Some in the business community are calling for a change in strategy due to the meager results of the fiscal cliff deal.The Huffington Post
"It doesn't work talking to the politicians, obviously," former Wells CEO Kovacevich said. "What we've got to do is educate the American public that our country is going to hell."
There are questions about how meaningful of a contribution Corporate America can make, especially if they do not deliver a unified voice on hard decisions such as industry-specific tax breaks.
Republican Senator Bob Corker from Tennessee said on CNBC on Wednesday morning that the business community could play a great role by pushing for concrete entitlement changes.
The business community appears reluctant to provide lawmakers with specific proposals.
Jon Romano, a spokesman for the Fix the Debt campaign, said the group has set out principles for a long-term deal, but it doesn't want to prescribe what the policy should look like.
"We're really looking to our elected leaders on both sides of Pennsylvania Avenue to come up with that solution to this issue," Romano said.
Mark Kennedy, who heads George Washington University's Graduate School of Political Management and served in Congress from 2001 to 2007, said business leaders need to do more.
He said executives should identify "sacred cows" that should no longer be protected, be more specific about how big a deficit reduction deal should be, and get specific about what they want included.
"It's more helpful to get parameters as to what should be done than to just say, do something," Kennedy said.
CEOs Slam Fiscal Cliff 'Disaster,' Call For Specific Deficit Reduction Plan
Reuters
Of course, no CEO wants to get specific and reap the whirlwind of angry customers whose benefits they want to cut, anymore than politicians want to angry voters by advocating unpopular policy. They want to force the president to do the dirty work for them and take the blame.
Paul Krugman calls this correctly in Battles of the Budget
For the reality is that our two major political parties are engaged in a fierce struggle over the future shape of American society. Democrats want to preserve the legacy of the New Deal and the Great Society — Social Security, Medicare and Medicaid — and add to them what every other advanced country has: a more or less universal guarantee of essential health care. Republicans want to roll all of that back, making room for drastically lower taxes on the wealthy. Yes, it’s essentially a class war.Meanwhile the IMF admits, sort of, that their prescription for austerity hurt some countries in the EZ.
Eurozone Spending Cuts Hurt Economies During Height Of Financial Crisis, IMF Admits
36 comments:
Tom,
Im continually baffled…
On the one hand, taking somewhat of a Marxian perspective, it seems like.. Ok, the CEOs/Capitalists/Wealthy People/etc. are all 'relatively' better offer when the masses of people are made worse off.
While its easy to blame the rich…
My inner feeling is that humans are generally and mostly good people, and that if many of these people understood ModernMoney, they'd be singing a different tune. This leads me to think Matt Franko s correct when he repeats they're all just morons.
But then I tack back, and recognize that most people really don't give a shit about other people. They care about themselves, their family, their close associates, and anyone else is, well, "I hope the best for them, but I'm not going out of my way to better their lives."
etc.
So, i remain baffled. I really have no idea what to think of these CEOs calling for austerity.
How difficult is it to look at Europe and see: huh, maybe it's not such a good thing??
"How difficult is it to look at Europe and see: huh, maybe it's not such a good thing??"
JK, they need to have been given a great ability for Mathematical Abstraction, and they simply/manifestly dont have it...
"Abstraction in mathematics is the process of extracting the underlying essence of a mathematical concept, removing any dependence on real world objects with which it might originally have been connected, and generalizing it so that it has wider applications or matching among other abstract descriptions of equivalent phenomena."
http://en.wikipedia.org/wiki/Abstraction_(mathematics)
They cant "match it up" with Europe, they see NO mathematical equivalence.
You have to look at this situation mathematically, not semantically. And these people are all semantics, ie they once read "debt: bad" and that's their "story" and they're stickin' to it type of thing... they have NO tools in the box to get themselves out of this... sorry.
They really are not qualified for their jobs being morons like this they should all be fired as many elementary age school children exhibit more ability for mathematical abstraction... sad.
They are definitely morons, you make the case here imo.
But now perhaps we can ask "why?".
Whether there is some sort of a cognitive connection between their libertarianism and their moronhood should be looked at... I'm sure all of these "CEOs" are libertarians of one sort or another, AND they are morons... hmmmmm....
Is their libertarianism in effect "blinding" them here? Or is libertarianism the actual "blindness"?
The Lord called the leadership "Stupid AND blind!" (Mat 23) so they were BOTH, leads me to think these disgraced today are both too...
Is one causing the other? ie their blindness is caused by libertarianism which is then making them morons? Or is it a "package deal" where they are blinded (libertarian) AND stupid at the same time?
If you are a libertarian, you cannot "see" that govt has authority, so you are indeed blinded... but does that blindness (libertarianism) cause them then to become stupid, or does this happen together?
