Theology and the Jobs Crisis

          Reports last week of Apple’s decision to invest one hundred million dollars to begin some manufacturing in the U. S. seems like a lot.  It's pocket change at Apple whose total sales last year topped 128 billion. This means the promised investment comes to something like .0018 of 1 percent.  The purpose looks more like public relations.  CEO Tim Cook, who set-up Apple’s Asian supply chain in the first place, told NBC that it’s not the skills people have in China but the education network that trains them.  “The education system stopped producing them [back here].”  Certainly a self-fulfilling prophecy if there ever was one since the community colleges in the USA cannot train people to do jobs that have been moved 3000 miles away.   

News reports begrudged this skimpy investment in U. S. manufacturing but still treated it affectionately: “One Small Step Home for Apple and One Giant Leap for Mac-kind” said the Financial Times headline.  The Apple tech inventions are of course dazzling, but their bright sun  blinds our capacity to see the whole picture.

For example, last Friday’s jobs report (on Pearl Harbor Day) from the Bureau of Labor Statistics was headlined as a decline in unemployment—all of 0.2 percent. The truth of the matter, as the BLS noted, is that the small decline was only because the labor force is shrinking under the weight of discouraged and part time workers. Dean Maki, chief United States economist at Barclays Capital remarked last Friday, that at the current pace of job creation, the unemployment rate would only gradually decline to 7.1 percent by December 2013. (as quoted in the FT)

While that’s a whole year from now, the NY Times on Friday was even more vividly realistic:

Factoring in people seeking work, as well as those who want jobs but have stopped looking and those forced to take part-time jobs because full-time employment was not available, the broad unemployment gauge dipped to 14.4 percent in November from 14.6 percent in October.    

Public attitudes, especially media attitudes toward the US unemployment problem have the same unrealism that was the order of the day in the Romney campaign.  If Romney’s brain trust simply could not make the connection from the all-white faces in their crowds to the reality of U. S. diversity, the analogy here is that we often don’t connect sagging standards of living under conditions of long term unemployment to a more dismal future now rapidly approaching.  

The problem is theological.  We are as beguiled by electronic wizardry as any ancient Greek crowd bowing before a giant statue of Athena or Canaanites praying at the altar for virgin sacrifice.

The Federal Reserve has now acted with some desperation (Wednesday, December 12th) to hold interest rates at zero until probably 2015 when they hope unemployment will have declined to 6.5 percent.   The theological trick lies in the beguilement provided by technological glitter, but there is always the devil to pay.

The same day media reports indicated that the nation has suffered the biggest trade deficit (meaning a decline in trade) in nearly four years. This devil is getting its due: weakening consumer demand, in spite of the recent Black Friday hullabaloo, make it clear that the big downturn many economists have predicted for next year may be near to happening. The jobless crisis simply comes to mean that consumers don’t have enough money to buy the gadgets, to say nothing of essentials like food and medicine.  

The trend is rapidly becoming gloomier. The recent hard fought electoral battle between conservatives who have and many others who have not may turn out to be only prologue when the New Year dawns, fiscal cliff or not.

Will  Faith Communities Respond to the Scandal of Inequality?

“The median income of Santa Clara County families [Silicon Valley] fell by 3.2 percent in inflation-adjusted dollars last year -- more than twice the national decline -- to its lowest point in more than 11 years, according to U.S. Census figures.”

“…census data confirm widening income inequality in Silicon Valley traceable to a decline in the well-being of poor and middle-class families.                                                                              

                                                                                   “Life In The Valley Economy—Saving the Middle Class   

                                                                                     Lessons from Silicon Valley 2012” 

                                                                                      Working Partnerships USA, October 2012

In 1919, following the end of the First World War, the renowned Sociologist Max Weber said in a lecture on Politics as a Profession that a nation-state’s power lies in its “capacity to lay claim to the monopoly of legitimate physical violence.”  

The new Steven Spielberg-Tony Kushner film, “Lincoln,” shows this profession at work, and makes it clear that during that era it was the power of the state, the government, that permitted inequality both racial and economic.

The operative idea here is legitimacy. “Lincoln” reminds us that in the struggle over slavery, the United States asserted its violent power to enforce and legitimate the enslavement of four million African-Americans.  As later history shows the U. S. then let this power be used to enforce and legitimate inaction after adoption of the Thirteenth Amendment. During that period the state either tolerated or enforced  a hundred year reign of terror over Black people, permitting wide-spread mob violence, the lynching of Black people for entertainment, the denial of their right to vote, and a rigid coast-to-coast but often unwritten code of racial segregation.     

Just so and very similarly, the state today tolerates, enforces and subsidizes the prevailing policies of an economy that continues to unevenly reward its workers, keeping millions bent over in stoop labor or at hard labor in labor intensive shipping warehouses while suffering a bottom tier pay scale that offers them little future.  

A N Y Times series running this week reviewed the history of tax abatements given by local governments in the U. S. that divert resources away from public needs while improving the bottom lines of corporations.  Local, regional and federal governments invest as much as $80 billion a year in subsidies to these corporations, thereby draining resources away from creating better schools, quality housing, and better health care for all citizens.

