How about, "See you around"? I don't know where, exactly, though I do have some good ideas. More on that at the end.
While that may suffice for us individually, though, it certainly can't for us as a community. And that's what I will miss most of all about Open Left. Of course I'm grateful to Chris, Matt & Mike for creating this place, and then giving me the opportunity to write here. But I've always craved online writing because of the immediacy of hearing what people think of what you've written, because there is so much to be learned. It's axiomatic, really, that the group mind is orders of magnitude smarter than the individual mind, so the smartest thing the individual mind can do is find the best way to benefit from the group mind.
It's not just about intelligence, of course. It's also about wisdom, compassion, humor, patience, forgiveness, forbearance, resilience... and on, and on, and on. In a word, it's about community. Because we are social creatures, made so by millions of year of evolution, this is the highest and deepest thing it can be about.
It's messy as hell, though, because we're also individuals with strong ideas and the ability to articulate and defend them. So counterpoint, more than harmony, is the ideal ideal for a place like this. Of course the ideal isn't always realized. In fact, it's usually not. Otherwise, it wouldn't be an ideal. But we come close enough often enough to keep the ideal alive in the flesh, and not just some abstraction that all can agree on, because it's never real.
I wish I could mention everyone by name, and acknowledge the sorts of things I've learned from them, the things I will miss. I wish this especially, because if I start with just mentioning one or two, then where do I stop? There are a few of you I'd especially like to single out by name... but then that would unintentionally slight others, and that's the last thing I'd want to do. So, I wish I could mention you all by name... even though I know I cannot. And so, instead, I'm going to do the incredibly lame thing, and just say, "You know who you are." But I will try to elevate it just a smidgen by adding, "And so do all the rest of us." You've made this a truly wonderful place to write, a place that always made me want to do better next time. A place that kept me wanting to grow. And I hope, above all, that it was that sort of place for all of you as well.
I will continue writing, of course. Above all, I have a backlog of ideas for books I want to write, and I'm determined to focus on getting one of them done. But I also want to keep writing online--although at a lest all-consuming pace. Unfortunately, I've got things in the works, but not finalized yet.
That's why God invented search engines. With date ranges. You'll be able to find me, I'm sure of it. I should be popping up somewhere within a couple of weeks or so.
Click the links and savor what your fellow OL'ers had to say about the follies of the day. The last word is theirs, not mine. Or yours, in comments. Good-bye.
In my previous diary, "Fool's gold", I wrote about Paul Krugman's blog post from last week, "The War on Demand". After quoting a bit from Krugman's set-up, (shortened version):
.... it's becoming clear that many people don't so much disagree with the idea that demand matters as find it abhorrent, incomprehensible, or both. I fairly often get comments to the effect that I can't possibly believe what I'm saying about monetary or fiscal policy, that no sensible person could believe that printing money or engaging in deficit spending will increase output and employment - never mind that all I'm saying is what Econ 101 textbooks have been saying for the last 62 years.
So what's going on here?
I summarized:
Krugman went on to suggest three things: First, there's a basic inability to see how shortfalls in demand are even possible. Although Krugman doesn't realize it, this derives in part from arrested cognitive development, explicable in terms of Kegan's typology. Put simply, Level 3 thinking, in which the individual is the product of their social surround, cannot stand outside of itself, and comprehend the social system as a system. And that is what you must be able to do in order to understand shortfalls in demand. Second, there's a fixation on Strict Father monetary morality--although, again, Krugman doesn't explicitly discuss the Strict Father angle as such. Third, there's a failure of traditional Friedmanite monetarists to realize that they are "part of the problem" in they eyes of the newly-emergent demand-deniers.
In that diary, I focused on the first item, tying it to a Kegan-style analysis of the role of cognitive complexity. I had already discussed the issue of moral economic visions before. But now I want to talk about the relationship between the two.
You see, the problem with folks like Obama is not that they want to try to mediate between liberals and conservatives. After all, the central liberal values of tolerance and respect for individual conscience are heavily slanted toward favoring such mediation. No, the problem is that Obama wants to mediate on the lowest possible level of cognitive complexity--and conservatives, of course, just keep dragging that level down, down, down the dark ladder, as Joanie Mitchell would say.
In Kegan's typology, Level 4 corresponds with modernism, self-authorship, and ideology. It is the level at which the individual steps back from society and makes their own decisions about what is right and just--and takes responsibility for doing so. Level 3 is the level of traditionalism, where one simply accepts the social world as one finds it. These two levels correspond quite well to traditional liberalism and conservatism. And while it's certainly true that traditional society has liberal as well as conservative content to it (just read the Gospels, if you have any doubt), once one fastens on to autonomy as a central liberal value, it should be quite obvious that one cannot fairly ask a liberal to "compromise" with conservatives using a Level 3 framework that not only denies the value of autonomy, but that cannot even really grasp it.
Of course one could make a similar argument about the unfairness of asking conservatives to compromise with liberals using a Level 4 framework. As I discussed in "Fools gold", anyone operating at a lower level will be unable to really grasp crucial concepts that are central to the next-highest level.
Which is why, really, one simply can't accept conservatives as equal bargainers, mo matter how much one might want to. This does not, however, mean that one must reject paying any attention to them. It's simply that one can't grant them the sort of dominating and defining role that they naturally seek and assume, based on their Level 3 logic of defining the self in terms of society, and assuming that this justifies their view and their view alone as "right" and "natural".
