Clitoral Economics

With all the talk about how to stimulate it, you’d think that the economy is a giant clitoris. Ben Bernanke may not employ this imagery, but the immediate challenge–and the issue bound to replace Iraq and immigration in the presidential race–is how best to get the economy engorged and throbbing again.

It would be irresponsible to say much about Bush’s stimulus plan, the mere mention of which could be enough to send the Nikkei, the DAX, and the curiously named  FTSE and Sensex tumbling into the crash zone again. In a typically regressive gesture, Bush proposed to hand out cash tax rebates–except to families earning less than $40,000 a year. This may qualify as an example of what Naomi Klein calls “disaster capitalism,” in which any misfortune can be re-jiggered to the advantage of the affluent.

But even the liberal stimulus proposals have me worried—not so much for their content as their rationale. Most liberals want a stimulus package that includes an increase in food stamp allotments and an extension of unemployment benefits, which are both screamingly obvious measures. Currently, the food stamp allotment amounts to about $1 per meal, and when four Democratic congresspersons tried living on that for a week last May they ended up even crankier than if they’d had to sit through a week-long filibuster by Tom DeLay.

As for unemployment benefits: They last just 25 weeks in most states and end up covering only a third of people who are laid off. If ever there was a time to create a real working system of unemployment compensation, it is now. Citigroup has announced plans to eliminate 21,000; investment banks in general will shed 40,000. The mortgage industry is in a state of melt-down; and Sprint – how did they get into this?—will lay off 4000 full-time employees as well as 1600 part-time and contract workers.

The economic rationale for more a progressive stimulus package, which we hear now several times a day, is that the poor and the freshly unemployed will spend whatever money they get. Give them more money in the form of food stamps or unemployment benefits and they’ll drop more at the mall. Money, it has been observed, sticks to the rich but just slides off the poor, which makes them the lynchpin of stimulus. After decades of hearing the poor stereotyped as lazy, stupid, addicted, and crime-prone, they have been discovered to have this singular virtue: They are veritable spending machines.

All this is true, but it is also a form of economy fetishism, or should I say worship? If we have learned anything in the last few years, it is that the economy is no longer an effective measure of human well-being. We’ve seen the economy grow without wage gains; we’ve seen productivity grow without wage gains. We’ve even seen unemployment fall without wage gains. In fact, when economists want to talk about life “on the ground,” where jobs and wages and the price of Special K are paramount, they’ve taken to talking about “the real economy.” If there’s a “real economy,” then what in the hell is “the economy”?

Once it was real-er, this economy that we have. But that was before we got polarized into the rich, the poor, and the sinking middle class. Gross social inequality is what has “de-coupled” growth and productivity from wage gains for the average household. As far as I can tell, “the economy,” as opposed to the “real economy,” is the realm of investment, and is occupied by people who live on interest and dividends instead of salaries and wages, aka the rich.

So I’m proposing a radical shift in rhetoric: Any stimulus package should focus on the poor and the unemployed, not because they spend more, but because they are in most in need of help. Yes, when a parent can afford to buy Enfamil, it helps the Enfamil company and no doubt “the economy” too. But let’s not throw out the baby with the sensual bubble bath of “stimulus.” In any ordinary moral calculus, the baby comes first.

Far be it from me to make the revolutionary suggestion that babies are more important than profits. My point is just that our economy–with its dizzying bubbles, wild lending sprees, reckless downsizings, and planet-wide hyper-sensitivity – has gotten too far disconnected from ordinary human needs. We could take the current crisis as an opportunity to fix that, at least in part, by shoring up government support for the needy and the dislocated. Or we can wait around and watch while the appropriate imagery gets nasty, as this ghostly creature, “the economy,” starts acting like a nymphomaniac junkie in withdrawal.

Comments

[chris]

Barb wrote:

"Far be it from me to make the revolutionary suggestion that babies are more important than profits."

Yeah. Babies are more important. That's why over 1.1 million women kill one each year.

