After the Future

Quote of the Day: Michael Lind

In hindsight, the neoliberal cure was far worse than the New Deal liberal disease. The maturity of the New Deal's system of regulated managerial capitalism coincided with the post-World War II boom and the greatest expansion of the middle class in American history. Consumer advocates, however, blamed it for stifling diversity, libertarians and conservatives claimed it choked off economic progress, and political scientists denounced it for spawning "interest-group liberalism."

To the applause of liberal Democrats and conservative Republicans alike, the New Deal system of regulation was dismantled in one sector of the economy after another in the late 1970s and 1980s. The result was not the flourishing diversity hoped for by liberal consumer activists nor the solid sustainable economic growth promised by free-market ideologues. Instead, the result was the collapse of unions, the decline of private R&D, three decades of wage stagnation, and an economy driven by financialization, speculation, and rising debt rather than by productive industry and rising wages. (From his new book, Land of Promise: An Economic History of the United States, p. 391)

It has been a basic assumption of economists that growth is always good. Growth is good, but not any kind of growth to the exclusion of other kinds. Indiscriminate and economic growth is simply not sustainable in the long run. At some point we have to have a broad discussion about what whether the human energies that are so obsessed with economic growth might be redirected to other realms of human flourishing that might be more deeply satisfying and humanizing.

The mixed economy of the New Deal era was a closer approximation of what is needed than the neoliberal, anything-goes economy we have now. 

Commodifying the Un-commodifiable

From Michael Sandel's "What Isn't for Sale" in the April Atlantic:

This is a debate we didn’t have during the era of market triumphalism. As a result, without quite realizing it—without ever deciding to do so—we drifted from having a market economy to being a market society.

The difference is this: A market economy is a tool—a valuable and effective tool—for organizing productive activity. A market society is a way of life in which market values seep into every aspect of human endeavor. It’s a place where social relations are made over in the image of the market.

The great missing debate in contemporary politics is about the role and reach of markets. Do we want a market economy, or a market society? What role should markets play in public life and personal relations? How can we decide which goods should be bought and sold, and which should be governed by nonmarket values? Where should money’s writ not run?

As Sandel points out elsewhere in the article, one of the consequences of living in a market society is that there is a bias toward commodifying everything because we don't want to make judgments or develop a consensus about what is better and worse. 

In its own way, market reasoning also empties public life of moral argument. Part of the appeal of markets is that they don’t pass judgment on the preferences they satisfy. They don’t ask whether some ways of valuing goods are higher, or worthier, than others. If someone is willing to pay for sex, or a kidney, and a consenting adult is willing to sell, the only question the economist asks is “How much?” Markets don’t wag fingers. They don’t discriminate between worthy preferences and unworthy ones. Each party to a deal decides for him- or herself what value to place on the things being exchanged.

This nonjudgmental stance toward values lies at the heart of market reasoning, and explains much of its appeal. But our reluctance to engage in moral and spiritual argument, together with our embrace of markets, has exacted a heavy price: it has drained public discourse of moral and civic energy, and contributed to the technocratic, managerial politics afflicting many societies today.

I hate diffident non-judgmentalism. Tolerance, ok. We don't hate those with whom we disagree, but let's argue about what we believe and why. Let's stop being so wishy washy. Believe me the privatizers are clear about what they want, and they love it when the best of us lack all conviction.

P.S. This is the basic argument of David Graeber's book Debt that I've been excerpting quotes from in the last couple of weeks. I hope to have a post some time that goes into the book's argument. He has a new book out, a part of which was excerpted the other day in Salon. It's entitled The Democracy Project. 

Seductive Neoliberalism

For any way of thought to become dominant, a conceptual apparatus has to be advanced that appeals to our intuitions and instincts, to our values and our desires, as well as to the possibilities inherent in the social world we inhabit. If successful, this conceptual apparatus becomes so embedded in common sense as to be taken for granted  and not open to question. The founding figures of neoliberal thought took political ideals of human dignity and individual freedom as fundamental, as a  "central values of civilization''. In so doing they chose wisely, for these are indeed compelling and seductive ideals. These values, they held, were threatened not only by fascism, dictatorships, and communism, but  by all forms of state intervention that substituted collective judgments for those of individuals to choose. David Harvey--A Brief History of Neoliberalism, p. 5

