Back in the halcyon days of the Reagan administration, corporations joined the late capitalist movement of putting the enrichment of the investor class above nearly every other consideration. This involved crushing what was left of industrial unions, stealing the pensions of retired workers through the perversion of bankruptcy laws, and, needless to say, the ruthless looting of public subsidies and tax breaks. Naturally, the public subsidies were delivered, but the promised jobs and prosperity somehow never arrived. GM was simply following the new rules of corporate citizenship when it took the public money, and then walked away when their promises came due. Surprised?
Yet another new study shows that the US has not seriously taxed its rich people since Reagan signed his tax reform into law in 1986. The great project launched in 1980 by Reagan has reached its apotheosis. We have a government of, for and by the rich. SUCCESS!!!
The differences between the Democratic party and the GOP continue to dwindle. The Democrats are sponsored by Wall Street, have abandoned the idea of taxing the rich, and have even abandoned questioning the size of the military-security complex. Meanwhile, Republicans are embracing marijuana legalization and marriage equality. The biggest differences left are really Social Security, science, and medicine (the GOP is against all three). Otherwise, that's pretty much it, folks. We can summarize this nation like this: declare war on the world, give every break and perk to the rich people, spy on everyone, and ignore the man-made environmental catastrophe. The longer we keep these two parties in power, the further this nation is ruined. Considering it has been this way for nearly 20 years, it is probably too late to save the USA.
None of this is news to Americans who live in our largest cities. Chris Rock is probably correct about most middle Americans being oblivious to class inequality. There, the reality of inequality is right in your face, unambiguously and apologetically slapping you, just in case you might miss it. In the small towns and suburbs, where most Americans live, the arrogance and entitlement of our plutocrats -and yes, our kleptocrats too- is more abstract, out of sight, and almost never encountered in person. The great and mighty fly in their private jets, to their palaces in the sky, or their private islands. Out of sight, and out of mind, they float above the rest of us, supremely confident and protected.
I'm afraid this post is going to be a mess. There is no easy way to report on the disappointment that is our capitalist system without writing a book about it. Fortunately, that book was published last summer.
In a summer full of bad news the world over, we in the US should be focused on the five biggest stories that directly effect us: our endless wars, our loss of the Fourth Amendment, our loss of women's reproductive rights, our ongoing water crisis / environmental crisis, and our unsustainable economy.
New York City increasingly relies on executive pay and Wall Street bonuses to keep its treasury full. Once any economy relies on the top 1%, it becomes unsustainable. Even Michael Bloomberg knew this. So the city has had to rely on tourism to make up the gaps. I don't think that is sustainable, either.
This post will focus on our current economy. Simply put, the rich get richer. Here's are just a few angles of the same overall story.
First up, CEO pay is ruining our economy. We now have proof. I can see you are not impressed. Occupy Wall Street tried to make us pay attention, but they didn't succinctly make their case. And now we have articles and books, like the ones above, to prove that Occupy was right, and those kids were on to something. But now we don't give a shit.
But let me elaborate on this a bit more. What does the economy of a city that relies on the top earners look like? How does it function? The answers are right above us, in the new supertall residential buildings going up. In a city in which there is an oversupply of office space, there is a bubble economy in the new luxury residential market.
Who is driving up the prices in new luxury construction? Mainly Wall Street managers and wealthy foreigners. And this price war has helped sustain a real estate appreciation across the whole city that has priced out the middle class. Millions of New Yorkers, whether they care or not, have lost their chance to buy.
Second up, Wall Street. The average Wall Street annual compensation with bonus is $369K. The average white collar NYC salary is $69K. The US median salary is $51K. And over half of New Yorkers make less than $40K. And what is our national economic policy? Be extra nice to those at the top. Given their contributions to the health of the economy, don't they obviously deserve such a large percentage of the income in the city? After all, consider what their taxpayer backed financial manipulations created in 2008. The world has staggered through the deepest recession since World War II, and the authors of this catastrophe have gotten richer every day since. Ah, the wonders of Capitalism.
