Demand, Don't Succumb
A short term program addressing getting out of the current economic crisis...
The current economic crisis disrupts an already monumentally despicable system. The crisis makes what is horrible, horrific. But what can one do?
Is it useful to propose paths forward that lead back to the past? Should we celebrate attitudes that have no hope for anything more than recycling attenuated hardship? Should we proceed as if we have not even an inkling of an inclination to seriously change basic economic relations? Or should we get radical?
When elites look at a crisis that threatens the whole system, they too want to get out of it. But they want to minimize their own losses and ensure that the path out of temporary crisis doesn't reduce their advantages for the long haul. They want to escape current disaster, yes, but they also want to avoid what they consider permanent disaster - a system that works, but not solely, or even mostly, for them.
In other words, for those pulling the policy levers, the highest priority is not fixing things but avoiding long-term losses for owners and to a lesser degree for managers and other rich folk. True, the government's concern is not for each and every rich person. Some of the most transparently egregious money hoarders will be tossed under the proverbial bus, so to speak. The government's concern is for the money hoarders as a whole. The government's intent is to maintain the relative position of the owning class.
Thus, government proposals to escape the current debilitating disruptions and ward off impending disasters are constrained by what policy makers consider allowable. By dictate, corrective policies are not allowed to substantially raise the relative power of working people. That is the bottom line constraint that leads our government to enact half assed programs that pour social assets into rich people's institutions while not even considering for a second the possibility of stimulating the economy via charging the rich and benefitting the rest.
It is as if someone's heart stops and the defibrillator is parked right near the patient's bed. However, there is also a silent order from the Hospital's administration - a kind of unspoken bylaw of medical policy - doctors cannot use the defibrillator. Doctors, and in our case it is doctors for the economy, have to resurrect the dying patient, but they can't do it with the defibrillator. What is the "defibrillator" the economic doctors have to avoid? Redistribution of wealth and power.
The two most obvious elements of the economic mess the economy is currently spiraling ever deeper into are housing and jobs. This is not the whole of it, by any means, but let's focus on these two aspects, here.
Houses were overvalued - the famed housing bubble. As housing valuations came back to earth, foreclosures ensued and banks lost assets. The banks' financial problems are hard to track due to incredibly convoluted trading of mortgages wrapped up in "leveraged" securities that are sold again and again among the rich. But the basic situation - the collapsing investment values of the banks, and the declining house values and increasing mortgage payments of homeowners, together percolate into massive foreclosures, reduced bank loans, and reduced consumer spending. Declining revenues from the resulting curtailed sales then produce more cuts in lending and still less spending. It all reduces demand for final products which in turn causes cutbacks in their production. The production cuts lead to pink slips.
Next, those who lose their jobs, or who start to fear losing their jobs, defensively cut back their consumption, whether they have housing problems or not. Now we are in a real mess because this in turn leads to more firms reducing output, which means they fire more workers and have no jobs available for those who have been fired elsewhere. Housing begets slowdown begets firings begets more slowdown begets more firing.
Other dynamics contribute, and radical and even a few mainstream economists have been offering plenty of good analysis of the very detailed proximate causes that have been at work. What has been largely missing, however, is commentary that clarifies that it isn't greedy individuals but an institutional framework called capitalism that brings the disruption and that compels escalating exploitation of the poor. But the issue that is getting even shorter shrift is formulating plausible, desirable proposals for going forward.
Now I don't mean to say that finding such proposals is easy. I don't begin to understand macro economics - and I studied it in school, oh so long ago - though sometimes I wonder if the professional economists have all that much better understanding than me, or than the average person getting evicted or being handed a pink slip. Maybe the proposals I offer below would do the trick - or perhaps they would have effects I haven't foreseen that would need to be addressed by refinements. Maybe they would even have problems that would make them unwise or counter productive. That all has to be assessed. What I am sure about, however, is that the attitude behind the proposals offered below is very different than the most prevalent attitudes all around us. And we need new attitude.
Regarding housing, to start, how about we simply pass a law, no more foreclosures. Period. It is not allowed. No one should be denied their home because of a crisis which has enriched the rich at the expense of the poor. Oh wait, we need a caveat. If mansions are foreclosed, so be it. No house valued less than, say, $1 million can be foreclosed. More than that, no problem. So we start with the end of non rich people losing their homes due to the crisis. Up until when we win the no foreclosure act of 2009, of course, we should continue to organize to prevent foreclosures case by case and to forcibly forbid evictions, as part of making the more comprehensive demand.
But if the banks et al. can't foreclose, because we block their doing so, or we win a new law, what is to prevent people from simply ceasing to pay their mortgages? Answer: that's not allowed either, unless, that is, one can make a case that paying is beyond one's means due to the crisis affecting the value of one's home, the mortgage interest rate, or one's income. If any of that pertains, the mortgage is refinanced so it matches available means.
How do we determine people's available means? Life is messy, and no procedure will be perfect, but how about all those who say they must refinance due to crisis conditions, and who live together in a legislative district, must gather together, present their cases openly, and then collectively settle the rates for their rewrites. The district's legislators help and mediate. So do local high school civics teachers. They all facilitate.
Legislative districts are by the new law entitled to some total write down percentage on the sum of all their homes. The lower the average income if residents, the more overall write down is allowed. Yes, this means we are redistributing. Indeed, it is best to do that at every opportunity. Within a neighborhood, in light of its total write down options, and helped by legislators and high school teachers, neighbors who are seeking to reset their mortgages must cooperatively negotiate with one another the percentage of that total write down that each petitioner should have, given each person's plight as compared to the plight of others.
In other words, people in the legislative district have to act together in light of their relative real needs, taking account of one another, in order to move the process forward. It is all done in public, in participatory, assembly style meetings. Full cases are offered. Maybe local journalists can investigate the veracity of suspect claims.
Will some folks offer deceptive stories and get away with some lies and thereby gain when they shouldn't? Yes, it could happen in some cases. But so what? They have been ripped off of their dignity and material well being for ages. Anything that exceeds propriety after such public negotiations wouldn't begin to approach in scale or in impact the venality of what the rich do daily, much less what they do with taxpayer-financed bonuses.
This housing approach would, of course, cut into the profits of many institutions. But that is not a problem, it is another virtue. Can we get that straight? We leftists who are concerned with justice do not genuflect to profit. So why do even leftists often act as though profits declining is a bad thing? Oh, yes, I know, it's because if profits drop, owners want to stop operating their workplaces. It turns out, therefore, that we need to impose another law.
Any business with more than 20 employees or more than $5 million in assets cannot stop operations due to feeling that profits are going to be too low to warrant continuing. To retain their legal claim to own a profit making firm, owners must do their best to operate it to meet social needs. We are enduring a crisis. Owners should bear the brunt of the cost. Do owners want a supplement for lost income? No problem. They should try working.
What would give this law teeth? Any owner of any firm that wants to forego serving the public interest by ceasing to produce and distribute to meet needs is free to personally stop. That's their choice. However, having chosen to stop, the owners' firm is immediately turned over to the workforce and the surrounding community to keep it operating. The owners' deed to the firm is abrogated. And there is no selling to overseas buyers, either, or moving the firm's residence. Try any of that that, and the firm is turned over to the employees. That's society's choice.
What about employment? Demand has already dropped and is dropping further. To deal with needing to produce less output due to facing reduced demand, firms fire workers. We don't want that, so we need another law. There will be no firing until the crisis is passed. None. We don't want firing, so we outlaw firing. The owners won't like that. Tough. They are the masters of the old universe, not of the one we want to live in.
