Fact And Conservative Fantasy

“Black Panther,” film directed by Ryan Coogler, 2018

This poor film can’t carry the burden placed upon it.  It is to give all 10 year old black boys someone to look up to.  It is to show strong black women capable of incredible combat or technical feats.  It is to change the history and image of Africa and perhaps the world.  It is to finally have many black people in a film.  One excited and clueless reviewer even thought it would spark a ‘revolution.’  

Come on, this is a Disney film.  Disney is the second largest media conglomerate in the world.  Disney owns ABC, ESPN, A&E Networks, Pixar, Marvel Entertainment, Lucasfilm, the Muppets Studio and 21^st Century Fox films.  Their ‘diversity’ strategy is to sell tickets to under-served groups that might go to a science fiction / superhero film but haven’t.  It succeeded wildly, being the highest grossing film in 2018 so far.  This was also the tactic behind ‘Wonder Woman,' another film which will not liberate anyone.

Lowndes County, AL Freedom Organization

In 1965 the Lowndes County Freedom Organization was started under the leadership of Stokely Carmichael and other early Student Non-Violent Coordinating Committee activists.  This Alabama county was 80% black but no black people were registered to vote.  Their symbol was a ‘black panther.’  ‘Black Panther’ the comic-book character was conceived in 1966 by two white guys at Marvel comics, Jack Kirby and Stan Lee, who were picking up on the ferment of the times.  Later in 1966 the “Black Panther Party for Self-Defense” was created in Oakland, California, to defend black people from police violence.  The Panthers were to the left of 'cultural nationalists' of the time, like Ron Karenga of US, who worshiped Africa and was later exposed as an FBI plant. From this you might be able to tell who the real black panthers are ... and aren’t.

One of the continuing problems of science fiction in the U.S. is that it is based on high technology that accompanies medieval social structures. The ‘Dune’ series is a good example. Black Panther’ follows the same trope.  Here is a king, T’Challa, who has to fight to the possible death for the kingship of Wakanda, in the backdrop of something like Victoria Falls.  Yet this is a film clearly set in the present.  Leadership is given to the best royally-born fighter, it is not based on any kind of democracy except that of personal violence. The clothing worn by the Africans is beautiful and ornate, but reminds one of a tourist or Hollywood conception of cliché’d ‘native dress’ that few wear in present-day Africa.  Though these clothes may be a boon to black cos-play groups in the U.S., they misrepresent modern Africa.  What powers this secret kingdom isolated from the world is ‘vibranium’ – a powerful mineral delivered by a meteor from outer-space.  It provides power, weapons, protection, technology, medicine and much more.  Wakanda is ostensibly a beautiful and peaceful place, a sort of Eden in a conflicted world, with huge skyscrapers, magnetic trains and also grass huts, goats, mountains and rhinoceroses.  The people are seemingly happy in their isolation, a sort of hidden black utopia as yet unmarked by imperialism or colonialism.

The mining of conflict minerals in Congo - Tantalum

Africa right now is full of minerals being exploited by various countries and corporations, and ‘vibranium’ echoes the valuable conflict mineral ‘tantalum,’ refined as ‘coltan,’ which Apple and other companies use in every computer and internet phone.  It is mined in the Democratic Republic of Congo and Rwanda by primitive methods, and has brought war and misery to many, while making some rich.  This, I think, is the real African ‘vibranium.’

One black film reviewer said he’d never seen so many black people in a film (there are only 2 white ones in this one).  Odd, because there are many films with nearly all black actors, so you have to wonder what he's looking at.  You can go back to “Shaft” and “Foxy Brown,” “The Color Purple, or more recently any Madea film, the “Friday” stoner comedies, many films by Spike Lee, "Fences" or “Straight Otta Compton” as a few examples.  You might be able to come up with more, but it is not hard. 

Here is the political ‘nut’ of the film.  Most of the fighting occurs between black people!  It is not with the one white villain, Klaue, who is trying to steal some vibranium.  What is that fight about?  Evidently a member of the royal family, N’Jobu, is sent to Oakland, California   N’Jobu wants to use the vibranium to win freedom for black people in the U.S.  Wakanda’s policy is to keep to itself and ignore the plight of billions of black people around the world.  So N’Jobu is killed by T’Challa’s father because he somehow gave the evil white man Klaue some vibranium. (Why he would is unknown…nor is it logical.)  At any rate, N'Jobu's little son Erik, who is re-christened ‘Killmonger’ in the wars in Afghanistan and Iraq, seeks revenge for the murder.  And also a world-wide revolution against the oppressors of black people.  This implies that he means killing all white people or some such thing.  This would involve using vibranium as a weapon in New York, London and Hong Kong against the oppressors.  So the political heart of the film is a conflict between a-political isolation and later, liberal social work …or black nationalist revolution against oppression.  The ‘bad guy,’ Killmonger, is for the latter, and so are some Wakandan male fighters.

