Critique of Republican Laisser-Faire policies

Inside Man
By Joshua Green

From the Atlantic Monthly, April 2010.

One of the great mysteries of the Clinton years is how a team so adept at bringing financial order around the world imagined that it would be a good idea to strip away so many of the rules governing banks and investment firms here at home, rules that dated back to the New Deal. How did Washington get it so wrong?

Much of the thinking about the current crisis goes like this: the problem proceeded directly from the deregulation of the financial industry in the 1980s and ’90s, which was orchestrated by a handful of free-market academics and conservative think tanks that conspired with Wall Street to seduce Washington into going along. That’s true, but it
doesn’t tell the whole story. The intellectual history of the movement to deregulate finance features radicals along with conservatives, and the process began being implemented under Jimmy Carter, not Ronald Reagan. It wouldn’t have happened without Democrats.

Throughout most of American history, banking crises were frequent, debilitating occurrences that ranked as a first-order concern in national politics. Only when the New Deal reforms of the 1930s assigned the federal government an active role in managing risk did that change. There followed a long spell with no major upheavals, and banking receded as a popular concern. The impetus for doing away with regulations that gave every appearance of being remarkably effective came from two distinct realms of the academy that would appear, at a glance, to be extremely unlikely to find accord.

In the late 1960s, conservatives in the University of Chicago’s economics department, led by George Stigler, began arguing against New Deal regulatory agencies on the grounds that the businesses they were overseeing invariably dominated them, with the result that competition was inhibited. This idea was called “regulatory capture.” It became axiomatic among Chicago School types that if regulation couldn’t function as a disinterested public good, it should be abolished.

At roughly the same time, a group of New Left historians, many at the University of Wisconsin, rejected the prevailing liberal view that the Progressive era and New Deal reforms were a landmark achievement in the public interest. What the New Deal had really done, they decided, was sanctify an economic order that favored corporate interests. Their
critique went by the name “corporate liberalism.” Where conservative neoclassical economists and Marxist historians converged was in their desire to “sever the corrupting ties between industry and government,” as Eduardo Canedo, an economic historian at Princeton University, puts it.

The corporate-liberal critique might never have made its way from Marxist historiography to Washington policy had it not resonated with someone who had an unparalleled ability to take ideas from outside the mainstream and force them to the center of public debate, someone who happened to be, right then, at the very apex of his influence: Ralph Nader. In the early 1970s, Nader’s attention was shifting from social regulations like automobile safety to economic regulations. He condemned what he called “corporate socialism,” but added a twist that horrified the Marxists. As a liberal who held no brief for unions,
Nader began attacking government agencies for favoring the interests of business and labor over those of consumers. (Though he dropped his attacks on labor, he continued to advocate the abolition of a host of regulatory agencies, which he wanted to replace with a single superagency.) Jimmy Carter, who positioned himself a notch to the
right of New Deal liberalism, also found appeal in undoing regulations. In 1978, working with the Democratic Congress, he deregulated the airline industry. Rail, trucking, and natural gas followed. It was Carter who struck the first big blow against banking
rules, by signing the Depository Institutions Deregulation and Monetary Control Act of 1980, which loosened interest-rate limits and allowed more bank mergers, and he gave every sign that he would have kept going had he been able to.

Reagan’s victory ought to have hastened what Carter had begun—but it didn’t. Canedo, who studies the history of deregulation, has a persuasive theory about why: opposition from the Democratic Congress. “Reagan wanted to undo not just economic regulation,” he says, “but social regulation—environmental and workplace safety rules—and was so
flagrant with some of his appointees, and the lack of enforcement, that he bred a backlash. It was too ideological.” Democrats recoiled. But liberal antipathy toward Reagan did not abolish the impulse to deregulate; it simply held it in check. “The intellectual orientation
of the mainstream of the Democratic Party in the Reagan years was much closer to Wall Street than anyone admits today,” Canedo says. When Bill Clinton was elected, pent-up Democratic desire, gladly facilitated by the new Republican leadership in Congress in 1995,
unleashed the wave of deregulation that culminated in 1999 with the repeal of the Glass-Steagall Act, the seminal New Deal banking reform.

Posted February 20th, 2010

A friend asked me why I so heavily criticize the Republican Party today, so I felt I needed to give some specific reasons. I came up with nine, listed below.

Reasons why today's Republicans should not be elected to positions of power.

1) Republican Party activists place excessive emphasis on freedom in the marketplace, inappropriately treating it like a quasi-sacred moral value.

They generally over stress freedom in the marketplace in a time when there is too much power in the hands of large corporations. Why is there a movement on the right that places excessive moral value on economic freedom? In other words, why do they give so much weight to it? They are the heirs of Calvin, von Hayek and Ayn Rand. The latter two argue that the individual has a moral right to earn as much money as he can and that altruism has no place in society. But the ability to earn a lot of money is not the moral justification for American capitalism, and no mainstream political thinker ever said that capitalism exists in order to allow individuals to make a lot of money. No social system exists for particular individuals, although the effect of the system of course falls upon concrete individuals. Market-fundamentalists confuse a possible effect (that some will earn great weath) with a rationale for the system (utilitarian ethics). The intent of democratic-capitalism is to create a system of rules, laws and regulations which result in a well-ordered political-economic system. The purpose of this system is to enable more citizens to get their needs met in peace and prosperity than is likely in any known alternative system. This rationale is named utilitarianism.

