What Free Market?

Do you think it’s hard to get your child into Harvard? Try getting a new product onto the shelf of a big chain of stores in the United States.

— Barry Lynn, Cornered: The New Monopoly Capitalism
and the Economics of Destruction (2010)

 

This week everybody was talking about the Olympics

but you knew that.

… and Chick-fil-A and Mitt Romney’s foreign tour

I covered Chick-fil-A in Is That Sandwich Political?, but let’s deal with Romney’s trip here.

Romney’s tour of Britain, Israel, and Poland was designed to add foreign-policy heft to his image, but the British leg didn’t work out.

That pretty well covers it. Prime Minister David Cameron is a British conservative, but Romney exasperated him to the point where he stuck this knife in:

Of course it’s easier if you hold an Olympic Games in the middle of nowhere.

Some anonymous Romney adviser really did talk about the “Anglo-Saxon heritage” Obama can’t appreciate, which is even a step beyond calling him “foreign“. Why not just say, “White people shouldn’t vote for Obama because he’s black” and get it over with?

These stumbles happen abroad for the same reason they happen at home: Romney’s lack of empathy gives him a tin ear. Slate’s Fred Kaplan points out that Romney’s business experience differs greatly from previous generations of businessmen-turned-statesmen, who actually built things and sold them, and so had to learn to deal with workers and customers. But Bain’s brand of financial manipulation

is not the sort of enterprise that requires even the most elementary understanding of diplomacy, courtesy, or sensitivity to other people’s values, lives, or perceptions.

Instead, it

breed[s] an insularity, a sense of entitlement, a disposition to view all the world’s entities through a single prism and to appraise them along a single scale.

Growing up as the rich son of the governor probably didn’t help either.

I agree with Kevin Drum’s analysis the foreign-policy speech that kicked Romney’s tour off: He’s trying to cast a striking image without saying anything. What little remains beyond the I-will-be-strong-where-Obama-is-weak rhetoric is either vague, outside the president’s power, or exactly what Obama is already doing.

… but I also wrote about monopolies

  • Monopoly’s role in inequality. In my previous discussions of rising inequality, I’ve always felt like a piece of the puzzle was missing. I think I found it.

and you might also be interested in …

The death of first-female-astronaut Sally Ride put a face on the injustice of the Defense of Marriage Act. Most of us learned that Ride was a lesbian only when her obituary named Tam O’Shaughnessy as her 27-year domestic partner. Under DOMA, O’Shaughnessy will not receive the federal survivor benefits that a male husband would get.

The guy who all but invented the too-big-to-fail bank has changed his mind. Former Citicorp honcho Sandy Weill now says

What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, have banks do something that’s not going to risk the taxpayer dollars, that’s not too big to fail.

In short, let’s just pretend the last two decades never happened.

How does a bill become law? Not the way it used to.

The NYT op-ed Israel’s Settlers Are Here to Stay by settler Dani Dayan underlines just how intractable the Israel/Palestine conflict is. Dayan presents a we’re-right-they’re-wrong history of the conflict and says a two-state solution is unworkable because

Our presence in all of Judea and Samaria — not just in the so-called settlement blocs — is an irreversible fact. Trying to stop settlement expansion is futile

If a two-state solution is out, then what happens to the Palestinians? I can only see three options:

  • ethnic cleansing: Perhaps Israel could use the Spanish Expulsion of 1492 as a model.
  • democratic annexation: Palestinians become citizens of a democratic Greater Israel, which might not have a Jewish majority. (This is sometimes called the one-state solution.)
  • status quo: Palestinians remain a subject population ruled by Israel.

Dayan opts for the status quo, which he thinks is “immeasurably better than any other feasible alternative”. It could be improved, but only if Palestinians would accept the irreversibility of their subjugation and stop resisting.

Checkpoints are a necessity only if terror exists; otherwise, there should be full freedom of movement.

If Dayan speaks for some sizable and committed bloc of Israelis — and the NYT apparently thinks he does — then I can’t see this conflict resolving for at least another generation.

He may or may not be a reliable witness, but a Florida Republican is blowing the whistle on voter-ID laws, or, as he puts it “keeping blacks from voting”. And Harold Meyerson asks: What if it works? If Romney wins, and his margin in key states is clearly the result of voter suppression, are we all just going to go along?

Pastor Rick Warren appeared to blame the Aurora shooting on evolutionists, tweeting:

When students are taught they are no different from animals, they act like it.

It’s weird how people demonize animals, who aren’t nearly as nasty as humans. How do you think this young mountain gorilla (being comforted by a park ranger in the Congo after his parents were killed by poachers) feels about human morality?

The next installment of the Nuns vs. the Inquisition saga is about to start. In our last episode, board members of the Leadership Conference of Women Religious went to Rome, where Grand Inquisitor Levada said they should regard Rome appointing a man to watch over them as “an invitation to obedience”. (I think I would have issued a counter-invitation for Levada to do something impossible with his anatomy, but I guess that’s why I’m not a nun.)

This week the LCWR will meet in St. Louis to discuss

at least six options that range from submitting graciously to the takeover to forming a new organization independent of Vatican control, as well other possible courses of action that lie between those poles.

When Republicans liked the Arab Spring rebellions, they gave the credit to Bush’s freedom agenda. Now that they’ve decided they don’t like the Arab Spring, they claim it was caused by Obama abandoning Bush’s freedom agenda.

I don’t understand why everyone isn’t saying the obvious things Elizabeth Warren says: Our infrastructure is crumbling, people need jobs, and the government can borrow money at rates lower than inflation. What’s the downside?

It might even save money in the long run: If, say, we buried our power lines, we wouldn’t lose all that productivity every time the weather turned bad.

The WaPo debunks Five myths about why the South seceded. The truth is pretty simple: The southern states seceded to defend slavery; they said so themselves in their secession statements. And then Lincoln went to war to preserve the Union, not to free the slaves.

To understand why articles like this are necessary, read the comments.

President Obama isn’t saying the kind of outrageous things the Romney campaign wants to run against, so they’re editing tape to create gaffes. Ezra Klein covers this issue seriously,

And Lewis Black approaches it humorously, but Mike Luckovich captures what’s going on in one image:

Finally, ABC’s Jake Tapper has solved the mystery of the Churchill bust. Will the Romney campaign stop telling the story now that we know there’s nothing going on, or is that too much to ask?

