The horizon is not so far as we can see, but as far as we can imagine

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Happy Independence Day

US Constitution by KJD

I sometimes wonder if the world would have been a better place of the rebels had lost their war against Britain. Be clear, I’m not saying it would have been, I’m just wondering. In general terms, the released settler colonies turned out reasonably well; Britain got rid of slavery before the US and with less violence, though I’m guessing an attempt to ban it in the US would have caused a second rebellion, and so on.

On the other hand, it’s unquestionable that Britain did try and keep colonies from industrializing up until quite late. Mind you, during the Victorian period this became less of an issue, and, indeed, British money and resources were key to industrializing a number of countries, including Canada and the United States, though Canada never did fully industrialize. That, however, can probably be put down more to its low population and large land mass with associated resources than to anything malign.

In any case, I wish my American readers a happy Independence day. Your country has done some good in the world, and great evil, but that’s true of many nation. The last few decades have been hard for you, and by you, and it is my wish for America that you treat both yourselves and other better. The two are related: One of the reasons Americans are mean to others is that they are mean to themselves; and the reverse is true.

May you be well, and the cause of the wellness of others.

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.

How Jefferson and Hamilton Designed the Republic for Labor

(This article is by Tony Wikrent)

What is our system of government supposed to be? A republic. But a republic is so ill-defined that even John Adams famously wrote “the word republic, as it is used, may signify anything, everything, or nothing.”

According to historian Gordon Wood:

The sacrifice of individual interests to the greater good of the whole formed the essence of republicanism and comprehended for Americans the idealistic goal of their Revolution…. To eighteenth-century American and European radicals alike, living in a world of monarchies, it seemed only too obvious that the great deficiency of existing governments was precisely their sacrificing of the public good to the private greed of small ruling groups. [1]

Just as important: Are there principles and policies of political economy that are supposed to distinguish a republic from other forms of government, i.e., monarchies, oligarchies, plutocracies, dictatorships, etc.?

Since it became clear that President Obama was unwilling to directly confront the power of Wall Street, I have read deeply trying to answer these questions for myself.

Contrary to what many on the left believe, the US Constitution is NOT solely designed to protect the rich. Our system of government definitely has been twisted to that end, but I do not believe that was the intent of Hamilton, the founder most responsible for laying the foundation of the US economy. (And remember, Washington used Treasury Secretary Hamilton basically as a prime minister, and agreed with or acceded to literally all of Hamilton’s economic beliefs and policies. This was in no small part a function of their shared experience at the pinnacle of American military command during the Revolutionary War, when they both identified Britain’s major strategic advantage to be Britain’s ability to raise funds and float debt through its financial system.)

Culturally, the most important aspect of a republic is supposed to be equality, especially economic equality. This is of course contrary to the view that the government was set up solely to protect property and the accumulation thereof. It was not – at least, not by Hamilton.

Economic equality is basic to a republic because, the idea was, no person can be fully independent and be a good citizen if their livelihood depends to some extent or other on another person’s largess, benevolence, or tolerance. This was the basis of the fight between the Hamiltonians and the Jeffersonians. Jefferson believed that only farmers who owned their own land were independent enough to honestly exercise the duties of citizenship. Jefferson wanted to delay the advent of industrialization and subservient factory labor as long as possible. This is why Jefferson acceded to the Louisiana Purchase, which he would otherwise have opposed on the grounds that the federal government has no express power to acquire such territory. [2] With the Louisiana Purchase, yeoman squeezed out of the established eastern seaboard would be able to cross the mountains, and buy, steal, or somehow take the land of the Native Americans and set themselves up as independent farmers.

Hamilton, by contrast, understood that the economy could not be frozen in time and remain entirely agrarian. Industrialization HAD to not only proceed, but be encouraged [3], for the US to have any chance of resisting the intrigues and hostility of the European powers – which remained committed to eradicating the American experiment in self-government until the US Civil War. (France and Spain landed troops in Mexico and Caribbean at the beginning of the war; the Mexican republic was eliminated and Maximilian, younger brother of Austrian emperor Francis Joseph I, was installed as puppet emperor; and the British were preparing to land troops in Canada in 1862, but were deterred by the pro-US street fighting in London and elsewhere which was led by Garibaldi’s revolutionaries.)

