The great depression and the great recession

Our current economic situation invites comparisons to the Great Depression. Supposedly, the Great Depression was supposedly cured by Keynesian stimuli, not the least of which was building a metric assload of bombs and dropping them on the Germans and Japanese. But while stimulus was a necessary tool in ending the Great Depression, it was not the only tool.

The New Deal fundamentally changed the existing laissez faire capitalist system. Important steps were taken to change the social and economic relations between workers and capitalists: the minimum wage, unemployment insurance, social security, high marginal income tax rates, strong labor unions, strict financial regulation, etc. In contrast, the First Imperialist War had a considerable stimulative effect on the U.S. economy, leading to the Roaring Twenties. But without fundamental changes to capitalism, the boom lasted only a little more than a decade before collapsing in the Great Depression. If we did as Krugman et al. suggest and pumped a massive ($2 trillion or more) stimulus into the economy, we'd likely see considerable improvement that might last a decade. But about 10-15 years is as long as we could expect: without fundamental changes to the system, we should expect nothing but for history to repeat itself, and another equally catastrophic crash to occur in the mid 2020's if not sooner.

The important lesson is not just that stimulus can cure even a massive cyclical downturn (and can do wonders, I think, for even structural unemployment) but that capitalism, especially laissez faire capitalism, has structural flaws which cause massive cyclical downturns, flaws that must be corrected at the structural level. And FDR's New Deal did in fact at least begin to correct those flaws. Even the most cursory study of economic history shows that the economy in the 19th and early 20th centuries behaved substantively differently than the economy in the latter half of the 20th century. Cyclical downturns decreased in number and severity; our biggest problem in the 20th century was managing inflation, which was in our case a side effect of having money coming out of our ass: not the worst problem to have.

So the question has to be: what the fuck happened? We fixed the Great Depression, we made many important structural changes to our economic system, and here we are in another catastrophic failure of the capitalist system (which will get worse after the Republicans take the House of Representatives in November). Our first house collapsed in an earthquake, we rebuilt it better and stronger... and then it collapses when someone sneezes. What. The. Fuck!? Seriously!

What happened was that we removed the structural changes in our economic relations we added during the New Deal. Financial regulation is a joke. Labor unions where not entirely absent are owned by the capitalists. The minimum wage has been below the equilibrium wage for a decade or more (and now that it's slightly above the equilibrium wage, it's routinely and easily circumvented). The top marginal income tax rate is not really 35%, it's 15%, i.e. the long-term capital gains tax rate; ultra-wealthy make most of their real money with capital gains. (It's no surprise that hedge fund managers dominate the top earners: their "income" is taxed as long-term capital gains.) Only unemployment insurance and social security remain. Unemployment is running out (and applies to only of the fraction of the unemployed) and our "Democratic" president is at least not resisting (and may be enabling) the dismantling of social security.

Look back at the history. Social security is the foundation of the New Deal structural changes to the economy, and there's been a faction of the capitalist ruling class (and the upper levels of the professional-managerial class) that has not just disliked the idea of social security, but hated it with the burning fury of a thousand white-hot suns. But why? Come on: social security is nothing but the idea that none of our old people — people who have worked all their lives — should actually starve to death. Not only that, but social security is largely paid for by the same people it benefits: the working class and lower professional-managerial class. Why should anyone even mildly dislike, much less hate social security? Does this faction just hate old people with the same intensity that they hate blacks, women and gays? I think not: there's something deeper going on.

The fundamental issue, I think, is that the Randian faction of the capitalist ruling class has the idea that they are in charge, or ought to be in charge. They are, after all, the capitalist ruling class. The government, such as it is, should do nothing else but protect their interests, their status. They will take care of the middle and lower classes directly, thank you very much, and see to their moral and economic development as they see fit. Social security deeply subverts this idea: it says we ourselves (i.e. the working and professional classes) will take care of ourselves, and we will use the government directly to provide for our own interests, without the mediation of the capitalist ruling class. The subordinate classes vastly outnumber the ruling class; once we start using the government directly for our own purposes, however benign, it's only a matter of time before we use the government to eliminate the capitalist ruling class completely. The capitalist ruling class, surprisingly enough, is not about to let this happen.

I'm very pessimistic about the current situation. In 1932, the capitalist ruling class, having ruled unopposed for generations, was complacent and unused to serious struggle: all they did — all they needed to do — to respond to the populism, anarchism, socialism and communism of the late 19th and early 20th centuries was to throw money and police at the problems, or stage a great big war (a war won by the capitalist ruling classes in all countries, including Germany). Today, however, the Randian faction of the capitalist ruling class is disciplined and hardened by two generations of a largely successful struggle to regain power. They will not make the same strategic mistakes they made in the 1930's. They will take power: They will make substantial gains in November, and their victory will be complete or nearly so in 2012. (Even if Obama were to win re-election (I predict he won't), he will be rendered impotent or actively co-opted.)

I'm a communist, but I'm not stupid: I can see that the political organization of the Soviet and early* Chinese Communist Parties and their governments was... er... suboptimal. The problem is that the political organization of capitalist ruling class in the United States shares the worst features of the Soviet and early Chinese Communists: lack of transparency, severe barriers to entry, lack of popular accountability, and rigid and unreasoning ideological dogmatism**. And they have proven time and again they are ready, willing and able to use the most severe police powers without compunction to enforce their rule, Constitution or no. The capitalist ruling class and their government is doing and justifying everything we supposedly complained about the commies: torture, indefinite detention without trial, mass arrests and violence against peaceful*** protesters, counterfactual propaganda, wars of aggression and naked imperialism.

*Say what you will about them, but the modern Chinese "communist" party and government are forces to be reckoned with.

**Just look at any "freshwater" graduate school of economics, which not only reject socialism, but dismiss and demonize even "saltwater" capitalist economics. These guys (and yes, they're mostly men) hate Roosevelt and Krugman a thousand times more than they hate Lenin or Castro. Hating small ideological variations more than completely opposing ideologies is a sure sign of unreasoning dogmatism.

**Well, mostly peaceful, and the police responses (cough WTO) have been completely out of proportion to the relatively trivial offenses.

The capitalist ruling class has made a lot of mistakes: they're hardly omnipotent. They might well have grabbed absolute power under Bush and Cheney: I suspect that Bush flinched: his sentimentality and weakness was the only thing that prevented complete despotism. They were obviously not counting on the collapse of the housing bubble and the subsequent recession (without which McCain might have actually won in 2008). But they are growing ever stronger, toughening their will, and improving their discipline and ideological cohesion. They will not repeat their mistakes.

We're in for a long, tough slog over the next century.

Failure of demand

First, we have to understand the underlying nature of the problem: demand. People have to want stuff and they have to be able to buy stuff. (The producers also have to be able to collect the money, a problem (with several interesting solutions) for free software and free information in general in a capitalist economy.) The financial crisis in the current economy is caused by a failure of the second part of demand: people want stuff, but they can't buy it.

