Economist Michael Hudson writes that western economies are at a turning point. GDP growth consists increasingly of the build-up of financial overhead. The wealth gains are paper gains, not gains from real plant and equipment, and are increasingly concentrated in the hands of the one percent.

 

July 30, 2012 at 11:36:32

Escape From Economics

How to reconstruct the economy in order that it serves the needs of the 99% instead only of the needs of the 1%.

By Paul Craig Roberts (about the author)

Readers ask me from time to time to recommend a book from which they can learn about economics.

The problem with reading a book to learn economics that is taught in the universities and practiced in Washington is that economics is now a highly formalized subject based on abstract models and assumptions and has been mathematized. It is not that the subject is totally useless and without any applicability to real world problems. Rather, the problem is that the discipline both lags an ever-changing world and got some things wrong at the beginning. Consequently, learning economics places one inside a box where some of the tools and understanding provided are outdated and incorrect.

For example, every textbook will draw a picture of agriculture as the perfect example of competitive markets in which "no producer's output is large enough to affect price." This made sense when one-third of the US work force was on family farms. Today, American agriculture is dominated by corporations and agribusiness. Additionally, part of the disastrous financial deregulation pushed by no-think economists and special interests was the removal of position limits on speculators. Formerly, speculators smoothed agricultural and commodity markets by buying and selling in order to stabilize price over periods when supply and demand were out of balance. Now speculators can dominate markets and rig prices to the benefit of their profits.

There are many such examples where economics no longer speaks to the real world.

Two other examples will suffice:

Most intelligent people are aware that natural resources are finite, including the environment's ability to absorb the wastes or pollution from productive activities (see for example, Jared Diamond, Collapse, 2005). But few economists are aware, because economists assume that man-made capital is a perfect substitute for nature's capital. This assumption implies that there are no finite environmental limits to infinite economic growth. Lost in such a make-believe world, economists neglect the full cost of production and cannot tell if the value of the increases in GDP are greater or less than the full cost of producing it.

Economists have almost universally confused jobs offshoring with free trade. Economists have even managed to produce "studies" purporting to show that a domestic economy is benefitted by being turned into the GDP of some other country. Economists have managed to make this statement even while its absurdity is obvious to what remains of the US manufacturing, industrial, and professional skilled (software engineers, for example) workforce and to the cities and states whose tax bases have been devastated by the movement offshore of US jobs.

The few economists who have the intelligence to recognize that jobs offshoring is the antithesis of free trade are dismissed as "protectionists." Economists are so dogmatic about free trade that they have even constructed a folk myth that the rise of the US economy was based on free trade. As Michael Hudson, an economist able to think outside the box has proven, there is not a scrap of evidence in behalf of this folk myth (see America's Protectionist Takeoff 1815-1914).

My advice to readers who wish to develop economic comprehension is to begin with the outside-the-box economists who are addressing real issues. For example, Herman E. Daly and John B. Cobb's For the Common Good is accessible to ordinary readers willing to take the effort to google the definitions of unfamiliar terms. However, the most important development in trade theory is not. Global Trade and Conflicting National Interests by Ralplh E. Gomory and William J. Baumol (MIT Press, 2000) is apparently even over the heads of professional economists, who prefer to babble on ignorantly about the "benefits of free trade" than to learn what they don't know. Nevertheless, readers should understand that the case for free trade will never been the same after its dissection by Gomory and Baumol.

With this preface to the column, I now turn to its subject: economist Michael Hudson. Hudson is totally outside the matrix in which economists imprison themselves. Hudson doesn't live in the artificial reality of economists or shill for corporations and Wall Street.

A person can learn a lot from Hudson. His book, Trade, Development and Foreign Debt (2009) explains how foreign trade and economic development have been used to concentrate economic power in the hands of dominant nations. What is really going on is covered up with do-good verbiage and formal models. In reality, trade and development are ways to colonize countries that think they are independent. (Another good book on this subject is Michel Chossudovsky's The Globalization of Poverty.)

Perhaps the best place to begin with Hudson is his latest book, The Bubble and Beyond, which should be available within a few days of the appearance of this column. In this book Hudson addresses the crisis in the economy and the crisis in the discipline of economics. From this book you can understand not only the crisis but also why economists have misdiagnosed the crisis and are applying incorrect remedies.

Hudson shows that a central problem is that economic theory ignores the role of debt in the economy. Economic theory also pretends that economic policy, such as the Federal Reserve's monetary policy, serves the public's interest rather than the interests of powerful private interests.

As Lenin and others predicted, industrial capitalism has turned into finance capitalism. Finance capitalism does not finance or create new real investments such as manufacturing facilities. Instead, finance capitalism functions as a rentier. It leverages debt and extracts interest payments (and today taxpayer bailouts for its over-leveraged gambles). Finance capitalism flourishes by converting more and more of society's resources into payments to itself.

One result is that markets cease to expand and economies cease to grow as austerity is imposed to service the build-up in debt. Austerity pushes economies down as consumption and investment are cut back in order to service debt. Hudson concludes that the result is that bankers now receive the rents (a form of unearned income) that once flowed to the landed aristocracy. Unlike the aristocracy, who were dispossessed of their rents, the bankers have not been.

Hudson knows the history of economic thought and economic history. Reading The Bubble and Beyond lets readers see how economic ideas developed in ways that leave economists unable to perceive the real character of the problems that are challenging them. Trapped in the matrix that they have constructed for themselves, economists are unable to devise solutions.

Hudson writes that western economies are at a turning point. GDP growth consists increasingly of the build-up of financial overhead. The wealth gains are paper gains, not gains from real plant and equipment, and are increasingly concentrated in the hands of the one percent. Financial earnings are extracted from the earnings of tangible capital and labor. Matt Taibbi captured the point with his imagery of Goldman Sachs as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."

My suggestion is that you read Hudson along with Taibbi's Griftopia, Nomi Prins' It Takes A Pillage, Gretchen Morgenson and Joshua Rosner's Reckless Endangerment, and Daly and Cobb's For the Common Good. Then if you ever do study economics, you will be armored against being ensnared in the matrix that produces economists as shills for finance capitalism, environmental destruction, and the offshoring of the economy.

Everyone always wants a solution. Hudson offers suggestions how to reconstruct the economy in order that it serves the needs of the 99% instead only of the needs of the 1%.

Get busy. Reading these books will do you much greater good than playing video games, watching TV or hanging out in bars. Our country needs a larger informed younger generation to replace the smaller informed older generation.
Note to readers: Accompanying my column today is an article in the guest section by Herman Daly (titled: "Nationalize Money, Not Banks"). For those looking for solutions to the banking crisis, this astute and highly experienced economist tells you what can be done.


http://www.paulcraigroberts.org/

Paul Craig Roberts, former Assistant Secretary of the US Treasury and Associate Editor of the Wall Street Journal, has held numerous university appointments and is Contributing Editor to Gerald Celente's Trends Journal. His columns are at (more...)
 

The views expressed in this article are the sole responsibility of the author
and do not necessarily reflect those of this website or its editors.

Politics

Four Spending Myths That Could Wreck Our World

7/17/2012 3:19:02 PM

 

by Mattea Kramer

 

Tags: Barack Obama, Federal Budget, Economics, Health Care, Military Spending, Deficit, Great Recession, Tom Dispatch, Mattea Kramer.

This post originally appeared on TomDispatch. 

We’re at the edge of the cliff of deficit disaster! National security spending is being, or will soon be, slashed to the bone! Obamacare will sink the ship of state!

Each of these claims has grabbed national attention in a big way, sucking up years’ worth of precious airtime. That’s a serious bummer, since each of them is a spending myth of the first order. Let’s pop them, one by one, and move on to the truly urgent business of a nation that is indeed on the edge.

Spending Myth 1: Today’s deficits have taken us to a historically unprecedented, economically catastrophic place.

This myth has had the effect of binding the hands of elected officials and policymakers at every level of government. It has also emboldened those who claim that we must cut government spending as quickly, as radically, as deeply as possible.

