economy

Letter To Obama – Krugman

From Dave Smith
Ukiah
(Excerpt)

Universal health care, then, should be your biggest priority after rescuing the economy. Providing coverage for all Americans can be for your administration what Social Security was for the New Deal. But the New Deal achieved something else: It made America a middle-class society. Under FDR, America went through what labor historians call the Great Compression, a dramatic rise in wages for ordinary workers that greatly reduced income inequality. Before the Great Compression, America was a society of rich and poor; afterward it was a society in which most people, rightly, considered themselves middle class. It may be hard to match that achievement today, but you can, at least, move the country in the right direction.

What caused the Great Compression? That’s a complicated story, but one important factor was the rise of organized labor: Union membership tripled between 1935 and 1945. Unions not only negotiated better wages for their own members, they also enhanced the bargaining power of workers throughout the economy. At the time, conservatives warned that wage gains would have disastrous economic effects — that the rise of unions would cripple employment and economic growth. But in fact, the Great Compression was followed by the great postwar boom, which doubled American living standards over the course of a generation.

Unfortunately, the Great Compression was reversed starting in the 1970s, as American workers once again lost much of their bargaining power. This loss was partly due to changes in the world economy, as major U.S. manufacturing corporations started facing more international competition. But it also had a lot to do with politics, as first the Reagan administration, then the Bush administration, did all they could to undermine the ability of workers to organize.

You can make a start on reversing that process. Clearly, you won’t be able to oversee a tripling of union membership anytime soon. But you can do a lot to enhance workers’ rights. One is to start laying the groundwork to pass the Employee Free Choice Act, which would make it much harder for employers to intimidate workers who want to join a union. I know it probably won’t happen in your first year, but if and when it does, the legislation will enable America to take a huge step toward recapturing the middle-class society we’ve lost.

Go to Krugman’s Letter To Obama in Rolling Stone


The Idea of a Local Economy


Excerpts from The Idea of a Local Economy
Orion Magazine (2001)
Wendell Berry

A total economy is one in which everything—“life forms,” for instance,—or the “right to pollute” is “private property” and has a price and is for sale. In a total economy significant and sometimes critical choices that once belonged to individuals or communities become the property of corporations.

A total economy, operating internationally, necessarily shrinks the powers of state and national governments, not only because those governments have signed over significant powers to an international bureaucracy or because political leaders become the paid hacks of the corporations but also because political processes—and especially democratic processes—are too slow to react to unrestrained economic and technological development on a global scale. And when state and national governments begin to act in effect as agents of the global economy, selling their people for low wages and their people’s products for low prices, then the rights and liberties of citizenship must necessarily shrink. A total economy is an unrestrained taking of profits from the disintegration of nations. communities, households, landscapes, and ecosystems. It licenses symbolic or artificial wealth to “grow” by means of the destruction of the real wealth of all the world…

Aware of industrialism’s potential for destruction, as well as the considerable political danger of great concentrations of wealth and power in industrial corporations, American leaders developed, and for a while used, the means of limiting and restraining such concentrations, and of somewhat equitable distributing wealth and property. The means were: laws against trusts and monopolies, the principle of collective bargaining, the concept of one-hundred-percent parity between the land-using and the manufacturing economies, and the progressive income tax. And to protect domestic producers and production capacities it is possible for governments to impose tariffs on cheap imported goods. These means are justified by the government’s obligation to protect the lives, livelihoods, and freedoms of its citizens. There is, then, no necessity or inevitability requiring our government to sacrifice the livelihoods or our small farmers, small business people, and workers, along with our domestic economic independence to the global “free market.” But now all of these means are either weakened or in disuse. The global economomy is intended as a means of subverting them.

Continue reading The Idea of a Local Economy


“All of these rights spell security…”


FDR’s Economic Bill of Rights

It is our duty now to begin to lay the plans and determine the strategy for the winning of a lasting peace and the establishment of an American standard of living higher than ever before known. We cannot be content, no matter how high that general standard of living may be, if some fraction of our people—whether it be one-third or one-fifth or one-tenth—is ill-fed, ill-clothed, ill-housed, and insecure.

This Republic had its beginning, and grew to its present strength, under the protection of certain inalienable political rights—among them the right of free speech, free press, free worship, trial by jury, freedom from unreasonable searches and seizures. They were our rights to life and liberty.

As our nation has grown in size and stature, however—as our industrial economy expanded—these political rights proved inadequate to assure us equality in the pursuit of happiness.

