Three Options

On several occasions now (see here, here and here) I’ve gone on about how the government relates to the economy and what services of what value they are.  To summarize, the following things, among others, are services provided by the U.S. government, for example, and are valuable:

• Security of financial assets
• Copyright protection
• Guarantee sole use of the Radio spectrum
• Incorporation

These are a few among many that I could list.  Now it seems to me that there are three ways, broadly speaking, that we, as citizens of the United States, and deal with the fact that our government provides these services.

I.  Trade Them

This is the liberal option, and the one I prefer.  We can trade these services for things that are valuable to we the citizens.  Those that can use, and who need, these services to generate revenue could return a portion of said revenue to those who supply the services (the government) which then would spend the revenue on A) the kinds of things needed to continue supplying these services and B) stuff we the citizens could use.  We could have more extensive, and less expensive, mass transit, fully funded social security, education, health care and the like.  I also argue that there is a great deal of overlap between A and B above.  To supply the highest quality of the services listed above, as the U.S. does, requires having a well educated, secure, stable, generally healthy and prosperous  population.  These things are both needed by the government to supply the services and of general value to the population, so the two categories are not totally distinct.

Now if we do trade the services, we do not need to squeeze our customers to death.  We can certainly set the prices such that both we, and our customers do well by the deal.  That is the liberal proposal.  For all the whining and complaining of our conservative friends, even the highest tax proposals leave those who rely upon these services making quite a good living.

II Eliminate Them

This is essentially the Jeffersonian, and it would be a coherent libertarian, position.  While this is not the position I would advocate, it is one that can be respected.  This would be the position of a truly “small government”.  Instead of the government providing these services we citizens would either do without them or they would be provided by the private sector.   With no incorporation, no licensing of the radio spectrum and the rest, this would indeed have the government “out of the marketplace”.  This is also a position that no significant political faction is calling for. 

Now a variation on this policy would be to provide these services, but only to a limited extent.  This could be only be accomplished, however, by making them very expensive.  If the cost of incorporation or sole use of radio waves were very high, these services would be used rarely, and some private sector solution would be used instead.  Now there is no guarantee that the value obtained from these services as provided by the government can be supplied by the private sector.  If it takes a government to supply such things, and I think experience indicates that it does, then the loss would be a deep cost to we citizens. 

III Provide them for Free

This is currently the policy of the Republican party and the modern conservative movement and it is completely without justification.  Currently, the government provides these services and is therefore deeply involved in the economy.  But we charge nothing for them, rather provide them for free to a privileged class of select individuals.  Thus we in no way reduce the extent or intrusion of government we are simply removing the only things that protect us from the dangers of a large intrusive government, namely oversight, review, accountability and transparency.

There are businesses in which all the costs of all the inputs must be paid for out of the revenue that can be derived from the business.  Under these circumstances the business must be run in a manner that maximizes its efficiency if any substantial profit is to be made.  However, if the inputs of the business include copyright protection or a guaranteed sole use of radio spectrum, and as in our current arrangement these are provided at nearly no cost, then large profits are guaranteed even if work is done or the business is run poorly.   This also results in a disproportionate share of the nation’s capital gets drawn into such businesses, as they are more profitable than businesses that must cover all their costs without government assistance.  So this option can only result in growth of government control and influence in the economy.     

One Way Ticket

Much of what was reported about the underpants bomber was wrong.  The errors do not alter the story much, but many of the serious ‘red flags’ that should have been caught were, in fact, errors of reporting.  One of these was the “fact” that he had purchased a one-way ticket.  As TPM has clearly shown, this is just not the case.

I bring this up, because I think this error highlights the sorry state of journalism today.  You see, one of the odd truths about airline travel is that, for some reason I don’t understand, and in spite of common sense, one-way tickets are more expensive than round trip tickets, at least for international flights.  As I say, it is common sense that a one-way ticket would cost about half of a round-trip ticket and so one might expect that a suicidal terrorist would save the organization some money and get the one-way ticket.  Except that supposition is wrong. 

Don’t believe me?  Go to travelocity, or some other flight reservation system and give it a try.  Here are a few examples I tried, All are the cheapest ticket I could find for the given flight and all depart on Feb 26, 2010, the round trip tickets return on April 30, 2010.  The choices I made here were essentially random.

