Saturday, February 28, 2009

American "socialism"

The New York Times:

“Americans are just genetically opposed to socialism,” said Matt Kibbe, president of FreedomWorks, a conservative advocacy group headed by Dick Armey, the former House Republican leader.

In fact, Americans, like all human beings, are just genetically opposed to being screwed. Because this can come in many different forms, and be called by many different names, it is important to be able to identify potential threats by their content, not just their label.

"Socialism," in the sense that is most commonly used in the US, usually implies government intervention in the economy. In fact, US capitalism is heavily socialized by definition; the government intervenes in the economy all the time. A major reason why Fannie Mae and Freddie Mac were required to purchase all mortgages under $400,000 is because private lending institutions wanted to do more business, rather than hold a limited number of loans. As is often the case, government intervention is advocated by influential groups to help them protect and pursue their own interests. In most societies, large economic actors tend to be the most influential.

There are no large economic actors under capitalism who maintain a principled commitment to the "free-market," or, non-government intervention in the economy. Self-interested institutions will always favor government subsidies and protections for themselves, and what is called "market-discipline" for everyone else. This amounts to a government which acts defensively on behalf of the most powerful, while preaching "personal responsibility" to the weak. This is why the government steps in immediately to bail out bankers, while simultaneously wringing its hands about doing anything for the average person, because that might be "socialism." One has influence; the other does not -- unless sufficiently organized.

This brings us to the only meaningful distinction between what is praised as "capitalism" and what is pilloried as "socialism": capitalism means socialism for the rich. Because socialism implies that public money might be used for public purposes (health care, education, infrastructure, the environment), it takes on the character of an expletive. Because capitalism, or "free-markets" or "democracy" or whatever coded language is used, refers to public money directed toward private profit, it is wrapped in an American flag and hand delivered to baby Jesus in a manger. From the perspective of wealth and power, it is a sacred thing, to be conflated with other sacred things, until the average person can't distinguish one from the other.
When it comes to Israel, Obama can't talk about race

For all its interest in speaking openly about race, the Obama administration is backing out of a UN conference on racism due to a draft resolution which characterizes Israel's illegal policies toward the Palestinians as having a racial dimension.

It's worth noting that UN conferences on racism, like UN conferences on anything, are not binding. At best, these events raise issues in a public way, and put pressure on governments to live up to their professed ideals.

But they do no compel governments to do anything. If the Obama administration does not like what, for example, the Arab states have to say about Israel, it is free to remain unpersuaded. Presumably it is this understanding that informs Obama's confidence on diplomatic talks with other nations -- though apparently not in this case.

The likely reason is that the Israeli state is so handicapped by its favorite crutch -- that criticism of the government equals anti-semitism -- that Obama has to pick his battles very carefully. Any kind of workable two-state solution is going to be extremely difficult to extract from the Israelis (though if the US stopped providing billions of dollars in military aid per year, it might prove easier -- but this is not likely to happen), so alienating their political class from the start probably seems counterproductive.

Nevertheless, it is useful for Americans to understand how US relations with Israel limit their ability to engage with the world community on important issues such as race.

Thursday, February 26, 2009

When the enemy of your enemy is not your friend

Look at how this high-profile Obama supporter makes several true statements to the horror of his corporate hosts. Note how the hosts conflate their studied conformity to the status quo with "being informed." It's terrible being burned for defending the least controversial position -- particularly when your career teeters on the valiant defense of such things. Did you hear Scarborough reads the New York Times? In that case, he must have been right about Iraq all along!*

But before we give this nifty Democrat a high-five, bear in mind that this is same guy that helped the acid-throwing women haters take over Afghanistan, because it was viewed as beneficial to America -- well, to policy makers who believed themselves to be in a protracted war with global communism -- at the time. Planes have flown into buildings in the time since, and our official position is now to drive a wedge between two branches of women hating because the Taliban portion is viewed as detrimental to America -- or, to the policy makers who believe themselves to be in a protracted war with global terrorism -- at least compared with the non-Taliban, drug gang chieftans.

And if that isn't a recipe for success then I don't know what the expression "world leader" means!

So the lesson here may be that just because someone in power says things we agree with doesn't mean they speak for us in general, or categorically deserve our support.

*The New York Times was not right about Iraqi WMDs, the original pretext for war. They got most of their information from a single, self-interested source.

Tuesday, February 24, 2009

Go to college or join a union?


"For women, joining a union makes as much sense as going to college," said John Schmitt, a Senior Economist at CEPR and the author of the study. "All else equal, joining a union raises a woman's wage as much as a full-year of college, and a union raises the chances a woman has health insurance by more than earning a four-year college degree."