Capitalism prior to the Great Depression was driven primarily by production to make the working classes more productive*. There was tremendous pressure not only to use machines to make workers more immediately productive, but also to improve their standard of living to make them better workers overall and to support more workers. (Note that Marx was not incorrect in noting the poor quality of life of industrial workers in the mid-19th century; there was no "altruism" whatsoever in the capitalists drive to improve workers' standard of living. Utopian fuckwits notwithstanding, it still remains arguable, however, that the quality of life of pre-industrial agrarianism was even lower than under industrial capitalism. Secondarily, capitalist production created the professional-managerial middle class, which absorbed much of the luxury production afforded by improved productive efficiency.

*Per-capita consumption as a percentage of total production by the ruling class has fallen substantially from feudalism, and continues to fall. Contrast Versailles with the Hearst Castle and Bill Gates' home.)

The problem, becoming apparent even by Marx's time and underlying the recessions of the 19th century, was that the personal demand of the upper and middle classes was beginning to fail: they no longer wanted stuff. Contributing to this failure was the social attitude that created the capitalist ruling class in the first place (and which permeated to the middle class): a distaste for consumption in favor of saving and investment. The feudal ruling class consumed not only ostentatiously but proudly: they were, in their own eyes (and to some degree justifiably) turning what little surplus labor there was — surplus labor that couldn't be invested — into works of great art and beauty, which they (again to some degree justifiably) conceived themselves to be holding in trust for future generations. One reason why the capitalist ruling class arose as a distinct class — rather than the feudal ruling class simply embracing industrial production — was precisely because the capitalist attitude favoring investment over consumption afforded a much higher rate of industrial development.

This crisis of demand came to a head in the 1929 stock market crash and subsequent depression. The professional-managerial middle class (relatively large compared to early capitalism), whose individual desire to consume was saturated, tried to gain entry in the capitalist ruling class by exploiting loopholes in the stock market.

It is entirely incorrect to view the loopholes and weaknesses in the stock market in 1929 or the shadow banking system today as the problem that needs to be corrected. It's certainly a problem, but it's impossible to build a system with no loopholes or weaknesses at all, especially when there's any negative selection pressure that can be escaped by finding or creating loopholes. (Most simple systems work only because no one is actively trying to subvert them; the most well-designed complex systems fail even though no one is trying to subvert them.) At best, advocates of "regulation" are fighting the last war.

FDR's New Deal and Keynesian economics was the last, best hope to "rescue" capitalism from its own contradictions. It succeeded — at least for a while — because not only did FDR et al. improve regulations on the stock market and financial system, but also because it pushed a considerable amount of social demand — the ability to buy stuff — on the working class. Of course, the United States supplied this demand in no small part by creating the most powerful international economic empire in the history of the world, hyper-exploiting tens or hundreds of millions of foreign workers as well as tens of millions of American minority and illegal immigrant workers. Even so, without the demand of a huge chunk of the American working class, American imperialism would have faltered.

However, the New Deal and Keynesian economics did not address the primary selection pressure operating on members of the capitalist class: losing their money and being ejected from the capitalist class. Indeed the entry of hundreds of thousands of new members to the lower rungs of the capitalist class increased this selection pressure. It doesn't matter, for example, that there is a vastly expanded demand for shoes if you yourself cannot efficiently produce shoes: you'll still go out of business. The selection pressure remains, and to evolution it doesn't matter how you escape selection pressure; all that matters is that you do escape it.

"Efficiency" in capitalist economics has two* definitions: producing goods with less actual labor time ("good" efficiency), and producing goods with less actual labor cost ("bad" efficiency). One company that can produce 100,000 shoes a year with 100 workers paid $10/hour, is "more efficient" than another company that can produce 100,000 shoes with 75 workers paid $20/hour. There are always loopholes and weaknesses in regulations that mandate that workers be paid $20/hour; the companies that find and exploit those loopholes will escape selection pressures that will eliminate companies that don't find them or have some "moral" compunction against exploiting them. [see comments]

As long as there is labor cost selection pressure, the labor market will find ways to "fall downhill" to a market for labor power rather than a market for labor time, i.e. the price for labor will fall to its cost according to the law of supply and demand. All you can do with regulation is select against some particular methods of making the market for labor a market for labor power, and whatever you don't select against will end up being selected "for".

*Three, actually: the third is producing more (or better) goods for the same time/cost.

From the late 1940's to the 1970's, we had tremendous economic growth in the United States (and Western Europe). The vastly increased demand (ability to buy) afforded mostly by labor unions and government labor regulations eased selection pressure overall: with demand so high, even relatively inefficient producers were not selected against. The chief problem of the era (and we were lucky to have that problem) was convincing people to want to consume what was being produced. There also was a certain symbiosis between foreign and American workers. The hyper-exploited foreign were producing mostly raw materials and some technologically unchallenging manufactured products, such as textiles; American workers were producing more complex and technologically challenging products, such as automobiles and airplanes. Technological issues, especially shipping, worker education, and management, prevented "outsourcing" and made American workers more cost-efficient overall, despite a much higher unit cost.

But selection pressure was not absent: companies were going out of business and a lot of capitalists in the 50s and 60s failed and were expropriated. Even if only a small fraction of companies just looked for ways to reduce labor costs rather than labor time, that small fraction still escaped selection pressure more often than companies that didn't look for (or didn't find) ways to reduce labor costs. As evolution shows us, even a small reduction in selection pressure against a minority always* leads to that minority eventually dominating the population and often completely eliminating alternative variations.

*Almost always: there are some exceptions due to higher-level selection pressures.

Because of the way selection pressures work within the capitalist ruling class, no amount of regulation or "artificial" constraints on the capitalist class will ever be effective in the long (i.e. 30-40 years) term. We would literally have to regulate with the power, knowledge and benevolence of an deity* to successfully overcome the selection pressures inherent in the capitalist system.

*It should be noted that no such omnipotent, omniscient and omnibenevolent deity actually exists.

In the New Deal years, while the upper middle professional-manager class was struggling — often successfully — to enter the capitalist ruling class, the working class and lower-middle class were storing some of their new ability-to-buy demand into housing and pensions. Naturally, when labor costs started to decline — i.e. actually working was creating less ability-to-buy demand — ability-to-buy demand devolved to first pension funds and then home prices, producing the bubbles of the 21st century. When these bubbles were exhausted (in the space of just a few years each), ability-to-buy demand completely collapsed.

To a certain extent, this stored demand was simply stolen through chicanery and outright fraud. It makes a certain amount of sense to look for ways this chicanery and fraud can be prevented and eliminated, and it seems that a lot of "progressive" economists have focused their entire attention on this effort. But the fundamental problem is that there was an opportunity for these areas of stored demand to be stolen in the first place. Two conditions are necessary for anything to be stolen: the stolen property must of course exist, but more importantly it must be placed at risk by its owners. No matter how much gold there is in Fort Knox, it's not going to be stolen from there. It's very difficult to take someone's house when it's paid for (or they have enough ability-to-buy demand to maintain their mortgage payments): if you want to steal someone's house, you have to convince them to put it at risk by taking out a mortgage they can't pay for. Because ability-to-pay demand on the basis of wages was declining for the working and lower-middle classes, that's exactly what they did: take out second mortgages and home-equity loans on their more-or-less paid-for (or being paid-for) houses. And they more-or-less "rationally" had to do so: because their mortgage payments were tied to their incomes (and their pensions tied to the health of the companies), had they not propped up overall ability-to-pay demand by tapping their houses, they risked losing their jobs (predicated on supplying that demand) and their houses anyway. Because of the fundamental nature of the capitalist system, the working class and lower-middle class was in a "damned (tomorrow) if you do, damned (today) if you don't" double bind.

