Category: The Opinionsphere

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Economics Financial Crisis Politics The Opinionsphere

The Reagan Revolution (cont.)

There’s been quite a strong response to Paul Krugman’s column last week blaming the financial crisis on Ronald Reagan. William Greider from the left and Richard Posner from the right both made the case that it was actually Jimmy Carter who’s to blame. But I think Andrew Leonard in Salon has the best take on the whole meta-debate over the debate:

The continuing influence of the banking industry on Congress, on which point we witness new revelations nearly every day, should be enough to underline how both parties succumb all too willingly to the financial blandishments lavished by Wall Street. I’m sure Krugman would acknowledge that. Despite Posner’s dismissal of Krugman as a Democratic partisan, it is well worth noting that Krugman has been far harder on the Obama administration’s economic policy moves than your typical Republican partisan was on George Bush until late in his second term.

But there’s a different, perhaps more profound sense in which Reagan really did do it. Momentum for deregulation may have gotten started during the Carter administration, but the ideological case for it didn’t crystallize until the election of Reagan in 1980. From that point on, the predisposition to loosen the reins on the financial industry became explicit. Both parties helped get us where we are today, but one party in particular identified itself with the all-knowing wisdom of the markets. And that party is paying the price.

I still like the formulation I used – that does not lay the blame directly on Reagan or his advisors – but indirectly:

To some degree, these changes had positive effects – as the market was freer, as the economy grew, as corporations thrived, as the overall wealth of America grew.

But they spelled trouble down the road. The stimulus spending and tax cutting, the informal Bretton Woods II agreement, and concentration of wealth created an unstable system. Internally, the society was imbalanced as extremes of wealth and power were accumulated by a small minority. This eventually undermined the very free market and democratic discourse that is essential to the American tradition. A course correction later might have saved the Reagan vision – and for a time it seemed as if Bill Clinton’s moderate presidency had, as middle class wages finally began to grow again – but Bush doubled down on Reaganism when he should have pared back, and we are left with this mess.

Is this collapse Reagan’s fault? I wouldn’t say so. But he set the initial course towards this iceberg, even if the iceberg was out of sight at the time he set the course. He – and the 1980s revolutions in finance, economics, and government that his administration supported and enabled – are the true authors of this economic collapse, even if they cannot be blamed for not forseeing it.

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Israel Political Philosophy Politics The Opinionsphere

Leverage and Power

Glenn Greenwald:

A country, a company or an individual has every right to remain free of “interference” from others as long as they remain independent of the party seeking to “interfere.”  But if one chooses instead to become dependent on someone else or seeks help and aid from them, then complying with the demands of those providing the aid is an inevitable price that must be paid – and justifiably so.

Greenwald makes broad principled statements like this a lot in support of the specific points he is making – in this case, the idea that Israel can’t complain about American interference in its domestic affairs.

But as a civil libertarian, I find it difficult to see Greenwald accepting the application of this principle in other spheres. Wouldn’t that imply that the government would exert total control over people on welfare for example? What regulations would this invalidate between individuals and corporations?

As a practical matter, what Greenwald states is true – in that independence is inevitably given up when one gives up leverage. But at the same time, there are various laws and customs that prevent one from exercising one’s full leverage. In most circumstances, Greenwald would – I think – accept that.

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Economics History The Opinionsphere

The Reagan Revolution (cont.)

I’m a bit annoyed at the fact that Krugman’s book – which I have not read – makes almost precisely the same point I’ve been making – but which I thought was mine independently, though inspired a bit by a phrase Stephen Metcalf tossed off in an essay on Tom Cruise:

The ’80s did for money what the ’60s did for sex.

Instead, from that phrase – likely inspired by Metcalf’s reading of Krugman – I reconstructed the view of history Krugman was advancing. I wrote:

This stability of the 1950s and 1960s came at the expense of tamping down certain social and economic forces. The social stability was torn apart by the Civil Rights movement, feminism, free love, and the later radicalisms of the late 1960s and early 1970s. This culture war has been dominating politics since then.

The economic stability of this period was destroyed by the forces of extreme capitalism, greed, deregulation, and other economic radicalisms of the 1970s and early 1980s – as labor unions were undermined, executive compensation grew exponentially, social mobility was impeded, and economic power concentrated in a handful of large corporations.

