Texas Longhorns with newborn calf in Bluebonnets

Texas Longhorns with newborn calf in Bluebonnets

Please note I have a new phone number...


Alan Maki

Alan Maki
Doing research at the LBJ Library in Austin, Texas

It's time to claim our Peace Dividend

It's time to claim our Peace Dividend

We need to beat swords into plowshares.

We need to beat swords into plowshares.

A program for real change...


What we need is a "21st Century Full Employment Act for Peace and Prosperity" which would make it a mandatory requirement that the president and Congress attain and maintain full employment.

"Voting is easy and marginally useful, but it is a poor substitute for democracy, which requires direct action by concerned citizens"

- Ben Franklin

Let's talk...

Let's talk...

Wednesday, October 21, 2009

The new normal

Following this essay appearing in the new on-line "People's World" are my comment and a comment from Rosalio Munoz, Betty Smith and others.

The new normal


by: Sam Webb

October 21 2009

Goldman Sachs and J.P. Morgan Chase are back to the "old normal." Profits are soaring - $3.2 billion and $3.6 billion respectively in the third quarter. Bonuses of $23 billion (yes, I got it right - 23,000,000,000 bucks) are in the pipeline for their managers and traders. Their field of competitors has thinned. And these leeches have morphed from "too big to fail" to "much too big" to fail.

In the meantime, the rest of us are fast-forwarding to the "new normal." Let me explain.

A year ago the old model of capitalist accumulation (profit making) and right-wing political governance, resting on the rise of finance, mountains of debt, record levels of inequality, unsustainable global economic imbalances, and successive bubbles in real and fictitious assets came crashing down - not with a whimper, but with a bang that triggered an economic tsunami.

The U.S economy imploded, throwing people out of their jobs and homes, closing family farms, evaporating pension funds and savings, shuttering more plants and factories, and devastating cities and towns. Much the same occurred elsewhere in the world.

A complete collapse of the economy was dodged, but the crisis was the worst since the Great Depression and isn't yet over. Unemployment levels, for example, are still rising. Reliable forecasts have joblessness climbing to nearly 11 percent officially in the United States.

Moreover, the prospects for a quick and robust recovery seem dim. Some economists, including mainstream thinkers, argue that economic stagnation is just as likely as a vigorous recovery.

In their view, the economy could operate at sub-normal levels in terms of growth, capacity utilization, employment, and income for an extended period of time. Or to put it differently, the tendencies toward stagnation are stronger than the tendencies toward full recovery.

Interestingly, this insight isn't new:

"It is an outstanding characteristic of the economic system in which we live that ... it seems capable of remaining in a chronic condition of sub-normal activity for a considerable period without any marked tendency either towards recovery or towards complete collapse."

The author is British economist John Maynard Keynes, the quote is from his masterpiece, "The General Theory of Employment, Interest, and Money", and the year is 1936. Keynes' insight, however, fell out of favor among traditional economists with the resumption of vigorous growth in the core capitalist countries following WW II.

Ironically, it was Marxist economists, and especially Paul Sweezy and Harry Magdoff, who further theorized this dynamic of U.S. capitalism during this period.

But in the wake of the present economic crisis, Keynes' notion of long-term sub-par economic performance is reentering the mainstream dialogue, but clothed with a new name - "the new normal."

In the "new normal" universe, conditions for a fresh round of capital accumulation and economic growth exist on the supply side of the equation. Because of the depth and scale of the current downturn, inefficient plant, equipment, and businesses have been destroyed, a plentiful pool of unemployed wage labor is now available, the price of labor power (wages/salaries) is cheaper, interest rates are low, and economic power is further concentrated and centralized in the hands of fewer industrial, service and financial corporations.

But on the demand side of the equation, conditions for accumulation (profit making) are far less favorable. Demand (consumption and investment, domestic and global), and again because of the economic crisis (evaporation of wealth, layoffs, foreclosures, wage implosion, mountains of debt to be paid off, etc.) is insufficient relative to the productive capacity of the global economy. And there are many reasons to think that this will not change in the near or medium term.

