By Matt Stoller
https://www.theatlantic.com/politics/archive/2016/10/how-democrats-killed-their-populist-soul/504710
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I want to be able to find it again and again.
“This mix of central planning and private monopoly may sound odd, but it is the intellectual underpinning of both the Affordable Care Act and the Dodd-Frank Wall Street Reform Act. Although the details of both policies are influenced by a certain amount of happenstance and political give-and-take, both policies deliver social benefits through heavily concentrated private actors, which could be seen as a private form of central planning. And both laws went through committees chaired by members first elected in 1974.”
The origins of KLUDGE.
Also interesting on the Republican reformicon side, by Phillip Longman…
http://washingtonmonthly.com/magazine/novemberdecember-2016/how-to-make-conservatism-great-again/
○ How Democrats Killed Their Populist Soul
Your address for Stoller’s article didn’t work. How Democrats Killed Their Populist Soul.
Decent article — though it does suffer from having to pack too much from a complicated period of time into too few words. Stoller also seems to struggle with what inherently made New Deal regulatory systems so robust and ends up at that same place but on the other side of the street as the neoliberals with competition. Not even Patman believed that as a panacea because by then it had long been seen that railroad competition lead to high prices, redundancy, excess capacity, etc. Private competitive fire fighting companies was also a disaster.
He also gives the “watergate babies” credit for:
Matt Stoller’s article was very interesting. Why did it not come out a decade ago? Especially interesting was this part:
Of especial interest is what happened to Wright Patman’s district, TX-01. The last Democrat to serve in a continuous succession after Patman was Max Sandlin, who lost to Louis Goehmert in 2004.
Why did Sandlin lose?
Remember when Democratic legislators left the state and went to Oklahoma to kill a quorum?
Might it be possible in a Trump meltdown to get back TX-01 by overwhelming the gerrymander?
Phillip Longman’s article is and interesting take on who becomes the opposition coalition to the Clinton’s establishment coalition in Congress, if only crossing the aisle becomes possible again. Absent that, it requires a strange Bull Moose sort of party that ends identity issues by standing strong for civil rights and equality under the law and is also a strong anti-monopoly party as well.
Where do the missing policies on peace, infrastructure, and mitigating the effects of climate change go? How much of that will Clinton’s Democrats pick up?
“…a strange Bull Moose sort of party that ends identity issues by standing strong for civil rights and equality under the law and is also a strong anti-monopoly party as well.” This would be a very attractive party for Hispanics who have a strong small business ethic, at least here in Texas.
If Republicans found their Populist/Bull Moose side and Dems rediscovered their New Deal princlple that govt exits for the citizens, not the corporations, we would all be much more hopeful.
But as Marie noticed, there is still that penchant in both writers to believe that a more-perfect market is the answer to self-government. I don’t think it is, myself.
A more perfect market is an aid to self-government to the extent that it levels incomes that can go into campaign funds and creates a norm of not corrupting politics to game the market. That would mean in practical terms that polictical discourse should not be modeled as marketing but as some other form of communication. It also means that there be a separation between the economic and the generation of values, which has some serious effects on the existence of the practice of advertising.
Moreover, Marx’s analysis of the extension of commodities to every aspect of society effectively argues that those practical things are difficult to do under the ideology of capitalism and the practice of government as serving only the capitalist institutions of society. That argument also describes the inevitably total nature of capitalism as a civilizational system, like feudalism was total within its reach.
Marie’s point is not without practical, empirical, and social scientific basis.
It is all too obvious that both authors do not want to lose their current position as Washington pundits with too critical an analysis of the reason lobbyists scourge Washington. And both harken back to a Jeffersonian idea that yeoman entrepreneurs, not just in agriculture,can preserve that democracy that equality demands.
What checks the power of the nation of small entrepreneurs? Some of them will have employees, and if you’ve ever worked for a small business, you understand what the boss’s tendency is in managing employees.
This view is where the New Deal started out after the Supreme Court killed the National Recovery Act. And that shift triggered the multiple strikes in the latter years of the 1930s, which were only resolve by the necessity of negotiation with labor in order not to interrupt war production. That 1941 agreement and the legislation that came out of it was one of the interacting factors that enabled the prosperity of the 1950s and 1960s.
