Protect the Rich, Screw the Unemployed

Republicans and a few Democrats have prevented passage of an extension of unemployment benefits. The bill did not come to the floor for a vote today and 2,000,000 will lose their benefits in December. Merry Christmas.

The opponents of the extension are generally the same clamoring for the continuation of the Bush tax cuts for the rich. So let’s get this straight - a one year extension of unemployment benefits would cost $60 billion dollars of short term deficit. The Bush high-end tax cuts will cause a structural deficit of $700 billion over the next 10 years. Hmm - this somehow makes sense to a deficit hawks.

For every dollar in unemployment benefits there are two dollars pumped into the economy - more economic activity means more jobs. The unemployed will spend the money, not hoard it. One thing appears quite clear - the Bush high end tax cuts suck at job creation.

Some Congressman oppose the benefits because they claim it keeps people from looking for a job. I guess living high on the hog is easy when you get $290/week.

We have never cut off benefits when the unemployment rate was this high. The jobless rate is 9.6% - if we factor in the underemployed, the figure is closer to 17%.

How these people can sleep at night is beyond me.

Obama met with the leaders of the Party of No today and they made some progress on, you guessed it, compromising on the tax break extensions for the rich. While the President doesn’t pass legislation, he can use his bully pulpit to get the public behind what makes sense and he can twist arms in the halls of Congress to get the Democrats on board. They still have a majority in both houses.

The Unerring Market, Socialism and Other Myths

“Markets do not automatically generate trust, cooperation, or collective action for the common good.” - Tony Judt, Ill Fares the Land
 This post will discuss the last two of the necessary actions if progressives are to recapture the high ground in this debate about the role of government:
- Striking at the myths about the success of unregulated markets
- Demonstrating the role government can successfully play in the world that will be our future

Unregulated or under-regulated markets were the cause of both the Great Depression of the 1930’s and our ongoing Great Recession.  Most recently in the US the immediate causes of our economic trouble were the deregulation of the financial industry and of the housing market.

Judt points to various Thatcher-era privatizations in the UK that resulted in a total transfer of about $30 billion from the taxpaying public to stockholders and other investors and notes that there are “essential services not well served by the workings of the profit motive…transport, hospitals, schools, mails, armies, prisons, police forces, and affordable access to culture.”

Closer to home he points out the role played by Fannie Mae and Freddie Mac, private agencies with access to privileged access to government money, in the 2008 housing debacle. Contracting presents the “perhaps most telling case against privatization.” Many of the goods and services that “states seek to divest…postal services, railway networks, retirement homes, prisons… are…inherently the sort of activity that someone has to regulate - that is why they ended up in public hands in the first place.” [Judt]

After responding to the false efficiency of the “free market“ and pointing out the benefits that modern European democracies have been delivering to their people since emerging from the destruction of WWII, the next charge used to prevent political progress in the US is “but it’s socialism!” The charge is fraught with the fear that our personal freedom is at stake. The most important counterpoint to this that there is not any such fear or concern in Europe where these more enlightened social policies are actually in effect. Secondly, the European democracies have capitalist economic systems - there is no worker ownership of the means of production, which is the historical definition of socialism. In essence, the policies enacted in European democracies (so called “social democracies”) have saved capitalism (similar to what the New Deal did in the US in the 1930’s) and have made its benefits more generally available to their people.

In spite of the trend toward globalization, there will continue to be a role for nation states for the foreseeable future. Looking ahead, we need to examine what type of government policies are most likely to resolve the new challenges of the future.

Do nothing governments will only exacerbate the financial crises caused by deregulation. Do nothing governments will not be able to protect its citizens against the adverse effects of globalization. Do nothing governments and their global warming deniers will not address the coming global climate change impacts and will not develop alternative forms of energy. Do nothing governments are unable to stop the growing inequality in our country with all its attendant social ills. Do nothing governments will be unable to increase jobs creation in traditional or new areas.

