Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Category: Class Warfare Page 2 of 35

CEO Honesty About Wanting High Unemployment

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On September 12, 2023

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I really appreciate CEO developer Tim Gurney’s honesty here:

A lot of people are focusing on the idea that Gurney is a terrible person.

Which he is.

But there are two important facts he makes very clear here. The first is that most bosses like being able to push people around. Money is good, yes, but the real motivation is power and power over other people is what a lot of bosses get off on. Unless you inherited, you rarely get to the top without enjoying making other people do what you want: that’s most of the job of “leaders” and “managers” after all.

The good ones focus on motivating teams in positive ways, but the bad ones, well, they use fear and greed.

The second bit is the honesty about governments trying to increase unemployment. This is something a lot ofpeople won’t believe when a leftist or a Marxist tells them it, but perhaps when a CEO does, they will.

It should be emphasized that this isn’t an “always” situation: for most of the period from 1933-79 US government policy was intended to decrease unemployment. That sub-era of capitalism wanted high wages, in part because everyone’s workers are someone else’s customers. China’s big goal right now is to figure out how to increase wages across the economy, and thus escape the middle income trap. (They’re doing it wrong, because their economy came of age during a global neoliberal age, but they know it’s what they should do.)

But since 79 deliberate policy in most developed countries has been to keep unemployment high to crush wages. That’s how the current capitalism.

This is also a pure example of “job creator” ideology. “We the big bosses create the jobs. All the good things come from us. Without us people wouldn’t have jobs. They should be grateful and obedient and subservient because they are worth something only when being used by us.”

This is specific example of what’s common in almost all eras: the people who have the most power believe that means they are also the best people. “The GodKing makes the rains the flow and the sun rise. All bow to the GodKing.”

From the capitalists come all that is good, therefore government and ordinary people should revere and obey them and do what they say.

So I really do appreciate Tim Gurney’s honesty here: he’s saying the quiet part out loud. He’s not being a hypocrite, like most of his peers. This is who he is and they are. Good for him for being authentic and telling the truth.

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The Good & The Bad In The Future of Labor

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On September 4, 2023

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On this Labor day it seems like a good time to discuss what labor in general and unions in specific have to look forward to.

There’s been some very good labor news recently, for example, the UPS strike:

UPS Teamsters have won their biggest wage boost in decades: at least $7.50 an hour over five years for every current UPSer, and more for the lowest-paid. Even the 1997 strike only boosted part-time wages 50 cents (equivalent to 95 cents today) over five years.

The agreement would also end the forced sixth workday for drivers, create seventy-five hundred new full-time inside jobs, and eliminate the second tier of drivers — reversing the infamous concession in the 2018 contract.

UPS drivers could make as much as $170K in pay and benefits (which sounds better than it is, full time wages are about $120K, but is still good.)

There is also a desperation effect: there has been a lot of inflation, often higher than reported (I’d judge food inflation at the check-out where I live to have been about 66% over the last 3 years and rent inflation c.40% or so.)

A lot of unions have been having successful strikes and many non-union businesses have had to raise wages to attract workers. Anti-worker forces are fighting back, with variable success. In Britain striking is likely to be near-illegal soon, and this is something Labor agrees with the Conservatives on. Laws in some US states allowing younger teenagers to work in food processing plants and so on are also an attempt to break the power of workers.

This power is based on Covid. Covid killed a lot of “essential” workers (with restaurant workers in particular taking it on the chin) and Long Covid has moved a pile more workers off the table and will move more workers over time.

This leaves those who remain in a stronger position: in a market economy without strong pro-worker laws wages are almost entirely based on the supply of workers versus demand. This can be specific, where particular types of skilled workers are short, but for non-skilled workers its mostly aggregate.

From about 1979 Federal Reserve and ECB policy has been to raise interest rates to crush the economy any time workers began to make wage gains, but this time it isn’t working: both because the shortage is real and because the West is, though marginally, trying to decouple from China, meaning China’s mitigating effect on goods inflation is decreased. There aren’t a lot of truly cheap places left where you can easily move production because most remaining cheap places aren’t politically stable and pro-US.

In Europe the news is more mixed because Europe is shedding industry due to anti-Russia sanctions. England, having de-industrialized is now losing its developed nation status.

The pressure on the workforce will continue: Covid is still around, Long Covid and sub-perceptual organ damage will continue to increase and will continue to have an effect on the labour force, not just reducing it from what it would have been, but making a lot of people, while not disabled, less able and worse at their jobs.

