More about the film

Detroit’s story has encapsulated the iconic narrative of America over the last century — the Great Migration of African-Americans escaping Jim Crow, the rise of manufacturing and the middle class, the love affair with automobiles, the flowering of the American dream, and now the collapse of the economy and the fading American mythos.

With its vivid, painterly palette and haunting score, “Detropia” sculpts a dreamlike collage of a grand city teetering on the brink of dissolution. As houses are demolished by the thousands, automobile-company wages plummet, institutions crumble, and tourists gawk at the “charming decay,” the film’s vibrant, gutsy characters glow and erupt like flames from the ashes. These soulful pragmatists and stalwart philosophers strive to make ends meet and make sense of it all, refusing to abandon hope or resistance. Their grit and pluck embody the spirit of the Motor City as it struggles to survive postindustrial America and begins to envision a radically different future. (Caroline Libresco, 2012 Sundance Film Festival)

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Long Op-Ed short, Brooks says “cyclicalists” (unnamed) think we should deficit-spend our way to prosperity, because, according to Brooks, they believe that “the level of government spending is the main factor in determining how fast an economy grows.” (No one actually believes this.) But according to Brooks, all of our problems are “structural,” which is to say that the reason we have mass unemployment and debt and growing wealth disparity is because of “technological change” and crappy schools. And “special-interest deals” in the tax code.

The point of the Brooks argument is simply to make continued non-action to address actual short-term pressing problems sound serious and wise. He’s not even making a partisan argument, you see. Oh, people on “the left” have been having their silly little debate, but all the serious people — “some on the left but mostly in the center and on the right” — have accepted the sad truth, like Brooks. And Brooks is soberly explaining the situation. He is not at all responding to Paul Krugman, his fellow New York Times columnist, who has lately taken to fiercely rebutting arguments put forth by various unnamed “centrists” and “moderates” in his columns.

This is Brooks’ conclusion:

But you can only mask structural problems for so long. The whole thing has gone kablooey. The current model, in which we try to compensate for structural economic weakness with tax cuts and an unsustainable welfare state, simply cannot last. The old model is broken. The jig is up.

It’s so sad, but everyone will now just have to accept that social democracy is an impossibility. We have learned that “the old economic and welfare state model is unsustainable,” so shut up about your unemployment benefits running out and there being no jobs still. (Silly me, here I was thinking the recent massive international financial crisis actually exposed post-industrial capitalism as the “unsustainable” thing.)

Ezra Klein has the rather polite, policy-based response to Brooks’ argument: Essentially that even if Brooks is right about America’s structural problems needing to be addressed, we should still also give poor people money and indebted people relief and spend money on infrastructure improvements to prevent these structural problems from becoming even worse.

Dean Baker has the response in which it is pointed out that Brooks is full of predictable, repetitive shit. The “we have no jobs because of technology and also there are plenty of jobs but unemployed people have the wrong skills” line is as old as the Great Depression and there is no actual evidence for it. It’s just what people who want to sound serious while dismissing efforts to spend money on economic stimulus say.

Hey, let’s check out some recent real estate news at the Washington Post’s Reliable Source blog, for fun. Looks like a Mr. David Brooks just bought himself a $3.95 million home in Cleveland Park!

The New York Times op-ed columnist and wife Sarah are trading up — from their longtime home near Bethesda’s Burning Tree Club to a century-old (exquisitely renovated) five bedroom, four-and-a-half bath house in Cleveland Park. It includes a two-car garage, iron and stone fence, generous-sized porch and balcony, and what appear to be vast spaces for entertaining. The timing seems to have been right: After only a few days on the market, their old place (which also boasts five bedrooms) is under contract for $1.6 million.

Whoops, sorry about your welfare state collapsing, 12 million out of work Americans, but it was just too “unsustainable” to keep you employed — you should all consider developing new skills and trying to find more “productive” work, like writing bullshit columns for the New York Times, maybe.

I’m just old enough to remember the Great Depression. After the first few years, by the mid-1930s — although the situation was objectively much harsher than it is today — nevertheless, the spirit was quite different. There was a sense that “we’re gonna get out of it,” even among unemployed people, including a lot of my relatives, a sense that “it will get better.”

