Trapped
Stephen M. Walt
Over the past twenty months, progressives, realists, and even some sensible conservatives have been disappointed by various aspects of the Obama administration's foreign and defense policy. Convinced that his election would mark a dramatic departure from the Bush administration's many missteps, they have been surprised and dismayed by Obama's increased reliance on drone attacks in Pakistan and elsewhere, his decisions to escalate the war in Afghanistan (not just once but twice), the retreat on Guantanamo, the Justice Department's use of dubious secrecy laws to shield torturers and deny victims the ability to sue them, the slow-motion reassessment of "Don't Ask, Don't Tell," the timid retreat from the lofty principles enunciated in his 2009 Cairo speech, and the unwillingness to consider anything more than trivial reductions in the bloated national security apparatus.
I share many of these concerns, but I don't really blame Obama. The buck may stop in the Oval Office, but it's not like he can simply wave a magic wand (or give another speech) and get the rest of the government to fall into line. Instead, the fact that U.S. foreign and defense policy hasn't changed very much reflects the powerful structural forces that inhibit any president's freedom of action. Or to put it more simply: he's trapped. Even if Obama wanted to chart a fundamentally different course (and I'm not at all sure that he does), he wouldn't be able to pull it off.
The first obstacle is America's current global position. Over the past sixty years, the United States built up a vast array of global military facilities, security partnerships, and overseas commitments. In the process, the United States ended up with the responsibility of providing a lot of collective goods (freedom of the seas, regional stability in Europe and Asia, security of global oil supplies, etc.) and it also ended up with a flock of client states who depend on us for various forms of economic, military, and diplomatic support.
These arrangements arose primarily due to the Cold War, but instead of dismantling them when the Cold War ended and returning to a more sensible and restrained grand strategy, the United States instead chose to expand its global responsibilities even further. This was partly because we didn't foresee any real opposition: as George H. W. Bush put it, we found ourselves "at the pinnacle of power, with the rarest opportunity to reshape the world." Hubris played a role too: U.S. leaders convinced themselves that we had the will and the skill to manage vast areas of the globe. Or as Secretary of State Madeleine Albright famously put it, the United States was the "indispensable nation" and that the U.S. "sees further than other countries into the future." And it was also because we thought that we could embed other countries into a set of rules and institutions that were largely of U.S. design. As Richard Haass, former director of policy planning and now president of the Council on Foreign Relations, declared in 2002, the goal was to integrate other countries "into arrangements that will sustain a world consistent with U.S. interests and values and thereby promote peace, prosperity, and justice."
So the United States expanded NATO deep into eastern Europe, adopted the foolish strategy of "dual containment" in the Persian Gulf, invaded Iraq in 2003 in a misguided attempt to transform the Middle East by force, and then got itself bogged down in a costly and ill-conceived effort at nation-building in Afghanistan. U.S. military forces remain deeply engaged on every continent, and as the Washington Post recently documented, the "war on terror" has led to a vast expansion in secret intelligence activities -- much of it conducted by a shadowy network of private contractors -- the scope of which is not even fully understood by the civilians who are allegedly in charge.
It is increasingly obvious that the United States has taken on a set of missions that it is not very good at, and that it cannot afford to continue without hollowing out its power here at home. It's also likely that some of these commitments are eventually going to go south (i.e., whenever we are propping up governments that lack popular support or that are pursuing policies that the rest of the world regards as wrong). The problem Obama faces, however, is that it would be neither easy nor cost-free to liquidate these commitments quickly. This is essentially a variation of the familiar "hegemon's dilemma": having occupied a position of primacy and taken on a vast array of global responsibilities, trying to disengage from them is like dismounting from a tiger. Once you begin to disengage, you may invite some short-term instability that actually makes things look worse. Moreover, any attempt to shift U.S. burdens onto others or to make significant cuts in our defense expenditures is bound to invite fierce opposition from the GOP, who would be quick to paint Obama as a cowardly or feckless appeaser. Instead of a long-overdue rethinking of U.S. strategy, therefore, we have a continuation of the status quo and an attempt to muddle through with our fingers firmly crossed.
The second impediment to change is the foreign policy establishment itself. As I've discussed before, the balance of political power inside Washington is heavily weighted towards the energetic use of American power -- and especially military power -- in virtually every corner of the world. Although think-tank denizens at Brookings, AEI, Heritage, and the Council on Foreign Relations sometimes disagree about specific policy initiatives, the vast majority are enthusiastic defenders of America's dominant global role. Hardly anyone at these institutions strays outside a rather narrow spectrum of thought, or questions the inherent legitimacy of the United States intervening just about anywhere it wants, even if the predictable results are the deaths of thousands of innocent civilians.
For the most part, debates within mainstream foreign policy circles run the gamut from A to B, from neoconservativism at one end and hawkish liberal interventionism at the other. As I said a few years ago, if neocons are essentially liberals on steroids, then most liberal internationalists are just kinder, gentler neocons. They agree on the virtues of American primacy, the need to prevent WMD from spreading (while keeping most of our own), the desirability of spreading democracy nearly everywhere, and the value of nearly all of the United States' current alliances. The only issue where neocons and liberals part company is the role of global institutions (neocons see them as dangerous constraints on U.S. autonomy, while liberals see them as useful supplements to American power). Given this basically bipartisan consensus, it is hardly surprising that most of the senior officials in Obama's foreign policy team were open supporters of the Iraq War, as well as steadfast believers in the United States right to intervene wherever and however it sees fit.
Ambitious foreign policy wonks understand that straying outside that comfortable consensus isn't going to advance their careers. That is why even sensible moderates have to polish their hawkish credentials if they want to be taken seriously, and even experienced pillars of the establishment are not immune from this same tendency. For example, the former president of the Council on Foreign Relations, Leslie Gelb, has admitted that he supported the Iraq War in 2003 in part to maintain his own bona fides within the establishment. In his words, "my initial support for the war [in Iraq] was symptomatic of unfortunate tendencies within the foreign policy community, namely the disposition and incentives to support wars to retain political and professional credibility" (emphasis added). And given that Gelb acted this way even though he was on the brink of retirement, you can imagine how more powerful this incentive is for someone starting out their career.
Finally, Obama clearly understands that the U.S. military has become a very powerful institution in American society, and that he doesn't have the personal background or clout to take them on directly. This situation helps us understand why he's gone slow on DADT, why he couldn't say no to their requests for more troops in Afghanistan, and why the Pentagon budget will continue to rise despite our massive budget woes.
In short, even if Barack Obama wanted to do many of the things that progressives might want, he would face enormous opposition from the uniformed services, the defense corporations who subsidize those conservative think tanks, the array of special interest groups pushing their own particular foreign policy projects, and the legion of hawkish pundits at Fox News, the Weekly Standard, and AM talk radio.
And let's not forget the true wing-nut elements in the American body politic. When both the secretary of Defense and our commanding general in Afghanistan have to waste precious time telling some obscure bigot in Florida that burning the Koran will put U.S. soldiers at greater risk, you know that the people who are allegedly running the country don't have much latitude to explore genuine alternatives.
In short, if you're disappointed that Barack Obama didn't live up to your expectations, you ought to go a bit easier on the poor guy. He can tinker at the margins, and he can probably resist the bad advice of those who'd like to get us into a few more wars (e.g., Iran), but he's not in a position to engineer a more thorough reassessment of our global strategy. Change will eventually come -- especially if the U.S. economy doesn't turn around and major deficits persist -- but it will be a slow and grinding process and an awful lot of money and more than a few lives will get wasted before we get there.
But don't lose hope entirely. As I often remind myself, it could have been a lot worse.
13.9.10
12.9.10
r we fcuk-ed?
Jeremy Horne, Ph.D.
Alamogordo, NM
"President Obama and the Democrats failed to seize the moment...". They didn't? Why am I not surprised? There are two major issues to ponder, here.
First is the very viability of the U.S. corporatist system, itself. Remember that Italian Fascism was a response to a collapsing capitalism; it was a "pragmatic" system that, even with a basic philosophy, was an experiment. Mussolini, himself, wrote that fascists must watch the "Roosevelt experiment" closely. A coherent argument can be made that what F.D.R. did, as necessary as it was, also was an fascist experiment, albeit with an American twist. Robert Gibbs hops about attempting to reach for the butterflies of employment and financial stability, but we should look at how rotten to the core is the corporatist platform on which he stands. U.S. corporatism no longer is sustainable, as it has exported its productive base in the form of outsourcing and has allowed parasitic wealth ("investments", speculation, "derivatives", and the like) to become the foundation of the value of negotiable instruments (including money). As the velocity of capital slows down, no productive engine can start up to generate wealth based on labor power. The house of cards now is collapsing, and a massive public works program, while critically necessary, will not save corporatism in the long run. We have to search for a political economic alternative that is more steady state, cooperatively based, and not dependent just on upon production. As a start, we need to return to the labor theory of value.
Second, people in the U.S. seem to be in a tunnel when it comes to political parties. In logic, we call it "false dilemma", a fallacy as old as the hills. You only can do A or do B. Both parties can look for solutions only within their narrow corporatist ideological (system of ideas not subject to question) framework. Of course, neither party can be expected to break out of the mold, offering nationalization of major industries and banks, socialization of medicine, massive public works projects even larger than those vetted by FDR, or major support for labor organizations and workers' democracy. Systems that remain viable are the ones that can adapt, and this one is not doing well; it is constricted by an ideology of corporatism just as severely as was the former U.S.S.R constricted with its version of communism. Until people start thinking critically and philosophically, at the same time getting educated, we will continue to rattle down the road that other degenerating empires have taken.
Andrew
Colesville, MD
The housing-financial crisis started in 2007 and is ongoing and the real reason has always been lack of investment outlets due to relative overproduction and overcapacity of utilization of means of production. Overproduction is due to lack of effective demand that was the result of stagnated wage levels for the past four decades. Stagnated wage levels created economic stagnation. In addition, the stagnated real economy discouraged investment in real or production economic sector and diverted funds or profits to the non-real or fictitious economy, namely the sector of monopoly finance capital, which manipulates money but does not produce real value for the economy, as we know it. Finance capitalists can mutually redistribute money capitals by changing hands among themselves. In this way, they do not hire workers to produce commodity, so they do not help workers create any value for the society. Unemployment keeps rising with no effective means to reverse the trend.
Because the finance capitalists pass over the labor power or the value creator, their “investment” is not constrained by lack of investment outlets in real economy. The monopoly finance capital makes a lot more money than the real sector. Their profits transferred from the production sector have skyrocketed and weighed in an ever-larger proportion of the G.D.P.
Money capital in the cash form rises to $1.8 trillion in the first quarter of 2010 for the production sector and that for the finance sector may be comparable if not larger. The unduly large combined amount of idled cash waiting for borrowers to take actions lowers down the interest rate. Savers suffer a great deal whereas borrowers including speculators on capital markets gain handsomely. The Federal Reserve has become an Automatic Transaction Machine for the finance capital, which can borrow at almost zero interest rate and turn around making an obscene fortune effortlessly. Under such a thriving way of making easy money, who is going to be interested in hiring workers for production given uncertain return for investment?
President Obama and the Democrats failed to seize the moment on the economy almost two years ago because of the formation of the axis of Geithner-Summers-Bernanke who represent Wall Street interests and care for the most part the perverse interests of monopoly finance capital. This evil axis, while issuing a license to steal to the finance capital, the country is paying the price for Obama, Democrats and Republican’s spinelessness.
The country is in a state of decline because the monopoly finance capital has usurped the power of the nation-state and governments.
Once the monopoly finance capital has grown to such a big size that their influences have been as large as to enable private nations inside a public nation-state, no regulation and reform will change their business-as- usual nature based on willful and instinctive capital accumulation that do great harm to society. The leopard cannot change his spots, no matter how daring one tries.
There are many reasons why we have to transform the monopoly economy into a public-owned people’s economy. The most important two of them are:
1. Modern-day industries such as petroleum do not serve the society as before; they actually serve the monopoly finance capital for most of their purposes. Industrial capital becomes subservient to the finance capital. Since the monopoly finance capital is the sole owner of the government and of the nation-state, the consumption market of people loses their control power of the economy out to the finance monopoly.
2. Capital and environmental calamity rescue and ecological sustainability are mutually antagonistic. Development of monopoly capitalism means unsustainable growth and any sustainable green energy development policy will be impossible under the for-private-profit system unless people concede major portion of their real income to the monopoly capital.
The current system is an obstacle to the progresses of the society and barrier to the production force. Its political design is so woefully out-of-date that reform alone is of no use to societal survival, because the economic infrastructure or the for-private-profit social relation of production is hopeless anathematic to the needs of people and nature.
We need a direct democratic system replacing the current inept faux democratic system to fight now seemingly unbeatable foe of nationalization.
Alamogordo, NM
"President Obama and the Democrats failed to seize the moment...". They didn't? Why am I not surprised? There are two major issues to ponder, here.
First is the very viability of the U.S. corporatist system, itself. Remember that Italian Fascism was a response to a collapsing capitalism; it was a "pragmatic" system that, even with a basic philosophy, was an experiment. Mussolini, himself, wrote that fascists must watch the "Roosevelt experiment" closely. A coherent argument can be made that what F.D.R. did, as necessary as it was, also was an fascist experiment, albeit with an American twist. Robert Gibbs hops about attempting to reach for the butterflies of employment and financial stability, but we should look at how rotten to the core is the corporatist platform on which he stands. U.S. corporatism no longer is sustainable, as it has exported its productive base in the form of outsourcing and has allowed parasitic wealth ("investments", speculation, "derivatives", and the like) to become the foundation of the value of negotiable instruments (including money). As the velocity of capital slows down, no productive engine can start up to generate wealth based on labor power. The house of cards now is collapsing, and a massive public works program, while critically necessary, will not save corporatism in the long run. We have to search for a political economic alternative that is more steady state, cooperatively based, and not dependent just on upon production. As a start, we need to return to the labor theory of value.
Second, people in the U.S. seem to be in a tunnel when it comes to political parties. In logic, we call it "false dilemma", a fallacy as old as the hills. You only can do A or do B. Both parties can look for solutions only within their narrow corporatist ideological (system of ideas not subject to question) framework. Of course, neither party can be expected to break out of the mold, offering nationalization of major industries and banks, socialization of medicine, massive public works projects even larger than those vetted by FDR, or major support for labor organizations and workers' democracy. Systems that remain viable are the ones that can adapt, and this one is not doing well; it is constricted by an ideology of corporatism just as severely as was the former U.S.S.R constricted with its version of communism. Until people start thinking critically and philosophically, at the same time getting educated, we will continue to rattle down the road that other degenerating empires have taken.
Andrew
Colesville, MD
The housing-financial crisis started in 2007 and is ongoing and the real reason has always been lack of investment outlets due to relative overproduction and overcapacity of utilization of means of production. Overproduction is due to lack of effective demand that was the result of stagnated wage levels for the past four decades. Stagnated wage levels created economic stagnation. In addition, the stagnated real economy discouraged investment in real or production economic sector and diverted funds or profits to the non-real or fictitious economy, namely the sector of monopoly finance capital, which manipulates money but does not produce real value for the economy, as we know it. Finance capitalists can mutually redistribute money capitals by changing hands among themselves. In this way, they do not hire workers to produce commodity, so they do not help workers create any value for the society. Unemployment keeps rising with no effective means to reverse the trend.
Because the finance capitalists pass over the labor power or the value creator, their “investment” is not constrained by lack of investment outlets in real economy. The monopoly finance capital makes a lot more money than the real sector. Their profits transferred from the production sector have skyrocketed and weighed in an ever-larger proportion of the G.D.P.
Money capital in the cash form rises to $1.8 trillion in the first quarter of 2010 for the production sector and that for the finance sector may be comparable if not larger. The unduly large combined amount of idled cash waiting for borrowers to take actions lowers down the interest rate. Savers suffer a great deal whereas borrowers including speculators on capital markets gain handsomely. The Federal Reserve has become an Automatic Transaction Machine for the finance capital, which can borrow at almost zero interest rate and turn around making an obscene fortune effortlessly. Under such a thriving way of making easy money, who is going to be interested in hiring workers for production given uncertain return for investment?
President Obama and the Democrats failed to seize the moment on the economy almost two years ago because of the formation of the axis of Geithner-Summers-Bernanke who represent Wall Street interests and care for the most part the perverse interests of monopoly finance capital. This evil axis, while issuing a license to steal to the finance capital, the country is paying the price for Obama, Democrats and Republican’s spinelessness.
The country is in a state of decline because the monopoly finance capital has usurped the power of the nation-state and governments.
Once the monopoly finance capital has grown to such a big size that their influences have been as large as to enable private nations inside a public nation-state, no regulation and reform will change their business-as- usual nature based on willful and instinctive capital accumulation that do great harm to society. The leopard cannot change his spots, no matter how daring one tries.
