The Sinister Side of Romance in North America

By Elleni Centime Zeleke

What has always worried me about couples in North America is that they replace the work of belonging to the world with the work of belonging to JUST ONE. And as such they take some of the most banal markers of adult life to be markers of maturity and achievement. In my experience, this tends to make North Americans childish in the most sinister way possible.

Another way of putting it is that couples attempt to overcome humanity’s present day alienation from the world by obsessing over the One. But what this means is that they mistake duty to the One as an end in itself instead of a way to open themselves up to the problem of solving alienation. This happens whether the couple means to do so or not. In a consumer based society achievement gets packaged as being able to amass goods for the empire of two (the couple) since survival of the couple must come at all costs. People spend their lives playing house, and what it means to be an adult is to master the game of monopoly for the sake of playing house.

In this case, being an adult gets reduced to satisfying needs–buying a house, clothes, feeding children. But after satisfying basic nutrition and keeping warm, our needs are socially constructed. Instead of investigating the source of the need, couples act like animals, chasing the satisfaction of their apparent needs when those needs in fact arise from elsewhere than their self-critical self–and yet what it means to be human is to be self-critical. Thus, in the name of love they pursue their own alienation and their own animality.

But in this sense then couples agree to guarantee each other’s childishness. After all, in the standard hetero-normative relationship you do not force the partner to take responsibility for the world. Instead, you stare into the other’s eyes and guarantee for the other that while they may feel alienated from the world, in the context of the relationship they will feel bonded with the One. Coupledom as we live it in North America is always a disavowal of the world. The husband or wife might do charity work or even be involved in politics but the structure of the love relationship is already enfolded into immaturity because it centres around protecting the other from confronting the alienation inherent to the world.

It is for this reason that North Americans often confuse their pets with children and lovers. It is because to love here is fundamentally a narcissistic activity. The least thing you want is for the Other to really talk back, and so truly open you up to the world.

But, this reminds me of a time when as a young woman I went to visit a family friend who was a political prisoner in a third world country. The prisoner had been in and out of the prison hospital, and he had been subjected to mild forms of torture and was already quite old. The prisoner was a family friend and he had heard that I was a feminist. He thought gender was not a wise way to organize politically, but all the same he spent the hour we had together engaging me around this question. A few months later the prisoner passed away and in retrospect I realized that the prisoner must have known that he was gravely sick and about to die even when I went to visit him, but throughout the visit he never talked about himself, nor did he complain about his health. Instead we talked about a world that was greater than both him and I but that tied us together as one. In this way he opened himself up to a life of love and generosity that also questioned the alienation that brought us before the prison guard. In this way, too, he insisted on forcing maturity and responsibility onto me.

That romance could always be this touching! For this I would be grateful. On the contrary, when men ask me to marry them here in North America, it seems they mistake the mastery of playing house with love and responsibility. How banal, and sinisterly so.

What this says to me, however, is that romance is the obsessive but failed attempt to overcome the alienation from things we have already made with our ancestors (and can remake). But the ideology that accompanies the invisible hand of market politics insists upon this alienation. Thus, the accompanying cultural concept to the invisible hand is romance, and it is romance as such that is the opium of the people. But in this case, romance is pure political passivity for it hardly contains a whisper of protest against the world as it exists.  More likely, it is accompanied by eternally unfulfilled personal relationships, which is probably why we cheat and divorce as often as we say “I love you”. It is also why I die a little death whenever I hear someone claim to love another, for sure enough the claim of love is soon to be accompanied by the violence of trying to full-fill what can never be fulfilled by romance through romancing some Other or becoming bored and depressed with the One. Turns out our expectations and experience of love tend to replicate our dissatisfaction with playing in the market, and yet we keep on looking for the One, playing make believe that this is the One, asking ourselves if this is the One, etc. All the while never really growing up to face the world that so desperately needs us to take responsibility for what we have made and need to remake together.

 

Krugman pins the tail on the Elephant

Krugman gets it right in both the pith and the substance of the matter on the overcompensated public sector workers in Wisconsin.  Short of it: they are not.  This is a must read.

The Contribution Scam

David Cay Johnston has a terrific piece up about the nonsense of comparing government workers to private-sector counterparts by claiming that the government pays for more of their benefits. As he says,

Dark, Dark Day in Wisconsin: What is the lesson?

The Globe reports:

The Wisconsin Assembly early Friday passed a bill that would strip most public workers of their collective bargaining rights – the first significant action on the new Republican governor’s plan.

Lesson:

There is no compromise to be made and thus centrist pragmatism is for fools.

