Archive for the ‘depression’ Category

Cartoon for April 20, 2009

April 20, 2009

When everyone’s losing everything, those who manage to hold on to what they have look lucky.

NEW ANIMATION: The Fiendish Skies

April 6, 2009

Sitting in airports waiting for flights operated by carriers that might not still be in business by boarding time gave me the idea for this animation, wherein an airine goes out of business WHILE the flight is in progress. Hope you like it.

Cartoon for March 30, 2009

March 30, 2009

It’s true: financial markets are reacting favorably when bad news is less bad than previously forecast. If there’s a better indication of a country in despair, I don’t know what it is. We’re pathetic.

Cartoon for March 21, 2009

March 21, 2009

Americans aren’t cut out for austerity. And there, ladies and gentlemen, lies our greatest hope for economic recovery.

Cartoon for March 19, 2009

March 19, 2009

Bankers that received federal bailouts are complaining that the government is changing the terms and conditions of their loans after the fact. Sounds familiar.

Cartoon for March 8, 2009

March 8, 2009

The collapse of the New Economy leads to a reversal of the old conservative report to the downtrodden.

Cartoon for March 4, 2009

March 4, 2009

Obama’s economic stimulus plan calls for higher taxes on people who earn over $250K after 2011. Will anyone earn that much by then?

Cartoon for February 26, 2009

February 26, 2009

Even as the economy drags the United States into oblivion, many Americans keep up appearances of normalcy.


February 26, 2009

Obama, Media Grandstand on Executive Pay

SPRINGFIELD, ILLINOIS–On July 14, 1789 an angry mob invaded Paris’ Bastille prison, igniting a chain of events that became the French Revolution. The insurgents may have been provoked by a prisoner, the notorious Marquis de Sade. “They are killing the prisoners here!” he shouted to the crowd two weeks earlier, on July 2nd. The authorities moved him to another prison before the 14th.

The storming of the Bastille was pretty much a BS event. There were only seven prisoners for the revolutionaries to liberate, several of whom were living lives of considerable ease in fully furnished cells with servants. Yet the Bastille remains a symbol of monarchist oppression smashed by righteous people seeking freedom and equality. Sometimes empty symbolism means a lot.

Not so much here or now. Revolution doesn’t seem imminent in Obamaland, where polls show people pro-Bama despite losing their jobs, and a government bailout for everyone and everything except the people and institutions who actually need help. But revolution’s second cousin–symbolic scapegoating–is all around, like love in the Mary Tyler Moore Show theme song minus the beret toss.

“In 1980, according to a Forbes magazine study, executive compensation was 40 times the average worker’s pay; by 2007, that had soared to more than 400 times,” CBS News reported on February 25th. Now that the companies those ridiculously compensated executives were charged with running are tanking, CEO pay is coming under attack by pundits and politicians.

President Obama won headlines and plaudits for a $500,000 income cap on top corporate executives–an idea that I and other progressives have been promoting for ages (and that was derisively dismissed as socialism before the U.S. began sliding into oblivion in September). As with the Bastille, however, there’s a lot more symbolism than substance here.

First, the $500,000 cap doesn’t cover 99 percent of Fortune 500 companies–only those receiving federal bailout cash. Firms like Bank of America, Citigroup, Wells Fargo and AIG, which got the first round of TARP moolah, won’t be affected. Only a handful of companies would be covered, and even they’ll escape the restriction. First, most CEOs receive relatively low salaries anyway. Most CEO compensation comes in the form of bonuses and stock options, which aren’t subject to Obama’s cap. And even the income cap cab can easily be evaded; CEOs simply have to notify company shareholders.
That’s not all. “[Obama’s income cap] excludes the midlevel execs who also received some of those Wall Street bonuses and who in many cases made the risky bets that sparked the crisis,” reports The There are more loopholes, so many you could drive a gold-plated Hummer through it if you could afford the gas, but you get the idea.

“America needs to understand that this is cosmetic, that this is to appease taxpayer ire,” says “Naked Capitalism” blogger Yves Smith, who has worked on Wall Street for 25 years. But that would be true even if Obama’s cap were real and applied to every CEO in America.

Universally blamed for the fiscal meltdown, Wall Street investment bankers are under fire for taking in billions in bonuses in 2008, a.k.a. The Year America Died. Chris Dodd, chairman of the Senate banking committee, grandstanded thusly, vowing to use “every possible legal means to recoup the $18.4 billion in Wall Street bonuses.” Vice President Joe Biden said: “I’d like to throw these guys in the brig.”

Of course, nothing of the sort will happen. The bankers will keep their bonuses; they won’t be checking into the Greybar Hotel any time soon.

What’s gotten lost in the populist uprising is why seven-digit CEO salaries were worth talking about in the first place. They’re a symbol and litmus test of a bigger problem, skyrocketing income inequality, that has gotten worse and worse since the late 1960s. As the rich have grown richer–not just rich CEOs, but everyone in the top one to five percent of income earners–the poor, and especially the middle class, have become poorer and poorer.

The overall social problem of rising income inequality is at the root of our current economic ills. If corporations had paid the vast majority of workers the raises they deserved over the past 40 years, raises commensurate with increases in efficiency and productivity, people would have saved more and borrowed less. The real estate and credit bubbles wouldn’t have grown as big. When they burst, people would have had resources to fall back upon. We are broke, unemployed, and maxed out–not because we bought too much stuff, but because our bosses paid themselves instead of us.