There are many reasons why we have to transform the monopoly economy into a public-owned people’s economy. The most important two of them are:
1. Modern-day industries such as petroleum do not serve the society as before; they actually serve the monopoly finance capital for most of their purposes. Industrial capital becomes subservient to the finance capital. Since the monopoly finance capital is the sole owner of the government and of the nation-state, the consumption market of people loses their control power of the economy out to the finance monopoly.
2. Capital and environmental calamity rescue and ecological sustainability are mutually antagonistic. Development of monopoly capitalism means unsustainable growth and any sustainable green energy development policy will be impossible under the for-private-profit system unless people concede major portion of their real income to the monopoly capital.
The current system is an obstacle to the progresses of the society and barrier to the production force. Its political design is so woefully out-of-date that reform alone is of no use to societal survival, because the economic infrastructure or the for-private-profit social relation of production is hopeless anathematic to the needs of people and nature.
We need a direct democratic system replacing the current inept faux democratic system to fight now seemingly unbeatable foe of nationalization.
Loosers: The Dems or Us?
Robert Henry Eller
Milan, Italy
'... whether “he understands the problems of people like you.”'
Apparently, not.
President Obama's one big mistake: He has never understood why people voted for him. And if he did understand why people had voted for him, he ignored it. He thought he knew better than his true constituents; He was, I hate to say, arrogant.
The people who voted for him did want him to change things, to save them. But as desperate as they were for bottom up help (health care reform, economic stimulus), what they truly wanted to see was top down change. In fact, they saw electing President Obama as the first evidence that they might get top down change. If they had seen real evidence that Obama, and the Democrats, were going to end business-as-usual, or at least fight tooth-and-nail to end business as usual, in Washington, on Wall Street, I believe the President's supporters would have kept faith. His supporters understood the depths of the problems, and how long it would take to solve them. Why else did he think they voted for him in the first place?
Obama's supporters understood that we'd gotten to where we were because of the ways things were done. We could not ameliorate the effects, and ignore the causes. The last thing the President should have been worrying about was bi-partisanship and reconciliation. He should have set out immediately to do his voters bidding. He should have left it to the Republicans themselves, to decide whether they wanted to be bi-partisan or conciliate. It is for the losers to sue for peace, not for the winners.
The corollary: He apparently never understood that the people who voted against him did not simply conclude that he was the second best choice. After eight years of Bush-Cheney-Rove and the Republicans, after Iraq, Afghanistan, Katrina, the economic and financial meltdown, anybody who would vote for McCain-Palin and the Republicans was not going to vote for Barack Hussein Obama under any circumstances, or against any other candidate, period. And they were not going to give him the benefit of the doubt if he was elected, by any majority however clear.
President Obama never understood that his election was only the first battle, fortunately and expensively won, at the beginning of a war. It was not the battle that ended the war. But that is how he apparently saw it, as the end of the war. Why else would he have allowed the DNC and Rahm Emanuel to co-opt, de-claw and de-fang his peerless and unprecedented grass roots campaign legions?
Obama's supporters were, largely, equally adamant that, after the primaries, he was not the better choice. He was the only choice. The President, the leader, ironically never understood, or felt, what his troops, knew: They were at war.
I myself did not contribute every dollar I could spare, and more than I could afford, just because I thought Obama would make a better President than McCain. I gave as though my country was at war. McCain and the Republicans were not just incompetent, not just a disaster. They were indeed the enemy.
The only possible way President Obama, and the Democrats, might now recover, starting today, and assuming he can recognize, and acknowledge, these strategic mistakes, is to convince the people who supported him that he understands he was wrong and why. He could fire Summers and Geitner. He could encourage Emanuel to run for Mayor of Chicago. He could empower Elizabeth Warren. He could attack the Republicans as he should. He could get the Attorney General to start investigating Cheney. He could become a real war President, in the only war the US is currently fighting whose outcome matters for America: the war the army of his voters thought he was leading us to fight.
I know I'm probably just dreaming. But this is the dream the majority of us had almost two years ago this November. The dream we thought had come true. And it's still the only dream I'm willing to fight for. If President Obama can convince enough of us that he believes in this dream, that he will fight for this dream, then perhaps he can regain the support of those of us who once thought he understood us.
Fred Drumlevitch
Tucson, Arizona
This November, I will hold my nose and vote for all Democrats --- not because they deserve my vote, but simply because the alternative is so much worse, an incoherent mob of apologists for personal selfishness and the rich manipulators who, despite their "patriotic" camouflage, are actually working against the greater interests of the nation.
The Democratic Party as a whole, and most Democratic politicians as individuals, should be embarrassed by the way in which they have in so many policy matters managed to snatch defeat from the jaws of victory. They were elected in a time of crisis to pass and implement bold transformative measures, to be done in the spirit of Great Depression progressivism. They haven't delivered even one-tenth of what they should have. It will be up to historians to definitively determine whether that was due to political inexperience, wishful thinking, a deficit of courage, incompetence, or the corrupting influence of campaign donations. Most likely, it was all of the above, and more.
I will hold my nose as I vote for Democrats this election cycle, and give them one more chance to redeem themselves. If no significant improvement in Democratic policy stands occurs during the next two years, in 2012 I will support a new progressive party that is bound to emerge from the probable ashes of the current Democratic one.
Marie Burns
Fort Myers, Florida
Yes to all that. But there are other shadows hanging over the President, shadows of his own making. One is Afghanistan. Another is the President's continuation of Bush secrecy policies & his massive cover-up of Bush Administration wrongdoing. He won a big one in court on the latter this week.
An actual liberal, like me, wants to see Obama come out strongly for returning Americans to work & protecting all of us from special interests. So of course if he follows your playscript, I'll be glad of it. But I'm not sure how much Obama's saying the right -- and obvious -- thing on socioeconomic issues would drive up my enthusiasm quotient. I still know there are Americans & Afghans dying for Hamid Karzai.
Maybe that doesn't matter. I'm going to vote, & Republican obstructionists have forced me to vote Democratic all the way, even when the Democrat might not be the better candidate. A Floridian, I haven't made up my mind yet on Meek-Crist as to who is the better candidate, but be assured Kendrick Meek, the Democrat, has my vote. He can thank Mitch McConnell for that.
It's the independents Obama must reach. Everyone, including me, calls them independents, but that's really a nice name for clueless & distracted. President Obama can certainly see to it that they forget all about the war & secret renditions & Bush's bad boys. He just has to Keep It Simple, Stupid, when he explains that he cares about Middle America's future & John Boehner & Mitch McConnell only care about their own.
The Constant Weader at www.RealityChex.com
Sheri
TN
Not in a million years would I thought I'd utter the following phrase, but NOW is the time for Americans to "stay the course."
Obama will NOT be able to right thirty-year-old wrongs even as a two-term president; no one could. I voted for him not because I thought he was a miracle worker, but because I was confident in the groundwork he promised - and I still am.
Come on, liberals, enough with the "this isn't the change I voted for" whining. What you voted for was a corrective, and it has been presented, and well. The fruits of it are yet to come, but they won't do so if all you do is complain. Obama can't do it alone, nor should he.
So, liberals, GET UP, GO OUT, AND HELP IN WHATEVER WAY YOU CAN - because that is where the hope and change will come from: us.
Barbara Taylor
Charlotte, NC
Yes, it's long past time for Obama to clear up the confusion as to which side he is on.
FDR, he isn't. But maybe he can redeem himself as something less than another corporate-politician-for-hire if he keeps up the tough rhetoric but backs it up with action. Talk is cheap. We don't care what he says or even thinks, because we believed in that in 2008 and look what it got us. The only thing that will get us behind him again is action, tough action with real leadership in getting things done.
If he sits in the background and delegates everything to Pelosi and Reid while it falls apart, whines, and says it's hard, like he did with health care and other initiatives, we'll give up on him. But if he really tries and fails to move a more middle-class oriented agenda in the face of Republican obstructionism, we'll stay with him as long as he fights the good fight.
Tim Kane
Mesa, Arizona
Obama can't credibly speak out on behalf of the middle class at this late date, if ever, to minimize the outcome of the coming elections.
The fact is, we've all noticed Obama's considerable talents. The fact is, he's only exercised them with vigor when his own employment scenario was in question.
We all expected Obama to co-opt FDR. The Republican Party hasn't changed in over 80 years and the current depression was born on the backs of the same Republican party, exercising policies that caused the same problem, concentration of wealth, leading to the same outcome then and now. It's all the same, except the script was already laid out, thankfully, by Roosevelt.
The fact is, after Obama won the election, with his OWN EMPLOYMENT SECURED, he was happy to 'phone it in' for 'half loaf' measures. Specifically: he (easily) foresee-ably accepted a stimulus that was inadequate, by at least a third, and was happy to throw public option under the bus (after talking Democrats into trading down to it from single payer).
In short Obama's lack of vigor on behalf of the middle class is the biggest political disappointment since the Supreme Court appointed George Bush president.
About keeping his job, it is painfully obvious, Obama cares. About helping the middle class, Obama can't get invigorated.
What is motivating Obama now is the threat of a Republican congress, with subpoena power, plus the power to impeach. In that light, Obama's belated, most craven populism, is a gross and rank embarrassment.
Obama reminds me of a high school wannabe - from an ordinary background, but who wants to be in with the cool kids, or in his case, the BigMoney elite types. As a result he's been friendly to their asperations, in many cases surrendering to them, only to find out that he'll never be accepted. I'm sure the rejection stings.
So, it's back to the green that he's come from. Ordinarily, we would reject him for a true advocate. But now, we are desperate and we have two more years before we can exercise any choice at all - so we are stuck with him for the indefinite future.
Obama, therefore, has an opportunity to earn his way into the favor of the middle class. But it will take two years of intense advocacy on behalf of the populism and middle class for it to look believable and that he means it.
More likely, two weeks after the coming election, come what may, Obama will go back to half loaves and to phoning it in.
The Obama administration is the biggest public disappointment I've ever experienced in my entire, half century'd, life - and by an enormous margin.
I expected George Bush to be a massive catastrophe, and he lived up to that. I'm not sure which is the bigger catastrophe: the failure of the Bush administration or the failure of the Obama administration to reverse course.
One thing is certain, if our political system is incapable of solving our growing list of catastrophic problems, because our richest citizens and our elites won't allow for it, this nation will collapse at a rate that will stun the entire world.
It is also a tragedy that we have a wealthy upper class that is willing to trash the nation. Not just willing, but willing to pay massive amounts of money, build giant media empires, endow rogue religions and preachers, to see that its done.
In normal times Obama would be a decent president. These aren't normal times.
In these times, Obama is merely inadequate.
Beguiling considering the talent he's demonstrated in the past.
Cdr. John Newlin
Vista, Calif.
Another very revealing statistic that the President might put in his quiver is the chart featured on Friday's Rachel Maddow show. That chart showed income growth rates from 1948 to 2005 with a vertical axis of percentile income and a horizontal axis of income growth rates. The growth rates under Republican Presidents and Democratic presidents were displayed by red and blue bars respectively. The chart dramatically shows that in every Republican presidency, income growth rate was significantly less than in yeas of Democratic presidencies. The president ought to haul out that chart everywhere he goes. It's a real windjammer to the breadbasket of supply side Republicans.
Another chart that ought to be jammed down the Plutocrat's throats is the pie chart that depicts the amount of income growth for various groups over the period from 1979 to 2007. This chart shows that the growth for the top 10% of income earners was a wopping 63.7%! How did the bottom 90% do over the same period? A pathetic 36.3%. As Edith Ann was wont to say, "And that's the truth."
Jake Wagner
Santa Barbara, CA
Perhaps no more telling indictment of Obama's priorities is revealed in the choices his Justice Department has made in which legal cases to prosecute.
We witnessed a CEO Richard Fuld of Lehman Brothers walking away with compensation of about a half billion dollars in the decade leading up to the bankruptcy of his company. One of the architects of the exotic CDO's that helped wipe out trillions of US wealth, he systematically misled the stockholders of his company and government regulators about the economic health of his company. It is still not clear what his role was in the infamous Repo 105 accounting gimmicks, but here there is at least the appearance of systematic criminal fraud.
Yet Richard Fuld has yet to be indicted for any criminal activity.
Instead, Obama's Justice Department goes after an admittedly flawed attempt by Arizona's government to deal with one of the federal government's failures, the inability to enforce US border laws regarding immigration. It has been estimated that US population growth of .9% per year during the past decade is largely attributable to illegal immigration and the higher fertility of illegal immigrants who gain access to US welfare benefits through their children, who automatically become US citizens.
That population growth has added 28 million new US residents in the last decade or 230,000 new residents each month. Compare that with the number of new jobs the US economy is producing each month!
Consider the message Obama sends to the unskilled or semiskilled workers who might make up a substantial portion of his base: "I won't prosecute the Wall Street titans that defrauded your pension funds, but I will do everything in my power to block efforts of a governor to enforce the federal immigration laws that should protect your jobs." Then you can perhaps understand why so many of the unwashed working class gravitate to something other than Obama.
Todd Fox
Connecticut
The other night at a country fair I spoke with a woman who had just lost her job with the town. She said "I'll just get another one—when I'm ready." After looking myself, for nearly two years, I wondered if this would be easier said than done—especially since we are both women "of a certain age". (Actually I think we might be well past that rather nebulous age.) She said "Oh, I've already been offered a job, but I turned it down. The benefits weren't as good as the ones I had. So why should I take it when I have 99 weeks of unemployment coming to me?" Coming to me. That's how she viewed it—not as a handout but as something coming to her.
Then there are people like my husband—a hero as far as I'm concerned. He's working for 1/3 of his former salary, and still putting in the exact same effort—out of a sense of responsibility to "get the job done" and a strong work ethic.
The Democrats would have us believe that everyone who is taking "extended unemployment" benefits is in dire straits and desperately looking for a job—any job. The Republicans would have us believe that they are all free-loaders. Somewhere between the two lies the truth.
I think that's the problem: the truth lies in between the politics and the politicians. The Republicans would have us believe that the founding fathers are rolling in their graves and that the Democrats are know-nothing commie bastids. The Democrats describe the tea-party as uneducated "old people" who are under a spell woven by FOX. Both sides do not listen to one another—even though there is truth and wisdom coming from the sane people in either party.
Obama campaigned as someone who could bring us all back together, but sadly, he's playing the divisiveness game as much as all the others. If there is ONE thing I wish I would see him do, it would be to stop the divisiveness, stop the class warfare, stop the inflammatory rhetoric about the wealthy, and stop blaming his predecessor.
Tell us what YOU can do now, Mr. Obama. Please, please set an example of compassionate listening and understanding. In short—lead.
Andrew
Colesville, MD
I do not think Obama can emulate F.D.R.
His political environment is worse than F.D.R’s. The capitalist class has entered its zenith of bourgeois power dictatorship over the working people for the past three decades. They have easily quelled any nascent political progressiveness, let alone shifting away from far rightist policies. Weak working class power gives rise to weak policy changing possibility. This is why Obama gave up meaningful changes for people’s betterment for more than one and half years since he took the office of presidency.
As Wall Street has claimed supreme politico-economic power of the capitalist orders, even smidgen trivial matters have to get Wall Street’s approval. People have severely criticized the Wall Street axis of Greithner-Summers-Bernanke for malfeasance and have requested Obama to break up the axis and dismiss them but Obama refused to do so for the power that hijacked the government is Wall Street or the monopoly finance capital.
F.D.R came from a wealthy aristocratic family and he had no need to be avid of the capitalists’ rightist favor for money and connections. He could afford to declare that he welcomed the “hatred” of his enemies in the realms of “business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.” Obama’s family origin is completely different. His family was of moderate means. His official career and personal advancement have usually under the rich capitalists thumb. F.D.R could not careless about of the hatred of his enemies but Obama cannot afford to neglect the hatred of his. Because, in such a deeply commodified society, even the highest officer in the country has to obey rules of selling and buying, wheeling and dealing, set up by the top-drawers to whom one would have to be much obliged, especially if one is timorous and giddily tending to blandish those on top of social and official ladders.
The U.S. electoral democratic system has shown its fatal drawbacks from the Reagan era to the present. Democracy has become timocracy that the electorates are so timorous and bereft after losing control that they literally hold power for only one day annually and give the rest to capitalists who wield power for them all year round. The grass-root movement to elect a president for change actually elected Wall Street for non-change.
