Tfgray’s Weblog

I read an article recently that said that sales of Ayn Rand’s books were off the charts, particularly Atlas Shrugged, 50-page infodump of Objectivist philosphy and all. Then I read this article:

Thoroughly Modern Marx by Leo Panich. Foreign Policy Magazine, May/June 2009 

And you know what? Sale of Karl Marx’s doorstop, Das Kapital, are likewise soaring.

I suppose it makes sense. Capitalism is in an existential crisis, and people are looking to source material to make sense of it. (Bible sales up, likewise.)  Do take a few minutes to read the linked article. I’d read Rand, but not Marx (being more of a Groucho fan, myself) and found a few jawdropping thoughts in Leo’s article. A few choice quotes:

Such a system [capitalism], he wrote, “leaves no other nexus between man and man than naked self-interest, than callous ‘cash payment.’” Indeed, capitalism leaves societies mired “in the icy water of egotistical calculation.”

In other words, Marx refuted Rand a century before she wrote her magnum opus. Interesting. But my favorite is this one:

The resulting social isolation creates passivity in the face of personal crises, from factory layoffs to home foreclosures. So, too, does this isolation impede communities of active, informed citizens from coming together to take up radical alternatives to capitalism.

Marx would ask first and foremost how to overcome this all-consuming social passivity. He thought that unions and workers’ parties developing in his time were a step forward. Thus in Das Kapital he wrote that the “immediate aim” was “the organization of the proletarians into a class” whose “first task” would be “to win the battle for democracy.”

Yes, you read that right. Win the Battle for Democracy. Marx, Carl, founder of Communism. Interesting. But didn”t the original  NeoCons start out as Marxists?

It’s even more interesting that those who today are most eager to establish Democracy worldwide just happen to be those who are dead-set against labor unions. This brings me to a point that I first noticed decades ago:

Democracy has become a code word for subservience to American business interests. That’s where the real battle is now, and in fact has been for the past forty or so years.

There are games being played with language, ones that George Orwell noted over half a century ago. So the question is, will we start paying attention?

Well, there you have it, Glen “I am not a racist” Beck is calling for the Republican areas of the country to secede. I don’t know that it’s necessarily racist to want to leave the US after Obama’s election. It could be simple paranoia.  I can think of a few folks on the Left who contemplated moving to Canada when Reagan was elected, and then again in 2000. That’s the difference between the Right and the Left. The Right wants to keep their real estate.

Still, what would happen if the um, Rightward States seceded? Well, first off, which states are rightward, and how many of them are rightward enough to waltz on out the door? I suppose Glen is envisioning that broad swath of red on the electoral college map, but I suspect the most likely would be the more limited area where Republicans actually picked up vote share a couple of Tuesdays ago: southern Appalachia, the Ozarks, and Oklahoma. Oh, and Alaska, where Governor Palin would presumably be crowned Queen Sarah.

What are we looking at? Well, we’d lose the Kentucky Derby, Jack Daniels, and a couple of Saturn and Toyota plants. We’d lose a bunch of coal and Alaska’s twenty, no, fourteen, no three percent of our energy supply. We’d lose the ability to protect ANWAR from drilling and to enforce safety and environmental standards on a lot of coal mines, and that all-important back porch view of the former Soviet. They, as traitors, would presumably lose their Social Security, Medicare, Medicaid, Food Stamps, ag subsidies to farmers, Head Start, and various pork barrel projects, like roads, schools, and dams. They’d lose a bunch of military bases, too, along with the businesses supported by all those G.I. paychecks. I think Glen would be over-optimistic to think that all of the soldiers sworn to defend the Constitution would go over to the anti- side, even though Robert E. Lee did. And those who did would, of course, lose their paychecks anyway. Still, the Rightward side is generally agin’ all those things, except for the military, so they probably wouldn’t miss them. They’d still have Walmart. They could plant gardens. And if they genuinely are racist, maybe they’re thinking they can get the black folks to tend their gardens for them, maybe they’re thinking that said folks wouldn’t either leave town or fight back.

I suppose they could get pissy and try to blockade the Mississippi or some such, but that’s what a Navy’s for. Gunboats on the river blasting away, protecting the barges full of grain on their way to blue-tinged New Orleans.