In fact, we’ve been here before. In 2009, the federal budget deficit was a whopping 10.1% of the American economy and back in 1943, in the midst of World War II, it was three times that -- 30.3%. This fiscal year the deficit will total around 7.6%. Yes, that is big. But in the Congressional Budget Office’s grimmest projections, that figure will fall to 6.3% next year, and 5.8% in fiscal 2014. In 1983, under President Reagan, the deficit hit 6% of the economy, and by 1998, that had turned into a surplus. So, while projected deficits remain large, they’re neither historically unprecedented, nor insurmountable.

More important still, the size of the deficit is no sign that lawmakers should make immediate deep cuts in spending. In fact, history tells us that such reductions are guaranteed to harm, if not cripple, an economy still teetering at the edge of recession.

A number of leading economists are now busy explaining why the deficit this year actually ought to be a lot larger, not smaller; why there should be more government spending, including aid to state and local governments, which would create new jobs and prevent layoffs in areas like education and law enforcement. Such efforts, working in tandem with slow but positive job growth in the private sector, might indeed mean genuine recovery. Government budget cuts, on the other hand, offset private-sector gains with the huge and depressing effect of public-sector layoffs, and have damaging ripple effects on the rest of the economy as well.

When the economy is healthier, a host of promising options are at hand for lawmakers who want to narrow the gap between spending and tax revenue. For example, loopholes and deductions in the tax code that hand enormous subsidies to wealthy Americans and corporations will cost the Treasury around $1.3 trillion in lost revenue this year alone -- more, that is, than the entire budget deficit. Closing some of them would make great strides toward significant deficit reductions.

Alarmingly, the deficit-reduction fever that’s resulted from this first spending myth has led many Americans to throw their support behind de-investment in domestic priorities like education, research, and infrastructure -- cuts that threaten to undo generations of progress. This is in part the result of myth number two.

Spending Myth 2: Military and other national security spending have already taken their lumps and future budget-cutting efforts will have to take aim at domestic programs instead .

The very idea that military spending has already been deeply cut in service to deficit reduction is not only false, but in the realm of fantasy. The real story: despite headlines about “slashed” Pentagon spending and “doomsday” plans for more, no actual cuts to the defense budget have yet taken place. In fact, since 2001, to quote former Defense Secretary Robert M. Gates, defense spending has grown like a “gusher.” The Department of Defense base budget nearly doubled in the space of a decade. Now, the Pentagon is likely to face an exceedingly modest 2.5% budget cut in fiscal 2013, “paring” its budget down to a mere $525 billion -- with possible additional cuts shaving off another $55 billion next year if Congress allows the Budget Control Act, a.k.a. “sequestration,” to take effect.
But don’t hold your breath waiting for that to happen. It’s likely that lawmakers will, at the last moment, come to an agreement to cancel those extra cuts. In other words, the notion that our military, which has been experiencing financial boom times even in tough times, has felt significant deficit-slashing pain -- or has even been cut at all -- is the Pentagon equivalent of a unicorn.

What this does mean, however, is that lawmakers heading down the budget-cutting path can find plenty of savings in the enormous defense and national security budgets. Moreover, cuts there would be less harmful to the economy than reductions in domestic spending.

A group of military budget experts, for example, found that cutting many costly and obsolete weapons programs could save billions of dollars each year, and investing that money in domestic priorities like education and health care would spur the economy. That’s because those sectors create more jobs per dollar than military programs do. And that leads us to myth three.

Spending Myth 3: Government health-insurance programs are more costly than private insurance.

False claims about the higher cost of government health programs have led many people to demand that health-care solutions come from the private sector. Advocates of this have been much aided by the complexity of sorting out health costs, which has provided the necessary smoke and mirrors to camouflage this whopping lie.

Health spending is indeed growing faster than any other part of the federal budget. It’s gone from a measly 7% in 1976 to nearly a quarter today -- and that’s truly a cause for concern. But health care costs, public and private, have been on the rise across the developed world for decades. And cost growth in government programs like Medicare has actually been slower than in private health insurance. That’s because the federal government has important advantages over private insurance companies when it comes to health care. For example, as a huge player in the health-care market, the federal government has been successful at negotiating lower prices than small private insurers can. And that helps us de-bunk myth number four.

Spending Myth 4: The Affordable Care Act -- Obamacare -- will bankrupt the federal government while levying the biggest tax in U.S. history.

Wrong again. According to the Congressional Budget Office, this health-reform legislation will reduce budget deficits by $119 billion between now and 2019. And only around 1% of American households will end up paying a penalty for lacking health insurance.

While the Affordable Care Act is hardly a panacea for the many problems in U.S. health care, it does at least start to address the pressing issue of rising costs -- and it incorporates some of the best wisdom on how to do so. Health-policy experts have explored phasing out the fee-for-service payment system -- in which doctors are paid for each test and procedure they perform -- in favor of something akin to pay-for-performance. This transition would reward medical professionals for delivering more effective, coordinated, and efficient care -- and save a lot of money by reducing waste.

The Affordable Care Act begins implementing such changes in the Medicare program, and it explores other important cost-containment measures. In other words, it lays the groundwork for potentially far deeper budgetary savings down the road.

Having cleared the landscape of four stubborn spending myths, it should be easier to see straight to the stuff that really matters. Financial hardship facing millions of Americans ought to be our top concern. Between 2007 and 2010, the median family lost nearly 40% of its net worth. Neither steep deficits, nor disagreement over military spending and health reform should eclipse this as our most pressing challenge.

If lawmakers skipped the myth-making and began putting America’s resources into a series of domestic investments that would spur the economy now, their acts would yield dividends for years to come. That means pushing education and job training, plus a host of job-creation measures, to the top of the priority list, and setting aside initiatives based on fear and fantasy.

Mattea Kramer, a TomDispatch regular , is senior research analyst at the National Priorities Project and lead author of the new book A People’s Guide to the Federal Budget.

Follow TomDispatch on Twitter @TomDispatch and join us on Facebook, and check out the latest TD book, Terminator Planet: The First History of Drone Warfare, 2001-2050.

Copyright 2012 Mattea Kramer
Image by Brendan C, licensed under Creative Commons.

Read more: http://www.utne.com/politics/four-spending-myths.aspx#ixzz223mjFBOy

How Powerful Interests Want to Keep Us at One Another’s Throats Rather Than Working Together

BELIEF

AlterNet / By James Rohrer

"Us vs Them": A Simple Recipe to Prevent Strong Society from Forming

Powerful interests want to keep us at one another’s throats rather than working together.

July 27, 2012  |  

 

 

 

My Uncle Richard did not need to die prematurely. He was a victim of the most relentless killer the world has ever known: Us and Them. This assassin can slay victims in countless ways. In my uncle’s case, it looked like either a stroke or medical malpractice. But it really was Us and Them.

Richard had left our Appalachian family farm at the tag end of the Great Depression. He moved to a big city in New York, got a job with a rising company, and soon he became management. He made a bundle, joined a country club, had a good life, but got burned out. When I was about ten years old, he decided to take early retirement and move back home to the farm. He wanted out of the city, out of the rat race, and back to nature. Soon after he returned, he went to our local small town doctor for a physical exam. He felt fine. But the doctor told him that he needed immediately to stop taking a medication that his family physician in New York had prescribed. Uncle Richard derisively ignored the advice. His New York doctor was an old friend—a member of the country club in fact—while the small town doctor was a refugee from the Soviet Union. This was during the Cold War, when most Americans imagined that nothing in the Soviet Union could possibly be up to American standards, and certainly not medical training. The last time I ever saw my Uncle, he was fuming about the “damned Russkie.” “Can you imagine the nerve of that damned Russkie, thinking he knows more than my doctor?”

Two weeks later Uncle Richard was dead. The coroner’s report made it clear: he should have listened to the Russkie.

My uncle was not particularly stubborn or foolish. He was just being human. We humans are by nature social creatures, even the most introverted of us, and we tend to trust and follow the thinking of the groups with which we identify. Some of these groups are small and select, like the country club or the gals we meet at the bar every Wednesday night. Others groups are bigger but still rather specific, like Orlando Magic fans or the members of the ACLU. Still others are larger yet, “imagined communities” like America or Great Britain. Others are transnational, like Christianity or Islam (also imagined communities). Our groups define “us” and exert powerful influence on how we think, even how we feel, and how we behave in society.

