The @nytimes is well known for its “liberal” bias despite its role pushing the Iraq War, suppression of stories on Trump/Russia while engaging in hysterical attacks on Hillary Clinton, its sad role in hyping the Whitewater non-scandal, its suppression of a story on Bush’s domestic spying before the 2004 election and its relentless mockery of Al Gore, and addiction to stories about “real Americans” who generally are racist nuts sitting around in cafes - just to mention some highlights. But the Times economics stories are where its real ideological bent is revealed. As a case in point the Times published an alarmed “news” story about how the new German government’s strong role for the moderate Social Democrats may damage the economic miracle.
“The coalition is undoing all the reforms that turned Germany from the
sick man of Europe into the locomotive,” said Holger Schmieding, chief
economist of Berenberg, a German bank
Here is a chart of German GDP growth - the Socialists were in power until around 2005 and Angela Merkel’s right-center party took power after then. Does that look like a miracle? Not to me.
The German austerity regime came into full flower in 2009 when Wolfgang Schäuble became finance minister. You can see from the chart that the 2007/2008 world bank crisis was a disaster, there was a sharp recovery followed by a sharp decline and a choppy period that has lasted until today. The Times characterizes this as follows:
The
German economy could hardly be in better shape as Angela Merkel
formally began her fourth term as chancellor Wednesday. Unemployment is
almost nonexistent, stock prices are at record highs, and there is
almost no inflation.
But the political compromise
that allowed Ms. Merkel to remain in power could bring that boom to an
end. She had to bend to demands from her party’s junior coalition
partner, and agree to roll back deregulation that, since 2005, has
unleashed the country’s economy.
That doesn’t have any basis in the GDP graph. As the Times reluctantly admits later in the story, “unemployment is almost nonexistant”, but many German workers are temps, with low wages, low benefits, and no job security. In fact 9% of all workers and 19% of all workers under 35 are on temporary contracts.
labor representatives accuse employers of abusing the system,
creating a cohort of second-class workers living from one six-month
contract to the next. Temporary workers are more at risk of slipping
into poverty and are less likely to be married or have children,
according to a study by the Hans Böckler Foundation, which is financed
by German labor unions.
And still, they are not grateful. And that’s in Germany.
Mr. Schäuble, the finance minister from 2009 until he resigned last year,
was a dominant figure not only in Germany but throughout Europe, where
he enforced the austerity imposed on crisis countries like Greece and
Portugal in return for eurozone aid. Austerity measures in the wake of
the financial crisis largely involved shrinking government spending, by
trimming pensions and cutting social programs, as a way to rein in
budget deficits.
The effects of Schaubel’s austerity in Greece have been utterly devastating (22% of the nation is in severe poverty) and fascism in Greece, Hungary and Poland has been really been “unleashed” by falling wages, instability, and social unrest caused by this insane policy that is, according to this “news” article such a wonderful blessing. In fact, the Times itself published an article in its deeply buried data driven section a few years ago that explained how this “unleashed” economy worked.
To
understand a crucial reason for the European financial crisis that
nearly caused a global financial collapse and threatened to undo a
six-decade push toward a united Europe, you could look at a bunch of
charts of bond markets and current account deficits and fiscal
imbalances.
Or, you could take a look at new data compiled by LIS, a group that maintains the Luxembourg Income Study Database, that shows how income is distributed in countries around the world. It offers a surprising insight about why Europe came to the financial brink.
In
most advanced economies, the middle class made significant advances in
earning power over the last few decades, even if the rich have done
quite a lot better. But one major country stands out as the exception,
with middle-income workers seeing no meaningful increase since the
1990s.
It
is Germany, the largest economy in Europe. And the numbers are
remarkable. From 2000 to 2010, after-tax income for people in the middle
of the income distribution in Germany increased 1.4 percent. Not per
year. Total.
