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.