Fed tries to pump some more air into our bubble economy

Photo courtesy of MSNBC

The Federal Reserve has just announced yet another dramatic intervention in the financial markets. This time around, they are trying to jumpstart consumer lending (aka car loans, student loans, etc), as well as mortgage lending. In order to do so, the Fed is buying up more of Fannie Mae and Freddie Mac's mortgage backed securities and, according to the Washington Post (articled linked above):

creating a $200 billion program that will lend against highly rated securities backed by auto loans, student loans, credit card lending and small-business loans backed by the Small Business Administration

Now, I recognize that the economy cannot function if people cannot get access to loans for major expenditures. Nonetheless, I think this plan reflects a fundamental misdiagnosis of the root cause of our economic crisis on the part of the Federal Reserve/U.S. Treasury. That misdiagnosis could be the result of sheer incompetence, but I doubt it. Rather, I think it's more likely a function of the disproportionate role of finance in our economy, and its concomitant excessive and destructive influence over our political leadership and institutions.

According to the Washington Post and seemingly, according to the Federal Reserve and the Treasury, the most pressing problem facing our economy right now is the refusal of financial institutions to lend to businesses and consumers. Hence, the above mentioned intervention and all previous bailouts of the financial sector. However, according to Dean Baker, this argument misses one absolutely essential detail: The United States has just experienced the collapse of a gigantic housing bubble, which was allowed to grow for far too long thanks to the policies of libertarian ideologues like Alan Greenspan. As such, the country now finds itself with $5 trillion less in housing wealth today than we had, collectively, at the beginning of last year. The result?

In addition to leading to a fall in residential construction of more than 50 percent (3 percent of GDP), the loss of $5 trillion in housing wealth would be expected to lead to a fall in annual consumption of between $250 billion and $350 billion (1.7-2.3 percent of GDP)

In other words, it's not all that complicated: Housing bubble collapses --> residential construction tanks + consumer spending drops --> we're in a recession. As for the lending bit, if you were a bank, would you really want to make a car loan to someone who might lose their job next week? Thus, we're in a recession, the proximate cause of which is the bursting of the housing bubble.

If we take a broader look at this crisis, however, it goes beyond just the housing bubble. Prior to the housing bubble, we had a stock market bubble, which Dean Baker, in another piece, says was worth $10 trillion dollars. Its collapse in 2001 left us with a short, but painful recession and a slow, almost jobless recovery. Prior to that, we witnessed an explosion in credit card debt, which continues to this day. For decades, Americans have increasingly been living beyond their means and financing personal expenditure with debt. Our Personal savings have reached record lows and have been on the decline since the 1980s. In its current policies, the Fed is trying to pump some more air into the debt bubble but is doing nothing to address the route cause: we just have too much debt.

The key question, of course, is why we have so much debt. The most oft-cited explanation in the popular culture is that Americans just spend too much money on frivolous things like SUV's, flat screen tvs, meals at restaurants, and the like. If you asked a conservative, they'd likely argue that such reckless spending is the result of some sort of collective moral failure on our part and an overly permissive culture. If you asked a progressive, they might place the blame on the marketing industry and the rat race mentality that pervades our society. In actuality, none of the explanations are true (though the marketing industry is indeed rather evil) because the underlying premise--that we're in over our eyeballs in debt due to fiscal recklessness--is simply false.

One of the foremost experts on the issue of increased indebtedness is Elizabeth Warren, a law professor at Harvard. She wrote one of the chapters in John Edwards's 2007 book on poverty in America and I highly suggest you read both her chapter and the book (Yes I know I'm supposed to despise Edwards because he lied about sex, but excuse me if I think that's less of a crime than two illegal wars, warrant-less spying, and the various trillion dollar bailouts). What she's discovered is that in actuality, the average middle class family today spends less, that's right, less of their income on clothes, food, electronics and luxuries than the average family three decades ago. Rather than being due to increased frivolous spending, the average American family is suffering from increasing levels of debt because the prices of a few big ticket essential items have gone through the roof. Namely, the cost of education, transportation, and in particular, health care have gone up dramatically. (On a side note, this is why the argument that Wal-Mart benefits American workers overall because of its low prices, despite its negative impact on wages, is patently false. Wal-Mart sells things that consume less and less of our incomes, largely due to forces outside of its control, yet exerts powerful downward pressure on wages for low income workers, which are used to buy essentials like health care, which Wal-Mart doesn't sell. But I digress.) These increases wouldn't be so bad if the past thirty years saw a concomitant increase in wages. However, as most Americans know all to well, wages have largely stagnated since the late 1970s and have lagged behind productivity growth considerably. In fact, had wage growth tracked productivity growth over the past 30 years, the median American income would be $20,000 higher and the minimum wage would be $19.12 per hour. That's right, over 19 bucks an hour.

