Taibbi on the recession
An awesome article by Rolling Stone’s Matt Taibbi (thanks to Eric Baum for fowarding).
Economic Realities Are Killing Our Era of Fantasy Politics
A few weeks back, I got a call from someone in the office of Vermont Senator Bernie Sanders. Sanders wanted to tell me about an effort his office had recently made to solicit information about his constituents? economic problems. He sent out a notice on his e-mail list asking Vermont residents to “tell me what was going on in their lives economically.” He expected a few dozen letters at best — but got, instead, more than 700 in the first week alone. Some, like the excerpt posted above, sounded like typical tales of life for struggling single-parent families below the poverty line. More unnerving, however, were the stories Sanders received from people who held one or two or even three jobs, from families in which both spouses held at least one regular job — in other words, from people one would normally describe as middle-class. For example, this letter came from the owner of his own commercial cleaning service:
My 90-year-old father in Connecticut has recently become ill and asked me to visit him. I want to drop everything I am doing and go visit him, however, I am finding it hard to save enough money to add to the extra gas I’ll need to get there. I make more than I did a year ago and I don’t have enough to pay my property taxes this quarter for the first time in many years. They are due tomorrow.
Why we’re in trouble (after the jump:)
Our economic reality is as brutal as it is for a simple reason: whether we like it or not, we are in the midst of revolutionary economic changes. In the kind of breathtakingly ironic development that only real life can imagine, the collapse of the Soviet Union has allowed global capitalism to get into the political unfreedom business, turning China and the various impoverished dictatorships and semi-dictatorships of the third world into the sweatshop of the earth. This development has cut the balls out of American civil society by forcing the export abroad of our manufacturing economy, leaving us with a service/managerial economy that simply cannot support the vast, healthy middle class our government used to work very hard to both foster and protect. The Democratic party that was once the impetus behind much of these changes, that argued so eloquently in the New Deal era that our society would be richer and more powerful overall if the spoils were split up enough to create a strong base of middle class consumers — that party panicked in the years since Nixon and elected to pay for its continued relevance with corporate money. As a result the entire debate between the two major political parties in our country has devolved into an argument over just how quickly to dismantle the few remaining benefits of American middle-class existence — immediately, if you ask the Republicans, and only slightly less than immediately, if you ask the Democrats.
July 22nd, 2008 at
A nice piece of leftist horse caca. Whenever I read a quote from a politician like this: “In real ways we’re becoming more like a third-world country.” I tune out.
Does Bernie Sanders even know how to define a third world country vs. a first world country? From nationsonline.org, if anyone cares to educate themselves:
“Third World Countries in Terms of Poverty
The world´s most impoverished countries.
The least developed countries (LDCs) are a group of countries that have been identified by the UN as “least developed”.
United Nations used the following three criteria for the identification of the LDCs
1. a low-income estimate of the gross national income (GNI) per capita. - based on a three-year average estimate of the gross national income (GNI) per capita (under $750 for inclusion, above $900 for graduation).
2. their weak human assets and
3. their high degree of economic vulnerability.
There are 50 countries listed in the United Nations comparative analysis of poverty, 34 African countries, 10 Asian countries, 5 Pacific Island Nations and one Caribbean nation.”
So for a third world country you have a GNI of $750/person/year. Anyone want to take a guess at what the GNI of the US is? Remember Bernie Sanders says we are becoming like a third world country:
“Top 10: First World Countries in terms of their Gross National Income
The GNI based on purchasing-power-parity (PPP) per capita in int’l Dollars.
# Country Region GNI per Capita
1 Luxembourg Western Europe $66,821
2 Norway Northern Europe $41,941
3 United States North America $41,557″
Ok, some may say I’m a greedy capitialist pig, who cares only about such arcane measures as GNI per capital. Fine, same source, different economic measure the Human Development Index (HDI).
The HDI measures the average achievements in a country in three basic dimensions of human development:
1. A long and healthy life - as measured by life expectancy at birth.
2. Knowledge - as measured by the adult literacy rate (with two-thirds weight) and the combined primary,secondary and tertiary gross enrolment ratio (with one-third weight).