What strikes me in this case is that women are more likely to have health care by demanding it from employers (something unions -- whatever their quality -- generally facilitate) than by jumping through professional hoops in order to make themselves sufficiently appealing to the boss.

A lot of the "business" of higher education is geared towards making people afraid that they don't have the skills necessary "to make it in today's economy," which is another way of saying you are inadequate by employer standards, vaguely defined. And yet here we have blue collar women who have decided their employers are inadequate by their standards -- because families need health care, among other things -- and who are organizing around shared concerns in a way that threatens the bottom line.

One can infer from this the comparative benefits of begging alone vs. fighting together.
Class war

Dean Baker:

I was just at a White House conference listening to a lot of people talking about cutting Social Security and Medicare benefits for retirees. How can the same government that hands tens of billions of dollars to Citi's shareholders and top executives cut key benefits for the retirees? Why aren't the news reports calling attention to this massive give away to some of the nation's richest people?

Coming from Dean, this is likely a rhetorical question. But in case anyone is curious, the answer is that bankers are part of a class which administers the economic wealth of the country, whereas "retirees" -- and the public at large -- are not. One can guess which of the two have more influence over politicians, and why the government rallies to the defense of one group at the expense of the other.

As far as the "news reports" -- well, who owns the news? Retirees?

It's worth bearing in mind that what people do not own, they do not control. This holds true for both resources and government.
Dictators and "democrats"

The only difference I have found between nations called "dictatorships" and nations called "democracies" is that the democracies have a mechanism for settling grievances between competing elites, whereas dictatorships do not.

A dictatorship will view any challenge as illegitimate, and murder or imprison the challengers accordingly. A democracy will permit challenges that are endorsed by some portion of its ruling class. It will not permit challenges which are not endorsed by some portion of its ruling class. Hence presidential candidates which have only popular, but not institutional, support are acknowledged to have no real chance.

Of course, this is not real democracy. It is the "democracy" of different groups within a single class, to the exclusion of other classes. It is a democracy of those who monopolize economic power, and compete -- albeit in a civilized way -- for state power.

A more accurate name for this might be "polyoligarchy." But because enlisting public support (for example, through political parties) is part of how elite groups establish their supremacy, "democracy" is an easier sell.

Sunday, February 22, 2009

Obama's housing plan

Back when housing prices were expected to go up forever, home ownership was pushed by everybody. Lenders pushed adjustable rate mortgages to get everyone through the door, knowing that the government-backed mortgage agencies, Fannie Mae and Freddie Mac, were legally obliged to buy up all mortgages under $417,000. The primary mortgage lenders made their money on commission -- and it didn't matter to banks or investors that the borrowers might not be able to pay: the ever-increasing value of homes made the whole enterprise profitable.

Suffice it to say, the scheme is no longer profitable. People who bought high-risk mortgages -- notably, on the advice of those selling them -- have since watched their home values plummet, and additionally are more likely to now be unemployed. As as result, many people can't afford their homes, and are being thrown out. The financial industry seems to favor this outcome, with notable personalities like Rick Santelli of CNBC arguing that mortgage contracts are sacred under any and all circumstances, even if this means that families are thrown into the street. "Not everybody needs to be a homeowner" is the tune that Wall Street has taught itself to sing now that there are no more royalties to be had from its predecessor.

The Obama plan has dedicated a small portion ($75 billion out of $750 billion) of the bank bailout TARP funds to create an incentive for banks to renegotiate the terms of mortgage contracts so that people can afford to pay them in light of the mostly unanticipated collapse of the entire world economy. There are still significant details missing as to how the government intends to compel lenders to renegotiate on terms that are more favorable to borrowers, but the move is a step in the right direction.
Cartoon controversy

I'm waiting for all the US newspapers which "bravely" reprinted the Muhammed-as-terrorist cartoons under the banner of "freedom of speech" to now do the same for the Obama-as-chimp illustration.

Surely if US editors aren't afraid of offending large groups of people in other countries, they shouldn't shy away from offending large groups of readers and advertisers in their own communities! Don't let those Obama supporters intimidate you! Freedom of speech must be upheld!

-- -- --

This is a good example of how racism is defended as "freedom of speech" only when the consequences take place in somebody else's community. Newspapers certainly have the right to offend whoever they want, but freedom of speech does not protect them from the economic consequences of offending their own communities. This is why newspapers do not purposely print material that is offensive merely because they can: they want to remain in business.