Lindsey quotes Krugman’s book in his essay:

For a generation after World War II, fear of outrage kept executive salaries in check. Now the outrage is gone. That is, the explosion in executive pay represents a social change…like the sexual revolution of the 1960’s—a relaxation of old strictures, a new permissiveness, but in this case the permissiveness is financial rather than sexual.

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Economics Financial Crisis Libertarianism Political Philosophy Politics The Opinionsphere

Brink Lindsey v. Paul Krugman

Last night taking the train home, I started reading Brink Lindsey’s essay in Reason countering Paul Krugman’s analysis of inequality in American history – and specifically what has caused inequality to worsen.

Now – my head was a bit fuzzy as I have a pretty bad head cold at the moment – but I found Lindsey’s argument was rather persuasive. Surprisingly so – as I’ve cited Krugman’s arguments on this issue many times on this blog (including here and here). I also recognize Lindsey’s phrase describing Krugman’s view holds an essential truth about this progressive understanding. I myself tried to express this – in a way to diffuse the charges of socialism during the campaign – “Leave It To Beaver Socialism.”  Here’s my description of the goal of Obamanomics:

Obama’s economic plan is not about socialism or revolution or any such radicalism. He’s not that type of politician. The goal of his Obamanomics (if you will) is not a socialist paradise or a European-style market socialism but a restoration of the economic justice that made 1950s and 1960s America so stable. Unless you think Leave It To Beaver took place in a socialist nation, then Obama’s economic plans shouldn’t strike you as far left.

At the time, I both recognized the power of postulating an ideal past which we should hearken back to – and understood that this is the root of reactionary politics. There is a proper way to understand history – and to try to achieve a balance that once existed. But very easily, with a slight misstep, you find you are trying to recreate a now defunct world – which is the founding myth that every reactionary subscribes to.

Lindsey concludes his essay:

[R]easonable people disagree hotly about what ought to be done to ensure that our prosperity is widely shared. But the caricature of postwar history put forward by Krugman and other purveyors of nostalgianomics won’t lead us anywhere. Reactionary fantasies never do.

Powerful stuff, true or not. And it is certainly making me reevaluate my understanding of the historical causes of inequality in 20th century America. I’ll have to read the essay again with a more clear mind. I tried looking for a progressive debunking of the essay – but all I found were attacks on Lindsey or Reason or libertarianism.

To be clear though – I haven’t abandoned my Krugman-inspired view of the economic history of 20th century America yet – and Lindsey’s argument was better at poking holes in the story offered by Krugman than giving a convincing portrait of its own. I suspect the truth may be found by accepting that liberal and conservative policies together led to the growing inequality we are experiencing today.

Categories
Foreign Policy Politics The Opinionsphere The Web and Technology

Facebook Diplomacy (cont.)

When I wrote about this idea a few weeks ago, I realized the term had been used before – by Evgeny Morozov in a Newsweek article. But interestingly, in his article, he never actually mentioned Facebook – focusing mainly on blogs – and the power of the internet in general to organize. What Morozov is writing about is not so much diplomacy – as propaganda – and so his thesis ends up being that the internet enables dictators to spread propaganda more effectively:

That so many governments manipulate the Internet to their advantage—all the while still practicing old-fashioned tactics like throwing bloggers in jail—suggests that those who hoped to use cyberspace to promote democracy and American ideals on the cheap may be in for a tough fight. If anything, the Internet may make their jobs harder.

Bruce Etling at Harvard’s Internet and Democracy blog echoes Morozov’s conclusion – with a slight twist:

This mobilization of ordinary citizens to push government propaganda may be the most successful tactic for governments on the Internet, instead of public relations campaigns like the Bush administration’s failed efforts to ‘rebrand’ the US in the Middle East, or the Kremin hiring of a web-savvy PR firm to promote its agenda.

These two pieces were seemingly written as a counterpoint to the earlier remarks by Undersecretary of State James Glassman about the power of Web 2.0 (including Facebook) to mobilize dissident groups.

