"What Is The Predator State?"

James Galbraith initiates a discussion of his new book, The Predator State:

What Is The Predator State?, TPMCafe Book Club, by James K. Galbraith: ...There is a tendency, seen in Jonathan Chait's book The Big Con and Paul Krugman's Conscience of a Liberal ... to treat the conservative revolution of the 1980s as a ... con game ... put over on a gullible public by the paid agents of corporate and plutocratic power. There is of course something to this story, but I never felt that it was the whole truth. As I got to know the free-market, supply-side crowd,... I did think - and do think - that they held their views in good faith. They were, by and large, willing to argue the merits of their ideas. And they had behind them the authority of a vast academic establishment, ranging from Friedrich von Hayek to Milton Friedman to such contemporaries as Gary Becker and Robert Mundell - all just as nutty in my view. (For those who would be amused by it, my 1990 debate with Friedman on his TV show, "Free to Choose" can be found here. ) ...

Democrats ... abetted the triumph of the right. They mostly stopped arguing over theory. "The age of big government is over!" Bill Clinton declared. Liberals accepted the virtue of balanced budgets, of low tax rates, and of deregulation in many spheres, of leaving the fight against inflation solely in the hands of the Federal Reserve. In alliance with big business, Democratic presidents became aggressive advocates of what they called "free trade" - though it was really just the use of diplomacy for political payola. Democrats and liberals won some policy battles and some elections, and they presided over a prosperous moment. But they did it by selling themselves as Reagan-lite...

The judicial coup of December 2000 that installed Bush and Cheney brought back some of Reagan's men and his most extreme policies - tax cuts for the wealthy, big increases in military spending, aggressive deregulation. But it didn't bring back the ideas. Instead, it became clear that Bush and Cheney had no real ideas, no larger public justification. They cut taxes to enrich their supporters. ... They were willing to have the government spend like a drunken sailor in 2003/4 to boost the economy before the election. They placed lobbyists in charge of the regulators, representing, in every case, the most extreme anti-regulation perspective. ... Under Bush and Cheney, oil and gas, drug companies and defense contractors, insurers and usurers control the government of the United States, and it does what they want. This is the predator state.

It was very interesting to me that some of the first to sense this loss of public purpose were the very conservatives who had swept in with Reagan. The nemeses of my youth, people like Bruce Bartlett, Paul Craig Roberts, the late Jude Wanniski, went over into hard opposition. This was compounded by their opposition to Bush's assaults on civil liberties and the war in Iraq, but at the core they felt that Bush had no conservative convictions. ...

Of course, we have very different views of where to go from here. ... The Predator State ... is directed largely at liberals. And especially at those liberals who remain transfixed by the "logic" of markets, ... and by the idea that respectability requires continuous genuflection at the shrines of the Chicago School. ... The Predator State is aimed at the notion that the liberal formula should be "making markets work." ...

What's required? Three despised ideas need to be re-thought and re-spoken. The first is planning. Markets cannot foresee the future, only human imagination does that. Corporations, of course, do plan. The question is, can you trust all the planning that needs to be done to the "planning" department of ExxonMobil? No? Then government needs to get back into that game. The job is not for the faint-hearted: there is no perfect plan, and the first thing predators do, of course, is shoot the planners.

A second is standards. In a world where interest rates are set by the central bank and the oil price is set by the Saudis, there's nothing wrong with guidelines for fair wages and to protect the living standards of the working poor and the middle class. (We already have the minimum wage, after all: it's just not high enough.) Standards are needed not just in trade agreements, but at home can give a more fair society, and also a more efficient and successful one: you need to be efficient to pay fair wages. Firms, on the other hand, that cannot pay decent wages or meet environmental and safety codes should not be coddled. They should be phased out, and the jobs transferred, in effect, to more productive and efficient firms.

The third idea is interdependence - as a financial fact. America can no longer justify its huge debts and the world role of the dollar through the security leadership we once provided, when people needed it, back in the Cold War. As a substitute, the war on terror is a dud. And the go-it-alone mentality that got us into Iraq is even worse: a path to financial disaster.

