Month: November 2011

Money Is a Tool, Not an Inverse Proof of Personal Value

A mindset exists around money and choices involved in acquiring it that I don’t understand. I comprehend that this exists, but I’m not sure why or how it develops and persists. Lauren McLaughlin writes about a New York Times article on Wall Street layoffs:

According to this New York Times article, young wannabe bankers are the first to go in the most recent round of financial sector lay-offs.

I know. Boo hoo, right?

I won’t ask anyone to shed a tear for these youngsters who still have plenty of time to rethink the trajectory of their professional lives. Besides, looked at one way, the recession is the best thing to happen to this generation of young, ambitious college grads. Without easy access to the lucrative field of magical fairy dust mortgage derivatives, they might actually do something meaningful with their lives.

Having two degrees in finance and multiple friends who entered the field in the mid-’90s, I’d take issue with the idea of “easy” access to the financial industry. But that quibble aside, I’d ask why Ms. McLaughlin should spend her time in the (potentially) lucrative field of magical fairy dust novel writing. If she couldn’t do that, she might actually do something meaningful with her life, to be determined by me for her.

I only offer that in jest. Novel writing is a respectable, useful profession, and I admire anyone who can a) do it and b) make a living at it. It doesn’t matter if the author writes books I would read or not. I’m not silly enough to demand that my tastes, preferences, and needs be the only criteria by which everyone must decide what is worthwhile in the world.

The same applies to the world of finance. I think the impulse to condemn finance in total rests on the same misguided notion that all bankers from 2008 were criminals who should be arrested for causing a financial crisis. It’s a simplistic approach to a complicated topic. The industry doesn’t have to be perfect to be useful.

This is not to say I admire the banker lifestyle described in the article or in Ms. McLaughlin’s post. I don’t, but again, that’s because it doesn’t appeal to me, not because it’s inherently flawed or bad. And there are real people suffering in that story. Should we only have empathy for someone until they make a certain income?

Which brings me to a great post by Jason Kuznicki:

The economist Justin Wolfers tweeted an interesting poll result yesterday, from Kaiser (though I’m having trouble finding it at the moment):

As far as you are concerned, do we have too many rich people in this country (31%), too few (21%), or about the right amount? (42%)

As far as I am concerned, 73% of the country appears to have lost its mind. I’d like everyone to be rich, which means, obviously, that we have too few rich people.

He’s right. If we’re going to focus on artificial, ever-shifting definitions of class in America, we should be working to help everyone move up, not knock the “right” people down for being “wrong” in some way.

All Government Is Force. Even Regulation.

Back to the Occupy movement…

I have some sympathy for Occupy Wall Street and its offspring around the country. There is enough broken in the way our economy works that only a fool would advise inaction. Where I quickly part ways is with the obvious implication that our government can fix crony capitalism (i.e. corporatism). Our government is complicit in this problem. It serves the needs of politicians. Where power exists to grab, it will be grabbed. If this involves buying access to or the use of that power, it will happen. The solution is to limit power, not to pretend that human nature can be changed.

This interesting post from writer Lauren McLaughlin addresses an approach for going forward. She’s right that the movement needs to stop protesting and Do Something. I don’t think she’s right on what should be done.

For example, she suggests:

Early complaints about the movement’s lack of specific demands is also falling away as an increasingly focused platform centering on economic justice comes into focus. Poll the former residents of Zuccotti Park or any of the other occupation sites and you’ll hear a variety of ideas, but the most common seem to be the following:

– Regulate banks in a way that disincentivizes the reckless gambling that puts all of us at risk.

– Tax investment returns at the same rate as income.

– Reform campaign finance laws so that we’re no longer being governed by Goldman Sachs.

On the first item, banks were regulated before the financial crisis hit. That we still had a financial crisis may indicate that crimes took place, although I’m doubtful the evidence is strong. But it also demonstrates how difficult it is to get the correct regulation. Unintended consequences will occur. If we radically alter and/or increase regulation, what happens?

It’s also worth noting that capitalists, rather than corporatists, advocate letting banks fail. The fear of failing, including bankruptcy, is a motivator. It’s unlikely to be the exclusive answer, but we haven’t tried it in conjunction with anything yet.

I’d flip the second to suggest taxing income at the same rate as investment returns. Power is the problem, not inadequate revenue. The point of reducing the government is not mere animosity to government (or worse insinuations). As long as power exists, it will be abused.

On the third, I’m not clear enough on the implication of the item to comment extensively. If it’s a response to Citizens United, then I disagree. Corporations are not people in the literal sense, but in the legal sense they are, and for good reason. Corporations (and other forms of organization) are made up of people. Those people do not lose rights because they’ve chosen to work together. If they do, it’s not a large leap to discredit democracy. But, again, reduce the scope and amount of power available within government and the incentive to buy it will reduce.