The representative democracy has failed. The struggle for an utterly new direct democratic system bypassing the capitalist plutocracy power route will transform the political system from timocracy or plutocracy to people’s democracy.
chaotician
New Mexico
Andrew Carnegie is famous for picking Good Men to do the work which made him wealthy; his job he said was to make this men work together for achieving the goals of each of them so that all were successful! Barry has failed very badly in picking men and women! He has surrounded himself with Clinton retreads; and retained many of George's selections in some mistaken notion that doing so would get some support from the Republicans! Well, his choices of Summers and Geithner have been abysmal failures, his choice for Homeland insecurity the worse pick possible, and his choices for Interior, Environment, and most of the rest are poor at best; Of course, he has had to put up with the party of No; but a daily barrage of publicity on the appointments not getting done would have sent the cowardly Republicans back in their holes! That is one of the deepest disappointments; letting the Senate be a place where things are prevented from happening; and the Democrats have all the blame for allowing this to continue because these corrupted men and women would rather keep their exalted privileges, their "royal" prerogatives, their arcane rules, their bribes and kickbacks than do what is necessary to govern the country! Well, the Republicans have been successful; they have prevented the nation's business to be done; they have allowed a minority of the Senators to block votes, block appointments, block and water down needed actions; they have made a mockery of the people's votes to make change and they will pay the price! They will be held responsible for the coming disaster of the Republican resurgence; they will be the cowards which allowed the reactionary corporate Fascist, the reactionary Christian Right thugs, the discredited economic actions, the impoverishing trade policies, the ruinous, stupid foreign wars, and the insidious attacks on the social policies supporting our nation to continue! When the guillotines are brought forth after the coming years of economic slavery; may their heads be the first to go!
ed connor
camp springs, md
Yes, thge top 1% earn 21% of all income. They also pay 42% of all income taxes.
The bottom 47% pay NO income taxes.
Most mothers now give birth without fathers in the home. Nearly 50% of urban high school students drop out before graduation. The U.S. has slipped from first to 16th internationally in rates of college matriculation. Most foreclosures are made upon homeowners who took out "interest free" loans and never had any equity in the foreclosed properties. There are 12 million illegal residents in the U.S. who are unskilled and uneducated, and who are stressing local health care and education recources to the limit.
Did I mention that 90% of Americans ARE employed and housed?
Why you continue to blame the people who studied hard, paid off their college loans, worked their way up through their professions, and finally reached their peak earning years, befuddles me.
If you repeal the Bush tax cuts for only incomes over $250 K but maintain the cuts under that income level, you will only reduce the net revenue loss by 25%. There are only so many "rich" people to soak. Once soaked, we will retire, stop hiring and go away.
Who will you blame for your misfortunes then?
kathleenkatalina
Massachusetts
Americans get their news from multi-millionaires....Wolf, Charlie, Rush. None of the talking heads make less than 1/4 million a year, and none of them think they are rich.
Oprah, Warren Buffet, that Russian guy, they're rich. The talking heads are just middle class folks who make 5 or 6 million a year. And they have been baling up the Benjamins for the last ten years of tax cuts. Millions. Follow the money.
TV news, including MSNBC, keeps telling us that Obama is going to raise our taxes, but they really mean he is going to raise theirs.
The country is broke because of lies and incompetence, and all patriotic Americans need to sacrifice.
Just as the sons and daughters of the real middle class sacrificed when they volunteered for duty when Bush invaded the wrong country. The comfortable class has benefitted from our capitalist democracy, and they have not had to sacrifice. They have paid high taxes, but it has not hurt. Not the way it hurts the people I know.
They stand in line waiting to buy a few items. They dont use shopping carts. And after they add up to see if they have enough money , they are hit with a sales tax. On food. On the clothes and books the kids need. On gas.
My sister is 58, worked every day of her life, even during college, and she predicts that she will finally be out of debt in October. Then she can start saving for retirement. She had one child, not a dozen. And a husband.
Some people who are very well off have worked very hard, but so has every poor person. The rich have been lucky, and they need to stop being so selfish.
My favorite president needs to shame them into making the sacrifice.
If President Obama announced tomorrow that he was not going to stop their tax breaks, he would all of a sudden be very very popular. Follow the money...
Sandy Lewis
Lewis Family Farm, Essex, New York
FDR's predicament was different. FDR had not hired Bob Rubin, or Sidney Weinberg, for that matter, nor had he put Steve Rattner, arguably a criminal not charged by his administration, in charge of Detroit, only to remove him when news of his previous life emerged.
As and when news of Bob Rubin's previous life emerges, will the president remove his team?
Geithner was not smart enough to work at Goldman, Sachs, but he did the next best thing for one who would like to work there: he followed Goldman's line and worked to please Goldman, 24-7. There is no difference between Hank's team and Geithner's team, save one: Hank got the guys he wanted, and Tim Geithner can get no one to come.
Smart, honest guys do not want to work for Rubin in absentia. With Valerie Jarrett running things from behind the Oval Office, we have Larry and Tim and Valerie as the triumvirate under Caesar. And Bob Rubin is tight with Valerie, believe it. I got that from on high.
Hence, this Obama administration is really Rubin & Company. That's what we have here. Which wold work if they knew how to shoot straight.
No, it's late in the game to play the FDR 1936 Card. Save that one for 2012, when all the cards needed will have to be played.
For now, it would do to "out" them that caused it - and let the people know you know. The problem, Frank, among others - people think he doesn't get it.
And to date, it's clear the President Obama does not really, really get it. He's surrounded.
And those who have surrounded President Obama have the best insurance policy in the world in President Obama.
If the ---- hits he fan, big time, who will explain why He hired Them?
Milan, Italy
'... whether “he understands the problems of people like you.”'
Apparently, not.
President Obama's one big mistake: He has never understood why people voted for him. And if he did understand why people had voted for him, he ignored it. He thought he knew better than his true constituents; He was, I hate to say, arrogant.
The people who voted for him did want him to change things, to save them. But as desperate as they were for bottom up help (health care reform, economic stimulus), what they truly wanted to see was top down change. In fact, they saw electing President Obama as the first evidence that they might get top down change. If they had seen real evidence that Obama, and the Democrats, were going to end business-as-usual, or at least fight tooth-and-nail to end business as usual, in Washington, on Wall Street, I believe the President's supporters would have kept faith. His supporters understood the depths of the problems, and how long it would take to solve them. Why else did he think they voted for him in the first place?
Obama's supporters understood that we'd gotten to where we were because of the ways things were done. We could not ameliorate the effects, and ignore the causes. The last thing the President should have been worrying about was bi-partisanship and reconciliation. He should have set out immediately to do his voters bidding. He should have left it to the Republicans themselves, to decide whether they wanted to be bi-partisan or conciliate. It is for the losers to sue for peace, not for the winners.
The corollary: He apparently never understood that the people who voted against him did not simply conclude that he was the second best choice. After eight years of Bush-Cheney-Rove and the Republicans, after Iraq, Afghanistan, Katrina, the economic and financial meltdown, anybody who would vote for McCain-Palin and the Republicans was not going to vote for Barack Hussein Obama under any circumstances, or against any other candidate, period. And they were not going to give him the benefit of the doubt if he was elected, by any majority however clear.
President Obama never understood that his election was only the first battle, fortunately and expensively won, at the beginning of a war. It was not the battle that ended the war. But that is how he apparently saw it, as the end of the war. Why else would he have allowed the DNC and Rahm Emanuel to co-opt, de-claw and de-fang his peerless and unprecedented grass roots campaign legions?
Obama's supporters were, largely, equally adamant that, after the primaries, he was not the better choice. He was the only choice. The President, the leader, ironically never understood, or felt, what his troops, knew: They were at war.
I myself did not contribute every dollar I could spare, and more than I could afford, just because I thought Obama would make a better President than McCain. I gave as though my country was at war. McCain and the Republicans were not just incompetent, not just a disaster. They were indeed the enemy.
The only possible way President Obama, and the Democrats, might now recover, starting today, and assuming he can recognize, and acknowledge, these strategic mistakes, is to convince the people who supported him that he understands he was wrong and why. He could fire Summers and Geitner. He could encourage Emanuel to run for Mayor of Chicago. He could empower Elizabeth Warren. He could attack the Republicans as he should. He could get the Attorney General to start investigating Cheney. He could become a real war President, in the only war the US is currently fighting whose outcome matters for America: the war the army of his voters thought he was leading us to fight.
I know I'm probably just dreaming. But this is the dream the majority of us had almost two years ago this November. The dream we thought had come true. And it's still the only dream I'm willing to fight for. If President Obama can convince enough of us that he believes in this dream, that he will fight for this dream, then perhaps he can regain the support of those of us who once thought he understood us.
Fred Drumlevitch
Tucson, Arizona
This November, I will hold my nose and vote for all Democrats --- not because they deserve my vote, but simply because the alternative is so much worse, an incoherent mob of apologists for personal selfishness and the rich manipulators who, despite their "patriotic" camouflage, are actually working against the greater interests of the nation.
The Democratic Party as a whole, and most Democratic politicians as individuals, should be embarrassed by the way in which they have in so many policy matters managed to snatch defeat from the jaws of victory. They were elected in a time of crisis to pass and implement bold transformative measures, to be done in the spirit of Great Depression progressivism. They haven't delivered even one-tenth of what they should have. It will be up to historians to definitively determine whether that was due to political inexperience, wishful thinking, a deficit of courage, incompetence, or the corrupting influence of campaign donations. Most likely, it was all of the above, and more.
I will hold my nose as I vote for Democrats this election cycle, and give them one more chance to redeem themselves. If no significant improvement in Democratic policy stands occurs during the next two years, in 2012 I will support a new progressive party that is bound to emerge from the probable ashes of the current Democratic one.
Marie Burns
Fort Myers, Florida
Yes to all that. But there are other shadows hanging over the President, shadows of his own making. One is Afghanistan. Another is the President's continuation of Bush secrecy policies & his massive cover-up of Bush Administration wrongdoing. He won a big one in court on the latter this week.
An actual liberal, like me, wants to see Obama come out strongly for returning Americans to work & protecting all of us from special interests. So of course if he follows your playscript, I'll be glad of it. But I'm not sure how much Obama's saying the right -- and obvious -- thing on socioeconomic issues would drive up my enthusiasm quotient. I still know there are Americans & Afghans dying for Hamid Karzai.
Maybe that doesn't matter. I'm going to vote, & Republican obstructionists have forced me to vote Democratic all the way, even when the Democrat might not be the better candidate. A Floridian, I haven't made up my mind yet on Meek-Crist as to who is the better candidate, but be assured Kendrick Meek, the Democrat, has my vote. He can thank Mitch McConnell for that.
It's the independents Obama must reach. Everyone, including me, calls them independents, but that's really a nice name for clueless & distracted. President Obama can certainly see to it that they forget all about the war & secret renditions & Bush's bad boys. He just has to Keep It Simple, Stupid, when he explains that he cares about Middle America's future & John Boehner & Mitch McConnell only care about their own.
The Constant Weader at www.RealityChex.com
Sheri
TN
Not in a million years would I thought I'd utter the following phrase, but NOW is the time for Americans to "stay the course."
Obama will NOT be able to right thirty-year-old wrongs even as a two-term president; no one could. I voted for him not because I thought he was a miracle worker, but because I was confident in the groundwork he promised - and I still am.
Come on, liberals, enough with the "this isn't the change I voted for" whining. What you voted for was a corrective, and it has been presented, and well. The fruits of it are yet to come, but they won't do so if all you do is complain. Obama can't do it alone, nor should he.
So, liberals, GET UP, GO OUT, AND HELP IN WHATEVER WAY YOU CAN - because that is where the hope and change will come from: us.
Barbara Taylor
Charlotte, NC
Yes, it's long past time for Obama to clear up the confusion as to which side he is on.
FDR, he isn't. But maybe he can redeem himself as something less than another corporate-politician-for-hire if he keeps up the tough rhetoric but backs it up with action. Talk is cheap. We don't care what he says or even thinks, because we believed in that in 2008 and look what it got us. The only thing that will get us behind him again is action, tough action with real leadership in getting things done.
If he sits in the background and delegates everything to Pelosi and Reid while it falls apart, whines, and says it's hard, like he did with health care and other initiatives, we'll give up on him. But if he really tries and fails to move a more middle-class oriented agenda in the face of Republican obstructionism, we'll stay with him as long as he fights the good fight.
Tim Kane
Mesa, Arizona
Obama can't credibly speak out on behalf of the middle class at this late date, if ever, to minimize the outcome of the coming elections.
The fact is, we've all noticed Obama's considerable talents. The fact is, he's only exercised them with vigor when his own employment scenario was in question.
We all expected Obama to co-opt FDR. The Republican Party hasn't changed in over 80 years and the current depression was born on the backs of the same Republican party, exercising policies that caused the same problem, concentration of wealth, leading to the same outcome then and now. It's all the same, except the script was already laid out, thankfully, by Roosevelt.
The fact is, after Obama won the election, with his OWN EMPLOYMENT SECURED, he was happy to 'phone it in' for 'half loaf' measures. Specifically: he (easily) foresee-ably accepted a stimulus that was inadequate, by at least a third, and was happy to throw public option under the bus (after talking Democrats into trading down to it from single payer).
In short Obama's lack of vigor on behalf of the middle class is the biggest political disappointment since the Supreme Court appointed George Bush president.
About keeping his job, it is painfully obvious, Obama cares. About helping the middle class, Obama can't get invigorated.
What is motivating Obama now is the threat of a Republican congress, with subpoena power, plus the power to impeach. In that light, Obama's belated, most craven populism, is a gross and rank embarrassment.
Obama reminds me of a high school wannabe - from an ordinary background, but who wants to be in with the cool kids, or in his case, the BigMoney elite types. As a result he's been friendly to their asperations, in many cases surrendering to them, only to find out that he'll never be accepted. I'm sure the rejection stings.
So, it's back to the green that he's come from. Ordinarily, we would reject him for a true advocate. But now, we are desperate and we have two more years before we can exercise any choice at all - so we are stuck with him for the indefinite future.
Obama, therefore, has an opportunity to earn his way into the favor of the middle class. But it will take two years of intense advocacy on behalf of the populism and middle class for it to look believable and that he means it.
More likely, two weeks after the coming election, come what may, Obama will go back to half loaves and to phoning it in.
The Obama administration is the biggest public disappointment I've ever experienced in my entire, half century'd, life - and by an enormous margin.
I expected George Bush to be a massive catastrophe, and he lived up to that. I'm not sure which is the bigger catastrophe: the failure of the Bush administration or the failure of the Obama administration to reverse course.
One thing is certain, if our political system is incapable of solving our growing list of catastrophic problems, because our richest citizens and our elites won't allow for it, this nation will collapse at a rate that will stun the entire world.
It is also a tragedy that we have a wealthy upper class that is willing to trash the nation. Not just willing, but willing to pay massive amounts of money, build giant media empires, endow rogue religions and preachers, to see that its done.
In normal times Obama would be a decent president. These aren't normal times.
In these times, Obama is merely inadequate.
Beguiling considering the talent he's demonstrated in the past.
Cdr. John Newlin
Vista, Calif.
Another very revealing statistic that the President might put in his quiver is the chart featured on Friday's Rachel Maddow show. That chart showed income growth rates from 1948 to 2005 with a vertical axis of percentile income and a horizontal axis of income growth rates. The growth rates under Republican Presidents and Democratic presidents were displayed by red and blue bars respectively. The chart dramatically shows that in every Republican presidency, income growth rate was significantly less than in yeas of Democratic presidencies. The president ought to haul out that chart everywhere he goes. It's a real windjammer to the breadbasket of supply side Republicans.
Another chart that ought to be jammed down the Plutocrat's throats is the pie chart that depicts the amount of income growth for various groups over the period from 1979 to 2007. This chart shows that the growth for the top 10% of income earners was a wopping 63.7%! How did the bottom 90% do over the same period? A pathetic 36.3%. As Edith Ann was wont to say, "And that's the truth."
Jake Wagner
Santa Barbara, CA
Perhaps no more telling indictment of Obama's priorities is revealed in the choices his Justice Department has made in which legal cases to prosecute.
We witnessed a CEO Richard Fuld of Lehman Brothers walking away with compensation of about a half billion dollars in the decade leading up to the bankruptcy of his company. One of the architects of the exotic CDO's that helped wipe out trillions of US wealth, he systematically misled the stockholders of his company and government regulators about the economic health of his company. It is still not clear what his role was in the infamous Repo 105 accounting gimmicks, but here there is at least the appearance of systematic criminal fraud.
Yet Richard Fuld has yet to be indicted for any criminal activity.
Instead, Obama's Justice Department goes after an admittedly flawed attempt by Arizona's government to deal with one of the federal government's failures, the inability to enforce US border laws regarding immigration. It has been estimated that US population growth of .9% per year during the past decade is largely attributable to illegal immigration and the higher fertility of illegal immigrants who gain access to US welfare benefits through their children, who automatically become US citizens.
That population growth has added 28 million new US residents in the last decade or 230,000 new residents each month. Compare that with the number of new jobs the US economy is producing each month!
