, I’ll hasten to add that the greed and desolation I describe lives very much in me, too.
On many Wednesday evenings, I have fed the homeless of Berkeley at a Lutheran Church near the Cal campus. I started doing this a couple years ago when a friend of mine, who was then just back into Alcoholic Anonymous meetings and sobriety after many years out, recommended the experience.
Doing this has changed me. At first, it took some getting used to, in particular the smells of people who sleep rough in the streets, who have no dental care, no medical care, their faces and bodies begrimed by the doorways that are their pillows every night, and from some the odor of whatever chemical they use to ease the pain of being forgotten.
There are as many stories in the meal hall as there are diners.
One guy bought a house and, because he was naive, was cheated of thousands of dollars. In the end he had no house and had lost his job and was on the streets.
That’s the thing about dealing one on one with homeless people: You hear their stories, and they become just people.
They stop being a category — a mental abstraction, a “them” — and become richly complex individuals with stories as filled with vice and divine grace as my own.
When I started going to the meal hall in Berkeley, I thought I was bringing Christ’s compassion to the people there — but I realized as time went on that they were really bringing Christ to me. In those weary faces at the tables, I saw Christ staring back at me, asking me where I’d been all this time.
He had been out there, in doorways, shivering in cold rain and stumbling in rags, waiting for me to show up.
I feed Him in His homeless, and in return, in an act of astounding and tender mercy, He has shown me the depths of my own brokenness.
Most of all He has shown me that we need to somehow tear down the walls that separate us from one another.
Wednesday, May 29, 2013
It is time for America to have an Industrial Policy
THERE IS A CONCEIT AMONG THE MANAGEMENT CLASS — particularly members
of that class who style themselves as left-of-center — that if we just
send millions of former workers from our devastated manufacturing sector
to college so they can become website designers or something, that will
make up for destroying the industries that formerly provided them a
decent living. One of former President Clinton’s more annoying habits
has been to harp on this particular hypothesis.
Not to put too fine a point on it, but that plan isn’t going to work — at least not in a place of the scale, history and complexity of the United States. Heck, I’ll go ahead and put a fine point on it: It’s a bunch of nonsense.
I mean, look: The Swiss are few enough that they can be the world’s bankers, and the Saudis can be the world’s oil company. But the United States, if it’s going to be a prosperous place, needs to be where the main engine of prosperity is taking raw materials, making something valuable out of them and then selling those valuable things at a profit.
We can’t be a first-tier economy by selling each other life insurance and software; we need to make things — physical, need-machine-tools-to-make-them things like cars, boats, clothing, machine tools and electronics. The Democratic Party’s leadership used to know this, and acted accordingly, with all kinds of support for (real, actual) industry and its (real, actual) workers. These days, however, Democrats seem to represent members of the management class who want to send line workers and former machinists to college so they can become computer programmers. It’s ridiculous.
There are millions of ex-manufacturing workers who used to make a good living by making things here in the U.S. The “Old Economy” offered them a way to use their skills and gifts and afford the basics of life, plus a little fun. But the “New Economy” has no real place for them. Those with less than a college degree have precious few ways to support a family in anything approaching comfort. And even these avenues are vanishing.
Here’s the thing: There are millions of folks who are, to be blunt, not smart enough, or at least temperamentally unsuited — or, increasingly, too poor — to go to college. Are they to be consigned to working at 7/11 and making $9 an hour for the rest of their lives? Don’t we as citizens have an obligation to see that they have something better to aspire to — work that allows them to support their families in a dignified way, and maybe even to put something away for college for the kids and themselves in their golden years?
These questions have not been asked of Americans in any public and consistent way for years — decades, even. The very phrase, “we, as citizens, are obligated to …” is, in the libertarian, Hobbesian world of economic mercilessness we’ve allowed to flourish a nonsensical phrase full of meaningless words. We are no longer “citizens,” active participants in the building of our civilization; we are now “consumers,” defined by our economic worth — mere cogs in the soul-impoverishing machinery of “wealth creation” and economic oligarchy. Our part is to passively keep the whole corrupt machine humming. Nothing is demanded of us but to CONSUME.
If we want a different future, we must address the needs of our workers to find meaningful and rewarding work. For that we need an official industrial policy. The U.S. is the only so-called First World nation without one, and it shows.
Did you ever wonder why Germany seems to be the go-to place for high-quality goods of every sort — cars, clocks, precision instruments, electronics, cameras and other optical equipment, and so on? A big reason is that the German government has decided that it wants an economy that produces those things, and has taken specific actions to achieve that goal.
Germany’s method of creating wealth is not hard to understand, and in principle would be simple to duplicate here in the United States:
1. They make it a national priority to produce a highly educated work force. And “education” doesn’t necessarily mean college — while the German higher education system is excellent, they also place a far greater emphasis on vocational training than the United States does. Most of the people who actually build BMW cars in Germany’s factories do not need a college education to do so, but they do need familiarity with precision, computerized machinery, plus deep and detailed training in various materials-handling skills, and so on.
2. Germany then takes that highly educated work force and puts to work designing and manufacturing sophisticated, precision products for high wages.
