March Blog: Big Budget, Wild Outcries, the Herd Goes on Strike
Personal commentary, updated throughout the month, tracking the news and politics and unusual stuff here and there.
By Ed Knudson
March 31: Auto Company Debt. It's the last day of the month and I haven't explained what I mean by the title phrase for this month's blog, "the herd has gone on strike." The auto company debt is a good example. Reading the news about the Obama administration's plans for GM and Chrysler it becomes clear what is one of their biggest problems: too much debt. The firms have tried to renegotiate their debt but the people to whom they owe the money don't want to give up any of their money. Think about it. If GM owed you 20 million dollars would you want to forgive any of it? Of course not, nobody does. So the rational self interest of each lender leads to the requirement of bankruptcy for the company, which will mean that only a portion, maybe a small portion, of the debts will be repaid. Everybody loses.
The wealthy herd is extremely nervous about all of this, not only GM but the whole financial industry. Nobody wants to take their losses until they are forced to do so. Rather than force them to do so, the administration's plans are to take over debts so the wealthy herd don't have to take their losses. Obama and his crew are trying to make it as easy as possible to get through this without the wealthy having to take as big a hit as they would if the companies just went bankrupt and a new system was created for lending and credit in this country.
In the meantime, the herd has gone on strike, refusing to lend anybody anything until they are assured they will not be losing their money. When labor unions go on strike they remove labor from the economy and they get criticized. When the wealthy herd goes on strike they remove capital from the economy but they don't get criticized, the government starts giving them taxpayer money. This is now what capitalism has become: giving public money to private corporations. The very thing hated by conservatives and right wing talk shows is becoming standard practice, except the people on welfare are now the biggest banks and financial institutions in the country.
It is time to say things clearly: capitalism failed, markets failed, it is time to get beyond the old stale arguments about free markets and think clearly about how a well-managed capitalism can serve the interests of the whole society, not just the wealthy herd.
March 30: Creating State Owned Banks. North Dakota is in the news now because of the Fargo flood. But it is also in the news because it has the only state-owned bank in the nation and has become the envy of Wall Street because of how well it has done even in this economy. Mother Jones Magazine has an interview with the president of North Dakota's bank. The interview is introduced with the following. You can read the entire interview with the above link.
March 18: Obama Disappointing on Education. At EdWeek Diane Ravitch is engaged in a debate over Obama's Secretary for Education: "I am sorely disappointed in Arne Duncan. I don't see any change from the mean, punitive version of accountability that the Bush administration foisted on the nation's schools." It's worth reading her whole blog. After several decades of dumping on public schools it appears that Arne Duncan is going to continue the Republican tradition. Our kids need good and compassionate and well-paid teachers not stupid efforts to track everything by statistics which can't tell you much, anyway, about what's really going on in the heads of children.
March 17: Enough! End Corporate Excess. A bunch of groups are organizing a demonstration this Thursday, click the link to find a place near you. Here is a description on the site: "On March 19, 2009 Americans in cities nationwide will hold demonstrations at the offices of major banks and other corporations to demand more responsible corporate behavior and call on Congress to enact the change that will make it happen: employee free choice and healthcare reform."
March 14: A new Populist Caucus is being organized in the House to oppose bank bailouts and promote more aggressive support for regular Americans than big shot bankers, John Nichols reports in The Nation. Peter DeFazio of Oregon is one who has joined the new caucus. Nichols says: "While most media coverage of Washington's economic debate portrays a battle between bold Democrats and belligerent Republicans, dozens of Congressional Democrats have been arguing--sometimes in party caucuses, sometimes by breaking with leadership on key votes and frequently by using new media to speak directly to frightened Americans--that their own party must use its political capital to bail out struggling homeowners and laid-off workers rather than corrupt bankers, brokers and speculators."
March 11: Wellstone Action Training is coming to Seattle in April. This is a great opportunity for anyone thinking about running for office or becoming involved in community activism. Here is their announcement: "Calling All Changemakers! 2009 is our year; the year of change. But we know all too well that we can't sit back and let others do the work-- it's up to us! Camp Wellstone gives you the skills you need to get to work building the progressive movement.
Next stop - Seattle, Washington
April 24-26, 2009
Register today.
While Wellstone Action has a very busy training calendar this year, Camp Wellstone Seattle is the last training open to public registration before summer. Don't miss out! Wellstone Action's signature weekend training program provides hands-on, practical training in grassroots politics for citizen activists, campaign workers, and people interested in running for office. This training runs from 3:00 pm Friday, April 24 to 3:30 pm Sunday, April 26. The training will take place in Seattle and the location will be announced to registered participants.
