Trickle-Up Economics

Michael Roberts says nothing but the truth. Comparing our current pandemic-recession with that of 2009, he writes,

But so far, [unlike in 2009--ed] there has not been a ‘financial shock’.  On the contrary, the stock and bond markets of the major countries are at record highs.  The reason is clear.  The response of the key national monetary institutions and governments was to inject trillions of money/credit into their economies to bolster up the banks, major companies and smaller ones; as well as pay checks for millions of unemployed and/or laid off workers.  The size of this ‘largesse’, financed by the ‘printing’ of money by central banks, is unprecedented in the history of modern capitalism.

With massive money-printing one would expect inflation, perhaps even hyperinflation. And there has been considerable food inflation, likely due to a severe food shortage in China.

Cost of food in the United States increased 3.70 percent in November of 2020 over the same month in the previous year. source: U.S. Bureau of Labor Statistics (Source)

On the other hand, energy prices have declined sharply, and other prices have trended down. The net result is inflation for 2020 is near a record low--despite the Fed's desire to hit a 2.0% inflation rate.

(Source)

So what happened? All those trillions of dollars in stimulus and bail-outs had to go somewhere! They obviously didn't get spent. Some of the money is sitting uselessly in the Fed's vaults, and much more of it is tied up in assets. As Mr. Roberts points out, there's no problem with liquidity--we're drowning in it.

In short, while the quantity of money has increased dramatically, the velocity of money (the rate at which money changes hands) went through the floor.

(Source)

Still, it's all a little weird. Lots of money has been printed, but it's all been "sterilized", that is somehow taken out of circulation. But here's the catch: many people were forced out of the labor force in March, 2020, as shown below. While there has been some recovery, as of last month there were nearly 10 million fewer employed people than there were a year ago. That inevitably means that fewer goods and services are being produced today than were produced in 2019.

(Find more statistics at Statista)

It's easy to identify the missing product: restaurant service has been severely curtailed if not shut down entirely, airlines are flying a small fraction of last year's customers, hotels are empty or closed, theaters have gone dark. It's now very difficult to spend money on any of those items.

So not only is there way more money being printed, but there is less stuff to spend it on than we used to have. If this isn't a recipe for massive inflation, then what is? But all we've got is crickets.

There are three kinds of inflation. One measures the cost of consumer items, often reported as the Consumer Price Index (CPI), shown above. Despite all the liquidity, consumer prices ain't budging. Why not? Likely because automation and globalization have made manufactures cheaper. As I believe Raoul Pal put it, a Domino's Pizza made by robots isn't going to cost more. Or, another example, today's cars contain fewer parts put together by fewer workers built from globalized supply chains. There's no way cars are going up in price (unless they also go up in quality, e.g., from an econobox to an SUV).

The second kind of inflation is commodity inflation. I refer here to the industrial sort, not the scarce stuff such as gold. And at least some commodity prices are going up! I've already mentioned the price of food. Copper prices (often referred to as King Copper, since it's often indicative of the health of the industrial economy) are also up dramatically.

Copper price ($/lb), 2019-20

Industrial metal prices have gone up this year, though not as much as copper.

(Source)

So that's a partial solution to our problem--there is inflation in commodities--certainly in food and industrial metals. So Mr. Pal's "Domino's Pizza" example isn't entirely apt--while the assembly and delivery of the pizza now costs less, the raw materials surely cost more today than they did a year ago.

The third kind of inflation is that of scarce commodities. These are items they're not making any more of, or at least not a whole lot more. Gold is the premier example--gold mines add only 2% annually to the existing supply, and the price has gone up nearly 22% in 2020. Silver has done even better, rising 37% so far this year.

The stock market is also a scarce commodity.

Between the lack of IPO activity, the pickup of M&A, and buybacks, the U.S. equity world is becoming smaller and smaller, and this could be one of many reasons why active managers are lagging behind their indexes.

The number of stocks available is about half of what one could buy in 1997. So needless to say, the price of shares gets bid up, and all the more so when the Fed is printing money. The S&P 500 is up 65% from its low last March, despite the fact that corporate earnings are expected are expected to decline by nearly 14% in 2020. People are buying stocks because they have no place else to put their money.

All kinds of scarce commodities are getting more expensive: real estate (esp. luxury), fancy/antique cars, famous art, one-of-a-kind baseball cards, and indeed, collectables of all kinds. The most famous scare commodity today is bitcoin, which nearly tripled in price in 2020.

I'll suggest that inflation in scarce commodities has been dramatic, and is where most of the excess money is flowing. This is great for those households with investable assets, i.e., the those in the top 10% of the wealth distribution. It doesn't really help anybody else.

In light of this, what are the appropriate goals of fiscal/monetary policy?

First and most important, those ten million unemployed people need to get back to work. This is not just for their own benefit, but if we can't increase production then the economy has to shrink--no amount of money-printing can change that outcome. This will be bad not just for the unemployed, but for everybody. So getting them back to work in productive jobs (i.e., not government-funded, make-work jobs) is crucial.

Second, financial and (most) corporate accounts are liquid. Accordingly, lending money to money center banks is not helpful, and neither is lending money to most corporations.

Third, many institutions are not illiquid, but rather insolvent. This means that they're not just short on cash, but instead their entire business model is broken. Indeed, what we face in this country is not a liquidity crisis, but rather an insolvency crisis. Insolvent organizations must be allowed to go bankrupt, however painful that is in the short term.

For example, the airlines are likely insolvent. Their business model--flying business people around from meeting to meeting--has been permanently disrupted by Zoom software. So at least one or more of the big three airlines probably has to go out of business. Neither the Fed nor Congress should bail them out.

Likewise, the states of Illinois and New Jersey (among others) are bankrupt. They need to fail--i.e., default on their obligations. The bondholders should take a big haircut, along with other state creditors such as pensioners (for whom an expansion of the welfare state will likely be necessary). Once the debts are wiped clean (bankruptcy does that) then the states can be reorganized along fiscally responsible lines.

Politically and legally, state bankruptcies will be really hard to pull off. But under no circumstances should they be bailed out.

Finally, it is my hope that the ten million unemployed are not insolvent, but merely illiquid. In other words, I'm suggesting that they can all be reemployed over the next year, and that there will be no increase long term unemployment. They need a bridge loan--aka bailout--to tide them over in the meantime. This means a longer extension of unemployment benefits, albeit at a level that doesn't keep them from seeking employment.

Think of it this way. Because of the bailout, our friendly waitress can pay her rent. Which means the landlord can pay his mortgage. Which means the bank can pay its depositors who want to withdraw money. Which means the financial system remains both liquid and solvent. Eventually the waitress--because she's solvent--will be reemployed productively, making us all richer.

It's called trickle-up economics.

So beyond extended unemployment benefits (and something comparable for small businesses), I'm against any other bailouts. Nothing for the banks. Nothing for the corporations. Nothing for the bondholders. Nothing for the corruptocrats running states like Illinois. These bailouts--unlike that awarded the waitress--will do nothing but inflate asset prices and make bitcoin investors rich.

Further Reading:

• Austerity Comes to Campus
• Trotskyists on the Economy
• Let Them Eat Little Bits of Green Paper

What is Trotskyism?

A commenter writes "Do you have a blog post that explains Trotskyism? I just want to read it, if you have one."

