Archive for the ‘The Economy’ Category.

They Still Don’t Get It

Jimmy Kimmel, the late night TV host, was given great kudos for giving an impassioned plea for a health care plan that covers pre-existing conditions since he is now the father of a new son that has them.

But in this, he said this:

“This isn’t football,” Mr. Kimmel added. “There are no teams. We are the team, it’s the United States. Don’t let their partisan squabbles divide us on something every decent person wants.”

WTF is he talking about?  This isn’t about a partisan squabble unless you consider Republicans feuding with each other partisan.  Democrats gave you coverage of pre-conditions, and Republicans are trying to take it away.  This is not some partisan both sides do it and they just need to get along thing.  It is a basic dividing line between Democrats and Republicans.  Mr. Kimmel just played into the hands of Republicans by being politically correct and not pinning the blame on the Party that deserves it.  The Press does the same thing which is why Americans see the problem as “Washington” instead of doing the brave thing and naming names.

And now they are taking this to a whole new level as we see the reality of President Cheeto-Head as an ignorant, dangerous man and press continues to not label it and tries to pretend things are normal, just different. He is  not and we need to understand that while he has a base that thinks he is doing fine, they are a small minority and he is a true danger to democracy as we know it.  Congress can be as dysfunctional as they want (Republicans actually), but when the man who leads the nation has to lead and not backwards.  He cares less about human rights or America being a beacon of democracy in the world and he is doing his best to destroy it.

As I write this Comey is explaining why he had no choice which is total nonsense and he and the Russians changed the direction of the country.  Now the Russian investigation is being stymied by the Administration and Republican leaders in Congress.  As I wrote yesterday, Cheeto-Head keeps making statements that show he is either delusional or an idiot.  Stephen Colbert did a number on Cheeto-Head on Monday, speaking truth to the nation and people are just shocked, shocked, shocked.

This is the reality.  And up next is his executive order on “Religious Freedom” which will actually be a license to use religion to discriminate in the public square.  It is rolling back history and the Enlightenment to bring religious discrimination back into government.  Add in to that and this Administration’s willingness to lie and deny science and we are really going back to the 17th century. And you want me to be tolerant of the misguided and ignorant people who voted for this moron?  I don’t think so if you really understand what is at stake here.

And I will leave you with caution to President Obama who very much tone-deaf, signed up to cash in with Wall Street.  This what middle America is turning away from along with young people.  They get that the present economic system does not work for most of them and this raises all kinds of flagsas to whether establishment Democrats get this.  Wall Street is not the answer.  It is the reason Hillary never rang true on understanding Progressivism.  But now we are faced with a very damaged and dangerous man in the White House being enabled by Republicans.  They are the enemy.  If Obama doesn’t stand up and take him on he is a fool.  These are not normal times and treating them as such will be our demise.  Resist.

 

Zombie Ideas

They’re back!  Magic tax cuts that actually balance the budget (Laffer Curve) and a Republican healthcare plan that provides more choice instead of actually paying for more care.  Both are zombie ideas.  The ideas have no life left in them because they have never worked, but Republicans keep resurrecting them and the zombies arise again to eat your brain.

Okay, healthcare.  It’s not free so the only question is do you believe that government must provide healthcare (note:  Not access to, but actual healthcare) as a right of every citizen whether they can afford it or not.  Most Republicans don’t and that is just the end of it.  They also have this crazy idea that the market place can provide more choice at cheaper rates than government health insurance.  This is a crazy idea because no country in the world does it, and we tried to do it for 50 years and were unsuccessful.  Oh, and let’s not forget that during this time Medicare has done it cheaper than the private sector.

But Republicans have another problem.  People want it.  They want their kids to be on till they are 26.  They want existing conditions covered, and they want (when they actually have to use it) plans that covered most things.  So sure you can have choice and young heathy people can get really cheap plans.  The rest of us are going to get gouged.  Here is the deal, and it is not ideology, it is arithmetic.  The only way to cover most people and make their plans affordable is to have a giant insurance pool.  Everyone has to pay in like automobile insurance.  Republicans simply aren’t going there.  Bottom line, there is no Republican repeal and replace Obamacare that will be better (except if you are rich or healthy).  It really is that simple.

So they will claim its better, with more choice, and everyone will have access to healthcare and it will be anything but better.  Sure you will have more choice if you are healthy or wealthy and sure you will have access, you just can’t afford that access.  Deregulation across state lines and removing requirements to actually cover fully typical  illnesses and injuries is not going to make it affordable for those who most need it.  You have to pay for what you want. Choice actually giving us viable choices is a zombie idea that has been around forever and keeps rising from the dead.

WAIT!  Tax cuts to save the economy!  When did that ever work?  Ronald Reagan did it and the deficit got out of hand.  He then raised taxes. George Bush 2 did it and the deficit got out of hand and where were the jobs?  George Bush 1 actually called the idea that cutting taxes will be fully funded by growth and tax revenue Voodoo Economics.  Just ask the folks in Kansas how that has worked out.  But here we go again with “dynamic scoring” and note they said that there would not be offsets*.  Just the magic assumptions about growth that no one thinks is realistic is going to pay for everything.  So here we go again with supply side economics on steroids and it has never ever worked.

Oh, and bullshit on the 15% max tax on business is just that.  The big guys don’t pay that now.  If it meant that everyone paid that, it might work, but it is just a massive giveaway.  And bring back into the country off-shored profits so they can now be taxed at a low rate or in a holiday most probably won’t create jobs.  It might just do the opposite and create investment for more automation.

If there were tons of pent-up demand (not just wanting stuff, but having the cash to buy it), it would certainly spur the economy.  But that is not where we are.  Most of the 99% are scraping to get by, kids going into debt to go to college, and retirement savings are non-existent.  So this is a giant give-away program (mostly for rich “job creators”) and we get nothing in return like an investment in infrastructure or our work force.  Here we go again.  The zombies just can’t be killed.

Republicans DO NOT HAVE SOLUTIONS FOR OUR FUTURE!  And there is no free ride.  Now we are recycling old ideas that have failed and never worked.  But ideology over common sense is what they are bringing us.  Economic inequality on steroids.

