Sorry about last night’s post but these dip-dang ‘puter thingies don’t work for a damn without juice
In eastern Massachusetts, where the storm brought rain and high winds — but only a trace of snow — about 68,000 customers were without power Friday afternoon. There were also outages in parts of Pennsylvania, New Jersey and Vermont.
Talk about ‘can’t get your facts straight’ (probably because NYC is 200 miles SW of Boston) local sources put the number of affected customers north of 100,000 with some areas not expected to have service restored before Sunday.
Thankfully, service was restored here right about sundown.
Could I have posted last night? Probably, but I had to thaw out first!
Enough bitchin’ and cryin’ about local events, thanks to ‘Global Warming’, 49 states out of fifty are currently under a layer of…snow.
Looks like we’re all going to freeze to death before we fry! Which is a puzzler considering all of this arm waving and frantic screaming about ‘greenhouse gases’…Where is this so-called ‘greenhouse’ and how do we get there…cuz it’s freaking cold and getting colder!
But that ‘is what it is’, which is to say I won’t matter much if we fail to put civilization on a sustainable track. More than just the weather will suck if we don’t stop the ‘status quo’.
Thus do we arrive at tonight’s first offering (a piece selected for it’s central premise rather than it’s, er, ‘ideological slant’.)
Finger on the Scale
By Patrick J. Deneen 23 February 2010
It’s often asked by more practical-minded readers “so what’s the point”? What is to be done? After all the theory, what practical recommendations can FPR offer by way of encouraging “limits, place, liberty”? [As hinted at above, the ‘ideological slant’ here appears to be Libertarian.]
An article in this past Sunday’s “Outlook” section of the Washington Post offered a glimpse into one issue that would go a long way toward the restoration of localities and certain attendant virtues in American life today. Barry Lynn of the New America Foundation (a left-center technophiliac think tank) and author of Cornered: The New Monopoly Capitalism and the Economics of Destruction, authored a lead article in Sunday’s Washington Post noting the precipitous decline in small-scale business ownership in America over the past thirty years. In a lament that could easily be found elsewhere on FPR, he wrote,
Where the independent pharmacist counted pills, we see a CVS employee. Where family livestock farms dotted the landscape, we see immense operations run by Smithfield and Tyson. Where the buttonmakers of New York and Los Angeles sold their wares, we see the imported products of Li & Fung. Where our community bank stood, we see Bank of America. Where the local grocer marketed local fruit, we see Wal-Mart. Where the local general-merchandise store stacked jeans, we see, well, Wal-Mart again.
Lynn notes several pieces of data that focus the mind: America is second-to-last among the world’s 77 richest nations (only leading Luxembourg) in small-business ownership, and over the past 50 years, self-employment in non-farm businesses has fallen by 50 percent.
Writes Lynn,
Ask an economist why so many small businesses have given way to giant chains, and you’ll hear a lecture on the dynamics of capitalism and free markets, and how the creative destruction of small, independent businesses is a natural and benign process. Yet specific political moves and decisions in Washington over the past several decades have made it much easier for the people who control large-scale corporations to displace small proprietors. [As you can see, we are hearing the argument for ‘capitalist utopia’ being made once again…and as I have pointed out repeatedly, capitalist utopia can’t exist for one reason…market share, there isn’t enough of it to supply us all with ‘perpetual positive cash flow’.]
Lynn goes on to discuss some specific political policies that will doubtless make some on the Right cringe, including lax enforcement of Anti-trust measures. He also offers a dubious evaluation of the role of “populists” in the FDR and Truman administration in their embrace of centralization of economic power (I’d need to hear more about his definition of the word “populist”.) I’d counter that, according to Amity Schlaes in her fine book The Forgotten Man, it was New Deal policy that systematically favored big business over small scale ownership. FDR and his brain trust realized that it was much easier to regulate big private entities, and big private entities came to realize that burdensome regulation actually gave them competitive advantage. Since large-scale operations could use efficiencies of scale and simple bigness to comply with red tape, while enjoying healthy access in the process of the writing of regulation. [Um, ‘admiring’ Amity Schales is a half a step from adoring Ayn Rand. But we already know ‘Libertarian’s’ want liberty for them and only them…just as Ayn Rand ‘worshiped’ the mythical ‘rugged individual’. A world without grunts is a world where you do EVERYTHING for yourself. Not just a little of everything…ALL of everything! Which begs the question…just how thin can you spread yourself? Add to that ‘How many things are you an expert in?’]