This is hard to see... if there is a sequence or cause/effect... but we can definitely see the results of all of this...
rsp,
PK: ..."Democrats want to preserve the legacy of the New Deal and the Great Society — Social Security, Medicare and Medicaid — and add to them what every other advanced country has: a more or less universal guarantee of essential health care..."
Which Democrats? Certainly not the DLC centrists, of which Obama is their putative leader.
Mal,
Right! that's what I was thinking.. who is PK talking about? himself maybe...
Those Rubinites running the admin are all deranged morons capable of anything!
rsp,
Unfortunately the orthodox economists represent that they have knowledge about the monetary system when in fact they are widely ignorant. Businessmen, like the rest of America, have been poisoned by Orthodoxy into thinking about deficit and debt 'problems'. These CEOs have no expertise in the area, they simply parrot what they hear from 'the experts' and blather on.
Can hardly blame them for caring about the future of the country. If any other very serious professional told you that there was a serious threat within their area of knowledge, it would be unwise not to heed the warning.
Matt,
I think there's more going on than they are just morons that don't understand…
I mentioned a Noam Chomsky piece before (What Makes Mainstream Media Mainstream: http://www.chomsky.info/articles/199710--.htm) where he talk about a 'filtering out' process the whole way through life… as children, in grade school, in jobs… and how most people don't succeed without conforming.
Part of this conforming is learn what/where/when it's appropriate and also not appropriate to say certain things.
We can easily see this in the teenager who talks very different around his peers than around his parents.
We can easily see this on youtube these days when "behind the scenes" footage is captured on film. For example, how different is this Chris Berman than the sterilized version that is broadcasted? (http://www.youtube.com/watch?v=3TLG_LtWhj4)
I say all that to get to this point: I think it's very possible that many of our elected representatives and faces in our newsmedia, actually have thought something like "Well technically we could just print up new money to be for stuff" … etc. … but internally they KNOW that isn't appropriate conversation On Air, just like the teenage boy knows it's inappropriate conversation around his parents and their friends to talk about the girl he got a blow job from the other day.
Whether or not "printing money" and the idea that techinically the U.S. government can't go broke is discussed among them Off Air, I don't know. But it seems to me that all these people are not as big of morons as you seem to think.
They're more likely the successful maneuverers in what Chomsky refers to as the 'filtering out process' ...
JK,
So are you saying that none of them is willing "to say it first" and risk getting kicked out of the libertarian govt-hater club?
iow, their corporate profits WOULD GO UP if the govt didnt prosecute austerity/fiscal drag...
So I dont see the BJ analogy but rather the kid would not be willing to share that he "made honor roll" in front of his parents...
iow this is "good news" that they are unwilling to share (IF they are not morons...)
So in your view they are putting some sort of 'social standing' above their duty to maximize corporate profits?
Really?
rsp,
JK,
Chomsky: "and how most people don't succeed without conforming."
Depends on how one defines "success"...
btw I wish Chomsky could be made to see what is really going on wrt this fiscal ignorance that we can see... I think Chomsky could add value to an assessment of what is really cognitively going on based on his background in cognitive studies...
This is the "mother of all" cognitive problems in human history we are witnessing imo... devastating results... the scale...
rsp,
JK Im continually baffled…
It's a matter for psychologists and sociologists, and, yes, psychiatrists, too.
Philosophy, social and and political theory, and economics as well, are ex post rationales for choices that justify them to their makers and to others they wish to persuade.
Neoliberalism is based on a philosophical POV of "reality," with a social and political theory that justifies privilege of the acquisitors, and the economics that underlies this rationale is based on assumptions that support it.
In other words, it is complex BS to dupe the rubes and perhaps even themselves in order to justify a certain kind of expression of lust, anger, greed, hate, pride, selfishness and jealousy that characterizes the haute bourgeoisie.
The drill is clear and obvious to people that study these things.
Whether there is some sort of a cognitive connection between their libertarianism and their moronhood should be looked at... I'm sure all of these "CEOs" are libertarians of one sort or another, AND they are morons... hmmmmm....
Is their libertarianism in effect "blinding" them here? Or is libertarianism the actual "blindness"?
I would not call them "libertarians" of any sort. They are pseudo-conservative neoliberals that think the privileged have a natural right to privilege. All libertarians stand against privilege.
who is PK talking about? himself maybe...
I'd say his is projecting.
Tom,
I wish we could get (an objective) Chomsky in on this from his cognitive background ... rsp,
Chomsky is a super-smart guy. I wonder how it would be possible to get him to read 7DIF.
I dont know, that interview you posted up w him a while back indicated he is still working from ding to dong everyday...
This situation would have to tremendously interest any cognitive researcher worth his salt... it's if nothing else fascinating... rsp,
Those who stand to benefit from austerity support it.
Those who stand to benefit from austerity support it.