The answer was No, I don't. I actually never even thought to write one--I guess I figured that Trotskyists themselves should do the honors. Yes, there are books one can read (e.g., here and here, both by James P. Cannon). There are also the About Us tabs (e.g., here, here, here and here) on various webpages that give information about the individual grouplets. But I know of no reasonably objective, blog-length description of Trotskyism generally. So here goes.

                                                                                                                    Continue Reading --->

Elections 2020: Socialist Action and SWP

There's something fishy in Mackler-land.

On November 3rd--election eve--Jeff Mackler, Socialist Action's (SA) failed presidential candidate, hosted a Youtube roundtable to discuss the returns as they came in. The comrade-panelists were Lisa Lunenburg (from Minneapolis); Barry Weisleder (Toronto); Marty Goodman (New York); Nicholas Brannon; Gary B (Oregon); John Pottinger (Chicago); and Ann Montague (VP Candidate). That's six white males and two white females, which is likely representative of SA's demographics.

Since November 3rd--26 days ago as of this writing--there has been nothing posted on the SA website. Crickets! What's going on? I suggest four possibilities.

1. Comrade Jeff is just too tired after his arduous campaigning. After all, sitting in an easy chair in front of a webcam for a few hours/week is just exhausting. He needs a rest.
2. With Thanksgiving and Christmas coming on, comrades need some time to prepare for the holidays.
3. There is another split brewing in SA...and indeed, perhaps the organization will cease to exist.
4. Or (my preference), Mr. Mackler is being deposed as National Secretary because of old age and gross incompetence. After all, if there were ever a more humiliating presidential campaign I've never heard of it.

Anyway, we'll likely find out within the next week or two.

The video is two hours long, and I did not listen to all of it. I probably invested 45 minutes or so this afternoon (11/28) , and I made sure I sampled each of the speakers. I do not have a transcript, any "quotes" here are from memory and likely not strictly accurate. I'm not listening to it again--it really is very boring. Since it went online it has received 135 views, at least three of which were from me. The most commonly used word was "uh", followed closely by "um."

Mr. Mackler opened by touting the success of his campaign, claiming even to have gotten a vote from Idaho! Of course he dismissed both Trump and Biden as being bourgeois candidates neither of whom represents the working class. But he claimed to defend the right to a fair election, somehow blaming only Republicans for any unfairness. In retrospect, it appears that if there was any cheating it came overwhelmingly from Democrats.

He repeated the ridiculous assertion that "between 15 million and 26 million people" showed up for the George Floyd protests. Not even his fellow panelists lent their support to that statement.

Mr. Mackler doesn't believe in bourgeois elections, for when and if he ever wins one then all future elections will be abolished. The People will have spoken once and for all time. So his concern that the election be fair is pure hypocrisy.

Many speakers (maybe even all of them) went through the litany of who SA supposedly supports: Black, Latino, Native Americans, GLTBQAI, Trans, etc. In other words, all the BIPOCs, as current lingo will have it, despite the fact that nobody in SA shares that identity. This, of course, is precisely the same audience desired by AOC and the progressive wing of the Democratic Party, and also the Green Party under Howie Hawkins' banner. 

Is it any surprise that the program of Socialist Action is exactly the same as that of Democratic Party progressives? Of course it is--straight down the line: Green New Deal, Medicare for All, End Systemic Racism, Tax the Rich, $15 minimum wage, No New Wars, Down With Israel, etc. The only difference between SA's program and the Democratic Party Left's program is that Mackler claims he doesn't like Democrats. But I don't believe him--because he campaigned for the Democratic Party program the entire time.

So they oughta be happy that 75,000,000 people voted for the Dems, which more than makes up for the piddling 135 who watched snippets of Mr. Mackler's video. After all, why vote for Boring Jeff when you can vote for the real thing, i.e., Stupid Joe Biden.

Because Jeff Mackler, AOC, Kamala Harris, Bob Avakian and the whole disreputable gang do not stand for the Working Class. They instead represent an unholy alliance between the top 10% (academia, the media, Hollywood, "experts", climate gurus, etc.) and the Lumpen Proletariat (teachers' union hacks, civil servants, NGOs, social workers, grad students, folks up to their eyeballs in student loan debt).

The real champion of the Working Class in this election was none other than Donald J. Trump. Needless to say, the ruling elite has worked overtime to steal the election from him. And even though I am personally petty bourgeois from my split ends down to my toenail fungus, at least I'm smart enough to know where the class line is.

I don't vote for Democrats--not even those that gussy themselves up as "revolutionaries."

The Socialist Workers Party (SWP) understands at least some of this. An article by Terry Evans (probably written around Nov. 13th) puts it this way:

The Democrats, middle-class left and some “Never Trump” Republicans complain Trump’s refusal to concede is a threat to democracy. Groups like ShutDownDC threaten to do whatever it takes “to force Trump from office.”

Their threats are dangerous for the working class. There is enough time to resolve the election result and hear the legal challenges before Inauguration Day in January. Working-class parties like the Socialist Workers Party are more than familiar with Democrats and Republicans rigging ballot rights.

The real target of the liberals and middle-class radicals is the working class. They are astounded their pollsters got the election so wrong. They say the 71 million people who voted for Trump means that working people are becoming more right wing and racist.

This isn’t true. Millions of workers are looking for ways to fight against the capitalist crisis today. Hundreds of thousands joined protests against police brutality in cities, towns and rural areas across the country in early summer.

Fine, as far as it goes. But they then go wrong in two ways:

1. They believe Trump is a false prophet--that he's just faking it as a friend of the working man. I think they're stuck in a time warp and don't really understand how class politics works today.
2. Like SA, despite their solidarity with Trump voters, they still subscribe to the Democratic platform: things like Health Care for All and Amnesty for All Undocumented Immigrants, i.e., appeals to the Lumpen Proletariat. Though, to give them credit, they don't sign on to the climate change nonsense, nor are they rabidly antisemitic.

To my knowledge, the above quoted article by Mr. Evans is the only journalistic piece the SWP has published about the election. Weirdly, it makes no mention of the Kennedy/Jarrett campaign, on which they expended considerable effort. Is that to be tossed down the memory hole so quickly? Seems like a lot of work for nothing.

Further, they worked hard to get on the ballot in at least a few states. As I pointed out here, it's weird that they didn't mention that at all in their final election push. And now they really should say how many votes they got--for if they're on the ballot those votes were all machine tabulated and should be readily available.

Why have they deep-sixed the petition drives to get on the ballot? I can think of several possible reasons.

1. It's just an oversight. In which case getting on the ballot just wasn't that important in the first place. Why then did they bother?
2. Their vote totals are humiliating. But surely it can't be worse than Mr. Mackler's 135 views. I understand that people who vote for minor parties at the bottom of the ballot often don't know who they're voting for--it's just a joke or a protest, or perhaps a mistake. But some of those votes are real, and they should be championed.
3. The Party, despite their efforts, didn't actually succeed in getting on the ballot anywhere. Now that would really be humiliating!

Anyway, here is the election outcome in a nutshell:

• the Working Class lost.
• the highly educated elite (aka, the swamp) won.
• The SWP was not effective.
• The most pathetic loser of all time is Jeff Mackler, who needs to get out of politics.

