Juxtapositions; or Kindle to the Rescue

The latest word on the possible Boston Globe closedown is that the Union blinked. The Globe will stay in business, for now.

Full disclosure: The Boston Globe is owned by the New York Times Company, as is the other site I write for, About.com. A couple of months ago the company announced it was cutting the stipend for those of us who write for About.com on contract. Of course, we don’t have a union, so there wasn’t much we could say about it.

But also in today’s New York Times — will Kindle come to the rescue? I’ve never used one (although if you buy one from Amazon, please click through using the kindle widget on the sidebar so I get a cut, thanks). However, I can foresee a time when most of us will have broadband kindle-type devices with us all the time so we can download and read current news wherever we are. I would like that. No paper, no ink, no printing, big cost savings for newspapers. Not so good for printers, of course.

Paul Krugman discusses falling wage syndrome. Lots of people are taking wage cuts, and falling wages create more economic stagnation. Bill Anderson at LewRockwell sniffs,

You see, Krugman believes that there should be no consequences to an unsustainable boom, and that once a bubble bursts, then the spending that occurred during the boom must be continued at all costs. That is not economics, folks. That is nonsense.

Krugman wrote that an economy needs spending, or else it is stagnate. And if an economy is heading for stagnation, it needs more spending. I don’t see how anyone could argue with that. One thing defines the other; like if it doesn’t rain for a long time, it’s a drought. In other words, it’s not about what should happen, or what Krugman wants to happen, but what will happen. Hardly nonsense. But you know libertarians; Ann Coulter will win the Nobel Peace Prize before libertarians will admit Krugman might be right about something. He could say water flows downhill, and they’d argue with him.

The righties must have worn themselves out over the weekend defending the honor of hedge funds, because so far they’ve been quiet about the President’s plan to crack down on multinational corporations that use tax loopholes to avoid paying U.S. taxes. But Andrew Leonard writes,

But the president’s announcement Monday morning of a push to crack down on tax loopholes that allow multinational corporations to avoid paying what they owe to the U.S. government is already spawning half-hearted chatter on the cable news shows: It’s more proof of Obama’s antipathy to business.

The criticism is muted, however, because it’s just not a winning political proposition to defend multinational businesses that offshore jobs at a time when populist fervor rages so high.

Well, yeah. And if you missed it, be sure to catch the story about the Bush Administration’s American Jobs Creation Act of 2004 and how well that worked. It was great for business but bad for the economy, a circumstance that ought to cause heads to explode at LewRockwell.

Never fear for the rich, folks. Steve M tells us that in the past 100 days they’ve dropped $100 million on the George W. Bush Presidential Library. If they’ve got that much money to waste, I can’t feel too sorry for ’em.

Pity the Poor Hedge Fund!

This follows up the last post, on “Why Is There an Economy?” A blogger named Corky Boyd is outraged that the Obama White House is strong-arming business.

Yesterday (May 1) on Detroit’s Frank Beckman’s morning talk show (WJR), bankruptcy attorney Tom Lauria made the incendiary accusation that the members of the White House had threatened to use the “the full force of the White House Press Corps to destroy” his client’s reputation if it didn’t acquiesce to highly unfavorable terms of the government’s proposed Chrysler restructuring plan. Because of the strongarm tactics, Lauria’s client dropped its opposition. …

…There is a pattern here. Financial institutions holding billions of Chrysler’s secured debt are being held hostage by the TARP loans they are not permitted to pay back. They are being forced to accept just pennies on the dollar for loans they made in good faith less than two years ago. Just like mob loan sharks, the administration wants them under its thumb so they can extort more and more concessions.

This is an abuse of power that goes beyond Nixon.

Oh Noes! Why is the White House being so mean to the nice businessman?

Here’s the reason: The client who is being strong-armed is hedge-fund manager Perella Weinberg Partners LLP. Perella and a couple of other hedge funds that owned a part of Chrysler’s debt have been obstructing Chrysler’s attempts to restructure itself and avoid bankruptcy. The hedge funders wanted Chrysler liquidated so they could take their money, and too bad if the loss of Chrysler sets off a chain reaction of failed suppliers and other businesses that send the entire American economy into a tailspin. Not to mention what would happen to the retirees, who would lose their pensions, etc.

