Tag Archives: Government

“The Central Question in America Today”: In Her Own Words

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One of Senator Elizabeth Warren’s many gifts is that she can discuss important issues in plain language. Bill Clinton had the same ability. But her views are more progressive than Clinton’s. She will make a great president.

Below is an interview with Warren conducted by David Dayen of “The American Prospect”. It was published yesterday under the title “Monopolist’s Worst Nightmare: The Elizabeth Warren Interview”:

David Dayen: We’re doing this issue about economic concentration. And one thing I’ve noticed is that, probably since 1912 there hasn’t been this much talk about monopoly in a presidential context, in a presidential race. To what do you attribute that? I mean, why do you think this issue has inspired this interest at this time?

Elizabeth Warren: I believe the central question in America today is who government works for. Yeah, it’s got a lot of different directions, but that’s the fundamental one. Is it just going to work for the rich and the powerful, or is it going to work for everyone else? Antitrust cuts right to the heart of that. We’ve had a government that has kissed up to every giant corporation for decades. It has weakened antitrust enforcement, looked the other way on mergers, passed on deals that everyone knew were anti-competitive and would be bad for the economy and bad for competition but good for the bottom line of the companies that wanted it. And no one so much as fluttered an eyelash over it. And that’s started to change. And I think—So here’s my thinking: it’s because we’re focusing more on what’s wrong in this country. It’s not like somebody woke up and just said “antitrust”—we’re not that nerdy—but it’s about what’s wrong in this country. And as people increasingly see that the problem is not an overreaching government, the problem is a government that won’t get in the fight on the side of the people. Antitrust becomes one of the clearest places to see that.

DD: Now you did a speech at the end of 2017, you talked about this issue, and at the beginning of the speech you said something like, you know, people don’t have to know the Herfindahl-Hirschman Index to know that there’s something wrong.

EW: Exactly.

DD: But how do you talk about it on the trail? How do you talk about it to really drive that home so that it doesn’t get bogged down in numbers and economic theory and stuff like that?

EW: It’s important to give examples of how it touches people’s lives. So when I talk about Amazon, for example, I talk about the platform where everybody goes to buy coffee makers and pet cookies, and that the platform works great. But that Amazon does something extra. It’s not just an ordinary marketplace. It’s a marketplace where Amazon, the owner of the platform, sucks up information from every transaction and every near-transaction, the fact that a shopper looked at the item, right, searched for the item, spent a little time hovering, it’s been in your cart.

And I talk about that. And then they use that information to go into competition with the businesses that are trying to sell you coffee makers or pet cookies. And the consequence of that is that the guy who busted his tail, figured out the pet cookie business, got out there and marketed it—Amazon looks over the edge and says, hmm, profit to be made there, let’s do pet cookies, don’t even identify it as an Amazon business, and move the guy who built this business back to page seven in the search. Routine, and now Amazon has sucked up one more business.

DD: The other issue with Amazon is, that pet cookie business, they take a cut out of every transaction he makes anyway.

EW: Exactly, exactly.

DD: And they can raise that price, they can change and say, “Oh, we’re charging more for shipping now, we’re charging more for storage now.”

EW: Every part of it. So, in other words, the way I describe that particular point is, it’s like baseball. You can run the platform—that is, you can be an umpire—or, you can have a team in the game—that is, you can run competition against others who are trying to sell the items. But you don’t get to do both at the same time. And people in the room all say, “Right.” That makes sense to me.

DD: You just break it down and it makes sense.

EW: That’s right.

DD: So we’ve seen, very recently, these hearings in the House on the digital platforms.

EW: Yay.

DD: And, you know, I’m wondering about your thoughts on the role of Congress in this policy. These are policies that Congress wrote, that they have oversight function on. You know, in the ’40s we saw something called the Temporary National Economic Committee, which was a series of investigations into all sorts of sectors over the economy. Do you think, is that something we need now? How can Congress get involved in this?

