One has to feel a twinge of sympathy for the people who have chosen careers of service in governmentnot just in Washington but in all the capitals of the industrial West. Life just is not going to be as uplifting as it once was back when policy innovations were both credible and idealistic. But it must be especially hard for the crowd of wizards in Washington these days. Building consensus is hard when no one will talk to anyone else. Little wonder then that so much of the dramatic rescue being claimed by the White House in reality turns out to be merely putting rouge on the patient's cheeks and exclaiming how well the poor soul looks.

Underscoring the difficulty in charting a new economic course is the truth that the government's own statistics have become so distorted by age and the dynamics of change that they really don't reflect the depth of the crisis that is upon us. So the wizards continue to twiddle the levers of stimulus and regulatory rules changes without realizing that the dials and barometers have long ago broken connection with what is going on. Houston, we have a problem.

EVEN WHEN WASHINGTON ADMITS to a worrying 10-plus percent unemployment rate the real numbers are so far from reality as to be laughable. The recent headlined dip in the jobless rate turns out to have been caused by more than 50,000 already jobless people simply giving up and dropping out of the workforce. This has the statistically absurd result that the percentage of people deemed to be unsuccessfully seeking work is judged to have improved. When labor data is closely parsed for the measure known as "U-6," which includes people forced to work part-time, those "discouraged" from seeking jobs, and those "marginally attached," the rate trends above 17 percent.

DEMANDING NEW RULES to prevent financial excesses puts the bartender in charge of trying to ration the drunks and keep his tip jar filled at the same time. Congressional hacks like Nancy, Harry, and Barney will never admit to any blame for their insistence that Fannie Mae and Freddie Mac pressure the home mortgage industry into making home ownership available to people who were in no economic position to carry the burden. And don't expect the career regulatory agencies that oversee the financial marketplace to acknowledge fault for turning a blind eye when banks bundled up those dodgy mortgages into even more dodgy securities, or when Wall Street took the government guarantees of that paper as being dependable. Nor will Alan Greenspan (or Ben Bernanke) fess up that the devaluing of the dollar caused the world's key commodity markets to boost prices so sharply that ever more dollars were needed to pay for the same ingredients and that the rush for that liquidity made the dodgy mortgage paper irresistible to buyers from Norway to Beijing.

Yet until there is a general acknowledgement of government's blame in compounding this upcoming recession on the back of the earlier slump, how can we expect Washington to seek a new approach to the global marketplace?

It will get ugly, make no mistake. How ugly? Wait until those things we consider "rights" start to get squeezed in the interest of what our ruling politicians decree as the national interest. The uproar that greeted the mere suggestion that health care resources for the elderly might be circumscribed was genteel debate by contrast with what's ahead. The notion that rights can be rescinded as easily as they have been obtained is not a happy thought. Case in point: my mother recalled that she and my father had to marry in secret and she continued to live with her parents throughout 1936 because the New Dealers who controlled the Pennsylvania state legislature had decreed that no married woman could be a public school teacher or hold another state job when a jobless married man could take her place. Try that out on the next dinner table debate you attend and see how many bread rolls get thrown at you by women who are convinced that it can't happen again; times have changed, they've come a long way, baby. Well, yes. Nowadays most women don't have the option not to work.

Now ask yourself, how long will it take to reclaim the empty neighborhoods in Detroit, the empty condos in Las Vegas, or Phoenix, or, for that matter, in the McMansion-style suburbs that surround Washington, D.C.? What new jobs can be created to absorb the millions who have not only lost their jobs but who have stopped looking? What will those jobs make, and who will buy what is being offered?

Buddy, can you spare a dollar? Or maybe a Krugerrand?

This guy could depress a bride on her wedding night..

Ankles up, Murph!

OK, so Bush was a bigger fuckup and the "house of cards economy" built with home equity and credit card debt was bigger than we could even have imagined before. Not surprising.

Am I supposed to read all of this?

OK, so Bush was a bigger fuckup and the "house of cards economy" built with home equity and credit card debt was bigger than we could even have imagined before. Not surprising.