Hamilton’s great insight was that economic development depended entirely on improving the productive powers of labor. This meant the development of science and technology, and the spread of machinery to replace muscle power. The correct view of Hamilton must be precise: It was not that Hamilton sought to encourage and protect wealth, but to encourage and protect the CREATION of wealth. (Read Section II, Subsection 2, “As to an extension of the use of Machinery…” in Hamilton’s December 1791 Report to Congress on the Subject of Manufactures, if you want something to read today.)

This is where Marxist analysis fails catastrophically. Yes, much of economic history is that of elites accumulating wealth through exploitation, fraud, and violence. BUT: How was that wealth, which is stolen, created in the first place? Thorstein Veblen, and his discussions of industrial organization versus business organization, are far more useful in understanding the COMPLETE economic story, not just the exploitation side of it. I believe that once you understand this, you can understand why Elon Musk is much more useful to society than Peter Thiel. Musk and Thiel are both rich: Should we therefore oppose and denigrate both because they are rich, and we dislike our system of government, which has been mutated and diminished in order to protect the rich? No. I admire Musk because he has used his PayPal lode to create new wealth (which takes the corporate forms of Tesla, SpaceX, and Solar City), while Thiel has used his PayPal lode to fund libertarian ideas which are fundamentally hostile to what America is supposed to be. In Veblen’s analysis, Musk is an industrialist, while Thiel is merely a businessman.

In the nineteenth century, it was generally understood that the system established by Hamilton was in opposition to the “classical economics” of Adam Smith, David Ricardo, Thomas Malthus, and the other apologists for the death and destruction wrought on entire countries by the British East India Co. and the British empire. In the 1820s, Henry Clay coined the term “American system” to distinguish it from the British system. Michael Hudson has pointed out that, in addition to these two systems of political economy, a third was developed in the nineteenth century: Marxism. [4]

It is easy to be confused by American history, because at the same time that the American system was being built and practiced, the British system was competing with it for control of domestic economy and polity. To the extent that people today mistakenly believe that the American economy was founded on the ideas of Adam Smith — it most emphatically was not, as Hamilton explicitly rejected the ideas of Smith — the British system is winning. Michael Hudson has written at least two excellent overviews of this fight within the US between the American and British systems. [5] For now, the simplified version is that the British system was dominant in the slave South, and fought for free trade in opposition to the American system’s protective tariffs.

Because Hamilton’s American system sees economic strength flowing from increases in the productive power of labor, labor naturally has a favored place in the system. Or, at least, it is not ignored and even denigrated as it is in the British system, which likes to focus more on such things as monetary aggregates, and physical hoardings of “wealth” such as gold or land. What made the New Deal work (and it should be understood that the GI Bill was one of the most important legal enactments of the New Deal, along with financial regulation and Social Security) was that it allowed labor to achieve parity with, if not superiority over, capital, represented by the financial system.

The development of the Eurodollar market in the 1960s allowed US banks to begin sidestepping New Deal regulations. This was augmented, and eventually dominated, by increasing flows of hot money from illegal narcotics and organized crime. In 1976, the pound sterling crisis allowed US financial interests, acting through the International Monetary Fund, to impose economic austerity on Britain, terminating the Labor Party’s policy focus on full employment. In the US, this shift in policy priority from full employment was imposed by the new Chairman of the Federal Reserve, Paul Volcker, who  pushed “interest rates up to record highs in order to break inflation and undermine the wage militancy of American workers…. This restoration of class power, underpinning the neoliberal political project, relied upon high interest rates, recession and market liberalization.” [6]

The slow destruction of the Democratic Party since the Atari Democrats (see Matt Stoller’s recent article on “How Democrats Killed Their Populist Soul”) and then Bill Clinton, is because Democratic Party elites have come to accept the neo-liberal fantasy that finance is more important than labor.


[1] The Creation of the American Republic, 1776-1787, by Gordon S. Wood, University of North Carolina Press, Chapel Hill, NC, 1969, page 53.

