A Thought or Two About #occupywallstreet

As the Occupy Wall Street folks in Zuccotti Park move into winter, circumstances are about to force a big decision on them--whether to tough it out through a long miserable New York winter, or find a reason to disband, which would almost certainly spark a similar disbanding at many if not all of the other Occupy sites.  So as the movement reaches this pivotal moment, it's worth asking what they've accomplished, if anything.

I hear two principal complaints about the protestors (aside from the boringly obvious "hippies having sex in the park" blather): first, that the OWS people have too many demands, or incoherent demands; and second, that all they're doing is complaining, they're not doing anything to present possible solutions.  So let's deal with the question of incoherence.

OWS is a deliberately-disorganized mass protest that began in New York and then spawned spinoffs across the globe.  Their essential message has always been crystal clear: they were there to occupy Wall Street because the actions of Wall Street have done so much, globally, to wreck the world economy, drive millions of people out of work, leave unknown thousands of people homeless, etc.  Wall Street greed, which is intended to represent absurd levels of income inequality, is a cancer on the body politic, and a lot of people aren't prepared to just sit idly by and be victimized anymore.  (Insert the obvious quote from Network here.)  Without even paying much attention to OWS when it first started, I understood all of this perfectly well.

But of course it's a mass movement, deliberately without spokespeople, and as any mass movement becomes truly massive, the bandwagon effect happens and people start to show up with a boatload of crazy-time.  And because there are no spokespeople, any random nitwit in the crowd is seen as just as valid as anyone else.  So while there have in fact been plenty of coherent statements made about OWS's goals, there have also been just as many interviews with chowderheads who have no business discussing a recipe for chowder, let alone a global movement about income inequality.  And every time a moron is handed a microphone, political opponents gleefully point fingers and start shouting about the incoherence of the movement itself.  (The same is true of the various Tea Party gatherings, of course.  They have their fair share of nitwits and chowderheads as well, and certainly their opponents have done their fair share of finger-pointing and shouting.)

Let's be clear, then.  Here is a moron.

Here is a non-moron.  There's a difference.

Much more interesting, though, is the criticism that OWS doesn't offer any solutions.  And I find it interesting because it ties in with Story Theory, something I happen to be rather fond of.  What I'm talking about boils down to this: there's an idea in the arts that a story doesn't have to solve a problem, it's enough to point out that a problem exists.  What an audience takes away from the story, once the problem has been presented to them, is their own business.  And the reason why this is important is because an issue can be talked about generally, but it has to be solved specifically--and each audience member has to find their own solution, something that works in their lives and takes into account their individual circumstances. I'll use one of my favorite examples: Dead Man Walking.  There's a movie that works very hard to present every side of the death-penalty issue, and in the end, the only "solution" is that the criminal is put to death.  But what that means in the world at large is left open.  "Think about this," the filmmakers are saying, "then make up your own mind."

The same argument can be made for Occupy Wall Street.  I can't say whether it's deliberate or not, but they've ended up crafting an open, enigmatic storyline in which a problem is cleary presented but solutions are not offered.  (Actually, some are--the reinstatement of Glass-Steagal has been advocated for from the beginning, and I think it's a very good idea.)  And the more the general public argues about what OWS stands for, the more we wonder what solutions OWS would like us to make, the closer we come to devising our own solutions--ones that will probably turn out to be far more creative and coherent than anything that could come from a bunch of cold, numb-fingered people shivering in a New York park.

A New Blog

Yes, it makes perfect sense. Because I’ve been doing such a great job keeping this blog updated. A second one, absolutely, nothing odd about that at all.

But here’s the thing.

The purpose of the bobblog is that it’s about whatever I want it to be about, at any given moment. If I want to complain about an astonishingly uncomfortable bench outside a great big building in Century City, I can do that; if I want to share excerpts from something I’m writing, I can do that; if I want to relate a comical misadventure in Ireland, I can do that too. But from time to time I wax political, and very often when I do, it’s because I feel that someone official is lying to us, for reasons that have nothing to do with good governance and everything to do with exploiting us for their own gain. This is the sort of thing that makes me good and angry, every time.

