French philosopher, Michel Foucault once famously argued that society operates as a vast prison. While Foucault’s concerns were with an individual’s freedom constrained in such a system, maybe a more direct analogy to our current situation is how our judiciary and police force is used to control and literally imprison a vast swath of our lower classes.
It is no secret that in Ferguson, Missouri, where Michael Brown was killed by police officer Darren Wilson, much of the city’s income was derived from fines and court fees for minor traffic violations, essentially converting area police work from “public safety” officers to revenue collectors. These violations disproportionately fell on poorer individuals and minorities who may not have had the money to keep their hedges trimmed and their vehicles perfectly equipped. In effect, the tickets and citations amount to a regressive tax on members of our society least able to afford it.
In the wake of the Brown killing, Governor Jay Nixon signed a broad municipal court reform bill that capped court revenue and imposed new requirements in an attempt to end what the bill’s sponsor called predatory practices aimed at the poor. Good. The bill’s primary sponsor, Senator Eric Schmitt, said people have the right “not to be thrown in jail because you’re a couple of weeks … late on a fine for having a taillight out.” He called the current system in place in Ferguson, “taxation by citation.”
“Under this bill, cops will stop being revenue agents and go back to being cops,” Nixon said.
This is all good, too, and certainly the caps on revenue collection by police is a step in the right direction, but in the larger scheme of things, I’m not nearly as sanguine as Governor Nixon is about “cops going back to being ‘cops.’”
…in Southern states groups of designated white men would set out on patrols to round up runaway slaves during the antebellum period. The phrase for these men—paddy rollers, or patrollers — has come down to us as patrolmen or patrol officers and it’s not too much a stretch to suggest that in areas of the deep American South their function is much the same.
For one thing, the historical precedent that they might ‘go back’ toward isn’t exactly edifying, especially in Southern states where groups of designated white men would set out on patrols to round up runaway slaves during the antebellum period. The phrase for these men—paddy rollers, or patrollers — has come down to us as patrolmen or patrol officers and it’s not too much a stretch to suggest that in areas of the deep American South their function is much the same; that is, ensuring the safe keeping of property for the wealthy. In the North, police officers often functioned as barriers between the wealthy elites and the immigrant “hordes.” The history of industrialization and unionization in this country is rife with struggles between union supporters and police officers or private firm surrogates operating in their wake (such as the Pinkerton Detective Agency –fun fact, at the height of its existence, the Pinkertons had more agents than the standing army of the United States of America).
We like to think of police officers as neutral arbiters of the law, itself a neutral amalgam of well thought out rules for living, but whether rounding up runaway slaves or busting union organizers, the police have historically found themselves on the side of property owners. What this means in contemporary America is a focus on things like illegal drug use and sale, vehicle violations, public disturbance rules, and zoning laws that disproportionately hit the poorest members of our society first and hardest. If we run back through just the most noteworthy police shootings in the last year (topping 1,000 according to an unofficial list compiled by the New York Times here: http://www.nytimes.com/interactive/2015/04/08/us/fatal-police-shooting-accounts.html?_r=0), most of the precipitating causes involved minor infractions, expired inspection stickers, broken signal lights, or tail lights, unpaid fines or alimony. Public service, protecting humans from harm to themselves or to others might be a nice ancillary outcome of a police officer doing his job, but it’s not the main event.
In fact, the idea that police are here to protect us is not much more than a happy slogan. In its landmark decision DeShaney v. Winnebago County Department of Social Services,the U.S. Supreme Court declared that “the Constitution does not impose a duty on the state and local governments to protect the citizens from criminal harm.” The United States Supreme Court, in the 2005 case, Castle Rock v. Gonzales upheld that decision and extended it to include a state or municipality’s police force– codifying what many folks in poorer neighborhoods had long since suspected: neither the state nor the police have a constitutional duty to protect a person from harm.
Strictly speaking, the police are law enforcement officers, they are present to make sure the laws as passed by city, county, and state legislators are followed. Towards that end they write tickets, and citations for breaking the law, make arrest and testify in court about their actions. This narrow interpretation of their duties is often clarified in training on the so called ‘public duty’ doctrine that provides that a “governmental entity owes a duty to the public in general, not to any one individual.”
Police are also warned—constantly—to look out for themselves. According to ex-Officer, Seth Stanton, writing in the Atlantic Magazine, “police training starts in the academy, where the concept of officer safety is so heavily emphasized that it takes on almost religious significance.” Rookie officers are taught what is widely known as the “first rule of law enforcement”: An officer’s overriding goal every day is to go home at the end of their shift. One slogan that is bandied about squad rooms sums up the mind set: “Better to be judged by twelve than carried by six.”
Police are trained to fear the public they are nominally intended to serve. During their training “they are shown painfully vivid, heart-wrenching dash-cam footage of officers being beaten, disarmed, or gunned down after a moment of inattention or hesitation. They are told that the primary culprit isn’t the felon on the video, it is the officer’s lack of vigilance.” Writes Stanton, “in most police shootings, officers don’t shoot out of anger or frustration or hatred. They shoot because they are afraid. And they are afraid because they are constantly barraged with the message that that they should be afraid, that their survival depends on it.”
“In most police shootings, officers don’t shoot out of anger or frustration or hatred. They shoot because they are afraid. And they are afraid because they are constantly barraged with the message that that they should be afraid, that their survival depends on it.”
If you happen to peruse Police Magazine, you’ll find that the majority of the stories are about violence against police—and the weapons or tactics they can use to keep themselves safe. This month’s issue features a large photo of an Armalite AR-10 20-Inch Tactical Rifle that was initially designed for the US military. To drive home the point, Police magazine’s logo shows the O in policeman segregated by cross hairs, like a target.
Of course, in addition to the protect-thyself-first attitude, there’s also an underlying racial bias; probably because police officers fear blacks more than whites. In 2015, The Washington Post documented 990 fatal shootings by police, 93 of which involved people who were unarmed. “Black men accounted for about 40 percent of the unarmed people fatally shot by police and, when adjusted by population, were seven times as likely as unarmed white men to die from police gunfire.”
“The only thing that was significant in predicting whether someone shot and killed by police was unarmed was whether or not they were black,” said Justin Nix, a criminal justice researcher at the University of Louisville and one of the report’s authors. “This just bolsters our confidence that there is some sort of implicit bias going on,” Nix said. “Officers are perceiving a greater threat when encountered by unarmed black citizens.”
