Preserving the economy without a restructure

I was having a conversation with a few friends the other day about how bad things were likely to get economically speaking and what a post-coronavirus recovery could look like.  Specifically what sorts of hard choices might need to be made when the economy reopens and what it might mean to lose restaurants, bars, concert venues, sporting events, shopping malls, etc as we know it.

It brought me back to my work on the housing collapse and foreclosure crisis, where over 9 million families in this country lost their homes due to (largely fraudulent) foreclosures from when the housing bubble started to pop through the economic collapse. During the response to the 2008 collapse, the Fed gave banks over $16 trillion in response. This amount of money, if still deployed but not given directly to Wall Street banks, could have paid off every underwater mortgage in America. Then it could have bought a home for every homeless family. Then it could have provided free college to all. And so on.

The amount given to banks was truly staggering – and it didn’t solve the problems. Millions were foreclosed upon. Housing values remained down. Massive amounts of wealth, especially in African-American and Latino communities, was destroyed. The Fed, with license from Congress and the Obama administration, pointed a money cannon at Wall Street and the American public barely got anything for it. But the banks stayed solvent and we did not have to go through an economic restructure or change the rules of the road in a substantive way in the industry that was culpable for causing the collapse.

This is relevant in the context of Covid-19 because right now we’re watching the federal government and the Federal Reserve find repeated ways to point a money cannon at business. Over $2 trillion in cash from the federal government and multiple rounds of liquidity from the Fed, with a current projection of up to $6 trillion. This has been done as already approaching 20 million people have lost their jobs and we are still figuring out the scope of the pandemic.

Long story short, we’re going to put an unthinkably large amount of money into the economy – mostly via financial institutions and giant companies – and early indications are that, like 2008 and beyond, the American people will see very little real outcomes from it.

How would I do things differently from the start?

  • Federal government pays all workers 80-100% of their wages, via their employer, regardless of income (I am for 100% but am open to being convinced a partial haircut is acceptable). Employers are banned from firing people. This keeps wages in peoples’ pockets, people with employer-provided health insurance on those roles, and minimal disruption to the labor market.
  • No rent or mortgage payments for the duration of the crisis. No foreclosures or evictions in this period.  The Fed backs up debt holders in the housing market & commercial RE market. You probably need to go ahead & have the Fed back up any securitized debt objects to prevent a massive wave of financial institution insolvency – but if we’re trying to avoid cataclysm, that’s fine by me.
  • Medicare for All for Covid, but for real – not Trump’s bogus allusions to it. No one should pay a cent for Covid testing, treatment, care or vaccine.

You do all this and people stay in their homes, get treatment, have economic security, and we don’t blow up the economy through social distancing and quarantines. You protect pretty much everyone but the investor class, who won’t be seeing their usual returns on non-securitized investment vehicles (like, say, restaurants or bars or sports clubs). But you basically punt the pandemic as an event that requires an economic restructure. This also would do the most possible for stopping the spread of the pandemic due to people not getting care they can’t afford or showing up to jobs while sick.

I would be very open to an economic restructure. I would be very open to Wall Street banks, hedge funds, and private equity vultures taking losses unto bankruptcy. I would be very open to using this moment to get Medicare for All, full-stop.

But simply put, if I wanted to see how the government could have acted in a way that would still put the massive amounts of money in play that are and will continue to be thrown at this problem, with a goal of minimizing change to how our economy works, then this would be what we should have done.

We’ll find out a few years after the crisis that whatever we ended up spending will have been enough for us to have the government do what’s listed above, to protect people, keep them sheltered, fed and healthy… but we won’t have done it. Instead we’ll have enriched Wall Street and protected wealthy investors from losses, with no meaningful public benefit to show for it.

Fatherhood & Bernie Sanders’ Humanism

“Are you willing to fight for that person who you don’t even know as much as you’re willing to fight for yourself?” – B. Sanders

I’ve spent a lot of time over this prolonged presidential primary thinking about the concept of hope and why, despite the exterior appearances of a cantankerous New Yorker, I find so much hope in Bernie Sanders and his presidential campaign. 

