"Obama and Keynesianism"

The people who believe tax cuts pay for themselves continue to prove they don't really understand economics:

Obama and Keynesianism, by donpedro: In my periodic Googlings for "Obama economics" I've come across this odd post "Obama's Excremental Economics." You might think the title would give it away as a hysterical screed, but it seems to have picked up attention on conservative blogs, and the language doesn't sound completely insane, so I thought it would be worth pointing out what's wrong with it. Here are the main parts of the text:

As prolongation of the 1930s Depression and stagflation in the 1970s demonstrated, Senator Obama’s announced policies are a prescription for economic disaster. Keynesian economic doctrine, not under that name, but in substance, is back in the news in a truly menacing way. Senator Obama proposes to repeat the policies of Franklin Roosevelt’s New Deal that turned an ordinary two-year recession into an eight-year disaster, with unemployment rates continuously in the high teens.

The key elements of Senator Obama’s proposed economic policies, as in the New Deal and the stagflation of the 1970s, are much higher taxes, along with a pervasive increase of business regulations and price controls in healthcare and energy (which sharply depress business activity and employment rates), full-frontal embrace of labor unions (which will push up wages and benefits to levels deterring profitable expansion of industrial production), and massive new government deficit spending (which will accelerate the already dangerously high rate of inflation and devaluation of the dollar). Carried out as he proposes, Senator Obama’s polices will lead us again into the swamp of stagflation.

So, to sum up the key points: 1) Keynesianism is a bunch of bad stuff. 2) Keynesianism (or the New Deal) caused the Great Depression. 3) Keynesianism caused the stagflation of the 1970s. 4) Obama is proposing to reintroduce Keynesianism/bad stuff.

1) Keynesianism is a bunch of bad stuff. So what is Keynesiasm anyway? Boiled down to its essence, Keynesiansim is an economic theory that says that the government can help get the economy out of a slump. For a more complete explanation, Wikipedia isn't bad. Of the points mentioned in the post--higher taxes, business regulation, price controls, labor unions, deficit spending--none are really "Keynesian," except for deficit spending, and that only in time of an economic downturn. In boom times, the Keynesian view is that the government should run a surplus.

2) Keynesianism (or the New Deal) prolonged the Great Depression. This is a fringe view, and I'd never even heard of the idea until I read this post. Here is part of a discussion in which Brad Delong defends his statement that "A normal person would not argue that the New Deal prolonged the Great Depression."

3) Keynesianism caused the stagflation of the 1970s. I believe the mainstream view of the stagflation of the 1970s is that it was caused by a combination of the oil price shock and the subsequent unsuccessful effort of central banks to avoid an economic downturn by priming the money supply (a Keynesian response.) But this was really a damned-either-way situation. If the central banks had reined in the money supply, we would have had a bigger recession, albeit without inflation.

4) Obama is proposing to reintroduce Keynesianism/bad stuff. Obama can't be reintroducing Keynesianism, since it's been the guiding force for macroeconomic policy almost as long as John McCain has been alive. In recent months, when the Fed lowered interest rates and Bush signed a fiscal stimulus package, we saw Keynesianism in action. There are differences of opinion as to which Keynesian levers to use, and how hard to pull, but no one seriously argues that when it comes to the recession the government should just sit back and wait for it to end. (OK, OK, there are a few academics, but even the Republicans have had enough sense to keep them far away from actual macroeconomic policy.)

How about higher taxes, increased business regulations, price controls, more support for labor unions, and deficit spending? Yes, Obama is proposing higher taxes on the wealthiest Americans, but wants to lower taxes for the middle class. Yes, he does want to modernize financial regulation, as do both McCain and Bush. Yes, in the energy sector, he wants to introduce cap-and-trade, but so does McCain. Yes, Obama is proposing a greater role for the government in health care. McCain, in contrast, wants to kill the current health care system. Yes, Obama does support labor unions, and, yes, greater union power just might push up wages and benefits a bit, but most people take that as a good thing.

On deficit spending, if that's your issue, you should definitely vote for Obama. As we've noted before, McCain's program would result in massive new deficits which would dwarf what Obama is proposing. Consider this:

Mr. McCain’s plan would appear to result in the biggest jump in the deficit, independent analyses based on Congressional Budget Office figures suggest. A calculation done by the nonpartisan Tax Policy Center in Washington found that his tax and budget plans, if enacted as proposed, would add at least $5.7 trillion to the national debt over the next decade.

Fiscal monitors say it is harder to compute the effect of the Democratic candidates’ measures because they are more intricate. They estimate that ... the impact of either on the deficit would be less than one-third that of the McCain plan.

Although the "excremental" essay is mostly crap, in some sense it gets Obama's vision right. He does hope to build on the successes of the New Deal--things like Social Security, Medicare, unemployment insurance, and federal deposit insurance--that have made our lives better. Fortunately, despite years of Republican propaganda (like the above essay) which has tried to make government out to be the enemy, most Americans understand that the New Deal was a good thing, and few will be scared by the prospect of "menacing" Keynesianism.

Comments

[Lafayette]

BO's left hand

Article: 4) Obama is proposing to reintroduce Keynesianism/bad stuff

Despite the clamor (of the blogger), what (I think) he means to do is attack increased taxation. These nerds go into a blue snit every time someone infers that what Ronald Reagan did resulted in Income Inequity for America. Which, curiously enough, they forget to defend, because it is indefensible -- given the available data analysis that have been amply shown in this forum.

And yet, even if Obama may be menacing a hike in taxation, it is far from obvious. I see it no where. Any one ever see that in print? Ever see him say it in public?

Probably not. It's a disastrous statement to make in America. And, yet, that's what's gotta happen.

Axing marginal tax rates by Ronny, the Trickle-down Magician, must be at the heart at what can remedy America's ills. Namely, Social Investments -- to provide decent, affordable Health Care and Up-to-Tertiary Level Education for the population as a whole. Not just those who have the good fortune to be employed comfortably in a well-paid job.

Maybe hiking taxes IS in BO's "hidden agenda". I wouldn't know, I don't sit at his right hand counseling him ... or maybe, given the politics involved in what I suggest, at BO's Left hand.

"Keynsianism" in just the Idiot Right's new-fangled word to encompass all that surely is the devil's handiwork (as regards economic policy). It serves also to give them an air of intelligent discourse. The blog-article cited demonstrates patently as much.

NB: Mention "Idiot Right" in a post and just watch who shows up here to rebut. ;^)

[ken melvin]

Yes, Keynesian, socialist, communist and liberal are all very very bad.

[2slugbaits]

I've never quite understood this argument that somehow Keynes was responsible for the Great Depression...or, since Keynes was British, the "Great Slump" as they called it on the other side of the pond. NBER dates the Great Depression from Aug 1929 to Mar 1933. Now my old copy of Keynes' "The General Theory" has a preface by Keynes dated 13 Dec 1935, so unless FDR somehow got an advance copy of the book, sat down and actually read it (it's a difficult read), then I don't quite see how Keynes can be blamed for the Great Depression, which was already over by the time "The General Theory" was published in 1936. Of course, some wingnuts might know enough history to recall that there was a deep recession in 1937, so they try to blame Keynes for that one if not the Great Depression. The problem is that FDR's policies in 1937 were pretty much exactly contrary to what Keynes argued, so this whole "blame Keynes" game is just too stupid.

And since this Thomas Brewton idiot is worried about Obama raising taxes in a recession, are we to conclude that even after all of Bush's fiscal stimulus and the Fed's monetary stimulus, that we will still be in recession in 2011 when the tax cuts expire??? We know that the right wing national security nuts always like to preach perpetual war against this threat or that threat (Oceana is always at war with Eurasia), but the wingnuts have now extended this idiocy into economics where the economy is always in recession and in need of tax cuts.

