It’s Time for a Change: Obama must go

I was one of the millions who cheered on election night 2008 when Barack Obama became President-elect. Although a die-hard supporter of Hillary Clinton during most of the primaries, I still felt that not only had America dodged the bullet of McCain/Palin in the White House, and that a truly historic moment in American history had arrived, but also that we had elected a competent person to run the country for the next four years.

Unfortunately it became obvious very quickly that one rousing speech during a Democratic Convention four years earlier does not a competent president make. It does not even ensure a President who is capable of properly communicating his goals, policies and achievement outside of the campaign environment.

His first legislative challenge, the Health Care Reform Bill was a complete failure. In spite of the Democratic majority in both houses, he felt compelled to pursue a “bi-partisan” mirage in the face of open and repeated assertions by the Republican leadership that their highest goal was to ensure the failure of President Obama. As the President lost the initiative, Health Care Reform morphed into Health Insurance Reform, missing the key ingredient of a “public option” to keep the rapacious health insurance industry in check.

A major part of the failure lies in the President’s unwillingness or inability to forcefully make his case for true Health Care Reform. As eloquent as he was during the campaign trail, he turned out to be a complete flop as a communicator when it really counted. This allowed the tide of public support, which was palpable during the campaign, to dry up and eventually, with the drumbeat of Republican misinformation, turn into opposition.

Yes, the resulting bill does include some useful components regarding pre-existing conditions and allowing young people to remain on their parent’s insurance through college. But, for a very large number of people, the most visible net result is that their insurance premiums have been raised dramatically by insurance companies, who claim that higher rates are needed to allow them to provide for the new coverage requirements.

And that was it for the first legislative period of Obama’s presidency. Then came the drubbing of the mid-term election. It is a testament to the depth of Obama’s failings that his sellout to the Republicans on the extension of the Bush Tax Cut, supposedly necessary to obtain an extension of unemployment funding to help Americans survive the Republican orchestrated financial and economic meltdown, was hailed as a “victory” for President Obama during the lame duck session.

Fast forward to March 2011. Popular unrest in North Africa. Massive demonstrations in Egypt. The Obama Administration obviously caught completely unprepared. The embarrassing admission by Leon Panetta, before the Senate, admitting about the impending resignation of Hosni Mubarak  that “I got the same information you did, that there's a strong likelihood that Mubarak may step down this evening." A president at some level is only as good as the people he surrounds himself with.

President Obama got a pass in Egypt: Hosni Mubarak did actually resign - not when the CIA (eh.. the press) said he would, but he did go. And then comes Libya.

Again, completely clueless. Who are the “rebels”? What is their organization? How strong are they militarily? When a revolutionary council was formed, who are the players? Do we recognize them? Where is the CIA with its billions of dollars worth of “intelligence” (now there is an oxymoron)?

For once the Europeans got ahead of us. France recognized the provisional government in Benghazi and, together with the UK, committed to enforce a no-fly zone. Statements were made by Obama that “Gaddafi must go”. The media mounted a campaign to intervene with military force by providing a drumbeat of completely one-sided accounts (and as it turns out, incorrect) of the rebel successes and Gaddafi’s impending ouster. Again, where was our billion dollar CIA?

In the meantime the see-saw in Libya goes on. The rebels quickly “gain control” of a large portion of the country and Gaddafi is seemingly on the ropes - the word from the provisional government is “stay out of it”. Platitudes from Obama. Libyan government forces come seemingly out of nowhere and quickly regain control of most of the country, threatening to unleash a “blood-bath” in Benghazi. Now we finally have a “humanitarian disaster” which must be averted. The Arab League and the UN are mobilized to give the US the legitimacy to unleash our awesome military power to reap destruction on Libya to make it safe for democracy. 

Thank you, Mr. President. Now we have three “?????” (turd sandwiches?) without defined objectives, with no clear US interest being threatened, with no exit strategy, indeterminate costs, and, very likely, constantly changing “guidelines”. Does anyone really believe (after Afghanistan and Iraq) that we can effect “regime change” without ground forces? Just like Vietnam, first CIA operative, arms delivery, trainers, limited troops and 50,000 casualties later we see Americans being evacuated from rooftops in Saigon. 

And to top it all off, our fabled communicator, President Obama, presents his eagerly anticipated speech to the nation on Tuesday to provide direction and clarity to a seemingly confused and confusing set of objectives and actions, only to leave us all .... completely confused.

Critique of “Day of Empire” by Amy Chua

At one level I thoroughly enjoyed Day of Empire by Amy Chua. Since my middle- and high school days I have always enjoyed history classes and reading history books. The ancient empires of Egypt, Persia, Greece and Rome have always fascinated me, and Prof. Chua presents a very readable and concise review of both these ancient and some more modern states and civilizations. The descent of the western world into the Dark Ages after the advanced states and cultures of Greece and Rome are a fascinating mystery. 

Over the years historians have tried to explain and identify causes for the rise and subsequent demise of these empires, both as and interesting exercise in itself, but sometime also in the (probably vain) hope of perhaps learning from history to avoid the demise of whatever the current empire happens to be. Unfortunately the evidence seems persuasive that we humans do not learn from history - remember the “war to end all wars”. And then there is the current “limited military activity” in Libya showing how little we have learned from our futile 10 year engagement in Afghanistan.

And therein lies the rub. Prof. Chua’s Day of Empire argues as its central thesis that

... every society that could ... be described as having achieved global hegemony -- was, at least by the standards of its time, extraordinarily pluralistic and tolerant during its rise to preeminence. Indeed, in every case tolerance was indispensable to the achievement of hegemony. Just as strikingly, the decline of empire has repeatedly coincided with intolerance, xenophobia, and calls for racial, religious and ethnic “purity”.

