Monday, September 29, 2008

Life, Liberty and the Pursuit of Happiness

One of the most delightful "finds" we made during our many summers cruising on our boat in Canadian waters was the writings of Canadian author and historian, Pierre Berton. Over time, we ended up purchasing and reading some 30 of his works.

Berton often wrote about what he perceived as a fundamental cultural difference between Canada and its neighbor to the south, a difference which he considered profound. America, he wrote, was born by an act of violence (The Revolution) and in the founding document, The Declaration of Independence, expressed that government existed to preserve certain inalienable rights, chief among which are "Life, Liberty and the Pursuit of Happiness". In short, Berton posits, a society where the sovereignty of the individual trumps the collective well being.

Canada, on the other hand, came into being some 100 years later by a rational and peaceful act of Parliament (The North America Act of 1867), and in that Act, it is stated that the purpose of the government was to ensure "Peace, Order and Good Government". Berton held that this reflects a society where the collective well being trumps the desires of the individual.

Briefly here, let me address the business of "Trickle Down Economics", also known as "The Horse and Sparrow Paradigm". This view holds that if the privileged are allowed to satisfy their desires for "Life, Liberty and Happiness", the lot of the underprivileged will rise as a byproduct, whether the wealthy want this or not. If we allow the rich to get even richer, the additional money they spend and/or invest will ultimately trickle down to the benefit of everyone. Similarly, overfeeding a horse benefits the sparrow, who will find more undigested oats in the horse's feces than it would if the horse were simply fed an adequate diet. The horse need not care about the well being of the sparrow, and indeed it doesn't. The more gluttonous the horse's behavior, the more the sparrow will benefit every time the horse shits. Greed and gluttony become suitable replacements for good intentions and human caring. Two of the "Seven Deadly Sins" are thereby redeemed and become virtues. In fact, envy, pride, lust and wrath can also be redeemed by this mindset, leaving sloth as the only real "Deadly Sin". And, the lazy deserve to suffer, don't they?

Whether or not Berton is totally accurate in his assessment of the two countries, he does make a very interesting point, and events of the past several years could readily be described as reflecting his characterization of the US. One could readily say that the excesses of the financial markets, mortgage markets and real estate markets ran unchecked because certain individuals did indeed benefit. Not every American, but enough to keep the wheels spinning as they did. During the past 7+ years, more and more Americans lost health care coverage, and more and more Americans fell into poverty. But also during those years, enough Americans acquired enough wealth and "toys" to ensure a majority that was enjoying enough "Life, Liberty and the Pursuit of Happiness" to hungrily encourage the economy and financial institutions to run higher and higher risks.

So, after 7+ years of virtually unregulated activity, the financial institutions of the US have finally screwed the pooch too much and are in desperate straits. And the general reaction? "What, use my tax dollars to bail out those greedy Wall Street pigs? Bail out people who took out mortgages they couldn't afford? They made their beds, now they can sleep in them! " Except it is not the bed that is ill made. It's a major part of the foundation of the house itself. And who will bear the greatest burden of a financial collapse? Not the rich. Not the upper middle class. Those with considerable means may suffer a lifestyle adjustment, but those of little means will find their very lives imperiled. We have devolved into a society where the least among us are dependent upon the fecal oats, and the horses' diets are about to be cut. The problem with the foundation is more rooted in culture than economics. Greed was fully acceptable to many as long as the debt creation machine catered to enough folks.

I find it interesting to see that Paulson's initial proposal was to simply burden us all to feed the horse. While I am sure he "believed" this would result in more fecal oats for the sparrows, the sparrows' well being still remains a byproduct and is totally dependent upon the horses' metabolism being over served. If you think about it, in its totality, it isn't even an efficient model, no less an effective one. At least in terms of the "common good". Resources that could directly address human needs are not available at the outset, but only after being passed through the colons of the rich. And this waste has to be picked through to find the nutrition. But then, it is not the rich that have to pick through this waste, is it?

I do not claim to know what the financial answer to the melt down might be. But I do know that the culture shift necessary for tending to the common good would be a total shock to American society. Sharing some of the oats before they are ingested by the gluttonous horse is totally inconsistent with "Life, Liberty and the Pursuit of Happiness" as we perceive it. The least of us should be thankful that oat rich feces are available for them. And if the horse suddenly has to cut its dietary intake to a simply adequate nutritional level for himself, eliminating the nutritious content of his feces, isn't the horse "sharing the pain"? I'm sure the horse sees it that way. And the sparrows can always go to the emergency room.



