Capitalism (Good & Bad) – Page 36 – Public Intelligence Blog

Needs Policy Summary, But Provides Full Details,

February 20, 2004

David K. Shipler

Edit of 20 Dec 07 to state that this is a book of lasting value that must be kept in print, and to add links.

This book complements Barbara Ehrenreich's book Nickel and Dimed: On (Not) Getting By in America Ehrenreich's is much easier to read and makes the same broader points. Where this book excels is in the details that in turn lead to policy solutions. I will go so far as to say that if John Kerry and John Edwards do not get hold of an executive summary of this book, and integrate its findings into their campaign as a means of mobilizing the working poor in the forthcoming election, then they will have failed to both excite and serve what the author, David Shipler, calls the “invisible.”

Invisible indeed. How America treats its working poor–people working *very* hard and being kept in conditions that border on genocidal labor camps, is our greatest shame.

The most important point made in this book, a point made over and over in relation to a wide variety of “case studies”, is that one cannot break out of poverty unless the **entire** system works flawlessly. To hard work one must add public transportation, safe public housing, adequate schooling and child care, effective parenting, effective job training, fundamental budgeting and arithmetic skills, and honest banks, credit card companies and tax preparation brokers, as well as sympathetic or at least observant employers. The author is coherent and compelling in making the point that a break or flaw in any one of these key links in the chain can break a family.

I am personally appalled at the manner in which H&R Block, to name the largest within an industry, and Western Union, to name another, are ripping off the working poor with a wide variety of “surcharges” such that they end up paying 25% of their tax return or their funds transfer back to Mexico. This is both usury and treason if you want to look at it in the largest sense. They are sabotaging the American economy in a time of war.

It surprised me to learn that while hospitals are forced to treat the poor in an emergency, they are also allowed to bill them, and these bills, for an ambulance ride or emergency treatment, often are the straw that breaks a family into destitution. This is outrageous and should not be permitted. Then the author tells us that it costs as much as $900 for a working poor family to declare bankruptcy and obtain the protection of the law from creditors, many of whom are cheats in the larger sense of the world. How can this be?!?!

It did not surprise me, but continues to distress me, to learn that the laws are not enforced. Although laws exist about minimum wage, humane working conditions (and humane living conditions for migrant workers), they are not enforced. The working poor are treated as less than slaves, for they are “used up and thrown out” with no defense against unfair firing. They are forced to work “off the books”, to do piece rate work at below minimum wage, this list goes on. In essence, our politicians have passed laws that make us feel good, and then failed to enforce them so as to achieve the desired effects.

The author documents both the jobs leaving the US, and the fact that new jobs pay less. As Paul O'Neil, former Secretary of the Treasury has noted, we have two economies in America: one embraces automation (and kills jobs), the other requires expert labor (not the working poor). We have a double-whammy here that is totally against the lower half of the economic spectrum, and it is being aggravated by an incoherent immigration policy that feeds the beast.

On page 139 the author just blew me away with documentation to the effect that 37 percent of American adults cannot figure a 10% discount on a price, even with a calculator, nor can this same percentage read a bus schedule or write a letter about a credit card error. He goes on, citing the National Adult Literacy Survey from the Department of Education, to note that 14% of adult Americans cannot total a deposit slip, locate an intersection on a map, understand an appliance warranty, or determine the correct dosage of a medicine. I had no idea!!! This reality comprises a “sucking chest wound” in the economic body of America, and it is not a chest wound that can be healed as things now stand.

There are many other daunting “facts of life” in this book about the working poor, and they all add up to a complete failure of both the national and state leaderships to be serious about long-term sustainable economic prosperity.

The author concludes with some suggestions for reform, and here I wish he had actually gone to the trouble of creating a one-page policy paper summing it all up. His most obvious suggestion is wage reform, not just at the bottom, but also at the top. As I read and hear about executives making $5 million to $80 million a year, the norm seeming to be around $20 million, I have to ask myself, have we gone nuts? Are stockholders so stupid as to overlook the fact that capping executive compensation at 100X the pay of the lowest employee ($20,000 low end, $2,000,000 high end) would do *huge* good at the bottom and in the lower middle ranks? The extreme wealthy in America are playing a short-term game that must be brought to an abrupt halt because it is killing the people, the seed corn of the future.

