Category Archives: Republicans

Myths Exposed: President Obama is Responsible for Historic U.S. Federal Debt and Spending Levels

The far right in the U.S. has been desperately trying to convince the electorate that President Obama is spending the U.S. into oblivion and driving up the debt.

Here are the facts…

The Washington Post and Center on Budget and Policy Priorities compiled this chart:

This chart shows the debt directly attributed to President Bush and President Obama. Much of the recent debt came from the Bush tax cuts.

Let’s look into the debt further…

This blog post states the following:

During 20 years of the presidencies of Reagan, Bush I and Bush II, the federal debt as a share of GDP increased by a cumulative 43% of GDP. During the 4 first years of the Obama presidency, it has increased by 36% of GDP.

This is how the Presidents rank in terms of development of the Debt/GDP ratio per year of tenure:

1. Clinton -1% per year
2. Reagan, Bush II: +2% per year
3. Bush I: +3% per year
4. Obama: +9% per year.

This following data comes from this (xls) Office of Management and Budget (OMB) source:

I re-plotted the data since, you could say, I have trust issues on the internet. It is similar to the data in the post.

The following is “The Budget and Economic Outlook: Fiscal Years 2012 to 2022” from the Congressional Budget Office.

What the blog post above did not state is that the historical years since the Bush tax cuts and the recession that started prior to President Obama taking office, have been the major contributors to the rise in spending as a percentage of GDP. Also, the future years the OMB graph shows is a worst case scenario that includes the CBO Alternative Fiscal Scenario which assumes the Bush tax cuts are extended. President Obama did not create the recession, he inherited it. The Bush tax cuts were not enacted into law by President Obama. It is a lie to blame the recession and the Bush tax cuts on President Obama.

Let’s dig down a little more.

This following is historical and projected outlays from The Office and Management Budget by agency. Outlays are the total amount of money spent including authority from prior years that obligates outlays in the current year. The source data from the following charts comes from this (xls) OMB data. The data lines and the legend descriptions are in the same order. My graphics file can be downloaded here (xls). This chart shows that the Federal debt has accumulated from previous years going back to 1962.

OUTLAYS BY AGENCY: 1962–2017

(in millions of dollars)

 

This chart shows that the Federal debt has accumulated from previous years going back to 2000.

OUTLAYS BY AGENCY: 2000–2017

(in millions of dollars)

There is no huge increase in spending starting in 2009 when President Obama was inaugurated. The estimates include the Affordable Care Act. The chart shows that all the major increases in spending started ramping up more quickly in the decade of 2000. The spending is chiefly in the Department of Health and Human Services, Social Security Administration (off-budget), Department of Treasury and the Department of Defense (Military Programs). The Department of Health and Human Services increase comes chiefly from the middle class falling closer towards the federal poverty level as discussed below in more detail. The Social Security Administration increases have to do with baby boomers getting older and rising health care costs. The Treasury Department increases come basically from paying interest on the national debt by financing it with government bonds. The Department of Defense increases have to do with the wars in Iraq and Afghanistan and the costs of gearing up for war. It is interesting to note that the U.S. spends 41% of the world’s total military expenditure. China, the next highest in the world’s total military expenditure, only spends 8.2% (see this).

The baseline scenario in the graph below shows current law and the effect of continuing certain programs that are scheduled to expire.

 

 

If you really want to raise the debt go ahead and repeal the Affordable Care Act according to the Center for Medicare and Medicaid Service (CMS) according to this publication:

 

Mandatory budget items are not optional year to year. It takes an act of Congress to change a mandated budget item. These requirements were made by Republicans and Democrats over the years. President Obama did not create the vast majority of mandatory budget requirements. The Affordable Care Act is mandatory but as already shown will lower the debt unless it is repealed. Discretionary budget items are voted on each year by Congress in 13 appropriations bills. Here is a chart showing mandatory and discretionary spending for 2010:

Mandatory and discretionary budget items are further explained in this:

Discretionary spending is provided in, and controlled by, annual appropriations acts, which fund many of the routine activities commonly associated with such federal government functions as running executive branch agencies, congressional offices and agencies, and international operations of the government.1 Essentially all spending on federal wages and salaries is discretionary.

Discretionary spending is often contrasted with mandatory, or direct, spending. Mandatory spending includes federal spending on entitlement programs, the Supplemental Nutrition Assistance Program (formerly known as the Food Stamps program), and other spending controlled by laws other than appropriation acts.3 Spending levels for mandatory programs are generally controlled by eligibility criteria and size of the eligible population.

 

Mandatory budget items have gone up for some time now as this chart shows:

 

The recession which certainly preceded President Obama has resulted in many more people qualifying for entitlement benefits. President Obama did not change qualification requirements for these programs. As more people fell towards the federal poverty level, more people have received government benefits. This is shown by the Census Bureau and an article in the Wall Street Journal:

 

All of this data supports the conclusion that President Obama has acted very responsibly in view of the economic catastrophe he inherited. The far right is spinning yet another myth.

Links for further reading:

http://blogs.wsj.com/economics/2012/05/26/number-of-the-week-half-of-u-s-lives-in-household-getting-benefits/

http://useconomy.about.com/od/fiscalpolicy/p/Mandatory.htm

http://useconomy.about.com/od/fiscalpolicy/tp/US_Federal_Budget.htm

http://www.whitehouse.gov/omb/budget/historicals/

http://useconomy.about.com/od/healthcarereform/f/Patient-Affordable-Care-Act.htm

http://useconomy.about.com/od/candidatesandtheeconomy/f/Healthcare_Reform_and_Budget.htm

http://super-economy.blogspot.com.au/2011/08/obama-hockey-stick.html

http://super-economy.blogspot.com.au/2011/12/american-federal-debt.html

http://www.cbo.gov/publication/21203

http://www.washingtonpost.com/business/economy/adding-to-the-deficit-bush-vs-obama/2012/01/31/gIQAQ0kFgQ_graphic.html

http://www.cbpp.org/research/index.cfm?fa=topic&id=121

http://www.gao.gov/special.pubs/longterm/pdfs/spring2012_update_slides.pdf

http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/108xx/doc10871/01-26-outlook.pdf

http://www.nytimes.com/packages/html/newsgraphics/2011/0119-budget/index.html

http://www.kaiserhealthnews.org/Stories/2011/February/14/President-Obama-Proposed-HHS-Budget-2012.aspx

http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/health.pdf

http://www.cms.gov/Research-Statistics-Data-and-Systems/Research/ActuarialStudies/downloads/HR3200_2009-10-21.pdf

http://www.cbpp.org/cms/index.cfm?fa=view&id=3450

http://www.cbp.org/documents/120224_CalWORKs_KeyFacts.pdf

http://www.nytimes.com/2012/04/08/us/welfare-limits-left-poor-adrift-as-recession-hit.html?pagewanted=all

http://www.kff.org/medicaid/upload/7985.pdf

http://www.ssa.gov/history/BudgetTreatment.html

http://www.epi.org/publication/bp156/

http://www.socialsecurity.gov/history/InternetMyths.html

http://www.nytimes.com/2009/05/13/us/politics/13health.html

http://www.usgovernmentspending.com/year_spending_2012USbn_13bs1n_3031#usgs302

http://www.globalissues.org/article/75/world-military-spending

Keynes and Austerity

I believe Lorenzo did and excellent job is his essay pointing out the complex fiscal picture in Greece. He does seem to be a bit at odds with Jeff’s comments in his recent post when he writes this:

As Greece is suffering worst, it becomes the focal point of the crisis. But the Greek austerity measures are cutting so deep, some people may end up paying to have a job. As the Melbourne Weekly reports:

Amid deep humiliation and great uncertainty about what it means to be Greek and, more particularly, European, enraged Athenians are lashing out as the weight of five grinding years of recession and the promise of perhaps decades of crippling reform and restructuring crushes the living breath from them.

And the bailout terms are stark:

The conditions insisted upon by Europe and barely delivered on by Athens, include the axing of 150,000 jobs from an 800,000-strong public sector by 2016 and a 22 per cent slice off the minimum wage – in a country in which average wages have dropped 15 per cent since 2009. The retirement age is to be lifted from 58 to 65 and restrictive closed shops that control the professions and services are to be busted.

However, the austere, tight money policy of the European Central Bank (ECB) seems to be the largest factor for the issues in Europe.

I think that the conservative mantra of Keynesian economics is a bit of a red herring. The assumption they impute to Keynes is that he advocated perpetual government spending and debt to stimulate the economy. This is not accurate and a vast oversimplification. I submit these articles as evidence: New York Times, The Concise Encyclopedia of Economics, and AdamSmith.org

I would also like to highlight a quote from this article:

When does the need for deficit spending end?

There’s something else worth pointing out about an analysis that stresses the role of debtors forced into rapid deleveraging. It helps solve a problem Keynes never addressed, namely, when does the need for deficit spending end?

The reason this is relevant is concern about rising public debt. I constantly encounter the argument that our crisis was brought on by too much debt – which is largely my view as well – followed by the insistence that the solution can’t possibly involve even more debt.

Once you think about this argument, however, you realize that it implicitly assumes that debt is debt – that it doesn’t matter who owes the money. Yet that can’t be right; if it were, we wouldn’t have a problem in the first place. After all, the overall level of debt makes no difference to aggregate net worth – one person’s liability is another person’s asset.

It follows that the level of debt matters only if the distribution of net worth matters, if highly indebted players face different constraints from players with low debt. And this means that all debt isn’t created equal – which is why borrowing by some actors now can help cure problems created by excess borrowing by other actors in the past.

Suppose, in particular, that the government can borrow for a while, using the borrowed money to buy useful things like infrastructure. The true social cost of these things will be very low, because the spending will be putting resources that would otherwise be unemployed to work. And government spending will also make it easier for highly indebted players to pay down their debt. If the spending is sufficiently sustained, it can bring the debtors to the point where they’re no longer so severely balance-sheet constrained, and further deficit spending is no longer required to achieve full employment.

Yes, private debt will in part have been replaced by public debt – but the point is that debt will have been shifted away from severely balance-sheet-constrained players, so that the economy’s problems will have been reduced even if the overall level of debt hasn’t fallen.

The bottom line, then, is that the plausible-sounding argument that debt can’t cure debt is just wrong. On the contrary, it can – and the alternative is a prolonged period of economic weakness that actually makes the debt problem harder to resolve.

And it seems to me that thinking explicitly about the role of debt, not just with regard to the usefulness or lack thereof of wage flexibility, but as a key causal factor behind slumps, improves Keynes’s argument. In the long run we are, indeed, all dead, but it’s helpful to have a story about why expansionary fiscal policy need not be maintained forever.