Mark...if the University of Oregon will permit it, as a public service for this poor lost soul Thomas Brewton, I propose that you offer him the opportunity to audit one of your macro classes free of charge.

[anne]

What I'm missing is, what is the Obama economic policy? I still have no proper idea. So playing up a false gutter-language essay is not impressive.

[hari]

This is not a serious debate on economic policy. But some *nitpicking* by kids to preserve their own toys or whatnot.
Why can't these guys grow up and face the melody - ie. under present circumstanaces US economy has no where to go but south - unless there is midcourse adjustments.

[hari]

Obama and Appeasement - by GWB!

This sounds very much like a kids game - sand lot fights.

[Noni Mausa]

It is widely confirmed that an "ad hominem" argument, (saying Fred's argument is wrong because Fred has unsightly ear-wax) is a fallacious argument, to be pooh-poohed by all clearheaded people.

The smearing of the words Keynesian, socialist, communist and liberal goes beyound ad hominem, to what I call the Poopyhead Argument, in which you pair up your targeted terms with other evocative, disagreeable words.

This is part and parcel of what the book Lbrl Fscsm is about. He need not have written the book, the blatantly false title does most of the poopyheading for him, even among people who neither buy, read, nor even see it on the shelf, but just hear about it or read about it.

Poopyheading is disgraceful.

Noni

[ddt]

I don't understand why he didn't entitle the book "Progressive Fascism". that would have actually made a slight amount of sense, as opposed to "Liberal Fascism" which just makes no sense at all. It's strange how 'liberal' has turned into a meaningless dirty word in America, land of liberalism. the ACLU and NRA are both liberal organizations. even the right-to-lifers arguments are often based on liberal premises. When exactly did liberal lose the meaning it has had for a century (and still has everywhere else in the world) and became a synonym for "drinks latte, drives volvo, listens to NPR" ?

[Gene O'Grady]

There's a whole series of books, available in the worse sort of Christian bookstore, which use six or eight devils (almost always including Freud and Keynes) to tell the story of how the modern world has been corrupted. This essay takes off from that tradition. How one talks to people who think in these terms I don't know.

Another usual devil, in a field in which I am somewhat better informed than economics, is the late 19th century German theologian and old testament scholar Julius Wellhausen. Almost all of this essay and some of the intelligent responses to it could, mutatis mutandis, be recast to describe the influence of Wellhausen on reading the Bible.

Perhaps what this theory depends on is finding a villain who is the source of corruption of the primal paradise rather than (a) describing and analyzing larger forces at work in history and (b) examining just how paradisical that lost paradise really was.

[robertdfeinman]

The article under discussion has three levels of quotations in it. As more and more people start to participate the discussion threads get increasingly complex. Here's an example of how scholars of the Torah have dealt with the issue:

http://www.judaism.com/gif-bk/13155p.gif

It seems that just indenting and changing font size isn't enough any more, perhaps some boxes around quoted text or other schemes (color?) may be needed to make it clear who is being quoted.

[a]

"But this was really a damned-either-way situation. If the central banks had reined in the money supply, we would have had a bigger recession, albeit without inflation."

Well with reasoning like this, of course Keynesianism can't be anything but great. It was one of the causes of stagflation but - never fear - things would have been worse otherwise. Counterfactuals, which cannot be verified, to the rescue! Keynesians are always right, because we say so!

[bob mcmanus]

Some of the insights of the GT had been floating around at least England since at least 1930. Some the GT is an extension or expansion of Keynes previous work:Probability, Consequences, Theory of Money, papers, conferences and discussions at Cambridge. The GT wasn't a complete shock to Hawtrey, Hayek, Robinson.

Counter-cyclical Gov't spending is an idea far older than the GT.

[jean]

It has always appeared to me that the folks who want less government still want the same level, or more, of services for THEM, (but not for others, i.e. the poor) and don't want to pay for it. I get tired of the 'everyone for themselves' mentality.

[a]

Now the American tax cuts, in the process of being distributed, are Keynesian. And economists will reason in the same way, I guess: sure, they won't stop recession, but if we didn't have them, then things would be even worse. (And how are we supposed to verify that statement?? It seems to be true because economists think it is true.) Never mind, by the way, that we are adding debt to the federal government at exactly the wrong time, as it is already reeling under enormous debt and the Fed has lost more than half the Treasuries on its balance sheet, which increases the risk that the world will lose confidence in the dollar and Treasuries. But hey, that isn't going to happen because economists' models don't say it will happen, so I guess we're all safe. So let's spend away and, all together, go to the shopping mall and save the American economy!

[Don Pedro]

a:
I tried to keep the discussion of stagflation short in my post, without going into a longer discussion.

Stagflation did shake policymakers' earlier, exaggerated confidence in the power of Keynesian policy to deal painlessly with any macroeconomic situation that came along.

But it's flat-out wrong to suggest--as the post I cite does--that stagflation somehow discredited the basic Keynesian notion that monetary and fiscal stimulus in time of economic downturn can help.

I'm not familiar with detailed post-mortems on the stagflation episode and arguments that central banks should have done something substantially different.

[Sufferin' Succotash]

Senator Obama proposes to repeat the policies of Franklin Roosevelt’s New Deal that turned an ordinary two-year recession into an eight-year disaster,

Another example of the sort of offhand historical falsification that's SOP on the Right. The "ordinary two-year recession" had already lasted for more than three and a half years by the time FDR took office in March, 1933. And during that time the nation's unemployment rate had risen to the not-so-ordinary level of 25%.

25%.

[howard]

as kevin james demonstrated so perfectly on hardball, most modern right-wingers don't actually know shit from shinola: they are programmed to repeat moronic slogans and call it a day.

[Spectator]

I find the right wing economic writing even more dangerous than the liberal positions. At least the misguided liberals are trying to help the less fortunate. Most of the right wing economists are party to theft of public funds for the benefit of wealthy paper pushers, and at a much larger scale.

And what bugs me the most is how they usurp and distort good ideas for their partisan ends. Cafe Hayek is one egregious example - a partisan hack that never talks about the credit disaster that would have Hayek turning in his grave.

[Bruce Wilder]

2slugbaits, as far as I know the NBER only dates periods of business expansion and contraction.

What is generally meant by the Great Depression is the prolonged period of high unemployment, during which the "output gap" as we now call it, was not closed.

While it is true that a period of business expansion began with FDR's inauguration in March 1933 and the legendary "100 days" of emergency legislation, that expansion, such as it was, did not end, or substantially relieve the problem of elevated unemployment.

NBER identifies a second business contraction, which began soon after FDR's second term started, and coincided with misguided efforts to rein in the Federal budget deficit in accord with conventional (classical) economic wisdom of the day.

What Keynes saw, and what many economists and ideologues have trouble seeing about the Great Depression, is that economy moved, 1929-1933, to a high unemployment equilibrium. The Classical analysis denies that such a thing is even possible, but I trust we can dismiss the classical analysis as discredited nonsense.

The real argument among modern economists about the Great Depression is whether that high unemployment equilibrium was "caused by" or "revealed by" the deflation of 1929-1933.

If you follow Milton Friedman, and subscribe to the "caused by" deflationary Fed policy, then you find various counterfactuals plausible, including some combination of classical wage and price depression with expansionary fiscal and monetary policy. If only FDR had not promoted unionization and rising industrial wages, the magic of the market would have led to the ideal, full-employment market equilibrium of our (innumerate) imaginations.

The alternative, and historically better supported view, is that Fed policy, though not guided by the brightest bulbs, was largely carried passively along by the working of deeper forces, rooted in problems of the real, not the financial, economy. The deflation of 1929-1933 "revealed" severe problems in the structure of the economy, particularly in rural, agricultural America, problems that Keynesian policy, even in all its glory, could not cure.