The Times identified 48 companies that have received more than $100 million in state grants just since 2007. Some 5,000 other companies received more than $1 million in recent years.

All of this rests on the same ideas that were rife in the age of Lincoln and present still today in public discourse:  the inherent righteousness of success, dominance and survival of the fittest, notions of genetic inferiority, rigid divisions of labor that condemn many groups, not only Latinos but many others, to backbreaking labor with little or no access to a viable future for their children. This was state policy and its state policy today. 

In the super-affluent Silicon Valley—a place thought by many people to be the new center of the universe—a report by the organized labor consortium, Working Partnerships, quoted in the text box above, documents the accelerating income decline of the middle and lower class communities in the Valley while life soars for the upper twenty percent.

The hardest bridge for faith communities is the crossing from the comfortable metaphorical riverside of intensely personal liturgies, a place where judgment is suspended and acts of contrition, thanksgiving, and redemption are celebrated----over to the other side of the river where judgment and risk-taking may be required; a place where people, their religious leaders and others accept vulnerability and the challenge of social reform as a vocation.

The truth of growing inequality may bring the global economic community to its knees one more time in 2013 because, for example, in the report cited in this blog last week from the  Pulling Apart

In California …

the incomes of the richest twenty percent of households were 9.5 times bigger than the incomes of the poorest households in the late 2000s; and

the incomes of the richest five percent of households were 16.2 times bigger than the incomes of the poorest fifth in that same period.

In New York…

the incomes of the richest twenty percent of households were 9.2 times bigger than the incomes of the poorest households in the late 2000s; and

the incomes of the richest five percent of households were 15.6 times bigger than the incomes of the poorest fifth in that same period.

In Iowa…

the incomes of the richest twenty percent of households were 5.6 times bigger than the incomes of the poorest households in the late 2000s; and

the incomes of the richest five percent of households were 8.7 times bigger than the incomes of the poorest fifth in that same period.

In Lincoln’s era many clergy and laity resisted such civic obscenities and put on the garments of radical abolitionists. Their choice of a vocation as “public intellectuals” is a rarity in our own age, and that is why the times are so dangerous:  public debate in our civil society is mostly severed from its roots in the “city set upon a hill.”  The faith community is mostly camped on the safe side of the river, where they can be soothed by the rites of private faith.

 So far, this means the dominance and control of a government ruled by the wealth of a few.   In the age of Lincoln there is a long list of familiar names of those who chose not to remain safe, but instead struggled to shape the power of the state to support justice:  the martyred Presbyterian clergyman and newspaper publisher, Elijah P. Lovejoy, Revivalist and college President (Oberlin) Charles Finney, the freedman Frederick Douglas, the feminist leaders Elizabeth Cady Stanton, and Susan B. Anthony. Many others joined in or were led: William Lloyd Garrison, Henry David Thoreau, Ralph Waldo Emerson, Herman Melville, William Ellery Channing, poet John Greenleaf Whittier, etc. The list goes on.

These all pushed and hounded Lincoln who partly for reasons of his own cautious temperament and because he, probably correctly, believed he could not be elected if he embraced the radical abolitionsts, did finally share their vision and achieve their ultimate dream: first the Emancipation Proclamation and two years later  the Thirteenth Amendment. 

Had it not been for the radical clergy of that era, had it not been for the radical clergy in both Black and White congregations during the Civil Rights era of Martin Luther King, Jr., had it not been for the likes of Bishop Tutu in South Africa ----had it not been for this multitude of voices the freedom movement of both centuries would not, could not, have occurred.

Are such leaders among us today in the churches, temples and synagogues? Will they cry out in their own time against the new and crippling scandal of growing inequality?  Time will tell.

Breaking the Gag Rule

President Obama’s important electoral victory grew from a younger generation of voters that is at once more diverse, but also profoundly at-risk.

            The new report released last week by the Washington-based think tanks, Center on Budget and Policy Priorities and Economic Policy Institute, documents their predicament.  If they were part of the middle fifth of U. S. households, their incomes grew only 1.2 percent in the past fifteen years (after adjusting for inflation). Of course many in the Obama majority are only honorary members of that middle class with virtually no income gains for decades. The report, entitled Pulling Apart, finds that

Nationally, over the last thirty years the richest fifth of households enjoyed larger average income gains in dollar terms each year ($2,550, after adjusting for inflation) than the poorest fifth experienced during the entire three decades ($1,330).    

This means that much of the “hope” they created in electing President Obama for a second term is now living on fumes.

             The picture of gross injustice for these moderate income families is beyond scandalous. Pulling Apart examined the eleven largest states in the nation and found that   

the average income of the top 5 percent rose between the late 1970s and mid-2000s by more than $100,000….By contrast, the largest increase in average income for the bottom fifth of households in these states was only $5,620.  In New York...average incomes grew by $194,000 among the top 5 percent of households but by less than $250 among the bottom fifth of households.