And third is the current bubble. Looking up and down the Northeast Corridor, one can see that we are in the midst of a dangerous and destructive real estate bubble. While housing in Baltimore and Philadelphia remains affordable, comparitively speaking, the bubble is in full swing in Boston, New York, and Washington DC. Let's take a quick tour.
In Manhattan, the bubble is not done expanding. It wasn't long ago the average sales price of a Manhattan apartment (condo or co-op) exceeded $1 Million. This past fall, it surpassed $1.68 Million. 2014 was simply a blockbuster year for the borough. It marked the continued inflation of a real estate bubble that began in 2002, and survived the national sub-prime explosion. The average price per square foot in Manhattan is over $1,400. Units in Tribeca or those with a view of Central Park, are setting new records above $5,000 and $6,000 per square foot. On the rental side, it was about 15 years ago that we first saw studios pass the $1,000 per month mark. How does $90 per square foot per month sound?
And at the very top of the market, the properties for the top-half of the top 1 percent live in their own bubble that even Tokyo and London do not yet match. The epicenter of this bubble is the new row of super-tall residential towers in the 50s, with offer upper half residents views of Central Park. The entry-level building for this segment, Extell's One 57, has seen its sales grind to a halt while the elite wait for the completion of 432 Park Avenue, which offers more spectacular views and floorplans, and Extell's upcoming 225 West 57th Street, which will set a new height record for residential towers in the western hemisphere.
Outside of the new midtown skyscrapers, there are the blockbuster exotics, like the crazy triplex co-op at the Pierre Hotel, the new penthouse on top of the Puck Building, and the multi-level mansion at the top of our nation's first skyscrpaer, the Woolworth Building.
The Woolworth Building was once the crown jewel of downtown. In some ways, turning it into condominiums for plutocrats nicely summarizes what's happened to the economy, and the once great city of New York.
There had to be a point where the prices in Manhattan would be out of reach for most dual $100K earners. Even the affluent are tiny compared to oligarchs and investment bankers. So they shifted their search to Brooklyn. Now Brooklyn is almost as ridiculous as Manhattan. Wait, did I say almost?
How about Queens, then? Nope. Not affordable any more.
The madness continues. When will the city realize it's sitting on a real estate bubble? And do we really have to be reminded of what inevitably happens to bubbles? But say this for bubbles, they can be fun until they burst.
The high end condos are driving the market, but the law of supply and demand will raise both prices and sales everywhere in New York. At least, until the current bubble bursts, and it hits the fan again. But in the meantime, isn't capitalism fun?
And we have a bonus stop on our tour: Boston.
Have you seen the asking price for the penthouse in the yet unbuilt Millennium Tower next to Filene's in downtown Boston? It won't be finished until 2016, so there's still time to buy, if you can come up with $37,500,000. At that low price, it might attract a bidding war. The new apartment building at the TD Garden will feature apartments on the upper floors of $8,000 to $10,000 a month. IN BOSTON. I guess the Manhattanization of Beantown is nearly complete.
I must say, aside from grabbing a copy of Capital in the Twenty-First Century, this is the must read economics article of the Christmas shopping season:
John Bois: A eulogy for RadioShack, the panicked and half-dead retail empire
What a nightmare the American working class is living through! Since the Reagan administration at least, American workers are routinely treated like soulless, right-less, replaceable machine parts. We're back to working conditions that were common before the Progressive movement, and which we imagined were largely abolished in the New Deal and Fair Deal of the 30's and 40's.
Well, we were wrong, and the capitalists have won. Hooray for us.
Update, February 23, 2015: As Radio Shack closes this week, John Oliver has contributed this little gem:
To the surprise of absolutely no one, the World Trade Center site is a disaster on every level where failure was possible. It can't make money, it's an aesthetic nullity, it dishonorsthedead, and is the crown jewel of the dysfunctional relationships that permeate the corruptPort Authority of New York and New Jersey. What's worse, of course, is that this outcome was predicted more than a decade ago, by just about everybody with any knowledge of the situation.
Niall Furguson is perhaps the closest thing the UK has to Ann Coulter. He's not a real economist or historian, despite his teaching privileges at Harvard. He's a right wing television commentator with a particular mean spirited, provocative style. He loves to push the buttons of his political and academic opponents.
