The American Bear

Sunshine/Lollipops

Is the End of Marijuana Prohibition the End of the War On Drugs? Probably Not. | Bruce Dixon

The forty years of so-called “war on drugs” has been the rhetorical excuse for a nationwide policy of punitive overpolicing in black and brown communities. Although black and white rates of drug use have been virtually identical, law enforcement strategies focused police resources almost exclusively upon communities of color. Prosecutors and judges did their bit as well, charging and convicting whites significantly less often, and to less severe sentences than blacks.

The forty years war on drugs has been the front door of what can only be described as the prison state, in which African Americans are 13% of the population but more than 40% of the prisoners, and the chief interactions of government with young black males is policing, the courts and imprisonment. Given all that, the beginning of the end of marijuana prohibition, first in Colorado and soon to be followed by other states ought to be great good news. But not necessarily.

Ask yourself, what would it look like if policymakers wanted to end the prohibition of marijuana, but not necessarily the the war on drugs. What if they desired to lock down the potential economic opportunities opened up by legalizing weed to themselves and their class, to a handful of their wealthy and well-connected friends and campaign contributors? What if they wanted to make the legal marijuana market safe for predatory agribusiness, which would like to claim lucrative patents on all the genetic varieties of marijuana which can be legally grown, as they already try to do with other crops?

If they wanted to do those things, the system in place in Colorado today would be a good start. In Denver today, low income property owners can’t just plant pot in the back yard or on the roof in hopes of making one mortgage payment a year out of twelve, it doesn’t work that way. Ordinary households are limited to 3 plants per adult, and for reference only the female plants are good for smoking, and prohibited from selling the weed or the seed. To participate in the marijuana economy as anything but a consumer requires background checks, hefty license fees, a minimum of hundreds of thousands to invest, and the right connections. All this currently drives the price of legal weed in Colorado to over $600 per ounce, including a 25% state tax, roughly double the reported street price of illegal weed.

So to enable the state to collect that tax money, and the bankers, growers and investors to collect their profits from marijuana taxed by the state and regulated in the corporate interest, cops and judges and jailers in near future, in Colorado and in your state as well, figure to be just as busy as they always have been the last forty years, doing pretty much what they’ve always done… conducting a war on illegal drugs, chiefly in the poorer and blacker sections of town, with predictable results.

The end of marijuana prohibition is not designed to create jobs in our communities, nor is it intended to shrink the prison state. Our ruling class simply does not allow economic growth that they can’t monopolize, and the modern prison state has never been about protecting the public from drugs or crime. Prisons and our lifelong persecution of former prisoners serve to single out, brand and stigmatize the economic losers in modern capitalist society, so that those hanging on from paycheck to paycheck can have someone to look down upon and so that they might imagine that this vast edifice of inequality is, if not just, inevitable.

The Ends of Capitalism | Rob Urie

… The saying is that Mr. Obama inherited difficult circumstances when he came into office. But what he inherited was a particular stage in an historical trajectory—one of what are regularly recurring crises in the ascendance of global capitalism. Within this trajectory catastrophes such as that of 2009 are as much a part of political economy as the times of ‘prosperity.’ The view from the ‘inside’—from Washington and Wall Street, averages prosperity with catastrophe to come to an ‘average’ conclusion about the political-economic viability of this capitalism. Mr. Obama, or any other successful politician within the modern understanding of success, ‘embodies’ the hopes and aspirations of ‘average’ Americans in the same way that the average of catastrophe and prosperity reach them in their lives. Mr. Bush before him embodied the hopes and dreams of ‘long suffering’ war-mongering white, Christian Pentecostals and Mr. Obama has his liberal-progressive constituency, the average of the two which form different ‘sides’ of an outside—the ‘driven by.’ This isn’t to discount the difference, but rather to ask: who exactly is making bank on it? As circumscribed by those whose fortunes have been restored since Mr. Obama took office, the difference that matters remains between the embedded and the embodied, between those whose fortunes are foregone conclusions and those who wave as the motorcade passes.