We can't escape debt or deficits, and any attempt to do so by cutting government - the old conservative "solution" - would just lead to depression. So what's the way out? How can we reconcile the imperative public challenges that face us (in particular) on the environment and energy fronts with the political and social imperative that the economy grow and provide jobs and decent living standards? What we must do, is get to work. We should be doing what needs doing, to change our transport system, our patterns of energy use, and to create and spread the technologies that will bring climate change under control. No other country could do as much, as quickly, as we can. No other country can contribute as much, as we could, to solving these crises. And if we can persuade the world to fund us, we could keep Americans fully employed for a generation or more, in this work.

Comments

says...

Right on

[hari]

Open invitation to SWFs to take over American capital....

[Winslow R.]

James wrote: "The first is planning. Markets cannot foresee the future, only human imagination does that."

Of the 3 points, this is the last remaining point to be acknowledged if not championed by the 'liberal' economic profession. Acknowledge politicians have a job to perform, not to shirk the responsibility that comes with THEIR profession even if it does 'distort' the economist's precious market........hopefully in wonderful ways.

[donna]

One problem to me is corporations have free markets, employees do not. How can you change jobs when it means losing your health care, or losing coverage for a pre-existing condition?

We give corporations freedom to do as they please, but not individuals. This is what has to change.

Support individuals with national health care, a basic living wage, and then they have the ability to compete in the marketplace, moving freely and changing jobs as they need to. Until then, Republicans can scream free market all they want and I will laugh at them. The markets are not free; they favor the rich. And as one of the top five percenters now having MY wealth stolen by the top one percenters, I've become as resentful of it as anyone. Where is MY freedom to move my money? I'm stuck in 401 K plans that give me little choice.

No fair.

[Bruce Wilder]

JG: As I got to know the free-market, supply-side crowd,... I did think - and do think - that they held their views in good faith. . . .And they had behind them the authority of a vast academic establishment, . . . all just as nutty in my view.

JG: Liberals accepted the virtue of balanced budgets

JG: . . . "December 2000 that installed Bush and Cheney brought back some of Reagan's men and his most extreme policies - tax cuts for the wealthy, big increases in military spending, aggressive deregulation. But it didn't bring back the ideas. Instead, it became clear that Bush and Cheney had no real ideas, no larger public justification."

JG: "The third idea is interdependence - as a financial fact. America can no longer justify its huge debts and the world role of the dollar through the security leadership we once provided, when people needed it, back in the Cold War. As a substitute, the war on terror is a dud. And the go-it-alone mentality that got us into Iraq is even worse: a path to financial disaster.

"We can't escape debt or deficits . . ."

JG: "if we can persuade the world to fund us"

I was all ready to chow down on my favorite cuts of red meat -- the horrible corruption of the Cheney Administration, usury, drug prices, Abramoff -- but the underlying theme seems to be a rationalization for more borrowing abroad.

The U.S. needs a larger overseas national debt?

Huh?

It would be logical to argue for increasing the progressivity of the income tax, as a means of reducing the incentives for corporate executives to act like pirates, as well as to fund a higher level of infrastructure spending.

But, that's not what he says. He doesn't say, let's tax the big bucks out of the hands of overpaid CEOs and the extremely wealthy and spend on a better future. He says let's "plan" and borrow more money from Arabia and China. This seems like an exceedingly odd argument.

[Bruce Wilder]

JG: "There is a tendency, seen in Jonathan Chait's book The Big Con and Paul Krugman's Conscience of a Liberal ... to treat the conservative revolution of the 1980s as a ... con game ... put over on a gullible public by the paid agents of corporate and plutocratic power. There is of course something to this story, but I never felt that it was the whole truth. As I got to know the free-market, supply-side crowd,... I did think - and do think - that they held their views in good faith. They were, by and large, willing to argue the merits of their ideas. And they had behind them the authority of a vast academic establishment, ranging from Friedrich von Hayek to Milton Friedman to such contemporaries as Gary Becker and Robert Mundell - all just as nutty in my view."

JG: "Bruce Bartlett, Paul Craig Roberts, the late Jude Wanniski, went over into hard opposition."

This argument about the sincerity, the willingness of supply-siders to argue the merits of their arguments -- this is also exceedingly odd.

The UChicago establishment, as well as the regular conservative establishment in economics, did find some questionable ways to give the supply-siders a wink and a sly nod. That doesn't mean Friedman became a gold bug.

Maybe I'm just reading too much into this, but he seems to call Friedman, Mundell and Becker "nutty" while giving Jude Wanniski and Paul Craig Roberts something of a commendation for sincerity and having ideas.