I think the answer is clear. Progressive policies are the hope for the future. Obviously we will need to decide among conflicting priorities (tax breaks for the rich or unemployment benefits for the jobless, foreign wars or universal health care, early deficit reduction or increased employment). And as Judd concludes in Ill Fares the Land, “if we think we know what is wrong, we must act upon that knowledge. Philosophers, it was famously observed, have hitherto only interpreted the world in various ways; the point is to change it.”

[This concludes the posts exploring themes in Tony Judt’s Ill Fares the Land (The Penguin Press, New York, 2010). It is a great book and you should go out and get yourselves a copy.]

The Republican Threat to National Security

The Republicans have taken their obsessive obstructionism to a new low.

On what has historically been a non-controversial bipartisan process, the Republicans have taken their desire to damage our country’s President and Commander in Chief to an almost unconscionable level. The START treaty with the Russians providing for nuclear arms inspection and dismantlement could be on indefinite hold thanks to this unrelenting placing politics before the good of the nation. A two-thirds vote is needed in the Senate and the odds of getting that after the new Congress is seated is negligible.

When the leader of the minority party in the Senate states that the primary goal for the next two years will be…not fixing the unemployment problem, not helping the nation recover from the recession, not ensuring a secure old age for seniors but…limiting the President to a single term and defeating him in 2012, you know we are dealing with some deep-seated and intransigent political calculations.

Republicans now seem intent on stopping an “Obama victory” by not ratifying the START treaty negotiated with the Russians. Here’s some news for you - this is damaging to all of us. Sure you will succeed in making President Obama appear weakened on the world stage and for the remainder of his term as President be it 2 or 6 years. Why you should want to do this is beyond me - it’s your country too that is losing credibility and is being endangered.

The two primary impacts of not ratifying this treaty will be a potential souring of the relationship with Russia and the lack of inspection of the Russian nuclear weapons.

Russia has been cooperating with us in trying to deter Iran’s nuclear ambitions. Do we really want to damage this relationship at this point in time?

The danger on non-inspection is not the fear of a nuclear attack by Russia but the potential for nuclear materials to fall into the hands of terrorist or criminal groups if an inspection regime is not implemented. The US military command is completely in agreement that this treaty needs to be ratified. Advisers from previous Republican administrations strongly support it. The current Republican politically-motivated obstructionism endangers all of us.

Republicans claimed they did not want to politicize the issue by having a vote before the elections. Now that they won seats in the Senate, they want to delay until the next session of Congress, when the even more Republican votes will be needed to ratify the treaty and additional committee hearings will be necessary. The inevitable effect will be a delay until “it is too close to the Presidential elections” to take a vote.

The Democrats need to present the case for ratification now - make a full-scale assault on the Republicans’ “reasoning” and show how this obstructionism is endangering the country. Force a vote and call their bluff. If they want to go down as opposing something that all of the people charged with maintaining our security support, then let them.

Retaking the High Ground: Overcoming Fear

“We have entered an age of fear. Insecurity is once again an active ingredient of political life in Western democracies.”

-Tony Judt, Ill Fares the Land

Recapturing the high ground in this debate about the value of government will require four actions:

- Creating a new moral narrative that appeals to our best, rather than our worst, instincts

- Addressing the fears and insecurities caused by a rapidly changing world

- Striking at the myths about the success of unregulated markets

- Demonstrating the role government can successfully play in the world that will be our future

In a previous post, we discussed creation of a new moral narrative. In this post, we will present some ideas on addressing the fears caused by a rapidly changing world and why the Left is best positioned to do so.

After Judt lists several of the fears that affect us - terrorism, the uncontrollable speed of change, loss of employment, losing ground to others, losing control of our daily lives- he concludes that perhaps above all is the fear “that those in authority have also lost control… to forces beyond their reach.”

