Friday, October 31, 2008

POLL MANIA DOGGONE IT!

As an old saying goes: “people use statistics like drunks use lampposts, to lean upon” and there is no shortage of people leaning against the latest poll numbers in attempting to make the case, either for or against, the candidate of their choice. With the Real Clear Politics aggregate of poll numbers showing a 5.9 percent advantage for Barak Obama and a 7.7 percent Democratic lead in the generic congressional contest, many liberal commentators are voicing cautious optimism about a major Democratic victory next week. Likewise, supporters of John McCain see a ray of hope within the tightening of poll results between the two candidates, seeing in this development yet another come from behind victory for a man who can only be characterized as a true American hero.

To quote onetime Clinton operative turned Fox News commentator Dick Morris: “John McCain’s gains over the last five days are remaking the political landscape as Election Day approaches. The double-digit leads Barak Obama held last week have evaporated as all three tracking polls … show McCain hot on Obama’s heels.” McCain supporters continue to focus on the idea that there may be some degree of elemental misgiving on the part of uncommitted voters regarding Obama’s experience. McCain associate Mark McKinnon has predicted that the campaign’s efforts at drumming up support among uncommitted independents in the closing days of the race will make for a major surprise among the professional pundits who have thus far been accused of “being in the tank” for Obama. Moreover, there is the specter of what is known as the “Bradley effect” where white voters show support for an African-American candidate when polled but then fail to vote as such on Election Day.

On the opposite side of the debate, supporters of political change are placing a large bet on poll numbers that have shown clear and consistent majorities of Americans favoring change regarding financial and economic policy, Iraq, energy policy, infrastructure spending, equity in taxation as well as the desire to get the country back on “the right track”, all of which contribute to the assumption that there is no way that Obama and the Democrats can lose. Appearing on MSNBC’s Hardball on the last Thursday in October, Democratic Pollster Peter Hart pointed out that in the closing days of the campaign John McCain has had to spend time and money defending those Red States once thought to be safely within the Republican orbit. Not since the defeat of Custer at the Little Big Horn has Montana loomed so large on the national landscape. In a state where George W. Bush beat John Kerry by twenty points, John McCain leads by a scant two percentage points just five days before the election. Likewise Obama is giving McCain a run for his money in states like Florida, North Carolina, New Mexico, Indiana and Colorado. But in assessing Barak Obama’s lead so late in the race, political commentator Chris Matthews raises the question:” Is it real or illusionary”.

In all the analysis of poll results we seem to have forgotten the lessons learned in the New Hampshire Primary, which predicted an Obama victory over Hillary Clinton. How accurately do poll results actually reveal what the entire electorate thinks? First and foremost, low-income voters more often than not will be reluctant to participate in polling for fear of being viewed as either uninformed or inarticulate. To what extent are they actually aggrieved by Obama’s comments regarding guns and the bible or to what extent are they likely to put gut patriotism ahead of economics? Polls tend to canvass those who have previously voted. What proportion of the nine million newly registered voters will actually vote? It is assumed that they will vote Democrat but the actual level of their participation is unknowable. Finally, pollsters rely on landline telephone numbers in their canvassing in a society where an increasing proportion of voters only have cell phones and are thus not sampled. In a sense the entire polling process in this election is somewhat like a ship steaming among a string of uncharted islands with the radar on but the sonar turned off. It’s picking up the surface contacts but missing the subsurface picture thus making the total picture somewhat of a mystery that will only be solved after the last votes are counted.


Steven J. Gulitti
New York City
October 30, 2008
Iron Workers Local # 697

Tuesday, October 28, 2008

FREE MARKET FANTASIES

FREE MARKET FANTASIES AND THE
SIRENS’ SONG OF SMALL GOVERNMENT




Nowhere in our public discourse do the dual theories of free market economics and the virtues of limited government get more attention then on the campaign trail. The fusion of political rhetoric with the theoretical justifications for economic and political positions has become a hallmark of the campaign process to the point that the tenants of theory serve as litmus tests in the validation or rejection of a given particular position. While the various libertarian and conservative think tank gurus would have us believe that government involvement in the economy is the problem and that its size inherently curtails our freedom the current financial debacle might give one pause in subscribing entirely to such notions. Advocates of unrestrained free markets and limited government would have you believe that before the New Deal the country once upon a time existed in some Arcadian free market paradise with little government involvement outside of defense, settling the frontier and the collection of external revenue. Since the election of Ronald Reagan the most extreme proponents of these theories have called for a dismantling of the institutions of the New Deal, especially by “starving the beast” via a reduction in taxes. Devotees of these dual theories would have us believe that most everything of benefit that comes out of economic activity emanates largely from the efforts of individual entrepreneurs and private enterprise and that government can play little in the way of a constructive role in fostering economic prosperity. The constant citation of the virtues of unlimited free enterprise and limited government are elements in the background music of the Republican Party during this election cycle, more so than in the last. As it is, the rationale for much of the argument supporting limited market regulation and minimal government involvement in the economy fall rather flat when viewed against an honest appraisal of American history.