There was militant labor union organizing going on, especially from the CIO (Congress of Industrial Organizations). It was getting to the point of sit-down strikes, which are frightening to the business world — you could see it in the business press at the time — because a sit-down strike is just a step before taking over the factory and running it yourself. The idea of worker takeovers is something which is, incidentally, very much on the agenda today, and we should keep it in mind. Also New Deal legislation was beginning to come in as a result of popular pressure. Despite the hard times, there was a sense that, somehow, “we’re gonna get out of it.”

It’s quite different now. For many people in the United States, there’s a pervasive sense of hopelessness, sometimes despair. I think it’s quite new in American history. And it has an objective basis.

On the Working Class

In the 1930s, unemployed working people could anticipate that their jobs would come back. If you’re a worker in manufacturing today — the current level of unemployment there is approximately like the Depression — and current tendencies persist, those jobs aren’t going to come back.

The change took place in the 1970s. There are a lot of reasons for it. One of the underlying factors, discussed mainly by economic historian Robert Brenner, was the falling rate of profit in manufacturing. There were other factors. It led to major changes in the economy — a reversal of several hundred years of progress towards industrialization and development that turned into a process of de-industrialization and de-development. Of course, manufacturing production continued overseas very profitably, but it’s no good for the work force.

Along with that came a significant shift of the economy from productive enterprise — producing things people need or could use — to financial manipulation. The financialization of the economy really took off at that time.

On Banks

Before the 1970s, banks were banks. They did what banks were supposed to do in a state capitalist economy: they took unused funds from your bank account, for example, and transferred them to some potentially useful purpose like helping a family buy a home or send a kid to college. That changed dramatically in the 1970s. Until then, there had been no financial crises since the Great Depression. The 1950s and 1960s had been a period of enormous growth, the highest in American history, maybe in economic history.

And it was egalitarian.  The lowest quintile did about as well as the highest quintile. Lots of people moved into reasonable lifestyles — what’s called the “middle class” here, the “working class” in other countries — but it was real.  And the 1960s accelerated it. The activism of those years, after a pretty dismal decade, really civilized the country in lots of ways that are permanent.

When the 1970s came along, there were sudden and sharp changes: De-industrialization, the off-shoring of production, and the shift to financial institutions, which grew enormously. I should say that, in the 1950s and 1960s, there was also the development of what several decades later became the high-tech economy: Computers, the Internet, the IT Revolution developed substantially in the state sector.

The developments that took place during the 1970s set off a vicious cycle. It led to the concentration of wealth increasingly in the hands of the financial sector. This doesn’t benefit the economy — it probably harms it and society — but it did lead to a tremendous concentration of wealth.

On Politics and Money

Concentration of wealth yields concentration of political power. And concentration of political power gives rise to legislation that increases and accelerates the cycle. The legislation, essentially bipartisan, drives new fiscal policies and tax changes, as well as the rules of corporate governance and deregulation. Alongside this began a sharp rise in the costs of elections, which drove the political parties even deeper into the pockets of the corporate sector.

The parties dissolved in many ways. It used to be that if a person in Congress hoped for a position such as a committee chair, he or she got it mainly through seniority and service. Within a couple of years, they started having to put money into the party coffers in order to get ahead, a topic studied mainly by Tom Ferguson. That just drove the whole system even deeper into the pockets of the corporate sector (increasingly the financial sector).

This cycle resulted in a tremendous concentration of wealth, mainly in the top tenth of one percent of the population. Meanwhile, it opened a period of stagnation or even decline for the majority of the population. People got by, but by artificial means such as longer working hours, high rates of borrowing and debt, and reliance on asset inflation like the recent housing bubble. Pretty soon those working hours were much higher in the United States than in other industrial countries like Japan and various places in Europe. So there was a period of stagnation and decline for the majority alongside a period of sharp concentration of wealth. The political system began to dissolve.

There has always been a gap between public policy and public will, but it just grew astronomically. You can see it right now, in fact. Take a look at the big topic in Washington that everyone concentrates on: The deficit. For the public, correctly, the deficit is not regarded as much of an issue. And it isn’t really much of an issue. The issue is joblessness. There’s a deficit commission but no joblessness commission. As far as the deficit is concerned, the public has opinions. Take a look at the polls. The public overwhelmingly supports higher taxes on the wealthy, which have declined sharply in this period of stagnation and decline, and the preservation of limited social benefits.

