The Yearly Sift

We are seduced into thinking that the right to choose from a menu is the essence of liberty, but the powerful are those who set the agenda, not those who choose from the alternatives it offers.

– — Benjamin Barber, Consumed (2007)

all the Sift quotes of 2010 are collected here

This is the 49th and last Sift of 2010. Time to look back at where we’ve been.

In this year’s Sifts:

  • The Theme of the Year: Concentration of Wealth. I never set out to explore a theme over the course of a year, but it happens on its own. This year, a number of Sfits ended up being about the concentration of wealth — that it’s happening, how it’s happening, and what problems it’s causing.
  • Update on Last Year’s Theme: Corporatism. The battle between corporations and humans continued this year. The Citizens United decision helped make 2010 a good year to be a corporation.
  • Secondary theme: Propaganda. By now I expect Sift readers to know that large swaths of the population believe things that are flat-out false. But why do they believe them? How do they believe them? I kept coming back to those questions all year long.
  • The Sifted Books of 2010. There were a lot of them this year. All the links are collected here.
  • Short Notes. The Sift’s biggest hit in 2010. My biggest mistake. And a couple of current notes: Obama moves towards embracing indefinite detention, a consequence of DADT repeal crosses my FaceBook news feed, and Barney Frank runs rings around a hostile reporter.


The Theme of the Year: Concentration of Wealth

In 2010 there were two economies. If you were a Wall Street banker, happy days were here again. Even if you were just an investor, things were pretty good — the Dow is up nearly 1000 points this year, almost 10%. But if you were unemployed, it was a different story. Close to half of the unemployed — 6.3 million of them — have been out of work for more than 6 months.

That’s just the most recent step in a journey America has been on since late in the Carter administration: The rich have been getting richer, but everyone else has been working harder and producing more for little extra money — and sometimes less. The so-called “Bush boom” was the first time since the Depression that median household income dropped over a complete business cycle.

A lot of  people, including me, have talking about that for years. But in September a bunch of recent data got popularized in Timothy Noah’s series The Great Divergence on Slate and in the newly published Winner-Take-All Politics by Jacob Hacker and Paul Pierson.

The interesting point in this data is that the “vanishing middle class” phenomenon is only the part of the problem most of us are in a position to see. If you have the data, you realize that the super-rich are pulling away from everyone else, not just from the poor. If the world were a village of 1000 people, one guy would have made 1/8th of the money in 2008, nearly five times the share he got in 1973. (Increasingly that guy — or the super-rich class he represents — lives in a different world from the rest of us, as Robert Frank chronicled in Richistan.)

When you realize that hyper-concentration of wealth is the essence of the phenomenon, then most of the standard explanations fall away: It’s not global competition or education or immigration or automation, because none of that separates the top tenth of a percent from the top percent. Competition from illegal aliens isn’t preventing millionaires from keeping up with billionaires.

Hacker and Pierson lay the blame at the feet of the government: Republican and Democratic administrations alike have favored capital over labor, finance over industry, corporations over consumers, lenders over borrowers, fine-print-writers over the naive — in short, the very rich over everybody else.

Thomas Geoghagen’s Were You Born on the Wrong Continent? demonstrates that it doesn’t have to be that way. Europe is subject to all the same economic winds we are, but countries like Germany and France and Sweden have built much more egalitarian societies, which Geoghagen argues are better places for ordinary people to live.

Typically, concentration-of-wealth is argued as a moral issue: Why should some people be allowed to waste the world’s resources on ridiculous luxury while others can’t get necessities? (This is the point of view of The Moral Underground by Lisa Dodson. She tells the stories of middle-managers who — recognizing the injustice of it all — break or otherwise circumvent the rules to make life livable for the working poor. Conservatives are well defended against this moral argument, as I explain in How to Speak Conservative: Class Warfare.)

But Robert Reich’s Aftershock argues that concentrated wealth is bad in purely economic terms: In a healthy economy, mass production and mass consumption go together; money cycles naturally because people who make stuff can afford to buy stuff. (Similar ideas are in Paul Krugman’s The Conscience of a Liberal.)

But when wealth gets too concentrated, money piles up in the accounts of people who don’t spend it. At first they might invest it in new production, which is good, but even that slows down once it becomes clear that demand isn’t keeping up. (Why expand a factory if you can’t sell what it’s making now?) Instead, the surplus of the rich gets drawn into speculative bubbles, as they look for investments that don’t depend on increased consumption. (I explain what’s wrong with the contrary view — that rich people create jobs — in Where Jobs Come From. These days, it’s customers who create jobs, not investors.)