3. It then exports those products at high prices and then re-invests the rewards back into their education system.
Germany is the second biggest exporter in the world despite having slightly less than a third of America’s population and about 7 percent of the largest exporter, China. The Germans realize they cannot beat either China or India based on cost. America can’t either: We could destroy all the remaining unions, get rid of the minimum wage and eliminate all social benefits and taxation and we would still lose jobs to low-wage nations. Germany avoided going down America’s road toward middle class ruin by investing public resources in training their workforce and in research.
Such an approach is possible in the United States, but to get there, we as citizens must realize — more than that, we must decide, and then act on the decision — that, to coin a phrase, the economy is made by and for us, and not us for the economy.
Not to put too fine a point on it, but that plan isn’t going to work — at least not in a place of the scale, history and complexity of the United States. Heck, I’ll go ahead and put a fine point on it: It’s a bunch of nonsense.
I mean, look: The Swiss are few enough that they can be the world’s bankers, and the Saudis can be the world’s oil company. But the United States, if it’s going to be a prosperous place, needs to be where the main engine of prosperity is taking raw materials, making something valuable out of them and then selling those valuable things at a profit.
We can’t be a first-tier economy by selling each other life insurance and software; we need to make things — physical, need-machine-tools-to-make-them things like cars, boats, clothing, machine tools and electronics. The Democratic Party’s leadership used to know this, and acted accordingly, with all kinds of support for (real, actual) industry and its (real, actual) workers. These days, however, Democrats seem to represent members of the management class who want to send line workers and former machinists to college so they can become computer programmers. It’s ridiculous.
There are millions of ex-manufacturing workers who used to make a good living by making things here in the U.S. The “Old Economy” offered them a way to use their skills and gifts and afford the basics of life, plus a little fun. But the “New Economy” has no real place for them. Those with less than a college degree have precious few ways to support a family in anything approaching comfort. And even these avenues are vanishing.
Here’s the thing: There are millions of folks who are, to be blunt, not smart enough, or at least temperamentally unsuited — or, increasingly, too poor — to go to college. Are they to be consigned to working at 7/11 and making $9 an hour for the rest of their lives? Don’t we as citizens have an obligation to see that they have something better to aspire to — work that allows them to support their families in a dignified way, and maybe even to put something away for college for the kids and themselves in their golden years?
These questions have not been asked of Americans in any public and consistent way for years — decades, even. The very phrase, “we, as citizens, are obligated to …” is, in the libertarian, Hobbesian world of economic mercilessness we’ve allowed to flourish a nonsensical phrase full of meaningless words. We are no longer “citizens,” active participants in the building of our civilization; we are now “consumers,” defined by our economic worth — mere cogs in the soul-impoverishing machinery of “wealth creation” and economic oligarchy. Our part is to passively keep the whole corrupt machine humming. Nothing is demanded of us but to CONSUME.
If we want a different future, we must address the needs of our workers to find meaningful and rewarding work. For that we need an official industrial policy. The U.S. is the only so-called First World nation without one, and it shows.
Did you ever wonder why Germany seems to be the go-to place for high-quality goods of every sort — cars, clocks, precision instruments, electronics, cameras and other optical equipment, and so on? A big reason is that the German government has decided that it wants an economy that produces those things, and has taken specific actions to achieve that goal.
Germany’s method of creating wealth is not hard to understand, and in principle would be simple to duplicate here in the United States:
1. They make it a national priority to produce a highly educated work force. And “education” doesn’t necessarily mean college — while the German higher education system is excellent, they also place a far greater emphasis on vocational training than the United States does. Most of the people who actually build BMW cars in Germany’s factories do not need a college education to do so, but they do need familiarity with precision, computerized machinery, plus deep and detailed training in various materials-handling skills, and so on.
2. Germany then takes that highly educated work force and puts to work designing and manufacturing sophisticated, precision products for high wages.
3. It then exports those products at high prices and then re-invests the rewards back into their education system.
Germany is the second biggest exporter in the world despite having slightly less than a third of America’s population and about 7 percent of the largest exporter, China. The Germans realize they cannot beat either China or India based on cost. America can’t either: We could destroy all the remaining unions, get rid of the minimum wage and eliminate all social benefits and taxation and we would still lose jobs to low-wage nations. Germany avoided going down America’s road toward middle class ruin by investing public resources in training their workforce and in research.
Such an approach is possible in the United States, but to get there, we as citizens must realize — more than that, we must decide, and then act on the decision — that, to coin a phrase, the economy is made by and for us, and not us for the economy.
Tuesday, May 28, 2013
Someone Needs to Help the 80%
ONE IMPORTANT CONTRIBUTING FACTOR of the current American economic
predicament is that median purchasing power — that is, the
inflation-adjusted pay that the bottom 80 percent of workers get — has
not appreciably increased in over 30 years. People not making enough
money to keep the economy growing means the economy can’t grow.
Actually, that’s not quite true. The economy can still grow, but since wages aren’t increasing — except for a few people at the top, who, precisely because there aren’t very many of them, can’t make up for the shortfall in consumer spending — the only recourse for consumers is buying things on credit, i.e., growth financed through debt.
This is exactly what we’ve seen in the years since the median wage stopped growing: steadily increasing household debt.
