Posts tagged ‘socialism’

Capitalism is the Problem

If I look at our greatest problems, economic inequality, global warming, and President DFF, they all have one root cause, capitalism. Now I am sure you are going to say what about equal pay for equal work, or systemic racism, or rust belt myopia, or immigration, or failing infrastructure. I would say these are all symptoms of economic inequality, as well as global warming and President DFF. And the root cause of all of this is unbridled capitalism. I would also argue that capitalism has brought us many things and improved the living conditions of many in the world, but then the problems start to show up.

I am not the only one. Remember Bernie. Remember the howling from even Hillary on this was not possible. All Bernie was trying to do was level the playing field. But in an interesting op-ed this morning by Elizabeth Bruenig, she made some points we seem to want to ignore. She started by pointing out that Liberals are in a funk:

This assumption is reflected in the blindsided, startled unease of liberals in the era of President Trump: “There are moments when everything I have come to believe in — reasoned deliberation, mutual toleration, liberal democracy, free speech, honesty, decency, and moderation — seem as if they are in eclipse,” Andrew Sullivan recently lamented in New York magazine. “For the foreseeable future, nationalism is likely to remain a defining political force,” Yascha Mounk fretted this weekend in the New York Times; “liberals should strive to make nationalism as inclusive as possible,” he warned.

Ha! Liberalism incorporating nationalism is what Democrats have done over and over to their failure, incorporating failed ideas to try to out Republican Republicans, Republicans with a softer edge. It’s a journey to nowhere. Ms. Bruenig’s description of capitalism is in fact its problem for those of us who want a level playing field and social justice. She has what I call the “Bernie moment” when she realizes that moving the chairs around on the Titanic as most “liberals” do is a waste of time:

I don’t think business-as-usual but better is enough to fix what’s broken here. I think the problem lies at the root of the thing, with capitalism itself…Americans appear to be isolated, viciously competitive, suspicious of one another and spiritually shallow; and that we are anxiously looking for some kind of attachment to something real and profound in an age of decreasing trust and regard — seem to be emblematic of capitalism, which encourages and requires fierce individualism, self-interested disregard for the other, and resentment of arrangements into which one deposits more than he or she withdraws. (As a business-savvy friend once remarked: Nobody gets rich off of bilateral transactions where everybody knows what they’re doing.) Capitalism is an ideology that is far more encompassing than it admits, and one that turns every relationship into a calculable exchange. Bodies, time, energy, creativity, love — all become commodities to be priced and sold. Alienation reigns. There is no room for sustained contemplation and little interest in public morality; everything collapses down to the level of the atomized individual.

That capitalism is inimical to the best of liberalism isn’t a new concern: It’s a long-standing critique, present in early socialist thought. That both capitalism and liberal governance have changed since those days without displacing the criticism suggests that it’s true in a foundational way.

Not to be confused for a totalitarian nostalgist, I would support a kind of socialism that would be democratic and aimed primarily at decommodifying labor, reducing the vast inequality brought about by capitalism, and breaking capital’s stranglehold over politics and culture.

Welcome to the Progressive wing of the Democratic Party. Well, I hate to say the Democratic Party because the establishment still does not get it and even rejected a Progressive in the Houston primary as, well, too progressive. But they are asleep to what happened in the last election when Americans rejected status quo. Hillary got the nomination because the establishment wanted her and shunned Bernie. Republicans got their radical and he won. The urge for change is stronger than ever and the Democratic Party is trying to calibrate between moderate Republicans and moderate Democrats (read moderate Republicans in 1980) and it is a failed policy. Maybe not at an intellectual level yet, but at a gut one, most of us feel capitalism is failing us. And the reality as Thomas Piketty (Capital in the Twenty First Century) showed us, unrestrained capitalism gives us growing economic inequality.

I do have to laugh though. Ms. Bruenig in her last quote above is pining for “kind of socialism that would be democratic and aimed primarily at decommodifying labor, reducing the vast inequality brought about by capitalism, and breaking capital’s stranglehold over politics and culture.” Would that not be European social democracy as they have in say Finland or Norway or Sweden. Oh, and it works.

We have grown a culture and attitude about policy that reinforces unrestrained capitalism. We learned to hate taxes, regulations, and big government. It has been beaten into our heads by Republicans, But it isn’t working. I see massive deterioration of our infrastructure which is key to our future, and our hate for taxes keeps us from doing anything. Global Warming is already impacting us and yet we turn a blind eye to it because that would be big government and regulations. Oh, and it would upset the apple carts of who benefits by ignoring it.  Economic inequality grows by leaps and bounds and so does the concentration of political power and again we can do nothing because that would require rewriting the rules, regulation, and taxation. And yet the majority of us know it is not working. We got President DFF because Americans rejected the status quo, but he is a mindless moron who is still a creature of the 1980s.

