Market Power

Just perusing the NYT today I read three articles in succession that all had to do with the power of markets to motivate people, but each article was missing in-depth analysis of what markets are and what they motivate people to do.

Before I critique the articles, you need to know something about real markets. When I say real, I’m not talking about the markets of Milton Friedman, or even Adam Smith. Whether or not we want certain markets, if demand exists the market will arise, provided the people have some money.

Often called black markets or grey markets, conservatives don’t seem to adore them. But love them or hate them, you’re going to get markets. And they’re going to make people do crazy things. Crazy like beheading the competition, and I’m not talking metaphorically. See the battle between pharmaceuticals in Mexico.

First up, the immigration law in Arizona. Let’s leave aside the facts that actual undocumented immigration has been going down, and crime has been decreasing, and that the real incentive behind the law is to “take back our country,” probably from a non-white president.

Nowhere in the article does it ask why people risk their lives to come across. They come for jobs. Next question. Why aren’t there enough jobs where they come from? Now the answers get more complex, but all related to markets, specifically the markets of international capital. We can revisit Adam Smith, who was a big fan of trade between nations (actually, states). Although Smith thought we should be trading goods, capital should remain at home. This was such a no-brainer for him, that he didn’t even think there needed to be restrictions on the flow of capital. He thought people would be constrained in their behavior by their love of country. His mistake. Instead, the power of markets trumps patriotism. You can’t begin to approach real immigration reform without looking at the entire market system, i.e. seeing what’s going on with capital flows relative to labor markets. Capital (meaning finance) seeks the greatest rate of return. Guess what. So does labor.

Second is an article that explores the tension between free health care in Haiti, and private health care. To first clear things up, we need to call a spade a spade (a saying from the Greeks). Private health care really means for-profit health care. There could be nonprofit health care, but although the author does call the US system for-profit, he claims the little “private” clinics in Haiti are analogous to our for-profit system. He also uses a little slight-of-hand by returning to calling our system “private.” There is a big difference, and they should not be conflated.

A small nonprofit clinic needs to make enough money to support its staff and overhead. A large for-profit insurance company in the US needs to make a profit for its investors. Also, please consider the incentives, which is what markets are all about. If you make money off of sick people, then the more sick people, the more money you make, which doesn’t give you any incentive to prioritize preventative medicine. Instead, it gives insurance companies a reason to fund campaigns to thwart policy that restricts fast food and cheap sucrose. (I’m not saying they do, but I wouldn’t be surprised.) The power of the market gives insurance companies reason to fight any reform.

I think you’re beginning to get the gist of how to analyze markets. It’s a bit like “follow the money.” Try it yourself on the following articles!

Editorial: Who Profits, Who Learns?

Mexican Drug Trafficking

The Pendulum Will Swing

The sale of garden gloves is about to explode in Arizona.

Why? Because Arizona is about to get what its misguided immigration policies earn for it, a dearth of workers. SB 1070 is about to go into effect, and one of the results is that undocumented workers are leaving. Businesses are closing, not because they were owned by the undocumented, but because they made money off of them. Apartments are emptying. Shopping centers are closing.

Many people, businesses, and even government agencies depend on undocumented labor. I was once riding in a car with an undocumented friend in northern Mississippi, and we passed the INS regional office (now called ICE ICE BABY). My friend said, “See that building? I helped build it. Half the workers on the site didn’t have papers.”

The exodus of workers will cause other dominos to fall. Tax revenues will go down. The budget will be harder to balance. Cuts will be made. Teachers and firemen will lose their jobs.

The first law of ecology is also the first law of policy. You can’t do just one thing. One of the kickers is that what the law was intended to fix, crime, isn’t even broken. Crime has been going down in Arizona for the last six years. SB 1070 wasn’t designed to fix an immigration problem; it was designed to win xenophobic political points.

Here’s my little extrapolation of how it’s going to play out from here. I call this, Robert’s Rule of the Pendulum. Arizona will be so strapped for tax revenue and workers who do jobs no one else either wants to do, or can do as well, that they will follow California’s lead and legalize recreational use of marijuana. Revenues will go up, and new workers will flow from the rest of the US. They will have created a truly “business-friendly” climate.

And then those nice Republicans who voted for SB 1070 can finally pull off their worn garden gloves that they bought to tend their own garden, toke a little, and then put them back on to plant a different kind of harvest.

(Buy talavera sleeping Mexican.)

Yes Virginia, there is an Upper Class

I used to do this informal poll of my classes at Northwestern University, where I would ask my students to write on a piece of paper how much their parents made, and then what class they belonged to, such as “working class,” “middle class,” or “upper class.”

What happened was students would write down “middle class,” no matter how much their parents made, even those who made more than half a million a year. Sure they might have waffled with “upper middle class,” but no one wanted to acknowledge that they were of the upper class.

Our politicians have pretended that we have no upper class. But we do. We have people so wealthy, and so careless about their wealth, that it makes normal people spit. I did some landscaping a couple of years ago for a woman from Texas, who had a big apartment in New York, and then a nice house (not a mansion, but nice, like $750,000 in Santa Fe) that I would have given my eye teeth to live in. She used it about two weeks a year.

And when she did use it she brought her dogs from Texas. And her dog-walker. Her little poochie-woochies just couldn’t live without their dog-walker! He seemed like a normal guy. Sort of like one of those Dumb-and-Dumber guys who can’t believe what a cool job he got. But this lady needed another dog, pure-bred of course, so one weekend she went to pick it up…IN BERLIN!

What is it with the dogs and the wealthy? The other egregious-wealth story I heard came from a column by Barbara Ehrenreich, about some wealthy folks she knew. They lived in L.A., and London. When they needed to commute back and forth, they would use their private jet. OK. Well, a private jet is ok, just so we can make the suckers and sell them to someone. But they had another private jet, so that they wouldn’t have to ride in their private jet with the dogs. See, they flew behind, or who knows, ahead, in their own jet.

