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I hadn’t planned on reading GW Bush’s book,  Decision Points, though who could have missed his appearance on many talk shows, as he promoted, without apologies, his new book, which came on the heals of the 2010 election. So, I have avoided it as a potential double nightmare; I was certain that I would have to suspend my belief system to get through the book.  As he traveled the talk show circuit, I did notice that no one seemed to ask him the hard questions, including why a Republican doubled our national annual budget from $2 trillion to nearly $ 4 trillion, with most of us wondering what we got for all that extra money–he says we avoided another terrorist attack. Rather than read the book, I looked for the reviews of others who are paid to read it. If you are similarly disposed, then you might try Jacob Weisberg’s review in Newsweek. Then, to add a little context to the Bush and Obama administrations, you might find Ralph Nader’s faux letter from Bush to Obama worth a read.
By openly admitting that he ordered “waterboarding” and that this procedure has been characterized as torture, Bush has opened himself up to potential indictment. Not in America of course, but in other countries that haven’t suspended their belief  system or their treaty obligations.
RFM

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Henry A. Giroux, writing in Truthout, has summarized the outcome expected when people in a democracy lack “public time,” a period during which citizens stand outside of the daily routines of their employment (like during a six week vacation which many Europeans enjoy) and  develop a more robust understanding of their democracy, including a more intellectually derived skepticism and critique about the substance  of their culture. Public time encourages a more knowledgeable and sophisticated attitude about the social value of  public institutions: the process of an intermittent break from work promotes a more  introspective examination of self, citizenship and social responsibilities. Under such conditions, threats to established institutional policies are met with stiff resistance because the loyalty derived from the social benefits of public institutions have been internalized and motivate public reactions. It’s why the French can take to the streets overnight on detecting any proposed change in public policy support or services. It keeps a social democracy functional. If anything, “public time” helps develop a much sharper willingness to engage in improving institutions, taking part in their administration or organizing actions that insure continuity and stability.  Europeans don’t carry an image of a doomsday event around the corner or “end times” such as we see among Tea Party members in America. According to Harper’s Index (December, 2010), 40% of Americans believe that Jesus Christ will return to earth by 2050. Europeans are more willing to reach farther out on the ice, because they are more secure about the ice they stand on. This progressively expands the cultural range and depth of a society. But, it’s an evolutionary process and, as we are proving in the United States, it is fully reversible. Tea Party members in America support the idea that we, as a culture, stand only on thin ice and their daily attitude towards our public institutions confirms the uncertainty of their winter foundation. Nevertheless, I have been struck by many interviews with Tea Party members, particularly those in southern states, like Kentucky, where Tea Party advocates don’t want to see their own benefits, such as social security or retirement reduced, they just don’t want other, “less deserving” people to get them; this is the new way in which racism is expressed and at least partially reveals how much the election of a black man to the presidency has sent prejudice into absurdity. These are people who have inflexibly made up their mind and, despite all attempts to engage them in debate or dialogue, they refuse to participate in in a dialogue about their own hypocrisy.  For them, the Socratic dialogue was never took root within their personal engram. This is human devolution.

The apparent willingness of the Tea Party members to destroy public institutions, including social security, the recent medical care bill and just about everything else but the military, is astonishing and alarming.  But, as Noam Chomsky points out, we had better make sure we understand the mechanisms by which the Republican Party has co-opted the Tea Party to support the destruction of whatever middle class tangibles they themselves continue to enjoy. How is it that the Tea Party is almost solidly in favor of policies that are entrenched  against their own interests? Ignorance is certainly one key, but the other is a failure to understand the historical mechanisms of their class instability. Yes, they should be pissed off, but to become bassoon players within the Right Wing marching band requires an act of supreme amnesia of our recent economic history, including the last thirty years of undoing the New Deal.  To be sure, it was not just the Republicans who gave us our current state of economic misery, even though they played a disproportionately large role in generating the worst recession since the Great Depression and, for the 18-29 year old group, we have reached the full equivalent of the Great Depression.   I seem to recall, that as a young man,  I enjoyed a country that was a lot more like that of today’s Europeans, a country far more committed to the recognition and value of social institutions, including government itself, compared to the grand hostility we see among Tea Party members towards the government today. But isn’t that part of the Republican makeover: don’t analyze where you have been in the past–it didn’t really exist and besides, it’s dangerous to be overly analytical.  Social amnesia is one of the tools that favors the advancement of Republican values.

