Tag: Economy

The alleged recovery from the recession that began in 2008 has done wonders for the wealthiest of the world.

The Rich Get Richer Through the Recovery

By Annie Lowry, The New York Times

The top 10 percent of earners took more than half of the country’s total income in 2012, the highest level recorded since the government began collecting the relevant data a century ago, according to an updated study by the prominent economists Emmanuel Saez and Thomas Piketty.

The top 1 percent took more than one-fifth of the income earned by Americans, one of the highest levels on record since 1913, when the government instituted an income tax.

The figures underscore that even after the recession the country remains in a new Gilded Age, with income as concentrated as it was in the years that preceded the Depression of the 1930s, if not more so.

High stock prices, rising home values and surging corporate profits have buoyed the recovery-era incomes of the most affluent Americans, with the incomes of the rest still weighed down by high unemployment and stagnant wages for many blue- and white-collar workers. [..]

More generally, richer households have disproportionately benefited from the boom in the stock market during the recovery, with the Dow Jones industrial average more than doubling in value since it bottomed out early in 2009. About half of households hold stock, directly or through vehicles like pension accounts. But the richest 10 percent of households own about 90 percent of the stock, expanding both their net worth and their incomes when they cash out or receive dividends.

The economy remains depressed for most wage-earning families. With sustained, relatively high rates of unemployment, businesses are under no pressure to raise their employees’ incomes because both workers and employers know that many people without jobs would be willing to work for less. The share of Americans working or looking for work is at its lowest in 35 years.

Three years ago during the height of the Occupy Wall Street movement, the Congressional Budget Office issued a report based on information from the IRS and US Census Bureau that over the last forty years the top 1% has nearly quadrupled:

– The top 1 percent made $165,000 or more in 1979; that jumped to $347,000 or more in 2007, the study said.  [..]

– The top 20 percent of the population earned 53 percent of after-tax income in 2007, as opposed to 43 percent in 1979.

– The top 1 percent reaped a 17 percent share of all income, up from 8 percent in 1979.

– The bottom 20 percent reaped just 5 percent of after-tax income, versus 7 percent in 1979.

This is exacerbated by the fact that hourly wages have stagnated while the biggest banks are even bigger than they were before the collapse thanks to policies of the government and the Federal Reserve.

The wealth gap is not an isolated problem, according to a report by the NGO, Oxfam, it’s global with just 85 people possessing owning half the world’s wealth

Almost half of the world’s wealth is now owned by just one percent of the population, and seven out of ten people live in countries where economic inequality has increased in the last 30 years. The World Economic Forum has identified economic inequality as a major risk to human progress, impacting social stability within countries and threatening security on a global scale.

This massive concentration of economic resources in the hands of fewer people presents a real threat to inclusive political and economic systems, and compounds other inequalities – such as those between women and men. Left unchecked, political institutions are undermined and governments overwhelmingly serve the interests of economic elites – to the detriment of ordinary people.

Eighty of the those billionaires are meeting this week in Davos, Switzerland for the World Economic Forum, where the wealth disparity has finally become a concern:

As billionaires bet on accelerating growth and rising asset prices, income inequality is emerging as a key theme for this week’s annual meeting. A study released last week by the forum identified the income gap as the most probable menace to the global economy during the next decade. Wealth disparity — driven by globalization and the recent financial crisis — threatens to breed poverty and social disorder, it said.

Next Tuesday, President Barack Obama will give his State of the Union Address where he will outline the ideas he has for closing this gap that has gotten bigger since he was elected. Perhaps, as Huffungton Post’s Howard Fineman suggests, that the president find governing role models other than Ronald Reagan whose policies have brought the US economy into its New Gilded Age.

The number of jobs created in the month of December fell far short of the expected 200,000 and unemployment (U-3) fell to 6.7% the lowest it has been since November 2008. I think the word “disappointing” is an understatement:

Stock futures fell after the report was released.

The slowdown in hiring could cause the Federal Reserve to rethink its plans to slow its stimulus efforts. The Fed decided last month to cut back on its monthly bond purchases by $10 billion. It could delay further reductions until it sees evidence that December’s weak numbers were temporary.

Cold weather may have slowed hiring. Construction firms cut 16,000 jobs, the biggest drop in 20 months.

