Even When Trump Inadvertently Does Something Right...

Jeremy Scahill is one of the best investigative journalists in the country. You might know his work, particularly on matters related to foreign policy, from The Nation or from The Intercept or from his books, The Assassination Complex: Inside the Government's Secret Drone Warfare Program or Dirty Wars: The World Is a Battlefield. Yesterday an early morning tweet storm may help people to understand their own mixed feelings about Trump's moves this week in regard to Syria and Afghanistan. Progressives want to end American involvement in those two tragic wars. But... Trump. Scahill:

1. I support withdrawing US troops from all these wars, overt and covert.
2. Trump is an unstable authoritarian who cannot be trusted.
3. “Mattis was an adult” is bullshit. He’s a hawkish war criminal.
4. It’s very telling that the war party in DC is furious.
5. This is an opportunity for progressive forces to assert an alternative vision for US foreign policy.
6. Trump is a crooked charlatan. But these withdrawals would represent a dent in the armor of the bipartisan war machine.
7. This chaos presents opportunity.

First off, who isn't critical of Trump's wag the dog motives in Syria? It's perfectly legitimate for anti-war progressives to criticize him and what's left of his tattered and corrupt regime for a lack of coherent strategy in regard to what apsses for a foreign policy. That's different from the pro-Military Industrial argument news outlets-- just watch MSNBC-- are making. Glorifying Mattis just because he called out Trump is as much a mistake as is glorifying U.S. policy of engaging in endless wars.

Remember, Bernie would also be withdrawing U.S. troops from the Middle East (albeit within a more coherent and clear policy agenda).

As soon as Trump made his announcement this week, Win Without War director Stephen Miles issued a statement that helps speak to how progressives looks at Trump's troop withdrawals.

Since the beginning of the conflict in Syria, the United States has gotten its response wrong every step of the way, and Donald Trump’s latest moves are no exception.

From day one, Win Without War has opposed a U.S. military response to a crisis with no military solution, and we continue to support the full withdrawal of American military personnel from Syria. However, Donald Trump’s plan to declare ‘victory’ and walk away from an ongoing humanitarian catastrophe-- one that the U.S. in part helped create-- is reckless, shortsighted, and wrong. Even worse, given that just yesterday a federal court judge chastised Donald Trump’s first National Security Advisor for ‘selling out our country’ to Turkey, we are left wondering what secret deals and backroom arrangements with Turkey and other major players in Syria may actually be driving this Administration’s new plans in Syria.

...When Congress reconvenes in January, it must conduct the basic oversight of Donald Trump’s foreign policy that under Republican House and Senate majorities has thus far failed to provide. Congress must connect the dots between Trump’s web of foreign ties and questionable deals with a growing axis of authoritarian dictators. Any oversight initiative must also shine a light on the continued violence, instability, and human suffering caused by our military misadventures in nearly every corner of the globe.

The people of Syria have suffered immensely for our nation’s repeated fueling of war and limited efforts at peace. Now, as we bring our service-members home from the battlefield, we must not continue to repeat those very same mistakes.

Remember, the Republicans turning on Trump over Syria, Afghanistan and Mattis-- like Lindsey Graham, Kinzinger and Marco Rubio-- are not our friends and are not advocates of good policy. When someone who votes for all TRump's right-wing crap, like Ben Sasse (R-NE), says "This is a sad day for America," he means a sad day for the Military Industrial Complex he represents.

Yesterday, Eli Lake, in a column for Bloomberg News, wrote that "Trump may not know it yet, but his presidency is collapsing. [His] supporters may still feel unfazed, even confident. Trump has burned through two chiefs of staff, two national security advisers, a secretary of state and an attorney general in less than two years. He has survived. This resignation, though, is different... Mattis provided Trump with a powerful shield. Whatever you thought of his views, Mattis embodied military virtue and the spirit of public service. As long as he served the president, reluctant Republicans could point to the Pentagon and say: If Mattis supports Trump, then so do I. They can no longer do that." Well... we'll see if they do or they don't-- and for how long. My expectation from Republicans is... low.

Philip Rucker and Bob Costa reported in that Washington Post yesterday that Trump's decisions and conduct have led to a fracturing of his coalition. "Hawks condemned his sudden decision to withdraw U.S. troops from Syria. Conservatives called him a 'gutless president' and questioned whether he would ever build a wall. Political friends began privately questioning whether Trump needed to be reined in... Said one former Trump administration official: 'There’s going to be an intervention. Jim Mattis just sent a shot across the bow. He’s the most credible member of the administration by five grades of magnitude. He’s the steady, safe set of hands. And this letter is brutal. He quit because of the madness.'"

