January 17, 2012

I become weary of talk of "the American dream," "freedom," and similar patriotic slogans because too often they are cover for something in which we have no reason to take pride. However, at least once a year, on Martin Luther King Day, I abandon cynicism and celebrate those words; to him they meant something.

Eugene Robinson, writing in The Washington Post, noted the aptness of the placement of the King statue, between the Jefferson Memorial, "which honors the man whose stirring words now apply to all Americans, not just a few," and Lincoln Memorial, "a tribute to a leader who shepherded the nation through days much darker than these," and started the process by which the principles of the Declaration became applicable to all. In his famous 1963 speech, King put it this way:

Five score years ago, a great American, in whose symbolic shadow we stand today, signed the Emancipation Proclamation. This momentous decree came as a great beacon light of hope to millions of Negro slaves who had been seared in the flames of withering injustice. It came as a joyous daybreak to end the long night of their captivity.

Dr. King did not pretend that the battle for a share of Jefferson’s vision was over:

. . . One hundred years later, the Negro is still languishing in the corners of American society and finds himself an exile in his own land. So we have come here today to dramatize a shameful condition.

. . . When the architects of our republic wrote the magnificent words of the Constitution and the Declaration of Independence, they were signing a promissory note to which every American was to fall heir. This note was a promise that all men, yes, black men as well as white men, would be guaranteed the unalienable rights of life, liberty, and the pursuit of happiness.

It is obvious today that America has defaulted on this promissory note insofar as her citizens of color are concerned. . . .

If any people had right to reject Americanism, to reject the notion of a shared heritage, it was those whose ancestors had been kidnaped, sold and enslaved by men mouthing the virtues of America, but King didn’t do that. He began his speech by referring to "the history of our nation." He didn’t make his indictment in terms of the irrelevance of American principles, or of their falsity, but as a demand that they be applied. He recognized and celebrated our founding principles and merely argued that we should live up to them:

I say to you today, my friends, even though we face the difficulties of today and tomorrow, I still have a dream. It is a dream deeply rooted in the American dream.

I have a dream that one day this nation will rise up and live out the true meaning of its creed: "We hold these truths to be self-evident: that all men are created equal."

Would that every reference to our heritage and principles could be so valid.

____________________

There is another theme to King’s speech: faith. I have been critical of politicians who invoke religion, not least because doing so implies — or shouts — that a some partisan or interested program is God’s will. However, I’ve clung to an ill-defined exception to be applied where the appeal is not to doctrine but to moral principle. King’s address is an example. I would like to be able to add another qualification, that the issue be above politics, but that isn’t possible. Any serious social issue is political in the broad sense, and the campaign for civil rights for black people certainly had its political aspect. Whether or not my rationale makes any sense, I always am moved by these two passages, the second of which closed his speech:

I have a dream that one day every valley shall be exalted, every hill and mountain shall be made low, the rough places will be made plain, and the crooked places will be made straight, and the glory of the Lord shall be revealed, and all flesh shall see it together.

***

. . . From every mountainside, let freedom ring.

And when this happens, when we allow freedom to ring, when we let it ring from every village and every hamlet, from every state and every city, we will be able to speed up that day when all of God's children, black men and white men, Jews and Gentiles, Protestants and Catholics, will be able to join hands and sing in the words of the old Negro spiritual, "Free at last! free at last! thank God Almighty, we are free at last!"

January 14, 2012

As usual, the current political campaign in part involves a war of words. The choice of terminology plays a large part in defining the issues, and defining the issues goes a long way toward deciding them. One of the current debates is whether to use the word "capitalism."