In these 11 large states, the incomes of the top 5 percent of households increased by 85 percent to 162 percent between the late 1970s and mid-2000s. By contrast, incomes of the bottom fifth of households didn’t grow by more than 27 percent in any of these states, and in one state —Michigan – they actually fell.

These morally outrageous social policies have destroyed the prospects of whole generations of middle and lower income families, placing the deepening crisis of income inequality on the same burner where slavery, early 20^th century industrial tyranny, and racial segregation were confronted by civil war, Social Gospel reformers such as Walter Rauschenbusch and the Martin Luther King, Jr. voting rights movements.

This also helps explain why, at a  recent lecture in San Jose by the renowned biblical scholar, Walter Bruggeman, a young pastor rose to ask about the contemporary consequences of the biblical texts about prophetic justice Bruggeman had been discussing. She put her question sharply: 

            “So, does this mean,” she asked, “that we will have to be shot?”  Her question tests who will answer the call to a heightened level of non violent protest in both the churches and among the Obama followers.

Vividly aware of the need to resist the outrageous inequities now set in concrete in the daily lives of most citizens, the questioning pastor at the Bruggeman lecture appeared to realize that confronting growing inequality in the United States will require overcoming the gag rule in both the quietest middle class and in the churches where disturbing the peace can mean the end of pastoral careers.

This recalls John Quincy Adams, who as a member of the House of Representatives following his brief presidency offered a resolution every year for sixteen years to abolish the notorious Gag Rule that prevented any anti-slavery petition from being brought forward until, finally, he succeeded and new sentiments accumulated that would lead to emancipation.

The Obama majority does not have sixteen years. The question is whether their great electoral victory will strengthen them to break the cultural gag rule that expects people to accept their place in an increasingly stratified society. Will Obama’s majority risk public disapproval and organize non-violent movements to resist growing inequality? Will the churches tell them why it’s meet and right so to do?

 

First Perils: The Temporary Majority

       Scanning the crowd as President Obama spoke late in the evening following his election victory the TV cameras showed  faces of a joyful audience dramatically younger and more diverse than the Romney crowds visible during the election campaign.   

       Recent data from the Pew Research Center tells us that this younger audience is also more distant than their parents from traditional institutions of American life such as the churches. Only 40 percent of these younger adults believe religion is very important compared to 75 percent in their grandparent generations. Twenty-six percent of the younger adult faces at the Obama victory rally will have no religious affiliation.  Fewer than 18 percent will attend church even once a month. That trend is growing:

Fully one-in-four adults under age 30 (25%) are unaffiliated, describing their religion as "atheist," "agnostic" or "nothing in particular." This compares with less than one-fifth of people in their 30s (19%).    

      So it is not only the Republicans toward whom growing numbers of younger generation adults have become disaffected, it is also the churches and the trend is growing!  The Pew studies:

Less than half of adults under age 30 say that religion is very important in their lives (45%), compared with roughly six-in-ten adults 30 and older (54% among those ages 30-49, 59% among those ages 50-64 and 69% among those ages 65 and older). By this measure, young people exhibit lower levels of religious intensity than their elders do today, and this holds true within a variety of religious groups.

      There are several serious questions here. What does it mean for the churches? What does it mean for President Obama? Quickly put, for the churches it means the graying of congregations, already obvious on Sunday mornings and it means many of the brightest and best young voices have left the churches in recent years if they were ever there at all.

      The meaning for the President is connected to this declining faith paradigm. Are President Obama's appeals in a language of  hope connected to anything more than his personal perspective? The President  came very close to losing these faces in the tragedy of the Great Recession and he could lose them in the not-distant future if there is no concrete relief. Where is this hope? Many people in any random crowd these days have suffered joblessness. Many remain on the streets today unemployed. Many others have had their jobs shifted off-shore and have lost their first homes. Even hi tech workers often find themselves suddenly obsolete. 

      No moral paradigm has been invoked to prevent this or slow it appreciably. Apple last month launched several new I-gadgets, selling them by the millions while hiring Chinese workers by the tens of thousands to assemble them. It has passed before the public eye with hardly a complaint. Apple hired very few assembly workers in American cities to build their stock value because--as its supporters are fond of putting it--"It's not a moral issue." 

       Inequality of opportunity and the grounds for hope are growing worse. The rich really are getting richer. The president's supporters are living mostly on the fumes of hope. If proposals for jobs and the economy do not become more concrete, if they fail to find support among both Republicans and Democrats, the election victory will pale very quickly as it did in 2008 when all of us were first faced with the Great Recession.

        The back story buried behind the new faces is another matter and, leadership aside for the moment, is a more serious question: What does the disaffection from Christian tradition mean for a country whose moral framework was largely built by it?  What intellectual roots and spiritual streams of nurture--broadly stated--can now feed visions of peaceable kingdoms in today’s culture?  What language can be spoken by faith communities that the new generation of leaders can understand? We’ll discuss this question in coming blogs, very soon.

