Monthly Archives: May 2012

Enemies of Capitalism

May 28, 2012 – 1:25 pm

Capitalism’s biggest political enemies are not the firebrand trade unionists spewing vitriol against the system, but the executives in pin-striped suits extolling the virtues of competitive markets with every breath while attempting to extinguish them with every action.

– Raghuram G. Rajan and Luigi Zingales
Saving Capitalism From the Capitalists (2003)

In this week’s sift:

  • Food-eaters are not a special interest group. Nothing the government does affects you as often and as directly as food policy. So in a democracy, you would expect either that food policy is a perennial campaign issue, or that a pro-consumer consensus takes food out of partisan politics completely. That’s not what has happened.
  • The Sifted Bookshelf: Republic, Lost by Lawrence Lessig. The last three elections have all been calls for sweeping change, and neither party has been able to deliver it. Why doesn’t democracy work any more? And what can be done about it?
  • Tagg, You’re It. Tagg Romney is getting rich on his own, by running an equity capital firm financed by the big-money contributors to his father’s political campaign. See? You’d be rich too if only you were smart enough to think of something like that.
  • Slinging Mud at Clean Energy and other short notes. As wind and solar power become more feasible, attacks from dirty-energy industries become more aggressive. Biden’s moving Memorial Day message. Obama moves black opinion on same-sex marriage. How the fracking industry puts a university imprimatur on its propaganda. And more.
  • Last week’s most popular post. If you can’t hear it from me … got 247 view. The most-clicked link was 6 Ridiculous Lies You Believe About the Founding of America.
By weeklysift | Posted in Weekly summaries | Comments (1)

Food-eaters are not a special interest group

May 28, 2012 – 1:13 pm

You probably don’t think much about government as you push your shopping cart down the aisle of your local supermarket. But nothing the government does affects your life more often and more directly than food policy. What food is available, what it costs, what’s in it, what you can find out about it, and whether it’s safe — the government has a hand in all of that.

Naively, you might expect a democratic government’s food policy to work out one of two ways: Either food would be hotly debated in every election, or our common interest as eaters would produce a completely non-partisan pro-consumer consensus.

Strangely, though, our government has a pro-food-industry policy which is often anti-consumer, and that policy is hardly ever a major issue. Candidates constantly try to make hay out of invisible threats like Iran’s nuclear weapons program or even completely imaginary ones like the death panels of Obamacare. But when was the last time you heard a politician pledge to do something about the growing rate of salmonella infections?

Obesity and policy. Everybody knows that America has a obesity problem. Because of it, we spend more on healthcare and die younger anyway. But to the extent this issue gets public attention at all, it is framed as an individual character problem — we don’t have the discipline to eat carrots instead of carrot cake — rather than as a problem with the way our food is produced and marketed.

But isn’t it strange how the American character degraded so suddenly since the mid-1970s (when the average American was 18 pounds lighter)? Shouldn’t a major cultural change take longer than that?

The media inundates us with stories about how to diet, but seldom touches the government’s role in subsidizing fats and sugars over healthier fruits and vegetables. Here’s the exception that proves the rule: Peter Jennings’ “How to Get Fat Without Really Trying” from 2003. (Here are the ad-free links for parts 1, 2, 3, 4, and 5.) Would I have to go back to 2003 to find a major-network piece about dieting?

Free enterprise? Any threat to our current food system is quickly labeled as an attack on free enterprise: If industry produces something and people want to buy it, what’s the problem? If it’s bad for them, that’s their own fault. They should eat something else.

But the current food system has little to do with free enterprise. Michael Pollan explains:

So much of our food system is the result of policy choices made in Washington. The reason we’re eating from these huge monocultures of corn and soybeans is that that’s the kind of farming that the government has supported, in the form of subsidies, in the form of agricultural research. All the work is going to produce more of  those so-called commodity crops that are the building blocks of fast food.

GMOs. As an example, ask yourself: When did you decide to start eating genetically-modified organisms (GMOs)?  Probably you didn’t. Probably you ate products made from genetically modified corn and soybeans for a long time before you realized that you were eating them at all. Maybe you still don’t realize you eat GMOs; but unless you’re totally obsessive about where your food comes from, you do eat them.

That also is due to government policy: Kellogg’s doesn’t have to tell you whether their corn flakes have GMOs. They like it that way, whether you like it or not.

The basic research behind GMOs was funded by governments; the profit goes to corporations like Monsanto. The risks have been passed on to the consumer without anyone asking the consumer. That’s not how free enterprise is supposed to work.

And who knows? Maybe there are no risks. Maybe eating GMOs is as harmless as Monsanto claims. Maybe GMOs aren’t responsible for systemic effects like the collapse of bee colonies.

None of the claims against GMOs have been proven beyond a reasonable doubt. Nor will they be, most likely, because neither government nor industry has much interest in funding that research. (You can bet the research being done at Beeologics won’t implicate Monsanto, because Monsanto just bought them.)