But look at the upside. Without Alaska’s oil and Appalachia’s coal, we’d be forced to develop alt energy sooner. Without Alaska, which sucks up far more government funding than it provides in taxes, we’d have a little more money to do all kinds of things with. In fact, a quick trip to www.taxfoundation.org reveals that those states with increasing redness are all doing quite well under our current pointy-headed liberal tax and spend system. Here’s how much each of those states gets back for every dollar of Federal tax paid by its citizens:

Alaska                                                $1.87

West Virginia                                      $1.83

Mississippi                                         $1.77

Alabama                                             $1.71

Oklahoma                                          $1.48

Arkansas                                            $1.47

Louisiana                                           $1.45

I don’t know. It’s hard to tell what’s really going on when TV talking heads come up with these notions. Does Beck even halfway believe what he’s saying, or is this just a way to catch a media buzz? Or is Fox, Beck’s new home, now the face of Treason?

But maybe he’s on to something…maybe we do need to cut loose of those parasites sucking on the government titty. If you look at the Tax Foundation’s map, you’ll see that all red states, with the exception of Texas ($.94) and Georgia ($.96) get more from the Feds than they pay in federal taxes. A smart response to secession would be to close all the military bases, removing all personnel and ordnance, cut off all Federal funding to rebel areas, and wait. I’m thinking the rebellion would be over two days after the Social Security payments failed to show up in old folk’s checking accounts. In fact, reducing Federal spending to an amount equal to Federal revenues collected might just be a good bargaining point for readmission.

Be careful what you wish for, Glen.

One:

Obama will have effective control of the government by the end of the year, possibly sooner. I’m not meaning this in a bad “he’s staged a coup” way, but in response to two facts: first, there happens to be a many-faceted diamond of a crisis going on right now, and second, the Bush Administration and it’s many minions aren’t doing anything about it. One might excuse this as evidence of their belief in the Libertarian throw-the-baby-in-the-creek-and-see-how-fast-he-can-learn-to-swim theory of economics, but I can’t help but notice that our current leadership is obsessed with wringing as much out of the situation for their own interests as possible (their own interests being that of the American corporate world.) While Wall Street burns through trillions of OPM, Bush focuses on executive orders that will gut the Endangered Species Act, give Big Oil more virgin acres to ravish, and put nukes next to the Grand Canyon….oh, and implant their Regent University grads in the federal bureaucracy so as to continue their obstruction of the work of numerous agencies. (Prediction 1-a: Look for lots of lateral transfers to basement offices after January 20 and the return of experienced hands who quit during the Bush years.) Oh, yeah, and Bush agreed to a truly bizarre treaty with Iraq so he could declare victory, which the grateful Iraqis celebrated by burning him in effigy. Priceless. Bush was always better at the “destruction” part of “Creative Destruction,” anyway.

I’ve got lefty friends wringing their hands over the notion that Gates will continue at Defense, but I see a strategy here. For example, Obama just picked Geithner to head Treasury. Not only is Geithner the person who publicly called foul on CDOs back in 2006, when everyone, including the sainted Alan Greenspan, were saying they were just peachy, he is also the President of the New York Federal Reserve Bank, which, in case you don’t spend your time boning up on the banking system, is the 800-pound gorilla on the Federal Reserve Board. He’s already in place, doesn’t need to take more than 5 minutes to dictate his letter of resignation, doesn’t need to finish grading term papers before starting his new job. He’s already doing it. He’s been working with Paulson for years, but in a subordinate position, 800-pound gorilla to Bernanke and Paulson’s half-tonners. Now he’s an equal.

I was in the cafeteria when Paulson gave his latest speech. I couldn’t hear what he was saying over the conversational hum, but I could see that every time his lips moved, the stock market ticker next to him on the screen trended downward.  Later I found out that the summary of his speech was, “I don’t have a clue, so I’m handing it off to the new guy.” Within 24 hours, there was the new guy, already standing at his elbow.  So the question is: Will Paulson obstruct, or will he work constructively with his successor? Assuming that Paulson’s calculus revolves around the equation, “What’s in it for me?” I’m thinking that he will listen and act. One, standing by clueless while the economy tanks doesn’t look good on your resume. Two, the political winds have shifted and he will set his sails accordingly. Prediction 1-b: Those toward the Left will squawk: “They call this change!? Where’s the new blood?”