On May 2nd, speaking to over 500 financial advisors at the Tenth Annual Altegris Conference in Carlsbad, California, Mr. Furguson once again attacked the greatest, most influential economist of the 20th Century. No transcript is available, but he essentially said that the motivation behind Keynes' famous quote, "In the long run, we are all dead," stems from his being both gay and childless. The argument that Keynes' alleged homosexuality weakens or invalidates his economic theories has been a staple of anti Keynes criticism for seven decades.
This is not Ferguson's first homophobic slur against Lord Keynes. As long ago as 1995, in an article for Spectator, Furguson asserted that Keynes opposed the 1919 Treaty of Versailles (which formally ended WWI) because he was sexually attracted to the German representative at the negotiations. That was to argue that Keynes was literally gay for Germany. Then, famously in a 1999 book, he accused the greatest economist of the twentieth century of picking up young men in London.
What is it with all these personal attacks on a man who can't defend himself? Could it be projection? Isn't it always?
I noticed that the Harvard History Department was unavailable for comment on Ferguson's latest nasty remarks. Apparently his nose is broken because the American public refuses to embrace the imperial project he believes the Unites States must pursue in order to be true to its destiny. Poor Niall.
The penthouse at 15 Central Park West, which was purchased by the Rybolovleva family in December 2011 for the full asking price of $88 Million. Their 22 year old daughter, Ekatarina, now lives there following her stint at Harvard.
Last week's New York Times story about nealry one third of New York city’s income going to the top one percent of the city's earners is not surprising. What was once the leading manufacturing city in the United States has been transformed into a huge financial casino, with the gamblers at the top reaping all the rewards. Who cares if they nearly brought the economy to its knees, and blighted the lives of millions of Americans? And who is really concerned that they’ll do it again if they’re not prevented? How fitting that Mike Bloomberg should preside over this carnival!
But not only climate change. They also went into a frenzy about the weather's impact on job data. Educated people who have been paying attention to business news since 1990 or so realize that stormy weather has been proven to have both micro- and macroeconomic consequences. Weather effects earnings, consumption, spending, production, and everything connected to them in our economy.
They probably don't remember nor care that Enron, once a poster child for 21st century corporate America, developed one of the world's first electronic weather derivatives markets - in which investors and institutions both speculated on what the weather would bring, and also hedged their weather-related exposure. And now the wingnuts are in denial that a series of strong snowstorms can slow hiring? They are hysterical, excitable, violent, dim-witted, anti-intellectual liars.
I try not to write about myself because first, this is supposed to be a blog about my team's interests, and not necessarily a blog about us personally. Second, I fear that any discussion of economic hardship that I'm going through while still living in Manhattan will make me sound a lot like Megan McArdle, a person I and others loathe.
The small business I work for had a nightmare day yesterday. Their AMEX card is frozen. Their bank accounts are frozen. They can't do payroll (payday was last Thursday). They owe hundreds of thousands to various shady suppliers. And one character owes the store money, but his last check bounced, in what might have been a retaliation for checks that bounced in the other direction.
So I ask a veteran salesman here when was the last time he was successfully paid (without the check bouncing). He told me five weeks. He explained that he was patient because he considers himself close friends with the family that owns the business.
But the question to myself is - how long do I work for free? Friends say that now is the time to go on 'strike.' But I am getting some decent experience updating content on the store's web site. And it is fun selling rocks (yes, one month in, I admit it).
Am I insane, or will working for free become a common experience in this economy? Now if a corporation missed payroll, it would be finished. But small businesses can cheat a little. And then there's the unemployment insurance issue. If I go on 'strike' I can't resume collecting NY State unemployment insurance. My understanding is that either I have to be laid off, or the company has to go under first.
So here I am, working for free at a small company that seems to be on the edge of Chapter 11, wondering if I can continue to hold on until either my next paycheck or the closing of the store.
In the meantime, I continue to read Paul Krugman's blog. In my opinion, he has been correct in his predictions for over 12 months now. So I urge everyone to rely on him as your macroeconomic weatherman.