There are, of course, things the ruling class can do about this. In Canada we’re bringing in about a half-million new immigrants a year (which has caused a housing crisis), in a nation of 40 million. There’s the child labor law changes and the anti-union laws.

The right is going to make some hay on this, because immigration does increase the work force and thus put downward pressure on wages. If the right were simply to stop being anti-union and anti-worker in other ways, they’d clean up. Up here in Canada, I despise the conservatives, but I have friends who are now homeless because of the housing crisis caused by the Liberals immigration policies.

In the further future, immigration will continue to be the big issue. Climate change refugees will be massive in number and hard to stop (I full expect so many machine-gunning refugees stories by 2035 that it’s “dog bites man.) Elites will want to let enough in to crush local efforts to raise wages.

So we have a window to do the best we can to improve wages. After that, things will become more difficult. Inflation will continue to be an issue (there’s a small chance of deflationary depression) because climate change will lead to real shortages of raw materials, especially food and water.

Of course, if climate change were treated as the emergency it is, there would be a ton of work available, a WWII style mobilization. And that’s the best possible future at this point: a mobilization to deal with climate change properly.

We’ll see if we do, and do it while we still can, before too much civilization collapse.

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How To Reduce Inflation And Create A Good Economy

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On July 25, 2023

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Right now we have central banks attempting to control inflation by crushing wages. But wage-push demand isn’t the primary driver of inflation, it is corporate profit taking (increasing prices much faster than their costs) and some genuine supply bottlenecks.

This cannot be fixed by central banks except by smashing ordinary people flat, and in certain senses not even then, since it will lead to long term maldistribution of resources which will lead to real economic problems in the future: problems not based on distribution or finance, but on lack of physical ability to create what we need.

If we want to fix this we have to make it so that those who control economic decision making can only do well if the population as a whole does well. That means politicians who want to help the population (not 90% of European or American pols) and corporate leaders who need the population to do well.

We’ll concentrate on the corporate/private side.

Take public all natural monopolies. Monopolies and oligpolies can charge more because people have to buy what they have. Private enterprise is only better than government at providing differentiated goods. If everything is the same (and a joule is a joule and a liter of safe water is a liter of safe water and a cheap, fast train trip is a cheap, fast train trip) then government can do it cheaper and better than private enterprise, since it doesn’t have to make a profit.

Excess Profits Tax or Max Profits Tax. You can only make 5% profit + inflation. Anything more is taxed away. Money invested, is not taxed, however.

No Stock Buybacks, No Stock Options. If a company has excess money, it can only increase profits and stock prices by producing more or better.

Executive and Board Salaries Linked to General Welfare. All compensation is treated as wages. Wages above 10x median are taxed at 95%. They are only allowed to increase by the average of the median individual income, and the median income of the bottom 5%.

No Capital Flows To Other Except For Resource Extraction: Comparative advantage does not work with free capital flows. This was noted by Ricardo when he created the comparative advantage. Companies need to reinvest at home. They also need to not be able to run away with capital because they don’t like being only 10X as rich as the rest of the population.

No Free Central Bank Money: The central bank doesn’t get to just give people money, like it has been since 2008. That’s a legislative decision and one which the legislature should not be allowed to give away to other bodies except in relatively small amounts (perhaps a max of 1% of GDP.)

Break Up the Banks and Regulate Them Properly: Banks decide who gets to do what. If you want the advantages of a free market you need lots of them: easy enough, create them by breaking up the big banks. As for regulation, go back to an equivalent of Glass-Steagall.

Break up Monopolies and Oligopolies in General: either it’s a natural monopoly, in which case the government should run it, or it isn’t, in which case it’s broken up. Go back to prices rising in unison being enough evidence by itself of an oligopoly.

Retailers Either Sell Only Their Own Stuff Or Only Other People’s. No store brands, no Amazon basics, none of that. It’s vastly anti-competitive. Nor can retailers mandate that they must get the lowest price or any other such thing.

***

The general principles here are just to move the market back towards a free market and to “align” incentives so that rich people can’t get richer without everyone prospering.

There’s much more required, of course: these policies require politicians to want to implement them, and for them to last for any length of time, changes need to be made to politics to also make sure politicians self-interest is aligned with the general population. (The other method, which might better is to remove self-interest from these decisions entirely. You don’t always need skin in the game in a material sense—doctors with no financial stake make better decisions for patients than those with and endless measurement aligned with incentives warps measurements.)

None of this is really complicated in the broad strokes. We know what creates good economies and societies, we just rarely do it and those with the most power, whether people or countries, try to keep other countries or people down.

