{"id":294,"date":"2011-05-08T09:57:53","date_gmt":"2011-05-08T09:57:53","guid":{"rendered":"http:\/\/global-labour.info\/en\/2011\/05\/08\/the-great-moderation-by-noam-chomsky-2011\/"},"modified":"2011-05-08T09:57:53","modified_gmt":"2011-05-08T09:57:53","slug":"the-great-moderation-by-noam-chomsky-2011","status":"publish","type":"post","link":"https:\/\/global-labour.info\/en\/2011\/05\/08\/the-great-moderation-by-noam-chomsky-2011\/","title":{"rendered":"The “Great Moderation” – by Noam Chomsky (2011)"},"content":{"rendered":"


\nThe \u201cGreat Moderation\u201d and the International Assault on Labor<\/strong><\/em>
\nby Noam Chomsky<\/strong><\/em>
\nIn most of the world, May Day is an international workers\u2019 holiday, bound up with the bitter 19th-century struggle of American workers for an eight-hour day. The May Day just past leads to somber reflection.
\nA decade ago, a useful word was coined in honor of May Day by radical Italian labor activists: \u201cprecarity.\u201d It referred at first to the increasingly precarious existence of working people \u201cat the margins\u201d\u2014women, youth, migrants. Then it expanded to apply to the growing \u201cprecariat\u201d of the core labor force, the \u201cprecarious proletariat\u201d suffering from the programs of deunionization, flexibilization and deregulation that are part of the assault on labor throughout the world.
\nBy that time, even in Europe there was mounting concern about what labor historian Ronaldo Munck, citing Ulrich Beck, calls the \u201cBrazilianization of the West\u2014the spread of temporary and insecure employment, discontinuity and loose informality into Western societies that have hitherto been the bastions of full employment.\u201d
\nThe state-corporate war against unions has recently extended to the public sector, with legislation to ban collective bargaining and other elementary rights. Even in pro-labor Massachusetts, the House of Representatives voted right before May Day to sharply restrict the rights of police officers, teachers, and other municipal employees to bargain over healthcare\u2014essential matters in the U.S., with its dysfunctional and highly inefficient privatized health-care system.
\nThe rest of the world may associate May 1 with the struggle of American workers for basic rights, but in the United States that solidarity is suppressed in favor of a jingoist holiday. May 1 is \u201cLoyalty Day,\u201d designated by Congress in 1958 for \u201cthe reaffirmation of loyalty to the United States and for the recognition of the heritage of American freedom.\u201d
\nPresident Eisenhower proclaimed further that Loyalty Day is also Law Day, reaffirmed annually by displaying the flag and dedication to \u201cJustice for All,\u201d \u201cFoundations of Freedom\u201d and \u201cStruggle for Justice.\u201d
\nThe U.S. calendar has a Labor Day, in September, celebrating the return to work after a vacation that is far briefer than in other industrial countries.
\nThe ferocity of the assault against labor by the U.S. business class is illustrated by Washington\u2019s failure, for 60 years, to ratify the core principle of international labor law, which guarantees freedom of association. Legal analyst Steve Charnovitz calls it \u201cthe untouchable treaty in American politics\u201d and observes that there has never even been any debate about the matter.
\nWashington\u2019s dismissal of some conventions supported by the International Labor Organization (ILO) contrasts sharply with its dedication to enforcement of monopoly-pricing rights for corporations, disguised under the mantle of \u201cfree trade\u201d in one of the contemporary Orwellisms.
\nIn 2004, the ILO reported that \u201ceconomic and social insecurities were multiplying with globalization and the policies associated with it, as the global economic system has become more volatile and workers were increasingly shouldering the burden of risk, for instance, though pension and health care reforms.\u201d
\nThis was what economists call the period of the Great Moderation, hailed as \u201cone of the great transformations of modern history,\u201d led by the United States and based on \u201cliberation of markets\u201d and particularly \u201cderegulation of financial markets.\u201d
\nThis paean to the American way of free markets was delivered by Wall Street Journal editor Gerard Baker in January 2007, just months before the system crashed\u2014and with it the entire edifice of the economic theology on which it was based\u2014bringing the world economy to near disaster.
\nThe crash left the United States with levels of real unemployment comparable to the Great Depression, and in many ways worse, because under the current policies of the masters those jobs are not coming back, as they did through massive government stimulus during World War II and the following decades of the \u201cgolden age\u201d of state capitalism.
\nDuring the Great Moderation, American workers had become accustomed to a precarious existence. The rise of an American precariat was proudly hailed as a primary factor in the Great Moderation that brought slower economic growth, virtual stagnation of real income for the majority of the population, and wealth beyond the dreams of avarice for a tiny sector, a fraction of 1 percent, mostly CEOs, hedge fund managers and the like.
\nThe high priest of this magnificent economy was Alan Greenspan, described by the business press as \u201csaintly\u201d for his brilliant stewardship. Glorying in his achievements, he testified before Congress that they relied in part on \u201catypical restraint on compensation increases (which) appears to be mainly the consequence of greater worker insecurity.\u201d
\nThe disaster of the Great Moderation was salvaged by heroic government efforts to reward the perpetrators. Neil Barofsky, stepping down on March 30 as special inspector general of the bailout program, wrote a revelatory New York Times op-ed about how the bailout worked.
\nIn theory, the legislative act that authorized the bailout was a bargain: The financial institutions would be saved by the taxpayer, and the victims of their misdeeds would be somewhat compensated by measures to protect home values and preserve homeownership.
\nPart of the bargain was kept: The financial institutions were rewarded lavishly for causing the crisis, and forgiven for outright crimes. But the rest of the program floundered.
\nAs Barofsky writes: \u201cForeclosures continue to mount, with 8 million to 13 million filings forecast over the program\u2019s lifetime\u201d while \u201cthe biggest banks are 20 percent larger than they were before the crisis and control a larger part of our economy than ever. They reasonably assume that the government will rescue them again, if necessary. Indeed, credit rating agencies incorporate future government bailouts into their assessments of the largest banks, exaggerating market distortions that provide them with an unfair advantage over smaller institutions, which continue to struggle.\u201d
\nIn short, President Obama\u2019s programs were \u201ca giveaway to Wall Street executives\u201d and a blow in the solar plexus to their defenseless victims.
\nThe outcome should surprise only those who insist on hopeless naivete about the design and implementation of policy, particularly when economic power is highly concentrated and state capitalism has entered into a new stage of \u201ccreative destruction,\u201d to borrow Joseph Schumpeter\u2019s famous phrase, but with a twist: creative in ways to enrich and empower the rich and powerful, while the rest are free to survive as they may, while celebrating Loyalty and Law Day.
\nMay 3, 2011
\nThis article originally appeared in The New Significance, a “web magazine exploring revolutionary forces for change and autonomy in the 21st century”
\nhttp:\/\/www.thenewsignificance.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[33],"tags":[],"_links":{"self":[{"href":"https:\/\/global-labour.info\/en\/wp-json\/wp\/v2\/posts\/294"}],"collection":[{"href":"https:\/\/global-labour.info\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/global-labour.info\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/global-labour.info\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/global-labour.info\/en\/wp-json\/wp\/v2\/comments?post=294"}],"version-history":[{"count":0,"href":"https:\/\/global-labour.info\/en\/wp-json\/wp\/v2\/posts\/294\/revisions"}],"wp:attachment":[{"href":"https:\/\/global-labour.info\/en\/wp-json\/wp\/v2\/media?parent=294"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/global-labour.info\/en\/wp-json\/wp\/v2\/categories?post=294"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/global-labour.info\/en\/wp-json\/wp\/v2\/tags?post=294"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}