Labor Day: Struggles of the Great Recession with a lot of Depression

Good Morning!

I certainly hope this Labor Day is being kinder to you than me.  I am struggling without air conditioning for the third day in a row and it’s not pleasant.  Hopefully, by this time tomorrow relief will be on the way in the form of a new condenser.  After being totally fleeced by the same people who sold me all these units to begin with a week ago, my long time bestie from Virginia Beach found a great guy who has found mercy in his small business owning heart to deal me a deal and do it right.  I am scrambling right now for the money because I do know it is a deal and AC is the one thing you cannot be without in the deep south. I would like to say that the kindness of people still does exist in abundant quantities when you deal with people and not with those enslaved to corporations.  BostonBoomer is holding me together after I decided to emotionally quit my relationship as are several other friends and family members.  I have spent the last few weeks being pretty miserable without adding this big headache on top of everything.  But again, I just would like to say that if you cultivate friends and real people, the rewards will be ongoing.  You always find out who cares about you when troubles are beating down your door.  Some times you give a lot away and it doesn’t come back to you from quite the same place.  It comes back from the quiet work of day-to-day life and relationship building and the kindness shown to others who pay it forward.   I am sending very hot but very sincere blessings out to every one today.  Life can turn on a dime.

Bill Moyer’s Essay on “The End Game for Democracy” is the one thing I really think you should listen to or read this morning.  It has the feel of a sermon and a populist political meeting rolled into one.

We are so close to losing our democracy to the mercenary class, it’s as if we are leaning way over the rim of the Grand Canyon and all that’s needed is a swift kick in the pants. Look out below.

The predators in Washington are only this far from monopoly control of our government. They have bought the political system, lock, stock and pork barrel, making change from within impossible. That’s the real joke.

Sometimes I long for the wit of a Jon Stewart or Stephen Colbert. They treat this town as burlesque, and with satire and parody show it the disrespect it deserves. We laugh, and punch each other on the arm, and tweet that the rascals got their just dessert. Still, the last laugh always seems to go to the boldface names that populate this town. To them belong the spoils of a looted city. They get the tax breaks, the loopholes, the contracts, the payoffs.

They fix the system so multimillionaire hedge fund managers and private equity tycoons pay less of a tax rate on their income than school teachers, police and fire fighters, secretaries and janitors. They give subsidies to rich corporate farms and cut food stamps for working people facing hunger. They remove oversight of the wall street casinos, bail out the bankers who torpedo the economy, fight the modest reforms of Dodd-Frank, prolong tax havens for multinationals, and stick it to consumers while rewarding corporations.

We pay. We pay at the grocery store. We pay at the gas pump. We pay the taxes they write off. Our low-wage workers pay with sweat and deprivation because this town – aloof, self-obsessed, bought off and doing very well, thank you – feels no pain.

The journalists who could tell us these things rarely do – and some, never. They aren’t blind, simply bedazzled. Watch the evening news – any evening news – or the Sunday talk shows. Listen to the chit-chat of the early risers on morning TV — and ask yourself if you are learning anything about how this town actually works.

Another equally good essay from Jonathan Holland at the same adress is “A Plutocracy Ruled By Self-Centered Jerks”.  (This one’s for you BB)

Two studies released last week confirmed what most of us already knew: the ultra-wealthy tend to be narcissistic and have a greater sense of entitlement than the rest of us, and Congress only pays attention to their interests. Both studies are consistent with earlier research.

In the first study, published in the currentPersonality and Social Psychology Bulletin, Paul Piff of UC Berkeley conducted five experiments which demonstrated that “higher social class is associated with increased entitlement and narcissism.” Given the opportunity, Piff also found that they were more likely to check themselves out in a mirror than were those of lesser means.

Piff looked at how participants scored on a standard scale of “psychological entitlement,” and found that those of a high social class — based on income levels, education and occupational prestige — were more likely to say “I honestly feel I’m just more deserving than others,” while people further down the social ladder were likelier to respond, “I do not necessarily deserve special treatment.”

In an earlier study, published last year in the Proceedings of the National Academy of Sciences, Piff and four researchers from the University of Toronto conducted a series of experiments which found that “upper-class individuals behave more unethically than lower-class individuals.” This included being more likely to “display unethical decision-making,” steal, lie during a negotiation and cheat in order to win a contest.

In one telling experiment, the researchers observed a busy intersection, and found that drivers of luxury cars were more likely to cut off other drivers and less likely to stop for pedestrians crossing the street than those behind the wheels of more modest vehicles.  “In our crosswalk study, none of the cars in the beater-car category drove through the crosswalk,” Piff told The New York Times. “But you see this huge boost in a driver’s likelihood to commit infractions in more expensive cars.” He added: “BMW drivers are the worst.”

Summing up previous research on the topic, Piff notes that upper-class individuals also “showed reduced sensitivity to others’ suffering” as compared with working- and middle-class people.

So let me dally about in my own area and The Economist’s Club at Project Syndicate where Mohamed A El-Arian reminds us that we’re approaching the fifth year anniversary of the Lehman death rattle.  The essay is about their morbid legacy.

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I hope that we will also see another genre: analyses of the previously unthinkable outcomes that have become reality – with profound implications for current and future generations – and that our systems of governance have yet to address properly. With this in mind, let me offer four.