It is one thing to review history (as much as an unbiased review of history is ever possible, especially where the available records are often written significantly after the fact, based on oral histories and temple inscriptions) and highlight interesting events, “facts” and trends. It is quite another thing to present mostly tenuous, more often meaningless, “evidence” of ethnic, racial and religious “tolerance” as a common cause for the rise and decline of these hyperpowers.

Even if one accepts the proposition that there is a time-correlation between the rise of these hyperpowers and whatever one defines as “tolerance”, and between the decline of these empires and a rise in intolerance (and this correlation is at best tenuous in Prof. Chua’s presentation), one cannot then conclude that this is a cause-effect relationship. This is a very common error which scientific illiterates make, that (even statistically significant, which these most certainly are not) correlations from one variable to another imply a cause-effect relationship.

It is a commonly observed phenomenon that in times of plenty, when there are sufficient resources, wealth and power to provide everyone the real or imagined feeling of well being and “upward mobility”, that “tolerance”, both ethnic and religious, tends to increase, while in times of scarcity such tolerance declines and can even “flip” to xenophobic intolerance. Thus, accepting the “correlation” which Amy Chua tries to highlight, one can just as legitimately argue that the “tolerance” is a result of the growth of the empire (and not a contributing cause), and that once the empire stops growing, or even goes into decline, the resulting decline in opportunity and feeling of well-being causes the observed intolerance.

On top of this common “correlation fallacy”, it is extremely far-fetched to try and identify “tolerance”, the concept and definition of which has evolved and changed dramatically even over the short history of America, not to mention the almost 3000 years covered by Prof. Chua’s hyperpowers, as the one unifying cause/effect of the rise and decline of these hyperpowers. And to then try and use this “insight” as a basis for defining techniques for delaying, or even avoiding, the decline of American hegemony is the hight of arrogance.

Even if one could come up with plausible commonalities on what caused past hyperpowers to decline and in some cases disappear from the face of the earth, it would still be next to impossible to apply these insights as preventative measures to forestall the decline of America -- even if the US where an autocratic dictatorship, and that alone would be equivalent to the death of America as we know it.

Death of Democracy in America: Chapter 7

If you would like to start at the beginning of this series of posts, go here.

The previous chapter in this series is located here

.

The Role of Politicians in the Death of American Democracy

Given the low esteem which Americans in general seem to have of politicians (most recent polling data suggests an approval rating of ~27%), it is tempting to jump on the bandwagon and bash politicians, and I will certainly do that.

However, it is more appropriate to expand the topic to include not only politicians, but also political parties and political institutions, for all of these are partially responsible for the death of democracy in America.

The current hot topic in the media involves a lot of babble about the “tone” of political discourse in America. Although I agree that the lack of even the most basic civility among politicians is deplorable, I am much more concerned about the lack of “substance” in politics today.

As discussed in the chapters on Media and Lobbying, political discussion is controlled and shaped almost exclusively by corporate media and managed by lobbies and PAC’s. Politicians, as a rule, do not speak for themselves anymore, but are guided at every step by “political strategists”. Typical of the advise given by these strategists is that of Frank Luntz

 and his “11 for 11”, the 11 most powerful words and phrases for 2011. These phrases are completely devoid of substance, and appeal only and exclusively to the emotional and irrational in voters.

When politicians are interviewed one always detects a palpable fear that they might say anything for which they might be held accountable. For example, in a number of interviews of Rep. John Boehner after the GOP won the 2010 midterm elections, he was asked for examples of specific programs he would cut or eliminate, after having campaigned on the need to dramatically gut the federal budget for the prior two years. In both cases his response was “nothing specific comes to mind”.

The impression is also pervasive that politicians will completely reverse their “convictions” and policies, if advised to do so by their ever-present political strategists and by their interpretation of current polling results. For example, as the 2012 presidential campaign gets into gear and Republicans are positioning themselves, Mitt Romney, a successful and respected former governor of Massachusetts, is disavowing his own state-level health care reform policies, which during the previous presidential campaign he had offered as a model for federal health care reform.

I have always been amazed at how former politicians, when interviewed after leaving office, actually sound like intelligent human beings. They then feel free to make substantive statements which contain specific (and often quite reasonable and useful) policy proposals. While active in politics, however, politicians of all political persuasions will generally restrict themselves to uttering political slogans and platitudes.

In a recent CNN special by Fareed Zakaria

 (“Restoring the American Dream: Getting back to #1”), the following exchange was very much on point:

ZAKARIA: The economist Dambisa Moyo says for the country to get back to number one, politicians in Washington need to stop worrying about -- number one -- themselves and their reelection, and look long-term.

MOYO: My perspective is that governments and policymakers are very rational. And they are basically myopic. And that -- by that I mean, they're driven by political cycles. And political cycles, by their very nature, in the United States every two years if you include midterms, force or encourage or even reward policymakers for focusing on short-term factors, what we would call tactical short-term factors.

Things like debts and deficits which are important, they absolutely are. But a lot of what I'm talking about, these things about capital investment, labor investments and education and investing in innovative technologies are things that are, many would argue, intractable longer term issues that need to be dealt with. 

Given that today’s politicians hide behind their advisors, strategists and image makers (even when in office between elections, as they are already positioning themselves for the next election) it is virtually impossible for the public, the electorate, to determine what their convictions are and what their policies might be. One can merely determine the useless right/left, liberal/conservative positions because of all the tired, worn-out and meaningless political clichés they all spout.

