Saturday, January 16, 2010

What Ails Us

I began reading Chris Hayes’ latest rumi-Nation like a fan, cheering him on. Talking about the last national election, Hayes wrote:

If the working hypothesis that bound this unwieldy coalition together--independents, most liberals and the Washington establishment--was that the nation's troubles were chiefly caused by the occupants of the White House, then this past year has served as a kind of natural experiment. We changed the independent variable (the party and people in power) and can observe the results. It is hard, I think, to come to any conclusion but that the former hypothesis was insufficient.

Yes, I thought. He is hot on the trail.

But then he seemed to get distracted. I agree with his diagnosis, that America suffers from a gross imbalance of power, but between whom? He would put “the people” on one side, I suppose, but this vague label always conceals as much as it explains—which people? On the other side we have total darkness: he doesn’t say who the other side is, other than it’s the force that makes us bargain over crumbs in policy arenas like health care.

Power is indeed a big part of the story. I would emphasize two specifics: (1) America has virtually lost the voice of organized labor. Show me any industrialized country that gives progressive politics even a remote shot and doesn’t have substantial union representation of the workforce. (2) We face the political consequence of almost two generations of exploding income inequality. The ones who have prospered in this ruthless world are relatively numerous (perhaps 20% of the population, even more of the electorate), conscious of their class interest, and willing and able to pony up for the cause. Yes, I know the lion’s share of growth has gone to the sliver at the very top, but the broad upper-middle is more interested in protecting what it’s got than pining after the super-rich.

But there are other elements that belong in the picture.

A big one is the devolution of the Republic Party. It is difficult to find words to express this. I have never, not even when I was a young kid, had any affection for this outfit, but in retrospect I have to admit that, once upon a time, they were conscientious in support of the values of their constituency. In office, they would hire experts (more conservative ones, but not always) to provide reasonably informative reports and forecasts. They often found themselves on the yea-side of important, progressive legislation, such as the wave of environmental and consumer initiatives of the late 1960s and early ‘70s. They were worth arguing with.

I can’t remember how many years it’s been since I paid any attention to the intellectual content (if that’s the right term) of Republican discourse. At least since Gingrich, it's been fools-or-knaves all the way. But our political system is set up to lock in place a two-party governance structure, and if one party goes bonkers, the machinery simply breaks down.

An overarching problem has been the rise of the finance view of the world as the ruling perspective in the US and those regions under its influence. This is partly about the power of individual people and institutions, essentially the massive private funds that dominate the resources of government in speculative markets—at least during profitable times. In that sense, it helps nail down the specific identity of “them” in Hayes’ us-against-them power imbalance story.

More broadly, however, there are ideological and social dimensions to financialism that have to be taken into account. In the realm of ideas, this perspective sees the financial “moment”, the decision to invest or trade, as the crucial link in the chain of wealth creation, denigrating such mundane activities as doing physical work or managing the day-to-day complexity of production systems. It justifies a system of corporate governance and personal rewards that would otherwise be indefensible. The ideology has a mass base because (and here we see again the consequences of inflated inequality) that same 20% or so has acquired a consequential financial stake and has come to see itself in those terms. That’s what the ticker at the bottom of your TV or computer screen is telling you when you tune into the news.

As I’ve written elsewhere, this elevation of financial interests—the claim that all of us are best off if investors are able to reap the highest return possible—is the deep force behind both global imbalances and the financial crisis. That must be worth something.

And then there is simply the never-ending sequence of historical moments, the context that makes our situation unique and not just a deduction from some generic model. Throw in the fallout from the debt crisis of 1982, the collapse of Communism in 1989, the continuing standoff between Israelis and Palestinians and its impact on the Islamic world, the about-face in Chinese (and to a lesser extent Indian) economic policy, the information and communications revolution, and we can begin to fill in the details.

If this list is even remotely correct, the vague, we-are-the-world democratic euphoria provoked by the Obama campaign and recalled, nostalgically by Hayes, was impotent from the outset. (The ideology of bipartisanship also missed the point.)

But Hayes is right in the end: Bush, for all his horrors, was not the root problem, and the election of Obama is hardly the solution. If we want to try to turn this thing around by design and not just depend on dumb luck, we need to identify the deeper issues and focus our energies on them.


Bruce Webb said...

People have internalized Reaganism. And I think Digby captured this in three letters/words: nobody who want to be taken seriously wants to be thought of us just another DFH.

Reagan as Governor basically defined himself as the anti-hippy in both form and action, everything they were for he was against, and though the outer trappings of hippie-dom, the hair, the clothes, the music spread across the western world, it didn't bring along with it the progressive component that fueled a much of the politics of the sixties.