Flight	Round Trip	One Way
BWI to FCO	$875	$1435
Boston to Madrid	$590	$917
Miami to Cairo	$1135	$2420

 

I first came across this in the mid ‘80s and again in the ‘90s.  It has been pretty consistent.  I have no idea why, or how the airlines can get this to work, but it is pretty consistent. 

So the striking thing is that among all of our top notch journalists no one is apparently aware of this, nor could any discover it in the course of reporting on this story.  After all, I got the table above in about 15 minutes on travelocity. 

Civil Matremony

I basically agree with Mark Kleiman here on the question of gay marriage and Obama's stance on the same. Mark's short summary of Obama's position is

since gay marriage is bitterly controversial among various religious groups, and the state doesn’t need to take a position with respect to that controversy, it shouldn’t.

Which works well enough as a summary, although I would say that there are a few more wrinkles to the issue. And, as the commenters noted (go check the link) there are important issues of language, which are not easy to resolve.
Basically, there are, potentially, two aspects to "marriage". One is the legal status, defined by the state, the other is the religious sacrament of Holy Matrimony. The state should have virtually nothing to say about the later. If a group of poeple choose to form a social network in which they will perform ceremonies for one another only under certain conditions, that should be their business, the state should not intervene. The legal status, however, the status defined by the state, should be inclusive, people should be able to enjoy that status without discrimination. I believe Obama's position does no more than recognize that this is the case.
Now that does still leave one problem, which is somewhat thorny. Having read the comments to Mark's piece I see reasons for both sides. Namely, which of these two conditions gets the term "marriage". I'm inclined to leave "marriage" with the religious ceremony and have civil union work for the legal status. But, as I said, read the comments to see the opposite view.
I think ultimately this conflict is resolvable and either choice will work.

How to Respond

Fareed Zakaria has an excellent article in the Washington Post. He summarized very well my outlook on how we ought to respond to terrorist attacks, as opposed to the way we have responded.
As he says, the consensus view in Washington seems to be that we'd rather overreact to an attack, such as the one on Christmas day, than underreact. But, as he says, this is quite wrong

The purpose of terrorism is to provoke an overreaction. Its real aim is not to kill the hundreds of people directly targeted but to sow fear in the rest of the population. Terrorism is an unusual military tactic in that it depends on the response of the onlookers. If we are not terrorized, then the attack didn't work. Alas, this one worked very well.

This is an important observation. The ability of al Qaeda, or any such group, to succeed at their objectives is almost entirely up to us. If we respond calmly and methodically, they fail.
Now this is not to say that we should ignore terrorist attacks. That would be absurd. It is, however, possible to respond, even to violent events, with calm determination, rather than panic. Consider our national response if the cause of an airline crash, with even massive loss of life, is due to mechanical failure.

When an airliner suffers an accident, major or minor, the National Transportation Safety Board

convenes a group of nonpartisan experts who methodically examine what went wrong and then issue recommendations to improve the situation.Currently we are in the perverse situation where a significant minority of the population seem to believe that if the crash is due instead to an organization which is trying to instill terror in the general population, that we need to accommodate them. Instead of going along with al Qaeda in their efforts to terrorize us, it would be preferable if we followed up on a terrorist attack in much the same way as we do for a non-terrorist attack.
A final note by Fareed is, I think, really valuable.

As for the calls to treat the would-be bomber as an enemy combatant, torture him and toss him into Guantanamo, God knows he deserves it. But keep in mind that the crucial intelligence we received was from the boy's father. If that father had believed that the United States was a rogue superpower that would torture and abuse his child without any sense of decency, would he have turned him in? To keep this country safe, we need many more fathers, uncles, friends and colleagues to have enough trust in America that they, too, would turn in the terrorist next door.

Cheering the Team

I caught this article by Jeffery Young at The Hill (h/t Matt Yglesias) discussing the health care bill with Andy Stern of the SEIU.  Now the comments on the health bill are worth in themselves.  But one thing in the article particularly caught my attention, not with regard to the health care bill particularly, but rather with regard to how progressives approach politics and the rather limited success we’ve had in advancing policies we want.  At one point Young writes

Stern expressed strong frustration with the Senate and with those centrists -- without calling any out by name -- and hinted that labor unions and their members, who contributed with money and effort to winning Democratic majorities in the House and Senate, would be less motivated next time around.
“Democrats were given a gift that they have squandered,” Stern said. “If this is the way the Senate is going to do business when they have 60 votes, they’re pretty much guaranteeing a self-fulfilling prophecy that they won’t have 60 votes.”

a view similar to what I’ve seen a lot from various liberal bloggers radio hosts and the like.  Given the Democrats failure to deliver all that we hoped we won’t be there to give them our support in the future. 