Friday, February 20, 2009

Why I will never fear growing old

The most successful old people are the ones that shift their interests outside of themselves throughout life. People can get away with being self-consumed when they are younger, but nothing demonstrates the bankruptcy of this path better than age, as people inevitably give up their physical advantages.

There are few things more tragic to me than the cases where those physical assets have not been replaced by other qualities. These people are left with no other way to interface with life, and end up staring blankly at TV screens, complaining about their failing bodies to whatever poor souls they might otherwise enjoy reciprocal relationships with.

It's very important to choose in advance the kind of person we want to become, bearing in mind life's constraints, rather than denying the inevitable, acting surprised and embittered when it comes. This guy offers an alternative.

-- -- --

I would add to this the observation that if we spend most of our lives trying to become people who are primarily useful to our employers, what will we have to offer each other when we are no longer employed? This is especially important to consider for those of us in industries that conflict on some level with our personal values.

Thursday, February 19, 2009

Stimulus vs. bank bailout

Someone asked me today what I thought about the stimulus package. I said I thought there needed to be some kind of stimulus package, but that this is different from the bank bailout, which is being managed by the Treasury Department. The two are frequently confused.

The stimulus package, being a product of Congress, is a mixed bag of give-aways to various constituencies, as one would expect from that process. The overall point is to encourage spending. Many economists warn that the stimulus is not big enough to adequately do this, however, given the scale of the recession.

But the real problem lies with the banking system. Banks have accumulated large quantities of bad debt that nobody knows how to value. The government's approach so far as been to let bankers prescribe their own medicine -- namely, writing enormous checks to themselves at taxpayer expense. While this has kept bank managers employed at compensation levels which they endorse, it has not led to the kind of lending activity necessary for economic recovery.

Obama's economic team, most of whom hail from Wall Street, have argued against bank nationalization (direct government takeover that would wipe out bad assets and permit wholesale restructuring ) mainly on ideological grounds that governments do not make good bankers. But that argument has become increasingly untenable in the face of continued private sector failures, with even the likes of Alan Greenspan acknowledging the likely necessity of such a move.

Tuesday, February 17, 2009

Black mystery month

So if Richard Wright was supported by the Federal Writers' Project when writing "Native Son," does this not make it a real book?
Why high-school dropouts should write for The Atlantic

Dean Baker suffers Megan McArdle on whether government jobs count as "employment."

Living proof that common sense is often the first casualty of higher education.

Monday, February 16, 2009

21st century Chavism

While the Chavez referendum victory may place too much emphasis on the importance of the Venezuelan leader, it's worth bearing in mind that it was a referendum victory. One can debate the merits of term limits; presumably, Venezuelans already have. But absent any evidence of electoral fraud, it is highly presumptuous for North Americans to claim to know what is best for any country that is not their own.

I'm sympathetic to the claim that Hugo Chavez is something of an autocrat. And yet, coming from the country that most recently distinguished itself with the reign of George Bush, this preoccupation seems misplaced. The sad truth is that every national leader is an autocrat. That is the point of having national leaders: they take upon themselves the tasks that might otherwise be administered by the people themselves.

Friday, February 13, 2009

The Invisible Sham

The Wall Street Journal:

"[I]t is not markets that have failed but governments, which did not fulfill their role of the "visible hand" -- creating and guaranteeing market rules. Weak regulation of the banking sector and extensive lending, encouraged by governments, are examples of this failure."

Western commentators are fond of saying "socialism failed," but now I think I know what they mean. If government is identified as the glue that binds the economy, then everybody is going to want a piece of the action. The problem is that ordinary people are part of "everybody" -- and they outnumber everyone else. So self-proclaimed "socialist" states have had to protect elite constituencies without the advantage of a narrative that can deflect popular energies into "safe" activities -- like boycotting government. This is why, in those countries, class antagonisms have been maintained by force, and not very successfully over the long term.

On the other hand, the market economy offers the kind of ideological cover required for the government to protect elite interests without raising the ire of the population, who are told that the government is incompetent -- so they shouldn't expect it to do anything for them; they should put their faith in "market-based solutions," which is just another name for government by, and for, the rich. When government by the rich fails -- and fails spectacularly -- the blame is inevitably placed on the government, as an independent actor, and not the rich, who were writing the very rules which precipitated disaster. See above.

Thursday, February 12, 2009

Secret admirers

Dear Fascism,

Will U Be Mine?