As Ms. Bruenig points out, it is time for a different approach. I hate to keep repeating this, but Republicans, all of them have to go. So do most moderate Democrats who have the same conservative ideas only kinder and gentler. Conservatism has run its course and has proved defunct. If we want change, if we want to do something about economic inequality that touches all inequality, if we want to attack our problems with solutions that work, it is time to throw off the old mantle of unrestrained capitalism. This won’t happen with Republicans because they have become radicals of the me, me, me, and captured creatures of the monied. It is time for a new approach, and the only ones who are going to get us there are today’s new progressives.

Obamacare Increases

UPDATE 28 OCTOBER: I guess I am not the only one:  The Best Way to Save Obamacare

Is this the October Surprise.  Not unless you are brain dead and there is a whole bunch of them that are.  Rates could go up by an average of 25%.  Of course the impact for many of the enrollees will be minimal since their subsidized plan will absorb the increases, but there are some groups that will feel that impact or worse.  So what is the problem?  Short answer is the risk pools are too small.  The projected enrollment at this point was 20M and they have half that, and of that half, most are sick.  Healthy young people are not enrolling. Basically insurers are adjusting their plans for less bill payers and more costs.  Some insurers have dropped out because they can’t accurately access the risk, and the hoped for competition in some states where there is basically only one insurer, is of course, non-existent. So what to do about it?  

I heard one conservative expert suggest that we reduce the regulations that require the plans to cover basic things, in effect hollowing out the coverage and we are back to junk plans.  If I am young and healthy (neither), I want a plan that doesn’t cost much so it doesn’t cover pregnancy and stuff I don’t think I will never use.  The problem with that is then the people who want the plan to cover stuff like pregnancy or mental health  then go up even further up.  Then there is the problem of people simply not enrolling and the penalties are not high enough for not having health care.  If you want a good short summary of some of things that could be done check out Sarah Kliff’s Vox interview.

But here is the thing.  We have one whole party that will just vote to repeal it, and won’t have rational discussions about fixing it.  And in my opinion it is just jerry rigging a system that will never really control costs because Congressional Republicans and some Democrats will continue to protect insurers and big Pharma.  And we are standing in a place where we can look around the entire world and see that nobody tries to operate as we do, and many countries deliver better health care at half the cost.  Maybe this is not a flashing light saying went too far, but not far enough.  Why not finally go over to single payer?

SINGLE PAYER!  Communism! Socialism! See Canada! Okay feel better?  Ask yourself what is the business model for private insurers whose sole purpose is to served their stockholders?  As any business will tell you they must maximize profits for their stockholders and in the health insurance business that is enroll healthy people and deny claims.  We have Medicare for a very simple reason.  There is no profit in enrolling old people.  So the government has to step in and spread the risk pool across the whole nation.  But if health care is a right, which I firmly believe, then the profit motive at the insurer level has no place.  It is counter intuitive and the results we have seen over and over is that it is certainly the mostly costly way to give people healthcare.

Single payer can mean lots of things from a system in England where health care itself is provide by government workers to elsewhere in Europe/Asia where the government is just the insurer and the market place survives at the level of providing actual care, doctors and hospitals.  We actually already have that system for federal retirees and it works just fine.  There are problems with any health care service and the bogey man is rationing, but we already ration using cost. This problem and others are being solved elsewhere in the world and god forbid we could learn from other countries.  

There are a myriad of details that have to be thought out and improved, but we would finally be on the path to universal health care and a system whose driving force is not profit, but healthcare and medicine at a reasonable cost.  I would just ask you this:  As you see big Pharma gouging and health care costs soar, do you think this system is working or are you just abstracting from your experience where you have a Cadillac plan?  Just wait till your employer starts passing those costs on to you and then maybe you will wake up.  And then again you might ask, why are employers being saddled with this cost* which might make them no competitive in a world market?  Why don’t we just expand the risk pool to the entire nation and get over with it?  

So the light is flashing and probably the only way forward if we get a reasonable Congress is to make fixes to Obamacare and maybe, just maybe offer a single payer plan similar to the Federal Retirement System where the feds share in your health cost and you can shop plans across a broad spectrum of providers.  We will see whether we see this as an opportunity to change, or another excuse to pull back.

*Employer provided healthcare is a result of WWII when the government put price controls on everything including labor to prevent wild inflation.  In order for businesses, especially manufacturing to compete for labor, benefits was the one thing that was not controlled so they offered free medical benefits and here we are today.

Let’s Talk Socialism

Since one possible scenario in the Presidential election is a heated debate about capitalism versus socialism, and socialism conflated with communism and Greece, let’s talk some sense here.  We already have socialist elements in our society.  What do you think Social Security and Medicare are?  What do you think  unemployment insurance or free high school education are?  Pure capitalism was and is a disaster.  It is a cruel system that is ripe with abuses of power.  Having said that, it can be one of the best ways to innovate and raise our standards of living.  So we are not talking about one or the other, as it will be falsely framed, but a marriage that makes both better.