The United States from its origins is a liberal society. A liberal society is one characterized by free markets with minimal state interference, a celebration of individual freedom and private property rights, and a democratically legitimated government that protects basic rights like freedom of speech and religion. In the Anglo-American world classic dominant political economic paradigm, but from it developed in the U.S. what might be called reform liberalism or progressive liberalism in the late 19th and early 20th century. Progressive liberalism, while embracing the basic values framework of classic liberalism, emerged as it became clear that classic liberalism led to the immiseration of the workers who labored within the large new industrial complexes that developed after the Civil War in the U.S. Classic liberalism created wealth, but it didn't distribute it well or fairly. 

Progressive liberalism sought to use the power of governments to restrain the more predatory practices of emerging large corporations and to mitigate the disruptive social and economic effects caused by a rapidly developing and innovative capitalist market economy. Progressive liberalism in the U.S. is similar in many respects to social emocracy in Europe in that both seek an economic middle road between markets and government controls, but both derive from different post-Enlightenment intellectual traditions. Progressive liberalism is an attempt to moderate the extremes of bare-knuckled laissez-faire capitalism; European social democracy comes out of the other branch of Enlightenment political economic thinking--revolutionary socialism, and sought to mitigate its violently disruptive agenda of bare-knuckled revolutionary socialism.

I think American progressive liberalism's roots in the classic liberal tradition make it peculiarly allergic to the more dirigiste forms of European social democracy. Calling Obama, or anybody with any influence on the American national scene who doesn't come from Vermont, a socialist is facetious. Socialism has never had much broad seductive power in the U.S. Progressive liberalism is more experimental and adaptive, rather than ideologically driven. Keynes gave it a theoretical framework, but FDR came before Keynes. 

In the US, laissez-faire liberalism dominated from the 1865 to 1932, and progressive liberalism dominated from 1933 to 1975. Laissez-faire Liberalism re-emerged during the shock decade of the 1970s during the Carter administration, was aggressively implemented during the Reagan administration, settled in during the Clinton administration, and It should have self-destructed during the Bush administration, but it didn't. Many people, me included, thought that the shock of the aughts--the U.S. government's reckless war-making and fiscal policies coupled with the financial markets disaster of 2008 would have forced adjustments in the direction of progressive liberalism, but the Obama administration has largely embraced neoliberalism as its basic policy framework.

Our politics in the US might be described now as mainly a factional dispute between right and left neoliberals. Neoliberalism is classic liberalism in a postindustrial key. It's an open question now whether the dominance of progressive liberalism from the thirties through the seventies was aberrational, and we've now returned to the historical norm. From where we stand now, it would appear so. But the ascendancy of neoliberalism doesn't explain what's going on in Washington now, and why the government is paralyzed and it's impossible to even get sensible gun control legislation enacted that 90% of the American population supports. Why isn't there more consensus in both parties if both are more or less agreed about neoliberal objectives?

I'd argue that the Democrats are, relatively speaking, serious neoliberals, while the Republicans are not. Democrats are serious about governing in accordance with Neoliberal principles.That means they embrace liberal social values while also embracing fiscally conservative agenda that seeks free trade, lower taxes and privatization of public institutions, cuts to entitlements, deregulation, weakening of collective bargaining rights, and a fetish regarding balanced budgets and reducing deficits. 

The Republicans, on the other hand, are not serious at all about governance; they seek to use government power as a crony system primarily to protect and promote the interests of the very wealthy. Both parties are cronyist, but it's far more extreme and blatant in the Republican party. The Republican agenda overlaps with the Neoliberal agenda, but it departs from it when it conflicts with its strategies to maintain its political power or to wrest it from the Democrats who, though neoliberal in its essence still have to deal with progressive liberals in its caucus.The acquisition and exercise of political power is the most important objective for Republicans. It's a game many of them are playing as an end in itself without regard for what's good for the country as a whole. Governance is not something they care about, believe in, or do very effectively. Rather than shaming the GOP for their governance failures, the media accept it as evidence for the Republican contention that Government cannot govern effectively. 

Both parties have bases, which party elites in each have to manage and appease from time to time, but neither base poses serious threats to elites in either party. Elites within the GOP have to deal with the cultural conservatives and religious right that compose their base, and elites within the Democratic party have to deal with a loose confederation of groups that are a mix of Progressive liberals on economic issues and cultural liberals who care more about identity politics than economic issues, and have little understanding of or care about the Neoliberal agenda.