EW: Okay, I’m glad to see Congress doing this. I think it’s great. I want them to call witnesses, to let people tell their stories, I want them to expose the data. I want to see the books and records of some of these companies. Remember, Congress has got a lot of muscle if it decides to use it. But I want to make two other points. The first is current law gives the Justice Department and the FTC and the banking regulators a lot of power to move now. Even without Congress, a president who put a strong team in place could change antitrust enforcement in this country, without a single change in the laws from Congress.

DD: And it’s interesting you say the banking regulators, because people don’t realize how much power is in, you know, other agencies, not just the FTC and the Justice Department.

EW: Exactly right. I picked banking, but you’re exactly right. But it’s the reminder—There’s a lot we could do right now. But also, and this is what I argue should come out of all this, there are places where Congress should draw a bright line in this. So I have a plan to break up the big platforms. If a platform is doing more than a billion dollars in business, the platform has to be broken off from all of the ancillary businesses. And there’s just—We shouldn’t have to litigate it. Just make it happen. It’s too much concentration of power. And so I’m both ways on this: there’s a lot we can do without—I’m delighted Congress is doing this. There’s a lot we can do, even if Congress doesn’t change any law. But, there is at least one good place Congress could change the law and make this whole system work better.

DD: You mention your plan on the platforms, but you’ve also made the point that if we broke up Google and Amazon and Facebook tomorrow, we’d have a terrible concentration problem in America.

EW: Oh, it’s much broader than just that. Platform is such an obvious one and we’ve—

DD: And everyone interacts with it.

EW: That’s exactly right … the analogy from history where someone—one business—could not only control the marketplace, but also be a dominant player in the marketplace simultaneously. It’s not that you can’t find them in history. It’s that when we found similar economic concentrations in history, we broke them up.

DD: Sure, sure.

EW: Especially when they started buying everything else. And then, of course, doing—as I recall in the railroads—doing a discriminatory pricing map. Charge themselves a different price from [someone else’s] grain outfit.

DD: Absolutely. So, I mean, the sort of elephant in the room on this is the judiciary, which has a very particular theory and view of antitrust and even if you put in enforcers that want to take that in a different direction, you still have to argue that in court. So what do you think can be done there? I mean, obviously a new president would have judicial nominations, but you know, that’s going to take some time, so how—Is there a way to sort of get the judiciary to realize that they need to do their part here?

EW: Use every tool in the toolbox. So part of it is get an aggressive antitrust team. Part of it is presidential leadership. Get out and talk about this issue. And explain to the American people why the laws are working for the big guys and not for them. Encourage the academics to get out and make their case. Remember—

DD: The ones not on the payroll—

EW: … That’s exactly right. Remember, it was the academics that got this started in the wrong direction, arguably.

DD: I would argue that as well.

EW: Yes, exactly, so I think it’s all of the above. And, at the same time, move on the congressional front. I just don’t want this to feel like, gee, if we can’t move Congress, we can’t do anything. No. Bang away without Congress, but also, bang away on Congress to make change. Just move on all the fronts.

DD: Excellent, excellent. And finally, there’s a famous—It was Richard Hofstadter wrote this thing in the ’60s. And he said—And the title of it was “What happened to the antitrust movement?”

EW: Yes.

DD: That there was a movement that created all these laws and then the movement sort of went away and said, “Regulators will take care of it.” It seems like a movement is what is necessary at some level, and how do you inspire that?

