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	<title>Larvatus Prodeo &#187; Robert Reich</title>
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	<description>Life, Culture and Politics from BrisVegas</description>
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		<title>Tar sands, Obama and oil spills</title>
		<link>http://larvatusprodeo.net/2010/06/17/tar-sands-and-oil-spills/</link>
		<comments>http://larvatusprodeo.net/2010/06/17/tar-sands-and-oil-spills/#comments</comments>
		<pubDate>Wed, 16 Jun 2010 15:34:59 +0000</pubDate>
		<dc:creator>Brian</dc:creator>
				<category><![CDATA[Climate change]]></category>
		<category><![CDATA[barack obama]]></category>
		<category><![CDATA[barry brook]]></category>
		<category><![CDATA[Christiana Figueres]]></category>
		<category><![CDATA[Copenhagen climate change conference 2009]]></category>
		<category><![CDATA[Gulf of Mexico oil spill]]></category>
		<category><![CDATA[James Hansen]]></category>
		<category><![CDATA[Maude Barlow]]></category>
		<category><![CDATA[Paleocene–Eocene Thermal Maximum (PETM)]]></category>
		<category><![CDATA[PETM]]></category>
		<category><![CDATA[Robert Reich]]></category>
		<category><![CDATA[Storms of my Grandchildren]]></category>
		<category><![CDATA[tar sands]]></category>
		<category><![CDATA[the venus syndrome]]></category>

		<guid isPermaLink="false">http://larvatusprodeo.net/?p=13349</guid>
		<description><![CDATA[That image, which you can easily find by googling, is perhaps becoming emblematic of tar sands mining. At Treehugger in 2008 this: Environmental Defense has called Alberta’s tar sands ‘the most destructive project on earth’, but perhaps the UN’s senior [...]]]></description>
			<content:encoded><![CDATA[<p><img src='http://larvatusprodeo.net/wp-content/uploads/2008/08/tar-sandslphp.jpg' alt='tar-sandslphp.jpg' /></a></p>
<p>That image, which you can easily find by googling, is perhaps becoming emblematic of tar sands mining. At <a href="http://www.treehugger.com/files/2008/11/canadian-tar-sands-are-like-mordor.php" target="_blank">Treehugger in 2008</a> this:</p>
<blockquote><p>Environmental Defense has called Alberta’s tar sands ‘the most destructive project on earth’, but perhaps the UN’s senior advisor on water, Maude Barlow, says it best. After a recent bus and helicopter tour of a tar sands operation in Fort McMurray she had one word to describe what she saw: Mordor.</p>
<p>For those not up on the geography of Tolkein’s Middle-earth, or even Peter Jackson’s movie adaptation of Lord of the Rings, Mordor refers to the nearly barren, devastated, stinking land wherein, beyond the Black Gate, lies Sauron’s fortress of Barad-dûr and the fires of Mount Doom&#8230;</p></blockquote>
<p><a href="http://jcwinnie.biz/wordpress/?p=2577" target="_blank">This post tells us</a> that in ten years  the mining in Alberta will encompass an area as large as Florida.</p>
<p>Recently <a href="http://climateprogress.org/2010/05/20/tar-sands-top-oil-import-bp-cera-ceres-report/" target="_blank">Climate Progress told us</a> that Canada’s large reserves of tar sands are poised to become the number one source of US crude oil imports in 2010, and by 2030 oil sands imports could increase to account for 20-36% of US oil product imports (crude and refined) from the 2009 level of 8%.</p>
<p>Has Barack Obama gone bananas?</p>
<p><span id="more-13349"></span>In January 2009, when Obama was preparing to take over, <a href="http://www.nytimes.com/2009/01/07/business/07oilsands.html?_r=1" target="_blank">this article</a> came within my ken via <a href="http://www.climateark.org/shared/reader/welcome.aspx?linkid=114823" target="_blank">Climate Ark</a>.</p>
<blockquote><p>The oil that is extracted from Canadian dirt is being portrayed as saving America from energy dependence on the unstable Middle East, or an environmental catastrophe in the making — depending on the perspective.</p></blockquote>
<p>I thought at the time that it would be a test as to whether Obama was serious about climate change if he signed up to import oil from tar sands. On this basis he is a big FAIL.</p>
<p>One of the problems at Copenhagen was that the US brought far too little to the table. A target for 2020 equivalent to 3% down from 1990 levels for one of the highest per capita emitters bespeaks a laggard rather than a leader. China was able to say that the West wasn&#8217;t serious about their responsibilities, and until they were the Chinese wouldn&#8217;t sign up to quantitative cuts.</p>
<p>At the same time Obama needed the Chinese to sign up to quantitative cuts if he was going to have any chance of getting his legislation through the Senate. <a href="http://www.guardian.co.uk/commentisfree/cif-green/2009/dec/23/china-climate-change-transparency-fears" target="_blank">This article</a> is a sample of the tough games that were being played. When cornered China would always fall back on the legacy issue, as it did when confronted head-on out of frustration by Angela Merkel. The West&#8217;s emissions got us to where we are, so it&#8217;s up to the West to fix it.</p>