By definition, of course, every group creates “Them”— they are all the ones who are not in our group. They may not be hostile to us; we may be peacefully disposed to them. In that case we will be friendly when we meet them; heck, we may even invite them to sit at the table with us or join us at the bar. We may even actively seek to recruit them, to convert them into “us.”

But most groups have some set of outsiders—some particular slice of the vast population that is “them” –that serves a very special symbolic function in their cosmos. These are members of other groups that believe things or advocate things that our group opposes. They are the enemy.

Many groups, in fact, are formed specifically in opposition to some other group, and thus are defined precisely by their competition or conflict with “Them.” In this case, between “us” and “them” there can be nothing but implacable hostility.
Conflict, often low level, but sometimes violent, is endemic to human social life. It is built into the sociology of groups. “Us and Them” cannot be totally eradicated without eliminating human social groups altogether. Although conflicting social groups need not be bitterly oppositional, they often become so. And when they are in clear opposition, they do not necessarily turn violent, yet the violence springs up all too easily.

We all know this. Those who have taken courses in sociology or political science have studied it in school. Others only need to watch TV for ten minutes or reflect thoughtfully upon their personal experiences.

We take “us and them” for granted and fail to reflect upon the terrible political implications for everybody when groups are not playing nice together. Throughout history, political elites have manipulated social groups to achieve and maintain power. Turning “us against them” has sadly been a primary tactic employed by rulers or would be rulers since the dawn of history. Near the start of Europe’s colonial age, colonizers constructed “us and them” categories called races that have become a terrible permanent part of human culture. Throughout the industrial era, factory owners have pitted “us against them” to divide workers so that they would not organize unions. And in the last two generations Republicans have masterfully used wedge politics-- pitting us against them -- to gain and keep power and to implement policies that a clear majority of the populace dislikes, but apparently cannot find any effective way to change.

We cannot reverse corrupt policies that benefit only a powerful few because our society is fragmented into rival competing groups of us and them. Too many of us care more about the beliefs and agendas of our particular group than the common threats to all groups. To be sure, we are likely to say (and probably even believe) that our primary loyalty is to humanity; that our group is not exclusive; that WE are trying to make the world better for everybody dammit but we cannot because of THEM. But the truth is, when we actually confront the difficult task of finding common ground between us and them, we tend to throw in the towel rather quickly. Sometimes it just seems easier to fight “them” than try to break through our differences in order to build a more democratic and humane political system for everybody. Perhaps some of us even fear that if we sit down at the table to make peace with “them,” the very reason for our group’s existence will dissolve and we would no longer know who we are.

That a mere 400 individuals in this constitutional republic could possess as much wealth as 150,000,000 fellow citizens, and that the government would protect their right to keep it, would be unimaginable in any other context. Our fragmentation is an almost insurmountable barrier to effective political action that would move us toward a significantly more democratic reality. There are so many different contending groups—so many different varieties of us and them—that forging a cohesive majority seems all but a hopeless pipe dream.
Although we live in an irreducibly pluralistic world, we have yet to learn how to function as a pluralistic democracy. Sadly, even those of us who belong to groups that are pledged to tolerance and inclusiveness can drop the ball as readily as those who are self-consciously exclusive. Many commentators of various ideological stripes have lately been sounding the alarm about the apparent erosion of civil discourse in our society, about the toxic negativity of our media and our elections. The level of social polarization -- and the shrillness of our rhetorical warfare -- seems to be escalating. We all feel it. Many of us worry about it. Most of us say that we want it to stop. But too often we ourselves contribute to it--including me.

To restore civil discourse and bring down the level of polarization, we need to learn new ways of relating together as us and them. If we want to preserve any vestige of democracy, we will need a fast learning curve.

I recently posted an article suggesting that secular progressives hurt the cause of progressive social change by stereotyping religious believers and using needlessly offensive language when they write about “them.” I knew that I was challenging perhaps the most volatile example of the “us and them” dynamic (and the one that Republicans have exploited most profitably), so I fully expected the kind of response that the article elicited. I received many grateful emails from other readers who shared at least part of my point of view, but of course I also drew many negative criticisms.

Using the comment thread as a primary source document -- evidence of where our society stands at this moment in history—is sadly instructive. It demonstrates that people who belong to groups that are committed to rational analysis and social tolerance are nonetheless capable of verbally abusing others in language that can reasonably be defined as bullying or even “hate speech” when they imagine that they are addressing some hated “them” and when they are shielded by the cloak of anonymity.

But the Web by its very nature is public, global, and open to all of the countless social groups in the world (unless our corporate elite manage to gain control of the Web too). Unless you have privacy filters in place (which would defeat the whole purpose of a political site like AlterNet), even a website that is owned by your “own kind” and dedicated to your own agenda will still be accessed by people who are “them.” Others will check you out and what they find on your site will influence their opinion of the cause that is so dear to your heart. What you post on the Web, and the language that you employ, has inescapable political consequences. This is true not only of bloggers and writers who publicly sign their names, but equally the case with the countless nameless folk who contribute comments.

In Atheism: A Very Short Introduction (Oxford, 2003), Julian Baggini makes this very pertinent point. “I am not convinced,” Baggini writes,
that a strong case can be made that religion is essentially and especially harmful. Nor do I

believe that a firm belief in the falsity of religion is enough to justify militant opposition to it.

At root . . . my opposition to militant atheism is based on a commitment to the very values

that I think inspire atheism: an open-minded commitment to the truth and rational enquiry. These are rightly called values because they express not only claims about what is true but about what we feel to be most important. Hostile opposition to the beliefs of others combined with a dogged conviction of the certainty of one’s own beliefs is . . . antithetical to such values. Reason and argument are not just tools to be used to win over converts. They are processes that need to be engaged with, and to engage in them with other people one needs to be open to their alternative viewpoints.

Baggini concludes with the warning that reason and argument cannot be engaged properly “if they are seen as battering rams to destroy the edifice of religious belief.” (p. 106)

There are too many battering rams in the blogosphere. I am not pointing my finger at every militant Atheist. I am not pointing my finger at every Progressive. I am certainly not denying that “they” (whoever they may be) are also guilty. But given the commitment to democracy that progressives typically profess, it is disappointing that we do not do a better job at keeping our discourse civil.
A couple of years ago I was teaching a college class on American Democracy. I sent my students to various political sites, including AlterNet, to get a range of viewpoints on the issues that we were discussing in class. I encouraged my students to share their own opinions online, to leave comments on any articles that hit a chord. One of my students, an eighteen year old from a small Nebraska town who was raised in the Catholic Church and a member of the Catholic student group on campus, responded to a post on AlterNet. The particulars of the article and the nature of her views are not relevant; her comment was thoughtful, polite and (unlike many thread comments) actually focused on an important point raised by the original article. Although I did not share her opinion, I thought that she had successfully raised legitimate questions, and of course I believe that she was engaging in a process that is fundamental to democracy.

In response to her thoughtful comment, she received a stream of terribly hurtful messages, including “Catholics can fuck themselves.” In any moral universe, this is not rational discourse. It is simply intolerant meanness. To try to justify it by an appeal to freedom of speech is absurd. I am a member of the ACLU, and I will defend to my last breath the right of a fool to speak foolish things, just as the ACLU has defended the right of the Klan to spout hatred. But let’s not kid ourselves. It IS hatred, it is not moral, and I repeat my caution that such remarks do indeed harm the cause of progressive social change.

What kind of democracy do we who call ourselves “progressives” imagine? We know that we are a diverse constellation of groups (and we also know that many of our fellow citizens would never call themselves progressives at all). Some of us are especially committed to racial justice, and others more deeply involved in the struggle for gender equality. Some of us exhaust ourselves in the fight for a cleaner environment, and others are more involved with LGBT issues. Nobody has the time and energy to be deeply invested in everything, and we each choose our own place to fight. The only common denominator is that all of us are in some sense dissenters from the current power system, and we dare to imagine that our world could be more peaceful, more just, and healthier if we could change the system.

