Relentlessly Progressive Political Economy

1:50pm

The conservatives should be fell and a coalition between the liberals and the NDP should be formed.  I will first suggest why and then suggest the political framing and sundry benefits of a coalition.

First-off, it would be ridiculous to assume that the Cons parlour tricks are going to end here.  It is going to be one Rovian blind side after another and will in fact jam the legislature so that nothing productive can get done.  Which serves the Cons just fine.  It serves the Cons just fine because they do not have any idea how they are going to govern during a downturn without further alienating their base and their ideology for that matter.

Second following that it is clear that the conservatives do not have a clue about what is at the root cause of the global downturn.  Why do the Cons think the IMF has been advising 2% of GDP fiscal stimulus packages all around?  The Cons do not know how to think in these terms.  More than any other party they are ideologically blinded with respect to fiscal stimulus.  In short the Cons do not do rational economic planning.  Even the phrase sends them into deep trauma.

That brings me to the political frame.  The liberals and the NDP should announce a unity coalition under the auspices of an emergency government to deal with the economic crisis.  If possible bring the Bloc in.  Fiscal stimulus means everyone can be bought off (i.e., their sacred projects funded).
The liberals do not have a leader.  That is even better.  No big heads to get in the way.  And the beauty for the liberals is that when they do elect their leader he or she can walk into the prime ministers office and run in the next election as the incumbent PM.  The quid pro quo for getting the PMO should be the NDP getting Finance.

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4:17pm

Some days it is like I have direct hook-up to the collective progressive consciousness.

Macleans is reporting that the liberals are set to bring down the cons and start a coalition government.

Check the framing of the issue.

The Liberal motion, which has the approval of the NDP and Bloc Quebecois, reads:

“In light of the government’s failure to recognize the seriousness of Canada’s economic situation and its failure in particular to present any credible plan to stimulate the Canadian economy and to help workers and businesses in hard-pressed sectors such as manufacturing, the automotive industry and forestry, this House has lost confidence in this government and is of the opinion that a viable alternative government can be formed within the present House of Commons.”

A source says the opposition parties have agreed that Liberal Leader Stephane Dion would lead the government for the next few months.

Ok that is it.  It will not cause an election.  All the oppostion parties have to do is inform the GG that they are ready to form a coalition government.  Fell them I say. It is game of chicken there is only one way to win: Born ready to die.

A conversation and a comment I made over at Progressive economics got me thinking about public policy after the crisis.  The Conversation there was sparked by this article. Economic crisis may shift society’s direction

I remain very pessimistic that much will change going forward.  2 years of stagnation and then the whole up- part of the cycle in austerity across the advanced capitalist zone paying for the bailout.  It might be a greener austerity but austerity nonetheless.

Neoliberalism is far from dead.  Sure the rhetoric will get toned down, but at the end of day we have a whole generation of policy wonks, analysts, journalists, and social scientists more generally that were trained in not only neoliberal times but also, for the most part, in a neoliberal intellectual milieu.  Political scientists bent over backwards to import facile rational choice game theoretic models which are almost always loaded with neoclassical theories such as public choice.  Even law journals became enamored with neoclassical type analyzes.

Moreover, At the most abstract political register is not the third way and good example of the near total neoliberal accommodation?  Further, the article referred to above is also a good example.  No offense intended, but that a progressive journalist first thinks to look up economists–not well known for their sociological, political, or legal training–for their opinion on the future of social and political policy is a fairly telling example of just how ideologically cooked the present and future is likely to be.  Although given political scientists have spent much of the past twenty years aping economists progressive journalists could be forgiven: why not go straight to the horses mouth?

Furthermore I have not seen anything in the fiscal stimulus package announcements, on either sides of the Atlantic,  to make me think that the real contradiction at the heart of the neoliberal growth model is going to be remedied: the capacity of workers to seriously augment their incomes without having to resort to (a) working more hours or (b) having more members of the family enter the paid labour force.

If one combines the last point with the probability of austerity going forward then you have at best a recipe for Clintonite / Blairite talk left govern right. I hope the progressive economists are right and I am woefully wrong.  I remain optimistic, however, with respect to my pessimism.

Ok this is just too fun to pass up.  The FT is reporting that the Queen paid a visit to the London School of Economics (LSE) and asked the economists in attendance the rather whithering question:

Why did no one see it coming?

Yep, that is just how bad the state of the arts is in that profession.  The good news I suppose is that they are busy fixing it: the economists and the MBA’s that is.  What is the plan? Social credit of course!  This would be much more fun if so many innocent people were not getting hurt.

The vision thing

By Chris Giles,

Published: FT November 25 2008 20:24 | Last updated: November 25 2008 20:24

It has been a bad year for economic forecasters. So bad that royalty wants to know what went wrong. “Why did no one see it coming?” Britain’s Queen Elizabeth asked during a visit to the London School of Economics this month.