Most economists have agreed that the US recession will continue through June 2009. But today's news proves that many more months of bleeding will occur before we have a chance to recover (and let's not forget that our recovery could be handicapped or delayed further by a continued global credit crunch). Today's news of over 50,000 announced layoffs, revised tonight to over 70,000, is just stunning. We were averaging over 200,000 layoffs a month, but at this rate, we could soon see half a million per month.
For the best analysis and forecasts, I continue to read Paul Krugman's blog and columns for the NY Times. He's been busy writing and spending time on TV defending Barack Obama.Defending Obama is admirable, but it is not Krugman's job. While I think that Obama has asked Krugman to be an unpaid advisor (heck, just reading Krugman's blog and articles would be more valuable than any paid economic advisor's words), Obama needs to find more surrogates and defenders who can do television interviews regularly.
...and read John Kemp's outstanding summary of the US & UK debt crisis at Reuters.com.
And while we're at it, go read John Gray's stunning September 28th piece in the Observer, in which he declares that the UK "has turned itself into a gigantic hedge fund." It was reprinted in Harper's December issue. I am still catching-up with my stack of Harper's, and I finally read the piece this morning.
Today the men who run our country for the next three months, Ben Bernanke and Richard Paulson, formally asked the American taxpayers to bend over and take a platinum phallus to their anuses. Think I'm exaggerating?
They are demanding $700 Billion for the public to purchase worthless mortguages, or else, they say, the country will suffer greatly.
'Give us the money or the country gets it!!'
But the treasury does not have the cash. If this goes through, the US would have to borrow $700 Billion.
If this mortgage bailout plan passes through Congress, we're beyond screwed. How, you ask? Here are some well-informed opinions:
Paul Krugman, NY Times (registration required): Cash for Trash
Henry Blodget: Bernanke and Paulson - Here's why we're screwing you.
Gloucester, MA: Alleged teen pregnancy 'pact' quadruples the normal number of pregnancies at Gloucester High School. It's a localized public health anomaly that will be sensationalized by the media, and studied by scholars for years.
Japan: The number of domestic suicides topped 33,000 in 2007, the second-highest recorded number since the nation began compiling them. The article correctly points out that Japan does not have the highest suicide rate in the G8. That would be Russia. But as Parag Khanna and others point out, Russia cannot be considered a part of the elite industrialized world, given its shrinking population and increasingly vast, sparsely populated regions. Russia is too big, too corrupt, and is losing too many smart people. But that's another post for another time.
I suppose many of you have heard my rants and ravings about these things for a number of years. Yes, I am a greenie. Perhaps not the absolute devout that some may be, but my biggest contribution I can make to the cause is to keep getting “smaller” as far the impact goes while getting louder (perhaps my biggest “asset”) where those that
need to hear will hear. There will be many chapters and all of them will be revisited from time to time. But this is to remove the veil and the passivity that pervades this discussion. Kid Gloves will not be employed here….
In the eyes of a vast majority of Americans, environmentalism is the realm for the pot-smoking vegans in Northern California who ride solar-powered bikes to the organic wine farms or the 60’s draft dodging cast offs who really hate America anyway (love it or leave it, man) and apparently want to destroy it by advocating for smaller cars and higher fuel standards….FUCKERS!
Well, ummm….perhaps not. Environmentalism is THE new economy. En Vogue! Tre Fab. Its HOT. Al Gore is making fucking movies for crying out loud so it must be real right? Leo-D drives a fucking Prius, shouldn’t we all? Well, hang on a moment. Leonardo DiCaprio and ESPECIALLY Al Gore isn’t in the position to change anything really. Al isn’t the President (he lost…or whatever the hell happened in 2000, the year we all got fucked!). He is a Hollywood shill now. So he is no more an influence for the environment than Michael Moore is at changing the auto industry practice of destroying communities that depend on their income. Remember he DID fucking FLY to the Live Earth Concert. So did Leo. And so did every "artist" that performed that day. They bought green carbon offsets though.
Ah….blood does wash off don't it?
