Are the Super-Rich Really Job-Creators?

In a New York Times op-ed column today, the ever-surprised economist, Paul Krugman, argued that it makes sense to tax the rich (“Things to Tax: http://www.nytimes.com/2011/11/28/opinion/krugman-things-to-tax.html?_r=1&ref=opinion). To those who say taxing the rich wouldn’t raise much revenue, he counters that “The I.R.S. reports that in 2007, that is, before the economic crisis, the top 0.1 percent of taxpayers — roughly speaking, people with annual incomes over $2 million — had a combined income of more than a trillion dollars. That’s a lot of money…” Let’s note also, that’s from just one-tenth of one percent of taxpayers.

Republican Senator John Kyl is ready with a well-worn comeback. Also in the New York times today, Kyl argues that the Bush tax cuts for the wealthy should be continued because, “increasing taxes on the most affluent Americans, including small-business owners who report business income on their personal tax returns, would undermine the fragile economic recovery. The best way to hurt economic growth is to impose more taxes on the people who do the hiring…” (http://www.nytimes.com/2011/11/28/us/politics/senator-questions-extension-of-tax-cut.html ).

This is a common Republican refrain, though patently bogus. Do the top one-tenth of one percent of income earners in America actually “do the hiring?” Notice that Kyl’s criterion is “small-business owners who report business income on their personal tax returns.” That’s a different group than the top 0.1% of income earners.

Anybody can report business income. That doesn’t mean they are creating jobs. If you sell some stuff on Ebay, you should report that as business income, even though it doesn’t make you a job creator and it doesn’t automatically put you in the top 1% of earners.

What is “business income?” The treasury department defines small business income as any ordinary income, long-term or short-term gains, from sole proprietorships, S corporations, partnerships, estates and trusts. (factcheck.org, March 6, 2009).

By this definition, are the rich the small business owners? 73% of Americans in the top two tax brackets report some kind of business income on their tax returns, but that does not mean they are “hiring employees” or “creating jobs.” They could be just cashing their trust fund checks.

It is a crude sleight of hand to suggest that anyone who is rich is automatically a job-creator. If that were true, it would be hard to explain why employment has not jumped way up over the past ten years while the incomes of the upper 1% of Americans rose 18 percent. (http://mediamatters.org/research/201110200011). It must be that all those rich people were not actually “hiring,” as Republicans claimed.

Some of the super-wealthy are corporate executives whose companies do create many jobs. It is hard to imagine that increasing the marginal tax rate on their personal income would cause their companies to hire fewer people. And anyway, they are not “small” business owners, the ones who actually create most of the jobs in America.

In fact only 27% of upper income tax returns show business income that makes up more than half of wages. Presumably, a real small business owner would take home most of his or her wages from the business (factcheck.org, March 6, 2009). The vast majority of people who report business income on their tax return are not running a small company that’s on a hiring spree. And even among those who are, only 2% of them earn enough money to make it into the top tax brackets (factcheck.org).

The categories, “rich” and “job creator” are almost non-overlapping. Yet Republicans routinely equate them. It is a spurious equation and I can’t understand why the news media let it go uncommented. Even Krugman doesn’t mention it. It is a completely false argument that taxing the rich destroys jobs. How Republicans continue to get away with spouting such nonsense is a mystery.

Why the Wheels Fell Off

Three years after the financial collapse of ’08, the American economy is still on life support. The main devastation occurred in unemployment, which remains above 9% nationally, as high as 25% in some regions and much higher among some age and ethnic groups. Even among those employed, the mortgage crisis limits economic growth, with almost half of mortgages worth more than equity, and tens of millions of houses in foreclosure. GDP has been limping along at 1% for years, with no prospect of an upturn as long as consumers don’t spend (what would they spend?) and retail credit remains inaccessible. There is talk about continued recession for at least two more years, more likely six.

What happened is that rich people took all the money. They left next to nothing for the rest of us. They played the capitalist game and won. They are still winning, and I expect will continue to do so, barring the unforeseen. This does not make the rich, bad people. The whole point of the capitalist game is to get rich. There are winners and there are losers. But the present outcome, painful recession for most people, is the inevitable consequence of the rich siphoning off America’s wealth over the last thirty years. It could have been moderated, but it wasn’t. Now here we are.

First, let’s make sure we understand that in fact, the rich have siphoned off the country’s wealth. According to G. William Domhoff (http://sociology.ucsc.edu/whorulesamerica/power/wealth.html),

As of 2007, the top 1% of American households (the upper class) owns 34.6% (more than a third) of all privately held wealth in this country.

The next 19% (the managerial, professional, and small business stratum) holds 50.5% (more than half).

This means that the wealthiest 20% of Americans hoard 85% of the country’s wealth, leaving only 15% for the rest of us (wage and salary workers).

If you exclude the value of one’s home from the calculations (because the rich often have very expensive homes), then you see that just the top 1% of households owns 42.7% of the all the nation’s financial wealth. The richest 20% hold more than 93% of financial wealth. That’s basically all the money there is! Nearly all of the country’s money is in the personal bank accounts of just a few people. The rest of us are left to squabble over the remaining 7%.

The rich are the big winners in the game of capitalism, and the winnings have been huge. A hundred years ago, the richest 1% of Americans owned only 18% of the nation’s wealth (Noah, http://www.slate.com/id/2266025/entry/2266026). Today’s huge wealth inequality is a recent phenomenon, since about 1980. It is the most obvious outcome of a capitalist system gone awry, and an explanation of the current economic recession.