One ally of T’Challa and the moderates is a white nebbish CIA agent, Ross, who helps them combat Killmonger.  So our Panther king is a collaborator with the CIA.  Logically the CIA does not want a revolution against oppression and would prefer social work. They too are trying to get their hands on some vibranium.  So would every capitalist corporation and military in the world.  As we know, the CIA has agents and the military has bases all over Africa now, with JSOC/military attack abilities.  

Which character in the film are they closest to?

T’Challa wins the struggle, with help from the female Wakandan Praetorian guard, the CIA agent and a formerly alienated tribe of Wakandans, the Jabari. The female guards serve as a prop for one man or another through the whole film.  T’Challa spares Killmonger’s life, but Killmonger wants to die like so many other black people have.

The film ends with T’Challa giving a speech to a UN-type body, sounding like a saintly Nelson Mandela, promising to lead the world out of misery through ‘kind’ example and vibranium.  So the Wakandans are coming out of isolation and starting a social-work institution in Oakland.  As we know from the history of South Africa, after ANC leader Mandela's death, Jacob Zuma took over the ANC.  He has just been kicked out of the presidency of South Africa for corruption.  His job has been taken over by Cyril Ramaphosa, who is a former ANC labor leader and now billionaire.  Ramaphosa collaborated with mining companies in South Africa in the Marikana massacre of striking diamond miners in 2012.  So leading by example didn't really happen in South Africa.

Fact and conservative fantasy.  Fact and fiction.  What is clear is that super-hero fantasies quarried by entertainment conglomerates do not deal with the real problems of Africa or black America.  They in fact give reactionary solutions and embrace reactionary ideas.  As in the execrable film “Wonder Woman,” which dresses up fighting Germans in WWI with doing something about the oppressed status of women.  They might be pleasant diversions, temporarily 'empowering' or irritating fakes, but this poor film did not go anywhere near showing a way out.   It in fact is a right-wing movie attacking a more left-wing position, picturing"Killmonger" as an evil nasty person with a few good ideas.  They deform radical politics and then promote corporatism.  But again, this is Disney.  What do you expect?

Related reviews:  "Black Sails," which is partly about black maroons who escaped slavery and hid up in the mountains of various islands in the Caribbean.   Also re Africa or partly about Africa:  "Last Train to the Zona Verde," "Searching for Sugar Man," "Monsters of the Market," "Famished Road," "The Race for What's Left," "Southern Insurgency" and commentaries on Morocco and FGM.

Athens, GA

Red Frog

February 25, 2018

Not Black Panther

“Amiable With Big Teeth – A Novel of the Love Affair Between the Communists and the Poor Black Sheep of Harlem,” by Claude McKay, 1941/2017

Yeah, that is a weird title.  This newly found and complete novel by Claude McKay, written in 1941 but never published until now, was found in the papers of another writer in 2009.  McKay was one of the leading black writers of the Harlem Renaissance.  Born in Jamaica, he lived outside the U.S. for many years in London, Paris and Tangiers.  He attended the 4^thCongress of the Communist International in 1922 with Max Eastman, meeting Trotsky, Zinoviev and Bukharin.  He moved back to Harlem in 1934, penniless.

Emperor Haile Selassie of Ethiopia, who kept lions, not panthers

The novel centers on the movement among black people to defend Ethiopia after Italy’s Mussolini invaded it in October 1935, and ended in May 1936 when fascist forces entered Addis Ababa.  The subtext, as you might guess, is the role of mostly white “popular frontists’ in New York who attempt to take control of the movement from the prominent black citizens of Harlem. 

At the time, the USSR was one of the only countries opposing the Italian invasion in the League of Nations, while at the same time still selling oil and other products to Italy.  As pointed out by black nationalists, no weapons or aid was sent to Haile Selassie by the USSR.  This was unlike what happened in Spain during the 1936-1939 Civil War, when the USSR supplied the Popular Front government with supplies and volunteers.  It is possible that the issue was that one government was a kingdom and the other was a 'democratic' government, but it could also have been rooted in bigotry.  Roosevelt’s position on the invasion of Ethiopia (and Spain) was to do nothing, so the U.S. government was totally pathetic in the face of fascism.