So with that I will begin the (hopefully) regular piece to this blog with the open shot across the bow. Warning….I don’t censor (starting right after the title…). Fuck you. If you can watch my fucking planet rot in place as you get into your fucking SUV post-your 5 min yoga while sipping slave-waged-picked lattes from WhereeverBucks backing out of the driveway of a 4400 sf house you and your fucking yapper dog live in, then you sure as shit are in no position to curb my language.
And for Christ sake pick up after that little fucker!
Chapter ONE - Food For Fuel
As I keep saying....apparently to the void, we (the collective jingo-centric A.D.D. voting stock of Americans) have absolutely no idea what we are doing anymore. Leaves on streams. Rice, soybeans, and corn are the most abundantly grown crops in the world. They are also a large part of the problem. They come at the expense of biodiversity, a key to the planets ability to combat a number of things including specie extinction (us included). But then again, at least its food for fuck sake. As soon as you begin taking farmland that should be dedicated to producing food for an ever expanding world population and giving it over to t producing a crop source for fueling our transportation and energy needs you begin to see why so many in the agricultural world and the organizations that deal with issues in third world countries are in full bloom panic right now. We cannot feed the world with what we currently grow, so let’s chop the food production by 35-40%? And this doesn’t alarm people?
"But wait are you saying that we should stick to oil?"
No. I am not saying this.
"So, Ethanol is good right?"
Indeed, it is a good thing to reduce the extraction of oil to burn in terribly inefficient cars, yes.
My turn to ask questions, so why do you think we should turn to ethanol?
So burning our food, doesn’t this sound like a bad idea?
"Maybe….but what do we need with all that corn anyway?"
For the benefit of diversity (and economy competition, something that drives prices down…garsh!) we can look into a number of different and sustainable energy producing means such as the highly contested wind strategies and others like the tidal technologies that are now available and ever developing that may alleviate some of the major drawbacks from the wind powered infrastructure.
For one, I think the general public could use another option (and given our geographical and geological advantages, why not) and additionally competing technologies push for innovation to advance more quickly as well as gain access to a wider array of funding opportunities not to mention become more affordable.
These are good things in a world of perpetual increases in energy costs.
But worse is embracing any one idea that would rob Peter (oil) to pay Paul ("eco-fueling") in lieu of two major pieces of shifting:
- Mandatory efficiencies for ALL forms transportation and not token responses to quell the eco-crowd roar. I am talking NO car under 60 MPG and Nothing BUT hybrids to start.
This is the REAL discussion that should be happening at every possible turn. Our ridiculous appetite for energy. I realize that this has been discussed in dribs and drabs but satiating the appetite only prolongs the illness. That illness is the REAL issue. The illness being our lack of restraint and conservation. As someone who was asked (on behalf of the Boston Society of Architects - Committee on the Environment) back in 2001 to review the forthcoming National Energy Policy, I was struck by the fact that there were no mandates for scaling back use (from the lack of public transportation funding to overall self-discipline measures). We just keep throwing money at ideas to deal with the ever expanding need. Things have not changed in the 7 years since its release. As we may already know things are much, much worse.
Of all things, that is the least sustainable strategy, no matter how "green" the technology gets.
Another HAS to be a look at how we do things. There is something absurd about sitting in two-hour traffic jams flying solo listening to NPR yelling, “right on” to reports on energy crisis and want to remove us from Iraq.
2. Localized Mass transit investment.
- READ THIS: BUSES are bad. Why? They sit in traffic with everyone else. Why is this so hard to understand? Make transit actually efficient and people will use it. Cities will densify logically.
I know, trains are about as reliable as the ability for our President to properly read a teleprompter, but fuck is it not a good idea to put a bit more thought into your commute? That brings me to one of the tenants to a truly sustainable strategy, transit. Public transit especially. We collective look at the 3rd world as lesser, but they also have a lot right. They do not have access to capital the way we do so that has to be clever about it. Use mass transit to move people who cannot afford autos. It is their necessity. It is ours.
These were the two giant holes in the 2001 National Energy Policy. It was great at putting the “cards on the table” but very bad a advocating real solutions to the UN-sustainable thirst for energy. It started with the excused requirement for energy plants (particularly in RED states) to put scrubbers on the stacks. That was 2001; the requirements still have not been restored.