The only thing that was significant in predicting whether someone shot and killed by police was unarmed was whether or not they were black…
The report noted that officers may unconsciously develop biases over time. “In other words, the police — who are trained in the first place to be suspicious — become conditioned to view minorities with added suspicion,” according to the report.
So we have a fearful police force, over trained for self-protection with an underlying bias against minorities whose main job is not to protect citizens but to enforce legal codes that order society for the benefit of property owners (that will likely make a poor person’s life more difficult). Add to the brew, the over militarization of our police force (do we really need armored tanks on civilian streets?) and the fact that most police officer shootings are investigated by the police departments themselves and it shouldn’t be too difficult to understand how deeply dysfunctional the whole shebang is. I had one friend suggest that, given the stress our minority communities are under, it was surprising incidents like Dallas hadn’t happened more frequently.
But they haven’t– and perhaps that’s a testimony to what many police departments are coming to recognize—the necessity for retraining and community engagement. In fact, it’s a sad irony that the Dallas Police department has done an exceptional job in just this area. It’s obvious that Police Chief David Brown –whose own life is rife with personal tragedy—is dedicated to a community outreach program. Just hours before the killings began last Thursday night in Dallas, his officers took time to chat with protesters, even taking selfies with them.
“We saw police officers shaking hands and giving high fives and hugging people and being really in the moment with us,” demonstrator Sharay Santora said.
But then the shooting began, and, as if granted permission, police departments like those in Baton Rouge quickly reverted to form and began arresting activists on private property without cause or due process, much less warrants. In fact, they arrested the individual who provided video evidence of the Alton Sterling shooting. All of this should tell us that police forces in this country are as diverse as their leaders and the communities that they serve. Our own city, Richmond, Virginia, much like Dallas, has done excellent work in reaching out to the various communities here—including, surprisingly, the LGBT community. So it’s not hopeless, but no one solution will fit all the municipalities across the nation, and maybe one of the questions we should be asking is how well our expectations of police service match the reality? After all, as Chief Brown has noted, “Every societal failure, we put it off on the cops to solve”
But then the shooting began, and, as if granted permission, police departments like those in Baton Rouge quickly reverted to form and began arresting activists on private property without cause or due process, much less warrants. In fact, they arrested the individual who provided video evidence of the Alton Sterling shooting
Many of our poor neighborhoods have a nearly round the clock police presence—from squad cars anyhow. Police appear, write up infractions, and arrest vagrants, keep an eye on shifty characters, “gangbangers” and the like. They do what they are trained to do. But the result isn’t a working society. The result, as I suggested in the beginning of this essay, is a carceral state.
Right now, if you are an Afro-American male, your odds of being in jail at some point in your life are 1 in 3. I doubt this is because 1 in 3 Afro-American males are genetically predisposed to periodic episodes of violence and criminal behavior. More likely, it has to do with the incredible dearth of job prospects made infinitely worse by a rap sheet and applying while black.
Police officers can’t solve that problem. They aren’t social workers or teachers or medical service personnel, as Brown correctly points out—but the nature of the system we have put in place allows all the problems of our society to flow downward to the cop on the beat whose one job is to enforce the law, but who we mistakenly believe can somehow catch all the detritus of a dysfunctional system and keep it working.
In Michel Foucault’s famous work, Discipline and Punishment, the ruling metaphor is society as a vast prison; a kind of panoptic nightmare—a word derived from Jeremy Bentham’s famous panopticon which was a prison designed so that every cell is view-able from a raised central location, like a watchtower plunked into the middle of a cell block. The point was to understand and react to the behavior of the individuals in the surrounding cells so as to control them. But even at this rudimentary level we are failing, for it’s obvious we don’t understand the individuals caught in our system and we aren’t really controlling behavior, we’re merely holding them in our prison cells precisely because we don’t know what else to do with them.
You can’t fix a mental health problem with an AR-10, any more than you can fix homelessness with a traffic citation, or drug abuse with an armored vehicle, or unemployment with a prison cell.
Our criminal justice system is trying to repair something it simply isn’t equipped to mend. You can’t fix a mental health problem with an AR-10, any more than you can fix homelessness with a traffic citation, or drug abuse with an armored vehicle, or unemployment with a prison cell. Perhaps if we, as a society, decided that the carceral state was a bad idea; if we decided, instead, to fund jobs programs and provide secure housing for those in need, if, indeed, we provided drug treatment programs instead of felony convictions we might resolve many problems before they become statistics. We can tinker with police community outreach, provide stricter guidelines for engagement and the use of force and institute better ways of policing the police (oh, please let us have a uniform standard for conduct and an external agencies that review police shooting across the nation), but in the end the panacea we are looking for won’t come from a guy or gal on the beat– with or without a gun. They will come from providing adequate resources to all our public workers, developing jobs programs and training for individuals from all walks of life, and from our own personal engagement with the community in which we live. Maybe it’s time to stop looking to the police to solve the problems of our deeply dysfunctional system. Rather, we should restructure the system so we don’t need the police—or not nearly as much. Maybe it’s time we all signed up.
This really happened. In the eighth grade, prodded by Ms. Spiver, an enthusiastic teacher with an enlightened vision for an open classroom, I had the opportunity to research different governing systems. I chose communism because the name sounded cool and appeared to frighten everyone. I read about Marx and Lenin and the proletariat of the state and the main idea which I glommed was to ensure everyone’s basic needs were met. This seemed grand, generous and even beautiful. I quoted the Encyclopedia Britannica at length, and with a flourish, scribbled out three pages in long hand, ending the paper with a makeshift version of the iconic hammer and sickle.
I thought Ms. Spiver would be proud.
The next day I was called into a parent/teachers conference. This was in Raleigh, North Carolina circa 1976 when the rabid anti-communist Senator Jesse Helms graced the Channel six news editorial spot which my father listened to every. single. night.