Unless we take steps to both control the cost of transportation, education, and health care and increase wages, we will inevitably continue down our current destructive path. Who knows, maybe the fed has discovered some new form of wealth, the value of which it can inflate or allow to inflate in order to create a new bubble. I doubt it, however, and even if they could it would merely delay the inevitable and exacerbate our current problem of excess debt. Thus, I would contend that policies like single payer health insurance, expanding public transportation, and the Employee Free Choice Act, which would make it less impossible for workers to join unions, are not only essential to make our society more decent and equitable but also for restoring economic growth. That would be change we can believe in.

Why not nationalize them?

You know what? While it was certainly worthwhile to point out the manifest hypocrisy of the MSM's double standard on the auto industry bailout and the financial industry bailouts, I think my words in support of the auto industry bailout were wasted. Rather than bailing them out, why not just nationalize these companies? We could replace all the executives with civil servants and cap their wages at reasonable rates, making these companies far more efficient. We could guarantee that not a single worker was laid off. We could also force the companies to make more fuel efficient, cleaner cars because heck, we'd own them! Moreover, we could even use the newly nationalized auto companies as mini policy laboratories. For instance, we could set up a pilot version of a public, single-payer health care plan for auto workers, retirees, and their families, which could later be expanded to the entire population. We could convert their pensions into a single, publicly managed system, which would likely be much more efficient than their privately managed pensions, according to Dean Baker. We could even experiment with cogestion/co-management and allow the autoworkers to manage some of the state-owned factories. We could use Alcasa, a state-owned aluminum company in Venezuela, as a model.

Woah, I just suggested we could learn something from Venezuela. At that point, this post stopped being anywhere near practical and became, pardon my French, more of a lefty wet dream. But heck, I can dream can't I? Now, of course there could be some real downsides to nationalization. If these companies fail anyway, in spite of the efforts of the federal government to save them, the losses would be on us, the taxpayer. Additionally, the publicly owned auto industry would still have to produce cars that people like. Even lefties like me ought to be at least a bit skeptical about that proposition. Nonetheless, I think it's worthwhile to at least consider the possibility. Wouldn't it be great if our national discourse was so bold and so inclusive that nationalization was discussed on the opinion pages of major papers and in the halls of congress (by someone other than my man Bernie Sanders)? That, as I've said before and will certainly say again, would be change we can believe in.

Robert Reich: a voice of sanity on the auto bailout

Robert Reich injects some much needed sanity into the auto industry bailout debate. Can someone please tell me why isn't he one of the many Recycled Clintonites joining the Obama administration?

I disagree with just one of his many otherwise great points, his contention that:

GM's creditors, shareholders, executives, and workers [my emphasis added] should have to make substantial sacrifices before taxpayers should be expected to sacrifice as well.

As one of the commenters on Reich's blog smartly pointed out, the UAW already made considerable concessions in its 2007 contract. Detroit's executives, creditors, and shareholders should certainly have to sacrifice, but not their workers, in my opinion. Doesn't that defeat the purpose of an auto industry bailout, which ought to be, in my opinion, saving the many good paying jobs at these companies that so many communities in the mid-west depend on?

Unbearable hypocrisy on the proposed auto industry bailout

Congress is currently engaged in a heated debate over another taxpayer bailout, this time for the U.S. auto industry. More specifically, Congress is debating whether to provide the Big Three with an advance on a $25 Billion loan the government has already promised them and draw on funds allocated for the financial sector bailout for another $25 Billion loan to help them retool and start building greener cars. According to economists Paul Krugman and Dean Baker, the collapse of the U.S. auto industry would be devastating for the American economy and the economies of Michigan and Ohio, which are already reeling, in particular. Many parts suppliers and other businesses in the Mid-west depend on the Detroit automakers for most of their business so if they were to cease production, the result could be the loss of as much as a million jobs. Of course, this is the last thing we need right now, as unemployment and home foreclosures continue to surge upwards and productive investment is on the decline. As such, I support, though not without qualification, extending U.S. auto makers a helping hand.

