Posted January 17, 2009
While watching one of the many news and news talk shows, from Morning Joe to American Morning, to News Hour with Jim Lehrer, even to HBO's Real Time with Bill Maher, one sees debate between American know it alls on the ailing economy. Economist like Paul Krugman provide credible but inconclusive analysis and political jacks of all trades like George Will and Patrick Buchanan provide easily refutable analysis of economic principles taken from the sweat off the brow of their researchers. The talk does little to clarify and often raises more questions than answers, and inevitably false premises creep in to the national debate and needed clarifications remain unresolved. Overseeing all of this is the fact that our economic woes may be the culminiation of a debate between two British Gentlement, separated by birth by more than a century, who held very different views of national economies and national government. I refer to Adam Smith and John Maynard Keynes. Since both are dead, the debate between them goes on with current day pundits of both the politican and economic kind speaking on their behalf (but not admitting so), and unfortunately, muddling the theories in their explanation.
While the purpose of this post is not to advocate for one gentleman's theory over the other, I do believe it is time to look at what Smith and Keynes offered for our times. Economic theories are complex fare and require far more analysis than offered here, but for that matter far more analysis than has been offered in some of the leading media outlets, including the financial and economic press. So I will do no better and hopefully no worse than the media when I reduce Adam Smith's theories to a mantra--his invisible hand mantra. By that it is assumed that economies, made up of markets, are self-healing guided by an invisble hand. Players in markets act rationally, which is toward self interests. A field of competition made up of rationally acting self interested players produces a Darwinian set of winners and losers, and the market adjusts to each little micro competition which when counted by the millions produces macroeconomic results--presumably all for the better. All of this activity is done in the private sector.
Such a market does not, in theory, need a lot of regulation since it operates off of a rather organic thesis. Darwinian winning and losing is natural and there is something about that need to succeed and the competition that protects winners and discards losers that keeps all or most outcomes within manageable parameters.
John Maynard Keynes might not be a foil for Smith, but by proposing the injection of government in the regulatory life of the economy as well as ensuring that economy's liquidity through government spending Smith's invisible hand gets a little visible guidance. Keynes' theories were the basis of the New Deal, and in a bit more extreme form, the socialization of Great Britain during the post war years preceding the government of Margaret Thatcher. Britain's socialization was extreme and bizarre and lead to the impoverishment of that world power during that period. Nonetheless the American version fueled the Great Society of Lyndon Johnson, and became pretty much the way government economic management was handled until the ideologically based changes wrought by the Reagan Administration.
Since deregulation and tax cuts this country has had its most dangerous periods of deficit spending, forcing economist to rethink some basic notions of how economies run when government is broke--spending more than one has means broke. I took graduate economics courses during the 80s and was told about the crowding out effect. That was supposed to be about how deficit spending forced government to go to the credit markets for money, raising the price of money via the supply and demand function, and making credit unavailable or more expensive for private sector players (and usually growth slows as well) . In minicosm, that is how exactly what happens and its called recession and the evidence of such can be found in the failures of developing country after country especially during the sovereign debt crisis of the 80's (the crisis is still going on, by the way).
For purposes of the developed states--ie the industrialized countries, recessions came and went, but a permanent state of recession has not occurred. Much of this has to do with complexities in financial markets, and, among other things, the creativity of the major players in these markets. Back to Adam Smith, assuming that everyone is a rational actor seeking maximum gain, the markets which provide liquidity to the system produced that liquidity through innovation. But if the private sector is crowded out because of the gorilla known as the US budget in the room getting its share of cash, where does the liquidity for private sector growth come from? It comes from new markets and new financial products.
The new markets are, of course, the newly industrialized countries, including China, and the new products are the product of creative packaging of the same small pie. New kinds of lending, new kinds of ways of profiting off that lending, and new kinds of ways of marketing these new products. A ponzi scheme except that the last one holding the bag was everyone in the market.
This was not supposed to happen. Our 18th century British gentleman Mr. Smith counted on rational behavior. His thesis lives or dies on whether economic historians define our period as one of rational behavior or irrational greed. Keynes would not seem to be a catch all solution because government is notoriously bad at running things and eventually government spending when out of control, as it usually is, produces the same deficits and crowding out that business oriented tax cuts do. Neither approach alone solves this mess.