Ms. Spiver was all ‘tender mercies!’ and ‘Lord child!’ and ‘where did you get such ideas?’ and I wasn’t sure if she was as concerned about my paper and my education as the possibility that Mr. Creigh, who substituted as an insurance agent on days when he wasn’t playing the principal, might take serious offense. But I explained, and even defended as best I could the idea of equality, and everyone getting what they needed, these all seemed like fine goals. What was the problem? Ms. Spiver, to her credit, did not try to correct my initial interpretation, but merely advised that my opinion on the matter was somewhat out of step with the adult population of Raleigh, North Carolina circa 1976. Mom and dad ushered me home, silent in their Buick. Dad finally parked the car in the lot and turned and proceeded to give me the low down. “Communists are bad because they represent a totalitarian system. They don’t allow freedom. You understand?”
I nodded my head.
“Okay.” That sounded like something to avoid. And the tone in my father’s voice was enough for me to forget my flirtation with alternate political systems until high school when we began looking at the social democratic governments, and I found myself once again intrigued by the idea that a government would be based on people getting what they absolutely needed; regardless of their jobs, social stations or life situations.
Denmark, Finland, Sweden, England, to a lesser extent, Germany and Spain. If all these countries pursued such programs, why didn’t we?
My father, with the patience of Job, once again explained what he thought should have been obvious.
“What if I just gave you a dollar every week instead of letting you earn a dollar by mowing the lawn? Hmmmm?”
“I’d have a dollar but I wouldn’t have to mow the lawn.”
Yes, he conceded, okay, but that’s not the point. The point is if you give people something for nothing they’ll take advantage of it. Like all those welfare queens.
By this time, Ronald Reagan was running for high office and was denouncing shady welfare queens that rode around in Cadillacs and bought caviar with tax payer’s money. This activity rankled the hell out of Jesse Helms who never missed an opportunity to denounce the welfare moochers.
Do you want to be a welfare queen?
I decidedly did not want to be a welfare queen. I gathered from my father’s tone that I was not supposed to like the idea of riding around in a Cadillac, eating caviar at the tax payers’ expense, no matter how much fun it might appear.
By the time I entered college, Reagan was in his second term. Taxes had been slashed and the poorer residents of mental homes were dumped onto the city streets. Despite the loss of tax revenue, billions were being funneled into such patently absurd pursuits as an armed space shield; a so called ‘star wars’ shield that would provide cover for the Western Hemisphere by shooting down missiles aimed to blow up our cities. Since there were none and since billions were being funneled into a useless and unworkable program while the homeless and mentally handicapped were left to fend for themselves, (many times I stood in line with them at the local 7-Eleven), I wrote a few college paper editorials suggesting this kind of activity was ill-advised. I proudly signed my name.
My college Spanish teacher, a middle aged Cuban exile, caught up with me one day.
“I have read what you have written,” she whispered, “You are part of this nuclear freeze movement, too, no?”
“Yes.” I said. Sure I was. Who wouldn’t be opposed to nuclear weapons lying around waiting to obliterate the world 200 times over?
“Are you a communista?”
Of course I wasn’t a communista! What had that to do with the nuclear freeze movement? But, for her, the nuclear freeze movement was loaded with fellow travelers and communist sympathizers and what not. I tried to ease her mind by telling her I wasn’t a communist, closer to a democratic socialist, really. This did not appear to help matters.
“You know I come from Cuba. There, when Castro came to power, he forced my family into exile. We had a mansion and servants in Cuba, but when I came to this land, I had to cut my hair and sell it, just to survive. Can you imagine?”
I really couldn’t. “So you were very rich,” I said, “That must have been nice.”
“They stole everything!”
“Right. But now Cuba has much better infant mortality and death rates. It has one of the best medical systems even by Western standards. Cuban doctors help poor people all over the world.”
“So you are a communista!”
“No, I’m not. If I’m anything, I’m a social democrat, like in Finland.”
“It’s the same.”
“No, they’re really different.”
And so I went on to explain to her that one could be a social democrat without falling in lockstep with state run economies like in Cuba or the Soviet Union. In fact, one of the best examples of social democracy operates as the capitalist heart of Europe: Germany. “They have what they like to refer to as a social market economy. They try to combine the virtues of a market system with the virtues of a social welfare system. You can get a free education, even free higher education, free healthcare and free retirement. Some of your basic essentials are guaranteed by the government, but other stuff, like where you work or what you make is dictated by a private sector economy. Of course, you pay taxes for these things, but the government operates to redistribute the money so it benefits everyone. That is social democracy in a nutshell.”
“It will never work,” she advised me, predicting Germany’s downfall by the end of the decade.
That was 1987. Germany’s still around. It’s 2015. Germany still provides free healthcare, free retirement and free higher education and it is still one of the strongest economies in Europe. Our economy, conversely, is dogged by huge gaps of inequality, a dysfunctional healthcare system moderately improved by the ACA, insanely expensive higher education costs, and a retirement system whose paltry offerings are even now threatened by reactionary politicians. Our incarceration rate is the highest in the world. Our homicide rate is one of the highest. Our infant mortality rate is higher than Cuba’s and is comparable to Serbia. You read that right, Serbia. None of these things are natural or necessary. They are by design because we refuse to grow up like the rest of the civilized Western world and insist on the fairy tale version of capitalism that doesn’t require any funding for public infrastructure or social services beyond the absolute bare essentials. The only thing we want to pour money into is our vastly over sized military which has caused many more problems in the last few decades than it has solved.
The majority of the Western industrialized world embraces some form of socialized democracy. In our own country the most successful government programs are inherently socialized: Medicare, Social Security. And, of course, our own Defense Department is an almost entirely socialized bureaucracy. We have patches of socialism all over the place, but the rightwing has done an excellent job demonizing the term. In fact, the last time someone claiming to be a socialist ran for President was nearly a 100 years ago. His name was Eugene V. Debs. He famously said when he was convicted of violating the Sedition Act in 1918, that “while there is a lower class, I am in it; while there is a criminal element, I am of it; while there is a soul in prison, I am not free.” Ringing words that beautifully encapsulate a social democrat’s world view.
It’s become increasingly obvious that a strictly free market agenda is disastrous for a people and an economy. One only need look at Kansas under Brownback’s ideological leadership. The state’s surplus has been turned into a catastrophic black hole of debt through a combination of tax cuts for the wealthiest and slashing of public funds. One could see the same disastrous pile up under George W. Bush’s leadership.