The quote below from Tom Engelhardt is indicative of the weird
reactionary shell shocked state of the American left after 7 years of a
black man in the White House. We are in the United States in 2016, 60
years after CIA coup in Iran installed the Shah’s torture state, 40
years after the Vietnam War ended, 30 years after Ronald Reagan’s bloody
wars in El Salvador and Nicaragua, and a decade after George W. Bush’s
excellent adventure in Iraq began. And poor Tom is astounded to find
that the US engages military interventions all over the world now:
And yet, true as all that may be, Washington increasingly seems like a new land, sporting something like a new system
in the midst of our much-described polarized and paralyzed politics.
The national security state doesn’t seem faintly paralyzed or polarized
to me. Nor does the Pentagon. On certain days when I catch the news, I
can’t believe how strange and yet humdrum this uncharted new territory
is. Remind me, for instance, where in the Constitution the Founding
Fathers wrote about that national security state? And yet there it is in
all its glory, all its powers, an ever more independent force in our
nation’s capital. In what way, for instance, did those men of the
revolutionary era prepare the ground for the Pentagon to loose its spy
drones from our distant war zones over the United States? And yet, so it has. And
no one even seems disturbed by the development. The news, barely
noticed or noted, was instantly absorbed into what’s becoming the new
normal.
By GOLLY! We were just sitting in our New
England town meeting, posing for the Norman Rockwell painting and
thinking of taking Suzie to the Malt-Shop after the game, when we
realized this terrible black guy Obama had unleashed the Empire Drones!
What’s a hard working white working class hero to do? Faint? Flex a
bicep? “Remind me, for instance, where in the Constitution the Founding Fathers wrote about that national security state?“
By Gad! The Founding Fathers wanted to live in peace with Native
Americans and help African Americans form labor unions and worker
collectives. The USA didn’t even fight an undeclared war in nearby
Tunisia until 1801. And now poor Tom has discovered:
It seems that if the US puts advisers in place anywhere on the planet — and any day of any year they are now in scores of countries — that’s excuse enough to validate acts of war based on the “imminent” threat of their attack.
Faith
and Begorrah! Someone fetch Father Tom a brandy. It seems as if any day
now the US will put advisers in Philippines and intervene militarily -
oh wait that was 1900 - or in Guatemala - oh wait, that was 1950 - or
Costa Rica - wait that was 1850 - or Russia (1920), or Argentina (1970s)
or Greece (1950s) or Haiti (1920) or Japan (1850s) or …
Since
Obama took office, the US Right has repeatedly pitched fits that Obama
would President while black. I would never suggest that the shock and
horror the US Left has for stuff the US has been doing forever is caused
by the same unease that having a black guy in the Oval Office has
induced in the right. I mean these are enlightened people.
I sit in one of the dives/
On Fifty-second Street/
Uncertain and afraid/
As the clever hopes expire/
Of a low dishonest decade:/
Waves of anger and fear/
Circulate over the bright/
And darkened lands of the earth, - Auden
Henry Wallace. Speech delivered at Progressive Party Rally, New York, N. Y., September 10, 1948. From Vital Speeches of the Day (October 1, 1948), v. 14, n. 24, p. 743.
Just two years ago I spoke to many thousands of you who are here tonight. I said then as I say tonight that peace is the basic issue of the 1948 election campaign. I say now that the first job of national defense: the most important job in maintaining the peace is the job of conquering hate here at home, the job of protecting the civil rights of all Americans. I had been South before—many times—and I thought I understood the plight of our Negro citizens. But I discovered last week that my understanding was only the limited understanding; the sympathetic feeling of a friend for a man who is afflicted.
To me fascism is no longer a second-hand experience—a motion picture, a photograph or the deeply moving words of a great writer. It is no longer a mere definition of an economic and political system in which freedom is stifled by private power; in which prejudices are bred and nourished; in which man is set against man for the profit of powerful and greedy forces. No, fascism has become an ugly reality—a reality which I have tasted.
