by
Kim Moody
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It should be fairly obvious that the rhythms of profitability, recurring crises, facility relocations, and subsequent decline in and restructuring of manufacturing would produce both an economic impact on the state and an accelerated political intervention from capital and its representatives in government. Yet the role of the state in capitalism is necessarily a contradictory one. For capital, it is, on the one hand, a necessity for social order, the protection of private property and accumulation, defense in a competitive and violent world, negotiator of the terms of globalization, instrument of imperial expansion, and subsidizer, and, on the other hand, it is ultimately a drain on surplus value via taxation even if much of this comes from the wages of workers. The whole program of neoliberalism, of course, is meant to resolve this seeming conflict by redistributing the costs of the state from capital to the middle and working classes by tax reductions on business and the wealthy, shifting the burden downward and increasing the flow of the nation’s surplus value to capital.
Things are rendered even more complicated by the multilayered nature of the American state, with its federal government, 50 states, 3,000 counties, nearly 20,000 municipalities, and 16,500 townships. 6 No level of government, however, has been exempt from the attack on the state as a cost to capital or perceived barrier to accumulation that has characterized the neoliberal era. In fact, this plethora of governments has become a source of massive tax relief and government subsidy for corporate America. As location, relocation, and outsourcing became means of escaping unions and lowering labor costs in the era of lean production, corporations played one city, county, or state against others in order to receive the tax breaks, subsidies, land deals, and other incentives that looted the public treasury in return for the promise, not always fulfilled, of jobs.
Those who have paid the price for all this corporate largess are, of course, the public employees and the working-class people who depend on public services. The federal government cut 285,124 jobs between 1990 and 2010, 173,466 or 60 percent from the US Postal Service, which also faces the threat of privatization. This hit workers of color, who compose over half the mail sorting and processing staff, the hardest. From 2009 through late 2015, state governments lost 68,000 jobs, while local governments cut 418,000. 22 Particularly hard hit were teachers, as states cut school aid to cities, which on average accounts for about 46 percent of local school budgets. While between 2008 and 2015 the number of students rose by 804,000, the number of teachers fell by 297,000—with women accounting for the majority of these workers. 23 Up to 2009, state and local employment provided over half the country’s union members, but by 2015 they had fallen behind private-sector members. From 2009 through 2015, the number of local government union members dropped by 684,000. This was, of course, a consequence of the political attack on these workers and their unions that accelerated after the 2010 elections.
Emboldened by their successes in state antilabor legislation, Republicans in state after state have proposed “right-to-work” laws, which passed in three traditional strongholds of industrial unionism: Indiana, Michigan, and Wisconsin. 25 Through this intervention at the state level, capital acting through right-wing Republican politicians, sometimes with support from Democrats, has in effect further altered national labor policy in a pro-business direction. To many people, state governments appear at best as the training ground and launching pad for career politicians with higher ambitions or as seats of petty claims and corruption with little relevance to major policy formation in comparison to the federal government. As it turns out, corporate America had a more nuanced understanding of the altered role of the states in the US political system, and increasingly the states have become major levers of neoliberal governmental restructuring and corporate power.
useful background context
Carter also attempted to break one of the last mass strikes of the 1970s, that by the United Mine Workers, by invoking the Taft-Hartley Act. The striking miners ignored the president and adopted the slogan “Taft can mine it, Hartley can haul it, and Carter can shove it.” 25 The neoliberal agenda, however, rolled on as the Joint Economic Committee of Congress, with a Democratic majority and the endorsement of the liberal’s liberal Ted Kennedy, reported in 1979 “that the major challenges today and for the foresee- able future are on the supply-side of the economy.” 26 For the Democrats, the Keynesian foundation of post–World War II liberalism was a thing of the past. As Paul Heideman put it in his analysis of the realignment strategy in Jacobin, “The window for realignment had closed.” 27 As loyal Democrats, however, Harrington and the realigners went on to support Carter in 1980 once Ted Kennedy’s primary challenge was defeated, and Walter Mondale in 1984 as the party moved to the right.