In a similar fashion, I think that if Gates remains, and Bush continues to focus on the vital business of deciding how to write a pardon that will absolve everybody from everything back to the Beginning of Time, Gates may be amenable to proactively chatting with the incoming administration. (Maybe Bush should just take the entire White House staff and Cabinet down to the Potomac and dunk ‘em. Hallelujia!) With this paradigm in mind, It will be interesting to watch the unfolding saga of Obama’s picks.

Two:

The Republican Party is pretty much sorting itself out as I predicted in my previous post. Thanks, guys! The Rightosphere is planning to flex their muscles, now that they can point to the Obama campaign’s successful use of the internet. It won’t work, at least until they grapple with their underlying problems: a philosphical mindset that is opposed to what most people in this country want, a history of winning elections by misrepresenting their true goals (Compassionate Conservatives, anyone? How about a slice of humble foreign policy pie?) I lurk on several right-wing sites, and they are still focused on strategy, not on a deep examination of conscience, or even demographics. Right now, Huckabee seems to be the only one who is taking that tack. A second problem with the notion that the Internet will save the Conservative cause is that Conservatives tend to be reluctant to adopt the new, just by their nature. While the blogger I read used conservative leadership’s rejection of the Internet as a campaign tool as his example, it brought to mind a conversation I once had with a fellow who wouldn’t have a computer in his house because he didn’t want the government spying on him. Lots of luck reaching him with your enhance graphic capabilities and sophisticated database management, Sparky. Read an excellent analysis of the issue here.

 Three:

Tina Fey willing, Saturday Night Live will feature a “Palin” interview  in front of an outhouse, with sound effects. Or maybe in front of a mugging. Or a couple of guys field dressing a moose. Or World War III. Or a lumberjack pissing on a tree. Or all of the above. Prediction 3-a: She will never hold national office, but either she or a family member will eventually have their own reality show.

Let’s start with a comment from Polixian to a previous post:

 This should give responsible media outlets a greater opportunity to point out the history of how it is our economy got to where we are…beginning with the Community Reinvestment Act of 1977 (President Jimmy Carter); the push by the Clinton Administration to force sub-prime mortgage lenders to expand their offerings into under-qualified, high-risk groups; the money trail of industry lobbyists (esp. Freddie Mac, Fannie Mae) and their political allies (esp. Frank, Dodd, Obama, and other republicans as well); and, the efforts by the aforementioned, as well as Maxine Waters and Pelosi, to protect such industry practices via outspoken congressional opposition to reform measures.

Ok, I admit I started it, by thinking that the Bushies had pushed this to bring the maximum amount of sheep in to be fleeced by predatory lenders. It was the Liberals that started this. However, here are a couple of details that have come to my attention:

Polixian echoes the Right Wing charge that Liberal policies have forced banks to make loans to people who could not afford the payments. It is soundly rebutted here:

http://www.snopes.com/politics/obama/loans.asp

The landmark case, Buycks-Roberson v. Citibank Fed. Sav. Bank was about the bank’s refusal to make a loan to a Black woman while granting loans to whites with similar income profiles. The lawsuit sought to end redlining, the practice of refusing credit to individuals based upon their neighborhood, regardless of their ability to repay.

I spoke with Michael, my go-to-guy at work, a second-generation bank consultant, who told me he ran the math and figured out that the $700 billion figure for the bailout was based upon 7% of the $10 trillion mortgage market going south, of which $0.5 billion represents those nasty, evil, ACORN-inspired subprime loans. Po’ folks taking down the global economic system? Not hardly.

Then I ran across this, at http://www.webofdebt.com/articles/its_the_derivatives.php 

What had to be saved at all costs was not housing or the dollar but the financial derivatives industry; and the precipice from which it had to be saved was an “event of default” that could have collapsed a quadrillion dollar derivatives bubble, a collapse that could take the entire global banking system down with it.

Michael puts the total US derivatives market at $180 trillion, or about 18% of the global total, and notes that the entire GDP (Gross Domestic Product) of the entire world is a measly $70 trillion. Yeah, you read that right: the derivatives market is about 14 times the entire annual income of the entire world. OK, so what’s a derivative?