But how can owners keep just as many workers, yet produce less output? They can cut back hours for each worker. That way they keep all their workers employed but they can also have a total output at whatever level is needed. But wait - unless we make another rule, cutting back work hours would reduce overall incomes the same as just some people getting pink slips would. It would reduce overall demand and continue the spiraling problem of less demand inducing less production causing less demand, further reducing production, etc. Well, we can just adapt our new law.
Firms can and should cut hours in order to not overproduce when output must be reduced to avoid waste. That's fair enough. However firms cannot cut their total wage bill. Worker income cannot suffer due to the shortening of work time. If a workers' hours drop from 40 to 30, say, or more likely from 60 or 50 to 40, he or she still gets paid the total that he or she was earning at the greater number of hours. This means we are raising hourly wages. If you get the same income for 30 hours as you got for 40 hours and you were earning $10 an hour before, now you must be earning $13.33. With this approach, the total wage bill does not drop. Demand does not drop. Workers are working fewer hours, but with no cut in their total incomes. Additionally, we can impose that hourly wages cannot be cut during the crisis - at all. So be careful owners. If you unwisely cut back production, you will have to raise hourly wages. If you later increase production back up, increasing hours for everyone, you will have to maintain wages at their elevated level! It is probably better to drop your prices a bit and sell more, than to cut production when purchasing power declines.
Let's suppose those hearing this program are really relentless about pursuing justice. They say, hold on, what about the millions of currently unemployed? Why should they continue to suffer? So let's deal with that too. How about, right off, all firms must reduce the work week of all staff by 10%. Then, to keep producing at current levels, they must immediately hire new employees to make up the ensuing loss in output. At that point, if the firm wants/needs to reduce hours further for everyone, so be it - wages stay up - as described above. But then someone points out that all this extra wage burden will decimate profits. But our reply is: so what? You bet it will. That's the point. For at least the duration of the crisis - and we can hope this kind of thinking will catch on and persist forever - owners will have to operate pretty much without profits, and even taking losses, which means we are finally redistributing in the ethically and economically right direction.
So what have we got?
We have no more people losing their homes. We have no more exploitative mortgages ruining lives. We have no more pink slips being handed out. We have new jobs for the currently unemployed, and yes, enlarging green jobs and expanding education and other infrastructure are totally compatible with and would be enhanced by all this. The above would fit with, and advance, additional programs to have local banks under community control finance socially valuable projects, provide loans to firms in trouble with conditions requiring enlarged worker participation in decisions and reduced wages for executives or profit sharing with all workers and perhaps even the surrounding communities, raised emission standards, etc.
But even just addressing the two aspects highlighted in this essay, we also have increased wages per hour for everyone (or better, for everyone below some high target wage level) - and we have lots of new taxes on all that income for additional socially worthy programs. We also have workers enjoying leisure. And we have that the only people hurt by it all are the rich, and quite properly so. It is not, however, a punishment for bringing on the crisis. They didn't bring it on, capitalism did. They are losing wealth because they have too much, and need to be pulled back into this universe.
Okay, is there some technical problem in all this? Probably there is. After all, the system is so ingrained to go berserk about even the most minuscule deprivation for the rich that there are bound to be many additional regulatory features needed to avoid a berserk system. Or maybe the whole proposal needs an overhaul. The point is, we need to conceive seriously radical options that can actually lead where we ought to be going. And then we need to fight for them.
In other words, leftists should have demands that represent our desires, rather than having demands that assume that our desires shouldn't be uttered in polite company.
If we aren't strong enough to win all the above, we work toward getting that strong. More, having demanded all the above, we will have so scared the rich and powerful about what kind of activism may be just over the horizon that they will agree to more than they would otherwise. We will have also opened the debate, begun the thinking that can lead forward, not back.
More, just because we have a comprehensive program giving a coherent logic to our desires doesn't mean we seek nothing less, but on the way to that program. In workplaces and neighborhoods workers and residents pursue tactics, strategies, and local demands that make sense where they are. The overarching program discussed here means to provide a context in which local activity can better take place. It means to indicate where local activity should aims and threaten to go.
You know the old joke about the economist who is trying to get a can of soup open on an island. Everyone else is trying to figure out how to get the top off the can by cleverly banging the can with sticks, or by carefully utilizing rocks to squeeze it, or maybe using a fire to make it explode. The economist, delusional and devoid of concern about being delusional, simply says, assume a can opener. Well the real version of this is that for any problem economists always tell us - implicitly - to assume the system must always aggressively benefit the rich and powerful, and then work within that constraint. I am sick of working within that constraint. We should all be sick of working within that constraint.
By the way, the idea of reducing work hours and retaining total wages paid - say, paying 30 hours work 40 hours pay for those below $100,000 salary per year, and perhaps 30 hours work 35 hours pay for those between $100,000 and $200,000 a year, say, and 30 hours pay for 30 hours work for those between $200,000 and $300,000 per year, and significant hourly and thus total pay cuts for everyone making more than that - would be a wonderful demand any time at all. In fact, it would be fine by me if it was way more stringent. Let the people decide! Not only would such a campaign, in a crisis or not, be dramatically redistributive, it would also give people time to lead lives, and, dare I say it, to pursue the monumentally important work of further redesigning society.
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Write a Letter to the Editor to the New Int'list bout this Peopl
By Mayka, Revolution at May 13, 2009 13:30 PM
Check out this awesome article in the New Internationalist!
http://www.newint.org/features/special/2009/04/01/naked-emperors/
I think it would be awesome to get some exposure for the "Demand, Don't Succumb" essay by Michael Albert and the "People Over Profit" campaign I think we should be waging to put it's ideas into action.
We could write letters to the editor at letters@newint.org i think - here's mine, though it's a little longer than they'd like. Maybe one of us could even inspire them to write an article about "Demand, Don't Succumb," Parecon, or Participatory Society or even the projects we have goin' on around the world:-)
Thank you so much for “Naked Emperors.” This powerful article seems to embody and further what many of us are concluding is needed at this critical juncture in history. The points and suggestions in this article are similar to a campaign suggested in an essay called “Demand, Don’t Succumb” by Michael Albert, co-creator of the “third” alternative economic system called Participatory Economics (Parecon). This campaign aims to respond humanely and radically to the economic crisis by advocating laws and public support for four main changes. 1) Make it illegal to evict or foreclose upon people’s homes (or apartments). Community members instead come together in small, participatory community forums perhaps mediated by local congresspersons to decide how much mortgage (or rent) each person can pay. 2) Make it illegal to fire people, and instead cut everyone’s hours by 10% and raise the minimum wage so employees have more leisure time, don’t lose income, or worry about losing their job or home, more unemployed can be hired, more taxes can be used for social programs, and society can keep pace with its production needs. 3) Make it illegal for an owner to sell or move the firm. Instead owners can lose income, work like everyone else, or turn over the firm to the workers and surrounding community. My group, the Atlanta Chapter of the International Organization for a Participatory Society (IOPS), is working to jumpstart this “People Over Profit” campaign. We believe these revolutionary reforms need a broad coalition amongst groups and people already suggesting and doing these types of things to respond to the crisis, like the New Internationalist and the groups featured in “Naked Emperors,” as well as amongst all people realizing that this is an opportunity to do things differently. Any takers? Please email participatorysociety@yahoo.com or contact Michael Albert.
:-)
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yeah that last one...except with less spaces
By Mayka, Revolution at Apr 28, 2009 15:58 PM
;-) email us at participatorysociety@yahoo.com in Atlanta
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Let's make this a proposal and get it out to society widely!!! :
By Mayka, Revolution at Apr 28, 2009 15:57 PM
Here's one the Atlanta IOPS folks seem to like:
People Over Profit
A Proposal for How to Deal with the Economic Crisis
This is a summary (with a few additions) of an essay called “Demand, Don’t Succumb” by Michael Albert, creator of “the 3rd economic system” Participatory Economics, or Parecon, which rejects capitalism or markets as well as communism or central planning.
