Wednesday, December 30, 2009

James Howard Kunstler essays Forecast 2010 - Clusterfuck Nation, beginning:
"There are always disagreements in a society, differences of opinion, and contested ideas, but I don't remember any period in my own longish life, even the Vietnam uproar, when the collective sense of purpose, intent, and self-confidence was so muddled in this country, so detached from reality. Obviously, in saying this I'm assuming that I have some reliable notion of what's real. I admit the possibility that I'm as mistaken as anyone else."

Saturday, December 26, 2009

Visionary Incrementalism

Steve Benen at Washington Monthly:
"Obama has not changed the political structure, he's working within it. Accusations about 'politics as usual' are not unfounded -- the agenda and direction of the country changed considerably on Inauguration Day, but the rules of the game haven't. President Obama's m.o., for the most part, seems to be built around choosing the issue, getting the best deal he thinks he can get, and then moving onto the next issue. The focus places an emphasis on problem solving, while leaving traditional power structures in place."

There's a significant split in opinion among Democrats in response to this pattern, and an inherent threat to Obama's legitimacy as a progressive leader.

Steven Benen takes the hopeful, wait-n-see:

"At least for now, that is.

President Obama has unique gifts, but overturning the D.C. political establishment in 11 months probably isn't a reasonable expectation. If/when health care reform becomes law, it will change, at a rather fundamental level, the relationship between the government and the populace, which may in turn create opportunities for re-writing the rules of the game. It's the kind of thing that will take time ... and a genuine, determined commitment. Time will tell."

Is Obama a slow turning, that is just getting started, or a grave, possibly fatal disappointment?

The question creates a natural divide, with many apologists saying that expectations for him were too high, etc.

I am sympathetic to this point of view. I admire pragmatism and a Whig sensibility, that preserves elites, but makes progress.

But, I worry. I don't think Obama can solve problems, and leave the power structure in place, or strengthen it, as Obama has consistently done, because -- fundamentally -- America's problems are its existing power structures.

I don't think a health insurance reform that leaves health insurance company stocks at a 52-year high is a good omen. I don't think a financial policy that grows the already gargantuan, largest banks can be a good thing.

Obama is not building new institutions, or undermining existing power structures. His health reform makes the promise of generous subsidies, but doesn't create a sure mechanism to fund them or deliver them; his health reform revises the rules on health insurance, but doesn't create an agency to enforce those rules.

Trading one futile, pointless, enormously costly war for another seems more like a step sideways, not forward.

It may be that there is wisdom here. Maybe these are baby steps, and one step will follow another, with increasing confidence. I'd like to believe that this health reform really does establish a principle of universal health care in our politics. I'd like to think Obama is committed to withdrawing from Afganistan . . . eventually. I'd like to think financial reforms are coming.

What I fear, though, is another a political storm, as the preservation of what clearly does not work, backfires. And, in that political storm, it will be the promise of progressive reform, which is discredited.

Who is Paying?

At Tiny Rates, Saving Money Costs Investors -
"Experts say risk-averse investors are effectively financing a second bailout of financial institutions, many of which have also raised fees and interest rates on credit cards.

“What the average citizen doesn’t explicitly understand is that a significant part of the government’s plan to repair the financial system and the economy is to pay savers nothing and allow damaged financial institutions to earn a nice, guaranteed spread,” said William H. Gross, co-chief investment officer of the Pacific Investment Management Company, or Pimco."

This is the Obama-Geithner "Plan" to save Too Big To Fail, in action.

Friday, December 25, 2009

Hurtling toward Crisis

Mark Schmitt | The American Prospect:
"any sense of movement or possibility in our political institutions -- and again, I mean mostly the Senate but not only the Senate -- is gone. . . .

I've always argued that Obama viewed his central domestic mission as changing the culture and practice of American politics. The passage of health reform is a revelation of just how desperately that change is needed and how difficult it will be to achieve."