I believe it stems from becoming a father and experiencing politics with a sense of real consequences far beyond myself. It’s not an original thought to realize that having a child changed how I see the world. It wasn’t until my son was born a little over two years ago that I started to feel the things I believed in emotionally, as opposed to simply believing them intellectually. 

Having a child has shown me the lived value of another human life beyond my own. The persistent fear a parent has for the basic health and welfare of a child that starts helpless and who in time grows to have more and more ability (and at two, still no judgement).  I see this shift in basic stuff – a stronger emotional pull upon hearing of tragedy or a sense of grief at seeing someone experiencing hardship. Other times it’s big picture – a deeper sense of fear as to what looming global problems (climate change, rising right wing nationalism and anti-Semitism) could mean for my son. Through the experience of parenthood, I’ve grounded my politics in a way that is so much stronger, deeper, and more affirming than ever before. 

Life in this country is hard. Economic inequality and insecurity makes it hard. Racism, sexism, homophobia, xenophobia all make it hard. In the face of these things, not everyone responds to the experience of parenthood by looking outward. People have a tendency to start to build up little walls to protect this new thing that they feel is tenuous or delicate. Parochialism, territorialism and fear set in. Perhaps it’s why we’ve ended up a country so defined by who we fear and what we lack. 

We need hope in the face of these systemic hardships and self-imposed walls. And the thing that is so special about Bernie Sanders’ campaign for President is the way in which he has quietly staked out the most hopeful campaign in my adult lifetime. 

Bernie asks us to look at our neighbors not as others, but as people with the same material, emotional, and familial needs as ourselves. When we do this, we can see our respective hardships. We can see the value and importance of providing care, regardless of cost. Of having good paying jobs with dignity and rights. Of freeing people from the hopelessness of student debt. Of ending military adventurism and investing in solutions to the climate emergency that is already devastating communities across our country. 

“I look around and see so many other people barely holding on,” Ms. Yanos said, choking back tears as her kids did their homework at the kitchen table. “It’s not that I think it will be all rainbows and sunshine if he’s elected, things won’t change overnight. But people younger than me, they are going to demand change in their lifetime.” (NYT)

Politics is fundamentally about how we share our brief time together on this planet. It is about how we care for each other when we are sick and how we protect each other when we are vulnerable. It is about the extent to which we choose as a society to either honor the dignity of our neighbors and other people around the world, or how we distance ourselves from them and deny their humanity through, at best, indifference and, at worst, state sanctioned violence. Through parenthood I’ve felt the difference between these choices like a gut punch. How could we ever choose to not affirm each others’ worth?

Bernie’s platform is one that uniquely puts forward the value of every individual human life. His call to fight for someone you do not know just as hard as you’ll fight for yourself is a bold act of faith in each of us to see the world in the same way. To see that each of us has our own struggles, our own complexity, our own unique value as human beings, worthy of not just protection but societal action on our behalf. From this act of faith comes solidarity and from solidarity comes the power to affect change together.

I don’t particularly care what you call Sanders’ platform – whether it’s democratic socialism or a mere modernization of FDR-style Democratic Party liberalism. What inspires me is Bernie Sanders’ humanism. The belief that the problems any one of us faces merit a president who will fight for them, not because they are big demographic problems that have economic impact, but because, god damn it, it is our friends and neighbors who are dying without care or rationing insulin or having to work three or four gigs to live paycheck to paycheck. That a better world is possible. That this better world can be achieved if we work together in solidarity and with an embrace of our shared humanity.

Sanders has described the effort as a kind of support network for people left out of mainstream politics — an effort to help millions of people, in his words, “feel less alone.” (Buzzfeed)

Bernie is at his best when he gives us not his litany of villains (though knowing the enemies who stand in the way against a better world is important), but when he gives us the space to find hope together. Hope is so important, especially when the economy works for almost no one, when we face a rising global pandemic and a climate catastrophe, when we have been failed by our leaders and it feels as if things are just slipping past the point of salvation. 

