Augustine and Government

Christianity is held up by two philosophical tent poles, and one of them is St. Augustine.  He had a jaundiced view of government.

Justice being taken away, then, what are kingdoms but great robberies?  For what are robberies themselves, but little kingdoms?

He goes on to declare that the defining attribute of a kingdom over a robber band is "impunity", for only government can rob without consequence.

Every government loots the nation to feed its supporters, but some loot more than others.  Take Cuba, for example.  After the United States returned the government of Cuba to the people after the intervention of 1898, the free Cuban government quickly descended into the crudest corruption.  Writes Tom Gjelten in Bacardi and the Long Fight for Cuba:

Cuban politics had grown dirtier by the year, with electoral fraud practiced on all sites and widespread graft within the government itself... In the fall of 1905 Interior Secretary Fernando Freire de Andrade began dismissing government employees, even schoolmasters, who favored the opposition Liberal Party[.]

The Liberal Party withdrew its candidates from many races in the fall elections.  By August 1906 the Liberals had backed an insurgency that was marching on Havana.  By the end of September the government had resigned and the US took over again.

The more that people look at government for benefits and rewards, and the more that politics descends into a fight for spoils.

It's instinctive, of course.  People feel that the more the other guy has, the less than they have.  And it certainly applies for the agricultural age.  The more land that I have, the less that's available for others.  The more powerful my patron, the safer I feel, even if he keeps most of the loot for himself.

In the industrial age, things are different.  The more products that corporations make, the more that's available for everyone.  The richer the corporate CEOs get the more jobs they can create at their corporations,  And you never know when someone is going to invent something and create a whole new form of wealth: textiles, railroads, steel, electricity, autos, radio, TV, computers, internet.

The latest invention seems to be the horizontal fracking technology that is creating a boom in natural gas and is causing US domestic oil production to reverse its decades-long decline.

Here is the deal. We humans are programmed instinctively to believe in a fixed pie, with more for you meaning less for me.  Yet capitalism has produced a new reality.  The better I serve the consumer with better products and services the bigger the pie and the more there is for everyone.

When will President Obama get the message?

Bacardi and Fidel

In my view, everyone has it wrong.  The capitalists pride themselves on being rugged individualists when in fact nearly all capitalist enterprise is profoundly collective and cooperative.  The political activists pride themselves on being compassionate collectivists when in fact they are the most naked selfish and vain individualists imaginable.

Take the case of Cuba.  There was a time when the Bacardi rum company was the poster boy for Cuba: "the one that made Cuba famous."  But then along came Fidel Castro and nationalized the company--and everything else that moved in Cuba.  Bacardi's factory became "Administrative Unit 1, a subdivision of the Santiago Beverage Combine, which in turn was under the Provincial Directorate of Beverage and Liquor Enterprises."  It's all told with clarity and charm by NPR correspondent Tom Gjelten in Bacardi and the Long Fight for Cuba.

If you look at the story of the Bacardi company and the men that led it, they combined unquestioned leadership ability with the talent to herd a bunch of cats, from the Bacardi family to the talented employees.  Along the way there were numerous challenges, from bankruptcy after an earthquake in Santiago de Cuba to figuring out why the rum made at Bacardi's factory in Mexico tasted different from the rum made in Cuba.

Then there is Fidel Castro.  From his public debut as a student activist at the University of Havana he demonstrated himself as the most rugged individualist that ever lived.  Writes Gjelten:

Tall and solidly built, with a long, sloping nose and high forehead, the nineteen-year-old Castro projected self-confidence and authority.  His fellow students were either drawn to him as a natural leader or put off by his know-it-all attitude and his tendency to monopolize conversations.

And of course as he matured, he because more know-it-all and more monopolistic.

The fact is that even though capitalism ruthlessly uses people and resources, it must successfully mix them together and fine tune them in a thousand different ways every day; otherwise it will decline and die.  It lives and dies by cooperation, charming consumers into buying, and employees into over-performing.

But government is a horse of a different color.  It talks a good line about community and cooperation, but in fact what is does is force.  It divides people, exploits people, and everything it does has the taint of coercion.  And when things go wrong it blames the people.  Governments decline and die when the lose the will to use force.