Sunday, September 28, 2008

Words worth pondering

Roger Cohen recently wrote about Pakistan in the IHT.

A very notable quote from Pakistani President Zardari: "After he talked of revenge for his wife, Benazir's death, Zardari added this: "I am not a warmonger. I am not interested in physical might which is not the expression of my strength. I have many strengths, and one of them is that I can take pain, not give pain. I don't consider anyone who can give pain brave, I consider anyone who can take pain brave. That is why I consider a woman a stronger gender because she can take much more pain than a man."

Perhaps he should have been an adviser to our interrogation theory pundits!


Friday, September 26, 2008

Feudal Privileges

At the end of the Roman Empire Europe fell into disarray and central government ceased to exist. In its place local nobles - rich people in positions of power - began to control their own fiefdoms, leading to the degradation and inequality of feudal times. Under the feudal system wealth and power were inherited, not earned. Wealth and power had to be protected, but not earned in the first place. And as part of the feudal system, peasants were essentially owned by the nobility. The land belonged to the nobility, and the peasants working that land owed much of what they produced to the rich people that possessed that land. They also owed the rich people a duty of performing a certain amount of labor without compensation. The rich grew richer, the peasantry lived in squalor, everybody worshiped the same Jesus, and that evil system lasted for hundreds of years. Descendants of some of those "noble" families persist today, as seen in the monarchies that live on in Europe still.

Our nation fought a revolution against inherited wealth and privilege, believing in the American Dream that if you worked hard and kept your nose clean, you could prosper and leave your children in a better place than the one you were born into - in short, the "Land of Opportunity."

Today the greatest single indicator of where you end up economically at the end of your life is how much money your parents had the day you were born. There is little upward social mobility, and likewise little downward mobility. If you are born rich you are almost certain to die even richer. Born poor you will die poor, and your children will be poor. Inherited wealth and privilege are in charge again. If you don't earn over $1 Million a year, look forward to outright peasantry.

As part of an attempt to save the very rich from their own gambling addiction, our government is bailing out Wall Street to the tune of $700 Billion dollars. This will not go to hard-pressed homeowners to help them pay mortgages (something that would help the very institutions the money will instead go directly to) but rather it will be simply dumped on Wall Street. If there is junk paper out there, the taxpayer will buy it. If we don't, we are told by the very same people that led us into this staggering mess - AFTER THEY WERE WARNED OF THE CONSEQUENCES - that the system will crash. See, it was not the elimination of New Deal era laws designed precisely to prevent the very same situation we now face that was the cause of this Second Great Depression. Oh no, not that at all. Nope. If the market crashes it will be because we did not agree to shoulder a $700 billion dollar burden in order to help the very rich. If we do not do so then the system will crash and it will be our fault. It will not be the fault of a rabid and unreasonable free-market ideology, what used to be called laissez-faire capitalism (an already thoroughly-discredited notion that the very rich repackaged as "deregulation" and "freeing the markets"). It will be because we decided not to give Wall Street $700 Billion Dollars. And when questioned about whether this will even work, we are told that, honestly, nobody knows what else to do.

But what, really, does this mean?

Here is one way to look at it. There are currently about 350 million Americans. The federal minimum wage is currently $6.55 an hour. And if the bailout is $700 Billion, then each and every American - from the newborn infant to the elderly and everybody in between - is on the hook to Wall Street whiz kids (like Treasury Secretary Paulson just a few years ago) in the amount of $2,295.08. In terms of the number of hours at federal minimum wage, the government is going to order us to donate, free of charge, without compensation, over 350 hours of labor each. That translates into almost nine weeks (8.76 to be precise) of free labor for Wall Street by each of us - young and old alike, able-bodied or not, each one of us is now obligated to perform free labor for Wall Street for nine weeks. This will, somehow, help us by ensuring those that took risks with their money (not ours) and who enjoyed enormous profits and tax breaks as the rich grew richer than ever (not us) will not lose their shirts because we - the peasants, apparently - will donate nine weeks of labor to them so that the can keep their boats and cars and jet planes and servants and, in the case of Senator McCain, an unknown number of luxury homes.

