Wednesday, November 03, 2010

What To Think About The Midterms

2010 Midterms

A somewhat larger than usual mid-term adjustment. That will be the conventional wisdom.

In 2008, the conventional wisdom was “paradigm shift,,” “transformative,” etc. In hindsight, the conventional wisdom seems to have missed the mark – widely.

What to think about 2010? First, I suspect that a year from now, the President will be under siege from the various investigations and impeachment hearings that will be launched in the House. The repeal of DADT will be a bitter pipe-dream. The government will be forced to cease any number of critical services, from food inspection to financial regulation. Veterans will be under attack from the government they were once part of. Cap-and-trade will be the Topic That Must Not Be Named, Let Alone Discussed.

Pretty much partisan politics as usual.

Two things worry me the most. The first is that the Dems continue to struggle with leadership. They are focused on good policy (which is why I like them), but they do not believe that leading the people is part of their job. They are tragically wrong. The GOP understands that many voters want someone who seems certain, even passionate, about their beliefs. They further understand that all the passion in the world won’t matter unless a voter feels it, so they shout and bang the table and make outlandish accusations, etc., all of which is loud enough to get through to persuadable voters.

The Dems sound like a round-table discussion on NPR. Their passion is no doubt real, but that authenticity lulls them into thinking that they just need to be themselves for voters to understand how committed they are.

False. Too many voters’ take-away from the Dems is “politics as usual,” a certain sense of entitlement, and a lack of commitment to what matters most.

There’s no doubt that the Dems suffer from a kind of patronizing attitude, and that this attitude is extremely off-putting. Dems also don’t understand the basics of mass communication, often choosing worthy candidates in terms of their positions, work ethic, etc., but who are not telegenic or likable. Nor do they understand basic negotiating techniques, like starting with a position more extreme than what they would ultimately accept. The GOP uses their base for this purpose very effectively, while the Dems seem ashamed of their base. The Dems will need to address these concerns before they can expect a wide embrace of their platform.

Besides the continuing failure of the Dems to understand the need to be seen as fighters, the other concern coming out of 2010 is the impact of corporate cash. For Karl Rove & Co., this was a warm-up. And the experiment is continuing – to qualify for their tax-free status, more than half their funds are supposed to be spent on non-electoral activity, which means they are planning a big ad blitz in the coming months to overturn health care reform and financial regulation. In terms of 2012, Rove will have a compelling argument that investing with him will return good dividends, and I’d be surprised if the GOP didn’t have more or less unlimited money in 2012.

We are on the verge of a new, corporate era of politics. The rules for 2012 will be different. And the corporate interests now believe (correctly) that their ability to spend will bring them subservient pols.

My guess is that the GOP will increase their edge in the House, take the Senate, and almost get the White House in 2012, provided they are running against Obama. If he has been forced from office (or, God forbid, worse), the GOP will likely have no trouble with either Biden or whoever the Dems end up fielding.

It is always disturbing to see otherwise sensible people falling for the Big Con that is today’s GOP. I don’t see any reason to think this basic dynamic is going to be changing any time soon. The march of the United States of America towards third world status will continue with renewed vigor. And the shame is those most responsible will be cheered as deficit-cutting, tax-cutting heroes, and not as simply sadistic bastards, which is what far too many of them really are.

Monday, October 18, 2010

Lincoln Saw It

Future President Abraham Lincoln in his famous 1858 speech at the Cooper Union articulated the problem he saw of dealing with the slave-owning interests, who could not stop accusing him and his party of undermining their rights to own slaves, notwithstanding a complete lack of evidence:

The question recurs, what will satisfy them? Simply this: We must not only let them alone, but we must somehow, convince them that we do let them alone. This, we know by experience, is no easy task. We have been so trying to convince them from the very beginning of our organization, but with no success. In all our platforms and speeches we have constantly protested our purpose to let them alone; but this has had no tendency to convince them. Alike unavailing to convince them, is the fact that they have never detected a man of us in any attempt to disturb them.