People like my parents, who came through the Great Depression, deeply appreciated the support mechanisms generated by the New Deal. Until Social Security was passed in the 1930s, the majority of senior citizens lived in poverty. In contrast, the last election seems to indicate that Americans are in a destructive mood, with the aim of tearing down government and then what? No one seems to know.  Given the need for “public time” to make public institutions more robust, it becomes easier to understand why Tea Party members are angry about their government, but express it with a kind of random walk down the blame isle. But, it began with the hollowing out of good-paying manufacturing jobs and a government that seemed to lie to the public by telling them that the development of a financial service economy would be good for everyone. It was the Republican hostility towards labor unions, their bias against America’s auto makers and Reagan’s destruction of the airline controller’s union that played a big role in reducing wage control mechanisms. As it turns out, the financial service economy is only good for people at the very top. As job losses mounted and good-paying jobs were replaced with minimum wage positions and debt mounted to cover the cost of maintaining a middle class existence, Democratic workers became Reagan Democrats and the resurgent Republican Party parlayed a new majority by converting southern Democrats into Republicans. And, people had to work harder and harder and longer and longer to make ends meet–the middle class life was slowly slipping away and becoming out of reach. Public time all but disappeared.

Nixon’s southern strategy, initiated by the defeat of Barry Goldwater in 1964, cemented the ruling political oligarchy of the last 40 years. It was as if the Civil War had reversed its political alignment, with the Republicans joining southern elected politicians, leaving the Democrats on the outside looking in. Today’s Republican Party is not the party of Lincoln. They lost that distinction, when they promptly abandoned Reconstruction and began supporting business instead. A critical election in the conversion process related to the Vietnam War, when Hubert Humphrey was kept tethered to the war by Lyndon Johnson, except for the last month of the campaign. But, it was too late and Nixon won a very close election. Had Humphrey won, he intended to strengthen the social contract–he ran as a progressive. That was really the last opportunity we had to elect a President who understood the New Deal and knew how to further implement it. Humphrey was far more liberal than Kennedy and he was far more committed to a progressive course for the evolution of government. Johnson was equally committed to a progressive program, but was too naive to prevent the Vietnam catastrophe.

Here in America, we are losing our sophistication about public functions and our sense of a nation-state that  provides  benefits and services.  We have lost our faith and commitment to public works and institutions, created by a form of amnesia that makes us wonder what previous iterations of our government were really like, while at the same time, we are incapable of acting to restore and embellish the kind of public institutional health that is demanded by a  complex modern society.  Many people besides the members of the Tea Party now believe that government works only for the wealthy and not for them. And this problem no longer has a simple fix. It’s too late for more “public time.” We are allowing neighborhoods to be destroyed through foreclosures and with loss of home, goes the loss of a sense of place within our culture. A more robust program that provided tangible relief to homeowners that need help to stay in their home, as we begin to slowly recover from our worst-ever recession, would go a long way in demonstrating that a functional government can touch the lives of ordinary citizens. The image of a government that  helps bankers stay rich with bonuses, while allowing homeowners to sink into foreclosure is still vivid among Americans, myself included. These are the people we should be helping and the neighborhoods they live in need to be stabilized. We don’t have much public time in America, as we work more and more not only to make ends meet but also to fulfill the demands and competition from our fellow workers. As jobs become scarce and people fear losing their homes, employees feel compelled to conform to the increasingly rigorous demands of their employers. You can find jobs on CraigsList in which the employer is asking for virtually 24/7 access to future employees (on call and otherwise accessible).

