AZspot

It makes eminent psychological sense that a crisis might lead people toward conservative responses—a feeling of impending scarcity encourages selfishness, not generosity. It’s been ages since I read Erik Erikson, but as I recall the identity crisis, it leads the sufferer back to remembered moments of security and happiness, not toward an uncertain transformative future. That helps explain why immigrants are so often the target in an economic crisis: it’s not just about labor market competition (and some of the most xenophobic are those who experience no labor market competition with immigrants), but a fear of the foreign amidst a passionate reversion to the familiar. More on the immigrant angle: further evidence that feelings about immigration are driven more by “cultural” than narrowly economic concerns can be found in this paper by David Card, Christian Dustmann, and Ian Preston. Among other things they find that some of the most passionately anti-immigrant people are retirees, who of course have no labor market competition issues. Christians are more opposed to immigration than non-Christians, and there’s a lot of anxiety about heathen nonwhites polluting native cultures. Doug Henwood ☀

…Barack Obama himself is a liberal Republican. Or maybe not so liberal a Republican. Consider the healthcare bill. The individual mandate has its origins in the Nixon administration’s response to Teddy Kennedy’s single-payer bill in the early 1970s. The insurance marketplace has its roots in the American Enterprise Institute’s response to Bill Clinton’s healthcare scheme. Speaking of Mr Clinton, wasn’t it he who said “we’re all Eisenhower Republicans here”? And he wasn’t too happy about it. The not-so-liberal Republican part is most visible in education policy. President Obama has continued George W. Bush’s “No child left behind” emphasis on testing and charter schools, and has even taken up attacking teachers’ unions. Arne Duncan, his education secretary, has declared in terms indistinguishable from Milton Friedman’s that Hurricane Katrina was the best thing that ever happened to the New Orleans school system because it furthered that quasi-privatisation agenda. Who needs “moderate” Republicans in opposition when they’re already in power? Doug Henwood ☀

…while the whole testing and choice agenda, one that ultimately tends towards the privatization of the public school system, was once a Republican obsession, it’s now become a bipartisan affair. The Obama administration hasn’t merely continued the Bush education agenda—in many ways, they’ve intensified it. With the Republicans, it’s all-too-easy to be scandalized by the notion of eduation policy being set by absolute yahoos, who not only don’t read books, but are suspicious of those who do. (And by that I don’t mean to deny that there are serious conservative intellectuals—there are. I’m thinking srrictly of politicians like George W. Bush and his cabinet, and most of the Republican Congressional delegation.) But Obama is far from a yahoo, and so too most of the people who surround him. So why are these non-yahoos pursuing such a yahoo agenda? Though not yahoos, they are a bunch of centrist technocrats. Technocrats are usually obsessed with what they like to call “metrics,” but they’re pushing policies, like school choice, charter schools, and vouchers, that have absolutely no support in experience. There’s no evidence that they imrpove educational outcomes. The only reasons I can think of for this now bipartisan consensus is that privatizing schools is a way of saving money, and that the whole notion of choice and competition fits in nicely with reigning bourgeois ideology. Note that the business and political elite that is pushing this agenda doesn’t, for the most part, send its own kids to these public schools. They send their kids to private schools, with rigorous traditional curricula, and, in many cases, a “progressive” approach to education. A regime of basic skills and military discipline isn’t good enough for their kids—just for the masses. Maybe that’s another reason for this agenda: producing better cogs for the economic machine. But it’s going to make us dumber. Doug Henwood ☀

It’s come clear to me that the sequence of Bush and Obama has been very bad for the left side of the political spectrum. I’m not talking about hardcore types like me, who find the whole setup to be rotten. But I’m thinking of what we might call left-liberals—people who’d really like a more egalitarian and less violent world, and who don’t embrace market solutions to social problems and invading small countries in the name of human rights. During the Bush years, it got too easy to make fun of his illiteracy and idiot religiosity, too easy to make jokes about Dick Cheney’s aim with a shotgun or the man-sized safe in his office, too easy to blame plutocracy and bombing runs on a gang of Republican troglodytes. God knows they are troglodytes. But in a lot of ways, Obama is a more sinister leader. He’s charming, smooth, literate, and sophisticated, the opposite of a dope given the outbursts of rage like Bush. Yet he’s doing as much as Bush to coddle Wall Street and prosecute imperial wars. But do we see the kind of opposition to that agenda coming from the more respectable left that we saw in the Bush years? No. We see apologetics. Doug Henwood ☀

