Friday, July 02, 2004

Genuine Blogging for a Change

Today’s disappointing job report puzzled me a bit because I had expected more of a bounce off the bottom of the last recession granted what can be expected from a normal business cycle and the cumulative effective of massive deficit financing and ultra-low interest rates. Like many observers, I thought the tax cuts, overwhelmingly aimed at people in the upper brackets, were an inefficient way to stimulate the economy; but I thought they would provide some Keynesian stimulus if only as a side effect. At the recent rate, it will take years for employment to catch up with the population. In fact, at this month’s rate, it will never catch up. However you measure it, the current recovery is exceedingly sluggish, a fact somewhat obscured by the nonstop cheerleading of the financial press.

Even observers like Paul Krugman who are decidedly hostile to the administration’s economic policy tend to suggest that the price we pay for running enormous deficits in the federal budget and the balance of trade is mostly long term. Indeed, they imply that one of the structural problems with the nation’s real constitution is that there is no political cost for promoting bad economic policies since the public is too stupid or too distracted to register consequences that occur incrementally over a long time period. Opportunistic political economics such as unsustainable tax cuts are rational in the same sense that knowingly operating a polluting factory is rational. The malefactors get the benefits and leave everybody else with the costs. It may be, however, that the piper will have to be paid in real time on this go round.

One other economic thought, a question really: Critics of the Bush tax cuts have generally complained that drastically lowering the higher tax brackets was an inefficient way to stimulate the economy because well off people don’t spend as high a proportion of their income as poorer people. But doesn’t it also matter what the tax cut dollars are spent on? Less affluent people spend extra money on food, shelter, clothing, health care, and education. More affluent people spend extra money on recreation, prestige items, second homes, and fancy rides. Even if high bracket tax payers spent the same proportion of their tax cuts as the less well off, their dollars would be stimulating different segments of the economy. Doesn’t the quality as well as the quantity of effective demand have an effect? For example, doesn’t a pro-wealth policy result in more capital going into the development of gated communities rather than affordable housing? Just asking.

Wednesday, June 30, 2004

It’s Not a Well?

Watching television informercials on the golf channel, you have to wonder why Ernie Els and Tiger Woods don’t get themselves one of those patented rescue clubs so they, too, can reliably hit 200 yard shots out of deep bunkers. Since it is likely that they can afford the three easy payments of $69.99, it must be pride. Or, perhaps what we have here is the commercial version of something that happens all the time in the realm of religion and the occult. Mystics and gurus of all sorts perpetually advertise amazing secrets that must be kept from the profane mob, but what they reveal in their more exoteric statements is typically far more extreme, lurid, and downright screwy than the vastly more guarded remarks they make to their actual students. Thus, for example, of the two attested works of the philosopher and shaman Empedocles, the Purifications, which is addressed to all the citizens of the city of Acragas, teaches an elaborate doctrine of reincarnation with many mythological trimmings while the book On Nature, which is addressed to a fellow philosopher, offers a reasoned and admittedly provisional physical account of the universe. In this instance, as in many others, the esoteric is less exotic than the exoteric.

Nothing is more plebian than the rhetoric of secret wisdom. Since the content of popular religion is a mix of banalities and science fiction, it is absolutely necessary to tart things up with mystifications about things hidden since the foundation of the world. Meanwhile, the conversations of people seriously interested in figuring things out are extraordinarily modest and matter of fact since the object of the game is not to impress the natives by claiming to possess God’s unlisted phone number and actual knowledge, as opposed to humbug, is damned hard to come by. There is a secret about real thinking, however. Most people will never understand how grounded you can feel once you’ve acknowledged to yourself that neither you nor anybody else can see through walls by sheer concentration.

Monday, June 28, 2004

The Will of Zeus Was Being Accomplished

The official handoff of sovereignty to the provisional Iraqi government wasn’t a very grand affair and not simply because it took place in deep secrecy two days before its scheduled date. The sovereignty in question, at least so far, is utterly notional. The initial affect of today’s proceedings is simply to transfer effective power from the American administrator to the American ambassador. Before leaving, Bremer underscored the hollowness of the gesture by committing Iraq to a series of laws that include legal immunity for foreign contractors and a fairly low (15%) ceiling on the highest income tax bracket. Since the new government will be dependent on the American military, their freedom of action will be sharply limited in any case. I, for one, find it hard not to feel sympathy for the members of the new government, at least some of whom appear to be sincere Iraqi patriots. Since ’75, the personal prospects of members of American puppet regimes have not been proven very good from an actuarial point of view.

As in antiquity, the temporarily victorious powers establish their form of government in occupied states. Sparta set up oligarchies. Athens set up democracies. In much later history but in the same vein, the Soviet Union set up People’s Republics in its Eastern European empire. Now we’re establishing what we are calling a democracy in Iraq. Democracy, however, is a very elastic term. For the most part, its semantic value in our political discourse is the equivalent of a grunted “Good.” It certainly doesn’t mean popular sovereignty or anything like it. Our foreign policy maintains a steady hostility to that—an electoral victory by the wrong guy amounts to sending the Marines an invitation with an RSVP. But “Democracy” can’t be used to refer to a general preference for the rule of law over arbitrary executive power either since this administration famously asserts the supremacy of presidential authority over both the courts and congress. In this respect, Bush, though personally innocent of any knowledge of political philosophy, is just following the lead of the Neocons in his administration. In turn, the Neocons are following the influential German rightist, Carl Schmitt, who asserted back at the end of the Weimar Republic that political legitimacy is logically and materially superior to legality. The current administration idea of democracy also seems to derive from Schmitt, for whom it referred to a regime legitimized by the Will of the People as defined by a charismatic leader ruling by plebiscite. That pretty much captures what the administration stands for in Iraq and, for that matter, at home: an authoritarian regime that overrules juridical and legislative authority in the name of the Nation. Writes Schmitt, “Every democracy rests on the presupposition of the indivisibly similar, entire, unified people.” While this Republican version of democracy indeed uses populist, demagogic methods to promote itself, in practice it defends the interests of wealthy people against the liberals or socialists who threaten the sacred rights of property, conceived of, as conservatives always do, as natural.

As everybody admits, it will not be easy to establish democracy in Iraq; but that’s especially true if the democracy in question is the kind contemplated by our government. Conservative ideologies are hard to disseminate because they are particularistic. If you don’t mind the mumbo jumbo, it makes some kind of sense to pledge allegiance to the mystical body of your own country. You can hardly expect the Iraqis to be similarly worshipful about the American Way. Besides, although we hear more about religious objections to our policy, a lot of opposition in Iraq, perhaps most of it, is completely secular and derives in large part from the accurate perception that the non-negotiable privatization policies foisted on the country at gun point amount to the theft of the national wealth of Iraq and its distribution to a politically connected elite. Some of the insurgents are determined to prevent their nation from being ripped off. Unfortunately, the bulk of them are probably just determined to get cut in on the swag.