Dec 30 2012

Fiscal Cliff as Grim Speed Bump Trigger by Annieli

(10 am. – promoted by ek hornbeck)

Van Jones said not so long ago:  “If we want to fix the economy, the first thing we got to do is repeal the Bush tax cuts and pull back our military expenditures to Clinton level expenditures.”   The first corrective action one takes does not have to be a vanguard one, but it is clear that President Obama's second term requires an understanding of the stakes for labor and capital, ones greater than those at the Clinton levels. Critical analyses might require interrogating the problem of how the base economy depends on the superstructure’s contractual complicity in coordinating industries that have regional impacts and cultural effects. In the case of the Fiscal Cliff(FC), a critical political economic analysis of the defense sector and its associated practices including procurement pork-barreling can give us some small insights on the fictive, yet dimensional nature of the capital and labor involved. The myth of the cliff metaphor functions as though lemmings were at risk. But as with everything "we have entered the house of language and the doors are closing behind us".

For those requiring a summary:

“The “fiscal cliff’, however, is an invented term applied by politicians to the date various temporary legislative changes to the country’s tax code and spending policy take effect.   Politicians began instituting temporary tax cuts with the intention of later transforming them into permanent law in the 1990s.   According to a Center on Budget and Policy Priorities report, this practice exploded during the George W. Bush administration and was accompanied by budget gimmickry to hide their affect on the federal deficit.  The Bush era tax cuts, known respectively as the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003, are at the center of the storm that is raging around the “fiscal cliff’.   The legislation, which was set to expire in 2010 but was extended to 2012, significantly reduced rates on income, estate and dividends and capital gains taxes and exemptions.  After the sunset of the Bush era tax cuts, estate and gift tax exemptions will end raising the tax rates on transferred estates over $1 million to 55%.   Long-term capital gains taxes will rise from its current rate of 15% to 20%. The tax bracket for the country’s wealthiest citizens will rise from the current 35% to 39.6%.  In other words, the tax code will largely return to the rates that were in place prior to the George W. Bush administration.”

The Myth of the Fiscal Cliff: Another False Apocalypse (h/t Jonathan Turley)

For our purposes here, the cliff is more like a speed bump because the funding for defense will continue with little effect because of the contractual aspects of procurement that occur in a spatial and temporal context.

For their part, some defense contractor executives are now making it a point to stress that sequestration, if a fiscal cliff deal isn’t reached by Jan. 1, would be less of a “guillotine” than a “speed bump.” That’s long been the view of military analysts. “The fiscal cliff metaphor just isn’t accurate,” says Todd Harrison, senior fellow in the Defense Budget Studies program at the Center for Strategic and Budgetary Assessments in Washington. “It’s more of a slope – but it is a slippery slope.” Moreover, sequestration does not apply to cases in which defense companies are working now on vehicles and weapons contracts that have already been obligated. “That’s an important point, because if you’re a defense contractor, whatever you’re working on now is something that has already been obligated, and that will continue until the money runs out,” Mr. Harrison says. “There won’t be any immediate impact on Jan. 2.”

   Christian Science Monitor

The Fiscal Cliff is largely such a speed bump in the ever-self-correcting however badly managed capitalist economy, given that it has all the sausage of policy problems derived from trying to constrain one form of the ideological state apparatus (the legislative branch budget power) with another more materially destructive institution like the Military Industrial Complex (MIC). Without rehearsing what others have contributed, I want to make a small point on the spatial analysis of the FC with respect to the defense industry if only to make a point concerning the regulation of the firearms industry and citizens. The subsequently mediated cultural effects that produce calls for citizen disarmament illustrate a false consciousness that show that political power (can) grow out of the barrel of a gun, real and digitally imagined because of a lack of awareness of armaments production, or its application abroad. Yet militarization whether domestic or international will continue unabated; an FC agreement will be made, compromises will be achieved, and the continuing path of exploitation and stagnant growth will run through the first quarter(s) of the Second term. Recent domestic historical spectacles of violence have obscured the necessary path to global demilitarization which cannot be called at any moment world peace.  Another diarist came to this spatial contradiction recently.