Today’s painful recession is the consequence of the richest people having sucked all the money out of the economy since 1980. The rich are not having a recession. The Dow Jones Industrial Average is about 11,000 today, down a few percentage points from its bubbly high of three years ago, but by no means disastrous for the companies indexed, such as American Express, Chevron, IBM, Microsoft, Verizon, and others. Some of the big banks are having disasters recently, but that is a separate situation, and long overdue anyway. Most large businesses are doing well, making plenty of money. It’s ordinary wage-earners who are hurting.

How did nearly all the money in America flow to the top 20% of bank accounts, leaving the rest of us in recession? In my opinion, the main factors since 1980, in order of importance, were:

1. The information technology revolution.
2. Failure of education.
3. Government corruption and incompetence.
4. Globalization of economics.

The rise of the computer put a lot of people out of work from automation. I made much of my personal wealth doing just that (although not for that reason – I plead naïvete). I spent many years automating the pulp and paper industry with computer controls and robots, putting scores of hard-working people out of jobs forever. My bad. As a possible redemptive factor, I spent many more years using networked computers trying to educate the youth. However, I had far more success with the former than the latter.

Other aspects of the computer and information revolution made it easier for those who understood and controlled technology to separate people from their money, through deceptive and unscrupulous advertising and marketing (e.g, Big Pharma, Big Finance, etc.), and accumulation and exploitation of information about people. Technology and information resources are expensive and knowledge-intensive. Those who could understand it, and who could afford to put it to work, reaped wealth. Those who couldn’t, suffered. The technology revolution was not neutral – it favored the economically privileged and the well-educated, and still does. It was a primary factor causing wealth to flow from the bottom to the top of the economic pyramid.

And that brings me to the second cause of today’s financial crisis: failure of education. I have been a lifelong educator of youth and adults (except for my two-decade stint as a technology raptor). From personal experience, I can say that the educational system in this country is largely ineffective, virtually moribund. The basic cause of that is economics. Teachers are not well-paid because their product is very long-term (tomorrow’s leaders, movers, and shakers) and as we know, future value is heavily discounted. Also, students don’t vote, so why worry about them? Consequently, society as a whole has little incentive to properly finance education. Granted, many teachers are incompetent and curricula laughable, but those are consequences of economic underdevelopment, not causes.

There are plenty of smart people in this country who would become educators if they thought they could make a living at it. But except for the most elite, it is not possible. I myself dropped out of academia for twenty years because I needed to make some money. If a starting college teacher made $75,000 a year (instead of 30,000), and could expect salary growth comparable to a business or legal career, there would be qualified candidates. Actually, if there even were such a thing as a starting college teaching position, it would be an improvement. About half of college teachers are now “adjuncts,” which means part-time, with no health-care or pension, and that percentage is on the rise. Currently, postsecondary education is not a viable career for a principal earner. The situation is comparable for K-12 education (but much less so for educational administrators, who do better).

This economic analysis assumes that talent in education, as in any other field, costs more than lack of it. It is simply not reasonable that widespread, high-quality education in this country is impossible. The problem is that inadequate investment is made in classroom and administrative talent. There are also profound structural flaws in the educational system that entrenched interests are loath to address. In addition, political corruption favors the status quo (see #3: Corruption). The failure of education ultimately makes it easier for the economic elites to separate ordinary people from their wealth.

Third on my list of causal factors is government corruption and incompetence. The corruption is a direct consequence of how American politics is financed. The rich pay the politicians, who in turn, write laws that favor the rich. It’s an incestuous system that works well for both sides, selling power for money, trading money for privilege, all at the expense of ordinary people. It is not overt bribery, usually; this is not suitcases full of money. No, just as racism and sexism have moved from being overt to subtle, government corruption at all levels is now only detectible to the discerning. Just a special-purpose clause in a bill here, an appropriations contingency there, a blind regulatory eye, a tax loophole, and plenty of rhetorical obfuscation. It doesn’t take much to shave points off a game.

I’m not saying that illegal things are being done (though recent history suggests some of that goes on too), only that corrupt things are being done. Actions are corrupt when they violate the trust that ordinary people grant to politicians when they ask them to work on their behalf. Anyone who doubts that the American political system is corrupt is under-informed (see #2: Education).

The fourth and final causal factor in my list is globalization of economics. This came about mainly as a consequence of the technology and information revolution (see #1), which allowed rationalization of labor markets and currencies. As a result, jobs flowed out of America’s expensive labor market to cheaper markets abroad, to the great benefit of many millions of people around the world (e.g., in China, Mexico, and elsewhere), but to the loss of high-priced American workers.

Globalization of labor will continue, eventually consuming the livelihoods of the American affluent. We are already seeing this as jobs like legal research, financial trading, and X-ray interpretation move offshore. That trend will continue as global economics reaches equilibrium over the next couple of centuries, when even the most wealthy will find it difficult to exploit market anomalies to their own advantage.

Beyond labor market equilibration, globalization of trade, especially in oil, has sucked money out of the economy and funneled it to Big Oil. It is largely due to government corruption and incompetence (see #3) that America’s addiction to oil has not been treated in the past half century, despite numerous and obvious warnings.

What should be done, what can be done, about the current economic recession and its dark shadow of unconscionable wealth inequality? I have ideas, but that’s a different essay. Here I want only to enumerate my perception of the fundamental, distal factors causing the deep economic hole we are now in and from which we may never fully emerge.

Paper Training David Brooks

In today’s New York Times, Op-ed columnist David Brooks, the last rational conservative in the country, claims that the Republican party is unable to make a decision that does not even require a brain: compromise on the negotiations to raise the national debt ceiling. Republicans have the opportunity to significantly cut government spending and put long term limits on the growth of the federal government, with negligible harm to current economic growth. (www.nytimes.com/2011/07/05/opinion/05brooks.html?_r=1&ref=opinion).