When Reagan became President this was replicated on a larger scale as Boomers and particularly ex-hippie Boomers were slotted into the category of Other. Although a look at the calender and some counting on your fingers show that Boomers were not in fact in charge of much politically or economically in the 60s to 80s we were a convenient whipping boy on which to pin all of the preceived sins of the tax and spend liberals from whom Reaganism saved us.

And thus started the long march towards the Washington Consensus as ideologues were able to convince well meaning centrists that there was no difference between regulation and central command and control, that markets were in all cases a better solution than government and the only people who thought different were DF socialist Hs.

I didn't watch Family Ties, I was too busy with college and then grad school but there is a whole generation of Americans whose only understanding of the sixties and seventies is some footage from Woodstock, the depiction of the Alex Keaten characters parents, and the Seventies show. Oh and that old guy who is still a stoner at 65.

I am serious about this back when Ezra K was still a kid blogger he explained his initial resistance to the anti-war movement by saying that the only people he saw in the movement were the old hippies in his Santa Cruz college town, that was enough for him. Which was enough to make me start watching out for confirming examples.

We are all Reagan. And everything that ever went wrong started with Johnson. That most of this is actually a deliberate ideological campaign whose origins were a push back to policies put forth by the two Presidents Roosevelt is literally ancient history to these people, and they have simply coalesed around three notions: the Great Society was a dismal failure, Democrats lost Vietnam, Reagan won the Cold War.

And Bruce Webb, who claims different is by that alone proved to be a DFH to be thrown on the ash heap of history. Because Alex Keaton won the battle for hearts and minds.

r l love said...


I have been making, in a less urbane way, a similar argument to the one you have posted here.

Typically, with little improvements added with each telling, I begin by establishing that the "investment-class" was 2% of the population in 1929. Then by the 1980s,25%; and by the 2000s, 50%. The reaction to this trend though varies greatly according to the readership. Those from the uninformed-Left tend to assume I am leading them toward some sort of trap, and their responses tend to suggest that they read no farther. So, the last couple of times that I've taken my theory out for a test read I included some signaling along with the stats.

I have been trying to write fiction for a long time, and, I often focus too much on craft, and too little on content. Although, commenting on the blogs puts a high premium on the opposite focus so I am learning fast.

Your post, leads to what I call a "democratic tyranny". The dynamics though are so complex that I have struggled with trying to explain them. It seems obvious though that the balance of power is concentrating as the two parties shift as dictated by data. But unlike past tyrannies, the super-wealthy are being marginalized. A very large coalition with common economic interests, and common beliefs based on intentional ignorance, could well be the most dangerous leadership - ever.

excellent article. ray l love

gordon said...

I think this is going in an important direction. The "investment class", which is now much bigger than it has ever been (as Peter Dorman and Ray note), are still not in control of markets in any meaningful sense, and they know it. A key feature of the financialist "them" that Peter Dorman refers to is therefore their ability to ruin more people than ever before by purely financial means, and to do it very quickly. There is a real threat involved in the ability to crash markets in which so many people are invested.

And I think Bruce Webb has put his hand on another important thread, too. A lot of post-Reagan right-wingery has been just revenge, fuelled by the fear that the 1960s/1970s antiwar, antiracism, antiestablishment movements nearly succeeded. They never want to see that again. So the non-rich must be made vulnerable, insecure, fearful. And the music must be awful, too!

Jazzbumpa said...

I agree that Bush is not the heart of the problem. But he serves as a great symbol. My reaction, when he got put forward as a candidate for President in 1999 was that democracy had failed. Here was an intellectually bankrupt son of privilege, who was an abject failure at everything from the oil biz to sports, but really good at executions.

If this is what a major political party offers us, then the system is broken beyond repair. And the even more odious Sarah Palin looms on the horizon.

The deeper issue is that corporations own both parties, and the political power or real people is nil.

And I'd sure like to see Ray explain why he thinks the super rich are being marginalized.


r l love said...

The Keynesian concept of investors relying on workers as consumers seems to me the most important lesson of the Great Depression. In 1929, before the crash, 71% of the population was living in poverty. Workers could not afford the products they produced; and so, beginning in 1921, as wages and consumption went down, poverty went up. This seems a very simple concept, but we still find the political importance of this inter-dependency hard to keep sight of.
However, the demographic dividend of global economics dictates that labor values must remain stagnant in the developed economies. It could be, and often is, argued that wealth redistribution could close the gap between the rich and the poor although without the aforementioned inter-dependence the government lacks the necessary moral mandate to support collective bargaining in any significant way. The plain truth is that labor values in the wealthy nations will come under increasing pressure as the developing nations expand their labor forces, a sad but inescapable dynamic. The Keynesian inter-dependency though may turn out to be as important politically, as it once was economically.
Politically, the Keynesian inter-dependency acted as a counterweight that maintained a balance between the working-class and the investment- class. But as suggested above, this balance only lasts so long as the government supports the collective bargaining efforts of Labor. But in a democracy the government’s moral mandate is to support the best interests of the majority. So as the investment-class increased numerically, not in wealth, but in terms of votes, the government systematically accommodated the constituency. Naturally, other factors such as splits in the working-class and political party maneuvers must be factored in. But, what is commonly misconstrued as a dysfunctional democratic system is instead systemically functional to a degree that brings machines to mind. And that functionality is currently being expressed through an imbalance of power that is defended by its own democratic existence.
And Monroe was worried about populists with single-shot rifles and pitchforks!
ray l love

r l love said...