As an example of what I'm driving at, consider the Congressional Office of Technology Assessment, which Gingrich abolished when he became Speaker in 1995. The OTA provided an objective screening process to create a common foundation for policy discussions. And Gingrich just hated that--as well he should, raging egomaniacal narcissist that he is. And here we have to distinguish between two distinct strands of conservatism: the moderate conservatism of Edmund Burke and the reactionary conservatism of Joseph de Maistre....
I've been thinking laterly about the irrational belief in gold as some sort of magical metal, the only proper foundation for a money system. For a long time now, the most prominent gold bug has been Ron Paul, whose irrationality on the subject is underscored by the fact that he styles himself bas both a populist and a history buff as well. But, of course, historically the populists were deeply opposed to the gold standard. They were bimetalists, and the most famous speech related to the issue was William Jennings Bryan's "Cross of Gold" Speech. As Paul's general confusion on the matter suggests, gold buggism is usually not a matter of an isolated mistaken belief. Rather, it's more of indicator, a tip-of-the-iceberg sort of thing. Which is why evidence is almost always utterly useless in dealing with goldbugs. A couple more pieces of such evidence popped up this past week.
Gold is perceived to have two useful purposes: one, as a hedge against inflation and two, as a hedge against uncertainty.
The world has been plenty uncertain throughout the month of January. First, a revolution kicked Tunisian President Ben Ali out of power. Next, protests took Egypt by storm, with its leader, Hosni Mubarak, being challenged.
While you would assume a major political event for one of the most influential players in the Middle East would trigger a surge in gold as a hedge against uncertainty, it hasn't.
Gold has declined this month, and only moved slightly higher in the wake of the protests (things really kicked off on January 17th, with a protester setting himself on fire in Cairo). Gold moved higher after the first big protests, but then moved lower, and has flatlined since.
Egyptian CDS, protection on the country's sovereign debt, has spiked and stayed high since the protests began.
One of the discouraging features of economic debate today - maybe it was always thus, but it seems especially intense now - is how much of it rests on "facts" that aren't, but which become articles of faith....
Anyway, one alleged fact I keep hearing is that recessions were short and shallow under the gold standard. I don't know where that's coming from, but it just ain't so. The data aren't as good for the pre-1933 era as they are now, but for what it's worth they suggest that there were a number of nasty, prolonged slumps under the gold standard. In particular, the Panic of 1893 was associated with a double-dip recession that left industrial production depressed and unemployment high for more than 5 years. Here's the estimated unemployment rate from Historical Statistics Millennial Edition:
But both these examples are of secondary importance compared to this self-explanatory chart, published in various different forms over a period of months (this colorful version from Matt Yglesias):
The fact that going off the gold standard was essential to recovering from the Great Depression is the death knell of gold bugism, from a rational standpoint.
But, of course, what's rationality got to do with economics these days? Which brings me to something Krugman wrote last week, "The War on Demand", which might as well be called "The War on Macro-econmics", which is roughly the equivalent of the "War on Evolution" or the "War on Global Warming", although it appears to be far less intentionally organized:
"Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;"
-- William Butler Yeats, "The Second Coming"
Last night, Rachel Maddow gave a brilliant introduction to her show, dissecting the Mubarak strategy of first alleging, then fomenting violence in order to represent himself as the only possible savior--and presenting it in the context of other similar examples, from Tiananmen Square to the stymied 2009 Iranian Revolution. It was about as incisive and on-point as American network tv ever gets:
But then, of course, she shifted to live coverage of the unfolding street battles around Tahrir Square, and it became heartbreakingly clear that Mubarak had gotten what he was aiming for: his thugs had created a state of escalating chaos that Mubarak could use to argue that he alone could solve the immediate crisis that he alone had caused.
What also became heartbreakingly clear was the utter and thorough incompetence of the Obama Administration, which flows directly out of his Burkean conservative governing philosophy. Just as Obama's first two years were dominated by his somnambulistic choice of an economic team composed almost entirely of those who had caused, enabled or mis-managed the crisis he inherited, it now seems ominously all-but-certain that his next two years will be haunted by an analogous foreign policy disaster--sharply, painfully at odds with the promising picture he painted early on with his historical Cairo speech early in his presidency.
Burkean conservatism is based on the idea that the existing status quo--based on centuries of tradition--is inherently worthy of deference, as are the elites who preside over it, and that any change should be gradual and incemental, undertaken only after a comprehensive consensus has been achieved. This philosophy never made much sense in Burke's time, itself a period of tumultuous change, and makes less sense in our time. But that is clearly Obama's underlying philosophy, as utterly unsuited to reality as it may be.
Because he shunned creative, critical, inquisitive, independent-minded advisors in virtually every area of governance, Obama has virtually assured that he will fail in one area after another. In foreign policy, as we are seeing right now, he has yet to show any evidence of thinking even one silly millimeter outside the disastrous parameters of Bush's "long war"--and because of that, it is axiomatically impossible for him to come up with a coherent policy response to the problems we face--much less come up with pro-active initiative.
[O]fficials at the Pentagon, the State Department, the Central Intelligence Agency and the White House were running various scenarios across the region in an effort to keep up with events.
What would the covert American war in Yemen look like if the supportive Yemeni president were to be forced out? Will Mr. Mubarak's successor duplicate his support of the Middle East peace process? Will the shifts in the region benefit Islamic extremists, who will try to capitalize on unrest, or will it show the Arab street the power of a secular uprising?