The black community in the U.S. normally did not pay attention to international events.  But in this case it embraced Ethiopia as a comrade country, and turned out in the many thousands for rallies against the invasion by white Italy.  It reminded black people of their own position in the U.S. as an oppressed national group, now mirrored in a vicious conquest of an old African kingdom by a European power.

McKay’s book is invaluable in presenting a picture of the cultural, social and political currents in New York and Harlem at the time.  There are the “Senegambians’ who celebrate African culture.  There are the preachers and the prominent ‘talented 10^th’ some of whom could ‘pass.’  There is party-going and bar-hopping and bad romance.  There are early Muslim converts who crusade against white or Jewish businesses.  Black nationalism, cultural nationalism, stunted forms of ‘class analysis,’ 2^nd International socialists and high-society hedonism all gambol in the soup.  There is also a taste of Rastafarianism, as it too was based on the adulation of Haile Selassie and Ethiopia starting in the 1930s.

The more elite elements of Harlem society, led by a businessman Pablo Piexota, a former numbers runner, band together with a representative of the Ethiopian government, Lij Alamaya, to raise funds and consciousness.  At the same time, a mostly white group downtown, run by the Communist Party (CP), comes into competition.  The downtown group insists that there should be only one group, and it should have both black and white members.  The Harlem group disagrees, as they fear the splitting activities of the CP as well as the suspect role of white people, even ‘progressive’ white people.

These are familiar topics today, as a real united front between black and white and Latino workers is almost non-existent except in unions and very small efforts by socialist groups.  Groups like “Black Lives Matter” are run by black people, while white people go to BLM events and play a small role - similar to the Harlem group's outlook.  The existence of the ‘front group’ continues as well. There are sometimes actual ‘united fronts’ that last for one event or over time, and are not dominated by one political tendency to the exclusion of others.  Then there is the sectarian version of the front group, which tries to exclude anyone who is from another tendency.  In this book, the downtown group repeatedly denounces some of the members of the Harlem group as ‘Hitler-Mussolini-Trotskyite” fascists.  (Yeah, an actual, real slogan…) Even though these members had been elected to their positions and had support in the black community.

The lead villain is a white European CP member, Maxim Tasan, who spearheads the effort for a CP-dominated 'popular' front against the invasion.  Tasan says many things that make sense, but then displays his own disdain for ‘Aframericans,’ as McKay calls black people in the U.S.  McKay shows liberal white people making bigoted suggestions, or applauding a black artist who shows black people in crude negative caricatures.  The 'popular front' as portrayed by McKay is a unity with the middle and upper classes, not primarily aimed at proletarians. The downtown CP eventually defeats the Harlem group in the political battle through various shenanigans, but an odd revenge is successful.

McKay’s intense animus towards the CP is the central plot pivot of the book.  Some of the made-up exaggerations do not help convince the reader, and would have been more effective if they were more subtle or more realistic.  But McKay wanted to make it overly obvious how deceitful the CP leadership was.  Given the coming Hitler-Stalin peace pact in 1940, there is a bit of historical foreshadowing regarding betrayal here.  All that 'anti-fascism' suddenly is not so primary.  McKay later moved to Chicago and became a Catholic in 1944.   He died in 1948. This was his last book.

And I got it at the library!

Red Frog
Athens, GA

February 19, 2018

Vote on This!

“Two Days, One Night,” film by the Dardenne Brothers, 2014

Even Belgium has proletarian filmmakers.  This quiet movie, starring Marion Cotillard, focuses on a small group of solar workers facing an ethical choice – whether to take a €1,100 bonus and lay a woman off, or refuse the bonus and keep her employed.    Cotillard plays Sandra Bya, who suffers from depression and took a leave of absence because of it, but now is able to work again. 

Union Meeting - Where Work Democracy Happens

After a vote, only 2 of 16 workers want to part with their bonus.  But the vote was swayed by a foreman who threatened that if she was kept on, others would be laid-off.  So the owner-manager said another vote could be held.  As a result, Sandra has to lobby her co-workers for two days and one night before the second vote on Monday to convince them that she should stay.

The first thing that strikes you is that, barring work at a co-op, no worker is ever asked to vote on anything by a boss at a U.S. company.  The closest U.S. workers get to actual democracy related to their job is if they have a union.  Then they can attend meetings, vote on issues and combine with their co-workers in various ways.  Without a union, workers are the subject of a lenient dictatorship or a harsh one, partly subject to labor laws, the kind of laws occasionally enforced.

