(part of) You Are Here: Explorations in Search of Current Reality

My Blogs Why write 4 different blogs? Good question, but it seemed to make sense at the time. Most energy is going into The Real Truth Project

The Eisenhower Socialist ; The Real Truth Project ; What Was the Cold War? ; The Ontological Comedian

See also Tales of the Early Republic, a resource for trying to make some sense of early nineteenth century America.

(Just to clarify things a little, Eisenhower wasn't really a socialist though he could easily get labeled one today, as could Abraham Lincoln or most every other Republic president until recently. And I'm not really a socialist either.)

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Sunday, July 11, 2010

Was Hayek a secret Eisenhower Socialist?

Dylan Matthews, in Ezra Klein's blog quotes Hayek saying "“The preservation of competition [is not] incompatible with an extensive system of social services — so long as the organization of these services is not designed in such a way as to make competition ineffective over wide fields.” and "There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision." Astonishing! Government healthcare reform is not part of the road to serfdom?

Matthews also notes that this was left out of a 'comic-book version of “The Road to Serfdom” printed in Look magazine in 1945'

Maybe Hayek was having a lucid moment of viewing free markets as physical manifestations, supported by whatever it took to bring them into being (history, regulations, lack of regulations, a felicitous distribution of wealth...) rather than some ideal essence consisting of the absence of government regulation.

Let me suggest that perhaps precisely this (I repeat) view of free markets as physical manifestations, supported by whatever it took to bring them into being (history, regulations, lack of regulations, a felicitous distribution of wealth is the element of realism needed to bring the economic debate down from the clouds.

Saturday, July 3, 2010

Balancing Liberty, Democracy, and Equality

Perhaps I can summarize my view of good government as having Liberty, Democracy, and (Rough) Equality, all strong and in balance, and much of the much of what has gone wrong with various ideologies (left, right, and other) can be blamed on obsessions with one or two of the three qualities to the point of practically ignoring the other(s).

Many left-leaning people have tended to worship equality far above anything else, with disastrous results. On the other hand today, many Americans seem almost exclusively obsessed with liberty. But none, and not even any two is likely to survive without the others.

In the old Communist system, the obsession with equality led to the death of liberty and democracy. And yet equality was not achieved either. PERHAPS it is inevitable that when one or two of the qualities is driven to near extinction by the others, even the one that received too much emphasis will be lost in the end.

The trouble is, to merely say 'this is the quality', or 'these are the qualities that matter' has no effect on the world. There has to be a living system that seeks to preserve all of them.

EQUALITY:
Without practical equality in various forms the majority of us can be in a position to lose all our power when a government entity, or an ultra-rich corporation or individual encrouches on it. I don't only mean formal equality before the law, also believe there must be some rough degree of practical (economic) equality. I.e. when you have a class of people with nothing, it is both inhumane and short sighted for us not to do something collectively for them. In most cases, a "dole" or "welfare" payments does more harm than good. The goal of supporting people to stay out of dire poverty isn't enough; rather, imaginative means must be used to enable and encourage people to be integrated into economic society. I am so far from being a radical leveler that I think maybe 100 to 1 ratios of income could well be fine, while there could still be some "tipping point", some critical mass of individuals 1000 times richer than the average, would put us well on the way to a permanent class system in all but name.

So I leave "rough equality" (which Tocqueville thought was a source of America's strength) undefined, and could consider and respect a wide range of attempts to define it, but we should not accept just burying the whole idea just because it has no obvious or "natural" definition.

FREEDOM OR LIBERTY
Without a wide range of freedoms, we can be robbed of everything else by either the state or by super-rich individuals and we will have no PRACTICAL means of resistence.


DEMOCRACY
Without practical democracy (democratic control of the state) -- and of a meaningful state with sufficient power (hard as this is to define) most people, however well organized, would find it very difficult to hold onto the other values: Freedom and equality.

Friday, July 2, 2010

Confidence Fairies and Invisible Bond Vigilantes

Paul Krugman has been blaming bad economic decisions on the people who believe in "Confidence Fairies" and "Invisible Bond Vigilantes". I think he has a point.

“The idea that austerity measures could trigger stagnation is incorrect,” declared Jean-Claude Trichet, the president of the European Central Bank, in a recent interview. Why? Because “confidence-inspiring policies will foster and not hamper economic recovery.”