The outcome of the deficit commission is probably going to be the opposite. The Occupy movements could provide a mass base for trying to avert what amounts to a dagger pointed at the heart of the country.

Plutonomy and the Precariat

For the general population, the 99% in the imagery of the Occupy movement, it’s been pretty harsh — and it could get worse. This could be a period of irreversible decline. For the 1 percent and even less — the .1 percent — it’s just fine. They are richer than ever, more powerful than ever, controlling the political system, disregarding the public. And if it can continue, as far as they’re concerned, sure, why not?

Take, for example, Citigroup. For decades, Citigroup has been one of the most corrupt of the major investment banking corporations, repeatedly bailed out by the taxpayer, starting in the early Reagan years and now once again. I won’t run through the corruption, but it’s pretty astonishing.

In 2005, Citigroup came out with a brochure for investors called “Plutonomy: Buying Luxury, Explaining Global Imbalances.” It urged investors to put money into a “plutonomy index.” The brochure says, “The World is dividing into two blocs — the Plutonomy and the rest.”

Plutonomy refers to the rich, those who buy luxury goods and so on, and that’s where the action is. They claimed that their plutonomy index was way outperforming the stock market. As for the rest, we set them adrift. We don’t really care about them. We don’t really need them. They have to be around to provide a powerful state, which will protect us and bail us out when we get into trouble, but other than that they essentially have no function. These days they’re sometimes called the “precariat” — people who live a precarious existence at the periphery of society. Only it’s not the periphery anymore. It’s becoming a very substantial part of society in the United States and indeed elsewhere. And this is considered a good thing.

So, for example, Fed Chairman Alan Greenspan, at the time when he was still “Saint Alan” — hailed by the economics profession as one of the greatest economists of all time (this was before the crash for which he was substantially responsible) — was testifying to Congress in the Clinton years, and he explained the wonders of the great economy that he was supervising. He said a lot of its success was based substantially on what he called “growing worker insecurity.” If working people are insecure, if they’re part of the precariat, living precarious existences, they’re not going to make demands, they’re not going to try to get better wages, they won’t get improved benefits. We can kick ’em out, if we don’t need ’em. And that’s what’s called a “healthy” economy, technically speaking. And he was highly praised for this, greatly admired.

So the world is now indeed splitting into a plutonomy and a precariat — in the imagery of the Occupy movement, the 1 percent and the 99 percent. Not literal numbers, but the right picture. Now, the plutonomy is where the action is and it could continue like this.

If it does, the historic reversal that began in the 1970s could become irreversible. That’s where we’re heading. And the Occupy movement is the first real, major, popular reaction that could avert this. But it’s going to be necessary to face the fact that it’s a long, hard struggle. You don’t win victories tomorrow. You have to form the structures that will be sustained, that will go on through hard times and can win major victories. And there are a lot of things that can be done.

Toward Worker Takeover

I mentioned before that, in the 1930s, one of the most effective actions was the sit-down strike. And the reason is simple: That’s just a step before the takeover of an industry.

Through the 1970s, as the decline was setting in, there were some important events that took place. In 1977, U.S. Steel decided to close one of its major facilities in Youngstown, Ohio. Instead of just walking away, the workforce and the community decided to get together and buy it from the company, hand it over to the work force, and turn it into a worker-run, worker-managed facility. They didn’t win. But with enough popular support, they could have won.  It’s a topic that Gar Alperovitz and Staughton Lynd, the lawyer for the workers and community, have discussed in detail.

It was a partial victory because, even though they lost, it set off other efforts. And now, throughout Ohio, and in other places, there’s a scattering of hundreds, maybe thousands, of sometimes not-so-small worker/community-owned industries that could become worker-managed. And that’s the basis for a real revolution. That’s how it takes place.

In one of the suburbs of Boston, about a year ago, something similar happened. A multinational decided to close down a profitable, functioning facility carrying out some high-tech manufacturing. Evidently, it just wasn’t profitable enough for them. The workforce and the union offered to buy it, take it over, and run it themselves. The multinational decided to close it down instead, probably for reasons of class-consciousness. I don’t think they want things like this to happen. If there had been enough popular support, if there had been something like the Occupy movement that could have gotten involved, they might have succeeded.