This seems to me, however, to be a strange attitude toward the political process.   It is almost as we are supporting not a political party but a musical group or a sports franchise, and if they disappoint us the fans won’t show up at the part.  But the Democratic party is not really like a sports franchise that will have to live the misfortune of lower attendance if we, the fans, aren’t happy with how they perform.  The political parties are the instruments we have for achieving our policy objectives.   If we stay away from the polls then it is true that the Democratic party will feel some disappointment (although I doubt that it is actually as much as a lot of progressives believe) but it is also the case that other people when then be setting the nations policies.  Experience indicates that that will mean that really terribly bad polices will be established rather than merely disappointing policies.

I’ve discussed elsewhere what seems to be the progressives strategy and that it has been a striking failure.  As a movement we stayed away from the polls in ‘68 to get Nixon, and stayed away in ‘80 to get Reagan and stayed away in ‘00 to get Bush.  The policies that have come out of staying away have been quite a disaster from a progressive viewpoint.  Yet we persist in this strategy, and I see echoes of it in the comments of Andy Stern and others

On the flip side of this discussion, however, is this article by Seth Maxon from In These Times.  Apparently, Michigan Socialists are having some electoral success and political influence by working with the local Democratic party rather than opposing them.  To summarize

The secret to their success, says Green, is thinking strategically.

“As a small organization, how can we make a difference? We leverage our forces. We put our efforts towards a progressive Democrat challenging a Republican, or a progressive Democrat challenging a centrist Democrat [in a primary]. “

“We don’t pick symbolic victories,” Green says, “We pick things we can win.”

After deciding whom to support, Detroit DSA carefully chooses tactics that will have the greatest impact, all of which are based on the leftist tradition of on-the-ground, grassroots action.

This seems eminently sensible to me.  The route to political success is to move the political process in the direction you want, not to call upon political purity of all those you associate with.

This also touches on another issue one often hears about in left wing political commentary, namely the formation of a third party.  We’ve all heard before the kind of claim that the Democrats are all corrupt and sell outs to Industry, or whatever, so we need to form a new political party.  This too seems quite misguided.  Forming a political party is enormously expensive in terms of time and effort, as well as money, and the influence of a third party is very limited.  A much better path is the one followed by the Michigan Socialists above, form a coalition or section within the Democratic party.  Have members of the Democratic party move the Democratic party to the left.  People tend to think of the parties as being fixed entities, and indeed it is generally the case that they change slowly, but they do change.  The Democratic party of a hundred years ago could hardly have been the one to elect the first Black President, and the Republican party of the same time was not the holdout of the nations Confederate apologists.  The Democratic party can be made more progressive than it is and it already has a great deal of the infrastructure needed to get people elected and to shape policy.  Use that existing infrastructure rather than try to build a new one. 

Another way to consider what is needed is not to think of the Democratic party as a whole.  Rather consider that there are a number of people in Congress who are doing the work we want, Bernie Sanders, Russ Feingold, Chuck Schumer, etc.  Given that these folks are trying to advance the kind of policies we want, and trying to stop those policies we don’t want, we should consider how to best help them do this.  Obviously, electing a whole slew of really progressive Democrats (or whatever's) would be best, but clearly seeing a bunch of conservative Republicans elected would not be helpful.  More Democrats would help (60 is a much better number than 59, but we really need 62 or 63).  The more progressive better still, but any but the most conservative Democrats would be a boost, and even some of those might not be bad if it brought us over 60.  

Government and Industrial Policy

Atrios comments on our attitudes here in the US with regards to anything called "industrial policy". As he says

One of my longstanding pet peeves is that everyone in the US pretends we don't have an "industrial policy" because that implies naughty state intervention in certain sectors. But of course we have lots of naughty state intervention in certain sectors, we just don't do it even notionally for any good reason. We prop up the single family homebuilding industry and the automobile industry (even before the bailouts). We prop up certain agricultural sectors. We favor big business over small. Now we're massively propping up one skimmer industry - the financial industry - and are about to prop up another skimmer industry - health insurance.