But, one aspect of Lynn’s analysis rings particularly true: in the 1980s, “instead of protecting competitive markets, Reagan officials said they would use anti-monopoly laws to promote ‘consumer welfare,’ which they defined largely as lower prices. It no longer mattered how much power was consolidated, as long as the consolidation appeared to result in the delivery of less-expensive goods.” [Geez, everybody picks on Saint Ronnie! I wonder why?]
We have seen the aftermath of these policies: the destruction of small businesses throughout America, and a corresponding economic crisis in which disconnection, irresponsibility, and the decline of accountability fostered bad behavior throughout the American economic system. As William O. Douglas wrote (cited by Lynn), “When independents are swallowed up by the trusts and entrepreneurs become employees of absentee owners,” [the result] “is a serious loss in citizenship. Local leadership is diluted. He who was a leader in the village becomes dependent on outsiders for his action and policy.” [Let’s not ‘lionize’ the swindlers when the problem rests with income streams and the ‘pauperization of producers’.]
For FPR sympathizers with a policy interest, this is one area needing sustained attention and examination and specific policy recommendations. It is an issue over which both Left (e.g., Lynn) and at least some on the Right can agree, even if specific policy recommendations are likely to be debated. However, perhaps it would not be too difficult to begin looking at systematic ways in which current policy supports concentrated economic power, and to begin its dismantling. It may also be that Government needs to be more active in enforcing anti-trust measures. The Republican orthodoxy will scream that such activity is an intrusion of “Gummint,” but it’s clear that Gummint has already intruded in this area, and is doing tremendous damage to the fabric of the nation (the Republican orthodoxy’s ecstasy in the wake of the recent Supreme Court decision that ensures unlimited corporate participation in our electoral process does not inspire confidence about their motives.) Perhaps some log-rolling is in order: in exchange for a serious consideration about the disproportionate impact of regulation on differently scaled businesses, a sustained look at anti-trust enforcement could be considered. Or, more creatively still, legislators should read Allan Carlson’s Third Ways, and specifically his chapter on Chesterbelloc, for some innovative ideas on how to protect individually-owned businesses from the depredations of concentrated private power. We will differ even here on how much of a role the Gummint should have in tipping the scales, but it’s quite clear that the scales have already been considerably tipped, and that American towns, citizenship, and virtue have all suffered as a result – and that finally cheap prices are too high a price to pay.
Um, start agitating for unions and watch these people have a nutty!
Worse, the reason ‘big box stores’ kick the ass of the small retailer is price…Um, calling it ‘Anti-Trust’ would cheat the consumer out of the advantage of lower prices due to aggregate demand.
Pop’s corner store has to operate on a considerable mark-up so that he can earn a living off of the few things you buy from him over time. Worse, if more than one store opens up in the same community dealing in the same (general) product…one of them is eventually going to go out of business…because of ‘insufficient market share.’
The ‘solution’ is not to expand the size of the ‘privileged few’, the solution lies in ensuring everybody has a way to support themselves, which also allows them to interact with their community.
There’s more to a job than just a paycheck.
So we arrive at tonight’s second offering
Pictures of a Market Crash: Beware the Ides of March, And What Follows After
[purloined from: Jesse’s Crossroads Café]
There are a fair number of private and public forecasters that I know who anticipate a significant market decline in March.
Let's review where we are today.
The Bear Market of 2007-2009, marked by the Crash of 2008, was a massive decline in equity prices precipitated by the bursting of the credit bubble centered around housing prices and packaged debt obligations of highly questionable valuations.