I think it would be more accurate to assert that Keynes was an advocate of stimulus rather than debt, growth rather than austerity. Keynes would prefer the stimulus to come from the private sector but as a witness to the Great Depression he saw that severe austerity leads to severe depression.

From a personal finance point of view austerity makes perfect sense; the less one spends and acquires debt the faster one can quite paying interest and start to save. However, from a macroscopic economic point when the entire economy is austere no one is hiring, the economy is not growing but shutting down. Private debt and public debt increase under severe austerity.

The 5.1 trillion dollars worth of debt attributed directly to Bush as opposed to 983 billion attribute directly to Obama was in large part due to Bush tax cuts and the vast rate of decline of the economy under Bush. When GDP goes down, debt goes up for both the private and the public sector.

One example of this is how the Republican and Democratic decades old food stamp program which was not changed by President Obama went up dramatically due to the Bush recession from the same link just quoted.

Food stamps have been tied to poverty levels for decades. President Obama has nothing to do with the automatic levels that kicked in due to the recession that started in the Bush administration.

Eligibility for food stamps did not change under Obama. More folks qualified for food stamps under the guidelines many Republicans helped to establish. In any case, the food stamp program is clearly an example of how the slowdown in growth of the economy leads to debt.

Republicans have often sided with the idea of government stimulus. Even Bush cut checks during his administration for individuals up to $600 and couples up to $1,200. This is no different of a stimulus that what Obama did with infrastructure. The idea is that the more money that is available and accessible in the economy, the more likely growth will take place. Keynes did not believe in running public debt forever. He thought it was necessary when austerity prevailed on a macroeconomic level since the private sector was incapable of stimulating itself out of its predicament and continued decline would very likely and historically, demonstrably end in severe depression or recession. When the private sector was growing Keynes was conservative and believed in paying down debt contrary to certain popular beliefs about him.

One more point with regard to austerity, the consumer makes up 2/3 of the US economy. Republicans, Bush and chiefly conservative business folks have vigorously advocated consumer spending NOT austerity to stimulate growth. This is clearly evidence that the notion that Keynes had that stimulus, whether public or private, leads to economic growth. When the economy tanks, private debt grows and the economy slows dramatically. Monetary policy has been created to offset and counter the situation and keep it from worsening. You will also find that the idea that inflation increases with public debt is not historically accurate as this article demonstrates:

What anyone who understood Keynes should realize is that as long as output is depressed, there is no reason increased government borrowing need drive rates up; it’s just making use of some of those excess potential savings – and it therefore helps the economy recover. To be sure, sufficiently large government borrowing could use up all the excess savings, and push rates up – but to do that the government borrowing would have to be large enough to restore full employment!

Keynes would be the idiot Republican’s think he is if what they were parroting was accurate of his thought: eternal, increasing debt whether private or public is the death of a vibrant economy but so is eternal austerity. As is almost always the case, the devil is in the details – oversimplification may make for good emotive politics but tends toward perpetuating mistakes of the past and endlessly repeating histories that we once learned from.

Apple: Price Fixing and Collusion

In this essay I discussed how price fixing and collusion occurs regularly in the ‘free market’. Here is another recent example of what I discussed.

Here are some lowlights from the article in the Wall Street Journal:

The U.S. accused Apple Inc. AAPL +0.41%and five of the nation’s largest publishers Wednesday of conspiring to raise e-book prices, in a case that could radically reorder the fast-growing business.

In a civil antitrust lawsuit, the Justice Department alleged that CEOs of the publishing companies met regularly in private dining rooms of upscale Manhattan restaurants to discuss how to respond to steep discounting of their e-books by Amazon.com Inc., AMZN +1.40%a practice they disliked. The executives also called and emailed each other to craft a solution to what one of them called “the wretched $9.99 price point,” the suit said.

The five publishers and Apple hatched an arrangement that lifted the price of many best-selling e-books to $12.99 or $14.99, according to the suit. The publishers then banded together to impose that model on Amazon, the government alleged.

As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles,” said Attorney General Eric Holder.

Three of the publishers settled with the Justice Department, agreeing to let Amazon and other retailers resume discounting of e-books. Settlement of a separate suit filed by 16 states and U.S. territories could lead to tens of millions of dollars in restitution to consumers who bought e-books at the higher prices.

A group of 16 states, led by Connecticut and Texas, filed their own suit Wednesday against Apple, Macmillan, Penguin and Simon & Schuster. The states said they have reached tentative settlement agreements with HarperCollins and Hachette. Those two publishers have agreed in principle to provide more than $51 million in restitution to e-book buyers, Connecticut Attorney General George Jepsen said.

My working conclusion is that this happens much more often than many folks think that it does. I base this on my own anecdotal experience of decades in business and management and on cases already mentioned in which I cited specific examples. It may sound trite and clique but I know from personal experience that these guys at the top have huge, inflated egos and they do work out these types of situations in their country clubs and on their golf courses. The Justice Department only pursues a small percentage of these types of activities.

As per Jeff’s recent comment, pure capitalism or socialism does not exist. I have pointed this out in this essay. To think of them as polar opposites in practice is a bit naïve in my opinion. We are individuals and collectivities and as such incorporate both of these components in our politics and economics.

I have no problem per se with selfishness or self-interest. If selfishness or self-interest is given carte blanche in economics the rich and powerful will always make sure that they stay that way at the expense of those that are not. If capitalism is the unregulated or nominally regulated practice of selfishness then what is the practical difference between it and oligarchy, dictatorship, fascism (statist), communism or any system that rules from the top by the powerful?

If practical capitalism is to have a form of democracy (as in the ideal of competition) then the best real hope for impartial rules on how the game is played can only be made by government. To the degree that the rules allow the process to be more competitive is the same degree that capitalism approximates its ideal. As Jeff points out, to the degree that corporatism (crony capitalism) determine the rules is, in my opinion, one factor in turning capitalism into simply another name for the powerful consolidating their hold on power. I have also pointed out that this happens with or without government involvement.

The idea that the government is solely or primarily the culprit may have emotional appeal to some but as far as I can tell is not factual. In a democracy we get the government we deserve. If we prohibit government from intervening in the market with regulation we are effectively handing the market over to the rich and powerful. As Jeff points out they will try to use the government to protect their power but as I have pointed out they will not stop there. They have many tactics for staying in power (as I previously illustrated) and are not above using them.

Those that would have the government stay out of market regulation are effectively playing into the hands of the rich and powerful and doing exactly what they claim the government is doing in crony capitalism – making it easier for the rich and powerful to maintain their hold on power. To ‘hope’ that competition will reign in unregulated or nominally regulated capitalism appears to me to be more like a religious ideal than a realistic practicality. Government should be in the active business of making competition in capitalism real and effective, offering constraints to the monopolizing tendencies of power. Our job as voters is to elect politicians that produce results toward this end and fire those that make big business the real constituents that they serve. If we put the fox in charge of the hen house we should not be surprised when all the hens get eaten.

The Free Market Ideal

Thank you Jeff for your thoughtful comments…here are some of my observations.

First, I do think we have some agreement on many of your points. Here are some of the differences that I would highlight.

Regulation is not just something that happens in government. Here are some observations from my own experience. At U.S. Robotics one of the engineering groups I managed was responsible for getting regulatory approval not just for the US but for many countries in the world. We called this homologation. In the US we had to get Underwriters Lab (UL) and FCC approvals to sell in the US. We also sold modems into hundreds of other countries and they all had their own similar approval requirements. These requirements were for consumer safety and radio interference issues.

In the 90s Microsoft decided they would implement a hardware certification process. It was practically impossible to sell modems without the Microsoft certification approval. It was also practically impossible to get all our modems every quarter through the huge bureaucracy of Microsoft. They certainly stifled our competitive efforts based on their regulatory approval.

Microsoft has also required a software vendor like myself to pay private regulatory companies a yearly fee which can be very pricey to “digitally sign” our software. They claim this is to keep hackers from infecting software products. However, there are many very good products available for software vendors like ‘obfuscators’ (which I use) that keep hackers out of code. The actual incidents that Microsoft rationalizes its ‘code signing’ process for is statistically very minimal. However, they do get kick backs from their ‘approved’ code signing companies.

Now, with the release of Windows 7, Microsoft has taken another regulatory step by reporting software that does not have a ‘reputation’. This has nothing to do with the code signing. A company may have their code digitally signed and still run into the ‘reputation virus’. Microsoft reports it as a virus. However, if you read what the ‘reputation virus’ is; it only means that Microsoft has never heard of you. Norton and other virus programs take the Microsoft virus alert and automatically delete the downloaded trial software we produce. They report it as a virus. Microsoft readily admits that 90% of the folks that see the virus alert will not install the product. This means software vendors like myself are not permitted to compete in the ‘free market’ of the software business. I have two products for download on the internet. Both are exactly the same code. The only difference is one byte in a text, configuration file that allows the product to come up as either product. One of my software downloads is allowed by Microsoft and Norton, the other is not. It is reported as a virus and automatically deleted. This affects 90% of my new and upcoming business on the Windows 7 platform. I have talked to literally hundreds of other software vendors on the web who are in total agreement with my contention of Microsoft’s market monopolizing practices.

There are many other cases of ‘private market’ regulation that I could cite but this can probably suffice. The idea is that the corrosive effect of regulation is not just a charge that can be levied against the government. It happens all the time in the ‘free market’ as well. Does this effect competition adversely? Absolutely. Is there perhaps some need for regulation by both the government and big corporations? Probably, but as Jeff suggests it is also used as an excuse to kill competition. However, not as a component of government but of the private market itself. I think most folks agree that there is some need for market regulation by an impartial regulatory agency. However, effective regulatory restrictions by large corporations with vested interests are a market distortion that happens often and distorts the ‘free market’ ideal based on competition. When the government becomes a vehicle for the capitalists that do not want competition as Jeff suggest, it is certainly corporatism which is one of the hallmarks of historical fascism.