Do workers in Belgium have more rights on the job?  While I could find no legal requirement for managers to ‘consult’ with employees on issues this small, it is quite possible that it could happen.  Labor is socially and legally stronger in Belgium than in the U.S., even in small towns like Seraing, near Liege. These workers had been working 3 hours a week extra to make up for the missing worker, and not all workers love overtime.  So it is quite reasonable that the boss left this difficult choice to his workforce. 

Sandra gets the addresses or phone numbers of each co-worker and visits or calls them over the course of the weekend.  And this voyage through the streets, shops, houses and apartments of Seraing reveals the lives of her co-workers.  Some agree, some cannot.  They for the most part politely discuss the issue with her, as all of them could be in her position, even if they don’t agree.  Only once is she assaulted by a young contract worker, who knocks over his own father in anger, then drives off in his tricked-out car.  Another female co-worker is roughly grabbed by her husband for even discussing the issue, and she resolves to leave him after that.  He wanted the money to fix their new pool wall.  You get to peek into the small lives of everyone – African, Arab, white – with their small children, cramped quarters and side jobs. 

Sandra still suffers from the after-affects of depression, so getting out of bed and begging for a job, even with the constant encouragement of her husband, a greasy spoon cook, is daunting.  But she makes it to the last person on the list late Sunday night.

Does she get rehired?  Well, in a U.S. film, she probably would have, but this is reality, not Norma Rae.  Nevertheless what the film shows is that fighting back and relying on your co-workers is not a losing strategy.  “Solidarity’ is a word and practice barely ever used anymore, as the labor movement is under assault everywhere in the world.  Sticking your neck out for a fellow worker is frowned upon in the new hard-edged coldness of a neo-liberal world.  But people still do it.

The Dardenne brothers have made non-commercial films for years, using hand-held cameras and real light, starting with documentaries.  They use mostly non-professional or unknown actors and friends as technical staff, keeping their town as their only shooting location.  They have an exclusive focus on proletarians, immigrants, the unemployed and the homeless.  The choice of Cotillard is rare.  She was nominated for an Academy Award for best actress in this absolutely realistic performance – a first for a Dardenne film. 

Athens, GA

Red Frog

February 17, 2018

Who Rules the World?

“The City – London and the Global Power of Finance,” by Tony Norfield, 2016

Norfield spent 20 years working at various London-based banks and financial companies and has used that experience to write an anti-capitalist book, dry as it is.  Working from London, he dealt with financial issues in dozens of countries, as London is the center of the most international banking.  His secondary point is to sketch the powerful role of British finance, but really his main focus is how the world is controlled by modern imperialism, following Lenin’s identification of it in 1916 in “Imperialism, the Highest Stage of Capitalism.”

To Protect and Serve

He calls the U.K. not a ‘poodle’ but the leading junior partner (they are ‘binary planets’…) with the U.S., playing the role as the intermediary between the EU and the U.S.  The City in London is the leading international financial center in the world. The British trade deficit is essentially financed by The City’s financial services.  Even Britain’s tax havens would alone rank #7 in the world just behind Germany.  How this will change with Brexit is to be seen and he doesn’t track that. 

Imperialism is not mere military conquest.  It is not political control.  It is not another name for colonialism.   As Samir Amin notes, it is a form of world-wide financial ‘rent’ – specifically ‘imperialist rent.’  According to Norfield it is a matrix of 5 factors – gross domestic product (GDP); foreign direct investment in other countries (FDI); Bank of International Settlements (BIS) tracking the international assets & liabilities of nationally-based banks; the strength of a country’s currency and lastly, its military (state) prowess.  Each of these powers allows the host country and corporations to remit profits and interest back to the imperial center.  He concludes that only 20 countries in this world actually have any power in the world imperial system based on these parameters, and the top 6 have the most, with the U.S. at their head.  Great Britain is in 2^nd place, with China, Japan, Germany & France next.  

Whether a country uses their military or not (and in the case of China…not) or is fully capitalist or not (China is not) still weighs in the scales of international power.  Norfield understands that even the money in the financial system ultimately is based on surplus value sucked out of workers by the ‘vampire squid’ of capital.

Monopoly (or more correctly, oligopoly) is the final stage of the world economy and has been since Lenin identified it during WWI.  Norfield has a great 2007 chart which indicates the role of interlocking financial control worldwide, similar to Domhoff’s 1967 “Who Rules America.”  (Domhoff constantly updates his classic…) It shows that less than .5% of companies controlled 40% of the world’s corporations, with Barclays PLC at the top. Capital concentrates, not just in the upper classes or geographically in large cities, but in corporate ownership too.  This is obvious for all to see.