In a purely engineering sense, any competent, honest and caring economist could design a system that would maintain aggregate demand, keep full employment, and guarantee a dignified standard of living to everyone on the planet. Throw in the scientific, engineering and technical knowledge we already have, and we could probably support ten times as many people as we have, all with dignity and a reasonable level of comfort. Even I myself could probably make a decent attempt, with my amateur and half-assed understanding of economics and physical science.

Figuring out how to design an economic system is not the problem. If we had a reasonable level of good will and common desire, I can't see that it's really even as technically or intellectually challenging as designing a computer operating system. The problem is that we don't have good will. Even if 90% of the capitalist ruling class had even a little Keynesian good will and common cause with the working and middle-classes, they would be eliminated by the other 10% of Randians long before they could actually implement any economic system that was good for everyone. They partially succeeded in the 1940s only because a "perfect storm" of circumstances diminished the power of the proto-Randians (i.e. there was a "group selection" event) leaving them in a position of temporary advantage. But the proto-Randians weren't completely eliminated; more importantly, the fundamental selection pressures didn't change: the selection pressures that afforded a Randian attitude (improved cost-efficiency, not time-efficiency) a relative advantage didn't change.

To be honest, drilling down to the evolutionary pressures on politics and economics isn't all that comforting. One imagines, per Marx, that somehow the working class can directly exert selection pressure: they certainly appear to have the raw power to do so. But they do not appear to have the political and psychological will to do so, and a century of communist and socialist agitation and propaganda failed to make this will pervasive in the working class: FDR and the Keynesians threw the working class a bone in the 1940's, and they couldn't run away from communism fast enough. The massive anti-communist propaganda in the 50's and 60's had a lot to do with the outcome, but even the best propaganda cannot succeed where there isn't fertile ground in people's minds for its ideas.

With all due respect to many of my friends, whom I like and admire greatly (and even many people I consider to be well-intentioned jackasses), the radical anti-capitalist (communist, socialist and anarchist) movement is entirely ineffectual and meaningless. Even the capitalist liberal and "progressive" left appears almost completely unable or unwilling to exploit the catastrophic — and frankly egregiously stupid — blunders of the Randian capitalist right.

We're running out of options, and running out of time. All I can see is a literal mass extinction of most human societies, perhaps of all humanity. Even if some are left standing to rebuild the world, the "victors" will mostly be selected by pure chance, not by any intrinsic moral virtue.

Rearranging the deck chairs

Partly because I got interested in communism, which draws novel and deep connections between economics and politics, and partly to understand the current financial crisis and subsequent depression, I began reading a lot of capitalist economics blogs, including Paul Krugman, Brad DeLong, and others.

When I first started reading them, the authors seemed to be looking deeply at the fundamental economic, political and sociological underpinnings of the crisis. Lately, however, most of them (with the exception of some posts at naked capitalism) seem to have just given up, talking about the nitty-gritty details of the financial reform bills in Congress and the bailout of the Greek economy. Even Krugman, who's fairly pessimistic about Greece (as well as Portugal, Italy, Ireland and Spain, who are headed for similar trouble) seems to have just stopped looking at why our economy and financial systems are in trouble. At worst, they're arguing over the new arrangement of chairs on the Titanic, over the color of the band-aid on our gaping economic wounds; at best they're pessimistically noting that band-aids won't help without really talking about what would help.

There are a few exceptions, but lately I find myself skipping over most of the economics blogs I read. Ho-hum, another critique/apology for the not-even-half-assed Congressional finance reform bill or Greek bailout.

The coming financial crisis

There's yet another financial crisis coming.

According to Gonzalo Lira, the Obama administration is attempting to reproduce the solution to the Latin American banking crisis of 1982.

During the 1982 crisis, banks with large loans to Latin America became technically insolvent, because the value of the loans declined substantially due to actual or potential default. Federal Reserve chairman Paul Volcker effectively turned a "blind eye" to the banks technical insolvency while forcing them to renegotiate and write down (or off) their bad assets. By 1984 the banks had eliminated bad debts from their balance sheets and grown their way back into solvency. Had Volcker insisted on immediately restoring the banks' solvency by forcing them to sell assets at "fire sale" prices, there would almost certainly have been a severe general economic recession.

The Obama administration is attempting to replicate this approach. On April 2, 2009, the Financial Accounting Standards Board suspended rule 157 (presumably with the approval of the Obama administration and Securities and Exchange Commission), which requires that assets be accounted for at their market value. There's some justification for temporarily suspending this rule: As in 1982, there's some value in temporarily allowing technically insolvent banks to continue operations when there's a large, systemic decline in asset values. (It seems more sensible to simply allow the banks to operate while technically insolvent, rather than cover up the insolvency, but sometimes it's easier to game the system one way rather than another.)

However, a critical component of Volcker's 1982 strategy was pressuring the banks to actually adjust their balance sheets to reflect the decline in the value of Latin American debt. While the Obama administration has given the banks some "breathing room" by allowing them to cover up their insolvency, they have not also pressured the banks to clean up their toxic assets.

Worse yet, the banks are using the supporting funds provided by the Congress and the Federal Reserve not to actually invest in productive or socially useful activity, but rather to trade amongst themselves and create yet another speculative bubble:

Instead of being banks, since March of ’09, the Big Six US banks have effectively become hedge funds. They have been trading themselves into profitability. Worst of all, these banks qua hedge funds have been making money by trading with each other. Price-to-earnings ratios bear this out—their general upward trend, across sectors and industries, even as the economy has been severely weakened, is indicative of a speculative bubble. A massive bubble—the kind that makes the Hindenburg look puny.

It's all paper profits, and sooner or later this newest bubble will burst.

It doesn't have to be as dramatic or extensive as the bursting of the housing price bubble. Unlike 2008, the economy is today on the ropes: one more hard punch and we'll be down for the count, in another Great Depression... a depression that will be blamed on the Democratic party, leaving only the Republicans as a supposedly "viable" alternative.

2012 and beyond

These are not predictions; I'm just speculating on a more-or-less worst-case scenario.

The economy takes a double-dip recession in late 2010, and unemployment is still above 9% or perhaps rises above 10% again. The Democratic party loses more seats than expected, hanging onto a slim majority in Congress. More importantly, several existing and new Republican seats in the House go to ultra-right "Teabagger" sympathizers.

The economy worsens between 2010 and 2012. Civil unrest grows, especially in the inner-cities (read "Black"*) and among industrial labor. A charismatic and strong leader of the ultra-right Teabagger faction gains national prominence. His or her platform rests squarely on oppression, expulsion and barely-concealed eliminationism of immigrants, socialists, Muslims and atheists to purify America of the corrupt elements that are holding us back. (Add a healthy dose of racism and misogyny on the side.) He or she also promises to put America back to work (by intensifying and expanding the wars in the Middle East). The Teabaggers act violently, often against other protesters, but also against a few select (relatively) moderate or especially recalcitrant Republicans.