This separation on cultural issues is exploited by economic elites to keep workers and the middle class divided in their separate cultural silos so they won't unite around economic issues. As a result, the cultural conservatives within the Republican Party are almost as powerless as the Progressive liberals are within the Democratic Party. Both factions get tossed crumbs, but neither is able to get its agenda taken seriously, except insofar as aspects of it overlap with the Neoliberal agenda. The culturally conservative GOP base gets opposition to sensible gun control as its crumb du jour; the progressive base gets support for abortion, gay marriage, as its crumbs du jour. I'm not saying some elites are insincere in their support or opposition to these cultural issues. I am saying that our preoccupation with them distracts us from dealing with deeper structural developments that have led to the emasculation of the progressive liberal economic agenda.

So while the Democratic Party power structure is dominated by neoliberals, it must embraces progressive liberals as part of its coalition as the GOP must embrace cultural conservatives. There are many neoliberals--Tom Friedman comes to mind--who are earnest utopians in their embrace of neoliberalism. And so an important place where  earnest neoliberals true believers  and their earnest counterparts in the Progressive faction differ is in a basic philosophical difference regarding globalization.

Neoliberals see it as something that lies outside of the power of national governments to control and so see the more realistic course as rolling with it rather than fighting it. They accept free market capitalism as on the whole a dynamic, if somewhat disruptive, positive force, and seek to mitigate its more disruptive effects by promoting improved education to prepare future workers for a dynamically changing work place and retraining programs  for adults to mitigate the effects of structural, chronic worker displacement. The fundamental presuppositions of neoliberalism are social darwinist: adapt or die. 

Progressive liberals accept that we are living in a rapidly integrating world system, but think that national governments can play a more proactive role in shaping national policy to benefit the interests of the broad public. This was essential goal of the Breton-Woods system==to find a Keynesian balance between desirable economic global integration and national sovereignty. Neoliberalism cares about the first but says there's little that can be done or should be done regarding the second. The neoliberals used the shocks of the seventies to discredit the Keynesian compromise, and have reverted us to the world system that existed before WWI. We're back in a kind of global economic wild west dominated by transnational economic warlords.

So we've seen this movie before. Yes, things are different now, but progressive liberals complain that neoliberal policies derive from political choices that benefit elite interests, and are not simply a necessary adjustment to the inevitable forces of globalization. But their critique has been unable to get any traction in the national corridors of power because while progressive liberal policy ideas resonate with a majority of Americans, they don't with elites in either party, and because wealthy elites are running things, nothing changes until that changes.  And that's not going to change until progressive liberals come up with a counter narrative that is more broadly seductive than the neoliberal one. It must provide "a conceptual apparatus . . . that appeals to our intuitions and instincts, to our values and our desires, as well as to the possibilities inherent in the social world we inhabit." And organizes a people's movement around it. 

 

Don't Blame the Schools

From Salon this morning:

The United States ranked in the bottom four of a United Nations report on child well-being. Among 29 countries, America landed second from the bottom in child poverty and held a similarly dismal position when it came to “child life satisfaction.”

Keeping the U.S. company at the bottom of the report, which gauged material well-being, overall health, access to housing and education, were Lithuania, Latvia and Romania, three of the poorest countries in the survey.

UNICEF said in a statement on the survey that child poverty in countries like the U.S. “is not inevitable but is policy-susceptible” and that there isn’t necessarily a strong relationship between per capita GDP and overall child well-being, explaining: “The Czech Republic is ranked higher than Austria, Slovenia higher than Canada, and Portugal higher than the United States.”

The Netherlands ranked number one on the list, with Norway, Iceland, Finland and Sweden filling out the top five.

Whenever you hear somebody decrying the "achievement gap", and how America's schools are failing, send them the link to this article. The U.S. is near the top when it comes to per capita GDP, but the more important issue is how the wealth produced by GDP is distributed. There is something terribly wrong with us, and we are incapable of doing anything about it.  We have the wealth; we don't have the imagination or the will to distribute it fairly:

Wake Up to the Egregious Inequality

 

Liberalism 5.0?

