Author: das monde

As all political junkies know, the US president is elected not directly by a citizen vote but by the Electoral College – an archaic original compromise of the Founding Fathers and States. (Yes, we will have a powerful President, but the States will be influential in its election.) There were four presidential elections when the popular vote was different from the elected president: 1824, 1876, 1888 and 2000. Besides, the first few elections were confused by the issue of Vice-Presidency (especially in 1796 and 1800), leading to the more specific 12th Amendment.

The most bizarre elections were in 1824 and 1876, by far. They were also influential or highly educative. If you thought that the 2000 election was a steal…
Consider the 1876 election

The Reconstruction era after the Civil War was coming to the end, with rising Southern backlash against weighty participation of blacks, carpetbaggers and scalawags. The Republican governments in the South were widely considered corrupt, and with some reasons. Though nothing could match the Democratic corruption machine in New York City.

The Democratic candidate in 1876 was Samuel J. Tilden, prominent for reigning certain order in New York. His main opponent was a moderate Republican Rutherford B. Hayes, representing fading enthusiasm for the Reconstruction, improvement in race equality. Tilden needed to carry a few Northern states, and he achieved his targets: New York, New Jersey, Indiana, Connecticut. It looked like he won the Presidency, breaking the Republican rule of 16 years. But voting results in three Southern States – South Carolina, Louisiana and Florida – were challenged. Additionally, one Oregon elector was questioned. Hayes needed all contested votes to win the Electoral College, 185-184. And guess what…

To resolve the situation, a 15-member Electoral Commission was formed: 5 members from each the (pro-Republican) Senate, the (pro-Democrat) House of Representatives, and the Supreme Court. In all, the Commission had 7 Republican, 7 Democrats, and Justice David Davis was neutral. But he got elected to the Senate by Illinois –  so he resigned from the Supreme Court and the Electoral Commission. The replacement could only be a Republican Justice. And for every contested state, the electoral votes were awarded to Hayes by the 8-7 partisan vote.

Behind the scenes, the Compromise of 1877 deal is strongly suspected. In return for the presidency, the Republicans agreed to withdraw Federal troops from the former Confederate states and end the Reconstruction, allowing all segregation and disfranchisement in the South.

The 1824 election

This early election hanged on a resolution of the unique case when no candidate got the majority of the electoral votes. The 12th Amendment prescribes an unearthly procedure:

If no candidate receives a majority of Electoral votes, the House of Representatives elects the President from the 3 Presidential candidates who received the most Electoral votes. Each state delegation has one vote. The Senate would elect the Vice President from the 2 Vice Presidential candidates with the most Electoral votes. Each Senator would cast one vote for Vice President. If the House of Representatives fails to elect a President by Inauguration Day, the Vice-President Elect serves as acting President until the deadlock is resolved in the House.

The other election that came closest to this was 1860. That campaign consisted of two separate elections basically: between Lincoln and Douglas in the North, and between Breckinridge and Bell in the South. Lincoln swept the North without campaigning or winning anything in the South. 180 electoral votes (out of 303), 40% of the popular vote were enough for him.

By 1824, the Federalist party was dysfunctional for years already (except in high courts). The Democratic-Republican party was dominant, but breaking up. Their congressional caucus nominated William H. Crawford (despite a stroke in 1823), avoiding the already Federalist-ish (soon to be National Republican, and then Whig) leaders Henry Clay and John Quincy Adams. Those two were nominated anyway, and Henry Clay counted on the 12th Amendment and his authority as the House Speaker for success. To his agitation, however, Andrew Jackson entered as well – a populist hope of Western settlers and religious, anti-industrial sentiments, a hero of the 1812 War. His portrait is to be replaced soon on $20 bill.

The results of the 1824 election were:
Andrew Jackson – 99 e.v. (41.4%)
John Quincy Adams – 84 e.v. (30.9%)
William Crawford – 41 e.v. (11.2%)
Henry Clay – 37 e.v. (13.0%)

So Clay did not finish in the Top 3 even. But he used his influence to push Adams through the vote in the House, becoming the Secretary of State himself. This suspected Corrupt Bargain was not glorious to both men. The presidency of Quincy Adams is regarded as weak, and Clay was shadowed by it in his several later nominations and candidacies, never succeeding. Jackson founded the Democratic party and soundly won the 1828, 1832 elections.

What for 2016?

The 1824 scenario should be interesting today. With the two major candidates – Hillary Clinton and Donald Trump –  exciting more antipathy than support, there is a constitutional possibility to upset them both. A third candidate could gather just a few electoral votes, but if that prevents both Clinton and Trump to reach 270, he/she might win straightforwardly – with courtesy of the House of Representatives, of course. Bah!

Since the House is controlled by the Republicans, this is hardly a route for Sanders. But if establishment Republicans are serious about stopping Trump, what are they waiting for? State registration deadlines are approaching.