Republican pollster Frank Luntz recently offered this advice: "Conservatives should not be defending capitalism. They should be defending economic freedom. And there is a difference. The word capitalism was created by Karl Marx to demonize those people who make a profit. We’ve always talked about the free enterprise system or economic freedom." ¹ That may be questionable economic or linguistic history, but it’s good political advice: wrapping business practices in the patriotic bunting of freedom, or liberty, always has worked. Calling business "free enterprise" cloaks a multitude of sins. Referring to the free market or, more daringly (leaving out freedom) "the market" or the "market system," also works, as those concepts or labels can be held up as alternatives to (shudder) socialism. However, thanks in part to the Occupy publicity, capitalism and the market have taken a hit, so conservatives probably ought to heed Luntz’s suggestion and harp on "freedom."

A somewhat similar point was made by John Kay, writing in The Financial Times. Referring to a series of articles on "Capitalism in Crisis," he said, "The Financial Times is debating capitalism, but what it is really debating is the future of the market economy." Luntz had dismissed "capitalism" as a Marxist term, but Kay exonerated Marx, claiming that he "never used the word capitalism. But after the publication of Das Kapital, the term came to describe the system of business organisation which had made the industrial revolution possible."² So, to him,"capitalism" is a positive word, but he agrees that it should be abandoned.

(Whether he is correct about Marx may depend on the translation of Capital being used; perhaps the one he relies on doesn’t use the word. I have a copy of Volume I, translated by Samuel Moore and Edward Aveling, which uses "capitalism" once; referring to another author, Marx said that he "betrays the innermost secret soul of English capitalism."³ However, even identifying the translation may not answer the question. A version of Volume I on the web, attributed to the same translators, uses "capitalism" twice, the other time in the phrase "in the period of capitalism," which my book renders "in the capitalist period."⁴ It hardly matters. Marx used the terms "capitalist" repeatedly, as a noun and as an adjective, often substituting "capitalistic" as the latter.)

Kay’s principal point is that "capitalism’ is an outdated word. Today’s business leaders are not capitalists in the nineteenth-century sense. "Modern titans derive their authority and influence from their position in a hierarchy, not their ownership of capital." That is true, and making that clear might spare us blather about risk-taking and entrepreneurship. (It’s odd that a French term, difficult to pronounce or spell, would be the business buzz word. Even George W. Bush, Mr. Real ‘Murican, used it.)

Kay ended his article with this: "Sloppy language leads to sloppy thinking. By continuing to use the 19th-century term capitalism for an economic system that has evolved into something altogether different, we are liable to misunderstand the sources of strength of the market economy and the role capital plays within it." I certainly agree with the first sentence, but shifting the reference from capital to the market, standing alone, won’t lead to clear thinking. What is needed is a more sophisticated and realistic view of economics, including an awareness of the shortcomings of the market, both as a concept and as the basis of our system. Capitalism, free enterprise, the market, or whatever label next becomes fashionable describes a system which works well if and only if its inherent limitations and daners are recognized and appropriate duties and limitations are imposed.

However, the shift in the terms of reference will have to wait. Mitt Romney’s primary opponents are, in a nice twist on the linguistic tactic, turning "venture capitalism" into "vulture capitalism." That has led to a debate about the virtues of capitalism. Perhaps the C word will disappear during the final campaign, but Romney’s claim that Obama practices "crony capitalism" may keep it alive. No doubt we’ll hear more than enough about freedom and the market too.

________________________________

1. http://thinkprogress.org/ posted by Faiz Shakir on Jan 11, 2012
2. http://www.ft.com/intl/cms/s/0/86667196-3afc-11e1-b7ba-00144feabdc0.html#axzz1jBRguu00
3. Marx, Capital, Chapter XXIV, § 4 (Britannica Great Books, Vol. 50, p. 296)
4. Chapter XXIV, § 1: http://www.marxists.org/archive/marx/works/1867-c1/ ; cf. Britannica Great Books, Vol. 50, p. 290

December 28, 2011

It used to be possible, with only a modest amount of hypocrisy or ignorance, to watch A Christmas Carol and feel relief that the conditions Dickens described and Scrooge mocked or ignored had passed into the dustbin of history, banished by progress, material and moral. No longer.

