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The Public Option For Obamacare Was Not Impossible

2017 January 9
winged_caduceus

***This is a Guest Post by Dan From T.O.***

Back in 2009-2010, Chris Bowers, co-founder of openleft.com, (at the time an “A-List” liberal/progressive blog by all accounts*) and Adam Green of the PCCC led a set of outsider “whip count” exercises in support of improving & passing the Affordable Care Act.

  1. The initial whip count effort in 2009 was focused on garnering 60 votes for cloture in the Senate in support of a public option (the House bill had one). This actually succeeded,** and had all 60 Democratic senators on the record in support of a public option, until 4 Senators backed out.
  1. In early 2010, a whip count was run to gain Senate support to pass health care under reconciliation rules (meaning only 51 votes needed for passage). This also succeeded, and ultimately the ACA included a “side-car” reconciliation fix once Democrats lost the 60th vote in the Senate via the MA Senate special election.
  1. Concurrently with #2 a whip count to also pass a public option via reconciliation. This also succeeded and Bowers & Co had 50 or 51 Senators publicly in favour of passing a public option through reconciliation.

All this is to say: The Public Option was very plausible. Even Joe Lieberman & Ben Nelson were open to it and really, they weren’t needed since it could have been done under reconciliation. Is it 100% certain that it could have passed? Of course, no counterfactual can be perfectly certain. Given how close Bowers et al got without much support from the Democratic leadership, and in fact the secret opposition of Obama who had traded away the Public Option, it is not ascribing magical powers to the Bully Pulpit to think that if Obama had wanted a Public Option in the bill, he could have got one.

The history here in this set of posts by Bowers is worth a review of the chicanery in play, in both occasions progressive activists were given seemingly impossible tasks to get a public option passed, did so, and somehow had the goal posts moved. It reads totally like a House of Cards plot to manipulate activists while not giving them what they wanted but still appearing sympathetic. Try this from Bowers’ 2009 post-mortem:

Back on May 21st, there were only 28 Senators in support of a triggerless public option.  Through your tireless participation in a whip count effort, by October 8th we raised that number to 51 when Jon Tester came out in support.  By October 30th, when Evan Bayh said he wouldn’t filibuster, we were up to 56 Democrats for cloture on health care reform with a public option.

From that point, the only four Senators we still needed all lied to us in one form or another.  Both Mary Landrieu and Blanche Lincoln signed a document stating that they supported a public option, only to reverse their positions.  Blanche Lincoln’s website still comically claimed she supported a public option even as she was declaring her opposition to one on the Senate floor.

Still, Landrieu, Lincoln and Ben Nelson were all part of the group of ten Senators who forged a deal on the public option that included a Medicare buy-in.  Further, immediately after that deal was reached, Harry Reid contacted Joe Lieberman to see if he liked the deal.  Lieberman told Harry Reid that he was liking what he was seeing, and just wanted to wait for the CBO report.  Further, Lieberman had supported an even stronger Medicare buy-in (for Americans aged 50-64) as recently as September 2009.

Six days later, Lieberman and Nelson went on national television to engage in some more mendacity.  Lieberman said he would filibuster the deal, even though he had told Reid he liked it, and even though he had recently advocated for it.  Ben Nelson badmouthed the deal even though he helped forge it.

Tell me that does not read like Obama’s team working behind the scenes to flip Lieberman & co back to ensure their deal with Pharma was kept.

The demise of the Public Option in the 2010 effort comes off about as bad, with a bad-faith exercise in finger pointing between the House & Senate over who should add the Public Option to the bill, and even a bonus arm-twisting of Bernie Sanders not to try and do so by amendment.

All of this is “I told you so” of course, but I-told-you-so is important at times so mistakes aren’t repeated. The ACA is most likely going to be gutted or repealed entirely and the lack of a Public Option has certainly not helped it ever get a strong base of public support needed for it to survive a term of opposition government. If one reviews the history of polling on the ACA, it is clear that between the “it’s ok” camp and the “it needs to be expanded/made more liberal” camps there is consistently well over 50% support for it, but in straight up approval polling, the law was always more unpopular than popular.

The theory from the law’s proponents back in 2009-10 was that once it took effect and started helping people, it would get more popular. Very plausible except that it isn’t really what happened, probably because private insurance companies are awful to deal with more people felt the ACA was hurting them than helping them as time went on:

The public option would have meant that those people finding they hated the exchanges could have opted out of that mess and bought into some version of government provided plan that could have been simple & not subject to major price changes & regular cancellation (frequently a problem for ACA plans). It also would have meant more people attributing their shiny new access to health care to Obama and the Democrats which only could have helped in those mid-term blowouts.

Like his unforced errors on the too-small stimulus, HAMP helping banks instead of people and not prosecuting Wall Street fraud, this error is on Obama: He chose to not have a public option in the ACA and if he’d wanted one, it is quite likely he could have had it.

* – See here for Hillary Clinton herself being sent an openleft.com post from 2010 per the Podesta email dumps.

** – Sorry, link rot has really set in on a lot of this. Someone (Bowers himself possibly) is maintaining the archive of openleft.com posts I am linking to but most of the links from those posts no longer work.

