The debt committee did not fail. In order to fail, something has to not do what it was intended to do, and I contend that the debt committee was intended to end in exactly the way it announced today. Essentially, it was a means to force Congress as a whole to finally admit that consensus on a debt reduction deal is unreachable in the current situation. Why is this admission another Tea Party victory? Well, let's recap what the various groups in Congress want and who they represent, and then examine the effects of the debt committee's success at failing on each group and its policy hopes.
The Keynesians
Despite their infinite bickering, mainstream Democrats and Republicans actually back the same economic model; a Keynesian model in which most of the economy is privately operated but its funding is essentially funneled through the Federal government. Providers of essential services like food, health care, and housing are private entrepreneurs, but service recipients are heavily funded by government-subsidized entitlements to pay for their services - such as Food Stamps, MediCal/Medicare, Agricultural Subsidies, HUD subsidized housing, and so forth. Industry, including both civil and defense manufacturing as well as retail and other forms of distribution, is also performed by private corporations, but these, too, are heavily subsidized by stimulus, corporate welfare in the form of "development grants", and frequent bailouts for failing megacorporations such as auto-industry giants and Wall Street banks, lauded as attempts to protect jobs and consumer security. Tax rates are largely irrelevant in this system. It has been proven time and again that the wealthy don't actually pay taxes - they dodge the majority of their obligations though loopholes and deductions, then get the rest of it back and thensome through corporate welfare, stimulus, and subsidies. The poor are virtually exempt from taxes altogether, except miniscule contributions to entitlement programs that they disproportionately rely on. The middle class, of course, does not come close to paying at the rates assigned to it either, but it does get stuck with an unfair share because it gets the fewest exemptions and the least tax-funded welfare. Without a detailed lecture on why this economic model is disastrous, the only REAL divide between mainstream Democrats and Republicans is where to direct the Keynesian benefits when they are in short supply, which is the inevitable result of Keynesianism's colossal inefficiency and the shortages created by multiple cycles of borrowing and rationing. Mainsteam Republicans - affiliated with special interests of industry and defense - favor cutting entitlement spending, whereas the Democrats - affiliated with special interests in banking and the variety of subsidized service providers (agriculture, energy, health care, housing), want to cut defense spending and reduce some of the direct corporate stimulus that benefits industrial corporations, such as the Bush-era "tax cuts". Tax rate increases, such as the sick joke called the "Millionaire tax," are almost entirely for show in the solutions proposed by both; they primarily pretend to levy heavier contributions on the wealthy who will dodge them, disadvantaging the upper middle class while producing negligilble revenue increases. Arguably, the two Keynesian factions could reach a compromise with each other with relative ease by dividing the costs between their special interests, but such a compromise would preserve the structural failure of the system by protecting the inefficient special interests who thrive off unfair tax loads on the middle class and overpriced, rationed services provided to the poor. The election of the fringes on both sides is arguably a rebellion against this false Keynesian dichotomy.
The Progressives
The growing fringe on the left, with ideas arguably sympathetic to the emerging Occupy movement, prefers a more socialism-like model. It is obstinately opposed to any real cuts to entitlement spending, but a redeeming factor is that it favors an honest attempt at forcing efficiency and accountability out of the tax-subsidized providers and banks or even the direct provision of their services by government agencies. As far as taxes, Progressives are less interested in rate hikes and moreso in the elimination of loopholes and stimulus to make the wealthy actually contribute their share. Unfortunately, this system is as impractical as it appears well-intentioned and fair. While it may provide more equality, it would destroy what little efficiency is left in the US economy. Actually forced to pay their taxes, the wealthy simply leave or move their money abroad - the disastrous experiment of the Eurozone is demonstrating this exact effect and the powerlessness of regulations to prevent it. Government forcing efficiency out of providers or providing efficiecy itself is also a fairy-tale as proven by every macro-socialized service model in history, and premium-free services guarantee over-consumption in which the poor would use them more and most of the middle class would become recipients. These combined effects result in even greater shortages than Keynesianism although they are more effectively rationed, essentiallu ensuring EVERYONE starves to death together, which of course results in famine-driven rebellion that breaks the system. Despite its disposition to an unrealistic utopia, this small fringe effectively refuses to sign on to any deal that cuts entitlements and does not include provisions to stop stimulus for the wealthy, a crucial piece of the equation that keeps the Keynesians from reaching a majority that overrules the larger fringe on the right.
The Tea Party
Largely favored by the middle class, this fringe is primarily opposed to smoke and mirrors fixes such as the raising of tax rates. Sure, a move from 15% to 20% would not actually force any middle class person to pay 20% of their income in taxes, but it may force them to go from paying 6% to paying 8%, which is a significant increase that does nothing to fix the economy, and keeps a flatrate of 0% taxes on the wealthy. This fringe is sympathetic to the Progressives' idea of eliminating loopholes and deductions in the tax code, but seeing as it represents people who actually PAY taxes, it wants this balances by reduced rates, because the inflated rates intended for the rich would be quite unaffordable for the middle class without any deductions. This fringe is equally opposed to continued borrowing to keep funding the unsustainable antics of wealthy Keynesian beneficiaries, because when the system inevitably breaks down as Europe's has, the middle class will carry most of the costs. This fringe loves spending cuts in all areas and is quite indifferent to how they are distributed as long as they are deep, permanent, and not balanced by tax hikes on the middle class that continue to exempt the rich. The Tea Party favors a non-interventionist foreign policy that does not require colossal defense budgets, it would love to see corporate stimulus go up in flames because that insulate its large business competition from market forces, and it sees entitlements as wasteful and inefficient and often as corporate subsidies, correctly emphasizing that without their inevitable effect of inflation and shortages, MOST recipients would be able to afford private services in a world that eliminated them as long as corporate stimulus was also axed. Hence, this fringe refuses to agree to any deal that raises tax rates or does not axe large amounts of government spending and intervention. While it does not hold a majority, the other 2-3 groups would have to come together without it to get one.
Political and Economic Implications
So, we've entered an age of indefinite stalemate and economic uncertainty, right? Not quite. The continued stalemate is beneficial almost exclusively to the Tea Party fringe. Stimulus is not actually enough to keep the corporations on both sides of Keynesianism alive, merely to insulate them from competition and drive investor certainty in their solvency. The consistent stalemate is very destructive to these special interests, as investors dump their stock like yesterday's garbage because they are famous for their inefficiency and it is no longer a given the government will assume their obligations if/when they fail. This is why they have instructed their pet politicians to give in to the Tea Party in the 2 budget stand-offs this year once the Tea Party made it clear it would not be deterred by the prospect of a shutdown - an event that cuts off the special interests' money supply and breaks investors' confidence in them. The blow of the debt committee deal may have been the final KO delivered to the Keynesians by the Tea Party. Undeterred even by the prospect of a default, they essentially forced the center to vote in this doomed-to-fail fix, and now the special interests involved face trigger-cuts that, while delayed, will be a consensus nightmare to repeal or redirect. Recalling that uncertainty and inconfidence, rather than direct lack of government subsidies, are the silver bullets for these monsters, you will realize that their bankruptcy is now a looming and realistic threat. As for the Progressive fringe, the effects of this stalemate on them are somewhat neutral. Their most sacred cows remain out of the crosshairs, specifically the government-operated Social Security, and may actually stand a chance of enduring the crisis if special-interest run entitlements bite the dust; while they like those entitlements, said special interests are their enemies too. However, the entitlement crunch will produce a period of constriction that will be difficult for the poor between the breaking of special interest providers and the emergence of affordable non-entitlement ones. While this is sad, it is an unavoidable cost as the existing system is simply unsustainable, and many of the Progressive politicians are professionals first and ideologists second, realizing that this is a better option for them than to empower the Keynesians against the Tea Party.
As for political impact, please don't buy into the hype that this stalemate will be hanged disproprotionately by voters around the neck of one party or the other. Yes, the Republicans have lost some of their popularity in the last year, but their numbers had nowhere to go but down, if you recall their electoral sweep in 2010 and the fact that they went from an almost irrelevant minority to a powerful player. The Democrats, on the other hand, are even LESS popular now than they were when they had a triumverate and supermajorities in both houses, even Bush Jr. didn't have the incompetence to accomplish THAT. Every political prognosis based on quantitative statistics rather than the unrepresentative ranting lunacy of biased voters in forums and media does NOT predict significant changes in the balance of power in either House of Congress. Republicans MAY take the Senate because more Democrats are up for re-election, and Senate Democrats are more unpopular, but their majority would be as insignificant as the current Democratic one, maybe 1-2 seats. Democrats are likely to make some gains in the House, but not remotely enough to take control of it. The Presidential election is still WAY too early to call as the Republican nomination is anybody's ball game and the possibility of a far-left challenge to Obama is not completely out of the question. A lack of power shift coupled with the extreme unpopulartity of both parties means the real change will occur within each party, namely a magnified 2010 effect of incumbents and establishment candidates for open safe party seats dropping like flies in the primaries, for a combined shrinking Keynesian center and embellished power of both fringes. The days of this party system and its accompanying economic insanity are numbered, and their end can't possibly come fast enough.
Monday, November 21, 2011
Wednesday, October 5, 2011
A Balanced Look At "Occupy Wall Street"
OK, so these protests have managed some impressive numbers, although the 200,000 Kalle Lasn was calling for are still a distant dream. So they’ve managed to display some elements of famine driven-rebellion – forcing the police to force them off the streets, arrest them, and give them tickets, then going right back out there once released. I’m not being sarcastic. Even if the comparisons to Egypt or Yemen where 1000s of people were left dead or permanently disabled at the hands of security forces are downright laughable – it still takes courage to stand up to armed men in uniform and be thrown in jail for a few hours, especially for a lot of these protesters who’ve never been there before (college students, blue-collar workers, domestic journalists, etc.). It’s gone beyond where I predicted, but they still aren’t martyrs, and I’m far from impressed.
Why not? Because I’m impressed by results, not people’s determination or fervor. The latter is what culture teaches us to be impressed by, but I know better. The most sincere and dilligent effort that doesn’t accomplish anything isn’t a “valiant try” – it’s a waste; and usually a good indicator the effortful were as clueless as they were passionate.
With that in mind, let’s examine what these protests and protesters are really capable of accomplishing, as opposed to what they want or claim to want.
The Bad News: The Differences Between A Hippie Autumn and An Arab Spring
Many of the documentations of these events have commented favorably on the event being “leaderless” and not having unifying objectives or demands or even a common enemy except the loosely defined spectre of “Wall Street”. These documentations have also drawn comparisons to the Arab Spring for this reason, where “popular movements” comprised of tribal leaders, intellectuals, workers, religious organizations, and defecting military continue to take down one decayed tyrant after another when they have little in common and diasporas of different, often even conflicting demands. Those movements succeeded despite the lack of a clear unifying agenda and unlikely alliances, so this one will too, right?
Wrong.
These comparisons make a hasty generalization based on commonalities between the protests here and there – which are overstated – and also completely ignore the fundamental differences between both the movements and the societies they are occuring in.
1. There Is No Mubarak
The first problem with comparing these protests to the Arab Spring – or any successful protest really – is the lack of commonality in objectives, even if at first glance they look similar by virtue of diasporous demands and divergent participants. It is true that successful protests are usually united not by common objectives, but a common enemy – divided emphatically what to do after the enemy is, proverbially or literally, dead at their feet, but fervently united in wanting the enemy’s head on a plate. Killing or dethroning said common enemy hence makes a unifying objective, and one that HAS to be accomplished before any of the divergent objectives can be. This leads to myriads of successful revolutions falling apart the moment they succeed – infighting over what to do now that they’ve won leads to massive social and economic turmoil that results in support for a new monopoly on force, instituting a cycle of dictatorship. Occupy Wall Street doesn't need to worry about this happening becase it doesn't even HAVE a common enemy.
I’m slightly impressed with the popular realization of how deeply the corruption on Wall Street cuts into economic prosperity in this country, I’ve been saying it for over a decade. But that mere realization doesn’t equate to a unifying objective. The protesters may agree they dislike Wall Street, but they couldn't be further from agreeing on how to define it or more importantly what to do with it. Most Americans claim to oppose greed, corporate control of politics and the economy, and inequality - including both voters and politicians in both major parties. Where Americans begin to diverge are our ideas of how these terms are defined, and political debates that aren't limited to pre-suppositional insult-slinging ensue over which social policies accomplish these objectives and which ones barricade them.
With that in mind, vaguely defined “Wall Street” and opposition to vaguely defined bad effects it has make a piss poor common objective. Let’s face it; these protests are unlikely to culminate in the torching of the headquarters of Bank of America or Goldman-Sachs. Such acts constitute major felonies and the government would authorize far more brutal force to stop them – not enough Americans are willing to engage in such a risky struggle to overwhelm law enforcement and succeed. And even if by some outworldly turn of events this DID happen, it probably wouldn’t accomplish a thing; I'll explore why shortly. Other than this ill-defined and far-fetched notion of the destruction of Wall Street, these protesters absolutely lack the capacity to reach practical consensus for any objective. There are those who want a bigger but more accountable - stop snickering! - government to regulate banks and make them commoner-friendly; there are those convinced centrist stimulus is actually BAD for Wall Street and who hope to derail the policies that barricade more of it; there are those who want true free market policies that end government aid to banks, abolish or limit the Federal Reserve, and let the banks choke on their own incompetence; there are those who are less concerned with Wall Street and moreso with corporate power and the fall of unions; and there are those just happy to participate in a vaguely defined protest. Each of these groups, or at the least the first 4, fractionate into many more splinters in terms of specific policies and don't fit neatly into any partisan or political affiliation. The more specific these goals become, the more fundamentally incompatible they are with each other, making them unlikely to unite the protesters behind an attainable objective. Recalling from above that what unites successful revolutionaries, the lack of such a common objective presents a significant barricade to the success of these protests.
The Banks Have No Tanks
For those of you wondering why the literal torching of Wall Street wouldn't accomplish any real change - its lack of likelihood notwithstanding - the blunt and simple answer is that Wall Street really ISN'T the problem. Sure, the megabanks are greedy and unaccountable, committing stacks of felonies that Federal enforcement agencies blatantly ignore, and engaging in irresponsible lending then victimizing borrowers and tax-payers to avoid the economic reprisals. But history has demonstrated over and over that this is how corporations will behave when they are shielded from the natural punishing attrition of the free market. Without going again into the details in my previous post of how bailouts and "too big to fail" fairy-tales eliminate any resemblance to a free market, how eliminating competition as the one reliable check on self-interest results in Feudalism and regulations make a piss poor replacement for this check, the problem with Wall Street comes down to not its greed or wealth, but its unhealthy relationship with the US government.
But the protesters have figured that out, right? They aren't protesting profit or greed, they are protesting corporate power! That is what SOME of them are saying, but if that were really their agenda, they'd be occupying Pennsylvania Ave, not Wall Street....
The fundamental difference between the US and Egypt or Yemen that dooms these protests here is our political system that, counter-intuitively enough, doesn't repress these protests. The dictators being overthrown in Arab countries also have unhealthy relationships with powerful wealth interests - many of these foreign. But those dictators rule by force. A mere open forum for dissenting ideas and truly free elections would have had the dictators out on their asses in months, which is why for decades they have raised the costs of dissention with violent repression and barring peaceful opposition from elections. Compliance came from life not being quite bad enough for the average person to risk being mutilated or repressed for challenging the system. Life has worsened sharply by virtue of the economic meltdown, and these costs no longer outweigh the benefits of breaking the system.
The hippies organizing these protests would like to succeed on a similar paradigm; if the police beat them up and scattered them, that may actually precipitate enough rage nationwide to produce overwhelming numbers. But the most they can muster are a few obstructing public thoroughfare and resisting arrest charges - charges that are LEGITIMATE because Lasn and others couldn't shut up about the 'corporatist conspiracy' long enough to go through the proper channels and register their march; proper channels that would have accomodated them like they have 1000s of other protests in NYC.
These protests' fundamental flaw is that, contrary to the Schizophrenia-resembling tirades that compare the US to Egypt or Yemen, our political system is nothing like those countries. Electoral fraud in the US is real - but its impact is so minimal that only the outcomes of the closest elections are thrown by it. The government's unhealthy relationship with special interests is not a conspiracy, but something politicians wave in the faces of their supporters in an attempt to convince us what's good for said special interests is good for us too. As for free expression, the plaintiffs are simply mistaking the general public's lack of desire to hear their psychoses for a centralized squelching of dissention. Large media conglomerates are excessively careful in terms of dissenting expression and limit themselves to views that are mainstream; but this is due to their own self-interest of maintaining a mainstream audience and corporate sponsors rather than some forced centralized agenda. In the United States, you can say anything you want against anyone you want and run for office on any policy agenda you desire - the challenge lies in finding access to an audience and supporters. Any hippie that tells you this is a bad bargain doesn't realize that there simply aren't the resources for forced equal access, and every attempt in history to accomplish such a thing has put a Mubarak in power rather than dethroned one - the person deciding how to define and ration "equal" access becomes a dictator, simple as that.
Proof that Wall Street commands 0 force is evident in that politicians that truly and openly oppose it (Bernie Sanders, Dennis Kucinich, Ron Paul) get elected to the Federal government, no one forcibly squelches these politicians or scholars who agree with them, and mainstream media would gladly give them forum if this were profitable by virtue of accompanying advertisements making comparable revenue to Jersey Shore, Dancing With the Stars, and Monday Night Football - that is, if Americans were willing to give these ideas the time of day. No one needs to get beat up by police to beat Wall Street; all we need is for the costs of complacency to outweight the costs of turning off the mind-numbing garbage we refer to as "popular entertainment" in this country and actually getting involved in politics - giving attentional and financial support to non-mainstream politicians and media. If Americans are too comfortable despite the economic situation to even do THAT, why bother discussing the hypothetical burning of the headquarters of Goldman-Sachs? Even if some group of loons somehow pulls this off; they'd get arrested and tried for terrorism to thunderous applause, and the disastrous banking system would go on unscathed.