The obvious problem here is that no one thought to run such scenarios before the last 24 hours. But the deeper problem is the no one seems to have thought about such scenarios and reached the obvious conclusion that the entire foreign policy approach was delusional, and needed to be scrapped without a trace.
None of this means that Obama won't get re-elected. After all, Bush managed that trick, despite an equally abysmal record of failures. But it does mean that people need to shake off their illusions born of listening to Obama speechify. Instead, they need to focus like a laser on what he actually does--and utterly fails to do. He has inherited deeply failed policies on every front, and has proposed only the most modest, Burkean of changes. It is a recipe for catastrophic disaster. Bad as things may stand now, they are poised to get tragically worse.
Where is the Obama people thought they were voting for? Surely, he could save us. If only he actually existed.
On Wednesday, the Mubarak regime showed its fangs, mounting a massive and violent repressive attack on the peaceful crowds in Tahrir Square in downtown Cairo. People worrying about Egypt becoming like Iran (scroll down) should worry about Egypt already being way too much like Iran as it is. That is, Hillary Clinton and others expressed anxiety in public about increasing militarization of the Iranian regime and use of military and paramilitaries to repress popular protests. But Egypt is far more militarized and now is using exactly the same tactics.
The outlines of Hosni Mubarak's efforts to maintain regime stability and continuity have now become clear. In response to the mass demonstrations of the past week, he has done the following:
1. Late last week, he first tried to use the uniformed police and secret police to repress the crowds, killing perhaps 200-300 and wounding hundreds.
2. This effort failed to quell the protests, and the police were then withdrawn altogether, leaving the country defenseless.... The public dealt with this threat of lawlessness by organizing self-defense neighborhood patrols, and continued to refuse to stop demonstrating.
3. Mubarak appointed military intelligence ogre Omar Suleiman vice president.....
4. Mubarak mobilized the army to keep a semblance of order, but failed to convince the regular army officers to intervene against the protesters....
5. When the protests continued Tuesday, Mubarak came on television and announced that he would not run for yet another term and would step down in September. His refusal to step down immediately and his other maneuvers indicated his determination, and probably that of a significant section of the officer corps, to maintain the military dictatorship in Egypt....
6. When this pledge of transition to a new military dictator did not, predictably enough, placate the public either, Mubarak on Wednesday sent several thousand secret police and paid enforcers in civilian clothing into Tahrir Square to attack the protesters with stones, knouts, and molotov cocktails, in hopes of transforming a sympathetic peaceful crowd into a menacing violent mob. This strategy is similar to the one used in summer of 2009 by Ayatollah Ali Khamenei and President Mahmoud Ahmadinejad to raise the cost of protesting in the streets of Tehran, when they sent in basij (volunteer pro-regime militias). Used consistently and brutally, this show of force can raise the cost of urban protesting and gradually thin out the crowds.
Note that this step number 6 required that the army agree to remain neutral and not to actively protect the crowds. The secret police goons were allowed through army checkpoints with their staves, and some even rode through on horses and camels. Aljazeera English's correspondent suggests that the military was willing to allow the protests to the point where Mubarak would agree to stand down, but the army wants the crowd to accept that concession and go home now.
It may just be wishful thinking on my part, but I think that the army has made a grave miscalculation, potentially destroying its heretofore unparalleled positive stature in Egyptian society. Mubarak has nihilistically shown himself to be willing to destroy Egyptian society rather than leave in peace. The army appears to be tacitly backing this nihilistic play.
As Cole has explained in his immediately previous post, "Why Egypt 2011 is not Iran 1979", the fear of a fundamentalist takeover is entirely misplaced in today's Egypt. But if the army blocks this unprecedented broad concensus of the Egyptian people, there is simply no telling what sort of future havoc they are sowing, be it five years in the future or a full generation.
I do not expect any sort of benevolence or far-sightedness from the Egyptian military. Military organizations are not known for such things. But I do hope, simply, that strong enough elements in the Egyptian army value their unique status in Egyptian society to do the right thing, and thus reaffirm that that status has been justly earned, and should live on through history.
The question, really, is whether they warriors--men of honor--or merely good soldiers who do as they are told. We forever hear so much about warriors, and forever see so little.
All the more reason that Egypt's army should surprise us all, and cover themselves in glory.
As Sun Tzu says, the greatest victory is won without firing a shot.
Until he invited Dylan Ratigan on to muddy the waters, this segment on the Ed Show last night was a rare and extremely edifying look at the role that commodity speculation played in driving up food prices, and helping to spark the unrest that eventually toppled the regime in Tunisia, and appears to be on the verge of doing the same in Egypt. It's actually not that strong on the immediate specifics--its strength lies more in the fact that it tells the longer story--of how FDR set up a system that limited speculation, and how that system was taken apart, beginning in 1991, under the lead of Goldman Sachs. Take a look:
Instead of Dylan Ratigan's Ron Paul-style paranoia about quantitive easing, Ed's reporting would have been better supplemented by stressing how IMF neoliberal policies have helped contribute to this situation in at least three major ways. Starting around 1980, the IMF began conditioning loans on the adoption of "structural adjustment policies" (SAPs). Guiding principles involved in this strategy included:
(1) Cutting public subsidies for food, along with other basics, such as public education, thus making food prices more volatile.