I hope you saw Marcy Wheeler's post yesterday, We Will Not Get Peace From The People Who Dismember Dissidents Alive. She warned that while she appreciates that Scahill really does capture this ambivalence [in that tweet storm], "far too many others welcoming a potential troop withdrawal are not recognizing the complexity of the moment. While we don’t yet fully understand the complex dynamics that led to it, Trump decided to withdraw from Syria during a phone call with a man who has spent two months embarrassing Trump, Trump’s son-in-law, and the corrupt Saudi prince whose crackdown Trump has enthusiastically backed by releasing details of how that prince lulled an American resident dissident to a third country so he could be chopped up with a bone saw while still breathing. And even while Erdogan was embarrassing Trump with those details about Khashoggi’s assassination, he was pressuring Trump to extend the same favor to him by extraditing Fethullah Gulen so he could be chopped up in some grisly fashion."

She asks how Trump's fondness for fossil fuels and arms sales can be countered and insists that "no withdrawal is going to lead to 'peace' or even a retreat of the US empire so long as Trump exacerbates an already unforgivable US addiction to fossil fuels and reliance on arms sales. Particularly with Saudi Arabia but also with Turkey, Trump has excused his fondness for authoritarianism by pointing to arms sales. And on these issues, Trump actually agrees with the “war party in DC,” which will make it far harder to counter them. Yes, many of the new Democrats entering Congress-- most of all Alexandria Ocasio-Cortez-- don’t have these horrible habits. So what can you do to make sure her Green New Deal not only isn’t squelched by party leadership, but is seen as the alternative to Trump by centrists?"

Or Is Mueller's Investigation The Real Distraction-- From Total Political Realignment?

According to Emptywheel, tomorrow is going to be a big day for Señor Trumpanzee and his world. Center stage: Robert Mueller, not whispers and suppositions. If Marcy is right-- and she usually is-- Mueller is ready to reveal the first cards in his case for conspiracy. I guarantee you that will be bigger news than the release last month of Thomas Piketty’s working paper about rising inequality and the changing structure of political conflict, even if Picketty’s work is of far more consequence.

What Piketty is attempting to do-- by using post-electoral surveys from France, Britain and the U.S.--  is to document “a striking long-run evolution in the structure of political cleavages. In the 1950s-1960s, the vote for left-wing (socialist-labour-democratic) parties was associated with lower education and lower income voters. It has gradually become associated with higher education voters, giving rise to a ‘multiple-elite’ party system in the 2000s-2010s: high-education elites now vote for the ‘left,’ while high-income/high-wealth elites still vote for the ‘right’ (though less and less so). He argue that this can contribute to explain rising inequality and the lack of democratic response to it, as well as the rise of ‘populism.’”

He also discusses “the origins of this evolution (rise of globalization/migration cleavage, and/or educational expansion per se) as well as future prospects: ‘multiple-elite’ stabilization; complete realignment of the party system along a ‘globalists’ (high-education, high-income) vs ‘nativists’ (low- education, low-income) cleavage; return to class-based redistributive conflict (either from an internationalist or nativist perspective). Two main lessons emerge. First, with multi-dimensional inequality, multiple political equilibria and bifurcations can occur. Next, without a strong egalitarian-internationalist platform, it is difficult to unite low- education, low-income voters from all origins within the same party.” Here’s how he described the paper in his introduction.

Income inequality has increased substantially in most world regions since the 1980s, albeit at different speeds. This process of rising inequality came after a relatively egalitarian period between 1950 and 1980, which itself followed a long sequence of dramatic events-- wars, depressions, revolutions-- during the first half of the 20th century. Given the recent evolution, one might have expected to observe rising political demand for redistribution, e.g. due to some simple median-voter logic. However so far we seem to be observing for the most part the rise of various forms of xenophobic “populism” and identity-based politics (Trump, Brexit, Le Pen/FN, Modi/BJP, AfD, etc.), rather than the return of class-based (income-based or wealth-based) politics. Why do democratic and electoral forces appear to deliver a reduction in inequality in some historical contexts but not in others? Do we need extreme circumstances in order to produce the type of Social-Democratic/New-Deal political coalition that led to the reduction of inequality during the 1950-1980 period?

This paper attempts to make some (limited) progress in answering these complex questions. The general objective is to better understand the interplay between long- run inequality dynamics and the changing structure of political cleavages. In order to do so, I exploit in a systematic manner the post-electoral surveys that were conducted after nearly every national election in France, Britain and the United States over the 1948-2017 period. I construct homogenous long-run series on the changing structure of the electorate in these three countries, i.e. who votes for which parties or coalitions depending on different dimensions of inequality (income, wealth, education, age, gender, religion, foreign or ethic origins, etc.). For instance, I show that the relation between voting behavior and income percentile is generally stronger at the top of the distribution than within the bottom 90%, and that the wealth profile has always been much steeper than the income profile. To my knowledge, this is the first time that such consistent series are established in a long run and comparative basis.

Next, and most importantly, I document a striking long-run evolution in the multi-dimensional structure of political cleavages in these three countries.

In the 1950s-1960s, the vote for “left-wing” (socialist-labour-democratic) parties was associated with lower education and lower income voters. This corresponds to what one might label a “class-based” party system: lower class voters from the different dimensions (lower education voters, lower income voters, etc.) tend to vote for the same party or coalition, while upper and middle class voters from the different dimensions tend to vote for the other party or coalition.