Right now we do not have to look back to the days of the robber barons for bad examples of runaway capitalism.  We have the largest economic inequality we have ever experienced, stagnation in middle and lower income wages, and a rather lack luster economy as a result of that.  We have had massive failures due to a lack of regulation when capitalism ran wild.  Let’s not forget the banking crisis of 2008, the gulf oil blow out, or the latest crisis in Flint to see how government’s role* in regulating commerce, or in the case of Flint Michigan, running government like a business.

There is other evidence.  We like to think of ourselves as leaders in innovation and social mobility, but data tells a different story.  Countries in Europe, especially where they have strong safety nets, beat us out, and they are happier.  Instead of the famous hammock analogy of Republicans, a safety net makes innovation less risky and people are freed to try new things.  On the other hand, these benefits need to be paid for, and we need an entrepreneur class that is sufficiently rewarded to take the risks of spending their capital.  It is a giant balance, not a choice.

So what is the socialism that Bernie sees and so do I?  Well it is fairly simple.  First we have to get money out of politics or none of this stuff will happen.  Second, we have to look at how we protect wealth and wealth accumulation and make sure that when wealth is created, workers share in it.  That includes trade policy, patents, intellectual rights, and tax policy.  Tax policy includes subsidies, tax rates, tax breaks, and a myriad of other things that the status quo rich will fight tooth and nail hence the need to get money out of politics first.

Then let’s start with one of Bernie’s passions, free public universities.  Since other countries do it, it can be done.  Second Bernie’s best argument is that for hundreds of years we have seen a high school education as a benefit to society and provided it free of charge.  So now that we have entered the Information Age, what is wrong in investing in our work force by extending it to make sure they can get a college education?  Why is this such a leap and it could pay giant dividends in a more productive and trained workforce?

Second is universal healthcare.  Again other countries do it and lo and behold they do it for almost half the cost of our system, and that does not factor in the cost in treating illnesses only when they become acute and someone shows up in one of our emergency rooms.  From a principled point of view, healthcare is a natural right and from a practical point of view, it could finally end the burden we put on our own businesses to provide it while providing more security to our individual citizens to change jobs without the fear of losing healthcare.

Okay, what about expanding Social Security?  Once again we are not taking into account how employer based retirement plans basically do not exist anymore.  Social Security also is a system based upon how much you pay in so there are built-in incentives to work and work longer.  Think about it.  If your healthcare and retirement are secure, would you not be more likely to try new jobs and create businesses if the risk of failure is offset by these safety nets?  That is exactly what is going on in many European countries.

How do we pay for all this?  Well we all pay more taxes.  But if the economy, because of our investment in it and its resources grows, these investments will be much cheaper than first envisioned.  And we still make sure that there is plenty of incentive in the system for innovation and risk taking.  But right now it has become obscene and the incentives are in wealth accumulation, not investing that wealth in creating a more industrious and productive society.

Bottom line here is fairly straight forward.  Capitalism gets tamed and we actually create an environment where tamed capitalism can grow and make things better for all of us. In a word, it operates more effectively.  The idea that we will have one or the other, or that it is pie in the sky and we can’t afford it is ludicrous.  These are simply claims of those who want to keep things just the way they are because they got theirs and screw you.  Oh, and comparing it to Greece is also nonsense.  We own our own currency and these solutions will have to be paid for through growth and a fair sharing of the tax burden.  That is what Progressives and  Bernie stand for.  That is what “socialism” is all about.

*In the Republican view of capitalism, government is bad because it just gets in the way.  And that is true, sometimes in very detrimental ways, but mostly it does just the opposite to keep capitalism from destroying us.  Had safety regulations in the gulf oil spill been enforced, that blow out probably would not have occurred.  Had politicians not lifted the restraints on banks, we would not have had the crash of 2008.  Think about why a Republican administration created the EPA or why there is a minimum wage: To protect us from a rush to the bottom for short term gains.

Government has a vital role to play in a market based economy because markets maximize the efficient use of investments going to those enterprises most likely to maximize profits.  It picks winners and losers based upon short-term profits.  Right now the most profitable industry is the oil and gas industry and yet further expansion will destroy our living environment.  The most profitable investment is in financial instruments that do not create jobs or industry.  So government has a role to play in setting incentives that take the long-term welfare of all of our citizens into account.

Finally, government plays a vital role in basic R&D because markets and industries find this too risky and will invest in short-term less risky ventures which curtails innovation from new research.  Government’s investment in infrastructure not only provides good jobs that stimulate the economy, but builds the necessary infrastructure from which industry can leverage, thrive, and compete in the future.  So again small government is not the goal, smart government is.  Welcome to the world of Progressives.

