Serious versus Non-Serious Positions on US Debt

Paul Krugman was on Morning Joe (video below) this week and put forth  his standard arguments about job creation needing to take priority over deficits.  (I encourage people to watch it for a thorough run-through of the basic Keynesian arguments.)  The co-host, Joe Scarborough, wrote an opinion piece on Politico blasting Krugman.  What strikes me is that the opinion piece is shoddy ranting that uses little evidence and mischaracterizes Krugman’s positions.  Yet deficit scolds Simpson-Bowles praised the article.  I don’t have time to run through everything, but a few key points:

1) The article is entitled “Paul Krugman vs. the world.”  Krugman listed on his blog many of the mainstream economists who hold positions similar to him.  Check it out for the details.

2) Scarborough blatantly oversimplifies Krugman’s position:

“Mr. Krugman suggested Medicare and Medicaid shortfalls should be ignored…saying that no one could predict the future of entitlements so there was no need to worry until the programs became insolvent.”

If you watch the show, while Krugman says he thinks it can’t be predicted with absolute certainty that Medicare/Medicaid spending will be unsustainable in the future, he does say it’s a “good bet.”  Nowhere did he say that we need to wait until the entitlements can’t be paid out.  He simply says that it is not something that needs to be addressed immediately given unemployment as a more pressing problem.  Krugman may be right or wrong, but how does someone get taken seriously when they make silly oversimplifications?

 

Watching Krugman’s appearance though made me think that is important to make some major distinctions when discussing the debt issue.   Future entitlement spending problems and the US debt are related issues, but are not the same.  It is important to separate them, because it seems like the average person may think that unless we cut spending on entitlements our economy is going to tank, when in fact the situation is more complex.  There is an issue of the sustainability of entitlement spending related to an increase in the size of the population dependent on Social Security and Medicare/Medicaid.  This issue is about whether or not the government will be able to fund those programs.

That is distinct from the size of the US debt, which is usually measured as a percentage of US Gross Domestic Product.  This is an issue of whether bad things will happen if the debt-to-GDP ratio keeps increasing.  An anti-deficit coalition of former and current senators and CEO’s, Fix the Debt, says on its webpage that by the 2040′s our debt will be 200% of GDP.  Krugman actually pointed out on his blog that the Center on Budget and Policy Priorities projects a much more stable debt-to-GDP ratio, assuming economic recovery.  But suppose they are wrong.  Japan’s debt is over 200% of its GDP and its new government is promoting a major stimulus and no one is panicking.
When deficit hawks scold Krugman by misrepresenting his position and dire fears of interest rate increases are put forth when Japan as a counter-example is hardly discussed, it makes it hard to believe that people are making serious arguments.

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Finnish Activists Offer Good Model for US Activists

A reader from Finland, Antti Jauhiainen, has made me aware of the work he and others are doing to promote Participatory Economics (Parecon) in Finland.  For those unfamiliar with Parecon, it is a vision for a post-capitalist economy, originally developed by Michael Albert and Robin Hahnel, based on four values: solidarity, equity, diversity and self-management.  Visit an essay by Michael Albert on Parecon for more on the vision.

Most of Parecon Finland’s work is in Finnish, but Jauhiainen shared with me an article from 2011 by Tuomas Salonen entitled “Campaigning for Participatory Economics in Finland,” that I think demonstrates qualities of effective activism that the left in the US could learn from.  Since I don’t read Finnish I can’t vouch for their current work, but I think the attitude reflected in the linked article is excellent.  Specifically, left movements in the US should pay attention to the following about Parecon Finland:

They are open to feedback and criticism:  As the article states, Parecon Finland “spent the fall of 2010 gathering comments and analysis from various organizations and people in Finland in order to assess some aspects of the vision of participatory economy and how it would be received here. We were happy to receive serious commentary and help in this phase, and it helped us refine some aspects we wished to focus on in our activity.”