Chapter TWO – Green is Still Greed….and greed is still good.
So GM wants me to believe that they never really killed the electric car they just thought the market wasn’t right? Hmmmm. Interesting, didn’t they CRUSH all the cars? They did. They didn’t give them to communities of the poor, to perhaps stimulate interest and educate the public at the roots about technology that could be extremely affordable for those who may be interested in things like, oh say, affordability.
They Fucking crushed them.
Did I mention they crushed them? They fucking crushed them. Crushed. Am I clear? CRUSHED. Not donated, not gave away. Nothing. This is as fucking mind blowing as ANY network not picking up Arrested Development after that shit-stain network FX (Fox) dumped it. Destroyed any trace of them.
But wait, they are trying again. Oh its OK then. Forgiven. I want to give thanks for your advert in The New York Times magazine announcing how fucking green you are. I am sure it has nothing to do with the ever exponential quarterly losses you are taking for market share.
Since the 1970’s energy crisis, which looks like fucking child’s play compared to now our collective fuel economy has worsened. Worsened. How? Well, sure cars got bigger again. That’s what we Americans are all about, bigger, better faster. Like the environmental degradation. We are the best. But hey at least China is catching up and soon will pass us faster than the jobs our American companies gave away to them in the name of that all American capitalism.
Fuck, thank GOD (no, no please, thank GOD….) Wal-Mart is open 24 hours.
Still think we are free? I know, Bitter party of one?
No. I am not bitter, I love getting fucked in the ass with a steam locomotive and not given the courtesy reach around. I guess I just have standards. Jeffery, Love me.
Chapter THREE – I love my country, but I don’t trust our government.
Here is all the evidence we need that our government and George Bush (who doesn’t just hate black people, he hates all people) is out to get us. And by us I mean anyone NOT invested in carbon-based fuel investments.
So the EPA was strong-armed? Huh, really? Come on? This is all very shocking. America (and the rest of the sycophants that emulate us) continues to have that 4 year old mentality, if I just pull the covers over our heads the big bad stuff will just go away. Well, guess what? It won’t. But at least they won’t have to do much to wrap up the bodies, just look for the television sets in their homes.
Yeah, it’s the fat lump in the barker lounger that was reaching for the remote when they gasped their last breath.
Chapter Four – So where do we go from here?
I know, I know….this sounds horrible. I am being an alarmist. How terrible of me, please allow me to apologize. Oh wait, its fucking true. These things are our future.
FUCK THE CHILDREN, Whitney!
Its not being an alarmist, its just plain ole fucking alarming how little we ALL COLLECTIVELY DO NOT GIVE A SHIT about our own well being and future. NONE. How inspiring are we all that we ALLOW the government WE ELECT to strong arm the very oversight bodies charged with protecting our and the planet's health, safety and welfare for the sake of glossing over how bad they have fucked us over the years?
How proud we all must be….a government of the people...for the people….by the people.
Where is the fucking ribbon for that to put on my fucking car?
Hey, someone cue Lee Greenwood!
The question, from today's editorial in the LA Times:
The interesting question is why the U.S. economy, beneficiary since 9/11 of the largest military spending binge in history, now requires $150 billion more in the form of a short-term stimulus package. Why hasn't the $1 trillion in defense spending, in addition to the 2001 and 2003 tax cuts, been sufficient to keep the economic boom going?
The answer, from Economist's View commenter, James Kroeger:
The answer should be apparent to any Democrat[ic] Economist. The incredible borrowing spree of the past several years has really been the only thing that kept the economy from collapsing into a Greatest Depression Ever as a direct result of the massive tax cuts Bush et al. gave to the rich. Reducing the income tax rates of rich people is always CONTRACTIONARY.
I strongly recommend reading Kroeger's entire comment here. One of this country's biggest exports has been money.
While there is a housing surplus in almost every other county in the USA, the house prices in New York County continue to rise, driven by high demand, premium locations, wealthy foreign buyers, and wealthy locals. New York City is enjoying a golden age right now, while the rest of the American housing market slides. Even a weakened dollar helps the New York housing market to some extent.