This seems a bizarre perspective.

[Winslow R.]

bw wrote: "The U.S. needs a larger overseas national debt?

Huh?"

Deficits grow. Surprised? Think of the U.S. national deficits as a good thing as they provide stability. No more currency crises as almost every nation now has a large U.S currency reserve.

The U.S. blunder was not using the 'free lunch' to lead to a sustainable future.

[Bruce Wilder]

Winslow R.: "Think of the U.S. national deficits as a good thing as they provide stability."

I am not doctrinaire on deficits and debt. I don't see it as a religious issue.

But, having a large national debt in the hands of foreigners, does not increase the stability of the U.S. economy. au contraire.

As long as the U.S. was a credible leader in the world, and there was some reason for foreign countries to anticipate wanting more dollars in the future than now, then increasing the U.S. debt might have been a stabilizing force in international economic affairs.

But, that day is past.

Now, some of the big holders of U.S. dollars have more than they want.

JG may be correct, that the U.S. could retrieve the situation, if it because a leader again -- maybe even in energy conservation. But, put that too hopeful scenario aside, and further debt increases just make the U.S. poorer faster, and encourage asset fire sales. Going forward, it should look de-stabilizing.

[Winslow R.]

"But, having a large national debt in the hands of foreigners, does not increase the stability of the U.S. economy. au contraire."

Perhaps they do not even stabilize the global economy as George Soros is now looking for other things to do besides attacking currencies, like 'spreading democracy' in order to take control over the Caspian region.

Perhaps all U.S. deficits do is increase 'interdependence', Galbraith's third point as we depend upon foreigner savers to not 'attack' our currency.

[kthomas]

Until we start sending people to jail, this is all academic ivory tower rubbish.

[paine]

its a known fact among my cellmates
that i have grown fond of jaimie

i like his let's get to work
on the gren house of democracy
like we did the arsenal there of in 1940

but this...
"And if we can persuade the world to fund us, we could keep Americans fully employed for a generation or more, in this work "

i no get this fellow citizens

is he implicitly
calling for a continued protracted
trade gap here ???

u know to boost the growth rate of east asia and such
by remaining buyer of last resort

i notice no dollar policy so maybe ....

then again
i recall something about
devaluation and liquor to the iroquois....

[paine]

"as one of the top five percenters now having MY wealth stolen by the top one percenters.."

donna great post

the job market is indeed
an odd market

not an even handed market at all

[paine]

"Until we start sending people to jail, this is all academic ivory tower rubbish'

that's the spirit...let the tumbrils roll

[gordon]

Jamie Galbraith: "As I got to know the free-market, supply-side crowd..."

I suspect you mean "got to know the apologists for the ruling class". You may not have met any real members of that class at all. And if you did, do you think they would tell J.K.Galbraith's son anything he could use against them?

[paine]

where's my pitchfork gordon...

[gordon]

Do you have a pitchfork, paine?

[btg]

"We can't escape debt or deficits, and any attempt to do so by cutting government - the old conservative "solution" - would just lead to depression."

I read this not as saying "lets go deeper into debt and borrow more money from foreigners" as much as it is to say that the doctrinaire solution of "true" conservatives to have a balanced budget amendment or to make balacing the budget a priority, should be rejected... though in practice the US might need to go a little deeper in the hole at least temporarily - the timing is bad to follow contractionary policies.

[Denis Drew]

My current best abstract take on markets:

What the central planner is unable to do -- at all -- is duplicate the zillions to the zillionth power different rational decisions that need to efficiently operate a market. What the central planner (in the broadest, most general sense of the term) is able to do -- very efficiently -- is to interfere with or substitute any individual decisions that he can be personally aware of -- like deciding what the minimum price per hour of labor should be.

What any one of the millions of individual decision makers are not usually doing -- at all -- is seeking an outcome that the overall consensus of millions of decision makers would see as useful.

Fans of the unfettered free market believe its outcomes are perfectly proportional and that interfering with it is inherently inefficient. Actually, whether 80% of the profit of a fast food enterprise goes to labor and 20% to ownership -- or vice-versa -- has no direct effect on the consumer at all -- only affects what the profit will ultimately buy: perhaps better educated because better paid labor or perhaps more business investment because more profitable; both of which are within the realm of reasonable predictability to central planners.