Wealth

Scrooge was a piker. In 2007 (apparently the most data available) the cumulative wealth of the Forbes 400 was roughly the same amount of wealth held by the entire bottom fifty percent of American families. Six members of the Walton family had a combined worth equal to the total wealth of the entire bottom thirty percent.¹⁰⁴

Income

According to the Congressional Budget Office,

• For the 20 percent of the population with the lowest income, average real after-tax household income was about 18 percent higher in 2007 than it had been in 1979.

• For the 60 percent of the population in the middle of the income scale (the 21st through 80th percentiles), the growth in average real after-tax household income was just under 40 percent.

• For those just below the top, the 81st through 99th percentiles, average real after-tax household income grew by 65 percent.

• For the 1 percent of the population with the highest income, average real after-tax household income grew by 275 percent between 1979 and 2007.• Between 2005 and 2007, the after-tax income received by the top one percent exceeded the after-tax income of the remaining 80 percent.¹⁰⁵

From another report:

• The share of the nation’s income flowing to the top 1 percent of households increased from 16.9 percent in 2002 to 23.5 percent in 2007, a larger share than at any point since 1928.

• Income gains have been even more pronounced among those at the very top. The incomes of the top one-tenth of 1 percent of U.S. households have grown by 94 percent, $3.5 million per household, 2002 to 2007 (and more than 400 percent over the period from 1979 to 2005).

• The share of the nation’s income flowing to the top one-tenth of 1 percent of households is at the highest level since 1913, surpassing even the previous peak in 1928. ¹⁰⁶

The average Bush tax cut in 2011 for a taxpayer in the richest one percent is greater than the average income of the other 99 percent.¹⁰⁷

Not only do our numbers look awful absolutely, they do so relatively. The GINI index measures income inequality; the higher the number, the more unequal the distribution. The U.S., at 45, has the worst rating among developed nations. Scrooge’s United Kingdom is at 34, Canada at 32.1; the European Union average is 30.6, almost exactly that of Australia.¹⁰⁸

Poverty

An additional 2.6 million people fell into poverty in the United States last year, and the number below the official poverty line, 46.2 million people, is the highest in the 52 years the statistic has been kept. The poverty rate was 15.1% in 2010, the highest level since 1993. About 6.7 percent of the population, 20.5 million people, fell into deep poverty, defined by an income less than half the official poverty line. The number of uninsured Americans increased by 900,000 to 49.9 million.¹⁰⁹

Bah, humbug

As the problems resemble those of Dickens’ era, so do the responses of the insufficiently frightened rich:

Home Depot Co-founder Bernie Marcus, referring to Occupy protesters: “Who gives a crap about some imbecile? Are you kidding me?”

Home Depot Co-founder Ken Langone: “I am a fat cat, I’m not ashamed . . . If you mean by fat cat that I’ve succeeded, yeah, then I’m a fat cat. I stand guilty of being a fat cat.”

Former BB&T Bank CEO John Allison: “Instead of an attack on the 1 percent, let’s call it an attack on the very productive. This attack is destructive.”

Paychecx Inc. Founder Tom Golisano: “If I hear a politician use the term ‘paying your fair share’ one more time, I’m going to vomit."¹¹⁰

Visitation by ghosts won’t budge this lot.

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104. http://thinkprogress.org/economy/2011/12/09/385941/walmart-heirs-worth-30-percent-bottom/  
105. http://cbo.gov/ftpdocs/124xx/doc12485/10-25-HouseholdIncome.pdf
106. http://www.cbpp.org/cms/index.cfm?fa=view&id=2908 ;
http://www.nytimes.com/2011/11/04/opinion/oligarchy-american-style.html
107. http://thinkprogress.org/economy/2011/11/23/375654/bush-tax-cut-one-percent/
108. https://www.cia.gov/library/publications/the-world-factbook/fields/2172.html
109. http://www.nytimes.com/2011/09/14/us/14census.html?pagewanted=all
110. http://thinkprogress.org/economy/2011/12/20/393090/one-percent-call-occupy-imbeciles/

December 12, 2011

It is difficult to find a national television news broadcast with which I do not feel compelled to carry on a critical, irritated conversation. I went through PBS, ABC and CBS over a period of years and eventually settled on NBC.