The following exchange is from a Foxnews’ show. It’s a “fair and balanced” passion of Brit Hume (until recently, their anchor newsman). Speaking on Obama’s tax increases:

Hume: Well it’s just so dishonest because the top what, 2% of tax payers in this country pay something on the order of 40% of the taxes already. The top 5% pay 60% of the taxes already, income taxes. And the top 50% pay all but, you know they pay like 95% of the taxes. So most of the people in this country, most of the people pay almost, either no income taxes at all or almost none. That’s like half the income brackets. So the idea that the playing field is somehow tilted in favor of the few is bosh!

[…]

The share of income taxes paid by the higher income people over the years has not gotten smaller under the Republicans. It’s gotten larger. Why do you…

Williams: And why is that Brit? Because they’re earning more money.

[UPDATE: As immediately remarked by Daily Kos readers, Brit Hume refers exclusively to income taxes. Regular folks appear to catch up on payroll and consumption taxes.]

The really sad reason is, of course, that more and more Americans are earning less and less – in fact, so much more less that you can’t collect much [income] taxes from half of them.

The Reagan-style free economy is not great for most Americans, eventually. Bubbles and credit expansion can only hide the truth only for so long.

Even by then, was it difficult to see through the rosy numbers? Why does this graph have no political impact?

Here you can find more of telling statistics:

Real household incomes fell in 94% of the states (47 out of 50) in 1999-2005…

…families have the lowest rates of saving since 1929 and historic record debt ratios…

…families must work more months each year (than before) to pay all taxes…

…61% of married mothers of small children work – 6 times more than 11% in 1950…

…household debt ratios increased 90% faster than growth of the economy since the late 1960s…

…the median income of men in their 30s fell 12% from 1974 to 2004 when adjusted for inflation…

The economy cannot be great, if more and more people get inadequately less income to spend.

If you have a spare hour, watch this lecture by Elizabeth Warren; she teaches contract law, bankruptcy, and commercial law at Harvard Law School. (Her talk starts at 4:50 mark.)

Recently, I wrote a diary with one of speculations that speculative markets (such as stock and real estate markets) tend to behave like pyramid schemes at certain stages (like now). The crucial feature is the point when the market valuation grows predominantly because of outsiders entering the market with expectations of profitting from the steadily growing market. When the market volume has nowhere to grow, the latest entrants (if only) suffer dearly.

I am content to find out that my suspicion is not a wack unseen to human mind. Please enter Prof. Hyman Minsky (1919-1996), and his Financial Instability Hypothesis.

Just a look at the list of Minsky’s major works tells that he thought a lot about financial crisises.

[Minsky] theorized that financial fragility is a typical feature of any capitalist economy. High fragility leads to a higher risk of a financial crisis. To facilitate his analysis Minsky defines three types of financing firms choose according to their tolerance of risk. They are hedge finance, speculative finance and Ponzi finance. Ponzi finance leads to the most fragility.

Ponzi finance obviously refers to Ponzi schemes, which are pretty synonymous to pyramid schemes for our purposes.

In Minsky’s own words (1974): “The first theorem of the financial instability hypothesis is that the economy has financing regimes under which it is stable, and financing regimes in which it is unstable.

The second theorem of the financial instability hypothesis is that over periods of prolonged prosperity, the economy transits from financial relations that make for a stable system to financial relations that make for an unstable system.

In particular, over a protracted period of good times, capitalist economies tend to move to a financial structure in which there is a large weight to units engaged in speculative and Ponzi finance. Furthermore, if an economy is in an inflationary state, and the authorities attempt to exorcise inflation by monetary constraint, then speculative units will become Ponzi units and the net worth of previously Ponzi units will quickly evaporate. Consequently, units with cash flow shortfalls will be forced to try to make positions by selling out positions. This is likely to lead to a collapse of asset values.”

A more technical summary and the 1992 version of Minsky’s clarifications are available here.

The internets are already buzzing with relating Minsky’s theory to the current situation of the real estate market. Here is a nice summary of the typical bubble cycle.

Stage One – Displacement

Every financial crisis starts with a disturbance. It might be the invention of a new technology, such as the internet. It could be a shift in economic policy. For example, interest rates might be reduced unexpectedly. Whatever it is, the world changes for one sector of the economy. People see the sector differently.

Stage Two – Prices start to increase

Following the displacement, prices in the displaced sector start to rise. Initially, the price increase is barely noticed. Usually, these higher prices reflect some underlying improvement in fundamentals. As the price increases gain momentum, people start to notice.

Stage three – Easy Credit

Increasing prices are not enough for a bubble. Every financial crisis needs rocket fuel and there is only one thing that this rocket burns – cheap credit. Without it, there can be no speculation. Without it, the consequences of the displacement peter out and the sector returns to normal.When a bubble starts, the market is invaded by outsiders. Without cheap credit, the outsiders can’t join in.