Further Reading:

• Who Should Trotskyists Vote For in 2020?
• The Revenge of the Lumpen Proletariat
• Boring Jeff Mackler Runs for President Again

Austerity Comes to Campus

This post derives from two articles in Left Voice: one authored by Scott Cooper, and entitled What's Next: Stimulus or Austerity?  The second, by Olivia Wood, is New York Postpones Raises for Public Employees; CUNY Workers Push for a Strike. As Left Voice's core is a collective of New York City college professors, they know their subject matter, and as a retired professor myself the topic is of considerable interest. The integrity and competence of both authors is beyond question and the articles are worth your time. 

Here is Mr. Cooper's lede idea:

The cuts are everywhere, thanks mostly to plunging tax revenues. States rely on taxes to fund their budgets that come, overwhelmingly, from two sources: income taxes, which don’t get paid if people don’t have jobs; and sales taxes, which are not forthcoming if people have little or no money to spend. …

His solution is to tax the rich, and he documents in some detail how the rich are frequently taxed at a lower rate than the middle class.

Unless it prints new money, federal government funds — and those of state and local governments, for that matter — are overwhelmingly what has been collected from the vast majority of people, the working class. As New York Times columnist David Leonhardt has pointed out by the numbers, the wealthiest pay taxes at much lower rates than the rest of us. And we don’t enjoy any of the numerous loopholes that have been established to help them get away with paying less and less and sometimes even zero.

And true enough, and in fact it's even worse than Mr. Cooper imagines. The very poor, i.e., those receiving welfare benefits, are often taxed at rates exceeding 100% (e.g., they lose food stamp benefits if they're $1 above the cutoff). There is obviously something wrong with welfare, leading many to propose getting rid of all the individual benefits entirely and replacing them with a negative income tax or a universal basic income.

But at the end of the day, it's all irrelevant. Because the big issue isn't the rate at which income is taxed, but rather the total amount received in taxes. And by this measure income taxes are highly progressive, as this chart shows.

Source

That's for federal taxes, nearly 70% of which are paid by the top 10% income earners. Relevant here are New York State and City income taxes, which are even more progressive than the Feds. As shown below, over 50% of New York state tax receipts come from the top 1%, and nearly 80% comes from the top 10%.

Source

Of course income taxes are not the whole story. There are payroll taxes, overwhelmingly paid by the middle class, for whom the primary beneficiaries are also the middle class. This does not seem unfair. Then there are sales and property taxes, which are undoubtedly regressive.

In light of this, raising taxes on the rich doesn't make too much sense. If they're already paying 70% of the tax haul, government is already dependent on the whims of only a few people. These people are the most mobile folks on the planet, and can easily move out of state or even out of the country. Indeed, the NY Post reports that nearly 300,000 people fled the state in the eight months ending Oct. 31st. These are upper income folks who are taking a big slice of AGI with them.

I'll suggest that tax rates are already adjusted to maximize revenue. Adjust the rates either up or down, and actual tax receipts will decline--the former because rich people can move, and the latter because you're just leaving money on the table.

If Mr. Cooper is worried about the revenue stream, Ms. Wood cares more about how the money should be spent. The meat of her argument is summarized in the last paragraph.

New York City, New York State, and CUNY have all been looking to Washington for some kind of relief. They say these cuts and budget shortfalls are temporary, and federal funds from a Biden administration will save us. But workers should not hold our breath. Instead, we must organize, within our unions, across unions, and with the un-unionized, to demand relief that benefits the workers, not the governments and the capitalists. This includes preparing our unions to take citywide strike actions to fight the wave of further austerity that is sure to come.

Are the budget shortfalls temporary? Probably not, and for several reasons. First, as said above taxpayers are leaving the state and taking their AGI with them. Second, and more important, the economy is recovering, but to a different economy.

“We’re recovering, but to a different economy,” [Fed chair Jerome] Powell said during a virtual panel discussion at the European Central Bank’s Forum on Central Banking.

The pandemic has accelerated existing trends in the economy and society, including the increasing use of technology, telework and automation, he said. This will have lasting effects on how people live and work. 

So what are the effects on higher education? I can count a few.

• More students are learning online. Some of them will prefer it and will not go back to the classroom. Online education got a permanent boost.
• Students expect online education to be cheaper and are less willing to pay high tuition. Beyond which, online students have no need for dorm rooms, cafeteria food or athletic facilities--all of which are major revenue sources for colleges.
• Working from home reduces the need for office space, managers, and overhead. Ultimately, it reduces the benefits of a college degree. For that and other reasons, including automation, the demand for college grads likely decreases over time.
• Likewise, working from home expands the labor pool available to the employer. Their candidates can live in Topeka as easily as in Manhattan. Wages will accordingly trend lower.
• Not pandemic related, but still important, is the demographic cliff--the cohort of high school grads will be much smaller in coming years.

Bottom line: fewer kids will go to college, fewer of them will attend a residential college, and those kids will all be spending less money at college.

So what's Ms. Wood's suggested solution?

This week, rank and file organizers at CUNY are bringing a Cross-Campus Resolution for a Strike Authorization Campaign and Vote to the floor of the PSC’s Delegate Assembly.

Who are they going to strike against? Surely not against the CUNY administration, because at the end of the day they don't control the purse strings. And also not against the state or city government--for not only can they not control the purse strings, but they've got all kinds of other social services they need to fund.

The faculty probably intend to strike against the millionaires and billionaires, who generally don't give a rat's patoot about CUNY. Why should they? Certainly the ones who have already left town have washed their hands of the whole problem.

So ultimately our faculty friends are striking against their own students--the ones who are at least paying a fraction of the bills. This seems perverse--and deeply counterproductive.

The whole higher education edifice is overbuilt and needs to shrink. We need fewer colleges, fewer professors, and a whole lot fewer grad students. One hopes it can happen gradually so that people could adjust their lives over time. But the world is never like that. As Hemingway put it, 

“How did you go bankrupt?" 

"Two ways. Gradually, then suddenly.”

 Further Reading:

• "A Program to Unify the Exploited and Oppressed"
• Louis Proyect and the More Poverty Solution
• Book Review: Capitalism Alone

Down the Cuba Rabbit-Hole with Mary-Alice Waters

Last week I wrote about The Militant's (published by the Socialist Workers Party--SWP) retraction of an article by Steve Warshell. My lede paragraph:

The Militant concocts more fake controversy with this post:

This week’s print edition of the Militant includes an article “Would a Joe Biden White House Be Better for Cuba?” It has been withdrawn from the online edition. It does not reflect the opinion of the Militant or the Socialist Workers Party. 

Next week’s issue of the Militant will feature an editorial correcting that article.

This week's editorial--actually a long article by Mary-Alice Waters--appears in the current issue under the title Defending the Cuban Revolution, strengthening US working people. The supposedly offensive article by Mr. Warshell (Would a Joe Biden White House be better for Cuba?) is included at the same link (scroll down). If you really want to go down this rabbit hole, I suggest you read Mr. Warshell's piece before engaging with Ms. Waters, though this is one of those cases where I've done the reading so you don't have to.

Ms. Waters' piece is just plain incoherent. In an effort to understand it I've tried to outline it. The idea is that major points have a lede paragraph, and each paragraph has a topic sentence. Let's see how far those high school English class principles carry us.