But change it to what? Have we really dared to imagine what a new system would look like, or are we so intently focused on the advancement of our particular agendas that we do not have time or inclination to ask fundamental questions?

The fundamental questions need to be raised, because what we imagine—no matter how inchoate it may be—influences the way that we act and the choices that we make every day. Nothing is more immediately practical and political than imagination.

What sort of society do we imagine? Have you ever wondered what we might do if we ever managed to get enough votes to control the White House, the Senate and the House, change the Supreme Court and keep power long enough to implement fundamental changes? Do we even have the foggiest notion what sort of society we could realistically expect to create?

Here is part of my imagined progressive future: a community of communities. I have to confess that I did not come up with this myself. The term was suggested to me by Diane Eck, a marvelous scholar of religion at Harvard who has written much about the nature of religious pluralism and democracy. If readers are not familiar with Eck’s work, I urge them to run (not walk) to their library or bookstore and get reading. In her beautiful meditation entitled Encountering God: A Spiritual Journey from Bozeman to Banaras (Beacon Press, 1993), Eck writes the following:

“In developing a sense of we that is wider than the we of culture, religion or clan, it will be important to have an image of what kind of human relatedness we wish to bring into being. People of each religious tradition have dreams of what the world should ideally be and how we should all be related to one another even though we are not all the same. Glimpsing one another’s dreams is an important step in beginning to reimagine the we. Do we imagine ourselves to be separate but equal communities, concerned primarily with guarding one another’s rights in a purely civic construction of relatedness? Do we imagine ourselves to be related as parts of an extended family, or as many families of faith? Do we imagine ourselves to be religious communities competing in goodness and in righteousness, as the Qur’an puts it? Imagining a we does not mean leaving our separate communities behind, but finding increasingly generative ways of living together as a community of communities. To do this, we all must imagine together who we are.”

To imagine together who we are will require us to loosen the boundaries between Us and Them, to take seriously the need to move past diatribes and to engage in genuine dialogue with people who are truly different from us and who are not about to relinquish their convictions simply because we wish they would. After two thousand years of evangelism, Christians have still not converted the entire world to faith in Jesus, and they are probably not going to do so in another two thousand. And Atheism, which has been around longer than Christianity, is not likely going to win the world over either. But Christians and Atheists, along with members of many, many other social groups, must have confidence that we will welcome them and fight to protect their secure place in the community of communities that would constitute any authentically democratic we.

Is genuine dialogue between groups with deeply opposed beliefs possible and can some sort of common ground come out of such dialogue? Yes and yes, but not easily. Anthropologist Jack David Eller, who is an Atheist, has written the most comprehensive study of religious violence yet published: Cruel Deeds, Virtuous Violence: Religious Violence across Culture and History (Prometheus, 2010). Like Baggini, Eller rejects as “ultimately unhelpful” the proposed eradication of religious belief: “Religion is nowhere near disappearing in the modern world, and attacks on it only tend to strengthen and mobilize it.” Despite their philosophical differences Eller suggests a future that is remarkably similar to Methodist Diane Eck’s, one in which the presence of many groups with conflicting worldviews is respected and people work cooperatively to minimize the “group effect” by intentionally seeking to establish more “porous” boundaries between “Us and Them.” It is crucial that members of every group come to see that what we hold in common is far more vital than what differentiates us. Warring groups who have caused each other pain will especially have a difficult time learning to “rehumanize” each other.

Reconciliation and Trust will not be achieved without much effort, struggle and mutual commitment to one another. Ironically, perhaps, Eller the atheist admits that promoting such an enlarged vision “is something that religion can do better than any other human thought system.” (p. 363)

We have a lot of rehumanizing to do. There are powerful political and economic interests that want to keep us fragmented and at one another’s throats rather than working together to establish a more inclusive democracy. They will do all they can to stir continued discord between groups and to use wedge politics to defeat our aspirations for meaningful change. Can progressives of all persuasions, no matter what our primary interest groups may be, at least agree that we will stop doing their job for them?

James Rohrer is a professor of history at University of Nebraska-Kearney.

Poverty in America: How Much Will Mitt Romney Increase It?

Published on Sunday, July 29, 2012 by the New York Times

Poverty in America: Why Can’t We End It?

by Peter Edelman

 

RONALD REAGAN famously said, “We fought a war on poverty and poverty won.” With 46 million Americans — 15 percent of the population — now counted as poor, it’s tempting to think he may have been right.

Look a little deeper and the temptation grows. The lowest percentage in poverty since we started counting was 11.1 percent in 1973. The rate climbed as high as 15.2 percent in 1983. In 2000, after a spurt of prosperity, it went back down to 11.3 percent, and yet 15 million more people are poor today.




At the same time, we have done a lot that works. From Social Security to food stamps to the earned-income tax credit and on and on, we have enacted programs that now keep 40 million people out of poverty. Poverty would be nearly double what it is now without these measures, according to the Center on Budget and Policy Priorities. To say that “poverty won” is like saying the Clean Air and Clean Water Acts failed because there is still pollution.

With all of that, why have we not achieved more? Four reasons: An astonishing number of people work at low-wage jobs. Plus, many more households are headed now by a single parent, making it difficult for them to earn a living income from the jobs that are typically available. The near disappearance of cash assistance for low-income mothers and children — i.e., welfare — in much of the country plays a contributing role, too. And persistent issues of race and gender mean higher poverty among minorities and families headed by single mothers.

The first thing needed if we’re to get people out of poverty is more jobs that pay decent wages. There aren’t enough of these in our current economy. The need for good jobs extends far beyond the current crisis; we’ll need a full-employment policy and a bigger investment in 21st-century education and skill development strategies if we’re to have any hope of breaking out of the current economic malaise.

This isn’t a problem specific to the current moment. We’ve been drowning in a flood of low-wage jobs for the last 40 years. Most of the income of people in poverty comes from work. According to the most recent data available from the Census Bureau, 104 million people — a third of the population — have annual incomes below twice the poverty line, less than $38,000 for a family of three. They struggle to make ends meet every month.

Half the jobs in the nation pay less than $34,000 a year, according to the Economic Policy Institute. A quarter pay below the poverty line for a family of four, less than $23,000 annually. Families that can send another adult to work have done better, but single mothers (and fathers) don’t have that option. Poverty among families with children headed by single mothers exceeds 40 percent.

Wages for those who work on jobs in the bottom half have been stuck since 1973, increasing just 7 percent.

It’s not that the whole economy stagnated. There’s been growth, a lot of it, but it has stuck at the top. The realization that 99 percent of us have been left in the dust by the 1 percent at the top (some much further behind than others) came far later than it should have — Rip Van Winkle and then some. It took the Great Recession to get people’s attention, but the facts had been accumulating for a long time. If we’ve awakened, we can act.

Low-wage jobs bedevil tens of millions of people. At the other end of the low-income spectrum we have a different problem. The safety net for single mothers and their children has developed a gaping hole over the past dozen years. This is a major cause of the dramatic increase in extreme poverty during those years. The census tells us that 20.5 million people earn incomes below half the poverty line, less than about $9,500 for a family of three — up eight million from 2000.

Why? A substantial reason is the near demise of welfare — now called Temporary Assistance for Needy Families, or TANF. In the mid-90s more than two-thirds of children in poor families received welfare. But that number has dwindled over the past decade and a half to roughly 27 percent.

One result: six million people have no income other than food stamps. Food stamps provide an income at a third of the poverty line, close to $6,300 for a family of three. It’s hard to understand how they survive.

At least we have food stamps. They have been a powerful antirecession tool in the past five years, with the number of recipients rising to 46 million today from 26.3 million in 2007. By contrast, welfare has done little to counter the impact of the recession; although the number of people receiving cash assistance rose from 3.9 million to 4.5 million since 2007, many states actually reduced the size of their rolls and lowered benefits to those in greatest need.