Her Majesty’s question has sparked a series of ludicrous claims about the prescience of individual forecasters.

The article reproduced below is an op-ed written by Sam Gindin for the Windsor Star

Sam Gindin

The global crisis quickly engulfing us threatens to become the worst
since the Great Depression, and this means that past ways of doing
things need to be fundamentally rethought. But Gord Henderson’s focus
on wage cuts for autoworkers (Windsor Star, November 20, 2008) is the
absolutely wrong way to go ­ that much we already learned from the
1930s, when competitive cuts in workers’ wages only aggravated the
depression. When Henderson responds to CAW President Ken Lewenza’s
defence of workers’ wages with a glib “Tell that to all those low-wage
Mexican autoworkers,” what exactly does this mean?

In the face of the general concern that consumers are retrenching (and
business consequently holding back investments), how much sense does
it make to advocate autoworkers setting a pattern for lower wages and
less purchasing power? And what kind of notion of progress and vision
for the future does the target of Mexican wage standards suggest?

The fact is that Canadian hourly compensation in the auto industry is
now below the U.S., at about par with Japan and less than three
quarters of hourly compensation in Germany (U.S. Bureau of Labour data
for 2006, adjusted for current exchange rates). Because the industry
is integrated into the American industry, Canada is affected by the
higher costs in the U.S., particularly which of health care. But here,
too, the answer is hardly to blame the workers, but rather to point to
the social and economic stupidity of the U.S. not having the kind of
single-payer public health care system that is common in the rest of
the developed world.

Union Shortfalls

Where the union can be blamed is not in what it has achieved for
working people, but in its refusal to play a leading role in
challenging the direction of the industry, especially in terms of its
laggard move to fuel-efficient, non-polluting vehicles. Saving future
jobs ­ and also addressing the thousands of lost jobs of former
members whom the bailout won’t bring back ­ necessitates correcting
that earlier shortcoming in two specific ways.

First, as absolutely essential as the bailout is, it won’t end the
crisis in the auto industry even if the Detroit-based companies adjust
their models. That’s because the industry has so much excess capacity
and slow growth will characterize at least the next few years, if not
beyond. This means that even as the union lobbies to achieve the
bailout, it needs to raise its perspective beyond auto. It needs to
start thinking about the application of existing facilities and skills
to a larger set of products. Here, the environment re-enters, but
rather than being a threat to jobs it holds out the potential of
adding jobs. If the environment is going to be seriously addressed in
this century, it will mean changing not just the kind of cars we drive
and how they are powered, but everything about how we work, consume,
travel, live. To that end, auto’s assembly, component and tool and die
shops, along with its body of skilled and committed workers, are an
asset that can be converted into producing wind turbines, solar
panels, parts for mass transit vehicles, more energy-sensitive
industrial machinery and more energy efficient home appliances.

Second, we need to move from thinking about saving the auto industry
to saving communities. The auto industry is concentrated into
particular communities that, like Windsor, were in crisis well before
GM asked for a bailout. What’s at issue is not just hanging on to jobs
in auto (which, as productivity grows, will continue to decrease over
time even with a bailout) but also finding productive jobs for all
those already unemployed or looking for their first job. To address
this crisis in the community means not only introducing new car models
and addressing the kind of conversions of Windsor’s vast productive
potential raised above, but also fixing and expanding Windsor’s
deteriorated infrastructure (like other municipalities, Windsor has a
long list of such projects sitting on the shelf) and addressing the
social needs that make cities into ‘communities’ (from resources for
public facilities and sports, to converting vacant lots into green
parks and gardens; from child-care to in-home assistance for the
disabled and the aged).

‘Leave it to the Market’ or Democratic Planning?

It should be obvious that none of this can happen if we ‘leave it to
the market,’ or even with some ad-hoc patchwork government
intervention. It requires serious national and city-level planning and
planning that develops the democratic structures to encourage and
facilitate popular participation. This takes us far beyond the auto
industry and many might say ’sorry, I’m too busy surviving to think
about that.’ But that response has a lot to do with why autoworkers
are in their current awful predicament. If there’s anything the recent
past teaches us is that if we don’t start acing on the future now ­ if
we think it will fix itself ­ then ‘later’ becomes too late, or at
least confronts us with even more difficult problems.

Survival tomorrow and in the future means daring to think and act
‘big’ today. What kind of country do we want? What kind of community
do we want to live in? How do we get there? •

Sam Gindin was the former assistant to the past two presidents of the
Canadian Auto Workers and is currently the Packer Chair in Social
Justice at York University.

