If the Government Shutdown Wasn’t About Obamacare (And It Isn’t), Then It Was About?. . . Ready To Be Hot Under The Collar?

Montage above: Koch funded anti-healthcare creepy Uncle Sam ad, David and Charles Koch from Forbes 400 and from a story about  Koch funding of climate change science denial.

After a national election in which the Republican Party substantially lost the presidential election, lost the U.S. Senate, and lost the popular vote for the U.S. House of Representatives, the Republican Party has been deferring to a fractional extremist fringe within its ranks, allowing that faction to steer the whole country into a government shutdown and near default on all its financial obligations, theoretically to prevent the enactment of “Romneycare” (now renamed “Obamacare”).  Really?  Romney/Obamacare is a healthcare plan that was originally developed by and sought by the Republican Party.  It was ultimately adopted by President Obama as a concessional compromise that gave the Republican Party what it once said it wanted.

This is really why the government was shutdown and we went to the precipice of default at huge financial cost to the country?  That’s why we risked complete and total chaos in the economy?

Really and truly?

Absolutely not.  Think again.

There are quite a few theories about why the Republicans, chose to prostrate themselves before their Tea Party faction, shutting down the government.  None of them actually accurate.  They are:

    1.    Republicans believed that the Romney/Obamacare would be a complete and total disaster so damaging to the country that it was worth bringing the country to its knees, incapacitating it and threatening the very worst in order to prevent its rollout.

    2.    Republicans actually believe the opposite, that Romney/Obamacare will be a tremendous success, that Americans will wind up loving it and will become (as predicted by Republican Senator Ted Cruz) addicted to its “sugar” when implemented, making it impossible to repeal.  Since even Republicans, including very possibly subcategory Tea Party members might, when actually experiencing the law, decide they sincerely like the result of having healthcare, it is important to nip this in the bud . . .  because, if the Republican and Tea Party constituency realize that the doctrinaire lies they have been fed about Romney/Obamacare aren’t true, it could, among other things, undermine the future credibility of the Republicans and the Tea Party on other matters was well as this.

    3.    Republicans believe that being generally obstructionist will always benefit them in the polls.  (Not exactly the way things are working out.)

    4.    As expressed in a recent Paul Krugman column, Republicans are “deeply incompetent,” so much so that they “can’t even recognize their own incompetence.”  (See: The Boehner Bunglers, October 6, 2013.)

    5.    Shall we, for the sake of a more profound debate, stay away from the perception, often expressed by comedian-commentator Bill Maher (however much unfortunate truth may actually be in it) that Republicans oppose everything Obama does simply because Obama is black?

What is really going on?

Sometimes things in this world turn out as no one could expect, chance having its way, and unexpected results coming out of the blue.  But there are many other times when it is instructive to look at outcomes and assume they were intended from the start.  In this regard, it is valuable to note the recent and well-documented New York Times report that orchestration of the current shutdown crisis was planned way in advance, going back to at least January/February of this year.  According to the Times, “The billionaire Koch brothers, Charles and David, have been deeply involved with financing the overall effort.”  See: A Federal Budget Crisis Months in the Planning, by Sheryl Gay Stolberg and Mike McIntire, October 5, 2013, accompanying timeline graphic here: House Republican Efforts to Repeal or Weaken the Health Care Law, October 5, 2013.

So, are we to believe that the number one priority of the Koch brothers for which they would shutdown the United State government is denying healthcare to American citizens?

Within days of the Times article the Koch brothers through their chief corporate spokesperson issued a denial of involvement in the shutdown as part of an attack on the healthcare program with an October 9, 2013 letter.  Notwithstanding, when that letter is read carefully against the documented facts it is really not much of a denial.  See: Kochs Deny Pushing for Shutdown Over Health Law, October 9, 2013.

One hint that the manufactured crisis was never really truly about opposition to the Democrats’ passage of a  Republican-formulated healthcare law is that in the waning days of the crisis, as an immediate default on government obligations was about to be avoided, the dialogue had readily shifted from being about the healthcare bill to being about other things, mainly broader government spending and general budget matters.  Like defense spending?: No, that wasn't talked about. . .   One of the problems for the Republicans when they tried to halt the roll-out of Obamacare by defunding the government is that Obamacare is self-funded and therefore rolled out nonetheless.  The other indication of what all of this craziness this is really about is that resolutions sought by the Republicans involved kicking the can down the road with deferral of dates so that the nation will potentially be kept in a state of constant crisis with more of this craziness almost guarnteed to transpire again in the future.