Race and gender play an enormous part in determining poverty’s continuing course. Minorities are disproportionately poor: around 27 percent of African-Americans, Latinos and American Indians are poor, versus 10 percent of whites. Wealth disparities are even wider. At the same time, whites constitute the largest number among the poor. This is a fact that bears emphasis, since measures to raise income and provide work supports will help more whites than minorities. But we cannot ignore race and gender, both because they present particular challenges and because so much of the politics of poverty is grounded in those issues.

We know what we need to do — make the rich pay their fair share of running the country, raise the minimum wage, provide health care and a decent safety net, and the like. But realistically, the immediate challenge is keeping what we have. Representative Paul Ryan and his ideological peers would slash everything from Social Security to Medicare and on through the list, and would hand out more tax breaks to the people at the top. Robin Hood would turn over in his grave.
We should not kid ourselves. It isn’t certain that things will stay as good as they are now. The wealth and income of the top 1 percent grows at the expense of everyone else. Money breeds power and power breeds more money. It is a truly vicious circle.

A surefire politics of change would necessarily involve getting people in the middle — from the 30th to the 70th percentile — to see their own economic self-interest. If they vote in their own self-interest, they’ll elect people who are likely to be more aligned with people with lower incomes as well as with them. As long as people in the middle identify more with people on the top than with those on the bottom, we are doomed. The obscene amount of money flowing into the electoral process makes things harder yet.

But history shows that people power wins sometimes. That’s what happened in the Progressive Era a century ago and in the Great Depression as well. The gross inequality of those times produced an amalgam of popular unrest, organization, muckraking journalism and political leadership that attacked the big — and worsening — structural problem of economic inequality. The civil rights movement changed the course of history and spread into the women’s movement, the environmental movement and, later, the gay rights movement. Could we have said on the day before the dawn of each that it would happen, let alone succeed? Did Rosa Parks know?

We have the ingredients. For one thing, the demographics of the electorate are changing. The consequences of that are hardly automatic, but they create an opportunity. The new generation of young people — unusually distrustful of encrusted power in all institutions and, as a consequence, tending toward libertarianism — is ripe for a new politics of honesty. Lower-income people will participate if there are candidates who speak to their situations. The change has to come from the bottom up and from synergistic leadership that draws it out. When people decide they have had enough and there are candidates who stand for what they want, they will vote accordingly.

I have seen days of promise and days of darkness, and I’ve seen them more than once. All history is like that. The people have the power if they will use it, but they have to see that it is in their interest to do so.

© 2012 Peter Edelman

 

Peter Edelman teaches at Georgetown University Law Center and co-directs the Georgetown Center on Poverty, Inequality, and Public Policy and the author, most recently, of “So Rich, So Poor: Why It’s So Hard to End Poverty in America.”

Output Prices and the Minimum Wage

EPI

Employment Policies Institute

Output Prices and the Minimum Wage

Most economists believe that an increase in the minimum wage causes higher prices and lower employment. This belief rests partly on empirical evidence, but also on the view that labor markets are competitive; if markets are competitive, then increases in the minimum wage should both raise prices and reduce employment. However, a number of studies in the last decade have challenged these beliefs. Some of these studies have argued that the market for low-skilled labor has special characteristics that undermine the traditional economic consensus. They claim that the market for low-skilled labor isn’t competitive and employers have the power to set wages. As a result, an increase in the minimum wage will not necessarily lead to employment loss.

To test this claim, Daniel Aaronson and Eric French examined government-collected price data. In a series of studies over the last four years, Aaronson and French show that a 10 percent hike in the minimum wage increased restaurant prices on the whole by 0.7 percent, and prices at limited service establishments by 1.6 percent. This result, in combination with other information about the restaurant industry, can be used within a formal model of the labor market to infer the impact of a minimum wage increase on employment. They find that employment losses of 2 to 2.5 percent following a 10 percent increase in the minimum wage would be consistent with their estimated price responses. These findings are consistent with a competitive model but generally not consistent with imperfect competition models where individual restaurants have wage-setting power. This paper summarizes Aaronson and French’s results.

Monopsony and the Low-Wage Labor Market
 
Beginning in the early 1990’s, research by economists David Card and Alan Krueger sparked a debate regarding the employment effects of minimum wage increases. In a series of papers, these authors found that increasing the minimum wage has no—or even a small positive—effect on employment. In explanation of these surprising findings, the authors theorized that there were special characteristics of the low-skilled labor market that allowed employers to obtain monopsony power—a situation in which they would be able to set wages in the overall labor market. Since Stigler (1946), it has been known that under monopsony power, an increase in the minimum wage could increase employment. By contrast, if local labor markets are competitive, it is expected under general conditions, that an increase in the minimum wage will cause employment to decrease and prices to rise.

Since the original Card and Krueger research, many studies have reestimated the impact of minimum wage increases on employment, with most finding some evidence of disemployment, although the magnitude of these effects remains somewhat contentious.

Tracking price responses rather than employment responses offers an alternative method of measuring the market structure of low wage labor markets. Changes in the size of the workforce have a direct impact on output—increases in the workforce lead to more output, while decreases lead to less output. When output increases as a result of increased labor, prices will fall. The reverse is also true—lower output from a smaller workforce leads to higher prices. Thus price responses can be used to infer the competitive nature of the labor market.

Price Responses to Minimum Wage Increases
 
Using a variety of government and private datasets, Aaronson and French show that prices do in fact rise in response to a minimum wage increase. Aaronson (2001) finds that minimum wage increases tend to raise prices. The magnitude and timing of these price increases is striking. Within three months of a wage hike, Aaronson finds that a 10 percent increase in the minimum wage resulted in a 0.4–0.7 percent increase in restaurant prices. Much of the increase occurred within the first month of the wage hike. In the fast food sector, prices rise 1.5 percent in response to a 10 percent increase.

Aaronson, French, and MacDonald (2004) utilize store-level Consumer Price Index (CPI) data generated by the United States Bureau of Labor Statistics (BLS) to separate firms by their relative use of low-skill, entry-level employment. A wage hike will particularly affect those firms employing a higher percentage of teenagers and other low-skilled employees. Using this new data, the authors find further evidence that prices rise following a wage hike. Tellingly, they also find that in areas where a greater number of employees earned the minimum wage, the price increases are larger than the overall results.

Employment Effects of a Minimum Wage Increase
 
Utilizing these price responses, along with other information about the restaurant industry such as labor’s share of costs and the demand elasticity for restaurant services, Aaronson and French (2003) construct a formal model to indirectly pin down the employment response to a minimum wage increase. In a perfectly competitive labor market, the authors find that a 10 percent increase in the minimum wage will result in a 2.5 to 3.5 percent decrease in employment. When the authors augment that model to allow for the possibility that employers have monopsony power, they find a calibrated employment response that is only slightly smaller (2 to 2.5 percent) than the perfect competition case. These results suggest that restaurant labor markets are generally consistent with competitive conditions but not with the monopsony model.

Conclusion
 
Although recent research has sparked intense interest in the role of imperfect competition in low-wage labor markets, Aaronson and French’s result that higher labor costs from minimum wage increases are pushed on to consumers in the form of higher prices is consistent with the competitive model, but not the monopsony model. Therefore, their results should temper interest in monopsony models as an explanation for small disemployment effects of the minimum wage.

Download the full study in .pdf format

How Will the 99% Deal with 70 Million Psychopaths?

Published on Friday, July 27, 2012 by Common Dreams

How Will the 99% Deal with 70 Million Psychopaths?

by Joe Brewer

 

Did you know that roughly one person in a hundred is clinically a psychopath? These individuals are either born with an emotional deficiency that keeps them from feeling bad about hurting others or they are traumatized early in life in a manner that causes them to become this way. With more than 7 billion people on the planet that means there are as many as 70,000,000 psychopaths alive today. These people are more likely to be risk takers, opportunists motivated by self-interest and greed, and inclined to dominate or subjugate those around them through manipulative means.




Last year, the Occupy Movement drew a distinction between the top 1% and the remaining 99% — as distinguished by measures of wealth and income. Of course, this breakdown is misleading since there are many top income earners who sympathize with the plights of others and are not part of the problem. Now the real defining metric reveals itself: 1% of the global population is comprised of people who exhibit psychopathic tendencies.