So I’ve decided to create a new blog. I’m going to call it Damn Lies, an obvious play on “lies, damn lies and statistics.” (Attributed to Disraeli but disputed; Mark Twain popularized its use.) This new blog will only ever be about one thing: the various ways we’re being lied to, and why. It will be political, economical and social, but it will almost certainly never relate how I locked myself out of my car or what those crazy siblings are up to.

Here’s a bit of overlap: the following will intro the new blog...

While writing my first novel I discovered my theme. Proust asserts that every writer only really has one theme, and every new work is a renewed attempt to express that theme, or a piece of it, better than the last work did. (If I could find the quote I would provide it, but those books are huge.) And so, while I was writing a novel that turned out to be about the way our lives are like stories that we tell to ourselves, I realized that this is the idea I will probably explore for my entire life. In my newest work, a play based on the infamous cadaver synod, I examine the ways institutions lie to us, but how the power of a good example, a good story, even if it’s just propaganda, can still transcend its manipulative origins.

Segue to this new blog.

As you can guess from the title, it will focus on the lies we’re told, and how those lies are used to exploit us. But from time to time I hope to also tell the other story, about how we’re able to, let’s just say, take a sad song and make it better. I’ll try to keep it light and entertaining, to restrain the impulse toward outrage can make an outrageous subject seem muddy and clouded, thereby weakening its impact. But when anger is called for, angry I will be.

So there you go. There’s more over on the blog, namely a quick examination of gift cards and calling cards and how they’re being used to swindle us. Just a little taste of what’s to come. Hope you’ll take a look.

Dear Mr. or Ms. Congressperson:

Hi. Just in case any of your staffers are roaming the web looking to see what we the people think about healthcare, I thought I’d let you know what’s going on in the head of this one particular voter/taxpayer.

I don’t have a healthcare horror story to relate--I just have the sort of story that millions of us have. When I opted for self-employment I discovered in real terms what it means to no longer have the leverage provided by small-group coverage: I had no negotiating power whatsoever, and was entirely at the whim of the insurance companies. I’ve written here already about what ensued, but suffice it to say that the merest hint of a possible malady on some sort of red-flag list they keep (an MRI that proved I didn’t have rheumatoid arthritis or any other kind of arthritis, just a shoulder problem that eventually resolved itself) was enough for various insurers to refuse to take me on. I spent weeks trying to arrange coverage until I finally went to the specialist, obtained copies of my medical records, and faxed them in to prove that dammit all, I wasn’t sick. At that point, sure, they were happy to see me and I got coverage.

Two months later they nearly doubled the premium price.

And, of course, after assuring me that I would be able to stay with my current doctor, who is fantastic (and thus my first priority in arranging coverage was to stay with this guy), I called said doctor’s office to make an appointment and was told “Oh no, he doesn’t take that coverage. Hasn’t for ten years now.”

So after being harassed, lied to and conned by the insurance companies, I find myself firmly believing that a public-option healthcare plan is essential. The insurance companies have created a cartel with monopoly powers, and if the government can come in and compete with them, well hell, seems to me that’s good old capitalism at work, and I can’t imagine why all those free-market Republicans would be against it.

Oh wait a second, yes I can imagine why. It’s the tale told by Wendell Potter, former head of corporate communications at CIGNA, who related to Congress and then again on Bill Moyers’s invaluable program, exactly how and why the insurance companies would rather see me die than lose an extra dollar in profit.

And so, Mr. or Ms. Congressperson, Mr. or Madame Senator, I’m putting you on notice. Specifically, Rep. Waxman, Senators Boxer and Feinstein, I’m putting you all on notice: I’m one of your voters, and I’ve decided that in the next election, I’m going to be a single-issue voter. If any of you vote against a healthcare option that includes a competitive public plan, I will in turn vote against you. I don’t care about the rest of your record or how effective you’ve been on this committee or that, I don’t care. Healthcare reform is essential for the long-term growth of the nation, and I firmly believe that a public option must be part of that reform. Give me this, or I’ll go find someone who will.