Lisa Lerer at The Politico explains what happened.

“Bankruptcy is only required today because of the greed of a few hedge funds that held a fraction of Chrysler’s debt,” said Rep. Candice Miller, (R-Mich.) “President Obama today stated that he did not stand with these hedge funds and neither do I.”…

…“The administration put a great deal of pressure on those entities to go forward,” said Rep. Gary Peters, (D-Mich.) “They gave these hedge funds every single possible opportunity to accept the deal.”

Last night, the Treasury department sweetened their $2 billion cash offer to holders of Chrysler’s secured debt by $250 million. The secured debt holders would have gotten the cash in exchange for retiring roughly $6.9 billion in debt. The administration also extended an original 6pm deadline to continue negotiating through the night.

Sen. Debbie Stabenow, (D-Mich.) blamed the breakdown in negotiations on three large hedge funds – Oppenheimer Funds, Perella Weinberg Partners and Stairway Capital.

“We’ve been working with them every day, last night, and up until this morning,” said Stabenow. “They pushed as hard as they could.”

The White House strong-armed Perella Weinberg Partners into signing on to the $2 billion deal in order to leave something left of Chrysler to restructure. This in turn will, it is hoped, save thousands of jobs (you’re saving not just Chrysler, remember, but also suppliers) and at least some portion of employee health and retiree benefits. And this is good not just for the employees and retirees, but for the state and local economies in which these businesses are located.

In other words, three hedge funds tried to hold a chunk of our nation’s economy hostage, and the White House didn’t let them get away with it. And this meathead blogger says the White House is abusing power. Jeez louise, people are stupid.

Update: A mouthpiece for Plutocracy called “Founding Bloggers” links here, saying,

Right on cue, here is a liberal blogger that makes the case against the evil capital investors who would dare exercise their rights under contract.

What the pea-brains aren’t noticing is that there are vast numbers of contracts that are being shredded or amended because of the plight of the automakers. These include contracts with suppliers and, probably, dealers as well as workers. Everybody else is taking a hit. The White House is trying to spread the pain around so that there’s something to salvage and the overall U.S. economy doesn’t take a bigger hit than it’s already taking.

In a perfect world the automakers would be making a profit and the capital investors would be making a nice return on their investment. But when the Titanic is going down it’s not the time to complain that you paid for a cabin with a better view and want a refund.

Why Is There an Economy?

At the Washington Post, Eva Rodriguez shrieks that Barack Obama is taking over the auto industry.

Yes, she begins by acknowledging that he said he doesn’t want to run auto companies. This suggests, Rodriguez says, that the President understands “business professionals are better equipped than government bureaucrats to decide what cars to make, what prices to set and how many people to employ.” However,

Seconds after that promising, if relatively vague opening, though, Obama took much of it back. He couldn’t help himself. “But I know that, if the Japanese can design an affordable, well-designed hybrid, then, doggone it, the American people should be able to do the same,” he said. “So my job is to ask the auto industry: Why is it you guys can’t do this?”

So much for hands-off.

Let’s stop right there. We see the dichotomy Rodriguez sets up — “government bureaucrats” versus “business professionals.” Government bad, private industry good. And then we see that the President’s challenge to the auto industry to catch up to the times is conflated with micromanaging.

In other words, we’re supposed to give absolute trust to the “business professionals” who failed miserably at running their companies, because they are, you know, “business professionals” and President Obama is just a “bureaucrat.” No other explanation is required.

Rodriguez wants the President to give Detroit “incentives” rather than challenges to update its product line. What if more fuel-efficient cars don’t sell, she asks. Like the gas-guzzlers have been flying off the lots lately. But fuel efficiency is not just a nice idea; it’s an imperative. We as a nation, as a species, simply cannot continue to burn fossil fuels at the rate we are burning them. The dinosaurs running the auto industry refuse to look any further ahead than the next quarterly report, and that’s one of the reasons they’re in trouble.

And a few minutes of googling revealed that sales of hybrids are an accelerating share of auto sales.