*i.e. I expect black people to get screwed by the economy extra hard.

President Obama is severely weakened by the mid-term elections. He tries to become more confrontational and combative, but it's too little, too late. Additionally, in a series of PR blunders, the existing Republican party leadership alienates the Christian right. The Republican party, with severe internal divisions, nominates a dark horse candidate. Neither Obama nor the Republican nominee have a strong popular showing in 2012, with the incumbent Obama having a slight plurality. The Teabaggers run a third-party candidate who secures about 20% of the popular vote.

One of three things might then happen: The Teabagger candidate might actually win a state, giving him or her representation in the Electoral College. It's possible too that state-level Teabaggers might get proportional representation passed in one or more red states, giving the Teabagger candidate at least one electoral vote. It's also possible to directly suborn one or more of the Electors: at least some are not legally compelled to vote for the candidate they're pledged to. If the election is close, just a few votes in the Electoral College would be enough to deny both the Democratic and Republican candidates a majority.

The election is thrown to the House of Representatives, who consider the top three candidates from the Electoral College vote: a Republican, a Democrat and a Teabagger. This is the moment for the big putsch.

The 12th Amendment structures the House vote for president weirdly. The congressional delegation as a whole from each state has one vote. Because there are fewer, more populous Democratic states, it's virtually impossible for Obama to win... unless the Teabaggers, who have enough representation in enough states, throw the vote.

They make a bold bluff, and threaten to vote for Obama unless the Republican states vote for the Teabagger. A near-riot crowd of Teabagger supporters surrounds the Capitol, and there's demonstrations and rioting around the country. There are also hints of violent retribution for "recalcitrant" Republicans. The Republicans turn to the conservative Democrats, to no avail: they hope that the Teabaggers aren't bluffing. With partisan animosity and what little party discipline remains to the Democrats, it's not enough. The mainstream Republicans must choose: the Teabaggers or Obama.

The mainstream Republicans blink. Of course they blink. They respect power. A few phone calls, perhaps from Hindenburg Rupert Murdoch or Tom Monaghan, cliches the deal: we can do business with the Teabaggers.

Why not? Hitler's machinations were no more plausible.

The Laws of stupidity

The Basic Laws of Human Stupidity:

1. Always and inevitably everyone underestimates the number of stupid individuals in circulation.
2. The probability that a certain person will be stupid is independent of any other characteristic of that person.
3. A stupid person is a person who causes losses to another person or to a group of persons while himself deriving no gain and even possibly incurring losses.
4. Non-stupid people always underestimate the damaging power of stupid individuals. In particular non-stupid people constantly forget that at all times and places and under any circumstances to deal and/or associate with stupid people always turns out to be a costly mistake.
5. A stupid person is the most dangerous type of person.
   Corollary: A stupid person is more dangerous than a bandit.

[h/t to faithlessgod]

Gilead

If reforming capitalism could work, even a little, then Franklin D. Roosevelt's comprehensive reforms of capitalism in the 1930's and 40's would have worked. They have not, and it seems entirely implausible that we can do better than his reforms while still preserving capitalism.

We can determine empirically that FDR's reforms ultimately failed, and there's a theoretical understanding as to why they failed. Empirically, we have seen since the 1970's a steady decline in the wealth, power, and standard of living of the American working class — in comparative and absolute terms — even as the overall wealth of the nation has increased by an order of magnitude. We have seen Democratic party administrations cheerfully undermine the foundations of reformist capitalism: especially Clinton on welfare and the regulation of finance capital.

The theoretical reason is that reformist capitalism is inherently unstable. The primary dialectic within the capitalist class under reformist capitalism becomes a conflict between those who would preserve existing reforms and those who would undermine them. Individual owners of capitalism have a strong incentive to override or evade reforms. It takes just as much political will to preserve existing reforms as it does to erode them. Therefore, any temporary failure of will to preserve existing reforms will result in some erosion; when the will returns, it will be directed towards preserving those reforms that remain, not regaining lost ground.

The dialectic within the working class mirrors this bourgeois dialectic. The capitalist reforms distribute benefits to the working class unequally: the dialectic within the working class thus becomes a conflict between those who have achieved more benefit and those who have achieved less or none. Again, we see a ratchet effect: it requires as much political will to preserve one's benefits as to lose them, and any transfer of benefits from one portion of the working class to another inevitably loses ground overall to the capitalists.

(There are, of course, a few positive gains made here and there to living standards for the working class. But for every gain there are ten losses, and the overall trend is clearly downward.)

This ratchet has — with the deregulation of finance capital — begun in the last decade to hit the professional-managerial middle class. Even the most highly skilled professionals are subject to relentless market pressures to reduce their economic participation to bare survival.

We're still far from the bottom, but with the debt crisis, the enormous and still growing unemployment crisis, the ratcheting-downwards is picking up speed.

At best, with adroit skill and iron will, President Obama and the Democratic party government can slow the decline, and perhaps pick up a couple of modest gains, perhaps some half-assed "universal" health care which will slow, but not stop, the inclusion of access to medical care to the "big three" ways (rent, interest and profit) the capitalist class exploits the workers' surplus value.

We can talk all we want about "principles" and "common sense", but what's happening is (as always) a dialectic of interests: class interests, intra-class factional interests and individual interests. Analyzing the present circumstances as a dialectic of interests and the power to realize those interests leads directly and inexorably towards the conclusion that the wealth, power and standard of living of the working class, professional-managerial middle class and petty capitalists (small-business owners) will decline until they find the will to resist in common cause.

Once conditions have declined to the point where the "lower" classes find the will to resist, conditions will reach rough parity, and very small differences, especially in leadership, will have enormous effects. The outcome of that class struggle will depend in no small part on who is stronger: our Hitler or our Lenin. (We will have no Roosevelt; material and political considerations entirely preclude reformist capitalism.)

In the long run, socialism leading to communism will eventually triumph — at least if we don't kill ourselves off first. Communism is just better; sooner or later everything will come together and we'll take the next step in civilization. But, as Keynes famously noted, in the long run, we're all dead. The question is what's going to happen to us and our children, living, breathing, thinking, feeling human beings.

I'm not particularly optimistic about how things will turn out in the United States. I see us more in the light of post WW-I Germany 1918-1919. (See Sebastian Haffner's excellent book, Failure of a Revolution.) First, conditions will deteriorate within the next 4 or 5 years until much of the working class (and the unemployed class, a novel feature of modern post-industrial capitalism) are in conditions of semi-starvation. Unrest will develop, but the working and unemployed classes will unwittingly support leaders and politicians who will betray them. In the interests of preventing a revolution (and not coincidentally preserving their own privilege), "leftist" politicians and leaders (i.e. supposedly "progressive" Democrats) will covertly make common cause with the right-wing bourgeoisie, who will unleash the well-armed, well-trained Christian fundamentalists to "restore order", just as the Social Democrats of post WW-I Germany unleashed on a rebellious population the rightists who would later become the Nazis.