July 30, 2012 – 2:04 pm Categories: Short Notes, Weekly summaries | Comments (2)

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Is That Sandwich Political?

Last week, when I was first tempted to write about Chick-fil-A, it was just another story about a religious-right one-percenter shooting off his mouth. Now, everyone from the Muppets to Sarah Palin is involved, and that waffle fry in your hand has become a weapon in the culture wars. Your gang at the office can’t go out to lunch without first debating politics and religion.

How did we get here?

For decades, Chick-fil-A has been a fast-food chain run by the founding Cathy family, a clan of conservative Christians. The Christian influence was subtle (no hellfire-and-brimstone pamphlets at the door) but real (closed on Sundays, even in food courts).

CfA has long given away a substantial portion of its profits. In recent years, a lot of that money has gone to “pro-family” or “anti-gay” organizations. This wasn’t secret, but it flew under the radar of most Chick-fil-A customers.

Then in June, CfA’s president and son-of-the-founder Dan Cathy went on the Ken Coleman syndicated radio show and said:

I think we’re inviting God’s judgment on our nation when we shake our fist at him and say we know better than you as to what constitutes a marriage. And I pray God’s mercy on our generation that has such a prideful, arrogant attitude that thinks we would have the audacity to redefine what marriage is all about.

[Cathy’s interview runs from 21:30 to 33:30. The religious/political part of the interview starts at 30:00. The quote above is at 31:18.]

The Human Rights Campaign responded with a pledge that went right up to the edge of calling for a boycott:

While I respect Mr. Cathy’s right to his personal opinions, I strongly urge Chick-fil-A to stop using money from customers as part of a larger effort to oppress LGBT Americans. Until then, I will have to reconsider whether I spend my money at Chick-fil-A.

(Other people have since called for a boycott.)

Then the Muppets weighed in:

The Jim Henson Company has celebrated and embraced diversity and inclusiveness for over fifty years and we have notified Chick-fil-A that we do not wish to partner with them on any future endeavors.

CfA struck back by not waiting for “future endeavors”. It pulled Muppet toys out of its meals, recalled toys already distributed, and implied that Muppet toys are unsafe.

And then … oh, I’ll let Gizmodo describe it:

Instead of owning up to the fact that The Jim Henson Company stopped doing business with them because they’re overrun with bigots, the chicken sandwich company appears to have made fake Facebook accounts to defend its honor on the social network.

(CfA has since denied creating social-network sock-puppets, but it’s clear somebody did.)

Then Mike Huckabee declared this Wednesday to be Chick-fil-A Appreciation Day and asked all right-thinking people to eat there. Rick Santorum, Mr. Man-on-Dog himself, agreed.

Not to be outdone by conservative extremists, Boston Mayor Mike Menino wrote a letter to Cathy:

I urge you to back out of your plans to locate [a Chick-fil-A franchise] in Boston.

And the Boston Herald quoted Menino saying:

If they need licenses in the city, it will be very difficult — unless they open up their policies.

A Chicago alderman threatened to block a Chick-fil-A there, and Chicago Mayor Emmanuel and San Francisco Mayor Lee have also been sabre-rattling, though I haven’t seen any specific threats from them.

I wish I could just take the pro-gay side, but nobody is looking particularly good right now. Let me try to sort out what I can and can’t support.

First, I support the freedom of everybody involved:

  • Dan Cathy has the right to say any stupid or bigoted thing he wants.
  • Radio shows have the right to put Cathy on the air.
  • The Cathy family can spend their profits however they please.
  • Any individual personally disgusted by Cathy’s opinions or any company that believes associating with CfA is bad for business has the right to stop dealing with CfA.
  • Cathy’s critics have the right to state their opinions in public. Calling Cathy a bigot does not in any way infringe on his First Amendment rights. When you start making moral judgments in public, you open yourself up to public moral judgment. That’s a free exchange of opinions, not intolerance.

But politicians should use their power carefully. The American Prospect’s Scott Lemieux has it right:

If Chick-fil-A had a history of denying service to people based on their sexual orientation, or discriminating against LGBT employees or job applicants, [Alderman] Moreno’s actions would be entirely justified. But … Cathy’s comments [by themselves] are not a legitimate reason to deny Chick-fil-A a permit.

I mean, do you really want Chicago aldermen vetting the political opinions of business owners? And if you do, what about aldermen in Salt Lake City or Dallas?

Specific stories of CfA discriminating are hard to find, though there is one lawsuit charging that discrimination against women. (A former manager claims she was fired because her boss thought she should be at home with her kids.)

I also want to point out that Ken Coleman’s defense of Cathy on CNN (that he is a good Christian man who is not hateful) has not been borne out by CfA’s actions. Vindictively lying about the safety of Muppet toys and creating fake Facebook identities to spread those lies is not my idea of good Christian behavior.

But none of that answers the really important question: What should you do? Can you still eat at Chick-fil-A in good conscience?

Well, not on Wednesday. After the Huckabee/Santorum nonsense, anybody at a CfA on Wednesday appears to endorse Cathy’s anti-gay opinions.

Beyond that, part of me resents the whole issue: Does everything have to be political? Can’t I just eat lunch?

But another part of me recognizes that it will be a long time before I can walk into a Chick-fil-A without remembering that its president called me “prideful” and “arrogant” on the radio (even though I’d never done anything to him), or that the company intentionally spread a vile rumor to get revenge on the Muppets. And it will be even longer before I can hand over my money without wondering how much of it will be used to take rights away from people I care about.* I expect that will darken my Chick-fil-A experience for some while, probably enough to keep me from going at all.

If that looks like a boycott, well, it’s not a very militant one.

So in general, I’m against balkanizing the economy into liberal and conservative sectors. If you really like Chick-fil-A’s food, I don’t think you should let anybody guilt you out of it (after Wednesday). But if Cathy has left a taste in your mouth that a super-sized Coke won’t wash away, don’t let anybody guilt you about that either.

You feel what you feel, so follow your heart. And enjoy your lunch, wherever you eat.

* I should probably mention that I have personal friends who benefit from same-sex marriage. Last weekend a lesbian couple was showing my wife and I their wedding pictures, which are as adorable as anybody’s. Paging through that album, the whole idea that their marriage is a threat to our marriage, to public morality, or to “the future of humanity” — it just seemed nutty.

