The Economic Function of Militarism

Trump’s Foreign Policy and the American Economy in Decline

Vjay Prasad (2018)

Film Review

In this talk, Indian historian and journalist Vjay Prasad outlines the importance of militarism to the US economy, via a concept he refers to as “military keynesianism.” In so-called “sensible countries,” governments seek to ameliorate cyclical economic downturns by increasing spending on public services, such as health, education, public transport and social services.*

The technical term for this type of spending, first advocated in the 1930s by British economist Milton Keynes, is “countercyclical spending.”

The US also engages in countercyclical spending to prevent economic collapse during a recession – but on the military side. In Europe, one of the primary effects of public service spending is an enhanced sense of community. US elites prefer to keep the US population splintered and isolated because it makes them easier to control. They can’t take the risk of them banding together to push for reforms or revolution.

Although a military base operates like a mini-socialist state where the government takes care of every need, there is little risk a genuine egalitarian community will develop. This relates to the hierarchical nature of military life.

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*No elites do this out of the goodness of their heart. European social democracies increase public spending during recessions because their populations are well-organized and force them to do so.

China’s Declining Economic Miracle

The End of the Chinese Miracle

Financial Times (2017)

This documentary explores factors behind China’s declining economic growth and the potential effect on the rest of the global economy.

The filmmakers attribute China’s recent economic miracle to an explosion of young workers willing accept low wages in hundreds of thousands of factories manufacturing cheap consumer goods for the West. Over two decades, the lure of jobs has prompted the migration of millions of Chinese youth from the countryside to 88 super cities (the size of London) all over China.

Owing to demographics, this supply of endless young workers has stalled, causing average manufacturing wages to more than double. The global recession and declining demand for cheap plastic has prompted many Chinese manufacturers to move to Southeast Asia, where wages are much lower. Others are are illegally employing undocumented Vietnamese laborers smuggled into China. Not mentioned in the film, is the rapid replacement of Chinese workers with robots (see China Replaces Workers With Robots) .

Owing to the decline in good paying manufacturing jobs, many rural workers are returning to their families to work the land.

Meanwhile commodity exporting countries (eg Australia, China’s main source of coal) are being forced into recession as Chinese manufacturing declines.

 

 

Unemployed Youth: the Lost Generation

Recovery? What Recovery?

High youth unemployment is a defining characteristic of the current recession. Despite the so-called recovery, a fifth or more of young people under thirty remain unemployed. In most countries, youth joblessness is triple the general unemployment rate. In some regions with harsh austerity regimes, youth unemployment is increasing.

In the US the preferred approach to youth unemployment, both by government and the media, is to ignore it. Elsewhere the attitude towards youth unemployment is mixed. In Europe, the European Commission has appropriated $1 billion euros to address youth joblessness. Yet only Germany and Switzerland have come up with real solutions.

Pundits offer a variety of explanations for the stubborn problem of youth unemployment: globalization (i.e. jobs moving to the third world), automation (i.e. replacement of jobs with robots), the greed of baby boomers who refuse to retire (greasing the wheels for social security and pension cuts) and government policies that allow billionaires to suck all the money out of the economy for their personal pleasure.

An increasing number of economists see youth unemployment as symptomatic of structural economic changes related to the end of global growth. Despite all the corporate media babble about perpetual economic growth, the phenomenon is actually quite new. Prior to the harnessing of fossil fuels by the industrial revolution, all human civilizations were based on steady state economies.

Of the three documentaries below, the first, from Canada, is the best. Portraying youth unemployment as a permanent structural problem, it’s highly critical of the Canadian government for refusing to address it.

The four important points Generation Jobless (Canadian Broadcasting Corporation 2014) makes are

1) by 2030 half of all the current jobs will be gone
2) the “lost generation” (the 20% of Canadians under thirty who remain unemployed) is highly unlikely to ever land permanent good-paying jobs
3) Canadian universities are training young people for obsolete jobs instead of offering them new skills needed in the present economy.
4) Canada’s student loan program is a fraud – students are pressured to take on vast amounts of debt on the promise of good paying jobs that don’t exist.

The film disputes the frequent claim that a large aging population is a drag on the Canadian economy – the real drag on the economy is the underutilization of Canadian youth. This has drastic implications for the future health of the Canadian economy. Most of a society’s wealth comes from the skills of its workforce.

