Take Monday’s news about GM’s bankruptcy. Yesterday I wrote about the opportunity Detroit has to renew itself in the wake of the death of the auto industry. But what slipped under my radar screen until today was the news that Obama’s auto czar plans to break the law by using retiree pensions to pay off creditors. Cash in the insurance fund used to pay autoworker pensions (among other things) would be used to pay off creditors, and would be replaced with GM stock.

Obama has had to make a series of tough choices since he’s been in office, granted. This choice, like the others he has made, has no “winners.” But there are degrees of loss. His car czar’s decision in this case again privileges financiers at the expense of working class Americans.

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Simple answer really.

Marx had it all wrong when he put “capital” in one bag. The truth is that “capital” should really be thought of as “capitals” that sometimes cooperate but often compete with one another for state resources. Manufacturers create capital (or at least created capital) off of tangible products. Refined steel. Cars. Financiers create capital off of financial services (recently retagged as “products”). Guess who won out in the eighties?

The financial industry has not always enjoyed such favored treatment. But for the past 25 years or so, finance has boomed, becoming ever more powerful. The boom began with the Reagan years, and it only gained strength with the deregulatory policies of the Clinton and George W. Bush administrations. Several other factors helped fuel the financial industry’s ascent. Paul Volcker’s monetary policy in the 1980s, and the increased volatility in interest rates that accompanied it, made bond trading much more lucrative. The invention of securitization, interest-rate swaps, and credit-default swaps greatly increased the volume of transactions that bankers could make money on. And an aging and increasingly wealthy population invested more and more money in securities, helped by the invention of the IRA and the 401(k) plan. Together, these developments vastly increased the profit opportunities in financial services.

What Simon Johnson calls the quiet coup is nothing more than the spread of neoliberal governmentality. I remember reading in the NYT–if someone has a cite please let me know–about the War on Iraq during the Bush administration. An “unnamed official” noted that the Bush administration was in the business of “creating reality”. By the time the journalists caught up with the reality they’d created, they’d already moved on, creating another reality in so doing. I thought that what they did was pretty audacious.

But what the Wall street financiers did was something else. They cloaked a multi-level marketing scheme in the logic of market principles and high-order mathematics. By the time that people figured out what had happened…well here we are right?

The reason why Obama could pull the trigger on Wagoner, but not on the bankers, is simple. Wagoner represents the equivalent of a welfare queen. It’s relatively easy to diagnose the ills that the automotive companies are wrestling with, and relatively easy to point to cultural failures. Because the bankers are still intimately connected with the market, there’s still a sense that they are the only ones with the tools to diagnose and correct the problem. They’ve taken the bureaucracy designed to oversee and regulate them hostage.

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On the heels of more grim unemployment news, President-elect Barack Obama yesterday offered the first glimpse of what would be the largest public works program since President Dwight D. Eisenhower created the federal interstate system in the 1950s.

Obama said the massive government spending program he proposes to lift the country out of economic recession will include a renewed effort to make public buildings energy-efficient, rebuild the nation’s highways, renovate aging schools and install computers in classrooms, extend high-speed Internet to underserved areas and modernize hospitals by giving them access to electronic medical records.

“We need to act with the urgency this moment demands to save or create at least 2 1/2 million jobs so that the nearly 2 million Americans who’ve lost them know that they have a future,” Obama said in his weekly address, broadcast on the radio and the Internet.

There is a lot more to do. Obama hasn’t even touched the consumption crisis. But I’m reminded of the moment we had right after 9/11, where for the first time Bush had the support of a wide swath of Americans. And instead of using that moment to create a better world…Bush asked us to go shopping. Obama is not going to get it right. But this move is one that brings us closer.

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According to the Labor Department, the number of unemployed workers rose by 251,000 in November. But the number of people who were outside of the labor force — that is, neither working nor looking for work — rose by much more: 637,000. These people aren’t counted as unemployed in the government’s statistics, because they are not looking for work. Many of them, presumably, have stopped looking for work because they didn’t think they could find a good job.

If you take a broader measure — one that tries to account for them — you see a darker picture of the labor market. The share of all men ages 16 and over who are working is now at its lowest level since the government began keeping statistics in the 1940s. The share of women with jobs has fallen almost two percentage points from the peak it reached in 2000; at no other point in the past 50 years has the share of employed women has fallen so much from its peak.

More here. Because we are living in this moment it is difficult for us to really understand what we are witnessing. There is no real return from this point. Re-imagining is what is required.

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But at the same time I find it more than ironic that the free marketers who railed against universal health care are now flying (in separate planes no less) to DC to ask for help.

