Wednesday, December 31, 2008

So Many Things Are Finally Over: Year End Reflections

2008 is over. This marks my first full year sharing my observations, opinions, and ideas online. It has not been a good year for me personally. 2008 has seen two illnesses for my wonderful partner Theresa, both of which required hospitalization for her and missed work for the both of us. The second illness saw me lose my job, as a result of the time I had to take off to care for her at home the day before she went to the hospital. Though I will not have to appear in court until the end of January, it has also seen me receive a summons to appear in court regarding medical bills of my own, more than half of which should have been covered by my insurance but not for the clerical mismanagement of my former employer. So, in that sense, this year has been, for me, a microcosm of everything wrong with our country's health care system, labor policy, and corporate regulation.

On the other hand, this year has been good for the country in some ways. We have rejected four more years of outmoded foreign and economic policy at the polls. The Democratic Party now controls both houses of Congress, and despite that party's flaws that is (or should be) still preferable to a Republican Congress from the mindset of any liberal, progressive, or radical. Most importantly, we have elected a new President. He is not the liberal I would like to see in the Oval Office, and he's certainly no radical, but President-elect Obama is an intelligent, capable, and judicious man who has shown the moral courage to lead rather than pander to his base. As part of his base, I might not always appreciate that, but leadership is the most important qualification for the job. President-elect Obama is a leader.

Yet it has not all been rosy. Republicans and Democrats, working gleefully together more often than not, have been deregulating big business and capital to the detriment of entrepreneurs and labor for nearly twenty years. We have seen the fruits of this policy in what bears an eerie resemblance to the Great Depression. Business has gorged itself into starvation, and is now feeling the pinch. The business of economic reconstruction and management of foreign policy will take precedence over a wide range of necessary reforms. Some of those reforms (health care, corporate regulation, and labor policy) are important aspects of that reconstruction, but equally important social reform, will probably fall by the wayside.

I have not been as diligent, disciplined, or professional in either the management of this blog or writing its entries as I would like. I intend to do better. I still don't know how many people are actually reading this blog but I know there are a few. I hope to do better by them.

We have a long way to go as a country. Much of the massive reform of our government that I believe necessary will likely not happen in my lifetime. That won't stop me from writing my thoughts and opinions, from encouraging, cajoling, and aggressively debating my government and the people of my country.

Yet we have elected a black president. My parents were born, and grew up, in the era of segregation. In my childhood, in the part of the country where I lived, four white police officers committed a brutal crime against a black motorist and were acquitted in court of any crime. Race riots ensued. Yet now, in my adulthood, a black presidential candidate won Indiana, Virginia, and Florida.

Call me a dreamer if you like, but that has to be a good sign. For me, that makes 2008 a very good year.

Thursday, December 18, 2008

Buyer Beware: When You Do Not Vote For A Liberal Candidate You Will Not Get A Liberal President

The Democratic Party disappoints me regularly. I expect it. I am a registered Democrat for reasons of pragmatism. My ideology is well to the left of the majority of the party and of any presidential candidate I anticipate in my lifetime, though part of me always hopes to be surprised. As examples, I offer the following: I support an immediate end to the 'War On Drugs' (more accurately described as the War On Drug Users We Do Not Like), a sweeping civil rights reform package that would make many cringe, not merely 'amnesty' for illegal immigrants but an undefended border with Mexico and theoretically free transit across the same on par with that we used to enjoy with Canada, and significant defense spending reforms combined with major foreign policy reforms. I agree with John Kerry that the 'Global War on Terror' (more accurately described in a plethora of unflattering ways, when one considers that we have classified dissidents seeking social, cultural and religious freedom in China, under the same kind of crushing monolithic rule we condemned when it was practiced in the USSR) is primarily an exercise in law enforcement, but I disagree with most 'mainstream' politicians in either party that the GWOT is, or should be, a 'war' at all. I know that the majority of the Democratic Party does not share those views and that the 'mainstream' politicians who lead the party share very view of them or share them but believe their achievement impossible.

While I try to vote for the candidate who agrees with my views in the party primaries, he rarely wins. Since registering as a Democrat, the candidates whom I have supported in primary candidacies have included Bill Bradley, Carol Moseley Braun, and Dennis Kucinich (though I flirted with Mike Gravel and believe Bill Richardson should have been designated for either Vice President or Secretary of State) and never had a genuine hope of seeing any of them nominated. I then vote for the nominee in the general election because they are always less objectionable to my principles than the Republican alternative. That said, I never expect to see a Democratic president for whom I voted fulfill my agenda. They are nearly always very clear about what their own agenda is, and I know even that is a gamble with Congress.