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Why The Rich Love To Crush Wages, Cut Pensions And So On To Fight Inflation

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On April 27, 2023

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The majority of price increases, of inflation, right now, are driven by price increases that are higher than increases in costs. Numbers I see tend to range from the mid sixties to the seventies.

They aren’t, then, driven primarily by wage increases.

The obvious way to solve this is to put in a surplus profit tax based on 2019 profit levels and forbid other ways of withdrawing excess profits like stock buy backs and option grants. Only after doing this would you consider trying to crush wages or cut pensions or other benefits.

That is, if your primary aim was to reduce inflation.

But it is undeniable that crushing wages will will reduce inflation somewhat, even if it is far from the best way to do so and it has a great advantage.

It makes the rich even richer by reducing their wage costs!

On the other hand, an excess profits tax would make the rich not get richer nearly as fast.

You can see why governments controlled by the rich (yes they are, let us not be tedious) would prefer to crush wages as opposed to limit profits.

For the elite to support the sort of policies which would not crush wages and which would appear to reduce their profits, they would have to be like a good chunk (but not all) of the post-war elites. Having seen what happened when demand collapsed in the Great Depression, they knew they needed wages to rise and were thus willing to share and to pursue some policies which they didn’t like.

After all, while the fastest way to deal with inflation is an excess profits tax, the structural way is breaking up control of industries and re-regulating anything that even sniffs like an oligopoly or monopoly, plus slamming on huge estate taxes, wealth taxes and 90% top marginal tax rates, while putting a Glass-Steagall analogue back in place and re-nationalizing key parts of the economy.

Now, as it happens, the post-war economy was the best we’ve known since we were keeping records. High growth, reducing inequality but still plenty of profits. The rich had to live with only getting 20X or so as much as the middle class, though, and that’s just unacceptable to them.

Now never let it be said that the rich don’t learn: they do have a dim understanding of “demand collapse bad” and they have a solution, which they’ve been trying since 2008.

“What if we just print tons of money!?” Trillions and trillions of dollars were produced and are currently being produced out of thin air, with no increase in the underlying economy, and given to rich people to bail them out and even when they don’t need bailing out.

Who needs to actually grow customers and have customers having increased real incomes when you can just give yourself money?

This is why things will only improve when current elites lose power wholesale.

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How Should CEOs And Politicians Be Punished For the Evil They Do?

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On March 28, 2023

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Came across this tweet about the Philadelphia water spillage the other day:

So, shit happens and sometimes truly, no one is really to blame. But a lot of bad things which happen are a result of deliberate negligence or direct action. A good example is PG&E, the California power utility, which hasn’t been bothering to clear the areas around power poles and transmission poles or replace or repair old power poles. They knew this would lead to more forest fires and it did and people lost everything, including their lives, in some of those fires. PG&E had the money to do the maintenance but preferred to pay larger dividends and give more stock options to executives.

So the chemical spilled into Philadelphia’s water supply were spilled by a private company. We don’t know if negligence was the issue, but if it was, what should be the punishment?

Lately we tend to just fine companies, but that does nothing, especially as the fines are often less than the amount of money they made thru being negligent, and in any case, fines don’t remove the massive money executives already made from their actions, nor the money the owners made.

Clearly fines don’t work.

The first issue is the question of limited liability for shareholders and the use of corporations as shields for executives. There were sound reasons for limited liability for owners who really don’t control corporations, with unlimited liability people wouldn’t want to invest in companies and when primary issue of stock was a major, or the major source for creating new companies, new corporation creation would have collapsed without limited liability.

But the disadvantage of limited liability is, indeed, that corporations tend to do evil acts knowing that their owners won’t pay the full price for them, and the way corporate executives and decision-makers tend not to go to jail for actions that an individual would go to jail for (or be liable for personally in civil court) is causing huge problems.

I think we’re going to have to remove these shields, in the case of anything where a reasonable person would know that harm was likely to occur. If you make the decisions or get the benefits, you are on the hook, and you need to be on the hook for more than you made.

But there’s another question. What is the correct punishment beyond financial, because a lot of the crimes aren’t crimes where money can make the victims whole?

Perhaps with respect to polluters, for example, the executives might be made to partake of their pollution. “This is what people drank, you will drink the same.” Or “this is what people breathed for days that caused cancer, you too will breath it.”

There’s a certain eye-for-an-eye beauty to this, but I dislike doing evil to people even when they have done evil because it’s still doing evil.