No. This has been building up for a hundred years. America is now broke, drowning in debt.

True. I voted for Obama, knowing he was a hail mary pass to save the country in some way that i couldnt comprehend. I could not EVER vote for any ticket with palin on it, and i dont regret my choice.

But the moment i heard he was appointing Geitner and Sommers, i knew we were fucked. We voted for change, meaning RADICAL CHANGE. the hail mary pass. and he gave us mediocrity and cowardice in return.

I'd have voted for ron paul if he had been on the republican ticket. what we need is REALISTIC leaders who are willing to be honest about the dark future we face and not paint rosy pictures to appeal to our warm fuzzy feelings.

BTW this was a good article and you should try to get through the whole thing.

The repub vs dem arguments are obsolete. we are so fucked that we need something entirely new.

re: We voted for change, meaning RADICAL CHANGE....I'd have voted for ron paul if he had been on the republican ticket. what we need is REALISTIC leaders ....

What we need is an electorate whose actions are not not reduced to the tantrum prone rantings of a frustrated teenager who would think that Obama ever promised "RADICAL CHANGE", or that Ron Paul was a "REALISTIC" leader.

pay attention. i never said obama promised radical change. i said thats what people who voted for him realized we needed. he was elected because people HOPED he would CHANGE things.

Nor did i say that ron paul was a realistic leader. simply that i wouldve voted for him over obama. and that realistic leaders are what we need.

reading comprehension...FAIL. better luck next time flunky.

Obama was elected not because of hope or change but circumstances. He had 5 times the money of his republican opponent, the media completely on his side, and John McCain as his opponent. Change any one of these 3 things and we would be looking at a different president.

How long before those in congress figure out what we need is to stop spending beyond our means. When ordinary people do this they end up in bankruptcy court.

A simple spending freeze for the next 5 to ten years would eventually bring our budget into balance.

Money spent on things like the National Endowment to the Arts, etc. could be shifted to things like breast cancer research, etc.

"Obama was elected not because of hope or change but circumstances. He had 5 times the money of his republican opponent, the media completely on his side, and John McCain as his opponent. Change any one of these 3 things and we would be looking at a different president."

#15 | POSTED BY BUZKILLER

No, he was elected because people wanted a RADICAL change from what W had been doing. He got all the money because A. citizens were sending it to him in record amounts because they wanted change so badly, and B. the financial elite saw the way the wind was blowing and realized they needed to buy him out since he was going to be the next president.

The republicans ran mccain because the knew they were going to lose anyways, so they give the old guy his due, and introduce sarah palin to the world for future races.

The media was on obamas side because they do what ever the financial elite want them to.

Change, change, change, change....everytime I see that mantra I think of Robert Rourke's book, "Something of Value," in which the main character told his friend who had turned Mau Mau to be sure that a change was for "something of value." Great advice for ANY change and surely applies today. I fear we are changing to something that will make us worse off.

Not if you go all Mau Mau on us.

OK, so Bush was a bigger fuckup and the "house of cards economy" built with home equity and credit card debt was bigger than we could even have imagined before. Not surprising.

#8 | Posted by AMERICANUNITY

your charge is hollow without at lease some mention of a democrat congress from 2006 to now

I'd have voted for ron paul if he had been on the republican ticket. what we need is REALISTIC leaders who are willing to be honest about the dark future we face and not paint rosy pictures to appeal to our warm fuzzy feelings.
#11 | POSTED BY SPEAKSOFTLY

The last honest presidential candidate was Barry Goldwater. And we all know what happened to him. What we need is realistic voters. Sadly, I don't see it happening.

"When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes... Money has no motherland; financiers are without patriotism and without decency; their sole object is gain."
Napoleon Bonaparte, 1815

Am I supposed to read all of this?

Wouldn't want you to get a headache, so I will summarize for you....

Obama bad.

'chat-show economists who have become so politicized that they ignore the truths of their own science in order to acquire celebrity.'

Paul Krugman!

'Am I supposed to read all of this?'

No. Keep drinking the kool aide and STFU.

BTW this was a good article and you should try to get through the whole thing.

