Blog entry

Are We Moving Ahead -- or Heading Back?

Sara Robinson — Wed, 15 Oct 2008 17:07:01 -0400

Our fellow Americans, at long last, are getting it. Not only is the Age of Reagan over; it's becoming increasingly clear that the entire post-WWII order has come to the end of its run. The world as we have known it is passing away; and with it, so does our ability to put much faith in the future. Everywhere you go these days, the discussion ultimately comes down the underlying uncertainty: So...that happened. Now: what comes next?

In the futures biz, we call this a discontinuity -- the place where one long-standing set of trends comes crashing down (and with them, the power bases and institutions that were built on those once-solid assumptions); and a whole new future under a completely different set of rules and assumptions becomes possible. A lot of the debate that's being hashed out in blog comments and over dinner tables around the country has to do with whether this moment is an unraveling that will end with America as a backward, insular, second-rate nation; or a once-in-a-lifetime opportunity to move forward toward a new and better way of life. We're increasingly aware that the choices we make now will set in place the trends and rules that govern the next era; and we feel the eyes of our grandchildren on us as we try to make the right ones.

Into that discussion, I herewith offer a theory of social change that may shed some light on what the potentials and pitfalls of this moment are. This theory, worked out by psychologist Clare Graves in the late 1950s, observes that cultures go through a natural progression of developmental stages as they grow from small clan structures to large, complex industrial states, and then onward to social democracy. Popularized by Chris Cowan and Don Beck in the mid-1990s under the term "Spiral Dynamics," it's an old theory -- but one I'm pondering often these days as I try to peer out and see what might lie ahead.

Let's start with a quick summary of the stages:

1. Subsistence. The first human organizations are small family bands that barely endure a hand-to-mouth existence. Life is nasty, brutish, and short -- and completely focused on the basics of survival. The priorities are eating, sleeping, hunting, breeding, and seeking shelter -- there is no time for anything else.

2. The Clan. Here, family bands coalesce into a larger unit that may include up to a few hundred people. As the burdens of survival are shared, culture begins to rise and flourish. The clan may be nomadic at first; but as this stage ripens, it will settle into a permanent village. Fiercely collectivist and relatively egalitarian, these groups are led by a council of elders, under the spiritual direction of shamans and the more practical insight of war chiefs. Nature gods play a central role in the way the clan identifies itself and understands the world. It's usually hard for members of a clan to imagine themselves as having independent identities apart from their tribe.

3. The Warlord/King. Eventually, one of the war chiefs aggregates enough power to take control of the village and its surrounding resources, setting himself up as king. And from that point on, his every whim is law; and feeding his ego becomes the central mission of society.

People cooperate because this centralized authority does usually pave the way for a more tightly organized and efficient society. Loyalty is a prized virtue, but threats to power are dealt with more brutally than at any other stage. This phase is also when social hierarchies run the deepest, with women and foreigners always on the low end of the pole. Cultures in Stage 3 typically put their resources into building walls, armies, palaces, and monuments to war gods -- all of which are designed to enhance the power and prestige of the king.

4. The Institutional State. Successful kingdoms eventually create a large community of institutions into which the king delegates his power. Over time, the power of the throne devolves increasingly into the hands of these administrative, religious, educational, financial, and trade bureaucracies. Usually, Stage 4 begins when people have had enough of a bad king's excesses -- and also have enough trust in their institutions to allow them to govern instead. It's where we finally see democratic forms of government typically begin to take root, as the rule of one man is rejected in favor the rule of common law. Even religion becomes more hierarchical and rule-bound, dependent on scriptures and popes to maintain order.

Stage 4 societies are big infrastructure builders. This is where you see the biggest investments in roads, schools, utilities, and other amenities that add to the common wealth. This establishes a solid political, social, and physical infrastructure for the growth of an industrial base, and facilitates reliable markets, currency, and courts -- and the emergence of a national identity. On the downside, this stage also demands a high level of conformity and rule-following -- and that, in the end, is what pushes the society onward to Stage 5.

5. The Entreprenurial/Corporate State. Eventually, the business and finance people begin to chafe at the regulatory excesses of late Stage 4, and press for a liberalization of the rules that limit their growth. At the same time, there's usually a social liberation movement that asserts the rights of the individual, and rejects Stage 4 conformity. Newly freed corporations take over a bigger and bigger role in governing (or not governing) an anything-goes society. Trade networks expand exponentially, and vast fortunes are amassed -- which leads to the rise of oligarchies. Financial dealings grow increasingly shady as oversight mechanisms vanish. Social inequality grows, and trust in institutions evaporates. Eventually, Stage 5 ends as excessive greed runs the country into financial ruin.

6. The Collectivist State. The excesses of Stage 5 sensitize the culture to the dangers of greed and individualism, and the next phase represents a decisive collective response. In this stage, social democracies proliferate; and there's a renewed emphasis on equality, justice, sustainability, and the common good. Business is put under strong governmental control. Public policy focuses on civic goods, and taking the long-term view. Infrastructure decisions are aimed at improving overall quality of life, rather than aggrandizing political power or enriching private interests.