March 10: Well, the Republicans have decided to fight rather than flex. They are coming all out against everything Obama is doing, and Obama is keeping his promises, doing what he was elected to do, that is good news. Elections have their consequences! But Republicans have more than angry politics on their side, they have the "herd" of Wall Street, the true believers in Social Darwinism, that the "fit" win, and the fit in capitalism are the wealthy, the people with money for whom the system has worked and do not like the fact that they are no longer in charge. Just watch a little CNBC to hear their screaming outrage.
This combination, angry politics which does the bidding of wealth, has been a potent force in cities and counties and states and the nation as a whole for a long time. It's when the local newspaper teams up with the local banker to make sure that nothing against the advertisers and the wealthy gets into the paper, no matter how many of the local people would want it otherwise. Even though the Republicans lost an election, they have a great deal of wealth on their side. That's why even as a minority in politics they can have a very impact on what happens in the country and they may well wreck everything, even though the most competent president in a very long time has been elected. Now the Republican party spokesperson has become an angry talk show host whose rhetoric is just a bit above explicit racism who wants the this president to fail.
So, don't think changing this country is going to be easy. It's no time to think Obama can do it by himself. People need to stay active in helping to pass legislation, a process quite different than simply electing a president.
March 6: Robert Johnson at Campaign for America's Future tells this story exhibiting Wall Street economics.
Young Chuck, moved to Texas and bought a donkey from a farmer for $100. The farmer agreed to deliver the donkey the next day. The next day he drove up and said, "Sorry son, but I have some bad news. The donkey died." Chuck replied, "Well, then just give me my money back." The farmer said, "Can't do that. I went and spent it already."
Chuck said, "Ok, then, just bring me the dead donkey." The farmer asked, "What ya gonna do with him?" Chuck said, "I'm going to raffle him off." The farmer said, "You can't raffle off a dead donkey!"Chuck said, "Sure I can. Watch me. I just won't tell anybody he's dead."
A month later, the farmer met up with Chuck and asked, "What happened with that dead donkey?" Chuck said, "I raffled him off. I sold 500 tickets at two dollars a piece and made a profit of $898.00."
The farmer said, "Didn't anyone complain?" Chuck said, "Just the guy who won. So I gave him his two dollars back." Chuck now works for Morgan Stanley in their OTC Default Derivative Department.
March 4: If you are getting nervous about the downward market, like me, history can help. The Doug Short website has a chart showing ups and downs from 1871. It also has an interesting four bears chart showing the current recession in relation to three others, including 1929. The current bear market, by the way, began 10/9/07 so is now in its sixteenth month. These charts may make you more nervous, but they are not predictions. It just helps to see things in historical perspective.
I tend to like the Short site, since it's by a retired guy with a Ph.D. in English, not economics. If you study economics in most of this country's business schools you get your mind twisted by neo-classical theories which have little to do with the reality of social life and the real economy. It's hard to talk to people whose doctrinal commitments are so severe there is hardly any room for a question. A friend who is a business executive recently sent an email in which he declared only the free market creates jobs, government never creates any jobs. Well, tell that to the person who delivers your mail everyday. It's rather astonishing how narrow the business creed is, worse than most religions.
When your ideology is so strong that you literally cannot "see" contrary evidence in front of your face, and if you sit in a powerful position, you can do a lot of damage in the world, which is what is happening right now. Lots of damage has been done since the Reagan years of hatred of government. Some business folks remind me of little children in a temper tantrum, crying about how they don't want to have to function within some rules.
Now that's just what's needed, some new and better rules about how the financial system will be structured in this country so that it serves the real economy and society and does not merely enrich the financial speculators.
Some years ago the business consultant Peter Drucker said that Wall Street had become "uncoupled" from Main Street, that is, the values traded in the markets had little to do with the actual factories and products and stores and places where people get what they need to live and move about and house themselves. That term, "uncoupling", led me to think that Wall Street had separated itself from the real economy and had gone spinning off into cycles of mathematical abstractions. It kept going only because so many rich people "believed" in it. It's a belief system which has now been shown to have destroyed itself, and taken down the real economy with it.
What we need is a whole new economic belief system and Social Democracy has something significant to offer here. The economy is secondary to society. If an economic system does not support and undergird a healthy and free society then it needs to be adjusted by politics until it does.
March 3: This is the first entry of a new feature at this website, a "blog," a contraction of the word "web log", a term invented for the Internet. People writing blogs express their more personal thoughts, feelings, observations about whatever they want. Political blogs focus on politics, obviously, and this particular blog will be about all the various topics which interest us at this website.
Only the first 500 characters appear on the front page. These words give the web visitor an idea about the content of a page and whether they want to read further. They can then just click on the "more..." to see the whole page.
The blog will constitute one page for each month. That's the idea, anyway, we are experimenting with this method.
The title of my blog will reflect what I think is coming up this month but I will change it as I desire too. The most recent entry will be at the top. So to read the blog from first to last start from the bottom.
To see all the blogs go to the Blogs Section.
