Sunday, February 13, 2011

Austerity -- Force Molting the American Working Class

Michael Pollan described how laying hens are force molted -- deprived of food and light and water in order to squeeze out some extra eggs before they die. This practice reminds me of the mantra that politicians spout: Everybody has to make sacrifices (except for the rich and powerful who need more tax cuts and deregulation). Anyway, capital can always find cheaper hens in the impoverished corners of the world.

"… the American laying hen, who passes her brief span piled together with a half-dozen other hens in a wire cage whose floor a single page of this magazine could carpet. Every natural instinct of this animal is thwarted, leading to a range of behavioral “vices” that can include cannibalizing her cagemates and rubbing her body against the wire mesh until it is featherless and bleeding. Pain? Suffering? Madness? The operative suspension of disbelief depends on more neutral descriptors, like “vices” and “stress.” Whatever you want to call what’s going on in those cages, the 10 percent or so of hens that can’t bear it and simply die is built into the cost of production. And when the output of the others begins to ebb, the hens will be “force-molted” -- starved of food and water and light for several days in order to stimulate a final bout of egg laying before their life’s work is done."

Pollan, Michael. 2002. "An Animal’s Place." The New York Times Magazine (10 November).


wellbasically said...

I'm no fan of austerity, but I understand where it's coming from. They will try austerity because the big spending binge of stimulus and easy money, the Keynesian formula, was such a bust.

michael perelman said...

Or because selfish, rich people & corporations resist their fair share of taxes.

Shannon Love said...

Well, your analogy is apt with the small caveat that it is the economic creatives who are the chickens that are squeezed and squeezed until, economically at least, they just die.

Ramping up taxes on the capital in the middle of a recession can do nothing but increase overall poverty. We are in a recession in the first place because distortions in the real estate market caused a massive misallocation of resources and man power towards building white elephant housing. In order to correct that, economic creatives must create entirely new businesses and jobs in order to employ all the people who used to work in one capacity or the other creating all those houses. Doing so takes a lot of capital.

Oh and Pollan has his science wrong. Hens don't lay when they are stressed or starving. In fact, no animal increases reproduction when its life is endangered. In the old days, it was a trope that farm wives would become outraged when a dog got in the hen house because the hens would lay for a weak. According to Pollan, terrifying hens with dogs should have increased egg laying. Pollan just read to many PETA tracks.

And what with using "captial" like its a person? Marxism is 19th century pseudoscience biased on an erroneous concept of predeterminate evolution. Let it go already.

One Salient Oversight said...

How about this for a counter argument.

The economy is like a sick person who needs an operation. The problem is that when the economy has to go through the operation, it will result in a long recovery time. Yet without the operation the economy will get sicker.

Austerity is not just about cutting spending. It can also be about raising taxes. Maybe if the US raised taxes on the top income bracket it will balance the budget easier?

Brenda Rosser said...

Seven fixes

Reward effort, not fraud, theft and privilege.

Add conscience to pleasure.

Choose teachers with character.

Place morality in the land of commerce.

Give a humane objective to science.

Be prepared to sacrifice, not simply worship.

Introduce principles to politics

[Ghandi and others]

“Work as if you lived in the early days of a better nation.”—Alasdair Gray.

“If these are the early days of a better nation, there must be hope, and a hope of peace is as good as any, and far better than a hollow hoarding greed or the dry lies of an aweless god.”—Graydon Saunders

wellbasically said...

Raising taxes is austerity too.

Barkley Rosser said...


Well, basically most studies suggest that things would have been a lot worse without the stimulus. It only looks like a bust for two reasons. 1) More recent recessions were much shallower and less serious, so this one looks worse despite efforts to offset it (the appropriate comparison remains the Great Depression, and this one has not been nearly as bad).
2) The US has had particularly bad employment/unemployment policies compared to say Germany, where the unemployment rate barely budged despite the German GDP declining at least as much as the US's. This matter has been discussed here before, and the US has a worse record on layoffs/GDP decline than practically any OECD country. So, this is not a matter of the stimulus, but of labor market policies.

Brenda Rosser said...