The Spanish teacher who accused me of being a communist told me that I needed to ‘grow up.’ The nice thing about Bernie Sanders candidacy is that it is already grown up. It assumes responsibility for everyone in the nation, not just those that manage to make the cover of Forbes. He has tirelessly advocated for the poor and the underclass and, unlike the vast majority of American politicians, assumes it’s okay to travel coach class. But don’t take it from me that Sanders knows what he’s talking about or that social democracy is a mature governing principle. Take it from that flagship of capitalism, the Economist. In a 2013 article, that magazine declared the social democratic Scandinavian countries, “probably the best governed in the world.”
So there’s no need to carry on with this charade that the ‘socialist’ option cannot win. We can. Actually, in many areas, we already have. Si, se puede, baby. The only real question is, how soon before the rest of us grow up?
Thomas Herndon, a 28-year-old economics graduate student at the University of Massachusetts at Amherst, just used part of his spring semester to turn the Washington austerity consensus on its head. He’s getting tremendous press coverage for finding an Excel spreadsheet error in the root calculations that have driven the recent slash-the-budget mindset in DC. This ‘consensus’ promoted by, among others, congressman Paul Ryan and Secretary of the Treasury, Timothy Geithner, is actually not the first time economic data has been skewed to support prevailing ideological winds. In fact, if you want to track the beginning of the Reagan revolution that called for reducing taxation on the wealthy to encourage ‘growth’ (another fallacy at the heart of neoliberal economic group think), you can find the supporting concept on the back of a cocktail napkin. I am not making this up.
The architect of the Laffer curve, economist Arthur Laffer, drew the infamous Laffer Curve on a cocktail napkin during a small dinner meeting at a Washington hotel attended by Dick Cheney and Donald Rumsfeld. In truth, he drew many variations of the curve before then, but this particular meeting was propitious. Although at first skeptical, when Laffer explained the gist of the curve, that increases in taxes could conceivably lead to a reduction in overall revenue, Cheney became intrigued. If increases in tax could reduce revenue, surely the reverse was also true! Decreasing the tax rate could conceivably increase revenue!
With great excitement, the Republican establishment latched onto this idea, arguing counter intuitively that decreases in tax rates would actually increase revenue because so called ‘wealth producers’ would be willing to create “more wealth” if it was not taken from them with taxation. In short order, the notorious concept of ‘Supply Side’ economics was born, with Arthur Laffer’s curve serving as its foundational principle.
But many economists have questioned the utility of the Laffer Curve in public discourse. According to Nobel prize laureate James Tobin, “the ‘Laffer Curve’ idea that tax cuts would actually increase revenues turned out to deserve the ridicule with which sober economists had greeted it in 1981.” It would only ‘increase wealth’ to a very limited degree and based on a fairly precise understanding of what level of taxation would actually deter economic growth, a fairly high rate, as it turned out.
It’s also a theory which has been widely discredited, both on a theoretical level and in practice. Because with the Laffer curve – perhaps unusually for economics – we have a historical instance of it being implemented by a direct proponent. Arthur Laffer, thanks to his cocktail napkin meeting with Dick Cheney and Donald Rumsfeld, became an instant persona grata of the Reagan administration. On the conceptual promise of the Laffer curve, Reagan cut the marginal higher rate of personal income tax from 70% to 28%. A dramatic slash. The effect on the budget deficit was also striking. Reagan doubled it to $155 billion and tripled government debt to more than $2 trillion. His successor, Bush senior, was forced to raise taxes as the deficit doubled again.
Not all taxes were treated the same. Payroll taxes were increased. So taxes were cut for higher earners while workers paid more. Corporate and capital gains tax rates were also cut in an earlier outing for current “austerity” policies, the transfer of incomes from labor and the poor to capital and the rich.
The Laffer curve relies on the twin assumptions that the rich create the output in an economy and that they need incentives to choose idleness over work. But there is little evidence to support these hypotheses. On the contrary, economists from Adam Smith to Karl Marx have known that all value in an economy is created by labor. Those who labor are obliged to work in order to purchase the necessities of life.
Which brings us to that little big error Thomas Herndon recently revealed. According to the New York Times magazine Herndon first started looking into Reinhart and Rogoff’s work as part of an assignment for an econometrics course that involved replicating the data work behind a well-known study. Herndon chose Reinhart and Rogoff’s 2010 paper, “Growth in a Time of Debt,” in part, because it has been one of the most politically influential economic papers of the last decade. It claims, among other things, that countries whose debt exceeds 90 percent of their annual GDP experience slower growth than countries with lower debt loads — a figure that has been cited by people like Paul Ryan and Tim Geithner to justify slashing government spending and implementing other austerity measures on struggling economies.
Herndon pulled up an Excel spreadsheet containing Reinhart’s data and quickly spotted something that looked odd.
“I clicked on cell L51, and saw that they had only averaged rows 30 through 44, instead of rows 30 through 49.”
What Herndon had discovered was that by making a sloppy computing error, Reinhart and Rogoff had forgotten to include a critical piece of data about countries with high debt-to-GDP ratios that would have affected their overall calculations. More importantly, they had consciously excluded data from Canada, New Zealand, and Australia — all countries that experienced solid growth during periods of high debt and would thus undercut their thesis that high debt forestalls growth.
The mistakes Herndon found were so big, in fact, that even Herndon’s professors didn’t believe him at first. As Reuters reported earlier:
“At first, I didn’t believe him. I thought, ‘OK he’s a student, he’s got to be wrong. These are eminent economists and he’s a graduate student,'” [UMass Amherst professor Robert] Pollin said. “So we pushed him and pushed him and pushed him, and after about a month of pushing him I said, ‘Goddamn it, he’s right.'”
According to the New York Times, “After consulting his professors, Herndon signed two of them — Pollin and department chair Michael Ash — on as co-authors, and the three of them quickly put together a paper outlining their findings. The paper cut to the core of a debate that has been dividing economists and politicians for decades. Fans of austerity believe that governments should cut spending in order to grow their economies, while anti-austerians believe that government spending in times of economic duress can create growth and reduce unemployment, even if it increases debt in the short term. What Herndon et al. were claiming, in essence, was that the pro-austerity movement was relying on bogus information.”
Now that the Laffer curve is pretty much a laughing matter, and whatever economic basis there was for an austerity push in the middle of a recession has been flushed down the toilet, surely Washington will see the light, rebuke the self-inflicted sequester, and start working to save the economy by funding real jobs programs rather than killing them, right?