This first documentary also highlights two examples of programs that are successfully cutting youth unemployment, one at the University of Regina (UR) in Saskatchewan and the other in Switzerland.

The UR Guarantee program, which promising all entering students will be placed in a job on graduation, has a 97% success rate. From day one, the curriculum for all students includes career counseling and career education, consisting resume writing, interview skills and networking. Students also participate in an apprenticeship program in their chosen field, thanks to a cooperative agreement UR has with local businesses. Finally, they get a guarantee: any graduate who fails to find work in six months returns for an extra year (free of charge) to further hone their skills.

In Switzerland, youth unemployment is 2.8% (roughly a tenth of other industrialized countries), thanks to a high school program that allows them to start an apprenticeship at fifteen. The Swiss Employers’ Association helps local high schools set up their apprenticeships, which include white collar fields, such as health care, banking and IT, as well as the traditional trades.

The 2013 BBC documentary Young and Jobless is less hard hitting. Unlike the CBC documentary, it fails to emphasize the failure of the British government to acknowledge or address the problem of youth unemployment. In fact, it tends to trivialize the problem by comparing superficial snapshots of youth unemployment in different countries.

That being said, there’s an excellent segment about lawsuits American young people have filed (and won) against corporations that have exploited them via unpaid internships.

I was also intrigued by the number of countries that deal with youth employment by encouraging young people to emigrate (as we do in New Zealand). In Spain, for example, there are specific programs to assist Spanish youth in locating jobs in the UK. In contrast, Irish youth are encouraged to emigrate to Australia.

Video 3 Young, Jobless and Living at Home is a 2014 BBC documentary about the “boomerang generation,” the growing tendency of young people under thirty to move in with their parents, either because they can’t find jobs or because they can only find low paid, part time and/or temporary work that doesn’t cover their living expenses. Radio DJ Grey James follows six unemployed youth for six months.

The statistics say it all: in 2014 20% of young Brits under thirty were unemployed but twice as many (40%) were living with their parents.

photo credit: Caelie_Frampton via photopin cc

Also published in Veterans Today

Economic Justice: the Rolling Stone Version

(This is the first in a series of posts about ending the right of private banks to create money.)

In January Jesse Myerson, writing in the Rolling Stone, called for five seemingly radical economic reforms in an article entitled Five Economic Reforms Millenials Should be Fighting For:  guaranteed jobs for everyone, Social Security for all (a guaranteed Universal Basic Income for all citizens), Land Value Tax (which I blog about in Progress and Poverty ), creation of a Sovereign Wealth Fund (enabling government to buy back and own public assets), and a state-owned bank (like the Bank of North Dakota) in every state.

Personally I found the article disappointing and a little sad. Myerson seems to deliberately overlook the most pernicious problem in our present economic system:  the power we give private banks to issue and control our money supply.

Contrary to popular opinion, the government doesn’t issue money, except for a limited amount of notes and coins. As the film below explains, 97% of the money supply is electronic and created by private banks when they issue loans.

A lot of people have the mistaken impression that banks use other depositors’ money when they loan us money to buy a house. What actually happens is that the bank creates the money out of thin air by entering numbers into a computer.

Another common erroneous belief is the the Federal Reserve, which serves as the US central bank, is a government agency. It’s not. It’s a consortium of private banks.

97% Owned (Positive Money 2012) makes the case that the only solution to the current economic recession is to ban private banks from issuing money. They argue for making money creation publicly accountable by restoring this function to government (ironically this is where most people mistakenly believe it lies). Until we make this happen, private banks will continue to use their control of the monetary system to undermine genuine economic and political reform.

A Rebel Comes of Age by Stuart Bramhall

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I was really touched by this review, by a teen blogger, of my young adult novel. It gave me a warm fuzzy feeling that “teenage-related problems” made the book seem more real for her. Her revelation that she has never read a book like this also grabbed me. I guess it’s pretty rare to encounter books on protest and political change in modern bookstores and libraries.

Is a College Degree Worth the Cost?

The Best Educated Janitors in the World

Given the $962 billion Americans owe in student loan debt, it seems reasonable to ask what a college degree buys them in employability and future income.

