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Also Sprach Tea Partiers October 14, 2010

Posted by Dwight Furrow in Dwight Furrow's Posts, Philosophy, politics.
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Berkeley economist Brad Delong laments
Somehow I Am Now Wishing I Had Read More Nietszche When I Was Younger…

I’m not sure if Delong wishes he had read Nietzsche’s discussion of “ressentiment” in the Genealogy of Morals (where Nietzche claims roughly that the weak and frustrated create a moral code that absolves them of responsibility for their frustration) or the end of the Gay Science where the madman warns of impending catastrophe and he is treated as a fool. But this conversation between Delong and standard issue right-wing crazies is hilarious.

If you are looking for evidence that no real debate can be had with these people, here it is.

Last week I spent some time with a group of people I don’t usually spend much time talking to. They were not rich–by which I don’t mean that they had overstretched themselves by buying a seven-figure principal residence but rather that they weren’t rich: their household income was in the five or, for some of them, perhaps the very low six figures. And (which is unusual for Berkeley) they were not lefties, neither cultural nor sociological. They were deeply concerned with the future of our country. And they were desperate to figure out how to engage in effective political action–but had few illusions that the politicians they would vote for in November were their kind of people with their interests at heart.

I suppose that in a previous era, back when there were private-sector unions, they might have been union stewards. But now we have no private-sector unions.

And so they are activists from the California Tea Party.

So I went through my standard spiel. Housing bubble. 5 million excess houses built in the desert between Los Angeles and Albuquerque, and on all of them the least $100K of mortgage debt will not be repaid. A $500B loss in an $80T world economy. Shouldn’t have been a problem—securitization exists to spread risks. But the banks pretended that the AAA MBS issued by other banks were high-quality Basel capital even though they knew full well the dreck that they were issuing. A financial multiplier of 40. A flight to safety. A big shift away from spending on currently-produced goods and services and on currently-employed labor as people tried to build up their stocks of safe assets. A multiplier as people who lost their jobs stopped spending, and the situation snowballed.

It could have been worse, I said. Without all of the rescue policies we would probably now have an unemployment rate of 16 percent rather than 10 percent.

But they question is what to do now with the economy. The idea is not to go to socialism—not to nationalize large chunks of the economy and have everybody work for the government—but to conduct strategic interventions in financial markets. Relieve the excess demand for safe high-quality assets and you remove the pressure on people to spend less than they earn as they try to build up their stocks of safe assets, and you get a virtuous circle of strong recovery.

So, I said, the right thing to do is the Bagehot rule: lend freely at a penalty rate. The government should throw huge amounts of money at the financial markets and in the process take a large chunk of the upside in equities and options.

SOCIALISM, they said. We don’t want SOCIALISM.

But it’s not socialism, I said. It’s an attempt to avoid socialism—it’s an attempt to conduct a strategic intervention into the market economy so that it can rebalance itself.

SOCIALISM, they said.

Well, I said, how about lending freely to the financial sector but forget Bagehot’s “penalty rate” stuff?

BAILOUT, they said. BAILOUT OF CORRUPT FINANCIERS WITH WASHINGTON CONNECTIONS, they said. WE LIKE THAT EVEN LESS.

Well, I said, how about pushing off taxes into the future, bringing forward infrastructure spending we know that we will want to do, and financing it by issuing more government debt? The spending should put some people to work, and the extra government bonds we print up will increase the supply of safe assets, decrease the excess demand, and so remove some of the downward pressure that is inducing people to spend less than they earn/

DEFICIT, they said. DEFICIT BAD. MUST REDUCE THE DEFICIT. GOVERNMENT MUST LIVE WITHIN ITS MEANS.

But, I said, the U.S. government now can borrow at unbelievable terms. If you could borrow at such terms, you would bust out the top of your house and add a second story immediately.

GOVERNMENT MUST LIVE WITHIN ITS MEANS.

OK, I said. How about having the federal government aid the states. We want to keep our police and our fire and our road maintenance and our schools running at their efficient levels, don’t we? It’s stupid to cut back on the long-term foundations of our economy and its growth because of recession, isn’t it. How about a large program of federal aid to the states so that teachers, sewer workers, police officers, and firefighters can keep their jobs, keep protecting us—and keep spending and so provide employment for the rest of us?