[Brian]

What if the people of a nation were on a bell curve with the meek and mild on the extreme left end or tail, and the aggressive and psychopathic were on the far right end or tail. Then in theory the middle or majority in the bell curve would be the average in all ways. Now imagine that the aggressive and psychopathic(like many of our corporate and governmental titans) wrote laws and regulations, an in-bred and old boy/girl network that created a cluster of wealthy families over several generations that managed to pull the whole bell curves wealth over to themselves over time. So superimpose a wealth bell curve that shifts way to the right over the first meek to aggressive people curve and what have you? America, free enterprise gone amuck, laws, earning and tax regiemes, favoring the rich, wealth constantly shifting over to them. Their tools, the media, the police state, the fantasy that anyone can be president if they just try hard enough. Hillary yale Law School, Bill yale law school, rhodes scholar, george bush harvard mba, paulson ex-ceo goldman sachs, bernache Princeton economics chair, etc etc I could generate a long long list if I looked it up all night. Even jim cramer, small investors advocate harvard law, goldman sach's(lots of goldman sach's alumni in all facets of gov and well if its big, you name it). And all the bits of wealth of all the working people that is kicked up to these people, who spin what they do into them somehow doing "public service". Please. Did High School varsity teams really do a public service for the student body? No they cost the student body other options that the money could have been spent on. So what to conclude? Is our democracy a myth, carefully spun and manipulated, the velvet glove of an iron fisted growing police state to keep hold of an increasingly restive worker population? Are workers simply innocents in this or is there some dysfunctional co-enabling relationship of entangled abuse going on? Are we simply a modern credit card Rome that lets the Senate run amuck with the public treasury and Cesar wage any ole war he pleases with the nations blood and treasure? Judges even belive they have the right to judge because the law says they do, but who's law is that? One of the first things the colonists did right after the revolution was to gut the judicial system as it was formerly used by the British to win their cases for them. Why would that be any different today when we have an untouchable aristocracy using the courts once again to their advantage. Its amazing that nobody really follows and analyses the Supreme Court, our third branch of government, in the cases they hear and why, and in their decisions and thinking. More will be said of a members sex or ethnicity than anything about the case law they try that fundamentally changing our democracy in deep, deep ways. Our justice system has totally ignored the fraudulant activities involved in fueling our current financial breakdown. This happened because people lied, and signed their names to the lies, then reneged and walked away. Except the corporate insiders walked away with huge money and their shills got huge bonuses. Wall street paid itself 37-9 billion dollars in bonuses this year for all the "fine" work they did. Yet, no mention of the outright fraud, yet the war on drugs puts nonviolent small possession "arrestees" in jail and prisons not fit to sell themselves as even animal shelters. Its beyond shame. Its a police state run by the aggressive on the rest of us. The expensive traffic stops and parking tickets is just a reminder of who controls things. You may think I am being overly dramatic, but this is how its done in modern times.

[cookie]

I agree with Barbara's comments in theory - better unemployment benefits, more effective and generous food stamp allocation and, as discussed in previous columns, a universal basic health care system.

However, that ship has sailed. We do not live in a theoretical world, we are starting to run up against reality. By 2013, we will be steamrollered by it. The US government is not in a position to expand entitlement programs, no matter how justified.

For those who haven't seen it, I recommend that you watch the recent 60 Minutes interview with U.S. Comptroller General David Walker for a blunt assessment of the current and future budget situation and consequences.

A link to the archived episode may be found here:

http://video.google.com/videoplay?docid=-7461407498377956300

[Ken]

If the Clitoral Economy could just experience and earth-shattering, trembling in its knickers orgasm then perhaps class tension would be released and the economy could exist again primarily for the good of the people rather than the people existing primarily for the good of the economy.

[JCS]

Brian,
Well said and spot on.

[Dawn]

My husband and I were discussing the need to try funding the poor and see how it trickles to the rich.

We saw a need for a change in the trickle down theory, citing how rather than help grow the economy, feeding money and tax breaks to the rich helps to grow the profits. More people have lost jobs, their ability to be consumers, in the name of profits than for any other reason.