The passions that surround Western political economy are reactive for a reason. Mr. Obama was assumed to represent antithesis because history called for it. The unmitigated disaster of the (baby) Bush years was evident to even the dullest of his supporters as the incontrovertible ‘proof’ of calamity– falling stock prices, was underway. But ‘change’ holds forth no promised direction. And more fundamentally, from what possible logic would true antithesis spring? Within the static anti-historicism of capitalism antithesis always and everywhere exists in the ‘driven by,’ in the ‘failure’ needed to demonstrate the truth determining power of ‘success’ through wealth and profits. Restoration of the fortunes of the already rich was restoration of this static antithesis, the only one visible to Mr. Obama’s classmates. The problem of re-thinking capitalism, not that anyone in the recent history has tried, is that within its logic no catastrophe is effective repudiation and outside of it either the whole project goes into the garbage heap or none of it does. A real catastrophe confronted the peoples of the West as Mr. Obama entered office. But the difference between having a billion dollars in the bank or ‘only’ five hundred million dollars was the problem that confronted the people who brought Mr. Obama into office. That problem calls for a different set of solutions than being cold, hungry and unemployed. And that is the problem Mr. Obama set about fixing.

There is $118 trillion of wealth in the United States alone, or about $375,000 per American. For every homeless person in the country, there are 28 empty homes waiting for them right now. Laws and culture deny them a roof over their head, not a dearth of roofs. It is our legal system that funnels a disproportionate amount of wealth to a small handful of people, not the benevolent hand of a just and caring god. Steal This Article

President Barack Obama spoke at length on the economy on Wednesday in the first of what is reported to be a series of speeches he will give around the country to push his economic ‘agenda.’ A question for his supporters is why Mr. Obama is now purporting to promote the interests of the middle class and working poor when he has remained silent for the last five years during the worst economic downturn since the Great Depression? If he cared one whit about these people the time to promote economic policies to help them was five years ago. And conversely, the economic policies he has pursued have decimated the very people he now claims to want to help.

Mr. Obama’s analysis of economic travails—globalization and its effects on an under-educated workforce, are the same neo-liberal pabulum the ‘Washington consensus’ has been serving up since Jimmy Carter was in office. And his economic prescriptions—public-private ‘partnerships’ to boost investment in technology, bringing corporate executives in to assess what is wrong with the educational system, building out lower cost ‘online’ education and community colleges to ‘boost American competitiveness,’ increased infrastructure spending and the creation of tax advantaged savings accounts for middle class families, are straight from the neo-liberal playbook as well. To ask the obvious question: if neo-liberal policies worked, why then the laundry list of economic travails?

Rob Urie

Krugman Discovers Intellectual Property: The 1 Percent are the Takers | Dean Baker

While meandering the streets of Paris, Paul Krugman apparently awakened to the fact that the assignment of claims to wealth through patents, copyrights, and other forms of intellectual property is a really big deal. This is good news for those who have been jumping up and down yelling about this issue for the last 15 years or so.

There is really big money in this area. Just to take my favorite one, we spend $340 billion a year on drugs, more than 2 percent of GDP ($295 billion on prescription drugs, $45 billion on non-prescription drugs). We would probably spend about one-tenth this amount in the absence of patent protection. The difference is equal to about 20 percent of after-tax corporate profits.

And this huge gap between price and marginal cost gives drug companies enormous incentive to push their drugs as much as possible. This means concealing evidence that they are ineffective or even harmful. We routinely see stories about the drug companies responding exactly as economic theory predicts.

Of course the huge gap between price and marginal cost leads to all the predicted distortions on the consumer side as well. People have to struggle to find the money to pay for drugs that cost hundreds or even thousands of dollars a prescription when the price would be largely a non-issue if they sold for the generic price.

In the case of the tech sector, Google, Apple, Microsoft, and Samsung compete at least as much in their legal departments as in the quality of the products they develop. Patents are more often used to harass competitors than to protect innovation — and that is what the business press says.

In the realm of copyright, we have the efforts by the entertainment industry to turn us all into junior copyright cops through measures like SOPA or PIPA.

So intellectual property is a really big deal in the modern economy. And what is neat about it is that these property relations are almost infinitely malleable. (Okay, all property relations are malleable, but IP seems to offer much more room.) That’s the key point that we all have to understand because the bad guys want to convince us that patents and copyrights came to us from on high and that it is our obligation to enforce them in their current or strengthened form, otherwise we are dirty communists.