Um, not so fast:
“With Reinhart and Rogoff’s once-authoritative work now under serious question, there’s no question that the austerity movement has been dealt a major blow. But Herndon’s finding won’t likely stop politicians from trying to reduce the deficit. The global march for austerity began before Reinhart and Rogoff’s work was published, and will continue as long as there are people who believe that governments can shrink their way to prosperity.”
Still, Herndon holds out hope. He calls austerity policies in the United Kingdom and elsewhere “counterproductive.”
“I have social motivations,” he told the New York Times magazine. “I care deeply about how policy affects people.”
So do we.
*Quick follow-up. Looks like the Harvard Professors who authored the buggy study that ended up supporting the worldwide austerity consensus–that is killing economies from Spain to the US– have direct social and financial ties to….(wait for it)….Pete Peterson. That same Pete Peterson who desperately wants to privatize Social Security, and who lionized the Simpson Bowles ‘Cat Food’ Commission. Small world.
Pete Peterson Linked Economists Caught in Austerity Error
Believe it or not, there are at least a handful of individuals that actually consider austerity measures at this point in time ‘good medicine’. Almost none of these people are reputable economists, or business leaders. Most, in fact, are politicians with less than savory motives. Or Paul Ryan, but I repeat myself.
For the handful of individuals who honestly want to help the economy with austerity cuts, their basic thinking goes something like this:
‘In the short-term, austerity cuts will be painful, but it’s necessary to prevent the collapse of Western society as we know it.’
In fact, words to this effect can be found in a recent article by Joshua Green in Bloomberg Business Week, bemoaning the fact that no one takes the suggestions of the Simpson Bowles commission (i.e., Cat Food Commission) seriously. There’s just a little desperation to the evident failure of their grand plan:
“The outside strategy to persuade the public has also fallen short. It depended on scaring people into believing that a crisis is imminent. For all their resources and the attention they garnered…” they have managed to fail.
“They” of course, are Simpson and Bowles, and, more relevantly, the folks at “Fix The Debt”, under the steely guidance of Pete Peterson, the billionaire who is aghast that poor people can still manage to get money from the government, somehow.
Alas, “Millions of Americans are more anxious about jobs, stagnant wages, slow growth, and a host of other domestic problems…” than they are about ‘fixing the debt…’
Priorities, people! Priorities!
What comes to mind, on hearing these words, is the pale patient from some 19th century novel, broken by unrequited love or some other trauma, staring blankly at the ceiling while the meddling surgeon stops by to help. With leeches, naturally. Why? Well, because in the medieval theory of medicine, any sickness that caused the subject’s skin to become red (e.g. fever and inflammation), must have arisen from too much blood in the body. Similarly, any person whose behavior was strident and “sanguine” was thought to be suffering from an excess of blood. Thus leeches were used to draw off the excess blood and cure the illness. Viola! Similarly, we have our current crop of doctors holding onto a zombie economic cure that just won’t go away. ‘Cutting’ the national budget in a time of deep recession will somehow be good for our economic body; when there is zero empirical evidence to support this view.
Am I saying the current House Budget plan put forward by Paul Ryan that stoically embraces slashing programs that will eviscerate the middle and lower class is the equivalent of medieval blood-letting?
Why, yes, I am. And it is just as deadly in its unintended consequences, (killing the patient) and just as useful in producing a cure.
You would think, in retrospect, that doctors of early 19th century would have looked at the available empirical evidence (dead and dying patients) and concluded that their remedy wasn’t working–but they didn’t. They assumed it was an insufficient dose of blood-letting and just went on all the more savagely until said patient kicked or somehow managed to survive the cure. Even after William Harvey (who famously described the circulatory system for the first time) disproved the practice as far back as 1628 and went on to decry the use of blood-letting, the practice never lost favor. Bloodletting was used to treat almost every disease. One British medical text recommended bloodletting for acne, asthma, cancer, cholera, coma, convulsions, diabetes, epilepsy, gangrene, gout, herpes, indigestion, insanity, jaundice, leprosy, ophthalmia, plague, pneumonia, scurvy, smallpox, stroke, tetanus, tuberculosis, and for some one hundred other diseases. Bloodletting was even used to treat most forms of hemorrhaging such as nosebleed, excessive menstruation, or hemorrhoidal bleeding. Before surgery or at the onset of childbirth, blood was removed to prevent inflammation. Before amputation, it was customary to remove a quantity of blood equal to the amount believed to circulate in the limb that was to be removed.
This progressed well into the 19th century. In the 1830s, the French imported about forty million leeches a year for medical purposes, and in the next decade, England imported six million leeches a year from France alone. Through the early decades of the century, hundreds of millions of leeches were used by physicians throughout Europe.
Applying austerity measures to a depressed economy is the same kind of perverse bloodletting. You take what minor liquidity remains in the economy and suck it off to no good purpose. You are killing the patient, which, in this extended metaphor, just happens to be a large portion of the American public–and ultimately, much of the national economy. The bloodletting has left a landscape riddled with political violence, instability and massive unemployment –in short dying patients. Greece. Portugal. Spain. Ireland.
There’s one exception in this bleak economic landscape of blood spattered doctors. Iceland.
Iceland kicked out the leech mongers. They sensibly held bankers to the same rules of law that applied to the average citizen…Instead of bailing out the banks and cutting social programs, Iceland paid off loans for consumers and threw bankers in jail for corruption. They let homeowners wipe out debt up to 110 percent of the property value. They declared loans indexed in foreign currency illegal and said debtors could pay them back in krona, their local currency. According to Bloomberg:
“These policies helped consumers erase debt equal to 13 percent of Iceland’s $14 billion economy. Now, consumers have money to spend on other things. It is no accident that the IMF, which granted Iceland loans without imposing its usual austerity strictures, says the recovery is driven by domestic demand.
In addition to easing consumer debt, Iceland reduced government spending and increased revenue by raising taxes and cutting deductions that mainly benefited the well-off, a path the U.S. might profitably emulate. In fact, relief for overburdened U.S. consumers is a cause promoted by former U.S. Federal Deposit Insurance Corp. Chairman Sheila Bair. Bair would have done more to aid sinking homeowners and done less for banks, but she said her efforts were blocked by Treasury Secretary Timothy Geithner and others.