Still, December’s hiring is far below the average gain of 214,000 jobs a month in the preceding four months. But monthly gains averaged 182,000 last year, nearly matching the previous two years.

The proportion of people working or looking for work fell to 62.8 percent, matching a nearly 36-year low.

As Huffington Post‘s Mark Gongloff writes “unemployment is falling for al the wrong reasons”

One reason for the big drop in unemployment in December was that many, many people dropped out of the labor force — 347,000, to be exact. They stopped looking for work, which made them no longer “unemployed” in the eyes of the Bureau of Labor Statistics.

Click on image to enlarge.

Some of this is due to the fact that Baby Boomers retiring — but only some. Most of it has to do with the fact that the economy is still too weak to create enough jobs to draw people into the market. This is most clearly evident in the fact that younger people are leaving the labor force, too — or never even entering it — because they can’t find jobs.

Meanwhile, Charles Pierce reports that the Republicans keep finding new ways for “screwing the unemployed”

Rob Portman of Ohio, who might have been the 2012 Republican vice-presidential nominee had the Romney people not been terrified that, if they put Romney and Portman on the same stage together, the earth would spin into a dark region of the galaxy made up only of the primeval tedium whence the cosmos came, and we’d all come out named Tagg or something. Now, though, he’s back in the Senate being “reasonable,” which means that Portman felt free to allow an extension of unemployment benefits to come to a vote in the Senate, so Portman then could devise a way to sabotage those benefits because that is reasonable and bipartisan and centrist, and nobody will yell at him on the radio too loudly back in Columbus or Elyria.

   It depends, he said, on whether lawmakers find a way to pay for the $6.4 billion cost. Wednesday, Portman said he has just such a way. He said that people drawing two other kinds of government aid — Social Security disability insurance payments (SSDI) and trade adjustment assistance (TAA) — can simultaneously get unemployment benefits, which he thinks is wrong.It depends, he said, on whether lawmakers find a way to pay for the $6.4 billion cost. Wednesday, Portman said he has just such a way. He said that people drawing two other kinds of government aid — Social Security disability insurance payments (SSDI) and trade adjustment assistance (TAA) — can simultaneously get unemployment benefits, which he thinks is wrong.

The “compromise” on offer is to help the unemployed while stoking the usua; anger at a vague claque of disabled freeloaders elsewhere. Where ever did Portman get the idea that the country’s economy is beset by double-dipping cripples?

The Labor Department reported Friday that in December, the average unemployed person had been out of work for more than 37 weeks.

Meanwhile, “Christiegate.”

Wall Street had a boomer of a year, everyone else not so much.

Stock Market Has Great Year, You… Not So Much

By Mark Gongloff, Huffington Post

This has been the best year for the U.S. stock market in at least 16 years. But that great news is meaningless for many Americans. [..]

But only about half of Americans own stocks, including those in retirement accounts. Meanwhile, corporate profits are soaring largely because companies have been squeezing costs — especially labor costs. In the chart below, tracking the change in average hourly wages for private-sector workers against corporate profits and stock prices since the stock market bottomed in March 2009, you’ll notice one line is badly lagging.

Click on image to enlargew

You guessed it: The lagging line is your sad hourly earnings. They have barely budged since the market bottomed in 2009, while the Dow has skyrocketed 153 percent. Between November 2012 and November 2013, the latest data available, hourly wages for nonsupervisory workers rose just 2.1 percent, just barely ahead of inflation.

Gongloff concludes that Wall Streeters are “bullish on 2014,” others not so much. Our friend David Cay Johnston looks at tech stocks, like FaceBook and Twitter, that essentially have no profits, yet, through speculators and the Federal Reserve policy of nearly zero interest rates, these stock have greatly exaggerated value.

The coming stock market collapse

By David Cay Johnston, Al Jazeera America

Tech stocks have returned to bubble levels, thanks to PR, weak financial journalism and cheap credit

Markets can benefit from speculators, who take risks that prudent people and institutions should avoid, but speculators should represent the edges, not the core of the market.

It’s bad enough that the financial press allows the inflated commentary of tech companies to go unchallenged. But why in the world should Americans tolerate hedge funds and other speculators being subsidized with cheap and easy credit, thanks to the Federal Reserve’s policy of near-zero interest rates?

Only speculators would buy companies with no profits. And only subsidized speculators would bid up prices on companies with a PR in three digits, like Twitter.