We need to have the discipline to find hope, both in each other and in a political movement. I want to be a part of a politics that values each individual life and fights for solutions to the problems we face that are grounded in the goodness of each of us. I want for the audacious hopefulness of Bernie Sanders’ campaign to inspire millions upon millions of people here in America to participate in the political process, demand a better world and build it alongside people they do not know. The urgency of this moment demands it.

I can’t recommend the pathway of having a child to find humanism in your politics. We don’t have time for that. But what I can do is encourage you to listen to what Bernie Sanders is asking of us with an open mind and an open heart, free from cynicism and with a belief that a better world is possible. 

The primary is not over. Biden has not yet won. There is time for us to look around, to look at our country and the need for hope, solidarity and a politics grounded in the value of each and every one of us and still elect Bernie Sanders as President. 

Volunteer. Talk to your friends and neighbors. Donate. Vote.

Self-Identification & Primary Hostilities

In case you haven’t been paying close attention, the Democratic presidential primary has dramatically heated up in recent weeks. Bernie Sanders has closed the gap in polling in Iowa and nationally, while building up a lead in New Hampshire. As polls have tightened, the Clinton campaign, their surrogates and many online supporters have gone into attack mode.

What is disheartening to me is that this could be a primary where big ideas are debated and we have a serious discussion of what direction the Democratic Party wants to take the country in coming decades. To be sure, we are having this debate, however it is being played out in increasingly uncivil tones. I’m no shirking violet and I do not think there’s anything wrong with heated political debate. But it is frustrating to see friends and organizations I respect wade into vicious attacks on each other over the candidates and who people support.

I have a sense as to what is causing the rising acrimony. Policy ideas are, generally, fact oriented things. Many different ideas can be easily arranged on a spectrum, with the political philosophies of left and right representative of different polls, and policy solutions conforming towards different points on the spectrum. Arguably there is no normative value associated with different spots on the spectrum. The concept of single payer healthcare is inarguably to the left of Obamacare, which is inarguably to the left of a system where there is no public subsidy for private health insurance.

Where this becomes fraught in today’s political environment is that people have very different, values laden senses of political identifiers. For people who use them to describe themselves, words like “progressive,” “centrist,” or “conservative” tend to mean “a good person.” Thus someone may proudly claim to be a “bold progressive,” a “staunch conservative,” or a “realistic centrist” as if those adjectives increase the person’s worth. And in the tribal realm of politics, individuals apply their assignation of self-worth not just to how they view themselves, but by supporting candidates like them, who fit these same billings and amplify their own worth.

The problems emerge, as we are seeing in the Democratic primary, when someone views themselves as a “bold progressive” and supports a candidate like Hillary Clinton in a race that also includes Bernie Sanders, an inarguably more left (and thus “progressive” in today’s parlance) politician. To say that Sanders is to Clinton’s left is a statement of fact – it has no moral value, nor does it impart any assessment on the worth of the candidates nor their supporters. It just is.

But for people who explicitly or implicitly take “progressive” to normatively mean “a good person,” then someone being more progressive means that they can lay claim to being “a better person” than our Clinton supporter. No one likes to feel like they are worth less than they see themselves, so they fight back against this idea (even though it is purely implicit and premised on the normative application of “progressive” as a designation of self-worth). They defend themselves from this perceived attack. They look for the tiniest of holes in the ideological spectrum, searching for issues to find spots or moments where their preferred candidate is to the left, and thus the True Progressive. We see this in the primary fight where the Clinton campaign has sought to turn Sanders’ lifetime “D-” NRA rating into a liability based on a handful of bad gun votes. The triumphant Clintonite response to this, “A-ha! Bernie is in the pocket of the NRA! He is no True Progressive!”

This also speaks to why we are seeing a real hatred of Sanders emerge in the Democratic establishment, which is almost exclusively backing Clinton and increasingly public in their disdain for Sanders. Democratic “elites” are flocking to Iowa, driven in part by fear and part out of a hatred of Sanders.

The campaign and its allies had planned all along to escalate their efforts at this point, as the caucuses near. However, Democratic governors, senators and other party leaders said they are increasingly alarmed at the prospect of Sanders, a self-described democratic socialist, surfing a wave of populist frustration to the nomination. And they were quick in interviews this week to dispense advice to Clinton.