For people holding this alternative view, the list of important New Deal programs is considerably longer, and includes, for example, the Tennessee Valley Authority. The efforts to use work relief programs to build roads and dams and to extend electrification were not "make-work". The infrastructure mattered. And, in the center of it all, were agricultural programs, including the price-support programs, which made the necessary out-migration of resources from agriculture possible in an orderly way, that also permitted the investments necessary to give us vast increases in agricultural productivity.

If you see the massive unemployment of the 1930's in the context of the problem of managing a huge migration out of agriculture, you see it quite differently, then if you think it is all just a fairly "technical problem" of Keynesian management of aggregate demand, as Krugman might say. And, if you do see the problem of agriculture, you also see that that problem was already apparent and severe in 1925. NBER dates three contractions in the 1920's, before 1929, and growth over the whole decade was actually quite modest. You see, in the 1920's, an economy becoming increasingly volatile, gyrating repeatedly from wild boom to complete bust, and you wonder what was driving that increasing volatility. One answer (not the only one, but in magnitude, a primary answer) is the increasingly severe agricultural depression of the 1920's.

The volatility of the 1920's economy, in the context of an extreme distribution of wealth, encouraged a lot of predatory financial practices. The was also made unmistakeable in the deflation of 1929-1933, when almost everyone with a mortgage was threatened with the loss of his home, and everyone, who bought stocks on margin lost everything, and everyone, who lost a job, lost everything.

Insurance is the great divider in economics. Economics, as a non-partisan scientific doctrine, makes absolutely clear that insurance, and lots of it, is absolutely necessary to the efficient functioning of an economy.

Conservative economists are generally opposed to government-provision of insurance, because it interferes with the ability of the wealthy to exploit the poor, just as conservative economists generally minimize the need to have government remedy externalities, for the same reason. So, if you look the blue skies over Los Angeles this morning, and compare it to shrouded Houston, and you think, Houston is so much more the beautiful, livable city, chances are you also look back at the New Deal and the Great Depression, and see rising industrial wages, and the construction of a highly regulated financial sector, and you think, "damn, it will take decades to destroy unions and invent credit cards with 33% interest; the horror!"

[a]

"But it's flat-out wrong to suggest--as the post I cite does--that stagflation somehow discredited the basic Keynesian notion that monetary and fiscal stimulus in time of economic downturn can help."

I'd certainly agree with that.

Simplistically, Keynesian theory says that, by borrowing money, the government can tide over bad times. And then, in theory, when times are good, it's supposed to pay back some if not most or all of this money. Unfortunately, while it's easy to borrow, it's not so easy to pay back (even Clinton's so-called surplus was really a deficit which became a surplus only by counting Social Security). And so the practical effect of Keynesian theory is that the U.S. government has sunk into more and more debt. So, the best that can be said for Keynesian theory is what is often said about Marxism: it's great in theory, but it's never been put into practice.

[Bruce Wilder]

Give us all a break, a.

Keynesian economics has been the practice for 50 years, and, mostly, to excellent effect.

That Republicans, beginning with Nixon, discovered the joys of being irresponsible liars, should discredit Republicanism, not Keynesianism. Try to pay attention. And, don't use the passive voice so much.

[Cynthia]

It's crazy enough for "barbarous relics" to crawl out of the woodwork claiming that the economy would be in much better shape today had we just stuck to gold, but it's totally insane for wing-nut barbarians to suggest that Keynes was an evildoer out to end capitalism as we know it!

[a]

"Keynesian economics has been the practice for 50 years..."

The borrowing part, certainly. When has it been the practice to pay the money back? Or is only the borrowing part an intrinsic part of Keynesianism and the paying back part is sort of wishful thinking?

[Bruce Wilder]

dday at Hullabaloo: "The worst thing the conservative movement has foisted on the country is a collapse of historical memory. Our civic education here is not so robust, and our civic knowledge of history is worse. This has given wide latitude for conservatives to create their own reality, and jabber away with 'facts' that consist of shibboleths and catch phrases, which by now have been ripped of all meaning outside the Manichean 'good' and 'bad.'"

The Editors on Kevin James (on Hardball): "It’s all like this. Everything is just like this. Some blank young person who has memorized a 5″x7″ index card of focus group-approved phrases, yelling, yelling, yelling over everyone. And you can say what you want, and be as right as you want, but he’s going to keep yelling, and yelling, and yelling until you get sick of it, and at the end of the day everybody knows that Barack Obama goes to secret Muslim church. Everything is like this. An election won’t fix it. This rules the world."

[kthomas]

dday, is right, but only to a degree. Fools love a fool. And when memory gets in the way of agenda, any fool will quickly forget.

[Bruce Wilder]

a: "When has it been the practice to pay the money back?"

When responsible Democrats have been in the White House. Lyndon Johnson and Bill Clinton have been the only Presidents since Eisenhower to actually have a fiscal year in surplus.

But, just for the record, a sensible Keynesian policy for a growing economy would average out with the government borrowing on net. As this U.S. National Debt Graph shows, the U.S. national debt was declining nicely as a percentage of Gross Domestic Product, until Reagan came along.

Blaming Keynes for Reagan's bad policy is like saying that George W. Bush has proved the libertarian case that government is necessarily incompetent.

[2slugbaits]

Bruce Wilder,

I agree that the 1920s were kind of shakey with several boom/bust cycles. I've always attributed that to the economic, physical and psychological aftershocks of WWI along with some bad luck (Spanish flu, bad weather) coupled with incompetent GOP political leadership (Harding & Coolidge). It's important to keep in mind that the Depression wasn't just a US phenomenon, but was worldwide. That's one reason that I've never found some of the US focused explanations for the Depression a bit unsatisfactory. But by 1933 the economy was at least well on the way towards mending and the worst was behind. I think it's fair to blame FDR for flirting with trying to balance the budget, which plausibly led to the 1937-38 recession. It was only after FDR adopted explicitly and consciously Keynesian policies that things in 1938 started to turn around.

[a]

"Bill Clinton have been the only Presidents since Eisenhower to actually have a fiscal year in surplus." Don't know about E. offhand but Clinton didn't run a surplus - you'd have to count the Social Security budget to make it a surplus; and that doesn't count (or are you a closet Bushie who thinks that all the surpluses that Social Security ran and runs aren't supposed to be set aside for the days when SS runs a deficit?).

"Blaming Keynes for Reagan's bad policy..." Yeah yeah, and blaming Marx for Stalin's bad policy... Like I said, theory and practice.

[anne]

"But by 1933 the economy was at least well on the way towards mending and the worst was behind."

An astounding comment, but, what the heck history, is obviously irrelevant.

[anne]

Good grief, the absurdity on absurdity. There was both a declining government budget deficit and a budget surplus during the Presidency of Bill Clinton. The surplus was large enough and structural in nature so that the projection in 2000 was for the national debt to be paid in this decade.

The Social Security counts and does not counts and counts after a double martini is of course absurd. There was indeed a budget surplus, and the Clinton economy was superb.

Correcting above, on the worst being over in 1933:

An astounding comment, but, what the heck, history is obviously irrelevant.

[anne]

http://delong.typepad.com/sdj/2008/05/barack-obama-an.html

Don Pedro, by the way, was last found explaining why Colombians really needed and wanted an American trade agreement with no mention necessary of the persecution of union activists in Colombia that has made the country more dangerous for union activists than all the rest of Latin America together and then some. The hope was that Barack Obama would show us real economic policy after becoming President by favoring the trade agreement.

Me, I would hope Obama would be interested in using diplomacy to further protect the right of unionists before considering breaking a promise on Colombian trade policy.

[RW]

""Blaming Keynes for Reagan's bad policy..." Yeah yeah, and blaming Marx for Stalin's bad policy"

You've been sliding in and out of incoherency and ahistoricism but this is simply nonesense: Reagan was not attempting to implement Keynes, he was attempting to implement his own brand of supply-sidism, and Stalin was not attempting to implement Marx, he was implementing his own brand of Leninism: Both were just doing what all too many leaders (and their followers frankly) tend to do -- finding reasons to do what they wanted to do in the first place.