If all this drama and damage to the country has not actually been about the Koch brothers wanting to block a healthcare program, what is it really about?   . . .   Instead of believing that the Koch brothers have an intense, burning and paramount desire to deny healthcare to Americans (which seems rather absurd), let's think about what the Koch brothers are really interested in and where they direct most of their other political spending: They direct that money to climate change science denial and to the frustration of any efforts to societally address the issue of global warming.

The Koch brothers are vastly wealthy and their wealth comes principally from the extraction of fossil fuels.  With an estimated personal wealth of $36 billion each this year, Charles and David Koch are now tied for fourth place on September’s Forbe’s 400 list.  If we think of them as a single united unit of family wealth then the Koch’s jump to the head of that Forbes list alongside of Bill Gates and place well ahead of the $58.5 billion that earns Warren Buffett his Number Two status on this list. Lesson to us all: The Koch’s wealth has been rocketing up concurrent with their involvement in politics.

Would American industrialists really do something as outrageous as wrecking the government for the sake of advancing their personal wealth and private industrial pursuits?  Is that so very different from putting the fate of the entire human race and the rest of the planet at risk with climate change— or simply a mere subset of such behavior?

How is the attack on healthcare and the government shutdown connected with efforts to fend off people doing something about climate change?  Just think what would be happening if we had not been embroiled in this silly mess about preventing Romney/Obamacare from going into effect: With a working government we would very likely be proceeding to the biggest priorities at hand.  We might therefore be taking measures to deal with climate change at this very moment.  Even if we weren’t dealing with climate change right now we’d certainly be getting to it considerably sooner.

For how many weeks and months has the issue of the pending government shutdown been consuming all the oxygen in the media for any discussion of anything else?  Attention everywhere has been diverted as we heard about this silliness 24/7 in ad nauseam detail.

It goes further than that.  At the same time that we haven’t we heard anything about what the government ought to be doing about climate change we also haven't heard about the reverse: We haven’t heard anything about the Trans-Pacific Partnership treaty (TPP) which will go a long way to prevent government from doing something about climate change.  In fact, most Americans are probably unaware that the TPP exists at all or that it is a stealth corporatist attack on government regulation, including government regulation of such fossil fuel climate change game-over business activities as hydro-fracking.  It is, if you will, another envisioned form of government shutdown, intended to replace government control of corporations with corporate control of governments.  See: Saturday, October 12, 2013, The Other Government Shutdown Now In The Works (One You Are Not Hearing About): A Corporate Replacement Of Government Via The Trans-Pacific Partnership Treaty.

At first blush it might seem odd that John Boehner, Speaker of the Republican House, would have sacrificed so much of the Republican Party's reputation, deferring to the Tea Party faction, the extreme end of his party financed by the Koch brothers, rather than letting majority rule solve the problems.  Of course, the analysis is offered that with such things as gerrymandered districts, average and middle-of-the-road Republicans are more afraid of being ousted in primaries than in being perceived by the general electorate as extremist, but it is important to know that the Kochs don't just finance the Tea Party.   The "moderates" are beholden to the Kochs as well, even before you consider whether Koch brother money can be used to threaten in primaries.

The visuals below are for the purpose of illustrating something the last set of election results have probably not significantly changed: How the Koch brothers have contributed to over half the members of the House and half the members of the U.S. Senate.  They are from the one-hour Alex Gibney (Enron: The Smartest Guys in the Room and Client 9: The Rise and Fall of Eliot Spitzer) 2012 documentary “Park Avenue: Money, Power & the American Dream” about income inequality in America, including very particularly its corrosive effect on politics.

The Zeitgeist of the Tea Party, and now the Republican Party as well, is an extreme refusal to allow the government to work.  One can't help but notice that for the Koch brothers and their fossil fuel industries gridlock that preserves the status quo is a win.  So, yes, in this regard, those who perceive a working healthcare program as a threat to Republicans are in a sense right: Because if your goals is to have a dysfunctional government you want the public to see as few examples of successful government programs as possible.

But, I suggest to you, in the end, crippling the government is only an intermediate goal:  The end goal is to defer the day of reckoning for the industries like the Kochs' that are fast and furiously bringing us climate change that, unaddressed, we are less and less likely to survive.  Feel any heat under your collar?

Mitt Romney Won’t Release His Tax Returns Because He Took His Wife’s Horseback Riding As a Medical Deduction? Why Romney’s Taxes Matter

Is the reason that Mitt Romney won’t release his tax returns because he took his wife’s dressage horseback riding as a medical deduction? . . .

. . . That would make sense because it would give “RomneyCare” a whole new meaning in a presidential campaign when everyone is supposed to be paying a lot of attention to the design of the national system we should have in place to pay for the public’s health care.