Nearly the entire population agrees that the super-rich are taking to big a share.

Also the dems are showing their loyalty to investors and corporations as in the health-care legislation. But investors are vastly superior numerically to the super-rich. And foreign wealth flows drying up is adding to the downward pressure along with continued downward domestic pressure. The investment-class will decide who will pay down the deficit and that will be the super-rich.

The working-class will have the choice of giving up what little disposable income they have to pay for health insurance, or removing themselves from the participation rate. The participation rate will edge downward as crime rates rise.

The dems should keep the WH for a long while but they will continue to move to the right. Congress is too tough to call. Repubs are so confused that a third party could begin to emerge, it happens.

This might just all be BS and I never rule out the chance for social turmoil. Things are a mess.

The UBS/Swiss banking scandal has also made it risky for the super-rich to hide their money. This could be a factor by limiting their choices. The Swiss are a snag for Globalization. (Sneaky dictators are even less popular than the super-rich,the elimination of safe, safe-haven banking would be huge)

Mitchell J. Freedman said...

Let's not blame the "people" for anything other than inertia at the spectacle of the two political parties being beholden to corporate money.

The system is based upon money and corporate owned media. The politicians are bought by that money and pushed into boxes by that media. Those who are outside that box, like Grayson, Weiner, Nader, Perot etc., are derided by that media, which is something vain people who run for office usually don't have the stomach for.

I thought there would be enough sense in the Obama executive office to do an FDR in the face of the greatest economic crisis the nation has faced since the Great Depression. The system of corporate priorities prevailed and Obama has acted more like Hoover as far as regular folks are concerned. With low information voters, this has turned the Dems into any number of boogeymen (fascists, socialists, nazis and communists), though knowledgeable voters are simply frustrated and sometimes disgusted at the Dems' capitulation to corporate, particularly financiers' interests.

That we are debating an excise tax on generous health insurance instead a surtax on millionaires, or a robust public option, is a symptom of the problem described above. I voted for Nader in 1996 and 2000. I am recalling why I did that, but recalling what happened when the Republicans took over, too...Frustrating, very frustrating.

Martin Langeland said...

This expanding investment class: do they provide capital to the economy? Or are they just punters in the financiers casino?
Buying a share form any source other than a corporate treasury is valueless to the corporation.
The current power struggle is the same as usual. There are a few who claim to own the work of many others. The many others accept this for various reasons good or ill. After that we are re-arranging deck chairs.

Sandwichman said...

"America has virtually lost the voice of organized labor."

This could use some fleshing out. What would labor be saying if it had a voice? What was labor saying when it had a voice? What does labor say in countries where it has a voice? What were the circumstances under which labor's voice was 1. suppressed and 2. surrendered?

The standard story with regard to the above questions mention Taft-Hartley and the labor McCarthyism. But bad Taft-Hartley followed precedents set by good Wagner Act. The NLRA was an ambiguous victory for labor -- a double-edged sword that cut both ways. See James Gray Pope, "How American Workers Lost the Right to Strike, and Other Tales."

"To Andrew Furuseth, the labor movement’s leading constitutional thinker, the bill exemplified the 'Christian principle of evolution from slavery to freedom,' which
belonged under the thirteenth amendment, not the commerce clause. Philosophically, Senator Wagner took a similar view of his bill..."

"Constitutionally, however, Senator Wagner adhered to the commerce power, apparently in the belief that it was more acceptable to middle class reformers and judges. As a result, each exercise of the NLRB’s authority had to be justified not in terms of labor freedom, but as an effort to prevent disruptions to commerce. During the early, formative period of NLRA jurisprudence, this constitutional requirement exerted a strong influence. Even the Board’s own lawyers defended the Act as an exercise of Congress’ power to 'control' and 'punish' strikes."

TheTrucker said...

"I know no safe depository of the ultimate powers of society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education." - Thomas Jefferson

But we have a problem in America. We have a citizenry too easily sold a bottle of snake oil as a cure for what ails us. So we must teach classical economics and civics in the high schools while empowering the people to do what is in their own best interests.

My inclinations are:

1. The nuclear option

2. Dramatically increase the membership of the House of Representatives

3. Repeal the 17th amendment.

What these suggestions are about is bringing the legislators closer to the people they are supposed to represent and moving them logically further away from the lobby and the party apparatus.

I see the constant lollipop of the left in "Campaign Finance Reform" as the mirror reflection of "Family Values" or "Support the Troops". Who could be against any of those things? All the specifics exist in the ears that hear and not in the tongue that speaks.

The Supremes will not allow any meaningful campaign finance reforms at the national level. So the selection process determining who sits in the seats of power must be altered in such a way as to make money less powerful and communal relationships much more powerful.

r l love said...


The depth of your understanding is refreshing.
Jefferson had it right:"I know no safe depository of the ultimate powers of society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education." - Thomas Jefferson
What he did not foresee was the divisive role that racism would ultimately play. Not to suggest that education is not the best solution to racism, which is of course a type of ignorance, but instead to say that the balance of power between the rich and the poor has come to rely on a racial split among the working-class.
What you said about the futility of campaign reform I would extend to include a reform of corporate "person-hood"; these reforms would do little to balance power so long as the working-class remains divided on issues regarding their economic interests.
The original framework was designed for a society which required a much different demographic balance than what exists now. And as you suggested with the info you provided, Madison's protections against populism left us an imbalance of representation. But of course the Founding Fathers were concerned with finding an efficient balance between a small, educated, ruling elite, and the masses; and now corporations have the protected power status that the Fathers intended for themselves. But the Fathers did not have investors with economic interests aligned with their own. And it is too late to weaken that alliance by eliminating corporate person-hood status.
The central problem is the threat that education poses to the ruling elite. But the ruling elite is no longer a small voting block. It is the investment-class and this group has the largest concentration of aligned economic interests. So a subtle but deeply influential incentive obstacle exists. Teachers with 401(k)s for example, who teach values which promote solidarity among the working-class, are acting contrary to their economic interests. They may not know this, but it is the totality of these influences that are what shape our culture. This process does in fact rely on its invisibility because teachers would not comply otherwise and very probably they would push in the opposite direction, intellectually. As would the media and perhaps most everyone, including many of those who are currently benefiting from investing, if they could understand that their ignorance only benefits a small percentage of the US population and only a tiny percentage of humankind.
The solution, once it is accepted that a labor movement in the US is futile, (for the reasons I explained in an earlier comment), is to educate our educators about their role in the maintenance of our corportocracy. Explaining the dynamics though is no easy thing and as Upton Sinclair so deftly said:"It is difficult to get a man to understand what his livelihood depends on his not understanding." Then too there is a pride factor.
ray l love

Suffern AC said...

That "Broad Upper Middle" is probably where I would start to conduct the analysis. That is the class that tends to do lots of things that drive institutional change (for better or worse), then erases itself from analysis and jumps back into the masses or the people. It has a very wide variety of interests and positions, and it would seem to be that it is the class that is most divided currently.

Before we go and blame to much on the failures of the republican party, please remember that for a progressive politics to build a durable coalition, progressives might need to review how they themselves have changed and what they might have done themselves to undermine labor.

I agree that "financialization" might be a good process to review. But since the process is longer, I might want to look at the "bureacratization" process. As a Broad Upper Middle class person myself, I will be honest. I have met very few fellow BUMs who like bureaucrats or technocrats, either on the left or the right. I work for an accounting would think that of all places, we would make sacrifices to altars in honor of esteemed bureaucrats.

The old capital "P" Progressives were very much into building bureacratic structures. They also created civil service unionions to deal with what they felt was the corrupt influence of polticial machinery. They also tended want to deal with labor that was organized in a similar fashion. Would contemporary progressives do the same?

As a private sector BUM, I have recieved a lot of corporate training about unlocking my creativity and becoming more like an "entrepreneur." I also will note that I have received none that would lead me to believe that management wants me to be more like a financier.

Back in the mid 1990s, about the last time reform failed, there was a lot of soul searching done then as well. Habermas seemed to offer a fairly good framework for organizing these kinds of master processes so that someone could think about what was going on in the world, as did Bourdieu. I don't think that much has changed, which is part of the problem.

Myrtle Blackwood said...

Suffern AC: "progressives might need to review how they themselves have changed and what they might have done themselves to undermine labor... "

'Labor' by definition is an undermined populace. It's a body of people acting as an input commodity for business.

People have undermined themselves. At all levels of society. Ordinary households are comprised of individuals engaged in some form/degree of mindless consumption. Often of quite superfluous and easily-avoidable products (for example the purchase of the super-soft toilet paper derived from the woodchipping of old-growth rainforests).

Millions of households believe they are doing the right thing by donating to groups labelled 'green'. Whilst these same bodies have actively promoted vast industrial chemically-dependent tree plantations in the southern hemisphere (in particular).

How many persons trot off to a place of employment each day because they can't think of what to do with their spare time at home?

How many decades of indoctrination got us to this end point?