Matthew Yglesias » Hurtling Toward Crisis:
"I think that during the health care debate you can see the outlines of a growing political crisis in the United States. The go-for-broke tactics used in the health care debate were (and are) annoying to proponents of reform. But obviously the country existed without this bill for a long time and can keep on existing. Think about extending this precedent forward to the time when we need to deal with the budget deficit, however, and things start to look very different. You just can’t deal with the country’s fiscal challenges within the political dynamic that currently exists. There’s no way."

Stirling Newberry, July 17, 2009:
"the coalition of catastrophe is gathering . . . What is now is to realize that the fix is in, your leaders are selling you out, and they will present the dregs of capitulation, mixed with little real compromise, and some sparse victories, as great and sweeping. . . . The right is at a low ebb, its ideology discredited, its powerful financial backers -- temporarily -- coopted, its public figures so clearly third and fourth generation. A muscular left would spend this moment to shatter and remake the American consensus. But that is not what is being done. The only people the leadership of the left can bully are members of the left. They have no problem with that.

But can things be different in the future? They must be, it is necessity. And that is the one element that is missing from the present crisis. For all the talk of 1929 redux, the reality is that this crisis was a paper crisis, not a physical one. Once the overheating of Iraq, and the total incompetence of Bush was removed, the world was no longer on the verge of unravelling at any moment. It is not a good present, but . . .

Necessity will come."

Ersatz Health Reform

There's been some celebratory self-congratulation on the imminent enactment of a health care reform. I find myself fearful and deeply ambivalent.

When I was a little kid, my mother once made an 'apple pie' out of Ritz Crackers. It was something she learned to do, during WWII shortages.

This reform is like that apple pie, but less tasty. It's an ersatz form of universal health insurance. Instead of the simplicity of single-payer and tax-financing, we have a Rube Goldberg contraption of taxes, subsidies, regulations without a regulator, and a mandate.

Telling us that this is the best our supposedly democratic system can produce is deeply discouraging.

This is a system that is designed to fail. Deliberately designed to fail: subsidies that will be cut, regulations that will never be enforced effectively, payoffs to insurance companies, pharma and providers that obviate any cost containment. And, a leisurely pace of implementation that puts two general elections between now and the program having full effect.

I'm not saying, 'Kill the Bill', but I am saying it may be political suicide for liberals to celebrate it as the greatest thing since Medicare.

Now, at what may well be the zenith of liberal power in the aftermath of the catastrophe of GWB, this is the best we can do? To fight the plutocracy to a standstill?

This bill puts us up on sharp ridge. The system this bill creates is even less sustainable that the system we had. It is hard to believe such a thing would be possible. Either that basic unworkability will be recognized and the Republicans will start taking it apart; or that unworkability will be recognized, and the Democrats will start repairing the defects. But, the unworkability will be recognized, and action taken on the basis of that recognition.

Every syllable uttered by Democrats concerning how great it will be, is undermining their credibility as repairmen.

The sclerosis of corruption and special-interest politics has the country's political process stalemated, at the very moment when radical change is acutely needed.

The shape and character of this reform is just more evidence.

Confidence in the democratic process is being severely undermined. I cannot celebrate that.

Sunday, December 20, 2009

Strategic default

Steve Randy Waldman, proprietor of Interfluidity, hoists a comment, and it is a remarkably good narrative, about the corrosive effect on culture, which the debasement of our institutions is creating.

interfluidity » Strategic default: a soldier’s perspective

The rules of any game evolve out of how the game is played over time. Changing the rules is strategic game-play, as is exploiting the rules in game-play. The rules, whatever they are, are subject to erosion, and that means that all the informal conventions and habits, that make complex institutions work, are also eroding.

The U.S. is at the tail-end of a long period of decadence, that began with Richard Nixon's election and accelerated with Ronald Reagan. Every institutional structure, and the economic foundation of the country's prosperity, as well constitutional democracy -- everything is being ground down, destroyed, wrecked.

Are Americans a Broken People?


Friday, December 18, 2009

Coalition politics

Quite a while back, I took a very simple heuristic analysis from Stirling Newberry, and I have used it, again and again, to get analysis of American politics going.