Essentially, it’s a bet. Again, from Ellen Brown, who explains this stuff so clearly:

Derivatives are financial instruments that have no intrinsic value but derive their value from something else.  Basically, they are just bets.  You can “hedge your bet” that something you own will go up by placing a side bet that it will go down.  “Hedge funds” hedge bets in the derivatives market.  Bets can be placed on anything, from the price of tea in China to the movements of specific markets. 

“The point everyone misses,” wrote economist Robert Chapman a decade ago, “is that buying derivatives is not investing.  It is gambling, insurance, and high stakes bookmaking.  Derivatives create nothing.”¹  They not only create nothing, but they serve to enrich non-producers at the expense of the people who do create real goods and services.  In congressional hearings in the early 1990s, derivatives trading was challenged as being an illegal form of gambling.  But the practice was legitimized by Fed Chairman Alan Greenspan, who not only lent legal and regulatory support to the trade but actively promoted derivatives as a way to improve “risk management.”  Partly, this was to boost the flagging profits of the banks; and at the larger banks and dealers, it worked.  But the cost was an increase in risk to the financial system as a whole….²

Credit default swaps (CDS) are the most widely traded form of credit derivative.  CDS are bets between two parties on whether or not a company will default on its bonds.  In a typical default swap, the “protection buyer” gets a large payoff from the “protection seller” if the company defaults within a certain period of time, while the “protection seller” collects periodic payments from the “protection buyer” for assuming the risk of default.  CDS thus resemble insurance policies, but there is no requirement to actually hold any asset or suffer any loss, so CDS are widely used just to increase profits by gambling on market changes.  In one blogger’s example, a hedge fund could sit back and collect $320,000 a year in premiums just for selling “protection” on a risky BBB junk bond. The premiums are “free” money – free until the bond actually goes into default, when the hedge fund could be on the hook for $100 million in claims. 

And there’s the catch: what if the hedge fund doesn’t have the $100 million?  The fund’s corporate shell or limited partnership is put into bankruptcy; but both parties are claiming the derivative as an asset on their books, which they now have to write down.  Players who have “hedged their bets” by betting both ways cannot collect on their winning bets; and that means they cannot afford to pay their losing bets, causing other players to also default on their bets. 

The dominos go down in a cascade of cross-defaults that infects the whole banking industry and jeopardizes the global pyramid scheme.  The potential for this sort of nuclear reaction was what prompted billionaire investor Warren Buffett to call derivatives “weapons of financial mass destruction.”

[This might be the time to mention that W's brother Marvin runs a hedge fund, Winston Capital Management, but I digress.]

So, what did that $700 billion buy us? Damned if I know. The credit market is still seized up, since the dominoes are still a-tumblin’ and $700 billion, as impressive as that string of zeros is after the 7 looks, is only .00000004 of the value of the total derivatives market.

And the most interesting part, as Brown points out, is that “Derivatives create nothing. They not only create nothing, but they serve to enrich non-producers at the expense of the people who do create real goods and services.”

So essentially, derivatives are fluff, wispy critters of air, the foam on the economic beer, so to speak. with as much intrinsic value as the average casino chip. And yes, there are people who have profited most handsomely from them. What to do? Soak the Rich? That would be nice, but the problem is that down the line the real money underlying the cotton candy is your IRA, my 401-K, and Mrs. McGillicutty’s annuity.

Exactly how do we untangle this?  How do we blow the foam off without spilling the beer? Nothing jumps off the top of my head, but I’m putting on my thinking cap, and I hope you will, too.

My daddy the accountant used to say, “There are three kinds of lies: lies, damned lies, and statistics.” On September 15, 2008, the Wall Street Journal published an article titled “New Evidence on Taxes and Income” by Dr. Arthur Laffer, godfather of Neoconservative economics, and his friend Steven Moore. You can read it here:

http://online.wsj.com/public/article_print/SB122143692536934297.html

It’s chock full of, well, statistics.

Let’s start with this one:

In 2007, overall real median family income increased to $50,233, up $600 from 2006. The real median income for intact families — mother and father in the home — rose to $78,000, an all-time high.

Okay, leaving aside that $600 per taxpayer kickback from the government that everybody got, which neatly accounts for the $600 increase, let’s take a look at the word median.

In probability theory and statistics, a median is described as the number separating the higher half of a sample, a population, or a probability distribution, from the lower half. The median of a finite list of numbers can be found by arranging all the observations from lowest value to highest value and picking the middle one.

