September 8, 2015
Crisis: Public Morality, Bush2 Jr., Lessig, Wall Street Parasites, On Revolution

 "They who can give up essential 
   liberty to obtain a little temporary
   safety, deserve neither liberty
   nor safety."
   -- Benjamin Franklin
   "All governments lie and nothing
   they say should be believed.
   -- I.F. Stone
   "Power tends to corrupt, and   
   absolute power corrupts
   absolutely. Great men are        
   almost always bad men."
   -- Lord Acton

Prev- crisis -Next


A Crisis of Public Morality, Not Private Morality
2. Krugman: Why Bush's Attack on Trump is Exactly Wrong
3. "I'm In": Lawrence Lessig Confirms White House Run
Wall Street Parasites Have Devoured Their Hosts
5. Crane Brinton on Revolution

This is a Nederlog of Tuesday, September 8, 2015.

This is a crisis blog. There are 5 items with 5 dotted links: Item 1 is about an article by Robert Reich I completely agree with, but I do not see "a broadly based citizen movement to rescue our democracy" (and also have a radical proposal of my own, although I don't see that being practised either, though it is quite simple
and quite fair to at least 97% of all Americans); item 2 is about an article by
Paul Krugman that in fact shows the large differences between the intelligent and
educated minorities, and the majority the third Bush relies on; item 3 is about Lawrence Lessig, who runs for president, in whose success I cannot believe; item 4 is about a review of a book by economist Michael Hudson, who seems an interesting man; and item 5 is about a book about revolution (which I haven't read, but I offer a few thoughts and an experience).

1.  A Crisis of Public Morality, Not Private Morality

The first article today is by Robert Reich on his site:
  • A Crisis of Public Morality, Not Private Morality

This starts as follows:

At a time many Republican presidential candidates and state legislators are furiously focusing on private morality – what people do in their bedrooms, contraception, abortion, gay marriage – America is experiencing a far more significant crisis in public morality.

CEOs of large corporations now earn 300 times the wages of average workers. Insider trading is endemic on Wall Street, where hedge-fund and private-equity moguls are taking home hundreds of millions.

A handful of extraordinarily wealthy people are investing unprecedented sums in the upcoming election, seeking to rig the economy for their benefit even more than it’s already rigged.

Yet the wages of average working people continue to languish as jobs are off-shored or off-loaded onto “independent contractors.”

All this is in sharp contrast to the first three decades after World War II.

This is followed by a sketch how things were quite different in "the first three decades after World War II", that also seems correct to me, as does the above quotation, but which I leave to your interests.

Then there is this:

The change began when Wall Street convinced the Reagan Administration and subsequent administrations to repeal regulations put in place after the crash of 1929 to prevent a repeat of the excesses that had led to the Great Depression.

This, in turn, moved the American economy from stakeholder capitalism to shareholder capitalism, whose sole objective is to maximize shareholder returns.

I agree - the crisis in the Western economies are due to deregulations, that is the repeal of laws that protected the 99% from the greed and egoism of the rich. (I am sorry if you disagree or think this simple minded: Ayn Rand agrees with me, except that she thinks greed and egoism are good.)

This is followed by a sketch of what
deregulations produced, that I again agree with,  but leave to your interests, after which came this:

The final blow to public morality came when a majority of the Supreme Court decided corporations and wealthy individuals have a right under the First Amendment to spend whatever they wish on elections.

Yes - and I called that decision two days ago intentional fraudulent bullshit by the majority of the Supreme Court: Money is not speech, and those who say it is are
simply bullshitting you.