This applies today with the same force to so-called conservatives, who constantly complain of government spending and the need for "limited government." They cannot stop damning Democrats, who they falsely accuse of radicalism. Future President Lincoln saw through this non-sense as well:

But you say you are conservative - eminently conservative - while we are revolutionary, destructive, or something of the sort. What is conservatism? Is it not adherence to the old and tried, against the new and untried? We stick to, contend for, the identical old policy on the point in controversy which was adopted by "our fathers who framed the Government under which we live;" while you with one accord reject, and scout, and spit upon that old policy, and insist upon substituting something new. True, you disagree among yourselves as to what that substitute shall be. You are divided on new propositions and plans, but you are unanimous in rejecting and denouncing the old policy of the fathers. Some of you are for reviving the foreign slave trade; some for a Congressional Slave-Code for the Territories; some for Congress forbidding the Territories to prohibit Slavery within their limits; some for maintaining Slavery in the Territories through the judiciary; some for the "gur-reat pur-rinciple" that "if one man would enslave another, no third man should object," fantastically called "Popular Sovereignty;" but never a man among you is in favor of federal prohibition of slavery in federal territories, according to the practice of "our fathers who framed the Government under which we live." Not one of all your various plans can show a precedent or an advocate in the century within which our Government originated. Consider, then, whether your claim of conservatism for yourselves, and your charge or destructiveness against us, are based on the most clear and stable foundations.



As usual, the so-called Conservatives suffer from a mental tic that makes them accuse others of their own sins. Future President Lincoln had a final word for those who claimed that the issue was raging across the land, and that such raging was evidence of the wrongheadedness of Lincoln's claim that he only wanted to preserve the status quo -- the very essence of the word "conservativism:"

Again, you say we have made the slavery question more prominent than it formerly was. We deny it. We admit that it is more prominent, but we deny that we made it so. It was not we, but you, who discarded the old policy of the fathers. We resisted, and still resist, your innovation; and thence comes the greater prominence of the question. Would you have that question reduced to its former proportions? Go back to that old policy. What has been will be again, under the same conditions. If you would have the peace of the old times, readopt the precepts and policy of the old times.


Everything old is new again, except of course that history never repeats itself exactly the same way twice. And many Americans think we are simply going through the usual partisan back and forth. I submit that the half-century long failure of the left to develop and execute a push-back strategy is no more small thing, and that their timidity and inaction has already opened the door to destructive forces they are now powerless to pacify absent a great cataclysm.

Tuesday, June 15, 2010

"If the next year is going to bring exceptional growth," [UCLA Anderson Forecast director Edward] Leamer writes, "consumers will need to express their optimism in the way that really counts — buying homes and cars. And that is not going to happen if businesses continue to express their pessimism in the way that really counts — by not hiring workers."

The result is an economic Catch-22.


That, in a nutshell, is the scenario that I believe has been slowly unfolding for some time. The thing that people don't seem to realize is that the Catch-22 is not neutral, i.e., it doesn't represent treading water. It is downward. You can reverse the polarity and get the same result: if businesses keep laying people off, people won't have money to spend, so businesses will turn to lay-offs.

Corporation have relied on job-destruction to cover-up a decades long failure to innovate and create the future. Throwing almost all our R&D money into war research for the last 70 years hasn't helped either.

This only ends when the government opens employment offices in every city and gives everyone who wants one a job that puts a roof over their heads and 3 squares a day. The armed forces isn't nearly enough to do it, at least in the absence of an actual conflagration, which is looking more and more likely by the day.

On the upside, the Mets swept a road series.

Wednesday, April 07, 2010

The Long War

In the press of daily business, it’s easy to forget that the big picture matters more. (Yogi: “In the long run, we’ll all be dead.”) But in the long run, the most powerful social forces will have their way. (“The arc of history is long, but bends towards freedom:” MLK Jr.)

