Category Archives: Mitch Green

Let the Palmer House (not Fiscal House) be our Guide

By Mitch Green

Readers of this blog familiar with my previous posts know that I love trains. Sure, they’re slow. And after about twelve hours the coach cars start to get a little, well, worn. But, as a mode of conveyance they offer one time to reflect, and if you are lucky a little time to explore a new city.

Source: Wikimedia Commons

Travelling from Kansas City to NYC via Chicago, I had the pleasure of visiting the Palmer House – a fine example of the workmanship of a bygone era. Upon entering the great hall I was immediately struck by the grandeur of its ceiling. I have had the privilege to experience similar wonder and amazement in travels elsewhere, and as far as ornate ceilings this was not my first time at the rodeo – I’ve been to the Sistine Chapel, after all. What struck me the most about that moment in the Palmer House was not driven by my taste for architecture or the fine arts (which is probably ‘vulgar’ by any convention), but that it serves as a lasting example of what society is capable of achieving. Continue reading

An Open Letter to the Winter Patriot

By Mitch Green

The following letter reflects my view on the subject of civil disobedience and does not necessarily mirror the general opinion of New Economic Perspectives.  I offer my opinion as an Army veteran, student of the economy, and critic of an ongoing effort to wage economic war on the vast majority the population.  If these words move you, I urge you to consider honestly the consequences if you decide to act.  

As the occupymovement continues to grow in defiance of the heavy-handed police actiondetermined to squelch it, a natural question emerges: What point will the militarybe summoned to contain the cascade of popular dissent?  And if our nation’s finest are brought intothis struggle to stand between the vested authority of the state and the ranksof those who petition them for a redress of grievance, what may we expect theoutcome to be?

If history isour guide then we know that story all too well. Behind a thin veil of red, white and blue stands a nation that has usedits military might to respond forcefully to any public contempt for the veryinstitutions which bind us in exclusion from the liberty those colorsevoke.  Just as a training collar keeps adog in check, a highly militarized police force responds mercilessly, sharply,and without hesitation with an array of chemical warfare and thuggish brutality.  And where they fail, divisions of soldiers standready to deliver a serious and painful lesson to all who demonstrate theirunwillingness to wait for democracy.

This has beenthe history of democracy in America.  Theink on the pages that chronicle the use of state violence towards an unrulycitizenry is dry.  We cannot rewrite them.  We read them in lament.  But for each new day history waits; at thedawn of each morning we are presented with the gift of creation.  The prevailing thought woven into the fabricof our society today, threaded through both patterns of conservative andliberal ideology, remains the recognition that something is very wrong with theworld.  Naturally, we form thequestion:  Can we do thingsdifferently?  Once we animate thatthought and present it to society as a question demanding an answer, we begin tosketch out our draft of the world in the pages of history.

I call upon mybrothers and sisters in the armed forces to ink their pens and help us writethese next few, and most important pages in the history of our social life.  Soon, it is quite likely that you will bemobilized to aid the police in their effort to contain or disperse what theirbosses see as an imminent threat to the sanctity of their authority.  As that day draws near, I remind you of thesefamiliar words:

I, (NAME), do solemnly swear (oraffirm) that I will support and defend the Constitution of the United Statesagainst all enemies, foreign and domestic; that I will bear true faith andallegiance to the same; and that I will obey the orders of the President of theUnited States and the orders of the officers appointed over me, according toregulations and the Uniform Code of Military Justice. So help me God.

Those that take this oath seriously are facedwith a terrible conflict.  You mustbattle internally between the affirmation that you will place your body betweenthe social contract embedded in the Constitution and those that seek itsdestruction, while maintaining your loyalty to the government you serve and theorders issued by its officers.  Sadly,society has placed a twin tax upon you by asking that you sacrifice both yourbody and your morality.  This tax hasbeen levied solely upon you overseas, and soon they’ll come to collectdomestically.  Your government in itsexpression of corporate interests relies upon your tenacity to endure, and yourrelentless willingness to sacrifice.  Andso you do. 

Now, more than ever we need your sacrifice.  But, I’m asking you to soldier in a differentway.  If called upon to deny the peopleof their first amendment right to peaceably assemble and petition theirgovernment for a redress of grievance, disregard the order.  Abstain from service.  Or if you are so bold, join us. Make no mistake: The consequences for suchdecisions are severe.  You will be prosecuted under the fullextent of the law.  But sacrifice is yourwatch word. 