But then we get to what’s really eating at Rodriguez:

Which brings us to another disturbing aspect of the government’s dealings: its unabashed and unwise attempts to tilt the scales in the unions’ favor. The government proposed giving the United Auto Workers’ retiree health fund a 55 percent equity stake in Chrysler — more than the combined stakes of Chrysler’s merger partner, Fiat, or the other creditors that are owed roughly $7 billion. At GM, the plan is for the union to take a 39 percent slice — a rich reward for years of work rules, health care and pension deals that contributed mightily to the company’s financial woes.

I challenge Rodriguez to write an essay on the subject of “Why Is There an Economy?” Not “What Is an Economy?” or “My Ideal Economy,” but to get down to the most basic question of all, which is to examine the place of economies in human civilization. And for that matter, why is there civilization?

Ultimately the purpose of civilization is to support the lives of humans, so that we aren’t living in caves by ourselves, living on what food we can hunt and gather ourselves and guarding our stuff from other humans.

Civilization is good for us. Unless one is extremely isolated, an enterprise as simple as growing a vegetable garden requires some cooperation from other humans, if only that they agree not to pick and eat your tomatoes without paying you something for them.

There are two pillars of civilization, which are governments and economies. (There may be other pillars, but right now I’m just dealing with these two.) Governments are the administrative function of civilization, and although nothing lasts forever, governments that do a good job at managing civilization in a way that is generally beneficial to most people tend to be more stable and successful than those that don’t.

Economies are the means by which goods and services are created and distributed in a civilization. If most people in a civilization can count on getting enough food, clothing and shelter to be reasonably comfortable, the civilization will be more stable and successful than one in which people aren’t sure where their next meal is coming from.

As civilizations became more and more complex they developed in ways that betrayed their original purpose. So, there have been civilizations — most of ’em, actually — that allow a powerful few to keep the many in poverty and bondage. Such civilizations tend to be unstable and eventually are busted up, from within or without. The whole point of democracy is to empower the many to prevent exploitation by the few, but it’s clear we’re still working on that.

The bottom line is that civilizations, and their governments and economies, exist to support the lives of humans, and civilizations forget that at their own peril.

The thing that bugs me most about “free market” conservatives is that they assume people exist to serve the economy, not the other way around. Yes, profits are necessary to an economy, but profits alone aren’t the only thing that’s necessary. If an economy is not holding up its part of civilization by supporting the lives of people, it is not a healthy economy.

“My goal as a taxpayer is to see that these companies earn enough so that they return my tax dollars as soon as possible,” Rodriguez writes. And we all want that. But the larger goal is to manage an economy that supports the lives of citizens. Cutting people off from pensions and health care in order to maximize profits may be good, in the short term, for the auto industry. But it’s a losing strategy for a civilization.

Now, we all understand that requiring auto makers to provide health benefits and pensions, not to mention a living wage, to its workers makes it harder for Detroit to compete in the global marketplace. As I see it, there are two basic solutions to this problem. One solution is to do what the other first-world industrialized democracies are doing and give government a much larger role in paying for health care and retirement, relieving the corporations of this burden. This is the “progressive” solution.

The other solution is to demand Americans sacrifice the standard of living and economic stability they used to take for granted. This is the “free market” solution.

Human civilization is struggling to accommodate rapidly changing conditions brought about by a global marketplace and workforce. We’re all on a learning curve here. Business models and strategies that worked just fine in the past are no longer tenable. What is tenable? I don’t think any one school of economic theory has all the answers. We need a broad spectrum of ideas on the table right now.

Going forward, there are two principles to keep in mind. And the first principle is that an economy exists to support the lives of people, not the other way around. A healthy economy is one that enables people to exchange goods and services in a stable and consistent manner. It allows us to work for and provide for ourselves and each other.

Creating wealth is good, but an economy that exists to create wealth merely for the sake of creating wealth, without regard for who benefits from the wealth, is not filling the most essential role of an economy as a function of human civilization.

The other principle is that an economy needs to be flexible in order to respond to changing conditions. Flexibility requires that we don’t cling to narrow, rigid economic ideologies, but are able to keep our minds open to new ways of thinking. It also requires not allowing any one sector to profit at the expense of other sectors, or allowing any one industry to become “too big to fail.”

