Thank you Barbara Ringer

Our lives are bound by complex ties that connect us to people we never know or never meet. I did not know this woman who died on April 9 at the age of 83. I only realized our connection when I read her obituary in the Washington Post on Sunday April 26.

Barbara Ringer, you see, was the main architect of the Copyright Act of 1976. This Act affects my life as a writer and academic on a near daily basis. The law it enacted allows fair use whereby scholars can quote short extracts from copyrighted work, and it also extends copyright for an author’s lifetime plus fifty years. Before Ringer’s bill revised copyright, it only lasted for 28 years from the date of publication unless renewed. Every year I receive small--very small--royalty checks. My royalties offer little purchasing power but enormous satisfaction. They are manna from heaven, small but wonderfully unexpected gifts and cheering reminders that my work continues to be read and used.

Barbara Ringer worked at the Library of Congress most of her life. She crafted the basis for the 1976 Act, thus assuring me the ability to quote other writers as well as securing the copyright of my work for a long time. She defended the rights of creative people to have their work protected. Receiving her law degree from Columbia University in 1949, Ringer had to battle a sexist world, and she successfully won a discrimination suit in 1973 after she was passed over unfairly for promotion. She gave her collection of books and movies to the Library of Congress. Furthermore, she placed the land she owned in conservation easements so that the property remains wild in perpetuity. Her many good deeds will live on long after she has gone.

So thank you Barbara Ringer.

Finance Capitalism and Public Policies

In the early 20th century, the Austrian economist Rudolf Hilferding proposed that a new form of capitalism was taking hold. In his book of 1910, Finance Capitalism (Das Finanzkapital), he ventured that the increasing concentration of economic activity and banking into larger and larger combines was effectively producing a new form of capitalism, the finance capitalism of the book’s title. Because this new form of capitalism controlled the flow of investment, he suggested that it was displacing competitive industrial capitalism while creating a demand for a centralizing and “privilege-dispensing state.” According to Hilferding, finance capitalism was always on the lookout for state intervention to prop up its wealth and privilege. Sound familiar?

Here is a photograph of a scary looking Rudolf Hilferding.

Fast -forward almost 100 years and we can see the full unfolding of Hilferding’s prediction. It is evident in the massive amounts of money being made. Lloyd Blankfein, the CEO at Goldman Sachs, received compensation of around $43 million for fiscal year 2008. Lots of people make lots of money in this sector, and as we now know it is neither connected to their skill in assessing risk or foresight in managing change and economic uncertainty. The compensation reflects itself: people get paid a lot, not necessarily because they are any good, but because they are in this sector. And the sector binds government to its needs and requirement through the slick passages of individuals who move effortlessly and often from finance to government and back. These moves transcend party affiliation: Paulson moved from Goldman Sachs to Treasury Secretary under Bush: Rubin moved from Treasury under Clinton to Citibank after deregulating the banking system; and more recently Rubin’s colleague at Treasury, Larry Summers, moved from a lucrative hedge fund gig to advising Obama. In the May issue of The Atlantic, the former chief economist at the IMF writes of a quiet coup in which the US government was hijacked by the finance industry (http://www.theatlantic.com/doc/200905/imf-advice).

Public policies are not only shaped to suit finance capital--and these include the promotion of free movement of capital across borders, the repealing of regulatory frameworks and the overturning of oversight regimes--but also are taken for granted as “the right and only things to do” in the name of general welfare. While change is currently afoot for reregulation, be on the lookout for how the resultant systems will be shaped by financial interests.

In the fall of 2008, the US Congress could not move fast enough to prop up the banking system. The $750 billion TARP (Troubled Asset Relief Program) bailout was exactly the “privilege-dispensing” Hilferding was writing about in 1910. And compare the political response to the banking crisis with the meager, parsimonious reaction to the problems of the automotive industry or even of the housing crisis. Cars and housing are important, but not nearly as important, in this new form of capitalism, as finance and banking. Paulson and Bernake managed to frighten politicians into accepting the package by painting a scenario that the world was going to collapse if nothing was done. This may or may not be true. My argument is that this conclusion comes less from a fully formed economic analysis than from the contemporary ideology that fixates on banking and finance. The power of finance capitalism is such that this ideology is now viewed by the US government as the only the way to see and understand the world. Current policies and beliefs clearly reflect the interests of bankers and not the general welfare or common good.

Interview

Click on the above title to see me being interviewed by Professor Steve Braude about two of my recent books. It is a short 12 minute clip.

New infrastructure spending demands new thinking, oversight

This is a slightly revised and updated version of an op-ed piece that first appeared in the electronic journal Stateline.org. Click on the title above for the link.