Then there is a list of the things Robert Reich thinks are necessary to undo 35 years of systematic deregulation. I quote, but edit it as points:

  • Glass-Steagall must be resurrected.
  • Big banks have to be broken up.
  • CEO pay must be bridled.
  • Pay in excess of $1 million shouldn’t be deductible from corporate income taxes.
  • Corporations with high ratios of executive pay to typical workers should face higher tax rates than those with lower ratios.
  • People earning tens if not hundreds of millions of dollars a year should pay the same 70 percent tax rate top earners paid before 1981.
  • And we must get big money out of politics (..)
Again, I agree with all that. [1] But there is a catch:
None of this is possible without a broadly based citizen movement to rescue our democracy, take back our economy, and restore a minimal standard of public morality.
And I do not see this happening. Not at all. At least not now. Apart from that: There are a whole lot of legal regulations (re-regulations) necessary, but I see no majority for that in Congress, and besides, it will take a lot of time to undo 35 years of deregulations, while the rich now can use their millions freely to spend on laws and deregulations they like.

So while I agree with Robert Reich on nearly everything he wrote in this article,
I see hardly a hint (apart from Bernie Sanders, is true) that there is or will be "
a broadly based citizen movement to rescue our democracy".

And I am very sorry, but these seem to be the facts. For a bit more, see item 2 and item 3.

2.  Krugman: Why Bush's Attack on Trump is Exactly Wrong

The next article is by Janet Allon on Alternet:

  • Krugman: Why Bush's Attack on Trump is Exactly Wrong

I selected this mainly because of the light it sheds on item 1, and will do so by two quotations. The first is this:

It was not easy, but Jeb Bush managed to find the two issues that Donald Trump is not utterly wrong and dangerous about, and attack him on those. Rather than go after Trump on his "viciously absurd" idea to depport 11 million undocumented immigrants and his persistent underlying racism and misogyny, Paul Krugman points out in Monday's column, that Bush is attacking the front runner on his stated willingness to raise taxes on the rich, and positive words about universal health care. That's sacrilege!

That is to say: Presidential candidate Bush2 Jr simply defends the rich as if these
needed defense - and he expects a considerable part of his electorate (that may
eventually make him the third Bush president) to swallow that as if these were
their interests (which is quite false - and see [1]).

There is also this by Krugman on this nonsense:
Soft-spoken, bespectacled, bilingual Bush is a case in point. How anyone can believe he is a reasonable, responsible policy wonk is beyond comprehension. "His actual economic platform, which relies on the magic of tax cuts to deliver a doubling of America’s growth rate, is pure supply-side voodoo," Krugman writes.
Yes indeed - but Bush2 Jr peddles his voodoo as if it convinces his electorate,
and seems to be right in his convictions (which I agree are bullshit, but bullshit
that works - so far - in that it deceives a large part of his electorate and makes
them vote against their own real interests).

That is: Krugman does not believe Bush2 Jr "
is a reasonable, responsible policy wonk"; I do not believe it; I guess many with decent intelligence or a good education do not believe it - but these are not the majority of Bush2 Jr's electorate, who do not have much knowledge, and have been taken in for many years now (notably by the crap of "trickle down economics", which is just a lie).

3. "I'm In": Lawrence Lessig Confirms White House Run

The next article is by Nadia Prupis on Common Dreams:

  • "I'm In": Lawrence Lessig Confirms White House Run

First, here is the Wikipedia lemma on Lawrence Lessig, which I supply because I suspect quite a few of my readers don't know who he is (though I did write a few
times about him in Nederlog).

In any case, it is fairly interesting, and it shows Lawrence Lessig is a quite prominent professor of law.

The article starts as follows:

Campaign finance reform advocate Lawrence Lessig on Sunday confirmed that he would run for U.S. president in 2016, announcing that the exploratory committee he formed in August had hit its $1 million fundraising target by its Labor Day deadline.

Lessig made his statement on ABC's This Week during an interview with host George Stephanopoulos.

"I'm in, George," he said. "I'm running to get people to acknowledge the elephant in the room, right. We have to recognize we have a government that does not work."

As he explained in August, Lessig will run on a platform that targets campaign finance—and, if elected, would step down as soon as Congress passed a package of pro-democracy reforms.