Thank you for your time. Or I should say, your staffer’s time.

The Failure of the Demos

Good article in Time this week about the current state of California’s budget woes. And I completely agree with Mr. O’Leary on one point in particular: the state of the State of California demonstrates the failure of direct democracy.

“Democracy” itself is a Greek word, from demos or demoi, originally a phrase for an Athenian municipality but a word that came to mean “the people” generally, combined with kratos, which means power. And since they basically invented the idea, the Greeks got the naming rights. Originally, democracy in Athens was pure and direct: when a vote was to be taken, every single citizen was compelled to go to the Pnyx. (And I do mean compelled: servants would roam the city with a rope dipped in red paint, and any citizen caught wandering the streets instead of going to the Pnyx was slapped with the rope, leaving a red stripe for all to see. They called it “ruddling.”)

But of course this direct democracy was only possible for two reasons: only about a third of the residents of Athens were considered citizens, and only adult males were allowed to vote, so it was possible to cram everybody onto a hillside for the requisite speeches and poll-taking. But even then there was something called the Council of 500, a group of leading citizens who actually made most of the day-to-day decisions. So even at its birth, there was already the necessary beginning of what we now call representational democracy.

Representational democracy is what we have here in most of the U.S. We elect people who go to the state capital or to Washington and who cast votes on our behalf. We cast one vote for a representative who then casts all the others. But in California, we have found a way around representational democracy and back to something very like the original direct form, through the referendum system.

It’s been a disastrous failure. Just about every issue gets submitted to the voice of the people through a ballot initiative, often through expensive special elections where they don’t wait for a national contest to be held but instead call for everyone to come out and vote again and again. This creates voter fatigue, where turnout gets lower and lower with each special election that gets added to the calendar (particularly when no one is getting ruddled...), so that only the people fiercely committed to a particular issue actually bother to turn out and vote. Which has the effect of actually perverting democracy, because only the ideologues end up having any voice. You can end up with some mighty strange laws that way.

But to make matters worse, when one side doesn’t get what it wants, it simply creates another referendum and submits that for a new vote a year or so further on. Exactly this is happening right now with the infamous Prop 8: having lost the first round, the opponents of Prop 8 are collecting signatures to submit the same issue to the voters again, as soon as possible, so that they can try different tactics and hopefully get a different outcome. But what’s to stop the people in favor of Prop 8, if they should lose the next round, from coming back themselves a year after that? Potentially there’s no end to it, not so long as the vote-count is close. So even though I happen to be on the side of the opponents of Prop 8 and would love to see that appalling decision done away with, I just don’t see where this endless referendum cycle does anyone any good.

But of course the classic example of failed direct democracy involves Prop 13, which limited property taxes (and thereby the amount of revenues the state can generate), and declared that the state legislature cannot pass any budget without a two-thirds majority. Combined, this double-eyed whammy means that the state has a nearly impossible time raising money when it needs it, unless it goes directly to the people and asks for the passage of a bond initiative. And as we saw in the last special election, the people are perfectly willing to vote for spending for new mandated services, but they are considerably less willing to vote for anything that even remotely sounds like higher taxes.

We the people want everything for nothing. It’s understandable, but it’s also horrific from a governance standpoint. And it is most definitely related to the Era of Excess we just lived through, where people spent money they didn’t have to buy things they didn’t need and then found themselves deeply in debt, and clueless as to how they got there. (Obviously that’s not the whole story--there were plenty of corporations perfectly happy to exploit our something-for-nothing weakness. But for now, I’m focusing on our own culpability, on why direct democracy has failed so badly.) The entire global economy rode a massive bubble of imaginary wealth and has now come crashing to the ground. Because you cannot have everything for nothing. TANSTAAFL, as Heinlein was fond of saying. (See? Sometimes I do agree with Milton Friedman.)

The result of all this in California was inevitable: at some point bills would come due that the state couldn’t pay, which is where we are right now, leading to what will surely be massive cuts to all sorts of state programs. And the inevitable result of that? Every group facing funding cuts is taking to the airwaves begging We the People to demand that funding not, in fact, be cut.