These are all allegedly goals that Republicans hold in high priority. Yet they reject the opportunity to achieve them because the word “tax” has been mentioned. They are so religiously, irrationally, fetishistically, unreasonably opposed to any sort of revenue increase, they literally will walk out of negotiations if even the phrase, “closing tax loopholes” is mentioned. (http://articles.boston.com/2011-06-24/news/29699882_1_budget-talks-jay-carney-debt-limit)

Are Republicans mentally deficient, then? Brooks notes that they do not accept the logic of compromise, reject clear evidence, won’t hear expert opinion, deny the legitimacy of scholarship, have no economic theories to back up their position, lack moral grounding, indulge fanatical “fixation” on worshiping “their idol” of resisting all forms of government revenue increase, and are “not fit to govern.” Other than that, though, I wonder how he feels?

Now, I am no fan of these Republican tactics either. I would add to Brook’s litany of complaints that the Republican behavior is hypocritical, even extremely cynical. They care nothing for governmental fiscal responsibility, as the previous eight years of Republican rule amply demonstrated (two unfunded wars, unfunded tax cuts for the rich, failure to regulate the financial industry, unfunded drug benefits for the elderly, untrammeled military spending, and on and on and on). The record speaks for itself: Republicans care only for money and power, nothing else. Their talk about fiscal responsibility is transparent cover for their greedy pursuit of personal gain through economic rape of the country. Touche, Brooks.

Nevertheless, purely as an exercise critical thinking, it might be interesting to consider: what could they be thinking in the current negotiations about raising the government’s debt ceiling? Surely they realize that if the U.S. government defaults on its debt, the worldwide consequences would be catastrophic. Let’s assume for the sake of argument that these Republican negotiators are not mentally deficient and that they do have a rational strategy. What would it be?

I think it might be the same strategy one uses in paper-training a puppy. You want the dog to stop peeing on the floor, so what do you do? You whap it on the nose with a rolled up newspaper in the presence of its smelly offense, and you reward it with a dog biscuit when it goes on the paper. Simple, and effective.

Here is what you do NOT do: You do not try to reason with the animal, explaining why it is better for everyone’s health and state of mind, and for the relationship itself, that peeing should take place only on the paper. You also do not give a dog biscuit reward when the puppy pees a little closer to the paper than usual, because it was “pretty close” or “at least in the right direction.” It’s pee on the paper or nothing. You also do not refrain from the painful and humiliating swat on the nose when the animal pees “just a little”on the carpet. It’s swat if you missed the paper, no compromise.

Republicans believe, let us suppose, that discussion on the matter of federal spending, is pointless. Many discussions have been had in the past, all to no avail. Spending continues to increase and so do taxes to pay for it, they believe. The Republicans may also realize that they have no legitimate standing to argue for restraint, given their own history of profligacy.

So if discussion is pointless, that leaves only behavioral control. Like any good animal trainer, they will enforce a painful and humiliating government shutdown as long as the government continues to pee money on the carpet, and they will only allow the biscuit of revenue when the government shows proper restraint, which is to cut Medicare and Social Security.

There is a logic to this strategy, even though it incorrectly presupposes that Republicans have the intellectual, moral, or political authority to arrogate the role of trainer. But they do have a bit of leverage with the debt ceiling limit looming and control of the House. Of course the proper way to train the government is to win a popular mandate at the ballot box, but they haven’t been able to accomplish that, so this is an opportunistic substitute. It’s a flawed logic, but it is a logic, and a case could be made that the Republicans are being canny, not retarded.

However, I do agree with Brooks that this animal training strategy is so primitive, so flawed, so misconceived, that it will backfire and result in their own humiliation in November, 2012.

The Afghanistan Pullout

The U.S. is scheduled to start withdrawing troops from Afghanistan in about a month, after a decade of fighting there. Full withdrawal is supposed to be by 2014. Everyone expects the July 2011 withdrawal to be a token number, more symbolic than a meaningful proportion of the 100K troops there, because the battle against the Taliban is still at high pitch and the Afghans are not yet competent.

However, with the recent decapitation of Al Qaeda, there is opportunity to rethink the Afghan plan. The U.S. could plausibly declare the “war on terror” essentially won, because we got the perpetrator of the 9-11 attacks. Then we can get out of Afghanistan (and Iraq too!) much more quickly. Those were Bush’s wars of choice, which Obama inherited, and promised in his presidential campaign to end quickly. This is his chance to do what he said.

There is talk among the punditocracy that we must not “abandon” Afghanistan. We must “stay the course,” and make withdrawal sensitive to “conditions on the ground.” What is behind this kind of cautionary talk?

The fear is that as soon as we leave Afghanistan, the Taliban will take over (probably under the leadership of our man, Karzai). If that happens, then Pakistan may well go Taliban too, and then you’d have nuclear terrorists. Who they would attack first, the U.S., Israel, or Europe, is beside the point; we assume they would attack. Bad scenario. Therefore, do not pull the troops out of Afghanistan “prematurely.”

But that logic can be rethought. There are two sets of arguments for simply declaring victory and pulling out all the troops as quickly as possible. Argument set one is domestic: The war is very unpopular in the U.S.; it is bankrupting us, and Obama needs to win in 2012. One reason for the 2014 date for a “serious” drawdown in troops is that it would be after Obama’s re-election, so couldn’t hurt him, and might give Democrats a boost in the midterms. But that is chicken thinking.

