We Are All South America Now

At the point in the World Cup when five South American teams had made it to the knockout round and European teams like Italy and England performed badly, I wondered whether this year’s Cup would be a kind of revenge on the IMF. All these South American countries that had spent much of the 80s and 90s struggling with onerous debt crises were winning. Teams from Europe, which is now being subjected to similar austerity measures, were losing or failing to qualify (and for a while, PIIGS countries like Ireland, Greece, and especially Italy were having particularly bad years). I thought the Cup might end up marking a symbolic shift of dignity away from Europe at a time when Europe is being treated as South America once was.

All that was before Spain won everything and Brazil and Argentina underperformed, of course. So now the lesson I take from the Cup is that in this day and age, when the Dutch go to South African and try to prevail through raw brutality, they fail.

While my first World Cup lesson was wrong, it does go to something I’ve been thinking about a lot lately: how average people in rich countries are being abused, through some old but also some new tactics, to the same treatment much of the developing world suffered from in earlier decades. The elite would suck the money out of the economy into their protected bank accounts, and then leave average people paying the debt.

I’ll surely have more to say about what I mean. But with that in mind, read this post from Yves Smith and the Martin Wolf book review it links to. Wolf notes:

We already know that the earthquake of the past few years has damaged western economies, while leaving those of emerging countries, particularly Asia, standing. It has also destroyed western prestige. The west has dominated the world economically and intellectually for at least two centuries. That epoch is over (see charts). Hitherto, the rulers of emerging countries disliked the west’s pretensions, but respected its competence. This is true no longer. Never again will the west have the sole word. The rise of the Group of 20 leading economies reflects new realities of power and authority.

Yet this is far from the only change in the global landscape. The crisis has revealed deep faults within western economies and the global economy as a whole. We may be unable to avoid further earthquakes.

In his book, Prof Rajan points to domestic political stresses within the US. Related stresses are emerging in western Europe. I think of it as the end of “the deal”. What was that deal? It was the post-second-world-war settlement: in the US, the deal centred on full employment and high individual consumption. In Europe, it centred on state-provided welfare.

In the US, soaring inequality and stagnant real incomes have long threatened this deal. Thus, Prof Rajan notes that “of every dollar of real income growth that was generated between 1976 and 2007, 58 cents went to the top 1 per cent of households”. This is surely stunning.

“The political response to rising inequality … was to expand lending to households, especially low-income ones.” This led to the financial breakdown.

Much of Yves’ response to this focuses on how a shift in policy emphasis away from full employment and a disempowerment of unions created the need to provide easy credit to ensure that people kept spending and therefore created the demand that makes the economic system hum.

So the new program was to reduce workers’ bargaining power, both by combating unions, and by tolerating un and underemployment. Rising worker wages had been seen as crucial to greater prosperity; it was quietly abandoned as a policy goal. But this has profound implications. As rising income inequality demonstrates, the benefits of growth accrued substantially to those at the very top. But absent a few wastrels, people with that level of income are not going to spend as much of their income on consumption as those less well off. Thus (in very crude terms) Keynes’ problem of the paradox of thrift, that the understandable desire of households to save can result in insufficient demand, becomes even more acute when it it pretty much only the rich who are getting richer.

If workers’ wages don’t start growing, there won’t be the demand for a full recovery. Yet the response has been to cut the safety net promised so long ago–to continue to take from the poor.

And in related news? The average American can’t afford to buy the average American car.

  1. klynn says:

    Thanks for this post EW.

    The North-South dialectic has been an interesting one.

    Scarecrow’s post did a great job of addressing the GOP policy of “the rich get richer and the economy tanks” the other day.

  2. Leen says:

    “The elite would suck the money out of the economy into their protected bank accounts, and then leave average people paying the debt

    Privatizing profits, socializing losses. Such a deal for the rich.

    Growing up in a large union family and hearing union talk all of the time in my youth. I have come to appreciate that upbringing more in my fifth decade. Being away from that union world for 39 years and now spending so much time with union retirees in nursing homes and assisted living facilities. Witnessing the need for a union for service workers up close. Those nurses aides etc work their ever loving asses off wiping seniors asses. They are paid pathetic wages for the work they do.

    This morning on NPR they did a segment on the european union social welfare system. Goes along with your topic.

    Can The European Welfare State Survive?

    the topic at 11 over at the Diane Rehm show goes with your topic also

    The future of America’s empire

    Wednesday, July 14, 2010 – 11:06 a.m.

