Sunday, July 23, 2017

Re: [socialist-econ] Re: Yonatan Zunger:Medium -- The Present Crisis

Despite the expectations of many of us, there is no guarantee that this democracy can survive.  The president has no interest in democracy and has been trying to subvert ours since he decided to put this feather in his cap of shame. Please see his dangerous attacks on the free press and the independent judiciary, his efforts with Russia to undermine our elections, his willingness to subjugate the interests of the people to his own mental illness and narcissism and all the rest. 

The Democratic Party which I've been loyal to my whole life now has leaders so far removed from average people they no longer even know how to ask for votes.

The Den Party's silly message strategy is pathetic.  " get smarter and work harder and maybe your boss will give you a raise" just sucks. 

Why is it this group of Den leaders cannot even put forth a vision of more justice and a better life.

Rump offered a better life!!!!!!!!!!!  

Dems and Hillary did not.

This flawed "democratic gov't is about to kill a lot of kids and others to satisfy trumps narcissistic demand for a win.

The "democratic legislature" is trying to pass a bill no one has seen without a single committee meeting or hearing or debate that will affect 90 percent of America's families. 

So no, neither we nor the world can expect we can survive this sickness of the idolatry of wealth and the deliberate destruction of our own people and slaveishness to fascism and oligarchy.

We as a country and a society have stopped making sense. 

On Jul 23, 2017 5:06 PM, "moderator" <jcase4218@gmail.com> wrote:
It raises some interesting questions. 1) How serious, or irreversible, are the features of spreading dysfunction in our federal system? The bicameral legislature has become a prescription for paralysis rather than restraint on excess. Rural vis Urban proportional citizen representation in Congress is already far out of whack. The Piketty equations of old wealth and political reaction/corruption are overwhelming the democracy. The two party system is practically impossible to replace or amend as long as elections remain winner-take-all. Game theory math makes that statistically inevitable -- yet, it also makes it almost equally impossible for non corporate, non-billionaire forces to achieve sufficient political independence and liftoff --- Bernie Sanders notwithstanding. Imagine a two party system in which corporate forces only LED one party. Some basic features of capitalism, and capitalist economic development, do not argue for that being a stable situation unless a new consensus is reached on what DOES constitute a more or less STABLE, but also capable of dynamic growth, mixed public-private economic system. An essential part of that stability must be an income distribution that puts permanent breaks on the billionaire---fastfood-worker divide in economic and political power. Trying to fix unequal and unbalanced political power without changing unequal economic power is like putting out a fire while gasoline is being poured on it. Hence: Bernie is right to label the changes required revolutionary -- the number of structural, difficult, expensive social shifts needed to reverse austerity and return to shared prosperity are accumulating, and becoming more profound -- especially with the Jackass in the White House. 2) Is it possible for a Roosevelt type transformative leader from liberal capital to lead the fight against the R-led turnaround from democracy, science and peace? I don't know. Neither Clinton nor Obama was able to turn it around, despite some strong and even brilliant efforts by both.

On Sunday, July 23, 2017 at 4:01:18 PM UTC-4, moderator wrote:


by 

Yonatan Zunger

There is one thing certain about the political crisis in the United States today: when it ends, the Constitution will be profoundly different. Either we will make major changes to it — through amendment or through rewriting — or it will become a mere decoration, a relic of a history which no longer applies. But the system that we have grown up with, the particular powers of each branch of government, has already come to an end.


While it's hard to put a precise date on that ending, I would pick January 28th, 2017: the day of Donald Trump's first Muslim Ban. I'm not picking this date because the ban itself was particularly abhorrent, but because it represented the first genuine constitutional crisis of the present situation, a moment where the system itself had no idea what to do.
To refresh your memory: Having issued the order, Customs and Border Patrol (the CBP) had started to detain nationals of the seven affected countries as soon as their planes touched down, including legal permanent residents of the US, with the intent of deporting them on the spot. Even though courts around the country were issuing injunctions ordering the practice to stop immediately, CBP did not do so, and they continued to detain people, deny them access to counsel, and deport them throughout the night.

The reason this was so important, and so profoundly dangerous, is that every single enforcement agency in the Federal government ultimately rolls up to the President; neither the Congress nor the courts have any enforcement power of their own. Even the US Marshals' Service, often raised as a counterexample, is actually a part of the Department of Justice; they are simply tasked with enforcing court orders.

Had Trump not backed down that night, the Marshals would have been faced with an impossible decision. If they had gone along with the President's orders, the President would be above the power of any court to contradict; and having set such a precedent, it would be very hard to pull it back afterwards. But if they remained loyal to the law and went to enforce that decision, they would have found themselves at airports facing CBP agents who were (even with lawyers descending on the sites in droves) continuing to openly flout the court orders. This would not have been a mere constitutional crisis; it would have been an armed standoff. There would have been no good ending.