This is not to belittle the fact that Ann Romney has real health problems. .   she has multiple sclerosis, a serious disease. .   nor should anybody want to demean the significance of anyone else’s significant health issues.  But when so many people in the population faced with considerable health problems struggle to pay for even the minimum treatment they need there are basic questions to ask if and when Ms. Romney has relatively lavish options to attend to her personal health that are way beyond what is available to others, especially when the Romney/Ryan vision for a change to a capped-out voucherized Medicare involves everyone scrimping and saving and cutting back financially (except the insurance companies Romney/Ryan want to take over the program!).

Did the Romneys actually tax deduct Ann Romney dressage horseback riding?  Ms. Romney has “discussed the therapeutic benefits of horseback riding” and in June news reports had her doing so at the “Marion Therapeutic Riding Association in Ocala, Fla.”  (See: June 6, 2012, On horseback, Ann Romney talks about health struggle, by Chris Leyden.)  But the Romneys have released just one of their tax returns and are refusing to release any others so we don’t know and can only guess.  (The Romneys are not releasing more tax returns even after the vice-presidential vetting process was disclosed to have involved the required release to the Romney campaign of “several years” of tax returns.- Only two of Paul Ryan’s tax returns are being released to the public.  The less wealthy Ryan family paid  20% their adjusted gross income in 2011 and 15.9% in 2010.)

The political comedy troop “Capitol Steps” does a routine with a meaningful punch line where their faux Mitt Romney in their parody asks presidential debate audience members to submit their guess about why he is not releasing his tax returns so he can pick among the guesses for what he thinks might sound like the best explanation.  Consider this National Notice’s submission to that suggestion box collection of guesses!

In the only year for which the Romneys have released a tax return, it is shown that they did deduct $77,000 for one of their dressage horses.  So who knows what happened respecting dressage horse deductions in other years and whether some of them are medical?
 
Economist and New York Times columnist Paul Krugman has written a number of times about the importance of seeing Romneys tax returns to obtain critically important information.  In January he wrote about how Romney was doing the “Dance of the Seven Veils” maneuvering around the fact that he wasn’t going to release tax returns that would apparently raise issues that are deeper and more more awkward than the fact that Romney, a vastly wealthy man, is telling us that he pays only 13% of his income in taxes:

    . .  the larger question isn’t what Mitt Romney’s tax returns have to say about Mitt Romney; it’s what they have to say about U.S. tax policy. Is there a good reason why the rich should bear a startlingly light tax burden?  

(See: Taxes at the Top, by Paul Krugman, January 19, 2012.)

Krugman pointed out how knowing what Romney’s tax returns would disclose is central to the issues of the campaign:

Elections are, after all, in part about the perceived character of the candidates — and what a man does with his money is surely a major clue to his character.

and:

To the extent that Mr. Romney has a coherent policy agenda, it involves cutting tax rates on the very rich — which are already, as I said, down by about half since his father’s time. Surely a man advocating such policies has a special obligation to level with voters about the extent to which he would personally benefit from the policies he advocates.

(See: Mitt’s Gray Areas, by Paul Krugman, July 8, 2012 783.)

On the question of character, Krugman points out that when Romney’s father, George, ran for president 44 years ago he released twelve years worth of tax returns.  Those returns disclosed that because taxes on the rich were much higher in the `50s and `60s Romney paid much more in taxes (37%) than the 13% his son is now paying and that, as the senior Romney put it, he “seldom took advantage of loopholes to escape his tax obligations.”   What’s more, the senior Romney earned his money contributing value to the economy by running the American Motors automobile company making compact cars.

Exactly what the Romney son, Mitt, has been doing to build up his wealth certainly ought to be explained, and it's not just the question of why he parks his money in the Cayman Islands: We know far too little but according to Mitt Romney’s disclosure documents he has between $20.7 million and $101.6 million earning him tax-free income in his IRA.  Whether, the actual amount is closer to $20.7 million or $101.6 million (wouldn’t you like to know with a lot more specificity?) those multi-millions amount to a virtually impossible accomplishment because the Internal Revenue Code limits what can be contributed to an IRA to amounts that are relatively small by comparison ($2,000 and annual 401(k) retirement contributions at $30,000) and Romney had only about 15 years working at Bain Capital LLC. to make such annual contributions.  By rights, if you do the calculations, it ought not to have built up to even $1 million, let alone being so many multiples greater.  (See: The Secret Behind Romney’s Magical IRA, by William D. Cohan Jul 15, 2012 and Massive Romney IRA Still Sparks Unanswered Questions, by D.M. Levine, 07/17/2012.)

The reason that annual contributions to IRAs are limited by the federal tax code to somewhat moderate amounts is that IRAs are intended as a mechanism to provide a secure retirement for the general populace, not to be an instrument of abuse whereby those who are vastly wealthily can park their wealth to avoid paying taxes.  Mitt Romney must have found a way to circumvent the law’s intentions.