Within the Democratic elite, where Clinton enjoys near-universal support, the antipathy toward Sanders has grown steadily as he has emerged as a potential Clinton slayer. All week, McCaskill has been loudly predicting an electoral catastrophe if her party nominates Sanders.

As much as there will be a massive rending of garments in Washington if Hillary Clinton fails to win from the position of presumptive nominee, the Clinton supporters are not wearing desperation well. They’re taking it personally and it is showing.

At least, this is what I am seeing. It could explain the anger and hatred at the increasing success of Sanders’ campaign. If everyone feels like he exists as a finger in their eye, a statement that they are not as good people as they thought they were, then anger is an understandable reaction. Whether it is justified is a different question, but at least this could explain it on an individual, emotional level.

Jim Himes: Pro-Austerity Wanker

This ad from Wall St Democrat and CT-04 incumbent Jim Himes is worth flagging.

In it, he compares his desire for “bipartisan” budget cuts to social spending alongside the raising of the US flag at Iwo Jima, walking on the moon and Martin Luther King Jr. He then approvingly cites the Pete Peterson funded Concord Coalition to support his pro-austerity position. Himes has worked closely with David Walker, the face of Peterson’s pro-austerity, anti-Social Security work, so this ad is no surprise. Himes, a former Goldman Sachs VP, has always been a voice for austerity from within the Democratic Party. But man does this wank hard.

Michael Hudson on #OccupyWallStreet

Michael Hudson, posted at New Economic Perspectives:

The situation is much like that from Iceland to Greece: Governments no longer represent the people. They represent predatory financial interests that are impoverishing the economy. This is not democracy. It is financial oligarchy. And oligarchies do not give their victims a voice.

So the great question is, where do we go from here? There’s no solvable path within the way that the economy and the political system is structured these days. Any attempt to come up with a neat “fix-it” plan can only be suggesting bandages for what looks like a fatal political-economic wound.

That is the spirit of civil disobedience that is growing in this country. It is a quandary – that is, a problem with no solution. All that one can do under such conditions is to describe the disease and its symptoms. The cure will follow logically from the diagnosis. The role of OccupyWallStreet is to diagnose the financial polarization and corruption of the political process that extends right into the Supreme Court, the Presidency, and Mr. Obama’s soon-to-be notorious Committee of 13 once the happy-smoke settles from his present pretensions.

I think this gets at a lot of the diagnosis by Clay Shirky I was talking about earlier.

Press reaction: Rick Perry, shallow thinker

Reading some of the reviews of last night’s Republican presidential primary debate, I can’t help but praise the Washington press corps for the various, creative ways they say Rick Perry makes George W. Bush look like a strong candidate for the Fields Medal. Here’s a sampling:

Jonathan Chait, The New Republic:

Perry treats questions as interruptions. … His total liberation from the constraints of reason give Perry a chance to represent the Republican id in a way Romney simply cannot match.

Roger Simon, Politico:

What his answers sometimes lacked in logic was made up for in enthusiasm, and after some initial nervousness -he gripped the sides of his podium as if he were hanging onto a life raft – Perry settled down to his talking points.”

David Frum, Frum Forum:

I was shocked and surprised at how unprofessional Perry’s debate performance was. Nervous, irritable, stuttering, floundering, he missed opportunity after opportunity.

What confidence can anybody have that Perry will come to work as president any better prepared than how he come to this debate or that he’ll show more insight and intelligence than he did in this first national outing ? Not much.

Aaron Blake & Chris Cillizza, Washington Post:

One of those questions is whether he can survive the detailed policy discussions. Challenged Wednesday to talk about which climate scientists he most agreed with in his doubts about global warming, Perry stumbled through a pained response that included a comparison between global warming doubters and Galileo.

While doubting global warming won’t necessarily hurt him in a Republican primary, the exchange showed that Perry can get tripped up. While he may have clear the bar set for his first debate, he also showed he can stumble in a way that Romney has not.