3. A decent standard of living - as measured by GDP per capita* (PPP US$).
Below the list of 10 countries with the highest Human Development Index (HDI)
1 Norway
2 Sweden
3 Australia
4 Canada
5 Netherlands
6 Belgium
7 Iceland
8 USA
9 Japan
10 Ireland
I don’t know which is worse, Bernie’s ignorance, or his insult to those nations in the world that face real challenges to reach even the most basic levels of human existence.
Don’t give me this left wing bullshit about this nation being some third world country. The United States has a standard of living which is the very envy of the world. People from real, true third-world nations risk their lives to have a shot at participating in the American system. Somehow the people that flood our country for the world’s poorest nations manage to make it here, finding creative ways to not only just survive but thrive in the United States.
July 22nd, 2008 at
I love getting your blood up. Some great research there!
July 22nd, 2008 at
Mr. Hazard:
You stoop to polemic and sophomoric arguments. Taibbi’s point is that political discourse is largely oblivious to a worsening recession.
He was not attempting to say the U.S. has become a third-world country according to U.N. standards. Look at the broader statement that the middle class is disappearing. An encyclopedic definition of global poverty is beside the point. Christ, man!
July 22nd, 2008 at
Elwood,
I merely responded in the same manner as the piece was written in. When Taibbi uses phrases such as “cut the balls out of American civil society,” and “befouled anus” in order to get a rise out of fuck-the-government 18 year-olds, then yeah, I think I’m entitled to some artistic license with my choice of language as well.
Here’s my point. I disagree with the fundamental points in the article. I believe it is irresponsible journalism in its finest form.
For starters, Taibbi interviewed one source; Bernie Sanders, the infamous socialist Senator from Vermont. Sanders benefits the more the capitalistic system fails. So I would apply the old journalist adage in anything Sanders says, “consider the source.” Is it too much to ask for him to interview someone else if he’s going to do a broad piece how “whether we like it or not, we are in the midst of revolutionary economic changes.”
But rather than caution, or even journalistic challenging of broad assertions, Taibbi takes every Sanders says at face value. In the process, he prints a lot of incorrect information. Not misleading, which this entire story is, but incorrect.
First, is Sanders’ insulting quote about the third world. And Taibbi, through inclusion of that quote in a select manner, believes the exact same thing. As I previously pointed out this is flat out incorrect.
Next was this ridiculously confusing part about FQHC:
“The Senator claims that he has been trying for years to increase funding for the Federally Qualified Health Care (FQHC) program, which finances community health centers across the country that give primary health care access to about 16 million Americans a year.”
See Sanders doesn’t offer why he is trying to increase funding, and Taibbi doesn’t attempt to challenge him either. Here’s a few basic questions, which need asking before accepting Taibbi arguments. Does the FQHC program need additional funding? If so, for what? Are the services for which additional funding is being requested necessary for basic levels of health care, or are they of a more elective nature? Where does the $798 million increase number come from? And was the $250 million increase in funding the program sufficient?
Rather, Taibbi attempts to rile you up with contradictory phrases such as “but Bush vetoed the legislation, ‘and we ended up getting a lot less.’” What does that mean? If Bush vetoed the legislation, wouldn’t the program have received, by definition ZERO more dollars? Well apparently not. See, according to Sanders, the program did actually get an extra $250 million in appropriations.
Oh it gets better. Remember, Sanders was seeking a $798 million increase. He got an extra $250 million. So imagine my surprise when in the VERY NEXT paragraph, I read this little nugget: “In fact, the GAO report claims that over half of the spare parts currently on order for the Air Force — some $235 million worth, or about the same amount Sanders unsuccessfully tried to get for the community health care program last year.”
Um, excuse me, Sanders sought $798 million and he got $250 million. You just wrote it the paragraph before.
Then there’s this little gem from Taibbi.
“The Republicans wanted to take Social Security, the signature policy underpinning of the middle class, and put it into private accounts — which is a fancy way of saying that they wanted to take a huge bundle of American taxpayer cash and invest it in the very companies, the IBMs and Boeings and GMs and so on, that are exporting our jobs abroad.”