An interesting excerpt regarding the labour market in the US:

"Loose fiscal policy has failed to create jobs also. Consider that we had a $700 billion TARP program, nearly $1 trillion in stimulus spending, a government takeover of General Motors, and hundreds of billions of dollars of guarantees to Fannie Mae, Freddie Mac, HUD, FDIC, etc. On top of those programs the Federal Reserve has provided over $4 trillion worth of assistance over the past few years through its credit facilities, purchases of mortgage-backed securities, and now its second round of quantitative easing. Yet even after all these trillions of dollars of spending and bailouts, total nonfarm payroll employment is still seven million jobs lower than it was before this crisis began.

In this same period of time, the total U.S. population has increased by nine million people. We would expect that roughly four million of these people should have been employed, so we are really dealing with eleven million fewer employed people than would otherwise be expected. It should not be surprising that monetary policy is ineffective at creating actual jobs...."

Decades of jobs chasing the weakest currency and the lowest wages didn't help.

wellbasically said...

The republicans won 2010 by being the party of growth. Since then they have embraced the rhetoric of austerity. This is certainly an opening for the Democrats who have in the past worked as the growth party.

Don Levit said...

You mentioned a lot of government assistance over the last few years.
How does that figure into GDP?
For example, if we run a budget deficit of $1.5 trillion, is that added, dollar for dollar, to GDP?
What about interest credited to the Social Security and Medicare trust funds?
Are those Treasury securities added to GDP?
Don Levit

Jack said...

"The republicans won 2010 by being the party of growth."

Huh??? I would better describe the Republican campaign as one of fear and loathing. Unfortunately people do repsond to that kind emotive appeal. In what manner was growth a part of the Republican
electoral effort? Unless you mean a cancerous growth.

Brenda Rosser said...

Don, thankyou for your questions.
You wrote: "if we run a budget deficit of $1.5 trillion, is that added, dollar for dollar, to GDP?"

I suppose that it would depend upon the nature of the Government deficit spending. In the US much of it has been used to finance overseas military installations and misadventures. It has also been used, in part, to finance larger CEO packages in unviable enterprises; ie the dollars have often gone to those who operate under a 'business as fraud' model. It's hard to imagine that a lot of this money would add to 'gross domestic product' in the long or medium term. Even after taking into account the severe limitations of the GDP measure.

Don Levit: "What about interest credited to the Social Security and Medicare trust funds? Are those Treasury securities added to GDP?"

It is my understanding that interest payments by Government and Treasury securities (Government debt) are not included in the GDP measure.

Incidentally, in 2001 Robert Greenstein and Richard Kogan made an interesting suggestion as to how to ward off the Social Security 'crisis' in America: "If the Social Security surplus is walled off and devoted to paying down the debt, except in years when the economy is weak, interest payments on the debt will be reduced substantially. These interest savings will more than cover the increase in Social Security costs in 2016 and for a number of years thereafter. This will not hold true, of course, if the annual surpluses run by the Social Security Trust Fund are used to a significant degree for purposes other than paying down debt. "

by Robert Greenstein and Richard Kogan. 2001
PDF of this report

Don Levit said...

I agree with you entirely and wholeheartedly that Social Security surplus should have been walled off and devoted to paying down the debt, except in years when the economy is weak.
The Treasury Department offered a similar view in a paper entitled "Prefunding Social Security Benefits to Achieve Intergenerational Fairness: Can it be Done in the Social Security Trust Fund?"
"The issue is not how the trust fund is invested or whether a positive trust fund balance conveys legislative okay to pay benefits, but whether Social Security surpluses pay down debt held by the public. If non Social Security policy is to be planned independently of Social Security policy, there should be no distinction between how much the non Social Security budget owes the public and how much it owes the trust fund. If that is true, the trust fund balance measures the amount by which Social Security cash flows lower publicly held debt at each point in time and trust fund accumulations therefore increase the government's ability to issue public debt in the future to finance benefit payments."
"If the premise that Social Security surpluses are not saved is accepted, the negative cash flow date does not signal the start of fiscal problems; the fiscal problem is that Social Security surpluses now, in the past, and in the future cause corresponding lower non Social Security surpluses."
Don Levit