Now, like any rational person, I fully admit that the management of Chrysler, GM, and Ford brought much of this crisis upon themselves by maddeningly refusing to produce smaller, more energy efficient cars for many years and relying on gas-guzzling SUVs and trucks for far too long. Further, the United Autoworkers (UAW) must share in some of the blame as well, because they've basically echoed Detroit's line on environmental issues for many years. Any cash we hand out to the auto industry should come with strict conditions regarding environmental standards. There should also be aggressive government oversight of how they use the money, unlike the current financial industry bailout, which Naomi Klein rightly calls a giant corporate crime scene.

Bearing that in mind, however, I simply cannot stomach the excessive hand-ringing in the mainstream media directed towards the auto industry, particularly in light of the MSM's intense and near unanimous support of the financial bailout several months ago. Frankly, all too many commentators in the mainstream media are pure hypocrites and I, like Dean Baker, suspect that much of the criticism of the auto industry among our nation's opinion elite stems from their intense hatred of the UAW, labor unions, and working people in general. To prove my point, let's have a look at how two influential and supposedly "liberal" sources of elite opinion, the editorial page of the Washington Post and New York Times columnist Thomas Friedman, responded to the proposed bailout of the auto industry and the actual bailout of the financial sector.

Back on November 8th, here's what The Post had to say about bailing out the auto industry:

the only sensible bailout of Detroit would be one with strict conditions...

Post columnist Steven Pearlstein has suggested that these companies need to be reorganized top to bottom, through a kind of "prearranged" bankruptcy greased with federal aid: Under court direction, the firms would trim wages and benefits that far exceed those of non-union competitors, reduce the burden of pension payments, which stands at $90 billion over the next decade, and prune an outmoded network of 10,000 dealerships.

In his November 12 column titled "How to Fix a Flat", Thomas Friedman largely echoed the Post's recommendations, though he also added his own self-righteous diagnosis of how the industry got in this mess:

How could these companies be so bad for so long? Clearly the combination of a very un-innovative business culture, visionless management and overly generous labor contracts explains a lot of it...

The blame for this travesty not only belongs to the auto executives, but must be shared equally with the entire Michigan delegation in the House and Senate, virtually all of whom, year after year, voted however the Detroit automakers and unions instructed them to vote....

if we are going to use taxpayer money to rescue Detroit, then it should be done along the lines proposed in The Wall Street Journal on Monday by Paul Ingrassia, a former Detroit bureau chief for that paper.

“In return for any direct government aid,” he wrote, “the board and the management [of G.M.] should go. Shareholders should lose their paltry remaining equity. And a government-appointed receiver — someone hard-nosed and nonpolitical — should have broad power to revamp G.M. with a viable business plan and return it to a private operation as soon as possible. That will mean tearing up existing contracts with unions, dealers and suppliers, closing some operations and selling others and downsizing the company ... Giving G.M. a blank check — which the company and the United Auto Workers union badly want, and which Washington will be tempted to grant — would be an enormous mistake.”

These are some harsh words, indeed. Without a doubt, these guys don't want the government to give Detroit any help without forcing them to make drastic changes. In particular, they must deal with their pampered workforce. Going further than that, Friedman is quite critical of Michigan lawmakers, mere appendages of the industry in his view. Certainly then, they must have been quite critical of the pay packages on Wall Street, which are far more excessive, than those of auto workers, who make about $57,000 a year, as well as the members of congress who did Wall Street's bidding by pushing for deregulation, one of the main causes of the financial crisis. Moreover, they must have called for strict restrictions and oversight.

Well, you can see for yourself what they actually said. Both The Post and my buddy Tom Friedman stressed expediency and discouraged government micromanagement of the Wall Street bailout:

The Post, on October 2nd:

AMERICA is the land of second chances, so it is fitting that the House of Representatives should get an opportunity to redeem itself for its reckless rejection of the financial rescue package on Monday

The case for the plan, known formally as the Troubled Assets Relief Program (TARP), does not hinge on its perfection. As we have said, it is possible to imagine alternatives, some of which, such as a direct federal purchase of bank equity, might prove more effective at a lower cost to taxpayers. Or they might not. The point is that TARP is the only plan on the table that has both a reasonable chance of political success and a reasonable chance of economic success. Under the circumstances, which at the moment include a mounting worldwide financial collapse, we do not have time to run a legislative seminar on the theory and practice of financial rescue.