It's the neoliberal agenda.
According to Boas and Gans-Morse nowadays the most common use of the term neoliberalism refers to economic reform policies such as “eliminating price controls, deregulating capital markets and lowering trade barriers”, and reducing state influence on the economy especially by privatization and fiscal austerity.[9] The term is used in several senses: as a development model it refers to the rejection of structuralist economics in favor of the Washington Consensus; as an ideology the term is used to denote a conception of freedom as an overarching social value associated with reducing state functions to those of a minimal state; and finally as an academic paradigm the term is closely related to neoclassical economic theory.[10]
Wikipedia-Neoliberalism
Matt, "So in your view they are putting some sort of 'social standing' above their duty to maximize corporate profits?"
Sort of.
Consider this: why don't we ever hear any mainstream newspeople or our elected representatives say "We could just print the money to pay back the national debt"
I'm saying that sort of thought has probably occurred to many of them, but without having to be told... they know not to say that sort of thing On Air, or to the public.
That's Chomsky's point. That's the filtering out process: people that 'say the wrong things' (e.g. us) do not climb the hierchical ladders easily. They get filtered out. They'd never make it that high on the ladder to be in mainstream news or in congress, etc, if along the way they had said the wrong things.
For example, the bright high school student who doesn't do his homework but does well on the tests. He gets "filtered out" of the ladders of power because he's not conforming. How does he get filtered out? ... bad grades, from not doing his homework, which leads to not getting into a top college, which leads to more difficulty in the job market etc etc etc.
I've often heard Chomsky say that the elite instutions, like Harvard and so on, are laregely indoctrination into the upper class. But a key point to remember is that many of those at Harvard wouldn't be there if 1) they personally hadn't already demonstrated the necessary conformity to arrive(achieve) admission, and/or 2) they come from families of the same tendency.
It's all subtle, but pervasive.
As another example to highlight my point…
Recently there was a video of Bernard Lietaer, where he says something like this…
He had a conversation with Paul Krugman, where Krugman said to him (in private, keep in mind): "Didn't they tell you? Never touch the money system!.. you can touch anything else you want…"
This is what I'm talking about. Krugman has reached high heights of influence and power because he purposely conformed, he didn't pursue an economics career where he's 'saying the wrong things'.
I think that it is basically the different between the traditional conservative and liberal mindsets, gong back to British social and political thought. Conservatives believe (it's a norm in their worldview) that some people are better than others so privilege is natural. Liberal hold the opposite that "all people are created equal." Recall The Declartion, and George Orwell's Animal Farm.
It would seem that since there is disagreement over this and counter-instances, it is doubtful that it is natural unless natural means "what I believe."
This was the basic disagreement between Britain and the rebel colonists that led to the formulation of the hounding documents of the US. However, the US was not founded as a liberal nation, that is, a popular democracy, but a republic, which is a hybrid of conservative and liberal, which is the history of US politics.
"Consider this: why don't we ever hear any mainstream newspeople or our elected representatives say "We could just print the money to pay back the national debt"" - JK
Well, I wouldn't want it to be framed this way for sure because it buys into the idea that we have to "pay back" our money supply.
We have earned every penny of the National Debt. And then some.
My earnings should not be someone else's cash liability.
Paul,
Agreed. I phrased that sentence in the way I think someone unfamiliar with MMT or ModernMoney would say it to themselves or in private conversation.
The broader point is Chomsky's: the 'filtering out' process; where people who say the wrong things throughout life don't make it to positions of power.
So when we wonder how our elected representatives and new media can ignore the obvious, that the U.S. govenrment can't run out of money, I'm suggesting Chomsky's description of the 'fitlering out' process may offer us at least a partial explanation.
And it's a different (partial) explanation than ...they are just morons.
JK, yes the filtring out process is pervasive and I see it every day interacting with my friends and associates.
We all seem to be much better talkers than we are listeners and we tend to ignore other people's ideas.
We all tend to be lazy and take the conventional wisdom position rather than thinking things through ourselves.
Hell, i'm as guilty as anyone…I did practically no critical thinking wrt anything that didn't involve my work until I was 60 or so.
Fortunately for me my entire life has been centered around problem-solving so the adjustment has been fairly easy.
I wrote up an intro to the study of philosophy as problem-solving.
The non-moron interpretation: All of these guys understand that the government is sovereign and can always redeem all debts denominated in its own money. But they believe that the pace of issuance and redemption given current levels of spending commitment and current tax rates will eventually prove inflationary. Inflation is a threat to the asset values of the wealthy.
"Inflation is a threat to the asset values of the wealthy."- Dan
Ironically, an adequate level of liquidity and expansion of $NFA maintains the level of asset values, and if that liquidity is withheld asset values will decline.