For example, she says,

The second major problem with the article “Would a Joe Biden White House Be Better for Cuba?” is its opening sentences. “A number of groups here and around the country that consider themselves ‘friends of Cuba’ are promoting Joe Biden’s bid for the presidency as a way to relieve the effects of over 60 years of Washington’s economic and political attacks. …

The journalistically unacceptable anonymity of the phrase “a number of groups” is plenty reason enough to reject such a lead sentence in a working-class newspaper. But why is it a problem that some friends of Cuba are urging a vote for Joe Biden? Or Donald Trump? Is it a problem that the Socialist Workers Party advocates and organizes everyone we can to support the SWP ticket of Alyson Kennedy and Malcolm Jarrett?

The major criticism seems picayune--that Mr. Warshell omits a listing of the offending groups. Of course The Militant does this all the time, often referring to middle class organizations that cross the class line--without listing them individually.

But beyond that, she claims that Mr. Warshell misunderstands the principles behind a united front, where working class groups come together around narrow issues upon which they agree. He writes

These groups are organizing car caravans here, peddling the myth that Democratic administrations — and in particular Barack Obama’s — “have been better” for relations between Washington and Havana, especially better than Donald Trump’s.

Perhaps Mr. Warshell is unclear here, but my impression is the car caravans are not organized to defend Cuba, but rather to promote Joe Biden. In which case this isn't a united front at all. But even if the stated purpose of the caravans were the defense of the Cuban "Revolution," since when is the Party supposed to remain silent about other issues of disagreement not involved in the united front? For example, we never hid our criticism of liberal Democrats despite marching with them in antiwar demonstrations.

But getting back to high school English, note the first phrase in Ms. Waters' above quote: the second major problem. Which begs the question: What is the first major problem? As best I can figure (and it's really unclear), it's this:

The problems begin with the headline itself. It poses a question the article never addresses. Moreover, it is a question that can’t be answered. What is there to say except, “If Joe Biden becomes the next president of the United States, we’ll see.”

Huh? Wouldn't this be solved by rephrasing Mr. Warshell's headline If Joe Biden became president, would that be better for Cuba? This seems like a really minor point. 

The supposed first issue subdivides into two, numbered components. 

First, whether Biden or Donald Trump is installed in the White House on Jan. 20, 2021, the revolutionary leadership of Cuba will continue on the course they’ve followed from 1959 to today, through 12 U.S. administrations. ...

Second, for our part, irrespective of who occupies the White House for the next four years, the Socialist Workers Party too will continue on the course we have followed from 1959 to today. 

She simply restates what we already know, namely that neither the Cuban government nor the SWP will change fundamental positions, regardless of the election outcome. There is nothing in Mr. Warshell's article to suggest otherwise. And neither has anything to do with the supposedly misguided headline--it's a non sequitur.

Then we get to the second major problem discussed above, not to be confused with the aforementioned "second" sub-point. (And if you're confused, so am I.) I think Ms. Waters just flunked English Comp.

But now we strike gold with {emphasis mine}

There’s a third way in which the article “Would a Joe Biden White House Be Better for Cuba?” did not express the editorial line of the Militant or the positions of the Socialist Workers Party. That is the way in which it presented the differences between executive actions taken by the Barack Obama administration during its second term versus measures imposed by the Trump administration. The latter have included cutting back travel rights in both directions and depriving Cuba of necessities such as oil, access to the international financial system, and remittances from family members living abroad. 

Here I'm indebted to commenter Eldee Stephens who intuited the true reason for the retraction without chasing down any rabbits. The reason is that life for the Cuban government (and probably also the Cuban people) will be easier under a less stringent sanctions regime, i.e., under a Biden administration.

After much throat-clearing Ms. Waters admits as much.

If a Biden administration were to reverse the direction of some of Washington’s current policies, it would open some breathing room for Cuban working people and their government to more easily deal with the challenges they face. If the boot on their neck pressed less tightly, they would be quite capable of doing that. … 

For these reasons, it’s probably safe to say that a majority of Cuban working people and their leadership are hoping for a Biden electoral victory. Does that mean it’s in the interests of U.S. working people to give political support to a capitalist party and its candidates?

That question was neither asked nor answered in the article “Would a Joe Biden White House Be Better for Cuba?” But for class-conscious workers in the U.S., that’s the most important question. And the answer is an unequivocal “No.”

So she admits that there is a difference between the two bourgeois candidates--a distinction that the Cubans are very much aware of. This is very unTrotskyist of her--Trotskyists (like Mr. Warshell) assert there is no essential difference between Republicans and Democrats--any contrary answer is reformist. But since the SWP wants to remain on good terms with the Cuban leadership, high principle has to yield to Cuba's immediate self-interest.

Regarding the question Does that mean it’s in the interests of U.S. working people to give political support to a capitalist party and its candidates?, Mr. Warshell answers it unambiguously in his final paragraph:

The fact is the only campaign for president that offers solidarity with the Cuban people and their revolution is the Socialist Workers Party campaign of Alyson Kennedy. Not only does the SWP call for an end to Washington’s economic assaults against Cuba and for the U.S. rulers to get out of Guantánamo, Kennedy points to Cuba’s socialist revolution as an example for workers and farmers in the U.S. to follow.

So here we are--at the bottom of the rabbit hole. And there ain't even a rabbit down here! 

Further Reading:

• "A Program to Unify the Exploited and Oppressed"
• The Militant Visits Manila
• Mary-Alice Waters' Religious View of History

Pre-Election Mockery

The Militant (published by the Socialist Workers Party--SWP) concocts more fake controversy with this post:

This week’s print edition of the Militant includes an article “Would a Joe Biden White House Be Better for Cuba?” It has been withdrawn from the online edition. It does not reflect the opinion of the Militant or the Socialist Workers Party. 

Next week’s issue of the Militant will feature an editorial correcting that article.

They did that last July--that is, retracted an article by Emma Johnson published in the prior week's Militant. I read both the offending article and the retraction, and even after all that I couldn't discern the reasons for the retraction. I concluded:

So I count Ms. Johnson not guilty. Her article is actually a clearer statement of what I (sort of) understand to be The Militant's true position. She does not deserve her walk of shame.

So why does The Militant retract an article that doesn't need to be retracted? This is like Tweedledum retracting a piece written by Tweedledee. It makes no sense.

So why the unnecessary retraction? My answer was "It's just clickbait."

So here we go again, except now we have to wait a week to supposedly find out the reason for the retraction. Fortunately for us, the print edition of The Militant is posted in pdf format here. The offending article is by John Warshell and can be found on page six. So it's kind of a game--can I figure out why it's been retracted without being told?

The answer is: No, I can't! For the life of me I have no clue where the author has gone wrong. Mr. Warshell was in the movement when I joined, so he's been a member for at least 50 years now. That he's suddenly succumbed to petty bourgeois wrong-think strikes me as astonishing. The article is total Trotskyist boilerplate--there's nothing in it any Trotskyist of any denomination could find offensive.

Yet I've fallen for the trick again. I will likely write a post about the retraction, and that of an article I should otherwise ignore. I guess I'm just a sucker for clickbait.

Help me out here, folks. Can any of you find the "error" in Mr. Warshell's piece? You have until next Saturday to let us know.

----

The ever-incompetent presidential candidate Jeff Mackler strikes again. As readers of this blog know, Mr. Mackler's original running mate was Heather Bradford. After declaring her candidacy in May, 2019, Ms. Bradford was part of the group that split from Socialist Action to form the new Socialist Resurgence grouplet. That happened in October, 2019, which means that Ms. Bradford had five months to campaign with the team before becoming a non-person. 

