United we stand?

 

 

A few weekends ago, at the Museum of the City of New York, we watched an interesting video about the history of New York City. It ended with 9/11 and a rousing affirmation of our national unity. At the same time the far right wing of the Republican Party had shut down the US government and was threatening to make our government unable to pay its bills. Some unity.

The whole episode makes very clear that our political system is based on conflict, on overpowering one's opponents. Politics, in our democracy, has something in common with games and a lot in common with warfare.

Games have rules. These rules determine what are legitimate moves in the game and what sorts of actions are banned. Most sports allow a considerable amount of violence but there are definite limits to it, set by the rules of the game, and the rules are enforced by the umpires.

The same is true of war but here there are no umpires. Enforcing the rules, especially eliminating the use of certain kinds of weapons is therefore a much more complex undertaking. The many years of diplomatic and political pressures on Iran serve the purpose of limiting the number of countries possessing atomic weapons, in the hope of banning future uses of them. The imminent threat of bombing Syria similarly had to do with the desire to eliminate the use of chemical weapons from warfare. Syrian transgression of that rule needed to be punished in order to keep the rules in force.

Politics is like warfare except that bodily violence is banned. Not everyone observes that rule – several doctors performing abortions have been murdered in acts of political violence, so have several presidents, and leaders like Martin Luther King and Malcolm X. There is a great deal more political violence in dictatorships and in times of revolutionary conflict. But everyone, I think, agrees in principle that physical violence does not have a place in politics.

Politics therefore has its own methods for resolving conflicts. By and large the political process consists of enforcing compromises on those members of the society less powerful than one's own group, as well as accepting compromises enforced on us by those more powerful. If the search and pressure for compromise fails, we are accustomed to take a vote and the majority wins. Instead of hauling out our six shooters, or today more probably our machine guns, we take a vote and settle the conflict in that way. The rules of our political system say that once a law as been voted in, and once it has passed muster of the Supreme Court, the law stands and the discussion has come to an end. It can of course be reopened at a later date and then we go through the whole process again.

The recent government shut-down and a possible repeat early next year arose because the far right is violating the rules by trying to enforce a compromise after the vote has been taken and the court has spoken. That is clearly improper behavior but it is not that uncommon.

This is very familiar and would not need repeating, were it not for the other story we tell ourselves about how we stand united, are "one nation indivisible." We all pledge allegiance to the same flag; we sing the same national anthem, possibly with tears in our eyes, and a hand on our heart. But that, the current impasse shows, is pure pretense. We are anything but united. Our country consists of different teams whose conflicts are as bitter as can be, often on the edge of violence, barely controlled by rules that are violated again and again.

What unites us, if anything, is hatred and distrust for other groups. Most Americans have their favored groups of fellow citizens whom they would like to exile to a different country or at least deprive of citizenship rights. As the condition of the country worsens, so does the level of animosity between groups.

Please remove your "United we Stand" bumper stickers from your cars.

The fiscal crisis

 No doubt the fiscal problem has its complexities, but in outline it is a very simple problem. Two sorts of people are holding up some sort of compromise. There are, on the one hand, the people who want to get rid of Obama's healthcare reform. On the other side are people who think we are spending too much money.

As to "Obama care." I don't think it is a very good law either. By getting private insurance companies involved, a whole lot of public money goes to enrich the insurance companies and we know them to be notoriously shameless. They'll cheat their customers in any way to make a buck. The government should not be supporting that.

But I do not think that if Obama care becomes a functional system the country is going to collapse completely. Leaving Obama care in place does not amount to Armageddon. Having the federal government default on its debts comes pretty close to that. Obamacare is not as serious a threat to our national well-being than a debt default—regardless of what Ted Cruz says.

The opponents of Obama care, blinded by their ( often racist ) hatred of Obama are about to do serious damage to all of us. What are they thinking?

The elected representatives worried about our economy, should worry about what will happen to the economy if the debt limit is not raised.

To be sure we are spending more money than he should. I have made some suggestions about that in a previous blog.

The Pentagon spends half $1 trillion a year. How much money goes to the surveillance of American citizens by the NSA? How much to all sorts of secret missions planned and executed by the CIA?

Cutting those military and quasi-military programs would be a much more intelligent way of reducing our governments expenditures than having the government go bankrupt. That would do major damage to the American and the world economy from which we would not recover for a long time.