The core institutions, ideas and expectations that shaped American life for the sixty years after the New Deal don’t work anymore. The gaps between the social system we inhabit and the one we now need are becoming so wide that we can no longer paper over them. But even as the failures of the old system become more inescapable and more damaging, our national discourse remains stuck in a bygone age. The end is here, but we can’t quite take it in. --Walter Russell Meade

Last Spring, Walter Russell Mead from Bard College wrote a piece in The American Interest entitled "The Once and Future Liberalism." The first part of the article gives the impression of a standard Libertarian critique of big-government overreach, but he's attempting something more interesting and raises some important questions.

The article is long, so I'll try to summarize his argument here, and then, if I have time this week, I will write some follow-up posts to dig a little deeper into some of the issues he raises. He starts out by describing the history of political liberalism in the Anglo-American world using the Operating System software update metaphor:

Liberalism 1.O: England's Glorious Revolution in 1688. Estabishes a constitutional monarchy and asserts the primacy of parliament over the King. Hobbes and Locke were 1.0 Liberals. Crown-and-altar narrative still essential for national identity

Liberalism 2.O: American Revolution in 1776. Replaces constitutional monarchy of L1.0 with a republic founded on Enlightenment ideas about natural rights. Crown-and-altar narrative and traditions are abolished. Benjamin Franklin starts out as a L1.0 but converts to L2.0. (Limited suffrage. Slavery tolerated.)  

Liberalism 3.0: Manchester Liberalism. "Programs included once unthinkable ideas like universal suffrage, the abolition of slavery, an end to state-enforced monopoly corporations, limited government, free markets at home and free trade abroad. . . . More likely to be evangelical than either 1.0 or 2.0 liberals. . . . believed that capitalism, individual rights and a culture of virtue supported by a tolerant, non-fanatical Protestant Christianity could provide ordered liberty. (They also, by and large, believed in the superiority of the white race, thought that “too much” Jewish influence was bad and believed that Catholic countries could never become effective modern democracies.)"

Liberalism 4.0: Late-19th century's Progressive movement that developed in repsonse to social imbalances created by industrial capitalism. Rises to policy during the presidencies of Theodore Roosevelt and Woodrow Wilson. If an unholy alliance between church and state was the chief threat to liberty for L1.0-3.0, "the rise of huge industrial corporations seized pride of place as a threat to individual liberty; 20th-century, 4.0 liberals began to think about the state as a possible ally to defend individuals from unaccountable private power. The liberalism of Theodore Roosevelt and men like William Allen White was defined by their response to these challenges. Democratic government needed to ensure a level playing field, to fight for basic equality of opportunity."

Liberalism 4.1: In response to Great Depression and WWII, "turn-of-the-century progressivism was revamped and retweaked into liberalism 4.1, the big government, Iron Triangle system [Feds, unions, large corporations] that most Americans think of when they hear the word “liberal” today." 

Mead argues that the whole mentality behind Liberalism 4.1, the mentality that I have been defending on this blog as the "New Deal Compromise" is obsolete:

Today liberalism 4.1, blue liberalism, is increasingly outdated and backward-looking, but in its time it was a genuinely positive attempt to realize old values in new circumstances, and many of its achievements still demand our respect. The driving force shaping the agenda of 4.0 and 4.1 liberals before and after the New Deal were a series of powerful and profound historical developments that changed the world under their feet. The earlier versions of liberal politics had been built in societies that, while beginning to urbanize and industrialize, were still predominantly agricultural. Both Jeffersonian and Jacksonian liberals saw independent small farmers as the basis of American freedom and democracy.

. . . Although socialists and social democrats sometimes made common cause with 4.1 liberals, at bottom, blue liberalism was built as an alternative to socialism rather than an on-ramp for it. With the onset of the Great Depression in particular, most American liberals came to believe that providing benefits like Social Security and unemployment insurance would inoculate American workers against more virulent forms of socialist ideology and attract new immigrants and their children toward the American liberal tradition. It worked. 

. . . Programs like the Civilian Conservation Corps and later the GI Bill, along with the experience of mobilization and rationing during the war, convinced many liberals that government could and should do more than ensure a level playing field, that it could plan, regulate and control well enough to at least bracket a rough equality of economic and social outcomes, not just opportunities. . . . In time, with the advent of the Great Society programs of “the best and the brightest”, liberalism 4.1 became more explicitly redistributionist, and more deeply convinced of the superiority of the technocratic ethos. 