It is not a matter of is there corporatism or crony capitalism but to what degree it happens not just by government but by big corporations as well. To the degree that this happens, it is not the ideal of the ‘free market’ but a hybrid practical reality of how it actually works. The Bush administration was a perfect example of what happens when regulatory agencies rubber stamp big business. Oil and gas regulation, toy regulations, financial market regulations and more were thrown out the window and companies were given free reign over regulators. Corporations were even discovered to be wining, dining and giving the regulators luxurious trips. This was not the government interfering with the market but giving it carte blanche to do whatever it wanted. The ideal of small footprint regulation, as Jeff espouses, was realized by the Bush administration and it ultimately resulted in the recession. The housing crisis was not caused by too much regulation but the absolute lack of regulation in the derivatives market. One email at Standard and Poor’s stated, “Rating agencies continue to create and [sic] even bigger monster–the CDO [Collateralized debt obligations ] market. Let’s hope we are all wealthy and retired by the time this house of cards falters.” Moody’s and Standard and Poor’s, both private companies, are considered to have elevated ratings on CDO’s which are mortgage backed securities to minimize the risk and, in so doing, increase the profits for investors. See The Housing Crisis – Research Revisted, this and this for more data.

Another tactic of the ‘free market’ is price collusion and price fixing. Individual multinational corporations and conglomerations of individual market segment corporations have often been accused of doing this. The diamond market is notorious for this as well as Oil and Gas (remember Standard Oil, Rockefeller) and railroad industries. While this kind of activity in normally associated with monopolies it is still a reality of the practical workings of the free market. It seems to me that thinking of this kind of activity as a rare monopoly situation allows a sort of effective monopolizing in the actual market. Jeff states that, “Thus, monopolies don’t stay monopolies for long unless they are making consumers happy” but how does this measure up? Remember AT&T, officially deemed a monopoly by the courts, -they monopolized the market for decades…is this a short time? In any case, the kind of activity that goes on daily in the market by Microsoft and others has not acquired the label of ‘monopoly’ but shows that monopolizing activity is not a rare court decided phenomenon of the market; it is an analog, practical reality of the market. Microsoft has been brought to court and found guilty at least once that I know of for market monopolizing practices. This kind of activity has to get extremely severe before a public, official pronouncement is made.

Jeff quotes Smith here, “They often propose new laws and regulations, as Smith points out, that are to the benefit of their companies, but not to the benefit of society as a whole (i.e., to consumers).” However, Adam Smith himself, proposed over one hundred pages of financial industry regulations in the “Wealth of Nations” which have largely been neglected by the modern market place. I suppose Adam Smith himself was one the “they”s that Jeff refers to.

My contention is that it is extremely idealistic to think that the ‘free market’ is, in practice, all about competition. Yes, that is a positive aspect of the real market place but it is still an ideal and does not reflect a large part of how the market works. I also agree that government can become the problem when it effectively acts as a monopolist in the market, corporatism. However, as I have shown this is not just an essential evil of the government but occurs in the private market as well. My contention has always been that the free market works best for the public interest when government and big corporations collide. While the David and Goliath story may be cute, two Goliaths tend to do more damage to each other. The government in a democracy is ideally supposed to be the public defender and not the corporate defender although this ideal too has shown itself to be different from the reality. The answer is not to throw in the governmental towel as we did in the Bush administration but to make sure that we elect politicians that will oppose corporatism and government collusion with capitalists.

I find it interesting that Jeff thinks capitalists are capitalism’s biggest detractors. To me, this is like suggesting that churches are Christianities biggest problem. Capitalists vote Republican for the most part. If they wanted more government it seems to me like they would vote Democrat as the Republicans are fond of laying this charge on the Democrats. Republicans publicly state, almost daily, that they are on the side of business and the capitalists. Therefore, they publicly acknowledge that either they welcome the interference with the market that Jeff denounces or they want to return to the lassie faire capitalism of the Bush administration. While the Democrats may be complicitous in Jeff’s charge as well, they are not so bold proclaiming it which might account for something positive (or not). Are we to believe that the best proponents of a philosophy are intent on its destruction? This certainly may add some credence to some of Nietzsche’s discussion and post modernism but it also is a living demonstration of the inability of the system to rationalize itself based on its members. If major and important members are bent on the destruction of the market, are we suggesting that the only way to redeem the ‘free market’ is by the ideal that it proposes? If the reality has anything to do with some of the practicalities that I have suggested and seen, then ‘free market’ capitalism seems like it gets its validation based on an ‘otherworldly’ idealism not unlike Christianity. Are we supposed to believe that the ‘free market’ liberties in the Bush administration were problems of too much government still and therefore salvage the validity of the ‘free market’ ideal? I think this is a bit much to swallow. It is like continually suggesting that historical Christianity is not the ‘true’ Christianity in order to preserve an ideal Christianity that may appear dubious in practice. At some point, even the best metaphysician must live and breathe and have their existence in the world. Dreams are nice but realties are necessary. I do not advocate overthrowing capitalism but simply dealing with the reality of it without using its ideal as a pretense to justify its inadequacies. I think simple answers that make the government the scapegoat for the failures of capitalism are there to reinforce that idealism of a flawed system and enable us to overlook fundamental issues that need to be addressed. I prefer to address the issues directly and smartly while making the market more of a level playing field and less rigged against the interests of the public; a primary concern for Adam Smith and Karl Marx as well.

For me, the problem is better framed not in terms of government versus the private market but big versus small. Is the ideal of the free market demonstrated in TBTF (too big to fail)? What does competition have to do with propping up a business because it is too big? If competition always produces a better value for the consumer how is it that a ‘big’, that is too big to let the competition kill it can come from the ideal Jeff defends (remember Bush and Paulson)? If the ideal of the ‘free market’ is actually realized in practice, is this yet another glitch in the system that we have to rationalize away? How many times can we look the other way and still pronounce the ‘free market’ holy? What interest is served in ‘free market’ apologetics? My point is that ‘big’ is another name for effective monopoly in many cases. I would also apply this to the government with this caveat…the ideal of the government should be efficiency not small. If we make the government a David I would wager that Goliath will win the battle 99 out of 100 times. We need to make the big of the government our friend and defender because if we give that up we will have the mercy of the ‘free market’ and the legacy of George Bush as our BFFs.

A Case for Bashing the Democrats

Here is one issue I can actually agree with Newt’s recent comments concerning President Obama apologizing for burning the Quran. I do not think we should apologize, I think we should get the hell out! Why are Democrats and Republicans for the most part not saying what Ron Paul has said – what the hell are we doing there? In this case, the Democrats are justifying a war that the Republicans started AND continuing the error they made. This is the kind of thing that gives Democrats a bad name.

JFK (a Democrat) continued the ridiculous war that Eisenhower (a Republican) started in Vietnam. As a result many folks now think that JFK started the war. Historically speaking, JFK took ownership by continuing the domino theory, Republican rhetoric of the day for a tragic war that killed 50,000 Americans and maimed many more. This certainly reinforces the communist idea that liberals only serve the interest of the bourgeoisie by diluting and dulling the narrative that conservatives weave. At least it could be said that the effect is the same – the war is adopted, taken over, justified and thus, becomes a Democratic war.

A war is no small issue – the Republicans and Democrats owe us, the American people, an apology for starting and continuing an enormous mistake and human tragedy. We cannot afford the lives or economic cost of this insanity – STOP THE WARS NOW!!! I speak of wars because we still have active troops and ‘contractors’ in Iraq with casualties. Both Iraq and Afghanistan HATE OUR GUTS. We are occupying their country. Just think if Iraq or Afghanistan invaded our country to stop the anti-Islamic hatred in this country. Would we see them as liberators or occupiers? We are doing exactly that to them – HELLO, they hate us and do not want us over there. We have way overstayed our welcome and have only aggravated the problems inherent to their countries. We cannot make them ‘little Americans’. They have a history that has nothing to do with our history. We are imperialists and colonialists. We are wrong and everyone that is continuing our error is part of the problem. If Ron Paul could handle foreign policy and President Obama domestic policy, I would vote for them.

I do like the way President Obama handled the Libyan (and covert Egyptian aid) issue. We gave assistance to NATO and the Arabs, got in and out with the good guys in Libya (and Egypt) winning. I like his restraint with the ‘Arab Spring’. I think we need to support NATO and the rest of the world when and how they resolve to intercede but unilateral or effectively unilateral actions on our part always backfires on us – we make more terrorists by far than we kill – this is not success or winning folks. I have more comments in this essay that I wrote a while back.

Oh, one more rant, I hate and have resented all along that I have to pay taxes for someone else’s political insanity. Republicans talk about paying for ‘Obama-care’ – at least ‘Obama-care’ does not senselessly, in mass, massacre innocent elderly, women, children, kill our kids, and drive our economy into debt like these two crazy wars (the cost of these wars is much higher even in purely economic terms than ‘Obama-care’ – actually, according to the CBO ‘Obama-care’ saves us 100 million dollars over 10 years). These wars will not help anyone, only prolong misery – at least ‘Obama-care’ has the hope of perhaps, actually doing some good.

Comments on the Brain Essay

With regard to Jeff’s comments:

Jeff,

Thanks for your feedback. I am glad you liked it. Sorry I took a while to respond but my software work has been getting more time consuming lately. Here are my observations about your remarks.

First, without access to the details of these studies, we really don’t know what to do with this information. For example, it could be the case that 80% of those with an enlarged amygdala are conservatives, but only 0.01% of conservatives have an enlarged amygdala. If something like this is the case, then these studies really say nothing useful at all about conservatives.

Here are the studies the original article cited (there are more studies referenced in these studies as well):

http://blog.psico.edu.uy/cibpsi/files/2011/04/brains.pdf

http://lcap.psych.ucla.edu/pdfs/amodio_natureneuroscience07.pdf

The details about the study’s methodology are discussed in the beginnings of each article. The methodology looks sound to me as it is typical for these kinds of studies. Both of the institutions are top notch for neuroscience research.

Second, Mark goes on to depict conservatism, at least in part, as being about a fear of loss of control. But at least one counterexample exists, and a very large one: conservatives (or at least fiscal ones) advocate free markets, wherein control is utterly relinquished to the whims of trillions of individual and localized decisions; but liberals and progressives tend to dislike (fear?) the messiness and chaos of free markets, preferring something more planned, controlled, and centralized.

