Sunday, 10 January 2010
TECHNICAL GLITCH
If you look at the little indication on each post of the time when it was posted, it would appear that I do most of my writing in the middle of the night, and that it takes hours for the post to appear. Not so. The post appears immediately. The time is off by about five hours, and I cannot figure out how to re-set it. Sorry about that.
REPLIES
Three of my posts have provoked comments or criticisms from quite disparate regions of the blogosphere, and while we all sit and wait for the behind the scenes health care reform negotiations to play out, I thought this might be a good time to respond to them.
I. The first comment was posted by Maciek in Poland, to my remarks about natural law. From the evidence of his comment, Maciek is extremely well read in this controversy, and I suspect actually remembers it better than I do. Rather than get into the details of the dispute between H. L. A. Hart and Lon Fuller, I should like to try to sketch my own view of the nature of law. I hope this will speak both to his very interesting comment about Polish government officials from the old regime, and to Ann's comment. From a purely formal point of view, laws are commands by the state that have a universal rather than a particular nature. When a drill sergeant shouts, "At ease!," he or she is addressing only the particular soldier or group of soldiers who are, at that moment, under his or her command. A soldier walking by on the parade ground is under no compulsion to stop and strike the characteristic at ease posture. The command is not in its nature universal. But when the state highway commission posts a sign at an intersection that says "Stop" [or a symbol having the same meaning], that command is intended to apply to any driver approaching the intersection, regardless of who he or she is. The command is by its nature universal. It does not apply to all persons, of course. A pedestrian or a fire engine is not required by the command to stop. Instead, it applies to all persons who are, in the relevant ways intended by the law, identical. It applies to all drivers of private or commercial vehicles, let us say. This is the formal character of law. It was what makes a command a law. States characteristically claim the right to promulgate any laws they choose within the territory and over the population they claim to rule. That is what it is to be a state. When I say that I am an anarchist [a claim, as we shall see, that real anarchists view with some disdain], I mean quite simply that for the reasons set forth in my little tract, In Defense of Anarchism, I hold that all such claims are everywhere and always false. Both sides in the Hart/Fuller controversy, it seems to me, accept the claims of at least some states under some circumstances. The natural law advocates hold, in addition, that only such state claims as meet certain substantive tests [that those claims aim at what is objectively good, or are in conformity with God's law, or whatever] are valid claims. In the modern era, the administration of state law is embedded in an extremely complex system of bureaucratic regulations and formalities, which most of the time are taken by all participants as prima facie evidence of the legitimacy of the commands contained in the laws. Thus, to speak to Maciek's remark about Poland, the judges and government officials in the former regime by and large conformed their actions to the structure of bureaucratic regulations in place during that time, and so they believe that what they were doing was "within the law," and earns them the right to have their pensions, even though, as a result of the revolution, those laws have all been abrogated and the state that issued them has been overthrown. If you accept the foundational claim of democratic theory, that representative democracy confers legitimacy on the commands of the state, then you will believe that in the case of democracies, and only in the case of democracies, laws are morally binding, not merely enforceable by the police, on those whose representatives have enacted them. If, like me, you reject that claim, then you will view the laws of a representative democracy as no different in moral status from the commands of a benevolent dictator.
II. Google, Amazon, and the Intelligence Community
I was idly googling myself the other day to see where I had cropped up in the past week, and discovered to my surprise that my somewhat facetious remarks about Google and Amazon had sparked some comment on another blog, http://distributedrepublic.net On that blog, my remarks were quoted and attributed to "ex-[left] anarchist Robert Paul Wolff." [Oh well, as they used to say, so long as you spell my name correctly.] But several regular readers of that blog wrote in with quite intelligent objections to my claim that Google and Amazon could have done it better. Let me summarize their objections, expand on them a bit, and then comment. The first objection is that I am confusing designing a new system with retrofitting or revising an existing one. It is always easier to design a new system, this commentator observed, but that is not the problem that confronted homeland security. This is quite correct. It helps to explain why the [new] Japanese steel industry was able to produce steel so much more efficiently than the older American steel industry, which was heavily invested in existing equipment and could only introduce new techniques on the margins. It explains the paradox that a country whose economy has been devastated by war is sometimes in a better position to build anew and compete successfully. But forty billion dollars has been spent since 9/11 on this problem. It is at least worth asking whether it wouldn't have been better to scrap the existing systems and design a new one, writing off the considerable investments in the old system as a sunk cost.