Rule of Men, Not Law

2017 January 7
dublin-castle-gates-of-justice-and-fortitude

Amidst all the screaming about Trump, there is a feeling that he is being unfair by singling out various companies for attack.

This is true.

It is also special pleading.

What Trump is doing, and what he will almost certainly do when he is in office, is pick out specific groups and individuals, and he will very likely use the weight of the state against them.

Oh dear. Oh dear.

This is rule by men, yes. It has also been going on for years.  Anti-war protestors and environmentalists have been singled out for special attention on the positive side of the scale.

Meanwhile, on the negative end of the stick, let us compare two financial crises.  In the eighties there was a financial crisis too, filled with tons of fraud, called Savings and Loan crisis. It happened under a Republican president.

Executives were charged, and they went to jail.

In 2007-2008 we had a financial crisis, and from 2009 on, Obama’s DOJ applied fines, not criminal charges. Those fines immunized the participants, and since they did not take money from those who had benefited (and were often less than the profits taken by the corporation, even) they did not dis-incentivize criminal acts. Instead they said “there is no real penalty, so make the money when you can, and we’ll immunize you for a token fee.”

There is no question in any reasonable person’s mind that many executives had engaged in fraud, negligence and criminal conspiracy which could have been indicted under RICO.

But hey, they were let off. Meanwhile people who applied for mortgage relief were deliberately given the run-around and fucked over, losing their houses (see David Dayen’s “Chain of Title” if you need the blow by blow.)  Robo-signing by financial institutions, post financial crisis, was also mass fraud, attesting to facts the signers had no knowledge of.

America already is a nation of men, not laws.  One can say “it has always been thus” and there is some truth to that, but it is more a lie than true: see the S&L crisis.

People  have already been getting away with lawbreaking depending on who they are and not small numbers of people.  And if you don’t think various firms haven’t been picked out for special positive favors, you simply haven’t been paying attention.

2000’s Gore vs. Bush ruling was “men over laws”. It was such a bad ruling that the Supreme Court tried to say it couldn’t be used as a precedent. Meanwhile the protections of law in general were gutted: the Patriot Act, the AUMF, the rise of the vast surveillance state with its clear industrial-scale violations of the Fourth Amendment.  Most Americans live in a border zone, where they don’t have freedom from arbitrary search and seizure.  As for the first amendment, the existence of “first amendment zones” tells you all you need to know.

Trump’s behaviour is and will be the direct line consequence of how many Presidents acted, including Obama (who notably killed an American citizen without any trial and claimed that right).

To cry now, and especially to weep for large corporations who are bad actors, is hilariously hypocritical and intensely revealing “Trump blackmailed them into keeping a few jobs in America, that Tyrant!”

Oh, my, God, the funny. Now yes, Trump has also called out people for terrible reasons.  Oh well.  Yes, that’s a new bad thing (though not worse than killing a US citizen without trial, the right to face his accusers and see the evidence against him), but I just find it hard to get very worked up over.

You already lost your rule of law. There are a few places one can date the loss to, I put it in Obama’s mass-immunization of financial executives, but you could argue for Bush vs. Gore or a number of other places.

But wherever you put it, it already happened.

You have rule of men.  For certain people the law is interpreted and enforced differently.

This, folks, was at the heart of Trump’s attacks on Clinton for e-mail, which liberals laughed off.  But we all know that if some peon had done the exact same thing, they would have been ruined and probably gone to jail.

You already lost rule of laws, and had rule of men.

You have already paid a frightful price for this. The reason your economy is so bad is because bankers were immunized and bailed out, staying in charge of your economy when they are incompetent crooks and ordinary people were not bailed out.

Not coincidentally, minus not bailing out ordinary people, Trump does not win election in 2016.  (He also wouldn’t have won if Obamacare was not so flawed, but that’s another post.)

Trump is just the continued price for breaking your own laws and constitution, and your own unwritten norms.

As such he falls under “as you sow, so shall you reap”.

Until large numbers of Americans see it this way, including at least some faction of elites or would-be-elites, there can be no true fix for this situation, whatever happens with Trump.

Trump is the symptom, not the disease, and until you treat the disease, things like Trump (or the financial crisis and lack of real recovery) will continue to happen, and fools will continue to be bewildered by them, as if the very public actions of the people they elected had not led to them.

Machiavelli wrote, and America’s founders agreed, that good men could make bad laws work, and that good laws could not save bad men.

The founders equivalent was that eventually Americans would become so degraded that they could only be ruled by despots.

Americans give many signs of being so degraded and it’s up to Americans to prove that they aren’t.

Don’t dare to say this is all on “deplorables” or Republicans, because Democrats have not just been complicit in all of this, they have pushed it on in deliberate ways, as with Obama on surveillance, drone murder and whistleblowers.

It is on Americans.

Americans are reaping as they have sowed. That all Americans are not bad or degraded is not the point, enough are, and your elites are corrupt as a class, so that I would easily expect 9 in 10 to be fundamentally unethical and unsuited to public life. That includes, by the way, Clinton, Bush Jr, Obama and Bill Clinton.

