The Best and Brightest Take the Helm

The Obama Administration has begun to take shape, I am reminded of the haughty arrogance of Robert McNamara and McGeorge Bundy, two of the intellectual powerhouses that led us into Vietnam. McNamara has to a large degree repented for his sins. So too has Bundy, to the extent he was able.

I’m thinking of Vietnam, of course – a catastrophe given us by Kennedy’s Whiz Kids, David Halberstam’s “Best and Brightest“, the leaders of academia and industry whom JFK recruited to give his administration a spit-shine unlike any before.

As I watch Obama assemble his team, I’m looking for parallels to Camelot, and I don’t have to look far. The haughtiness of high intellect is there, the star power, the ability to make grand mistakes in a grand way.

And the playing field is also there – Afghanistan. I don’t know what we are fighting about over there – the origins of 9/11? Maybe so, maybe not. But I do suspect that if we were to pull out now, just leave it be, we’d be far better off. The place is a desolate wilderness whose most meaningful contribution to improvement of the human condition is the annual poppy seed crop.

Afghanistan is some sort of power vacuum – a place that will be occupied by others if we don’t. It is strategically situated between Pakistan and Iran – I suppose that matters. But I wonder what the worst would be – what if the Taliban took over? Will the people suffer? Of course. But the U.S. is not concerned with the suffering of ordinary people, aptly demonstrated in Iraq. There is something more at stake here. I wonder if, as in Vietnam, our leaders have given exaggerated importance to the place as egos slowly displace strategy.

Where Alexander failed, where the Russians failed, we will succeed. We are the exceptions.

Succeed in what? Devastation of an already impoverished citizenry? A massive display of industrial firepower on an agrarian countryside? Sounding familiar? What is there to prove?

Obama, during his campaign, had to appear hawkish to avoid the perception of a weak-kneed conflict-adverse liberal. Iraq was unpopular, Afghanistan supposedly the “good war”. So he staked his phallus on it – that’s where he chose to be a man. My fear is that he will follow through, fearing a legacy of retreat.

That’s the Vietnam mindset.

We can only hope that calmer, lesser minds prevail – that the Obama Administration is also stocked with people of vision and humility who know enough not to spend our youth in an unwinnable quagmire.

No Good Can Come of This

2008 is on the way out, and 2009 will be devoted to condescending commentary on Obama’s inexorable rightward drift and the left’s begrudging acceptance of it – this before they internalize it and begin to actively enable him. It is, after all, good to be king.

Two things need to be resolved before we exit 2008 – health care, and globalization. I’ve spent an inordinate amount of time on these subjects, to no resolution. But I see a common thread in both now, this after reading Zadie Smith’s essay in the New Yorker, Dead Man Laughing. I realized that her father’s wisdom was a truism – “no good can come of this.”

Start with globalization – one of my favorite TV shows is on the Science Channel – it’s called “How It’s Made”. In it, they show us the complicated and fascinating manufacturing processes behind products like hockey sticks and curling stones and charcoal briquettes. What I began to notice after a few episodes was that 1) the workers were usually Anglo men and women, and 2) the products were more often Canadian. I began to suspect that they still make things up north.

Dave Budge perhaps had the final word on the situation in a comment under my post “A Markist Dialectic“:

Ask any random economist, even Keyesians, and 95% of them will tell you that we’re better off with trade where we employ our resources to our most efficient production. What we’re experiencing now is the pain of globalization. But it won’t last forever and we’ll redeploy our excess labor in useful ways over time. That is, unless we stifle innovation with protectionist policies.

This is the right’s answer to the pain and dislocation of a trade policy dominated by the needs of capital. Accept it, internalize it, enable it. You can’t fight it. But far from Zadie’s proscription that no good can come of this, Dave is chipper and optimistic. Something good will happen.

What, exactly? Something. We’ll find some use for our labor. We make good movies. Perhaps we can all be actors. We make hamburger by the COSCO boatload. Perhaps we can all make burgers for one another. Maybe we can all become counselors, or join the military and attack yet new and innocent foreign places. Something good will happen.

