Europe was so organized socially and economically as to secure the maximum accumulation of capital. While there was some continuous improvement in the daily conditions of life of the mass of the population, Society was so framed as to throw a great part of the increased income into the control of the class least likely to consume it. The new rich of the nineteenth century were not brought up to large expenditures, and preferred the power which investment gave them to the pleasures of immediate consumption. In fact, it was precisely the inequality of the distribution of wealth which made possible those vast accumulations of fixed wealth and of capital improvements which distinguished that age from all others. Herein lay, in fact, the main justification of the Capitalist System. If the rich had spent their new wealth on their own enjoyments, the world would long ago have found such a régime intolerable. But like bees they saved and accumulated, not less to the advantage of the whole community because they themselves held narrower ends in prospect.
The immense accumulations of fixed capital which, to the great benefit of mankind, were built up during the half century before the war, could never have come about in a Society where wealth was divided equitably. The railways of the world, which that age built as a monument to posterity, were, not less than the Pyramids of Egypt, the work of labor which was not free to consume in immediate enjoyment the full equivalent of its efforts.
Thus this remarkable system depended for its growth on a double bluff or deception. On the one hand the laboring classes accepted from ignorance or powerlessness, or were compelled, persuaded, or cajoled by custom, convention, authority, and the well-established order of Society into accepting, a situation in which they could call their own very little of the cake that they and Nature and the capitalists were co-operating to produce. And on the other hand the capitalist classes were allowed to call the best part of the cake theirs and were theoretically free to consume it, on the tacit underlying condition that they consumed very little of it in practice. The duty of “saving” became nine-tenths of virtue and the growth of the cake the object of true religion. There grew round the non-consumption of the cake all those instincts of puritanism which in other ages has withdrawn itself from the world and has neglected the arts of production as well as those of enjoyment. And so the cake increased; but to what end was not clearly contemplated. Individuals would be exhorted not so much to abstain as to defer, and to cultivate the pleasures of security and anticipation. Saving was for old age or for your children; but this was only in theory,—the virtue of the cake was that it was never to be consumed, neither by you nor by your children after you.
“The Economic Consequences of the Peace.” J M Keynes
Sometimes Moral Courage Is the Catalyst
Here is what his administration and its allies have told the world, and the Libyan dictator, and the Libyan rebels, in recent days. The director of national intelligence declared before the Senate Armed Services Committee, in a chilling example of self-fulfilling prophecy, that “over the longer term Qaddafi will prevail.” The secretary of defense continued to insist that the imposition of a no-fly zone over Libya is too much for America to do, and to frighten the public with the warning that it would constitute a military operation, as if all military operations are like all other military operations, and therefore the prelude to the sort of wars that would require us, as he put it in an earlier outburst about Iraq and Afghanistan, to have our heads examined. ” Continue reading “Obama’s Libya Policy Isn’t a Muddle. It’s a Disgrace.”
Summers Abandons His Economic Views – Editorial, Wall Street Journal
Even when we disagree with Larry Summers, we’ve long thought of him as a better economist than politician. But after reading his nearby letter to the editor, we may have to reverse our judgment. The senior White House aide is abandoning his former economic views to serve the Democratic Party’s current political purposes.
Earlier this week, we quoted an essay by Mr. Summers published in 1999 in which he explained that unemployment insurance creates an incentive for workers to delay going back to work. The share of America’s jobless out of work for 27 weeks or more reached a new record of 44.1% in March, and Mr. Summers’s past writing offers one likely reason.
The paragraph we quoted followed a subhead, “What Causes Long-Term Unemployment?” Here is how the passage reads in more complete form:
“To fully understand unemployment, we must consider the causes of recorded long-term unemployment. Empirical evidence shows that two causes are welfare payments and unemployment insurance. These government assistance programs contribute to long-term unemployment in two ways.
“First, government assistance increases the measure of unemployment by prompting people who are not working to claim that they are looking for work even when they are not. The work-registration requirement for welfare recipients, for example, compels people who otherwise would not be considered part of the labor force to register as if they were a part of it. This requirement effectively increases the measure of unemployed in the labor force even though these people are better described as nonemployed—that is, not actively looking for work. . . .