Cheap credit is the entrance ticket for outsiders. For example, gas prices have risen sharply in recent years. However, banks aren’t giving out loans so that people can store gas in their garages in the hope that the price will double in three months. The banks, however, are prepared to give loans to people with poor credit to hold condos in the hope that they can be quickly flipped.

The rise in easy credit is also often associated with financial innovation. Often, a new type of financial instrument is developed that miss-prices risk. Indeed, easy credit and financial innovation is a dangerous cocktail. The South-Sea Bubble started life as new-fangled legal innovation called the limited liability joint stock company. In 1929, stock prices were propelled into the stratosphere with the help of margin calls. Housing prices today accelerated as interest-only mortgages emerged as a viable means for financing overpriced real estate purchases.

Stage Four – Over-trading

As the effects of easy credit kicks in, the market starts to overtrade. Overtrading stimulates volumes and shortages emerge. Prices start to accelerate, and easy profits are made. More outsiders are attracted, and prices run out of control. Accelerating prices attract the foolish, greedy and the desperate to enter the market. As a fire needs more fuel, a bubble needs more outsiders.

Stage five – Euphoria

The bubble now enters its most tragic stage. Some wise voices will stand up and say that the bubble can no longer continue. They put together convincing arguments based upon long run fundamentals and sound economic logic. However, these arguments evaporate in the heat of the one over-riding fact – the price is still rising. The wise are shouted down by charlatans, who justify insane prices by the euphoric claim that the world is different and this new world means higher prices.

Of course, the “new world” claim is true; the world is different every day, but that doesn’t mean that prices run out of control. The charlatan wins the day and unjustified optimism takes over. At this point, the charlatans bolster their optimism with the cruelest of all lies; when prices finally reach their new long run level, there will be a “soft landing”. The idea of a gentle deceleration of prices calms the nerves.The outsiders are trapped in knowing denial. They know that prices can’t keep rising forever, but they rarely act on that knowledge. Everything is safe so long as they quit one day before the bubble bursts.Those that did not enter the market are stuck in a terrible dilemma. They can not enter but neither can they stay out. They know that they have missed the beginning of the bubble. They are bombarded daily with stories of easy riches and friends making massive profits. The strong stay out and reconcile themselves to the missed opportunity. The weak enter the fire and are damned.

Stage Six – Insider profit taking

Everyone wants to believe in a new brighter future but a bubble takes that desire and turns it upside down. A bubble demands that everyone believes in a brighter future, and so long as this euphoria continues, the bubble is sustained. However, as madness takes hold of the outsiders, the insiders remember the old world. They lose their faith and start to panic. They understand their market, and they know that it has all gone too far. Insiders start to cash out. Typically, the insiders try to sneak away unnoticed, and sometimes they get away with it. Other times, the outsiders see them as they leave. Whether the outsiders see them leave or not, insider profit taking signals the beginning of the end.

Stage seven – Revulsion

Sometimes, panic of the insiders infects the outsiders. Other times, it is the end of cheap credit or some unanticipated piece of news. But whatever may be, euphoria is replaced with revulsion. The building is on fire and everyone starts to run for the door. Outsiders start to sell, but there are no buyers. Panic sets in; prices start to tumble downwards, credit dries up, and losses start to accumulate.

Here is the paradox of all bubbles – everyone knows how the fatal combination of easy credit, overtrading and euphoria will affect prices. Minsky didn’t need to write down a thing about the madness of speculation. America’s investors have a lifetime of experience. Within the space of five years, America moved from the tech stock bubble into the real estate bubble.Today’s housing prices are grossly overvalued. Everyone knows that prices will collapse. It might be tomorrow, or it might be two years from now. One thing, however is certain, the longer it takes for the bubble to burst, the more painful it will be.

New technology “disturbances”, easy credit, enthusiastic trading, euphoria… What are we missing?

In a way, we can see that Bush’s tax cuts, financial and corporate policies have impressive workings. By encouraging (or forcing, also indirectly via pension funds) people to enter financial and real estate markets, by running up debt (in effect, at the cost of Social Security) they vastly increased demand for stocks and real estate. The demand growth is self-inforcing and self-necessary, just as in a Ponzi scheme. But once the demand hits a ceiling… you can bet, there won’t be many buyers.

Minsky’s theory is “most applicable to a closed economy“. Some bubles might have to collapse by now already, but the process of globalization spreads markets and the pool of outsiders entering them. Hence, the bubbles may keep growing. The recent stock market “corrections” are good indications of this process: the Shanghai dip of 3 weeks ago was provoked by rumours that Chinese government may try to curb market speculations more seriously.

Is a colossal collapse of all bubbles eminent? Perhaps there is still enough room for critical bubbles to grow for a few years, or yet another election cycle. But it would be downright immoral and dangerous to rely on that. Something more intelligent can be done, I believe.

It is pretty amazing that knowing so much about financial cycles, the Bush and other world administrations encourage precisely a path to a sharp crisis. Yes, the path does produce excitement of easily growing wealth – just as a pyramid scheme.