I suppose my take on this would be:

  1. Fear and problem solving are two very different discernable behaviors. If the response to a perceived problem is highly negative and emotionally charged then it looks like fear to me. If the response to a perceived problem tries to deal with the details of the problem and offer concrete, non-emotional solutions then I would think that would indicate a different part of the brain is operational. I am not sure dislike and fear are synonyms. I can dislike an ex-girlfriend but I do not fear her. I can disagree with Republicans on many things including the ‘free market’ but the ‘free market’ does not scare or threaten me.
  2. I think paranoia is a clearer, more intense example of fear than other types of generalized fear so I will try to use that as an example. I suppose anything can become the object of paranoia. I live in Boulder and seek out liberals as I did also in academia. I have never found liberals in those situations that I would describe as ‘fearing’ the ‘free market’. I have seen intense dislike of it though. For me, the fear thing is quite evident with paranoia – like ‘they are after me’ and ‘I need to get a gun to protect myself’ and ‘prying cold, dead fingers off my gun’ and ‘the blood of patriots’ and ‘the government is controlling us’ etc.. I have hardly ever heard liberals talk in these paranoid terms about the ‘free market’. I have, with effort, found some extremely leftist sites on the web that probably would fall into that category. However, I think that magnitudes and proportions matter in all these types of discussions. I do not know the statistical general population numbers for this kind of paranoia so I can only use my anecdotal knowledge and offer the impression that I think more conservatives fall into the paranoia category than liberals.
  3. If someone is trying to protect and defend something that he or she thinks they have and that someone is trying to take away, -that is a personal threat. Conservatives seem to think that they have something or once had it and that the liberals and government is trying to take it away from them (conservatives want to conserve, keep, hold on to). It seems to me that that reaction is typically one of fear. Just listen to Glenn Beck or Rush and think of the fear latent terms they are using. They actually have older people afraid to go out of their house for the big, bad, boogie, socialist, commy, radical Islamist, Obama control of the government which he is destroying (my dad included). While Beck and Rush are making money on this, older people are really getting scared by it all. I do not think liberals are ‘afraid’ of the ‘free market’. I think they want reasonable controls and regulation to make sure the market is more fair and not so tilted to the folks that are already huge beneficiaries of a tilted market. One thing certainly is different from the conservatives I described – liberals are not trying to protect something they think they had from the ‘free market’ that someone is trying to take away from them. Control may be fear based or reason based. I try to give some control for my kids but I do not fear my kids, I love them like crazy! I think you have to look at how the control is described (its terms, adjectives, adverbs, facial expressions, etc.) to figure out the emotive import.
  4. I think that one thing about this study is that it is time and culturally sensitive. For example, if we had a communist country and a ‘conservative’ party was perceived as trying to take housing, food, health care, etc. away from those that already comfortably had it, then I think a fear type, paranoid response could be feasible. As much as conservatives want to make the ‘nanny state’ argument in this country the census data* shows that 1 out of every 2 people are living at or near the poverty line (the poverty level for 2011 was set at $22,350 (total yearly income) for a family of four). ‘Nannies’ are generally for rich people – these income levels are not the lap of luxury. There is no way a family of four can be deemed ‘comfortable’ or getting ‘nannied’ by the government with this amount of income. I have never heard these folks defending their poverty situation in rhetorical terms like the conservatives use. In the latter case the issue is taking away something that is not working and in the former case the issue seems to be taking away something they think is worth protecting (dying for as the ‘blood of patriots’ demonstrates). I am not sure these studies should be taken as always applying to each and every case of what we think of as ‘conservative’ and ‘liberal’ for all time. I guess I look at it more like a snapshot of our particular present circumstances.

Third, and with tongue partly in cheek, could it be the case that those with a larger “part of the brain that processes conflicting information” (from Wikipedia’s definition of the anterior cingulate cortex) tend to be liberal because they are better equipped to deal with the resulting cognitive dissonance?

First, I like cognitive dissonance because it motivates me to think and do research. Perhaps one way to deal with cognitive dissonance is to pretend like it does not exist but there are more productive ways to deal with it (and actually like it with practice). With regard to your article, I think there is a bit of heavy handed stereotyping going on in it. I have never met a liberal or conservative that has claimed they are always right about everything. I would think of that as some sort of pathological problem. I think there are folks on both sides that get defensive, feel like they are pinned into a corner and lapse into a simplistic ‘well I am right and you are wrong’, lack of a defense, type argument. I also find the main premise of your article is that it obvious that Obama was wrong on everything (or most things) and the liberals ‘really’ know it and are just trying to cover it up – this is called a loaded question (or argument) because it makes unexamined conclusions at the outset. To make the claim that liberals really know Obama is awful is speculation on your part that needs further examination (not assuming it at the beginning and trying to dissect their intentions after the fact). This type of argumentative move reminds me of the anti-choice’ folks that automatically assume that pro-choice folks are ‘killing babies’, Nazis that believe in genocide, etc.. There is no middle ground for those types. They assume that you must believe that a fetus is a ‘baby’ and that any pro-choice discussion is really a defense of baby killing. This is a problem of extremism and radicalizing everyone else that does not believe in your truth. I call this type of argument the ‘pushing the middle ground to an extreme in order to refute it’ or straw man argument.

I really do think Obama has done a good job for the most part in light of what was happening when he came into office. I have written extensively on my blog using many statistics to show the progress that has been made in spite of all (including Republican naysayers) during the Obama administration including data from the Bureau of Labor Statistics, the Treasury Department, GAO, CBO and many universities, notable market, economic, polling research organizations so I would think you would have to take that on first. I also think many people tend to forget the extremely deep hole the Bush administration left us in. One case where I personally recognize the ‘we were wrong so therefore we must pretend like we were right’ syndrome is for the Iraq and Afghanistan wars. The folks that put us over there seem to me to be unable to belly up to the bar and admit it was a mistake to go over there in the first place (except Ron Paul who is totally right on this subject!). I understand why folks feel a need to do this – all those amazing kids that were killed or maimed for life AND the huge deficit hole those wars dug for us. I saw this in the Vietnam War personally with my two older brothers whose young lives were lost in the jungle never to return and I THOUGHT we learned our lesson but I guess we must forget quickly. I also recognize that some may legitimately have thought these wars were necessary and it was a good thing we started them in which case, an examination of the facts, the supposed reasons, the benefit, the real as well as imagined results had we not started those wars, etc. would have to be investigated to arrive at any hope of a conclusion. Even still, this type of effort would not result in a ‘I was right and you were wrong’ silliness but probably more of a weighted, approximation that these facts, assumptions, conclusion seem to be more correct than their antithesis. Actually, I find that this form of cognitive dissonance that cannot settle on black and white conclusions is better to have going forward than the fantasmic black and white resolve that makes folks feel better but really only leaves them believing an easy delusion.

And finally, the point of these studies, or at least the way they’ve been reported in some cases, seems to include the implicit suggestion that liberals and progressives are smarter, more logical, less emotional thinkers than are conservatives. But interestingly, the most intelligent among us tend to lean pretty strongly libertarian. See, e.g., the results of a survey of Triple Nine Society members (who are in the 99.9th percentile for intelligence).

I did not see the results in the Triple Nine Society that are ear marks of a scientific and therefore well reasoned conclusion (statistical variance, random, double blind, etc.). Additionally, what is deemed ‘intelligence’ would have to clearly and narrowly be stated and defended in advance of even trying to make a conclusion. There were a few libertarian, conservative and liberal politicians mentioned but this is hardly a study. As a side, I will tell you a little story. When I lived in Dallas I made some Mensa friends and started going to their meetings. I was thinking about taking the test when some of them started telling me that they would give me answers and even the test I would take. Of course, this is anecdotal and perhaps not typical of Mensa but it discouraged me from going further – for me, it really just seemed like a club after that…

Oh, also, I did not think of these studies as giving any indication of intelligence. I think that was a leap on your part. I think the whole topic of intelligence is a can of worms (emotional, IQ, analytic, logical, poetic/artistic, folksy wisdom, etc.). I personally do not feel like these studies had anything to say about the intelligence of liberals or conservatives merely how they typically, in our particular present situation, handle making sense of their environment. There certainly is no claim to greater or lesser intelligence in the studies themselves…

*I highly recommend this report by the Census Bureau. It give much more detail than the usual statistics that are cited.

The Free Market: Capitalism and Socialism

Adam Smith, an Enlightenment thinker, thought of humans as fundamentally self-interested as contrasted to Thomas Hobbes.  Hobbes thought that selfishness worked as a kind of glue for society.  His idea was that people are selfish; fundamentally concerned only with themselves.  This meant that each person wanted to thrive based on their personal wants and needs without regard to ideals like the greater good or the plight of others.  However, as selfish people, they want security at any cost.  In order to obtain security, people subject themselves to the state, to laws.  While individuals would freely rape, murder and plunder without concerns of conscience they do not because they do not want to be on the receiving end of their brutish desires.  The free subjugation of themselves to the state is called ‘social contract’ theory.

Adam Smith lived hundreds of years after Hobbes.  He was also a social contract theorist.  He was concerned with how self-interested individuals create commerce.  In “The Wealth of Nations”, Smith writes:

“It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”[1]

He thought that when self-interested individuals compete, the process of competition resulted in the most optimum allocation of resources because competition resulted in the lowest average cost of goods or services.  In this way, he thought that self-interest served the greater good.  He thought that any time the government or monopolies intervened in this process it prevented the process from working as it should and kept costs artificially higher thus interrupting the normative operation of a free market.  It is important to note that Adam Smith’s ideals of the free market only work on the basis of competing individuals not market monopolizing corporations or governments.  Market monopolies interfere with competition and defy the ideal of a free market.

“The price of monopoly is upon every occasion the highest that can be got. The natural price, or the price of free competition, on the contrary, is the lowest which can be taken, not upon every occasion indeed, but for any considerable time together. The one is…the highest which can be squeezed out of the buyers…The other is the lowest which the sellers can commonly afford to take…. The monopoly price is most often sustained by “the exclusive privileges of corporations (65)”[2]

“Smith uses the terms “self-interest” and “private interests” always in opposite ways. For former, his most famous statements are “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest (20),” and, “by directing [his] industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention (351)”. Concerning “private interests,” Smith is not so sanguine; these private interests constitute the “spirit of monopoly (371)” which Smith so much detests. It should be clear by now, from what has been said before, that Smith is well aware of the dangers of avarice and especially so since the interests of capitalists diverge, in Smith’s view, so much from the interests of the general public.”[3]

Capitalism (a term he never uses), as Adam Smith thought, is depended on private property and private ownership.  The self-interested individual had complete legal and sole rights to their property.  Without private property there would be no motivation for individuals to compete and increase their property ownership, their wealth.

Socialism believes that individual interests are served better when they cooperate with each other and not compete.  Socialism believes in social ownership.  In effect, this means workers own production (also called the means of production).  Production is not owned privately but by a group.  There are many forms of socialism.  Some forms of socialism believe that the workers in a factory own the factory, but everything else in the economy is ‘free market’ and private property.  There is no government ownership is this type of socialism.  Some forms of socialism simply pay a social dividend based on factory profitability.  Some forms of socialism nationalize factories but still maintain private ownership.  Social democrats use a progressive tax system and government regulation within a private market economy.  There are also anarchist and libertarian forms of socialism.  Socialists tend to believe that when the individual is elevated above the group, normal human interaction and group identities tend to get ignored.  Language[4] is a perfect example of how humans are fundamentally collective.  People do not have ‘private languages’.  Communication is only possible by sharing a language that we individually did not make up.  People are not hermits.  We form governments, churches and social communities. 