Stirling Newberry's formula, which I am no doubt distorting and oversimplifying, was that there are always three, generic groups vying for inclusion in a governing coalition. These groups are not necessarily coincident with political Party; the Parties may have other dimensions, and overlap these generic "ideological" groupings, as do interests and various aspects of identity politics. So, politics is more complicated three three groupings of political inclinations, but let's see how far it gets us. These groupings can be labeled, reactionary, conservative and progressive.

The labels suggest the definitions, and anything more I could say would just muddy things up. The basic idea is that it takes two out of three to govern. So, governance is always one leading a second, to the exclusion of the third; and strategy by one group is always aimed at changing partners, or threatening to change partners.

In this simple-minded formula, Reagan-Bush was conservatives leading reactionaries; Clinton was an attempt by conservatives to lead progressives; GWB was reactionaries leading conservatives, and now Obama.

Obama formed a governing coalition by drawing a small number of conservatives (and corporate financial support) out of, or away from the Republican Party, where the many secular conservatives, corporate conservatives have felt alienated by the antics and incompetence of the far Right. (Sarah Palin?)

Obama's coalition is different from Clinton's, in that Clinton was just trying to retard the migration of (white southern) conservatives out of the Democratic Party, while Obama has brought (northeastern and western) conservatives into the Democratic Party.

One of the tricks of tripartite governance is the mix of substantive (read: dollars) and symbolic goodies distributed. In general, the senior, leading partner gets the big bucks, while the junior partner gets symbolic actions. Under Reagan-Bush, with conservatives at the levers of power, and the reactionary racists and religious right still in the wilderness, the big bucks flowed to the wealthy and powerful freely enough, but the reactionaries got very little of substance. Social liberalization of the country continued on many, but not all, fronts.

In many ways, progressives and liberals were co-opted by the politics of the 1980s -- they were as much the junior clients of the corporate conservative governing coalition as the reactionary right. Both were being kept quiet and marginalized, while the New Deal was taken apart -- unions destroyed, savings and loans destroyed, etc. They were kept quiet, by the provision of costless symbols and the unimpeded forward momentum of social change began in the 1960s: the steady erosion of racial and sexual authoritarian oppression and peace abroad was a gift to the exhausted Left.

But, the tectonic plates of American politics kept moving. The increasing interest in the mechanisms of climate, have revealed that the slow movement of the continents, floating as they do, on the viscous mantle of the earth, has changed the earth's climate over time. Consolidation of continental mass can impede and shape ocean circulation, creating wide-spread drought or ice ages.

Authoritarian conservatives were moving steadily into the Republican Party, making both Parties more purely "ideological" in character, the distinction of partisan identity being almost entirely a matter of personal worldview and attitude. I am using "authoritarian" in its social-psychology sense, as a grouping defined by a particular cluster of attitudes, and suggesting that authoritarians makes up an important part of the electoral base of the "reactionaries". "Reactionary" is the heuristic grouping, I am taking from Newberry, and is a label for a governing policy stance, highly supportive of vested interests and not very imaginative or rational.

Authoritarian "followers" are ready-made for exploitation by demagogues, which is one reason, why they are often so welcomed into a reactionary political grouping. The leadership of a reactionary group can lie with impunity to its authoritarian followers. Mitt Romney, Mike Huckabee and Sarah Palin are tailor-made "leaders" for a reactionary politics, based on an authoritarian electoral base. It's not quite Hapsburgs and Hohenzollerns leading peasant farmers and Junkers with bad attitudes, but it could be pretty close, given enough time.

But, too many authoritarians in a room tends to be repulsive to everyone else. They are too gullible, too stupid, too irrational, too prejudiced. A few strengthen an organization, giving any program of action the sinews of willing obedience and group self-discipline: an army needs to have the social impulse to walk in unison. But, too many is dysfunctional. An Army cannot function, either, when it is dominated by martinets; incompetence, then, takes over, and the capacity to deny reality -- which authoritarians have in spades -- becomes a perverse imperative to act stupidly. To invade Iraq, for example, in reprisal for something Iraq had nothing to do with, and to extinguish a threat Iraq could not credibly make, at a cost several times in value, the cost of either offense.

