Month: November 2011

The United States suddenly changed directions in economic policy about 1980 and in doing so transformed itself from a country that had a fair distribution of wealth to one in which the lion’s share of wealth now goes to a very small number of people.

The sea change affected everything. Our basic ideology changed almost overnight from looking to government to solve problems to distrusting government, from liking government intervention in the economy to preferring a deregulated free market with no government regulation. The “new Frontier” credo of asking “not what your country can do for you” withered, replaced by the politics of selfishness, that absurd notion that if everyone seeks his or her own selfish good, the overall community will prosper.  Seeking the good of the self served as moral justification for lower taxes and the resultant hording of wealth by the ultra-wealthy.

Although historians, such as Judith Stein in Pivotal Decade, have detected the first inkling of the new way in the mid and late 70’s, the election of Ronald Reagan serves as the symbolic turning point, the watershed moment when America became a harsher, less generous, more selfish country.

What made Reagan and Reaganism so attractive? I’ve been thinking about that question a lot lately, given the current political environment in which I see Reagan’s disciples preventing the United States from addressing our severe economic contraction. I’ve read a lot of books on the 70’s and the post-war era over the past few years. I also have my memories of living my 20’s during that decade, although as it turns out, because I did not have a driver’s license until 1979 and did not own a car until 1981, I missed the central traumas of the decade, the two energy crises.

Reagan’s economic nostrums had been around for decades, serving as the rightwing’s alternatives to Roosevelt’s New Deal. All the principles of Reaganism were kept alive by the John Birch Society and a few conservative think tanks during the liberal post-World War II era.  It’s amazing to think that the 50’s Republican President Dwight Eisenhower was to the left of today’s Democratic President Barack Obama on economic matters. What a dark time that was for the right.

Why then did the right’s darling Ronald Reagan suddenly seize power in 1980?

A 20th century nation is far too complex to make a sea change for one reason.  I have identified three distinct causes that can help to explain why Americans embraced Reagan and the politics of selfishness in 1980:

1. As Michael J. Graetz details in The End of Energy, the need to address inflation and two energy crises turned all the U.S. presidents of the 1970’s into scolding nags. Jimmy Carter is famous for turning off the country by blaming its malaise on the people themselves, but Nixon and Ford, too, asked Americans to make sacrifices that they didn’t want to make. By contrast, Reagan was optimistically touting a “brand new day in America,” a rose-colored vision of infinite growth without limits or any inconvenience to anyone. I think after 10 years of being told about the limits of growth, people were ready for the smile and the easy answer.
2. Corporate America was facing a large increase in the cost of fuel, and was now willing to listen to the anti-union and free trade proposals that the right had broadcast for years. The idea, which Judith Stein details in Pivotal Decade but never comes out and expresses explicitly, is that to offset the increase in energy costs corporations wanted to lower labor costs. Thus the attraction to Reagan’s assault on unions.
3. Racism, pure and simple. The right had attacked government programs that redistributed wealth for years, including relentless ranting by rural state legislators against the granting of huge sums of moneys by state legislatures to make a public university education exceedingly inexpensive. But once significant numbers of African-Americans began to take advantage of these programs, the attacks gained traction among a larger populace, especially in the South and the suburbs. Suddenly large numbers of voters listened to Reagan’s blather that all government solutions are bad.

In other words, when presented with choices, people chose to be selfish. 

Rather than submit to changes in their wasteful life of consumption, consumers chose to believe Reagan’s lie that they could consume endlessly. And soon their vehicles became larger and their houses more over-laden with gadgets than ever before.

Rather than cut profits, the corporations decided to take back from the workers.  And soon those take-backs felt so good, the execs decided they wanted to keep taking more and more.

Rather than see people they despised or feared get a good education and other basic benefits, many preferred to see those benefits end.  And soon, an ungenerous spirit descended upon the land.

Pew Research Center today released a study showing that the gap in wealth between households headed by those over 65 years of age and households headed by those under 35 has grown substantially since the beginning of the great recession. 

The older households now have 47 times more wealth than the younger households, double what the gap was in 2005 during the artificially good times produced by the real estate bubble.

For the most part, the news coverage laid the groundwork for a war between generations.  Take, for example the Associated Press story about the study—the version that most people will see.   

The first expert made a kind of declaration of generational war by saying: “It makes us wonder whether the extraordinary amount of resources we spend on retirees and their health care should be at least partially reallocated to those who are hurting worse than them,” said Harry Holzer, a labor economist and public policy professor at Georgetown University who called the magnitude of the wealth gap “striking.”