Watching you attempt to tie labels of things Americans don't think they like to things that you would like to see Americans add to things they don't like would be more entertaining if you were better at it but given the approach you are taking so far you might as well argue that "the best that can be said for Libertarian theory is what is often said about Capitalism: it's great in theory, but it's never been put into practice" and call it a day. It would make about the same degree of sense but with a beneficial appearance of self-deprecation or even a laudable capacity for irony.

[anne]

http://economistsview.typepad.com/economistsview/2007/01/the_new_deal_an.html

January 10, 2007

The New Deal and the Great Depression

Rates of Unemployment

1929 -- 3.2%
1930 -- 8.7%
1931 -- 15.9%
1932 -- 23.6%
1933 -- 24.9% (20.9%)
1934 -- 21.7% (16.2%)
1935 -- 20.1% (14.4%)
1936 -- 16.9% (10.0%)
1937 -- 14.3% ( 9.2%)
1938 -- 19.0% (12.5%)
1939 -- 17.2% (11.3%)
1940 -- 14.6%
1941 -- 9.9%

Numbers in brackets correct for employment in New Deal programs.

Thomas M. Geraghty
University of North Carolina

[Among the tricks used in distorting the effects of New Deal policy in the Depression is the distortion of the unemployment rate so that workers employed in New Deal programs are nonetheless counted as unemployed.]

[anne]

http://newdeal.feri.org/misc/keynes2.htm

December 16, 1933

18, Norham Gardens
Oxford, England

In response to the New York Times' request for his views on the American outlook, Keynes has written "An Open Letter to President Roosevelt," which is scheduled to appear in the Sunday issue of December 31st and is to be syndicated in other parts of the United States.

So that you may see what he has to say before it is published, Keynes this morning sent me the enclosed copy of his article, which I hasten to get off directly to you through Miss LeHand (without forwarding it through the pouch) in the hope that it may catch the Bremen, which leaves tonight.

Yesterday's Times carried illuminating extracts from Wallace's Annual Report. What a good Secretary of Agriculture you have!

With warm regards,

Faithfully yours,

Felix Frankfurter

Hon. Franklin D. Roosevelt
Enc.

[anne]

http://newdeal.feri.org/misc/keynes2.htm

December 16, 1933

An Open Letter to President Roosevelt

Dear Mr. President,

You have made yourself the Trustee for those in every country who seek to mend the evils of our condition by reasoned experiment within the framework of the existing social system. If you fail, rational change will be gravely prejudiced throughout the world, leaving orthodoxy and revolution to fight it out. But if you succeed, new and bolder methods will be tried everywhere, and we may date the first chapter of a new economic era from your accession to office. This is a sufficient reason why I should venture to lay my reflections before you, though under the disadvantages of distance and partial knowledge.

At the moment your sympathisers in England are nervous and sometimes despondent. We wonder whether the order of different urgencies is rightly understood, whether there is a confusion of aim, and whether some of the advice you get is not crack-brained and queer. If we are disconcerted when we defend you, this may be partly due to the influence of our environment in London. For almost everyone here has a wildly distorted view of what is happening in the United States. The average City man believes that you are engaged on a hare-brained expedition in face of competent advice, that the best hope lies in your ridding yourself of your present advisers to return to the old ways, and that otherwise the United States is heading for some ghastly breakdown. That is what they say they smell. There is a recrudescence of wise head-waging by those who believe that the nose is a nobler organ than the brain. London is convinced that we only have to sit back and wait, in order to see what we shall see. May I crave your attention, whilst I put my own view?

You are engaged on a double task, Recovery and Reform;--recovery from the slump and the passage of those business and social reforms which are long overdue. For the first, speed and quick results are essential. The second may be urgent too; but haste will be injurious, and wisdom of long-range purpose is more necessary than immediate achievement. It will be through raising high the prestige of your administration by success in short-range Recovery, that you will have the driving force to accomplish long-range Reform. On the other hand, even wise and necessary Reform may, in some respects, impede and complicate Recovery. For it will upset the confidence of the business world and weaken their existing motives to action, before you have had time to put other motives in their place. It may over-task your bureaucratic machine, which the traditional individualism of the United States and the old "spoils system" have left none too strong. And it will confuse the thought and aim of yourself and your administration by giving you too much to think about all at once....

[Icarus]

I'm not sure a statement such as "Keynesianism has been in place for 50 years" is any more relevant than saying "NeoLiberalism has been in place for 40 years"...(at least since Chile, Thatcher/Reagan)

There are strains of many economic theories in any policy, or policy regime. Even some of what Marx has written about relates to policy in western capitalist nations today. It does no good to call it "marxist", as it becomes more of a dismissal of debate than anything else (ie, "you're a marxist!!")

Our tax policy before 1970 or so involved 90% tax rates on the highest bracket. That's not happening again. Capital would simply flee if we tried that (thank god). The state (or society) does not deserve 90% of anyone's income...that's just confiscatory.

We need a state with smalled expenditures, and a work/life ethic which requires people to pay for their lives themselves. No illegal wars, no soup kitchens in school cafeterias, no free healthcare for anyone. Pay for your life...

[anne]

Interestingly enough the country that looked most directly to Keynesian policy during the Depression years was Sweden, though I do not know why and need to find out whether the Myrdal's were responsible. Sweden was the country to recover most quickly and completely.

Roosevelt became President in March 1933, and from then there was a flurry of experimental economic policy that worked in part quickly in alleviating problem on problem, but the country was in serious shape as problems had been developing through the 1920s. The 1920s were notably difficult times for farm families, and farm families were a far greater portion of the population. Roosevelt recognized this and spoke to this before the election and always focused on farm needs as President.

[anne]

"No soup kitchens in school cafeterias...."

We must be sure, completely sure, to rid ourselves of school soup kitchens. After all, you can imagine what hungry kids are like after, well, a bowl of soup.

"No soup for you!"

[anne]

Looking to unemployment during the 1920s, the rate masks the steadily growing problems for farmers who are employed but ever more pressed economically. Land prices in farm communities fell through the 1920s.

[kthomas]

anne is right, Sen. Obama has not been as detailed and forthcoming about his economic plan for the nation. Bits here, there, but largely mum. Time for some specs, Senator.

[evagrius]

"Pay for your life..."

Does this begin at birth or, when reaching adulthood, you're given a bill?

[anne]

Another point to remember, and that I need to look to data on, is that the recession turned Depression in agriculture and following environmental dislocations led to important movements of farm families through the 1930s. The portion of farm families in the population fell significantly, but what this meant for unemployment measures from 1933 on I do not know. I would guess the farm migration significantly increased unemployment till the draft years. (This is more Steinbeck and Agee than knowing though.)

[Lafayette]

anne: What I'm missing is, what is the Obama economic policy?

Thank you for the most sensible question in this thread. And, no answer to be seen.

'Twas as I thought ... BO's economic policy is soooooo subtle, must contain the word "change", and is simply unpronounceable until after election day.

We are supposed simply to ... uh, believe.

PS: And BO is unlikely to be challenged in debate by McBush on economic policy. John wouldn't know one if it bit him in the nose. Which is just the way the Repubs seem to like their presidents.

[Lafayette]

anne: We must be sure, completely sure, to rid ourselves of school soup kitchens.

Give it up. It's just feeding the trolls.

Been there, done that, useless enterprise.

[Bruce Wilder]

Lafayette: "no answer to be seen"

It is not quite that bad. Obama has a website and a position papers and all that, and it is more than the incoherent wishful thinking of McCain (who "foresees" "victory in Iraq" by 2013). But, I'll grant you, not a whole lot more. And, it doesn't have to be.

Bush has promoted torture, political and business corruption, perpetual and pointless war, and national bankruptcy through non-taxation of Capital. McCain, to get the Republican nomination has endorsed all of those Bush policies.

