Podcast • May 14, 2008

Bad News in High Style: Kevin Phillips

Kevin Phillips: how bad is it really? People I know count on Paul Krugman in The Times to give us all the bad news we can believe in. But Kevin Phillips (a Nixon-brain turned populist ...
kevin phillips

Kevin Phillips: how bad is it really?

People I know count on Paul Krugman in The Times to give us all the bad news we can believe in. But Kevin Phillips (a Nixon-brain turned populist grand historian) not only trumps Krugman in the Cassandra Stakes, he also explains why Krugman and media in general have gone soft and squishy (“now that the financial clouds have lifted a bit”) on the global apocalypse coming in the convergence of our housing collapse, the explosion of public and private debt, the fall of the dollar, the rise of (a) China and (b) $125 oil, and the consolidation of finance (the debt business) as our leading industry. Phillips notes that the best of big media, meaning the Times, the Wall Street Journal and the Financial Times, hate to be out front with bad news. And Krugman, the best of the best, is too heavily invested in the Clinton Democrats’ myth of a renewable once-and-future politics of prosperity — and too polite to dwell, for example, on the financialization of the Clinton campaign base. Nobody I know tells the story of catastrophe with higher style and a broader sweep of knowledge than Kevin Phillips — in his new book, Bad Money and in conversation here:

Click to listen to Chris’s conversation with Kevin Phillips here (36 minutes, 16 MB MP3)

There’s a growing sense that the imperial era of the United States is over almost before it started. I think we’re seeing the weakness of the United States that has allowed the financial sector to take over the private economy… 20 to 21 percent of GDP is now finance, pushing manufacturing way down. I think what you’ll see happen to the US is… a degree of implosion that will involve everything from too much debt, collapsing home prices, rising oil prices and the declining dollar. It doesn’t spell the end of the United States, but it spells the end of the United States as the total big cheese in the world. We’re going to lose some of the yardsticks that everybody enjoyed for a long time…

We used to be leading world creditor nation, lead world manufacturer, leading world producer of oil; we’re now leading the world’s leading debtor, the largest importer of manufactures in the world, and we’re the worlds largest oil importer. It’s a disastrous transformation. The only part of the economy that’s really profited is the financial sector because an awful lot of the transition is towards more debt,

more credit, more living on things you can’t afford, more keeping up pretenses, and more ambition around the world and less to back it up. And the consummation of this in many ways has been the George W Bush administration…

They invade Iraq, partly in order to get Iraq’s oil which hasn’t been tapped too much historically, and they thought they might be able to get 6 or 7 million barrels a day, and they could use that to bust open OPEC, and that would bring the price down — that was their ambition. And the futures market showed briefly in 2003, that there was an expectation that oil would come down to $15-18 dollars a barrel. At the time it was $20-25 — and now its $120-125. The notion that this imbecility was orchestrated, totally contrary to what they wanted, by two people who came from the oil industry — we could have done better with two bums or two Good Humor men, than these two men from the oil industry who knew nothing about the forces they were unleashing…

There was the ‘neutron loan’ – it kills the people but leaves the housing standing. The real thing they did that made this thing gain legs, is that no matter how crummy the loans were, most were securitized…. It’s mindboggling — If these people were in the manufacturing business, production of these things would have been enjoined because they were unsafe. You have consumer safety product commissions and things like that — you don’t have a financial products safety commission, which we sure as hell should have.

Kevin Phillips, in conversation with Chris Lydon on Open Source, May 14, 2008

Podcast • March 13, 2008

Cuba for the Long Run (II): Adrian Lopez Denis

Adrian Lopez Denis finds it laughable that even the best of the Anglo-American media, The Economist and The New Yorker, made iconic covers of cigar smoke (and crushed cigar butts) when Fidel Castro bowed out ...

Adrian Lopez Denis finds it laughable that even the best of the Anglo-American media, The Economist and The New Yorker, made iconic covers of cigar smoke (and crushed cigar butts) when Fidel Castro bowed out of office — a man who quit smoking 40 years ago, in a country that has produced a generation of creative young survivors since the heyday of the 1959 Revolution.

Econ Castro

Adrian is a social historian at Brown (Ph.D from UCLA), and the son of a medical doctor in Cuba. He likes to say that only George W. Bush sees the transition in Cuba these days as a turning point of any kind. He sees nothing spectacular coming out of Cuba soon, “no headlines in the next five years,” much less a civil war.