What I find strange is that others in the party do not appear to understand this. GBLT activists are always shocked when their agenda is not pushed with the vigor they believe it should be. Despite the fact that, except for a brief period during the candidacy and first term of President Clinton, it never has been by any Democratic presidential candidate or president. Feminists and minority interests are never satisfied with the level of diversity in government, even when no specific promises about diversity have been made. Every group within the Democratic Party is always surprised that the electable candidate they nominated and then elected with the help of independent voters and moderate Republicans does not satisfy all their desires in a president.

The strength of the Democratic Party is that, to some extent, it seeks to give all members of American society a voice in the party and the government. The weakness of the Democratic Party is that the number of ideologically liberal Americans who truly support all elements of the stated agenda of the Democratic Party is not what it should be. The reason that the Republican Party so often, with some accuracy, accuses the Democratic Party of advocating group rights rather than individual rights is that the Democratic Party attempts to balance the interests of its constituent factions in exactly the same way the Republican Party (which, likewise, lacks a unified majority of all-encompassing 'conservative' constituents and is every bit as much an advocate of 'group rights' as the Democratic Party) attempts to do so. The strength of the Democratic Party is that all of those factions have some part in shaping party policy, whereas Republican dissenting voices (the Log Cabin Republicans come glaringly to mind) frequently do not. The weakness is that those factions are less inclined to cooperate when they do not feel their interests align.

Much talk is made of the 'progressive agenda' by liberal Democrats and of the 'liberal agenda' by conservative Republicans, but such a unified agenda only exists in the labors of a cadre of devoted party activists and advocates and and a relatively small group of voters. The reality is that the GLBT platform, the feminist platform, the various minority platforms, and the labor platform of the Democratic Party are very different and sometimes in conflict. The liberal/progressive platform, which seeks to combine and advance the interests of all these constituents in some manner as a unifying philosophy is at odds with a conservative Blue Dog platform which is opposed to all of the party's member factions in some way. The interaction of all these member groups and the two philosophical agendas creates the final Democratic Party. It then attempts to be pro-GLBT, pro-feminist, pro-minority, pro-labor, liberal, and fiscally conservative all at once. This inevitably leads to disappointment.

Case in point: President-elect Barack Obama has invited Pastor Rick Warren (an emergent leader of a new, more economically progressive evangelical Christianity that is dissatisfied with the past alliance of evangelical leadership with a Republican Party frequently devoid of Christian compassion) to give an invocation at his inauguration and Pastor Warren has agreed. Pastor Warren donated money to advance, and spoke in favor of, the ballot success of California's contemptible constitutional amendment (Proposition 8) maliciously passed to deprive California citizens of rights the California Supreme Court determined they already possess under the state's constitution. Pastor Warren claims to believe in equal rights for the GBLT community and to support civil unions and domestic partnerships, but believes that marriage is a special sacrament set aside for male/female couples. This is not a rare belief among Christians, or among Jews or Muslims. President-elect Obama, in fact, is himself an evangelical Christian (though he belongs to a liberal wing of the faith) and believes the same and has made no secret of it. He did oppose Proposition 8 politically, because he believed the constitutional issue trumped his religious beliefs, but he is on record as saying many times over that he opposes gay marriage in favor of civil unions. Senator John Kerry said the same thing during his own candidacy for president.

The GLBT community and its spokespeople are up in arms as what they believe as betrayal by a president-elect they voted for and helped to elect. Claims have been made both by conservative and establishment liberal writers that there has been something of a wave of anti-religious and anti-black bigotry in the GLBT community in response to the success of Proposition 8 and that protests against Pastor Warren are an expression of the bigotry. Some of the comments I have read on the Huffington Post's blog bear that out. Many people who have refrained from such language about the president-elect have nevertheless addressed it toward Pastor Warren and expressed deep and personal hurt that the president-elect would invite him to participate in the inauguration ceremony.