The theoretical kicker is these are the same people who criticize welfare because it removes people’s motivation, and besides, it’s just not fair when you get a hand-out you don’t deserve. There is this café in Santa Fe called Downtown Subscription. It’s a nice café, with all the magazines and newspapers you could ever want. It’s nicknamed the “Trust-Fund Café.” It’s on the east side, where all the nice, adobe and fancy faux-adobe houses are. That’s where they live. It’s a good place to do an ethnography on people who never have had to work in their lives, and have the attitude that they deserve it. As Jim Hightower said about George Bush (or any of the current Bush orchard), “He was born on third base, stood up, looked around, and said ‘I’ve hit a triple!’”

I’m spitting.

GOP: No new ideas

I wrote on this on my blog already, but the Republicans are now admitting that they have no new ideas.  Check it out!

Secretary of Food!

Yeah Nicholas Kristof!  Check out his column at the NYT!  Finally, what I've been teaching for the last two decades makes it to the mainstream.

OP-ED COLUMNIST
Obama’s ‘Secretary of Food’?
By NICHOLAS D. KRISTOF
Published: December 11, 2008
When Barack Obama chooses his agriculture secretary, we need a bold reformer in a position renamed “secretary of food.

Markets and Cars

Economists and businessmen should get honest with us. They don’t really believe in markets, they believe in state-capitalism.

Free trade is supposed to be based on market theory. I won’t get into the complicated theory of comparative advantage by David Ricardo. See Herman Daly’s “fun” critique of that to see how delusional free trade theorists are. I’m going to stick with what I consider the most fundamental aspect of markets: no player is so large as to affect the market, be it either a seller or a buyer.

If a player is that big, then there are likely to be several big players, and you have an oligopoly. If there is no collusion, either explicit or tacit, oligopoly can quickly become monopoly. In the current crisis in automobile production, an already concentrated oligopoly will become even more centralized. Economists are saying this is necessary; how else can we compete against Toyota and Honda? One economist has proposed saving GM by selling it to Toyota. While that is not state capitalism, it is stupid. Toyota does not care about maintaining jobs in the United States. Neither does GM, but at least we can make the CEO nervous in front of Congress.

What if you really wanted actual markets in car production? You shatter the Big Three. You make them small enough so that they have to compete against each other. Remember the explosion of innovation when we shattered Ma Bell? We even have laws that say we are supposed to do this: antitrust legislation.

My students had the obvious critique to this strategy—the big international companies will destroy them! Solution: trade barriers. We don’t have to allow them to compete in our markets. This is, of course, protectionism. Evil, bad, short-sighted protectionism. It’s also how every developed country managed to develop, by protecting their industries.

But, said my class, people wouldn’t want to buy bad American cars. They’ve shown that they prefer foreign models. OK, let’s nationalize Toyota of America, and then privatize it. They make Toyotas in the US. They make Nissans in the US. We’ll just turn them into American companies, call them Smiths and Johnsons.  (Or even Rodriguezes.  Hey!  Why be xenophobic!  Japanese-Americans have been here a long time!  Let them be Toyotas!)  Just as food should be produced locally, why not produce cars locally? Our markets are large enough to easily attain the necessary economies of scale.

Paul Baran and Paul Sweezy wrote Monopoly Capital in 1966, arguing that unfettered markets inexorably lead to oligopoly and monopoly. The only way to preserve free markets is to have the state intervene. You can’t have a free market without state intervention, regulation, and institutions to oversee it. We should have learned that from the reckless advice we gave to the Soviet Union.  (By the way critics from the right, everyone gets to vote for your government, but not for corporate CEOs.)

Or, forgetaboutit! What are cars? Transportation. Rather than try to save the car, try to improve transportation, or our cities so we can walk. Paul Krugman sees our car companies as destined to fail. Thomas Friedman see our future in new technologies. Put those ideas together and create a new form of transportation that is not susceptible to monopoly.

This is the focus of Amory Lovins and the Rocky Mountain Institute. There are current technologies that can be produced locally, and should be for maximum efficiency. What has kept these advances from happening are the perverse subsidies and policies that oligopolies have lobbied for over the years. Witness the fact that the Big Three spent millions lobbying against the very policies that Congress is now shoving down their throats. This is delicious!

That is the reason this crisis is an opportunity. The great industrial behemoths are humbled and crawling to the government for a boon. Combine that with the move left to more progressive policies once universal health care is established and we have a real opportunity. This is not, as my conservative student from Texas says, “a bunch of handouts to lazy people,” but rational planning combining private with public institutions to do the right thing, and not just things that make rich people richer.

Reform and Education

In his latest column David Brooks wields the rhetorical “reform” cudgel, bashing the people who disagree with him as supporting “superficial” reforms. Nowhere in his article do you learn what he is calling reform and what he is calling superficial.

Let me help. What he is calling reform is a form of privatizing education. Charter schools and probably vouchers that don’t actually give parents and children in crappy schools a real option to choose another school, but rather subsidize those parents wealthy enough to afford private schools (see Shame of the Nation by Jonathan Kozol). While charter schools serve a wider range of students, they are more expensive and siphon funds away from the already failing larger schools.

Don’t believe that I like the current state of public schools. I am currently home-schooling my fifteen-year old because of the poor quality of the teachers at our local high school. I also taught in a private boarding school in the East that was far superior to most public schools.  (And don't think I'm too holy to not try to get my kid in a charter school.  His lottery number was too low.  I do guarantee you, though, that if he had gotten in I wouldn't be trying to motivate a hormonally charged pseudo-adult to read at home.)

But I said “most.” That’s because there are some brilliant public schools. What makes them great? They sit in wealthy neighborhoods. They get more money.

Real reform, rather than crypto-privatization, would mean funding all schools in a state equally. It is not equal opportunity to have one quality of schools for inner-city (read ghetto) students and another quality for suburban (read upper-class) students. Obama knows this. He worked in Chicago. He knows that New Trier High School in Winnetka, just north of Chicago, is a premier public school.

Brooks doesn’t tell you what he’s really talking about. It’s because he doesn’t want people to know.

Will the Real Pragmatist Please Stand Up

OK. So now I really feel like an underachiever. Not only is the president-elect younger than I am, but the apparent choice for Secretary of the Treasury was also a government major at Dartmouth, and a year behind me! My new obsession is scanning pictures of Tim Geithner and trying to visualize what he looked like almost thirty years ago. I wonder if we were in any classes together. I think I might have recognized him, and I believe that he was a geek. You know, one of those people even back then who was planning on rising to some position of power. I was just trying to figure out what career would keep me from having a mid-life crisis.