(2) In addition to weakening farm sectors by reducing subsides, the IMF required weakening, if not complete abolition of protective tariffs, which had the effect of destroying most country's ability to feed themselves.
(3) The IMF's focus on loan repayment and "economic development" as the IMF defined it put a high priority on replacing food staples with cash crop production--crops which were, by their very nature, particularly vulnerable to price fluctuations, and thus to speculative manipulation.
Ironally, the reality is that countries like Tunisia and Egypt actually beat the bad odds of the IMF's neoliberal game in one particularly noteworthy way: Despite the incentive structure imposed by neoliberal policies, both countries managed to continue educating a significant fraction of their youth--educating them for jobs that the IMF's neoliberal prescriptions prevented those economies from ever creating in substantial numbers.
It was the enormous gap between youth's work capacity and the lack of suitable employment that created a chronic and widespread social problem that no neoliberal regime could possibly solve. This was the pervasive background settin g the stage for the acute problem of food price spikes. The latter was indeed the detonator. But the former was the bomb.
Writing about Egypt & the worldwide neoliberal failure, I couldn't help but think about the devastating impact of neoliberal policies here at home, in particular regarding education. Jeff has written before about the Program for International Student Assessment and how its results have been misread and misrepresent, and his kind of detailed analysis is invaluable. But sometimes it helps to blunt, as well. In a recent email discussion my attention was drawn to an excellent blog post from mid-December, "PISA: It's Poverty Not Stupid" by Mel Riddle for the National Association of Secondary School Principals, which had some data analysis that made things blindingly clear--especially when I made a couple of charts.
First off, here's what happens when use data about free and reduced price meals as a proxy for poverty rates, and group schools accordingly:
Then here's what happens when you take that data and use it for international comparisons:
So, it turns that when you adjust for poverty rats, US schools pretty much kick ass. Whouda thunk it?
Finally, just look at poverty rates and PISA scores side-by-side:
"They are stealing our future" is a phrase I've heard repeatedly from the Egyptian protesters. It's the same accusation that America's low-income children could say with just as much justification.
On Sunday, Juan Cole wrote a very concise backgrounder to peaceful revolution going on in Egypt, "Egypt's Class Conflict". It's not only about class conflict, of course, but also about the shifts in political ideology and foundations of legitimacy from Nasser's time to today. As such, one of the most valuable things it does is to highlight the role played by failed neo-liberal policies--which are hardly unique to Egypt, of course. Last August, for example, in my diary "The neoliberal failure", I called attention to a five year old report from the Center on Economic Policy Research (CEPR) "Scorecard on Development: 25 Years of Diminished Progress" by Mark Weisbrot, Dean Baker and David Rosnick, a broad survey of results in over 100 developing countries. From its executive summary, here is what it found:
This paper looks at the available data on economic growth and various social indicators - including health outcomes and education - and compares the last 25 years (1980-2005)1 with the prior two decades (1960-1980). The paper finds that, contrary to popular belief, the past 25 years (1980-2005) have seen a sharply slower rate of economic growth and reduced progress on social indicators for the vast majority of low- and middle-income countries.
The picture of Egypt that Cole paints--powerful enough in its own right--is thus but one example of many. And the failure being underscored by the unfolding revolution is likewise but one example among many.
As hundreds of thousands (then, now millions) had ignored government-called curfews, that was a clear sign the government had lost authority, Cole noted, then wrote:
Authority is rooted in legitimacy. Leaders are acknowledged because the people agree that there is some legitimate basis for their authority and power. In democratic countries, that legitimacy comes from the ballot box. In Egypt, it derived 1952-1970 from the leading role of the Egyptian military and security forces in freeing Egypt from Western hegemony. That struggle included grappling with Britain to gain control over the Suez Canal (originally built by the Egyptian government and opened in 1869, but bought for a song by the British in 1875 when sharp Western banking practices brought the indebted Egyptian government to the brink of bankruptcy). It also involved fending off aggressive Israeli attempts to occupy the Sinai Peninsula and to assert Israeli interests in the Suez Canal. Revolutionary Arab nationalist leader Gamal Abdel Nasser (d. 1970) conducted extensive land reform, breaking up the huge Central America-style haciendas and creating a rural middle class. Leonard Binder argued in the late 1960s that that rural middle class was the backbone of the regime. Abdul Nasser's state-led industrialization also created a new class of urban contractors who benefited from the building works commissioned by the government.
This was the social democratic foundations of the modern Egyptian state's legitimacy. And just as the Democratic Party in America is living off of its social democratic past, so, too, the Egyptian regime, which has abandoned that past with even more abandon:
From 1970, Anwar El Sadat took Egyptian in a new direction, opening up the economy and openly siding with the new multi-millionaire contracting class. It in turn was eager for European and American investment. Tired of the fruitless Arab-Israeli wars, the Egyptian public was largely supportive of Sadat's 1978 peace deal with Israel, which ended the cycle of wars with that country and opened the way for the building up of the Egyptian tourist industy and Western investment in it, as well as American and European aid. Egypt was moving to the Right.
But whereas Abdel Nasser's socialist policies had led to a doubling of the average real wage in Egypt 1960-1970, from 1970 to 2000 there was no real development in the country. Part of the problem was demographic. If the population grows 3 percent a year and the economy grows 3 percent a year, the per capita increase is zero. Since about 1850, Egypt and most other Middle Eastern countries have been having a (mysterious) population boom. The ever-increasing population also increasingly crowded into the cities, which typically offer high wages than rural work does, even in the marginal economy (e.g. selling matches). Nearly half the country now lives in cities, and even many villages have become 'suburbs' of vast metropolises.
