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The pay packet crunch

Robert Reich, labour secretary in Clinton's administration and world-renowned economist, explains wh

American voters go to the polls in five weeks. They are deeply angry about the bailout, voted down in the House of Representatives by 228 to 205. The bill will be enacted, though. Republicans will have to sign on because the Democrats, who control Congress, don't want to take full responsibility for one of the most unpopular pieces of legislation ever introduced. Conservative Republicans hate the idea of government taking over the free market. Liberal Democrats hate the idea of Wall Street fat cats getting a free ride on the backs of hard-working taxpayers. The more the public focuses on what has gone wrong, the angrier people become.

So why can we be sure the bailout will go forward? Because no member of Congress wants to be held responsible for the meltdown of the American economy. The stock market dropped precipitously on Monday after the House failed to pass the bailout bill - the largest one-day drop in history, by value. Roughly half of all American families have some retirement money in the stock market. And even if they don't own shares of stock, an increasing number are feeling the pinch of an economy gradually grinding to a halt.

Bailout or no bailout, the US economy is going into deep recession. One of the first things Congress will have to do when it returns in January - and one of the first initiatives of the next president - will be an economic "stimulus package", designed to get the economy moving through good old-fashioned Keynesian fiscal policy. Sad to say, even an adequate stimulus package will offer only temporary relief this time, because this is not a normal downturn.

The problem lies deeper. Most Americans can no longer maintain their standard of living. Remember, Wall Street's near-meltdown originated with the bursting of the great housing bubble. That bubble had allowed millions of Americans to take money out of their homes by using their rising home values as collateral for loans. But now the bubble has burst, those homes can no longer be used as piggy banks. As a result, America's huge middle class no longer has the money it needs to buy the goods and services that it produces.

The bubble masked this basic reality: for most Americans, earnings have not kept up with the cost of living. The earnings of non-government workers who are paid by the hour - and who comprise 80 per cent of the American workforce - are lower today than they were in 2000, adjusted for inflation. They are barely higher than they were in the mid-1970s. Indeed, the income of a man in his thirties is now 12 per cent below that of a man his age three decades ago. Productivity per person has grown considerably over the past three decades, and has continued to rise even in the lacklustre recovery of this decade. However, most Americans have not reaped the benefits of those productivity gains. The benefits have gone largely to the wealthy few.

The top 1 per cent of American earners now take home about 20 per cent of total national income. In 1980, the top 1 per cent took home just 8 per cent. Inequality on this scale is bad for many reasons, but it is particularly bad for the economy. The wealthy devote a smaller percentage of their earnings to buying things than the rest of us, because, after all, they're rich. They already have most of what they want. Instead of buying, the very wealthy are more likely to invest their earnings wherever around the world they can get the highest return.

This underlying earnings problem has been masked for years as middle- and lower-income Americans found means to live beyond their earnings, but they have now run out of such coping mechanisms. The first such mechanism was to send more women into paid work. Most women streamed into the workforce in the 1970s less because new professional opportunities opened up to them than because they had to prop up family incomes. The percentage of American working mothers with school-age children has almost doubled since 1970 - to more than 70 per cent. Yet there is a limit to how many mothers can maintain paying jobs.

So Americans turned to a second way of spending beyond their hourly wages. They worked more hours. The typical American now works more each year than he or she did three decades ago. Americans became veritable workaholics, putting in 350 more hours a year than the average European, more even than the notoriously industrious Japanese.

Yet there is also a limit to how many hours Americans can put into work, so Americans turned to a third coping mechanism. They began to borrow. With housing prices rising briskly through the 1990s and even faster from 2002 to 2006, they turned their homes into piggy banks. Now, with the bursting of the housing bubble, Americans are reaching the end of their ability to borrow and lenders have reached the end of their capacity to lend.

Regardless of the Wall Street bailout, typical Americans have run out of coping mechanisms to keep up their standard of living. That means there is not enough purchasing power in the economy to buy all the goods and services it is producing. We are finally reaping the whirlwind of widening inequality and ever more concentrated wealth.

