Posts tagged ‘economic inequality’

Two Things

I guess you could say two things that I think really count. I could write about the chaos in the White House where we find nepotism gone awry, but that is being adequately covered. I could write about “white lies” (Hope Hicks) and her failure to answer questions that the Republicans will just blow over and now her sudden departure.  But the media is all over those items.  Guns are getting crazy, but the kids from Parkland may be taking them on and it is spreading, and guns are just the tip of the iceberg. We may have reached a tipping point and not just in global warming. See where Dick’s Sporting Goods saw the light? Walmart is now right in there. So I am going to write about two of my favorite not so headline issues, the economy and religion, and note that both issues are fraught with hidden bias.

Let’s start with the easier one, economics. Paul Krugman wrote a blog (NYT took over his blog as I guess they want to own everything he says) about what we all know to be true, the tax cut was is not a flow down to workers. That effect is negligible, most of the money is being used for stock buybacks, not investment in capital, and was as we knew it was, a big corporate give away.

The numbers we have so far show that the much-hyped bonuses are trivial – less than $6 billion, or 0.03% of GDP – while stock buybacks have been more than $170 billion. And many of those bonuses would probably have happened anyway, whereas stock buybacks are running far above historical levels.

But he made a very easy to follow (which for economists is rare) argument about how the economy works with tax cuts and the simplified model goes like this:

Whatever the number [salary increases], however, it’s about the long run. It requires a chain of events: lower taxes -> higher investment -> higher stock of capital -> higher demand for labor -> higher wages. And this chain of events should take a number of years, probably decades, to fully work itself through. Even in the most favorable analyses, there is no reason to expect any wage gains in the first few months after a tax cut.

And note this caveat: “How much of a trickle-down effect depends on a bunch of technical factors: what share of corporate profits represents monopoly rents rather than returns to capital, how responsive inflows of foreign capital are to the U.S. rate of return, what share of the capital stock is even affected by the corporate tax rate.” So why am I boring you with all this economic talk?

Well Paul, a much smarter man than I, has it right, but does not put enough emphasis on the statement “what share of corporate profits represents monopoly rents…“. Rents in economic speak are profits derived from a product that you do not improve on (no further capital investment) but makes more profit because you have cornered the market. Profits on a monopoly. Think real estate. It gets scarcer, you can raise the rent making more money by no additional investment by you. In the corporate world that means no new jobs. You are extracting money from the economy with no investment in capital or labor to create anything.

What is happening I believe, which is changing economics, is that monopoly rents, whether it be Facebook, Microsoft, or big Pharma (just examples) is where we are going and driving more and more economic inequality. That coupled with finding ways to reduce labor costs and mechanize to maximize share holder earnings (profits) dooms any tax cut to corporations to help wages or spark capital investment. My point is simple. The basic models still function, but some of the variables in that market have changed and have more impact than in the past.  The old ideas about cause and effect may have been changed so that all roads leads to more economic inequality no  matter how much you believe in your ideology and maybe it is time to change the rules.

Okay, so much for economics, what about religion? Monday I used other’s writings to slam Ross Douthat’s position on hating liberals  (make no mistake, his passive aggressive writing about liberals should not be misinterpreted) and their allegiance to humanistic secular approach to science and data.  Well today New York Editor, David Leonhardt took me on (figuratively since I am nobody in particular). It went like this:

The benefits of faith. In his Sunday column this week, Ross Douthat issued something of a challenge to secular liberals. They think of themselves as empiricists, Ross wrote, but they’re actually close-minded about several powerful forces for good, starting with religion.

“When people and societies are genuinely curious,” he continued, “they are very reasonably curious about everything, including things happening in their bodies and their consciousness and more speculative realms.”

The column reminded me of a pattern that, as a secular liberal myself, I’ve long found inconvenient: Religion is correlated with a lot of healthy behaviors and positive outcomes. All else equal, religious people have higher educational attainment, earn more money, use drugs and alcohol less and commit fewer crimes, according to a long line of social-science studies (that have frequently been done by secular liberals).

The question about these findings is the old correlation-causation question: Does religious faith lead to these healthy behaviors? Or is something else, independent of faith, causing them?

He then goes on to describe a study where 15 weeks of classes were given to more than 6,000 very poor Filipinos, some of whom received a version that combined religious teachings with advice on health and employment and others received only the nonreligious parts. By comparing the different batches of students, the economists hoped to isolate the effect of religion. After some time the religious groups were doing better. So religion is good right?

No study is definitive. But I do find the overall evidence of religion’s ancillary benefits to be strong. That evidence hasn’t made me personally religious. I’m still quite comfortable with my secularism. But the evidence has made me more humble and open-minded about how the world can go about solving some of its problems.

I found the avowed secular liberal to be illogical. First did he read Socrate’s listing of some of the other things religion has brought us in pain, suffering, and blocking progress? If you are burned at the stake for your heresy you might not be so sanguine about religion. Certainly religion does have beneficial effects. The belief that Jesus is your savior and he will forgive you and give you strength has helped untold thousands redeem their lives. It has also created a moral certitude that has tortured or killed untold millions. I would not argue that a belief can not give you strength and comfort, but a belief is not a truth.

The other problem here is define religion. Is that a belief in some mystical fairy godfather who you should thank for your home runs, praise when you are not drowned in a flood, but nor held responsible for others who did die, or is religion really more about an adherence to a strict moral code? That last one defies explanation when you consider Trump and Evangelical Christians.

I believe that one could argue that during the development of mankind, religion was a necessary part of socializing and allowing people to live together. But science has undone many of the mystical fantasy beliefs that explained what was at that time unexplainable. It has raised real questions about some of the moral and ethical values of religious writings. What is left, I believe, is something that for our future is the only path forward, not a religion with its moral certitude and cruelty (whose God, whose truth), but a moral philosophy open to the testing of its truths, and change when they don’t stand up. Oh, if only Muslims could evolve like many religions have in the modern world. No, their religion is designed so it is almost impossible. Well for that matter, oh could Evangelicals just evolve although there are some cracks when they have friends who are gay and start wondering how they are so evil. You know, that reality thing instead of God’s law defined by who again?