The difference between Stage 6 and Stage 4 is that the later stage is far more careful to nurture the needs of individuals; rejects most forms of hierarchy (which is what drives Stage 4 bureaucracies), and is far more deliberately collectivist. Where Stage 4 sets the stage for entrepreneurship, Stage 6 seeks to control it and bend it toward the common good.

7. Networked Democracy. We're now getting into largely uncharted territory: few societies in history have ever gotten as far as Stage 6, let alone moved on beyond it. But Graves guessed that a mature Stage 6 would eventually become so complex that it would make sense to break it down into smaller parts. The result would be a confederation of local and regional governments that worked closely on national-level issues and held to a common set of laws and standards; but retained a strong, diverse range of local cultures, economies, religions, and languages.

Though he was writing long before the personal computer was invented, Graves' vision of a collaborative political organization based on a coequal-nodes-on-a-network model is instantly recognizable to those of us who do political work on the web today. And though the US state model was an early prototype, the EU may well be the first functioning example of a Stage 7 society.

A few things to note about this theory:

First, this is emphatically not a progress theory, in which higher levels are assumed to be "better" or "preferable" to lower ones. Rather, this is a development/evolution theory that describes of how one kind of social order lays the foundation for other, more complex forms down the road. Each level is necessary and valid; and each has healthy and unhealthy ways of manifesting itself. In fact, given the universality of this pattern, it's arguable that each stage may well be the most reasonable way to organize humans under the given conditions.

Second, you may have noticed that Stages 1, 3, 5, and 7 all put their emphasis on power exercised by individuals; and 2, 4, and 6 all put power in the hands of the collective. It turns out that we fairly regularly oscillate between both impulses as we grow healthy societies.

Third, Graves noted that there's an ontology-recapitulates-phylogeny aspect to his model. He argues that the development of societies mirrors the development of individual humans. In Stage 1, we are babies, preoccupied with eating, sleeping, learning, and surviving. In Stage 2, we are toddlers and young children, strongly identified with our families, dependent on parental authority, and given to magical thinking. By Stage 3, we have entered the early school years, and are preoccupied with the relationship between rules, power, and asserting the demands of our own ego. In later childhood, we accept the rules and norms of society, become more conforming, learn about teamwork, and settle into Stage 4.

Come adolescence, we erupt into Stage 5: self-absorbed, eager to meet risk, and focused intently on establishing our own futures, often without much regard for what our ambitions might cost others. As adulthood sets in and we take responsibility for children, homes, careers, and enterprises, we move to Stage 6, which demands that we take a broader, more balanced and holistic view when weighing priorities. And finally, later in life (if all goes well), we become autonomous actors again, this time empowered with a lifetime of skills and insight that will make us very effective in working on behalf of the larger society.

Finally, it's important to note that Graves' model is not a one-way trip. Nations under tremendous economic, environmental, or military stress can and do take steps back down the ladder. Generally, this re-simplification gives them a better chance to regroup and restructure themselves to adapt to hard times. Nor is the progression inevitable: static societies can settle into a stage and stay there for centuries (like India); or slide back and forth across the border of two adjacent stages for generations.

One good example of the whole model in action is Saddam's Iraq, which was a late Stage 3 country that was rapidly laying down the institutional infrastructure to bring it to Stage 4. (There were solid financial, educational, and physical institutions in place that people trusted; a national identity was finally emerging: and Saddam's sons were so notoriously brutal that the likelihood of a democratic revolution at his death, or shortly thereafter, was high.) They were getting close enough that the Bush Administration's stated objective to "bring democracy to Iraq" (e.g. force it into Stage 4) was probably possible if they'd managed the occupation correctly and honestly.

But, of course, that wasn't the real objective; and their handling of it was neither correct nor honest. Instead, Bush's corporate cronies were eager to fast-forward the country directly to Stage 5, where it could be turned into a profit center. It apparently never occurred to them that this transition is impossible without a strong late-Stage 4 government in place to build infrastructure, guarantee currency, and enforce contracts -- though some of them are finally realizing this now.

Ironically, though, the end result of the invasion was to push the country back down the ladder toward late Stage 2/early Stage 3. Iraq today has been busted back to a feudal state, its infrastructure in shambles, its politics dominated by a resurgent group of tribal religious leaders and would-be warlord/kings. In chaotic and violent conditions, it's natural for people to hand over power to strongmen who can maintain basic order and enable society to function coherently. The results are hardly paradise from a political perspective; but people will eagerly endorse it if it's the only way on offer to ensure their own survival and security.

Since the current generation of Iraqis has had a strong taste of a stable, modern Stage 4 society, we can hope that they'll be strongly motivated to move back out of this phase soon. However, if things go on like this for more than a couple of decades, this generation will pass -- and their memories of how (or why) to build a next-stage state will pass with them. And so will their hopes of avoiding the fate of Afghanistan, which is another example of a country that devolved all the way back to a clan structure.

So where's America in all this? Historically, we were one of the very first Stage 4 nations to emerge, and have had several flirtations with Stage 5 through the years (every one of which ended, predictably enough, in financial ruin). In the FDR era, we were well on the way to establishing the social democracy predicted for Stage 6; but the corporatists dragged us back to Stage 5 -- and held us there for decades.