dying @ this slogan
As Thomas Byrne Edsall described this turn, “During the 1970s, business refined its ability to act as a class, submerging competitive instincts in favour of joint, cooperative action in the legislative arena.” 29 The leader of this crusade was the Business Roundtable, founded in 1973 and representing most of the major industrial, commercial, and financial corporations in the United States, and whose connections with the Carter administration were direct. The roundtable developed the roster of deregulation, tax reductions, welfare cuts, privatization, and so on that have been the neoliberal agenda up to this day. It was soon followed in its activist course by the broader US Chamber of Commerce and the National Association of Manufacturers. The Trilateral Commission, also founded in 1973 by top business leaders, refined the international free trade dimension of the developing neoliberal agenda—with connections to the Carter White House and other Democrats. At the same time, post-Watergate reforms opened the door to corporate PACs, which proliferated from 89 in 1974 to 784 in 1978 and 1,467 in 1982. Corporate and trade association PAC campaign contributions rose from a mere $8 million in 1972 to $84.9 million in 1982, much of it going to the new generation of Democrats mentioned above as well as to Democratic incumbents. 30
[...] Nobody can get a proper undergraduate education. You'll never know in advance what that education should be. Regret is the feeling you have when you finally realize what the education is that you want. Right? And you're always going to come to that after it's too late. There is always going to be a Henry Adams moment. And so it's not bad to have regrets.
Caleb Crain
[...] sociology is partly about how people's agency or free will is exercised within limits that they didn't make, and I think people can find that distasteful about sociology, that it can seem deterministic. [...]
by Meghan Falvey
reminds me of Marx: "Men make their own history, but they do not make it as they please; they do not make it under self-selected circumstances, but under circumstances existing already, given and transmitted from the past"
[...] we had a loss over the course of three days that was like a ten-sigma event, meaning, you know, it should never happen based on the statistical models that underlie it. Because the model doesn’t assume that everybody else is trading the same model as you are. So that’s sort of like a meta-model factor. The model doesn’t know that there are other black boxes out there.
think about this more. could you account for this? could you add a meta element to the model that accounts for the presences of other models (which may, themselves, have meta elements)?
[...] What tends to happen in financial markets is, bad things happen when you really divorce the people who take the risk from the people who understand the risk. What happened is that that distance in the subprime market just increased and increased and increased. I mean, it started out that you had mortgage companies that would keep some of the stuff on their own books. Subprime lenders, it wasn’t a big business, it was a small business, and it was specialty lenders, and they made risky loans, and they would keep a lot of it on their books.
But then these guys were like, “You know, there are hedge fund buyers for pools that we put together,” and then the hedge fund buyers say, “You know what? We need to fund, we need to leverage this, so how can we leverage this? Oh, I have an idea, let’s create a CDO and issue paper against it to fund ourselves,” and then you get buyers of that paper. The buyers of that paper, they’re more ratings-sensitive than fundamentals-sensitive, so they’re quite divorced from the details. Then it got even more extended in the sense that vehicles were set up that had a mandate to kind of robotically buy that paper and fund themselves through issuing paper in the market.
this is eerily similar to how i've been thinking about the gig economy
Today, where people have made bad investment decisions, where people built houses they never should have built, there’s a misallocation of resources. The loss has already happened. The loss isn’t what happens on a balance sheet; the loss is what happens when someone cuts down a tree, makes cement, builds a 6,000-square-foot house in a place it should never be built. So the loss has already happened. The question is, how do you allocate that loss? And if you don’t allocate the loss, if you pretend it isn’t there, then this has really baleful consequences for the economy. So what we’re going through now is this process of loss allocation. It can be done swiftly, fairly, and intelligently, or it can be done slowly, and messily, and inefficiently, and also it can be not done at all. If it’s happened, the best is to deal with it swiftly and fairly. And when the shareholders get hurt really badly and the banks have to recapitalize at punitive levels, or get taken over $2 a share, I think it’s fair—the banks made bad decisions, the equity holders are the prime beneficiaries of the activities the bank is undertaking. When things go poorly, they should be the primary bearers of the loss. I think that’s good.
think about this in the context of startup valuations or sales or whatever (or when it turns out a startup has a fraudulent product). the loss has already happened, but in private; the financial stuff in the news is just accounting
One of the oldest, in fact I think the oldest money market fund, the progenitor of the whole industry, a fund called the Reserve Primary Fund—Primary had meaningful exposure to Lehman paper. Something like 2 percent of that fund was in Lehman paper. When Lehman went under, people who had shares of the Reserve Primary Fund, especially institutional investors who were very much on top of what Primary’s holdings were, started to ask for redemptions from that fund. So that led to a run on that money market fund.
As a result, Primary “broke the buck.” They had to mark down their Lehman exposure. The holding, the value of one share of the Primary Reserve Fund, was no longer $1—money market funds always try to maintain the value of one share at $1. And that just caused people to—I think the technical term is “lose their shit.” People just lost their shit. You thought you had money; now you don’t have money. And you don’t know how much you have in Reserve Primary Fund, really…“We think people will recover 98 cents on the dollar, we don’t know how long it will take to get people back their money,” and suddenly all these money market funds fell under suspicion. [...]
oh man this is just wild