Discussing religion with the majority of people is a loosing battle because indoctrination from birth provides biases that can live in deep denial. Maybe there is some Supreme Being, but that raises the question where did he come from, and who is his god. And of course the one thing we know is empirically, good people die sad deaths and bad people live on. See Trump in the White House. Good or bad is up to us, not some Supreme Being.

I would argue that if the study were done again and the religious training were substituted with a moral philosophy that included the belief that we are all in this together, kindness and charity is the guiding principle, and we are connected and give one another strength (Yo! This could be any number of religions, especially Christianity without Jesus), you would get the same result. Science, data, and rational thought guide our moral beliefs, and inform our philosophy. Maybe there is a force out there, but to assume that religion is the only path to a better society, well that is just not science or rational thinking. I would also argue that even we atheists can and do have a moral philosophy that allows us to be way more Christian than most of the Christians I see in Washington today.  Just saying.

WTF Friday

As we normalized President DFF, it is also how we normalize WTF moments. In fact they just become news tidbits among all the news tidbits. But still we have them. The biggest one is those fiscal conservative Republicans just passed a massive spending bill that raises our debt massively. If you are not confused by the propaganda machine you will note that that has been their modus operandi since Ronald Reagan. It is kind of hard to be the party of big military spending, tax cuts, and the magical supply side economics and do anything but blow up the budget. Not sure how they got the reputation of fiscal hawks other than they cried loudest about deficit spending but did the most to ensure it.

The next WTF moment will come when we hit the debt ceiling, the amount we have agreed is the debt we will pay for (we already spent it, see above). We will see if the hypocrisy reins supreme if they start pounding their chests on this one. This is one of those things we should have changed a long time ago, if you authorized the spending then you authorized the raising of the debt ceiling to pay our bills. I have argued before that Republican’s fixation on debt and trying to make the micro economy the same as the macroeconomy of our economy equal is disingenuous, but there is an element of truth to it in the details:

As we learned from John Maynard Keynes, deficit spending should be countercyclical. When economic growth goes down, deficits should go up, and vice versa. The idea is that the government can pick up the slack when private demand lags (as was the case back in 2009).”

But they are doing just the opposite here. Here is the thing. In a economy we should be raising taxes right now if we really need all this spending. Now I am all for a strong military, but President DFF and his cohorts confuse a strong military with a strong country as if bullying is the only tactic of power. We are becoming weakened in the world, not because we got the biggest baddest weapons, but because we are becoming economically and ethically weak under President DFF and his boys. Note he now wants a military parade to show off our shiny weapons while we withdraw from the stage of economic deals to strengthen our power and influence in the rest of the world.

And here is really a WTF moment for conservatives if they want to admit it. Here in California under the leadership of a very pragmatic liberal, Jerry Brown, we are putting money away for a rainy day.  Yes there are Californians who don’t like the gas tax or the higher taxes, but they are the next wave of fools that vote Republican, and they are a minority.  When things got better we did not “give the money back to all those hard working rich people,” we started putting it away for when the economy turns south as it may be doing now. It is because Democrats have always been the party of more careful budgeting. The best way to talk about debt is a percentage of GDP and here are the facts:

Republican presidents after Eisenhower have increased the federal debt as a percentage of gross domestic product by a total of 60%. Democratic presidents have reduced the debt as a percentage of GDP by a total of 9%.

President Obama is the only Democratic President during whose time in office the debt has risen relative to GDP. The data extends to the end of FY2014 (September 2014). President Obama’s bar will almost certainly drop by the end of his presidency, as GDP growth is relatively high and the deficit is relatively low. 2/5ths of the increase during President Obama’s presidency occurred during the first year while the country was still in the midst of the Great Recession.

Of course President Obama inherited a failed economy in 2009 and safety net, stimulus, and war spending (from the Bush War) did not help. But the bottom line when you look at numbers and you care about debt and deficits, you are better off under Democrats.

We need to be raising taxes right now, not cutting them. Gas tax should go up to pay for improvements to our transportation systems. The recent tax cut should be repealed so that the wealthy pay their fair share, and we should be investing in infrastructure improvements. In fact, there is a bigger picture here if we are willing to look at it. Economic inequality. We need to more fairly share our gains so our citizens have the buying power to keep our economy self sustaining. But I am spitting into the wind. People who believe in sounder budgets vote for Republicans because they make the most noise about it, but never deliver. WTF.

Well we will have another disaster like the Bush years and then Democrats will regain power. Hopefully this time they won’t think the answer is to reach across the aisle to find middle ground solutions that fail and put the fools back in power. They should just turn away from that approach and leave them in the dust of history’s failed lessons. I can hope.

Aloha and Salutations to Mainlanders Who Are Now in the Winter of Their Discontent, Officially

We have been studiously not watching the minute to minute news of the tax bill or the stealing of an election in Virginia, or the lies about the tax bill, but it does seep in. Bing! Computer announces more bad news. Appropriately it has been cloudy and rainy yesterday to befit the news. This does not stop snorkeling, but does put a damper on boarding (waves are way bigger than a breadbox). But since the nation seems to be rushing off the end of the cliff, today I challenge the big waves. What was it that Worf, the Klingon in Star Trek Next Generation used to say, “It is a good day to die?”

Okay, the tax gut passed, with Corker, Collins, and Flake, well, flaking. Now why is this bad? Hell, my own newspaper, The Sacramento Bee, said this:

Business owners and economists said the $1.5 trillion in tax cuts should produce a surge in capital investment and improve job growth. Corporate income taxes will be reduced drastically, and there’s a special tax break for small-business owners. The bill also will cut taxes for businesses that invest in new plant and equipment.

Except that on the economists part, it is not true. Well actually most of it is wrong. Why would corporations already awash in cash decide to invest in capital improvements when they could buy back stock and improve CEO’s positions on bonus and their pay. Why would CEO’s pass the money down as pay raises and lower their bottom line hurting their stock prices and the CEO’s bonos? Remember when Bank of America downgraded Chipotle’s stock because they “paid their employees too much?” Sure a tax cut in lean times does help spur investment, but we are not in corporate lean times. Estimates of improvement on GDP are weak at best. As for flow down to the middle class, see above.

