Archive for the ‘Political Philosophy’ Category

AT&T Is Asking Us To Trust Them

Saturday, April 23rd, 2011

Earlier this week, I noticed a bit of traffic hitting an old post of mine about AT&T’s unlikely sponsorship of libertarian ideologues as they attempt to stop net neutrality. (Unlikely given their history of constantly pleading for government intervention in their favor.) I followed the source to the AT&T’s forum but could find no link leading back to my rather critical post about AT&T.

So, today, I decided to check on what had happened. I didn’t see any easy way to contact the people posting or the moderators, so I posted myself asking if anyone knew what had happened. Tifa_Shines “answered” my question by censoring my link as “spam.”

Her message to me justifying her censorship said:

Links to material that contains political discussion and/or promotion of third party websites are violating the guidelines and will be removed.

And further that it is “inappropriate” and “unacceptable” to:

discuss[...] participant bans or other Moderator actions

I replied thanking her for “answering” my question — and that post was subsequently deleted. In my 5 minutes as a member of AT&T’s Community Forum, I discovered at least 2 rules:

  • Thou shalt not discuss the political activities AT&T engages in rather than providing decent service.
  • Thou shalt not discuss when AT&T censors you so as better to maintain the fiction of a ‘Community’ Forum.

Knowing that links AT&T, for whatever their reason, did not approve of were labeled “not relevant” and “spam,” I went back to the original page that was the source of traffic and found the offending, censored post — attempting to put AT&T’s bandwidth caps in the context of it’s efforts to fight net neutrality and their history of attacking every innovation from the Hush-A-Phone to the internet in their quest to create “the perfect system” without being distracted by that terrible thing called competition, and coincidentally, extracting the maximum profit from their customers.

In the scheme of things, the injustice of this censorship is rather small. AT&T is a private company and they can do whatever they want in a private forum that they run. Even the Westboro Baptist Church has rights.

But AT&T, by opposing net neutrality, is asking that we as a people trust them to not censor the internet.

They are asking for permission to change the structure of the internet by violating one of it’s foundational principles — net neutrality. (A principle that AT&T coincidentally opposed when government scientists were attempting to create the internet in the 1950s.)

They are asking that we trust them to not make websites that disagree with them slower and making those they approve of faster.

They are asking that we trust them as an ISP to provide access to content that criticizes them.

They are asking that we trust them not to quash the next disruptive technology that will use the internet in ways we haven’t yet thought of or that will be even better than the internet.

Their sordid history of pleading for special favors from the government to destroy any opponent or innovator (as detailed in many places, but most memorably and recently, in Tim Wu’s The Master Switch) – and their attempts to strangle the internet before it even existed — gives us little reason to trust them.

Their bankrolling of former libertarian economists and thinkers such as Adam D. Thierer (who before they sold out were vicious critics of AT&T) to lie about net neutrality gives us little reason to trust them.

AT&T’s attempts to game the political system with a “slush fund” sponsoring what former VP and Director of Communications, Dick Martin, called “so-called ‘grassroots’ organizations all over the place, astroturfing the countryside” give us little reason to trust them.

That various people AT&T has sponsored (including Grover Norquist) have now joined up with right wing religious fanatics to oppose net neutrality on the grounds that it will prevent the censorship of “obscenity and other objectionable content,” is yet another reason not to trust AT&T.

To summarize, AT&T is making the argument that they should be trusted as a steward of the internet and that the government should not allowed to protect one of the foundational principles of the internet that has made it a libertarian utopia of competition and free markets in the name of…libertarianism. Yet it’s history and current incarnation betray a culture of censorship and anti-competitive behavior that extends down to an Orwellian policing of it’s ‘Community’ Forum — labeling links it disagrees with as “Spam” and forbidding any discussion of it’s own censorship.

If it succeeds in overturning net neutrality, how much longer will it be before any website criticizing them is labeled as spam — just as a link to my blogpost criticizing them was? And how long before any attempt to discuss such labeling will be forbidden as against the user agreement you accept by getting your internet through AT&T?

Mad? Want to do something? Take a moment and email your Congressperson today to tell them how important net neutrality is to you.

Capitalism in Practice

Tuesday, April 19th, 2011

I’ve started Tim Wu’s The Master Switch, a history of information industries in America; and having read Ayn Rand’s fictional Atlas Shrugged earlier this year — I wonder what Rand would make of this history of industrial warfare.

One of the motifs of Wu’s history is a theme of Rand’s novel — the extreme lengths the rich and powerful will go to in order to quash a disruptive technology. In the novel, it was Rearden steel — a metal stronger, cheaper, and better in every way than ordinary steel; in Wu’s history, it is every technological innovation from the phone to FM radio to television to the internet. In both history and the novel, the established industry used corrupt scientific experts, intimidation of suppliers, government regulation, and the blocking of financing to prevent the disruptive technology from taking off.

Rand’s novel though divides the everyone into two categories: the productive who are proud, competitive, inventive individuals who make everything of worth; and the looters who are unproductive and seek to leach off of the productive using the government, religion, and pity.