They have a specific strategy of contributing to public discussion: “We believe that participatory economics, and the underlying vision of a participatory society, can create new openings in the public discussion, by introducing the ideas of participatory workplace and democratic planning here, as well as offering a very detailed, authoritative critique of the capitalist market economy.”  Moreover, they implemented this with presentations on Parecon on various public libraries and have a website that is updated every business day with appropriate news and media reflecting how their vision applies to the current economic situation in Finland.

While they strongly believe in their vision, they are not dogmatic:  They “[encourage] people to consider and reason the structural mechanism of our current economy, by simply providing the participatory economics model as a serious alternative and a tool for comparing and contrasting the current situation with.  Forceful advocation and argumentation of a rigid model would provide negative effects in any case, and would be contrary to the values of self-management and diversity we advocate.”

The information presented is rational and reasonable:  They obviously are a radical group, yet there are no grand slogans or attempts to shame anyone into supporting their cause.  When they make factual claims, it is supported with footnoted evidence.

Left activist groups would do well to learn from this approach.  For example, if anti-war groups encourage criticism and feedback, they may receive much jingoistic nonsense, but they will also gain an essential understanding of how the public views them and what adjustments they can make for more effective outreach.  Having a vision beyond what they are protesting against will make the public more receptive.  If peace groups say they want social spending instead of military spending, that is a partial answer.  But if someone asks them “If you want the military to be smaller, how will you ensure the US is kept safe?” they need to be able to answer that as well.

Lastly, anti-war groups need to be rational and reasonable.  Compare the following two scenarios, the first one being based on a personal experience and the second my idea for more effective outreach.  (1) Israel is in the midst of bombing Gaza and a crowd has gathered in Boston Common to protest it.  A person who knows nothing about what is happening in Gaza walks by and hears the crowd chanting “Hey, Israel, you can’t hide, we accuse you of genocide!”  (2) Imagine the same scenario except that when the uniformed person walks by, instead of chanting slogans every protester is  handing out leaflets that base its concerns in the language of international law and the protesters engage passersby in conversation.  Those who think the protesters are crazy would think that way in either scenario, but in the 2nd one many people would surely begin thinking about the conflict in a different way.

 

No One Ever Says “We Are on the Road to Japan”

During the presidential campaign, Romney said Obama would drive the US down the road to Greece in terms of its debt.  Sen. John Cornyn made the same argument in an op-ed a could weeks ago, saying we need government spending cuts to avoid the “path of Greece, Italy, and Spain.”  But it interesting that one never hears the argument applied to Japan, which, like China, holds about $1.1 trillion of US Treasury Bonds.  The reason this is interesting is that Japan’s public debt is about 220% of its GDP, while the US is only about half of that.  If the US is allegedly on the “path of Greece, Italy, and Spain”  at rates of 137%, 117%, and 61% then shouldn’t Japan be on the brink and ready to dump US bonds for cash to pay off their debts?  No one has made this argument because no one believes it.  But if the soundness of an economy was simply a function of how much debt we owed, then it would be made all the time.

Crucial Context on Colombia (Reuters critique)

I came across another Reuters article that needs some facts to add missing context.  This one is about about Colombia’s President Juan Manuel Santos’ willingness to hold a public referendum on any peace deal his administration makes with the rebel FARC guerrillas.  The article states

The drug funded group [FARC]…has fought successive governments since 1964 and killed tens of thousands.”

It is important to note that Colombian paramilitaries also played a major role in the conflict, committing gross acts of inhumanity with the backing of the state and also made a significant amount of money through drug money.  Despite their demobilization deal with the state in 2003, Human Rights Watch reports that there have been successor groups that “engage in drug trafficking” and “commit widespread abuses against civilians, including massacres, killings, rapes and other forms of sexual violence, threats, and forced displacement.”  HRW reports concerns of “ongoing infiltration of the political system by paramilitaries and their successor groups.”  Perhaps the situation has improved in the past decade since in 2001 HRW put out a report stating paramilitary “groups are responsible for most human rights violations, including massacres and forced displacement…Colombian army brigades and police work with and even profit from paramilitaries, treating them as a force allied with their own.”  The FARC are not nice guys, but it is not as if the state is on the side of the angels.