Ms. McLaughlin’s next paragraph is revealing from my perspective:

Of course, there are other ideas, like making banks finance their own future bailouts through a financial transaction tax, but I think it’s fairly easy to see the big idea at the heart of the movement: American capitalism and democracy are broken. The big difference between Occupy Wall Street and The Tea Party is that the latter sees the government as the big evil, whereas the former fingers a reckless and under-regulated banking industry that has captured our government and bent it to its will.

I’m not a Tea Party guy, so I’m not so concerned about the difference. But the two have similarities and should recognize that the root causes are very similar. Why does the Tea Party see the government as evil? I think there’s some truth to the assertion, but I don’t know the answer. I also know many Tea Party members have taken the initial, singular focus on government spending and turned to other causes in which they want more government, not less. I’m not sure the analysis that it thinks government is evil is accurate.

Either way, if that’s true, the only way “a reckless and under-regulated” – both subjective terms, with the latter being much less defensible – banking industry could capture our government and bend it to its will is with the full participation of our government. Corporatism is a sinister cooperative effort, not a sinister takeover. Trusting the same government that’s been captured so readily and thoroughly to provide a solution is bizarre. As long as there is power to abuse, this will continue, even if it takes a different form. Any action that is to be a solution rather than a perpetuation of chasing new problems must account for this. I haven’t seen evidence that the Occupy movement understands this. It may yet win, but I fear the outcome if it does.

In related news, the government that will somehow help is the same government that sees no problem with pepper-spraying peaceful, if disruptive, protesters with a callous disregard for the necessity or safety of the force. This is the state in action. This is what Occupy requests when it calls for more government regulation. All government is force. Why is it wrong to use against you, but okay to use against me?

The Explanation May Not Fit on a Placard

Continuing with the Occupy Wall Street theme, the Unitarian Universalist Service Committee released an “Open Letter of Support for the Occupy Movement”. It’s predictably full of pointless nonsense which I think underlies the larger problem with the Occupy protests. To be clear I do not assume that UUSC speaks for the movement. I’m only aiming at it because it states ideas that appear to be generally applicable to Occupy Wall Street.

From the beginning:

I stand with people around the country and the world who are calling for economic justice.

“Economic justice” doesn’t say anything. What’s meant by the term? Equality of process? Equality of outcome? There are different possible meanings. Some are legitimate and principled. Others are naive. Which is it here?

My values affirm that each person has inherent worth and dignity; that justice, equity, and compassion should be the guiding principles for human relationships; and that all people deserve access to the democratic process.

More ideals without evidence to demonstrate we do not have them in some form. In the abstract, sure, these are great. But what does it mean in reality? Who doesn’t have access to the democratic process? What are the intended consequences? What might be the unintended consequences? Can “the democratic process” create valid outcomes that you don’t like?

My recognition of the inherent worth of every person compels me to speak out against policies that privilege the demands of corporations over the human rights of people. I support the Occupy movement in its affirmation that protecting workers’ rights and ensuring that basic human needs are met must take precedence. All people have a fundamental right to a standard of living adequate for the health and well-being of themselves and their families.

Please provide examples of where the demands of corporations are privileged over the human rights of people. Government requires a balancing of rights. It’s primary task is protecting the rights of individuals. Corporations are individuals, which is to say a collection of individuals. If individuals have a human right to free association, the form of that association shouldn’t matter, right? Is the Occupy movement free association? Are the human rights of people the rights of individuals or the abstract of a right, like “free speech”? Are “workers’ rights” a subset of human rights or separate and applicable to everyone?

If someone believes my last paragraph, how does free association and an individual’s inherent worth and dignity matter only to the extent that their “fundamental right” to a standard of living is met? If the solution is to tax the rich (more), and that seems to be the Occupy movement’s demand, then there’s an implied point at which an individual becomes a valid target for the rest of society. Justice and equity require both a floor and a ceiling?

I also join the Occupy movement in decrying the wealth disparity that leaves millions struggling for economic security. Policies and legislation that promote economic marginalization are morally unacceptable. Everyone is entitled to a government that recognizes and promotes basic economic rights. Justice, equity, and compassion should be foremost in our government’s decision making.

Is this alleged wealth disparity the cause, or merely a coincidental fact? Wealth and prosperity is only fixed in the moment. But we don’t live in a moment. There is tomorrow, and if we create and produce, there will be more tomorrow. Some will get rich, some will not. This isn’t necessarily problematic or unfair. Stating that everyone should have some minimum is not the same argument as assuming that no one should have above some maximum. Is Occupy interested in creating and producing, and is it interested in consent in achieving economic security, which is not well-defined here?

I agree that policies and legislation that promote economic marginalization are morally unacceptable. However, the solution includes limiting government power, not relying on the right mix of benevolent politicians. The latter don’t exist in sufficient numbers to make a technocratic democracy work without horrible, rights-violating offenses.

Economic oppression is not only a violation of fundamental human rights, it is also a blow to democracy. When economic power is concentrated in the hands of a few and when corporations are awarded the same status as actual human beings, the democratic process is fundamentally compromised. Basic fairness requires that all people have equal opportunity to participate in political debate and to be represented in government.

