Saturday, February 7, 2015

Weekend Roundup

I threw this together rather quickly, but here are some links of interest this week:

  • Thomas Frank: It's not just Fox News: How liberal apologists torpedoed change, helped make the Democrats safe for Wall Street:

    As the Obama administration enters its seventh year, let us examine one of the era's greatest peculiarities: That one of the most cherished rallying points of the president's supporters is the idea of the president's powerlessness.

    Today, of course, the Democrats have completely lost control of Congress and it's easy to make the case for the weakness of the White House. For example, when Frank Bruni sighed last Wednesday that presidents are merely "buoys on the tides of history," not "mighty frigates parting the waters," he scarcely made a ripple.

    But the pundit fixation on Obama's powerlessness goes back many years. Where it has always found its strongest expression is among a satisfied stratum of centrist commentators -- people who are well pleased with the president's record and who are determined to slap down liberals who find fault in Obama's leadership. The purveyors of this fascinating species of political disgust always depict the dispute in the same way, with hard-headed men of science (i.e., themselves) facing off against dizzy idealists who cluelessly rallied to Obama's talk of hope and change back in 2008.

    Frank brings up many examples, especially the Obama administration's response to the financial collapse and recession of 2008:

    It would have been massively popular had Obama reacted to the financial crisis in a more aggressive and appropriate way. Everyone admits this, at least tacitly, even the architects of Obama's bailout policies, who like to think of themselves as having resisted the public's mindless baying for banker blood. Acting aggressively might also have deflated the rampant false consciousness of the Tea Party movement and prevented the Republican reconquista of the House in 2010.

    But Obama did the opposite. He did everything he could to "foam the runways" and never showed any real interest in taking on the big banks. Shall I recite the dolorous list one more time? The bailouts he failed to unwind or even to question. The bad regulators he didn't fire. The AIG bonuses that his team defended. The cramdown he never pushed for. The receivership of the zombie banks that never happened. The FBI agents who were never shifted over to white-collar crime. The criminal referral programs at the regulatory agencies that were never restored. The executives of bailed-out banks who were never fired. The standing outrage of too-big-to-fail institutions that was never truly addressed. The top bankers who were never prosecuted for anything on the long, sordid list of apparent frauds.

    Frank concludes that "the financial crisis worked out the way it did in large part because Obama and his team wanted it to work out that way." After all the "hopey-changey" campaign blather in 2008, it came as a shock to discover how hard Obama would work to conserve a banking industry which had frankly gone berserk: not only could Obama not imagine America without its predatory bankers, he couldn't imagine changing ownership of those banks, or even dislodging Jamie Dimon from Chase. It's not clear that anyone in the Republican party is that conservative. Rather, they are like those proverbial bulls in the china shop, blindly breaking stuff just to show off their power.

  • Paul Krugman Reviews The Rise and Fall of American Growth by Robert J. Gordon: Gordon's big book (762 pp.) argues that growth is largely driven by the introduction of new technologies, but that not all technologies have the same growth potential. In particular, a set of technological breakthroughs from the late 19th century up through the 1930s drove high rates of growth up to about 1970, but more recent innovations have had much less effect, so the prospects for future growth are much dimmer. This is pretty much the thesis of James K. Galbraith's 2014 book, The End of Normal: The Great Crisis and the Future of Growth, who I suspect is clearer about why this is the effect, while spending a lot less time on the case histories. For Galbraith, the key is that the earlier innovations tended to move work from the household to factories while cheaper transportation and energy made those factories much more cost-effective. On the other hand, recent innovations in computing and automation increase efficiency at the expense of jobs, and increasingly some of those labor savings are taken as leisure. One reason this matters is that our political system was built around an assumption that growth makes up for inequality -- that conflict over the distribution of wealth is moot as long as there is ample growth for all. But this isn't something that we're just discovering now: growth rates in the US started to dip around 1970, and the result over the next decade was the growth of a conservative political movement that aimed to maintain profit rates even as growth slumped. I actually think that shift was triggered by more tangible factors -- peak oil, moving from a trade surplus to deficit, the many costs of the Vietnam War (including inflation) -- but the technology shift helps explain why no amount of supply-side stimulus ever did any good: every subsequent growth spurt has turned out to be a bubble accompanied by more/less fraud. Krugman suggests some of this, but the more explicit (and challenging) suggestions are in Galbraith's book. Krugman:

    So what does this say about the future? Gordon suggests that the future is all too likely to be marked by stagnant living standards for most Americans, because the effects of slowing technological progress will be reinforced by a set of "headwinds": rising inequality, a plateau in education levels, an aging population and more.

    It's a shocking prediction for a society whose self-image, arguably its very identity, is bound up with the expectation of constant progress. And you have to wonder about the social and political consequences of another generation of stagnation or decline in working-class incomes.

    A couple more things worth noting here. One is that the exceptionally high growth rates of recent years in China, India, and similar countries is tied to them belatedly adopting the technologies that fueled high growth in Europe and America nearly a century ago. Nothing surprising here, although one would hope they'd be smarter about it. The other is that while newer technologies produce less economic growth, they still quite often have quality of life benefits. So while wages and other economic metrics have stagnated, many people don't really feel the pinch. (And where they do, I suspect is largely due to the oppressive weight of debt.)