Reuters leaves out something absolutely critical when they state,

Santos has ruled out discussing major changes to Colombia’s economic or political model, saying that if the guerrillas want to modify the system, they should run for election.  More than 20 years ago, Colombia held a nationwide assembly to rewrite the 1886 constitution. Demobilized rebels from smaller groups participated, but not the FARC or the National Liberation Army, another left-wing group.”

This makes it seem as if the FARC has been hesitant to pursue a political path and leaves out why they may want constitutional guarantees.  The FARC faced a major assassination campaign when they did pursue this path in the 1980′s and 1990′s.

FACT: A 1987 article by the Christian Science Monitor reported,

The country’s oldest and largest guerrilla group, the Revolutionary Armed Forces of Colombia (FARC), created the Patriotic Union to run candidates in last year’s congressional and presidential elections. Since then, four of 14 UP congressmen have been killed. Authorities have jailed no suspects in any of the killings. But a report last month by Amnesty International accused security forces and their civilian accomplices of murdering more than 1,000 people.”

FACT: A 2007 Amnesty International report stated that “Since the UP [Patriotic Union] was founded in 1985, more than 3,000 UP members have been killed or been victims of enforced disappearances, the vast majority carried out by the security forces and paramilitaries.”

I think this context is important, especially since Reuters notes that the FARC did not participate in the rewriting of the constitution.  Any guesses as to why?

Beyond Leftist Resentment

I have been a leftist at least since college about 12 years ago.  I still remember when, after much thinking, I decided that I was an anarchist.  To this day, I still think capitalism is a fundamentally flawed system that should be replaced with something better.  However, I have had some thoughts lately that seem to go against everything I have stood for as a leftist, yet I can’t help but thinking there is some truth to it.  The past year I have read a lot of existentialist philosophy and psychology, especially Nietzsche and Rollo May.  While May has influenced my thought a great deal, the main influence for what I will address here has been Nietzsche.

Nietzsche saw a difference between what he called “master morality” and “slave morality” in his The Geneology of Morals.  He claims that the traditional powerful classes differentiated between “good” and “bad,” with “good” being associated with their own mastery and accomplishments and “bad” as that which was associated with the weaker social classes.  Nietzsche goes on to claim that the weaker classes developed resentment against the powerful, jealous of the weak classes’ inability to have what the masters did.  Thus, the weak labelled everything the masters were as “evil” and wealth, power, and  prestige were seen as vices.  This dichotomy of good vs. evil he labels as “slave morality,” which he sees as the basis for Christianity.  He sees a similar dynamic with socialists and democrats of his day, with the agitators for equality being a form of jealous resentment.   As a historical analysis, I think Nietzsche is extraordinarily simplistic, especially since it fails to address the anxieties and fears that drive the “masters” to cling to power.

Nonetheless, I have been wondering if many on the left are not really as morally righteous as they claim, but are actually coming from a selfish sense of resentment when they express anger at the moral evils of capitalism (or racism/sexism/pick any “ism”).  This is not something I can prove and it is honestly mostly speculative, but I think there is some truth to it given how angry people on the left can be.  To be sure, there is much to be angry about and much social injustice that makes me angry, which a glance at my blog posts here will demonstrate.