CEO and executive compensation in general aren’t the problem, or even the cause of the problem. They are symptoms of a malady inherent in the capitalist system: the tendency of those who gain an early advantage to monopolize assets and aggregate wealth and influence at the expense of everyone else. You can see it when you play the board game “Monopoly.” More times than not, whoever gets an early lead wins.

It isn’t just CEOs. It’s millions of Americans at the top of the income scale, many of whom consider themselves middle class. Because they earned too much, others earned too little.

Insulting CEOs (while letting them keep their perquisites) may be fun. But it doesn’t begin to address what’s killing the U.S. economy: the rancid notion that one person’s hard day’s work deserves more pay than another’s.



February 10, 2009

Could It?

PARIS–Most Americans don’t care what happens in France. But the oldest country in “Old Europe” remains the Western world’s intellectual capital and one of its primary originators of political trends. (Google “May+1968+Sorbonne.”)

The French are reacting to a situation almost identical to ours–economic collapse, government impotence, corporate corruption–by turning hard left. National strikes and massive demonstrations are occurring every few weeks. How far left? This far: the late president François Mitterand’s Socialist Party, the rough equivalent of America’s Greens, is considered too conservative to solve the economic crisis.

A new poll by the Parisian daily Libération finds 53 percent of French voters (68 percent of 18-to-24-year-olds) favoring “radical social change.” Fifty-seven percent want France to insulate itself from the global economic system. Does this mean revolution? It’s certainly possible. Or maybe counter-revolution: Jean-Marie Le Pen’s nativist (some would say neofascist) National Front is also picking up points.

One thing is certain: French politics are even more volatile than the financial markets these days. In yet another indication of How Far Left?, the Communist-aligned CGT labor union is on the defensive for not being militant enough. “We’re not going to put out the blazing fires [of the economic crisis],” the CGT’s secretary general said, trying to seize the initiative by calling for another strike on February 18th. “We’re going to fan them.”

Two new entities, a Left Party (PG) umbrella organization trying to unify opposition to the conservative government of President Nicolas Sarkozy (who’d be to the left of Obama in the U.S.) and the New Anticapitalist Party (NPA), have seized the popular imagination. The NPA claims to have registered more than 9000 “militants” willing to use violent force to overthrow the government if given the word.

“Only combat pays,” read a banner at the NPA’s first convention.

Communism is dead, most pundits–the mainstream, stupid ones anyway–have been telling us since the USSR shut down in 1991. As it turns out, the libertarians were wrong. Half-right, anyway: Human nature may be inherently individualistic, as free market capitalists claim, but it’s also inherently social. When economies boom, most people are sufficiently satisfied to leave well enough alone. Who cares if my boss gets paid 100 times more than I do? I’m doing OK. As resources become scarce, however, we huddle together for protection. The sight of a small rich elite hoarding all the goodies violates our primal sense of fairness.

“In Soviet times,” a man in present-day Tajikistan told me, “we lived worse than we do today. But we were all the same. Now we live a bit better, but we have to watch rich assholes pass us in their Benzes.” Which would he choose? No hesitation: “Soviet times.”

In America, a French cliché goes, people are afraid of the government. In France, the government is afraid of the people. With good reason, too: the French have overthrown their governments dozens of times since the Revolution of 1789. The French are hard wired with class consciousness. Strikes, demonstrations and general hell-raising are festive occasions. Only when things spin totally out of control–as when Muslim youths rioted in the suburbs of Paris and other cities–are conservatives like Sarkozy able to make headway.

Riots over police brutality by disenfranchised minorities make the French nervous. But contempt for American-style “harsh capitalism,” where citizens pay $800 a month for healthcare and write nary a letter to their local newspaper to complain, is 100 percent mainstream. The French don’t think they should have to suffer just because some greedy bankers went on a looting spree.

Even Sarkozy is getting the message. “We don’t want a European May ’68 in the middle of Christmas,” he warned his ministers in December. He shelved proposals to loosen regulation of business. Arnaud Lagardère, CEO of the Lagardère Group, told the financial daily Les Echos: “We’re seeing, in renewed form, the most debatable aspects of Anglo-Saxon capitalism called into question.”

The French and Americans face similar problems. But their temperamental differences lead them to different conclusions. An average working-class Frenchman possesses a deeper understanding of economics, politics, history and economics than most college professors in the U.S. Go to a bar or café, and sports will be on the television–but not on people’s lips. They’re talking politics and how to force their leaders to protect their quality of life.

Americans, on the other hand, don’t expect direct help from their government. They’re giving Barack Obama time to see whether his economic recovery program will work. It won’t, of course; economists say so. But indolent hopefulness is less work than chucking Molotov cocktails.

Back in France, the NPA sets off rhetorical bombs Americans wouldn’t dream of. “We’re not a boutique party out to get votes, or an institutional mainstream party, but a party of militants,” says the NPA’s leader to the Le Monde newspaper. “We’re real leftists, not official leftists.” The NPA is currently negotiating a temporary alliance of convenience with the Communists.

A communist revolution in western Europe would be greeted by curiosity and derision in the U.S. state-controlled media. But if such a social upheaval were to protect French living standards from a global Depression spinning out of control, it might also prove inspiring to increasingly desperate Americans.