The only way to keep the economy going over the long run is to increase the real earnings of middle- and lower-middle-class Americans. The answer is not to protect jobs through trade protection. That would only drive up prices of everything purchased from abroad. Most routine jobs are being automated anyway. Nor is the answer to give tax breaks to the very wealthy and to giant corporations in the hope they will trickle down to everyone else. We have tried that and it hasn't worked. Nothing has trickled down. The Wall Street bailout may be necessary in order to keep credit markets working, but it is almost irrelevant to this larger and more important story.

The long-term answer is for Americans to invest in the productivity of working people, enabling families to afford health insurance and have access to good schools and higher education, while also rebuilding infrastructure and investing in the clean energy technologies of the future. We must also adopt progressive taxes at the federal, state and local levels. We must rebuild the American economy from the bottom up. Bailout or no bailout for Wall Street, the economy of America's Main Streets cannot be rebuilt from the top down.

Robert Reich is professor of public policy, University of California at Berkeley, former US secretary of labour, and the author, most recently, of "Supercapitalism: the Battle for Democracy in an Age of Big Business" now available in the UK from Icon

This article first appeared in the 06 October 2008 issue of the New Statesman, Perils of power

MATTHIAS SEIFARTH FOR NEW STATESMAN
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Moby: “The average American IQ is around 98”

Moby, the vegan king of chill-out pop, talks wealth, David Bowie’s hat and the average intelligence of his fellow Americans.

In January 2012, two women walking their nine dogs on the hill beneath the Hollywood sign found a man’s severed head wrapped in a plastic bag. His decomposing feet and hands were discovered nearby. First theories pointed to the work of a Mexican drug cartel, or the murderous Canadian porn actor Luka Magnotta. The story piqued the interest of the electronic dance music mogul Moby, who wrote about it in a New Statesman diary in May this year.

Today, the smell of cedar and pine hits you on the canyon path, which is hot, steep and sandy – an immediate wilderness in one of LA’s most exclusive areas. The Griffith Observatory shines like a strange white temple on the hill. Brad Pitt, a local resident, was doorstepped after the head was discovered: he lives near Moby on the streets of Los Feliz, near Griffith Park, where the only sounds are hedge strimmers and workmen’s radios. Moby’s 1920s mansion is all but obscured by Virginia creeper.

As we sit down at his kitchen table, Moby tells me that the body parts were found to belong to a 66-year-old Canadian flight attendant called Hervey Medellin. Shortly before Medellin’s disappearance, his boyfriend, Gabriel Campos-Martinez, had used a computer in the flat they shared to find an article titled, “Butchering of the human carcass for human consumption”. The head, feet and hands showed signs of having been frozen: the rest of the body was never found. He says it was one of those rare times in life where reality was more intriguing than the conspiracy theories.

Moby, of course, eats no meat. Fifteen minutes’ drive away in the hipster neighbourhood of Silver Lake, his vegan bistro, Little Pine, serves a variety of plant-based dishes, proceeds from which go to animal rights organisations including the Humane Society and Peta. His own music is never played there. We are meeting to talk about his new album – but, he says: “It’s 2016 and people neither buy nor listen to albums. And they certainly don’t listen to the 16th album made by a 51-year-old musician. I don’t care if anyone gives me money for this music or for live shows ever again. Once a record’s released, I couldn’t care less what happens with it. I liked making it, but I don’t care.”

He is currently working his way though the stages of grief outlined by the psychiatrist Elisabeth Kübler-Ross. To denial, anger, bargaining, depression and acceptance he has added a new phase: Schadenfreude. On the night of the US election, he left the house at 6pm west coast time to watch the coverage with some friends. He checked his usual round of sites on his phone: CNN, the New York Times, the Washington Post, Nate Silver’s FiveThirtyEight, the Guardian, the Huffington Post, the BBC, politico.com. He was concerned to see that no one was calling any of the early states; with Obama’s election, exit polls suggested the victory by noon. Days earlier, Moby had been predicting humanity’s “wake-up call” in the form of the destruction of Greenland or a zoonotic virus – but not this. He is softly spoken, with a quick laugh and the kind of intelligence that seems to warm him up from the inside when he talks, but today he is angry.

“It is disturbing on so many levels,” he says. “One, that we have elected an inept racist as president. Two, just seeing how dumb and delusional so many Americans are. Because really – in terms of the subsets of people who would vote for Trump – you have to be delusional, or racist, or stupid. I am so confused as to the fact that such a high percentage of Americans are either really stupid or incredibly bigoted.”