That low-demand, underemployed, bubble-driven economy is typical of both the last decade and the 1920s, the previous time wealth was over-concentrated. The 20s ended in the Great Depression, and the “Bush boom” nearly had the same result. Unless we can start de-concentrating wealth — as happened accidentally due to World War II — Reich makes the case that future business cycles will be similar: speculative bubbles followed by collapse.

Finally, we get to the moral case libertarians make for capitalism and the so-called free market: that the market gives people what they deserve, and that changing the market result is some form of theft. The best refutation of this idea is the book Unjust Deserts by Gar Alperovitz and Lew Daly, which I reviewed in April.

Alperovitz and Daly start with the question of why today’s economy is so much more productive than, say, America in 1800. It seems unlikely that the billionaires of today are hundreds of times harder working or smarter than the businessmen of 1800. The more sensible explanation is that society as a whole is benefitting from the accumulation of knowledge and social capital. The inventions of people alive today make a difference, but a much bigger difference is that we’ve gotten better at using things invented or discovered generations ago. (For example, we make really good wheels and fires these days.)

In short, our advantage in productivity is largely a collective inheritance from our ancestors, so diffuse that it’s not even attributable to individual bloodlines. What happens under capitalism, though, is that our collective inheritance benefits a relatively small number of people. What looks like individual earning is largely a usurpation of an inheritance that rightfully ought to belong to everybody. (We should all be getting our share of royalties on the Wheel. I made a similar argument last year in a talk called Who Owns the World?)


Another financial theme: I looked at a number of explanations of how the real-estate bubble grew and then popped, most notably The Big Short by Michael Lewis and ECONned by Yves Smith.


In April, AFL-CIO President Richard Trumka pulled a bunch of these themes together in a talk at the Kennedy School of Government.



Update on Last Year’s Theme: Corporatism

Last December was the first time I noticed an annual theme in the Weekly Sift. Over the course of 2009, I had become more and more radicalized about the opposition between corporations and human beings.

2010 started with the Citizens United decision, which I characterized as Judicial Activism: The Supreme Court Invents New Corporate Rights. That week I was also inspired to write The Book of Corporation, a re-telling of Genesis in which God creates the Eden Corporation, which in turn hires the Serpent as its CEO. Eventually the Babel Project succeeds and God is ousted by the Serpent.

In the Citizens United decision, the Court’s conservative majority anticipated that transparency would allow voters to evaluate the sources of campaign advertising, but that didn’t happen. Instead, Republicans managed to block the DISCLOSE Act in the Senate. Consequently, the fall elections saw a flood of anonymous money, nearly all of it spent on negative ads against Democrats. I covered this in Quotations of Chairman Anonymous.

The other big corporate/human conflict story of the year was the West Virginia mine disaster. Having reviewed Doubt is Their Product last year (followed by Merchants of Doubt this year), I saw the miners’ deaths differently than the mainstream media:

This is the current level of corporate ethics: If they can make money by killing their workers or customers, they will. It’s not just a few bad apples; it’s standard operating procedure. … Current law is more concerned with protecting the mine owners from frivolous claims than protecting the lives of miners.

That’s still true. A new mine safety bill was proposed after the miners’ deaths, but Republicans managed to defeat it.

Another place where corporate lobbying worked against the public interest this year was with regard to net neutrality:

The point here is to create many new choke-points where toll booths can be set up. That — and not innovation and competition — is how big corporations make big money.

I finally summed up my picture of corporations a few weeks ago in Corporations are Sociopaths. I don’t intend that to be a rhetorical insult; I propose it as a diagnosis. Like sociopaths, corporations can be useful and entertaining if you meet them in circumstances where they can’t benefit by harming you. But if you look at the diagnostic criteria for sociopathy, they correspond to traits of corporate governance.



Secondary Theme: Propaganda

In a way, propaganda is always a theme of the Sift. Nearly every week I’m pointing out some widely publicized or widely believed “facts” that have no basis in reality: that the stimulus bill gave favorable treatment to districts represented by Democrats, for example, or that Obama quadrupled the deficit Bush left him. Occasionally I do a whole set of Disinformation Watch notes to list false things currently passing for truth.

But (having noticed how often new fake facts appear to replace the ones we manage to knock down) this year I tried to delve deeper into the mechanisms of the propaganda that surrounds us. Who believes it? Why? Who promotes it? How? And what are the false narratives that support and are supported by all these fake facts?