Note: Wisconsin was once home to the once powerful school of progressive economic pragmatism in the US called the American Institutionalist School.  In many respects Wisconsin was at the centre of the development of new social democratic thought in the US.  So to understand how potent of a symbol this is imagine Saskatchewan became the first province to end public health care insurance.

I am a Homo and a Sapien* what is Paul Krugman?

Krugman is sometimes a dull example of all that is both right and wrong with mainstream liberals in North America.  Today Krugman auto deconstructs:

Ideas Are Not The Same As Race

I would get into the specifics of his post but the headline is so atrocious and such a shining example of why economists are simply undereducated in the social sciences, humanities and hard sciences.  Here is the short of it, both race and gender are ideas in that they have no scientific merit.   Take a look at this little graphic from wikipedia

See anything missing after species?  Yep, lower than that and they are just ideas, not necessarily nice ideas but ideas nonetheless.

His title is thus a non sequitur wrapped inside a false antithesis.

Sad really.

*Excuse the botched singular.

Still Made in America?

Greg Mankiw has a post up where he points his readers to an article at the Boston Globe where the author argues that claims about the decline of American manufacturing are widely exaggerated and bordering on hysterical.  Greg likes this article presumably because it goes against the conventional narrative and lefties that would use it as a foundation to argue for a real industrial policy, a currency re-evaluation on the part of the Chinese, or whatever other sundry ideas they might have.

The problem is that while Greg has gone to bed solid in the truth that absolute manufacturing output in the US has increased (I will show why this is a half-truth below) they are also sleeping on an absolute false truth in the belief that American manufacturing is more concentrated in medium and high tech production.

Anyway it is a confused article and I do not know why Mankiw calls it a “A nice piece by Jeff Jacoby.”

…..“Near the root of the unease for many of those polled is the worry that the United States no longer makes enough stuff.’’ When asked why US manufacturing jobs have declined, 58 percent cite off-shoring by American companies to take advantage of lower labor costs.

There’s just one problem with all the gloom and doom about American manufacturing. It’s wrong.

Americans make more “stuff’’ than any other nation on earth, and by a wide margin. According to the United Nations’ comprehensive database of international economic data, America’s manufacturing output in 2009 (expressed in constant 2005 dollars) was $2.15 trillion. That surpassed China’s output of $1.48 trillion by nearly 46 percent. China’s industries may be booming, but the United States still accounted for 20 percent of the world’s manufacturing output in 2009 — only a hair below its 1990 share of 21 percent.

Ok, so there is a confused set of claims here.  On the one hand, Jeff cites Americans’ belief that manufacturing jobs are being off-shored as evidence of an irrational anxiety but then says that this is an irrational anxiety because American manufacturing is growing every year.  It is like Jeff has never heard of the magic of productivity.  That is Americans could be right that they are loosing jobs in manufacturing but wrong in the assumption (if they make that assumption because the evidence cited in the article does not indicate they do) that absolute American manufacturing has decreased (which it has not).  Productivity makes both claims possible, thus neither irrational.  But rather than wave my hands in the air about who or who is not irrational let me just throw up some…you know data.

This graph shows US manufacturing value added as a percent of economy wide value added and employment.

Clearly relative to the total economy American manufacturing has been in decline and employment even more so.  I am going to go out on limb here and suppose that the declines in employment are significant enough to be absolute.  But whatever the case the relative decline of manufacturing both in terms of value added and employment has been significant enough that the sector is in value added terms is only 13% of the US economy.  In this sense Donald Trump’s observation sounds about right.

“We do health care; we do lots of different services. But . . . everything is made in China, for the most part.’’

One in ten jobs are in the US are in manufacturing.  Jeff recognizes this when he writes:

Part of the reason is that fewer Americans work in factories. Millions of industrial jobs have vanished in recent decades, and there is no denying the hardship and stress that has meant for many families. But factory employment has declined because factory productivity has so dramatically skyrocketed: Revolutions in technology enable an American worker today to produce far more than his counterpart did a generation ago. Consequently, even as America’s manufacturing sector out-produces every other country on earth, millions of young Americans can aspire to become not factory hands or assembly workers, but doctors and lawyers, architects and engineers.

But then he goes way-off track:

A vast amount of “stuff’’ is still made in the USA, albeit not the inexpensive consumer goods that fill the shelves in Target or Walgreens. American factories make fighter jets and air conditioners, automobiles and pharmaceuticals, industrial lathes and semiconductors. Not the sort of things on your weekly shopping list? Maybe not. But that doesn’t change economic reality. They may have “clos[ed] down the textile mill across the railroad tracks.’’ But America’s manufacturing glory is far from a thing of the past.

What Jeff is claiming here is that not only has American manufacturing become more productive, which it has, but that it has shifted into exotic high value-added product lines like sexy fighter jets and whatever version of Viagra American executives are gulping down.