Ditto for labor upping the price of a burger through minimum wage hike (or collective bargaining) to the highest price consumers are willing to pay (even it means selling fewer burgers for more labor profit per burger). "Natural" utility, if you will, should be seen as the highest price a product or service can command, not the lowest.

If a piece of land is sold at a fire-sale price because the owner is destitute and on the verge of starvation, that price probably wont fully reflect the utility the land might have to the purchaser. Unorganized labor is often in the same fire-sale position, since necessity may force it to accept whatever price will barely sustain it. There is nothing "naturally" efficient about sale of anything below the price which reflects its full utility to the purchaser. (There is something very naturally inefficient about keeping people too poor to reach the natural potential of their personal talents.)

[X Man]

All good stuff, but I can't help but wonder about hari and why he thinks Single White Females are taking over American capital...

[Lafayette]

Rude awakenings

Liberals accepted the virtue of balanced budgets, of low tax rates, and of deregulation in many spheres, of leaving the fight against inflation solely in the hands of the Federal Reserve

Well, we see the fallacy of that combination of policies – an economy in tatters and the walking-dead, who brought it about, looking desperately for the exits out of DC.

Why must we behave like pendulums when it comes to national policy debate? Why is prudence no longer a virtue? Nobody has a patent on truth, neither the Left nor the Right.

The “truth”, if there be one, is somewhere down the middle.

In the form of judicious policy making that conforms to the facts of the moment and not some ideological POV. All deregulation is not good, and all regulation is not bad. Or, if God had wanted a political party, he’d have created one – and since it does not exist, let’s keep religion in the home and not in DC.

And, for heaven’s sake, clean those special-privilege lobbyists out of Washington or create some that can counter their nefarious effects with arguments for and on behalf of the Common Good. Prudence IS a virtue in politics.

What's required? Three despised ideas need to be re-thought and re-spoken. The first is planning. Markets cannot foresee the future, only human imagination does that. Corporations, of course, do plan. The question is, can you trust all the planning that needs to be done to the "planning" department of ExxonMobil? No?

No, corporate planning is for corporate objectives.

I propose an Office of the Future, the purpose of which is to ask the question, “What if ..” and answer it. It’s a fun game – here’s an example of how it works.

When Wall Street would have wanted to put down Glass-Steagall, a group of very smart bankers would have been called in for a Work Session the purpose of which was to debate the question. “As an Investment Banker, what if Glass-Steagall is repealed and the business can merge Commercial and Investment Banking? What is likely to happen next? How can we take advantage of the situation?” And, concurrently, the economists can dust off their models and put them through the motions as well.

It would take a couple of months, but the results would make for some highly interesting reading.

This is a real policy making debate, which focuses on the consequences of policy decision making. We don’t do enough of that. Why?

Because we know that the consequences of asking the question “What if …” provokes all sorts of controversy. But, such is the price to pay for proper government. We cannot avoid controversy; we can only try to manage it. And, if, down the road, something happens and voices yell out “We told you so!” – then so what? The best was decision was made with the information at hand, with the broadest input possible.

An ounce of preventive thinking is worth a ton of furious activity at the Fed (or any other government agency) to save the furniture ….

The Office of the Future could also do Future Studies to plunge the depth of long-term options, as applied to Energy, Infrastructure Planning, Education, Competitive Stance, Urban and Sub-urban Renewal, Global Warning Menace, etc. etc., etc..

Aka, the Vision Thingy.

The Office would coordinate all such programs through various universities, pulling in the best minds in the matters under consideration. But, with one requirement – that no Study Group be just academics, but a homogeneity consisting of both learned scientists/professors and Industry participants. After all, most answers to the questions posed will affect the latter and not the former.

I was involved in such planning at a time it was popular decades ago. It is good fun, but never taken seriously by Governments. Which is why the Club of Rome never really got all that much attention, though it posited the same questions then that we must tackle today -- decades too late.

We need to think/prepare for the future, always. Or, it will simply turn around and slap us in the face, making for some pretty rude awakenings.

[Real Person from the Real World]

Donna's post is great "One problem to me is corporations have free markets, employees do not." Also Dennis Drew:
"Ditto for labor upping the price of a burger through minimum wage hike (or collective bargaining) to the highest price consumers are willing to pay (even it means selling fewer burgers for more labor profit per burger)."

