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There’s No Recovery, Just More Hard Times Ahead

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It’s comical to watch the financial channels’ pundits and Obama Administration officials, almost on a daily basis, tell us that we are well into an economic recovery. Yes, there have been times when the economic data looked promising. During some weeks first time unemployment claims have been down. The economy has grown between two and three percent some months. And there have even been some months when new home sales have swelled and the prices of houses in general have increased. But the fact of the matter is that the worst of the crisis is yet to come and of course like the initial crisis which has lasted for close to three years already it will be Washington’s fault.

So, what are the indications that we are not well into an economic recovery and the worst of the economic pain is yet to come? For one thing, the National Bureau of Economic Research (NBER), the government’s official judge of economic expansion and contraction, has not pronounced the recession that began in 2007 to be over. Additionally, just yesterday the government announced the economy lost 125,000 jobs last month. The real unemployment rate which takes into account discouraged and underemployed workers is still north of 16 percent Food stampusage has skyrocketed to a record high of 40.2 million recipients. Bank repossessions are still a massive problem. They hit a record 93,777 in May which represented a 44 percent increase over May of the previous year. Worst yet, all 50 states are experiencing year-over-year increases. Banks still aren’t lending; consumers aren’t spending; and the national deficit and debt is in outer space with nothing good to show for it.

In all fairness, as mentioned above, there has been some good economic news from time to time. For instance, housing prices did increase in April. But most analysts attribute the rise to the rush to take advantage of the government tax credit for homebuyers which expired at the end of that month. Since the tax credit expired almost all housing market barometers have dropped significantly.

Then there were those months that jobs were produced. But, again, this had more to do with government gimmicks – 2010 census hiring and government spending then real economic progress.

To be sure, some Americans are doing quite well in this recession and this might account for the president’s insistence that the recession is over and prosperity is just around the corner. Who is doing well? Well, folks that live close to Washington and Wall Street are doing very well. Forbes Magazine has reported that 12 of the 25 riches counties in the country border the nation’s capital and financial headquarters. It’s no wonder since government workers receive 45 percent more in pay and benefits than their private sector counterparts. This is pretty good when you consider that it’s almost impossible to lose a government job even in economic recessions. Of course, given the huge taxpayer bailouts to Wall Street bankers and the generous Federal Reserve policies towards the same it is also easy to see why suburban New York City is riding high in these tough times.

Besides the bureaucrats and bailout recipients several political cronies of the president have cashed in during this recession. According to Floyd Brown and Lee Troxler in their book, Killing Wealth, Freeing Wealth, Larry Summers, chair of Obama’s Council of Economic Advisors, made $5.2 million in 2008 through his hedge fund. Tom Donilon, a deputy National Security Advisor, made $3.9 million in legal fees representing Citigroup and Goldman Sachs. As members of Obama’s inner circle, they are uniquely positioned to guarantee that federal policies continue to favor their interests.

And let’s not forget Obama’s huge financial supporter and billionaire buddy, George Soros. According to Brown and Troxler, the financier pulled in $1.1 billion in trading profits in 2008. After helping to finance Obama’s White House run, the president has wasted little time in rewarding his benefactor. It is ironic that their partnership involves deepwater drilling.

The president and his cohorts in the media can spin economic news anyway they wish. But, after 17 months in office and trillions of dollars spent to stimulate the economy the only thing the president’s policies have produced is more debt and predictions from many analysts that we are headed for a double-dip recession. This should be no surprise – since similar economic policies deepened and prolonged the recession of 1929. Then, Americans had to wait about 16 years for good economic times to return. Given this president’s current propensity to spend there’s no telling how long it will take for this recession to end.

 

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About Kenn Jacobine

  • http://blogcritics.org/writers/christine-lakatos/ Christine

    Hey, Kenn, nice! Haven’t been on BC for a while to write or read any articles. Been busy with a huge piece that involves “crony capitalism” and requires tons of research that I am in the middle of right now. Always enjoy your articles.

  • John Wilson

    Yes, it’s naive to assume that the economy will simply rebound and recover to previous levels.

    There’s no intrinsic reason for the economy to recover. Yet people keep trying to tell me that it’s ‘cyclic’, without explaining why it would be cyclic or what parameters define the cycle.

