Work in Progress

It’s not to say that I haven’t been writing, you see, just not publishing much on the blog lately, but summer has been a kind of vacation. I want to try and write about something that I’ve been thinking about for a long time. It’s more like an anti-idea having to do with things that sometimes aren’t said but can be spoken of. Here’s an example: there are people for whom the New Deal legislation promoted by the Franklin Roosevelt administration in the 1930s is a great disaster, to be repealed at all costs. What they want is not-the New Deal. Here’s a different example: one child takes another’s toy; the child who’s toy was taken will likely desire not so much to have his toy replaced, but rather to see the other child not-have the toy, for the toy to be taken from the taker, so that they too will know how it feels to have something taken by force, thus restoring equality between the two. It’s a kind of justice-as-equilibrium thinking – I hit you, you hit me, and we’re even. I rob you of some amount, you rob me of a similar amount, we’re even. Equality restored. The New Deal and the War brought the US into a new and different era, and changed society. There are parts of society that would like to return to the way it was, for whatever reason.

Populism is sometimes a kind of not-the establishment, or can be perceived that way. What do Trump voters want? Not-Obama. They want Obama in reverse. I often think of conservatives as fundamentally against whatever historical development happens to offend them, although conservatism is richer and more complex than that. Libertarians, I find, seem to be driven by a desire for not-the Government, and especially not-the Federal government. Sometimes there’ll be some nonsense about  markets, but mostly it’s important to get government out of as much of the private economy as is possible, or maybe practicable.

The idea of the not-thing or not-idea is a bad photocopy of a confused summary of the book The Rhetoric of Reaction by Albert Hirschman. In that book it is postulated that there are three basic reactionary theses: perversity, jeopardy, and futility. Perversity argues that whatever it is against will produce the opposite of what it is supposed to. “Government welfare programs create poverty.” Jeopardy argues for or against a course of action by emphasizing the risks to some previously obtained advantage or asset. “If we don’t legalize gambling, how will we pay for public services?” Futility argues that some particular historical episode had no effect, because whatever happened would have happened anyways. For example, one might argue that racism in America would have disappeared without the help of the Civil Rights movement. Reactionary rhetoric is a kind of thinking, and Hirschman generalizes it in a way that makes it possible to notice in a huge number of places, or at least that’s how it was for me. Hirschman is a delightful writer – his The Passions and the Interests is great.

Welp, that’s all for now.

Graduate School

Well I am, at least for the moment, back on the grad school train. Which is to say I’m working out a plan to apply to PhD programs in economics for fall 2018. I’ve had a longstanding ambivalence about grad school, but I do have a book coming out this month, and my co-author urged me strongly to take advantage of the moment and apply to schools. My father has long advocated for me to try for a PhD as well, and so I’ve begun the process. I have to take the GRE sometime this fall, and figure out where I want to apply and so on. Already I feel doubtful.

There are two major reasons why I won’t go to a PhD program. The first is that I have not taken real analysis (whatever that is). My math is not strong – it’s, you know, halfway decent, but Markov chains and Euler functions are quite beyond me. In any event, I’d have to find a way to do another couple years of math classes (with what time? with what money?) to get myself through real analysis, but since I’m trying to do this now, it’s not a possibility. The irony, of course, is that you don’t even really need real analysis to do good economics, it’s just a filter that economics programs use to separate the wheat from the chaff.

The second reason is because my partner is a committed farmer. Going to graduate school means being separated from my family. Which is why the only way I can go at all is if the program is just right. If they give me money to go and the program means I can get a better paying job when I’m done.

The flipside of this is, of course, doing a PhD is very compelling for me. I enjoy research and writing, and being back at school would mean more of both of those things. And, more generally, it would mean being around a university again. Although ultimately what I really want is to be on the other side of that salary and benefits package divide. It feels just out of reach for me.

So, basically, I’m going to apply to graduate school, but I’m assuming I won’t get in, or at least won’t get the kind of opportunity I’d need to rationalize leaving my current situation. But once that’s done, I’ll be able to put this whole thing to bed.

A sign of things to come?

