The Rude Guy Podcast #75 January XX, 20XX
[Fuck the Free Market]
This is Rich Zubaty and it’s time for a little story. A Christmas story with a happy ending. It’s called:
Merry Tongan Christmas 2010
It rained hard for a week, sometimes two inches in an hour, and then Christmas day dawned clear and bright. I hopped into my 86 Ford Bronco II and drove up the hill to the white church, spearing the blue sky, behind a huge monkeypod tree, that floated above the green lawn like a 150 foot sombrero.
I took a left down to the ocean and drove the beach road to St. Theresa’s Catholic Church to volunteer for the annual Christmas dinner, for the homeless. The program is called Hale Kau Kau, which means House of Food, and it had fed me for a couple years when I was living in my truck and couldn’t cook. So I felt grateful, and lonely, and wanted to help feed the homeless today. Christmas and Thanksgiving are the days St. Theresa’s treats the homeless like diners at an expensive restaurant. Today they sat down in the church hall with their freshly washed hair in their scrubbed tattered clothes and we fed them: salads with artichokes and olives and baby pickles, cubed melons, roast prime rib of beef with baby potatoes, and shrimp and scallops pasta in a white caper sauce. Pies, cakes, iced Starbucks frappuccinos. What a feast. We treated them like kings for a day. I had been on the receiving end of that hospitality a couple years ago and I will never forget how it made me feel human again. For two days a year, not a shiftless bum, but a human being entitled to basic dignity. And of course it makes you want to get up and get on with your life so you can be a server one day too!
At the feast I met my old Tongan friend Loma who told me they were having a Tongan Mass at five thirty PM that day. To me, the point of a Tongan mass is the Tongan singing, which is simply spectacular. So I said, I would come. After the homeless were fed, all us servers gobbled down plates of whatever was left, which was plenty, and then I drove down to the beach to take my siesta in the shade and sea breeze.
At five thirty I was back for the mass, the only white guy there. They handed me a Tongan language choir book and I tried to sing along. But mostly I just let the deep Tongan male voices wash over me, transport me back in time to Vava’u, everyone’s palm-rustled, turquoise-lagooned dream of what traditional South Seas living is like.
After the mass I was walking to my truck when Loma’s wife, Manalitha, told me they were having a “little party” back in the same hall where I had served the homeless earlier in the day, and I was “welcome to come”. Whenever Tongans wish to emphasize something they undersell it, so a “little party” could mean something big. Which is just what it was!
Tables piled with food. Marinated fish called “Ota”, and roasted baby pigs, “Puaka”, and octopus marinated in coconut milk, and mussels with coconut cream sauce, and tasty yams, “kapi”, and chicken and pizza and pies and cakes and a huge wooden bowl of kava with men sitting around it drinking from coconut shell cups, and playing guitars and singing island standards while the immense Tongan wives took the dance floor and clapped and spun, like the dainty hippopotamus ballet in “Fantasia”. And just beneath the stage were three folding tables piled eyeball high with wrapped presents, and every fifteen minutes or so the kids were called back to sit on the floor before the table as their names were individually shouted out, and each received an armful of presents. Then more kava drinking and singing and dancing, and eating, as the boys raced their new toy cars and trucks, weaving in and out of the dancers, then more presents for the kids, over and over again until each kid had about a dozen presents, and every adult had learned every kid’s name, and we were all stuffed to the gills. Real-live tribal culture community stuff. Tribal socialism. I love it.
So I started out the day to “give something back” and had a lovely lovely Christmas.
Now, back to the business of the New Year, which is called Reality. 2011 is the Year of Reality. Forget about Rabbits. Right now we’ve got a fantasy president trying to revive a fantasy economy while pissing away 2 billion real dollars a week on a real war, for fantasy National Defense pretexts, which is killing real children and real babies, in Afghanistan. In World War One, for every ten enemy combatants killed, one civilian was killed. In Afghanistan it’s the reverse. For every one enemy combatant killed, we kill ten civilians. Outrageous. [Rude Guy voice] And to achieve this we’re using smart bombs? Smart bombs? Believing smart bombs are precision weapons is like believing the fantasy that we live in a democracy where the will of the people rules…when 72% of us wanted a public health insurance option, and didn’t get it, 80% of us wanted the big banks broken up, and didn’t get it, and 65% of us want out of Afghanistan now, and we’re not getting it, and 61% of us want to tax the rich to rescue the economy, while Obama and his corporate boot lickers just extended tax cuts for the rich two years.