    We have a production system capable of fulfilling needs without a decent distribution system. The antique capitalist rewards/penalties system doesn’t work anymore.

    We should have reduced the workweek as productivity rose beyond needs so that production would be more evenly distributed, but we chose to just increase rewards to a few. Dumb decision.

  • Arch Conservative

    What has hurt us the most and will continue to hurt us is the fact that every single administration and Congress since LBJ, both Dem and Repub have been content to piss away our manufacturing jobs to third world countries.

    We’ve become nothing more than a nation of superficial consumers waiting for next material fix to slap on the credit card. Quite ugly actually.

  • Les Slater

    Arch,

    Read an interesting perspective from a significant member of the ruling class on what you’re talking about here.

  • Les Slater

    Also, in line with Kenn’s article, Jobless crisis deeply affects most workers, from the Militant.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    I was hoping, though, Les, you would give me feedback as per my last email.

    As you may have noticed, I stopped engaging people like Jacobine and company. It’s not only unproductive but mind-numbing as well to be going over the same lame arguments time and again. These people suffer from ossification of brain cells and as far as I am concerned, it’s a wasted effort trying to engage them. You’re a better man than I.

    I was hoping, though, you might field the question I raised. Is that too much too ask?

    If my response is less than timely, I’ve been installing a new laptop, in preparation to my California move.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Excellent article by Andy Grove, Les,

    If there is one lesson to draw from this, it’s the short-sightedness of American business. Job creation and manufacturing are the mainstays of any economy. The bottom line, however important, is secondary.

  • John Wilson

    #3 “…both Dem and Repub have been content to piss away our manufacturing jobs to third world countries.”

    Yes. When I was a lad David Ricardo and his theory of Relative Economic Advantage was considered a damned liberal by conservatives eager to protect their tariffs, but ever since they discovered how much money they could make by selling out to foreigners they’ve all become Ricardians. Fickle bastards.

  • Les Slater

    Anybody have a way of contacting Arch? I’m sure he would appreciate that article. It’s directly related to his #3.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    You posted it already.

  • Mark

    re #7 Those of us who disagree with the likes of Kenn and Mises need to shut up until able to put up. I’m with this guy

    and as I cannot put up a compelling argument at this time, I’ll follow my advice.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Excellent appraisal except for one thing – it addresses the political/economic climate and conditions in the present, not the conceptual relations. Besides, even with this proviso, it fails to address the strains and fissures.

    I totally disagree with the premise that the likes of Jacobine and Mises need to be convinced. They’re reactionaries, and reactionaries they’ll remain. No cogent argument is going to change the fact. It’s a PR job at best, not likely to carry much weight.

    Solutions will and must come from bottom up – the disgruntled workers and the growing army of the perennially unemployable. Don’t expect Geithner or Bernanky to set the economic ship afloat.

    That’s why I asked both you and Les, in my last email, to look into the concept of “socialized capitalism” (as per links provided). It’s an unfortunate terms, not of my own choosing, but that’s neither here nor there.

    The concept offers some interesting possibilities – in particular, the democratization of the economic processes, from ground-up.

    How many times do I have to ask for feedback?

  • Mark

    Please retransmit the links, Rog.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Last post as per the following.

  • Les Slater

    Roger,

    I’m about half through the link in your #14. I have a hard time following all the arguments. Your refference to ‘socialized capitalism’ in #12 gives me a much better idea what your talking about. Mark’s ‘this guy’ mistakes ‘socialised capitalism’ for socialism. It wss the attempt to socialize the market or to use market forces as the foundation for socialism that has failed, not socialism. ‘This guy’ not only does not have the slightest clue as to what the NEP was but sees it as one of the methods of building socialism. Lenin, who instituted NEP, saw it as a necessary but temporary, step away from socialism.

    Around 1924 Bukharin was beginning to push the idea of what was meant to be a temporary retreat that Lenin prescribed for an economy coming out of a devistating civil war that these retreats were really a way forward.

    By 1926, as Preobrazhensky had pointed out in his ‘New Economics’ this relying on market forces was the new watchward for the Soviet economic planners. When I read Preobrazhensky’s work I saw the seeds of the downfall of their pseudo-socialist experiment.

