Capitalism Offers No Guarantee of a Middle Class

Reuters global editor at large Chrystia Freeland wrote in a 2011 column, Capitalism is Failing the Middle Class, what many of us have been complaining about for years, but what may finally be sinking in to skulls of the policy wonks that have influence with the movers and shakers of global capitalism. She sited two studies, one written by Michael Spence, published by the Council on Foreign Relations, and the other David Auter, published by the Brookings Institution. Both papers warn of the long term national consequences of lower wages and fewer job opportunities caused by shipping jobs overseas. From Chrystia Freeland:

Globalization and the technology revolution are increasing productivity and prosperity. But those rewards are unevenly shared – they are going to the people at the top in the United States, and enriching emerging economies over all. But the American middle class is losing out.

To Americans in the middle, it may seem surprising that it takes a Nobel laureate and sheaves of economic data to reach this unremarkable conclusion. But the analysis and its impeccable provenance matter, because this basic truth about how the world economy is working today is being ignored by most of the politicians in the United States and denied by many of its leading business people.

It’s becoming increasingly clear that capitalism by itself is no guarantee of the kind of large, prosperous middle class that used to define Americans as a land of opportunity. Businesses in this world can find poor grunts to work long days under terrible conditions for enough food to keep from starving. Businesses should remember that working customers will spend more if they're paid more.

Do people work for the economy or does the economy work for people?

The middle class was brought to us by those who fought for a combination of government policies and labor contracts: compulsory education and the schools that needed to be built, the Land Grant College Act, child labor laws, the minimum wage, workers compensation, social security, unemployment benefits, Medicare, Occupational Safety and Health Administration (OSHA), the eight-hour day, weekends, collective bargaining, anti-discrimination laws that were all passed despite fierce opposition from conservatives and corporations.

And they’re still at it.

Beirut to Benghazi: Scarborough's Selective Memory

Before going off to work in the morning, I often watch Morning Joe, hosted by Joe Scarborough. Joe, a former Republican congressman from Florida, is cool. He plays guitar and had a band when he was younger, he taught high school for awhile, he's got some wit and spontaneity. He can "dance."

The best part about his show is, although Joe's a conservative, he brings in guests with other points of view, including some left-of-center voices such as Eugene Robinson and Howard Dean. The show "airs" on MSNBC from 6-9AM weekdays.

Last Friday (24 January 2014) Joe and his guests were discussing President Obama's apparent unwillingness or inability to go out schmoozing with other politicians in the Washington social scene. Joe seemed quite convinced this was the problem with Obama. If he could just go out after work and yuck it up with conservative senators and representatives, he could get a lot more of his agenda passed.

His guests pushed back: it won't work, there's more partisanship, positions have hardened, compromise is a "dirty word," times have changed, it's a different world.

This is not an exact quote but Joe's response was something like "No, No! It's not a different world!....It was just as bad back when I was in!"  He was a bit loud and his guests didn't interrupt as he made his impassioned plea.

I wish Joe would have used some examples, instead of just his passion, to convince us that the political discourse is no more partisan now, than it was in, say, 1983. He could have compared Benghazi with Beirut. I wish he could have described how Democrat presidential hopefuls leaped at the opportunity to blame President Reagan for not preventing the bombing of the Marine barracks that killed 241 Americans. But, he couldn't. Because none did.

Reagan had been warned ahead of time of the vulnerability of the Marines' situation. His Secretary of Defense, Weinberger, said this:

"They had no mission but to sit at the airport, which is just like sitting in a bull's-eye," Weinberger said. "I begged the president at least to pull them back and put them back on their transports as a more defensible position."

Joe might have described how  Congressional investigations were launched by Democrats to get to the bottom of the Marine barracks attacks, just like Republicans held committee hearings on Benghazi.  But he couldn't. Because there weren't any.

Reagan appointed a military commission to investigate the bombing and the final report blamed a faceless "military chain of command."  Reagan, the "Teflon" president, was home free.