Try to keep your ball on the prize. Think about a business plan you are trying to sell a bank (and most corporations don’t need loans and money is cheap). Where is the demand coming from? If we don’t create jobs and give workers more income to spend, the demand remains stagnate. You have to show adequate demand to make your plan work. Where again is that coming from?

83% of the benefits go to the wealthy. Economic inequality just got a lot worse which in the long run does not bode well for the world economy when fewer and fewer of us can afford homes, education or have money to buy stuff corporations want to sell, except for maybe opioids which apparently our Republican Congress see as a real growth industry and gets rid of “the surplus population.” Oh, and what of that horrible non-competitive tax rate on corporations of 39.5%, the highest in the world? They don’t pay that and pay on average about 24% (world average is about 21%). And did you see the Republicans close any loopholes that will allow most large corporations to drive their tax rate to almost zero? No you did not. 20% of big corporations pay zero corporate taxes and my guess is it will be more now.

Oh those facts and data. How they do inform if we would just use them. This whole tax charade makes no sense. We just gave away at least $1.5 trillion dollars to wealthy people who don’t need it that we could have spent on infrastructure, education, healthcare. Oh wait! That stuff will be taken care of by the market place. And wait to you see the new actual tax rules next year, more complicated than ever. And the Republicans are already talking about cutting Medicare and Social Security to hold down the deficit they just created. Oh the winter of our discontent.

But to add fuel to the fire, the odds of President DFF firing Mueller is almost certain as you see Democrats realizing that their Republican counterparts are starting to attack Mueller with frivolous claims (absolutely no evidence of any wrong doing, just innuendo). Senator Mark Warner warning the firing of Mueller would cross a red line was a veiled threat to Republicans. He sees it coming and so do I. When Mueller drops the Donald Trump Jr. or Jarred Kushner indictment, it will happen including pardons. Then we are over the cliff. It is clear that Republicans are trying to stymie the investigations, and try to tarnish the real one Mueller is conducting, so it is tick, tick, tick.

The only thing I am wondering is if Democrats as a group are recognizing both realities, Mueller will be fired* and Republicans will not act. Then what is the game plan? What is your game plan? If the wheels of justice don’t turn, what can we as citizens do? Oh I know, vote third party again.

But here in paradise the sun is starting to peak out, and surf is a little calmer so I am going to spend the shortest day of the year attempting to kill myself on my body board. Can’t think of a better time when the future is now.

*If I were Mueller, and he is probably much smarter than I, he has prepared a departure package. Now in normal times the honorable thing to do is just walk away as government works out the kinks. But these are not normal times and normal thinking like can the two sides just get along, and we all need to step back simply do not apply. The democracy, so carefully founded, is being destroyed by a Republican controlled Government and a truly despicable man unsuited for the presidency in charge. So I would have my farewell package ready to drop if shit happens and it is going to.

Oh and one other thing. Considered the attacks on scientists, FBI, and Intelligence Agencies, has not President DFF and the Republicans set us up for a mutiny if the rule of law no longer applies. Those would not be my chosen enemies.

Make America Great Again!

And apparently the way to do that according to President DFF and his followers is to make “America First”. So what does that all mean? Democrats tried the line we were already great, but it did not really sell in the election. People know we are in trouble. President DFF said this:

“From this day forward, it’s going to be only America first. America first.”

What does that mean? How does that make us great? Well in Trumpese and to the hoards of blamers, it means we won’t be ripped off by the rest of the world, which is an easy target for our economic woes. So if you understand that meaning, making America great again means restoring economic wealth to the middle class, who by the way, were never wealthy, but better off with more opportunities in past years, and rich in terms of the rest of the world. So making America great again is measured in dollars. How do we use America’s power and influence to accumulate more wealth is really what this means (and this assumes that this wealth will flow down to the middle class). Remember colonialism? Same goal.

Rex Tillerson has further defined this in terms of other countries:

“We just kind of lost track of how we were doing, and I think things have gotten out of balance,… If we condition too heavily that others must adopt this value that we’ve come to over a long history of our own, it really creates obstacles to our ability to advance our national security interests, our economic interests.”

Again in Trumpese this means we will happily deal with the devil to advance our national interests defined as short-term economic interests. This is what will make America great again if we quit caring about freedom, democracy, human rights, minority and women’s rights, and just focus on making ourselves wealthy. It would be springtime in America according to President DFF and the Trumpets.

I understand how and why President DFF would believe this. He ran a business that was based on screwing the interests of others to make his money (if he is not in debt up to his eyeballs with the Russians). He was never into win-win, but win-lose. So he defines success as being the king of win-lose. So do the Trumpets that follow him. They want their piece of the pie and screw everyone else. That is how you succeed in their little minds. Is that how you make America Great Again?

Now, we are assuming, or they are, that their view of the economic pie and how economics works is correct and if you follow President DFF’s economic policies, things will get better. Stiff other countries, build a wall, give tax cuts to the wealthy, cancel trade agreements, ignore the environment, on our debt, get rid of regulations that rein in corporations and businesses, and we will be back on top. Oh and let’s not forget re-establishing white people as the dominant force in America. I would argue just the opposite, but that is not what this blog is about. It is about what makes America Great and how Trump and the Trumpets have it disastrously wrong.

What makes America great is not our money, but our values and our struggle to get those values right. When one stops and really thinks (something too rare these days) about our basic values, you are forced to read what our Founders struggled with. They weren’t just writing a document to lay out a government, they were making a basic statement about the nature of man, humanity, and what are our most precious goals, life, liberty, and the pursuit of happiness. Governments primary purpose was to secure those rights for each and every one of us.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the Pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.

There it is. That is what makes America great, that we have a government and a people who are trying to achieve that lofty ideal. We had a civil war to correct a major problem with the compromise of those ideals, and it wasn’t until the 20th century that we gave women the right to vote. We are still struggling with race and misogyny as we see in todays events, but we are struggling to get it right. We have finally recognized gays are people too with rights. Yeah, it is messy, but what makes America great is our melting pot, and trying to understand all people have “certain unalienable rights”, to achieve their potential.

Even Ronald Reagan got this one. Remember the “Shinning City on a hill?”

‘I’ve spoken of the Shining City all my political life. …In my mind it was a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That’s how I saw it, and see it still.'”