    * 10 a.m. (ET) The Administration Confronts Its Flagging Popularity
    * 11 a.m. (ET) The future of America’s empire

    The future of America’s empire

    A look at how the U.S. chooses to use its power in the world and lessons to be learned the rise and fall of empires through the ages.

    A look at how the U.S. chooses to use its power in the world and lessons to be learned the rise and fall of empires through the ages.
    Bruce Fein

    former associate deputy attorney general, Republican counsel during the Iran-contra hearings, and founding partner with the Lichfield Group
    David Cole

    professor of law at Georgetown University Law Center and author of “The Torture Memos: Rationalizing the Unthinkable”. Previous books include “Less Safe, Less Free,” and “Terrorism and the Constitution.”
    David Frum

    editor, FrumForum.com, dedicated to the modernization and renewal of the Republican party and the conservative movement.

    author of “Comeback: Conservatism That Can Win Again”, and co-author of “An End to Evil: What’s Next in the War on Terror;” former speechwriter and special assistant to President George W. Bush (2001-02).


    Can anyone tell me what David Frum would add to this conversation? Why not Flynt Leverett or Professor Juan Cole. The Rehm show’s guest rolodex sure is limited.

      • Leen says:

        So not qualified. David “axis of evil” Frum. Wondering how he feels about being part of the team to lie our nation into a war based on a pac of lies. Part of the team bringing down the U.s.

        Hope folks send in questions to Frum or to that show. Just got a question through about Bradley Manning.

  3. harpie says:

    Thanks, EW!

    It sometimes seems we’re headed for a place as close to slavery [or at least continuous indentured servitude] as possible.

    Quite likely that’s over-the-top…or is it?

    I once thought Elizabeth Wheeler could help change the tide.

    The Coming Collapse of the Middle Class; Elizabeth Warren; 3/8/08; Jefferson Lecture


    I don’t know how her work is going now. Guess I’ll go take a look.

    • DWBartoo says:


      Wheeler and Warren.

      Sounds like a winning ticket to me, harpie.

      Certainly it would be the most-honest, instructive, and wisest duo this sorely perplexed nation could place at the the helm.


      • harpie says:

        Ha! Can’t believe I did that! [I even proof read twice…maybe two cups of coffee just isn’t enough, any more.]

        But…”Hmmm” is right!

        • DWBartoo says:

          I never question the “ways” of inspiration, harpie, I merely marvel upon it.

          Especially when it is profound, and, apparently, obvious, once realized.

          Wisdom works its wondrous ways, and, should we be open, should we be paying appropriate attention, we might, just possibly, chance to apprehend, to “understand”, and, thereby, change our lives and fate …


  4. nomolos says:

    If France Thierry Henry, had not blatantly cheated Ireland would have been in The Cup and, no, they are not having and did not “have a particularly bad year” except for the fact that they were not in The Cup. Surely you of all people, being that you are married to an upstanding Irishman, would have your facts straight when it comes to Football!!!!

  5. temptingfate says:

    I read Yves post on this earlier this morning. Much like Ratigan’s increasingly targeted message about the financial industry effectively taking the oxygen out of the room via ongoing bailouts, the movement of massive amounts of wealth into the pockets of the few has lead to a feedback loop. Having too much concentrated wealth, surprisingly is exactly the kind of problem that one of the fathers of capitalism, Adam Smith, warned against. He expected results that are little different than we have today though he probably never imagined that it would get to a government so completely captured. The continual priority of eliminating risk to the massively wealthy by containing inflation – wage and employment growth for the middle class – suggests that we are far from done with this downward spiral.

    • fatster says:

      Studying the US Statistical Abstracts showed decades ago that the service sector in the US was growing rapidly–and so was the managerial/technical class. One particular expert, who also studied Latin America closely, saw earlier on than most that such trends were occurring and explored their origins. Here’s an example from among his many published works that you might find of interest.

  6. Knut says:

    I think there is a fair amount of truth in the ‘bread and circuses’ theory of policy — cheap credit for the poor to disguise their falling real wage. But I think that it probably best describes the conventional wisdom among the policy-making elite. It seems pretty clear to me at least that the thrust of Geithner’s economic policy has been to get private consumption rolling again. Conventional wisdom (wrong here) holds that all this takes is easier credit — hey, it worked the last time (or so it seemed). It is all very frustrating to us old-time and well-trained Keynesian economists, of whom Paul Krugman is probably the youngest surviving member of that generation.