Norfield constantly points out that modern ‘finance’ capital and ‘industrial’ capital are actually closely interlocked.  This perspective undermines the reformist idea that regulation will somehow tame the ‘finance’ beast, and instead exposes capital in all its guises – financial, industrial and governmental – as one worldwide, inseparable, unified system.

Norfield addresses the fantasy that the economy is only stratified by the ‘1% v. 99%.’ He shows there is a large worldwide spread of stock and bond ownership to a wider group.  In 2014 there were 14 million U.S. residents who had over a $1M in assets.  If you multiply this by 3 persons in each family, that is 44M people in millionaire households, which is a bit more than 10% of the population.  84% of the top 10% own securities and 93% of millionaires own financial securities.  Now tell me these people are going to rock the boat against the 1% or Wall Street!  Taking into account retirement accounts adds to the figures of people with a financial interest in the stock markets, and no doubt a material source of neo-liberal / neo-conservative ideology even farther down the class ladder.

The Old Days Are Back!

Norfield distinguishes between ‘money-dealing’ capital and ‘interest-dealing’ capital.  The former is part of Marx’s early ‘circulation of capital’ into productive enterprise while the latter is based on thin-air credit creation and parasitic interest collecting.  Norfield points out that the former is actually a ‘very small’ part of their overall financial activity.  Norfield thinks that Marxists have not adequately understood how banking capital actually works, especially in the present.  For instance, the U.S. ranks 1^st and the UK 2^nd in providing world-wide ‘financial services’ that bring in dealing revenues, something that was not on the radar even 30 years ago. Norfield twice takes on Marxist Rudolf Hilferding’s 1910 analysis of banking capital, which insisted that the ‘rate of return’ (profits) in industrial and financial capital are about equal.  Norfield shows that no such thing happens.  Among other things, banks do not produce profits based on their buildings, et al. i.e. ‘fixed capital,’ as does a productive concern (financial firms ‘fixed capital’ is very small anyway), nor do industrial concerns ‘create credit.’ Surplus value is only the realm of the former.

A typical bank balance sheet for a UK bank according to Norfield is made up of:  1. currencies, 2. loans, 3. equity shares, 4. short term money market, 5. medium and long-term bonds and 6. derivatives, with derivatives the largest sector in 2011(!)  So this is not your small town bank.  Only 15% of UK bank loans were actually to businesses, while the rest is to other banks or for mortgages. These figures confirm that banking’s role in ‘productive’ capital is now very small, far outweighed by their own financial dealings.

Norfield supports Marx’s idea that there is a tendency over the long term for industrial profit-rates to fall due to increases in fixed capital costs.  He thinks finding data for dropping or rising profits to be very difficult to impossible, but deals with a chart from the U.S. as an example which he considers flawed.  Norfield cites cheaper labor at the ‘center’ and even cheaper labor abroad, as well as lower interest rates and the huge government rescue of the banking system in 2008, as boons to profitability.  According to the chart, profits upticked in the U.S. from their low point in 1983. Capital in the late 1970s and early 1980s started moving more heavily into financial speculation, which promised better returns, though at the cost of vastly increased debts.  So the timing is correct.

Norfield explores how the dollar allows the U.S. to dominate world trade, including oil.  It enables it to cheaply finance deficits, avoid exposure to other nations currency devaluations, benefit U.S. firm's merger and acquisition plans through dollar stock pricing and increases the power of the U.S. Federal Reserve.  87% of global currency deals are in the dollar, which shows why any country trying to avoid the dollar or which displeases the U.S. will be threatened with dollar sanctions, bombing or invasion.  Welcome to imperialist privilege!

Other reviews on this topic:  Amin’s “Law of Worldwide Value,” and “The Implosion of Contemporary Capitalism,” Hudson’s “F is for Fraud Economics,” Foster’s “The Endless Crisis,” and “The Great Financial Crisis,” Ho’s “Liquidated,” and reviews of books by Michael Lewis. 

And I bought it at Mayday Books!

Red Frog

February 14, 2018

The Correction to the Correction

Retirement and Wall Street or 'Fictitious Capital Becomes Even More Fictitious'

Retirement in the U.S. has already been partially privatized.  Half of workers have access to 401Ks at work through large employers (14%), but only 40% of that group contributes. 10% of workers have a ‘defined benefit’ pension. But those pension funds are invested in ‘non-defined’ securities!  More working-class money is invested in IRAs than 401Ks.  In 2012 38% of workers had an IRA, though many don’t contribute each year.  Many state pension plans are also chest-deep in the ‘big muddy’ and will result in tax issues if they fall short due to market losses.  Remember the stability of CDs?

