Great Post from John Quiggin

Wow!  John Quiggin (Social Democrat) takes on the big picture of revolution and reform in an incredible post:

http://johnquiggin.com/2011/06/19/marxism-without-revolution-class/#more-9916

Please read to the bottom before dismissing his dismissal of Marxist revolution.  What he is actually proposing is extremely important...and imaginable.*

Basically the idea is that we were on the right track until around 1970 (I agree).  Step One is unwinding the "market liberalism" (his term for neoliberalism) which has taken hold of our society since then.  If we could just bring back those great old reforms from the New Deal and Great Society, we would be well out of the hole we have fallen into since then.  It should be clearer and clearer to many people that those ideas, like the Glass Stegal Act and the Fairness Doctrine, were very good ideas, and that what they were replaced with isn't working at all, except for the top 1%.

It was done before.  It produced the best societies the world has yet seen.  It can be done again.

BTW, I am continuing to review Quiggin's most excellent book "Zombie Economics" about how the ideas of market liberalism are disproven again and again, but never seem to quit dominating our world.

*From where we are right now, I think it pretty unlikely that a Bolshevik style revolution would go the right way, if it were even possible.  For the actual Bolsheviks, it required passive acceptance by the military, for the Maoists and Cubans, it required a weak state military that a popular force could overpower.  But Quiggin gives other reasons why it wouldn't go well, quoting leading socialist/marxist thinkers.

And linked within the above post, there is Quiggin's further discussion on the futility of violent revolution to achieve lasting change:

http://crookedtimber.org/2005/10/17/the-winter-palace-and-after/

Krugman on Argentina and Greece

Here's a great post on Argentina's default and it's aftermath.

Real business creators are not unfamiliar with default.  Before you one can bet a truly successful business going, it's likely you have been through several defaults.  Of course in that case, the investors know they are taking a large risk, but a few big payoffs can make up for a bunch of bad bets.

But when lenders can get the public to bear the burden imposed by their leaders, the rhetoric changes, and default is something that can not even be considered by Serious People.  This is all a cover, really, for continuing class war, the one the wealthy are winning.  The real moral hazard is in the assumption that the general public will always bear the cost of bad loans.

Of course the success after the default wasn't caused by the default, that was due to the hard work of the Argentine people.  But they could probably not have gotten there without the default.

Krugman index

Here is Krugman's list of important background reading on macroeconomics.

Nozick in 14 steps

Brad Delong deconstructing Nozick, doing it better than anyone.

http://delong.typepad.com/sdj/2011/06/the-turing-test-who-can-successfully-explain-robert-nozick.html

Nighttime is best in summer

Here in San Antonio this June, the daytime is scorching.  On Monday a man got up at 7am to start pouring concrete for his sidewalk.  By 1pm, he was dead in the hundred degree heat.  The prospects for the even hotter months of July and August don't look good.  The La Nina weather pattern is likely to bring little rain.  Yes of course I believe Global Warming is making this worse than usual, and the cresting of the solar cycle isn't helping either.

But at night it gets quite pleasant.  Even just after the sun goes down at 9pm it's quite nice to take a mile walk (as I try to do every night).  By 12 midnight, the temperature is around 80 and it's quite nice even to work on yard.  Even ignoring the temperature, the lack of scorching sun makes the outdoors tolerable.

The Folklife festival moved from August to June to help mitigate the heat.  It didn't help much.  But I had a great time at the festival for just one hour between 10pm and closing at 11pm.  I even had to walk a mile and a half to park, but it wasn't difficult at all.

Which all makes me wonder, why are we now working and playing mostly at night and sleeping during the day?  The latin american civilizations have all operated more like that, with the famous "siesta", though I'm not sure even they took it far enough.

I think it's the scourge of anglo culture.  "Early to bed, early to rise, makes a man healthy, wealthy, and wise."  Well tell that to the man who died pouring his concrete sidewalk.

I call this "earlyism," and I believe the thing that sustains it mostly is subservience to power.

It doesn't take long for a worker to realize that business is not mainly about production.  It's about power.  And the way workers show their subservience to power is serving at the whim of the powerful, no matter how harsh or unnecessary the rituals.  So we have the work days that start at 7am (or, if you wish, you can start "flextime" at 6am or 5:30).  It's not really about getting anything more done, it's about sacrifice.

As long as we're caught in that trap, we'll never have sensible hours.

The halting end of the rentier state

As posted to Brad DeLong's blog:

The tight money rentier state will always appeal to the sensibilities of the most vicious wealthy, as well as those who don't bother to think things through. But as the deflationary spiral continues, all business is wiped out, all employment is wiped out, everyone but the super rich dies off, and ultimately there is no production from which to pay any interest.

At least until the Revolution comes. The resulting falangist dictatoriat will be made to look, as usual, like Communism, which by then will seem preferable to the other thing.

But that won't work either, it's just another step on the way down to total collapse of civilization, and a mass die off of humanity amidst a scorching and salty planet.

The only sustainable model in the long run is equality, which is incompatible with property, interest, etc. The only question is, how much is destroyed until we get there. It may at first be an equality of nothing, or pretty close.

If no jobs, who needs Wall Street?

The whole social purpose of money, finance, financial institutions, private property, and so on, is to make a functioning economy that produces stuff to meet human needs.  That is what "the wealth of nations" means.

If those institutions are not doing that, they are a dangerous gambling house which ought to be condemned for the public safety.

When times go bad, the first hit should not be in jobs for the masses, but the pockets of the financial classes.  And they should keep getting those hits until either everyone who wants a productive job can get one, or those pockets are completely empty.

But what actually happens is those pockets buy lawmakers, buy the support of the chattering media, and so on, so that they never lose as badly as everyone else.

The wealthy only deserve wealth to the extent that it makes others better off also.  This is usually the claim in good times (a wealthy man might say "I built the railroads") but when times go bad it is quickly forgotten, and replaced by "I got mine."

The focus on keeping government deficits down, keeping inflation down, and so on, show the protection that is extended toward the wealthy in hard times at the expense of the jobless.  (As a poster on Krugman's blog noted, it's a question of whose ox gets gored.)  Deficits and inflation should increase until there are no jobless.  The fundamental reason for the existence of money is to create a productive economy, not to preserve the privileges of the privileged.