The stupidity of Americans is, he says, a matter of “anthropological curiosity” – or simply demographics. “The average American IQ is around 98,” he notes. “So that honestly means – in a vaguely non-pejorative way – that there are a lot of really, really dumb people. The nonsense that people were spouting before the election – that Trump was a good businessman, for example? This phenomenon has been particularly egregious of late: people have an almost adversarial relationship with evidence. Climate-change deniers are another example.”

As a self-described old-timey alcoholic, Richard Melville Hall (nicknamed Moby by his father in honour of his great-great-great-uncle Herman) has a pervasive interest in neurochemistry. He uses it to explain much of the past six months in Western politics. Our failing political systems – the subject, in fact, of the album he doesn’t want to talk about – are underpinned by “a kind of delusional motivation, which is basically to ignore the countless things that are actually going wrong in the world and focus all your attention on things that are arbitrary. In the United States, you have people who have perfectly good jobs in safe communities who are obsessed about Mexico, crime and unemployment. We have these quasi-Orwellian responses to stimuli, and they come from a place of fear and scarcity. Humans are still built to amass as much wealth as possible, and fight off the enemies as quickly as possible, but the only threats are the ones we generate ourselves.”

There’s a dishcloth on the table, a few magazines, a bit of a draught and Moby in a black hoodie pouring two glasses of water.

Fear and scarcity pervade American society, he says, because social policy is an extension of corporate process and “nothing is free from the cadres of professional lobbyists”. Meanwhile the ravenous news consumption that helped drive Trump reflects a human addiction to the “neurochemical jolt” of engaging with the media.

“People have a profound and almost feral attachment to that which makes them feel good in the moment,” he says. “Without thinking of long-term consequences, does their belief give them a shot of dopamine right at this second? If so, they hold on to it. Eating junk food, voting Brexit and voting for Trump.”

 

***

 

Moby is the model of an addictive personality well-practised at controlling itself. He was a fully fledged alcoholic by his early twenties: at ten, he’d been given champagne and made himself the promise, “I always want to feel this good.” Now, he cannot touch a drink, but his modern-day addiction, he says without a beat, is his phone. Every thought is pursued to extremes. He recently released an animated video for a new song, “Are You Lost In the World Like Me?”, showing a procession of grotesque, phone-addicted cartoon characters filming a girl as she throws herself off a skyscraper and hits the ground.

The house is vaguely baronial, airy and open-plan: all dark wood and furniture polish. An Annie Hall poster in the pool house; a coyote postcard on the kitchen wall.

This particular property is a result of serious downsizing: Moby has a habit of buying very big places, doing them up and then moving out. When he was still in New York, he bought a remote mountaintop retreat in Kent Cliffs, 50 miles north of Manhattan. He created a magnificent bedroom of 1,500 square feet with ten skylights – but quickly learned he could only get a decent night’s sleep when he pulled his mattress into the cupboard. He told the New York Times that, living all alone in the big house, he “felt like Orson Welles at the end of Citizen Kane”.

He moved to LA in 2010, swapped vodka for quinoa smoothies and took the keys for another large building – the Wolf’s Lair, the turreted, 1920s Gothic castle in Hollywood once inhabited by Marlon Brando, with the swimming pool historically used for porn movies and the hidden tiki bar. He bought it for $4m and sold it for $12.5m four years later – allegedly to Banksy. He rattled around in that house, too. Right on cue, he tells me: “I felt like Orson Welles at the end of Citizen Kane.”

On the one hand, these were sensible ­investments for the man who’s sold 20 million records; on the other, large impersonal spaces appealed to Moby long before he was in a position to buy them. Raised by his single mother on food stamps and welfare in Darien, Connecticut, he started his adult life squatting an abandoned lock factory, where he could ride his moped around his bedroom, piss into a bottle and read battered Star Trek paperbacks while working on early demo tapes, rather like a ragged, vegan version of the boy in the movie Big.

He was very happy in his penniless state, as he records in his memoir, Porcelain. He’d like to propose something he calls the End of Wealth – but we’ll come back to that.