Put another way, as we talk about what’s good for the economy, we need to remember what an economy is good for. If we forget, our solutions will be no good.

Swat Valley Blues

I haven’t been following events in Pakistan all that closely, but I take it that the Taliban has been allowed to take over the Swat Valley as part of an agreement with the government of Pakistan. No one seems even to be pretending this is going to settle anything.

By all accounts the Swat Valley is a lovely place, popular with tourists. Centuries ago it was the site of a thriving Buddhist civilization. It was said that at its peak of Buddhist influence, the Swat Valley was filled with fourteen hundred stupas and monasteries. Until very recently, museums of Buddhist art and the ruins of temples were drawing many tourists from places further east, such as Japan. There’s no news I can find about what’s happening to the relics of Buddhism remaining in the Swat Valley, and I assume they are being destroyed.

I wrote an article on the history of Buddhism in Pakistan and Afghanistan for the other website that some of you might find interesting. In a nutshell, Buddhism reached Pakistan-Afghanistan — an area once called “Gandhara” — during the reign of the Emperor Ashoka (ca. 304–232 BCE) and thrived there for well over a thousand years, until some time after the 12th century CE.

Among several things I learned while I was researching the article is that the artists of Gandhara were the first to depict the Buddha in human form. Most of the conventions common in depictions of the historical Buddha to this day were invented in Gandhara and then spread to east Asia. Early Gandharan art was in the style of Greek and Roman art and is especially beautiful.

The other thing I learned is that Buddhism and Islam peacefully co-existed in the Middle East for several centuries. Islam reached Afghanistan and Pakistan in the 7th century, and some Buddhist monasteries were still operating as late as the 12th century, although for how much longer after that no one knows. For the most part the Muslim rulers of the area left the Buddhists and their art and monasteries respectfully alone. Buddhism was not forcibly driven out of the Middle East, but seems to have just withered away.

Beside the lost Bamiyan Buddhas of Afghanistan, there were no end of smaller stone Buddhas, cave paintings and other artifacts in the Middle East that survived mostly intact all these centuries — until the Taliban. The real concern is for the living people subjected to Taliban atrocities, of course, but I thought someone should say something about the art.

New Coke

CNN’s John King reports that the GOP is launching a “rebranding” effort today to shine up the party’s image. The initiative is called the National Council for a New America. Its founders include —

  • John McCain
  • Jeb Bush
  • Haley Barbour
  • Bobby Jindal
  • Mitt Romney

Oh, stop giggling and pay attention. Now, this “council” will report to Republican leaders in Congress, and taking part in the launch party today will be

  • John Boehner
  • Eric Cantor
  • Mike Pence
  • Mitch McConnell
  • Jon Kyl
  • Lamar Alexander

I say they don’t need a new initiative. They need new blood. Maybe even a whole new gene pool. Anyway, these dinosaurs will lumber forth from Washington and hold town hall meetings all over the country so that they can listen to the American people.

Whether they will allow nonbelievers to attend these town hall meetings I cannot say. I am skeptical any of them can hold a sensible conversation with anyone who isn’t fluent in “conspeak.” Conspeak is a kind of language substitute created by randomly stringing together standard right-wing talking points and buzzwords regardless of dictionary meanings.

For example — At the New York Times, Adam Nagourney and David Herzenhorn write that Republicans are debating among themselves whether they should be working to create a bigger party or a purer party. Here’s a bit —

Patrick J. Toomey, a former head of the Club for Growth whose primary challenge to Mr. Specter led the senator to bow out in the face of what he thought was a probable defeat, said Republicans should be open to a “wide range of opinions on a wide range of issues.”

As Tbogg says, “As long as those ideas are lowering taxes on the rich, drill baby drill, keeping handguns cheap and plentiful, getting rid of capital gains taxes, and re-naming America ‘Reaganland’.”

“But I think fundamental common ground that the vast majority of Republicans share is the belief in limited government, freedom and personal responsibility,” Mr. Toomey said.