It worked in Iceland. A deficit that reached 13.5 percent of gross domestic product in 2009 fell to 2.3 percent last year. The IMF predicts Iceland will have a primary surplus (excluding interest on debt) of 1.5 percent this year.”
Iceland isn’t a miracle. They just acted rationally on available evidence. They rejected the austerity measures, threw out the blood-letters, and jailed their bankers. Conversely, much of Europe where austerity is being applied vis-a-vis the ‘Washington Consensus’ is rioting. Unemployment is spiking, the young are unschooled and the old are starving as social programs are slashed.
One thing I should add. Modern science has found that there are a few instances when bleeding someone with leeches has some benefit, especially in instances of hemochromatosis, or an overload of iron in the blood supply. Sadly, the same thing can’t be said for severe austerity measures—the economic equivalent– on the brink of a great recession. The only result is a patient growing weaker with each progressive treatment, while leeches on the body politic swell.
Once again, APV thanks our friend, writer and activist Jack Johnson for contributing to our blog!
Yes, the title is a wee paradoxical, but so is the logic behind the so called ‘fiscal cliff.’ A little history: the term ‘fiscal cliff’ was first used this year by Fed Chairman Ben Bernanke when he warned of a “massive fiscal cliff of large spending cuts and tax increases” that would hit us on January 1, 2013 due to a deal cut by Republicans and Democrats to raise the debt limit last year. But, as Paul Krugman has suggested, contrary to the way it’s often portrayed, the looming prospect of spending cuts and tax increases isn’t really a fiscal crisis. It is, instead, a political crisis brought on by the Republican’s attempt to take the economy hostage.
Last year the Republicans essentially extorted congress to agree to the ‘fiscal cliff’ by holding the (usually automatic) rise of the debt ceiling hostage. Erskine Bowles, Alan Simpson (who headed up the National Commission on Fiscal Responsibility and Reform a.k.a. The Cat Food Commission because its recommendations would lead to our seniors eating cat food) and other ‘deficit scolds’ enabled them by beating the drums for ‘deficit reduction’ at a time when deficit reduction was the last thing our economy needed. Central to their ideas was a conservative framework for limited government. They proposed three dollars in spending cuts for every dollar increase in taxes, instead of splitting savings equally between the two. Simpson and Bowles also appeared on MSNBC’s Morning Joe to discuss their proposals and at one point, Simpson explained his view that balancing the budget would require going “to where the meat is. And the meat is health care, Medicare, Medicaid, Social Security.” They were both in favor of cuts, either explicitly, using privatization or implicitly, by raising the age limit to enter Social Security to 69. They also favored lower tax rates across the board as a ‘guiding principle’… They didn’t get their way, but Republicans were able to use the deficit reduction fervor they helped to generate as cover to negotiate their draconian ‘fiscal cliff.’
So now, on January 1, about $400 billion in tax increases and $200 billion in spending cuts will take effect. That’s $600 billion, or 4 percent of GDP, and that—everyone agrees– would be a drag on the economy.
Like most economists, Bernanke thinks that serious budget reduction in the middle of a recession / depression is a bad idea. In fact, turns out MOST rational people on Earth think budget reduction in the middle of a recession is a bad idea, too. Except folks who have another dog in the hunt, folks who aren’t so much interested in deficit reduction as they are in so called ‘entitlement reform’ (that would ultimately translate into the privatization of Social Security) and corporate tax relief; folks like Erskine Bowles.
Here’s something we need to understand –there is a Wall Street Wing of the Democratic party, and one of its most eager representatives is Erskine Bowles. According to Bill Black, noted economist and blogger at Naked Capitalism, Bowles along with Alan Simpson is allied with Republican Wall Street billionaire Pete Peterson who has pledged a billion dollars in the effort to privatize Social Security called “The Third Way”.
Black writes, “The Third Way represents the Wall Street wing of the Democratic Party and has pushed successfully for the worst domestic failures of the Obama administration, including continuing the Bush administration policy of granting the elite banksters whose frauds drove the crisis de facto immunity from criminal prosecution. … Third Way is also useful to Wall Street’s pursuit of other major priorities, including austerity and gaining access to tens of billions of dollars in freebie profits from beginning to privatize social security. Third Way’s specialty is spreading the faux “moral panic” that the safety net is the great threat to America.”
But here’s the thing. The safety net is no threat to America. The great threat to America is gutting our safety net, or, to put it more simply, the Third Way itself.
In fact, according to Jon Chait, the hazards of the fiscal cliff are greatly over rated in the short term. Going over the fiscal cliff and then doing nothing for another year would mean a huge tax hike and spending cut. But waiting until January would mean extremely gradual tax increases and spending cuts, ones that would not even begin to take place immediately, because Obama has the ability to delay their implementation. And even after they’re implemented, the effect would be gradual, and could subsequently be canceled out. “It’s like saying if you go three weeks without food you’ll die so if dinner isn’t on the table at 6 o’clock sharp terrible consequences will follow.”
So here’s how this could play out. On January 1, the Bush tax cuts disappear and everyone’s taxes automatically revert to the higher Clinton-era rates. At that point, the conversation changes: Suddenly we’ll be talking about cutting taxes on the middle class and maintaining them where they are now on the rich. And Obama can basically go on TV every single day and say that he’s ready to sign a middle-class tax cut any time, but Republicans are refusing to agree unless their rich pals also get a tax cut. Exit polls show that the public—both Democrats and Republicans– DO NOT want to give the rich a tax cut, and they are going to be angry that the GOP is holding their tax cut hostage unless Donald Trump gets a tax cut too.
So there’s no real reason to fear the fiscal cliff, at least not in the short term, unless, of course, you listen to the loud drum beating by folks like Erskine Bowles who recently wrote a hand wringing op-ed in the Washington Post deeply concerned about jumping off the cliff.
“Going over the fiscal cliff would mean allowing a massive and immediate cut to nearly every major government agency and activity, including those vital to our national security or economic growth. It would mean a large and immediate tax increase on nearly all Americans, not just the highest earners. It would mean a double-dip recession at a time when the economy is still very weak and many Americans are struggling to find work.”