I figure Christmas this year will look a lot like Christmas last year. And next year, for that matter. The first Christmas that feeldifferent, that’s the Christmas you remember. The question I want to ask is: how many Christmases after passing the bill currently being debated in the Senate – the Better Health Care Act? – until the United States starts feeling different?

I’ve read a couple of analyses on the legislation – my impression is that it changes Obamacare some, cuts Medicaid alot, and cuts taxes. A lot. Mostly for wealthy people. It’s an outrageous, unpopular bill, and it’s probably going to pass and become law.

The United States will see increased income and wealth inequality, or at least I think that’s the most likely scenario. But more importantly, I think the next four years will see the Federal government diminished considerably. The Republicans in Congress have spoken of wanting to put together a major tax reform, and who can say how terrible that will be.

It occurs to me that there are two sides to the political pressure on the Federal government – there’s the desire for the states and individuals for greater independence manifesting in the form of austerity/pro-business policy on the one hand but there’s also, I think, globalized capitalism as well. China, Russia, Saudi Arabia, and other states have produced a wealthy elite in the last couple of decades, and the US is becoming more like them.

And maybe capitalism can subvert patriarchal nation-states and that’s not such a bad idea, or maybe it just replaces the patriarchy. That’s no progress at all.

In any event, I worry that reality is going become unglued for people in the future: the world will change faster than they can deal with, and they’ll get stuck and slowly lose their minds. The health care bill will ultimately take health care away from millions of people. I suppose eventually charity will take the place of some of the social services provided by government.

But here’s what I’m waiting for: some summer it’s going to get really hot in Texas, and it will get ugly, because there won’t be adequate social services. There will be a hospital, maybe, in the country, overwhelmed by cases of heatstroke and dehydration, to set off a riot when supplies run out. Maybe it will happen and it won’t make the news – maybe it will be kept out. Who knows?

 

 

\

Turtle Soup

Nassim Taleb tells this story about a bunch of fisherman who catch some turtles one day. They try to eat the turtles, but the turtles taste bad, so instead they offer the meat to the god Mercury, who happens to be passing by at just that moment. Mercury, an immortal being with supernatural powers, perceives the deception, and dispenses justice. As punishment for offering Mercury bad food, the fishermen are then forced to eat the turtles themselves. And thus the principle of equality of uncertainty is established.

First of all, I want to point to most unrealistic part of this story: the presence of an immortal being with supernatural powers. I feel it is common knowledge that such beings do not exist, and that, likewise, principles are not enforced by them. And justice enforced by coercive power is no justice besides.

Taleb’s primary lesson deriving from the story of the fishermen and the turtles is to beware of salesmen. My gut level response to that is “have you been outdoors lately?” Everyday life is saturated with commecials and advertisements. The drumbeat of salesmanship is ubiquitous, steady, and relentless for most people. It is woven into the fabric of social interaction. Televised sporting events are – both on-screen and live – orgies of salesmanship. Social media commodifies the advertising subject itself – Facebook users are the product – advertisers are the consumers.

Taleb discusses his career as a trader at a “white shoe firm” – the partners at the firm would never sell each other crap – all the crap they would sell to faceless outsiders – well, actually the salesmen sell all the crap to faceless outsiders, and are well compensated for it – the salient point here is that what Taleb finds laudable about the traders at his firm is their ability to off-load inferior product onto outsiders.

If Taleb had an ethical motto it might be “Capitalism is for the capitalists” – or, it’s people screwing each other all the way down. If possible, be the person at the top. In general, try to be as close to the top as possible. Most people live in a fog of lies, platitudes, and fear but it’s easier to just assume they’re stupid and therefore deserve to get screwed. The odd thing is that I imagine that Taleb’s audience fantisizes themselves being part of elite in the know – “most people are suckers, but not us. I think they’re just as confused as anybody. I’ve only read parts of Skin in the Game – not any of his better known work – but Taleb comes across to me as breathtakingly cynical.

 

 

 

Economic Justice

Justice is fidelity to language – the most precise virtue and the one most resistant to arrest.
Justice is not coercive or violent – it is non-violent – and yet often delivered by violence, clothed in violence, called into being by violence.
Justice is sacred because it must be believed before it can be seen in the world.
Justice is believing others in the way you want to be believed by others.

What then is economic justice?