It's also interesting to note that in times of transformative crisis -- the Revolution, the Civil War, WWII, and now -- we've always invested our presidents with extraordinary powers that were, in hindsight, dangerously king-like. Under this model, a slight reversion to Stage 3 at such moments might even be considered a healthy impulse. Times of high chaos are usually resolved more quickly -- and with better results -- when there's one person firmly in control of society's institutions, setting a clear vision for the future, and actively organizing us to get there. We've been fortunate in the past to be able to trust that power to the judgment of transformative presidents like Washington, Jefferson, Lincoln, and Roosevelt -- all of whom made mistakes, but generally had their hearts in the right places. (The first three were affirming the primacy of the Stage 4 institutional state; FDR, as noted, was peeking over the horizon at Stage 6.) On the other hand, our current president is the textbook example of what hell can be unleashed when we put this unusual level of power into the untrustworthy hands of a Stage 3 tyrant wannabe.

You can hear both of these possibilities at work in our current conversations. On one hand, there's plenty of fear that we're under the kind of economic and environmental pressure that would force us to reorganize under a more simple structure -- maybe even all the way to a Stage 3-style authoritarian government. There's certainly no shortage of Americans who'd like to take us there; and their numbers may grow as the crisis deepens. Our usual tendency to give extraordinary powers to crisis-era presidents will be taken as evidence that this is happening.

But, on the other hand, there's also a growing awareness that the late-Stage-5 breakdown we're enduring now presents a historic opportunity -- and, in fact, is a natural gateway -- through which America can finally step into the Stage 6 green democracy so many of us have envisioned for so long. The social democracies of Europe confronted this same transition in the aftermath of World War II, and chose to domesticate their feral financiers and turn themselves into more sustainable Stage 6 societies. Now, it could finally be our turn.

No model is complete in and of itself; but a good theory can allow us to draw the right lessons from history and understand the underlying forces at work when the current trends evaporate and clues on the ground grow thin. I'm finding a lot of reassurance in Clare Graves' spiral dynamics model right now. It clarifies the threats -- and possibilities -- that this moment offers America. And it offers historical support for the idea that our salvation lies in greater government involvement in creating a humane and sustainable future -- and that we now have a rare opportunity to make that next stage a reality.

MSNBC CLIP: Discussing McCain's Faux Populism On MSNBC w/Maddow

David Sirota — Wed, 15 Oct 2008 12:08:13 -0400

During my trip to Rochester and now New York City, I appeared on Rachel Maddow's MSNBC show last night to review John McCain's latest economic ideas. You can watch the clip here (and if you like the discussion and appreciate them having on progressive voices like me and others, shoot the show an email at rachel@msnbc.com and let them know):

What we are seeing from McCain is old-school right-wing populism first made famous by Ronald Reagan. Package tax cuts for the wealthy as a gift to regular folks at a time of economic crisis. In the extended entry, I'll break down the key tenets of McCain's plan to see who it really benefits.

Up first is McCain's proposal to slash capital gains tax rates. Let's ignore the fact that the Wall Street meltdown means most Americans right now don't have much capital gains. Let's just look at who a capital gains tax cut benefits: namely, millionaires.

As the Center for American Progress notes, almost two-thirds of all capital gains taxes are paid by people making more than a million dollars a year. McCain said he doesn't want to incite a stock sell off, but as the New York Times noted, "a cut in capital gains tax rates in 1997 to 20 percent from 28 percent encouraged long-term holders of assets." University of Texas economist Jamie Galbraith put it this way: "It's an invitation for everyone who has stock to sell it and get out, which would collapse the market." Perhaps worst of all, capital gains tax cuts do not substantially boost investment. As the Brookings Institution reports, "cutting the top gains rate to 20 percent would raise private investment by less than 0.1 percent of GDP."

McCain's mortgage plan is much the same thing. He promises he's "not going to spend $700 billion of your money just bailing out the Wall Street bankers and brokers who got us into this mess." But buying mortgages off the books of banks without writing those mortgages down means taxpayers will almost surely be assuming huge losses. A better course of action, as I wrote in this week's column, is to buy stocks in banks and leave the bad mortgages on banks' books.

The parts of McCain's plans that aren't offensive are - at best - ineffective. For instance, he's making a lot of hay out of temporarily suspending rules that force seniors to start withdrawing their 401k and IRA money at age 70.5. But as Dean Baker notes, federal law only mandates a withdrawal of 4 percent of those monies, and with most people having less than 96 percent of their retirement savings in stocks, this change won't mean much.

Then there is McCain's plan to suspend taxes on unemployment benefits. This is a decent idea - but let's just remember, it was Ronald Reagan who created this tax in the first place.

The good news is that the economic debate is largely leaving McCain in the dust. The Treasury Department has been shamed into buying bank stock, after bailout opponents and world leaders demanded such a course. The problem is that Henry Paulson is still insisting on trying to forge a giveaway to his Wall Street buddies.

For example, Paulson is insisting on only buying nonvoting shares of banks. As the New York Times reports, "That means the banks’ current boards and current management — the same people who got the country into this mess — will still be making all of the decisions." Additionally, Paulson is only buying preferred shares that get a 5 percent interest return for taxpayers - a far lower rate than a private businessman would get in driving a hard bargain (for instance, Warren Buffett got 10 percent when he recently invested in Goldman Sachs).