The Israeli electorate

Monday, February 09, 2009

Remembering good jobs

Once we realize that employment can be married to public need -- that Americans can be paid to build and maintain a sustainable, high-tech 21st century infrastructure; as well as provide the kinds of services communities require -- then the low-wage, crap benefits, hawking-of-superfluous-consumer-junk-for-the- enrichment-of-our-employers-model of "work" can appear profoundly inefficient and wasteful on many levels.

This is why Republican National Committee chairman Michael Steele is adamant that government jobs aren't really "jobs" -- they are merely "work." It is incumbent upon business to keep their monopoly on "job creation" lest people remember they can create whatever kind of good-paying jobs they want -- and towards whatever end -- on their own.

Saturday, February 07, 2009

Democrats favor shooting people from airplanes

If it is wrong for one politician to shoot wolves from an airplane, then it is wrong for another politician to shoot kids from an airplane.

I understand it is harder for Democrats to be racist against wolves, but there you have it.

Related: Bill Moyers on bombing
Something that is not incredible

Paul Krugman:

It’s as if the dismal economic failure of the last eight years never happened — yet Democrats have, incredibly, been on the defensive.

This is not incredible. Without large scale public pressure and publicly-endorsed solutions -- like what the Socialist Party embodied in the 1930's -- politicians are merely taking their cues from business, as usual. When it comes to economic matters, that is the only protocol they know. It doesn't matter that business got us into this mess in the first place; no one else is stepping up, politically, as a viable challenger. This means the same people who engineered disaster are being tapped to engineer recovery, objectionable as this may be.

While it is true there are many smart people with excellent solutions to the crisis, a handful of economists, scholars, and journalists does not a political constituency make. This is one of my central gripes with liberalism, with its emphasis on professional excellence as a route to both personal success and "progressive influence" over the society. In the end what you get are affluent smart people on NPR who expect the political class to adopt their solutions on the basis of merit, as if this is the basis of anything in Washington DC.

Just as economic policy designed by Wall Street will inevitably be policy for Wall Street, policy designed by the public is the only hope of an answer for longstanding public needs. But that requires democracy, and we are a long way from it.

Friday, February 06, 2009

Moving the island

While it may be tempting to read Republican protest over executive pay caps as just another example of Bush-inspired political incompetence, in fact I think they see no other option.

Much as Ben Linus rebuked Charles Widmore for "changing the rules," congressional Republicans flail as the very premise of government as they understand it -- to facilitate the prerogatives of business at the taxpayer's expense -- is challenged, however lamely. Because they have never known anything else, Republicans can't help but register distress, even if it makes them appear ridiculous to the rest of the population, who maintain an attitude that government intervention in the public interest is "normal."

Thursday, February 05, 2009

Higher callings

Management at my industrial gig is threatening layoffs and/or firing for anybody who does not stay in their good graces -- as narrowly interpreted by them at any given moment. In a kaleidoscope world of ever-shifting rules, the reading of tea-leaves usually brings bad news to the poor.

I have imagined several choice retorts, but this is my favorite so far: "Hey, buddy, I'm just here to make other people wealthy."

The remark satisfies two important criteria. The first is that it is true, in the scheme of things. The second is that many managers don't recognize what is true, in the scheme of things, because their rewards are organized in the other direction. So saying anything about work-life that underscores the transient value of people, fundamentally, is likely to produce cognitive dissonance in those most invested with its mission.

And that means I don't get in trouble for saying it.

Only one question remains: with or without Shrek 2 cat eyes?
Auto bailout for whom?

Tuesday, February 03, 2009

Oye Vey

A colleague of mine is excited about a news item he saw on the 700 Club which argued that the problem with the US auto industry -- versus the foreign companies in, say, Alabama -- is unions.

In fact, what the 700 Club is arguing for is national healthcare. The difference between a company like Toyota and a company like General Motors is that Japanese National Health Insurance picks up the medical and retiree tab for Toyota's workers in Japan, whereas GM has been legally and contractually obliged to do this itself. This puts US firms who employ Americans at a disadvantage with companies from other industrialized nations, who do not have the same "legacy costs."

Of course, you can always blame the people who show up for work everyday for expecting that they would have some way to survive after 30 years of creating wealth for an employer. That is easy: working people do not own news outlets. They only have unions.

Monday, February 02, 2009

Bail louts

Bank of America, in a recent meeting with business groups, noted that the Employee Free Choice Act -- the pending labor legislation that would make it easier for workers to form unions without employer interference -- "would be a de facto wage and benefit increase" which would bolster the "spending power of lower income consumers."

Or, as Home Depot co-founder, Bernie Marcus, called it, "the demise of a civilization."