=======================================
http://www.nytimes.com/2008/08/12/business/worldbusiness/12indiawall.html?pagewanted=2&th&emc=th
job loss (and Knowledge transfer) to globalize outsourcing - not only are foreigers doing the job cheaper,
Cost-Cutting in New York, but a Boom in India
By HEATHER TIMMONS
Published: August 11, 2008
3rd world countries (not just India) are getting knowledge transfer and US jobs, handed to them on a silver platter by US corporations
=================================================================
http://www.nytimes.com/2008/08/12/washington/12contractors.html?_r=1&th=&adxnnl=1&oref=slogin&emc=th&adxnnlx=1218543178-RClDCJXi6IdvQonFRxDdCg
Use of Iraq Contractors Costs Billions, Report Says
By JAMES RISEN
Published: August 11, 2008
outsourcing and contractors cost 100 billion in the Iraq war - just as in companies that embraced "outsourcing" of various functions.... did this *save* money or hide the cost? In Iraq, it keeps the death count obscure, and pays off well connected Republicans and their corporate cronies.

[swells]

Dennis Drew, excellent post and good points. I had not thought of that aspect in terms of collective bargaining at all. However, I have seen its effects pretty much my whole life. Entrenched interests of a certain sort wants a work force that is sufficiently dumb to be exploitable. With collective bargaining, masses of people can gain the value of being represented by expert bargainers. This is a good reason to favor the easing of rules in respect to union formation in the workplace.

[swells]

Donna, it has been my experience that about the last thing American corporations want is free markets. They want corporate welfare. Free markets are risky things and American corporations are just not that into risk that they can't fob off onto other people.

[swells]

Lafayette, good post. However, I fear you have missed the point of government in the US. It isn't really about planning for the future. It is about how best to belly up to the fabulous "All you can eat and still have what you want when you want it no matter what" buffet that has come to pass for government here.

[Julio]

Lafayette, good post as usual.

But
"But, with one requirement – that no Study Group be just academics, but a homogeneity consisting of both learned scientists/professors and Industry participants."??

The focus on "industry participants" (even if you include workers -- I'm assuming you do) seems narrow. It contradicts, in my mind, "And, for heaven’s sake, clean those special-privilege lobbyists out of Washington"

BTW, "special-privilege lobbyists"? as opposed to what other kind?

[gordon]

Lafayette: "...no Study Group be just academics, but a homogeneity consisting of both learned scientists/professors and Industry participants".

That would be a heterogeneity. But it doesn't matter, it depends on how it's constituted. The first question is whether the participants see themselves as isolated individuals present because of individual expertise or whether they see themselves as representatives. The "industry participants" (presumably including workers) must inevitably see themselves as representatives, I think, so there will be a need for some kind of election. But that would give their concerns far greater weight than those of individual experts, just because of their representative status. Your heterogeneity is likely to have trouble with that, but it's a nice idea.

Personally, I'd go with a Soviet of workers' and peasants' deputies united under the banner of Land, Peace and Bread.

[gordon]

But it is a nice idea. Maybe it could articulate that US Left programme which Prof. Stiglitz thinks already exists, but which I can't find.

I would suggest relying exclusively on people willing to donate their time and effort freely, and avoiding any involvement with Govt. or with think-tanks or NGOs of any description.

[FormerRepub]

One important point to make in our economy is that my viewpoint is that Government and its regulation has a purpose and that is to protect the citizen from Predatory commercial entities. And that as he pointed out in the article has not been done properly due to terrible GOP operatives placed in charge of important departments.

Consumers are at such a disadvantage. Fraudulent marketing. Fraudulent medical and pharmaceutical marketing and products, Fraudulent loans and financial markets with no innovation for the consumer, just policies that place consumers "over a barrel" for items needed to survive or basic items needed for future comfort such as retirement funds.
And taxation. A recent article pointing out that a third of business does not pay its share of taxes or any taxes and in one example a single business address in the Cayman Islands housing over 18,000 US companies? thats insane.
How about recently hundreds of billions found to be hidden from taxes in the european, ask no questions banking system?
how about the trillions in loopholes allowing Warren Buffet to state that he pays a lower rate than his receptionist?

How about the GOP courts repeatedly tossing out cases of lawsuits againt companies doing serious harm to us and the environment?
How about policies that lessen environmental standards for companies pillaging our lands and nature for instant profits?