The second objection [more interesting, in my view] was that what Google and Amazon are doing is totally different from what the intelligence commmunity is doing. Google and Amazon are quite happy simply to ignore any portions of their potential market that pose particularly intractable technical problems if they calculate that fixing those problems would cost more than would be returned in income. The intelligence community, on the other hand, cannot afford, in effect, to say, "Well, Yemen is a real problem, so let's forget about them and ramp up our surveillance of Boise, which poses no serious technical issues." This is a really good point. Let me expand on it a bit. Many years ago Seymour Melman, writing about the difficulty of converting wartime production facilities to peaceful use, pointed out that the tasks set a design engineer in private industry were totally dfiferent from those posed to a design engineer in a defense industry. The private sector engineer, let us suppose, is asked to design a toaster that is attractive, can toast bagels as well as slices of bread, can handle three slices at a time, can be adjusted to different degrees of done-ness, will fail no more than once every 15,000 times it is used, and can be sold for $49.95. The defense engineer is asked to design a pilot ejection seat that can fit into a fighter jet, will eject the pilot in .4 seconds far enough from the plane to avoid injury to the pilot, has an automatic parachute, and has enough failsafe backup systems so that it will NEVER fail. This last is crucial, because a pilot's life is at stake. When the engineer asks about cost, he or she is told, "Keep the cost down as much as you can but without sacrificing performance or safety." This is the equivalent of telling Google, "design a system that will work in Yemen as well as Boise, even if that dramatically runs up the cost, because there might be someone in Yemen plotting to blow up an American airliner." This is, I think, a very telling objection to what I said [for all that what I said was facetious, and an expression of my exasperation with the intelligence community.] But the truth is that I do not think technical problems are at issue here at all. Rather, the problem is turf wars, bureaucratic infighting, struggles for budgets and new positions.
The third objection on the website was that my proposal would violate the Constitution and the rights of individuals. Indeed. So does everything the intelligence community does. if you do not want surveillance , on the grounds that it violates individual rights, ok. But inefficient surveillance is as intrustive as efficient surveillance. It just works less well.
III. The third comment came in an email from Mitchell Freedman, who also has his own blog: http://www.mitchellfreedman.blogspot.com Mitchell [if I may] came upon my story about Marty Peretz, Mike Walzer, and Al Gore [apparently, someone emailed part of it to someone at the Nation. How things get around!] He said something in his email to me that was deeply troubling, and that I had simply never thought about. If the Supreme Court had not, by a judicial coup, taken the presidency away from Gore, we would have had a President whose closest advisor was Marty Peretz and whose Vice-President was Joseph Lieberman. How would such an administration have responded to the 9/11 attacks, had they not been stopped by a more alert response? That is a really troubling question. I have no doubt Gore would have been better than Bush. A ham sandwich would have been better than Bush. But it is at least worth noting that the issue Gore has made his signature, and that has made him the darling of the left, is in a certain sense non-political, and has nothing to do with Israel, the Middle East, etc. To put it simply, Gore is no Jimmy Carter.
Well, there are my comments on my commentators. Thank you all for caring enough to respond to my maunderings.
I. The first comment was posted by Maciek in Poland, to my remarks about natural law. From the evidence of his comment, Maciek is extremely well read in this controversy, and I suspect actually remembers it better than I do. Rather than get into the details of the dispute between H. L. A. Hart and Lon Fuller, I should like to try to sketch my own view of the nature of law. I hope this will speak both to his very interesting comment about Polish government officials from the old regime, and to Ann's comment. From a purely formal point of view, laws are commands by the state that have a universal rather than a particular nature. When a drill sergeant shouts, "At ease!," he or she is addressing only the particular soldier or group of soldiers who are, at that moment, under his or her command. A soldier walking by on the parade ground is under no compulsion to stop and strike the characteristic at ease posture. The command is not in its nature universal. But when the state highway commission posts a sign at an intersection that says "Stop" [or a symbol having the same meaning], that command is intended to apply to any driver approaching the intersection, regardless of who he or she is. The command is by its nature universal. It does not apply to all persons, of course. A pedestrian or a fire engine is not required by the command to stop. Instead, it applies to all persons who are, in the relevant ways intended by the law, identical. It applies to all drivers of private or commercial vehicles, let us say. This is the formal character of law. It was what makes a command a law. States characteristically claim the right to promulgate any laws they choose within the territory and over the population they claim to rule. That is what it is to be a state. When I say that I am an anarchist [a claim, as we shall see, that real anarchists view with some disdain], I mean quite simply that for the reasons set forth in my little tract, In Defense of Anarchism, I hold that all such claims are everywhere and always false. Both sides in the Hart/Fuller controversy, it seems to me, accept the claims of at least some states under some circumstances. The natural law advocates hold, in addition, that only such state claims as meet certain substantive tests [that those claims aim at what is objectively good, or are in conformity with God's law, or whatever] are valid claims. In the modern era, the administration of state law is embedded in an extremely complex system of bureaucratic regulations and formalities, which most of the time are taken by all participants as prima facie evidence of the legitimacy of the commands contained in the laws. Thus, to speak to Maciek's remark about Poland, the judges and government officials in the former regime by and large conformed their actions to the structure of bureaucratic regulations in place during that time, and so they believe that what they were doing was "within the law," and earns them the right to have their pensions, even though, as a result of the revolution, those laws have all been abrogated and the state that issued them has been overthrown. If you accept the foundational claim of democratic theory, that representative democracy confers legitimacy on the commands of the state, then you will believe that in the case of democracies, and only in the case of democracies, laws are morally binding, not merely enforceable by the police, on those whose representatives have enacted them. If, like me, you reject that claim, then you will view the laws of a representative democracy as no different in moral status from the commands of a benevolent dictator.