No one seems to know how much profit is enough. And those with the power and money seem to find this a game of finding the tipping point -- when they have too much profit. So far, none of the wealthy have decided that one can be too wealthy.

I've been reading about the homeless, the poor, the drugged out, the death of our young stars due to drugs and desperation. What a sad statement that some compassion, some reason, some investment, some caring could turn that around. I think as a country, we have reached that tipping point where 'profit' has turned into a detriment for us all -- the wealthy are still floating in that beaker of gradually heating water and haven't realized that they're cooking their own goose by contributing to the downfall of the middle class.

Dawn

[Anarcissie]

Barbara: '... Far be it from me to make the revolutionary suggestion that babies are more important than profits. My point is just that our economy–with its dizzying bubbles, wild lending sprees, reckless downsizings, and planet-wide hyper-sensitivity – has gotten too far disconnected from ordinary human needs. We could take the current crisis as an opportunity to fix that....'

I think we are more or less stuck with revolution -- not in the sense of civil war but in the sense of profound and maybe very difficult change. As things stand now, the authorities cannot simply create a few bushels of alms and throw them to the poor, as so many liberal and leftists voices are suggesting, and necessarily get any kind of constructive result. After twenty years or more of false statistics, false interest and exchange rates, and false money, the economy is probably hitting the wall, and giving the poor currency or the promise thereof may result in no more than sharp inflation in prices without any real increment of goods and services in their lives. It would be nice if the revision and correction of present economic structure could be made rationally, but if people were rational we wouldn't be faced with the current crisis in the first place. Instead, I think events will be at the mercy of the usual blind forces.

[Buena]

Thanks, Barbara. I almost busted a gut laughing at your first paragraph.

Everything you say is true down here in the real world. I've got a little bit of money in an IRA and I fear it will disappear before I can touch it.

[chris]

dawn writes:

"My husband and I were discussing the need to try funding the poor and see how it trickles to the rich."

It's been done. Lyndon Johnson started it in large-type, UPPER-CASE letters -- The Great Society.

Massive housing, food, education and social-program giveaways.

What did all that lead to? Larger government expenditures.

Has the practice of giving everything to the poor reduced poverty? A little.

But the thing that made the difference was unleashing the productive power of the American economy. That's why there's money to give away.

Where's the mystery? North Korea and Cuba are bankrupt because their economies are based on fantasy economic theories. If the US were to embrace the marxist/socialist policies of those countries, the US would become as bereft of everything as those two dying nations.

We saw a need for a change in the trickle down theory, citing how rather than help grow the economy, feeding money and tax breaks to the rich helps to grow the profits. More people have lost jobs, their ability to be consumers, in the name of profits than for any other reason.

No one seems to know how much profit is enough. And those with the power and money seem to find this a game of finding the tipping point -- when they have too much profit. So far, none of the wealthy have decided that one can be too wealthy.

I've been reading about the homeless, the poor, the drugged out, the death of our young stars due to drugs and desperation. What a sad statement that some compassion, some reason, some investment, some caring could turn that around. I think as a country, we have reached that tipping point where 'profit' has turned into a detriment for us all -- the wealthy are still floating in that beaker of gradually heating water and haven't realized that they're cooking their own goose by contributing to the downfall of the middle class.

[Chickensh*tEagle]

chris wrote: "Yeah. Babies are more important. That's why over 1.1 million women kill one each year."

And probably why an approximately equal number of men beget them in the first place.

[chris]

dawn writes:

"My husband and I were discussing the need to try funding the poor and see how it trickles to the rich."

It's been done. Lyndon Johnson started it in large-type, UPPER-CASE letters -- The Great Society.

Massive housing, food, education and social-program giveaways.

What did all that lead to? Larger government expenditures.

Has the practice of giving everything to the poor reduced poverty? A little.

But the thing that made the difference was unleashing the productive power of the American economy. That's why there's money to give away.

Where's the mystery? North Korea and Cuba are bankrupt because their economies are based on fantasy economic theories. If the US were to embrace the marxist/socialist policies of those countries, the US would become as bereft of everything as those two dying nations.