It was the gated community of the Trumps and the Trumpets. What he got wrong was that “government is not the solution to our problem; government is the problem,” which Republicans have run wild with in actually stifling the rights of the middle class to enhance the rights of corporations and the market place. He missed entirely that the Founders established governmentfor the sole purpose to protect those rights of individuals. That life means economic security, that liberty means a level playing field for all of us, and freedom means our right to choose without infringing on the rights of others.

And here is my other argument. We were economically wealthy because we did secure those rights as government played an active role in leveling the playing field for everyone. And we were a beacon to the world where a man or woman, according to his/her abilities could achieve their potential. We have lost that edge because corporations and business now are more important than the people. We now measure ourselves by economic gain, not in how we treat humanity.

And here is what I see of the Shining City on the Hill: It is being bypassed by most of Europe because we thought that the freedom of the market place over people s rights would secure life, liberty, and justice through wealth, but for most of us it just enslaves us. Capitalism is merely a tool of our economic system, not a god. We have sacrificed the good of the people in the false belief that unfettered capitalism  will make us great. We live in a complex world where rights of the individual are now competing with the common good. It is a delicate balance tilted bady to corporations. It’s messy, but that is what made us great, understanding that balance and working hard to get there. We threw all that away with Donald Trump and the Republicans.

Not only will the selfish desire to only consider our financial interests in every interaction we conduct, whether within the United States or internationally backfire in terms of our economic interests, but it burns down the Shining City on the Hill. It will dim and become a cinder, burned out by greed. The world will no longer look to America as the noble experiment where there is hope, but the noble experiment that failed. If great is defined in terms of short-term gains and wealth, the 1% of America is not just great, but fantastic. So faired the aristocracy of old.

But if it defined in terms of equal opportunity for all, tolerance, and equality, or said as the Founders did, life, liberty, and the pursuit of happiness for all of us, we have fallen on our asses. To “Make America Great Again” will not be achieved by being selfish, but by being magnanimous as a beacon for mankind. See President DFF or the Trumpets being magnanimous?

Another Say What Moment or WTF

There was an op-ed piece in the NYT from a Republican now repenting his vote for Trump (I Voted For Trump and I Sorely Regret It). It is interesting reading because the reality of Trump has a least dawned on one diehard, but the question in my mind and apparently in many readers mind is that you did not see who he was in the campaign, which the writer, Julius Krein, seemed to gloss over:

Julius Krein writes like a well educated thoughtful person who appears to have been very much involved in analyzing Trump’s long campaign for the Presidency. As such it is hard to believe that he is only now coming to the conclusion that Trump is unqualified and too irresponsible to serve as President. Trumps repeated pandering to a Republican racist base during the campaign can hardly be viewed as “merely Bidenesque gaffes” (in my opinion) by anyone paying attention and willing to do a little research in to Trump’s past. How can anyone of sound mind attribute 45’s eight year long obsession with the birther movement as “merely a “Bidenesque” gaffe. Trump is and always has been a racist. Many who voted for him understood that.

It is interesting to read this to see how the disenfranchised Right thinks and what they were hoping for from Trump. But here is the line that gives me the most pause:

Far from making America great again, Mr. Trump has betrayed the foundations of our common citizenship. And his actions are jeopardizing any prospect of enacting an agenda that might restore the promise of American life.

And exactly what do Republicans have to offer to “restore the promise of American life”? I haven’t a clue. The one candidate that got this was Bernie Sanders who identified economic inequality as the root of all our problems (and the systems and laws that acerbates it). Mr. Krein tells us:

…Mr. Trump eschewed strict ideologies and directly addressed themes that the more conventional candidates of both parties preferred to ignore. Rather than recite paeans to American enterprise, he acknowledged that our “information economy” has delivered little wage or productivity growth. He was willing to criticize the bipartisan consensus on trade and pointed out the devastating effects of deindustrialization felt in many communities. He forthrightly addressed the foreign policy failures of both parties, such as the debacles in Iraq and Libya, and rejected the utopian rhetoric of “democracy promotion.” He talked about the issue of widening income inequality — almost unheard of for a Republican candidate — and didn’t pretend that simply cutting taxes or shrinking government would solve the problem.

Okay, but what policies did he propose? None (well not quite true, build a wall, hate immigrants, hate Muslims, trash everything, and be nasty) and Mr. Krein tells us that most politicians are vague about their exact policies. Hillary wasn’t. But there is a more fundamental problem. Smaller government, less regulation on business, unfettered market place, how do any of these do anything but accelerate economic inequality?

Then, after the election, I founded a quarterly journal, American Affairs, largely to question elements of what is often called the neoliberal policy consensus — totally open borders for capital and labor; transferring power from national governments to transnational technocracies; unfettered markets; and democracy promotion as the sole premise of foreign policy. In other words, the disappointing legacy we inherited from the Bushes and the Clintons that helped pave the way to Mr. Trump’s election.

Now I can agree with some of his points, but anything Republican, given their ideology, is not going to get you there and Trump was obviously pandering to Krein’s wishes with no game plan on how to get there. And of course he was a moral degenerate who demonstrated his failure to grasp the fundamental ideology of our democracy. Like the rubes in Wisconsin, Pennsylvania, and Michigan, they got that something was fundamental wrong with establishment politics, but they failed to grasp the moral depravity of the man they elected. Hard to figure that out when he was lying non-stop, inciting violence, saying racist things, and trying to tear at the fundamentals of our democracy, three branches of government and the free press all during the campaign

Here is the thing Democrats need to take away here. The Establishment is fundamentally flawed and there is a yearning in the country for fundamental changes to our economic system that hands out power to the wealthy and elects people who support the status quo. Bernie was that candidate. The Democratic establishment did him in, and we are where we are because of it. But again here are Mr. Krein’s words that tells about the mistake we make on both sides:

But many of us thought even this might be a positive if it forced him to focus on “making deals” rather than on Washington’s usual ideological posturing.

Deal making is not going to hack it. If Mr. Krein understood the Republicans he would have known they will never compromise their ideology that is what is accelerating economic inequality. See what happened on healthcare. Their ideology prevents solutions. Hillary made the same mistake believing that nonsense that voters just want us to get along. That is not they way they vote. She was going to be a deal maker. Did we learn nothing from Barack’s failure to make deals as the Right ate his lunch? What is required is a new way, from ground up, and government is the only entity that can make these changes. So we have to change government.