Can we pull back from the brink of Gilead? Perhaps. But the people by themselves cannot do the job on their own. It's an unfortunate but ineluctable truth that while historical crises are caused by broad, material factors, the outcome of every crisis is sensitively dependent not on the general state of the people but on the qualities of the classes' and factions' leadership. (Else Germany would have succeeded in a socialist revolution and Russia and China failed.)

If the communists find leadership combining the theoretical brilliance, practical and organization skill and energy of Lenin, we stand a fighting chance. If the fascists find leadership combining the theoretical brilliance, practical and organizational skill and energy of Hitler (and there's no doubt that Hitler, despite being a truly horrible person, was brilliant, skillful and energetic), we're well and truly fucked.

Revolution, food riots in America by 2012

Revolution, food riots in America by 2012:

Gerald Celente, the CEO of Trends Research Institute... says that by 2012 America will become an undeveloped nation, that there will be a revolution marked by food riots, squatter rebellions, tax revolts and job marches, and that holidays will be more about obtaining food, not gifts. ...

"There will be a revolution in this country," he said. "It's not going to come yet, but it's going to come down the line and we're going to see a third party and this was the catalyst for it: the takeover of Washington, D. C., in broad daylight by Wall Street in this bloodless coup. And it will happen as conditions continue to worsen."

[h/t to BJ and kevin]

Doomsday

Not my term, but that of Sequoia Capital, a premier venture capitalist company with perspicacious and prescient management, free of illusions.

Inside Details of Sequoia Capital’s Doomsday Meeting With its Companies

They are predicting a fifteen year recession... In other words a depression, one that will rival the Great Depression and the economic turmoil of the 19^th century.

One of the key components of this depression? Significant excess productive capacity. We are too wealthy, therefore the capitalist class must impoverish us all until they can make it profitable for them to put ordinary people to work.

There are no physical factors that are causing us to be impoverished. We haven't lost people. We haven't lost productive capabilities; indeed according to the capitalists themselves we have "too much" productive capability, thus driving prices down below profitability.

This depression is a failure only of imagination and will; there is no physical reason we cannot simply think our way out of it.

To the Republicans and neo-cons

Take heart: all is not lost. All was not lost after Reagan transferred hundreds of billions of dollars of real, material wealth from the masses of people to the ruling class. All is not lost after Bush transferred ten trillion of dollars of real wealth to the ruling class. One or two more orders of magnitude and you can rule the world, with absolute power and privilege undreamed of by the most extreme caricature of a decadent oriental potentate.

You are revolutionaries, intent on making radical changes to the very fabric of society. Such a revolution always entails unexpected and unanticipated problems. Those problems require a period of readjustment, a time to "catch your breath" before the next push.

That's what the Democratic party is for. Obama is to your next leader what Clinton was to Bush: someone who will stabilize the last round of problems so you can pursue the next round of changes from a solid base. You'll lose this election. If you're smart, you want to lose this election. You cannot both solve the temporary problems stemming from the latest round of revolution and still keep your credibility for the next round. Better to delegate the task to the Democrats, because you can attack them publicly for the problems while they stablize the new state of society.

You're almost there; you need just one more big push, probably in 2016.

In the meantime...

You need someone like Sarah Palin, or perhaps Sarah Palin herself. A critical component of your strategy must be to hold the religious right as your base for the popular legitimacy you'll need for the next push. They're perfect: they'll never vote their own material self-interest. Promise them you'll burn gays and atheists at the stake and keep the women barefoot and pregnant, and they'll give you everything they own and work overtime to give you more. Sarah: Stay in good with the relgious right. You might run, but (unless Obama is already sinking fast and unelectable) make sure you don't get nominated in 2012. Keep your powder dry and run in 2016.

Make sure the Murdochs are on board. They are critical. Promise them anything and make damn sure you deliver. If you lose the mainstream media to the forces of truth and the interests of the people, you're doomed to wait at least another generation for absolute power. Or, worse the goddamned commies might sweep in and defeat you completely.

Using the mainstream media to push hard hard hard on Obama. Start on day one and don't ever let up. If Obama makes the tiniest mistake, attack. Block any attempt for him to do anything good. If he does manage to do something good, take the credit and attack him for preventing you from doing better.

Keep attacking the Democratic party for being communists, socialists, fascists, traitors, terrorists, atheists, child molesters; they should be both a monstrous, imminent danger to humanity and ridiculous figures of supine impotence. If a Democrat sneezes, accuse him of germ warfare. The attacks don't have to be reasonable, logical or sensible; if you have the mainstream media to repeat the accusations, people will believe — even if they don't believe any of the specific allegations — that Obama and the Democrats are not really "our kind of people."

You'll have a congressional majority in 2010. Like Palin, keep your powder dry: wait until 2014 and then pull out the last of the stops. Impeach him then. If you can, actually prosecute him. If you can actually force him out of office (even better if you can actually put him in prison) Biden will be an easy target in 2016. But even if he beats the impeachment, the 2016 Democratic candidate will be too compromised, too defensive to put up much of a fight.

In 2016 run your Palin. You must have the religious right; you cannot, like Bush pere, be half-hearted or wishy-washy about them. You must have someone like Bush who really is one of them. Don't worry, they just want authority; dress up your authority in their trappings and they'll jump off a cliff for you.

In 2016 you won't have to fool around behind the scenes like Cheney had to. The people will hunger for a strong leader; you can do whatever you please completely openly. Fire everyone who didn't totally, completely oppose Obama at every turn and put in those who will be 100% loyal to your program.

And then? The sky's the limit. You can do whatever you please, without fear of reprisal or punishment. Anything: your will limited only by your imagination. Since the dawn of human history, people have only dreamed of such unfettered power; you can achieve it.

What are you waiting for?

It ain't socialism

Whatever it is, all this frou-frou about "nationalizing" the banks, it ain't socialism.

We have to look at the production relations, how individual people relate to each other to produce and consume the physical necessities of life. When the first phase of this crisis is over, the production relations will not change: people will be employed by the owners of the means of production, and the owners will still make a profit. We will still pay rent to a landlord or a mortgage — with interest — to a bank.

Our government is owned by capitalists, i.e. the owners of capital. They write the campaign donation checks, they provide employment to our elected officials after their terms are over. All that's happening is that capitalists are resolving the crisis by transferring wealth from the people to the capitalists. They sucked out the people's ownership of stock — concentrated in pension plans — in the last bubble; in this bubble they sucked out the value of people's homes. There's nothing left to suck out except people's actual productivity, which will now be sucked out directly with taxes. That's what Ponzi schemes bubbles do: transfer wealth from the people to the capitalists. Even the most moral capitalist must participate; if the guy in the next bank has found a scheme to extract wealth from the people, I have to participate too regardless of the long-term risks or he'll crush me in the short term.

The game is just beginning. The financial crisis is, by itself, a fake crisis. We have so far lost nothing but money. We haven't lost any human life or productivity, as we might to an epidemic; we haven't lost any physical infrastructure, as we might to a hurricane or earthquake.

I think it was Kurt Vonnegut who used the baking a cake analogy to describe financial crises: We have flour, eggs, sugar, milk; we have bowls and spoons and a working oven; we have a cook who knows how to bake a cake and the time to do so. But we have run out of ounces and pounds. Money isn't a concrete thing with intrinsic value; it's an abstraction, the unit of measurement of value.