The repub vs dem arguments are obsolete. we are so fucked that we need something entirely new.

#12 | Posted by SpeakSoftly

When the people lead, the leaders follow.

We need low tech common sense solutions from below. Big government is not going to save us this time around.

When the people lead, the leaders follow.

It is said that the art of politics is to look for crowds and watch which way they are moving, then get in front.

yes amnun,

but keep in mind that since Reagan, Bernanke, Friedman, Greenspan, Geithner, Paulson, Rubin, Summers have been working to unwind our prosperity for the sake of superprosperity for a few insiders, by busting Unions and offshoring manufacturing. A bubble economy has been built on compound interest and low taxes for rich inheritied wealth and when that wasn't fast enough fraud was added to the recipe....and when that didn't work out a bailout on the backs of working people.

Where did all that money go in RightisRIght ZERO_SUM_GAME? Wouldn't you like to know? Just think they did it all with bullshit, "freedom" and "free markets" were the intoxicating battle cry.

"Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if Labor had not first existed. Labor is superior to capital, and deserves much the higher consideration". ABRAHAM LINCOLN

"Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if Labor had not first existed. Labor is superior to capital, and deserves much the higher consideration". ABRAHAM LINCOLN

I admire and respect Lincoln, but he's wrong on this.

Capital is needed first - the business has to have initial funding before labor comes into play.

The last honest presidential candidate was Barry Goldwater. And we all know what happened to him. What we need is realistic voters. Sadly, I don't see it happening.

#20 | Posted by Ray

My parents were big Goldwater supporter -- I still remember the AuH20 bumper stickers.

With his views on abortion, I don't think we'll ever see another Goldwater get the GOP nomination.

He obviously has no fucking clue what he is talking about. As soon as he mentioned President Hillary Clinton leaving office I knew this guy was delusional

Existing-home sales including single-family, townhomes, condominiums and co-ops dropped 7.2 percent to a seasonally adjusted annual rate1 of 5.05 million units in January from a revised 5.44 million in December, but remain 11.5 percent above the 4.53 million-unit level in January 2009.

Total housing inventory at the end of January fell 0.5 percent to 3.27 million existing homes available for sale, which represents a 7.8-month supply at the current sales pace, up from a 7.2-month supply in December.

OK, so Bush was a bigger fuckup and the "house of cards economy" built with home equity and credit card debt was bigger than we could even have imagined before. Not surprising.

#8 | Posted by AMERICANUNITY at 2010-02-24 06:42 PM | Reply | Flag: Flag: (Choose)
FunnyNewsworthyOffensiveAbusiv
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No. This has been building up for a hundred years. America is now broke, drowning in debt.

#10 | Posted by Ray

Okay, AU, you get an E and flunk the course; Ray, you get an A and move to the head of the class.

It's called the Federal Reserve and it was created about one hundred years ago---it's all been downhill since even though it hasn't been felt until the now unravelling scene.

"Obama was elected not because of hope or change but circumstances. He had 5 times the money of his republican opponent, the media completely on his side, and John McCain as his opponent. Change any one of these 3 things and we would be looking at a different president."

#15 | POSTED BY BUZKILLER

Obama's win was the freak presidency of our times---all the stars aligned just so to allow the election of the most unqualified candidate imaginable. Anyway, does it really matter--he'll be controlled just like most of the weaklings elected (probably even more so).

Capital is needed first - the business has to have initial funding before labor comes into play.

Yes, but without labor the capital is worthless.

Labor and Capital are partners in the success of business. However when one party thinks that it can exist without the other, real problems will arise.

Labor and Capital are partners in the success of business. However when one party thinks that it can exist without the other, real problems will arise.

I agree completely. However, in the chicken vs the egg scenario, capital comes first.

Yes, but without labor the capital is worthless.

no question. just like the car and the gas you put in it.

but like gas, labor is a commodity.

With his views on abortion, I don't think we'll ever see another Goldwater get the GOP nomination.

#28 | Posted by katieberry

Isn't it sad that both sides of the fence worry more about abortion than they do about the ultimate survival of the US. Piss on the economy and a ballanced budget, lets argue about abortion and queers getting married.