So while McCain's fake populism is thankfully being relegated to irrelevance, we've still got a lot of work to do to get our government to do the right thing when it comes to this financial crisis.

Missing From The McCain Comeback Plan: Straight Talk

Bill Scher — Wed, 15 Oct 2008 11:36:09 -0400

Sen. John McCain is losing. He said so himself in his speech yesterday. Candidates don't usually admit such a thing, so that qualifies as straight talk.

But most voters don't want straight talk about political prospects. They want it about the issues that affect them directly, first and foremost, the economy.

McCain is losing because of the economy. His campaign said so. When it pulled out of Michigan, a campaign advisor told the Washington Post it was because Michigan is an "economic basket case." The campaign was implicitly saying it could not compete on the subject.

McCain has some grasp that conceding defeat on the economy is a mistake, as evidenced yesterday by his delivery of an economic speech.

In the speech, he sought to connect with the rising populism, talking about the "reckless conduct" of Wall Street, promising "responsible regulation" because "the moment requires that government act."

But I suspect after being hammered as out of touch for repeatedly insisting that the "fundamentals of our economy our strong," and calling himself "fundamentally a deregulator," he needs to offer much more dramatic straight talk to convince voters he truly gets what went wrong and has a vision to put the economy back on track.

Straight talk would include taking personal responsibility for his votes that deregulated the financial markets.

He would not need to take all the blame. As today's Washington Post details, deregulation was a bipartisan effort in the late 1990s and 2000. But acknowledging and learning from mistakes is a hallmark of a strong leader. McCain is talking regulation now, it would have more resonance if he admitted he is a convert.

Straight talk would involve making a cleaner break from the policies of President Bush.

He's trying, saying the last eight years amounted to "waiting for our luck to change." Yet in his speech, McCain undermined his break-with-Bush goal by making the same exact tax cut arguments that Bush made through his presidency -- tax cuts for wealthy investors will lead to more jobs. That conservative tax policy has been in place for eight years and clearly did not create jobs and strengthen the economy. So the old tax cut arguments have lost their populist punch and now fall flat.

Straight talk would also require dropping plans for a spending freeze.

Because his other economic message in the last debate was a smart one -- energy independence -- but that goal requires public investment, not a spending freeze. He talks of supporting clean energy, as well as "clean coal" and building 45 nuclear power plants. The $18 billion in earmarks he wants to eliminate would only pay for one nuclear power plant. Where would the rest come from? Only straight talk could tell us.

Some might argue that McCain shouldn't even try to compete on the economy, and should stick to character-based attacks. But that would be just as foolish as Democrats during Bush's first term saying they couldn't compete on national security so they would only talk about the economy.

Politicians don't always get to decide what issues on our people's minds. If people are worried about being blown up, you better have something to say about how you would prevent that. If people are worried about our economic foundation crumbling at our feet, you better have something to say about how you shore it up.

And you better talk straight when you say it.

The Next Fight

Robert Borosage — Wed, 15 Oct 2008 10:08:38 -0400

Hey, "my friends," about the economy? "How about a little straight talk?"

All that palaver about cutting spending, balancing the budget? Ruinous. Can't happen. We're going to have to borrow and spend a boatload of money to get this economy going.

And tax cuts? That won't do it; we have to rebuild America. Getting this done is the next big fight that the next president will face.

You won't hear that from Sen. John McCain Nor is it conventional wisdom. Tom Brokaw and other commentators demand that the candidates choose "priorities," or pledge to curb entitlements to get deficits under control. The Wall Street-funded billion dollar Peter Peterson Institute does full-page ads on the need to balance the federal budget immediately. McCain vows to make the federal government "live within its budget just like you have to." He'll "impose a one-year spending freeze on every agency of the federal government " (except the Pentagon and veterans). "To make our economy strong again, we must reduce the burden of federal spending," he says. His new stimulus plan for the economy is virtually all tax cuts, such as capital gains reductions or increased write-offs for losses in the stock market—the vast bulk benefiting affluent folks. (Meanwhile, his old economic plan busts the budget with massive top end and corporate tax cuts).

Barack Obama pledges an investment agenda—in new energy, in education, in rebuilding our infrastructure. Yet, he too pays tribute to the conventional, promising to scrub the federal budget, pledging that each of his spending proposals is "paid for," and vowing to bring deficits down.

Eliminating waste in government spending is a Good Thing (although if the candidates were serious they'd start with the Pentagon budget, the largest source of waste, fraud and abuse, not the domestic side). But we can't duck the reality: We're headed into a deep recession and we're going to need a healthy dose of deficit spending to get out of it.

The $700 billion bailout of Wall Street isn't enough. Belatedly, Treasury Secretary Henry Paulson has stumbled toward a sensible position on the bailout—giving taxpayers a stake in the upside while providing banks with new capital. But Paulson didn't demand the deal that Warren Buffett got from Goldman Sachs. That's not because he isn't a good businessman; it's because he's still conflicted about whether his client is the American taxpayer or the Wall Street club. Still, if it works, the bailout of Wall Street simply strengthens the arteries and the capillaries of the economy. Given the downturn, to get the blood pumping through the system will require a hefty stimulus.