The Farm Bill is a Food Bill. Your power as a consumer is not going to change the food system until your power as a voter makes it changeable. To change food policy, Pollan says, we need to change the Farm Bill that goes through Congress every five years.

But it isn’t really just a bill for farmers. It really should be called the Food Bill, because it is the rules for the system we all eat by. And those rules are really lousy right now, and they need to be changed.

That 5-year process is almost complete now, so the positive changes that are still possible are minimal. Absent a vocal popular movement, food is a perfect issue for lobbyists: The affected industries have a lot of money to spend, and the general public isn’t paying attention.

We’re not going to raise a vocal popular movement in the next few weeks. Most people don’t care and don’t know why anyone thinks they should care. And that’s what needs to change between now and 2017.

I’m still in the process of raising my own consciousness about this stuff, so I can just point in a general direction. (If you’ve got better advice, make a comment.) I’ve just added Food Politics to the list of blogs I cruise regularly. (Worthwhile recent posts pointed me to the report How Washington went soft on childhood obesity and explained where that supermarket sushi comes from.) Suggestions of other blogs/authors/websites are welcome.

By weeklysift | Posted in Articles | Tagged , , | Comments (17)

The Sifted Bookshelf: Republic, Lost by Lawrence Lessig

May 28, 2012 – 12:51 pm

In each of our last three elections — 2006, 2008, and 2010 — the electorate called for sweeping change. 2006 was a rejection of the Iraq War, which President Bush then escalated and President Obama only recently managed to end. 2008 was a more general rejection of Bush policies, many of which President Obama has continued. 2010 was a sweep in the other direction, in favor of Tea Party candidates who wanted to slash government spending. That also has not happened, except in fairly small, symbolic ways.

The lesson seems clear: Whether voters look right or left for change, they don’t get it. While it’s wrong to say that there’s no difference between the two major parties, either party’s ability to deliver the change it promises is limited.

Democracy doesn’t seem to work any more. But why?

The problem. Lessig’s book Republic, Lost frames the problem brilliantly. Its essence, he claims, is that our laws ban one kind of corruption, but we actually have a different kind. Obvious as that corruption might be to any reasonable observer, it is invisible to the law.

Our laws aim — and mostly succeed — at stopping quid pro quo corruption. Rod Blagojevich, for example. If you’re explicitly selling political favors for money, you’re clearly breaking the law and stand a good chance of getting caught.

If all quid-pro-quo corruption ended tomorrow, though, you’d barely notice the difference, because a completely different kind of corruption dominates our system: dependence corruption. Politicians can’t get re-elected without big contributions from the same special interests that are asking for favors. They do those favors not in exchange for an explicit pay-off, but to stay on the contributors’ good side. Rather than an explicit I’ll-do-this-if-you-do-that, politicians and lobbyists work on maintaining mutually beneficial relationships.

Lessig describes this by borrowing a term from the anthropologists: Washington isn’t an exchange economy, it’s a gift economy. He quotes 20th-century Senator Paul Douglas:

The enticer does not generally pay money directly to the public representative. He tries instead by a series of favors to put the public official under such a feeling of personal obligation that the latter gradually loses his sense of mission to the public and comes to feel that his first loyalties are to his private benefactors and patrons.

Nothing about that is illegal, and the politicians may not even feel corrupt, because over time their points of view align (like needles in a magnetic field) with the special interests that support them. Who can say whether Senator Inhofe blocks action against global warming out of conviction or because the fossil fuel industry supports his campaign? The Senator himself may not know.

But the effect is identical to quid-pro-quo corruption: Politicians come to represent the Funders rather than the People, and government revolves around their needs rather than ours.

Nicholas Kristof had a tremendous example a week ago: Furniture has toxic fire-retardant chemicals in it, not because they will do any good in case of fire, but because three companies get richer. For another example, see the discussions of food policy and of Tagg Romney’s business career elsewhere in today’s Sift.

Solutions. Lessig recognizes that you can’t solve this problem by enacting stricter rules and putting rule-breakers in jail. It’s systemic; the problem isn’t bad people. People with high ideals are either corrupted or flushed out of the system, and the path of their corruption starts with actions that aren’t that different from what politicians are supposed to do: help constituents and then ask for their help at election time.

But once you have the problem framed correctly — politicians have become dependent on the Funders rather than the People — the possible answers are clear: Either you get the big money out of politics completely, or you find some way for the People to become the Funders.

The first path, where you ban both large political contributions to candidates and large “independent” expenditures like Super-PACs or “issue-oriented” spending by organizations like the Chamber of Commerce or big unions, goes against Lessig’s libertarian/anarchist streak. (He considers himself a liberal now, but was a young Reagan delegate to the Republican Convention of 1980. That younger-self voice still resounds inside his head.)