 

Another One of Those Flashing Lights We Are Ignoring

From the Atlantic Daily email:

The French Election: Far-right candidate Marine Le Pen and her independent centrist counterpart Emmanuel Macron advanced to the second round of the French presidential election yesterday. As neither Macron nor Le Pen is from a major party, the vote looks like a clear rejection of the political establishment; it also marks the decline of the French Socialist Party, whose candidate trailed far behind the winners. As the country prepares for the next round, Macron is expected to win by far—yet in expanding her populist party’s influence, Le Pen has already succeeded.

Let’s see, the establishment was rejected in Britain in the Brexit vote, the establishment (both Republicans and Democrats) was rejected in selecting that nitwit Cheeto-Head in the United States, and now the French have rejected their political establishment in both their runoff candidates.  There is something going on here and it is not what you think. It is economic malaise across the board.  The sad thing is that Brexit and Cheeto-Head were elected to attack the wrong targets, change and immigrants.  That is what Marine Le Pen is also running on, but the French may be way smarter than we are.  We will see in a couple of weeks.

Here is what I think, no, know what is going on.  Our economic system does not work for most of us anymore.  It has nothing to do with immigrants, or rapid change, sending jobs overseas.  Okay, they do cause problems, but easily fixable, and yet not much will change.  As long as the wealthy keep sucking up all the air in the room, nothing is going to get better.  That is what establishment politics has missed.

There is a reason for that. I will borrow here from Upton Sinclair via Paul Krugman, “It’s difficult to get a man to understand something when his salary depends on his not understanding it.” They are all part of the system that profits from wealth accumulation.  So they can’t imagine that our economic system throughout the world today is the problem.  They just want to tweak the system, which is why establishment politicians are being roundly rejected.  Nothing changes.

Anybody remember French economist Thomas Piketty?  Back in 2014 he was all the rage when he pointed out that our economics of wealth accumulation is maybe a natural outcome of capitalism and it usually leads to the decline and fall of empires.  He was attacked from all sides.  See Upton Sinclair’s wisdom above.  But Piketty’s data holds and we continue to concentrate wealth.  The chasm between the super rich and the working class is obscene.  There is no coincidence that the two most pressing threats to our survivability, global warming (because it is changing the climate and upsetting economies everywhere) and increasing economic inequality are both disparaged by Republicans.  They got theirs.

Yesterday, or was it Sunday, anyway I blog about what the Democratic Party needed to resolve, what are they really about.  Well the warning lights are on and flashing.  People are turning away from political establishments for new solutions to their problems because nothing ever changed.  The stage was set for the hucksters, Nigel Farage, Donald Trump, and Marine Le Pine, selling their fear, hate, and isolationism.  But they are not looking at the real issue, reinventing our capitalist system to more fairly distribute the bounty.  And that has to be the core of the Democratic platform.

That will be a tough message because the moderates do not want to hear it.  That is the Howard Dean crowd, and actually most of the establishment Democratic Party.  Hillary was the classic example. Even President Obama was an establishment Democrat when it came to economics.  None of them really wanted to take on a runaway economic system.  Bernie did and then he got slammed by Black Lives Matter about not considering their interests.  His first reaction was the same as mine, that economic inequality and making the system fairer includes blacks, women, gays, you name it.  But he was a savvy enough politician to try to bring them in.  But it is interest group pandering that gets us nowhere and generally doesn’t really change anything.

The theme that will create a new Democratic party is to recognize that economic inequality is the mother of all the other inequalities.  To start to share the wealth of our economy with all those that participate creates spending.  To do this means taking on the whole establishment.  But if you are seeing all the flashing lights, the establishment is being resoundly rejected.  We don’t need a more tweaked and refined establishment with better tactics and talking points.  They need to recognize that there is a new message altogether and start reforming capitalism.  If they don’t, it will not be pretty.  Brexit and Cheeto-Head were just the beginning.

Unaffordable Cities

I want to sell my vineyard and house and move into the city to simplify my life.  It is not happening.  I live on almost 22 acres of Sierra Forrest with 3 acres cleared for vineyards.  I sit on the top of a hill and can see the costal range from my patio.  The house itself is beautiful.  For what I can probably sell my house for, I can’t afford anything but a box in most cities in neighborhoods I want to live in.  The outrageous price of housing fueled by those who have bided up the market, leaves me out.  But forget me, what about all the people who must work in a city to make it work.  What do they do?  You know, teachers, policemen, firemen, waiters, cooks, sales people, government workers, you name it.  They commute.  They can’t afford the city either. Well that or they live stacked 5 to a room.

Remember when New Orleans Lower Ninth Ward flooded (Hurricane Katrina, 2005)?  That was where the working people had established homes they could afford, many passed down from their relatives.  Then came the “Republican” rebuild which was tax breaks and credits to developers.  To maximize profits, they did not rebuild affordable homes, they went after the super rich.  I am trying to make a point here and that point is that if you believe in Economics 101 and don’t consider how economic inequality has skewed the outcomes, you continue to craft solutions that feeds more economic inequality and that economic inequality pushes Econ 101 models further off the rails.

Enter the Republican Party.  The Republican Party believes in Econ 101 (James Kwak’s Economism) as though it were the revealed truth of God.  That theology goes something like this:

Both individuals and firms possess useful things of value, and they trade with each other in a “market” to get other useful things. Because nobody is ever forced to make a trade (in theory, at least), a transaction occurs only if it makes both parties better off. Under these conditions, prices naturally adjust until supply equals demand. The resulting set of prices makes everyone as well-off as possible. In other words, markets produce the best of all possible worlds.  In a competitive economy, prices automatically direct effort and investment where they can do the most good— a feat that no government agency can match.  Private property, production for profit and by private ownership, and regulation by a free competitive economy brings not only maximum prosperity, but also maximum freedom.”*

Many times you hear Republicans simply state that if you are going to restrict trade with regulation and taxes, you simply don’t understand Econ 101.  But this is perversion of Econ 101 taking perfect models into an imperfect world.  Oh, and it thrives because it serves the interest of a powerful interest group, Conservatives:

And while superficial economic arguments can serve multiple purposes, in today’s world they most often justify the existing social order— and the inequality that it generates— while explaining the futility of trying to do anything about it.