The Good News: You Don't Have To Be A Martyr To Win In the US
So, these protests are a waste of time and energy and don't deserve to be taken seriously, right? Well, no, not entirely. I merely present the arguments above to point out that many of the protesters and their fervent supporters are misled, make extremely far-fetched comparisons, and are unaware of what they are likely to accomplish as well as their limitations.
To some extent, the rise of both the right and left fringes in government in recent years in response to the economic situation has represented the very surge in political awareness necessary for ousting Wall Street that I discussed above. These fringes don't agree on much, but they have a clearly defined common objective of derailing economic policy that protects predatory special interests - first and foremost, Wall Street. These protests are merely another manifestation of this surge in awareness - with the participants at least publically acknowledging that Wall Street and its relationship with DC are at the heart of the economic problems we face. Their usefulness lies in their serving as a rallying point - making others aware of the conflict and hopefully motivating them to become less complacent and more active and educated, and hopefully motivated to elect anti-Wall Street politicians of different brands. What isn't going to happen is the fantasy leftist revolution proposed by the more radical of the small band of hippies dancing around Lower Manhattan. These protests deserve to be viewed as a small step in a much larger and more diverse re-alignment than even the diaspora they embody within themselves; particularly, the beginnings of the popular manifestations of a splitting left that I have predicted for over a year now, much like the original Tea Party rallies in 2008-9 were the popular manifestations of the splitting right.
Saturday, September 3, 2011
Fight Crime: Prosecute Obvious Criminals
The attached CNN article describes in some detail the legal actions that Federal financial enforcement agencies are now pursuing against 17 of the largest banks on Wall Street for crimes and violations that contributed to the financial meltdown of 2008. I won't bother describing the allegations in detail - you can read the article if you're interested - but they boil down to misrepresentation and insider-trading. Although most Americans aren't this familiar with finance policies, insider trading isn't just some "evil thing monster banks do," it is a Federal crime - the same Federal crime Bernie Madoff, Martha Stewart, and the various EnRon executives went to prison for. Essentially, sellers of stocks and other financial assets are required to disclose the accurate worth of said assets the same way someone selling a house is required to disclose known structural integrity failures, but the penalties for misrepresenting the value of financial assets are far greater because sellers often hold dual roles - executive AND large stockholder in same corporation - and are prone to significant conflict of interest. The enforcement agencies are alleging the banks knew that the mortgages that the (now long-gone) mortgage brokers like Countrywide sold them were not worth what they were advertised as, yet they turned around and sold these mortgages to various investors claiming they are worth what the brokers said. There are also some allegations of not giving property owners the variety of options they were legally entitled to in 2010 during the foreclosure craze - known as "robo-signing" - but these will be a drop in the bucket compared to the insider trading allegations.
The obvious first reaction is "it's about damn time these banks faced some sort of accountability", but the political implications of this are far greater, and in my opinion this development does not go remotely far enough. The enforcement agencies answer directly to the President of the United States, often bypassing even the Department of the Treasury, so their sudden decision to actually do their jobs and enforce the law by prosecuting the fraudulent banks on Wall Street is a colossal change of policy for the White House. 3 years ago, the current President - then a Senator - took a day off from his own electoral campaign to vote in favor of a massive bailout bill that gave $1.4 Trillion to these same banks over a crisis brought about by the same crimes they are now being prosecuted for. As President, he then followed this up with some halfass attempts at new, more restrictive banking policies, citing the age-old myth that "free market failure" caused the crisis. Now, after 3 years and 2 elections that saw scores of politicians aligned with the interests of megabanks unceremoniously fired by voters and those proposing to audit and censure the Federal agencies swell in numbers, the Federal agencies and their boss the President have suddenly discovered that the banks committed a string of felonies to bring about this mess and can be prosecuted for it? This is a sick joke. The idea that the enforcement agencies didn't know what the banks were up to in 2008 should not seem credible to anyone over the age of 12, and in all honesty it would not excuse the agencies even if it were credible. If a bureaucracy charged with monitoring banks honestly did not understand what the banks were doing in 2008 - every member of said bureaucracy ought to be stripped of any professional licensure, handed a broom or shovel, and sent to contribute to the recovery by cleaning freeways; they've demonstrated that is all they are qualified for. This is a moot point in any case, because significant probes into the work of the Federal Reserve and other agencies launched by unlikely political allies Bernie Sanders and Ron Paul have already revealed that the agencies were well aware of the banks' misconduct and at best turned a blind eye to it; although I would not be surprised to find out that high-ranking officials were in collusion with the banks and profitted off their endeavors.
So, let's try to sum up what really happened. A sleazy pack of Wall Street CEOs committed strings of felonies openly in front of the Federal agencies charged with enforcing the policies that made their actions illegal and plausibly with said agencies' collusion, and when this string of felonies brought about a global economic meltdown, the politicians charged with overseeing the regulatory agencies gave these felons $1.4 Trillion in public money, and tried to pretend to fix the problem with new "preventive" laws - new laws for the banks to break and the agencies not to enforce. Why is any American surprised that these Wall Street tycoons walk around waving their dicks and feeling invincible while the world burns as a result of their antics?
The agencies have just admitted that all we had to do was prosecute the banks back in 2008 as they'd already committed felonies - and the deterrence effect of sending a few dozen more finance executives to join Madoff and Skilling in the Federal penetentiary for 2 or 3 decades would be all the prevention of another crisis we'd ever need. No need for any new laws, and certainly no need to reward these felons with a bailout - but don't get me started on that. Now, however, after 3 years of the worst economic swamp in almost a century, this alone is necessary but not sufficient. Congress must launch an independent investigation into the work of the Federal agencies and the Bush Jr. Administration to determine how much they knew of (and colluded with) the criminal activities of these banks, and pursue grand jury indictments against anyone that took bribes or just plain neglected to enforce the law. Otherwise, feeling threatened by the political climate, the agencies will simply use their old friends on Wall Street as scapegoats for the endeavors they undertook together, and in another decade when things calm down embark on a similar escapade with new banks knowing that they - the bureaucrats - will not be held accountable. The first people that have to be effectively deterred from breaking the law are those charged with enforcing it, otherwise they become nothing more than thugs for the highest-paying criminals they are supposed to bring to justice. This has already happened as I've described here, and in 2012, I urge Americans to strongly consider in their electoral behavior the stances of politicians on holding these bureaucrats accountable to avoid it happening again.
The obvious first reaction is "it's about damn time these banks faced some sort of accountability", but the political implications of this are far greater, and in my opinion this development does not go remotely far enough. The enforcement agencies answer directly to the President of the United States, often bypassing even the Department of the Treasury, so their sudden decision to actually do their jobs and enforce the law by prosecuting the fraudulent banks on Wall Street is a colossal change of policy for the White House. 3 years ago, the current President - then a Senator - took a day off from his own electoral campaign to vote in favor of a massive bailout bill that gave $1.4 Trillion to these same banks over a crisis brought about by the same crimes they are now being prosecuted for. As President, he then followed this up with some halfass attempts at new, more restrictive banking policies, citing the age-old myth that "free market failure" caused the crisis. Now, after 3 years and 2 elections that saw scores of politicians aligned with the interests of megabanks unceremoniously fired by voters and those proposing to audit and censure the Federal agencies swell in numbers, the Federal agencies and their boss the President have suddenly discovered that the banks committed a string of felonies to bring about this mess and can be prosecuted for it? This is a sick joke. The idea that the enforcement agencies didn't know what the banks were up to in 2008 should not seem credible to anyone over the age of 12, and in all honesty it would not excuse the agencies even if it were credible. If a bureaucracy charged with monitoring banks honestly did not understand what the banks were doing in 2008 - every member of said bureaucracy ought to be stripped of any professional licensure, handed a broom or shovel, and sent to contribute to the recovery by cleaning freeways; they've demonstrated that is all they are qualified for. This is a moot point in any case, because significant probes into the work of the Federal Reserve and other agencies launched by unlikely political allies Bernie Sanders and Ron Paul have already revealed that the agencies were well aware of the banks' misconduct and at best turned a blind eye to it; although I would not be surprised to find out that high-ranking officials were in collusion with the banks and profitted off their endeavors.
So, let's try to sum up what really happened. A sleazy pack of Wall Street CEOs committed strings of felonies openly in front of the Federal agencies charged with enforcing the policies that made their actions illegal and plausibly with said agencies' collusion, and when this string of felonies brought about a global economic meltdown, the politicians charged with overseeing the regulatory agencies gave these felons $1.4 Trillion in public money, and tried to pretend to fix the problem with new "preventive" laws - new laws for the banks to break and the agencies not to enforce. Why is any American surprised that these Wall Street tycoons walk around waving their dicks and feeling invincible while the world burns as a result of their antics?
The agencies have just admitted that all we had to do was prosecute the banks back in 2008 as they'd already committed felonies - and the deterrence effect of sending a few dozen more finance executives to join Madoff and Skilling in the Federal penetentiary for 2 or 3 decades would be all the prevention of another crisis we'd ever need. No need for any new laws, and certainly no need to reward these felons with a bailout - but don't get me started on that. Now, however, after 3 years of the worst economic swamp in almost a century, this alone is necessary but not sufficient. Congress must launch an independent investigation into the work of the Federal agencies and the Bush Jr. Administration to determine how much they knew of (and colluded with) the criminal activities of these banks, and pursue grand jury indictments against anyone that took bribes or just plain neglected to enforce the law. Otherwise, feeling threatened by the political climate, the agencies will simply use their old friends on Wall Street as scapegoats for the endeavors they undertook together, and in another decade when things calm down embark on a similar escapade with new banks knowing that they - the bureaucrats - will not be held accountable. The first people that have to be effectively deterred from breaking the law are those charged with enforcing it, otherwise they become nothing more than thugs for the highest-paying criminals they are supposed to bring to justice. This has already happened as I've described here, and in 2012, I urge Americans to strongly consider in their electoral behavior the stances of politicians on holding these bureaucrats accountable to avoid it happening again.
Thursday, August 4, 2011
Why I'm the One American THRILLED About the Debt Deal
Everyone knows what I'm referring to with the "Debt Deal", I hope. But before I get into this discussion, let me outline the factual provisions of it so that all readers are on the same page, rather than basing their reaction to my views on "facts" fabricated by pundits.
- The debt ceiling is raised $900B, which means the Federal government can add that much to the national debt before it needs to be raised again.
- Between $900B and $1T in cuts to Federal deficit (DON'T SAY "SPENDING") have been made, distributed the following way:
- $3XXB in military spending.
- $3XXB in discretionary spending (this entails everything that is not military or entitlements
like Social Security/Medicare), specific cuts going to education and trasportation.
- $3XXB in projected interest savings on debt. This is what makes "deficit" different from
"spending". By raising the ceiling less than requested, implementing other cuts, and
counting on less borrowing in coming months as the Iraq and Afganistan missions draw to a
close, the government projects it would have spent this money on interest on loans to pay
for what has been cut out. It isn't a "made-up" cut the way some far right pundits claim,
but the numbers ARE very approximate as exact projections both on operating costs of
government and the costs of borrowing are almost impossible to make.
- The government is projected to add $900B to the debt and hit the debt ceiling again in December of 2011. At that point, the debt ceiling will automatically go up another $1.4T, but an additional $1.5T in cuts will also kick in at that point, approximately $500B a piece coming from military and SS/Medicare. To avoid this pre-determined cut package, Congress can vote in an alternative legislation by the time we hit the ceiling again, but that legislation has to reduce the deficit by a matching $1.5T; they can accomplish this through cuts, tax hikes, or however else. The Commission to come up with this alternative package will consist of 12 members of Congress, 3 from each party from each House, and the prospect of "painful" cuts to the military and entitlements - considered sacred cows by Republicans and Democrats, respectively - is supposed to motivate them to compromise for a better deal.
- There are other provisions and complications, but for the purposes of this post, I'll stop there.
In this post:
- What does the debt ceiling deal REALLY do?
- Who is unhappy about it? Who should be?
- Political and economic projections as a result.
So, what has the debt ceiling deal really accomplished?
The short answer is - absolutely nothing. In the weeks leading up to the final compromise, Americans could not tune into any source of mass-media without being bombarded with doomsday projections about what will happen if the government were to go into default. These included the usual ignorant hysteria of "it'll effect military families, seniors on social security, and 'hardworking' Federal employees" that we hear each time a government shutdown looms, but also an added peppering of macro-economic predictions about a tumbling market, a dowgraded credit rating, and even a plummeting dollar. Before we examine these projections, here are the inconvenient facts:
1. Most economists agreed that the actual consequences were impossible to predict, and could only speculate on both the nature and extent of any possible result. Specific economists with a colossal vested interest in avoiding a default - such as Federeal Reserve Chairman Ben Bernake and Treasury Secretary Tim Geithner - went into vivid and horrifying details of the worst case scenarios, but not even these hysteria-baiting profiteers ever went beyond saying such scenarios were guaranteed or even likely. In fact, they avoided discussing probability like the plague, focusing qualitatively on all the ways the world "could" end. As a scientist, I'm not scared of anything until someone can tell me how likely it is to actually happen; and when someone with doomsday projections avoids that topic, they are most likely a con artist.
2. In non-speculative reality, a default is similar to a shutdown. The government still has revenue - money from taxes - but it cannot borrow any more until the debt ceiling is raised, making it short but not completely without funds. In this situation, executives such as the Treasury Secretary or the President have to make the call who to pay and who to issue IOUs to, with all the usual classes as options for the chopping block:
- Recipients of government-paid incomes (social security, active military and veterans,
Federal employees of all sorts).
- Government contractors of every kind (military, academia, healthcare providers who take
medicare, social service providers with Federal grants, etc.)
- Stimulus and subsidy recipients, such as agribusiness and lenders who give subsidized loans
for various purposes.
- States that receive grants and funding for expenditures that fall into any of the classes above.
- People the government owes money to - banks, foreign governments, bond-holders.
3. Whoever wasn't paid WOULD be paid once the government could borrow money again, their obligation wouldn't simply be forgotten, and the executives could make the call to pay people partially and pay the difference later.
4. The government would NEVER refuse to pay the mandatory payments on the debts it owes, although in this situation it may go down to minimum payments where it has the leeway to do so, much like people can do with credit cards. I discuss why below.
Hopefully, these facts make it evident why the "poor government-dependent denied his paycheck" doomsday projection is absolute hogwash. Politicians always focus on the threat to "seniors on social security", "military personnel", and "hardworking federal employees" because these are classes voters will relate to. If Harry Reid or Peter King came on TV and said the threat of a default would mean multi-million dollar corporations that produce weapons and oil, grow corn-fed cows, or own government debt has to wait a few weeks to receive its millions in tax-funded payments, Americans would be happy about a shutdown or default rather than scared of it. What they neglect to mention when trying to elicit sympathy, however, is that most Federal spending in the US goes to large corporate interests, not sympathy-deserving military families, seniors, and Federally-employed service workers.
- Those of you in the military know that military personnel aren't paid worth squat. Our military expenditures are colossal, but what's expensive about the military is fuel, supplies, research and production on new weapons and systems, and care of the wounded - all things that are privately produced by a gravy-train of Federal contractors at prices that would make Bernie Madoff blush. To an extent, this includes military BENEFITS - money paid on behalf of the military to health care and housing providers, educational institutions, and so forth.
- Other than the direct benefit of social security, very few civillian expenses of the Federal government aren't paid to corporations either. Medicare is essentially a voucher to contract with a private health insurance provider that then pays for a private health care provider, at costs to be determined by both and the recipient being indifferent that they are tax-funded (and then we wonder why these costs keep growing). Student loan subsidies, as well as the recent onslaught of stimulus to homebuyers, start-up businesses, and so forth, are also nothing more than a handout to corporate banks. The borrower never sees that money; the government gives it to the lender on his behalf, creating the illusion that without said subsidy, the borrower wouldn't be able to afford it. It never occurs to the borrower that without the subsidy, the lender would face the choice of going bankrupt or selling his services at affordable prices because so few borrowers could work with him otherwise. In most cases, Federally-funded benefits distributed by State governments follow this same paradigm.
- Then there are direct payments to the rich and powerful, such as oil and farm subsidies, corporate welfare in the form of various massive tax deductions, and so forth.
Various profiteers on the list above have servant politicians in different parties and different levels of government, and the last choice any politician wants to make is whether to lose their campaign financing from whichever of these has funded them or electoral support from any class of government-dependent individuals. In a real shutdown situation, the government would not have to stop paying anyone that wouldn't starve if they weren't paid for a few weeks, but this is contrary to the self-interest of politicians and hence they try to avoid it by making sympathy-deserving classes look threatened.
However, despite no military family or senior on a fixed income honestly being threatened by a shutdown or default, such an event would have macro-economic consequences - although their magnitude is unclear as economists have pointed out. The various recipients on the list above also make up a significant chunk of both private employers and corporations in which private investors own stocks, so a sudden freeze on payments to them sends a ripple effect through the economy - contributing to less buying in the short term and possible unemployment in the long term, and an unstable and hence plunging stock market.
The threat of a Federal credit rating downgrade is related to this as well. As with an individual's credit score, the rating agencies measure the government's projected capacity to pay its debts, and governments with lower ratings have to borrow at higher interest rates because they are less trustworthy borrowers. Refusing to pay existing debts is an automatic downgrade, which is why the government would continue to make the payments on its debts. Beyond this, factors that effect this capacity are income, stability, and existing expenditures and debt, all factors the make the credit rating more dependent on the economic situation at large than on a default; the rating agencies said there was a chance they would downgrade the US whether or not we went into default. Our economic system is stimulus and subsidy dependent, as described above. It is absolutely at the government's discretion to change this condition, but short-term proposals were limited to spending cuts and tax-hikes. Cuts to stimulus and subsidy supply threaten to increase unemployment and close dependent businesses, reducing revenue. Tax hikes cause rich and powerful interests to tighten their wallets and reduce production or move it overseas, also driving unemployment up and net revenue down. You've probably heard a million different proposals for how to institute either cuts or hikes but prevent these fallouts, but these fall under different ideas about changing the system, none of which had any real chance of clearing the political stalemate. This stalemate itself was a secondary threat to the credit rating, as unstable and indecisive borrowers are viewed as riskier.