The Earned Income Tax Credit *works* but most of the working poor are afraid to file income tax returns.

The author ends, quite correctly, by pointing out that the ideological debate, removed from the facts, will not alleviate nor eliminate the suffering of the working poor. Right on. It's time for the facts, for a public debate about the facts, and for public policy (and enforcement) based on the facts. This author, already a Pulitzer Prize winner, has rendered a great national service.

2004/01/012009/12/04

Review: The Work of Nations–Preparing Ourselves for 21st Century Capitalism

4 Star, Capitalism (Good & Bad), Strategy

Incomplete but Original and Worthy of a Second Look,

January 1, 2004

Robert B. Reich

Edit of 21 Dec 07 to add links.

One reason I read only books I have bought (so that I may liberally mark them up) and tend to never discard a book, which is becoming a real problem in my basement, is because current reading will often lead one back to some gems and to a reestimation of earlier readings. Robert B. Reich's “The Work of Nations: Preparing Ourselves for 21st Century Capitalism” can be read with renewed appreciation and respect if one if also now reading William Greider's The Soul of Capitalism: Opening Paths to a Moral Economy or any of the books by Herman E. Daly (e.g. Ecological Economics: Principles And Applications).

I read Reich's Locked in the Cabinet, but this book remains a better gauge of his value to America, and I do hope we get a chance to hear from him again. If you have not read this book, it is a real bargain as a used book and you should buy it–Reich will remain relevant for decades to come.

Relevant books published since then:
The Battle for the Soul of Capitalism: How the Financial System Underminded Social Ideals, Damaged Trust in the Markets, Robbed Investors of Trillions – and What to Do About It
Blessed Unrest: How the Largest Movement in the World Came into Being and Why No One Saw It Coming
Natural Capitalism: Creating the Next Industrial Revolution
The Wealth of Networks: How Social Production Transforms Markets and Freedom
The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Wharton School Publishing Paperbacks)
Revolutionary Wealth: How it will be created and how it will change our lives

2003/12/072009/12/04

Review: In an Uncertain World–Tough Choices from Wall Street to Washington

5 Star, Capitalism (Good & Bad), Economics, Politics

Solid Serious Overview of Core Economic Security Issues,

December 7, 2003

Robert E. Rubin

Edit of 22 Sep 08 to recognize that Rubin did not bail out Mexico, he bailed out Wall Street, and Paulson is about to rip the heart out of every American taxpayer in the boldest and most insane national treasury rip-off anyone on this planet could conceive of….we don't need a Wall Street bail-out, we need a complete recall of both the Executive and the Legislative leaderships–a fresh start. These pigs have destroyed the nation–see my new book, free online from 24 Sep, ELECTION 2008: Lipstick on the Pig.

Edit of 21 Dec 07 to recommend update and reissuance in collaboration with John Bogle, author of The Battle for the Soul of Capitalism: How the Financial System Underminded Social Ideals, Damaged Trust in the Markets, Robbed Investors of Trillions – and What to Do About It and a few others whose books are linked below.

Rubin is self-effacing and not at all, in any way, claiming personal credit for how well it went as America experienced one of its greatest economic booms, despite some rather scary international threats to our economic security. I believe this will be a classic reference for years to come.

1) Early on, and then throughout the book, Rubin does a fine job of documenting and explaining why markets, which are relatively autonomous beasts, and at least as important as governments and government policies, in setting the economic security environment.

2) A corollary to the above, but all the more important because it dovetails precisely with Henry Kissinger's caution (“Does America Need a Foreign Policy”), is Rubin's detailed articulation of how U.S. politics and US policy mechanisms are not now well-suited to coping with the new risks of the global economy. The speed and reach of the marketplace is now such that the industrial-era government bureaucracies and 1970's information technology stovepipes are completely inadequate–however well-intentioned a President might be, the current structure and current approaches to establishing economic strategies and policies are NOT OKAY.

3) Rubin is quite excellent in explaining in a very understandable manner how specific fiscal policies toward other states (e.g. Mexico) can be directly related to consequences in terms of illegal immigration (surging if Mexico is allowed to collapse), illegal drugs and crime, and trade.