Much has been made of the need for infrastructural investment to stimulate the economy. Traditionally, economists advise against large-scale infrastructure investments because they take too long to inject increased spending into the system. But this recession is likely to be so long and deep that long-term investments will play an important role in getting us to the other side of this mess.

The states and the feds have a huge backlog of things they need to build and repair, from schools and bridges to airports and mass-transit systems. Recent years have highlighted the costs of not tending to infrastructure. The collapse of New Orleans’ levees in the wake of Hurricane Katrina was the main reason for the flooding of the city. The collapse of the bridge over the Mississippi River in Minneapolis on Aug. 1, 2007, was a deadly reminder of the full costs of delaying repairs and maintenance.

According to the American Society of Civil Engineers the backlog of infrastructure now exceeds $2.2 trillion, yes trillion with a t. In their report card for 2009 the Society gives the nation a D for its infrastructure provision and maintenance.

Photo: John Rennie Short

We are in a crisis. But it is useful to recall that the Chinese word for crisis consists of two letters: One signifies danger, the other opportunity. This crisis affords us an opportunity to both stimulate the economy and tend to our much-needed infrastructure backlog. And many of these jobs cannot be outsourced. The work is done in this country, adding to effective demand and providing a basis for sustained growth.

There are two potential hazards associated with large-scale infrastructural investments. The first is that the money will be allocated in the usual pork-barrel fashion with powerful U.S. House and Senate committee personnel steering funds to their districts and states irrespective of the benefits.

In order to short-circuit the possibilities of future bridges to nowhere, we need a bipartisan commission that evaluates objectively the cost and benefit of major infrastructural investment. We already have a model that works. The recommendations of the Defense Base Closure and Realignment Commission (BRAC) cannot be cherry-picked by members of Congress. The recommendations are voted up or down in a block so that individual members cannot influence the fate of individual bases. A similar procedure for a National Infrastructure Commission is essential to reducing wasteful spending.

A second potential problem is that, just like with wars, we tend to fight the next one with the strategies of the last one. We must avoid building new infrastructure geared towards the needs of the last economic growth wave.

A National Commission on Infrastructure would need a mandate to build for the future, not just for the short term and the present. The interstate system was perfect for the car age coming into its own in the 1950s. What we need now is infrastructure that promotes smart growth and long-term sustainable economic growth. Building more bridges or motorways just because that is what we always have done is to build for the 1950s, not the 2050s. New and improved infrastructure should be directed toward more creative use of mass-transit systems, refurbishing our aged inner cites and inner suburbs and improving citizens’ lives, and laying the basis for a greener economy.

We are in a crisis. From the nation’s last great crisis we created the New Deal. We need a New ‘New Deal,’ one that appropriately funds and fairly distributes infrastructure projects to states that lay the foundation for a smarter, greener, more competitive economy. We need a Metro Green Deal for a new infrastructure commission that allocates investments so that we can link public and private, city and suburb, rich and the poor in an America of and for the future.

A moral economy

The great historian, E. P. Thompson, first raised the issue of the moral economy of the crowd in a paper published in 1971. He was referring to the food riots, which occurred every ten years or so in late eighteenth-century England. He demolished the old belief that the riots were spasms of hunger, suggesting instead that they represented a ‘highly complex form of direct popular opinion’. They were about establishing the moral price of food rather than the going market rate.

We have witnessed the moral economy of the crowd last week in the US with the public outcry over the $165 million retention payments to workers in the bailed-out insurance giant AIG. The company had followed some very risky practices, jeopardized the entire US financial system, lost a great deal of money and was eventually bailed out by the federal authorities.

On the surface, the retention payments are small compared to the $170 billion that the company received. With more to come. And many of the people responsible for the risky behavior had long left the company. But the popular sentiment was not a calibrated public policy response; it was a restatement of a moral economy in the face of a market economy out of step with current realities and popular concerns.

Crowds in Washington DC. Photo: John Rennie Short

The financial service sector at the top level is over rewarded. The system of bonuses and retention packages originated when both profits and risks were borne by partners in trading companies. Now, in large public companies, the upper executives overpay themselves, a practice authorized and condoned by compliant, collusive boards, while the risks and costs are socialized and paid by the shareholders or eventually the government and the public. The former CEO of Countrywide, a mortgage company that specialized in risky subprime mortgages, made out very well in the last six months of 2007. Angelo Mozilo, who looks like a lizard in an expensive suit, was paid almost $2 million in salary, given $20 million in stock and sold $121 million in stock. The company meanwhile lost $1. 6 billion while the share prices fell 80 percent. Bad luck for the shareholders, but no problem for Mozilo.