The free-trade polices in relation to China in place since Clinton's time are a great example of a philosophy run amok. While lowering trade barriers and ensuring that American values were upheld once American firms began outsourcing may have made moral and practical sense, a healthy civilization does not allow a few of its citizens to determine the economic well-being of many others on the basis of a motive to earn great wealth, as is done when a few traders export jobs to China and then import goods whose low prices are made possibly only because Americans values do not have to be lived up to, including care for the environment, child labor laws, the right to unionize, and a decent living by American standards. It is both morally reprehensible as well as pragmatically dumb to allow such a high level of trade with a country that has values that are radically contrary to our own. The only reason we do is because we have allowed a philosophy to dominate which says that the few have a moral right to have total freedom, with no regulations, to do whatever they want to earn a lot of money.

2) Republican Party activists show a poor understanding of the source of a society's ethical values.

The activists who have pushed the Republican Party in a direction of a laisser-faire philosophy are sentimental about the source of ethics in society. Libertarians and free-market conservatives show little understanding of the source of morality in a culture, often believing it to be naturally sustainable. Like many of our English forefathers, secular libertarians in particular seem to hold that Christian values play no real role in making the United States an agreeable place to live! I challenge them to go to India and try to start a business without paying a bribe. The reason for this difference does not have as much to do with the absence or presence of freedom in the market place, but the absence or presence of a value system which comes from a specific Chrisitian tradition, e.g. Anglo-Protestantism. It is dangerous and myopic to assume that a culture's ethics can be sustained in a system which rewards only the strongest in society.

3) Republican Party activists and politicians are beholden to the narrowest of economic interests, promoting a status quo that would make Machiavelli proud. The former do not know this, while the latter do.

The style and substance of argumentation on the American right concerning policy is transparently in the service of narrow interests, e.g. the wealthy and corporations, to a degree that is significantly higher than any other political group or party in the last century. We cannot make claims that one party is totally in the power of private interests and another is not. This would be meaningless. What we can do is observe how much influence such forces have relative to other parties now as well as to the past. The best way to judge that the Republican Party is intellectually shallow and morally bankrupt is by observing the fact that they are making the same arguments they were making in 1982. At that time, these arguments concerning regulation, taxes and the size of government in general may have had some validity. It it disingenous for those on the right to criticize the Democratic Party today for putting the country into debt when they never criticized the Bush administration for enacting irresponsible tax cuts. Their reason for not criticising Bush was, again, not responsible, but in order to avoid "appearing to support the Democrats". But this is all very childish and not a way to govern seriously. Those that argue that taxes are too high or government has too much power over corporations sound as if they have been in a bubble for 25 years and have suddenly come out of it, picking up right where they left off. It is intellectually indefensible to argue for less regulation when banking, television, airlines, telecommucations, among others, have been highly deregulated since 1980. It is not morally or practically serious to argue that taxes should not be raised on upper incomes when the percentage of wealth going to the top 10% is much higher than it was in 1980. All of this is empirical fact, and not a matter of opinion.

4) Republican Party symphathizers in the media appeal to the worst instincts in their viewers, making more profits from the tendency of viewers to get hooked on the adrenaline rush that comes from the anger created by watching or listening to "right wing" talk show.

The public representatives of the Party in the media talk shows make use of appeals to resentment and anger to motivate their viewers. The relative health of the left of center is made obvious if only by the single fact that those on the left rarely listen to such media, even if it appeals to their sensibilities. This fact alone reveals a great deal about the psychology of the respective audiences of the right and left: individuals on the right are generally significantly more susceptible to group think than individuals on the left of center. While it is not politically correct to point out this psychological aspect of the American right, or any "organic party of the right" for that matter, this is a fairly obvious difference between the two parties, one so important that it may in fact determine which party one feels sympathy for.

5) The Republican Party is under the influence of a dangerous social philosophy known as Puritanism or Calvinism.

The underlying religious and specifically calvinist sensibilities of the country are present most powerfully in the Republican Party. I believe Calvinism, and Puritanism generally, is one of the most dangerous forces in the history of humanity. This sensibility is rooted in a deeply held belief system regarding the notion that God chooses to damn some and save others and that this is determined at the moment of birth. The cultural effect of this belief system is that it inclines its adherents to look for victims they can project their guilt feelings onto. The quasi-religious element in the Party’s belief system is the best way to account for the knee-jerk obstructionism to any other political party that does not adhere to this belief. For the most pronounced "sign" of the presence of Calvinism is the attempt to project one's guilt onto an "other", who can too easily become a new sacrificial victim. The proof of the dominance of a false religious sensibility on the right is the lock-step voting patterns. This is indicative of the presence of a motive to reject "the other", not the embrace of a truly religious sensibility. No serious religious group would publically discuss their strongly held political views, as we can witness when we observe the Jesuits. The Republican Party has been effectively taken over by group-think whose function is to preserve group cohesion. But the truth does not always support the maintenance of group cohesion.

6) The policies supported by Republican Party activists and politicians consistently and to a tee have the effect of increasing the wealth levels of top income brackets. Such a pattern tells us much.