Probably what was so amazing is how bad the country wants this vision of the future that as Mr. Krein could do, overlook reality and only see the goals Trump touted, and not the nonsense that made up the path. Nothing is going to change and Democrats are never going to be successful until they finally get what Bernie was selling, that the rules we have set up for trade,

Wall Street, taxes, intellectual property, are flawed and need to be fixed. People want a secure future in an evolving economy. That demands investment in our country and our people, while developing a strong safety net. That is the way forward, not electing someone who can make deals, The deals are only to made with the devils that got us here. They will take us no where.

So if Democrats/Progressives read Mr. Krein’s piece, they should not wallow in I told you so. They need to recognize that Mr. Krein recognized the dysfunction of our present economic system as many Americans did, and foolishly voted for Mr. Trump as their only choice. Hillary would have maintain the status quo and we would not see the damage today, but 2020 without real change would have been another moment for another Trump. It is time for a whole new vision, and Bernie already gave it to us. If we see more establishment Democrats too closely tied to the power structure and Wall Street, it will be the demise of the party, and maybe the country. The writing is on the wall and the lettering is large and bold.


North Korea is not a surprise, yet it captured the news yesterday, whether true or not. Sooner or later they were going to get there and like Trump the President, who they are is no surprise from who they have been. China and the United States, the two parties that could have solved this together, have failed to, looking to their own selfish needs and kicking the can down the road. The can has now arrived. No more road to kick down. And North Korea is no Soviet Union of old. Mutually Assured Destruction (MAD) may not force people to be rational. I have argued for years that North Korea is a living hell on earth and that China and the United States could not or would not force regime change was a political and moral failure. Now we have saber rattling with a moron for President.

Make no mistake, the United States could not solve this without China. And China in its own self-serving needs for trade and a firm border to keep immigrants out and buffer to US backed South Korea, could not bring itself to deal with a painful problem. And too many times we have thrown our hands up and just said well, maybe the government will fall. In North Korea, falling means taking everyone with you. That is the critical understanding we have failed to understand. So now we have entered very dangerous times because we refused to do the hard things when we needed to. Now the hard thing is unimaginable. And we have a moron for President.

Oh, and global warming is happening faster and may be more drastic than anticipated. Surprise! Not. We have known about global warming since the 1980’s. We have seen our impact on the planet, not just its weather, but its species for hundreds of years and we do nothing. Oh there are little movements around the edges, but business must come first. Now we are faced with the reality of once again kicking the can down the road, and the road is coming to an end. No more kicking. But like the North Korea problem, we have a moron for a President (not to mention a whole Party in charge of the country whose litmus test is not believing in science).

There has been some debate about whether the latest government report on the rapid increase in the impacts of global warming might force the moron President to change his stance. Sometimes I wonder what planet these people are on. Donald Trump got here illegally by laundering money for the Russians and he certainly colluded with them in the election. The investigation is tightening and he needs his base to terrify Republicans into not impeaching him when the other shoe drops, as it most certainly will. So he is not going to change on global warming, and we are going to see it it full force, and like the Korean thing, the outcome will be disastrous.

Meanwhile in the world of economic inequality, the inequality grows. And sooner or later the markets will come crashing down because the part of the pie that goes to the majority of consumers will be too small to sustain it. The markets are at record highs this week, believing that our moron President will cut regulations and taxes so they can further increase their profits with no concern for the damage they are doing. We have legitimized economic inequality by believing a high tide lifts all boats, except it hasn’t, and we have also kicked this can down the road, and sooner, rather than later, the market is going to crash.

Are you sensing a trend here? We Americans, who can do anything, have done nothing. When things got hard, we went looking for easy simple answers that ignore reality. Enter the Republican Party, facilitated by the Democrats, who know how to pander to Americans looking for the easy answer. Ronald Reagan, the prince of government is the problem, told us to be selfish and seek out gains for ourselves and everyone would prosper. Kiss “ask not what your country can do for you, but what you can do for your country” goodbye. We got tax cuts pay for themselves and the private sector will solve all problems. Driven our roads lately? We are starting to look third world. But don’t forget their main message, investing in government through taxes is a waste of money. Now look at us.

We are reaching a point where ignorance is considered a virtue (remember the rural wisdom of Sarah Palin?),where the ignorance of the base chose a leader that could finally push us over a cliff. We are approaching a critical turning point in the history of our world, conservatism has run its course and almost destroyed us, and we have a moron for President. I don’t think we can wait four years. If Trump continues his “fire and fury” (remember how well shock and awe worked out?) rhetoric, we may not have to worry about global warming as the aftermath of a nuclear war could be much worse. But if we somehow get through this, will we have learned our lesson? Or will we go looking for the next easy answer and not doing the hard things that make life and our country great? I am not optimistic after watching the last 50 years.

America really does have some amazingly hard working and smart individuals and we could solve these problems if we had a leader that made Americans aware of their failures and showed us a path forward.  Even the mindless base of Donald Trump might be led out of the wilderness of ignorance if they understood the challenges before us and a leader who inspires sacrifice.  But where is he/she?  Right now the one we got thinks the solution to jobs is to bring back coal which is never coming back and backed up by a pack or sience and reality deniers.  Hey! Bring on the fire and fury! All we need is a leader who can one again inspire us with, “Ask not what your country can do for you, but what you can do for your country,” and get on with it.  So far we got the moron President and his scared shitless Party.

Saturday, Healthcare, Economic Conservatives, and The Village Idiot

Let’s start with healthcare and I can make this really, really simple for you.  Either you believe healthcare is right or you do not.  If you want a system where everyone has affordable healthcare, that would be the rest of the world, then you enroll everyone in the program, you do smart things like preventative care, reducing drug prices by allowing the government to negotiate with drug companies, you reward for good outcomes, not more treatment,  you have a single payer system, and you will have affordable healthcare.  In my mind the most cost effective system is a single payer where healthcare providers (as separate from insurance companies) compete for your coverage. See Kaiser or other HMO providers.