Consider the message Obama sends to the unskilled or semiskilled workers who might make up a substantial portion of his base: "I won't prosecute the Wall Street titans that defrauded your pension funds, but I will do everything in my power to block efforts of a governor to enforce the federal immigration laws that should protect your jobs." Then you can perhaps understand why so many of the unwashed working class gravitate to something other than Obama.
Todd Fox
Connecticut
The other night at a country fair I spoke with a woman who had just lost her job with the town. She said "I'll just get another one—when I'm ready." After looking myself, for nearly two years, I wondered if this would be easier said than done—especially since we are both women "of a certain age". (Actually I think we might be well past that rather nebulous age.) She said "Oh, I've already been offered a job, but I turned it down. The benefits weren't as good as the ones I had. So why should I take it when I have 99 weeks of unemployment coming to me?" Coming to me. That's how she viewed it—not as a handout but as something coming to her.
Then there are people like my husband—a hero as far as I'm concerned. He's working for 1/3 of his former salary, and still putting in the exact same effort—out of a sense of responsibility to "get the job done" and a strong work ethic.
The Democrats would have us believe that everyone who is taking "extended unemployment" benefits is in dire straits and desperately looking for a job—any job. The Republicans would have us believe that they are all free-loaders. Somewhere between the two lies the truth.
I think that's the problem: the truth lies in between the politics and the politicians. The Republicans would have us believe that the founding fathers are rolling in their graves and that the Democrats are know-nothing commie bastids. The Democrats describe the tea-party as uneducated "old people" who are under a spell woven by FOX. Both sides do not listen to one another—even though there is truth and wisdom coming from the sane people in either party.
Obama campaigned as someone who could bring us all back together, but sadly, he's playing the divisiveness game as much as all the others. If there is ONE thing I wish I would see him do, it would be to stop the divisiveness, stop the class warfare, stop the inflammatory rhetoric about the wealthy, and stop blaming his predecessor.
Tell us what YOU can do now, Mr. Obama. Please, please set an example of compassionate listening and understanding. In short—lead.
Andrew
Colesville, MD
I do not think Obama can emulate F.D.R.
His political environment is worse than F.D.R’s. The capitalist class has entered its zenith of bourgeois power dictatorship over the working people for the past three decades. They have easily quelled any nascent political progressiveness, let alone shifting away from far rightist policies. Weak working class power gives rise to weak policy changing possibility. This is why Obama gave up meaningful changes for people’s betterment for more than one and half years since he took the office of presidency.
As Wall Street has claimed supreme politico-economic power of the capitalist orders, even smidgen trivial matters have to get Wall Street’s approval. People have severely criticized the Wall Street axis of Greithner-Summers-Bernanke for malfeasance and have requested Obama to break up the axis and dismiss them but Obama refused to do so for the power that hijacked the government is Wall Street or the monopoly finance capital.
F.D.R came from a wealthy aristocratic family and he had no need to be avid of the capitalists’ rightist favor for money and connections. He could afford to declare that he welcomed the “hatred” of his enemies in the realms of “business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.” Obama’s family origin is completely different. His family was of moderate means. His official career and personal advancement have usually under the rich capitalists thumb. F.D.R could not careless about of the hatred of his enemies but Obama cannot afford to neglect the hatred of his. Because, in such a deeply commodified society, even the highest officer in the country has to obey rules of selling and buying, wheeling and dealing, set up by the top-drawers to whom one would have to be much obliged, especially if one is timorous and giddily tending to blandish those on top of social and official ladders.
The U.S. electoral democratic system has shown its fatal drawbacks from the Reagan era to the present. Democracy has become timocracy that the electorates are so timorous and bereft after losing control that they literally hold power for only one day annually and give the rest to capitalists who wield power for them all year round. The grass-root movement to elect a president for change actually elected Wall Street for non-change.
The representative democracy has failed. The struggle for an utterly new direct democratic system bypassing the capitalist plutocracy power route will transform the political system from timocracy or plutocracy to people’s democracy.
chaotician
New Mexico
Andrew Carnegie is famous for picking Good Men to do the work which made him wealthy; his job he said was to make this men work together for achieving the goals of each of them so that all were successful! Barry has failed very badly in picking men and women! He has surrounded himself with Clinton retreads; and retained many of George's selections in some mistaken notion that doing so would get some support from the Republicans! Well, his choices of Summers and Geithner have been abysmal failures, his choice for Homeland insecurity the worse pick possible, and his choices for Interior, Environment, and most of the rest are poor at best; Of course, he has had to put up with the party of No; but a daily barrage of publicity on the appointments not getting done would have sent the cowardly Republicans back in their holes! That is one of the deepest disappointments; letting the Senate be a place where things are prevented from happening; and the Democrats have all the blame for allowing this to continue because these corrupted men and women would rather keep their exalted privileges, their "royal" prerogatives, their arcane rules, their bribes and kickbacks than do what is necessary to govern the country! Well, the Republicans have been successful; they have prevented the nation's business to be done; they have allowed a minority of the Senators to block votes, block appointments, block and water down needed actions; they have made a mockery of the people's votes to make change and they will pay the price! They will be held responsible for the coming disaster of the Republican resurgence; they will be the cowards which allowed the reactionary corporate Fascist, the reactionary Christian Right thugs, the discredited economic actions, the impoverishing trade policies, the ruinous, stupid foreign wars, and the insidious attacks on the social policies supporting our nation to continue! When the guillotines are brought forth after the coming years of economic slavery; may their heads be the first to go!
ed connor
camp springs, md
Yes, thge top 1% earn 21% of all income. They also pay 42% of all income taxes.
The bottom 47% pay NO income taxes.
Most mothers now give birth without fathers in the home. Nearly 50% of urban high school students drop out before graduation. The U.S. has slipped from first to 16th internationally in rates of college matriculation. Most foreclosures are made upon homeowners who took out "interest free" loans and never had any equity in the foreclosed properties. There are 12 million illegal residents in the U.S. who are unskilled and uneducated, and who are stressing local health care and education recources to the limit.
Did I mention that 90% of Americans ARE employed and housed?
Why you continue to blame the people who studied hard, paid off their college loans, worked their way up through their professions, and finally reached their peak earning years, befuddles me.
If you repeal the Bush tax cuts for only incomes over $250 K but maintain the cuts under that income level, you will only reduce the net revenue loss by 25%. There are only so many "rich" people to soak. Once soaked, we will retire, stop hiring and go away.
Who will you blame for your misfortunes then?
kathleenkatalina
Massachusetts
Americans get their news from multi-millionaires....Wolf, Charlie, Rush. None of the talking heads make less than 1/4 million a year, and none of them think they are rich.
Oprah, Warren Buffet, that Russian guy, they're rich. The talking heads are just middle class folks who make 5 or 6 million a year. And they have been baling up the Benjamins for the last ten years of tax cuts. Millions. Follow the money.
TV news, including MSNBC, keeps telling us that Obama is going to raise our taxes, but they really mean he is going to raise theirs.
The country is broke because of lies and incompetence, and all patriotic Americans need to sacrifice.
Just as the sons and daughters of the real middle class sacrificed when they volunteered for duty when Bush invaded the wrong country. The comfortable class has benefitted from our capitalist democracy, and they have not had to sacrifice. They have paid high taxes, but it has not hurt. Not the way it hurts the people I know.
They stand in line waiting to buy a few items. They dont use shopping carts. And after they add up to see if they have enough money , they are hit with a sales tax. On food. On the clothes and books the kids need. On gas.
My sister is 58, worked every day of her life, even during college, and she predicts that she will finally be out of debt in October. Then she can start saving for retirement. She had one child, not a dozen. And a husband.
Some people who are very well off have worked very hard, but so has every poor person. The rich have been lucky, and they need to stop being so selfish.
My favorite president needs to shame them into making the sacrifice.
If President Obama announced tomorrow that he was not going to stop their tax breaks, he would all of a sudden be very very popular. Follow the money...
Sandy Lewis
Lewis Family Farm, Essex, New York
FDR's predicament was different. FDR had not hired Bob Rubin, or Sidney Weinberg, for that matter, nor had he put Steve Rattner, arguably a criminal not charged by his administration, in charge of Detroit, only to remove him when news of his previous life emerged.
As and when news of Bob Rubin's previous life emerges, will the president remove his team?
Geithner was not smart enough to work at Goldman, Sachs, but he did the next best thing for one who would like to work there: he followed Goldman's line and worked to please Goldman, 24-7. There is no difference between Hank's team and Geithner's team, save one: Hank got the guys he wanted, and Tim Geithner can get no one to come.
Smart, honest guys do not want to work for Rubin in absentia. With Valerie Jarrett running things from behind the Oval Office, we have Larry and Tim and Valerie as the triumvirate under Caesar. And Bob Rubin is tight with Valerie, believe it. I got that from on high.
Hence, this Obama administration is really Rubin & Company. That's what we have here. Which wold work if they knew how to shoot straight.
No, it's late in the game to play the FDR 1936 Card. Save that one for 2012, when all the cards needed will have to be played.
For now, it would do to "out" them that caused it - and let the people know you know. The problem, Frank, among others - people think he doesn't get it.
And to date, it's clear the President Obama does not really, really get it. He's surrounded.
And those who have surrounded President Obama have the best insurance policy in the world in President Obama.
If the ---- hits he fan, big time, who will explain why He hired Them?
30.8.10
All the eyes are on China
blogosphere echoes
Amos
Portland, Oregon
I've spoken with executives at American companies that tell me they have "their own factories" in China, and they seem proud of it. But then when I ask, "Doesn't the Chinese government own 51% of your factory?" they'll then say "Yes, well, err, that's the way they do things over there, but it's our factory!"
Not really. Since we began on this road to globalization, that is, free and mostly unregulated trade, just about the same time that Chairman Deng was opening China to Western capitalism, China has played us for fools.
We've taught them how to make everything we know how to make, from steel to computers, iPods to cell phones, giftware to American-style furniture, and all the fittings and components and add-on's as well.
When we decided to invade Iraq, Congress and the Bush Administration decided to keep the costs off the books and out of the budget, so we borrowed as much as $200 billion each year from China and Saudi Arabia, and a few other countries here and there. This, at the same time we were running a trade deficit with both countries and had to borrow from them to be able to afford importing all those great things we buy from China and all that Saudi oil.
So while we were forcing American businesses to set up factories in China that brought in labor from the countryside at a whopping $5/day for 60 hours/week (no labor unions in Communist China, I suppose), we were exporting our manufacturing base and all of our manufacturing technology to that country and in the process enriching the Chinese government with virtually every dollar we spent.
Now we're in a so-called Great Recession in which we're having to face the fact that we've lost literally tens of millions of good-paying manufacturing jobs, and China is doing great, up 10% a year, raising its general wage to another whopping $6.50/day and building what will become the second strongest naval, air and armed forces in the world. Not to mention their advanced missile technology, which they'll sell to anyone with money to buy it.
We've been such chumps.
Of course, Obama says he has a plan to create great jobs that can't be outsourced. Nonsense. The Chinese are way ahead of us in wind and solar technology. They've taken their riches and put it into vast new infrastructure projects and research, and when we finally have the resolve to build those new highways or create that new electric grid it will be with Chinese machinery and technology.
The Republicans are no help either, as they don't seem to have a clue about how to create jobs. They just want to protect the banks and Wall Street so they have the money to win elections and make it easier for the rich to get richer while denying any help at all to everyone else.
I see no future for this country unless and until we confront the outsourcing of jobs to China head-on. Globalization doesn't work for us when overseas labor is so cheap. China doesn't play by the same WTO rules in any case. It's time to establish bilateral trade agreements with key trading partners under which they can't export to us very much more that we export to them. At the same time, we need to protect key industries that are vital to our national security, like steel, metal fabrication of all kinds, shipbuilding, electronics with military uses, on and on.
There's no other way out of the downward spiral of cheap goods forcing Americans out of work, so they have less money and have to buy cheap Chinese goods, which leads to more layoff's, and down we go to being a third world country. It's time someone in Washington, and in the media, had the courage to call a spade a spade. The loss of our manufacturing base is what's killing America and unemployment won't go down until we begin to restore it.
Hong Zhou
Germany
Sorry to disappoints the author, but the answers to the questions are:
"Experts on both sides of the debate have but two questions. One is how much longer state control of vast swaths of the economy will generate that growth."
A very, very long time still. China is in the same state of development now as Japan was in the sixties. So do your arithmetic.
"The other is whether, when that strategy inevitably stops working, China will be able to change it."
"inevitably"? In which country please do the large conglomerates fail to be the first in line to get state help, anywhere in the world? Is the strategy of bailing out AIG etal. "stopping to work"? Or how about Airbus, or for that matter Boeing, who's always the first in line to get big US government contracts?
So much ink spilled for a faux dilemma and a bunch of false questions....
AussieLouis
Perth, Australia
For an impoverishment nation, why should the emphasis of state enterprise be about profits? It must be about the raising of the people from poverty. Like in Singapore to do this, instead of producing more private billionaires and millionaires which only help to exacerbate inequality, the state enterprises learn to be viable and this helps the ordinary public more. The share of state equity amongst the people is balanced against the share of privately held wealth, preventing the excesses of the rich as in the US and Russia.
In capitalist US the individual entrepreneurs and private enterprise comes first; in capitalist China the ordinary people of the nation comes first and the private capitalists second. Yet this is allowing the emergence of a wealthy private class. Both state and private enterprises eventually enrich the whole nation instead of enriching only a few private individuals. This is what made Singapore the first world nation it is; it is a proven new working model for capitalism, state and private, in balance!
James
Los Angeles
Compare China's state-sponsored recovery to our situation. China is being flexible about its recovery, and is totally willing to allow its government to prop up the private sector during this global economic downturn. In evolutionary terms, their economy has an adaptation that the US economy does not have - a dynamic and fully integrated participation of state-sponsored industries in the national economy. Instead, the US is in political/class/race deadlock about cultural diversions like "birthers" "gay marriage" and "ground zero mosques." China's economy is a demonstration of what our economy needs - Massive investment by the government in the national economy (not just banks). Instead Bernanke/Geithner are playing patsy to the economic establishment and protecting their meager hedges against "the specter of inflation" when they should be taking decisive action to adapt our economy to the current global conditions. A bank recovery alone is not an economic recovery! The Bush bank bailout doesn't help the national economy, only insures the financial sector against losses from their past irresponsible behavior. We need a national stimulus, direct support by the government to our vital competitive industries - Info Tech, Biotech, Skilled Manufacture and Small Business. We must adapt or go extinct.
Jane
West Coast
The level of inefficiency and incompetence in US banks, makes Chinese government institutions look good by comparison.
Consider that we are a consumer driven economy.
Consider that our elected leaders gave our banks 750 billion dollars in taxpayer funded TARP monies, with no accounting required.
Consider that the FED supplies our banks with 0% funds to loan out, at taxpayer expense.
Consider that these same banks, loan these 0% funds out at rates up to 29% to consumer/taxpayer customers, many of whom have timely paid their bills for decades.
Consider that retail spending has taken a dive, and the economy, in this consumer driven economy is failing.
Do you think maybe the bottleneck in our banks where executives continue to collect multi-million dollar bonuses, while the taxpayers that subsidize these banks, get charged almost 30% per year to borrow back their funds....during a period when the price of money is 1-4%, might be part of the problem?
The performance of our banks suggests the creation of government banks. Our current banks are generously subsidized with bailouts, 0% FED money, tax deductions on their losses, taxpayer financed law enforcement protection, and still, they randomly steal from their customers at interest rates that should be outlawed and refunded if charged.
The argument that usury is necessary in a free market only applies if the banks are freely operating, not heavily taxpayer subsidized as they are now and handling money priced at significant interest rates on capital markets, which they are not.
Our banks are stealing from us, and making what used to be considered a relatively inefficient Chinese government financial sector, look good by comparison.
Imagine that.
David Underwood
Citrus heights, CA
There are a number of misconceptions about China in general.
China has a one party system that has been labeled Socialist. However it is nowhere near what the Soviet type Socialist system was. the government finances business, but these are not state controlled businesses. They are not given production quotas, they are not required to hire people just to make the system look good, they need to make a profit or they do go out of business unlike the Soviet system.
The Chinese government runs a country of 1.3 billion people and they are directing the economy to accommodate as many people as they can. They do not give more personal freedom as they believe it would result in anarchy, and they are probably correct, and i not anarchy, a division of the country into several Balkanized countries.
They also have the ability to do things their way. If they want a high speed rail line, there are no laws, property rights, environmental considerations to worry about. If your house is in the way, you are given a choice to rent an apartment, or get a new house further from the city, if you refuse, you are moved. Business competes on a basis unlike anything we have seen since the 1800s. There are huge industrial parks where a manufacturer can get new materials and equipment almost overnight. For instance if you need a new circuit board for a product, you contact the companies that make those kinds of things, and there will be several choices on your desk in the morning. You can hire and fire employees at will. Yo can not compare the Chinese style government to anything we have previously known. So called Socialist governments did not compete on such a scale. The government sets limits on political action, it sets limits on the press and it encourages industrial espionage.