What I propose is something a bit different than either Morozov’s or Glassman’s ideas – what I propose is something more akin to a revolution in foreign affairs – as many, many individuals interact with people in foreign countries – developing their own ideas, their own contacts – both being influenced and influencing. I think this is already happening – and will inevitably accelerate – but that the principles on which it happens can be affected – which is why I proposed certain guidelines, and to understand this as a duty of global citizenship.

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Barack Obama Economics The Opinionsphere

Rewriting the Rules of Capitalism

Marc Ambinder discusses what he terms “Obama’s New Capitalism” in a recent piece. He asserts that the administration is “rewriting the rules of capitalism” but goes on to not discuss what these rules are. Which is fine – Ambinder’s piece makes some good points. One which I’ve made before is that Obama has not been violating the Rule of Law with regard to his GM and Chrysler interventions as his conservative critics allege:

Note that, aside from threats and suasion, the administration hasn’t done anything. The bondholders (with notable exceptions) agreed to these two deals. No laws have been broken. Everyone has sacrificed. And the unions have already given up a great deal – and, in doing so, put their trust in the administration.

I had written earlier:

These authors make a big point of the fact that Obama is abrogating contracts – but this objection is a bit silly. Obama is not a party to these contracts – and thus has no obligation to honor them personally. The Contracts clause of the Constitution – the Law which it is being alleged Obama has broken – was meant to constrain the individual states rather than the President or even the Congress. Congress was in fact given the power to abrogate contracts through bankruptcy proceedings in the Constitution. Obama – in intervening in the case of Chrysler – helped to negotiate an out-of-court settlement of the matter. Out-of-court settlements happen all the time – and are welcomed by overburdened judges who see it as better to allow all sides to come to an agreement rather than having to order them to agree.

To call this a violation of the Rule of Law is disingenuous at best.

What these authors are right to be concerned about is the concentration of power that undermines the system of the Rule of Law – as the government’s role in backstopping the finance and auto industries leaves it with enormous leverage.

Ambinder’s point that the UAW is putting a lot of trust in the Obama administration by accepting these deals is well-taken.

But I look forward to reading (or perhaps writing) the piece that Ambinder’s title seems to promise – explaining what amendments to the capitalist system have been wrought in the final days of the Bush administration and in these opening days of the Obama administration. We obviously don’t know everything yet – as that big piece of legislation which attempts to regulate the purported roots of this financial crisis has not been drafted to my knowledge.

But I can make a few educated guesses about the shape of this capitalism. So far anyway, institutions that are too big to fail have now combined into even larger institutions. It seems unlikely this will reverse. These enormous institutions now seem to have a implicit government backstop. This will need to be dealt with either with more regulation of such institutions – or by breaking them up into smaller pieces. It seems that in the future new financial instruments will be regulated more closely – and hopefully traded over some public exchange. Obama seems to want labor forces to have a greater role in running corporations – which is a relatively unique prospect in American history – and one that if it catches on could be revolutionary. At the moment, this depends on how well the UAW is able to handle its ownership stakes in Chrysler and GM – but one can see this creating either an advantage or a disadvantage competitively. There is also the issue of systematic risk – and finding a regulator responsible for monitoring this. Perhaps most significantly – the federal government has explicitly accepted what has long been its implicit promise to keep economic growth going.

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Barack Obama National Security Politics The Bush Legacy The Opinionsphere The War on Terrorism

“Nobody’s going to wage a tough political battle to give up power.”

Yglesias makes a good point about the odd dynamic Republicans are creating on the national security front:

Part of why it’s so problematic for congressional Republicans to be so busy attacking the Obama administration as too hesitant to torture people and so forth is that the natural order of checks and balances is totally turned on its head when the opposition is urging the executive to seize more power and become less transparent. Nobody’s going to wage a tough political battle to give up power.

I’ve stated before that I believe it is primarily the job of the Courts and legislature – and even of individual citizens to the extent they are able – to provide a check on the Executive branch – as not only can one not expect a president to give up power – but for him to do so unilaterly serves to strengthen the power of the executive in the future. If the Courts or the Congress forces him or her to give up power, then the system of checks and balances is working – and the executive is seen to be subject to them in the future.