Bearish

Bulls and Bears. They’re animals – I almost wrote wild animals but bulls (male cows with testicles, and maybe also horns?) are domesticated, despite their reputation for violence. They’re also sports teams in Chicago, where they are refered to as Da Bulls and Da Bears. It was kind of exciting to me the first time I heard someone in Chicago say “da Bears” in that unconcious, this-is-really-how-we-talk kind of way.

Bulls and Bears are also representations of market forces – the first time I had this explained to me was standing behind a coffee shop counter in the Cow Hollow neighborhood of San Francisco, by an older man with an Australian accent. A bear market means that prices are headed down, and a bull market is when prices are going up. If you’re bullish on something, that means you think it’s value is going up, and if you’re bearish, well, you’re a pessimist. Bear traders engage in what are called “short sales” – meaning that they make deals to deliver some quantity of a stock at some specified future time at a price lower than the presently prevailing price of that particular stock. The idea is that the price will go even lower than that, and you’ll recoup the difference.

I suppose the bear and bull metaphors are what Keynes meant by “animal spirits” – although I’ve never heard a trader say that, probably because traders hate Keynes.

At any rate, I’m feeling especially pessimistic at the moment regarding the national political situation here in the United States. The recent debacle over the AHCA, the bill that would repeal and replace Obamacare, put forward by Paul Ryan in the House of Representatives, demonstrated that that the Republican party does not even remotely have it’s shit together. They’ve been agitating over repealing and replacing the ACA for seven years. Shortly after the failure of the bill, the word coming out of Washington was that President Trump was ready to just move on to the next thing. Seventeen days into the legislative process, he just said “Fuck it.”

Now, on the one hand, all this might be taken as good news for those fearing the reprecussions of this most recent election. Turns out the winners were all talk, no action. They complain endlessly, but they can’t actually get a plan together, nor do they have the fortitude to carry it out. Eventually something will come up that requires competence, and then Nancy Pelosi will become the de facto head of state. On the other hand, what I think marks the AHCA failure as seriously bad news is that it means that Republicans can’t get their agenda done through the normal process, so they will simply turn to alternative measures. And I think I have a plausible idea of how that might play out.

It’s all pretty simple. The debt limit, which was suspended back in November until March 15th of this year, will need to be raised sometime this summer. If it isn’t, at some point the Federal government will simply run out of cash, and then payments that come due will simply go unpaid. If this happened, it could mean an international crisis the likes of which the world has never seen. That the United States would not pay interest on it’s loans on time and as expected would have untold consequences in international finance. US Treasury Securities – that is, the Federal government’s debt – is the a strategic asset held in banks all over the world. A default on just one particular piece of this debt would necessitate a revaluation of assets held all over the world. But in the meantime, the Republicans in the House would have the bull by the cahones – when the bankers (and everyone else) plead and beg them to raise the debt ceiling, they’d start making demands. Although they wouldn’t be made as demands – they’d simply be stated as requirements for lowering the long term trajectory of US debt obligations. And then they’d butcher the welfare state. Social Security, Medicare, Medicaid – these programs would be immediately and drastically cut, if not abolished altogether. At last the Republicans would put an end to “out of control” entitlement spending in Washington. And they would have a perfect alibi – they would say that those cuts were necessary to put the country on a secure footing. Meanwhile, the “dismantling of the administrative state” (quote from White House chief strategist Steve Bannon) would proceed, and much of the apparatus of governance would disappear. The EPA, the BLS and the BEA, the NIH, the CDC, the SEC, and so on and so forth. Economic data would become the property of private banks. Heck, the economy itself would become largely privatized, and democracy would become little more than a dumb show.

The important thing is that all this would be accomplished outside of the normal process, as quickly as possible, and on account of the crisis.

Now, that might sound really bleak, but in some ways this scenario is not as bad as it sounds. There would still be services for the poor – charities would become larger and more important. And there would still be regulation – contracts would continue to carry legal force, lawyers and the judiciary would still play an important part in the daily operation of business and production. I don’t think it would be as dystopic as one might imagine. On the contrary, I think a lot of people would work very hard at obfuscating the differences, and claim strenuously that nothing had really changed. The so-called developed world become more like the developing world. It’s only a move of tense – from past to active. Surely that’s the way forward?