Dawn writes:

"We saw a need for a change in the trickle down theory, citing how rather than help grow the economy, feeding money and tax breaks to the rich helps to grow the profits. More people have lost jobs, their ability to be consumers, in the name of profits than for any other reason."

Take a course in economics. Your conclusions are wrong.

You wrote:

"No one seems to know how much profit is enough. And those with the power and money seem to find this a game of finding the tipping point -- when they have too much profit. So far, none of the wealthy have decided that one can be too wealthy."

Wealth is not determined by the wealthee. Wealth results from giving consumers something they want. No one is stopped from entering this game. Lemonade stand to Microsoft, the chance to profit is wide open.

Unlike, say, Cuba, where earning a profit is generally a crime against the state. Hence, most people honor the law and stay poor, as they fester while sitting around on their island prison.

Dawn writes:

"I've been reading about the homeless, the poor, the drugged out, the death of our young stars due to drugs and desperation. What a sad statement that some compassion, some reason, some investment, some caring could turn that around."

Yeah. I feel terrible about Heath Ledger. At 28 he had enormous career success, a beautiful child, endless amounts of money -- he was living in an apartment that rented for $23,000 a month. Twenty-three THOUSAND a month -- but his poor world-weary soul could not take another day of his miserable existence.

What an idiot. What a selfish jerk. Kiling himself and leaving his child without her father.

Dawn writes:

"I think as a country, we have reached that tipping point where 'profit' has turned into a detriment for us all -- the wealthy are still floating in that beaker of gradually heating water and haven't realized that they're cooking their own goose by contributing to the downfall of the middle class."

Your well of economic nonsense is overflowing. Put a cork in it.

If it weren't for the wealth-builders of this country, the complainers would find themselves living in mud huts and drinking dirty water, like about 500 million Africans.

[Lulu]

Isn't it interesting that the Chrises of the world are so protective of fetuses and so careless regarding the well being of actual babies?

The Great Society was really underorganized. Social programs need to work with local agencies and community groups to ensure that funds are spent wisely, that accountability is built in from the beginning.

Worship of free markets is holding church in the World of Mammon. It's too bad that the proponents of free market workship are dominating academia... they have pretty much stifled debate. Now that's not a free market of ideas.

[Lulu]

Isn't it interesting that the Chrises of the world are so protective of fetuses and so careless regarding the well being of actual babies?

The Great Society was really underorganized. Social programs need to work with local agencies and community groups to ensure that funds are spent wisely, that accountability is built in from the beginning.

Worship of free markets is holding church in the World of Mammon. It's too bad that the proponents of free market workship are dominating academia... they have pretty much stifled debate. Now that's not a free market of ideas.

[Buena]

Yes, Lulu! Apparently many people believe fetuses are innocent and wonderful. But if they're born into poverty they are immediately lazy, bad babies who just want everything handed to them.

How dare they? Why should they get my hard-earned tax dollars when that money needs to be spent to kill Iraqi children?

[hazel]

Barbara wrote:
"As far as I can tell, “the economy,” as opposed to the “real economy,” is the realm of investment, and is occupied by people who live on interest and dividends instead of salaries and wages, aka the rich."

also the retired

[Dawn]

Chris wrote: Wealth is not determined by the wealthee. Wealth results from giving consumers something they want. No one is stopped from entering this game. Lemonade stand to Microsoft, the chance to profit is wide open.

Dawn: Wealth also grows from cutting jobs, salaries, benefits, and demanding that people do more work for less income. Wealth grows from sending jobs to third world countries. Wealth grows from cutting corners on quality in the product. Wealth grows from cutting out the product entirely and dealing in junk bonds. Wealth seems to grow best in an environment where morals and humanity are absent.

Dawn

[Anarcissie]

chris: '... But the thing that made the difference was unleashing the productive power of the American economy. That's why there's money to give away. ...'

The problem being that the money no longer represents wealth (that is, goods and services of real value). That is the result of many years of going in hock to the Chinese and so forth, under Reagan and Bushes I and II in order to pump up absurd stock and real estate prices, corporate executive salaries, and idiotic wars.