“The second way government assistance programs contribute to long-term unemployment is by providing an incentive, and the means, not to work. Each unemployed person has a ‘reservation wage’—the minimum wage he or she insists on getting before accepting a job. Unemployment insurance and other social assistance programs increase that reservation wage, causing an unemployed person to remain unemployed longer.”
In his letter, Mr. Summers says we took his words out of context, but readers will note that he doesn’t deny that he linked jobless insurance with longer periods of joblessness. Mr. Summers skips over that point and instead resorts to that all-purpose economic explanation known as “aggregate demand.” In 2010 as opposed to 1999, the harmful incentive effects of extending jobless payments to an unprecedented 99 weeks don’t matter. He says the point now is to stimulate the economy by increasing consumer “demand.”
This is worth parsing because it gets to the heart of what’s wrong with Obamanomics. The Summers argument is that increasing unemployment insurance increases aggregate demand and thus reduces unemployment. This is because he and the neo-Keynesians believe that the impact on macroeconomic demand of this jobless spending outweighs the microeconomic harm on individual incentives.
In other words, if government pays people for not working, then more people will work. Subsidize unemployment and you will somehow get less of it. But if this were true, we could lower unemployment even more if we increased jobless benefits to $100,000 a year per person to cause an even greater surge in demand.
Sic transit America?
 |
| Flagging: a US sailor stands on the flight deck of the aircraft carrier USS George Washington |
If a week is a long time in politics, a decade is starting to look like an age in geopolitics. Comparing the America that began the 21st century with the America of today is to witness a country that has in some ways quite radically altered its view of itself and its relationship to the world.
In short, the metallic rust of decline has crept into the American soul. “You could argue that the first decade of the 21st century was the last decade of the American century,” says David Rothkopf, a former Clinton administration official and student of US foreign policy. “We are now entering the multipolar century.”
Self-doubt tarnishes Brand America
Staffers on Capitol Hill were calling it the Louisiana Purchase.
On the eve of Saturday’s showdown in the Senate over health-care reform, Democratic leaders still hadn’t secured the support of Sen. Mary Landrieu (D-La.), one of the 60 votes needed to keep the legislation alive. The wavering lawmaker was offered a sweetener: at least $100 million in extra federal money for her home state.
And so it came to pass that Landrieu walked onto the Senate floor midafternoon Saturday to announce her aye vote — and to trumpet the financial “fix” she had arranged for Louisiana. “I am not going to be defensive,” she declared. “And it’s not a $100 million fix. It’s a $300 million fix.”
It was an awkward moment (not least because her figure is 20 times the original Louisiana Purchase price). But it was fairly representative of a Senate debate that seems to be scripted in the Southern Gothic style. The plot was gripping — the bill survived Saturday’s procedural test without a single vote to spare — and it brought out the rank partisanship, the self-absorption and all the other pathologies of modern politics. If that wasn’t enough of a Tennessee Williams story line, the debate even had, playing the lead role, a Southerner named Blanche with a flair for the dramatic.
After Landrieu threw in her support (she asserted that the extra Medicaid funds were “not the reason” for her vote), the lone holdout in the 60-member Democratic caucus was Sen. Blanche Lincoln of Arkansas. Like other Democratic moderates who knew a single vote could kill the bill, she took a streetcar named Opportunism, transferred to one called Wavering and made off with concessions of her own. Indeed, the all-Saturday debate, which ended with an 8 p.m. vote, occurred only because Democratic leaders had yielded to her request for more time.
Even when she finally announced her support, at 2:30 in the afternoon, Lincoln made clear that she still planned to hold out for many more concessions in the debate that will consume the next month. “My decision to vote on the motion to proceed is not my last, nor only, chance to have an impact on health-care reform,” she announced.