The thing is, financing economic growth by increasing personal indebtedness is not a sustainable path. Eventually the credit cards are maxed out, and then everyone needs to pay down their debt before they can begin spending again.
While this is happening, the economy shrinks, since people are not spending on anything except essentials. The result is layoffs, which means some people can no longer keep up their debt payments — which results in bankruptcies, which result in the banks that are owed that money raising interest rates to cover the increased risk, which results in more bankruptcies, which means more trouble for banks, and so on in a downward spiral.
Eventually, confidence in the entire system begins to erode, which leads to a general panic and the entire financial system grinding to a halt. See October 1929 and September 2008 for an idea of what that looks and feels like.
History tells us these kinds of situations can either be reformed (see Teddy Roosevelt and the trust-busters, FDR and the New Deal, and so on), or, if the oligarchs have so tight a grip on the levers of power — including the means of mass communication — that they can prevent reform, then eventually the people will rise up.
If it gets bad enough, you have the situation famously described by John Steinbeck:
Going forward, one new aim of national economic policy should be to get the real median wage growing on a consistent basis, and to restrain the tendency of capitalism to concentrate wealth at the top of the income scale.
How? Here are some proven, sensible liberal ideas.
1. Give workers a bigger voice in how profits are distributed. A great way to do that is by encouraging union membership. Let me put this bluntly: The government ought to do everything it can to encourage unionization across all economic sectors. A good start would be repealing the Taft-Hartley act, and passing the Employee Free Choice Act.
2. Use the tax system to discourage out-sized payouts for corporate executives and banksters. Restore the tax brackets (adjusted for inflation) to what they were in 1955. Top marginal tax rate: 91.5 percent. This will discourage the obscene paychecks the One Percenters currently award themselves, and might even encourage them (through deductions) to do economically beneficial things with the money.
3. Re-regulate the financial sector. Restore and strengthen the Glass-Steagall Act. Break up the big banks to the point that the insolvency of one won’t threaten the economy. (While I’m at it: impose a retroactive tax of 100 percent on all non-salary compensation of every executive of every financial institution that received federal bailout money. It might not prevail in the ensuing litigation, but it would be amusing to watch them squirm.)
4. Raise the minimum wage to a living wage, and tie future increases to the rate of productivity growth. This will put subtle upward pressure from below on the wages of other workers.
All this would, of course, cause keening howls of outrage on Wall Street and in the executive suites of America’s corporate headquarters, and confusion and alarm among the Wall Street worshipers on CNBC. But the thing is, economic growth that is widely shared will make everyone — corporate elites included — richer in the long run.
Actually, that’s not quite true. The economy can still grow, but since wages aren’t increasing — except for a few people at the top, who, precisely because there aren’t very many of them, can’t make up for the shortfall in consumer spending — the only recourse for consumers is buying things on credit, i.e., growth financed through debt.
This is exactly what we’ve seen in the years since the median wage stopped growing: steadily increasing household debt.
The thing is, financing economic growth by increasing personal indebtedness is not a sustainable path. Eventually the credit cards are maxed out, and then everyone needs to pay down their debt before they can begin spending again.
While this is happening, the economy shrinks, since people are not spending on anything except essentials. The result is layoffs, which means some people can no longer keep up their debt payments — which results in bankruptcies, which result in the banks that are owed that money raising interest rates to cover the increased risk, which results in more bankruptcies, which means more trouble for banks, and so on in a downward spiral.
Eventually, confidence in the entire system begins to erode, which leads to a general panic and the entire financial system grinding to a halt. See October 1929 and September 2008 for an idea of what that looks and feels like.
History tells us these kinds of situations can either be reformed (see Teddy Roosevelt and the trust-busters, FDR and the New Deal, and so on), or, if the oligarchs have so tight a grip on the levers of power — including the means of mass communication — that they can prevent reform, then eventually the people will rise up.
If it gets bad enough, you have the situation famously described by John Steinbeck:
There is a crime here that goes beyond denunciation. There is a sorrow here that weeping cannot symbolize. There is a failure here that topples all our success. The fertile earth, the straight tree rows, the sturdy trunks, and the ripe fruit. And children dying of pellagra must die because a profit cannot be taken from an orange. And coroners must fill in the certificates — died of malnutrition — because the food must rot, must be forced to rot. The people come with nets to fish for potatoes in the river, and the guards hold them back; they come in rattling cars to get the dumped oranges, but the kerosene is sprayed. And they stand still and watch the potatoes float by, listen to the screaming pigs being killed in a ditch and covered with quicklime, watch the mountains of oranges slop down to a putrefying ooze; and in the eyes of the people there is the failure; and in the eyes of the hungry there is a growing wrath. In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage.Growth through debt leads eventually to systemic crisis. The merest, cursory reading of economic history demonstrates this. History also provides ample evidence that economic growth from rising incomes leads to sustainable and widely shared prosperity.
Going forward, one new aim of national economic policy should be to get the real median wage growing on a consistent basis, and to restrain the tendency of capitalism to concentrate wealth at the top of the income scale.
How? Here are some proven, sensible liberal ideas.