But everyone is calling him a pragmatist, not an ideologue, and the markets react by lurching upward almost 500 points. That bothers me. I’m beginning to agree with Naomi Kline: if the markets like it, it probably won’t work. Everyone seems to be thinking that what we’ve had—Bush, Clinton, Reagan—have been pragmatists. They weren’t! They were ideologues!

The best book to learn about economics is by Charles Lindblom, a political scientist who discovered political economy and wrote Politics and Markets. In it he says that the core job of all governments is to allocate resources. They might do a bad job, and give it all to corporate titans or Imelda Marcos, or they might see that the only way to resist the market’s natural tendency to create inequality is to have some mechanism of redistribution.

There are only two ways to distribute resources: markets or planning. To say that we can only use markets is ideological. To say that we can only use planning is ideological. To say that we need both is, you got it, pragmatic. What the media and right-wing pundits, and I include Larry Summers in this category, and perhaps my classmate Tim Geithner, are suggesting is that any move away from complete reliance on markets would be embracing an ideological position. They’re implying that we’re inching toward Marx. Perhaps, but inching is not embracing. Who we would be embracing are American Nobel Laureates Paul Krugman and Joseph Stiglitz, as well as Bangladeshi/Indian Nobel Laureate Amartya Sen. These three eminently pragmatic economists understand the limitations of markets. They do not endorse eradication of markets (you can never do that—see the drug trade). They endorse mixed-markets: government involvement in guiding markets and production.

We already do that, but we pretend that we don’t. However, the government is not being guided by the public, for the public good. It is being guided by multi-national corporations and finance, for the good of the markets. I don’t understand the people who don’t trust a government that you can elect, and instead trust spoiled corporate leaders that you can’t elect. That’s either some effective brainwashing or powerful witchcraft. I haven’t decided which.

Actually, I’m wrong. Believing only in the markets is not an ideology. That would be based on some theoretical reasoning. This is an unrealistic faith. It is a religion.

New Republican Ideas?

Update 11/23:  Daily Kos has a post critiquing the Republicans as  party of ideas.

I keep hearing blathering experts on teevee that the Republicans failed because they aren’t the “party of ideas” anymore. Most of the people who say this are Republicans.

It reminds me of a conversation I had a couple of years with a friend of mine who had worked over thirty years at the Fed. She had taken a class of mine on international political economy and had come to realize, I believe, that you can’t use the market to solve all problems. (A key text was Everything for Sale, by Robert Kuttner.)

She said, “The problem with the left is that their ideas are so complicated, while the right’s are so simple: Just use the market.” While that simple one-size-fits-all solution might lend itself to effective marketing, it sure doesn’t work when we’re in a economic Armageddon. Almost by definition the Republicans can’t come up with any new ideas. If they did, coming up with something other than their wonderfully simple, and simplistic, “just use the market”, they would cease to be Republicans.

Health Care and Republicans

Update #3 11/25/08:  Great diary at Daily Kos by Jason Rosenbaum giving some background on why the right wants to kill health care reform.  It is as I have said.

Update #2 11/23/08:  Huffington Post now has the ball, citing the Daily Kos and Cato, and including a new analysis published today by US News.

Update:  I was not aware of this post, but even the Cato Institute's people make the same analysis, even though they think it would be bad, evil socialism.

It is almost a truism in public policy that programs that are merit-based, like welfare, are vulnerable to being reduced. On the other hand, programs that are universal, like Social Security, are extremely popular. Once you get them, and they start benefiting you, you can’t imagine what life was like without it.

Now imagine the remaining geographic enclave of the conservative base, Appalachia. What would it mean to those rural folk to get good, universal, and cheap, health care? To be able to take their sick parents or children for care that might save their lives? It would be the end of the fear of progressive politics. Like the threats of the slippery slope of socialism that Wall Street and big business voiced during the enacting of the New Deal, when FDR enacted socialist legislation like unemployment insurance, child-labor laws, minimum wage laws, and overtime pay, the propaganda warning us against state-run health care will be forgotten. The Republican Party will gain the reputation as the party that kept the poor folk of the hollows of Appalachia from being able to see a doctor.

That’s why the Republican Party will fight like hell to keep universal health care from being enacted, not because they think it will not work, but because they know that it will.

Now just imagine if they had good schools!

The Iconic Image

UPDATE: Maureen Dowd of NYT fame just purloined my ebay idea! She even used it as her most clever closing idea! Sheesh.

I’ve been doing an informal poll with my friends and colleagues after the election about what they considered the most powerful image during the televised coverage election night. By far, the majority of those I ask come up with the same image, which was also mine. Some of them think quite long, and then come up with the image. Can you think of what it might be?

While you’re thinking, I’ll share an idea of mine about Sarah Palin’s shopping spree. If she wants to look good, and perhaps make a little coin off the whole thing, she should do what she says she is good at, and sell it off on eBay! I’m sure there are some poor rubes out in the rural confines of Real America who would pay even more than what Sarah paid for the clothes. They can wear it to the sewing bee or the barn raising, and say, “Sarah Palin wore this Escada in Ohio!”

Back to the iconic image. Figure it out yet?  The second most mentioned image was that of the two families on stage, the Obamas and the Bidens. And the first most mentioned image? Jesse Jackson weeping. It floored everybody, at least everybody who has the gene to read facial expressions. I found a Los Angeles Times blog on Jesse crying, and a lot of the comments were just snarky! (My favorite word learned during the election.) How they could think of his tears as strategic, or manipulative, just shows that they are the same people who ran down to the gun store and bought the last AK-47 on the rack. Jackson had kneeled by the dying Martin Luther King on the second floor balcony of the Lorraine Motel, in Memphis on April 4, 1968. Forty years later, Jackson stood in Grant Park and watched an African American elected president of the United States. When they make the movie of Jackon’s life, I bet it begins in Grant Park.

Note: Yet another who agrees with me, Judith Warner of the NYT.

Last Debate

My one and only observation, and it’s a critique of the moderator. Bob Schieffer asked how they were going to balance the budget.