Thomas Paine wrote in 1776:

These are the times that try men’s souls. Thesummer soldier and the sunshine patriot will, in this crisis, shrink from theservice of their country; but he that stands by it now, deservesthe love and thanks of man and woman. Tyranny, like hell, is not easily conquered;yet we have this consolation with us, that the harder the conflict, the moreglorious the triumph.

Today we are faced with a new revolution.  This time we are fighting to preserve ourdemocracy, rather than to establish a new one. And just as a grateful nation relied upon the Winter Soldier to deliverus from the colonial yoke of oppression, we ask that you aid us in our struggleto be free from the bonds of debt peonage and false representation.  In return we will stand in your defense asthe elite, who have gained so much from your service, attempt to strip you ofyour hard won honor.  

Beyond Zuccotti Park

By Mitch Green

Yesterday, under the cover of darkness, Bloomberg ordered the eviction of Occupy Wall Street from their encampment at Zuccotti Park.  Despite an injunction to block the action, the city went forward with its plans to clear the space of occupiers.  The legal showdown between OWS and Bloomberg’s New York culminated in Judge Michael Stallman’s ruling that tents will no longer be permitted in the park overnight, effectively ending the ongoing occupation at this location.

While many view the eviction as emblematic of the modern police state and its imperative to suppress dissent, others see the city and Brookfield Properties as relatively tolerant.  Apparently NYC landlords have little patience for those that challenge the sanctity of their property, making John Zuccotti and Brookfield seem quite charitable.

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Predicting the Euro’s Demise: To Those Who Got it Right, We Salute You!

By Mitch Green

To many of the world’s most highly-regarded economists, the Eurozone’s meltdown has come as a major surprise.  Committed to the belief that One Market needs One Money, most economists expected the Euro to serve as an important complement to Europe’s integration.  But, as Cullen Roche at Pragmatic Capitalism has pointed out, those who recognized how the monetary systems actually work saw the writing on the wall, as the seeds of the Euro’s own destruction were unwittingly put in place right from the beginning. Wynne Godley was the first to point out that the unprecedented divorce between the Eurozone governments’ monetary and fiscal powers would place its members in a fragile position and render them powerless in the face of a crisis.  It was a warning that Cullen suggested might amount to “the greatest prediction of the last 20 years.”  Similar praise came just last week from John Cassidy of The New Yorker magazine, who dedicated an entire piece to Godley’s insights, calling him “The Man Who Saw Through the Euro.”

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Latest in Deficit Terrorism: Postal Service Default

By Mitch Green

Americans living in rural areas should brace themselves for a new dose of pain.  As the USPS approaches the end of its fiscal year, where it will be unable to make payment of $5.5 billion to its employees health benefits fund, it is considering closing over 3600 facilities nationwide.  Just yesterday they placed on the chopping block another 250 processing centers.  Most of these closures are distributed throughout rural areas, a demographic that has borne a considerable amount of hardship throughout this entire contraction. For an interactive map of the proposed closures go here.

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Commerce Sells, but Who’s Buying?

 
You have to wonder if the president ever hears from his commerce secretary these days.  Friday’s GDP revisions by the Bureau of Economic Analysis should send a pretty strong signal that the economy is far from recovering, making clear that job killing spending cuts should be last thing on his mind:
           
While the headline number was well below expectations of 1.8%, what must be noted are the major revisions. Q1 2011 is now reported as +0.4%. That’s a major downward revision which demonstrates that QE2 was in fact doing nothing for growth and that the US is already at stall speed even without the negative impact of the European sovereign debt crisis and the debt ceiling fiasco. The double dip scare is real.”  Ed Harrison, Credit Writedowns
           

Unfortunately, the president doesn’t demonstrate any evidence that he’s heard this news.  For all we know, he might have tasked Secretary Locke to go out and “truck, barter and trade” with the American people in an effort to win the future.  So maybe instead of leveling with the president, Locke is out setting up lemon-aid stands across the country.  Who knows?

