Too Late?
Jared, this is an enormously useful book, just as I expected, but I’m wondering if events aren’t overtaking us. The economy seems to be going down faster than anyone could have imagined. I know I’m having to re-write my “stump speech” every week.
My brother-in-law just lost his job. I spent the weekend talking to truck drivers who were involved in nation-wide protests of $4/gal diesel fuel last week. They just can’t get by any more, and of course without truckers the whole thing grinds to a screeching halt. I also talked to a Bear Stearns employee who doesn’t know if she’ll have a job from one week to the next.
Maybe some of the economic literacy education you need to be doing should be in the past tense: Not “here’s how the economy works,” but “here’s why it didn’t work,” at least not for ordinary people. We deregulated banking, failed to protect wages or workers’ right to organize, subsidized the oil companies while they were taking in record profits, and so forth. If the discipline of economics “studies the best ways” to “provide the goods and services that we need and want,” it has fallen down on the job.
But a lot of the economic educating you do around this book also has to be cast in the future tense. What are we going to do? – and not just at the level of national policy. I’m thinking of the truck drivers who assembled in convoys on the Jersey Turnpike last week and drove at 20 mph. I’m hoping for some foreclosure resistance, maybe going back to the old 1930s’ practice of having neighborhood protests when the bankers come around to repossess. And can anyone think of any forms of debtor resistance, such as to late fees and the interest that builds up on them?
Maybe I’m being a little apocalyptic, but the situation seems increasingly dire.
Barbara, it's great that you're here, I'm a big fan.
I like that you want Jared to answer the question not as "why does the economy work this way?" but as "why didn't it work for so many people?"
People talk about economics like it's physics. Gravity is something we all have to live with. We don't get a say. We can't create exceptions to a fundamental law of physics just because the law is inconvenient.
But we can create exceptions to the laws of economics. Economics is simply a system that arises from our social and commercial interactions. It has no immutable laws. You can do pretty much anything to way if an economic transaction has a negative effect on society.
The question I have is why do we let some arcane devotion to "economics" get in the way of doing what's right? Why do we let somebody die of a curable disease just because they don't have any money? We don't have to do things like that, but we're told we have no choice...
April 7, 2008 8:36 PM | Reply | Permalink
Welcome, Barbara!
You were on my short list I sent in to Josh after he'd asked us for suggestions on who we'd like to see here!
I hope we see you here often.
And I think 'increasingly dire' is putting it mildly ...
April 7, 2008 10:50 PM | Reply | Permalink
Yeah, I'm glad you're here Barbara. I read your article about Hillary and "The Family", and everyone was talking about it for a couple of days, but I haven't heard anything more about it since. Maybe Hillary pulled some strings and had "The Family" kill the story!
BWAHAHAHAHAHA!!!!!!!!!!
April 8, 2008 12:06 AM | Reply | Permalink
re 'The Family' story, see Barbara's article:
http://www.commondreams.org/archive/2008/03/20/7798/
and
http://jeffsharlet.blogspot.com/2008/02/blog-post.html
... very interesting
April 8, 2008 2:29 AM | Reply | Permalink
Re: . I spent the weekend talking to truck drivers who were involved in nation-wide protests of $4/gal diesel fuel last week. They just can’t get by any more, and of course without truckers the whole thing grinds to a screeching halt.
Why don't they just raise their shipping rates to cover their costs? I would imagine demand for their esrvices is fairly inelastic so they should be able to pass their fuel costs on to the rest of us rather easily.
April 8, 2008 6:27 AM | Reply | Permalink
"If you take a look at transportation,
both trucking and rail, you will see that things started softening last summer," said Arnold Maltz, associate professor of supply-chain management at Arizona State University."
Supply of truckers is steady; demand for truckers is down. Result: truckers have no pricing power. And it will only get worse as the recession deepens.
April 8, 2008 11:36 AM | Reply | Permalink
As it now stands it cost more to drive the truck than they are paid. Once all the independent truckers are bankrupt along with half of the freigtlines prices will go up. They are in the same position that dairy farmers were in durring the depression of the 1930's.
Also, truckers are not going to be able to make the truck payments and that will only agrivate the credit crunch.
April 8, 2008 5:33 PM | Reply | Permalink
I guess this means no more Larry Johnson. Bummer.
April 8, 2008 6:43 AM | Reply | Permalink
Another welcome to Barbara, simply the best progressive advocate we have!
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Here's why the economy and political system don't and can't possibly work: We have no say.
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I work for a company that is 60 percent employee-owned. However, employees have no representation on the board, and some fruitcake with a minimal investment is running the company--and laying off workers at a steady clip, even though we're profitable. All perfectly legal.
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This is just a more extreme instance of what most working Americans face. Consider this: If I have an online account with a broker, on some fine trading day I can "invest" say $1,000 in a stock sitting in my pyjamas in bed with my laptop on my lap by just tapping a few keys. Fifteen minutes later, I can decide I made a mistake and bail out of the stock. But for that lousy 15 minutes, I have more representation and rights within that company than, say, a full-time employee who has been working 60-hour weeks for 30 years, commuting to work 3 hours a day, depending on the company for 90 percent of his income, all his medical care and his retirement, if any.