Can we enjoy a financial meltdown now?

This diary originated from a discussion of real estate markets, so we will eventually get to financial matters of today. The sweeping bottom question is: how can an apparently steady growth or progress possibly be halted, or even voided? Do civilisations collapse often, and how? Do they just meet bad luck or barbaric invaders sooner or later,  or do they always collapse once they fully employ a “no-brainer” affluence strategy, like greed or self-indulgence? Can gains of globalization and free markets increase forever, or will they abruptly end just “around a corner”?

Globalization must have the limits of the globe, or not? It works all fine while new markets open and expand, while masses of new individuals enter speculative markets, either directly or via inescapably more aggressive pension funds. Will the global economy continue to prosper when the stream of eager new buyers will dry out?

Deep down, it is not exceptionally remarkable that evaluation of the markets grows while their volume rapidly expands. You can run a pyramid scheme with the same effect!
While I was preparing this diary, I googled up an internet article with almost the same title. Interestingly, it was written in the year 2000. (Remember those times?) For the beginning, let’s follow the article.

Earth is full of dead cities. Civilizations, like individuals, are born, flourish and die. Except ours. Ours, we believe, is different, the beneficiary of all the rest. The sunny afternoon in which we thrive will stretch ahead forever. In this belief, we carry on our lives against the evidence of time.

Indeed. Egyptians and Maya had much more than their stone pyramids. Yet we know now well only the pyramids. How did it happen that everything else went gone?

Tikal, the greatest city, seems a Manhattan of art deco pyramids [presiding] over a conurbation of 120 square kilometres. It took 1,500 years to reach that size, yet all of Tikal’s skyscrapers were built in its final century, an extravagant flowering on the eve of collapse.

Jared Diamond has the same observation: civilisations tend to collapse after an imposing boom.

Civilizations rise because they find new ways to exploit natural and human resources, to tip the balance between culture and nature. They feed on their local ecology until it is degraded, thriving only while they grow. When they can no longer expand, they fall victim to their own success. Civilization is a pyramid scheme.

The cusp between rise and fall is a matter of scale, of demand outrunning natural limits.

Are we sure the modern civilisation was never warned?

[There] was a cost, a debt to nature accruing so gradually it was seldom observed, let alone understood. Woods dwindled and receded, denuded land became prone to drought and flood (including, perhaps, the Flood), irrigated fields turned sour. The cities of the plain turned their surroundings into a saltpan. The desert in which their ruins stand is a desert of their making.

Can we make better guesses, what can the greatest biblical human folly possibly be? What about blind confidence that growing wealth can grow forever? Or that things never go catastrophically badly to a prospering civilisation? That greed is an ultimate vehicle of progress?

In the past, these cycles were regional. As Rome fell in the Mediterranean, the Maya rose in Central America, and so on; the setbacks were local, the overall experiment kept going. But now the 10,000-year bets all rest on a single throw. We have one big civilization, feeding on the whole Earth at such a rate that we can observe the exhaustion of natural capital within our lifetimes, whether it be the loss of wildlife, water, coral reefs or rain forests. We are razing forests everywhere, we are irrigating everywhere, we are fishing everywhere […]

Couldn’t Darwinnian selection of civilisations be somewhat more effective up until this global moment?

During the 20th century alone, our population multiplied by four, while our consumption grew by 40. Yet the number in abject poverty today is as great as all mankind in 1900. Is this progress? Can the stock market be trusted to run the world? Or is our consumerist boom the illusory wealth of wastrels blowing an inheritance – by no means only their own? Is the promise of prosperity for six billion the Big Lie of our time?

Will we be very lucky if just a meek portion of humanity will survive a sweeping climate/geological change and self-inflicted chaos? Should we at worst hope for not much more but unambiguous preservation of a single big lesson for the next civilisation cycle?

Ok, I stop here with digging the apocalyptic spectrum. Please browse that great article by Ronald Wright on your own.

I am changing the subject with the words stock market.  I may be dumb with putting this “demystification” in a heartlessly depressing way, but would it be really more considerate to wait?

The financial markets just had a bad day across the world, after a rocky week. Can we make more sense of this than the excuse a combination of factors?

The hypothesis is that the modern economy is dominated by ever increasing and ever expanding speculation in stock and real estate markets. These markets will grow just as long as the volume increases. The markets are vastly overvalued due to a pyramid-style growth of the number of players. The markets will fail when there won’t be any bottom to add to participants’ pyramid.

How did we got here? What is the more important effect of Bush’s tax cuts: blatant enrichment of already the most wealthy and most influential, or inducing millions of Americans into stock and real estate markets? Do we need now many thousands (a day) of Chinese entrants into financial markets to keep the world economy afloat?

An important factor for market’s fall last week was the anticipation that the Chinese government is going to control China’s speculative markets more seriously, or raise capital gain taxes making speculation less profitable. Even conservative pro-market gurus stress that. Isn’t this is a striking test of how important is the volume growth to the current economy?