II. Google, Amazon, and the Intelligence Community
I was idly googling myself the other day to see where I had cropped up in the past week, and discovered to my surprise that my somewhat facetious remarks about Google and Amazon had sparked some comment on another blog, http://distributedrepublic.net On that blog, my remarks were quoted and attributed to "ex-[left] anarchist Robert Paul Wolff." [Oh well, as they used to say, so long as you spell my name correctly.] But several regular readers of that blog wrote in with quite intelligent objections to my claim that Google and Amazon could have done it better. Let me summarize their objections, expand on them a bit, and then comment. The first objection is that I am confusing designing a new system with retrofitting or revising an existing one. It is always easier to design a new system, this commentator observed, but that is not the problem that confronted homeland security. This is quite correct. It helps to explain why the [new] Japanese steel industry was able to produce steel so much more efficiently than the older American steel industry, which was heavily invested in existing equipment and could only introduce new techniques on the margins. It explains the paradox that a country whose economy has been devastated by war is sometimes in a better position to build anew and compete successfully. But forty billion dollars has been spent since 9/11 on this problem. It is at least worth asking whether it wouldn't have been better to scrap the existing systems and design a new one, writing off the considerable investments in the old system as a sunk cost.
The second objection [more interesting, in my view] was that what Google and Amazon are doing is totally different from what the intelligence commmunity is doing. Google and Amazon are quite happy simply to ignore any portions of their potential market that pose particularly intractable technical problems if they calculate that fixing those problems would cost more than would be returned in income. The intelligence community, on the other hand, cannot afford, in effect, to say, "Well, Yemen is a real problem, so let's forget about them and ramp up our surveillance of Boise, which poses no serious technical issues." This is a really good point. Let me expand on it a bit. Many years ago Seymour Melman, writing about the difficulty of converting wartime production facilities to peaceful use, pointed out that the tasks set a design engineer in private industry were totally dfiferent from those posed to a design engineer in a defense industry. The private sector engineer, let us suppose, is asked to design a toaster that is attractive, can toast bagels as well as slices of bread, can handle three slices at a time, can be adjusted to different degrees of done-ness, will fail no more than once every 15,000 times it is used, and can be sold for $49.95. The defense engineer is asked to design a pilot ejection seat that can fit into a fighter jet, will eject the pilot in .4 seconds far enough from the plane to avoid injury to the pilot, has an automatic parachute, and has enough failsafe backup systems so that it will NEVER fail. This last is crucial, because a pilot's life is at stake. When the engineer asks about cost, he or she is told, "Keep the cost down as much as you can but without sacrificing performance or safety." This is the equivalent of telling Google, "design a system that will work in Yemen as well as Boise, even if that dramatically runs up the cost, because there might be someone in Yemen plotting to blow up an American airliner." This is, I think, a very telling objection to what I said [for all that what I said was facetious, and an expression of my exasperation with the intelligence community.] But the truth is that I do not think technical problems are at issue here at all. Rather, the problem is turf wars, bureaucratic infighting, struggles for budgets and new positions.
The third objection on the website was that my proposal would violate the Constitution and the rights of individuals. Indeed. So does everything the intelligence community does. if you do not want surveillance , on the grounds that it violates individual rights, ok. But inefficient surveillance is as intrustive as efficient surveillance. It just works less well.
III. The third comment came in an email from Mitchell Freedman, who also has his own blog: http://www.mitchellfreedman.blogspot.com Mitchell [if I may] came upon my story about Marty Peretz, Mike Walzer, and Al Gore [apparently, someone emailed part of it to someone at the Nation. How things get around!] He said something in his email to me that was deeply troubling, and that I had simply never thought about. If the Supreme Court had not, by a judicial coup, taken the presidency away from Gore, we would have had a President whose closest advisor was Marty Peretz and whose Vice-President was Joseph Lieberman. How would such an administration have responded to the 9/11 attacks, had they not been stopped by a more alert response? That is a really troubling question. I have no doubt Gore would have been better than Bush. A ham sandwich would have been better than Bush. But it is at least worth noting that the issue Gore has made his signature, and that has made him the darling of the left, is in a certain sense non-political, and has nothing to do with Israel, the Middle East, etc. To put it simply, Gore is no Jimmy Carter.
Well, there are my comments on my commentators. Thank you all for caring enough to respond to my maunderings.
Thursday, 7 January 2010
THE LAWS OF NATURE AND NATURE'S GOD
My younger son, Tobias, who is teaching Conflict of Laws this semester at NYU Law School, asked me some questions a few days ago about a debate that has gone on for a long time in the jurisprudential world concerning the nature of law, a subject related to some scholarship he is engaged in. I talked to him for a bit about a debate between the English legal theorist H. L. A. Hart and the American Lon Fuller, a debate that was very much on the minds of philosophers when I was a graduate student and Instructor at Harvard. Fuller was a defender of what is known as the Natural Law tradition in legal theory, a point of view deeply rooted in Continental European legal theory but very much out of fashion with analytic philosophers in the middle of the last century.