Obama's win was the freak presidency of our times---all the stars aligned just so to allow the election of the most unqualified candidate imaginable. Anyway, does it really matter--he'll be controlled just like most of the weaklings elected (probably even more so).
#32 | POSTED BY MATSOP

It was no more than a beauty contest.

"When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes... Money has no motherland; financiers are without patriotism and without decency; their sole object is gain."
Napoleon Bonaparte, 1815

This so-called recession will last longer than the great depression. So, the GOP should be careful about getting back in power too soon as of right now the dems are taking the blame and eventually we can ride them like a new bride as the dems did with Herbert Hoover.

"Isn't it sad that both sides of the fence worry more about abortion than they do about the ultimate survival of the US. Piss on the economy and a ballanced budget, lets argue about abortion and queers getting married.

#36 | Posted by Sniper"

That's very funny coming from a fake "christian" and closet fudgepacker like you!!! It is you butt-draggers that are doing all the arguing!!! Get over it, fools.

Like it or not the only salvation that I can see for our country will be a mild form of Fascism. It will have to make extreme decisions for extreme problems. The good of the people and the good of the country will have to be primary. If this doesn't work its all over for this country.

capital comes first.

#34 | Posted by JeffJ

Wrong. It takes no capital to dig a rock out of the ground or to pick a berry off of a bush. That rock or berry is then sold for capital which continues the cycle.

"The repub vs dem arguments are obsolete. we are so fucked that we need something entirely new."

Awe c'mon. Just because they've pushing us into the gutter for decades doesn't mean it is idiotic to all of the sudden expect them to fix things..... Oh wait....

just like the car and the gas you put in it.

but like gas, labor is a commodity.

#35 | Posted by eberly

Proving my point, gas exists because of labor. The oil is already in the ground, it only becomes a commodity when labor digs it out of the ground.

There was a time in human history when there was no capital, just labor.

While the article makes a couple of reasonable points, the pubbie bias is too overwhelming for much of this author to be taken seriously.

DEPRESSION since Paulson lied in mid 2006.

bush. That rock or berry is then sold for capital which continues the cycle.

No. Unless your digging, picking, transporting, liscencing and selling are all conducted without any capital whatsoever, you are wrong.

As it is, you might be able to find a scenario to support your argument, but it's a scenario that is a true rarity.

Almost all businesses require start-up capital.

"There was a time in human history when there was no capital, just labor."

Well of course. The first farms weren't financed by venture capitalists. Capital is accumulated labor, nothing more.

There was a time in human history when there was no capital, just labor.

#44 | Posted by TFDNihilist at 2010-02-26 11:23 AM | Reply | Flag:

And libs like you and DUMMI would love to go back to living in caves and shitting in your own beds right?

Labor and Capital should be symbiotic. Sometimes Capital undervalues labor and sometimes (well very often) labor overvalues itself. A ditch digger is very easily replaced. Has nothing to do with the value of the human being doing the job - it has to do with the value of the work.

Now proceed to tell me ditch diggers should make a "living" wage of 40k per year and doctors should be restricted to make 80k per year - or some such nonsense.

The oil is already in the ground, it only becomes a commodity when labor digs it out of the ground.

and they did it for free?

or because they knew they would be paid?

"However when one party thinks that it can exist without the other, real problems will arise."

Just curious what happens when technology outpaces labor?

Well of course. The first farms weren't financed by venture capitalists. Capital is accumulated labor, nothing more.

#49 | Posted by nullifidian at 2010-02-26 11:28 AM | Reply | Flag:

The first farms used for business purposes? I would say not venture capitalists but capital investment by the owner of the farm was sure as hell present. You think they were all given land and farm equipment and had enough savings to live on until the farm became economically viable?

#49 | Posted by nullifidian

Try starting a business today without any form of capital.

It's possible, but VERY rare.

Just curious - what happens when technology outpaces labor?

Answer: the protectionists lobby the government to make advancements such as the plow and robotics illegal.