The only choices on the political Menu are Change and McBush.

Lots of things in Life come down to binary choices like this one. You should be used to it, by now. This is not even a hard one.

That said, Lafayette may have a point. Let me illustrate.

Don Pedro: "Yes, [Obama] does want to modernize financial regulation, as do both McCain and Bush."

Obviously, the definition of "modernize" would be relevant. McBush, obviously, wants to make the financial world safe for 33% credit card interest rates, payday lenders and the next round of confiscation by the wealthy few from ever-poorer many.

Don Pedro wants to assure us that the miniscule benefits of imposing the idiotic American IP regime on Columbia are well worth tolerating a modest murder rate among union activists.

If Don Pedro (and Brad DeLong's evil twin) are on Obama's side, one has to wonder, whose side Obama is on?

In an election, every vote counts the same, and Don Pedro's vote is as good as mine, and Job #1 is 50.1%. The Day After? Well, let us pray.

[anne]

Thank you, agreed, Lafayette.

[anne]

Bruce Wilder:

"The Day After? Well, let us pray."

That's funny.

[a]

"Good grief, the absurdity on absurdity. There was both a declining government budget deficit and a budget surplus during the Presidency of Bill Clinton."
If you don't count Social Security, there was no budget surplus during the Presidency of Bill Clinton. Do you deny this?

'You [meaning me] 've been sliding in and out of incoherency and ahistoricism but this is simply nonesense: Reagan was not attempting to implement Keynes..." Well actually it wasn't I who said that Reagan was attempting to implement Keynes; that was Bruce Wilder who made the claim. In my comment I was going to point out that this was false, i.e. that Reagan at least wasn't *trying* to implement Keynes, but I didn't need to do so to make my point - which is that claiming Keynes was not responsible for the actions that were based on his theories, is just like claiming that Marx was not responsible for Stalin. I'm not making a claim that either is true or false, just that this is a "just like". Sure people say that Marx was wrong about human behaviour (greed rules!), but then the same thing could be said about Keynes (people prefer to borrow without ever repaying).

[howard]

a, you've now repeated the same falsehood a number of times: the last clinton year was, in fact, a general fund surplus and al gore was committed to following through on that path. try to look your facts up before you repeat falsehoods.

icarus, no one took 90% of anyone's income: 90% was the marginal rate, not the total rate. and regardless of whether it will ever happen again, the historic record demonstrates that a 90% marginal rate did not - i repeat not - deter significant economic growth.

anne, as you probably know from other postings, i happen to think that obama has a big upside but also a big downside, and the basis for the big downside is that he's running not on policy but on biography and an adult sensibility, which sounds nice until he tries to get something (and, like you, i have no idea what that something is) done. the name jimmy carter sometimes comes to mind....

[Icarus]

Lafayette...

By feeding the trolls, do you mean debating any argument besides take from the wealthy, and give to the poor?

Is there more to your opinions than wealth redistribution rants? It's a form or begging, i'd say.

[Icarus]

I don't think we're electing Obama on a prescribed set of policies. Instead, we're really just trusting the integrity of the man. He has made some comments on his desire to change economic policiy (like increasing capital gains tax rates)...but, he couches it in a 'let's see' attitude...as if he's going to look at it in due time.

That said...the odds of a candidate winning, who openly declares he will raise taxes, is a long shot. No one has succeeded (from what I've read) in 90 years or so. Raising taxes (admitting it) is a recipe for a loss.

[anne]

Howard:

"As you probably know from other postings, I happen to think that obama has a big upside but also a big downside, and the basis for the big downside is that he's running not on policy but on biography and an adult sensibility, which sounds nice until he tries to get something...."

A:

"If you don't count Social Security, there was no budget surplus during the Presidency of Bill Clinton. Do you deny this?"

Fine, but this was quite enough.

[James Killus]

Since Bruce Wilder has done all the heavy lifting, I'm only left to wonder if our Mr. A is a Steve Ditko fan.

Well, I'm also wondering how the Bush tax rebate plan compares to Jimmy Carter's tax rebate plan, after inflation adjustment, and whether or not the current oil shock compares to that of the 1970s. Either way, stagflation would seem to be in our future, except that there are those of us who consider it to be in our present.

says...

anne,

I think the unemployment numbers you posted pretty much made may case. Thanks. Clearly the Depression peaked in 1933 and was improving after that up until 1937. That's probably why NBER shows the economy in recovery beginning in March 1933.

[2slugbaits]

Post above was mine.

[Don Pedro]

Re: Colombian Free Trade Agreement, whose side am I on?

Not to be too grandiose about it, but I'm on the side of the Colombian people. In a poll last February, it was favored by Colombians 57-33.

http://econ4obama.blogspot.com/2008/02/trade-and-public-opinion-in-colombia.html

Re: the suggestion that Obama doesn't have any detail in his economic policy, this is ridiculous. How much effort does it go to his website, where there's tons of detail in the policy pages and in the multiple speeches on economy policy? See for example our post here with a link to his main policy document:
http://econ4obama.blogspot.com/2008/02/details-details.html

If you have questions on specific aspects of his policy positions that you can't find on the website (I seriously doubt this!), let us know, and we will investigate. You can write us at econ4obama@gmail.com

[2slugbaits]

don pedro,

First, I was an early Obama supporter. My wife even hosted a cake-and-coffee thing for Michelle last year. But....I have to say that I do not understand his policy on free trade. I thought I did up until some of the debates when the anti-NAFTA stuff got hot and heavy. Obama and Hillary Clinton seemed to want to outdo each other as protectionists.

[anne]

http://www.epi.org/printer.cfm?id=2902&content_type=1&nice_name=webfeatures_snapshots_20080226

February 26, 2008

Murders of Trade Unionists Go Unpunished in Colombia
By Tony Avirgan

Colombia is the most dangerous country in the world for trade unionists. Over the past 21 years, more than 2,534 unionists have been assassinated.1

President Alvaro Uribe was elected in 2002 and again in 2006 promising a crackdown on violence. His policies have resulted in a decrease in guerrilla violence, but there has been an increase in extrajudicial executions perpetrated by right-wing death squads and security forces.2 Assassinations of trade unionists have decreased, but so have prosecutions of the assassins. For the past two years, none of the killers of trade unionists has been brought to trial in Colombia.

[Chart]

Now, despite public outcry over these appalling human rights abuses and the firm opposition of U.S. and Colombian unions, the Bush administration is seeking to reward Uribe with a free-trade agreement.

Notes

1. The Escuela Nacional Sindical has documented 2,534 assassinations but says there are surely more that have not been reported.

2. Washington Office on Latin America (WOLA) news release, October 18, 2007.

[anne]

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/29/AR2008032901118_pf.html

March 30, 2008

Colombian Troops Kill Farmers, Pass Off Bodies as Rebels'
By Juan Forero - Washington Post

SAN FRANCISCO, Colombia -- All Cruz Elena González saw when the soldiers came past her house was a corpse, wrapped in a tarp and strapped to a mule. A guerrilla killed in combat, soldiers muttered, as they trudged past her meek home in this town in northwestern Colombia.

She soon learned that the body belonged to her 16-year-old son, Robeiro Valencia, and that soldiers had classified him as a guerrilla killed in combat, a claim later discredited by the local government human rights ombudsman. "Imagine what I felt when my other son told me it was Robeiro," González said in recounting the August killing. "He was my boy."

Funded in part by the Bush administration, a six-year military offensive has helped the government here wrest back territory once controlled by guerrillas and kill hundreds of rebels in recent months, including two top commanders of the Revolutionary Armed Forces of Colombia, or FARC.

But under intense pressure from Colombian military commanders to register combat kills, the army has in recent years also increasingly been killing poor farmers and passing them off as rebels slain in combat, government officials and human rights groups say. The tactic has touched off a fierce debate in the Defense Ministry between tradition-bound generals who favor an aggressive campaign that centers on body counts and reformers who say the army needs to develop other yardsticks to measure battlefield success.

