Thursday, April 29, 2010
The cities, pension funds, universities, and other charities that have been ruined by the fall in the stock market (also called the economy) are looking for a place to put their anger. As in all such exercises, no one wants to acknowledge any fault for himself. As in the subprime mortgage mess, the easiest place to put it is on the borrowers, since they own no TV stations, newspapers or magazines. Even the fact that they were misled, or even lied to, does not erase all of their own participation in their losses. But the roots run deep. It is a fundamental belief of the brand of civics and economics we take in as children that the pursuit of self-enrichment by the rich and powerful will make us all into prosperous citizens. It is amazing how much contrary evidence there is to that creed, but it remains a pillar of the18th century movement called The Enlightenment. The Free Market, we are told, is what has made us rich in the XX Century, and can be relied upon to continue to do it. An extreme case is seen in Goldman Sachs. Many of their customers thought that they would never betray them for their own profit, even though the charter of The Enlightenment had no evidence for the belief that honesty is the best policy and Goldman would do best by being best. Actually, the Chicago school of economics claimed that Game Theory had proved that unbelievable statement. Still, it appears that many of us believe that the smoothest road to riches lies in being a junior partner to a successful crook. Every con man knows that the royal road to a scam lies in convincing the mark that they will together cheat a third person or, better yet, a company or a state. And so it was with the marks who bought the toxic assets, and in a sense that applies also to those who were induced to believe that they could buy without risk into a rising tide of house prices, based on lies about their ability to carry the loan. Goldman’s customers learned otherwise, to their cost.
Thursday, April 22, 2010
The tories, known as republicans, keep saying that they really favor wide-spread health care, but they insist that they want it to be paid by cutting federal benefits rather than adding to the debt. In this, they imagine they are presenting the face of fiscal restraint, rather than throwing the poor to the wolves. They keep hidden the idea that the bulk of the cost should be paid by those who have benefitted disproportionally from the changes of the past ten years and the cutting of high-level taxes. This cutting benefitted from tory politics and these were pursued relentlessly, with no concern for the enormous growth in the debt. It is clear that a reasonable policy would be to load the bulk of any rise in the cost of health care on the class that has benefitted so greatly and so irresponsibly from that dereliction of duty. However, the liberals have not answered that the reasonable source of the money would be from the richest quarter of the labor market, who have collected all the prizes in the past 40 years or more. Yet, oddly, the liberals do not make this argument in defense of fiscal responsibility, probably because of a sense that the idiots who have argued that taxes are optional and that taxing the rich might impede the recovery from the threat of Depression, these demagogues have hoodwinked the People to the degree that they are not about to mount the electoral barricades in defense of this kind of fiscal sense. The liberals are not even willing to rest on the example of B Clinton, who did raise taxes to clear away most of the debt until Cheney came along with his passion for what he must have imagined as world-dominating war. As long as they are silenced by the hypocritical claptrap from the right, they are abandoning the responsible route of taxing to pay the cost of a decent society. If they will not stand up for making the rich pay their some of their luxuries as the cost of health care for all, maybe the People will throw them out of Congress.
Thursday, April 8, 2010
The news this week concerns a 14-year old immigrant in a US HS, who was harassed and tortured by her classmates to the point that she just killed herself. The question of who was to blame and what is to be done about it highlights the role of punishment as a way of dealing with social disruption, and more basically the role of winning or losing as the dominant features of free market thinking, most especially in the US. Because the construction of individual failure or success continues to be treated as an indicator of personal worth, it is a way of deflecting any consideration of social organization as a shaper of individual lives. This elevates the status of competition in economic and social structure and plays down the role of cooperation, which is denounced as inefficient, as socialistic, and thus as leading to the gulags. In the meantime, personal achievement, even when accidental, is lauded as worthy through the powerful voices of those who have gotten money, even by the accident of birth or the workings of chance. In the case of the suicide, one is struck by the inadequacy of harsh punishment for those who have driven her to this action, and the equal meaninglessness of dismissing their viciousness as the actions of children. To lay the response at the door of competitive life is to run afoul of the rejection of social responsibility and the lauding of personal selfishness as the engine of progress. But we do know today that where personal competition and inequality are least, personal happiness, as reported by the people, is maximized. And in those countries, there seems to be the least need for punishment as a supposed deterrent to crime and antisocial behavior. In this time of trouble, there are ways to minimize the total of destructive self-castigation and share the available jobs to maximize the total well-being of the People, but those obsessed by the doctrine of personal worth or worthlessness will not hear of them. Then we must all live with the consequences.