On the other hand if you don’t believe in universal care, go with the Republican plan.  The problem is that even if you benefit initially from possible rate cuts, if you get sick, really sick, you will probably go bankrupt.  Oh, and don’t give me that crap about we have universal healthcare and poor people can visit the emergency room.  It is a death sentence because when they get sick enough to go, their care will be very expensive, and they die.  If you are fabulously wealthy you are fine.  If you are young and healthy, you are fine, but sooner or later you too will have a pre-existing condition.  Then what?

So what we are watching with the Senate Bill is a Kabuki Dance.  All they are doing is trying to find a way to cut cost so they can fund tax cuts.  Until we finally say, healthcare is a right, we are wasting our time.  Then we can debate about how to best do that and control costs, but that is the only solution.  Now if we get serious about a single payer plan you will hear the R-word, rationing.  We do it now by ability to pay.  Maybe that new heart should go to a twenty something instead of an 80 year old smoker.  We will have to make a lot of tough decisions, but until you accept that we are all in this together and you are going to help pay for somebody else’s healthcare until you get sick and then they pay for yours, we go nowhere and it just gets worse and worse as we try to find market place insurance solutions that don’t exist.

Okay, now on economic conservatives, those are really the majority out there.  They are usually socially liberal, but economically conservative.  So you ask, what does that mean, the economically conservative?  I find most of the answers are we should balance our books and pay for what we want, and there is that element of distrust about our fellow man.  If you give them free stuff they will gorge (or not appreciate it).  First let’s take on the debt thing (balance the books).  There is an irrational fear of debt based upon the home budget analogy. I go into great detail in my three part blog The Economy.  But suffice to say, a country is not a home budget.  It doesn’t have to pay off its debts to retire.  It keeps having new kids and it has to make investments for their future. It just has to keep the debt at manageable size.  See the debt we had after WWII, and we didn’t really pay it off, we grew our GDP so it was only a small percentage of our earnings.  Think about that.

Manageable size has two indicators, interest rates and inflation.  So according to most economic conservatives, the debt today is out of control and yet interest rates are at all time low and inflation is also too low to encourage those hanging on to their dollars to invest in things that don’t lose value as fast as money.  The thing that economic conservatives have a hard time with is borrowing and yet that is what every company does to invest in their future.  And so do we in our home budget analogy, but at some point we have to pay off our debt to retire.  Countries don’t retire.  So the real issue is how much debt is okay and what are investments that make sense.  If we can get by the fear of debt and understand it is a normal thing and is quite manageable if kept at certain levels compared to our GDP, we could start to really discuss what are our most important investments in the future that will give the biggest return on investment, and then get on with it.  Until we do that we are stuck and the Republicans use this to continue to push their economic agenda which is really a transfer of wealth to the wealthy,

The real issue facing us is economic inequality, too much of the pie is going to too few people.  The way to fix that is to change the rules on how our economy works.  Sure there needs to be adequate reward for taking risks, but we are out of control.  So make the tax code fair and bring back tax rates we saw in the 60’s when growth was large.  Change the rules about intellectual property so that after a short time innovations are given back to the people to use  to innovate something new.  And what to do with that money?  Well that would be the really interesting debates.  One thing off the table would be tax cuts for the wealthy. Maybe infrastructure, education, healthcare, you know, the stuff that gives our economy the natural resources to compete.  That is the future, I just wish it was now.  Note that we can debate how much, to whom, etc., but then we would be debating about a way forward.  As it is now the Republicans are trying to take us on a way backward.

One last thing, and what blog would not be worth its weight in hot air if I did not comment on the Village Idiot in Chief/Liar in Chief (VicLic).  He gave another interview and you had to be appalled.  First he told us almost everyone agrees that there is no collusion between the Russians and his administration, except that was just him being Liar in Chief.  Nobody knows because we have not seen the results of the investigation yet.  Then he tells us the Mueller-Comey friendship is bothersome.  So is the Trump-Putin love fest, but at least we are trying to find out the facts, no trying to delegitimize the investigation. Then when asked why he tweeted there might be tapes, “He said Comey’s “story may have changed” after he tweeted about the existence of tapes.”  Umm?  Is that obstruction of justice.  Of course Comey’s story never changed and he was trying to intimidate, but it backfired.

The smart play as pundits tell us is to say nothing other than Special Counsel Mueller is investigating and we will get to the truth. And yes that would be the smart play if you were not afraid they were going to find something very bad (follow the money).  They will and eventually it will come out, so the game you are seeing played is one of delegitimizing (at least in the eyes of his base) the source of the evidence against him.  As I have opined before, it will be leaked out as he attacks our most important institutions (justice, intelligence, courts) and people who see the evidence will not cover it up.

In all of this, the one salient fact that keeps you awake at night is that the Russians did hack our election.  They are a true threat to the future integrity of our democratic process, and the VicLic does not care.  He questions whether they actually hacked our election, has not to our knowledge asked for detail briefing on it, or has any plan to counter it.    We now know that President Obama failed to use his implanted electronic bombs to retaliate, but left the decision to the VicLic, and he has done nothing.  Only an apprentice to the village idiot in charge (his base) would not think that something is very rotten in Denmark.

Our Brains Are Being Fried

Have you noticed that if you listen to the daily news on the cable shows, they keep trying to justify what Cheeto-Head does as somehow crafty or intentional to keep everyone off balance.  Then you watch (if you watch MSNBC) Rachel, Lawrence, or Joy take it apart and show it for what it is, irrational floundering.  The latest is that UN Ambassador Nikki Haley is being taking to task for not staying on message with the State Department, meanwhile Cheeto-Head threatens war on the Korean Peninsula.  Say what?  And the media legitimizes this by saying no one really believes his bluster anymore so it is okay.  Really?

Today he said he found the presidency surprisingly hard.  Again, really?  He wanted to be king or maybe James T. Kirk (although Kirk had way more humanity than Cheeto-Head) saying, “Make it so Scotty.”  The wall has to be built —sometime.  NAFTA must be repealed and now it just needs to be renegotiated (that could be good or bad).  China is a currency manipulator and now no they are not.  Now with all this back tracking, would you think his followers would be upset?  Nope.