First, I love how he makes such broad statements as “The Republicans” as though it is physically impossible for him to conceive of the fact that someone with a (D) next to their name might actually have the smarts to allow for private accounts in Social Security.
Second, he’s flat out wrong. “The Republicans” did not have any design on take ALL OF SOCIAL SECURITY into private accounts. The Social Security accounts of those already drawing from it, and those of a certain age (I don’t know what age right now, so if you want to flame me for misinformation, go right ahead) were to remain untouched. Rather, than wanted to give certain younger workers the option of moving a portion of their social security into private accounts. Those private accounts would then have the option of investing in certain TREASURY BONDS. Equity investment, or corporate debt were never discussed as possible private account options. In other words, Taibbi is wrong.
Two more points of to contention before I hang it up:
“Now we have a new set of dire problems in the areas of home ownership and exploding energy prices. In both of these matters the basic dynamic is transnational companies raiding the cash savings of the middle class. Because those same companies finance the campaigns of our politicians, we won’t hear much talk about getting private industry to help foot the bill to pay for these crises, or forcing the energy companies to cut into their obscene profits for the public good.”
*Sigh* I just don’t even know where to begin. First, corporations, those evil bloodthirsty, GREEDY, good-for-nothing, only-looking-out-for-themselves, entities give a lot of money to the very programs that provide homes to the needy, and subsidies for fuel prices. They give to charities. This is an example of the private market filling in where the government is unable to. Or as Taibbi’s only source for this article said “Corporate America is going to have to reinvest in our society,” says Sanders. “It’s that simple.”
Sanders is incorrect. Corporate America ALREADY IS reinvesting in our society. They give to the arts, to education, to housing relief, to humanitarian efforts, to just about every conceivable cause out there. But this phenomenon is completely ignored by Taibbi.
Finally, and admittedly this is a pet peeve of mine, but Taibbi, what exactly qualifies as an “obscene profit?” How much is too much and who makes that determination? In 2007, Exxon Mobil had a profit margin of 7.6% of revenues. Guess what manufactures make: 5.8%. Take autos out of that number and manufactures earn a 9.2% profit margin.
These profits in turn go to create jobs and they go to the stock holders, many of which are pension funds and mutual funds. And most utility companies use a portion of those profits to provide energy to the less fortunate through their own subsidy programs. Again, they already are reinvesting in society.
So Elwood, challenge my research. Challenge the errors I point out in Taibbi’s column. But don’t trivialize my contentions. This article is riddled with errors and it is worthy of mockery.
July 22nd, 2008 at
Eric:
How many sources does Taibbi need to show that millions of people are in dire need? I’d elaborate, but it’s more effective to let you hang yourself with your own ridiculous and verbose argument.
July 22nd, 2008 at
Millions of people have always been in “dire need” and lived in oppressed misery throughout the ages. It is largely laissez faire capitalism that brought the common man out of this wretched state and established a middle class.
The massive unrelenting economic boom of the past 242 years in America has be fueled by the political and legal recognition that individual rights exist and the corollary institution of economic policies that defend and protect each individual’s right to keep the money that s/he earns.
There is little difference between my to life and my right to the money I earn. Take away my money and I am reduced to begging for sustenance from those petty dictators in government that hold the purse strings.
I’m sorry if it is hard to earn money. No one ever said it was easy. I’ve got one idea for you, stop blogging and get the fuck to work!
July 23rd, 2008 at
Elwood,
One would suffice, but he can’t get even that. All we know from this piece is there are 700 people in Vermont with time enough to write a letter to their Senator saying they are having a tough go of it.
So, here’s the rope. Where’s the nearest tree upon which I’m to hang myself?
July 23rd, 2008 at
Not close enough…
July 23rd, 2008 at
Paul, you bad man, you’ve written more than Elwood. I don’t think you can admonish him to work harder. And what an awful thing for a blogger to say! It’s like telling kids to get away from your ice cream truck because it will make them fat!