The policies the Republican party and its activists support consistently have the effect of making those in top income brackets and corporations wealthier. This again is a pattern or trend that is empirically observable. Patterns do not lie; they are usually not a coincidence, and hence one is reasonable to wonder if these consequences are the true goal of the policy proposals, e.g. Bush's tax cuts. This pattern has grown significantly in the last 20 years relative to the other party's policy proposals. The Democratic Party has been more ambiguous around this issue, sometimes choosing policies which support the highest income brackets and sometime choosing policies which benefit the average person or the poor. The Republican Party to the extent that it enacts policies that consistently benefit the highest income brackets and corporate power creates at least the appearance of pursuing a governing style of Machiavelli, who believes that “might makes right.” The belief that “might makes right” has a long history in the West and is always alive even if in remission. The sentimentality of the American right, which allows itself to indulge in moral fantasies, blinds many of its members to these subtle political phenomena. In this case, the ownership of wealth makes the members of this party - relative to the members of the other party - believe that it is justified morally in the pursuit of policies which simply lead to more of the same. The moral justification again is appeal to a made-up right, the right of the individual to “earn as much as he can” as well as the fear that one is not saved if they do not have a lot of money at death.

7) The political leadership in the Republican Party increasingly shows that it wil say anything to get elected, showing signs of breakdown unseen in modern American history. This owes to the moral fanaticism of activists on the right, who have influence in the primaries.

Those who run for office in the Party, both in the House as well as Senate, increasingly show signs that they will do bad things in power if it keeps them in power. They are also not as bright when compared with their predecessors, in either party. The public pronouncements such individuals make are much more like appeals one would expect to hear in a society where the public had a 5th grade education. The empirical sign of this low education level is appeals to black-and-white thinking and appeals to resentment. e.g. anger at the "other". An additional sign of the breakdown of this Party is a refusal of its politican-members to lead or make decisions which need to be taken, e.g. raising taxes to lower the deficit or dealing with Social Security or health care. But because this group does not take government seriously, it simply allows the federal government to continue to weaken and necessary social programs to whither, even when the possible effect of this is grave harm to the stability of the lives of millions of people. Sarah Palin is the most recent and obvious example of this. It is noteworthy that she abandoned her political polisition in Alaska and immediately began to earn much more money as a spokesperson for a network that makes great profits by appealing to the worst instincts in viewers. It is also significant that no one criticized her for leaving public office.

8) The Republican Party and its underlying philosophy has become nihilistic. This is due to the fundamental materialism of its philosophy.

Their consistent opposition to policy proposals by Obama and the other party are not based on any true principles of good government, but on a kind of nihilistic belief that there is no common good that can be achieved by the country as a whole. Again, it is the fact that this opposition is thorough that reveals the bankruptcy of their philosophy. The use of the filibuster as a regular means of governing is illegitimate morally and untenable practically.

9) The Republican Party is dominated by individuals who have a strong psychological need to hold onto a rigid narrow view of life.

In regards to the so-called religious wing of the Party, the religious right: One cannot focus on criticizing others for moral failings and at the same time claim that one is a Christian. To do so is the height of absurdity and reveals a lack of understanding of Christianity. The individual does not become a Christian by speaking the truth in the public square, as if one is writing a theoretical paper on a topic of science, e.g. as when some refer to biblical text as "proof" that the earth was made in seven days. This is not because "there is no truth", but because the truth of religion in general and Christianity in particular does not exist in the form of theoretical truths as it does when understanding physical nature, e.g. gravity. Religious truth is existential, or practical, in the sense that it is supposed to change the quality of our way of living.

A necessary condition of becoming a Christian is to experience the loss of those things a person psychologically holds onto most tightly, including some version of the truth. But this is precisely what conservative-types find it so difficult to do, and in fact is often the reason they are conservative. In this sense they remind me of the rich man in the gospel who walked away very sad when Jesus told them to go and give up what was important to them. Because conservative types in our culture, if not all cultures, tend to confuse deeply spiritual and moral ways of living with subjective conviction that one is right intellectually about a moral claim, they prevent themselves from continually and repeatedly "letting go" of in the way that a Christian must.

Posted February 13, 2010

The Trap: What Happened to Our Dream of Freedom?
BBC television documentary series

Since the time of Reagan, American society has increasingly become dominated by a radically individualistic, anti-social philosophy. This social, political and especially economic philosophy holds that individuals only care about themselves and that this is good. It is believed to be good because such self-interest is felt to lead to increased order and stability. This philosophy is a great example of the power of the Enlightenment: very intelligent, creative people can be influenced to adopt a philosophy even if it argues that people are basically selfish and that society is a place in which this selfishness is acted out. The appeal here for the intellectual is the ideal of a system. The attraction is the hope that we can apply one principle to society and make it function like an organized machine. This is the same spirit that animated communist idealogues of the first half of the 20th century. The susceptibility to being attracted by a (misguided) hope for self-running political-economic systems has always been the weakness of modern Western and American intellectuals, as witnessed in the 20th century in the form of Communism and Nazism, and now in the United States on the free-market/libertarian right. These movements have the same thing in common that all radical movements in those societies born of the Enlightenment share: they are inspired by a deep hope that human beings can apply a single principle to social organization and thereby lead us to a kind of perfection never before seen. (While many on the right tell themselves that they do not want to apply a system to control society, this is besides the point. This is an effective form of denial, but it does not matter that its adherents tell us or themselves that they love freedom. There is always a tremendous dinimishment in true freedom when such philosophies take hold.) The socially important fact for us is that intellectuals under the influence of the hope for a system that runs automatically on the basis of one principle are essentially moral fanatics. They are fanatics of the Enlightenment sort, a kind of fanaticism that is particularly difficult to diagnose. But as with all fanaticisms, from the Inquisition, the Salem Witch trials, the Nazis and Communists of modern Europe, we can be confident in our judgment that such fanaticism is becoming influential in society when we observe increased breakdown along economic, political and moral parameters. Such a breakdown has been increasing since the American "conservative" movement began pushing its anti-social understandings of freedom in the name of a hoped-for perfect system which will run itself on selfish motives.

