Don't matter, she'll quit.

As the administration knows, Obamaniacs are not aware of or concerned with any of these issues, or others, such as the Wars or the former Bill of Rights. Whatever bill the health insurance industry decides to pass will surely be trumpeted by Obamaniacs as the new gospel, and economic woes can always be blamed on Bush. And as for the bribery and corruption, the media only promotes candidates that are well bribed and corrupt, so as usual their will be no alternative in that respect, but only alternatives in fashion.

Don't forget: Continuing to appoint former Goldman Sachs executives to cabinet even after that firm's become a household name and near-universally despised. Guaranteed to provide "limousine liberal" fodder to the right and the swing vote for another generation, or three.

WTF does a "stimulus bill" have to do with fixing the broken American economy?

Do you fix a haemorrhage by bloodletting?

What a moron.

Well, at least you are superior to "rethugs" who support Sarah Palin.

WTF does a "stimulus bill" have to do with fixing the broken American economy?

Do you fix a haemorrhage by bloodletting?

Juan, 1931 called. They'd like their talking points back.

Anyone who throws around childish, not to mention completely unwitty, insults like "rethugs," should be ignorned.

A stimulus bill could definitely increase employment, but a national effort is needed. Giving money away under the books to your corporate cronies and cherished pals isn't going to solve anything. In this political climate a stimulus bill is ineffective because Wall Street owns Washington. If Roosevelt was in the WH, then yeah. The best way to recovery is nationalizing the Fed and getting rid of interest, debt-ridden money.

SAY NO TO BANK BAILOUTS, call Pelosi @1-202-225-0100. Bailouts will ONLY cause inflation and ruin even the richman's wealth.

"In this political climate a stimulus bill is ineffective because Wall Street owns Washington. If Roosevelt was in the WH, then yeah. The best way to recovery is nationalizing the Fed and getting rid of interest, debt-ridden money."

FDR came into office after campaigning on balancing the budget and support for the gold standard. He improved from there.

JFK came into office having campaigned that the GOP had allowed the USSR to get ahead of us in ballistic missiles. He improved from there.

Nationalizing the Fed is not presently politically possible. There will have to be a political movement that supports that before it can happen. Even then it will take one of the biggest, if not the biggest, political battles in the history of the country for it to succeed. Get cracking if that's your goal.

Wall Street does more or less own Washington, but the stimulus can succeed independent of that fact. Putting money into the economy is the point, and if Obama does it right, Wall Street can't entirely stop it from working. Plus, Wall Street might even profit from the stimulus, because prosperity can be profitable (although Goldman and JP Morgan chase are profiting from the economic problems now too).

On the other hand, economic success will probably increase Obama's power and independence, and especially in a second term, that could be dangerous to Wall Street. If they are worried about how far he'll go and what he'll do, they'll try to ruin him.

They have vast economic and political power, and I can imagine them having great success at making Obama's political challenges very daunting whether or not the stimulus, small as it was, starts to work.

Well, at least you are superior to "rethugs" who support Sarah Palin.

Well, yeah. Sarah Palin's a certified moron.

What I love about this country is that if the party of somewhat stable evil fuckers screws us over, we have the freedom to elect a member of the batshit crazy evil fuckers party.

Ah, democracy.

Well, I suppose that as long as there is no meaningful healthcare reform, the rich get richer and the poor get poorer, plus giant wads of campaign contributions are collected from the taxpayer via Goldman Sachs, it will matter very little whether Sarah Palin is elected in 2012 or not.

If America is moreover still locked in a state of perpetual warfare at that time, and US officials remain immunized from the law, with full freedom to conduct espionage operations against the population, then the Obama administration will truly have been successful beyond its wildest dreams.

Juan, 1931 called

Did the FIRE sector take in 40% of profits back then, or is that the sound of Juan's point sailing over your head?

Well, "Do you fix a haemorrhage by bloodletting?" sailed over my head too, but I've never been good with the medical analogies.

But hey, let's give it a try:
If "bloodletting" is the government spending lots of money, then "a haemorrage" is...the government spending even more money?

Sorry, still not workin' for me.

SteveB, that 40% figure was a hint. Focus on "fix the economy". What does this "economy" of the last few decades consist of? What do we produce, besides CDO's and SIV's and CDS's? How do you stimulate that back to life?

Throwing money at bridge repair won't "fix" the house of cards we call an economy. I believe Juan's point is that a stimulus isn't sufficient to cure our ills.

Throwing money at bridge repair won't "fix" the house of cards we call an economy.

I think the goal of the throwing-money-at-bridge-repair program was to, um, repair some bridges. Also provide some jobs to people who repair bridges. Also hope that some of the bridge-repairers might buy a new American-made SUV.

I don't think Obama's been stupid enough to make the claim that his stimulus bill would "fix the economy," (but I'd be happy to be proven wrong on this, of you've got a link.) The only claim he's made about the stimulus, I think, was that it would help to alleviate unemployment, and reduce the suffering of some of the people who have lost their jobs by extending unemployment benefits, for example.

What do we produce, besides CDO's and SIV's and CDS's?

See, I'm totally with you on that. I don't think it's possible for American capitialism, at this stage in its development, to produce 3% annual GDP growth, no matter how much money gets thrown at it. Sure, another bubble (the green energy bubble, perhaps?) might produce temporary growth, and then be followed shortly by another (and worse) crash - maybe the crash to end all crashes. I just don't see how that's an argument against the stimulus package. But maybe you can explain that to me?