In February 1866, when Massachusetts Senator Charles Sumner delivered an epic speech urging the passage of the Equal Rights Amendment, his direct observations on republicanism covered twelve pages (pages 176 to 188). Sumner’s is as good a summary of what a republic is supposed to be as any you are going to find. It consists of carefully selected quotes from many of the founding fathers. In the 1850s, Senator Sumner was such a persistent and powerful critic of Southern slave holders that in May 1856, South Carolina Congressman Preston Brooks nearly killed Sumner on the floor of the Senate by beating him over the head with a cane. Brooks continued to beat Sumner even after Sumner had lost consciousness. Other Senators were prevented from stopping the attack by Virginia Representative Henry A. Edmundson and South Carolina Representative Laurence Keitt, who brandished a pistol. Sumner required three years to recover before he could return to his Senate seat, and suffered chronic, debilitating pain for the rest of his life. Two weeks after the attack, Ralph Waldo Emerson wrote: “I do not see how a barbarous community and a civilized community can constitute one state. I think we must get rid of slavery, or we must get rid of freedom.”

[2] Jefferson’s original instructions to his envoys to Paris contained no mention whatsoever of acquiring land for the United States, because their mission was to secure for Americans the right of free passage down the Mississippi River. It was the French who proposed the idea to sell the territory, motivated by the need to raise monies for their war with England.

[3] In one of the most remarkable passages in Hamilton’s December 1791 Report to Congress on the Subject of Manufactures, Section VII, Hamilton writes that “the apprehension of failing in new attempts” requires the government to take an active role in promoting and supporting the attempts of private entrepreneurs at “overcoming the obstacles inseparable from first experiments.”

[4] Michael Hudson on the American School of Political Economy

[5] Hudson, America’s Protectionist Takeoff 1815-1914: The Neglected American School of Political Economy, ISLET, 2010, which I quote extensively in HAWB 1791 – Alexander Hamilton rejected Adam Smith. Also by Hudson: Simon Patten on Public Infrastructure and Economic Rent Capture. Another very useful book is James L. Huston, Securing the Fruits of Labor: The American Concept of Wealth Distribution, 1765-1900, Louisiana State University Press, 1998.

[6] Jeremy Green, American Power and the Making of British Capitalism, 04 June, 2013. Green is referring to Sam Gindin and Leo Panitch, The Making of Global Capitalism: The Political Economy of American Empire, Verso, 2012.

Bush would have endorsed Obama if asked

From the FT:

“The venue was the Oval Office. A group of British dignitaries, including Gordon Brown, were paying a visit. It was at the height of the 2008 presidential election campaign, not long after Bush publicly endorsed John McCain as his successor… Trying to be even-handed and polite, the Brits said something diplomatic about McCain’s campaign, expecting Bush to express some warm words of support for the Republican candidate… ‘I probably won’t even vote for the guy,’ Bush told the group, according to two people present. ‘I had to endorse him. But I’d have endorsed Obama if they’d asked me.'”

And why not, it’s not hyperbole at all to say that Obama is Bush’s third term.  He has embraced Bush’s wars, Bush’s approach to executive power, Bush’s civil liberties doctrines and Bush’s economic doctrines.  The differences exist, but they are not significant.  In almost every way that matters, Obama took Bush’s constitutional order and institutionalized it, giving it a bipartisan imprimatur.

The Freedom Mosque

I’ve avoided this controversy because it’s so profoundly stupid, but since it won’t die and go away, let’s put it in terms even knuckle-draggers can understand.

Freedom of religion is a fundamental American value.

If you are against a mosque near the World Trade Center you are against freedom of religion.  That means you are anti-American.  You are a person who does not believe in the freedoms many Americans fought and died for.

In short, you’re anti-American scum.  If you don’t believe in freedom of religion, you aren’t an American worthy of the name.

Helping “Terrorists” Engage In Anything Non-Terroristic Can Get You Locked up for 15 Years

You can’t make up bad decisions like this.  Note that this is a 6-3 decision, not a close one:

The law barring material support was first adopted in 1996 and strengthened by the USA Patriot Act adopted by Congress right after the September 11 attacks. It was amended again in 2004.

The law bars knowingly providing any service, training, expert advice or assistance to any foreign organization designated by the U.S. State Department as terrorist.

The law, which carries a penalty of up to 15 years in prison, does not require any proof the defendant intended to further any act of terrorism or violence by the foreign group.

Nor does it require any proof that the organization is a terrorist organization, since a State Department declaration is an administrative act.