Her short-lived campaign for veep earned her exactly three (3) mentions on the Socialist Action website. That was a really aggressive, busy campaign schedule! (sarcasm).

Anyway, since October, 2019, Mr. Mackler has campaigned alone, sitting in his basement pontificating via boring Youtube videos watched (or at least clicked on) by dozens of people. But somehow, miraculously, on October 22nd, 2020, a new running mate has suddenly materialized--her name is Ann Montague.

Ann Montague and Jeff Mackler (source)

This is two weeks before the election, obviously too late to get any changes to ballot status. Oh--I forgot--Socialist Action has made exactly zero effort to get on any ballot. So all they'll need to do is modify their campaign literature--the 50 or so copies they've printed up. They'll have to cross out the name "Heather Bradford" and hand-write in "Ann Montague". A couple of comrades working all night should be able to get this done.

I have nothing against Trotskyists running presidential campaigns, no matter how quixotic they may be. But back in the day we took pride in at least being professional about it. If I were in Socialist Action, or for that matter in any denomination, I'd be totally ashamed. This is truly pathetic.

----

Getting back to The Militant, the SWP campaign of Alyson Kennedy and Malcolm Jarrett at least meets the professionalism standard. In the issue just before the election, at least three front page articles are directly about the election. Ms. Kennedy and Mr. Jarrett have actually been out campaigning and have gone on tour.

But here is something weird. Back in August The Militant published this statement:

Join the fight to put the Socialist Workers Party 2020 presidential campaign on the ballot everywhere we can! Teams of campaigners are fanning out across Washington state, Tennessee, New Jersey and Minnesota. With backing from working people, the party has already won ballot status in Colorado and Vermont, and is filing in Louisiana Aug. 7. The party’s goal is to be on the ballot in as many states as possible, as we have done every four years since 1948.

So I don't understand why the final list of candidates (published the week of the election) does not indicate ballot status. What's the point of getting on the ballot if you don't tell your readers (and potential voters) about it?

(Source)

If they're on the ballot, one would expect that Kennedy/Jarrett will get thousands of votes--some by accident, more as a random protest against Biden/Trump, and a few intentional. No matter how they come, votes are an accomplishment for the Party. I don't know why they keep their ballot status under wraps.

Anyway I'd like to know how many votes they get.

And even more important, the world wants to know if Boring Jeff Mackler can get more than two dozen votes. I doubt he will. We'll likely never find out because nobody has the time to go looking for the kooks who bothered to write in the name of the most ridiculous candidate ever in American history.

Further Reading:

• Jeff Mackler Quits the 2020 Race! (false alarm)
• Left Voice on Trump's Tulsa Rally
• The SWP's 2020 Campaign Platform

Who Should Trotskyists Vote For in 2020?

In a post by the Solidarity Green Party Working Group entitled Solidarity and the 2020 presidential election, they write

As reported in Solidarity’s Election Poll, a Solidarity internal poll found that 47% of respondents supported voting for Howie Hawkins and Angela Walker running as Greens in the 2020 presidential election, 27% supported voting for Hawkins and Walker where the Democrats are assured of winning and for Joe Biden in “swing states,” 21% supported voting for Biden everywhere (motivated as “Dump Trump, fight Biden”), and 5% provided comments but selected none of the three options. ...

How did Solidarity, a revolutionary socialist organization founded on the principle of working-class political independence, get to this point? And not just Solidarity. How did the revolutionary socialist movement get to this point? We ask the question not to recriminate but to discern a way forward.

For any Trotskyist--current or former--the problem is self-evident. As a core principle Trotskyists refuse to cross the class line and will not support a "bourgeois" party. The Democrats are the very essence of a bourgeois party, and accordingly no self-respecting Trotskyist of whatever denomination will support them. My former comrades adamantly reject lesser-evilism, i.e., voting for a Democrat just because he seems more progressive than the Republican. The dogma is that Democrats and Republicans are essentially the same--both representing the bourgeoisie.

The principle distinguishes Trotskyism from the Stalinist tradition which has long supported progressive Democrats, this year championing Bernie Sanders, and now Joe Biden. The Bob Avakian Fan Club, self-avowed Stalinists, write "It is crucial that there be a massive vote against Trump—which means voting for Biden."

Aversion to Democrats is often taken to extreme lengths. This year both the Socialist Workers Party (SWP) and Socialist Action (SA) are running their own candidates. In the SWP's case this extends a long tradition, and at least the completely useless effort is competently executed. SA, meanwhile, has put forth the laughably ridiculous Jeff Mackler as their candidate--they're not serious.

My friends at Solidarity rightly regard these old-fashioned Trotskyist campaigns as farcical, and accordingly they're looking beyond sectarian Trotskyism for solutions. Their current best choice looks to be Green Party candidates Howie Hawkins and Angela Walker. There is precedent: in the 2016 cycle they supported Jill Stein and Ajamu Baraka. Prior to that SWP alum Peter Camejo was the Green Party candidate for Governor of California for three elections, beginning in 2002.

The SWP and SA accuse the Green Party of being middle class, which somehow puts them beyond the pale. The SWP is at least consistent, regarding the entire environmentalist movement as middle class, and therefore not worthy of support. SA supports radical environmentalism, but without supporting the Green Party.

The original leaders of Solidarity are all former members of the SWP, and for them the class line is a solid barrier--thou shalt not cross it! Which is why they're so astonished and disappointed that so many of their new colleagues (never part of the SWP) even countenance voting for Democrats.

The opposite, non-Trotskyist position is held by Bob Avakian, who writes (italics in original)

To approach this election from the standpoint of which candidate is “better” means failing to understand the truly profound stakes and potential consequences of what is involved. The fact is that there can be one—and only one—“good” that can come out of this election: delivering a decisive defeat to Trump and the whole fascist regime. Doing this would create far better conditions for continuing to wage the struggle against everything represented by the Trump/Pence regime and all the oppression and injustices of this system, and would be a great gift to the people of the world.

His claim is that Trump is qualitatively different from Biden because he's a fascist. Therefore, however bad Biden may be, he must be supported.

In contrast, the old majority within Solidarity argue this way:

Left advocates of voting for Biden generally give Trump as the reason. Trump is indeed a menace. His views may be no worse than those of Barry Goldwater, Richard Nixon, Ronald Reagan or George W. Bush. But he is self-indulgent, chaotic and demagogic far beyond what they allowed themselves. His appeals to white chauvinism are effective with segments of the population, especially older white men. They bamboozle some white workers, who have real grievances but misdirect their anger.

If the U.S. were on the brink of fascism or military dictatorship and a vote for Biden were the last line of defense, perhaps advocating it could be justified. Although it wouldn’t achieve much. It would be like throwing a handkerchief at a charging bear. But the U.S. isn’t on the brink of fascism or military dictatorship. We’re at a highly polarized moment in the alternating administrations of the two-party system.

An article by John B. Cannon makes the case that one should strategically vote for Biden in states where the election is close, while casting a protest vote elsewhere. He writes

On the flip side, of course, Trump is a relatively weak authoritarian. It seems unlikely that he could consolidate a fascistic or authoritarian regime without vestiges of democratic checks, since neither the military nor most of the bourgeoisie support him. ... However, under Trump’s leadership, part of the Republican Party is blurring the line between fascism and right-wing nationalist, authoritarian aspirations, and Republican elected leaders are increasingly unable to operate independently of Trump’s personalistic command. In sum, the politics of fascism are very much at hand, even if the immediate possibility of a fascist consolidation ... is not.