Since Romney isn’t releasing his secrets, what he did to build up what may be the single biggest IRA account in the country can only be guessed at.  It probably involved a degree of artificiality that, were the IRS guarding the chicken coop, the IRS probably ought not to have permitted.  If you read the above linked-to reporting, what is suspected is that Romney utilized his inside knowledge of the structuring of Bain transactions (where companies on Bain’s operating table were sliced and diced into all sorts of different  financial slivers, instruments and interest the average reader probably wouldn’t have patience to try to understand) in order to transfer what were relatively sure bets on truly huge financial pay-offs while valuing them for purposes of his IRA contribution as proportionately infinitesimal.

With Mitt Romney having by whatever trick or device tallied up a personal IRA that is at least in the tens of millions and with the Romneys taking tax deductions on the order of  $77,000 for dressage horses every year it's rather a challenge to believe Ann Romney's recent assurance in her speech at the Republican Convention that she and her husband understand and appreciate the economic challenges she describes as besetting the average American family:

    . . . that price at the pump you just can't believe, the grocery bills that just get bigger; all those things that used to be free, like school sports, are now one more bill to pay. It's all the little things that pile up to become big things. And the big things — the good jobs, the chance at college, that home you want to buy, just get harder. Everything has become harder.

This was part of Ms. Romney’s effort to encourage women (and she tried to be complete in naming all the variations: “moms of this nation — single, married, widowed — . . . mothers. . . wives. . .grandmothers. . big sisters . . . little sisters . .  daughters”) to view Romney as a potentially good provider if he is elected president.  One gathers that Ms. Romney’s point is that, if elected president, the man she “met at a dance many years ago” will spend less time looking for tax loopholes and tax deductions available only to the supremely wealthy and will spend more time considering the situation of the average Joes of the 99%.

Really? One indication on that score is the way the the Romneys interrupted their campaign (reportedly against campaign adviser advice) to rush off to attend the London Olympics (shoehorning in two ill-fated stops in Israel and Poland for cover) where Ms. Romney's horse was competing.  There Mr. Romney (who admittedly has Olympics in his resume) had to bend over backward to pretend that he didn't know anything about the "horse ballet" exploits (as dressage is sometimes called) of his wife's horse Rafalca and managed to undiplomatically offend his British hosts.

I don’t usually refer to the work of the ubiquitous Republican apologist David Brooks who, among other things, writes a regular opinion column for the New York Times: He is usually far too predictable about arguing that whatever position the Republicans have taken about things it is not necessarily entirely unreasonable when looked at a certain way.  He does that pretty much no matter how outrageous the Republicans get, rarely venturing any, even quiet, tut-tutting.  Something got into Mr. Brooks the week of the Republican Convention and he apparently couldn’t resist giving in to his sense of humor (I don’t think I’d previously picked up on the fact he had one) to write about the hilarity of the Republican chore at the convention of portraying the silver-spoon Romney biography as heroically relevant to the common man/woman/voter (a sampling to get you started before you click on to read the entire piece):       

Mitt Romney was born on March 12, 1947, in Ohio, Florida, Michigan, Virginia and several other swing states. He emerged, hair first, believing in America . . . . He was given the name Mitt, after the Roman god of mutual funds. . .

    * * * *

 . . . . He uttered his first words (“I like to fire people”) at age 14 months. . .  purchased his first nursery school at 24 months. The school, highly leveraged, went under, but Romney made 24 million Jujubes on the deal.

(See: The Real Romney, by David Brooks, August 27, 2012.)

Never did I think that I would find Brooks seeming to agree with fellow Times columnist Paul Krugman, but the truth behind the humorous bite of the Brooks piece is remarkably consonant with a more seriously scribed Krugman piece where Krugman says that the out-of-touch wealthy, “safely ensconced in a bubble of deference and flattery” look ridiculous “when they attribute the weakness of a $15 trillion economy to their own hurt feelings” which is causing them to refrain from job making.  (See: Pathos of the Plutocrat, by Paul Krugman, July 19, 2012.)

Wealthy upset is the cause of the nation’s current economic troubles?  What about the economic upset wealth run amok caused, the fact that it was the out-of-control banks, hedge funds and high finance insurance companies that wrecked the economy in the first place?  (See: Friday, August 17, 2012, The New York Times Starts Reporting That New York Government Officials Are Looking At Suing Barclays Bank- Leading to. . . ?).