Since the 1970s-1980s, “left-wing” vote has gradually become associated with higher education voters, giving rise to what I propose to label a “multiple-elite” party system in the 2000s-2010s: high-education elites now vote for the “left”, while high-income/high-wealth elites still vote for the “right” (though less and less so).

I.e. the “left” has become the party of the intellectual elite (Brahmin left), while the “right” can be viewed as the party of the business elite (Merchant right).

I show that the same transformation happened in France, the US and Britain, despite the many differences in party systems and political histories between these three countries.

I argue that this structural evolution can contribute to explain rising inequality and the lack of democratic response to it, as well as the rise of “populism” (as low education, low income voters might feel abandoned). I also discuss the origins of this transformation (rise of globalization/migration cleavage, and/or educational expansion per se) as well as future prospects: “multiple-elite” stabilization; complete realignment of the party system along a “globalists” (high-education, high-income) vs “nativists” (low-education, low-income) cleavage; return to class-based redistributive conflict (either from an internationalist or nativist perspective). Recent elections held in the three countries in 2016-2017 suggest that several different evolutions are possible: France-US illustrate the possibility a shift toward the “globalists” vs “nativists” cleavage structure (see Figures 2e-2f for the case of France); while Britain supports the “multiple-elite” stabilization scenario (and possibly the return to class- based internationalism, though this seems less likely).

Two general lessons emerge from this research. First, with multi-dimensional inequality, multiple political equilibria and bifurcations can occur. Globalization and educational expansion have created new dimensions of inequality and conflict, leading to the weakening of previous class-based redistributive coalitions and the gradual development of new cleavages. Next, without a strong egalitarian- internationalist platform, it is difficult to unite low-education, low-income voters from all origins within the same coalition and to deliver a reduction in inequality. Extreme historical circumstances can and did help to deliver such an encompassing platform; but there is no reason to believe that this is a necessary nor a sufficient condition.

This work builds upon a long tradition of research in political science studying the evolution of party systems and political cleavages. This literature was strongly influenced by the theory of cleavage structures first developed by Lipset and Rokkan (1967). In their seminal contribution, Lipset-Rokkan stressed that modern democracies are characterized by two major revolutions-- national and industrial-- that have generated four main cleavages, with varying importance across countries: center vs periphery; state vs churches; agriculture vs manufacturing; workers vs employers/owners. Their classification had an enormous influence on the literature. One limitation of this work, however, is that Lipset-Rokkan largely ignore racial/ethnic cleavages, in spite of their importance in the development of the US party system.

In the present paper, I argue that the particularities of US party dynamics (whereby the Democratic party very gradually shifted from the slavery party to the poor whites party, then the New Deal party, and finally the party of the intellectual elite and the minorities), which often seem strange and exotic from a European perspective (how is it that the slavery party can become the “progressive” party?), might be highly relevant to understand the current and future transformation of cleavages structures in Europe and elsewhere.

Subsequent research has contributed to extend the Lipset-Rokkan framework. In particular, a number of authors have argued that the rise of universalist/liberal vs traditionalist/communitarian values since the 1980s-1990s, following in particular the rise of higher education, has created the condition for a new cleavage dimension, and the rise of the “populist right” (see e.g. Bornshier, 2010). My findings are closely related to this thesis. In particular, I stress the interplay between income, education and ethno-religious cleavages, and the commonalities and differences between US and European trajectories in that respect (while Bornshier focuses on Europe).

This work is also related to the study of multi-issue party competition,5 and to a number of papers that have recently been written on the rise of “populism”.6 However, to my knowledge, my paper is the first work trying to relate the rise of “populism” to what one might call the rise of “elitism”, i.e. the gradual emergence (both in Europe and in the US) of a “multiple-elite” party system, whereby each of the two governing coalitions alternating in power tends to reflect the views and interests of a different elite (intellectual elite vs business elite).

More generally, the main novelty of this research is to attempt to build systematic long-run series on electoral cleavages using consistent measures of inequality (especially regarding education, income, wealth). In particular, by focusing upon differentials in voting behavior between deciles of income, wealth or education (relatively to the distribution of income, wealth or education prevailing for a given year), it becomes possible to make meaningful comparisons across countries and over long time periods, which is not possible by using occupational categories (which the literature has largely focused upon so far).

The present paper should be viewed as a (limited) step in a broader research agenda seeking to analyze in a more systematic manner the long-run interplay between inequality dynamics and political cleavages structures. The post-electoral survey data that I use in this paper in order to cover the case of France, the US and Britain over the 1948-2017 period has obvious advantages: one can observe directly who voted for whom as a function of individual-level characteristics like gender, age, education, income, wealth, religion, etc. Post-electoral surveys now exist for a large number of countries, at least for recent decades. They could and should be used in order to test whether the same patterns prevail, and to better understand the underlying mechanisms. The advantage of looking at only three countries is that I am able in this paper to analyze these cases in a relatively detailed manner. However it is clear that in order to go further one would need to add many more country studies.