“As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce. The wood of the forest, the grass of the field, and all the natural fruits of the earth, which, when land was in common, cost the laborer only the trouble of gathering them, come, even to him, to have an additional price fixed upon them. He must then pay for the license to gather them; and must give up to the landlord a portion of what his labor either collects or produces. This portion, or, what comes to the same thing, the price of this portion, constitutes the rent of land, and in the price of the greater part of commodities makes a third component part.

The real value of all the different component parts of price, it must be observed, is measured by the quantity of labor which they can, each of them, purchase or command. Labor measures the value not only of that part of price which resolves itself into labor, but of that which resolves itself into rent, and of that which resolves itself into profit.”[5]  -Adam Smith

It is important to note that a ‘pure’ socialism or capitalism has never existed on any large scale.  Every world historical economy has always been a mixture.  For example, consider the notion of rent in capitalism.

“For the purposes of economics, Smith divides society into three economic classes: the landlords, the laborers, and the merchants and manufacturers (448), or those who live by rent, those who live by wages, and those who live by profit (217). Now the interests of the first two classes are tied to the prosperity of the nation; economic expansion raises the value of land and increases the demand for labor and hence its wages. But exactly the opposite is the case with the third class, those who live by profit:

But the rate of profit does not, like rent and wages, rise with prosperity, and fall with the declension of the society. On the contrary, it is naturally low in rich, and high in poor countries, and it is always highest in the countries which are going fastest to ruin. The interest of this third order, therefore, has not the same connection with the general interest of the society as that of the other two (219).

Thus the interests of the third class run contrary to the interests of the other two; expansion actually raises the cost of labor and rent and increases competition, thereby lowering profits, so much so that the ruination of a country is actually in the best interests of the third class”[6]

It is interesting to note here that economic expansion “raises the value of land” but it is uncertain how long the values of land can go higher and how exactly the profits increase unless the property owner is the sole owner, i.e., already paid for and not obtained by a loan.  It would seem that profit is “high in poor countries”.  Adam Smith takes this an indicator of “ruination of a country”.

A property owner allows a tenant to live in their property for a fee.  The renter does not own the property and if the renter quits paying rent they are not allowed to live in the house.  Likewise, a mortgage is ‘ownership’ on paper but the bank allows a mortgagee to live in the house as long as the mortgage is paid.  In both cases, ownership is not sole or absolute – it is contingent on paying a periodic fee.  So, the landlord or the bank cooperates with the individual in the interest of capitalizing on the financial arrangement.  It should also be noted that the bank and the landlord are likely to be indebted themselves to the third class, “those who live by profit”; the financiers, that Adam Smith writes of above.  

We can see that the renter or the mortgagee is not a property owner in Adam Smith’s notion of property ownership.  However, the aspiration of the renter or mortgagee is for property ownership.  Since the aspiration of sole ownership is not reality, a group arrangement is made that allows an individual to have shelter until their aspirations can be obtained.  However, it is certainly true that most individuals today will never own their house outright.  Therefore, in reality they will live their whole lives working and cooperating in group economic, arrangements. 

In finance, leverage is the ability of an investor to increase their ‘paper’ holdings based on loans.  Again, a group economic arrangement allows investors to obtain securities that they would normally not be able to afford.  As such, the investor is obligated to a group, cooperative arrangement to leverage their holdings. The question of fees and profit is actually an ancient issue.  The Bible explicitly forbids interest or profit on loans (Exodus 22:25–27, Leviticus 25:36–37 and Deuteronomy 23:20–21).  These passages state that interest is exploitative.  In this sense, those that base their faith on these books would be in perfect agreement with the writings of Karl Marx (at least on this specific topic) and Adam Smith. Exploitation with higher and higher fees for loans on rental and mortgaged property are examples of how the wealthy class, the real property owners, has increased their wealth at the expense of those that are not wealthy.  This exploitation has been going on from the beginning.  Even Adam Smith recognized the exploitation of labor.  This excerpt is from an essay on The Wealth of Nations:

“However, in the negotiation of wages, the worker is at a distinct disadvantage. In the first place, the law prevented him from joining with his follows to bargain (71, 151). Further, the law always favors the masters over the workers (151). Workers are prevented from joining in unions to raise wages, but the masters are not forbidden to unite to lower them; indeed, the law encourages them to do so. This legal inequality particularly angered Smith, who noted that, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices (137).” But when the workers attempt to meet, it “generally end[s] in nothing, but the punishment or ruin of the ringleaders (71).” The inequality is so great that:

Whenever the legislature attempts to regulate the differences between masters and their workmen, its counselors are always the masters. When the regulation, therefore, is in favor of the workmen, it is always just and equitable; but it is sometimes otherwise when in favor of the masters (151).”[7] –Adam Smith

Socialism also recognizes the tendency for exploitation of the worker and tries to address it.

In both socialism and capitalism dues must be paid to benefit.  For Christianity[8], capitalism and socialism[9] a main tenant is “He who does not work shall not eat”.  Paying your dues is not an option in socialism or in capitalism.  Fees are required to participate in the group.  The main difference is that in capitalism, according to the ‘theory’ of Adam Smith, individualism as self-interest reigns supreme.  The ideal is that the individual worker benefits with private property ownership not the financier.  In socialism, the individual worker benefits as well but socialists want to formally recognize ownership of production in a group context – the laborer not the financier.  Depending on the type of socialism, the group could mean anything from share holders in a factory to nationalism of a factory.  In theory, the individual should benefit in both systems.  However, socialism wants to take precautions to ensure that the group of laborers benefit and capitalism viz. Adam Smith acknowledges that in some cases the financiers will benefit at the cost of the laborers.  Both systems distribute wealth in one way or another.  The fundamental problem that Marx wanted to address with socialism was how the wealthy, the financiers, ended up with all the real private property ownership while the workers, in effect, ended up as indentured slaves barely able to pay their bills.  Additionally, in both systems classes are set up in practice.

Karl Marx, the founder of communism, thought there was a higher and lower form of communism[10].  Engels and Lenin called the lower form of communism, socialism.  Socialism is not egalitarian.  Egalitarianism means everything is shared equally.  Marx described socialism like this:

“But one man is superior to another physically or mentally, and so supplies more labor in the same time, or can labor for a longer time; and labor, to serve as a measure, must be defined by its duration or intensity, otherwise it ceases to be a standard of measurement. This equal right is an unequal right for unequal labor. It recognizes no class differences, because everyone is only a worker like everyone else; but it tacitly recognizes unequal individual endowment and thus productive capacity as natural privileges. It is therefore a right of inequality, in its content, like every right. Right by its very nature can consist only in the application of an equal standard; but unequal individuals (and they would not be different individuals if they were not unequal) are measurable only by an equal standard insofar as they are brought under an equal point of view, are taken from one definite side only, for instance, in the present case, are regarded only as workers and nothing more is seen in them, everything else being ignored. Further, one worker is married, another not; one has more children than another, and so on and so forth. Thus, with an equal performance of labor, and hence an equal share in the social consumption fund, one will in fact receive more than another, one will be richer than another, and so on. To avoid all these defects, right instead of being equal would have to be unequal.”[11]

Karl Marx thought that communism would eventually replace socialism not by force but by natural progression.  Communism is egalitarian.  Communism thinks that wealth should be distributed equally among equals.  Individuals should not be singled out according to class, wealth, natural abilities, etc. but should work cooperatively for the greater good of society.  Communism does not believe in private property.  Private ownership and competition is thought to favor the rich and; necessarily, put less wealthy individuals at a competitive disadvantage.  Private property is what gives rise to a class stratified society.  In communism the ideal is one of egalitarianism; that all people are equal and should receive the benefit of their labor equally. 

For communism, individual ownership is not allowed but that does not restrain class stratification.  The administrators of shared wealth, the government, become the de facto upper class.  Wealth gets disproportionately distributed according to this class structure in communism as well.  In practice, capitalism, socialism and communism cannot claim a classless society nor can they claim that the individual is the sole beneficiary of the toil of their labor as property owners.

What follows from this is that the group or the individual is not normative for these economies but ideals.  Class is inevitable for capitalism, socialism and communism – it is utopic to think otherwise.  A class is a group comprised of individuals.  Mitt Romney is part of a class, a wealthy class.  Most of us will realistically never be in his class.  However, humans are aspirational – being human is being towards a future.  In this way capitalism offers the promise of a possibility – the possibility for success, the chance to be in the wealthy class.  For those that extol the virtues of capitalism, it does not seem to matter as much that the vast majority of these aspirations will never be fulfilled.  What matters is the place for the dream, the drama of the ideal.  As individuals, we need aspiration just after the need for food and shelter.  We need to think we are or will be a part of the wealthy class.  The goal of this aspiration is for membership in a group, a communal hope shared in capitalism.  We are ready to use our collective language, our economic group arrangements, our families, societies and affiliations to aid us in our goals – the envisioned absolute wealth of our freedom.  The dream that imagines itself as self-interested individualism is all the while prefaced, perforated and dependent on the other, the group, the community – our shared language.  This is what socialism recognized and tried to articulate in its economics.  What communism lost was the aspirational; the value we place on the desire for moving towards a future.

In reality, there never is an isolated individual that can cleanly be separated from a collectivity.  Additionally, the dream of accumulating more and more sole property ownership based on the system of self-interested individuals appears to reach practical limits as a result of the third group Adam Smith writes of, the financiers.  None of us are hermits and make up private languages as we go through our daily lives.  The notion of an Adam Smith styled individualism is what many philosophers think of as metaphysical (meta-phusis as beyond physics or beyond the physical).  The aspiration I have referred to is desire for the metaphysical individual.  It does not reflect our lived reality but necessarily participates in our sense of meaning and hope as an ideal.  Aspiration is essential for meaning.  To aspire is to see beyond the hum drum, the daily grind and meaningless repetition – perchance to dream.  How does the state, the government, figure into our aspirations?

For Adam Smith the state is the guarantor of our security.  It is responsible for the military.  It also is responsible for enforcing the law.  It holds the promise of reprisal for violations of law.   It is also responsible for public works projects and certain public institutions where profit is not possible.