Some of this simply isn’t true—the cuts would not be immediate. They would be gradual. The tax increase wouldn’t be paid until taxes were due and much could change—in fact would change— if the political calculus is handled correctly. The double-dip recession isn’t likely to occur, again, unless the Republicans remain intransigent on tax cuts for the middle class—which would be political suicide. But even if Bowls hyped paranoia was the case, why not simply punt on the fiscal cliff and continuing to add to the debt? Who exactly says the debt is such a great problem that it has to be dealt with NOW in the middle of a recession? Not Ben Bernanke. Not Paul Krugman. Not Joe Stiglitz. Not Bill Black. Not the vast majority of respected economists out there. Not anyone I know of reasonable intelligence. In fact, it’s only Erskine Bowls and his Wall Street buddies that think this is so important it has to be tackled right now.
Says Bowls: “simply punting on the fiscal cliff and continuing to add to the debt would be an even bigger mistake. It would show markets we cannot put our financial house in order.”
Did you catch that? The ‘markets’ –that is Wall Street brokers– might get nervous. I’m wondering at this point, how many friends in the broader community these Wall Street brokers currently have. One suspects Bowles has an interest in shading the truth. He was an investment banker before he entered politics, and he currently serves on the board of directors for both Morgan Stanley and GE. He was chief of staff under Clinton from January 1997 to October 1998, during which time he tried to broker a deal on Social Security with Newt Gingrich and would have succeeded if it weren’t for the Lewinsky affair. Opening up a grand bargain on what he refers to incorrectly as ‘entitlements’ is one of the fevered dreams of Wall Street denizens—and Erskine Bowles, both for profit and personal legacy. So Erskine may not be exactly impartial on this matter.
Luckily, we also have such noted impartial parties as the Wall Street Journal itself wailing about the dangers of the ‘fiscal cliff’ and opining that the President should take John Boehner’s generous offer “ to maintain the Bush tax rates for at least another year, ease the sequester for defense in particular, and in return GOP House leaders will be open to giving the President new revenue.”
Got that? Accept Bush tax cut for another year on the promise of ‘being open to… new revenue’ from….somewhere…but where? Apparently, that’s to be figured out later.
Sounds like quite the bargain.
The Journal also offers some advice to Obama as to how he can prove his good faith — by appointing a well-respected figure to succeed Tim Geithner as Treasury Secretary. You’ll never guess who the Journal has in mind:
“On the other hand, the choice of someone like Erskine Bowles, who led Mr. Obama’s deficit commission in the first term, would signal a desire for serious negotiations. Especially after the fiasco of the “grand bargain” talks of 2011, Mr. Obama needs a point man whom Republicans think isn’t a political hit man.”
But, in his own way, Bowles is certainly an opportunist, if not a political hit man. He’s a close friend of Peter Peterson, and the entire Third Way movement see him as key. That’s exactly the person you don’t want in office, or anywhere near these negotiations.
One of the most important reasons why more Americans support the Democratic Party than the Republican Party is the conventional wisdom that the Democrats guard our social safety net. If Obama and the Democrats, led by the likes of Erskine Bowles or other so called ‘centrist’ offer a grand bargain in which paid benefits programs like Social Security are in play it will be more than a political disaster; it will amount to a betrayal of all those who have elected him. The only people who win in such a ‘grand bargain’ are the denizens of Wall Street and their Third Way lackeys.
~by Jack Johnson
Microcredit – Changing Village India
Perhaps one of the more ‘economically’ revealing movies in recent years was Slum Dog Millionaire, not only for its intriguing plot line but also for the scenes of contemporary India, scenes of disastrous poverty juxtaposed against obscene wealth. To a Western sensibility the primitive desperation of the Indian orphans is reminiscent of something out of a Charles Dickens novel, yet, for many around the world, it is merely a tragic common place. Lately, even for those of us in the ‘wealthy’ West.
“I would walk by people dying from famine to teach my economics class at the university…and I said ‘What is this?’ I felt completely empty…the theories I was teaching were useless for these dying people. I realized I could help people as a human being, not as an economists…So I decided to become a basic human being…I no longer carried any preconceived notions.”
As a ‘basic human’ Yunus led his economics students on a field trip to a poor village in Bangladesh. They interviewed a woman who made bamboo stools, and learned that she had to borrow the equivalent of 15 pounds to buy raw bamboo for each stool made. After repaying the middleman, sometimes at rates as high as 10% a week, she was left with a single penny profit margin. Had she been able to borrow at more advantageous rates, she would have been able to amass an economic cushion and raise herself above subsistence level.
What Yunus discovered as a ‘basic human’ was that all humans have basic needs. And one of the most basic was simply credit at a reasonable rate.
Against the advice of banks and government, Yunus started giving out ‘micro-loans’ at low rates, and in 1983, he formed the Grameen Bank, meaning ‘village bank’ founded on principles of trust and solidarity.
One more unusual feature of the Grameen Bank is that it is owned by the poor borrowers of the bank, themselves, most of whom are women. Of the total equity of the bank, the borrowers own 94%, and the remaining 6% is owned by the Government of Bangladesh.
The Grameen bank was just the beginning, of course. Move Your Money and Occupy Wall Street have followed up on these efforts. According to the web site of the Move Your Money campaign, an estimated 10 million accounts have left the largest banks since 2010. There’s good reason for this. In the West, the largest banks have become usurious in their late fees and over draft charges and penury in the interest they pay on savings. More importantly, as Occupy Wall Street and Move Your Money have pointed out, the larger the institution, the less likely they are to assist the community. They are more like vultures, picking over the corpses of the economically dead, than the heroic George Bailey who loaned out money not for the profit of a few, but for the good of the many.
In the following article, Ellen Brown for AlterNet details how cooperative banking is reinventing today’s financial industry in a way that would make George Bailey smile….Really.
Stop the presses. Grover Norquist, that ruddy no-tax zealot of the far right has just had his neatly trimmed beard plucked. Freshman Republican Scott Rigell of Virginia, has openly rejected his insanely rigid no-tax pledge. Why?
Um, because it’s insane.
Rigell carefully explained on his website that such a pledge would be counterproductive when working in a real world environment. Unlike Grover’s world, revenue is sometimes necessary for the functioning of, well, everything, including the government. Rigell points out that such no-tax pledges will prevent Congress from eliminating corporate loopholes or government subsidies because those changes would have to be revenue-neutral. The math, he said, just doesn’t make sense.