Besides the more familiar fears (immigrants, terrorism, job loss, crime), “the true sources of insecurity in decades to come will be those that most of us cannot define: …climate change…, imperial decline and its attendant ‘small wars’, …impotence in the face of distant upheavals with disruptive local impact.” [Judt]

Until these fears are addressed, they are fertile ground for demagogues to sow the seeds of confusion and division. Prejudice and intolerance can be readily stirred up. The scape-goating of races, nationalities, religion, and political beliefs has been used in the past to great effect by demagogues and, to even greater effect, by some well-known 20^th century dictators.

Progressives have much to offer to relieve these fears. When faced with the Great Depression, it was the social programs of the New Deal that led the US out of the Depression. The Great Society programs extended the social safety net in the 60‘s and beyond. This year, we have made modest steps forward in re-regulating the financial markets and in increasing access to medical care. To destroy this (privatization or diminishment of social security, cuts in Medicare and Medicaid, overturning recently enacted health care and financial reforms) would increase our insecurity. It is the Right that would demolish the social safety net and increase our insecurity. People really need to know this - economic insecurity will increase if the Right have their way - increase for all but the richest.

We have faced severe economic uncertainty in the past and have resolved it - let’s not forget all the lessons of history.

The world is changing rapidly and progressives are in the best position to deal with that change. To put it bluntly, would you rather trust a politician who doesn’t believe a government can do anything (“make government so small you can drown it in a bathtub”) or one that provides a vision for government‘s role in managing the future? Would you rather believe a global-warming denier or someone with a plan to do something about it?

There’s a darker side to the fears and insecurities. If the fears come from prejudice and intolerance, they will be very difficult to overcome.  Demagogues will never stop using divisive tactics to gain political advantage. It is easier to divide than it is to unite.

Creating a different political dialogue based on a new moral narrative (discussed in a previous post) is one way to affect this. Also, in time, the youth of today may reject the rantings of fear and prejudice. But this rejection needs to be channeled into political activism and apathy must be avoided. Governments will continue to play the major role in shaping the future - if you don’t vote, you will fail to have your voice heard as to what that future should be.

I‘ll close with a couple of quotes from Ill Fares the Land.

“…the first task is to remind ourselves of the achievements of the twentieth century, along with the likely consequences of a heedless rush to dismantle them….”

“We take for granted the institutions, legislation, services and rights that we have inherited from the great age of 20^th century reform. It is time to remind ourselves that all of these were utterly inconceivable.. [in]…1929. We are the fortunate beneficiaries of a transformation whose scale and impact was unprecedented. There is much to defend.”

- Tony Judt, Ill Fares the Land

Caving In on Bush Tax Cuts for the Rich?

The White House and some Democrats have made disturbing noises in the days since the elections about being open to a compromise on the Bush tax cuts for the rich (individuals with annual incomes above $200k or $250k for families). This would continue the three-decade trend of taking care of the richest while taking services from the rest of us. The deficit hawks will demand cuts to cover the loss of revenue. Considering that only 40% think extending the Bush tax cuts for those in this category is a good idea, what can they possibly be thinking?

My ‘best case” take on this is that Democrats are concerned that they will be unable to get an extension of the middle-class tax break through Congress after the Republicans take control of the House in January. The Republicans would have the votes to defeat, and could conceivably not introduce, any bill extending the middle-class cuts if the tax breaks for high earners are not extended. They can then claim it was the White House’s fault that the middle class lost their tax break. In this scenario, Democrats had damned well better pass the middle class tax break in the lame duck session. Compromise to Republicans over the past 2 years has generally meant “do it our way or we will obstruct you”. It is time for some backbone and leadership from the White House and Congressional Democrats.

My “cynical” take on this is that the flood of corporate money unleashed by the Supreme Court’s Citizens United decision has had the desired effect. This 5-4 decision will take its place as one of the worst blows to the democratic process in the history of the Supreme Court. Democrats realize that to win elections in the future, they will need to tap into corporate funding as well as that of the very rich. Get real…most US corporations will not support Democrats in any case (or not as much as they support Republicans) and the rich who agree with progressive causes will send their money to Democrats anyway. Basically, Democrats will not gain anything politically by supporting this extension.