The Reality is: we do not live in a democracy.
Democracy runs on the principle of “one person one vote.” Free Trade runs on the principle of “one dollar one vote.” Free trade means rich people have more votes than poor people. That’s why the majority of us want these things, like stopping wars and taxing the rich, that we cannot get. In America rich people have more votes than poor people. The more Free Trade we have the less Democracy we have. So despite what smiley bobbing economic pinheads like George W Bush and Barack Obama would have you believe, Democracy and free markets are opposites. Natural enemies. The more freedom the markets have, the less freedom you have. That’s why our multinational corporations will always prefer to cut deals with dictators, like those in communist China. Or those in the White House. That’s right, the White House. Any politician who ignores the will of the people who elected him and serves the interests of corporations is a dictator, not a Democrat. Democracy is too volatile for free marketers. They prefer dictatorships. They prefer oligarchies. And that’s what they gave us. A brown-skinned free market ideologue who knows nothing about economics.
Only Nixon can go to China, or give us food stamps, and apparently only Republicans can stop wars and raise taxes. That’s the kind of ass backwards political culture we inhabit. The guys we elect to do the job, are the very people who are incapable of doing the job. Ta hell with the Democrats.
Here’s another reality:
Thomas Friedman is a free market asshole who is always wrong about everything all the time. Michael Bloomberg, Mayor of New York City, thinks Thomas Friedman is a great visionary writer. Guess what that makes Michael Bloomberg? Guess what that makes New York City?…New York is mob boss who lives by robbing the productive labor of the rest of the planet, and converting it into tradeable electronic digits. That’s legalized thievery and Michael Bloomberg is the duly elected thief in chief. He doesn’t think Wall Street brokers and dealers should get lower bonuses because their flagrant theft, which runs into the billions of dollars a year, is what he runs his city on. You know what I think of his city? Fuck his city. We don’t want it. We don’t need it. The rest of the world pays too high a price so that his city can sit there like a fat frog on the Lilly pad-of-life, gulping down everything that flies by. I hope global warming drowns his city. Hear hear for global warming! I’m sick of living in a world built on mythological bullshit cooked up by corporate butt-lickers like Thomas Friedman and Rush Limbaugh.
Here’s some more reality. Tom Friedman doesn’t know his ass from a hole in the ground when it comes to talking about free markets, Lexuses, or Olive trees. (to say nothing about all the cheerleading he did for invading Iraq). To paraphrase Cambridge economist Ha-Joon Chang in his book the “Bad Samaritans…Friedman wrote a free market pop bestseller called the “Lexus and the Olive Tree” that gushed with praise for Toyota’s Lexus factory. The problem with this wondrous example of the free market at work is that… it’s wrong! In 1958, after 25 years of making cars, Toyotas were so crappy that the Japanese people rebelled and wanted to buy American cars. But the government doubled down. It raised tariffs on American car imports, and simultaneously arranged long-term development loans for the Toyota Company. This is called Protectionism. Mercantilism. Government controls and government sponsored investment. And what did Protectionism produce? The best selling cars, and the best car company, in the world. Protectionism. They did not accomplish this with the free market. Or even the stock market. Japan does not rely on the stock market to drive industry. Japanese banks, yes folks BANKS, make long term loans to favored industries. These investors are in the game for ten or twenty years. They are not using computerized stock trading algorithms to trade shares every five minutes. No…Ten…or…twenty…years. They do the same thing in Korea and Taiwan and China, and they are kicking our butts economically. They have reined in the free market. Tied it up, to the tree of life. The free market is only for transnational corporations and fools.