Wu’s history reveals a rather different story. There is no figure in history to match the strong, creative, independent, self-made industrial magnate Dagny Taggart. There are few who resemble her brother, the weak, dependent, self-loathing James Taggart who adds nothing of worth to the business except to plead with the government to stop his competitors because their superiority is unfair,

Only rarely do the inventors become rich. More often, they are outmaneuvered by corporate titans who use every means at their disposal to win. When Edwin Armstrong invented FM radio in 1934, he had pioneered a technology that allowed for better sound quality and that could fit more stations in the same radio spectrum with less interference. David Sarnoff, a major figure in the AM radio industry, was able to prevent FM radio from gaining wide acceptance until the 1970s through a combination of public propaganda, lobbying to change obscure rules relating to radio spectrum usage, and control over the manufacturing of radio players. David Sarnoff managed a vast business empire; he was at the cutting edge of innovations in radio and television. He won not because he was weak and unproductive (as Rand’s villains are) — but because he was ruthless.

Rand’s many fans aren’t typically the creative inventors. They are the very businessmen who see moral justification for their wealth in her philosophy. But they, like the businessmen in Wu’s history, are distinguished not for their purity of motive or love of competition, but their willingness to use any means at their disposal to achieve the corporate empire they seek. Unlike the fictional heroes of Rand’s novel, they do not seek competition. They seek a final victory and end to the competition.

In the theories of Rand and many of her acolytes, capitalism is about competition. In practice, capitalism has about brute strength and force used in restraint of competition.

[Image by Ron Schott licensed under Creative Commons.]

Right Wing Mythology

Sunday, March 27th, 2011

My normal tack — when seeing a political cartoon like this that is so clearly off-base — is to “Fact-Check” it.

For example, the cartoon might lead you to believe that there was no unemployment compensation in 1950 — but unemployment compensation began in in 1935.

It’s not clear under what program the rich banker is paying for the unhygienic poor man’s mortgage either now or then. Federal housing policy offers tax subsidies to anyone paying a mortgage — which means the man on the right probably receives a bigger subsidy.

The health care point is likewise odd. In the 1950s, there was no Medicaid for the very poor. But everyone who received health insurance from their employer received a tax subsidy [pdf] both then and now.

In terms of subsidizing car ownership — federal and state policies began encouraging car ownership in the 1950s — from zoning laws requiring large amounts of parking to bailouts given to the auto industry to the construction of the federal highway system. The artificially low price of gasoline is another subsidy — as the cost of pollution and of a foreign policy of ensuring stability in the Middle East is borne by the public at large and not factored into the price. As everyone pays for pollution cleanup and foreign policy, this is a redistribution of wealth from those who minimize their use of gas to those who use more than the average. However, the complaint of cartoonist seems to be a tax subsidy given to those who purchase hybrid cars that use less gasoline. Which — though significantly less than the various other subsidies — is apparently the real obscenity.

And of course, the biggest thing the cartoonist is missing between the man on the right in 1950 and the man on the right in 2010: In 1950, the top marginal tax rate was 91%. In 2010, it was 35%. And that 35% doesn’t include all of the tax subsidies that surely would be used to lower the rich man’s tax rate — from tax subsidies for his employer-provided health insurance to any interest on mortgages or student loans or the myriad of other exemptions someone with a good accountant can find. And of course any profits from investments would be taxed at a lower rate– of 15%. Which is why today, the billionaire Warren Buffett pays a lower percentage of his income in taxes than does his secretary.

All of this makes the cartoon all the more revealing — not of the facts, which it does not reflect — but of right-wing mythology. Why does the cartoonist choose 1950 — rather than a time such when his points would have been true such as 1920 or 1890? The answer is simply that no one wants to go back those eras. Those were periods of economic growth, but inherently unstable times — an instability created by the enormous inequality between the top-most and the bottom-most parts of society. Those periods of history are remembered for the top and the bottom. The 1950s though was the era of the great middle class — robust, strong, stable. In the contemporary conservative mythology, the era personifies the American values of family and hard work. Much of the conservative intelligensia’s opposition to the Civil Rights Movement, the anti-war movement, the sexual revolution, the feminist movement, and the gay rights movement of the 1960s and 1970s came because they saw these movements as a threat to the stability of this status quo.

But the right wing was supported by forces equally opposed to the status quo — who sought a change every bit as dramatic as the radicals of the 1960s sought. Rather than free love, they sought free trade and deregulation. Rather than rights for gays and women, they sought favors for the financial industry. Rather than civil rights for people, they sought corporate rights to influence the political process. Rather than the naive dream of destroying bigotry, they sought the more practical dream of destroying the labor unions.

Since these twin political revolutions, the stability and the strong middle class of the 1950s are remembered with fondness — by mythologists of both the left and right. The conservative argument used to be that radicalism of Civil Rights for women, blacks, gays, and other minorities was what caused the unraveling of this mythological utopia. It has now evolved to blaming the government for redistributing too much to the poor and holding back business with taxes and regulation. The only problem with this story is that the past 60 years have seen a government retreat — with regulations being repealed and failing to keep up with changing times, with taxes having been more than halved, with the rich getting more and more of the wealth and power in the country and the poor less and less.

Which is how you can get a political cartoon such as this — harking back to a flatly false view of an era lost that never was.

The Sheeple of r/libertarian

Tuesday, March 15th, 2011

The rantings of a self-proclaimed “Libertarian Asshole” who is so incredibly deluded as to think that the America is approaching something worse than a despotic government — an “Absolute Despotism!” — aren’t generally worth responding to. But I like reddit — and I like libertarians. Which is why I’ve been consistently frustrated with the regressive turn that the /r/libertarian has taken since Obama’s election.