Trump is what Americans have earned.


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Trump and the Art of the Strongman

2017 January 6
by Ian Welsh
the-new-yorker-who-is-donald-trump

Trump has now taken a number of firms to task, over Twitter, about moving jobs to Mexico. While there’s some disagreement, it seems that some critics have backed down.

“I know from talking to business people that no major firm wants to be a subject of a Trump tweet,” says Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics. He says companies realize Trump controls the Justice Department, the Defense Department, the IRS, the Treasury and regulatory agencies, and “the amount of control that intersects with what companies are doing is enormous.”

This is, first, an implicit rebuke to all the Presidents who did nothing, and to all the fools who said they could only do nothing.

But, it is also about the art of getting powerful people to bend to your will.

The classic method is to pick out someone, someone powerful, and break them. Humiliate them, destroy them, and do it publicly. Make them grovel.

You make an example of someone. In almost every case, and certainly in Trump’s case, were the powerful to band together, they could easily take you down. You must make sure they don’t do that.

So you make an example of someone, and then you treat others kindly.

“You can have tax cuts and beautiful labor law cuts and a privatizing stimulus, but in exchange I need you to keep jobs in America and bring some back.”

That’s the deal.

The problem is that many CEOs and billionaires will want to take all the goodies, and still move jobs overseas. Normally, in fact, that’s what has happened: Tax cuts were given, and the savings were used to accelerate offshoring and outsourcing and to do massive stock buy-backs to enrich executives.

So Trump is putting companies on notice that this won’t be tolerated, and I believe to really drive the lesson home, he will need to break someone.

Be very clear, this is easy to do. The President is fantastically powerful. Unleash the FBI, NSA, DOJ, and IRS on any major firm, and you will find offenses. Moreover, in almost every case, they will include criminal offenses–if you allow them to be.

Then, you charge executives with crimes rather than immunizing them with fines, and you tie them up in court for years. If they lose, you throw them into a maximum security prisons, and you let bad things happen to them.

Even before this sequence is through, people will get the message.

Presidents have chosen NOT to do this, even in cases of rampant corruption and criminality (Obama being the worst offender by far, with his wholesale immunization of fraud and racketeering in the financial industry).

But you don’t have to play the game that way, and I’m guessing Trump won’t. And that’s why executives are bowing, because they’re scared he will break someone to demonstrate his power, and they don’t want to be the executives he hauls out of the crowd, to whom he has his goons deliver a beat-down.

This is nasty pool, but I wouldn’t weep for whoever becomes the example. They’ll almost certainly have it coming. The injustice won’t be in what happens to them, but in the fact that all the others will be let-off so long as they kow-tow.

We’ll talk more about this principle, with regards to the Federal Reserve and the intelligence community, for now, watch for it.

(Trump gets his second term if he delivers enough for his base. This is existential for his administration.)


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Cyclical vs. End-Time Thinking

2017 January 5
by Ian Welsh
The Course of Empire by Thomas Cole

Eras come and go.

Civilizations come and go too.

There have been ecological collapses in the past. For example, one took out the Mayans, and it was self-inflicted. The same is true, on a lesser scale, for Mesopotamia.

Human history is cyclical. It’s only “up trend” in a very long view of things.

In the normal course of events, I would expect that Western civilization would fall. It’s, well, inevitable. I don’t even think it’s that far away in historical time. Might be this cycle, might be a couple hundred years, but we’re clearly coming to the end of our rope.

A civilization ends when it can’t handle problems that are totally obvious, because its ideology won’t allow it to deal with them. In our case, the ideology is economics and capitalism, which insists that decisions must be made based on what maximizes profit. Our ideology doesn’t recognize that profit is a social construction, and doesn’t take into account all the upsides or downsides of doing anything. This, combined with our moral belief that money is “good,” and that the more money you have the better you are, is killing our civilization. (These categories, expanded slightly, cover state capitalist societies like the USSR well enough.)

These problems are acknowledged; just as most of the problems which led to the fall of the Roman Empire were acknowledged, but we refuse to fix them. Every once in a while, an FDR will roll around and patch up one part of the problem, but, eventually, we go back to doing the same thing.

Normally this would amount to reactions like, “Oh well, sucks to live in such times.” Nations, societies, and civilizations come and go and it’s very sad, but it’s just how the world works.

The question is, “Is this time different?’

The argument is scale. We’re a global society, and we’re causing an environmental disaster that is magnitudes larger than any humans have caused before.

One argument is that, “Hey, people predict the end of the world all the time and they’ve always been wrong.”

Which is true, and that argument will be usable until humanity does go extinct (which, inevitably, it will, the question is only when) because it is a one-time event. That it has not happened to humans in the past does not mean it cannot happen. We’re currently driving many species to extinction. Each species goes extinct only once; species extinction due to environmental problems is dead common, and often due to environmental problems the to which the animal in question contributed.

My best guess is that this time is not the human extinction event, but I make that a matter of probability, not probability based on, “It’s never happened before,” (because it has, just not to us), but simply because I expect the climate and ecology will stabilize at a new norm and that the norm will likely be livable for humans.