The thesis that there is a law written by God into the fabric of nature and revealed to us by our human power of reason was of course a fundamental tenet of the belief system of the men who wrote the American Constitution, a fact that modern day conservative legal theorists remind us of on every occasion, but that liberal legal theorists would rather forget. Recall the opening paragraph of the Declaration of Independence:
The thesis that there is a law written by God into the fabric of nature and revealed to us by our human power of reason was of course a fundamental tenet of the belief system of the men who wrote the American Constitution, a fact that modern day conservative legal theorists remind us of on every occasion, but that liberal legal theorists would rather forget. Recall the opening paragraph of the Declaration of Independence:
When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.
Wednesday, 6 January 2010
MR. DEEDS GOES TO TOWN -- A CAUTIONARY TALE
The American film director, Frank Capra, made a number of movies during the Great Depression that captured perfectly the populist anger of America's small town common folk at fat cats, city slickers, and big time politicians. Among the best were Mr. Smith Goes to Washington and the 1936 classic, Mr Deeds Goes to Town. Sentimental old lefties like me love those films, because they capture a rebellious, progressive spirit that, for an historical moment, seemed to have a chance of transforming America from a rapacious capitalist state into something very like a seedbed for socialism.
This morning, as I was making the bed, I turned on the television set and switched to TCM -- Turner Classic Movies -- just in time to catch the last few minutes of Mr. Deeds Goes to Town. The plot line is not important to this comment -- you can Google it easily enough, if you have never seen it. The boffo ending is a scene in which Deeds, who is accused of mental incompetence because he wants to give an unexpected twenty million dollar inheritance to thousands of poor families so that they can have their own family farms, is vindicated in front of a courtroom of his boisterous working class supporters, to the dismay and discomfiture of a group of city slickers in suits and ties.
My first reaction, as I watched the scene, was a tingle of that old time socialist feeling, a nostalgia for my early years when popular culture was sympathetic to the progressive ideals of my grandfather. But then, a troubling thought cropped up in my mind and would not go away. If you abstract from the specific content of the film, and just feel the emotion being expressed in that scene, you could be watching a rightwing Tea Party demonstration from this past summer. Both the movie sequence and the demonstrations breathe with the same resentment of the high and mighty, the same anger at the smug condescension of the haves and their contempt for ordinary people, the same belief that there are simple solutions for complex problems, and the same frisson of not yet quite open violence hovering on the edges of the scene. It was that anger [mobilized by what was once called a "traitor to his class"] that helped to elect Franklin Delano Roosevelt.
I do not for a moment mean to suggest that there is the slightest substantive connection between the progressive thrust of the Capra movies and the reactionary politics of the Tea Baggers. But the feeling tone, the emotion, is virtually identical. And that fact scares me, because in Nazi Germany and elsewhere we saw what those feelings could produce.
The complex logic of American electoral politics being what it is, the populist movement on the right that has been spawned by Obama's election may actually result in Republican losses, rather than gains, in the next two election cycles. I will blog about that at a later time. But it would not surprise me at all if this movement turns violent.
I mean, let's face it. When you watch Mr Deeds, which characters in the movie do you and I actually look and sound more like, Deeds' supporters, or the fat cat bad guys?
This morning, as I was making the bed, I turned on the television set and switched to TCM -- Turner Classic Movies -- just in time to catch the last few minutes of Mr. Deeds Goes to Town. The plot line is not important to this comment -- you can Google it easily enough, if you have never seen it. The boffo ending is a scene in which Deeds, who is accused of mental incompetence because he wants to give an unexpected twenty million dollar inheritance to thousands of poor families so that they can have their own family farms, is vindicated in front of a courtroom of his boisterous working class supporters, to the dismay and discomfiture of a group of city slickers in suits and ties.
My first reaction, as I watched the scene, was a tingle of that old time socialist feeling, a nostalgia for my early years when popular culture was sympathetic to the progressive ideals of my grandfather. But then, a troubling thought cropped up in my mind and would not go away. If you abstract from the specific content of the film, and just feel the emotion being expressed in that scene, you could be watching a rightwing Tea Party demonstration from this past summer. Both the movie sequence and the demonstrations breathe with the same resentment of the high and mighty, the same anger at the smug condescension of the haves and their contempt for ordinary people, the same belief that there are simple solutions for complex problems, and the same frisson of not yet quite open violence hovering on the edges of the scene. It was that anger [mobilized by what was once called a "traitor to his class"] that helped to elect Franklin Delano Roosevelt.
I do not for a moment mean to suggest that there is the slightest substantive connection between the progressive thrust of the Capra movies and the reactionary politics of the Tea Baggers. But the feeling tone, the emotion, is virtually identical. And that fact scares me, because in Nazi Germany and elsewhere we saw what those feelings could produce.
The complex logic of American electoral politics being what it is, the populist movement on the right that has been spawned by Obama's election may actually result in Republican losses, rather than gains, in the next two election cycles. I will blog about that at a later time. But it would not surprise me at all if this movement turns violent.
I mean, let's face it. When you watch Mr Deeds, which characters in the movie do you and I actually look and sound more like, Deeds' supporters, or the fat cat bad guys?