The question of how the party should respond to Mr. Specter’s departure was the main subject of a Senate Republican lunch on Wednesday. The party can be a “big tent,” said Senator John Ensign of Nevada, “but here are some core principles: fiscal responsibility, more personal responsibility, looking for a smaller, more effective government.”

In light of what Republicans actually do when they get their hands on the steering wheel of government, what are Mr. Toomey and Sen. Ensign actually saying?

“Fiscal responsibility” means lowering taxes on the wealthy and cutting programs that benefit the not-wealthy, but at the same time making sure the special interests that helped one get elected are well cared for.

“Personal responsibility” means government is to become primarily a tool for protecting the power and assets of the ruling plutocracy at the expense of the interests of the nation and its citizens.

“Smaller, more effective government” is a government rendered incapable of doing anything not covered by “fiscal responsibility” and “personal responsibility.”

Oh, and then there’s “freedom,” which is a system by which corporations are the landlords and citizens are the serfs/sharecroppers/tenants.

I’m betting that the Council’s town halls will not include anyone not a shill or a true believer.

What Do They Expect?

There are no end of commentaries on the Specter Defection on the web today. The majority opinion from Dems/progressives/liberals is that the Defection might not make much difference in the Senate, short term. They grumble that Arlen is way too conservative, even with a “D” after his name. The real significance of the Defection, they say, is that the Republican Party is coming apart at the seams.

The majority opinion of Republicans/conservatives/troglodytes is “Yeah? So what?”

You know the Defection was a disaster for Republicans when Bill “Always Wrong About Everything” Kristol calls the Defection “good news for Republicans!” What’s coming from the likes of Rush and Lulu are variations on “don’t let the door hit your butt on the way out, Arlen.” And Newt said,

Arlen Specter’s decision to leave the Republican Party in name as he left it in spirit over the stimulus vote is further proof that high taxes, big spending and big government are unacceptable to Republican voters.

This shows us one of the many ways movement conservatives get everything backward. Most political parties exist to represent some part of public opinion. But today’s GOP drives away any part of the public that doesn’t represent its opinion.

In many ways, IMO, the Republican Party is acting like an apocalyptic cult — a small number of true believers waiting for some Big Cataclysmic Event that’s going to change everything, to their advantage. For that reason, present reality doesn’t interest them, because present reality is just a temporary aberration (which it may be, but not in the way they think). Thus, movement conservatives brush off opinion polls that show their positions to be wildly unpopular. They don’t need to worry about election losses, shrinking party membership, an aging political base, or senior senators who jump ship. They don’t need to change with the times. They’ll be vindicated when the Mother Ship arrives. You’ll see.

And they must truly believe in the Event, because they’re betting everything on it. In 2000 they still were shrewd enough to market Dubya as a moderate — a “compassionate conservative” who liked to be photographed surrounded by smiling black children. Now they aren’t even pretending to make adjustments to political reality.

Which brings me to the question — what do they expect? What do they think is to happen that will turn the world back upright (as they see it) and put them on top?

It may be something as simple as expecting the Democrats, and the Obama Administration, to screw up, driving the electorate back to the Right. That’s not an irrational idea, of course. It could happen. But it’s far from a certainty. What if the Dems don’t screw up? Movement conservatives have no visible contingency plans other than doing everything they can to trip up the Obama Administration and make it fail.

We can go to a more fundamental level and think about what drives the Right. The money in back of movement conservatism — the top of the power pyramid — was always about plutocratic control of government and diverting the nation’s wealth into the pockets of the privileged few. That hasn’t changed. The interesting question, at least to me, has always been to understand who on the Right is in on the joke and who isn’t.

I have long believed that the manipulators, the ones with the deep pockets who set the course, stay out of sight, and that most of the visible Right are true believers. And what I suspect has happened is that sometime in the past eight years the true believers started making the decisions and setting the course. Or else, the plutocrats are so dependent on the support of the true believers they’ve manipulated themselves into a corner. Take your pick.

Update and Bonus Question: One of the commenters at National Journal today said the Specter Defection “demonstrates the growing power of the grassroots, conservative base of the Republican party.” In what alternative reality might that be true?