I regard the loss of all coastal cities and lands as inevitable. We are going to lose the Antarctic ice shelf, and it is going to flood coastal lands. Due to the self-reinforcing part of the cycle, especially with relation to methane gas, that’s just going to happen–and probably sooner than we think.

Before then, we’re going to see widespread disruption of weather, which, combined with our overuse and poisoning of aquifers, will mean widespread food shortages, starvation, and mass migration of hundreds of millions of people in one go. There is no question in my mind that we will see wars for water, and they will be major wars.

There are a myriad of knock-on events which will occur, most of them bad. It will be particularly amusing (in, yes, a sick and sad but appropriate way) if Europe is plunged into an Ice Age. This seems quite likely, as the warm water current which keeps Europe much hotter than it should be could be cut off.

But there are reasons to believe that we’ll stabilize, and those humans who remain will go on. This isn’t a 100 percent thing. I believe there is a non-trivial chance we will drive ourselves into extinction, but I judge it as less likely.

On the other hand, I’ve rolled a lot of dice in my life, and I can tell you that the one, ten, or 30 percent probability you discounted can bloody well come up.

More to the point, while catastrophe is now inevitable, the scale of that catastrophe is not fixed and we can still do quite a bit to mitigate and prepare.

Clearly, we aren’t going to be doing any mitigating or preparing for the next four to eight years. The current generation of leadership needs to be replaced, either by youngsters or the last of the post-war liberals with integrity (Sanders and Corbyn are the representatives of that cohort; Sanders lost, Corbyn is polling badly, though I haven’t written him off).

This is where we are. Our civilization is heading into one of the periodic crises that civilizations go through AND, not coincidentally, we have an ecological disaster of unprecedented scale barreling down on us.  The first has so far made it impossible to deal with the second, but it is also our best chance, because it promises the possibility of new leadership with new priorities on the other side.

But we must find a replacement for our current economic ideology, as it has served us very badly. We are also going to need to take a hard look at our political ideologies, whether “democratic” or authoritarian, because they have performed no better, being unable to even so much as slow the onrushing night.

Life, in general terms, is going to spend a long time getting worse for a lot of people. There’s a lot of triumphalism about how great our world is, and stats to back it up (stats I don’t trust, but that’s another post), but even if it’s 100 percent true, this “greatness” is time-limited. It has already reversed for many people in the core hegemonic power, where we have had an absolute decline in years lived, as well as huge shocks rolling through the birthplace of our civilization, Europe.

Expect this. Bake this into your plans. Things are going to get worse, and you should be prepared for that, not just physically, if you can, but psychologically. Periods which are shit for decades or even centuries are common in human history, and people keep on keeping on.

Trump isn’t the end of the world, if the end of the world is coming. He isn’t even the start of the end of the world. He and various other events which will occur soon, are at most, the beginning of the end of this period of history.

At the other side of this crisis point, we will either have a society which can deal with these problems well enough to save hundreds of millions to a billion or two lives, or we won’t.

And that’s a set of issues far larger than Trump.


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2016 In Retrospect

2017 January 3
tags: ,
by Ian Welsh
the-new-yorker-who-is-donald-trump

There seems to be a general belief that 2016 was a particularly bad year. Part of that is the twin political events of Brexit and Trump, and part of it seems to be that a number of particularly beloved celebrities died.

But unless you were in a few specific places, like parts of Syria, and certainly if you were in most of the developed world, your odds of having something bad happen to you were about the same as they had been in 2015.

Certainly Brexit and Trump are both, potentially, earthquakes, though their severity remains to be seen, and I regard both as consequences of decisions that were made over a period of decades.

What made them seem so severe, I think, is that they were, to the liberal classes, surprises. In both cases, polls indicated they wouldn’t happen; and it was conventional wisdom among certain groups that both events were absurd.  Trump, in particular, was treated as a grotesque joke when he announced his candidacy, and right up to the last moment, almost literally, icons such as 538 and the New York Times insisted he was almost certain not to win.

When he did, an entire world view went away.

Because they thought it had been impossible for Trump to win. He was a joke, according to that world view, and those who held it have seized, in particular, on “Russia did it!” It was a deus-ex-machina, because their world model simply cannot accept that it happened.

And, in both cases (Brexit and Trump), there is a great deal of shaming and othering of those who voted the “wrong” way. They are castigated as stupid and immoral, people who are too dumb to vote in their self interests, to understand how the world works, motivated almost entirely by racism.

Bad people.

So many liberals in America and Britain now believe they live in countries where half the voting population are evil, stupid racists and that those people are now in charge.

Oh, and the big, bad Russians are also responsible.

While some are willing to admit that perhaps, just perhaps, the policies that even they voted for and/or supported (under Blair, Clinton, Obama, and the EU) might have something to do with all of this, the metaphysics of most essentially boils down to the notion that bad people (Russia, racists) combined with stupid people, are destroying our world.

Because they can see little responsibility for themselves (either in past policy or in the specifics of the campaigns (Clinton’s was notably incompetent)), they have eviscerated their sense of their own power, and thus their ability to create change.