What the world has been following now is perhaps precisely a recipe of a pyramid disaster – a moment without buyers is coming, and most of the players will never exercise the equity they nominally have at this moment. We should look closely to similarities with the First Great Depression. The pro-market leaders might have been following the same pattern inadvertently, believing they found perpetum mobile for the fulfillment in this world. But it is not so that governments were never building financial pyramids unknowingly. Does humanity has no better ambition than gambling for an eternally easy living?

Show me some rays of light.

For once, pro-war LA Times commentator Max Boot put up a reasonable article in his column:

Is Iraq turning into Yugoslavia?

[…] In the former Yugoslavia, as in Iraq, ethnic groups have clashed over the years, but they also have had long periods of peaceful coexistence — and not only under the heavy hand of a Tito or Saddam Hussein. Croats, Bosnians, Slovenians, Kosovars, Macedonians, Montenegrins and Serbs lived together for centuries under the relatively benign Ottoman and Habsburg empires and later under their own monarchy. So did Kurds, Shiites and Sunnis in Mesopotamia.

In both cases, intermarriage rates were high, and there was no popular clamor for civil war. In more recent times, domestic strife was fomented by megalomaniacs such as Slobodan Milosevic and Abu Musab Zarqawi, who sought to profit from the violence. They were able to gain the upper hand because central authority had collapsed. In a lawless land, ordinary people were forced to seek protection from sectarian militias. As these groups committed atrocities, they fed demands for vengeance, leading to a death spiral.

Quite right: rarely, or very rarely, is there genuine broad public zeal for war. It takes a maniac or few to awaken supposedly deep instincts for violence. Recent history of sudden political changes shows that most people assume a normal and more just life in good faith, but then a handful of manipulative nuts or most active self-seekers fill the power vacuum. A good example but in the economic sphere is Russia in the 1990’s.

Sadly, the Bush administration behaves now just as maniacs in power. They are not to be stopped regardless of what is reasonable or what the people want. As Martin Luther King would say again, the United States is the greatest purveyor of violence in the world today.

Of course, deep “culture” of violence of the Middle East cannot be denied. But that is not a tragedy of “savages beyond help”. The tragedy is of adaptation to ever escalating spiral of violence. The Middle East is not stuck in the Middle ages. The violence there is much worse than then, and getting worse. Whether human-naturally or not, the West made contributions to the sad evolution of violence there. Mere adaptation to violent environment has lots of vile looks, for any side.

Viewing the violence from a comfy couch, it is easy to conclude that “these people are animals. We can’t help them.” But imagine what would have happened in Los Angeles if the 1992 riots had gone on for weeks, with no police or military intervention. L.A. could have come to resemble Baghdad or Sarajevo, with Anglo, African American, Latino and Asian gangs rampaging out of control.

To extend the analogy, violence could have spread throughout Southern California. That’s what happened in the Balkans when fighting spread from Slovenia, the first province to secede, to Croatia, Bosnia and Kosovo. A wider spillover was averted thanks to American-led intervention.

Here I start to disagree with Max Boot, obviously. The analogy to the LA riots is mediocre at best. Is he advocating the role of US as the world policemen?

Today, only the U.S. troop presence is preventing Iraq, already in the throes of a low-level civil war, from degenerating into an all-out conflict a la Yugoslavia. The likely effect of such a bloodletting is spelled out in a recent report, “Things Fall Apart,” by Brookings Institution fellows Daniel Byman and Kenneth Pollack. They examined recent civil wars not only in Yugoslavia but in Afghanistan, Congo, Lebanon, Chechnya, Nagorno-Karabakh, Somalia and Tajikistan. “We found,” they write, “that ‘spillover’ is common in massive civil wars” and “that while its intensity can vary considerably, at its worst it can have truly catastrophic effects.”

I am sceptical whether Iraq would necessarily fall into worst civil war if the US troops leave. At the first place, George W Bush ignited the hell there with his “Mission Accomplished”. The presence of US troops is more a latent source of violence than alleviation; the “surge” is about to prove that.

If the US troops would leave, it is of course possible that Iraq would fall into worst civil war, if the worst maniacs grab the power. Studies of worst ethnical conflicts are important, but so should be studies of almost “trivial” cases of peaceful resolutions. It is easy to overlook, for example,  that the breakup of the Soviet Union was not traumatic neither in Eastern Europe nor in Central Asia (unless autocratic regimes there have to be viewed as ethnical problem). Most of Europe has almost forgotten agitations of just 70 years ago. Could Europe fall into nationalist torment again? With certain “leaders”, that might be possible; they would know much how to make hell. But we ought to know something how to avoid national disasters as well.

Humanity may not know “scientifically” much how to heal national conflicts as yet. If people do not allow themselves  to resist their militant instincts, they only learn how to fight wars.