There was a time in human history when there was no capital, just labor.
#44 | POSTED BY TFDNIHILIST

The story of Robinson Crusoe illustrates. Stranded on an island with nothing, first he had to build up a surplus of food so he could eat while he made tools. Savings and production are interrelated. Capital is made up of land, labor, savings and tools of production.

Almost all businesses require start-up capital.
#47 | POSTED BY JEFFJ

That is generally true in a modern economy. The Federal Reserve system creates the illusion that money from debt comes from savings. Under this system, expanding GNP is actually a symptom of debt. It's a fraud.

#54 | Posted by JeffJ

Try getting capital without labor.

Well of course. The first farms weren't financed by venture capitalists. Capital is accumulated labor, nothing more.
#49 | Posted by nullifidian

This dodo is still mired in the Marxist theory of labor.

"Try starting a business today without any form of capital."

"Today" being the key word. You're missing the point. All that capital originally came from labor. The first mom-and-pop toga and sandal shop was created by personal labor. Period.

Labor came first and it remains true. You have to have a job, labor, before you can receive financing, capital.

All that capital originally came from labor. The first mom-and-pop toga and sandal shop was created by personal labor. Period.

Total chicken and egg as the supplies they needed to open that first shop required capital to purchase.

You have to have a job, labor, before you can receive financing, capital.

You have to have capital before you can afford to pay labor or have inventory. It is circular.

You think they were all given land and farm equipment ...
#53 | Posted by ELCIDCE90

Yes, in early civilization the land was just there and they made their own equipment from trees and rocks.

-------------

Now proceed to tell me ditch diggers should make a "living" wage of 40k per year and doctors should be restricted to make 80k per year - or some such nonsense.

#50 | Posted by ELCIDCE90

It'd be awfully hard for the doctors to practice with out the ditches being dug to carry their utility lines and sewer pipes.

The old saying is true: It takes money to make money.

#62 | Posted by kanrei

It is circular, but you can't gain capital, unless inherited, without labor.

#62 | Posted by kanrei

Your theory considers only the labor of a business, not the labor required to start a business. Back one step to the funding of said business.

No. Unless your digging, picking, transporting, liscencing and selling are all conducted without any capital whatsoever, you are wrong.
#47 | Posted by JeffJ

It doesn't require capital to do any of those things.

And the argument isn't about what is happening in the modern world, the argument is which came first, Capital or Labor. The answer is labor. In a hunter/gatherer society there is no capital, only labor.

"You have to have a job, labor, before you can receive financing, capital."

Unless of course you need capital for a machine which makes the labor obsolete. Good Twilight Zone episode by the way.

The first mom-and-pop toga and sandal shop was created by personal labor. Period.

Wrong.

One cannot produce togas and sandals without first possessign the raw materials for doing so - capital.

only the labor of a business, not the labor required to start a business.

Not true at all.

I said "You have to have capital before you can afford to pay labor or have inventory." No employeess no business. No inventory, no business. I am talking mostly about starting a business.

See my 61 Gav:

Total chicken and egg as the supplies they needed to open that first shop required capital to purchase.

#61 | Posted by kanrei at 2010-02-26 11:38 AM

#68 | Posted by crispee_oc

I didn't clarify as well as I should have. For me to get a loan, capital for a business, I have to currently have employment and income, read labor.

In a hunter/gatherer society there is no capital, only labor.

Humans lack the predatory abilities to capture, kill and process meat without capital. The collection of vegatables/fruits is entirely predicated upon their availability - capital.

#71 | Posted by kanrei

Where did the capital come from? They didn't get it free, they had to work for someone else, labor, or they inherited the money. Banks don't loan money to jobless, penniless people.

In a hunter/gatherer society there is no capital, only labor.

The hunting grounds and animals within are capital. What is hunted and gathered is the capital and, unless that was there first, no one would be hunting or gathering.

Banks don't loan money to jobless, penniless people.

You are picking a starting point and going from there. Where did the banks get their money? Labor. Where did the labor come from? Capital. It is 100% impossible to argue which is more vital as one cannot exist without the other and, to pick any place to start is to ignore what came before it.