4) Especially helpful in this book is its emphasis on the importance of educating the American public as a pre-requisite to the politics of making the right economic decisions for America. Rubin quotes Clinton as saying that one of his (President Clinton's) greatest lessons learned from his two-term Presidency was the need to do the public education (political strategy) before the public politics and deal-making. Senator David Boren (today President of the University of Oklahoma) and Mr. David Gergen have made this point earlier (“Preparing America's Foreign Policy for the 21st Century”), but Rubin's focus merits strong emphasis, because in combination, our mediocre policy structure and our mediocre public understanding combine to create not one but two devastating Achilles' heels for US economic security policy-making.

5) Rubin excels at documenting the direct relationship between poverty and inner-city distress and poor education of important segments of America's population, and its economic well-being. He extends this analysis internationally, focusing on how vital it is to extend the fruits of prosperity across all nations and peoples, if the US is itself to have sustainable economic stability and prosperity.

6) The book is a case study in decision-making, a manual of how to and how not to approach problems for which, as he notes with frequency, there are no certain outcomes. I was very impressed by his acute sensitivity to the fact that most subordinates are incapable of speaking utter truth to their bosses–they pull their punches. This is equally true, as he explicitly notes, of Chief Executive Officers invited to meet with the President. Rubin appears gifted in his ability to draw out the concerns and negatives from all subordinates, with a special kindness extended by him to the most junior or front-line subordinates, a kindness that is repaid in full with honest opinion.

7) I noticed some very strong observations from Rubin on the inability of the Department of State and of the Central Intelligence Agency to provide him with core information that he needed on Indonesia, among other fiscal hot spots. Lee Kuan Yew from Singapore turned out to be much more useful to him in understanding the context and possibilities. From this Rubin draws the lesson that the Department of State needs to get smarter about economics, and that a new kind of Foreign Service Officer is needed, one that is not just following political matters, but economic matters. Indeed, I would go so far as to say that State needs to migrate from the old POL-MIL mind-set, to a new POL-ECON mindset. CIA must of course get much better at understanding demography, public health, economics, and infrastructure issues down to the province and township letters, something that will require them to finally take Open Source Intelligence (OSINT) much more seriously, and to become competent in 29+ languages.

8) “Rubin's Rules”, actually prepared by his staff as a going-away gift when he departed Treasury, are listed on page 251, with an 11th rule on page 252, and are alone worth the price of the book. They will not be repeated here, they are precious.

9) Rubin is critical of the private sector for having over-invested in Third World ventures without doing the due diligence related to risk assessment, and he ventures into some discussion of the importance of defining and communicating best practices, codes and standards for debt management, bankruptcy, deposit insurance, and bank supervision. I could not help but reflect on how much more important the ISO might become if it also becomes central to economic security and stability by contributing a standards process that helps reduce and mitigate risk for all.

10) There are many other gems in this book, from his review of “deficit economics” (and why it is an idiot idea writ large), to how Monica Lewinsky cost the US taxpayer much more than the cost of the impeachment proceedings, to the need to always review old assumptions, to the dangerous reliance by Wall Street on models (as with Long-Term Capital Management failure), to the need to redefine GDP calculations (in addition to deducting negative investments like prisons and health care that others have recommended, Rubin suggests that the presence or absence of positive investments related to environmental sustainability need to be included).

This is a solid serious book about core economic security issues. I venture to say that no one could run for President, or be an effective President, without absorbing all that Robert E. Rubin has to teach us. His assistant author, Jacob Weisberg, is to be congratulated for helping bring this extraordinary work to the marketplace. We all benefit.

2003/09/132009/12/04

Review: The Soul of Capitalism–Opening Paths to a Moral Economy

5 Star, Capitalism (Good & Bad), Consciousness & Social IQ, Corruption, Economics, Philosophy

Parts the Seas, Restores Hope & Morality to the American Way,

September 13, 2003

William Greider

Edit of 21 Dec 07 to add links.

The author has written a book that outlines an implementable vision worthy of the Nobel Prize.

If you buy just one book this year, if you read just one book prior to voting in the primary and general elections of any country, this is the book. It combines common sense, a deep understanding of the flaws of a capitalist system that has been hijacked by unethical elites, and an extraordinary diversity of interviews and sources that I found compellingly sensible and straight-forward.