<p>These irreconcilable positions on the part of the two super-emitters are still unresolved. Until they are, the Europeans won&#8217;t increase the ambition of their targets, serious consideration won&#8217;t be given to the G77 desire for a 1.5C limit and progress will be limited to action on specific programs such as REDDS and financial assistance to poor countries for adaptation.</p>
<p>Generally speaking all the conflicts that were problematic at Copenhagen are unresolved. After the latest round of talks just concluded in Bonn the main difference is that people are talking to each other rather than shouting across an abyss. The best summary I&#8217;ve seen so far is from <a href="http://www.bbc.co.uk/blogs/thereporters/richardblack/2010/06/from_the_un_climate_talks.html" target="_blank">BBC correspondent Richard Black</a> on the second last day of the talks. Amongst the tale of division there is this:</p>
<blockquote><p>it&#8217;s a sign of how fast things have turned around since Barack Obama&#8217;s election that some delegates are saying the US is now a bigger obstacle than it was under George W Bush.</p></blockquote>
<p>New <a href="http://news.bbc.co.uk/2/hi/science_and_environment/10276225.stm" target="_blank">UN climate chief Christiana Figueres</a> sees the need to develop tranparency and trust. To achieve this  she seems to favour delivering on specific projects, of building the wall brick by brick rather than a comprehensive legally-binding, ambitious, fair and balanced agreement. But many developing countries see such an agreement as absolutely essential. From Bangladesh:</p>
<blockquote><p>&#8220;Unfortunately, we couldn&#8217;t deliver at Copenhagen; and if we can&#8217;t deliver at Cancun&#8230; it will be unfortunate, it will be tragic, it will be a holocaust.&#8221; </p></blockquote>
<p>To me, leadership from and a resolution of the differences between China and the US are the key to real progress. Such progress should inlude taking the request for more ambitious targets seriously. This is a matter of an existential threat for the small island states, for example.</p>
<p>Obama doesn&#8217;t seem to appreciate how far off the pace his country is.</p>
<p>Meanwhile we must deal with James Hansen&#8217;s contention that tar sands are seriously a no-go area. In his book, <em>Storms of my Grandchildren</em>, Hansen devotes a whole chapter to the Venus syndrome, the notion that a runaway greenhouse effect could boil the oceans dry leaving the planet unsuitable for life of any kind.</p>
<p>Hansen ends the chapter thus:</p>
<blockquote><p>After the ice is gone,* would the Earth proceed to the Venus syndrome, a runaway greenhouse effect that would destroy all life on the planet, perhaps permanently? While that is difficult to say based on present information, I&#8217;ve come to conclude that if we burn all the reserves of oil, gas, and coal, there is a substantial chance we will initiate the runaway greenhouse. If we burn the tar sands and tar shale, I believe the Venus syndrome is a dead certainty.</p></blockquote>
<p>(*Hansen says that the Antarctic ice sheet formed 34mya when CO2 levels fell to about 450ppm, plus or minus 100.  He says it would be &#8220;exceedingly foolish and dangerous to allow carbon dioxide to approach 450ppm.&#8221;)</p>
<p>I&#8217;ve been wanting to post on this topic, but for a non-scientist it is a challenging area to get into. I respect Hansen&#8217;s science, and his opinions based on the science. My only query is that he seemed to me to rely critically on one piece of research, which was the clincher for him, about what happened in the <a href="http://en.wikipedia.org/wiki/Paleocene-Eocene_Thermal_Maximum" target="_blank">Paleocene–Eocene Thermal Maximum (PETM)</a> 55 million years ago. But the critical factor is the release of methane hydrates (post also forthcoming eventually) and that is all too plausible.</p>
<p>This is the paragraph before the one quoted above:</p>
<blockquote><p>The paleoclimate record does not provide a case with a climate forcing of the magnitude and speed that will occur if fossil fuels are all burned. Models are nowhere near the stage at which they can predict reliably when major ice sheet disintegration will begin. Nor can we say how close we are to methane hydrate instability. But these are questions of when, not if. If we burn all the fossil fuels, the ice sheets almost surely will melt entirely, with the final sea level rise about 75 meters (250 feet), with most of that possibly occurring within a time scale of centuries. Methane hydrates are likely to be more extensive and vulnerable now than they were in the early Cenozoic. It is difficult to imagine how the methane clathrates could survive, once the ocean has had time to warm. In that event a PETM-like warming could be added on top of the fossil fuel warming.</p></blockquote>