The second set of arguments for pulling out now/soon from Afghanistan is that we are not accomplishing anything significant there anyway. We cannot kill or capture every Taliban terrorist in the country. They breed too fast. They can easily wait us out. As for “nation-building,” we aren’t doing much of that either. We’re trying, with clinics and roads, to make life better for the people, but we are not winning hearts and minds; the populace is ethnically divided and not susceptible to democracy; and it is an opium-based economy. Even the Afghan president, Hamid Karzai, doesn’t’ want us there. Hawks like senator Joe Lieberman insist we need to “build a country we can be at peace with.” But he doesn’t say how to do that, and he can’t, because it is not possible, at least not in his, mine, or Obama’s lifetime. Our position there is unsustainable as a practical matter. We cannot win militarily and we cannot be successful politically. The writing is on the wall: Afghanistan is going to be an anti-western, fundamentalist, Islamic theocracy. Let’s plan for the reality, not the fantasy.

Once Afghanistan has gone over to the dark side, the Taliban probably will influence or virtually take over Pakistan too, which is already halfway down the slippery slope to a failed state. Maybe we could continue to prop up Pakistan, just as we have propped up Israel for decades, and keep the nukes out of the hands of the Taliban. That would be much cheaper than what we are paying to keep troops in Afghanistan. But even that plan is not a sure thing. The Pakis are extremely ambivalent about us. They love our money, but that’s about all. Many are sympathetic to the Taliban. It is not for certain that we can buy their allegiance for much longer, and it is seriously not clear if Pakistan can survive as the pseudo-democracy it is now.

Conclusion:

Let Obama put his silver tongue to work and convince Americans of the real problem: We are stalemated in Afghanistan and so we should get out and plan instead for surgical retaliations when the Taliban acts up, as they surely will. We can, without being public about it, switch from a “global war on terrorism” to more of a police footing, where we kill and capture perpetrators, but do not invade whole countries and fight literal wars on their soil. We need to keep our legal options open. The president probably does not want to give up his “war” authority to pursue badguys to the four corners of the earth, across international borders where necessary, but there is probably some kind of slippery political language to finesse the legal points.

We should also prepare to prop up Pakistan (with the money we save by ending the war!) and also prepare for a failed Pakistan and even for nuclear terrorists. How will we react? Why not plan for the real probable future world, rather than hanging on to the status quo like some talisman that lets us avoid lifting our heads. A “stay the course” policy in Afghanistan is like a child’s superstition: Step on a crack, break your mother’s back. Hey, that won’t save us. It is pure superstition, not realistic policy.

Obama could pull virtually all the troops out of Afghanistan now and be ready to react to the next move. Yes, it’s a reactive approach, but we cannot be proactive against the Taliban in Afghanistan. That is amply demonstrated by the “facts on the ground.” The Taliban will not act rashly before 2012 because they know a Republican victory would probably bring the troops back in. They will wait. That gives Obama time to be ready with a thunderbolt response. Meanwhile the troops stop dying, and the money stops hemorrhaging in Afghanistan, and we’re no worse off geopolitically.

It's Not About Libya

France, Britain, and U.S. forces (“The Allies” according to the New York Times, as if we were still in World War II), invaded Libya today or yesterday, establishing a no-fly zone to protect civilians being slaughtered by Qaddafi. The action was authorized by the United Nations (with the BRICs abstaining) and endorsed by the Arab League. The Arab League has now reversed itself, saying, essentially “Mashalla! We didn’t realize it would involve bombs!” But the no-fly has apparently been established, despite Arab racism and/or spinelessness. (Photo: Christian Science Monitor)

The political and military consequences of the attack, in Libya and internationally, remain to be seen. For example, will “The Allies” maintain the no-fly zone indefinitely, with one or two planes being shot down every few months, as was the case in Iraq's no-fly zone? Maybe that’s not too expensive to tolerate. And since Qaddafi is a nut job, you can expect him to violate the intentions of “The Allies” in some way, bringing more grief upon himself and his country. Maybe that is ok too. There is, as usual, no clear exit strategy for impulsive acts.

Why did Obama do it? Why did he urge “regime change” and offer to lead the operation? The man has a friggin’ Nobel Peace prize for God’s sake. I thought he understood more clearly than anyone, that an “optional” war is never justified. What was he thinking?

Sure, he acted like he was dragging his feet, and that the invasion was a “last resort” and a “humanitarian necessity,” blah, blah, blah. And no question that Qaddafi is a bad actor, just as Saddam Hussein was. It was a righteous move, as they say. But the fact is, war is hell, and Obama invoked it, and he didn’t have to do it.

This is yet another U.S. war of choice. And make no mistake, we have committed an act of war. Ask Secretary of defense Gates. Sure, Libyan people were being killed by the brutal government. Terrible thing. But what’s that got to do with the United States Government? People are being killed in Yemen. Should we bomb Yemen now? How about Syria? Things are pretty bad there. Let’s bomb Syria! Bomb Bahrain! How about Venezuala? Hey, lots of people are being killed in Mexico right now by the federal government there…. What’s the rule for bombing the crap out of other countries? There are other ways to deal with problems besides bombs. Obama has got to know that.

Perhaps Obama calculated that he did not want to appear “weak” by standing aside as Quaddafi slaughtered his people with impunity. Bill Clinton took a bad rap in the history books by standing by too long while the slaughter continued in Kosovo and Serbia. Obama did not want to appear “weak.” But I thought Obama was intellectually above that disease: the slavishness to future history that seems to infect every president. Is he already writing his memoir?