So, yes, by design or accident we have industry policy. We should recognize that and then decide what we should be doing instead of pretending we don't have any.

James K. Galbraith comments on our attitudes toward industrial policy as well in The Preditor State.  In chapter 12 he advances the need for planning.  Our aversion to anything called industrial policy is harmful to us and foolish.

I agree with this, but I believe that there is a more fundamental problem.  It seems to me that everyone discussing economics and political theory treat government as some sort of external entity which 'interferes" with markets and the economy.  I believe that our universal insistence on this complete separation between government and the economy to be absurd. 

The government produces a host of useful services.  Basic security of the sort universally accepted by conservatives and liberals alike is certainly valuable.  Ones labor and property are more valuable because one can reliably accumulate property and the produce of ones labor and trade them for other things of value.  But in addition to that basic service the government also provides a number of other services that I've discussed elsewhere.  A partial list:

• Incorporation
• Copyright protection
• License the air waves
• Trade deals with other nations
• Securing sea lanes for trade
• Securing patents and trademarks

These services are certainly produced and provided by the government and and also certainly extremely valuable.  The government is not some outside agency, but a vital part of the economy.  We need to have some thought out industrial and economic policy because the government is a part of the economy. Our most recent policy of providing these services, but giving them away with no obligation on the part of the recipeint is certainly one choice we could make.  A very foolish choice, but a choice nonetheless.  However, if this, or anything else, should be our policy, it should be so because we, as a country, have made a decision to have this policy, not out of a knee-jerk opposition to the phrase "industrial policy". 

A further note.  Currently, and for many years, government has provided the services listed above.  In spite of many years of claiming to be in favor of smaller and limited government, conservatives have never proposed reducing or eliminating these services.  We are in no way shrinking government by providing these services and then giving them away.  This policy only serves to 1) make government larger and 2) remove what protections we have from the dangers of an over large government.  It is an utterly foolish policy. 

The policy I would recommend is to provide these services and charge a reasonable amount for them.  Mind you, I do not want to take all the money from those who use these services.  Indeed, I want to make sure that those who use the services make a buch of money doing so.  I just want the people to collect a fair portion of the money generated by these services and spend it on things of value to us. 

Terrorist Attack?

Josh Marshall reports on some fake anthrax deliveries in Alabama and California. Now given that as Republicans and conservatives have insisted, George W. Bush kept us all safe from terrorist attacks (except for 9/11), that implies that the real anthrax attacks of 2001 weren’t terrorist attacks. But if the real attacks during the Bush administration weren’t terrorism, are the fake attacks during the Obama administration terrorism. That is the question.

Market Solutions

So after the underpants bomber we have had a whole bunch of new security procedures imposed at airports. A lot of this appears to be “Security Theater”, that is the appearance of doing something, without actually doing anything useful. One can also find various reflections on what can be done, from the sensible to the absurd. (After all, even ignoring the civil rights issues and implications for foreign policy, by any measure strip searching all Muslims would involve an awful lot of security people busy strip searching a lot of Muslims who are no threat at all. Those security personnel could be put to much better use doing something else.)

But it occurred to me today that in spite of the conservative love for market solutions to everything, the obvious market solution for those concerned about another such attach is never proposed. Why can’t we have a maximum security airline. Let’s say to get a ticket you need two letters of recommendation from someone the FBI can check on. Then to get on board everyone is X-rayed. There would be more hassle for such passengers and tickets would be more expensive. But for all those who want everyone who is Muslim (or not Republican anyway) to be stripped searched, could have the security they want. The rest of us could then fly as we do now (or perhaps with a little less inconvenience.)

And yet no one on the conservative side is even suggesting this. Strange.

Lost Decade

Much comment is being generated by this article by Neil Irwin, in which he documents how the past decade has been a “lost decade” for the American economy. For the past 70 years the lowest net job creation rate for a decade was 20%. For this decade it has been 0%. Truly abysmal. But, as I’ve been going on, it seems hardly surprising. We, as a nation, decided to follow the wisdom of conservatives and dedicated our national wealth towards maintaining the status of the idle rich. There is no sound reason in economics, philosophy, ethics or religion to be so dedicated to sacrificing the welfare of the general population to provide handouts to the idle rich, yet that is beyond doubt what the past decade has been about.