He asks, "What’s a brink, and how do you know you are on it?" Mr. Cannon suggests we're not yet on the brink of fascism, but nevertheless this is a "crisis," perhaps like Germany in 1929 (not 1933). While Trump himself may not lead the way, a future, more competent fascist could really lead us over the brink. Therefore now is the time to stand up against fascism and vote for Biden where it actually makes some electoral difference, i.e., in swing states. Thus, in extremis, lesser-evilism is justified.

A full-fledged turn into the Democratic Party is advocated by Bill Resnick, a personality from Portland, OR. In an article weirdly entitled Dump Trump, Fight and Force Biden: An Electoral Strategy for the Left, he wants to have his cake and eat it too. That is, to vote for Biden while opposing him every step of the way.

He writes,

But just to be clear: everything said about Biden by those who argue against voting for him is true. These truths however, in this moment, don’t carry the day, if you believe, as I do, that Trump has to be stopped in his tracks, repudiated, to decisively interrupt the downward spiral toward a white supremacist autocracy. And a strategic vote for Biden makes sense since his administration will be forced to bargain with “progressive” Democrats in the Congress, and it should be possible to win significant programs, call them non-reformist or revolutionary reforms.

He explains what those reforms are:

We don’t have to wait until after the election to fight for a package of “non-reformist” reforms. By non-reformist reforms I mean programs and policies that:

• Demonstrate the virtues of radically democratic organizations and social relations which prove that “Every Cook Can Govern” – for example, worker-owned and controlled co-ops, democratically-run teams to treat chronic diseases, participatory budgeting in local government.
• Honor and reward the skills and contributions of those in non-elite, professional, college diploma- requiring work.
• Significantly shift political power downward and outward and Increase social organization and power at the base of our society.
• Provide a solid social safety net that increases the confidence and fighting power of the working class.
• Challenge all hierarchy including based on race, gender, class, sexual orientation, ability, and spiritual practice.

This, to my mind, is straight-out utopianism, and is not possible even under perfect communism, much less from Sleepy Joe Biden. These hippie-like reforms are a far cry from a Trotskyist transitional program. In my day we would have called it a popular front, i.e., forming a coalition with the bourgeoisie. It seems the old guard in Solidarity agrees with that assessment.

Trotskyism has always struggled between sectarian purity, on the one hand, and big-tent alliances on the other. The solution (insofar as one exists) is a united front consisting of only working class organizations. The antiwar movement as represented by the Student Mobilization Committee was the obvious (and perhaps only) successful example. Though it's not clear how that success has furthered the American Revolution.

Popular fronts work better. Martin Luther King's demands--all won through Republican and a few Democrat politicians--have resulted in enduring gains for civil rights in America. American democracy is strong enough, and capitalism successful enough, that wealth and privileges can be extended across society.

I disagree with my Trotskyist friends: I do not think Trump is a fascist--quite the contrary. Instead of growing government, he is trying to shrink it. Unlike BLM and Antifa, he does not have gangs of thugs on the streets. He is no threat to our democracy, having never once disobeyed a court order. He's neither racist nor white supremacist--he simply rejects ridiculous political correctness.

So this blog enthusiastically endorses Donald J. Trump for president--and not as a lesser evil, either.

Further Reading:

• "A Program to Unify the Exploited and Oppressed"
• The Revenge of the Lumpen Proletariat
• Book Review: Bronze Age Mindset

"A Program to Unify the Exploited and Oppressed"

My friends over at Left Voice are very modest. 

No final solutions do they propose; instead they put forth a supposedly tentative document entitled Fight Racism, Imperialism, and the Current Crisis: A Program to Unify the Exploited and Oppressed.

The programmatic issues raised in this statement are not intended to be a complete or finished program. They are a first proposal — to the Left, to the activists of the BLM movement, and to workers’ and community organizations — to discuss the tasks we face now to defend ourselves and prepare for future struggle.

It doesn't seem all that tentative to me: at over 5,000 words it contains 51 programmatic bullet points! How incomplete or unfinished can that be? Far from uniting the Left, this is as sectarian as any document issued by the Spartacist League. 

Independent of substance, my friends need to learn a few tricks from the Trump campaign. People are persuaded by short, catchy, somewhat ambiguous slogans--Make America Great Again is a good example. While one can argue about what it actually means (I, for one, categorically reject the idea that it's racist), there is no doubt that it means something--enough to inspire millions to go out and vote for Trump. America First and Drain the Swamp are two other marvelous bullet points from the Trump doctrine. The Biden campaign chimes in with Build Back Better, and that's not bad. Much better than Hillary's I'm with her (which is literally meaningless).

The 51 bullets, meanwhile, will only generate argument and disagreement. All you'll get from them is a faculty-meeting talk-shop.

There are better examples closer to home. While Left Voice apparently aspires to become a vanguard party, it could take some advice from an already-existing vanguard party, the Socialist Workers Party (SWP). Their Updated 2020 Campaign Platform (pdf) only has 13 bullets, which is still probably twelve too many--but at least they're snappy, e.g., Millions need jobs today!

Left Voice will agree with most of the SWP's bullets, so it's not clear to me why they're trying to reinvent the wheel here. I'll suggest that this whole I wanna be the vanguard business is inherently sectarian.

I can't possibly go through all 51 points, but a few of them are likely civilization-ending--on the order of an asteroid hitting the earth.

They demand, for example, that

we must nationalize the banking system with the expropriation of private banks (while protecting the savings of working people) and form a single public bank that is controlled by workers and the people who keep their money there.

Bankrupting all the world's banks will completely freeze up the economy. All trade, finance, and savings will instantly disappear. Hundreds of millions of people across the globe will die of famine within a few months, and the death toll will likely reach billions within a few years. This deeply unserious proposal reflects the class composition of Left Voice--they're typically failed academics and artists from New York City who know nothing about money, finance, savings, economics, or anything else. 

Similarly (boldface in original),

Establish total conversion to renewable energy, which can be accomplished only by taking U.S. industry out of capitalist control and centralizing production for a rapid economic transition.

Again, our friendly English professors know nothing about how the electrical grid works. None of them have any background in electrical engineering. If they did, they would know that this is completely gonzo and will reduce the planet to a medieval lifestyle. As the lights are turned off and transport is reduced to horseback, billions of people will die of starvation and disease in short order.

They write:

Further, we reject the U.S. Constitution and the deeply undemocratic and oppressive system it upholds. A document written by slave owners more than 200 years ago should not stand as the highest law of the land. The reactionary institutions enshrined in this document, from the presidency to the Senate, were designed to keep power concentrated in the hands of the ruling-class minority, excluding the vast majority from society’s most important decisions.

On it's face, this merely destroys the United States rather than the entire world. But given the importance of the USA in food and energy production, not to mention our financial wherewithal, it's likely that this demand will have the same effect as the previous two--namely mass starvation on a global scale. 

Left Voice's opinion is held by extremists on both the Right and the Left. Not only do BLM and Antifa reject the Constitution, but so also do the Nazis and the Ku Klux Klan. For a description of the modern alt-right, I suggest they read my review of Bronze Age Mindset, whose author shares Left Voice's distaste for Constitutional government.