Obama has made a huge mistake, one that mocks his Nobel prize, aggravates even further relations with the Arab world, immensely complicates U.S. foreign policy (if there is one), and greatly diminishes the U.S.’s moral standing, and Obama’s personal moral standing. But the man is not stupid. So why did he do it?

What if this is all about Pakistan, and ultimately, getting the troops out of Afghanistan next year? My guess is that Obama's end game is ending both the Iraq and Afghan wars by 2012. This has nothing to do with Libya, or at least, very little. Pakistan, which often seems on the verge of anarchy, is a nuclear power that harbors al Qaeda and the Taliban, who we are fighting in Afghanistan. Why does Pakistan do that? Because leaders there think the U.S. is “weak” and will leave Afghanistan too soon and that the Taliban will take the place over. Pakistan is therefore currying favor with what it assumes to be its future neighbor, the Republic of Taliban. Essentially then, we are in a tacit war with Pakistan. We even bomb them every few weeks, have been doing so for months. Pakistan is the third war we are fighting that nobody talks about.

The Paki’s think the U.S. is weak because they read the papers the same as we all do. They know we are in a recession, that the two overt wars are killing us fiscally, and that those wars have lost whatever popular support they ever had at home, and that Obama (“man of peace”) has vowed to end both wars, and that Obama faces a fierce election in 2012. They know all that, and they also know we are covertly at war with Pakistan. They calculate that the U.S. has neither the nerve nor the resources to force Pakistan to play ball with the U.S. in fighting the Taliban either in Afghanistan or in Pakistan itself. That is Obama’s bind. He is stalemated in the covert war on Pakistan.

Solution? “Send a message” to our nominal allies in the war on terror, the Paki’s, one that will also be heard and seen in Teheran, on the other side of Afghanistan: We still have the will and the way to bring a world of hurt down on you at any time. Do not “misunderestimate.” That, I think, is Obama’s rationale for invading Libya. It’s not about Libya.

Is Obama’s presumed strategy justified and is it smart? There is insufficient information to assess, but we can say, it is extremely risky. We’ll have to wait and see what future historians say!

What Republicans Fear

The big victory for the Republicans in the recent midterm elections was predictable and predicted, but still a mystery to me. For a long time I have been trying to figure out why so many people vote against their own economic and social self-interests. It doesn’t make sense. It’s not rational. At first I thought Republicans were just less well informed than others, so they genuinely did not understand what they were voting for. But I decided that can’t be right. There are plenty of well-educated Republicans and plenty (Lord knows) of uneducated democrats. Analyzing Republican rhetoric reveals several consistent themes, and I thought those themes might reveal what the attraction is.

Some of the themes are admired traits of:

• Plain working folks with common sense, not those Washington elites who tell us how to live
• States’ rights, not federal government authority
• Individualism, not collectivism
• Low, or no taxes, not redistributive progressive taxation
• Individual effort, not welfare
• Personal overcoming of problems, without government programs
• Voluntary charity, not wealth redistribution
• Strong, aggressive, even bellicose defense policy, not nuanced negotiation
• Absolutism, not compromise
• Religion, not secularism
• Strict morality, not permissiveness
• Moral interpretation of sickness, weakness, poverty, crime, bad luck
• Personal toughness, not mood-altering drugs (except for alcohol, nicotine, painkillers etc.)
• Free market economics, not government regulation or interference
• Strict, even literal interpretation of the constitution, without reliance on judicial precedent
• Isolationism not internationalism
• Uninhibited access to guns and weapons of all kinds, not regulation
• Racial, or at least ethnic homogeneity, not multiculturalism
• Tradition, not change
• Untrammeled business practice, not labor unions
• Economic growth, not inhibited by environmentalism or land use policy
• Fear of God, intolerant of atheism or agnosticism
• Non-acceptance, or intolerance of non-Christian religions
• Non-acceptance, or intolerance of non-democratic forms of government
• Heterosexuality only, no other patterns of sexuality
• Anti-abortion, anti-free choice about conception
• Merciless on crime, no mitigating circumstances
• Appearance more than reality
• Simple rather than complex solutions
• Intuition or gut feeling, more than reason
• Small government not large
• Passive government, not activist
• Government that spends no money except on constitutionally defined purposes
• Conformity over creativity
• American exceptionalism, not ordinariness
• Low tolerance for and acceptance of different cultures, ways of life
• Historical amnesia, not connectedness

I think that list hits the main points. These were culled from campaign speeches from the current midterm elections and other speeches going back to the 1950’s, such as speeches by Barry Goldwater, Ronald Reagan, and others.

Democratic speeches tend to emphasize the mirror image of those values, but this is about Republicans, trying to understand why, for example, they trumpet the sacredness of the “free market,” which brought us the mortgage crisis, the S&L crisis, the collapse of banking credit, and so on. Why are they so against government programs when their own children go to public schools and they drive on public highways and are glad to have social security and medicare? Why are they vehemently against government regulation which has halved air fares, and helps keep E. Coli out of our vegetables, lead paint out of children’s toys, and poisons out of medicine? Why do they chafe against separation of church and state while worshiping every word of the constitution? Republican values listed above, with a few exceptions, generally act against the economic and social self-interests of most voters. So how do Republicans win elections?

I think I have found the answer. In a word, fear. Republicans are fundamentally, personally, deeply afraid. They are afraid of criticism, ridicule, seeming foolish. They are afraid of appearing weak. It is a mentality of victimization. They feel they are always only a hair’s breadth from being oppressed, ridiculed, hurt, abused, and abandoned. It is a childish, or childhood reaction, not a reasoned adult attitude.