Capitalism is not about producing goods and services that have value. Capitalism is about producing goods and services that have value to individuals with money. If the mass of ordinary people have no wealth and no money, then it is unprofitable to produce what they need, no matter how much they need it. When money moves from the people to the capitalists, we are implicitly deprecating the needs, wants and values of the people and elevating those of the capitalists.

An honest Randian will say, "Yes, so what?" If people have no money, if the capitalists do not value their labor sufficiently to give them money, then it would be a sacrifice — to be condemned and abhorred above all else — to meet their needs. Fortunately, committed Randians are rare (and honest ones even rarer).

The next phase of the game, which will play out over the next ten years (and most sharply in the next two to four years), will be more concretely real to the masses of people. The capitalist class is in chaos, and the result of this chaos will be refocusing production to restore profitability, i.e. producing that which has value to the people with money. Since the great mass of people have no money, the capitalists will scale back production (and maintenance of the productive infrastructure) that meets the people's needs; they will refocus production on what meets their own needs. Since the capitalists themselves are in chaos, it will be difficult to determine even what meets their own needs, and production will fall even further.

It is in the next phase that we'll see an impetus towards real socialism: socializing the production of those goods and services that meet the physical, material needs of the masses of people: food, housing, clothing, education, and medical care, putting the production and consumption of these elements on a cost basis, not a value basis.

No matter how bad things get, the capitalists will bitterly resist, with every fiber of their being, with every weapon at their disposal (including the police and the army), socializing the production of the masses' necessities and putting their production and consumption on a cost basis. The value of these necessities is practically infinite, and it is only by controlling these necessities that capitalists can persuade ordinary people to work long hours and transfer the surplus value of their work to the capitalists: Without "work or starve" the capitalist class has no raison d'etre, it has no justification for being a class.

But without socializing these basic needs, millions of people will starve and die, and the rest will live in abject poverty while the capitalist class lives in unparalleled luxury. We need look no farther than just outside our own borders to see what happens when we fail to socialize basic production: the typical third-world economy with a minuscule privileged capitalist class, a tiny middle class serving their needs, and the great masses of people laboring in sweatshops for a meager living to earn those capitalists their luxuries and privileges.

This outcome can occur, and our size and history is no guarantee that it will not.

Reform or Revolution

When I started seriously blogging on January 1, 2007, I was a pretty standard liberal Democrat. Disappointed with the Democrats, but still of the opinion that they were merely confused and needed nothing more than a swift kick in the pants to get back on the ball.

And then I started actually paying attention to what was going on.

The whole point of partisan politics is to use an adversarial system to effect social change. And just in terms of partisan politics, the Democratic party has failed so massively that Hanlon's razor has become ludicrously implausible. The Democratic party did not fight in 2000. They did not fight in 2004. They did not fight in 2006.

And they're not fighting now. If Obama wins the election it will only be because of McCain's personal ineptitude, which — given the discipline and ruthlessness of the Republican party for the last 40 years — really can be considered an exception.

The Bush regime is not just responsible for a series of administrative "failures", they have not just intentionally dismantled the New Deal, they have perpetrated actual crimes against humanity, crimes for which we have literally hanged people. It's not enough now to just win an election. We ought to crush the Republican party, drive them before us and hear the lamentation of their women. They shouldn't just lose, they should be made objects of ridicule, cast in the dustbin of history.

Ideologically, the situation is even worse. The Republican agenda since Nixon has been crystal clear: destroy root and branch every vestige of "socialism" enacted by Roosevelt and Johnson and return this country to laissez faire third-world capitalism where 1% of the population have everything, 9% serve them, and 90% — if not actually dying, as the Randian fantasy would have it — laboring in abject poverty in circumstances barely distinguishable from chattel slavery. (The only substantive difference between the Republicans and the Randians is that the Republicans realize its better to invoke God and justify slavery than simply kill 90% of the population and abandon hundreds of trillions of dollars in physical infrastructure.)

And what is has been — and continues to be — the Democratic agenda? Do the same thing, just a little more slowly, and with a little extra lube.

If reform were even a remotely realistic possibility, we would have reformed the Republican party out of existence after Reagan. It didn't happen then, it didn't happen later, it's not happening now. Only a Christian-level of willful delusion can offer the hope that it will happen in the next four to eight years, regardless of who wins this election.

Barack Obama will not make the kind of fundamental changes to our financial institutions to prevent yet another $700 billion fuck-up. He will not give debt relief to the millions of Americans impoverished by predatory lending, or just the systematic structure that forces people to pay double in interest to bankers than they would pay in rent to landlords just for the illusion of "owning" one's own home.

Obama will not end the patently immoral war of aggression in Iraq; he will merely run the occupation more efficiently. He will not end the war in Afghanistan; he's going to expand it. He will go to war with Iran. He will not preserve — much less restore — the token social safety net established by Roosevelt; he will at best merely slow down its continued destruction. He will not preserve or restore the right or availability of abortion. He will not restore basic constitutional civil liberties. He will not end the "war on drugs" or the outrageous imprisonment and oppression of black Americans. All his promises to the contrary will turn out to be nothing but lube.

At best, we will see some "improvement" under an Obama administration just because he's not as completely fucking retarded as Bush. He will clean up the mess and continue to carry out the Republican agenda competently instead of stupidly. He will heat the water more slowly so we don't notice as much that we are being boiled alive.

It's not Obama's fault; he doesn't have a choice. It's not even the fault of the Democratic party. The neo-conservatives and the Republican party — "carrying a cross and wrapped in the flag" — have for two generations waged a relentless ideological and propagandistic revolution against the few basic human values we managed to enact in the middle of the 20^th century... and it's working.

How could it not work? In a capitalist economy, it's by definition in each capitalist's self-interest to have everything. And by definition they have the power to acquire it. Even if some individual capitalist has some vestige of humanistic moral sensibility, he knows the next guy doesn't: he has to grab as much as he can just to protect himself. Capitalism is an all-or-nothing game.

Efficiency is the name of the game, and while labor is commoditized, reducing labor cost is the royal road to efficiency. Even if some individual wants to pay his workers a living wage, he knows his competitor will just ship his factory off to the Northern Mariana Islands and enjoy the reduced cost of slave labor.

The rich people — Democrat and Republican alike — know that there are too many rich people than true laissez faire capitalism can support. All they can do is scrabble as hard as they can to break into the top 1% that will survive the collapse of consumer capitalism.

This is the grim economic and political reality of post-industrial society. It wasn't exactly inevitable; we could have fought Reagan, we could have fought Bush, we could have fought the Randians. But we didn't, at least not hard enough. And we will pay dearly for our failure.

Pessimistic ramblings on reform

During the period 1929 - 1933, the United States economy — probably the closest economy to pure laissez-faire capitalism possible in ordinary reality — collapsed in the Great Depression, dragging down the economy of the rest of the world. The Great Depression was caused by overproduction, the existence of "too much" wealth and "too much" productive capability. How the economy and government should have responded is a matter of no small controversy, but the root cause of overproduction is not at issue.

Depressions were common in the 19th century: There were major depressions in 1893 and 1873 (sometimes combined into the Long Depression).