No matter how much you may think the Chines government is oppressive, it is in no way anything close to the Mao regime or those of the eastern Soviet controlled countries in the past century. The Chinese people you meet will tell you, they think their lives have improved more than most of them could have imagined. They are free to move about the country, we see them in the parks which are clean and well neat. Their stores are full of products and full of customers, they have first class hotels, we ate in restaurants that held a thousand people and were full. Thee are rows of high end auto dealerships and the streets are crowded with cars and buses.
There are also the traditional areas of alleys where shops sell novelties, and have food stands of all sorts, and these are crowded with Chinese shoppers. The Chines are entrepreneurs, make no mistake about it.
The Chines have also improved the schooling and universities, the government wants them to be as good as any there are.
Another thing the Chinese did that took away some of the US industrial dominance was in building modernized industrial complexes. The built the most modern steel mills while the US steel industry failed to upgrade. The US steel companies were being run like they had been run since the 1800s and management was just plain hidebound, engaging in war against the unions and not reinvesting their profits. Once the Asian steel industry come on line, they were through.
Finally the American consumer helped the Chinese ascend. Once companies like Wall Mart found a way to bring you goods cheaper by having them made in China, shoppers were willing to give up quality for price.
It is time or Americans to realize that other countries and governments have learned how to compete and even beat us at our own game.
No one country as a monopoly on competition and the well being of its citizens. The Chinese have taken up the American idea of we will buy you, and they are doing a good job of it.
The denigration of President Obama by some misanthropes shows just how far many have degenerated. These people seem to think returning to the 1890s would beat a country that is looking toward the 2090s. Give it up and join the 21st century.
peteski14
hamtramck
Many have no clue, let's start here. It is "The Peoples Republic of China".
Not "Communist China" not "Socialist China". Get it?
I ask you, for such an impoverished society, how is it at 11:00PM on Sunday night there are more people out having dinner, shopping, drinking in public, having a good time in a little town like Jinhua then I ever saw out on the town in Detroit or even Toronto for that matter. Most of you people are clueless. By the way, didn't our genius President, Justanotherbushofadiffrentcolor name Alan Roger Mulally as head of "Export" development for the U.S.? I thought Al was the one that sent the Boeing work to China. I thought Al was the one that tried to break the Machinists Union on the west coast by shipping all of the foundry work to non-union (anti-union) shops in the Detroit area. Funny how Al turned up here, borrowed 28 BILLION from Bill Fords college room mate at Goldman Sachs 12 months before the economy collapsed because of fraud perpetrated using "credit default swaps"
and then used that collapse to eliminate even more union workers. I wonder why there has been no investigation into who knew what. Maybe Carl Levin has been too occupied with his lip tumors to actually do some work other than grandstanding last October with the Goldman Sachs grilling. You are right, in China executives responsible for tainted milk and toys paid the ultimate price. Maybe its time for some Americans to pay the ultimate price for what they have wrought.
Karl
Beijing
My observations are based on living and working in China for over a decade. The question is where China will go from here. Yes, economic growth has been strong numberwise, but the standard of living has not really improved much over the last five years. Infrastructure is strong, but mainly because the state either throws tremendous tax dollars at projects (roads and rail) or allows oligopolistic control with subsidies (telecom, airlines, banks, TV, oil). As a result, private money scrambles to find outlets in places like real estate, resulting in distortions (read: bubble) caused by inflated land values, which are high in part so that government can raise income. Where else do the central and local governments get the money? Exports are certainly a big part. Also, the tax man is very strict about foreign companies--whereas state enterprises are given more "flexibility." Yeah, tax evasion is just a way of life in China. The government attitude seems to be that "We'll cut you (the taxpayer) some slack, but, in exchange, you won't get uppity and keep your mouth shut." Not too much taxation for very little representation. As far as China's growth is concerned, a lot of people assume China erupted ex nihilo around 1978, when Deng Xiaoping solidified control. That's one of the myths drummed into everybody's head by the Party, where discussion of life pre-Deng is discouraged in the public sphere. In fact, China had built a very strong industrial base between 1949 and 1959 and plugged along despite some political disasters over the next two decades. (Okay, maybe over twenty million people starved to death between 1959 and 1961, but still.) It makes little sense to compare China in 1978 to Japan or Korea immediately after WWII or the Korean War, when those economies were destroyed and in disarray. But, getting back to the key issue, where is China now headed? Chinese state enterprises do get the job done, but they're still pretty inefficient, despite efforts to make them more responsive to the market. In short, where private companies--especially foreign firms--are allowed to compete on an equal footing, they blow the SOEs away. Which is why other countries shouldn't put up with Chinese restrictions on investing in China. The United States buys tons of Chinese widgets but has incredible trouble making headway on exporting things like telecom services. Then again, the Chinese are scrappy because they've been trading horses and just surviving for a long, long time.
James DeVries
Pontoise, France
What's the difference between politics and history (gross oversimplifications department)? Politics is a big, long, laborious story told about a very short period, set against a tiny corner of interest. History, on the other hand, is an extremely short story told about a big, long, laborious period, set against a nearly immeasurable area of interest.
American journalism would do well to resist today's impulse to regard China in purely political terms---leave that to the politicians---and consider her career from a more historical perspective. China has a long history and has survived as a civilisation through vast upheavals. Whatever short-term economic tactics China may or may not be adopting today barely qualify as a “concern”, let alone an upheaval. Seen from the point of view of history, goings-on in the right-now, contemporary Chinese pond barely rate as a ripple or wavelet.
Too much directive government intervention or not enough? That is a discussion couched in purely Western political terms. A China that, despite its internal tensions, is feeling particularly cohesive today, isn’t thinking about itself in purely Western political terms. So any judgments passed in those terms probably won’t register on Chinese consciousness as significant, let alone something to worry about. The Chinese are probably thinking something more like, “Look, we’ve suffered enough over the last 100 years from being forced to think of ourselves in Western terms. Now the industrial revolution has fully caught up with us, imperialism has been shaken off and the worst excesses Communism can lead to are well established (although the latter is probably still more an unvoiced suspicion or vague hope than an outright admission), why should we listen to a lecturing West that 1) just nearly put paid to the whole world economy and 2) just launched two perfectly disastrous, unprovoked wars?
Others will say, Afghanistan? Unprovoked? And they have a point. But if the United States hadn’t bitten on the gaudy lure of backing the call to international Jihad at the end of the 1970’s, if they had they silently helped the likes of Ahmad Shah Massoud rather then publicly encouraging grandstand events like calling all Muslims to come and become “Afghan resistance fighters”, well, they wouldn’t have got the triple fishhook of Al Qaeda in their lip a couple decades later.
The Americans, and I’m one, must resist the trend to become more Maoist than Mao. What are you doing? Trying to imitate the Cultural Revolution? Shouting slogans, refusing to listen, worse, refusing to think? Aren’t there enough wounds to heal at home, without continuing to stab foreigners? And on top of it, delivering lectures to China because she decides for herself? China probably never noticed the huge success that Sloan/Harvard/Wharton-style neoliberal economics-inspired “capitalist shock treatment” initially brought to Russia… Follow the West’s advice on how to run an economy? Are you kidding?
Bruce Olson
Houston
Fascinating comments.
While I do not intend in any way to understand China, its economy, its government and its society, a few things stood out to me in the article which, if anywhere near accurate, explains China's recent economic successes, especially when compared to our own economic performance over the last few years.
First, it is now abundantly clear there is more than one way to run an economy. China, with its history of Communist top down planning, is going to continue to be a top down run economy. It is working for them and as long as the leadership is acting in the best interest of the economy as a whole, it will continue to work.
Second, America, with its history of free market Capitalism and minimal regulation is going to continue to be a free market economy. It has worked well for us and as long as the private leadership in America is acting generally in the interest of the economy as a whole it will continue t serve us well.
Third, as both systems have evolved into industrial giants: China’s rapidly at warp speed since their Cultural Revolution and America’s more slowly but still very rapidly since the 1850s, especially following the Civil War and each the world wars of the 20th century. Along the way both countries have been forced to make adjustments to their systems and philosophies. China, coming from the top down central planning model, has moved toward a more decentralized, free market capitalist influenced system in order to more efficiently allocate and develop its resources. America, coming from its private capitalist system, has moved toward ever more regulation and government influence to more efficiently preserve its free market structure in the face of the inevitable abuses that occur as the most successful competitors become more powerful and less focused on meeting the true needs of the free market.
Both systems are constantly required to accommodate to changing conditions, in order to survive.
Both systems must be seen by their citizens as working to improve their economic condition.
Both systems are currently working, at least in the short term.
Both systems are being forced into finding a broader mix of free market capitalism and appropriate government regulation/control to overcome the shortcomings of each respective system.
Contrary to the beliefs of most who call themselves Capitalists or free marketers and also many top down planning Communists, the key to success in either system lies not with the systems themselves but with the people running them. Both systems are working, albeit one apparently a little better than the other at the moment.
I believe one thing for sure. Far Right or Far left ideologues who put their “line in the sand” and refuse to adjust will drive either system to failure. Right now, I believe that is what may be happening in the United States. Too many seem to be worshiping at the alter of unfettered, unregulated Capitalism and an ill defined idea of reduced government, refusing to see the damage the currently over concentrated wealth and power has done.
The reality is that China and the United States are both heading toward more “Socialized Capitalist” systems, to better serve their citizens. If they don’t they will fail.
The alternatives to failure will be more revolutionary than evolutionary or, if the Chinese model continues to work, it may well embrace us. I hope I am wrong, but given the politics of the moment here in America I can see it happening.
Bruce Olson, Houston
Shrinagesh
Chennai, India
China today is pretending to be Modern to reap benefits.
To build Wealth and Minds, there needs to be space and
Chinese Minds have to free themselves.
What comes out of China is filtered and so there will
always be simmering frustration within. The advantage of
democracy is that frustration is expressed spontaneously and things appear worse than it really is.I would rather live in a poor democratic
country rather than an autocratic rich nation.
While in China it is a Pretentious economy, pretending to be great
the reality could be shocking. The greater shock is that
even US is carried away by Chinese pretensions.
I have always been an admirer of the American spirit but it
is getting diluted as US waters down her convictions especially
on Free Enterprise for the benefit of immediate needs. Instead
of leadership by convictions, American leadership has resorted
to management of crises by giving up time tested convictions.
Obama instead of the challenge of taking up world leadership
which would have benefited US, has become regional leader and limits
himself to be the Prez of US. Am deeply disappointed with him. He needs to prove that he is worthy of the Nobel Peace Prize.
I can understand China's behavior but ET TU US?
Mr. Ho
NJ
Do top-down, state-run economic growth programs work? If you are on a low state of economic development, definitely yes. That's how Japan, Korea, Taiwan etc. started up. Does it continue to work forever? No, definitely not. Japan's economy has stalled in the 90's and it hasn't really been growing since, Asia's "little tiger" economies experienced the 1998 crisis and learned that after reaching a certain level of development, it's time to change your strategy. For now, except some big privileged cities, vast areas of China are in a state of low economic development. So for now, the system keeps working.
The big question is: What will happen if China reaches a per-capita income of §10,000 per year? The communist bureaucrats may think that they are infallible, but no advanced economy has had a top-down planning and succeeded. The reforms carried out by Thacher and Reagan, which dismantled state-control and was so painful because it was not accompanied by a corresponding social-welfare program to mitigate the effects on the poor, was in effect an acknowledgment that government-control over the economy is a bad idea. Short-term stimulus packages work, but long-term control will lead to stunted growth.
So expanding the state-run sector and propping up inefficient state-run companies against competition from the private sector via massive subsidies won't have a visible effect now, but in the future it will create a big headache. And it's already creating a huge waste:
"The state airlines immediately began a price war. The state-owned monopoly that provided jet fuel refused to service private carriers on the same generous terms given the big three. China’s only computerized reservation system — currently one-third owned by the three state airlines — refused to book flights for private competitors. And when mismanagement and the 2008 economic crisis drove the three majors into financial straits, the central government bought stock to bail them out: about $1 billion for China Eastern; $430 million for China Southern; $220 million for Air China."
Well, you might think that we just used billions of taxpayer dollars to bail out big banks, which in turn provided its managers with large bonuses, but think on this: Using billions of taxpayer dollars to bail out banks in a country with a per-capita income of ca. §45,000 is outrageous, but using billions of dollars to prop up mismanaged companies in a country where the per-capita income is ca. §6,000 and where people used to ride bicycles instead of cars until recently is an atrocity.
Portland, Oregon
I've spoken with executives at American companies that tell me they have "their own factories" in China, and they seem proud of it. But then when I ask, "Doesn't the Chinese government own 51% of your factory?" they'll then say "Yes, well, err, that's the way they do things over there, but it's our factory!"
Not really. Since we began on this road to globalization, that is, free and mostly unregulated trade, just about the same time that Chairman Deng was opening China to Western capitalism, China has played us for fools.
We've taught them how to make everything we know how to make, from steel to computers, iPods to cell phones, giftware to American-style furniture, and all the fittings and components and add-on's as well.
When we decided to invade Iraq, Congress and the Bush Administration decided to keep the costs off the books and out of the budget, so we borrowed as much as $200 billion each year from China and Saudi Arabia, and a few other countries here and there. This, at the same time we were running a trade deficit with both countries and had to borrow from them to be able to afford importing all those great things we buy from China and all that Saudi oil.
So while we were forcing American businesses to set up factories in China that brought in labor from the countryside at a whopping $5/day for 60 hours/week (no labor unions in Communist China, I suppose), we were exporting our manufacturing base and all of our manufacturing technology to that country and in the process enriching the Chinese government with virtually every dollar we spent.
Now we're in a so-called Great Recession in which we're having to face the fact that we've lost literally tens of millions of good-paying manufacturing jobs, and China is doing great, up 10% a year, raising its general wage to another whopping $6.50/day and building what will become the second strongest naval, air and armed forces in the world. Not to mention their advanced missile technology, which they'll sell to anyone with money to buy it.
We've been such chumps.
Of course, Obama says he has a plan to create great jobs that can't be outsourced. Nonsense. The Chinese are way ahead of us in wind and solar technology. They've taken their riches and put it into vast new infrastructure projects and research, and when we finally have the resolve to build those new highways or create that new electric grid it will be with Chinese machinery and technology.
The Republicans are no help either, as they don't seem to have a clue about how to create jobs. They just want to protect the banks and Wall Street so they have the money to win elections and make it easier for the rich to get richer while denying any help at all to everyone else.
I see no future for this country unless and until we confront the outsourcing of jobs to China head-on. Globalization doesn't work for us when overseas labor is so cheap. China doesn't play by the same WTO rules in any case. It's time to establish bilateral trade agreements with key trading partners under which they can't export to us very much more that we export to them. At the same time, we need to protect key industries that are vital to our national security, like steel, metal fabrication of all kinds, shipbuilding, electronics with military uses, on and on.
There's no other way out of the downward spiral of cheap goods forcing Americans out of work, so they have less money and have to buy cheap Chinese goods, which leads to more layoff's, and down we go to being a third world country. It's time someone in Washington, and in the media, had the courage to call a spade a spade. The loss of our manufacturing base is what's killing America and unemployment won't go down until we begin to restore it.
Hong Zhou
Germany
Sorry to disappoints the author, but the answers to the questions are:
"Experts on both sides of the debate have but two questions. One is how much longer state control of vast swaths of the economy will generate that growth."
A very, very long time still. China is in the same state of development now as Japan was in the sixties. So do your arithmetic.
"The other is whether, when that strategy inevitably stops working, China will be able to change it."
"inevitably"? In which country please do the large conglomerates fail to be the first in line to get state help, anywhere in the world? Is the strategy of bailing out AIG etal. "stopping to work"? Or how about Airbus, or for that matter Boeing, who's always the first in line to get big US government contracts?
So much ink spilled for a faux dilemma and a bunch of false questions....
AussieLouis
Perth, Australia
For an impoverishment nation, why should the emphasis of state enterprise be about profits? It must be about the raising of the people from poverty. Like in Singapore to do this, instead of producing more private billionaires and millionaires which only help to exacerbate inequality, the state enterprises learn to be viable and this helps the ordinary public more. The share of state equity amongst the people is balanced against the share of privately held wealth, preventing the excesses of the rich as in the US and Russia.
In capitalist US the individual entrepreneurs and private enterprise comes first; in capitalist China the ordinary people of the nation comes first and the private capitalists second. Yet this is allowing the emergence of a wealthy private class. Both state and private enterprises eventually enrich the whole nation instead of enriching only a few private individuals. This is what made Singapore the first world nation it is; it is a proven new working model for capitalism, state and private, in balance!