How else to explain the popularity of the Libertarian Asshole’s factually-challenged post blaming “Liberals” for the Bush administration’s regulation being enforced in his story?

As a liberal, let me tell you that stories of government corruption and government idiocy, of victimless crimes prosecuted and overreach make me mad. I believe in good government — and not government and regulation for it’s own sake. I believe a law should not be unjustly applied. Liberals have made a strong showing in opposing regulatory capture – when organized lobbies of special interests (such as optometrists) are able to get a regulatory agency to act against the interests of the public and in favor of the lobby. That’s why liberals have fought against the FCC to allow for more competition on the radio waves and that’s why liberals pointed to the corruption in the Minerals Management Service. That’s why Matt Yglesias — one of the web’s most prominent liberals — focuses so much on opposing rent-seeking and unnecessary regulation. As a liberal, I believe the government is capable of acting in the public interest — but that citizens must always provide a check against the inevitable abuses.

I only state this because in the world of the Libertarian Asshole, the phantom “Liberals” are those who say the “Law’s the Law” as they turned in runaway slaves because they…are like “cheap whores” with no self esteem.

With that brilliant insight into the Liberal mind, this Asshole struck r/libertarian gold — as 268 redditors and counting demonstrate.


One more thing: The Libertarian Asshole apparently wasn’t satisfied with a rather sympathetic story of a businesswoman who was busted for selling decorative contact lenses without prescriptions and made to sell her car.

He had to embellish. And by embellish, I mean, apparently, to lie. A few minutes on Google reveals the following:

  1. Lie: The Libertarian Asshole claims that Da Young Kim, who ran an internet store selling contact lenses, was “arrested” for doing so.
    Fact: The Court records and the FTC’s records both show that this was a “civil complaint” — not a criminal one. No where does the news or any other source support the out-of-the-blue claim that Kim was arrested.
  2. Lie: The Libertarian Asshole claims that the FTC spent “your tax dollars on an undercover sting operation.”
    Fact: There’s nothing in the news or in the record or elsewhere on the web to back this up. None of the evidence presented against Kim was from any sting operation.
  3. Lie: The FTC acted because they believed the internet store run by Da Young Kim “might not be checking every customer’s prescription.”
    Fact: According to the FTC complaint, Kim kept no records of prescriptions at all. This wasn’t a few contact lenses sold without prescription — this was a business plan.

Some brief thoughts on Rand Paul

Thursday, May 20th, 2010

All those people who brand Rand Paul a racist and use this clip to prove it aren’t worthy of serious consideration. It is either ignorance of libertarian philosophy or partisan hackery to claim so. It isn’t racism to claim that the government has no right to intervene in private businesses to stop discrimination.

As Ezra Klein explains though, it is relevant:

Paul’s defense of himself is that his take on the Civil Rights Act has nothing to do with race and so he is not a racist. But by the same token, the fact that Paul’s view on the Civil Rights Act is so dominated by his libertarian ideology that he cannot even admit race and segregation into the calculus is exactly why this is relevant to Paul’s candidacy, why it’s an issue and why it’s among the best evidence we have in understanding how he’ll vote on legislation that comes before him. If this isn’t about race, then it is about all questions relating to federal regulation of private enterprise. As a senator, Paul will be faced with that question frequently. And his views on it are clearly very, very far from the mainstream.

These libertarian views do reflect accurately an ideology whose language is gaining prominence in the GOP in the form of the Tea Party movement. This movement in its different incarnations has been around for some time, and emerged as a populist right-wing backlash to John F. Kennedy, to Bill Clinton, and now to Barack Obama. In each instance, the movement died as soon as it gained a toehold on power as it had no real agreed-upon agenda other than opposition to “liberalism=socialism=communism.”  Andrew Sullivan puts his finger on an important aspect of this:

[T]he tea-party movement [is] un-conservative. It is dealing with the world as it would like it to be, not as it is. It has an almost adolescent ideal it cannot compromise. I think that makes the movement, in its more serious incarnation (like Paul), a useful addition to the public debate, especially in reminding the GOP of some core principles it threw away under Bush and Cheney… Its bright, fixed glare also helps us illuminate what we believe in – merely by revealing what we no longer believe in.

I agree with Connor Friedsdorf and Andrew Sullivan and Daniel Larison that Rand Paul’s nomination is a good thing. Even if he wins the Senate seat, I see this as a good thing. To have his voice, his ideological clarity, as 1 of 100 would improve the Senate. The fact that his extremism could lead him to side with the Democrats on some issues (if he was able to resist the partisan pressures in Washington, which is a big if) and that his extremism could simultaneously help discredit and marginalize the GOP are both bonuses. Even without these, I would see his election as a net positive as it would give some measure of power to those people whose inchoate anger has helped form the Tea Party movement and force its members to make hard decisions about what they actually want.

Rand Paul is the rare right-wing politician who doesn’t just bad-mouth government but wants to get rid of the Federal Reserve, who opposes the government encroachment represented by the Civil Rights Act of 1964 as well as the PATRIOT Act and the Affordable Care Act, who opposes Social Security and Medicare as well as any new additions from Obama. He would never campaign in favor of Medicare while calling Obamacare socialism — he would deride them both as such.