1. Give workers a bigger voice in how profits are distributed. A great way to do that is by encouraging union membership. Let me put this bluntly: The government ought to do everything it can to encourage unionization across all economic sectors. A good start would be repealing the Taft-Hartley act, and passing the Employee Free Choice Act.
2. Use the tax system to discourage out-sized payouts for corporate executives and banksters. Restore the tax brackets (adjusted for inflation) to what they were in 1955. Top marginal tax rate: 91.5 percent. This will discourage the obscene paychecks the One Percenters currently award themselves, and might even encourage them (through deductions) to do economically beneficial things with the money.
3. Re-regulate the financial sector. Restore and strengthen the Glass-Steagall Act. Break up the big banks to the point that the insolvency of one won’t threaten the economy. (While I’m at it: impose a retroactive tax of 100 percent on all non-salary compensation of every executive of every financial institution that received federal bailout money. It might not prevail in the ensuing litigation, but it would be amusing to watch them squirm.)
4. Raise the minimum wage to a living wage, and tie future increases to the rate of productivity growth. This will put subtle upward pressure from below on the wages of other workers.
All this would, of course, cause keening howls of outrage on Wall Street and in the executive suites of America’s corporate headquarters, and confusion and alarm among the Wall Street worshipers on CNBC. But the thing is, economic growth that is widely shared will make everyone — corporate elites included — richer in the long run.
Monday, May 27, 2013
Locust Capitalism
SINCE THE ELECTION OF RONALD REAGAN IN 1980, Democrats passed NAFTA,
neglected the Employee Free Choice Act and all but abandoned progressive
taxation of incomes. They have, more or less, abandoned the idea that
an important function of government is to balance society by keeping the
gap between rich and poor from becoming too great.
They have forgotten that the income tax system, support for labor and wealth redistribution have proven to be the most effective ways to accomplish these objectives. These sins of omission and commission, in tandem with the destruction inflicted by Republican Party economic policies, have devastated the working class.
During his administration, President Clinton made some pious noise about sending all those former assembly line workers from our devastated manufacturing sector to college so they could be “knowledge workers,” or something to that effect, which sounds nice but is actually kind of ridiculous. But for the most part the Democratic Party has stood by for the last 30-plus years and barely raised their voices to help the middle and working classes.
Someone once asked Sherrod Brown, the Ohio senator, why people in economically ravaged southeastern Ohio had begun voting for Republicans. His answer: “Because the Democrats stopped talking to them.” I think the problem is more that the Democratic Party, when it bothers to cast a glance their way at all, offers words (often tinged with condescension) but precious little else. And the Republican Party uses the resentment of the people abandoned by Democrats to push an agenda whose real purpose is to increase the power and wealth of the people who’ve been doing most of the prospering in the last 30 years.
The policy focus of the center-left in this country — its animating passion in those times when it has been most ascendant — has been economic in character. Every day on my television, I see ginned-up, phony controversies as economic royalists on the Republican “right” and social libertarians on the Democratic “left” pretend to care about the legal status of fetuses and gay people, and gee, sorry, there never seems to be any time left after discussing those issues to talk about how the economic lives of ordinary working people are getting steadily worse, under both Democrats and Republicans.
Almost 25 percent of American children are on food stamps. The combined number of un- and underemployment, even after four years of “recovery,” is still almost 16 percent. Half of all Americans struggle to feed themselves. People whose collars are blue and whose hands are callused are staring every day into a continuing economic abyss that is killing their friends and making their neighbors homeless.
But the thing is, even people who have jobs are staring into that abyss. People’s jobs (including, these days, those of so-called white-collar workers) are being offshored by companies whose only agenda is making sure stockholders are happy with the next quarterly report. From a long-term perspective, this is an almost comically stupid thing to do at the macro level. If every company did this, eventually no one in the U.S. could afford to buy their products except a few thousand people in upper management or those lucky few who have inherited wealth.
In short, the elitism of global capital destroys the golden goose — it deprives the economy of customers. But then, given the ruthless character of the world’s globalized capitalists, from their perspective this may not be a problem: After all, there’s a billion Chinese to make a buck off of. (Until they, too, are used up in a few decades, and then these global magnates can decamp for the next populations to exploit and bleed dry … )
I’ve got a new name for this trend: Locust Capitalism.
The only way to halt the debasement of this country’s (and the world’s) non-rich by the rich is to intervene; to stop it. History suggests that the only entity big enough to do that is the United States government — but our government will only do it if we citizens insist in unmistakable terms that it do so. And it will only do so if there is a governing majority of people who agree that a core function of government is defending the interests of working people.
The most important question to ask of any political party is not what it stands for, it is WHO it stands WITH.
The people who have prospered under the rightist economic regime of the last 30 years have been the top 20 percent of earners. These people are who the Republicans stand with.
Everyone else has either stood still or actually gotten worse off — and inexcusably, the Democratic Party has let it happen, largely by forgetting who they’re supposed to stand with: the other 80 percent of earners.
What does all this mean? Where do we go from here? The way forward is not easy, but it is simple in concept: The Democratic Party needs to commit itself to undoing the damage done by 30 years of laissez-faire neglect.