ARE YOU KIDDING? THEY HAVE KEPT THEIR UNIONS. WE HAVE LOST OUR UNIONS. WE HAVE LOST OUR JOBS. THEY HAVE GONE TO CHINA. THEY HAVE VANISHED. WE ARE UNEMPLOYED. IF WE ARE EMPLOYED WE HAVE NO BARGAINING POWER WITH OUR BOSSES. IT IS NOT FAIR FOR STATE WORKERS TO NOT ONLY HAVE UNIONS, BARGAINING POWER, AND PENSIONS, BUT FOR THEM TO HAVE THEIR JOBS TOO. SINCE WE ARE LOSING OUR JOBS THEY SHOULD LOSE THEIR JOBS TOO. IT IS NOT FAIR.

Oh.

EVERYTHING YOU PROPOSE TAKES OUR HARD-EARNED MONEY, TAXES IT AWAY FROM US, AND GIVES IT TO SOMEBODY ELSE.

Oh.

BERKELEY SOCIALIST.

So what do you think we should do?

GET US JOBS!

But you have just rejected every idea I have for boosting employment—short of nationalizing the means of production and employing everybody by the government, that is. What are your ideas?

CUT TAXES. ABOLISH THE EPA. REPEAL HEALTH CARE REFORM. KEEP GOVERNMENT’S HANDS OFF OF MEDICARE. RAISE SOCIAL SECURITY PAYMENTS. CUT THE DEFICIT.

To call this incoherent doesn’t quite capture the utter diabolical ignorance.

book-section-book-cover2 Dwight Furrow is author of

Reviving the Left: The Need to Restore Liberal Values in America

For political commentary by Dwight Furrow visit: www.revivingliberalism.com

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It’s Not Funny September 20, 2010

Posted by Dwight Furrow in Dwight Furrow's Posts, politics, Uncategorized.
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I must confess that I watch the goings-on in the political world with nothing but chagrin these days. When allegedly legitimate candidates for office advocate violence and threaten to repeal civil rights laws and the social safety net, I fear for this country and its people.

The so-called “tea party” movement with its radical pretensions and faux populist appeal has done well in some recent primaries. And “responsible” members of the GOP are doing nothing to discourage their ascendency while the media, seeking only controversy to sell ads, grovel at their feet.

As Robert Reich writes:

In Delaware, Palin-endorsed tea partier Christine O’Donnell is so far right she’s called “delusional” by Delaware’s GOP leader. In Kentucky, Palin-favored Rand Paul says the Civil Rights Act of 1964 shouldn’t apply to businesses. In Colorado, tea partier Ken Buck talks of getting rid of the 17th amendment, which provides for the direct election of senators. In Nevada, Palin-favored Sharon Angle has called for “2nd Amendment remedies” if Congress doesn’t change hands. […]

When Newt Gingrich, who has all but declared his candidacy for president in 2012, says President Obama exhibits “Kenyan anti-colonial” behavior, and that allowing an Islamic center near New York’s Ground Zero is tantamount to permitting Nazi’s near the Holocost Museum, he doesn’t sound like an ordinary American. He sounds like a hate-mongering crackpot. We’re not dealing with “extremism in defense of liberty,” as Barry Goldwater put it in 1964 (and even then, a large majority of Americans decided against him). We’re dealing with extremism that defies the principles undergirding our Constitution. […]

We’re in the midst of an ongoing economic emergency that requires clear thinking, intense work, and practical ideas. It also requires that we join together rather than be pushed apart. The loonies who are taking over the GOP pose a real and present danger.

If these people were not being accepted, by mainstream politicians and the media, as responsible public servants, we could all just have a laugh at the marginal nutjobs who are sometimes attracted to politics.

But they are way too close to power for comfort. It is no longer funny.

Democrats, even if discouraged, need to come out to vote in November.

book-section-book-cover2 Dwight Furrow is author of

Reviving the Left: The Need to Restore Liberal Values in America

For political commentary by Dwight Furrow visit: www.revivingliberalism.com

The Same Old Game May 26, 2010

Posted by Dwight Furrow in Dwight Furrow's Posts, politics.
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It has been said before but it is worth a reminder—if you want to know what is going on in politics follow the money.

The press has focused on the tea party crowd and portrays opposition to Obama as a grass roots phenomenon. But Obama haters are not limited to “ordinary folks”.