Banks don't loan money to jobless, penniless people.

You are picking a starting point and going from there. Where did the banks get their money? Labor. Where did the labor come from? Capital. It is 100% impossible to argue which is more vital as one cannot exist without the other and, to pick any place to start is to ignore what came before it.

Sorry for the double. I only hit enter once. Weird.

"Where did the capital come from?"

On the Eight day, God created venture capitalists.

#78 | Posted by kanrei

Don't screw it up again! lol jk

I agree that they have to coexist. I just think that without labor all the capital in the world is useless. Labor gives purpose to capital.

One cannot produce togas and sandals without first possessign the raw materials for doing so - capital.

#69 | Posted by JeffJ

They most certainly could have traded labor to acquire those raw materials. Labor = capital.

At base level someone could clear rocks from land in trade for materials. The business of clearing rocks required no capital but labor.

"Sorry for the double. I only hit enter once. Weird."

That would be labor. lol

. I just think that without labor all the capital in the world is useless. Labor gives purpose to capital.

I agree, but without capital, the labor you have is slavery and then the labor becomes the capital.

Total chicken and egg as the supplies they needed to open that first shop required capital to purchase.

#61 | Posted by kanrei

You are right, you can't have one without the other. The difference is, who is taking the risk?

Labor came first and it remains true. You have to have a job, labor, before you can receive financing, capital.
#60 | POSTED BY GAVASTER

On those grounds, all one needs is an idea to get financing. Of course venture capitalists have to be convinced you can execute your idea.

For the first labor surplus, we would have to go back to prehistory with the development of agriculture from hunting and gathering tribes.

The difference is, who is taking the risk?

Both are.

The labor is risking that they will be paid for their labor and the capital is risking what they have to try and get more. Both sides have just as much to lose: Their source of livelihood.

"Total chicken and egg as the supplies they needed to open that first shop required capital to purchase."

No it's not. The capital they required was produced by their labor. There is human labor before there are farms, shops, etc. That's not a Marxist theory. That's human history.

It'd be awfully hard for the doctors to practice with out the ditches being dug to carry their utility lines and sewer pipes.

#63 | Posted by TFDNihilist at 2010-02-26 11:39 AM | Reply | Flag:

Who said they could? I said is was symbiotic. Labor usually over values itself. That was the point. But please proceed to tell me what a ditch digger should make and what a doctor should make - that is the crux of this discussion and all discussions concerning the "workers of the world unite" crowd and those that understand how business really works.

At base level someone could clear rocks from land in trade for materials. The business of clearing rocks required no capital but labor.

fine. good example BTW.

But none of this will elevate the significance of labor today. today, labor is a commodity and will be treated as such. And certainly, at times, labor gets screwed by that principle.

They most certainly could have traded labor to acquire those raw materials. Labor = capital.
At base level someone could clear rocks from land in trade for materials. The business of clearing rocks required no capital but labor.
#81 | POSTED BY WHATSLEFT

The crapola Marxist Theory of Labor again. Capital = land, labor, savings and tools of production.

That's human history.

#87 | Posted by nullifidian at 2010-02-26 11:54 AM | Reply | Flag: Wants to go back to the hunter/gatherer time.

This is a pointless discussion - you need capital TODAY - what the hell does it matter what happened thousands of years ago. 200 years ago we were using almost free labor in the cotton fields - want to go back null or should we continue forward with the capitalist system we have - well sort of capitalist.

#89 | Posted by eberly

Agreed. Wage slave is what I call it and I decided years ago I wouldn't be one. Not totally free yet, but I'm halfway there.

No it's not. The capital they required was produced by their labor. There is human labor before there are farms, shops, etc. That's not a Marxist theory. That's human history.
#87 | POSTED BY NULLIFIDIAN

That was at the beginning of civilization. We're past that time now.

The labor is risking that they will be paid for their labor and the capital is risking what they have to try and get more. Both sides have just as much to lose: Their source of livelihood.

#86 | Posted by kanrei

Now there is a stretch!!!!! Labor can quit anytime but the business does have a huge chunk of money burried in their facility that they never will get out when they fold.