So they promulgate free market solutions for everything.  But real markets are very complex and the basic assumptions of the model, that “all suppliers offer the same product— there are no differences in features, quality, or anything else, and that each company is so small that its behavior has no effect on overall supply”, simply don’t exist.  And if these assumptions do not hold, assumptions “such as in the market for cell phone service, or air travel, or automobiles, or books, or almost anything— then supply and demand do not necessarily produce the optimal price, and the allocation of resources may be distorted.

My favorite example is global warming.  The solution is rules on CO2 emissions and a carbon tax to make less carbon producing products more cost effective in markets.  But we don’t feel global warming yet, or are just beginning too.  Markets don’t react because there is no demand.  Conservatives are against rules and taxes because it stifles the market place.  So government must come in and take appropriate measures to change the dynamics of the market place to deal with the future threat.  Conservatives respond by denying science.  So here is a case where unless government intervenes, markets look for the cheap solutions, coal and other carbon producing products, short term solutions that could have disastrous impacts on our future.

And my point here is that the demand is not homogeneous either.  As economic inequality increases, the wealthy create market places the bottom 99% cannot participate in.  What may only be worth $20 to an average citizen (the amount they are will to pay for say a tee-shirt) could be bid up by the wealthy who are willing to pay $100.  That is exactly what has happened in our cities.  And we are going to kill them because the people who make cities work, can’t afford to live there anymore.

Now if you look at the healthcare bill the Republicans are proposing that is full of “market-based solutions,” what you find is a bill that transfer wealth to the wealthy**.  In other words, these simple minded free market solutions don’t work as advertised, generally just benefit the wealthy, and in doing so increases economic inequality.  And this economic inequality further fractures Economism models the Republican push as gospel.

Economic inequality is the issue of our times.  Conservatives spout Economism to justify everything, and nobody challenges them***.  Even our media has swallowed this belief in markets whole.  Markets do the best job when they are properly controlled and regulated.  Economism argues against this regulation and makes the wealthy wealthier which is why they promulgate it.  But markets do operate on rules, that includes property, copyrights, contracts, disputes, and on and on.  The rules in effect today favor wealth accumulation for the few and what few mean by freeing the market place is to keep their rules.  Isn’t time we started to address this before we have a “Let them eat cake moment”?

*Most of this discussion and all the quotes comes from Kwak, James. Economism: Bad Economics and the Rise of Inequality. Knopf Doubleday Publishing Group. Kindle Edition.

**As I have argued before, healthcare is not even close to a normal commodity and if President Cheeto-Head was going to cover everyone, as he promised, that simply eleminates free market solutions given the reality of economic inequality and the fact that young consumers are completely different from either older consumers or people with pre-existing conditions.  And one other thing to note in the world of double speak.  When conservatives change cover everyone to everyone will have access, that is totally different.  I have access to the best healthcare in the world.  I simply can’t afford it.

***See my blog Challenging Republican BS

The Real Fight Finale

A continuation of the discussion in The Real Fight, and The Real Fight Part 2

The current political situation is in chaos.  Democrats were shattered in the last election and Republicans have a leader that is certainly not a Republican, but a populist with Republican leanings.  There is all kinds of nationalism and autocracy in play on the Republican side besides the economic arguments.  But the Nationalism and autocracy that is part of Steve Bannon’s philosophy are really a harking back to times that no longer exist.  Democrats see a more integrated and diverse society whereas Republicans see chaos if the old order is not restored.  But Trump won on the economic argument as reliable Democrtic working class voters bought into Donald Trump’s lies about restoring jobs and renegotiating trade agreements.  Democrats are navel gazing right now trying to figure out what went wrong.  Sadly a lot of this discussion is about listening and engaging more with the white middle America and sounds an awful lot like pandering.  “Well after all Hillary did win the popular vote.”  Frank Bruni put it this way this morning:

Have Democrats learned and implemented all the right lessons from Trump’s victory and from the party’s brutal fade during Barack Obama’s presidency? As the race for the D.N.C. chairmanship lurches toward its conclusion later this month and as Democratic lawmakers sweat the smartest strategy against Trump, I wonder. I worry…They routinely remind me and reassure themselves that Clinton won the popular vote and that if you subtract James Comey, Julian Assange and Vladimir Putin, she might have triumphed as well in the Electoral College, where Trump prevailed by just 77,000 votes…This is no moment for mere tinkering, and the party can’t afford the internal divisions on display in the D.N.C. race. After Joe Biden endorsed Perez last week, Bernie Sanders, who supports Ellison, shot back, “Do we stay with a failed status quo approach or do we go forward with a fundamental restructuring?”

Timothy Egan put it this way on one Saturday:

The way out is not that difficult. Yes, they should engage in hand-to-hand combat in the capital. And certainly, Democrats must turn to the courts when the rule of law is broken. But they have to be for something, as well — a master policy narrative, promoting things that help average Americans. The old Broadway adage was how it will play in Peoria. For Democrats, they should think of Joe Biden’s Scranton, Pa., every time they take to a podium.

My point is that we have to take on all Republicans, not just because they are supporting Cheeto-Head, but more importantly because they have their economics wrong, and with that, just about everything else.  Their brand of the Fifth Freedom (freedom of the market place) is tainting everything and as we get the economics wrong, the world is ripe for Trumps and blaming which leads to all the racism, nativism, xenophobia, and division in this country.  Democrats need to take on the Republican ideas about the economy and change the narrative around the Fifth Freedom. Just being against Cheeto-Head won’t change anything (see Hillary’s campaign). Thankfully James Kwak came along to do that for us.  So I am going to give you a short couple of paragraphs course on where James took us in his book, Economism:  Bad Economics and the Rise of Inequality.  I really recommend you read it.

His basic premise is that the lessons we learned in Econ 101 about supply and demand (In a competitive economy, prices automatically direct effort and investment where they can do the most good— a feat that no government agency can match) are models and concepts in a perfect system that do not apply when markets aren’t perfect and the players aren’t rational.  Or said another way, welcome to the real world.  It is just a logical construct that needs to be adapted to real world complexities.