<p>Now <a href="http://bravenewclimate.com/2010/05/09/clarons-despair/" target="_blank">Barry Brook at BraveNewClimate</a> has addressed the issue specifically in the terms put by Hansen. Go read it. Barry considers that there&#8217;s a better than 1% chance of delivering the Venus syndrome if we continue burning fossil fuels with abandon. That is serious and time for some rational risk management.</p>
<p>No-one is suggesting that burning a bit of fuel from tar sands will destroy life on the planet. But the US has started on a very dangerous addiction.</p>
<p>In his address from the Oval Office today Obama pointed out that the US has 2% of the world&#8217;s oil reserves and 20% of consumption. Something has to change. He said:</p>
<blockquote><p>The time to embrace a clean energy future is now.</p></blockquote>
<p>There was local coverage on Radio National <a href="http://www.abc.net.au/worldtoday/content/2010/s2928319.htm" target="_blank">here</a> and <a href="http://www.abc.net.au/worldtoday/content/2010/s2928326.htm" target="_blank">here.</a></p>
<p>As far as I can see he has three aims. Firstly, to let people know he is in control of the oil spill in the Gulf (really?) Secondly, could he please have his climate change bill passed by the Senate? And thirdly, it&#8217;s time we all got really serious about climate change.</p>
<p>But did he address the challenge in terms that it warranted? Robert Reich <a href="http://www.csmonitor.com/Money/Robert-Reich-s-Blog/2010/0616/Obama-s-Oval-Office-address-A-missed-opportunity" target="_blank">thinks not:</a></p>
<blockquote><p>Whether it’s Wall Street or health insurers or oil companies, we are approaching a turning point. The top executives of powerful corporations are pursuing profits in ways that menace the nation. We have not seen the likes not since the late nineteenth century when the “robber barons” of finance, oil, and the giant trusts ran roughshod over America. Now, as then, they are using their wealth and influence to buy off legislators and intimidate the regions that depend on them for jobs. Now, as then, they are threatening the safety and security of our people.</p>
<p>&#8230;</p>
<p>Our President must tell is like it is — not with rancor but with the passion and conviction of a leader who recognizes what is happening and rallies the nation behind him.</p></blockquote>
<p>Reich says:</p>
<blockquote><p>The man who electrified the nation with his speech at the Democratic National Convention of 2004 put it to sleep tonight. President Obama’s address to the nation from the Oval Office was, to be frank, vapid.</p></blockquote>
<p>Oh dear!</p>
<p><a href="" target="_blank"></a></p>
<p><a href="" target="_blank"></a></p>
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		<title>Obama&#039;s real world economic experiment</title>
		<link>http://larvatusprodeo.net/2010/01/26/obamas-real-world-economic-experiment/</link>
		<comments>http://larvatusprodeo.net/2010/01/26/obamas-real-world-economic-experiment/#comments</comments>
		<pubDate>Tue, 26 Jan 2010 03:20:44 +0000</pubDate>
		<dc:creator>Mark Bahnisch</dc:creator>
				<category><![CDATA[Economics]]></category>
		<category><![CDATA[International]]></category>
		<category><![CDATA[Markets]]></category>
		<category><![CDATA[USA]]></category>
		<category><![CDATA[andrew leonard]]></category>
		<category><![CDATA[Australian politics]]></category>
		<category><![CDATA[barack obama]]></category>
		<category><![CDATA[blue dog democrats]]></category>
		<category><![CDATA[Brad DeLong]]></category>
		<category><![CDATA[Coalition]]></category>
		<category><![CDATA[deficits]]></category>
		<category><![CDATA[Evan Bayh]]></category>
		<category><![CDATA[firedoglake]]></category>
		<category><![CDATA[G20]]></category>
		<category><![CDATA[GFC]]></category>
		<category><![CDATA[global financial crisis]]></category>
		<category><![CDATA[growth]]></category>
		<category><![CDATA[herbert hoover]]></category>
		<category><![CDATA[ideology]]></category>
		<category><![CDATA[Liberal Party]]></category>
		<category><![CDATA[nate silver]]></category>
		<category><![CDATA[Paul Krugman]]></category>
		<category><![CDATA[Politics]]></category>
		<category><![CDATA[recession]]></category>
		<category><![CDATA[Robert Reich]]></category>
		<category><![CDATA[Salon]]></category>
		<category><![CDATA[spending freeze]]></category>
		<category><![CDATA[stimulus]]></category>
		<category><![CDATA[US politics]]></category>

		<guid isPermaLink="false">http://larvatusprodeo.net/?p=12357</guid>
		<description><![CDATA[Responding to the loss of Ted Kennedy&#8217;s Massachussetts Senate seat to Republican Scott Brown, Barack Obama is set to announce a three year discretionary spending freeze. (Note that military spending is apparently compulsory not discretionary.) Nate Silver at FiveThirtyEight.Com thinks [...]]]></description>