It’s only a matter of time before someone writes a new referendum, whereupon We the people, upset at the loss of such things as our lovely state parks, will vote to re-fund everything that the governor has cut--while still refusing to pay for a bit of it. And we’ll blame it all on the governor, refusing to acknowledge that in reality, it’s our own fault for creating this unworkable system in the first place.

Once we’ve done that--once we’ve had one more round of demanding the restoration of our pretty little baubles without paying for it--the state will be doomed.

... and good riddance

Well. So that year sucked, didn't it? (Here's a European perspective.)

Over in Salon, Andrew Leonard optimistically opines that at least the world has learned its lesson. "For the foreseeable future it's going to be very difficult for a politician to argue that markets work best when the government stays off the playing field." Oh Andrew, if only it were so.

I try and keep up with opinions on both sides of the ideological divide. Bernard Shaw was famous for always subscribing to multiple newspapers, representing both the Labour and Tory points of view, because he never wanted to just be a member of the choir, endlessly preached to by people he already agreed with, instead he wanted as many different opinions as he could find, so that he could then make up his own mind. (It is, then, no surprise that he turned out to be one of the great contrarians, constantly defying people's attempts to stuff him in one ideological box or another.)

I can't be as consistent as Shaw was, mostly because the right-wing opinionators just make me mad, and I don't enjoy being in a state of perpetual dudgeon. But it's a new year, so I thought I'd take a look at what the other guys are saying about our cheery economy and what we need to do about it. Turns out Andrew Leonard can't get no satisfaction: the same voices are still repeating the same opinions, ad infinitum.

Larry Kudlow has always been unbearably smug, one of what historian Jacob Burkhardt called "the terrible simplifiers." Kudlow is particularly fond of circular arguments: proving his supply-side theories ("supply-side" being what we used to call "trickle-down economics") by referencing as proof the writings of the very people who pushed the whole supply-side theory in the first place:

Social historian and early supply-side activist Irving Kristol taught us three decades ago that the top earners are the economic activists. They’re the ones with the highest propensity to consume and invest. They’re the ones who buy the yachts, which are built by blue-collar workers. And they’re the ones who run the small businesses and provide the capital for the new entrepreneurial start-ups that are the lifeblood of the economy. It is they who energize free-market capitalism.

He does the same thing later in the same article with a mention of both Arthur Laffer and Alan Reynolds in one sentence:

In fact, lower capital-gains tax rates will raise revenues, since this is the single most sensitive tax on the Laffer curve. Indeed, many economists — including Alan Reynolds at the Cato Institute — argue that the growth and simplification effects of reducing the corporate tax rate would be revenue positive.

By only referencing as proof those who already agree with his argument, Mr. Kudlow thus presents what are really unsupported conjectures as if they were proven facts. And in sharp contrast to Andrew Leonard's optimistic hope, people like Kudlow haven't changed their tune one bit:

In fact, the GOP has a great opportunity to challenge Obama’s Keynesian pump-priming by insisting there be a major tax-cut component in any new fiscal package. Republicans shouldn’t merely push for somewhat less government spending. They have to make a bold case that tax rates matter for economic growth and job creation. They must insist that any recovery package includes this key element. Shift the debate. Say clearly that a reenergized economy cannot occur without lower marginal tax rates.

Note the constant use of italics for emphasis. This is a guy whose reckless certainty will never be challenged because his own sense of infallible rightness can never be shaken.

But even worse is Lawrence Lindsey, a former governor of the Federal Reserve who really ought to know better. Mr. Lindsey correctly predicted the stock market's tech bubble in 1996, and tried to warn the Bush administration that the Irag war would cost more than they were anticipating--a lot more. (He was fired from the National Economic Council for his efforts.)

In discussing the incoming Obama administrations plans for economic stimulus, largely through investments in infrastructure, Mr. Lindsey writes in the Weekly Standard that:

These programs also generally fail the test of timeliness. Consider the phrase "shovel ready" being used to describe many of these programs. By definition a shovel-ready project is one that state or local government has already spent a good deal of money developing and is likely to continue spending on. On the other hand, infrastructure projects that actually will produce net new spending are never shovel-ready. Most of the spending will end up occurring at the peak of the business cycle when it is not needed, not at the bottom.