This is why I see Rand Paul as a clarifying figure who can help move our national debate forward — if he remains honest.

[Image by Gage Skidmore licensed under Creative Commons.]

Connecting the Dots on Epistemic Closure

Tuesday, May 4th, 2010

The epistemic closure debate has been raging around the internets these past few weeks — and it has generated some extremely sharp commentary among liberals who pay attention to conservatives and conservatives who have been drummed out of the “conservative movement.” Slate now even offers to test your web browser history to see how epistemically closed you are. Here’s some of the more insightful comments I’ve found:

Ezra Klein:

“Epistemic closure,” Julian Sanchez writes, is the toxic result of “confirmation bias plus a sufficiently large array of multimedia conservative outlets to constitute a complete media counterculture, plus an overbroad ideological justification for treating mainstream output as intrinsically suspect.” It is, in other words, the conditions necessary for a political movement to fool itself into believing whatever’s convenient. And, Sanchez says, it’s one of the serious problems facing the conservative movement right now.

Jonathan Bernstein:

[T]he real test of whether conservative (and Republican) decision-makers really believe the nonsense rhetoric that they often use will be Sarah Palin, 2012.  For there can be no question but that a lot of Republican pols act as if they are fully captured by what Andrew Spung calls the “screamosphere” — thus the endless repetition of factually incorrect assertions, such as the “10/6“  and “16K” claims about health care reform.  But of course pols of all stripes — not to mention propogandists such as those on talk radio — have never been known for being especially careful about facts.

Bruce Bartlett:

After about half an hour I decided to start asking people what they thought of the article. Every single one gave me the same identical answer: I don’t read the New York Times. Moreover, the answers were all delivered in a tone that suggested I was either stupid for asking or that I thought they were stupid for thinking they read the Times.

I suppose this shouldn’t have surprised me, but it did. After all, the people I was questioning weren’t activists from the heartland, but people who worked on Capitol Hill, at federal agencies, in think tanks and so on. They represented the intelligentsia of the conservative movement. Even if they felt they had no need for the information content of the nation’s best newspaper, one would have thought they would at least need to know what their enemies were thinking.

Matt Yglesias:

Just as conservative legislative politics isn’t really about free markets conservative judicial politics isn’t really about restraint. The rhetoric is just rhetoric, and the reality is that conservative politics is about conservatism—about entrenching the power and influence of the dominant economic and sociocultural groups.

Jonathan Chait:

Michael Brendan Dougherty writes:

[T]he Tea Party is nothing more than a Republican-managed tantrum. Send the conservative activists into the streets to vent their anger. Let Obama feel the brunt of it. And if the GOP shows a modicum of contrition, the runaways will come home. …

The Tea Party movement creates the conditions in which the activist base of the GOP can feel like it is part of the game again. They can forget Bush-era betrayals, swallow their doubts, and vote Republican this November. The next Reagan is coming, the next Contract With America will work, the next Republican nominee will be one of us. All it takes is for someone to appreciate the anger—and it doesn’t matter that she supported the bailouts that enraged them or the candidate who forsook their ideas and support.

Former GOP staffer Scott Gallupo comments, “I don’t deny the Tea Partyers’ sincerity. But anyone who doesn’t see the reality of the Dougherty scenario is simply being painfully naive.” [my emphasis]

Jonathan Bernstein:

The accusation isn’t that conservatives all reach the same conclusions about everything, nor is it that conservatives are excessively politically correct, nor is it that conservatives demand strict adherence to a set of ideas if one is to remain a conservative in good standing.  It’s rather about information, and what counts as evidence about the real world.  Sanchez’s point is that if one only gets information from a narrow set of sources that feed back into each other but do not engage beyond themselves, that one will have a closed mind (not his phrase, by the way) regardless of what one does with that information.

Ross Douthat:

It’s precisely because American conservatism represents a motley assortment of political tendencies united primarily by their opposition to liberalism that conservatives are often too quick to put their (legitimate, important and worth-debating) differences aside in the quest to slay the liberal dragon. After all, slaying liberalism is why they got together in the first place! And it’s precisely this motley, inconsistent quality, too, that encourages activists and pundits alike to stick to their single issue or issues and defer to the movement consensus on everything else. So pro-lifers handle abortion, Grover Norquist handles taxes, the neoconservatives handle foreign policy and the Competitive Enterprise Institute handles environmental regulations and nobody stops to consider if the whole constellation of policy ideas still makes sense, or matches up the electorate’s concerns, or suits the challenges of the moment. This unity-in-opposition was a great strength for the right for a long, long time, but it’s made conservatism much more brittle and less adaptable than it needs to be right now.

Daniel Larison:

The dispiriting part of all this is that hating liberals more than loving liberty is hardly a new phenomenon. Unfortunately, it has defined a large part of postwar conservative politics all along. As Prof. Lukacs wrote in his “The Problem of American Conservatism” 26 years ago: “Many American conservatives, alas, gave ample evidence that they were just conservative enough to hate liberals but not enough to love liberty.” What we have seen over the last ten years is a tendency to make loathing for liberals the thing that truly matters, and usually liberty becomes important to most conservatives only when it is useful to berate liberals. To the extent that liberals have defended constitutional liberties against anti-terrorist government intrusions, it is the latter that most conservatives have embraced. It is not just that loathing for liberals exceeds love of liberty, which might be true for members of all kinds of ideological movements, but that love of liberty becomes almost entirely contingent on whether or not it can be marshaled in opposition to liberals.