EW: Okay, now let’s move back up to the 10,000 feet where we started this, because I think that’s what this is all about. When we started this conversation, I said that I think the question is who government works for. I think much of the antitrust relaxation over time in the ’60s was confidence the government would handle this. Confidence that we had regulators who knew their stuff and who were technically adept and who had shown that they would be on the side of the American public. And when the big corporations started pushing back, started advancing the academic work that said, “No, let the giant corporations do whatever they want. What could possibly go wrong?”—That it’s taken a long time for people to see the implications of that. Look, for 40 years now, the mantra in Washington and in most of the Republican Party and a big chunk of the Democratic Party has all centered around Ronald Reagan’s “What are the nine worst words in the English language? I’m from the government and I’m here to help.” Ha ha ha. The idea that it’s government that poses the threat to all of the rest of America and must be held at arm’s length, and missing the fact that it’s government that balances out the power of these giant corporations. And without an effective government to enforce antitrust laws—and other laws—we’re all in trouble.

DD: Well, it’s the idea that if there’s—If government takes away the regulation, the regulation doesn’t go away, it’s just in the hands of the giant corporations.

EW: It’s just in the hands of the giant corporations.

DD: So they get to do regulation from the boardroom.

EW: And that’s how we keep hearing lately about self-regulation. Aircraft manufacturers that self-regulated; how did that work out? You know, it’s—But it’s over and over. It’s wait, what? They’re doing what? The oil companies that were doing the drilling offshore were self-regulating? You know, they filed some reports that nobody read. That’s not a government that’s working for the public. So when you say about, is it going to take a movement? The answer’s yes. That is the movement we’re starting to build.

Getting Rich with Government Assistance

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[From “The Amazing Career of a Pioneer Capitalist” by Martha Howell, a review of The Richest Man Who Ever Lived by Greg Steinmetz:]

If [16th century Dutch merchant Jacob Fugger] was not the “first capitalist,” the story of his life perfectly exemplifies sixteenth-century capitalism and suggests a fundamental truth about many more forms of capitalism, one that was so monstrously embodied by the Dutch East India Company: wealth is won and preserved with the support of a state that is, in turn, dependent on the riches accumulated by the few who excel in commerce.

In some periods, at some moments of technological history, the riches are typically extracted from ever more efficient production, invariably aided by ruthless exploitation of human labor and natural resources. In others the wealth comes principally from control of supplies, manipulation of demand, and management of distribution networks. But always the merchants grow rich because state power protects them or looks away when the time is right—and does so because in a world where commerce reigns, neither the state nor a powerful merchant class can exist without the other. We have Steinmetz’s book to thank not just for telling Fugger’s story so well but also for showing us how the partnership between state and commerce worked in the earliest days of European capitalism.

[And until this day. The rest is at New York Review of Books.]

How Lobbyists Win in Washington

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[From “How the Lobbyists Win in Washington” by Jeff Madrick, a review of Lee Drutman’s The Business of America Is Lobbying:]

…there are two crucial points that are disturbing. The first is that business spends $34 on lobbying for every dollar spent by likely opponents such as labor unions and other interest groups.

The second point is, I think, Drutman’s most important. It may once have been adequate for lobbyists to provide business clients access to the right people. Today, however, they also must develop expertise on major political issues, so that they can provide policymakers with research, draft legislation, and pass on up-to-the-minute information. Lobbyists, not [government] staffers … are now the major source of information for Congress and the executive branch on major legislative issues. In one survey, two thirds of congressional staffers said they depend on lobbyists for the information they need to make legislative decisions and pass bills. Thus lobbying grows because Congress, and often the executive branch, needs lobbyists.

[Of course, we know that information is power. The rest is behind a paywall at New York Review of Books.]

Neoliberalism Is New Liberalism In Name Only

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It’s possible neoliberalism would be easier to fight if more people knew what it is. As things are now, only academics and certain print journalists use the term. It’s not a word you’ll hear on television. Instead, we hear of conservatism (which is a misnomer, since modern “conservatives” have become so radical) and free-market capitalism (which sounds redundant, but isn’t what Adam Smith favored). 

The term was invented in the 1930s in response to government efforts to combat the Great Depression. Certain European thinkers feared that liberal policies like Franklin Roosevelt’s New Deal would eventually lead to a collectivist, authoritarian form of socialism that would trample on everyone’s freedom (except the freedom of politicians and bureaucrats to interfere with other people’s lives). Hence, they saw a need for a new kind of liberalism, one that would take liberty more seriously, especially when it came to economics.