The fear arises from these sources: 1. Childhood abuse and/or neglect; 2. Just bad parenting in childhood; 3. Poverty in early life. 4. Poor early socialization leading to social exclusion, victimization, and low self-esteem.

To manage this deep-seated fear, Republicans, unconsciously, engage in “reaction formation,” a defense mechanism that emphasizes and exaggerates strength, fearlessness, prosperity, membership, high esteem, moral probity, social status. Of course everyone would like to enjoy those attributes, but when they arise from a psychological defense system, they become unrealistic, highly exaggerated, grotesquely inappropriate, because they are based on deep, unconscious emotion. These desired values are displayed bigger and louder than is necessary or even reasonable, because they have the impossible burden of keeping the lid on fear.

Defense mechanisms are ultimately not completely effective, however. The unconscious fear will still get out. The reaction formation is only a loose fitting lid over a seething cauldron of unconscious emotion. Consequently, Republicans still deeply fear the poor. Why? Because they know (unconsciously) that they themselves are just inches away from that pathetic, weak, morally suspect condition. For the same reason they fear the sick and are not much interested in reaching out to alleviate that suffering. Not because they lack compassion, but because psychologically, they simply cannot afford to contemplate what it means to be sick, weak, a helpless victim of Fate.

Big guns, big military, bellicose policies? Of course. It covers up the weakness that might be evident in nuanced negotiation. Big business and wealth? By all means. That means strength, not weakness. Government regulation? None needed. Regulation is like mom or dad telling you what you can or cannot do. It is victimization, and that cannot be tolerated. Taxes? The fewer the better, because paying taxes is victimization, giving up your hard earned money/strength/respectability to a tyrant. States’ rights? Yes! Submitting to mandates of the federal government is just like being sent to your room. It is victimization. Leave us alone.

How do Republicans win elections? They appeal to fear, and that works especially well when people are in fact afraid, for their job, their house, their retirement, their health, their safety against terrorists. It’s immediate, and it's not rational, so people will vote for the perception or even promise of strength over any economic or social reality.

How can Democrats win elections? By minimizing fear, providing safety and prosperity. By convincing ordinary voters that they are OK, and that everything is going to be alright. Just the way you calm a child who is afraid. What you do NOT do is try to explain to them the tax codes or Fed policy, long term strategies for reducing the debt, or the subtle chess games of international politics. That is not what elections are about. It is not a rational issue. It is all about fear, and overcoming it, despite the campaign rhetoric that tries to focus attention instead on rational, intellectual, policy debates. That’s all just cover talk for the real issue: fear.

People hate negative “attack” ads because they are irrelevant ad-hominem messages. They miss the point. They do not address the issue of fear. Except when they explicitly do: “Candidate X will ruin your life, raise your taxes, embrace the terrorists, confiscate your retirement, eliminate your job, send you to your room.” But of course you must be able to prove those claims to get away with them (because of government regulations). The anti-Goldwater "Daisy" ad that showed a nuclear bomb going off behind a little girl was a perfect campaign ad.

Lyndon Johnson’s “Great Society” programs were only possible because, despite the Vietnam war, it was a time of prosperity. People (most voters) were not personally, psychologically afraid.

Another move is that, when circumstances are so bad that fear turns to literal panic or outrage, the fear becomes conscious, explicit, no longer the unconscious childhood fear that Republicans can cover up (more or less). In that case, voters will look for realistic, rational solutions. This happened for FDR and Obama. But unless actual safety and prosperity are then forthcoming, voters will quickly revert to the difficult task of tamping down irrational childhood fears and rationality is no good for that, so Republicans will win again. Voters can’t help it because the underlying fear is not conscious.

Are Democrats immune from this unconscious fear-driven approach to life, most of the time? Not entirely, but there is a difference. In brief, Democratic psychology is bimodal. There is a hump of poor, undereducated, badly socialized, socially marginalized, but communal-living people at the low end and a highly educated, self-aware, critical thinking hump at the high end. The low mode are the likely beneficiaries of Democratic compassion and government largess, but they are also exactly what a Republican unconsciously fears. Republicans eschew the unwashed masses but they can draw votes from them when people feel the fear.

This is a story that satisfies me, after many years of thinking about why people vote against their own self-interests.

Is Obama Threatened in 2012?

Much is being made of the fact that this year, 2010, the midterm elections also happen be in a census year. After a census, congressional districts are redrawn (“gerrymandered”), a highly partisan political process led by the winning party and its governor in each state. Districts are drawn so that they are “pure” Republican or Democrat, so there is virtually no chance for dissent in any district, and therefore no serious competition for legislative seats. If, as expected, Republicans win more governorships and House seats this year, they will control the gerrymandering process, eliminating much competition for the next ten years, and that includes 2012.

The President will need, as always, 270 electoral college votes to win in 2012. The number of congressional seats in each state determines how many electors it gets. Republican states in the south, such as Texas, are expected to gain more electors after the census. So according to some sources (e.g., http://www.foxnews.com/politics/2010/10/23/midterm-races-hold-key-white-house-congress/) this will make it especially hard for Obama to get re-elected.

This is a spurious argument, I believe. Electors cast their vote according to the popular vote in their state. It is not illegal for an elector to ignore the popular vote and cast a ballot arbitrarily in a partisan way, but to my understanding that is extremely rare. So the census is not a direct threat to Obama.

A more serious threat is that the GOP will have some new Governors elected in 2010 and among them, there might be some credible presidential candidates, although two years is not much time to build an organization sufficient to mount a successful presidential bid. Still, their stable is awfully sparse now, and would benefit greatly from an emergent figure.