Looking at the factual provisions of the deal described above, this discussion has hopefully made it evident why it accomplished absolutely nothing. There was no "poor, threatened paycheck recipient" to save by a last-minute deal, so that point is moot. The provisions are very short-term and force us to return to the same stalemating instability in a mere 3-4 months, so while we may have avoided the credit rating downgrade, this is likely to be temporary. The provisions haven't changed the system by a drop; but they have made significant cuts to heavily stimulated industries such as military contractors, education, and transportation, and threaten more cuts to these and other similar industries or, less likely, tax hikes. The plunging stock market is a result of both these real and threatened further cuts - something the politicians claimed a last-minute deal would avoid, and the cuts continue to threaten our credit rating, but I remind you tax hikes would not threaten it less.
So, who is unhappy about this situation, and who should be?
The Center:
In several posts about 8 months ago, I pointed out the erosion of party lines following the 2010 elections and the virtual lack of difference in economic terms between mainstream Democrats and mainstream Republicans. The fact that the House vote on this debt deal split the Republicans about 60/40 and the Democrats 50/50 should be sufficient evidence that my prophecy is coming true, but even these splits overestimate the power of the center.
Essentially, both center Republicans and center Democrats represent Keynesian economics, the very subsidy and stimulus dependent system described above, and you may skip this paragraph if you are familiar with how it works. Keynesian economics is a mixed model, one that allows free-enterprise but insists the government steps in with relatively high taxes to invest with stimulus and subsidies in areas it determines need help or whose growth it determines benefits society as a whole. This is the system most of the Western world has employed since the period following WWI, and much of the global economic collapse is attributable to its inherent unsustainability. Without dipping too deep into economic theory, government makes a piss-poor umpire of where to invest money - it is prone to inefficiency and inaccurate information, and it is also prone to sabotage by special interests rather than investing in a way that honestly serves the public good. Hence, over time, Keynesian economics makes the economy less and less efficient, forcing the government to become more and more involved in what is still a free-enterprise system. We have simply reached a point where it cannot become qualitatively more involved, and has destroyed the efficiency of the existing system.
Center Republicans and Democrats really only differ in how they want to preserve the system described above, roughly falling into the categories of Republicans wanting to cut direct benefit investments and increase business investments, and Democrats wanting to raise taxes on the rich to preserve direct benefit investments. The fringes in both parties, on the other hand, want to abandon the system of Keynesian economics altogether, although they are as different in their ideas of what to put in its place as they are similar in their hostility toward it. Together, these fringes have managed to keep the center from reaching a deal that preserves it, forcing it at the last minute into a half-deal that, as I discussed above, only looks like it preserved it on the very surface. Hence, the center politicians in both parties who put together this deal and the disproportionate amount of rich Keynesian profiteers (banks, military contractors, health care providers) that side with the center are rightfully angry about the way it went down, because it virtually guarantees the system will be derailed. However, neither these politicians nor their special interests deserve a drop of sympathy. They have fed upon the inefficiency of this system to profit off irresponsible investments that take resources away from the lives of everyday Americans for decades, and it's about damn time the warranty wore out on their panic-machine that makes people feel we couldn't do better without them.
The Right Fringe:
I'm cautious about referring to this fringe as the Tea Party, because it is in fact an odd concoction of fiscal hawks such as libertarians and stalwart conservatives, but also a small contingent of neo-cons dead set on preserving excessive military funding as it is evident the center has largely abandoned this interest. In any case, that neo-con contingent notwithstanding, this fringe wants to see Keynesian economics abandoned in favor of a pure free-enterprise, or capitalist, system. Those of you who know me at all should know that economically, my own views are not only with this fringe but as extreme as this fringe can possibly get, although I bitterly oppose them on social issues with the exception of the libertarians.
Many myths peddled about this fringe by the center-left that hates it with a passion are actually true about the center-right rather than the fringe. This fringe does not want to see entitlements reformed, cut, or saved, it wants to see them ABANDONED, but in political practicality it wants to see them phased out so as not to leave recipients who currently depend on them out in the cold. Similarly, this fringe is bitterly opposed to all subsidies and stimulus, including corporate subsidies and tax loopholes, and it wants to account for the resulting loss of investment by minimizing the functions of government so that more efficient private investment can step in. Government spending accounts for a large fraction of the economy because private industries who receive federal subsidies are impossible to compete with by those who do not, allowing them to be inefficient and a drain on the economy as a whole. Reducing stimulus payments to them within a Keynesian system in which many depend on them may be damaging, but eliminating said payments altogether would force them to be more efficient or go bankrupt to make room for more efficient providers through competition. The tax cuts this fringe endorses would be funded by said reduction in government functions, and it wants a reformed tax system that eliminates loop-holes and corporate welfare (both are types of stimulus), but that is also flatter because actual 40% taxes without loopholes would bankrupt anyone they are levied against in a heartbeat. This fringe does have some corporate sponsors, but these are largely industries that the center has abandoned or threatened to abandon as stimulus recipients in the Keynesian system, and who now need a free market system or they will be swept aside by the new subsidized classes within a decade. Interestingly, some of these are classic Keynesian profiteers such as the makers of traditional combustion engines, who are now threatened by the government's obsession with investments in "clean" and "renewable" energy.
This fringe is largely unhappy about the debt deal because it feels said deal does not go far enough. While I admire their passion, I say these people need to rediscover scientific practicality. They had the votes to stalemate the system with the left fringe on the other side, but they certainly didn't have the majority to get things to go their way. The Keynesian system has been damaged irreparably and its derailing has been almost guaranteed by this silly deal - the same thing all the pre-suppositional center-supporters are weeping over like it's a bad thing. What more could we opponents of Keynesianism possibly want? Yes, I know the answer, the right fringe wants to build its own system rather than have to compromise with the left fringe after the old one has fallen apart; but we could not have destroyed it without the left fringe, so regardless of how we feel about said fringe, we have to take that fact into consideration.
The Left Fringe:
Sometimes inaccurately called "Progressives" as Progressivism refers specifically to the Keynesian government investment in private industry that allegedly performs a public service, this political affiliation is largely hostile to private enterprise. It sees the failure of the Keynesian system as attributable to the excessive self-interest of the entrepreneurs affiliated with both the center-right and the center-left, and believes the government could efficiently perform the functions it currently has if it monopolized not only their funding, but their delivery. I am cautious about calling this fringe "socialists" because they don't believe in a fully government-run economic system. Rather, they place their faith in a Western European model where "essential services" such as banking, health care, and education, are both funded and operated by government with a "public good" motive, funded by high taxes on other industries which remain private.
As with the far-right, many myths peddled about this fringe are fabrications of the center right and actually true about the center-left but not the fringe. They are not on the campaign payroll of any corporation involved in public service provision as their ideology clearly suggests eliminating said corporations altogether; a public option to compete with private health care in terms of both insurers and providers that would undoubtedly drive private providers out of business being one example. Banks fear this fringe like the plague as its proposal is to cease them and their functions in favor of a government-operated central bank. This fringe is no friend to any energy company as it would not stop at investing in clean or renewable energy, but have the government take over its production and distribution. All of these expanded functions would be funded by higher taxes on other industries, and this fringe generally supports a globalistic approach to foreign policy which makes the US march in line with the orders of the UN and other supernational institutions, based on which it calls for massive reductions to military funding, making it no friend of the military-industrial complex.
As should be evident, at least in theory, this fringe is for reforming the system by eliminating the profiteers and making government investment more efficient and accountable. Again, those of you who know me at all realize I think this idea is a naive fairy-tale. Even without the profiteers' self-interest in the mix, the inherent inefficiency of top-down economic decisions would remain a colossal problem, causing runaway taxation to keep funding the growing costs of public services and eventual bankruptcy as revenue producers leave for lower-tax locations. THIS effect is what is bankrupting the countries in Europe that many in this fringe present as economic masterpieces - France, Greece, Italy, Ireland, Sweden. The elimination of profiteers is also a fairy tale in itself, seeing as every government service would still require the contracting of private services - pharmacy and medical equipment for health care, for example - unless the system were completely government-run, in which the inefficiency would bring bankruptcy almost instantly. Finally, trust in globalism is less of a fairy tale and more of a sick joke. International institutions are not trustworthy as 2/3 of the countries represented in them are run by violent criminals who have never won a fraud-free election and do not even begin to represent the interests of their people. While I in no way endorse the reprehensible imperialism on neo-cons, the US equally cannot place its balls in a jar and hand them over to the representatives of the Ghadhafis, Assads, and Putins of the world, because these people are in turn not answerable to anyone. However, the bubbling sentiment of agreement with this fringe on the left is evidence that the faith in Keynesianism of all the do-gooders who believe in world peace and collective prosperity has expired, and they now see the Keynesian profiteers of the center as part of the rich self-interest they abhor.
This fringe is furious about the way the deal went down because they once saw Obama as one of their own and many of them continue to believe the bulk of the Democratic Party agrees with them. Their naive wishful thinking gave them the impression that the country was moving toward the collective fairy-tale they envision, and this event has painfully derailed that fantasy. Nevertheless, the left fringe is as much a victor in this as the right fringe, having brought about the nearly inevitable demise of a system they no longer believe in. Like the right fringe, they should face the reality that once the center is too small to matter, they will have to compromise with their opponents in the other fringe. In this case, the enemy of my enemy is my unlikely, awkward, temporary ally, but that alliance must continue to hold until the monster in the middle is finished.
Political and Economic Projections Based On This Situation
I cannot make any sort of prediction about the outcome of the next debt ceiling debate in a few months, but I can almost guarantee it will be the final resting place of the Keynesian system, and this is what makes me happy about the debt deal because I absolutely despise this system and am thoroughly scientifically convinced its effects are 100% harm and 0 good. Should Congress be unable to reach a deal, or reach a halfass deal the way they did this time - very real possibilities because the fringes will continue to stalemate, and will behave even more radically as this debate will lead into the primary elections in which they face the center - the guaranteed cuts to military and entitlements that kick in as a result will kill the system instantly and painfully. These cuts will break stimulus enough for the industries to cease functioning, resulting in a chaotic and unpleasant - but short - transition to a different system, the details of which will depend on further economic developments. Should Congress reach any sort of deal, the cuts or even tax hikes this culminates in will make the system less - not more - stable, bringing back the debate within the next 2 years in a Congress that will in all likelihood have more representation for the fringes and make another similar deal simply impossible.
As for political predictions, I'm quite convinced voters will punish the center like a redheaded stepchild in 2012. The angry fringes represent angry partisan bases on both sides, and these bases are angriest at the center politicians in their own parties who voted in favor of this deal. The far left is furious with Obama and Reid; the far right with McConnell and Boehner. Come primary season, centrist incumbents will begin to drop like flies in both parties, making the Tea Party's victories in 2010 look tame in comparison. Mitch McConnell, specifically, has likely signed his own political death sentence by brokering this deal, seeing as he is up for re-election and from Kentucky, the same state that elected Rand Paul to Senate in 2010, and whose Republican Party gave Paul a landslide victory over his opponent endorsed by none other than McConnell himself. If that's not a prophecy, I don't know what is. In the general election in 2012, partisanship is likely to prevail and the balance of power is not likely to shift by much in either direction, but the primary standoffs are likely to make both fringes swell in numbers, and fringe candidates from one party are likely to destroy centrist candidates from the other where they meet, because base endorsement from centrists is likely to go to third parties and independents, tipping the balance in terms of votes, volunteers, campaign funds, and so forth. I was beginning to buy into the idea that Republicans are too divided and their candidates too fringy to take down Obama in 2012, but in light of this event Obama may just be destroyed by this last effect I described. The far left now adamantly hates him, and all that is required for his demise is a semi-serious third party or independent run on the left that takes away 4-5% of his base votes and a lot of volunteers. If you think this is a far-fetched possibility, just look at 1992, and 2000.
- The debt ceiling is raised $900B, which means the Federal government can add that much to the national debt before it needs to be raised again.
- Between $900B and $1T in cuts to Federal deficit (DON'T SAY "SPENDING") have been made, distributed the following way:
- $3XXB in military spending.
- $3XXB in discretionary spending (this entails everything that is not military or entitlements
like Social Security/Medicare), specific cuts going to education and trasportation.
- $3XXB in projected interest savings on debt. This is what makes "deficit" different from
"spending". By raising the ceiling less than requested, implementing other cuts, and
counting on less borrowing in coming months as the Iraq and Afganistan missions draw to a
close, the government projects it would have spent this money on interest on loans to pay
for what has been cut out. It isn't a "made-up" cut the way some far right pundits claim,
but the numbers ARE very approximate as exact projections both on operating costs of
government and the costs of borrowing are almost impossible to make.
- The government is projected to add $900B to the debt and hit the debt ceiling again in December of 2011. At that point, the debt ceiling will automatically go up another $1.4T, but an additional $1.5T in cuts will also kick in at that point, approximately $500B a piece coming from military and SS/Medicare. To avoid this pre-determined cut package, Congress can vote in an alternative legislation by the time we hit the ceiling again, but that legislation has to reduce the deficit by a matching $1.5T; they can accomplish this through cuts, tax hikes, or however else. The Commission to come up with this alternative package will consist of 12 members of Congress, 3 from each party from each House, and the prospect of "painful" cuts to the military and entitlements - considered sacred cows by Republicans and Democrats, respectively - is supposed to motivate them to compromise for a better deal.
- There are other provisions and complications, but for the purposes of this post, I'll stop there.
In this post:
- What does the debt ceiling deal REALLY do?
- Who is unhappy about it? Who should be?
- Political and economic projections as a result.
So, what has the debt ceiling deal really accomplished?
The short answer is - absolutely nothing. In the weeks leading up to the final compromise, Americans could not tune into any source of mass-media without being bombarded with doomsday projections about what will happen if the government were to go into default. These included the usual ignorant hysteria of "it'll effect military families, seniors on social security, and 'hardworking' Federal employees" that we hear each time a government shutdown looms, but also an added peppering of macro-economic predictions about a tumbling market, a dowgraded credit rating, and even a plummeting dollar. Before we examine these projections, here are the inconvenient facts:
1. Most economists agreed that the actual consequences were impossible to predict, and could only speculate on both the nature and extent of any possible result. Specific economists with a colossal vested interest in avoiding a default - such as Federeal Reserve Chairman Ben Bernake and Treasury Secretary Tim Geithner - went into vivid and horrifying details of the worst case scenarios, but not even these hysteria-baiting profiteers ever went beyond saying such scenarios were guaranteed or even likely. In fact, they avoided discussing probability like the plague, focusing qualitatively on all the ways the world "could" end. As a scientist, I'm not scared of anything until someone can tell me how likely it is to actually happen; and when someone with doomsday projections avoids that topic, they are most likely a con artist.
2. In non-speculative reality, a default is similar to a shutdown. The government still has revenue - money from taxes - but it cannot borrow any more until the debt ceiling is raised, making it short but not completely without funds. In this situation, executives such as the Treasury Secretary or the President have to make the call who to pay and who to issue IOUs to, with all the usual classes as options for the chopping block:
- Recipients of government-paid incomes (social security, active military and veterans,
Federal employees of all sorts).
- Government contractors of every kind (military, academia, healthcare providers who take
medicare, social service providers with Federal grants, etc.)
- Stimulus and subsidy recipients, such as agribusiness and lenders who give subsidized loans
for various purposes.
- States that receive grants and funding for expenditures that fall into any of the classes above.
- People the government owes money to - banks, foreign governments, bond-holders.
3. Whoever wasn't paid WOULD be paid once the government could borrow money again, their obligation wouldn't simply be forgotten, and the executives could make the call to pay people partially and pay the difference later.
4. The government would NEVER refuse to pay the mandatory payments on the debts it owes, although in this situation it may go down to minimum payments where it has the leeway to do so, much like people can do with credit cards. I discuss why below.
Hopefully, these facts make it evident why the "poor government-dependent denied his paycheck" doomsday projection is absolute hogwash. Politicians always focus on the threat to "seniors on social security", "military personnel", and "hardworking federal employees" because these are classes voters will relate to. If Harry Reid or Peter King came on TV and said the threat of a default would mean multi-million dollar corporations that produce weapons and oil, grow corn-fed cows, or own government debt has to wait a few weeks to receive its millions in tax-funded payments, Americans would be happy about a shutdown or default rather than scared of it. What they neglect to mention when trying to elicit sympathy, however, is that most Federal spending in the US goes to large corporate interests, not sympathy-deserving military families, seniors, and Federally-employed service workers.
- Those of you in the military know that military personnel aren't paid worth squat. Our military expenditures are colossal, but what's expensive about the military is fuel, supplies, research and production on new weapons and systems, and care of the wounded - all things that are privately produced by a gravy-train of Federal contractors at prices that would make Bernie Madoff blush. To an extent, this includes military BENEFITS - money paid on behalf of the military to health care and housing providers, educational institutions, and so forth.
- Other than the direct benefit of social security, very few civillian expenses of the Federal government aren't paid to corporations either. Medicare is essentially a voucher to contract with a private health insurance provider that then pays for a private health care provider, at costs to be determined by both and the recipient being indifferent that they are tax-funded (and then we wonder why these costs keep growing). Student loan subsidies, as well as the recent onslaught of stimulus to homebuyers, start-up businesses, and so forth, are also nothing more than a handout to corporate banks. The borrower never sees that money; the government gives it to the lender on his behalf, creating the illusion that without said subsidy, the borrower wouldn't be able to afford it. It never occurs to the borrower that without the subsidy, the lender would face the choice of going bankrupt or selling his services at affordable prices because so few borrowers could work with him otherwise. In most cases, Federally-funded benefits distributed by State governments follow this same paradigm.
- Then there are direct payments to the rich and powerful, such as oil and farm subsidies, corporate welfare in the form of various massive tax deductions, and so forth.
Various profiteers on the list above have servant politicians in different parties and different levels of government, and the last choice any politician wants to make is whether to lose their campaign financing from whichever of these has funded them or electoral support from any class of government-dependent individuals. In a real shutdown situation, the government would not have to stop paying anyone that wouldn't starve if they weren't paid for a few weeks, but this is contrary to the self-interest of politicians and hence they try to avoid it by making sympathy-deserving classes look threatened.