Responsibility and power are exactly equal to each other. You have exactly as much power as you have responsibility, any mismatch is a denial of reality, and if society abets you in denying that reality, as it often does, by giving you more credit or less blame than you deserve, it does not change either your responsibility or power.

It is also true that an accurate perception of blame enables correct action. When Clinton and her team completely fumbled their campaign, not removing them from all positions of power indicates a willingness to tolerate failure again and again. Indeed, after Clinton, the presumptive front-runner, was defeated by Obama in 2008, perhaps the realization should have dawned on us/her that she and hers were incompetent and that she should not be the presumptive candidate. She started with a vast advantage and lost it.

Meanwhile, in the eight years Obama has led the Democratic party, vast losses have occurred in State Houses and Congress.

As for policies which have lead to vast numbers of Britons and Americans being willing to vote for Brexit and Trump; well, I have written on those subjects more than enough.

Liberals and centrists, as a group, deny responsibility, and thus deny agency. They refuse to put the locus of responsibility in those areas over which they have control. Instead, they blame forces over which they have no control (Russia) or over which they have less control (the current racism that is ex-nihilo, completely unrelated to the policies they have championed for decades).

It is not the crisis, as such, that predicts the future, it is the response. I was able to accurately predict the shape of America and Europe’s economy because I saw the response to the crisis in ’09. The day the outlines of Obama’s stimulus were announced (he’d already fumbled the bailouts, by bailing out the rich rather than ordinary people), I wrote that American jobs and wages would not recover for 20 years. Eight years later, that’s still looking accurate. (The unemployment rate is not what matters here, the jobs/population ratio is.)

So, seeing the liberal response to 2016’s political crises, it is clear that, at least so far, liberals have not learned the necessary lessons. Thus, trends will continue in the wrong direction. Locating the problems as beyond their control, liberals have self-emasculated.

There is still time for that to change, and perhaps it will. So far, however…well…

Happy 2017.


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People Are Not of a Piece

2017 January 1
by Ian Welsh

One of the most difficult things for many to understand is that someone can be wonderful in some parts of their life and truly awful in others. A man can be a rapist, say, and also be genuinely kind to other people. Someone can go into work, make decisions that will impoverish millions, and then make sure they make it to their child’s play, where they agree to help build a facility to help disabled children or a shelter for abused women.

People can be terrible in one part of their life, and good in another.

It’s a relatively minor thing and an unimportant celebrity, but take Mel Gibson, of the infamous anti-semitic rants and terrible temper. Many people came forward to say how wonderful he’d been to them, and many of his friends, like Jodie Foster, didn’t turn on him.

The bad stuff doesn’t cancel the good stuff. The good stuff doesn’t cancel the bad stuff.

This is important in two ways: When someone who is generally good is accused of doing something bad, they may well have, especially if what they’re known for being good about isn’t related.

And if someone who is generally bad does something good, they still deserve credit.

It is also important analytically. If you assume someone is all bad or all good, you rarely actually understand that person, nor can you predict their actions. Terrible people can do good (Genghis Khan), wonderful people can do evil (FDR).

Good in what way? Why? Bad in what way? Why?


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Happy New Year

2017 January 1
by Ian Welsh

I hope 2016 was good for you, and I hope 2017 is better.

On Trump’s Reaction to Putin Not Expelling US Diplomats

2016 December 31
by Ian Welsh
Vladimir Putin Official Portrait

So, in “retaliation” for the Russian hacking that Obama claims happened during the election, Obama kicked out a bunch of Russian diplomats, shuttered some buildings, and so on.

Putin was expected to retaliate and did not do so, instead inviting the children of US diplomats to come to the Kremlin holiday parties, as Russian diplomats’ children had been deprived of some of their activities as part of Obama’s punishment.

Trump then tweets,

And people go wild, accusing him of treason, supporting the US’s enemies, etc.

Let’s state this clearly.

a) Obama does things to hurt Russia.

b) People expect Putin to do things to hurt the US.

c) Putin does not.

d) Trump says Putin is smart for not doing things to hurt the US.

ENOUGH.

Trump is undoubtedly a bad man. He will probably be a bad President, quite likely even a very bad President. (Making him similar to every President since Reagan, at the least, each of whom have only varied in how awful they were and in what ways, though that variance, yes, did matter. Especially to Iraqis, Libyans, Nicaraguans, and so on.)

But just because he does something doesn’t make it bad. Reagan did things I approved of, and he was loathsome and is more responsible than any other politician for putting the US and the developed world onto the road that has led, well, here.

If you are going to oppose everything Trump does, and always draw the worst possible conclusion about his actions, you lose all credibility.

The hysterics about Russia’s role in the election (if they even had one, there is, as yet, no hard proof; all the evidence is circumstantial at best) are hysterics. The hysterics about Russia, in general, are hysterics.

The US and Russia have no significant real national interests that clash. It does not matter to the US who rules in Georgia or the Ukraine. It just doesn’t goddamn matter to the US. It does matter to Russia. The US would have been better off if Assad and Qaddafi had never faced rebellions, because both were tame despots, happy enough to cooperate with the US against Islamic terrorism (no, Israel wanting Hezbollah cut off is not a US interest and Saudi Arabia’s fear of Shi’ites should not make Americans think Shi’ites are of concern to the US).