Apple’s New Iphone Produces a New Economic Authoritarianism

          The historic Christian ambition that people should share the world’s goods as a reflection of the just purposes of God is mocked by the rapid growing global inequality.  Global labor markets exploded in sharp relief this week beginning with a very large scale riot that broke out September 23rd in Taiyuan. It sent forty people to hospitals from a giant factory where parts of Apple’s new iPhone 5 are being assembled.  Only lightly reported by U. S. media, international papers like the Financial Times of London, the Singapore Times, and the Chinese blog, MIC Gadget, reveal a picture of profound upheaval and pathos.

     

           A battle inside a huge Foxconn factory started when floor managers bullied some workers roughly and their regional countrymen responded by overwhelming the managers.  “…One of China’s worst incidents of labour unrest in years” reported the Financial Times this week.

…the plant which employs 80,000 people proved far too big to bring under control….’every inch of ground was covered with people, a black mass of bodies….when the police arrived…they could just stand there and watch.’

You can read about and see photos and video footage of the rioting by going to the blog MIC Gadget at http://micgadget.com/29723/the-undercover-report-on-how-the-new-iphone-5-is-made-inside-foxconn-factory/ 

If you follow the “Commentary” section near the end of the blog you can read Chinese worker’s mixed views of their own ironic and completely authoritarian factory system.

 “…critics, you must consider the fact that "sweatshop" factory wages are enticingly high for a significant population of people in many countries. We are talking: "Mom, I'll work the farm while you wait in line at Foxconn so we don't have to sell daughter #2 for food money." How about we direct our outrage at the global human condition that allows such work conditions to be an improvement?

Growing inequality is implicit in the comparative magnitude of these events and was given further documentation when violent resistance to new austerity measures broke out again this week in Greece and Spain.  

The Taiyuan riot reveals a picture of vivid disproportion. In the Silicon Valley, where Apple and many other computer giants are located, the San Jose Mercury News had celebrated 1,900 new jobs added in August; while in China hundreds of thousands of workers were building the new cell phones invented in Cupertino. In the area around that Apple epicenter unemployment today stands at 77,500. Meanwhile, In Zhengzhou 100,000 new workers were being added to an already existing factory of 150,000 workers—all busy assembling the new Apple phone and products like those coming from Samsung and Verizon.  The starting monthly income at the Taiyuan Foxconn plant assembling Apple products is $283.

This is a theater of the morally absurd.  It is also a drama in which American workers earn less. The diverse publics gobbling up the new iPhone that make Apple richer by the minute seem immune to the implications of this global upheaval revolving around a continued decline in worker economics.   With Apple’s net worth reportedly approaching $1 Trillion, new U. S. Census data just released shows the widening inequality gap in Silicon Valley.  Family median income has fallen 22 percent since 2000 and 3.2 percent in 2011. Home ownership rates are down to 46.7 percent in the richest valley in America.

As authoritative market regimes generated by the likes of Apple lead to rising global inequality, the photos below show a striking resemblance between the conditions of worker’s lives in Taiyuan and the growing prison populations in the United State. As U. S. unemployment becomes permanent for millions of people (compare nearly 2 million unemployed in California with a total of only 12,000 jobs created last month) one can sense that a growing danger: that a global worker underclass will live sometimes in prisons born of their desperation, and sometimes dormitories built in hell.

A Taiyuan Worker' dormitory room 

A U. S. Women's prison cell

Taiyuan Dormitory Window View

The Twenty Percent Solution: a New Citizen Project

     Want to create a manufacturing renaissance in your city or region?  Bring back just 20 percent of the 1.2 million jobs exported to Asia by the Apples, Hewlitt-Packards and Intels and you will have potentially 240,000 new jobs for the U. S. which is now in the grips of its fourth year of 15 percent unemployment (counting discouraged and involuntarily part time workers).

     Allocate those returned jobs among your five favorite urban areas with official high and outrageous unemployment—let’s say Elizabeth, NJ (12.5), Newark, NJ (14.6) , La/Long Beach CA (12/2), Philadelphia (10.1) and Atlanta (11). That would give each area 48,000 jobs!  

     Add to those jobs the new ones supplier businesses would develop. Then add a refreshed network of community colleges like the Austin Polytechnic institute in Chicago where a Manufacturing Renaissance Council is linking young trainees to that cities skilled jobs requirements. 

     Too fanciful?  Not so, as in Smyrna, Tennessee where Nissan has built an automobile manufacturing colossus: As reported in the New York Times last Sunday (8/5/12) 

“The dairy farms that once draped the countryside here were paved over so the Japanese carmaker Nissan could build its first American assembly plant. Eighty miles to the south, another green pasture was replaced by a Nissan engine factory, and across Tennessee about 100 Nissan suppliers dot the landscape, making steel in Murfreesboro, air conditioning units in Lewisburg, transmission parts in Portland.”

     Tennessee now counts 60,000 auto-related jobs in the state.  In this dramatic story the Times reports on a manufacturing transformation of the very kind Silicon Valley leaders claim can’t be done. They have wagered all future bets on technological innovation and the magic word, entrepreneurship. Tens of thousands of low income Latino and Asian people mow their lawns and clean their homes, but given the tech industry's export of hundreds of thousands of jobs they are workers and families without a future and no access to one. Notes the Times:

Companies like Apple, Dell and Hewlett-Packard, which rely on huge Asian factories, assert that many types of manufacturing would be too costly and inefficient in America. Only overseas, they have said, can they find an abundance of educated midlevel engineers, low-wage workers and at-the-ready suppliers.