The DOW in January-February 2018...so far

Just as education is now being partially privatized through the charter school movement, the finance sector has grabbed billions of dollars in individual retirement funds through pensions, IRAs and 401Ks/403Bs.  We see the result, as losses accumulate to retirement accounts and ‘defined pension plans’ through the finance arbitrage of Wall Street this week.  Every single market took huge losses in ‘the correction’ ... not a Jonathan Franzen novel this time. Two DOW drops of over a 1,000 points in one week is a record.  But then when workers get raises (as reported in January), the investor class gets the sweats.

One sector that collapsed on Monday was the VIX, a derivatives market based on volatility.  It was funded on bets about market fluctuations!   Another related sector of Exchange Traded funds – ETFs – based on bank loans, also is vulnerable, as they are not liquid.  Other losses were in ‘junk’ bonds (high yield corporate bonds) which finance highly indebted corporations.  Stock buybacks from corporations were part of the rout, as they created a false sense of stability.  And credit default swaps are back, as they are being bought at high rates to ‘insure’ against losses. Even collaterized debt obligations, which played a role in 2008, continue in this market.  FINRA and the SEC have turned a blind eye to these absurd derivative ‘products,’ and are merely enablers at this point.

The top 10% of the population holds 84% of the stocks and bonds, which shows who has control of the fictitious but real wealth.  It might be good that more workers are not putting hard-earned dollars into this racket, as 401Ks and IRAs.  As this statistic shows, they are both not living up to their hype for ‘protecting’ retirement for the working class as a whole.  And to think at one point both parties were moving towards privatizing social security, the only thing between millions of retirees and poverty! Of course, their plans have not ended, as they will continue to try to whittle down Social Security and Medicare/Medicaid because of 'deficits.'  Contributions to IRAs and 401Ks are down across the board over the years, reflecting the debt load so many workers are feeling.   This is the reality of privatization.  Privatizing 'retirement' is no better than privatized health care.

The markets are how the rich get richer ‘in their sleep’ and certainly, anyone with a 401K or IRA in the years since the 2008 market collapse has seen earnings rise to ridiculous levels.  Unfortunately, this is one way the upper level of the working class has to try to stay ahead in the ‘American game.’  This bubble was further blown up by Trump’s tax giveaway to the rich in January, which seemed to usher in a period of jubilation for corporate America.  Money was then plowed into stock buybacks.  Instead the ‘ticking time bombs’ (Businessweek’s phrase) in the market exploded.   Trillions have been wiped off the books worldwide.

The next shoe to drop is what corporations or finance companies will go bankrupt as their leverage disappears and they have to pay their debts.  The 3 Chinese stock markets have taken even heavier losses, which should put a deserved dent in the power of upcoming Chinese capitalists.  Internationally, trillions in corporate, national and private debt are waiting in the wings.

At the same time the Republicans and a small group of Democrats are unwinding the wimpy ‘Frank-Dodd’ act related to bank stress tests, capital requirements and trading restrictions.  Frank-Dodd never addressed several roots of the real problem, especially the repeal of Glass-Steagall and failing to repeal the Clinton-era 2000 CMFA act that gave free rein to derivatives.  All of this will lead to an even bigger financial collapse in the future, based on inability to pay for losses that will make 2008 look like a dress rehearsal.

But the real issue is that capital (and its two parties) cannot return to the past.  It cannot ‘reinstate’ Glass Steagall or repeal CMFA because its whole economic functioning globally would be in danger.  Until capital itself is dethroned from power, its “Iron” throne will require no restrictions on capital whatsoever.  The past is not coming back…

So the outlook for ‘retirement’ of workers is unstable.  Postponing retirement, working a part time job – all impact younger workers trying to earn a living too.   Capitalism is not interested in security. It is constantly in turmoil, at faster and faster speeds. Even the program trading / artificial intelligence algorithms driving this down market reflect that. This problem is because of its own internal contradictions, which cannot be overcome in the present ‘market’ economy.  And by 'market' I mean the aggregate opinion of many capitalists.

Prior review:  Lewis' "Flash Boys" and other books on Wall Street.