How about companies goin bankrupt while CEOs and officers walk with golden parachutes and top shareholders getting out "just in time" to make money, and yet a consumer does so and pretty much is blacklisted forever.

[Real Person from the Real World]

Former Republican: I am with you. The onslaught of the diehard republicans I know, is nothing but smears, no substance. The only argument they can make to justify themselves is that the democrats are just as bad. Perhaps, but it is time for a change, and the GOP just cannot do it. McCain is just one more old conservative old fart. While I am not enthusiastically endorsing Obama, I hope he can be a catalyst for change.

[Lafayette]

Changing custom

DD: If a piece of land is sold at a fire-sale price because the owner is destitute and on the verge of starvation, that price probably wont fully reflect the utility the land might have to the purchaser. Unorganized labor is often in the same fire-sale position, since necessity may force it to accept whatever price will barely sustain it. There is nothing "naturally" efficient about sale of anything below the price which reflects its full utility to the purchaser.

In reality, this rarely happens. Two many ifs are being applied, therefore the situation does not reflect reality.

The return on labor is very largely affected by union negotiation, since non-union work simply aligns. If that negotiation does not obtain a fair return upon labor factor value -- and often it does not -- then that is the fault of who? Detroit and the automobile industry are a good case in point.

Unions, over the years, have priced Detroit automotive production out of the market, since it is well known that more recently arrived Japanese manufacturers offer less in terms of wage rates. Which is one good reason for their success in increasing market share.

I have proposed and maintain that for as long as labor is forced to be a part of the problem (cost) it cannot be part of the solution (profit sharing). This can only change from legislation that requires companies to negotiate also profit sharing with unions.

It is unconscionable that "some labor" (top management) should be able to accord itself a right to profit sharing by means of stock options, bonuses and the like. This is privileged compensation -- no more, no less.

Labor factor inputs have no reason to be distinguished by nature -- they are all common whether white or blue collar. The only attribute that distinguishes them is level of compensation -- as it should. Some skills are more highly prized than others. Executive management earns more than the floor sweeper because its responsibilities have larger scope.

But, expectations regarding the share of profit should be common in nature. Labor has justifiable reason to expect, as part of its compensation for having achieved certain objectives, to a share of the profit.

Only custom prevents labor from doing so. And it is high time to change the custom.

And, this is becoming so. France has suggested legislation that reserves almost a third of profit for sharing by the workers of a company. It would be first of its kind ever, if passed definitively as law.

And Karl Marx would turn over in his grave.

[Lafayette]

Reganomics Redux

RP: While I am not enthusiastically endorsing Obama

Then, who do you "endorse"?

You haven't much choice ... it was decided by the primaries a few months ago. It's between a septuagenarian and a black man.

It's time for America to grow up and show that stereotypes (sex, race, religion) mean nothing.

Age is something else again. A presidency is too important and complex for just anyone in their seventies to think they can handle. McBush is going to sleep through meetings like Reagan, thinking his handlers are going to handle the details of economic policy (that he admits he does not understand)?

What are we to expect, Reganomics Redux? That got us where? Suggested response; In the merde. (Pardon my French.)

[anne]

"Age is something else again. A presidency is too important and complex for just anyone in their seventies to think they can handle."

Huh???

[Lafayette]

Article: What's required? Three despised ideas need to be re-thought and re-spoken. The first is planning. Markets cannot foresee the future, only human imagination does that.
A second is standards.
The third idea is interdependence - as a financial fact.

My take:

• The first is planning. Markets cannot foresee the future, only human imagination does that.

Corporate planning begins with a set of product givens, then imagination takes flight (but also sometimes crashes). As I have opined previous, government have to do “What if?” planning, which is mostly thinking outside the box.

An example: Anyone can assume easily that an historical population growth will determine aggregate energy production requirements into the future. Population growth is a “no surprise” prediction, so energy growth needs are fairly well predictable.

But, how to supply those needs is a “What if?” question. What if we decided on a different mix from BigCarbon (Oil, Coal and Gas). What if we ploughed the necessary investments into renewable energy and not so renewable high-capacity nuclear energy. What investments are necessary? Who will make them? Can we finance them out of Carbon Taxes?

These are the questions that need deep reflexion and clear answers.

• A second is standards.