These same assumptions were made when Nissan first decided to contend with the realities of the workforce in Tennessee. But a combination of tax incentives, training strategies and congressional pressure supported the huge transition of a rural agricultural region into a manufacturing area whose people now have real futures for themselves and their children. “If Apple or Congress wanted to make the valuable parts of the iPhone in America, it wouldn’t be hard,” said Clyde V. Prestowitz Jr., a senior trade official in the Reagan administration who helped negotiate with Japan in the 1980s.”

The government could also encourage domestic production of technologies, including display manufacturing and advanced semiconductor fabrication, that would nurture new industries. “Instead, we let those jobs go to Asia, and then the supply chains follow, and then R&D follows, and soon it makes sense to build everything overseas.”

Under current political conditions only citizen outcry can give Silicon Valley a new sense of what could be accomplished for the common good, not for entrepreneurs, but for the people cleaning their bathrooms.

*****************

To read the full report in the NY Times go to http://www.nytimes.com/2012/08/05/business/the-ieconomy-nissans-move-to-us-offers-lessons-for-tech-industry.html?_r=1&pagewanted=all

The Presbyterians Foretell Obama At-Risk

The narrow defeat of divestment last week at the Presbyterian General Assembly by a 333 to 331 vote was as close as the Romney/Obama contest may be this fall, a comparison that deserves careful study. The divisions down the middle in the churches over the Middle East point to parallel fault lines in the whole nation cemented not by belief systems but by class and culture. A reenactment similar to the razor-thin presidential vote in Florida in 2000 is not impossible, but the national scene is more dire now. 

Today the nation is gripped by both large-scale and long-term unemployment. There is a growing painful inequality with millions of people on the verge of losing their homes. The national instability is an obvious invitation to opportunistic Pied Pipers.

Reasonable analytic approaches are not always good predictors of possible outcomes these days.  Eight years of Presbyterian committee study and interfaith dialogue, hundreds of trips to the Middle East, divestment conferences all over the U.  S.—none of these anticipated the solid 50 percent plus who refused to support divestment.  The complicity of Caterpillar, Motorola Solutions, and Hewlett-Packard in the destructive and often lethal Israeli occupation of the Palestinian lands did not out-weigh other considerations.  While corporate-connected business persons in the churches often have a chronic antipathy for economic boycotts, another reason grows from the tension of peoples’ positions in the spectrum of community respectability.  Pastors in many denominations consistently display their dependence on the good will of local respected religious and community leaders outside their congregations.  The circle of peer pressure can be extreme. Congregants care about how their pastors are viewed and a mayor or local rabbi can change where that wind blows.

The Israeli government seems to know this very well. Ignoring a shower of concern from religious and secular groups in England, Europe and the U. S. objecting to Israel’s Occupation and Settlement construction in the West Bank, today’s headlines (July 10^th) report that Israeli jurists have declared that scores of Israeli settlements in the Palestinian West Bank are legal. (see NY Times 7/10). 


Parallels with the coming Fall elections are real.  Even though President Obama is highly respected by liberals as a gifted and intellectually able president, he was nevertheless humiliated last Winter by a global oligarchy that pushed him to his knees—forcing him to take a hard-toned war posture toward Iran and suffer Israeli Prime Minister Netanyahu addressing a joint session of Congress. 

This is an evil omen, and it’s not just about Israel. It’s about the undertow of new forms of power that can grow rapidly in the soil of economic hard times.

New oligarchs—an alliance among private sector oil monarchies, military contractors, Wall Street investors and fearful congresspersons—put the President in that position. It was striking that the Jewish community was highly represented at the Presbyterian Assembly, but Islam, the faith of the Arab peoples, the second largest religious tradition in the world was totally absent. The truth is that in many Western minds Islam is understood to be an inferior faith held by an inferior people. 

In this context the imminent danger is that while the traditional white population in the U. S. is soon to be out-numbered, before that happens an election victory for the powerfully organized affluent classes can easily change the rules. This has already begun in the Supreme Court’s Citizens United decision, and in its decision to bar the potential use of the commerce clause in badly needed legislation.  Taken a few more steps, with a few more rulings, and the undertow of a new and conservative majority can change democracy into a permanent oligarchy and demography into a new kind of cultural apartheid system.

Several object lessons applicable to the nation as a whole can be drawn from the defeat of the Presbyterian motion for divestment:  Faith communities easily persuade themselves that their role is to “stay out of it”, to be neutral, to stand in the middle. Implausibly, they imagine themselves walking in the footsteps of Jesus, the notorious challenger to authority. “God talk,” whether manipulatively intended or innocently practiced easily replaces the moral issues at stake. Giving balance to both sides has a pious ring however inauthentic it may be. That’s why the practices of manipulation and disinformation are genuinely evil and must be exposed wherever they appear.    