To be fair, there are a number of active politicians who can mostly be relied upon to speak honestly and consistently and express their true convictions and policy proposals.  Barney Frank, Democrat from New York, is one of the Representatives that I always enjoy listening to. I’m sure if I tried really hard I could come up with someone on the Republican side also. But for the most part Ms. Mayo’s assessment (and she is certainly not alone in that regard) that politicians are caught up in a two-year election cycle, focusing on “tactical short-term factors”, with no interest or incentive to discuss long term issues.

This leads into the larger issues of America’s political institutions and political parties.

In an excellent short and concise summary of the American political institutions by L. Sandy Maisel

, he describes the effects of the Constitution, its interpretation and modifications (via Amendments) on elections at all levels, political parties and their role in implementing democracy in America.

Although most of us assume that the way we elect or government today, and the role of political parties in that process, has been fixed since the beginning of the Republic, and indeed is anchored in the Constitution, in fact this process as evolved dramatically over time. This steady evolution of our electoral process and the two-party system should tell us that, although not a simple matter, it is certainly possible to contemplate changes, should that be desirable, or even vital, for the survival of democracy in America.

There are certain elements which indeed are embedded in the Constitution, most importantly the separation of powers into three distinct branches. Especially the separation of legislative (Congress) and administrative (President) branches, and the explicit specification of the length of terms for members of Congress and President, has a very profound effect on elections, political parties and politicians, most importantly that a “parliamentary” system is not possible in America.

One could make a plausible argument that a parliamentary form of government offers advantages over the US presidential system. For example, in the rapidly changing world we live in today, if the electorate becomes dissatisfied with the programs and policies of their “government”, early elections can be forced via a vote of “no-confidence”, thus allowing a different combination of political parties to take over and quickly change directions. In the US, however, such a change in direction can at best be implemented within the two-year cycle, and then only partially, depending on whose term is up at that time.

Note that under “normal” circumstances parliamentary election cycles are quite long; in the UK for example, new elections must be held within five years of the last one; in Germany that period is four years. To be sure there are some parliamentary systems, such as Italy, which suffers from political instability due to rapidly changing governments, but today these are the exception rather than the rule.

Although, as Dahl points out (see Chapter 2), frequent elections are an integral requirement for a well functioning representative democracy, this two year election cycle leads to very short-range tactical thinking and policies, and does not seem to be able to successfully solve America’s multitude of long range structural problems. Furthermore, Maiser points to additional negative side effects, such as voter exhaustion and apathy, leading to very low (in comparison to most other democracies) participation rates.

We generally think of our democracy as facilitating majority rule, that is, the people we elect are supposedly a reflection of what the majority of citizens want. This, however, is far from the truth, as highlighted by Maisel.

• The creation of the Electoral College reflected a deep seated distrust among the founding fathers of pure democracy, and an elitist attitude which feared that the “uneducated masses” could be roused to allow a despot or dictator to assume the role of President. This has led to a number of presidents being elected who did not receive the majority of votes, most recently the Resident George W. Bush.
• Senators until relatively recently (1913, Seventeenth Amendment) were not popularly elected, but rather appointed by the various State legislatures. The fact that each state was given two Senators, regardless of size, was a compromise between the small and the large states, one of the most persistent sticking points during the formulation of the Constitution.
• Even though, after long and hard battles, we have “universal suffrage” today (every citizen 18 or older has the right to vote), the fact that a simple plurality (most of the votes, not necessarily more than half), determines the winner of elections of Senators and Representatives, further amplifies the fact that often times our political representatives do not reflect the majority.
• The low voter turnout typical of American elections further exacerbates this “minority rule”.
• Finally, although universal suffrage is the law of the land, data shows that the people who actually do go to the polls are heavily skewed towards the better off and better educated, as well as the “white” (non-minority) populations.

The huge cost of elections today contributes enormously to skewing the electoral process to corporate interests (who finance the elections) and/or to a small elite of the very wealthy who can and do use their own resources to win (not to say buy) elections. According to the Center for Responsive Politics, of the newcomers in the new (2010) Congress, 60 percent in the Senate and 40 percent in the House are worth $1 million or more, whereas only about 1 percent of the total population are millionaires.

Finally, the Supreme Court rulings regarding the 2000 Florida recounts and the striking down of campaign finance restrictions call into question the separation of powers mandated by the Constitution. The impression is very strong that the Florida ruling was driven by the political leanings of the majority of the Court. And who can deny that the campaign finance ruling has a huge influence on the electoral process in favor of special interest control of that process.

Taken together, all of the above combine to effectively put a relatively small privileged minority in charge of who governs this country, far from the egalitarian one-person-one-vote “democratic” ideals. Whether by design or accident, this actually reflects the deeply elitist attitudes of most of the founding fathers.

In addition to the basic mechanisms of how we elect our government, the way in which the Senate has and is choosing to organize itself is increasingly un-democratic. There are many voices who decry the virtual paralysis of the Senate as a legislative body and the effective 60 vote requirement to pass any legislation. Add to that the archaic rules that a single Senator can torpedo any legislation without cause, and you have an institution which defies common sense definitions of democracy.

The electoral process and institutions described above are in many ways determined by explicit element of the Constitution and subsequent Amendments; although these can be modified by further Amendments, as they have in the past, that process is not a simple one. Political parties, on the other hand, are not a defined component of the American Constitutional system. The political parties which exist today have evolved over time and have taken on a life of their own, but there is nothing in the Constitution to mandate their existence or to define or constrain their activities.

Sidney Milkis

 describes how political parties initially formed as decentralized political associations, often initiated by presidential candidates, that engaged the attention of ordinary citizens and held presidents accountable to local constituencies. But as the power of the presidency and the federal government grew, parties shifted their attention from building political support in the states and localities to vying for control over national administration and, in the process, lost their vital connection to the electorate.