The first such outcome, and by far the most consequential, is the continuing difficulty that Western economies face in generating robust economic growth and sufficient job creation. Notwithstanding the initial sharp drop in GDP in the last quarter of 2008 and the first quarter of 2009, too many Western economies have yet to rebound properly, let alone sustain growth rates that would make up fully for lost jobs and income. More generally, only a few have decisively overcome the trifecta of maladies that the crisis exposed: inadequate and unbalanced aggregate demand, insufficient structural resilience and agility, and persistent debt overhangs.

The net result goes beyond the weak growth, worsening income inequality, high long-term unemployment, and alarming youth joblessness of the here and now. Five years after the global financial crisis, too many countries are being held back by exhausted and out-dated growth engines. As a result, prospects for a rapid, durable, and inclusive economic recovery remain a serious concern.

Given this harsh reality, it is not surprising that the second previously unthinkable outcome concerns inadequate policy responses – namely, the large and persistent imbalance between the hyperactivity of central banks and the frustrating passivity of other policymakers.

The big surprise here is not that central banks acted decisively and boldly when financial markets froze and economic activity plummeted. Given their relatively unrestricted access to the printing press and their high degree of operational autonomy, one would expect central banks to be active and effective first responders. And they responded in an impressive and globally coordinated fashion.

What is surprising is that, five years after the crisis, and four years after disrupted financial markets resumed their normal functioning, Western economies still overwhelmingly rely on central banks to avoid even worse economic performance. This has pushed central banks away from their core competencies as they have been forced to use partial and imperfect policy tools for quite a long time.

This outcome reflects domestic political polarization in the United States and the complexity of regional interactions in Europe, which have blocked comprehensive and balanced policy approaches. To appreciate the extent of the problem, consider the repeated failure of the US Congress to pass an annual budget (let alone deliver medium-term reforms) or incomplete eurozone-wide initiatives at a time of alarming unemployment and residual threats of financial disruptions.

Such political dysfunction has undermined the responsiveness of other policymaking entities, including those that possess better tools than central banks. This has compelled central bankers to remain in the policy forefront, building one bridge extension after another as they wait for other policymakers to get their act together. The result has been to expose Western economies to ever-more experimental measures, with considerable uncertainty about the longer-term impact of operating sophisticated market-based systems on the basis of artificial constructs.

This is something to reflect up as Congress returns in a few weeks to tell us that it’s the deficit or high taxes on businesses and the rich that have created our current problems.  Nothing could be further from the truth.

One last item to share.  This is from the Boston Globe Book Review.  It will give you something to think about this Labor Day.  I give you the link to Katherine Whitmore’s review “A More Perfect Union.”

The state of the union is not good. Organized labor has been “reduced to a whisper of its former greatness,” admits author Phillip Dray. “No one can divine or guarantee its future,” he adds, “but we can know its past.” And what an inspiring, doleful, and switchbacking past that is. Dray’s wonderful “There Is Power in a Union: The Epic Story of Labor in America”(Anchor, 2011) pans back to explain the original sin that made America less receptive than other Western countries to unions; we were a capitalist power before we had a countervailing strong central government. The deck was stacked for business here, but things played out quite differently in older First World nations. Note the modern results: in Sweden, 67.5 percent of workers are unionized, in Belgium 50.4 percent, and in Ireland 31.2 percent.

In the United States, we live in an especially anti-union climate now, partly because we’ve shot from a factory economy to a finance and service economy, partly because (as Dray admits) labor has sometimes been “its own worst enemy.” Many unions were historically harsh to minorities and women, for instance, or sank into appalling corruption (see Hoffa, Jimmy). But Dray asks us to strip down to fundamentals: In a country founded on the concept of checks and balances, surely unions make inherent sense. Who else can stand up to The Man?

This inherency, in fact, crystallized in the late-19th-century term “industrial democracy,” meaning that democracy is only authentic if it infuses our work lives as well as our civic lives. For isn’t the pursuit of happiness a farce if you work for slave wages, in unsafe conditions, with no security? Steps forward and steps back, of course: Dray pistons through the big turning points, from the disaster of Chicago’s Haymarket bombing of 1886, for which four labor activists were hanged, to the breakthroughs of United Mine Workers president John L. Lewis (the “stormy petrel of labor”) and the National Farm Workers founder Cesar Chavez. The Chavez material is remarkable. I never knew, for instance, that Southern pols would only pass 1935’s union-friendly Wagner Act if it excluded migrant workers. Or that antagonistic California farmers actually crop-dusted grape pickers during the 1960s protests.

I have spent a lot of time recently listening to my father who turns 90 in a month as he has begun to reflect on many things.  Recently, he is worried a lot about the world he’s going to leave behind.  He has decided that Al Gore is right and that global warming is real and a serious problem.  He doesn’t like any of the political parties and thinks that they are destroying the many great things he know about this country.  These are strong words coming from a dustbowl Okie who also flew bombing missions over Germany during World War 2.  He thinks that all of us will make out.  But, he worries about the country at large and wonders if Congress will nab his medicare or social security.  He started paying the first day you could pay into social security so he is truly vested in the program.  I tell him not to worry that he’s done his part on everything and just relax.  But I can’t say that I don’t feel the same way whenever I watch the news.  We really need to take some time today to think about the ways we can reclaim the great things about our heritage.  We should tend to our Victory Gardens, so to speak, and find pleasure in the last bits of summer.

Whatever our labor may be today, may it be at least a labor of love.  May it perfect something quiet and gentle inside of all of us and may that gentleness shine on a world in sore need of it.  The one thing I have to say about all of us here is that we care deeply.  Have a good holiday my friends.

What’s on you reading and blogging list today?