The problem is that (bad as it sounds to the liberal ear) “Money is speech” is not entirely wrong. If you control money too tightly, you’re going to stop some kinds of speech from getting out. Worse, in a pure public-funding scheme, it’s easy to wind up with a system that institutionalizes the two major parties, gives incumbents a built-in advantage, and makes radical change more difficult rather than less.

Instead, Lessig favors changing the incentives rather than banning spending outright. His Grant and Franklin proposal (named after the figures on the $50 and $100 bills) calls for the government to give each voter a voucher (he suggests $50) that they can contribute to congressional campaigns.

Campaigns can only use the vouchers, though, if they are committed to a fairly low cap on additional individual contributions. (He suggests $100.) But there is no cap on overall expenditures — if you can collect a vast war-chest from small donors, good for you.

In this way, government funding would make small-contribution campaigns competitive while still allowing individual contributors to decide where the money goes. But candidates who want to take larger donations and individuals who want to give them are not criminalized.

At a recent League of Women Voters forum in Concord, MA, Lessig stated the goal like this:

We’re aiming for a world where it’s the broad range of Americans who are contributing.

In other words, the Funders become more representative of the People rather than the special interests.

In addition, he wants to limit (but not eliminate) spending by groups that work outside the candidates’ campaigns. Given the current Supreme Court rulings, that will require a constitutional amendment.

Walking While Chewing Gum. Interestingly, he does not focus on an amendment to undo the Citizens United ruling.

The day before Citizens United was decided, our democracy was already broken. Citizens United may have shocked the body, but the body was already cold.

Because it neither bans contributions nor involves the government in setting spending limits or choosing who gets the money, Lessig believes Grant and Franklin gets around recent Supreme Court decisions, and so it doesn’t put all the eggs into one constitutional-amendment basket.

I think this is wise, and that the examples of the Equal Rights Amendment and Human Life Amendment apply. Constitutional amendments are good devices for galvanizing popular movements, but often the real work gets done in legislation that spins out of the movement, even if the amendment itself doesn’t pass.

Bipartisanship. Often to the annoyance of his fellow liberals, Lessig frames the issue in a bipartisan way: Whatever kind of change your movement wants, liberal or conservative, you won’t get it in the current system.

As the desire for reform grows, the Powers That Be will undoubtedly try to keep it split between liberal reform and conservative reform. But Left and Right recognize a common problem: Concentration of power. The Left sees it as corporate power and the Right as government power. But both sides see the concentration and the corrupt practices that maintain it. The challenge is to come together to fix that corruption, without being divided by fights that would be decided better afterwards, on a playing field more like the republic the Founders envisioned.

By weeklysift | Posted in The Sifted Bookshelf | Tagged , | Comments (5)

Tagg, you’re it

May 28, 2012 – 12:32 pm

An April NYT story about Tagg Romney’s private equity firm illustrates two points:

  • How the 1% becomes an entrenched aristocracy.
  • How subtly political corruption works.

Tagg is Mitt’s oldest son. Right after Mitt’s 2008 presidential campaign folded its tent, Tagg, a lawyer, and Romney-for-President finance director Spencer Zwick used the campaign’s rolodex of big-money contributors to start Solamere Capital — which describes itself as

A small number of families with broad networks joined together to aggregate their access to top-tier private equity firms, proprietary deal flow, and unparalleled management resources and expertise.

The strategy page of Solamere’s web site has seven bullet points, six of which begin with the word access. The gist: We know the right people, so we get offered deals that ordinary Joes never hear about.

Only the lawyer had any previous experience in private equity, but between the Romney name, the campaign donor list, and an early $10 million investment from Mitt himself, they have raised $244 million from 64 investors and made $16.8 million in fees.

Zwick was simultaneously raising capital for Solamere and PAC money for Mitt Romney’s Free and Strong America — often from the same people. All perfectly legal. Did any of those investors see the son’s company as a way to get in good with the father, a possible future president? Was anybody looking down the road far enough to anticipate Tagg continuing the Romney political dynasty? We’ll probably never know.

George W. Bush’s pre-politics career is a similar story: Contributors to his father’s campaigns repeatedly opened doors for him and invested in his businesses. Was that corruption? Or just helping out a nice young man from a good family?

It seems not to have been classic quid-pro-quo corruption. Nobody has identified any particular favor that the Bushes, senior or junior, did in exchange for junior’s opportunities. But this is one more example of the Washington gift economy. Lobbyist A doesn’t buy the vote of Congressman B; he just does nice things for B, thereby establishing a lasting relationship in which A and B will continue to be nice to each other without breaking any laws. Win/win.

So far, both Solamere and its investors seem to be winning. The firm has made 20% per year for the last two years. (Investments in general have also been up these last two years, though, so it’s hard to say how impressive that is without knowing more. Solamere might get those returns via a high risk/high reward strategy that will burn them in down years.)