Indeed, it is hard to see where the new dynamism to power economic growth, employment, research, and broadly shared income gains will come from other than a government financed and directed economic development project. Such a project should be sustainable, green, maximize worker and community input and decision making, and dynamic enough to give a growth impulse to the whole economy.

An obvious objection that will arise among friends, as well as foes, is that the federal deficit is out of control now and a project of this size goes way beyond the scope of government and would represent a massive intrusion into people's lives.

The federal deficit is at record levels and there are dangers to be sure, but nothing as big as the danger (and costs) of long-term stagnation to the American people. Moreover, some of the financing could come from a reduction in the military budget and a shift of taxes to Wall Street and corporations.

As for government intrusion, federally directed development could encourage municipal and regional authorities to plan and organize major projects as well as channel investment dollars to small and medium sized businesses and worker/community cooperatives.

Whether a developmental project like this sees the light of day depends only in a small way on its feasibility and necessity. In a larger sense it rests on which of the competing sides (there are more than two on the political landscape) are able to frame the national conversation and win active popular majorities to its vision.

At this moment, political strength, moral authority, and public opinion tilts in the direction of the new administration and the broader movement that elected him, but not to the extent that it is able to win such radical economic reforms, assuming for the moment that everyone sees their necessity.

That task lies ahead.



Alan L. Maki
Lake-of-the-Woods Communist Club

While the next lesson or step as suggested is very important and should figure prominently in what we do, even more important is that Barack Obama and the Democrats be told in no uncertain terms that they will not be receiving our votes unless they come through with what people expected from them when they went to the polls in the last election.

These people have to be held accountable right here and now.

It is nothing short of criminal that Barack Obama and the Democrats have refused to legislate a moratorium on home foreclosures and evictions. There is precedent for this action. It is a moral imperative and a political responsibility to the American people who are being victimized by Wall Street coupon clippers, parasites and all kinds of rapacious vultures, not least of which are the mortgage bankers and the health insurance industry.

The majority of the people who went to the polls did so looking to end these dirty wars--- not ten or fifty or one-hundred years from now; but now.

This sentiment can be summed up and is reflected in: Not another death; not another dime.

The majority of the people in this country went to the polls in anticipation of peace and real progressive health care reform of people before profits; not Obama's bogus health insurance reform or any kind of a scam called "the public option." People have spoken very clearly, they want single-payer universal health care and a vastly expanded public health care sector that is publicly financed, publicly administered with delivery of health care services along the lines of VA or the Indian Health Service... neither of which Obama and the Democrats have fully funded as required by their constitutional mandate.

Let's get specific here.

People have real problems requiring real solutions.

Most Americans are feeling just the way this labor leader feels as quoted in the Boston Globe:

“It’s beyond belief to me,’’ said Robert Haynes, president of the Massachusetts AFL-CIO. While Obama and Congress inherited “a big mess’’ from Bush, Haynes said, “there aren’t any excuses anymore. If you can’t deliver health care, and you can’t deliver jobs, and if you can’t deliver [card check legislation] , and you can’t figure out how to take care of the working people of this great city and country, you don’t deserve to stay in office.’’

The time has come to stop talking in vague terms about "developing programs" for the "next election" and this so-called "coalition" without leaders and a "coalition" without a name.

The time has come to organize a "people's lobby" along the lines of "the people's front" with real people as its leaders and real people and organizations among the members and to go to Barack Obama and the Democrats and tell them:

End these dirty wars. Use the money to finance real health care reforms along the lines people have been demanding and anticipated they would be getting in return for their votes... instead of maintaining 800 U.S. military bases on foreign soil dotting the globe, create 800 public health care centers across the United States serving as the bases of support for the required 30,000 local community health care centers. This would create millions of jobs at good pay with good benefits with the health care workers employed in these centers becoming government employees.