Not much according to a recent Online Degree feature revealing that 33,655 PhDs and 239,029 master’s degree recipients are on food stamps. American janitors are the most educated in the world, with 5,000 of them holding doctorates. According to the Bureau of Labor Statistics, approximately 1/3 of US college graduates work in jobs not requiring a bachelor’s degree.

Peter Schiff’s recent encounter with college grads in New Orleans is also extremely revealing:

photo credit: an untrained eye via photopin cc

Crossposted at Daily Censored and Veterans Today

 

In Defense of Smokers

As a doctor, I’m well aware of the negative health effects of smoking. Studies show a life time of smoking subtracts an average of ten years from your life expectancy. I’m also aware of the considerable health costs of treating smoking-related illnesses, such as chronic bronchitis, emphysema, heart disease and stroke. Other studies suggest that non-smokers actually generate higher health care costs because they live ten years longer. This research receives limited publicity. The Center for Disease Control prudently chooses not to promote the cost savings associated with premature death.

Owing to a chronic sinus condition, I’m also painfully aware of the effects of second hand smoke. Prior to the public ban on smoking, I had no choice but to avoid public areas (restaurants, bars, theaters and even airplanes) where smoking was likely to occur.

The Stigmatization of Smokers

However, as an organizer and civil libertarian, I’m also extremely wary the increasing stigmatization of smokers – especially when I read that employers are using “smoker status” as a justification for not hiring people. In this regard, I think the right wing may be justified in labeling liberals who lobby for smoking bans as “green fascists.” In an era were corporate and government interests are looking for every possible opportunity to pit working Americans against one another, it’s counterproductive to be hypercritical of lifestyle choices.

Most progressives know better than to stigmatize the unemployed and homeless. Yet many of us don’t give a second thought about villainizing smokers, alcoholics, fat people – and, might I add, gun owners. All four are popular targets right now. I blame this on liberals’ willingness to embrace what is essentially conservative ideology – the need to take “personal responsibility” for our lives.

The Cult of Personal Responsibility

Taking “personal responsibility” simply ain’t going to cut it right now. Not for millions of unemployed Americans, nor the million plus homeless, nor for thousands of families facing imminent foreclosure and/or eviction. And singling out designated groups for bad lifestyle choices distracts us from the real problem in the US – a concerted attack by Wall Street and our corporate-controlled President and Congress on working people.

Decades of epidemiological research (see prior blog on Dr Stephen Bezruchka) show that lifestyle choices account for only 10% of the causation of illness. If we’re really serious about improving Americans’ abysmal health status (near the bottom for industrial countries), it’s time to address the real cause of poor health. Study after study shows a direct link between their extreme income disparity and Americans’ high rate of both acute and chronic illness.

It’s time to focus on the real problem – the corporate deregulation and tax cuts responsible for extreme income equality in the US. Instead of scapegoating smokers and fat people.

photo credit: cszar via photopin cc

A Novel Bipartisan Solution to the Economic Crisis

Re-Solving the Economic Puzzle

Walter Rybeck 2011

Book Review

What if there were a single, simple solution to the current credit/debt crisis? What if mere tax reform could end the recession, repay public debt, and reverse growing income inequality? What if this tax could also end real estate bubbles and speculation and reverse urban decay and sprawl? What if it could also make cities and states more financially self-reliant, thus reducing their reliance on federal subsidies and the size of federal government?

It all sounds highly improbable, doesn’t it? But Walter Rybeck, a former urban affairs official in the Johnson, Nixon and Carter administration, claims that widespread adoption of a  Land Value Tax (LVT) would accomplish all these objectives. What’s more, political thinkers across the political spectrum (e.g. Patrick Buchanan, Milton Friedman, Michael Hudson, Martin Luther King, Paul Krugman and Joseph Stigliz) have all spoken in favor of this type of tax reform.The LVT, which taxes unimproved land, dates from pre-revolutionary times. Prior to the enactment of the Federal Income tax in 1913, most public services were financed locally via an LVT. Progressives like it because it shifts the tax burden from small business and low and moderate income families to real estate developers and speculators. Conservatives like it because it shrinks the size and role of federal government, as well as leading to a reduction in company and income tax.

Here is what conservative free market economist Milton Friedman had to say about Land Value Tax (The Times Herald, Norristown, Pennsylvania; Friday, 1 December, 1978): “We need taxes. So the question is, which are the least bad taxes? In my opinion the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago.”