Back in 1995, Alan Greenspan, then chairman of the Federal Reserve, asked a rhetorical question about stock prices, “How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions, as they have in Japan over the past decade?”

We now suffer through a prolonged period with high unemployment, flat to falling wages for most workers and unrealized potential for economic growth. But the speculators are making out like bandits, thanks to government suppression of interest rates, allowing massive borrowing by offshore hedge funds, and to lax rules for both accounting and trading.

Given the history of stock markets since 1995 and today’s blinking red indicators, no one can rationally claim they were not warned when the next collapse comes, as surely it will.

Click on image to enlarge.

So what will happen to the market when the Fed starts to raise interest rates? 2014 may not be the “boom” that Wall Street expects.

The Senate will pass the budget bill that was approved by the House last week. It passes the hurdle of cloture with a “bipartisan” vote of 67 – 33. The bill leaves a lump of coal in the stockings of 1.5 million Americans whose unemployment benefits expire the end of December and future career servicemen and women whose cost of living increases to their pensions will be cut. But the Pentagon will get their due and so will the 1%.

Ryan-Murray Budget Deal Passes Senate Hurdle

By DSWright, FDL News Desk

The truly horrendous Ryan-Murray budget has passed the Senate clearing the way to fully pass Congress this week. The deal restores war spending to astronomical levels while cutting federal pensions and raising airline fees. In other words, cash for defense contractors and groin kicks for the middle class. [..]

Why any Democrat would vote for such an awful reactionary budget is beyond comprehension. According to Nancy Pelosi Democrats had to “embrace the suck.” Otherwise things might not suck? [..]

We truly have the best government money can buy. The naked corruption on display in dumping oceans of cash into the Pentagon patronage den while attacking worker pensions and leaving the unemployed to rot is proof positive that we live in a deranged oligarchy where money is everything and the people are nothing.

A bipartisan budget deal to avert another government shutdown comes before the Senate this week. The vast majority of House members from both parties approved the two-year budget agreement last week in a 332-to-94 vote. It is being hailed as a breakthrough compromise for Democrats and Republicans. The bill eases across-the-board spending cuts, replacing them with new airline fees and cuts to federal pensions. In a concession by Democrats, it does not extend unemployment benefits for 1.3 million people, which are set to expire this month. To discuss the deal, we are joined by David Cay Johnston, an investigative reporter who won a Pulitzer Prize while at The New York Times. He is currently a columnist for Tax Analysts and Al Jazeera, as well as a contributing editor at Newsweek.

Once again the vast majority are Scrooged.

A two year budget deal was reached yesterday with congressional leaders announcing the deal that would to replace $63 billion in sequester cuts, a very small part of the $180 billion in cuts that will occur over the next two years. The deal will restore defense cuts by funding from a tax on airline travel and cuts to federal pensions. The budget does not include extension of unemployment funds to the millions of workers who are about to lose their benefits the end of December. There will be no changes to Medicare or Social Security but none of the tax loop holes were closed.

As Ezra Klein puts it:

Whether this deal can be a model for future deals is an open question. The core principle of this deal is that Democrats didn’t have to touch entitlements and Republicans didn’t have to touch taxes. But a lot of the policies that made that possible got used up in this deal. It’s not clear that another deal like this would work in 2016.

DSWright at FDL News Desk notes:

The Republicans got everything they wanted. They get more cuts while none of their friends in the defense industry get hurt – actually they even got to do some damage to the federal pension system. All that while avoiding another shutdown that killed their poll numbers before the 2014 elections. Christmas came early for the GOP.

The Democratic Party, on the other hand, sold out its own base to help Republicans maintain power. Why? Who knows? The only thing that is clear is this is an awful deal for majority of Americans.

Once again, the majority of Americans get screwed by their elected representatives.  

Fast-food workers are walking off the job in about 100 cities today in what organizers call their largest action to date. Today’s strikes and protests continue a campaign that began last year to call for a living wage of $15 an hour and the right to form a union without retaliation. Early this morning, Democracy Now!’s Amy Goodman and Hany Massoud headed to Times Square in New York City where a group of McDonald’s workers were joined by a crowd of hundreds of supporters to kick off their strike. We hear voices from the protest and speak to Camille Rivera of United NY, part of the newly formed New Day New York Coalition, which has organized this week of action to fight income inequality and build economic fairness.