Tuesday, 5 January 2010
THIS ONE'S FOR MILTON
One of my very dearest friends is Milton Cantor, a distinguished historian of American radical movements and labor history who, like me, is now an Emeritus Professor from the University of Massachusetts. For years, Milton has twitted me about my seemingly unconquerable optimism, which stands in marked contrast to his darker view of current events. In the circle of professors who, at Milton's behest, would meet periodically for lunch in Amherst, MA, I was viewed as an irrepressible Tigger, bouncily anticipating good things even as the world lurched from disaster to disaster.
Even I have my limits, however, and the time has come to look squarely at some of the deep-rooted problems that confront America. I have had my say about Afghanistan, which I consider Obama's one clear policy mistake. The latest news confirms the bleak anticipation that I have shared with many other far more knowledgeable critics of that policy. But I do not wish to write about that today. Nor will I add my voice to the chorus of climate change Cassandras, though I agree with them completely. Instead, I shall focus on two bits of data that, taken together, make manifest the seriousness of the economic distress now afflicting Americans.
The first datum is this: In the decade just ended, there was no net gain at all in the number of jobs in the economy. During the same decade, the population of the United States grew by roughly twenty-four million. Even allowing for increased numbers of retired persons, these numbers imply an enormous increase in those who are truly unemployed [as opposed to those who are counted as unemployed by the somewhat peculiar methods of the Bureau of Labor Statistics.] The lack of any job growth at all during a decade of supposed economic prosperity implies structural deficiencies in the economy that no short-term stimulus packages can address.
In a structurally healthy economy, a sizable core of working-age adults produces the goods and services that are consumed by children not yet ready for the work world and senior citizens who have left that world. The balance among these three groups in the population is one of the two key indices of the health and structure of an economy [the other is the proportion of the population engaged in the production of food and fiber, but that is not at issue here].
For a very long time in the economic development of the United States, labor was needed to till the fields, staff the factories, and carry out the other productive activities of the economy. Unemployment was always the consequence of a failure of the economic system to coordinate production and distribution -- what Marx quite properly called "contradictions." The principal debate among professional economists, business executives, and government officials was whether to allow the contradiction to work itself out through a severe contraction of the economy [the classical laisser-faire view] or to manage the recovery through deliberate government stimulation [the Keynesian view]. But all sides in this debate took it for granted that during periods of economic expansion, those who had been laid off would be brought back into the economy. The statistics of the past decade show that this shared expectation is no longer correct. In effect, the United States now has tens of millions of working-age men and women are simply not needed by the economy, in good times or in bad. This has long been true for Inner City young men and women, among whom unemployment always stands at disaster levels. Now that structural failing has spread to the economy at large.
Old lefties a good deal more optimistic even than I may see this as a formula for socialist revolt, but I think a fascist reaction is far more likely. Let me repeat: the failure of the economy to create more jobs during a decade of economic growth suggests very strongly that none of the stimuli proposed either by the Obama team or by left critics like Paul Krugman is likely to change the underlying structural defect.
The second datum that weakens my natural optimism is this: Right now, one quarter of all homeowners in the United States are "under water." That is to say, they owe more on their home mortgages than their houses are worth on the real estate market. For those of you who do not own a home, let me explain by way of a simple illustration. Suppose a family bought a home three years ago for $250,000, and took out a 90% mortgage to finance the purchase. They put down $25,000 and assumed a mortgage for the remaining $225,000. In the first three years of a mortgage, very little of one's monthly payments goes to pay off the principal of the debt. Only in the out years is the principal reduced each year in any significant fashion. If the loan was a 6% 30 year fixed rate mortgage, then after three years only about $9,000 of the principal has been paid off, so the family still owes $216,000. But in the present real estate market, their home probably cannot be sold for more than 80% of what they paid for it, which is to say $200,000. In some parts of the country, the drop in resale value has been a good deal sharper. In short, they owe sixteen thousand dollars more to the bank than they can get for the house. Were they to sell, they would have to find that $16,000 somewhere. If, during the go-go years of the past decade, they borrowed against the $25,000 invested in the house by taking out a second mortgage [usually in the form of a Line of Credit], then they are more deeply under water still.
If one has a secure job and a steady source of income, being under water is not, in the short term, a serious problem. No bank is going to attempt to foreclose on a mortgage that is, as they say, performing, merely because at the moment the security put up for the loan [the house] is not worth as much as is owed. But for two quite different reasons, having fully one quarter of homeowners in this situation is very serious indeed.
First of all, it severely restricts the labor mobility on which the efficient operation of a capitalist economy rests. Ever since the rise of capitalism ion the eighteenth century, the structural assumption of the system has been that as capitalists alter their investments, in response to shifts in effective market demand, workers will be free to move to the new jobs created by the investment shifts. The steady movement of workers off the farms and into the factories, the migration of workers westward to the booming economy of California, the growth of new employment concentrations like Silicon Valley all depend on the ability of workers to respond to changes in the labor market. But if one quarter of the home owning families are trapped in their houses by underwater mortgages, then the entire economy will exhibit a kind of friction in the labor market that will interfere with economic growth.
The second problem with underwater mortgages is more long term, but in its way a good deal more serious. A very sizable portion of the American population has been losing work-related pensions and counting on the inflated resale prices of their homes to take the place of the pensions. As the adults in the family approach retirement age, they will find themselves forced to hang onto their jobs longer than they had anticipated. But as we have already seen, the economy really does not need them. Indeed, the economy is unable to absorb the normal population growth that has taken place in the last decade.
