Thursday, April 1, 2010


The following are a couple of comments left at Naked Capitalism that sum up pretty well my attitude towards Democrats in general and health care in particular. What I didn’t see at the time was that the eventual bill passed by the Democrats would pose such a threat to Medicare:

This is from October 8, 2009:

The Democrats are falling into their "Washington Generals" mode on health care. For those who do not remember, the Generals were the hard-luck "opponents" of the Harlem Globetrotters. The Washington Generals’ job was not to win, instead they were there to provide the illusion of an actual contest. Through deliberately futile opposition--they almost never won a game--they provided a useful service.

On Health Care, Americans don’t just want to be told by a unitary elite that the less fortunate among them will continue to have third world health care while a wealthy minority maintains top quality service. No, it is much better to have a little political exhibition game where, after a simulated tough struggle, the Democrats lose a squeaker. And it is quite useful to establish a health insurance dolchstosslegende (stabbed in the back legend) to help maintain Democratic party loyalty in the wake of this approaching Democratic defeat (in the form of a meaninglessly empty bill) and the recriminations that will follow from some party members.

As for the New York Times, we must remember that first and foremost they are a business and the health insurance industry is a major source of advertising revenue for them. So it only makes sense they would back their clients this way. The only potential downside for the NYT would be if the Obama Administration retaliated by cutting them out of the upcoming newspaper bailout. Taking this risk seriously presupposes that Obama and the Democrats are playing to win on Health Care. But everybody knows the Washington Generals never play to win. Thus the Valentine cards to the health insurance industry on the front page of the NYT.

And this from October 15, 2009 in response to someone who dared defend the Democrats:

Please. Let’s just look at health care to see the fundamental problem with the Democrats.

The Democrats have 60 Senators, control of the House and the Presidency. They could have had a bill on the President’s desk last January. But instead now they are blaming the Republicans for delaying this bill.

The Republicans long ago did their job on health care. Their rich supporters who matter (their peasant supporters obvious don’t) have had excellent health care for some time, often subsidized by working class taxpayers who have crap health care. So of course the Republicans will delay it; they see any new health care bill as watering down the excellent plans their rich supporter already have. It’s Democratic supporters who need health care and it’s the Democrats who have the power but apparently not the will to act.

As mentioned above after the 2008 elections the Democrats have total control of all three branches of government. At that point they had three ways to move forward. Now just to make my point more clearly, I will use a metaphor of the three classifications of male animals in evolutionary psychology, Alphas (dominators), Betas (stable providers), and Omegas (evolutionary dead-enders, no females ever mate with them) to show the three approaches available to the Democrats.

The Alpha move would have been to get the best health care bill possible with 50 senators and then cram it down the Republicans throats with gusto, forcing them to filibuster. Once the filibuster got started the Alpha would use it to humiliate the Republicans as crying sissies. Once the Republicans realized their adversaries had spines of steel, they would meekly submit to the Democratic Alpha’s dominance and wait their turn in line at feeding time. This would have been my approach but then again I’m from a working class background.

The Beta move would have been to get the best bill you can get with 60 Senators and then gently force down the Republican’s throats while uttering the occasional apology. In this case a health care bill would have passed in February. It’s a slightly wimpy move but I could live with this approach since social animals often need to compromise to survive.

The Omega move would be to ask the more dominant Republicans to cooperate and approve any bill. The Omega is scared at every step and would never take an independent move for fear of displeasing the more dominant males. Sadly this is the approach the Democrats have chosen.

Omega political parties, just like Omega males, provoke disgust in all observant beings who come in contact with them. Omegas exist for one reason only: to die. This is because their genetic line needs to be wiped out in order for the species to prosper. This is the inescapable fate of the Omega; and this should be the fate of the Democrats.

But alas, the Democrats have been Omegas since just after LBJ left office and so you may ask why are they still alive? That’s because within the limited political ecosystem of the two-party US, the Omega Democrats serve the wealthy in the very important function of blocking out any real Alpha party with power from developing to serve the interests of the majority of the American people. So it should be clear that keeping the Omega Democrats alive, however nice their spineless words may sound on paper, is evolutionary suicide for middle and working class Americans.


Gold feather

I spend most of my blogging time at Naked Capitalism. As the Iraq War wound down and the economic crisis hit in 2008, it became clear to me that I was woefully ignorant about economic issues. I started reading Calculated Risk (and I still do) but the posts are short with not much analysis. The comments are lively but again I was pretty limited in what I could learn.