Because it should strike any thoughtful goode citizen as strange that a political movement would actively embrace a philosophy that says selfishness is good, it requires explanation. More needs to be said. Why would otherwise serious intellectuals and activists embrace the assumption that selfishness as the sole organizing principle in social, political and economic life is good? The typical leftist response that money is the sole motive of the powerful is unhelpful and doesn't explain adeqately what we are witnessing since the 1960s: the replacement of a quasi-Christian social philosophy in the United States with a purely political philosophy born of the Enlightenment with its utopian hope for a society organized perfectly around one rational principle. The key to understanding this movement on the right is to observe the two closely related assumptions of those who favor it: 1) human beings are merely individuals and have nothing in common with each other, and 2) the essentially anti-social assumption that people are merely self-interested is seen as good for the reason that if applied practically, it leads to order. The moral judgment that this assumption is good is, again, the key to understanding the movement.

Here's the rub for us: because philosophy creates civilization, this philosophy has led us to a society in which its assumption are becoming truer. Our society is not more selfish because "people are selfish". as it believed by this movement. People are not selfish because this is natural, as we can witness in robust religious communities and African villages, for example. Our society is becoming more anti-social as witnessed by its business practices and anti-union attitude in particular because its underlying philosophy says people are anti-social. The United States is increasingly guided by the principle of "winner take all". Amazingly, in the series I reference here, James Buchanan, a significant thinker on the right in the 1970s, calls anyone who cares about the common good a "zealot". He shows he understands something important about Western political philosophy when he focuses on zealotry, and I've argued that zealotry or fanaticism is to be avoided. But I've also argued that this zealotry has shown up more powerfully in our society on the free market and religious right, not the left. Zealotry never had any power on the left in America, or in Europe for that matter. Destabilizing zealotry has always come from the Right. This is another paradox, given that this movement is motivated by an over-emphasis on social stability!

I have three sets of links below beginning with an excerpt from the Wiki page.

The Trap: What Happened to Our Dream of Freedom (television documentary series)

All these theories tended to support the beliefs of what were then fringe economists such as Friedrich von Hayek, whose economic models left no room for altruism, but depended purely on self-interest, leading to the formation of public choice theory. In an interview, the economist James M. Buchanan decries the notion of the "public interest", asking what it is and suggesting that it consists purely of the self-interest of the governing bureaucrats. Buchanan also proposes that organisations should employ managers who are motivated only by money. He describes those who are motivated by other factors—such as job satisfaction or a sense of public duty—as "zealots".

Link to videos

Link to book review

Posted December 28, 2009 - Remarks on the "nanny state"

I keep thinking about one comment a friend made about not liking the government being a “nanny state”. Here are some distinctions I think are useful around this issue.

Americans have a difficult time imagining that they can act as a group, and not only as individuals. I would only call a “nanny state” a government that was involved in 1) repetitive transfers of wealth to individuals over time, and 2) such transfers going on across the board, and not merely in selective cases - e.g. social security as a limited program, and 3) the promulgation of regulations that are not based on any rationale, e.g. the kind noted below.