It is against the background of the widespread appreciation of privatized benefits and the public nature of the costs that people responded to the AIG bonuses. What is surprising is how quickly the political system responded to peoples’ anger: within a week of the bonuses becoming public, the House introduced a measure to tax the benefits up to 90 percent.

The close connection between the public mood and federal response is rare. The founders were distrustful of a full and functioning government by all the people. The Congress and the other two branches, the executive and the judicial (an oligarchy of lifetime appointees whose ideology always seems half a century behind the general public), limit and blunt the expression of the popular will into policies and politics. Policies in Washington DC are shaped by interest groups who hone regulations to meet their needs. The political system listens to the power of money. Politicians desperately need money to stay competitive, win races and stay in power. Those with most money have the best access: they have the power to influence and advise. Ordinary people exercise political choice at elections but those with money exercise real political power.

So the events last week in Washington were highly unusual. The consequent legislation may not stand up. Already experts are pointing to its haste and questioning its legality. The proposed legislation was not well thought out, and it was done in haste and anger. But so are much of US federal policies. It was a raw expression of a true democracy. It was the moral economy of the crowd armed with blogs and emails rather than pitchforks and street demonstrations, reaffirming values of fairness and community over greed and self. The moral economy expressed against an amoral economy.

Suburban Gothic

Click on the title above to access the link.


Photo: John Rennie Short

Recent book review: Olympic Cities

This is shortened version of a book review first published in the Annals of Association of American Geographers. Click on the title above to access the link.

The summer Olympics are a global spectacular event. The first games of the modern era, held in Athens in 1896 involved 241 athletes from only fourteen countries and limited press coverage. Over the years, the Games have grown in size, scope and international media coverage. Over 10,500 athletes from over 200 countries participated in the 2008 Games in Beijing. The Games are now the most watched events on television, with a truly global audience. The Olympic Games embody the increasing globalization of the world; they represent a significant regime of international regulation, provide a shared cultural experience and create important platform for economic globalization as transnational corporations advertise in and through the Games. The increasingly global Games are hosted by cities. The Games are a global event that unfold in a particular place. There is increased academic attention. The 2007 collection, Olympic Cities; City Agendas, Planning, and the World’s Games. 1896-2012, edited by John and Margaret Gold, . John R. Gold and Margaret M. Gold is a very useful addition to the literature.

Centennial Olympic Park, Atlanta. Photo: John Rennie Short

The book is in three parts; the first considers the four main elements of Olympics festivals. The editors note a shift in the Summer Games from a shared but minor partnership with World Fairs through to the centrality of the modern Games. Stephen Essex and Brian Chalkley look at the stages in the evolution of the Winter Games from minimal infrastructure transformation, 1924-1932, through growing infrastructural demand to tools of regional development and large-scale transformations. The Olympics as cultural festivals is a less well know element. Margaret Gold and George Revill show ‘the cultural dimension of the games still struggles to gain significant international or even public recognition’ (pp. 81). They go on to point out that the Olympic Arts Festival can help to rebrand the city and encourage cultural tourism. The Paralympic Games are the most recent element of the modern Games. Their origins lie in the efforts of the staff of Stoke Mandeville hospital in England in the late 1940s to encourage physical therapy for paraplegics. The Stoke Mandeville Games took place in 1952. The Paralympics became part of the Summer Games in Rome 1960 and the 1964 Tokyo Games, then dropped only to reappear in Seoul in 1988 since when they have become part of every Summer Games. From 23 countries and 400 athletes in 1960 they have also grown; almost 4000 athletes from 150 countries will compete in the Beijing Paralympics. Part of London’s successful bid to host the 2012 Games was its commitment to make the Paralympic even more central to the Olympics festival.

Part 2 takes a more thematic look at the Games with separate chapters on financing, promotion, accommodating the spectacle and urban regeneration. As a very quick review they are useful, but readers looking for a closer examination of the costs and benefits, and the role of the games in urban renewal will have to look at more detailed studies.

Part 3 is a series of eight case studies: Berlin, Mexico City, Montreal, Barcelona, Sydney, Athens, Beijing, and London. The earliest is the Berlin Games of 1936 and one of the most important in terms of global spectacular and urban impacts. The subsequent selection is curious. We jump from 1936 to 1968 and some of the more recent Games are not considered. Another edition might want to include all the Games since 1968

This is a comprhensive collection that provides a historical perspective on the rise of the Olympics as a global event in held in particular cities, is suggestive of thematic issues and gives informative and detailed case studies. The issues of environmental sustainability and social justice are regularly addressed. It is an excellent addition to a growing literature on an event that embodies the global-national-urban nexus in all its complexities and paradoxes.