Friedman, on September 30th:

Message to Congress: Don’t get cute. Don’t give us something we don’t need. Don’t give us something designed to solve your political problems. Yes, Hank Paulson and Ben Bernanke need to accept strict oversights and the taxpayer must be guaranteed a share in the upside profits from all rescued banks. But other than that, give them the capital and the flexibility to put out this fire.

Further, concern over excessive compensation at Wall Street firms was either nonexistant (The Post) or written off as a minor issue, by Friedman:

I totally understand the resentment against Wall Street titans bringing home $60 million bonuses. But when the credit system is imperiled, as it is now, you have to focus on saving the system, even if it means bailing out people who don’t deserve it. Otherwise, you’re saying: I’m going to hold my breath until that Wall Street fat cat turns blue. But he’s not going to turn blue; you are, or we all are. We have to get this right

Finally, if there was any concern on the part of these wise men that lawmakers were unscrupulously heeding the will of a particular interest group, that interest group was the American people, who overwhelmingly opposed the Wall Street bailout. Responding to the will of the people was instead regarded as "reckless" by the Post or poo-pooed by Friedman, who assured us that if we knew as much about the world economy as him, we'd surely come around to supporting the bailout:

you can’t save Main Street and punish Wall Street anymore than you can be in a rowboat with someone you hate and think that the leak in the bottom of the boat at his end is not going to sink you, too. The world really is flat. We’re all connected. “Decoupling” is pure fantasy.

In a nutshell, as I said before, these people are total hypocrites and imposed completely different standards on the auto industry and the finance industry. Now, granted, I'll buy the argument that finance is of central importance for the whole economy but that's still no excuse for excusing the myriad abuses of Wall Street. Furthermore, anyone who regards the pay and benefits of unionized autoworkers as excessive is completely ridiculous, at best. Did the Post or Mr. Friedman perhaps consider that maybe the non-unionized, largely southern workforce employed by foreign automakers are underpaid, giving them an unfair advantage? One of the conditions imposed on an auto industry bailout ought to be accelerated passage of the Employee Free Choice Act, which could help level the playing field between American, unionized automakers and foreign-owned, non-unionized companies. Unionized, good paying blue collar jobs ought not to be such a rarity. We could also help the auto industry deal with their high health care costs by enacting single-payer, universal health care, which is absolutely essential if we want to get health care costs under control and deal with the gross inequities of our health care system anyway. That would be change we can believe in.

Pineapples: not as sweet as they seem

I suspect that many of my readers, who no doubt enjoy my astute analysis of American politics, may wonder at times why I focus so much on the United States while I am in fact living in a different country. After all, this blog is titled "Dispatches from the Rich Coast" but I have only written one post on the Rich Coast, aka Costa Rica. To you I say, "that's a good question". I suppose like most Americans and many around the world, the 2008 U.S. elections as well as the global financial crisis, whose epicenter is in the United States, just grabbed most of my attention. Today I will break my months-long silence on Costa Rican issues and henceforth, I will try to do a better job of covering local news in my blog, while still writing the posts about American politics that my loyal fans have come to know and love. I'm going to break the silence by talking a bit about the pineapple, which despite its sweetness, leaves a bitter taste in the mouths of many Costa Ricans.

Pineapples have long been part of the Costa Rican diet but until very recently, pineapples were grown in Costa Rica almost exclusively for domestic consumption. That all changed, according to Joanna Blythman from the Guardian (UK), in 1996 when Del Monte unveiled a new variety of pineapple known as the "Del Monte Gold". Del Monte named its new variety the "Gold" because unlike most pineapples available at the time, which had green skin, the flesh of Del Monte's new pineapple was bright yellow. The green pineapples available before 1996 were often hard and quite sour, but this new breed of fruit was softer and much sweeter. Furthermore, the Del Monte Gold was far healthier: compared with the old, greener varieties of pineapples, this new variety had 4 times the vitamin C. After the introduction of the Del Monte Gold, which was copied by other large fruit companies as well, demand for pineapple in Europe, Asia, and North America shot up. In order to respond to higher demand, Del Monte decided to ramp up production. But rather than expand in its traditional production platform, Hawaii, where the Gold was developed and where employers are required to provide health insurance to their workers and must deal with a highly unionized workforce, Del Monte decided to start growing pineapples on a massive scale in Costa Rica instead. By 2007, according to a spectacular report by the International Labor Rights Fund that I highly suggest you read if you have the time, Costa Rica was the #1 exporter of fresh pineapples in the world. Costa Rica exported half a billion dollars worth of pineapples in 2007. Further, 90% of all pineapples imported by the United States come from Costa Rica. Needless to say, if you've eaten a pineapple recently, it was almost certainly grown in Costa Rica.

