The Dull Compulsion of the Economic (i)

I’ve decided to revive this series of posts. I hope to post weekly or bi-weekly, with links and original commentary. First, links:

(1) Friday’s employment report was horrific enough, with 600,000 job losses for January, and an unemployment rate (which undercounts significantly) surging from 7.2% to 7.6% in a month, but less noticed were the really crazy developments in productivity levels….

(2) This is all we need…

(3) A nice piece by The New Statesman’s Peter Wilby on Margaret Thatcher’s plan to “abolish” the working class by creating an ownership society (20 years before the term became current), and where that’s led.

(4) The incomparable Yves Smith links to the ever-stimulating Steve Keen on the credit system and Bernanke’s ever-desperate monetary gyrations. Keen–not a Marxist, by the way–quotes Marx’s keen anticipation of even so-called “post-industrial” crises, but with a typically intriguing concluding twist:

“A high rate of interest can also indicate, as it did in 1857, that the country is undermined by the roving cavaliers of credit who can afford to pay a high interest because they pay it out of other people’s pockets (whereby, however, they help to determine the rate of interest for all), and meanwhile they live in grand style on anticipated profits.

Simultaneously, precisely this can incidentally provide a very profitable business for manufacturers and others. Returns become wholly deceptive as a result of the loan system…”

One and a half centuries after Marx falsely predicted the demise of capitalism, the people most likely to bring it about are not working class revolutionaries, but the “Roving Cavaliers of Credit”, against whom Marx quite justly railed.

(5) Interesting developments across the pond:
– UK considers mutualizing nationalized banks (banks and building societies (rather like S&Ls) were demutualized during the privatization craze; may be helpful to contrast this with link (1); and

– New Labour plans to “partner” with private sector to create jobs fails due to lack of interest by the latter.

Finally, my commentary:

Lisa Kellaway’s “Second Life”

Lisa Kellaway of the Financial Times is a curious character. Witty at times, her comments on the world of work (her FT column is entitled “On Work”) are overwhelmingly skewed towards the high-end, and her advice tends to internalize the ethos of the ruling–if not robber–class to a ridiculous degree. Still, nothing prepared me for the the column she wrote for last Monday’s edition. In it, Kellaway seems to make the claim that the sense of foreboding of many workers (even of the sort Kellaway is comfortable writing about) is, to no small degree, an effect of the seemingly sensationalist effect of the internet: its worldwide scope compresses the unusual, particular experience of isolated individuals and makes them seem far more characteristic of the world as a whole than the phenomenon might otherwise be. In fact, she claims that commentary and coverage of the current crisis saps consumer confidence, and hence redoubles the severity of the downturn. Also, she hearkens back to a golden age (the Great Depression, maybe?), when, isolated from such a cacophony, she would have confined her curiosity to recognized, established organs, got on her bike, and simply gone to work, as opposed to being reduced to a clearly irrational state of anxiety.

This is highly offensive. I personally have made the acquaintance of three people in the last month alone (not counting myself: I’ve been looking for steady work for over a year now) who have not only been “displaced” by the crisis, but have endured travails the like of which Kellaway almost certainly will never see or report on. In my last temp job, I worked with a middle-aged woman at a $12/hr position (sans benefits, of course), long (20 years) employed at Harvard Law School (she lost her job 1 1/2 years ago when the program she worked for moved to Berkeley), who told me she would have to sell her house for a loss and possibly take her two kids out of college because she couldn’t find work. When I left, I left early so she could–touchingly gratefully–take my paltry 8 or 16 hours to finish the project. Now I work for a large custodial bank which is laying off its staff in droves, leaving mostly temps behind. One of the women (another “contract worker” who doesn’t get bereavement compensation) I work with was out all last week because her best friend committed suicide, seemingly because he felt he couldn’t provide for his family after a layoff. All of the members of my team will probably hit the street by summer, when the (official) unemployment rate will almost certainly push 8%, and perhaps be much higher (and, probably, long after Obama is forced to abandon his push to universalize–in his sense of the term–health care). Meanwhile, another acquaintance was laid off. He has a highly disabled child, and was a 20-year veteran of the firm. Apparently he got a reasonable, if not good severance package. But the way he got laid off may have been revealing: he was let go on a Friday, but had taken the previous Thursday and Friday off to–you guessed it–take care of his child and work from home. On Monday, his cube was bare, as if no-one had ever worked there. I wouldn’t be surprised if they fired him on the phone, and instructed him that a cab was coming with all the stuff they’d got out of his desk. This is a serious step towards the “death-row” version of employee relations.

Anyway, my experiences alone show how shallow Kellaway’s musings are: this crisis isn’t some sort of internet fad, though this may come as something of a shock to its members who rely on Kellaway to apprise them of the state of their underlings.

Larry Peterson

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Chris Sturr

Chris Sturr is co-editor of Dollars & Sense magazine.

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