The solution to the problem is really quite simple. The value of many of the services provided by government is quite large. Enormous, in fact. We need to either set the price we charge high, and spend the money collected on things of general value, or we need to set the price very high and discourage the use of these services.

We cannot afford to continue as we have been, but what we cannot afford to do, is give away our most valuable services to the wealthiest among us. The services of which I speak are, of course,

• Incorporation
• Copyright protection
• Security
• Guaranteed sole use of the radio spectrum
• Patents and trademarks
• etc.

Our prices are too low, we need to raise them. In fact the history of the past several decades is clear. We lowered our prices in the ‘80s and the budget went all out of balance, we raised our prices again in the ‘90s and the budget went back into balance, then we lowered them again in the 00’s and out of balance again.

Also note that raising our prices in the ‘90s did not destroy the economy, rather the nation enjoyed an economic boom, which furthermore left behind a great many extremely valuable new forms of commerce. We’ve done the experiment, the results are clear, we need to raise our prices.

Circular Reasoning

Steve Singiser at Daily Kos posts the following

A question that every journalist should be prepared to ask Peter Hoekstra, Peter King, and the rest of the GOP terror bloviators: how is it possible for the outgoing president (Bill Clinton) to have been responsible for one early-term terror incident, but for the incoming president (Barack Obama) to have been responsible for the other early-term terror incident?

But clearly he misses the fundamental principal of Conservative politics, namely circular reasoning. You see, it is a given that Conservatives do a better job on national security, so the 9/11 attack must have been the fault of Bill Clinton (just as the first attack on the World Trade Center in 1993 was Bill Clinton’s fault, not George H. W. Bush’s fault) and the attempted attack by Richard Reed, must also either have been handled perfectly well, or been Bill Clinton’s fault. But the underpants bomber this Christmas was a massive security failure, and Obama’s fault. Then when you see that Democrats are doing a bad job against terrorists (we’ve blamed them for all attempts whoever is in charge when the attack takes place) and Republicans never fail to protect against these attacks you are supposed to conclude that Republicans are better at national security thus justifying the original assumption and completing the circle. You need to understand the conclusion you are shooting for and then analyze the data so as to support the conclusion. This idea of deriving your conclusion from the data is just so liberal. There is no way conservatism could survive if we’re going to use that kind of linear reasoning.

Monty Python and Al Qaeda

Republicans are in full swing politicizing the Christmas underpants bomber.  They have just discovered, apparently, that treating a case like this in exactly the same manner as did George W. Bush with the shoe bomber is a grave failure of leadership.  Who knew? The Democratic party and others are setting the record straight a bit (here and here), which is good. 

One thing about the Republican insistence that these people are the gravest danger this nation has ever faced, the utter pants wetting histrionics of conservatives with regard to these folks.  Consider what this attempt really indicates about Al Qaeda.  In 2001 they came up with the idea of having Richard Reed try and take down a plane by hiding explosives in his shoes and then setting them on fire as the plane landed.  That did not work.  So the brilliant minds of Al Qaeda went to work, those evil geniuses which pose such a monumental threat to the worlds only hyper power put all their brainpower into coming up with another plan.  After nine years they came up with an alternate plan.  This time they would put a guy on a plane with his underwear packed with explosives and he would set this on fire as the plane landed.   Apparently, the recognized that a man setting his shoes on fire was suspicious, but then they thought that man setting his underwear on fire was less so.  Hmmm. 

I’m sorry, but this really is more like Monty Python and the Holy Grail and Sir Bedevere’s plan with the wooden rabbit.  Then when that doesn’t work try a wooden badger.  In a three way competition with the Knights of the Round table and the Judean People’s Front, I’m not convinced that Al Qaeda comes out as the most competent. 

Look, I’m not trivializing the thread of terrorism, rather I’m putting it in proportion.  It is conservatives and Republicans who are magnifying it out of all reason.  Anyone committing an act of murder needs to be caught and prosecuted.  The people trying to kill Americans in acts of terrorism no less than any others.   That is serious and should be treated with seriousness by our officials.   But the idea that these people are in any position to destroy the United States is comical and cowardly.  That needs to stop.