  • Paul Krugman: Electability: Alright, so Vox asked 6 political scientists if Bernie Sanders would have a shot in a general election, and they said: no, no way. In particular:

    Fear of sudden, dramatic change could impede Sanders in a general election. But just as powerfully, Republicans could also successfully portray Sanders as out of step with the average American's political views, according to the academics interviewed for this story.

    There isn't a lot of doubt that this would have a big impact in an election. Political scientists have had a pretty good idea since the 1950s of how voters tend to make their choices: by identifying which candidate fits closest to them on an ideological spectrum.

    Who's Krugman to argue with such august personages:

    I have some views of my own, of course, but I'm not a political scientist, man -- I just read political scientists and take their work very seriously.

    After all, man, they're scientists! They must be right, even though Krugman has occasionally -- well, more like 3-4 times a week -- been moved to note that the professional practitioners of his own branch of the social sciences, economics, often have their heads wedged. But, I guess, political science must be much more objective than economics, more predictive and all that, less likely to be biased by the political biases of its researchers and analysts. Sure, makes a lot of sense. After all, I know a lot of people who went into political science, and who among them did so because they were interested in politics? Uh, every one of them. I myself majored in sociology, and spent most of my time there dissecting the myriad ways biases corrupt research. I could have done the same thing in economics or political science, but the nonsense in those social sciences was just too easy to debunk. But it's been ages since I've been so reminded how shoddy political science is as I was by the Vox article.

    As for Krugman's value-added, there really isn't any. He doesn't even explain why electability is such a concern. He just proclaims, "The stakes are too high for that, and history will not forgive you," after taunting us: "That's what Naderites said about Al Gore; how'd that work out?" So, like, it's my fault Gore couldn't make a convincing argument why Bush would be a much more terrible president than himself? Sure, in retrospect that's true. In retrospect, it's also clear that enough hints were available at the time to make that argument -- and it's not only Gore's fault that he failed to do so, you can also blame a press that was totally smitten with Bush's good ol' boy shtick.

    I don't doubt the importance of the election, at least in terms of how much damage a Republican victory might inflict. But I don't buy the idea that we all live on a simple left-right ideological continuum, let alone that we all make rational choices based on who is closest to one's individual perch. Gore's problem, for instance, wasn't that he wasn't close enough to the median voter. It was more like he didn't convince enough of his base that he would fight for them, that his election would be better off for them than Bush's. No doubt Clinton is closer to that median voter, but will she fight for you? Or will she cut a deal with whatever donor woos her most? My first close encounter with Hillary was listening to a radio interview with her while her ill-fated health care plan was still in play. She was asked how she would feel if it was rejected, and she said "sad." Right then I realized this was a person who didn't care enough even to get upset. Sanders wouldn't take that kind of rejection lying down. But the Clintons simply forgot about health care for the rest of his terms, and went on to doing "pragmatic" things the Republicans would let them pass: NAFTA, welfare "reform," the repeal of Carter-Glass.

  • Robert Freeman: The new social contract: This is what's roiling the electorate & fueling the success of anti-establishment candidates Trump, Cruz and Sanders: Actually, less about those candidates -- that's just bait -- than the dissolution of the notion that rich and poor are bound together through a "social contract":

    But shared prosperity is no longer the operative social contract. Ronald Reagan began dismantling it in 1981 when he transferred vast amounts of national income and wealth to the already rich. He called it "supply side economics."

    Supposedly, the rich would plow their even greater riches back into the economy, which would magically return that wealth -- and more -- to everyone else. George H.W. Bush called it "voodoo economics." It seemed too good to be true. It was. Consider the facts.

    Since the late 1970s, labor productivity in the U.S. has risen 259 percent. If the fruits of that productivity had been distributed according to the post-World War II shared prosperity social contract the average person's income would be more than double what it is today. The actual change?

    Median income adjusted for inflation is lower today than it was in 1974. A staggering 40 percent of all Americans now make less than the 1968 minimum wage, adjusted for inflation. Median middle-class wealth is plummeting. It is now 36 percent below what it was in 2000.

    Where did all the money go? It went exactly where Reagan intended.

    Twenty-five years ago, the top 1 percent of income earners pulled in 12 percent of the nation's income. Today they get twice that, 25 percent. And it's accelerating. Between 2009 and 2012, 95 percent of all new income went to the top 1 percent.

    This is the exact opposite of shared prosperity. It is imposed penury That is the new deal. Or more precisely, the new New Deal, the new social contract.

    Freeman is right that this is the rot and ferment that breeds support for "anti-establishment" candidates. Trump and Sanders have different answers to the problem: Trump flames foreigners, and that seems to appeal to certain voters; Sanders blames the rich, and that appeals to others. I'm less sure why Freeman lumps Cruz here. Sure, he's "anti-establishment" in the sense that he too has a scapegoat: the government. But he has the very opposite of a solution.