I am in favor of complete equal rights for all American citizens regardless of sexual orientation, race or ethnicity, gender, or religion. I believe that, if marriage is a right as the Supreme Court upheld it to be in the case of interracial marriage, gays have the right to marry if they wish. I believe that Pastor Warren, President-elect Obama, and others who believe they can balance the question on the head of a pin and satisfy their religious conscience with opposition to gay marriage while trying to satisfy their social conscience with advocacy for 'separate but equal' civil unions are wrong. Worse, I believe they are philosophically wrong in believing that equal rights and prejudices inspired by religious dogmas can co-exist in such a fashion. It is roughly equivalent with supporting black voting rights while not wanting black neighbors. Sadly, there are people who feel this way. They must be engaged in vigorous debate and educated in the meaning of equality.

However, if gay marriage is one of our core values as liberals then we need to strongly advocate candidates who support gay marriage rather than voting for electable moderates and expecting them to receive our values with their votes. If we want the Democratic Party to be a liberal party then we must vote for liberal candidates. Otherwise, we must support the leaders we elect where we agree with them and debate them vigorously where we disagree.

Tuesday, December 16, 2008

The Regulation Ruse: The Credit Crisis, the Great Depression, and What We Can All Learn From Alexander Hamilton

For many years, at least since the Bolshevik Revolution in Russia and quite probably longer than that, stout-hearted and stout-voiced American economic 'purists' have been preaching the virtues of the free market system. This isn't new, the United States has always been a capitalist country. Though there have been communal experiments within that economy (some of them very successful), the national economy has always been dedicated to the idea of competition and free enterprise. With the only possible exceptions being the Chinese and the Japanese, Americans are the most naturally capitalistic people on Earth. Marxism, while its effects have been felt (largely as a negative reaction against the idea by the right wing) quite strongly, has never had a serious claim to the political or economic loyalties of the majority of Americans. 'The American Dream' is the idea that one can become a successful capitalist by doing what one naturally loves doing, though it has been distorted in crasser and more commercial ways over the years.

I am, economically, a capitalist. I believe that the free market economy is the most viable system devised in the world's history. The most successful empires have always been built on honest capitalism, with wars arising over commercial disputes between capitalists. The greatest political crisis in American history was a dispute between capitalists and latter-day feudalists who had substituted the plantation for the manor and believed whole-heartedly in a patently unfree labor market.

The problem is that, since the Bolshevik Revolution, the most vocal defenders of the free market system have attempted to defend their own profits rather than the system that makes them possible. In a very real way, the Confederacy has stolen victory from the jaws of their Civil War defeat in modern America. Modern capitalism, as expounded upon by monetarists and the anarcho-capitalists of the Austrian school, has far more in common with the manor or the plantation than with Adam Smith's vision. The modern corporation, at least in America, has become the new refuge of feudalism and the modern upper-echelon corporate executive has become the modern day robber baron.

The voices of deregulation are not entirely new either. Anglican clergyman Thomas Malthus, speaking with pained self-righteousness, argued that the victims of Great Britain's Industrial Revolution could not be helped and that any attempt to help underpaid, overworked laborers or to regulate industry would only make things worse for the laborers and ruin everyone else's lives to boot.

Deregulation and free trade have been the rallying cry of American capitalists since the end of World War II and are still bedrock values to some in both the Republican and Democratic parties. Business, they say, must be left alone to run itself. The government is not equipped to manage the economy, business must handle that. We are now winding down eight years of our first CEO president, following sixteen years of deregulation and twelve years of increasingly free trade. Clearly, business cannot manage the economy any better than the government can when left to its own devices.

Alexander Hamilton, the father of both American capitalism and American political liberalism, understood that the role of government in a capitalist society is to re-enforce the natural tendencies of the market. The government does this by regulating business so as to ensure competition. In an unregulated market, capital becomes the club with which successful businesses prevent new competitors from establishing themselves. The reason we have only three major American automakers, for instance, is because The Big Three have used their money and political connections to buy out and stamp out potential competitors. This is not unlike the methods used by men like J.P. Morgan and John D. Rockefeller, whose corporate empires were eventually parceled out in courtrooms by judges gavels because it was found they had broken the law and illegally manipulated the market in order to drive their costs and wages down while driving profits up. This was the atmosphere in which the modern American labor movement emerged in the early twentieth century.

A truly free market is a competitive market in which someone with a product and capital can establish a new business in their chosen field and compete as successfully as their product and ability allows. Such a market does not exist in the United States. While such a market may be an unrealistic ideal, it is the government's job (through practical, sensible regulation of corporate conduct and consistent enforcement of the spirit of those regulations) to realize as much of that ideal as possible. This economic crisis has shown this dramatically, just as the Great Depression did in the 1930s.