Neither of these opponents of a sensible settlement of the fiscal crisis are thinking straight. Woe to us if our representatives do not stop being wildly irrational!

Saving money

 

 

Republican state governors as well as members of Congress are trying to save money by reducing the number of people having access to Medicaid – the health insurance system for the very poor. Rep. Paul Ryan proposes to save $300 billion by slashing Medicaid expenditures radically.

It is no doubt true that the federal government is spending more than it should. It is equally true that we will have to learn to live more closely to our income. But the big debate is how to save a significant amount of money every year.

I started thinking about this when I read an article in the newspaper about the federal flood insurance program, begun in 1968, that insures houses built right on the ocean. That's a perilous location and every year a significant number of beachfront houses are destroyed by storms. But people don't learn and more houses than ever are being built on the dunes. The federal government insures these houses because no private company would be willing to do so. The federal flood insurance program is $30 billion in the red.

Suppose we told people not to build right on the oceanfront, or if they do, to do it at their own risk. That would save a nice chunk of money.

The next day there was a story in the paper that the government gave a grant to find out how to build computers that are more sensitive to human beings. Should we finance that and take away health care for the very poor? Somehow that does not sound right.

Maybe Medicare could remain intact if we made global corporations like Exxon and General Motors pay fair taxes. Maybe we could end military procurement programs for weapons the military does not want, which are kept going by local congresspeople afraid that jobs will be lost if the program is canceled. For years we have heard of contractors overcharging the military for hammers, toilet seats, and other mundane supplies. Maybe we could finally control those costs.

Medications that cost more than a $100.00 in the US, sell for a tenth of that in Europe. Our government has refused to bargain with drug companies and the government bears the brunt of drug companies overcharging patients. There is a lot of money to be saved here. The same is obviously true of private health insurance and the manufacture of medical technology.

The government gives out lots money to businesses, nonprofits, and others. Here is one interesting example: Every time an oil company brings up a gallon of crude from below, the government gives them money because they can sell that gallon of oil only once. Every day we work we get older and lose a bit of strength and endurance. The government does not pay us any depletion allowance. Why should they pay that to the oil companies? I suspect a goodly sum of money could be saved there.

Cutting Medicare is not a financial necessity. It is a spiteful, hateful measure instigated by people who have long ago lost the human qualities the government now pays to built into computers. If they succeed they definitely should send computers to Congress. They would be kinder to ordinary citizens than the present incumbents.

Perhaps we need a grant to humanize our representatives in Congress.

Here is some good old-fashioned dirt, republished from Common Dreams.

Published on Friday, October 11, 2013 by ProPublica

NY Fed Fired Examiner Who Took on Goldman

by Jake Bernstein, ProPublica

In the spring of 2012, a senior examiner with the Federal Reserve Bank of New York determined that Goldman Sachs had a problem.

 

(Photo: americans4financialreform/cc/flickr) Under a Fed mandate, the investment banking behemoth was expected to have a company-wide policy to address conflicts of interest in how its phalanxes of dealmakers handled clients. Although Goldman had a patchwork of policies, the examiner concluded that they fell short of the Fed's requirements.

That finding by the examiner, Carmen Segarra, potentially had serious implications for Goldman, which was already under fire for advising clients on both sides of several multibillion-dollar deals and allegedly putting the bank's own interests above those of its customers. It could have led to closer scrutiny of Goldman by regulators or changes to its business practices.

Before she could formalize her findings, Segarra said, the senior New York Fed official who oversees Goldman pressured her to change them. When she refused, Segarra said she was called to a meeting where her bosses told her they no longer trusted her judgment. Her phone was confiscated, and security officers marched her out of the Fed's fortress-like building in lower Manhattan, just 7 months after being hired.

"They wanted me to falsify my findings," Segarra said in a recent interview, "and when I wouldn't, they fired me."

Today, Segarra filed a wrongful termination lawsuit against the New York Fed in federal court in Manhattan seeking reinstatement and damages. The case provides a detailed look at a key aspect of the post-2008 financial reforms: The work of Fed bank examiners sent to scrutinize the nation's "Too Big to Fail" institutions.

In hours of interviews with ProPublica, the 41-year-old lawyer gave a detailed account of the events that preceded her dismissal and provided numerous documents, meeting minutes and contemporaneous notes that support her claims. Rarely do outsiders get such a candid view of the Fed's internal operations.