Am I being the slightest bit unfair?  Just because Mitt Romney is substantially richer, does that  actually make the rest of us poorer?  Yes indeed, that question is answered at greater length here: Friday, December 23, 2011, Why Someone Else Being Wealthier Actually Makes Me Poorer: Debunking a Suspect Claim.  If nothing else, the fact that Romney and the Republicans are making it a priority to cut taxes for the wealthy (who control an ever-increasing percentage of the nations income and wealth) to historic new lows while eliminating social programs that those taxes have traditionally paid for means all the rest of us are hurt.  The Republicans, calling for cuts in social programs, set up a "deficit clock" at the convention hall in Tampa.  What they neglect to say is that the deficit being measured is a result of cutting taxes on the wealthy even in a time of war when sacrifices were called upon from others.

On NPR, Echo of Coinciding Principles Noticed: What the Tea Party and Occupy Wall Street Ought To Agree On

(Above, Mayor Bloomberg’s dogs, Bonnie and Clyde, at Occupy Wall Street?- Keep reading.)

On Saturday I had just posted a Noticing New York article, almost a treatise, about Occupy Wall Street and how it is confronting the subtractions of free speech flowing from Occupied Wall Street’s declared bane, the increasingly unfair effects of concentration of wealth in this country. In that article I had commented briefly:

Objection to the teaming up of government and monopoly should be common ground for both the Tea Party and Occupy Wall Street activists although I suspect that the proportion of Occupy Wall Street protesters astute enough to realize this may be greater.

(See: Saturday, October 22, 2011, Occupy Wall Street and the Banks- Messages From Bonnie & Clyde, “They’ve Got Too Much Money”: Ownership of the Public Forum by the Wealthy?)

The post was hardly up when I heard much the same point made in a very good eleven-minute “All Things Considered” story about what the Occupy Wall Street and the Tea Party have and ought to have in common: Occupy Wall Street, Tea Party: United In Distrust, by NPR Staff, October 22, 2011. (I went back to add a link to it in the article I already had up.) This point, perhaps the strongest part of the story, was in NPR’s audio version of the story (not the written article accompanying it), transcript now available. It is an exchange between All Things Considered host Guy Raz and Harvard professor and activist Lawrence Lessig:

RAZ: In some ways, the Tea Party was a response to the perceived growth and power of government. And, of course, Occupy Wall Street is a response to the perceived growth and power of corporate America. Are those incompatible ideas?

LESSIG: No, they're not. Because whether you are upset about the size of government or the size of corporations, one thing everybody should be upset about is when corporations use their power to corrupt the government, to reinforce their size and their influence. A critical change in the way in which we've seen America become much more unequal was driven by changes in public policy that was driven itself by the kind of influence that my book [“Republic, Lost: How Money Corrupts Congress — and a Plan to Stop It”] is trying to attack.

So whether, again, you like big corporations or you like capitalism, you and the right cannot possibly defend crony capitalism. And that's why Cato Institute and every single credible principled right-wing organization or libertarian organization or conservative organization has historically fought that kind of corruption.

The whole story is worth listening to. This exchange occurs at about minute 8:00 if you click below.



Professor Lessig's book suggests one solution he thinks would help: campaign finance reform. Whether or not that would be easy, given such things as free speech issues, it is worth thinking about. Lessig points out that all the money for the nation's political campaigns comes from .5% of the population which means that it is really the .5% vs. the 99.5% that Occupy Wall Street ought to be talking about.

Coinciding Principles Noticed Before

I have been making the point of this obvious common ground for some time now. For instance here:

Noticing New York Philosophy

Where does Noticing New York stand on the political spectrum? Noticing New York attempts to apply both conservative and liberal tests of what good government should be. They overlap a great deal more than is generally acknowledged. Conservatives may fear big government and liberals may fear big business, but these days the preeminent problem both should unite to oppose is the collusion of big government to give big business the edge

(See: Wednesday, March 23, 2011, Whither the New York Times? Noticing New York Comment Respecting a Manhattan Institute Sponsored Debate.)

And here:

The New York Times is often referred to as a “liberal” or “liberal establishment” newspaper. I think that is inaccurate. I think the Times is more a quasi-Democrat-establishment paper. To me, true liberals have more in common with libertarians than is often acknowledged. The Democratic establishment and the Times have assimilated predilections to unfairly support big business at the expense of the rights of individuals and local communities that ought to be protected. This doesn’t make them different from Republicans: mostly it makes them more like them.

A Voice on Eminent Domain

The city needs voices to speak out for "limited government, individual liberty, constitutional fundamentals” and those voices should be speaking out against eminent domain abuse as a foremost concern.

(See: Thursday, September 11, 2008, If the Sun Sets.)