    I should also quote Freeman on Clinton and Sanders, since this runs against the "common sense" of Krugman's "political scientists":

    It is unlikely Hillary will pull many Republicans away from whomever the Republicans nominate. She is both an object of visceral hatred to most Republicans and the establishment candidate in a year of anti-establishmentism.

    Sanders, on the other hand, pulls well from disaffected Republicans. He has little of Hillary's baggage and polls much better against either Trump or Cruz than does Hillary. He is anti-establishment in a year of ervid anti-establishmentism, a fiery mouthpiece for the intense cross-partisan anger roiling the electorate.

    If Sanders can survive the primaries he has a much greater chance of beating any Republican challenger than does Hillary. Whether he can implement his vision of a retrofitted social contract is another matter.

  • Links on the presidential campaign trail:

Also, a few links for further study (briefly noted:

  • Andrew J Bacevich: Out of Bounds, Off-Limits, or Just Plain Ignored: Sub: "Six national security questions Hillary, Donald, Ted, Marco, et al., don't want to answer and won't even be asked." Only one has to do with the "war on terror" -- still the biggest game in town. Not sure that Bacevich has much of a handle on his question six: "Debt."

  • Tom Engelhardt: "The Finest Fighting Force in the History of World": Take Afghanistan, for instance. Engelhardt cites Anand Gopal's No Good Men Among the Living, America, the Taliban, and the War Through Afghan Eyes, which argues that the Taliban disbanded and dissolved after their first taste of American firepower, but the US couldn't leave well enough alone:

    Like their Bush administration mentors, the American military men who arrived in Afghanistan were determined to fight that global war on terror forever and a day. So, as Gopal reports, they essentially refused to let the Taliban surrender. They hounded that movement's leaders and fighters until they had little choice but to pick up their guns again and, in the phrase of the moment, "go back to work."

    It was a time of triumph and of Guantánamo, and it went to everyone's head. Among those in power in Washington and those running the military, who didn't believe that a set of genuine global triumphs lay in store? With such a fighting force, such awesome destructive power, how could it not? And so, in Afghanistan, the American counterterror types kept right on targeting the "terrorists" whenever their Afghan warlord allies pointed them out -- and if many of them turned out to be local enemies of those same rising warlords, who cared?

    It would be the first, but hardly the last time that, in killing significant numbers of people, the U.S. military had a hand in creating its own future enemies. In the process, the Americans managed to revive the very movement they had crushed and which, so many years later, is at the edge of seizing a dominant military position in the country. [ . . . ]

    It's probably accurate to say that in the course of one disappointment or disaster after another from Afghanistan to Libya, Somalia to Iraq, Yemen to Pakistan, the U.S. military never actually lost an encounter on the battlefield. But nowhere was it truly triumphant on the battlefield either, not in a way that turned out to mean anything. Nowhere, in fact, did a military move of any sort truly pay off in the long run. Whatever was done by the FFFIHW and the CIA (with its wildly counterproductive drone assassination campaigns across the region) only seemed to create more enemies and more problems.

    Engelhardt concludes that "Washington should bluntly declare not victory, but defeat, and bring the U.S. military home. Maybe if we stopped claiming that we were the greatest, most exceptional, most indispensable nation ever and that the U.S. military was the finest fighting force in the history of the world, both we and the world might be better off and modestly more peaceful."

  • Ann Jones: Social Democracy for Dummies: After having written books on American failure in Afghanistan and on how maimed US veterans have fared on their return, Jones moved to Norway, to see what life is like in an affluent country free from war. Not bad, really.

  • Thomas Piketty: A New Deal for Europe: The author of possibly the most important book yet in growing inequality, Capital in the Twenty-First Century, offers a few modest proposals for reforms in the Eurozone. Also see Piketty's earlier review of Anthony B Atkinson's Inequality: What Can Be Done?: A Practical Vision of a More Equal Society.

  • Philip Weiss: Dov Yermiya, who said, 'I renounce my belief in Zionism which has failed,' dies at 101. Yermiya fought in Israel's "War for Independence" in 1948, and only issued his renunciation in 2009, in a letter quoted here. You might also take a look at Steven Erlanger: Who Are the True Heirs of Zionism? -- which starts with a bloody admission:

    ZIONISM was never the gentlest of ideologies. The return of the Jewish people to their biblical homeland and the resumption of Jewish sovereignty there have always carried within them the displacement of those already living on the land.

    The Israeli general and politician Yigal Allon defined Zionism in 1975 as "the national liberation movement of a people exiled from its historic homeland and dispersed among the nations of the world." Some years later, and more crudely, perhaps, another general and politician, Rehavam Ze'evi, a tough right-winger, said, "Zionism is in essence the Zionism of transfer," adding, "If transfer is immoral, then all of Zionism is immoral."

    Admissions like this were rarely broadcast to the public during the early days of Israel, when David Ben-Gurion spoke of Israel becoming "a state just like any other." So the recent tendency to speak in such terms may sound like a confession but is rarely accompanied by reflection much less shame: rather, they are bragging, and preparing the grounds for another round of "ethnic cleansing."

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