Red Frog

February 9, 2018

Wall Street - BAD AND BOUJEE

“J is for Junk Economics – A Guide to Reality in the Age of Deception,” by Michael Hudson, 2017

Many people drive cars or live in houses and have no idea how they work or how to fix them when they break.   Even growing food is a mystery. Yet without a house or some form of transport – even a bicycle – they would be homeless or walking all the time.  In an emergency, not knowing how to grow food might be damaging too.  Similarly, in a society dominated by capital, many people do not actually know how the society works.  And subsequently, have no idea, or false ideas, about how to fix it.  Understanding the profit system is essential to anyone looking at the system itself.  I.E. dealing with the ‘engine compartment’ or the ‘furnace’ or the ‘soil’ of capital’s social life, not just fiddling with the radio buttons.  At bottom this is a material world, not just one of ideas.

I Don't Have Cash - Can I Use My Credit Card?

Hudson is a left-economist who got so tired of reading gobbledygook by today’s corporate economic shills that he decided to create a virtual dictionary of terms and what they actually mean.  In separate sections he also describes the main capitalist myths promoted by the business media, a section on 'economics as fraud' and later asks if ‘economics’ deserves a Nobel prize.   The listed myths mainly restate what is in the definitions.  The fraud section undermines the idea that ‘logical consistency’ replaces an analysis of economic reality.  (Which strangely duplicates purely mathematical theories about the origin of the universe…) Hudson knows, along with many other leftists, that economics is not a ‘science,’ it is political to the extreme.

Classical Economics

Hudson’s main thrust is that original classical economists – Adam Smith, J.S. Mill, Ricardo et al. – were hostile to ‘rentier’ and non-production-based forms of earning, while the present system is once again dominated by these various forms of ‘financial capital’ centered on Wall Street.  “Rentier” income includes various kinds of rents, including mineral rights; interest charges, unequal exchange, monopoly and oligopoly, crime, fees and privatization, which are all not ‘products’ but are instead the result of ownership alone.  They are merely ‘transfers’ from the worker’s pocket to the capitalist’s or landlord’s pocket.  The rentiers are not producers, but parasites.

To Hudson finance capital cannot claim classical economists as ‘forerunners,’ but as enemies, just as they abhor Karl Marx.  Classical economics believed in the ‘labor theory of value’ along with Marx, while modern capitalist economists do not.  This was because in the 1800s industrial capital was battling with landlordism, a vestige of feudalism, and classical economics originated promoting the new industrial capital.  Hudson, a person with some initial Marxist influences, but who you might call a Minskyite or ‘post-Keynesian’, focuses strongly on this issue to highlight its prominence in today’s economy.  As part of this, he supports a ‘mixed economy’ based on industrial capital and government working together, ostensibly against financial capital.

Here is a choice quote from Adam Smith you probably have never read:

“The proposal of any new law or regulation of commerce which comes from [business] ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention.  It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public…”

This explains why the present has a whiff of economic neo-feudalism about it, as present capitalistic societies are backpedaling furiously into the past.  The Lords of Finance dominate the governments of nearly all countries, their central banks and the international agencies like the World Bank, IMF, ECB and WTO.  The health of the stock markets is the key barometer of ostensible world economic strength. But as Hudson points out, the dialectical effect of rentier profits is increasing debt, to the point where stagnation and crashes are inevitable.  The bigger the debt, whether corporate, government or individual, the bigger the resulting inequality, economic imbalances and depressions.  Hudson uses a calculation that shows that if 5% debt service payments outstrip smaller wage gains or growth (‘GDP’ and “NIPA” is what he uses, though both are full of deceptions), then debt slowly eats away at the whole economy, which he calls ‘debt deflation.’  Marx first pointed to this interplay of debt and growth in ‘Capital, Vol. III.'

So, in a way, this book is timely, given today’s bubble markets inflated by government policies like ‘quantitative easing,’ which gave $4.3 trillion to the FIRE sector.  I.E. that phrase is impenetrable jargon for ‘free money’ created on a computer screen and transferred to the bankers.   However, in the last few days, the bubble has apparently started bursting.  The greatest one-day fall in the DOW in its history took place today.

Issues in Paradise:

Hudson seems to be an anti-capitalist, but his focus on the glories of industrial production raises a question as to whether he just favors industrial economies, ignoring the exploitation of labor even there. This bifurcation ignores the intimate relationship between industrial and financial capital, as industrial firms go to the big bank's capital markets to raise money, or become financial giants themselves, like GE and GM. He sometimes ignores things he could go into, like the false figures in the ‘consumer price index.’   Or a laughably short section on ‘derivatives.’  He completely avoids a real definition of ‘middle class.’  Hudson dwells on the 1% v. 99%, which is a non-political formulation that ignores the supporting role of the approximately 9% for the 1%.  He also contends that the capitalists are against property taxes, which makes sense given they are large landowners.  Until you consider the present trend to reduce income and capital gains taxes, but not property taxes on homeowners and renters.  He now envisions the main class struggle as between creditors and debtors, not capitalists and workers.