There are two features of the American electoral process which favor, if not mandate, a two-party system: winner-take-all presidential selection and single-seat congressional districts with plurality voting. Furthermore, the two dominant political parties have taken additional steps to reenforce their dominance. For example, presidential debates are controlled and organized by “bi-partisan” committees, rather than “non-partisan” ones.

Political parties today, meaning the Republican and Democratic Parties, are large and powerful self-sustaining organizations, which use the “power of the purse string” (money) to control who runs for political office. No longer do candidates for political office evolve from discussion about issues, as they engage the general public, and highlight a “natural” leader, but political candidates are selected by the party leaderships primarily for reasons of “electability” in a party’s effort to maintain and increase its political power. “Issues” and “the public” good” take a back seat to this unrestrained desire for political power.

Although “third parties” have at times played a role in American politics, sometimes colourful, sometimes significant in raising evolving issues, no third party candidate has been elect President in the past 100 years. Some Senators and state and local positions have been elected from third parties, but no Representative has been elected who did not run under the banner of one of the two major parties.

The two-party system restricts the diversity of issues and possible solutions which will be discussed in an election to those which the two parties choose, which may be, and often are, very different for the issues which actually face the country and should be discussed. Although, in their effort to attract the independent or undecided voters, the major parties will sometimes include other issues in their official “planks”, they are free to ignore these issues, depending on what their “strategists” and “campaign advisors” recommend. 

In presidential elections, the political parties use a system of “primaries” and “caucuses” to identify “electable” (which is very different from “competent”) presidential candidates. In this process two small states, Iowa and New Hampshire, have a hugely disproportionate impact on this selection process, primarily because they are first and are subject to huge media attention, which gives the winning candidates tremendous advantages in the money-raising circus.

The electorate’s disenchantment with the two major political parties is also evidenced by the fact that between 35-40% of the electorate (according to Gallup) consider themselves “Independents”. In this climate political parties have an incentive to court this large reservoir of “undecided” voters. This is euphemistically called “moving to the center”, but in practice this means trying to “capture” voters by obfuscating the substantive issues and “motivating” voters with emotional, slogan-based and often negative, misleading or outright false campaigning (among the more disgusting examples of this are the “Swift Boat” ads against Senator Kerry).

All of these individual elements combine to make American democracy very “undemocratic”:

• The electoral process, as defined by the the Constitution and as it has evolved, strongly favors rule by a privileged minority, both in terms of who participates in the voting process and who runs for political office.
• The stranglehold which the two major parties have on the process of who runs for political office and how the campaigns are financed and managed, constrains both the candidates who participate and the issues which are aired during campaigns.

Rather than use my (limited) experience with electoral processes and political parties in other countries, I will take the liberty of quoting from the final chapter, “Far from the perfect democracy”, of the previously cited book by Maisal. There he highlights issues which are worthy of being addressed in order to make democracy in America “more perfect”.

Level of Participation

• Registration Laws: Should registration laws be relaxed or abolished to encourage greater participation?
• Frequency of elections: Should all elections, national, state and local, be held on one day, once per year?
• Election day: Should election day be made into a holiday or moved to a weekend?
• Voting as an obligation, not a right: Should voting be made into a civic obligation, as in many other democracies?
• How to count votes: Should there be a requirement for a runoff elections among the two top candidates to ensure true majority rule?

The presidential nominating and election process

• Level of influence of Iowa and New Hampshire: Should there be a single national primary to give everyone equal influence in the candidate selection process?
• Front-loading of the process: The current primary process favors those candidates who have existing organizations, have name recognition, and campaign well on a one-on-one basis, and not necessarily those who have a good grasp of issues and proven ability to lead.
• Qualifications for governing: see above.
• Electoral College: Should this be replaced by direct popular election of the president?

The cost of democracy

• Political campaigns cost too much, primarily because of their strong reliance on paid campaign ads: What limits can be applied without violating “free speech”?
• Who gives money to campaigns: Should money be allowed to buy undemocratic influence over the electoral process?
• Disclosure: Is there an appropriate tradeoff between disclosing campaign contributions and violating peoples’ privacy?
• Regulating campaigns: What are the limits of “free speech” when it involves misleading and even false campaign ads?

Conclusions:

The major points I hope the reader will take way from this chapter are:

• The American democratic institutions are, even in the best of times, skewed heavily towards a privileged minority, both in terms of the electorate and the politicians vying for office. This is undemocratic at best, and becomes deadly for a democracy when this privileged class (traditionally the middle class) shrinks dramatically in size, as it has over the past 30 years.
• The two-party system tends to constrain the breadth and depth of political discussion, which is anti-democratic and counter-productive to actually solving problems.
• The huge cost of the electoral process and the unconstrained nature in which money can flow into and control this process further accentuates the unequal influence of the privileged few at the expense of “We the people”.
• The degree to which the Judiciary as assumed a direct (Florida 2010) and indirect (campaign finance) role in this electoral process calls into question the separation of powers so central to the Constitution.

Footnotes:

(32) see Huffington Post, March 1, 2011; The 11 Words for 2011, by Frank Luntz

(33) see http://transcripts.cnn.com/TRANSCRIPTS/1103/06/se.02.html 

(34) L. Sandy Maisel, American Political Parties and Elections, Oxford University Press, 2007

(35) Sidney Milkis, Political Parties and Constitutional Government, Johns Hopkins University Press, 2010

Death of Democracy in America: Chapter 6

If you would like to start at the beginning of this series of posts, go here.

The previous chapter in this series is located here.