Since as early as 1816 when James Madison called for a “comprehensive system of roads and canals” paid for with public funds and a protective tariff to shield American industry from the competitive forces of the British economy, the federal government has been involved in proactive measures aimed at economic development. The naval suppression of piracy and the initiation of maritime aids to navigation were directly tied to fostering marine commerce. The 1824 Supreme Court decision in Gibbons v. Ogden laid out the legal framework for federal oversight of interstate commerce and thereby the regulation of the national economy that has carried forth to this day. The promotion of agriculture by way of the Homestead and Morrill Acts of 1862 gave away public land to farmers and subsidized agricultural education. Federal contracts to supply the Union Army and Navy during the Civil War were risk free with profits guaranteed, one of the critical factors in the creation of the capital pool that would fuel rapid industrialization after the war. Nowhere is the influence of the federal government in fostering economic development more evident than in the assistance given to the railroad and steel industries in the post Civil War period. Referencing “A Concise History Of The American Republic” authors Samuel Elliot Morison et al detail the very real hand of government in the economy at this time: “Internal improvements at national expense found expression in subsidies to telegraph and cable lines and in generous grants of millions of acres out of the public domain to railroad promoters.” Free land to railroad promoters in turn fostered real estate development and the railroad companies received further assistance in the form of protection from the Indians as provided by the U.S. Army. Likewise steel tariffs allowed what was at the time a most critical industry to flourish as a beneficiary of government economic intervention. Again with reference to the aforementioned source: “An important element in the growth of the iron and steel industry was the tariff, which enabled American manufacturers to compete successfully with their English and German competitors and to pile up fabulous profits.” In fact, much of the history of economic policy in the second half of nineteenth century America revolves around the issue of tariffs and the creation of vested interests that benefited there from. The closing days of the 19th century would see the creation of The Inland Waterways Commission by Teddy Roosevelt as a vehicle to promote the further development in the West of water power and transportation. The twentieth century would see continued government involvement in promoting economic growth via such developments as the Tennessee Valley Authority, the creation of NASA and the development of the Internet within the Department of Defense. To quote G. Pascal Zachary of Stanford University with regard to the importance of government policy initiatives instituted in response to Soviet advancements in space and their affect on the economy: “The post-Sputnik sense of urgency powered American innovation for decades, igniting the growth of the country’s infant semiconductor and computer industries and laying the foundational technologies for the Internet.”

In his analysis of the 20th Century, “Modern Times”, conservative historian Paul Johnson stated that the rise of big government among the advanced nations was the result of the “industrialization of warfare” and its institutionalization on the part of those states then fighting in World War I and not as a function of progressive liberal politics. The collapse of the world economy a decade later would thereby provide an opening to those political progressives who would come to see national government as the primary vehicle for addressing and ameliorating the crisis borne of the Great Depression. While the Depression ultimately came to an end as a result of World War II, the proactive and progressive measures instituted during the New Deal would act to keep the economy on a much more stable and less volatile path for most of the post war period. The present economic crisis, the origins of which can in large part be traced to the policies of financial deregulation derived from a misplaced belief in less government together with the idea that easy credit and convoluted financial products would somehow create an “ownership society”, have brought us to the edge of an economic abyss the dimensions of which are presently unknowable. The notion that reducing government oversight thereby freeing up the financial markets, together with the creation of an economic environment where one could acquire all manner of material goods from homes to i-pods without any consideration of ones’ ability to pay, with an increasing proportion of financial activity being composed of products that few can understand or place a value upon and that somehow such an environment would improve and advance the well being of every American is to me the triumph of faith and folly over reason. Moreover, the blame for this state of affairs cannot solely be laid upon the Republicans and conservatives as the initial impetus for the promotion of easy credit as it relates to home ownership originated in the Clinton Administration.