James
Los Angeles
Compare China's state-sponsored recovery to our situation. China is being flexible about its recovery, and is totally willing to allow its government to prop up the private sector during this global economic downturn. In evolutionary terms, their economy has an adaptation that the US economy does not have - a dynamic and fully integrated participation of state-sponsored industries in the national economy. Instead, the US is in political/class/race deadlock about cultural diversions like "birthers" "gay marriage" and "ground zero mosques." China's economy is a demonstration of what our economy needs - Massive investment by the government in the national economy (not just banks). Instead Bernanke/Geithner are playing patsy to the economic establishment and protecting their meager hedges against "the specter of inflation" when they should be taking decisive action to adapt our economy to the current global conditions. A bank recovery alone is not an economic recovery! The Bush bank bailout doesn't help the national economy, only insures the financial sector against losses from their past irresponsible behavior. We need a national stimulus, direct support by the government to our vital competitive industries - Info Tech, Biotech, Skilled Manufacture and Small Business. We must adapt or go extinct.
Jane
West Coast
The level of inefficiency and incompetence in US banks, makes Chinese government institutions look good by comparison.
Consider that we are a consumer driven economy.
Consider that our elected leaders gave our banks 750 billion dollars in taxpayer funded TARP monies, with no accounting required.
Consider that the FED supplies our banks with 0% funds to loan out, at taxpayer expense.
Consider that these same banks, loan these 0% funds out at rates up to 29% to consumer/taxpayer customers, many of whom have timely paid their bills for decades.
Consider that retail spending has taken a dive, and the economy, in this consumer driven economy is failing.
Do you think maybe the bottleneck in our banks where executives continue to collect multi-million dollar bonuses, while the taxpayers that subsidize these banks, get charged almost 30% per year to borrow back their funds....during a period when the price of money is 1-4%, might be part of the problem?
The performance of our banks suggests the creation of government banks. Our current banks are generously subsidized with bailouts, 0% FED money, tax deductions on their losses, taxpayer financed law enforcement protection, and still, they randomly steal from their customers at interest rates that should be outlawed and refunded if charged.
The argument that usury is necessary in a free market only applies if the banks are freely operating, not heavily taxpayer subsidized as they are now and handling money priced at significant interest rates on capital markets, which they are not.
Our banks are stealing from us, and making what used to be considered a relatively inefficient Chinese government financial sector, look good by comparison.
Imagine that.
David Underwood
Citrus heights, CA
There are a number of misconceptions about China in general.
China has a one party system that has been labeled Socialist. However it is nowhere near what the Soviet type Socialist system was. the government finances business, but these are not state controlled businesses. They are not given production quotas, they are not required to hire people just to make the system look good, they need to make a profit or they do go out of business unlike the Soviet system.
The Chinese government runs a country of 1.3 billion people and they are directing the economy to accommodate as many people as they can. They do not give more personal freedom as they believe it would result in anarchy, and they are probably correct, and i not anarchy, a division of the country into several Balkanized countries.
They also have the ability to do things their way. If they want a high speed rail line, there are no laws, property rights, environmental considerations to worry about. If your house is in the way, you are given a choice to rent an apartment, or get a new house further from the city, if you refuse, you are moved. Business competes on a basis unlike anything we have seen since the 1800s. There are huge industrial parks where a manufacturer can get new materials and equipment almost overnight. For instance if you need a new circuit board for a product, you contact the companies that make those kinds of things, and there will be several choices on your desk in the morning. You can hire and fire employees at will. Yo can not compare the Chinese style government to anything we have previously known. So called Socialist governments did not compete on such a scale. The government sets limits on political action, it sets limits on the press and it encourages industrial espionage.
No matter how much you may think the Chines government is oppressive, it is in no way anything close to the Mao regime or those of the eastern Soviet controlled countries in the past century. The Chinese people you meet will tell you, they think their lives have improved more than most of them could have imagined. They are free to move about the country, we see them in the parks which are clean and well neat. Their stores are full of products and full of customers, they have first class hotels, we ate in restaurants that held a thousand people and were full. Thee are rows of high end auto dealerships and the streets are crowded with cars and buses.
There are also the traditional areas of alleys where shops sell novelties, and have food stands of all sorts, and these are crowded with Chinese shoppers. The Chines are entrepreneurs, make no mistake about it.
The Chines have also improved the schooling and universities, the government wants them to be as good as any there are.
Another thing the Chinese did that took away some of the US industrial dominance was in building modernized industrial complexes. The built the most modern steel mills while the US steel industry failed to upgrade. The US steel companies were being run like they had been run since the 1800s and management was just plain hidebound, engaging in war against the unions and not reinvesting their profits. Once the Asian steel industry come on line, they were through.
Finally the American consumer helped the Chinese ascend. Once companies like Wall Mart found a way to bring you goods cheaper by having them made in China, shoppers were willing to give up quality for price.
It is time or Americans to realize that other countries and governments have learned how to compete and even beat us at our own game.
No one country as a monopoly on competition and the well being of its citizens. The Chinese have taken up the American idea of we will buy you, and they are doing a good job of it.
The denigration of President Obama by some misanthropes shows just how far many have degenerated. These people seem to think returning to the 1890s would beat a country that is looking toward the 2090s. Give it up and join the 21st century.
peteski14
hamtramck
Many have no clue, let's start here. It is "The Peoples Republic of China".
Not "Communist China" not "Socialist China". Get it?
I ask you, for such an impoverished society, how is it at 11:00PM on Sunday night there are more people out having dinner, shopping, drinking in public, having a good time in a little town like Jinhua then I ever saw out on the town in Detroit or even Toronto for that matter. Most of you people are clueless. By the way, didn't our genius President, Justanotherbushofadiffrentcolor name Alan Roger Mulally as head of "Export" development for the U.S.? I thought Al was the one that sent the Boeing work to China. I thought Al was the one that tried to break the Machinists Union on the west coast by shipping all of the foundry work to non-union (anti-union) shops in the Detroit area. Funny how Al turned up here, borrowed 28 BILLION from Bill Fords college room mate at Goldman Sachs 12 months before the economy collapsed because of fraud perpetrated using "credit default swaps"
and then used that collapse to eliminate even more union workers. I wonder why there has been no investigation into who knew what. Maybe Carl Levin has been too occupied with his lip tumors to actually do some work other than grandstanding last October with the Goldman Sachs grilling. You are right, in China executives responsible for tainted milk and toys paid the ultimate price. Maybe its time for some Americans to pay the ultimate price for what they have wrought.
Karl
Beijing
My observations are based on living and working in China for over a decade. The question is where China will go from here. Yes, economic growth has been strong numberwise, but the standard of living has not really improved much over the last five years. Infrastructure is strong, but mainly because the state either throws tremendous tax dollars at projects (roads and rail) or allows oligopolistic control with subsidies (telecom, airlines, banks, TV, oil). As a result, private money scrambles to find outlets in places like real estate, resulting in distortions (read: bubble) caused by inflated land values, which are high in part so that government can raise income. Where else do the central and local governments get the money? Exports are certainly a big part. Also, the tax man is very strict about foreign companies--whereas state enterprises are given more "flexibility." Yeah, tax evasion is just a way of life in China. The government attitude seems to be that "We'll cut you (the taxpayer) some slack, but, in exchange, you won't get uppity and keep your mouth shut." Not too much taxation for very little representation. As far as China's growth is concerned, a lot of people assume China erupted ex nihilo around 1978, when Deng Xiaoping solidified control. That's one of the myths drummed into everybody's head by the Party, where discussion of life pre-Deng is discouraged in the public sphere. In fact, China had built a very strong industrial base between 1949 and 1959 and plugged along despite some political disasters over the next two decades. (Okay, maybe over twenty million people starved to death between 1959 and 1961, but still.) It makes little sense to compare China in 1978 to Japan or Korea immediately after WWII or the Korean War, when those economies were destroyed and in disarray. But, getting back to the key issue, where is China now headed? Chinese state enterprises do get the job done, but they're still pretty inefficient, despite efforts to make them more responsive to the market. In short, where private companies--especially foreign firms--are allowed to compete on an equal footing, they blow the SOEs away. Which is why other countries shouldn't put up with Chinese restrictions on investing in China. The United States buys tons of Chinese widgets but has incredible trouble making headway on exporting things like telecom services. Then again, the Chinese are scrappy because they've been trading horses and just surviving for a long, long time.
James DeVries
Pontoise, France
What's the difference between politics and history (gross oversimplifications department)? Politics is a big, long, laborious story told about a very short period, set against a tiny corner of interest. History, on the other hand, is an extremely short story told about a big, long, laborious period, set against a nearly immeasurable area of interest.
American journalism would do well to resist today's impulse to regard China in purely political terms---leave that to the politicians---and consider her career from a more historical perspective. China has a long history and has survived as a civilisation through vast upheavals. Whatever short-term economic tactics China may or may not be adopting today barely qualify as a “concern”, let alone an upheaval. Seen from the point of view of history, goings-on in the right-now, contemporary Chinese pond barely rate as a ripple or wavelet.
Too much directive government intervention or not enough? That is a discussion couched in purely Western political terms. A China that, despite its internal tensions, is feeling particularly cohesive today, isn’t thinking about itself in purely Western political terms. So any judgments passed in those terms probably won’t register on Chinese consciousness as significant, let alone something to worry about. The Chinese are probably thinking something more like, “Look, we’ve suffered enough over the last 100 years from being forced to think of ourselves in Western terms. Now the industrial revolution has fully caught up with us, imperialism has been shaken off and the worst excesses Communism can lead to are well established (although the latter is probably still more an unvoiced suspicion or vague hope than an outright admission), why should we listen to a lecturing West that 1) just nearly put paid to the whole world economy and 2) just launched two perfectly disastrous, unprovoked wars?
Others will say, Afghanistan? Unprovoked? And they have a point. But if the United States hadn’t bitten on the gaudy lure of backing the call to international Jihad at the end of the 1970’s, if they had they silently helped the likes of Ahmad Shah Massoud rather then publicly encouraging grandstand events like calling all Muslims to come and become “Afghan resistance fighters”, well, they wouldn’t have got the triple fishhook of Al Qaeda in their lip a couple decades later.
The Americans, and I’m one, must resist the trend to become more Maoist than Mao. What are you doing? Trying to imitate the Cultural Revolution? Shouting slogans, refusing to listen, worse, refusing to think? Aren’t there enough wounds to heal at home, without continuing to stab foreigners? And on top of it, delivering lectures to China because she decides for herself? China probably never noticed the huge success that Sloan/Harvard/Wharton-style neoliberal economics-inspired “capitalist shock treatment” initially brought to Russia… Follow the West’s advice on how to run an economy? Are you kidding?
Bruce Olson
Houston
Fascinating comments.
While I do not intend in any way to understand China, its economy, its government and its society, a few things stood out to me in the article which, if anywhere near accurate, explains China's recent economic successes, especially when compared to our own economic performance over the last few years.
First, it is now abundantly clear there is more than one way to run an economy. China, with its history of Communist top down planning, is going to continue to be a top down run economy. It is working for them and as long as the leadership is acting in the best interest of the economy as a whole, it will continue to work.
Second, America, with its history of free market Capitalism and minimal regulation is going to continue to be a free market economy. It has worked well for us and as long as the private leadership in America is acting generally in the interest of the economy as a whole it will continue t serve us well.
Third, as both systems have evolved into industrial giants: China’s rapidly at warp speed since their Cultural Revolution and America’s more slowly but still very rapidly since the 1850s, especially following the Civil War and each the world wars of the 20th century. Along the way both countries have been forced to make adjustments to their systems and philosophies. China, coming from the top down central planning model, has moved toward a more decentralized, free market capitalist influenced system in order to more efficiently allocate and develop its resources. America, coming from its private capitalist system, has moved toward ever more regulation and government influence to more efficiently preserve its free market structure in the face of the inevitable abuses that occur as the most successful competitors become more powerful and less focused on meeting the true needs of the free market.
Both systems are constantly required to accommodate to changing conditions, in order to survive.
Both systems must be seen by their citizens as working to improve their economic condition.
Both systems are currently working, at least in the short term.
Both systems are being forced into finding a broader mix of free market capitalism and appropriate government regulation/control to overcome the shortcomings of each respective system.
Contrary to the beliefs of most who call themselves Capitalists or free marketers and also many top down planning Communists, the key to success in either system lies not with the systems themselves but with the people running them. Both systems are working, albeit one apparently a little better than the other at the moment.
I believe one thing for sure. Far Right or Far left ideologues who put their “line in the sand” and refuse to adjust will drive either system to failure. Right now, I believe that is what may be happening in the United States. Too many seem to be worshiping at the alter of unfettered, unregulated Capitalism and an ill defined idea of reduced government, refusing to see the damage the currently over concentrated wealth and power has done.
The reality is that China and the United States are both heading toward more “Socialized Capitalist” systems, to better serve their citizens. If they don’t they will fail.
The alternatives to failure will be more revolutionary than evolutionary or, if the Chinese model continues to work, it may well embrace us. I hope I am wrong, but given the politics of the moment here in America I can see it happening.
Bruce Olson, Houston
Shrinagesh
Chennai, India
China today is pretending to be Modern to reap benefits.
To build Wealth and Minds, there needs to be space and
Chinese Minds have to free themselves.
What comes out of China is filtered and so there will
always be simmering frustration within. The advantage of
democracy is that frustration is expressed spontaneously and things appear worse than it really is.I would rather live in a poor democratic
country rather than an autocratic rich nation.
While in China it is a Pretentious economy, pretending to be great
the reality could be shocking. The greater shock is that
even US is carried away by Chinese pretensions.
I have always been an admirer of the American spirit but it
is getting diluted as US waters down her convictions especially
on Free Enterprise for the benefit of immediate needs. Instead
of leadership by convictions, American leadership has resorted
to management of crises by giving up time tested convictions.
Obama instead of the challenge of taking up world leadership
which would have benefited US, has become regional leader and limits
himself to be the Prez of US. Am deeply disappointed with him. He needs to prove that he is worthy of the Nobel Peace Prize.
I can understand China's behavior but ET TU US?
Mr. Ho
NJ
Do top-down, state-run economic growth programs work? If you are on a low state of economic development, definitely yes. That's how Japan, Korea, Taiwan etc. started up. Does it continue to work forever? No, definitely not. Japan's economy has stalled in the 90's and it hasn't really been growing since, Asia's "little tiger" economies experienced the 1998 crisis and learned that after reaching a certain level of development, it's time to change your strategy. For now, except some big privileged cities, vast areas of China are in a state of low economic development. So for now, the system keeps working.
The big question is: What will happen if China reaches a per-capita income of §10,000 per year? The communist bureaucrats may think that they are infallible, but no advanced economy has had a top-down planning and succeeded. The reforms carried out by Thacher and Reagan, which dismantled state-control and was so painful because it was not accompanied by a corresponding social-welfare program to mitigate the effects on the poor, was in effect an acknowledgment that government-control over the economy is a bad idea. Short-term stimulus packages work, but long-term control will lead to stunted growth.
So expanding the state-run sector and propping up inefficient state-run companies against competition from the private sector via massive subsidies won't have a visible effect now, but in the future it will create a big headache. And it's already creating a huge waste:
"The state airlines immediately began a price war. The state-owned monopoly that provided jet fuel refused to service private carriers on the same generous terms given the big three. China’s only computerized reservation system — currently one-third owned by the three state airlines — refused to book flights for private competitors. And when mismanagement and the 2008 economic crisis drove the three majors into financial straits, the central government bought stock to bail them out: about $1 billion for China Eastern; $430 million for China Southern; $220 million for Air China."
Well, you might think that we just used billions of taxpayer dollars to bail out big banks, which in turn provided its managers with large bonuses, but think on this: Using billions of taxpayer dollars to bail out banks in a country with a per-capita income of ca. §45,000 is outrageous, but using billions of dollars to prop up mismanaged companies in a country where the per-capita income is ca. §6,000 and where people used to ride bicycles instead of cars until recently is an atrocity.
Some of Bernake's critics were Obama's voters
Bernanke is willing to lead the Fed into taking several steps if the economy continues its downward trending.
I. Generational
Brooklyn
It's a funny thing about capitalists: they say that they believe in markets. They say that prices should be allowed to float, reflecting the forces of supply and demand.
But, as it turns out, they only believe this when prices are floating upward. Prices trend down, and suddenly its time for a bailout. Federal Reserve, Banks & Wall Street - It's always the same story: privatize the gains and socialize the losses. Make the little guy pay for the bad investment decisions of major corporations and wealthy individuals.
I, for one, would like to see prices trend down for a few months or years. It would help re-align prices with my paycheck.