Barack Obama:

If you’re someone who only reads the editorial page of The New York Times, try glancing at the page of The Wall Street Journal once in awhile. If you’re a fan of Glenn Beck or Rush Limbaugh, try reading a few columns on the Huffington Post website. It may make your blood boil; your mind may not often be changed. But the practice of listening to opposing views is essential for effective citizenship. So too is the practice of engaging in different experiences with different kinds of people.

Must-Reads of the Week: Obama’s Accomplishments and Diplomatic Brand, Facebook, Epistemic Closure, Financial Reform, Our Long-Term Fiscal Crisis and Problem-Solving Capacity, and Mike Allen

Friday, April 23rd, 2010

1. Obama’s Accomplishments. Jonathan Bernstein explains how Obama has gotten so many of his legislative goals accomplished despite the GOP’s constant obstructionism: By loading up the major bills with many other smaller items. In fact, according to PolitiFact, Obama has accomplished almost a third of his campaign promises if compromises count (and a fifth if they don’t).

2. Facebook v. Google. Ian Schafer in the Advertising Age has a smart take on Facebook’s recent challenge to Google and how Facebook is trying to reorganize the web.

3. Epistemic Closure. Julian Sanchez follows up on his starting post on the epistemic closure of the right wing. Every single link he provides in the article is worth following as the conversation he started extended across many people and was full of insights all around.

4. Obama’s Diplomatic Brand. Marc Ambinder has an excellent post on “the essence of Obama’s diplomatic brand.” While Ambinder acknowledges it’s too early to assess how effective Obama’s diplomacy will be and has been, he does a good job of describing it — and little wonder it bears little resemblance to the weak, anti-American apologizing that the right sees as Obama’s trademark. Ambinder lists a few qualities, but let me focus on one:

Bush assumed a position of direct strength, not deference, when he met with leaders. Obama has been decidedly deferential, which, in the traditional binary way the media covers foreign policy, allegedly suggests weakness. From Obama’s perspective, deference is both strategic and is demanded by the goals he sets out. Treating countries as equals foists certain obligations upon them. It helps leaders deal with internal politics. Year one, Obama was the star, and wasn’t seen as a heavyweight, even by some allies. Year two is different: he’s charted a course on legacy problems (Iran, Iraq, Afghanistan, Middle East peace), so the world knows where he stands.

5. How Financial Reform is Playing. There was some disagreement around the opinionosphere about how financial reform is “playing.” Initially, there was concern that the Republicans would once again follow their tried and true strategy of: Make up stuff that’s really awful — and pretend the bill is about that. There was concern that the Obama administration didn’t have a plan for this contingency, presuming that Republicans would crack under public pressure. And then, the SEC filed suit against Goldman and Blanche Lincoln (who was expected to water down the bill) adopted the strongest language we’ve seen and the Republicans seem to be breaking ranks over this with Bob Corker critizing McConnell’s lies and Chuck Grassley voting for the bill in committee. Kevin Drum suggests McConnell crossed some line of absurdity:

[I]t turns out there really is a limit to just how baldly you can lie and get away with it…[W]e seem to have reached a limit of some kind, and McConnell crossed it. Maybe we should name this the McConnell Line or something so that we know when future politicians have crossed it.

I tend to think Matt Yglesias is more right when he observed:

This time around, though, it doesn’t seem to be working nearly as well, perhaps because people realize we’ve seen this movie before.

6. Our Long-Term Fiscal Crisis. Jonathan Chait observes what may prove to be a fatal flaw in the political strategy of the GOP on fiscal matters if they authentically do support a smaller government:

Distrust of government makes Americans distrust everything people in governemnt say or do, including cut spending, which — with the exception of a few programs seen to help “others,” like welfare and foreign aid — tends to be wildly unpopular.

Their current strategy has been to provoke a fiscal catastrophe and cut government spending in the aftermath. But Chait suggests that this strategy of starve-the-beast governance may not work. On a related note, William Galston has an astutely even-handed piece describing the fiscal problems we are facing and what the solution must realistically be. He quotes Donald B. Marron in National Affairs who explains an idea that is antithetical to ideological right wingers:

Policymakers should not always assume that a larger government will necessarily translate into weaker economic performance. As few years ago, Peter Lindert—an economist at the University of California, Davis—looked across countries and across time in an effort to answer the question, “Is the welfare state a free lunch?” He found that countries with high levels of government spending did not perform any worse, economically speaking, than countries with low levels of government spending. The result was surprising, given the usual intuition that a larger government would levy higher taxes and engage in more income redistribution—both of which would undermine economic growth.

Lindert found that the reason for this apparent paradox is that countries with large welfare states try to minimize the extent to which government actions undermine the economy. Thus, high-budget nations tend to adopt more efficient tax system—with flatter rates and a greater reliance on consumption taxes—than do countries with lower budget. High-budget countries also adopt more efficient benefits systems—taking care, for example, to minimize the degree to which subsidy programs discourage beneficiaries from working.”

Right wingers rarely acknowledge this even as they oppose measures that would improve the efficiency of government (like the VAT). They simply call it “European-style socialism” and move on with addressing why on the substance more efficient government measures shouldn’t be adopted.