US fast-food workers strike over low wages in nationwide protests

By Adam Gabatt, The Guardian

Thousands due to strike across 100 cities through the day in a signal of the growing clamour for action on income equality

Thousands of fast food and retail workers went on strike across the US on Thursday in a signal of the growing clamour for action on income equality.

In Chicago, hundreds of protesters gathered outside a McDonalds at 6.15am. As a large “Christmas Grinch” ambled about in freezing temperatures, demonstrators chanted for the minimum wage to be increased to $15 per hour.

It was the first of nine strikes in Chicago, with employees at McDonalds, Wendy’s, Walgreens, Macy’s and Sears also due to walk off shift. Low wage workers were due to strike across 100 cities through the day, including Boston, Detroit, New York City, Oakland, Los Angeles and St Louis.

“Poverty Wages in the Land of Plenty”

By Amy Goodman, Democracy Now!

The holiday season is upon us. Sadly, the big retailers are Scrooges when it comes to paying their staffs. Undergirding the sale prices is an army of workers earning the minimum wage or a fraction above it, living check to check on their meager pay and benefits. The dark secret that the retail giants like Wal-Mart don’t want you to know is that many of these workers subsist below the poverty line, and rely on programs like food stamps and Medicaid just to get by.  This holiday season, though, low-wage workers from Wal-Mart to fast-food restaurants are standing up and fighting back.

“Wal-Mart was put in an uncomfortable spotlight on what should be the happiest day of the year for the retailer,” Josh Eidelson told me, reporting on the coordinated Black Friday protests. “These were the largest protests we’ve seen against Wal-Mart … you had 1,500 stores involved; you had over a hundred people arrested.” Wal-Mart is the world’s largest retailer, with 2.2 million employees, 1.3 million of whom are in the U.S. It reported close to $120 billion in gross profit for 2012. Just six members of the Walton family, whose patriarch, Sam Walton, founded the retail giant, have amassed an estimated combined fortune of between $115 billion-$144 billion. These six individuals have more wealth than the combined financial assets of the poorest 40 percent of the U.S. population.

Shopping on Black Friday takes consumer confidence, consumer courage, and a subscription to Sky Mall magazine.

Gloomy Numbers for Holiday Shopping’s Big Weekend

by Elizabeth A. Harris, The New York Times

With the economy bumping along at a lackluster pace, and this year’s shorter-than-usual window between Thanksgiving and Christmas, sales and promotions began weeks before Thanksgiving Day, making this holiday shopping season more diffuse than ever. That left Black Friday weekend itself, the season’s customary kickoff, looking a bit gloomy.

Over the course of the weekend, consumers spent about $1.7 billion less on holiday shopping than they did the year before, according to the National Retail Federation, a retail trade organization.  [..]

More than 141 million people shopped online or in stores between Thursday and Sunday, according to a survey released Sunday afternoon by the retail federation, an increase of about 1 percent over last year. And the average amount each consumer spent, or planned to spend by the end of Sunday, went down, dropping to $407.02 from $423.55. Total spending for the weekend this year was expected to be $57.4 billion, a decrease of nearly 3 percent from last year’s $59.1 billion. [..]

Many retailers have been warning of a muted holiday shopping season. Walmart and Target both trimmed their yearly forecasts recently, citing economic factors like slow wage growth, unemployment and sliding consumer confidence. Executives at Best Buy cautioned that intense price competition on some items during the holidays was likely to affect their bottom line, despite its healthier performance recently.

Just as it does every month one week after it announces its estimates of unemployment and related statistics, last Friday the Bureau of Labor Statistics reported its evaluation of the employment situation in the individual states and regions. As has been the case for much of the past four years, there is good news and bad in the numbers.

As Niraj Choksi at the Washington Post points out, 16 states now have unemployment rates lower than they have been in four years:

  In all but two, October unemployment was at its lowest level since late 2008 or the early months of 2009. In Minnesota, unemployment hasn’t been this low since January 2008. And it’s been more than a decade since North Dakota saw an unemployment rate of 2.7 percent as it did in October. (The last time was August 2001.) In all, unemployment dropped from September to last month in 39 states. And only three states-Arkansas, Oklahoma and Ohio-saw nearly two-year highs.