The Humanitarian Law Project in Los Angeles had previously provided human rights advocacy training to the Kurdistan Workers Party, known as the PKK, and the main Kurdish political party in Turkey.

The Humanitarian Law group and others sued in an effort to renew support for what they described as lawful, nonviolent activities overseas.

“The Supreme Court has ruled that human rights advocates, providing training and assistance in the nonviolent resolution of disputes, can be prosecuted as terrorists,” said Georgetown University law professor David Cole, who argued the case.

“In the name of fighting terrorism, the court has said that the First Amendment permits Congress to make it a crime to work for peace and human rights. That is wrong,” Cole said.

Got that?  Trying to help an organization do non violent things will get you locked up.

More to the point, as noted earlier, this is clearly a violation of the right of association and the right for free speech.  You get locked up based on who you associate with, not what you’ve actually done, and the decision who you can associate with is a purely administrative act at the sole discretion of the President of the United States.  Any organization the State Department declares a terrorist organization you cannot associate with, period.

This is of a piece with other policies which allow the President to assassinate an American citizen without a trial, to lock people up indefinitely without a trial and so on.  When they President does deign to allow a trial evidence obtained from torture is admissable, and the if the President doesn’t want the accused to know who their accuser is or to see the evidence against them, so be it.

This is, I should emphasize, just a continuation of a trend, a punctuation mark by the Supreme Court in a long line of decisions which have gutted the first amendment, the right to face one’s accuser, the right to due process and so on.  If I were to point to a very bad law that many folks supported who shouldn’t have it would be the RICO statutes, which likewise made simple association a crime.  Since it was “bad people” doing the association (the Mafia) folks didn’t care.

Since it’s bad people, “terrorists”, this time, too many people won’t care.

But if the rights of those you despise aren’t protected, than neither are yours.

Paul Craig Roberts Speaks For Me

When he notes the US is a police state:

Siddiqui has never been charged with any terrorism-related offense. A British journalist, hearing her piercing screams as she was being tortured, disclosed her presence. An embarrassed U.S. government responded to the disclosure by sending Siddiqui to the U.S. for trial on the trumped-up charge that while a captive, she grabbed a U.S. soldier’s rifle and fired two shots attempting to shoot him. The charge apparently originated as a U.S. soldier’s excuse for shooting Dr. Siddiqui twice in the stomach, resulting in her near death.

On Feb. 4, Dr. Siddiqui was convicted by a New York jury for attempted murder. The only evidence presented against her was the charge itself and an unsubstantiated claim that she had once taken a pistol-firing course at an American firing range. No evidence was presented of her fingerprints on the rifle that this frail and broken 100-pound woman had allegedly seized from an American soldier. No evidence was presented that a weapon was fired, no bullets, no shell casings, no bullet holes. Just an accusation.

Wikipedia has this to say about the trial: “The trial took an unusual turn when an FBI official asserted that the fingerprints taken from the rifle, which was purportedly used by Aafia to shoot at the U.S. interrogators, did not match hers.”

An ignorant and bigoted American jury convicted her for being a Muslim. This is the kind of “justice” that always results when the state hypes fear and demonizes a group.

Siddiqui was an American citizen, by the way.  Seized and held in a secret prison, tortured and raped.  This is your America.

Your America.

Anyone can be next. Indeed, on Feb. 3 Dennis Blair, director of national intelligence told the House Intelligence Committee that it was now “defined policy” that the U.S. government can murder its own citizens on the sole basis of someone in the government’s judgment that an American is a threat. No arrest, no trial, no conviction, just execution on suspicion of being a threat.

This shows how far the police state has advanced. A presidential appointee in the Obama administration tells an important committee of Congress that the executive branch has decided that it can murder American citizens abroad if it thinks they are a threat….

In no previous death of a U.S. citizen by the hands of the U.S. government has the government claimed the right to kill Americans without arrest, trial, and conviction of a capital crime.

Go read the whole thing.

And, if there is a God, may Barack Obama and Dennis Blair face him along with George Bush, because no, the difference isn’t enough to matter.

Certainly not to Siddiqui.

As Jesus said “as you do to these, the least of my children, you do to me”. I wonder how Jesus is taking being raped, bombed and tortured so regularly by Obama and Bush.