I have tasted it neither so fully nor so bitterly as millions of others. But I have tasted it. And in tasting it I have reinforced my solemn resolution to fight it wherever and whenever it appears so long as I live. Last week—when I had a chance to live—to live very briefly and relatively mildly—the kind of life which millions of Americans live every waking hour, last week I learned what prejudice and hatred can mean. I learned to know the face of violence, although I was spared the full force of violence. I saw the ugly reality of how hate and prejudice can warp good men and women; turn Christian gentlemen into raving beasts; turn good mothers and wives into jezebels.
I didn’t like that part of what I saw. I didn’t like to see men and women fall victims to the catchwords of prejudice and the slogans of hate, even as the poor people of Germany were victimized by the catchwords and slogans of Hitler and Streicher.
Try this thought experiment: An evil (of course) US corporate CEO gathers with his board and proposes that to reduce labor costs and stick it to the union, they move manufacturing to China or India.
Of course, this kind of thing happened repeatedly in the USA over the last 30 years or so. But try imagining the same plot in 1960 or 1970. Move manufacturing to some backyard iron foundry in a People’s Commune or to a village without electricity in distant India? The board would have bundled Whateverhisname III off to some mental hospital right away. What happened in the late 1970s and on was a massive change in (1) technology particularly communications and transport (like container shipping) making it easier to manage production at a distance and move goods by sea and (2) more importantly, massive changes in both India and China. India, just 20 years after evicting the UK colonial administration, created an industrial base and a spectacular engineering education system that produced skilled workers in vast number. China’s revolution against Maoism unleashed giant wave of factory construction, commercial activity, and a rapid move up the “value chain” in many sectors. Those countries suddenly changed the game. US CEOs who did not seriously consider moving manufacturing or off-shoring in some way found their companies in serious trouble with competitors who did.
This story is completely different from the one that leftist anti-neoliberal theorists tell. In their telling, the wonderful social bargain of New Deal America - high wages, unionization, white picket fences, June Cleaver making meat loaf in kitchen of her FHA home, etc. - was rudely interrupted by greedy corporate elites who decided to ruin everything in order to crush the working classes. In this telling China and India are without agency to use the terminology: apparently the technical and economic advance of those countries was called into being by Western Corporate Elites - the people who really make history.
I’ve always treated neoliberalism as a political project carried out by the corporate capitalist class as they felt intensely threatened both politically and economically towards the end of the 1960s into the 1970s. They desperately wanted to launch a political project that would curb the power of labor.
[Harvey]
For Harvey, “corporate capitalist class” means “US/European corporate capitalist class”. Similarly, many leftist theorists mean “white male working class in the US/Europe” when they say “working class”. Little Deng Xioping doesn’t appear in this narrative, let alone the Chinese peasants who organized hand labor shoe and button factories that then started making shoe making machinery or the founders of the Indian Institutes of Technology or the workers or managers of Tata. Even worse, the actions and reactions of working class Americans - the heroic long struggle of African-Americans, the violent reaction of white Americans to the civil rights struggle, the Feminist movement and its effect on economic organization and social values - none of that matters in Harvey’s tale in which all agency is located with western “corporate elites”.
And the history is made up anyways. You don’t have to go the sad glorification of Jim Crow America to see that - you can just look at the story of corporate America breaking its supposed agreement with labor in the 1970s.
With respect to labor, the challenge was to make domestic labor competitive with global labor […] — to take capital to where the low-wage labor forces were. But for globalization to work you had to reduce tariffs and empower finance capital, because finance capital is the most mobile form of capital. So finance capital and things like floating currencies became critical to curbing labor. - Harvey
The search for low wage labor didn’t start in the late 1960s. In 1952, freshman US Senator John F Kennedy gave an impassioned speech about the relocation of manufacturing from the Northeast to lower wage non-unionized southern states that is still worth reading. David Nobel’s book, Forces of Production, documents how many corporations sacrificed profits and de-optimized production to weaken the bargaining position of skilled labor in early 1960s. Capitalism is an evolving system - something Marx influenced analysts used to take for granted.
Both nostalgia and conspiracy are hallmarks of reactionary ideologies. Those are the foundations of a major branch of contemporary leftist ideology. For reasons discussed here US leftism has become a right wing ideology.