Marc Steiner is one of the best talkshow hosts in the business. He had me on a couple of days ago to kick this idea around. Take a listen.

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Click here to view the embedded video.

For those unfamiliar with Greenspan and the Federal Reserve, know this. Because literally billions of dollars move based on their statements, they tend to be extremely conservative in their pronouncements. Perhaps no other group of people besides the (trained) clergy consider their words with more care. For him to say that the free market ideology he supported was basically wrong, would be akin to the Pope saying that he was wrong about Jesus being simultaneously the only begotten Son of God and man.

Now of course the problem here is that those of us on the outside looking in have always known that free market ideology doesn’t work. But the thing is that we weren’t considered part of the rational world. 

When what we think of as “social scientists” first began to employ statistics in order to control, manage, and study human populations, there was a moment in America where white supremacists used statistics in order to prove that slavery as a social system worked well for blacks. Using cooked census data they found that the percentage of blacks who were insane increased the further north one went. Whereas only one out of a thousand or so blacks were deemed insane in the deep south, in the northeastern corridor there were places where one out of every eighty or so were deemed insane. 

The way that white supremacists explained this was extremely logical–though still racist. Blacks didn’t have the mental capacity to live with all of the choices that freedom offered. “Do I work? Do i stay home? Do I go to the store? Do I take a walk? Do I read?” And each of those choices themselves led to other choices, which led to other choices, which…you get the picture. Much better for blacks to live in a system where all of their major choices were decided for them. 

Riiiighht. 

(Congress questioned this finding…and when they looked into it found that in many cases there were more insane blacks in some of the towns, then there were people in the town!) 

But it is this type of logic either applied to non-white spaces (‘inner cities’, ‘barrios’) domestically, or to the “third-world” in general, that caused people to ignore the flaws of the free market. To their (and our) detriment apparently.

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GOP elites have to be familiar with the same numbers I am. They show clearly that Obama has a close to $40 million more than McCain (taking the GOP and DNC contributions into account) and that he’s only a few electoral college votes away from a victory just looking at solid blue states. McCain would have to get every toss up state available even though he’s had to write off a few of them because he doesn’t have the loot.

That’s why I came up with the list remember?

So the “he’s a socialist” screed that McCain has unleashed isn’t really about McCain winning. But rather it is about something else entirely. 

I think he’s adopting a scorched earth policy. In a normal circumstance bankrupting the government would be enough to ensure that liberal policy proposals are shot down–by the Dems themselves no less. But these aren’t normal circumstances. Being in debt won’t prevent Obama from suggesting spending on infrastructure and other issues, given the state of the economy. So another set of tactics are required. Their best option here given the electoral slaughter they are looking at, is to get the population upset enough about the prospects of a liberal government that they will exert enough pressure to serve as the type of check on government that the deficit use to serve as. To the point that Obama can’t govern.

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What else can you do with 700 billion?

Adolph Reed has been pushing this free public college tuition thing. The numbers are old, so let’s say that instead of 23 billion, it’d cost 30 billion to pay for the college tuition of every college age student in public school (Michigan as opposed to Harvard). What else can you do?

According to the good folks at Worldchanging the entire debt of Africa is only 350 billion.

From CJR I find that it’s almost 3 billion bus fares from Durham, N.C. to San Francisco, Ca.

From the Sun Sentinel? 21 new Florida Marlin stadiums for each county in Florida.

You get the picture. 

I remember going on Detroit radio to talk about Jesse Jackson’s comments about neutering Obama after Obama’s Father’s Day speech. One of the things I tried to drive home to the callers–and they weren’t having it–was that government is supposed to do what we tell it. And we’re selling ourselves short if the most we can expect from government is for it to go after deadbeat dads. This is yet the latest example of how when certain interests want resources, they get them, while the rest of us have to fend for ourselves.

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Click here to view the embedded video.

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Several experts also said that rising income for women might affect marriage rates if women expect their mates to have at least equivalent salaries and education.

“When New York college women say there are few eligible men around, they’re right if they mean they’ll only settle for someone with an education akin to their own,” Professor Hacker said.

Doesn’t this sound familiar? Now among working class women I am not sure what the trends are, nor am I sure what the trends will be. Could be that they too will experience a rise in income while their male counterparts fall behind. But this may not be true. There are more manufacturing jobs for white men than there are for black men if for no other reason than the fact that many of those jobs are still the product of patronage and whites have more power to allocate those types of resources than blacks do. Or Latinos for that matter.

But whatever backlash we see, I’m not sure this genie will ever be put back into the bottle. Not unless some type of catastrophe occurs.

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