Most economists now accept we are looking at a deep and potentially extended recession. We've lost nearly a million private sector jobs since the beginning of the year. Home values are declining at record rates. Exports, which have been on the rise, will sink as the downturn spreads across the globe. State and local employment, which had also been rising, is about to decline as layoffs begin to meet rising deficits. Manufacturing never recovered from the last recession. Construction collapsed with the housing bubble. Consumers—70% of the economy—are tightening belts. Restaurants are already feeling it; retail stores are likely to be decimated in the coming holidays.

Interest rates are already low. Monetary policy won't help. Thus many economists—even former Clinton Treasury Secretary Larry Summers, a devotee of the emphasis his predecessor, Robert Rubin, placed on balanced budgets—are calling for a fiscal stimulus of 2-3 percent of gross domestic product, which works out to about $300 billion. House Speaker Nancy Pelosi is developing a program that might be raised in the special session of Congress scheduled after the elections in November.

The most effective stimulus would focus on people who need help and investments that would help. Extend unemployment benefits and food stamps, bolster Medicaid. Then, help cities and states avoid cuts and layoffs that will just make things worse. Finally, begin projects on the shelf in areas vital to making our economy more competitive in the long term, starting with a concerted drive for energy independence, investing in green building and renewable energy. We need to modernize an infrastructure—everything from bridges to sewers—that is literally collapsing around us. This will put people to work and help get our economy back on track.

Anything like this, however, will face deep resistance in both parties. Last week, Republicans in the Senate used the filibuster to stop a vote on a token $60 billion stimulus for Main Street, even as they were panicked into forking over $700 billion to the Treasury Secretary for Wall Street.

The modern-day right believes only in tax cuts, not spending. In a recession, this is perverse. Tax breaks won't make corporations expand when the market for their products is tanking. We tried personal tax rebates in the last stimulus, and didn't get much bang for the buck. People sensibly paid down debts. And to the extent they spent the rebates the Rev. Jesse Jackson called "Wal-Mart gift certificates," much of the money helped sustain employment in China, not here.

More traditional conservatives in both parties—blue-dog Democrats and fiscal-hawk Republicans—oppose increased spending at all. With the deficit headed above $750 billion, they argue we can't afford it. It's time to tighten our belts. Blue dogs demand we pay as we go. That sounds good, but in a recession, it only adds to the woes. And a declining economy will only add to the deficits.

We've got a debate that focuses on what cannot happen—cutting domestic spending and balancing the budget, and slights what must happen—a large, bold plan to rebuild America, put people to work, and get the economy going.

Obama clearly gets this, but doesn't want to buck the austerity consensus. He's put forth various programs—including aid to cities, extended unemployment, investment in energy and infrastructure, and a blister of tax cuts—that add up to about $150 billion. That is not likely to be enough.

So in the last presidential debate, rather than hector candidates about what they'd cut to reduce the deficit, ask how the candidates plan to get us out of the swoon we are in, and what it will take to get the blood moving through this economy once more.

A Dangerous Plan for Health Care

Roger Hickey — Tue, 14 Oct 2008 12:12:51 -0400

The global financial crash of the past few weeks has hammered home what should be common sense: A free market needs reasonable rules that safeguard the public interest. When you unshackle corporations and put the cops who would police them in handcuffs, ultimately everyone loses in the ensuing chaos.

As our Tuesday, October 14 op-ed ad in The New York Times points out, despite their spectacular “free market” economic failure, conservatives are still trying to use that recipe for disaster to reform an already failing health-care system.

Our ad points out that 116 million Americans are either uninsured, underinsured, or financially vulnerable to unexpected medical costs—now the No. 1 cause of family bankruptcies. Those who have insurance are paying higher costs for policies that often have gaping holes in coverage. And insurance companies flat-out refuse to sell coverage to those already sick. And businesses, large and small, are burdened with rising costs.

The unraveling in health care now is so obvious that politicians of every persuasion have to pretend to have solutions. But conservatives have taken their ideas off the shelf of right-wing think tanks. Instead of working to guarantee health care for those without insurance, they want to tax the health benefits of the 160 million people who get insurance on the job—even though they acknowledge this would gradually dismantle the employer-based health care system. Twenty million people would lose coverage pretty quickly, according to the EPI Policy Center and other experts.

These conservatives actually believe that group health insurance, provided by employers, encourages people to use too much medical care, driving up costs. Instead, they want all of us to buy insurance policies directly from private insurance companies. And they believe in this theory so strongly, they would also let those companies sell policies across state lines, effectively wiping out the minimal state regulations which require companies to do things like cover pregnancies and certain tests—or, in the best states, to cover people with pre-existing conditions.

Imagine a health-care system in which businesses decide to opt out of providing policies for their employees. Workers would instead search for policies in an environment in which costs aren’t constrained by the bargaining power of employers and in which insurance companies would do just what banks have done—set up shop in the states that would allow them to operate with the fewest constraints.