Here in his own words is that premise:

This invocation of basic economics lessons to explain all social phenomena is economism.  It rests on the premise that people, companies, and markets behave according to the abstract, two-dimensional illustrations of an Economics 101 textbook, even though the assumptions behind those diagrams [supply and demand curves] virtually never hold true in the real world…And while superficial economic arguments can serve multiple purposes, in today’s world they most often justify the existing social order— and the inequality that it generates— while explaining the futility of any attempt to change it.

…the conclusion that we must accept [according to economism] is that the world is as it is, because our attempts to make it better are doomed to fail…[we need] only to accept the principles of Economics 101. This makes economism a supremely convenient tool for the 0.1 percent, the perfect comeback to the Occupy Wall Street protesters. You understand why well-meaning do-gooders want to make taxes more progressive, subsidize health care, provide free higher education, and regulate Wall Street. But they simply don’t understand economics.

…My goal is not to show that one side is right and the other is wrong, but to demonstrate that an unwavering adherence to simplistic models has had a pernicious impact on debates and policies that affect hundreds of millions of people. Most of the time, that impact has the effect of increasing inequality or legitimizing the inequality generated by our economic system.

It is a self-serving philosophy for the conservatives and you hear them argue it every day. Professor Kwak then presents Econ 101 basic concepts and then annihilates them in the real world. Real economists, not shills for the status quo, believe in markets in general, but “they are continuously identifying instances of market failure and then designing government policy responses that can make these markets work better (Mark Thoma).”  See the tension here?  Conservatives and many Democrats who bought into this stuff, want government out of the market place (the Fifth Freedom) and they use Econ 101 arguments (Economism) to show that the government will only screw it up.  The reality is just opposite, but it is complex and most of us don’t do complex.

A great  example of he application of Economism is to the arguments around raising the minimum wage.  In the perfect world of Econ 101, markets find the right price to employ the most people.  Using supply and demand curves you can argue that raising the minimum wage (government interference) simply results in some getting higher wages, but fewer employed.  On the other hand the real result in the real world is a mixed bag depending on many other factors.

Take a store like Starbucks. Most of its clients are affluent and are more than willing to pay the few cents added to their cup of coffee for passing that wage hike onto the customers.  And in instances where it does cause a decrease in employment, it raises many more out of poverty.  So unlike conservatives who believe it is an open and shut argument, it is really a complex issue. Note President Cheeto-Head (Lord Commander Marmalade from Trae Crowder) has told us he is against minimum wages all together.  That is where Economism will get you.  The market will find the right wages to emply the most people. Slaves worked out so well for the South.

Healthcare is my favorite, as Paul Ryan was out spouting all the Economism arguments that the free market would provide health insurance tailored to the individual needs of the market place at the most reasonable price.  Choice and competition became the magic words that would end all our health care woes. Just get the government out of it. There is only one problems with all this.  Reality tells us that health care does not behave like any other market.  We do not incur medical expenses regularly, and we don’t have the medical knowledge to decide the best course for our own care.

The Economics 101 model in which financial incentives turn people into discerning consumers turns out not to work in the real world.”  And here is the thing, before Obamacare we had a system that did not work.  Were we paying attention?  I could make arguments that the business model for Health Insurance companies make them the customer to be served, not the person needing health care, but you get the drift.  In a perfect world it might work, but in our world, every other country has seen the light and moved to single payer systems while we still make Economism arguments.  These systems are not perfect but they provide universal care at a cheaper cost and with better outcomes than our system.

Anyway you get the point here.  Economism arguments make perfect sense and appeal to all of us, but then when applied to reality where the complexities of the markets are not examined, in many cases they give us just the opposite answer to what will actually work.  Professor Kwak takes us through Supply Side economics, free markets in the banking industry, and free trade to show how the arguments of Economism fail, yet we continue to buy into them for simple answers.  Again I have a favorite and that is free trade.

Economism will tell you that international trade simply is a win-win. There is a thing called the theory of comparative advantage which I am not going to go into here, but it basically shows that in the aggregate, trade is always good.  But we just had an election where trade agreements became the bogey man.  Conventional Republicans are free traders (as are many establishment Democrats) and Trump and Bernie were very popular being against it.  So what gives?  Well two things.  First, as always reality is more complex than theory.  If you look at NAFTA, in the aggregate we gained, cheaper products and more trade increasing net GDP.  But the local effects were horrendous, with a loss of jobs in the portion of our population with blue-collar workers, and the least likely to find new work.  In a word, it increased economic inequality.

When a rich country like the United States increases trade with a poor country, some industries will lose jobs because of competition from cheaper foreign labor. This can mean concentrated layoffs in specific sectors, as has happened to American manufacturing. Although those job losses may be balanced by gains in other parts of the economy, longtime assembly-line workers at automotive parts manufacturers in the Midwest cannot easily get hired by New Jersey pharmaceutical companies or Silicon Valley software firms…Within a rich country, in short, the primary winners are people who are already well-off, and therefore one result of increased trade with poor countries is greater inequality within the U.S. workforce.

Then there is the China effect:

“The reality of adjustment to the China trade shock has been far different. Offsetting employment gains either in export-oriented tradables or in non-tradables have, for the most part, failed to materialize.”…the fact that the U.S. economy has adjusted to Chinese competition so slowly and imperfectly calls into question the simple case for free trade.

In other words we get and buy into the Economism arguments and then reality tells us it is a much more mixed and complex picture.  The Establishment, both Democrats and Republicans were supporting trade agreements on Economism arguments when the people rebelled.  And that is the lesson I am trying to get across here.  The problem is not the man, Donald Trump, although he is a true threat to democracy.  The problem is that we as Progressive and Democrats have not challenged Economism as it has been applied to almost every political argument we see by conservatives and are winning those arguments.  Instead, every time Democrats have a big loss they start pandering to kinder gentler Economism.  It is time to take these ideas head on and fight them on the ideological battle field the conservatives have set up and are winning.  It is only when we finally expose these falsehoods and complexities can we progress.

Thank you James Kwak for taking us on an ideological journey to show how we have been duped.

 

The Real Fight Part 2

In the last installment, I pointed out that the Four Freedoms established by FDR held sway with the idea that government’s role was to secure these four freedoms.  But the New Deal got in the way of businesses and corporations, not to mention the wealthy, who have always hated government intervention in the market place. See FDR’s “They are unanimous in their hatred of me, and I welcome their hatred“, 1936 speech.  The reality is that that hatred never ended and around the early 60’s the conservatives representing wealth and business glommed onto a fifth freedom and an ideology to promote it.  That freedom is the freedom of the market place and your right to accumulate as much as you can without interference of  government.