Ending the Monopoly on Land Ownership

Like Henry George, author of the 1879 Progress and Poverty, Rybeck proposes to end the ruling elite’s monopoly on land and natural resources through tax reform – by gradually replacing income, company, sales, and property taxes with a tax on unimproved land and resources. As he explains in Re-Solving the Economic Puzzle, land is the ultimate source of all wealth. In the US 3% of the population own 95% of private land. Ted Turner alone owns two million acres, equivalent to nearly two Rhode Islands. In many cities, a few wealthy families own all the prime downtown sites.

Rybeck’s definition of land includes all the natural resources accompanying it – soil, forests, game, grazing rights, water, oil, gas, minerals and the electromagnetic waves (broadcast, cellphone, and wi-fi spectrum) above it. Like Henry George and modern Georgists, he argues that land and resources should be public property. Because no one produced any of this stuff, no one has a right to claim an exclusive monopoly over it.

According to Rybeck, our current system of taxing labor and productivity is grossly unfair to all but the top 1% of Americans. Besides being more equitable, the LVT also ends curbs the real estate speculation that leaves vast areas of American cities vacant. Setting land taxes too low inadvertently rewards landowners for keeping land vacant or turning it into parking lots.

High land vacancy rates were already a major problem during the Nixon administration. In 1970, cities with a population of 100,000 had a 22% vacancy rate, and those over 250,000 a 13% vacancy rate. Thanks to the 2008 economic crisis, an epidemic of vacant foreclosed homes has massively increased this urban blight. Worse still, low land taxes reward middle class families for moving to the suburbs. In doing so, they abandon expensive infrastructure (water, sewage, lighting, schools, etc) that was created to accommodate them. As they spread out into sprawling suburbs, taxpayers must fund new infrastructure.   

Cities and Countries Successfully Adopting an LVT

The final third of Re-Solving the Economic Puzzle relates the success stories of the 25 cities and five countries that have spared themselves economic disaster by adopting an LVT. The communities Rybeck singles out include

• California Irrigation Districts (1887)
• Fairhope Alabama (1894)
• Arden Delaware (1890)
• Cleveland (1901)
• Pittsburgh (1913, 1979)
• New York City (1918)
• Miami (Ohio) Conservancy (1929)
• Rosslyn Virginia (1950)
• Southfield Michigan (1960)\Harrisburg and 15 other Pennsylvania cities (1980-1990)

Sadly many of these communities subsequently caved in to special interests and began taxing capital improvements, rather than land values. Those who did so are confronting a major debt crisis, as well as decaying schools and infrastructure.

Pittsburgh, one of the backsliders, saw the error of their ways in 1979 and instituted a gradual return to what Rybeck refers to as a two-tier land tax. At present, Pittsburgh taxes unimproved land six times as heavily as improvements. The resulting revival of their central city is referred to as Renaissance II. Thanks to their Land Value Tax, Pittsburgh didn’t experience the same real estate bubble as other US cities. Thus their housing market didn’t collapse in 2008. In addition, their current foreclosure rate is the lowest in the country.

Countries which have adopted an LVT include Hong Kong (1843), New Zealand (1878), Denmark (1912), South Africa (1916) and Taiwan (1949).

To learn more about Land Value Tax, check out the LVT Facebook page.

Reprinted from Veterans Today

The Rally

A Rebel Comes of Age – release date Dec 21, 2013

Another Excerpt from my young adult novel (from Chap 22)

When Clemente finally took the microphone, the stretch of McDonough between Patchen and Malcolm X was wall-to-wall people. The hip-hop activist, an attractive, thirty-something Latino woman with short, curly black hair and enormous gold ear loops, wore a dark blue hoodie in honor of Trayvon Martin.

“Brothers and sisters, look at us,” she proclaimed. “When hip hop fights back, watch out.” At this, the crowd broke into ecstatic applause, accompanied by whistling and cheering. When the uproar died down, she called up all eighteen Freedom House residents and their sixteen Mandela House counterparts and lined them up on either side of her. “This isn’t a building we’re fighting for today. We’re here to support this phenomenal group of young people. They are our soul and conscience. Like Van Jones says, it’s time to change from fighting against something to fighting for something. No matter what we believe, what we all want, nothing advances or happens without organizing. Lots of it.”