Last week’s news adds up to much more than the Israeli Occupation. It’s more about the cement of cultural solidarity, racial/class superiority and religious exceptionalism that puts President Obama and the rest of us at-risk. The sub-texts of this larger cultural context are the unindicted bankers who profited from mortgage swaps that ruined the lives of millions of citizens. Today, even now apparently, bankers may yet be indicted for manipulating trillions of dollars in interest rate manipulation. Or they may not, because the regulators seem to work for the bankers.

Our own risk is that we will discover too late that our options have been poured into cement buckets, Mafia-style, and the election we thought we had nailed is lost.    

[Full disclosure. The writer is a Presbyterian and attended part of the General Assemby last week.]

May 16, 2012

Hallucinatory Grandeur

      The primary victim amid this week’s cascading bad economic news is not the economy but people’s faith in it.   The latest plunge by large banking houses into high risk ventures that turn calamitous seems to signal that much more is amiss than we realize.  Faith in the “market” has been badly undermined by the debacle at J. P. Morgan, where the extent of loss may rise to $4 billion according to the Financial Times.  Last Fall it was MS Global, this Spring featured Goodman Sachs misadventures, and this week it’s the best of the best (President Obama said so), J. P. Morgan, financier to the world.   

      The worldwide news about money is generally bad. Growth Indicators in China have turned strongly south. Eastern Europe is now officially in recession. Moody’s lowered twenty-six Italian banks’ credit ratings this week. Unemployment in the U. S. is now not expected to decline significantly for the rest of 2012.

      Put in another language, that’s 13 million of our friends and neighbors.  This coming Saturday 400,000 of them will be dropped from unemployment benefits.  They’ve been out too long.

A sinking feeling has spread from coast to coast and while it is clear that the people get it—they see what’s happening—but many national leaders remain true to the phantom of American exceptionalism.

   

      Last week columnist Tom Friedman told a California audience:  “I don’t want the U.  S. to be where the first moon shot took place, I want California and the U. S. to be where the greatest tech minds come from all over the world to do their own moon shoot.  When that happens, there will be plenty of jobs for the butcher, the baker and the candlestick maker.”  

      That same day California’s budget deficit reported a new high of $15.5 billion—threatening entire education, health and environmental systems. Friedman’s visions of grandeur express the popular American cultural faith that drives the nation. One wonders, however, if it’s not made of the same stuff as J. P. Morgan’s faith in “complex synthetic positions using credit default swaps.”

      If it is, and it probably is, pastors and other faith community leaders need all the more to avoid passing out weekly nostrums similar to Mr. Friedman’s grandiose visions, and switch to the hard lessons told and re-told in biblical literature. The teaching there is not about American exceptionalism, but about creating just relations among the whole human family. There is plenty of evidence that that’s exactly what people seek as the pain they endure grows.    

JOBS: THE DISCONNECT

Last Friday’s job report (May 3, 1012) raised serious doubt about whether or if current strategies to put people back to work make sense. Wall Street baron, Mohamed El-Erian, CEO of PIMCO, a global investment management firm with approximately $1.77 trillion of assets under management wrote the next day in the Financial Times

“Friday’s jobs data sounds a warning that should be heard well beyond economists and market watchers.  With just 115,000 new jobs in April, the U. S. economy is not creating enough employment to make a dent in the 12.5 jobless Americans in the labour force, of which a stunning 5.1 million are long term unemployed. Moreover, the disappointing monthly number managed to fall short of analysts’ massively subdued expectation of 160,000, highlights yet again the unusual sluggishness of the labour market.”

Catherine Rampell, editor of the Economix blog At the New York Times pointed out that same day:

"the share of working-age Americans who are in the labor force, meaning they are either working or actively looking for a job, is now at its lowest level since 1981 — when far fewer women were doing paid work. The share of men taking part in the labor force fell in April to 70 percent, the lowest figure since the Labor Department began collecting these data in 1948."

The jackpot question is the disconnect between the predicament of  millions of jobless people and the answers being given—often with fanatical enthusiasm—by civic and political leaders across the country.  In Silicon Valley more than one hundred thousand are unemployed in spite of its booming tech sector.  The California Summit later this week is pushing for “smart regulation, a smart workforce, smart innovation and smart capital.”  The local NOVA Manpower agency calls its strategy “Economic and Workforce Implications in the Age of Ipads, Android Apps and the Social Web.”  The focus is on up-grading the skills of the already up-graded.  

And the one hundred thousand?  The other 3 million in California? The other nine million around the country?   In light of the new jobless data the plain fact is that without manufacturing there is nothing for fat too many people.  Creating tech assembly plants in Cleveland, Newark, Detroit, Youngstown and Silicon Valley could generate tens of thousands of jobs.  The target should be to bring 20 percent of the jobs off-shored to China back to their own country of origin, the USA.   