Regarding Iraq, it is plausible that there is more chance for a nonviolent resolution with the US troops there than without them. But that might take more than a  policing role. I do not mean that there must be an idealistic Wilsonnian nation building solution. Any nonviolent resolution is better than persistently violent limbo. If I have particular suggestions, these are: serious commitment to break violence; forcing any kind of dialogues; establishing safe zones; and setting behavioral example (at least in the safe zones).

For time being, the US troops often show quite barbaric behavior standards themselves. The presence effectively prevents Shiites and Sunnis take responsibility for their own safety. As far as the “war on terror” goes, the Iraq episode is a terror haven.

Maybe it’s too late to avoid the catastrophe that Byman and Pollack warn of. But Yugoslavia showed how much good a decisive intervention could do. The case for action — for sending more troops rather than withdrawing the ones already there — is even stronger in Iraq because we have caused its current turmoil and cannot escape its consequences.

Just sending or keeping troops is not enough of a decision. You should better what exactly you do with them. Does Bush know what he wants? Even if he does, you don’t want to trust him, do you? But right, the US can do its best to resolve the turmoil it caused.

 Are they proud of being good in scaring the bejesus out of everyone in each election cycle?

To judge it from their latest ads and talks, the War on Terror is won by terror.

Are Republicans proud of hurting Democrat politicians more effectively than Al Qaeda terrorists?

Are Republicans proud of giving nice promises to their libertarian or Christian base, but never delivering to them?

Are Republicans proud of achieving new corruption standards? Are they proud of accusing the opponents of ethical failures, while doing things far worse?

Are Republicans proud of George W. Bush? Who is proud of George W. Bush? That guy did his worst in following security briefings prior to the 9/11. He did his absolutely worst with Katrina. He is continuing to do his worst in Iraq.

[Sorry, it’s just a few scattered one-liners. I have no time or flow to connect them into a beefy diary.]
[Crossposted at Daily Kos.]

Are you interested in what an Egyptian democracy activist and professor of political sociology at the American University in Cairo has to say about the New emerging Middle East? Read Saad Eddin Ibrahim in Washington Post. Here are snippets from there:

President Bush and Secretary of State Condoleezza Rice may be quite right about a new Middle East being born. [But] it will not be exactly the baby they have longed for. [It] will be neither secular nor friendly to the United States.

The law of unintended consequences is very strong for violent meassures – as if no one had guessed that.

What is happening in the broader Middle East and North Africa can be seen as a boomerang effect that has been playing out slowly since the horrific events of Sept. 11, 2001. In the immediate aftermath of those attacks, there was worldwide sympathy for the United States and support for its declared “war on terrorism,” including the invasion of Afghanistan. Then the cynical exploitation of this universal goodwill by so-called neoconservatives to advance hegemonic designs was confirmed by the war in Iraq. The Bush administration’s dishonest statements about “weapons of mass destruction” diminished whatever credibility the United States might have had as liberator, while disastrous mismanagement of Iraqi affairs after the invasion led to the squandering of a conventional military victory. The country slid into bloody sectarian violence, while official Washington stonewalled and refused to admit mistakes. No wonder the world has progressively turned against America.

Some part of the world saw it all along that Bush is dishonest and cynical. At last, it is not “against us” to want to stop him.

Through much of 2005 it looked as if the Middle East might finally have its long-overdue spring of freedom. Lebanon forged a Cedar Revolution. [Egypt] held its first multi-candidate presidential election in 50 years. So did Palestine and Iraq, despite harsh conditions of occupation. Qatar and Bahrain [continued] their steady evolution into constitutional monarchies. Even Saudi Arabia held its first municipal elections.

But there was more. Hamas mobilized candidates and popular campaigns to win a plurality in Palestinian legislative elections and form a new government. Hezbollah in Lebanon and the Muslim Brotherhood in Egypt achieved similar electoral successes.

[Instead] of welcoming these particular elected officials into the newly emerging democratic fold, Washington began a cold war on Muslim democrats. Even the tepid pressure on autocratic allies of the United States to democratize in 2005 had all but disappeared by 2006.

Bush cannot accept democrasy when people decide otherwise than he wishes.

Now the cold war on Islamists has escalated into a shooting war, first against Hamas in Gaza and then against Hezbollah in Lebanon. Israel is perceived in the region, rightly or wrongly, to be an agent acting on behalf of U.S. interests. [Destroying] Lebanon with an overkill approach born of a desire for vengeance cannot be morally tolerated or politically justified — and it will not work.

[It] is too early to predict whether Prime Minister Ehud Olmert will survive Qana II and the recent war. But Hezbollah will survive, just as it has already outlasted five Israeli prime ministers and three American presidents.

Born in the thick of an earlier Israeli invasion, in 1982, Hezbollah is at once a resistance movement against foreign occupation, a social service provider for the needy of the rural south and the slum-dwellers of Beirut, and a model actor in Lebanese and Middle Eastern politics.

Hezbollah is a smarter factor than Washington would admit. What are other effective models to fight neo-conservative follies?