The current federal bailout of the financial sector is unprecedented more for the ideological shift represented in the mechanics of the intervention than as a departure from prior efforts to insure the stability of the system based solely on the amount of funding involved. From the Penn Central bailout in 1970 through the Savings and Loan Crisis to the bailout of the airlines in 2001 the Federal Government committed a total of 347.5 billion dollars in loan guarantees to American companies. What makes the current rescue plan different is the defacto socialization of heretofore-private financial entities via capital injections through the purchase, by the government, of preferred stock thereby creating a claim on assets which is in reality an equity interest. Moreover, by assuming the role of lender of last resort, the government has affectively reduced the role of the free market as it relates to the financial sector through the elimination of the market risk of not being able to raise the level of capital required to remain in business. It is ironic that in the political debate surrounding the latest financial crisis, it was the Republicans in Congress that insisted that the rescue package should not be in the form of unsecured loans but that there should be some way for the taxpayer to have a vested stake in and quite possibly profit from the bailout. The Republicans effectively insisted on a socialization of the financial sector although for ideological reasons they could not come to use the term.

We are now in an era where the most vexing problems we face are national and international in scope. Be it international terror, the current economic crisis, the need to refurbish our domestic infrastructure, the emerging military competition with China, an aggressive resurgent Russian or the failure of the free market to provide adequate health care, the challenges we face going forward cannot realistically be handled by small government or an economic marketplace characterized by uncontrolled or unmitigated risk. The argument that government plays little or no constructive role in our economic welfare is simply so much ideological prattle and a historical fallacy. The challenge is to increase the efficiency of government and eliminate those areas of federal spending that are truly wasteful. The idea that we can somehow return to the era of Calvin Coolidge and minimal government is simply unrealistic and a political fantasy given the course of our historical development and the challenges we now face. The very underpinnings of mainstream economic thought as championed by the late Milton Friedman, a hero of the conservative movement, are now being called into question within the community of academic economists. Professor Joseph Stiglitz, Nobel Prize winner and former Senior Vice President of the World Bank has made this very point in an article appearing in Foreign Affairs (Dec 2005) titled “The Ethical Economist”. To quote Stiglitz: “American economists tend to have a strong aversion to advocating government intervention. Their basic presumption is often that markets generally work by themselves and that there are just a few limited instances in which government action is needed to correct market failures; government economic policy, the thinking goes, should include only minimal intervention to ensure economic efficiency. The intellectual foundations for this presumption are weak. In a market economy with imperfect and asymmetric information and incomplete markets-which is to say, every market economy-the reason that Adam Smith’s invisible hand is invisible is that it does not exist. Economies are not efficient on their own. This recognition inevitably leads to the conclusion that there is a potentially significant role for government.”

I am not so naïve as to proclaim that we are at “the end of history” with regard to the applicability of conservative economic and political theories. Nor do I think that the pendulum of American politics will, as if by magic, shift leftward and remain stuck there for all time. What I would say is that current historical developments have called into question some of the bedrock philosophical tenants of the conservative movement and of the Republican Party and that this crisis of ideology will give rise to serious debate within the party in the very near future. This philosophical dilemma combined with a generally low generic approval rating for Republicans may adversely impact their appeal for several election cycles.

The campaign practice of conceptually parading around the twin tenants of small government and unrestrained free markets has in our day come to resemble the medieval practice of parading around religious reliquaries, which were believed to contain the bones of a saint or a piece of the crucifix, in front of the populace during holidays so as to reinforce their belief in the mystique of the socio-political system existing at that time. At the conclusion of ceremonies, the reliquaries were returned to the church and it was back to business as usual. Likewise politicians will wax eloquently about the virtues of the market and the relative size of government but after Election Day we will return to a world where the size of government will never again be small and one in which it will continue to be critically involved in economic matters just as it has been since the earliest days of the Republic.