Landrieu and Lincoln got the attention because they were the last to decide, but the Senate really has 100 Blanche DuBoises, a full house of characters inclined toward the narcissistic. The health-care debate was worse than most. With all 40 Republicans in lockstep opposition, all 60 members of the Democratic caucus had to vote yes — and that gave each one an opportunity to extract concessions from Senate Majority Leader Harry M. Reid.
Sen. Ron Wyden (D-Ore.) won a promise from Reid to support his plan to expand eligibility for health insurance. Sen. Ben Nelson (D-Neb.) got Reid to jettison a provision stripping health insurers of their antitrust exemption. Landrieu got the concessions for her money. And Lincoln won an extended, 72-hour period to study legislation.
And the big shakedown is yet to occur: That will happen when Reid comes back to his caucus in a few weeks to round up 60 votes for the final passage of the health bill.
Republicans also knew that a single defection would kill the bill, so they tried to pressure the holdouts. “That’s what we’ve got to choose today: Do we choose life or do we choose death?” declared Sen. Sam Brownback (R-Kan.). “We just need one vote, one vote on the other side.”
But Landrieu had already made up her mind. She went to the floor during the lunch hour to say that she would vote to proceed with the debate — but that she’d be looking for much bigger concessions before she gives her blessing to a final version of the bill.
“My vote today,” she said in a soft Southern accent that masked the hard politics at play, “should in no way be construed by the supporters of this current framework as an indication of how I might vote as this debate comes to an end.” Among the concessions she’ll seek: more tax credits for small business and a removal of the version of the “public option” now in the bill.
That turned all the attention to the usually quiet Lincoln, who emerged from the cloakroom two hours later to announce her decision. Her attire was school-principal prim — blue suit with knee-length skirt, orange silk scarf tied tightly at the neck — and she was clearly uncomfortable in the spotlight. She spoke with the diction of somebody giving a dramatic reading, and she stumbled more than once as she read, botching the crucial line: “I will vote to support, of, the, the, will vote in support of cloture on the motion to proceed to this bill.”
She argued, a bit too strenuously, that “I’m not thinking about my reelection” in 2010. All the same, she made clear that Democratic leaders would have to give more if they want her to vote yes as the health-care debate continues. Specifically, she demanded removal of the public option. “I am opposed to a new government-administered health-care plan,” she warned, further cautioning that “I will not vote in favor of the proposal . . . as it is written.”
By the time this thing is done, the millions for Louisiana will look like a bargain.
http://www.washingtonpost.com/wp-dyn/content/article/2009/11/21/AR2009112102272_pf.html
P.J. O’Rourke’s 1992 book, “Parliament of Whores,” is rightly hailed as a brilliant and hilarious expose of the essence of modern Washington. Filled with lines like “Giving power and money to the government is like giving whiskey and car keys to teenage boys,” the book entertains as it instructs.
But its title is not quite accurate. Real whores, after all, personally supply the services their customers seek. Prostitutes do not steal; their customers pay them voluntarily. And their customers pay only with money belonging to these customers.
In contrast, members of Congress routinely truck and barter with other people’s property.
A better title for O’Rourke’s book would have been “Parliament of Pimps.”
Members of Congress are less like whores than they are like pimps for persons unwillingly conscripted to perform unpleasant services.
Consider, for example, agricultural subsidies. Each year a handful of farmers and agribusinesses receive billions of taxpayer dollars. These are dollars that government forcibly takes from the pockets of taxpayers and then transfers to farmers.
The customers, in this case, are the farmers and agribusinesses. The suppliers of the services performed for these customers are taxpayers, for it’s the taxpayers who possess the ultimate asset — money — that farmers and agribusinesses lust after. And the intermediaries who oblige the suppliers to satisfy the base lusts of the customers are politicians. Just as pimps facilitate their customers’ access to prostitutes’ assets, politicians facilitate their customers’ access to taxpayers’ assets.
We taxpayers have less say in the matter than we like to think. Sure, we can vote. But if even just 50.00001 percent of voters cast their ballots for the candidate proposing higher taxes, the assets of not only our pro-tax citizens, but also those of the remaining 49.00009 percent of us anti-tax citizens are put at the disposal of our pimps’ customers. (And note that many of those who vote for higher taxes are not among those persons actually subject to higher taxation.)