Politically and economically, this book offers the citizen-voter-consumer-stockholder an objective and balanced account of exactly what is wrong with the existing American way of capitalism (both at home and abroad), and how we might, over time, fix it.

Most importantly, the author destroys all of the myths and lies about the rising American standard of living, and demonstates that when one revises the Gross Domestic Product calculations to substract rather than add the negative products such as prisons and health care stemming from unsafe products and practices, the over-all national economic indicators have been steadily declining for over thirty years.

The author is brilliant–truly brilliant–in studying the work of others and putting together a case for redefining capitalism and the financial accounting for capitalism to include social costs and benefits as part of the evaluative calculus. He excells at understanding and explaining the benefits to be had by introducing long-term sustainability, worker-friendly labor and management cultures, and balanced work force composition (save the middle class) and compensation (end the looting of America and its pension funds by an out of control corporate elite).

In discussing the soul of capitalism, the author is in fact discussing America's soul. His book is not only a handbook for grassroots and collective bargaining actions by all communities and assocations, it is a reference point by which Americans specifically, but all national in all nations, should be judging their political and economic and social leaders. People *can* take back the power, but first they must understand that the existing economic situation is so unstable and unhealthy that it virtually guarantees life on Earth will end within the next 100 years.

Although the book clearly mandates a reordering of both the American economic and the American political systems, and the author addresses those, he placed the bulk of his emphasis at the grass-roots level, and discusses how specific organizations and communities across America are “by-passing Washington” and establishing revolutionary new covenants for community-based, labor-friendly, sustainable economics.

The book as a whole draws a clear distinction between what one might call Bush Economics (loot the commonwealth, enrich a very tiny elite that already has most of the wealth) and Dean Economics (recover the $500 billion a year in unwarranted corporate subsidies and financial fraud, restore the social side of the capitalist value system, share the wealth, sustain the environment).

The author is a man of faith. Throughout the book, but especially when discussing the Social Gospel movement and reform theologians with close ties to extreme suffering in communities that have lost everything, he can inspire tears of both sadness at what we have done to ourselves, and joy at the possibilities for the future if we the people take back the power.

At every turn in the book one reads about the connection between capitalism and democracy–between corrupt capitalism and the falseness and injustice of American democracy and foreign policy (see our reviews of Paul Krugman's “The Great Unraveling”, Jonathan Schell, “The Unconquerable World”, and Mark Hertsgaard, “The Eagle's Shadow”)–and between moral capitalism and democracy restored.

Drawing on the work of David Ellerman, William Greider discusses the master-servant relationship between corporate employers and human employees, and concludes, as does Ellerman, that all of the injustices of capitalism are based on a legalized fraud. “The ‘fraud' is the economic pretense that people can be treated as things, as commodities or mahcines, as lifeless property that lacks the qualities inseparable from the human self, the person's active deliberation and choices, the personal accountability for one's actions.”

Three additional notes (this review barely scratches the surface and cannot do justice to the wealth of knowledge the author is communicating in a very effective manner):

1) If the labor unions come together to use their pension funds as sledge hammers, they can do a great deal of good in both reforming Wall Street and nurturing labor-friendly and environmental-friendly corporate behavior.

2) The retired population in America represents an untapped national asset–a wise President would find ways to use this virtually unlimited pool of social and functional talent to revitalize communities, schools, families, businesses, and non-profit endeavors.

3) Both the corporate governance model and the enforcement model are so severely flawed that they must be over-turned. Corporations should not have legal personalities that eliminate accountability for the individuals managing them, and the enforcement process needs to be turned on its head, focusing on incentives for higher social performance rather than punishments for the occasionally prosecuted rogue corporation.

In relation to foreign economic relations, the author provides a superb complementary reading to Clyde Prestowitz's book, “Rogue Nation: American Unilateralism and the Failure of Good Intentions.” As he puts it so nicely, in today's world walls do not work and there is no place for corporations to hide once the anger of the people is aroused. America must not only clean its own house, but in so doing, in restoring the morality of capitalism and the realiy of democracy, America will again be a land of ideals instead of hypocrisy, a land of liberty instead of looting, a land that inspires the world instead of corrupting it.