So the rural middle class, while still important, is no longer such a weighty support for the regime. A successful government would need to have the ever-increasing numbers of city people on its side. But there, the Neoliberal policies pressed on Hosni Mubarak by the US since 1981 were unhelpful. Egyptian cities suffer from high unemployment and relatively high inflation. The urban sector has thrown up a few multi-millionaires, but many laborers fell left behind. The enormous number of high school and college graduates produced by the system can seldom find employment suited to their skills, and many cannot get jobs at all. Urban Egypt has rich and poor but only a small "middle class." The state carefully tries to control labor unions, who could seldom act independently.
The state was thus increasingly seen to be a state for the few. Its old base in the rural middle classes was rapidly declining as young people moved to the cities. It was doing little for the urban working and middle classes. An ostentatious state business class emerged, deeply dependent on government contracts and state good will, and meeting in the fancy tourist hotels. But the masses of high school and college graduates reduced to driving taxis or selling rugs (if they could even get those gigs) were not benefiting from the on-paper growth rates of the past decade.
From the CEPR paper, here is how economic development has stagnated worldwide under neoliberal policies:
The developing world is full of Egypts, ready to explode.
Listening to Mubarak's speech, followed by Obama's yesterday, you might almost think we are coming close to a peaceful resolution in Egypt--and I sincerely hope that we are. But at the same time, there are ominous signs that something very different may be afoot, as explained by Rachel Maddow & her guest, Democracy Now! senior producer Sharif Abdel Kouddous, discussing signs that Mubarak is trying to cast the demonstrators as lawless thugs, even while he continues to release his own gangs of genuinely lawless thugs to try to cause havoc. These are not the actions of a man looking for reconciliation, much less a graceful and dignified exit. They are the actions of a cornered wild beast. They represent Mubarak's Sarah Palinification. Except that he actually makes her seem popular by comparison.
Here's the transcript of how the following clip begins:
Translator: duties to protect and save the citizens in absolute dignity and honor, rights freedoms and dignity. i also call demand and controlled powers to immediately take the necessary procedures to continue to identify and arrest those who perpetrated the security mayhem and the chaos egypt has seen, looters, arsonists and those who intimidated the unsuspected citizens.
Maddow: Mr. Mubarak calling protesters a mob of criminals. That's what the media has been doing as well. It's to turn people away from the protests, thereby making them pine for the iron fist, As wielded by old Uncle Hosni. It's one thing to play for propaganda purposes. It's another thing altogether to ferment the violence yourself to blame it on the protesters.
Indeed:
This turn of events can hardly be considered surprosing. For over 30 years we've pretended that there's no contradiction--either in Egypt or anywhere else in the Arab world world--between our pretense of standing for democracy, modernity and civilization on the one hand, and the brute reality of our support for all manner of dictatorial regimes. We've pretended as well that there can be a stable peace in the region based on this sort of deeply hypocritical and oppressive arrangement, rather than on a fair and equitable regional peace treaty supported by the vast majority of the people in the region.
Sooner or later, the clever hopes expire, as Auden put it. That time has now come for us in the Middle East. And there is no sign that we are the least bit prepared for it. The Egyptian people may be facing a difficult test in the days and weeks ahead. But they've shown remarkable courage, steadfastness, solidarity and resolve. We, on the other hand, have a leadership class of vipers representing us.
It's not just Mubarak whose dark underbelly is starting to show.
[Update 9:24 AM EST]: Threatened confrintation from government thugs is growing increasingly more serious, according to Sharif Abdel Kouddous. From his Twitter feed at Democracy Now!:
sharifkouddous This is getting more and more heated. No real violence yet but things are very tense 38 minutes ago · reply 1 new tweet
sharifkouddous I am in Tahrir. Pro Mubarak protesters have been allowed to enter. The two crowds are facing off against each other. Much shouting and p ... 44 minutes ago · reply more than 1 new tweet
In my previous diary, "Still being overlooked: The GOP housing con", I quoted at length from a July 2007 post by historian Rick Perlstein, "The Foreclosing of America (Part 1)", in which he described some of the motivations and plans the Republicans had to boost home ownership in order to build a political majority. This was the thinking behind their actions that helped bring about the financial collapse.
But already when he was writing that post, the plan was coming apart at the seams. He wrote three more parts to his series, and the last one, "The Foreclosing of America (4): Vicious And Virtuous Circles" first recalled how Democrats handled the last such foreclosure crisis, which took place during the Great Depression. This Perlstein cited as a "virtuous circle", he then summarized what the Republicans had done to try to juice homeownership on the cheap--and the subsequent collapse (which the mainstream national media was still ignoring)--as well as what would come next, an example of a "vicious circle". And he concluded by explaining what Democrats could do instead--another "virtuous circle." Of course that's not happened. Democrats ignored the obvious strength of repeating their past success. But it didn't have to be. Here's how he explained it. First, the original virtuous circle, begun by FDR, which built the greatest middle class the world have ever seen:
America's last great foreclosure crisis, of course, was the Great Depression. 273,000 home mortgages were foreclosed in 1932, four times the normal rate, and the rate doubled again early in 1933. Writes Roosevelt biographer Jean Edward Smith, "House price plummeted, and the entire real estate market was threatened with collapse."