But of course in a country which cares so little for however much collateral damage we inflict on innocent civilians with drone strikes, so long as none of our boys and girls get hurt, it's hard to expect that emotional pain visited on Afghani non-combatants counts for much in the American scheme of things. We have a national melt down over twenty dead school children in Connecticut. Twenty dead Pakistani school children lost to a drone strike not so much. It's who we are. It's about us. Always about us. Little brown people on the other side of the world are beyond our awareness. I don't have to like it, but that's how it is.

We value things that seem closer to us but as its says in our cars’ right hand mirrors: “objects closer may appear larger than they are”. As it is with tragedy, the proportion of its causes are disproportionate to its scale. Self-defense and self-determination must be bravely seen in their globalized context with a constant goal of nonviolence and choose the appropriate targets for regulation whether individual products or entire industries, tempering social costs with social justice.  Please follow me below the orange squiggle to view exceptionally grim(m) triggers for more moral hazards.

This diary considered the GOP's fiscal cliff actions as moving pessimistically:

Only 50 percent of Americans think it’s likely a deal will be struck, while 48 percent think it’s unlikely, according to a Gallup Poll conducted Dec. 21-22. The same poll conducted Dec. 15-16 found 57 percent of Americans were confident in the abilities of House Speaker John Boehner and President Barack Obama to come to an agreement, while 40 percent believed a deal was unlikely. […]

While success polls as less likely, its success or failure is not one of binary choice, rather it will be that slippery slope of partisan intentions and political agendas. Slope rather than cliff, gravity is not the final arbiter, rather it will be the “unresting antagonisms of their surroundings”. The space of these struggles is uneven and whether it is the areal perception of threat of gun violence or the support of military industries the meme is more like the fictive space of Michael Moore’s in Bowling at Columbine, comparing the political violence of ballistic missile production as proximal to school shootings in Colorado. It appears as Marx and Engels argued in The German Ideology,

“The fact is, therefore, that definite individuals who are productively active in a definite way enter into those definite social and political relations. Empirical observation must in each separate instance bring out empirically, and without any mystification and speculation, the connection of the social and political structure with production.” (p.46, my emphasis).

But history, this "best of all Marxists," has taught us differently. It has taught us that "administering of things," despite Engels' expectations, may turn into unlimited "administering of people," and thus not only lead to the emancipation of the state from the economy but even to the subjection of the economy to the state. Once subjected to the state, the economy secures the continued existence of this form of government. The fact that such a result flows from a unique situation primarily brought about by war does not exclude a Marxist analysis, but it alters somewhat our rather simplified and schematic conception of the correlation between economy and state and between economy and politics which developed in a completely different period. The emergence of the state as an independent power greatly complicates the economic characterization of a society in which politics (i.e. the state) plays a determining and decisive role. Rudolf Hilferding State Capitalism or Totalitarian State Economy The Modern Review, June 1947, pp. 266-71

With the possibility of 5000 types of regulation, the emergence of a regulatory state in the post-progressive era requires more dimensional forms of analysis as represented in recent economic geography. This spatialized state manifests itself throughout US industrial history, and is as uneven as the analysis of firearms production in small production units in 19th Century Britain. (Hounshell 1984) In 2009, David Harvey wrote on this in the context of the stimulus:

Much is to be gained by viewing the contemporary crisis as a surface eruption generated out of deep tectonic shifts in the spatio-temporal disposition of capitalist development. The tectonic plates are now accelerating their motion and the likelihood of more frequent and more violent crises of the sort that have been occurring since 1980 or so will almost certainly increase. The manner, form, spatiality and time of these surface disruptions are almost impossible to predict, but that they will occur with greater frequency and depth is almost certain. The events of 2008 have therefore to be situated in the context of a deeper pattern. Since these stresses are internal to the capitalist dynamic (which does not preclude some seemingly external disruptive event like a catastrophic pandemic also occurring), then what better argument could there be, as Marx once put it, “for capitalism to be gone and to make way for some alternative and more rational mode of production.” I begin with this conclusion since I still find it vital to emphasize, if not dramatize, as I have sought to do over and over again in my writings over the years, that failure to understand the geographical dynamics of capitalism or to treat the geographical dimension as in some sense merely contingent or epiphenomenal, is to both lose the plot on how to understand capitalist uneven geographical development and to miss out on possibilities for constructing radical alternatives. But this poses an acute difficulty for analysis since we are constantly faced with trying to distill universal principles regarding the role of the production of spaces, places and environments in capitalism’s dynamics, out of a sea of often volatile geographical particularities.