“According to the system of natural liberty, the sovereign [government] has only three duties to attend to; three duties of great importance, indeed, but plain and intelligible to common understanding: first the duty of protecting the society from the violence and invasion of other independent societies; secondly, the duty of protecting, as far as possible, every member of society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice; and, thirdly, the duty of erecting and maintaining certain public works and certain public institutions, which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit could never repay the expense to any individual or small number of individuals, though it may frequently do much more than repay it to a great society.”[12]

Contrary to popular belief, Adam Smith was not opposed to government regulation.  He spent 100 pages in the “Wealth of Nations” discussing banking regulations.  As has already been mentioned he knew the financiers in a society had a corrosive effect on society.  They had a tendency for exploitation and government regulation was needed to hold them in check.

For Adam Smith, self-interest is good for those that live by ‘rent’ and ‘wages’ but not for those that live by ‘profit’ as previously mentioned.  Smith thought those that live by profit had a destructive influence on society.  This is why Smith favored regulations for those who live by profit.  The government certainly plays an essential role for ensuring a fair market.  Of course, he recognized the issues with capricious regulations and the way they interfered with the normal market operation of efficient competition.  However, he would have never given financiers carte blanch, deregulated access to the market.  Adam Smith would have said, “I told you so” when the Gramm–Leach–Bliley Act of 1999, deregulated financial services.   It repealed part of the Glass-Steagall Act of 1933 that prohibited a single institution like a bank from acting as any combination of an investment bank, a commercial bank, and an insurance company. Basically, the repeal allowed banks to use customer deposits for risky financial ventures.  It also allowed banks to have conflicts of interest by ‘advising’ its customers to use its financial services and products without regard to more competitive and valuable investments.  Additionally, the government was implicated in these risky investments as the Federal Deposit Insurance Corporation (FDIC) backed up customer deposits.  The Dodd–Frank Wall Street Reform and Consumer Protection Act tried to restore financial oversight of banks and financial institutions and consumer protections.  One thing it did was to allow the government to liquidate these institutions that are covered by the FDIC in order to keep these institutions from having large scale failures that would jeopardize the ability of the U.S. government to bail them out.  Regulations not only provide a fair market but also protect the government from bankrupting itself from market excesses.  Adam Smith would have understood the need for this and would not be calling for deregulation as modern Republicans have been doing.

The issue here is that when individual self-interest promotes the healthy working of the market place then the government should stay of the way.  However, the government exists to make sure it protects “every member of society from the injustice or oppression of every other member of it”.  While it may be in the interest of oil companies to “drill baby drill” it may not be in the interest of the environment and therefore, other members of society to let them do it merely to increase their profits.  The government’s job is to make sure the market protects other members of society whose self-interest may be damaged by one group’s profit incentive in the market.

Adam Smith even recognized that the ‘free market’ was not a panacea that could solve all social ills.  He stated that a primary function of government was to take care of public works and public institutions where the “profit could never repay the expense” of doing the project.  It is certainly arguable that health care insurance providers and education could come under this rubric.  It is not the profit interest of health care insurance providers to cover certain risky population groups or chronic illnesses.  In order to maximize their profits it is in their interest to ‘cherry pick’ their clientele and drop clients that are a drain on the system.  It would be hard to believe that anyone could seriously argue that health care insurance providers have not had quite a long history that illustrates this point.  Additionally, while a very good private education is certainly feasible, the cost would prohibit many classes of society from being able to obtain an education.  Education for a profit certainly works for those that can pay but simply ignoring the others that cannot pay is not in the long term interest of a society.  Adam Smith argued that education is a public work when he we wrote:

 “The same thing may be said of the gross ignorance and stupidity which, in a civilized society, seem so frequently to benumb the understandings of all the inferior ranks of people. A man without the proper use of the intellectual faculties of a man, is, if possible, more contemptible than even a coward, and seems to be mutilated and deformed in a still more essential part of the character of human nature. Though the state was to derive no advantage from the instruction of the inferior ranks of people, it would still deserve its attention that they should not be altogether uninstructed. The state, however, derives no inconsiderable advantage from their instruction. The more they are instructed the less liable they are to the delusions of enthusiasm and superstition, which, among ignorant nations, frequently occasion the most dreadful disorders. An instructed and intelligent people, besides, are always more decent and orderly than an ignorant and stupid one. They feel themselves, each individually, more respectable and more likely to obtain the respect of their lawful superiors, and they are therefore more disposed to respect those superiors. They are more disposed to examine, and more capable of seeing through, the interested complaints of faction and sedition, and they are, upon that account, less apt to be misled into any wanton or unnecessary opposition to the measures of government. In free countries, where the safety of government depends very much upon the favorable judgment which the people may form of its conduct, it must surely be of the highest importance that they should not be disposed to judge rashly or capriciously concerning it.”[13]

While this may seem to promote a certain kind of equality, it is really “the duty of erecting and maintaining certain public works and certain public institutions, which it can never be for the interest of any individual or small number of individuals, to erect and maintain”.

The government is not a cancerous growth of society but just as essential as referees and rules are to games of sport.  Getting rid of government is cutting off your nose to spite your face.  It ignores the need for a market framework where fairness and protections are ensured.  It should restrain monopolies and market bubbles that would cause cost to be “the highest which can be squeezed out of the buyers”.  It is also responsible for filling in gaps that self-interest and profit cannot address.  Karl Marx and Adam Smith both addressed the inherent exploitation built into an economy.  Protecting individuals from economic exploitation is vital for an economy as socialism and Adam Smith understood.  Karl Marx went further with trying to embody elements of protections for ‘self-interested’ individuals into an economy.  Adam Smith understood the human need for aspiration, the need to dream, and tried to embody this in the economy of capitalism.

What is dreamed must pertain to me and not to an abstraction about the state or egalitarianism.  An ‘aspiration of the state’ is too abstract from the self-interested point of view.  However, the abstract notion of an ‘aspiration for the state’ is not inconsequential – it is the aim of morality or what Adam Smith termed sympathy[14] (more like what we think of as empathy).  Morality aims at egalitarianism in that it places oneself in the place of the other for Adam Smith.

“However selfish man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though they derive nothing from it except the pleasure of seeing it.”[15]

When I refer to morality, I am speaking specifically about the natural empathy that many people have for the suffering of others.  There are very few people that proclaim outright that if you do not work just go ahead and starve to death.  For most of us, we may think that those who do not work will not eat but few are willing to let children, elderly, handicapped or even lazy people die before our eyes.  The same holds true for health care.  We do not want to pay for others health care but the idea of just letting people die without it is abhorrent.  This is why we are willing to pay more for emergency room health care than to address the issues systemically and at a lower cost.  Most of us will not overtly proclaim that if you do not have health insurance go off somewhere and die.  Few will proudly state that if you do not have shelter go live on the street (just not my street).  While there is a certain chest beating, cathartic youthfulness about these proclamations it offends most people’s sense of responsiveness to these situations.  It may help some to think that suffering is the fault of the person suffering (as certainly may be the case for some) but pushing this very far starts to look like ‘protesting too much’ and really serves only to show that the pull of morality is felt only reacted to negatively and defensively. 

This feeling of responsibility for the suffering for others is what I mean by morality.  From the point of view of ‘my aspirations’, the suffering of the other is irrelevant.  From the ideal of pure self-interestedness there is no place for this feeling.  If the self is thought as the absolute metaphysic of individualism, the sole property owner, it does not serve the absolute interest of the self to care about the suffering of others; much less do anything about it that will not directly benefit the self.  While morality is an abstraction from the point of view of self-interestedness, it is nevertheless a notion that most are not willing to depart with.  Our self-interestedness tells us not to pay for anyone other than ourselves but the pull of morality will not let us ignore the suffering of the other.  Morality is the ghost of our group involvement.  It is the basis for the inevitability and indispensability of the state.

As I have discussed while our metaphysics of individualism compels us towards an aspirational future, our realistic, daily involvements are fundamentally based on language, community and group.  The capitalistic goal for moving into the upper class is itself a self-interested aspiration that embodies the notion of class, the group.  All this shows us that individualism is perforated with group involvement and community.  We are indebted to the other whether we acknowledge it or not.  While chest beating individualism may be fun for some, individualism, the sole property owner, is essentially a dream, a drama that gives us meaning in our ‘me-only’ self-centeredness.  However, individualism ignores the real ways in which we participate with others and are always already indebted to the other. 

Karl Marx went further than leaving the option of morality up to every self-interested individual.  Adam Smith as well understood the role of government in achieving the affluence and security of individuals in an economy, protecting them from exploitation and providing public works projects.  The communist notion of equalitarianism failed to make everything equal in terms of labor and preventing exploitation.  However, socialism attempts legal protections of groups and individuals that aim at fairness, equal opportunity, an equal playing field and protections in an economy.  It is important to note that ‘equal’ here is not some absolute ideal of equalitarianism as in communism but should be thought under the rubric of fairness.  Marx fleshed out possibilities for how this could work more than Adam Smith but Adam Smith would probably have more in common with the objectives of Karl Marx’ than many of the modern Republican, the neo-conservative, advocates of capitalism.

In any case, we are neither socialists nor capitalist; we are both.  The ideal of either is not where we live.  This is why there never has been a pure capitalism or a pure socialism.  All great economies have essential elements of both.  Beating others over the head with these labels may make some feel good but it is only a silly drama that fuels an inflated ego.  These kinds of accusations can also be used to manipulate less aware people but it is really only empty rhetoric.  The outcome of such practices is a chronic condition called hate and only hurts the hater in the long run.  I believe it is better to ‘see’ how we live and try to ‘understand’ our drives and aspirations as they show themselves without metaphysical hermeneutics, pre-cognitive dispositions and assumptions, working below the surface.  There is value in letting ourselves see and understand ourselves as we are and not in the service of some head game we play on ourselves.  In all great economies, socialism and capitalism are really only two different historical ways of thinking about the same thing – an economy that works.


[1] Adam Smith, Wealth Of Nations, [WN I.ii.2)

[2] The Forgotten Agrarian: Re-Reading Adam Smith, John C. Médaille, http://www.medaille.com/newadamsmith.htm, parenthetical numbers refer to section numbers in the cited Adam Smith work

[3] ibid

[4] Alas, you too young, free-market libertines who rail against the socialists in your rabid individualism – you too are a product of ‘group-think’ – it is called language – you just don’t know your indebtedness yet…

[5] Adam Smith, Wealth Of Nations, [WN I.vi.7-8: p 67]

[6] The Forgotten Agrarian: Re-Reading Adam Smith, John C. Médaille

[7] ibid

[8] II Thessalonians 3:10

[9] In accordance with Lenin’s understanding of the socialist state, article twelve of the 1936 Soviet Constitution states:

In the USSR work is a duty and a matter of honor for every able-bodied citizen, in accordance with the principle: “He who does not work, neither shall he eat.”