As I mentioned in a previous posting, I find the Hibbs predictions for midterm elections to be compellingly accurate.  Sufficiently so that, despite the emergence of the weird Tea party movement, the election results of 2010 have more to do with lost jobs than any other single factor, including the appeal of attributing the election results to another iteration of our culture wars. For the Democrats to be successful in 2012, the country needs lots of jobs, even though it is not possible to erase the current deficit of 17 million unemployed in such a short period of time.  Where are the green jobs that Obama talked about and when will the discussion of a second badly needed stimulus begin–a real one this time? We need a stimulus plan to simply provide for what the Europeans are providing for in their normal, everyday society. But we also need one that gives us a national sense that a new economy is beginning its early phase of construction.

In the distant past, as the electorate oscillated between putting Democrats or Republicans in charge, the two parties were not all that different, especially after Ronald Reagan. Party convergence seemed to characterize the politics of the right and left over the last half of the twentieth century.  Communism, socialism, progressivism and liberalism all became jaded words which harbored unhealthy social images, as the country moved towards the right.  It was Jimmy Carter who really started the deregulation fever by unhinging the airline industry. You can argue that Bill Clinton was a pretty good Republican and helped to remove things like the Glass-Steagall Act, which was the hard right turn that eventually led to our current economic meltdown: but that was not the only precipitating event. Credit default swaps, an unregulated financial instrument used for investments, was started in the early 1990s and reached a total investment value of more than $62 trillion at the end of 2007. Brooksley Born, the head of the CFTC (Commodity Futures Trading Commission) warned about the risk of the OTC trading of derivatives which were gaining in their financial magnitude; she made recommendations for more regulatory control of derivatives. But her suggestions were strongly opposed by Robert Rubin, Alan Greenspan and Larry Summers. She was forced out as the head of the CFTC in 1999. An excellent Frontline documentary “The Warning” appeared in 2009. To this day, Brooksley warns of future financial disasters through these same, now only partially regulated, OTC derivatives.

The 1990s changed the character of the two party system.  The Republican Party that once stood for business, was gradually transformed into a party of and for  financialists and they began to do the bidding of giant corporations and investment bankers, rather then small and medium-sized businesses which they previously claimed as their bedrock. It was in the 1990s that corporate income from the financial sector began to outstrip that  from manufacturing. And, these were different financialists than the bankers we grew up with. The new investment bankers acquired an international, global sense of wealth, as they got past the leveraged buyout and created high risks in derivatives and sub-prime mortgage securities that almost no one really understood. The Tea Party members of today are angry and confused about what government should be doing for a healthy society and they can point to examples, in lost jobs, a hollowed out economy, costly education  and lost homes as the substantive evidence for their anger. Wasn’t government supposed to be looking out for them in these areas? The answer is yes, except that the country has been moving in the wrong direction: instead of stripping away government support and regulation, we needed to move towards a more robust form of a  social democracy and we should have started to strip away our militaristic posture towards the outside world. Inspirational leadership that might have moved us in this direction, came in the form of  the 2008 election of Barack Obama. But Obama quickly established that his form of leadership was straight down the middle and,  though some things have changed, he has not turned out to be the inspirational progressive that many people had hoped. If we ever get this more progressive, socially aware country that many of us see as essential for facing future problems, it appears now that we will look back on Obama as a transitional figure and because of that, in the next two years, he will face a major challenge in getting re-elected and passing legislation. Republicans believe they have Obama on the ropes and they certainly have the electoral success of 2010 to bolster their conclusion. But, this is also a party that is capable of its own self-destructive behavior and within a few months from now, I expect to see Obama’s popularity balloon begin to be elevated with warmer air.