Jacob Olsson
New York
There's nothing they can do now. At the start of the crisis, the U.S. had a choice: the road to Sweden or the road to Japan. The first one entailed firing the bankers, bleeding the shareholders, regulating the industry and plan for a new future for the country. The second one entailed saving zombie banks at any cost, propping up banker bonuses, country and future be damned.
times
Houston, TX
Bernanke doesn't know the wires are cut in the wall behind the control box. He keeps turning the knob but nothing happens. This is what happens when the president decides to do Wall Street's bidding and reappoints a loser to run the Fed. Bernanke, that great student of the Great Depression, learned his lesson well and is leading us into another one. Why is that we have the same bureaucrats, who orchestrated the demise of economy, like Bernanke and Geithner, running it? It's called a plutocracy: government by and for the wealthy ruling class. Wake up, America.
brian
egmont key
prop up the economy or prop up wallstreet?
we must break this "stockholm syndrome" with wallstreet.
dump your stocks and save your dough before wallstreet gets a chance to say,"oh so sorry, we lost your money ," once again
Libertarian
West Chester, PA
We are taught that prices are information about supply and demand. This amounts to the Fed manipulating information. They are trying to hide the fact that we have moved jobs overseas and the middle class can no longer afford their recent lifestyle.
1. End the wars and close overseas bases. Use the money to pay down the debt and build infrastructure.
2. Impose tariffs to bring back jobs. Set tariffs based on wage differential so that our workers are competing on productivity, not wages with those in developing countries.
3. Pass Amendment to end personhood of corporations. Only human citizens should be allowed to participate in our politics.
MS O
Berkeley, CA
The problem is that the core of the American economy was destroyed with the exportation of middle class jobs to China, India and other countries where $129/month for 12 hour days and a six day work week is the norm and where child labor is still legal.
The United States could bring things back by imposing a value added tax of 25% on all goods imported by "American" corporations as "American" products. This tax should be imposed on oil first.
Until people realize that feeding the greed of the super rick is not a sound economic policy there will be no recovery. Wall Street represents corporations with a single goal, the accumulation of wealth. This wealth is not "American" wealth it is international wealth. The profits are not returned to the United States but are invested overseas to avoid any possibility of paying any of the taxes which support the American military which, of course, is expected to rescue their investments when things turn nasty.
I. Generational
Brooklyn
It's a funny thing about capitalists: they say that they believe in markets. They say that prices should be allowed to float, reflecting the forces of supply and demand.
But, as it turns out, they only believe this when prices are floating upward. Prices trend down, and suddenly its time for a bailout. Federal Reserve, Banks & Wall Street - It's always the same story: privatize the gains and socialize the losses. Make the little guy pay for the bad investment decisions of major corporations and wealthy individuals.
I, for one, would like to see prices trend down for a few months or years. It would help re-align prices with my paycheck.
Jacob Olsson
New York
There's nothing they can do now. At the start of the crisis, the U.S. had a choice: the road to Sweden or the road to Japan. The first one entailed firing the bankers, bleeding the shareholders, regulating the industry and plan for a new future for the country. The second one entailed saving zombie banks at any cost, propping up banker bonuses, country and future be damned.
times
Houston, TX
Bernanke doesn't know the wires are cut in the wall behind the control box. He keeps turning the knob but nothing happens. This is what happens when the president decides to do Wall Street's bidding and reappoints a loser to run the Fed. Bernanke, that great student of the Great Depression, learned his lesson well and is leading us into another one. Why is that we have the same bureaucrats, who orchestrated the demise of economy, like Bernanke and Geithner, running it? It's called a plutocracy: government by and for the wealthy ruling class. Wake up, America.
brian
egmont key
prop up the economy or prop up wallstreet?
we must break this "stockholm syndrome" with wallstreet.
dump your stocks and save your dough before wallstreet gets a chance to say,"oh so sorry, we lost your money ," once again
Libertarian
West Chester, PA
We are taught that prices are information about supply and demand. This amounts to the Fed manipulating information. They are trying to hide the fact that we have moved jobs overseas and the middle class can no longer afford their recent lifestyle.
1. End the wars and close overseas bases. Use the money to pay down the debt and build infrastructure.
2. Impose tariffs to bring back jobs. Set tariffs based on wage differential so that our workers are competing on productivity, not wages with those in developing countries.
3. Pass Amendment to end personhood of corporations. Only human citizens should be allowed to participate in our politics.
MS O
Berkeley, CA
The problem is that the core of the American economy was destroyed with the exportation of middle class jobs to China, India and other countries where $129/month for 12 hour days and a six day work week is the norm and where child labor is still legal.
The United States could bring things back by imposing a value added tax of 25% on all goods imported by "American" corporations as "American" products. This tax should be imposed on oil first.
Until people realize that feeding the greed of the super rick is not a sound economic policy there will be no recovery. Wall Street represents corporations with a single goal, the accumulation of wealth. This wealth is not "American" wealth it is international wealth. The profits are not returned to the United States but are invested overseas to avoid any possibility of paying any of the taxes which support the American military which, of course, is expected to rescue their investments when things turn nasty.
17.8.10
Why aren't we getting out of these two senseless wars?
pdxtran
Minneapolis
I noticed as early as 2007 that the mainstream media were acting as if there were only two candidates for the Democratic nomination, Hillary Clinton and Barack Obama. I also noticed that there were no significant differences between their policies, because while Obama could do a good imitation of a fiery populist, his actual positions were center-right, just like H. Clinton's.
There were still other candidates out there campaigning, but they received little coverage, because before a single vote was cast in Iowa, Obama and Clinton were anointed "the frontrunners."
Why? They had raised the most corporate cash. Furthermore, the mass media loved asking the question, "Do you want the first woman president or the first president of color?"
That's really what the race boiled down to, and on political message boards, advocates of one candidate or the other were accusing each other of either racism or sexism. (Since I didn't have much use for either candidate, I watched in dismay.)
What a wonderful way to distract the electorate from the real issues!
Now where am I going with this?
Our politicians are bought and paid for by the major corporations, the financial institutions, and the military-industrial complex. Anyone who seems reluctant to do their bidding receives no corporate cash and no publicity. The last thing the Big Money Boys want is a president who will ruin things for them when they're gobbling up hundreds of millions of dollars per day at the public trough.
When was the last time we had a president who genuinely stood up for the economic welfare of ordinary people or for a sensible foreign policy and would not be bullied or badgered or bribed or sweet-talked into caving in? I'm trying to remember... (No, Reagan doesn't count. I said GENUINELY stood up for the economic welfare of ordinary people.)
Leftists are angry these days because they feel that they put Obama into the White House and that he is disrespecting them. There is some truth to that. However, the ones who really put Obama into the White House and who would have hobbled his candidacy if he had crossed them, are the financial elites, the corporate bigwigs, the media conglomerates, and the military contractors.
They don't want to get out of Afghanistan or Iraq, because they're making too much money, and they will be insulated from the worst effects of an economic collapse. Besides, they tend to be like Harry Lime in The Third Man, regarding ordinary human beings as mere ants crawling on the ground.
They will continue to do so until the American people wise up.
Tim Kane
Mesa, Arizona
It has fallen to the Obama administration to clean up the many and varied Bush's messes. One of those messes is Afghanistan.
The Afghanistan project got off to a rousing good start. But the corruption, intrinsic to Republicanism (graft, greed, oil, and corporatism) perverted the project.
The first big mistake was not grafting on to existing Afghan constitutional institutions (they had them!), like the return of the Monarchy, which after 30 years of civil war and anarchy held maximum moral authority for the people, the use of the loya jurga as an indigenous assembly body that could have help create a proto-constitutional democracy and the ancient, tried and true, implementation of neo-feudalism into the mix to align local war lords with progress.
The important thing about feudalism and neo-feudalism, and monarchy and proto-constitutional monarchy, in the developmental state is that it is intuitive to all in a relatively primitive society. We could have supplemented that with our strength, vast amounts of international development funds, and Japanese and Korean economic and planning bureaucrats (the best in the world, and our allies). If this had been done, Afghanistan might be something of a success story today.
Instead, the Bush administration planted a presidential system (unintuitive and difficult for most societies to make use of) with a petroleum industry lackey in the presidency, then got side tracked jousting windmills in Iraq, allowing the whole afghan project to descend into chaos when it need not be.
In "Structure and Change in Economic History" by Nobel Laureate and Economic Historian, Douglas C. North cites that the Roman Empire collapsed because wealth and power had become extremely concentrated, 6 Senators owned half of North Africa, so that the Wealthy and Powerful were able to use their influence to avoid paying taxes.
The Empire, consisting of 1/4th of the earth's total population of about 60 million people and controlling all of Western Civilizations resources, when Western Civilization included the western half of the Middle East, Turkey, Egypt and North Africa, lacked the political will to raise enough money to provide a large enough army to control the Empire's borders.
The Roman legion still held a tactical edge over the barbarians, but it had thinned. They needed a larger army but lacked the political will to fund it.
Other historians will say that the empire collapsed because it's commercial (cash) economy collapsed. As we are aware of, by what we are living through now, this is the same thing. When wealth concentrates, demand collapses and with it the commercial economy. The rich got richer, the poor got poorer, until they became serfs.
Still other historians will claim other causes to the collapse of Rome, however, the same basic dynamic of concentrated wealth leading to the collapse of so many other empire's, civilizations, economies and states (Ancient Egypt's New Kingdom, Byzantium prior to Manzikurt, Pre-Islamic Mecca [Islam was, in part, a reaction to sudden concentrated wealth there at the time], Medieval Japan, arguably Hapsburg Spain, Bourbon France, Romanov Russia, Coolidge/Hoover America, Reagan/Bush America) is so common that it deserves the highest level of presumption.
The thing about these dynamics, is that the Wealthy and the Powerful, the very people with the most to lose from collapse, were also the same ones who brought about the collapse. The power of greed is so great, that all perspective is lost and the movement of the greedy cannot be contained by foreknowledge that they are precipitating their own ruin.
To save money, the Romans hired barbarians into their army. Then they belatedly abandoned Brittan around 405. Too little, too late: by 455 the Roman Empire was no more.
Much of these dynamics are taking place now. The concentration of wealth in the United States is greater than it was in 1929. This lead to collapse of financial institutions and a jobs depression. Some hindsight from 1929 brought about swift stabilization of financial institutions, but the collapse of demand, without massive stimulus, looks to be permanent. If so, deflation will soon set in, leading to a serf like existence for many who once hailed from the middle class.
We are struggling with immigration and the control over our own borders.
By the time we get around to pulling out of Afghanistan and other commitments, like the Roman Empire pulling out of Brittan, it will be too late. The economy will be destroyed. The vast majority of working people will live a serf like existence. The wealthy will so jealously hang onto their wealth that the Government will be powerless to do anything constructive. What resources that are available will be utilized to control the helot serfs of our economy and protect property rights.
Meanwhile, the renaissance in East Asia continues.
I can see nothing on the horizon to stop this process of dissolution.
Carole A. Dunn
Ocean Springs, Miss.
I challenge anyone to say the US is the "land of the free and the home of the brave" with a straight face anymore. Our government has been systematically selling us into slavery to the military-industrial complex.
The war in Afghanistan is just a part of the war on the average American. It's part of the plot to drain our treasury so that there is nothing left for America to be a modern and civilized country. Our jobs have been exported and low-wage workers imported, and the large corporations are rewarded for it. The big banks perpetrated huge financial fraud against the country as a whole, but primarily against the working classes, and they were rewarded by bailouts at no cost to them. The money they are not hoarding they are lending out at high rates of interest, while savings are losing value every day. (My interest on an account with an average daily balance of about $2,500 was 18 cents for July).
The rich have been paying tax rates that are lower than their own workers who make salaries in the lower five figures, starving the treasury further, and causing one-third of the deficit. The recent financial debacle didn't start the states on their starvation diets; the states started running out of money soon after the Bush tax cuts in 2001. As a result, the middle and working classes have seen everything go up, from property taxes, sales taxes and all sorts of fees. We have seen services and any attention to infrastructure go down, including our educational system. Out of one side of their mouths our "leaders" talk about improving education, and out of the other side they call for the laying off of teachers.
We are no longer an upwardly mobile nation. A person growing up in a working class family, whether he/she goes to college or not, only has a twenty percent chance of rising up to a higher station in life. For many young people the only chance at a future is with the military, if they live long enough to reap the benefits. We are not even anywhere near as geographically mobile as we used to be. Thanks to the moribund housing market, those lucky enough to find decent jobs in another part of the country are unable to sell their present homes and move on. Around here, people can't even find tenants for houses they can't sell.
We don't believe in global warming. We don't believe in evolution. We don't believe the government should help the poor. We sit on our duffs and do nothing while the entire country is being sold out from under us. The war in Afghanistan won't end until the big war profiteers decide it's time. I hear rumblings that the ideas being put forth to "save" Social Security, like raising the retirement age and cutting benefits are making people mad. People don't get mad enough anymore. Make no mistake: our fascist government will do what they want and the American people will role over. We are allowing ourselves to become a nation of people who will be just marking time until we die.
We ask the president and the Democrats in Congress to grow a spine. It's time for us to grow a spine.
Minneapolis
I noticed as early as 2007 that the mainstream media were acting as if there were only two candidates for the Democratic nomination, Hillary Clinton and Barack Obama. I also noticed that there were no significant differences between their policies, because while Obama could do a good imitation of a fiery populist, his actual positions were center-right, just like H. Clinton's.
There were still other candidates out there campaigning, but they received little coverage, because before a single vote was cast in Iowa, Obama and Clinton were anointed "the frontrunners."
Why? They had raised the most corporate cash. Furthermore, the mass media loved asking the question, "Do you want the first woman president or the first president of color?"
That's really what the race boiled down to, and on political message boards, advocates of one candidate or the other were accusing each other of either racism or sexism. (Since I didn't have much use for either candidate, I watched in dismay.)
What a wonderful way to distract the electorate from the real issues!
Now where am I going with this?
Our politicians are bought and paid for by the major corporations, the financial institutions, and the military-industrial complex. Anyone who seems reluctant to do their bidding receives no corporate cash and no publicity. The last thing the Big Money Boys want is a president who will ruin things for them when they're gobbling up hundreds of millions of dollars per day at the public trough.
When was the last time we had a president who genuinely stood up for the economic welfare of ordinary people or for a sensible foreign policy and would not be bullied or badgered or bribed or sweet-talked into caving in? I'm trying to remember... (No, Reagan doesn't count. I said GENUINELY stood up for the economic welfare of ordinary people.)
Leftists are angry these days because they feel that they put Obama into the White House and that he is disrespecting them. There is some truth to that. However, the ones who really put Obama into the White House and who would have hobbled his candidacy if he had crossed them, are the financial elites, the corporate bigwigs, the media conglomerates, and the military contractors.
They don't want to get out of Afghanistan or Iraq, because they're making too much money, and they will be insulated from the worst effects of an economic collapse. Besides, they tend to be like Harry Lime in The Third Man, regarding ordinary human beings as mere ants crawling on the ground.
They will continue to do so until the American people wise up.
Tim Kane
Mesa, Arizona
It has fallen to the Obama administration to clean up the many and varied Bush's messes. One of those messes is Afghanistan.
The Afghanistan project got off to a rousing good start. But the corruption, intrinsic to Republicanism (graft, greed, oil, and corporatism) perverted the project.
The first big mistake was not grafting on to existing Afghan constitutional institutions (they had them!), like the return of the Monarchy, which after 30 years of civil war and anarchy held maximum moral authority for the people, the use of the loya jurga as an indigenous assembly body that could have help create a proto-constitutional democracy and the ancient, tried and true, implementation of neo-feudalism into the mix to align local war lords with progress.
The important thing about feudalism and neo-feudalism, and monarchy and proto-constitutional monarchy, in the developmental state is that it is intuitive to all in a relatively primitive society. We could have supplemented that with our strength, vast amounts of international development funds, and Japanese and Korean economic and planning bureaucrats (the best in the world, and our allies). If this had been done, Afghanistan might be something of a success story today.
Instead, the Bush administration planted a presidential system (unintuitive and difficult for most societies to make use of) with a petroleum industry lackey in the presidency, then got side tracked jousting windmills in Iraq, allowing the whole afghan project to descend into chaos when it need not be.
In "Structure and Change in Economic History" by Nobel Laureate and Economic Historian, Douglas C. North cites that the Roman Empire collapsed because wealth and power had become extremely concentrated, 6 Senators owned half of North Africa, so that the Wealthy and Powerful were able to use their influence to avoid paying taxes.
The Empire, consisting of 1/4th of the earth's total population of about 60 million people and controlling all of Western Civilizations resources, when Western Civilization included the western half of the Middle East, Turkey, Egypt and North Africa, lacked the political will to raise enough money to provide a large enough army to control the Empire's borders.
