Unemployment zoomed to 8.5 percent last month, the highest in a quarter-century, as employers axed 663,000 more workers and pushed the nation’s jobless ranks past 13 million. The hard times were only expected to get harder — a painful 10 percent jobless rate before long.

The current rate would be even higher — 15.6 percent — if it included laid-off workers who have given up looking for new jobs or have had to settle for part-time work because they can’t do any better. That’s the highest on record for that number in figures that go back to 1994.

In my paper, which was a rudimentary exercise in academic social research, I criticized an earlier article by Barry Bluestone in which he cites 10 primary reasons for income stratification. My primary criticism was that Bluestone ignored an important factor– work ethic. You can download a copy of my paper, “The Impact of Work Ethic on Income,” here.

Today’s unemployment report reminded me of this paper, because it raises yet another important factor– the economy at large. It would be interesting to research how an economic recession affects income stratification.

I’m essentially glad that Alan Greenspan was willing to admit that he was partly to blame for the state of the economy, and I hope Americans were listening, but Bill Moyers used Greenspan’s somewhat honorable admission of complicity to take potshots at Capitalism, and, for some reason, at Ayn Rand– a dead philosopher whose followers pose absolutely no threat to what passes for conservatism these days. If you read this blog regularly, you may remember that I blogged about Greenspan’s warning of a recession over a year and a half ago. My disappointment in Moyers’s commentary led me to send him the following e-mail through his website last night:

Dear Mr. Moyers,

I have enjoyed watching “The Journal” for a few years now, and I have a great deal of respect for you as a journalist. However, as I watch tonight while you criticize Alan Greenspan for his culpability in the current economic crisis (and, indeed, he is culpable), I’m somewhat disappointed.

Yes, it is true that Ayn Rand was one of Greenspan’s early influences; but, there really isn’t any reason not to believe Greenspan when he mitigates that influence, since his behavior as chairman of the Federal Reserve was far more meddlesome than Rand would have ever liked. Greenspan’s culpability in the current economic crisis actually stems from his involvement in President Bush’s “Ownership Society” initiative– launched several years ago– which, among other things, actively encouraged banks to make loans to riskier prospects. Don’t believe me? The White House website used to say this about “Expanding Homeownership":

In June 2002, President Bush issued America’s Homeownership Challenge to the real estate and mortgage finance industries to encourage them to join the effort to close the gap that exists between the homeownership rates of minorities and non-minorities.

The President also announced the goal of increasing the number of minority homeowners by at least 5.5 million families before the end of the decade.

Under his leadership, the overall U.S. homeownership rate in the second quarter of 2004 was at an all time high of 69.2 percent.

How was Greenspan involved? The rate of increase in the US money supply (the paper, not the gold) doubled from 2004 to 2007– the years in which we ramped up to the problems we’re now facing. That meant that banks had more money in their coffers and the President telling them just what they could do with it.

So, I’m glad you’re pointing a finger at Greenspan, but disappointed that you’re only using the occasion to attack a philosophy that he wasn’t very faithful in practicing in the first place. You may not like Ayn Rand’s philosophy, and that’s okay by me, but I expect you to put that aside when you’re doing your job. That is, if you want to remain credible. There are already too many people like Bill O’Reilly, who exploit the news for spite of opposing ideas. Let those guys have their fun– none of their viewers are really hearing anything they don’t already want to believe anyway.

Your characterization of Greenspan’s shock at the economic downturn was inaccurate as well. In his testimony before Congress, he said he was surprised by the breadth of the problem (a clip which you included in your commentary), but if you’d done a little more homework, you’d know that he was warning of a recession as early as the beginning of last year. The AP Story was picked up by the International Herald Tribune and other major news outlets, and, if you’re interested, you can read it here:

http://www.iht.com/articles/ap/2007/02/26/business/AS-FIN-ECO-Hong-Kong-US-Greenspan.php

It’s important that people like you find and report the truth in the difficult issues that we face. Nobody’s listening to me, but some people are listening to you, Mr. Moyers. That’s a privilege you should handle with care. It’s far more important that we know how we really got into this mess than it is to exploit the situation for short-term gain and a chance to badmouth our philosophical or political opponents.

My best regards to you, and my sincere hope that you’ll try a little harder next time.

Sincerely,
Scott Crumpler

Here we are, 4 years after the Katrina Disaster, and the first hurricanes to pose any serious threat to gulf coast communities have finally arrived. This was, of course, inevitable, and the networks seem to have been prepared for the day when such media frenzy could be justified again. As Hanna, Fay, and Gustav blew into town relatively uneventfully, I began to think the press might get over themselves. That their dripping wet lust for disaster would subside after the first few near misses. But now, with Ike ready to make landfall upon the gulf shores of Texas, I can see that I was wrong.