The need for making a decision as a group - e.g. you and I and many other individuals together - arises when the incentives that motivate those most able to get what they want, assumed to be wealth and status by political theoreticians, are at odds with the well being of the large majority of citizens. I have become increasingly convinced that the ongoing slow-motion breakdown in the American economy as well as political system can be understood around one simple concept: incentives. The American right understands incentives when it comes to the profit motive, but they seem just as simple-minded about incentives as the left used to be about profits when it comes to other kinds of incentives - those arising from the lack of good regulations or no regulations. The basis of modern political economy is the assumption that we can collectively influence the incentives of those most motivated to get what they want in a way that maximizes material well being and order for most, if not all, citizens. While 30 years ago it was possible to say that "what is good for GM is good for American", today it is not only not possible to say this, it is not even possible to assume that the actions of a CEO are good for his own firm! The market is not the same thing as a state of nature, and we can and do set up 'rules of the game'. By contrast, the kind of libertarian and free-market ideology that has developed in the last 20 years, inspired by Ayn Rand and the Austrian school, claims that freedom in the economy is a moral end in itself and that therefore, 'rules of the game' are not morally or juridically legitimate. When this set of related assumptions dominates the thinking of policy makers and activists it becomes nearly impossible to treat regulations as a normal part of a well ordered society. The notion that freedom in the economy is a moral absolute raises it to the level of the sacred. Twenty years later, I am still seeing references to the magic of the “invisible hand” in conservative journals, as if they just discovered this mechanism! There is a time and place to theoretically focus on this or that aspect of policy, and now is not the time to stress "freedom in the market place" or the claim that "big government is bad". Such claims suggest an over emphasis on certain Enlightenment principles grounded in the notion that only universally applicable policies are valid as well as blindness to history and current reality. Since conservatives are interested in spiritual and moral issues, they ought to be aware that the most significant problem with treating economic freedom as a moral absolute is itself a spiritual issue: it is idolatrous. Here’s a rule of thumb in a nutshell from mainstream spiritual thinkers: Whenever we make a man-made good into “the most important thing”, we will lose it. (Addictions can be understood in light of this claim. When one is addicted to something, they make a 'man made good' into the 'most important thing'. Many Americans make money into their 'most important thing'.) I believe that the Americans - to the extent that they are awash in radical free-market philosophy - are at risk of losing the material well being they have collectively earned over a long time period, because they have allowed freedom in the marketplace to become an idol, so to speak. (The government intervention since the Crash is a deviation from a much bigger influence in the culture coming from the philosophies just noted. We will revert to a laissez-faire spirit pretty quickly I am predicting. I have strong doubts that serious regulations of banking will come out of the bill pending in Congress. And the more serious problems in health care involving broken incentives are not touched by the current bill.)

Examples where we can and morally ought to intervene in the market-place as a society; as a group:

- Imports from China. They are out of control. Ex: Toxic wall board flooding Louisiana after Katrina from China. There are no more American sources of wall board! To top it off, individuals cannot sue the companies involved, because one of the rules of the trade agreement is that this cannot be done! This is a loss of true freedom. It is mere ideology to claim that the only freedom that counts is the freedom of traders. It is not a “nanny state” to regulate such imports and prohibit them when necessary. It is rational and moderate and normal. By contrast, it is cruel to effectively take away the only means of earning a living for millions of people are have no college education, which is what is happening as a result of Clinton opening the American market to China. But no one, including Obama, is suggesting a problem with this approach. Slowly opening the market would have been one thing, over 50- 100 years. Opeining it all at once is quite another, irrational and harmful to the well being of the nation. But a more reasonable approach would not have given immense profits to a few traders, as they would have been dead! Let us not, however, pretend that the policy is good for "all". It is not, clearly. The quality of life in the US has declined and the economic well being of millions of less educable individuls has been harmed as a result of radical freedom in international trade. (The fact that the US runs a trade deficit with so many countries is another sign that American policy is excessively influenced by an unholy alliance of free-market fundamentalists and the usual suspects, those who care only about profit and status.) It is a lie and mean-spirited to say that "all" should or can "make it on their own" in any literal sense! The moral force of this "all" claim is grounded in the Enlightenment, and is fundamentally miguided.

- Legal Drugs: The US is the only country that does not regulate drug prices. So this means that American citizens end up subsidizing all other countries drugs insofar as the drug companies rely on the money of American citizens to be motivated to make the drugs. This is obviously unjust. “Conservatives” can’t be seriously arguing from a position of moral right and claim that this situation is okay.

- Both Democrats and Republicans have refused to allow the federal government through medicare to negotiate drug prices with drug companies. This implies that they work for these companies rather than the nation as a whole and millions of American consumers. The argument: This would amount to price controls. The real radical position is the position that says “keep the status quo”. It is owing to their rigidy concerning regulations that they claim that the present situation should remain.

- Banking: The media has not clarified and done its job in explaining some simple causes in the Crash. The Fed lowered the reserve requirement of banks from $1 for every $12, to $1 to every $32. This is the single biggest factor in allowing excessive money to flood the market, creating a temporary bulge in demand for housing that could not be sustained.

The regulation as they currently stand allow banks to collect late fees when mortgage holders are behind on their payments. This has been the biggest factor in making the attempt at renegotiating the terms of mortgages fail. Since the banks are to blame for the present situation, they have moral and practical obligation to renegotiate terms of mortgages. But they won’t, unless there is a clear regulation. And they have not so far. The percentage of mortgages in default that have been renegotiated along the lines the Obama Administration wants is less than 10%. This is no nanny state, it is a state tipping towards upholding the interest of those good at getting jobs in banks and milking an unjust system.

The general rule of thumb: Regulation must to the extent feasible and within reason prevent business practices that are at cross purposes to the interest of society. This might mean, in this case, that they cannot charge late fees for longer than a certain number of months.

All of these examples involve individuals seeing that they can get together as a group to create laws that make society a better place to live. This is neither utopian or “absolutist”. The current situation is utopian and absolutist - the situation where the “few strong” have been able to get their way for too long now. We have seen the cost in people like Bernie Maddof. That situation should never have been allowed to happen. It is crazy that this situation was allowed to go on for as long as it did. It would be a nanny state if the government was watching every move of a firm. It is not a nanny state for regulator to be looking for patterns that are clear signs of something wrong, whether ethical or practical. It is common sense and prudence, as well as moral and principled in the true meaning of these terms.