According to the preliminary results of a recent public opinion survey [in Egypt], Hezbollah’s action garnered 75% approval, and Nasrallah led a list of 30 regional public figures ranked by perceived importance. He appears on 82% of responses, followed by Iranian President Mahmoud Ahmadinejad (73%), Khaled Meshal of Hamas (60%), Osama bin Laden (52%) and Mohammed Mahdi Akef of Egypt’s Muslim Brotherhood (45%).

The pattern here is clear, and it is Islamic. [Among] the few secular public figures who made it into the top 10 are Palestinian Marwan Barghouti (31%) and Egypt’s Ayman Nour (29%), both of whom are prisoners of conscience in Israeli and Egyptian jails, respectively.

None of the current heads of Arab states made the list of the 10 most popular public figures. [These] Egyptian findings suggest the direction in which the region is moving. The Arab people do not respect the ruling regimes, perceiving them to be autocratic, corrupt and inept. They are, at best, ambivalent about the fanatical Islamists of the bin Laden variety. More mainstream Islamists [are] the most likely actors in building a new Middle East.

[These] groups, parties and movements are not inimical to democracy. They have accepted electoral systems and practiced electoral politics, probably too well for Washington’s taste. Whether we like it or not, these are the facts. The rest of the Western world must come to grips with the new [reality].

Surprising winners and loosers?!

[Crossposted at European Tribune and Daily Kos]

Capitalism has made us better people – morally better. That is the core claim of the thick (over 500 pages) book

The Bourgeois Virtues: Ethics for an Age of Commerce

by the economist prof. Deirdre N. McCloskey.

And that is only the first of the planned four books, where she is going to prove that all the “left and right intelligentsia” are wrong to criticize capitalism for corruption, social alienation and anti-cultural consumerism.

At best, we have another academic exercise in advocating a particular system to the highest philosophical, and even moral, grounds. How successful is Prof. McCloskey? How different is she from Karl Marx, for example? At worst, this book signals a neo-neo-calvinistic ideology for emerging David Brooksian class of “supermoral” lords, where all morality is decided lonely by the size of the bank account, regardless how the money is earned or spent.
I do not pretend that I read the book, but I found a (presumably) characteristic excerpt from the book. The tone is vexingly persuasive. Perhaps I offer more pun than it deserves, but I almost feel like reading a Soviet textbook on something. I do not mean to reject the arguments instinctively. But I find it appropriate to recall ancient words of a Persian poet:

Out beyond the idea
Of right-doing and wrong-doing
There is a field.
I’ll meet you there.

As I understand from reviews, the book frequently gives quotations from philosophers, artists, economists and historians criticizing capitalism, and then goes on with rebutting them. It seems, the book tries hard to set in stone “Capitalism is good and virtuous” beyond any further discussion. That does not look like great science.

Where to start to disagree with Prof. McCloskey? First off, we may agree that capitalism is a highly functional social-economic system, evolving as well. Depending on definition, it is a (or the) driving force of human activity for the last 200 years, or maybe much longer. And here is the first conceptual problem: what do we attribute to capitalism? Writers like Charles Dickens wrote novels like Hard Times out of perception that the capitalist system supports and deepens certain injustices, and millions of readers acclaimed these novels and lived by the same perception. This understanding cannot be dismissed just by providing a caricature. On the other hand, observing that welfare, technology, education and leisure improved with time does not indisputably mean that these improvements should be attributed overwhelmingly to capitalism. It is not serious to excuse the greed of Kenneth Lays as “fallible human nature”, or by negative expectations from intelligentsia. The freedom to cheat and take dishonest advantages is being basically lobbied by capitalism apologists.

When it comes to ethics, I do not really see a basis for McCloskey’s thesis. My main objection is that capitalism does not really give consistent moral pressure on people. Capitalism does make people more prudent, and asks to understand each other’s needs – at some times stronger than at others. But capitalism does not force to follow the seven virtuesequally strongly and consistently. What about abstinence and humility for example? Capitalism does not really asks people help each other selflessly, does it? In contrary, the ideology is often literally so understood that individuals think about nothing but their own benefit, and explicitly ignore discomfort or even pain of others. Morality is based on not hurting the others, is it not?

As Prof. McCloskey clearly likes the Christian tradition, we should also recognize that capitalism does not put consistent pressure to avoid the seven cardinal sins as well. If you think about it, greed is one of the cardinal sins – yet the modern capitalism glorifies greed as universal driver for everything! That might be good for long.

McCloskey’s description of ethical standards “brought” by capitalism is not impressive. Is politeness of supermarket employers the best we can hope for? Too often she uses expressions like

Although McCloskey declares that “if we had gained a better material world, but had thereby lost our souls” she would have no praise for capitalism, her case is still more material than moral. Her most frequent arguments are about dollars earned a day throughout generations and in different parts of the world, or so. Yes, capitalism gave more scope to more people to pursue their purposes – but capitalism left a lot of unfairly wrecked lives and dead bodies as well, and it is continuing to do so in the US with increasing pace. (I mean the industries of credit, insurance, health care, for example. Or what about military industry?) These considerations plainly falsify any exceptional morality of capitalism. And the question “How better does capitalism make the people?” remains unaddressed, really. Most of the people pursuing their purposes “whatever it gets” are far from the best.