So, the Republican Party's evolution has become toxic, even to conservatives, who have an interest in competent governance. Losing two pointless wars and bringing about a near-collapse of the financial system is too high a price to pay, evidently.

But, these centrist conservatives, basically, remain, well, conservative. For thirty years, they have accepted the slow decline and deterioration of the country, erosion of the economic and institutional base, and their politics consists entirely of imposing the costs of that decline on the poor and middle class.

They have orchestrated the maintenance of a huge military establishment, and its deployment in costly and pointless engagements, shaped not by a striving to achieve strategic ends, but by the shaping the logistical means in a way that creates a maximum of profits for the military-industrial complex.

They have pursued a macroeconomic policy of substituting increasing debt for rising income, in powering the standard of living -- a grasshopper strategy, in place of an ant strategy, if you will. And, they have advocated, ceaselessly, to impose all the pain of declining income on the middle class, eroding pensions, and attacking social security.

Obama has the corrupt centrist conservatives in a governing coalition with the progressives. And, so far, it is not working out.

In the health care reform struggle, as in the financial sector reform debate, as in war policy in Afganistan, the conservatives have shown, again and again, that they are not willing to let the progressives make progress.

Obama has favored the centrists on substance, and offered the progressives symbols.

The dilemma is becoming daily more clear: only the substance really matters. The country desperately needs to change direction, on substance. Continued erosion, with the costs always crammed down on the poor and middle class, is not a stable solution set.

A financial reform that makes the system more fragile, a health care reform that makes health care, effectively, even more expensive for people, who cannot afford it now, a war policy that increases military budgets -- this is not a formula for long-term success or political stability.

Sunday, December 13, 2009

There's something wrong with this picture.

Matt Taibbi has written a polemic -- Obama's Big Sellout : Rolling Stone -- attacking the Obama Administration's lovefest with the financial sector, and expressing the disappointment felt in the Democratic Party, at the absence of progressive change.

Matt Yglesias suggests that the problem, lies more in the Congress than in Obama, more in the centrism of Ben Nelson, Senator from Nebraska and the most right-leaning Democrat in Congress, than in the centrism of Obama, or such leading Obama administration stalwarts as Larry Summers.

Matt's theory of politics is one of continuum, I guess, and if the Congress moves a bit Left, with the mid-terms, the Left sees more of its agenda enacted.

To quote Matt, Matt: "That’s not how things work."

Steve Benen summarizes the emerging political dynamic:
"Over the last several months, the right has come to believe that the president is a fascist/communist, intent on destroying the country, while at the same time, many on the left have come to believe the president is a conservative sell-out. The enraged right can't wait to vote and push the progressive agenda out of reach. The dejected left is feeling inclined to stay home, which as it turns out, also pushes the progressive agenda out of reach."

It'd be great to see the governing majority give Democratic voters a reason to feel excited. It's not like there's a secret agenda needed to make the base happy: finish health care; pass a jobs bill; finish the climate bill; bring some accountability to the financial industry; finish the education bill; pick up immigration reform; repeal 'Don't Ask, Don't Tell.' Demonstrate that a Democratic Congress and a Democratic president have the wherewithal to tackle the issues that matter and know how to get things done.

But Matt's call for a shift in focus is important here. Remember: nothing becomes law in this Congress unless Ben Nelson and Joe Lieberman approve. Literally, nothing. That's not an encouraging legislative dynamic, and it's not within the power of the White House to change it.

It is within the power of voters to change it.

Obama has asked Congress to deliver on a pretty large-scale agenda. For all the talk about the president's liberalism or lack thereof, the wish-list he's presented to lawmakers is fairly progressive, and it's not as if Obama is going to start vetoing bills for being too liberal.

But Congress isn't delivering.

I personally wouldn't let Obama entirely off the hook. The President's ability to set the agenda rests on his skill in proposing. And, in many ways Obama has fallen short, precisely at the proposing stage.