There are several major beneficiaries of the meteoric rise in pineapple production in Costa Rica over the past decade. First on that list is undoubtedly Del Monte, whose Costa Rican subsidiary, The Pineapple Development Corporation (PINDECO), is responsible for over half of Costa Rica's pineapple production. The pineapple has helped Del Monte catch up with its more established fruit-exporting rival, Chiquita, which has had less success entering the pineapple market. Secondly, North American and European consumers, who can now eat fresh, sweet, and cheap pineapple year-round, have certainly benefited as well. Unfortunately, the workers in Costa Rica's pineapple plantations and packing houses, the communities surrounding major centers of pineapple production, and the Costa Rican environment are not among the beneficiaries of pineapple production. Rather, the dramatic expansion of pineapple production has been more of a curse than a blessing for the Costa Rican environment, as well as many of its workers and communities.

A hot, wet climate is required for pineapple growth and many regions of Costa Rica, particularly the Caribbean Coast, have both heat and humidity in abundance. However, in order to expand pineapple production and provide the fruit with the sunlight it needs, many forests have been cleared, at times, according to the Miami Herald, illegally. Deforestation is particularly problematic in Costa Rica because it is home to a disproportionate share of the world's biodiversity. According to the Costa Rican National Biodiversity Institute, a government agency, Costa Rica is home to 4% of the species of plants and animals in the world's while covering only .03% of the world's landmass. Continued expansion of pineapple production is a threat to Costa Rica's biodiversity, of which Costa Ricans are justifiably proud.

Costa Rican pineapple production is for the most part highly intensive, industrialized mono-culture. As such, it requires the application of large amounts of pesticides and agro-chemicals, much of which ends up in the soil and the groundwater of the surrounding areas. Many of the agro-chemicals used in pineapple production are harmful to human beings and several of the pesticides used on these plantations are banned for use in the United States by the EPA. Recently, the Costa Rican government began daily shipments of water to a 6,000 person community in the heart of pineapple country in the Caribbean, after tests showed unsafe amounts of Bromacil, a pesticide used on the pineapple plantations, in local aquifers.

Sadly, this is just a small sample of the myriad environmental abuses of the Costa Rican pineapple industry.

The pineapple industry is a major employer in some parts of Costa Rica; in 2006, the pineapple industry employed 100,000 people throughout the country. Unfortunately, the pineapple companies are as dedicated to respecting the rights and dignity of their workers as they are dedicated to protecting the environment. Many of the workers who toil in the pineapple industry are undocumented immigrants from Nicaragua (hundreds of thousands of Nicaraguans have left their country to live and work in far more prosperous Costa Rica). The conditions faced by undocumented Nicaraguan immigrants in Costa Rica's pineapple industry are frighteningly similar to that of undocumented workers in the U.S. According to the ILRF report:

they fear...losing their jobs or being deported if they speak up or try to join a union, [suffer from] underpayment of wages and forced overtime, and abusive treatment. If they complain, the farm managers call the police to check their papers, so they rarely report problems.

Pineapple pickers in the fields make about $1.20 per hour and are rarely paid overtime. Workers in the packing houses (where pineapples are washed and processed for export) are paid not by the hour but by how many boxes of pineapples they pack in a day. As a result, they end up getting paid even less than workers in the fields. Work in the packing houses is also far less stable; at times, if for some reason there are no pineapples to pack, workers are just sent home without pay. Not coincidentally, workers in the packing houses are predominantly women while workers in the fields are almost exclusively men. In both the packing houses and the fields, pineapple workers labor for 10 to 12 hours a day and days off are rare. According to a 2005 study conducted by ASEPROLA, a Central American labor rights organization, pineapple workers can work as long as 3 weeks in a row without a day off.