But that raises another question: Did Solamere make money because they were cut in on lucrative deals, again, by people who wanted to get in good with a possible future president? Similar suspicions dogged George W. Bush. (The most controversial incident was when Bush Jr.’s company Harken Energy got a surprising contract from Bahrain while Bush Sr. was president, though a WaPo reporter called implications of influence-peddling  “baseless”.) Questions were also raised about the profit Hillary Clinton made in commodity-trading while her husband was governor. (Like everything else about the Clintons, this was investigated to the Nth degree and no charges were brought.)

But even if you assume that everything in Tagg Romney’s career is above board and 100% honest, this is still a story about how the aristocracy reproduces. Tagg hasn’t inherited any of his parents’ hundreds of millions yet. And maybe he never will. Mitt claims he gave away his inheritance from his millionaire/auto-executive/governor father because he and Ann already had “enough of our own”. (Though he did get through school by selling stock his father had given him.)

Tagg is getting rich “on his own” too. Someday he also may claim to be a self-made man, and dismiss his critics as just “envious” of his “success“.

By weeklysift | Posted in Articles | Tagged , , | Comments (3)

Slinging Mud at Clean Energy and other short notes

May 28, 2012 – 12:02 pm

For years, the worst thing you’d hear about wind, solar, and biofuels was that they were impractical; fun to dream about, but when you got serious about energy you’d come back to fossil fuels. Now, though, as more and more farmers plow around the windmills in their fields and businesses and homeowners see real savings from the solar panels on their roofs, the dirty-energy industries realize they’re going to have to get nastier.

The Guardian recently published an internal memo from the American Traditions Institute (a shadowy non-profit apparently funded by the fossil-fuel industry) planning (as the Checks and Balances Project put it) “a coordinated national disinformation campaign against wind energy”.

Among its main recommendations, the proposal calls for a national PR campaign aimed at causing “subversion in message of industry so that it effectively becomes so bad that no one wants to admit in public they are for it.”

ATI denies that the memo is official — no conspiracy, just an ATI senior fellow acting as a lone gunman — but adds “we would be pleased to be part of any education campaign to inform the public about the problems with expensive, unreliable wind energy”.

Put this together with the efforts to manufacture a scandal out of the Solyndra bankruptcy, the twisting of research to claim that windmills actually cause global warming, and congressional Republicans’ attempt to end the Pentagon’s bio-fuels projects. (Some Democrats on the Senate Armed Services Committee must have sided with Republicans in a closed-session 13-12 vote agreeing with the House.) It’s looking like alternative energy is about to join global warming in the culture wars: If you believe that clean energy is actually clean and provides energy, you must be one of those radical Marxists.

This Memorial Day, I’m proud of Vice President Biden. Speaking to a group of family members of fallen American troops, Biden recalled the day he heard that his wife and daughter had been killed in a car accident.

For the first time in my life I understood how someone could consciously decide to commit suicide. Not because they were deranged, not because they were nuts, but because they’d been to the top of the mountain, and they just knew in their heart that they’d never get there again. …

There really is hope. … I promise you (and you parents as well) when the thought of your son or daughter or your husband or wife brings a smile to your lips before it brings a tear to your eye — it will happen. … The only thing I have more experience than you in is this: I’m telling you, it will come.

On the surface, it looked like President Obama was doing nothing substantial for same-sex marriage: He said he favors it personally, but that it should be a state issue rather than an action item for his administration.

Sometimes, though, that bully-pulpit thing really works. It’s not obvious how much influence Obama’s statement had on the NAACP passing a resolution framing marriage equality as an “equal protection under the law” issue, but between the two of them, they seem to have dramatically shifted the opinion of the African-American community.

Middle Class Economist observes: “Romney to Replace Obamacare with…Essentially Nothing”

Mitt Romney seems to think that criticizing his record as a vulture capitalist is the same as criticizing the free enterprise system.

Grist calls attention to the way the fossil-fuel industry games the academic system. A fracking-is-getting-safer report from the University of Buffalo actually came from somewhere else:

Large chunks of the report appear to be lifted verbatim from a document previously published by three of the report’s four authors for a conservative think tank called the Manhattan Institute. This matters because the university study fails to cite the think tank. In this case, it’s very relevant: The Manhattan Institute receives financial support from oil and gas companies heavily invested in fracking, like ExxonMobil. Instead, the study released this month is stamped only with the University of Buffalo’s academic imprimatur.

Kevin Connor, director of the Public Accountability Initiative, put it bluntly:

The report’s inaccurate and biased analysis and the authors’ conflicts of interest suggest that the University at Buffalo is being used as an academic front for gas industry misinformation, rather than as a venue for independent, informative analysis.

I’ve talked about this kind of thing in more detail before. There needs to be a name for it, preferably something related to money laundering: information laundering? research laundering? I’m still working on it.

By weeklysift | Posted in Short Notes | Tagged | Comments (3)

Market Society

May 21, 2012 – 1:40 pm

A market economy is a tool—a valuable and effective tool—for organizing productive activity. A market society is a way of life in which market values seep into every aspect of human endeavor. It’s a place where social relations are made over in the image of the market. The great missing debate in contemporary politics is about the role and reach of markets. Do we want a market economy, or a market society?