Of course, the liberal instinct is to blame this urge to compromise on the lack of brains or backbone or some other crucial bodily organ. I think that’s wrong. The fundamental problem of the Democrats is that they’re a party of capital that has to pretend for electoral reasons that it’s something else. So they make progressive noises to satisfy the base, but once in power, do the bidding of their funders. Sometimes these contradictory tendencies can be seen in one figure, like Obama himself, and sometimes in the wings of the party (e.g. the Progressive Caucus vs. the Blue Dogs). But in both cases, the more conservative faction, whether of personality or party, almost always prevails. That’s especially the case when there are no popular movements pushing them in a better direction. Those popular movements were partially disarmed by Obama’s victory. Maybe they’ll start coming to their senses now, especially as the Dems move right in response to the Massachusetts outcome. But that’s not the whole story. Although a lot of liberals, and even more serious leftists, don’t like to admit it, there’s a deeply conservative streak in the American electorate. The “common sense”—the unschooled instincts imparted by upbringing and inherited ideology—of people in this country is individualist and self-reliant. That common sense has become increasingly dysfunctional. The U.S. reminds me in many ways of a startup company that’s grown so big that it needs a serious overhaul but is incapable of the necessary transformation. In the corporate example, you frequently see that the founders don’t want to turn things over to professional managers. They want to keep running the show on instinct and animal spirits. But those aren’t working anymore. So too the U.S. The dog-eat-dog model of social Darwinism worked well (on its own terms—it was often horribly brutal) while the U.S. was growing rapidly in the 19th and early 20th centuries, but ever since growth slowed down in the 1970s, we’ve been in need of a rethink of the old model. But we’re incapable of it. Instead, we’ve tried ever more reckless applications of debt to keep things going. Doug Henwood ☀

…I got an email blast from MoveOn.org this morning inviting me and several million other people in their address book to a set of nationwide rallies to fight the insurance giants. Sure, I’d like to do that—but they’re organizing these rallies in support of the reform proposed by the administration and Congressional Democrats. As I’ve been saying over and over, there’s nothing in these proposals that seriously, or even semi-seriously, cramps the style of the big inscos. Quite the contrary. We’re all going to be forced to carry insurance, should this legislation pass, meaning buy it from the insurance companies. If you’re sort of poor, the gov will subsidize your purchase. They won’t be able to drop people for pre-existing conditions, but they will be able to force them to pay through the nose for crummy policies. Doesn’t MoveOn know this? Don’t they know that over the last three months Aetna’s stock has gone up 30%, about twice as much as the broad market? Is MoveOn so in thrall to the Democrats that they haven’t bothered to scrutinize the proposals? Or have they, and they don’t care? In other words, are they naïve or devious? For a lot of liberals, it all seems to have come down to the so-called public option: will the reform create a public entity to compete with the private insurers? Never mind that in the unlikely event the public option were to happen, it would be so crippled as to be meaningless. But what about the rest of the scheme? What about the noxious habits of the insurance companies, like denying a quarter or a third of the claims that patients file? That’s likely to continue unabated. I think we may be better off if these reform schemes fail and we have time to organize to press for something better. Doug Henwood ☀

A friend pointed out to me the other day that the market capitalization—the value of all the outstanding stock—of the publicly traded health insurers is about $150 billion. Add a little premium to sweeten the pot and you could nationalize the lot of them for about $200 billion. The total administrative costs of the U.S. healthcare system, which are greatly inflated by all the paperwork and second-guessing of docs’ decisions generated by the insurance industry, are about $400 billion a year. Those administrative costs are about three times what a Canadian-style single payer system would cost. So that means we’d save about $250 billion a year by eliminating the waste caused by our private insurance system. In other words, the nationalization could pay for itself in well under a year. But we can’t do that. It’d be Canadian or something. Doug Henwood ☀

So it’s looking like the buzz around the Internet left is that Van Jones’s ouster is all about race. No doubt that’s part of the story—but does anyone really think the reaction from the right would have been much different had Obama appointed a white ex-Maoist to the job? For God’s sake, the right thinks cap and trade, the most conservative approach to the carbon crisis you could imagine, is a socialist plot to expropriate property, just like Obama’s scheme to subsidize the health insurance industry (aka “reform”) is socialized medicine. Obama will keep ceding ground to them, because he wants to run a capital-friendly regime, but it will never be enough. At what point will people stop blaming things like the failure of white green organizations to fight a racist attack and start admitting to Obama’s loyalty to the deep structure of American capitalism? The right is often nutty, delusionally so, but they also have a set of principles that they really believe in and they fight tirelessly for them. Yes, their hatred of Obama is partly fueled by race, but it’s also of a piece with the history of the American right. Hofstadter, in The Paranoid Style, quotes a woman as lamenting on Eisenhower’s re-election, “Four more years of socialism.” The teabaggers and town hallers are the same thing, 53 years later. Doug Henwood ☀