Neither of these problems is a consequence of a temporary imbalance in the economy, and neither can be addressed very effectively by the sorts of policies realistically available to the Obama administration [or any other administration, for that matter.] A slow recovery of house prices can alleviate much of the short term problem of the underwater mortgages, but not the longer term retirement problem. And to address the first problem would require a total transformation in this country's conception of the nature of capitalism and the role of the state.
Good luck!
Even I have my limits, however, and the time has come to look squarely at some of the deep-rooted problems that confront America. I have had my say about Afghanistan, which I consider Obama's one clear policy mistake. The latest news confirms the bleak anticipation that I have shared with many other far more knowledgeable critics of that policy. But I do not wish to write about that today. Nor will I add my voice to the chorus of climate change Cassandras, though I agree with them completely. Instead, I shall focus on two bits of data that, taken together, make manifest the seriousness of the economic distress now afflicting Americans.
The first datum is this: In the decade just ended, there was no net gain at all in the number of jobs in the economy. During the same decade, the population of the United States grew by roughly twenty-four million. Even allowing for increased numbers of retired persons, these numbers imply an enormous increase in those who are truly unemployed [as opposed to those who are counted as unemployed by the somewhat peculiar methods of the Bureau of Labor Statistics.] The lack of any job growth at all during a decade of supposed economic prosperity implies structural deficiencies in the economy that no short-term stimulus packages can address.
In a structurally healthy economy, a sizable core of working-age adults produces the goods and services that are consumed by children not yet ready for the work world and senior citizens who have left that world. The balance among these three groups in the population is one of the two key indices of the health and structure of an economy [the other is the proportion of the population engaged in the production of food and fiber, but that is not at issue here].
For a very long time in the economic development of the United States, labor was needed to till the fields, staff the factories, and carry out the other productive activities of the economy. Unemployment was always the consequence of a failure of the economic system to coordinate production and distribution -- what Marx quite properly called "contradictions." The principal debate among professional economists, business executives, and government officials was whether to allow the contradiction to work itself out through a severe contraction of the economy [the classical laisser-faire view] or to manage the recovery through deliberate government stimulation [the Keynesian view]. But all sides in this debate took it for granted that during periods of economic expansion, those who had been laid off would be brought back into the economy. The statistics of the past decade show that this shared expectation is no longer correct. In effect, the United States now has tens of millions of working-age men and women are simply not needed by the economy, in good times or in bad. This has long been true for Inner City young men and women, among whom unemployment always stands at disaster levels. Now that structural failing has spread to the economy at large.
Old lefties a good deal more optimistic even than I may see this as a formula for socialist revolt, but I think a fascist reaction is far more likely. Let me repeat: the failure of the economy to create more jobs during a decade of economic growth suggests very strongly that none of the stimuli proposed either by the Obama team or by left critics like Paul Krugman is likely to change the underlying structural defect.
The second datum that weakens my natural optimism is this: Right now, one quarter of all homeowners in the United States are "under water." That is to say, they owe more on their home mortgages than their houses are worth on the real estate market. For those of you who do not own a home, let me explain by way of a simple illustration. Suppose a family bought a home three years ago for $250,000, and took out a 90% mortgage to finance the purchase. They put down $25,000 and assumed a mortgage for the remaining $225,000. In the first three years of a mortgage, very little of one's monthly payments goes to pay off the principal of the debt. Only in the out years is the principal reduced each year in any significant fashion. If the loan was a 6% 30 year fixed rate mortgage, then after three years only about $9,000 of the principal has been paid off, so the family still owes $216,000. But in the present real estate market, their home probably cannot be sold for more than 80% of what they paid for it, which is to say $200,000. In some parts of the country, the drop in resale value has been a good deal sharper. In short, they owe sixteen thousand dollars more to the bank than they can get for the house. Were they to sell, they would have to find that $16,000 somewhere. If, during the go-go years of the past decade, they borrowed against the $25,000 invested in the house by taking out a second mortgage [usually in the form of a Line of Credit], then they are more deeply under water still.
If one has a secure job and a steady source of income, being under water is not, in the short term, a serious problem. No bank is going to attempt to foreclose on a mortgage that is, as they say, performing, merely because at the moment the security put up for the loan [the house] is not worth as much as is owed. But for two quite different reasons, having fully one quarter of homeowners in this situation is very serious indeed.
First of all, it severely restricts the labor mobility on which the efficient operation of a capitalist economy rests. Ever since the rise of capitalism ion the eighteenth century, the structural assumption of the system has been that as capitalists alter their investments, in response to shifts in effective market demand, workers will be free to move to the new jobs created by the investment shifts. The steady movement of workers off the farms and into the factories, the migration of workers westward to the booming economy of California, the growth of new employment concentrations like Silicon Valley all depend on the ability of workers to respond to changes in the labor market. But if one quarter of the home owning families are trapped in their houses by underwater mortgages, then the entire economy will exhibit a kind of friction in the labor market that will interfere with economic growth.