Post-electoral surveys also have major drawbacks: they have limited sample size,8 and they do not exist before the 1940s-1950s (and in some countries not before the 1980s-1990s). The only way to analyze changing inequality patterns and political cleavages from a longer run perspective (i.e. going back to electoral data from the 1870s onwards, or before) is to use local-level electoral data together with local-level census data and/or other administrative or fiscal data providing indicators on the socio-demographic and economic characteristics of the area. This kind of data exists in pretty much every country where elections have been held. It is only by collecting and exploiting this material that we can hope to reach a satisfactory understanding of the interplay between inequality dynamics and cleavages structures.

…Maybe unsurprisingly, the massive increase in abstention, which took place in all three countries between the 1950s-1960s and the 2000s-2010s, arose for the most part within the lower education and lower income groups. A natural interpretation is that these voters do not feel well represented in the “multiple-elite” party system.

The paper is over 60 pages long, so let me skip to a portion that deals with the U.S., which Piketty points out is the “best existing example of a two-party system (Democrats vs Republicans),” which he warns “is nevertheless relatively exotic and mysterious for many outside observers in Europe and elsewhere: how is it that the Democrats, which were the pro-slavery party in the 19th century, gradually became the New-Deal party and the “progressives” party over the course of the 20th century?”

By combining our results on changing US political cleavages by education and by income, we obtain the following picture. Whether we measure education cleavages by comparing university graduates vs non-university graduates, or by comparing top 10% vs bottom 90% education voters, which is probably most meaningful, we find the same broad evolution of the party system in the US. Moreover the evolution is very similar to that observed in France. Back in the 1940s-1960s, the US party system could be characterized as a class-based system, in the sense that low education and low income voters supported the same party (the Democrats), while high education and high income voters supported the other party (the Republicans). The US have gradually moved toward a “multiple-elite” party system, whereby the high-education elite votes for Democrats and the high-income elite votes for the Republicans.

In the same as way for France, it is unclear at this stage whether this “multiple-elite” party system will persist, or whether it will gradually evolve toward a complete realignment of the party system along “globalists” (high education, high income) vs “nativists” (low education, low income) lines. The 2016 election clearly seems to point in this direction: for the first time, the Democratic vote was associated both to high education and high income voters. It could be however that this is largely due to a specific Trump factor, and that the high-income elite will return to Republicans in the near future (of course this will depend on the choice of Republican and Democratic candidates)… [O]ne can interpret the unusual 2016-2017 electoral events as the consequence of a long-run transformation of the party system, which is now facing different possible trajectories: stabilization of the “multiple-elite” party system; “globalists” vs “nativists” realignment; return to some new form of class-based system.

Trump Atrocities — Gilding the Swamp

Donald Trump dining on Mitt Romney's frogs legs (click to enlarge)

by Gaius Publius

This whole next administration, all of its people and all of its work, is going to be a horror show of Dantesque proportions. Even if Democrats were organized against it — which I'm certain they won't be — and if they bent every ounce of their will and energy to keep it from being "normalized" in the public's perception — which I'm certain they won't do — where would they begin to fight? They'd have to fight it all.

Not one nomination is acceptable to any pro-worker, pro-rights-of-the-people party. Not one. Which means we'll likely have the twin spectacles, played out in the news, of Trump's destruction of everything a Sanders-populist holds dear, plus the normalization of that destruction by those whom we may have thought were on our side.

Elon Musk: Normalizing a Fellow Billionaire

For example, Elon Musk, he of the ''save the climate" car, is doing this:

WASHINGTON — Elon Musk, the founder and chief executive of SpaceX, has joined a group created by President-elect Trump to provide advice on the economy for the incoming administration.

The addition of Musk to the President's Strategic and Policy Forum came as he and a number of other executives from technology companies, including Blue Origin founder Jeff Bezos, met with Trump and his senior advisors in New York Dec. 14 to discuss economic issues.

The forum, established by Trump Dec. 2 with an initial roster of 16 current and former executives, is intended to serve as an advisory board on economic issues for the incoming administration. "The Forum is designed to provide direct input to the President from many of the best and brightest in the business world in a frank, non-bureaucratic and non-partisan manner," the office of President-elect Trump said in a Dec. 14 statement.

And that's how it's done. Elon Musk, normalizing Trump.

Gilding the Swamp

For this edition of Trump Atrocities, I want to call your attention to something Marcy Wheeler found and named, and from whom I stole the title of this piece.

As Dan Kopf of Quartz points out, Trump’s 17 cabinet-level picks have more money than a third of American households combined. Rule by the rich indeed. Or, to use Wheeler's phrase, 'gilding the swamp."

Kopf writes:

The 17 people who US president-elect Donald Trump has selected for his cabinet or for posts with cabinet rank have well over $9.5 billion in combined wealth, with several positions still unfilled. This collection of wealth is greater than that of the 43 million least wealthy American households combined—over one third of the 126 million households total in the US.

Affluence of this magnitude in a US presidential cabinet is unprecedented. ...