If you want to write your own blog here let us know.
The wealthy herd is extremely nervous about all of this, not only GM but the whole financial industry. Nobody wants to take their losses until they are forced to do so. Rather than force them to do so, the administration's plans are to take over debts so the wealthy herd don't have to take their losses. Obama and his crew are trying to make it as easy as possible to get through this without the wealthy having to take as big a hit as they would if the companies just went bankrupt and a new system was created for lending and credit in this country.
In the meantime, the herd has gone on strike, refusing to lend anybody anything until they are assured they will not be losing their money. When labor unions go on strike they remove labor from the economy and they get criticized. When the wealthy herd goes on strike they remove capital from the economy but they don't get criticized, the government starts giving them taxpayer money. This is now what capitalism has become: giving public money to private corporations. The very thing hated by conservatives and right wing talk shows is becoming standard practice, except the people on welfare are now the biggest banks and financial institutions in the country.
It is time to say things clearly: capitalism failed, markets failed, it is time to get beyond the old stale arguments about free markets and think clearly about how a well-managed capitalism can serve the interests of the whole society, not just the wealthy herd.
March 30: Creating State Owned Banks. North Dakota is in the news now because of the Fargo flood. But it is also in the news because it has the only state-owned bank in the nation and has become the envy of Wall Street because of how well it has done even in this economy. Mother Jones Magazine has an interview with the president of North Dakota's bank. The interview is introduced with the following. You can read the entire interview with the above link.
The Bank of North Dakota is the only state-owned bank in America—what Republicans might call an idiosyncratic bastion of socialism. It also earned a record profit last year even as its private-sector corollaries lost billions. To be sure, it owes some of its unusual success to North Dakota’s well-insulated economy, which is heavy on agricultural staples and light on housing speculation. But that hasn’t stopped out-of-state politicos from beating a path to chilly Bismarck in search of advice. Could opening state-owned banks across America get us out of the financial crisis? It certainly might help, says Ellen Brown, author of the book, Web of Debt, who writes that the Bank of North Dakota, with its $4 billion under management, has avoided the credit freeze by “creating its own credit, leading the nation in establishing state economic sovereignty.” Mother Jones spoke with the Bank of North Dakota’s president, Eric Hardmeyer.
March 18: Obama Disappointing on Education. At EdWeek Diane Ravitch is engaged in a debate over Obama's Secretary for Education: "I am sorely disappointed in Arne Duncan. I don't see any change from the mean, punitive version of accountability that the Bush administration foisted on the nation's schools." It's worth reading her whole blog. After several decades of dumping on public schools it appears that Arne Duncan is going to continue the Republican tradition. Our kids need good and compassionate and well-paid teachers not stupid efforts to track everything by statistics which can't tell you much, anyway, about what's really going on in the heads of children.
March 17: Enough! End Corporate Excess. A bunch of groups are organizing a demonstration this Thursday, click the link to find a place near you. Here is a description on the site: "On March 19, 2009 Americans in cities nationwide will hold demonstrations at the offices of major banks and other corporations to demand more responsible corporate behavior and call on Congress to enact the change that will make it happen: employee free choice and healthcare reform."
March 14: A new Populist Caucus is being organized in the House to oppose bank bailouts and promote more aggressive support for regular Americans than big shot bankers, John Nichols reports in The Nation. Peter DeFazio of Oregon is one who has joined the new caucus. Nichols says: "While most media coverage of Washington's economic debate portrays a battle between bold Democrats and belligerent Republicans, dozens of Congressional Democrats have been arguing--sometimes in party caucuses, sometimes by breaking with leadership on key votes and frequently by using new media to speak directly to frightened Americans--that their own party must use its political capital to bail out struggling homeowners and laid-off workers rather than corrupt bankers, brokers and speculators."
March 11: Wellstone Action Training is coming to Seattle in April. This is a great opportunity for anyone thinking about running for office or becoming involved in community activism. Here is their announcement: "Calling All Changemakers! 2009 is our year; the year of change. But we know all too well that we can't sit back and let others do the work-- it's up to us! Camp Wellstone gives you the skills you need to get to work building the progressive movement.
Next stop - Seattle, Washington
April 24-26, 2009
Register today.
While Wellstone Action has a very busy training calendar this year, Camp Wellstone Seattle is the last training open to public registration before summer. Don't miss out! Wellstone Action's signature weekend training program provides hands-on, practical training in grassroots politics for citizen activists, campaign workers, and people interested in running for office. This training runs from 3:00 pm Friday, April 24 to 3:30 pm Sunday, April 26. The training will take place in Seattle and the location will be announced to registered participants.