However, despite no military family or senior on a fixed income honestly being threatened by a shutdown or default, such an event would have macro-economic consequences - although their magnitude is unclear as economists have pointed out. The various recipients on the list above also make up a significant chunk of both private employers and corporations in which private investors own stocks, so a sudden freeze on payments to them sends a ripple effect through the economy - contributing to less buying in the short term and possible unemployment in the long term, and an unstable and hence plunging stock market.
The threat of a Federal credit rating downgrade is related to this as well. As with an individual's credit score, the rating agencies measure the government's projected capacity to pay its debts, and governments with lower ratings have to borrow at higher interest rates because they are less trustworthy borrowers. Refusing to pay existing debts is an automatic downgrade, which is why the government would continue to make the payments on its debts. Beyond this, factors that effect this capacity are income, stability, and existing expenditures and debt, all factors the make the credit rating more dependent on the economic situation at large than on a default; the rating agencies said there was a chance they would downgrade the US whether or not we went into default. Our economic system is stimulus and subsidy dependent, as described above. It is absolutely at the government's discretion to change this condition, but short-term proposals were limited to spending cuts and tax-hikes. Cuts to stimulus and subsidy supply threaten to increase unemployment and close dependent businesses, reducing revenue. Tax hikes cause rich and powerful interests to tighten their wallets and reduce production or move it overseas, also driving unemployment up and net revenue down. You've probably heard a million different proposals for how to institute either cuts or hikes but prevent these fallouts, but these fall under different ideas about changing the system, none of which had any real chance of clearing the political stalemate. This stalemate itself was a secondary threat to the credit rating, as unstable and indecisive borrowers are viewed as riskier.
Looking at the factual provisions of the deal described above, this discussion has hopefully made it evident why it accomplished absolutely nothing. There was no "poor, threatened paycheck recipient" to save by a last-minute deal, so that point is moot. The provisions are very short-term and force us to return to the same stalemating instability in a mere 3-4 months, so while we may have avoided the credit rating downgrade, this is likely to be temporary. The provisions haven't changed the system by a drop; but they have made significant cuts to heavily stimulated industries such as military contractors, education, and transportation, and threaten more cuts to these and other similar industries or, less likely, tax hikes. The plunging stock market is a result of both these real and threatened further cuts - something the politicians claimed a last-minute deal would avoid, and the cuts continue to threaten our credit rating, but I remind you tax hikes would not threaten it less.
So, who is unhappy about this situation, and who should be?
The Center:
In several posts about 8 months ago, I pointed out the erosion of party lines following the 2010 elections and the virtual lack of difference in economic terms between mainstream Democrats and mainstream Republicans. The fact that the House vote on this debt deal split the Republicans about 60/40 and the Democrats 50/50 should be sufficient evidence that my prophecy is coming true, but even these splits overestimate the power of the center.
Essentially, both center Republicans and center Democrats represent Keynesian economics, the very subsidy and stimulus dependent system described above, and you may skip this paragraph if you are familiar with how it works. Keynesian economics is a mixed model, one that allows free-enterprise but insists the government steps in with relatively high taxes to invest with stimulus and subsidies in areas it determines need help or whose growth it determines benefits society as a whole. This is the system most of the Western world has employed since the period following WWI, and much of the global economic collapse is attributable to its inherent unsustainability. Without dipping too deep into economic theory, government makes a piss-poor umpire of where to invest money - it is prone to inefficiency and inaccurate information, and it is also prone to sabotage by special interests rather than investing in a way that honestly serves the public good. Hence, over time, Keynesian economics makes the economy less and less efficient, forcing the government to become more and more involved in what is still a free-enterprise system. We have simply reached a point where it cannot become qualitatively more involved, and has destroyed the efficiency of the existing system.
Center Republicans and Democrats really only differ in how they want to preserve the system described above, roughly falling into the categories of Republicans wanting to cut direct benefit investments and increase business investments, and Democrats wanting to raise taxes on the rich to preserve direct benefit investments. The fringes in both parties, on the other hand, want to abandon the system of Keynesian economics altogether, although they are as different in their ideas of what to put in its place as they are similar in their hostility toward it. Together, these fringes have managed to keep the center from reaching a deal that preserves it, forcing it at the last minute into a half-deal that, as I discussed above, only looks like it preserved it on the very surface. Hence, the center politicians in both parties who put together this deal and the disproportionate amount of rich Keynesian profiteers (banks, military contractors, health care providers) that side with the center are rightfully angry about the way it went down, because it virtually guarantees the system will be derailed. However, neither these politicians nor their special interests deserve a drop of sympathy. They have fed upon the inefficiency of this system to profit off irresponsible investments that take resources away from the lives of everyday Americans for decades, and it's about damn time the warranty wore out on their panic-machine that makes people feel we couldn't do better without them.
The Right Fringe:
I'm cautious about referring to this fringe as the Tea Party, because it is in fact an odd concoction of fiscal hawks such as libertarians and stalwart conservatives, but also a small contingent of neo-cons dead set on preserving excessive military funding as it is evident the center has largely abandoned this interest. In any case, that neo-con contingent notwithstanding, this fringe wants to see Keynesian economics abandoned in favor of a pure free-enterprise, or capitalist, system. Those of you who know me at all should know that economically, my own views are not only with this fringe but as extreme as this fringe can possibly get, although I bitterly oppose them on social issues with the exception of the libertarians.
Many myths peddled about this fringe by the center-left that hates it with a passion are actually true about the center-right rather than the fringe. This fringe does not want to see entitlements reformed, cut, or saved, it wants to see them ABANDONED, but in political practicality it wants to see them phased out so as not to leave recipients who currently depend on them out in the cold. Similarly, this fringe is bitterly opposed to all subsidies and stimulus, including corporate subsidies and tax loopholes, and it wants to account for the resulting loss of investment by minimizing the functions of government so that more efficient private investment can step in. Government spending accounts for a large fraction of the economy because private industries who receive federal subsidies are impossible to compete with by those who do not, allowing them to be inefficient and a drain on the economy as a whole. Reducing stimulus payments to them within a Keynesian system in which many depend on them may be damaging, but eliminating said payments altogether would force them to be more efficient or go bankrupt to make room for more efficient providers through competition. The tax cuts this fringe endorses would be funded by said reduction in government functions, and it wants a reformed tax system that eliminates loop-holes and corporate welfare (both are types of stimulus), but that is also flatter because actual 40% taxes without loopholes would bankrupt anyone they are levied against in a heartbeat. This fringe does have some corporate sponsors, but these are largely industries that the center has abandoned or threatened to abandon as stimulus recipients in the Keynesian system, and who now need a free market system or they will be swept aside by the new subsidized classes within a decade. Interestingly, some of these are classic Keynesian profiteers such as the makers of traditional combustion engines, who are now threatened by the government's obsession with investments in "clean" and "renewable" energy.
This fringe is largely unhappy about the debt deal because it feels said deal does not go far enough. While I admire their passion, I say these people need to rediscover scientific practicality. They had the votes to stalemate the system with the left fringe on the other side, but they certainly didn't have the majority to get things to go their way. The Keynesian system has been damaged irreparably and its derailing has been almost guaranteed by this silly deal - the same thing all the pre-suppositional center-supporters are weeping over like it's a bad thing. What more could we opponents of Keynesianism possibly want? Yes, I know the answer, the right fringe wants to build its own system rather than have to compromise with the left fringe after the old one has fallen apart; but we could not have destroyed it without the left fringe, so regardless of how we feel about said fringe, we have to take that fact into consideration.
The Left Fringe:
Sometimes inaccurately called "Progressives" as Progressivism refers specifically to the Keynesian government investment in private industry that allegedly performs a public service, this political affiliation is largely hostile to private enterprise. It sees the failure of the Keynesian system as attributable to the excessive self-interest of the entrepreneurs affiliated with both the center-right and the center-left, and believes the government could efficiently perform the functions it currently has if it monopolized not only their funding, but their delivery. I am cautious about calling this fringe "socialists" because they don't believe in a fully government-run economic system. Rather, they place their faith in a Western European model where "essential services" such as banking, health care, and education, are both funded and operated by government with a "public good" motive, funded by high taxes on other industries which remain private.
As with the far-right, many myths peddled about this fringe are fabrications of the center right and actually true about the center-left but not the fringe. They are not on the campaign payroll of any corporation involved in public service provision as their ideology clearly suggests eliminating said corporations altogether; a public option to compete with private health care in terms of both insurers and providers that would undoubtedly drive private providers out of business being one example. Banks fear this fringe like the plague as its proposal is to cease them and their functions in favor of a government-operated central bank. This fringe is no friend to any energy company as it would not stop at investing in clean or renewable energy, but have the government take over its production and distribution. All of these expanded functions would be funded by higher taxes on other industries, and this fringe generally supports a globalistic approach to foreign policy which makes the US march in line with the orders of the UN and other supernational institutions, based on which it calls for massive reductions to military funding, making it no friend of the military-industrial complex.
As should be evident, at least in theory, this fringe is for reforming the system by eliminating the profiteers and making government investment more efficient and accountable. Again, those of you who know me at all realize I think this idea is a naive fairy-tale. Even without the profiteers' self-interest in the mix, the inherent inefficiency of top-down economic decisions would remain a colossal problem, causing runaway taxation to keep funding the growing costs of public services and eventual bankruptcy as revenue producers leave for lower-tax locations. THIS effect is what is bankrupting the countries in Europe that many in this fringe present as economic masterpieces - France, Greece, Italy, Ireland, Sweden. The elimination of profiteers is also a fairy tale in itself, seeing as every government service would still require the contracting of private services - pharmacy and medical equipment for health care, for example - unless the system were completely government-run, in which the inefficiency would bring bankruptcy almost instantly. Finally, trust in globalism is less of a fairy tale and more of a sick joke. International institutions are not trustworthy as 2/3 of the countries represented in them are run by violent criminals who have never won a fraud-free election and do not even begin to represent the interests of their people. While I in no way endorse the reprehensible imperialism on neo-cons, the US equally cannot place its balls in a jar and hand them over to the representatives of the Ghadhafis, Assads, and Putins of the world, because these people are in turn not answerable to anyone. However, the bubbling sentiment of agreement with this fringe on the left is evidence that the faith in Keynesianism of all the do-gooders who believe in world peace and collective prosperity has expired, and they now see the Keynesian profiteers of the center as part of the rich self-interest they abhor.
This fringe is furious about the way the deal went down because they once saw Obama as one of their own and many of them continue to believe the bulk of the Democratic Party agrees with them. Their naive wishful thinking gave them the impression that the country was moving toward the collective fairy-tale they envision, and this event has painfully derailed that fantasy. Nevertheless, the left fringe is as much a victor in this as the right fringe, having brought about the nearly inevitable demise of a system they no longer believe in. Like the right fringe, they should face the reality that once the center is too small to matter, they will have to compromise with their opponents in the other fringe. In this case, the enemy of my enemy is my unlikely, awkward, temporary ally, but that alliance must continue to hold until the monster in the middle is finished.
Political and Economic Projections Based On This Situation
I cannot make any sort of prediction about the outcome of the next debt ceiling debate in a few months, but I can almost guarantee it will be the final resting place of the Keynesian system, and this is what makes me happy about the debt deal because I absolutely despise this system and am thoroughly scientifically convinced its effects are 100% harm and 0 good. Should Congress be unable to reach a deal, or reach a halfass deal the way they did this time - very real possibilities because the fringes will continue to stalemate, and will behave even more radically as this debate will lead into the primary elections in which they face the center - the guaranteed cuts to military and entitlements that kick in as a result will kill the system instantly and painfully. These cuts will break stimulus enough for the industries to cease functioning, resulting in a chaotic and unpleasant - but short - transition to a different system, the details of which will depend on further economic developments. Should Congress reach any sort of deal, the cuts or even tax hikes this culminates in will make the system less - not more - stable, bringing back the debate within the next 2 years in a Congress that will in all likelihood have more representation for the fringes and make another similar deal simply impossible.
As for political predictions, I'm quite convinced voters will punish the center like a redheaded stepchild in 2012. The angry fringes represent angry partisan bases on both sides, and these bases are angriest at the center politicians in their own parties who voted in favor of this deal. The far left is furious with Obama and Reid; the far right with McConnell and Boehner. Come primary season, centrist incumbents will begin to drop like flies in both parties, making the Tea Party's victories in 2010 look tame in comparison. Mitch McConnell, specifically, has likely signed his own political death sentence by brokering this deal, seeing as he is up for re-election and from Kentucky, the same state that elected Rand Paul to Senate in 2010, and whose Republican Party gave Paul a landslide victory over his opponent endorsed by none other than McConnell himself. If that's not a prophecy, I don't know what is. In the general election in 2012, partisanship is likely to prevail and the balance of power is not likely to shift by much in either direction, but the primary standoffs are likely to make both fringes swell in numbers, and fringe candidates from one party are likely to destroy centrist candidates from the other where they meet, because base endorsement from centrists is likely to go to third parties and independents, tipping the balance in terms of votes, volunteers, campaign funds, and so forth. I was beginning to buy into the idea that Republicans are too divided and their candidates too fringy to take down Obama in 2012, but in light of this event Obama may just be destroyed by this last effect I described. The far left now adamantly hates him, and all that is required for his demise is a semi-serious third party or independent run on the left that takes away 4-5% of his base votes and a lot of volunteers. If you think this is a far-fetched possibility, just look at 1992, and 2000.
Tuesday, May 10, 2011
The Beauty.... errr, I Mean Costs, of Popularized Libertarianism
10 years ago, in 4 out of 5 cases, telling someone my political identification was "libertarian" drew a blank stare followed by a neutrally curious "what's that?" Most of those who knew what the word means would respond to it much the same way people respond to hearing the mention of any political identification, with instinctive praise or disdain. Most of this minority familiar with the word, however, based their praise or disdain on an accurate and somewhat scientifically valid understanding of the word's meaning; whether they agreed or disagreed, they could mount a credible, rational argument based in facts to defend their standing.
My, how the times have changed. I honestly can't remember the last time I've encountered the blank, neutral response described above. The praise or disdain paradigm remains almost unchanged when it comes to those familiar; but with the growing number of familiar people, what has really suffered is the ratio of those who have heard it to those who accurately understand it. This applies to both praisers and disdainers - they do so having absolutely no idea of it's definition and make arguments in favor or against that are silly, elementary, and make easy effigies for opponents to burn. As should be obvious from what I described in the first paragraph, I'd nary heard before the last couple of years a praise or criticism of libertarianism that reeked of this ignorance and scientific inaccuracy - the kind of qualities most arguments regarding both traditional conservatism and traditional liberalism are predominantly composed of. While I firmly affiliate with the pro-libertarian arguments, I nevertheless give credit to the counter-arguments rooted in scholarly discourse - libertarianism is not perfect and its hypothetical nature leaves much room for speculative dissent. What interests me, however, is the recent onslaught of popular criticisms of this political identification from politically ignorant detractors; the knee-jerk hisses of "they're racist!" and "they're kooky, conspiracy-believing, obsolete fundamentalists!", and mockery of libertarians as participating in and benefitting from the system while claiming to disagree with it. This doesn't insult me, it makes me hopeful that libertarianism will soon emerge as a mainstream school of thought in the United States. What is clear is that in becoming a popularly accepted political movement, even if it isn't quite mainstream at this point in time, libertarianism has become marginalized, and if you think this is BAD for libertarianism, you are simply delusional.
Essentially, the silly attacks on libertarians boil down to two grossly logically flawed marginalizations; attempting to paint all libertarians in the colors of their kookiest and most socially unacceptable supporters, and pointing out that they engage in questionable political practices like everyone else. The idiocy of the first should be obvious and I'm sure we've all witnessed it. Libertarian politicians, many blogs and forums affiliated with them, their campaign events, and so forth, have a notable history of attracting kooks as supporters and contributors. These kooks include both political extremists whose views and agendas mainstream Americans find so abhorrant that they are threatened with censorship such as NeoNazis, militant anti-immigration organizations, and religious fundamentalists of the Christian variety; and political outcasts who are free to express their views but are unlikely to be taken seriously such as truthers, birthers, globalist conspiracy theorists of various types, and so forth. The attractiveness of libertarianism to these organizations is fairly obvious - the offensive type think themselves oppressed and find that a libertarian model would allow them to freely express their objectionable views, the outcast type find that libertarians agree with them on a number of policy proposals such as the abolition of the Federal Reserve and a dissociation from various corrupt and inefficient supernational organizations, the far more rational and scientific backing of these proposals from libertarians and our significantly less extreme proposed means notwithstanding. However, marginalizing libertarians as agreeing with either of these types of supporters is simply idiotic. For one, neither type of kooks actually identify themselves as libertarian; they merely see libertarianism as a vehicle toward more recognition and liberty of expression for themselves. The liberty of expression expectation may be partially accurate, but the expectation that their ideas will become mainstream through a rise of libertarianism is quite flawed wishful thinking - an unsurprising fallacy when committed by Nazi apologists and conspiracy theorists, but disturbing hysteria when commited by detractors. More importantly, however, judging a political identification by segments of idiot-supporters is a horrendous hasty generalization. I'd be thoroughly surprised if the ratio of politically ignorant, extreme thinkers to intelligent and educated ones in the ranks of supporters and affiliates to either major party wasn't exponentially that of libertarians; but alas, the research hasn't been done to compare the two. Nevertheless, using availability sampling, think of how many kooks you've met who identify as Democrats or, more importantly, support and vote for them, because they believe that corporations and a profit-based model are the root of all evil, that a socialist or at least almost-socialist economic model would create some sort of earthly utopia, and that said party represents minorities, the poor, the underpriviledged, and so forth. Regardless of what you think of such political stances, the fact is that the Democratic Party doesn't represent them and NEVER has; it's policies are at best a Keyensian model that involves plenty of corporate power and trickle-down economics. Conversely, think of how many kooks you've met that have a similar relationship with Republicans because they claim this party represents Christian moral values, a commitment to American nationalism and security, and (these make me chuckle every time) limited government and a free-market economic model. Again, regardless of your views on said principles, the idea that Republicans represent them is an absolute joke and ALWAYS has been, their stance being at best a mixed supply-side/Keyensian model that is slightly less tolerant of social practices objectionable to Christianity than Democrats', but not by much. Just to not leave anyone out, far-left parties such as Greens and Peace and Freedom and the emerging Progressive fringe in the Democratic Party are also often marginalized for the support they get from Communist apologetics, militant minority movements like the Black Panthers and MEChA, and religious extremists of the non-Christian variety - and like the other political affiliations, these parties don't in fact espouse said supporters' beliefs and the supporters' don't claim to identify with said parties. Despite the obvious disconnect between these supporters and the respective political movements, each movement also has a history of scrutiny and logically flawed criticism that marginalizes it as agreeing with said supporters, and the more known the movement in mainstream discourse, the greater percentage of it's critics rely solely on this marginalization. The takeaway message is that every political movement has its share of kooky, ignorant, and extreme supporters, and whether or not they actually claim to identify with said movement, it is silly to ascribe said supporters' policy proposals to the movement until you can present statistical evidence that they are a majority of it or identify politicians wearing the movement badge that have advanced said policy proposals. Until then, "racist, fundamentalist libertarians" is the equivalent of "pinko, islamist-apologist democrats" and "greedy, corporate-conspiring republicans"; and anyone who advocates any of these stereotypes should be met head-on with the reminder that they sound like their idiot-counterpart from the other side(s).