As far as I know, I’m the only person even suggesting that this could happen at all. So if you’re worried about it, don’t be. I’m a nobody, and if all the smart people out there aren’t sweating this, it seems reasonable to say that this is probably just me being too pessimistic for my own good. Nevertheless, I maintain that a course of action such as that described above, is not all that far outside of the realm of possibility.

There would be, I suppose, a brief period of terrible suffering. People who currently dependent on government to support medical treatment, housing, food, and so on, would lose their support, and many people would probably die as a result. But a year or two later, it would simply be a memory, to be reinvented as morality tale about the dangers of dependence on government. The real losers in this case would be the middle class, the great majority of whom would be transformed into paupers. The collective memory of their former affluence would be a subject of the bitterest resentments, and would render political cooperation impossible for a generation or more.

But hey, what do I know?

Hillary Clinton and the angry left

So I have a lot of friends on the left who just hate Hillary Clinton. And I love that they hate her so. Why?

First, because to me their hatred says that they want progressive policies, but without the politics necessary to get them. Everybody should just realize that single payer health care and environmental regulation and a living wage and so on are the simply the right thing to do.  No one should have to argue about it or compromise for it.

But that’s not how democracy works. It’s not enough to simply know what the right policies are, you have to get people to vote for representative legislators who then have to make those policies law, and then you have to get the administrative branch to execute those laws, and have judges uphold them when they are challenged. And that process works at multiple levels. Moreover, there are nearly 200 independent territories in the world, and there are people in each one who, at least in principle, are allowed to make their own decisions about how they want to use their resources, and so on.

I’ve read so many Jeremiads, litanies of the sins of statesmen, capitalists, fascists, totalitarians, revolutionaries, and on and on and on. And I still believe a better world is possible! But the American left is so often terribly narrow in it’s aspirations. What do I mean? Take the antipathy for NAFTA, common on both the left and right (both blame the other for it, as a general rule). It often boils down to a sentimental longing for manufacturing jobs. Jobs that required only a high school education, at most, which used skills already widely understood to American men, which would produce familiar products. The hours would be long enough to satisfy the craving for the badge of “hard work” but not so demanding as to preclude time with family, regular vacations, and so on. Compsenation would be commensurate with skill level, of course, but at minimum would include full health and dental benefits, and enough take-home pay for a stand-alone house in a nearby suburb, which of course would be suitably outfitted with a range of the latest in conusmer goods. A food system that could deliver the option of beef, chicken, or pork, lobster or fresh, wild caught ocean fish, every night to the average person. The option of voting – the choice to care or not – and if you just didn’t have time to really engage in the process, nothing to worry about, but, of course, also a civic engagement that would allow the individual to really matter.

In short, what people seem to want is the right to live unconsciously. And what makes people crazy about Hillary Clinton is that she’s always consciously engaged in the political process. She is by no means alone in her engagement – but she represents the kind of person who made a long term commitment to politics when she was young, and has accrued the expansive personal network and attendent influence that comes with decades of involvement in political campaigns and policy making and so on. People wanted Bernie Sanders to just go storming into the Democratic party and rewrite the platform. And when it didn’t happen all those starry eyed partisans hollared about injustice!

And the thing is that, even though she lost the Presidential election, Hillary Clinton is still a major figure within the Democratic party. And it makes the left crazy because they want her loss to mean that they get to be in change now. “Okay, you lost, you failed! Now get on your private jet and fly away and let us work on our socialist revolution.” It’s important that Clinton be craven and greedy – she’s not allowed to want to do the right thing. Because capitalism is wrong – at least, according to the left. Sort of. When it suits their purposes anyways. Hillary Clinton got paid for making speeches to Goldman Sachs! She must be corrupt!

Never assume that someone else must not be authentic. It’s tremendously dangerous. Because if your theory of how things work depends on some particular individual being a liar, and it turns out they are telling the truth, your entire view falls apart, which is some ways the worst sort of disaster. To me, the insistance of the left that Hillary Clinton represents the failures of the Democratic party is a demonstration of the left’s reliance on that failure. The left doesn’t want to win elections. They just want to be right.