It’s great to see that Krugman may now be on the case. Perhaps he will be able to teach the economists a bit of economics. (Hint: an intro textbook goes far here. Large gaps between price and marginal cost are bad in trade, much larger gaps between price and marginal cost are really bad when it comes to intellectual property.)

Did You Know That Food Stamps Was a $760 Billion Program? | Dean Baker

I sure didn’t, which is why I was surprised to see an NYT article refer to it as “the $760 billion program.” This number is referring to the cost of the program over a 10-year budget window, which careful readers may have gleaned from the rest of the sentence which tells us that fraud accounts for 1 percent of the program’s cost or $760 million a year. Nowhere does the piece directly say that the $760 billion figure refers to a ten year spending number and not a one year number.

This is a great example of the absurdity of budget reporting. It is highly unlikely that most NYT readers assume that budget numbers are for a ten year horizon. While this is a standard in budget wonk circles, it is hardly a normal practice anywhere else. Giving a spending figure without even explicitly telling readers the number of years it covers is not providing information. This should not have gotten by an editor.

It would have been simple to write this in a way that would convey information. The government is projected to spend a bit over $50 trillion in the next decade. If the piece had described projected spending on the food stamp program as a bit more than 1.5 percent of projected spending then most readers would have a reasonable idea of the importance of the program in the budget and to their tax obligations. If it makes people feel better it could also include the dollar figure, but since almost no one knows the size of the projected budget (especially over a ten year horizon), the percent number would provide far more information.

The Structural Genocide That Is Capitalism

… With his antepenultimate chapter [of his book Capitalism: A Structural Genocide], “Legitimizing the Illegitimate,” [author Garry] Leech follows Gramsci in seeking explanations for the means by which such a brutal system as capitalism has reproduced itself over time. He observes plainly that “most people’s world views currently reflect the values of capital,” at least within more affluent northern societies, and that capitalism proceeds with its genocidal proclivities while enjoying “the apparent consent of a significant portion of the world’s population.” Like Gramsci, Leech largely faults the hegemonic cultural processes that obtain within core-imperial societies - formal education, the media, work arrangements, etc. - for normalizing the prevailing state of affairs, in part by excluding the barbarous proceedings of capital from consideration - in contradistinction to his own volume. Channeling Theodor Adorno, Max Horkheimer and other theorists with similar concerns, Leech notes that Western consumers remain largely ignorant of the extreme violence that is required as the very basis for the relative privileges they enjoy in global terms; worse, perhaps, most Northerners - a majority of whom, claims Leech, enjoy “middle-class lifestyle[s]” - have the capacity to escape the alienation driven by capital precisely by engaging in mindless consumerism, thus perpetuating the vicious cycle. [must read]

Current ‘globalization’ is historically related to the epics of imperialism that preceded World Wars One and Two. In contrast to the theories of economists, existing ‘global’ relations retain strong ties to earlier imperial relations. The ‘state capitalism’ of modern China has roots in the mercantilist strategies of imperial England of which China was colonial subject. European ‘corporate’ relations in Africa strongly follow historical imperial relations. And these earlier imperial relations were clearly developed as modes of exploitation and extraction—the dependencies that developed were conceived to force cooperation with imperial imperatives. The results—vast wealth extraction, imperial tensions that led to the most destructive wars in human history, the temporary evictions of imperial powers from their colonies (only to return as ‘free trade’ relations) and new and ‘improved’ strategies of forced dependence. The relevant points are: current circumstance has precedence in prior history; engineered dependence is a colonial strategy of expropriation, and other than a few hundred rich families in the West, we are all colonial subjects under the ‘new’ globalization now. Rob Urie, The Corporate State and Manufactured Dependence

The Corporate State and Manufactured Dependence | Rob Urie

An argument often heard in the 1980s and ‘90s by those favoring lower taxes on the rich was the rich could avoid paying taxes because they had the resources to do so, so why not be pragmatic and set tax rates low enough the rich would actually pay them? The people making this argument overlapped substantially with those arguing poor, and particularly black and brown, drug law ‘offenders’ should face mandatory sentences of decades in prison for drug convictions to ‘send a message’ drug laws will be enforced. The obvious question back is —why would harsh prison sentences dissuade people from using drugs but not from avoiding paying taxes?