In Lenin’s writing, this was not so much directed at lazy or unproductive workers, but rather the bourgeoisie. (Marxist theory defines the bourgeoisie as the group of those who buy the labor-power of workers and engage it in the process of production, deriving profits from the surplus value thus expropriated. Once communism was realized, that is, after the abolition of property and the law of value, no-one would live off the labor of others.)

http://en.wikipedia.org/wiki/He_who_does_not_work,_neither_shall_he_eat

[10] http://www.marxists.org/archive/lenin/works/1917/staterev/ch05.htm

[11] Capital, Vol. I, Chapter 1, Section 4 (p. 78); Also see http://www.lrp-cofi.org/book/chapter3_transitiontosocialism.pdf

[12] Adam Smith, Wealth Of Nations, ([1776] 1976, 687–88)

[13] Ibid, (WN V.i.f.61: 788)

[14] Internet Encyclopedia of Philosophy, Adam Smith, http://www.iep.utm.edu/smith/   

[15] The Theory of Moral Sentiments, Adam Smith (TMS I.i.1.1)

A Rebuttal…

Here is my rebuttal of this,

http://critical-thinker.net/?p=1025

First, I would not maintain that idealizing the past is solely a conservative issue. I think you can always find cases where any group idealizes the past. However, in my opinion, the fallacy in your counter argument is of cherry picking. Admittedly, I have not done any statistical analysis of how often conservatives appeal to an idealized past in their rhetoric compared to the other cases you cite. I submit these points to reinforce my point:

Point 1 – Conservative by definition implies a history to conserve. The definition of the word contains my main premise, that conservatives root their identity, heritage and notion of truth in the past. None of the other groups you mentioned call themselves by a name that essentially, in the definition of the very word, implies identification with the past. I find this to be along the lines of a tautology, it is necessarily true that conservatism implies a past to conserve and any group that calls themselves ‘conservative’ sets up an identity with the past…

Conservatism means to conserve the past.
Therefore, a conservative wants to conserve the past.

Point 2 – I think most folks would agree with my presumption that conservatives continually hearken back to a better time that proves their ideology much more than other group’s rhetoric (including the ones you mentioned). I do not think that the numbers are the same for the cases you cite – numbers and proportionality matter. Admittedly, I have not and do not plan to try to come up with stats on this so this depends on people’s own judgment that preferably do not have a vested interest in the outcome of their judgment.

Point 3 – I think this is your admonition that conservatives idealize the past…

“I think a more accurate definition of conservative is someone who wants to conserve tried-and-true traditional institutions and who supports only gradual change, believing that such things are the way they are for good reasons.”

The “tried and true” is exactly what my contention is – the ideal of the “tried and true” may not have really been ‘tried’ or ‘true’. It certainly is an interpretation that is contestable – it may have been ‘tried’ but maybe not the way people think it was tried and the outcome may not have been the ‘true’ that common, un-researched opinions may have assigned to it. Are you suggesting that everything or even most things people think are “tried” and “true” really are – are you? It is the job of propaganda to make/create the content of the ‘tried’ and ‘true’. The reality is not necessarily either and I find typically different.

Point 4 – The graph you cite in your previous post that came from here,
http://scottgrannis.blogspot.com/2011/12/federal-finances-update.html
along with this graph,
http://data.bls.gov/timeseries/lns14000000
and these from my post,
http://www.mixermuse.com/blog/2012/01/06/all-you-need-to-know-about-politics-1-6-12-2/

all demonstrate my point. When Bush took office January 20, 2001 the unemployment was 4.2%. When President Obama took office January 20, 2009 the unemployment rate was 7.8%. Four months later in May it was 9.4%. Your GDP graphs show the almost straight line up at the end of the Bush administration as well. These straight lines up started at the end of the Bush administration and peaked just after Obama took office. They have been coming down ever since. This is the point I am making and you made it for me as well. The economy is like a cruise ship. Don’t forget the recession started as a result of 8 years of a Republican president and 6 years of Republican House and Senate control. A president cannot change the economy the day he gets into office. However, there is substantial evidence that you made and I made and others that things are turning around since Obama got into office – the proof is in the pudding. All you have to do is look at the graphs and where they occur to make my point. If you look at all the data points and do not take one point like “19.7” you will see that the debt went up just as Bush was leaving and Obama was starting. Also, look at the rate of change of spending in the graph on my blog cited above. Here is a better graph from GAO data,
http://www.gao.gov/special.pubs/longterm/debt/

I am not sure where your numbers come from on your graph but they seem a little skewed from the GAO numbers.

Another thing you have not taken into account is discretionary and non-discretionary part of the budget. Discretionary spending is annual spending that the congress and the president have to deal with every year; non-discretionary is mandatory, multiyear spending that has already been committed to by previous administrations (i.e., like food stamps calculated to poverty levels). The non-discretionary portion of the 2011 budget is 59%; the discretionary is 34%.
http://nationalpriorities.org/resources/federal-budget-101/peoples-guide/

What Republicans call Obama-Care has not kicked in yet but the GAO wrote a report that I have read from start to finish that claims it will take 100 billion off the budget over 10 years as compared to doing nothing (can’t cherry pick GAO reports in my opinion – ask my wife – she retired from the GAO). However, the 1 trillion dollars over 10 years of Medicare Part D that was passed by a Republican president (Bush) and Republican dominated House and Senate has already started to hit non-discretionary spending. The non-discretionary part of the budget makes up the lion’s share of the increased debt spending that you see at the end of the Bush administration. Part is this has to do with the wars, the national disasters (FEMA) and more importantly the recession. As more people go into poverty entitlements that were all previously linked to poverty numbers kick in with much higher amounts of spending – nothing to do with President Obama.

As you can see from your graphs and the others ones I have cited, the graphs are taking a turn for the better since President Obama took office but it will take more time than a year to turn it around and a congress that cooperates with the president to get military and entitlement spending down.

Please attach further comments to the original post cited at the top – thanks.

More Interesting Information:

•Since 2001, the U.S. has spent $7.6 trillion in security-related efforts, including: Department of Defense base-line, nuclear weapons, Homeland Security and war.
•From 2000 to 2011, security-related discretionary spending increased 96% versus non-security discretionary spending which increased 39%.
•The 2011 cost of interest on the national debt which is related to military spending is $80 billion. This is equal to the 2012 budgets of Agriculture, Commerce, Interior, Labor and Transportation combined.
•2011 spending on the Iraq War ($47.4 billion) would pay for all the public disaster funding that FEMA disbursed from Fiscal Year 1999 through Fiscal Year 2010.
•2011 spending on the Afghan War ($122 billion) is greater than the 2012 deficits of 42 states and the District of Columbia combined.

http://www.commondreams.org/newswire/2011/09/08-3

http://costofwar.com/en/publications/2011/ten-years-after-911/

and,

http://costofwar.com/en/publications/2011/ten-years-after-911/ten-year-visualization/

PS

I have not researched this data yet but plan to see if this is accurate:
Medicare Part D will add 9.4 trillion over next 75 years to the debt.
http://www.cms.gov/ReportsTrustFunds/
http://krugman.blogs.nytimes.com/2009/12/29/part-d-revisited/
Joe Scarborough reports Medicare Part D will add 7 trillion over 10 years to the debt.
Credit Default Swaps were 50 to 70 trillion during the Bush years.
I will not state that this is good data until I see reputable data sources.

Wealth: Zero Sum or Open Ended?

With regard to the comments on this post…

http://critical-thinker.net/?p=989#comments

First, I would NEVER advocate or imply violence. I will leave that to gun toting revolutionaries on the right – “the blood of patriots and tyrants” folks. I pay taxes to support police and military to make sure violence is NOT how we solve problems in this country.

Second, I do not think wealth is a zero sum game in the short term…

Let’s think of wealth in terms of intrinsic value and monetary value for a moment. Recently, the monetary value of gold has gone from several hundred dollars an ounce to over two thousand dollars an ounce. An ounce has not changed. There is no change in the world’s supply of gold. The cost of getting the gold, production, is relatively the same. The only thing that has changed is that people have this idea that gold is more valuable now due to worldwide economic crisis. The price that folks are willing to pay for gold has gone up dramatically without any substantial change in the supply of gold. It takes time to dig new mines and ramp up production. The inflation of the cost of gold is a market bubble. If you are considering a market bubble an increase in wealth then when the bubble bursts, by the same logic, you should consider the decrease in the cost of gold as a wealth decrease. The 30 trillion dollar super bubble in the last decade for credit default swaps would also increase the world’s wealth during the last decade and decrease it after the collapse. In other words, wealth by this definition is just as likely to increase as it is to decrease. If the intrinsic value of gold is thought in terms of the cost of getting it out of the ground, production, then that has remained relatively constant – it generally does not change very quickly. It is not subject to the whims of the market and value perception. If wealth is measured this way then wealth creation is much more stable in terms of intrinsic value. The question of wealth creation revolves around real value and perceived value.

Real value has to do with the cost of production or cost of delivering the service. Perceived value is subject to such things as market manipulation (as the diamond market illustrates), the values of competing currencies and market bubbles. What is more, ‘inflation’ is the attempt to quantify the difference between intrinsic value and “inflated” value. Additionally, on one hand, the right complains about the Fed printing more money and on the other hand wants to count perceived value as ‘wealth creation’. Why wouldn’t the Fed printing more money be considered wealth creation as well? I do not think you can have it both ways without contradicting yourself.

When financial products like the credit default swaps (CDS) are created they put together existing mortgages of various risk calculations and sell them as new products, they are not new products; they are a re-packaging of an existing product. In the super bubble of the last decade the 30 trillion dollar need for new mortgages did create more mortgages but the intrinsic value of the newly created mortgages went down due to the extremely heavy draw from the CDS super bubble (see http://www.mixermuse.com/blog/2012/01/11/the-great-recession-how-the-free-market-got-rigged/). The beast had to get fed and went from sirloin steaks to any ‘ol piece of crap. This negative draw that adversely affected the mortgage market created liar loans and vastly increased the private mortgage market over the GSE market share during the last decade. Mortgages were being handed out like candy (relatively speaking not by the GSEs but by the private mortgage market; the GSEs were way behind in this game) – did this increase wealth (can’t have it both ways)?