Also note that are really only two ideologies competing here, Progressive and Conservative.  You have the Tea Party and the Trump rubes, but they basically bought into the conservative ideology (including conservative social ideology) and then revolted when those ideologies did not deliver.  They are basically the ignorant and misbehaving children, the result of 40 years of misinformation, but they are not a separate ideological movement other than to break things.  They are still buying conservative ideology at the heart of their discontent (“Donald is a businessman and knows how to run things”).  The establishment Democrats went Conservative Lite which will be discussed below, and is why the Party ended up in the toilet this election.

I am going to use two books as essential references here.  The first is by Thomas Frank, Listen, Liberal: Or whatever Happened to the Party of the People.  In this book Frank takes us on a journey of how the Democrats lost their way, became Republican Lite and bought into much of the ideology that wrote off those left behind by globalization and technology. Note, I discussed some of his findings in my blog Post Listen Liberal Thoughts.

The second book is a really, really important one written by James Kwak, Economism:  Bad Economics and the Rise of Inequality.  In this book, James Kwak traces the conservative ideology of using basic economics concepts (Econ 101) to over simplify and justify their ideology called the Fifth Freedom*, freedom of the market place. Then he takes them apart and in the process offers an argument to begin to building a counter logical construct to undo years of inculcating the fifth freedom with oversimplification of Econ 101.

Okay let me take you on a journey.  First let’s ask the question what happened to the Four Freedoms and the New Deal?  Frank takes us on a journey through history showing how Democrats, in the 70s and particularly after Reagan and Bush I, brought us the new “improved” Clinton Administration that was leaning right toward the Fifth Freedom.  In other words, we had bought into the Fifth Freedom as overriding the other four.  Both he and Professor Kwak described how Bill Clinton took us on the free market journey by being the “other free market party”, including the religion of reducing budget deficits, ratifying NAFTA, enacting welfare reform, cutting capital gains taxes, repealing the Glass-Steagall Act, and signing off on the non-regulation of derivatives.  This has effectively been carried through the Obama years as an ineffective “me too” policy with caveats. We had bought into the idea that Econ 101 explained the markets and we should be more sympathetic to it as the market will save us.  As James Kwak described it:

We also love markets, only we want to make them work even better by correcting for “market failures.” One story is simple: freedom and competition create prosperity; government intervention kills jobs (Republicans). The other (Democrats) is complicated: government programs are necessary to fix market imperfections.

Frank introduces us to our (Democrats) own version of the market place ideology when we, like Republicans started to blame the victims to effectively ignore them.  Republicans have taken on the  ideology of the market place as the adjudicator of justice (social and economic) and those who fail, well, they did not work hard enough or were lazy.  In other words the poor are poor for a reason and to help them upsets the fairness and balance of the market place and hurts all of us.  In the market place mentality, it gives them all the wrong incentives.  The Democratic version of this is that only through economic growth can we all prosper and the answer to that is similar to the Republicans with education thrown in:

that economic justice only comes about through economic growth, and therefore the primary duty of anyone who wants to tackle inequality is “to create a nurturing environment where business leaders and entrepreneurs want to locate and expand in which prosperity arises from higher education and the knowledge-based industries that surround it.

People who are left behind, get left behind because they fail to adapt to globalization and technology.  They did not retrain. They aren’t part of the “technology corridors” and it is sad, but too bad. Globalization and Technology advancements are just realities and we have to accept them. We need to solve all these problems with more education (We have heard this from both Clinton and Obama).  That fell on deaf ears in the last election.  The point I am trying to make, that the authors made, was that we assumed a market model for success that buys into the Fifth Freedom, freedom of the market place to be free of government intervention. That produces the best of all possible worlds. The Democratic establishment has turned away from the working class using a system of education, innovation, and entrepreneurship to justify winners and losers instead of still representing those that got left behind.  The major difference was that the Democrats offered a kinder gentler meritocracy system than Republicans.

Okay a little summary here and then I will try to present Professor. Kwak’s insights in The Real Fight Part III.  At the end of WWII we were strongly in the New Deal camp where government had a strong role in making the economy work for everyone.  But that journey definitely ended in the Reagan years where we had bought into the philosophy of supply side economics (more on that next), and government is the problem. Democrats went Republican lite and all of this is underpinned by an interpretation of Econ 101 and supply and demand curves in a perfect world.  In fact, as Professor Kwak will show us, they give us very false results, yet we have come to accept them almost without thinking.

So when we started out we had the Four Freedoms, secured by our government.  Where we are today is that the Four Freedoms have been supplanted or at least over ruled by the Fifth Freedom, which is now being applied to social policies to say government has only a small roll.  Stay turned to this space.

The Real Fight

I have said many times, Republicans have almost everything wrong. We are in a world where diversity and opportunity are what make America exceptional, and they seem to be hell-bent on killing both.  Of course if you asked them, it would be just the opposite.  They believe in all of those, they are just implementing policies to help both, except they don’t.  That is where the alternate reality comes in.  They have to live in one in order to continue their policies to free the market place and reinstate the entrepreneur as king and believe they work.  They do work in one way. For the rich and wealthy.  For those who already have a strong foothold on prosperity.  But in the real world, not their gated community, their policies fail miserably.

Now there all kinds of forces that have played into their hands.  The feckless and timid Democrats who weren’t sure what they believed and kinda sorta bought into the whole entrepreneur thing.  There were middle American Rubes who knew they were being left behind and got mad as hell.  There was a 50 year Republican effort to push an ideology about the market place which lined their pockets and in the last 40 years, a real effort to discredit real news and facts. When things crashed in 2008 and 2009, they doubled down on their fantasy world, and it really help that we elected a black man.  They could then use fear and racism as the ultimate tool.

One might ask, why science and global warming.  Because people who relied on science and data to make decisions were dangerous to them.  Their first thrust was to create think tanks that twisted the data (selectively screened the data).  But when reality creeped in, they had to sully science and data itself.  President Cheeto Head claims Global Warming is a Chinese plot.  Of Course the Donald was not part of their game plan. He was what happened when all the reality of what conservatives were up to, taking care of the rich, sunk in, and facts did not matter anymore.