However, I am more concerned about activists who are so consistently angry that it seems to be the basis for their identity.  For emphasis, I will repeat that there is much to be angry about, but there is a difference between being angry about specific things and having anger as the basis for your worldview.  I speak as someone who absolutely used to be in the latter category and in many ways is still struggling to be angry at the right things, as opposed to generally resentful.  From my own self-introspection I think my anger was based in a sense of alienation and feeling that I didn’t belong in a world where accumulating wealth was the top priority.  I’ve come to realize I face three choices: (1) I can leave my leftist beliefs behind and accept the values of mainstream capitalist society, (2) I can become angry at mainstream society for not sharing my values, or (3) I can be angry at the cruelty that is part of capitalist society and yet affirm my own ability to exist in it without feeling alienated or letting anger be the basis for my worldview.  Rollo May, in Man’s Search for Himself, discusses how rebellion is important but is the adolescent stage on the way to full maturity.  In full maturity, one goes beyond just saying “No” to what one does not like but says “Yes” to one’s own values and creativity.  I honestly feel that much of the left is still in the adolescent stage.

For an extreme example, take ANSWER (Act Now to Stop War and Racism).  They are angry about the right things, but all they are is angry.  Their webpage lists off all the things they hate: violence against women, opposition to war, FBI domestic surveillance, right-to-work laws, among other things.  Their site has a number of images of their protests.  Another example (admittedly more extreme) is the International Socialist Organization, which I worked with in college in anti-death penalty activism.  Even back then I could see that these people were at most allies of convenience since their whole identity is based on anger at capitalism.  If there were some kind of revolution I wouldn’t trust ISO members to lead it since they are angry and dogmatic, which is an extremely unhealthy combination.

Even a site like ZNet, which to be fair often has posts about positive vision, usually contains post after post about how this or that oppressor is hurting this or that oppressed person.  I find myself having more respect for the work of one of ZNet’s founders Michael Albert, along with Robin Hahnel, for their focus on developing an alternative vision of a future economy, Participatory Economics.  They clearly have no love for capitalism and are part of activists circles, yet they are informed by a positive vision.  Or even someone like Hugo Chavez is a good example.  As angry as he is at the US government,  he has tried to advance (rightly or wrongly) what he sees as a better society for Venezuela.

These words may be hard for people to relate to and I find myself having trouble expressing them as articulately as I would like.  Nonetheless, I cannot help but think that much of leftist anger says as much about the angry person as it does about the injustice he or she is angry at.  I have chosen for myself that I am not going to make opposition to capitalism or other forms of injustice the center of my identity.  Do I do enough to help those suffering from social injustice?  Surely not, as this blog is presently my only current attempt to promote dialogue and educate people as much as I can about the workings of power.  But I find myself caring more for people who suffer than when I was consistently resentful.

 

 

First Tackle the Debt, Then Worry About Humans

I just watched a great interview with Paul Krugman by Bill Moyers from a couple days ago (see below).  Last summer I read Krugman’s book they mention, End This Depression Now, so this is all pretty familiar to me, but I still can’t help but feel furious that Republicans, and some centrist Democrats, are so intent on focusing on the issue of government debt while the suffering of actual human beings is given second tier status (and often negative status).

Point #1: Our economy is still in extremely rough shape with unemployment at 7.8% and the Federal Reserve predicts it will be down to between 7.4-7.7% by the end of 2013.  Obviously good that it is going down, but the pace is pretty awful.

Point #2: College graduates are likely to be permanently impacted by their lack of job experience.  This recession/depression means people who can’t get jobs now are going to earn less and have more difficulty getting good jobs even when the economy returns to full employment.  (The Economic Policy Institute has a good report on this).

Point #3: The debt-to-GDP ratio for the US is likely to be relatively stable assuming there is economic recovery.  The poor state of the economy is actually decreasing government revenue and increasing its deficits.  Furthermore, Japan’s debt-to-GDP ratio is around 220% while the US is less than half that .  Is anyone predicting Japan becoming the next Greece?

Point #4: Given the first three points, why are people so obsessed with threatening to cause the US to default on its debts, cutting the retirement age for Social Security and stopping “big government” rather than doing something that will get the economy going again?  I think a passionate committment to dismantling the welfare state is a reasonable explanation, as is demonstrated by the State of Maine’s Republican governor’s bid for welfare reform.