The Democrats need a clear and public “to-do” list of specific, concrete ways to help that neglected 80 percent (more on that in a future column), and their only task should be selling and implementing that agenda. Undoing the damage done to Americans by capitalism run amok will be the foundation of a powerful governing majority.
Of course, if the Democratic Party is at all successful in this effort, it will result in unending howls of protest from the usual suspects on the right — and if it gets bad enough, maybe even ridiculous, badly written polemical novels featuring wooden prose and characters named John Galt.
History suggests that failing to get it done, on the other hand, will result eventually in social unrest, and if it gets bad enough, armed revolution — and don’t ever think the United States is exempted by history from such events.
They have forgotten that the income tax system, support for labor and wealth redistribution have proven to be the most effective ways to accomplish these objectives. These sins of omission and commission, in tandem with the destruction inflicted by Republican Party economic policies, have devastated the working class.
During his administration, President Clinton made some pious noise about sending all those former assembly line workers from our devastated manufacturing sector to college so they could be “knowledge workers,” or something to that effect, which sounds nice but is actually kind of ridiculous. But for the most part the Democratic Party has stood by for the last 30-plus years and barely raised their voices to help the middle and working classes.
Someone once asked Sherrod Brown, the Ohio senator, why people in economically ravaged southeastern Ohio had begun voting for Republicans. His answer: “Because the Democrats stopped talking to them.” I think the problem is more that the Democratic Party, when it bothers to cast a glance their way at all, offers words (often tinged with condescension) but precious little else. And the Republican Party uses the resentment of the people abandoned by Democrats to push an agenda whose real purpose is to increase the power and wealth of the people who’ve been doing most of the prospering in the last 30 years.
The policy focus of the center-left in this country — its animating passion in those times when it has been most ascendant — has been economic in character. Every day on my television, I see ginned-up, phony controversies as economic royalists on the Republican “right” and social libertarians on the Democratic “left” pretend to care about the legal status of fetuses and gay people, and gee, sorry, there never seems to be any time left after discussing those issues to talk about how the economic lives of ordinary working people are getting steadily worse, under both Democrats and Republicans.
Almost 25 percent of American children are on food stamps. The combined number of un- and underemployment, even after four years of “recovery,” is still almost 16 percent. Half of all Americans struggle to feed themselves. People whose collars are blue and whose hands are callused are staring every day into a continuing economic abyss that is killing their friends and making their neighbors homeless.
But the thing is, even people who have jobs are staring into that abyss. People’s jobs (including, these days, those of so-called white-collar workers) are being offshored by companies whose only agenda is making sure stockholders are happy with the next quarterly report. From a long-term perspective, this is an almost comically stupid thing to do at the macro level. If every company did this, eventually no one in the U.S. could afford to buy their products except a few thousand people in upper management or those lucky few who have inherited wealth.
In short, the elitism of global capital destroys the golden goose — it deprives the economy of customers. But then, given the ruthless character of the world’s globalized capitalists, from their perspective this may not be a problem: After all, there’s a billion Chinese to make a buck off of. (Until they, too, are used up in a few decades, and then these global magnates can decamp for the next populations to exploit and bleed dry … )
I’ve got a new name for this trend: Locust Capitalism.
The only way to halt the debasement of this country’s (and the world’s) non-rich by the rich is to intervene; to stop it. History suggests that the only entity big enough to do that is the United States government — but our government will only do it if we citizens insist in unmistakable terms that it do so. And it will only do so if there is a governing majority of people who agree that a core function of government is defending the interests of working people.
The most important question to ask of any political party is not what it stands for, it is WHO it stands WITH.
The people who have prospered under the rightist economic regime of the last 30 years have been the top 20 percent of earners. These people are who the Republicans stand with.
Everyone else has either stood still or actually gotten worse off — and inexcusably, the Democratic Party has let it happen, largely by forgetting who they’re supposed to stand with: the other 80 percent of earners.
What does all this mean? Where do we go from here? The way forward is not easy, but it is simple in concept: The Democratic Party needs to commit itself to undoing the damage done by 30 years of laissez-faire neglect.
The Democrats need a clear and public “to-do” list of specific, concrete ways to help that neglected 80 percent (more on that in a future column), and their only task should be selling and implementing that agenda. Undoing the damage done to Americans by capitalism run amok will be the foundation of a powerful governing majority.
Of course, if the Democratic Party is at all successful in this effort, it will result in unending howls of protest from the usual suspects on the right — and if it gets bad enough, maybe even ridiculous, badly written polemical novels featuring wooden prose and characters named John Galt.
History suggests that failing to get it done, on the other hand, will result eventually in social unrest, and if it gets bad enough, armed revolution — and don’t ever think the United States is exempted by history from such events.
Sunday, May 26, 2013
Creeping Abstraction, Part II
IN PART ONE,
I TALKED ABOUT what I called the Creeping Abstraction of Accountability
— the tendency since the Industrial Revolution for accountability in
our economic relations to become ever more abstracted from anything
resembling personal responsibility. I used as my examples an imaginary
(but also reasonably typical) village named “Sylvan” in the year 1800,
versus Benicia (and pretty much everywhere else in America) in the
present day.