The alternative to the Constitution is not some better world, but instead rule by warlords and street gangs. Our silly academics look down into the abyss and somehow they see utopia down there. What have they been smoking?

That's a sample of the truly stupid, destructive demands. There are some others that, while less catastrophic, are ridiculous. For example,

Free and unrestricted access that makes voting easy, by making Election Day a federal holiday, instituting easy vote-by-mail nationwide, opening more polling places, abolishing all discriminatory voter ID laws, and ensuring free public transport to and from polling places.

Why bother with all the folderol?  Why not just have internet voting, accessible to anybody around the world. After all, if voting in US elections in a human right, then surely people in China should have as much a right to vote as I do--and without having to sneak across the border first. We can save money too--we won't need polling stations, holidays, or transport. If it's mob rule that you want, then surely this is the best way to get it.

Finally, there is this:

Demand a democratic, secular, single Palestine state in all the historic Palestinian territory, from the Jordan River to the Mediterranean, and an immediate halt to any further annexation of the West Bank. The only way to realize this demand of the Palestinian people is to fight for the dismantling of the Israeli state as a pro-imperialist and colonial enclave in the perspective for a workers’ and socialist Palestine where Arabs and Jews can live in peace.

Why do they restrict their demand to Israel? How about civil rights the Rohingya in Burma, or the Uighurs in China, or the Catalans in Spain, or the Serbs in Bosnia, or...? There are hundreds of other examples of ethnic conflict for which a "democratic, secular, single" state could be a solution. Yet they pick out Palestine. Why?

First, there's the very incongruity of it--a secular state with its capital in Jerusalem? Jerusalem, where the al Aqsa mosque is built upon the foundations of the Jewish Temple, surrounded by the streets where Jesus walked--and this is supposed to be a secular capital? If there's one thing we can all agree on, it's that none of the disputants want a secular solution. It's impossible.

Second, just as there are valid political arguments to be made for all the other listed ethnic conflicts, there is also a good political case to be made against Zionism. Perhaps some of our Left Voice friends are honest about their political motivations. But some are probably not--some are not merely anti-Zionist, but instead they're antisemitic.  For however honest the merely political anti-Zionists are, antisemites will also flock to the banner. And there are a lot more antisemites than there are anti-Rohingya, anti-Uighur, or anti-Serb.

It's antisemitism that drives the passion behind the Israel/Palestine conflict--and that's why it finds a unique place amongst the 51 bullet points.

Anyway, as befits a group of English professors, Left Voice's document is well and engagingly written. If you want an adventure in kooky, topsy-turvy land, it's worth the read.

Further Reading:

• The Revenge of the Lumpen Proletariat
• Left Voice on Trump's Tulsa Rally
• Louis Proyect and the More-Poverty Solution

The Declining Rate of Profit

I keep dinging my Trotskyist friends about the declining rate of profit--magic words they invoke to account for any economic problem at all. It is clear that they generally have no clue as to what that means. But honestly I, too, had no clue what that means, so I thought I'd best go educate myself.

The best source I've found is a conference paper by Michael Roberts, presented in 2011, entitled Measuring the rate of profit; profit cycles and the next recession (pdf). I also looked at two blog posts by Mr. Roberts, here and here. Predictably, there is a huge literature on this topic, and my brief perusal does not qualify me as an expert. So think of this as questions from a novice--for which there are perhaps simple answers--rather than a critique.

The question I always ask my Trotskyist friends is whether by profit they mean operating profit or return on investment--these, of course, are two different things. By Mr. Roberts' account it is some variant of operating profit, i.e., income minus expenses.

Marx's original equation for Rate of Profit (P) is

where s is the surplus value (i.e., what most people would call "profit), c is the total capital stock, and v is the total cost of labor. This is intended to be measured for the entire economy--not just for any individual company.

Mr. Roberts goes through many ways of calculating this equation, but eventually concludes "In my view, the simplest is the best." He measures surplus value as

Or, in words, surplus value is everything left over after depreciation on capital equipment and total wages paid to employees, i.e., something like profit. 

This looks a whole lot like EBITDA, or Earnings Before Interest, Taxes, Depreciation, and Amortization, which is the gold standard measure for operating margins. It's not clear to me why Mr. Roberts didn't use EBITDA, but I'll speculate because it's only calculated for individual companies rather than for the economy as a whole. He discusses why he doesn't subtract taxes, but he never mentions interest or amortization. 

That last seems to me to be a very important omission. He does write "But these shorter-length profit cycles are really the product of the running down the stock of working capital (called the Kitchin cycle, named after that economist) and not a decisive ‘turning-point’ in profitability," which sounds like amortization in disguise. He seems to believe that all companies amortize all their equipment at the same rates, i.e., over 16 year cycles, and then replace their equipment at the same time. I find this hard to believe. Why not subtract amortization from the measure of surplus value?

On the other hand, perhaps amortization is better included in the calculation of c--the total capital stock. Mr. Roberts chooses what seems to me to be a very strange measure, namely the cost of plant and equipment at the time of original purchase. Alternatively, other authors calculate c as the current replacement cost, which given inflation will be a larger number. Mr. Roberts argues that latter method misrepresents Marx's original purpose, and from his explanation I agree with him. But either way, to include the cost of capital without including amortization is misleading. Amortized equipment no longer counts as an asset beyond its resale value.

I might disagree with Mr. Roberts on some more general, philosophical principles. This sentence bothers: 

The cause of a crisis like the Great Recession must lie with the key laws of motion of capitalism.

Marx, who lived during an exciting time in physics when both thermodynamics and electromagnetism were completely elucidated, may be forgiven for thinking that economics follows physics-like behavior--some "laws of motion." In fact, economics is more a branch of psychology than physics, for it depends ultimately on what consumers want to purchase. Who would've guessed that the most used part of a mobile phone is not the phone but instead the camera?--a fact that put traditional camera makers out of business. Consumer choices like that have a vastly bigger impact on economics than hypothetical measures such as the "global rate of profit."

Likewise, Trump's biggest impact on the economy was likely not the tax cuts, but rather his bully pulpit--his constant championing about how great things are. It gets the animal spirits flowing. Economists call this "expectations," which is a strange word that understates the effect. Judging from Mr. Roberts' essay, Marxist economists discount expectations and/or psychology altogether, which to my mind means they don't understand economics.

Perhaps as a corollary, if there are no "laws of motion" in economics, then I don't understand the purpose in aggregating the rate of profit across the entire economy. Apple has a very high rate of profit; by contrast Walmart fixes its operating margin at 3%--lowering prices when it goes above that, and closing stores if it falls irremediably below that. What is the point of averaging those two companies together? What do you learn from that statistic? I will argue, nothing.

Finally, Marxists make some very weird definitions. They distinguish between productive employees and unproductive employees. The former are workers who actually sit on the assembly line and make, mine, or grow stuff to sell. The latter are all the others, such as managers, marketers, accountants, professors and real estate agents. Perhaps that made sense in Marx's day when the economy consisted only of commodities. But today 80% of all workers are in services. Are they all unproductive employees?

Walmart is ultimately in the marketing business. Yes, I know they have some trucks and warehouses, but at the end of the day it's all about marketing to consumers. Are all those shelf stockers and cashiers unproductive? I certainly don't think so. People like me would starve to death without the efforts of Walmart workers! (And I depend on their managers, too.)