The global economy we have today is built on a deep history of top-down hierarchies that promote domination and control. There have been plenty of feudal lords, warrior chieftains, and violent dictators throughout the last 6000 years of burgeoning civilization. The modern era saw the ascension of “corporate personhood” as an amoral entity enshrined into law by an 1886 ruling of the US Supreme Court. This provided a new mechanism for mobilizing capital by the moneyed elites to deploy their wealth into the realm of public policy and civil society — creating the dysfunctional economic system we must now contend with as we struggle to address global challenges. We find ourselves in a situation where economic philosophies that celebrate selfishness can be implemented through a web of legal and financial tools that elevate and reward those individuals with psychological tendencies toward self-interest — the same people who also have a predisposition to game social contexts to their advantage regardless of impacts on others. Thus the psychopathic corporation was forged as a Frankenstein monster that enabled the constant flow of psychopathic blood, continuously replenished by the 1% of the population born into psychopathy in each new generation, to rise into positions of power as stock traders, corporate executives, and corruptible politicians.

What can we do collectively to contain and manage this small minority of people who are driven by selfish motives with no concern for others? How must we include them in our plans so that global civilization can transition to a configuration of peaceful cooperation and environmental balance? This is the defining question for global financial stability and environmental sustainability. It runs right to the core of our inability to garner collective action on such systemic challenges as climate change, global poverty, and corporate corruption. It is the central issue of political power that has so far eluded our environmental and social justice movements.
We can start to sketch out the solution by drawing on cross-disciplinary research about human nature and our evolutionary past. The key questions are:

What are the evolutionary advantages for having psychopaths in the gene pool? How did our ancestors keep their anti-social tendencies in check? What is the positive role for psychopaths that needs to be preserved in the new economic system?

Partial answers to these questions can be found in the pioneering work of anthropologist, Christopher Boehm, in his recent book Moral Origins: The Evolution of Virtue, Altruism, and Shame. Professor Boehm has dedicated much of his career to the study of primates in an attempt to explain where pro-social behaviors originally came from. Along the way he realized that a critical piece of the puzzle was how hunter-gatherer tribes dealt with would-be cheaters and dictators in order to maintain an egalitarian ethos in their social groups. Every hunter-gatherer society has a long history of democratic governance that provided cohesion and stability to the small bands of humans who had to cooperate in order to survive long periods of climatic instability and changing landscapes.

These small bands had particular difficulty with their psychopaths when it came to hunting big game. They depended heavily on the wealth of nutrients provided by large animals, yet were unable to successfully acquire meat without cooperation. It was in this context that the cheaters and bullies had to be suppressed — through a consensus process amongst tribal members with the power to ostracize or, in extreme cases, execute these typically male would-be upstarts. They did this to keep them from disrupting the social order that enabled the group to survive and thrive.

Things changed with the invention of agriculture and its associated patterns of human settlement and increasingly sophisticated economic structures. The rise in population size, combined with a division of labor into social castes, enabled the would-be upstarts to sow division in the ranks and rise in power through physical and political domination. The checks-and-balances of tribal society no longer held them in place. And so it happened that the psychopaths in our midst were able to begin the process of consolidating power and manipulating the masses for personal gain.

But why were there psychopaths in the first place? What possible advantage could they bring to the genetic mix that promotes human flourishing? It is vital that we keep in mind that being psychopathic is NOT the same as being violent or criminal. A psychopath is simply a person whose brain does not register stressful feelings when they observe harms inflicted on others. Someone with this characteristic might be more likely to deceive and manipulate others for personal gain, but they quite often are aware of social sanctions (and the punishments that follow) and so constrain their behaviors accordingly.

On the positive side, a person who experiences less emotional angst about harm to self and others is well suited as a risk taker whose attempts to ‘rise in the ranks’ of material wealth bring pioneering innovations to the group. They also handle the hardships of war and stressful negotiations with other tribes without the compounding harms of emotional trauma that would be inflicted on a more sensitive soul. In today’s context, such a person would be a great fit for working as a field medic during times of war (or in the aftermath of a natural disaster) since they could operate on many people without accumulating post traumatic stress disorder.

Such benefits to society may be small in comparison to the harms they inflict upon us all when their power goes unchecked. But the stubborn fact remains that they comprise a persistent part of our progeny — regardless of their perceived worth to the whole — and must be included in our thinking about how to build robust political and economic systems in the future.

With this goal in mind, I’d like to offer some preliminary thoughts about how we can make use of insights like these to both accurately diagnose our root problems and engage in active redesign of global civilization to enable humanity to cooperate on the scales necessary for our long-term survival. First, a few reflections on the nature of the problem:

The primary issue of concern is one of design oversight that failed to include psychopathic tendencies as a parameter for political and economic systems. We simply did not know how to handle them when civilization began 6000 years ago, and have yet to update contemporary global systems to mitigate the potential harms they might cause.

In recent centuries, a set of legal instruments were put in place that encourage and reinforce psychopathic tendencies through a system of incentive structures that reward selfish behaviors. This enabled the misguided philosophies of neoclassical economics and neorealist politics to gain undue influence over our thinking about social policy and institutional design.

A profound gap now exists between what needs to be done to ensure a prosperous future for humanity and the current trajectory of civilization. We must contain the innate psychopathic tendencies that comprise a small portion of the human gene pool if collective action is to be taken that harnesses real economic and political power to tackle global challenges like climate change, human insecurity, and corruption.
Taken together, these observations begin to paint a picture for what the solution looks like. Not only must we stop celebrating greed (and enabling it to run rampant through our policy choices), we also have to provide supports for pro-social cooperative behaviors that embody the altruistic and compassionate aspects of human nature that are expressed through the remaining 99% of us.
A sketch of the solution might look like this:

Gather together the best knowledge we have about human nature – as it emerges from the cognitive and social sciences — to inform the design of institutional policy, legislation, incentive structures, and regulatory bodies. Employ it to critique long-standing assumptions about economic behavior and political power.
Diagnose the current global economy to reveal pathways where psychopathic tendencies are expressed. Target these areas for policy reform as a “damage control” measure while engaging in broader debate about how to build replacement structures.

Create policy-development frameworks that promote cooperative behavior amongst people and with the broader environments on which we depend for our survival. This includes new metrics of success (e.g. replace Gross Domestic Product with more systematic measures like General Progress Indicators or Gross National Happiness), greater investments in societal infrastructure (e.g. public education, medical research, Earth monitoring systems, etc.) that enable us to integrate our increasingly sophisticated knowledge about global change into the management of social and economic systems.

Introduce incentive systems (with clearly defined and enforceable punitive measures) that enable our psychopaths to participate in society in a more beneficial and less disruptive manner. We need to recognize that people with these behavioral tendencies will likely always be part of the societal mix. Helping them find ways to participate as productive members of society will go a long way towards containing the harms they might produce and promoting social cohesion across our pluralistic societies where past harms remain to be fully healed.

I have intentionally set out these parameters at a broad conceptual level because this topic is too nuanced and complex for any one person to hold all the answers. Hopefully what I’ve written here will encourage you to think more deeply about what is happening in the world — and what role(s) you might fill in helping to create a new economic system that serves us all. It is safe to assume that I’ve made significant omissions and that much more needs to be brought into the conversation before we can begin to implement the solutions I recommend or any others which improve upon them.

For now, it is my hope that the ideas presented here create new insights for us as we struggle to articulate the path beyond the political impasse that has stalled action on financial reform and climate change in recent years. Perhaps these thoughts will also inform our next steps as we ponder how to improve upon the Occupy Movement and Arab Spring of 2011 to elevate and meld together the social movements of the world into a coherent new economic and political system capable of delivering complex outcomes for our interconnected and rapidly changing world.

Can we contain the 70 million psychopaths in the world today? Only if we come together and create effective sanctions on their destructive behaviors before it’s too late. The future still resides in the strength of our communities as we struggle together to find solutions that match the severity of existing threats during these turbulent times. As a recent political slogan decried, “Yes we can!”