We are talking about something so fundamental and basic to anything passing itself off as democracy--- accountability--- that a broad mobilization of the American people, especially the working class, in support of these demands will be a tremendous rebuff to reaction and the ultra-right posing threats to our now fragile democracy... such as it is; not at all cracked up to what it is claimed to be in the first place.

Working people who produce every bit of the tremendous wealth in this country have never had a seat at the table when it comes to the real decision-making and this needs to change; and change quickly if we are going to save ourselves from this road to ruin as capitalism is on the skids to oblivion taking us all along down the short bumpy, dangerous ride on the way to perdition.

Peace really is the key to health care reform... our call should be for public policies and programs--- including health care--- that put people before profits.

What is required is not coming up with issues and devising programs... the issues and the solutions are already part of the national dialog taking place in "the public square."

What needs to be done is bring together everyone and anyone and the organizations they belong to in a very broad people's front... or people's lobby... coalition... call it what you will.

Wall Street is our enemy.

No peace; no votes.
No health care; no votes.

Democracy is all about accountability.

Not only about accountability from Obama and the Democrats; but, there is the matter of accountability from those who claim to be the leaders of organizations from the labor unions to the Communist Party when it comes to understanding and articulating "What Needs To Be Done."

Alan L. Maki
Lake-of-the-Woods Communist Club

Posted by Alan L. Maki, 21/10/2009


Rosalio Munoz
Board Member
Los Angeles Workers' Center

One of the next steps following up on the thrust of the article is developing a legislative agenda pointing in this direction for the 2010 elections. Such a program should appropriately identify and project itself as solidly with the union movement. It should aim to build the biggest, broadest participation in the ongoing legislative struggles and all aspects of the election. Perhaps a certain focus on young workers.

Posted by Rosalio Munoz, 21/10/2009


Jim Lane
Writer for People's World

•This commentary comes just as we Texas communists finished, for the time being, posting our programmed lessons on basic economics. If our assumptions are correct, then it seems that even a massive government intervention on the side of jobs and workers' rights would only be a stopgap in capitalism's staggering downturn.

A demand that really seems worth re-inventing is "30 for 40 with no cut in pay" to get the workweek lowered to 30 hours while maintaining present pay scales. Is there any other serious idea that would address long-term unemployment? Most of the missing jobs either went overseas or were eaten by automation. At any rate, they aren't coming back.

Productivity hit 6.4% last quarter, and has generally risen every quarter since it's been recorded. Albert Einstein is supposed to have said in 1934, "Only a fraction of the abvailable human labor in the world is now needed for the production of the total amount of consumption goods necessary to life. Under a completely laissez-faire economic system, this fact is bound to lead to unemployment."

Let's cut the workweek!
Posted by Jim Lane, 21/10/2009


Betty Smith
CPUSA and International Publishers

•Generally good, but it should say "some" Marxist
economists....Lumer, Perlo et al didn't do this...and they
get little notice or credit for writings that still stand up
well. We've even had requests to reprint Lumer's
"Poverty, Its Roots and Future" as one of the best
explanations ever, even though his dollar-and-cents
figures are of course out of date.

Also, when do we develop a program to meet this
crisis? General descriptions don't put anyone to work.

Posted by Betty Smith, 22/10/2009

And this is from the Associated Press...


Alan L. Maki

•I find this particular comment to be very interesting and note that it has apparently stymied further discussion on Sam Webb's most important article concerning "the new normal" which is Wall Street speak for its current campaign to use this capitalist economic crisis as an excuse to drive down the wages and over-all standard of living of the working class with Barack Obama's and the Democrat's help.

I know a lot of Terrie's; I don't know if I know this particular Terrie who posted this comment, or not:

"•For the record, I know communists. I work with communists and Alan Maki is no communist.