Even if we just compare the wealth of Trump’s cabinet to the median household, it is still an impressive concentration of riches. It would take about 120,000 households with the the United States median net worth of about $83,200 to match the wealth of just the four richest members of Trump’s cabinet—Betsy DeVos, Wilbur Ross Jr., Linda McMahon, and Rex Tillerson.

Four appointees with the wealth of 120,000 median households. The whole cabinet, so far, with the wealth of the bottom third of all Americans. Unprecedented indeed. The swamp may never stop filling, but they're lining it with gold to match the gilded toilets that feed it.

I wonder how many of Americans in that "lower third in wealth" category were Trump voters — and might they be persuaded to switch if a real progressive were on the menu next time?

All this without touching on the climate problem under Trump. Strap yourselves in, folks. We're in for a bumpy ride.

And as you're holding onto your seats — and your wallets and purses — remember, it didn't have to be this way.

GP
 

Two Ways of Looking at U.S. Industrial Policy

U.S. industrial policy, as practiced (click to enlarge; source)

by Gaius Publius

I was of two minds,
Like a tree
In which there are two blackbirds.
    (with apologies to Wallace Stevens)

Much of the debate around U.S. trade policy — or "trade" policy, since so much of it really concerns capital flow and "investor rights" than it does actual trade — is really an attempt to define and direct U.S. industrial policy.

Here's one definition of "industrial policy":

The industrial policy of a country, sometimes denoted IP, is its official strategic effort to encourage the development and growth of part or all of the manufacturing sector as well as other sectors of the economy.[1][2][3] The government takes measures "aimed at improving the competitiveness and capabilities of domestic firms and promoting structural transformation."[4] A country's infrastructure (transportation, telecommunications and energy industry) is a major part of the manufacturing sector that often has a key role in IP.

Ignore the part about "aimed at improving the competitiveness of domestic firms," since industrial policy can have other, more pernicious goals, as you'll see shortly. Industrial policy certainly promotes "structural transformation" when it acts. In the same way, by inaction industrial policy leaves in place structures it prefers not to disturb.

In short, "industrial policy" is what a nation does or does not do to structure its manufacturing capability — its ability to produce good domestically, with domestic labor — as it wishes. In other words, the goal of a nation's industrial policy is to enable the wishes of the nation's leaders, whatever they are, even when those wishes are other than "improving the competitiveness of domestic firms."

Let's look at two definitions of current U.S. industrial policy, in particular, mine and Marcy Wheeler's. While quite different, these definitions are not mutually exclusive, since, as the piece quoted above points out, "Industrial policies are sector-specific." One (mine) deals largely with manufacturing for the privately financed consumer-based economy. Wheeler's deals largely with the publicly financed and supposedly military-based economy.

First my own definition, then Wheeler's.

U.S. Industrial Policy — Beggar the Nation to Enrich the Few

If you consider the effect (i.e., the goal as practiced) of U.S. industrial policy, you can't in good conscience say it's "aimed at improving the competitiveness of domestic firms," since what would improve that competitiveness (that is, bolster the competitiveness of goods manufactured domestically) is the kind of protectionism practiced during the first 200 years of the nation's history, explicitly argued by Alexander Hamilton and adopted under the George Washington administration.

The Washington administration, and every administration until Reagan's, had as a goal to increase the competitive success of the domestic manufacturing sector, the sector powered by U.S. labor, relative to both domestic (U.S.) markets and world markets. Under Reagan, and under every president since — Bush I, Clinton, Bush II, Obama — the U.S. manufacturing sector, or that part of it that services the consumer economy, has been systematically dismantled. (The arguments that this is true are legion, but for the short version, think NAFTA.)

Thus my definition of U.S. industrial policy as practiced:

Current U.S. industrial policy is to move our consumer manufacturing capability out of the country at the fastest possible rate and to hand the (untaxed) savings to billionaires, using corporations as a pass-through.

That is, the people who control U.S. government policy vis-à-vis the manufacture of consumer products make sure that the nation's manufacturing worker class is made poorer so that the savings in labor cost can go into the pockets of the corporate ownership and financier classes. They do this to the greatest extent possible, and at the fastest rate allowable under current conditions.

They do this by action — through treaties like NAFTA, for example, as well as numerous bilateral agreements — and by inaction, through tax policies that don't interrupt, or in many cases accelerate, the wealth drain out of the worker class (including white collar workers) into the pockets of the international wealthy.

Regarding U.S. industrial policy for the consumer manufacturing sector, a person would be hard put, I think, to disagree. Which is why I wrote at the start of this piece that the "wishes" or goals of a nation's policy don't necessarily have to be beneficial to its manufacturing sector. In this case, the U.S. beggars (dismantles) its manufacturing sector for another goal — the enrichment of those who control the political and political-messaging processes.

The F-35 As U.S. Industrial Policy

Marcy Wheeler takes another approach to determining what U.S. industrial policy is, and hits the nail on the head, at least as regards the military-industrial-congressional sector. Wheeler discusses that here (my emphasis):

Our Industrial Policy Is the F-35

...I actually think the [Carrier] deal ought to elicit a more interesting discussion of industrial policy — the kind of systematic intervention that [economist Jared] Bernstein talks about that might actually do something about the hollowing out of America’s manufacturing base.