This disconnect has elements of racism and class bias, but there is also a deeper precept that economic crimes are ‘victimless.’ With respect to taxes, there are two dimensions here—the premise economic resources are in the first place legitimately distributed and that tax avoidance garners no adverse social consequences. The sources of wealth accumulation in recent decades are inherited (unearned) wealth, corporate executives using monopoly power to extract economic rents, and finance dependent on public backstops and guarantees. None of these sources is supported by the economic theories of capitalism. And the social costs of tax avoidance are evident in poor schools, a dysfunctional healthcare system, deteriorating infrastructure, widespread poverty and under-funded retirement accounts. Economic crimes do have consequences. [++]

Capitalism and Economic Imperialism | Rob Urie

… The economic-social nexus at work in for-profit prisons is a microcosm of the imperial tendencies of the capitalist West. Its parts are the integration of state and private functions where presumed social legitimacy derives from the state function (right to imprison) and the structure (private prisons) derives its economic legitimacy from capitalist ‘efficiency.’ The broader context is political-economic relations as they have developed historically with the result of a social taxonomy (race, class) with embedded place in the existing social hierarchy. The explicit relation of domination and control affected by prisons to the systemic theft of labor of slavery finds its contemporary expression in for-profit prison labor with the ‘innovation’ of technocratic cost containment through deprivation that provides the ‘added’ profit motive. Quite explicitly here one person’s table is full because another’s has been emptied.

The strategies used to legitimate this system are fundamentally political—social taxonomy is history embedded in current relations. Statisticians call ‘crime’ statistics resulting from racist laws and policing ‘selection bias’ because the premise—the social artifact of ‘crime,’ is predetermined to derive from subsets of the population and the strategies of crime suppression ‘prove’ the predetermination by overwhelmingly targeting these subsets. The result that few ‘white collar’ criminals are in prison is a function of rich whites writing the laws and the police practice of partitioning the types of ‘crime’ they target and enforce to exclude rich whites. This tendency has multiplied with the ascension of finance capitalism with the predictable consequence economic ‘freedom’ is the freedom of the financier class to imprison historic and new under-classes under the veil of ‘efficiently’ providing a state function at a profit. The innovation is the mode of exploitation, not its purpose.

Of relevance here is the history embedded in social classes, the fact of these classes, and the social divisions produced by economic exploitation. The history of race in America, with its extended accoutrement of theoretical apologetics, provides the illusion of binary taxonomy, a convenient ‘other’ to be conquered with ‘divide and conquer’ imperial strategies. Blacks, and increasingly browns, have historically been excluded from political and economic participation to the extent their economic production has been stolen from them and put forward as the product of those who did the stealing. To the extent economic power buys political power, stolen slave labor is reified across history as a tool of economic domination.

The suggestion slavery is an existing mode of economic production in the U.S. in 2013 is twenty steps beyond outrageous to most Americans because the formal institution was ‘abolished’ one hundred and fifty years ago. I leave it to readers to decide the semantic matter yourselves with reference to the work of scholars Michelle Alexander and Kahlil Gibran Muhammad. The points of current relevance are slavery was a (radically egregious) mode of political economy premised on domination and control to expropriate labor from its producers; this stolen labor was put forward as the product of the people and institutions that stole it; and it bought exponentially greater social power for them as it aggregated and time abstracted it from its source.

The ‘innovation’ learnt from the ‘end’ of slavery was [that] degrees of the same political-economic outcomes can be produced without it. The remnants of social catastrophe left behind by incarnations of European and American imperialism and related ‘world’ wars provided the ‘natural’ states of existence conducive to labor ‘freely’ choosing to work for multi-national corporations for subsistence wages. The unstated fact of history is people by degree ‘got by’ for millennia with no help from, or need for, the institutions Western capitalists today put forward as indispensable. Where history didn’t suffice ‘free-trade’ agreements supported by conspicuously imperialist economic theory produced the local misery necessary for Western capitalism to ‘come to the rescue.’ [continue]

The Real Numbers: Half of America in Poverty -- and It's Creeping Upward

anticapitalist:

The Census Bureau has reported that one out of six Americans lives in poverty. A shocking figure. But it’s actually much, much worse.