"I want to run to be a different kind of president," Lessig wrote for the Huffington Post last month. "'Different' not in the traditional political puffery sense of that term. 'Different,' quite literally. I want to run to build a mandate for the fundamental change that our democracy desperately needs. Once that is passed, I would resign, and the elected Vice President would become President."

I am sorry, but I don't think it will work. I probably do agree with most of the changes he will propose if he is elected president, but I cannot possibly see
him win, in part because he doesn't want to be an ordinary president, but mostly
because he isn't widely known, and doesn't have enough money.

And also see [1], for a rather more simple proposal, that is radical, but will not
harm 97% or more of all Americans, and will only lessen the incomes of at most
3%, who are the richest few anyway.

4. Wall Street Parasites Have Devoured Their Hosts

The next article is by Pam Martens on Wall Street on Parade:

  • Michael Hudson’s New Book: Wall Street Parasites Have Devoured Their Hosts — Your Retirement Plan and the U.S. Economy
First, here is the Wikipedia item on Michael Hudson, that shows him to be an American professor of economics in his middle seventies.

This article starts as follows, and is a review of Michael Hudson's latest book, "Killing the Host":

The riveting writer, Michael Hudson, has read our collective minds and the simmering anger in our hearts. Millions of American have long suspected that their inability to get financially ahead is an intentional construct of Wall Street’s central planners. Now Hudson, in an elegant but lethal indictment of the system, confirms that your ongoing struggle to make ends meet is not a reflection of your lack of talent or drive but the only possible outcome of having a blood-sucking financial leech affixed to your body, your retirement plan, and your economic future.

In his new book, “Killing the Host,” Hudson hones an exquisitely gripping journey from Wall Street’s original role as capital allocator to its present-day parasitism that has replaced U.S. capitalism as an entrenched, politically-enforced economic model across America.

This book is a must-read for anyone hoping to escape the most corrupt era in American history with a shirt still on his parasite-riddled back.

There is a lot more in the article, which is quite interesting and recommended,
but I will select just two more quotations.

This is on the 2008 crisis:

Hudson correctly calls 2008 a “dress rehearsal,” writing that “Wall Street convinced Congress that the economy could not survive without bailing out bankers and bondholders, whose solvency was deemed a precondition for the ‘real’ economy to function. The banks were saved, not the economy.” Hudson adds that the “debt tumor” was left in place. (This is the nightmare we are presently watching unfold.)

The result of the systemic disabling of regulations on Wall Street has resulted in the following, says Hudson: “…the wealthiest One Percent have captured nearly all the growth in income since the 2008 crash. Holding the rest of society in debt to themselves, they have used their wealth and creditor claims to gain control of the election process and governments by supporting lawmakers who un-tax them, and judges or court systems that refrain from prosecuting them. Obliterating the logic that led society to regulate and tax rentiers in the first place, think tanks and business schools favor economists who portray rentier takings as a contribution to the economy rather than as a subtrahend from it.”
And there is this on the difference between the schemes to enrich oneself that were used in the 1980ies and those used today:

Hudson says that what is happening today in corporate America is very different from the corporate raiders of the 1980s who used leveraged buyouts to gobble up companies. Today, says Hudson, “corporate executives raid their own company’s revenue stream. They are backed by self-proclaimed shareholder activists. The result is financial short-termism by managers who take the money and run. The management philosophy is extractive, not productive in the sense of adding to society’s means of production or living standards.”

Make no mistake about it: this is a dangerous book to the status quo. It is truth-telling at its finest in America’s darkest age of entrenched lies.
I think this was the review by a fan (and there is considerably more in the article), but Michael Hudson seems an interesting man.