Steven J. Gulitti
N.Y.C.
October 28, 2008
Iron Workers Local # 697

THE PATRIOT GAME: THE 2008 PRESIDENTIAL CAMPAIGN AND THE POLITICS OF DESPERATION

Caught in the downward vortex of the worst economic crisis in eighty years, in an environment where polls show that eighty five percent of the respondents feel the country is on the wrong track and with the war in Iraq and terrorism polling in single or low double digits the McCain campaign had chosen to make an issue of Barak Obama’s patriotism to the extent that it has now gone beyond the pale of what is fair and reasonable. The Democratic Party as a whole has likewise been tarred with the same brush. Making patriotism an issue to the extent that the McCain campaign has is clearly an effort to divert the attention of the voters away from what really affects them most and into an arena where gut emotions reign supreme and quantifiable metrics are hard to come by. That this tactic has gotten out of control is evident by the jeers at McCain rallies about shooting Obama, lynching him, emphasizing his middle name, implying he is a Muslim or an Arab, the obsession with Bill Ayers, the socialist label and culminating with the clamoring of Congresswoman Michele Bachmann (R-MN) for a media investigation of “anti-American” elements within the U.S. Congress. Likewise, Sarah Palin’s image of an America divided between pro and anti elements is nothing more than a cheap propaganda stunt that will harm the McCain campaign in the long run. In reacting to the latest news cycle the McCain campaign has tried to shift to a discussion on taxes but the patriot game still has legs in the rhetoric of Sarah Palin and in the rightwing media. All of this in spite of John McCain’s pronouncements that Barak Obama is a good family man, patriotic and someone who would be a good president.

The Republican strategy of employing patriotic agitprop against politically progressive elements in American society has had the effect of causing patriotism to become the Achilles heel of the Democratic Party. Democrats have allowed this to happen because they have failed to point out what I call the aggregate of hypocrisy within the Republican Party regarding this issue. First and foremost there are a large number of prominent Republicans who when it was their turn to serve in Vietnam willingly choose to apply for multiple deferments so they could pursue “other priorities”. The list of Republican luminaries includes Vice President Dick Cheney, Newt Gingrich, John Ashcroft, Paul Wolfowitz, Richard N. Perle and Rush Limbaugh among others. Secondly, Democratic opposition to the war in Iraq has become a useful talking point in the patriot game. It is however critical to point out that outside of the Neocons and the pro war faction, there has been more than ample opposition to the war among conservatives. From the late William F. Buckley Jr. to Pat Buchanan, Kevin Philips, George Will, Bob Novak and David Brooks there have been profound misgivings about the justification for the war and its execution. Republican senators Gordon Smith (R-OR); Richard Lugar (R-IN); John Warner (R-VA) and Chuck Hagel (R-NE) have all at times criticized or questioned the rationale for and logic of invading Iraq. Retired and active military officers like Generals William Odom, Anthony Zinni, Eric Shinseki and Joseph P. Hoar all voiced concern about the need to invade Iraq, its relation to the war on terror and the inherent difficulties in occupying the country. While the McCain campaign continues to claim that Democrats will cut and run thereby cheating America out of victory in Iraq, General David Petraeus in his last testimony on Capitol Hill stated that the word victory might not be applicable in the case of Iraq. In his first appearance before Congress, Petraeus said that he could not necessarily say the war had made America safer. As a point of fact, victory in Iraq has yet to be succinctly defined but continues to be a rather amorphous concept. Is General Petraeus less than patriotic in stating his honest opinion? Ronald Reagan promptly pulled Marines out of Beirut after a relatively short stay due to the bombing of the Marine barracks in October 1983. Should we thereby accuse President Reagan of cutting and running?

McCain continues to invoke the image of victory in Iraq in spite of the fact that consistent majorities of those polled show a desire to depart Mesopotamia, as does Barak Obama, so that we can deal with the real terrorists in Afghanistan and the frontier provinces of Pakistan. According to former Secretary of the Navy, Vietnam combat veteran and Republican turned Democrat, Senator Jim Webb (D-VA), 72 percent of American troops polled in Iraq in 2006 favored a withdrawal; 60 percent polled in 2006 by the publishers of military newspapers disagreed with the Bush Administration’s war policy and in 2007, 60 percent of military families polled said that the war in Iraq was not worth the cost. Is it logical that a significant majority of Americans both civilian and military are unpatriotic due to their views on the war in Iraq? American attitudes about withdrawal remain consistent despite recognition of the tactical success of the surge. The Republicans are trying to transform the American military into a political prop thereby undermining its traditional role as a neutral player in electoral politics. To quote Senator Webb:” It is both patronizing and condescending for politicians to use our military people as backdrops or “color commentary” for their own political goals. The implications of such political posturing are even more troublesome when the military’s competence becomes the sole bright spot in political wars gone awry. Between the Bush Administration and the more extreme elements in Congress, the Republican Party has further endangered our nation’s entire strategic posture through the way it has conducted the war in Iraq.”