			<content:encoded><![CDATA[<p>Responding to the <a href="http://larvatusprodeo.net/2010/01/20/ted-kennedys-massachusetts-senate-seat-lost-the-politics-of-anti-politics/">loss</a> of Ted Kennedy&#8217;s Massachussetts Senate seat to Republican Scott Brown, Barack Obama is set to announce a three year discretionary spending freeze. (Note that military spending is apparently compulsory not discretionary.)</p>
<p>Nate Silver at <a href="http://www.fivethirtyeight.com/2010/01/white-houses-brain-freeze.html">FiveThirtyEight.Com</a> thinks that the move is, politically speaking, a &#8220;brain freeze&#8221;. He also queries &#8220;the wisdom of curtailing government spending in the middle of a massive consumption deficit&#8221;.</p>
<p>Obama&#8217;s move will placate &#8216;Blue Dog Democrats&#8217;, including champion deficit hawk Evan Bayh of Indiana, whose seat is looking shaky. In a broader sense, it&#8217;s further <a href="http://larvatusprodeo.net/2010/01/26/bernankes-confirmation-in-doubt/">evidence of the triumph of politics over economics</a>, albeit in a somewhat different register; a return to a sort of pre-Keynesian mindset, or Maggie Thatcher&#8217;s petit bourgeois rhetoric of &#8216;household budgets&#8217; without the monetarism.</p>
<p><a href="http://news.firedoglake.com/2010/01/25/obama-announcing-three-year-discretionary-spending-freeze/">David Dayen</a>:</p>
<blockquote><p>Obama is basically saying that the stimulus fixed the economy, that there will be no further government support measures and that he’ll govern like a hybrid of John McCain and Herbert Hoover for the rest of his term to curry favor with the deficit maniacs.</p></blockquote>
<p><a href="http://www.salon.com/tech/htww/2010/01/25/obamas_anti_stimulus/index.html">Andrew Leonard at <i>How The World Works</i></a>:</p>
<blockquote><p>If ever there was a time to pull out the old Karl Marx chestnut, &#8220;History repeats itself, first as tragedy, second as farce,&#8221; that moment is now. Prominent members of Obama&#8217;s own administration have warned against repeating the errors of 1937, namely, Franklin Roosevelt&#8217;s decision to cut spending and balance the budget too quickly, thus strangling a nascent recovery from the Great Depression. But with the U.S. economy far from healthy, the president has decided, once again, to bow to the political winds and make the deficit priority number one.</p></blockquote>
<p>It&#8217;s also the effective decoupling of the US from the G20 stimulus agenda, and further proof that America is mired in the politics of domestic decline. What happens to a globalised economy when the globalisers opt out?</p>
<p>Incidentally, this is additionally the sort of policy u-turn the Coalition in Australia have long been advocating. If further sclerotic growth, or even a double dip recession in America, is the result, it won&#8217;t be without its ramifications for the political debate here.</p>
<p><b>Update</b>: <a href="http://www.salon.com/opinion/feature/2010/01/25/obama_panicking/index.html">Robert Reich</a> on how Obama&#8217;s political panic could ruin the economy.</p>
<p><b>Update</b>: <a href="http://www.salon.com/news/opinion/feature/2010/01/25/obama_populism">Michael Lind</a>.</p>
<p><b>Update</b>: Brad DeLong: <a href="http://delong.typepad.com/sdj/2010/01/this-is-such-a-disaster-in-the-making-ii.html">This is such a disaster in the making.</a></p>
<p><b>Update</b>: Krugman: <a href="http://krugman.blogs.nytimes.com/2010/01/26/obama-liquidates-himself/">Obama Liquidates Himself.</a></p>
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		<title>Obama, healthcare and social democracy</title>
		<link>http://larvatusprodeo.net/2009/08/18/obama-healthcare-and-social-democracy/</link>
		<comments>http://larvatusprodeo.net/2009/08/18/obama-healthcare-and-social-democracy/#comments</comments>
		<pubDate>Tue, 18 Aug 2009 01:03:41 +0000</pubDate>
		<dc:creator>Mark Bahnisch</dc:creator>
				<category><![CDATA[Health]]></category>
		<category><![CDATA[Medicine]]></category>
		<category><![CDATA[Politics]]></category>
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		<category><![CDATA[death panels]]></category>
		<category><![CDATA[Democrats]]></category>
		<category><![CDATA[health insurance]]></category>
		<category><![CDATA[healthcare]]></category>
		<category><![CDATA[ideology]]></category>
		<category><![CDATA[life chances]]></category>
		<category><![CDATA[public option]]></category>
		<category><![CDATA[Robert Reich]]></category>
		<category><![CDATA[social democracy]]></category>
		<category><![CDATA[social inequality]]></category>
		<category><![CDATA[structural inequality]]></category>
		<category><![CDATA[us congress]]></category>

		<guid isPermaLink="false">http://larvatusprodeo.net/?p=9550</guid>
		<description><![CDATA[Reports that Barack Obama is prepared to concede the public option in the health care bill (with some perhaps vague hope that it might be reinserted in a conference between the House and Senate on reconciling inconsistent provisions) expose the [...]]]></description>