Part of the mechanism of propaganda is the cooperation of the media, or at least its submission. That was the theme of Tortured Coverage: A Harvard study documented how major newspapers like the New York Times and the Washington Post stopped calling waterboarding torture when the Bush administration told them not to. The term became “contentious” rather than “objective” because the administration chose to contend against it.

Another level of mechanism is the network of right-wing think tanks and institutes that have been established by corporate and billionaire money. It is an entire system of apparent “experts” whose connections to their sponsors are rarely traced by the mainstream media, but whose opinions always fall in line with the interests of their sponsors. (This was the mechanism of Propaganda Lesson, in which the bogus scandal about stimulus funding was the result of “research” done by a “scholar” at the Manhattan Institute, funded predominantly by the billionaire Koch brothers.)

Similarly, large-scale corporate and billionaire money funded the Tea Party movement, but funded it through mechanisms that allowed the mainstream media to describe the movement as “grass roots”. In this way, disgruntled McCain voters who had never liked Obama were put forward as “independents” who had been “shocked” into opposition by the “radical” Obama administration. (What Money Buys)

The ultimate conservative infrastructure is the right-wing media, epitomized by Fox News, but embracing talk radio, newspapers like the Washington Times, and other outlets. This media empire has reached the point where Senate candidates like Sharron Angle in Nevada could ignore the mainstream media entirely, refusing to answer any questions not posed by sympathetic voices. Fortunately, no major candidate who adopted such a strategy won a competitive race this year. But if Sarah Palin runs for president in 2012, we may see this strategy tested on a national scale. (The Private Campaign)

At the narrative level, I looked at the image of “government spending” which is always “out of control” and “wasteful”. This narrative is so well established by now that no facts are needed to support it. And so in the fall campaign right-wing candidates were able to run on a “cut spending” message without identifying any actual spending cuts other than the most trivial. They were pledged to cut “waste”, which the narrative tells us is everywhere. In an article titled simply Spending, I outlined how the supposedly “untouchable” parts of the budget were already enough to have caused a deficit in 2010.

In The Thing Behind the Thing I outlined three sets of largely unconscious assumptions underlying Tea Party rhetoric: that the authority of the Law comes in some way from God or Nature rather than from a social contract; that the punishment of transgressions is a good thing in and of itself, not requiring any justification in terms of its results; and that “the People” (as in “the People need to take this country back”) are straight white Christians.

Propaganda Lessons from the Religious Right was an attempt to get at some of the deep assumptions that make outlandish conspiracy theories believable to those on the religious Right: Belief in a Devil makes it unnecessary to provide a motive for the conspiracy, because it can literally be “demonized”. (How else to explain those terrorists who “hate progress and freedom and choice and culture and music and laughter”?) Also, a template like “reverse discrimination” can be promoted over decades, so that when an individual issue is identified as reverse discrimination, the pieces of the template snap into place without needing evidence to establish them. The lesson is that good framing doesn’t just happen because you coin a clever slogan. Templates of thought can take decades to build up.

Why Democrats Are Always on Defense makes a similar point in a different way. Here the phenomenon to be explained is: Democrats think they must “move to the Right” when they lose or fear losing, while Republicans never have to move to the Left, no matter how badly they get beaten. The piece is a re-introduction of George Lakoff’s notion of frames, and explains how a poll-driven approach to an issue can change the poll it is based on. (When liberals take what polls say is a “centrist” position, they can shift the public debate to the Right, moving the center away from the position they just took.)

Finally, last week I took a look at one of the deep conservative frames: class warfare. The phrase evokes an entire mythology on the Right, which liberals who argue against it are largely unaware of.



The Sifted Books of 2010

I went wild reviewing books this year: 16 of them in all. Some have already been mentioned in the previous sections: Aftershock by Robert Reich, Were You Born on the Wrong Continent? by Thomas Geoghagan, Winner-Take-All Politics by Jacob Hacker and Paul Pierson, ECONned by Yves Smith, The Big Short by Michael Lewis, Unjust Deserts by Gar Alperovitz and Lew Daly, Richistan by Robert Frank, The Conscience of a Liberal by Paul Krugman, The Moral Underground by Lisa Dodson, and Merchants of Doubt by David Michaels.

Other Sifted books of 2010 were:

Washington Rules by Andrew Bacevich. Surprisingly, this is the only military or foreign-policy book that I reviewed in 2010. Bacevich is a retired colonel who has begun to doubt the necessity or wisdom of America policing the world. This book retells American military history since World War II in an attempt to explain how perpetual war became acceptable to the public, in spite of the fact that our wars seldom proceed as expected or achieve what was desired.

