Still time to put jobs first?
In the chatter of Chinese ministers sounds a worry that the ‘socialist market economy’ could come out of the economic crisis fatter than it needs to be and therefore vulnerable to all the lean dogs that global capital is breeding as we speak.
By Greg Moses / The Rag Blog / June 29, 2009
From a distance the Chinese mainland appears to be snorting through the global depression like a fire-breathing dragon. But a closer look at internet discourse reveals a giant in the throes of aftershock. When we hear tones of irritation from Chinese officials regarding “dollar problems” we could on the one hand consider their pain.
On the other hand, whether you are listening to pro-dollar or anti-dollar partisans today, there is an eerie agreement between Marxist and Friedmanite alike that return on capital is the main thing. What we need to hear more often from both sides of the global mouth is how capital will only grow through labor.
With the help of Google translate, the average monolingual Yankee can cross the ocean and listen to the official pronouncements of ministers for the Communist Party of China (CPC) who have a thousand throats exhorting the masses to keep on the scientific path.
What the scientific path sounds like in China today is a lot like what you hear weekdays over the chatterbox at the Capitalism-Knows-Best Channel (CNBC). For instance, the Chinese “socialist market economy” is being redefined scientifically into a “modern market economy under rule of law,” which is exactly the way they like it at CNBC.
From both sides of the Pacific you get pretty much the same news: double-digit downturns in profits across the board, dozens of gigantic projects suddenly scrapped and unplugged, trade routes collapsing, pages snatched from memories of capitalism past, the better to remind us how to survive.
Even on the question of climate change there is a convergence of policy conviction that “the construction of ecological civilization” will help our damaged economies to “cope with the international financial crisis” through the material re-production of green technologies.
Tuning into the thoroughly capitalized culture at CNBC — coming at you “live from the financial capital of the world” — bust is generally accepted as the price of boom. Mad Money man Jim Cramer said recently that if the stock market were to take another 150 point dive on the S&P 500 Index, investors from the boo-yah land of Cramerica could consider it a gift — “A GIFT!!”
But over on the Chinese mainland, ministers seem to be talking to masses who haven’t quite learned how to appreciate the opportunities of economic collapse. This is the time, say the ministers, to vigorously seek innovations in technology, reconfigure business models, bury dead capacities, and evolve the community through decisive calculations of “M&A.”
In the chatter of Chinese ministers sounds a worry that the “socialist market economy” could come out of the economic crisis fatter than it needs to be and therefore vulnerable to all the lean dogs that global capital is breeding as we speak.
Of course every Wal-Mart shopper knows how much is owed to the enormous Chinese factories that punched out a dozen or so shopping seasons. But Chinese ministers know better how the tiny “Made in China” labels were not attached to Chinese-branded logos. And whereas the great logos of the global economy will likely recover on top of factories somewhere or anywhere (thank you Naomi Klein) there is no guarantee that the factories of China will be serving the logo powers next year.
There is enough worry to go around. In the USA we don’t know if the unemployment numbers will stop in time to provide the baby boom a respectful retirement. In China, the ministers don’t know if plants and projects will stop shutting down in time to prevent a more colossal sacrifice in capital spending.
Matching the positive image of the Chinese minister atop his nearly $2 trillion mountain of dollar reserves is the precise negative image of the average American consumer down in his valley of debt. And where the images should be joined at the middle term is across the rubbed glass surface of the Wal-Mart check-out counter, courtesy of MasterCard and Visa.
Of course, there was a time not too many months ago when the era of dollar-fed arrogance seemed to be stalking the world with unchecked power as “dollar hegemony” rolled around the globe with tsunami force. These days however the dollar gets pulled up off its knees by other currencies at the most curious times, exactly in moments when the whole flow of things seems to shudder with collapsing pipes.
What the dollar needs most right now is a national emergency declared in behalf of jobs. Enough diddling with yield curves and balance sheets already. Whatever it takes, we need folks back at work. Until we are busy creating value through labor, every dollar will stay busy shrinking.
Which brings us to the final correspondence between CNBC and the ministers of China. By and large all these voices fail to inflect the urgency of the single outcome that will count most toward economic health — getting everybody back to work. If you are holding a pile of dollars the immediate question should be how to transform that cash into tools of productivity for workers of the world. Wealth today is paralyzed from not knowing how to become productive. This is the real problem.
So whether you grew up on one side of the Pacific listening to warnings about the Midas touch or you grew up on another side of the Pacific sneaking lessons from Mencius you should know. When you mistake the real value of human economy for dollars, gold, or profit, you shall kill the order of things.
Something about the discourse of crisis is chilling to the ear. Neither side of the ocean is talking early or often enough about how to forge wealth into tools that can be put to work. There is still time perhaps to put jobs first.
[Greg Moses is editor of the Texas Worker and a regular contributor to The Rag Blog. He can be reached at gmosesx@gmail.com .]
Greg writes very well– wish I were half as talented!
The 12 month declines in some indicators is worse than they were in the first 12 months of the Great Depression, and unemployment is still increasing.
I read the Chinese a little differently. Yes, they worry about their contracts with US providers. Yes, they are repositioning themselves to move up to more sophistocated levels of production. That might widen the gap between peasants and some elements in labor and the middle class.