July 30, 2012 – 12:58 pm Categories: Articles | Comments (14)

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Monopoly’s Role in Inequality

For several years I’ve been dipping into the subject of rising inequality, usually in book reviews like this one of Hacker and Pierson’s Winner-Take-All Politics. But all along a mystery has been nagging at me, and I think I’m finally getting to the bottom of it.

Inequality. The basic story is simple: Inequality in the United States has risen dramatically since the mid-70s. And the effect gets more extreme the farther out you go. It isn’t just that the top 10% is pulling away from the bottom 90%. The top .01% is pulling away from the top .1% even faster. The multi-billionaires are pulling away from the mere billionaires. (If you want graphs and numbers, look here.)

Obviously you can’t account for all that with education or competition from China. Maybe those factors explain why unskilled workers are having such a tough time, but they say little about the millionaire/billionaire divergence. Ditto for tax rates. Sure, the rich pay a much lower tax rate than they used to, but the explosive growth in their net worth is much bigger than tax rates can account for, and the mega-rich don’t get a significantly better tax deal than the ordinary rich. (Plus, tax cuts start with Reagan in 1982, not the mid-70s.)

Clearly something has happened to the structure of the market, but I couldn’t figure out exactly what.

Monopoly. Barry Lynn’s book Cornered: The New Monopoly Capitalism and the Economics of Destruction looks like the puzzle piece I was missing. Lynn claims our economy is now full of monopolies and near-monopolies — businesses big enough to dictate terms to their customers and/or suppliers.

In the mid-20th-century industrial economy, you got mega-rich by imitating Henry Ford: You figured out how to make things people wanted for a price they wanted to pay. Now you get mega-rich by building choke-points between producers and consumers.

WalMart exemplifies the current paradigm. WalMart makes nothing, but it is big enough to dictate how its suppliers will make things and what prices they can charge. In many of its rural markets, WalMart also dictates what people can buy. If your product isn’t on WalMart’s shelves, it’s not for sale. (WalMart also drives consolidation elsewhere in the economy, which produces big fees for Wall Street. For example, Procter & Gamble bought Gillette largely to improve its negotiating position with WalMart. In slightly different ways, Amazon and Google are trying to duplicate the WalMart model in the online economy. If your book isn’t on Amazon, it’s not for sale.)

Many near-monopolies are less visible than WalMart or Amazon. Lynn begins his book with the story of a pet-food recall, which suddenly made it obvious that many “competing” brands of pet food were actually all packed in the same factory. And Ford lobbied for the government bailout of “competitors” GM and Chrysler because it feared their common suppliers would go bankrupt. Many markets, Lynn says, are hydras: The countless brands on the shelves are just heads that spring from a common body.

The ends against the middle. Reading Lynn, I’m getting a clearer vision of how markets work. The purest form of market is what you can see at any big farmer’s market: Lots of consumers dealing directly with lots of producers. It’s rare that anybody gets really rich from these interactions, but many small producers have a chance to make a living and become independent.

Obviously the global economy has to be more complicated than that. But markets are created by rules, and the rules can be structured to favor either the ends (producers and consumers) or the middle. Producers and consumers benefit from transparent markets, where the rules force middlemen to treat everyone more-or-less the same.

But markets can also be structured to give middlemen as much freedom as possible. The most profitable way to use that freedom is to create choke-points where a toll can be extracted or one producer can be played off against another. In an opaque market, the way to get rich is not to produce things, but to build middleman power that allows you to dictate terms up and down the supply chain. (I don’t have space to go into it here, but keeping the internet transparent is what net neutrality is about, and why Comcast doesn’t like it.)

In a nutshell, what has happened since the mid-70s is that deregulation of old markets and under-regulation of new markets has made our economy more opaque. The people in the best position to take advantage of this are the very rich. Meanwhile, workers and small businessmen — the middle-class people who actually make stuff and deliver services — lose out. In the short term consumers may win or lose, depending on whether the middlemen’s advantage is in raising or lowering prices. But in the long run consumers lose options, power, and quality.

The most interesting thing politically is how the rhetoric of freedom works. Freedom for the middleman leads to domination of producers and consumers. “Freedom” seldom works out to mean more options for everybody.

One worked-out example. If you’ve watched much cable or satellite TV lately, you probably saw Viacom’s ads against DirectTV, like this one.

If you’re a DirectTV subscriber, Comedy Central (and other Viacom channels) went dark for nine days before the two corporations resolved their dispute, so you had to do without The Daily Show or watch it online.

Here’s the point: Maybe you couldn’t watch Jon Stewart for a week, but the problem had nothing to do with either you or Jon Stewart. He wasn’t asking for a raise; you weren’t balking at the price of watching the Daily Show. But both you and Jon were irrelevant when two giant middlemen had a power struggle.

Each brought a lot of power to the struggle. In most of its markets, DirectTV is the only alternative to the local cable monopoly, while Viacom is one of a handful of megacorps that dominate TV content. (Disney, Time Warner, NBCUniversal, NewsCorp, and CBS are the others. National Amusements owns a big chunk of both Viacom and CBS. Comcast plays both sides of the street, being both a cable monopoly and a partner with GE in NBCUniversal.)

Viacom thought it had the upper hand, so it was demanding a bigger payout from DirectTV and insisting DirectTV carry its new Epix channel. I haven’t sorted out yet who won.

These middlemen outweigh both you and Jon Stewart. If Jon doesn’t work for one of the six big media companies, he can’t reach a major audience. If you don’t deal with either DirectTV or a cable monopoly, your TV choices shrink considerably.

Transparent markets. But it’s not hard to imagine a TV system that works differently: Cable or satellite systems could be common carriers, making a fixed amount whenever they connect a TV producer with a TV consumer. Cable and satellite would still compete, but only by changing that fixed amount or by offering more reliable service to the consumer.

With that kind of middleman transparency, small TV companies could spring up and get their shows seen, so Jon Stewart would have a lot more than six choices. You and Jon would have more power, Viacom and DirectTV less.

Even more interesting is what happens to the profit motive: The way to make money in this transparent system is to create shows people want to watch and deliver them reliably. Wheeling and dealing to amass middleman power wouldn’t accomplish much.

Government regulation would probably be necessary to bring this system about, but it would still be capitalism. The marketplace would just be structured differently, so that the benefits and opportunities of capitalism would accrue to producers and consumers rather than to financiers and empire-builders.