In Sylvan, it would be an absurdity to write to a company 2,000 miles away if you had a problem with a chair, since the person who made it would probably be personally known to you, and you would likely be no more than a few minutes’ walk from the location of its manufacture. If you wanted, you could easily arrange to watch it being made, along with practically everything else you owned — milk, butter, the shoes for your horse, the shoes you wore, and so on.
It is probably still possible to live your life that way — eating only agricultural products from local farmers, using only locally made furniture, clothing and shoes, and so forth — but it is nowhere near the typical experience. The very structure of our civilization would have been nearly unimaginable to the residents of Sylvan, and probably somewhat terrifying if they did imagine it.
The desk and the keyboard on which I’m typing this was made in China by people I’ll never meet, as was the cup holding the cocoa I’m sipping. The car I drive was made somewhere in the U.S.; my shirt in Indonesia; my jeans in the U.S. (again, I have no idea where, exactly). There is virtually no possibility of my ever meeting the people who made most of the stuff I use every day.
To be sure, there are many advantages to living in the present industrial world. I like being able to take BART to work. Altogether, getting to work and getting around in general is much easier than it used to be — in 1800, America’s larger cities reeked of horse dung, and the bloated, putrefying remains of work-to-death draft animals used to be a common sight in the streets of places like New York and Philadelphia.
Smokestacks constantly belched black smoke. I really, really would not want to give up modern dentistry. I like being able to eat a more-or-less fresh orange in New York City in, say, February.
But the price of the material abundance made possible by the Industrial Revolution is that we are deeply, structurally alienated from one another in our economic relations.
When I read some of the arguments put forth by my opponents on the political right, it seems that the remedies they propose are more suited for the problems of the world inhabited by my Sylvanians in 1800 than to the challenges of the scale and complexity of American civilization in 2013. A large, powerful national government in 1800 would have been an intrusive absurdity – there was no need for it. To the extent that economic regulation was needed, it could easily be handled at the local level, since that was the scale of virtually any problems that arose.
New Deal-type liberals like myself think there is a critical role to be played by a large, powerful central government in the present United States — not because we think governments ought, always and everywhere, to be big, but because Big Government is the only potential counter-balance to the power of Big Business. And big business, in the present world, has enormous power and influence. ExxonMobil made more in after-tax profits last year than many U.S. state governments took in in total revenue.
Now, some might be surprised to hear me say this, but I don’t think there is anything innately wrong with business in general, nor even with big business, per se. My father retired from Chevron after 33 years, and worked with many fine people, including people who became old family friends. I worked for a major imaging company for several years and have fond memories of my co-workers and supervisors from my time there.
The benefits of industrialization — primarily a great variety and abundance of stuff — are great, too. But the costs need to be addressed.
For all the complaints about how environmental regulations cost U.S. companies efficiency, I appreciate the fact that as a result of their existence I can be reasonably certain that I will not be poisoned by toxic waste as I go about my day. I also like the fact that my food has been inspected, and that the facilities in which it is produced are subject to all kinds of regulations regarding sanitation and the humane treatment of animals.
I like the fact that gold mining companies can no longer blithely contaminate rivers, the Bay and Pacific Ocean with mercury like they used to. I like the fact that our coal mines kill fewer workers in a year than were killed in them each month before safety regulations were imposed. I like the fact that, thanks to child labor laws, 9-year-olds no longer have their arms torn off working in mills. I like the fact that unions can no longer be crushed by company-hired thugs for the simple act of banding together and asking for fair treatment and wages.
The world of Sylvan was in many ways better than the world in which we live out our lives today — but that pastoral, courtly world is well and truly gone. New citizens, and new circumstances, require new laws.
In Sylvan, it would be an absurdity to write to a company 2,000 miles away if you had a problem with a chair, since the person who made it would probably be personally known to you, and you would likely be no more than a few minutes’ walk from the location of its manufacture. If you wanted, you could easily arrange to watch it being made, along with practically everything else you owned — milk, butter, the shoes for your horse, the shoes you wore, and so on.
It is probably still possible to live your life that way — eating only agricultural products from local farmers, using only locally made furniture, clothing and shoes, and so forth — but it is nowhere near the typical experience. The very structure of our civilization would have been nearly unimaginable to the residents of Sylvan, and probably somewhat terrifying if they did imagine it.
The desk and the keyboard on which I’m typing this was made in China by people I’ll never meet, as was the cup holding the cocoa I’m sipping. The car I drive was made somewhere in the U.S.; my shirt in Indonesia; my jeans in the U.S. (again, I have no idea where, exactly). There is virtually no possibility of my ever meeting the people who made most of the stuff I use every day.
To be sure, there are many advantages to living in the present industrial world. I like being able to take BART to work. Altogether, getting to work and getting around in general is much easier than it used to be — in 1800, America’s larger cities reeked of horse dung, and the bloated, putrefying remains of work-to-death draft animals used to be a common sight in the streets of places like New York and Philadelphia.
Smokestacks constantly belched black smoke. I really, really would not want to give up modern dentistry. I like being able to eat a more-or-less fresh orange in New York City in, say, February.
But the price of the material abundance made possible by the Industrial Revolution is that we are deeply, structurally alienated from one another in our economic relations.