Albert has suggested some radical reforms for how to deal seriously with our current economic crisis/insecurity. We believe these reforms would go far to reduce our economic woes and improve our capitalist/corporate system, which we believe is the main reason for the crisis in the first place.
Homes for All
No one may be kicked out of his or her home – no home (less than $1 million) may be foreclosed upon and no one may be evicted from his or her house or apartment. We will simply pass a law stating that to do so is against the law. In the meantime, we can organize to prevent foreclosures on a case-by-case basis, as people have already been doing.
People cannot simply stop paying their mortgage payments, though, either. They’d have to be refinanced so people can afford to pay them.
We can collectively decide who will get what level of refinancing (for rent or mortgage payments, etc) by people who need help within a given legislative district getting together in an open forum, perhaps mediated by the local member(s) of Congress and even local high school civics teachers, and facilitated by everyone.
The lower the average income in a given area, the more rewrite they’re entitled to – a redistribution of wealth. Neighbors must cooperatively negotiate with each other the total percentage each will receive from the rewrite.
We can also make sure everyone has a home or decent shelter to reduce insecurity.
Businesses Can’t Close Due to Loss of Profits
Ownership is given less bargaining power – business owners with more than 20 employees or over $5 million in assets can’t stop operations due to a predicted loss of profit. We will simply pass a law stating that to do so is against the law.
If owners don’t want to take the losses in profits that may come with continuing production, then they can work like everyone else, and the firm’s deed is turned over to the workforce and surrounding community. They are not allowed to move the residence or sell the firm overseas.
Save Jobs, NOT Profits
To deal with decreased demand leading to decreased production leading to an increase in firings, we will simply pass a law stating that it is against the law to fire people until the crisis has passed.
Down Timing, NOT Down Sizing
To produce less output without firing people, employers can reduce everyone’s hours by about 10% so the output level can adjust to whatever society needs, and more people can be hired.
Additionally, so people don’t lose even more income from reduced working hours, employers would have to pay employees the same amount they were paid when they worked more hours. This is raising hourly wages.
We can simply pass a law to require that employers cut back everyone’s hours and pay people at higher rates – they cannot reduce the overall wage bill. Executives and stockholders can make less money if need be. If the only way to save a business is to cut into the workforce or cut into profits, we should cut into profits.
Effects
No one worries about losing his or her home or exploitative mortgages. No one is being fired, and people are being hired. People have more leisure time from reduced working hours and higher pay her hour. There are additional taxes levied from the currently unemployed and from higher pay for new or improved social programs. Workers and society generally can have more control over workplace decisions.
These radical reforms would bring us closer to a system that respects people’s lives and livelihoods over profits for the rich and institutions. This is the direction in which we need to be moving, because the market system is the problem.
Suggestions for Tactics
We can make this a national movement, where tons of groups sign on and promote this holistic, radical agenda in response to the economic crisis, and capitalism generally, as well as make sure these ideas can be locally controlled to reflect what makes sense in a give region. Our goal can be the passage and enforcement of laws that make this vision real.
WE NEED EVERYONE INVOLVED – WE NEED COALITION.
Here are some suggestions of what we can specifically do to make this happen:
1) Spread the word – online, face to face, in workplaces, classrooms, living rooms, town hall meetings, organization conventions and meetings, etc.
2) Pressure banks and businesses to apply these reforms
3) Pressure congress – nationally, more specifically - as well as the president to pass laws and executive orders that demand these reforms
4) Hold events for proposals, discussion, and planning
5) Talk to the media – especially alternative media, but also the corporate media
Questions
Is this realistic? Is it possible? We won’t know until we try – and try again and again and again. Our individual and collective assumptions that something won’t or can’t happen are the biggest factors keeping things from happening. Are these tactics complete, helpful or harmful? What else can we do to make this vision real, or what can we do instead? Please pass this movement on – tell people about it and make it happen – and help create what it will be with your own insights and ideas. We want a Participatory Society after all, don’t we?
www.myspace.com/parsoc
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A matter of practice
By Davidson, Carl at Mar 29, 2009 20:35 PM
If terms of what's theoretically possible, Mike, I don't have much disagreement with what you're saying, even 30 for 40, which is rather remotely possible.
And I'm well aware that some impractical things are very practical in other areas, as in your tent cities examples. We have no tent cities around here, and it's not because people are well off. ACORN in Pittburgh is starting some work to block foreclosures, and I'm supporting them.
I've been through a battle to take over a factory of 1500 workers making car parts, when the owner was opposed, and simply decided to go offshore. It's easy to formulate; very difficult to deploy. We lost that one when the union turned against the idea. I made the argument more recently in the Republic Windows battle, but the best the UE would go for was a new owner. They don't want to be in the business of running a company. Some of us also have raised 'buy out, not bailout' to have the workers run GM. Possible, but don't hold your breath. I argue it anyway as education among the more advanced.
Here's where I think our difference might be. In organizing work these days, I'm in a position where I have to formulate tactics and programs that can unite a progressive majority in a blue collar reality. So militant minority plans don't help me much. Some might; we hadf a fired worker sit-in to win back pay. Maybe with blocking evictions, if we get some here, but 30 for 40 is viewed as something like the Rapture--pie in the sky. By pushing, on the other hand, I can unite a majority around HR 676, EFCA and spending stimulus money in a big way for Green Jobs and local infrastructure, including green energy infrastructure. Even a shutdown hospital where we might find a way to re-open it. Within these, I can even argue for a stakeholder altering of power structures. In brief, I can get some traction on these things, but I don't have time and resources to spend on things likely to be duds. Actually, I'd love to be wrong on this, and find that we're further ahead than I think we are in the degree on consciousness and the balance of forces. We'll see.
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Re: A matter of practice
By Albert, Michael at Mar 30, 2009 07:41 AM
Apologies - I will be away tomorrow through the weekend, off to Finlind to give some talks, etc., so I may not be very prompt in responding to content...
> I've been through a battle to take over a factory of 1500 workers making car parts, when the owner was opposed, and simply decided to go offshore. It's easy to formulate; very difficult to deploy.
Of course, but that is the point. If each such effort, exemplary of course, has to operate in isoloation, thinking it is doing something basically unique, or at least without an overarching resonance and support - that is much harder than if the overall resistance attitude was in accord with such acts...
> We lost that one when the union turned against the idea. I made the argument more recently in the Republic Windows battle, but the best the UE would go for was a new owner. They don't want to be in the business of running a company. Some of us also have raised 'buy out, not bailout' to have the workers run GM. Possible, but don't hold your breath. I argue it anyway as education among the more advance.
Of course, but so why didn't you see the original piece I wrote more flexibly, in this manner, I wonder... And the stance of unions, and other institutions is going to be partially up for debate, in coming weeks and months - and if there is a large scale push of ideas seeking to move toward more worker power, rather than them arising only very narrowly without context - they will have far more chance...
> Here's where I think our difference might be. In organizing work these days, I'm in a position where I have to formulate tactics and programs that can unite a progressive majority in a blue collar reality. So militant minority plans don't help me much.
AGain, as the aritcle indicates, different local situations will yield different local approaches. You can see workers starting to get quite aggressive in some places, not others. Same goes for neighborhoods dealing with foreclosures and other issues. If the most forward thinking and acting efforts are treated as if they are silly craziness, confience wans - but if they are the exemplary cutting edge, than others move forward too...
> Some might; we hadf a fired worker sit-in to win back pay. Maybe with blocking evictions, if we get some here, but 30 for 40 is viewed as something like the Rapture--pie in the sky.
YEs, maybe, but it isn't, and it wouldn't take long, I suspect, to be understood...