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How does that make any sense?
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We grant corporate charters in this country that impart to companies enormous rights and privileges far beyond anything an actual citizen has. We have a right to demand whatever we damned well please in return. Demanding only that such companies make a profit--by whatever nefarious, bloody rotten means that might pop into their fevered little corporate minds--isn't enough.
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ONLY employees and the communities in which a corporation functions should be representated on corporate boards. Shareholders already have a vote when they get into and out of stocks. They need and deserve nothing more.
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And by the way, ONLY corporations that have such board representation--regardless of where the company is actually or mythically based--should be allowed to market their goods and services in the Unites States. We're still effectively and by far the world's largest consumer market; therefore we have the leverage to demand this.
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So all we have to do to pretty much fix everything is make one simple change in what we demand of the chief wealth-gathering mechanism in industrial society--the corporation. (Well, actually, we might have to do something about private-equity funds, too. Maybe outlaw them.) Short of this, nothing will ever be right.
April 8, 2008 10:04 AM | Reply | Permalink
I work for a company that is 60 percent employee-owned. However, employees have no representation on the board . . . .
You might want to explain how this counterintuitive result occurred.
April 8, 2008 11:47 AM | Reply | Permalink
Non-voting stock. It is the kind we were offered in the employee stock plan when I worked at a company that had one.
April 8, 2008 5:35 PM | Reply | Permalink
It's great that people are finally waking up to reality checks of the "blank" kind that have been issued by the US Government in tandem with the Fed, which incidentally, is a PRIVATE banking concern authorized to issue money, leading us to the $4 gas of today.
We were never taught the truth about the fundamentals of our economy in school, we were taught "theories" and "schools of thought".
Reading "The Creature from Jeckyll Island" was for me the epiphany and awakening, the equivalent of swallowing the Red Pill. Finally, you learn why GAO's Walker is a heroic figure, the Paul Revere of the nation's financial health and economy and how Ron Paul made the case for the abolishment of the Fed lucid and compelling.
Forget about the MSM, Marketwatch, Bloomberg, etc., I now read Minyanville, 321gold and other "conservative" sites for the truth wrt to the financial meltdown we're facing, and how every member of the highest echelons of power and wealth, including the G7 bankers and financiers, the political elite like the Bushes and Clintons, all collude in creating the simulacra of wealth and prosperity.
April 9, 2008 6:52 AM | Reply | Permalink
In the spirit of Barbara's post,
I recommend a review of the life and death of the Glass-Steagall Act.
Chronology primer by FRONTLINE:
http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html
Additional reading:
http://money.cnn.com/news/newsfeeds/articles/djf500/200804032006DOWJONESDJONLINE001187_FORTUNE5.htm
April 9, 2008 8:13 AM | Reply | Permalink
Whatever. Yes we are in a recession and people are losing jobs. You have a feeling about it. Brilliant.
After writng the entirely bogus, dumb "The Family" piece, I would never trust Barbara Ehrenreich's judgement.
(please read:
http://www.dailyhowler.com/dh032108.shtml )
April 9, 2008 11:48 AM | Reply | Permalink
Thanks for the link, kickbass. The silly "The Family" piece was the first thing I remember reading by Barbara Ehrenreich, and I agree, I'll never take her seriously after such a silly screed. It sounded like something in one of those wingnut e-mails, or something you might see on redstate.org! The Family! Able Danger, man! LOL!
April 9, 2008 1:17 PM | Reply | Permalink
The first thing you remember reading by Barbara Ehrenreich? Really? Not the best-sellers "Nickel and Dimed" and "Bait and Switch", or any of her 20 other books? Not her columns in The Progressive or Time Magazine? None of her pieces in In These Times, Z Magazine, The New Republic, Salon, Harper's, or the Atlantic Monthly? Wow. You should get out more. One sentence by Barbara Ehrenreich does more good for progressive causes than you will do in your entire life.
April 10, 2008 9:30 AM | Reply | Permalink
We need to press for higher wages and stop borrowing to keep up! Workers have to actively participate (through unions) in bringing wages up, and they have to actively participate in BORROWING LESS, including reading over a mortgage more carefully before signing the dotted line. Workers need to refuse the bait of cheap loans to buy cars and houses and plasmas they can't afford. Workers share some responsibility for this mess. Workers, again, need to actively participate and be responsible for raising wages and need to stop borrowing to keep up.
April 9, 2008 12:39 PM | Reply | Permalink
I don't think you're being too apocalyptic at all, Barbara. The economy is even shakier than the likes of Greenspan will admit because, hey, wait a minute - we don't actually make anything of value in America anymore. We can't all sell each other lattes, or McMansions.
Your loss, kickbass, if you want to turn your back on one of the best advocates for progressivism in America because she revealed some uncomfortable truths about Madame Dear Leader. Or maybe you're a Family member yourself...?
April 9, 2008 12:41 PM | Reply | Permalink
Why don't lattes or McMansions have value while these other nebulous things we don't make do have value? Is there any way to determine value apart from human preferences? If it's lattes and McMansions we are buying then don't they have value to us?
April 10, 2008 9:24 PM | Reply | Permalink