Such a discussion has long been forbidden in American political discourse, in part because the same economists pretending such whack-a-mole bribes haven’t become the norm in American political life also pretend that an unfettered “free” market (always defined to include mobile capital and goods, but not labor) will benefit everyone.

Yet even during the period when any discussion of industrial policy has been forbidden, we’ve had one.

Our industrial policy consists of massive US [taxpayer-financed] investments in manufacturing war and intelligence toys that we then sell to foreign governments. When done with Middle Eastern petro-states like Saudi Arabia, that trade goes a long way to equalize our foreign trade deficit, but it contributes directly to instability that then requires us to intervene and build more war toys. That investment in war leads, in turn, to a disinvestment in publicly funded infrastructure that could also provide jobs in the heartland.

The most obvious symbol of our unacknowledged industrial policy is the F-35...

Wheeler goes on to add:

Our current industrial policy, you see, feeds so few prime contractors that they are virtually immune from the competition that might pressure them to deliver quality goods. Which leads, in turn, to rework, contract overruns, and contractors walking out of the building with our government’s most closely guarded secrets, all with no consequences.

Let’s stop pretending (as this piece does) that America’s manufacturing, increasingly dominated by the production of war toys, exists in a a real market, shall we?

Which is where our views converge:

Once we do that, we might begin to address the diseases of our defense contracting and — more importantly — rediscover the value of investing in other kinds of manufacturing that our country needs to have. Justify these investments by some future defense need, I don’t give a damn (though there are military officials who will soberly explain the risks of the hollowing out of our manufacturing base). But invest in the technologies the US needs to stay competitive and retain a manufacturing base.

And there it is, two definitions of "U.S. industrial policy," one for manufacturers in the privately financed consumer sector and one for manufacturers in the tax-payer financed military-industrial-congressional sector.

Interesting how the source of the money used — whether it comes from the public pocket (yours and mine) or the pocket of those who own the business — determines where the manufacturing occurs. It probably helps a lot that publicly financed manufacturing includes a very generous profit guarantee (which Wheeler also discusses), a guarantee not available to private corporations.

These must guarantee their profit — and their mahogany suite compensation and "golden parachutes" packages — by taking from tax-payers in another way. They take from them directly, in other words, in the form of lost wages, since they can't use the IRS as an extraction tool.

GP
 

The president and Michigan's Dem congresspeople give MI Gov. Rick Snyder a crash course on the nefarious true purpose of "right to work" laws

Michigan State Rep. Tim Greimel (D-Auburn Hills) explains what Gov. Rick Snyder apparently doesn't understand: how dreadful "right to work" laws like the one headed for the governor's desk actually work. (Hat tip to Marcy Wheeler via Greg Sargent.)

"These so-called right to work laws -- they don't have anything to do with economics. They have everything to do with politics. What they’re really talking about is, giving you the right to work for less money. . . .

"We don't want a race to the bottom. We want a race to the top. America's not going to compete based on low skills, low wage, no workers rights. That's not our competitive advantage. . . . "

-- President Obama today in Michigan, quoted by Greg Sargent

by Ken

As soon as tomorrow, Michigan Gov. Rick Snyder is likely to sign the dreadful so-called "right to work" law rammed through the imbecilized state legislature. Today, visiting the state, President Obama left no doubt where he stands, and, says Greg Sargent in "Obama drops the hammer on Michigan 'right to work' push":

Obama hit all the right notes. He pointed out that "right to work" laws are not about boosting the economy, but about crippling the political opposition; that they are not about freedom, but about weakening workers' ability to organize for better pay; that unions have long played a critical role in providing a path to the middle class; and that investing in a trained, well represented work force is the way to produce a broadly shared prosperity — rather than a 'race to the bottom' -- that is better for the country as a whole.

Greg quotes these chunks of the president's speech:

President Obama today, speaking after touring the Daimler Detroit Diesel Plant in Redford, MI

What we shouldn't be doing is trying to take away your rights to bargain for better wages. These so-called right to work laws -- they don't have anything to do with economics. They have everything to do with politics. What they're really talking about is giving you the right to work for less money. You only have to look to Michigan, where workers were instrumental in reviving the auto industry, to see how unions have helped build not just a stronger middle class but a stronger America. [...]

We don't want a race to the bottom. We want a race to the top. America's not going to compete based on low skills, low wage, no workers rights. That's not our competitive advantage. There's always going to be some other country that can treat its workers even worse.

So the president got it right, says Greg, but even so, "It's unclear how much of an impact this will have on the ongoing battle in Michigan."

There were already signs that Governor Rick Snyder didn't fully understand how unions work and what the "right to work" laws speeding towards his desk actually do. In a private meeting today, top Michigan Democrats reiterated to him that labor and Dems simply want to ensure that unions have the right to collect fees from non-union members who benefit from their collective bargaining along with union members. And word is that Governor Snyder prides himself on being a pragmatic problem solving type, rather than an ideologue. So it can't hurt to have the President come into his state and tell the truth about these laws in such a high profile way, arguing that "right to work" isn't really about budgeting and won't help us innovate, compete, or move the country forward.