Segarra is an expert in legal and regulatory compliance whose previous work included jobs at Citigroup and the French bank Société Générale. She was part of a wave of new examiners hired by the New York Fed to monitor systemically important banks after passage in July 2010 of the Dodd-Frank regulatory overhaul, which gave the Fed new oversight responsibilities.

Goldman is known for having close ties with the New York Fed, its primary regulator. The current president of the New York Fed, William Dudley, is a former Goldman partner. One of his New York Fed predecessors, E. Gerald Corrigan, is currently a top executive at Goldman. At the time of Segarra's firing, Stephen Friedman, a former chairman of the New York Fed, was head of the risk committee for Goldman's board of directors.

In an email, spokesman Jack Gutt said the New York Fed could not respond to detailed questions out of privacy considerations and because supervisory matters  are confidential. Gutt said the Fed provides "multiple venues and layers of recourse for employees to freely express concerns about the institutions it supervises."
"Such concerns are treated seriously and investigated appropriately with a high degree of independence," he said. "Personnel decisions at the New York Fed are based exclusively on individual job performance and are subject to thorough review. We categorically reject any suggestions to the contrary."

Dudley would not have been involved in the firing, although he might have been informed after the fact, according to a Fed spokesman.

Goldman also declined to respond to detailed questions about Segarra. A spokesman said the bank cannot discuss confidential supervisory matters. He said Goldman "has a comprehensive approach to addressing conflicts through firm-wide and divisional policies and infrastructure" and pointed to a bank document that says Goldman took recent steps to improve management of conflicts.

Let's Privatize Congress

When the government hires a private contractor to perform a government function, the official story goes, it saves money. The private contractors work cheaply because they do not get the contract, in the first place, unless they offer to perform a particular function more cheaply than government bureaucrats. But, in addition, the contractor has an interest in doing a good job in order to get their contract renewed. The basic assumption is that people work harder and better when their economic interest comes into play.

Well, we have a House of Representatives and a Senate which seem incapable of keeping the government going and to pass needed legislation, resolve pressing problems, and appoint badly needed judges and government employees. Why? Because they get paid whether they do any work or not. Even during the government shutdown, when 800,000 federal employees are going without their paycheck, Congressional representatives are continuing to get paid. So lets hire a private firm whose contract stipulates that they have to pass X number of pieces of legislation, including government budgets and raising the debt ceiling, immigration reform, scaling down military expenditures, and taking care of injured veterans, the poor, and the education of our children.

If they don't manage that we'll get a different private firm. Simple!

This is a challenging thought, that raises a serious question: Someone elected all these fanatics in Congress who care nothing for the people that voted them into office, but only care for some hazy, ill-thought out slogans--”small government”--(until a flood devastates your town and washes away your house. Then you want the government to bail you out, ASAP)--”the free market”-- (but not a free market in labor because we want to keep all those Mexicans out)--”accountability”--which means blaming the poor and often unfortunate for their plight.

Why does anyone vote for these incompetent ideologues?

I have lately had several opportunities to talk with people who were quite conservative. What struck me about them was that they were all depressed, full of anger and hatred. All the other drivers were heedless and incompetent, most Americans were either lazy, or stupid, or had terrible values. These conservatives I talked to felt isolated, beleaguered in a world they did not like and did not feel safe in.

This is not a scientific survey. I talked at best to a handful of people. But it seems reasonable to me to think that a significant number of votes for the truly destructive Congress persons that hold up all legislative activity come from people who, themselves, feel desperate and without hope. Only extreme positions, they think, have any likelihood of saving the day in a nation of slack, incompetent, spineless citizens.

To put this another way. The people elected to Congress are a sign of the pervasive alienation in our country. There is a widespread sense that everything is terrible, that the country and its citizens are lost, degenerate (“Gay marriage?? what will be next?”), self-indulgent and lacking the backbone, they think they manifest, having learned it from their parents in a happier time in America. Only radical measures promise to save us.

Many people are unhappy in America today and unhappiness rarely make us act well.

The big questions raised by our current political debacle is: Why are Americans so unhappy? The answer to that question is long and complicated.

But the political chaos confronts us with a question not often asked: what is it about life in America today that leaves a significant portion of our people despairing, angry and in a dangerously destructive mood?