Contrast that with the Senate  and House investigations of the Benghazi attack, an issue Scarborough and other Republicans continue to raise with the hope of discrediting Obama and Hillary Clinton, or countering any alleged wrongdoing by Republicans. 

Back to the "Obama's not a schmoozer, therefore he's not a successful President" criticism. Seems to me, what Joe is really saying is,  Republicans don't read, they need their vanities stroked, are impervious to reason, and only got into politics with hopes of going to Washington to party in the White House.

Guess we can't expect them to remember much.

Further reading from Pew Research:
Partisan Polarization Surges in Bush, Obama Years

Ben Stein: Anti-Science Extremist with Mainstream Credentials

The problem with Ben Stein is that he is too likable. Too cute. He's smart, he's funny. Ben is the son of Herbert Stein, a top economic advisor to Nixon. He's undoubtedly a well connected and influential voice in American politics and popular culture. He's a prominent Republican. He's a "player." And, he's fun. Who could resist his Hollywood roll as the boring economics school teacher in Ferris Beuller's Day Off ?

Actor, game show host (Win Ben Stein's Money), movie maker, Nixon and Ford speech writer, lawyer, economist, degrees from Columbia University and Harvard Law, he's politics-made-for-TV entertainment's equivalent of Ironman. He can do it all.

Ben Stein (right), in tennies. Photo by Alex Mazerov, Wikimedia Commons.

Stein writes a regular column for the American Spectator, published by the right-wing 501(c)(3) American Spectator Foundation, which apparently holds that tax-deductible status by offering internships to young journalists. He's also a frequent guest on CNBC's Kudlow Report. It seems safe to say Ben Stein is not associated with the far right likes of Quran-burning Pastor Terry Jones. Stein's a mainstream elite guy - who says scientists are murderers.

In 2008, while promoting his anti-evolution movie Expelled: No Intelligence Allowed, Stein gave an interview to Trinity Broadcasting Network, where Stein's remarks were so off-the-wall, that even the conservative journal National Review couldn't tolerate them.

From the transcript, as reported by John Derbyshire in the National Review:

Stein: When we just saw that man, I think it was Mr. Myers [i.e. biologist P.Z. Myers], talking about how great scientists were, I was thinking to myself the last time any of my relatives saw scientists telling them what to do they were telling them to go to the showers to get gassed … that was horrifying beyond words, and that’s where science — in my opinion, this is just an opinion — that’s where science leads you.

Crouch: That’s right.

Stein: …Love of God and compassion and empathy leads you to a very glorious place, and science leads you to killing people.

Crouch: Good word, good word.


With the general election approaching, the Republicans are busily portraying themselves as moderates. Is such an extreme view of science a "reasonable centrist" position? If given more power in Washington, would Republicans be champions of the advancement of science and technology with the goal of inventing and manufacturing products that advance the arc of civilization? It's seems pretty hard to do that if you've decided "science leads you to killing people."

Scientific American has responded to Ben Stein, particularly his movie, in the following related articles.

Expelled: No Intelligence Allowed--Scientific American's Take

Six Things Ben Stein Doesn't Want You to Know

Expelled: No Intelligence Allowed--Ben Stein Launches a Science-free Attack on Darwin

Why We're in Lybia: Remembering Pan Am Flight 103

Garden of Remembrance, Dryfesdale, Scotland. Photo by Chris Newman, Creative Commons.

Ambassador Chris Stevens never forgot the victims of Pan Am Flight 103. Neither should we.

Nearly twenty-four years ago, on December 21, 1988, a bomb exploded on Pan Am Flight 103, Killing 270 people, including 35 Syracuse University Students returning from a semester abroad. Those students left the relative safety of up-state New York to learn about a less-familiar part of the world.  They, and their friends and families, paid a terrible price for broadmindedness.