Striking, but not surprising, seeing that young people have had less time to save, we are in the midst of a recession that has shrunk entry-level jobs, young households tend to have expensive children and the young carry more debt than they used to carry, thanks to raging inflation in the cost of college.

More instructive than demonstrating what everyone with eyes can see—that our young people face a tough economic future—is the little reported finding in the Pew study that in all age groups, the rich have gotten richer and everyone else has lost ground. 

I’m sure most of our elected officials and the rich folk they represent would love for the public to think there’s a generational war. It’s a better sideshow than the proposed, and nonexistent, class war between public workers and others in the middle class because it involves more people. Both nonexistent wars keep our minds off the real class war: the one that the wealthy have been waging for 30 years against everyone else, the one that the Occupy Wall Streeters have now taken to the streets.  In this class war started 30 years ago by Ronald Reagan and his cronies, wealth has been transferred from the poor and middle class up the ladder to the wealthy through cutting government programs, shrinking unions, cutting taxes for the wealthy and outsourcing traditional government services to private for-profit companies.

The Pew study states that the young have had more of their government benefits stripped from them over the past 25 years than the elderly have. Yes, they should get those bennies back. College should be cheaper, and would be if states and the federal government supported education at the same level as they used to. All children should have access to quality healthcare.  There should be lower student-teacher ratios in classrooms.  Unemployment benefits should be extended, particularly now that more than 50% of all unemployed people have used up their benefits and receive nothing.

In short, we do need to spend more on our young people.

But not by cutting programs for the elderly because they’re not doing so well either.

The Pew study found that the net worth of the average household in which the head is more than 65 is $170,494. So including the value of their home, that’s all the average retired household has to live on, other than Social Security. Let’s say Mr. & Mrs. Average can invest all of it in a diversified portfolio  and they take out 4% a year, as financial planners typically recommend. That means that other than Social Security, they have another $6,820 they can live on every year. And you want to cut Social Security?

No, the answer is not to transfer wealth from old to young, but to transfer wealth from the ultra wealthy to everyone else. 

So to Professor Holzer and anyone else who proposes that we pit the young against the old in a battle for pie share, I respond that the pie is too small because the rich are not paying their fair share into the pot, and what we need to do is make the pot bigger by taxing the wealthy.

I’m not calling for a financial guillotine. Let’s just return to the spread of wealth that we had in 1979, before the class war started.

In his attempt to address the charges that he sexually harassed three women while he was president of the National Restaurant Association (NRA) in 1996-1999, Herman Cain keeps trying to misdirect the media into side issues.

His first misdirection was to suggest that it was only because he was a Black conservative that these accusations were seeing the light of day, comparing himself to Supreme Court Justice Clarence Thomas, whose nomination was nearly scuttled because of accusations of sexual harassment some 20 years ago.  It didn’t seem to quell the outrage.

Cain’s second misdirection was to accuse the Perry campaign of disseminating the reports. This move made sense tactically, because Cain is fighting Perry (and Bachmann, Santorum, Paul and Newt) for the non-Mitt—AKA more conservative—position in the Republican presidential sweepstakes. It’s as if the Republicans are playing a game of high-low poker in which the high and low hands split the pot, in this case frontrunner status. Romney is going high and everyone else is going low. (Or more accurately, Mitt is going low and the others are going even lower!) Cain thus gains more by tearing down Perry than he does by tearing down Mitt. 

Blaming Perry worked in one way: most mainstream media gave more coverage to the Perry canard the day Cain made his statement than they did to the other big Cain sex news of that day—the discovery of a third woman claiming harassment. The effect lasted exactly one day, though, because the news of the third victim was just too big to contain.

So far, none of the politicians or pundits, nor Cain himself, has addressed the real issue: Do these incidents of sexual harassment disqualify Cain from the presidency? 

We don’t know the answer to that question because the facts of the incidents have not been revealed. We can, however, lay down some general guidelines for analyzing the incidents to see if they should disqualify the Pizza King.  Essentially, we have to ask ourselves three questions:

1. What did he do? Did he make a few off-color or suggestive remarks, or did he constantly make such remarks, touch a woman inappropriately or make an explicit sexual proposition?
2. What were the accepted social mores and laws of the time? What was considered standard behavior in the 50’s and 60’s would now be considered workplace harassment.  
3. Did he learn from the experience? The initial assumption—three times and you’re out—might not apply if all three incidents came in one single week or month after which Cain was a perfect gentleman. In that case, the incidents could be considered as one lamentable but forgivable occurrence, that is, assuming that the incidents were all talk and no touch.

