Politically Un-Correct: America’s Crisis and Some Ways We Can Save Our Country

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Confessions of a Russian Spy

Bill, you may have noticed, was nicely oblique in his response. I suggest that capitalism over the past century has been changing slowly in ways that make it much less compatible than it once was both with the Protestant values that Jonathan Edwards represented and with sustainability. One of the problems today is that we tend to divide people into altruists, who want to do good, and selfish people who want to make money.

Well, most human beings want to do both. That odd yoking of selfishness and the public good, of narcissism and altruism, worked very well, given what we are as human beings, which is people who live in communities and believe—often in God, certainly in society and the community. But we also live in individual bodies and the narrow circles described by our families, and we want to make sure we survive and prosper and flourish inside those small families and communities. The firm will grow, productivity will grow.

This is a formula that worked very well. It worked from the 15th into the 18th century, and by the time capitalism had reached America, it had developed a deep practical connection with the Protestant ethic. Many historians argue that this country, marked by theologians like Jonathan Edwards, was destined for greatness because it brought together a powerful and productive Protestant ethos and a powerful and productive economic system.

Capitalism was very good at production, at meeting real human needs, and at producing wealth, but it was less good at producing jobs, and it was really bad at producing justice and equality. As a result, from very early on it was clear to most people that capitalism worked best when it was linked with democracy and democratic oversight, with a philosophy of the public good, and with people watching, regulating, and overseeing it.

Within 20 years of the end of the Civil War, what had started out as rival firms working in oil and coal and railroads and barrel making all were owned by Standard Oil alone.

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Capitalism left to its own devices tends to destroy the underlying premise of its operation—competition. It was Teddy Roosevelt, a Republican, who understood that. If we want the public good to be a guiding light for private markets, then we need anti-trust laws, we need regulatory laws, we need to be looking over the shoulder of capitalists. They can do their own thing: invest, produce new goods, try to find out where the needs are, and make money based on meeting those needs.

Thus, it was not just a matter of Protestant values and meeting real needs with real goods and services; capitalism also had a vital relationship with democracy, although it did not always acknowledge this. It has always worked best in states that are deeply democratic and deeply engaged in oversight; it has worked least well when left to its own devices. Think of Moscow in or China in China is remarkable as the last standing totalitarian one-party state in the world that has yielded its command economy to capitalism in order to create extraordinary productivity and rapid development, all the while ignoring major problems of inequality and environmental pollution.

A weird set of disconnects. Franklin Roosevelt was accused, just as Obama is today, of being a socialist. Roosevelt insisted he was saving capitalism, which he did. Saved it from itself, because the contradictions of capitalism when left to its own devices are such that they not only undermine democracy, they undermine capitalism itself. This is what has happened with the collapse of the global financial economy. In the past 30 or 40 years we have seen a deep disruption between capitalism as a real- economy producer of goods and services to meet real needs and capitalism as a paper economy devoted to making paper profits without any particular relationship to the real economy, which is why today the banks and the stock market have made a comeback while the economy has not and jobs have not.

Wall Street is thriving. The company paid its employees well, and they all had health insurance and pensions. Many of them had been working there 20 or 30 years. Best of all Simmons had no debt. Then, along came the new paper capitalists, interested not in providing comfortable beds for people to sleep in but providing profits for their shareholders. They made an offer that the original owners of Simmons, who were growing older, could not refuse. One imagines a conversation something like this:. Buy creditworthy firms, and then use their creditworthiness as collateral for paying far too high a price.

Buy up the derivatives market, facilitated by deregulation. Banks were once prevented by law from doing this kind of business. No more. During the period when the bubble was collapsing in real estate, literally trillions of dollars in derivatives and toxic debt were put on the market.

Today nobody, including the bankers, has the slightest idea of what all those derivatives—many times removed from an original set of defaults—are worth. Privatize profit, but socialize risk! Part of all of this comes from the new notion that capitalism is exclusively about making paper profits from paper buying and sales from leveraging. This happens in a big way nowadays. Originally, leveraging was such that bankers might have to keep 20 or 25 percent of what was in the bank to cover customers who might want their money back, and the rest they lent out again at a slightly higher rate than they paid customers.

Why not 10 percent? Or how about 5 percent? Or how about no percent? Banks began to be in danger of falling apart. Too much is at stake. The point is the new capitalism is no longer interested in looking out at the world and addressing need. Capitalism used to be deeply connected to invention and entrepreneurship.