And there are other things going on like that. In fact, some of them are major. Not long ago, President Barack Obama took over the auto industry, which was basically owned by the public. And there were a number of things that could have been done. One was what was done: reconstitute it so that it could be handed back to the ownership, or very similar ownership, and continue on its traditional path.

The other possibility was to hand it over to the workforce — which owned it anyway — turn it into a worker-owned, worker-managed major industrial system that’s a big part of the economy, and have it produce things that people need. And there’s a lot that we need.

We all know or should know that the United States is extremely backward globally in high-speed transportation, and it’s very serious. It not only affects people’s lives, but the economy.  In that regard, here’s a personal story. I happened to be giving talks in France a couple of months ago and had to take a train from Avignon in southern France to Charles De Gaulle Airport in Paris, the same distance as from Washington, D.C., to Boston. It took two hours.  I don’t know if you’ve ever taken the train from Washington to Boston, but it’s operating at about the same speed it was 60 years ago when my wife and I first took it. It’s a scandal.

It could be done here as it’s been done in Europe. They had the capacity to do it, the skilled work force. It would have taken a little popular support, but it could have made a major change in the economy.

Just to make it more surreal, while this option was being avoided, the Obama administration was sending its transportation secretary to Spain to get contracts for developing high-speed rail for the United States, which could have been done right in the Rust Belt, which is being closed down. There are no economic reasons why this can’t happen. These are class reasons, and reflect the lack of popular political mobilization. Things like this continue.

Climate Change and Nuclear Weapons

I’ve kept to domestic issues, but there are two dangerous developments in the international arena, which are a kind of shadow that hangs over everything we’ve discussed. There are, for the first time in human history, real threats to the decent survival of the species.

One has been hanging around since 1945. It’s kind of a miracle that we’ve escaped it. That’s the threat of nuclear war and nuclear weapons. Though it isn’t being much discussed, that threat is, in fact, being escalated by the policies of this administration and its allies. And something has to be done about that or we’re in real trouble.

The other, of course, is environmental catastrophe. Practically every country in the world is taking at least halting steps towards trying to do something about it. The United States is also taking steps, mainly to accelerate the threat.  It is the only major country that is not only not doing something constructive to protect the environment, it’s not even climbing on the train. In some ways, it’s pulling it backwards.

And this is connected to a huge propaganda system, proudly and openly declared by the business world, to try to convince people that climate change is just a liberal hoax. “Why pay attention to these scientists?”

We’re really regressing back to the dark ages. It’s not a joke.  And if that’s happening in the most powerful, richest country in history, then this catastrophe isn’t going to be averted — and in a generation or two, everything else we’re talking about won’t matter. Something has to be done about it very soon in a dedicated, sustained way.

It’s not going to be easy to proceed. There are going to be barriers, difficulties, hardships, failures.  It’s inevitable. But unless the spirit of the last year, here and elsewhere in the country and around the globe, continues to grow and becomes a major force in the social and political world, the chances for a decent future are not very high.

Well, a lot of things. For one, criminal cases for finance-related wrongdoing are hard and complicated to prosecute. The Justice Department is stocked with a lot of people with experience defending financial institutions — including Attorney General Eric Holder, a former partner at Covington & Burling, which represents many of the worst of the mega-banks. Plus, curiously, a lot of Goldman executives and other Wall Street types keep donating lots of money to Obama! (Though less money than they gave him in 2008.) The simple answer is that Holder, and Obama, seem to think that while Wall Street did a lot of stupid, venal things that ruined everyone’s lives, those things were largely … legal. Obama said as much to Rolling Stone: “In some cases, really irresponsible practices that hurt a lot of people might not have been technically against the law.” He might be not entirely wrong! Lots of horrible finance industry practices were and are perfectly legal. But we’ll never quite know whether the line was crossed until we … actually investigate.

So it’s all the odder that Wall Street is so damn mad at Obama, right?

In the only slightly oversimplified narrative of the financial crisis and subsequent recession as you and I and most non-billionaires understand it, Wall Street blew up the world economy, then got bailed out to the tune of billions of dollars, and then resumed being hugely profitable and irresponsible as everyone else suffered through foreclosures, massive debt and mass unemployment. In this narrative, the government, led at various points by members of both parties, did everything in its power to maintain the status quo on Wall Street, while offering primarily temporary relief and various ineffectual half-measures to everyone else. Eventually the Democrats passed some form of “financial regulation” that largely has not yet gone into effect and that will not do much to stem or reverse the financialization of our economy. (The SEC is way, way behind on implenting Dodd-Frank and seems in no great hurry to finish.) The president eventually began noting the existence of mass outrage toward the financial sector, but he did little to actually address that outrage beyond proposing a new tax bracket for millionaires.

