Saturday, April 13, 2013

Why are governments addicted to neoliberal #austerity?

The key to deficit reduction is not austerity - reducing government spending by cutting programs and personnel - but good old-fashioned employment. Stanford’s argument is in the Krugman reformist, Keynesian tradition. He doesn't seek a transformation, merely a technical economic readjustment, but, given our failure to transform capitalism so far - which can be brought about, in any case, only with a political strategy, not mere economic tinkering - it has value within the framework of a capitalist reality - a stopgap of sorts. 
As I've said many times in that context:
Without employment, no income; without income, no spending; without spending, no demand; without demand, no production; without production, no economy.
And thus no tax revenue to pay down the deficit. Frighteningly simple, especially when one realizes that government itself instead of firing people could be employing them and establishing employment programs in an effort to stimulate the economy when the private sector is failing to do so during these stagnating times.
Still, the question remains: why is it that so many governments continue to drink the austerity koolaid when it is so evident from countless global examples that it simply doesn't work? Because of course, as the main partner in corporatocracies, they serve their corporate brethren and their plutocratic masters. Austerity always privileges this investor class, and, while it may seem counter-intuitive, recessions, as Robert Pollin has suggested, actually benefit this class*. Ontario is no exception in its allegiance to the financial sector - after all Bay Street isn't in Boise -  especially since it necessarily controls so much of Ontario’s industrial economy too. As long as industrial economic activity is fulled by debt/credit, the financial sector and its capital will be in control.
We should nevertheless be grateful, I suppose, that the Ontario Liberals chose to ignore Don Drummond’s highly dubious classic neoliberal recommendations. Who knows the horrors they might have wrought.

* In the eyes of the investor class, austerity presumably generates confidence by working to maintain government solvency and asset value, especially long-term government bonds, by way of keeping inflation in check through reduced spending. Thus Canada’s neoliberal fiscal policy complements the Bank of Canada’s monetary policy of low interest rates, which also keep inflation in check. This is important to the investor class because government is of course the final guarantor of the plutocrats’ investments and their banking institutions. The outsourcing of government services if they happen at all under austerity is only an incidental benefit as is increased neoliberal freedom in the “marketplace,” for spending, whether intended by the policy or not, is also seriously inhibited in the general economy..

Thursday, April 11, 2013

Maybe its time to begin thinking about withdrawing our patronage from all retailers and services that offshore labour

"Yes, the Conservatives are focused on what they call the economy. But their economy is a ruthless, inhuman task-master. It demands that the very profitable Royal Bank be even more profitable. It demands that 45 highly trained people lose their jobs. It demands that Canada’s visa system allow all of this to happen. The government serves this economy faithfully. Whom does this economy serve?"      - Thomas Walkom, Toronto Star
Maybe its time to begin thinking about withdrawing our patronage from all retailers and services that offshore labour - including perhaps even call centres, which are the most inefficient offshore labour* of all. That might be hard to do, but choices can be made on the scale of evil, even though it’s true, as Phil Soubliere once told me, the lesser of two evils is still evil.

One could also continue to educate one’s family, neigbours, and friends about the exploitative practices that lie behind their shiny new mobile phone or computer, their wonderfully au courant clothing, their expansive new internet service, and their friendly neighbourhood bank. I find, however, that most people, wanting to get on with their necessitated drudge lives, could care less. Yes, of course you’re right, my dear fellow, but what can I do about it? So good luck with that. Maybe your mother will listen.
*English is indeed the language of business and global commerce thanks to U.S. imperial control of global finance, but the cultural differences, the nuances, the subtexts, the connotations, the rhythms among English language speakers are significant when it comes to communication efficiency - which is what a call centre should be all about. An English-speaking German really doesn’t speak the same language as an Indian or Texan. This is why offshoring call centres in the interest of profit and wage cost cutting is a failed business practice. It frequently if not always alienates clients.  The neoliberal habit of displacing domestic workers is also of course in and of itself morally reprehensible.

Saturday, April 6, 2013

Continuing our way to aggregated no growth economy

Wednesday, April 3, 2013

Change will not come from government and this policy or that - only from extra-congressional, extra-parliamentary strategies.

Here is a two-part interview with Stephanie Seguino, who, though focusing squarely on income inequality and its racial and gender implications, is not a revolutionary transformer of capitalism but a technical reformer in the Krugman Keynesian tradition. Like  Krugman, she advocates closely monitored public spending as a way to stimulate the economy. An interesting argument - especially on how profoundly youth, blacks, Hispanics and single mothers are disparagingly affected by income inequality resulting from the 2008 crisis - but one, alas, that simply asks for better management, not change to the very system itself. It remains clear that change will not come from government and this policy or that -  only from extra-congressional, extra-parliamentary strategies.