> By pushing, on the other hand, I can unite a majority around HR 676, EFCA and spending stimulus money in a big way for Green Jobs and local infrastructure, including green energy infrastructure.
Okay, and maybe that will be very good - but maybe, also, it won't - because lacking larger awareness and militance, it will get folded into tired old patterns, bent to get out of crisis, yes, but reimposing the old order while doing so. I think we ought to be seeking much more than that...
> Even a shutdown hospital where we might find a way to re-open it. Within these, I can even argue for a stakeholder altering of power structures. In brief, I can get some traction on these things, but I don't have time and resources to spend on things likely to be duds. Actually, I'd love to be wrong on this, and find that we're further ahead than I think we are in the degree on consciousness and the balance of forces. We'll see.
Now I think we are on the same page, except maybe one last difference. Imagine an organizer, not your or I - but whoever. My inclination is the person should work for the most left stance and ideas and vision and program they think can at all contribute - not the one that will have most support. Why? Because the one that will have most support, typically, won't benefit all that much from this one person adding on to it. On the other hand, the innovative new stance, the more radical effort, may benefit hugely, from that one more creative person. Second, more often than not, that one person will also be doing more for the more popular, but less radical approach, by taking the more left path, than by joining in. This is because winning gains depends on our marskalling a threat, a scary prospect, for those who don't want to give in. And it is precisely a turn toward deeper and broader radicalism that is what;s scary...and that gives the threat factor to opposition.
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Keep us thinking
By Jones, David at Mar 29, 2009 19:54 PM
Thanks Michael for raising a loud and consistent anti-capitalist (pro Parecon) voice. Those of us who have been around this block know the questions of power and agency and "program" have emptied many a bottle of wine but your clear instruction to Organize and Agitate are as true now as ever.
Workers whose plant was just bought by some Shiek from Dubai know something is out of kilter. From retirees losing pensions to students who can't pay their loans, there is a growing awareness that we can do better and pieces like this help explain how. The capitalist state can prop up the institutions and give infusions to the Zombies but the Logic of capitalism has been severly wounded and we need to exploit their dissorientation. Lets have a May Day like we havent seen in this country in 80 years!
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Either-Or Again
By Davidson, Carl at Mar 28, 2009 11:13 AM
I have no problem fighting foreclosures, and demanding resetting the terms of loans so people can pay.
Foreclosures, however, are not that big of a problem around here. People are too poor. They either own their old housing stock, or rent it from someone who does, or for low-income workers, they live in house trailers on a parents lot, or a trailer park, or a piece of land they've got their hands on. If they are paying on a mortgage, it was gotten some time ago, before the wacko balloon payment adjustable rate deals.
A call to cease foreclosures would mainly help the yuppie sector, who bought newly constructed McMansions in the sprawl developments, then commute to Pittburgh for work in the finance and high-tech sectors. They have a beef, too, but they're not high on our list of priorities.
There's plenty of decent old housing stock around, sitting empty, from $40K to $140K. But people need regular income from a decent-paying job to buy them. That's what's lacking. 30-for-40 may work well for a firm that can stand a cut in its profits above and beyond the cut it's already getting in declining sales. Not enough of those to matter much. What businesses do need, in a major way, are purchase orders, and the main one to supply them is the government, or from the ripple effect of government purchases elsewhere. So I'll stick with the green and 'left' neoKeynesians in the short run.
More strategically, I think taking over abandoned factories by worker coops is an excellent idea. But the coop still needs capital in the form of loans to start, and that requires a business plan showing, again, where the purchase orders are coming from. Probably the best shot at something like this would be to approach an aging owner of a home remodelling outfit, whose heirs showed no interest in it, and propose a buyout by a coop of his existing employee plus new 'green collar' hires, with ObamaBucks funding major purchase in the form of green energizing public buildings and workers' homes.
But the desire and demand for work is palpable. Workers at a stressed chemical plant near here were cheering a recent globalized buyout of the place by billionaire Arabs from DuBai. It kept hundreds of them working for someone whose deeper pockets weren't so stressed by narrow profit margins.
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Re: Either-Or Again
By Albert, Michael at Mar 29, 2009 08:14 AM
> Foreclosures, however, are not that big of a problem around here.
As the original article notes, locally it makes sense to do what the local situation calls for - but surely, Carl, we can agree it doesn't make sense to say that in some area something doesn't apply, and so that approach ought not be used in other places...
> People are too poor. They either own their old housing stock, or rent it from someone who does, or for low-income workers, they live in house trailers on a parents lot, or a trailer park, or a piece of land they've got their hands on. If they are paying on a mortgage, it was gotten some time ago, before the wacko balloon payment adjustable rate deals.
Carl, it doesn't matter when you bought - if your rate is flexible you can face foreclosure, if you lose work and income, you can face foreclosure, if the property value plummets you can face foreclosure. The people showing up in tents cities are not wealthy people - But I don't think there is a disagreement here...
I would ask something, though, Carl - if you are going to comment regularly on everything I write, which seems now to be the case, please when you do - do it like I am - quoting what you are reacting to. It makes it far easier to retain th flow of the message, and for me to remember what we are talking about - among all the things I am writing and reacting to...and I suspect it would help it be an actual discussion as well.
> A call to cease foreclosures would mainly help the yuppie sector, who bought newly constructed McMansions in the sprawl developments, then commute to Pittburgh for work in the finance and high-tech sectors. They have a beef, too, but they're not high on our list of priorities.
Again, i suggest you visit the tent cities... In Boston, for example, check out the organization City Lights. It is a grassroots radical effort, with a long radical, highly grounded history, working in predominately black areas of the city, low income, working class - addressing people who are suffering incredibly. It works to prevent foreclosures and block evictions and thus also the ensuing calamity of homelessness - it is neighbors, working people, poor people, doing all this, of course, not people in mansions. Speaking derisively of one group doesn't mean one is paying attention to the desires of another...
I also said in the article that I wouldn't even want to protect rich owners from foreclosers, but instead have an income level below which there is protection - above which there is not. This is one of the reasons why I would like you to quote what you are commenting on - because then it will be, well, clear if it is or isn't about what I wrote...
> There's plenty of decent old housing stock around, sitting empty, from $40K to $140K. But people need regular income from a decent-paying job to buy them. That's what's lacking.
Well, that is part of the problem, a critical part, of course, but it is not the whole of it. That said, the article also centerpieces that part, saying (a) how do we bring to a halt the economic process that is now causing escalating firings, and (b) how do we reverse the situation getting people new jobs, and (c) what can we aim at that would also dramatically alter the lasting balance of power between workers and owners to benefit the former, and also that would lead toward futher gains. I would have thought you would have liked all that quite a bit... What the article does not do - which you seem to ignore over and over - is in any way suggest that desirable government spending would be anything other than a critical component of the overall effort. If I was going to write much longer, I would have spent time not saying we need that - which is utterly obvious - but making suggestions about what it could be that would be far more pointed, I would try for that, than just green jobs, say, which to me is very vague.
> 30-for-40 may work well for a firm that can stand a cut in its profits above and beyond the cut it's already getting in declining sales. Not enough of those to matter much.
I think we can agree to disagree... failed firms, or ones where owners simply refused to take reduced profits, or bearable losses, would wind up coops or even become socialized firms in the hands of their workforces - a very good thing - and your thinking that the gargantuan layoffs are all about literally failing firms is simply wrong. Yes, there is falling demand - and yes if a firm's profits drop enough so the owners want to put their capital somewhere else then the firm is failing in the eyes of the owner - but that doesn't mean it is an unviable firm, by a long shot. Not to mention that such firms operate in ways that can be dramatically improved, with reduced costs at the HIGH end of the wage bill - also in the artlcle - etc. As I also said in the article, there may be problems with the proposals - but you aren't really addressing the policies at least as they are written up... so, I think maybe write your own article on what you think makes sense - ...