So the current state is basically a Republican Party that is holding its nose (or pandering themselves into oblivion) tolerating a basic madman who is feeding the base what they want, with no real ideological foundation of his own (See 3 a.m. call to General Kelly about whether we need a strong dollar or not).  What the base wants is a list from the campaign that will not only damage the Rubes prospects, but hurt our country.  Republicans apparently don’t care because they think they will get their conservative dogma (and social conservative dogma) enacted and life is good for the wealthy getting wealthier.

So Trump is really a side-bar to the real divide in the country.  He is in charge now because people don’t think, but the basic battle is around freedom of the market place, that fifth freedom I (and Professor Engels from SMU) identified in my blog, One Day University, is what is really what this is all about.  A short summary here:  Freedom is the driving word we use to demand what we want.  But we don’t define it.  FDR did back in 1941 as freedom of speech, religion, freedom from want, and freedom from fear.  He saw the government stepping in to secure these freedoms.

A Progressive will tell you that these four freedoms, if you believe in them, say that we need to make sure everyone who wants to work can, that they can make a living wage, and secure health care.  Freedom of Speech, other than from Donald Trump, is not really contested.  Freedom of religion is contested because some have assume that their freedom to worship God entitles them to discriminate against those who don’t share their beliefs. But that impinges on other people’s freedoms.  Freedom from fear is everything from freedom discrimination o freedom from attack domestically or from a foreign body.

The interpretations of these four freedoms and those meanings have held sway after WWII until the early 60’s when Businesses wanted to end the interference of government in their affairs to secure the four freedoms and formed an ideological front to build a conservative economic movement that said that the best way to secure these freedoms in the real world is through the market place, and government interfering in the market place simply hurts the ability of the market place  to provide prosperity for the most people.

So here is what this blog and next one is about, the war for our minds.  What is freedom and what is obtainable, and how should government play in this game?  We are going to start from the mess we have today which I will call the five freedoms, the four FDR gave us and their progressive meanings, and the fifth freedom, the one conservatives are demanding, defined as freedom of the market place, or the freedom to acquire as much as you want.

Here is what I hope to accomplish.  First assuming all the freedoms are legit, how they might clash with each other?  In particular how the view of the freedom of the market place clashes with the other four freedoms and defines them in ways not meant by FDR.  The second part is to look at the fifth freedom and see if maybe the our whole construct of how the market place is warped.  Stand by.

 

 

Circling the Drain

What Me Worry?

No not us, Trump.  Yesterday was truly a bizarre day in insanity and incompetence.  And I use neither adjective hyperbolically. I used to think Trump wanted his son-law as an advisor because that is one of the few people he trusts.  Now I know that is only part of it.  He is also there because the family knows Trump is insane.  It will only be a matter of time till he has to be removed.  Maybe they will let him keep his Air Force One Jacket.

It was amazing to see Republican apologists explaining that he is just getting used to the job or some other such nonsense instead of seeing insanity and incompetence on full display.  People who think Trump is smart should be having second thoughts right now (assuming they have thoughts at all).  Let’s just take a stroll down memory lane (yesterday).

First of course, there is Crowd Gate where the reality does not meet Donald Trumps Fantasy World (FW) view of his worshipers.  He actually called the head of the park service to demand new estimates (CNN).  A smart person would have let it go so it does not get repeated over and over again that the White Aryan Nation is smaller than Donald thought.

Second, we have Vote Gate.  Of course he won the popular vote in his FW.  But in FW, the numbers were skewed by 3-5 million illegal aliens voting all for Hillary.  He actually said that.  What he confused (smart man?) was the numbers of probably dead people that have not been purged from the polls and the numbers of voters that are registered in more than one voting district.  (NYT)

It is common because the first thing the bereaved family does not think of is we have to get our loved ones off the voting rolls.  And the first thing I do when I move is not call the other district and tell them I moved. Now there is nothing illegal here, the polls are routinely purged of these non-voters and as noted, his daughter (they denied that before someone actually looked at public records) and his chief strategist are also guilty of being registered in two places.  There is no voter fraud here and states under even Republican control report miniscule voter fraud.  But we are going to have an investigation, even though he won and maybe with a recount he won’t.  Yeah really smart guy.

But there could something very troubling here in the guise of investigation which is really autocracy at work.  As the NYT tells us:  “The fear is that the hunt for illegal voters will become a pretext to tighten ballot access requirements nationwide and bar many minority voters who tend to side with the Democrats.”  No doubt there.  It has been what they have done in Red States now for years and the Supreme Court let them do it.

Okay, now we get to the Wall, Wall Gate.  You remember.  The one the Mexicans are going to pay for and it is going to be really really big and beautiful, and it is not going to be a fence, but a wall.  We are going to make those East Berliners wish they had their own Donald Trump.  It will be better than the Great Wall of China.  Now I know something about building fences along the border because the company I consult for has won a few contracts to build them.  They are not cheap, nor are they easy.  So the first issue is money and that is where it gets interesting.

“Whose gonna pay for that wall!  Mexico!”  So Mexico’s President is coming and Trump, the great negotiator (TGN), tweets out, “of jobs and companies lost. If Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting.”  So the Mexican President cancels the meeting.  Of course our ego challenged Dear Leader (TGN) tells us that they both decided to call off the meeting which is a transparent lie. TGN just got stiffed by the Mexican President.  How dare him!  So here comes the 20% tariff threat on all goods from Mexico.

Now unless you are brain-dead, American taxpayers pay the tariff in higher prices, so who again is paying for the Wall?  As one Mexican commentator pointed out, even the Super Bowl will get more expensive when you see the price of avocados. Then when that reality sunk in, there was all kinds of backtracking.  It was just an idea!  Meanwhile that opens up all kinds of questions about this whole idea of bilateral trade agreements versus multiple partner deals and has many asking if the whole idea of Trumps bilateral deals make any sense whatsoever.  They don’t of course which is what over 75 years of history has shown us.