Now I'm starting to make sense of all this. Mr. Trichet is seeing things exclusively from the point of view of his class. Austerity means he and his brothers will not at any time soon, have to increase what they pay the world's governments to protect their billions while millions starve, so they can confidently continue to sit on their piles of cash waiting for things to turn around. But does getting your unemployment check inspire confidence? Or being laid off if one is a government worker? No, but when we talked about confidence, we weren't talking about those people, were we? Or maybe we should, if we truly believe inspiring confidence is a strategy for getting out of the recession/depression, and aren't just talking through our hats.

Bond vigilantes are investors who pull the plug on governments they perceive as unable or unwilling to pay their debts.

Paul Krugman talks as if he has never seen a bond vigilante. In my opinion the point isn't that they've never existed. I think in fact that smaller weaker countries that were over a barrel, or navigating some extremely difficult transition did in fact have their very constitutions formed by the hammer blows of the bond vigilanties. I am thinking of what I read in the Shock Doctrine about South Africa, Russia, other former Warsaw Bloc menbers, and various Latin American countries especially. To punish the South African currency on the day there is talk of any sort of constraint on foreign ownership seems quite feasible to me, and many times this and similar things did occur, based on what I've read (I think the book has some problems in its overall framing of what happenned, but do not by any means think it is based on total fabrication. If anyone wants to point me to evidence to the contrary, feel free.

You have, in fact something going on in the public arena - critical decisions being made about how the South African or Russion economy will interact with the rest of the world. It is seen as precedent setting. You have one or more strong centralized bodies of the world's wealth handlers, like the IMF, and no doubt people writing alarming editorials in the Wall Street Journal, or Wall Street blogs or newsletters on a day by day or even hour by hour basis, in the case of the blogs/newsletters when the precarious new or newly reconfigured government makes a "misstep". And it was cheap to punish these small or weak countries. You move your investment somewhere else; most of the world's economy is reasonably healthy, so that is not a problem.

But we cannot simply extrapolate this to the current situation, and the American economy or even moderately large western economies. Who is going to jerk hundreds of billions of dollars out ot the American economy based on an alarmist editorial or emotional reaction "Oh my God, how dare they flout the laws of sacred economics!". No, they have to think about whether the proposed move, even by their economic theories, is all that catastrophic really, and where is a better place to put that investment.

Thursday, July 1, 2010

The Dubiousness of calling Mandated Insurance a "Tax".

Comments I made on http://voices.washingtonpost.com/ezra-klein/2010/06/current_law_is_fiscally_respon.html":


Responding to: "Also if the government forces one to purchase health insurance at one's own expense that's effectively a tax. These off-balance sheet revenues and expenses ..."

Whoops -- you can, through some analogy call the requirement to purchase health insurance a "tax", but you cannot call it a source of (government) revenue.

OK, here's an idea for lowering the overall tax burden: Ban states from making car insurance mandatory!

OK, you can call mandated health, or car insurance a tax, and by the same reasoning, a (usually local government) requirement that you keep the sidewalk in front of your business ice free in winter is also a tax. Also, one way streets are a tax because under some circumstances, you could arrive at your destination faster and cheaper by going the "wrong way" (such authoritarian language!) up a one way street.

But, getting back to the ice on the sidewalks, it's a government imposed burden that will cost you money if you hire someone to do it. But then again, it might save you from a big lawsuit. Or the requirement that somebody else keep their sidewalk ice free might save you from a broken neck.

Health care can be expected to have some analogous effects. Is it fantastic that someone else's health could have a negative effect on you? not really. How about the part time school bus driver with no benefits who has a heart attack on his/her route that cholesterol lowering drugs might have prevented? How about the unpaid visits to the emergency room that hospitals no longer have to pass on to whoever they can find to subsidize them, when people stop using the ER in place of a family doctor. How about if the government, now able to show a financial benefit, requires procedures in hospitals that drastically cut MERSA and similar hospital spread infections (for which Medicare might pay hundreds of dollars a day for 3, 6, or 9 months (it's happenning in my own family). The cost/benefit effect alone could make it happen. And then along will come the "fringe benefits", like my father not being a deaths door for a time, and stuck in a chair or walker for months and months.

Lets just say there might be a reason the other wealth countries, with real health care systems, have half the financial burden of health care that we do, and mostly people better satisfied with the care they get.

"the cost of complying with the government regulations which have been growing like kudzu." Oh yes, the cost of complying with those pesky safety procedures for mines and oil rigs. The high cost of requiring Wall Street to sell financial instruments that people can understand. Terrible, terrible. Not to say that every government regulation is good - but neither can we assume they are all bad. We need to pay some attention to the arguments pro and con, not just have a rule "All regulation is _____ (a) good, (b) bad."