			<content:encoded><![CDATA[<p>Reports that Barack Obama is prepared to <a href="http://firedoglake.com/2009/08/17/po-or-no/">concede</a> the <a href="http://robertreich.blogspot.com/2009/08/public-options-last-stand.h">public option in the health care bill</a> (with some perhaps vague hope that it might be reinserted in a conference between the House and Senate on reconciling inconsistent provisions) expose the difficulty any President faces in securing even an <a href="//www.guardian.co.uk/commentisfree/2009/aug/16/nhs-us-healthcare">approximation</a> to what are basic and threshold social democratic reforms in the United States.</p>
<p>Leaving aside the obvious attempt to articulate the health care plan with &#8216;right to life&#8217; scaremongering through all the nonsense about &#8216;death panels&#8217;, we still have a textbook example of how culture and ideology can cause blindness to collective interests (and indeed self interest). No amount of rhetoric about the possibilities of self actualisation and choice over life goals has any meaning if there is sustained structural inequality in health outcomes (and therefore life chances), and if there is no real attempt to ameliorate this inequality through collective action by the state.</p>
<p>At <a href="http://globalsociology.com/2009/08/14/social-stratification-and-the-american-way/">The Global Sociology Blog</a>, SocProf hones in on the reasons for the absence of any discussion of, or even awareness of, class inequality in American culture and politics.</p>
<p>Obama now faces the familiar dilemma of attempting to save political face through the passage of some watered down bill which will do nothing, and may even be harmful, given the capture of representatives and Senators by the private interests of health insurers. Progressives also face a painful dilemma &#8211; an oft repeated one: whether to be complicit in the passage of a measure whose momentum is now driven almost solely by political calculation or whether to take a stand on principle. <a href="http://www.guardian.co.uk/commentisfree/cifamerica/2009/aug/17/public-option-healthcare-reform-obama">John Odum</a> poses this well. But it seems unlikely that conditions &#8211; under the current political arrangements &#8211; for the passage of genuine health care reform will ever be more favourable.</p>
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		<title>Fictitious capital and the first recession of the services economy</title>
		<link>http://larvatusprodeo.net/2009/04/05/fictitious-capital-and-the-first-recession-of-the-services-economy/</link>
		<comments>http://larvatusprodeo.net/2009/04/05/fictitious-capital-and-the-first-recession-of-the-services-economy/#comments</comments>
		<pubDate>Sun, 05 Apr 2009 09:05:58 +0000</pubDate>
		<dc:creator>Mark Bahnisch</dc:creator>
				<category><![CDATA[Culture]]></category>
		<category><![CDATA[Developing world]]></category>
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		<description><![CDATA[&#60;img src=&#34;http://larvatusprodeo.net/wp-content/uploads/2009/04/jefferson_thumbo87o8686.jpg&#34; align=left Karl Marx&#8217; concept of &#8216;fictitious capital&#8217; has enjoyed something of a revival recently &#8211; in the context of explaining the Global Financial Crisis. It&#8217;s interesting to observe [h/t Richard Metzger at Boing Boing] that Marx doesn&#8217;t appear [...]]]></description>
			<content:encoded><![CDATA[<p>&lt;img src=&quot;http://larvatusprodeo.net/wp-content/uploads/2009/04/jefferson_thumbo87o8686.jpg&quot; align=left Karl Marx&#8217; concept of &#8216;fictitious capital&#8217; has enjoyed something of a revival recently &#8211; in the context of explaining the Global Financial Crisis. It&#8217;s interesting to observe [h/t Richard Metzger at <a href="http://www.boingboing.net/2009/04/03/marx-was-second.html">Boing Boing</a>] that Marx doesn&#8217;t appear to have invented the term &#8211; the phrase was used by Thomas Jefferson and <a href="http://larvatusprodeo.net/2009/04/05/fictitious-capital-and-the-first-recession-of-the-services-economy/#comment-684028">the concept goes back to Ricardo and Adam Smith</a>, and beyond them to earlier writers in the Eighteenth Century. There&#8217;s a bit of a message in that. Observers such as <a href="http://en.wikipedia.org/wiki/David_Harvey_(geographer)">David Harvey</a> argued quite some time ago &#8211; contrary to all the hype that was around in the 90s about the &#8216;new economy&#8217; &#8211; that the increased and increasingly ubiquitous role of financial capital was what was distinctive about globalisation. More broadly, following the French historian <a href="http://en.wikipedia.org/wiki/Fernand_Braudel">Fernand Braudel</a> and some of his epigones in world systems theory, we can conclude that markets predate capitalism. In tracing the history of capitalism, <a href="http://en.wikipedia.org/wiki/Giovanni_Arrighi">Giovanni Arrighi</a> argues that particular accumulation regimes tend to emphasise financialisation as an accumulation strategy towards the end of their life cycle, as the limits of &#8216;material expansion&#8217; are reached. There&#8217;s a recombination effect where the production of tangibles is eclipsed by the circulation of intangibles &#8211; each time opening up a new cycle of innovation across an ever larger geographical space and constructing a new &#8216;spirit of capitalism&#8217; which brings in its wake newly reassembled subjectivities, new political divisions and new forms of inequality.</p>