> What businesses do need, in a major way, are purchase orders,
Yes, though one has to be careful - a switch in orders from useless production - like defense, among others, which is very labor unintensive, to more socially valuable production - which is labor intensive, would do very well too - but, in any case, what you seek is greatly aided by a population more able to spend, which means a population which doesn't have accumulating unemployment or fear of it... Another option is to cut output, but without making the unemployment problem worse, adding to the downcyle in demand. Again, I just don't think you are addressing what was written - but instead saying things you think. Which is fine, but why not just write an article saying what you think. Ultimately the issue is this. There is not one way out of an economic crisis, just as there is not one way to muddle along in a condition of alienation and poverty (without so called crisis). Rather, many things are possible. And the task is not to jump on board what all the pundits suggest, much less what the government proposes, but to think about what can be done that actually helps not only escape catastrophe, but also the conditions that bred catastrophe, and even the lesser catastrophe (for most people) that is business as usual.
> and the main one to supply them is the government, or from the ripple effect of government purchases elsewhere. So I'll stick with the green and 'left' neoKeynesians in the short run.
Do your thing. I will seek sensible socially informed government spending too - but I think that is not going to come because of Obama's comittment - which is sadly lacking - but because of pressure - and I think pressure means mass participation in visible struggle and activity that creates an environment which elites see as being very dangerous to them, a trajectory of activity that threatens their long term interests, even their whole system - and then, because they fear that growing threat, they do things they wouldn't otherwise do, to diminish the crisis, even things that involve them paying a cost, or workers getting stronger.
And I also suspect - we can't know these things other than by seeing what works, ultimately - the kind of activity by the public - by workers - that will create that fear at the top, is likely to be, well, actions in communities and in workplaces that reveal growing anger, and even more important, growing willingness to become militantly involved - and I suspect the locus of that most militant activity will be fighting against job cuts and foreclosures and evictions, at least in considerable degree, and thus I chose those topics, to highlight. Think of it this way Carl - the line up of organizations and bloggers and what not urging Obama to spend well and large is like a huge anti war demo. The eviction blocking, anti bank actions, anti employer actions, are like the militant civil disobedience. They are what makes the big outpouring powerful - because they say to elites, fail to respond and all those asking for spending are going to get as angry, as militant, and as oriented toward really challenging underlying relations as the people in the streets... It isn't either/or, I repeat. What I am saying obviously doesn't mean government expenditures are unimportant...actually, it is part of getting them, but better ones. Again, I would have thought you would find all that pretty obvious, and congenial...
> More strategically, I think taking over abandoned factories by worker coops is an excellent idea.
Good - but why only abandoned?
The really huge threat isn't that we will take what they leave behind - though that is good. The image that will cause elites to try really hard, even including serious losses for their class, which includes social spending of merit, is the threat that more and more people are going to begin to say, hold on, these are our communities, our jobs, our workplaces - and we want to run them - not have money bags owners, not have gray flannel bureaucrats do it. So when start to more toward that mentality, very naturally, it is a good thing, and a good thing to work with and try to expand, and make visible. And saying, wait, it isn't just after a capitalist dumps a firm that workers should have the option to retain it - though that is good - but to say, if an owner is going to hold out for profits, even unreduced profits, or is going to behave in socially harmful ways, firing people who are suffering and have no new jobs to get, when an owner is going to refuse to respect employee's needs and community needs by abiding new laws - whether ecological ones, or employee ones - then they lose their claim on the assets. That demand, gaining support, would compel action of the sort you want - nationally - as well as regarding jobs, housing, etc. in hopes of preventing it from spreading. Our job of course, would be to make it spread even more, not less, when it wins gains.
But, well, let's see where things go...
> But the coop still needs capital in the form of loans to start, and that requires a business plan showing, again, where the purchase orders are coming from.
Sure, so? Purchases will come from people who still have jobs, people who can borrow on houses they still own, and from government investments in socially responsible projects - sure. It won't come from infusions of cash to owners - at the top.
> Probably the best shot at something like this would be to approach an aging owner of a home remodelling outfit, whose heirs showed no interest in it, and propose a buyout by a coop of his existing employee plus new 'green collar' hires, with ObamaBucks funding major purchase in the form of green energizing public buildings and workers' homes.
Best? Who knows. Conceivable, sure. But I don't know what you think Obama bucks are - Obama, and political and economic elites more generally of which Obama is one and is a beholden representative, see the crisis as a gigantic problem, yes, but one they wish to solve while PRESERVING their relative dominance, or even enlarging it. That is so elementary for a leftist, I assume you agree with it. If so, then it becomes clear that relying on Obama, or his personal inclinations, is a journey to nowhere good. Pressuring Obama, forcing him, that's good. It may even unleash a humane aspect of him, sure - but without the pressure, forget about it. And having pressure entails having movement activism, and popular upheaval, that actually threatens to keep going, and to go in directions and take steps that the elites find horrific, and so wish to curtail, by policies that assauge the anger. Thats the mindset, if you will, plus seeking goals that movement forward toward ever greater demands and activism, that the essay is really proposing...
> But the desire and demand for work is palpable. Workers at a stressed chemical plant near here were cheering a recent globalized buyout of the place by billionaire Arabs from DuBai. It kept hundreds of them working for someone whose deeper pockets weren't so stressed by narrow profit margins.
Yes, if there is no path in sight that is good, that is humane, that is forward looking, that would yield a stronger position for workers, if there is no way for them to have class solidarity, to have a program that they can fight for, collectively, then, quite sensibly, case by case they will grasp at anything else that might at least ward off calamity - for example, defense spending, budget hikes, new owners, changes that are likely to enlarge rather than diminish income inequalities and class differences, etc. etc.
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Something More
By Loewen, Matt at Mar 27, 2009 20:01 PM
I find some of this to be really unclear.
Your solution starts with 'suppose we pass a law' to prevent foreclosures from happening. What does it mean for 'us' to 'pass a law'? Countless hours lobbying the government - whom you just described as having deeply entrenched norms (that stretch back to Locke and Madison etc.) based on protecting the rights of private property? Isn't that incredibly long-term? I can see legislators now, smiling expectantly and rubbing their hands, waiting for us as we head toward the bureacratic swamp...
Later on you talked about what amounts to a sort of council meeting with legislators- will the laws be passed here? What will give those laws the force of words? Again, why should legislators care about what's going on, given what you've said about government? I mean, municipalities are run like businesses, and treat people as taxpayer/voter automatons who rely on them for services, NOT as citizens with real abilities and the ability to engage in real politics. Do we overturn municipal governments? Is that what you mean in the title by 'Demand'?
Don't you think that we can work on getting stronger while solving these issues? People are going homeless, jobless- what can we as caring, compassionate people do? Give them a place to sleep on our floors? Tear up our lawns and plant 'recession gardens', as spring is coming, so that there is some extra food around? Decrease our carbon footprints, decrease homelessness temporarily, and start our own social safety net and feelling of community?
I guess the idea of 'short term' is relative, but I was expecting something more from this. I know you've made a note about the local context. Are policy solutions really going to inspire people? To engage with legislators to formulate laws? Is that the best we can do? Is that an appropriate goal?
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Re: Something More
By Albert, Michael at Mar 28, 2009 07:18 AM
> I find some of this to be really unclear.
Okay, perhaps I can help...
> Your solution starts with 'suppose we pass a law' to prevent foreclosures from happening. What does it mean for 'us' to 'pass a law'?