"For the first labor surplus, we would have to go back to prehistory with the development of agriculture from hunting and gathering tribes. "

Exactly. And all subsequent capital is generated from those agricultural surpluses.

#95 | POSTED BY NULLIFIDIAN

Now we're past that one.

"That was at the beginning of civilization. We're past that time now."

That changes nothing. Wealth is created by labor operating on natural resources today as it was then. You have a $1000 to invest in the market? Where did you get it? Somebody give it to you? Fine. Where did he get it? Ultimately it always come back to human labor as the source.

Nulli

Just so we're clear. The Marxist Theory of Labor is obsolete.

Capital = land, labor, savings and tools of production. You're to obsessed with labor alone.

That was at the beginning of civilization. We're past that time now.

#93 | Posted by Ray

The world could return to it.

Some parts of the world are still there.

today, labor is a commodity and will be treated as such. And certainly, at times, labor gets screwed by that principle.

#89 | Posted by eberly

I agree.

jeffJ is wrong and Lincoln is correct.

There never was any Capital until something was made or taken to sell.

But the economic landscape is larger than that. There are four critical components: Labor, Capital, Resources and Technology (knowledge). Some countries have been sliding by just selling their resources. Others, like Japan, have no resources and instead have relied on well organized labor and technology to prosper. Since WWII, we have been relying on resources, labor arbitrage, our unique position as the worlds reserve currency, military force and fraud.

In some ways, labor did it to itself with collective bargaining. It did strengthen in power of the worker to make demands, but it also made the employer view it as a single entity rather than people.

Labor can quit anytime...
#94 | Posted by Sniper

Really? I suppose I could quit my job anytime, if I didn't want to pay my rent or feed my family.

There never was any Capital until something was made or taken to sell.

Bullshit. Land is capital. Ideas are capital. Hunting grounds was capital. Breathing room is capital. Without capital, there is nothing to labor for. Without labor, capital is worthless. Without capital, labor is worthless.

capital comes first.

#34 | Posted by JeffJ

Wrong. It takes no capital to dig a rock out of the ground or to pick a berry off of a bush. That rock or berry is then sold for capital which continues the cycle.

#41 | Posted by TFDNihilist

The laborer cannot dig a rock out of the ground or to pick a berry off a bush or drill for oil unless they OWN it first. The rock,berry,oil is Capital.

Without labor, capital is worthless. Without capital, labor is worthless.

#106 | Posted by kanrei

Exactly, so why is capital valued so much more in our society?

Stupid argument since, as Ray pointed in his dull idiotic way, LABOR is CAPITAL.

May as well argue about weather a square is a rectangle.

so why is capital valued so much more in our society?

Because capital can be owned. We had a war to stop labor from being owned =D

The laborer cannot dig a rock out of the ground or to pick a berry off a bush or drill for oil unless they OWN it first.
#107 | Posted by Petrous

Not true, in hunter/gatherer societies no one owned the land and the bushes. It just was.

I agree, there is a fine line between resources and capital, but technically, the resources have always been there and belong to no one.

So basically...
Capital=Labor + Resources

So labor came first.

Really? I suppose I could quit my job anytime, if I didn't want to pay my rent or feed my family.

#105 | Posted by TFDNihilist

Non-sequitur.

You could do so IF you possessed a skill-set that you could create demand for your abilities to the extent that you could give your current employer the finger and simultaneously match or improve your situation through another employer.

The grass is always greener and all that.

Their is no Capital until the land or tree or diamond is taken. Indians traded land for beads.

This real imbalance is Capital is overvalued because most of it is inherited by unproductive leaches and every compound interest rate has a doubling period.

Their is no Capital until the land or tree or diamond is taken.

Ownership IS capital.

One can not procure land, a tree or a diamond without first owning or purchasing it first.

"One can not procure land, a tree or a diamond without first owning or purchasing it first."

Purchase it with what? Capital? And where did those funds come from?