The US uses international agencies to further its interests without giving sufficient weight to their workings. This is so because America takes its sovereignty very seriously … but so does China and Russia.
Therein lies the challenge. If we want a Basle 2 to work towards imposing a new way to do International Finance, then we need to support forcefully the Basle 2 working committee toward finding acceptable solutions. Meaning solutions that give Finance sufficient elbow-room in order to function properly – but not like a bull in a china shop.

• The third idea is interdependence - as a financial fact.

This, I find, is an offshoot of the previous suggestion.

The US debt is beginning to gnaw at our precious sense of superiority as a world power. The US needs to take its place in the world not as kick-ass policeman but as a leader in such institutions as the UN. This means a world in which the UN plays a major role in international conflict, where Uncle Sam will not always get his way.

Lead-head’s father understood this and the UN gave him the support necessary for his surgical intervention. Lead-head’s utter stupidity, by means of unilateral action, got America the universal reprobation that many nations of the world now harbour towards the US.

The US should undertake its come-back. There is still a great deal of good will remaining.

[Lafayette]

swells: I fear you have missed the point of government in the US. It isn't really about planning for the future. It is about how best to belly up to the fabulous "All you can eat and still have what you want when you want it no matter what" buffet that has come to pass for government here.

I can find common cause with this sentiment, but ... it's just a generalization and does not coincide with my experience in business.

Some businesses do indulge in cronyism, that is, they get tight with ex-Cabinet Secretaries who work (as lobbyists) the system towards obtaining government contracts. This has been going on for centuries and no PotUS has had the balls to stop it. Corporate welfare usually comes back to party coffers in the form of donations.

So, stop that mechanism and politicians will have no reason to suck up to corporate donors.

[Lafayette]

Opinion-makers

Gordon: The first question is whether the participants see themselves as isolated individuals present because of individual expertise or whether they see themselves as representatives.

I was proposing a mechanism where a "plurality of opinion-makers" should be the criteria. I think academics do a pretty good job of running such seminars, but for themselves. Which means the opinion group is fairly restricted.

The objective is to stimulate contention in order to have a debate that is as pluralistic as possible -- to ensure a blanket coverage of opinion. Why should anyone be afraid of industry participants? Some may bellow the same inane arguments as in the past, suggesting that regulation will "sink industries" or "cost jobs". We've heard this pathetic nonsense a hundred times too often and if that is all they have to say, they won't win many arguments.

I recall using the Delphi Method when doing forecasting in the IT industry. It was a mess of paperwork because participants were scattered all across a continent. Rehabilitated and employed on the Internet, it could be an effective tool for canvassing opinion across a large range of participants.

It does work, I've seen it -- because Delphi assesses time-frames for certain outcomes and provides an argumentative method of defending ones forecast. Then the forecasts/arguments are voted upon for consistency and probable accuracy, by the group as a whole -- in an iterative feedback manner.

And all this happens across a very large number of participants. So, one need not necessarily convoke colloquiums that run off at the mouth for days on end. Results are obtained that can be employed for planning purposes – which was the base reason we employed Delphi.

If blogging works, Delphi will work in much the same manner -- with the added criteria of selecting participants, instead of being an opinion free-for-all.

[Lafayette]

Julio: The focus on "industry participants" (even if you include workers -- I'm assuming you do) seems narrow. It contradicts, in my mind,

Maybe I got my wording wrong, but I definitely did not suggest this above to be the constituency of the forum. Industry participants must participate in any decision that affects them.

What must be sought is opposing groups to argument their POV, hopefully with facts and not journalistic rhetoric.

There is an excellent debate program, every weekly evening, on French TV. It will take on any current subject, from the Iraq War to the Child Abuse to National Politics.

The participants are usually four and never more than five. (It is after all a TV program.) Of the debaters, nary a politician. They are all experts in the subject in debate, most come from research centers others from academia, and still others are reporters.

The debate is often heated, but they are essentially factual. That is, the reasoning is based upon facts and not non-nutritional political sound-bites. The program has pioneered the art of factual TV debate in France, because it avoided the political classes who take such debate to be their daily bread -- and end up talking a lot, but saying nothing.

It has been generally instructive for all who watch -- and that is goodness. It has also become a well known forum for several teaching economists who have become, sort of, national celebrities. That is, their word is sought by media chains for commentary when certain events have occurred.

Its result is to have raised the national consciousness regarding a great many subjects that are of primary concern actually to the French. In a word, the debate show has been goodness. (And, it is nothing like Meet the Press.)