Feel like you area ricochetting  bullet?  Wait, it gets better.  TGN’s use of his unsecured android phone is a massive security leak.  Umm, did not he and the Republicans run on attacking Hillary for her security lapses?  Oh wait, that was Hillary.  TGN is above all that.  And let’s not overlook the Republicans purge at the State Department yesterday asking senior (non-political) experienced hands to resign (CNN).

And finally we have his Chief Strategist, Stephen Bannon, at his request met with the NYT times to tell them:

“The media should be embarrassed and humiliated and keep its mouth shut and just listen for a while,” Mr. Bannon said in an interview on Wednesday.

“I want you to quote this,” Mr. Bannon added. “The media here is the opposition party. They don’t understand this country. They still do not understand why Donald Trump is the president of the United States.”

Oh, they get it Mr. Bannon.  They did not cover his lies enough during the election and raised a false equivalency between TGN and Hillary and now they are reporting the facts and you do not like it.  1984 anyone?

So here we are.  The incompetence and insanity are on full display and still no one wants to say the obvious yet.  Even worse, or better for Progressives if we survive this, the Republicans have seem to throw off any semblance of adherence to Republican ideals to follow this nut cake.  May they all sink in hell.  The clock is ticking.  I used to think he would not make it till June, but I am thinking late March now. Really we have elected the village idiot and the old saying from Alfred E. Neuman, What Me Worry, seems to be the Republican Mantra right now.

One last thought.  The Democrats except for New York Senator Kristen Gillibrand have been voting to confirm Trumps cabinet appointees.  The logic goes that they are the best they are going to get.  Well here is some logic Democrats:  If you approve them, you own them.  Donald Trump is insane and incompetent and you are enabling him by legitimizing his government.  Walk away.  They have the majority and will get their people.  Your job is to show your disapproval of his whole government.  You can call you Senator by dialing 202-224-3121, you can also find their direct number here.  I tried to call Diane Feinstein who has approved all of them, but her line was jammed.

The Facts Ma’am, Just the Facts

You remember Dragnet’s Joe Friday right?  So let’s just take a second from the insanity of Donald Trump and his Executive Orders, and let’s look at his alternate facts (lies) they are based upon.  So here are the big ones from the campaign and recently:

  • Voter Fraud is out of control – “President Donald Trump asserted in a private meeting with congressional leaders Monday night that he would have won the popular vote in the 2016 election if 3 million to 5 million immigrants living in the country illegally hadn’t voted.” (PBS) Then he change his claim and tweeted:  “”I will be asking for a major investigation into VOTER FRAUD, including those registered to vote in two states, those who are illegal and….even, those registered to vote who are dead (and many for a long time).” (The Hill)
  • Torture Works – “I have spoken, as recently as 24 hours ago, with people at the highest level of intelligence and I asked them the question: does torture work?” he told ABC reporter David Muir. “And the answer was: yes, absolutely.” (Daily Beast)
  • Unemployment is really bad – “During the campaign, Donald Trump called the official unemployment rate published by the Labor Department “such a phony number,” “one of the biggest hoaxes in American modern politics,” and “the biggest joke there is.” He variously described the real rate as 18, 19, 20, 21, 22, 24, 25, 28, 29, 30 and 35 percent. In August, he told “Time” magazine that the “real unemployment rate is 42 percent.” (Chicago Tribune)
  • Our Economy is in the Dumper – We’ve made other countries rich while the wealth, strength and confidence of our country has disappeared over the horizon,” he said. “One by one, the factories shuttered and left our shores, with not even a thought about the millions upon millions of American workers left behind. The wealth of our middle class has been ripped from their homes and then redistributed across the entire world.” (Politifact)
  • Illegal Immigration at the Southern Boarder is out of control (Note: out of control comes up a lot) – “For instance, we have to listen to the concerns that working people — our forgotten working people — have over the record pace of immigration and its impact on their jobs, wages, housing, schools, tax bills and general living conditions.” (NPR)
  • Crime is out of control – “Crime is out of control, and rapidly getting worse. Look what is going on in Chicago and our inner cities. Not good!”  (WPO)
  • Oh, and Muslim Immigrants are a Terrorist threat (we have no effective screening) – “During the campaign, Trump proposed an all-out ban on Muslim immigration (“a total and complete shutdown of Muslims entering the United States.”) He also called for a domestic Muslim registry. Toward the end of the campaign, that pledge was tweaked—a seeming concession to the fact that a religion-based ban would clearly violate the Constitution. The pledge was changed to simply restrict all immigration from “terror-prone countries,” which is precisely what is now being proposed.” (Slate)

Okay, I have made the point that these are the things he believes in his own words.  They are all wrong and easily fact checked.  Sadly this is what his supporters believe and while there are some nuances (described below) these “alternate facts” are what bad and potentially disastrous policies are based on.  Here are the details and note I am just going to make a general statement and send you to a reliable fact check site that has the data:

Voter Fraud – Non existent in any numbers to even be concerned about.  Sure there are dead people registered to vote, because when you die, you don’t call up the country office and announce your death and neither do close relatives.  And if you have ever lived in two different voter districts, you too may be registered in two or more places.  None of it is illegal and there is no data to show that dead people or double registered people ever voted (or voted twice).  Most “voter fraud” is a weakly disguised try to remove eligible voters from the roles.  (USA)

Torture Works – On this one the best source is the Senate’s torture report, which President Obama refused to issue the un-redacted report. In it, it pointed out that the reliability was highly questionable, could have been gotten by other more reliable means (and was), and most of the information they pretended they got from torture was actually obtained by the FBI before the CIA started torture. So basically unreliable, counterproductive, and immoral, but we need to start it up again. (Guardian)

Unemployment – This one is more nuanced, but still you have to wonder.  The real unemployment must count ” the officially unemployed and the discouraged but people who have part-time jobs but wish they were working full-time. This number, currently, is 9.7 per cent, which is high, but nowhere near as high as Trump’s “close to twenty per cent” or even the “eighteen to twenty per cent” he cited in his Presidential-campaign announcement speech, last year.” (New Yorker). And clearly the recovery from the recession has been slow and new jobs created do not necessarily pay the premium wages that lost manufacturing jobs do.  But is Trump really offering anything to fix that?  Well cutting taxes and reducing regulations has not helped in the past, and the growth he predicts is fantasy.  (NYT) See below on how the overall economy has actually performed under Obama. The biggest job creator would be a major infrastructure bill, but if it is all smoke and mirrors (tax cuts and credits), not so much.