The second problem with underwater mortgages is more long term, but in its way a good deal more serious. A very sizable portion of the American population has been losing work-related pensions and counting on the inflated resale prices of their homes to take the place of the pensions. As the adults in the family approach retirement age, they will find themselves forced to hang onto their jobs longer than they had anticipated. But as we have already seen, the economy really does not need them. Indeed, the economy is unable to absorb the normal population growth that has taken place in the last decade.
Neither of these problems is a consequence of a temporary imbalance in the economy, and neither can be addressed very effectively by the sorts of policies realistically available to the Obama administration [or any other administration, for that matter.] A slow recovery of house prices can alleviate much of the short term problem of the underwater mortgages, but not the longer term retirement problem. And to address the first problem would require a total transformation in this country's conception of the nature of capitalism and the role of the state.
Good luck!
Monday, 4 January 2010
TRIVIA
Regular readers of this blog know that I strive always for the elevated tone appropriate to a seventy-six year old philosopher. Nevertheless, despite my best efforts, idle thoughts of a trivial nature do creep into the corners of my mind, and in the interest of full disclosure, I occasionally allow these ephemera to crop up in my blog posts. Think of my recipe for hazelnut encrusted rabbit loins, or the pictures of my grandchildren.
Herewith several such thoughts. I view this as a mental house-cleaning, preparatory to a deadly serious confrontation with 2010. [By the bye, the last time the first half of the year's number was twice the second half was 1809. Before that, 1608, then 1407, 1206, 1005, and so forth. The first such year, of course, was 21 A. D., a year we all recall with pride because it was in that year that a revolt broke out in Gaul against the Romans, led by Julius Florus. But enough of these strolls down memory lane.]
FIRST IDLE THOUGHT: What on earth is the attraction of FaceBook? One of my former students persuaded me to join, and I am now friends with [as they say] a considerable number of people. But the comments posted on FaceBook are almost universally jejune and banal. The phenomenon seems to be akin to the cellphone craze. All of us, I imagine, have had the experience of landing at some airport, only to see three quarters of the passengers whip out their phones and fire up while we are still taxiing to the gate. "I have just landed," says one. A few moments later, the same person places another call, apparently to the same person: "We are pulling up to the gate." As we walk up the ramp into the terminal, I hear him [or her -- it is a gender neutral phenomenon] saying, "I am coming into the terminal now." Does anyone actually want to know all of that? I have texting disabled on my cellphone [which I use principally to make sure that my wife is all right when she is out alone, since she has MS], and I do not tweet, so I cannot testify from my own experience to those newer obsessions. I think I would feel differently if I had ever overheard a cellphone conversation that interested me.
SECOND IDLE THOUGHT: When I use Google or Amazon.com, they seem to have no difficulty remembering who I am, identifying sites I might want to visit or products I might want to buy. Netflix knows what sorts of movies I would enjoy renting. And all of this is done with blinding speed, virtually in what is called real time. But the CIA, the TSA, the Department of Homeland Security, the NSA, and the State Department cannot "connect the dots," as the cant phrase has it, despite spending 40 billion dollars since 9/11. Why doesn't the President simply call Sergey Brin and Jeff Bezos into the oval office, offer each of them one dollar in salary [an echo of the WW II "dollar a year" men who worked for nothing to contribute to the war effort], and ask them to design and implement, in six months, a system that would allow the integration of every warning, every red flag raised in any embassy or consulate, any question at any airport security gate, all in real time, so that anyone in the entire system anywhere could access that integrated information from any laptop or computer terminal immediately? I mean, this falls under the heading of "solved technical problems."
THIRD IDLE THOUGHT: Fox flack Brit Hume has suggested that Tiger Woods convert to Christianity [from Buddhism, apparently] as a way of gaining forgiveness for his philandering. Should John Ensign and Mark Sanford convert from Christianity to Buddhism? Is it the conversion that matters, rather than what we philosophers call the terminus a quo?
Herewith several such thoughts. I view this as a mental house-cleaning, preparatory to a deadly serious confrontation with 2010. [By the bye, the last time the first half of the year's number was twice the second half was 1809. Before that, 1608, then 1407, 1206, 1005, and so forth. The first such year, of course, was 21 A. D., a year we all recall with pride because it was in that year that a revolt broke out in Gaul against the Romans, led by Julius Florus. But enough of these strolls down memory lane.]
FIRST IDLE THOUGHT: What on earth is the attraction of FaceBook? One of my former students persuaded me to join, and I am now friends with [as they say] a considerable number of people. But the comments posted on FaceBook are almost universally jejune and banal. The phenomenon seems to be akin to the cellphone craze. All of us, I imagine, have had the experience of landing at some airport, only to see three quarters of the passengers whip out their phones and fire up while we are still taxiing to the gate. "I have just landed," says one. A few moments later, the same person places another call, apparently to the same person: "We are pulling up to the gate." As we walk up the ramp into the terminal, I hear him [or her -- it is a gender neutral phenomenon] saying, "I am coming into the terminal now." Does anyone actually want to know all of that? I have texting disabled on my cellphone [which I use principally to make sure that my wife is all right when she is out alone, since she has MS], and I do not tweet, so I cannot testify from my own experience to those newer obsessions. I think I would feel differently if I had ever overheard a cellphone conversation that interested me.