Exactly, so why is capital valued so much more in our society?
#108 | POSTED BY TFDNIHILIST

It's debt masquerading as capital. Our money supply is built from debt, not savings.

jeffj,

Ownership is an abstration defined by law, which varies from country to country. Law is abstraction in the extreme. Technology is also abstract.

Labor and Resources are real.

"Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if Labor had not first existed. Labor is superior to capital, and deserves much the higher consideration". ABRAHAM LINCOLN
I admire and respect Lincoln, but he's wrong on this.
Capital is needed first - the business has to have initial funding before labor comes into play.
#27 | POSTED BY JEFFJ

Its a chicken or the egg argument.

If you don't have labor, capital is not needed.

Dependant upon the business capital may not be a requirement at all.

Did the UAW and management overly exploit capital and destroy the auto industry?

this fucking moron in the white house hasn't a clue thanks dumb ass !

Land and gold are resources, paper money and Bank balance sheets are abstractions. That fact opens the door to fraud, white collar crime.

Capital, knowledge and organization is required to leverage labor with more technology and produce as much or more.

Jeff lives in the big city which creates his perspective. Earlier in our history we lived on labor alone, there was no Capital, and a farmer or hunter could still do so today, provided the Bank didn't foreclose first. Everywhere the Banks go they destroy freedom and Democracy. Jefferson undestood this as well as Lincoln and Sanders.

Everywhere the Banks go they destroy freedom and Democracy.

are you saying that we would be better off without financial institutions?

OK, so Bush was a bigger fuckup and the "house of cards economy" built with home equity and credit card debt was bigger than we could even have imagined before, and Obama has failed to detect and respond to that in such a way as to prevent further losses.

#8 | Posted by AMERICANUNITY at 2010-02-24 06:42 PM

OK, so Bush was a bigger fuckup and the "house of cards economy" built with home equity and credit card debt was bigger than we could even have imagined before. Not surprising.

#8 | Posted by AMERICANUNITY

Didn't you mean Barney Frank?

I guess this is what Bush gets for leaning too far to the left.

IBD likes to quote an economics firm because of their accuracy....and they are calling for a double dip. I HOPE NOT, but let's face it...it could happen.

eberly,

No, Capital is one element of a thriving economy.

Our country suspended Glass-Steagal and usury laws. Banks can change the terms of money they lend whenever they want. You have between 30-90 days to correct a Bank error, but the Banks have seven years. Many people believe that the fraud crimes of Goldman-Sachs are legal, but I don't. What we know is that institutional fraud is difficult to prove because you must prove intent and white collar criminals will plead stupidity.

Usury laws need to be restored, lack of them becomes another assault on poor people. Commercial and Investment Banking, needs to be separated. SEC rules must be enforced on Large Brokers who must not be able to staff those agencies. No proprietary computer code should be permitted to operate on stock exchanges or voting booths. Brookley Born needs to reign in a completely out of control derivatives market which is probably remains our greatest risk. The entire Wall Street approved staff at the Fed and Treasury that orchestrated stealing our money to cover Wall Street crimes needs to be fired. Prosecutions, however difficult, need to move forward. Only prison and disgorgement will stop the bleeding. They got Ken Lay (we think) and

.....Bernie Madoff, but unlike Madoff, they never recovered the money from Lay's family. Paulson wasin on the Goldman-Sachs Securities scams. These criminals need to be investigated and prosecuted. Selling AAA securities known to be junk is fraud. Monitoring trading with high speed computers and skimming pennies off stock prices thousands of times a day is no different than skimming the fractional cents off credit card transactions. That crime has been prosecuted and there is no reason brokerage houses should be exempt.

Labor? Capital? Labor? Capital?

The big point everyone is missing is this:

Republicans are fucking idiots.

and obama is a narcissistic sniveling little bitch. our first prissy president. " i dont knows nuthin bout gover'mint and i sures knows nuthin bout leadin's eyether"br />
he's in so far over his head its laughable. radical policies, rising anger. its only a matter of time.
look left, look right, look left, look right....priceless!

idiots doesn't really capture the truth

Bush & especially Cheney got what they wanted

no matter what happened to the country, they could give a shit