And here:

Even though or despite the fact that the Atlantic Yards area was, through natural economic processes, attracting substantial economic capital and creating million dollar co-ops and condos, Atlantic Yards is a supreme example of something with so many bad economic equations it would never happen except for public subsidy. That subsidy is overriding private enterprise in a huge way that ought to be offensive to conservative and liberal thinkers alike.

(Sunday, November 15, 2009, Jane Jacobs Atlantic Yards Report Card #30: Avoidance of Cataclysmic Money? NO.)

An Odd Couple: Like the Tea Party and Occupy Wall Street, More In Common Than They Think

Author and columnist Amity Shlaes, whom most would consider to be at the conservative or libertarian end of the political spectrum was one of the principles involved in running the now defunct newspaper the New York Sun written about in the “If the Sun Sets” article linked to above was. Nobel Prize-winning economist Paul Krugman who writes for the New York times si what many would consider a liberal. Much was made of a supposed feud between Ms. Shlaes and the Nobel Prize winning economist Paul Krugman at a time when you could find at front table of Barnes and Noble new books that each of them had written analyzing Depression economics. Ms. Shlaes’ late 2007 book was “The Forgotten Man: A New History of the Great Depression”; Krugman’s book, “The Return of Depression Economics and the Crisis of 2008” came out in 2009 and was a reworking of a 1999 Krugman book.

Each of these books endeavors to inform the reader about where the dangers lurk respecting what can send a country into a downward economic spiral, either an economic depression or a severe recession like the Great Recession we are now experiencing. Ms. Shlaes’ book, which I previously wrote about in a Noticing New York article (Wednesday, February 11, 2009, A Brooklyn Paper Editorial & Atlantic Yards: With Nothing Else Good To Say, We Are Stimulated To Say. . . ), is clearly focused to a large extent on finding fault with the Franklin Roosevelt administration’s handling of the Great Depression. It seeks, if you will, to bust the myth that Roosevelt handled it with aplomb. Krugman, on the other hand, would argue that, in big-picture terms, that the FDR administration acquitted itself well by having government step in to stimulate the economy in a Keynesian way, spending when private enterprise was failing to so.

One thing Shlaes’ book makes clear is just how free rangingly Roosevelt was reaching to experiment as he was trying to address the Depression. While the Milton Friedman/Richard Nixon “We are all Keynesians now” statements of 1966 and 1971 secured in economic convention the importance of Keynesian thinking when Roosevelt was president, that thinking was brand new and everything associated with it just an experiment. Shlaes is clearly preoccupied with the lines that should not be crossed, or are not beneficially crossed, when a subsidizing government steps in to take over enterprises that she thinks should be done independently by the private sector.

Shlaes’ criticisms of the fuzzy cost calculations and empire building associated with the Tennessee Valley Authority (TVA) sound reminiscent of Jane Jacobs’ criticisms of the TVA in her “Cities and the Wealth of Nations,” where Jacobs points out how the TVA (financed with what she describes as capital imported into the region by the government) with the assistance of tricky (government program) “advantageous accounting,” went astray from its original clean, healthy environment and low-cost power goals, once involving hydro-electric power, to provide subsides, ultimately, for uneconomic coal-fired and nuclear plants. Jacobs always endeavored to think freely, refusing to be tagged with political labels such as liberal, conservative, libertarian, Democrat or Republican.

Shlaes’ concepts of the multitudinous things she thinks government should not be spending on may make counter-cyclically Keynesian government spending a greater challenge but oughtn’t to preclude it. That being said, Krugman and Shlaes are both opposed to “crony capitalism.”

Krugman on Crony Capitalism

Krugman brings up the topic using the term a number of times in his “Return of Depression Economics.” For instance, as many are doing these days he compares current problems in the United States to Japan’s crisis of long lasting economic doldrums and says this of the Japanese economy and its “distinctive characteristics” once mistakenly associated with prospects for success (p.60):

Only much later would those same distinctive characteristics– the cozy relationship between government and business, the extension of easy credit by government-guaranteed banks to closely allied companies– come to be labeled crony capitalism and seen as the root of economic malaise.

On page 82 he revisits this in connection with the Asian economic bubble:

What should have been noticed was that he claim that Asian borrowing represented free private-sector decisions was not quite the truth. For Southeast Asia, like Japan in the bubble years, had a moral hazard problem– the problem that woudl soon be dubbed crony capitalism.

This leads in to a description of the necessary job the Asian banks were consequently not doing and why they were not directing “funds to their most profitable uses” (p. 83);

The answer, basically, was political connections– often, indeed the owner of a finance company was a relative of some government official. And so the claim that the decisions about how much to borrow and invest represented private-sector judgments, not to be second-guessed, rang more than a bit hollow.