March 10: Well, the Republicans have decided to fight rather than flex. They are coming all out against everything Obama is doing, and Obama is keeping his promises, doing what he was elected to do, that is good news. Elections have their consequences! But Republicans have more than angry politics on their side, they have the "herd" of Wall Street, the true believers in Social Darwinism, that the "fit" win, and the fit in capitalism are the wealthy, the people with money for whom the system has worked and do not like the fact that they are no longer in charge. Just watch a little CNBC to hear their screaming outrage.
This combination, angry politics which does the bidding of wealth, has been a potent force in cities and counties and states and the nation as a whole for a long time. It's when the local newspaper teams up with the local banker to make sure that nothing against the advertisers and the wealthy gets into the paper, no matter how many of the local people would want it otherwise. Even though the Republicans lost an election, they have a great deal of wealth on their side. That's why even as a minority in politics they can have a very impact on what happens in the country and they may well wreck everything, even though the most competent president in a very long time has been elected. Now the Republican party spokesperson has become an angry talk show host whose rhetoric is just a bit above explicit racism who wants the this president to fail.
So, don't think changing this country is going to be easy. It's no time to think Obama can do it by himself. People need to stay active in helping to pass legislation, a process quite different than simply electing a president.
March 6: Robert Johnson at Campaign for America's Future tells this story exhibiting Wall Street economics.
Young Chuck, moved to Texas and bought a donkey from a farmer for $100. The farmer agreed to deliver the donkey the next day. The next day he drove up and said, "Sorry son, but I have some bad news. The donkey died." Chuck replied, "Well, then just give me my money back." The farmer said, "Can't do that. I went and spent it already."
Chuck said, "Ok, then, just bring me the dead donkey." The farmer asked, "What ya gonna do with him?" Chuck said, "I'm going to raffle him off." The farmer said, "You can't raffle off a dead donkey!"Chuck said, "Sure I can. Watch me. I just won't tell anybody he's dead."
A month later, the farmer met up with Chuck and asked, "What happened with that dead donkey?" Chuck said, "I raffled him off. I sold 500 tickets at two dollars a piece and made a profit of $898.00."
The farmer said, "Didn't anyone complain?" Chuck said, "Just the guy who won. So I gave him his two dollars back." Chuck now works for Morgan Stanley in their OTC Default Derivative Department.
March 4: If you are getting nervous about the downward market, like me, history can help. The Doug Short website has a chart showing ups and downs from 1871. It also has an interesting four bears chart showing the current recession in relation to three others, including 1929. The current bear market, by the way, began 10/9/07 so is now in its sixteenth month. These charts may make you more nervous, but they are not predictions. It just helps to see things in historical perspective.
I tend to like the Short site, since it's by a retired guy with a Ph.D. in English, not economics. If you study economics in most of this country's business schools you get your mind twisted by neo-classical theories which have little to do with the reality of social life and the real economy. It's hard to talk to people whose doctrinal commitments are so severe there is hardly any room for a question. A friend who is a business executive recently sent an email in which he declared only the free market creates jobs, government never creates any jobs. Well, tell that to the person who delivers your mail everyday. It's rather astonishing how narrow the business creed is, worse than most religions.
When your ideology is so strong that you literally cannot "see" contrary evidence in front of your face, and if you sit in a powerful position, you can do a lot of damage in the world, which is what is happening right now. Lots of damage has been done since the Reagan years of hatred of government. Some business folks remind me of little children in a temper tantrum, crying about how they don't want to have to function within some rules.
Now that's just what's needed, some new and better rules about how the financial system will be structured in this country so that it serves the real economy and society and does not merely enrich the financial speculators.
Some years ago the business consultant Peter Drucker said that Wall Street had become "uncoupled" from Main Street, that is, the values traded in the markets had little to do with the actual factories and products and stores and places where people get what they need to live and move about and house themselves. That term, "uncoupling", led me to think that Wall Street had separated itself from the real economy and had gone spinning off into cycles of mathematical abstractions. It kept going only because so many rich people "believed" in it. It's a belief system which has now been shown to have destroyed itself, and taken down the real economy with it.
What we need is a whole new economic belief system and Social Democracy has something significant to offer here. The economy is secondary to society. If an economic system does not support and undergird a healthy and free society then it needs to be adjusted by politics until it does.
March 3: This is the first entry of a new feature at this website, a "blog," a contraction of the word "web log", a term invented for the Internet. People writing blogs express their more personal thoughts, feelings, observations about whatever they want. Political blogs focus on politics, obviously, and this particular blog will be about all the various topics which interest us at this website.
Only the first 500 characters appear on the front page. These words give the web visitor an idea about the content of a page and whether they want to read further. They can then just click on the "more..." to see the whole page.
The blog will constitute one page for each month. That's the idea, anyway, we are experimenting with this method.
The title of my blog will reflect what I think is coming up this month but I will change it as I desire too. The most recent entry will be at the top. So to read the blog from first to last start from the bottom.
To see all the blogs go to the Blogs Section.
If you want to write your own blog here let us know.