My current complaint has to do with the treatment of weather-disaster news by NBC. Because TV news dwells on such events, large segments of broadcasts have been devoted to them. Some of the stories, including one on Saturday night, have included comments about the large number of major disasters, but I do not recall hearing any reference to global warming, let alone man-made climate change. Perhaps there has been a statement I missed, but certainly there has not been any meaningful discussion.

Why not? The network cannot be unaware of the issue. Does it really think that the science is uncertain? Is it so intimidated by the right that it daren’t broach the subject?

Next-day reruns of The Daily Show have moved to 6 p.m., opposite NBC News, and we’ve switched to watching those. Faux news at least addresses issues, and for real news, I can read the papers.

December 11, 2011

Usury, according to Black’s Law Dictionary, is
1. Historically, the lending of money with interest.
2. Today, the charging of an illegal rate of interest.
3. An illegally high rate of interest.

However, the second and third definitions virtually have fallen into the first, becoming relics of the past. That occurred in part because many state laws on maximum rates of interest have been superseded by federal law, which is friendly to banks. However, some state laws, including ours, set few limits; Washington’s law essentially is a comprehensive list of exceptions to the nominal limit of 12%.¹⁰² Therefore, between them they have made the definition of usury law —“A law that prohibits moneylenders from charging illegally high interest rates” — equally quaint. The result is to burden ordinary folk with oppressively high interest expenses.

The national average for credit cards is 14.43%; many, obviously, are far worse. Mortgage and auto loans, which are secured, are available at lower rates — the local average for the former is 4.25%, for the latter 5.87% — but there still is a huge spread between interest paid and interest charged. According to a list in the Sunday Seattle Times, the best money market fund yields 0.28%, with the average at about 0.02%. The national average for a 0ne-year CD is 0.35%; the average savings account pays about .2%.

The rates credit cards charge for cash advances, in other words loans, typically are even higher than the purchase rates. Discover recently sent me several checks, inviting me to use them for “cash when you need it” at the jaw-dropping rate of 23.99%, its “standard APR for cash advances.” Even that “will vary with the market based on the Prime Rate.” The prime rate is 3.25%, the lowest it has been since August, 1955, so the Discover rate has nowhere to go but up.

Pay day loans are far worse. They are short-term loans carrying nominal interest rates which sound high but not outrageous, until one notes that the rate is for a very short time period. Washington allows 15% on a fourteen-day loan, an annual rate of 390%.¹⁰³ Other states allow higher rates.

Savings rates presumably will rise whenever the economy recovers, narrowing the gap if interest charges don’t also rise. Still, it’s time for Congress and the legislatures to resurrect the concept of usury and impose rational limits on the cost of consumer credit. Not likely, though.

______________________________

102. See http://dfi.wa.gov/consumers/interest_rates_exception.htm
103. See http://www.paydayloaninfo.org/state-information/55 , a Consumer Reports site. The rate actually is 391.07% (15% ÷ 14 x 365)

November 30, 2011

On Tuesday The New York Times op-ed pages produced another example of ambivalence, or inconsistency, similar to those I mentioned on November 21.

Roger Cohen devoted his column to “the doctrine of silence,” by which he refers to the secrecy with which the present administration conducts various kinds of low-level warfare, including drone attacks and assassinations. The new policy is a “radical shift from President Bush’s war on terror,” but “has never been set out to the American people. . . . President Obama has gone undercover.” His opinion of the new departure is ambivalent: “I approve of the shift even as it makes me uneasy. One day, I suspect, there may be payback for this policy and this silence.”

Most of his discussion was devoted to the risks and benefits of the policy, rather than to secrecy, but his ambivalent approval persisted:

So why do I approve of all this? Because the alternative — the immense cost in blood and treasure and reputation of the Bush administration’s war on terror — was so appalling. In just the same way, the results of a conventional bombing war against Iran would be appalling, whether undertaken by Israel, the United States or a combination of the two.