I just read a depressing article by Andy Grove, the financial genius who co-founded Intel. He recently went to lunch at a geek hangout in Silicon Valley and a friend at a different table introduced Grove to his new Chinese investors. Andy shook their hands and stared at their bobbing smiling faces and left the restaurant – bummed out. He realized that these Asians aren’t even waiting for companies to get up and running before they extract the new technology. They’re coming right to Palo Alto and Mountain View and funding the start-ups, so they can appropriate the technology and build production plants…in China. Not here. In China! That means no Americans get jobs out of this. Just the Silicon Valley geeks cherry-picking the new technology and repackaging it for the Chinese. Some Whiz kid designers get a big payday, but the jobs are created in China.
Sez Andy Grove:
The underlying problem isn’t simply lower Asian costs. It’s our own misplaced faith in the power of startups to create U.S. jobs. Americans love the idea of the guys in the garage inventing something that changes the world. New York Times columnist Thomas L. Friedman, recently encapsulated this view in a piece called “Start-Ups, Not Bailouts.” His argument is: Let tired old companies that do commodity-manufacturing die if they have to. If Washington really wants to create jobs, it should back startups.
Friedman is wrong. [Says Andy Grove. Someone who actually knows something about business and start ups. Unlike Thomas Friedman.] Friedman is wrong. Startups are a wonderful thing, but they cannot by themselves increase tech employment. Equally important is what comes after that mythical moment of creation in the garage, as technology goes from prototype to mass production. This is the phase where companies scale up. They work out design details, figure out how to make things affordably, build factories, and hire people by the thousands. Scaling is hard work, but necessary to make innovation matter.
The scaling process is no longer happening in the U.S. And as long as that’s the case, plowing capital into young companies that build their factories elsewhere, will continue to yield a bad return in terms of American jobs.
Scaling used to work well in Silicon Valley. Entrepreneurs came up with an invention. Investors gave them money to build their business. If the founders and their investors were lucky, the company grew and had an initial public offering, which brought in money that financed further growth.
But these days some 250,000 Foxconn employees in southern China, produce Apple’s products. Apple, meanwhile, has about 25,000 employees in the U.S. That means for every Apple worker in the U.S., there are 10 people in China working on iMacs, iPods and iPhones. The same roughly 10-to-1 relationship holds for Dell, Seagate, and other U.S. tech companies.
You could say, as many do, that shipping jobs overseas is no big deal, because the high-value work — and much of the profits — remain in the U.S. That may well be so. But what kind of a society are we going to have if it consists of highly paid people doing high-value-added work — and masses of unemployed?
Scaling isn’t easy. The investments required are much higher than in the invention phase. And funds need to be committed early, when not much is known about the potential market. Unquote Says Andy Grove.
So Tom, the truth is that yes, American startups are creating lots of jobs. In China! And why would the U.S. government want to be funding startups to create jobs in China? You bonehead. You don’t know what you’re talking about and never did.
Andy Grove also says that since America dropped out of the battery manufacturing industry, we have such estrangement from battery technology, that now, as the world looks for batteries to power automobiles, we are completely out of the running, not only for manufacturing but even for inventing the technology.
Western mythology has taught us that the great success of industrial England was due to Adam Smith and his free market ideas. It’s all bullshit. Self-serving bullshit promoted by corporations and their lackeys like Tom Friedman and Michael Bloomberg and Rush Limbaugh, to justify the rape of the planet.
The Reality is: in the late 1400s King Henry the Seventh of
England realized that Belgium and the Netherlands were kicking England’s butt economically, by buying cheap raw English wool and turning it into valuable fabrics. So Henry set about to create the British Textile industry – the first high tech industry – which eventually led to inventions like the steam engine, to power looms.
How did he do it? By banning exports of wool to the Low Countries, and encouraging native textile manufacture. He and his successors starved the Low Countries of their raw materials, while he built up the manufacturing sector. This is NOT free market economics. It is Mercantilism. Protectionism. If he had not done that then, today England would be New Zealand, exporting mutton and wool, and some Dutchman would have invented the steam powered loom, and we would all be speaking Dutch, not English.