In the past few years Moby has broken free from the “Beckettian purgatory of touring”. When his biggest-selling album, Play, was released in 1999, his music career was effectively “over”. Before Play, he had changed creative direction, going from progressive house to ambient to thrashy punk – to which he has just returned – and no one knew what to do with him. The only reason he hadn’t been dropped by his UK label, Mute Records, was that its owner, Daniel Miller, was “an old egalitarian socialist”.

Play sampled slave songs of the Deep South – recorded by the ethnomusicologist Alan Lomax in the 1940s – and wove them into a backdrop of cerebral chill-out. The songs of pain and emotion took on an eerie neutrality, and TV shows and ad companies came calling. He was approached by Will and Grace and Grey’s Anatomy. At that point, selling records and touring were still more lucrative than licensing a song to TV – and licensing a song to TV was still considered selling out. But Moby considers himself an ugly duckling: “If someone who was once unattractive suddenly gets asked out on loads of dates, of course they say yes a lot.” He licensed every song on Play and it became the soundtrack of the millennium.

His memoir was unusual because it concentrated on the ten-year period before he got famous. It captured his enthusiasm – and his strangeness – at its source and showed him to have a sense of humour that may have passed people by the first time round. “I’m in London! London!” he wrote. “Benny Hill, Joy Division, Peter O’Toole!” He visited the vegan café in Covent Garden.

The book is filled with money: or with the constant, practical concern of not having it. Navigating poverty is an everyday routine: he is an “alchemist” turning used beer bottles into nickels at the recycler, and thence into soya milk and oranges. In his early twenties he becomes a Christian, partly so that he can repeat the Sermon on the Mount at Bible classes in the households of Greenwich Village and “judge” the rich children.

Book two, which Faber & Faber is waiting for, is more difficult. The period of his fame and fortune in the 2000s is too much of a cliché. “Ten years ago I was entitled, narcissistic, bottoming out, alcoholic, selfish and feral. Robbie Williams has done that story, so has Ozzy and Mötley Crüe. Who wants to read that? It’s tautological.”

Instead, he has decided to write about the first ten years of his life. It will look into his relationship with his mother, who loved him but raised him in various drug dens. He was at her side when she died in 1997, but he missed her funeral, having woken late in the morning to discover that at some point in the night he must have got up and set his alarm clock three hours late. He took a taxi to the wake, worrying about the fare, and for reasons he can’t really explain, turned up cracking jokes.

He has a strange nostalgia for the kinds of friendships you have in early adulthood, when everyone is equal, “before that point when someone starts making money and they think they’ve won: they’re going to have access to a different kind of happiness”.

In 2003, when he turned 38, he was famous, wealthy and miserable. “I’ve been able to see and inhabit almost every stratum on the socioeconomic scale, from extreme poverty and obscurity to wealth and fame, and it gives me an insight into it,” he says. “Because a lot of people who experience wealth are born into it, and a lot of people who experience poverty never leave it. I can safely say that for me there has been no causal effect between increased fame and wealth and increased basic happiness and well-being.”

When Moby talks about himself, he applies many apologetic epithets: clichéd, meditating, yoga-loving, mealy-mouthed. In 2007 he developed mobygratis.com, a large online resource offering independent film-makers and film students a licence to use his music for free. If their films are commercially successful, the revenue from licence fees must go to the Humane Society. He says he wants to propose a more rational, evidence-based approach to wealth.

“We are still attached to the idea of the redistribution of wealth,” he says. “As progressive lefties, we’re all brought up to think that is a good idea. In the old days, it meant the difference between eating and not eating. Nowadays the person on $30,000 consumes twice the calories of the millionaire, and has a bigger TV and works fewer hours.

“There is an underlying assumption that if wealth were distributed more evenly then people would be happier, but there is unfortunately very little anthropological or sociological evidence to support that idea, unless there are institutions to support the basic needs of community, like food and shelter. Confusing materialism with happiness is the essence of our culture.”

While west LA is plastic surgery and gold-plated toilets, he says, his own neighbourhood is “David Lynch wearing an old T-shirt and mowing the lawn”. Among the millionaires of Los Feliz, conspicuous consumption is frowned upon. He knows several who live “incredibly austere lives. I was having tea with Jim Carrey the other day. He’s basically just giving everything away. He just realised that owning three planes was stressing him out . . .”