Disturbing Report on World’s Food Going to Waste (and a good project addressing global hunger)

Via Democracy Now, I came across a truly horrid finding by a British organization, Institution of Mechanical Engineers.  In a new report, they find that half, yes half, of the world’s food may not actually be consumed.  This is truly unbelievable that the problem in the US is we have too many overweight kids, while people throughout the world (and for that matter in some poor parts of the US) people are malnourished.  According to UNICEF(see the bottom right bullet of page 1), malnutrition contributes to the deaths of 2.6 million children under 5 every year.  Somehow this is all tolerable.

Peter Singer, the famous ethics philosopher, has a very good project underway, based on his book The Life You Can Save to encourage people to give part of their incomes to organizations working to end extreme poverty.  One reason I trust that it is a good project is that I emailed them once asking why the UN World Food Programme was not on their list of good organizations to give to.  I received a reply (not sure if it was actually from Peter Singer) stating that they think the World Food Programme doesn’t actually help build infrastructure to help poor people be self-sustaining, but instead gives food as emergency aid, acting as more of a band-aid.  Below is the table showing how much they recommend people to give based on their income.  Their site also has a list of organizations they suggest give to.

Income Bracket
(or, if you are not currently receiving an income, what you spend each year)
Donation
Less than 105 000 USD At least 1% of your income, getting closer to 5% as your income approaches 105 000 USD
105 001 USD – 148 000 USD 5%
148 001 USD – 383 000 USD 5% of the first 148 000 USD and 10% of the remainder
383 001 USD – 600 000 USD 5% of the first 148 000 USD, 10% of the next 235 000 USD and 15% of the remainder
600 001 USD – 1 900 000 USD 5% of the first 148 000 USD, 10% of the next 235 000 USD, 15% of the next 217 000 USD and 20% of the remainder
1 900 001 USD – 10 700 000 USD 5% of the first 148 000 USD, 10% of the next 235 000 USD, 15% of the next 217 000 USD, 20% of the next 1 300 000 USD and 25% of the remainder
Over 10 700 000 USD 5% of the first 148 000 USD, 10% of the next 235 000 USD, 15% of the next 217 000 USD, 20% of the next 1 300 000 USD, 25% of the next 8 800 000 USD and 33.33% of the remainder

For US, Oil is About Power Not Consumption

A December Forbes magazine piece states, “If the United States no longer needs access to Middle East oil under any foreseeable circumstances, then the priority Washington assigns to the region will plummet. ”  Really?   Looking at some basic stats seems to show a different picture.  US consumption of Middle East oil is not the issue, but rather control over the world’s largest oil reserves, with the Middle East holding a majority of the world’s oil.  Does anyone really think the US will let China, Russia or Europe have control over the the majority of the world’s oil?

The first graph is from NPR and the second OPEC.

Where The U.S. Gets Its Oil

OPECOilreserves_share_of_world_crude_reserves

The Most Accurate News Headline on Israel Ever

Reuters has a news article whose title is 100% accurate:

 

“Netanyahu takes on the world in Israeli election campaign”

 

Apparently, Netanyahu is modifying Nietzsche’s line as follows:

“What is the ape to man? A laughingstock or a painful embarrassment. And man shall be just that for the uber-Israeli: a laughingstock or a painful embarrassment…”

US Lawless Again on Israel

Every member of the UN Security Council issued a statement demanding that Israel stop settlement construction in the West Bank, except for the United States.  Despite allegedly harsh condemnation by the US of the settlements, the UN is not considered an appropriate venue for resolving the Israel-Palestine conflict.  The unstated, but rather apparent, reason for this is that an international law settlement actually holds Israel accountable.  The other countries that sit on the UN Security Council are not full of rabid anti-Semites to say the least:

China

Russia

France

United Kingdom

Azerbaijan

Colombia

Germany

Guatemala

India

Morocco

Pakistan

Portugal

South Africa

Togo