I would suggest instead a simple rule. Take back all the money them made while in charge, then take enough to bankrupt them. Next, since they have shown they can’t be trusted, forbid them from any position of authority in any organization: no management or executive or board positions, no legal ability to control anything. All their possessions in the future must be controlled by an executor appointed by the government.

For truly significant harm, we might say that they are no longer allowed to work, but must subsist on whatever welfare or other provisions are provided for the indigent. Given background checks, this is often what happens to criminals: no one will hire them.

(Doing this to important people would likely lead to a significant improvement in the welfare system.)

These should probably be time gated. Ten years minimum, thirty year max, with the possibility of “parole” where they’re allowed to have a low level responsible positions, like foreman or control over their own assets while someone watches over their shoulder to see how they do.

All such rules, of course, must be done with the presumption of control. If you’re CEO or a board member, you don’t get to dodge any decision you should have known about. You don’t get to blame managers or grunts.

What sort of solution do you think would work to stop corporate malfeasance (or political)? Put it in comments.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

Remembering Who The Nazis Killed First

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On March 14, 2023

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Niemoller:

First they came for the socialists, and I did not speak out—because I was not a socialist.

Then they came for the trade unionists, and I did not speak out—because I was not a trade unionist.

Then they came for the Jews, and I did not speak out—because I was not a Jew.

Then they came for me—and there was no one left to speak for me.

So, the list isn’t exhaustive, there’s no mention of gays and Gypsies/Roma, for example. No one ever seems to talk about the Roma but as a percentage of their population they got it worse than the Jews did.

But forget that. It seems all we talk about is the tragedy of the Jews, but notice they weren’t killed first. First it was the socialists, then it was trade unionists.

This is because the Nazis first killed those who were an actual threat, then went on to kill those they hated (and who money they could steal without upsetting the majority of the population.)

Liberals always make deals with fascists or reactionaries who take over their countries. They generally do quite well out of them, corporate officers saw their incomes soar under Hitler. The argument between liberal and fascist is an argument over brothers about who should rule their father’s house: fascists treat capitalists and business well, they just need to know their place.

The left can’t make deals, because they are in fundamental opposition. This is true of fascists, who kill left-wingers, but it is also true of making deals with liberals. As Corbyn and Lula recently proved, even the mildest of leftists can’t cut a deal with liberals, because liberals don’t see the left as legitimate.

It should be pointed out that this was true of FDR, as well. The rich and the right never forgave him, always hated him, and spent generations undoing what he had done. Every time you see an attack on so-called entitlements,  understand that is part of the right’s long war to destroy FDR’s legacy.

I would put FDR on the left, though some wouldn’t and I understand why. FDR saved capitalism from the capitalists, who had no idea how to fix it and wouldn’t listen to those who did, like Keynes. If your left-wing beliefs mean the absolute destruction of capitalism, and quite possibly they should, then FDR was an enemy, though I see him a different way.

FDR created a system under which capitalism could work and could raise all boats. It did that until the 70s and then failed. FDR was the “can this system work?” attempt.

The answer, for a number of reasons, many of which I’ve written about other places (see “The Decline and Fall of Post War Liberalism and the Rise of Neoliberalism” to start) is NO, capitalism can’t actually work to raise all boats over the long term. What looks like capitalism raising all boats isn’t, it’s industrialization. Under FDR’s policies and those that continued to the late 60s or so, though diluted, inequality fell and fell and fell. Those policies had issues, but as we’ll discuss in my series on the great ideologies, the solution was to fix those problems, as with the 60s civil liberties movement, not to get rid of the system wholesale.

But we did because capitalism, even carefully controlled, always allows a few people to control too much money and thus power and those people always want more and are able to work to get more since they can hire and sponsor large numbers of people to work to destroy any egalitarian system. This is what the rich did with, among other things, their sponsorship of business schools and economics departments. Though forgotten by most today, few men did more to destroy equality and an economy which distributed wealth and income more than the economist Milton Friedman.

The rich—remember. They remember 90% tax rates. They remember estate taxes which broke up their wealth. They remember the period in which they had to give up their estates and their servants. They remember. And they hate.

And so even a mild left winger like Corbyn or Sanders, who’s want 60s economic policies with a side of social justice and think that maybe you shouldn’t run Apartheid states are seen as a mortal threat and that’s because, well, they are. Ninety percent top marginal rates, estate taxes and re-nationalization plus re-regulation of industry and breaking up the huge conglomerates would be absolutely disastrous for those who run our economy and control our politicians.

