Tuesday, May 29, 2012

Not Everything Should Have A Price

Michael Ignatieff, professor of politics at the University of Toronto, makes an important case in The New Republic for why we should begin to see our society not exclusively as a market for consumers, but as a political community for citizens called a republic, that uses markets when appropriate.  This allows for an appropriate division between private and public goods, something that is becoming increasingly obscured by our new world of wealth and money.

A liberal theory of public goods, backed up by a morally persuasive rationale for progressive taxation, also needs a story about generating growth through public and private investment in the skills and the capabilities of citizens. Without a theory of growth, a politics of virtue runs into the objections that Adam Smith leveled against Rousseau two hundred years ago. Virtue without growth equals stagnation and autarchy. All told, this looks like the minimum program for Sandel’s politics of virtue, but none of it is remotely practical as long as there are no effective limits on money in politics. As long as money is moralized as speech, and not understood as power, there is little chance that the republic can put money in its proper place.

Without a politics—of redistributive taxation, public goods investment for growth, and rules controlling money in politics—any critique of what money has done to American life is just moralizing. We did not drift into this new world of money or arrive here by accident. Powerful interests have carried us here, and it is up to the people acting together to take their republic back. A society is not a market. It is a political community. Restoring the virtue of its citizens demands a politics equal to the challenge of virtue’s enemies.
Some great time-lapse photography of Yosemite National Park!

The Real Lenin

Having just finished a 633 page biography of Lenin by the writer Robert Payne, let me summarize this man's life by quoting from pages 630-632:

Lenin had many sins, but the gravest was a supreme contempt for the human race.  Like Marx he possessed an overwhelming contempt for the peasants....But Lenin went beyond Marx.  Not only the peasants, but all classes of society were anathema to him--except the proletariat [workers], with which he had almost no contact.  He surrounded himself with intellectuals and theoreticians, and he despised them as much as he despised the peasants, for he never found one who was his intellectual equal....

Lenin was the great simplifier, but there are no simple solutions.  He wanted to bring about the ideal state--and there is no doubt about the genuineness of his passion for the ideal state--but the ideal eluded him, as it has eluded everyone else.  Toward the end of his life he realized that after the Russian people had suffered and submitted to intolerable sacrifices under his dictatorship, he had led them along the wrong path.  "I am, it seems, strongly guilty before the workers of Russia," he declared; and those words were his genuine epitaph.  There are few rulers in history who have uttered so clear a mea culpa.

That Stalin should have been his successor was a fearful irony.  That course, brutal and paranoid dictator possessed none of Lenin's intellectual gifts and could scarcely write a sentence which was not a mockery of the Russian language.  Under him Communism became a tyranny of such vast proportions that it exceeded all the tyrannies the world had known up to his time.  Lenin, with his harsh intellect, his egotism, his phenomenal vigor, his always flawed yet ever impressive achievement, remained oddly human; Stalin was a monster.  Yet it is important to observe that there could have been no Stalin without Lenin.  Stalin was Lenin's child; and Lenin, who hated and despised and feared him, must bear sole responsibility for bringing Stalin to power.

Once Lenin had decided that all means were permissible to bring about the dictatorship of the proletariat, with himself ruling in the name of the proletariat, he had commited Russia to intolerable deprivations of human freedom.  His power was naked power; his weapon was extermination; his aim the prolongation of his own dictatorship....He could decree the deaths of thousands upon thousands of men, and their deaths were immaterial, because they were only statistics impeding the progress of his theory.  The butchery in the cellars of the Lubyanka [Prison] did not concern him.  He captured the Russian Revolution and then betrayed it, and at that moment he made Stalin inevitable.

The lawlessness of Communist rule was of Lenin's own making.  Ordinary human morality never concerned him; from the beginning he was using words like "extermination" and "merciless" as though they were counters in a game.  Whatever he decreed was law, and whoever opposed his decree was outside the law, and therefore possessing no rights, not even the right to breathe....