The accusation of hypocrisy in questionable political practices is less widespread, but I feel I should at least explain it. Ever heard someone make fun of people who disagree with public welfare programs for collecting social security, taking out student loans, driving on public roads, and so forth? Ever heard the accusation that libertarians "buy" their popularity by advertising straw polls and events, bussing people to participate, and so forth? Yes, we do all that. My counter-question is where anyone got the idea that we are above it. As far as the use of public services, one of the most fundamental and salient libertarian economic arguments is that a system that offers these services eliminates the possibility of any other option even if it doesn't effectively BAN them, leaving common people no choice but to rely on the corruption and inefficiency of the welfare state. As I've discussed multiple times in previous posts, government subsidies and regulations drive up the costs of whatever they subsidize - education, retirement, roads - making it impossible for free market alternatives to compete, then the government rations its inefficient services so it looks like every average person has an opportunity, although as study after study shows, efficiency may be compromised but equality is far from achieved. Using these services because there aren't other options doesn't make libertarians hypocrites or secretly thankful for their existence - by that logic all residents of the USSR who disagreed with that country's economic policies should have lived in the streets and remained unemployed because all housing and labor were completely top-down government controlled. We advocate the theory that affordable alternatives don't exist because the government has regulated them away, that doesn't mean we aren't people and don't need to use the services like everyone else in the absence of said alternatives, we simply have the courage to point out they make the situation worse, not better. As for political behavior, quite simply - what political movement DOESN'T do that? When the SEIU bussed supporters the to capital in Wisconsin, that was "popular discontent", but when libertarians bus college students to a rally or debate where a politician we like is appearing, that's "buying popularity"? Contextual reliability people, please. Further, every political movement CLAIMS to have popular support as a result of such targeted antics to LOOK popular, it is a political strategy that libertarians have shown prowess at just like everyone else. People who BELIEVE these claims, such as the idea that straw polls or event attendance are scientifically representative of any sort of political popularity, are simply ignorant of how politics works; and seeing as most Americans fit into this class, it makes sense to utilize such antics. Getting mad at libertarians for succeeding at it is just desperate denial that libertarianism is becoming popularly accepted; both major parties have used these tactics for DECADES.
So, the marginalization of libertarianism, at least in my view, is an inaccurate portrayal of it; but it is obviously a more widespread view of it than 10 years ago, how is that a GOOD thing for libertarianism? Well, to put it bluntly, they call us "racist, fundamentalist hypocrites", but at least they call us. Inaccurate popular detraction is a fundamental quality of any well-known, even semi-mainstream movement - I touched on the inaccurate popular detractions of both Republicans and Democrats. I used to say that libertarianism has a difficult time competing with mainstream movements because it is dominated by politically-educated intellectuals and it's only critics are also people who fit that description. Complex and hypothetical, it has little mass-appeal to the overwhelming majority of Americans who think of politics in layman's terms, but support from a cross-section of said majority is necessary for political success. The emergence of popular detractors has resulted from a focus on libertarianism - particularly as part of attempts to marginalize the Tea Party in 2009 - by media forms that are frequented by average Americans, and such attention grants us not only popular detractors, but popular supporters as well. Witnessing the mind-numbing propaganda that calls libertarians racist and extreme, Americans become interested in seeing this "monstrous movement" for themselves whether it's to confirm these views or seek more balanced descriptions. Embarking on this search, a significant plurality find that they agree with libertarianism to some extent, especially the more visceral messages such as "downsize government, it's inefficient and corrupt" or "stop spending money on foreign aid, we're broke here at home," even if said messages are oversimplified. As for the equivalent plurality that begin with ignorance and emerge hating us, guess what - they weren't voting for us anyway! The net result is a gain of supporters, and if anything, the detractor plurality does us a favor by spreading our message further; their mudslinging netting more supporters gained than their ignorance. So, if you think we libertarians are crazy and extreme, PLEASE tell your friends and family, it is the least you can do to help us secure a mainstream presence in this country's political landscape. :}
My, how the times have changed. I honestly can't remember the last time I've encountered the blank, neutral response described above. The praise or disdain paradigm remains almost unchanged when it comes to those familiar; but with the growing number of familiar people, what has really suffered is the ratio of those who have heard it to those who accurately understand it. This applies to both praisers and disdainers - they do so having absolutely no idea of it's definition and make arguments in favor or against that are silly, elementary, and make easy effigies for opponents to burn. As should be obvious from what I described in the first paragraph, I'd nary heard before the last couple of years a praise or criticism of libertarianism that reeked of this ignorance and scientific inaccuracy - the kind of qualities most arguments regarding both traditional conservatism and traditional liberalism are predominantly composed of. While I firmly affiliate with the pro-libertarian arguments, I nevertheless give credit to the counter-arguments rooted in scholarly discourse - libertarianism is not perfect and its hypothetical nature leaves much room for speculative dissent. What interests me, however, is the recent onslaught of popular criticisms of this political identification from politically ignorant detractors; the knee-jerk hisses of "they're racist!" and "they're kooky, conspiracy-believing, obsolete fundamentalists!", and mockery of libertarians as participating in and benefitting from the system while claiming to disagree with it. This doesn't insult me, it makes me hopeful that libertarianism will soon emerge as a mainstream school of thought in the United States. What is clear is that in becoming a popularly accepted political movement, even if it isn't quite mainstream at this point in time, libertarianism has become marginalized, and if you think this is BAD for libertarianism, you are simply delusional.
Essentially, the silly attacks on libertarians boil down to two grossly logically flawed marginalizations; attempting to paint all libertarians in the colors of their kookiest and most socially unacceptable supporters, and pointing out that they engage in questionable political practices like everyone else. The idiocy of the first should be obvious and I'm sure we've all witnessed it. Libertarian politicians, many blogs and forums affiliated with them, their campaign events, and so forth, have a notable history of attracting kooks as supporters and contributors. These kooks include both political extremists whose views and agendas mainstream Americans find so abhorrant that they are threatened with censorship such as NeoNazis, militant anti-immigration organizations, and religious fundamentalists of the Christian variety; and political outcasts who are free to express their views but are unlikely to be taken seriously such as truthers, birthers, globalist conspiracy theorists of various types, and so forth. The attractiveness of libertarianism to these organizations is fairly obvious - the offensive type think themselves oppressed and find that a libertarian model would allow them to freely express their objectionable views, the outcast type find that libertarians agree with them on a number of policy proposals such as the abolition of the Federal Reserve and a dissociation from various corrupt and inefficient supernational organizations, the far more rational and scientific backing of these proposals from libertarians and our significantly less extreme proposed means notwithstanding. However, marginalizing libertarians as agreeing with either of these types of supporters is simply idiotic. For one, neither type of kooks actually identify themselves as libertarian; they merely see libertarianism as a vehicle toward more recognition and liberty of expression for themselves. The liberty of expression expectation may be partially accurate, but the expectation that their ideas will become mainstream through a rise of libertarianism is quite flawed wishful thinking - an unsurprising fallacy when committed by Nazi apologists and conspiracy theorists, but disturbing hysteria when commited by detractors. More importantly, however, judging a political identification by segments of idiot-supporters is a horrendous hasty generalization. I'd be thoroughly surprised if the ratio of politically ignorant, extreme thinkers to intelligent and educated ones in the ranks of supporters and affiliates to either major party wasn't exponentially that of libertarians; but alas, the research hasn't been done to compare the two. Nevertheless, using availability sampling, think of how many kooks you've met who identify as Democrats or, more importantly, support and vote for them, because they believe that corporations and a profit-based model are the root of all evil, that a socialist or at least almost-socialist economic model would create some sort of earthly utopia, and that said party represents minorities, the poor, the underpriviledged, and so forth. Regardless of what you think of such political stances, the fact is that the Democratic Party doesn't represent them and NEVER has; it's policies are at best a Keyensian model that involves plenty of corporate power and trickle-down economics. Conversely, think of how many kooks you've met that have a similar relationship with Republicans because they claim this party represents Christian moral values, a commitment to American nationalism and security, and (these make me chuckle every time) limited government and a free-market economic model. Again, regardless of your views on said principles, the idea that Republicans represent them is an absolute joke and ALWAYS has been, their stance being at best a mixed supply-side/Keyensian model that is slightly less tolerant of social practices objectionable to Christianity than Democrats', but not by much. Just to not leave anyone out, far-left parties such as Greens and Peace and Freedom and the emerging Progressive fringe in the Democratic Party are also often marginalized for the support they get from Communist apologetics, militant minority movements like the Black Panthers and MEChA, and religious extremists of the non-Christian variety - and like the other political affiliations, these parties don't in fact espouse said supporters' beliefs and the supporters' don't claim to identify with said parties. Despite the obvious disconnect between these supporters and the respective political movements, each movement also has a history of scrutiny and logically flawed criticism that marginalizes it as agreeing with said supporters, and the more known the movement in mainstream discourse, the greater percentage of it's critics rely solely on this marginalization. The takeaway message is that every political movement has its share of kooky, ignorant, and extreme supporters, and whether or not they actually claim to identify with said movement, it is silly to ascribe said supporters' policy proposals to the movement until you can present statistical evidence that they are a majority of it or identify politicians wearing the movement badge that have advanced said policy proposals. Until then, "racist, fundamentalist libertarians" is the equivalent of "pinko, islamist-apologist democrats" and "greedy, corporate-conspiring republicans"; and anyone who advocates any of these stereotypes should be met head-on with the reminder that they sound like their idiot-counterpart from the other side(s).
The accusation of hypocrisy in questionable political practices is less widespread, but I feel I should at least explain it. Ever heard someone make fun of people who disagree with public welfare programs for collecting social security, taking out student loans, driving on public roads, and so forth? Ever heard the accusation that libertarians "buy" their popularity by advertising straw polls and events, bussing people to participate, and so forth? Yes, we do all that. My counter-question is where anyone got the idea that we are above it. As far as the use of public services, one of the most fundamental and salient libertarian economic arguments is that a system that offers these services eliminates the possibility of any other option even if it doesn't effectively BAN them, leaving common people no choice but to rely on the corruption and inefficiency of the welfare state. As I've discussed multiple times in previous posts, government subsidies and regulations drive up the costs of whatever they subsidize - education, retirement, roads - making it impossible for free market alternatives to compete, then the government rations its inefficient services so it looks like every average person has an opportunity, although as study after study shows, efficiency may be compromised but equality is far from achieved. Using these services because there aren't other options doesn't make libertarians hypocrites or secretly thankful for their existence - by that logic all residents of the USSR who disagreed with that country's economic policies should have lived in the streets and remained unemployed because all housing and labor were completely top-down government controlled. We advocate the theory that affordable alternatives don't exist because the government has regulated them away, that doesn't mean we aren't people and don't need to use the services like everyone else in the absence of said alternatives, we simply have the courage to point out they make the situation worse, not better. As for political behavior, quite simply - what political movement DOESN'T do that? When the SEIU bussed supporters the to capital in Wisconsin, that was "popular discontent", but when libertarians bus college students to a rally or debate where a politician we like is appearing, that's "buying popularity"? Contextual reliability people, please. Further, every political movement CLAIMS to have popular support as a result of such targeted antics to LOOK popular, it is a political strategy that libertarians have shown prowess at just like everyone else. People who BELIEVE these claims, such as the idea that straw polls or event attendance are scientifically representative of any sort of political popularity, are simply ignorant of how politics works; and seeing as most Americans fit into this class, it makes sense to utilize such antics. Getting mad at libertarians for succeeding at it is just desperate denial that libertarianism is becoming popularly accepted; both major parties have used these tactics for DECADES.
So, the marginalization of libertarianism, at least in my view, is an inaccurate portrayal of it; but it is obviously a more widespread view of it than 10 years ago, how is that a GOOD thing for libertarianism? Well, to put it bluntly, they call us "racist, fundamentalist hypocrites", but at least they call us. Inaccurate popular detraction is a fundamental quality of any well-known, even semi-mainstream movement - I touched on the inaccurate popular detractions of both Republicans and Democrats. I used to say that libertarianism has a difficult time competing with mainstream movements because it is dominated by politically-educated intellectuals and it's only critics are also people who fit that description. Complex and hypothetical, it has little mass-appeal to the overwhelming majority of Americans who think of politics in layman's terms, but support from a cross-section of said majority is necessary for political success. The emergence of popular detractors has resulted from a focus on libertarianism - particularly as part of attempts to marginalize the Tea Party in 2009 - by media forms that are frequented by average Americans, and such attention grants us not only popular detractors, but popular supporters as well. Witnessing the mind-numbing propaganda that calls libertarians racist and extreme, Americans become interested in seeing this "monstrous movement" for themselves whether it's to confirm these views or seek more balanced descriptions. Embarking on this search, a significant plurality find that they agree with libertarianism to some extent, especially the more visceral messages such as "downsize government, it's inefficient and corrupt" or "stop spending money on foreign aid, we're broke here at home," even if said messages are oversimplified. As for the equivalent plurality that begin with ignorance and emerge hating us, guess what - they weren't voting for us anyway! The net result is a gain of supporters, and if anything, the detractor plurality does us a favor by spreading our message further; their mudslinging netting more supporters gained than their ignorance. So, if you think we libertarians are crazy and extreme, PLEASE tell your friends and family, it is the least you can do to help us secure a mainstream presence in this country's political landscape. :}
Wednesday, March 16, 2011
Why I'm Tired Of Hearing About the Wisconsin Protests
I know this is actually a few days belated, as Japan and the Federal budget have largely pushed the Wisconsin issue out of everyone's sight in the media, but that only serves to underscore another "I told you so" message. Simply put, I'm tired of those protests being represented as some sort of civil rights march that is comparable to the 1960s, Tahrir Square, or even the union marches of the Gilded Age. Such comparisons are silly and inaccurate, and it has nothing to do with my stance on the issue itself, this post is about the media coverage and people's ignorant responses to it.
Grassroots As A Sequoia, and Almost As New
Like it or not, government employee unions are a gargantuan network of national political lobbies. Yes the various corporate lobbies put together are bigger and contribute more money to political campaigns, although it is just plain stupid to assume all corporate campaign money goes to the Republicans. The media doesn't even have the balls to make such a ridiculous assertion, it just says "the corporations contribute way more!" and lets the ignorant reader add "to the Republicans, of course!" for himself. Now, I'm not making the claim that the unions are good or bad, just that they are an established political force; not some oppressed, newly formed grassroots movement. They are also not fighting FOR a legislation that will level the playing field, assist the interests they represent, or change the way politics is done in this country; they are protesting in an attempt to STOP legislation that weakens them and threatens their financial base. This is not comparable to the unions of the 1890s or the 1960s civil rights marches or Tahrir Square for the simple reason that those forces fought for the introduction of new, novel, unprecedented reform that had not been seen before them.
With that in mind, supporters of the protests should recognize just how unsuccessful the track record is of protests AGAINST a change in this country's history. The most prominent example are the protests in the South AGAINST the implementation of public school integration after the Brown vs Board of Education ruling in 1964. It is tempting but also silly to compare those protests to extremist minorities like the Westboro Baptist Church. Anti-integration was a massive movement, with 10,000s of protesters representing 100s of interlocked organizations in various cities and states that were well-established and funded. They organized demonstrations, picketed in front of schools and even blocked the entrances in some cases, and so forth. Yet the Federal Government insisted that a Supreme Court ruling had more political weight than 10,000s of people with placards and loudspeakers, and eventually dispatched both the military and the FBI to enforce the ruling in specifically resistant locations and break up vigilante organizations trying to sabotage it. The grand majority of the arguments I've seen in favor of the protests and the state legislators fleeing the legislature has been along the lines of them being "righteous" and "powerful" by virtue of involving 10,000s of people, and the politicians who ignored them "defying the will of the people" for the same reason. Quite simply, folks, I call bullshit. By that logic, the anti-integration protests were "righteous" and "should have succeeded".
In my personal opinion, the Wisconsin protests are comparable to neither civil rights marches nor the anti-integration protests, as both of those were clashes between broad coalitions seeking to implement or obstruct widespread socio-political reform. The Wisconsin protests, no matter how much the union bosses attempt to appeal to a broader base by claiming to "stand for the middle class" and be "fighting a corporatist agenda", are a laughable attempt to block a rather narrowly aimed economic reform against themselves.