In the 19th century and thereafter, business people and socialist activists have all agreed that business is the acme of rugged individualism and the survival of the fittest.  So it is, except that most of the time business is a team effort and a never-ending need to serve the consumer.

Government, on the other hand, tends always to an undeclared civil war and a naked attempt to loot the state on behalf of your supporters.  Because with government there is always the temptation to resort to force.  Why not?  The government has a monopoly on force.

Well, there's a reason why not.  Humans are social animals, and that means that they survive as cooperative beings that work with each other, because it turns out that cooperation is much more effective than individual effort.  When it is necessary to resort to force within the community it means that cooperative social behavior has failed.

And for anyone that doesn't get it, we humans have conducted a planet-wide experiment in the efficacy of force.  It was called Communism.  Everywhere it was tried it killed social cooperation and turned society into a prison where everything was conducted by the rule and nothing was done by trust and good will.

Economy 2012

The big question for the economy in 2012 is the impact of QE2. That's the Fed's huge money-printing operation that ended in the middle of 2011.  How big?



The Fed's response to the 2008 meltdown was QE1.  The Fed increased the monetary base from about $0.8 trillion to $2.0 trillion, more than doubling it.  Then in QE2 the Fed increased the monetary base further from $2.0 trillion to $2.7 trillion where it now stands.



The question for ordinary Americans is what happened to the actual money supply.  Back in 2008 the M2 monetary aggregate stood at about $7.7 trillion.  The first monetary burst took M2 up to $8.5 trillion, a 10 percent increase.  Then M2 flatlined for about six months before resuming "normal" growth.  In the last three months it has ballooned from $9.0 trillion to about $9.6 trillion in response to QE2.



Of course, M2 has not increased in proportion to the increase in the monetary base.  This shows that people really are "deleveraging" and reducing their debt load.  But in the end the increase in the monetary base will feed into M2.



Generally speaking the nominal GDP growth (i.e. GDP growth including inflation) is reckoned to parallel  M2 growth, with a lag.  Thus, the M2 pulse at the end of 2008 yielded a bounce by mid 2009.  And so we should expect the QE2 money pulse to boost GDP starting about now.



But the question is whether the monetary pulse will result in real GDP growth or just a pulse in inflation.  If it results in real growth, it will lead to a hangover a year later, just when the next administration is inaugurated.  If the pulse just feeds into inflation then we will not see any real growth next year but just price increases, particularly in food and fuel.



President Obama is clearly setting up his campaign to run against economic villains.  We have had millionaires and billionaires and Wall Street thus far.  Can Wal-Mart and Exxon be far behind, as food and gas prices balloon?



The ugly truth about the economy is that it is never the fault of corporations.  The government sets the rules for commerce, from Wall Street to Main Street.  The government controls the money supply; the government makes the regulations; the government awards the market-distorting subsidies; the government hands out entitlements to its supporters.



Then the government blames Wall Street, banks, and corporations when things go wrong.



What a world!

Will Obama Benefit from OWS?

When the president of the United States does something, even if it is stupid, his action benefits from the aura of the office.  So when the president launches into a full-throttle Occupy Wall Street class warfare campaign, even the most hardened opponent has to wonder: Does he know something I don't know?



After all, there is a reason why politicians are very careful about choosing their enemies.  When you get attacked, it wakes you up.  It makes you angry.  It prods you into getting an opposition organized.  No politician wants that.  He wants, if possible, to put the opposition to sleep.



So I've been watching the daily Rasmussen Reports daily Presidential Tracking Poll, looking for changes that might reflect reactions to the president's class-warfare campaign.  Frankly, I don't see any results.  Not yet.



If you look at the Total Approve number, it started declining during the Debt Ceiling debate, and has flatlined at 43-45 percent ever since.



If you look at the Strongly Approve number, it has been in steady decline since the start of 2011, and seems to have flattened out at 21-22 percent since the beginning of September.  So is this the effect of the class warfare campaign, that it has stopped the erosion in the president's base support?  Big Deal!