  But the situation isn’t as rosy as those statistics suggest. The jobs recovery still pales in comparison to the recoveries following the 1981, 1990 and 2001 recessions, according to data from Doug Hall, director of the Economic Analysis and Research Network at the Economic Policy Institute, a think tank focused on the needs of low- and middle-income workers.

In fact, 70 months after the Great Recession began in December 2007, in only nine states is the official unemployment rate now below the five percent pre-recession average. And that only tells part of the story.

Just how slow the growth in jobs has been nationwide is reflected in the fact that in only one state-North Dakota-has job growth outpaced population growth. That is a factor of the oil production boom in the state’s Bakken formation. For every other state, however- as we’ve reported for years-the drop in the unemployment rate is mostly due to Americans leaving the work force. As of October, the labor-force participation rate was 62.8 percent, its lowest level since March 1978.  

A portion of that is demographic. The first wave of post-World War II baby boomers is retiring, although the percentage of people over 65 who have continued working-out of desire or necessity-has grown significantly since 2008. EPI estimates that about one-third of drop in the civilian work force is a consequence of such retirements. Meanwhile, labor-force participation among adults 16-24 is continuing a long time downward trend and is now nearly nine percent below its 1987 peak of 79.1 percent. But the key statistic, the most worrisome one, is that job participation of people in their prime working years-25-54 years old-remains down from its 2007 peak of 80.3 percent at 75.8 percent.

Despite the millions of private-sector jobs created since the recession was officially declared over in the summer of 2009, there continues to be a substantial jobs deficit and that has distorted the unemployment rate. Excluding retirees, EPI calculates that if those who have dropped out of the labor force or never entered it because of the weak economy had chosen to stay in, the official unemployment rate right now would be 10.8 percent, not 7.3 percent.

What these numbers point to, have pointed to for years, is the need for what many economists and activists have long sought: a multi-faceted full employment program.

Four years ago next month, President Obama held a jobs summit that was billed as a think session to kick-start employment growth. Unfortunately, partly because of the summit’s agenda, which failed to focus on the big picture, and partly because even the modest proposals that emerged from it were hamstrung by naysayers in Congress, the improvements that could have been made were not. Which means the economic pain of millions of Americans was not alleviated even though the policy tools were available to do so.

And they remain so. Heading the pack are the setting forth an industrial policy like those every other developed nation and some emerging economies already have and investing in rebuilding and innovating America’s crumbling infrastructure. But few of our elected representatives have come close to making such policies a priority or even mentioning them at all. What will it take to get them to show leadership in this realm?

All things appear and disappear because of the concurrence of causes and conditions. Nothing ever exists entirely alone; everything is in relation to everything else. -The Buddha

Marx: “constant revolutionizing of production uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all precious ones. all fixed, fast frozen relations, with their train of ancient prejudices and opinions are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses, his real conditions of life, and his relations with his kind.”

Unlike the Marshall Berman book, the reality of human conflict today is not so much about modernism as it is modernizing in the pre-industrial context, the civilizing and evolving, uneven yet parallel, paths from primitive, pre-modern communism through feudal modes of production, many of which still operate today whether the American Taliban or their calabash cousins in South Central Asia. The Koch Brothers, as corporate despots, are no different in their ideological commitments to devoting their wealth to an Anti-Communist Christianity that memorializes a martyr like John Birch and promotes inequality and suffering from uneven economic development. It is not a stretch to compare sacralized warfare and sectarian violence where today’s Oath Keepers see themselves as displaced Zen-samurai or Ronin of the Tokugawa Era. For example the original film The 47 Ronin directed by Kenji Mizoguchi is released near to the date of the Pearl Harbor attack. and the 1998 film of the same name by John Frankenheimer with script by David Mamet refers directly to the same historical event. ” The popularity of the tale grew during the Meiji era of Japanese history, in which Japan underwent modernization, and the legend became subsumed within discourses of national heritage and identity.”