Sunday, June 27, 2010

One Point of View (Jefferson's) on "the aristocracy of our moneyed corporations"

Some borrowed citations from: http://fraughtwithperil.com/cholte/2010/03/14/the-american-corporate-monster-part-2-corporate-personhood-history/


Thomas Jefferson wrote in a 1816 letter to George Logan:[11]

“I hope we shall… crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government in a trial of strength, and bid defiance to the laws of our country.”

“A corporation is an artificial being, invisible, intangible,” Chief Justice John Marshall wrote in an 1819 case. “It possesses only those properties which the charter of its creation confers upon it.

Jefferson and Marshall were not friends, or in tune politically, and that seems to be reflected here.

What do you suppose Jefferson, or even the more pro-business Marshall have said about the need to protect the "Freedom of Speech" of corporations?

Comment on a Proposal to Make Corporations Democratic

See http://fraughtwithperil.com/cholte/2010/06/25/proper-corporatism/ for context.

There was also a time in America in the 19th century when Joint Stock Companies were seen as an exciting means of implementing communal utopias like Brooke Farm and Oneida.

[The all important "So what?" question]
One question I have is what is the next step beyond saying "if this happenned, it would be an improvement", or a more strongly worded "this needs to happen"? I am beginning to think that collective action aimed at reform might be usefully imitate the structure of the scientific community. The problem is bridging the gap between the present state and the vision of (1) in the one case, perfect understanding of the universe, or (2) perfecting the social order. Prior to the Enlightenment, there was a plethora of speculative philosophical systems which tried to be "theories of everything" (a phrase that I think expresses the drive behind even the most 'primitive' religions).

He talks a lot about the "Social Corporation" which is neither the traditional "nonprofit" nor "for profit" enterprise. There is no very good legal framework for it, so he is putting forth a template for the consideration of governments. He sees no reason why such corporations, while explicitly *not* having maximization of profits as prime directive cannot make sufficient profits to grow without the need of continual infusions of charity money. I think what he'd really like is the ability for a corporation to have a *legally defined purpose* such as "to improve health outcomes (more specifically defined of course)
by X% in the areas in which they operate within such and such a time frame, with profit and growth being perhaps the goal *once that is accomplished*. He thinks they can go head to head with traditional corporations, like maybe a certain amount of good will and some vibrant quality that such an enterprise might have, might offset failure to follow what today are considered "best practices" for maximizing profits. Yunnus has been working at this (not just micro-lending but a broad array of enterprises) for over 30 years, and his enterprises are now certainly on the scale of billions of dollars.

I think there is immense potential in that, whereas I can't imagine an attempt to change the rules of corporations IN GENERAL any time in the forseeable future.

A Time to be Wonkish, and a Time to Put Away Wonkish Things (comment on Paul Krugman: A Dark Age of macroeconomics (wonkish)

Paul Krugmen points out - quite reasonably - the solipsism of drawing any conclusion from the correlation of two things that are the same by definition (see Paul Krugman's A Dark Age of Macroeconomics - Wonkish). For example, I always wondered about a study that showed a remarkable - possibly too remarkable - correlation between body weight and sense of balance. Well, we know exactly how to measure weight, but "sense of balance"? Evidently the experimenters had created some kind of sense-of-balance-o-meter. Now the idea that overweight people have a harder time staying balanced is intuitive, OK, but knowing something about how complex things are measured, I wondered whether the the balance-o-meter what little more than a Rube Goldberg-ish measurement of weight, with some informational impurities that made it vary enough to keep the correlation line from being perfectly straight (a tell-tale sign). So I relegated the study to the category of "not sure it means anything". Only by mastering the meaning of measuring "sense of balance" could I have decided whether the study meant anything or not.

This reminds me a bit of people being mesmerized by graphs of X vs Y where we don't know what either of them mean, but the experts provides something intuitive that he claims is an analogy and we nod out heads.

Well, Prof. Krugman, if pulling some profound "fact" out of the magician's hat of an accounting identity (his phrase), seems like a rich source of nonsense, consider the sort of creation ex nihilo some very smart people indeed - people I know who belong to Mensa (a bad sign in my opinion) have swallowed. Ayn Rand puts at the root of her supposedly deep "objectivist epistemology" the identity "Existence exists" (c.f. John Galt's interminable speech in Atlas Shrugs, or Ayn Rand's book called Objectivist Epistemology.

To fight such speciously derived paradigms on their own ground (or what seems to the believers to be their ground) is a losing battle.

Instead, I think we need to propose alternate ways of looking at things that can be understood by people without a college degree.

[and just how are we supposed to do that, you may wonder]Link