Posted December 23, 2009:

Important article in New York Times Magazine on culture, sex and marriage. I've been arguing since the 1970s that the relativism of the left could never be a strong foundation for healthy culture and that it would still lead to a destabilizing reaction on the right. This reaction would be harmful in ways that would make the left wish they had not opened the genie bottle of moral relativism.

The writer discussed in this article is apparently looked at as a serious thinker in Catholic conservative intellectual circles. I tend to agree with the critique below regarding Anglo-Saxon morality: it is laregly based on feeling or sentiment. Contrariwise, George's argument is attempting to resurrect a natural-law foundation for morality. But I have a hunch he is overly ideological and is not adequately taking into account various movements in modernity that are both good and true. When I read about him in this article, I later was brought to think of 1 Corinthians 13, and in particular: "If I have the gift of prophecy and can fathom all mysteries and all knowledge, and if I have a faith that can move mountains, but have not love, I am nothing. " Whenver I read the conservatives more generally, I keep feeling like they are afraid of something deep inside themselves. I continually sense they would be afraid of Jesus coming up to them and accepting them just as they are. Here is some text from the article discussing George's thinking as it relates to the American Catholic conservative movement. In this excerpt, George is critiquing Hume:

Excerpt from "The Conservative-Christian Big Thinker," in the New York Times Magazine, Sunday, December 20th, 2009.

Aristotelians, like St. Thomas Aquinas, hold that there is an objective moral order. Human reason can see it. And we have the free will to follow or not. “In a well-ordered soul, reason’s got the whip hand over emotion,” George told the seminar, in a favorite formulation borrowed from Plato. Humeans — and in George’s view, modern liberals are usually Humeans — disagree. Against Aristotle, Hume argued that the universe includes facts but not values. You cannot derive moral conclusions from studying the world, an “ought” from an “is.” There is no built-in, objective reason for me to choose one goal over another — the goals of Mother Teresa over the goals of Adolf Hitler, in George’s hypothetical. Reason, then, is merely a tool of whatever desire strikes my fancy. “Reason is and ought only to be the slave of the passions and may pretend to no office other than to serve and obey them,” George said, paraphrasing Hume, just as he does in seemingly every essay or lecture he writes.

Posted November 22:

Remarks on "Precious"

I saw "Precious" recently. It had gotten attention at the New Orleans Film Festival, and I had to see that it wasn't a "teenage girl movie" before I was motivated to take it seriously. I highly recommend it. It regards a young girl growing up in Harlem who is sexually abused by her father and emotionally and physically abused by her mother. There are two aspects to the film that I thought made it highly worthwhile and effective. The style of filming powerfully conveys the inner experience of the young girl, and both her response to her situation and the overall portrayal of that situation make for a very good proportion each of realism and idealism. Capturing the right amount of each is a key task of American film makers today.

I continue to be impressed with the way many American film makers capture something unique about human life in a way not done by other cultures. There are two aspects to what I understand American film makers to be doing: 1) A treatment of and focus on human relationships as the fundamental reality in human life. This focus has both a descriptive as well as prescriptive element; and 2) a focus on a subjective experience of reality, often through the eyes of a protagonist. The key concept here is "reality". "Reality" in this paradigm is in contrast to "Ideal". This trait then, stressing an "experience of reality in the context of relationship", is in marked contrast to the older emphasis by American film makers of glossing over and quite consciously "concealing" reality, with this gloss being the central feature of American film at this time. (Compare, for example, the American version of 'Carousel' from the 1940s to the British-inspired Broadway version from 1994.) This glossing- over-reality can be seen in the tradition of placing the words "The End" at the termination of a film, the lack of stress on good acting, the general tonality of unrealism in the story-lines, and the lack of relationship of story-line to any psychologically or spiritually deep understanding of what it meant to live a good life. Perhaps the most important film to capture this aspect of American civilization is "The Wizard of Oz". It is not a contradiction to point out that this film is also one of the deepest to come out of Hollywood. The pre-1970s stance of the film maker and writer as one responding to the American psyche, had to assume that this psyche believed that will alone can create reality; that the Ideal can become Real. This way of being in the world can be beautiful and powerful, and it has roots in both Plato and Kant. It is accurate to see our ideas as having efficacy; as believing that our attitude can shape our lives. I see myself as quintissentially American in this respect. But when the content we use to make these ideals concrete in our lives is not connected to any morally, spiritually or psychologically robust understanding of human life, this way of being in the world is likely to become disordered. In this case, the conscious disconnect from reality begins as an expression of willfulness and pride, eventually transforming into small-mindedness and its attendant isolation and fear.

Since at least the late 1960s, most artists and writers in our society have consicously and quite deliberately taken a very different stance towards the real and the ideal. It isn't that they are anti-ideal, or "cynical" or "negative", as many Americans will perceive any film or public discussion that gets too close to some subject matter that goes against the tone of that attitude endorsed by a major national political party. Whenever one is exposed to a public discussion of ideas, fiction or non-fiction, film or writing, and responds by feeling "this is negative", it may be that you are experiencing and expressing an important part of our civilization: the high priority placed on "being positive"; on possibility; on the idea expressed in that well known song, again from the 1970s, "if I can make it here, I can make it anywhere". Again, such positivity; such idealism, and any claim that "attitude" matters is good and true.