Three excellent articles dealing with inequality in America have been in the press and on the web recently.  I’ve already quoted and provided the link to Nicholas Kristof’s New York Times "Banana Republic" op-ed piece.

Then in a discussion of the 2010 elections on the new deal 2.0 website, Lynn Parramore notes that “as soon as you [pass] the average household income level in the United States, which is currently around 50k per yr, you see voters trending Republican.” For those with incomes in excess of $200k, 62% voted Republican. Ms. Parramore continues: “Somehow, we have got to convince more of the affluent voters that the ever-widening gap between the rich and poor is not in their interest, no matter how uncertain the future looks. It rips communities apart. It leads to every kind of social ill and unrest...It’s ruinous to democracy and it’s even destructive to capitalism.”

Finally, in Sunday’s New York Times, Frank Rich asks the question: “Who will stand up to the superrich?” Mr. Rich, quoting President Obama, notes that the cost to the deficit for the extension of the high earner tax breaks would be $700 billion. Good point, Rich concedes, but the “bigger issue is whether the country can afford the systemic damage being done by the ever-growing income inequality between the wealthiest Americans and everyone else, whether poor, middle class or even rich.”

These quotes all express sentiments similar to those in Tony Judt’s Ill Fares the Land. We’ll continue that discussion later this week.

Retaking the High Ground

This is the third post discussing themes in Tony Judt’s 2010 book, Ill Fares the Land.
 
“…poverty - whether measured by infant mortality, life expectancy, access to medicine and regular employment or simple inability to purchase basic necessities - has increased steadily since the 1970’s in the US, the UK and every country that has modeled its economy upon their example.”

- Tony Judt, Ill Fares the Land

Progressives need to change the dialogue in America. It won’t be easy. The right-wing propaganda machine is powerful, loud and well-funded. As the mid-term elections show: you may not be able to fool all of the people all of the time but, given enough money and enough negative and untruthful attack ads, you can sure fool most of the people most of the time.

Recapturing the high ground in this debate about the value of government will require four actions:

- Creating a new moral narrative that appeals to our best, rather than our worst, instincts

- Addressing the fears and insecurities caused by a rapidly changing world

- Striking at the myths about the success of unregulated markets

- Demonstrating the role government can successfully play in the world that will be our future

We’ll discuss these in order. Creating a new moral narrative and addressing fears and insecurities are the necessary first steps. No amount of truth telling or reciting of facts will change the minds of those still in the sway of their fears.

I. Creating a new moral narrative

“Whatever their political affinities, [the great political leaders of the 20^th century] represented a political class deeply sensitive to its moral and social responsibilities.” [Judt] We’ve somehow lost that in recent decades. The failure to provide anything more than material self-interest as a goal for public policy has led to skepticism and distrust of the political process and of government‘s role.
The social question needs to be reopened in the 21^st century.  As noted in the lead quote, poverty has increased steadily in the US and UK since the 1970‘s. Judt continues: “The pathologies of inequality and poverty - crime, alcoholism, violence and mental illness - have all multiplied commensurately.” So what is to be done? What conditions make it possible and worthwhile for men and women as a whole to pursue decent lives? What must governments do to accomplish this? And how can the Left best present its vision?

Judt points to the remarkable appeal of Pope John Paul II to young people whether Catholic or not: “humans need a language in which to express their moral instincts…we need to ascribe meaning to our actions in a way that transcends them…we need a language of ends, not means.”

What is the first of these “ends“ that must be addressed? It is the reduction of inequality. “Under conditions of endemic inequality, all other desirable goals [justice, medical treatment, good education, secure employment] become hard to achieve.” [Judt] Inequality leads to a lack of social cohesion and eventually to a loss of the sense of “common purpose and mutual dependence”. These latter are the necessary conditions for politics and community. “Acting together for a common purpose is a source of enormous satisfaction.”

While there is clearly a place for some of us older folks too, Judt sees the youth of today as our best hope for reversing the three-decade trend of “inculcated self regard….The perennial desire of youth to do something ‘useful’ or ‘good’ speaks to an instinct that we have not succeeded in repressing.“ [Judt].