Define “economic oppression”. Provide examples. Explain how the Occupy movement’s undefined solution resolves the problem. What are the intended economic consequences of democracy? What might be the unintended consequences? Can “the democratic process” create valid outcomes that you don’t like?

Economic power is concentrated for many reasons, including cooperation from politicians. Politicians will be involved in democracy. Democratic tyranny is possible. This is why equality of process is superior to equality of outcome. Democracy does not guarantee equality of process. How would the Occupy movement address this?

Have corporations been awarded the same status as actual human beings? Who will Apple vote for next week? In 2012? What about Starbucks? Again, corporations are a collection of people exercising their natural right to free association. Do they lose certain rights because they join collectively rather than act alone? What would be the consequences – good and bad – of altering the current corporate structures?

I envision a powerful and radically inclusive movement for economic justice. I recognize economic justice as a right that is due to all people, regardless of race, ethnicity, gender, sexual orientation, language, religion, political or other opinion, immigration status, national or social origin, property, birth, or other status or distinction.

Is economic justice a right due to “rich” people who are to be taxed? What does this right look like for anyone classified as rich?

I sign this letter as an expression of gratitude to all who are working for economic justice in the United States and around the world, as an affirmation of my hope for fair and compassionate economic reforms, and as a renewal of my commitment to help make it so.

Are we listening to those working for economic justice who know nothing more than the slogans and solutions, those who haven’t attempted an understanding of the complex problem?

Link via Ethics Alarms.

Krugman says, “I’m Rubber, You’re Glue…”

It’s been a decent chunk of time since I last posted, but I have things to say again. (And Google removed shared items from Google Reader.) We’ll see how long it lasts.

What better (i.e. easier) way to jump back in than to comment on Paul Krugman saying something stupid and lacking in self-awareness. As always it’s “you shouldn’t do that, but ignore that I’m doing it.” Consider this, from last week:

Over the last couple of days, I’ve been getting mail accusing me of consorting with Nazis. My immediate reaction was, what the heck? Then it clicked: the right wing is mounting a full-court press to portray Occupy Wall Street as an anti-Semitic movement, based, as far as I can tell, on one guy with a sign.

I have a lot of sympathy for this complaint, given one of my major interests. It’s a pathetic generalization and an embarrassing reflection on the person willing to dabble in stereotypes without individual evidence. It’s a dishonest tactic, which suggests fear dominates rather than confidence. Any large-ish movement is going to attract its share of crazies who value conspiracy theories over logic. Unless the movement is based on the conspiracy theory itself or a plainly evil belief, the extreme views are probably not widely held within the group and many group members are likely fighting the nonsense out of public view. Generalizing in this way is flawed and stupid, as any case of being uninterested or unwilling to think is.

So, one paragraph in, Krugman has my sympathy. If this had been the issue Krugman intended to pursue, fine. He didn’t.

My first thought was that OWS must have the right really rattled. And there’s probably something to that. But actually, this is the way the right goes after everyone who stands in their way: accuse them of everything, no matter how implausible or contradictory the accusations are. Progressives are atheistic socialists who want to impose Sharia law. Class warfare is evil; also, John Kerry is too rich. And so on.

Krugman makes no distinction between those making accusations and those who share (some) similar, conservative views. It’s “the right”, without specificity. That stroke is too broad.

The key to understanding this, I’d suggest, is that movement conservatism has become a closed, inward-looking universe in which you get points not by sounding reasonable to uncommitted outsiders — although there are a few designated pundits who play that role professionally — but by outdoing your fellow movement members in zeal.

He’s closer here, since it’s clear that “movement conservatism” implies “professional”. But his aside is not enough to excuse what he’s doing. Most people see the distinction between Rush Limbaugh and a neighbor, perhaps even when the neighbor praises Limbaugh. I hope the same is true of anyone tempted to make a professional pundit like Bill Maher the spokesperson for every liberal progressive everywhere. It’s a silly, immature way to view the world (and a key reason I hate partisanship).

Krugman continues:

It’s sort of reminiscent of Stalinists going after Trotskyites in the old days: the Trotskyites were left deviationists, and also saboteurs working for the Nazis. Didn’t propagandists feel silly saying all that? Not at all: in their universe, extremism in defense of the larger truth was no vice, and you literally couldn’t go too far.

Many members of the commentariat don’t want to face up to the fact that this is what American politics has become; they cling to the notion that there are gentlemanly elder statesmen on the right who would come to the fore if only Obama said the right words. But the fact is that nobody on that side of the political spectrum wants to or can make deals with the Islamic atheist anti-military warmonger in the White House.

The last line says it all. (It’s not the last line in the post; just the last important line.) Is it only “that side” engaging in heated, sweeping accusations? “That side.” Krugman is in pot-meet-kettle territory. Everyone who believes anything and shares that belief is a propagandist, literally. In the pejorative, as Krugman implies here, he’s claiming that only the right propagandizes. It wouldn’t take long to find instances of the left engaging in the same tactics against the right, considering I read Krugman’s post.