But who ever said that we had to rely only one or the other?
Monday, December 22, 2008
Friday, December 19, 2008
And the Next Senator from New York Is...
It is truly amazing how members of the press consistently fail to ask the right questions. On the issue of whether Caroline Kennedy is qualified to be the next Senator from New York, the answer is an unqualified yes.
But the better questions, and the ones that the press and opinion makers need to ask is whether she is the most qualified, and whether she should get it.
Starting with my second question first, whether she should get it, I am inclined to ask another question--is the fact that she is a Kennedy (and not just any Kennedy--but the daughter of the main man Kennedy of them all--JFK) germaine to the issue. The answer is yes. Caroline Schlossberg is not asking for the position. Caroline Kennedy is. But for her middle/pre marriage name, Caroline Schlossberg would be another socialite (with a good track record) requesting the appointment. It would be a request that would be easily turned down by Governor Patterson. But as Caroline Kennedy, Patterson's choice becomes more difficult.
But why is it more difficult 45 years after Camelot? Because a lot of Americans long for those days, even if they weren't alive during Camelot. Camelot evinces dreams of a an optimistic time, a political era named for a Broadway play about a fictional English king whose legend of gallantry remains a part of English lore to this day. Americans want a monarchy. Not the kind that you have to support with tax dollars and curtsy to, but one whose family history we can follow with sadness, happiness, pride, and sometimes even derision. Like the Windsors of the United Kingdom, the Kennedy's every move is the subject of fascination. But unlike the entertainment celebrities with whom they are often compared, their's is a family of uncommon devotion to public service. And unlike the Windsors, their public service is usually quite serious and not the socialite type stuff that the Windsors returned to after Diana was killed.
So for all intents and purposes the Kennedys are an exceptional family of exceptional public service. Some may claim that this is really about power. But with the exception of Ted Kennedy, no one in that family has had any real political power since Robert Kennedy was Senator of New York. But the public service has remained a family virtue in the intervening 40 years.
But does all of this mean that Caroline Kennedy should get the job? These facts and her own public service does not mean that she should get the job. In New York City alone there are thousands of equally talented and involved people who have raised money, designed public service initiatives, organized communities, written books on policy, taught inner city children that could do as good if not a better job than Caroline Kennedy. Who is advocating for them?
And then there are people like Andrew Cuomo, the New York Attorney General and the son of the former New York governor and a member of a famous political family as well. But he does have elective office behind him and a history in the political process (how he got his initial start might be as interesting as Caroline's present efforts).
The fact of the matter is that it is unlikely that the thousands of unknowns in New York who could do as good a job as Kennedy will ever get the chance. Perhaps it is understood that a political track record is a pre-requisite for such an appointed position. Any one can run, but perhaps proven people ought to be appointed.
Caroline Kennedy is asking for an appointment. In 2010 when she has to run, she will be the incumbant. The rules change and for Democratic rank and file, the process must be frustrating.
Craig Jackson
But the better questions, and the ones that the press and opinion makers need to ask is whether she is the most qualified, and whether she should get it.
Starting with my second question first, whether she should get it, I am inclined to ask another question--is the fact that she is a Kennedy (and not just any Kennedy--but the daughter of the main man Kennedy of them all--JFK) germaine to the issue. The answer is yes. Caroline Schlossberg is not asking for the position. Caroline Kennedy is. But for her middle/pre marriage name, Caroline Schlossberg would be another socialite (with a good track record) requesting the appointment. It would be a request that would be easily turned down by Governor Patterson. But as Caroline Kennedy, Patterson's choice becomes more difficult.