Problem is, that it is simply not true.  In fact, the very best spin that can be put on the data is that medium and high tech manufacturing as a percent of total manufacturing has been stagnate since 1984 and the Reagan revolution.  In economy wide terms medium and high tech manufacturing (bottom plot) has stagnated with the rest of the US manufacturing sector.

Funny that Greg Mankiw should have such a relative definition of “nice” when it comes to a consideration of the facts and such an absolute definition when placing himself as the arbiter of sober second thought.

Understanding Corporate Tax Cuts: embracing conventional wisdom and coming to radical conclusions

Warning this post contains scenes of graphic illustration, it is not intended for short attention spans or people who can not locate coordinates in two dimensional space.  Viewer patience is therefore highly advised.

The debate on corporate income taxes brings out a really nice teachable moment in that it provides an occasion to clarify the terrain of past present and likely future debates on macroeconomic policy.  In what follows I will hew closely to the standard story, but what I intend to show is that even within the terms of the conventional collective memory there is an important contradiction that helps clarify what the real debate over corporate cuts ought to be about.  Let me see if I can deliver.

The conventional account of history runs something like this.  By the 1970s and early 80s unions had become too strong, unemployment insurance and welfare programs too generous and together they produced highly distorting macroeconomic outcomes: high unemployment, high inflation and low output (referred to at the time as stagflation).  Let me just accept this account for argument sake because I think it represents the story in the back of the head of most policy makers and economists over forty.  Let us represent this conventional story by line A in the diagram below.  Notice the oscillating line around A.  That represents the economic cycle.  From the vantage point of policy makers and economists over forty  the problem with the Keynesians is that they were preoccupied with stabilizing those oscillations when they should have been preoccupied with moving the economy towards line B.  Line B represents an equilibrium in which both employment creation and output proceed in a balanced manner.

Point Y represents the bad equilibrium that Keynesians were unwittingly fixated.  In their drive to stabilize the macro economy via employment they gave short thrift to output and thus created an inflationary environment which produced increasing high levels of unemployment, low levels of output and high levels of inflation. In time policy makers and economists shifted their attention away from cyclical stabilisation to structural change .  That is, from attempting to smooth the oscillations around line A to moving the macroeconomic trajectory from line A to B.

Notice that point Y does not entail a lower level of employment but rather a higher level of output.  And this was what was so seductive about the supply side arguments of that time.  What they in fact said was that it was possible to maintain employment and increase output provided the appropriate structural reforms were undertaken.  Everybody and I mean everybody wanted lower inflation and higher employment.  And in the face of stagflation the punters got onside and away we went.

My argument is simply this.  After the largely successful attack on trade unions was accomplished, after the reform of both welfare and unemployment insurance programs were completed and within the context of free trade and capital mobility the real impact of he structural changes was to move the economy to line C point Z.  That is to say, even granting neoliberalism was not some radical attempt to reconfigure income and wealth distribution between economic classes the structural reforms were more successful than its antagonists imagined and thus instead of landing on trajectory B point Y we landed on trajectory C, point Z.

When therefore there is the call to cut corporate income taxes it explicitly assumes that the Canadian economy is still stuck on trajectory A point X.  But if in fact we are on trajectory C, point Z; we are thus in fact stuck at a bad equilibrium.  The move to further juice up output without a commitment to juice up employment is like the Keynesians of yore trying to smooth the oscillations around a bad equilibrium. But this time around it is employment which is lacking not output capacity.

What does this have to do with corporate tax cuts?  Corporate income tax cuts are suppose to be a stimulus to increase the output capacity of the Canadian economy over the medium to long term.  But if as is widely recognized output is not the problem but employment why are we even talking about supply side measures (i,e. corporate tax cuts)?

I think economists are still fighting the last war and not the war we are in.  And as any historian of war will tell you an army that does so will loose.

Update: this is not as radical an idea as it may appear: see this article in the business section of the Globe online.  The difference with Canada is that I think are debt growth is papering over the underlying bad equilibrium.

Reading economists is fun: sort of

Krugman has a post up where he promises that he won’t comment on Egypt because he just can’t get his around their economy.  But he nonetheless feels free to wax and then wane on comparative revolution and ideology.  Cause you know that is just Astrology and thus anyone can play.

WTF.

O.K., ground control to major Krugman, nationalism is an ideology.  The form nationalism is taking in Egypt is this: we are a strategically important company and resource rich so why are trapped in a poverty spiral?  Whoa good thing it is not ideological hey.  And who the @#$% has attempted to frame this as: we Egyptians want to be Sweden aside from Krugman.  Paul you might not be in Davos but you sure are talking like you are in Davos.  Is this cocktail chatter with your dinner guests?