Regardless Of Your Cause, Don't Point 50,000 Guns If You're Only Willing To Pull 50 Triggers
We've hopefully established that the unions are more counter-revolutionary than revolutionary, and regardless of which side the reader agrees with, the government being on the side of those demanding change tends to deliver that change, whereas the reverse is not necessarily true. Now let's examine why "righteousness," perceived or real, makes very little difference, and the impact of numbers is overstated and confounded in other factors. There are a number of lesser known protests in recent history representing causes far less despicable than opposition to integration that are actually far more comparable to the Wisconsin protests in terms of number and inclination, and they share very poor prognoses. Two that come to my mind in recent years in CA are the gay rights protests in front of the Mormon Church in Los Angeles the day after Prop 8 passed, and the wave of protests that takes place each time the state government announces a new series of budget cuts to public education, whether it is higher education or K-12. Not one such funding cut has yet failed to be signed into law, and Prop 8 is still in effect. The gay rights lobbies are still in the process of challenging Prop 8 in the Federal judicial system, but both sides of the issue said they would do so if the initiative didn't go their way long before the vote; it is kind of silly to attribute this to a half-materialized one-day protest. As for numbers, 50,000 protesters may seem intimidating, but for a State like Wisconsin it is actually quite negligible as a voting bloc, and the politicians they oppose simply don't care to appease them as the grand majority of them are the opposition's base, and would never vote for who they are protesting anyway. More importantly than even that, it is well known that these protests are professionally organized, with a variety of incentives, free transportation, and other rewards doled out by the massive organizing lobbies to boost their numbers and look like they have broad support. Not that people turning out in response to organization and incentives isn't still meaningful protest, but it is quite different from people taking to the streets in random discontent, and such protesters are far less likely to take their activism to the level of being hurt or arrested for the cause, as was clearly demonstrated in Wisconsin. Eugene Debs, Martin Luther King, and the January 25th Youth did not win by loading buses of people and parading them in front of the government buildings with a police escort provided by the same government they are calling oppressive. All 3 of these movements, and to some extent the anti-integration movement mentioned above, were really not "protests" but forms of civil disobedience. These were activists who intentionally engaged in acts forbidden by laws that they found to be unfair and repressive, in a concerted effort to provoke the government to forcefully stop such peaceful rebellion as a woman refusing to leave her bus seat. The violent repression then aggravated an otherwise complacent general population that agreed with the activists, leading to a public outpouring of non-compliance in proportions the government did not have resources to stand up to. The anti-integration protests attempted some of these tactics, but they simply could not muster the popular support required to succeed as the general public was fed up with the racist hypocrisy of segregation and saw them as deserving of being gassed, clubbed, and arrested.
The lesson to learn here is that in a country like the US where protests are common, considered a reasonable means of expression, and not fired upon, they very rarely accomplish anything; especially when they are opposition protests to a proposed change. Whether or not the Wisconsin union protesters would have been viewed as deserving or as activist victims if the protests had escalated to violent clashes with police is a difficult call to make, but it is a moot point as despite claiming 50,000 protesters, they simply lacked the will to go from protest to active non-compliance. Yes, a few people did get arrested and roughed up by police for refusing to leave the Capitol, but not remotely enough for anyone to care to praise either side and raise the ante to escalation and widespread non-compliance. Quite simply, the unions proved themselves to be nothing more than a band of toddlers throwing a fit because their father Scott Walker refused to give them ice cream before dinner, and when he said "OK, then go to bed hungry", they sat down at the table and put on their bibs, demonstrating their grudge with only an upset facial expression that makes adults laugh. Rebellion of the well-fed fails specifically because it is unwarranted by virtue of the rebels not having a NEED to succeed. Eugene Debs would NOT be proud.
Grassroots As A Sequoia, and Almost As New
Like it or not, government employee unions are a gargantuan network of national political lobbies. Yes the various corporate lobbies put together are bigger and contribute more money to political campaigns, although it is just plain stupid to assume all corporate campaign money goes to the Republicans. The media doesn't even have the balls to make such a ridiculous assertion, it just says "the corporations contribute way more!" and lets the ignorant reader add "to the Republicans, of course!" for himself. Now, I'm not making the claim that the unions are good or bad, just that they are an established political force; not some oppressed, newly formed grassroots movement. They are also not fighting FOR a legislation that will level the playing field, assist the interests they represent, or change the way politics is done in this country; they are protesting in an attempt to STOP legislation that weakens them and threatens their financial base. This is not comparable to the unions of the 1890s or the 1960s civil rights marches or Tahrir Square for the simple reason that those forces fought for the introduction of new, novel, unprecedented reform that had not been seen before them.
With that in mind, supporters of the protests should recognize just how unsuccessful the track record is of protests AGAINST a change in this country's history. The most prominent example are the protests in the South AGAINST the implementation of public school integration after the Brown vs Board of Education ruling in 1964. It is tempting but also silly to compare those protests to extremist minorities like the Westboro Baptist Church. Anti-integration was a massive movement, with 10,000s of protesters representing 100s of interlocked organizations in various cities and states that were well-established and funded. They organized demonstrations, picketed in front of schools and even blocked the entrances in some cases, and so forth. Yet the Federal Government insisted that a Supreme Court ruling had more political weight than 10,000s of people with placards and loudspeakers, and eventually dispatched both the military and the FBI to enforce the ruling in specifically resistant locations and break up vigilante organizations trying to sabotage it. The grand majority of the arguments I've seen in favor of the protests and the state legislators fleeing the legislature has been along the lines of them being "righteous" and "powerful" by virtue of involving 10,000s of people, and the politicians who ignored them "defying the will of the people" for the same reason. Quite simply, folks, I call bullshit. By that logic, the anti-integration protests were "righteous" and "should have succeeded".
In my personal opinion, the Wisconsin protests are comparable to neither civil rights marches nor the anti-integration protests, as both of those were clashes between broad coalitions seeking to implement or obstruct widespread socio-political reform. The Wisconsin protests, no matter how much the union bosses attempt to appeal to a broader base by claiming to "stand for the middle class" and be "fighting a corporatist agenda", are a laughable attempt to block a rather narrowly aimed economic reform against themselves.
Regardless Of Your Cause, Don't Point 50,000 Guns If You're Only Willing To Pull 50 Triggers
We've hopefully established that the unions are more counter-revolutionary than revolutionary, and regardless of which side the reader agrees with, the government being on the side of those demanding change tends to deliver that change, whereas the reverse is not necessarily true. Now let's examine why "righteousness," perceived or real, makes very little difference, and the impact of numbers is overstated and confounded in other factors. There are a number of lesser known protests in recent history representing causes far less despicable than opposition to integration that are actually far more comparable to the Wisconsin protests in terms of number and inclination, and they share very poor prognoses. Two that come to my mind in recent years in CA are the gay rights protests in front of the Mormon Church in Los Angeles the day after Prop 8 passed, and the wave of protests that takes place each time the state government announces a new series of budget cuts to public education, whether it is higher education or K-12. Not one such funding cut has yet failed to be signed into law, and Prop 8 is still in effect. The gay rights lobbies are still in the process of challenging Prop 8 in the Federal judicial system, but both sides of the issue said they would do so if the initiative didn't go their way long before the vote; it is kind of silly to attribute this to a half-materialized one-day protest. As for numbers, 50,000 protesters may seem intimidating, but for a State like Wisconsin it is actually quite negligible as a voting bloc, and the politicians they oppose simply don't care to appease them as the grand majority of them are the opposition's base, and would never vote for who they are protesting anyway. More importantly than even that, it is well known that these protests are professionally organized, with a variety of incentives, free transportation, and other rewards doled out by the massive organizing lobbies to boost their numbers and look like they have broad support. Not that people turning out in response to organization and incentives isn't still meaningful protest, but it is quite different from people taking to the streets in random discontent, and such protesters are far less likely to take their activism to the level of being hurt or arrested for the cause, as was clearly demonstrated in Wisconsin. Eugene Debs, Martin Luther King, and the January 25th Youth did not win by loading buses of people and parading them in front of the government buildings with a police escort provided by the same government they are calling oppressive. All 3 of these movements, and to some extent the anti-integration movement mentioned above, were really not "protests" but forms of civil disobedience. These were activists who intentionally engaged in acts forbidden by laws that they found to be unfair and repressive, in a concerted effort to provoke the government to forcefully stop such peaceful rebellion as a woman refusing to leave her bus seat. The violent repression then aggravated an otherwise complacent general population that agreed with the activists, leading to a public outpouring of non-compliance in proportions the government did not have resources to stand up to. The anti-integration protests attempted some of these tactics, but they simply could not muster the popular support required to succeed as the general public was fed up with the racist hypocrisy of segregation and saw them as deserving of being gassed, clubbed, and arrested.
The lesson to learn here is that in a country like the US where protests are common, considered a reasonable means of expression, and not fired upon, they very rarely accomplish anything; especially when they are opposition protests to a proposed change. Whether or not the Wisconsin union protesters would have been viewed as deserving or as activist victims if the protests had escalated to violent clashes with police is a difficult call to make, but it is a moot point as despite claiming 50,000 protesters, they simply lacked the will to go from protest to active non-compliance. Yes, a few people did get arrested and roughed up by police for refusing to leave the Capitol, but not remotely enough for anyone to care to praise either side and raise the ante to escalation and widespread non-compliance. Quite simply, the unions proved themselves to be nothing more than a band of toddlers throwing a fit because their father Scott Walker refused to give them ice cream before dinner, and when he said "OK, then go to bed hungry", they sat down at the table and put on their bibs, demonstrating their grudge with only an upset facial expression that makes adults laugh. Rebellion of the well-fed fails specifically because it is unwarranted by virtue of the rebels not having a NEED to succeed. Eugene Debs would NOT be proud.
Sunday, March 13, 2011
The Pence Amendment: A[nother] Lesson For Progressives
"Basing public policy around the moral values you'd LIKE people to have is like basing your daily commute to work on the fact that you'd LIKE to be able to fly; it's an entertaining little fantasy, but good luck explaining to your boss that you 'couldn't have accounted' for gravity."
I have many friends who openly and proudly identify themselves as "Progressives", among them to some extent my good friend and the co-host of our new Webcast "Edge of Chaos", Joe Ryan. In recent weeks, with the onslaught of policy proposals that threaten and limit abortions from the far right both in the Federal and various State legislatures, I have seen many of these people respond with outrage and ridicule, calling this "theocracy," "mysogyny," and an "attack on women's rights" or "reproductive rights". While I agree with Progressives that abortion should be legal and accessible (for reasons I may address in a later post that are completely unrelated to this ideological banter), my response to their outrage is usually "I told you so". These policies, specifically the Pence Amendment, are the direct and inevitable result of the well-intentioned naivete of decades of Progressive policies that have given the government the power to meddle in such affairs, and what's worse, they are only the latest of multiple manifestations of this effect. Yet Progressives continue to place their faith in government and blame its opponents for all of society's problems. In order to understand what I'm saying rather than dismissing it as crazy or extreme, the reader will need significant background before the discussion of modern events.
In This Post:
What is Progressivism?
Progressivism's History and Scorecard
The Pence Amendment and Progressive Stubborness
What is Progressivism?
For those entirely politically uninclined or simply unclear on this topic, let me briefly explain the meaning of this word. Progressivism is broadly defined as the political belief - whether theoretical or ideological - that government involvement in the economy and social policy is necessary to ensure the greatest possible progress of society. Progressivism does not necessarily entail belief in a state-run or socialist economy. In the modern US, the political affiliation is typically associated with the far but not militant left; it endorses a nationalised rather than independent central bank, greater regulations and higher taxation of the rich and environmentally costly industry, government investments in education, health care, and clean energy - although these can remain privately run, "positive discrimination" policies such as affirmative action and laws that protect or even mandate union membership, and social policies that restrict expression deemed dangerous and offensive such as television violence and hate speech. This list is by far non-exhaustive, but should make the profile of a typical modern-day Progressive clear. However, Progressivism can span party lines and economic inclinations. The first openly Progressive US President - Teddy Roosevelt - was a Republican, and many of Richard Nixon's policies can also be labeled Progressive with relatve ease. Similarly, supply-side economic policy - government subsidies and protection of the largest and most powerful private industries - can be defined broadly as Progressive, seeing as nearly every politician that engages in such policies claims to do so because the failure of these industries would bring excessive costs to average citizens, whereas their success creates a common good for everyone to share. Even some socially conservative policies - such as vice prohibition - can fit the Progressive label, as the government imposes a restriction on personal choice that is claimed to bring greater benefit to society as a whole.
I find that I agree with modern Progressives on the grand majority of what they hope to accomplish. But then, I would say their goals are shared by most political ideologies with the exception of stalwart social conservatives. Who would argue with a quality education for every child, adequate food/shelter/necessities for every American, a clean environment, secure and humane working conditions, equality for minorities of all types, and (with the exception of some social conservatives) freedoms of expression, reproductive choice, and various forms of affiliation including religion? My problem with Progressives - even limited to the modern definition - is their methodology for accomplishing any of these goals, a methodology that despite its predominantly humane intentions has a long and profound history of blatant disregard for the nature of both the individual human mind and human society as a whole. What's worse, each time this disregard brings about the opposite of what Progressivism intended to achieve, Progressives have an extremely difficult time taking responsibility, instead blaming "meddlers" and "saboteurs" that destroyed their rosey vision. Do I sound extreme and outrageous?
Well, let's examine Progressivism's History and its "Scorecard" of "successful policies".
Origins:
Progressivism originated in the late 1800s as a movement of proponents of greater government involvement in the regulation of society. Its adherents had little else in common, but their primary membership classes were, contrary to popular belief, relatively socially conservative and fairly open about the goals of achieving personal economic gains. Labor unions were a primary force in the early Progressive movement, but the unions of the Gilded Age were composed primarily of the descendents of white minority immigrant groups from the early 19th century such as Italians and Irish. These groups spoke fluent English as they were second or third generation Americans, were well-organized and empowered by their religious and social communities, and held relatively privileged positions in industrial labor as skilled tradesmen of various sorts. They sought empowerment through government involvement that would level the playing field against their corporate bosses of WASP descent, but simultaneously these organizations tended to be radically hostile to newer immigrants such as Eastern Europeans in the East and Asians in the West, as well as African-Americans. The reason for this hostility is easily understood - skilled laborers sought organized rebellion to break the plutocracy of the corporate aristocrats, but the waves of migrating cheaper labor (including freed African-Americans from the South) provided the latter with an alternative; and the unfamiliar customs, languages, and religions of these groups made them difficult to incorporate into union structure.
Women's rights groups - originating in various women's organizations during the Civil War - were another force within the progressive movement; and following women's suffrage, their policy agendas sought from government were vice restrictions, regulations on labor safety and child labor, and in some cases public education. The wives and mothers of industrial workers, women were the primary victims of the vice abuse engaged in by their overworked and stressed male loved ones. Their labor agenda was not based solely in a concern for the well-being of their children, but a push to eliminate another form of alternative labor for unionized workers to force corporations to provide better pay and benefits for grown men. These organizations were primarily composed of white women who stood by the unions in their hostility toward minorities, and a colossal driving force behind the move to segregate the emerging public education machine and other public services. Advocates for the urban poor were perhaps the most humane and tolerant of the original Progressives, but even their almshouses and poorhouses often relied on strict religious foundations intended to instill morals that would "cure" poverty, and some of these were very welcoming of ethnic and religious minorities while others blatantly rejected them as morally hopeless or undeserving of help in light of needy white Americans that they perceived as first in line. Riding on the shoulders of these organizations were many remnants of Confederacy apologist groups such as the Know Nothing Movement that mobilized the formers hostility toward minorities toward ideological agendas of outright racism and white supremacy, which I have addressed in greater detail in my earlier post on collective responsibility.
Before Progressivism was any sort of mainstream idea, the influence of these combined groups brought about the Chinese Exclusion Act of 1882 and a variety of Jim Crow laws including the judicial upholding of Separate but Equal. The precedent was set to give the government a DUTY of deciding who gets to benefit from the American Dream long before many of the minorities decided against had any viable representation in said government.
1900-1920 "The Progressive Era":
Teddy Roosevelt's administration pioneered the establishment of a patchwork of regulatory agencies comprised of hired, qualified, professional bureaucrats intended to enforce employer-employee agreements and establish basic government-funded public works such as roads and bridges. During his presidency, these were hailed by adherents to Progressivism as "saviors" from the unapologetic and rampant corruption of state and local bureaucracies that openly took bribes and sided with special interests tied to the politicians who appointed them, including but not limited to corporate tycoons.
However, Roosevelt's VP and successor to the Presidency, W.H. Taft, did not share his passion for Progressive policies. A key disagreement between Roosevelt and Taft was monetary policy; irresponsible and erratic banking practices backed by the antics of the corrupt bureaucracies described above and a general slowness of information distribution had brought about multiple economic "panics" in the preceding decades; and in those days, the banks involved typically went down with the economic ship that they sank, but some tycoons managed to escape with the money. Roosevelt unsuccessfully challenged Taft for the Presidential nomination of the Republican Party in 1912, and a key campaign promise of Roosevelt's was a nationalised central bank modeled after those of Western Europe that would monopolize key banking practices and regulate private banks, a policy Taft opposed. When Roosevelt narrowly missed the Republican nomination, he organized a splinter party called The Progressive Party (AKA the Bull Moose Party). The 3 candidate race split the Republican base and handed the election to dark horse Democrat Woodrow Wilson, who had at best a moderate position on Progressive policies.
Upon being elected, however, Wilson saw the potential of Progressivism as a movement and the significant minority of sympathizers toward it within his own party that would likely cost him the 1916 election if he did not appease them. To appease both sides of the spectrum, one of Wilson's first moves was the endorsement and establishment of the monstrosity of the Federal Reserve, a cartel of private banks with the monopolistic and regulatory functions of Roosevelt's vision. Toward the end of his Presidency, Wilson also endorsed the 20th and 21st Amendments (Women's Suffrage and Prohibition), and a variety of labor laws such as mandatory worker's compensation, minimum wages, child labor prohibition, regulation of hours and overtime pay, and so forth. Interestingly, many trade and skilled unions opposed this wave of labor laws as the deals they could negotiate with their employers would be better than those guaranteed by these laws, but with them in place laborers would be harder to organize toward activism; but by 1920 Progressivism was finally beginning to take on a role of representing minorities and unskilled labor.
In sum, these 2 decades established a precedent of the government regulating labor, banking, public works, and vice - 4 domains it had never been extensively involved in prior - all with the defense that these domains were too important to everyday American life to be left to the whim and uncertainty of the free market.