Only one individual, former Libyan agent Abdel Baset al-Megrahi, was convicted of the crime in 2001. It seems absurd to think Megrahi acted alone. A former Lybian justice minister claims Gadaffi personally ordered the bombing of the flight.

Having served less than nine-years, Megrahi was released from a Scottish prison in 2009, ostensibly for humanitarian reasons. Magrahi was diagnosed with prostate cancer. When Megrahi returned to Lybia he was met by Gadaffi and a "hero's welcome."

However, it's also been reported that Magrahi was released early to clear the way for a $30 billion oil deal between BP and Gadaffi's government.

Following a U.S. backed effort to support Lybian rebels fighting to topple Gadaffi , an effort accomplished with zero American casualties or American troops on the ground, the dictator was killed in October, 2011. Since then, after 42 years of dictatorship, Lybia struggles to form a stable national government.

Earlier this year Ambassador Chris Stevens invited the Victims of Pan Am Flight 103 to a telephone conference. Here are excerpts reported from that meeting (emphasis added):

"Amb. Stevens noted that right now, Libya is often chaotic, but it is his belief that the Libyan people are hopeful for democracy. He explained that Libya is structured around tribal affiliations and there are also regional divisions, but if there is a homogeneous desire, it is for democracy. He expressed his optimism for the Libyan people and nation...(he indicated) there are steps we can take...the FBI to continue to pursue information about PA103 and to assist the Libyan government to find that information; and the status of Megrahi, Senussi and Moussa Koussa.

"When asked what his priorities will be when he arrives in Libya, Amb. Stevens stated that he wants to help ensure that there is a stable democracy and to find justice in the Pan Am 103 case."
 

Chris Stevens was a friend to the Lybian people. He believed in democracy and justice. He believed most Lybians did, too. He dedicated his life working for those goals, it turns out, at great personal risk. At the American consulate in Lybia, the heavily-armed terrorists found a soft target. They'll find others, as they've done in the past.

We remember the victims and honor the living and fallen brave ones who've risked their lives for justice and freedom.  And we keep after the bastards who would harm innocents and have us live in fear.

Let's keep the real target in focus. Let's focus on the terrorists and not those who've done a good job keeping Americans safe.
.............................................................................................................................................................

Related material: A timeline of events related to the Pan Am Flight 103 bombing.
Photo credit: Chris Newman through Creative Commons.

Tax Cuts and a Pipeline: The Kudlow-Romney Economic Plan

"Conservative" political/financial pundit Larry Kudlow (he's really a Keynesian) came out yesterday with this article,  The Jobs Report Bad News. He makes some valid points based on data but offers some not-so-conservative advice to improve the nation's economy. He also claims that it is Romney's plan. Here it is:

"My modest proposal for the worst economic recovery in modern times is threefold: Extend all the Bush tax cuts, slash the corporate tax rate, and approve and begin building the Keystone Pipeline. This is a supply-side proposal. It's completely unlike all of Obama's goofy, short-term, spending-and-tax-credit stimuli, which have completely failed."

Let's consider them one at a time:

1. Extending all of the Bush Tax Cuts would mean mounting raise the deficit by $3 trillion over ten years.  It's well understood that fiscal soundness of government policy is an important factor investors consider before expanding operations and hiring more workers. The fiscal problems of Greece, Italy, Portugal, and Spain are having a negative effects on the global economy. Kudlow proposes no tax cuts in his article. More red ink here in the U.S. would make things even worse. 

2. Slashing the corporate tax rate would further reduce government revenue at a time of record high corporate profits at a time when we need to pay down the deficit.

Let's not forget how the U.S. government got into the current fiscal hole: two big Bush tax cuts, the Iraq War, and Medicare Part D Prescription Drug Program - and none of it paid for. All of those items were put on the national credit card.

Larry Kudlow wants to keep running up the balance. Again, he doesn't propose any cuts in spending.