Gail Collins, New York Times:

Rick Perry, possibly the first major presidential candidate opposed to the direct election of U.S. senators since the advent of the Bull Moose Party. He did not do anything superweird at his maiden presidential debate, unless you count bouncing up and down and cocking his head a lot. Or claiming that the reason a quarter of the Texas population has no health insurance is because of government interference.

Cross-posted from AMERICAblog Elections: The Right’s Field


Al Gore has an impressively argued 7,000 word essay in Rolling Stone this week about climate change. He touches on other issues as well, namely the systemic problem we have in America of confronting lies and distinguishing them from fact. He writes:

In the same way, because the banks had their way with Congress when it came to gambling on unregulated derivatives and recklessly endangering credit markets with subprime mortgages, we still have almost double-digit unemployment, historic deficits, Greece and possibly other European countries teetering on the edge of default, and the threat of a double-dip recession. Even the potential default of the United States of America is now being treated by many politicians and too many in the media as yet another phony wrestling match, a political game. Are the potential economic consequences of a U.S. default “real”? Of course they are! Have we gone completely nuts?

We haven’t gone nuts — but the “conversation of democracy” has become so deeply dysfunctional that our ability to make intelligent collective decisions has been seriously impaired. Throughout American history, we relied on the vibrancy of our public square — and the quality of our democratic discourse — to make better decisions than most nations in the history of the world. But we are now routinely making really bad decisions that completely ignore the best available evidence of what is true and what is false. When the distinction between truth and falsehood is systematically attacked without shame or consequence — when a great nation makes crucially important decisions on the basis of completely false information that is no longer adequately filtered through the fact-checking function of a healthy and honest public discussion — the public interest is severely damaged.

Gore also refuses to pull punches on President Obama’s performance on climate change:

But in spite of these and other achievements, President Obama has thus far failed to use the bully pulpit to make the case for bold action on climate change. After successfully passing his green stimulus package, he did nothing to defend it when Congress decimated its funding. After the House passed cap and trade, he did little to make passage in the Senate a priority. Senate advocates — including one Republican — felt abandoned when the president made concessions to oil and coal companies without asking for anything in return. He has also called for a massive expansion of oil drilling in the United States, apparently in an effort to defuse criticism from those who argue speciously that “drill, baby, drill” is the answer to our growing dependence on foreign oil.

Yet without presidential leadership that focuses intensely on making the public aware of the reality we face, nothing will change. The real power of any president, as Richard Neustadt wrote, is “the power to persuade.” Yet President Obama has never presented to the American people the magnitude of the climate crisis. He has simply not made the case for action. He has not defended the science against the ongoing, withering and dishonest attacks. Nor has he provided a presidential venue for the scientific community — including our own National Academy — to bring the reality of the science before the public.

I think that like labor law reform, immigration reform, gay rights and restoring the Constitution, the president is just content to not put political capital behind getting liberal things done, especially after the drawn out healthcare debacle. Obviously this is not a course of action that I support.

Cornel West & Obama

I was a supporter of Bill Bradley in the 2000 Democratic primary, largely because of a speech I saw him give in the spring of 1999 on race relations and the broken criminal justice system. Bradley was moralistic, clear-minded, and willing to talk about racism in a way that I’d never seen a white politician talk about it before. I saw Bradley again the night before the New Hampshire presidential primary. Bradley didn’t have the same fire and energy he had almost a year before and looked thoroughly worn-out by the campaign process. But introducing Bradley that night were the two most passionate and effective progressive speakers I’ve ever seen: Paul Wellstone and Cornel West. Wellstone gave a full-throated, fist-pumping speech to rally the crowd and West eloquently talked about the reasons he saw Brother Bradley as the best choice for President. I honestly don’t remember the details of either of their speeches well, but what was clear was that both Wellstone and West held exactly the same sort of view that I held about what a person’s political views should be, what the role of government should be, and how we can work together to make America a better place for all of its citizens.