They have regional banks like our federal reserve districts and they have a toothless equivalent of the Fed. On top of that, they have an agency that is just beginning to learn how to work in the capital markets. For some years, the regional banks have been making a lot of bad loans that cannot be reigned in. That is one reason for their currency policy. There could be a fear that China’s relative prosperity will encourage more bad loans.
Some of those wise old men may also worry that their investment bankeres may start playing around with fancy capitalist instruments that no one understands. Anglo-American capitalism does unleash all the werewolf greed and longterm irrationality that Marx wrote about.
If there is another round of stimulus coming, it must be to get people back to work.
In my advanced years, I have become a bit unorthodox. We should be phasing in Value Added Tax as a way of stimulating industrial growth. Yes, its regressive, but it is preferable to a simple sales tax. Under GATT, it is the only club available to us.
It is also better than the cap and trade energy plan for raising money. Who recalls that this idea began as a Republican plan? Weak-spined Dems adopted it to avoid criticism of flax carbon taxes, which are more straightforward and lead to less corruption.
My guess is that even Obama knows now that green policies will not create another boom. He is betting on letting the Wall Street boys reinflate their baloon, but there are growing signs that this will not work. Should it fail, we should temporarily nationalize the banks, while letting the weaker ones collapse.
Another non-starter is taxing health care benefits. It will help the GOP regain a couple dozen House seats and 4 or 5 in the Senate. They should not be talking about this until all possible savings have been squeezed out of the health care system. That begins with letting Medicare bargain with providers in the manner of the VA. The same goes for providers under Obamacare.
I wonder if all the concessions being made to Wall Street, the wealthy, and the health insurance industry will be matched with an all-out effort to pass the Employee Free Choice Act. At the very least, we must outlaw all the unfair employer practices and add stiff penalties. There should also be some mandatory arbitration if, after a shop is organized, no agreement is reached in 40 days. These two things are worth going to the mat for and risking a filibuster.
Obama did score a lot of points with labor when his prerstructured bankruptcy plans stripped Chrysler and GM bondholders of their rights. It was an ugly business and may eventually make it hard to sell bonds in some firms. It was not just bloated capitalists who were hosed; widows and retired teachers with small incomes were forced to accept a few pennies on the dollar so that the union health funds could survive.
But politics ain’t beanbags, and Obama showed here that he can do some pretty ugly and distasteful things on behalf of the working class.
I just hope he shows the same toughness if the financial markets do not rebound and unemployment soars.
Greg writes very well– wish I were half as talented!
The 12 month declines in some indicators is worse than they were in the first 12 months of the Great Depression, and unemployment is still increasing.
I read the Chinese a little differently. Yes, they worry about their contracts with US providers. Yes, they are repositioning themselves to move up to more sophistocated levels of production. That might widen the gap between peasants and some elements in labor and the middle class.
They have regional banks like our federal reserve districts and they have a toothless equivalent of the Fed. On top of that, they have an agency that is just beginning to learn how to work in the capital markets. For some years, the regional banks have been making a lot of bad loans that cannot be reigned in. That is one reason for their currency policy. There could be a fear that China’s relative prosperity will encourage more bad loans.
Some of those wise old men may also worry that their investment bankeres may start playing around with fancy capitalist instruments that no one understands. Anglo-American capitalism does unleash all the werewolf greed and longterm irrationality that Marx wrote about.
If there is another round of stimulus coming, it must be to get people back to work.
In my advanced years, I have become a bit unorthodox. We should be phasing in Value Added Tax as a way of stimulating industrial growth. Yes, its regressive, but it is preferable to a simple sales tax. Under GATT, it is the only club available to us.
It is also better than the cap and trade energy plan for raising money. Who recalls that this idea began as a Republican plan? Weak-spined Dems adopted it to avoid criticism of flax carbon taxes, which are more straightforward and lead to less corruption.
My guess is that even Obama knows now that green policies will not create another boom. He is betting on letting the Wall Street boys reinflate their baloon, but there are growing signs that this will not work. Should it fail, we should temporarily nationalize the banks, while letting the weaker ones collapse.
Another non-starter is taxing health care benefits. It will help the GOP regain a couple dozen House seats and 4 or 5 in the Senate. They should not be talking about this until all possible savings have been squeezed out of the health care system. That begins with letting Medicare bargain with providers in the manner of the VA. The same goes for providers under Obamacare.
I wonder if all the concessions being made to Wall Street, the wealthy, and the health insurance industry will be matched with an all-out effort to pass the Employee Free Choice Act. At the very least, we must outlaw all the unfair employer practices and add stiff penalties. There should also be some mandatory arbitration if, after a shop is organized, no agreement is reached in 40 days. These two things are worth going to the mat for and risking a filibuster.
Obama did score a lot of points with labor when his prerstructured bankruptcy plans stripped Chrysler and GM bondholders of their rights. It was an ugly business and may eventually make it hard to sell bonds in some firms. It was not just bloated capitalists who were hosed; widows and retired teachers with small incomes were forced to accept a few pennies on the dollar so that the union health funds could survive.
But politics ain’t beanbags, and Obama showed here that he can do some pretty ugly and distasteful things on behalf of the working class.
I just hope he shows the same toughness if the financial markets do not rebound and unemployment soars.