The US and China do have real clashing national interests, which doesn’t mean they can’t and shouldn’t be resolved to mutual benefit. The US and Russia? No.

Well, they shouldn’t. They do now, but almost entirely because the US insists upon it.

At any rate, the simpler point is just this: Saying that not expelling US diplomats is smart is not treason, or bad, or anything else. You wanted them expelled?

The people spewing this drivel are either propagandists, or in fear-driven overdrive.

Stop the hysterics.


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Groups Only a Fool Trusts

2016 December 29
tags:
by Ian Welsh
Image by Admit One

Economists: The vast majority missed the housing bubble.

Intelligence Agencies: Remember Iraq? Part of the job description is lying.

Any Army’s PR: Enough said.

Life Insurance Agents: I worked back office dealing with agents. About 10 percent were looking after their clients first.

Politicians: Yes, obviously.

Stock Brokers: As the book said, “Where are the client’s yachts?”

Media, in general: Most of them are owned by a few conglomerates. They do what’s in the interests of those big conglomerates or their job leaves. And remember the NYT and Iraq.

Private equity or hedge funders, any senior executive in any large bank: They were all in on the fraud leading up to the financial crisis, and yes, they would do it again.

Any senior executive in any large firm: They didn’t get there by being good people. Good people don’t become Senior VPs.

Central Bankers: They either missed the housing and financial bubble or didn’t care, then they bailed out the rich and fucked over the little people. No one will be hired for those jobs who wouldn’t do it again, and again, and again.

Etc.

My friend Charles Green, who co-wrote the book, The Trusted Adviser, loved to say “I trust my dog with my life, but not my lunch.”

Who you can trust depends on what you are trusting them with, and who you are. Charles can trust his dog with his life; I can’t trust his dog with my life.

Central bankers are the dogs of the rich. The rich can trust bankers to save their lives, no one else can. Perhaps if you were to fall in front of one of them and injure yourself, some of them would call an ambulance for you. You can’t trust them not take away your house, however, or pursue policies that crush your wages and make jobs scarce.

The point here is that just because someone is good in one part of their life, doesn’t mean they’re good in another part of their life. I learned this young: My father was a bastard to his family, but was respected by most of his employees for his loyalty to them.

People are not of a piece, and you need to understand what their jobs are to understand what they can be trusted with.

A politician’s job is to get voters to elect them, then to do things that rich people like, because rich people reward them both before and after they leave office; while in office, rich people take care of their families, invite them to parties, give them loans, and so on and after they reward them with lucrative positions in their companies. Rich people pay most of a politician’s salary: They work for them.

This is IMPORTANT. So if you want to know if a politician is one of the rare few you can trust, you need to see that they don’t take the rich’s money, and they don’t vote with the other people who have taken the rich’s money. And you can only really see that once they’ve been in office for awhile.

This is why I trust Corbyn. Because he doesn’t take their money; he barely even accepts money from the government for office expenses AND he has a track record of voting against or for the right things when it was against his personal interest. He has integrity. He is a very rare politician.

When I used to back-office for life insurance agents, I could tell the ones whom I’d recommend because they would sell insurance, often, that earned them less commission, if it was better for their clients. That simple.

For economists, look who they work for and look at their prediction record. Did they come out against the housing bubble early, for example?  You can trust Stiglitz because he wrote a book attacking the World Bank that named names and turned other economists against him because he was concerned more about how poor people were being hurt than about what his fellow economists thought. He did something against his own interest, plus he’s been right on most issues. Integrity + competence.

If you happen to have a 100 million dollars or so, then you would be justified in saying, “I trust central bankers,” because they are looking out after your interests–though you might wonder if they are competent enough to do. Still, they’ll do anything for you, they are your dogs: You can trust them. No one else can.

As for the rest: Never trust anyone on commission without doing extensive checks to see if they’re putting their clients’ interests first. If they’ll take a hit in pay to do the right thing, they’re trustowrthy. Remember, most of them work for firms which, whatever their “official policy,” strongly discourage getting lower commissions for any reason.

Intelligence agencies. Well, if you’re stupid enough or naive enough to trust an intelligence agency, I can do nothing for you. Even people who work for intelligence agencies don’t trust intelligence agencies.

With respect to the media, people are extraordinarily stupid. For example, I don’t trust Russia Today (RT) with respect to things that Russia cares about, but they’re very good on things Russia doesn’t care about. What you’re looking for is a media outlet which doesn’t care about the issue in question, which isn’t subject to pressure on that issues, whose owner doesn’t care. The US media is useful in regards to the US, of course, but it is not trustworthy.

Understand?

There are few things which will destroy you faster in life than trusting the wrong person or people, and the metrics you have for trusting individuals in your life don’t work when scaled up to organizations, professionals, and so on–the people who are not your friends, or in your social circle, or who are not being dealt with as friends and members of your social circle.

The interests of these people do not align with yours, they do not identify with you, and your well-being does not concern them in any meaningful way. Figure out what their interests are, who they identify with, and who they serve, if you want to know what they’ll do and whether you can trust them.

