Box Score: Money 2, Value 1

Coming of age in the Reagan era, I failed to understand what I was witnessing. America abandoned manufacturing for services and ended up in a time warp.

As a corporate-level software consultant, my father Karl saw elements of this up close. Invited as a fellow traveler by the president of Wiley & Sons (the journal publisher), Karl sat in on the annual shareholder meeting. A careful investment plan charted growth in assets and employment. During the discussion, the CFO queried, “And what is the annualized rate of return on your plan?” With the follow-on to the response, “I can take that same money and make three times as much in the stock market.”

In that era, the stock market still reflected an investment in other people’s ingenuity. This year, as we approached the election, one Trumpie threatened, “Well, if Biden wins, you can be sure the stock market is going to tank!” The inescapable corollary is that the stock market is no longer an economic bell-weather but an instrument of political influence.

That influence is maintained through the ties between the Federal Reserve and the large banks. We are in the mind-numbing reality that the people that take care of our money no longer profit from making it grow, they profit by making it move. That may seem impossible, but the volume of real estate, trade, and government debt is so enormous that simply the placement fees run into the tens of billions of dollars annually.

The bind for the public is that the money center banks hold no interest in seeing the debt reduced. In fact, the Dow weathered recent financial crises because the Federal Reserve issued borrowing authority that the banks loaned to corporations to buy back stock. The value of stock is now linked to corporate debt.

And in the chaos only the financial system has a guaranteed benefit.

Was this intentional? Hardly, but it was inevitable. This is trumpeted by the liberal economists, but they misdiagnose the problem. I hope with this post to steer them in the right direction.

The liberal economists blame “capitalism.” Capitalism, coined by Adam Smith, is a recent innovation, seeing an effective implementation only in the industrialization of the Western world in the late 1800’s. Capitalism was actually a liberalizing social contract. It held that money and labor could collaborate to improve productivity. Higher productivity meant more money for investors and lower costs for labor. It was a win-win scenario.

Capitalism disproved the precepts of Malthus, who held that population growth would always overwhelm the benefits of productivity gains. In part, however, Malthus was proven right because political power was held by the moneyed noble class. Market control was awarded by royal writ, and once secured ensured resistance to innovation that might lead to diversification of supply. Stability of prices was also important to the nobility and their retinues, often sustained by stipends.

The crack in this hermetic system was warfare, and it was to finance their conflicts that the nobility turned to the banking system, leading to the coupling of political and financial interests that suppressed the development of liberal societies.

So the “Box Score” reads as it is because capitalism is now revealed as a brief interlude in the narrow marriage of politics and finance. It was an interlude during which finance married itself to the production of value and the growth of liberal societies.

Regardless of the outcome, the 2020 election proves at least one thing: that Donald Trump is a symptom, rather than a cause. The disease that created him is a return to the festering myopia of political and financial calculations freed from a concern for value or sustainability. Trump is used as a tool by that system to distract attention from the wizards behind the curtain. He is a live facsimile of the special effects in the Wizard of Oz.

How does this manifest in practical terms? Consider real estate. I was told recently that I had to get in the market, because prices would only go up. Looking over the finance package, I noted with surprise that is allocated 50% of my income to real estate costs, rather than the 30% typical of my youth. So the reason that real estate prices are going up is because the Federal Reserve, through Fannie Mae and Freddie Mac, is issuing loans that allocate more of our income to the payment of interest. The increase in home prices has nothing to do with value – it follows from a systematic manipulation of political and financial levers to ensure that we are indebted.

But the fault is not with capitalism. Capitalism was a God-send. The fault is with something I would call “monetarism” – the pursuit of wealth in the absence of any concern for value.

The economic historian should recognize this plague. What should give pause to the rest of us is the proof, in the results of the 2020 election, that the disease is worse that an out-of-control pandemic that has the potential to kill millions of Americans.

I hope that our democracy survives while our liberalizing politicians adapt to that lesson.

On ProCreation

I could get theological regarding the tyranny of the “pro-life” movement. Read Genesis: “God breathed His Spirit into Adam, and made him a living creature.” Thus “Thou shalt not murder” does not translate to “every sperm is sacred,” it means “do not destroy any creature that has been inhabited by My Spirit.”

How do we know whether a little blob of cells has been inhabited by God’s spirit? Well, if you’re taking a strictly legalistic perspective, I’m certain that you don’t. You are actually part of a self-defeating, law-of-natural-consequences demonstration set up by God after the Flood. In effect, “As you won’t listen to me, try making your own laws, hmmm?”

John tells us God is Love. We are the instrument by which God redeems the world. The Savior was explicit: “I will give you the keys to the kingdom of Heaven: what you bind on earth will be bound in heaven.” If we do not cast our blessing upon something, it is not inhabited by love.