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Politically Un-Correct

You found out what people need. The move from a real economy to a paper economy and the decoupling of the capitalist economy from real human needs, from servicing what people need, are obviously connected. That is connected to another feature, the privatization ideology, which in the past 30 or 40 years has taken hold of the imagination of Democrats, Republicans, Tories, and Socialists the world over. People began to think that if they had to choose between markets and government, they trusted markets more. At least up to two years ago that was the case, not just among Republicans but among Democrats, including Presidents Clinton and Obama.

Because markets are decentralized and plural, they represent real people. Government is a big bureaucracy. Who knows, it may become a monopoly, with no real competition. Obama himself yielded without a fight, a hostage to privatization ideology—the notion that the private is what counts, the private is more important than the public, the private is more important than the state, consumers are more important than citizens.

Consumers making private choices about what they want count much more than citizens discussing together what society and community need. Think back to our discussion of global warming. There used to be one that serviced Great Barrington and Stockbridge and Lenox. But in a megacity like Los Angeles I have a set of choices at the airport. I can rent any number of cars. That public choice was made right after World War II.

That decision secured the future of the automobile and also, of course, the future of the rubber, steel, oil, car, asphalt, and cement industries in America.

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The more fundamental and important choice between public and private transportation was taken off the books. They grew quickly because the highways meant you could use your car to get places quickly. This mobility allowed people to move more easily from one place to another, which contributed to the destruction of social capital that Robert Putnam talks about. If you wear out a city, then you get in your car, drive to another one, and start over.

All we have a choice about is what kind of car to drive. They have resisted big-box stores like Wal-Mart, but for most of America people opted to be consumers at Wal-Mart instead of the downtown shopping areas, and understandably so.

Because they go where they can get cheaper goods and a much wider diversity of goods. Sam Walton knew what he was doing. You can find what you need to feed your family, clothe your children and get all their supplies, build your sunroom, take care of your automobile. Mason City used to have a wonderful little downtown, with retail shops, mom and pop stores, a movie theater.

Stores boarded up. No more picture show. Wal-Mart happened. Every time you shop at Wal-Mart, you are condemning another American town with a population of between 5, and 50, to a quick death. You are undermining the social capital of America. When I was a kid here in the s, Pittsfield was a great place, vital exactly the way Great Barrington is today. But no longer. Pittsfield has been struggling for 30 years now.

What happened? Here again is a private consumer choice that makes a lot of sense for us one person at a time, but for us as a community there are social consequences that we neglect to measure. Economists have an absurd word for the social costs of private decisions: externalities. There are externalities involved with the automobile and with climate change. As consumers we make a whole series of decisions that make all the sense in the world for us in terms of our personal desires but make no sense in terms of the public cost, the social cost.

Were we to include the cost of externalities in the cost of fossil fuel, it would become absolutely uncompetitive, even against the most expensive forms of alternative energy. What we need is a new metric, a new way of measuring true cost, and then making both citizens and politicians understand why we need it. In some ways that seems to me the most realistic way to go. Privatization plays a major role here. Subsidize the initial caps. We need to begin thinking about how to get back to a world in which citizens, not consumers, are making choices, a world in which we understand the public consequences and public costs of our private choices.

I have been talking about the impact of cars and gasoline on carbon emissions, yet there are other perilous consequences: every time we drive a car we are opting for the war in Afghanistan. And of course no responsible President can walk away from that.

Saudi Arabia is a country that actually upholds the Wahabist ideology behind Al Qaeda, and thus the dollars we pay for that oil are also dollars going to Al Qaeda. We need them, so never mind Al Qaeda! Instead of asking ourselves whether we should buy from those countries, we ask only whether we want to drive our cars.

Of course we do! Again and again, by thinking as consumers and thinking that markets are the solution, no matter if they are inefficient sometimes, we opt out of making public choices that would give us the ability to actually create the framework in which we live, the framework that would enable us to say no to carbon emissions, to say no to an oil-dependent economy.

But the truth is that in a market economy the logic of consumers trumps the logic of citizens, and to get elected, politicians have to go along with the consumers. As consumers Americans are right to believe that fossil fuel is good, that cars are good. Of course cars are good. Of course, the best way to deal with carbon emissions in economic terms is to suspend global economy permanently.

Create a permanent recession, a Great Depression for the next 40 years. No changes in behavior. The recession has actually had some impact in slowing warming! Would you believe that the Secretary of the Treasury is complaining that Americans are saving too much? This is after 20 years during which we had a negative savings rate. We saved nothing and spent everything; we spent ourselves into this hyper-consumerist economy that then collapsed, and the best that our leaders in Washington can recommend is that we go back to where we were.

They should at least buy some of their own stuff. They can produce enough for export to get rich and still buy their own goods. Here I come back to where I started, with the dilemma of capitalism.