George W. Bush, of course, has nothing to say about the conditions today that are moving us in that direction-that would bust his Ownership Society mojo. Franklin Delano Roosevelt, on the other hand, enjoyed greater moral clarity. He immediately got through legislation establishing a Home Owners' Loan Corporation. One thing it did was provide federal money for repairs-something municipalities (remember the mayor of Shaker Heights sending out town workers to board up windows and whack down overgrown lawns) now have to do on their own. Those unfortunates who live in more cash-strapped municipalities have to watch their foreclosed neighbors' former properties rot, even as, simultaneously, the value of their own properties decline for the haunted houses in their midst.
That is why FDR said protecting homeowners from "inequitable enforced liquidation at a time of general distress is a proper concern of the government." The situation, now as then, cried out for collective action coordinated by government, because it is a collective problem-protecting home values: a virtuous circle, helping everyone.
The HOLC also refinanced mortgages, mandating unprecedentedly low interest rates, and also unprecedentedly long repayment schedules. That set into motion a policy cascade that soon far transcended merely the needs of those in financial hardship and spread to the entire middle class-indeed, helped build the middle class.
The Federal Housing Administration was established in 1934 to insure mortgages, mandated at favorable terms; in 1938 the Federal National Mortgage Association (Fannie Mae) was established to create a secondary market for mortgage-a radically different secondary market than the one created by Wall Street investment banks in the 1990s because it served both the interests of creditors (by freeing up liquidity for loans) and borrowers (because their creditors required less liquidity from them upfront in order to ensure a profit). Then, following World War II, the Veterans Administration offered even more favorable terms for the men who had just defeated fascism.
Previous to this decades-long process, the typical mortgage required a down payment of half the home's value and came due in 10 years; after, a mortgage involved a down payment of 10 percent, was financed at 4 percent spread out over 30 years-and mortgage payments were tax deductible. The homeownership rate was 40 percent before the war; by 1965, it was almost 65 percent. The salubrious housing policy environment had helped boost consumer spending; the upshot was the greatest sustained economic boom in the history of mankind, and the largest middle class the world has ever known.
The American Dream was largely an invention of enlightened government. A virtuous circle, helping everyone.
In contrast, Republicans under George Bush offered only a pittance of actual help:
I've written before about the GOP's politicization of the Financial Crisis Inquiry Commission, most recently just yesterday in "As above, so below" where I touched on Darryl Issa's threatened investigation of the committee. I've talked before about some of the actual causes of the financial crises, all the way down to the failures of modern economic theory to have a sound foundation for understanding what they're getting themselves into. But I've paid far too little attention to something much more petty and mundane: The GOP's own role in actively creating the crisis, not just to support its get-rich-quick friends in the financial industry, but to build it's own political brand.
As is so often the case, Republican attempts to pin the blame on Democrats are a projection of their own guilty consciences. But in this case, it's such a doozy that most of us just can't seem to get our minds around it--even though no one less than historian Rick Perlstein put his finger on it all the way back in July 2007, as the bubble was already starting to burst, in "The Foreclosing of America (Part 1)". Here's what he had to say about the blatantly open political strategy the GOP had to use increased homeownership to build their ever-elusive "permanent Republican majority":
First, a demonstration of the sheer size of the political bet the Republicans placed on exhorting as many Americans as possible to own their own homes. Exhibit A: the March, 2005 special issue on the "Ownership Society" of the magazine of the American Enterprise Institute, one of the conservative movement's flagship think tanks. There are, American Enterprise lead author James Glassman wrote, three aims of Bush's dreamed-of Ownership Society: to "reform" Social Security, to "boost the economy by cutting taxes on dividends," and "to make home buying easier."
As we've said before, there's really no such thing as a conservative think tank. They only have propaganda and political strategy shops. Why did conservatives want every American to have, instead of a car in every garage and a chicken in every pot - or, say, health insurance for every child - a monthly mortgage bill in every mailbox? Reading American Enterprise, Not for reasons of national well-being. It was for the Republican's political well-being.
Here's Grover Norquist:
"Bush's vision also calls for efforts to increase home ownership. Here's a hint of what that could mean: in House Speaker Dennis Haster's Congressional district in Illinois, 75-80 percent of voters own their own homes. In Democratic minority leader Nancy Pelosi's district in San Francisco, the number is 35 percent.... A transition of great political importance is under way. Fifty years from now the move to an Ownership Society will be recognized as a change to America's political landscape as dramatic as the move from farms to factories."
"Bush wants more ownership because he wants to change the shape of America. He understands that people who own stocks and real estate--who possess wealth of their own--have a deeper commitment to their community, a more profound sense of family obligation and personal responsibility, a stronger identification with the national fortunes, and a personal interest in our capitalist economy. (They also have a greater propensity to vote Republican.)...
The only author to raise any sort of caveat - that home prices are skyrocketing out of control - is the neoconservative geographer Joel Kotkin. He blamed, you guessed it, liberals: "Environmental regulations and other growth-constraining factors have inflated housing prices."