The killings, carried out by combat units under the orders of regional commanders, have always been a problem in the shadowy, 44-year-old conflict here -- one that pits the army against a peasant-based rebel movement.

But with the recent demobilization of thousands of paramilitary fighters, many of whom operated death squads to wipe out rebels, army killings of civilians have grown markedly since 2004, according to rights groups, U.N. investigators and the government's internal affairs agency. The spike has come during a military buildup that has seen the armed forces nearly double to 270,000 members in the last six years, becoming the second-largest military in Latin America.

There are varying accounts on the number of registered extrajudicial killings, as the civilian deaths are called. But a report by a coalition of 187 human rights groups said there are allegations that between mid-2002 and mid-2007, 955 civilians were killed and classified as guerrillas fallen in combat -- a 65 percent increase over the previous five years, when 577 civilians were reported killed by troops.

"We used to see this as isolated, as a military patrol that lost control," said Bayron Gongora of the Judicial Freedom Corp., a Medellin lawyers group representing the families of 110 people killed in murky circumstances. "But what we're now seeing is systematic."

The victims are the marginalized in Colombia's highly stratified society. Most, like Robeiro Valencia, are subsistence farmers. Others are poor Colombians kidnapped off the streets of bustling Medellin, the capital of this state, Antioquia, which has registered the most killings.

Amparo Bermudez Dávila said her son, Diego Castañeda, 27, disappeared from Medellin in January 2006. Two months later, authorities called to say he had been killed, another battlefield death. They showed her a photograph of his body, dressed in camouflage.

"I said, 'Guerrilla?' " she recalled. "My son was not a guerrilla. And they told me if I didn't think he was a guerrilla, then I should file a complaint."

Military prosecutors ordinarily initiate investigations when the army kills someone. In cases that appear criminal, civilian prosecutors take over, as they did in the slayings of Valencia and Castañeda in San Francisco. But human rights groups and government prosecutors say the initial probes have usually been perfunctory, and investigators have been under intense pressure from high-ranking military officers to rule in the army's favor.

Such challenges have made tabulating the exact number of dead civilians impossible, though officials at the attorney general's office and the inspector general's office revealed recent estimates in interviews.

The attorney general's office is investigating 525 killings of civilians, all but a handful of which occurred since 2002 and in which 706 soldiers and officers are implicated. The office has another 500 cases, involving hundreds more victims, yet to be opened. The inspector general's office, meanwhile, is investigating 650 cases from 2003 to mid-2007 that could involve as many as 1,000 victims, said Carlos Arturo Gomez, the vice inspector general.

"Last year, the number of complaints shot up," Gomez said. "Some have said the cause could be unscrupulous military members who want to show results from false operations. Others say it's the product of pressure from the high command, the push for results." ...

[anne]

Must I continue?

[Don Pedro]

I don't contest any of those figures.

My case for the free trade agreement boils down to the following question:

Is the free trade agreement favored by the large majority of people in Colombia?

The answer to this question is unequivocally yes.

[howard]

donpedro, at the risk of oversimplifying, the question about obama and economic (and many other) policy questions isn't whether on his website can you find detail: the question is where's the headline? the slogan? the investment in political capital?

people have hoped that obama would be a democratic reagan, but really, everyone knew what reagan stood for: lower taxes, higher defense spending, less discretionary domestic spending, a hardler line internationally, right-wing judges.

can you tell me obama's equivalents? what are his day one priorities, that's where the question comes in, not whether he's got advisers with detailed plans....

[BJ Feng]

"Re: the suggestion that Obama doesn't have any detail in his economic policy, this is ridiculous. How much effort does it go to his website, where there's tons of detail in the policy pages and in the multiple speeches on economy policy?"

While a 64 page document sounds comprehensive, when I started reading it, I quickly came to the realization that this is a 64 page manifesto by Barack Obama and almost completely devoid of anything other than platitudes. I suspect Barack understands that he can point to the 64 page document if people ask him about details, knowing that most won't bother reading it, but will trust that there will be something of substance in 64 pages. They are wrong, this is Barack Obama, a man who could and does speak for hours without actually saying how he would accomplish all the good he intends. Below are just some examples from his 64 page "detailed" explanation.

"Restore Fiscal Discipline in Congress
Obama will reinstate pay-as-you-go (PAYGO) budget rules, so that new spending or tax cuts are paid for by
spending cuts or new revenue elsewhere.

Cut Pork Barrel Spending
Obama will cut skyrocketing pork barrel spending projects by forcing more transparency about who is
requesting projects and what the projects would accomplish before Congress votes to approve them.

Cut Down on Tax Haven and Tax Shelter Abuse
Obama will build on his bipartisan work to penalize companies that abuse the tax code and stop the use of
tax havens.

Repeal Bush Tax Cuts for the Wealthy
Obama is committed to repealing the Bush tax cuts for the wealthiest Americans."

Boy that's some detail there. Penalize companies that abuse the tax code, now how can anyone be against that idea? And cut pork barrel spending by forcing more transparency, wow, what a powerful idea. No mention that Obama himself earmarked billions of dollars as Senator while John McCain, true to his pledge (a pledge Obama refuses to make) earmarked $0.

Oh, wait, that part above was just the outline, the "At a glance" part of his policies. Silly of me, surely the detail is coming.

"Cut Pork Barrel Spending: Obama introduced and passed bipartisan legislation that would require
more disclosure and transparency for special-interest earmarks. Obama believes that spending that cannot
withstand public scrutiny cannot be justified. Obama will slash earmarks to no greater than what they were
in 2001 and ensure all spending decisions are open to the public.

Make Government Spending More Accountable and Efficient: Obama will ensure that federal contracts
over $25,000 are competitively bid. Obama will also increase the efficiency of government programs
through better use of technology, stronger management that demands accountability and by leveraging the
government’s high-volume purchasing power to get lower prices.

End Wasteful Government Spending: Obama will stop funding wasteful, obsolete federal government
programs that make no financial sense. Obama has called for an end to subsidies for oil and gas companies
that are enjoying record profits, as well as the elimination of subsidies to the private student loan industry
which has repeatedly used unethical business practices. Obama will also tackle wasteful spending in the
Medicare program."

Uhh, I guess for Obama, that's what detail means. Cut obsolete federal government programs that make no financial sense. Again, who could be against that? But care to name one such program Senator Obama? No, that's not how he operates, that's TOO much detail.

And I'm glad that he would "tackle wasteful spending in the Medicare program". Now I know for sure he has a solid plan and we can trust the government to run a national health care system. Thanks for the details Obama!!

[Lafayette]

Changettes

BJ: Cut obsolete federal government programs that make no financial sense.

Thanks for the "detail". I see not much there of any real significance. There is no increase of general levels of taxation, just evisceration of the Bush tax cuts.

Finagling with the budget, in terms of Pork Barrel projects, will NOT produce radical changes from the past. These mentioned are simply "changettes".

Cutting defense to spend it elsewhere IS a meaningful change in direction, which is what I suspect he would do. But, he can't say that either. Bill didn't (I don't think) and neither will BO -- but that is where he will start, which is what Bill did.

We've got to get beyond this cultural barb regarding Taxation. Americans think that increased taxes take precious money away from their pockets. Well, that's true -- but they seem ignorant of the fact that such is done for other more generalized purposes, which return to them much needed services.

Such as affordable Health Care and a tuition-free tertiary Education for their children. That's the trade-off: The latest gadget for your kids or forced savings for their college education.

What would you chose? The latest version of the i-Phone for you kids so they could "shock and awe" their friends? That is is EXACTLY sort of idiocy that a Consumerist Society produces, imho. Consumerism is a curable addiction.