What I do know is using the penalty of law to force a woman to carry an unwanted child is not loving her. If conceived of rape, such a law is in fact an act of hate speech. And any child born outside of a stable union will be denied love, and live in a world of reduced opportunities. The spirit that God sent into the world might actually prefer to wait until those opportunities are accessible.

God gave us a mind so that we could express creativity – and we should recognize that the only thing that separates creativity from destruction is a loving intention. Children should be brought into the world as an act of loving intention. The law has no influence over that process, and should simply keep its nose out of it. That would be the quickest way to render Roe v. Wade irrelevant.

RBG and Roberts’ Rule

The Founders carefully allocated responsibilities among the branches to protect citizens from governmental over-reach. The Executive Branch has flouted those boundaries throughout the Trump Presidency, with Cabinet officers finally acting not as protectors of the Constitution, but as lackeys in service to the whims of the POTUS. In Congress, McConnell has used obstruction to undermine legislative deliberation, and focused on packing of the Federal Courts with partisans – using the filibuster when not in power, and then eliminating it for most positions during the Trump era.

The Roberts Supreme Court was the last holdout in the corruption of the Founders’ intentions. That has been uneven. Roberts hypocritically criticized the House Impeachment Managers for questioning the motives of the Republican Senate in failing to call witnesses, demanding respect for the “world’s greatest deliberative body” that McConnell has corrupted. But at least in the last Court session, Roberts insisted that precedent be honored, siding with the liberal members of the bench when his conservative peers attempted to over-ride prior judgments from his court.

With the death of Ruth Bader Ginsberg, that respect for precedent and the character of the Court is at risk. If Trump and McConnell succeed in seating a conservative ideologue, Roberts will find himself on the losing side in attempting to prevent arbitrary flouting of precedent.

The only method for restoring proper balance on the Court is for a Democratic-controlled Senate to mercilessly impeach Justices for judicial over-reach. The popular expedient – expanding the number of Justices – would be a mistake. Proper functioning of the Court requires thorough probing of the constitutional issues during oral arguments. As more Justices are added, that process will become unwieldly.

No, the proper approach is to erase McConnell’s legacy, just as he and Trump have worked to erase the legacy of our most popular politician (President Obama). Set up the impeachment express, and flush all the Conservative hacks out of the judiciary.

No Turning Back Now

In a nutshell: the last forty years (since Reagan) has been an exploration of the neo-conservative proposition that the only legitimate way to negotiate the distribution of power is the free market. It led initially to deregulation and then “trickle-down economics.” As the evidence mounted that those strategies were failing, the ideologues used their control of government to rig the system so that the subscribers to the ideology enjoyed financial success — a “tinkle-down” economics that undermined the operation of the free market.

What we are witnessing in 2020 is demonstration after demonstration that the profit motive, left unchecked, creates fragile systems that cannot survive disruption. To survive in this era, the public at large will move to make the economic elite irrelevant. That is evident in political exercises that insist “we will take care of those threatened by economic and political disenfranchisement.” Examples include the CARES and HEROES acts, lining up to vote during a pandemic, giving away food and drink to BLM protesters. The elite can attempt to pull the financial rug out from under these efforts, but what they will discover is that it is far easier to nationalize assets than it is to buy them. People without a stake in the system, looking into a future with no opportunity, will construct a parallel economy built around value, rather than profit.

Chief Injustice

When the founders designed the Federal government, they thought carefully about how to ensure that at least one branch would be protected from electoral pressure – the Judicial Branch.

The other branches of government have staggered turnovers: the House of Representatives every other year, the Senate every six years, and the President every four years. The idea was that the longer the term, the more resistant to public pressure. It is for this reason that the Senate prides itself on being the “greatest deliberative body in the world.”

But the federal judiciary serve lifetime terms because they are intended to be immune to political pressure. They need not consider how a decision or opinion from the bench will affect their electoral prospects. This allowed the Supreme Court, early in the history of nation (Marbury vs. Madison), to claim the role of deciding whether the actions of the other branches were legal under the terms of the highest law of the land – the US Constitution.

The founders understood that political actors would use the powers of office to secure their position. In other words, the founders understood that every act by a elected official would have political consequences. In the hoped-for outcome, good policy would lead the voters to re-elect the official. In the unfortunate case, exposure of misconduct would cause the voters to deny the official their office.

Unfortunately, that requires that the misconduct be revealed. The founders again provided diverse methods for that to occur. The first is the free press. The second is the balance of powers: each of the three branches has the opportunity to check misconduct in the other branches.