If you look at the Strongly Disapprove number, it had declined from about 43 percent at the end of 2010 to about 36 percent by May 2011.  But during the Debt Ceiling debate the Strongly Disapprove numbers strongly rallied back to 43 percent.   Since the beginning of August the number has flatlined at 42-43 percent.



I don't know what the Obamis see in their polls.  But I'd say that whatever it is they are doing, it isn't working.



Looks like the old Clinton campaign slogan still applies.  It's the economy, stupid.

A Test of Class War

Republicans rail at Democratic "class war" rhetoric.  That makes sense because the Republican Party is a resolutely middle-class party.  Republicans, who are mostly neither rich nor poor, think that class-war politics is likely to damage the prosperity of the corporations they work for or the small businesses they own.



But maybe President Obama is on to something.  Maybe he can pump up the rage of the unemployed and win the election with it.



The problem is, of course, that the experts all say that you can't win an election merely turning out your base.  You have to win the moderates, the independents.



Here's Jay Cost writing that President Obama can't win without the independents, and right now he has 35 percent support from independents.  Jay Cost proposes a thought experiment.

[L]et’s conduct a little thought experiment. Suppose that the same percentage of Republicans, Democrats, and independents turn out in every state in 2012 as happened in 2008. Let’s also suppose that Obama does as well with Republicans and Democrats, but with independents he suffers a 17 percentage point decline in every state (which is in keeping with his dropping from 52 percent support among independents on Election Day 2008 to 35 percent today). What would that election look like?

It would look like 2004, and the Republican would win with 50.5% of the vote.  But that scenario is really too generous to the Democrats, he reckons.  More likely, Republican "soft partisan" vote will swell and the Democratic "soft partisan" vote will shrink in 2012 when compared to 2008.  On that scenario the Republicans win in a blowout with a 10-point lead in the popular vote.



Then there are the Catholics.  Colleen Campbell details how in numerous instances the Obama appointees have pressed Catholics on sensitive issues, from abortion to adoption to traditional marriage.

A candidate who won their support by pledging to respect the religiously grounded views of those with whom he disagrees has morphed into a president whose administration relentlessly attacks religious liberty.

The fact is that President Obama and the Reid-Pelosi Congress has done nothing for independents.  Stimulus, ObamaCare, and cap and trade were all about throwing money at the Democratic base.  Yet now the president is running for reelection by ginning up the Democratic base.



Does he really think he can raise enthusiasm on his side without waking the sleeping bear on the other side?



The problem with big government is that it amounts to a kind of secular religious state.  In every big program it is pushing secular religious morality and repressing traditional religious morality.  Liberals absolutely hate the right "legislating morality."  But they seem to be clueless about their own agenda. And that boils down to "legislating liberal morality."



Everyone except liberals hates it when liberals legislate morality.  So that's why I wonder about Obama and his class-warfare campaign for reelection.

Government, Business, and Religion

In the lefty documentary The Corporation the usual suspects on the left excoriate business for its soulless attention to profit.  They, the corporations, don't believe in anything, says documentarist Michael Moore.  That's why they will sell him the rope to hang them with.

That's not really fair, Michael.  Corporations do too believe in something.  They believe in production for profit.

Generations of lefties have been outraged about this, and generations of practical people have tried to come to terms with it.  But it's true.  Business will do what it takes to make a profit, subject to the the natural and social limitations placed on it.

Wouldn't it be better to go back to a simpler age where economic activity was more closely integrated with human values?  Yes, it would.  And it would be nice to put all the evils of the world back in Pandora's Box.

But that fact is that humans are resourceful and inquiring creatures and over the recent millennia we have differentiated our simple hunter-gatherer culture.  No longer are governing, production, and meaning all mixed together in a unified single narrative and ritual.  Now they are differentiated and specialized.  Just like our knowledge of the world, which used to be called natural philosophy, is now differentiated into a hundred disciplines and specialties.

Today we have government, and government is the specialist in force.  Apologists for government spill barrels of ink trying to show that government is kind and compassionate, but they are fooling themselves.  People resort to government when they give up on getting what they want by exchange or persuasion.  They go to government to because they want to use its force.