Excuse me? I thought we were in the worst financial crisis since the great depression. And what made that depression worse was the initial attempt to not go into deficit spending. In a depression, you do not balance the budget. Barack should have called Bob to task. Keynes is back. Long live Keynes.

Oh yeah. I can’t believe that McCain said that line about “throwing money at the problem” regarding education. Just read one Jonathon Kozol book.

Update: Nobel Prize-winner Paul Krugman agrees with me. Read here.

How will McCain feel if he gets Obama killed?

Where is the Secret Service? Twice this past year I’ve been to see an Obama. First Barack when he came last winter, and most recently Michelle. On both of those occasions the Secret Service was crawling all over the place.

What does the Secret Service do when a McCain fan shouts “TERRORIST!” when McCain asks “Who is Barack Obama?” Does he chuckle and mutter, “What funny Republican fanatics,” under his breath. Or does he throw the shouter on his face? I would think that the fanatic in Sarah Palin’s crowd who shouted “KILL HIM,” or “OFF WITH HIS HEAD” (must be one of those crazy Islamic ones who like to behead on the internet) would attract serious reaction from the SS.

I would at least hope that they’re taking notes when the woman tells the interviewer for bloggerinterrupted.com her first and last name. Doesn’t this lady know that in all likelihood she’s talking about the next president of the United States? Gosh darn it, at least stick her on the no-fly list, or no-drive list, or no-get-anywhere-near-me list.

Update:

Check out the post by Charles Kearney from the Huffington Post.

Update #2:

Turns out that the Republican rhetoric was making life more dangerous for the eventual president-elect, according to the Secret Service.

Biden/Palin debate

Here are just a few observations from the debate. More cheap wine from Trader Joe’s kept me going.

First off, while initially I wanted to watch to see how well Sarah Palin would perform, the debate turned into the Joe Biden show. He’s better at this than Barack, because for the most part he omits those needless words in his sentences. They’re punchier that Barack's. He was also sincere, while Sarah was in her sportscaster mode. The strangest thing though: I think she winked at me!

(I’m only including comments that I haven’t read in other blogs.)


• OK, So Sarah is not answering the questions, but the first person to be egregiously ridiculous is Gwen Ifill, wondering why taxing people making more than $250,000 a year is not class warfare. Why is it that only poor people get accused of this, when they have been suffering from class warfare from above since Ronald Reagan was elected. Just watch the Gini coefficient which measures inequality. If inequality is increasing, then the upper classes are winning the class warfare. (Note: Gwen didn’t ask any other really bad questions after this one.)

• Sarah isn’t wearing a flag-pin. She’s wearing a flag-brooch!

• Sarah reprised the Putin language of “rearing that head,” but this time it was Fannie and Freddie “rearing that head of abuse.”

• For the question on same-sex relationships, I listened closely to Sarah’s response. I didn’t actually hear her say what she was tolerant of. She said that her home town was diverse, but if you listen closely, it seems as if the people she is tolerant of are the intolerant, i.e. the “rednecks.” (I figure I can use that non-PC term because there are a bunch of funny TV shows that are all about rednecks.)

• Sarah said all options are on the table regarding Darfur. Does that mean we can stop a genocide with nookular weapons?

• Did anyone notice the sincerity index when Gwen asked about what they would do if the president were to die? Joe appeared sincere when he said it would be a great tragedy. Sarah said the same, but it I thought she might have had her fingers crossed behind her back. I know, really harsh thing to say, but were John McCain to die in office, it most likely would be of natural causes, and I can just hear Sarah say, “Gosh darn it, I guess it’s my turn!”

• Last point. Sarah said that in Alaska she appointed people based on their qualifications, regardless of what party they belonged to. If you look closely, I think she appointed people according to how well she like them in high school.

Comments on 9/26 Debate

Disclaimer: I was drinking during the debate. It was just some cheap red wine, but it made the debate easier to take.

John McCain touts that his cost cutting would shave 18 billion off the budget, or some such “puny” number. But with the recent bandying about of 700 billion that essentially his (Republican, led by Phil Gramm, his advisor) deregulation has cost the tax payer, what he saves is piddling.

It’s smooth for Barack to laugh at McCain’s jokes. He seems to actually laugh when McCain wants people to laugh. Whereas McCain smirks when Obama attacks, as if to say, “Jeez, this guy is an idiot.”

I’ve got to credit that Naval Academy graduate who finished in the bottom 1% of his class—he has overachieved.

The mother of the dead soldier says “Don’t let my son’s death be in vain.” Why don’t we ask the mothers of those living if they want their sons and daughters to die, so that the first man to die won’t have died in vain? Good thing that Obama had a bracelet from another mother, who didn’t want any more to die. The media needs to analyze what sacrifice John McCain is making to support the war.

Does traveling to Iraq do any good for the leader of the troops? Perhaps to buck up the troops’ morale, but not to learn anything new. What McCain is talking about is field research. I’ve done field research, and in a place that wasn’t a war zone. The truth is hard to see on the ground, much less when you're wearing a flack jacket. More important than going yourself, is to find trustworthy people on the ground. Bush has not done that.

“A League of Democracies!” AHAHAHAHAHAHAHAHAHAHAHA!
Spain is a democracy. Venezuela is a democracy. Actually all of the states in Latin America except Cuba are democracies. Will they be in McCain’s league? Will they get to wear superhero costumes? Capes are out.

In the discussion on Russia, Senator Obama classified Venezuela as a rogue state. I would like to hear the facts on how Venezuela is a rogue state. Seems to me that he can’t be open-minded about Hugo Chavez, because to do so would lose those independents who have swallowed the Edward Bernays spin on Venezuela.

Gotta stop now. My typing is gettting slurrred.

Bailout? No! Nationalization!

The recent failure of two great business icons of Wall Street, Lehman Brothers and Merrill Lynch, are highlighting again the role of the government in regulating business. But I wonder if we are using the right language to describe what we are doing.

All of the news media, even the progressive ones like Democracy Now!, are describing what the US has done for AIG, the giant insurance company, as a bailout. A quick check of the definition indicates that a bailout is only helping that company, albeit with huge infusions of cash and credit.