The Supreme Court is intended to be the branch most immune to pressure when it exercises that responsibility. Unfortunately, it has abdicated that role. Under the guidance of “Chief Justice” John Roberts, the justices selected by Republican presidents have decided that they wish to avoid “political involvement.”

This is absolutely childish. Every act of the federal government has political outcomes. That one party or the other claims a case is “political” is natural, but irrelevant. The job of the court is to decide whether the actions of officials in the other branches is legal under the Constitution. To abdicate that role is absurd, childish, and cause for impeachment. It is the reason that the Supreme Court exists.

This is not idle speculation. The Court, considering the national conspiracy to disenfranchise electors in 2010 (The GoP “Red Map” project), determined that it was “nonjusticiable.” In other words, the Court would not decide whether the plan violated the Constitution right to vote in free and fair elections.

Similarly, the conservative members of the Court have avoided intervention to enforce Congressional subpoenas that are essential to exposing criminality in the Executive Branch.

This injustice is a political act. The chief proponent of that policy, John Roberts, is woefully ill-suited to his role. Claiming that the Court should avoid political entanglements is absurd. When a question of legality or legitimacy is brought before the court, the only criterion that the Court can consider is the Law, with the Constitution as the ultimate standard for legality.

Postal, Going

In the run-up to Henry V’s invasion, the French state was weakened by the reign of a delusional king. Charles VI went through long periods as an alternate personality. The court politics was organized around ensuring access to the king during his initial moments of coherency. The lucky individual had complete control of the affairs of state.

What is pathetic in the current era is the obvious manipulation of our Chief Executive by the unscrupulous. Trump is a paranoid delusional, his antagonism to government reinforced during impeachment by the parade of public servants who came forward to expose his malfeasance.

The fear of destruction justifies all selfishness. In an executive, it is thus the crowbar used to destroy institutions. The characteristic attitude of selfishness is “I do not care what it cost to make this. I do not care how much damage its loss will cause. If I want it, I will take it; and if it threatens me, it will be destroyed.”

Trump’s usefulness to the selfish is no more evident than in his decision to abandon the Postal Service, the largest non-profit public service institution in America. With the threat of universal vote-by-mail kept in the shadows, he manufactured a charge that the Postal Service subsidizes Amazon deliveries. Delivered with absolute conviction – as was his assertion that injecting disinfectants would cure COVID-19 infections – clearly the same process is in play: he was given a brief by someone, and passed the information on to the public as true.

The Postal Service has been under attack by private delivery services for many years. Much as in the health insurance market, they want to carve out the low-cost delivery operations in urban areas, abandoning the rural communities. That those communities, already deprived of health care services, would be further cut adrift and disempowered electorally, is of no concern to them. They simply seek profit.

Indentured to Incompetence

When the Clinton Administration briefed the incoming Bush team, they emphasized the importance of sending a clear response to the bombing of the USS Cole. The Bush foreign policy team sneered, proclaiming the Cole a “Clinton failure,” and went merrily about strong-arming Russia and China to modify nuclear weapons treaties to allow the design, test, and deployment of a nuclear missile shield. Remembering the inanity of the designs promoted during the Reagan and Bush era, I shook my head. Some in positions of influence tried to trumpet warnings: Tom Daschle, Democratic head of the Senate majority, stood on the Capital steps late in the summer of 2001 to voice his concern that the Bush team was baiting the wrong bear.

Daschle’s priority was international Islamic terrorism. It took only a month for his fears to be realized, horrifically, with the event known now simply as “9/11.”

The cost multiplier for inaction was astonishing, and certainly enormously satisfying to bin Ladin and those inspired by his an example. A meaningful response to the Cole would have cost perhaps $10 million. The response to the coordinated attacks on the World Trade Center, Pentagon, and Congress – involving two wars, time-consuming and costly restrictions on travel, and interruption of international commerce – mounted into the trillions of dollars. For every dollar not spent on prudent prevention, we spent nearly a million dollars.

Swallowing their criticism, the rational party accepted the outcome of the Bush Administrations incompetence as “the new normal.”

Today, with the nation’s economy smothered by pandemic, the apologists for the Trump Administration insist that this is “the new normal.” But step back into the last Democratic executive, a man excoriated by Trump’s “Birther” movement, and we see that this is nothing normal at all. The Zika and H1N1 threats were effectively neutered by the Obama Administration. The total number of lives lost was in the low thousands, with no significant impact on the economy.

The lessons learned from those efforts were institutionalized in protocols for international cooperation led by a team directly in the White House itself.