It is the repeated dependence upon self-indulgence in the immediate benefit, whilst forsaking the long-term larger benefit value. Enjoy the pleasure while it lasts, because that is the sure road to perdition, both in terms of Health Care and Education.

[Icarus]

Lafayette...

I think we do agree where the issue is...we just may have different directions we'd steer things.

Yes, the US is a Consumerist society, which makes a politico-philosophical gesture. It essentially says, we'll ('we' being the state, in the name of the 'people') tax you a bit less (than a social democracy), and hence put more money in your hands (the 'you' being the mythical citizen). You must take that money, and make the decisions which enhance your life, for we believe that you can decide where your dollars should go, better than we can.

In that spirit, you should secure your own healthcare, buy what you want from whichever store, and invest/give to charity that which you can or want.

As our Walmarts have trouble keeping chinese trinkets on the shelf during Xmas, people complain of not being able to afford basic life. Something doesn't make sense to some of us market-sluts.
Color TV's in ghettos, toys and video games in every household, but...we need schools to pay for lunches. Something is wrong, in the market-slut mentality, when people have money to buy unnecessary consumer goods, and yet complain they can't afford community college fees.

This is a dystopic 'freedom', no doubt. Perhaps we could shape a slightly alternative society where the state takes 5 more percent of our income, and pay for certain important goods/services for everyone (5, or 10, or 15...just depends on how large you want the state to be).

But, we choose an alternative. And, the globe perhaps needs alternative models to your mythical France. Last I heard, France was still a recovering colonial power, still troubled by tense race and class relations. As I watched cars destroyed on the streets of paris (on tv), I didn't sense the glee you all seem to assume.

That said...the US is a harsh place. You must work and pay for healthcare, by and large. You must pay for your own food, energy, and shelter. And if you can't, you're at the mercy of your family, which, is on you to maintain relations with.

If you can't play by these rules, we tend to dismiss you. Other entrants seem to be willing and eager to take that chance. When the affluent in US society see new entrants taking advantage of the capitalist social property relations, and end up building a life for their family, and ensuing generations, they are further estranged from the problems of the impoverished.

Katrina is a great example. I really don't think people in the US really cared about the impoverished in New Orleans, once the awe of watching TV subsided. They were entertainment, as is the war (or invasion) of Iraq. The US is a consumerist society in the most vulgar way, no doubt...

And asking the impoverished to rely on this changing is a faulty logic. The days of the 2nd international are over, Lafayette. We now live in a world of consumer glee. We're just starting. We may be able to extend the global supply chain into the lives of the bottom of the pyramid (to paraphrase CK Prahalad)...Imagine...

[Lafayette]

Ick: The days of the 2nd international are over, Lafayette. We now live in a world of consumer glee.

You and a rather large minority of backward Americans who can't seem to get over the fact that much of the world has caught up with America and its "Consumer glee". From here on out, it will start pulling ahead.

Your ilk still don't "get it". The fixation on capital accumulation and an inveterate obsession with low taxation isn't all that it's cracked out to be. In fact, both are a divergence from other, far more important societal values.

Most Americans in Europe once thought that the US standard of living was better than Europe. Evidence shows that that is no longer the case.

Despite the fact that Europe had reconstructed itself after the ravages of WW2, Europe still had to get its industry more competitive, like America's. It embarked upon doing so in the 1990s and will inevitably finish that transformation.

But America never got is Social Welfare as good as Europe's -- and, unless policies change drastically soon, it is not about to do so any time soon.

Why the difference between the two? Their very different sets of national priorities.

[anne]

Don Pedro:

"My case for the free trade agreement boils down to the following question:

"Is the free trade agreement favored by the large majority of people in Colombia?

"The answer to this question is unequivocally yes."

Fine, with meaningful union and farmer protection for Colombia.

[im1dc]

anne & 2slugsbaits both say that Obama's economic policy's and plans are vague, non-existent and or skewed by politics.

They are correct.

But they seem to forget that before Obama can have a policy he first must get elected in November.

Presidential election history has repeatedly taught us that only after being elected will the real policy, plans and reach of the next Administration become known or, frankly, crafted.

For example, could anyone have known what Bush43 would do based on his campaign promises in 2000 versus what he delivered post 9-11? He could not have been elected if he had told the Electorate his actual plans.

Please help Obama get elected and be the change agent America needs in our national polity.

[STS]

Bruce Wilder:

So, if you look the blue skies over Los Angeles this morning, and compare it to shrouded Houston, and you think, Houston is so much more the beautiful, livable city, chances are you also look back at the New Deal and the Great Depression, and see rising industrial wages, and the construction of a highly regulated financial sector, and you think, "damn, it will take decades to destroy unions and invent credit cards with 33% interest; the horror!"

Houston vs. LA is a great metaphor for the contemporary political fault line. One man's smog is another's progress.

[anne]

Im1dc,

"Presidential election history has repeatedly taught us that only after being elected will the real policy, plans and reach of the next Administration become known or, frankly, crafted."

I am completely sympathetic, and many would agree but I rather think Presidential policy has long been well understood before the election so I prefer to push on policy clarification. Especially, now, when significant change in policy will take much determination.

[anne]

We have a set of significant policy issues to push on; there will be no peace dividend for several years even if Barack Obama were to begin at once to leave Iraq, and the determination to leave still worries me. No peace dividend, as such, almost surely means there will be no health care insurance reform in 2009 since pay-as-you-go financing will not allow such reform in moving to broader health care coverage unless there is a general tax increase. There is however discussion of a middle class tax cut.

This is not coherent policy formation, and lack of such coherent policy formation means little should be expected.

[Bruce Wilder]

I'd like to see the Democratic Congressional campaigns show some committment on policy, more even than the Presidential candidates.

I have been much encouraged by A Responsible Plan to End the War in Iraq.

Of course, I think it would be good if Obama were pressured to say approving things about this plan, and to draw attention to it. But, the more Democratic Congressional candidates adopt it, especially along the long frontier of seats the Democrats are poised to gain, the more likely Congress will act confidently to support withdrawal.

The reality of governance is that the President Proposes and Congress Disposes. On policy, the trick is to get everyone reading from the same sheet music; the Conductor without the Orchestra can look good, but doesn't make music.

The Democratic majority in the Senate has to be 60 seats -- that's a far bridge, but not impossible in a year in which only one Democratic seat is subject to serious contest, and the estimated number of vulnerable Republican seats ranges from 5 to 17.

In the House, the Democrats have to have a majority plus 35, to overwhelm and neutralize the 17 or so nominally Democratic Representatives, out of 45 Blue Dogs, who are hopelessly corrupt Champions of the Plutocracy, and not to be trusted. Right now, the Dems have the advantage 236-199, and may be able to gain another 25 seats in November, so it looks good.

The more the Congressional campaign can be nationalized on Iraq, health care and profound economic reform, the more likely the country can use the new President and Congress to lurch forward rather dramatically.

[Icarus]

Lafayette...

Yes, I agree with you. But, I'd just use very different adjectives.

The US doesn't really want a welfare state as "good as Europe's". See, handing out money for sitting at home isn't exactly the ethos my "ilk" seem to want. It's a mal-incentive.
We have a very different consumerist mentality, and sadly for those of you still clinging to the 2nd international, it is spreading.
CocaCola and Fast Food in every corner, even in Paris.

The social welfare state is slowly breaking down in Europe as well, as it reflects a logic now dead (citizenship tethered to fixed nation state boundaries).

Lafayette, soon, I'd think you'll put down your Marx/Engels, and pick up something from this century.

[anne]

Joseph Stiglitz has shown as in the case of Britain, that leaving Iraq partially will entail no reduction in cost and may even lead to increased spending as in the case of Britain in maintaining a vastly expensive military infrastructure. So, the leaving of Iraq will be costly while staying even partially will be costly and possibly shocking so if staying means tens of thousands of soldiers.