So, based on all that, it is very hard to see what Wall Street is so mad about! But as I explained earlier today, most of these rich financial industry titans are also dumb, spoiled children. If anything, the president’s failure to treat the chicanery and fraud that led to the crisis as crimes worth prosecuting had the same effect that his failure to prosecute the architects of Bush’s torture regime had: It emboldened the wrongdoers, who are now convinced that they never did wrong. In this environment, the public’s real and justified outrage at Wall Street is wholly inexplicable to finance types, who blame it on the media and Obama’s occasional rhetorical populism. (He is making people hate bankers by pointing out that people hate bankers!)

Now, in lieu of subpoenas and indictments, we have mild criticism — Obama’s occasional off-message mentions of “fat cat bankers” or whatever — and those mild criticisms set off hysterical waves of paranoia and self-righteous fury. Because no one was hauled off in chains, the people who wreaked so much havoc think it’s actually been established that they did not do wrong.

So Obama has now not succeeded in cowing or placating Wall Street.

“Oh, just living with Mom,” I said, throwing an ironic thumbs up. I shrugged. “You know, with this economy…” Not even a full sentence, it worked as an excuse without technically being a lie. They all nodded with sympathy as if something had happened to me, and not because of me.

They’d heard I’d been in the Peace Corps and surely they pictured me suffering, knee-deep in river mud, hand-scrubbing a tattered poncho. Surely they didn’t picture me lounging on a Brazilian beach, or drinking red wine in Buenos Aires. Surely they didn’t picture my fellow volunteers and me heading to the capital at least once a month, watching dubbed American cable and feeding each other crème brûlée we got delivered to our hotel rooms, almost as a joke on poverty. Surely they didn’t suspect that I’d bought myself an air conditioner when my host mom offered to sell me hers and a horse just because it would probably be my only chance in life to have one, even if being a single woman going out in fields by herself started rumors that I was a hussy. They assumed I suffered in poverty, because suffering was supposed to be part of the fun.

But, out of sight of our host families, we gave in to the temptation to grab at the luxury within reach to break up the sweat, grisly meals and discomfort, both social and physical, that made up so much of our lives there. All you had to do was think in dollars, take out a 20 here and there from that one ATM that accessed American banks, and over two years you could deflate your savings on so many small comforts of the First World.

Even though it was my job to teach the locals about sustainability, I was leading my own unsustainable life, outspending my earnings 2-to-1, living on the edge of my credit limit and willfully ignoring the ticking of borrowed time. This is what leads to recession, on any scale.

At my high school reunion, I let the assumed victimhood ride, but at home, Mom knew better.

“You have three months,” she said. My stimulus package: 90 days of free rent, free food, unlimited pool and pool floatie raft access, as well as full-time use of her Jeep Cherokee while she drove her husband’s work truck with the 7-foot blind spot.

I slipped into the refuge of her life, but at night, lying under her seashell comforter, I felt the absence of everything I’d let myself lose. She knocked on her own guest bedroom door and came in, smiling, delighted to have her daughter on the same continent. She sat on the edge of the bed, stroking my hair. “Everything will be OK,” she said, seeing my red eyes. Her voice smoothed the hot shame, even though I had no reason to believe what she said.

The story was always that she and Dad had balanced each other out in every way, except that they were both bad with money. This was my breeding. I had lived paycheck to paycheck since I started scooping ice cream for a living at 14. In middle school, I was the one asking if anyone had 50 cents. In high school, I was the one losing the clothes I’d borrowed from friends. In college, I was the one lying in a clinic, selling my plasma for $20 of beer money.

Windfalls came at times: a tax return or a student loan check. After swearing I’d hold tight to the money this time, I never failed to let it slip through my fingers. Mom had bailed me out so many times that we put her name on my bank account so she could make deposits more quickly. Over the years, I sunk into debt with greater and greater abandon until I now found myself wearing my mom’s shoes to a temp job processing insurance forms.