Source: Wikipedia http://en.wikipedia.org/wiki/Median

Okay, that’s simple enough. You look at everybody’s income and find the number in the middle. Let’s see how that works in practice.

The village of Lafferland, where everyone is prosperous, is inhabited by 100 residents whose incomes range from $90,000 to $110,000. The average income is $100,000. However, since no one makes exactly $100,000, the median income happens to be that of Dennis the Dentist, who reported $100,001.98 on his tax return last year. He’s the guy in the middle. The median. Median, average, whatever. Right?

Now let’s just say that one of the Lafferlanders, Igor, by virtue of his superior business sense and willingness to use brass knuckles, manages to take over nearly all the town’s income. He’s now making nearly ten million dollars a year. Everybody else is making $0, except Dennis, who installs solid gold grills in Igor’s family’s teeth,  and is now at $200,001.98. Igor has scooped up the remaining $9,800K.

Dennis is still the man in the middle. The median income is now $200,001.98. The median income has gone up by $100,000!! This is, of course, an extreme example, but, here’s my point: the median tells you nothing about the distribution of income. The average income under this example remains firm at $100,000, which should be a great relief to the 98 people now living under Lafferland’s bridges.

Let’s look at the next nugget:

households in the lowest income quintile saw a roughly 25% increase in their living standards from 1983 to 2005.

True, but if you look at the chart right next to that sentence, you’ll see that about 2/3 of that rise came during the Clinton years, with a sharp drop-off under Bush 43 and a slight recovery since 2002. He then claims:

Roughly speaking, the Reagan and Clinton presidencies were equally good for them.

Except the chart right next to his words clearly shows a 9.6% income gain under twelve years of Reagan/Bush 1and a 18.2% gain under 8 years of Clinton. Ask an investment banker whether he’d prefer a 9.6% gain spread out over 12 years or a 18.2% gain in 8. (After he stops laughing and explains to you that either works out to a less than a 2% return per year, he’ll probably tell you the latter is the lesser of two evils.) Equally good? Did this renowned economist pass 4th grad math?

I’m going to skip over Laffer’s assertions about family size shrinking and how this means that the poor are getting richer, except to note that I have been reading articles lately about non-related people sharing housing in order to save money and would like you to consider the possibility that family sizes are shrinking because people realize that they can’t support as many children. Birth control is, after all, still legal. On to the next point.

Over time the [Earned Income Tax Credit] has multiplied the number of poor households that fill out tax forms each year and are thus counted in government income statistics. That’s because to be eligible to receive the refundable EITC, a tax return must be filed.

Yes, dear, but the bottom quintile (20%) is still the bottom quintile. More people at the bottom filing doesn’t increase the size of the quintile beyond 20% of the whole. It does expand the whole, and it also pushes those toward the top of that 20% into the next quintile.

Official tax return data show that in 1983, 19% of returns had zero tax liability; that percentage has climbed steadily, reaching 33% in 2005. (The Tax Policy Center estimates that in 2008 nearly 40% of filers will have no income tax liability.) Thus, we are now statistically counting more poorer families today than we used to. This is a major reason that median and poor household income gains appear to be a lot smaller than they have been in reality.

No, it shows that a greater number of people have low enough income to not owe tax. Yes, the EITC accounts for part of that, but recall that only parents with children living at home are eligible for it. The EITC argument does not apply to single/non-head of household filers or the elderly, unless they are raising their grandkids, which, come to think of it, I’ve been reading about a lot, too.

In the U.S., people who had low incomes in 1983 didn’t necessarily have incomes as low a decade later. People in this country have long moved up over time, and this income mobility continues to be true. While some people do remain in the lowest income group, they are the exception.

One way to quantify income mobility is to examine how many people remain in the same tax bracket over time. We compared the returns of tax filers in the lowest tax rate bracket (zero) in 1987 with their returns in 1996. Only one third of the tax filers were still in the zero tax bracket, but 25% were now in the 10% bracket, 32% had moved up to the 15% bracket and 9% were in the 25%, 28%, 33% or 35% brackets. And that was following them for a decade, not a generation.