Remember that when Corbyn looked like he might win the UK Prime Ministership, there were actual threats of a military coup.

Understanding this relationship is important for anyone on the left, even those who are on the very moderate FDR fringe. Liberals will never accept you in power and will do everything they can to stop you. Notice the assassinations of the 60s: two Kennedy brothers, MLK and Malcom X. The liberals won’t mass murder, but if they must they will kill leaders and they will mass deport as they did after World War I. The fascists, well, they’ll just liquidate as much of the left as they can find and anyone who thinks this can’t happen in their country is whistling past their grave.

Finally, let’s point out that markets and capitalism are not the same thing. Markets are useful and have existed for thousands of years.  One solution set for destroying capitalism involves finding a way to get the good out of markets without the evil, turning them into servants, rather than the mechanism by which we choose our masters.

Another is to find a way to make economic decisions and distribute goods which doesn’t require markets. That one attempt to do so failed does not mean it is impossible, simply that we have not yet done it at scale in a way which works.

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The Core Of Class Struggle From Below

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On February 15, 2023

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Is just “all our lives will be good, or yours won’t be.”

Since there’s always some idiot who reads these posts and thinks they’re smart, no this doesn’t mean everything turns out identical or that some people won’t get cancer.

It means everyone gets enough if society has it, and gets treated fairly. It means that if a rich or powerful person gets cancer they get the exact same treatment the poorest and weakest person in society does. It means money and power can’t get you anything that actually matters: not education, not health care, not food when other people are going hungry.

“No one gets seconds until everyone has had firsts.” And no one gets thirds till everyone who wants them has had seconds.

The job of actual class struggle is to make it so that the rich and powerful can’t enjoy their wealth and power until everyone is taken care of and treated the same.

This is why the gays got Obama to support gay marriage by the way. It seems to be forgotten by Obama was an anti gay marriage bigot who recorded a call against gay marriage and whose chaplain for his inauguration was anti-gay marriage. So the gays, a lot of whom had carried water for  him during the election did two things: they cut off the donations, hard, and they went after his wife: broke into a fundraising party and made her life miserable.

Oh, the squeals. The hand-wringing.

But it was pretty mild, she gets to be famous and rich because of her husband and she carried  his water, for sure. She can take a little screaming and if she can’t, too bad.

But as I said, this is mild. Things will be serious when people start saying “if you make one of us dead or homeless, we make one of you dead or homeless.”

We’re all in the same life raft, or we aren’t and if we aren’t, then the only solution is to put us in the same raft and make the powerful bail and drown with the rest of us.

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Britain Stops Making Vaccine Available (But the Rich Will Still Get It)

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On February 1, 2023

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So, here we go:

Now, I want to point out again, that at Davos, where the rich and powerful meet to decide the fate of the world, everyone has to be vaccinated, and has to be tested and if they aren’t or they test positive, their badges are deactivated.

In other words, the rich get vaccinated. Current vaccines are pretty shitty, because they haven’t been keeping up with the mutation speed, but they’re still better than nothing, and do reduce the seriousness of cases.

But that’s not really the point: the point is that for the rich the cost of vaccine (Modern is raising it from $26 to $110 to $130 in the US) is meaningless to our lords and masters: they don’t even notice $120: they spend more, much more, for lunch. But to ordinary people such a price can be the difference between eating or paying the rent. If it has to go, it goes.

One policy for the rich, who can afford bespoke medicine, and another for the plebes.

This is also terrible public health policy. While the vaccines don’t prevent spread, they do reduce viral load in infected individuals, and thus reduce the odds people around them will get infected. Mass vaccination (note that it is voluntary) is a good thing.

Leaving aside the whole “death” thing, there has been so much disabling due to Covid that the Bank of England, hardly touchy-feely compassionate sorts have noticed it with alarm, so even if you, like our lords and masters, are functionally a psychopath, this is going to continue to cause disaster in the economy.

But then labor shortages and supply chain problems have been used as an excuse to raise prices much higher than cost increases, so from the point of view of the ruling class, who is this their problem? They’re getting richer; they make sure the people around them are tested and vaccinated and most of them can work from home and even before Covid lived inside carefully vetted bubbles. And if they do get sick, they’ll get the best care, far better than you will.

So, really, Covid continues to be win-win-win for the ruling class and who cares if it’s a mass death, mass disabling event of the sheep they rule over?

WIN! From WIN to WIN. That’s what it’s like to be in the ruling class. Even a pandemic that kills millions is just another profit opportunity.

Too bad you aren’t a member.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

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