— Michael J. Sandel, “What Isn’t For Sale?” (2012)

In this week’s sift:

  • “If you can’t hear it from me …” — 3 voices that might get through to your conservative friends. A former climate-change denier explains why he stopped denying. A young Christian author tells her elders how their anti-gay focus is causing Christianity to lose her generation. And a successful entrepreneur explains why he isn’t a job-creator, but middle-class consumers are.
  • Citizen of the highest bidder. New FaceBook billionaire Eduardo Saverin didn’t intend to become a symbol when he lowered his tax bill by renouncing his American citizenship. But right and left alike seized on his example to make points about taxes, patriotism, and whether anything is truly priceless.
  • 196 People and other short notes. 196 individuals dominated Super-PAC funding in 2011. Austerity flounders in Europe. Harp seals should get jobs. Easter Island heads have buried bodies. Yet another similarity between the Taliban and Pat Robertson. And more.
  • Book recommendation of the week: The New Religious Intolerance by Martha Nussbaum. For a bona fide University of Chicago philosopher, Nussbaum has a readable, engaging style. This short book looks at the fear-psychology that religious intolerance is based on, briefly presents the major philosophical theories of tolerance, illustrates how those ideas have played out historically, and then brings it all together to look at current anti-Muslim activism in both the U.S. and Europe.
  • Last week’s most popular post. Everybody will support same-sex marriage by 2030 got 381 views. The most-clicked link was the iSideWith.com election quiz.
  • What you can do. From time to time I’ve mentioned the Banyan Project (where I’m on the unpaid Board of Advisors; so is Dan Gillmor, author of We the Media). My friend Tom Stites has come up with a business plan for launching local news co-ops, whose loyalty will be to their reader/owners rather than to the advertisers. Banyan has reached the pilot-project stage, and is looking for start-up money through the journalism crowd-source funding site spot.us. Spot.us works by an interesting model: It uses crowd-sourcing to fund journalism that the for-profit media won’t do. You pledge money via your credit card, and that money is committed to spot.us projects in general. But your spot.us credits only go to the proposal if it meets its funding goal within the specified time period. (So your money doesn’t vanish into projects that never get off the ground. Otherwise you retain spot.us credits to invest in another project.) The Banyan proposal speaks for itself. You can decide for yourself whether it’s the kind of thing you want to support. I’ll vouch for Tom Stites (who used to be my editor at UU World) and for spot.us itself. Neither is a scam. I made a pledge this morning.
By weeklysift | Posted in Weekly summaries | Comments (4)

“If you can’t hear it from me …” — 3 voices that might get through to your conservative friends

May 21, 2012 – 1:23 pm

If you’re a liberal who has any conservative friends or relatives, you know how well defended they are against anything you might say. Any fact you know is wrong. Any source you might quote is biased: Academia is biased (except for institutes funded by the Koch Brothers). Major newspapers are biased (except for the Washington Times). TV news is biased (except for Fox). Government agencies are biased (unless a Republican president has had their reports vetted by a political appointee) … and so on.

Here are three points of view that might sneak under the conservative radar, because of where they come from and how they’re pitched.

Now let’s look at those one-by-one.

BYU’s Barry Bickmore on climate-change denial. Bickmore’s talk isn’t about climate change. It’s about “How to Avoid the Truth about Climate Change“. (If you don’t have time to watch, scroll down the comments to Anna Haynes’ notes on the talk.) In other words: What techniques make it possible for honest and intelligent people to deny something that virtually all the experts in the field believe?

Bickmore knows why people don’t believe in climate change, because he used to agree with them on two points: There’s lot’s of scientific controversy about global warming, and the is theory based solely on complex computer models which are easy to screw up.

When he looked into the issue more closely, though, Bickmore discovered that each of those points is wrong: Around 97% of actively publishing climate scientists believe that human activity is causing the planet to get hotter, and their opinion is verified by a variety of techniques that may not give exactly the same projections, but do agree within the bounds of the published error estimates.

He wondered: Why didn’t I already know that? What led to my confusion?

First, there were those “thousands of scientists doubt global warming” articles. Bickford explains the strategy that generates them: First, expand the field of “experts” to include a lot of people who aren’t really experts at all, and second, report a raw number that sounds big rather than doing a poll and getting a percentage.

So the Oregon Petition (claiming there is “no convincing scientific evidence” of human-caused global warming) claims 30,000 signers. But signers don’t have to be experts or even scientists. They need only have a bachelors degree, not necessarily in a relevant field.

So why is this impressive to people — 30,000 scientists? … People think about scientists as “Well, you know science, so why don’t you tell me?” Right? But in reality we’re much more specialized than that. If you have cancer, you don’t go to your podiatrist. You go to your oncologist.