When I read some of the arguments put forth by my opponents on the political right, it seems that the remedies they propose are more suited for the problems of the world inhabited by my Sylvanians in 1800 than to the challenges of the scale and complexity of American civilization in 2013. A large, powerful national government in 1800 would have been an intrusive absurdity – there was no need for it. To the extent that economic regulation was needed, it could easily be handled at the local level, since that was the scale of virtually any problems that arose.
New Deal-type liberals like myself think there is a critical role to be played by a large, powerful central government in the present United States — not because we think governments ought, always and everywhere, to be big, but because Big Government is the only potential counter-balance to the power of Big Business. And big business, in the present world, has enormous power and influence. ExxonMobil made more in after-tax profits last year than many U.S. state governments took in in total revenue.
Now, some might be surprised to hear me say this, but I don’t think there is anything innately wrong with business in general, nor even with big business, per se. My father retired from Chevron after 33 years, and worked with many fine people, including people who became old family friends. I worked for a major imaging company for several years and have fond memories of my co-workers and supervisors from my time there.
The benefits of industrialization — primarily a great variety and abundance of stuff — are great, too. But the costs need to be addressed.
For all the complaints about how environmental regulations cost U.S. companies efficiency, I appreciate the fact that as a result of their existence I can be reasonably certain that I will not be poisoned by toxic waste as I go about my day. I also like the fact that my food has been inspected, and that the facilities in which it is produced are subject to all kinds of regulations regarding sanitation and the humane treatment of animals.
I like the fact that gold mining companies can no longer blithely contaminate rivers, the Bay and Pacific Ocean with mercury like they used to. I like the fact that our coal mines kill fewer workers in a year than were killed in them each month before safety regulations were imposed. I like the fact that, thanks to child labor laws, 9-year-olds no longer have their arms torn off working in mills. I like the fact that unions can no longer be crushed by company-hired thugs for the simple act of banding together and asking for fair treatment and wages.
The world of Sylvan was in many ways better than the world in which we live out our lives today — but that pastoral, courtly world is well and truly gone. New citizens, and new circumstances, require new laws.
Saturday, May 25, 2013
Creeping Abstraction, Part I
SEVERAL YEARS AGO, THERE WAS A well-publicized incident in which the
brother of then-presidential candidate John McCain called 9-1-1 in the
Washington, D.C. area to complain about some construction on a bridge
that was taking place during rush hour. The call was played during
reports on the incident in the news media.
McCain’s brother was (rightly) ridiculed at the time for doing something so clueless. The 9-1-1 system was set up to report emergencies, and using it to complain about a traffic problem was an abuse of the system, one that might have delayed help for someone in a life-threatening emergency.
In the aftermath of the incident, I had a recurring thought I couldn’t shake: Despite his poor judgment, I could understand what Joseph McCain was hoping to do. What he really wanted was to speak to The Guy Who Made the Decision. He wanted to hold someone accountable for making the idiotic decision to conduct traffic-clogging construction work on a busy bridge during rush hour.
This brings me to one consequence of industrial civilization — its mass production, specialization of skills and so on — that I call the Creeping Abstraction of Accountability.
Think about what life, and especially economic life, was like in a typical village in America in the time before mass industrialization. For fun, let’s name this hypothetical little town “Sylvan,” and we’ll say the year is 1800.
In Sylvan, accountability in economic relations was pervasive — inescapable, even. If you were a typical citizen of such a town, you knew who made your clothing, pots and pans, furniture, shoes, lamps, soap, window glass; you knew who built your carriage or wagon, and so on. And not just in an abstract way— you likely knew personally the makers of those things, and could thus hold them accountable if there was a problem. If the furniture-maker’s apprentice delivered a three-legged chair to your house, you could walk over to his shop with the chair, hold it up and ask (perhaps wryly), “Yea, Thomas? Wert thou just back from yon tavern when ye forgot this missing leg?” and expect poor, hungover Thomas to groan a sheepish apology, and promise to correct the situation without delay. Similarly, if your skillet handle broke, you could march off to the local tinker’s shop and demand an explanation, and you would expect to receive one on the spot.
In short, you actually could in fact speak to The Guy Who Made the Decision, and this state of affairs obtained from roughly before the American Civil War, all the way back to the dimly known beginnings of civilization when the first farmer planted the first crop.
Now, let’s return to the year 2013 in a typical American community.
I called my bank a couple months back because my checking account was inexplicably overdrawn. I use their bill payment service, and I had specified that the “pay date” of my rent payment should be the first of the month, yet they had deducted the payment on the 23rd of the previous month, overdrafting my account. When I called, a customer service representative said that the payment can come out that early so that the check has time to reach the payee. I apologized for misunderstanding, thanked her for the information, and hung up.
When I changed the pay date to the 7th of the next month to account for this new information, my landlord charged me a late fee because the rent check arrived on the 15th. I called the bank, and they said that it had been mailed on the 7th. When I said I was confused by this, given the information I received on my previous call, the rep explained that sometimes the money comes out on the pay date, and sometimes it comes out when the check arrives at the bank after being deposited by the payee, and they could not tell me in advance which of those two possibilities would happen each month. When I pointed out that this makes planning rather difficult, the rep told me that this was just how their (third-party) payment processor worked.