The Living Constitution by David Strauss. Strauss explains the common-law method of interpreting the Constitution, and presents it as a practical alternative to the better-known-but-impractical theory of originalism. At least we don’t have to try to imagine what the Founders would have thought about the Internet.

Democracy, Inc. by Sheldon Wolin. Wolin outlines what he calls “managed democracy”, in which the people don’t actually rule, but only ratify the decisions of their leaders.

The Long Descent by John Michael Greer. Greer discusses the end of civilization as we know it and stays calm about it. How exactly does the trip to Hell in a handbasket go? And what should you do when you get there?

Methland by Nick Reding. Reding interprets the crystal meth problem as a symptom of larger problems: the collapse of the social contract and the inability of government to do sensible things that would interfere with corporate profits. The result is a threat to the survival of small towns in America.

Storms of My Grandchildren by James Hansen. A NASA climate historian explains why global warming is even more serious than most people think.



Short Notes

The Sift article that made the biggest splash this year was My Reservations about the Market Economy. I used Open Table, a web site for making restaurant reservations, as an example of how the market economy rewards gatekeepers, not producers.

A regular Sift reader posted a link on Reddit, which for some reason took off. (Go thou and do likewise.) The Sift got 5000 hits that week (rather than a more normal 200-400).


My biggest mistake in 2010 was in refusing to believe for most of the year that the generic-ballot polls showing a Republican landslide in the House would predict the election. In the Senate, things turned out more-or-less as I expected: Republicans gained, but didn’t win the Senate, because the crazy candidates they nominated (Sharron Angle, Christine O’Donnell) couldn’t live up to the public’s image of a “generic Republican”.

Many House battles, on the other hand, never got beyond the generic race, and Democrats were unable to make hay out of the wild positions the Republicans were taking or had taken. But the main thing my crystal ball failed to pick up was that the Democrats would completely refuse to defend their actions. I expected a real debate about the health-care law, and pre-election votes that would tie the Republicans to unpopular pro-wealth positions. None of that happened.


In current news: According to Pro Publica, the Obama administration is drawing up an executive order that will formalize a process of indefinite detention for suspected terrorists.

I was against this when W wanted to do it, and I’m against it now. No matter how conscientious an executive-branch process you set up, everybody with any power in it takes orders from the President. You can’t deprive somebody of liberty forever one the say-so of one guy.

A lot of the claims people make about “the Constitution” are partisan. (Just about all the Tea Party folks, for example, started worrying about the Constitution on Inauguration Day, some time around noon.) But this is a real constitutional issue, and a good test of whether somebody really cares about the Constitution. You can’t seriously worry about whether the Constitution allows Congress to make you eat your vegetables and not worry about whether it allows the President to lock you up and throw away the key.


It was one of those innocuous things that come across my FaceBook news feed all the time. One of my friends updated her status to say she’s in a relationship. One of my friends in the Navy.

Oh.

And speaking of the DADT repeal, Barney Frank totally eats the lunch of a reporter from the right-wing CNS network when he springs a gotcha question about gay and straight soldiers showering together.

The Weekly Sift appears every Monday afternoon. If you would like to receive it by email, write to WeeklySift at gmail.com. Or keep track of the Sift by following the Sift’s Facebook page.

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Comments

  • macduff  On December 27, 2010 at 6:54 pm

    speaking of class warefare; check out the comments to this article: America in Decline: Why Germans Think We're Insane
    A look at our empire in decline through the eyes of the European media.

    http://www.alternet.org/story/149324/america_in_decline:_why_germans_think_we're_insane/ or http://bit.ly/eoWvIf

  • Lance  On January 4, 2011 at 5:17 pm

    Doug writes: I expected a real debate about the health-care law, and pre-election votes that would tie the Republicans to unpopular pro-wealth positions. None of that happened.

    Hi Doug, This refusal by the Democratic leadership to hold the Republicans feet to the fire and engage them completely baffles me. Do you have any insight into why the Dems are so skittish about this?

  • Doug Muder  On January 5, 2011 at 8:46 am

    The Democrats' lack of fighting spirit baffles me too. Before Congress recessed for the fall campaign, Rachel Maddow did a segment talking about how popular raising the minimum wage was, and how it would bring the working poor out to vote without alienating the middle class. Democrats could either pass an increase or campaign against the Republicans blocking it. It was a no-lose proposition. But nobody took her up on it. Typical.

    Several explanations have been proposed, including the behind-the-scenes power of the big donors. But none of them really make sense to me.

    I often think of the scene in “1776” where Adams gets frustrated with all the amendments trying to tone down the Declaration of Independence. “By God,” he says, “this is a revolution. We've got to offend somebody!”

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