It's debatable whether the New Deal, the economic and social reforms implemented by Franklin D. Roosevelt, would have by themselves stabilized the economy. The production of war materials for World War II certainly alleviated overproduction, and the necessity of rebuilding half the Western World (China and the Soviet Union were left to their own devices) made overproduction irrelevant.

Still, the social and economic reforms implemented by Roosevelt were modest and reasonable. Social Security is the keystone of the New Deal, is simply the idea that no one at all, regardless of their wisdom or intelligence, should go hungry in their old age after a lifetime of work.

Other notable achievements of the New Deal that were preserved or extended (notably by Lyndon Johnson's Great Society) in the postwar economy were laws and regulations regarding workplace safety (OSHA), product safety, fairness in employment (EEOC), and environmental protection (EPA).

No person with an ordinary moral sense should oppose these measures in principle. There is room for great disagreement in how these principles should be implemented, but no one should oppose in principle the idea that no one deserves to starve in his old age. No one should oppose in principle the idea that every child should receive sufficient education to participate fully in a democratic society. No one should oppose in principle the idea that everyone should expect a safe workplace as a matter of course. No one should oppose in principle that everyone should expect that the products they buy, the air they breathe and the water they drink have been made safe to the best of our ability.

Likewise, because it is simply true — a fact about the world — Thucydides observation that "right, as the world goes, is only in question between equals in power," no one should oppose in principle that those who labor in any enterprise should have sufficient power to negotiate at the very least as equals the terms and conditions of their employment with the owners of that enterprise.

That these ideas are "socialist" is contentious. Socialist Norman Thomas wryly noted that, "Roosevelt did not carry out the Socialist platform, unless he carried it out on a stretcher." But it is worth observing that, after more than a century, laissez-faire capitalism did not appear even close to implementing any of Roosevelt's reforms.

I have seen in my lifetime a visceral hostility to even these modest and patently moral reforms, and a concerted effort to destroy them, using the worst kind of lying propaganda attributed to (projected on?) the worst demonization of communism. The goal of removing "government interference" in business has been directly about destroying these reforms. If the most fundamental security of simply not starving in old age does not come about because of laissez-faire capitalism, then it is not worth having and must be destroyed.

We must lay the credit or blame for this multi-generational effort at the feet of Ayn Rand and the 1957 publication of Atlas Shrugged. (I'll write more on Atlas Shrugged later.) Although her direct disciples are few, the themes of this book — absent, of course, the iron moral discipline of Rand's ideal capitalists — run through the conservative movement even to this day. More importantly, the popularity of her work in the general public have laid the groundwork for the conservatives' continued success.

Thomas Frank documents this generational effort in his recent book The Wrecking Crew. It is very important to understand that the Bush administration is not a fluke, it is not an aberration, it is the culmination of a decades-long conservative agenda.

It is also important to understand that the Democratic party is part of this agenda, whether by design or simple stupidity and cowardice. They are the Colmes to the Republican's Hannity: A dummy propped-up to preserve the illusion of an adversarial process; a foil to be "convinced" by the conservatives' "superior" arguments.

Conservatives have been bent for five decades on destroying the most modest reforms of Roosevelt and Johnson. They are winning, and they will continue to win until these reforms have been utterly destroyed. If they are correct, we will see an age of unequaled prosperity; but if they are incorrect, we will see an age of suffering that will rival the Dark Ages in its tyranny and oppression.

And they are indeed incorrect. Were they correct, the conservatives would not take as their source narrative Rand's ludicrously implausible and internally contradictory dystopia. Were they correct, they would not take as the center of their narrative the impossible concept of the truly free market, nor would they redefine "freedom" as "freedom for themselves" and no others. Were they correct, they would not have made a devil's bargain with religious authoritarians. Were they correct, they would not scapegoat the powerless — racial minorities, undocumented immigrants, homosexuals and atheists — and blatantly and explicitly support the enslavement and oppression of women, half the human race. Were they correct, they would permit, nay demand, that their supposedly "free" market had every possible resource available to it, and not exclude 90% of the human race from full participation.

They are not correct. They are opposed not only to the moderate and morally obvious reforms of Roosevelt and Johnson, but also to the notion of the consumer economy itself: Not just Wal-Mart but even high-end retailers are feeling the effects of the decreasing wealth of not just ordinary working Americans but also the managerial-professional class.

And the consumer economy is the last, best effort of capitalism to save itself from "collectivism". Buy off the middle and lower classes with not just trinkets but full grocery stores, and they will not object to the obscene consumption of the ultra-rich. The problem is that a full belly and a big screen TV convinces the working person that he has a right to those things. (Everyone constructs a moral narrative that justifies as his deserts what he has, and, for the ambitious, what he wants.)

The welfare class supports the working class. The working class supports the managerial-professional class, who supports the "petite bourgeoisie", the small-business owners. Destroy the bottom and you destroy the foundation of economic society, and everything collapses to the bottom, leaving only the ultra-wealthy (and only a fraction of them) as the sole arbiters of value. We will, inevitably, be reduced to a third-world economy: A handful of ultra-wealthy, those who serve them directly, and slaves worked to death to feed this handful and their minions.

This outcome is (barring only some worse disaster) inevitable. Five decades of concerted effort, with only token opposition, have gained an inexorable momentum. Worse yet, technology has given us (unlike Hitler) the means to implement a final solution. When all save a few hundred million have no value whatsoever to the handful of ultra-wealthy — who will become the sole arbiters of value — it will be only a failure of will that will prevent the extermination of the billions of the superfluous.

Barack Obama — even if he were elected — will not save us. Obama will simply clean up the most egregious inefficiencies of the Bush Administration, putting the wars in the Middle East on a more efficient footing. Obama will not implement any of the progressive reforms he mentions in his acceptance speech; he will make at best some token effort which will be quickly sacrificed to Republican opposition, in the interests again of cleaning up the more egregious problems he's inherited from Bush. And just as only Nixon could go to China and only Clinton could abolish welfare, only Obama can abolish legal abortion (he will do so, so he will say, in order to "save" contraception).

Mostly, though, Obama will act as the usual Democratic foil to the conservative agenda, to be "convinced" of the necessity for demolishing what is left of the New Deal and Great Society reforms. "If a liberal, progressive guy like Obama is convinced," so the narrative will go, "these reforms really must be fundamentally unsound."

What happens after our economy collapses, our environment is destroyed, and billions of people have died is anybody's guess. But that such a global catastrophe is inevitable seems almost certain.

Why the conservatives are winning

Art, commenting on Mike the Mad Biologist explains why the conservatives are winning the strategic war.

The right spent its time in the wilderness cultivating an entire self-supporting alternative media ecosystem from the ground up.

Read the whole comment.

I've been much put off by the "elect Obama/Clinton no matter how dumb they are, because McCain is batshit crazy!" idea that's floating around lately. It's true, as far as it goes, but aside from my conscientious objections, this idea reveals a lack of strategic thinking.

No good general predicates the success of his or her strategy on winning every battle. But that's precisely what the Democratic party has been doing: they have to win every election no matter what or the country is screwed. If they have to shift to the right to win this or that election, they do so, because if they lose on principle, they still lose.