Truthdig has a long article about Cornel West and his disappointment with President Obama. West was a strong and early support of Obama’s campaign. Yet Chris Hedges reports a massive rift that between himself and Obama, driven by Obama’s choices as President. West describes his disappointment at the opportunity Obama missed by not forcefully trying to stop the transfer of wealth from working Americans to wealthy elites and educate the public on the tragic path we were on by catering to Wall Street before Main Street:

“This was maybe America’s last chance to fight back against the greed of the Wall Street oligarchs and corporate plutocrats, to generate some serious discussion about public interest and common good that sustains any democratic experiment,” West laments. “We are squeezing out all of the democratic juices we have. The escalation of the class war against the poor and the working class is intense. More and more working people are beaten down. They are world-weary. They are into self-medication. They are turning on each other. They are scapegoating the most vulnerable rather than confronting the most powerful. It is a profoundly human response to panic and catastrophe. I thought Barack Obama could have provided some way out. But he lacks backbone.

“Can you imagine if Barack Obama had taken office and deliberately educated and taught the American people about the nature of the financial catastrophe and what greed was really taking place?” West asks. “If he had told us what kind of mechanisms of accountability needed to be in place, if he had focused on homeowners rather than investment banks for bailouts and engaged in massive job creation he could have nipped in the bud the right-wing populism of the tea party folk. The tea party folk are right when they say the government is corrupt. It is corrupt. Big business and banks have taken over government and corrupted it in deep ways.

“We have got to attempt to tell the truth, and that truth is painful,” he says. “It is a truth that is against the thick lies of the mainstream. In telling that truth we become so maladjusted to the prevailing injustice that the Democratic Party, more and more, is not just milquetoast and spineless, as it was before, but thoroughly complicitous with some of the worst things in the American empire.

Obviously this is an analysis of economic forces and the disenfranchising of working Americans to further the benefits of the Top 2% that I agree with. West goes further, in terms of his electoral prescription for a solution and identifying what needs to happen in America:

I don’t think in good conscience I could tell anybody to vote for Obama. If it turns out in the end that we have a crypto-fascist movement and the only thing standing between us and fascism is Barack Obama, then we have to put our foot on the brake. But we’ve got to think seriously of third-party candidates, third formations, third parties.

“Our last hope is to generate a democratic awakening among our fellow citizens. This means raising our voices, very loud and strong, bearing witness, individually and collectively. Tavis [Smiley] and I have talked about ways of civil disobedience, beginning with ways for both of us to get arrested, to galvanize attention to the plight of those in prisons, in the hoods, in poor white communities. We must never give up. We must never allow hope to be eliminated or suffocated.”

West is being very deliberate with his thoughts. He’s confronting himself for failing to recognize what was happening sooner and relying on the hope of Barack Obama’s potential over what he was seeing when Obama tapped Summers, Geithner, and Gates to help him run the country. This is an undoubtedly hard thing to come to terms with. I don’t doubt that civil disobedience by leading figures like West and Smiley is a necessary condition towards an awakening to the economic dangers our country face. As I wrote yesterday, I don’t know what it takes to pull together the disparate anger manifesting itself in pro-worker, pro-economic justice, pro-immigrant and racial justice movements. But these are all different symptoms of the same disease that ails America. I would love to hear more from Professor West about how he thinks these different threads can be tied together into an effective force for change.

The Cost of Our Choices

I read Matt Taibbi’s Griftopia last year and one comparison stood out about the scale of the bailout money given to Wall Street banks vis a vis the US housing market. It turns out this comes from Nomi Prin’s, It Takes a Pillage. Taibbi gives the full quote in his latest mailbag post at Rolling Stone:

Here are some numbers for you. There were approximately $1.4 trillion worth of subprime loans outstanding in the United States by the end of 2007. By the first quarter of 2009, there were foreclosure filings against approximately 4.4 million properties. If it was only the subprime market’s fault, $1.4 trillion would have covered the entire problem, right?

Yet the Federal Reserve, the treasury, and the FDIC forked out $13 trillion to fix the housing “correction”… With all that money, the government could have bought up every residential mortgage in the country – there were about $11.9 trillion worth at the end of December 2008 – and still have had about a trillion left over to buy homes for every American who couldn’t afford them.

What a simply stunning display of mistaken priorities.