Judging by the evidence available to me, I have to assume that Obama is either willfully ignorant of the dire situation or patently insane enough to believe that we are in the midst of a recovery. Or perhaps he is fully aware that we are on the verge of a fresh contraction, but thinks the best way to increase business activity is to drive up unemployment.
No, I’m sure Gary Locke is hard at work doing the sort of thing you would expect a cabinet level official to do, not off trying to inspire confidence in the business community through conspicuous acts of commerce.  The president has heard the news alright.  The problem lies in his commitment to, above all else, selling us a phony crisis:
Now, every family knows that a little credit card debt is manageable. But if we stay on the current path, our growing debt could cost us jobs and do serious damage to the economy. More of our tax dollars will go toward paying off the interest on our loans. Businesses will be less likely to open up shop and hire workers in a country that can’t balance its books. Interest rates could climb for everyone who borrows money – the homeowner with a mortgage, the student with a college loan, the corner store that wants to expand. And we won’t have enough money to make job-creating investments in things like education and infrastructure, or pay for vital programs like Medicare and Medicaid.”  President Obama, July 25, 2011
Here he appeals to our fear of the unknown, leading us to conclude that if we don’t reduce the deficit now we will pay dearly tomorrow.  This passage is especially troubling given its blatant disregard for the truth.  The federal government is not a household -  he has yet again committed the classic fallacy of composition.  The public debt is not analogous to Joe the Plumber’s Visa card.  Not even close.  In fact, they are pretty much opposite each other:  public debt is private savings, while credit cards are tools for private sector deficit spending.  From there, he tries to convince us that as deficits increase more of the spending pie will go towards debt service.  Sure, if the economy does not grow with the deficit that might be the case. 
 
So what?  Well, the connection he is hoping we’ll make is that this will eventually leading to exploding deficits and increasing interest rates.  He seems to forget that we have a sovereign currency, and we spend by crediting bank accounts regardless of the sentiment of the bond market.  We decide how much to pay in interest, not bond vigilantes.  And he finishes the argument by asserting that we will not “have enough” money to pay for Medicare and Medicaid, which is patently false.  To pay for those programs you simply credit the bank accounts of recipients.  The money does not exist before that transaction, so it is nonsense to suggest you can ever lack the funds to make the payments.  Of course, you can fail to make the keystrokes necessary to initiate the transaction, but that is not insolvency only political failure.
Up until now, I’ve been inclined to give Obama the benefit of the doubt.  I figured that while he does not seem to understand how the modern economy functions, at least he is in earnest over his deficit fears.  After all, he has surrounded himself with advisers that lack the insight to make effective policy recommendations so why should he know any better?  But, as Dean Baker points out he is apparently unaware of the actual size of the deficit, a matter which he has chosen to make the central pillar of his four years in the Oval Office.  In a gaffe, the president claimed that he inherited a deficit that was approaching $1 trillion for his inaugural year, while the CBO’s projections placed it at the much lower figure of $198 billion. 
That’s a little too wide of the goalposts for my comfort, and it leads me to speculate whether or not he really believes his own rhetoric.  After all, if you desperately want to convince Americans that hacking away at the social safety net is a good idea, you would think you’d have your facts straight.  If he really believes the deficit is too large, then you wouldn’t you think he would know just how large it is?

Unless, of course, you let slip those kind of statements on purpose.  Inheriting a trillion dollar budget deficit from your predecessor sounds a lot more urgent than a couple billion.  And if you want to convince your constituency to roll over and accept cuts in the very programs that have been core to the Democratic party for the better part of a century, you had better be sure to make them believe those cuts to be absolutely necessary.

We Can Still Do Big Things

By Mitch Green

President Obama is fond of reminding us that, as Americans, we can still do “big things.” Indeed we can do big things, but will we? At a passing glance, in a moment’s earshot, the President’s sentiment seems encouraging. That is, until you appreciate the extent to which he has committed himself to applying that rhetorical device to the task of large-scale deficit reduction. To those left sane after watching the debt ceiling theatrics, or those lucky few immune to the mind numbing aspects of it all are scratching their heads wondering why on earth the President has chosen this task as his “big thing,” rest assured you are not alone. Perhaps the President has read Fight Club too many times and believes that pushing the US economy to the brink of self-destruction is a good thing. While it’s a good book, and far from Palahniuk’s best work, I’d remind the president that it wasn’t supposed to be taken literally. Whatever his reasons, I think there are better “big things” out there that we might set out to achieve. Other things that actually improve the conditions of our lives, not roll them back.

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