Between what economists get precisely wrong within in their own speciality and broadly and specifically wrong outside of it, one could be forgiven for wondering what they do with such an embarrassment of intellectual riches.

Why I LUV Naked Capitalism

How fked up is public discourse, pretty fked up if you ask me. All over the world, literally, unionised and non-unionised workers are being asked to take it on the chin for the GFC. Here is the money quote from the blog Naked Capitalism that lets the facts breath some fresh air:

If you live in the world according to the mainstream media, the row between state executives and unions is all about (by implication) greedy unions trying to preserve their perquisites when budget “realities” demand that they suffer. Consider this excerpt from a recent article New York Times article about the fight in New Jersey:

Across the nation, a rising irritation with public employee unions is palpable, as a wounded economy has blown gaping holes in state, city and town budgets, and revealed that some public pension funds dangle perilously close to bankruptcy.

Um, the “wounded economy” trashed the state budget? Funny how the article fails to point fingers at the real perp, which is the global financial crisis, brought to you by your friendly TBTF banks. Andrew Haldane, Executive Director of Financial Stability for the Bank of England estimated that the costs of the financial crisis was 1 to 5 times global GDP. If you were, as economists recommend, to try to tax them to recoup the cost of the damage they did over a period of 20 years, the charge would be over $1.5 trillion a year. That’s more than the market cap of the biggest global banks. Funny, their staff and executives got record bonuses in 2009. So maybe the unions have the wrong strategy. They need to screw up in a particularly destructive manner.

No. 8: We got effeciency here

For some I know this will seem a little too low on the list, but it is low because it really is low. When you are trapped inside GET (general equilibrium theory) reality is your enemy. Inside GET everything is tranquil–like a heroin addict after the needle is in and the payload delivered. In this exotic den of opium everything is tractable (well no really, Nash cooked this dream off like a poet in the night). Take a brave step away and not all that starts well ends well–and here we are not just talking about aggregation problems.

The efficient market hypothesis (EMH) not only claimed that financial markets were narrowly efficient as in they embodied all the relevant information and said information was conveyed in usably due time, but, also, that following Hayek such information was superior to any information that could be gathered and thus regulated by a central authority.

The outside play here was that ay attempt to regulate financial markets was doomed to failure because market participants would necessarily have at their disposal timely and thus superior information than public regulators. This argument got pushed so far that it was even argued that self regulation by private individuals would be superior as private actors would have better information. This logic of course suffered from a begging the question problem as in: if information is rapidly disseminated by market actors why can’t the state access that information and evolve policy and regulations in lock-step? That is to say, if information is efficiently conveyed why can’t regulators access and then use this information to regulate.

Two defences are available to the apostles of EMH. The first would argue that because the state is not a direct player in markets it in fact does not have access to this information. This is likely true, but the problem is that such a defence invites government participation in financial markets precisely so it can monitor and regulate the industry. YET, this conclusion is exactly the one EMH was designed to trounce. EMH was above all about the capacity of markets to auto-regulate. Why after all is the state needed when private markets are already efficient.

The second, and preferred, line of defence is then the argument that markets were efficient but the quality of the information was bad and that in time markets self corrected via what layman have come to call the Great Financial Crisis (GFC). Here the GFC is painted not as a crisis but an updating from poor information to good and is thus a confirmation of the EMF.

This second line of defence of course suffers from the obvious wrinkle that it boils down to the proposition that markets get things hopelessly wrong and that they can do so for such a prolonged period of time that the whole economy (not just finance) gets sucked into the vortex of ignorance. Presented as such the second line of defence is rather effervescent. For if the updating process takes such a long time and is capable of spreading bad information across a whole host of different markets from housing through to food and energy then the case for government regulation would seem strong.

But alas no! No because we only need to default back to defence one which is that the state does not have any better information than markets. But this only begs the question about the role of the state not just in terms of the regulator but in terms of a participant. In principle there is nothing that stops the state from becoming a significant player in financial markets: taking in information and then asking prudential third party questions.

In a nutshell those who would defend EMH via the second stratagem did so to avoid increased state involvement but then they have to defer to stratagem one in order to salvo the second. But stratagem one begs the question.

None of this is gainsaid by the obvious blooper that calling something efficient which demands that entire economies suffer the pain of “updating” is incredibly glib. Auto-regulation ought to imply smooth processes of adjustment. IF what EMH boils down to is that good information is turbulent which is eventually self-correcting after long period of pain then we really are back to the debates which raged before and after the Second World War.

My bet is this: Diamond and Fama will never win the Swedish bank prize but many economists will retain the ontological model in the back of their heads and demand no less from their graduate students.

A pity really.