Let’s be absolutely clear about one thing: Repeated and/or unrepentant sexual harassment of any kind should disqualify someone from the presidency for three reasons:

• We want our president to treat all people equally, especially in the workplace.
• Workplace sexual harassment is against the law.
• Workplace sexual harassment also shows poor personal judgment and the kind of risk-taking that could be dangerous in a president.

But I want to illustrate how difficult it is to determine if Cain’s past harassment disqualifies him from presidential consideration by dredging up two embarrassing incidents from my own past:

As a 22-year-old, I taught a class in French literature at the University of Washington in which I often made off-color remarks or sexual innuendoes in class, but never directed at any of my female students. One day during my office hours, one of the women in the class talked to me about it. I’ll never forget her words because they hurt me like a series of slaps in the face—the pain, almost physical, was my own shame. Here’s what she said: “You are a great teacher. You treat women as equals and give us the same opportunities as men. I asked around and know that you have never hit on any of the female students. But your sexual remarks are bad—they make us feel uncomfortable, and they’re not appropriate.” My off-color remarks ended immediately. The year was 1973, and in retrospect, my student was brave and outspoken. My rhetorical question of course, is if this incident reflects on my current views and actions and therefore disqualifies me for president. Hell no, it’s like Obama admitting he smoked a little weed, except Barack did nothing to feel embarrassed about, whereas I did.

The second incident is a bit more subtle. It was the mid-80’s and I was working for a major public relations agency. A young female intern closed my office door one afternoon and started crying. One of the mid-level executives kept hitting on her and she felt very uncomfortable. She told me she had gone out with him once just to placate him, but that had only made it worse.  She wanted my help and my advice.  I told her that she didn’t have to put up with it and all she had to do was to harshly and directly tell him to stop asking her out and to leave her alone. 

She followed my advice and it worked, but I was wrong, wrong, wrong! I should have reported the incident to senior management and asked the company to begin an investigation of the matter, which eventually would have led to action against the harasser. The reason I didn’t act in the right, and legal, way was that I didn’t know what to do, and the reason I didn’t know what to do was because the company had not trained me. Nowadays all supervisors and managers receive training in how to identify and address harassment complaints in virtually all large and mid-sized companies, and many small businesses as well.

Of course, by 1996 when Cain joined the NRA, corporate America had made enormous strides in recognizing and addressing the problem of sexual harassment in the workplace. As leader of a major corporation and then a trade association, Cain should have known what constitutes harassment, so it’s pretty hard to give him a pass, especially in light of the fact that there were three incidents. 

But let’s say the facts came out and it turned out that all Cain did was mouth a few awkward suggestions to the three women during a two-week period, before and after which he behaved impeccably. I would say that everyone makes mistakes, and this unfortunate incident (merging them into one) should not in and of itself disqualify Cain.

To convince me, however, I would have to see the complete reports and hear from at least two of the victims. I doubt that’s going to happen. Based on Cain’s cover-up attempts, it’s more likely that the reported harassment was serious and troubling. It’s likely that touching was involved or that the words crossed an unambiguous line, even for those times. It’s likely that the incidents occurred far enough apart to constitute three mistakes, not one. It’s likely that Cain did behave in a way that should remove him from presidential consideration. Otherwise, why wouldn’t he tell us what happened, admit he made a mistake and say he learned from the experience?

One of the major themes of the news over the past week has been the public recognition that the population of humans is now hitting the 7 billion mark.  That’s a scary number, that has many worried, and with reason. Overpopulation is implicated in our environmental and our economic problems. Every one of us, from poorest to richest, has some carbon footprint and uses resources, leading to more global warming and greater resource shortages (which eventually leads to economic and often political tensions). 

There is more to addressing environmental and resource problems than reducing the population, to be sure.  Those in the wealthiest nations use more resources to create more pollution, while people in the developing nations are clamoring for a higher standard of living that will entail using more resources and creating more pollution.  We will therefore have to learn how to use fewer resources and those in the wealthiest society may have to lower their living standards; for example, by giving up second cars, using mass transit and car-pooling.  

But reducing the number of people in the world should nevertheless take a central place in any discussion of how to address global warming and resource shortages.