In the latest Gallup poll, Obama’s approval rating is down to 54%, a decline of 12 points. The average for first-term presidents is a gain of 5 points. Losses of Obama’s magnitude but him in company I’m guessing he’d rather not be in: George W had taken a 10-point hit just before Semptember 11—though his approval rating soared after that unfortunate day. Jimmy Carter took a 12-point hit in his first nine months in office. But Nixon, Kennedy, and Reagan all gained 7 to 9 points. Bill Clinton offers a more cheering precedent for Obama—though he started with an approval rating 11 points below Obama’s, he fell by almost as much during his first nine months in office, and left office as one of the most popular presidents in the history of polling. So what’s this all mean? Though Obama’s lost a few points among Democrats, especially moderate and conservative ones, most of his erosion comes from Republicans and Independents—despite all his efforts to woo them. This suggests a few things. One is that it makes little political sense to try to win over people who are disposed to hate you. And two is that liberals are a bunch of credulous suckers. At some point, they will join those to their right in jumping ship—maybe as soon as next week, once Obama ditches the public option in his health care reform scheme. And then, maybe, politics could get more interesting. Doug Henwood ☀

It’s amazing the hoops the auto industry had to jump through. The humiliation they had to suffer compared to what the financial sector dealt with. The auto industry has been vilified as dinosaur-like or fully incompetent, whereas the financial sector has pretty much gotten a blank check. GM and Chrysler have had to submit all kinds of elaborate plans for restructuring, and they had to argue for their long-term viability. JP Morgan and Goldman Sachs never had to go through that. In this culture there is something about people who make things, they have a much lower prestige than people who trade in fictitious capital. Doug Henwood ☀

It looks like the intention of the Geithner scheme is to try to restore the status quo ante bustum, with private equity and hedge fund guys running around remaking the economic landscape with big gobs of borrowed money. Is the ultimate point of this plan to bring back the world of 1999 or 2005, when easy credit fueled speculative bubbles and overconsumption? That doesn’t seem like a live option. There’s a more sinister possibility: the bailout will be funded by an austerity program. That is, all the trillions being borrowed to spend on bailouts and stimuli will save the financial elite, but at the costs of a fiscal crippling, and instead of raising taxes on the very rich to pay down the debt, there will be deep cuts in civilian spending. With the economy remaining weak, employment would stagnate and real wages fall—a prospect that would, by restricting consumption and therefore imports, bring the U.S. international accounts close to balance. Then we wouldn’t be dependent on Chinese capital inflows anymore—and the overprivileged wouldn’t have to give up lunching on $400 stone crabs. Is that the hidden agenda? It is coherent, if cruel. Doug Henwood ☀

While the current economic crisis probably won’t be the magic intervention that will deliver us to a post-capitalist future, there are opportunities to advance the socialist cause. The mass insecurity and impoverishment produced by the imploding labor market are wonderful arguments for a more civilized welfare state. The need for a new dynamic sector to generate an economic recovery is a perfect opportunity to promote high-speed rail and alternative energy research (and in far greater quantities than the Obama administration is proposing). Our banking system is being rescued with public money. Why shouldn’t the public get something in return for that, like publicly or cooperatively owned financial institutions that could provide customers with low-cost services and communities with economic development funds? And with the housing market not likely to recover for at least several years, why not experiment with different models of ownership? For example, instead of foreclosing on houses, why not turn them into limited-equity co-ops, which take the speculative motive out of that essential of life? These things won’t happen spontaneously; they need state action, prodded by organized and thoughtful activism. The public isn’t with us yet, but we’re a long way from the days when The Market seemed like a fresh idea. Doug Henwood ☀

It might seem odd to link the current financial crisis with the long-term polarization of incomes, but in fact the two are deeply connected. During the housing bubble, people borrowed heavily not only to buy houses (whose prices were rising out of reach of their incomes) but also to compensate for the weakest job and income growth of any expansion since the end of World War II. Between 2001 and 2007, homeowners withdrew almost $5 trillion in cash from their houses, either by borrowing against their equity or pocketing the proceeds of sales; such equity withdrawals, as they’re called, accounted for 30 percent of the growth in consumption over that six-year period. That extra lift disguised the labor market’s underlying weakness; without it, the 2001 recession might never have ended. Doug Henwood ☀

The Republican never has doubts about the rightness of a money-driven hierarchical society ultimately backed by violence. The Democrat, though, is troubled by doubts and anxieties in the back of his mind that get diluted by evasion and qualification by the time they work their way toward the front of the mind. Doug Henwood ☀