RFM

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Who would argue that we must hit the reset button and generate a new American political and economic society? The one we currently have serves with satisfaction only a small percentage of our population. The middle class is disappearing. If we won the Cold War, why is it we behave like such losers? Here is where we might begin anew: in European countries, such as France and Germany, workers take long vacations, as much as six weeks. What they do with those six extra weeks is allow themselves the freedom to escape from the daily tasks of redundant work and read as well as think about their life and assume, among other things, an enduring perspective on the meaning and responsibilities of citizenship: even if they smoke pot full time, they revel their “public time” and use it to benefit the nation. Through such long yearly intermissions, a more complete sense of self and identity with public institutions becomes solidified: their generous vacation is ample proof of a merit system of governance that has become institutionalized in a far more socialistic way than the public institutions we have here in America: ours are fragile, theirs are stable and healthy. Welcome to the social democracies of Europe and welcome also to a far more interesting, better educated, trained and more engaged population of citizens. Armed with this confidence about institutional  stability, Europeans  have a better sense of how to face the future, because they don’t always have to look in the rear view mirror to see if some angry mob is out to remove all their benefits. In America, we are faced with a new assault on these values by the Tea Party and their Republican cohorts and some of this will play out in the next two years ahead.  In Europe, their long vacation is regarded as a right, exercised to the maximum, while in America no one is sure that we ever had a vacation, unless of course you are among the wealthy few that take one every year. Vacations in the American work force are part of our vanishing, mystic past, about which we suffer from severe amnesia.

Americans don’t like modeling themselves after any other country–we want to be unique and in many ways we achieved that objective and had to overcome a lot in doing so, like getting slavery partially behind us for example. So, in looking at other countries, let’s remember that the model working in Germany is the model we and the British imposed at the end of WW II, in part because we wanted to make sure that the German industrialists who had supported Hitler, had a watch dog and didn’t go off in some cockeyed way to establish a new form of Nazism. So, to keep the industrialists on their reservation,  we setup a system in which the workers were the watchdogs and gave them substantial control and input into the companies. Do you want to know what happened to the New Deal established in America under FDR? You know of course that we dismantled our version of the New Deal in America, piece by piece, beginning in the 1970s, while the Germans adopted and modified their version of the New Deal with stunning success. Thus the New Deal is alive and well but it lives in Germany in a modified and continuously evolving form. To read about the German success, you should check out Thomas Geoghegan’s informative book “Were You Born on the Wrong Continent: How the European Model Can Help You Get a Life.” In Germany, labor is traditionally represented on the corporate boards, where work councils help govern the company. These work councils are separate from the strong labor unions: a worker’s point of view is expressed within the business model because workers get to elect 50% of the board members and they get to choose the CEO or they can block one picked by the shareholders, who get the other 50% of the board membership. The boards can determine when the work day starts and when it ends. The unions are a separate group that do not determine work conditions, but establish pay and in doing so, pay is uniform depending on the job title (more or less). Furthermore, everyone is trained so that a bookstore clerk has a title and some background training and can even run for supervisor and thus have a big influence on the course of the company and its future. Doesn’t that give insight into why a worker in Germany is more engaged in the company and the country that it resides in than we see among workers here in America?

Unlike the United States, Germany kept their high wage labor force and compete on the global market more effectively than we do. We reduced labor costs by killing labor unions, thinking that was the way to compete with China. Yet China wound up buying our factories and taking our jobs. It was planned that way, as we marched towards the creation of a “service economy” (remember that term?). Geoghegan uses a generalization about an American company that paid good wages of $23 an hour, but was then moved to a southern state, where workers were paid $8 an hour and the company went broke, with their equipment moved to China. That tragedy is still taking place because we have the wrong model. Instead of competing with China, we should be competing with Germany–they are a high export country. Indeed all of Europe forms a high export region–they did not surrender their manufacturing base as we did. Converting high wage unionized labor to low wage non-union labor, led to reduced quality in our manufacturing base because we wanted to compete with China. And, we still have that model as our objective. But, consider this: as of an earlier period in 2010, France and Germany had combined exports of $1.6 trillion vs China’s export of $1.2 trillion (Geoghegan claims [p 110 hardback] that China’s export for the same period of 2010 was $1.2 billion, but this is absurdly low unless he was talking about their export level to France and Germany and even that sounds too low–so I looked it up and changed billion to trillion). The population of France and Germany is about ~150 million, while that of China is 1.3 billion. So which model do you want? China workers commit to very long hours, hard work and very little compensation and benefits, whereas European workers have decent hours, long vacations, good benefits, retirement plans, good healthcare, free education and assistance for maternity leave, child and unemployment support. For 2009, our exports were a little over a $ 1 trillion. Eventually China will pass France and Germany in export levels and that will happen soon, but that doesn’t change the fact that France and Germany will remain high export countries and still promote their social democracy with good-paying jobs–that’s how they created it and who would want to ruin a good thing? Who? Well for one thing, we are trying to destroy the social democracy system of Europe by encouraging them to adopt our “free market” model. Don’t pay attention to the articles in the Wall Street Journal, The Economist and the New York Times that claim the German model is unsustainable. They have an export economy, without major debt and we are heavily in debt with a an export economy that is small, despite the fact that we have the largest economy in the world.   Today Germany competes more effectively than we do for imports into China and they do this with higher labor costs. For Germany, the key element to success is their high quality products, those that are made by the highly skilled, well paid German workers. Everyone wants to own German tools and automobiles and people are willing to pay extra for them. In America, we sent those skilled workers to McDonald’s for their new employment.