7. Our Problem-Solving Capacity. Stephen Walt has a very long and very, very good post that attempts to balance optimism (global violence is at historic lows!) with some pessimism:

One way to think about the current state of world politics is as a ratio of the number of important problems to be solved and our overall “problem-solving capacity.” When the ratio of “emerging problems” to “problem-solving capacity” rises, challenges pile up faster than we can deal with them and we end up neglecting some important issues and mishandling others.  Something of this sort happened during the 1930s, for example, when a fatal combination of global economic depression, aggressive dictatorships, inadequate institutions, declining empires, and incomplete knowledge overwhelmed leaders around the world and led to a devastating world war…

[Today] Washington D.C. has become synonymous with the term “gridlock,” leading the Economist magazine to describe the U.S.  political system as “a study in paralysis.” Obama did get a health care reform package through, but it still took an enormous effort to pass a watered-down bill that pandered to insurance companies and other well-funded special interests. Meanwhile, decisive action to address climate change, the persistent U.S. budget deficit, or financial sector reform remain elusive, and it’s going to get a lot tougher if the GOP makes big gains in the 2010 midterms. Nor is it reassuring to realize that the Republican Party seems to be taking its marching orders from two entertainers — Rush Limbaugh and Glenn Beck — the latter of whom has made it clear that he’s interested in making money and doesn’t really care about public affairs at all…

Nor is this problem confined to the United States. Japan’s ossified political order remains incapable of either decisive action or meaningful reform; the Berlusconi-government in Italy is an exercise inopera bouffe rather than responsible leadership, French President Nicolas Sarkozy’s early flurry of reform efforts have stalled and Mexico remains beset by drug-fueled violence and endemic corruption. Britan’s ruling Labor Party is a spent force, but the rival Conservatives do not present a very appealing alternative and may even lose an election that once seemed in the bag. And so on.

There are some countries where decision leadership is not lacking, of course, such as China (at one end of the size scale) and Dubai (at the other). Yet in both these cases, a lack of genuine democratic accountability creates the opposite problem. These government can act quickly and launch (overly?) ambitious long-term plans, but they are also more likely to make big mistakes that are difficult to correct them in time…

In short, what I am suggesting is that our inability to cope with a rising number of global challenges is not due to a lack of knowledge or insufficient resources, but rather to the inability of existingpolitical institutions to address these problems in a timely and appropriate way.

8. Mike Allen. Mark Leibovitch in the New York Times Magazine has an excellent profile of Mike Allen of Politico and how that organization is changing the news business by covering it like some combination of ESPN and Facebook’s feed of data on the activity of your friends. As a character study, it succeeds given Mike Allen’s unique personality — and as a look at the changing media landscape in politics, it succeeds in raising many questions about where we’re headed. Marc Ambinder responds.

[Image by me.]

Wall Street’s enormous profits are evidence of a poorly functioning market.

Wednesday, April 21st, 2010

Matt Yglesias and Ezra Klein had 2 complementary points in posts yesterday. (Damn you, JournoList!) Yglesias:

…[L]ooking at this chart I think it’s hard to avoid the conclusion that Wal-Mart is the last thing we should be worried about. The worrying trend is the domination of the corporate landscape by super-profitable firms in the heavily regulated energy, banking, and telecom sectors.

Yglesias is making a point most commonly associated with libertarians that large firms often use the government — through favorable regulation, tax breaks and incentives, etc. — to increase their profits. For example, increasing the barriers for new firms in the industry and restraining their indirect competitors from direct competition. This follows the well-known principle that any government policy whose costs are diffused and whose benefits are concentrated will be adopted more often than not. Thus highly regulated industries tend to be dominated by a small number of large firms that make very large profits — because thanks to government regulation, there isn’t much competition. However, Ezra Klein observed:

In a competitive market, there’s really no place to make 27 cents on the dollar. Some other firm will come in and offer the same services for 24 cents, and then someone will undercut them at 19 cents, and so it will go until the profit margin narrows. Wal-Mart, for instance, has a profit margin of around 3.5 percent. Ah, capitalism.

Not so in the financial sector, though, which ever since deregulation has been posting higher and higher profit margins.

So, the exception to this trend is Wall Street — where deregulation has lead to higher profits. All of this seems quite intuitively true — both from a libertarian and from a liberal perspective — and even from a liberaltarian one.

The enormous profits taken out of every dollar (as seen in much of the the financial industry) is a demonstration of a lack of competition and thus a poorly functioning market. Of course, Goldman Sachs didn’t manage to make it on the list above — but it had more than double the amount of profit out of every dollar it took in as compared to each of the companies here. Goldman managed to take $0.26 of every dollar they made as profit to their shareholders. (And that includes the massive bonuses given to employees as expenses.) I think I need to see more data though to draw the conclusion that Klein is hinting at — that the deregulation of Wall Street increased it’s profits as a percentage of revenues — while deregulation generally has the opposite effect (as in the case of Wal-Mart).