The Great Depression:
Often blamed for bringing about the Great Depression, 1920s Presidents Coolige and Hoover are in fact at most responsible for sitting on their thumbs and allowing the rotten seeds planted by their predecessors to grow into enormous trees of decay. No longer bound by the pressures of competition with each other but lacking a regulatory agency outside of their control, megabanks engaged in fraudulent practices such as insider trading and misrepresentation of assets that would make both their Gilded Age predecessor and their modern counterparts like EnRon and Goldman Sachs blush. The regulatory agencies established by Roosevelt quickly came under the control of large industrial tycoons such as the logging and mining industries and their pet politicians; replacing the 19th century practice of open bribery with the 20th century hypocrisy of exchanging favorable regulation for extended funding and job security rationalized by the "need" and "importance" of these industries for progress. Prohibition is not often cited as a causal element of the 1929 economic collapse, but its laughable unenforcibility gave rise to an unprecedented black market economy and an organized crime network that did not exist on a national level before it. When 1.5 decades of these combined practices brought about the stock market meltdown and farm-destroying ecological erosion that combined into the Great Depression, labor regulations played a colossal role in preserving the economic state of meltdown. Unlike previous recessions, employers could no longer renegotiate employee contracts or reduce pay and compensation below floors set by Federal regulations which were no longer compatible with plummeting prices. Employees who could keep their jobs retained their rate of pay, but the country experienced instead colossal rates of unemployment as small and medium businesses were forced into bankruptcy, preserving only the megaindustries responsible for the mess and the government on their leash.
The 1910s were still largely fresh in the minds of Americans and contrary to the modern world, many understood the link between excessive regulation and the economic situation. Progressives, on the other hand, apologized for the results, claiming that their dreams had been ruined by corrupt politicians and bureaucrats who did not do what their patron saint Teddy Roosevelt had intended. 1920s politicians certainly knew what was going on and turned a blind eye to the corruption and irresponsibility while claiming an age of "indefinite prosperity". However, it is important to remember that corrupt banks and megaindustries had existed for nearly a century by 1929 and caused much turmoil and misery, but NEVER managed to achieve an economic collapse of such epic and nationwide proportions until they were empowered by Federal policy favoritism. Having Federal regulators to buy eliminated virtually all capacity for competition whether it came from smaller industries, unions, or other large players with rival pet governments at the state and local levels. If Progressives' primary issues in the Gilded Age were with the corruption and hypocrisy of the state and local authorities and their favoritism toward large tycoons, they should reasonably have predicted that the establishment of an over-arching authority would create not a solution, but a new powerhouse to be bought by the highest bidder and then released to eradicate his competition.
If Teddy Roosevelt is the god of Progressives, then FDR is their clear and unquestioned messiah, but the reality is that unlike Teddy's, his cousin's policies cannot even be reasonably argued as well-intentioned but naive. The New Deal more closely resembled the hybrid compromises of Woodrow Wilson which made true Progressive balk. Like 1912, the 1932 election saw a sharp division between proponents of a return to pre-1912 policies and a dramatic increase in regulations and government involvement, including respective calls for the abolition (often by violent means) of the Federal Reserve and its nationalisation. Unlike 1912, the advent of mass media kept these two movements in the fringes of both parties, and the electoral panels of both Hoover and FDR in fact agreed on more than they disagreed on; a middle ground of keeping things as they were. Upon his victory FDR realized, like Wilson, the threat posed by the emerging fringes and moved to appease them without hurting his patron special interests. Rather than abolish or seize the Federal Reserve, FDR settled for a series of regulations that would prevent it from engaging in many of the practices that had caused the meltdown. Rather than collapse inefficient labor regulations to allow people to return to self-sufficiency, FDR introduced the first social welfare programs - among them social security and various housing and health regulations and assistance programs - to alleviate the plight of the millions of people impoverished by the collapse. Rather than eliminate corrupt regulatory agencies, FDR opted for sets of new ones; the expansion of government-run public works to alleviate the ecological damage and offer employment alternatives, and public subsidies to discourage farmers from practices incompatible with the failing economy. Although alcohol Prohibition did not endure the Great Depression, the advent of Hemp Prohibition and a variety of other vice regulations introduced in the 1930s gave the organized crime cartels new cash crops to sell on the black market, and the various law enforcement agencies charged with fighting them job security. The New Deal is often credited with alleviating the Great Depression, but this is simply historically inaccurate. Despite these policies being in full swing for 6 years, economic measures such as unemployment, the stock market, and agricultural and industrial growth remained abysmal through 1938 and largely unchanged after a slight initial improvement in 1934. In the 1938 election, FDR's New Deal Coalition was unceremoniously fired as the majority in both houses of Congress, and the derailing of the continuation of many New Deal policies improved every economic marker by at least 50% by 1940. However, the US had emerged from an era brought on by the unintended consequences of excessive government with a government quintupled in size and with mandates to regulate agriculture, retirement, social services, charity, housing, health, and significantly expanded mandates toward its already infused domains.
Later Cycles:
Since WWII, especially in economic terms, the US has seen an unending and abysmal tug-of-war between various players seeking to domesticate Progressivism for their benefit and a virtually uninterrupted cycle of attempts to repair failures directly attributable to excessive government intervention in one domain by interventions in another.
JFK and LBJ are considered Progressive heroes for their Federal policies aimed at eliminating institutional segregation and discrimination, but let's not forget that Progressivism set those wheels in motion 80 years prior. A look at the rampant - although closeted - attitudes in this country toward minorities, the 1960s policies achieved limited success, but significantly swept the problems under the table.
LBJ's alphabet soup of social welfare agencies, MediCare, and Nixon's social security and monetary policy reforms are often hailed as the last great acts of Progressivism. However, these policies were merely band-aid fixes for the colossal economic wounds created by the continued dependence of an ever-larger population on government hand-outs as a result of labor over-regulation and the tyranny of the Federal Reserve. Let's not forget that Nixon also initiated the disastrous War on Drugs as an attempt to alleviate the plight of the poor and minorities likely to be victimized by the criminal elements involved in the black market, but only succeeded to enrich and empower them by driving up their prices and creating new bureaucracies for them to bribe.
Then there is every Progressive's antichrist, Ronald Reagan. I'm not a fan of Reagan at all, but precisely because he absolutely did NOT do what Progressives credit him with. In the eyes of many fans and detractors alike, Reagan fulfilled his 1980 campaign promises by chopping up and defunding social welfare and regulatory agencies, disempowering unions, cutting corporate taxes and ushering in a new era of free market economics that was either excellent or awful depending on who is describing it. Some even claim Reagan did this intentionally to destroy a perfectly operational Progressive system. In reality, however, Reagan was a corporatist swine hell-bent on supply-side economics to the extent the US had not seen in almost 100 years; his belief in "free markets" literally expired the moment he stepped down from the podium where he delivered his 1980 inaugural address. Defunding social welfare agencies and cutting taxes may be practices that are compatible with each other, but they absolutely do not account for the unprecedented and extravagant defense expenditures and other miscellaneous corporate subsidies done simultaneously. Reagan also gave unprecedented funding to the bureaucracies charged with fighting the War on Drugs which nevertheless remained an abysmal failure. Reducing revenue while spending excessively on things that equate to flushing money down the toilet doesn't ONLY have the impact of exploding the national debt; corporate subsidies embolden inefficient and abusive megaplayers and shield them from natural competition - just as they did in the previous eras discussed above - which leads to the elimination of smaller competition, soaring prices, and the inevitable holistic collapse which we witnessed in the end of the 1980s. Under Ronald Reagan, the US essentially re-lived the Gilded Age propagated from a Federal level, the power of the Federal government being used to do everything state and local governments had done 100 years earlier that Progressives had a problem with. But it was Progressives that had insisted for 100 years that the Federal government should regulate vice, banking, agriculture, education, immigration, industry, social services, labor, retirement and health, and it had regulated them with such "success" that by the 1980s millions of Americans had lost all capacity for self-sufficiency and became wholly dependent on the welfare state. Ronald Reagan was not an enemy or opponent of Progressivism, he was the epitome of what the proposed Progressive Paradise REALLY looks like when regulated with favoritism and incompetence, qualities every government inherently posesses. Even if he intentionally performed all these functions on behalf of the richest and most powerful players to impoverish and destroy a system of rosey Progressive prosperity (that never existed), maybe Progressives should have considered the possibility of such a politician coming along before handing the government all those functions. Government is a real entity understood by scientific inquiry, not some wishy-washy expression of moralistic ideology that doesn't exist in practice, there is a necessity to predict how it will REALLY behave as opposed to just trusting it to behave the way you intend it to.
Before I conclude that thought, let's examine the last 2 decades:
- In the late 1980s, the disgusting oligopoly of corporate agribusiness, empowered by subsidies and the so-called "Free Trade Agreement," began to dump tons and tons of cheap, processed, genetically altered crap erm... crop on the markets of northern Mexico, destroying the small and medium domestic farms there and quadrupling illegal immigration to the United States in the form of skilled farm workers intent on working for a slave wage for the same agricultural corporations.
- Threatened by competition from these undocumented workers who sidestep labor regulations, Progressive elements such as unions in the US joined up with fearmongering social conservatives to persuade yet ANOTHER Progressive administration in the 1990s to expand and modernize expensive, corrupt, and abysmally unsuccessful bureaucratic agencies to patrol and "secure" the borders. Megabusiness jumped on this bandwagon as a compromise because alternatively, the liberal interests may have demanded Bill Clinton return to pre-Reagan taxation levels and labor regulations, but this way they could band together to victimize a new class of unrepresented minorities like it was trendy to do 100 years before.
- When this ridiculous policy failed to bring economic recovery - surprising only to those unfamiliar with the "success stories" of the Wall of China against the Mongols - Clinton decided to repeal the bulk of the regulations passed against the banking cartel in the 1930s, blowing another bubble of "indefinite prosperity" a la the 1920s. Bush Jr. was among the most incompetent politicians in our history, but one thing he was NOT responsible for was the banking meltdown of 2008. All he did was twiddle his thumbs while the banks spent imaginary money knowing they would bankrupt everyone but themselves, the same way Coolige and Hoover did in the 1920s. Even the time elapsed between these events is roughly the same - 1913-1929, 1993-2008.
My, they weren't kidding when they said not understanding history causes it to repeat itself!
The Pence Amendment and the Stubborness of Progressivism
That, finally, brings us to the year 2011. Every Progressive enraged by the Pence Amendment equated it to outlawing abortion and denying women the right to choice; especially poor, underpriviledged, and minority women. But in reality, Congress doesn't have that authority. Roe v. Wade is still in effect and any legislation outlawing abortion would be immediately struck down as unconstitutional, whether it was Federal or State. All the Pence Amendment does is take away government funding from abortions and a variety of other reproductive healthcare services through changes to legal definitions and the defunding of specific provider organizations (such as Planned Parenthood). I don't agree with this at all; if the government is going to pay for medical services it cannot exclude these because it deems them inappropriate - nature is indifferent to what's "appropriate". But I AM saying this is exactly what we should have expected to happen.
The seeds were sewn by regulations in the 1930s, fertilized by Medicare and Medicaid, and finally sprouted in the laughable Progressive dream of Obama's health care reform of over-regulating medicine in ways that protect the largest economic players and slowly making Americans dependent on government to pay for their skyrocketingly costly services. Look at the historical record above: How could you honestly have EXPECTED the government not to start adding objectionable exclusionary provisions once it's control of health care grew enough to make these effective? It has done so with EVERY OTHER DOMAIN we've trusted it with! Even if politicians like Mike Pence are indeed the Reaganite, mysogynous, theocratic antichrists that Progressives paint them to be; maybe Progressives should have thought about the possibility of such people gaining control of government when they handed the management of health care over to it.
Progressivism is the epitome of government-managed Collectivism, even if it rarely endorses the complete government takeover of anything. It cites the self-interested, competitive nature of human beings as dangerous, unpredictable, and uncaring about others, and seeks to correct for the inequities that result from this nature through government intervention which is, theoretically, driven by the public good. In practice, however, people and organizations within the government are just as self-interested as anyone else, and this makes them forego the public good in favor of pursuing their own personal gain, making the government buyable and easily manipulable by the richest and most powerful players in the unavoidably competitive system. The only real difference between the two is that no matter how big and predatory private interests get, they are still answerable to the unforgiving tides of competition - from other industries and their own pet local governments, from boycotts, from unions, from riots and famine-driven violence if all else fails. Government and its economic affiliates are answerable to no one: unaffiliated private industry cannot compete with the inexhaustible resource of tax-subsidized bailouts or stand up to favoring regulations - shileding them from going bankrupt by virtue of their colossal inefficiency, and the variety of roles and domains the government is involved in makes it far less answerable to voters than a corporation is to customers who can simply go to the nearest competitor for its relatively limited repertoire of services. Government CAN be fired using the Tahrir Square method, but this requires non-compliance precipitated by levels of misery that have not been seen in this country since the 1890s. In light of this, The IRONY is that the 1890s situation that gave birth to Progressivism was one closely resembling Mubarak's Egypt, only with competing corporate oligarchies and pet State and local governments that could not establish hegemony for lack of a central authority. In creating such a central authority, Progressivism GAVE its sworn enemies a hegemonic power to domesticate, and the latter were crafty enough to create avenues of appeasement that keep enough people satisfied to avoid violent rebellion.
I am not advocating any sort of violent revolution, our system has never required this to achieve change. What I am calling upon is all the well-intentioned Progressives to wake up and realize how badly you have all been duped for over a century now, building the very mechanism by which your opponents impoverish you. If you are indeed committed to equality, freedom, and progress, you must accept the reality that competition is an intrinsic fact of human existence that must be embraced to accomplish them; attempts to limit it in favor of a collective organization only make competition easier for the biggest and most powerful players that have the power to buy this organization.
I have many friends who openly and proudly identify themselves as "Progressives", among them to some extent my good friend and the co-host of our new Webcast "Edge of Chaos", Joe Ryan. In recent weeks, with the onslaught of policy proposals that threaten and limit abortions from the far right both in the Federal and various State legislatures, I have seen many of these people respond with outrage and ridicule, calling this "theocracy," "mysogyny," and an "attack on women's rights" or "reproductive rights". While I agree with Progressives that abortion should be legal and accessible (for reasons I may address in a later post that are completely unrelated to this ideological banter), my response to their outrage is usually "I told you so". These policies, specifically the Pence Amendment, are the direct and inevitable result of the well-intentioned naivete of decades of Progressive policies that have given the government the power to meddle in such affairs, and what's worse, they are only the latest of multiple manifestations of this effect. Yet Progressives continue to place their faith in government and blame its opponents for all of society's problems. In order to understand what I'm saying rather than dismissing it as crazy or extreme, the reader will need significant background before the discussion of modern events.
In This Post:
What is Progressivism?
Progressivism's History and Scorecard
The Pence Amendment and Progressive Stubborness
What is Progressivism?
For those entirely politically uninclined or simply unclear on this topic, let me briefly explain the meaning of this word. Progressivism is broadly defined as the political belief - whether theoretical or ideological - that government involvement in the economy and social policy is necessary to ensure the greatest possible progress of society. Progressivism does not necessarily entail belief in a state-run or socialist economy. In the modern US, the political affiliation is typically associated with the far but not militant left; it endorses a nationalised rather than independent central bank, greater regulations and higher taxation of the rich and environmentally costly industry, government investments in education, health care, and clean energy - although these can remain privately run, "positive discrimination" policies such as affirmative action and laws that protect or even mandate union membership, and social policies that restrict expression deemed dangerous and offensive such as television violence and hate speech. This list is by far non-exhaustive, but should make the profile of a typical modern-day Progressive clear. However, Progressivism can span party lines and economic inclinations. The first openly Progressive US President - Teddy Roosevelt - was a Republican, and many of Richard Nixon's policies can also be labeled Progressive with relatve ease. Similarly, supply-side economic policy - government subsidies and protection of the largest and most powerful private industries - can be defined broadly as Progressive, seeing as nearly every politician that engages in such policies claims to do so because the failure of these industries would bring excessive costs to average citizens, whereas their success creates a common good for everyone to share. Even some socially conservative policies - such as vice prohibition - can fit the Progressive label, as the government imposes a restriction on personal choice that is claimed to bring greater benefit to society as a whole.
I find that I agree with modern Progressives on the grand majority of what they hope to accomplish. But then, I would say their goals are shared by most political ideologies with the exception of stalwart social conservatives. Who would argue with a quality education for every child, adequate food/shelter/necessities for every American, a clean environment, secure and humane working conditions, equality for minorities of all types, and (with the exception of some social conservatives) freedoms of expression, reproductive choice, and various forms of affiliation including religion? My problem with Progressives - even limited to the modern definition - is their methodology for accomplishing any of these goals, a methodology that despite its predominantly humane intentions has a long and profound history of blatant disregard for the nature of both the individual human mind and human society as a whole. What's worse, each time this disregard brings about the opposite of what Progressivism intended to achieve, Progressives have an extremely difficult time taking responsibility, instead blaming "meddlers" and "saboteurs" that destroyed their rosey vision. Do I sound extreme and outrageous?
Well, let's examine Progressivism's History and its "Scorecard" of "successful policies".
Origins:
Progressivism originated in the late 1800s as a movement of proponents of greater government involvement in the regulation of society. Its adherents had little else in common, but their primary membership classes were, contrary to popular belief, relatively socially conservative and fairly open about the goals of achieving personal economic gains. Labor unions were a primary force in the early Progressive movement, but the unions of the Gilded Age were composed primarily of the descendents of white minority immigrant groups from the early 19th century such as Italians and Irish. These groups spoke fluent English as they were second or third generation Americans, were well-organized and empowered by their religious and social communities, and held relatively privileged positions in industrial labor as skilled tradesmen of various sorts. They sought empowerment through government involvement that would level the playing field against their corporate bosses of WASP descent, but simultaneously these organizations tended to be radically hostile to newer immigrants such as Eastern Europeans in the East and Asians in the West, as well as African-Americans. The reason for this hostility is easily understood - skilled laborers sought organized rebellion to break the plutocracy of the corporate aristocrats, but the waves of migrating cheaper labor (including freed African-Americans from the South) provided the latter with an alternative; and the unfamiliar customs, languages, and religions of these groups made them difficult to incorporate into union structure.