Protesters at San Francisco Airport attempting to block enforcement of the Muslim Ban, January 28th, 2017 (Associated Press)

That moment demonstrated just how fragile our system really is. The only power any branch has over the President which is not ultimately rooted in the enforcement power of Executive police agencies is the power of impeachment. Everything else, the President either has de jure or de factopower to override. (Special prosecutors were an exception to this until 1999.)

I don't think Trump had anything in mind as complex as testing the limits of Constitutional authority; he wanted to see what he could get away with, and how people would react, and he used that information later to see if he could get away with more. It's very simple, and it's been his M.O. for his entire life. It was, in short, an experiment to see how much power he could seize, an attempt to go as far as he could to see if anyone could actually stop him. This is why I referred to it as a "trial balloon for a coup."

________________________________

Today, the constitutional crisis has only deepened. The problem is simple: the President continues to openly and brazenly flout the law (with his open self-dealing through "golf vacations" and through his family's businesses, and with his senior appointees' near-weekly habits of perjury, being the least controversial examples), and his essential argument is that no-one can stop him, so it must be legal.

What's troubling is that, to a great extent, he's right. The only power anyone has over the President which does not ultimately rely on the President himself to enforce is the power of impeachment. This has rarely been an issue in the past, because custom, shame, and basic honesty have kept Presidential power in check; Jimmy Carter famously sold his beloved peanut farm rather than have any business holdings that could be portrayed as a conflict of interest, and even Richard Nixon never used his pardon power to protect the Watergate conspirators.

But the power of impeachment is limited by the willingness of Congress to act, and for structural reasons, that no longer exists. In the mid-1990's, Gingrich's opposition party in Congress started to take on the role of "spoiler," shutting down the government rather than making a deal that didn't satisfy all their requirements. In the years following, Gingrich and others developed a strategy in which dealing across party lines was tantamount to treason. This meant that Congress' ability to get anything done fell apart, and a sequence of presidents (of both parties) had to turn to increasingly creative means to bypass them. And as that further weakened Congress, legislators increasingly saw their power not as the ability to pass laws (which was hopeless), but as the ability to either back or oppose the party leader — the President.

In short, Congress has spent the past twenty years weakening itself, reducing itself from the primary source of power in the government to a backup squad for the Executive. This is why in February, after National Security Advisor Michael Flynn's activities as an illegal foreign agent came to light, Sen. Rand Paul could quite naturally say "I just don't think it's useful to be doing investigation after investigation, particularly of your own party. We'll never even get started with doing the things we need to do, like repealing Obamacare, if we're spending our whole time having Republicans investigate Republicans. I think it makes no sense." The idea of an investigation as being about the power of Congress over the President is actively alien to Washington today; investigations have, for decades now, been about the power of party over party.

What this means is that today, it's hard to imagine anything which would cause Paul Ryan to call for an impeachment vote. Trump's statement in early 2016 that he "could stand in the middle of 5th Avenue and shoot somebody and… wouldn't lose voters" has turned out to be prescient: today, if he shot someone in the street, we would be treated to the same dance we've seen with every previous malfeasance of the past six months. (First Presidential spokespeople would deny it; then, Democratic members of Congress would decry it as clearly the last straw, while a few Republicans would say it was "clearly concerning;" then, talking heads explaining why it's a non-story, until Trump himself, most likely, would publicly tweet bragging about having done it; then, the same Republican Congresspeople explaining how it was technically legal and within the purview of the President; then, the next news story.)

The fact is that, for a powerless Congress, the only power possible comes from having their own President in office; anything which jeopardizes that jeopardizes their own ability to pass their favorite legislation. And there is no incentive left to counterbalance that.

It is possible that Mueller's investigation (if it isn't stopped by Trump in the next few days) will come out with evidence so damning that it makes even Paul Ryan blush, but I would not suggest you bet any money on that.

________________________________

What does this mean for our country? It means that we are now firmly in a place where the Constitution no longer offers any meaningful solutions. We have run into a basic bug in the system which the Founders didn't anticipate: that Congress would become subservient to the President, effectively eradicating the only surefire check on that power.

While that's not a shocking bug in retrospect, we should respect why the Founders didn't predict it: what they were doing was literally the first attempt ever at building a constitutional democracy at scale. Nobody had any experience with this, and the fact that what they built lasted for nearly 228 years is quite impressive. But we should also recognize that no other constitution in the world is this old; every other democracy since then has had its government collapse, or otherwise required massive changes to its system, at least once. France — our democratic younger sibling, inspired in 1789 to its own revolution — is currently on its Fifth Republic. The Fourth was ended by public referendum in 1958; the Third, by the Nazis in 1940. France, like many other countries, has changed its political structure both by force and of its own free will.

For America, this idea is hard to comprehend, since so much of our national identity is tied up with the very concept of the Constitution. If we are not the country founded in 1776, then what are we?

But we should remember that we are not the country founded in 1776. We are actually already in (at least) our second Republic; after the Revolutionary War, we were governed by the short-lived Articles of Confederation. The Constitution that we use today replaced it in 1789. And arguably, that Constitution was deeply changed between 1861 and 1877, with not only new amendments which fundamentally changed the relationship between the States and the Federal government, but a deep reinterpretation of many of its earlier provisions as well. (Even the modern notion of the "right to bear arms" as an individual right is a post-Civil War idea!)