But the process of bailing out AIG ended up with it being owned by the US government, to the tune of 80 percent of the stock. You and I, the citizens of the US, now own AIG. That’s more than bailing out, where we loan money and they pay it back. We bought it.

And that’s nationalization. That’s a word that we use when we talk about countries like Mexico taking over foreign oil companies doing business within its borders. Why don’t we call it what it is?

Because it's socialism. People think that socialism is some sort of infringement on the rights of the individual, but at its most basic, it is the state owning the means of production. What’s happening then, is we are using a basic tool of socialism to save capitalism.

And it is always thus. Mixed-market economies balance allowing markets free reign (laissez-faire) and some sort of regulation. The ultimate regulation is ownership by the state. The fact that we've resorted to nationalization indicates how badly the markets have worked.

Markets are not gods, never mind what neo-liberal economists and politicians would have you believe. They are instruments of human society, designed to serve society. When they don’t work, you opt for the other option: planning. Even before the demise of AIG—which happens to be my life insurance company—the pendulum was swinging back to planning, more commonly known as regulation. AIG, and Fannie and Freddie before it, nationalizations all, will speed up the process. Socialists always have to save the capitalists from themselves, and they never say "Thank you."

Update:  We haven't actually bought AIG yet.  The BBC points out that we have the option to purchase up to 80 percent of the company.  Check out TomDispatch f you want a good history of finance regulation in the US.

Whither the Republicans

The first day I teach a class, any class, in politics, I have to define paradigm for my students. The concept paradigm first hit the big time in a book by Thomas Kuhn in 1962, The Structure of Scientfiic Revolutions. Boiled down it means your world view. It’s the cognitive filter that you use to make sense of the world. Kuhn talks about it in terms of scientific models. Since I teach politics, I talk about the paradigms that let us make sense of the social world around us.

Paradigms are sticky. Once one is good and adhered in your head, changing your paradigm is like scraping barnacles. You can’t do it in one cocktail conversation, which is why talking about politics over martinis usually just resembles crows arguing about who gets the prairie dog road kill. Just to dislodge one, not even thinking about establishing a new one, takes at least one semester of college. Either that or parachuting into a war zone or refugee camp.

They are so sticky that most people never change theirs. It’s also why in a class of about thirty students at least two will liken me to the anti-Christ in their course evaluations. (Note to those students: I know who you are.) So how is it that they change? What might dislodge the Zeitgeist?

When asked the above, at first students offer up Reason. Sure, reason gets the ball rolling, but the reasonable often get tossed into the hoosegow. See Galileo and Socrates for pertinent examples. People just don’t give up their world-views that easily.

Death. Death is what does it. Birth helps too. The younger generation seems to recognize new truths first. Kuhn observed that great scientific observations tended to be made by younger minds. Einstein is only one of his examples. Then they get tenure and try to keep the younger minds from figuring more things out. (Movie reference: Happy Feet)

This is what is most striking about the race between McCain and Obama: older folks tend to support McCain and younger ones tend to support Obama. The actuary tables don’t only suggest that being 72 years old, McCain has a relatively high probability of passing the baton to Sarah (pitbull-not-a-pig) Palin, but that many of the people who support him will also pass on. (Of course there are exceptions: neither of my parents support McCain. Just felt I had to mention that here in case they were to read this.)

And if you were to extrapolate this tendency for the next twenty to thirty years, my prediction would be that the Republican Party will either change dramatically, just to survive, or it will whither away. Who knows, it might disappear because we pass a law that makes it illegal to lie during campaigns.

Along with age, ethnic demographics predict a Republican withering. Did you notice all those white folks at the Republican Convention? Sure there are some anomalies (to wit the “Log Cabin Republicans”—by the way, I really believe that mainstream Republicans think that they are referring to Lincoln), but trends show that white Americans will be in the minority by 2042. Combine that with the generation gap, and I’ll go on the record here saying that Republicans will be out of the game by 2030. I’ll be only 70 then so if I’m wrong, you can email me an “I told you so.”

If it does disappear, then the Democratic party would split, with economic policy being the constant, and the social issues dividing the two new parties. It also might split on green issues--one side being light green and the other dark. It could resemble the 90s under Bill Clinton, except instead of staunchly believing in free trade and the overwhelming power of the market, both parties would believe that government can do good. That makes sense. Why would anyone vote for a president if they believe a federal government is inherently inept? (See Bush.)

Sarah Watching Russia

There’s got to be some comedy writer for Saturday Night Live that can pick up on Sarah Palin’s international expertise: “They’re our next-door neighbors. And you can actually see Russia from land here in Alaska. From an island in Alaska.”

Call her bluff!! Ask her, “When have you gone to that island, to look at Russia?” Then you have a skit where Sarah takes a trip to go sit on an icy rock and look over at more icy rocks. Kind of a Waiting for Godot meets Gidget moment. We can hear her internal monologue about what Putin might be doing while she throws snowballs at the seagulls and tells the sea lions to shut up or she’s gonna shoot them.

And then a whale swallows her. Wait, that was Pinocchio. Was it my imagination, or has Sarah’s nose grown recently?

Postscript: I posted this before Kos did his at the DailyKos.

The Republican Brand

Lately I’ve been hearing how the Republicans are going to lose big this election. One explanation for why is because the Republican “brand” has been tarnished.

This is a continuation of the neo-liberal idea of using the market to guide all human activity, including organizing for political power. I claim that the Republican’s most pressing problem is that they consider the Republican Party a brand. As long as they keep doing that, their power will wane. Here’s why.

What’s a brand? It’s the reputation of something you consume. We’ve been conditioned through advertising and public pressure to believe that we are what we buy, what we drive, and what we wear. The key aspect of a brand is that it revolves only around consumption, and not production. That fact is what makes the concept of a brand a poor one for a political party.

Consumer politics is what American politics has generally degenerated into. No longer do people think of working to advance their party. Rather they sit on their couches, consume the advertising in between their favorite TV shows, occasionally lift up the phone receiver to hear the recording of a famous person trying to convince them to vote for a specific candidate. Don’t bother to do any work yourself, or produce any politics yourself, we’ll sell you your politics the same way we sell you dish-washer detergent, adult-diapers and drugs for restless-leg syndrome.