The Wall Street driven optimism about the next technological fix is blotting many working people out of the picture.  Commentator Edward Luce describes the Silicon Valley mania in a nut shell.  Vince Khosla—who founded Sun Microsystems—sees the Silicon Valley as the story of the world as a series of disruptive technologies that were dreamed up by the bold and brainy. “The future is not set. It belongs to those with the bravest  imagination.”  [in Time to Start Thinking, Atlantic Monthly Press, 2012]

We’ve been on this asteroid before.  Back in the 1980s when  U.S. Central  banks saw larger profits could be had in Japanese, Korean and Brazilian steel-making, they pulled their investments from the great manufacturing centers in the Midwest and West and turned them into a rust belt.  Unemployed workers were told to get training and prepare themselves to work in the new service economy (where the pay was usually below a Living Wage.)  It never happened.

 U. S. companies willingly went along with this new plan for “financializing” profits instead of manufacturing products. Silicon Valley has outsourced at least 1.2 million of those kinds of jobs to China and other Asian locales.

The same dynamic is in play again. It is very clear now that high unemployment appears both chronic and permanent, and the solutions proffered are to upgrade the skills of the already upgraded.  

Paul Krugman:

   

“Consider, if you will, the current state of our nation. Despite hints of economic progress, we’re still in the midst of an immense disaster, in which unemployment and underemployment are devastating millions of American lives. And none of this need be happening! There has been no plague of locusts; we have not lost our technological know-how. Americans should be richer, not poorer, than they were five years ago. Yet economic policy across the board has become almost passive, has essentially accepted this disaster instead of trying to end it.”  [New York Times, April 29, 2012]

As this blog has noted before, we’re following a real theology here. This permanent downturn for the American people is rationalized as a function of God’s natural law!  It's the Divine Will that you should be out of work!

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LONGING AND DESIRE IN PYRAMID LAND: THE QUESTION OF DEMOCRACY AND THE FAITH COMMUNITIES

 Slave labor is supposed to have built the giant pyramids of Egypt, like those at Giza, more than 4,500 years ago.  But was it really slavery under the oppressor’s lash or was it the connection the men and women hauling the giant stones made to their own place in the scheme of salvation?  Everything pointed them to an ironic hope in this giant sarcophagus they were building:  a place where a dead Pharaoh would go, somewhere up the river Styx, and maybe somehow bring them along?  The people’s only proof was in the giant building, the tallest thing ever built in the world.

 Modern slavish devotion to symbols of power suggests similarity. The recession recovery news is not just gloomy but dangerous. The first quarter economic uptick has turned abruptly south. March unemployment increased across most of the country. European austerity programs are suddenly collapsing and the regimes that designed them are losing elections across the continent.  In the U,. S. the data projections show that even under the best of circumstances unemployment will not fall below 9 percent until after 2016.  In California it will be after 2018. [see graphs below]

There are four persons standing in line for every available job. That’s why surviving veterans of many tours of duty in Iraq and Afghanistan are returning home to find themselves without jobs.  Pyramid theologies will not do for this predicament now turning for the worse after three years of recession.

As bond interest rates rise large segments of global society from Greece to Bank of America may quickly become unable to afford any more borrowing.  Comparisons are being drawn between the economic disarray in the Weimar Republic of the 1920s and the rise of the Nazis.  The idea of market sovereignty, historian Eric Hobsbaum observes, “is not a compliment to liberal democracy but an alternative.” It represents “a sharp decline in ‘that divinity that doth hedge not only Shakespear’s kings,’ but the public symbols of national cohesion, a fading chance for citizen loyalty to legitimate government.”

As both President Obama and the Republicans head into elections against the winds of this prolonged unemployment and sharp  public disillusionment, there are several critical questions for faith communities to take seriously. The first is their own reluctance to embrace the role of judgment; the role of critical citizenship. Prayers in faith communities these days often end with the reassurance that somehow the grace of God extends as generously to the unjust as to the just. So what we do doesn’t matter that much, right?  This kind of sentiment seems to have crept up on faith communities along with institutional anxiety about their own future.  Of course, we might ask why faith communities should have a future in current discourse if they have abandoned the moral imperative of critical judgment?

There are therefore several things to watch for.  There is confusion about whether democracy is a process of civic engagement or a competition for domination and control.   Civic and faith communities can be and should be places of discernment where  alternative ideas are weighed about just and fair social and economic policy proposals. The danger of the Weimar years was growing public despair (they too had no jobs along with worthless money ruined by the domination of the powerful nations). This growing despair deepens if democratic practice is perceived as ceremonial; if it is thought that someone else beyond democratic reach is pulling the actual levers of power.

Major protest efforts and large scale mobilizations are planned for this spring and summer. We will see them on the Left and the Right.  Non-participation in a critical examination of the issues behind these mobilizations should not be an option.  There is a deep longing for a civic faith that does not worship pyramids.  Democratic practice must be thought of as a process of discernment among neighbors.

Passover, Death, Resurrection

      Speaking of Passover Death and Resurrection—last week’s Supreme Court hearings on the Health Care Law passed by a democratically elected Congress bring to memory the teaching of theologian Paul Tillich, famous for speaking about the rise of Adolph Hitler.