For most people, this sounds like more of the same. U.S. health care has never been heavily regulated, compared with other countries. But dismantling the one part of our insurance system that somewhat works, forcing everyone to buy health insurance on their own, hardly seems a step forward for most people.

So what’s the alternative? We believe that quality, affordable health care should be a right. A person’s ability to get health care should not depend on their ability to bargain in the free market, where only the strong survive. As we say in the ad, we need clear rules requiring private insurance companies to cover everyone—even those with pre-existing conditions. And we need the security of knowing we can keep our current health plan, or we can choose a public plan like Medicare, so we’re not at the mercy of the same profit-driven companies that got us into this mess!

The United States spends more for health care, and gets less for its money, than any industrialized nation. Our enormously wasteful and chaotically organized system is a drag on our global competitiveness as well as a drain on our wallets. Still, the millions of dollars the insurance and pharmaceutical industries spend on lobbying and political contributions have only served to prop up a failing system and drown out the voices for change. The silver lining in the economic shock we’ve experienced is that the country may be more ready than ever to contrast the false promise of an unregulated market with a bold, progressive approach that extends health care to every American.

The Institute for America’s Future is a member of Health Care for America Now, the nationwide campaign for health care for all. Our ad invites everyone to join the campaign. We are challenging the misguided power of the insurance and pharmaceutical industries. And we are building a people’s movement to shape a health care system that works for all of us. We invite you to join us.

Bold vs. Incremental: The Debate Shifts

Bill Scher — Tue, 14 Oct 2008 12:03:58 -0400

Five years ago, I interviewed now-Nobel Laureate Paul Krugman for LiberalOasis.com, and I asked him about his past support for NAFTA-style trade and globalization. He responded:

I have to say those issues -- they seemed terribly big issues a few years ago. And I'd like to imagine us back to a situation where they become top issues. But at this point, they're really second-order.

The key thing, in terms of the state of the world right now, is that the United States has gone mad. Let's get some return to fiscal and environmental and general governmental sanity in this country, and then we can talk about we manage globalization...

...My dream for America would be to return to a situation in which people of decency and good will can have vicious arguments of globalization again. Right now, that seems to be a luxury we can't afford.

With the final chapter on the Bush Era about to close, it appears we may be able to have those sorts of constructive arguments again between who see themselves as progressives and moderates.

Conservative ideology was buried in the wake of the financial crisis, as now even President Bush has been compelled to partially nationalize the banking industry. In turn, the broader national debate is moving away from whether or not our government needs to be involved in our economy, to how best can government get our economy back on track?

Conservative NY TImes columnist David Brooks sees this debate coming, predicts progressives will win, and that it will be terrible:

The new situation will reopen old rifts in the Democratic Party. One the one side, liberals will argue (are already arguing) that it was deregulation and trickle-down economic policies that led us to this crisis. Fears of fiscal insolvency are overblown. Democrats should use their control of government and the economic crisis as a once-in-a-lifetime chance to make some overdue changes. Liberals will make a full-bore push for European-style economic policies.

On the other hand, the remaining moderates will argue that it was excess and debt that created this economic crisis. They will argue (are arguing) that it is perfectly legitimate to increase the deficit with stimulus programs during a recession, but that these programs need to be carefully targeted and should sunset as the crisis passes. The moderates will stress that the country still faces a ruinous insolvency crisis caused by entitlement burdens.

Obama will try to straddle the two camps — he seems to sympathize with both sides — but the liberals will win. Over the past decade, liberals have mounted a campaign against Robert Rubin-style economic policies, and they control the Congressional power centers. Even if he’s so inclined, it’s difficult for a president to overrule the committee chairmen of his own party. It is more difficult to do that when the president is a Washington novice and the chairmen are skilled political hands. It is most difficult when the president has no record of confronting his own party elders. It’s completely impossible when the economy is in a steep recession, and an air of economic crisis pervades the nation.

What we’re going to see, in short, is the Gingrich revolution in reverse and on steroids. There will be a big increase in spending and deficits. In normal times, moderates could have restrained the zeal on the left. In an economic crisis, not a chance. The over-reach is coming. The backlash is next.

Beyond the wild assumptions of how a President Obama would work with Congress, Brooks also makes a fundamental assumption -- commonplace among Establishment punditcrats -- that "moderate restraint" is always necessary to counter ideological "zeal" -- when it is quite possible for bold polices to be simultaneously and inherently pragmatic. (See "Deal, New.") Such an assumption is exactly the kind of simplistic knee-jerk argument that centrist-style pundits (and wanna-be-centrist conservative pundits like Brooks) always chastise others for making.

Surely, debates will be had between progressives and moderates. But they do not always have to cause "rifts." (Krugman's dream of "vicious" arguments was said facetiously.) Especially when it is clear that both sides share big common ground.

Today, Institute for America's Future offers that latest "Debate We Need" Op-Ad in the NY Times about health care, laying out core principles for comprehensive health care reform:

Health care is a right. We need clear rules requiring private insurance companies to cover everyone -- even those with pre-existing conditions. And we need the security of knowing we can keep our current health plan, or we can choose a public plan like Medicare, so we're not at the mercy of the same profit-down companies that got us into this mess!