America, and the world, are at a turning point. I pray that no fewer than 50 million Americans will read this book, and I urge every faithful Amazon customer to buy 5 copies of this book and give them out as part of re-engaging every adult in the vital process of restoring democracy and restoring morality to capitalism.

2003/08/222009/12/04

Review: Manufacturing Consent–The Political Economy of the Mass Media

6 Star Top 10%, America (Founders, Current Situation), Capitalism (Good & Bad), Censorship & Denial of Access, Communications, Culture, Research, Democracy, Economics, Information Society, Misinformation & Propaganda

25 Years Ahead of the Crowd–Vital Reading Today,

August 22, 2003

Edward S. Herman

Edit of 22 Dec 07 to add links.

It is quite significant, in my view, that today as I write this Al Franken, Lies and the Lying Liars Who Tell Them: A Fair and Balanced Look at the Right is #2 at Amazon, and Sheldon Rapton and John Stauber, Weapons of Mass Deception: The Uses of Propaganda in Bush's War on Iraqis #114 at Amazon. Not only are the people awakening to the truth, which is that they have been had through a combination of inattention and manipulation, but these two books and several others in this genre are validating what Chomsky was telling us all in the past 25 years.

The ability to set the agenda and determine what is talked about and how it is talked about is at the root of hidden power in the pseudo-democratic society. Chomsky was decades ahead of his time in studying both the power of language and the power of controlling the media message. Today, as we recall that so-called mainstream news media *refused* fully-funded anti-war advertisements that challenged the White House lies (62 of which have been documented with full sourcing in various blogs, notably Stephen Perry's Bush at War blog), we must come to grips with the fact that America is at risk.

Thomas Jefferson said “A Nation's best defense is an educated citizenry” and Supreme Court Justice Branstein said “The greatest threat to liberty is an inert public.” Today we lack the first and have the second, but as Amazon rankings show, the people, they are awakening. It is through reading, and following the links, and informed discussion, that the people can come together, using new tools for peer-to-peer information sharing and MeetUp's, and take back the power.

Chomsky had it right. It took 25 years for all of us to realize he had it right. I rise in praise of this great man.

Other links that validate his ethics and intellect:
Vice: Dick Cheney and the Hijacking of the American Presidency
Running on Empty: How the Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It
The Battle for the Soul of Capitalism: How the Financial System Underminded Social Ideals, Damaged Trust in the Markets, Robbed Investors of Trillions – and What to Do About It
Independents Day: Awakening the American Spirit
Day of Reckoning: How Hubris, Ideology, and Greed Are Tearing America Apart
Al On America

2003/08/202009/12/04

Review: High Noo–20 Global Problems, 20 Years to Solve Them

6 Star Top 10%, Best Practices in Management, Capitalism (Good & Bad), Complexity & Catastrophe, Complexity & Resilience, Environment (Problems), Environment (Solutions), Future, Games, Models, & Simulations, Peace, Poverty, & Middle Class, Priorities, Public Administration, Survival & Sustainment, United Nations & NGOs, Values, Ethics, Sustainable Evolution, Voices Lost (Indigenous, Gender, Poor, Marginalized), Water, Energy, Oil, Scarcity

Straight-Forward, Understandable, URGENT, “Strong Buy”,

August 29, 2003

Jean-francois Rischard

Edit of 21 Dec 07 to aadd comment and links.

Comment: This is still the best strategic overview and a book I would recommend all. See the others below.

Having read perhaps 20 of the best books on global issues and environmental sustainability, water scarcity, ocean problems, etc, over the past few years (most reviewed here on Amazon) I was prepared for a superficial summary, political posturing, and unrealistic claims. Not this book–this book is one of the finest, most intelligent, most easily understood programs for action I have ever seen. The book as a whole, and the 20 problem statements specifically, are concise, illustrated, and sensible.

The author breaks the 20 issues into 3 groups. Group one (sharing our planet) includes global warming; biodiversity and ecosystem losses, fisheries depletion, deforestation, water deficits, and maritime safety and pollution. Group two (sharing our humanity) includes massive step-up in the fight against poverty, peacekeeping-conflict prevention-combatting terrorism, education for all, global infectuous diseases, digital divide, and natural disaster prevention and mitigation. Group three (sharing our rule book) includes reinventing taxation for the 21st century, biotechnology rules, global financial architecture, illegal drugs, trade-investment-competition rules, intellectual property rights, e-commerce rules, and international labor and migration rules.