In order to avoid legal responsibilities such as paying social security contributions, the large pineapple transnationals avoid hiring permanent, full time workers. Instead, they often hire workers, fire them after three months (at which point the employer must begin contributing to the workers' social security and provide them with other benefits), and then rehire them. Maintaining a flexible, unstable labor force is also, according to ILRF, part of the pineapple companies' strategy to discourage union membership. Because the workers must be rehired every few months, they constantly fear losing their job and are reluctant to complain about their situation. At times, the pineapple exporters also hire subcontractors, who then must recruit and pay the laborers themselves. Doing so absolves the companies of all legal responsibility for their workers. The companies also pit the subcontractors against each other, driving down costs further.

As mentioned above, pineapples are grown in hot and humid regions, so the workers who labor in the fields for 10 to 12 hours a day must do so under intense sunlight with little shade. The heat and, and particularly the humidity can also reach oppressive levels in the packing plants, where the largely female workforce are forced to stand all day. Further, pineapple workers must directly handle the same toxic chemicals that end up in the soils and groundwater of neighboring communities. Inevitably, this has a negative on the workers' health. According to the Costa Rican Human Rights Ombudsman, a public agency charged with monitoring human rights in the country:

relating the environment to the health issue it can be observed that the respiratory illnesses in the area have a close relationship to the unmeasured use of pesticides that are used and the solvent mixture. Evidence has shown that it only takes about 2-3 years to start developing health issues after working in the pineapple plantations.

Additionally, pineapple exporters are virulently anti-union and employ a wide variety of tactics to trample on the labor rights of their employees. In 2007, Grupo Acon, a major Dole supplier, fired all of its workers, claiming it was for their benefit because they became entitled to severance pay, and stated it would soon rehire them. However, many union supporters were not offered their jobs back and were denied their severance pay. Several companies have also employed this tactic to get rid of unwanted older workers (which is illegal). Many companies hire armed guards who physically prevent union representatives from entering their plantations. Workers are also subjected to intense, Wal-Martesque anti-union propaganda. Grupo Acon makes its workers watch a video which demonizes unions and blames them for the closure of several banana plantations in the Southern Pacific Coast of Costa Rica in the 1980s. Further, women workers are sexually harassed on a consistent basis and many have been fired for filing formal complaints.

Moreover, Pineapple expansion has been particularly harmful for small farmers. Mono-crop pineapple agriculture attracts new pests to the region that destroy food crops and bother livestock so much that they stop eating and starve to death. Expansion of pineapple production also drives up the cost of land. Combined, these effects have led to the displacement of many small farmers, who are then often forced to work on the pineapple plantations to survive. Further, land once used to produce local staple crops like rice, corn, and beans is transferred to pineapple production for export, eroding Costa Rica's food sovereignty and increasing its dependence on food imports.

Opposition to further expansion of pineapple production has grown so intense, given its manifest negative impact on the environment, workers, and small farmers, that many communities have organized themselves and formed associations to oppose the pineapple conglomerates. These groups include the Popular Front Against Pollution, formed to confront pesticide contamination caused by Del Monte, The Frente Nacional de los Sectores Afectados por la Expansión de la Piñera (The national front of sectors affected by pineapple expansion), a coalition of community groups which has employed tactics like roadblocks to protest pineapple expansion, and Foro Emaús, a network of religious, labor, community, and environmental groups which was formed with the aim of humanizing banana production, but has recently expanded its focus to pineapples. The Frente Nacional and Foro Emaús have jointly released two videos documenting the myriad abuses of the pineapple industry and their reasons for opposing its expansion. You can check them out right here:
The Reality of Pineapple is not so Sweet:


The Bitter Taste of Pineapple:


As I mentioned many paragraphs ago, 90% of the pineapples imported by the United States come from Costa Rica which means that you, the American consumer of pineapples, play a big role in this whole process. Some of my readers may hopefully be wondering, well, what can I do about this? Personally, I think the best thing to do as an individual is look for Fair Trade Certified Pineapples. Fair Trade pineapples are grown by cooperatives of small farmers and thus grown in a more socially responsible and environmentally sustainable manner than the average plantation-grown pineapple on the market. If you can't find Fair Trade pineapples, tell your supermarket to stock them! In the meantime, you'll probably have more luck finding organic pineapples, which likely still exploit their workers, but at least don't put them and their communities in contact with toxic pesticides and chemicals. At a minimum, the next time you bite into a delicious, sweet pineapple, just realize that workers and communities thousands of miles away in Costa Rica made a lot sacrifices for you to have that piece of fruit.