Comparison of capitalism to other systems does not prove much either. Even the comparisons are not very interesting. In many respects, socialism was “better than all previous systems” as well, while it was sustainable. The same caveat might apply to capitalism eventually as well – the concerns about limits of GDP growth are very reasonable. We may still trust resilience of capitalism, but here we only recognize that capitalism evolves – it learns from its own mistakes (some of them immoral), and it learns from mistakes of successes of “failed” systems as well. That is what it makes capitalism so vital – but that does not mean morality still. So what is capitalism? Is it the same system in the US and in Sweden? In the 1930’s and the 1990’s? What is the difference between “socialist” and “capitalist” Arab countries, for example? How do you decide, do you attribute a commonly good thing, or a brutality, to capitalism or not?

It is not even true that reversal of the course of globalization would necessarily harm the poor. Did capitalism really succeed in Africa, for example? Well, it is a sad mess there. Perhaps we do not have to push Africa to keep up with every tempo of civilization. It takes time to learn good benefits of democracy and free market. It takes much less time for a few to abuse these systems unfairly. Africa could be much better off without egomaniacal resource exploitation, imported industrial dumps, and without education by greed. It would have been much better off if the West had had less interest in “progressive” and “faithful” missions – with people still earning dollar cents a day, but just as happy and unhappy as centuries before.

What is wrong with globalization is that it destroys local economies. As McCloskey says, economy is not so much competition but cooperation. In a local economy, however developed or undeveloped, people work for each other. When globalization comes, people have no use of each other – most of them can only be “useful” to a global corporation. One of the differences between the haves and have-nots of this world is that the rich haves not only compete with each other, but they provide plenty of services to each other, while the have-nots…  The world today looks like a conspiracy of the fortunate rich to shut away the rest of the world, while still making use of it. That is not a moral condition. That must be the primal challenge to capitalism.

In conclusion, we have to notice impressive progress of welfare and mass culture which went simultaneously with the development of capitalism. The system has positive sides, undoubtedly. But capitalism is a force that might work differently, depending on policies. It does not always work out most nicely, and it does not always make people ethically better. In the excerpt, McCloskey mentions “an unhappy reversal in the [equality] trend in the United States in the 1980s” – she should examine it more closely. Loose policies cause lousy capitalism, apparently. Some exercised pressure should not be bad at all for this monster guy Capitalism, especially if we want moral outcomes. I do not agree with the author that “we need to defend a defensible capitalism”. Does capitalism need to be defended now? It must be having too easy time then 🙂

[Crossposted at European Tribune and Daily Kos.]

This is a peculiar news byte:

The other night at a Washington book party for the President’s sister, Doro Bush Koch, the Supreme Court justice arrived with his wife, Ginny […]

“We have to pray for your brother. He’s in real trouble,” Thomas told a wide-eyed Koch […]

Yeah, Clarence Thomas was praying for Bush the long 6 years. Now he needs some help, apparently. What might be coming up?!

Washinton Post Pravda apparently gave the honor of writing an editorial to the fresh writer Domenich boy. How else would you explain this unapologetic ass licking:

Mr. Bush Unvarnished

PRESIDENT BUSH should hold more news conferences. In his hour-long exchange with reporters at the White House yesterday, he was considerably more effective in explaining and defending his commitment to the war in Iraq than in the three carefully worded speeches he has delivered in the past week. In his sometimes blunt, sometimes joking and sometimes unpolished way, he sounded authentic – no more so than when he was asked what had become of the “political capital” he claimed after the 2004 election. “I’d say I’m spending that capital on the war,” Mr. Bush replied.

And so he is. The president’s approval ratings are low and sinking, and Iraq is the main cause: Polls show most Americans no longer believe the war is worth the cost or expect the “victory” Mr. Bush’s speechwriters keep promising. Republicans in Congress have joined Democrats in pressing for a major withdrawal of U.S. troops this year. Even senior military commanders appear more interested in justifying that drawdown than in defeating Iraqi insurgents.

Mr. Bush, however, hasn’t lost sight of the stakes. “The enemy has said that it’s just a matter of time before the United States loses its nerve and withdraws from Iraq. That is what they have said,” he told reporters.

[…]

But the president clearly has not lost sight of the enormous importance of the Iraqi mission, to U.S. security as well as to his presidency. Pressed repeatedly to say when American forces would leave the country entirely, he finally answered: “That will be decided by future presidents and future governments of Iraq.” Not the most politic response, perhaps, but one that shows Mr. Bush remains committed in the theater where U.S. commitment, and leadership, are still desperately needed.

Wow!