The Economy – What can I say?  Here is the reality (Factcheck.org):

Sure wages have lagged and economic inequality has increased.  What is the Donald doing about that?  Flow down?  We actually have not had an honest discussion about automation and Globalization and if you think cancelling trade agreements is going to solve the problem, well you and the Donald are cruising the same wave that is about to hit a wall. (CNN)

Illegal Immigration – Well on this one, it is a total fantasy.  Net immigration from the southern border between 2009 and 2014 was negative, more people leaving than coming.  And only half of illegal immigrants are Mexicans (Pew).  Do Mexicans hurt the economy?  No they do not.  They pay taxes, they do not use more services than they pay for, and they do not in the most part, lower wages (Mic).  Sure we need immigration reform, but a wall is just a joke.  There is the claim it will stop the import of heroin.  What part of supply and demand do not Republicans get.  Price goes up and the demand will drive more ingenious ways to get it here.  Maybe Trump all to think about demand, not supply

Crime – Nope.  “According to FBI data , the national violent crime rate last peaked in 1991 at 758 reported violent crimes per 100,000 people. In 2014, the latest year for which full data is available, the rate was 366 per 100,000 people…”It is a mistake to say crime is out of control and rapidly getting worse,” Darrel Stephens, executive director of the Major Cities Chiefs Association, told AP. “We do have increases in many cities and it should be of concern to people, but the rate is well below the early ’90s when it was at its peak.” (AP) So what about Chicago?  We would send in the Feds?  How is that going to help especially from the people who believe the Feds screw everything up?  “Experts in violence prevention agree that suppression, punishment and Trump’s punitive approach are insufficient to address criminal groups and activity. As David Kennedy, director of the National Network for Safe Communities at John Jay College of Criminal Justice, argued in a piece for Crain’s Chicago Business, “No thinking police leader wants to go backward; the field has fully taken on board that locking up and locking down minority neighborhoods is disastrous, and that there is simply no alternative to building new relationships with angry communities.” Suppression tactics need to be integrated with social interventions including job training and placement, medical care and support networks.” (CNN)

Muslim Terrorists – First, immigrants, Muslim or others commit far fewer crimes than their American born counterparts. (Atlantic)  Second, Americans have committed 80% of terrorist attacks since 9/11 and since 2001, 12 refugees have been charged with terrorism-related crimes compared to 346 American citizens charged with the same crime (Vox). Finally, are probably banning refugees (If You bomb it you must ban them) from the wrong countries. “The San Bernardino shooting that killed 14 people was carried out by an American-born US citizen of Pakistani descent and a lawful permanent US resident of Pakistani descent. The Orlando nightclub shooter who murdered 49 people was an American-born US citizen of Afghan descent. The Boston marathon bombers, who identified as ethnic Chechen, came to the US from Kyrgyzstan and grew up in Cambridge, Massachusetts, before carrying out attacks that left three dead. The militant who killed four Marines during a shooting spree in Tennessee was a Kuwaiti-born US citizen whose parents were Palestinian and Jordanian.” (Vox)

So, the bottom line is the world is a complex place and our Dear Leader has no clue what is going on, and he has the wrong solutions.  But as I noted yesterday, he continues his attacks on all the media, except his buddies Fox.  He is mad in an insane kind of way and all that is required is a little fact checking.  But then simple solutions and Executive Orders won’t solve complex problems. That simply does not work for Trump and his voters.

TPP, Normalization, and Other Topics

I turned on the TV this morning as I do my crunches and other exercises to distract myself from the fun on the floor.  I watched MSNBC, while pointing out the lying from the White House, let Republican apologists come in and spin it as learning curve and try to normalize what they did.  Here is where the Press Corps still has not learned their lesson.  They still think they can allow alternate points of view to be broadcast when you have the facts to say, no that is a lie.  Somehow most of them cannot bring themselves to call out a lie, afraid to be either rude, or not fair and balanced.  And when they do the other side uses rudeness as Kellyanne did on Sunday, to outshout them.  Until our media learns to turn them off when they take over the microphone, they win.

Okay, TPP.  Trump signed an executive order today to withdraw from the negotiations.  Yeah team. Not so fast.  TPP served two purposes, one, the obvious, was a trading agreement.  The other was really a treaty agreement that binded Pacific Rim countries together in a trading block to ward off the Chinese.  So China will fill the void.  Now some Democrats are celebrating, but they should not have been.  The TPP as it was negotiated in secret by the Obama Administration and mostly by industry representatives, was certainly flawed, and on my scale of good or bad, it protected too much wealth transfer to the rich.  But it also had important environmental and worker protections in it.  So what needed to happen was to renegotiate it to make sure that all of us benefited, not just corporations.  Just as an aside, the “Fast Track” vote was a gross mistake and in the end, failed also.

Instead, it is gone, and that will leave the U.S. To negotiate with individual countries.  Two problems.  First do you really think with the line up of Wall Street in the Cabinet, it is going to be negotiated to protect the environment or workers rights?  Second, as countries negotiate their own deals with China, our influence in the region wains.  In the same way, Trump signed an executive order to start negotiations on NAFTA.  Again, do you really think the boys and so far no girls in the Cabinet are going to do anything but increase profits for themselves?  Be careful what you wish for.  The world is not that simple.

There are going to be more and more things to write about, and I think they will overcome us.  I think the best I can do is try to pick out the really big ones and try to write about them.  This weekend’s lying from both the President and the White House, followed by Kellyanne’s alternate facts is extremely important.  Once we no longer trust government to tell us the truth, our institutions are all are risk.  That is exactly what this was all about, a fight over who defines reality.  It is time for our media to step up and so far they have failed to do that.  If they don’t, there is little hope that the lies will not become reality to Trump supporters.  And our government no longer looks like anything we recognize.  The real problem is that when reality hits this Administration in the nose, it could be violent.  Our media needs to step up and do its job to prevent riot in the streets.

Oh, and one think I forgot.  I guess you saw McCain, Graham, and boy wonder, Marco Rubio, caved on Tillerson.  There are no values anymore, just ways to ensure you stay in power.