The state he brought into being proved to be more unjust and incomparably more tyrannical than the state he overthrew.  He announced that everything would be new, but in fact there was nothing new except the names; for all tyrannies are alike, differing only in their degree of tyranny.  The Cheka was only the tsarist Okhrana under another name:  more unpitying, more terrifying, and effective only when it exterminated opposed groups to the last man.  Under Stalin, the Cheka, more murderous than ever, became the real ruler of the country; and one by one its leaders died in the same manner as the victims.

When the rule of a country is given over to the secret police, then by the very nature of things it loses its humanity, places itself outside the frontiers of civilization, and possesses no history; for the repetition of crimes is not history.  The government which Lenin introduced, believing it to be new, was as old as man, for there is nothing new about tyranny....

Private Equity Industry Upset With Obama

Don Gogel, CEO of a leading private equity firm and moderate Democrat, was interviewed on Charlie Rose over the weekend.  In the course of the interview, Gogel made what I consider to be a strong defense of the private equity industry (which of course includes Romney's Bain Capitol).  Gogel also voted for Obama in 2008, and considers to have been a good President in many ways.  But because of the recent Democratic attacks on the record of Bain Capitol, Gogel is considering voting for Romney.

This is the kind of person whose loss may handicap the President in his effort to be reelected.  I'm not sure that he's totally defected yet, since it is clear that he's uncomfortable with much of the conservativism represented in the Republican Party.  But he will clearly be a bellwether as to whether Obama will succeed or not.

You can watch the interview with Gogel here.

Ps.  Here's another take of private equity from Rolling Stone that isn't quite so positive.
There's only one problem with Romney's story: It doesn’t describe most of what private equity firms actually do. The companies Romney holds up as successes – Staples, Sports Authority et al. – were not Bain private equity deals; they were venture capital investments in companies that Bain neither owned nor ran. All well and good: Venture capital is a good thing – essential for funding the growth of new and developing companies. But Romney didn't make his fortune through venture capital­; he made it through private equity – and private equity, as President Obama pointed out this week, is a very different proposition. "Their priority is to maximize profits," the president said of PE firms, and "that’s not always going to be good for businesses or communities or workers."

Here’s what private equity is really about: A firm like Bain obtains cheap credit and uses it to acquire a company in a "leveraged buyout." "Leverage" refers to the fact that the company being purchased is forced to pay for about 70 percent of its own acquisition, by taking out loans. If this sounds like an odd arrangement, that's because it is. Imagine a homebuyer purchasing a house and making the bank responsible for repaying its own loan, and you start to get the picture.

Wednesday, May 2, 2012

American Politics as Pro-Wrestling: The Legacy of Andrew Breitbart

I didn't know much about Andrew Breitbart, but after his recent death, I saw how important he was to many on the rabid Right.  And then I read an article this morning about him in Harper's by Thomas Frank.  Frank may be a little harsh and obviously one-sided about Breitbart, but the larger point that is important is the condition of our political debate these days, and how Breitbart seemed to exemplify what is wrong.
He started out as a man who loved to puncture Hollywood vanity, then became a VIP himself.  "Media is everything," he used to say, and by the end it was all he was—a caricature, as he reportedly confided in his final days to Sixties radical Bill Ayers. His articles and books, like the Supreme Court decisions of Clarence Thomas, were secondary and are now largely forgotten. What will be remembered is the ranting collection of pixels he leaves behind, those images of a stout man with graying hair and a snarling lip, saying something mean to someone.

As for Breitbart’s relationship with his one true love, the Internet, I think it is best demonstrated by recalling the way he once quarreled with a Gawker editor via instant message for three days. On and on the mighty champions fought, ultimately generating some 10,000 words between them while trying to hash out whether neo-Nazis could be described as right-wing. Here was an endless Iron Butterfly drum solo of pointless speculation and wandering rage, with no pauses to acknowledge things that are obvious to everyone or to check history books that might have cleared matters up quickly. Just two voices screaming at each other in the ether, their petty insults and accusations preserved for future generations.

For four decades now, the Breitbart model of political confrontation has been around in one form or another. The more I look back over its history, the more I am convinced that its closest evolutionary relative is pro wrestling. There are the same mock-feuds, the same posturing outrage, with the antagonists always avenging their vain selves or the wounded honor of their stage friends. The conflicts mean nothing.  There is nothing at stake. And in the end there is nothing to remember.