It means we, that is populat movements, force the government to anact new legislation. That is what us getting anything means - basically, until we win a completely new social order in which legislation and other activity happens entirely differnelty than now. If we had, say, popular power - in the form of grass roots councils or assemblies that were the central institution of a new polity, the law making heart of society - then our passing a law would be, well, the population deliberating and through its structures making a new decision. But we don't. So it means the population - or more accurately popular movements, raising social costs by its activisim, so high, on behalf of the demand that there be no more foreclosures, that the government relents and, against its inciinations, passes the law.
> Countless hours lobbying the government - whom you just described as having deeply entrenched norms (that stretch back to Locke and Madison etc.) based on protecting the rights of private property? Isn't that incredibly long-term? I can see legislators now, smiling expectantly and rubbing their hands, waiting for us as we head toward the bureacratic swamp...
Why would you think it imples anything like that. How do we - end a way - win affirmative action - get higher pay in some workplace, get ANYTHING - we agitate, organize, demonstrate, using tactics strung together, one hopes, into a strategy, aimed to force the people who in our society have to sign the document that makes it happen, to do so. We don't have dinner with them, power lunch with them in their office, prepare slide shows for them, offer them bribes, etc. etc. We organize and apply pressure. That is what the left does.
> Later on you talked about what amounts to a sort of council meeting with legislators- will the laws be passed here? What will give those laws the force of words? Again, why should legislators care about what's going on, given what you've said about government? I mean, municipalities are run like businesses, and treat people as taxpayer/voter automatons who rely on them for services, NOT as citizens with real abilities and the ability to engage in real politics. Do we overturn municipal governments? Is that what you mean in the title by 'Demand'?
In the long run, we replace existing political structures with new ones, yes, of course. See Steve Shalom, for example, on parpolity. But now, short of that, we do what left movements do - try to force outcomes we desire. I am sorry I didn't say it explicitly - but I thought it was evident. What else could I be saying???
> Don't you think that we can work on getting stronger while solving these issues?
But of course. And how do we do that? We have an overarching framework of desires and we demand them, and agitate for them, nationally, but locally we also, though hopefully in accord with that and contributing to it, do what makes sense where we are...
> People are going homeless, jobless- what can we as caring, compassionate people do? Give them a place to sleep on our floors? Tear up our lawns and plant 'recession gardens', as spring is coming, so that there is some extra food around? Decrease our carbon footprints, decrease homelessness temporarily, and start our own social safety net and feelling of community?
Well, I suppose someone might think - I can't tell if you are being sarcastic but I think so - that those are the ideal or desirable things to do. But not me. I think it is desirable to join with people fighting against foreclosures, individually for a given house, or in groups and wider, for broads laws - to fight against evictions, blocking them, with neighbors helping neighbors, and so on. I think it makes sense to amass workplace and community support to fight firings in individual firms, too - like a short time ago at Republic, say, but to also make naitonal demands, to solve the problem more generally, both for social oriented social spending and for hiring and wage laws, etc. All this is in the article...
> I guess the idea of 'short term' is relative, but I was expecting something more from this. I know you've made a note about the local context. Are policy solutions really going to inspire people? To engage with legislators to formulate laws? Is that the best we can do? Is that an appropriate goal?
To engage with legislators - other than to apply pressure by massive organizing, but like lobbiests, is not the best we can do, it is not the appropriate goal, it is not even rmotely sensible, I agree with you - and it not what I recommended...
I guess now I wish I had been clearer - but I don't think we disagree.
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Re: Re: Something More
By Loewen, Matt at Mar 28, 2009 10:58 AM
I see what you're saying now. The reason why I was confused was by the use of the terms 'pass a law' and 'legislators'- Im not really sure why I assumed what I did, but it just made everything seem very... well, unrealistic, which is to say conventional.
I don't think we disagree either. Thanks for the clarification.
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Why either-or?
By Davidson, Carl at Mar 26, 2009 19:39 PM
Why either-or?
Maybe it's because of my vantage point. You can drive up and down the rivers here, and see one shutdown mill after another, or often just brownfields were nothing grows. One the main drags in the towns, boarded up businesses by the hundreds. The children of the better-off workers have moved away; those of the lower-income workers, mainly Blacks, subsist in the underground economy, with all that entails.
With failed businesses all around me, and many still afloat hanging by a thread, 30 for 40 isn't going to help much here. We need major new projects that will create new wealth with new firms and spur the growth of a few old ones, and that has to come from government as the purchaser. So yes, I'll take Keynes as 'my man' on this point. I'll also organize for the solidarity economy within it, and other democratic structual reforms as well, hopefully pulling some of the Keynesians to the left while building our own strength as socialists.
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Re: Why either-or?
By Albert, Michael at Mar 27, 2009 06:44 AM
> Why either-or?
As in popular movements trying to force either government spending on green jobs and programs - or trying to protect people from foreclosures and evictions and attaing and preserve full employment while augmenting worker and community economic power...yes...why not both?
> Maybe it's because of my vantage point. You can drive up and down the rivers here, and see one shutdown mill after another, or often just brownfields were nothing grows. One the main drags in the towns, boarded up businesses by the hundreds. The children of the better-off workers have moved away; those of the lower-income workers, mainly Blacks, subsist in the underground economy, with all that entails.
Honestly, how is this evidence on behalf of either/or? Turn those plants over to their employees and communities, instead of allowing owners to bail them into non existence, selling off assetts, and the situation changes. Prevent foreclosers and firings and the situation changes. As well as, do socially informed stimulous spending and the situation changes.
Why not say, you can drive up and down in neighborhoods, where people live, and see homes foreclosed, families pitching tents in fields and under bridges, petty crime and family abuse increasing, and on and on... same thing, it wouldn't be evidence of the need for either/or, but, instead, evidence of the need for both.
> With failed businesses all around me, and many still afloat hanging by a thread, 30 for 40 isn't going to help much here.
Well, I think it would help a ton - becuase it would put a blockade up in fornt of the sprial of firing, loss of demand, more firing - by stopping firing and maintaining demand. But, Carl, again, saying that really sensible spending by the government would help is true, but it is not a reason to pursue only that. More, getting government spending to be really sensible is going to require mass pressure, and mass pressure is going to be much much easier to build among working people if it is clear that movements can see famillies in allies, as well as bored up businesses...
I think perhaps we have to agree to disagree - not about the need for effective government programs - spending among others - but about the need to aid families regarding housing and jobs, immediately, directly, AS WELL, not instead. I hope we can agree that Obama left to his own designs won't do any of it well - but will, as the article you replied to indicates, instead try to get out of the crisis in ways preserving basic defining social relations and even enlarging but certainly not unduly reducing the bargaining power advantages of owners, ceos, etc. If that is so, then to get anything, we have to have a massive amount of activism. Saying we shouldn't pursue that which in their neighborhoods people are already working on doing - is no way to build it, I suspect.
Finally, if one wants not only a better capitalism, but a new social system, then one should make demands and build movements in ways that will yield continuing comittment and sturggle and lay groundwork for it being steadily more effecitve. That too is a feature of what I proposed, a centrally important feature, I think...
> We need major new projects that will create new wealth with new firms and spur the growth of a few old ones, and that has to come from government as the purchaser. So yes, I'll take Keynes as 'my man' on this point.
So many leftists think if they like something, then that thing must be pursued to the exclusion of all else. I don't understand that inclination...which is very prevelent. You haven't heard one word from me against soically informed government spending...so pushing the open door of saying we need it is not replying to me - since I agree.
> I'll also organize for the solidarity economy within it, and other democratic structual reforms as well, hopefully pulling some of the Keynesians to the left while building our own strength as socialists.
Fine, we agree on that...but then why not agree, as well, that people in communities creating grassroots movements that fight against foreclosers is fantastically positive - that blocking evictions is fantastically positive - you want to talk solidarity, that is solidarity. Why not agree that workforces demand redistribution of wealth and decision making influence, fullemployment, not only so the rich bear the burder, but so when the dust clears we are in a better position that when the storm began - much better? Why not have owners who don't want to produce for few or no profits lose their ownership with workers and communities gaining oversight of the firms.