  7. TarheelDem says:

    Wikipedia on Nestor Kirchner:

    Kirchner kept the Duhalde administration’s Minister of the Economy, Roberto Lavagna. Lavagna also declared that his first priority now was social problems. Argentina’s default was the largest in financial history, and ironically it gave Kirchner and Lavagna significant bargaining power with the IMF, which loathes having bad debts in its books. During his first year of office, Kirchner achieved a difficult agreement to reschedule $84 billion in debts with international organizations, for three years. In the first half of 2005, the government launched a bond exchange to restructure approximately $81 billion of national public debt (an additional $20 billion in past defaulted interest was not recognized). Over 76% of the debt was tendered and restructured for a recovery value of approximately one third of its nominal value…

    On 15 December 2005, following Brazil’s initiative, Kirchner announced the cancellation of Argentina’s debt to the IMF in full and offered a single payment, in a historical decision that generated controversy at the time ….

    While a critic of neoliberalism, Kichner does not describe himself as an opponent of markets and the private sector.

    Kirchner has emphasized holding businesses accountable to Argentina’s democratic institutions, laws prompting environmental standards, and contractual obligations. He has pledged to not open his administration to the influence of interests that “benefited from inadmissible privileges in the last decade” under Menem. These groups, according to Kirchner, were privileged by an economic model that favored “financial speculation and political subordination” of politicians to well-connected elites. For instance, in 2006, citing the alleged failure of Aguas Argentinas, a company partly owned by the French utility group Suez, to meet its contractual obligation to improve the quality of water, Kirchner terminated the company’s contract with Argentina to provide drinking water to Buenos Aires.

    If we are all South America now, let’s start pursuing the political and economic strategies of Nestor Kirchner and Lula da Silva.

      • TarheelDem says:

        If Kirchner and Lula are what passes for “revolution” in the 21st century, we are well over the right-wing precipice. What would the elites do if confronted with a real revolution?

    • emptywheel says:

      Between Kirchner’s refusal to play by the old, loser rules any more and the populist governments around Latin America, there’s some recognition that they needed to stop playing those games anymore. Yes.

  8. alank says:

    There’s been a steady draining of long-term capital investment as a result of the continuous inflationary policy of the Fed over a period of decades. Mid- and short- all the way down to microsecond term investment have reigned in that period. Thus the loss of basic industry that kept many people employed. In the 1970s, some berk (an economist) decided we had advanced to a “service economy” and had abandoned the industrial revolution. Well that was a whole heap of bullshit. What we have become, as a result of Fed policy, is an agrarian economy that produces basic raw materials for export. Our imports are mostly finished goods. We have become a third world country in all but name.

  9. Knut says:

    Conservative economists in my day use to rail at the regulatory agencies like the FCC and the FTC as having been captured by ‘special interests,’ which they used as an argument to simply undo the regulation. Now our whole government has been captured by special interests, who figured out how to do it sometime between Nixon and Reagan.

  10. Leen says:

    bingo ot

    just got this one through the BBC World Service. They were talking about the word war between Gordon Brown and Tony Blair. Tony had called Gordon “mad, bad, dangerous”

    “Tony Blair calling Gordon Brown “mad, bad and dangerous” is definitely a case of the kettle calling the pot black. Tony may not be counting but there are hundreds of thousands of Iraqi people dead, injured and millions displaced due to his decision to support a “mad, bad and dangerous” invasion of Iraq.”

    • skdadl says:

      Heh. “Mad, bad, and dangerous to know” is Lady Caroline Lamb’s famous description of Lord Byron. (She wasn’t all that tame herself.)

      Very odd thing for Blair to call Brown. Sort of romantic, really.

      Happy Bastille Day, everyone. Liberty, equality, fraternity, sorority.

      • Leen says:

        Just sent this one to the Diane Rehm show. They are talking about Obama’s falling poll numbers. David Axelrod was on. Will probably not make it. Just had one get through last week about Bradley manning

        David many progressives are angry that the Obama administration has not held the Bush administration accountable for the lies repeated in the run up to the invasion of Iraq and the torture that has taken place. Why is it that Obama only brings up the past when he wants to rightfully blame the Bush administration for the failing economy. But when the lies leading up to the war, torture he says things like “turn the page, next chapter, we need to move forward, don’t be about retribution, or be on witch hunts”

        At what point did holding people accountable for serious crimes start being defined as retribution and not justice? This spin to move forward sounds like a Karl Rove public relations strategy.

      • brendanx says:

        Besides all those nice things it’s apt to reflect on the bloodier sentiments in the Marseillaise, too, in light of all the new entraves we’re all being asked to bear.


        On that note, here’s a film recommendation for Bastille day: Renoir’s “La Marseillaise”. I liked it a lot better than his more famous films.