Most economists and politicians don’t like to think of a shrinking population, because growth in population is the easiest way to achieve growth in an economy, and both economists and politicians set economic growth as a primary goal.  What economists and politicians like about economic growth is that it’s an easy way to deal with the inherent inequalities of a free market economy.  As long as there’s growth, the unemployment and economic dislocation that ensues from money-saving technologies such as computerization and the Internet is hidden from view because growth creates new markets to soak up the newly unemployed. Growth, too, can conceal an active program to draw more of the wealth created by the economy to the wealthy.  For example, it is only since we have entered the greatest economic contraction since the Great Depression that the mainstream news media is talking about the growing inequality of wealth that has occurred over the past 30 years.  Before, economic growth hid the transfer of wealth upwards.  

When a population shrinks, it’s very hard to maintain economic growth.  But just because an economy shrinks does not mean that it cannot provide jobs and an adequate standard of living for the people which it comprises.  The belief that only a growing economy can thrive is just a myth, but one that’s accepted by the many economists in the pay of those benefiting most from growth.

In the past, famine, war and disease were the main ways that populations decreased, and if we do not act to stem the population rise, it’s almost certain that famine and perhaps war and disease as well will do the job for us.

I believe that the key to reducing the population without a great deal of suffering is eliminate the most wretched among us, the approximately 1.7 billion humans who  live in absolute poverty, which is roughly defined as living on the equivalent of $1.25 a day or less.  What if there were a painless way to totally wipe out this 24% of the population?  Wouldn’t getting rid of one quarter of the world’s population reduce our carbon footprint, even if it were the one quarter that uses the fewest resources?  And wouldn’t we also be removing a lot of human suffering by extinguishing the ultra poor?

Now I’m not suggesting a mass genocide against populations living in absolute poverty.  Rather I propose four simple policy steps to ease into population reduction. What I propose is to keep the populations of the richer economies at about their current size by migrating the poor into wealthier societies:

1. Promote negative population growth in all countries by making birth control easily accessible and rewarding people for having one child.  For example, governments could agree to pay the complete costs for four years of college or career training of the first child of every citizen, while raising taxes on each child beyond one for any family. To those who say that this policy will negatively impact the poor since the wealthy will be able to afford the additional cost of having more children, I have two arguments: 1) we’re trying to avoid famine, war and disease, which usually kill more of the poor than of other groups; 2) whatever the rules of a society, the wealthy always have an edge.
2. Create an open border for immigration from poor countries to rich countries.  If rich countries replace the hole in their economies created by a lower population with people from poorer economies, the world will gradually get wealthier. We can already see this process of replacing populations of wealthy nations with immigrants happening to a certain degree in Europe and the United States.  In both cases, unfortunately, local populations are resisting the newcomers, a short-sighted mistake that will make everyone suffer.  Instead, the industrialized nations should open their arms to immigrants.
3. Develop a strong social safety net to alleviate the human suffering that population dislocations cause. At every step of the process of population decline, some people will be forced out of a job or profession, which is what always happens during all social change, for example, the transition from an agricultural to an industrial society at the end of the 19th century.  Those out of a job or career, be it temporarily or permanently, are in a sense sacrificing for the public good resulting from a declining population.  It only makes sense that they be compensated with generous and long-lasting unemployment benefits. Additionally, the new immigrants will need social services to get acclimated to the new society and economy.  Moreover, a strong social safety net will generally help minimize suffering during any social and economic transitions.
4. Keep working on reducing everyone’s carbon footprint. That includes developing alternative forms of energy; making current industrial processes more energy efficient; spending more to clean up current industrial and electrical processes; and increasing use of mass transit, bicycles and other energy-efficient forms of transportation.

I see as the greatest impediment to pursuing this 4-step program, or one like it, is that every one of these steps leads to more of the two things that the rich who control our resources and government officials despise:

• These steps almost by definition lead to a more equitable distribution of the world’s wealth, which means the rich will have less. 
• These steps lead to more government interference in the marketplace, e.g., to encourage people to have one child only, to bring in immigrants or to make it easier for companies developing alternative energy.

It’s not a coincidence that in those countries in which there is a more equitable distribution of wealth such as China, France, Spain and Germany, the governments have put addressing global warming higher on the “to-do” list, while the United States with its growing inequality seems determined to act in the short-term best interests of major polluters and its car-crazed population.   The rich folk have a greater say in the United States than in Europe, and so far, they have cast all their votes in favor of continuing to pursue a growing economy fueled by irresponsible energy use and a rising population.  Hey, at least they’ll get to keep their low taxes and great profit-making opportunities—at least in the short term.