[Lafayette]

Ic: The US doesn't really want a welfare state as "good as Europe's".

Perhaps. But, that is because most Americans don't even understand that such is possible. The History of Social Movement in America is practically non-existent. Even the unions have become lapdogs.

How many Europeans do you know in your neighborhood telling you that National Health Service (100% coverage of all costs for all residents) and a tuition-free tertiary Education are birthrights in Europe? And, maybe both would be a good idea for America as well?

Americans probably believe that what they've got is the "Greatest on Earth". What malarkey ... but they believe it. Look at all those poor and hungry trying to get in and partake of the American Dream.

What you don't know CAN hurt you.

[Icarus]

Lafayette...

The problem with your assertion below is that it has no room for difference.

Yes, in the US, healthcare and education are not complete 'birthrights'. Although we do educate K-12 for free, and have an extensive array of college choices, at all cost levels, ivy league schools are not 'free'. As well, we do cover the healthcare of a significant portion of our society, and are one of the pioneers in medical advancement, we don't tell you that healthcare is 'free'.

Given that, there's still a line out the door to get in. Why? If the US was such a demonic place, why is the demand to get, and live here so consistant, and so intense?

Well, somehow, through hegemoney, or good old imperialism (a chapter of your idealized france you'd probably like to forget), or, because of our capitalist property relations, many hard working, and aspiring people from the globe migrate here.

America is not the most intelligent place, overall. Our 'mediocre' students are actually dumb-asses. Most of the community college ilk aren't exactly mental giants. That they can get adequate work is the sign of a giving society.

If someone ends up at the Waffle House, peddling breakfasts, it's usually because they're immigrants, building a better life, slowly...or, becuase they're failures in a very easy educational system. Other than those groups, there's really no reason to work for a pittance.

And, we do have unions...our public workers are highly unionized, highly unefficient, and lazy.

[anne]

Im1dc

"Please help Obama get elected and be the change agent America needs in our national polity."

Fine, but change to what? What needs to be defined. Please define.

[Lafayette]

Uck: Well, somehow, through hegemoney, or good old imperialism (a chapter of your idealized france you'd probably like to forget), or, because of our capitalist property relations, many hard working, and aspiring people from the globe migrate here.

What claptrap. You should be writing the pamphlets that American embassies leave strewed about their lobbies.

Financial Greed is why bright people come to America, where the concept was patented.

[Icarus]

Financial Greed? Nice...that really captures it. The mexican immigrant, walking through the hot desert...the Indian student, competing with the hordes for the few H1b slots...the vietnamese who've made a life in the US...

yah, all "financial greed".

Jeez...Lafayette...do you subscribe to pure socialism, or even further left? Fourier? Marx? What? Should we disband with urban communities? Should we disband with agriculture (Gatherer-Hunters were more 'equal')?

[dale]

"Most of the community college ilk aren't exactly mental giants." "our public workers are highly unionized, highly unefficient, and lazy."

Sigh! Some comments are just so depressing to read.

[Icarus]

Dale,

We have a management consulting company called Bearing Point which specializes in govt work, as well as the utilities. If you've known anyone who's worked for them, you can collect countless stories about waste and inefficiencies.

Without the profit motive, and with unions protecting jobs, the ability to fire poor workers is difficult. People work as little as they have to...and, a culture of laziness (at least in business terms) evolves.

In India, we used to call this the Licnense Raj, and it lead to poor growth rates, state based inefficiencies in most industries, and a lagging standard of living.

There is a place for private enterprise. In all of our redistributionist rants on this blog, let us not forget that our collective standard of living in the West has come from our capacity to specialize, organzize and manage, and embrace the market. Sure, to do that, we needed a social/political/legal infrastructure (ie, the 'market' can't create everything)...but, given that, we've seen standards of living arise which far surpass the imagination of our ancestors.

As for my comment on the US community college caste...what do you think? Have you ever sat in a community college course? It's utterly pathetic. These people will never compete globally (by and large).
The US has to face the fact that many of its 'middle class' benefited from a lack of competitioin after De-Colonization and WW2. This was a great head start, but, it's now over.

There will be a flattening...and the US middle classes are ripe for destruction. Anyone should be able to see it. They're the fat we'll have to trim.

I just watched a cooking show on BBQ in texas...and it's even obvious there. People eating too much meat, a recipe for cancer. People already obese in their 20s, a recipe for diabetes and arthritis and cardiovascular disease. People driving pick up trucks, a recipe for environmental degredation.
Everything that is "middle american culture" is a deathbed. It's no wonder that the rest of the world looks at the US and wonders how its people can be so dumb.

Now, I'm not saying all are dumb. The top 20 universities in the US are the world's best. The highly educated caste will survive, but, I suspect, will have links to other global elites, and slowly try and separate themselves away from their respective lower classes, playing one nation's working class against another's.

[Lafayette]

Prime Objective

Ic: The top 20 universities in the US are the world's best.

That assessment depends upon your criteria. Ask to see the criteria behind the University of Shanghai's international listing of universities.

First consequential fallacy: There is no or little link between university degree and aptitude at success in a personal career. Salary, for some mysterious reason, correlates better historically with the height of the individual than his/her university degree. (That is, up till, Investment Bankers hit their stride.)

Second, it is NOT the Prime Objective of universities to develop an intellectual elite, but a wide-based general competence amongst citizens (those who ultimately support the university, directly or indirectly). Its usage today has been, unfortunately, to generate an elite plutocracy.

[Lafayette]

Maureen's caustic wit strikes again.

Don't know where to put this link, so it goes here.

[BJ Feng]

"Second, it is NOT the Prime Objective of universities to develop an intellectual elite, but a wide-based general competence amongst citizens..."

Really? I thought that was the objective of high school. Why take 12 years of school if it won't provide a general level of competence? For those who want slightly more than general competence, there is the community college route, but universities exist to train and educate bright students so they can become elites--so that they can enter elite professions which require critical thinking and more than a general level of knowledge or competence.

[Lafayette]

Survival of the elitist

BJF: Really? I thought that was the objective of high school. Why take 12 years of school if it won't provide a general level of competence

General level of competence, yes. Elitism, no.

I have for years wondered why companies thought that high marks in school were correlated with management or professional capacity. They make neither good leaders nor good managers. Worst of all, they make for bad staff -- thinking every one about them just evolved from spit.

A far greater skill necessary is not leadership alone, but the binary talents of both leadership and followership, with a hefty content of inter-relational talents. In teamwork, all three are required.

And, most businesses depend upon good teamwork for success rather than any one brilliant individual. Particularly in our increasingly complex world where multiple talents are necessary to get the job done.

I have met soooooo many brilliant people who, like shooting stars, burn out quickly -- their passage hardly noticed. Megalomaniacs especially.

... so that they can enter elite professions which require critical thinking and more than a general level of knowledge or competence.

Oh, really? And you presume to be one such? Wow!

The problem with elitists is that they think they are elite. And, a dollop of success convinces them that it is a natural birthright -- and will always be thus so. Poor fools.

They wake up when reality finally knocks the sh*t out of them.

Such is life in a society where competition is a predominant value. Survival of the elitist. Who remembers who came in second? (Salve Caesar! Nos morituri te salutamus! ;^)

[Icarus]

If one does rise through competition, and obtains a highly desirable 'elite' job, paying 'elite' wages, then, are they not, dear lafayette, a member of the 'elites'?

Would you rather the elite imagine themselves as the 'everyman', as many of the left on this blog arrogantly do?

[Lafayette]

Ic: are they not, dear lafayette, a member of the 'elites'?

Quite possibly, but we are talking about educating people. Not individuals who think they are elite because they've had a bit of good luck and earned a great amount of money.

You persist in confusing the ability to earn money with genius or talent. The former does not necessarily require the latter.

I insist that both luck and talent are necessary to make fortunes. The two do not always coincide in the same person.

Many are called, but few are chosen.