As we'll see in the next post, that's absurd. But beyond that, it's rhapsodies all the way around - and especially homeownership's bounties for Republican electoral fortunes: "The places with the higehst levels of homeownership generally vote Republican.... "Our analysis shows that this connection between homeownership and voting Republican holds broadly at every level--from large regions all the way down to metro areas....more and more of the places offering new homes to young families following their dreams are in the heart of Red America." Not wanting to own your own home is revealed as downright European; Kotkin singles out Prague's homeownership rate at "about 12 percent." No Republicans there! He concludes by calling cities like Fresno, Orlando, Dallas, Houston, Phoenix, Las Vegas, and Atlanta "Our New Cities of Aspiration"--"the de facto headquarters of the American dream."
Needless to say, those "New Cities of Aspiration" became some of the most devastated places in America as the whole con unravelled. The GOP has far more to answer for than just ideological blindness in enabling this catastrophe. As Perlstein shows, there was a deliberate political plot. And it's on us if we don't do our damnedest to push this hidden history into the the spotlight as Republicans attempt once again to push all the blame onto Democrats, liberals and people of color.
A Florida federal district court judge went far beyond judicial activism on Monday, all the way into the realm of lawlessness characterized by infamous decisions such as Dred Scott, Bush v. Gore and Citizens United, when he struck down last year's healthcare reform law as unconstitional. While a judge may fairly be characterized as "activist" when they overturn existing precedent, a judge strays into lawlessness when they assume jurisdiction in violation of existing rules or pinciples and/or when they simply ignore precedent, rather than providing arguments for why it should be overturned. Judge Roger Vinson acted lawlessly on both counts. As a finder fact--which all trial court judges as--it was beyond his jurisdiction to even consider overturning existing precedent, which he happily did apparently without even noticing. He also threw out the entire law, rather than just the part he found unconstitutional--using language virtually identical to that in Bush v. Gore in one of its most infamous passages. TPM has the basic story, beginning thus:
Florida Judge Voids Entire Health Care Law
Brian Beutler | January 31, 2011, 3:00PM
A federal district court judge in Florida ruled today that a key provision in the new health care law is unconstitutional, and that the entire law must be voided.
Roger Vinson, a Ronald Reagan appointee, agreed with the 26 state-government plaintiffs that Congress exceeded its authority by passing a law penalizing individuals who do not have health insurance.
"I must reluctantly conclude that Congress exceeded the bounds of its authority in passing the Act with the individual mandate," Vinson writes. "Because the individual mandate is unconstitutional and not severable, the entire Act must be declared void."
[Emphasis added]...
By determining the entire law must be wiped out, Vinson went farther than a different Republican-appointed judge in Virginia who declared the mandate unconstitutional late last year. The Obama administration has appealed the Virginia ruling, and is expected to appeal this one.
Vinson declined to enjoin the law, however, and that means implementation in the 26 states will continue pending higher-court rulings.
Al Jazeera is reporting estimates that more than two million are in and around Tahrir Square. The square itself can hold about two million people, and there many more on side steets unable to enter. On Democracy Now! this morning, producer Sharif Abdel Kouddous, a Cairo native who has returned to cover the demonstrations on the ground, reported that there was "An ocean of people". See for yourself:
It's now more than two hours into curfew, but much earlier Koudous tweeted:
sharifkouddous Wow. It's 10am and already more people in Tahrir than I have ever seen. And there's more flooding in #Egypt
This outpouring of people makes it clear that the movement to oust Mubarak, far from losing steam, is only growing stronger and stronger. Of course it's impossible for millions of people to demonstrate day after day, so a strategy is emerging to keep a continuous presence in Tahrir Square at all times, and to bring massive demonstrations at regular intervals. The next natural time for another such demonstration will be after Friday prayers.
Packed shoulder to shoulder in and around the famed Tahrir Square, the mass of people on Tuesday held aloft posters denouncing the president, and chanted slogans "Go Mubarak Go" and "Leave! Leave! Leave!"
Similar massive demonstrations calling on Mubarak to step down are also being witnessed across other cities, including Sinai, Alexandria, Suez, Mansoura, Damnhour, Arish, Tanta, el-Mahalla and el-Kubra.
Tens of thousands were reportedly marching in Alexandria while the number of those protesting in Sinai was estimated to be around 250,000.
Tuesday's protests were by far the biggest since street demonstrations broke out against Mubarak's rule last week.
"The crowd is very diverse - young, old, religious, men, women - and growing by the minute," Al Jazeera's online producer said from Tahrir Square.
"They're chanting the same slogans they've been chanting all week. Someone actually hung an effigy of Mubarak from a streetlight."
Organisers had called for a march by a million people on the day, but the turnout surpassed all expectations.
Soldiers deployed at the square did nothing to stop the crowds from entering.
They have formed a human chain around protesters, and are checking people for weapons as they enter. Tanks have been positioned near the square, and officers have been checking identity papers.
According to reports, the military police have placed barbed wire around Mubarak's residence in Masr el-Gedidah, a suburb east of Cairo.
As we approach the centenial of Reagan's birth, conservatives are whipping up the country into a frenzy of addled adulation. It's time for a bit of a reality check. Yesterday, in my diary, "History repeating itself ", I briefly touched on the fact that the fall of the Soviet Union--which he is widely credited for--was not only a surprise to Reagan's CIA, it was arguably delayed by his war-like posture strengthening Soviet hardliners, which in turn was premised on the baseless neocon fantasy that the Soviets were militarily superior to us when Reagan took office. That's an area in which there are some very clear-cut facts and some things that are more debatable.