I don’t mean “Long War” in stupid sense favored by Bush-ites: a turd-polisher to cover the inanity of America’s never-ending wars. I mean it in the sense of the long war to obtain social justice. (WARNING: GLENN BECK DISAPPROVES! A LOT! “SOCIAL JUSTICE CODE FOR …SOCIAL JUSTICE! HOW EVIL!)

If you want to know what the future of our society is, take a look way back into history. Many of our social conventions – the role of “women” in society (in quotes because most of the claptrap about “women” is about rich white women), the sudden reverence of blasto-cyst Americans (anti-abortion), the “problem” of unemployment, etc. – are modern constructs. Early humans struggling to survive didn’t have much of a concern for “creating jobs.”

Many of our current social problems are traceable to the rise of modern conservatism. The key idea of that movement is not only that private enterprise is the only legitimate social structure, but that the government is the enemy of private enterprise and therefore legitimate social order. Government is bad because it re-distributes money from the wealthy to everybody else, both directly by taxation and indirectly by making it harder to become rich (for example, by outlawing child labor or limiting pollution). In fact, it’s the government-hatred that really defines modern conservatism, as veneration of the wealthy can occur without it (think “Lifestyles of the Rich & Famous,” or People Magazine).

Failing schools. Failure to invest in R&D. Corporatism run amok. Lack of health care. Global warming. World poverty. Lack of water. The list of our ills goes on and on, and in most cases, can be traced back to a lack of adequate government action/investment by those who have the resources. (It’s a phenomenon that I’ve been thinking of “passionate devotion to wrong ideas.”) A strong government, especially a democratic government, is the best hope that non-wealthy people have to fight the rich and powerful.

The President is in the news today because he is thinking of tackling the Israel-Palestinian crisis directly. (Would that problem be so intractable if wealthy Arabs contributed to the Palestinians’ relief at something like adequate levels?) And here’s the “Long War” part: the Middle East situation is (obviously) not sustainable. A hundred years from now – or two hundred, or a thousand – the fights of today will be forgotten and a new set of issues will be thought to be important. Some kind of settlement – equilibrium – will be reached, the only question is how, when, and what kind. (The future’s coming – no way to stop it!) Will a nuclear bomb obliterating Tel Avis kick off a conflagration that will consume millions of lives for years and years? Will a popular revolution in Iran lead to a new Middle East leader who lays the groundwork for a cooperative diplomatic union that ushers in an era of peace? Will the Americans and Europeans force their clients to accept a deal that the clients themselves eventually come to see as the end of their enmity? Of course, the one thing I can say for sure is that factors that we currently aren’t considering or seeing (“known unknowns” – D. Rumsfeld) will play a major role in events, but that in the long-run, the unsustainable will not, in fact, be sustained.

The rich exploit the poor, the powerful the weak. It’s been true forever, and ain’t going to change any time soon. However. However…there’s a certain back-and-forth, and over the long haul, the poor and the weak are doing better and better. The long arc of history favors the just, no doubt. The question for our public policy makers is what are the best ways forward. Should we let Iran be bombed by Israel? Should the government raise tax rates? Should the US government pledge to re-build Haiti? The actual outcomes of many of today’s important debates is a foregone conclusion. Over the long-haul, the poor will be raised up (a bit), the greatest injustices will be adjusted, etc. But getting there can be hard or easy, take forever or just a week, be destructive or constructive – in short, the means are how we will be judged. We All Know(sm) what the ends are.

Thursday, March 25, 2010

Not Worried? Read This

Despite flat denials earlier this month, the RNC's Young Eagles will be holding an April fundraiser at the headquarters of Blackwater in Moyock, North Carolina.


GOP + Blackwater = Not good, not good at all.

Friday, February 26, 2010

HCR Summit

OK, apparently none of you know What To Think(tm) about the health care summit, so I will tell you.

You're welcome.