<p>The &#8216;age of neo-liberalism&#8217;, then, saw a shift of power towards finance capital and a harnessing of immaterial labour to the creation of intangible value. It saw a new logic of personality where constant change and the ability to network trumped security and the old bourgeois virtues. What&#8217;s also new about the era of globalisation is the world wide scope and reach of one economic system, and the geographical dispersion of networks of value creation &#8211; where, for instance, value can be added by design in the metropoles to products manufactured in the developing world. Within the developed world, we&#8217;ve had a bifurcated services economy &#8211; with <a href="http://robertreich.blogspot.com/">Robert Reich</a>&#8216;s &#8220;symbolic analysts&#8221; at the top of the tree forming a highly mobile elite and personal services provided by low skilled and often immigrant labour (mobile in a somewhat different way) or younger workers whose mobility into high end occupations is temporal. It&#8217;s been the less skilled and relatively immobile workforce in the declining &#8216;productive&#8217; sectors who&#8217;ve largely been the losers in this conjuncture &#8211; a fact which explains a lot about the politics of the last couple of decades.</p>
<p>One way of looking at the current financial crisis is that it&#8217;s the first major recession to hit the developed world since the value creation switch was flicked from the production of things to the creation of intangibles. If one takes a Schumpeterian view, the &#8220;creative destruction&#8221; now occurring should lead to the emergence of a new frontier of value creation. <span id="more-8162"></span>It&#8217;s difficult to say what that might be, and the inability to identify any emergent field for capital to till probably contributes to the (quite possibly mistaken) <a href="http://larvatusprodeo.net/2009/04/04/g20-historic/">belief that a little bit of interventionism will soon return things to business as usual</a>. There&#8217;s a big contrast with the last major downturn &#8211; where Paul Keating recognised that the evisceration of manufacturing jobs in Australia &#8211; despite its human cost &#8211; was a necessary condition for the insertion of this country into the global flows and networks where the action was. That also explained his focus on the Asian and Pacific region.</p>
<p>I was struck last week by some comments from consultant, film maker and creative industries theorist John Howkins, in a keynote he gave at the <a href="http://cci.edu.au/events/cci-symposium">CCi Symposium</a> held at QUT. Howkins drew a parallel between the sorts of work and commerce advocated by the evangelists of the knowledge economy and the phenomenon of sub-prime mortgages. In his own case, he discussed <a href="http://www.handmadefilms.com/">Handmade Films</a> (of which he is the Chair) and its experience in having to secure a valuation of its assets in order to raise finance. The valuation is highly subjective &#8211; given that the inventory of the company is immaterial and intangible &#8211; films and the prospect of future films. Howkins remarked that the mode of accounting for value is analogous in the case of financial instruments and derivatives, low doc loans and the products of creative labour &#8211; all three are essentially projective and dependent on shifting patterns of demand, income and the ability at any stage to liquidify, commodify or realise intangible value.</p>
<p>Similarly, Howkins argued that the forms of work pioneered in the creative sectors &#8211; project based, fluid, subject to multiple reinvention and recombination and reassemblage &#8211; have their parallels in the working lives of those at the bottom of the economic ladder.</p>
<p>Returning to the point I made earlier, there&#8217;s a dichotomy between mobility and immobility which parallels the division between material and immaterial value. We do live in a services economy when both those who are profiting from intangible products and those who are providing services within the same economic networks work in a way which privileges insecurity &#8211; the big difference being the highly unequal levels of social capital which can literally be realised as income and the degree of control and autonomy enjoyed by the assemblers of networks compared to those who are low level nodes in the same productive space.</p>