So: Good for Obama for saying what needed to be said. We'll see if it makes a difference.

Note that Michigander Marcy Wheeler has a somewhat different take on Governor Snyder's fuzzy understanding of right-to-work laws. Marcy is perhaps less inclined to take at face value the governor's self-proclamation as being a pragmatic problem-solving type rather than an ideologue. (Is there any evidence for this, other than stuff the governor himself may have said?)

Greg's link about Governor Rick not fully understanding how unions work is to an Emptywheel post of Marcy's today, "Levin Brothers: Rick Snyder Doesn’t Understand How Unions Work," in which she refers to points made in a conference call by the Michigan Democratic senators and congressmen about their meeting with the governor this morning.

[T]he most interesting point that Senator [Carl] Levin made -- which his brother, Congressman Sander Levin elaborated on -- is that Snyder doesn't understand how unions work. "The Governor in his statement [last week] said it incorrectly," Sandy said, when he suggested workers would lose their job if they didn't join a union. "And today I still don't think he understands," Sandy continued. Congressman Levin went on to remind that the principle that workers could not be forced to join a union has been enshrined since he and then-Governor George Romney negotiated collective bargaining law back in 1965.

Marcy think she understands why the Michigan Dem legislators are couching this right-to-work hiccough as a wee problem of incomplete understanding on the governor's part.

I guess the Democrats wanted to do two things: treat his obviously false excuse for passing this as a good faith statement, and then to correct the lies that false excuse was based on. But also to shift the blame for the labor unrest that will come as a result of this law onto the Governor; because he went along with what Carl Levin called a "parliamentary gimmick" that will push this through as referendum-proof, Snyder will be responsible for the negative effect this will have on Michigan's economy.

Marcy's concerns about this strategy aren't limited to whether it will work.

[O]ne thing I didn't hear is a criticism of Snyder's vision for Michigan. Making MI a RtW state effectively embraces a vision of the state as Indiana or Mississippi or Bangladesh. Making MI a RtW state embraces the idea that we should be dumb labor, not innovative technology, just another entry in the race to be the cheapest, most desperate state.

I’m glad such key participants as Sandy Levin schooled Snyder on the last 50 years of MI history and what that history means for Snyder's decision tomorrow. But ultimately we need to be calling Snyder out for his terrible vision for the future of MI.

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Maybe President Obama has something else he'd rather be doing come January 2013?

Let's see if I got this right: They may have done lots of stuff that was immoral but apparently nothing illegal, because of loopholes that we fixed with Dodd-Frank (yeah, right!), and we know they didn't commit crimes 'cause, um . . . well, no, we didn't investigate exactly, but . . . ooh, got it! If they did, Attorney General Holder would have stuck it to them, or maybe still will stick it to them, but that's his job, nothing to do with the president.

by Ken

Obama on Bank Prosecutions: They Did Nothing Illegal, Only Found Loopholes That We Worked to Close

By: David Dayen Thursday October 6, 2011 8:55 am

For perhaps the first time, President Barack Obama was forced to explain why there have been no prosecutions of Wall Street executives for their fraudulent actions during the run-up to the financial crisis. Asked by Jake Tapper to explain this behavior, Obama basically suggested that most of the actions on Wall Street weren’t illegal but just immoral, and that his Administration worked to re-regulate the financial sector with the Dodd-Frank reform legislation.

“Banks are in the business of making money, and they find loopholes,” the President said. Apparently forging and fabricating documents to prove ownership of homes that are subsequently stolen from borrowers is now a loophole.

Many of the practices on Wall Street “weren’t necessarily against the law but they had a huge destructive impact,” said the President. The work of Bill Black, the Financial Crisis Inquiry Commission, the Senate Permanent Subcommittee on Investigations, and a host of other official studies, analyses, and even court cases cut against that. Just the other day, a new whistleblower lawsuit against banks for setting illegal fees against military personnel wasn’t joined by the Justice Department.

In a follow-up, the President said that “if somebody they violated laws on the books, they need to be prosecuted, and that’s the Attorney General’s job.” Of course, investigations have to actually be carried out, and the President’s Justice Department has been at the lead of a foreclosure fraud settlement which would bail out banks that would otherwise owe in the trillions for fraudulent practices with the origination and securitization of loans, for a pittance of a sum. Only the work of a few Justice Democrats have put a stop to this. . . .

It's because this is so transparently silly that I'm left wondering if the president really doesn't want to stay on the job past January 2013, if maybe he has something else he'd rather be doing. For example, maybe the demands of the job have proved so onerous that he's really looking to be able to spend more time with his family.

Fortunately, the indefatigable D-Day, who's been all over this story, has the stamina to respond seriously to this latest nonsense from the White House. Predictably, the similarly indefatigable Marcy Wheeler is also on the case, in "Why Is Thomas Perrelli Negotiating a Settlement If the Banksters Didn’t Commit Fraudulent Actions?":

[President Obama's] comments are funny for a number of reasons. Apparently, the President can’t go around saying “prosecute somebody,” but he can go around saying, “assassinate somebody.”