    Les

  • Les Slater

    Mark,

    I see Paul Cockshott’s 2007 piece a muddle of horseshit.

    Les

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    I realize it’s rather hard to get through the muddled dialogue. I’m only asking if you can clarify the underlying concept. And how different is it from “socialism,” such as we know it?

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    And BTW, I see a different potential, beyond adherence to “market forces,” something on the nature of public referendum for investment in certain projects (rather than mere taxation coming down from the top).

    That’s what I mean about democratization of economic processes.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    I’ll deal with your responses tomorrow. It’s been a long day.

  • Mark

    re #16 I, on the other hand, take his argument that Austrian theory requires a compelling response to heart.

    Rog, there are problems are with ‘growth’ and ‘maximization’ — if they remain controlling factors influencing the behavior of the managers of social capital I see no solution to boom and bust. No matter the public referendum, the basic problem will remain the reproduction of the population/workforce and how to maintain a ‘revenue flow’ for that purpose.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    I see it in quite different terms, Mark – in term of new approach to public funding, which is to say, of standing the old system on its head (almost the reverse of taxation). Of course, the political environment must be ripe to even think of going that route.

    How do the set of factors you allude to in the end come into play?

  • Arch Conservative

    Mayer Rothschilde said:

    “Let me issue and control a Nation’s money and I care not who makes its laws”.

    It’s all part of the plan for the NEw World order. We’ve already seen in Europe with the EU an attempt at the flavorless homogenization of a great part Western society. Who needs national sovereignty and when you can have Herman Van Rompuy, looking like Dr. Evil from Austen Powers, sitting in the well of EU chambers. A Belgian dictating the lives of Germans, Spanish, Irish, greek etc etc

    Now on our side of the ocean we have those who once whispered but are now saying out loud that we need some type of North American union with Mexico and Canada. We’re also seeing calls for a global currency.

  • Les Slater

    As far as I can see, postmodernism is an illness, a reactionary ideology born in disappointment and delusion whose heart and soul is pessimism.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Aren’t you yourself being reactionary here, Les, in line with your own insight that emotions rule?

    Besides, what does your #23 hook up to?

  • Les Slater

    In 23 ‘delusion’ should be ‘disillusion’.

  • Les Slater

    “Besides, what does your #23 hook up to?”

    Some cursory reading on postmodernism and critical theory. Much of it has to do with ‘failures’ or inadequacy of previous understandings or practice. My contension is that they had only superficial understanding of what they were reacting to and much of this reaction was EMOTION in a theoretical guise.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Pessimism is just as legitimate or illegitimate emotional underpinning of theory as optimism is. I believe I made a case for that in my email presentation to you. Besides, I regard Foucault’s researches as exploratory and highly instructive, regardless of the postmodernist state of mind. In fact, I view it more on the order of an analytical method for unmasking, just as Wittgenstein’s Philosophical Investigations was a method for unmasking metaphysics via reminders concerning ordinary language.

    And as a method, it offers a unique understanding of the deep-seated ills of society that goes beyond many a superficial analysis. The onus therefore is on the seer what strategies are available and what courses of action one should take. You can’t blame Foucault for his relative paucity regarding solution.

    Think of this motto: Unmasking will make you free.

  • Les Slater

    “Pessimism is just as legitimate or illegitimate emotional underpinning of theory as optimism is.”

    I don’t think theory should be based on orunderpinned by emotions, positive or negative.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    All conceptual systems are, Les – based on values, that is.

  • http://thingsalongtheway.blogspot.com/ Cindy

    Roger (and Mark you may be interested),

    Here is the book I was discussing with you, Roger. See what you think. I am hopeful for some solutions coming from it. It’s very dense. You and Mark will not think so though.

    Methodology of the Oppressed

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Well, Les has already expressed his biases. Good luck trying to convince him.

    I notice, however, that you’re allowing for this fact by excluding him from this group mailing. Quite perceptive of you.

    Excuse me, Les, but sarcasm is in order.

  • Les Slater

    “All conceptual systems are, Les – based on values, that is.”

    “The theoretical conclusions of the Communists are in no way based on ideas or principles that have been invented, or discovered, by this or that would-be universal reformer.

    “They merely express, in general terms, actual relations springing from an existing class struggle, from a historical movement going on under our very eyes. The abolition of existing property relations is not at all a distinctive feature of communism.”