One question he doesn’t answer is whether tax monies going to the rich or corporations or the military, etc. aren’t also partially ‘rent seeking’ behaviors?  General taxes are used as direct or indirect transfer payments to corporations or the rich, not just for the majority.  For instance, he says Southern states overtaxed black sharecroppers in the 1960s so they would not be able to get out of debt peonage.

Details, Details…

This is an entertaining book on many levels, as Hudson makes fun of many bogus concepts, going back as far back as Mesopotamia to prove his points.  It is chock full of information, large and small.  Such as how business can use depreciation and ‘business operating costs’ to reduce their taxes, while individuals cannot.  Or how landlords and real estate interests use public infrastructure projects to make money, first pointed out by Thorstein Veblen. Lets say they put in a light-rail line paid for by general taxes.  Builders rush to erect apartment buildings around stations and brag about how close they are to light rail transport, which enables them to sell or rent the apartments at a premium.  The public never sees that profit.  Or a myth peddled by shills like Paul Krugman, who insists that all bank loans are just the reverse side of deposits.

Jesus’s first sermon in the book of Mark was to demand a debt ‘Jubilee’ according to Hudson.  But if you read the fine-print about ‘debt jubilees’ (also mentioned by Graeber) Hudson said they were because the sovereign needed the peasants and citizens to fight in his army or to work on large building projects.  So debts had to be forgiven or there would be a revolt.  Neither of these conditions exists anymore, as there is a ‘volunteer’ army and mass projects are built by construction workers or debt slaves (as in the Gulf states), not ‘volunteers.’  Hence the only ‘jubilee’ anyone will get in modern times is through the ‘jubilee of revolution.’

Prior reviews on similar subjects:  Graeber’s “Debt,” “The Invisible Handcuffs of Capitalism,” “Slavery by Another Name,” “Zombie Capitalism,” “MMF,” and reviews of Piketty’s “Capital in the 21st Century.”  Commentaries on current debt and modern slavery below.

And I bought it at May Day Books!

February 5, 2018

Red Frog

Thatcherism Lives!

“I, Daniel Blake,” by Ken Loach, 2016

Ken Loach is probably one of the leading proletarian film maker of modern times, along with Mike Leigh.  This film follows a man trapped in Theresa May 'Thatcher’s' England on the unemployment / disability line.  It is now.  Through no fault of his own, Blake has a heart attack after 40 years work as a carpenter, and is declared by his doctor to be unable to work until he recovers.  The English work office (Newcastle on Tyne) thinks otherwise, and denies his disability  benefits.  A dodgy government ‘health professional’ of some kind says he is able to work.  So he applies for the British version of unemployment (the dole!) and looks for work by walking through the streets of town asking people about jobs.  But once offered a job, he declines it, as he has been told he cannot work by his doctor. Yet to get benefits you must look.
Catch 22! 

You Don't Want to Be Here

We follow Blake through his tribulations with the British state bureaucracy, which micro-manage his life, unlike what they do to hedge fund managers from the City.  He does not know how to use a computer.  He gets tired of answering questions which have nothing to do with his case.  He sympathizes with a young woman denied benefits, much as he has. Finally losing it, he spray-paints his protest on the stone walls of the office and draws cheers, is arrested and let go.  He ultimately gets an appeal date. 

In the process we see him helping the young woman and her children with mechanical tasks around her run-down apartment.  He yells at, then enjoys the company of his young black neighbor, who is importing shoes from China directly from a factory worker.  He visits a food bank, hilariously learns a bit about computers, is put on hold for hours, sells his furniture, is humiliated by state workers and helped by one. He gets to go to a resume (CV) class where he is told to 'stand out' when he points out there are more people than jobs. He is a blunt, older, somewhat excitable fellow shut out of the ‘new Britain.’ The denouement is not unpredictable. 

For anyone that has been on unemployment or welfare or disability, this film strikes a chord.  May you not spend hours on hold or in line or ever have to receive benefits!

Prior Ken Loach film reviewed: "Jimmy's Hall."  Prior Leigh films reviewed:  “High Hopes,” “Mr. Turner.”  Use blog search box, upper left.

Red Frog

February 1, 2018