I’m out and about in Brooklyn today, and every commercial establishment I’ve entered has had a different network tuned to their flatscreen, and every one has featured wall-to-wall coverage of the hurricane. Could it be that the mass media truly cares about the fate of these communities? That would be easier to believe if they’d spent the last 4 years devoting a small measure of coverage to the changes (or lack thereof) in FEMA’s operating procedures, or the emergency preparations of at-risk communities. So, one is obliged to deduce that this year’s hurricane season is just another of what is (so vulgarly and appropriately) referred to in New York as an ad fuck.

But, is it the networks’ fault that disaster is so lucrative? We consumers don’t have to pay attention to this. But, we do, and so I think about the way in which we collectively affect the quality of content in the mass media… and the way it affects us. This insidious, clockwork orange in which we all thrive like parasites, souring the fruit that has so much potential. This society.

There are those, of course, who would blame the universally evil “corporation” for this. But those people are part of the problem. They shut their eyes to the fact that all corporations are run by living, breathing people. The establishments which are the instruments of their mass-marketed theater are just that– instruments. It always goes back to people. To human beings and what we’re capable of. To offer up any kind of scapegoat to replace recognition of that fundamental truth is, to my mind, just as insidious. In fact, maybe more.

I don’t want to spend too much time on this blog just talking politics. This site is supposed to be about the intersection of capitalism and culture. But, it’s an election year, and, I suppose you just can’t get away from it. Lord knows I’ve spent enough time writing about the virtues of Ron Paul.

The fact that John McCain was able to come from so far behind in the primaries to achieve the position he’s in now makes me sad for the gullibility of so many Americans. The man is utterly, desperately, completely disingenuous. He talks about how much he sympathizes with people who disagree with him, which would be great, except that he’s so obviously full of crap. His advisers are lobbyists and sycophants who tell him that the policies he wants to work, will work. And how can anyone have fallen for the way he laid it on so thick during one of the Republican debates when he took his microphone off the podium and walked out to address the wife of a veteran who disagreed with the war? That stunt should have buried him. When a person is truly compassionate, these gestures emerge organically. When a person is deceitful and conniving, these gestures are contrived. And how can ANYONE not see this in John McCain?

Don’t forget how the late Tim Russert caught John McCain being disingenuous about the war earlier this year. The man is a hypocrite. Why are so many Americans buying his lines? About this most recent gaff, Huffington Post had this to say:

It was the type of foreign policy rhetorical blunder that has regularly plagued the McCain campaign and could have diplomatic ripples as well. Certainly the comment was meant in innocence. But for those predisposed to the notion that the U.S. is an increasingly arrogant international actor, the suggestion by a presidential candidate that, in this day and age, countries don’t invade one another – when the U.S. is occupying two foreign nations – does little to alleviate that negative perception.

I suppose the larger issue does, in fact, pertain to culture, if not capitalism: We’re a nation very often, very easily led by men of mediocrity.

The Wall Street Journal is reporting today that Barack Obama’s tax plan includes an increase in taxes on capital gains and income from investment dividends.

Sen. Obama outlined a plan Thursday to raise tax rates on capital gains and dividend income from 15% to 20% for individuals and families making more than $200,000 and $250,000, respectively. He also detailed a plan to levy payroll taxes on earnings above $250,000 at a rate between 2% and 4%, though that increase wouldn’t occur for at least a decade. Right now, payroll taxes, used to fund retirement benefits, are levied on income up to $102,000.

To put it simply, capital gains and dividends are the income you earn from your investments. With investors’ confidence in the market currently very low (The DOW closed yesterday more than 1600 points lower than it did a year ago.), it would seem counter-intuitive to give the people who have the money to invest any kind of disincentive to do so. And yet, a promise that 20% of any money they make will be taken from them will almost certainly do that very thing. Proposals like this demonstrate at least one of two things about Barack Obama:

1. He doesn’t understand basic economic principles. OR
2. He doesn’t care about the economy or how it affects people.

I happen to believe that Barack Obama does care about what happens to the American people, but it’s of little comfort since it suggests that he knows nothing about the economy or how to foster its growth. The same disincentive will undoubtedly be at work if he succeeds in raising payroll taxes, as it will encourage employers to refrain from giving their excelling employees raises in pay once they begin to approach the newly taxable bracket.