So even the bank I was speaking to could not tell me when the payment would be deducted. But worse than that, I wasn’t really speaking to “The Bank” at all — I was speaking to a rep wearing a headset in a call center in Arizona or Iowa or wherever, and she had virtually no power to change the way the bank did business (the first rep I spoke to did refund the overdraft fee, which was nice). The way the bank’s payment processor does payments was probably designed in a series of meetings involving a shifting bunch of personnel from their legal, marketing and accounting departments, and the policy’s ultimate purpose could undoubtedly be summarized as: “Make as much money as possible for the company, in a way that is unlikely to get us successfully sued.”
Thus, our current world is a mirror image of Sylvan: In our world, accountability in economic relations is abstracted, nearly to the point of meaninglessness. Who made the shirt you’re wearing? What were the wages and working conditions for the people who made it? What about the chair you’re sitting in? Or computer on which you may be reading this post? Or the cell phone in your pocket? If you have concerns about those things, to whom do you turn for accountability?
There is no immediate, human accountability for many problems that arise from the production of most of the stuff we use every day. This is the Creeping Abstraction of Accountability.
This has had profound implications not just for economics, but for how we discuss politics. More in part two.
McCain’s brother was (rightly) ridiculed at the time for doing something so clueless. The 9-1-1 system was set up to report emergencies, and using it to complain about a traffic problem was an abuse of the system, one that might have delayed help for someone in a life-threatening emergency.
In the aftermath of the incident, I had a recurring thought I couldn’t shake: Despite his poor judgment, I could understand what Joseph McCain was hoping to do. What he really wanted was to speak to The Guy Who Made the Decision. He wanted to hold someone accountable for making the idiotic decision to conduct traffic-clogging construction work on a busy bridge during rush hour.
This brings me to one consequence of industrial civilization — its mass production, specialization of skills and so on — that I call the Creeping Abstraction of Accountability.
Think about what life, and especially economic life, was like in a typical village in America in the time before mass industrialization. For fun, let’s name this hypothetical little town “Sylvan,” and we’ll say the year is 1800.
In Sylvan, accountability in economic relations was pervasive — inescapable, even. If you were a typical citizen of such a town, you knew who made your clothing, pots and pans, furniture, shoes, lamps, soap, window glass; you knew who built your carriage or wagon, and so on. And not just in an abstract way— you likely knew personally the makers of those things, and could thus hold them accountable if there was a problem. If the furniture-maker’s apprentice delivered a three-legged chair to your house, you could walk over to his shop with the chair, hold it up and ask (perhaps wryly), “Yea, Thomas? Wert thou just back from yon tavern when ye forgot this missing leg?” and expect poor, hungover Thomas to groan a sheepish apology, and promise to correct the situation without delay. Similarly, if your skillet handle broke, you could march off to the local tinker’s shop and demand an explanation, and you would expect to receive one on the spot.
In short, you actually could in fact speak to The Guy Who Made the Decision, and this state of affairs obtained from roughly before the American Civil War, all the way back to the dimly known beginnings of civilization when the first farmer planted the first crop.
Now, let’s return to the year 2013 in a typical American community.
I called my bank a couple months back because my checking account was inexplicably overdrawn. I use their bill payment service, and I had specified that the “pay date” of my rent payment should be the first of the month, yet they had deducted the payment on the 23rd of the previous month, overdrafting my account. When I called, a customer service representative said that the payment can come out that early so that the check has time to reach the payee. I apologized for misunderstanding, thanked her for the information, and hung up.
When I changed the pay date to the 7th of the next month to account for this new information, my landlord charged me a late fee because the rent check arrived on the 15th. I called the bank, and they said that it had been mailed on the 7th. When I said I was confused by this, given the information I received on my previous call, the rep explained that sometimes the money comes out on the pay date, and sometimes it comes out when the check arrives at the bank after being deposited by the payee, and they could not tell me in advance which of those two possibilities would happen each month. When I pointed out that this makes planning rather difficult, the rep told me that this was just how their (third-party) payment processor worked.
So even the bank I was speaking to could not tell me when the payment would be deducted. But worse than that, I wasn’t really speaking to “The Bank” at all — I was speaking to a rep wearing a headset in a call center in Arizona or Iowa or wherever, and she had virtually no power to change the way the bank did business (the first rep I spoke to did refund the overdraft fee, which was nice). The way the bank’s payment processor does payments was probably designed in a series of meetings involving a shifting bunch of personnel from their legal, marketing and accounting departments, and the policy’s ultimate purpose could undoubtedly be summarized as: “Make as much money as possible for the company, in a way that is unlikely to get us successfully sued.”
Thus, our current world is a mirror image of Sylvan: In our world, accountability in economic relations is abstracted, nearly to the point of meaninglessness. Who made the shirt you’re wearing? What were the wages and working conditions for the people who made it? What about the chair you’re sitting in? Or computer on which you may be reading this post? Or the cell phone in your pocket? If you have concerns about those things, to whom do you turn for accountability?
There is no immediate, human accountability for many problems that arise from the production of most of the stuff we use every day. This is the Creeping Abstraction of Accountability.
This has had profound implications not just for economics, but for how we discuss politics. More in part two.
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