The Role of Economists in the Death of American Democracy

Economics has long been called the “dismal science”. This derogatory term was originally coined in response to the theories of Thomas Robert Malthus, who made the depressing and “dismal” prediction that the human race would starve if population increased at the then observed rate (which proved to be wrong because of dramatic changes in the “science” of food production).

However, I think the term is today very applicable in its more direct meaning, in that, as a “science”, economics is “dismal”.

The scientific method(29) is the process by which scientists, collectively and over time, endeavor to construct an accurate (that is, reliable, consistent and non-arbitrary) representation of the world. Recognizing that personal and cultural beliefs influence both our perceptions and our interpretations of natural phenomena, the scientific method aims through the use of standard procedures and criteria to minimize those influences when developing a theory. As a famous scientist once said, "Smart people (like smart lawyers) can come up with very good explanations for mistaken points of view." The scientific method attempts to minimize the influence of bias or prejudice in the experimenter when testing an hypothesis or a theory by insisting that it can be verified independently and repeatedly.

Strictly speaking the above applies to the “natural sciences”, such as physics, chemistry and mathematics, and in fairness, economics is a “social science”, such as anthropology, law and linguistics, which focus on the study of human interaction and societies. Although modern social science endeavors to use the scientific method, it is generally understood that the ability to test hypotheses by repeated and independent experiments is virtually impossible because of the multitude of “externalities” which cannot be adequately controlled.

Economists, in formulating their theories and models, take account of these uncontrollable externalities by explicitly or (unfortunately mostly) implicitly attaching the ceteris paribus (all else being equal) qualification to all of their theories and models. In practice the ceteris paribus qualification is most often used as an all-purpose escape clause when economists are called out on the inability of their theories and models to make meaningful predictions in the real world.

In a fascinating paper by Deirdre McCloskey, The Secret Sins of Economics(30), she argues that the excessive use of mathematics and statistical significance to an almost absurd degree hides the weaknesses inherent in most of the models developed by economists in predicting real world outcomes. McCloskey argues that rather than revel in the elegance and beauty of their mathematical models, which are mostly useless in predicting real world results, economists would do better to use the wealth of available data (observed facts) to calibrate (computer) simulations, which would be more useful in predicting actual real-world outcomes.

Another side effect of the weak (to non-existent) predictive capabilities of most economic models and theories (i.e. “statistically significant” but basically meaningless), as described by McCloskey, is that the same data can often be used to both prove and disprove the applicability of a model’s conclusion.

By becoming infatuated with elegant mathematical constructs and models, many renowned economists have lost touch with reality. According to a NewYorker article(31), Prof. Paul Krugman, for example, was incredulous that companies could/would actually cook their books until the Enron scandal invaded his dream world. And we all know about the infamous statement from Mr. Greenspan in his testimony before Congress after the financial crash.

This New Yorker article, like McCloskey’s paper, contains some eye-popping discussions about the economists’ obsession with elegant mathematical models at the expense of their real-world relevance. For example, it recounts that Prof. Krugman’s most “successful” paper (in terms of being referenced in other people’s work) described a model about “target zones” (a hybrid between fixed and floating exchange rates), where many of the model’s very strong predictions were completely wrong.

Strictly speaking economics aims to explain (not very well, as we described above) how economies work and how “economic agents” (buyers and sellers, for example) interact. But through a combination of intellectual dishonesty (neglecting to explicitly and forcefully emphasize the “all else being equal” restrictions of all their theories and models, and thus their weakness to actually make relevant real-world predictions), and chutzpa (the implicit or explicit claims of their models’ “mathematical sophistication” and “statistical significance” - not to be confused with real-world relevance), economists now dominate fields such as business, finance and government. Moreover, in what some are calling “economic imperialism”, “economic analysis” is now applied in such fields as crime, education, the family, health, law, politics, religion, social institutions, war, and even science.

What is especially insidious about economists’ use of “models” (graphs and mathematical formulas) is that it gives economics the completely false sheen of quantitative predictability and exactness. By feeding this notion to a scientifically unsophisticated population, economists have usurped for themselves a completely inflated role and credibility in virtually every facet of political and social decision making. The fact that all political persuasions can refer to “economic theory” to justify their often diametrically opposing positions only highlights the fact that economic theory, as presently constituted, is virtually useless.

In American society today, therefore, economists have been elevated (or have ingratiated themselves in) to the role “wise men” or “medicine men” without whose approval and blessing no decisions can be made. This has been made possible by the pseudo scientific babble economists engage in, cloaking themselves in the mantel of their complex mathematical models which they claim can provide “meaningful” (actually statistically significant, which is not the same) predictions on the economic viability or outcome of different policy alternatives. What is left unsaid by economists is the “all else being equal” cop-out, and since in fact “all else is NEVER equal”, their predictions and projections are usually meaningless at best, or, more insidiously, depending on which economist you ask, you can obtain exactly the prediction and projection which satisfies your particular political bias.

Take for example some of the current (early 2011) political discussions.

You can hear both that the national debt is dragging the nation and the economy down, or that we need to go deeper into debt to help the economy recover.

You are told by different economists that continuing the large tax cut for the top one per-cent of the income bracket will encourage “small businesses” to create jobs, or that this tax break will bankrupt the country.

Depending on your politics, and the economists on your side, you can argue that extending unemployment benefits will cause long-term unemployment, or that these benefits are an effective government transfer payment which will prevent even deeper recession.

Politicians will trot out their favorite economists to argue that government-sponsored infrastructure projects are either a cost effective way to jump start economic activity, or that such projects are inefficient government boondoggles.

In my youth I studied aerospace engineering, hoping to become part of the effort to put a man on the moon. If the models we used in those efforts were like those of economists, NASA could have predicted a landing on the Moon or on Mars, or the Apollo capsule could have been catapulted into deep space, with about equal “statistical significance” (admittedly our mathematics was not as “elegant” as those of economic models).