As Paul Krugman reports:   

Look, for example, at the campaign contributions of commercial banks – traditionally Republican-leaning, but only mildly so. So far this year, according to the Washington Post, 63 percent of spending by banks’ corporate PACs has gone to Republicans, up from 53 percent last year. Securities and investment firms, traditionally Democratic-leaning, are now giving more money to Republicans. And oil and gas companies, always Republican-leaning, have gone all out, bestowing 76 percent of their largess on the GOP.

These are extraordinary numbers given the normal tendency of corporate money to flow to the party in power. Corporate America, however, really, truly hates the current administration. Wall Street, for example, is in “a state of bitter, seething, hysterical fury” toward the president, writes John Heilemann of New York magazine. What’s going on? One answer is taxes – not so much on corporations themselves as on the people who run them. The Obama administration plans to raise tax rates on upper brackets back to Clinton-era levels.

Furthermore, health reform will in part be paid for with surtaxes on high-income individuals. All this will amount to a significant financial hit to CEOs, investment bankers and other masters of the universe.

Now, don’t cry for these people: They’ll still be doing extremely well, and by and large they’ll be paying little more as a percentage of their income than they did in the 1990s. Yet the fact that the tax increases they’re facing are reasonable doesn’t stop them from being very, very angry.

Nor are taxes the whole story.

Although many liberals are disappointed in Obama’s timid attempts to regulate Wall St. and the oil industry, corporate America is livid that the free ride they received from the Bush Administration is over.

From the outside, this rage against regulation seems bizarre. I mean, what did they expect? The financial industry, in particular, ran wild under deregulation, eventually bringing on a crisis that has left 15 million Americans unemployed, and required large-scale taxpayer-financed bailouts to avoid an even worse outcome. Did Wall Street expect to emerge from all that without facing some new restrictions? Apparently it did.

So what President Barack Obama and his party now face isn’t just, or even mainly, an opposition grounded in right-wing populism. For grass-roots anger is being channeled and exploited by corporate interests, which will be the big winners if the GOP does well in November.

If this sounds familiar, it should: It’s the same formula the right has been using for a generation. Use identity politics to whip up the base; then, when the election is over, give priority to the concerns of your corporate donors. Run as the candidate of “real Americans,” not those soft-on-terror East Coast liberals; then, once you’ve won, declare that you have a mandate to privatize Social Security. It comes as no surprise to learn that American Crossroads, a new organization whose goal is to deploy large amounts of corporate cash on behalf of Republican candidates, is the brainchild of none other than Karl Rove.

The tea party movement is nothing but the visible manifestation of this resurgence of corporate influence. And the corporations are quite of aware of how this game is played. FreedomWorks, the brainchild of former House Republican leader Dick Army, is funded primarily by corporations and is the main financial backer of the tea partiers. Instead of acting in their self-interest and working towards a federal government that has the resources to constrain corporations, the tea partiers are actively working against their own interests trying to insure that corporate America can operate with impunity.

The plutocrats with the money know that there are enough people for whom tribalism trumps self-interest, confident that they can kick up enough racism, fear, and resentment to sustain sufficient anti-government fervor to return us to the good old days when Wall St. whiz kids  and Saudi sheiks set the political agenda for the rest of the world.

book-section-book-cover2 Dwight Furrow is author of

Reviving the Left: The Need to Restore Liberal Values in America

For political commentary by Dwight Furrow visit: www.revivingliberalism.com

 

If You Want Good Government You Have to Trust Government April 22, 2010

Posted by Dwight Furrow in Dwight Furrow's Posts, politics.
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Regarding how we get out of the fiscal mess created by the Bush Administration, Tyler Cowen makes an important point:

Most relevant, perhaps, is Canada, which cut federal government spending by about 20 percent from 1992 to 1997. The Liberal Party, headed by Jean Chrétien as prime minister and Paul Martin as finance minister, led most of this shift. Prompted by the financial debacle in Mexico, Canadian leaders had the courage and the foresight to make those spending cuts before a fiscal crisis was upon them. In his book “In the Long Run We’re All Dead: The Canadian Turn to Fiscal Restraint,” Timothy Lewis describes Canada’s move from fiscal irresponsibility to a balanced budget — a history that helps explain why the country has managed the current global recession relatively well.

To be sure, the spending cuts meant fewer government services, most of all for health care, and big cuts in agricultural subsidies. But Canada remained a highly humane society, and American liberals continue to cite it as a beacon of progressive values.