Great video on the Employee Free Choice Act

Great video on the Employee Free Choice Act, the most important piece of legislation since the Great Society:

Larry Summers floated as possible Obama Treasury Secretary: Please, tell me you're joking!

Although Obama defeated McCain just three days ago, there has already been a lot of speculation as to what his cabinet might look like. Given the current state of the economy, which seems to get worse every day, one of the most talked about cabinet posts is naturally the Secretary of the Treasury. Indeed, discussion of likely candidates for Treasury Secretary under an Obama Administration began weeks before Obama was elected. One of the prime candidates for the position, according to New York Magazine and other sources, is Lawrence Summers, former Treasury Secretary under Clinton and President of Harvard University. That Obama might legitimately be considering this guy, indeed that this guy is at the top of the list of candidates for this position, ought to strike fear in the hearts of progressives.

Dean Baker has a great post today that discusses Summers's record and current and former policy positions and folks, let's just say it ain't pretty. As a member of the Clinton administration, Summers contributed to the the 2001-02 recession by doing nothing to contain the stock market bubble and also helped bring about the current economic crisis, through his support for reckless financial deregulation. More generally, if Summers is chosen as Treasury Secretary it will signal that the Obama administration will look a lot like a second Clinton administration. The Clinton years were certainly better than the Bush years, but I and many Americans, including Obama's strident and unyielding supports in the labor movement, expect much better from Obama than 8 more years of neoliberal corporate globalization with a bit of a human face. We want real, fundamental change.

In addition to his contributing role in the past two recessions, Summers has other skeletons in his closet which ought to be equally, if not more horrifying for progressives. Yesterday, Max Blumenthal pointed out in his blog on the Huffington Post a little known fact about Summers:

On December 12, 1991, while serving as chief economist for the World Bank, Summers authored a private memo arguing that the bank should actively encourage the dumping of toxic waste in developing countries, particularly "under populated countries in Africa," which Summers described as "UNDER-polluted." Summers added that public outrage over the heightened rates of prostate cancer caused by his proposed dumping would be mitigated by the fact that poor people in developing countries rarely live long enough to develop prostate cancer.

That's right, I haven't copied it wrong, Summers actually said countries in Africa were under-polluted, as if some level of pollution is optimal for human welfare. In 1992, Brazil's Secretary of the Environment, Jose Lutzenburger, responded to the Summers memo with great eloquence:

Your thoughts [provide] a concrete example of the unbelievable alienation, reductionist thinking, social ruthlessness and the arrogant ignorance of many conventional 'economists' concerning the nature of the world we live in... If the World Bank keeps you as vice president it will lose all credibility.

Furthermore, there's Summers's 2005 speech he gave before the National Bureau of Economic Research on Women and Science. You can find the full text of the speech here. In essence, Summers advanced the argument that women are underrepresented in the hard sciences because they're just not as smart as men and in the case that they are as smart, they're too unwilling to put in the long, hard hours away from their families. Anyone who's even vaguely feminist will no doubt be taken aback by such statements. What maddened me most about his speech was that his reasoning was fundamentally flawed and he used statements that are scientifically false to back up his claim that science venerated his prejudices.

Back in 2005 when Summers gave that speech, I was enrolled in an introductory course on Social Psychology (the one and only psych course I took in college). My professor at the time decided to make the Summers speech the subject of one day's lecture and we were asked to examine what he said in light of the basic psychological theories we'd been taught. Why? Because she thought it was pretty much BS. What stood out to me most from that speech was his truly maddening assertion that human beings are more likely to attribute human behavior and achievement to environmental causes than intrinsic/genetic ones:

First, most of what we've learned from empirical psychology in the last fifteen years has been that people naturally attribute things to socialization that are in fact not attributable to socialization. We've been astounded by the results of separated twins studies. The confident assertions that autism was a reflection of parental characteristics that were absolutely supported and that people knew from years of observational evidence have now been proven to be wrong. And so, the human mind has a tendency to grab to the socialization hypothesis when you can see it, and it often turns out not to be true.