Mom and I crossed paths in the kitchen while getting ready in the mornings, just like when I was in high school. “Honey, do you want a fruit cup?” she asked, packing me a lunch just this once. As I left, she handed me an insulated turquoise lunch box.

At work that day, I scraped my fruit cup with a plastic spoon and said to the other temps, one of whom was living in a homeless shelter, “You know, right now you just gotta do what you gotta do.”

I couldn’t even begin to make a plan. Plans required hope. After so many failures, failure became an all caps noun that I wore across my forehead at my second job as a bad waitress, pouring coffee for my former high school classmates out to organic brunches with their husbands and babies.

I could barely scrounge up the gas money to visit my best friends in their adult lives. They listened to my speech about digging myself out of the hole, doing the right thing this time and said, “That’s good.” When we went out to dinner, I let them pick up the check, making clear once again who was who.

Though already on hardship forbearance for my student loans, I thought the best move would be to apply to grad school. Acceptance would mean those magical student loan checks, a years-long break from paying back my undergrad loans, and, best of all, another smokescreen. You can be poor because you’re in the Peace Corps, you can be poor because of the recession, you can be poor because you’re a grad student, and no one will know that you’re poor because you’re too immature to stop yourself from getting a frappuccino when you have $7 in the bank. I’d worry about paying the debt back later, of course, once I had the great job a fine arts degree would land me.

So, instead of using my paychecks to pay back my mom, I spent them, more than $1,000, on the GRE testing costs and fees to apply for schools that would require more loans to attend. I mailed in the checks and did the approximate math, figuring they’d be OK. I let days pass without facing my bank balance. The longer I procrastinated, the more scared I became of what awaited me behind my user name and password. I held out another day. Then my debit card got declined at the gas station. I used my credit card, which I was pretty sure had at least $12 left to use. Then I went home and had to confront my computer.

Red. NSF. NSF. -$34. -$34. Balance: -$97. By the time I weighed the entire situation, I was hot all over again, panicked as if trapped somewhere, though I was only trapped inside myself.

There was only one place to turn, but the thought of asking my mom for money one more time almost made me nauseous. I had already stretched her generosity so far, who knew when it was going to snap?

When she asked how my day was, I told her what was going on, and she didn’t even make me ask.

“How about $100?” she said, just like I hoped she would.

“How about two?” I said, just to be safe.

She scrunched her brow and stared a second, as if she didn’t recognize the person in front of her.  “Don’t be a taker,” she said.

I had no facial expression in my repertoire to respond to my own mother, looking at me like that, so I just looked down.

Weeks later, I got an acceptance letter to grad school, an invitation to spend $40,000 a year living in one of the world’s most expensive cities, educating myself in the arts, paid for with interest by my future self, guaranteed to be bolstered by emergency loans from my future mom and dinners out from my future friends picking up the tab for their broke grad student buddy. The person I hated myself for being would have accepted. But by that time, I knew what a better person would do, and I knew I wanted to be a better person.

The U.S. Census placed overall poverty numbers in the United States in 2010 at 15.1 percent of the population or 46.2 million. The working poor comprise 10.5 million of that number. According to government criteria, a single individual making an annual income of $10,830 and a family of four living off $22,400 per year qualify as “poor.” It’s a stunning reality that more than 10 million Americans with jobs meet the poverty criteria.

Revised Census figures put the number of Americans living in poverty at almost 50 million. When we were writing our book late last year, nearly 14 million Americans were unemployed, and millions more were under-employed. Keep in mind, those numbers did not include those who simply gave up trying to find a job.

“The Rich and the Rest of Us” presents “12 poverty-changing ideas” for nationwide consideration. Our philosophy is rooted in the principle of “fundamental fairness.” It calls for an economic system that allows poor and working people to live above the poverty line with jobs that have real living-wage salaries.

A new system of fundamental fairness will lead to a tax system that addresses the needs of the working–class people, and not just the mega rich. The rate of inflation has outpaced the rate of wage increases. There must be an equitable system to prevent further expansion of the “working poor” and give people the opportunity to climb out of poverty with dignity.

We know this will not be an easy endeavor. But in a country where millions of families– with both parents working — are still being considered “poor,” fundamental fairness isn’t just a desired outcome, it’s a national priority.