In the meantime, we are shutting down industry, good-paying jobs are disappearing for ordinary people, and poverty is edging ever-upward into what we once called our middle class. But something good will come of it. We’re letting markets work, after all, and we don’t question the wisdom of markets.

Which brings me to health care. Again, Dave Budge, this time at Gregg Smith’s active and lively Electric City Weblog:

Prior to HIPAA Montana had hundreds of companies that wrote health insurance. Upon the act being put in force the number of companies writing health insurance fell to less than 10 (There are only 2 in Idaho and only 1 in Washingston.) HIPAA limited pre-existing conditions limitations to 12 months and accordingly many insurance companies left the individual insurance business in favor of selling group plans.

So, prior to 1997 your wife wasn’t uninsurable even with cancer. HIPAA is likely the most damaging piece of health care legislation ever written. It screwed those who need individual coverage by limiting competition, increasing premiums, and re-enforcing the employer based health care model.

And again, later:

There’s no point in talking to you about health insurance because A) you think health care is a right (at some arbitrary level of care) and B) you’re unwilling to see that it’s been the government that has created this bollixed system with all of its intervention. For every fix government enacts two or more problems are created.

HIPAA is the Health Insurance Portability and Accountability Act, a 1996 law that made it more difficult for insurance companies to deny coverage to people because of pre-existing conditions. It didn’t outlaw the practice, by any means. It merely said that if workers switch policies due to job change, that they could not be denied coverage due to a preexisting condition on a new policy if they maintained coverage and did not go for long periods uninsured.

Prior to that time, insurers would either refuse to cover someone with a preexisting condition, or exclude that condition from coverage while covering other ailments. That’s an industry fix, and a good one in Dave’s mind – don’t cover the one thing the person most likely needs coverage for. Under-insure them.

Ted Kennedy was behind HIPAA, and he looked at the market-driven system and thought to himself “no good can come of this”. What the hell is the point of insurance that doesn’t cover illnesses? He fixed it, and, as Dave notes, insurers fled the market. The game was up. Dave sees this and a failing on the part of government. The industry was only doing what comes naturally: Seeking profit, avoiding risk.

…you think health care is a right.

At last he, flustered with me and all of the bollixing of government, said what was true. We have it now on screen for all to see. Dave thinks that people who cannot afford coverage should not have coverage. That, dear friends, is our philosophical bottom line. I say where the market fails, fix things. He says that the market doesn’t fail. If a market outcome is bad, it’s destiny. Accept it. Internalize it. Enable it.

Oh, we’ll do it his way. Obama is drifting inexorably right. The left will begrudgingly accept it, internalize it, and then enable it. There’ll be no heath care fix, no middle class tax cut, no end to Iraq, no protections for workers displaced by globalization. We’ve elected a secret member of the DLC. No good can come of this.

It’s a Wonderful Life

How’s this for a business plan:

I’m a credit card company. Market research shows me that a sizable number of people use credit cards as a convenience and pay off their balances monthly. I make money that way – I charge merchants a fee for each purchase. Merchants are OK with it, as people tend to spend more money when they use credit cards versus cash.

But it’s not enough. I want more. There’s a market niche out there that I need to exploit -kids. I will have my marketing department get hold of the names of all kids graduating from high school each year, and I bombard them with offers. Parents might object, but the kids are 18, legal adults, so screw the parents.

Enough of these kids sign up for cards (I’m bombarding college campuses too), and few of these kids know anything about compound interest. They are on tight budgets … they are young, and I know they are going to do some impulsive spending. I’m going to make it easy for them. Then I’m going to make their minimum monthly payments so low that it’s like a siren song – don’t pay me off… don’t pay me off… Kids will run up balances.

Here’s the hook. My interest rates are so high that most of the minimum payment I charge is interest, so the balances aren’t paid down. Pretty soon these kids will lave large balances, and will be making interest payments to me in the area of 22-29% per annum (usury laws are a thing of the past – I had something to do with that.)

It’s beautiful. I have staked a claim to a portion of these kids’ income now and for years to come. They’ll be working their low-pay jobs, and I’ll be siphoning off a good cut for myself. I’ll spend my idle time thinking up new ways to charge them more – excessive late payment fees, jacking up interest rates if they are late on a phone bill – any way to squeeze an extra buck out of them.