Okay, an interesting point. But apparently, the only reason he said that was so that he could then say this: "By contrast, there are some ongoing federal spending programs that can be quickly ramped up during a recession. Most notable is defense procurement."

Yes, that's what we need. Apparently $507 billion (and counting) last year wasn't nearly enough. Forget all this bridge-building and road-making, things that have a long-term impact that both helps us now by creating jobs and helps us later by giving us, for example, bridges that won't fall down and kill people. Instead, we should spend yet more on bombs and bullets. Things that get expended quickly and mostly just, you know, kill people.

But Mr. Lindsey is only just warming up:

The question to ask about any infrastructure project being sold as "stimulus" is why the project hasn't been done already. The most common answer is that the state and local political process didn't find that the benefits met the costs--a sure sign that the project is not likely to pay for itself during the expansion phase of the business cycle.

No, the real reason why state and local governments shy away from infrastructure projects is because they're afraid of anything whose benefits come later than two weeks from now. And in normal economic times, when there isn't such a pressing need to create jobs, the idea of, for example, the very national energy grid that Mr. Lindsey advocates in his article is shunned because it will cost a lot of money up front but won't pay dividends until years (and several elections) in the future.

(And why do we need to create jobs so badly? There was an article in USA Today a couple weeks ago that noted that results are in for the first wave of mortgages that have already been restructured, in order to make their terms more palatable and affordable to imperiled homeowners: 55% of those restructured mortgages have also failed. Of course they have. If you don't have a job, it doesn't matter how much your mortgage bill gets lowered, you still can't pay for it.)

Mr. Lindsey, no surprise from a principal architect of Mr. Bush's tax cuts, asserts that "Permanent tax cuts offer a much better option." (And by the way: tax cuts are in fact part of Obama's total plan, but not the entirety of it. He recognizes that you can't just rely on one idea to the exclusion of all others. He is not a terrible simplifier.)

But then Mr. Lindsey completely floored me with this:

But the centerpiece of any tax cut should be employment taxes: in particular, a permanent halving of the current 12.4 percent Social Security payroll tax on the first $106,800 of wages, split evenly between workers and employers. The direct revenue effect of that would be a bit under $400 billion per year, roughly in line with the present quantitative needs of the economy.

You're kidding, right? At a time when we already know Social Security is underfunded and can't possibly meet its obligations, you want to cut the Social Security payroll tax in half? But don't worry, Mr. Lindsey knows how to fix Social Security's underfunding problem: bookkeeping. Oh yes. Enjoy the following:

Since the tax cut should be permanent to have maximum effect, the biggest challenge would be how to make up for the lost revenue once the macroeconomic need for fiscal stimulus had passed. In the short run, effective fiscal stimulus requires that government revenue drop, thereby enriching the private sector, and with the Treasury making the Social Security trust fund whole by way of intergovernmental bookkeeping. Longer term, however, spending cuts or a new source of revenue would be needed.

Now look. I recognize the problems with Obama's massive stimulus/infrastructure program, most notably the inevitability of inflation somewhere down the road. And I've seen the arguments of Republicans who claim that the New Deal in fact made the Great Depression last longer, but I think David Sirota dispenses with that notion pretty effectively. But take a look at this video from Fred Thompson, in which he amusingly nitpicks at liberal stimulus plans without ever bothering to offer any alternative ideas of his own--all the while sitting in a plus leather chair in a beautiful office, paunchy and jowly, and smoking a stogie, looking like exactly the sort of fat cat who got us here in the first place.

We've got to try something, preferably a lot of somethings. Doing nothing ain't an option. (There's another round of mortgage failures coming, we know when they'll hit and we can't do anything to stop them. In other words: there's more clobbering still to come.) And doing more of the same supply-side nonsense we've been doing for the past thirty years sounds like the old definition of insanity: doing the same thing over and over, but expecting different results.