The author's core concept for dealing with these complex issues intelligently, while recognizing that “world government” is not an option, lies with his appreciation of the Internet and how global issues networks could be created that would be a vertical complement to the existing horizontal elements of each national government.

The footnotes and index are professional, but vastly more important, the author's vision is combined with practicality. This is a “doable-do” and this book is therefore my number one reading recommendation for any citizen buying just one book of the 360+ that I have recommended within Amazon. Superb.

2003/08/162009/12/04

Review: The Pathology of Power

5 Star, Banks, Fed, Money, & Concentrated Wealth, Budget Process & Politics, Capitalism (Good & Bad), Congress (Failure, Reform), Corruption, Executive (Partisan Failure, Reform), Impeachment & Treason, Justice (Failure, Reform), Military & Pentagon Power, Misinformation & Propaganda, Power (Pathologies & Utilization), True Cost & Toxicity, Truth & Reconciliation

Brilliant Detailed Exposure of Power Killing Intelligence,

August 16, 2003

Norman Cousins

Edit of 22 dec 07 to add links.

This book richly merits republication, and it is fortunate that so many copies are still available. Consider the author's opening statement:

“Connected to the tendency of power to corrupt are yet other tendencies that emerge from the pages of the historians:

* The tendency of power to drive intelligence underground;

* The tendency of power to become a theology, admitting no other gods before it;

* The tendency of power to distort and damage the traditions and institutions it was designed to protect;

* The tendency of power to create a language of its own, making other forms of communication incoherent and irrelevant;

* The tendency of power to spawn imitators, leading to volatile competition;

* The tendency of power to set the stage for its own use.

This is simply a brilliant, reasoned, well-documented and well-structured look at the greatest threat to any Republic's national security and prosperity: absolute power with its attendant absolute corruption. All that the author has to say over his 13 chapters, from why Hiroshima to the reality of General MacArther to General and President Eisenhower's prophetic emphasis on “true” security rather than the “cooked books” false security of the military-industrial complex, every bit of this is directly applicable to the national security challenges–and the internal ethical challenges–facing the American people are their largely corrupt national political system at the dawn of the 21st Century. Of course it applies to all other nations as well, but as the Americans are the largest bull, they do the most damage to themselves as well as to others.

The author concludes with some “first principles” that are alone worth the price of the book, these are abbreviated here:

* security of the human commonwealth above security of the state

* well-being of mankind above well-being of any one nation

* needs of future generations above the needs of current generation.

* rights of man over the rights of the state

* private conscience over public edict

* ordeal of peace over easy drift of prosperity

His final sentence will not be understood by those who “do not do nuances.” He says: “The challenge, therefore, is to recognize that national security depends on a wide range of factors, some of them nonmilitary in nature.” He goes on to list the freedoms and well-being of the society itself, the focus on making human development the highest national security priority; the selection of creative transformative rather than manipulative leaders; the articulation of national goals that win foreign support on their merits; the strengthening of international institutions; and finally, the recognition that governance must be focused on the common good, not on retaining power. To lead properly is to be free of corruption. Anything else is pathological and undermines national security.

More recent books expanding on this theme, with reviews:
Vice: Dick Cheney and the Hijacking of the American Presidency
Running on Empty: How the Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It
The Battle for the Soul of Capitalism: How the Financial System Underminded Social Ideals, Damaged Trust in the Markets, Robbed Investors of Trillions – and What to Do About It
Weapons of Mass Deception: The Uses of Propaganda in Bush's War on Iraq
Blood Money: Wasted Billions, Lost Lives, and Corporate Greed in Iraq
Sleeping with the Devil: How Washington Sold Our Soul for Saudi Crude
Conspiracy of Fools: A True Story
The Informant: A True Story
Legacy of Ashes: The History of the CIA
9/11 Synthetic Terror: Made in USA, Fourth Edition

Category: Capitalism (Good & Bad)

Review: The Working Poor–Invisible in America