SECOND IDLE THOUGHT: When I use Google or Amazon.com, they seem to have no difficulty remembering who I am, identifying sites I might want to visit or products I might want to buy. Netflix knows what sorts of movies I would enjoy renting. And all of this is done with blinding speed, virtually in what is called real time. But the CIA, the TSA, the Department of Homeland Security, the NSA, and the State Department cannot "connect the dots," as the cant phrase has it, despite spending 40 billion dollars since 9/11. Why doesn't the President simply call Sergey Brin and Jeff Bezos into the oval office, offer each of them one dollar in salary [an echo of the WW II "dollar a year" men who worked for nothing to contribute to the war effort], and ask them to design and implement, in six months, a system that would allow the integration of every warning, every red flag raised in any embassy or consulate, any question at any airport security gate, all in real time, so that anyone in the entire system anywhere could access that integrated information from any laptop or computer terminal immediately? I mean, this falls under the heading of "solved technical problems."
THIRD IDLE THOUGHT: Fox flack Brit Hume has suggested that Tiger Woods convert to Christianity [from Buddhism, apparently] as a way of gaining forgiveness for his philandering. Should John Ensign and Mark Sanford convert from Christianity to Buddhism? Is it the conversion that matters, rather than what we philosophers call the terminus a quo?
Friday, 1 January 2010
COLLECTIVE NOUNS
On this first day of the new year and the new decade, I was puzzling over what to write on my blog as I took my morning walk. A review of the past year's events? Predictions for the year just started? All that struck me as terminally boring, the sort of thing that prompts MSNBC or CNN to gather their anchors and pundits and color commentators on a split screen for an hour of hot air. Then, as I made it to the top of the hill at Country Club Road and turned to start the second half of my walk, I saw four deer gingerly crossing the road along which I walk. They were far enough away so that my presence did not startle them, and with virtually no traffic at 7:30 a.m. on a January 1st morning, they could amble across the road and disappear into the underbrush on the other side.
What do you call a group of deer?, I wondered. A herd, I thought, like a herd of cattle or buffalo. That put me in mind of some of the more exotic collective nouns that are one of the special wonders of the English language. We all know that a group of geese is a gaggle, a group of lions is a pride, and that a group of whales is a pod [although herd is also acceptable], but how many of you remember that a group of crows is a parliament, a group of starlings is a murmuration, and that a group of larks is an exaltation? A group of wolves is a pack, a fact burned into the minds of all of us old enough to remember the Second World War, when wolf packs of German submarines preyed on the convoys in the North Atlantic carrying men and material to Europe to fight the Nazis. [The problem of deciding how to deploy scarce destroyers and aircraft to search for the German subs was solved by an early application of the new discipline of Game Theory, but that is another story.]
When I got home from my walk, I googled "collective nouns" and came up with a wonderful site that lists scores and scores of delicious examples. You can find it at http://www.rinkworks.com/words/collective.shtml. Among the more delightful examples, none of which I knew, are: a sloth of bears, a shrewdness of apes, a deceit of lapwings, a lounge of lizards, a mischief of mice, a pounce of cats, and -- my favorite -- a bloat of hippopatami.
Warming to my task, I began to wonder what collective nouns we might put to good use in the political world. A prevarication of press secretaries came to mind, as did an hypocrisy of evangelicals, and a cupidity of bankers. A pomposity of pundits seemed a bit to easy, but surely we could make use of a treachery of Liebermans.
I invite my own Wolff pack to add to the list. Twenty-ten could be a fun year after all.
What do you call a group of deer?, I wondered. A herd, I thought, like a herd of cattle or buffalo. That put me in mind of some of the more exotic collective nouns that are one of the special wonders of the English language. We all know that a group of geese is a gaggle, a group of lions is a pride, and that a group of whales is a pod [although herd is also acceptable], but how many of you remember that a group of crows is a parliament, a group of starlings is a murmuration, and that a group of larks is an exaltation? A group of wolves is a pack, a fact burned into the minds of all of us old enough to remember the Second World War, when wolf packs of German submarines preyed on the convoys in the North Atlantic carrying men and material to Europe to fight the Nazis. [The problem of deciding how to deploy scarce destroyers and aircraft to search for the German subs was solved by an early application of the new discipline of Game Theory, but that is another story.]
When I got home from my walk, I googled "collective nouns" and came up with a wonderful site that lists scores and scores of delicious examples. You can find it at http://www.rinkworks.com/words/collective.shtml. Among the more delightful examples, none of which I knew, are: a sloth of bears, a shrewdness of apes, a deceit of lapwings, a lounge of lizards, a mischief of mice, a pounce of cats, and -- my favorite -- a bloat of hippopatami.
Warming to my task, I began to wonder what collective nouns we might put to good use in the political world. A prevarication of press secretaries came to mind, as did an hypocrisy of evangelicals, and a cupidity of bankers. A pomposity of pundits seemed a bit to easy, but surely we could make use of a treachery of Liebermans.
I invite my own Wolff pack to add to the list. Twenty-ten could be a fun year after all.
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