On the other hand, the trend this spring in the Democratic primaries is to use caucuses, rather than primaries. Correct me if I’m wrong, but more states have been doing this. It seemed that only Iowa used caucuses, and every four years the journalists had to explain how this quaint, old-fashioned political mechanism works.

Hillary has been criticizing the caucuses because they are biased against people who don’t have the luxury of a lot of time to spend in the afternoon or evening discussing the candidates, rather than just making a check on a ballot and pulling a lever. But those caucus participants become potential political producers, rather than simply consumers. The parties have their contact information, and can ask them to either call people before the election, or work to get out the vote. Combined with the campaign of Barack Obama tapping into the internet as an organizing tool rather than just a marketing tool, and caucuses become a mobilizing force in the general election.

This is why the Republicans are suffering. They still see politics as something to market from the top, rather than an organization that takes its cues from below. In their model, the elites know what’s best, and then sell it to the masses, or as Noam Chomsky has written, attempt to manufacture consent. In fact, it might be impossible for the Republicans to do it any other way. See Thomas Frank's book, What's the Matter With Kansas.

The opposite end of the spectrum is being suggested by Barack’s campaign, which is why so many progressives have gravitated towards it. While they might not agree completely with all of his policy suggestions, they see the opportunity for more leverage for progressive policies from the grassroots.

The transition to participatory democracy is far from complete, however. The other key component to participatory democracy, rather than consumptive democracy, is public financing of elections. Corporations tend to control the political process now because of the need of lots of money to finance campaigns, mostly through advertising on television. While I doubt that TV ads will disappear from politics in the near future, they are residue of the “brand” style of consumer democracy. As long as we see Republicans speak of their party as a brand, they are still locked into selling ideas to the people, rather than listening to the ideas of the people.

(p.s. The flag pictured above may be purchased at reclaimdemocracy.org)

The Idiot Rating

I’ve been pondering this poll where people are asked if they approve or disapprove of some political figure, say the president. The statistic you get from this poll is the approval rating. Bush, we have been told, is at an all-time low for presidents since the poll began, at around thirty percent. (That’s amazing, really, to consider that almost a third of all American still think he’s doing a good job. Who are these people? Rubes!) Actually, you can go to Real Clear Politics and find out that the average of all polls measuring whether people approve or disapprove of the job Bush is doing is 30.08% approval and 65.2% disapproval.

What has intrigued me is the use of the word “approval.” This is something that parents say about their children. Say my son blows by his allotted text messages of 200 and ends up using 5,749. (Just a hypothetical example.) What do I tell him? That he’s a f------- idiot? Not if I’m a good Dad. No, I tell him I disapprove of his lack of discipline and take his phone away for the rest of the month. When I use this approval/disapproval metric, I can measure the quality of his behavior, or his job performance as an adolescent, and still show that I love him. Our relationship is still sound. Neither one of us will disown the other, or use poison.

But why use the same metric for a president? “Mr. Bush, we think you’re doing a bad job, but we still love you.” I don’t think so. I think it’s time to be honest. We should have a poll that asks people if they think Bush is an idiot. Just imagine being approached on the street by a straight-laced poll-taker and have her ask, “Do you believe President Bush is an idiot, or not an idiot?” Some people might call this push-polling, where you are trying to plant an idea in the subject’s mind. But to counter that charge, you can have another question where you ask, “Do you believe President Bush is a genius or not a genius?”

Now we’re dealing with some effective polling that might have consequences. By disapproving of Bush’s job performance, we’re not calling into question his legitimacy, because we’re still implying that we love him. But if over half the American public think he is an idiot, then he has to deal with that—maybe take some night courses or something. Just imagine a journalist asking Bush during a press conference, “President Bush, how do you deal with the fact that 63% of the public think that you are an idiot?”

Of course the main-stream polling outfits can’t actually ask this question. But some of the more radical ones can, or perhaps John Stewart of the Daily Show. That’s whom I’m directing this post at, really. I want the Daily Show to start polling the public with questions that people can readily understand and respond to honestly. The other question I think we should ask is, “Is President Bush a liar, or not a liar.”

And to just put my money where my mouth is, on my next teaching evaluation I’m going to have a question, on a scale of 1-5, “Is the professor an idiot?”

What’s a Rube?

Let me just warn you a bit, but calling someone a rube is politically incorrect, in that it’s not a nice thing. I first heard rube when I was on spring break from college, and visited a friend’s house in Philadelphia. He introduced his father to me as “the Rube,” and then explained that it was nickname given to him by the urban sophisticates in the post office where he worked. Rube, you see, had come from rural Pennsylvania to work in the big city. A rube is short for a country bumpkin. You can fool them real easy, those bumpkins.

Hillary treats her supporters like rubes. Bush and McCain do too. They act as if they are stupid. Hillary says things like she is winning the popular vote in the primaries. A little fact-checking proves that is not so. She wants to count Florida and Michigan, when she had agreed that their votes would not count. She claims that she is being forced out of the primaries, and that has never been done before. Fact-checking again shows that Bill Clinton claimed victory against Jerry Brown before all the votes were in. She claims that she wants to hear from the entire electorate, when, obviously, she would have been ecstatic to have never had to have campaigned after Super Tuesday. But then hey, maybe she likes to spend millions of her own dollars being a tourist in places she never dreamed existed.

OK, she says these things. But the strange thing is, people, previously sane people who can see it when Bush or Cheney start slinging it, believe her. It’s when I begin to doubt my own sanity. I hold up four fingers and ask everyone how many fingers I’m holding up. The Hillary supporters squint at me and ask if it’s a trick question.

This is why Hillary’s campaign has flummoxed me. It’s not like arguing with a pro-life advocate. That person has an honestly different perspective. Hillary, on the other hand, is pretending to be stupid, and expecting everyone to believe her. Sure, you can mention assassination, because it just reminds people of a time, or date in history. Nothing else. Who would think? Sure, you can say caucuses don’t really count, because those are only the elites who have free time on their hands, not the mobilized people who will get out the vote in the general election. She says we need to cut the gas tax. Never mind that rising oil prices are probably good, and inevitable, in the long run, and that reducing the tax load instead on middle and lower income people would give them more choice in how to travel.