Probably this restructured marketplace would lead to more small companies and fewer megacorps, more millionaires and fewer billionaires.

Picture the same transparent-market principle spreading across the economy: More small businesses, more places to look for jobs, greater variety of products, and more opportunity to go into business for yourself. Less inequality.

July 30, 2012 – 11:32 am Categories: Articles, The Sifted Bookshelf | Comments (21)

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The Monday Morning Teaser: Monopoly’s Role in Inequality

Today’s weekly summary is going to be called “What Free Market?”, and its quote comes from Barry Lynn’s book Cornered about the effect of hidden monopolies on the economy. It may look like the stores contain a dazzling variety of goods, but often all the brands in a sector are made by one or two companies, and even apparent rivals are likely to have overlapping supply chains. It’s much easier for an enterprising individual to build a better mousetrap than to get it onto the local WalMart’s shelves without selling the idea to some megacorp first.

What’s everybody been talking about this week? The Olympics, obviously, but I can’t improve on the nonstop TV coverage. However, I couldn’t resist joining the cacophony about Chick-fil-A and Romney’s trip to London.

This week’s other article centers on what I’m learning from Lynn’s book. One issue I keep coming back to in the Sift is rising inequality. But all along, I’ve felt like I’ve been missing a piece of the puzzle. The usual explanations — globalization, lobbyists, bailouts, tax cuts for the rich, etc. — all play a part, but I don’t think they fully explain the explosive accumulation of wealth at the very top. Maybe monopoly is that missing puzzle-piece, especially the monopolies and near-monopolies that get between consumers and the people who make or invent the products we buy.

July 30, 2012 – 8:05 am Categories: Morning tease | Post a comment

Fragile: Handle With Care

I  was shown how fragile life was on Saturday. I saw the terror on bystanders’ faces. I saw the victims of a senseless crime. I saw lives change. I was reminded that we don’t know when or where our time on Earth will end.  

— Jessica Redfield, who avoided a mall shooting in June
only to die Friday morning in the Dark Knight massacre

This week everybody was talking about the Dark Knight shooting

By now I’m sure you’ve heard about it, so I won’t rehash it all.

if you know a jumble of contradictory “facts” about the shooting in Aurora, straighten your picture out by reading its Wikipedia article. That’s totally not how we were taught to use encyclopedias, but it makes sense. The news media tends to

  • sensationalize
  • try so hard to be first that they don’t get the details right
  • speculate
  • over-emphasize the newest detail
  • under-emphasize corrections of what they got wrong

But a constantly updated encyclopedia article tells the story as we currently understand it.

A shocking event naturally generates a whole series of secondary stories as people react. Two common reactions are worth paying attention to:

Gun control. The shooter’s equipment included an assault rifle, which is not hunting gear or home-defense weaponry. So one natural question is “Why do we let people buy this stuff?”

Bill Moyers presents the simple answer: The NRA is one of the world’s most effective lobbying organizations. In its absolutist view, reserving military weaponry for the military is just the first step down a slippery slope towards completely disarming the public in preparation for tyranny.

Unfortunately, we’re not going to have a serious gun control discussion in this election cycle. President Obama doesn’t want to talk about it at all, for fear of losing gun-owner votes in swing states like Virginia and Pennsylvania, and Mitt Romney doesn’t want to either embrace or defy the extreme pro-gun position.

Arizona politician Russell Pearce, for example, wishes that there had been more guns in the theater. Had the audience “been able to fire on their attacker, lives could have been saved”. The Washington Times agrees.

This point comes up every time there’s a major shooting, and pro-gun extremists will keep making it until the scene plays out in reality and we see what a nightmare it is. Imagine: One movie-goer notices the first shots, pulls out his gun and shoots back, hitting either a bystander or the shooter’s armor. More people see his muzzle-flash in the dark, think he’s the shooter, and start shooting at him. Result: chain reaction until everybody is shooting at everybody.

Religious right response. To folks like Congressman Louis Gohmert, the shooting was caused by separation of church and state. If we were the kind of Christian nation we used to be, God would protect us from stuff like this. Gohmert specifically faulted taking prayers out of high school graduations.

This is Jerry Falwell blaming 9-11 on the ACLU all over again. I feel stupid for not seeing it coming.

And finally, race makes a difference:

… which made the political back-and-forth seem trivial

This week the pressure built on Romney to release more of his tax returns, which he still refuses to do. The buzz has gone from “Why doesn’t he just get this over with?” to “What is he hiding?” Even Republicans are asking.

Meanwhile, President Obama made this common-sense statement:

If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business — you didn’t build that. Somebody else made that happen.

which became a “gaffe” when Republicans cut it down to “If you’ve got a business, you didn’t build that” — as if that referred to business rather than roads, bridges, and this unbelievable American system.

I’m going to give Ann Romney a pass on her “you people” remark. She didn’t fully enunciate “you”, so some are claiming she didn’t really say it. It’s too stupid a point to argue about.

Going overboard sometimes backfires, so here’s my rhetorical advice for Democrats: Laugh at Ann, but don’t vilify her. Keep asking what Mitt is hiding, but don’t speculate too much. If you don’t know, you don’t know.

But I wrote about Peak Oil and contraception

  • Peak Oil? Maybe not. The difficult thing about living in the reality-based community is that you have to change your opinion when the world changes. Now it looks like peak oil isn’t happening — world oil extraction has headed back up. What’s that mean for the economy and the environment?
  • Reading Humanae Vitae. It’s Natural Family Planning Awareness Week in the Catholic Church, when the bishops warn their flock about the dangers of birth control that actually works. I think it’s a good time to go back and read Humanae Vitae, the papal encyclical that the Church’s birth-control policy hangs on.

and you might also find this interesting

Grist’s David Roberts highlights the latest Romney betrayal-of-everything-he-once-stood-for: He now opposes an EPA rule limiting the amount of mercury power plants can release into the air. A Romney spokeswoman said:

President Obama cannot claim to support clean coal while imposing regulations that his EPA admits would prevent another coal plant from ever being built.

To which Roberts replied:

To paraphrase: “Obama cannot claim to support clean coal while passing rules saying coal has to be clean.” Uh … sure he can. In fact that seems exactly like what someone who supports clean coal would do: prohibit dirty coal!