And if we don't agree to that, then somehow our failure to do so will be responsible for the largest man-made and entirely-avoidable economic disaster that has ever befallen any nation in the history of the world. Not looting and corporate cronyism at the highest levels of our government. Not deliberate decisions that went against the face of history in removing safeguards put in place in the 1930s that were designed to - and while in place, DID - prevent exactly what has happened. Oh no. It will be because we didn't agree to pay, each and every one of us, over $2,000 each to Wall Street - and on top of the largest budget deficit the world has ever seen.

And the most aggravating thing of all is, to neutral and impartial observers, this "bailout" will not even work. The markets are going to fail anyway because they are unsound, they are a house of cards. But at least the rich will stay rich as we enter the Second Great Depression. After all, that is what is important to those in power. They just need to lie to us and get us riled up - abortion, terrorism, gay marriage, whatever. And we will then agree to it and despise those who try to save us from our madness because they are "liberal."

The Roman Empire had bread and circuses to distract the masses. We have 24-hour news networks - all owned by the very rich - to do the same.

Or, we could say no. We could fight back. We could vote intelligently. But given our recent history and the "issues" being discussed in this election (lipstick on pigs, Palin's "experience," whether Obama is a Muslim, and Jesus Jesus Jesus (the Savior is apparently now very comfortable with the rich and has decided He cares little for those less fortunate)), we will vote with our "gut."

Hail to the new boss, same as the old boss. And get to work - you have a staggering national debt to pay off and now Wall Street wants to cut out the middlemen and just have your tax dollars go directly to them.

I say we should let the system crash. It will be very, very painful, but it will take less time to fix and we will be able to focus our resources on those most in need of assistance as our house of cards tumbles. We will be able to rebuild on a solid foundation. And the risks of investment will be borne by investors, helping to avoid a repeat farther in history. And here is the kicker - if we decide not to do so, the system will STILL crash of its own weight, but the very rich will escape and remain rich.

I always wondered what it would be like to live through historical times. Now I wish I did not know.

Tuesday, September 23, 2008

Constitution??? We don't need no stinkin' Constitution!!!

In an excellent piece in today's IHT, the Bush administration is exposed, once again, as having no regard for the Constitution. While we hear over and over again that we need judges who will stick to the Constitution as the Founders intended it, apparently the Executive Branch is under no such restrictions. Vice Emperor Cheney sees his office outside the restrictions of government. GWB regularly and routinely paints himself and the Executive Branch as immune to the law.

And now, to handle our current economic crisis, the Secretary of the Treasury proposes:

"Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency," the original draft of the proposed bill says.

"The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this act," the proposed bill read when it was first presented to Congress, "without regard to any other provision of law regarding public contracts."

It goes on to say, "Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure."

Indeed, as Sorkin offers, this is the financial equivalent of the Patriot Act. In fact, in my opinion, it makes the Patriot Act look like small potatoes in terms of subverting the Constitution. This is lunacy!

According to another IHT piece, Senator Chris Dodd had strong words for Paulson this morning:
He called the Treasury proposal "stunning and unprecedented in its scope and lack of detail."

Asserting that the plan would allow Paulson to act with "absolute impunity," Senator Dodd said, "After reading this proposal, I can only conclude that it is not only our economy that is at risk, Mr. Secretary, but our Constitution, as well."

But then, when has this administration really exhibited any concern for the Constitution?

I have to hand it to Paulson, however. Asleep at the switch since he came into office, he now proposes himself as the unitary figure to dole out a staggering sum of taxpayer money, demanding accountability to no one at all. Truly a Bush Republican.

Mercifully, it seems that players on both sides of the aisle have reservations with Paulson's creation of a totally autonomous new branch of government. Hopefully, saner heads will prevail and quickly put a workable solution in place before a total meltdown occurs.

Perhaps GWB & Co's next crisis management step should be to postpone the Nov election indefinitely. It would be in keeping with their track record so far.



Sunday, September 14, 2008

When Government fails to govern

Perhaps it is time for our populace to read the dictionary entry for the word govern, a word which arises from the Latin gubernare; to steer. Implicit in the noun "government" is the action of "governing". And governing involves controlling, guiding, directing and other actions that significantly influence the course of events in the entity being governed - for the positive. We had governors on our aircraft engines, specifically to prevent catastrophic overspeeds. One would expect those who are in the position of governing to act, in advance, to prevent societal overspeeds as well.