And if you’re looking for the rare politician, broker, or commissioned salesman you can trust, look for the ones willing to go against their own interests–and with a track record of doing so.


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Book Review of “Dark Age Ahead,” by Jane Jacobs

2016 December 29
by Ian Welsh
jane-jacobs

This isn’t the best book by Jacobs, the famous theorist of city planning, economies, and morals, but on re-reading it for the first time since it was published, I thought it made points worth sharing.

Jacobs defines a “Dark Age” primarily as a great forgetting: Society loses the skills and culture known to one’s forbears in a widespread way.

She follows Henri Pirenne in naming the key point where Europe’s decline turns into a Dark Age as being when Mediterranean trade ended with the Muslim conquests–but the forgetting had been going on for years. Roman craftsmen in the 3rd century could not make items that their forebears could make in 0 AD, and by the fifth century, cities and culture were in noticeable decline under an autocratic state which allowed very little economic freedom. This state, with its remains of a much higher Roman and Greek culture, impressed the barbarians on its borders greatly, but it was a shell of what it had once been.

Once the Dark Ages descended in full, well, things got ugly. There was the loss of the three-field system, the loss of a skill as simple as bread-making (so much so that the staple food around Paris in 1000 AD was gruel), and the loss of most iron-making abilities, so that people were plowing with wooden plows. Archaeologists say the bones of French peasants show that they ate grass–which even showed up in their teeth, so they must have eaten rather a lot.

That’s a Dark Age.

Jacobs had recently read Jared Diamond’s Guns, Germs and Steel, which is about why some areas do well, and others don’t. The answer basically comes down to: “Those that start with the most just keep winning.” Jacobs noted that Diamond didn’t explain why such regions sometimes stop winning, such as the Fertile Crescent (the core of civilization for almost 8,000 years) and sets out to provide her own answer.  (Diamond later wrote his answer, which came down to (and I agree, in part, nor is he the first to make the point): “Advanced regions stop winning when elites are insulated from the effects of their actions.”)

I think that Jacobs’ answer, which she is not the first to give, is somewhat more interesting, however, if perhaps less fundamental.

Jacobs, as the book title suggests, saw signs that we in the West were moving towards a Dark Age. This was due to forgetting–not being able to do what we had done in the past. In this case, it is not about losing technical skills (yet), but in losing certain scientific skills and in not understanding how it is that our economies actually produced the civilization in which we live and thus being unable to do what our predecessors had done.

Jacobs hits five points as examples, starting with families. She notes that the median family can no longer afford the median house in most of North America; that the decline of community and extended family means that child-rearing has fallen far more on fathers and mothers than in the past; while median wage stagnation combined with fixed costs rising has meant people need to work more. These are all conditions that push the family towards failure, and indeed, that can be seen in the very high divorce rates.

As anyone who has read her knows, Jacobs thinks suburbs are very unhealthy: They don’t create community (no walking, no street life), and they don’t foster real economic growth due to zoning regulations. The large is often the child of the small, and we have deliberately pushed people into neighbourhoods which, by design, cannot be communities. There are other causes of the decline of community and family, and many are deliberate policy choices, like making housing prices rise faster than wages (this is policy, and has been since, at the latest, 1983).

Because society is made up of families, and families are the most responsible for the important work of raising the next generation, the failure of families indicates a deep malaise in society. Note that at the same time as families are under stress, alternatives like schools and community groups and libraries are also in decline; as parents need more help, less help is available.

Jacobs second point is that education at the post-secondary level is no longer education, it is credentialing. I shan’t go into that at great length, but it’s worth reading, because Jacobs was alive during the Great Depression, and personally remembered the GI boom, and so on. She was there when universities became credentialing institutions and not educational facilities, that is, places where you get a piece of paper that lets you apply for a job rather than an actual education. On a personal note, I have never found that in any social science, except perhaps political science (which I do not find useful), that I do not know more than almost any person with a B.A. in the subject. They’ve had four years of specialized instruction, and they know less than an autodidact.

Jacobs’ third point is about science. She starts with a review of the basic theory of science (testing hypotheses), and the work of Thomas Kuhn on how paradigms guide science and are overthrown. She then eviscerates traffic engineers (this is an old Jeremiad of hers, starting with The Death and Life of Great American Cities in 1961). Their fluid dynamics model of how traffic should operate (constrict it one place, it goes somewhere else) is not supported by the data, which shows that if you constrict traffic in one place, it often just disappears. She goes on into much technical detail about proper street use, but her point is simple: What traffic engineers say works, doesn’t work if you actually look at the data. That they don’t recognize this indicates bad science.

She then looks at the Chicago heat wave of 1995. 739 people more died that week than during an ordinary week, mostly old people. The Center for Disease Control sent in a team of 80 researchers, and they did a huge study which came to the conclusion that they had died because they ran out of water, didn’t have air conditioning, didn’t go somewhere that did, and weren’t checked in on.

As Jacobs points out, that’s what everyone already knew. Not useful.