The connection or family resemblance of feudal despotism and a repressive political state apparatus that attempts to control reproductive rights or democratic representation is now mobilized by ideology and ideological institutions such as Religions, Governments, and Mass Media and are mobilized much like Pat Buchanan’s meme of a Culture War. Its bastardization into a variety of discourses about race, class, and gender occupy much of the time and space of DK. As a matter of making the analysis of contemporary events, especially those exhibiting false consciousness like acts of racism or other violence clearer, some variants of Marxist methodology can be useful beyond some inerrant textual applications of Marxological theories. Excuse the lapse into the technical but the recent histories of human conflict as well as conflict among humans and nature require methods that can help make even the simplest of practices more coherent under the “shock doctrine” of crisis capitalism. There is a fluid boundary between culture war and actual war much as there is between abstract and concrete violence.

Althusser explains that the SA (State Apparatus) functions predominantly by violence or repression and only secondarily by ideology. Similarly the ISAs (Ideological State Apparatuses) function predominantly by ideology but can include punishment or repression secondarily.

This diary begins with a consideration of a recent book on Buddhist Warfare, a topic which has interested others as representative of the apparent contradiction of perhaps more Western stereotypes about the peaceful resistance to authoritarianism by some Buddhisms (Tibet) and the hegemonic behavior of other Buddhist majority regimes (Myanmar/Burma) where punishment or repression seems anomolous to a population significantly Buddhist. There is no space here to discuss the complex sectarian struggles of global religions and the focus here is on the material justification of cultural violence in the context of this recent book edited by Jerryson and Juergensmeyer Buddhist Warfare OUP 2010. The ideology of any religion and its worldly sectarian practices can be considered as some Marxists did in the last century as Ideological State Apparatuses (ISA) in the case of the ambitions of early to mid 20th Century Japanese imperialism, Buddhism was manipulated to become an ISA in terms of forging a national will and an industrialized state to sacrifice for humans claiming the status of feudal deity-monarchs. In the cases of contemporary Thailand and Myanmar among others, the identity of Buddhism and a ruling class creates a complex set of contradiction for both Buddhist resistance movements and military-political elites no different structurally than many other regimes Marx described as an Asiatic mode of production, (AMP), and that Oriental Despotism reproduces itself structurally in many contemporary Asian corporatized ruling class economies that have many different oligarchic names such as Chaebol in South Korea, family-controlled corporate conglomerates. In Japan before World War II, large holding companies formed wealth groups, or zaibatsu, which dominated most industry. The zaibatsu were dissolved after the war, but keiretsu-large, modern industrial enterprise groupings-emerged. And the tensions between the imperatives for military and economic self-defense as well as the need for corporatist, oligarghic, yet familial expansion create more challenges for the many corresponding Buddhisms.

MSDF Hyuga, a contemporary Japanese aircraft carrier classified as a destroyer:

What is important for this brief narrative is the point of view reconciling the complexity of many Buddhisms within the context of such societies, the expansion of rationalized violence against a populace and the rationalizing discourse of remote killing. This is where the army does the killing so one’s own responsibility is intact. Drone warfare can represent the instrumental separation and distance possible and even resemble the Buddhist position or relative autonomy on just violence. In these cases, that group or even individual violence or exploitation are situated in a discourse of class struggle that has an ideological structure consistent with other capitalist and even pre-capitalist practices. There is some literature on the political economy of arbitrary seasonal regional violence in France in the late middle ages. This same discourse exists in the justification or rationalization of individual and group religious practices in military organizations working for governments that represent a separation of church and state. This is historically a relatively new term considering the number of theocratic regimes that do not recognize that formal or informal separation in contrast to democratic rules of law which attempt to keep public order in a republic despite the actions of corporate despots.

The theory of the Asiatic mode of production, (AMP) was devised by Karl Marx around the early 1850s. The essence of the theory has been described as “[the] suggestion … that Asiatic societies were held in thrall by a despotic ruling clique, residing in central cities and directly expropriating surplus from largely autarkic and generally undifferentiated village communities.” The theory continues to arouse heated discussion among contemporary Marxists and non-Marxists alike. Some have rejected the whole concept on the grounds that the socio-economic formations of pre-capitalist Asia did not differ enough from those of feudal Europe to warrant special designation. Aside from Marx, Friedrich Engels was also an enthusiastic commentator on the AMP. They both focused on the socio-economic base of AMP society.

Marx and Engels were trying to reconcile why development was uneven in the East Asian context, partially to explain European colonialism and the creation of spheres on influence based on new forms of extractible exchange in the form of mobile surplus value, in this case, opium as a medium of exchange value.