Geographic particularities like the location of personally owned firearms mapped above for one New York county lives in contradiction often to the actual location of their uses or their exchanges. The concentration of firearms does not match the dispersion of ownership if 20% of the national population owns 65% of all guns. Similarly the location of production of firearms or the MIC  might have regulatory policies much different than the locations of distribution and consumption.

Military expenditure is the largest category of discretionary spending in the US federal budget. As such, its spatial patterns are also among the most concentrated. An analysis of recent defense spending data indicates that ten to fifteen states receive between them at least 70% of military contracts, and higher proportions of high-technology and research-related contracts. Examination of subcontracting data reveals that little wider dispersion of defense spending occurs to states outside the core areas in the West, on the East Coast, and in a few interior locations. (Malecki 1984)

We found that for each direct employee of the aerospace and defense industry, there are between 4.67 and 0.40 additional employees which are indirectly employed, with variability principally due to the employee’s geographic location. The reason for the range of employment multipliers is that each state has its own characteristics of wages and job classifications present in its geographies. (The Aerospace and Defense Industry in the U.S. — A financial and economic impact study p.20 )

This disproportionality of defense production among states and the subsequent effects on labor and capital signals the broader problems of distributing that production and circulating capital. This also shows what Harvey meant about the “principles regarding the role of the production of spaces, places and environments in capitalism’s dynamics, out of a sea of often volatile geographical particularities”.   The cliff we face appears more sheer than for the MIC, after WWII the national, regional, local manifestations of the state created a spatial disintegration that does not allow reconciling the consciousness of the contradiction of MIC production with the perceptions of gun violence. Interest-group lobbying has dominated the ideological terrain and pundit-driven fear-mongering pervades class divisions. The social divisions are signified by the differences between the profiles of industries and their labor forces due to pork-barreling and outsourcing of production and assembly.

Especially for industries that comprise important segments of the trade specializations of regions, and those undergoing rapid change, local occupational structures may diverge from profiles derived from industry-by-occupational profiles at a larger geographical scale. These are precisely the sectors that are of central importance to economic development practice. Furthermore, industries on the innovative wave, such as medical instruments, electronics and biotechnology, are often those most sought by states and localities that do not yet host them. Major miscalculations could result from estimating future occupational composition of regional employers on the basis of these industries’ profiles nationally. Regional Occupational and Industrial Structure: Does the One Imply the Other?  (Barbour and Markusen 2006)

I have found myself in this critical discourse much like H.G. Wells in his 1934 reflection on his attempts to thread the gap between pacificism and militarism. In Experiment in Autobiography. Discoveries and Conclusions of a Very Ordinary Brain (Since 1866), Wells noted how relationships suffered in trying to chart a path to self-determination between militarism and pacificism:

Let me return first to the disillusionment about the beneficence of our war-making (1915-16-17) that followed my first attempt in 1914 to find a justifying purpose in "our" war. I did not become "anti-war." I found the simple solution of the conscientious objectors and war resisters generally, too simple for me altogether. My brain was quite prepared for conflict on behalf of the law and order of the world-state. I believe that is necessary to this day. Peace will have to be kept—forcibly. For ages. The distinction people draw between moral and physical force is flimsy and unsound. Life is conflict and the only way to universal peace is through the defeat and obliteration of every minor organization of force. Carrying weapons individually or in crowds, calls for vigorous suppression on the part of the community. The anti-war people made me the more impatient because of the rightness of much of their criticism of the prevailing war motives. I was perhaps afraid, if I yielded to them, of being carried back too far towards the futility of a merely negative attitude. What they said was so true and what they did was so merely sabotage, I lost my temper with them (Chapter 9 §5 p.579 War Experiences of an Outsider)

The real power in the discourse on militarism as an aspect of the FC will be located in the networking of information and its institutional application of political power articulated by paramilitary police organizations rather than individual firearms conflicts. Scale trumps spectacle. If power indeed comes from the barrel of a gun, the political communication and legal environment might not protect civil rights from their institutional abuse. The history of Southern Black armed self defense groups reveals that very dear necessity. National, regional, state, and local security will be further fragmented even as it becomes further interconnected.