Ditto for the 900 peer-reviewed journal articles skeptical of climate change. It sounds like a big number, but in what universe of journals? Apparently, a universe big enough to include journals that publish “research” articles on dog astrology and UFO abductions.

Bickford continues, similarly destroying the “What about Galileo?” and “We don’t need experts” objections, leading to this conclusion:

There’s always room for doubt. But there has to be a point — if we’re going to make any attempt at all at trying to be objective — that we have to admit that we’re trying too hard [to avoid the truth]. And I think that for people who are on the side I was a few years ago, I think we should admit that we’ve reached that point.

Rachel Held Evans on the damage Christianity is suffering from the culture wars. After reviewing some research showing how young adults (even those raised in Christian households and even young church-goers) view Christianity’s anti-gay image negatively and are shamed by what they see as un-Christ-like hostility towards their gay and lesbian friends, Evans gives her personal observations. When she speaks at Christian colleges, she finds that “every single student I have spoken with believes that the Church has mishandled its response to homosexuality.“

On the evening when North Carolina’s anti-gay Amendment One was passing by a wide margin, Evans saw a pattern in her Twitter feed:

Christians over 40 were celebrating. Christians under 40 were mourning. Reading through the comments, the same thought kept returning to my mind as occurred to me when I first saw that [pro-amendment] Billy Graham ad:

You’re losing us.

I’ve said it a million times, and I’ll say it again…(though I’m starting to think that no one is listening):

My generation is tired of the culture wars.

Back when gays were in the closet, you could make them out to be any kind of hobgoblins you wanted. All the scary talk about a “gay agenda” depends on that image: sinister conspirators out to destroy everything good and decent in the world.

But to folks under 40, gays and lesbians are their friends from high school. They decorated homecoming floats together and washed cars side-by-side to raise money to send the French Club to Paris.

We know too many wonderful people from the LGBT community to consider homosexuality a mere “issue.” These are people, and they are our friends. When they tell us that something hurts them, we listen.

Evans says her generation wants to “stop waging war and start washing feet”. Translating for those who don’t speak Christian: They want to help people rather than beat them down, and practice their religion humbly rather than be authoritarian ideologues. If they can’t do that inside the church, she says, they’ll do it somewhere else.

Nick Hanauer. This guy was an early investor in Amazon, and then made several other piles of money by starting little-fish companies that he eventually sold to bigger fish like Microsoft. In other words: not a communist, not a fifth-generation Rockefeller who has forgotten where his trust fund came from, not an academic economist who has never made or sold anything.

Hanauer’s 6-minute TED talk addresses one question: Who are the job creators? You might expect him to answer, “People like me.” But he doesn’t.

If there was no one around who could afford to buy what we had to sell, all those companies [I helped start] and all those jobs would have evaporated. That’s why I can say with confidence that rich people don’t create jobs. Nor do businesses, large or small.

Jobs are a consequence of a circle-of-life-like feedback loop between customers and businesses. And only consumers can set in motion this virtuous cycle of increasing demand and hiring. In this sense, an ordinary consumer is more of a job creator than a capitalist like me.

… Anyone who’s ever run a business knows that hiring more people is a course of last resort for capitalists. It’s what we do if and only if rising consumer demand requires it.

After displaying graphs of rising income and falling tax rates for the rich since 1980, he comments:

If it was true that lower taxes for the rich and more wealth for the wealthy led to job creation, today we would be drowning in jobs.

But when the middle class thrives, businesses grow and everyone does better. So he concludes:

In a capitalistic economy, the true job creators are middle-class consumers. And taxing the rich to make investments that make the middle class grow and thrive, is the single shrewdest thing we can do for the middle class, for the poor, and for the rich.

At first, Hanauer’s talk didn’t appear on the TED website — not all of them do — leading National Journal to bill the talk as “too hot for TED“. This prompted a TED official to post “the real story“, claiming that the audience gave the talk mediocre ratings:

a non-story about a talk not being chosen, because we believed we had better ones, somehow got turned into a scandal about censorship.

Even that spin, though, implies that TED and its audience are not very representative. Once the YouTube got out, it quickly went viral and has been seen (so far) by over 400,000 people.

By weeklysift | Posted in Articles | Tagged , , | Comments (11)

Citizen of the highest bidder

May 21, 2012 – 12:49 pm

When a story is being spun wildly in more than one direction, it’s important to start with facts: One of Facebook’s initial investors, Eduardo Saverin, has renounced his American citizenship in favor of Singapore, where he had already been living as an American ex-patriate. Because Singapore has no capital gains tax, making the switch before Friday’s Facebook IPO may have saved Saverin many millions of dollars.

Apparently he made the switch in September, but it wasn’t widely known until his name appeared on a government ex-citizens list on April 30. That made Saverin the central figure in stories that Right and Left had been writing before they knew he was involved.