1. The biggest breakthrough was to bring Republican opposition down to earth. Any notion that the Democratic approach is illegitimate, un-Patriotic, etc., was absent, and the lingering effects of this event will make it just a bit harder fro the GOP to continue down that path. The President ("I like calling you that") made them sit up and behave, and made them spit out their stupid ideas in a way that they couldn't be ignored.

2. This was the next step in creating the fissure that will ultimately sever the crazy out of the GOP. For some of those GOPers, like Coburn, for example, there was simply too much temptation to participate in the substance, which means one cannot pretend that the entire undertaking is bogus. See #1.

3. The President modelled how to both confront these guys and stay civil. Several Dems were already pretty solid on this (Clyburn comes first to mind), but many of them got a chance to show that they too could act like grown-ups.

4. It would be pretty hard for any fair-minded viewer of the event to conclude that the GOP was serious in its thinking, or that the Dems hadn't thought pretty hard about their proposal.

5. This event, together with the one in Baltimore, will be remembered for being a sort of watershed for both the Dems and the GOP.

6. Importantly, the GOP was without one its main tactics: shouting down those who would show you to be a liar. The President felt comfortable speaking over fairly vociferous GOPers when he felt that had gone too far. I think this will give a lot of other Dems the courage to do the same, with the effect that their voices won't be drowned out so easily or so often.

7. The event ensures the passage of HCR, and for that matter much else.

8. By staking everything on their nutty worldview, the GOP bet the farm and lost. If they cannot persuade enough voters that government action inherently wrong, they've got nothin.

9. Anyone watching the event would have to conclude that a fair portion of the GOP's senior-most leaders are venal and not bright.

10. Speaking of not bright, how 'bout that Chris Matthews? Even next to dim-witted Chuck Todd he STILL seems dumb.

That is all.

This is the Problem.

This is why we're not just going to head out of the woods and be OK. So many years of job losses, in a society already weak in the nest-egg department, is going to have consequences.

Freddie Mac reported that the rate of serious delinquencies - at least 90 days behind - for conventional loans in its single-family guarantee business increased to 4.03% in January 2010, up from 3.87% in December - and up from 1.98% in January 2009.


There's another major wave of economic decline heading our way, although none of our leaders appear ready to acknowledge what is fairly obvious.

Monday, February 22, 2010

The Tide is Turning

The under-appreciated Steve Benen notes that the fissures separating the crazy-right from mainstream politics are leading to isolation:

The remarks were a further reminder of the isolated nature of the Cheney wing -- the dominant wing -- of the Republican Party. The Obama administration's positions are enjoying the support of Powell, Gen. Petraeus, Adm. Mullen, the Pentagon, and national security experts from across the spectrum.


A lot of people on the left are despairing that Dems seem so weak, the right seems to own the media narrative, and we are all hopelessly doomed. And if this particular movie were to roll credits right now, it would surely be so. But this ain't the last reel in the film...

David Axelrod noted to a reporter after a big victory that "you guys" -- meaning his former profession of political reporter -- are always looking backward. You're sitting in the back of the pick-up looking at where we've been. Those who are actually driving the truck -- the candidate and his team -- are looking forward, always forward.

From where I sit, the trivialization of the crazy-right, long thought to be absolutely inevitable, is well and truly underway (apologies to John Cleese). An important step in the process is to have a series of issues that they embrace, but are not embraced by those in the mainstream.

Here comes Colin Powell. (In my mind, he is a sad and mostly pathetic creature, but is a card-carrying member of the mainstream elite.) He says that the claim that the Obama administration is making us less safe is not his view. He comes as close as any card-carrier ever will to saying the claim is nuts.

The idea that we need to start over on health care, or that it is a government take-over, is likewise finding less and less traction in the mainstream. Some sort of health care financing reform seems both desirable and inevitable. So, HCR is another brick in the wall.

The idea that the stimulus was a pork-barrel wasteland that did nothing for the economy is likewise now firmly rejected. I/m sure you can come up with more examples.