Even Greenspan, a Republican, explicitly stated that he vastly underestimated this negative draw from re-packaged wealth and its devastating effect on the real value of the market. So, these bubbles can actually create fake value, fake wealth and guess who takes the brunt of it – the taxpayer and – the pyramid schemes last entrant; the ones that had all the risk of variable rate and liar loans with no increasing real estate market to sell the house into to keep from getting upside down on the loan. A pyramid scheme is not wealth creation – it is a con that shifts all the investment risk down. The CDS super bubble was primarily private market, ‘free market’ capitalism. To blame it on the government is a straw man that deflects the real source of the problem and therefore, keeps us from learning from the past – you know the consequences of that…

To conclude, the convenient stereotype that liberals believe in a zero sum game may make one feel better about one’s ideology and the open ended view of wealth creation but as I have shown, the real issue of wealth and wealth creation is much more involved than ‘zero sum’ or ‘open ended’. It is a bumpy, messy process that has more to do with perceived value than real value. When liberals talk about the historical disparity between the haves and have nots it is in light of this bumpy, messy process and how the loser seems to be once again the low guy on the pyramid scheme not the guys that got in early and have their ‘created wealth’ going out of the stratosphere.

The Question of Conservatism

Conservatives want to conserve. Certainly this is ostensively true. The question of conservatism comes when the object of conservatism is explicitly posed. For example, conservatives are fond of talking about the past. They believe that their notion of the past is ‘real’. However, an objection could be made that their interpretation is ideal and therefore, as an example, a return to the conservative past is not only impossible as it never really existed but could be used for voter manipulation (please see the addendum below to illustrate this point).

In philosophy we would say that history is hermeneutical; that is, it lends itself to interpretation. Are there historical facts that are more certain than others? –Absolutely. Hitler existed. However, there are mainstream Republicans that believe Hitler was a liberal, socialist since Jonah Goldberg (see http://www.mixermuse.com/blog/2010/01/03/fascism-is-liberal-and-squares-are-circles/). While the vast majority of historical scholars disagree with Goldberg’s conclusions, it does demonstrate the susceptibility of history to interpretation. The Bible is another clear example of how history can interpreted differently viz. all the different Christian denominations. Of course, there are multiple attempts to define the ‘true’ history but that is beyond the scope of this discussion. The point is that history has empirically demonstrated a propensity for radically different interpretations.

Since there is an interpretive variability to history, it makes conservatism more problematic. The argument gets turned into a struggle for defining or perpetually having to redefine what we need to conserve. A more skeptical view of conservatism is that it lends itself to propaganda – in this case, a re-creation of the past that is repeated enough times to manipulate public opinion into believing it is true – marketing is proof that propaganda works. Nietzsche would be in perfect agreement with the notion that the past is a story told by the victors. I would in no way imply that liberals are immune from the criticism of propaganda. However, the criticism of liberals and propaganda is not from ‘conserving’ the past but generally from different directions.

The obsession with the past that needs conserving is what many philosophers call reactionary. That is, it sustains itself by trying to establish a ‘true’ understanding of the past. It must therefore react to every challenge to the ‘true’ understanding. If conservatism could establish a ‘true’ history, it would justify its existence, its essence or in philosophy, its origin (arche in Greek). This task is a bit like the myth of Sisyphus who had to eternally roll a stone up a hill only to have it roll down again. Conservatism, not unlike Christianity, depends in part on the monumental task of preserving or trying to establish an interpretation of the past. The struggle then in conservatism is a struggle for the ‘true’ and the proper.

In current philosophy there is much discussion about the ‘proper’ and its essential reciprocity to the ‘improper’. The proper is indentified with essence, origin, history, sacred, eternal and true. The improper is identified with accidental, contingent, insignificant, profane, finite and false. The truth claim as what is proper is not so much in question as how the dynamics of proper and improper depend on each other to be, to exist as what they are. Many philosophers, Hegel not the least, have exhaustively shown that the true could not even be thought without the errant, the not-true. In philosophy there is something called a tautology; something that is absolutely, necessarily true. For example, A = A is an identity and therefore a tautology. A proper identity in philosophy is always true and a tautology. However, the set of all not-As has just as much to do with A being A as the positive statement. Without the not-A, the A not only would not ‘exist’ but it could not even be thought. Likewise, in any hermeneutic of history a canon, a dominant narrative that gets established as ‘true’, must perpetually topple any counter narratives, any themes that oppose or contradict the dominant narrative. The very fact the task is continual shows that the counter themes are never extinguished completely. A symbiotic relationship exists in which both canon and not-canon must preserve each other in order to ‘be’, to even ‘be able’ for thought. So, the proper cannot do without the improper. The proper must, of necessity, sow the seeds of the improper. It must provide the themes for its destruction as it insists on its proper-ness. In the context of this essay, conservatism owes its existence to what it cannot and does not want to maintain – the nemesis of historical truth – hermeneutics (historical interpretation). Regular folks call this relativity or relativism.

Relativism as commonly thought means that tautology is impossible. However, to suggest that true is not true is utter nonsense. What gets conflated in the common notion of relativism is historical and moral uncertainty, viz. the play of hermeneutics, is tantamount to no absolute, no tautology, no truth. This is an unfortunate equivocation of the legitimate direction of ‘relativism’. Even Einstein, the father of modern relativity, was harshly criticized for overturning the absolute time and space of Newton. However, Einstein did not mean that all is falsity, or ambiguous mush. For Einstein there are ‘truths’ but they are relative to each other not to some absolute, metaphysical construct of time and space or ether. The tension here is one of habit. Up until Einstein, we had a historical tradition of understanding time and space as absolute. Our ‘common sense’ was a habitual and linguistically enforced ‘filter’ for making sense of ‘reality’. Anytime a habit is uprooted, whether it is personal or sociological, there is tension, the compulsion to adapt, the loss of a ‘past’ and the ‘thrown-ness’ toward an uncertain future. The future is shown in the need to reinterpret the past according to some new paradigm and therefore, the past itself shows an almost ‘movie-like’ projection screen whose projector has the lens of the future – the uncertainty of what will be taken into the showing of the past.

For Martin Heidegger, a contemporary philosopher, the uprooting of our previous historical constructs (historicity) was the very possibility for authenticity. In other words, the need for fundamental change, adaptation, reflection was anxiety. He called this being-toward-death. He wanted to identify my death, my end, and the anxiety it induces with the absolute requirement for the possibility of ‘truth’. He interpreted ‘truth’ as aletheia – unconcealedness or what shows itself as itself as distinguished from concealment. So, for Heidegger, the ‘truth’ of human being is in our capacity for being-towards-an-end.

Our truth is not gained from some apriori, metaphysical understanding of the ‘truth’ but from our ability to stand in the face of our end. In the context of this essay, this would mean not having to ‘conserve’ the past but living in the uncertainty of the past and our dogmatic notions of what its ‘truth’ really was. This is not to suggest that there was no truth as Einstein was not suggesting there wasn’t truth but to try to get us to think differently about what a ‘truth’ could be; not absolute time and space but space-time continuum.

In conclusion (please don’t applaud), I believe that the dilemma of conservatism does not necessarily have to be viewed as some kind of relative gaping void from the absence of truth. The alternative to conservatism is not relativistic mush and nihilism. Fundamental change is not necessarily bad and improper. It certainly creates anxiety in the openness of the question but the openness itself is what makes one young, engenders the notion of freedom, the possibility of change to something more authentic. What is more, it resists the heaviness of banality and empty repetition, the slow decay of the novel and passion. The transform that I alluded to with Heidegger is not to another movie for the projector but taking the step back to see the wonder of truth and its showing – and the ways that it continually thwarts our insistence on the ‘final’ showing. In my opinion, conservatism is an illusion that we sincerely feel like we need but carries an essential downside that must of necessity reappear – why not give up that Herculean struggle and just take a look around?

Addendum:

Let’s take a recent example:

Mitt recently stated, “The president says he wants to transform America, I don’t want to transform America into something else. I want to restore it.”

Let’s see, restore it to…

…the Bush administration
During the Bush administration two wars were started and the economy was bankrupted. The national debt increased twice as much as the current administration. During the Bush administration unemployment went up 77% more than during the Obama administration.

Bush administration increase in debt: 85%
Obama administration increase in debt: 43%
Bush administration increase in unemployment: 86%
Obama administration increase in unemployment: 9%
Transition Date: January 20, 2009

Note: The latest unemplyment rate is 8.5%.

http://www.bls.gov/news.release/empsit.nr0.htm

For more details see this:

http://www.mixermuse.com/blog/2012/01/06/all-you-need-to-know-about-politics-1-6-12-2/

Note: The debt numbers are a bit of a broad brush as it does not break down discretionary and non-discretionary parts of the budget and the contribution of each administration to both of these types of spending.

From the graph below you can see that the unemployment rate exploded just as President Obama got into office. I think this explosion arguably was not due to anything President Obama did in his first few months (just 4 months later the rate was 9.4%) as the national unemployment rate does not turn on the dime. Given this, the difference would be a 134% increase in unemployment during the Bush administration over the Obama administration.

Bush administration increase in unemployment: 124%
Obama administration decrease in unemployment: 10%
Transition Date: End of May, 2009

http://data.bls.gov/timeseries/lns14000000
Note: For some reason, you may have to do a couple refreshes on this link to show the graph.

Also, see:
http://www.mixermuse.com/blog/2012/01/11/the-great-recession-how-the-free-market-got-rigged/

…prior to Medicare and Medicaid?
“Before Medicare, only 51% of people aged 65 and older had health care coverage, and nearly 30% lived below the federal poverty level.”
http://www.usgovernmentbenefits.org/hd/index.php?t=define+medicare

…before women had the right to vote and blacks and gays were hung for entertainment?
http://en.wikipedia.org/wiki/Lynching_in_the_United_States

…before Social Security?
“the best estimates show that the elderly poverty rate in 1935 was probably somewhere in the range of 70 to 90 percent.”
http://www.politifact.com/truth-o-meter/statements/2010/aug/17/eddie-bernice-johnson/texas-congresswoman-eddie-bernice-johnson-says-soc/

…before the civil war
Slavery

…from the beginning
In 1800, the mean life span in the United States was about a quarter century
In 1900 the mean was about 50 years
http://www.longevity.ca/info_life_expectancy.htm

Do you REALLY want to go there?

The Republicans are painting a fantasy picture for voters that need to believe fantasies of the past – it NEVER happened. The fact is that we have progressed from a dark past albeit in a bumpy and messy way. It is absolute insanity to want to go back to the way it really was. There was no earlier, greater time than now for the United States. Yes, a few things may have been better but don’t let them fool you, things are better now than they have ever been for folks.

So, here is the question, do you want to transform our future or restore our past?