It’s exactly the same thing that Republicans have been doing with voter fraud, by cracking down on people who fake their identities to sway the election. Problem is, voter fraud doesn’t happen. Sure, cracking down on voter fraud keeps minorities and the poor from voting, but gosh, that wasn’t their intent!

Political fictions. That’s what they are. Everyone has to use some of them, or else you can’t get elected, at least not president. Gore used them when he disavowed papers he wrote in college with the same excuse politicians use now for early drug use: I was young and didn’t know better. Obama uses them when he placates the coal industry and nuclear power. People who don’t use political fictions, like Ralph Nader or Noam Chomsky, aren’t even invited to the cocktail parties.

But again, the strangest thing about this primary season is that more people are believing political fictions than I’ve ever seen before. It’s as if everyone wants to be a rube from the hills of Appalachia.

(Post script: One of my favorite authors, and the writer to most affect my life, is from the hills of Appalachia, Wendell Berry.)

We are not at war-we are warring

“We are at war.”

Orwell was never more right. I heard the above comment on NPR yesterday (11/9/07) during a discussion of the presidential candidates. The analyst was wrong. We are not at war, but we have entered 1984, the world of perpetual war. It might be Oceana against Eurasia today, but we could be fighting Eastasia tomorrow.

While we are not at war, we are warring. To actually be at war we have to be fighting some other nation-state. What we are doing is messing around in someone else’s civil war, which we started. Incidentally, democracy is not a panacea that delivers peace. It can actually have the counterintuitive effect of causing war. What real democracy does is empower the majority of the people. Now if only a few people have most of the wealth, and all of a sudden the poor have power, it is only rational that they try to redistribute the wealth to themselves. This is potentially socialism. The people who own the wealth hate it, and call it communism.

Democracy also has a problem if there are factions, like Kurds, Sunnis and Shiites. The federalists warned about that as we wrote our own constitution, which is why there are so many dikes in it to thwart democracy, since the most dangerous faction is the majority of the people. We laud the checks and balances in our constitution, but those checks and balances are there to keep democracy from getting out of hand, more than to check a powerful executive. Just think, most people want universal health care, but we don’t have it. Most people want to protect the environment, yet we’re the ones causing more global warming per capita. Most people want to get out of Iraq, but we’re still there. In this country, it is democracy that is being checked. Why don't citizens of the District of Columbia and Puerto Rico have voting representation in Congress?

But enough about democracy, back to war. How did we get into this civil war in Iraq? We got involved because someone committed a crime in the US. Who did it? Somebody. Not a nation-state. Just a bunch of somebodies. Most of these somebodies actually came from the Kingdom of Saudia Arabia, but they sell us a lot of oil so we can’t do anything to them. But we’ve got to look strong! We can’t just let some somebodies push us around, and kill 3,000 people. We have to attack! So we start a civil war in another country.

If someone commits a crime, you don’t call it war. What’s the difference if a foreign national commits a crime, or a citizen? Do we call it war if an Englishman steals a purse from an American? What if a Saudi shoots someone? What if an American citizen, Ronni Moffitt, is killed by Chilean operatives in Washington D.C. in Operation Condor in 1976? If Bush had been president then, that would have given us an excuse to attack Bolivia, since the president/dictator of Chile at that time was Pinochet, our guy. The Saudis are our guys.

Hence we are not at war, we are warring. How else can you tell the difference? Just leave. If a nation-state follows you home, then you’re at war. Bush and Cheney would say that we fight over there so we don’t have to fight here. It’s the same logic as the Cold War and the domino theory. And like the Cold War, we designate the enemies and make the war, even if it has nothing to do with communism, or terrorism. We also waste money and lives in Iraq (and cause the death of more than 600,000 Iraqis) that could actually make life safer over here. Instead of actually investing in security in “the homeland,” we put the names of political writers like Naomi Wolf on the No-Fly List to harass them and keep them from making democracy a reality, from enforcing the will of the people, and getting us out of Iraq.

Why "No Fiction Necessary"

I suppose my first entry into my blog should be why I would call it “No Fiction Necessary.” For many years I’ve been pointing out to students in my classes choice bits of history that are too strange to believe. Kind of like a Ripley’s Believe It or Not of goings on. But in a course I taught this Fall with G---, he forced me to wonder why I prioritized factual strange happenings over our own imaginings, the kind of thing artists and poets create.

After all, what does it matter that a bizarre little twist of life happened? It means, I think, that our expectations of what is to come might have to be shelved, and we would be more wary of what lurks around the bend, literally. Asian religions or philosophies, such as Buddhism, and translated for us by Jung, make a rather big deal of these freaky little happenstances in our lives, as if they might be a sign.

An aside on that word, “happenstance.” I was mulling language over one day after reading the Bhagavad-Gita. It says something about detaching yourself from the fruits of life, and attaching yourself to the process. I started considering the word “happy.” Hmm, I thought, for most words that have a “y” on the end the initial part of the word means something alone, like “funny” and “fun.” I looked up “hap” and discovered that it meant “good luck.” Hence, to be happy meant that you were “good-lucky.” To be happy then, meant that good luck would happen to you, which if you were either spiritual or superstitious—you choose—meant that someone was smiling down on you, or up, depending again on your perspective.

So to focus on quirky little, and sometimes big, happenstances (notice now that you have a deeper understanding of the word?), means that your life actually has meaning. Your path is not just a chaotic, statistically driven, slog. Rather, it is a magical path, full of mystery and grace.

An example is in order, I believe, for you to completely grasp this aspect of No Fiction Necessary. But actually, there are three categories of examples, illustrating three modes of the fantastic. The first is a feat that defies credibility. The second is coincidence beyond belief. The third is an ironic outcome.