Anyone who's taken an intro to psychology course or has even a basic familiarity with the subject will immediately recognize that the above statement is utterly ridiculous and patently false. Why? For many years, Psychologists have known about a phenomenon known as the Fundamental Attribution Error. In essence, this empirically verified and universally accepted theory states that people tend to attribute the behavior of others to their disposition and their own behavior to environmental factors. For instance, if on your way home to work one day there's a driver on the road who cuts you off and speeds ahead, people tend to think the driver is overly aggressive, a jerk, or perhaps worse. However, if you yourself behave that way, you probably have several possible explanations: you're late picking up your kids from soccer practice, just had a really stressful day at work, etc. Or let's think about this a bit more broadly. For many, many years people believed that persons of African, Latino, or even Irish decent were inherently less intelligent and/or lazier than whites, native-born Americans, protestants, etc. Does our long history of ignorance on racial and ethnic issues, which is certainly far from over, illustrate a natural human tendency towards attributing environmental causes to human behavior over intrinsic ones? Or how bout our long history of ignorance as humans, at least in the west, with regard to the status of women? To anyone willing to sit and think about what Summers said for just a second, they'd realize it's totally bogus.

From my incredibly influential and wide-reaching platform that is this blog, I offer this advice to Obama: don't pick Larry Summers. A neoliberal sexist who advocates dumping toxic waste in poor countries is not change we can believe in.

Senate updates

First of all, way to go Jeff Merkely on becoming Democrat #57 (including Sanders and Lieberman) in the U.S. Senate! I've heard good things about this guy, and of course, the closer we get to a Filibuster proof majority the better, particularly on vital issues like Universal Healthcare and the Employee Free Choice Act.

Also, if anyone is as obsessed with the Minnesota Senate race as I am, you can come right here to my blog to get the most up to date information on the status of the race anywhere on the web. How can I make such a strong claim? Because I've provided a link right here to the Minnesota Secretary of State's website, which is where everybody else its getting their information.

Lastly, Norm Coleman is a total jerk: Go Franken!

Congratulations!

Despite all of my problems with Barack Obama, I, like so many people around the world, am absolutely thrilled that he won and will be our 44th president. I'm also happy that the Democrats expanded their majority in the House and finally knocked off New England's last Republican congressman, Chris Shays, in my home state of Connecticut. And of course it's great that the Democrats have expanded their majority in the Senate as well, and I've still got my fingers crossed that in the face of steep odds, Franken can win in a recount in Minnesota, that Jim Martin can win if in fact a runoff is held in Georgia, as appears likely, and that Merkely can pull off a win in Oregon once they finally finish counting the votes. Does anyone know, by the way, why it's taken so long to tabulate the votes in Oregon?

The true purpose of this post, though, is to congratulate the people that helped make last night's Democratic victory possible. In particular, I'm talking about the many people who volunteered some of their time and energy to hit the campaign trail, most importantly, my friends from the good old UFCW, Taylor Leake, who spent last week canvassing for Obama in Virginia, Scott Johnson, who campaigned last week for Obama in New Hampshire, and Nate Banditelli (Nate, do you have a blog?), who pounded the pavement for Obama out in Nevada. Not coincidentally, Obama won in all three states, and was the first Democratic presidential candidate to win Nevada since 1996 and the first Democrat to win Virginia since LBJ in 1964. Way to go guys! I owe all of you a beer the next time our paths cross.

Obama!

Let's all hope the polls and predictions are right and enough people turn out to vote to thwart the criminal Republican conspiracy to steal the election. Go vote! Obama!

Having some fun with Youtube

I'm a pretty big fan of youtube as I assume nearly all members of my generation are, and the best thing about youtube, I think, is that you can easily stumble upon very interesting political videos. And I'm not just talking about presidential debates and news clips from the mainstream media (which you can find of course) but also really great, independently compiled videos on topics not often discussed in the mainstream press and videos of speeches given by radicals and visionary thinkers. The sorts of things that many people, including myself, would not have access to if it were not for youtube. Plus, they're free!

As a result of youtube I've been able to watch several speeches and interviews by my favorite intellectual, Noam Chomsky. Below I've posted two clips of Noam Chomsky material that I've found over the past two days (the answer is yes, I am that much of a nerd that I do this in my spare time). The first is a speech on globalization and its impact on working people (contains only audio) titled "Class War: The Attack On Working People". The second is a debate on the Israeli occupation of Palestine between Noam Chomsky and Alan Dershowitz. I highly recommend both! Though Dershowitz, whose arguments largely consist of historical distortions, the application of double standards for Palestinian and Israeli behavior, and childish insults of Professor Chomsky, is a bit hard to stomach at times.

"Class War: The Attack On Working People" (1/6)


"Chomsky and Dershowitz Debate Israel and Palestine" (1/14)