A refreshing confession from the ranks of the no tax inquisition: the math just doesn’t make sense. Indeed, ask any moderately conscious ten-year old and you might have gotten the same response. Of course, said ten-year old may also believe in biological evolution and the fact that man-made climate change is as real as you’re neighbor’s Ford Explorer — intellectual advances notably missing from today’s GOP, but we’ll take what we can get.
Norquist, in his role as Grand Inquisitor of the GOP’s no-tax inquisition made wet, forgiving sounds, but there was an edge to it:
Of Rigell’s apostasy, he said, “I think he’ll make it clear he’s not going to raise taxes and he’ll get himself reelected and whatever momentary impure thoughts he had on taxes will pass.”
Good to know those ‘impure’ thoughts –raising revenue for government services –won’t be a hindrance to his political career, although, Norquist added, while twisting the ends of his thin mustache, that he had “been in touch with the Republican Party in [Rigell’s] district, and they aren’t excited about it.” Then, with a hint of menace, “This is not going to be a continuing problem.”
But Rigell is not alone, and despite Grover’s electoral extortion, a few other Freshmen Republican are turning to elementary math and learning to add and subtract.
According to Politico: Freshman Reps. Kevin Yoder (R-Kan.), Richard Hanna (R-N.Y.) and Rob Woodall (R-Ga.) never signed the pledge to begin with, making up half of the six House Republicans who refused to sign on.
Woodall argued the pledge was too restrictive because it promises that lawmakers must “oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.”
No word from Inquisitor Grover on whether the Republican Freshmen will be tortured, excommunicated or simply burned at the stake for their tax heresy, but GOP Speaker of the House, Boehner is said to be tearfully praying for their lost souls.
More here from Politico:
GOP rookies buck Grover Norquist
And more! Has Rigell quit drinking the Kool-Aid?
Virginia Republican Wants To Tie Congress’s Pay To Its Effectiveness
Trying to figure out what our leaders are attempting to accomplish from one week to the next is a daunting task that should, it seems to me, be much easier. Truthful accounts for the people to consider are not too much to ask. It is, after all, our country. But finding out the truth (even for our lawmakers) – about the Internet, Wikileaks, drone use and cluster bombs, or plans for regime changes, has become a harried dash through a maze of conflicting reports, where the “best guess” approach is all we have.
The current presidential debates have been no comforting indication that our leaders will have a grip on reality any time soon. I find myself watching them anyway, and sometimes they’re the only good comedy on.
The thing is, as long as our government is permitted to have secret laws, secret distribution of our money, and secret plans for global expansion that are so covert our Generals are shocked to learn about them, the “best guess” approach will probably include reports that seem incredible.
I know that one year ago I didn’t believe some of what is today’s common knowledge, including 26 TRILLION dollars in bank bailouts!
And by the way, with everything else that’s going on, just the thought of equipping our police forces with domestic drones gives me the creeps.
Anyway, these DemocracyNow! War and Peace Reports from yesterday cover several concerning issues of domestic and foreign policy, and the guest is Glenn Greenwald, constitutional law attorney and political and legal blogger for Salon Magazine. Deciding who is “in the know” and who isn’t, is getting ridiculous, but I like these two sources because they report on pretty much everything and have a good track record. So, see what you think.
WikiLeaks Wins Major Australian Journalism Prize
One more thing … and this is really important. Congress is set to change the internet from what we have now to something very different. SOPA and PIPA are acts that threaten the structure of the web with the use of DNS filtering. Please do what you can to stop them from going through. Here’s a video about it and an urgent message from DailyKos with a link to where you can help.
And for the daunted, a little pep talk from Howard Zinn. We can do this!
Thanks from APV. We hope you get involved, and have a great week!
Wait! Here’s an update from APV member, Katherine Walker. I love this one. It’s short and it’s a great share!
If you haven’t seen this heartfelt speech until now, it might be because it was hacked shortly after it went up on Thursday. The culprit probably wasn’t an Arlo Guthrie critic, so my guess is someone feeling protective of a broad group of plutocrats. Anyway, take the time while it’s still up to read this well-respected, time-tested gentleman’s assessment of what has happened to our country, and the lyrics he looked to for inspiration.
He speaks passionately about America’s plutocracy, “where political power is derived from the wealthy and controlled by the wealthy to protect their wealth.”
Moyers and many others believe it was a plan that got its big kick-off from Lewis Powell, Jr.’s confidential memorandum, Attack of American Free Enterprise System. A copy of it is in an earlier post remembering the manifesto’s fortieth anniversary. It’s surprisingly short for all the damage it’s done, whether or not Powell realized its horrific potential.
Another interesting, infamous memo, sent only to its wealthiest customers, was from Citigroup in 2005. In The Plutonomy Symposium Rising Tides Lifting Yachts, global strategist Ajay Kapur came up with the term “Plutonomy” describing our massive income and wealth inequality. He discusses the advantages for the wealthy almost gayly, advising patrons that “… these wealth waves involve great complexity exploited best by the rich and educated of the time.” The arrogance in the two-part memo is deafening:
This imbalance in inequality expresses itself in the standard scary “global imbalances”. We worry less.
Also, in part 2, on March 5, 2006, some of the no-nos for their beloved “Plutonomy” are shared. Though it wasn’t intended for the 99% to see, it’s interesting how their risk list stacks up today.
RISKS — WHAT COULD GO WRONG?
Our whole plutonomy thesis is based on the idea that the rich will keep getting richer. This thesis is not without its risks. For example, a policy error leading to asset deflation, would likely damage plutonomy. Furthermore, the rising wealth gap between the rich and poor will probably at some point lead to a political backlash. Whilst the rich are getting a greater share of the wealth, and the poor a lesser share, political enfranchisement remains as was — one person, one vote (in the plutonomies). At some point it is likely that labor will fight back against the rising profit share of the rich and there will be a political backlash against the rising wealth of the rich. This could be felt through higher taxation on the rich (or indirectly though higher corporate taxes/regulation) or through trying to protect indigenous [home-grow] laborers, in a push-back on globalization — either anti-immigration, or protectionism. We don’t see this happening yet, though there are signs of rising political tensions. However we are keeping a close eye on developments.
And then, of course, the lovely lyrics and song by Arlo Guthrie ~ Patriots’ Dream