We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. “Necessitous men are not free men.” People who are hungry and out of a job are the stuff of which dictatorships are made.

In our day these economic truths have become accepted as self-evident. We have accepted, so to speak, a second Bill of Rights under which a new basis of security and prosperity can be established for all—regardless of station, race, or creed.

Among these are:

The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;

The right to earn enough to provide adequate food and clothing and recreation;

The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;

The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;

The right of every family to a decent home;

The right to adequate medical care and the opportunity to achieve and enjoy good health;

The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;

The right to a good education.

All of these rights spell security. And after this war is won we must be prepared to move forward, in the implementation of these rights, to new goals of human happiness and well-being.

America’s own rightful place in the world depends in large part upon how fully these and similar rights have been carried into practice for our citizens.


A little scary…


From Michael Laybourn

At the time I first saw this it was kind of funny. Now… It’s a little scary…
Dear Beloved American:
“I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.
I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion USD. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gramm, lobbyist for UBS, who (God willing) will be my replacement as Ministry of the Treasury in January. As a former U.S. congressional leader and the architect of the PALIN / McCain Financial Doctrine, you may know him as the leader of the American banking deregulation movement in the 1990s. As such, you can be assured that this transaction is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.
Yours Faithfully Minister of Treasury Paulson”

Lo and behold! He got the blank check and no one can tell him what to do with it. What is left after these giveaways? No one knows, neither Congress nor the American people.

Continue reading A little scary…


What is a Transition Culture?

Rob Hopkins (UK):

This involves looking at what I call the Head, the Heart and the Hands of Energy Descent.

By the Head I mean the concepts of peak oil, arguments for and against localisation as well as any historical examples that we can learn from.

The Heart refers to exploring how to actually engage communities in a positive and dynamic way, how to use peak oil as a tool for empowerment rather than leaving people feeling helpless. This part of the exploration is about how to actually facilitate change, and the dynamics of cultural transformation.

The Hands refers to the practical aspects, could the UK become self sufficient in food and how? How much well managed woodland would it take to heat a town with efficient CHPs? Can local materials be used to retrofit houses?

Continue reading about Transition Cultures


A dollar spent…

From Dave Smith
See update below…

A local merchant forwards this:

A dollar spent at a locally-owned store is usually spent 6 – 15 times before it leaves the community.

From $1 you create $5 – $14 in value within the community.

Spend $1 at a national chain store and 80% of it leaves immediately.

Thanks for contributing to our sustainable community.

Quote:  Tim Mitchell, first cited in E magazine, article available through the Northwest Earth Institute’s Choices for Sustainable Living discussion course book.
~
Update 12/11/08: The local Chamber of Commerce sent this quote out to their email list today, and soon thereafter a retraction email was sent out and replaced with the same quote minus this part: “Spend $1 at a national chain store and 80% of it leaves immediately.”

H-m-m-m…


The value of decentralizing

From Dave Smith

Jeff Vail:

This post will argue that, when measured from the perspective of the median participant, decentralization offers a superior structure for both economic and political organization, a structure that may prove far more sustainable in a post-peak world than our current, centralized, hierarchal patterns of organization. Suburbia, not as a model for material consumption, but as a legal and social lattice of decentralized and more uniformly distributed production land ownership, has the potential to serve as the foundation for just such a pioneering adaptation—a Resilient Suburbia.

Continue reading A Resilient Suburbia 4: Accounting for the Value of Decentralization


Why tax cuts have always led to disaster

From Dave Smith thanks to The Thom Hartmann radio program

Larry Beinhart over at The Huffington Post has the facts:

THE MYTH

Do tax cuts stimulate the economy?

Yes. Tax cuts allow people to keep more of their own money therefore they have more to invest and spend into the economy and more money to start business and create jobs therefore also helping to stimulate the economy.

“I think when people take a look back at this moment in our economic history, they’ll recognize tax cuts work. They have made a difference.” ~George W. Bush

THE REALITIES

The brute facts are these:

Large income tax cuts are followed by a bubble and then a crash.

High income taxes correlate with economic growth.

Income tax increases are followed by economic growth.

Moderate income tax cuts are followed by a flat economy.

All this is especially true as applied to the top tax rates, the amount paid on income that exceeds the highest bracket.

THE THREE GREAT TAX CUTS: BOOM, BUBBLE, CRASH…

Continue Reading Tax Cuts: Theology, Facts and Totally F**cked at The Huffington Post →


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