    K. Marx and F. Engles, Communist Manefesto

  • Les Slater

    Engels

  • http://thingsalongtheway.blogspot.com/ Cindy

    Huh? I didn’t exclude Les from a mailing. I only made that one group mailing about normative masculinity. It’s something I am getting ready to write about.

    But since he doesn’t see anything in postmodern thought, I don’t think he will be interested in the book I posted above. So, I didn’t suggest it to him.

  • Les Slater

    “But since he doesn’t see anything in postmodern thought…”

    But I do, mostly negative.

  • http://thingsalongtheway.blogspot.com/ Cindy

    Les,

    I don’t quite get the conversation on pessimism and optimism you and Roger had above. I am not sure how you mean ‘mostly negative’. Couldn’t we say communism is mostly negative in regard to seeing problems with capitalism?

    So, you see, I am not sure what a judgment of negativity has to do with truth. Am I missing your meaning?

  • Les Slater

    Truth may be considered negative. The problem as I see it with postmodernists is they base their theories on personal disapointments of things they had no objective reasons to be supportive of in the first place.

  • http://thingsalongtheway.blogspot.com/ Cindy

    I think that ‘postmodernism’ and ‘postmodernists’ might be such big topics as to make it likely we have in mind different things as we each speak.

    Can you give me an example of that?

    To me postmodernism recognizes that there are as many worlds as there are people. And Foucault, in particular, explains very well, something I have seen, yet fumbled with trying to express, for as far back as I can remember–how power dominates culture, how the narrative of power co-opts society. By what means the ruling class maintains psychological control of society.

    Okay, so now what are you thinking of as you express #37?

  • http://thingsalongtheway.blogspot.com/ Cindy

    (sorry, I had to run off and cook my infamous denver omelets sans ham)

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Are values of universal justice or fairness anything that has been invented or discovered?

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    There is another thing to consider, Perhaps we ought to have our eyes open and see the negative before we can think of a way out.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    “The problem as I see it with postmodernists is they base their theories on personal disapointments of things they had no objective reasons to be supportive of in the first place.” #37

    But they had reasons “to be supportive of in the first place.” (I don’t know, now, what particular stress you’re putting on the adjectival term “objective.” Is it supposed to work in some way I’m not aware of?)

    To continue, the Age of Enlightenment was supposed to have inaugurated the age of Reason, doing away with the age/myth of faith. Well, it turned out, according to the postmodernists, that human reason itself was a myth.

    I don’t know how much plainer I can make it.

  • Les Slater

    “…the Age of Enlightenment was supposed to have inaugurated the age of Reason, doing away with the age/myth of faith.”

    Marx pointed out the limits to that a while ago. I contend that what’s behind postmodernism is not that particular myth but the disappointment with Marx in general and the Russian revolution in particular.

    Problems in the Soviet Union were being exposed starting in about 1924 and were plain to see by anyone by the early 30’s. It was among those that chose to ignore or rationalize this that disappointments and disillusionments arose at various conjunctures. Some were still pedaling the crap until the late 80’s or even into the 90’s. To these folk it was socialism that failed. In reality the socialist project was cut short by a brutal counterrevolution led by Stalin culminating in a reversal of most of the early gains of the revolution.

    The problem is that those who idealized the brutal Stalinist regime were not willing to expose their own delusions but sought rather to blame Marx and Lenin, even go back to blaming the Age of Enlightenment.

    In reality it is their own delusions that compel them to find blame elsewhere.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    I’ll buy that, Les, but so what? Many postmodernists have come from the ranks of disenchanted Marxists; and the same is true of many Critial Theory exponents, Adorno, Marcuse, Habermas. But this isn’t to say they haven’t contributed new and valuable insights to the body of social theory. If anything, they’ve only enhanced the general framework, made it more comprehensive. Ultimately, I don’t see traditional Marxism as being necessarily inimical to poststructualist thought. There is certainly room enough to experiment with many different approaches and to employ diverse strategies from locale to locale.

    Besides, French thought has always been infused with original elements, starting with Merle Ponty, Sartre or Camus; so even these Marxist thinkers brought plenty of originality into play and enriched our horizons. I’m not going to pooh-pooh them simply because they deviate from the dogma.