So after all my polemics about economics and economists how does this all connect up to my contention that economists contributed significantly to the death of democracy in America?

Understand that I have no problems with economists building esoteric, mathematically sophisticated models within their academic communities and try to outshine each other with the “beauty” of the mathematics, hurl papers at each other denigrating the work of other economists and generally being arrogant academics. After all, in the academic world it is “publish or perish” and real-world relevance, if at all, is very low on the list of things academics are judged against.

However, when economists hijack, through a combination of intellectual dishonesty and academic arrogance, a significant role in the political discourse and decision making process of virtually all aspects of public policy, then we have a right to expect them to make a constructive contribution to this decision making process by offering relevant solutions to real-world problems. We have a right to expect them to add substance to these policy discussions in order to educate the citizens/voters so that they in turn can make more informed decisions in the voting booth. As it is, economics just lends its latest Nobel Prize stars as backups for the political mud-slinging, using meaningless platitudes about “self-regulating markets”, the “job-killing impact of taxes and government regulations”, the “benefits of deficit spending during recessions”, all of it without any definitive data to support their positions. 

If you have economists arguing with equal convictions on both sides of each and every public policy position, then economics is useless as an analytic tool to come to closure on policy debates into which economists have insinuated themselves. A case in point is the current (Feb 2011) heated debate about cutting the national deficit. Rep. John Boehner attached a letter by some 150 top academic and corporate economists urging the President to support the $100 billion in cuts proposed by the Republicans. It would be a simple matter to find 150 equally prestigious economists to argue for $100 billion or even more in additional stimulus spending as a means to reduce unemployment and kick-starting the economy.

On balance economists have contributed to the confusion of the public and the dumbing down of the political policy debates because they have no verifiable, substantive and definitive real-world contributions to make. If, instead of engaging in their academic self-gratification by coming up with ever more complex but irrelevant mathematical models, they would devote at least some of their time and resources to analyzing the mountains of statistics being collected and available at the tip of their fingers to come up with real answers to real policy questions, they might actually have something to offer.

In fairness, there are probably thousands of “lesser” economists toiling away at trying to make sense of these mountains of statistical data. However, their possible contributions to meaningful and rational policy debates are overshadowed by the “star-power” economists, the multitude of Nobel Prize winners who are more interested in enhancing their (academic) reputations than making meaningful and honest contributions to policy debates.

Conclusions:

The key points I want to make in this section about how economics and economists have contributed to killing American democracy are:

• Through a combination of intellectual dishonesty (“models” and “theories” with false sheen of quantitative predictability and exactness) and publicity campaigns (“talking head” on news shows), economists have insinuated themselves into virtually every aspect of public policy debate.
• Their theories and models cannot make predictions and projections which stand up to real-world data, but rather can and are used by different political camps to support diametrically opposing policies.
• In addition to the inherently misleading and often false information of the corporate media dominated public discussion, these contradictory and misleading “economic projections” only serve to further confuse and mislead the public in trying to exercise its democratic responsibilities.
• Economists’ infatuation with unconstrained free-market capitalism, and its supposed self-regulating and resource-optimizing characteristics, and their ability to “sell” this notion to the general public, is one of the reasons America became captivated with laissez-fare capitalism, another of of the deadly blows to American democracy (Chapter 2).

Footnotes:

(29)See, for example http://teacher.pas.rochester.edu/phy_labs/appendixe/appendixe.html

(30) See http://www.prickly-paradigm.com/sites/default/files/McCloskey_Paradigm4.pdf; also see Wikipedia for more details on McCloskey’s critique of modern economics: http://en.wikipedia.org/wiki/McCloskey_critique 

(31) The Deflationist, How Paul Krugman found Politics, by Larissa MacFarquhar, The New Yorker, March 1, 2010

Death of Democracy in America: Chapter 5

If you would like to start at the beginning of this series of posts, go here.

The previous chapter in this series is located here.

The Role of Lobbying in the Death of Democracy in America

Lobbying is generally felt to be protected by the First Amendment’s guarantee “... to petition the Government for a redress of grievances”, and a number of laws have been passed over the years defining what is and is not permissible. These laws have focused on defining reporting requirements in an effort to make lobbying activities more transparent and thus reduce the potential for misuse.

Related to lobbies are Political Action Committees (PAC), since PAC’s are often managed and financed by lobbies. However, PAC’s are regulated (if at all) by virtue of the Federal Elections Campaign Act. They are generally created to elect political candidates or to advance political issues or legislation and to influence their outcome.

For the purposes of this discussion I will use Lobbies and PACs interchangeably.

Most people have an uncomfortable feeling that the boundary between lobbying and corruption is a very fluid and gray area, as evidenced by the repeated and on-going national debate about the proper role of lobbying and lobbyists. In an interesting research paper by Nauro F. Campos and Francesco Giovannoni(23) the authors attempt to formally investigate the proposition that “[c]onventional wisdom suggests that lobbying is the preferred means for exerting political influence in rich countries and corruption the preferred one in poor countries”. 

The above cited study also points out (with evidence) that one of the major differences between how corruption and lobbying seek to gain favors and (unfair) advantages is that corruption focuses on the executive and its bureaucracy, while lobbying focuses on the legislative arms of government. Furthermore, they find that corruption tends to be used more in non-democratic states or early-emerging democracies while lobbying is more prevalent in stable democracies, or to paraphrase Carl von Clausewitz, lobbying is the expression of corruption by other means.