The Right’s story. The growing numbers of citizenship renunciations (up about fourfold from the Bush administration average, but still just 1800 in 2011) was already being trumpeted as cause for alarm on April 23 by the Wall Street Journal’s William McGurn. As far as I know, no one has checked who all these 1800 are or asked them why they don’t want to be Americans any more, but McGurn is sure they are rich people fleeing oppressive American taxes.

when it comes to the global inefficiencies of our tax code, these 1,800 ex-Americans are canaries in the coal mine. Our tax code—and especially the onerous reporting requirements that come with it—is turning U.S. citizens into economic lepers.

His conclusion is that the U.S. needs to become “more competitive” by not taxing money that American citizens make overseas. This is related to another popular conservative talking point, but the U.S. should declare a tax holiday to allow American corporations to repatriate profits made overseas either tax-free or at a reduced rate.

On May 8, Bruce Bartlett addressed the ex-citizen issue in the NYT, doubting that any large number of the renunciations were due to taxes, but agreeing that there is a problem. Again, Saverin did not come up.

Saverin got attached to the story sometime in the next few days. Bloomberg was on it by May 11. And then things started to get crazy: Forbes’ John Tamny declared Saverin “an American hero“.

If you’re having trouble follow that logic — how exactly does declaring that you’re not an American any more make you an American hero? —  Tamny explains:

Saverin’s decision will starve the feds of revenue they would almost certainly waste, it will force a rethink of a tax code that penalizes income and investment success, and the unconsumed dollars kept from the hands of government will reach today’s and tomorrow’s businesses. Let’s raise a glass to Eduardo Saverin. He’s a true American hero.

Tamny hopes this will lead us to see the folly of the income tax, abolish the IRS, and institute a consumption tax instead (because apparently you get out of a recession by spending less and saving more, contrary to anything those stupid economists might tell you).

And if the tax is regressive or hits low incomes at the same percentage as high ones, all the better.

And if the world loses faith in the U.S. government’s ability to meet its obligations, that’s good too.

That Saverin has chosen to avoid supporting the Leviathan is a heroic act that will hopefully make investors a little bit more gun-shy about investing in U.S. debt.

Because every patriot wants to see his government default, I guess.

The Left’s story. For the Left, Saverin put a face on the Unpatriotic Rich, who (if they are loyal to anything beyond themselves) identify with their class rather than their country. The Nation’s Ilse Hogue:

[Saverin] has made himself the poster child for the callous class of 1 percenters who are all too happy to use national resources to enrich themselves, and then skate, or cry foul, when asked to pay their fair share.

Saverin’s wealthy Brazilian family moved to Miami when 13-year-old Eduardo’s name turned up on a list of kidnap-for-ransom targets. America kept him safe, and then let him into Harvard, which was generous enough to assign him a roommate with a $100-billion idea. (I wonder who he’d have roomed with at University of Singapore.)

I’m sure Saverin will be eternally grateful for those and many other favors America did him. But gratitude is a mere sentiment, and who thinks sentiment is worth tens of millions? (Did I mention that Singapore has no capital gains tax?)

A quick segue will take you to bankers who spout libertarian rhetoric about food stamps but demand that there be no strings attached to their bailout, or industrialists who want government subsidies to help them move American jobs to China. The rich only care about America if they can make money off of it. If not, bye-bye.

Of course, switching your loyalty for money is not new — it’s what Benedict Arnold did. We used to have a name for such people: traitors.

That’s the sentiment behind Senator Schumer’s proposal to levy a punitive capital gains tax on citizenship-renouncing Americans.

To sum up the liberal point: If we’re going to continue being the kind of country where people can get rich — a country with roads and schools and courts and police and a viable currency and salmonella-free food and a communications system and medical care and sidewalks clear of emaciated corpses — rich people are going to have to pay taxes. If they regard that as an imposition rather than a duty, they’re just proving how unpatriotic they are.

Saverin may illustrate that story, but we were telling it already.

Market society. I think a more interesting conversation comes from another pre-Saverin story: Michael J. Sandel’s “What Isn’t for Sale?” from the April Atlantic.

The most fateful change that unfolded during the past three decades was not an increase in greed. It was the reach of markets, and of market values, into spheres of life traditionally governed by nonmarket norms. To contend with this condition, we need to do more than inveigh against greed; we need to have a public debate about where markets belong—and where they don’t.

There’s a pretty broad consensus that America should have a market economy. In other words: The price of potatoes and beachfront property and replacement car batteries should be determined by supply and demand rather than set by a bureaucrat. A century ago, intelligent people could disagree about whether a centrally planned economy might work better. But after the bad example of the Soviet Union, we’ll stick with markets.

The problem, Sandel says, is that more and more we have not just a market economy, but a market society, a place where everything is for sale and everything is judged by market values. The problem with selling, say, transplantable kidneys, isn’t whether the price will be determined by markets or regulated by the government; the problem is selling them at all.

Some things just shouldn’t be part of the market economy. But what things?