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Barack Obama Law Politics The Opinionsphere

Judge Sotomayor

My opinion of Judge Sotomayor hasn’t changed much since last week’s announcement. The right-wingers attempts to tar her as a racist bug me. But not all that much. The particular sentence they keep repeating is – without context a racist remark:

I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn’t lived that life. [my emphasis]

Within the speech she was giving though – when she made this remark – she seemed to be making a similar, but different point:

I would hope that a wise Latina woman with the richness of her experiences would as often as not reach a better conclusion than a white male who hasn’t lived that life.

It does seem – as Barack Obama said – that her original speech contained one sentence that was poorly phrased to convey the point she was making.

I agree with the many out there who think the right-wingers are hurting the Republican Party by making Sotomayor’s nomination about race.

The two areas that might potentially trouble me about Sotomayor are in the areas of executive power and civil libertarianism. She’s probably in the mainstream of the conservative/liberal consensus on these issues – which is an improvement over the right-wing extremism on these issues evident in Judge Roberts and Judge Alito. But I am not sure where within this conservative/liberal consensus she stands.

Sotomayor’s ruling the “douchebag” case – though it is certainly possible to view her deference to the school’s position as a judicial modesty which I can support. But I think the role of Courts in checking the increasing power of corporations, schools, and other semi-voluntary organizations to monitor and police the private activities of citizens is going to gradually become a big issue. That Sotomayor signed onto an opinion then that allowed the restriction of free speech on a non-school affiliated blog because calling administrators “douchebags” presented a “foreseeable risk of substantial disruption” is a matter of concern.

On the issue of executive power, Sotomayor’s record is thin. As Charlie Savage wrote in the New York Times:

[T]he effect on presidential power could be pivotal. Important rulings on executive authority — striking down military commissions and upholding habeas corpus rights for Guantánamo detainees — have been decided by a five-vote majority, including Justice Souter, on the nine-member court.

“Given that the decisions have generally been 5-4 in this area, this could be terribly consequential,” said David Golove, a New York University law professor. “We’re losing one of the court’s strongest leaders on the side of limiting executive power to reasonable bounds. If the person who replaces Souter is different than him, the balance of power may shift.”

The article was written before Sotomayor was nominated – but Savage briefly outlined her record in this area:

[O]ne person near the top of Mr. Obama’s short list — Judge Sonia Sotomayorof the United States Court of Appeals for the Second Circuit — has never worked in the federal executive branch and sits on a court that hears few executive power cases.

These issues – of executive power, war powers, of state secrets, of torture, and of national security in general – are becoming the new culture war. And it is a front in which the Court must take a strong position. I await the hearings to see what Sotomayor has to say on the issue – although I presume she will be as careful in her answers on this issue as past nominees have been on abortion.

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Law Politics The Opinionsphere

A Week Off From Blogging

You’d be surprised at how exhausting it is to churn out one to four posts a day, with at least one containing an original thought and most others some small spin. Or at least, you’d be surprised at how exhausting it is in addition to a full-time job.

So, to start the summer, I’m going to take a week off.

Now that Judge Sotomayor has been leaked as Obama’s nominee, I realize I don’t have much of a dog in this fight – at least not so far. My big concern for this nominee is their position on executive power. Sotomayor doesn’t have much of a public record on these issues – as Charlie Savage explained, she:

has never worked in the federal executive branch and sits on a court that hears few executive power cases.

I would have had to comment and get excited if the nominee had been Elena Kagan (negatively) or Diane Wood (positively). Or Harold Koh, though he wasn’t on the list this time around (positively.)

Matt Drudge is already on the case – bringing racial issues to the forefront and making the innuendo-driven case against the Judge – while acknowledging the opposition will be futile.

I’ll leave this fight to others. For this week, it’s time to take a break.

Of course, I reserve the right to jump in if I feel so compelled – so check back if something extraordinary happens in politics.

I will – of course, continue to Twitter this week. If you haven’t already, follow me there.

Categories
National Security Politics The Bush Legacy The Opinionsphere The War on Terrorism

Irony Watch: Cheney on Euphemisms

From Yglesias:

Benjy Sarlin, over email: “Dick Cheney, who brought us the phrase ‘enhanced interrogation methods,’ is currently railing against those who use ‘euphemisms’ to obscure the debate over national security.”