What do we produce, besides CDO's and SIV's and CDS's? How do you stimulate that back to life?

The U.S. is responsible for about 20% of all the manufactured goods produced each year, far more than any other country. The closest behind us is Japan.

So it's not that the U.S. doesn't produce anything anymore. It's that the FIRE sector has gained power at the expense of everyone else, and despite our large quantities of manufactured goods, we import too much from other countries, particularly in industries which are high value-added and likely to be significant in the future.

... but we all know also that the number of people it takes to grow a potato or build a bus has shrunk and will probably never grow back anywhere near the size of when the majority of (paid, rich world) labor was sweaty.

we can onshore jobs, we can retrofit and retool for planetary rescue and such, but we can't put the robots back in the bottle.

i would argue, from a much more contrarian POV than usual, that the FIRE sector rose because as productivity increased, wealth redistribution became the story, and the working class was completely unprepared to win a fight unrelated to wages or benefits, or that involved transforming how those benefits accumulated (single-payer healthcare instead of employer-provided, for instance).

the FIRE sector rose because as productivity increased, wealth redistribution became the story, and the working class was completely unprepared to win a fight unrelated to wages or benefits, or that involved transforming how those benefits accumulated (single-payer healthcare instead of employer-provided, for instance).

This guy argues that the rise in productivity and the expansion of the financial sector are related because huge increases in productivity, without any accompanying increase in wages, created trillions in surplus for the capitalist class that had to go somewhere, and was therefore channeled into greater and greater financial speculation. Of course, the inability of the working class to fight back through effective unions explains why rising productivity didn't lead to higher wages.

i wouldn't argue against wages being low. but i think the bigger story is how much the price of public goods -- college education, medical care, shelter, quality food, taxes -- has increased for most people, raising the bar for good living above any achievable wage. forcing even well-employed people into too much debt and no-slack working schedules.

it would be very hard on small and medium businesses if we tried to make up the difference in taxes and services through compensation alone. no question at all that larger corporations are taking advantage of the incredibly-larger benefits of scale today, the question is whether to try to balance their increased power through the labor market or through other means of redistribution, and you can see which i think is the right way.

Jonathan Schartz wrote: "The U.S. is responsible for about 20% of all the manufactured goods p'roduced each year, far more than any other country. The closest behind us is Japan.'

That doesn't seem intuitive to me, but it could be right, becasue I don't know much about this. I'm not sure what kind of numbers you're referring to--gdp related to manufacturing, value added, something else. But it would really surprise me if China remains far behind the US and Japan in manufacturing output. http://www.finfacts.ie/irishfinancenews/article_1010305.shtml

I would actually have guessed that China is the leader now, and the reason may be that "manufactured goods" is something a little different than I would guess.

SteveB:

I don't think Les Leopold is right about why the FIRE sector become so dominant. The short answer to that is that there has been much more money to be made there. The rate of profit in that sector has been much higher than in manufacturing. In fact, the rate of profit in manufacturing has been declining, under the pressure of competition, the "creative destructive" process of capitalism.

The implications of a declining rate of profit in manufacturing are bad. There's really only so much FIRE does for society. it seems to me have a pretty big "zero sum" component, and most of those profits in the FIRE sector in the last 40 years consisted of taking money away from everybody else. And so we have arrived back where we started as to social fairness.

So basically, as it became harder to make money in manufacturing, the looting of pensions and oursourcing and the like took off. What Leopold was saying sounded backwards to me. The big money came from the looting, not caused it. But I just read the summary, not the whole thing.

What Leopold was saying sounded backwards to me. The big money came from the looting, not caused it.

Well, I think the chain of events, according to Leopold, goes something like this:

1) Employers break the unions, allowing them to force wages down, while increasing productivity

2) The increased surplus from 1) creates trillions in wealth for the capitalist class

3) Capitalists go looking for places to invest their new-found trillions (because that's what capitalists do with their money) but can't make "productive" investments , because productive industries are already at overcapacity and also don't yield a "satisfactory" rate of profit.

4) And so, voila! the financial sector is there, ready with lots of innovative financial "products" to absorb the trillions of dollars sloshing around the world in search of a profit.

So yes, workers were "looted" of their pension funds and fair compensation for their work, and that money was used to destroy the economy through speculative finance.

The main lesson I took from the book is that wealth inequality creates financial instability. If we don't want to live under an endless succession of speculative bubbles and the resulting crashes, we have to take that money back (money that was stolen from us in the first place.) Spread thirty trillion dollars among the working people of the world, and they might buy a new car or a cabin in the U.P. of Michigan, but they'd be hard-pressed to do something with the money that would destroy the world economy (whether they'd destroy the world's environment is a separate question.)

SteveB:

That's what I understood Leopold to be saying, and I think it's wrong as a matter of causation. But wealth inequality is bad and has undoubtedly contributed to financial instability because the rich have made the laws that have allowed all the deregulation, which in turn has caused more wealth inequality.

But the wealth hasn't come from forcing wages down. Profits in the "real economy" have declined despite lower wages and higher productivity. That's probably not an important error for ordinary understanding though.

It does at least suggest, however, that the crisis of capitalism is not over. Turbulent as these times seem, much of our lives have fallen in an interlude.