To illustrate the first, the feat, I will tell you a story about my wife. Growing up in the Sierra Tarahumara of Chihuahua, Mexico, M---- lived in a house with no electricity until she was five, and no plumbing until just a few years ago. Heating was all done with wood—piñon and juniper scents wafted through her village. In her late teens, she was walking a friend of hers (nickname Nalgas de Liebre, or “hare buns,” both for her bony structure and rabbit-like sexual proclivities) to the end of the lane that led to her house, about the length of a football field. At the end, near the dirt road that wound out of town, M---- spied a tail sticking up out of the tall grass, black with a streak of white. M---- had always tried to get her brother to capture a pet skunk for her, like the litter of raccoons (mapaches) that he had trapped. He, showing good sense, had always refused. Now was her chance. Bunny-buns said there was no way she could catch it, and left for town. M----, now alone with her three-year-old son, approached the skunk, which did not flee. Bending over and gathering it in her arms, she carried it to the gate and put it gently back on the ground and laying hold of the tail, steered it down the lane to her house. Once there, she picked it up again and maneuvered it into a cage.

When M----‘s mother caught whiff of their approach, she hollered what-the-hell-do-you-think-you’re-doing! M----, with out-thrust chin, said that she was keeping a new pet. Like the skunk, M----‘s parents wilted in front of her confidence. Her father threatened to shoot it, but M---- guarded the skunk with her own body. Lest you believe that it was tame or fixed, the skunk then sprayed its new dwelling, and generally made a nuisance of itself until it died a week later, ostensibly of the same causes as the Arawak Indians and residents of New Hampshire, lack of freedom.

Do you believe it happened? I have eyewitness accounts, and the years of experience with my wife to know that it did. What does it mean? It means that there is more room to move in this world than we are taught, and that humanity’s plastic rules about what is possible, even relatively rigid ones dealing with nature, may be much more malleable than we assume.

The history of Mexico is rife with human doings that seem like one giant tall tale. Take Cortes and the conquest of Mexico. It might be the most impressive collection of audacious feats by one group of people in a relatively short span of time. Think about it, they attempted to conquer and control millions of people with a few hundred men. It is almost more amazing that they thought they could, than the actual accomplishment. We try to make sense of it by saying that the Spanish had the superior technology and the Mexica were paralyzed by their superstitions, but reading the eyewitness account by Bernal Díaz del Castillo dispels those myths. Those conquistadors were good-lucky. (I do not mean to say they were right in what they did, just that what they did was unbelievable.)

In my travels and conversations with Mexicans I have learned that these kinds of stories and adventures abound. I lamented to G--- that American storytellers and writers have a handicap when competing with Mexicans. We just don’t get a chance to experience fantastical stories growing up in Levittown suburbs. There’s a reason magical realism originated in Latin America. G--- concurred, and tossed me a nugget of a Zen koan, “They have their imaginations on the outside.”

I’m still puzzling on it. To have your imagination on the outside means that the wall that separates our dreams from reality was constructed by mimes. We modern cynics decry the possibility of true goodness in today’s world, and we stop searching for it. The path leads both ways, though. What we dream might become real, but the actual world could also turn into a nightmare. Fantastical accomplishments are not limited to the good. To wit again the conquest of Mexico.

Next post: Coincidence or Synchronicity.

First Pardner

If Hillary Clinton becomes president there will be two firsts: the first woman president, and the first president’s husband. What will we call him? First Lord, as in lords and ladies? That’s too gender oriented, but then so is First Lady. From a more gender neutral perspective, the First Spouse? Or perhaps the First Significant Other?

Or we could use a term that annoys me, First Partner. It annoys me because it makes love sound like a business arrangement. The other problem with it is that we might assume that the couple sharing the bed in the white house is a gay couple from an old cowboy movie, call him First Pardner. I would have no problem with that, but it simply wouldn’t be accurate.

Along with the conundrum of what we call that fellow hanging around the White House with nothing really to do except maybe overhaul our health care system, it would be Bill Clinton. Imagine that. Bill Clinton hanging around the White House with nothing to do. What do they say about idle hands? Just imagine what a field day the tabloids would have! If you think we have a dysfunctional press corps at the White House now, every presidential press conference would start off with questions about what Bill was up to.

Actually, it almost makes you want to vote for Hillary. Almost. She’s still the one who was on the board of WalMart. She’s still the one who recently said of relations with Iran, “All options are on the table.” Does that mean an all out nuclear strike is on the table? That’s what “all options” means to me.

And Bill strikes me as a kibitzer, a back-seat president of the worst kind. Hillary might even make him ambassador to France just to get him out of the house.

Playing Chicken in Iran

As I was reading the latest news about the Bush Administration’s current vitriolic rhetoric about Iran, I had an epiphany. I was thinking to myself, “Wow, it makes no sense, at all, to attack Iran. You’d have to be crazy!”

That’s when it hit me! I had thought exactly the same thing about Iraq, right up until we invaded. There is this great game that political scientists play called “chicken.” (Actually we don’t play it, we just watch other people play—we’re kind of voyeuristic that way.) The old-fashioned way to play is to drive two hot-rods at each other, or racing towards a cliff as fast as a lemming, and the first person to stop or swerve loses. Peculiar, isn’t it? This game, which falls into rational-choice theory, seems kind of a stupid thing to do. And the person who behaves more rationally in a larger context, loses.

So only stupid people play this game. OK, that makes sense. Bush was playing chicken, I was thinking. But still, the objective is to make the opponent swerve, and not crash. We can all see now that we crashed into Iraq. Not only did we crash there, but we’re still looking for more people to crash into!

But here’s an irony about the rational-choice theory game of chicken. To win, you have to make your opponent think you are crazy. Start screaming in tongues as you mash the accelerator. Blast Abba full volume on the radio. Stick your head out of the window and let your tongue flap in the breeze. Steve Martin on his first comedy album said that if he were mugged he immediately would wet himself. Mugger thinks, “This dude is crazy! I’m out of here!”

Which is why Ronald Reagan was brilliant. In his little game of nuclear arms escalation with the old USSR (do you ever miss it?) he started ranting about evil empires, and using lasers to blast incoming missiles from a string of satellites. They even called it Star Wars. Gorbachev thinks, “That Americanski is crazy! I’m out of here!”

So I was thinking in the run-up to Iraq that hey, Bush and Cheney must have studied some rational-choice theory at Yale and Casper Community College. Sure they were acting crazy, but that’s just how you do it! Then WHAM!

Now it’s Iran’s turn. Maybe it was always Iran’s turn. Maybe Iraq was just to let Iran know how insane we are. These guys are brilliant.