Annie Lowery drives the point home in analyzing the 1Q results from Wall Street:

This is not quite a picture of a healthy industry. In a competitive marketplace, prices and fees at Wall Street firms should fall and margins should become thinner. On the one hand, Wall Street firms like J.P. Morgan and Goldman Sachs have seen a number of their competitors die in the past two years, and have absorbed business from the failed Lehmans and Bear Sterns of the world. But on the other hand, Wall Street profit margins have remained sky high except for a short blip during the worst of the credit crunch. And, an economist would tell you, such sustained levels of high profitability point to anti-competitive behavior…

[T]he profits point to a lack of competition. That is one thing the Dodd bill — via derivatives regulation — attempts to fix. Right now, Wall Street firms do not bid for big derivatives contracts — they simply quote a price and work over-the-counter. For that reason, derivatives are wildly profitable for the companies. The Dodd bill will force derivatives pricing to become public to the market, driving down margins as companies compete.

There’s a whole lot to unpack within these points about the nature of American capitalism and the government’s role in it.

But one key takeaway seems to be a repudiation of the most ideological take of either the left or right — and an acknowledgment that free markets are not merely what happens when the government is out of the way — but are created and maintained by a complex balancing act in which government regulates and participates. What you end up with is something less than socialism or libertarianism and more like liberalism:

Contemporary liberals reject the doctrinaire distinction between the “market” and the government that animated so much of the conflict in the 20th century. The free market should not be treated as some theoretical utopian ideal or as a perpetually lost state of innocence. And the government is not some evil force which must be reduced until it is of a size that it “could be drowned in a bathtub.” Rather the government and the free market exist together – and in a capitalist republic such as ours, each is dependent on the other. The free market does not exist in a state of nature but must be created by and maintained by the society and the state which provide the values and the rules and other conditions without which a market cannot be free. In other words, a free market is a product of a just government.

Follow-up post here.

[Image by f-l-e-x licensed under Creative Commons.]

Government Is Good!

Wednesday, April 7th, 2010

Reagan’s deepest and most profound legacy to the right wing today, to the Tea Party, to the populist right is a selection of wry quips about the inefficacy and incompetence of government told with a grandfatherly charm. “In this present crisis, government is not the solution to our problem; government is the problem!” he said. “Government is the problem!” the placards at populist right wing gatherings now read.

This grotesque anti-government view regularly embraced and advocated by the populist right is incoherent, ignorant, and idiotic. It is the intellectual equivalent of blaming “The Man” or “Them” for all problems. While a (sometimes even paranoid) distrust of centralized power has always been part of American politics, the populist right today has elevated this sentiment to their core principle. It’s great efficiency as a rallying cry is that it papers over differences between the few but influential libertarian-minded who oppose government power on principle and the more numerous right wingers who see liberal government as an attack on their culture. What they both agree on (while a Democrat is in charge at least) is that the government is the problem.

This political coalition is animated primarily by anti-government rhetoric. While on some level it is a mere ideological trope, fervently believed only by the ignorant, used to rally the base to a revolutionary fervor and to create party unity, it has taken on the patina of truth in the eyes of so many it must be challenged.

Government is not inherently bad, inefficient, incompetent, destructive of liberty, or even liberal. Instead government is probably the single most influential force for good in our daily lives, acting in ways barely noticed even as its absence and failures would be and are noticed.

Friedrich Hayek, that great right wing theorist, said in his speech accepting the Nobel prize for economics, that the government had erred in attempting to engineer society. The proper role of government, Hayek believed, was that of a gardener tending her garden rather than of an engineer creating a machine. The populist right has bastardized this critique of Hayek’s and taken to demonizing the gardener while praising the garden as the greatest great thing since great things began to get greater (as Sean Hannity often says.)

What is lost in the populist right wing view is that our society, our economy, our nation, this greatest great thing ever, would not exist without the government tending it. I have been challenged – with apparent seriousness – to name anything the government ever did that was worthwhile.

In fact, the greatest product of the government is America itself – which, though like a garden has many individual parts, is given coherence by the gardener. The government has 4 main roles in shaping our nation:

1. Government acts as a check on corporations. Corporations exist to make profits – and as such externalize as many costs as they can; history has demonstrated that given the choice between doing the moral thing and doing the profitable thing, corporations will do the profitable one. This isn’t to say they are evil – it is merely to acknowledge their nature. Thus, given a choice between polluting the communal air and taking expensive steps to reduce that pollution, corporations have chosen to pollute. The costs of their actions are diffused while the benefits and profits are concentrated. Given the vibrancy of America’s market economy and the growing power of corporations, this is perhaps government’s most important role: to ensure that corporations have the incentive to make the moral choice. Most often this is accomplished with regulation, which though demonized by the populist right, is essential to America’s vibrant society and free market. Regulation is what allows us to open a can of beans without finding a human finger, to buy a standard mortgage and know our rights are still protected to some basic degree, to eat poultry without worrying too much over food poisoning, to buy a car and know it has met certain safety requirements, to breathe fresh air and to drink clean water. We can do all of this because of government regulation acting as a check on corporate greed.

2. Government underwrites social order. While the government is not present at every moment in our lives, it underwrites a certain type of order and undertakes to ensure that certain elements of a partially unspoken social bargain are upheld. For example, the government provides courts of law to resolve disputes and employs people to prosecute crimes. It has undertaken various steps to prevent terrorist attacks. It maintains regulations as above. When there is a crisis, the government assumes greater powers and responsibilities to protect the status quo and restore order.

