Daily Archives: April 30, 2012

The Astonishing Case of the Impenetrable Zero Bound

By Dan Kervick

In a small, peaceful town there once lived three people: Abbie, Baker and Carlie.

Abbie was a very wealthy aristocrat, and also a philanthropist.  Her fortune and position in the town were the fruit of the hard work of her ancestors, but her life was dedicated now only to managing that fortune.  She lived to make the common people of the town happy, especially Carlie, who was her personal favorite.

Baker was much more selfish, and looked out for his own interests.  He wasn’t terrible and mean, just obstinately self-interested.  It seems he was born that way; it was in his DNA.

Abbie frequently lent money to Baker, and Baker frequently lent money to Carlie.  But in accordance with the ancient and venerable laws of the town, enacted to maintain a decorous distance between the aristocrats and common people, Abbie was forbidden from loaning money directly to Carlie.  Nevertheless, Abbie was usually able to help out Carlie indirectly when necessary.  She found that when she lent money to Baker, Baker was sometimes more willing than before to lend money to Carlie.  And if Abbie loaned the money to Baker at lower rates of interest than previously, Baker would usually reduce the rate of interest he charged Carlie in turn.

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May Day: The Real Meaning

By John F. Henry

In the United States, the real meaning of May Day has been largely forgotten. To be sure, there is a “Labor Day,” a time for picnics and various festivities, but May 1 has been converted—not without reason and not without malice—into “Law Day.” In 1921, following the Bolshevik Revolution of 1917, May Day was renamed “Americanization Day.” In 1958, May Day became “Loyalty Day,” and later that year, President Eisenhower proclaimed May 1 “Law Day.”

What a travesty, and what a repudiation of the original May Day, a day that should be remembered and celebrated by all those who labor for a wage or salary.

May Day celebrates the struggle—long and often bloody—for the 8-hour day. While this now seems remote and rather archaic, in the 19th century, the 8-hour day was a rallying point for the vast majority of workers who put in 10, 12, or more hours per day, six days a week.

On May 1, 1886, more than 300,000 workers across the United States shut down the machines and walked off their jobs in the first May Day celebration in history. In Chicago, 40,000 went on strike with socialists and anarchists in the leadership. More workers continued to strike until the numbers grew to nearly 100,000. Two days later, violence broke out at the McCormick Reaper Works, an aggression precipitated by Chicago police, acting in the interests of McCormick, a notable capitalist of the day.

For months, police and Pinkerton agents beat and attempted to intimidate picketing workers. A rally was called in Haymarket Square. Someone, we still don’t know who (possibilities include a disgruntled worker or police agent), threw a bomb and all hell broke loose. In the aftermath of the ensuing melee, anarchist leaders were arrested and charged with the crime—though most were not even present when the bomb was thrown. Albert Parsons, August Spies, Samuel Fielden, Oscar Neebe, Michael Schwab, George Engel, Adolph Fischer and Louis Lingg were arrested and convicted of murder. On November 11, 1887, Parsons, Spies, Engel and Fisher were hanged. Louis Lingg ostensibly committed suicide.

In 1890, the Second International declared May Day as an international celebration to commemorate the “Haymarket Martyrs” and to continue the fight for the 8-hour day. There was a time when tens of millions of workers walked off the job in international solidarity. Indeed, in the 1930’s “a million” walked Fifth Avenue to demonstrate their opposition to the prevailing economic system.

It is time, indeed, past time, to reclaim May 1 as International Workers Day. Workers in the US, whether miners, factory operative, clerks, teachers, civil servants, need to join others throughout the world to help galvanize a renewed movement to assert their rights, to demand their economic well-being, to claim simple justice. It is time to say, “Enough!” The monied “1 percent” has been in the uncontested driver’s seat long enough. Let us return to the days of labor militancy, of labor democracy. Let’s restore May 1 as the real May Day. As Mother Jones would have it: “Pray for the dead; fight like hell for the living.”

For further reading, see the short but insightful Philip Foner, May Day. (New York: International Publishers, 1986)

Geithner channels Greenspan and Airbrushes Fraud out of our Crises

By William K. Black

On April 25, 2012, Treasury Secretary Geithner made remarkable statements about the role of elite financial fraud and greed in producing our recurrent, intensifying financial crises.  In this first installment I focus on the first of five problems with Geithner’s claims: (1) he does not understand the causes of prior crises, (2) he does not understand the causes of the ongoing crisis, (3) he does not understand that if he were correct about the first two points our nation would be in even greater peril and the urgency of Geithner leading a radical transformation of finance and regulation would be greater still, (4) he is not correct that we are prosecuting the elite criminals who drove the ongoing crisis, and (5) the media continues its nine-year pattern of failing to challenge Geithner’s fictions and his failures to lead the radical transformation that he should be desperately seeking given his stated beliefs about the causes of financial crises.

Here are the specifics of what Geithner said about financial crises, fraud, and greed.

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The Dutch Left’s Embrace of the Austerity Suicide Pact: It’s Necessary for the Children!

By William K. Black

A remarkable, and terrible, thing has just taken place in the Netherlands of which few Americans are aware.  The ruling Dutch political coalition collapsed when the ultra-right wing party (the Freedom Party, led by Geert Wilders) refused to support its coalition partners’ austerity package (calling for tax increases and reduced government expenditures).  Wilders is best known for his opposition to Islamic immigrants but is developing a new following based on his Euro skepticism. The core parties of the governing coalition were Mark Rutte’s VVD party and the Christian Democrats (CDA).

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