Okay, if you said we aren't strong enough to win all that - I would say okay, that is likely true, though we won't know unless we try. The popularion does seem far more eager and militant, in many respects, than most people on the left. But not winning it all is no reason why we should air these aims, and more, simultaneously winning what we can. The same goes, actually, for winning socially responsible government spending. We should seek immense reductions in defnse spending and enlargements of infrasturctural programs of all kinds, labor intensive, and meant to improve the living standards, confidence, mobility, and power of working people, of course. Then we will win somewhat less than we demand. But what isn't won now, we continue to fight to win later. Same thing for demands around hiring and firing and income redistribution, etc.
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Make it immediate
By Davidson, Carl at Mar 26, 2009 15:31 PM
Try an example in front of you, Michael, South End Press. Correct me where I'm wrong.
Suppose SEP orders are falling, because people are cutting back on their book-buying budgets.
Your expenses, including your wage bill, soon becomes greater than your revenues.
You can keep going for a while by making up the payroll shortfall by tapping your reserves, but that only gets you so far. Soon you're up against it again.
You can lay some people off to meet the remaining payroll with current revenues, but your workers say, we want want to work 30 hours so we can keep everyone working, but we don't want a pay cut. In effect, they're saying, give me a 30 hour week, but increase my hourly rate by 25 percent. The total hours come out OK, with no layoffs, but you have the same total payroll. So you have to go bust, get cheaper paper, or raise your prices. If you raise your prices in a time of shrinking demand, your demand shrinks further, so you're back to square one.
But here's a solution. You could produce a manual on how to organize the green collar economy, written for unions, local government and community groups. The community groups have no money, since foundations are cutting back or plundered by Maddow. The unions' dues are shrinking due to layoffs. But local government is getting an infusion of ObamaBucks.
So you organize unemployed youth and workers, along with some local politicians, and get the word to Van Jones to have your manual required reading on all Green Jobs projects and community college curriculums. It doesn't have to be JUST your book; several others from other firms can be included too, so long as they are worthwhile. But they're purchased with ObamaBucks.
So we have the government giving purchase orders to SEP in a big way, ie, stimulate the demand side. The state as buyer of last resort. In brief, Keynesianism. Your orders are so high you have to hire more workers, and you have reserves to come up with more new books on how to get us to the green economy.
Does it solve everything in the long run? No, Keynes was famous for saying 'in the long run, we're all dead.' But in the short to middle run, he's your man.
For the longer run, you come up with a manual on how all these green jobs kids can turn their workplace into worker coops, or start new ones as worker coops from the begining.
Now we're on to something.
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Re: Make it immediate
By Falvo ii, Samuel at Mar 26, 2009 22:27 PM
Carl wrote,
You can lay some people off to meet the remaining payroll with current revenues, but your workers say, we want want to work 30 hours so we can keep everyone working, but we don't want a pay cut. In effect, they're saying, give me a 30 hour week, but increase my hourly rate by 25 percent.
This would never happen in reality. As a company owner, two things would happen:
First, let's pretend I practice open-book management (c.f. Stack, Jack. The Great Game Of Business. ISBN 0-385-47525-X). In such a company, every single employee, regardless of status, would have access to the company's books, and thus could see the writing clearly on the wall. They'd know full well that a voluntary decrease in hours cannot be performed while maintaining and increased wage. Since the whole purpose of decreasing hours is to reduce expenses, thus preserving profitability of the company, these same employees would either bail for another job elsewhere or would voluntarily cut their hours accepting the current pay rate. Either way saves the company money. (BTW, both of these situations have occured in the past.)
Second, suppose I follow a more compartmentalized management style. In this case, employees won't know what's happening until the manager asks for volunteers for work-week cuts. If the employee demands the equivalent pay as what they're receiving now (e.g., a pay raise), then one of two things would happen. Either the employee is rejected outright (hopefully with an explanation why), or, the employee bails to find a more reliable job elsewhere.
I'm very confident that a compartmentalized, rigid management hierarchy has never reduced weekly hours while concurrently raising wages in proportion to maintain a salary-like pay rate.
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Re: Make it immediate
By Albert, Michael at Mar 26, 2009 18:27 PM
> Try an example in front of you, Michael, South End Press. Correct me where I'm wrong.
Hi Carl, I'm sure seeing a lot of you - live and online - all of sudden...
> Suppose SEP orders are falling, because people are cutting back on their book-buying budgets.
Yes... in other words, people have less income - or at least our buyers do - and with the lesser income they allot less to buying books in general (radical books can be counter cyclical, but let's set that aside), and that means they will buy less of ours - at least at old prices.
> Your expenses, including your wage bill, soon becomes greater than your revenues.
It could happen - but, well, actually, it was nearly always the case while I was there - so we nearly always had to get donations to make up for the shortfall...but let's ignore that too for your example. You are presumably describing a capitalist firm that is not justprofiting than before, say down from 10$ to 2%, but that is actually losing funds - say minus 2% - so the owner is taking a hit. It happens. They might quit, might sell, might bolt, might jsut take the losses (after all it will take about five years to lose the profits that were earned last year), etc. It depends. But, yes, in your example, if they continue their wealth will be declining.
Of course, again, the more typical case is a firm that is profiting, but is profiting less - and the owner tries to raise the profits back up...by dropping wages to then lower prices so as to sell more books while keeping the profits per book unchanged...and thereby increasing total profit rate back up due to again selling more. Or the owner may fire workers, reducing costs at the same lowered level of output and revenue thereby again keeping profit rates acceptably high, and, due to the lower income of buyers, operating smaller and taking some of the funds that would have gone to publishing and putting them elsewhere.
> You can keep going for a while by making up the payroll shortfall by tapping your reserves, but that only gets you so far. Soon you're up against it again.
Well, that depends on who you are, and the scale of the shortfall - see the early noted case where the total losses are, say, 2% - which is miserable - but it takes five years just to lose last year's profits back - but most often, what is happening isn't losses, just lesser profits and while you will be inclined to do as noted above, being an owner concerned only about profits, you could instead just make less profits, or even take bearable losses, especially if that is your only legal option, other than losing your firm to your workers and the community where it resides.
> You can lay some people off to meet the remaining payroll with current revenues, but your workers say, we want want to work 30 hours so we can keep everyone working, but we don't want a pay cut. In effect, they're saying, give me a 30 hour week, but increase my hourly rate by 25 percent.
Actually, if they were going from 40 to 30 hours, and were going to get the same total pay, it would be a one third per hour pay raise they would have to get compared to the earlier rate. And at SEP in fact we worked more like 50 hours, often more, when I was there, but I am sure that isn't what you are asking about...
Of course, it is also possible, supposing that it was the case that for it to operate as I indicated a firm would take such losses that it would break the owners or just so drain their accumulated wealth that they did not want to do it - like, say, the owners who left behind their firms in Argentina not so long ago, with workers taking them over, for the government to subsidize them back to break ever - say - thus benefitting the workers who don't lose income or jobs, while not overly destroying the owner... though I would be fine with owner losses, myself.
> The total hours come out OK, with no layoffs, but you have the same total payroll. So you have to go bust, get cheaper paper, or raise your prices. If you raise your prices in a time of shrinking demand, your demand shrinks further, so you're back to square one.
Actually, Carl, you don't raise prices, though you might lower them in such a situation. Producing more reduces cost per item...and you hope to sell more items at the lower price - but you can only do it so far, of course. And only if you can sell more at a lower price.