More curiously, though, he insists that if someone has engaged in “fraudulent actions, they need to be prosecuted.”

FHFA [the Federal Housing Finance Agency] has sued 18 banks, a number of them for fraud, most of them in federal court. As part of those suits, it has sued a number of named individuals. DOJ, however, seems to have no interest in all those entities accused of fraud.

More troubling still, mortgage servicers have, in sworn depositions, admitted to fraud of a variety of types.

And yet Associate Attorney General Thomas Perrelli is busy trying to craft a settlement -– not a prosecution –- with those who engaged in this fraud. (And in the wake of CA’s withdrawal from the settlement talks, the banks are crowing that DOJ is still going to sign such a deal.)

The Administration needs to be asked not just why no big banksters have been prosecuted, but also why in the face of massive fraudulent actions, DOJ is choosing to settle, rather than prosecute.

Meanwhile a colleague raises what seems to me an exceedingly interesting question about the (im)probability of no-law-breaking in the economic meltdown and mortgage-industry scandals: How does it come about that 1100-plus bankers were subjected to criminal prosecution in the '80s S&L scandal and next to none in this much larger scandal? He also raises the question of civil liability. Oh, I forgot these are questions for the AG, not the president.

D-Day's final point in the above-cited morning post is worth noting:

Obama also added this, approximately: “I expended a lot of political capital to keep the banks afloat, and I have the scars to prove it. And I still think it was the right thing to do, because otherwise our economy would have been worse off.” This is the President taking ownership of TARP, which did not pass under his Presidency but which he whipped as a candidate for President in 2008. He took ownership of the extraordinary financial support given to banks as they teetered on the verge of collapse. And this is a central grievance of the protesters on Wall Street and across the country. [Emphasis in the original.]

It's looking to me more and more like the president's family will be getting to spend a lot more time with him, whether they want to or not.

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We think of them as crazies, but you know, the people who wander in and out of the Family's lodge house on C Street have clout in D.C.

A lot of jaws dropped last night when Rachel Maddow presented this segment on the fundamentalist sect The Family, which turns out to provide a creepy linking factor between those princes of "family values" NV Sen. John Ensign and SC Gov. Mark Sanford -- and that curious, cranky, and crazy loon and noodge, OK Sen. Tom Coburn.

by Ken

Even though the Family isn't totally unknown, I know a lot of people whose eyes were popping out during this segment about its connections to the Ensign and Sanford scandals. Among Rachel's guests was Jeff Sharlet, a contributing editor for Harper's and Rolling Stone who actually infiltrated the Family and literally wrote the book on it, The Family: The Secret Fundamentalism at the Heart of American Power, now out in paperback.

The Family, first published last year, is yet another of those books from recent years that are by all accounts utterly splendid, which I've forlornly added to the "must read" list that I know I'll never get to. By way of summary, Jeff posted the jacket copy on his blog when the book was published, in February 2008:

They are the Family—fundamentalism’s avant-garde, waging spiritual war in the halls of American power and around the globe. They consider themselves the new chosen, congressmen, generals, and foreign dictators who meet in confidential cells, to pray and plan for a “leadership led by God,” to be won not by force but through “quiet diplomacy.” Their base is a leafy estate overlooking the Potomac in Arlington, Virginia, and Jeff Sharlet is the only journalist to have written from inside its walls.

The Family is about the other half of American fundamentalist power—not its angry masses, but its sophisticated elites. Sharlet follows the story back to Abraham Vereide, an immigrant preacher who in 1935 organized a small group of businessmen sympathetic to European fascism, fusing the Far Right with his own polite but authoritarian faith. From that core, Vereide built an international network of fundamentalists who spoke the language of establishment power, a “family” that thrives to this day. In public, they host prayer breakfasts; in private they preach a gospel of “biblical capitalism,” military might, and American empire. Citing Hitler, Lenin, and Mao, the Family's leader declares, "We work with power where we can, build new power where we can't."

Sharlet’s discoveries dramatically challenge conventional wisdom about American fundamentalism, revealing its crucial role in the unraveling of the New Deal, the waging of the Cold War, and the no-holds-barred economics of globalization. The question Sharlet believes we must ask is not “What do fundamentalists want?” but “What have they already done?”

With regard to the political connections popping out now, our esteemed colleague Marcy Wheeler has been exploring the Ensign and Sanford ties to the Family lodge house on C Street: "Did the Ensign Confrontation over His Affair Take Place at a 'Family' Gathering?" (June 19), "Did 'the Family' Force Sanford to Ditch His Mistress?" (June 24), and "WaPo Discovers C Street" (June 26).

The infamous Family house on C Street

SATURDAY UPDATE: RACHEL DOES ANOTHER SEGMENT
ON THE FAMILY, WITH JEFF SHARLET RETURNING

And it turns out that what I've been calling the Family's C Street "lodge house" is actually . . . a church!

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