I think the distinction between productive and unproductive doesn't make sense anymore--at least not in the way Marx understood it.

Marxists consider stock market investments to be fictitious capital, to be distinguished from the real money actually invested in plant and equipment as computed by Mr. Roberts, which they call organic capital. If you're stuck with a just-like-physics view of economics, perhaps this makes sense, but economics is not like physics--it's about psychology. Here is the relevant question: Is company X using its resources--capital and labor--in a way that maximizes benefits for their customers? If the answer is yes, then the stock will go up. If the answer is no, the stock will go down. The problem is that customers are fickle--they may decide they prefer telephones to cameras, or sushi to french fries, or whatever. As consumer sentiments change, then so do investor sentiments, and the stock price varies accordingly, even by the hour.

Unlike what Marxists claim, it is precisely so-called fictitious capital that determines business viability. The total market capitalization depends on the stock price--not the sunk cost of plant and equipment. The relevant measure of profit is return on investment, not some bizarre measure of operating income.

Further Reading:

• Robots and AI
• Let Them Eat Little Bits of Green Paper
• Kim Moody on "Persistent Inequalities"

Election 2020

Two days after I announced the End of Jeff Mackler's Campaign (posted 9/15), the candidate resurrected himself with a short piece entitled Socialist Action 2020 Presidential Candidate Jeff Mackler: No to Trump’s Coup Threat! (posted 9/17). He repeats every Democratic talking point in the book:

Socialist Action is in no way indifferent to Trump’s threat to cancel the 2020 election or to ignore its results on election day should he lose, or attempts to undermine the right to vote by defunding the Post Office to make the prompt counting of ballots difficult or using U.S. Supreme Court rulings to approve racist gerrymandering of districts and other undemocratic measures aimed at reducing the vote of Black and Latinx people. While we have always exposed the reactionary nature of bourgeois elections and all their anti-democratic aspects, we are far from the point of ceding this institution to would-be tyrants like Trump.

Mr. Mackler's supposed defense of free elections is hypocrisy on steroids. Trotskyists--including Socialist Action--put no faith in "bourgeois elections," and participate in them only until they can put together a big enough mob to overthrow the system illegally, after which all elections will be banned. Or if not, then after the Revolution Mr. Mackler will win with 99.9% of the vote. The remaining 0.1% will be put in front of a firing squad.

My original post elicited a comment from UNAC Blog (United National Antiwar Coalition), which looks like an ultraleft front group for Socialist Action. The comment reads in full,

It seems that during this time, as we go through COVID, have had a massive response to cop killings and racism, as jobs are lost, rents coming due and the capitalist parties moving to the right and showing no way forward, the example of an independent socialist campaign - even a small one- is better than none at all.

I have no complaint about a small, independent socialist campaign--I only insist that it be competently run, especially if it claims the Trotskyist banner. "Competent" means, among other things, choosing a candidate with some minimal level of charisma.

I'll suggest that the Socialist Workers Party campaign of Alyson Kennedy and Malcolm Jarrett fits the bill. They're small, socialist, and in the larger scheme of things completely inconsequential. But they're out on the campaign trail, they seek endorsements from outside their own movement, and I believe they'll be on the ballot in at least a few states. 

If you don't like them, then vote for the Green Party.

True to form, Mr. Mackler hasn't been heard from since Sept. 17th--so I'll stand by my claim that the campaign is moribund. (By the way, whatever happened to Heather Bradford, who was initially chosen as his running mate? Unfortunately she left in the Socialist Resurgence split (h/t commenter John B)and is now a designated non-person--likely one of those destined for the firing squad after the Revolution.)

But back to the Democratic talking points that Mr. Mackler so proudly regurgitates in his lede paragraph.

Mr. Trump has never vowed to remain in office illegally. He has promised to appeal close election results all the way to the Supreme Court, which is his right. This becomes "undemocratic" only if he disobeys a court order--which he's never done and almost certainly won't do. (If he does then everybody, including me, will oppose him.) The Democrat's fearmongering about Trump organizing a coup is just that--fearmongering. (Indeed, it looks more plausible that the Dems organized a coup against Trump beginning in 2016.)

Likewise, the post office is not being defunded. It's got plenty of money through the end of the fiscal year, i.e., through the election. The debate is over next year's funding.

For somebody who is trying to "reduc[e] the vote of Black and Latinx people", Mr. Trump is sure spending a lot of time and money to recruit them as voters. He's gone out of his way to blame only Antifa (the all-white fascist grouping) for the violence, only rarely mentioning Black Lives Matter (the half-white fascist grouping). He's made numerous promises to help the Black community economically--and unlike the Dems, Trump tries hard to keep his promises.

It's worth noting that both Blacks and Latinos are very much in support of the police--unlike the white fascist-types that want to "defund the police." Not even Al Sharpton supports BLM on this issue. Kamala Harris can't make up her mind, and Joe Biden has no mind to make up.

Just recently, Joe Biden compared Mr. Trump to Joseph Goebbels. In other words, the accusations against Trump have gotten so extreme and so far removed from reality that it looks likely to backfire on them.

The New York Times claims to have detailed information about Trump's tax returns, from which the bottom line is that there's nothing in there that we didn't know already. He has no big investments in Russia. He didn't launder money through Russia. He took a big loss on his casinos, which he has been able to deduct from his subsequent income meaning that he's paid no income tax in recent years. He's being audited because of a large refund he got ten years ago, which if he loses he'll be on the hook for $100 million.

He has done nothing illegal--or even unethical. He's simply followed the rules the way they were written, which is what taxpayers do everywhere.

I predict Mr. Trump will win reelection, perhaps by a large electoral vote margin. The reason is (as Conrad Black puts it) that the Biden-Harris ticket is unfeasible. Biden is clearly in mental decline. He can't speak extemporaneously to the media--not even friendly media. He's increasingly unable to even read from a teleprompter. He is simply incapable of being president, regardless of any ideology. He can't state any reason for his candidacy except that he hates Trump.

The Democratic strategy is to a) let Trump destroy himself with his supposedly outrageous comments, and b) to tar him with whatever scandal they can come up with. Meanwhile, Biden is supposed to sit in his basement and appeal to his image as being "a nice guy" who's "one of us." The problem with this is that Trump is a known quantity--the man is an open book. There is no new information to be had about the man, and the notion there's some smoking gun somewhere is an illusion.

This won't work. Trump-hatred will not win a majority of voters, and without a positive reason people won't vote for Mr. Biden. The basement campaign will fail.

What's more mysterious to me is why they're keeping Ms. Harris under wraps. After all, given Joe's age and obvious infirmities, Kamala is likely to be president within the first term. Nobody really knows who she is, and I think the public is too risk averse to take a chance on a complete unknown.

So here's Mr. Mackler's chance! As bad as he is as a candidate, he is better than Joe Biden. At least he had the courage to go up against Paul Duddridge, which is more than I can say for cowardly Joe. And even though his program is completely wacko, at least there is one. The man has something to say.

Mr. Mackler's meager virtues notwithstanding, this blog endorses Donald J. Trump for President.

Further Reading:

• The New Socialist Resurgence Grouplet
• Heather Bradford on Abortion
• Boring Jeff Mackler Runs for President Again