FDR was famous for just trying stuff. Anything he could think of to stimulate the economy, he did. If it didn't work, he dumped it and tried something else. So far, Obama sounds like he's doing his level best to put together a carefully-calibrated stimulus package that he can implement in one massive swoop of activity. Here's hoping that he will then have the wisdom to know when some element of that plan isn't working, and the political courage to dump that element and try something else.

Can't Get Coverage

Some background: when I left the dayjob last year (o happy day!), I decided to stay on their small-group health coverage through COBRA. But COBRA has an 18-month limit, and I hit the end of that period on September 30th. So in mid-September I started looking for new coverage, knowing full well that as an individual, not a member of any kind of organization, I wouldn't be able to get the same level of excellent coverage.

Some further background: a couple years ago I was having trouble with my right shoulder. Turned out to be a little tendonitis and a wee bone spur. Couldn't raise my arm above my shoulder without a lot of, you know, screaming. So I went to my doctor, who sent me to a specialist, who sent me for an MRI. The MRI revealed that I didn't need surgery, and that the problem would most likely find a way to resolve itself. (Sloooowly.) The specialist gave me some specialized exercises, I did them, and the problem did in fact resolve itself. (Sloooooooooooooowly.) It's quite gone now, and I can raise my arm above my shoulder, all the way to the ceiling, easily. Yay, me.

I first applied for a health-care plan tailored to young people. They saw the MRI, laughed in my face, and turned me down. So I started over again, and ended up applying for a plan linked to an HSA, thus allowing me to actually own a substantial portion of my own health-care money rather than simply send it to the Aetnas of the world and maybe never see it again. The application was just about the meanest, nastiest application I've ever completed, and it took a good ninety minutes to complete it and get it submitted.

There was, obviously, a great deal more detail requested. And when I filled out the section about that MRI, since I don't have the actual medical records, only the claim forms, I tried very hard to remember what specifically happened then, and when the application essentially defaulted to a choice of "Rheumatoid Arthritis," I figured that was probably pretty close to what had happened, and selected that.

Ninety minutes to complete the form. Ninety seconds to get turned down again.

Bear in mind, there's a section in the application where you can write an explanation of whatever you wish, so I described exactly what happened with the MRI, how it successfully ruled out a costly operation, and how I am now entirely trouble-free. But of course the computer making the decisions doesn't bother with that, it was "Rheumatoid Arthritis" and that was it, end of story.

I had to visit the specialist's office, get copies of the medical records, and send them in with a letter requesting a review. That was ten days ago, and still no word on a decision. In the meantime, I haven't had health-care coverage all month, and am rightfully worried about what would happen if something should happen to me. Because you know--if something should happen while they're still reviewing my file, it's an ironclad guarantee that they'll find some other reason to turn me down.

All this while I am, in fact, completely healthy. Nothing wrong with me. Look at that shoulder, what a terrific shoulder.

This has, of course, given me some perspective on the health-care debate going on between the candidates. There are two proposals, and boiled down (thanks to an analysis by some guys at Bank of America), they are:

McCAIN: Eliminate deductibility of employer-sponsored insurance and replace with refundable credit of $2500 for individuals and $5000 for families.
OBAMA: Universal health care with affordable health coverage and benefits similar to those available to Members of Congress ... Creation of National Health Insurance Exchange for people without access to employer insurance or public programs...

Okay. So McCain would provide me with a $2,500 tax credit to spend on health care however I wish. (The plan I applied for would cost around $4,000, including money put into the HSA.) But here's what caught my attention: if I were still employed at the law firm, the incentive for that law firm to provide health insurance, namely the tax deduction, would disappear. That means it's pretty much a sure thing that the firm would discontinue the program, and everyone would have to obtain coverage as individuals rather than members of a group.

Having gone through exactly that process, I can tell you: plenty of people would be declined, particularly people with any kind of preexisting condition, and everyone would end up spending more, more, more on their coverage, no matter how big the tax allowance provided for by Mr. McCain.

The real winners? The insurance companies. If they get to charge everyone individual rates for the same (or worse) coverage those folks were getting as employees at group rates, the insurers will rake in the cash.

Ask me if I'm surprised.