Meanwhile, health care blogger Joe Paduda embraces the view that comprehensive reform is not possible in the short-term. Instead, he offers incremental steps increasing regulation on insurance companies, but holding off on bolder proposals such as establishing a public plan option.

Paduda and I don't disagree much on the end goal. We only have a disagreement on the tactics how to get there. That's not a small thing, since how we seize any "progressive moment" will be critical to our success. But it's not something that has to result in a damaging rift either.

Paduda is concerned that the money simply isn't there, and we'll certainly hear similar arguments a lot in the next few months.

But the point behind making bold investments in health care, clean energy, infrastructure and education is because they will pay off long-term. The health care plan envisioned by Health Care for America Now would save $1 trillion in health care spending over 10 years, according to the Lewin Group. Similarly, the idea behind this banker rescue plan is injecting capital in the banks will stabilize the market and the investment will be recouped later.

Worrying too much about the short-term budget ledger when our foundation is crumbling and recession is looming, I would contend, is not pragmatic or responsible.

But let's have that debate now, and have it constructively, so we can unify on shared principles and hit the ground running in January.

Weekend Watchdog Wrap-Up

Bill Scher — Mon, 13 Oct 2008 18:14:02 -0400

While the financial crisis did lead to much substantive discussion yesterday, the Sunday shows still go 0-for-3 for the Watchdog.

George Stephanoulous on ABC's This Week asked former Treasury Secretary James Baker if he supported having our federal government directly buy shares in troubled banks to stabilize the credit markets. But he didn't drill down into the potential devils in the details. As David Sirota recently flagged, we still don't know to what degree funds will be used to buy shares that offer taxpayers an equity stake, or to simply buy toxic assets that only transfer taxpayer funds to irresponsible banking executives.

On NBC's Meet The Press, instead of asking If the economic rescue plan would prevent us making investments in energy, education, health care and infrastructure, Tom Brokaw made the presumption that it certainly would -- asking former Bush administration budget director Rob Portman and Gov. Jon Corzine, " Don't you think the American public wants more candor and is prepared to hear someone say, look, there's going to be no gain unless we go through some pain?"

No one asked about how McCain altered his mortgage plan during the week, removing a pledge to make sure irresponsible lenders take a loss, and instead, having our government buy mortgages at face value. But Stephanopoulos did ask Republican Minority Whip Roy Blunt about the McCain plan, and notably, Blunt would not fully embrace it:

REP. BARNEY FRANK: We also explicitly gave [the Treasury Secretary] not just authority, but a direction to use some of these funds to buy up the mortgages. And then having bought up the mortgages, or enough of the mortgage securities to be in control, to try and reduce foreclosures.

Foreclosures are not a good idea generally for anybody. And if you’ve got homeowners who can pay a large part of what they owe, but not all of it, the federal government is mandated here to try and buy up those mortgages and then reduce what they pay. Not at face value, we’re not going to buy up the mortgages at face value, because the people who lent the money shouldn’t get out of this hole.

But if they are willing to take a lesser amount from the Treasury, we can then avoid the foreclosures.

STEPHANOPOULOS: Congressman Blunt, Senator McCain did suggest this week buying up the mortgages at face value. Do you agree with that or with what Congressman Frank is saying right now?

REP. BLUNT: Well, I think what Senator McCain talked about this week was essentially in several pieces of law already looking at mortgages that the government could simply take over, clearly buying mortgages, if you buy mortgages, for no more than their value.

Somebody needs to take the loss here, and it needs to be the person that had the bad judgment of making that loan, of buying those poorly put-together mortgage-backed securities.

There’s going to be loss here, and it shouldn’t be loss borne by the taxpayer. Barney’s absolutely right...

STEPHANOPOULOS: So then you don’t agree with Senator McCain’s...

BLUNT: Barney’s absolutely right, that foreclosures don’t help the neighborhood. They don’t help the property. They usually don’t do anything to help the specific piece of property that’s involved. And we just need to look at this carefully.

There’s merit in the McCain plan. That’s why it’s already in -- some of it’s already in the FHA reauthorization bill. Some of that flexibility is here.

But you have to be sure, again, that taxpayers are protected. And I think, when see the specifics of the McCain plan, you’ll see those kind of protections.

STEPHANOPOULOS: So you think he will? You don’t believe that there should be full value given back to the lenders; they should take some kind of a penalty?

BLUNT: Oh, absolutely, the lenders should take a penalty, and they should take a significant penalty, just like Secretary Baker said earlier.

These lenders that loan money to people that they thought could not pay it back, even though the federal government was encouraging some of that, overdid that. And once they got those loans out of their building, they thought they had no ongoing responsibility.

Weekend Watchdog

Bill Scher — Sat, 11 Oct 2008 01:06:07 -0400

Every Friday in our Weekend Watchdog feature, we post suggested questions for scheduled Sunday guests. You can add your own questions in the comment thread. We'll also include contact information for the shows, so we can let them know what their viewers want asked. We'll post a wrap-up here on the blog on Monday.