Mead talks about how all the earlier versions of Liberalism--1.0 through 4.1--are inadequate for our situation today, and points to the as yet to be realized "Liberalism 5.0": 

None can serve as the political program for the heirs of the two great revolutions today. We don’t want the constitutional monarchy and Anglican establishment of William III; we don’t want the aristocratic, limited-franchise republic of George Washington; we don’t want the Manchester liberalism of the 1860s; and we don’t want the managerial state that liberals and progressives built in the first two-thirds of the 20th century. That doesn’t mean we should not admire, learn from and build on each of these liberal traditions, but our job today is to synthesize enduring liberal values in a 21st-century liberalism 5.0.

As with earlier versions, liberalism 5.0 must build on the best of what has gone before while making adjustments—radical when necessary, though never gratuitously so—to existing beliefs and institutions. 5.0 liberals must challenge the right of blue [4.1] liberals to own the L-word, seeking both to convince 4.1 liberals to come back to the future and denouncing those who won’t as the blinkered reactionaries and speed bumps they are.

And I agree with him when he says

. . . Many believe that the real ideological contest in America today is between “red” liberalism 3.0 (the more individualistic, laissez-faire, often evangelical kind of liberalism of the 19th century) and the more state-oriented, collectively minded post-World War II 4.1 blue liberalism. Red liberals denounce blue liberals as betrayers of the liberal legacy, as ideology thieves who have taken a philosophy grounded in individual freedom and limited government and turned it into a charter for “big” government. Blue liberals respond that red liberals don’t understand how the complexities of modern life make the outmoded pieties of liberalism 3.0 inadequate to today’s problems. But common to both these positions is the belief that the American debate today is between two versions of the past: the (presumed) free market utopia of the 19th century versus the (presumed) social utopia of the New Deal/Great Society of more recent times. If that were true, this would be a nation of conservatives fighting reactionaries—the status quo of 1970 fighting the status quo of 1880.

I agree that a society dominated by a technocratic ethos is not a good thing, and I am never going to defend government overreach, but the fundamental problem that the early progressives recognized has not gone away: If there is no big government to protect the public interest, a huge, powerful private sector will dominate, and the key players in that sector care only about their own interests, not the public interest. Until the problem of bigness in the private sector is solved, bigness in the public sector is a necessity. Until the disruptive, destablizing effects of market capitalism can be tamed, there must be an adequate way to support the people whose lives have been disrupted and destabilized by it.

If you want to argue that capitalism is so great because it's the most effective wealth engine the world has ever seen, then there have to be mechanisms for distributing that wealth fairly and sanely, and if private market mechanisms fail in that regard, then the public sector must step in to provide the remedy. But if the task now is as Meade puts it to make "a genuinely positive attempt to realize old values in new circumstances," a 5.0 solution cannot be found if the public sector is locked in an ideological argument that pits 4.1 thinking against 3.0 thinking. 

So my argument in defense of the New Deal Compromise is not one that seeks a return to mid-20th Century arrangements--that was then; this is now--but that the New Deal provided for its time a much healthier balance between the interests of the private sector and the public interest that we need to emulate in principle now. This is a balance that was destroyed in the period since 1980, and we saw the destructive impact of this imablance in 2008. Whatever Liberalism 5.0 might be, it must restore this balance. Most of what we think of today as "crisis" derives not from uncontrollable structural changes, but from regressive 3.0 thinking poorly adapted to the real world in which we are living that dominated policy in the first decade of this century.

I would argue that, yes, there are structural issues that we need to deal with, but they could not have been handled worse by the Reagan/Norquist/Cheney resgressive 3.0 mindset. Real problems emerged in the 1970s; the weaknesses of L4.1 were exposed, and the worst possible approach was taken in trying to solve them. A saner approach would have been to make gradual adjustments to 4.1 thinking that might have slowly ratcheted us throught 4.2, 4.3, 4.4, etc., in a more orderly progression toward an eventual 5.0 realignment. Instead we've had reactionaries in the driver's seat dominated by 19th-Century 3.0 thinking. Meade correctly points out that it's a mistake to think that the argument is between 4.1  and 3.0 thinking, but seems not to be willing to point out the obvious, that 3.0 thinking ought not to have a place at the table at all. The real debate should be about finding ways to push basic 4.1 arrangements to be more adaptive to the changing global economic realities. 