5. Crane Brinton on Revolution

The last item of today is by Lambert Strether on Naked Capitalism:

  • Crane Brinton on Revolution

This starts as follows:

An appropriate topic for Labor Day, given the history? I’d say yes. One of my tsundoku has long been Crane Brinton’s The Anatomy of Revolution; a friend of mine recommended this little paperback to me, since they believe the United States is in a pre- revolutionary state. Me, I’m not so sure that’s true, and not sure that would be a good thing, if true, but it’s certainly a matter of due diligence to consider it. (...) Brinton’s Anatomy was first written in 1938, and revised in 1952 and 1965. Here’s a review from the Journal of Peace Research: 

For half a century Crane Brinton’s Anatomy of Revolution has remained one of the most widely read scholarly accounts of revolutions. This book, which compares four case studies — the English, the American, the French, and the Russian Revolutions — is rich in insights. It offers an exemplary application of the comparative historical method; it discusses its subject matter brilliantly; it provides a coherent and parsimonious conceptual scheme of a central political issue. Brinton imposes a vision of order on the chaos of revolutionary politics. It has had such a rare seductive appeal that policy-makers have, on occasion, confused it with a description of reality and allowed it to guide their actions.

I say. I know the name of Crane Brinton (<- Wikipedia), although I do not recall reading anything by him, but three reasons I am interested is that I may be living in pre-revolutionary times; that my parents and grandparents were leftist (real, sincere, intelligent, decades long) revolutionaries; and that I agree with Lambert Strether's qualifications:
(...) they believe the United States is in a pre-revolutionary state. Me, I’m not so sure that’s true, and not sure that would be a good thing, if true, but it’s certainly a matter of due diligence to consider it.
First why I (also) am "not sure that [a revolution] would be a good thing".

There are three main reasons: (i) most revolutions require a social collapse or a war to get started, which means misery for many; (ii) most revolutions (Lenin's revolution, Hitler's revolution, Mao's revolution, Castro's revolution) fail: they do not reach their aims, indeed generally not at all; and (iii) most revolutions (same examples) end in dictatorships (that vary, but may murder tens of millions).

None of that is necessary, but all of it is common (and the French Revolution also failed), while failed revolutions may marr the lives and possibilities of hundreds of millions or indeed billions of people (e.g. by the Russian and Chinese failed leftist revolutions, though it is difficult to put precise numbers in place).

Second, I didn't read the book, and can't really judge this review, but I do have one comment on one sentence, namely this one by Crane Brinton:
We shall regard revolutions as a kind of fever.
In fact, I doubt the metaphor is very helpful, but it is true that the one failed revolution I was an observer of, namely in France in 1968, where I was in the beginning of May and the beginning of June, did happen in an exhilarated or indeed feverish climate of opinion, which I have not met anywhere else.

Then again, that revolution failed right at the start, and also I don't know how typical it was.
I merely report the fact, which is somewhat relevant in the present context.

[1] First, from US Income on Wikipedia:
The aggregate income measures the combined income earned by all persons in a particular income group. In 2007, all households in the United States earned roughly $7.723 trillion. One half, 49.98%, of all income in the US was earned by households with an income over $100,000, the top twenty percent. Over one quarter, 28.5%, of all income was earned by the top 8%, those households earning more than $150,000 a year. The top 3.65%, with incomes over $200,000, earned 17.5%.
This means, I would say, that less than 3% earn over $300,000 a year. In other words: More than 97% of all American households (!) earn less than $300,000 a year.

What about this - I admit it: on the face of it quite radical - proposal:
  • No American should earn more than $300,000 a year.
This may seem radical, but it will only limit the incomes of less than 3%. And we may tell them: If you want to excel, you are quite welcome to excel - at arts, at mathematics, at science, at music, at comedy, at sports, indeed at anything, except making more money for yourself than $300,000 a year, for unlimited incomes of a few are a major danger to nearly all.

Indeed, if all you can do really well is making money, you are allowed to make as much as you can, except that it will all be taxed away.

As far as I can see, this one measure will solve most of America's problems, and without endangering anybody's income that is less than $300,000 a year. And besides, most Americans seem to agree that incomes between $15,000 and $300,000 are fair...

I may be dreaming, but to me, with my communist parents and grandparents,
this does seem a fair proposal - that is not radical at all for more than 97 out of a 100 Americans.

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