I want to oppose the auto industry bailout in the worst way. Not because I am a hardened economic purist who believes that a failed business deserves to fail, though I do believe that the government's insulation of such corporations does have negative consequences, but on a moral level. The Big Three (and other companies, including the defunct American Motors) did the government very big favors during WWII. While some would call this their patriotic duty, they were able to translate these favors into credit with Washington. As Ford, General Motors, Chrysler, and American Motors consolidated their hold on the American automobile market and consolidated more and more money and power in their own hands they formed a cartel powerful enough to prevent new manufacturers (Preston Tucker is a poster-worthy example, though there are less well-known examples as well) from entering the market. When American Motors merged with Chrysler, the modern American auto industry was set in stone and the only changes since then have been foreign acquisitions and mergers.

The premier example of the failure of the big three has been the GM brand 'Saturn.' The Saturn line was launched to great fanfare, an entirely American manufacturing enterprise in which the workers at the factory owned the company. GM originally set the company up to be completely independent of their larger network of brands and Saturn was extremely successful. So successful, that GM decided it needed a bigger piece of the pie. GM bought out the shareholders and closed down the original Saturn factory, moving manufacturing to Mexico and Detroit as with their other brands. Despite this, Saturn has continued to be the bright spot in the American auto industry. The brand has led the way in making the kind of cars the modern world wishes to buy: economical, technologically current, and fuel efficient. The Saturn Vue SUV, contrary to most stereotypes of such vehicles, gets gas mileage competitive with that of mid-size cars. Yet when General Motors submitted their post-bailout business plan to Congress, their proposal was to drop Saturn but to retain GMC, Cadillac, and Buick. GMC is entirely redundant. Every GMC truck is an equivalent model of a truck manufactured by Chevrolet. Cadillac is a luxury brand, priced well out of the range of the average working American. Buick is, and has for years been, famous for producing cars that are too big and too fuel-guzzling to be practical for their sticker price. Yet in their appeal for government aid, GM believed that keeping these three brands and scrapping Saturn was in their best business interests.

I believe an automotive bailout is necessary, despite all of that, because of the effect letting GM and Chrysler fail would have on the American economy. Even the Republican Party believes so, and despite all their bluster the only real bar to such a bailout passing the Senate was the fact that the House proposal wasn't tough enough on the United Auto Workers to satisfy union busting senators from right-to-work states which host heavily state-subsidized automobile factories owned by foreign companies.

In my opinion, we have to hold our nose and bail the Big Three out despite all their sins. This does not mean, however, that they cannot be held accountable. Real reforms can and should be required. The Big Three should be completely enjoined from laying off employees or closing factories on US soil if they receive government money. Their management payroll should be heavily slashed, especially at the very top levels. Executive bonuses should be tied to sales and revenue rather than share prices. I would go so far as to mandate the transfer of outsourced jobs back to the United States and certainly believe a prohibition on further outsourcing must be part of any bailout package.

The House bailout is not happening and the White House is merely playing for time to allow the new Congress and President to act when the new administration takes office. Any fix between now and then will be purely temporary. The new Congress should revisit the issue, and the new President should be mindful of his own remarks on the necessity of forcing the Big Three to reestablish themselves as viable business concerns. Some pay cuts, on the labor side, may be required for legitimate economic reasons and that thorny issue must be addressed head on. While less guilty than management, labor does have a share in the blame for rising costs. Yet their share is inconsequential compared to the malfeasance of the management of the Big Three and this proportion of blame must be kept firmly in mind. Allowing the Big Three to fail is not punishing merely the incompetents and criminals responsible for that failure, but also punishing everyone who works for them or does business with them.

If a hand is gangrenous, one amputates the hand to save a life if that is necessary. However, penicillin is generally tried first. If penicillin works, amputation is not necessary. We need to approach our economic problems with that kind of calculation, not with a machete and a can of gasoline nor with a gift box full of money with no strings attached. Conservatives say that government is simply not equipped to micromanage the auto-industry to the degree necessary to save it from itself. I say micromanagement is not necessary. Practical regulation and consistent enforcement will force manager to do their jobs in return for their checks.

Penicillin before amputation.