It’s true that Obama will have a difficult time governing if he loses the House majority to the GOP, as seems possible. However I think there are two silver linings in that scenario. One, the republicans will have to put their necks out when they are in charge. If they really want tax cuts for the rich and do not believe in health care for the poor, they will be forced to say so, and vote so. They no longer can throw stones from the sidelines without any responsibility. I believe the GOP has become so extreme that their bizarre ideas will be illuminated for all to see and that will be good for Democrats in 2012.

Secondly, I am not so sure that congress will be gridlocked for the next six years. Unless the Republicans really are delusionally detached from reason, some of them are going to have to realize that it will look bad for them in 2012 if they continue to act like petulant children. The more reasonable among them, and there must be some of those, will be forced to talk reasonably about reasonable legislation and make reasonable compromises, to get reasonable things passed. It could happen.

It is almost inconceivable that Obama could fail to get re-elected in 2012. By then, people will be more familiar with the Health Care act and maybe the Financial Reform act too, and will appreciate those. The economy will almost certainly be better by then, although probably still limping. Both wars should be essentially over. Guantanamo should be closed. And, I think Obama will compromise on letting the Bush tax cuts expire, renewing them even for the rich for two more years, so that in 2012, it will be the Republicans who have to explain why it is good for America for the richest 2% of the population to get an enormous tax cut. That’s a tough sell even for wing nuts. However, most Americans consistently vote against their own best economic interests by electing Republicans, I think because of a lack of critical thinking ability, which is my fault (I am an educator).

Republicans in the Ascendant?

Senator Kit Bond, Republican from Missouri, sent a letter to the Economist magazine, published July 3, 2010. I thought it was noteworthy in revealing a lack of critical thinking, and conversely, a penchant for rhetorical fallacies, especially imprecise metaphors and emotionally loaded modifiers. Both sides of the political divide indulge this kind of phatic speech but this is a particularly interesting example because it seems like he is trying to be even-handed and facts-based, but just can’t manage it.

The new Republican agenda
SIR – Your analysis of what is wrong with the Republican Party hit one right note: voters expect solutions, not just rage (“What’s wrong with America’s right”, June 12th). President Barack Obama and his party in Congress came to power by riding the powerful tailwinds of discontent; Americans were rightfully angry that some on Wall Street had caused a financial crisis that left many families with a pink slip instead of a pay cheque.

The Democrats have taken advantage of this anger to force their agenda through Congress, while blocking Republican bipartisan solutions. Democrats have steamrollered through both chambers their policies of expanding government, increasing spending and swelling our debt. It is no surprise that American voters are once again angry, sick with bail-out fatigue, government overreach and runaway spending. Americans feel like Washington is no longer listening to them.

[My Comments: Is any majority vote a “forced agenda”? Did the Democrats “steamroller” their proposals through congress? I recall plenty of debate. But the Republicans lost. The majority rules in this country. That cannot be a novel concept for the senator. So what is his point? That he is a sore loser?

Did democrats “block” Republican solutions? I am not aware of any serious proposals from Republicans on Health Care Reform or Financial Reform. Republicans attempted to obstruct every single legislative proposal and not a single Republican voted for Health Care Reform. Republican proposals were invited but were not forthcoming. But let’s assume there were some proposals that I am not aware of. Were they bipartisan? Declaring that an idea is bipartisan does not make it so. If no Democrats accept a particular Republican proposal, in what sense is it bipartisan?

Do Democrats have “policies” of expanding government, increasing spending, and swelling our debt? These may be short term consequences of Democratic actions, but there is no policy that Democrats hold these as principles. The national debt tripled under George W. Bush. (Wars are expensive. Tax cuts are expensive.) Was it therefore a “Republican policy” to increase spending and swell the debt? I doubt the senator would agree. The senator conflates selected, short term consequences of legislation with general political policy.

Some Americans, perhaps including the Senator himself, may be “angry, sick with bail-out fatigue, government overreach and runaway spending.” However polls do not support that characterization of the majority’s views. I myself, for example, do not feel that way. I think the Democrats pulled the country back from the precipice of disaster with the bail-out, then used its majority power to extend health care to millions of Americans. There is no evidence that the spending was, or is, “runaway.”

It may be true, however that “Americans feel like Washington is no longer listening to them.” But that is always true. Politicians in Washington live in a bubble world, regardless of what party is in power. Hardly any information gets in or out. So this objection is not germane to the Senator’s complaints.]

[The senator continues...]
This new wave of anger offers the Republican Party an opportunity to promote its policies, which reflect the philosophy that America’s future depends far more on empowering individuals than empowering big government. These pro-growth solutions, such as Paul Ryan’s sound plan to deal with the deficit, include tax relief for individuals, families and small businesses, a comprehensive American energy bill and real health-care reform that lowers costs and improves care. Common sense solutions will not only sate voter anger and erase economic uncertainty, but bring sanity back to Washington policies.
Senator Kit Bond
Washington, DC


[My Comments: The first sentence of the senator’s final paragraph is a legitimate proposition and is well-stated. The Republican party should promote its policies. However, the next sentence begins by characterizing Republican policies as “pro-growth.” But growth for whom? History would suggest that Republicans favor growth of wealth and power for those who are wealthy and powerful. Democrats, on the other hand, are concerned more with economic prosperity for the lower and middle classes. “Pro-growth” is thus a vague generalization. In political speak, it is generally code for pro-business.