In his New Statesman diary, Moby said that life in LA offered him miles and miles of lavender-scented name-dropping.

“Coldplay played the Rose Bowl recent­ly,” he says. “And the Rose Bowl holds 75,000 people. It’s a struggle for me to sell 2,000. At first, I winced with a little jealousy. But then I thought, ‘If my career was at that Coldplay level, how would that actually affect my daily existence? Would it make my shoes fit better? Would it make the water pressure in my shower better?’ As long as you’ve satisfied the basic hierarchy of needs – enough to eat, clean air to breathe, bears not eating your legs – happiness is all where and how you put your attention.”

***

He goes to his kitchen cupboard and from among the colanders and measuring jugs he extracts a black velvet fedora – size seven, silk-lined, from a London company established in 1879. In green marker around the inside rim are the words “With love from David – Christmas 2005”. Bowie gave it to him over Christmas dinner that year. “It’s the hat that he wore in The Man Who Fell to Earth,” Moby says. “There’s this amazing picture of him wearing it with John Lennon and it’s clearly when he was doing a lot of cocaine.”

Moby lived on Mott Street in Little Italy and Bowie lived on Mulberry Street. “I had a little roof deck, and he had a beautiful roof terrace, and we could wave at each other.” They were neighbours and friends, worked on music together, went on tour together, had barbecues together. He says the title of Bowie’s last album, Black Star, is a reference to the 1960 Elvis Presley song of the same name “about the end of a life” (“And when a man sees his black star,/He knows his time, his time has come”).

“David had been sick for a long time,” he says. “Or ill, as you say in the UK. So, David had been ill for a long time. I was very pleased that . . . after he died, people were asking me, ‘How do you feel?’ and I’m like, ‘Actually, I’m just kind of happy that he lived as long as he did.’ Because I . . . had thought, yeah, I had thought that he was going to die a little before that. So.”

The Radiohead singer Thom Yorke lives just up the street from him in Los Angeles but Moby has never met him “as far as I know”. Apart from Bowie, he claims not to have musician friends.

“Musicians – and I’m sure you’ve encountered this many times – have a sense of self-importance that is off-putting,” he says. “It is very hard to be friends with someone who thinks that just by showing up, they’re doing something special. At the end of the day, you want to say to them, ‘You know what? You wrote a couple of good songs. Let’s put it in perspective.’”

He was born on 11 September 1965, and on his 36th birthday he watched the twin towers burning from his roof deck. He tells me that when the second plane hit and it became clear the first was no accident, he heard “the cumulative effect of ten thousand rooftops covered with people, and the weirdest scream. A scream of horror but also a scream of understanding.”

Fifteen years on, he talks about this year’s politics as a Manichaean thing. “Half the world are motivated by fear and desire to move backwards, and the other half are motivated by optimism and a desire to move forward rationally. It’s religious tolerance versus fundamentalism; it’s racism versus inclusion. I wonder if there’s a way we can make peace with that whole other half of humanity who are holding on to a non-evidence-based approach to the future. But I don’t know what it is.” He has known Hillary Clinton for two decades, was a vocal supporter of hers during the election run and released a pair of anti-Trump tracks for Dave Eggers’s music project 30 Days, 50 Songs.

He says that many celebrity Clinton backers were cautious to come out for her during the primaries “because Bernie supporters wanted to crucify you. Now Trump has united and inspired Democrats more than anything since the Vietnam War.”

The election result, he says, might just be “the equivalent of a crystal meth addict going on one last bender. Maybe this bender will finally convince Americans to stop voting for Republicans. Because they are terrible. There has always been an understanding that if everyone in America voted, there would be no Republican politicians. The reason Republicans win is that most Americans don’t vote.

“Those of us on the left who were brought up to be tolerant of people who had different opinions from us – well that’s great, ­unless the opinions are bigoted and wrong. If someone is a climate-change denier, they are wrong. If someone voted for Brexit, they are wrong. If someone voted for Trump, they are wrong. There is a lot of ambiguity in the world, but not about these things.”

The clock ticks towards 11.15am and Moby, ever punctual, is done.

“These Systems Are Failing” is out now on Little Idiot/Mute

Kate Mossman is the New Statesman's arts editor and pop critic.

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump