economics

Havel the Dissident: A Legacy Worth Claiming

Richard Eskow — Mon, 19 Dec 2011 11:55:53 -0500

On a warm evening in 1991, a colleague and I found an out-of-the-way café in the old part of Prague. Two men with blank expressions stood outside. The interior was dim and close, with room for only eight or nine tables. The place was almost empty. Just a sleepy waitress, a bartender polishing glasses, and a single patron who sat alone drinking wine and chain-smoking cigarettes.

The President of Czechoslovakia wasn’t reviewing official papers. He was reading a book, a startlingly un-Presidential act to our American eyes. My companion, a neoconservative State Department official, already admired him for defying and defeating a Communist state. He'd impressed me by bringing a writer’s sensibility and an affinity for true underground culture to his role as head of state.

Havel even tried to appoint Frank Zappa as his Minister of Culture. “We’re not rock musicians,” Zappa told a reporter back in the sixties. “We’re electronic social workers.” The State Department wouldn't let Zappa assume the post, but Havel had made his point to the Czech public by offering this apparatchik's position to the composer of songs like “What’s the Ugliest Part of Your Body?” (“Some say your nose, some say your toes, but I think it’s your mind.”)

We never spoke to Havel that night. It didn't seem polite to offer anything more than the curt nod of acknowledgement any café patron gives another at that hour. But Havel spoke to us, to all of us. And on the occasion of his death, the real lessons of his life's work are in danger of being lost.

Today we’re told that the Occupy movement is too idealistic, too naïve. Naïve? Try Havel’s words if you want naïve: "May truth and love triumph over lies and hatred.”

Think of that as the Velvet Revolution’s “one demand.”

Portrait of the President as a Young Freak

As millions of people know, the underground playwright Havel first made his political mark in Charter 77. That group was formed to defend the Plastic People of the Universe, a banned and imprisoned rock band working in the Zappa mold of musical dissonance and cultural dissidence.

The Occupy movement is not on the cultural fringe, despite what its detractors say. But Havel’s movement began as a Yippie-like creature of the underworld. Charter 77 rarely had more than a thousand members. It was a strange blend of political idealism and the hippie subculture where people proudly labeled themselves “freaks” to the conventional world. Despite its later alignment with economically conservative forces, it was more Allen Ginsburg than Alan Greenspan.

And it was created to defend the Plastic People of the Universe, whose grating music makes Occupy’s drum circles seem like a children’s choir serenading the bored residents of a home for aging veterans.

Words

Liberté, Egalité, Fraternité - what wonderful words! And how terrifying their meaning can be! Freedom in the shirt unbuttoned before execution. Equality in the constant speed of the guillotine's fall on different necks. Fraternity in some dubious paradise ...

Havel addressed the liberal democratic West on words in the 1970s, noting that the suppression of speech can give language enormous power:

I … live in a country where a writers' congress speech is capable of shaking the system ... a manifesto served as one of the pretexts for the invasion of our country one night by five foreign armies … a system in which words are capable of shaking the entire structure of government, where words can prove mightier than ten military divisions.

When a system has become inflexible and is in danger of collapsing, what it fears most is words. Think about that the next time you see a phalanx of cops tear down a tent city on television.

Havel had been burned by language, too:

The same word can at one moment radiate great hope, at another it can emit lethal rays … true at one moment and false the next, at one moment illuminating, at another, deceptive. On one occasion it can open up glorious horizons, on another, it can lay down the tracks to an entire archipelago of concentration camps.

And as we approach an election year that will be filled with the rhetoric of freedom, this observation still resonates:

The same word can at one time be the cornerstone of peace, while at another time machine-gun fire resounds in its every syllable.

Control

In 1975 Havel had the presumption to write directly to Czechoslovakian head of state Gustáv Husák with a few suggestions. There’s more than a passing resemblance between the fear-driven Communist society Havel condemned in that letter and the financial anxiety many Americans endure today:

The technique of existential pressure is ... universal. There is no one in our country who is not, in a broad sense, existentially vulnerable. Everyone has something to lose and so everyone has reason to be afraid. The range of things one can lose is broad, extending from the manifold privileges of the ruling caste... down to the mere possibility of living in that limited degree of legal certainty available to other citizens.

Today, one out of two Americans lives in financial insecurity. Even many upper-middle-class citizens live from month to month, just one layoff notice away from medical bankruptcy or home foreclosure.

“Everyone has something to lose,” observed Havel.

Havel's description of his 20th Century Communist society echoes our own:

The more completely one abandons any hope of general reform, any interest in suprapersonal goals and values, or any chance of exercising influence in an ‘outward’ direction, the more one’s energy is diverted in the direction of least resistance, that is, ‘inwards.’”

People today are preoccupied far more with themselves ... They fill their homes with all kinds of appliances and pretty things, they try to improve their accommodations, they try to make life pleasant for themselves, building cottages, looking after their cars, taking more interest in food and clothing and domestic comfort ...They turn their main attention to the material aspects of their private lives.

Havel concluded that "Despair leads to apathy, apathy to conformity, and conformity to routine (political) performance - which is then quoted as evidence of 'mass political involvement.'"

Ambition

Havel understood the psychology of greed and power, too. From his letter to Husák:

If it is fear which lies behind people's defensive attempts to preserve what they have, it becomes increasingly apparent that the chief impulses for their aggressive efforts to win what they do not yet possess are selfishness and careerism.

It is not surprising that so many public and influential positions are occupied more than ever before by notorious careerists, opportunists, charlatans, and men of dubious record.

From Prague to Washington, from Moscow to lower Manhattan, the opportunities change. But human nature never does:

Seldom in recent times has a social system offered scope so openly and so brazenly to people willing to support anything as long as it brings them some advantage; to unprincipled and spineless men, prepared to do anything in their craving for power and personal gain; to born lackeys, ready for any humiliation and willing at all times to sacrifice their neighbors' and their own honor for a chance to ingratiate themselves with those in power.

Technocracy

It’s a historical irony that those who claim they’ll govern with the most efficiency usually wind up governing with the least effectiveness. Today corporate-funded politicians from both parties argue that the country should be led by “technocrats’ who’ll govern without messy “ideologies.”

That’s a false premise Havel knew well. He called it the “process by which power becomes anonymous and depersonalized, reduced to a mere technology of rule and manipulation."

Washington's technocratic “bipartisans” dream of a world where, in Havel’s words, the "professional ruler is (seen as) the ‘innocent’ tool of an ‘innocent’ anonymous power … legitimized by science, cybernetics, ideology, law, abstraction, and objectivity - that is, by everything except personal responsibility to human beings as persons and neighbors." Havel's Prague is our Beltway:

States grow ever more machinelike; people are transformed into statistical choruses of voters, producers, consumers, patients, tourists, or soldiers, (where) in politics good and evil, categories of the natural world and therefore obsolete remnants of the past, lose all absolute meaning (and where) the sole method of politics is quantifiable success.

Havel condemned a system of state-orchestrated political theater, and the self-perpetuating failures of imagination which mistook the indifferent and pro forma participation of its citizens for genuine democracy. And he saw its universal nature:

(It) has a thousand masks, variants, and expressions. Essentially, though, it is the same universal trend … the essential trait of all modern civilization, growing directly from its spiritual structure, rooted in it by a thousand tangled tendrils and inseparable even in thought from its technological nature, its mass characteristics, and its consumer orientation.

“The contemporary concept of 'normal' behavior is,” Havel wrote, “deeply pessimistic."

Responsibility

“I favor ‘antipolitical politics,’" said Havel, "politics not as the technology of power and manipulation, of cybernetic rule over humans or as the art of the utilitarian, but politics as one of the ways of seeking and achieving meaningful lives, of protecting them and serving them."

I favor politics as practical morality, as service to the truth, as essentially human and humanly measured care for our fellow humans.

None of us—as an individual—can save the world as a whole, but . . . each of us must behave as though it were in his power to do so.

Decades later he said this to the leaders of Western countries:

Today, more than ever before in the history of mankind, everything is interrelated … Because of this, the future of the United States or the European Union is being decided in suffering Sarajevo or Mostar, in the plundered Brazilian rain forests, in the wretched poverty of Bangladesh or Somalia.

Havel had glaring faults. American neocons offered him small favors during his final rise to power. He reciprocated, consciously or unconsciously, by aiding their destructive military ventures and adopting their foolish economic policies. He succumbed to the politics of personality, both his own and those of the leaders who courted him. But it would be a shame if that’s all the world remembered.

Havel seemed unhappy in the role of leader. It's possible than he lost sight of his deepest insights, his truest gifts. It was the outsider Havel, the dreamer of the impossible, the surrealist and absurdist, we should remember. That’s the Havel who can and should inspire dissidents everywhere.

“Is the human word truly powerful enough to change the world and influence history?” he once asked. With his life and his words, Václav Havel gave us his answer. He showed us the power in each individual and the responsibility that accompanies that power.

At his best, and above all else, Havel was a dissident outsider who realized his power and used it. Now it’s our turn.

On Speaking To Power, Or, When Sanity’s Gone, There’s Always Satire

fake consultant — Mon, 01 Aug 2011 10:20:32 -0400

So everybody’s hearing the news, right?

There is a tentative debt ceiling deal, and this Administration and Congressional Democrats seem to have won everything they wanted: Republicans get to have multiple “we don’t approve” votes before 2012 on raising the debt ceiling, there won’t be any new revenue, there’s going to be another “hostage-taking” event around Christmastime, for many Democrats the issue of the Ryan Budget and the dismantling of Medicare is likely off the table for the 2012 electoral cycle, and the Administration seems to have figured out a way to not involve itself in shaping the way that entitlement reform will work out.

All in all, it’s some pretty slick negotiating, and I’m sure this Administration and Democratic Congressional leaders must be very proud.

Even on bad days, however, you gotta have some fun, and that’s why I’m encouraging everyone to take a minute today to say #thanksalot.

“This is tremendous, Don, just tremendous. The atmosphere heavy, uncertain, overtones of ugliness; a reminder in a way of how it was in March of 1964, at Miami Beach, when Clay met Liston for the first time and nobody was certain how it would turn out.”

--Howard Cosell, from the Woody Allen movie “Bananas”

There are a thousand other people today who will detail exactly where this went wrong, but I’m all about at least sending some kind of message; in order to say “thanks a lot” I’ve been Tweeting satire to the White House, and I’m hoping you’ll take some time today to do the same thing, using the #thanksalot hashtag.

“But I don’t Twibble, or Twister, or whatever they do on twitter”, you might say “and I don’t really get how it works”.

No problem.

If you want to send a message to a twitter user, you just put an “@” in front of their name, as in @whitehouse, usually right at the beginning of your message.

Hashtags are keywords that allow for lots of similar messages to be located, all together; when you put an “#” in front of a “word” it becomes a hashtag, as in #thanksalot or #arentyoutiredof. Popular hashtags become “trending” hashtags, and that’s one way how you make a big public statement on twitter (“Retweeting” someone else’s message is another way it’s done; retweeting and the sending of hastagged messages often occur symbiotically.)

Just to get you in the sarcastic spirit of the thing, here are some of the Tweets I’ve sent so far today:

@whitehouse Obama visits fallen building, a collapsed trench, and Carlsbad Caverns; says he'll "never cave" on debt deal. #thanksalot

@whitehouse republicans propose "logan's run", obama seeks reasonable compromise. #thanksalot

@whitehouse offers 1 Wet-Nap for each American thrown under bus yesterday; Republicans protest new "entitlement" #thanksalot

@whitehouse Prozac pill commits suicide; says in note that White House caving once again is "too depressing" #thanksalot

@whitehouse To avoid uncertainty in December, Obama Administration announces today they're caving on Bush tax cut extension #thanksalot

@whitehouse Dec. 23, 2011-Boehner: "We'll agree to revenue increases when both houses have a clean vote to repeal Obamacare..." #thanksalot

@whitehouse Dec 25, 2011-Administration announces entitlement compromise: cat food now food stamp-eligible #thanksalot

@whitehouse Obama Administration announces they prefer to negotiate with hostage-takers: "It makes us feel less guilty..." #thanksalot

@whitehouse Obama Administration "feels America's pain", announces nationwide program to distribute K-Y after debt deal #thanksalot

@whitehouse is there some sort of political viagra that could make obama "stand firm", just once? #thanksalot

At this point it looks like the only way this stinker goes down is if House Democrats vote against this bill and take the “Debt Ceiling Sword of Damocles” that the President has placed over their heads and put it right back on his, forcing either a 14th Amendment solution or a “clean” debt limit increase; if they do they not only stop this next hostage-taking dead in its tracks, but they create, for this Administration, the same level of fear that the Tea Party has today, and if that happens, then we move into the next stage of debt reduction negotiations from a position of strength.

If they fail to stop this deal, then when Medicare gets whacked in December the Democrats become co-conspirators – and at that point, for a Congressional Democrat up for reelection in ‘12 it’s gonna be either go down with all the other incumbents or run against Obama.

And at that point, the most interesting political question might be: did Obama depress turnout enough to cause Democrats to lose even more seats in Congress, or, when the details are better-known, is there going to be a huge “throw out all the bastards” vote that hammers Republicans just as ferociously as it does Democrats?

And what about Michelle Bachmann?

I don’t know, but it should be quite a soap opera between now and then, so stay tuned, make sure to say #thanksalot…and then do it a few times more…and most importantly of all, try to have as much fun in a bad situation as you can.

After all, as long as it’s happening to everyone else, it’s still comedy; until it finally does hit you…it’s not yet officially tragedy.

The "Acela" Economy: More Misery For Millions, More Millions For Misers

Richard Eskow — Wed, 11 May 2011 00:54:26 -0400

What do you do when the economy's a disaster, things are getting worse, and nobody seems to give gives a damn? What do you do? This country has been divided into two economies. One's the economy of Wall Street and corporate Manhattan, along with Washington's thriving economy of lobbyists, politicians, ex-politicians, national security contractors, and assorted hangers-on.

Call that one the "Acela Economy," since Amtrak's Acela Express links the two urban areas.

Then there's the other economy, the one where most people live. Let's call it the "Majority's Economy." It's a catastrophe, and it's getting worse, not better. Guess which one is getting more attention and care in Washington DC?

It's illegal to shout 'fire!' in a crowded theater. But what if there really is a fire - and nobody cares? It's not like anybody's going to start a stampede in Washington. It would be a major accomplishment just to disrupt their REM sleep.

Fire!

Meanwhile the volunteer firefighters are back at the station as flames rise higher, drinking beer and bitching about how much it costs to gas up the truck. That's because they're afraid the well-paid folks at both ends of that train line will be asked to picked up some of the tab.

Which would only be fair, since they started the fire.

You want the bad news first, or the really bad news? It's like the gambler said: Read 'em and weep.

Jobs? What jobs?

The next time somebody celebrates a report that reads "244,000 new jobs were created in April, which is 20,000 more than the previous month," remember that there are 7.5 million fewer jobs now than before the financial crisis. We need roughly 150,000 new jobs every month just to keep up with new job seekers.Of the 244,000 new jobs created last month, roughly one in four of them - 62,000 - were at McDonalds - which is now turning away more applicants than Harvard.

One grown man in three isn't working. That's a record. Long term unemployment is at record highs. African Americans are hit much harder by unemployment in this Jim Crow Depression. Young people are hard-hit too, which dooms many of them a lifetime of lower earnings. Older, long-term unemployed Americans have essentially been discarded, unlikely to find a new job and slipping down the ladder into a life of chronic deprivation.

For every job that opens up, there are 4.5 or five people looking for work. The total number of unemployed, underemployed, and discouraged workers, along with the unemployed, is approximately 25 million people, an un- or underemployment rate of 15.9%.

Losing the War on Poverty

Some of us can remember when President after President from both parties pledged to end poverty. Forget it. Since the financial crisis, more than two million Americans have fallen into poverty. More than 43 million Americans now live below the poverty line. More than 20% of this country's children now live in poverty, more than twice the figure for children in Great Britain or France.

And more than one household in twenty lives with "extreme food insecurity," which means normal eating patterns have been disrupted "at times" during the year because they didn't have money for food.

House on Fire

Most of the American middle class has kept its wealth in housing, something bankers and government leaders encouraged them to do. Thanks to Wall Street, that wealth is gone, replaced by debt for real estate value that no longer exists.

Rresidential real estate has lost more than six trillion dollars in value since 2008, after 57 consecutive months of decline - although a large chunk of that money is still being repaid as bank loans. (Six trillion in lost value -- and the banks are government are quibbling about a proposed $20 billion settlement for mortgage fraud.)

Housing values are down by a third over the last three years. Even more ominously, they're down 4.6% since their 2009 lows, and they're still falling. Fewer homes were sold in the first three months of this year than ... well, since they started keeping records. 8 million homeowners are now at least one month behind on their mortgage payments.

The New Lost Generation

Young people aren't just jobless. College tuitions have gone up 900% since 1978. The country's total student debt is now greater than its credit card debt, and will reach $1 trillion this year. And in a statistic that should bring tears to any thoughtful person's eyes, only 44% of those polled believe that children will have "a better life than their parents."

Ten years ago that figure was 71%. Like the old song says: The dream is over.

It gets even worse

Not weeping yet? Try this:

Gasoline went up 30% over the last twelve months. Crops are lousy this year, so food prices are going to go up.

Consumer confidence is falling. When consumers aren't confident, they don't spend money. And when they don't spend money, people don't work. Small business confidence is falling, too. Why shouldn't it? Their customers don't feel like buying very much.

Millions for Misers, Misery for Millions

So what are people talking about in Washington? Less spending, and no new taxes for corporations or the wealthy. Bear in mind, for the wealthy - one person in 100 - things are great. They now own one-third of everything, while tte lower 50% of Americans own 2.5% of everything.

Meanwhile the other ninety-nine people are watching their dreams of a better life die, and there's no serious talk about investing to create jobs and turn this economy around. There's jive talk instead: "Business doesn't like economic uncertainty," we're told, "so it won't hire and invest." But John Boehner just went to Wall Street and threatened to bring about an economic collapse if his radical demands weren't met. That's a recipe for massive uncertainty. How did business react?

The stock market went up.

They're pushing "job creating" tax breaks for big businesses and wealthy individuals, even though corporations are sitting on two trillion dollars in cash and the wealthiest among us are richer than they've been at any time in modern history.

It. Does. Not. Compute.

Free the arsonists!

Meanwhile the people who caused this catastrophe - the banks - are being unleashed from the few restraints that were imposed on them last year. It's increasingly clear that the government still has no tools for winding down a "too big to fail" bank when it's imploding.

There's no political discussion about turning these explosive banks into something smaller and less combustible. Pretty smart people are beginning to agree that the government hasn't been given the tools it needs to prevent the next crash.

Scroogenomics

It's not that the recurring deficit doesn't need to be controlled. It does - but only after we've rescued the economy, and those who are suffering within it. And cuts alone can't - and shouldn't - do the job.

Which programs do the Republicans want to cut? They've already voted to decimate seniors by eliminating Medicare (which, in Alice-in-Wonderland style, they insist wouldn't eliminate Medicare). And they would also slash Medicaid, which would be a gut-punch to the poor, the disabled, and children. They want to cut Social Security just as a new wave of retirees enters the program, along with a whole range of programs designed to help the newly-struggling victims of the economic collapse.

Tax cuts for the wealthy would make a major contribution to reducing the deficit - so, of course, Mr. Boehner has taken them off the table.

These policies are against the public's interests and against the public's will. The American Majority project (I'm a contributor) has the details: most people want higher taxes for the wealthy, oppose cuts to Social Security and Medicare, would like to see the defense budget reduced, and want the government to address jobs and economic growth before focusing on deficits.

Good economists think that's a smart way to go. But the Acela crowd doesn't agree. Apparently unprecedented levels of wealth aren't enough to satisfy them. Guess who's winning in Washington?

Unenlightened Self-Interest

If humanity is becoming more rational (how that for an debatable question?), people will one day look back on this moment with amazement, awe, and pity. They'll wonder how a few influential people could be so blind and so heartless, when so many people are so brokenhearted. Self interest plays a big part, of course. Politicians win campaign contributions this way. Misguided Democrats can fool themselves into thinking they look "moderate" for embracing the warped priorities of the Acela crowd and compromising with its radical demands. Journalists can repeat false economic truisms, secure in the knowledge that editors and billionaire-funded foundations will have their back.

The real question isn't why so many people serve the AcelaCrats: It's why the rest of us tolerate it. Why do people still vote for politicians who work against their interests, or watch and read journalists who fail to report the facts impartially and thoroughly?

If you're wondering the same thing yourself, you're probably not reading this in the Business Class car of the Acela Express.

This post was produced as part of the Curbing Wall Street project and the Strengthen Social Security campaign.

Social Security: Are You Ready For A Congressional “Video Staycation”?

fake consultant — Fri, 01 Apr 2011 08:16:41 -0400

Diligent reporter that I am, I got up yesterday morning to do a bit of fishing for a story, and as so often happens, I’ve caught something a bit unexpected.

Now what I have for you today starts out as a bit of insider information that came to me on background—but it turns into a chance for those of us who support Social Security to very much get in the faces of our members of Congress, for two whole weeks.

And to make it even better, I’m going to throw out a few direct action ideas “for your consideration” (as they say in Hollywood during Awards Season) that would absolutely make good street actions and YouTube videos, both at the same time…and even more importantly, we’ll absolutely make some great Spring Break fun.

“I mean, just from the very notion that it said that 50 percent of beneficiaries under the Social Security program use those moneys as their sole source of income. So we've got to protect today's seniors. But for the rest of us? For - you know, listen. We're going to have to come to grips with the fact that these programs cannot exist if we want America to be what we want America to be…

…We're going to have to accept some changes as far as the rest of us. And what we're saying is for those 55 and older do not have to worry about changes in benefits. But for the rest of us we will. We will have to do that."

--House Majority Leader Eric Cantor, speaking at the Hoover Institution, March 21, 2011

OK, so like I said, I have bit of “inside baseball” that sets this whole thing up.

I got a piece of information “on background” yesterday from An Actual Well-Informed Source who seems to be about two or three “degrees of separation” away from actually being in the room while this news is occurring; because of that I’m willing to ascribe to it a reasonably good chance of proving to be entirely accurate.

What I was told was that Paul Ryan, who is the “manager” of the House Republicans’ budget-cutting effort, has decided not to push to include cuts in Social Security as part of the current fight over a Continuing Resolution…because Spring Break is coming up.

Check this out: according to the House Schedule, April 18-29 is Spring Recess, and I was told there’s a lot of concern on the Republican side about what would happen if anyone made any crazy Social Security proposals right now…when they have to go home and face you and me and the rest of the Angry Nation in just about two weeks.

(There’s some evidence to back this up: it is now possible that Cantor “misspoke” in that quote a couple of paragraphs up the page; as of this moment I can’t confirm if a "full backpedal" is officially underway or not.)

We can discern two things from that little nugget: for starters, we are having an impact on this fight—but beyond that, we also now know that we have two weeks to publicly torment those Members of Congress who are looking to cut Social Security…and we have two weeks to get ready.

Since hunger strikes are already underway, here are a few other ideas you’re welcome to steal to make your statement:

Is your Member going to be appearing at a community center or a friendly church?

Well how about arriving a few hours early and setting up a cardboard “Social Security Tahrir Square”?

You could have a box that’s the local “Catfood Grocery”, you could paint one of the boxes to look like “Grandma’s Gingerbread Box”, and you could even have a “Long-Term Care Facility” and hand out fliers of your own—and make sure you catch the reaction of the Congressional Staff on video to set up the bigger video of you interacting with the crowd…or y’all being ejected by the suddenly fearful Representative…or y’all “making happy” with a supportive Member.

Now you’re going to love this one, and there are two ways you can make it work.

What we’ll be playing on are the proposals to increase the retirement age and how we’ll be asking old people to do jobs that, obviously, they just can’t; what I basically want you to do is either go to an event…or outside one of the Members’ District Offices…and create a “job training center” for senior citizens.

Get a wheelbarrow and load it with a nice load of bricks, maybe fill some oval trays with a mess of plates and beverageware (safety first on this one; beware of glass and ceramic—and don’t forget the jackstands), and then rustle up a transfer belt and a heavy volunteer and simulate what nurses and their aides do all day long, and all night, too: lifting and transferring those who can’t do it for themselves.

Take it all to the venue, and you can either “train” your own 70+ year-old students…who might not be old enough to retire, under the new proposals…on how to do these types of jobs while the crowd watches—or you can invite older members of the crowd to try their hand at moving the bricks, or lifting the tray. Bring a medical worker and you can show them what lifting looks like, too—although I would be unlikely to invite the crowd to do that one without some kind of training.

(Do I have to warn you that this could get someone hurt, and you’ll have to use a reasonable amount of caution when you do this? I didn’t think so.)

Again, get it all on video—and then get that video right up on the Web.

Our final idea for today might be my favorite—but that might be because I used to be a caterer, and this really fits my sense of humor.

You know those “Top Chef” and “Iron Chef” shows?

And you know how we refer to that Deficit Commission as the Catfood Commission?

Well…why not sponsor a “Catfood Contest” at your Congresscritter’s event?

Again, you could go two ways: invite “contestants” in chef’s whites to create delightful dishes with the Commission’s Catfood, or you could judge competing sculptures; they do both at the Spam Jam in Waikiki, and if it was me I’d steal the ambiance of this kind of an event from Hawai’i, especially since it’s Spring Break season anyway.

An alternative way to do this: performance art of an elderly couple having a Catfood Commission BBQ, cooking Catfood patties on portable grills to make a point.

So there you go:

We have two weeks to get ready to have two great weeks of fun just really tightening the screws on those Members of Congress who are looking to jack America out of Social Security, and we have ideas on the table that you are entirely welcome to borrow, or adapt, or outright steal—and with any luck, other readers will toss in some ideas of their own—so get your art on, gather your props, and bring extra video batteries and a blank tape to give the police…just in case.

And here’s one last thing to remember: this isn’t just about turning back a disastrous plan to break the backs of Americans for decades to come—it’s also about having a good time.

Well-executed comedy makes people agree with you, and to like your message, and that’s a powerful thing; the more fun you’re having, the better the whole thing is going to work.

Now go forth, make some mischief, and watch the magic happen.

FULL DISCLOSURE: This post was written with the support of the CAF State Blogger's Network Project.

On Monday Morning Philosophy, Or, Founders Tell America: “You Figure It Out

fake consultant — Sun, 20 Mar 2011 23:57:07 -0400

In our efforts to form a more perfect Union we look to the Constitution for guidance for how we might shape the form and function of Government; many who seek to interpret that document try to do so by following what they believe is The Original Intent Of The Founders.

Some among us have managed to turn their certainty into something that approaches a reverential calling, and you need look no further than the Supreme Court to find such notables as Cardinals Samuel Alito and Antonin Scalia providing “liturgical foundation” to the adherents of the point of view that the Constitution is like The Bible: that it’s somehow immutable, set in stone, and, if we would only listen to the right experts, easily interpreted.

But what if that absolutist point of view is absolutely wrong?

What if the Original Intent Of The Founders, that summer in Philadelphia…was simply to get something passed out of the Constitutional Convention, and the only way that could happen was to leave a lot of the really tough decisions to the future?

What if The Real Original Intent…was that we work it out for ourselves as we go along?

“…you see, all the majesty of worship that once adorned these fatal halls / was just a target for the angry as they blew up the Taj Mahal…”

--From the song “Gasoline”, by Sheryl Crow

The reason this is coming up today is because I’ve been writing a lot about Social Security lately, and I keep getting comments from folks who see no Constitutional foundation for such a program.

To sum up what I often hear, if there is nothing in the Constitution that specifically provides for Social Security, then, if it’s to be done at all, it’s something that should be left to the States. (The 10th Amendment is used to reinforce this point.)

A lot of these folks, from what I can see, hearken for a simpler time, a time when America had no “foreign entanglements” or National Banks…a time when men of the soil worked their farms with no fear of Debt or The Taxman….a time when government worked best by using local wisdom to deal with local problems.

In other words, we’re basically having the same arguments over the shape of this Government that Thomas Jefferson and Alexander Hamilton were having in 1787—and for those who don’t recall, Hamilton won, which reflects the reality that we don’t all live on farms and hunt turkeys and Indians, and that State Governments are just as capable of ignorance and foolishness and greed and blind hate as any Federal Government.

To reinforce their arguments “fundamentalists” fall back on some version of the Original Intent theory, which basically assumes the Constitution was written by men who miraculously created a perfect document, and that all the answers to today’s problems would be found by simply allowing the Original Intent to shine through.

I’m here to tell you that couldn’t be more wrong—and to prove my point you need only consider the Civil War.

Despite what you might have heard in Virginia, the Civil War really was about slavery, and the reason we had that fight in the 1860s was because there was no way the question could be settled at the Constitutional Convention.

Those Founders who supported ending that “peculiar institution” were never going to convince slaveowning Founders to give up their property, and as a result of the desire to get a Constitution drafted that could be ratified by “the various States” there were compromises made, including the 3/5ths Compromise and Article Four’s requirement to deliver fugitive slaves to their owners upon demand, which resulted in the Fugitive Slave Acts of 1793 and 1850.

The Intent Of The Founders, on the question of slavery, was to let time work it out.

The same kind of “let time work it out” thinking led us to Article 1, Section 8, and the “general welfare” clause.

Congress is empowered to enact legislation that provides for the “common defense and general welfare of the United States”…but there is no specific interpretation of what the phrase means (in fact, there is no glossary at all for the Constitution, which means there are plenty of other examples of, shall we say, "unclear phrasing").

Since there is no specific reference as to how Article 1, Section 8 and the 10th Amendment are supposed to interact or what the Founders’ Intent might be, we are again forced to apply our own interpretations, over time, to figure out how to resolve the inevitable conflicts.

We had to do that because, even as there were proponents of a Federal system, there were plenty of Delegates at the Convention who wanted nothing to do with a strong central government. They wanted to keep a system in place that resembled what we had under the Articles of Confederation, where the Federal Government had no ability to compel the payment of taxes and States had the choice of whether to “accept” Federal laws…or not.

Over time, of course, we’ve come to realize that having one air traffic control system, and not 50, was a good idea, and that funding things like disaster response on a national level makes sense, even if Texas wants to go it alone or something, and we probably all agree today that if States are willing to allow 12-year-old factory workers to work 16-hour days, then Federal child labor laws are a reasonable thing to make that stop—and all of this progression of history is happening because the Original Intent was to let the future figure out where the 10th and Article 1, Section 8 would “find their center”.

The Original Intent Of The Founders, apparently, was that white men who did not own property, women, and those not pale and fair and of European descent had no reason to be involving themselves in the affairs of government, as that was the list of who was not allowed to vote at the time we began our experiment in democracy; over time we’ve seen fit to change that—and at every step along the way there have been Cardinals of Interpretation ready to tell us that with each change we were doing violence to the letter and the spirit of the Constitution as they knew the Founders would have intended it to be.

Am I entitled to create or possess any form of pornography because the First Amendment prevents Congress from abridging free speech, or is the general welfare furthered by allowing society to protect itself from the exploitative effects of pornography by limiting or banning completely the production or possession of certain materials that are considered unacceptable?

The Founders seem to have offered no obvious intent when they created this conflict, which makes sense, because the possession of child pornography didn’t really exist as an issue in 1789.

I’m guessing that today we are not anxious to have each of the 50 States adopt their own rules (after all, who knows what some crazy State might do?)—but they did put that “general welfare” clause in Article 1, Section 8, and over time, our view of Constitutional law has come to accept the compromise that the Founders could not have foreseen.

The fact that the Supreme Court resolves these kinds of conflicts at all was not laid out in the Constitution, nor was the fact that the Federal Government’s powers are superior to those of the States; it took the 1803 Marbury v Madison and 1819 McCulloch v Maryland rulings to figure out, when there are multiple claims of liberty, which were to be put ahead of the others.

Can you guess why?

That’s right, folks: it was because they had Delegates at the Constitutional Convention (and States who had to ratify the finished product) who did not want to give the Court or a Federal Government that kind of power, and the only way to get something passed was to sort of “leave things open” and let time work it out.

Here’s an example of how one of the Founders tried to tried to kill the “Original Intent” argument before it even got off the ground: James Madison, who kept the only known complete set of notes during the Constitutional Convention never released those notes during his lifetime (he’s also credited with being the principal author of the document, possibly because his were the best notes).

Why did he do that? It appears to be because that Founder’s Intent was to make the Constitution’s words stand on their own, without his notes to frame the debate—and in fact the document had been in force for almost 50 years before those notes saw the light of day.

The Cardinals of the Supreme Court, some of whom claim they can divine Original Intent for any and all situation, are hoping that you’ll forget that they really serve to resolve disputes where the intent of the Founders seems to collide with the intent of the Founders—and all of that brings us right back to Social Security.

It is true that the Constitution, as it was written in 1789, does not contain the words “you may establish Social Security”—but it is also true that there were no words that would allow anyone who is not a white male to vote, or to prohibit the ownership of slaves.

Congress, acting with the authority to provide for the general welfare, took Roosevelt’s proposal and enacted it into law. The Supreme Court, in 1937, took up the question of whether the 10th Amendment prevented Congress from enacting Social Security with a series of three rulings, and here’s part of what they had to say:

Counsel for respondent has recalled to us the virtues of self-reliance and frugality. There is a possibility, he says, that aid from a paternal government may sap those sturdy virtues and breed a race of weaklings. If Massachusetts so believes and shapes her laws in that conviction, must her breed of sons be changed, he asks, because some other philosophy of government finds favor in the halls of Congress? But the answer is not doubtful. One might ask with equal reason whether the system of protective tariffs is to be set aside at will in one state or another whenever local policy prefers the rule of laissez faire. The issue is a closed one. It was fought out long ago. When money is spent to promote the general welfare, the concept of welfare or the opposite is shaped by Congress, not the states. So the concept be not arbitrary, the locality must yield. Constitution, Art. VI, Par. 2.

So there you go: the next time someone tells you that a program like Social Security is unconstitutional because of Original Intent, be very, very, suspicious, and keep in mind that the Constitution was written, intentionally, with the idea that a lot of problems were simply going to be kicked down the road to future generations of Americans.

Constitutional Delegates, after all, were politicians, and if there is one thing that politicians love to do it’s to kick a problem down the road so that something can get done today.

The history of the last 225 or so years has been a long journey down a long road that took us past slavery and Reconstruction and suffrage and Jim Crow, and to assert, as the Cardinals of the Court do, that all those questions were answered that summer in Independence Hall is to be either amazingly blind or deliberately untruthful—and the fact that they get to dress in robes and sit behind something that looks quite a bit like an altar doesn’t change that even one little bit.

FULL DISCLOSURE: This post was written with the support of the CAF State Blogger's Network Project.

Social Security: If You Can’t Kill The Program, Screw The People

fake consultant — Thu, 03 Mar 2011 11:53:44 -0500

There’s a lot of ways to be petty and cheap and stupid, and a lot of ways to stick it to a program you don’t like, and by extension, the clients of that program…and this week the House Republicans have embarked on an effort to combine the two into one petty, cheap, and stupid way to stick it to the clients of Social Security and the workers who administer the program.

They’re going to sell it to you, if they can, as a way to “lower the deficit”, or words similar…but what this is really about is making the actual Social Security program work less well—because, after all, if a program is popular today, the best way to make it less so is to apply a bit of “treat ‘em like their cars were impounded” to every interaction customers have with the system.

And what better way to make sure that happens…then to aggressively demoralize everyone who works down at the ol’ Social Security office?

The foot less prompt to seek the morning dew,
The heart less bounding at emotion new,
And hope, once crushed, less quick to spring again.

--From “Thyrsis”, by Matthew Arnold

So here’s the deal, short and sweet: Social Security is amazingly efficient at running an annuity and income support program, both at the same time; in fact, in 2009 the Social Security Administration Old-Age and Survivors’ Benefit Program took in not quite $700 billion and disbursed $564 billion, writing checks to and serving millions of customers at the same time…and they did this with administrative expenses of about $3.4 billion—and that’s just about .6% of the distributions, all of this according to the Report of the Social Security Trustees for 2009.

In the private sector, companies who provide annuities have administrative costs that range from 50% to 500% higher. (Of course, Social Security doesn’t have to pay sales commissions.)

The Social Security folks are similarly frugal with the Disability Insurance Program (expenses run 2.3% of distributions), and if you combine the two the total is .9%.

Nonetheless, the plan from the House Republicans, who want to return to balanced budgets right now, if they are to be believed, is to cut $1.7 billion of those administrative costs from a budget of just under $12 billion in the remaining 7 months of the fiscal year, and, according to the involved union, that means in those next 7 months workers will have to take three weeks worth of furlough days to make that work.

If my quick math is correct it means they hope to close the office about 10% of the time while expecting the same amount of work to be done, which is probably not going to happen.

The likely end result will be callers who can’t get through without more of a struggle, checks that may or may not get out on time, an angry workforce, and a general result that equals more and more people saying “Social Security sucks”—and if you ask me, that’s the real goal of this effort: to make Social Security unpopular, thus setting the stage for more cuts to come later.

And just to put all this in perspective, we today give subsidies totaling about $4 billion a year to oil companies, apparently because gold-plated caviar is really, really, expensive, and the same budget-conscious House Republicans…every single one of ‘em…voted to protect that subsidy just a couple of days ago.

Social Security workers were out yesterday handing out leaflets to describe what’s going on, although as far as I know the leaflets didn’t say that this is just one more part of a giant plan that’s already raising its ugly head in places like Wisconsin and Indiana and Ohio and New Jersey: start a war against one group of American workers by claiming they’re not “real” workers or that they’re “special, extra-privileged” workers…and try to drag down all workers in the process.

A cut like this is a shot at these workers, and, by extension, all workers who might, you know, like a raise some day—and it’s also a shot at you, or your parents, or your grandparents, who will eventually have to deal with the results of all the cutting.

But in the end, it’s important to look at the bright side: the gold-plated caviar market will still be protected, thanks to that $4 billion a year in cash we’re donating to oil companies—and if I had to guess, BP’s senior management will not be looking at longer wait times the next time they call Louie Gohmert or Joe Barton or any one of a few dozen other Members who evidently represent Big Oil first…and Americans last.

FULL DISCLOSURE: This post was written with the support of the CAF State Blogger's Network Project.

Campaign Manifesto #3: On The Road, Defending Social Security

fake consultant — Mon, 28 Feb 2011 02:01:07 -0500

So it’s Day 3 of my fake campaign for Congress, and we’ve run into our first obstacle

The Fake Campaign, as you may recall, is fake headed for Wisconsin, to show solidarity, and we’ve fake hitched a ride on a delivery truck headed for Rush Limbaugh’s Florida broadcasting studios—but we fake found ourselves caught up in the all-too-real Giant Grip Of Winter that has seized the Midwest over the past week.

We’re back on the road now, but we were stuck for darn near a half-day there at Wall…and if you know anything about South Dakota, you know there are really only two things to do in the City of Wall: you can shuffle back and forth between Gold Diggers and the Badlands Bar, partaking of numerous intoxicating liquors along the way…or you can head on into Wall Drug (the same one that's on all those bumper stickers and signs) and partake of the finest display of Giant Jackalopia on the planet.

The Campaign, naturally, chose Jackalopia—and that’s why today’s Manifesto is all about the fake impromptu 5-cent-coffee-fueled Social Security Town Hall that we held in the Wall Drug Mall for several hours while we waited for I-90 to reopen.

Sitting quietly, doing nothing,
Spring comes, grass grows by Itself.

--From the “Zenrin Kushu”, attributed to Toyo Eicho

I-90, the main route from West to East (if your fake trip begins in Seattle, as ours did), was closed at Wall, South Dakota for about 24 hours this week, but this particular delivery truck just absolutely has to be in Florida by Monday…and the delivery is so important that to get us back on the road we now have a special escort of two South Dakota Department of Transportation snowplows and two 2011 “new and improved” South Dakota Highway Patrol Dodge Charger Pursuits (now with longer lasting brakes!) to make sure we get to the Wisconsin line in the shortest time possible.

With the weather being what it is, Jenna and Tendei, our driving team, have been earning their money, in a big way, this trip, and for the moment Tendei is asleep, while Jenna and I mull over the conversations we had tonight, me and the caravan of Wall Drug customers who gathered, first by the snake-oil salesman (that’s not hyperbole, either: they actually have an anamatronic snake-oil salesman), then out in front of the Western bookstore, and finally over by one of the 5-cent coffee stations.

It was my fault: standing next to the snake-oil salesman got me thinking about all the lies we hear every day about Social Security…which I mentioned to the 30-something couple standing next to me, young son in tow.

“If I didn’t know better, I’d guess the next words out of his mouth are going to be: ‘I’ll never see a dollar of my Social Security anyway, so who cares how they fix it?’.”

He looked back at me, all surprised: “We’re not ever going to see any; they tell us that all the time.”

“Yeah, I know…but it’s a big ol’ load of hooey, and I’ll tell you why: Social Security is funded by payroll taxes that are, for the most part, paid out as they’re collected, that means there’ll always be money that we will use to pay benefits, unless we just quit collecting that money altogether, which is not likely.”

We were beginning to gather a few others around us (hey, we were all stuck there—nothing else to do…); that means my gestures were getting a bit bigger—but there’s a nice echo in there, and you can be heard.

“The way things work now, if nothing changes, there will be enough money to pay out all the benefits we expect to pay until 2037. After that, if the ‘pessimistic projection’ plays out, even if nothing else changes, we can still pay 75% of what we expect to pay for about 50 years after that. We only look out 75 years at a time, so we don’t have a projection that goes out past 2084…but, pretty much, as long as we keep collecting the money, we’ll still be able to pay the benefits.”

I looked over at a 40-ish couple that had come over to listen: “What about you two? Right now there’s a lot of talk about ‘fixing’ Social Security by making you wait longer to retire or by making sure cost-of-living increases don’t really keep up with inflation. Don’t y’all feel like if they do that, you’re just getting screwed?”

It was almost like Parliament and “Question Time” in there for a second (which is not a George Clinton reference) as the 15 or so folks listening began to “harrumph” in agreement.

“Well how about if I were to tell you that I could fix this problem, and that I could do it without raising the retirement age or messing with your cost-of-living…and that I could do this in a way that gives every person in this room a tax cut at the same time…and that, even though I’m running for Congress, I’m not a snake-oil salesman?”

About two lives ago I used to be a failed stand-up comic (true!), and it is possible to know when the crowd is turning—and this was one of those moments.

The 40-ish husband looked at me and said, basically, that I did sound like a Congressman—and not in a good way.

“I know you don’t believe me, but listen to this: if you turn a wrench or carry a tray or do anything that makes under, basically, $105,000 a year in wages, all your income is taxed for Social Security…but if you make a million a year, you don’t pay any tax at all on the last $890,000…and if that income was taxed, we wouldn’t have a Social Security problem.

Now you don’t hear much about this back in Washington, and there’s a couple of reasons why: right off the bat, this President and this Congress don’t want to be accused of ‘raising anyone’s taxes’; beyond that, 2012 is coming fast, and both the President and the Grim Weeper are trying to be the one who can look at the voters and say: ‘I’m The Slasher, and I will cut the deficit and balance the budget faster than the other guy’.

Lots of people think cutting Social Security will somehow cut the deficit and reduce the debt, even though it has nothing to do with it at all, and some of them figure that if they campaign around cutting everything that government does it’s gonna help their political future, and that includes cutting benefits for people just like you, instead of just funding Social Security with a flat tax for everyone…even the rich.”

This argument, I might add, was starting to gain traction.

“Look at where we are right this very second: standing in front of a Western bookstore…and if you go in there you’ll see stories of how people died of starvation and how land barons ruled counties with an iron fist and how we fought range wars with imported hired guns and shootouts in the streets.

Is that what we want to go back to?

It’s not what they wanted. The pioneers didn’t just build isolated ranches, they built towns, and towns with a schoolhouse, so that the kids on those ranches didn’t have to rely on a home school education. They had a Sheriff or a Marshal and a Town Council and a Judge, because they knew that they had to create some rules and establish some government.

Some towns in the Wild West, and you know I’m telling the truth about this, didn’t even allow guns inside the town limits…just like when Wyatt Earp was the Marshal in Dodge City and you had to check your guns if you were going north of the railroad tracks.”

You know what? This was working: the crowd began to nod with me, and I figured while I had the advantage I’d press the thing home:

“Now a lot of people probably think the fix is in, and what’s the point…but I don’t agree. There was an effort at the beginning of this Congress to force these cuts by threatening to stop providing any money for the Government at the beginning of March if the ‘Wrecking Crew” didn’t get their way, and the Tea Party folks came in here with a big ol’ war cry about ‘shut it all down’ and all that…but now that March 4th is actually drawing close, and the public is starting to figure out what’s up, the message is suddenly all about ‘maybe we can extend the funding after all’.

That tells me that the people who think cutting everything in sight because it looks good are finding out it doesn’t always look good to just go around cutting everything in sight.

Tell ya something else. A lot of the people who want to change Social Security want to change it into a system that rewards people who manage Social Security accounts, not the people who own the accounts, and if you look at what ‘privatizing’ the system is all about, that’s what it is: it’s just a plan to get more money out of you in the form of fees and charges, which is going to be a great big reward to great big political donors who have been trying to make this happen since the 1980s.

So here’s the reality: there is enough money in the system to pay for you and your kids to have benefits, even if no changes are made, and if you just make Social Security a flat tax, even for the rich, we are pretty much guaranteed to have every dollar we need until at least 2084, and we don’t have to cut benefits or raise the retirement age, or do any of that crazy stuff…and we don’t have to give up our hard-earned money to big banks and Wall Street in the form of new fees and charges on your Social Security accounts.

So I came here in a truck, and it has to be in Florida in a couple days, and my driver friend is walking over here, and that means I gotta go, but I hope I told you something about Social Security you didn’t know a while ago…and if any of you are fake voting for a fake Congressional candidate in 2012, I hope you’ll keep me in mind.”

And with that, I fake shook a few hands, jumped in our fake truck, and headed off to Wisconsin.

Talking Economy and the State of the Union On KGO Radio

Richard Eskow — Wed, 26 Jan 2011 23:37:59 -0500

LISTEN

I spent a few minutes speaking with Gil Gross on KGO Radio in San Francisco during the run-up to yesterday's State of the Union. We talked about the additional financial reforms we still need and the unfair economic privileges the big banks still enjoy. And I was able to put in a plug for the important work of the Financial Crisis Inquiry Commission, whose report will be released tomorrow.

The whole exchange lasts about five minutes. Listen to it here or download it here.

Liveblogging Simon Johnson and Robert Johnson at America's Future Now!

Zach Carter — Tue, 08 Jun 2010 07:46:21 -0400

8:40

Terrific question from Mary Bottari. Everyone says they believe in higher capital requirements-- even bankers-- but so far, all of the negotiations regarding new capital requirements are leading to very small adjustments, rather than significant changes. The higher a bank's capital requirements, the less it can gamble with borrowed money, and the greater it's cushion against losses. Lehman Brothers had a Tier 1 capital ratio of 11 percent right before it filed for bankruptcy, and that wasn't enough-- right now the international negotiations are leading towards a consensus of . . . 11 percent.

Radical right-winger Eugene Fama wants 40 percent to 50 percent capital requirements for banks. Simon Johnson says 20 percent to 25 percent capital requirements are acceptable, provided the biggest banks are broken up.

****************

8:30

Robert Johnson: "The two things that blow out the debt-to-GDP are financial crises and wars." So being a deficit hawk means being a financial reform hawk and an anti-war advocate.

*****************

8:20

Good question from Bob Kuttner. Teddy Roosevelt was kind of a radical fluke-- he only came to power because McKinley was assassinated. Obama has not supported serious financial reform-- how can progressives talk about moving progressive policy when the administration simply will not lead?

Simon sez: So what? Progressives worked for decades to change the consensus and create new ideas about how big business should operate. When somebody like Teddy Roosevelt did come to power, those ideas were not mainstream, but they were out there, and Roosevelt was able to deploy them in public policy.

We can't make the president a progressive, but we can create the groundwork for a progressive president to take advantage of. There is very bad news for Democrats here-- Roosevelt was a progressive, but he was also a Republican, and his reformist domestic agenda made him wildly popular. If Democrats don't seize the mantle of reform, somebody else will.

********************

8:15

My colleague Richard Eskow asked a great question. Goldman booked a profit on its trading operations every single day of the previous quarter. What's going on?

Simon and Rob responded with the clear answer-- proprietary trading, particularly in the derivatives market, operates like a casino. And in casinos, it is not unusual at all for the house to win every single day.

****************

8:10

Great, simple question from Simon. By a show of hands, who here thinks that the government would allow Goldman Sachs to fail once the administration gets it's resolution authority? Not one person in the entire room raised a hand.

*****************

8:07

Rob Johnson: "The administration has said several times that this bill will end too big to fail. Let's talk about that."

Simon Johnson: "Well, it won't."

**************

8:00

Banking was boring from the 1930's through the 1970's-- banks made simple, straightforward loans and were heavily regulated, and as a result, didn't make a ton of money. By deregulating banks, the compensation system got completely out of whack-- banks started paying huge bonuses based on short-term profits, while ignoring longer-term risks to the broader economy.

Serious changes to the structure of the financial system would have the effect of cutting back on Wall Street bonuses. But the scope of Wall Street pay has several residual effects on Wall Street's grip on Washington. Regulators, for instance, are less likely to leave their posts in government for a job in banking when finance doesn't pay. But the important change is the mystique and glamour of banking. In the 1950s, a banker was a pretty boring guy who played a lot of golf. Today, bankers are super-stylish elites. Thanks in part to America's obsession with wealth, powerful people in Washington and much of the public believe these bankers must be doing something right to be living so lavishly.

And in a sense, the bankers are doing something very clever-- they've found a way to live off the public purse and prevented their actions from being subject to serious market or regulatory accountability. Markets don't work when nobody can be held accountable for their decisions, particularly if those decisions have the potential to wreck the broader economy, which is exactly what happened in 2008.

***********************

7:54

Another important point from Simon Johnson (surprise!). The view that today's megabanks are dangerously large and need to be broken up is not a left-wing view. Many progressives and lefties agree with it, but the issue is a matter of fundamental market functionality, and plenty of moderates and right-wingers agree that big banks need to be broken up.

Even Eugene Fama, a conservative, market fundamentalist economist who invented the efficient markets hypothesis, actually agrees that today's big banks are receiving dysfunctional subsidies from taxpayers and corrupting the very essence of financial markets.

*************************

7:50

Simon Johnson just drew one of his favorite parallels. When Teddy Roosevelt was trying to break-up the big, corrupt trusts in 1902, the mainstream intelligentsia was totally opposed to it on economic grounds. But by 1912, public opinion was decided in favor of breaking up Standard Oil. So it is today with big banks-- people are beginning to realize that the policies handed down to Washington from Wall Street over the past few decades have been terribly destructive, but it takes time to significantly shift public opinion definitively.

John Scott

John Scott — Sat, 24 Oct 2009 13:25:40 -0400

Retired military officer. Former vice president for a manufacturing firm.

Master of Public Administration

Bachelor of Arts, Economics/Business Administration