Republicans claim they are going to reform healthcare to make it more affordable and keep the good stuff, and then they propose marketplace solutions that basically guts required coverage, and will raise rates for those who need it most, not mention the 20 or so million who will lose health care altogether.  Then Cheeto-Head promises tax reform and then floats a 1-page plan that is basically a massive tax cut for the wealthy.  Would you now think his followers would be upset? Nope.

So the first thing you can say is that his followers brains already are fried*.  Oh, he is down today in Atlanta talking to the NRA.  Yep, we need more guns and a federal concealed carry law that will let some nut job from a red state carry into your state.  He needs their cheers and applause while he legitimizes killing thousands each year.  But much of our press and pundits have fried brains also.  They keep allowing people who try to rationalize what is going on talk as though they are making sense, and when he does even modestly normal things, they say he is learning the job.  The fact that he governs on the basis of fake news and ignorance is just normal now, hence our own brains are being fried.

What scares me the most is that we were moving toward a global society.  The European Union was the model, with an excellent safety net and the freedom to move beyond borders for jobs, culture, and change.  It had its problems, especially in the Euro.  But our diversity was considered a strength instead of a threat.  And tolerance was a virtue.  “The world is going America’s way,” Fareed Zakaria wrote in 2008. “Countries are becoming more open, market friendly and democratic.”  What I think happened was economic inequality that created a whole class that did not see any of the benefits and were ripe for withdrawing into themselves. The elites in both parties were benefiting and the many only saw stagnation. As R.R. Reno wrote today in a gigantic attempt to legitimize Cheeto-Head which is basically change terrifies us and we must withdraw:

Most commentators struggle to explain Mr. Trump’s electoral success, because they assume he has no coherent political philosophy.  This is myopic [or insightful].  As a public figure, Mr. Trump has articulated a consistent message that speaks to a fundamental political challenge facing the 21st-century West:  We must affirm nationalism and fight globalism.

Read nationalism as intolerance.  R.R. Reno is trying to legitimize Cheeto-Head as the new Republican instead of the demagogue he is.  The responses (comments) to this nonsense were priceless. But he and another writer today, Pankaj Mishra both pointed out something Democrats should be aware of in their failure this election. Pankaj called it:

Extravagant promises by ruling elites, and their unexamined assumptions, are at least partly to blame for this moral breakdown in the world’s most powerful country. In 2011, for instance, Mr. Obama had claimed, “We are perfectly poised to make the 21st century again the American Century.” But such onward-and-upward narratives seemed to mock the suffering, despair and frustration exposed in different ways by Black Lives Matter or the white Rust-Belt proletariat. Mr. Obama, who recently accepted a very lucrative speaking engagement on Wall Street, now looks like just one of the fortunate members of historically depressed minorities who mistake their own upward mobility for collective advance.

R.R. Reno called it thusly: “Globalism poses a threat to the future of democracy because it disenfranchises the vast majority and empowers a technocratic elite.”  Reno and Mishra called out the elite that I would call the establishment that has not recognized the real problem, economic inequality and are too tied to the status quo. Reno actually thinks Cheeto-Head represents the future of the Republican Party in recognizing the need to withdraw as an answer to stagnation caused by all the benefits going to a few.  I think he is full of shit. But they both nailed that the elites who did run our country were totally out of touch with the real malaise in the country that was not getting better.

Cheeto-Head just became the person who could manipulate badly misinformed and ignorant people.  I do not sympathize with middle America as many journalists want us to by “understanding their plight”.  Their choice was moronic.  I strongly recommend that you read these two editorials and especially the comments.  My recommendation is to select the reader choices on the comments.  I will leave you with two that deal Reno’s op-ed and with Cheeto-Head’s voters.  Reno’s Op-Ed:

Stop justifying Trump. Please stop. Also please stop justifying xenophobic response to your fears of being left behind in a progressive world. “Patriotic Solidarity” is one of the dumbest euphemisms for nationalism. Tell me one period of history where nationalism ended well vs global openness.

You can’t because it doesn’t.  The world is constantly changing – Buckley (unintellectual hack- if you cut through his affected manner and vocabulary you get vapid thoughts) and conservatives can’t deal with change- it frightens you.

“Why can’t we keep doing the same thing instead of being bothered by the fight for equal rights by women, people of color, gays, and foreigners?”

Suck it up and realize your ideas are being left behind – sorry, it’s called progress – it’s what created vaccines, airplanes, and the iPhone. Every time you benefit from technology realize conservative thought would have never imagined changing from the squalid state humanity has been in for most of history.

On Trump voters (he nailed it):

“John Q. Public is not stupid.” As a gross generalization, this is probably correct. But the quintessential Trump voter – the beaten-down, marginalized, fatalistic, repeatedly-conned, non-urban, usually white, working class voter – is frequently incurious, gullible, defiantly ignorant, or under-informed (or two or more of the foregoing). This tends to produce the same results — in terms of who gets elected and the poor quality of resulting public policy — as actual “stupidity.” Am I an “elitist” for pointing this out? I suppose that I am.

Yeah, me too, but nobody has fried my brain yet.

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

What’s It All About (Alfie)

I guess I could write about Meryl Streep’s standing up to Trump and his bullying or the hypocrisy of Mitch McConnell and the hearings, with the inane introduction of Senator Sessions for Attorney General by Susan Collins, but then we are focusing too much on the tactical and not on the strategic.  In order for Democrats and dare I say it, social justice, to prevail, we have to step back and wonder what it is Democrats stand for.  I have been writing about how Democrats have lost their way, and yet we have never really talked about what the way is.  Well, I have, but as a party the Democrats still seem to be wandering in the forest. Again I am going to steal ideas (maybe some words too) from two authors and thinkers, James Kwak and Thomas Frank.

James was writing about we (Democrats (and maybe with a small d too)) lost the election and he pointed out that there were a lot of causal factors but that people who think their financial situation is worse than four years ago voted for Trump by an astounding 78-19 margin.  So then he raises the question, what is the Democrat’s economic message, and he gives us this insight:

The Republican Party’s economic vision can be expressed in two words: free markets. Beginning in the 1950s, Milton Friedman and other prominent economists transformed the abstract models of Economics 101—in which competitive markets, driven by supply and demand, produce the best of all possible worlds—into a universal framework for interpreting social reality. This worldview, which I call economism, became the default economic handbook for the conservative movement and the Republican Party. It brilliantly fulfilled the crucial role of any ideology: it made the interests of a class—businesses and the wealthy—appear identical to the interests of society as a whole.