If enough members of Congress decide to further their political fortunes by giving more money to farmers, or to corporations pushing “green” technologies, or to nearly bankrupt banks, or to whomever, the money given doesn’t come from the personal assets of these politicians.
Instead, politicians force taxpayers to pony it up — just as the services rendered for a pimp’s customers are rendered not by that pimp personally, but by the ladies under his charge. The pimp pockets the bulk of each payment; he’s pleased with the transaction. His customer gets serviced well in return; he’s pleased with the transaction. The only loser is the prostitute forced to share her precious assets with strangers whom she doesn’t particularly care for and who care nothing for her.
Also like the ladies under pimps’ power, taxpayers who resist being exploited risk serious consequences to their persons and pocketbooks. Uncle Sam doesn’t treat kindly taxpayers who try to avoid the obligations that he assigns to them. Government is a great deal more powerful, and often nastier, than is the typical taxpayer. Practically speaking, the taxpayer has little choice but to perform as government demands.
So to call politicians “whores” is to unduly insult women who either choose or who are forced into the profession of prostitution. These women aggress against no one; like all other respectable human beings, they do their best to get by as well as they can without violating other people’s rights.
The real villains in the prostitution arena are those pimps who coerce women into satisfying the lusts of strangers. Such pimps pocket most of the gains earned by the toil and risks involuntarily imposed upon the prostitutes they control. No one thinks this arrangement is fair or justified. No one gives pimps the title of “Honorable.” Decent people don’t care what pimps think or suppose that pimps have any special insights into what is good or bad for the women under their command. Decent people don’t pretend that pimps act chiefly for the benefit of their prostitutes. Decent people believe that pimps should be in prison.
Yet Americans continue to imagine that the typical representative or senator is an upstanding citizen, a human being worthy of being feted and listened to as if he or she possesses some unusually high moral or intellectual stature.
It’s closer to the truth to see politicians as pimps who force ordinary men and women to pony up freedoms and assets for the benefit of clients we call “special-interest groups.”
Donald J. Boudreaux’s column points out
“Of Rats and Sinking Ships”
Larry Summers is reportedly leaving later this year, and Andrew Cockburn reports that Rahm Emanuel, Obama’s acutely verbal Chief of Staff is said to be looking for other employment, preferably a high paying job on Wall Street with little work and enormous perks and privileges.
This is the sort of thing that one would expect to be happening at the end of the first term of a President, five years into the job. Perhaps that event is being moved up because Obama is likely to be a one term president, in one of the most spectacular flame outs from high, and in retrospect misplaced, expectations since the Segway.
Obama was clearly the wrong man for the job. He might have been the kind of reformer for the good times, when you really do not need him, dedicated to getting the various squabbling parties to hold hands and sing Kumbaya. Unfortunately, a crisis demands leadership, and Obama is all fluff in that department. Leaders lead, they do not hold other people up as the leaders, and take them to task for their failure to do the risky things when their leader hides behind a non-existent consensus. I hate to say this, but both Clinton and W were far superior leaders, unfortunately with deeply flawed visions and moral compasses.
The Democrats are most likely looking at a November massacre in the election, unless some event occurs to pull the nation together such as an externally focused crisis.
The problem of course is that if one looks at the alternatives, there are none too attractive in the Republican Party which is also deeply tarnished with the financial corruption that actually came to full flower under their stewardship with George W. And part of the reason that legislation for reform languishes is that the Republicans are openly in the camp of the corporatocracy, and obstructing any nascent reform attempts from a small core of independent minded legislators.
Is it time for a Third Party as some have suggested? Maybe, although it seems more likely to me that it will take a much greater degree of pain and collapse for America to wake up and reform its system, from the Media to Washington to Wall Street. Splinter parties at the extremes appear probable in the short term.
And then who knows what might be slouching towards Pennsylvania Avenue, its moment come round at last?
http://jessescrossroadscafe.blogspot.com/2010/04/failed-presidency-and-country-adrift.html