The point of all of this is that the steps necessary to dismiss these nuts for a good long time are now being taken. Looking forward, Axelrod-like, it seems clear that the President will pass some sort of HCR, and that some group of non-crazies Republicans will join him. If not, that will lead to the demise of these GOPers. HCR is the thin edge of the knife: those that want to be part of relevant politics in the next half decade or more will have to find a way to appear to be on the side of HCR, while those who go down fighting it will, well, just go down -- to oblivion.

Dems seem unable to imagine a future in which they win. I think the President sees it, and that's why he's not projecting defeatism.

It seems to me the future will be the result of a new wave of pols on the left and right. On the right, lack of sociopathy will become the norm, once again, and restraint, caution, reluctance to accept change, etc., will return as the positive forces society needs. On the left, defeatism and fear will be shown the door, and the new pols will embrace the electorate's growing appetite for change.

Right now, Obama is the leader of BOTH groups. At one point, he may end up on one side or the other. (I'd guess he'd be a more center-right than center-left.) The President is trying to preserve a space for non-insane GOPers, and is also trying to buck up those of his party-members who would really rather just quit.

Is is written in stone that Obama can't yet succeed? Aren't there enough sentient voters left that will reject the crazy and embrace meaningful change? My guess is that the electorate is ahead of the old-school pols and that a majority is way past ready for change - real change, and that they will end up getting it, at long last.

That concludes today's screed.

Monday, February 15, 2010

Here's Someone Who "Gets It"

Here's an excerpt of a long-ish piece by one L. Randall Wray that finally gets to the heart of my idea about jobs - that the private sector's failure to meet society's needs for employment is not fix-able via half-measures like modest tax incentives:

But what I am advocating is something both broader and permanent: a universal jobs program available through the thick and thin of the business cycle. The federal government would ensure a job offer to anyone ready and willing to work, at the established program compensation level, including wages and benefits package. To make matters simple, the program wage could be set at the current minimum wage level, and then adjusted periodically as the minimum wage is raised. The usual benefits would be provided, including vacation and sick leave, and contributions to Social Security.

Note that the program compensation package would set the minimum standard that other (private and public) employers would have to meet. In this way, public policy would effectively establish the basic wage and benefits permitted in our nation--with benefits enhanced as our capacity to provide them increases. I do not imagine that determining the level of compensation will be easy; however, a public debate that brings into the open matters concerning the minimum living standard our nation should provide to its workers is not only necessary but also would be healthy.


Once our friends on the right (and frankly many on the left!) get over their revulsion at the idea that the government can act directly in the market as a market participant, this is the only way to go. The only question is how much damage will we cause ourselves before we finally take the only step that will work?

Friday, February 12, 2010

Jobs!

There's hardly a TV talking head or Congress-critter or administration representative who can talk about anything other than JOBS. J-O-B-S! It's as though the crying need for jobs just arose (it has been around for 20 or more years). It's also talked about as though it were a virus that needed a cure -- 'if only the Congress would FOCUS on job creation," or "This year, the Administration's #1 priority is JOBS." Yet another triumph of American obfuscation. The problem is simply a lack of will, a lack of focus, a lack of the 'right idea.' Solutions, people. Solutions.

But of course the truth is far from this preposterous framing. The idea that businesses are not hiring because they lack a tax break is ludicrous. The idea that small businesses aren't thriving due to lack of credit is not borne out by any actual data. However, there's a mountain of data suggesting that the great wealth accumulations in our society are not producing any socially useful result.

The nation's rich and powerful have succeeded so well in convincing their fellow countrymen that their success is warranted that it is now a bed-rock principal of American social thought. Poor people deserve their fate, as do the young, the sick, and most especially the incarcerated. And young Mr. Trump deserves those millions because he has so very cleverly wrung them out of the American economy.