This way of being in the world becomes a problem and even detrimental to our psychological and spritual well being - as well as economic I may add - when as a product of this cultural trait we find ourselves consistently avoiding any focus; any attention on portrayals - fiction or non-fiction - of those apsects of human existence that bring us as individuals to experience our own limits. We often treat our limits as if they are purely relative to a social context - e.g. I may feel badly that I have not achieved some goal while comparing myself to another in a negative light. But the harder limits to face are those that are part of human life itself; part of nature. When we are open to reality in this latter sense, then we become open to the possibility of grace. But only then. This possibility, a possibility that I believe is deeper and richer than that kind of possibility stressed so much in American culture, entails being somwhat humble and mindful of tendencies towards willfullness concerning my "ideal of life".

The belief; the sensibility, that my own sense of happiness; my Personal Ideal of Life, is the totality of Reality is an affront to goodness, truth, and reality. Moreover, if anything makes God lonely, it is such an attitude. It is worth repeating: the notion that my inner subjective sense of Life is the Limit of the Real develops and takes root in us to the extent that we allow our idealism; our positive attitude, to bring us to dismiss or ignore any fictional or non-fictional presentation of reality that does not fit with our own Idea-of-Life. When an Idea-of-Life makes me shut down in the face of truth, then my Idea-of-Life has become a force for falsity and keeps me from truth and goodness. Such an approach to life keeps me from true relationship with others. I cannot be in true relationship with others, including those closest to me in my life, if I heavily stress the Approved Ideal, for no human being can, does or should live in the way prescribed by the form of idealism dominant in our society since 1980, one which defines itself in opposition to truth. (There is not the space to discuss the political reaction beginning in 1980 to the intellectual movement begun earlier on, the latter against what we might loosely term "shoddy, or false, idealism" and the former an attempt to sustain this at all costs.)

The single most influential way in which our culture has harmed us in its idiosyncratic stress on an ideal is in its tendency to avoid any consistent, in-depth focus on reality, no matter what aspect of reality. There is profit to be made in the cultivation of this trait, and once the media age began what was heretofore a benign and somewhat healthy cultural trait has transformed into what is for a significant part of our society a tempting illusion that makes it very hard to remain faithful to actual truth. In the final analysis, as one writer has put it, "happiness is the hiding place of despair". When the artist or writer responds to such a situation, if we are patient and to the extent that we are open and receptive, we might become more truly human and thus live better lives. The nature of our civilizational weakness - noted above - makes it more difficult, however, and less likely that the American will be receptive in this manner. It is the job of the artist and writer to bring to light those aspects of the culture which either "gloss over" the good and the true, and to work on "unconcealing" those parts of our lives that, in some profound way and for some ulimately unknowable reason, we put great energy into keeping hidden from view. The front-lines in a culture-wide movement towards such unconcealment and "truth seeking" is the making of the sort of film that "Precious" signifies. In a society that stresses "being positive", where positive content becomes a way of concealing the true, the first part of a movement away from this will necessarily appear to be "negative". But this is only an appearance, and one that we would do ourselves well to move beyond by heeding art that shows us another way of living.

Posted October 1, 2009.

Here's the primary economic issue Americans confront today in a nutshell:

Globalization and the free-market fundamentalism preached as a religion by the American right, a force which has never admitted it was wrong about anything going back to the Vietnam War and McCarthyism and today, Iraq, threatens to leave us in a situation where the "few strong" once again have power to set the rules of the game. The United States has enjoyed prosperity and relative stability since the Great Depression mostly because the Depression created the political will to establish clear rules of the game in the form of robust regulations of finance/banking. (See article in First Things - a conservative quasi-scholarly journal on the willful resistance of the American government to properly regulate banking in the last decade). This political will has been eroded by a combination of intellectual types and activists who argue that economic freedom is a moral good and "the few" central to Plato's analysis of the structure of societies which fail to apply reason-based standards to politics. In the 20th century, a good example of applied reason is the kind of regulations which guided the American economy up until the 1990s. The function of rules and regulations is to protect us from the "few" diagnosed by Plato. In our day, these "few" show up simply as those who want the freedom to earn more money no matter what the effect is on the larger society. It is odd that so many argue for this freedom, even though they themselves would not engage in the relevant activity. It is a clever lie to insinuate that any argument for regulation of the banking industry or a reform of health care is "socialist" or "Marxist".