After two years of study, the Boy Scouts announced will continue to ban gays from scouting. You can tell they’re ashamed of themselves, because their announcement explains nothing, does not say who studied the issue, and does not mention gays at all.  It just announces “no change” in its “longstanding membership standards”.

To Rabbi Clifford Kulwin, this decision betrays the Scout Law he learned as a boy.

If only Scout leaders had acted with bravery and courage, and told the world that our principles are universal and sacred — and open to every single boy who wants to try to live up to them. Instead, they caved to bigotry and zealotry.

I still owe you a LIBOR-scandal-for-Dummies article, but this post from the NYT DealBook blog explains a lot about how a few bankers could manipulate key interest-rate benchmarks.

Mortgage rates are based on the 1-year LIBOR — supposedly the rate at which banks make 1-year loans to each other. The problem? These days, banks hardly ever loan each other money for more than a month. So the 1-year LIBOR is “largely guesswork”. And because the mortgage market is so huge, even tiny manipulations produce big profits.

Sara Robinson raises an important point: If a committee of bureaucrats decides what you can buy, how much does it matter whether they meet in a government office or a corporate office?

With tongue only somewhat in cheek, here are a few ways in which Americans are now becoming a new lumpenproletariat, subject to the whims and diktats of our new Soviet-style corporate overlords.

Recent Sift articles did well on Daily Kos. A week ago yesterday, The Economics of Leviticus made the recommended list, and What Shaving Taught Me About Capitalism did the same the next day.

Meet the kids the DREAM Act is about.

And finally, an idea just wacky enough to work: What if local government uses its eminent domain power to buy up underwater mortgages at fair market value, i.e., much less than the home-owners owe? Then the mortgages can be refinanced at the actual value of the houses.

The beauty of the idea is that it doesn’t require any action from gridlocked Washington. Local government just starts using an existing power in a new way.

July 23, 2012 – 1:21 pm Categories: Short Notes, Weekly summaries | Comments (4)

Reading Humanae Vitae

You may not have noticed, but we are in the middle of Natural Family Planning Awareness Week. Each year, the Catholic Church dedicates this week to educating its members about acceptable and unacceptable methods of birth control.

By its own admission, the Church hasn’t been doing this very well — particularly in America, where Catholics use the pill, condoms, and other unacceptable methods at the same rates everybody else does. Meanwhile, the acceptable method — so-called “natural family planning”, in which couples keep track of the woman’s fertility cycle and only have sex during the infertile periods — is more-or-less ignored. Huffington Post reports:

A 2011 survey shows that just two percent of American Catholic women at risk of unintended pregnancy rely on the method. And an overwhelming majority of U.S. Catholics reject the church’s ban on artificial birth control.

HP then quotes the lamentations of Bishop Rhoades of Indiana:

Sadly, the majority of Catholics still do not know about Church teachings on married love nor understand why the Church considers artificial contraception immoral. This, tragically, is due to inconsistent education and formation since 1968.

There is, of course, another possibility: Maybe American Catholics know and understand the Church’s position perfectly, but the Church is just wrong.

And that is how Bishop Rhoades and I reach a point of agreement: We both think people should study this issue. That’s why I went back read the papal encyclical letter at the root of it all: Humanae Vitae (Of Human Life), written by Pope Paul VI in 1968.

Like Supreme Court opinions, papal encyclicals make much better reading than you might expect. Like the Court, the Vatican knows that it’s far more effective to persuade than to give orders (even if you retain the right to give orders). So pontiffs typically write in a clear voice that does not go over the heads of ordinary people.

Papal encyclicals can also surprise those of us who know the Catholic Church mainly through it’s public image — a point I made seven years ago when I looked at the stunning (to me, at least) economic liberalism of John Paul II’s Laborem Exercens.

So I came to Humanae Vitae willing to be surprised. But I also came with expectations/prior opinions/biases, which I might as well spell out:

  • I’m generally skeptical of anyone’s attempt to speak for God, no matter what institutional roles they play or how well-intentioned they are. To me, the highest marks of divine inspiration are clarity of thought and surprising simplicity. So if your opinion doesn’t make sense no matter how hard I try to understand it, claiming the authority of God isn’t going to impress me.
  • I’m also skeptical of claims that specific cultural practices are “natural”. I don’t reject the theoretical possibility of finding an authentic “human nature” and a culture that is most in tune with it. But people have an unfortunate tendency to believe that the way they grew up is natural, and that subsequent developments are artificial. (Extreme example: Old folks who think it’s natural to make a phone call but unnatural to text or use Facebook.)

Humanae Vitae considers contraception purely in the setting of a married couple, that being the only setting where the Church considers sex permissible.

It starts well, demonstrating that Pope Paul understood what was at issue. The pro-pill position he considers is not a licentious strawman, but something very similar to what I put forward in my defense of abortion. The Pope asks:

could it not be accepted that the intention to have a less prolific but more rationally planned family might transform an action which renders natural processes infertile into a licit and provident control of birth? Could it not be admitted, in other words, that procreative finality applies to the totality of married life rather than to each single act?

That is followed by a discussion of marriage in general. Unlike my wife and I (who decided to be childless), the Pope believes

[marital] love is fecund. It is not confined wholly to the loving interchange of husband and wife; it also contrives to go beyond this to bring new life into being.

It’s fine if married couples turn out to be infertile — they’re still married — but

each and every marital act must of necessity retain its intrinsic relationship to the procreation of human life. … Men rightly observe that a conjugal act imposed on one’s partner without regard to his or her condition or personal and reasonable wishes in the matter, is no true act of love, and therefore offends the moral order in its particular application to the intimate relationship of husband and wife. If they further reflect, they must also recognize that an act of mutual love which impairs the capacity to transmit life which God the Creator, through specific laws, has built into it, frustrates His design which constitutes the norm of marriage, and contradicts the will of the Author of life.

(It’s this metaphor of God as a “partner” in the conjugal act that Stephen Colbert irreverently lampooned as “a divine and ineffably beautiful three-way”.)

Now, you might think from that passage that any attempt to avoid pregnancy was illicit. But Pope Paul provides an out:

married people may then take advantage of the natural cycles immanent in the reproductive system and engage in marital intercourse only during those times that are infertile, thus controlling birth in a way which does not in the least offend the moral principles which We have just explained.