3. This one's a "red herring" issue. The Keystone Pipeline has been made into a political football by the Republicans. In a budget deal, the Republican-led House imposed a time limit on the Obama Administration to approve an international pipeline (Keystone) running from Canada to the Gulf of Mexico. This is a big, complicated project with economic, environmental, and societal impacts. Obama told the House they would not be able to approve it by their deadline. The Republicans now use the "delay" to blame the president for bad energy policy.

The fact is, the southern leg of the Keystone XL Pipeline has already been approved and is slated to begin construction. The rest of it will be likely be approved and built after the final route is determined. Obama and Kudlow apparently agree on this one - just not on the timing and the need for a thorough alternatives analysis.

Government procurement spending, that is, contracts between the government (taxpayers) and private corporations (ref) soared under the Bush Administration. Kudlow isn't calling for cuts in procurements. Sounds like he wants government financial support to corporations to continue.

Footnote: One-third of the "goofy" Obama stimulus consisted of tax cuts.

When Potential Rewards Overwhelm Risk

An interesting blog post over at the venerable site inanis et vacua (possibly the blog of writer Jim Harrison) asserts that the problem with capitalism is it is too rewarding. An excerpt:

"We know that people will lie, cheat, and steal for relatively small payoffs. What do you suppose they’ll do if they can make $345 million a year doing it?...

The opportunity to get ahead can certainly make people work harder and sometimes smarter, which is very often a good thing. Increasing the potential rewards without limit, however, simply means that other motives and considerations will be overwhelmed. Offer me enough and I’ll not only ignore my obligations to my fellow man, I’ll feel that I ought to ignore them."

It's an interesting theory.

Ben Stein's Useless Criticism of Obama's Handling of Europe's Finances

In this article in the American Spectator, vacationing economic pundit and former Nixon speechwriter Ben Stein does a masterful job of playing the reader like a small mouth bass at the end of a fly line. Setting himself up as an all-round good guy: nature lover, breakfast-making husband, friend of gentiles, hater of Nazis and racism, Ben makes point after unassailable point. Who can argue with him? 

Then, at the very end of  the article, fresh off the images of "life better than anyone deserves" and war-ravaged Europe, "Uncle Ben" uses Eurozone financial problems to make an absurd attack on President Obama:

"But out at Hope, and in Sandpoint tonight, life is better than anyone deserves. And the Vissers are better than I deserve.

Still, I went to sleep with foreboding. Europe is falling apart. Mr. Obama is doing nothing, zero, about it. NOTHING. A cratered Europe will have immense effects on the world economy. Europe's economy, in toto, is larger than ours. Is Mr. Obama thinking of a rescue plan? Is he thinking about it at all? Does he even care if we go into another leg of recession as demand for U.S. exports to Europe corrects? What is he doing? Did he resign? Where is Mr. Geithner on this? Have we ever had a President without an international economic policy before? No. Never mind. Just go to sleep."

"Foreboding," "cratered Europe," "rescue," "recession" - more than enough to ruin a vacation that's "better than any of us deserve." My God, it's devastation time again. That's powerful writing, Ben.

I wonder what Ben Stein would say about Great Britain's David Cameron, or Germany's Angela Merkel coming over to the United States with a "rescue plan," telling us how to run the US economy - or how to overhaul our health care system.

What does Ben Stein think President Obama should do to fix Europe's economic problems?

By the way, many northern European nations such as Norway, Sweden, Denmark, Finland, Netherlands, Germany, Poland, and others are doing pretty well. Right-wing pundits like to paint the entire European continent as a financial basket case, when, in fact, the main problems are found in Greece, Spain, Portugal, and Italy.

Is it really true, as Ben Stein says, that the Obama Administration is doing NOTHING about the European financial mess?  Ben is not just implying that Obama is doing NOTHING with respect to Europe, or that he's not doing enough, he flat out says Obama is doing nothing. How does he know?

Does Ben Stein spend all his time at the White House shadowing President Obama's every move?

Pretty hard to do from that cabin by the lake.