Moreover, politics is a bit more strategic than counting the same noses, over and over.

But, Steve Benen gets a little more specific than Yglesias about the mechanics:

The two obvious explanations happen to be the right ones: 1) for the first time in American history, every Senate bill needs 60 votes, which makes ambitious/progressive policymaking all but impossible; and 2) there are a whole lot of center-right Democratic lawmakers, which, again, makes ambitious/progressive policymaking that much more difficult."

That filibuster threshold of 60, which didn't seem to trouble the Bush Administration in the years when the Republicans controlled Congress is a mite suspicious. If Ben Nelson is not the 60th vote, his approval is not needed for every bill that passes. He's much less important.

The Constitution says the Democrats need 50 votes to pass legislation thru the Senate. Any supermajority requirement is simply contrary to the Constitution. It is an excuse that Obama and Harry Reid have grabbed onto, in order to govern the country from the corrupt center. The Democratic Majority can break the filibuster rule at anytime. They don't do it, because they don't want to.

American politics has become a single continuum of worldview for the first time in our political history. Every Democrat is more progressive and more liberal than every Republican. In Congress, and pretty much in the country.

And, in this continuum politics, the Left has a hard time reaching anyone on the Right. The Middle, the Center, is feeling its power, and is not listening to reason, because
1.) it has forgotten how;
2.) it doesn't have to (it thinks) to win elections or win legislative battles.
The Center does not feel the need to make concessions to the Left.

And, yes, the Centrist instincts of the Obama Administration are exacerbating this troubling situation.

I don't know what will happen in the mid-terms. If centrist Democrats lose their seats, but the Democrats retain their majority, the progressive agenda might actually get easier to pass, even if the Republican minority increases in size. If corrupt centrism is no longer a winning electoral strategy, the behavior of moderate Democrats in Congress is likely to change. And, the Democrat majority might well become more coherent.

I had this vision of the future . . .

The Secret Diary of Steve Jobs : A not-so-brief chat with Randall Stephenson of AT&T:
"Right here in your own backyard, an American company creates a brilliant phone, and that company hands it to you, and gives you an exclusive deal to carry it — and all you guys can do is complain about how much people want to use it. You, Randall Stephenson, and your lazy stupid company — you are the problem. You are what’s wrong with this country.

I stopped, then. There was nothing on the line. Silence. I said, Randall? He goes, Yeah, I’m here. I said, Does any of that make sense? He says, Yeah, but we’re still not going to do it. See, when you run the numbers what you find is that we’re actually better off running a shitty network than making the investment to build a good one. It’s just numbers, Steve. You can’t charge enough to get a return on the investment.

Now there was silence again. This time I was the one not talking. There was this weird lump in my throat, this tightness in my chest. I had this vision of the future — a ruined empire, run by number crunchers, squalid and stupid and puffed up with phony patriotism, settling for a long slow decline."

This country doesn't work. We decided to entrust the development of the internet and the cellphone network to American Telephone & Telegraph. Telegraph! Hello?!?

Saturday, December 5, 2009

Just the usual . . .

Paul Krugman quotes Ken Rogoff, approvingly: " “The United States is going through a garden-variety severe financial crisis.” "

I think I understand where Krugman is coming from, with this, but I don't understand where he's going.

He's quite right, in the sense that economic analysis of the financial crisis and its economic consequences can go fairly far, by following quite conventional lines. As an economist, Krugman can feel that he "understands" many aspects of the crisis and its consequences, based on well-established theory.

But, seeing recent events in this way requires abstracting away from an historical context, and away from particularities, that make these events "epochal".

This crisis is a re-creation of the Great Depression. It isn't a matter of fatuous, Sunday supplement parallels. It is the consequence of policy, pursued relentlessly by political factions determined to undo the New Deal. And, it also represents the end of post-WWII American economic dominance of the globe.

These are not just rhetorical points about the supposed "meaning" of these events. There are real, abiding problems and political issues, which should not be abstracted away from: the U.S. needs fundamental reform, needs to depart from the course followed over the last 10 to 30 years.