In an article in Forbes(24), Michael Maiello points out that

“... the power of the lobbyist is far greater than the power of the briber. A powerful lobbyist can get laws changed even if there's no public consensus to do so, and yet those laws still apply to everyone”.

Similarly Thomas Gais(25) writes 

“Not only are organized groups still believed to control too much money and to be too important in formulating government policies; such groups, especially when they are organized as PACs, are viewed as unrepresentative of, and even alien to, the interests of most citizens”.

One of the more extreme examples of how powerful lobbies can be and how they can corrupt the legislative process was highlighted in a CBS 60 Minutes report(26), first aired on April 1, 2007 (and no, it was not an April Fools joke). It described the middle of the night vote to pass one of the biggest government give-aways to the pharmaceutical industry, popularly known as Medicare Part D Drug Coverage. From the report’s transcript:

"The pharmaceutical lobbyists wrote the bill," says [Rep. Walter] Jones. "The bill was over 1,000 pages. And it got to the members of the House that morning, and we voted for it at about 3 a.m. in the morning," remembers Jones.

Why did the vote finally take place at 3 a.m.?

"Well, I think a lot of the shenanigans that were going on that night, they didn't want on national television in primetime," according to [Rep. Dan] Burton.

It is estimated that this bill will provide the pharmaceutical industry with $40 billion in government transfer payments over 10 years.

This bill passed almost entirely along party lines and all Republicans, who today are clamoring to cut government spending, pushed this bill through congress over strong objections from Democrats. The parallels with the Health Care bill passed by the Democratic congress in 2009 are fascinating, in that that vote too was completely along party lines, but with roles reversed. More about the role of politicians in killing American democracy in a later chapter.

It is especially egregious in my view that there is a “revolving” door between lobbies and political offices, both elected, appointed and at the staff level. Former members of congress, who move to lobbies, retain many of the privileges of their former elected office, including access to the floors of both House and Senate. Access is the bread and butter of lobbyists and these former members of congress have unequaled access, which is exactly what they sell to lobbying firms.

It is interesting to note that none other than Senator Robert C. Byrd, then the Senate Majority Leader, felt obliged in 1980 to hold a lengthy series of lectures in support of lobbyist(27) to protect them from “... the media [who] tend to portray legislative lobbyists as some form of monster.” Senator Byrd reviews the entire 200 year history of lobbying activity in the US Congress, recounting the many instances in which lobbying has led to obviously corrupt actions which were counter to the interests of the majority of citizens. Each time Senator Byrd ponderously proclaims “Mr. President, this practice has been discontinued, as we all know.”

Senator Byrd goes on to favorably reference Margaret Thompson(28), who defines lobbying as "the process by which the interests of discrete clienteles are represented within the policy-making system." She defined lobbyists as "representatives who act concurrently with, and supplement the capabilities of, those who are selected at the polls. Lobbyists fill roles that in many ways are comparable to those of legislators: helping to transmit and obtain satisfaction for demands upon the government, thereby advancing the substantive interests of those whom they have taken it upon themselves to serve”.

Note how lobbyists are here defined as virtually equivalent to our elected representatives and senators. But who elected the lobbyists?

Senator Byrd ends his lecture with a paragraph which is almost pathetic in its defense of lobbyists:

“They spend many hours and considerable shoe leather trying to convince 535 members of Congress of the wisdom or folly of certain legislation. They face vigorous competition. They still bear the brunt of press criticism and take the blame for the sins of a small minority of their numbers. But they have a job to do, and most of them do it very well indeed. It is hard to imagine Congress without them”. [Emphasis mine]

These lectures are now part of the official WEB site of the United States Senate!

My indictment of lobbying, however, is not restricted to the potential for corruption of both the electoral and the legislative processes as a legal or ethical matter. Equally important is that lobbying corrupts democracy itself by violating the “one person, one vote” doctrine, which is basic to democracy.

The one person one vote principle, although not explicitly guaranteed in the constitution, has been repeatedly affirmed by Supreme Court decisions to mean that all citizens, regardless of where they reside in a state, are entitled to equal legislative representation. This interpretation is primarily based on the requirement in the US Constitution for a decennial census to assure a fair distribution of seats in the House of Representative. Note that the Senate and the President are not included in the one person, one vote requirement, but since all money bills must originate from the House of Representative (HR), the founders were intent on ensuring that every citizen had an equal vote at the very least when it comes to money matters.

The average voter, like you and I, have one vote every two years with which we can try to influence the general and specific direction the HR will take for a two year period. Note that even this one chance to influence the direction of America is not really made in a “free and open” environment, but rather we , the citizens, are “constrained” in this act by the information we are given about the candidates and policy options. This information is heavily influenced by the media in general (see previous chapter), and by the PACs, which finance the campaigns and manage the way the media present the candidates and the issues. So even in this one vote, special interest groups, lobbies and PAC’s are already exerting their pervasive influence and control over us, the citizens.

Once we have cast our votes we, the citizens, are essentially side-lined, and lobbies take over, almost literally. So while we as ordinary citizens have one vote every two years, lobbyists essentially have a vote every time they meet with “our” representative. It is said that Rep. Boehner meets with lobbyists several times per week where decisions are made on which lobbyist will take the lead on drafting which new (spending) bill or other piece of legislation. So in that case it would be something on the order of 100 votes for lobbyists, 1 vote for the citizen. Even if for the typical Representative you assume only one tenth the number of contacts with lobbyists, the “one person one vote” principle would still be skewed by a factor of 10 in favor of special interests.

This concern that lobbying and PACs violate the one person one vote principle is also reflected in the literature. Alexander Heard, as cited in the previously referenced book by Thomas Gais, states:

“A deeply cherished slogan of American democracy is “one man - one vote”... Concern over the private financing of political campaigns stems in significant measure from the belief that the gift is an especially important kind of vote. It is grounded in the thought that persons who give in larger sums or to more candidates than their fellow citizens are in effect voting more than once”.