Whenever anybody tells you that there is no money for entitlement programs like Medicare, Social Security, Unemployment Insurance, or Medicaid, they are talking ideological nonsense. The fiscal crisis at the federal, state, and local levels was engineered by no-taxes/no regulation ideologues on a mission to destroy the legitimacy of government. There is plenty of room for debate about how to find the right balance between the private and public sectors, but you cannot find that balance with people who think that the government has no legitimate role to play in redressing social and economic imbalances created by private markets. We don't have a resource problem; we have a thinking problem.

Anyway, Meade talks about five things that Americans want from American socieity. When I have a chance, I want to examine them, show where I agree and perhaps lay out a few other things that I think will be necessary for a workable 5.0. 

 

 

Happy New Year

(h/t Truthdig)

Henry A. Giroux: Neoliberalism Defined

Neoliberalism is a philosophy which construes profit making as the essence of democracy and consuming as the only operable form of citizenship. It also provides a rationale for a handful of private interests to control as much as possible of social, economic, and political life in order to maximize their personal profit. Neoliberalism is marked by a shift from the manufacturing to the service sector, the rise of temporary and part-time work, growth of the financial sphere and speculative activity, the spread of mass consumerism, the commodification of practically everything.

Neoliberalism combines free market ideology with the privatization of public wealth, the elimination of the social state and social protections, and the deregulation of economic activity. Core narratives of neoliberalism are: privatization, deregulation, commodification, and the selling off of state functions.  Neoliberalism advocates lifting the government oversight of free enterprise/trade thereby not providing checks and balances to prevent or mitigate social damage that might occur as a result of the policy of “no governmental interference”; eliminating public funding of social services; deregulating governmental involvement in anything that could cut into the profits of private enterprise; privatizing such enterprises as schools, hospitals, community-based organizations, and other entities traditionally held in the public trust; and eradicating the concept of “the public good” or “community” in favor of “individual responsibility.”

It is a form of terrorism because it abstracts economics from ethics and social costs, makes a mockery of democracy, works to dismantle the welfare state, thrives on militarization, undermines any public sphere not governed by market values, and transforms people into commodities. Neoliberalism’s rigid emphasis on unfettered individualism, competitiveness and flexibility displaces compassion, sharing and a concern for the welfare of others. In doing so, it dissolves crucial social bonds and undermines the profound nature of social responsibility and its ensuing concern for others.  In removing individuals from broader social obligations, it not only tears up social solidarities, it also promotes a kind of individualism that is almost pathological in its disdain for public goods, community, social provisions, and public values.  Given its tendency to instrumentalize knowledge, it exhibits mistrust for thoughtfulness, complexity, and critical dialogue and in doing so contributes to a culture of stupidity and cruelty in which the dominant ethic is organized around the discourse of war and a survival of the fittest mentality. Neoliberalism is the antithesis of democracy. (Source)

Yes. Our idea of political freedom has devolved into an idea of consumerist choice. It should be rather rooted in an older republican tradition which stipulates that free men and women rule themselves. We've have allowed ourselves to become serfs in a world dominated by corporate warlords who have convinced us we are free because we have the choice to shop at Wal-Mart or Target or Costco. 

 

Go Bernie

Why is this so hard for Americans to talk about? 

Quote of the Day: Glenn Greenwald

This last point is the critical one for me, and most illustrative of why I find the effort to cut Social Security so appalling.  For the moment, leave to the side abstract debates over the propriety of social programs, or even debates over specific proposals such as raising the retirement age or means-testing.  Instead, let's look at what is happening more broadly:

One of the most significant developments in the U.S. is the rapidly and severely increasing rich-poor gap.  A middle class standard of living is being suffocated and even slowly eliminated, as budget cuts cause an elimination of services that are hallmarks of first-world living.  Because the wealthiest Americans continue to consolidate both their monopoly on wealth and, more important, their control of Congress and the government generally, we respond to all of this by enacting even more policies which exacerbate that gap and favor even more the wealthiest factions while taking more from the poorest and most powerless.  And now, the very people responsible for the vulnerable financial state of the U.S. want to address that problem by targeting one of the very few guarantors in American life of a humane standard of living:  Social Security.