<p>We have really only just begun to think about the implications of all this for both economic analysis and social inequality.</p>
<p>We are also about to find out what happens to economies where competitive advantage comes from intangible factors when what is effectively value unsecured by any material assets or products encounters the collapse of the financialised networks and the evaporation of the fictitious capital which enabled the culture of the new capitalism to flourish (for some).</p>
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		<title>Stagnant middle-class incomes &#8211; cause of the credit crunch?</title>
		<link>http://larvatusprodeo.net/2008/10/20/stagnant-middle-class-incomes-cause-of-the-credit-crunch/</link>
		<comments>http://larvatusprodeo.net/2008/10/20/stagnant-middle-class-incomes-cause-of-the-credit-crunch/#comments</comments>
		<pubDate>Sun, 19 Oct 2008 23:46:59 +0000</pubDate>
		<dc:creator>Robert Merkel</dc:creator>
				<category><![CDATA[Economics]]></category>
		<category><![CDATA[USA]]></category>
		<category><![CDATA[credit crunch]]></category>
		<category><![CDATA[Guy Rundle]]></category>
		<category><![CDATA[progressive taxation]]></category>
		<category><![CDATA[Robert Reich]]></category>

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		<description><![CDATA[In the discussion of this thread, Mark referred to this column by Guy Rundle, in which he argues easy access to credit has helped paper over the cracks in American society: In the wake of this crisis, blame is being [...]]]></description>
			<content:encoded><![CDATA[<p>In the discussion of <a HREF="http://larvatusprodeo.net/2008/10/09/the-state-of-capitalism-today/">this thread</a>, Mark referred to <a HREF="http://www.crikey.com.au/US-Election/20080930-Rundle-08-Black-Monday-turns-grey.html">this column</a> by Guy Rundle, in which he argues easy access to credit has helped paper over the cracks in American society:</p>
<blockquote><p>In the wake of this crisis, blame is being sheeted home to the average person, who is apparently running up too much debt. Well, mercy, what a surprise, it&#8217;s the people&#8217;s fault. Let&#8217;s face it, people only consent to this crappy society because of what they can rack up on debt. If you&#8217;re going to spend forty years of fifty hours a week – your whole one life on Earth – in the same office, doing crap you don&#8217;t want to do, damn right you want a frikkin flat screen TV at the end of it. And to eat out. And drink stupid overpriced cocktails in awful resorts.</p>
<p>The short point is that if we close down easy credit, the rationale for Western capitalism collapses instantly. Because the rest of it is so godawful, that without rewards, no one would put up with it. Hence the need, over the last eight years, to keep it all bubbling, at any cost.</p></blockquote>
<p><span id="more-7380"></span></p>
<p>Robert Reich, in perhaps a less colourful way, made <a HREF="http://www.newstatesman.com/global-issues/2008/10/americans-economy-bailout">a not entirely unrelated argument</a> in the <em>New Statesman</em> recently.  In essence, he argues that the stagnation in middle-income America in large part <em>caused</em> the explosion in debt that led to the credit crunch:</p>
<blockquote><p>The earnings of non-government workers who are paid by the hour &#8211; and who comprise 80 per cent of the American workforce &#8211; are lower today than they were in 2000, adjusted for inflation. They are barely higher than they were in the mid-1970s. Indeed, the income of a man in his thirties is now 12 per cent below that of a man his age three decades ago&#8230;This underlying earnings problem has been masked for years as middle- and lower-income Americans found means to live beyond their earnings&#8230;</p>
<p>&#8230;Americans turned to a third coping mechanism. They began to borrow. With housing prices rising briskly through the 1990s and even faster from 2002 to 2006, they turned their homes into piggy banks. Now, with the bursting of the housing bubble, Americans are reaching the end of their ability to borrow and lenders have reached the end of their capacity to lend.</p></blockquote>
<p>Reich&#8217;s prescription for fixing the ails of the American middle class is fairly unremarkable &#8211; single-payer health care, improved education, and a more progressive tax scale &#8211; but, still, if an Obama administration makes some progress on all three of those it&#8217;ll be a considerable achievement in the US political context.  From an Australian perspective, however, the most interesting thing is that Reich (Clinton&#8217;s labor secretary) says out loud that progressive taxation &#8211; that is, taxing the rich more and the poor less to reduce inequality of outcomes &#8211; is a good idea.  I wonder when that idea might just make its way across the Pacific?</p>
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		<title>Obama &#9829; Jesus</title>
		<link>http://larvatusprodeo.net/2008/08/18/obama-9829-jesus/</link>