While I respect the Office of the Presidency, my scorn for Trump is complete due to his utter contempt for the office itself. The Presidency is not a man, it is an institutional process for coordinated decision-making and action. Information is fed into the White House and plans flow out. Trump has not only besmirched the office, he has decimated the processes built over two hundred years to empower presidents to accomplish the nation’s goals. The motivation for those willful acts is Trump’s record of corrupt business dealings, evidenced even during his campaign as he attempted to wield his political prominence to influence civil cases already in progress. Once in office, he systematically bent the powers of his office toward destruction of the institutions assigned to prosecute his corruption.

While the politicization of the security and foreign policy services may be the longest-lasting of those institutional rapes, in real time we are finding ourselves again indentured to incompetence in the Executive Branch. Elimination of Obama’s pandemic action team left the world without a leader in the reaction to COVID-19. The early response to the disease has already cost trillions of dollars, and we can expect the death toll to rise toward 100,000 American lives. Millions of jobs have been lost under the weight of business failures. The obligations of missed payments and unfulfilled contracts will take years to unravel in the court system.

And Trump’s supporters shrug their shoulders and mourn “This is the new normal.” No it’s not. It’s the old abnormal. Wake up, and if you’re unwilling to vote for a Democrat, at least stay home until your party can prop up a candidate with at least minimal competence. I, for one, am tired of being indentured to your blind loyalty.

Pandemic and Prosocial Strategies

The Greater Good Science Center at UC Berkeley published an interview with Paul Atkins on principles of prosocial action that will help us to maintain community during the pandemic. The principles and prescriptions are sound. I had a few points to make regarding historical interpretation.


Adam Smith wrote on the tragedy of the commons in “The Wealth of Nations.” His prescription was that government must ensure the well-being of specialized workers made unnecessary by changes in technology. This is an aspect of his humane judgment omitted by the neo-conservative economists that coined the phrase “greed is good” in the ’80s. As Smith was the authority they cited, I think that it is important to honor his opinions.

What is cited as Asian “collectivism” is typical of all agricultural societies. It is evaporating under the opportunities for rapacity allowed by rapid industrialization and centralized political control.

Both phenomena are supported by the original form of “social distancing”: the creation of gated communes for the wealthy that enable them to avoid confrontation with those suffering the consequences of their narcissism. The COVID-19 pandemic is a great leveler of those privileges, as will be the consequences of global climate change. Their preserves, often sited in the most desirable of environments, will suffer the greatest disruption.

“We Will Get Through This”

No we won’t, Donald. Hundreds of thousands of us will get sick, perhaps 100,000 will be unable to resume their previous life because of lung damage, tens of thousands will die.

All because you did not act when the Democratic caucus advised you on February 5th that you needed funding to plan for the outbreak. All because you downplayed the danger and allowed people to continue to congregate. All because you did not act to ensure supplies and equipment were in place.

You can “play by instinct” and do your word salad and monitor your Tweet likes to find out what plays well with your base. You may escape blame. But the hospitals and governors will assemble the numbers and you will be called to account in the next election.

You said we’d “win so much you’ll get tired of winning.” Well we’re dying instead, and even Twitter won’t save you from that contrast when November comes around.

WTFU

I’ll re-iterate yesterday’s point in secular terms. Prior administrations, recognizing the disastrous costs of a future pandemic, established an office directly within the White House to ensure international coordination when new diseases are detected. This reflected recognition that the primary spawning ground is currently Southeast Asia. It is in tracking Asian outbreaks of influenza that we build our current flu vaccines.

Prior administrations used the White House office to prevent the spread of MERS and SARS and Ebola. The Trump Administration, in some kind of “Make America Great Again” isolationist pique, dismantled that office. Thus when COVID-19 reared its ugly head, there was no one to lead the response. Worse, the President downplayed the seriousness of the outbreak, and deflected blame to others when it began to make inroads in American communities.

The end result of this strategy was visible in yesterday’s CDC press release. In the most ridiculous display of sycophancy imaginable, the CDC head spoke fawningly of Trump’s initiative in helping to “flatten the curve” of infection. What this means, people, is that they recognize that the disease is out of control. 60-70% of Americans will be infected, with fatalities up in the high hundreds of thousands or low millions. Their only goal is to slow the rate of infection to avoid saturating the American health care system. If that happens, fatalities could reach into tens of millions.

To characterize this as a laudable outcome is simply absurd. That it is being touted in press conferences is tantamount to admission that Trump behind the scenes is threatening to fire anyone who does not flatter his leadership. He is holding the American public hostage to his ego. Obviously the President does not recognize that he abdicates leadership with statements that he’s “not responsible for anything.” Followed by “someone in my Administration did it,” it’s clear that his paranoia has grown from the “Deep State” to blanket his own people.

Those in the Republican Party who projected this faker into the Oval Office have much to answer for. You should have helped the Democrats throw him out on his ear.