Advocates of cutting Social Security -- like Jonathan Chait and the Post's Fred Hiatt -- are the same people who cheered on the attack on Iraq and other policies of endless American War, which has drained America's budget and turned it into a debtor nation.  Millions of other human beings -- but not, of course, them -- suffered and sacrificed for those policies.  And now that it's time to address the economic carnage caused by all of this, to what do they turn for savings?  The handful of social programs which provide at least some small guarantee of a minimally decent standard of living in old age.  (Source)

Waiting for That Moment of Clarity

What's the cause of that sick feeling you probably have in your stomach? Josh Marshall attempts to answer:

What's particularly chilling is that the elite and popular policy debates are moving in the same direction. The professional economists, international financial agency types, etc are pushing for retrenchment. They seem to have won the argument at the G20 meeting. And at the same time, Republicans are pushing the argument that the stimulus spending which probably forestalled a Depression actually didn't do anything or even caused the problem. And the public seems open enough to that interpretation of events that Democrats have written off any new stimulus spending because they're scared off by the mid-term election. And because the Democrats have, Obama has.

None of this is anything that Krugman and Yglesias and a million other people haven't been saying for months. And hopefully everybody making this argument is wrong and the economic recovery is more robust than they think; it's certainly possible. But the economic and political repercussions seem both vast and perverse -- perverse because the people pushing the policies that could kill the economy seem most likely to gain from the damage politically.

It all has the look of watching a car head off the edge of a cliff in slow motion. (Josh Marshall)

I guess we won't have anything like a moment of clarity until the car explodes in a fireball.

We're dealing here with neo-Hooverism. Not Hooverism regarding the specific policies, but in the same fundamental lack of imagination. People don't ordinarily think of Hoover as a Progressive, but he was. He was a smart, decent guy. His problem was his failure to really comprehend the enormity of what he was dealing with. It seems as though that's what we have with Obama--a decent guy who doesn't seem to be able to grasp the significance of the moment.

In the meanwhile those lazy, unemployed folks need to be taught a lesson.

Quote of the Day: Brad DeLong

Have decades of widening wealth inequality created a chattering class of reporters, pundits and lobbyists who’ve lost their connection to mainstream America? Has the collapse of the union movement removed not only labor’s political muscle but its beating heart from the consciousness of the powerful? Has this recession, which has reduced hiring more than it has increased layoffs, left the kind of people who converse with the powerful in Washington secure in their jobs and thus communicating calm while the unemployed are engulfed in panic? Are we passively watching an unrepresented underclass of the long-term unemployed created before our eyes? (Source, h/t Digby)

American elites live in remarkably tightly sealed bubbles.  But it's only a matter of time before the bubbles start popping, and it won't be pretty.

Glenn Beck: Man of the Seventies

. . . the 1870s, that is.  From Robert H. Wiebe's The Search for Order 1877-1920:

America in the late nineteenth century was a society without a core.  It lacked those national centers of authority and information which might have given order to such swift changes.  American institutions were still oriented toward a community life where family and church, education and press, professions and government, all largely found their meaning by the way they fit one with another inside a town or a detached portion of the a city.  As men ranged farther and farther from their communities, they tried desperately to understand the larger world in terms of their small, familiar environment. They tried, in other words, to impose the known upon the unknown, to master an impersonal world through the customs of a personal society.  They failed, usually without recognizing why; and that failure to comprehend  a society they were helping to make contained the essence of the nation's story. p. 12

Quote of the Day: Ezra Klein

The White House obviously can't pick all its fights at once, but as of yet, it hasn't picked any fights on Labor's behalf, or even shown a bare interest in doing so in the future. Some probably take that as Obama being usefully dismissive of a special interest, but in the long-run, letting Labor continue to decline is bad politics for Democrats and bad policy for workers. (Source)

Labor leadership might stick with the Dems no matter what--what other choice do they have?-- but the rank and file won't.  They have good reason to think the Dems are just not their people.