Climate Change and the Politics of Interdependence – Schumacher Center for New Economics

Capitalism started out by manufacturing goods to meet our needs, but long ago in this country, and in many other middle-class parts of the world, most of our reasonable needs have long since been met. I mean a car, a house, a hi-fi set. All the things that contribute to a decent middle-class life have been purchased. What are we going to make?

How are we going to make profits? You probably thought the phone you had was okay. Or how about this example: Almost everywhere I go to speak about these issues, I am given a small bottle of water. I mention this even though the Schumacher Center has robbed me of my prop by putting a glass of water on the podium. The water in this glass came fresh out of the tap. Well, the water in the bottle comes out of the tap too. Yet there are externalities here too.

The reservoirs and aqueduct system had to be built. Because they are long since paid for, we have the equivalent of free water. Do you know what we spend on bottled water every year? Utterly unnecessary. Twenty-five billion dollars has created a new faux need. If you go to a restaurant, you are asked whether you would like tap water or bottled water.

They wanted water instead, so the companies figured out that they should bottle water and sell it, making their profits that way. For a family of four, drinking daily all the water they need, it lasts a year and a half, and it costs about two dollars to manufacture. This little firm is doing very nicely. Same thing for hi-tech mosquito nets: new products to meet old needs.

Right now a big campaign is underway to provide low-cost antiretrovirals for AIDS and cures for malaria, both very important. With simple little mosquito nets certain health problems can be addressed very cheaply. What about here? Initially you have to invest without an immediate return. It was ever so. You have to defer your gratification. Not by making huge profits with destructive forms of carbon-emitting fossil fuels but by meeting a real need with new products. We have an essential need for alternative energy that capitalism ought to be able to meet. Another area of need here in the United States is for housing that can withstand the growing weather extremes, such as those causing coastal flooding.

A large part of the problem caused by hurricane Katrina in New Orleans was the destruction of coastal housing, often cheap, trailer-like buildings made like matchsticks, which were easily swept away. There are plenty of needs even in middle-class places. Someone this morning was talking about weatherizing houses. Why not create a cheap, durable, easily applicable white paint?

Then if you paint the top of every apartment building in every city in the world white, you can make an incredible saving in the energy needed to heat those buildings because the paint provides a kind of insulation. Since then, our work has expanded to five continents.

We investigated massacres and even genocides, along with government take-overs of media and the baseless arrests of activists and political opposition figures. At the same time, we expanded our work to address abuses against those likely to face discrimination, including women, LGBT people, and people with disabilities.

When families victimized by war crimes found no justice at home, we championed international justice and international courts. While we rely on in-person interviews, our research methods have also changed with the times, and today we use satellite imagery to track the destruction of villages and city blocks, and we mine big data for patterns in arrest rates or the deportation of immigrants. Everything we do circles back to our commitment to justice, dignity, compassion, and equality.

When it comes to ending abuses and bringing perpetrators to justice, some victories are big, and others are merely steps on a much longer journey to change. But each represents progress on the many issues we work on around the world. Here are more answers to frequently asked questions, such as, how we decide which countries to focus on? Do we help people suffering from poverty? In earning Charity Navigator's star rating, Human Rights Watch has demonstrated exceptional financial health in its efforts to manage and grow its finances in the most fiscally responsible way possible. Review our rating.

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Politically Un-Correct: America’s Crisis and Some Ways We Can Save Our Country Politically Un-Correct: America’s Crisis and Some Ways We Can Save Our Country
Politically Un-Correct: America’s Crisis and Some Ways We Can Save Our Country Politically Un-Correct: America’s Crisis and Some Ways We Can Save Our Country
Politically Un-Correct: America’s Crisis and Some Ways We Can Save Our Country Politically Un-Correct: America’s Crisis and Some Ways We Can Save Our Country
Politically Un-Correct: America’s Crisis and Some Ways We Can Save Our Country Politically Un-Correct: America’s Crisis and Some Ways We Can Save Our Country
Politically Un-Correct: America’s Crisis and Some Ways We Can Save Our Country Politically Un-Correct: America’s Crisis and Some Ways We Can Save Our Country
Politically Un-Correct: America’s Crisis and Some Ways We Can Save Our Country Politically Un-Correct: America’s Crisis and Some Ways We Can Save Our Country
Politically Un-Correct: America’s Crisis and Some Ways We Can Save Our Country Politically Un-Correct: America’s Crisis and Some Ways We Can Save Our Country
Politically Un-Correct: America’s Crisis and Some Ways We Can Save Our Country Politically Un-Correct: America’s Crisis and Some Ways We Can Save Our Country

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