As for me, I won’t pretend that I don’t despise Obama almost as much as I despised Bush.  Maybe more, since there’s evidence that George Bush is a brain damaged psyhcopath (he is known to have tortured animals as a child, one of the cardinal signs and recordings of him speaking in the early 90s show fluent speech without “Bushisms”).

Obama should know better, but if he does, he doesn’t care enough to do anything about it, to the contrary, he keeps making it worse.

What Dave Said

Actually, this is already the primary strategy of a huge part of US industry (telecom, IP, insurance, pharma, among others), but it’s about to get worse:

The Supreme Court ruling allowing corporations to use their vast resources to directly influence the political process shifts the business playing field away from competing in the marketplace with products and services, to purchasing government/legal/reguatory advantages, subsidies and monopolies.

The marketplace is now irrelevant – only company size matters. It is just more efficient to beat your competitors by buying legislation than it is by competing in the marketplace. When you can purchase $1 billion in tax breaks, subsidies, mandates, contracts, whatever by spending a few million on candidates/influence, etc. it just makes more sense to do so. The return on investment is just so much higher than building factories, spending on research, paying employees, and other tedious, time-consuming, capital-intensive work.

For some time companies have recognized that the rewards from lobbying outperform the rewards from competing in the marketplace, and this ruling just amplifies that. This 2006 New York Times article, Google Joins the Lobbying Herd, discussed how Google felt it had “no choice but to get into the arena” to start “spreading its lobbying dollars” around to politicians and quotes Lauren Maddox, a lobbyist for Google, saying the “policy process is an extension of the market battlefield.” This supreme court ruling just clinches this shift away from markets.

This has been part of my fundamental critique of the US economy for years. This is why the US is losing its technological lead in area after area, because innovating is less certain than buying government.

Thing is, foreign companies don’t have this “advantage” so have to compete the old fashioned way.  And they will continue to eat American companies lunch.  As the US gets weaker, and becomes less able to force foreign companies to obey American laws, this strategy will become less and less viable, especially as American citizens will also be losing buying power.

This sort of thing is why I now see the odds of the US turning itself around in the next generation as being miniscule.

Parliamentary Politics in a non Parliamentary System

Yglesias begins to get it:

We’re suffering from an incoherent institutional set-up in the senate. You can have a system in which a defeated minority still gets a share of governing authority and participates constructively in the victorious majority’s governing agenda, shaping policy around the margins in ways more to their liking. Or you can have a system in which a defeated minority rejects the majority’s governing agenda out of hand, seeks opening for attack, and hopes that failure on the part of the majority will bring them to power. But right now we have both simultaneously. It’s a system in which the minority benefits if the government fails, and the minority has the power to ensure failure. It’s insane, and it needs to be changed.

I’ve been explaining this for going on five years.  The first time I tried to explain parliamentary politics to Americans was after the 2004 election (sadly, gone with BOP’s archives).  The most recent was in July, where I pointed out that without the possibility of snap elections, the US form is particularly virulent:

Now in parliamentary systems a majority government just does what it likes, and the opposition reflexively opposes but can’t stop anything.  In a minority government, the opposition can’t just stop everything because if it defeats the government on the wrong vote it’ll cause an election and you don’t want one of those till you’re sure you’ll win and the governing party won’t get a majority.  So the government can still get through a fair bit of its agenda, even if it doesn’t have a parliamentary majority.

In the US there’s no threat of a snap election, and the opposition can often hold up significant legislation, especially in a case like the current one where the governing party has unreliable members (something that’s very rare in most parliamentary systems).

So the Republicans have taken parliamentary opposition one step further.  Instead of just opposing everything but letting it pass, then running against it, they figure why not oppose everything in the hopes of weakening policy to the point where it doesn’t work?  The stimulus bill was compromised to the point where it didn’t do the necessary job.  The global warming bill likewise, and the health care bill appears headed for the same fate.

Lousy policy leads to lousy outcomes. Lousy outcomes make the population unhappy, and less likely to vote the incumbents back in.

What the Republicans are doing makes perfect sense from an electoral point of view.  Voters are not going to primarily blame Republicans for Democrats failing to govern effectively.

This is something that many Democrats, especially older ones who came from a more genteel era, or those who some sort of strange genetic disposition to compromise (Obama) don’t seem to get.  But Republicans get it in their limbic system.

Learn it.  Live it.

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