My experience in American business since 1980 or so has shown me that leaders who create shareholder value by simply taking it from those least able to protest -- employees, suppliers, customers. I have not seen American leaders in any great numbers succeed by innovation, commitment to excellence, developing new ideas, new markets. In short, American business leaders succeed by cutting jobs, not by creating them. Of course there are notable exceptions, but the overall drift is clear.

Consider the political orthodoxy that taxing things makes people do them less. This has been twisted by our elite to mean that all taxes mean less economic growth. Even Democrats lack the courage to denounce this nonsense for what it is. But where does the government get most of its money? From the press, one might think it's from beleaguered "small businesses," or from the sweat of our "entrepreneurs." But that's simply false. The vast majority of the government's revenue is from wage withholding -- in other words, job taxes. We have heaped so much of the government's need for money onto wage-earners, no one should be surprised that jobs are in short supply.

I have an idea. Let's tax wealth in excess of say, two generation's worth of expenses, and use those proceeds to eliminate payroll taxes. Let's also tax income in excess of, say, $500,000 per year and use the money to pay for healthcare -- and I mean to include corporations in that. Why shouldn't large business enterprises pay a significant portion of their income as tax? The idea that large businesses need special protection to form and to succeed is borne out by no actual evidence, and there's a fair amount of evidence to the contrary.

And finally, we have tried every trick in the book to get the private sector to create adequate levels of employment, so far with dismal results. I have said this many times over the last several years, but we will not exit this jobs crisis that began so many years ago until the government takes direct action in the labor market. Think Harry Hopkins hiring millions of new government workers in 1934, or government contractors and the military scrounging for every able-bodied adult in 1941. That is the kind of thing that will work. And to be an ongoing solution, those hires have to transition to something that is sustainable, such as alternative energy, healthier food production, improved community services, etc.

It's a hard enough challenge when one wants to do it. But when the entire power elite has for many years preached the gospel that we can do anything EXCEPT the one thing that would work, it's impossible. Unless and until we as a society start to embrace the kind of things that will actually work, we will continue to sputter along, failing a little bit more every day.

That concludes today's screed.

Tuesday, January 19, 2010

And Another Thing

I've said before on this blog that I think the underlying economic crisis is far more serious than the "financial" crisis. Long-term economic woes can persist for some time without causing any kind of crisis -- an occasion for noticing and hopefully dealing with the underlying woes. The recent financial crisis -- itself a sort of underlying woe triggered into crisis by the catalyst of the collapse of the housing market -- will be seen down the line as a catalyst of a larger economic crisis.

I have written previously that:

Another undesirable consequence of Wall St.'s demands is that it starves society of research and development.... [A] lot of companies don't have any R&D strategy, so they riff on the products they already have, they move those products into new markets, and they buy-out the competition. Plus, there's always moving work to lower-cost markets and otherwise depriving workers and suppliers of any available pennies in order to make the firm look like it's growing.

This all points to a serious crisis in the world's economy. We have faced and rebounded somewhat from last year's financial crisis. But we have yet to face and rebound from the underlying economic crisis that continues to worsen. I believe that the current downturn shares this feature with the Great Depression.

We exited the Great Depression by providing work to every man and woman we could get our hands on. We came out of the war with enough technological innovation to support a couple of decades worth of improving products and services.

I don't see any such deus ex machina on the horizon, and so don't see any basis to suppose that the long-term decline in our standard of living is going to be reversed any time soon.


While many companies are in fact engines of growth and innovation, it's hard to conclude that the large majority are. We are living at the beginning of a long period of slow-decline -- not entirely a bad thing, to the extent it allows others to climb out of terrible poverty -- and sadly, most Americans are completely unaware of what's been done to them for the last 40 years.

Thursday, January 14, 2010

Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid.


- President Eisenhower

I believe this will soon be the majority view of the current rump of the GOP. However, it will be wrong. This splinter group is a bomb waiting to go off. They are but one or two lucky breaks away from a serious threat to American society. Still, it's intereresting that DDE not only thought this, but articulated it so plainly.