It may seem ironic but the facts are, that despite our increasingly cheap labor costs, it is hard to start up and sustain a business in America. In 2005 [Geoghegan p 82], Americans started over 573,000 small businesses, while more than 586,000 went broke. And, that was before the Great Recession. Europe had problems too, but using Germany as the model (France is quite different in many respects, but it remains a social democracy–it’s more meaningful to compare ourselves to Germany because it’s a larger country and it evolved from our exported New Deal), it is not easy to shut down a business, at least not a large one of more than 1000 employees. The European system does something I would like to see adopted in America–they penalize rather than reward those who want to disinvest in their country by closing their businesses. It’s much harder to close a business in Europe than in America. Shutting down a plant in a social democracy means the employer has to come up with a “closing plan.” There must be a plan for taking care of the employees, paying severance, etc and because of this, companies tend to keep on going–it’s cheaper that way. Besides the threat of closing a company in which employees help set the rules, means that you engage the entire work force into the “creativity  machine” of how to stay profitable. That’s the other downside of business in America. The CEO and the board members, many of whom are hand-picked by the CEO without any representation from the workers, decide in a small room how and when to dump the company and how and when to downsize the labor force, which often includes loss of retirement plans.  The objective of American business is to provide bloated compensation to the CEO and other officers and improve the value of the stock. All of this is done by sacrificing the interests of the workers, whose productivity was largely responsible for the increased profitability of the company. But, with worker participation you have a much higher level of creativity engaged in the decision-making process, so the chances of success are substantially improved (besides, in my opinion, the smartest, keenest people are usually found below the top levels of the administrative staff–that’s the way it works in American universities for example). In America, we are a long way from discussing what form of economy and society we are going to have. It may not seem this way at the present time, but I believe we are witnessing the end of American style capitalism. It has left too many in poverty and uncertainty about their future and is, as a system, unwilling to recognize the dangers of global climate change. We cannot address these major issues in front of us without becoming a more social democracy, something along the lines of Germany. But Germany is merely the evolution of the New Deal policies we put in place just 65 years ago and look how well it is working. The graph below, taken from here, illustrates how economic growth in Germany has shot ahead of that of the United States–this is because of the strong export economy of the country. Without developing a strong export economy of our own, we will grow very slowly out of this recession, because we are a consumer-based economy and we have too much personal debt to consume in the manner to which we were accustomed. The sub-prime housing meltdown was the last log to put on the fire.

German vs U.S. Economic Growth

To be sure, there are problems,

many more now, since the American-generated Great

Recession has now gripped the entire globe. At some point, the majority of Americans will come together and realize that the system we have in place serves too few people to give us the security we need to function in our complex culture. The system we need must allow all sectors of our culture to thrive and in that way we will all be further enriched with shared sociall stability. We threw away our manufacturing economy and we need to get it back. We can make green planet things–it’s not too late. Whether Florida needs to be underwater before this reality sets in is quite another matter. But the prospects for change have been unleashed and they can’t be reversed.

RFM

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