Comment by Alan Greenspan in regard to the current financial melt down:

"This is a once-in-a-half-century, probably once-in-a-century type of event," Greenspan said in an interview on ABC. "I think the argument has got to be that there are certain types of institutions which are so fundamental to the functioning of the movement of savings into real investment in an economy that on very rare occasions — and this is one of them — it's desirable to prevent them from liquidating in a sharply disruptive manner."

It's an interesting statement, but it leads me to ask, "If certain types of institutions are so fundamental to the functioning of the movement of savings into real investment in an economy, and these institutions have been subject to federal oversight and regulation, why didn't you oversee or regulate them?"

I have posted before that our current "free market" capitalism is unfettered capitalism only until things go horribly wrong, and then a government (socialist) solution is applied, at taxpayer expense. The bill for the "free lunch" always arrives. It's just delivered at a later day to someone who never got to eat the meal. If our government were to govern, then bail outs would not be so necessary.

My simple summary of the mess is that folks saw that there was money to be made in the mortgage market. But there is a finite number of people who can really afford taking on a mortgage obligation. Thus, the market for soundly issued mortgages was fixed. The lenders were faced with a pie of finite size that they had to fight over. But fixed size markets are not the American way. So the market had to be expanded, and that was done by issuing mortgages to people who did not have any business borrowing such sums of money. Thus, the creation of new mortgage packages that made it appear, by smoke and mirrors at the time of issuance, that the borrower did qualify. Sort of like Army enlistment standards - when you can't find enough people who meet the realistic standard, redefine reality and lower the standard. Within a short period of time, these marketing geniuses had written billions and billions of dollars in mortgages to a hell of a lot of people who had nowhere near the means to successfully meet the long term conditions of these mortgages. And Bob's your uncle. Totally predictable. Lots of short term profit and impressive "economic health" indicators, but a toxic mix with a ticking detonator.

My cynical take is that our GOP friends ( and perhaps most of the country) have no concept of what Infrastructure is, and how it is vital to the sound functioning of the country. Profits are not infrastructure. Expanding markets are not infrastructure. Infra structure holds and supports the organism. When you weaken infrastructure, the organism collapses. Infra structure requires preventative maintenance. Infrastructure needs to be maintained in a manner that supports current and future need for the organism to be healthy. Governing is part of that task.

So, we awake this morning to the collapse of Lehman and Merrill-Lynch. Both as a result of a failure of the government to govern. And yet, there is a cry from a certain segment of the population for even less governing.

And as a P.S. about government failing to deliver, here's a piece from the IHT about us overseas voters getting assistance in casting our ballots this Nov. Note that is is not our government that established this exceptionally helpful program.



Thursday, September 11, 2008

Theater of the Absurd

While riding our Vespas around northern Italy, we were able to pick up snippets of the presidential (and vice) selection process on the TV. No indepth coverage (perhaps mercifully) but enough to witness theater of the absurd unfold before our very eyes.

We arrived home late last night, and in this morning's IHT, found two very appropriate pieces. Reporting from Lake Woebegon, Garrison Keillor hits the nail right on the head (or is it "hits the finger right on the nail"?) when he describes the state of affairs as "Forget the past - it's only history". From the very start of the John and Sarah show, my mind drifted back to the days when Abe Beame ran for mayor of New York City on a platform of cleaning up the fiscal disaster the city was suffering. Bill Buckley, one of his opponents, wisely noted that Beame was, for all intents and purposes, running against his own record, as his was the sitting Comptroller of the city, and had previously served as budget director for several years.

Now, we have a couple of GOP "mavericks" running for office against, make that stridently against, the record and actions of their own party over the past 10 years or so. And thousands of convention supporters cheered them on. Not one seemed to realize that the mess they are screaming to clean up is not only of their own making, but rooted in the very ideals of their party. A good summary of the past seven years of GOP wonderment was also provided in the IHT this AM as well.

And then there is the new approach to "Family Values" we find. Now, a high school junior who becomes pregnant out of wedlock is a national role model because she is "going to keep the baby". Apparently abstinence is unnecessary as long as you decide to keep the child. Wasn't it just a few years ago when a sitting president's extra-marital BJs were condemned for the "horrible example" it set for America's youth? While the sins of the children should not be visited upon the mother, isn't it a bit absurd that this unwed, pregnant child has been elevated to role model super star? Hell, what I wouldn't have done for a role model like that when I was in high school. All those girls who held onto their virginity out of fear of pregnancy would have easily fallen to my charms if they were presented with the stardom of the GOP's current day moral standards.