According to Korean economist Ha-Joon Chang in his book the “Bad Samaritans: the myth of free trade and the secret history of capitalism”… Adam Smith predicted that “any attempt to stop the importation of European manufactures” to the newborn United States of America would, quote “obstruct, instead of promoting the progress, of their country, toward real wealth and greatness.” What? This guy was an English asshole attempting to use “free markets” to justify British industrial imperialism. Just like we do to the rest of the world today! And worse, slave farmer Thomas Jefferson agreed with him!
Good thing Alexander Hamilton didn’t listen to them. Treasury Secretary Hamilton recommended all manner of tariffs, export bans on raw materials, tax rebates for industrial development, cash awards for innovation, and even more help, for what he termed “infant industries”. We swept his recommendations under the carpet until the War of 1812 with England, when we suddenly realized what suckers we had been to rely on British manufacturing – like British guns – and then Congress implemented Hamilton’s innovations whole hog, doubling his tariffs to 40 %, and thereby kicking off the wildly successful U.S. industrial economy that dazzled the world for 150 years. Protectionism, not free trade, is what made America America.
The Brits tried again to stamp down our fledgling industrialization, during the Civil War, by backing the “free market” South, which didn’t give a shit about northern manufacturing. President Lincoln raised tariffs to their highest level in history, higher than any other nation. And that powered our industrial development all the way until World War One, when European bankers prodded that human jackass Woodrow Wilson, into creating the Federal Reserve Bank. During the war tariffs went down, but when it ended they went back up. Throughout the 1800s, all the way through to World War Two, the USA had the world’s most protectionist economy, and the world’s fastest growing economy. But once we won World War Two we tried to pull Britain’s old trick to stay on top of the rest of the world, by touting free trade as the answer. We were the only ones with unbombed industries that had any manufactured items to trade. For twenty years we whipped their asses with our modern industrial capacity while they, in Japan and Europe – using protective trade barriers – rebuilt the industries that had been bombed to rubble. And once they were rebuilt, they conquered us, making our radios, televisions, automobiles, electronics, computers, LCDs and nowadays batteries for electric cars and even space technology. Technologies that WE developed through Federal Government Investment in Research and Development. Our Federal Government funds 70% of U.S. Research and Development, as opposed to the governments in most other developed countries funding only 20% of R and D. That’s not a free market at work. That’s Mercantilism! That’s how we create wealth in America and always have. Mercantilism, NOT free trade. Government help for industry. Our pharmaceutical companies don’t create new drugs, WE do, and hand them the patents. It’s insane. We don’t even retain patent rights to recoup our investment. Government help for industry. Mercantilism! It’s the best kept secret out there. Wikileaks just leaked that our State Department is making backroom sweetheart deals to foreign governments to sell Boeing aircraft. Call it what it is: Mercantilism. Socialism for the rich. Free markets for the poor.
This is a lot to digest. But the point is: England and America both became powerful nations behind protective barriers to nurture infant industries, NOT by way of Free Trade. Fuck Rush Limbaugh. He’s a sports announcer who knows nothing about free trade except that blowing free trade smoke up the asses of his listeners, pleases corporate oligarchs, who fatten his paychecks. And…in the long run…in the great arc of history…how well would it have gone for the Brits, in World War Two, if we had sent them soybeans and cotton instead of airplanes and tanks?
When it comes to economics don’t listen to Adam Smith or Thomas Jefferson. Or Rush Limbaugh or Thomas Friedman or even Michael Bloomberg. They don’t know what they’re talking about. And neither does Barack Obama for that matter. They’re all free market pinheads.
Fast forward to the present. Socialist France has TWICE as many family-run businesses as we do. TWICE as many.
Germany is enjoying the fastest economic recovery in the West, from the 2008 global meltdown. How come?
According to Thom Hartmann, one key to Germany’s miracle is the mittelstand, as the family-owned small and mid-size manufacturing firms, that dominate the economy, are known. AWS Achslagerwerk, is one such firm, located in the farmlands two hours west of Berlin. As in many such companies, this factory turns out specialized products: axle-box housings for Chinese and German high-speed trains, requiring climate-controlled precision measurement. With annual revenue of 24 million euros, the factory has won a significant share of the world market, though it employs only 175 production workers.