The senator endorses Paul Ryan’s “sound plan.” What is that? It is, roughly, a House bill (HR4529) that would cut medicare benefits for millions of Americans. Is that a “sound” idea? Yes, in the sense that it would significantly reduce the government’s entitlement burden, the main factor that must be addressed to “bend” the deficit curve. However, what about all the millions of people who have no other form of health care? Let them eat cake?

Ryan proposes that people be given vouchers with which to buy private insurance, which would take them off medicare. We must assume that these vouchers would be worth much less than the parallel value of medicare costs over a person’s lifetime, for otherwise there would be no savings to the government. So essentially, the plan is to undo the Democratic health care reform, not by repeal, but by replacing all those newly covered millions by millions of others kicked out from the full coverage umbrella of medicare. Is that sound policy? Depends on whether you think government is to serve all the people, or just the rich ones.

I also notice in the senator’s last paragraph that he speaks of “tax relief,” instead of “tax cuts.” Apparently Republicans have become aware that their favorite slogan is mindless and subject to ridicule. But who could object to tax relief? Everybody wants relief.Nevertheless , I would rather have “relief” from the two wars started under Republicans that have drained the treasury, rather than “relief” from mass transit, hospitals, green energy, financial regulation, education, and health coverage. “Tax relief” without a discussion of what taxes buy, is not a proposal, but a specious shibboleth.

Are common sense solutions the best as the senator asserts? It depends on whose notion of common sense you mean. I don’t trust Senator Bond’s. It’s up to him to persuade voters that his idea of common sense is in our own best interests. He, and other Republicans, may be able to do that, because most voters are not able to exercise critical thinking any more than the senator is. It’s all about emotion, personality, and innuendo.]

Who is Running Israel?

Israel is receiving international condemnation of its raid on a ship bringing supplies to Gaza. The Wall Street Journal reports Israeli Prime Minister Netanyahu has argued that “the blockade of the Palestinian territory is necessary to prevent missile attacks against Tel Aviv and Jerusalem.” (“Israel’s Isolation Deepens,” http://online.wsj.com/article, 6/2/2010). That may be true, but it is not at all relevant to the criticism that Israel used inappropriate force in stopping the ship and killing ten civilians.

How many ways are there to stop a blockade-busting attempt? You can warn the invaders; apparently that was done to no avail. You can physically block them with other ships, or rafts, or other barriers. You could allow your own boats to be damaged by the invader, demonstrating provocation. You can tow the other guys away. You could tear gas the crew. You could ram their boat. You could tangle their propellers with nets.

Is it necessary to board the ship and kill everyone? What kind of thinking is that?

This incident betrays a far deeper problem than a diplomatic “incident” from a mishandled operation. It may demonstrate that the Israeli military is not really under civilian control. The military seems to be blinded by bloodlust, (as demonstrated by inappropriate use of force this time, and in the past), so let’s hope it is not generous to assume that cooler heads exist in the civilian government.

From Netanyahu’s remarks, there is some doubt about that. Naturally, it is his job to defend the action. But if we take his irrelevant defense at face value, it shows that he hasn’t got a clue.

He refuses to apologize “for defending ourselves.” He blames the Obama administration for encouraging others to gang up on Israel. He blames Hamas for shooting rockets into Israel. He says Israel has a right to inspect cargo going into Gaza. He reiterates his claim that there is no shortage of food or medicine and no humanitarian crisis in Gaza (http://www1.voanews.com/english/news/middle-east/Israel-PM-Defends-Deadly-Raid-on-Aid-Convoy-95435204.html) . He asserts that this is not an issue of human rights and not even an issue of right vs. wrong.

Can he really be that stupid to not understand what the international outrage is about? I don’t know anything about him personally, but it is hard to believe that he is stupid. So the alternative interpretation is that he is boxed in by the military and can say nothing else. I would rather have a stupid person in charge than nobody in charge, or worse, have an autonomous military in charge there.

Nancy Pelosi, National Hero

I say three cheers to House Speaker Pelosi for shepherding the Health Care reform bill through the house this weekend, to get it to senate reconciliation. Just a couple months ago the bill was all but moribund after the senate lost its Democratic majority.

Pelosi is a fierce partisan, much reviled by Republicans, but that’s exactly what was needed in this case. She is often criticized, even by Democrats, for not being more accommodating to the other side in her work. But I think that is naïve. Not a single Republican voted for the health care bill. Not one. They are apparently against health care for all Americans, satisfied that the affluent have care. Nor did Republicans propose any serious alternative, or engage in any serious debate of the substantive issues. They behaved merely as petulant obstructionists and continue to do so.

People who say Pelosi should have been more accommodating of Republicans to avoid the brinksmanship of this past weekend are not aware that we are in the era of “Fuck You politics.” There is no cooperation. There is no possibility of compromise. Conversation is not even possible. Pelosi knew that from the start and played her cards accordingly.

Some Democrats criticize her for being greedy. They say she wasted a lot of valuable time and political capital trying to get American health care grounded on a public option, rather than on private industry. Had the house supported a more moderate bill, the deal would have gone through earlier, more easily, and without the political fallout that some representatives will now suffer. But that is the fallacy of hindsight.

Pelosi had a large majority in the House and there was a narrow majority in the Senate, and Democrats were in the White House, so why NOT go for the brass ring? I would have done the same. It was not unreasonable to set the sights high. It was Republican propaganda that killed the public option, that, and Democrats’ characteristic inability to sell their ideas. Pelosi was not wrong going for the whole garbanzo. And she was smart enough to rein in her aspirations when the reality on the ground changed.

So I say, when it comes to the toughest, most junkyard-dog of a partisan legislator around, I am grateful she is on the right side.