From 1996 to 2005, we have the income mobility data for income quintiles. Of those filers who were in the lowest 20% in 1996 and who also filed in 2005, 42.4% remained in the bottom 20%, 28.6% were in the next highest quintile, 13.9% were in the middle quintile, 9.9% were in the second highest quintile, and 5.3% were in the highest quintile.

He sort of skips over the fact that many students (those who went back to school after a stint in the big world and were not still classified as dependents on their parent’s tax forms) would hopefully be doing better nine years or so after graduation. Any person serving as enlisted below the level of sergeant, especially with a family to support, would also fit into that bottom-earner category. Hopefully, after nine years they’d have a few promotions under their belts or would be gainfully employed in the private sector. As Laffer points out, low income is a transient state for many people, still, 42% of them fail to make the jump. That’s one hell of an exception.

Many of the people in the bottom quintile of income earners in any one year are new entrants to the labor force or those who are leaving the labor force.

I really like that term, “those who are leaving the labor force.” In neat, bland language it summarizes the concepts, “retired,” “fired,” “laid off,” and “died.” On to his next point.

The data also show downward mobility among the highest income earners. The top 1% in 1996 saw an average decline in their real, after-tax incomes by 52% in the next 10 years.

This one is very interesting. He states it as though we’re looking at the top 1% in any given year, rather than following through on a case by case scenario as with the bottom quintile. Yes, in any given year a certain percentage of top income earners will die, retire, or be pushed off the corporate cliff clutching their golden parachutes. If, as he did above with the bottom 20%, he looked only at those who were in the top 1% in 1996, and compared those same people’s tax filings in 2006, you might well see a decline. The top 1% is, after all, only about 1.3 million tax returns.  

When you think about folks who won the lottery, athletic bonus babies with an average career of 4 years, one-hit wonders in publishing and on stage and screen, and high earners who quit, retired, were forced out, or perhaps passed away during that ten year span, 52% decline in income, sure. That makes sense, especially if the dead ones are counted as having zero income. However, he states this as though the income share of the top 1% (regardless of who they happen to be in a given year) has declined by half.

But if you go here,

http://www.slideshare.net/cmulbrandon/income-distribution-in-the-united-states/

a different picture emerges. Click the “full” icon in the lower right hand corner to expand the screen so you can read it. Then look at pages 8 and 9. Under Clinton, income distribution had shifted to the point where the bottom 99% of taxpayers were getting 50% of all income, up from about 48% under Reagan/Bush1. (The historic high came under Nixon, with about 55% going to the bottom 99%.) Under Bush 2, however, the percentage of income going to the bottom 99% of us slid to 47%.

Let me reverse these figures for clarity. From Clinton’s 50% of all US income going to the top 1%, now we have 53% of all income going to the top 1%. And if you look at page 9, you will see that between 1994 and 2004 the income of the top 1/1000th of Americans skyrocketed to 6.9% of the total, largely due to Dr. Laffer’s favorite medicine, lower tax rates.

How does this equal a 52% income decline for the top 1%? Only if you use Laffer math, which, dare I say it, is laughable.

But here’s the most mathematically interesting sentence in the whole piece:

…in 1981, when the highest tax rate on the rich was 70% and the top capital gains tax rate was close to 45%, the richest 1% of Americans paid 17% of total income taxes. In 2005, with a top income tax rate of 35% and capital gains at 15%, the richest 1% of Americans paid 39%.

While the equation in this sentence looks a lot like Tom Robbins’ “If a hen and a half lays an egg and a half in a day and a half, how long does it take a wooden-legged monkey to kick all the seeds out of a dill pickle?” try following my back of the envelope math.

Tax rates for the wealthiest are now half of 1981 rates for top bracket earnings and one third for capital gains. At the same time, the percentage of all tax receipts paid by the top taxpayers has more than doubled. That would suggest that top bracket incomes have gone up somewhere between four-fold and six-fold, wouldn’t it?

There’s another thing my daddy the accountant used to say.

“The figures don’t lie, but the liars really know how to figure.”

I’m excepting here from my previous post, again, this is Byron King writing at Whiskey & Gunpowder:

Lehman Brothers wants to pay $2.5 billion in bonuses to 10,000 employees…. What has anyone there done to deserve $250,000? Did I miss the news about somebody at Lehman discovering a cure for cancer? It’s all just so… Baby Boomer….