But why is it more difficult 45 years after Camelot? Because a lot of Americans long for those days, even if they weren't alive during Camelot. Camelot evinces dreams of a an optimistic time, a political era named for a Broadway play about a fictional English king whose legend of gallantry remains a part of English lore to this day. Americans want a monarchy. Not the kind that you have to support with tax dollars and curtsy to, but one whose family history we can follow with sadness, happiness, pride, and sometimes even derision. Like the Windsors of the United Kingdom, the Kennedy's every move is the subject of fascination. But unlike the entertainment celebrities with whom they are often compared, their's is a family of uncommon devotion to public service. And unlike the Windsors, their public service is usually quite serious and not the socialite type stuff that the Windsors returned to after Diana was killed.
So for all intents and purposes the Kennedys are an exceptional family of exceptional public service. Some may claim that this is really about power. But with the exception of Ted Kennedy, no one in that family has had any real political power since Robert Kennedy was Senator of New York. But the public service has remained a family virtue in the intervening 40 years.
But does all of this mean that Caroline Kennedy should get the job? These facts and her own public service does not mean that she should get the job. In New York City alone there are thousands of equally talented and involved people who have raised money, designed public service initiatives, organized communities, written books on policy, taught inner city children that could do as good if not a better job than Caroline Kennedy. Who is advocating for them?
And then there are people like Andrew Cuomo, the New York Attorney General and the son of the former New York governor and a member of a famous political family as well. But he does have elective office behind him and a history in the political process (how he got his initial start might be as interesting as Caroline's present efforts).
The fact of the matter is that it is unlikely that the thousands of unknowns in New York who could do as good a job as Kennedy will ever get the chance. Perhaps it is understood that a political track record is a pre-requisite for such an appointed position. Any one can run, but perhaps proven people ought to be appointed.
Caroline Kennedy is asking for an appointment. In 2010 when she has to run, she will be the incumbant. The rules change and for Democratic rank and file, the process must be frustrating.
Craig Jackson
Our First Fight
Obama picks Rick Warren to give invocation at the Inauguration. Rick Warren supported an initiative in California that took away marital rights from gays granted months earlier by the state's Supreme Court. He compared gay marriage to marriage between siblings and between an older man and a girl.
All hell has broken loose.
And for good reason. Obama has asked for understanding from the gay community that people of different views will be represented at the inauguration. But many gay people regard the California proposition as a referendum to live their lives--basic stuff in the humanity department. So how could gay citizens be asked to compromise on something so basic as the right to express themselves with the love of their life in a way recognized by the law and society like everyone else?
It might be that gay citizens might need to settle for recognition under the law for now. Society, if California is any indication, is not going there now. The California Supreme Court could not justify denying marriage rights to gay Californians under that state's constitution. Yet in the incredibly interesting world of California law and politics, in a manner that defies the logic of political philosophy, a vote was held to take rights away from a segment of society. In my view, it is not possible to justify similar discrimination under the national constitution. In a few words, equal protection requires legal recognition of gay marriage.
The social part is a little trickier. Starting with the religious groups, my ever developing knowledge of First Amendment Law tells me that the freedom of religion clause would preclude the government from requiring a church to perform a ceremony or to recognize the union of persons of the same sex. Right or wrong, one's religious beliefs are one's religious beliefs. A pastor does not need to recognize the right of a same sex couple to marry.
But the county clerk must!
Rick Warren and other opponents of the initiative are overreaching when they try to wipe the concept off the public books for any circumstance. This is why the rejection of the marriage right is so disappointing. Warren need never perform a ceremony between two men or two women. He is protected by the First Amendment. The overreaching comes from a paranoia held by many among, as I am learning, conservative and moderate clergy and religious folks, that a gay couple calling themselves married is going to undermine the relationships and bedhopping of heterosexuals seeking love and sex in every location from the Church to singles bars.
Others may believe that the fact of open homosexuality is the problem already before us. This is an undebateble proposition. People who feel that way are not going to be convinced to change by anything that I say. But, while one cannot mandate an embrace of the lifestyle, tolerance is required in a civil society.
In a word, anti-gay movement activists, which in the case of the California initiative, includes Rick Warren, add nothing of value to the notion of civil discourse in this country. Indeed, they advocated against gay marriage for no rational reason that I can discern.