        • thatvisionthing says:

          ah fervent, glorious war — sounds like the Battle Hymm of the Republic, which I read an article about this year. It was written by Julia Ward Howe in 1861 for the Civil War, which she came to detest, and so in 1870 she called for a gathering of women to end war. Which is how Mother’s Day started.

          Julia Ward Howe’s Mother’s Day Proclamation of 1870

          “Arise then, women of this day! Arise, all women who have hearts, whether your baptism be that of water or tears!

          “Say firmly: ‘We will not have great questions decided by irrelevant agencies.

          Our husbands shall not come to us, reeking with carnage, for caresses and applause.

          Our sons shall not be taken from us to unlearn all that we have taught them of charity, mercy and patience.

          We women of one country will be too tender of those of another to allow our sons to be trained to injure theirs.’

          “From the bosom of the devastated earth, a voice goes up with our own. It says, ‘Disarm, disarm!’

          The sword of murder is not the balance of justice. Blood does not wipe out dishonor, nor does violence indicate possession.

          As men have often forsaken the plow and the anvil at the summons of war, let women now leave all that may be left of home for a great and earnest day of counsel.

          Let them meet first, as women, to bewail and commemorate the dead. Let them solemnly take counsel with each other as to the means whereby the great human family can live in peace, each bearing after his own time the sacred impress, not of Caesar but of God.

          “In the name of womanhood and of humanity, I earnestly ask that a general congress of women without limit of nationality may be appointed and held at some place deemed most convenient and at the earliest period consistent with its objects, to promote the alliance of the different nationalities, the amicable settlement of international questions, the great and general interests of peace.”


        • fatster says:

          This verse from “When Johnny Comes Marching Home Again” always kind of wrapped it up for me:

          Ye haven’t an arm, ye haven’t a leg, hurroo, hurroo
          Ye haven’t an arm, ye haven’t a leg, hurroo, hurroo
          Ye haven’t an arm, ye haven’t a leg
          Ye’re an armless, boneless, chickenless egg
          Ye’ll have to put with a bowl out to beg
          Oh Johnny I hardly knew ye.

        • Leen says:

          Have seen and talked with some of those armless, legless Vets just outside Union station in D.C. Often sitting around the memorials just across the street. Some of them begging for money.

        • thatvisionthing says:

          I would say Princess Bride is a perfect movie except for this:

          Prince Humperdinck: First things first, to the death.
          Westley: No. To the pain.
          Prince Humperdinck: I don’t think I’m quite familiar with that phrase.
          Westley: I’ll explain and I’ll use small words so that you’ll be sure to understand, you warthog faced buffoon.
          Prince Humperdinck: That may be the first time in my life a man has dared insult me.
          Westley: It won’t be the last. To the pain means the first thing you will lose will be your feet below the ankles. Then your hands at the wrists. Next your nose.
          Prince Humperdinck: And then my tongue I suppose. I killed you too quickly the last time. A mistake I don’t mean to duplicate tonight.
          Westley: I wasn’t finished. The next thing you will lose will be your left eye followed by your right.
          Prince Humperdinck: And then my ears, I understand let’s get on with it.
          Westley: WRONG. Your ears you keep and I’ll tell you why. So that every shriek of every child at seeing your hideousness will be yours to cherish. Every babe that weeps at your approach, every woman who cries out, “Dear God! What is that thing,” will echo in your perfect ears. That is what to the pain means. It means I leave you in anguish, wallowing in freakish misery forever.

          That– hurts. I don’t expect Obama or Bush to be watching that movie much, but the women… I’m back to @75. Chris Hedges has written about this. He looked. And asked. And listened.

        • fatster says:

          I’m certain you have. Far too many have given far too much and been rewarded with far too little. That particular verse is one of the most powerful anti-war messages of all to me.

  11. brendanx says:

    On a kind of related note, there’s a Post article today about how China is promoting a social safety net in order to encourage more consumption at home.

    Can’t find link right now.

    • TarheelDem says:

      Kinda boggling, isn’t it. A country run by a communist party makes news by saying it’s thinking about expanding a social safety net.

      • fatster says:

        They can call themselves whatever they want, but they are a totalitarian regime. It seems with the increase in material success there are also signs of unrest and nascent struggle among the people. Increased business with the west is also presenting a pr challenge for them. Tibet, however, is a constant reminder of the brutish underside.

        • brendanx says:

          Condoleezza Rice was once rightly mocked for calling Iran “totalitarian” instead of “authoritarian”. China is not totalitarian.

        • fatster says:

          Interesting. Here’s a place to start if you care to explore these terms more.