But mostly, again, you are talking about a firm that is not just not doing well enough, but one that is literally losing funds, and losing so much that the owners cannot bear the losses. Typically a firm is going to fire folks long before that so the situation arises way short of what you describe. But even for what you describe - if you look you will see that I said - near the bottom of the essay if I remember right - I didn't want to overly complicate - do it for those below a certain income level. So for those above that level, there are reductions. And for the owners who are losing profits, what I wrote is that owners should have to follow this path - and if they can't, including with high end pay cuts for ceos, etc., as well as reduced profits, then they don't have to, but then they lose the firm. I am not sure yet what you are trying to show me...
> But here's a solution.
So you haven't pointed out a problem. In the other hand, I also think you haven't tried to understand. I suspect because you have a different set of positive proposals, you simply wanted to dispense with these and mention yours. Actually, though, you could have mentioned yours without dispensing...wrongly, with these.
> You could produce a manual on how to organize the green collar economy, written for unions, local government and community groups. The community groups have no money, since foundations are cutting back or plundered by Maddow. The unions' dues are shrinking due to layoffs. But local government is getting an infusion of ObamaBucks. So you organize unemployed youth and workers, along with some local politicians, and get the word to Van Jones to have your manual required reading on all Green Jobs projects and community college curriculums. It doesn't have to be JUST your book; several others from other firms can be included too, so long as they are worthwhile. But they're purchased with ObamaBucks.
My guess is very few book publishers are holding their breath for this solution - but remember I was not talking about a firm, but about the entire economy - all firms - and all workers, and everyone with high mortgages, etc.
That said....having good ideas about a Green economy would be nice - especially if Green means not only less polluting or more sustainable, but also more humane and dignified. Then such a manual would in fact talk about not paying exorbitant amounts to about 20% of the workforce and giving them all the desirable, empowering tasks, and instead spreading those more equally, paying equitably, eliminating profits for owners, etc. etc.
> So we have the government giving purchase orders to SEP in a big way, ie, stimulate the demand side. The state as buyer of last resort. In brief, Keynesianism. Your orders are so high you have to hire more workers, and you have reserves to come up with more new books on how to get us to the green economy.
There is nothing wrong in government buying policies as a helpful way out of the crisis, especially ones that are ample and that try to redistribute, that promote community and workers control, etc. etc. That is part of a good program, by all means, as noted in the essay. Why would you feel the need to pose it as either or?
> Does it solve everything in the long run? No, Keynes was famous for saying 'in the long run, we're all dead.' But in the short to middle run, he's your man.
No, he's your man. I think we can do much better - both regarding how to spend - the typical Keynesian doesn't seek workers or community control, or ecological reason, or essential infrastructure, bt, instead, as I noted, expenditures that are consistent with maintaining the relative balance of power among classes - which is to say, the advantages of the masters of the universe. Though I agree serious Keynesian policies guided by a desire to better the lot of the poor and weak while bringing the rich and powerful back into the same universe as the rest of us would be nice...and certianly part of a good program. Again, why either or....
> For the longer run, you come up with a manual on how all these green jobs kids can turn their workplace into worker coops, or start new ones as worker coops from the begining.
And I welcome you to go write your manual... and by the way, I hope when you write about turning failing firms into - ala Argentina, again - or creating from scratch those more just workplaces - which, of course, is exactly what the program I mentioned would foster, as well as having stimulus, you will make clear the need, if the coops are to grow and remain just, for them to escape market logic and alter divisions of labor to promote, internally, real self management.
> Now we're on to something.
I think maybe I was.... what you are onto is familiar, of course, and okay, but not nearly sufficient...unless radicalized and augmented.
But, hey, whatever works - you propose things, I propose things - no need to hammer at one another - and what troubles me isn't other proposals, by the way, but the extent to which radical economists are not proposing things at all, or at least not anything that goes seriously beyond what is mainstream... and are therefore strangely, missing the moment...
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Re: Re: Make it immediate
By Falvo ii, Samuel at Mar 26, 2009 22:43 PM
> Actually, if they were going from 40 to 30 hours, and were going to get the same total pay, it would be a one third per hour pay raise they would have to get compared to the earlier rate.
1 - (30/40) = 0.25 -- hence the employee works 25% less. Assuming pay rate remains constant, then he'd earn 25% less income for his 30 hour work week. Carl stated explicitly that weekly income remains constant, so to compensate, SEP simply must pay 25% extra per hour.
If SEP paid 33%, as you suggest above, then that's one heck of a deal for the employee (heck, could they cut back to 15 hours and get a bigger raise?), and actually exacerbates his problem statement substantially.
>> But here's a solution.
>
> So you haven't pointed out a problem.
I think I disagree on this; Carl's problem statement is how does SEP remain profitable in the face of maintaining current business overheads while suffering a loss of revenue from sales, and with a zero-layoff corporate policy.
However, I don't see the need to answer this restatement of the problem, as you've already done adequately in your response to Carl.
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Re: Re: Re: Make it immediate
By Corbett, Jean-Francois at Mar 27, 2009 06:21 AM
Samuel wrote: [my comments in brackets]
> the employee works 25% less [...] so to compensate, SEP simply must pay 25% extra per hour [in order to keep the employee's weekly income constant]
Nope, the firm will have to pay 33 1/3 % more per hour.
If I work 40 hours/week at 30$/hour, that's 1200$ a week.
If I work 30 hours/week (25% less) then my hourly wage has to rise to 40$/hour to maintain the same 1200$ a week. And yes, 40$ is 33.3_ % more than 30$.
In math terms, (1-x) * (1+x) is not equal to 1, where in this case x is the fraction by which you reduce working hours. It only approaches 1 when x is very small (x<<1).
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Re: Re: Re: Re: Make it immediate
By Falvo ii, Samuel at Mar 27, 2009 11:02 AM
Jean-Francois,
Thanks for the update. I never thought to verify my calculations with the (1-x)*(1+x) test. That makes sense.
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Re: Re: Re: Make it immediate
By Albert, Michael at Mar 27, 2009 06:54 AM
> Actually, if they were going from 40 to 30 hours, and were going to get the same total pay, it would be a one third per hour pay raise they would have to get compared to the earlier rate.
I was earning, let's say, $10 per hour. I was working 40 hours. So I was earning $400 a week. Now I get cut to 30 hours. What does my new pay level have to be so that I continue to earn $400 per week. Well - actually - just like the article said - it has to be $13.33 since that, times 30, continues to equal $400. Thus, the increase in hourly pay is one third.
> If SEP paid 33%, as you suggest above, then that's one heck of a deal for the employee (heck, could they cut back to 15 hours and get a bigger raise?), and actually exacerbates his problem statement substantially.
It is a 33% increase per hour
> I think I disagree on this; Carl's problem statement is how does SEP remain profitable in the face of maintaining current business overheads while suffering a loss of revenue from sales, and with a zero-layoff corporate policy.
I did not say it retains the old profit rate - I said, the new laws establish that it has to keep up the income of employees and not fire any - even if output is dropped due to falling demand - which will cut into profits, perhaps even move the firm from profitability into losses. That much is obvious, and indicated. Of course it will also help block further declines in demand. Then, the argument is that the owner either takes the lower profits, or endures the losses, or gives up the firm to the workers and community - who at that point can democratically do as they like.
> However, I don't see the need to answer this restatement of the problem, as you've already done adequately in your response to Carl.
Okay...
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Agreed - A New Vision
By Gossett, Selwyn at Mar 26, 2009 11:10 AM
I have repeatedly asked people I know if they can imagine something different in how goods and services are distributed in society. Beyond cries for justice and equity nobody has any idea, much like the economist with his can of soup. others are horrified that those who "have made it" should be so penalized by the rabble......
This unprecedented possibility (in my lifetime) of making people see the invisible cage they are in is being squandered if we don't spark the imagination of the majority of We the People.
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