So the balance of power over negotiations between employers and employees is an important aspect of regulating market power. Especially when employers seek monopoly powers.
But the question of who provides the infrastructure that must serve all members of the society is left off the table with this focus. Could a Bull Moose party have the wisdom to allow for infrastructure and other social collective projects that in fact lower the cost of doing business as well a providing necessary goods and services for the population? That goes to who decides what is infrastructure and what is in the market. Both self-proclaimed “capitalist” countries and “socialist” countries have botched this decision by pretending it doesn’t exist in their pure system. Or they have delivered control to those who have the most self-interest in control of infrastructure, either for power or for profit.
What interests do the rump Republicans and rump Democrats after this election have in common? What interests do those not in these factions have in common?
If the US parties shed the ideological basis that the modern conservative movement forced on them for fifty years, what is the basis on which a big tent governing party and a big tent opposition party gather relative similar sized constituencies?
All of these conundrums will not be fixed just by refocusing again on busting those institutions who are promoting and sustaining practices of imperfect competition in markets. (And the focus should be on all forms of instutionalization of imperfect competition.)
And the thing that all should be aware of is that perfect competition drives profit to zero in the long term. All of the efficiency in driving out cost and the efficiency in clearing the market of unmet demand drives all players in the market to similar cost and revenue results and zero profit. The reality is more complicated even in theoretical perfect competition. But greater and greater profits, especially year after year, generally signal that the market is being institutionally manipulated to not trend toward perfect competition.
What generalized zero profit means is that legal entities would have to start explicitly accounting for the cost of doing business in the future instead of treating it as free money to be at the discretion of bosses (usually extracted to their private accounts).
And thus do we see that Alfred Chandler’s visible hand view of markets as social constructions is more significant to consider than free markets. They never are free. Some institutions are always involved in manipulating their outcomes.
The systems of checks and balances that Madison envisioned for Constitutional government get extended to checking economic power in the regulation of monopolies. Whose interests drive those regulations?
That is what politics should sort out, if the players actually have the equal power of a democracy.
A long time ago I shared a page with Matt at openlefy
He kind of took leave of his senses. Argued against voting for Obama in ’12. Offered an absurd defense when pressed on roe v wade.
What Matt describes can be put another way: to use the efficiency of the private market to achieve the aims of liberal social justice. There are other examples. Food stamps for one
The larger ideological fight has been postponed. If there ISNT a way to use private markets to achieve public values then the question becomes a simple one of public versus private ownership
Mino keep publishing this is interesting
Posted from china on an iPhone with questionable internet connection
I believe we can confidently assert that 36 years of conservative and New Democrat experience shows that to be the case. Do we really need to catalog the number of public-private partnership failures to deliver public good while allowing looting of the various public treasuries.
You would also have to catalog thousands of public-private partnerships that were highly successful and the absolute right choice to achieve certain public goods.
A major problem with recent partnership failures is the basis on which those partnerships were entertained. Most begin with “cost savings” based on the assumption that the private sector is more efficient which is based on the assumption that the profit motive drives such efficiency. Added to that is the notion that private operators deliver a superior product/service. Significant conceptual flaws in all of that.
Take one — private prisons. Cheaper b/c they pay less, are generally are sited far from costlier urban areas, and only accept lower level offenders. Other ways to reduce costs — lower guard to inmate population, fewer management layers, outsource food, etc. Increase revenues by selling prison labor. Their business model doesn’t work if the flow of prisoners into their facilities isn’t maintained and preferably increased. And that’s where there is a huge disconnect between this partnership and good public policy. (Same disconnect exists with unionized public prison guards.) So, it’s very much in their interests to label and enforce many behaviors as criminal. For public policy folks to accept that and not consider all the other possible options. That also means that policing costs more (or takes away from better use of that resource) and adds costs to the court system. Thus, we’re spending a lot more in public monies by using private prisons. That’s just the public cost component — the social costs which are absorbed by individuals are even more enormous.