With the financial crisis still dominating people's concerns, here are three suggested questions that could be asked to any of this Sunday's slated guests: Rep. Barney Frank, D-Mass.; Rep. Roy Blunt, R-Mo.; Former Treasury secretaries James Baker and Lawrence Summers (ABC's This Week); Sen. Lindsey Graham, R-S.C.; Gov. Bill Ritter, D-Colo.; Mayor Doug Wilder, Richmond, Va.; Rep. Adam Putnam, R-Fla.; C. Fred Bergsten, director, Peterson Institute for International Economics (CBS' Face The Nation); Gov. Jon Corzine, D-N.J.; Former Rep. Rob Portman, R-Ohio (NBC's Meet The Press); David Axelrod, campaign adviser for Barack Obama; Rick Davis, campaign adviser for John McCain; Gov. Ed Rendell, D-Pa.; Gov. Tim Pawlenty, R-Minn. (Fox News Sunday).

1. It is still unclear to what extent our government will either give money to banks in exchange for toxic assets, or buy shares in banks and claim an ownership stake on behalf of taxpayers. To what extent do you believe our government should purchase equity stakes in banks?

2. Do you believe that purchasing equity in banks will prevent us from making critical investments in infrastructure, clean energy, health care and education, when in the short-term increased deficits are appropriate during an economic recession, and in the long-term having taxpayer equity means a share in the profits when financial markets recover?

3. Why did Sen. McCain's campaign initially say that in his new plan to take over bad mortgages, "Lenders in these cases must recognize the loss that they’ve already suffered," but then drop that part of the plan, benefiting irresponsible lenders?

***

Contact info for the Sunday shows

Contact ABC's This Week by clicking here

Email CBS' Face The Nation at ftn@cbsnews.com

Email Fox News Sunday at FNS@foxnews.com

Contact NBC's Meet The Press by clicking here

Remember: always be brief, polite and respectful when contacting the media, so our voices will be taken seriously.

The bottomless well of evil

Rick Perlstein — Fri, 10 Oct 2008 20:01:10 -0400

I just incinerated a comment. I hardly ever do that (when I do it's usually someone pointing out a typo; I fix the error then erase the evidence of my crime...). But, before I deleted it, I copied it, because you need to see it:

By Payday Loan Advocate | October 3rd, 2008 - 1:40am GMT
With our economy going into a slump, why is it that political figures are destroying valid financial options? Payday Loans are an essential part of the U.S. financial system, providing loans to those who have bad or no credit that need the money fast. Yet, for one reason or another, legislators are targeting this financial system. Some states, such as Georgia and North Carolina, have even banned the industry all together! The politics behind it is simple; banks are lobbying the legislators to try and destroy their oncoming competition, and the legislators are falling for it. Even taking out the fact that banks are trying to take away your financial choices and freedoms so they can have a monopoly on loans, the corruption of our politics is simply wrong. Our opinions must be heard, and our freedom of choice, financial or not, should not be dampened on the soul fact on one person's financial gain.

Obviously someone's paying someone to astroturf on behalf of the most monstrous sector of the banking industry.

Must be ACORN's fault.

Your Power-Worshiping, Maliciously Negligent Media At Work

David Sirota — Fri, 10 Oct 2008 14:02:47 -0400

Last week, as the bailout bill was being debated, the blog Naked Capitalism got its hands on the tape of a secret Treasury Department conference call whereby government officials reassured Wall Street speculators that all the supposed Democratic "improvements" to Henry Paulson's original bill were specifically written to be unenforceable. Writers like Matt Stoller and me did everything we could to push this outrageous news out there before the bailout vote happened, and were met with almost complete silence from the traditional media that was shamelessly pushing the bailout package.

The closest we got to traditional media coverage was (oddly enough) Fox News on 10/1. The network noted my In These Times story that reported on the conference call, and then asked Rep. Jane Harman (D-CA) about it (she replied "I don't know if it's true, I would be surprised" and then added that if it was true, "that would obviously hurt" the bailout bill's prospects in the House). But other than that Fox News report, Democratic politicians were allowed to blanket the radio and television airwaves insisting that they had really "improved" the bill.

So, I can't decide whether to laugh or cry when I read this story in the Wall Street Journal today, days AFTER the bailout bill passed.

Here's the key excerpt:

As the biggest market intervention in U.S. history made its way through Congress, Neel Kashkari, the Treasury official named this week to run the program, offered assurances to 800 financial-industry players.

Attempts by Congress to make beneficiaries pay for their mistakes, such as placing caps on executive pay, were "quite reasonable" and "a pretty modest hindrance to you," he told them, according to a recording of the Sept. 28 conference call made public [on the Internet].

The piece is stunning for two reasons. First, the Journal portrays this as an undiscovered scoop, when it's been out there for more than a week. Second, there is something sick about the media knowing about this story, and only being willing to cover it after the bailout vote that - according to Harman - it might have severely impacted. It reminds me of media outlets that promoted the Bush administration's pre-war WMD case and ignored those who questioned that case before the war, and then after the invasion, patted themselves on the back for later reporting that the WMD case was false.

This is yet another example of A) why the blogosphere/progressive media is important B) why we shouldn't simply take what the media and punditocracy says at face value C) the traditional media's really disgusting efforts to ignore what the progressive media is way out ahead of them on and D) the traditional media's willingness to question power ONLY after that power has been wielded, not before when it really counts.