He concludes his chapter and I’m going to conclude this post with a quote from Adam Smith’s The Theory of Moral Sentiments. We need to indulge what Smith called ‘our benevolent instincts’ and reverse our selfish desires so that we can “…produce among mankind that harmony of sentiments and passions in which consists their whole race and propriety.”

How It All Unraveled

This is the second post in a series building on themes presented in Tony Judt’s  Ill Fares the Land (The Penguin Press, 2010).

Must be something in the air...as I was preparing this post, I ran across an excellent op-ed piece by Nicholas Kristof in the New York Times.   Here's a quote from the article,"Our Banana Republic":
“The richest 1 percent of Americans now take home almost 24 percent of income, up from almost 9 percent in 1976...Perhaps the most astounding statistic is this: From 1980 to 2005, more than four-fifths of the total increase in American incomes went to the richest 1 percent. “

- Nicholas Kristof, New York Times, Nov 7, 2010

Inequality is damaging to a democracy and to the well-being of its citizens. It results in social immobility, health problems, crime, and mental illness. Unfortunately, the moral imperative to correct the injustices resulting from this inequality has been successfully drummed out of the public conversation.

It was not always like this. “As recently as the 1970’s, the idea that the point of life was to get rich and that governments existed to facilitate this would have been ridiculed.” (Judt) From the decade of the Great Depression through the decades following the Second World War, inequality in income and opportunity was reduced in America through successful government programs such as Social Security, the GI Bill, Medicaid, and Medicare.

What we’ve witnessed since the 1980's (the Thatcher/Reagan years), however, has been a massive accumulation of wealth by the richest of us combined with the privatization and diminishment of public goods and social services for the rest of us .

Over the years, the Right’s propaganda machine, funded by millionaires and billionaires and finding mouthpieces in Republican politicians, has championed the myth of an unregulated market and the worship of the private sector - making them the very definition of freedom.

The argument against regulation is, in itself, laughable and demonstrably false given the Great Depression and more recently the Great Recession. But frame this argument in terms of individual freedom, build it by playing the family values card, and cement it in place by tapping into our fears and prejudices - voilà , you win elections.

In his book, Tony Judt presents examples of the inefficiency of privatizing public goods and social services. He notes that one effect of the disintegration of the public sector is the “increased difficulty in understanding what we have in common with others“.  When “people are encouraged to maximize self-interest and self-advancement, the grounds for altruism and even good behavior become obscured.”

Community, trust and common purpose are essential to sustaining institutions that are for the common good (public schools, health care, transportation systems, etc.) Once self-interest has been made paramount, there is no surer way to destroy a feeling of common purpose and community than to stoke fears and insecurities into fires of prejudice and hate of The Other. Whether this be done deliberately or knowingly really doesn’t matter. The effect is the same. We no longer want to support institutions or programs that help these Others.

When freedom becomes synonymous only with the freedom to make money, when community organizing is mocked as irrelevant, when people are encouraged to find another church if the social Gospel is preached, we can start to realize how badly we have lost our way.

Until next time, here are a couple of thoughts…

Bumper sticker: “Greed and Intolerance Are Not Family Values”

Tony Judt, Ill Fares the Land: “Why are we so sure …progressive taxation and collective ownership of public goods are intolerable restrictions on our liberty; whereas…tapped telephones and expensive foreign wars are acceptable burdens for a free people to bear?”

Too much government?

What do our friends on the right mean when they say there’s “too much government”?

Is it that they want to keep as much as they can of what they earn? I’m sure we all want this. But, let's face it, compared to other industrially-advanced democracies, Americans pay a lower percentage of their income in taxes than citizens of almost any other country.

Perhaps part of the answer is that the Right hate being taxed for things that they don’t see as directly benefiting them or people like them. If this is so, we have lost the sense of common purpose that is at the heart of citizenship in a democracy.