These critics of liberalism saw this need despite the fact that liberalism got its name because liberals were champions of individual liberty (for example, as propounded in the Bill of Rights), as well as a vibrant market economy (albeit an economy that was properly regulated). The neoliberals held that liberals were much too eager to apply governmental solutions to the world’s problems.  

Jump ahead forty years and we get Ronald Reagan announcing:

The economic ills we suffer have come upon us over several decades…. we, as Americans, have the capacity now, as we have had in the past, to do whatever needs to be done to preserve this last and greatest bastion of freedom. In this present crisis, government is not the solution to our problem; government is the problem.

And Margaret Thatcher explaining: 

I think we have gone through a period when too many children and people have been given to understand “I have a problem, it is the Government’s job to cope with it!” … and so they are casting their problems on society and who is society? There is no such thing! There are individual men and women and there are families and no government can do anything except through people and people look to themselves first… There is no such thing as society. There is a living tapestry of men and women and … the quality of our lives will depend upon how much each of us is prepared to take responsibility for ourselves and each of us is prepared to turn round and help by our own efforts those who are unfortunate.

In other words, government is inherently bad, except for the military and the police, which, unfortunately, are necessary to keep the world safe and profitable for free enterprise. Furthermore, if you can’t succeed in a highly competitive marketplace, you might possibly get assistance from your family or a private charity. If you’re weak or desperate enough to need help from the government, you’re a loser. 

The Guardian has an article by George Monbiot that does a good job explaining neoliberalism and its ill effects. His summary: 

Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that “the market” delivers benefits that could never be achieved by planning.

Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.

Monbiot concludes that the left and the center need a new “framework of economic thought”, but one that recognizes the effect of continuous growth on the environment:

… it’s not enough to oppose a broken system. A coherent alternative has to be proposed. For Labour, the Democrats and the wider left, the central task should be to develop an economic Apollo programme, a conscious attempt to design a new system, tailored to the demands of the 21st century.

Perhaps being clear about what neoliberalism is and how it’s changed our lives is the first step toward developing that alternative.

Meanwhile, Michael Lind argues in the New York Times that “Trumpism and Clintonism are the future”. He thinks Trump’s success is further evidence that the Republican Party will become more populist and less friendly to the rich and powerful (less “country club” and more “country and western”), although he doesn’t explain how right-wing billionaires and corporate executives will react if the Republican Party became less supportive of their interests.

On the Democratic side, Lind thinks Hillary Clinton will govern further to the left than Bill Clinton did. That seems obvious, given her own tendencies and the fact that the Democratic Party as a whole has become more liberal in the last twenty years. But Lind doesn’t see a wave of support for democratic socialism, even the socialism lite that Sanders claims to represent:

… notwithstanding the enthusiasm of the young for Bernie Sanders, the major tension [for the Democrats] is not between Mr. Sanders and Hillary Clinton. It is between Hillary Clinton and the legacy of Bill Clinton…. it is likely that the future of the Democrats will be Clintonism — Hillary Clintonism, that is, a slightly more progressive version of neoliberalism freed of the strategic concessions to white working-class voters associated with Bill Clintonism.

Lind’s view is that the white working-class, especially the men, will be quite at home in the new Republican Party, so the Democrats won’t even try to appeal to those voters. If that happens, it’s not clear how far left the Democrats will go. But calling Hillary Clintonism “a slightly more progressive version of neoliberalism” than what Bill Clinton practiced is a big mistake. Bill Clinton didn’t govern as a neoliberal. It’s true he said “the era of Big Government is over”, but he didn’t govern like Reagan or Thatcher. Labeling Hillary Clinton as a neoliberal makes even less sense.