          “The term ‘an authoritarian regime’ denotes a state in which the single power holder – an individual ‘dictator’, a committee or a junta – monopolizes political power. The term ‘Authoritarian’ refers to the structure of government rather than to society. However, a totalitarian regime does much more. It attempts to control virtually all aspects of the social life including economy, education, art, science, private life and morals of citizens. “The officially proclaimed ideology penetrates into the deepest reaches of societal structure and the totalitarian government seeks to completely control the thoughts and actions of its citizens .”[4]”


  12. brendanx says:

    I was abroad during the second half of the World Cup and consequently consumed a lot of good football coverage I wouldn’t have gotten here, including portraits of a dystopian South Africa and a monstrously greedy, authoritarian FIFA dictating what could be sold, displayed and consumed within a substantial radius of any of the venues.

  13. Petrocelli says:

    Brazil failed to advance because of poor refereeing. In fact, this tournament was the worse display of refereeing ever, and that’s saying something.

    This is a metaphor for present day … workers players do their damnedest but rules are skewed by corruption,
    while the current admin ignores the abuse governing body looks forward.

    • DWBartoo says:

      The game as metaphor for the greater “gaming”?

      Do spectator sports and consequent profundity mix?

      Are the “distractions” spectator sports provide now about to turn right back on life itself, to bring to the fore that which we wish to ignore for even just the briefest moment?

      Say it’s not so, Petro!

      (What a revolting development this is. Many had hoped that “doping” was to be the last connection between sports and what is fancifully termed “real life” … but then we’ve had the Endless Lamentations of the Tiger and his “contractors”, of late … perhaps this “situation”, the worst “ever” refereeing, warrants the use of unmanned whistles and flags? Certainly, the technology must exist and, after the endless wars are ended, the joy-stickers will need SOMETHING to do. This does raise the possibility of sports as war or war as sport, however, so maybe we shouldn’t go “there”?)

      Great to see ya, Petro!!!


  14. alan1tx says:

    And in related news? The average American can’t afford to buy the average American car.

    And in unintended consequences news, some 700,000 perfectly good used cars were crushed thanks to Cash for Clunkers.

    • emptywheel says:

      Well, using the same kind of calculations, the average American COULD afford the average car that met the C4C rules, particularly with the help from the govt.

  15. DrDick says:

    I have long said that the easing of credit in the 680s and 90s was the trick used by the elites to get away with stagnant or declining incomes for most Americans. It allowed them to continue to consume and maintain the same lifestyles as before, though now requiring two incomes rather than just one. This was, however, a devastating illusion which in fact further impoverished the masses and shifted ever more wealth upward. The top 1% have seen their incomes nearly quadruple over the past 30 years, while those for the bottom 60% have remained flat (and actually declined for those in the bottom 20%.

  16. lmka says:

    There is a certain what goes around comes around aspect to the way the international financial elites are sticking it to the people of Europe and America now. For example, for many of us who supported Ronald Reagan (Volker money manipulation wrecks ‘third world’ economies, or who supported Bill Clinton (trade deals wreck ‘third world’ economies), etc., etc., more and more vultures are coming home to roost.

  17. Starbuck says:

    The mad spiral downward brings me to the notion that as more money winds up in fewer hands, the final owner of everything can do nothing.

    Even a loaf of bread will be out of reach.

    There won’t be any.

    It’s the Midas Touch come to fruition.

  18. cregan says:

    On the other hand, it might be good to remember back in the 70’s when everyone expected we were done and the Japanese were going to take over the world. It didn’t happen.

    There was even that song, “I think I’m turning Japanese” or something like that.

    I once was doing a lot of original historical research, and as part of it was reading a lot of old newspapers and publications, diaries, etc. Even though not part of the project, one thing kept recurring so much it made an impression on me: People have been predicting the “sky is falling” consistently all through history.

    No matter what the time period, there were always people saying that all was going to hell in a hand basket, the end of civilization as we know it, etc. And, I am not referring to kooks or crazies.

    Prior to that, I thought it was a trait of current times. No, it has always been there. For sure, each person predicting knew for certain that, in their case, they were right; all was going down the tubes.

    It was just so odd to see it happening again and again.

    • Starbuck says:

      You might enjoy (if that’s the right word) Karl Popper’s “Open Universe” in which he demonstrates that determinism is false, (at least, scientific determinism).

    • TarheelDem says:

      That’s because the sky is always falling — a few shards or maybe a small shower of blue glass at a time.

    • emptywheel says:

      But one of the whole points of looking at the failure of the last 40 years, as opposed ot just the last 5, is that it shows that our “success” since the 1970s has been largely illusory.