The Roman legion still held a tactical edge over the barbarians, but it had thinned. They needed a larger army but lacked the political will to fund it.
Other historians will say that the empire collapsed because it's commercial (cash) economy collapsed. As we are aware of, by what we are living through now, this is the same thing. When wealth concentrates, demand collapses and with it the commercial economy. The rich got richer, the poor got poorer, until they became serfs.
Still other historians will claim other causes to the collapse of Rome, however, the same basic dynamic of concentrated wealth leading to the collapse of so many other empire's, civilizations, economies and states (Ancient Egypt's New Kingdom, Byzantium prior to Manzikurt, Pre-Islamic Mecca [Islam was, in part, a reaction to sudden concentrated wealth there at the time], Medieval Japan, arguably Hapsburg Spain, Bourbon France, Romanov Russia, Coolidge/Hoover America, Reagan/Bush America) is so common that it deserves the highest level of presumption.
The thing about these dynamics, is that the Wealthy and the Powerful, the very people with the most to lose from collapse, were also the same ones who brought about the collapse. The power of greed is so great, that all perspective is lost and the movement of the greedy cannot be contained by foreknowledge that they are precipitating their own ruin.
To save money, the Romans hired barbarians into their army. Then they belatedly abandoned Brittan around 405. Too little, too late: by 455 the Roman Empire was no more.
Much of these dynamics are taking place now. The concentration of wealth in the United States is greater than it was in 1929. This lead to collapse of financial institutions and a jobs depression. Some hindsight from 1929 brought about swift stabilization of financial institutions, but the collapse of demand, without massive stimulus, looks to be permanent. If so, deflation will soon set in, leading to a serf like existence for many who once hailed from the middle class.
We are struggling with immigration and the control over our own borders.
By the time we get around to pulling out of Afghanistan and other commitments, like the Roman Empire pulling out of Brittan, it will be too late. The economy will be destroyed. The vast majority of working people will live a serf like existence. The wealthy will so jealously hang onto their wealth that the Government will be powerless to do anything constructive. What resources that are available will be utilized to control the helot serfs of our economy and protect property rights.
Meanwhile, the renaissance in East Asia continues.
I can see nothing on the horizon to stop this process of dissolution.
Carole A. Dunn
Ocean Springs, Miss.
I challenge anyone to say the US is the "land of the free and the home of the brave" with a straight face anymore. Our government has been systematically selling us into slavery to the military-industrial complex.
The war in Afghanistan is just a part of the war on the average American. It's part of the plot to drain our treasury so that there is nothing left for America to be a modern and civilized country. Our jobs have been exported and low-wage workers imported, and the large corporations are rewarded for it. The big banks perpetrated huge financial fraud against the country as a whole, but primarily against the working classes, and they were rewarded by bailouts at no cost to them. The money they are not hoarding they are lending out at high rates of interest, while savings are losing value every day. (My interest on an account with an average daily balance of about $2,500 was 18 cents for July).
The rich have been paying tax rates that are lower than their own workers who make salaries in the lower five figures, starving the treasury further, and causing one-third of the deficit. The recent financial debacle didn't start the states on their starvation diets; the states started running out of money soon after the Bush tax cuts in 2001. As a result, the middle and working classes have seen everything go up, from property taxes, sales taxes and all sorts of fees. We have seen services and any attention to infrastructure go down, including our educational system. Out of one side of their mouths our "leaders" talk about improving education, and out of the other side they call for the laying off of teachers.
We are no longer an upwardly mobile nation. A person growing up in a working class family, whether he/she goes to college or not, only has a twenty percent chance of rising up to a higher station in life. For many young people the only chance at a future is with the military, if they live long enough to reap the benefits. We are not even anywhere near as geographically mobile as we used to be. Thanks to the moribund housing market, those lucky enough to find decent jobs in another part of the country are unable to sell their present homes and move on. Around here, people can't even find tenants for houses they can't sell.
We don't believe in global warming. We don't believe in evolution. We don't believe the government should help the poor. We sit on our duffs and do nothing while the entire country is being sold out from under us. The war in Afghanistan won't end until the big war profiteers decide it's time. I hear rumblings that the ideas being put forth to "save" Social Security, like raising the retirement age and cutting benefits are making people mad. People don't get mad enough anymore. Make no mistake: our fascist government will do what they want and the American people will role over. We are allowing ourselves to become a nation of people who will be just marking time until we die.
We ask the president and the Democrats in Congress to grow a spine. It's time for us to grow a spine.
16.8.10
Ponzi, short for Social Security
Richard Luettgen
New Jersey
It's not that reasonable conservatives believe that government is always the problem, never the solution: it's that we believe that while government can do important things that individuals cannot, it is almost never the entire solution. The problem with liberals is that they believe that pervasive government that robs us of our liberty and beggars us to pay for itself is the only solution.
That said, Social Security's dedicated trust fund is nonsense. It's never been cash, out there earning money by allowing private enterprise to actually build something useful; it's been T-Bills that the government trades for the excess cash collected from workers that isn't paid out immediately to beneficiaries in this massive Ponzi scheme that makes Bernie Madoff look like a piker. The government then spends that excess cash on whatever it chooses, year after year, promising that someday it will pay the T-Bills as they become due and are needed to pay benefits. Unlike the states, that are close to bankrupt (and if you were to consider their unfunded public pension liabilities as real, they would be bankrupt in any sensible accounting scheme), the feds think that they can forever print money today and tomorrow to meet obligations that they entered into yesterday and keep entering into today; or raise taxes again and again and again, until they've expropriated all productive output and find that it's still not enough to satisfy them.
So, what happens when Social Security tax receipts no longer exceed what is actually paid out, and when outlays start exceeding related tax collections by significant sums? Well, one thing is that the federal government no longer will be able to hide a much larger actual operating deficit behind this thin set of skirts, since they can no longer take excess money that no longer exists, to spend as they see fit. The second effect is that those T-Bills start coming due. That would be a hoot, except that our children and grandchildren, and maybe our great-grandchildren, will need to be taxed at truly ruinous levels to collect the cash to make good on those promises. At that time, you will necessarily see a massive reduction and means-testing regime for Social Security and Medicare that will limit recipients to the poorest among us. It won't be law that requires people to work into their seventies (or eighties), it will be the need to feed themselves, because there will be no other help unless your kids can support you.
FDR believed that Social Security would need to be privatized, probably in the sixties, or it would become a Ponzi scheme far too vulnerable to a demographic shift that had a very large number of retirees appearing with too few active workers to support them -- sound familiar? But it was never privatized, not because the markets are too flighty but because Congress refuses to give up the excess cash it spins off, or they'd have to admit that they're actually burning deficit dollars at a much higher rate than they admit to; or, they'd have to cut spending to levels closer to the sum of other tax collections, something that might actually get them kicked out of office by the dependents of all the programs those deficit dollars fund; or, they'd have to increase income taxes enough that middle class people would be converging on D.C. to hang them.
This is the legacy of believing that government is the whole solution all the time.
So, what really to do? If we want a social safety net for the elderly (and just about all of us do), then we'd better start taxing ourselves now to pay for it, now and tomorrow; but take every dime of the excess collected now, DO NOT invest it in T-Bills but in very conservative market instruments that pay real cash as interest, and stop Congress from its decades-long spending spree. If we need to cover expenses that current income tax levels can't satisfy, then make some hard choices -- like getting out of Afghanistan now, calling our troops home from all over the world and cutting the military's budget by at least 50% over ten years. And getting rid of every U.S. Representative and Senator over seventy wouldn't be a bad move either, since they clearly haven't the foggiest idea how to deal with today's and tomorrow's problems.
New Jersey
It's not that reasonable conservatives believe that government is always the problem, never the solution: it's that we believe that while government can do important things that individuals cannot, it is almost never the entire solution. The problem with liberals is that they believe that pervasive government that robs us of our liberty and beggars us to pay for itself is the only solution.
That said, Social Security's dedicated trust fund is nonsense. It's never been cash, out there earning money by allowing private enterprise to actually build something useful; it's been T-Bills that the government trades for the excess cash collected from workers that isn't paid out immediately to beneficiaries in this massive Ponzi scheme that makes Bernie Madoff look like a piker. The government then spends that excess cash on whatever it chooses, year after year, promising that someday it will pay the T-Bills as they become due and are needed to pay benefits. Unlike the states, that are close to bankrupt (and if you were to consider their unfunded public pension liabilities as real, they would be bankrupt in any sensible accounting scheme), the feds think that they can forever print money today and tomorrow to meet obligations that they entered into yesterday and keep entering into today; or raise taxes again and again and again, until they've expropriated all productive output and find that it's still not enough to satisfy them.
So, what happens when Social Security tax receipts no longer exceed what is actually paid out, and when outlays start exceeding related tax collections by significant sums? Well, one thing is that the federal government no longer will be able to hide a much larger actual operating deficit behind this thin set of skirts, since they can no longer take excess money that no longer exists, to spend as they see fit. The second effect is that those T-Bills start coming due. That would be a hoot, except that our children and grandchildren, and maybe our great-grandchildren, will need to be taxed at truly ruinous levels to collect the cash to make good on those promises. At that time, you will necessarily see a massive reduction and means-testing regime for Social Security and Medicare that will limit recipients to the poorest among us. It won't be law that requires people to work into their seventies (or eighties), it will be the need to feed themselves, because there will be no other help unless your kids can support you.
FDR believed that Social Security would need to be privatized, probably in the sixties, or it would become a Ponzi scheme far too vulnerable to a demographic shift that had a very large number of retirees appearing with too few active workers to support them -- sound familiar? But it was never privatized, not because the markets are too flighty but because Congress refuses to give up the excess cash it spins off, or they'd have to admit that they're actually burning deficit dollars at a much higher rate than they admit to; or, they'd have to cut spending to levels closer to the sum of other tax collections, something that might actually get them kicked out of office by the dependents of all the programs those deficit dollars fund; or, they'd have to increase income taxes enough that middle class people would be converging on D.C. to hang them.
This is the legacy of believing that government is the whole solution all the time.
So, what really to do? If we want a social safety net for the elderly (and just about all of us do), then we'd better start taxing ourselves now to pay for it, now and tomorrow; but take every dime of the excess collected now, DO NOT invest it in T-Bills but in very conservative market instruments that pay real cash as interest, and stop Congress from its decades-long spending spree. If we need to cover expenses that current income tax levels can't satisfy, then make some hard choices -- like getting out of Afghanistan now, calling our troops home from all over the world and cutting the military's budget by at least 50% over ten years. And getting rid of every U.S. Representative and Senator over seventy wouldn't be a bad move either, since they clearly haven't the foggiest idea how to deal with today's and tomorrow's problems.
10.8.10
The non-US take on philantropy
German Millionaires Criticize Gates' 'Giving Pledge'
Germany's super-rich have rejected an invitation by Bill Gates and Warren Buffett to join their 'Giving Pledge' to give away most of their fortune. The pledge has been criticized in Germany, with millionaires saying donations shouldn't replace duties that would be better carried out by the state.
Last week, Microsoft founder Bill Gates attempted to convince billionaires around the world to agree to give away half their money to charity. But in Germany, the "Giving Pledge," backed by 40 of the world's wealthiest people, including Gates and Warren Buffet, has met with skepticism, SPIEGEL has learned.
"For most people that is too ostentatious," said the asset manager of one of the billionaires contacted by Gates, adding that many of the of the people contacted had already transferred larger proportions of their assets than the Americans to charitable foundations.
Dietmar Hopp, the co-founder of the SAP business software company, has transferred some €2.9 billion to a foundation. Klaus Tschira, another founder of SAP, has handed more than half his wealth to a foundation.
Peter Krämer, a Hamburg-based shipping magnate and multimillionaire, has emerged as one of the strongest critics of the "Giving Pledge." Krämer, who donated millions of euros in 2005 to "Schools for Africa," a program operated by UNICEF, explained his opposition to the Gates initiative in a SPIEGEL interview.
SPIEGEL: Forty super wealthy Americans have just announced that they would donate half of their assets, at the very latest after their deaths. As a person who often likes to say that rich people should be asked to contribute more to society, what were your first thoughts?
Krämer: I find the US initiative highly problematic. You can write donations off in your taxes to a large degree in the USA. So the rich make a choice: Would I rather donate or pay taxes? The donors are taking the place of the state. That's unacceptable.
SPIEGEL: But doesn't the money that is donated serve the common good?
Krämer: It is all just a bad transfer of power from the state to billionaires. So it's not the state that determines what is good for the people, but rather the rich want to decide. That's a development that I find really bad. What legitimacy do these people have to decide where massive sums of money will flow?
SPIEGEL: It is their money at the end of the day.
Krämer: In this case, 40 superwealthy people want to decide what their money will be used for. That runs counter to the democratically legitimate state. In the end the billionaires are indulging in hobbies that might be in the common good, but are very personal.
SPIEGEL: Do the donations also have to do with the fact that the idea of state and society is such different one in the United States?
Krämer: Yes, one cannot forget that the US has a desolate social system and that alone is reason enough that donations are already a part of everyday life there. But it would have been a greater deed on the part of Mr. Gates or Mr. Buffet if they had given the money to small communities in the US so that they can fulfill public duties.
SPIEGEL: Should wealthy Germans also give up some of their money?
Krämer: No, not in this form. It would make more sense, for example, to work with and donate to established organizations.
Germany's super-rich have rejected an invitation by Bill Gates and Warren Buffett to join their 'Giving Pledge' to give away most of their fortune. The pledge has been criticized in Germany, with millionaires saying donations shouldn't replace duties that would be better carried out by the state.
Last week, Microsoft founder Bill Gates attempted to convince billionaires around the world to agree to give away half their money to charity. But in Germany, the "Giving Pledge," backed by 40 of the world's wealthiest people, including Gates and Warren Buffet, has met with skepticism, SPIEGEL has learned.
"For most people that is too ostentatious," said the asset manager of one of the billionaires contacted by Gates, adding that many of the of the people contacted had already transferred larger proportions of their assets than the Americans to charitable foundations.
Dietmar Hopp, the co-founder of the SAP business software company, has transferred some €2.9 billion to a foundation. Klaus Tschira, another founder of SAP, has handed more than half his wealth to a foundation.
Peter Krämer, a Hamburg-based shipping magnate and multimillionaire, has emerged as one of the strongest critics of the "Giving Pledge." Krämer, who donated millions of euros in 2005 to "Schools for Africa," a program operated by UNICEF, explained his opposition to the Gates initiative in a SPIEGEL interview.
SPIEGEL: Forty super wealthy Americans have just announced that they would donate half of their assets, at the very latest after their deaths. As a person who often likes to say that rich people should be asked to contribute more to society, what were your first thoughts?
Krämer: I find the US initiative highly problematic. You can write donations off in your taxes to a large degree in the USA. So the rich make a choice: Would I rather donate or pay taxes? The donors are taking the place of the state. That's unacceptable.
SPIEGEL: But doesn't the money that is donated serve the common good?
Krämer: It is all just a bad transfer of power from the state to billionaires. So it's not the state that determines what is good for the people, but rather the rich want to decide. That's a development that I find really bad. What legitimacy do these people have to decide where massive sums of money will flow?
SPIEGEL: It is their money at the end of the day.
Krämer: In this case, 40 superwealthy people want to decide what their money will be used for. That runs counter to the democratically legitimate state. In the end the billionaires are indulging in hobbies that might be in the common good, but are very personal.
SPIEGEL: Do the donations also have to do with the fact that the idea of state and society is such different one in the United States?
Krämer: Yes, one cannot forget that the US has a desolate social system and that alone is reason enough that donations are already a part of everyday life there. But it would have been a greater deed on the part of Mr. Gates or Mr. Buffet if they had given the money to small communities in the US so that they can fulfill public duties.
SPIEGEL: Should wealthy Germans also give up some of their money?
Krämer: No, not in this form. It would make more sense, for example, to work with and donate to established organizations.
6.8.10
Obama was thought of as good, Mais où sont les neiges d'antan?
Obama started by making me believe there was hope in politics. By and large, he used to speak my mind, as it were. I understood for the first time what people might have meant when saying that Kennedy was the president of their generation, despite my being so neutral about the whole affair. So, either Obama was channeling the zeitgeist, or the White House moves according to its own logic, anchored in the preservationist axioms of the elite so you either swim with its under-current or sink. This last point still brings me to ask, how was FDR possible? Unless Obama needs a worsening of the crisis to get us there… But you know, one never bathes in the same river.
Have a look at the recent talk between Wilbur Ross and Charlie Rose. The money people would have no problem with higher taxes, and the citizenry would take some hardship. All that’s needed is a dual sense of purpose/direction and justice.
Have a look at the recent talk between Wilbur Ross and Charlie Rose. The money people would have no problem with higher taxes, and the citizenry would take some hardship. All that’s needed is a dual sense of purpose/direction and justice.
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