But when it comes to Reagan's economic legacy, the record is crystal clear: Before Reagan, we were on a path on reducing our debt-to-GDP ratio, the most fundamental measure of national fiscal responsibility. With him, we began using irresponsible increases in the debt-to-GDP ratio to produce extremely skewed economic growth targeted narrowly toward the very top of the income ladder. The so-called "Reagan miracle" is a complete and utter myth, as one can see from these simple comparisons of basic economic growth statistics. As one can readily see, the 1970s were a troubled decade compared to the 1960s, but we still managed to keep reducting our debt-to-GDP ratio. Then Reagan came along, and gave us a junk-food "cure" that was only marginally better in terms of GDP growth and income growth for the bottom 99%, was actually worse in terms of job creation, and showered the top 1% with wealth--at the very time that their taxes were being slashed as never before:
Reagan's policies--modified slightly under Clinton, and put on steroids under GW Bush--are the root cause of the economic distress we are experiencing today. And the newsletter Too Much has the goods on the root of Reagan's selfishness that helped lead our nation astray economically:
The Tax that Turned Ronald Reagan Right
With the centennial of our 40th President's birth fast approaching, how about a shout-out for the soak-the-rich tax rates that he so despised - and more civic-minded Hollywood stars so enthusiastically embraced.
Did Ronald Reagan change history? Well, we all change history in our own way. The more interesting question: What changed Ronald Reagan?
What changed the labor advocate - with enough street cred to get elected president of Hollywood's actors union - into a labor basher extraordinaire? What turned Reagan the standard-issue New Deal Democrat into the 20th century's premiere pusher for almost entirely unrestrained "free enterprise"?
The answer? According to Reagan himself, the federal income tax - specifically the over 90 percent top rate on top-bracket income that went into effect during World War II - changed Ronald Reagan. That tax levy absolutely incensed the amiable actor.
At his Hollywood height, actor Ronnie Reagan was making $400,000 per picture. With the top federal tax rate over 90 percent, Reagan used to tell his White House chief of staff Donald Regan, he always chose to "loaf" around rather than make more than two pictures a year.
"Why should I have done a third picture, even if it was Gone with the Wind?" Regan remembers Reagan asking. "What good would it have done me?"
Actually, instead of griping about his tax bill, the World War II-era Ronnie Reagan should have been counting his lucky tax stars. Things could have turned out much worse for Reagan - and the rest of America's high-income set - if Congress had let President Franklin D. Roosevelt have his way.
In April 1942, just a few months after Pearl Harbor, Roosevelt asked Congress to enact a 100 percent top federal income tax rate, in effect a "maximum wage." No individual, FDR told lawmakers, should be taking home, after taxes, over $25,000 - the equivalent of about $335,000 today.
FDR's call for a $25,000 personal income limit struck millions of patriotic Americans as right on the mark. A Gallup poll, in late 1942, found 47 percent of Americans supporting the notion of an income limit and only 38 percent in opposition. And the supporters of FDR's $25,000 cap even included some of Ronnie Reagan's fellow Hollywood stars.
"I regret," the widely admired Ann Sheridan told reporters, "that I have only one salary to give for my country." ....
Purchases made 15 days after Tucson massacre, just over 100 miles away at "Crossroads of the West" gun show
In its frontline rhetoric, the NRA claims that "guns don't kill people, people do," and that the solution to gun violence is not new laws or gun control for "law abiding citizens", but control of criminals and enforcement of existing laws. These are the talking points the NRA hits over and over again, and promulgates to its membership to repeat on que.
New York City Investigates Arizona Gun Show
By MARC LACEY
Published: January 30, 2011
PHOENIX - Weeks after a shooting left six dead and 13 injured in Tucson, New York City sent undercover investigators to an Arizona gun show and found instances in which private sellers sold semiautomatic pistols even after buyers said they probably could not pass background checks, city officials said.
The investigation, part of an effort by Mayor Michael R. Bloomberg's administration to crack down on illegal gun sales nationwide, took place Jan. 23 at the Crossroads of the West Gun Show in Phoenix, officials said.
As the story went on to explain, such sales are technically illegal, but the law simply isn't being enforced:
Private, unlicensed sellers are not required to run federal background checks, but it is a violation of federal law to sell guns to people if sellers suspect they are felons or mentally ill or are otherwise prohibited from buying. In the case of Jared L. Loughner, who is accused of opening fire on the crowd in Tucson on Jan. 8, the gun used in the shootings was bought at a licensed gun dealer, and he passed a background check, the authorities said.
In two instances, the New York undercover officers specifically said before buying a gun, "I probably couldn't pass a background check," but were still sold guns, city officials said.
In a third case, an investigator bought a Glock pistol and two high-capacity magazines like the ones used in the Tucson shooting. Such purchases were made without any background check but were perfectly legal.
In covering this story, Chris Brown on the politicalcorrection blog "Can't Pass A Background Check To Buy Guns? No Problem" included the following two videos of investigators' purchases. The first is one of the first two cases mentioned:
A partial transcript of the above, from the Times (emphasis added):
Investigator: "So, you're not one of those, you know, dealer guys, right?"
Seller: "No. No tax, no form, you don't have to do transfers or nothing."
Investigator: "Yeah, yeah."
Seller: "Just see an Arizona ID and that's it with me."
Investigator: "So no background check?"
Seller: "No."
Investigator: "That's good, because I probably couldn't pass one, you know what I mean?"
The seller sold the gun for $500.
The second video is the third case mentioned in the Times story:
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