July 23rd, 2008 at
Elwood: the thing is, Eric’s a polemical UFC street fighter in the mold of Royce Gracie. He can spar, but he’s totally effective once he grabs you, brings you down to the mat and finds a way to cut off the air. It’s like following a snake into the brush: bad idea. Don’t fight him on his territory. You’ve got to stick with the larger point. Yes, Taibbi talks a lot of smack and his example is pretty blinkered.
However, I do not see any reason to deny that there ARE people in Vermont working multiple jobs who cannot afford gas. This IS a problem, even if they are above the UN-designated poverty line. Do we want Americans living like this even if they are partially responsible for getting into a bad situation? No! There has to be a solution.
In part, we will help them because it’s a self-interested thing. People too poor to buy gas have a greater incentive to engage in criminal activity, and they probably aren’t raising very well-adjusted children! What I always want to know is what would Eric have us do for them?
There will always be people handicapped in some way. When this handicap is mental, we tend to ignore it unless it is hugely pronounced. But what about the dumb people who can’t make as much as we well-fed city slickers? Do we leave them to burn firewood in their living rooms in the winter? Do we have any responsibility to protect them from themselves?
July 23rd, 2008 at
Hey, Dan Barry: any thoughts? You write about the downtrodden. Do you think we owe them something or are the cold hearted right wing libertarian invisible hand bastards right and life is nothing but shadows and dust, maximus, shadows and dust?
July 23rd, 2008 at
Josh: that is the most brilliant description I’ve ever had written about me. I’m going to replace my corporate bio with it.
The problem with asking me what I would do is that I don’t have all of the information. I can’t provide a solution based upon some anecdotal evidence written on rollingstone.com. And why do I have to provide a solution? Taibbi didn’t provide anything approaching a solution. He merely said we should get angry. Ok, check. Now what?
Merely, I was pointing out inconsistencies in the article and saying that if you are going to paint a doomsday scenario about “revolutionary economic changes” in this country, is it asking too much to do a bit a research? Perhaps ask some questions to economic experts. Dig into poverty statistics in the United States. Provide unemployment numbers. You know, make a case for change. Don’t just write angry posts about how unfair life is. Guess what, it’s unfair for everyone.
So I say this out loud, ask intelligent questions, point out inconsistencies, and what do I get? Some anonymous poster telling me I should go hang myself. Nice. Real mature. That’s definitely going to help folks out.
Some solutions are beyond the scope of the national debate Taibbi talks about. High property taxes need to be addressed in the state legislature. If the property tax burden is that bad, I would suggest moving to a lower tax state.
I only wish I had a solution to high fuel oil prices, then I could make the real money. But rather than offer a solution (cause I don’t have one) I might ask why people are consuming so much fuel and are they taking steps to reduce their fuel consumption. Are rural Vermonters driving compact fuel-efficient cars or are they driving SUVs. I don’t know, the article doesn’t say. If someone wants to visit their ailing father in Connecticut, but can’t because of fuel costs, have they looked into bus services? Perhaps there are other ways to get to your father that are more fuel efficient. Same for people needing medical services. Ask the hospital if they have a ride share program (here’s a hint: they probably do).
There were also some concerns about food. This I have a solution for. Vermont has a lot of rural property, let’s bring back agriculture. Encourage local farmers to grow crops for food consumption, not for fuel. Do this through a series of tax breaks and tax incentives. Then establish farmers markets for the grower to seller directly to the consumer. The food won’t have the same mark-up as the grocery store applies, people will be eating better, and it promotes the agriculture industry in the state. There will be a series of knock-on jobs with the growth of this industry.
For single mothers, I’d advise they consult WIC and similar state sponsored programs. The Vermont State Health Department can be a wonderful resource about programs available to those in poverty to care for their children. I’d also ask why the father isn’t involved in the child’s life. If they are deadbeats, the mother should collect child support.
There are a few ideas. Of course, it takes time to change some practices (particularly the bit about agriculture), but no one said change has to happen tomorrow.
July 23rd, 2008 at
Oh, Eric. You’re suggesting that problems are nuanced and that their solutions require hard work. For shame. You’ll never get elected to anything that way.