1. Almost half of Americans had NO assets in 2009

Analysis of Economic Policy Institute data shows that Mitt Romney’s famous 47 percent, the alleged ‘takers,’ have taken nothing. Their debt exceeded their assets in 2009.

2. It’s Even Worse 3 Years Later

Since the recession, the disparities have continued to grow. An OECD report states that “inequality has increased by more over the past three years to the end of 2010 than in the previous twelve,” with the U.S. experiencing one of the widest gaps among OECD countries. The 30-year decline in wages has worsened since the recession, as low-wage jobs have replaced formerly secure middle-income positions.

3. Based on wage figures, half of Americans are in or near poverty.

The IRS reports that the highest wage in the bottom half of earners is about $34,000. To be eligible for food assistance, a family can earn up to 130% of the federal poverty line, or about $30,000 for a family of four.

Even the Census Bureau recognizes that its own figures under-represent the number of people in poverty. Its Supplemental Poverty Measure increases, by 50%, the number of Americans who earn between one-half and two times the poverty threshold.

4. Based on household expense totals, poverty is creeping into the top half of America.

A family in the top half, making $60,000 per year, will have their income reduced by a total tax bill of about $15,000 ($3,000 for federal income tax and $12,000 for payroll, state, and local taxes. The Bureau of Labor Statistics and the Census Bureau agree that food, housing, and transportation expenses will deduct another $30,000, and that total household expenditures will be about $50,000. That leaves nothing.

Nothing, that is, except debt. The median debt level rose to $75,600 in 2009, while the median family net worth, according to the Federal Reserve, dropped from $126,400 in 2007 to $77,300 in 2010.

5. Putting it in Perspective

Inequality is at its ugliest for the hungriest people. While food support was being targeted for cuts, just 20 rich Americans made as much from their 2012 investments as the entire 2012 SNAP (food assistance) budget, which serves 47 million people.

And as Congress continues to cut life-sustaining programs, its members should note that their 400 friends on the Forbes list made more from their stock market gains last year than the total amount of the food, housing, and education budgets combined.

Woah

(Source: anticapitalist)

The Resurrection of Ben Bernanke | Rob Urie

To recap, Fed Chair Ben Bernanke helped engineer some of the dirtiest deals in Wall Street history, can’t get firms to borrow with ‘standard’ Fed policies because of the negative hurdle rate (‘zero lower bound’), is managing with QE to build bank reserves that aren’t needed to ‘spur’ lending that isn’t needed, and has managed to send financial assets owned by banks, corporate executives and trust fund babies much higher. These acts all put money directly into the hands of the West’s plutocrats while the only demonstration of benefit to anyone else comes from the assertion the economy ‘would have been worse’ from the economists whose mainstream standing is a function of keeping official discourse comfortable for middle-aged white guys in expensive suits.

In this process one group of people, the very wealthy, used the political power purchased with their wealth to assure the institutions with the capacity to boost their fortunes did exactly that through insider financial deals and policies to send the stock market they own higher. The government policies that could likewise give money directly to victims of the economy crashed by the banks via government jobs programs, Federal teaching grants, arts grants etc. are missing in action and cutting government spending through ‘austerity’ is the policy choice instead. Ben Bernanke and Fed defenders can continue to argue the broad circumstance is a terrible accident, a series of ‘policy missteps,’ but their singular direction leaves alternate interpretations to only the dullest among us—the Federal Reserve is a tool being used by plutocrats for their own benefit in an epic class struggle.

But Fed defenders certainly take issue with this characterization. The ‘profession’ of economics traded relevance for the rhetorical guise of ‘apolitical’ technocracy a century ago. Herr Bernanke’s actions as seen through graduate economics departments are the manly work of a technocratic manly man where moral clarity sometimes takes a back seat to effective policy. That the deals he helped engineer to benefit Wall Street insiders would appear suspect to child pornography rings and to the meth dealers working local elementary schools relates today’s ruling class to its predecessors through history. The Fed’s back-room deals may have precedence but they are profoundly undemocratic and in their class dimensions, anti-democratic. Only by separating politics from economics can economists endorse policies with specific political effects under the illusion they are economically neutral.