Posted by Terrie, 21/10/2009 11:01pm (11 hours ago) "

What I find interesting is that Terrie would post something like this without taking issue with the ideas and point-of-view being expressed.

I have circulated this article by Sam Webb quite widely as the Editor of PW requests be done with articles from the new People's World because I think this article merits a great deal of discussion.

In "Terrie's" eyes I may not be a "Communist" like the communists she knows.

But, perhaps "Terrie" would like to explain just what me being a communist--- or not, in her view--- has to do with saving the St. Paul Ford Twin Cities Assembly Plant and two-thousand to 2,500 jobs in the process?

After all, whether or not I am a communist ---in "Terrie's" opinion; I am not the one implementing economic policies in this country with the intent of establishing "the new normal" as a way of life for working people for many years to come. Nor, do I make any of the decisions involved in closing mines, mills and plants and tossing workers by the millions out into the streets. Nor do I make any of the decisions to reduce the work week of employees from 40 hours to 30 hours with an even more drastic cut in pay and loss of all benefits including health care which many public employees at township, county, city and state governments are being subjected to.

I have sent "Terrie's" comment and this essay by Sam Webb and all the comments along to a number of Minnesota state legislators and to a number of people in the Minnesota Democratic Farmer-Labor Party and the casino managements we are fighting in our efforts to win living wages and a smoke-free working environment with the full protections other workers enjoy under state and federal labor laws ... I am sure that "Terrie's" comments will enable them to sleep tonight.

And, hopefully, whether or not I am a Communist--- in "Terrie's opinion"--- will not deter her from becoming a "warrior for justice" fighting for peace, real health care reform and the rights and improved livelihoods and standard of living for all working people...

And for socialism as an alternative to this rotten capitalist system now on the road to oblivion--- which has Wall Street dragging us down the very short, bumpy, winding and dangerous road to perdition where we will rest in a "new normal" state.

At first I didn't think that "Terrie's" comment had anything to do with Sam Webb's essay on "the new normal;" on second thought, perhaps "Terrie's" comment has a great deal to do with this essay on "the new normal."

And, speaking of the "profits in the pipeline" which Sam Webb brings forward in his commentary and analysis of "the new normal;" I have a suggestion for another article for the People's World.

It would be nice to see an article about the Enbridge Pipeline... the huge pipeline that will carry the oil in the tar-sands of Alberta to the Great Lakes region of the United States for processing... because, in addition to the environmental concerns raised in the PWW, there is the matter of lack of enforcement of affirmative action for Native American workers in hiring for this pipeline construction... might this "new normal" include not enforcing affirmative action guidelines for hiring, too?

"Terrie;" for the record--- I will let the views I express speak for me as to what kind of "communist" I am... did you ever consider I just might not want to be the kind of "communist" like the "communists" you know and work with?

Posted by Alan L. Maki, 22/10/2009

Higher jobless rates could be new normal

By TOM RAUM (AP) – 2 days ago

WASHINGTON — Even with an economic revival, many U.S. jobs lost during the recession may be gone forever and a weak employment market could linger for years.

That could add up to a "new normal" of higher joblessness and lower standards of living for many Americans, some economists are suggesting.

The words "it's different this time" are always suspect. But economists and policy makers say the job-creating dynamics of previous recoveries can't be counted on now.

Here's why:

_ The auto and construction industries helped lead the nation out of past recessions. But the carnage among Detroit's automakers and the surplus of new and foreclosed homes and empty commercial properties make it unlikely these two industries will be engines of growth anytime soon.

_ The job market is caught in a vicious circle: Without more jobs, U.S. consumers will have a hard time increasing their spending; but without that spending, businesses might see little reason to start hiring.

_ Many small and midsize businesses are still struggling to obtain bank loans, impeding their expansion plans and constraining overall economic growth.

_ Higher-income households are spending less because of big losses on their homes, retirement plans and other investments. Lower-income households are cutting back because they can't borrow like they once did.