Growth Idolaltry

Just saw Douthat's Sunday column on the causes of inequality, so I thought I'd comment on it in the light of my last post. Here's his set up:

The latest census figures show the gap between the wealthiest Americans and everybody else widening — rather than shrinking, as some economists expected — during the crash of 2008. An August report from Bank of America/Merrill Lynch suggested that middle-income Americans, buried in real-estate debt, will have to wait much longer than the rich to see their finances rebound.

This landscape will put liberalism to the test. Since Ronald Reagan was elected nearly 30 years ago, Democratic politicians have promised that their program could reverse the steady post-1970s growth of income inequality without sacrificing America’s economic dynamism.

But having promised win-win, they may deliver lose-lose. In the short run, Barack Obama could preside over an America that’s more economically stagnant and more stratified.

There’s only so much that politicians can do about broad socioeconomic trends. The rise of a more unequal America is a vexingly complicated issue, whose roots may wind too deep for public policy to reach.

Liberals, though, have spent decades telling a more simplistic story, in which conservatives bear all the blame for stagnating middle-class wages and skyrocketing upper-class wealth. So it’s fair to say that if a period of Democratic dominance doesn’t close the gap between the rich and the rest of us, it will represent a significant policy failure for contemporary liberalism.

It's interesting that he admits that this problem has become more serious since Ronald Reagan was elected, but dismisses as simplistic the idea that there might be a causal relationship there. Rather this column seeks to make the case that things are too far gone for the Democrats to do anything about it. I'm not sure that Douthat grasps the irony because he refuses to admit Repubiican culpability. But really what he's saying is that Republicans have dug us into such a deep hole that the Democrats will find it impossible to dig us out, and that's great news for Republicans because the Dems will get all the blame. But let's leave that aside for now.

Decent conservatives and Libertarians will tell you that they see increasing inequality as a problem, but that they disagree with Liberals about how to solve it. In terms of the Liberty/Equality balance I've been talking about, a libertarian/conservative is someone who sees the danger as coming from large institutions so focused on promoting Equality that they create torpor where there should be initiative and creativity. "You want to solve the inequality problem?", they ask, "Well then, l increase Liberty and initiative. Big Government is never a solution; it's main function is to bog things down, not to engender dynamic improvements.

He then goes on to predict failure for the Democrats' because of their use of ineffective tactics that relate to the tax code, immigration policy, and educational reform. Democrats aren't going to increase taxes on the rich, because they are as coopted by the rich as the Republicans are.  And even if they do, it won't change anything.  Democrats' liberal attitudes toward immigration means that there will always a new influx of the poor, which won't help them in the numbers game. And then goes on to blame teachers' unions and the national educational establishment--both Democrat strongholds--for preventing a choice-oriented competition to produce better schools and teachers. Whatever.

The bottom line for him is summed up in his final grafs:

This is the lesson of Western Europe, where the public sector is larger and the income distribution much more egalitarian. The European experience suggests that specific policy interventions — the shape of the tax code, the design of the education system — may matter less in the long run than the sheer size of the state. If you funnel enough of a nation’s gross domestic product through a bureaucracy, the gap between the upper class and everybody else usually compresses.

But economic growth often compresses along with it. This is already the logic of our current fiscal trajectory: ever-larger government, and ever-slower growth.

That combination could eventually create the more egalitarian America that Democrats have long promised to deliver. The question is whether Americans will thank them for it.

Right: Less Liberty = More Equality, but less growth = more unhappiness. But we had plenty of economic growth during the last thirty years that correlated with disconcerting levels of  growth in economic inequality and economic anxiety. Maybe slower growth is an acceptable tradeoff if it means less in the way of extreme levels of both wealth and poverty. And maybe happiness is not really linked to growth.

Although it is axiomatic for American politics, economic growth is not the be-all and end-all of social happiness. People really don't need that much to live decent lives.  Where real happiness, creativity, and initiatives lie is not in the economic sphere but in the cultural sphere--the sphere of soul--and that's where we have a serious social deficit--insofar as we've allowed materialistic ideas of happiness push out more soulful ones.  We need more equality in the economic sphere, and to look for initiatives in the cultural sphere to deliver the soulful satisfactions that come with a life well-lived, and you don't need excessive amount of wealth to do that. But you need enough.

A  win in the direction of economic equality now might mean a slight loss for Libertarian ideas of economic growth--but it's not a zero sum game, it's not about either win/lose, win/win, or lose/lose, but of adjustments to find the right balance.