I think where you can identify clear perverse incentives, it becomes corrupting. And often, those bad incentives are glaring.
True. And it should be a criteria in considering such partnerships. However, it alone shouldn’t make it a no-go because there are ways to structure such partnerships that reduces perverse incentives to a near negligible level.
And right on farking cue, CFPB takes a dive. US Postal Banks? Oh, Noes! We have a Public/Private Solution for Yous…
CFPB’s Project Catalyst Relies on Financial Innovation Fairy to Rescue the Underbanked
Notice the emphasis on enhancing borrowing! Not on providing BANKING!
Notice the emphasis on enhancing borrowing! Not on providing BANKING!
Might as well change the agency’s name to Corporate Financial Profit Protection Board.
I like the postal bank proposals because post offices already exist and the banking monies can easily be kept independent from the federal government. In the long run, I’d like to see tightly regulated, full service, consumer banks with majority ownership held by local and/or state government, but haven’t thought through the details on that.
Govt has long traditon of using private contractors. But formerly there was a fear of god for bad behavior. Not any more, for sure.
God had nothing to do with not so bad behavior by private contractors and the private sector in the past. It was government inspectors and regulators that kept them on their toes. (Clinton/Gore reinventing government was a godsend to those under regulatory scrutiny and that’s one aspect of the WJC admin that liberals still overlook in their criticisms of him.)
All those reductions/eliminations of banking regulations meant that those federal bank examiners weren’t going to show up as frequently and when they did, they were green.
Public-private partnerships work where rationing on the basis of ability to pay is the point.
Private prisons have a business model that makes housing of more people with less services an incentive, which puts the contracting governments in the position of looking for more people to throw in prison. It is trying to use a public-private partnership to run an Orwellian infrastructure. Potentially a way can be found to allow everyone to experience private prison services at the state’s expense. What exactly does the public body get out of the partnership? Jobs in communities with few prospects? Is that the only way to spend government funds to get jobs?
Examples of public-private partnerships that were exactly the right choice? Can you think of any?
Especially where “partnerships” are not just government-vendor relationships but something different.
Aren’t private prisons “government-vendor” relationships?
Would be difficult to identify any true public-private partnerships. In the sense that partners share in the costs and profits. The ones that come close are based more on good faith than formal partnership arrangements.
For example, how much of the cost to develop/build the internet did Google cover? How much of the profits has the USG seen? As designed the USG (and state and local governments followed it lead in various ways) led, promoted, invested, etc. in education, science, tech, etc. to improve the lot of many in some way and those were greatly enriched paid for the advantage government gave them through taxes. For the Google, Facebook, etc. guys, a 90% tax rate (income and estate) sounds about right.
Examples of public-private partnerships that were exactly the right choice?
I can’t offhand. I’m not talking about contracting for goods or specific projects. I am talking about contracting the administration of a government service. I can’t think of one that does not cost us more. Tax collectings was done this way in the far past, but you may imagine the abuses.
What seems to me to be the case frequently is that government pays either directly or through tax credits to subsidize the infrastructure that the private firms then use for operation and profit, with those profits being extracted as owners equity (or shareholder dividends or executive performance bonuses) and the condition of the infrastructure deteriorating until the government shoves in another bundle of cash.
The only way the government can profit is through the private firm completely covering the infrastructure costs and paying back a licensing fee (a rent) in order to continue using the infrastructure. I suspect that idea is a non-starter and would be labeled a tax.
Hmm, any historians out there who might take on a biography of this guy as a public service? His wiki does not list one.
Found a contemporaneous article…
Why They Sacked the Bane of the Banks
And this from Oxford Journals … Wright Patman: Populism, Liberalism, & the American Dream
Young’s biography of Patman is probably factually decent, but either lacks the style to attract a large number of readers or there’s little interest in Patman. He was important among the New Dealers, but there were so many that it’s difficult to single out one. That’s why historians/writers focus on the “organizing principle” of all these actors which ends up being FDR, Truman, LBJ, etc.
(Congrats on mastering links.)