      • earlofhuntingdon says:

        Success for the middle class since 1980 has been illusory, given their static incomes and declining share of the wealth. Success for the top 10 and especially the top 1% has been stellar. Their share of wealth and incomes hasn’t been better since, oh, 1929.

        To be slightly reductionist, their increase has come on the back of rising middle class productivity – the inconsistent sharing of those gains is obvious – and egregious state and federal tax laws that allow the rich to keep a larger share of those gains. The second point is the product of coordinated, consistent and intense lobbying of 50 state legislatures, as well as on Capitol Hill. The potential for evil of Reaganesque and Bushista tax cuts is hard to understate.

        Body Heat nothwithstanding, for example, more than a dozen states have done away with the rule against perpetuities. That rule, around since about 1600, was designed to limit the control one rich ancestor had on his descendants’ use of his money, and to limit the number of generations his wealth could be shielded from the tax man. Without it, the wealthy can avoid taxes on their growing pile of money for generations. All they need do is set up trusts in the most politically reliable of those states and invest a suitable chunk of family assets through it. That works, of course, because the feds allow it to by not closing an egregious loophole that promotes income disparity – and the loss of necessary resources to pay for state actions – for no social gain.

        Need anyone ask what the GOP has been doing trying to control those 50 state legislatures? Imagine what they’ll do with state-administered health care “reform” rules.

        • MaryCh says:

          But EoF, that’s CLASS WARFARE!

          At what point will the response to that charge change from

          ‘uh, [incomprehensible]’


          ‘damn straight!’


        • earlofhuntingdon says:

          That it is. Only one side is waging it, which rather increases its odds of doing well by it.

      • cregan says:

        Yes, and that is a good point. My main point is not to get too wrapped up in predictions of one person or another of the sky falling. It is like a common condition of humanity to feel pending doom. Been felt at least back the few thousand years I came across. I don’t know why, but it just is.

    • Surtt says:

      On the other hand, it might be good to remember back in the 70’s when everyone expected we were done and the Japanese were going to take over the world. It didn’t happen.

      That depends on what “It” is.
      St. Reagan and downward spiral of the middle class is a direct result of “It.”
      All the things we are discussing in this post are a direct result of “It.”
      We might have won the battle, but looks like we are slowly losing the war.

      There was even that song, “I think I’m turning Japanese” or something like that.

      BTW, that song was about masturbation…

      • earlofhuntingdon says:

        It’s hard to win a war when one’s economic opponent and its MSM keep telling the rest of us that we’re not fighting one, and that it would be rude to start one. What with all those sonic and water cannons, things could get out of hand, dontchaknow.

        • Surtt says:

          My point was the Japanese scare of the 70s wasn’t just a “the sky is falling” moment.
          It fundamentally changed this country.

        • earlofhuntingdon says:

          Ironically, that early outsourcing was done much the same way as later outsourcing. Companies sold off or expanded overseas without contemplating how they would manage themselves or the risks of doing so. That’s pretty much how much later outsourcing has and is being done. Short-term financial gain is the primary goal; actually running a business that outsourcing changes in form and risks doesn’t seem to get much attention.

          Japan-bashing in the 1970’s was highly manipulated; it didn’t make US companies more aware or talented in dealing with the buyers of their manufacturing plant or their new offshore sources for its products. But the process of critiquing it became emotional bashing, which made the business of critiquing it suspect. All in, a very good move for the exponents of outsourcing. Not so good for American labor or its economy.

  19. Leen says:

    Coming up next on the Rehm show
    Lines up with EW’s topic

    The future of America’s empire

    Wednesday, July 14, 2010 – 11:06 a.m.

    * 10 a.m. (ET) The Administration Confronts Its Flagging Popularity
    * 11 a.m. (ET) The future of America’s empire

    The future of America’s empire

    A look at how the U.S. chooses to use its power in the world and lessons to be learned the rise and fall of empires through the ages.

    A look at how the U.S. chooses to use its power in the world and lessons to be learned the rise and fall of empires through the ages.
    Bruce Fein

    former associate deputy attorney general, Republican counsel during the Iran-contra hearings, and founding partner with the Lichfield Group
    David Cole

    professor of law at Georgetown University Law Center and author of “The Torture Memos: Rationalizing the Unthinkable”. Previous books include “Less Safe, Less Free,” and “Terrorism and the Constitution.”
    David Frum

    editor, FrumForum.com, dedicated to the modernization and renewal of the Republican party and the conservative movement.

    author of “Comeback: Conservatism That Can Win Again”, and co-author of “An End to Evil: What’s Next in the War on Terror;” former speechwriter and special assistant to President George W. Bush (2001-02).
    Related Items
    Image of American Empire Before the Fall
    American Empire Before the Fall


  20. Leen says:

    Bruce Fein is ripping up the carpet on the American empire conversation
    “inflating danger” “world policemen mentality” “force of our example”

  21. brendanx says:


    In making your larger analogy think you neglecting mentioning the satisfying spectacle of watching Spain dominate Germany.