If you think Hillary Clinton is just another neoliberal who thinks like Reagan did that government is the problem, not the solution, read the interview she gave to the New York Daily News editorial board this month (unlike the corresponding interview Bernie Sanders, it isn’t short on details, which is one reason the Daily News endorsed her for President last week).

Not many neoliberals would use the word “excited” when referring to plans to invest more in the nation’s infrastructure, upgrade the nation’s electrical grid, create a National Infrastructure Bank and use federal money to help make college debt-free for low-income and middle-class students. Clinton comes out strongly for government policies that will reduce the prison population and help prevent another financial crisis, among other worthy, liberal goals.

The domestic policy agenda she presents in that interview is not a neoliberal one by any stretch of the imagination. It’s a progressive agenda consistent with the ideals of today’s Democratic Party. It’s the agenda of someone who believes government can do a great deal to make ordinary people’s lives better. If anything, Clinton is too optimistic about what government can accomplish, given how many real neoliberals she’ll have to deal with.

Score 1 for United Government

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Something I wrote a few days ago has piqued the interest of a supporter of “divided” government (see We Should Expect Divided Government for a Long Time and associated comments below).

Coincidentally, I just read about President Lincoln addressing Congress after the attack on Fort Sumter. Lincoln had raised a volunteer army to defend the Union, but without Congressional approval, since Congress was out of session and not due back for months. He summoned Congress back for a summer session and made his case (I’m quoting from The Man Who Saved the Union by H. W. Brands):

“These measures, whether strictly legal or not, were ventured upon under what appeared to be a popular demand and a public necessity, trusting then as now that Congress would readily ratify them” He requested authority to expand the army to 400,000 men at a cost of 400 million dollars. “A right result, at this time, will be worth more to the world than ten times the men and ten times the money…”

“This issue embraces more than the fate of these United States. It presents to the whole family of man the question whether a constitutional republic, or a democracy – a government of the people, by the same people – can, or cannot maintain its territorial integrity against its domestic foes… Must a government, of necessity, be too strong for the liberties of its own people, or too weak to maintain its own existence?… It is now for them to demonstrate to the world that those who can fairly carry any election can also suppress a rebellion.”

Since the Democratic Party’s Southern wing had disappeared (i.e. joined the Confederacy) and its Northern wing had lost its leader (Stephen Douglas had recently died of typhoid fever), the Republicans now had a large majority in both houses. Congress immediately ratified Lincoln’s previous actions and approved his request for more men and money. In fact, they voted for 500,000 men and 500 million dollars, more than Lincoln asked for.

But He Seemed Like Such a Nice Man

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Michael Lind offers an explanation for the intense right-wing, anti-government, apocalyptic rhetoric that we hear so much of these days: “(Ronald Reagan’s) moderation in office had less effect on American society than the decades of vilification of the public sector that he pumped like toxic waste into public discourse.”

Lind points out that “every crackpot element of today’s radical Right can find inspiration in quotes from Reagan”, such as:

“In the present crisis, government is not the solution to our problem; government is the problem.”

“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

“The nine most terrifying words in the English language are: ‘I’m from the government and I’m here to help.’”

“The best minds are not in government. If any were, business would hire them away.”

And on other topics:

“Within the covers of the Bible are all the answers for all the problems men face.”

“You and I have a rendezvous with destiny. We will preserve for our children this, the last best hope of man on earth, or we will sentence them to take the first step into a thousand years of darkness” (from Reagan’s nomination speech for Barry Goldwater in 1964).

“They say the world has become too complex for simple answers. They are wrong.”

“It’s silly talking about how many years we will have to spend in the jungles of Vietnam when we could pave the whole country and put parking stripes on it and still be home by Christmas.”

Lind concludes: “Reagan won his popularity by encouraging Americans to think and feel like aggrieved victims, while absolving them from any responsibility for the modern government that they themselves voted for.”

http://www.salon.com/2012/08/28/reagans_radical_rhetoric/