Even today, I think most people do not appreciate the sheer magnitude of the decline, and the damage it has done to the real economy. This is the result, I believe, of three factors:
1. An extraordinary expansion of the Monetary Base by the Federal Reserve not seen since the aftermath of the Crash of 1929, and a swath of financial sector support programs from the Fed and the Treasury, resulting in a spectacular fifty percent retracement from the bottom. [What’s so spectacular about it, you might ask? Trillions were spent and we’ve got next to nothing to show for it!]
2. A comprehensive program of perception shaping by the government in conjunction with the financial sector to raise consumer confidence and prevent a further panic.
3. An understandable preoccupation with the details of breaking news, and a short term focus on particular events and even exogenous controversies, without a true appreciation of the 'big picture,' in part because of some very effective public relations campaigns.
This is resulting in a remarkable case of cognitive dissonance in which the victims of a spectacular man made calamity are opposing remedies and aid as too costly, as they walk around bleeding in the carnage.
For those who read the contemporary literature in the early Thirties, this is nothing new. In the early Thirties there was no sense of the magnitude of what had happened, except for a few notable exceptions, and the sense of 'life goes on' seems almost eerie to a modern reader. Indeed, Herbert Hoover could dismiss a delegation of concerned citizens with the advice that they were too late, the crisis was past.
The parallels with the Thirties and the Teens (today) are many, and uncanny.
There is the reformer President, elected to redress the policies of his Republican predecessor. In the Thirties they had FDR who was a decisive and experience leader. In the Teens the US has a community organizer much more in the sway of the Wall Street monied interests, who is trying to work through indirection and persuasion. [Ironic that this is a fair description of both Barrack Obama AND Woodrow Wilson…]
There is a Republican minority in the Congress which opposes all new programs and actions in both cases. In the Thirties they were over-ridden by a powerful President, who created a "New Deal" set of legislation, much of which was later overturned by a Supreme Court which had been largely selected by the previous Republican Administrations.
Indeed, the remaining New Deal programs that were successful, the reforms of Glass-Stegall and the safety net of Social Security, are being overturned and are under attack in an almost bucket list fashion.
So what next?
Another leg down in the economy and the financial markets is a high probability. [Followed shortly thereafter by some serious bloodshed.]
Although one cannot see it just yet in the fog of corrupted government statistics, the economy is not improving and the US Consumer is flat on their back.
There are still far too many otherwise responsible people who are not taking the situation with the high seriousness it deserves. They would like to see the US economy collapse, inflicting serious pain and deprivation because it may:
1.suit their investment positions and feed their egos,
2. satisfy their philosophical and emotional needs to see punishment administered, almost always to others, for the excesses of the credit bubble, even if they are unwitting victims, and/or
3. the sheer nastiness and immaturity of a portion of the population.
They know not what they do, until they do it, and see the results. It is often a good bet to assume that people will be irrational, almost to the point of idiocy and self-destruction. And some of them never wake up until they are overrun, and then will not admit their error out of a stubborn sense of pride and embarrassment.
There most likely will be a new leg down in the financial assets, as reality overcomes often not-so-subtle propaganda. It may start in March, or we may just see a 'market break' that provides a subtle warning for a large decline to begin in October 2010, with a multi year progression to lows that are as of now almost unimaginable, at least in real terms. [The Dow should be under 1,000…we don’t make anything anymore!]
The Fed is acting in a way so as to mask quite a bit of this. One would hope that they would not re-enact the policy error of their predecessors and raise rates prematurely out of fear of inflation. [Chances are they will have no choice but to raise rates, stiffly.]
But the error might be emulated by a failure to stimulate the economy effectively and reform the highly inefficient and impractical financial system. The global trade system is a farcical construct that favors a few national elites and multinational corporations. Public policy discussion has been trumped by a handful of economic myths and legends that, even though disproved every day, nevertheless remain resilient in public discussions and reactions.
A more serious market crash might cause people to recognize the severity of their problems, and the thinness of the arguments of the monied interests for the status quo which is most clearly unsustainable.
The outcome is difficult to predict precisely because there are multiple paths that events might take at several key decision points, and some of them might be rather disruptive and upsetting to civil tranquility.
But as the dust continues to settle, the probabilities will continue to clarify.
Well executed by the inestimable Jesse!
Thanks for letting me inside your head,
Gegner
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