		<comments>http://larvatusprodeo.net/2008/08/18/obama-9829-jesus/#comments</comments>
		<pubDate>Sun, 17 Aug 2008 15:28:54 +0000</pubDate>
		<dc:creator>Kim</dc:creator>
				<category><![CDATA[Culture]]></category>
		<category><![CDATA[Economics]]></category>
		<category><![CDATA[Foreign Elections]]></category>
		<category><![CDATA[Industrial Relations]]></category>
		<category><![CDATA[Poverty]]></category>
		<category><![CDATA[Religion]]></category>
		<category><![CDATA[Sociology]]></category>
		<category><![CDATA[USA]]></category>
		<category><![CDATA[War]]></category>
		<category><![CDATA[american election 2008]]></category>
		<category><![CDATA[barack obama]]></category>
		<category><![CDATA[Bill Clinton]]></category>
		<category><![CDATA[church and state]]></category>
		<category><![CDATA[evangelicals]]></category>
		<category><![CDATA[faith and politics]]></category>
		<category><![CDATA[Franklin Delano Roosevelt]]></category>
		<category><![CDATA[John McCain]]></category>
		<category><![CDATA[neoliberal economics]]></category>
		<category><![CDATA[Robert Reich]]></category>
		<category><![CDATA[social democracy]]></category>
		<category><![CDATA[theocracy]]></category>
		<category><![CDATA[US election 2004]]></category>
		<category><![CDATA[US election 2008]]></category>

		<guid isPermaLink="false">http://larvatusprodeo.net/2008/08/18/obama-9829-jesus/</guid>
		<description><![CDATA[Joan Walsh at Salon asks whether America is &#8220;now officially a Christian nation&#8221;. She&#8217;s thinking of this &#8211; Obama&#8217;s appearance along with John McCain at Pastor Rick Warren&#8217;s Saddleback Church: One of the candidates for president strolled onto the stage [...]]]></description>
			<content:encoded><![CDATA[<p>Joan Walsh at Salon <a href="http://www.salon.com/opinion/walsh/election_2008/2008/08/17/saddleback/">asks</a> whether America is &#8220;now officially a Christian nation&#8221;. She&#8217;s thinking of <a href="http://www.salon.com/news/feature/2008/08/17/saddleback/">this</a> &#8211; Obama&#8217;s appearance along with John McCain at Pastor Rick Warren&#8217;s Saddleback Church:</p>
<blockquote><p> One of the candidates for president strolled onto the stage at a massive megachurch in suburban Orange County Saturday night and started joking easily with the Rev. Rick Warren, maybe the most popular evangelical leader in America &#8212; but just plain &#8220;Pastor Rick&#8221; to the candidate. He talked about his certainty that &#8220;Jesus Christ died for my sins, and I am redeemed through him,&#8221; said Americans should be soldiers in the fight against evil and defined marriage as between a man and a woman &#8212; &#8220;and God is in the mix.&#8221; This particular Christian candidate was so on his game that after a segment on domestic policy ended, Warren told him &#8212; his mic still live as the TV feed cut to commercial &#8212; &#8220;Home run.&#8221;</p>
<p>Oh, and John McCain was there, too. </p></blockquote>
<p><a href="http://en.wikipedia.org/wiki/Rick_Warren">Rick Warren</a>&#8216;s been one of the most prominent megachurch Pastors arguing that Evangelicals can vote for Democrats.</p>
<p>Partly Obama&#8217;s appearance is electoral calculation &#8211; the Democrats have been talking about how to walk the faith talk since some (misleading) exit polls in November 2004. But I have no doubt he&#8217;s sincere. So much for separation of Church and State. <span id="more-6998"></span>In another piece in Salon, <a href="http://www.salon.com/opinion/feature/2008/08/15/newer_deal/">Michael Lind</a> argues for agnosticism on social conservatism as the way to go to build an enduring Democratic majority. He&#8217;s probably thinking what Obama&#8217;s thinking. But it doesn&#8217;t work like that. If you want people to vote their economic interests, you need to marginalise &#8220;social issues&#8221; not highlight them. And, anyway, there isn&#8217;t &#8211; to be truthful &#8211; an awful lot in Obama&#8217;s platform &#8211; certified and written by Ivy League economists &#8211; that&#8217;s all that different from Clinton&#8217;s Rubinomics, except for the anti-free trade rhetoric, and a dash of supply side Reich style &#8220;human capital theory&#8221;. You&#8217;d be waiting a long time indeed &#8211; til Judgement Day, perhaps &#8211; for a Democratic candidate to start spruiking the true social democratic faith. Or even the New Deal.</p>
<p><a href="http://www.salon.com/news/feature/2008/08/15/barack_obama_evangelicals/index.html">Sarah Posner</a> in yet another Salon article looks at Obama&#8217;s &#8220;religious outreach&#8221;.</p>
<p><b>Elsewhere</b>: <a href="http://www.roadtosurfdom.com/2008/08/17/the-us-theocracy/">Road to Surfdom</a>. And SocProf on <a href="http://globalsociology.edublogs.org/2008/08/16/theocracy-you-can-believe-in-democratic-convention-edition/">&#8220;theocracy you can believe in&#8221;</a>.</p>
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