The flow of wealth is upward. I’ve staked a claim to the wealth produced by the lowest wage earners among us.

Congress is timid – I’ve bought most of them. But a few of the more recalcitrant ones might suggest laws that prohibit me from marketing to kids (and the elderly – my other lucrative market). They might even suggest usury laws. I’ll put a stop to that. Thanks be that there are only a few people in congress that I don’t intimidate.

Ah, human weaknesses to exploit. It’s what I do. I love it. Greed is good. It’s a wonderful life.

Education Note: Kids should not leave high school without having learned something about the dangers of credit cards and compound interest. It’s the least they can do for the kids.

Rahm’s List

Fox News reports that Obama Chief of Staff Rahm Emanuel has been in touch with Governor Rod Blagojevich, and had presented him with a list of acceptable candidates to fill Obama’s senate seat.

Emanuel is widely credited with engineering the Democratic takeover of the House in the 2006 election. But closer examination tells a different story. John Walsh, writing in Counterpunch, tells of Emanuel’s efforts that year to infuse the House with new pro-war Democrats.

Long ago Rahm chose 22 key races, open or Republican seats, where Dems might win. By any reasonable criteria, all the candidates chosen by Rahm, save perhaps for one, were pro-war as is Emanuel himself. In two cases Rahm had to put in considerable dollars and effort in the primaries to drive out antiwar candidates. He drove out Cegelis in Illinois’s 6th CD, at the cost of one million dollars, in favor of Tammy (“Stay the course”) Duckworth who lost in the general election. In California’s 11th CD primary, Emanuel backed the prowar Steven Filson who lost to the antiwar candidate, Jerry McNerney, who went on to win in the general election.

It’s a sure bet that Emanuel’s list of acceptable senate candidates will be pro-war, and that Duckworth will be on it. (She is an Iraq vet who lost her legs over there, but still supports Bush’s war effort.) Hopefully she will be tarnished by being on the list, and will have to move on.

Looking at all 22 candidates hand-picked by Rahm, we find that 13 were defeated, and only 8 won! (One is still undecided.) [9 eventually won.]And remember that this was the year of the Democratic tsunami and that Rahm’s favorites were handsomely financed by the DCCC. Tammy Duckworth, for example, was infused with $3 million ­ and was backed in the primary by HRC, Barack Obama, John Kerry, etc. The Dems have picked up 28 seats so far, maybe more. So out of that 28, Rahm’s choices accounted for 8!

Since the Dems only needed 15 seats to win the House, Rahm’s efforts were completely unnecessary. Had the campaign rested on Rahm’s choices, there would have been only 8 or 9 new seats, and the Dems would have lost.

Emanuel will be the gatekeeper for Obama, and the arbiter of many positions of power over policy. Two things about him are evident: – he is rabidly pro-Israel (a dual citizen), and pro-Iraq war.

Progressives are in for many more unpleasant surprises as this caterpillar administration becomes a full butterfly.

Inappropriate

From the Guardian: Cardinal Jorge Medina Estevez of Chile had some strong words for Madonna at a mass he said recently. Madonna was in Chile for a concert on December 10. Said the card,

“This woman comes here and in an incredibly shameless manner she provokes a crazy enthusiasm, an enthusiasm of lust, lustful thoughts, impure thoughts.”

Medina began his homily with lofty praise for General Augusto Pinochet.

Union Favorability Ratings

According to a Gallup poll released on December 1, labor unions continue to be very popular among the American public. 59% of those surveyed continue to hold a favorable view of unions. About 16 million Americans belong to unions, but 60 million (out of a work force of 153 million) say they would belong if they could.

That says something about the effectiveness of anti-organizing efforts in this country. 44 million people want a choice that is not offered them.

There’s been a steady stream of anti-union propaganda from 1936 forward, when the National Association of Manufacturers first decided to go on the attack. Yet union favorability ratings during that time have only fallen from 72% to 59%. That says something for the basic democratic instincts of the public.

68% of the middle class support the Employee Free Choice Act, or “card check”. The proposed law would make it easier to form a union, and is strongly opposed by business and Republicans, and probably a whole lot of Democrats as well (not openly).