That having been said, to depict Warren as just another run of the mill right wing "Christian" is not well founded. Gavin Newsome, the activist mayor of San Francisco who helped get all of this started by pushing city legislation for marriage in his city, spoke on the Rachel Maddow program on MSNBC on December 18. While denouncing the choice by the President Elect to invite Warren, on several occasions Newsome made a point of distinguishing Warren from the evangelical right likes of the late Jerry Falwell, among others. "He really is a nice man." Newsome said while noting a number of breaks from right wing evangelical rhetoric and policy in the areas of poverty and the need for it to be addressed, torture and how the US should not implement torture under any circumstances, climate change and environmentalism--all positions that many right wing Christians apparently feel divinely obligated to ignore, or stand against positive change.
Rick Warren is no Jerry Falwell, and this ought to be recognized. Members of the gay community critical of the invitation maintain their credibility not by depicting Warren as a youthful Falwell. He is not. They maintain their credibility by critiquing the invitation on its merits, a strong case, while maintaining, in public statements, the distinction between Warren and the evangelical right. Mayor Newsome understands this.
All hell has broken loose.
And for good reason. Obama has asked for understanding from the gay community that people of different views will be represented at the inauguration. But many gay people regard the California proposition as a referendum to live their lives--basic stuff in the humanity department. So how could gay citizens be asked to compromise on something so basic as the right to express themselves with the love of their life in a way recognized by the law and society like everyone else?
It might be that gay citizens might need to settle for recognition under the law for now. Society, if California is any indication, is not going there now. The California Supreme Court could not justify denying marriage rights to gay Californians under that state's constitution. Yet in the incredibly interesting world of California law and politics, in a manner that defies the logic of political philosophy, a vote was held to take rights away from a segment of society. In my view, it is not possible to justify similar discrimination under the national constitution. In a few words, equal protection requires legal recognition of gay marriage.
The social part is a little trickier. Starting with the religious groups, my ever developing knowledge of First Amendment Law tells me that the freedom of religion clause would preclude the government from requiring a church to perform a ceremony or to recognize the union of persons of the same sex. Right or wrong, one's religious beliefs are one's religious beliefs. A pastor does not need to recognize the right of a same sex couple to marry.
But the county clerk must!
Rick Warren and other opponents of the initiative are overreaching when they try to wipe the concept off the public books for any circumstance. This is why the rejection of the marriage right is so disappointing. Warren need never perform a ceremony between two men or two women. He is protected by the First Amendment. The overreaching comes from a paranoia held by many among, as I am learning, conservative and moderate clergy and religious folks, that a gay couple calling themselves married is going to undermine the relationships and bedhopping of heterosexuals seeking love and sex in every location from the Church to singles bars.
Others may believe that the fact of open homosexuality is the problem already before us. This is an undebateble proposition. People who feel that way are not going to be convinced to change by anything that I say. But, while one cannot mandate an embrace of the lifestyle, tolerance is required in a civil society.
In a word, anti-gay movement activists, which in the case of the California initiative, includes Rick Warren, add nothing of value to the notion of civil discourse in this country. Indeed, they advocated against gay marriage for no rational reason that I can discern.
That having been said, to depict Warren as just another run of the mill right wing "Christian" is not well founded. Gavin Newsome, the activist mayor of San Francisco who helped get all of this started by pushing city legislation for marriage in his city, spoke on the Rachel Maddow program on MSNBC on December 18. While denouncing the choice by the President Elect to invite Warren, on several occasions Newsome made a point of distinguishing Warren from the evangelical right likes of the late Jerry Falwell, among others. "He really is a nice man." Newsome said while noting a number of breaks from right wing evangelical rhetoric and policy in the areas of poverty and the need for it to be addressed, torture and how the US should not implement torture under any circumstances, climate change and environmentalism--all positions that many right wing Christians apparently feel divinely obligated to ignore, or stand against positive change.
Rick Warren is no Jerry Falwell, and this ought to be recognized. Members of the gay community critical of the invitation maintain their credibility not by depicting Warren as a youthful Falwell. He is not. They maintain their credibility by critiquing the invitation on its merits, a strong case, while maintaining, in public statements, the distinction between Warren and the evangelical right. Mayor Newsome understands this.
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