Through his links I discovered Naked Capitalism, written by Yves Smith. Here in Europe at least, Yves is a man’s name and it took a month or two of constant incongruity before I realized Yves was a she. I fact Yves (which is pronounced just like Eve) is a very clever take off on Adam Smith! In any case Yves tends to write in a long essay format which I feel much more comfortable with. Her posts are sometimes extremely detailed about esoteric financial subjects such as CDS (Credit Default Swaps). I wade through these in order pick up knowledge useful to a generalist (I am certainly never going to acquire detailed knowledge about many of these subjects). But often she picks more general subjects which I feel more comfortable commenting on.

The comments section of Naked Capitalism is also a gold mine of ideas and features many talented writers. The best part about it that while on the one hand it features people of many different ideological backgrounds, most of these people have come to the same conclusion as I have that our two-party system is a complete sham and we are being ruled into the ground by a wealthy and unitary political elite.

Yesterday featured a post on Modern Monetary Theory (MMT) by Rob Parentheau, who serves as a professor running a sort of graduate school seminar in the comment thread. MMT tends to push for more fiscal spending as I explain below. A clever comment was left by, an opponent of MMT Dan Duncan in response:

Rob’s concept of money has a certain Unbearable Lightness of Being about it.

Sure, the eternal recurrence of something like the gold standard imposes a "heaviness" on our lives and on the decisions we make (it gives them weight, to borrow from Nietzsche's metaphor), a heaviness that Nietzsche thought could be either a tremendous burden or great benefit depending on one's perspective.

The German expression Einmal ist keinmal encapsulates "lightness" so what happens but once, might as well not have happened at all.


As a result, our government is deluded into thinking that decisions do not really matter. These decisions (Wars, unrealistic entitlements, etc., etc) are rendered light, because they do not cause personal suffering (just print more!). Yet, simultaneously, the insignificance of decisions ultimately is doomed to cause us great suffering and this is perceived as the Unbearable Lightness of Being...and Modern Money. This insignificance is existentially unbearable when it is considered that people want their labor, assets and savings to have credible sense of meaning.

My response follows:

I found Dan’s metaphor to be quite a useful tool for understanding the problem of monetary arrangements for the non-specialists among us! It conjured up in my mind the image of an hot air balloon to represent the overall monetary machine. The goal is to keep the system afloat within a reasonable range of altitude (inflation). Failure occurs when the balloon gets dangerously close to the ground (deflation) or when it sails off into the stratosphere (hyper inflation). There is also a political dimension to this; wealth will naturally want the balloon to fly closer to the ground (inflation rate 1-2%) while the masses prefer it to soar a little higher (5-7%). Among the variables that control the height of the balloon would be monetary policies (a sort of ballast), fiscal policies (the temperature or composition of the gas), as well as the overall productivity of the economy (the open flame burner). These policies could either tend towards giving lift to the balloon (fiscal spending) or adding weight (tight control of the supply, cost, or availability of money). For example tying a monetary arrangement to a gold standard is easily visualized as adding ballast to the balloon. When this ballast overloads the balloon due to decreases in economies’ buoyancy (fall in overall productivity, fall in fiscal spending) this gold standard must start to be jettisoned to compensate.

In reading more and more about MMT (thanks for the link Rob) the penny is slowing starting to drop that in fact one of the main tenets of this way of thinking is that there is no actual link between taxes collected and money spent by a government; in other words that the concept of a government deficit is a false analogy to household and business deficits. To go back to the balloon metaphor, the application off MMT ideas would be similar to finding a lighter gas to fill the balloon. Clearly increased fiscal spending will add buoyancy to the overall system, which up to a limit, is a good thing. And in reading the comments of the critics one possible defence of the concept of government deficits is that while the concept is ultimately false, this lie is noble in the sense that it serves the purpose of controlling the buoyancy of the system. Critics would respond that the control this noble lie gives comes at the cost of unemployment for the masses.

I think one limit that the critics of MMT are searching for is how will the added buoyancy ultimately be checked in case our balloon starts soaring upwards out of control; especially considering that Nixon long ago jettisoned the gold ballast? Are monetary tools sufficient to lower the open flame of production? Can we trust policy makers to cut back the fiscal spending in times of an inflationary crisis?

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