It is not a "garden-variety" financial crisis in this very important sense: the status quo ante is not, in any way, a model of a sustainable "solution" set.

People have tried to say this in a variety of ways. One rhetorical formula was to emphasize that this was a "solvency" crisis, and not merely a "liquidity" crisis.

The importance of deliberate re-structuring puts reform front and center. This is clearly a challenge for regulatory reform. It is also a challenge for fiscal policy, which cannot just be a collection of Federal spending and tax-cuts, but something that begins to change the economic development course of the country. How this crisis is resolved will determine whether the country is able to revive, or continues to deteriorate.

A Word for the Day

Wikipedia, the free encyclopedia: "Agnotology"

A commenter at Mark Thoma's blog brings my attention to a new word: "agnotology": "the study of culturally-induced ignorance or doubt".

Contrasted with "epistemology, the theory of knowledge, [which] questions how we know . . . [agnotology] questions why we do not know: "Ignorance is often not merely the absence of knowledge but an outcome of cultural and political struggle." -- a socially-constructed, "structured apathy".

Examples, apparently, abound, including the defensive public relations of the tobacco industry, defending its product and profits against awareness of the risk to life and health, but my immediate thoughts are on "climate-gate", the manufactured scandal around e-mails stolen from British scientists, charged with keeping and interpreting the global temperature record.

John Tierney, the right-wing hack pundit at the New York Times has a column, giving his spin on climate-gate, and both explains and (unintentionally) illustrates the problem. His article leaves the reader knowing less. It is a remarkable performance, really, full of pious nonsense and false equivalence, but effective as strategic political propaganda.

Thursday, December 3, 2009

Where the Money is

Bernanke, Chairman of the Federal Reserve: "'Willie Sutton robbed banks because that's where the money is, as he put it,' Bernanke said. 'The money in this case is in entitlements.'"

Bernanke has taken as his mission in life, the repeal of the New Deal.

The return of the plutocrats

Felix Salmon:

The underlying problem here is a fundamental disconnect between the plutocrats and the people. . . .

We’re at a fork in the road right now. People who were comfortable with seven- and eight-figure salaries a couple of years ago have a natural tendency to want to return to the status quo ante; the rest of us see a once-in-a-lifetime opportunity to bring executive pay down to the kind of levels which normal human beings can relate to. Given that the pay levels of old clearly did no good and colorably did a great deal of harm, that doesn’t sound like an unreasonable request. But there aren’t any mechanisms in place to make it happen . . .

So the plutocrats, it seems are going to win. They had a nasty couple of years, by plutocrat standards, and in a handful of companies operating under de facto state control they don’t quite have the free rein they would ideally like. But the system as a whole hasn’t changed, and those who thought that it might can’t quite believe how naive they were.

Indeed, the Perfect Storm came and went, and nothing changed.

I like Felix Salmon's writing a lot. I wonder what kind of career he can have, after writing this column. Because things have not changed.

Tuesday, December 1, 2009


I got a call from a worker bee at the Democratic National Committee, working to gather funds for an advertising campaign in support of Obama's Health Care Reform.

And, I gave $50.

With very great reluctance, borne of feelings of hopeless futility.

Why would I want to spend my money for a health reform that accomplishes little or nothing of actual benefit to me, or to the mass of people?

The kind of radical, comprehensive re-structuring of health care, which is clearly necessary and desirable would begin with single-payer health insurance, in some form. But, such a proposal was never on the table.

I told the lady I was a very unhappy Democrat. I didn't vote for continuation of war. For secret torture prisons. For financial bailouts that deliver billions to Goldman Sachs, but nothing for foreclosure relief or jobs.

Or, for a health care reform featuring a new and costly mandate placed on working families, but holding Big Pharma secure in its perquisites.

"Bring on the Revolution", I said. And, I meant it. This country needs fundamental change. And, it is getting mindless tinkering with the status quo, with no recognition that the status is bankrupt, economically and morally.