More Socialism

From the NYT today on Boeing threat to move to another state besides Washington if they don’t get enough tax breaks:

Corporate shopping for the best deal, the lowest taxes and the sweetest incentives is a multibillion-dollar enterprise in America — often with outcomes that do not fully materialize or cannot be accurately measured even for the winning contenders. An investigation by The New York Times last year found that more than $80 billion a year in incentives are given by states, cities and counties to companies that often pit local officials against one another to get the most lucrative packages.

That would be what you and I pay for them to do business and steals tax revenue away from schools, infrastructure, parks, pensions, healthcare, you name it. See it is only socialism if the spending is on people in need, but giveaways to corporations who are getting fat off of them, well that is capitalism. Not.

The federal government spent $59 billion on typical social programs and bout $92 billion on corporate subsidies. Or put another way:


You will find that you subsidize global warming, the over fishing of the oceans, Wal-Mart, and it goes on an on. So when we talk about socialism, we are really just talking about whose socialism. The conventional wisdom was that these businesses and their subsidies were good for creating jobs and expanding the tax base, but the numbers don’t support that.

Corporations are looking for the lowest common denominator to reduce wages and maximize corporate profits. Politicians play into the game by competing with your tax dollar give-aways. And of course the middle class slowly disintegrates. So the next time you hear about self-sufficiency and the market place chooses winners and losers, when you stop laughing, point out that they are so on the dole.

Random Thoughts on News of the Day

Hugo Chavez is dead and I have very mixed emotions. He was a giant thorn in America’s side, he may of been a bit of a tyrant, albeit, a popular one that was democratically elected even given some gerrymandering, but he cared about the poor. And he didn’t just care about them, in many ways he made their lives better at the expense of the 1%. We have a society that is based around the 1% and our approach to capitalism is transferring more and more of our wealth to this 1%. So for all his warts, Hugo was a counter to that ideology and the question to be answered, if you define good as the good to the most people, who is doing more good. Is it possible that from Hugo and yes even Fidel, we could learn something about taking care of all our citizens?

The President is looking for a grand bargain again and I recoil at the thought. Well let me explain. A grand bargain that recognized cutting right now, at least with a meat cleaver is bad, that some focused cutting, along with tax reform and reinvestment of most of the savings in jobs, and an automatic trigger around the unemployment rate to be invested in bringing down the deficit (as a % of GDP) would be a grand idea. I would even go along with cutting the cost of entitlements through a reform in how the program operates to control costs (not in the entitlements themselves). All of this is achievable and I would say most Americans would support it if they understood it.

But the grand bargain that is more likely to be on the table is just a milder form of the sequester, with some tax revenues, and cuts to both Social Security and Medicare/Medicaid. But as Gregg Sargent pointed out this morning, this may not be such a bad idea if it demonstrates how intransigent the Republicans really are. The reality is that as Ed Schultz on MSNBC said last night, the Republicans (at least in the House) are not going to agree to anything because it would be seen as a win for the President and they are back to the Mitch McConnell strategy of a one term president, failing to recognize he is in his second term. When it comes to have the Republicans learned anything from the last election, that answer is a resounding no. Nothing has changed in the basic structure of the Republican Party that would allow a change in ideology. See Jeb Bush revise his stance on citizenship for immigrants.

Tom Friedman had an Op-Ed this morning on the mixing of lecture and class room with web learning. Tom scares me from time to time because he spends a great deal of time with business types so in one sense, he is focused on producing worker drones for the economy, not on what the economy should be producing or what is a quality life. But having said that, this is probably the future of education for the masses and could work. I have some reservations though that need to be considered and that is what is the real function of education. Well, I know that answer, but I don’t think Tom does. He is looking for people who have skills for the economy of tomorrow. I am looking for people who have two things, critical reasoning skills, and the ability to learn all their lives.

Imparting facts is one thing, but knowing how to think critically with those facts is a whole other thing. I only think that comes from interaction and challenge, not something you read on the web. That is not to say this cannot be achieved with this type of mixed learning, just that it is what has to be achieved. The second part of the equation is to be a learning machine. To be equipped to change and learn new things. The stuff I learned in college is a basis for my profession, but without continued learning, I would not be much of an engineer today. I would add that much of our critical learning will come from the humanities and arts, not from the techno education necessary to man the businesses of tomorrow. Knowing what we do with our wealth is so much more important than knowing just how to acquire it.

Finally, Paul Krugman had an interesting quote from John Maynard Keynes in his blog this morning that is worth repeating. He was talking about the criticism he has received for using “picturesque language” (example: zombie ideas) to describe some of the positions of those in charge, and how sometimes this language is necessary to shake people out of their complacency tree. Professor Keynes said:

Words ought to be a little wild, for they are the assault of thoughts on the unthinking.

Amen to that brother.