      The problem in that tragic era was the failure to recognize the demonic potential in every human proposal. For example, the glorious national future that lay just ahead, promised by both Nazism and Stalinism; a marvelously simple vision intended to destroy many old enemies (Jews, Socialists, etc.) and fulfill dreams. It’s truly monstrous new direction remained invisible to many followers as well as observers until it was too late. Tillich, not one of those, saw the human condition “in terms of disruption, conflict, self-destruction, meaninglessness, and despair in all realms of life.”

    

       He taught that real grace, true revelation and newness of life could only be found through building a new and just creation for all humankind. He had many students, including Martin Luther King, Jr.

     This all seemed especially applicable at last week’s Supreme Court hearing where twenty-six Republican states brought suit to declare the Patient Protection and Affordable Care Act unconstitutional.  Paul Clement, their attorney, argued to everyone’s exhaustion that the law was dangerously coercive; its individual mandate a violation of the voluntarism and individual liberty at the heart of the Constitution.

     The self-interest of the huge private sector health care industry was actually what was at stake.   The pious advocacy for the constitution gave a patina of social concern for a common good that was seldom mentioned by Mr. Clement. The idea of a demonic that rises up in human affairs is here perfectly illustrated: 

   

JUSTICE KAGAN:   “Mr. Clement… why is a big gift from the Federal government a matter of coercion? …the Federal government is…giving you a boatload of money. There are no matching funds requirements, there are no extraneous conditions attached to it, it's just a boatload of Federal money for you to take and spend on poor people's healthcare. It doesn't sound coercive to me, I have to tell you.

MR. CLEMENT: Well, Justice Kagan, let me —I mean, I eventually want to make a point where even if you had a stand alone program that just gave 100 percent, again 100 percent boatload, nothing but boat load — well, there would still be a problem.

JUSTICE KAGAN: ….just a stand alone program, a boatload of money, no extraneous conditions, no matching funds, is coercive?

MR. CLEMENT: It is…. And the very big condition is that the States in order to get that new money, they would have to agree not only to the new conditions but the government here is — the Congress is leveraging their entire prior participation in the program….

JUSTICE KAGAN: But, Mr. Clement — Mr. Clement, how can that possibly be. When a taxpayer pays taxes to the Federal government, the person is acting as a citizen of the United States. When a taxpayer pays taxes to New York, a person is acting as a citizen of New York. And New York could no more tell the Federal government what to do with the Federal government's money than the Federal government can tell New York what to do with the moneys that New York is collecting.

MR. CLEMENT: Right…. But we all know that in the real world…the Federal government continues to increase taxes that decreases the ability of the States to tax their own citizenry and it's a real tradeoff….

JUSTICE SOTOMAYOR: Are you suggesting that at a certain point the States would have a claim against the Federal government raising their taxes because somehow the States will feel coerced to lower their tax rate?

MR. CLEMENT: No, Justice Sotomayor, I'm not. What I'm suggesting is that it's not simply the case that you can say, well, it's free money, so we don't even have to ask whether the program's coercive.

JUSTICE SOTOMAYOR: Now, counsel, [at] what percentage does it become coercive? Meaning, as I look at the figures…there are some states for whom the percentage of Medicaid funding to their budget is close to 40 percent, but there are others that are less than 10 percent.

....And you say, across the board this is coercive because no state, even at 10 percent, can give it up. What's the percentage of big gift that the federal government can give? Because what you're saying to me is, for a bankrupt state, there's no gift the federal government could give them ever, because it can only give them money without conditions….No matter how poorly the state is run, no matter how much the federal government doesn't want to subsidize abortions or doesn't want to subsidize some other state obligation, the federal government can't give them 100 percent of their needs.

MR. CLEMENT: [in his closing summary] It's really hard to understand tying the preexisting participation in the program as anything other than coercive. The Solicitor General makes a lot of the fact that there are optional benefits under this program. Well, guess what? After the Medicaid expansion there will be a lot less opportunity for the States to exercise those options, because one of the things that the expansion does — precisely because the expansion is designed to convert Medicaid into a program that satisfies the requirement of the minimum essential cover of the individual mandate, things that used to be voluntary will no longer be voluntary….

JUSTICE GINSBURG: Mr. Clement, may I ask one question about the bottom line in this case? It sounds to me like everything you said would be to the effect of, if Congress continued to do things on a voluntary basis, so we are getting these new eligibles, and say States, you can have it or not, you can preserve the program as it existed before, you can opt into this.

But you are not asking the Court as relief to say, well, that's how we cure the constitutional infirmity; we say this has to be on a voluntary basis. Instead, you are arguing that this whole Medicaid addition, that the whole expansion has to be nullified; and moreover, the entire health care act. Instead of having the easy repair, you say that if we accept your position, everything falls.

MR. CLEMENT: Well, Justice Ginsburg, if we can start with the common ground that there is a need for repair because there is a coercion doctrine and this statute is coercion, then we are into the question of remedy. And we do think, we do take the position that you describe in the remedy, but we would be certainly happy if we got something here, and we got a recognition that the coercion doctrine exists; this is coercive; and we get the remedy that you suggest in the alternative.

     Theologian Paul Tillich’s students began to realize decades ago that “to caste out demons you had to call them by name.”