NYr Castro

Adrian’s emphasis in our conversations is always on the continuity of informal realities in Cuba: the vitality of the informal economy, the power of family networks and the “transnational households” that keep Havana and Miami connected, and the pleasure-seeking “culture of informality” that overwhelmed the commissars from Eastern Europe. An authoritarian tendency is part of the long Cuban tradition. So, too, is a profound problem of racial suspicion and discrimination, a legacy of slavery that the Revolution only chipped at. So in Adrian’s account of Cuba, nothing is quite what it seems or what any of the slogans suggest. And most of the consequences Cuba deals with are the unintended ones.

Adrian Lopez

Adrian Lopez Denis: a ‘continuities’ man

From below it’s a country that found its own way to get over the Cold War, Cuban style. We have already a whole generation in the post-Cold War period. Young people don’t remember the Cold War, and young people people are what drives Cuba forward, both on the island and in Miami… What’s on their mind is survival, and it’s not survival of the fittest. This is not a Darwinian environment, necessarily…

Don’t minimize the unintended consequences of the Cuban revolution. By equalizing income levels and for the most part erasing the old established divisions of class… one of the unintended consequences of that transformation was that people created networks of solidarity, facing a state that controlled public spaces in a very pervasive way. People developed alternatives to it, or a sense of networks… Building on top of a long tradition of an informal economy in Cuba, those networks are now responsible for the dynamics of daily life… They cross all divisions. These are networks of survival, so when you need to survive you can not look at the ideology or the race or the gender of the person you are interacting with. You can’t be that picky…

Race… is one of the deepest problems that Cuba has, and this is one of most obvious failures of the Cuban Revolution. In areas like gender equality, the Cuban Revolution was much more accomplished than in areas like solving the race differential… The Cuban Revolution was never feminist, but the policy was more comprehensive in transforming attitudes of men toward women than in this very weak attempt to transform the attitudes of white people toward black people… The other thing is that the leadership of the Cuban Revolution was terrified of the possibility of an alternative political mobilization of the Afro-Cuban population. Cuban elites and middle classes have been terrified of that for 200 years, since the Haitian revolution. It’s a fear that runs deep in the culture. It’s another consequence of slavery; you had that fear in every society that goes through slavery. The fear of the barbarian is a myth that runs deep. It’s the saddest part of all this story. That is where I think everything the Cuban Revolution tried to do in the soicial and economic arena failed, because the government decided they could not allow the Afro-Cuban population to organize themselves to improve their conditions. The Afro Cuban population was there to receive what the government gave them, and be grateful. They not to fight for more, not to fight for equality, basically… The consequence is that there’s more people in prison today in Cuba than anywhere else in the world. Cuba has the largest prison population in the world right now… It’s a very tragic situation, and the Afro-Cuban population is over represented in prisons, and that is the most obvious sign that something is really going deeply wrong in your country in terms of racial politics… We’re not talking about 300 political prisoners. That’s a footnote. We’re talking about the more or less 200,000 people that are in prison in Cuba today… It’s the most incarcerated society ever created in history… for “being black,” stealing a chicken, surviving.

All this informality that I was celebrating a few minutes ago is illegal… The people that pay the price are the people that are more active in the informal economy, people that are more creative. It’s the same creativity that goes into playing jazz… It’s talking to other people, getting along, being able to improvise. You get an Afro-Cuban population that has been for centuries at the bottom of society, that has been needing these connections, developing these networks since the time of slavery; and a government that doesn’t understand the vitality of these networks and tries to substitute a top-down system that really doesn’t work. So there you go.

Adrian Lopez Denis of Brown University, in conversation with Chris Lydon at the Watson Institute, March 12, 2008.

Adrian Lopez Denis gives us, finally, a moment and a place to dwell on. Late in the fall semester, next December 17, he will sweep his contingent of Brown students in Cuba into the mass pilgrimage to the church and hospital outside Havana of San Lazaro , the patron saint of the poor and the sick in Cuba. It was built in 1917 to treat lepers; today it’s famous for its AIDS sanitarium. It is one of the intricate symbols, as Adrian says, of “the island that was there before the Cold War, and that’s going to be there after.”

As many as 60,000 Cubans will celebrate this complicated feast of San Lazaro . “Its a perfect picture of the Cuban Revolution,” Adrian concluded. “It’s a hospital, a prison and a school. People are there because they want to be, and people are there that don’t want to be there. It’s like a microcosm of Cuba. And now they have one of these in every province, fourteen in all… We have the lowest HIV-posititive rate in the Atlantic — a spectacular, stunning success of the Cuban Revolution. And it’s done basically by forcing isolation on people. You get free drugs because you’re sick, but you get isolated and put in this prison because you’re sick.”