Today we have religion, and religion is the specialist in meaning.  It may be that the world has no meaning, as the Stoics insisted, but humans, and indeed all living things, act as if it does.  It is the job of religion in its broadest sense, encompassing transcendental faith, secular faith, culture, and language to breathe meaning into the world.   It is meaning that tells us what we "ought" to do.

Today we have business, and business is the specialist in production.  As Marx realized, business in the old days was veiled in custom and mystery, but capitalism has stripped it of all its mystery, and reduced everything to "callous cash payment."  Business is all about exploitation: using human and physical resources in the most cost-effective way.  Exploitation is not necessarily good or bad.  It is just getting the best value for money.

So when the lefties rail on and on about the "harm" that corporations inflict, we have go say: so what?  If you don't want corporations to buy clothing from sweatshops then make it illegal and put the CEOs in jail if they break the law.  And when the CEO of a public member-owned cooperative does the same thing, put him in jail.  That is what government is for, en-"forcing" the law.  But in the real world, things aren't quite as simple as they appear in lefty documentaries.  The workers in sweatshops are usually teenage girls fresh off the farm.  And their wages, small as they seem to us, actually mean a lot to their families back on the farm.  So, do we insist that sweatshops pay more?  Even it that means that those teenage girls don't have jobs?

The bigger question is the question of meaning.  We think that human life means more than government force and capitalist production.  We humans are social animals, and that means that we don't like to force our kin, our friends and our neighbors. We would rather persuade them.  We don't like to use our kin and our friends as means to an end.  We want good for our friends for its own sake, because we wish them well.  The great challenge of the modern era, where people deal all the time with people who are not their kin or their neighbors is how to make the whole world social and persuadable, avoid treating strangers as numbers, and keep force to a minimum.

In other words, how do we create a culture where CEOs don't ruthlessly externalize all their costs, because we have built a culture that teaches people to think about the harm they do to other people before they act?

Where's the Astroturf?

When the Tea Party emerged in the winter of 2009 and staged numerous Tea Parties across the United States on April 15, 2009, the reaction of the liberal elite in the media and in politics was uniform.  It was contemptible and it was anyway, as Nancy Pelosi said, astroturf.



That is, the demonstrations were ginned up by the Republican Noise Machine and were not authentic grass-roots political activism.



Now that the Left has taken to the streets in the Occupy Wall Street movement, the Right is quick to discover a guiding hand in the movement from the Obama campaign and from labor unions.



Who is right?   Who knows?



All I can say is that the Tea Party activism was a surprise to me.  In the winter of 2009 I experienced the Republican/conservative coalition preparing to hunker down, ready to compromise as necessary with a popular new president and his agenda.  I think the "Republican establishment" was initially taken by surprise and confused by the Tea Party, and also worried that Tea Party extremism might compromise their ability to appeal to the moderate middle.



Yes, but what about the Koch brothers?  Yeah, well what about George Soros?



It makes good left-wing copy to conjure up a movement organized by the Koch brothers, but if you want reality, not a conspiracy theory, you have to recognize that the Koch brothers have been funding libertarian think tanks for decades, and were probably taken by surprise as much as anyone.  But once the Tea Party emerged, they were glad to help and organize.  Hey that's politics.



But what about the Occupy Wall Street crowd?  How close are they to the liberal establishment, and more significant, how close to the Obama campaign?



My guess is: a lot closer than anyone is letting on.  It's curious, isn't it, that the Occupy Wall Street demonstrations started just after the president committed to a class warfare campaign with a jobs bill that was designed to be indigestible to Republicans.



I'm not arguing for a conspiracy here.  Its just that the relations among the various groups on the left are a lot closer than on the right.  It starts right with the notion that on the left politics is everything, and that the whole point of politics is to mobilize the marginalized and raise their consciousness with organizing.   That's the point of the president's brief internship as a "community organizer."



The bigger question is whether all this street activism will work?  That remains to be seen.  On the right we tend to believe that left-wing street activism is all about the sacred rituals of the "over" part of the over-under coalition we know as the Democratic Party.  Our liberal friends see themselves as altruistic and idealistic leaders of the marginalized and the exploited.  They do not stop to ask whether their enlistment of the poor into their political army is not a mere cynical exploitation of the poor to prop up liberal power.



What does the American people want?  Ask me in December 2012.