And, ultimately, we must if we are to deliver our children into a livable world.

Joe Brewer is founder and director of Cognitive Policy Works, an educational and research center devoted to the application of cognitive and behavioral sciences to politics.  He is a former fellow of the Rockridge Institute, a think tank founded by George Lakoff to analyze political discourse for the progressive movement.

Published on Friday, July 27, 2012 by Common Dreams

Tea Party and the Right  

The Tyee / By Crawford Kilian

It's Scary -- Ayn Rand's Nutty Ideas Are Being Taken Seriously, Even in Canada

Even the mega yoga attire company lulemon is promoting Ayn Rand's weird doctrines.

July 22, 2012  |  

 

 

Ayn Rand was a kind of running joke when I was a kid in the 1950s. I knew about her thanks to the 1957 publication of Atlas Shrugged and its instant rise on the best-seller list. That in turn drew attention to her philosophy of Objectivism, which promoted selfishness as a virtue and damned altruism as a vice -- a self-evident joke.
Rand also got attention because of her anti-Soviet views. She and her prosperous Russian family had managed to get out of the U.S.S.R. in 1926, and ever after she seemed to have taken the Russian Revolution awfully personally. Nothing the Soviets did could possibly be any good; when they launched Sputnik, the first earth satellite, Rand insisted it had to be a hoax -- and of course the joke was on her.
One or two of my friends loved Atlas Shrugged, which I tried and failed to get into. So for me Rand and Objectivism were just part of the right-wing background noise of the era, along with the John Birch Society and William F. Buckley's National Review. All were mildly scandalous because of their extreme views. But they were trivial compared to the segregationists and mainstream red-baiters who ran the U.S. in those days.
Still, Rand refused to go away. She popped up on TV, she published new books, and her followers published new books about her. Until her death in 1982 she was a presence; Objectivism -- and Objectivists -- survived her, and clearly crossed into Canada. Alberta's Wildrose Party leader leader Danielle Smith and Vancouver's lululemon founder Chip Wilson are among high profile Canadians who pay homage to Rand's teachings today.
The greed beat goes on
Gary Weiss's new book argues that Objectivism has not just survived, but flourished. Its followers have infiltrated the Tea Party movement, which in turn is a force in the U.S. Congress and the Republican Party. Worse yet, he claims, Objectivism long had an agent in place on the commanding heights of the U.S. economy: Alan Greenspan, for decades the head of the Federal Reserve and a dedicated disciple of Ayn Rand for 60 years.
Weiss makes his case with some plausibility. A veteran business journalist, covering what he calls "the greed beat," he knows what's been going on in banking and finance. He writes personally and fluently, describing his efforts to learn not just about Rand but also about her "nation" -- the legions of teenagers, activists, bloggers, bankers, and ordinary folks who accept part or all of her philosophy even when it seems against their own interests. He even describes the enjoyment he gained from re-reading The Fountainhead and Atlas Shrugged.
The Ayn Rand Nation that Weiss encounters comes across as a pretty thoughtful and likeable crowd, with diverse views. For many of them, teenage exposure to her novels was a life-changing experience. Some went on to study her nonfiction articles and books. Most recognize some of the contradictions in Objectivism, though Rand insisted such contradictions are impossible.
"Whenever you think you are facing a contradiction," he quotes her, "check your premises. You will find that one of them is wrong." Weiss then suggests her own incorrect premise: Objectivism is free of contradictions.

Cult or Soviet parody?
Some of his sources go back to the beginnings of Objectivism, and their recollections portray the movement as a cult -- or even as a kind of parody of Soviet communism. Its early members agreed with her in all things, or were expelled and shunned. (Nathaniel Branden, the number-two Objectivist after Rand herself, was expelled after he stopped sleeping with her.)
Like 1920s communists despising mere socialists, Objectivists rejected libertarians and other right-wingers for years. The movement suffered a schism in the late 1980s, something like the split between Stalinists and Trotskyites, over whether to start talking with libertarians. Today the Ayn Rand Instituteand the Atlas Society continue to attack one other. But they find libertarians are now acceptable "fellow travelers."
Weiss does a good job of letting his sources speak for themselves, though he clearly disagrees with them. He portrays a genuine culture, full of people who have found some contentment and purpose in Objectivism. That again echoes the culture of most extremist parties and other fringe groups.
But he also cautions us that this is not just a fringe group. Objectivists have a lot of money -- some of which they've earned in business, and much of which goes to support the movement. The Ayn Rand Institute, for example, holds a yearly essay contest for college and high school students, with $100,000 in prize money.
A best-seller for 55 years
They also have the ongoing impact of Rand's book sales. The Ayn Rand Institute late last year reported that total English-language sales of her books in 2010 were 872,770. In the first half of 2011, Atlas Shrugged alone sold 292,000 copies (including ebooks). Fifty-five years after its first appearance,Atlas Shrugged currently ranks #479 on Amazon.ca. It ranks #2 in "United States" and "Classics," and #40 in "Science Fiction and Fantasy." In addition, ARI distributed almost 272,000 copies of Rand's book free to classrooms.
By comparison, Weiss's book ranks #240,751 on Amazon.ca.
Weiss spends a sizable part of the book dealing with Alan Greenspan's career, first as a young economist drawn to Rand in the early 1950s, and then as an increasingly powerful figure in government that climaxed in his years as the head of the Federal Reserve -- where, Weiss says, Greenspan effectively discouraged any efforts to regulate an increasingly wild banking industry. He argues that Greenspan always clung to his Randian views (despite the contradiction of serving in government), and that those views helped to precipitate the crash of 2008.
Greenspan certainly emerges as a slippery apparatchik in Weiss's portrait, though much of the evidence is circumstantial. But Weiss shows a lot of very clear connections between Objectivism and the rise of the Tea Party, both at the grassroots level and in the U.S. Senate and House of Representatives. Rand's ideas have effectively taken over the Republican Party, and we can see them in any number of budget cuts and public-service layoffs at the state level.
Rand's Canadian branch plant
The Objectivists have their eye on us as well. In a publication of the Atlas Society, Bradley Doucet published a long analysis of Stephen Harper as a "radical for free-market capitalism" who has drifted deplorably into the mainstream:
"Even if Prime Minister Harper still believed what he used to believe, he did not campaign on a radical free-market platform, and most voters would not stand for it if he suddenly tried to slash the size and scope of government... But this is not reason to despair. We need to remember that in the grand scheme of things, these are early days."
Conservative cabinet member Rona Ambrose has reportedly expressed support for Objectivism, and Rob Anders is said to be a former Objectivist. Wildrose's Danielle Smith has praised Ayn Rand's "celebration of entrepreneurship."
And Vancouver's own lululemon athletica has put "Who is John Galt?" on its shopping bags. Why? The yoga wear maker's website explains that company founder "Chip Wilson first read this book when he was 18 years old working away from home. Only later, looking back, did he realize the impact the book's ideology had on his quest to elevate the world from mediocrity to greatness (it is not coincidental that this is lululemon’s company vision)."
The official voice of the stretch pants empire goes on to exhort: "We are able to control our careers, where we live, how much money we make and how we spend our days through the choices we make... Life can be hard, challenging and unfair. What we can control, however, is our reaction. We can choose to rise up and be great..."
Why do they even bother?
Gary Weiss makes a strong case that Ayn Rand Nation is real, large, and growing despite the many contradictions its members tolerate: Like Atlas himself, her religious, emotional Tea Party fans shrug off her rigid atheism and rationalism.
But Weiss fails to spot the contradiction that I'm still struggling with when I consider Ayn Rand and her radical capitalism: Why do her Objectivists even bother with essay contests and educating a new generation? It makes them look like altruists, trying to do the rest of us a big favour by converting us to their creed. What's in it for them if we all become selfish Objectivists too?
After all, some very John Galtian people like the billionaire Koch brothers have made fortunes under the current regime, however oppressive they may consider it. The present American Senate and Congress are made up mostly of multimillionaires, and no bankers have suffered for the misdeeds that led to the crash of 2008. How would their lives be improved under a no-tax, no-government Objectivist state of affairs?
After all, instead of letting ordinary taxpayers foot the bill for an army, the rich would have to pay for their own private mercenaries. The mercenaries would be as reliable as the Praetorian Guard, which routinely murdered Roman emperors who didn't pay them enough. The billionaires would have to battle one another like so many Somali clans, just to survive.
Meanwhile we ordinary folk, uneducated, ill-housed, and diseased, would make unproductive employees for the brilliantly imaginative Randian capitalists seeking ever greater profits from the creation and sale of their new inventions. We'd be too poor to be customers for those inventions.
Ruling a wasteland
Future John Galts would have to sleep in castles, behind a wall of guards protecting them from us. A philosophy that detests the "gun" of government coercion would survive only by imposing such coercion on everyone else.
The masters of a Randian society would rule a wasteland of clear cuts, poisoned streams, and empty seas, except for those patches they personally owned and protected. To maintain themselves would be vastly more expensive, in wealth, time and energy than it is today: their own farms, their own roads, their own firefighters and teachers and engineers.
Marx made no predictions about the shape of a communist society. Similarly, Ayn Rand and her followers really don't (or can't) imagine what their own utopia would be like.
That in itself is the final contradiction of Objectivism: A philosophy of radical capitalism, without a business plan. But it's no longer a joke.