Counterintuitively, the relatively strong Canadian trust in government may have paved the way for government spending cuts, a pattern that also appears in Scandinavia. Citizens were told by their government leadership that such cuts were necessary and, to some extent, they trusted the messenger.

It’s less obvious that the United States can head down the same path, partly because many Americans are so cynical about policy makers. In many ways, this cynicism may be justified, but it is not always helpful, as it lowers trust and impedes useful social bargains.

Forces like the Tea Party movement argue for fiscal conservatism, though it isn’t obvious that they are creating the conditions for success.

The one thing I disagree with is his claim that this is counter-intuitive. The way to a sound fiscal policy is not putting angry, anti-government know-nothings in control of the government. Since they are not interested in governing but rather in destroying government, they will not be trusted by the vast majority of Americans who think government has a positive role to play.

The problem in the U.S. is that the opposition party, while claiming to want more efficiently managed government, really wants something different—a government that performs very few governmental functions. For conservatives, cutting costs is not about doing more with less; it is about doing less period. 

Cutting budgets for conservatives is a means to destroying government, not making it more efficient. Effective management is beside the point.

Although that will not encourage trust, it will encourage the robber barons who are poised to exploit the ensuing chaos.

book-section-book-cover2 Dwight Furrow is author of

Reviving the Left: The Need to Restore Liberal Values in America

For political commentary by Dwight Furrow visit: www.revivingliberalism.com

Who are the Tea Partiers? February 15, 2010

Posted by Dwight Furrow in Dwight Furrow's Posts, politics.
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The allegedly grass roots “tea party” movement has gotten lots of attention recently. Is it something new? A populist uprising against the establishment? A political force to be reckoned with?

It may be a political force but it is nothing new. A new CBS/Times poll does an in depth study of the movement. It is for the most part made up of conservative Republicans and conservative independents whose viewpoint is well to the right of most Americans; and it is a much smaller movement than the press has led us to believe.

18% of Americans identify themselves as Tea Party supporters; 55% say they know little about the movement. Since 62% view the GOP favorably and only 9% view the Democrats favorably, it is safe to say it is overwhelmingly made up of Republicans and a few independents. 80% have an unfavorable opinion of President Obama.

They are more likely than other Americans to oppose bank regulations, and less likely to blame the Bush Administration for budget deficits. Almost 50% believe, contrary to fact, that Obama has raised taxes.

They are, for the most part, conservative Republican voters, who have always been vocal and attracted lots of attention—but they now have a catchy new name.

book-section-book-cover2 Dwight Furrow is author of

Reviving the Left: The Need to Restore Liberal Values in America

For political commentary by Dwight Furrow visit: www.revivingliberalism.com

Tea Party Wrap Up April 16, 2009

Posted by Dwight Furrow in Current Events, Dwight Furrow's Posts, politics.
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It has been fun watching the teabaggers babbling incoherently  about the commiefascist slave-master Obama.

But let’s get back to the facts. From economist Robert Reich:

  • The tax rates in the U.S. are the lowest of all developed nations.
  • The wealthy are not overtaxed. They pay more taxes than the rest of us because they have vastly higher incomes. In the 1950’s the marginal tax rate for the highest incomes was 91%. Today it is about 38%. Over the past 30 years, the after-tax earnings of highest income brackets rose more than 150%; the after tax earnings of families in the middle rose about 10%.
  • Property, social security, and sales taxes take a far bigger bite out of lower income people than high income people.
  • Obama’s tax proposals will cut taxes for 95 percent of Americans, by about $400 per person a year. Only the top 2% will have a very modest tax increase.
  • Government debt need not cause taxes to dramatically rise in the future. What matters is not total debt but the ratio of government debt to GDP. Reducing debt requires returning to growth.

If the Obama Administration had done what the “teabaggers” apparently want him to do—no bailout, spending freeze, and tax cuts for the wealthy—we would have millions of additional unemployed Americans, more cutbacks in government services, a longer recession, and larger budget deficits.

So why are there tax protests?

The so called “tea parties” were not a grassroots movement. The main impetus behind these protests was provided by Fox News and an organization called FreedomWorks led by former House Majority leader Dick Armey.

Our corporate masters are now hard at work keeping low-information voters focused on the big, bad “guvmint” hoping we won’t notice that they laid a big, fat egg and blocking any reform that helps average citizens.

Apparently, it’s not working. People are relatively satisfied with their income tax level—about 48% believe the amount they pay is “just about right,” and 61% regard the amount of tax they pay as fair.

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