The workers at this company are highly skilled, and most stay with the firm for decades. When the downturn hit Germany in late 2008, manufacturing businesses declined the most, but subsidies from a government program called kurzarbeit paid firms to keep their workers part time rather than lay them off. “Fifteen to 20 percent of our workers were on kurzarbeit,” said Klaas Hubner, owner of the company. By hanging onto their skilled workers, companies like Hubner’s were able to rev up production quickly, when China’s stimulus boosted the market for their products in 2009.
In America, firms like Hubner’s are increasingly hard to find. Mixing social democratic values with Jimmy Stewart localism, Germany’s economy is running rings around America’s. Says Hubner, quote “What we have here is stakeholder capitalism, not shareholder capitalism.” And like most mittelstand owners, he adds: “I live where my company is located. I want a good image in the town I live in.”
Germany also benefits from an extensive system of government-run vocational technical schools, and a sector of municipally owned – government owned – savings banks that work solely with local businesses. Roughly two-thirds of German small and mid-size businesses get their loans from these banks. Says Patrick Steinpass, chief economist for the national organization of savings banks. Quote “Our municipal banks are restricted to doing business in their regions; they have to concentrate on the real economy.” Through such radical notions, like investing in the real economy instead of credit default swaps and oil speculation…Germany has thrived. This is not rocket science. It just takes a president who knows more about business than what he learned scooping ice cream at Baskin and Robbins and golfing with Wall Street banksters.
I just read “Where White Men Fear to Tread”, the autobiography of Russell Means, big chief in AIM, the American Indian Movement.
In the 60s and 70s, while I was mouthing off at protest rallies, and running scared from the FBI, these guys were grabbing guns and a taking a stand. Taking over Federal lands that had been stolen from them, and occupying the office of the Bureau of Indian Affairs in Washington D.C. AIM. They were tough streetfighting American Indians.
Means has lots to say about lots of different things, but what grabbed my attention is when he said: both Capitalism and Marxism are European white man’s systems, and there is no difference between them. Both produce an oligarchy of rich owners devoted to materialism, power, enslaving poor people, and raping the earth…and he’s right!…and despite all my fondness for socialism I have to give him credit. We need a traditional kind of Socialism. Tribal socialism. Tongan socialism. American Indian Socialism.
Means hated Marxists, especially after he got bombed and wounded by shrapnel, while he was visiting native Nicaraguan Miskito Indians, who were being genocidally murdered by Daniel Ortega’s Sandinista soldiers. Means, practitioner of traditional Indian religion, also despised Marxist atheism.
North American Indians are by nature Libertarian Socialists. At liberty to do whatever they want, but operating in tribal groups that are by definition, “social” (socialist). The welfare of the group assures your own welfare.
The tribal man accorded the greatest prestige is the one who gives the most away! Not the one who keeps the most for himself!
I call myself a Libertarian Socialist so I can walk that bridge connecting the best of the left, to the best of the right. Which also happens to be the bridge to native peoples. Theirs is not the most efficient system of government, but it is the most sustainable system. They’ve been at it 200 thousand years. We’ve been at it a mere 200. If you go to my web site you can see my paintings of Disappearing Lifestyles honoring sustainable lifestyles. Worth a look.
Our knee-jerk free market values are fucked, and we have no time to lose replacing them. Reward the man and woman who give the most away, and punish the man and woman who grab everything for themselves.
Destroy Wall Street, one hedge fund at a time, one investment banker at a time. If this were France we would be rioting on Wall Street and shutting down the investment banks right now. But we don’t, because we’re sheeple.
If you like this show, email me. So I hear about it. So I muster the will to keep on going. firstname.lastname@example.org and maybe I’ll even read some of your thoughts on the air…and visit my website too: happyfool.ORG And donate a few bucks if you can. Remember…2011 is the Year of Reality. NOT the Year of the Rabbit.