The one time I showed up at a Drinking Liberally event, I was appalled. The dominant theme of the discussion was about how to win elections. When I tried to talk about substantive policies and progressive ideology, I was mocked as an unrealistic idealist.

The Republican strategy is very simple, and very powerful: When they win an election, move the government to the right. When they lose an election, prevent the government from moving to the left. Sure, they'd like to win every election, but they know they won't, and they have a plan in place for when they lose, and thus they can afford to lose on principle.

The Democratic "strategy" is precisely the opposite. When they win an election, they try (with diminishing success) to prevent the government from moving to the right. When they lose an election, they themselves move to the right to win the next one.

Closely allied with strategy is logistics. In a battle of values, ideology and people to propagandize that ideology are the resources a general must marshal to the front. Art describes the conservatives' logistical system. The left's ideological logistics used to be the academic humanities, but too many idiots have become so mired in bullshit postmodernist nihilism that they've become an ideological laughingstock.

The fundamental problem is that the left doesn't like ideology per se, and the left doesn't like private money. For good reasons: The last time we had a leftist ideology, we ended up with Communist totalitarianism. Private money, especially when concentrated, is a poor driver for social and economic equality. People with a lot of money tend to want to keep it, and they invent endless rationalizations why they should keep it.

But ideology and money are too effective to simply abandon. Ideology unites the True Believers, who are the driving force in any social change. Furthermore, most people have jobs to do, children to raise, lawns to mow — they're busy keeping Western Civilization afloat, thank you very much — and they simply do not have the time and energy to carefully and intellectually evaluate each position on its subtle and nuanced merits. "Just fucking tell me what you stand for!" they yell. The conservatives actually stand for something, and even though it's most people really think it's kind of odious, at least it's something. The progressives? Not so much. What little progressive ideology exists is all over the map, and 90% of it is useful only as a drug-free method of general anesthesia.

The failure of the Democratic party is so deep, so profound, that we must see its function as effectively part of the conservative movement. The Democratic party maintains the illusion that we have an adversarial political system, and they serve as whipping boys and scapegoats to take the blame for conservative practical failures.

Of course, that the conservatives are better at politics than progressives is not the worst problem. If it were, then we might end up with a harsher, more unforgiving country than I would like, but nu, life is tough. The worst problem is, of course, that the conservatives have lost all connection with objective reality, especially economic reality. Our actual economy is in tatters: We don't actually make anything any more. Even our intellectual and technological economy is in tatters: We are no longer actually teaching science, math and engineering to actual Americans. Our entire economy is based on suing each other and selling our homes to the Chinese for electric can openers. And that's it. When that runs out, we'll have nothing left. Our supposedly mighty army will be impotent: What good is an army when your opponents make the bullets? (Or grow the food and own the homes of those who make the bullets.)

It's far too late to change anything. All the institutions necessary to preserve an actual democracy — academia, the media, the opposition political parties, the economy, campaign finance, the judiciary, the rule of law — have already been corrupted and owned by the conservative movement. Electing Clinton or Obama to sit in the Oval Office and take the blame for the conservatives is not going to change anything. It's just as plausible that it'll make things worse as it is to stave off collapse. The Christianist military and militia, for example, might be more likely to actively rebel against a Democratic party government than a Republican party government.

Catastrophe and revolution

The political and economic system of the United States is doomed. Elect whom you like in November, Clinton, Obama, McCain, the large-scale structural elements forcing a collapse will stay in place. A catastrophic collapse of our society seems inevitable.

The United States is no longer a democracy. I mean this not in the quibbling "It's a republic" sense; I mean that the government is no longer responsive to the will of the people. If the United States were a democracy we would not have invaded Iraq in the first place. Even if we'd invaded in a moment of temporary insanity, we would have been been out by 2006, if not sooner. If the United States were a democracy, George W. Bush — the worst and more importantly the most unpopular President in the history of the nation — would have at the very least been forced to resign (as was Nixon) and at best impeached or even prosecuted for crimes against humanity.

To be even more pessimistic, there's no possible way in an actual democracy Bush would be president in the first place, having actually lost two "elections" that would have shamed Ferdinand Marcos.

Even with the massive propaganda campaign, even with the so-called "liberal" New York Times leading the charge, even with Colin Powell lying his ass off to the United Nations, the invasion of Iraq was still so massively unpopular, and whatever support existed was so thin, that any sensible politician in an actual democracy would have realized that the war would be political suicide. That Blair supported the war, and is now reviled in the UK, just emphasizes my point.

The United States no longer has a free-market economy. While Capitalist economies have usually employed markets with more distributed economic decision-making than communist governments, there is nothing inherent in Capitalism that entails a free market. The definition of Capitalism is that the owners of capital are privileged to restrict the market as they see fit; a truly free market would not privilege anyone but the people as a whole to restrict the markets.

The United States is no longer a civil libertarian society. The Patriot Act, the Military Commissions Act, FICA, the War on (some) Drugs (used by some people), the ridiculous joke that's been made of the Fourth and Ninth Amendments, the astronomical rate of imprisonment. Need I say more?

The United States no longer employs the rule of law. Bush has explicitly and clearly declared himself and his minions above the law, and the Congress, the Supreme Court and the "opposition" political party have utterly failed to punish him.

The United States no longer has freedom of the press. The press, specifically the commercial media, has become completely dominated by a tiny elite of billionaires. It has become an organ of partisan Republican propaganda differentiable from Pravda only by its sophistication and professionalism (and sometimes not even that).

The above are not just bad in themselves, they are fundamental error-correcting mechanisms. When you lose error-correcting mechanisms, errors accumulate until the only ineluctable error-correcting mechanism — reality — causes a catastrophic failure of the system. Even if we were to elect Obama or Clinton, even if they were completely well-intentioned, even if they had the power to kill with their minds, they could not reverse our path to catastrophic failure. Things will have to get much worse before we can even think about any major structural changes.

Catastrophic failure is bad, but humanity will survive it. We've survived catastrophic failure time and again: World Wars I and II, the Great Depression, the Panic of 1873, etc. ad nauseam.

What's more worrisome than the collapse itself is the aftermath. There's only one group ideally positioned to take power after a collapse: Christianist extremists. They've openly infiltrated the US military. Their civilian militias are well-organized, well-disciplined and extremely well-armed, and they enjoy the active tolerance of the Justice Department. They have a definite, elaborate and fanatical political agenda. They have a good 20-30% of the population firmly on their side, which was enough for Hitler after the collapse of the Weimar Republic.

If we're lucky, very lucky, "find a winning lottery ticket in the trash" lucky, some rich bastard like FDR will pull our nuts out of the fire at the 11th hour out of desperate self-preservation. But if FDR had faced a Communist party with the organization and armament of today's Christianists, we might well have ended up with Joe Steele instead.

Perhaps there is, however, some reason for hope.

As well-armed and organized as are the Christianists, their ideology is extremely loopy and insane; by comparison Nazism and Stalinist Communism are models of rational clarity. They're already extremely sectarian; they'll spend as much time and energy fighting each other as they will the rest of us. I don't think there's any alternative but to fight them, but they can be beaten.

[Update: I'm with Tim Kreider: I plan to be drunk off my ass when the shit hits the fan.]