    Ultimately, any rigid commitment to orthodox ideology, however rightheaded, is not the kind of position I’m ready to settle for. Conditions are always in a state of flux and as far as I am concerned, our thinking must not only keep up with the changing world but reflect it as well.

  • Les Slater

    Roger,

    I’ll say it again, as far as I can see, postmodernism is an illness, a reactionary ideology born in disappointment and disillusion whose heart and soul is pessimism. I’ll expand on this a bit.

    It’s an illness almost exclusively of the middle class, a relatively small section of the middle class. As you say, many ‘…have come from the ranks of disenchanted Marxists; and the same is true of many Critical Theory exponents, Adorno, Marcuse, Habermas.’

    It has evolved into the polar opposite of revolutionary Marxism, not some modern enhancement. This movement does not look to the working class as the gravediggers of capitalism; it’s actually hostile to the working class. It looks to middle class reformist theoreticians coming up with schematic solutions trying to tame market tendencies, e.g. ‘socialized capitalism’. It shrinks in horror from any idea that the working class must take the lead in confronting and overthrowing capitalism.

    Postmodernism will be ignored by the working class and should be by anyone looking to the working class as the primary social force that can change history. It is a hindrance, not a road forward. It needs to be exposed for what it is.

    Les

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Well, we have reached a dead-end, you and I, so it seems.

  • Les Slater

    Postmodernism is not the only variant of this illness. It is also prevalent in many shades of so-called Marxism.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Is that supposed to make me feel better?

  • Les Slater

    Roger,

    I’m a communist, a Leninist and revolutionary. This is the culmination of a lifetime of experience. I’ve seriously looked at many alternatives. None has measured up to the tasks at hand. These years have deepened my understanding. I am not the same person I was 40 years ago and I expect to continue learning and changing.

    Les

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    I’m a revolutionary too, Les, but I don’t subscribe to any religion. Religion means dogma to me, whether it’s from the Left, the Right, or the Center. Ergo – I make it a point to think for myself.

    Honestly, I have no idea what other way is there to “continue to learn and change.”

  • http://thingsalongtheway.blogspot.com/ Cindy

    Roger,

    Could you have a look at that book I posted above say the intro and the first chapter?

    It is presenting a very different (for me) perspective on the post modern state. The author is analyzing a work by Frederic Jameson. It is sort of disturbing. But, as of now, I have no opinion on it. I am just going to keep going and see what happens.

    I would love to know what you think. I think you will find it worth it to see this.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    I surely will, Cindy. I’ve been absorbed for the last two days with a new laptop, transferring files, setting up a network, etc – playing with a toy if you know what I mean, in preparation for the California trip. Sorry about Les, I tried.

    Perhaps you can call me before the week is over.

  • http://thingsalongtheway.blogspot.com/ Cindy

    I will give you a call tomorrow night. I am being treated to a visit by the sweetest small young man and his even smaller baby brother. I’d forgotten a world with little ones. Quite nice. :-)

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    OK

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Les,

    Let me refer you to one of Foucault’s essays in Power/Knowledge on Popular Justice, the discussion with the Maoists, in fact, the first one in the volume. If you can’t access it, I can send it to you as a PDF file.

    It will make you realize that there is a far greater affinity between Marxists thought and postmodernism, and this article is as good a proof of that as one can hope for.

    And you’re mistaken if you’re thinking that the postmodernists bank on the middle class as the main agent of revolutionary change. Nothing could be further from the truth, and the essay in question should dissuade you from thinking so.

    Granted, Jamison, himself a Marxists, makes some valid points against some aspects of the postmodern thought; but then again, he is also featured in many introductions to many pivotal postmodern works; so it isn’t exactly the case that he’s totally unsympathetic.

    One has got to take the good with the bad and identify, to the extent possible, the weak and the strong points. I’d like to believe that I’ve been true to this adage. By no means have I tried to suggest that Foucault and company represent the end all and be all; if I created this impression, I apologize.

    But this only confirms what I asserted in an earlier post that I am not committed to any kind of dogma, be it postmodern or Marxist. We all have responsibility to think for ourselves, especially since the world itself is ever-changing. And so must be the case for our ideas and thinking.