If you call that "unleashing" people are going to be calling for a leash, if not a noose.

[roger]

dawn: " I've been reading about the homeless, the poor, the drugged out, the death of our young stars due to drugs and desperation. What a sad statement that some compassion, some reason, some investment, some caring could turn that around. "

my taxes pay for all of the following: food stamps, medicaid, medicare, social security (retirement, ssi, survivors), section 8 housing assistance, baby your baby program, CHIP, child care assistance, financial assistance, sub for santa, utility assistance.

for a person who works until age 65 and dies at age 80 taxes would be extracted from gross pay in a confiscatory manner for 50 years of the period of employment and for 15 years of retirement. that would be 65 years of payment into the rathole of government to be redistributed by those thieves and fools in washington. i gather that you see this as insufficient compassion and investment.

as for heath ledger he was a multimillionaire who left a child for idiot selfish reasons and is not deserving of sympathy.

[roger]

barbara: " Far be it from me to make the revolutionary suggestion that babies are more important than profits. "

i live in a small town in the west. we have a meat processing plant in town which employs a large number of hispanics. the plant is over 85% hispanic many of which lack all of the following: 1) citizenship status, 2) english proficiency, 3) specialized employment skills, 4) grade school education.

the work is difficult, monotonous, and unpleasant. the hourly wage is above the average for this part of the country and the sign on bonus is now $1500 and assistance with the down payment on a house. the down payment assistance is coordinated through a local real estate agency. let us be quite clear. these persons earn a living wage in exchange for unskilled manual labor without the benefit of english nor any level of american education and this circumstance is made possible because the plant makes a profit. my suggestion is that many babies benefited from this arrangement.

[roger]

brian: "So what to conclude? Is our democracy a myth, carefully spun and manipulated, the velvet glove of an iron fisted growing police state to keep hold of an increasingly restive worker population? Are workers simply innocents in this or is there some dysfunctional co-enabling relationship of entangled abuse going on?"

i recently finished a book entitled crossing the river by victor grossman. he was in the military in the 50s and a communist. he swam across the danube river and eventually defected to the german democratic republic. he described living in the gdr and the eventual failure of the state by pressure from capitalism in west germany and glasnost in the soviet union. the description you give above better describes the gdr than it does america. the gdr exchanged employment security and guarantee of social services for lack of true freedom and the need for an enforced frontier. grossman defected in an effort to "build socialism" and yet the socialist state failed utterly. there is a lesson there.

[Chickensh*tEagle]

roger: "these persons earn a living wage in exchange for unskilled manual labor"

How quickly do you think you could get reasonably proficient at disassembling cows as fast as those jobs require without chopping your own fingers off?

In our economy, that word "unskilled" often means having skills most other people have no wish to acquire and don't really want to pay you for having.

[roger]

no this is unskilled labor. income, benefits and stability are accessed in exchange for manual labor. this is opportunity that millions throughout the world would sacrifice dearly to have. and the element that opens these doors is the dreaded profit.

[Chickensh*tEagle]

So, manual labor = unskilled labor?

You didn't answer my question: how fast do you think you could learn to to it?

[roger]

cutting meat is a simple process. the carcass moves from one station to the next and the worker makes the same cuts to each carcass at each station. it is something you learn in a day.

yes manual labor is the same as unskilled labor. that is why business wants a large pool of exploitable manual workers. this is why there is no substantial immigration reform.

on the other hand this is exceptional financial opportunity for workers coming from the south.

[Anarcissie]

roger: '... the gdr exchanged employment security and guarantee of social services for lack of true freedom and the need for an enforced frontier. grossman defected in an effort to "build socialism" and yet the socialist state failed utterly. there is a lesson there. ...'

One would think. And yet in spite of it, here in America people are giving their freedom away without even getting the social services.

So maybe it's _freedom_ that's the problem. If only they could get rid of it and still have tons and tons of big people's toys, not for everyone of course, but for the good folks.