One year prime mortgage rates at 6.5% are modestly lower than their 2007 highs of 7,35%.  However, despite the federal government’s implicit guarantee of half the insured mortgage market and an explicit program to directly purchase mortgage assets from major Canadian financial institutions the gap between the BOC’s prime rate and the 1 year prime mortgage rate has increased to record levels: the gap now stands at 4%.

Data source: Bank of Canada

The good thing about being a major Banker is that you don’t have to fly to Washington hat in hand begging for money. Washington will fly to you with suitcases stuffed with money. Not only does this help avoid the embarrassing costs of private corporate jet-time but it also avoids all those nasty public questions.

“Hi we are Citi bank and we are too big to fail…yes yes yes we will see you at 10 pm tonight…whats that? you are arriving on the first commercial flight from Washington…oh I see you are just going to walk across the street.”

The US government rode to the rescue of Citigroup, entering an agreement to guarantee up to $306bn in problematic assets and inject $20bn in capital to restore confidence in a bank that defines the term “too big to fail”.

The question is how many IOUs or SYAs can the US Government write with credibility?

As a young potter I was seduced by the immediate intimacy of cone 10 reduction glazes. They just gave-off a certain depth to what is after all a very thin surface. But this is not the only seduction of cone 10 reduction glazes: they do the heavy lifting of purposeful design work and leave the artisan potter to the business of form. Form and efficiency become everything safe in the knowledge that the design work is an auto-performance by the delicate dance between the right glaze and the right luck in the environmental parameters of your specific cone 10 reduction kiln. Most Kilns are so poorly insulated and what is worse so poorly sealed that it is very much a game of chance each time the kiln is fired. Sure after 5 years with the same kiln, after of course settling into the same glazes, there is a certain predictability to the the outcome–but god or chance is always in the works. Hence, depending on the size of your kiln, 2 two 6 times a year Christmas arrives early.

After a 10 year absence from the craft, I took up the trade again. My only access was to cone 6 oxidation. It turned out to be a really good challenge. As everyone who has produced and trained on cone ten reduction knows cone six oxidation is an object of scorn if not ridicule. Those potters, it is often heard, produce nothing but bread a butter ware: we cone ten reduction are the true risk takers.

My experience with cone 6 oxidation suggests the inverse. Many C10R potters rely on the seductive qualities of C10R glazes and at best fail to develop a conscious sense of deliberative design while relying on strong form, and at worst pass-off bad forms with complex gazes. In short, if you want complexity in an environment of cone six oxidation you have to try for it: the glazes will not deliver up accidentally or consciously complexity in surface treatment. Each layer of complexity has to be successively built up.

But after this observation I had the inclination to ask why cone 6reduction had not become popular. After all the difference in temperature between cone six and cone ten is not inconsequential to the economics of a pottery. Both the cost and duration of kiln construction can be reduced if the target temperature is reduced by a not inconsequential factor. Furthermore commercial cone six clay bodies mature (degree of verification) is comparable if not superior to cone 10 clay bodies. So why not cone six reduction? Potters could economize on the fix costs of kiln construction and on the cost of fuel. Perhaps there remains the belief that cone six glazing materials are more costly than cone 10 glazes thus the perceived cost savings is dulled.

I am not sure about that. Any non-fritted cone 6 glaze runs the same cost as a cone 10 glaze. The only exception being cone 11 translucent porcelains. But even here I am skeptical. Is it true that engineered cone 6 porcelains are less engineered than cone 10 or 11 porcelains? My personal opinion is that high fire cone 10-11 is anachronistic, a gross waste of materials and fuels but it may be that I am wrong.

Update: for a visual verification that cone 6 reduction can be just as interesting as cone 10 see this article in CM.

Contributions to the political economy of the welfare state from Canadian vantage point (Panitch 1977) took a decidedly less abstract position than both the American and British contributions compiled during the late 60’s and 1970’s.  Canada neither possessed the large oligopolistic firm structure and military industrial complex of the US, nor the centralized structure of the British state; nor did, or would it ever posses the capacity for auto-centric growth resting or decaying on imperial access to global markets.  For all these reasons the more abstract and contending claims about the functional role of the state and its relationship to the dominant and subordinate classes, although informed by the abstract dynamics of capitalist accumulation and the necessary relationship between capital and labour to the liberal democratic state, could ultimately only be settled, Panitch argued, through empirical and historical investigation.  Making the crucial observations that Canada was never governed by a laissez faire state —if by that one understands a minimal state which pulls little direct weight in capitalist development— nor a particularly reform liberal state —if by that one understands an activist state which attempts to ameliorate the substantive inequality of capitalism— but rather, and above all, by a pragmatic state alongside a pragmatic capitalist class.  As Panitch put it: “Unlike so many of our political analysts, Canadian capitalists have been good at distinguishing between a large state with major accumulation functions and a socialist state” (p.16).