  22. Leen says:

    omg sorry I keep bringing this up. But Bruce Fein is nailing it on the Diane Rehm show on the fall of the American empire. If your not listening now. Worth it to listen later. The U.s. is on the “verge of failure” “ruination” “standard of morality” degraded “collective tyranny” not a “rebuplic”

  23. brendanx says:

    Speaking of Argentina, the military junta that ruled the country devoted something like 12% of their national budget to promoting the World Cup they hosted, and won, in 1978.

  24. Leen says:

    David “axis of evil” Frum just claimed that Bruce Fein is using empirical statements. Aye yi yi

  25. earlofhuntingdon says:

    Given Americans’ predilection for exceptionalism, we will need to hear your point over and over again. Going against the import of what you say are the years of schooling and indoctrination (aka, Texas textbooks) that portray unregulated capitalism as an unalloyed good and collective action and its descriptors as unalloyed foolishness ranging to evil. But it needs saying, or we’ll be swimming the Rio Grande looking for work, leaving behind the ‘burban house we can no longer pay for and the ‘burban SUV we can no longer pay to put gas in.

  26. bluewombat says:

    This thought has occurred to me for some time now: the American oligarchy has run out of countries to colonialize overseas, so they’re colonializing the American middle class (what’s left of it), working class (ditto) and the poor (that’s where the growth is).

  27. captjjyossarian says:

    It’s been a 47 year class war. I think a recent Max Keiser statement sums it up:

    The capitalism-socialism debate will fade as it becomes clear we’re sinking back into feudalism

    The deficit hawks want the economy to fall on the publics head. Their Wallstreet allies will sweep in and buy up the pieces for a song, public infrastructure included. And yes, they will loot Social Security while they are at it.

    If the Federal Government doesn’t spend what is needed to return to full employment, we will soon be serfs. Downsized serfs at that.

  28. Leen says:

    Would folks agree that it has only been through unions that we have even witnessed a middle class for non college graduates? Most fat cats will not share unless you force them.

    What I could never understand about the “you can’t raise the minimum wage because it would effect small businesses” argument. Why is it that some states have been able to pay below the federal minimum wage based on that companies profit margins and yet the pay scale does not go the other way say if a company like McDonalds or Wal Mart profit margins are huge. Why not require them to pay a national living wage.

    Living wage calculator

    Living wage

    I became aware of companies being able to pay below the minimum wage when I was talking with Betty. Betty is a local farm woman. That day I had stopped by her farm and she was slaughtering a hog in the barn (real bloody, but nothing for Betty) She must have had 20 safety pins holding her overalls and tattered shirt together. She hates sewing and is obviously hard core. Anyway at the time Betty was working at a nursing home in Pomeroy Ohio and being paid $4.oo bucks an hour. The minimum wage was $5 something at the time. I did some reading and found out that at the time Ohio, Kansas and I forget the other states had some sort of state laws that could trump the federal minimum wage based on the profit margins of the company. Not sure if that is the case now.

    • captjjyossarian says:

      Yeah sure. But unions have far fewer teeth so long as the government promotes low tariff free trade and out sourcing. If workers demand wage increases, owners can just outsource the work to China, Vietnam, Mexico… whereever.

  29. JohnLopresti says:

    **The west has dominated the world economically and intellectually for at least two centuries. That epoch is over (see charts).**

    I*m **looking forward** to the bicentennial graphic of *intellectual…dominance*.

    I do not do futbol, now, however, learned in north coastal Spain in college, from some Latin American economists. Maybe there was some humor of elegance in Spain*s having won the title a few days ago in that sport. Spain, according to OECD secretary general Ángel Gurría in a July 7 2010 presentatiion of the month*s statistical data, currently is enduring 19% unemployment, ~6.5% more than in the US state where I reside.

    Here is what AFL-CIO avers about right-to-work states* pay differential chimera. There is a US dept of labor chart of all 23 rtw states, showing the dates uppon which those states amended their constitutions to permit rtw (IN did so exclusively applying the rule to school employees.), except 6 of the states, rtw regs mostly passed in states prior to the 60s.

  30. SeedeeVee says:

    Sorry to bring the discussion level down a bit, but . . . .