Krugman and others see it as a strategic move by the wealthy, which now includes top management of large corps, to reduce social spending to "make room" in the budget for tax increases. It's basically part of the "starve the beast" scenario that Grover Norquist is fronting for the wealthy. The objective is to get rid of SS, Medicare, Medicaid, and "welfare" programs like unemployment compensation and food stamps as federally funded programs. That has been the objective for 80 years, since the New Deal, and they see an opening to move now by duping the rubes that "the country can't afford it because we are maxed out." Many if not most of the rubes are maxed out, so it is simple to convince them that the country is too, since the national debt is so high. It's not like this is anything new.
Yes, so it depends on knowing where the sweet spot is - what is the optimal level of public holdings of NFA given prevailing economic conditions.
Also remember Fortune 500 CEOs have operations in multiple countries. They don't necessarily care about what's good for America.
"The objective is to get rid of SS, Medicare, Medicaid, and "welfare" programs like unemployment compensation and food stamps as federally funded programs." - Tom
By thinking that way they are basically knocking the props out from under their own business models.
Those things you mentioned are big contributors to spending that enables their sales and as a result profit-taking.
Corporate profits last year amounted to only $32B, Apple accounted for something like 75% of that.
"No matter how many times I cut the board it's still too short" - Warren Mosler
Yeah, I think as far as those guys are concerned, the US government is just another competitor. They would like to put it out of business.
They are also probably quasi-Nazi racists and social Darwinists. The best way to deal with the problems of the poor and aged, in their book, is to deny them resources and "decrease the surplus population". They see beneficiaries of programs as just waste-of-space losers who are a parasitical drain on the resources of winners.
Ask Mike. He knows the way people think in the intense, competitive world of big time capitalism.
Also remember Fortune 500 CEOs have operations in multiple countries. They don't necessarily care about what's good for America.
The strongest growth is coming from ops in emerging a nations, so they want a strong military to protect US interest abroad, as well as to advance empire. They see domestic social spending as an expense that they are paying for with their taxes.
They are all greedy a$$holes, I mean, the ones in "Fix the Debt" and the Peterson coalition, etc., not to mention the billionaires like the Koch's, Adelson, etc. that are funding the corrupt pols pushing neoliberalism.
They think that they can get by fine without US workers consuming. They are aiming at the emerging markets and figure that domestic consumption by the well-off is enough. They are willing to write off the lower 60-80% of Americans.
Correction…Apple accounted for a high % of S&P profits. I think 4 companies accounted for 60% of the profit, of which Apple had a 75% share…or something like that. The other three included BoA, Goldman and maybe JP Morgan/Chase.
Never mind…
"They think that they can get by fine without US workers consuming. They are aiming at the emerging markets and figure that domestic consumption by the well-off is enough. They are willing to write off the lower 60-80% of Americans." - Tom
They will have to accept foreign currency then.
We won't be as able to buy foreign goods so I don't see how those countries will emerge without us buying their crap. We've been the main driver behind world growth ($5T to date).
JK,
" why don't we ever hear any mainstream newspeople or our elected representatives say "We could just print the money to pay back the national debt"
Because they are all libertarian to the point that they do not see govt as having anywhere near the authority to do this...
Look at the recent reaction to the Platinum Coin... these libertarians (even of the left) all have been FREAKING OUT and claiming it is ILLEGAL or UNCONSTITUTIONAL or whatever their deranged libertarian minds can come up with... when we've had a lawyer look at it and he came up with it as a LEGAL option in the first place... what the hell is "seignorage" for if this is "illegal"... they make me laugh...
Dont worry, these libertrians will always conjure up something in their self-deluded moron minds that leaves govt without authority...
and btw the statement is not even true, ie its not "paying off the debt", all that would happen is that balances would move from the "savings account" to the "checking account"... nothing is "paid off" but they are so blind and stupid they cant see this math...
but you bring up a good point as that is indeed how they look at it... like the govt has "borrowed" (text book libertarian: no govt authority to directly spend)... and now has to "pay it back" (text book libertarian: govt beholden to non-govt for return of balances originally provided by non-govt) ... their entire libertarian govt-hating paradigm is BLIND and STUPID ...
Perhaps it's like you say and "morons of a feather flock together" though, although that does not disprove that they are stupid and blind, just that they are all stupid and blind together in the same big libertarian moron govt-haters club... they can all go f themselves ... round em all up charge them with sedition and send them all to GITMO... start with the "Fix the Debt" people.
rsp
"They will have to accept foreign currency then."
Paul these morons all think "money is money"... they dont even know what you are talking about here please... that's how we can "borrow from the Chinese" in their sophomoric view, etc.. they dont even know what is going on...
rsp
Matt, you're preaching to the choir...
The point of my comment was that I don't think it will (can) work.
And I do believe they are unaware of the real constraint, so in that respect they are morons.
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