So understanding the human body well enough to predict when a woman is infertile is “natural”, but understanding it well enough to know that metabolizing certain substances will interrupt the menstrual cycle is “unnatural”. And understanding a man’s role in the process well enough to design an effective condom is “unnatural” too.

You lost me.

The birth control pill — like everything science makes — doesn’t work by invoking demons; it depends on our understanding of natural processes. A process isn’t unnatural just because it wasn’t understood in the Middle Ages.

It may seem unnatural, but that seeming depends on the technology you grew up with. If you grew up hunter-gatherer, plowing and planting seems unnatural. (Shouldn’t a plant’s seeds fall where God drops them?)

Having established his point (to his own satisfaction), the Pope then adds secondary arguments like this: Birth control

could open wide the way for marital infidelity and a general lowering of moral standards. Not much experience is needed to be fully aware of human weakness and to understand that human beings—and especially the young, who are so exposed to temptation—need incentives to keep the moral law, and it is an evil thing to make it easy for them to break that law.

Here, though, the problem is not that the Pill is unnatural, but that it works. If “natural” methods worked just as well, they’d cause the same problems.

The problem here is that the Church has strayed off its turf. I can easily imagine putting forward a moral vision of marriage, sex, and procreation that puts more stress on social, community, and spiritual interests and less on individual convenience. But Humanae Vitae doesn’t do that. Instead, it postulates a natural/unnatural distinction that is itself artificial.

Either nothing about civilization is natural — including our ability to count and chart cycles — or all of it is. There is no point in evolution where “natural” happened or stopped happening.

So yes, Catholics, use this week to educate yourself about the Church’s teaching on contraception. You will find it based on shoddy thinking. To attribute these ideas to God is blasphemous.

July 23, 2012 – 12:56 pm Categories: Articles | Comments (1)

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Peak Oil? Maybe Not

The hardest thing about living in the reality-based community is that you have to change your mind when new facts emerge. Lately, after a several-year flat period, global oil production has started growing again. The trend has reached the point where people who backed the Peak Oil Theory a few years ago are publicly changing their minds.

Here’s what George Monbiot wrote a few weeks ago in The Guardian:

Some of us made vague predictions, others were more specific. In all cases we were wrong. … Peak oil has not happened and it is unlikely to happen for a very long time. A report by the oil executive, Leonardo Maugeri, published by Harvard University, provides compelling evidence that a new oil boom has begun.

In Foreign Policy, Steve Levine is proclaiming “new age of fossil fuel abundance” and assessing the global winners (the U.S. and a variety of “new petrostates”) and losers (Russia, Venezuela, and OPEC).

My cynical first reaction was to check the sources for phony Exxon-funded think tanks, but that’s not what I’m finding. This looks legit to me.

Economists vs. ecologists. I view peak oil as one more chapter in the decades-long debate between ecologists (who know that in the natural world exponential growth always ends, and so worry that unlimited economic growth makes unsustainable claims on the planet’s resources) and economists (who have two unshakeable beliefs: handling scarcity is exactly what markets are designed to do, and human ingenuity is the one resource we will never run out of).

It’s an asymmetric debate: The economists are almost always right and we muddle along without catastrophe. But catastrophes being what they are, the ecologists only need to be right once. If civilization does go off a cliff someday, it won’t be much comfort to remember all the previous cliffs we avoided.

So a typical ecologist/economist debate goes like this: The ecologist says, “We only have X amount of commodity Y, and we’re using up Z of it every year. So unless we change our ways, it will all be gone in X/Z years, give or take. And if consumption keeps growing exponentially, it will all be gone even faster.” And the economist says, “Chill. In X/Z years we’ll have so many new discoveries, new technologies, and new ways of doing things that it won’t matter.”

Bad bets. The debate starting getting mass-media attention when the Club of Rome published The Limits to Growth in 1972. The report didn’t actually predict the world’s oil would run out by 1992, but that was the easiest headline to write. Those headlines generated a lot of panic, and (needless to say) 1992 came and went a long time ago. Every resource-depletion debate since has included an economist crowing about The Limits to Growth.

The classic economist-beats-ecologist story is the Simon/Ehrlich bet. In 1980, economist Julian Simon made the kind of put-your-money-where-your-mouth-is challenge that probably ought to happen more often: Pick any five commodities you want, Simon offered, and I’ll bet you that in 10 years they’ll be cheaper than they are now. Paul Ehrlich took the bet, picked chromium, copper, nickel, tin, and tungsten — and lost. All five were more plentiful and cost less in 1990, and Ehrlich paid up.

Peak oil. So why did anybody think oil production would peak?

Production from individual oil fields follows a well-established pattern: It starts slow, ramps up as more wells are sunk, then eventually peaks and declines. The production peak usually happens when about half the oil is still in the ground.

In the 1950s, geologist M. King Hubbard asked the question: What if we think of the United States as one big oil field? He used the single-oil-field model to predict U.S. oil production would peak between 1965 and 1970, which it did.

Hubbard extended his model to predict a world peak in 1995, and his protege Kenneth Deffeyes later updated it to get a peak sometime around 2005-2010, which for a while seemed to be accurate. The prediction graphs looked like this:

But recent production has moved above the Hubbard curve. At least for now, the price spike of 2008 seems to have done what the economists say price spikes are supposed to do: encourage conservation and stimulate production.

So now we’re seeing world oil production graphs like this:

(Notice production flattening out from 2005 to 2009.) Meanwhile, the supply of natural gas in the U.S. is booming (thanks mainly to fracking), and the price has collapsed.

Why didn’t the prediction hold? All along, the speculative part of the Peak Oil theory was that you could extrapolate from the well-supported model of oil field depletion to the depletion of oil on the whole planet. The fact that Hubbard did so well with his U.S. peak prediction made that problem seem smaller than it was.

The economists’ argument was always that as the price went up, new fields and production techniques that hadn’t been tried (because they were too expensive) would come into play. The ecologists responded, “Why didn’t that happen in when U.S. production peaked?”

In retrospect, the answer to that question is obvious: It didn’t happen because there was somewhere else to go. When production peaks in one oil field or even one country, the easiest thing to do isn’t to invent new techniques, it’s to take your old techniques somewhere where they still work. But when there’s nowhere to go, you get creative.