No, no, no, Byron. This goes much further back. Heck, the Romans had a word for it (two, actually) Prive Lege, in English, Private Law. If you squoosh it together into one word, it turns into the English word, privilege.

Common law, you see was for the common folks. Private law, however, was for the wealthy and powerful. The Baby Boomers invented this? Sure, and like my mother used to say, “You young people act like you invented sex.”

I’m going to make a leap here and assert that This is the end goal of the Neoconservative strategy, dating back to their Father of their Church, Leo Strauss.

You can find some Straussian basics here: http://en.wikipedia.org/wiki/Leo_Strauss

and here: http://www.alternet.org/story/15935/

In short, Strauss, a Jewish Zionist who escaped the Holocaust by emigrating to America, built his career as an academic philosopher by taking a text from Plato and standing it on its head. Up until Strauss wrote his dissertation, it was assumed that Socrates’ opponent was in the wrong when suggesting that lies are necessary to proper governance.

I really don’t want to get into all the snarly detail about Plato-Heidegger-Nietzsche-Locke-Yada-Yada-Yada, so let me sum up.

Strauss taught his students that there were three groups in society:

• The masses, who are essentially ignorant sheep to be herded. They are governed by basically low impulses and easily swayed. Interestingly, he apparently thought Machiavelli was a bad guy, because he was too liberal.
• The nobles (defined not as in “nobility of character” but as “the guys who have what everybody wants,” castles, sweet rides, hot trophy wives, etc.) are intensely competitive and acquisitive, desirous of glory and fame. (You know, having your children’s children sing songs about them.)
• The Wise: those who really control society by whispering into the ears of the nobles and guiding their actions.

Look at the number of Neoconservatives working behind the scenes in Republican circles (much of the Bush Administration and the denizens of dozens of Right Wing think tanks) vs the number who have actually stood for election, (um, who, other than Dick Cheney comes to mind?)  Does the above set of principles look like anything they might agree with?

Ok, let’s take a closer look at the sweet nothings The Wise whisper into the ears of the The Nobles. General principles:

• Lying is okay. After all, it’s being done for the Highest Good, social cohesion.
• Liberalism is bad, leading inevitably to either fascist dictatorship or mindless hedonism.
• Authoritarian rule is all to the good. In Strauss’ own words, “…only on the basis of principles of the right – fascist, authoritarian, imperial – is it possible in a dignified manner, without the ridiculous and pitiful appeal to ‘the inalienable rights of man’ to protest against the mean nonentity (Nazism).”^[26]  Yes, he actually attacked Nazism from the right. Where was Attila the Hun when we needed him?
• Oh, yeah, the “inalienable rights of man” mentioned in the Declaration and Constitution are doo-doo, and wussy doo-doo, at that. (See quote above.)

You can see why the lower end of the rightward side of the spectrum despises those guys in the ivory towers. I mean, who wouldn’t? The interesting thing is that Strauss’s students and acolytes, Wolfowitz, Perle, et al, are the ones who have successfully enlisted the support of those same masses for such causes as tax cuts for the rich and the Iraq war. Apparently, that’s where the lying comes in, and oh, they do it so well.

[Side note: I couldn't help but notice George Bush's facial expression as he gave his first speech in favor of the Paulson bailout. I've raised 3 kids and can identify the "bird flew in through the window and ate all the cookies" look. It's different from his previous performances, where the smirk gave away the parts where he was fibbing. He knew that wouldn't work this time. He'd already gotten notice from Congress that he wasn't sliding any more of that hair-on-fire WMD sign-here-now-or-we're-all-doomed cheese past them. (As we become more threatened, we tend to revert to more primitive behavior, including tactics that worked when we were five.)]

Okay, so the revered teacher of those who have advised our leadership for the past 8 years believes that an authoritarian system, supported by falsehood, is the most effective form of politics.  (Actually, the real count is more like 40 years. Most of these guys started in the Nixon Administration, and like the bad pennies they are, turn up everytime we’re dumb enough to elect Republicans.)

Time for Change? I think Ben Franklin would agree.

If you haven’t read it yet, scroll down to my earlier post, What Gives the Neo-cons Their Power? in which I discuss Authoritarianism and Social Dominance, the psychological aspects underlying Strauss’ philosophy. Check out the links. They explain a lot.