Perhaps another part of the answer is that over the past 30 years or so, we have learned to place material self-interest above all else.

Perhaps another part of the answer is that we have been brain-washed into thinking that an unregulated (or lightly regulated) Market will mean prosperity for all. Well, it certainly means more profit for corporations but... The 2008 Crash resoundingly proved that this not necessarily the case for all of society.

We live in an age of insecurity and insecurity breeds fear. Some will stroke these fears to divide us and to gain political power. We needn’t let them.  It is time for progressives to retake the high ground in this debate. It will be a difficult and long-term effort. But, after we are done licking our wounds from the mid-term elections, we should stop cowering in the shadows, reframe the debate and articulate a truer vision of what America can be.

A great starting point for the discussion is Tony Judt’s “Ill Fares the Land” (The Penguin Press, 2010). If you haven’t already read it, go out and buy a copy. This excellent book describes how we got to where we are now (income inequality, the growing gap between the rich and the rest), the effects of inequality (it can be correlated against social immobility, health problems, crime, and mental illness) and what can be done about it.

In a clear and understandable way, Judt also discusses the current state of social democracies, contrasts Keynes and Hayek (the intellectual godfather of the conservative “Chicago School”), describes how “Great Societies” were built from the end of WWII through the ‘70’s and how they have been unraveled over the past 30 years most notably in the US and the UK.

The next few postings will examine and develop the concepts presented in Tony Judt’s book. Stay tuned and join in the discussion.

Anger and Lies in the Mid-terms

As expected, Republicans have taken over the House of Representatives and greatly reduced the Democratic majority in the Senate. It was a bloodbath.

By early Wednesday, Republicans had netted 60 formerly Democratic seats in the House and led in 4 more. Excluding Patty Murray’s (D-WA) seat, which is still too close to call, the Democrats lost a net of 6 Senate seats. So the total loss in Congress is about 70 seats. In the 2010 midterm, the Democrats have lost more than all the gains they made in the 2006 and 2008 elections (66 seats). 

For comparison, Democrats lost 62 seats in the 1994 "Contract for America" mid-terms.  You'd have to go back to 1938 for a mid-term loss larger than this one.  In that year, FDR's Democrats lost 79 Congressional seats. 

In two years’ time, Democrats have used up their political capital. They spent it on modest changes to health care (i.e., no single payer like most advanced democracies) and to the financial system and to saving the US auto industry. They enacted a stimulus package that was able to save 3 million jobs and helped keep the Great Recession of 2008 from turning into the Great Depression of 2009.

It was not enough and people were angry.

Democrats did not adequately respond to the misleading and downright false statements thrown out by Republicans and they paid for it.   The Big Lie (Harold Evans, The Daily Beast, Nov 1) is “that the aggressive fiscal and monetary measures by which Obama defended America in the Great Recession were a waste of money, a notorious example of the Democratic appetite for throwing money at any problem.” That is, “the stimulus didn’t work”. There were a lot of other lies and misrepresentation around health care and TARP and financial reform but this is the one that worked best for the Republicans in the mid-terms.

Should Obama have worked harder on jobs and less on health care in the first year? It would have made sense politically but let’s face it - extending health care to more than 30 million Americans is a major accomplishment.
Could he have pushed through a stronger stimulus? He might have if he seized the initiative and explained in simple terms why deficit spending is important in overcoming a recession.

The Democrats tried to do what was best for the country in the long run and ended up suffering for it politically.  Rachel Maddow had an excellent segment that summarizes the major accomplishments of the 111^th Congress with a Democratic President and Democratically-controlled House and Senate.

As a sidebar, the Blue Dogs who sometimes acted and voted like Republicans took it on the chin. They could have enacted the stronger measures that progressives were championing and lost anyway. According to an analysis by The Huffington Post, 22 of the 46 Blue Dogs up for re-election went down on Tuesday.
See also: http://en.wikipedia.org/wiki/United_States_midterm_election

Vision

The Left Bank Cafe is a discussion place for cultural and political topics, for current events, and the occasional random musing.