Global warming. In some ways, peak oil was a convenient theory for environmentalists: If we need to shift away from oil anyway, then why not deal with global warming at the same time by developing more sustainable energy sources? (Of course, the debate could have gone the other way: If we’re running out of dirty oil, then maybe we should use even dirtier coal.)

Now, environmentalists who worry about civilization’s carbon footprint are on their own; they won’t get any help from the geologists. Monbiot observes:

There is enough oil in the ground to deep-fry the lot of us and no obvious means to prevail upon governments and industry to leave it in the ground.

More and more it looks like that’s what needs to happen: Somebody who owns a king’s ransom of oil in the ground needs to be persuaded to leave it there. How exactly are we going to do that?

The resource we really do seem to be running out of is the atmosphere’s ability to absorb carbon dioxide while maintaining a biosphere productive enough to support a human population now expected to grow beyond 10 billion. That resource is not conveniently expressible as the price of a commodity, so it’s not clear exactly how markets will deal with it.

So the ecologist/economist debate will continue. And the ecologists only have to be right once.

July 23, 2012 – 11:01 am Categories: Articles | Comments (4)

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The Monday Morning Teaser

Everybody’s talking about the Dark Knight shooting. That’s getting plenty of coverage without me, so I’ll focus on three reactions: the gun control discussion it re-ignites (somewhat to President Obama’s consternation), the bizarre fantasy that an armed crowd could have taken the shooter down with less loss of life, and the religious-right view that blames such disasters on separation of church and state. (Seriously. And BTW, the victims are in Hell if they weren’t Christians.)

Until the shooting, everybody was still talking about Mitt Romney’s taxes, Republicans manufactured a gaffe by selectively quoting something sensible President Obama said, and Ann Romney may or may not have called us peons “you people”.

But the main articles this week will be about longer-term issues. In spite of things I’ve encouraged you to believe in the past, it looks like Peak Oil isn’t really happening, at least not anytime soon. And I take advantage of the Catholic Church’s Natural Family Planning Awareness Week to look back on the papal encyclical that is causing all the problems.

I’m moving slowly this morning, so the first article (on the papal encyclical) probably won’t show up until about 11 eastern time.

July 23, 2012 – 8:31 am Categories: Morning tease | Comments (4)

Shady Lane

I would like to see every single soldier on every single side, just take off your helmet, unbuckle your kit, lay down your rifle, and set down at the side of some shady lane, and say, nope, I aint a gonna kill nobody. Plenty of rich folks wants to fight. Give them the guns.

Woody Guthrie, who would have turned 100 last Saturday

This week everybody was talking about … Romney’s finances, Penn State, and the LIBOR scandal

The Romney thing is complicated enough to need its own article, but the Penn State buzz is simple: Penn State hired former FBI director Louis Freeh to investigate the Jerry Sandusky pedophile scandal, and his scathing report came out this week. He found

total and consistent disregard by the most senior leaders at Penn State for the safety and welfare of Sandusky’s child victims.

Those senior leaders include the late Joe Paterno.

LIBOR deserves its own article, but I don’t have a good handle on it yet. Basically, bankers at Barclay’s have been accused of manipulating the most important interest rate in the world, but they’re just the first ones to get caught. Bloomberg says this could be

one of the most costly and consequential [scandals] in the history of banking

and holds out the prospect that this time bankers could go to jail. If things proceed as usual, though, a period of public breast-beating will be followed by calls for amnesty to put this all behind us.

… and nobody was talking about the anti-austerity demonstrations in Spain


Spain is in an austerity spiral: The economy suffers from lack of demand, which caused a recession. The recession caused a budget deficit by increasing unemployment and decreasing revenue. To close the deficit, the government cut spending and raised taxes, which shrunk demand further. To the government’s surprise, that didn’t close the deficit, so a new austerity package is needed. They go around this vicious circle again and again. Spain has seen four austerity packages in seven months.

The picture is from Tuesday, when a multi-day march of coal miners reached the capital, where the miners were joined by thousands of other protesters.

American mainstream media refuses to take European populism seriously, having totally bought the German bankers’ view that austerity is inevitable and the people will just have to get used to it. If that’s how you look at the situation, demonstrations are just big temper tantrums unworthy of notice. If, on the other hand, you think Iceland-style debt repudiation is a serious option, then Spain is having a real debate you should pay attention to.

… but I decided to write about anarchy and shaving.

  • When Centralized Institutions Fail, Is Anarchy an Answer? Following up on themes from last week’s review of Twilight of the Elites, I look at Carne Ross’ The Leaderless Revolution.
  • What Shaving Taught Me About Capitalism. Forty years ago, the shaving problem was more-or-less solved, but the patents were expiring and nobody was going to get rich any more. So now we have “improved” razors that are no better, but ten times as expensive. How come that never comes up when we talk about unleashing the magic of the free market?

Meanwhile, you might also find this interesting

Maybe I was wrong in thinking that ObamaCare’s Medicaid expansion was too good an offer for the states to refuse. It seems that red states like Texas would rather renounce federal funding and cripple their hospitals than take care of sick poor people.

FDR is still relevant today:

The next time somebody tells you they’re going to solve the healthcare problem by limiting malpractice lawsuits, explain to them that Texas already did. It doesn’t work.

If Amazon starts delivering the same day, can any local retailer survive?

I don’t know why I’m picking on Texas this week. That’s just the stuff I happened to run across. Here, Paul Begala reads the crazy stuff in the Texas Republican platform.

Let’s end on a bizarre note, with a clam licking salt off a table:

July 16, 2012 – 1:27 pm Categories: Short Notes, Weekly summaries | Comments (2)

When Centralized Institutions Fail, Is Anarchy an Answer?


Last week I raised the topic of institutional failure: Why is institutional trust and trustworthiness failing more-or-less across the board? Corporations, political parties, the various layers and branches of government, churches, academia, the banking system, the media — none provides a solid base to stand on while we reform the others.

Two leaps. Then I made a leap you might not agree with: Even though each institution has its own failure story, I decided to look for some common cause, which I called a UFT (Unified Fuck-up Theory). I chose a tongue-in-cheek label because I realize I’m getting uncomfortably close to conspiracy-theory territory. (In Valis, Philip Dick wrote, “It certainly constitutes bad news if the people who agree with you are buggier than batshit.”) But the alternative is big-coincidence territory, and I’m not comfortable there either.