That the recovery in jobs will be long and drawn out is something on which economists and policy makers can basically agree, even as their proposals for remedies vary widely.

Retrenching businesses will be slow in hiring back or replacing workers they laid off. Many of the 7.2 million jobs the economy has shed since the recession began in December 2007 may never come back.

"This Great Recession is an inflection point for the economy in many respects. I think the unemployment rate will be permanently higher, or at least higher for the foreseeable future," said Mark Zandi, chief economist and co-founder of Moody's Economy.com.

"The collective psyche has changed as a result of what we've been through. And we're going to be different as a result," said Zandi, who formerly advised Sen. John McCain, R-Ariz., and now is consulted by Democrats in the administration and in Congress,

Even before the recession, many jobs had vanished or been shipped overseas amid a general decline of U.S. manufacturing. The severest downturn since the Great Depression has accelerated the process.

Many economists believe the recession reversed course in the recently ended third quarter and they predict modest growth in the nation's gross domestic product over the next few years. Yet the unemployment rate is currently at a 26-year high of 9.8 percent — and likely to top 10 percent soon and stay there a while.

"Many factors are pushing against a quick recovery," said Heidi Shierholz, an economist at the labor-oriented Economic Policy Institute. "Things will come back. But it's going to take a long time. I think we will likely see elevated unemployment at least until 2014."

At best, many economists see an economic recovery without a return to moderate unemployment. At worst, they suggest the fragile recovery could lose steam and drag the economy back under for a double-dip recession.

"We will need to grind out this recovery step by step," President Barack Obama said earlier this month.

Obama and congressional Democrats are having a hard time agreeing on how to keep the recovery going and help millions of unemployed workers — short of another round of stimulus spending amid rising voter alarm over soaring federal deficits.

So far, they've been unable to win even a simple three-month extension of unemployment insurance for people in states with jobless rates above 8.5 percent.

The extension easily passed the House earlier this month but is bogged down in the Senate over disputes over which states would get the funds. Hundreds of thousands of people have already lost their benefits or are about to lose them.

The White House credits the president's $787 billion stimulus plan passed in February for keeping job losses from becoming even worse. Since Obama took office in January, the economy has lost 3.4 million jobs.

Republicans argue that the stimulus program has not worked as a job producer and is a waste of tax money. And last week, the U.S. Chamber of Commerce launched a multimillion advertising campaign to celebrate small business entrepreneurs — and to argue that further government intervention will not spur permanent job growth.

Chamber leaders called for creation of more than 20 million new private-sector jobs over the next decade, saying it's needed to replace jobs lost in the recession and to keep pace with population growth.

"The government can support a few jobs in the short-run" while free enterprise is the only system that can create 20 million of them, said Thomas Donohue, the chamber president.

To many economists, such a goal seems unreachable given today's altered economic landscape.

"It's a new normal that U.S. growth is going to be anemic on average for years. Right now, the prospect is bleak for anything other than a particularly high unemployment rate and a weak jobs-creating machine," said Allen Sinai, president of Decision Economics Inc. He says he doubts that unemployment will dip below 7 percent anytime soon.

Many economists consider a jobless rate of 4 to 5 percent as reflecting a "full employment" economy, one in which nearly everyone who wants a job has one. After the 2001 recession the rate climbed to 5.8 percent in 2002 and peaked at 6.3 percent in 2003 before easing back to 4.6 percent for 2006 and 2007.

Will unemployment ever get back to such levels?

"I wouldn't say never. But I do think it's going to be a long time," said Bruce Bartlett, a former Treasury Department economist and the author of the book "The New American Economy: The Failure of Reaganomics and a New Way Forward."

"The linkage between growth in the economy and growth in jobs is not what it was. I don't know if it's permanently broken or temporarily broken. But clearly we are not seeing the sort of increase in employment that one would normally expect," said Bartlett.

Copyright © 2009 The Associated Press. All rights reserved.