There is more and the entire book is worth reading.

Bubble Popped on Crony Capitalism

Crony Capitalism makes it possible to go hugely into debt without getting corresponding assets in return. It means that society's investments aren't productive. If you pump money into a country without getting value in return you get a bubble economy* which shouldn't be good for anyone. But if a crony capitalism economy is going to be good for anyone it is probably going to be the cronies in whom such cronyism is concentrating the wealth.

(* Although John Maynard Keynes played speculatively as a mind exercise with the notion of government’s generating economic growth simply by hiring people to dig holes and fill them up again, he pointed out how wastefully nonsensical the notion was, even though it would have a stimulative effect. He did not address the bubble-inflating aspect of such conduct if it is paid for with debt and an expanded money supply. One thing to be wary of: Construction worker unions will support projects that are the conceptual equivalent of digging holes and filling them in again. Example: Atlantic Yards' tearing down of newly renovated top-of-the-market condominiums.)

Shlaes: Find and Reward Success, Not Government Connectedness

Even though Shales never once uses the actual term “crony capitalism” or a variant thereof in her own book, this kind of analysis is quite consistent with the kind of thinking and the many situations she presents with a mind to arguing that there were government practices on the part of the Roosevelt administration that unnecessarily prolonged the Depression, how not everything that was done in the name of lifting the nation out of the Depression was serviceable in doing so and how much of what government did was unwittingly counterproductive.

What Shlaes keeps returning to as her central vision for the kind of workable capitalism for which she argues is establishing a cycle of finding and rewarding economic success, rewarding such success not political connection. Crony capitalism, with its assets that don't produce, is the opposite of that and leads, overall for a country as a whole, to failure. Crony capitalism leads to a downward spiral, a cycle and ever-increasing concentration of power as political connection is rewarded instead.

(For material on the Krugman/Shlaes feud/debate here are some links, although what you will find discussed are their differences not the commonality discussed here. The last two links attempt some reconciliation of their viewpoints: November 19, 2008, 3:22 pm, Amity Shlaes strikes again, By Paul Krugman; Shlaes Back to Krugman, Posted on Monday, November 24th, 2008, by Amity Shlaes, November 29, 2008, Changes in money-wages and Amity Shlaes, Opinion November 29, 2008 The Krugman Recipe for Depression, Massive government spending is no solution to unemployment; The Leonard Lopate Show / December 01, 2008 / Paul Krugman on Depression Economics; Krugman vs. Shlaes — Not A Fair Fight, by Marion Maneker - November 29th, 2008; and My take on the Shlaes/Krugman debate, by Adam T, Sun Nov 30, 2008.)

Common Ground of Occupy Wall Street and the Tea Party Not Shared By Crony Capitalist Bloomberg

What does the Tea Party think about the fact that they may have common ground with Occupy Wall Street? Well, some Tea Party spokespersons have been commenting that the difference between the Tea Party and Occupy is that te Tea party believes in process and the Constitution and the Occupy Wall Street protesters don’t. Really? Where did that come from? Where that comes from and what Occupy Wall Street protesters think about this and the potential for common ground will have to be the subject for a later article.

As for why there was a picture of Bloomberg’s two Labradors Photoshopped to show them joining the Occupy Wall Street demonstrators, two things:

• Occupy Wall Street and the Tea party might have reason in common to oppose crony capitalism but Bloomberg is a man in favor of crony capitalism and practices it

• To read about the way that crony capitalism is concentrating wealth at the top and thereby putting in jeopardy your free speech rights to protest that very fact, (AND what the New York City real estate industry has to do with it), you’ll have to read my above-mentioned Noticing New York article about why Bloomberg’s dogs, Bonnie and Clyde, should perhaps be joining the Occupy Wall Street protesters. (See: Saturday, October 22, 2011, Occupy Wall Street and the Banks- Messages From Bonnie & Clyde, “They’ve Got Too Much Money”: Ownership of the Public Forum by the Wealthy?)

Will America Shrink FROM Or INTO Crowds Clamoring For Death?

The braying of the crowds is frightful, the reflexive clamoring for death . . . .

. . . First it was the crowd at the September 7th Reagan Library Republican candidate debate cheering Texas Governor Rick Perry’s record of executing “234 death row inmates, more than any other governor in modern times” even though, as National Notice pointed out* Perry went out of his way to execute Todd Willingham, an innocent man for the sake of earning such cheers**.