Efforts to control lobbying from degenerating into corruption and ensuring that large well financed groups do not “buy” disproportionate influence in the legislative process have been ongoing for decades. These efforts have tended to concentrate on two areas:

• restricting the size of contributions to try and ensure a “grassroots approach” of a large base with a common interest;
• implementing (rather toothless) reporting requirements to make the process more transparent.

Overall these “reforms” have not shown any visible improvements. Moreover Gais demonstrates that the well-meaning “grassroots” approach, with many small contributions, together with the expensive and complex book-keeping and reporting rules, have the unintended side effect of preventing significant “interest groups”, which however do not have existing sponsorship and organizational infrastructure, from engaging in effective lobbying or support of political candidates.

For example, the currently about 45 million Americans who for one reason or the other have no health insurance and might want to make their interests known and felt in the legislative process, will find it difficult if not impossible to put together an “organization” capable of soliciting many small contributions and satisfying the accounting and reporting requirements for PACs. Thus, in any political debate about alternative policies to provide health insurance to these 45 million uninsured, the lobbying and PAC avenue of making input to this legislative process is dominated by those who already have existing organizational structures: the medical establishment, insurance companies, the pharmaceutical industry and the like. This all but guarantees a one-sided, non-representative approach to health care legislation.

And to make matters even worse, a recent Supreme Court ruling overturned existing rules against both non-profit groups and for-profit corporations from using unlimited “treasury” funds to fund TV and radio ads. This opened the floodgates for corporations to use their general funds use the well-honed advertising techniques (deceptive or downright false) for political purposes also, rather than just to get people to spend their money on inferior or unneeded products and services (see also the previous chapter on the media).

Personal Experience

Since I was never involved in politics in Germany (if you ignore the short period as a teenage boy when I helped my father distribute leaflets for the Social Democratic Party  (SPD) in our neighborhood while he was stationed in Bonn at the Foreign Office headquarters), I can claim no direct experience with lobbying in Germany. I can only describe indirect experiences about how lobbies affect (or not) political campaigns.

To that extent I repeat my observations from the chapter on the media: Political parties and candidates are not permitted to buy commercial time on radio or TV.

This would, of course, cut off the primary method by which lobbies and PAC’s in the US influence and (mis-)inform American voters about candidates and issues.

For the individual this means that one is not inundated with the flood of mostly negative, entirely uninformative, often downright untrue paid political ads on TV. That in itself is a blessing. However, beyond that, it gives the entire political campaign in Germany a more serious and more responsible tone. It is difficult not to become completely discouraged and disengaged with the American political process and American politicians given the constant stream of negative campaign ads. Even politicians, who one basically feels some sympathy for, end up looking like complete fools based on the political ads they “authorize”, containing such obvious misstatements about issues and their opponents. It is no wonder that voter turnout in America continues to go down.

As mentioned previously, candidates in Germany are forced to present themselves to the electorate in personal appearances and interviews on radio and TV. In these interviews (generally not staged events such as the “TV Debates” in the US, although, sadly, that’s becoming more prevalent in Europe, also) the interviewers generally do not allow obviously non-responsive answers, slogans, or even downright false statements to go unchallenged.

Although there is a certain amount of “analysis” after such political interviews on German media, this analysis will tend to focus on the substance of the debates, rather than concentrating on the form, strategy, speculation and endless recounting of “public opinion polls”. It is significant that in a recent CNN “show” after the House voted on the repeal of the Health Insurance Reform Act, a number of public opinion polls were “analyzed” by the talking heads, which came to the conclusion that “the American public is still very confused and uninformed” about what this legislation actually included. Not a single participant in that “analysis” asked the obvious question: Why is the American public still ignorant about the contents of this “health care reform” bill?

Conclusions

The key points I want to make in this section about how lobbying has helped to kill American democracy are:

• Lobbies have been an integral part of the political process in America from the very start. 
• Even the most staunch defenders of lobbies concede the equally long history of corruption and distortion of the democratic process caused by lobbies and PAC’s.
• Years of attempts to control lobbies and PAC’s through legislation and oversight have had no visible beneficial results.
• The Supreme Court has seen fit to negate even these small and ineffectual attempts to control lobbies and PAC’s by removing all controls over how money is funneled into this process.
• Lobbies and PAC’s use the highly sophisticated methods developed by corporate advertising media to control the issues visible to the public, and to distort the information about these issues and about political candidates. This is tantamount to censorship and brain-washing.
• Most destructively of all, lobbies and PAC’s make a mockery of the one-person, one-vote concept by allowing lobbies to exercise continuous influence on the legislative process in between the virtually meaningless votes which we as citizens are allowed to cast every two years.

Footnotes:

(23) Nauro F. Campos Francesco Giovannoni, Lobbying, Corruption and Political Influence, Forschungsinstitut zur Zukunft der Arbeit Institute for the Study of Labor, IZA DP No. 2313

(24) Michael Maiello, Corruption, American Style, Forbes.com, Jan 22, 2009

(25) Thomas L. Gais, Improper Influence: Campaign Finance Law, Political Interest Groups, and the Problem of Equality, University of Michigan Press (May 1, 1996)

(26) see http://www.cbsnews.com/stories/2007/03/29/60minutes/main2625305.shtml

(27) 

see http://www.senate.gov/legislative/common/briefing/Byrd_History_Lobbying.html

(28) 

Thompson, Margaret S. The "Spider Web": Congress and Lobbying in the Age of Grant (1985)