Reverend McLeod came to the stage in a dark gray ski jacket rather than his usual suit and overcoat. Ange assumed that this was to distinguish between his activist and ministerial role. He began by complaining how sick he was of Wall Street’s longstanding pattern of theft from the African American community.

“Yah suh,” a woman in the front row came back, as if they were in church.

“First, it was our supermarkets, then our schools and now our homes. Surely the time has come to say enough.”

“Um-hmn,” the woman agreed.

“The time has surely come,” another woman echoed.

“Marches and rallies aren’t enough to check this power. The time has come, brothers and sisters, to put our bodies on the line. As Reverend Martin Luther King did. People of conscience are called on to break unjust laws, just like our brothers and sisters in Occupy Brooklyn who secured a home for brother Carasquillo and his family.”

He paused dramatically for this to sink in. “Where will you be, brothers and sisters, when the sheriff comes to put these young people out in the street? Will you all be comfortably at home watching American Idol or whatever nonsense they are showing now? Or will you be here with them?” His voice soared. “I tell you where I will be, brothers and sisters. I will be here in front of this building. No matter if the sheriff’s officers come at dinner time or midnight or three in the morning, they will have to walk through me.” He paused again. “Who will join me?”

The reaction from the crowd was stunned silence, followed by quiet murmuring. When Ange turned to look around, she saw the ten live-in protestors and six Occupy activists tentatively raise their hands. “Um-hmn-um,” McLeod vocalized reprovingly. “Looks to me like a long, lonely night.”

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A Rebel Comes of Age can be pre-ordered from the following links:

• Kobo: A Rebel Comes of Age

• Apple ibooks (iTunes): A Rebel Comes of Age

• Nook Book: A Rebel Comes of Age

• NEW:  Kindle edition:  http://www.amazon.com/dp/B00HAPBLB0

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An Occupy Wall Street Novel

My new novel, A Rebel Comes of Age, is scheduled for release (as a $3.99 ebook) on December 21, 2013.

It’s a sequel to my first young adult novel, The Battle for Tomorrow. In the first book, sixteen-year-old Angela Jones is arrested and sent to juvenile hall for participating in a blockade and occupation of the US Capitol. The sequel takes place a year later, when she and four homeless teenagers occupy an empty commercial building owned by Bank of America. Their goal: to transform it into a teen homeless shelter.

Over the next five months, they work through all the typical problems of inner city teenagers – including raging hormones, the temptation of drugs and alcohol, racial tensions, and pregnancy – as they struggle to win community acceptance. When Bank of America obtains a court order evicting them, the adventure turns deadly serious as they realize lives are on the line. When the other residents decide to use automatic weapons to keep the police SWAT team out, Ange experiences a major personal crisis and is forced to re-examine her attitudes towards guns and violence.

The Lost Generation – Life After Work

A Rebel Comes of Age explores the question of life after work. In the five years since the 2008 economic meltdown, 25-40% of 18-30 year olds still find themselves permanently excluded from the workforce. What we are looking at, in essence, is an entire generation sidelined to the fringes of society. Despite all the government and media hype, the capitalist economic system is incapable of creating jobs for them.

We are all conditioned to believe that life without full time work is unlivable. I seriously question the validity of this viewpoint. As a species, human beings occupied the planet quite happily for 250,000 years without selling their labor to a wealthy elite. Two centuries ago, the concept of waged work was virtually unknown, and most of the world’s current seven billion inhabitants are officially classified as “unemployed.”

With more equitable distribution of economic resources, freeing people from the drudgery of work opens up infinite possibilities for more creative and socially productive activities. Some analysts attribute the Arab Spring and Occupy Wall Street to unemployed youth taking up social and political activism as an alternative to work.

A Rebel Comes of Age provides a brief snapshot of a group of homeless, unemployed teenagers who find themselves building a movement, without quite realizing this is what they are doing.

My next post will feature an excerpt from Chapter 1.

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A Rebel Comes of Age can be pre-ordered from the following links:

• Kobo: A Rebel Comes of Age

• Apple ibooks (iTunes): A Rebel Comes of Age

• Nook Book: A Rebel Comes of Age

• Kindle edition available after Dec 15

 

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