For many defense firms, the new market realities will require innovation, risk taking and bold moves to continue growth in revenues and profitability. Several areas for growth are expected to be in critical emerging and growing product segments, including – cyber security, intelligence, surveillance and reconnaissance, defense electronics, precision targeting and response, remotely controlled platforms, directed energy, data fusion and energy security. Furthermore, given the slowdown in U.S. defense spending, contractors are considering how to replace revenues with growth in adjacent markets and through gap filling, game changing and/or scale building acquisitions. Growth in foreign military sales may also contribute to some revenue growth, but this is yet to be determined.

Where we are headed is toward a cliff that is less fiscal than it is false, since it signals the kinds of crisis or shock doctrines discussed by others. Our consciousness, as it becomes more commodified, also becomes one of risk, real or imagined. This is a kind of principal-agent paradigm that is based on "one party who possesses information affecting the welfare of both (informed party) and one who does not have this information (uninformed party). The information is either about what the informed party does (hidden action) or about what her characteristics are (hidden information)." This can be combined with the analysis of a grim trigger strategy, where one "initially cooperate(s) with the other players and then proceed(s) to defect for eternity if the other player fails to cooperate just once." The GOP's strategy in the Fiscal Cliff may be modeled this way, especially in insisting that for example the CRS reports cannot be trusted, implying an ultimately blind approach to legislation and budgeting.  The black(sic) nature of defense budgets whether hidden in plain sight or hidden completely has this fragmented information environment like the domestic and global market for small arms which is as connected to our current gun violence crisis as the original AR-15 was connected to materials Eugene Stoner derived from the aerospace industry. Its subsequent adoption in the Vietnam War was for maximum mass production and firing capability where the aluminum/plastic M-16 and its 30 round magazine with 5.56mm rounds was lighter than the standard milled steel M-14 and its 15 round magazine with the larger and heavier 7.62mm rounds and affects even the production of its adversary as the pressed steel AK-47 and its original 7.62 round is reduced to 5.45mm in newer versions. It is not a coincidence that the technology of urban pacification used by our military in Southwestern Asia has an interoperable relationship with police militarization.  Our current national spate of gun violence is predicated on contradictory direct and indirect actions performed in unevenly fragmented regional spaces, where the hidden illnesses of children spawn the murder of others in quasi-public learning environments. This is not to minimize the horror and sadness that comes from loss of life and its ideological escalation in news coverage. The mass media treatment of these events reveals a falsity of collective mediated consciousness situated in a complex cultural and economic space that does not connect the production of civilian assault weapons with the MIC producing them for militaristic agents, both foreign and domestic. A putative pacifism that would condemn individual firearms possession yet condone more militarized police services that support a growing surveillance state is a contradiction that must be subjected to the material critique it deserves. An Occupy NRA movement that focuses on firearms manufacturers and their diverse clienteles would help mobilize that critique.  We seem to have survived the Great Recession's crises as reflected on 6 November and in the Second Obama term need to more precisely target an industrial and security policy in the fiscal cliff negotiations, however flawed. The path, whether over the cliff or down the slope should mirror the collective nature of the American Experiment in Democracy rather than a fetishized and solipsistic Exceptionalism that projects a neocon imperial hegemony in real and virtual militarized spaces. A favored video game mentioned in the most recent tragedy is symptomatic of that decision making process not unlike the "intellectual resistance" of the Grimm folktale where it shapes individual action as cliff-like jumps into potentially fatal situations and in FPS games using small arms. Regardless of the outcome these coming weeks, at all levels of consciousness the Fiscal Cliff as quasi-crisis represents a Grimm trigger strategy that should be studied with alternative and progressive forms of critical social analysis.