The Lantern is Lit

According to Jewish tradition, in every generation there are 36 righteous people (the “Lamed Vav Tzadikim”) in whose merit the world continues to exist.

That would be me, my wife, four of the five kids (I’ll let them figure it out), Bob Garner, John Bohlinger (a Republican – had to have one of them), but I’ll be damned if I can figure out who the other 28 are. Any ideas?

$70 Per Hour?

News circulates on the right wing quickly, and when something is said that is not true or oversimplified, it appears here, there, and everywhere, repeated uncritically. I’m talking about the $70 per hour figure that is routinely reported as wages paid UAW auto workers by Ford, GM, and Chrysler.

First, the number does not represent actual wages paid these employees – rather, it is a number arrived at by combining current wages, pension and health benefits for all of the auto companies’ employees, past (legacy) and present. Fair enough. But a more honest way of saying that would be that auto workers have to produce $70 per hour to maintain the current load of wages, benefits, and legacy costs.

But the number isn’t used that way. The right wing is far more dishonest – they are making it seem as though fat and lazy auto workers are taking home that much in pay. They don’t often delve into detail. The result is a deliberate propagation of a myth designed to hurt the UAW, and unions in general. That’s how the right wing functions.

But there’s more to it than that. They also make it seem like the Big Three have been unrealistic in its past dealings with UAW, and made commitments it could not possibly sustain. That is part of a general dislike of labor organizations in general. It is the culture on the right wing. But there are a couple of things to consider here.

First, the $70 figure for GM is a compendium of all labor costs, current, and 432,000 retirees. (I have not been able to determine whether those retirees are UAW legacy or all of GM’s legacy. Anyone know?) (Effective January 1, 2009, 100,000 GM white collar retirees will no longer receive health benefits.) Those who are batting this figure about are leaving the impression that it is current UAW workers to blame, and no one else.

Secondly, what exactly is the blame? In 1962, for example, General Motors had 605,000 employees. In 2008, they have 266,000. Twenty years ago, they had about 107,000 American line workers – today, after a buyout of 19,000, they are down to about 54,000.

That’s the key to the $70 figure – GM’s current shrunken work force is carrying the load for past employees who existed in far greater numbers. Far from being responsible, far from the moaning and whining about irresponsible labor contracts, we’re dealing with a simple contraction. Current average UAW workers costs about $26 $40 per hour, $55 with benefits (according to NY Times – I read $28 baseline elsewhere) per hour, and new hires are coming in at $14 plus reduced benefits.

The American auto companies are faced with stiff, non-union competition, including cheap labor in other parts of the world – globalization, aka, the race to the bottom, economic efficiency – whatever you want to call it. The idea that a worker can support a family, have health care coverage and a pension is passé. The “free market” won’t allow it.

That’s the right wing – sacrifice all for those supposed “free” markets – even as those markets destroy the very things we believe in. Don’t interfere with markets, accept market outcomes as the only viable outcome, don’t protect jobs or cities or towns ….

Don’t protect industries. The economy doesn’t exist for our benefit. We exist for the economy. It appears at this time that the Republicans in the United States Senate are going to filibuster a bill that would allow a temporary fix to General Motors and Chrysler. The bill would divert $15 billion of already-appropriated money to stop the bleeding while a longer-term survival package is designed. The longer term package would hopefully address the legacy problem. It would save jobs, communities, and hundreds of thousands, if not millions of people who depend on the auto industry. It would be a bailout. A much-needed bailout of an industry in trouble. One that has served us well for a century.

They don’t care. They are pissed about the UAW, they want it gone. They don’t like it when workers organize – it runs contrary to their strongly-held beliefs. When markets dictate that a company suffers from inefficiency or failure to anticipate market trends or simple management stupidity, that company must pay the market price. General Motors doesn’t need to exist, the jobs will reappear in other forms (for less pay).

Unless, of course, you are Citibank, AIG, Merrill Lynch or the host of other financial institutions what screwed up and are being bailed out, no questions asked, bonuses and new acquisitions ignored, no questions about wage levels.

It is utterly contemptible hypocrisy.

Addendum It bears repeating here that the major competitor to the Big Three, Toyota, would not exist were it not for government subsidy and protection.