He then goes on to show how Democrats from Clinton on became Republican Lite.  That we too bought into the idea that markets solve all problems, but with just some controls to take the edge off:

The rhetoric of economism (Kwak’s term for Republican markets solve everything) is simple and compelling: competitive markets maximize social welfare, so well-meaning government policies—welfare, regulation, even Social Security—only make people worse off. (And, if you don’t agree, you just don’t understand economics.) The solution to any problem is to unleash the forces of free enterprise and innovation. By comparison, the Democrats’ economic vision was an unsatisfying jumble of social insurance, industrial policy, consumer protection, welfare, and fiscal stimulus.

He then describes how Bill Clinton took us on the free market journey by being the “other free market party”, including the 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 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. The other is complicated: government programs are necessary to fix market imperfections.

And then he notes where we are today in that this pursuit of free markets has not made the world safe for everyone:

After two decades of promising that markets (properly regulated) will take care of everyone, it is little wonder that Democrats have lost credit with people who feel worse off in the age of globalization and technology.

Now let’s leave Mr. Kwak for a few moments and hear out Mr. Frank (Listen, Liberals).  Mr. Frank takes a chapter of his book to look around for where liberals (Democrats) are in control, complete control, and asks the question what is their economic model?  He settles on Massachusetts (but he could have used California) which is entirely Blue and then describes how that model has become about innovation:

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 expandThis is the city (Boston) that virtually invented the blue-state economic model, in which prosperity arises from higher education and the knowledge-based industries that surround it.

Then he points out that fifty miles away from this hotbed of innovation and technology lies the town of Fall River that has fallen on hard times:

Fifty miles away, Boston is a roaring success, but the doctrine of prosperity that you see on every corner in Boston also serves to explain away the failure you see on every corner in Fall River. This is a place where affluence never returns—not because affluence for Fall River is impossible or unimaginable, but because our country’s leaders have blandly accepted a social order that constantly bids down the wages of people like these while bidding up the rewards for innovators, creatives, and professionals.

The problem arises when we enshrine innovation as a public philosophy—when we look to it as the solution to our economic ills and understand it as the guide for how economies ought to parcel out rewards. To put it bluntly, it is not clear that cheering for innovation in the bombastic way we see in the blue states actually improves the economic well-being of average citizens. For example, the last fifteen years have been a golden age of financial and software innovation, but they have been feeble in terms of GDP growth. In ideological terms, however, innovation definitely works: as a way of excusing soaring inequality and explaining the exalted status of the rich, it is the best we’ve got.

That is where we are today.  That is why Democrats lost.  Their message did not resonate with hope for all, and what Democrats have been about is what Mr. Frank described above.  Let’s face it, most of us have bought into it and my education and skills have let me profit from it.  But it leaves too many behind and justifies it just as the Republicans use being lazy to blame the poor.

Okay, Hillary offered lots of fixes, but not anything in a coherent message about what Democrats were about, just more tinkering at the basic markets solve all problems with just a few restrictions.  In other words leaving the innovative entrepreneurs to reinvent the world and create.  The financial sector is not the problem but part of the solution.  The systems just needs to work better.  People need to be better educated.  Tell that to the people of Falls River who “like similar places, the town is up to its eyeballs in wrathful bitterness against public workers. As in, Why do they deserve a decent life when the rest of us have no chance at all? It’s every man for himself here in a ‘competition for crumbs’, as a Fall River friend puts it.”

So what is our model?  What should the “Party of the People” put forward as what we are about?  What’s it all about Alfie?  Certainly innovation, technology, and education can produce prosperity for some, but as we have seen, it also creates a justification for inequality and we should be about decreasing inequality.  Now I will take you back to Mr. Kwak who turns to our past to answer this question:

Democrats need to reach back to their forefathers, past John Kennedy—who famously said that “a rising tide lifts all boats”—to Franklin Roosevelt. It was Roosevelt, in the “Four Freedoms” speech, who recognized that the strength of our democracy depends on its ability to fulfill citizens’ basic expectations, including: “equality of opportunity for youths and others; jobs for those who can work; security for those who need it; [and] the ending of special privilege for the few.”…The genius of economism is to disguise a political ideology—shrink government, deregulate markets, and let the chips fall where they may—as an abstract, value-neutral description of the world. If Democrats want to reclaim their heritage as the party of working men and women, they need an alternative economic vision, one centered on jobs, security, and fairness—not smoothly humming markets that will magically make everyone better off.

Note that is where the God of education and innovation leads also (let the chips fall where they may).  It allows us Democrats to also justify leaving so many behind.  It would seem that we need to turn back to FDR to once again find our roots.  Bernie is the closest politician we have had to addressing this, but labeled socialist for his policies on “securities for those who need it”.

I believe James has hit upon the answer to where we should be going. As he noted we do not mean the end of free markets and competition, which do produce progress and jobs, but in a context that does not leave people hopelessly behind. Think about it.  Equality of opportunity for youths and others is partially about access to education, good education.  Jobs for those who can work is about rebuilding our infrastructure and making sure they earn a living wage.  Security for those who need it is about Social Security and health insurance for everyone.  A real safety net.  And ending special privilege for the few could start with the tax code.  OMG!  That requires an active government, not one that gets out of the way of markets.

I believe James, through FDR has given us the framework for going forward.  Economic and social inequality is the issue and we have built a system that justifies it and increases it on both sides of the aisle.  That does not mean that going forward we don’t reward those who achieve, it simply means that some of that reward which is now going to the very few has to be used to secure the Four Freedoms of FDR.  How we do that best (policies) should be our challenge for the future.  That puts everything in context. That’s what it is about Alfie.

*Note Mr. Kwak has written a book about this  that I can not wait to get my hands on.  The question we have to ask is where besides the blogs and books of some really smart people like Mr. Kwak and Mr. Frank is the organizing focus of the Democratic party to incorporate these ideas into their unifying party message?  So far we have Bernie and the establishment tank his drive for President.  Democrats have to get more organized than that and move the party as the Republicans have done since Goldwater.  I hope in what time is left to me on this earth, I see that movement.  We really are all in this together.