There is another alternative: not killing people, a radical notion to be sure, but one which at least should be recognized as an option. To put it in strategic terms, are any of the people we target really a threat to us? Only if Mr. Cohen answers in the affirmative, and ignores any moral objections, could his first comment override his second: “So why am I uneasy? Because these legally borderline, undercover options . . . invite repayment in kind, undermine the American commitment to the rule of law, and make allies uneasy.”

At the end, he turned, more or less, to the secrecy issue: “Just because it’s impossible to talk about some operations undertaken within this doctrine does not mean the entire doctrine can remain cloaked in silence.” However, rather than asking the President to justify the doctrine of silence, Cohen wanted a speech approving his preference for limited, covert operations:

Of course [Obama] does not want to say much about secret operations. Still, as the U.S. military prepares to depart from Iraq . . . and the war in Afghanistan enters its last act [?], he owes the American people, U.S. allies and the world a speech that sets out why America will not again embark on this kind of inconclusive war and has instead adopted a new doctrine that has replaced fighting terror with killing terrorists.

Cohen seems to believe that the covert actions have contributed to “restoring America’s battered image.” It’s not clear to me how assassinations, by air or otherwise, including at least one of an American citizen, shielded from the public and unauthorized by Congress, restore our image, especially, as Cohen acknowledges, they “undermine the American commitment to the rule of law, and make allies uneasy.”

This doesn’t seem to be the season for clear thinking at the Times.

__________________________
101. Glenn Greenwald dissected Cohen’s column to make the point that reporters no longer question authority: “American journalists are the leading proponents not of transparency but of secrecy, not of accountability but of covert decision-making in the dark, not of the rule of law but the rule of political leaders.”

November 21, 2011

On November 14, The New York Times, in an opinion column and a house editorial, commented on the pseudo-tough mindset of many contemporary conservatives, as embodied in some of the Republican candidates for the presidency. The subject was waterboarding.

The column was by Frank Bruni, one of several new hires on the opinion page. He posed this question: “If we truly believe ourselves to be exceptional, a model for all the world and an example for all of history, then why would we practice torture? Specifically, should we waterboard prisoners?” He answered in the negative, while noting that several Republican candidates are for it despite stressing American exceptionalism. He also appeared to mock Rick Santorum’s suggestion of clandestine missions to kill Iranian scientists. He closed with this: “we have to be careful about how far we go — how merciless our strategies, how self-serving our positions — because the rightful burden of the leadership we insist on is behavior that’s better than everybody else’s, not the same or worse. Exceptionalism doesn’t mean picking and choosing when to be big and when to be small.”

I don’t know whether the parenthetical was ironic or was intended to be taken literally. I would more or less agree with his statement if it were the former. Unfortunately, that doesn’t seem to be the case, as revealed in the preceding paragraph: “We face difficult decisions and a tricky balancing act when it comes to keeping this country safe . . . . And there’s no doubt we can’t be as high-minded as we’d sometimes like. I for one am not losing any sleep over Awlaki.” In other words, we should be principled and exceptional except when it’s convenient not to be. Assassinating Iranian scientists isn’t a good idea, but assassinating an American citizen is OK. Torturing a suspect is bad, but obliterating one with a missile is not an occasion for lost sleep.

The Times editorial criticized the Republican candidates’ views on waterboarding, but it too managed to muddle a statement of principle, although on a different subject. It referred to Mitt Romney’s claim that, if he were elected, Iran would not have nuclear weapons, and pointed out that he didn’t explain how he would manage that. It added: “Mr. Obama prudently has not taken military action off the table — no president should — but war would be a disastrous option. It would only set back the program, not end it, and would fan anti-Israel and anti-American sentiment.” If war would be a disastrous choice — leaving aside whether it would be justified — why should it remain on the table?