I followed that leap with another, which I’ve since come to call the Agatha Christie Hypothesis: If the clues don’t add up, it means that the culprit never made it onto your suspect list. So the common cause is likely to be something we instinctively don’t question.

Chris Hayes went down that path in Twilight of the Elites and pointed his finger at meritocracy. The certainly satisfies the ACH: Literally nobody had been saying “Our problem is that talented, hard-working people get ahead.”

As I laid out in more detail last week, Hayes argues that meritocracy justifies a level of inequality that has created a new ruling class, i.e., the elite have enough power to game the system that there is no longer anything like the level playing field meritocratic theory assumes. As a result, our institutions are run by an entrenched, hyper-competitive, self-serving elite that feels entitled to whatever it can grab. We have re-created the noblesse without the oblige.

In The Leaderless Revolution, former British diplomat Carne Ross adds another unexpected culprit to the suspect list: representative democracy.

Sheep and Shepherds. The basic idea of representative democracy is that a world of sheep and shepherds is fine, as long as sheep get to elect their shepherds. Presumably, the sheep will choose good shepherds, who will stay good because the sheep could replace them.

Ross criticizes this model from both sides: First, the options offered to the people are too limited and too easily manipulated by those with money and power. My favorite expression of this situation comes from the Cake song “Comfort Eagle”

Some people drink Pepsi, some people drink Coke.
The wacky morning DJ says democracy’s a joke. 

More prosaically, Benjamin Barber wrote:

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.

In November, for example, the American people will elect either Romney or Obama. How many important issues does that choice take off the table?

Second, the job of “good shepherd” is impossible in such a complex, diverse, inter-connected world. Even with the best intentions, no one can “represent” a nation like the United States or the United Kingdom. The very attempt (as Ross knows from personal experience) leads you to adopt grossly oversimplified worldviews that create more problems than they solve.

Representing the UK at the UN. The stories from Ross’ diplomatic career are worthwhile whether you end up agreeing with his conclusions or not.

The British Foreign Office is an elite Chris Hayes would recognize. A hyper-competitive process selects Ross and a few others out of thousands of applicants.

We were a chosen elite, given to expect that in due course we would become ambassadors and undersecretaries, the most senior exponents of our country’s wishes. I was elated to join this exclusive club and happy to undergo the many compromises membership in this group entailed.

Then the recruits are indoctrinated into the groupthink of the Foreign Office, which affirms the diplomats’ superiority: Only they know the classified information. Only they have unfettered access to the real experts — each other.

Eventually, Ross becomes head of the Middle East section of the British mission to the UN, where he and his American allies design and maintain the trade sanctions against Saddam Hussein’s Iraq — sanctions that were not only based on false assumptions about Iraq’s WMDs, but whose burden fell mainly on the Iraqi poor. Ross now accepts demographers’ calculations that the sanctions caused an “excess mortality rate” of half a million Iraqi children.

In other words, half a million children died. Though Saddam Hussein doubtless had a hand too, I cannot avoid my own responsibility. This was my work; this was what I did.

In what way, Ross now wonders, did he “represent” the people of the United Kingdom? Given the information and responsibility he had, how many of Ross’ sheep would have let hundreds of thousands of Iraqi children die in exchange for a small theoretical increase in their own safety? Might they instead have shown some compassion and courage? And if ordinary citizens of both countries had met in the same room, might they have come up with completely different options?

Rather than a series of gates through which information and power flow, representative democracy has become a series of walls: The people are cut off from their diplomats, and the diplomats in turn are cut off from the foreign peoples their actions affect.

Similar stories could be told in every country, about every aspect of government policy.

Renouncing the pact. So Ross is attacking government from a different side than conservative libertarians do. Libertarian rhetoric focuses on the tyranny of governments interfering with sovereign individuals, and minimizes any collective or social responsibility. “Society” is just a myth that justifies the few ruling the many.

Ross is saying almost the exact opposite: Not only do we have collective responsibilities to do things like take care of the planet, help each other, establish justice, and live together in peace, but those responsibilities are too important to hand off to leaders. He wants us to renounce what he calls “the pact”:

We vote, they act; we get on with our lives, they protect. … For most of us, politics is a spectator sport.

He cites the 2008 Obama campaign. Obama called for and got unprecedented participation from individual citizens. But

The political end of his campaign was not change itself, but for him to be elected to deliver change — a subtle but crucial distinction, and the disjunction at the heart of representative democracy.

Grey anarchy. Ross uses the word anarchy in a positive sense, but he means something subtle by it. Usually we talk about anarchy in a black-or-white way. We have a government or we don’t; anarchy is achieved by overthrowing government and not replacing it.

Ross’ anarchy has more grey in it. Government isn’t evil, just hopelessly inadequate. We need to figure out how to work around government — rather than through it — in order to fulfill our social responsibilities.

If government cannot provide for the stability, safety and just arbitration of our common affairs, who can? The answer is both radical and discomforting. For there is only one alternative if government cannot successfully provide: We must do so ourselves. Self-organized government is one term; another, rather more loaded term, is anarchism.

His model is more the everybody-pitch-in model of Wikipedia than the every-man-for-himself model of conservative libertarianism. Rather than electing the next savior, activists should focus on creating new arenas of interaction and trust where creative self-organization becomes possible.

The goal is to make the leaders become the followers: Rather than change society through politics, directly create social change that the politicians will have to react to.

Methods, not programs. Predictably, Ross’ prescriptions are on the vague side, and are more about methods than programs. (If he said, “Pass my program” he’d be back in the representative democracy model, offering himself as a leader.) He ends with nine principles for action, but unfortunately they take more space to unpack than I have. So I’ll have to do my own summary.

The ideal anarchic action, from Ross’ point of view, is something that will start a wave: It tackles the problem in some small but direct way, other people will see it, and they will be inspired to imitate. It is nonviolent and builds new trustworthy relationships. It will achieve something even if it doesn’t totally catch on. It focuses on those who are suffering most, and asks what they want rather than imposing a solution on them.

Gandhi’s salt march, Rosa Parks not giving up her seat — these are both cited as good examples.

Or maybe we could look at Ross’ current project, which he describes in this interview on the Colbert Report: He’s working an Occupy Wall Street bank.

July 16, 2012 – 12:42 pm Categories: Articles, The Sifted Bookshelf | Comments (2)

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