Crawford Kilian is a contributing editor of The Tyee.

The 6 Most Offensive Things Said in the Wake of the Aurora Shooting

AlterNet.org

AlterNet / By Sarah Seltzer

The 6 Most Offensive Things Said in the Wake of the Aurora Shooting

Conservatives accuse liberals of politicizing the tragedy, but here are the worst examples of people using Aurora to push an extreme agenda.

July 24, 2012  |  

 

Mourners pray for the victims of the Aurora, Colorado shooting.

Photo Credit: AFP

After reeling in shock from the horrifying details of the Aurora, Colorado massacre, many of us were soon reeling from the callous, exploitative reactions.
I'm perhaps not the only person who was aghast by the number and intensity of responses declaring the problem with Aurora was that not enough citizens were armed. There is a race to come up with the most farfetched things to blame--anything, essentially, besides the ease of purchasing firearms and a system that doesn't provide for the mentally ill.

Even Mitt Romney has gone on the record saying he doesn't think gun laws had anything to do with the tragedy--even though the alleged perpetrator easily purchased 6,000 rounds of ammunition and deadly weapons with complete legal immunity.

Without further ado, here are the six worst reactions I found (with a few retractions and clarifications included):

1. Texas Rep. Louie Gohmert says the attack is the result of an attack on Judeo-Christian beliefs, and that the killings might have been avoided if the country returned to the ways of God.
From HuffPo:

During a radio interview on the Heritage Foundation's "Istook Live!" show, Gohmert was asked why he believes such senseless acts of violence take place. Gohmert responded by talking about the weakening of Christian values in the country. "You know what really gets me, as a Christian, is to see the ongoing attacks on Judeo-Christian beliefs, and then some senseless crazy act of terror like this takes place," Gohmert said.

Later, Gohmert apologized for causing pain and said he was taken out of context. Listen to his words yourself:


2. Mike Huckabee blames sin. The fervently religious politico-turned-pundit says we don't have a gun problem or a crime problem, but a "sin problem" and blames--what else--a mythical encroaching secularization.

“Ultimately,” Huckabee concluded, “We don't have a crime problem or a gun problem – or even a violence problem. What we have is a sin problem. And since we ordered God out of our schools and communities, the military and public conversations, you know, we really shouldn't act so surprised when all hell breaks loose.”

3. Extremist evangelicals Jerry Newcombe and Fred Jackson blame the liberal media, say victims who aren't Christian are in hell.

A great post at ThinkProgress sums up some of the worst statements from extreme evangelical pastors. From Jerry Newcombe, who predictably blames loose morals, the victims had better been right with God: "iI they knowingly rejected Jesus Christ, then, basically, they are going to a terrible place."
And the other key quote is from the American Family Association's Fred Jackson: "Whether it’s the Hollywood movies, whether it’s what we see on the Internet, whether it’s liberal bias in the media, whether it’s our politicians changing public policy, I think all of those somehow have fit together—and I have to say also churches who are leaving the authority of Scripture and losing their fear of God" are what "give us these kinds of incidents."

4. Internet conspiracy theorists blame government, Obama, Illuminati. ​At Gawker, a quick look through the Internet reveals a number of long rants about how President Obama, the government and others armed and trained the killer and set him up in order to somehow turn American against guns. Quoth one loony: "This is somebody who was selected for a mission, given equipment to carry it out, then somehow brainwashed into getting it done." Okay then. There's also the guy who declared [sic] "Not one week from the rumored Obama signing of the UN Gun Ban Treaty, on Friday the 27th and Obama is 'Gift Wrapped' this horrific slaughter, that he can take and use to Obliterate our God given Second Ammendment Right's." That's the state of the rumor-mongering before we even get to the Illuminati. Read the post here.

5. Russell Pearce blames victims. Here's the sorry tale of former senator Russell Pearce, who had a far too typical reaction and shared it on Facebook.
Via TPM:

Early Saturday morning, the former Republican lawmaker took to Facebook to mourn the victims. He then wondered why none were “[b]rave” enough to stop the atrocity.
“Where were the men of flight 93???? Someone should have stopped this man,” he wrote. “…All that was needed is one Courageous/ Brave man prepared mentally or otherwise to stop this it could have been done.”

He later backtracked and declared he was blaming gun laws, not victims. But eventually, both Facebook rants disappeared. Well then.

6. The Daily Mail blames women. A common, and irritating, media narrative surrounding violence is that it's fueled by sexual rejection: had some woman just taken pity on the poor man, he wouldn't have acted out.
Witness this wording in the Daily Mail:

James Holmes reached out to multiple women on a sex website in the days before launching a massacre which killed 12 people and injured 58 during a screening of The Dark Knight Rises, it has emerged.
However, at least three of the women he contacted through AdultFriendFinder rejected his advances -- even though he was apparently just hoping to 'chat' with 'nothing sexual' on the cards.
The news follows rumours that Holmes may have broken up with a girlfriend shortly before the shooting in Aurora, Colorado, and that he was due to be evicted from his apartment after dropping out of grad school.

At Jezebel, Erin Gloria Ryan smacks this type of thinking down, pointing out that the killer planned his spree months ahead of time: "What if one of those much maligned Internet sex-finding women could have somehow found it in the kindness of her heart to fuck James Holmes? What then? Nothing. What happened in Colorado happened because a man who was trying to cause chaos was able to acquire the tools to do it successfully."

7 (sorta). Rick Warren appears to blame the massacre on evolution, then says he didn't. People were understandably outraged when the megachurch pastor tweeted, the afternoon of the massacre. "When students are taught they are no different from animals, they act like it."

Steve Benen reminds us that we've heard this story before: "In June 1999, then-Rep. Tom DeLay (R-Texas) appeared on the House floor to reflect on the Columbine massacre, and he proceeded to blame science textbooks for the murders. These tragedies happen, DeLay said, 'because our school systems teach the children that they are nothing but glorified apes who are evolutionized [sic] out of some primordial soup.'" Amanda Marcotte also has a good retort, pointing out that if we actually acted like some animals, we'd be peaceful. "You almost never hear the phrase applied to describe behaviors that are most like our non-human animal friends. For instance, when you pick up and eat a raw apple, you're acting like lots of animals, ranging from raccoons to monkeys."
The sad rush to scapegoat everything but the killer and his weapons shouldn't underscore the thoughtful commentary--much of it here and on AlterNet's partner sites--on gun violence in America. But it should show how difficult it will be to have the debate about how to practically make us safer from weapons designed for the mass destruction of lives.

Sarah Seltzer is an associate editor at AlterNet and a freelance writer based in New York City. Her work has been published at the Nation, the Christian Science Monitor, Jezebel and the Washington Post. Follow her on Twitter at @sarahmseltzer and find her work at sarahmseltzer.com.