The image of a nation at war has been invoked with regularity on the campaign trail and the concept that calling into question the rationale and conduct of the war in Iraq has become indicative, a proof positive if you will, of a lack of patriotism. With one percent of the population serving in the armed forces and three tenths of one percent of those in upper class America in uniform can we really say that the country is at war? In fact this is the first war in American history where the wealthiest have been given a tax cut and there is no hardship borne outside of the military families whose members are deployed to the war zone. I can only think back to an episode in Iowa when Mitt Romney was asked if he supported the war in Iraq and he said yes. He was then asked how many sons he had and if any of them were in Iraq to which he stated that he had five sons, none of whom were in the military but that:” They were serving the country by driving him around Iowa so that he could get elected.” This incident is just part and parcel of the myriad hypocrisy that has come to affect the Republican Party and contributes to the lack of intellectual and moral honesty in its claim to be the party of patriotism and the true defenders of American values. It is no secret that the majority of military officers that have left the service and entered politics, both former flag officers and Iraq veterans, have joined the Democratic Party. Can we conclude that these warriors turned politicians are less than true patriots?

In the final analysis the patriot game as now employed by John McCain and his surrogates will prove to be a major part of his undoing and could be second only to the economic downdraft in the list of factors leading to defeat in November. He is in effect sacrificing so much of the goodwill, admiration and respect that people in this country have had for him over the years. Appeals to patriotism hold little appeal to people who are seeing their retirement savings; investments, homes and jobs dissipate in the current economic tsunami. For the Republican Party it will only further undermine its appeal and message to the American people. At this point the corrosive effects of hypocrisy have reached a critical mass, a development that makes the claim of being the party of patriotism ethically, morally and intellectually untenable. Lost in all of the controversy surrounding William Ayers is the fact that many prominent Chicago Republicans sat on the same board alongside of Obama and that even the conservative Chicago Tribune has endorsed some of Ayers’ undertakings on behalf of the city. Moreover, for all of the effort to tie Obama to Ayers, a man who committed acts of domestic terror when Obama was eight years old, little has been said regarding the Palin family’s ties to a secessionist in Alaska who has totally rejected the tenants and institutions of the United States. Is it likely that Christopher Buckley, son of the acknowledged father of the rebirth of conservative intellectual thought would endorse an unpatriotic socialist? Those who continue to raise the specter socialism ignore the fact that Obama has been endorsed by or is being advised by Warren Buffet, Paul Volker, and Robert Rubin, not exactly the people who would be involved in an effort to engineer a leftwing economic revolution. Very little is said about how the Democrats initially gave the Administration solid support in the run up to invading Iraq. Likewise as was pointed out on Frontline (PBS) earlier this year the media was also less than critical in its coverage of the Bush Administration at the onset of the invasion. In maligning the Democrats’ opposition to war policy John McCain and the Republicans have ignored a chorus of opposition within the conservative movement among writers, politicians and generals including the testimony of General Petraeus, a man who will not parrot the party line or bend to the political will of the right. Regarding Iraq, the problems inherent in this misadventure have nothing to do with patriotism, political parties or the media and accrue totally to the Bush Administration; there is in reality no one left to blame. Absent from the discussion is the endorsement of Barak Obama by Colin Powell or Kenneth Adelman former Undersecretary of Defense, the man who said: “Iraq would be a cake walk”. There is something very telling about the stream of military officers joining the Democratic Party and even more ominous for the Republicans is the lack of strident support for the war on the part of prominent blue collar “Reagan Democrats”. There have been no Honor America Parades or hardhat pro war demonstrations reminiscent of the Vietnam era. Republicans should not fool themselves in thinking that working men wearing Wounded Warrior shirts or sporting “support the troops” magnets on their pickup trucks equates with support for the current Iraq policy.

The idea that it is somehow unpatriotic to question national policy in “wartime” is to totally disregard the very fundamental American value of political debate and discussion that we rely on so as to insure that this country does not drift into some form of undemocratic governance or dictatorship. Those who favor a political environment of compliance and quiet should pack their bags for Russia, that form of politics is quite popular there. To quote Thomas Jefferson: “Dissent is the highest form of patriotism”. True patriots need to be ever mindful of threats to democracy both from the left and the right and not to be conned by the current patriot game so popular in the election of 2008.




Steven J. Gulitti
N.Y.C.
25 October 2008
Member Iron Workers Local # 697