I wonder who the McCain/Palin pair would be willing to identify as the top 20 GOP Pork Barrel violators? I also wonder if they would be maverick enough to tell their constituents to throw those 20 out of office this Nov? Indeed, while serving as Gov, Palin's Alaska received more pork $$$ per capita from the US than any other state. Virtually all with Palin's support or by her request.

Oh, well, we Americans must be bringing it upon ourselves. We are a new country with no sense of history and a corresponding lack of memory.

But then, even if it's Theater of the Absurd, at least it's theater.


Friday, September 05, 2008

Six little words

Six little words

David Sirota, Creators Syndicate, Inc.

Friday, July 25, 2008

History books teem with six-word phrases, from the comforting ("Nothing to fear but fear itself") to the inspiring ("Mr. Gorbachev, tear down this wall") to the embarrassing ("Read my lips, no new taxes"). But the six words, "on the basis of union membership" could be more momentous than any of those. Though hardly Franklin D. Roosevelt's rhetoric, Ronald Reagan's bluster or George H. W. Bush's clumsiness, the clause could solve America's wage crisis.

Of course, when Tom Geoghegan told me this in a Chicago park two weeks ago, I almost snarfed my coffee through my nose. Solving major social problems typically demands more than six words. But as the longtime labor lawyer and author explained his idea to me on a muggy afternoon, it started making sense.

Geoghegan reminded me that data show the more union members in an economy, the better workers' pay. The problem, he said, is that weakened labor laws are allowing companies to bully and fire union-sympathetic workers, thus driving down union membership and wages.

Enter Geoghegan's six words. If the Civil Rights Act was amended to prevent discrimination "on the basis of union membership," it would curtail corporations' anti-labor assault by making the right to join a union an official civil right.

"Hang on," I interrupted. "Joining a union isn't a civil right?"


Under current law, if you are fired for union activity, you can only take your grievance to the National Labor Relations Board (NLRB) - a byzantine agency deliberately made more Kafkaesque by right-wing appointees and budget cuts. Today, the NLRB takes years to rule on labor law violations, often granting victims only their back pay - a tiny cost of doing business.

Union leaders are now focused on reforming the NLRB - an admirable goal - but Geoghegan's plan implies that workers are harmed by being legally leashed to Washington in the first place. His proposal says rather than being forced to rely on an unreliable bureaucracy for protection, workers should be empowered to defend themselves.

The six words would do just that. Regardless of whether the NLRB is strengthened or further weakened, persecuted workers would be able to haul union-busting thugs into court. There - unlike at the NLRB - plaintiffs can subpoena company records and win costly punitive damages.

Bolstering his argument, Geoghegan told me to consider variations in corporate behavior.

For example, because the Civil Rights Act bars racial discrimination, businesses are motivated to try to prevent bigotry: They want to avoid being sued. This is why no company brags about being racist.

But when it comes to unions, there is no such deterrent. The lack of civil rights protection effectively encourages businesses to punish pro-union employees - and publicize the abuse to intimidate their workforce. By making the six words law, the dynamic would shift. Companies would have a reason - fear of litigation - to respect workers' rights.

When Geoghegan and I finished chatting, I remembered why I believe he is America's most talented writer and thinker on labor issues. His relative anonymity is a tragicomic commentary on the media and the American Left. The Milton Friedmans are celebrated by pundits and cast in bronze by conservative think tanks, while the Geoghegans are dismissed by the chattering class and ignored by a progressive movement that regularly venerates Hollywood celebrities as its heroes.

Perhaps, though, this proposal will change things. In developing a way to shift incentives, Geoghegan has discovered a solution that both unionists and economists can love. It cribs the best from liberals' pro-union sympathies and conservatives' distrust of Big Government, and should make him famous (or at least a Cabinet secretary). After all, anyone who can bring such disparate ideologies and adversaries together is worthy of serious consideration - as is his six-word stroke of genius.

David Sirota is a bestselling author whose newest book, "The Uprising," was released in June. He is a fellow at the Campaign for America's Future and a board member of the Progressive States Network - both nonpartisan organizations. His blog is at

This article appeared on page B - 11 of the San Francisco Chronicle