. . . Then it was the boisterous crowd at the September 12th Tea Party debate calling for the hypothetical death of a 30-year-old working man in a coma and needing six months of intensive care, on the principle that the man had not purchased adequate healthcare in advance of falling into this condition. Paul Krugman points out that had the crowd given it a little thought it was, by the same principle, condemning to die children, the poor and the chronically ill, noting that: “very few of those who die from lack of medical care look like Mr. Blitzer’s hypothetical [hypothetical?- not really] individual . . . . most uninsured Americans either have low incomes and cannot afford insurance, or are rejected by insurers because they have chronic conditions” and that George W. Bush, to the accompaniment of similar right-wing cheering, blocked more extensive health coverage for children so that “one in six children in Texas lacks health insurance, the second-highest rate in the nation.”

Jon Stewart’s Daily Show (at 9:11 and 11:49) made humor out of the fact that the Tea Party that had started out as the party “fearing” death panels had become the death panel. That observation also transfers exceedingly well to the Republican plan to replace programs like Medicaid and Medicare with fixed payments to individuals that could then be readily whittled down to inadequacy by inflation or other forms of cutbacks, leaving those program recipients essentially at the mercy of the private insurance companies’ death panels.

(* The central theme of the September 3, 2011 National Notice post, how startling it was to see Rick Perry belittling the reality of global-warming/weather-weirding even as his state is being reduced to cinders by temperatures and drought of unprecedented severity and duration seemed so self-evident that I didn’t know why others were not busy writing about it. Since then, Tom Friedman’s September 13, 2011 column, Is It Weird Enough Yet?, picked up on the same point but doesn’t get into the extra weirdness of Texas oil companies trading their U.S. oil fields to an undependable Russia.)

(** As of September 15, the Todd Willingham miscarriage of justice is being elevated by e-mails designed to spotlight it as a campaign issue with a petition asking that the press ask Perry about it.)

It might be hoped that the crowds cheering for death are not reflective of the American public at large. Indeed they are not really. The crowd at the Reagan Library debate (like the backdrop of the questionably accurate Reagan Library itself) was cherry-picked by Republican party leaders to be what they wanted the responding public to be, while the crowd for the Tea Party debate was similarly hand-picked by the powerful higher-ups steering that movement.

Still, the cheering for death, reminiscent of the thumbs down audiences of the Roman Coliseum, seems to evince a discouraging pettiness of spirit that is hard to explain except for the fact that these hand-picked audience members feel very small themselves and that the only way that they can feel bigger these days is by calling for unfortunate others to be further cut down in size.* There is in such Coliseum audience conduct an implicit faith (or a desperately clung-to hope) that they themselves will never be the ones in the arena awaiting the crowd’s thumbs -up or -down verdict.

(* They say that every era gets horror films reflective of the particular anxieties of the times. A report on the Toronto film festival mentions an upcoming “gorefest `The Incident,' about workers locked in an asylum for the criminally insane, many with impressive knife skills”: The film may be onto something important.)

In another report on this survival-of-the-fittest culture-of-death, the Times today editorialized about a new Florida state law passed by the state's Republican-controlled legislature that will now prevent Florida localities from retaining or enforcing their local gun control laws so that, per one town council member: “We’re not allowed to have bows and arrows or slingshots in a park, but we can have a gun.” (See: Pandering to the Gun Lobby, September 15, 2011.)

Without debating the value of having a gun in areas of Montana where a cougar might stalk you, whether one could be safer in communities where citizen-vigilantes can out-draw their local version of a massacre-intending, arsenal-equipped Columbine student, the merits of shooting a coyote on your morning jog, or how fast on the draw the average senior citizen from St. Petersburg is, the vision of everyone carrying a gun to the public park sounds like a Streets-of-Laredo version of life where it's up to everyone to be quick on the draw and trigger irrespective of whose “done wrong.”

I was once pretty OK with a BB gun when I was a kid but I really don’t know where I’d come out in a world where winding up as the one alive means always being quicker on the draw. Did I already suggest the bravado of death-wishing audiences who are sure that they are never going to be down on their own luck (awaiting in the arena the audience’s thumbs down), may have something to do with these poor souls not feeling very big to begin with? Sure I did. . . .

. . . And here’s a probable irony: Maybe there is a reason all of us may be feeling rather small right now and it has to do with why so much of the Tea Party anger is misplaced. Maybe what’s happened is that all of us have already been out-drawn by the ubiquitous big corporations and monopolies that are leaving little space in the world for the rest of us. Is the government really to blame for that? Maybe it is when it fails to intervene and cut these monopolies down to size or when the government actively aids and abets the establishment and/or perpetuation of such monopolies. But is big government really where the anger should it be directed or should it be directed at the corporate power players themselves, those influencing the government in these respects? And aren’t those powerful insiders the very same ones who, behind the scenes, were hand-picking those frightful, vengeance-hungry audience members? No wonder those guys in the audience might feel uncomfortably small.