Opium Godown (Storehouse) in Patna, Bihar (c. 1814)

“China, one of those faltering Asian empires, which one after the other fell prey to the entrepreneurial spirit of the European race, was so weak, so much collapsed, that it did not even have the strength to go through the crisis of a people’s revolution, so that an acute indignation has turned into a chronic and probably incurable disease, an empire, so much decomposed, that it was almost unable to rule its own people or to offer resistance to the foreign aggressors”.

Asiatic mode of production

This is a controversial contribution to Marxist theory, initially used to explain pre-slave and pre-feudal large earthwork constructions in China, India, the Euphrates and Nile river valleys (and named on this basis of the primary evidence coming from greater “Asia”). The Asiatic mode of production is said to be the initial form of class society, where a small group extracts social surplus through violence aimed at settled or unsettled band communities within a domain. Exploited labour is extracted as forced corvee labour during a slack period of the year (allowing for monumental construction such as the pyramids, ziggurats, ancient Indian communal baths or the Chinese Great Wall). Exploited labour is also extracted in the form of goods directly seized from the exploited communities. The primary property form of this mode is the direct religious possession of communities (villages, bands, hamlets) and all those within them. The ruling class of this society is generally a semi-theocratic aristocracy which claims to be the incarnation of gods on earth. The forces of production associated with this society include basic agricultural techniques, massive construction and storage of goods for social benefit (granaries).

Yet colonial extraction and power projected itself easily into East Asia in the 19th Century, partially because of the kinds of labor agreements made in parallel with native merchant capitalists as well as a hegemonic ensemble of colonizing projects, each bringing its own version of Orientalist (sic) value to Europe. Yet concurrently and administrative violence brought to a country has its relatively autonomous indigenous religion still operating as an ISA in parallel to missionary Christianity where spiritual volition could be retained.

Cetanā  is a Buddhist term commonly translated as “volition”, “directionality”, or “attraction”. It can be defined as a mental factor that moves or urges the mind in a particular direction, toward a specific object or goal

It is no stretch to see the use of religion in legitimating state violence as seen in the image of the Taliban demolishing sacred Buddhist sites as motivating or rationalizing the initial invasion into Afghanistan and its continued use on a more informally profane way in the conduct of the subsequent wars. These are moments of justifying/rationalizing violence against self or Other (preemptive violence prevents a greater sin). In some historical cases they are the reasons for oppressing rival sects or religions to this day.

Now here’s an interesting idea put forth by none other than President Barack Obama’s former chief economic adviser Larry Summers to get the large banks to invest the money in the economy, charge the banks for not spending. At a recent International Monetary Fund conference, Summers proposed that the Federal Reserve should charge banks a negative interest rate for stashing cash, much like the European Central Bank is considering, as a way to ward off another recession or sinking further into a full blown economic depression. Supposedly, this would force the banks to put the money to work in the economy. Some economic writers consider this an act of desperation but as Marl Gongloff at Huffington Post explains the times are already getting desperate

Slashing rates well below zero to make it painful not to spend money is the desperate approach to avoiding an economic depression recently endorsed by Larry Summers, President Obama’s former top economic advisor and one-time pick to run the Federal Reserve. With economic growth likely to be weak for the next infinity, the job market stubbornly awful and inflation disappearing, central bankers around the world have been toying with the idea for a while. Every day it gets closer to being a reality.  [..]

. . . St. Louis Federal Reserve President James Bullard told Bloomberg TV he thought the Fed should consider making U.S. banks pay money to park cash, too. He’s been saying this for more than a year, but the idea is slowly gaining more credence.

That is because, even though the Fed has had a ZIRP (zero interest rate policy) in place for nearly five years now, that has not been enough to get the economy up to full speed. [..]

But even that might not be enough: Some economists think interest rates should be much, much lower than zero: Maybe negative four percent, before adjusting for inflation. Summers recently warned that the U.S. and other big economies could be in a near-permanent state of malaise — like Japan since the 1990s — because interest rates are still too high even at zero. Many liberal economists, including Paul Krugman, think sharply negative interest rates could be the only way to deal with this.

There may be some loud noise emanating from the banks and Wall Street but since congress is stuck on the austerity train wreck, this could be a way for the Federal Reserve to kick start some stimulus. With Summers behind it, it just might be the last desperate solution.