    “when the Dutch go to South African and try to prevail through raw brutality, they fail” is a gross misinterpretation of what happened in South Africa.

    Whether you are speaking of inconsequential things, such as the World Cup (where this opinion is entirely wrong), or consequential things, such as British concentration camps and the slaughter of thousands of Dutch Boers or the thousands killed in the Zulu-Boer Wars/battles, please be fair.

  31. prostratedragon says:

    I suppose then that the killings during the Nat Turner uprising relieves the southern white slaveholding class of its burden of brutality.

    As for the Dutch team, I saw three early kicks, including the jump-sliding side kick to the chest of Alonso by De Jong, that were yellow-carded but could easily have been red-carded (also two low leg kicks, one to an Achilles area and one getting near the peroneal area).

    As they were all quite early in the match, I had the distinct impression that the Dutch were daring the refs to make them play the championship game down a man, and using the refs’ reluctance at doing that to try to slow by injury a team that they feared were better.

    If accuracy is not a component of fairness, then fairness has no ethics and no claim to superior practice.

    • SeedeeVee says:

      Let’s leave your historical suppositions/analogies aside for now. I find them lacking. Let’s just agree that slavery is bad, concentration camps are at least as bad, and comparing this to soccer is a little demeaning.

      de Jong was going for the ball and did not see the Spaniard, as he claims. The pitiful crying by the Spaniard is all most people saw or remember. Emotionalism should not be a factor in determining facts, fairness or ethics.

      I also find your claims of “accuracy” to also be lacking. What you see and perceive does not necessarily relate to fairness, accuracy or truthfulness. I am sure you will admit the power of bias in perception and recollection.

      Please watch the game again and see if you notice the extreme diving, begging (Waving imaginary yellow and red cards) and other feats of acting by the Spaniards. The Netherlanders were not exempt from these tactics. A failure to admit this and the Spaniards own level of brutality negates any claims of fairness.

      Nearly every team, at the beginning of a “game”, has to decide how it will be officiated. I can agree with you that the Netherlands team was in that phase.

      I think it is very telling that you only report what you saw the “Dutch” team do. What was your opinion on Spanish tactics? Did you not see the many fouls committed by that team?

      I am here to comment on the slander of the Netherlands football team, not on slavery, imperialism and warfare.

  32. barne says:

    We’re in a world of economic hurt, and the only reason is that something has changed . . . on paper only. Nothing real is blown up or burned down. The big boys simply screwed up the paper, maybe on purpose, and now real people must suffer.

  33. Cynthia says:

    About the only good thing about the US getting bogged down in the Muslim World is that it is causing the US to keep its hands out of Latin America, enable democracy to finally take root there. The US is cutting back on installing military dictatorships throughout Latin America whose aim it is to prop up the rich and beat down the poor. They do this by enacting neoliberal policies, thanks to the Chicago Boys led by the late Milton Friedman, which are all about providing nanny-state socialism for the haves and dog-eat-dog capitalism for the have-nots. About the only countries in Latin America which the US is still supporting are Peru and Colombia: two of the most backwards countries in all of Latin America. Both are narco-paramilitary states, which control their citizens by keeping them drugged up and terrorizing them into submission. Most of the other Latin American countries are free to have rig-free elections and progressive polices, enabling the have-nots to have their fair share of the pie. Most of Latin America is finally becoming what the US used to be — a place that puts the people over profits, a place that puts butter over guns. Oliver Stone goes into much greater detail about this, as he and his co-screenwriter, Tariq Ali, discuss their latest documentary film “South of the Border”:


    Here is Mark Weisbrot, the other screenwriter of “South of the Border,” discussing this film as well:


    The community where I live is too backwards to allow such a progressive film to be shown in its public theaters. So, I’ll be watching it in the privacy of my own home, which is happening more and more often these days, much to my disappointment.

  34. prostratedragon says:

    I am here to comment on the slander of the Netherlands football team, not on slavery, imperialism and warfare.

    Though in fact the latter is what you did.

    As to the ball game, my interpretation is what and all it is; we’re all entitled to one. But here is the first kick:

    jpeg image

    • SeedeeVee says:

      OK, you win on point 1. Thanks for reading what I wrote.

      For real sporting brutality, see this pic from the previous Uruguay v. Netherlands game. No one was thrown out for this one, either.


      If you are looking for it, and even if you are not, you can find raw brutality in almost every game. The Netherlands were very balanced in fouls committed (#1)and fouls received (#2) in this tournament.

      They did come in second place, so they must have been doing something right. Right?

      I don’t think you are too concerned with soccer, though.