Let’s suppose that Saverin didn’t just fall in love with Singapore one day, but that his accountant calculated that Singapore offered him a better deal than America. Is it wrong for him to take that deal? Why, exactly? What is the proper boundary between things that ought to be for sale and things that ought not?

Sandel sees that boundary sliding and thinks we need to have a serious conversation about how far it will go. Should first class passengers have a faster TSA line or not? Should rich prisoners be able to buy a cell upgrade or not? Should you be able to hire a surrogate womb to carry your fetus or not? Should parentless babies be auctioned off or not?

Consider privatized juvenile prisons. A decade or two ago, no one would even have suggested such a thing. A decade or two before that, no one would have suggested pushing sugary drinks or fatty sandwichs in public high schools in exchange for funding from Coke or Burger King. Of course you’ve always needed money to run a school or a prison, but schools and prisons weren’t about money. Today, some of them are.

Moving from a drafted citizen army to a professional army was a step towards market society. Moving from a professional public army to a contracted private army would be another. How far should we go?

Once we named parks and arenas for heroes. Now we auction naming rights off to the highest bidder. What values get reinforced every time we go to AT&T Park or Sports Authority Field (both of which I had to correct after remembering their “old” names of Pac Bell and Invesco)?

Economists often assume that markets are inert, that they do not affect the goods being exchanged. But this is untrue. Markets leave their mark. Sometimes, market values crowd out nonmarket values worth caring about.

When we decide that certain goods may be bought and sold, we decide, at least implicitly, that it is appropriate to treat them as commodities, as instruments of profit and use. But not all goods are properly valued in this way.

Is citizenship one of those goods? Why or why not?

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196 People and other short notes

May 21, 2012 – 11:33 am

79% of Super-Pac money in 2011 came from 196 people.

Grist collects climate-change-denying quotes from all the likely Republican VP candidates. My favorite is by Virginia Governor Bob McDonald:

Too often in the debate it’s missed that the Earth has been warmer in the past

That’s like: “I don’t have to worry about falling off the Empire State Building. I’ve been at street level before and it was fine.”

Say, Europe, how’s that austerity thing working out?

Well, at least they didn’t try something like Obama’s stimulus. Imagine what a disaster that would have been.

An NUI Galway economics professor sums up the current proposal that Ireland double down on its austerity policy:

Take a country at the bottom of a depression. Force it to run budget cuts and tax increases year after year after year. Force this same policy on its neighbours and trading partners. Run this into the foreseeable future and hope it results in stability, confidence and recovery. This is emphatically not the safe option. This is a dangerous experiment, completely without historical precedent.

Why the Right really hates Obama: They don’t want to be this cynical about America, and it annoys them that Left doesn’t have to be.

Pat Robertson tells a viewer to destroy a friend’s Buddha statue. His resemblance to the Taliban gets stronger and stronger.

So you know how much money the Koch brothers spent to influence the 2010 elections? About $50 million more than anybody thought. It was funneled through a string of front groups with names like the American Future Fund and Americans for Job Security.

Another great article from Cracked: 6 Ridiculous Lies You Believe About the Founding of America.

Two respected political scientists have written a book about their research, which shows that political polarization and gridlock is overwhelming the fault of the Republicans. Their article in the Washington Post went viral. How much discussion did that garner on the Sunday major-network talk shows? None.

Easter Island heads have underground bodies. Who knew?

A new way to describe privilege to people who can’t hear the word privilege: In the Game of Life, white straight male is the lowest-difficulty setting.

By weeklysift | Posted in Short Notes | Comments (3)

Well-prepared Ground

May 14, 2012 – 12:44 pm

We used to think that revolutions are the cause of change. Actually it is the other way around: change prepares the ground for revolution

– Eric Hoffer,  The Temper of  Our Time (1967)

In this week’s sift:

  • Everybody will support gay marriage by 2030. Support for gay rights has the most inexorable kind of momentum: generational. President Obama’s “evolution” may look risky now, but as gay-rights supporters come of age and opponents die, even the most homophobic politicians will have to capitulate — just like segregationist politicians did in the 1970s.
  • 77 Cents, part 2: What if secretaries became programmers? In a miniature economy with only 30 occupations, eliminating the difference between male-dominated occupations and female-dominated ones only knocks 3 cents off the pay gap. Equalizing pay within the 30 occupations knocks 12 cents off.
  • Does Romney’s bullying matter? and other short notes. The important thing isn’t what Mitt Romney did half a century ago; it’s how well his reaction today fits the story his critics tell about him. What Mom really wanted. LBJ’s greatest moment. Maurice Sendak’s last interview. Why does college cost so much? And more.
  • Last week’s most popular post. It was a slow week. Where the Jobs Are and other short notes was the most popular post with 140 views.
  • This week’s challenge. The Wisconsin recall campaign is on: a rematch of Walker vs. Barrett. Between now and June 5, this the biggest race going, and it will have national implications. You can contribute to the Barrett campaign here.
By weeklysift | Posted in Weekly summaries | Comments (0)