3. Government makes long-term investments in the nation. While corporations and individuals control most investments, the government has, since its inception, funded various long-term projects from investments in infrastructure to space travel to education to medicine to military technology. These investments have led to everything from sending men to the moon to creating the internet.

4. Government provides certain services. From subsidies for the elderly (Social Security) to disability and unemployment benefits to disaster relief to cheap postage, to – soon – a transparent and standardized marketplace for health insurance – the government provides a selection of valuable services that are important yet under-served by the marketplace dominated by corporations looking for large, quick profits and non-profits that are often underfunded.

The internet itself is a great example of the role government plays in our lives. It was based on technology created by government scientists. It was enabled by government regulators who prevented AT&T from blocking access to their infrastructure which would have choked off the internet before it began. Access to the internet making it more widespread has been enabled by government programs as well as individual and corporate decisions. (For a neat list of how the government affects everyone on a daily basis, take a look at this article by Douglas J. Amy.)

This view of government is inherently liberal, even as the goods provided can be more broadly appreciated. Without government, there would be no rule of law, no free market, no corporations (which are government-created entities), no property, no freedom of speech or religion or assembly. Individuals without the protection of government have the freedom their power allows them to seize. With the careful use of government though, restrained and judicious, individuals can be empowered.

Liberalism, like the conservatism of William F. Buckley, Friedrich Hayek, Edmund Burke, Dwight Eisenhower, and even Ronald Reagan, is not about extending the role of government everywhere. It is the path between seizing the commanding heights of the economy and the anti-government hysteria of the populist right in which the government is used to empower individuals:

Liberalism in a market-state must exhibit a preference for the individual over the corporation and government and must empower individuals against bullying and coercive measures of these large institutions.

Sometimes that means the government must be constrained; and sometimes that means it must use its power to balance against other forces such as large corporations.

Government, used wisely, is good and the creator of free markets and the guardian of individual freedoms. This isn’t just a liberal idea or a conservative one. It is an American idea – indeed, the base of our American system.

[Image by Pittsford Patriot licensed under Creative Commons.]

*I have only been using the term, “government” here – but I mean, the federal government. I have used the terminology this way so it may better function as a response to the populist right which generally speaks of “the government” when they mean only the federal government.

Thumbnail Sketches of Democrats and Republicans

Wednesday, March 24th, 2010

David Brooks, yesterday, in the New York Times:

For the past 90 years or so, the Republican Party has, at its best, come to embody the cause of personal freedom and economic dynamism. For a similar period, the Democratic Party has, at its best, come to embody the cause of fairness and family security. Over the past century, they have built a welfare system, brick by brick, to guard against the injuries of fate.

As usual, Brooks’s column was thoughtful. But I had a bit of a problem with his summary of each party, even acknowledging he means each party at its best.

It’s always hard to come up with a thumbnail sketch of each party – because there are always things which contradict what you say. Each party can be said to contain multitudes, even though a casual glance almost always reveals just enough to confirm whatever stereotypes you might have.

To my mind though, the real difference between the Republican Party and Democratic Party, even only on domestic matters and with each party taken at it’s best, is not fairness versus freedom and economic dynamism versus economic (or family) security. The difference between the parties is not primarily determined by what positive things they seek to provide: I wouldn’t say that Republicans value fairness less or freedom more for example. Rather, the difference can best be summed up by either looking at what each party views as a more legitimate way of achieving social ends or by looking at what each party sees as the bigger threat to citizens.

There are going to be counterexamples and such to this summary, but I think it reveals deeper truths than Brooks’s.

Legitimacy: Republicans attack the idea that government can legitimately be used as a tool to achieve broadly agreed upon ends. They look to private institutions to guide the course of society – the invisible hand even; this means private capital markets, private corporations, and religious organizations. Democrats accept these institutions, but they see the government as legitimate tool as well.

Threats to Citizens. In area of domestic policy, Republicans see the biggest threat to citizens as the government – which they blame primarily for impinging on citizens’ freedoms, creating unfair results, and undermining family security. In the area of domestic policy, Democrats see the biggest threat to citizens coming from corporations, unchecked by the government – which they blame primarily for impinging on citizens’ freedoms, creating unfair results, and undermining family security.

Alternatively, the version of Republicanism becoming more dominant today sees the biggest threat to citizens as coming from an ideology called liberalism – which brainwashes citizens through the media and seeks power anywhere it can – churches, corporations, the media, the government. This view sees politics as a cultural battle.

I’ve tried to make these non-judgmental and descriptive – and I think it is evident which approach makes more sense. Neither political party seems to me to have a very different view of what they want America to look like: They both support personal freedom and fairness, economic dynamism and family security. America has established a complex system of tradeoffs between these values – and few in either party seek to overturn that. They seek slight modifications this way or that – it’s just a matter of rather small degrees of difference. The bigger difference is in how each party sees the path forward – what is sees as the legitimate ends to achieve the necessary changes, and how it diagnoses the problems that need to be changed.

Any alternate sketches of this difference – along the same lines – attempting to be non-judgmental and descriptive – are welcome in comments of elsewhere.

For what it’s worth, I would say the Tea Party and much of the energy on the left comes from those rejecting each of these frameworks – and who see both corporations and government as the problem. I’m not sure what countervailing force they propose though.

Check out an older post of mine for my view of the basic principles of liberalism.

[Image not subject to copyright.]