One of the greatest sources of instability in the West since the time of Reagan comes from Anglo-American economic culture, which has become excessively laissez-faire in the economic realm and remains so one year after Obama has been elected. The "dark side" of this culture has gained more of a foothold in our nation in the last 15 years especially, and I mark the Republican "Contract with America" as a turning point away from moderation towards the intrusion into our political life of a fanatical spirit. Very powerful cultural, political and economic forces in our society today assume that they have the moral right and ability to assert that the profit motive alone should guide society. It does not help that for profit "news" outlets have learned that hiring hosts who are deft at whipping up moral indignation creates a compulsion to watch and listen to "conservative" talk shows in enough people to bring in significant advertising money. Thirty years after we were taught that there is no truth, we should not be surprised that a whole industry has grown up on the basis of telling listeners that "truth exists and we will tell you what it is." The American right today manifests as a sublime expression of Nietzsche's claim that "Men would rather live for Nothingness than nothing." Their party exemplies a nihilism not seen since the early 1930s in Germany. In this post-relativist context, any variety of destructive assertions can be made by those with no training to guide public policy, all with the common theme that "government is bad" and "we have our rights". These voices seek to cultivate resentment of listeners against imagined elites, while they in fact are financed by the "few" who are the actual elites, "elite" being simly another word for Plato's "few". It is ironic, then, that the American right has no respect for truth and reason, and is in fact the true child of the radical relativism of our recent history. Its moral passion blinds it to the truth of its own status. While the left of center shows a degree of respect for civil society and ethical decision making in economics and the environment, the American right has been transformed into a rebellious teenager who thinks that if he just yells louder he will not have to face the truth. The fact that this party sees itself as "for the truth" in a way which never resonated on the left of center makes it that much more difficult for a true transformation to occur within it, a transformation that would have to start within. Glen Beck and Rush Limbaugh are the poster-children for a deep resentment hiding behind the pretense of moral indignation. (See transcript by Ron Tannenhaus regarding his book "The Death of Conservativism")

So if freedom is not the only or even highest moral value that should guide economic activity, how do we learn this? We learn that there are limits to freedom when we start trading with other cultures that have lower ethical standards. One example: Shrimpers in Louisiana losing their jobs because the shrimp from Thailand is cheaper. What is not taken into account by a tarriff regime that enables shrimp to be imported is that the shrimp may be unhealthy, and that the conditions under which it produced may be both unethical and illegal within American society. Another example: After Katrina, many homes in New Orleans were rebuilt with wall-board from China which it turns out are toxic. That this has been allowed to happen is on its face value irrational as well as unethical, but it nonetheless happens because we have allowed a philosophy that says "economic freedom" is the only moral value that matters. If economic freedom is the highest moral value of this society, then cultures which have lower ethical standards must gain influence and wealth, while those with enforced higher standards must decline. (See the flip side of this in an article on European firms exporting toxic waste to the third world to escape European regulations.) The winners in an international system in which society does not collectively enforce rules of the game are the Platonic "few", those who are motivated by a desire to gain somewhat in the way an addict is motivated by a desire get another hit. It is important to note that those who argue for total free trade effectively have no ethical values, for if they did, they would not promote or engage in activities that employe young children, pollute the environment, cause fellow citizens to lose their livelihood, lower the quality of life at home, increase the trade deficit of their own nation, simply because they are under the trance of a "fixed idea" (French: ideé fixe) that freedom is all that matters or because they have the talent to build an import business. To really argue that we should be able to import shrimp from Thailand in the name of freedom and saving some money on a purchase is materialistic, irrational in the long run and anti-social. It is not rational to choose a policy that harms those we live close to and with whom we have something in common: our society! The libertarian claim that all we have in common is our individuality is a semantic sleight of hand, and meaningless. Such arguments come from a time when the British traded within a narrow cultural realm where those involved in economic activity had similar ethical values, e.g. Christian. To argue that freedom should trump ethical values in international trade implies a society no one would consciously chose to live in. The moment one thinks through the logic of an international or domestic market system without the ability to apply robust regulations, one sees more clearly the meaning behind the term "race to the bottom." In addition to the shrimp example, we can apply the same argument to all other low-skilled/low technology jobs such as textiles in the American south. Free trade can only be rationally carried out within a framework that robustly enforces ethical standards, including care for the livelihood of the less educable. To suggest that we are all equally educable and to base policy on such a sentiment is mean spirited.

Did I see a glimmer of hope coming out of Pittsburgh regarding the need for ethical standards applied to the world economy? The article below suggests the US and other nations may actually allow each other to act as a "check" on their own dark side. Regulations and rules of the game are essential for long-term economic well being for "all men". While the American right today claims it cares about the "little man", it is obvious that their rhetoric, a rhetoric which not coincidentally in recent times tends to support private corporate action, increases the wealth of a very small percentage of the society while harming the stability of the culture we all live in. Economic freedom does not exist for the sake of a few, although it does make it possible for a few to become wealthy. There is no problem with the latter. There is a serious threat to civilized society when the argument is made by corporate-backed talk radio and TV that the moral purpose of freedom is to allow "the individual" to earn great wealth. This is false. No philosopher or founder of the U.S. ever made such a claim. The American right - which today is functioning much like the "Know Nothing Party" of old, continues to fail to understand this distinction at their and our peril. Speaking up to reclaim a role for reason-based regulations is an essential today.

See article here : Leaders of G-20 Vow to Reshape Global Economy

Excerpt with emphasis added:

The ideas are not new, and there is no enforcement mechanism to penalize countries if they stick to their old habits. But for the first time ever, each country agreed to submit its policies to "peer review” from the other governments as well as to monitoring by the International Monetary Fund.

That in itself would be a big change, given how prickly national leaders have often been toward outside criticism of their policies. American officials, who pushed for the plan during weeks of negotiations before the summit meeting, argued that governments were so shocked by the economic crisis that they were willing to rethink what was in their self-interest.

"I’m quite impressed,” said Eswar S. Prasad, an economist at Cornell University who had initially been skeptical about the proposed "framework” for stable growth. "A commitment by the U.S. to take the process seriously is a potential game-changer that would give the framework some credibility.”