Women's rights groups - originating in various women's organizations during the Civil War - were another force within the progressive movement; and following women's suffrage, their policy agendas sought from government were vice restrictions, regulations on labor safety and child labor, and in some cases public education. The wives and mothers of industrial workers, women were the primary victims of the vice abuse engaged in by their overworked and stressed male loved ones. Their labor agenda was not based solely in a concern for the well-being of their children, but a push to eliminate another form of alternative labor for unionized workers to force corporations to provide better pay and benefits for grown men. These organizations were primarily composed of white women who stood by the unions in their hostility toward minorities, and a colossal driving force behind the move to segregate the emerging public education machine and other public services. Advocates for the urban poor were perhaps the most humane and tolerant of the original Progressives, but even their almshouses and poorhouses often relied on strict religious foundations intended to instill morals that would "cure" poverty, and some of these were very welcoming of ethnic and religious minorities while others blatantly rejected them as morally hopeless or undeserving of help in light of needy white Americans that they perceived as first in line. Riding on the shoulders of these organizations were many remnants of Confederacy apologist groups such as the Know Nothing Movement that mobilized the formers hostility toward minorities toward ideological agendas of outright racism and white supremacy, which I have addressed in greater detail in my earlier post on collective responsibility.
Before Progressivism was any sort of mainstream idea, the influence of these combined groups brought about the Chinese Exclusion Act of 1882 and a variety of Jim Crow laws including the judicial upholding of Separate but Equal. The precedent was set to give the government a DUTY of deciding who gets to benefit from the American Dream long before many of the minorities decided against had any viable representation in said government.
1900-1920 "The Progressive Era":
Teddy Roosevelt's administration pioneered the establishment of a patchwork of regulatory agencies comprised of hired, qualified, professional bureaucrats intended to enforce employer-employee agreements and establish basic government-funded public works such as roads and bridges. During his presidency, these were hailed by adherents to Progressivism as "saviors" from the unapologetic and rampant corruption of state and local bureaucracies that openly took bribes and sided with special interests tied to the politicians who appointed them, including but not limited to corporate tycoons.
However, Roosevelt's VP and successor to the Presidency, W.H. Taft, did not share his passion for Progressive policies. A key disagreement between Roosevelt and Taft was monetary policy; irresponsible and erratic banking practices backed by the antics of the corrupt bureaucracies described above and a general slowness of information distribution had brought about multiple economic "panics" in the preceding decades; and in those days, the banks involved typically went down with the economic ship that they sank, but some tycoons managed to escape with the money. Roosevelt unsuccessfully challenged Taft for the Presidential nomination of the Republican Party in 1912, and a key campaign promise of Roosevelt's was a nationalised central bank modeled after those of Western Europe that would monopolize key banking practices and regulate private banks, a policy Taft opposed. When Roosevelt narrowly missed the Republican nomination, he organized a splinter party called The Progressive Party (AKA the Bull Moose Party). The 3 candidate race split the Republican base and handed the election to dark horse Democrat Woodrow Wilson, who had at best a moderate position on Progressive policies.
Upon being elected, however, Wilson saw the potential of Progressivism as a movement and the significant minority of sympathizers toward it within his own party that would likely cost him the 1916 election if he did not appease them. To appease both sides of the spectrum, one of Wilson's first moves was the endorsement and establishment of the monstrosity of the Federal Reserve, a cartel of private banks with the monopolistic and regulatory functions of Roosevelt's vision. Toward the end of his Presidency, Wilson also endorsed the 20th and 21st Amendments (Women's Suffrage and Prohibition), and a variety of labor laws such as mandatory worker's compensation, minimum wages, child labor prohibition, regulation of hours and overtime pay, and so forth. Interestingly, many trade and skilled unions opposed this wave of labor laws as the deals they could negotiate with their employers would be better than those guaranteed by these laws, but with them in place laborers would be harder to organize toward activism; but by 1920 Progressivism was finally beginning to take on a role of representing minorities and unskilled labor.
In sum, these 2 decades established a precedent of the government regulating labor, banking, public works, and vice - 4 domains it had never been extensively involved in prior - all with the defense that these domains were too important to everyday American life to be left to the whim and uncertainty of the free market.
The Great Depression:
Often blamed for bringing about the Great Depression, 1920s Presidents Coolige and Hoover are in fact at most responsible for sitting on their thumbs and allowing the rotten seeds planted by their predecessors to grow into enormous trees of decay. No longer bound by the pressures of competition with each other but lacking a regulatory agency outside of their control, megabanks engaged in fraudulent practices such as insider trading and misrepresentation of assets that would make both their Gilded Age predecessor and their modern counterparts like EnRon and Goldman Sachs blush. The regulatory agencies established by Roosevelt quickly came under the control of large industrial tycoons such as the logging and mining industries and their pet politicians; replacing the 19th century practice of open bribery with the 20th century hypocrisy of exchanging favorable regulation for extended funding and job security rationalized by the "need" and "importance" of these industries for progress. Prohibition is not often cited as a causal element of the 1929 economic collapse, but its laughable unenforcibility gave rise to an unprecedented black market economy and an organized crime network that did not exist on a national level before it. When 1.5 decades of these combined practices brought about the stock market meltdown and farm-destroying ecological erosion that combined into the Great Depression, labor regulations played a colossal role in preserving the economic state of meltdown. Unlike previous recessions, employers could no longer renegotiate employee contracts or reduce pay and compensation below floors set by Federal regulations which were no longer compatible with plummeting prices. Employees who could keep their jobs retained their rate of pay, but the country experienced instead colossal rates of unemployment as small and medium businesses were forced into bankruptcy, preserving only the megaindustries responsible for the mess and the government on their leash.
The 1910s were still largely fresh in the minds of Americans and contrary to the modern world, many understood the link between excessive regulation and the economic situation. Progressives, on the other hand, apologized for the results, claiming that their dreams had been ruined by corrupt politicians and bureaucrats who did not do what their patron saint Teddy Roosevelt had intended. 1920s politicians certainly knew what was going on and turned a blind eye to the corruption and irresponsibility while claiming an age of "indefinite prosperity". However, it is important to remember that corrupt banks and megaindustries had existed for nearly a century by 1929 and caused much turmoil and misery, but NEVER managed to achieve an economic collapse of such epic and nationwide proportions until they were empowered by Federal policy favoritism. Having Federal regulators to buy eliminated virtually all capacity for competition whether it came from smaller industries, unions, or other large players with rival pet governments at the state and local levels. If Progressives' primary issues in the Gilded Age were with the corruption and hypocrisy of the state and local authorities and their favoritism toward large tycoons, they should reasonably have predicted that the establishment of an over-arching authority would create not a solution, but a new powerhouse to be bought by the highest bidder and then released to eradicate his competition.
If Teddy Roosevelt is the god of Progressives, then FDR is their clear and unquestioned messiah, but the reality is that unlike Teddy's, his cousin's policies cannot even be reasonably argued as well-intentioned but naive. The New Deal more closely resembled the hybrid compromises of Woodrow Wilson which made true Progressive balk. Like 1912, the 1932 election saw a sharp division between proponents of a return to pre-1912 policies and a dramatic increase in regulations and government involvement, including respective calls for the abolition (often by violent means) of the Federal Reserve and its nationalisation. Unlike 1912, the advent of mass media kept these two movements in the fringes of both parties, and the electoral panels of both Hoover and FDR in fact agreed on more than they disagreed on; a middle ground of keeping things as they were. Upon his victory FDR realized, like Wilson, the threat posed by the emerging fringes and moved to appease them without hurting his patron special interests. Rather than abolish or seize the Federal Reserve, FDR settled for a series of regulations that would prevent it from engaging in many of the practices that had caused the meltdown. Rather than collapse inefficient labor regulations to allow people to return to self-sufficiency, FDR introduced the first social welfare programs - among them social security and various housing and health regulations and assistance programs - to alleviate the plight of the millions of people impoverished by the collapse. Rather than eliminate corrupt regulatory agencies, FDR opted for sets of new ones; the expansion of government-run public works to alleviate the ecological damage and offer employment alternatives, and public subsidies to discourage farmers from practices incompatible with the failing economy. Although alcohol Prohibition did not endure the Great Depression, the advent of Hemp Prohibition and a variety of other vice regulations introduced in the 1930s gave the organized crime cartels new cash crops to sell on the black market, and the various law enforcement agencies charged with fighting them job security. The New Deal is often credited with alleviating the Great Depression, but this is simply historically inaccurate. Despite these policies being in full swing for 6 years, economic measures such as unemployment, the stock market, and agricultural and industrial growth remained abysmal through 1938 and largely unchanged after a slight initial improvement in 1934. In the 1938 election, FDR's New Deal Coalition was unceremoniously fired as the majority in both houses of Congress, and the derailing of the continuation of many New Deal policies improved every economic marker by at least 50% by 1940. However, the US had emerged from an era brought on by the unintended consequences of excessive government with a government quintupled in size and with mandates to regulate agriculture, retirement, social services, charity, housing, health, and significantly expanded mandates toward its already infused domains.
Later Cycles:
Since WWII, especially in economic terms, the US has seen an unending and abysmal tug-of-war between various players seeking to domesticate Progressivism for their benefit and a virtually uninterrupted cycle of attempts to repair failures directly attributable to excessive government intervention in one domain by interventions in another.
JFK and LBJ are considered Progressive heroes for their Federal policies aimed at eliminating institutional segregation and discrimination, but let's not forget that Progressivism set those wheels in motion 80 years prior. A look at the rampant - although closeted - attitudes in this country toward minorities, the 1960s policies achieved limited success, but significantly swept the problems under the table.
LBJ's alphabet soup of social welfare agencies, MediCare, and Nixon's social security and monetary policy reforms are often hailed as the last great acts of Progressivism. However, these policies were merely band-aid fixes for the colossal economic wounds created by the continued dependence of an ever-larger population on government hand-outs as a result of labor over-regulation and the tyranny of the Federal Reserve. Let's not forget that Nixon also initiated the disastrous War on Drugs as an attempt to alleviate the plight of the poor and minorities likely to be victimized by the criminal elements involved in the black market, but only succeeded to enrich and empower them by driving up their prices and creating new bureaucracies for them to bribe.
Then there is every Progressive's antichrist, Ronald Reagan. I'm not a fan of Reagan at all, but precisely because he absolutely did NOT do what Progressives credit him with. In the eyes of many fans and detractors alike, Reagan fulfilled his 1980 campaign promises by chopping up and defunding social welfare and regulatory agencies, disempowering unions, cutting corporate taxes and ushering in a new era of free market economics that was either excellent or awful depending on who is describing it. Some even claim Reagan did this intentionally to destroy a perfectly operational Progressive system. In reality, however, Reagan was a corporatist swine hell-bent on supply-side economics to the extent the US had not seen in almost 100 years; his belief in "free markets" literally expired the moment he stepped down from the podium where he delivered his 1980 inaugural address. Defunding social welfare agencies and cutting taxes may be practices that are compatible with each other, but they absolutely do not account for the unprecedented and extravagant defense expenditures and other miscellaneous corporate subsidies done simultaneously. Reagan also gave unprecedented funding to the bureaucracies charged with fighting the War on Drugs which nevertheless remained an abysmal failure. Reducing revenue while spending excessively on things that equate to flushing money down the toilet doesn't ONLY have the impact of exploding the national debt; corporate subsidies embolden inefficient and abusive megaplayers and shield them from natural competition - just as they did in the previous eras discussed above - which leads to the elimination of smaller competition, soaring prices, and the inevitable holistic collapse which we witnessed in the end of the 1980s. Under Ronald Reagan, the US essentially re-lived the Gilded Age propagated from a Federal level, the power of the Federal government being used to do everything state and local governments had done 100 years earlier that Progressives had a problem with. But it was Progressives that had insisted for 100 years that the Federal government should regulate vice, banking, agriculture, education, immigration, industry, social services, labor, retirement and health, and it had regulated them with such "success" that by the 1980s millions of Americans had lost all capacity for self-sufficiency and became wholly dependent on the welfare state. Ronald Reagan was not an enemy or opponent of Progressivism, he was the epitome of what the proposed Progressive Paradise REALLY looks like when regulated with favoritism and incompetence, qualities every government inherently posesses. Even if he intentionally performed all these functions on behalf of the richest and most powerful players to impoverish and destroy a system of rosey Progressive prosperity (that never existed), maybe Progressives should have considered the possibility of such a politician coming along before handing the government all those functions. Government is a real entity understood by scientific inquiry, not some wishy-washy expression of moralistic ideology that doesn't exist in practice, there is a necessity to predict how it will REALLY behave as opposed to just trusting it to behave the way you intend it to.
Before I conclude that thought, let's examine the last 2 decades:
- In the late 1980s, the disgusting oligopoly of corporate agribusiness, empowered by subsidies and the so-called "Free Trade Agreement," began to dump tons and tons of cheap, processed, genetically altered crap erm... crop on the markets of northern Mexico, destroying the small and medium domestic farms there and quadrupling illegal immigration to the United States in the form of skilled farm workers intent on working for a slave wage for the same agricultural corporations.
- Threatened by competition from these undocumented workers who sidestep labor regulations, Progressive elements such as unions in the US joined up with fearmongering social conservatives to persuade yet ANOTHER Progressive administration in the 1990s to expand and modernize expensive, corrupt, and abysmally unsuccessful bureaucratic agencies to patrol and "secure" the borders. Megabusiness jumped on this bandwagon as a compromise because alternatively, the liberal interests may have demanded Bill Clinton return to pre-Reagan taxation levels and labor regulations, but this way they could band together to victimize a new class of unrepresented minorities like it was trendy to do 100 years before.
- When this ridiculous policy failed to bring economic recovery - surprising only to those unfamiliar with the "success stories" of the Wall of China against the Mongols - Clinton decided to repeal the bulk of the regulations passed against the banking cartel in the 1930s, blowing another bubble of "indefinite prosperity" a la the 1920s. Bush Jr. was among the most incompetent politicians in our history, but one thing he was NOT responsible for was the banking meltdown of 2008. All he did was twiddle his thumbs while the banks spent imaginary money knowing they would bankrupt everyone but themselves, the same way Coolige and Hoover did in the 1920s. Even the time elapsed between these events is roughly the same - 1913-1929, 1993-2008.
My, they weren't kidding when they said not understanding history causes it to repeat itself!
The Pence Amendment and the Stubborness of Progressivism
That, finally, brings us to the year 2011. Every Progressive enraged by the Pence Amendment equated it to outlawing abortion and denying women the right to choice; especially poor, underpriviledged, and minority women. But in reality, Congress doesn't have that authority. Roe v. Wade is still in effect and any legislation outlawing abortion would be immediately struck down as unconstitutional, whether it was Federal or State. All the Pence Amendment does is take away government funding from abortions and a variety of other reproductive healthcare services through changes to legal definitions and the defunding of specific provider organizations (such as Planned Parenthood). I don't agree with this at all; if the government is going to pay for medical services it cannot exclude these because it deems them inappropriate - nature is indifferent to what's "appropriate". But I AM saying this is exactly what we should have expected to happen.
The seeds were sewn by regulations in the 1930s, fertilized by Medicare and Medicaid, and finally sprouted in the laughable Progressive dream of Obama's health care reform of over-regulating medicine in ways that protect the largest economic players and slowly making Americans dependent on government to pay for their skyrocketingly costly services. Look at the historical record above: How could you honestly have EXPECTED the government not to start adding objectionable exclusionary provisions once it's control of health care grew enough to make these effective? It has done so with EVERY OTHER DOMAIN we've trusted it with! Even if politicians like Mike Pence are indeed the Reaganite, mysogynous, theocratic antichrists that Progressives paint them to be; maybe Progressives should have thought about the possibility of such people gaining control of government when they handed the management of health care over to it.
Progressivism is the epitome of government-managed Collectivism, even if it rarely endorses the complete government takeover of anything. It cites the self-interested, competitive nature of human beings as dangerous, unpredictable, and uncaring about others, and seeks to correct for the inequities that result from this nature through government intervention which is, theoretically, driven by the public good. In practice, however, people and organizations within the government are just as self-interested as anyone else, and this makes them forego the public good in favor of pursuing their own personal gain, making the government buyable and easily manipulable by the richest and most powerful players in the unavoidably competitive system. The only real difference between the two is that no matter how big and predatory private interests get, they are still answerable to the unforgiving tides of competition - from other industries and their own pet local governments, from boycotts, from unions, from riots and famine-driven violence if all else fails. Government and its economic affiliates are answerable to no one: unaffiliated private industry cannot compete with the inexhaustible resource of tax-subsidized bailouts or stand up to favoring regulations - shileding them from going bankrupt by virtue of their colossal inefficiency, and the variety of roles and domains the government is involved in makes it far less answerable to voters than a corporation is to customers who can simply go to the nearest competitor for its relatively limited repertoire of services. Government CAN be fired using the Tahrir Square method, but this requires non-compliance precipitated by levels of misery that have not been seen in this country since the 1890s. In light of this, The IRONY is that the 1890s situation that gave birth to Progressivism was one closely resembling Mubarak's Egypt, only with competing corporate oligarchies and pet State and local governments that could not establish hegemony for lack of a central authority. In creating such a central authority, Progressivism GAVE its sworn enemies a hegemonic power to domesticate, and the latter were crafty enough to create avenues of appeasement that keep enough people satisfied to avoid violent rebellion.
I am not advocating any sort of violent revolution, our system has never required this to achieve change. What I am calling upon is all the well-intentioned Progressives to wake up and realize how badly you have all been duped for over a century now, building the very mechanism by which your opponents impoverish you. If you are indeed committed to equality, freedom, and progress, you must accept the reality that competition is an intrinsic fact of human existence that must be embraced to accomplish them; attempts to limit it in favor of a collective organization only make competition easier for the biggest and most powerful players that have the power to buy this organization.
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