Meanwhile, a single sociology student noticed something interesting. Death rates in certain parts of the city were much higher than others. Turns out that people who lived in low-density, low-income neighbourhoods were less likely to have air conditioning, more likely to lose water pressure because of kids opening hydrants, had fewer stores with air conditioning nearby, and fewer friends–especially local friends. They didn’t answer the door when checked on, and didn’t want to leave their homes, because they were scared of crime.

The CDC had not looked for what tied the people together as a group. Instead of looking individual characteristics, the CDC should have been noting where they lived, and to a large extent, their socioeconomic status.

Since the goal of the study was to figure out what to do next time, the second set of data was far more useful than the first.

The last part of this chapter is taken up with noting that economists don’t really understand what causes growth (creation of new work in cities and import replacement splurges in cities) and, as such, were mystified by periods of large growth in Canada which did not accomodate their models (in Vancouver in the early 90s, and Toronto in the 2000s), but I’ll leave that be. (See my review of The Economy of Cities to learn more.) The fact that economists don’t understand economies will surprise no one who remembers that most economists said there was no housing bubble.

Jacobs’ fourth point is about taxation, in particular, that the parts of government which have the ability to tax the most are the farthest removed from the people they serve and the least responsive to people. Our taxation system lacks subsidiarity and fiscal accountability.

Subsidiarity is the principle that government works best–most responsibly and responsively–when it is closest to the people it serves and needs it addresses. Fiscal accountability is the principle that institutions collecting taxes and disbursing taxes work most responsibly when they are transparent to those providing the money.

In other words, the more local the authority, the better it spends its taxes. This is one (only one) of the reasons why city states tend to be successful. People who spew over Singapore make me laugh: Of all the forms of government in the world, running a city state is the easiest as long as one can solve the violence problem (i.e., not getting taken over by someone larger).

Jacobs believes that these issues have been getting worse: More and more spending decisions are made further and further away from local government and those decisions are more and more opaque. She targets property taxes as the basis of city government in particular.

I am in broad agreement with her, actually, and would put primary responsibility for taxes on the local level, with mandated transfers up and out to rural areas, rather than our current system of federal governments doing most of the taxing and then deciding how much money they want to give local areas.

It’s not clear to me how much of this is new, but Jacobs is probably right that it’s getting worse and worse as populations increase. Cities can’t keep up with the taxes they have; federal and state/provincial governments would rather spend the money on items that don’t help the cities, and the next thing you know BART is 40 years old and dying, or Toronto’s subway and transit system can’t keep up with the population either.

Jacobs’ final example is about professional self-policing. She uses the decline of the accounting profession (right after their failure to notice Enron’s problems before it collapsed) as her case example, but arguments could be made for many professions, certainly including the clergy, medicine, and American psychologists. It’s very hard for government to regulate professionals properly, because they don’t understand the profession, so it is ideal for professionals to do it themselves. If they can’t, then the government must, and something important is lost. (Alert readers will notice the relationship to subsidiarity.)

Having tackled these five areas in much more depth than I can cover, Jacobs turns to the question of how to fix these self-reinforcing downward spirals, using as her example housing, which was her first point when dealing with how families are being set up to fail. She runs through the history of how we got into this mess and suggests that with appropriate changes to zoning laws, suburbs can be turned into high-density, productive neighborhoods with solid communities, reducing both the cost of housing and bringing back community.

Jacobs concludes the books with thoughts on the patterns of Dark Ages; how agrarian societies were gutted and lost their culture due to industrialization, how successful societies are in the most danger, because they cling to the ways of their success, and how some societies, like Japan, managed the transition from agrarianism to industrialization, under armed threat, and still maintained their culture and did not fall into a memory hole dark age. I’m not sure she has much in the way of prescription, other than, “Add to what you had,” but perhaps that’s appropriate: Jacobs’ prescription was given in her section on how to turn suburbs into communities and reduce housing prices at the same time, thus aiding the family.

To Jacobs, the small details matter as much as the big, and while every problem is related, each problem needs its own solution. If you want to fix X, you need to really understand the problem. Having spent her life studying cities, housing, and urban economics, Jacobs tackled the problem she knows how to handle and hopes that we can see, in her solution (take the old and turn it into something new, build off what is there) a pattern to use to fix problems in the areas of our own expertise.

As I said at the start, I don’t think this is Jacobs strongest book, and if you’ve read her other works, perhaps a third of it will have you thinking, “Oh, that topic again, my she loves to grind this axe,” but it may be her most timely book, given the times which lay ahead of us. The rest of her work covers principles which should still be useful a thousand years from now, assuming we haven’t become post-human or scavengers in a glowing post-apocalyptic wasteland.

And thinking of a “Dark Ages” as a loss of culture, a loss of learning, technology, and science, focuses our eyes on what we are losing as we move forward and what we might not be able to regain (for example, through offshoring manufacturing, we lose culture and know-how that will be extremely difficult to restore).

Worth your time if the topic interests you.

(I will review one more of Jacobs books, Cities and the Wealth of Nations.)

Note on the book review series. During last year’s fundraiser, I promised 20 book reviews. Clearly, not all will be done this year, but all will be done. The “Construction of Reality” e-book is two-thirds complete (of the text that will not be substantially revised) and that will be released as well.


The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.