America is at a difficult crossroad this year. We aren’t electing a new president in a time of substantial prosperity or peace. The economy has been faltering for almost a year, and our current president seems to believe that nothing is wrong– that if he ignores the problem, historians will say he finished his term with a stable and flourishing economy. That we have chosen as the two major candidates to succeed him men who have no fundamental understanding of economics themselves is troubling. Whoever gets the job in November is going to have the problem of weak market confidence and tight-pursed employers when he assumes office in January. Americans should think long and hard about this, because we could turn this problem around in four years. Enduring it for another four, on the other hand, could be a disaster.

The July 28 issue of Time Magazine reported the results of a poll by the Rockefeller Foundation, which revealed that 85% of Americans believe the country is on the wrong track. That percentage climbs dramatically when the polling sample is limited to ethnic populations. More than half of Generation Y, according to the poll, had to borrow money just to survive last year. None of this is at all shocking to me, except when asked about the solution to these problems, respondents overwhelmingly agreed that Government Expansion is the answer. 70% said that government programs should be helping more people, and 82% said they favor public works projects.

This, in the face of 78% who believe their financial future is at greater risk now than in the past. I’m led to wonder if respondents were asked if they knew whether government was spending more money now than in the past. I would be very surprised if such a question didn’t reveal that Americans believe the government is actually spending less. The fact is that the United States Federal Budget has consistently grown throughout the past under 2 different administrations.

From 1992 to 2000, President Clinton’s budgets grew from 1.4 trillion to 1.8 trillion, and under President Bush, spending has further grown to 3.1 trillion dollars (for 2009). Where do Americans think this money is coming from? It’s coming from us. We’ve been funding the expansion of government steadily, and, now that we’re at the point where nearly all Americans have lost hope in the “American Dream,” what do we propose to do? The exact same thing we’ve been doing.

The problem, at least in part, seems to be one of perception. Americans think the government hasn’t been doing enough for them, when, in reality, it’s been doing more and more. And whether we put a Republican or a Democrat in the White House next year, it’s unlikely that anything will change in that regard. Why can’t more Americans embrace the concept of a broader exchange of ideas? If things are going so horribly wrong, why is this nation about to nominate two of the most homogenized, shapeless candidates to choose between to fix things?

What I’m asking, really, is why we can’t be more open to multiple candidates with more radical ideas. Anytime a candidate comes forward with a non-mainstream proposal for change, he’s called a crackpot, and he gets shut down by these very same people who are lamenting about the state of things. We keep going back to the same genetic pool of mediocrity for new leaders, and it feeds into Americans’ complacency. If we keep doing this, things will worsen. I’ve no doubt about that.

About that last bit concerning foreign military bases, I’m delighted. President Correa of Ecuador (described by The Economist as a, “youngish Catholic economist") may be a socialist, but at least he understands sovereignty. At least one implication of the approval of this Constitution would be that the United States would no longer be able to operate anti-drug missions from there, which is a plus. Although, there seems to be little else to get enthusiastic about. But, then, I (like almost certainly virtually every citizen in Ecuador), haven’t read all 444 articles.

This will be Ecuador’s 20th Constitution. It reminds me just how resilient (and mercifully brief) the Constitution of the United States is. We’ve been working from the same document for over 2 centuries, and have only once been faced with a serious risk of secession or collapse. Perhaps if we weren’t so fitfully busy minding the business of so many other countries around the world, they might be more inclined to examine our model, which, while flawed, has stood the test of time the way few other nations’ have.

Essentially, their article confirms many of my feelings about international welfare programs, but they also suggest that many African countries would be better off if their governments were simply allowed to crumble. The corruption in these governments stems from an oligarchy of elite families using as much as 40% of foreign assistance to buy weapons. Since, as they put it, “interstate conflicts are mercifully rare, those weapons are often used to crush domestic opposition – as has been happening in Zimbabwe.” So, the reasoning goes, we should stop paying for these governments to kill their own people and let these corrupt governments collapse. It’s a tough nut to swallow upon first consideration, but set sentimentality aside for a moment.

With the vast majority of these countries’ citizens living in poverty, and the only ones with any means being the corrupt elites who developed nations are supporting, is it at all likely that the people of these African states will ever be able to develop political structures that truly reflect an attempt to meet their unique needs? How will they overcome? The Zimbabwe example couldn’t be more pertinent. They held an election, and when the ruling party didn’t win outright, they started beating up the opposition.

If other nations, including the United States, stopped meddling in the affairs of these Third World African countries, it seems likely that the only people who would suffer anew would be the corrupt oligarchy currently prolonging the suffering of millions of people across the continent. That, I can live with.