And today, the Constitution — in either its 1789 or 1877 form — has broken. There is a President who claims to be above the law, and there is no mechanism in place which can contradict him. If this persists, the Constitution is no longer meaningful except as history; if it does not persist, the Constitution must be changed.

In an American Third Republic, we should consider that many ideas which seem "obvious" to us today about how our government is run — not merely the Electoral College, but even the idea of a President elected with powers separate from Congress — may change. This is not a failure of democracy, but rather its best function: the ability to fix itself when it breaks.

The experience of other countries in drafting their own Constitutions, often under either American guidance or the guidance of those who we ourselves guided in the past, may often be instructive. It can be useful to define certain "super-Constitutional principles" which are even more fundamental than the Constitution itself: in America, for example, the freedom of speech, religion, and association, or the right to due process of law, would be obvious candidates, things which we consider to be not merely political decisions but fundamental to who we are as a people.

It may also be useful to take the idea of checks and balances and turn the knob even higher than we have in the past; for instance, no democracy in the modern world gives as much power to their executive as the President of the United States has today. And certainly nobody grants legislatures the power to draw their own electoral districts!

________________________________

But we should not jump to drafting a new Constitution yet. We are watching the fall of the Second Republic, not yet the rise of the Third; extremely powerful forces would be violently opposed to anyone trying to rewrite the Constitution today, especially if it were for the purpose of deposing Trump. What comes next is not a Constitutional Convention, but rather a process during which the democracy we grew up with finally collapses; a process in which the power which has steadily accumulated in the hands of the Executive increasingly turns to serving its own interests, and abandons even the pretense of public service.

What happens between where we are now and the end of this situation remains unclear. The only thing clear is that there are no legal mechanisms which will end it; what happens next depends entirely on informal processes, on things like the public pressures which causes Congress and Trump to do one thing or another. Impeachment, for example, will not happen by any laws of nature; it would only happen if public outcry were so severe that Congress felt it had no choice. The 2018 and 2020 elections may or may not have any effect, when they come; if they end up being rigged in any number of legal or extralegal ways, they certainly will not. But those are still far away: even the voter suppression efforts are only just beginning. We are only, after all, six months into the age of Trump.
--
John Case
Harpers Ferry, WV

The Winners and Losers Radio Show
7-9 AM Weekdays, The Enlighten Radio Player Stream, 
Sign UP HERE to get the Weekly Program Notes.

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Re: Yonatan Zunger:Medium -- The Present Crisis

It raises some interesting questions. 1) How serious, or irreversible, are the features of spreading dysfunction in our federal system? The bicameral legislature has become a prescription for paralysis rather than restraint on excess. Rural vis Urban proportional citizen representation in Congress is already far out of whack. The Piketty equations of old wealth and political reaction/corruption are overwhelming the democracy. The two party system is practically impossible to replace or amend as long as elections remain winner-take-all. Game theory math makes that statistically inevitable -- yet, it also makes it almost equally impossible for non corporate, non-billionaire forces to achieve sufficient political independence and liftoff --- Bernie Sanders notwithstanding. Imagine a two party system in which corporate forces only LED one party. Some basic features of capitalism, and capitalist economic development, do not argue for that being a stable situation unless a new consensus is reached on what DOES constitute a more or less STABLE, but also capable of dynamic growth, mixed public-private economic system. An essential part of that stability must be an income distribution that puts permanent breaks on the billionaire---fastfood-worker divide in economic and political power. Trying to fix unequal and unbalanced political power without changing unequal economic power is like putting out a fire while gasoline is being poured on it. Hence: Bernie is right to label the changes required revolutionary -- the number of structural, difficult, expensive social shifts needed to reverse austerity and return to shared prosperity are accumulating, and becoming more profound -- especially with the Jackass in the White House. 2) Is it possible for a Roosevelt type transformative leader from liberal capital to lead the fight against the R-led turnaround from democracy, science and peace? I don't know. Neither Clinton nor Obama was able to turn it around, despite some strong and even brilliant efforts by both.

On Sunday, July 23, 2017 at 4:01:18 PM UTC-4, moderator wrote:


by 

Yonatan Zunger

There is one thing certain about the political crisis in the United States today: when it ends, the Constitution will be profoundly different. Either we will make major changes to it — through amendment or through rewriting — or it will become a mere decoration, a relic of a history which no longer applies. But the system that we have grown up with, the particular powers of each branch of government, has already come to an end.


While it's hard to put a precise date on that ending, I would pick January 28th, 2017: the day of Donald Trump's first Muslim Ban. I'm not picking this date because the ban itself was particularly abhorrent, but because it represented the first genuine constitutional crisis of the present situation, a moment where the system itself had no idea what to do.
To refresh your memory: Having issued the order, Customs and Border Patrol (the CBP) had started to detain nationals of the seven affected countries as soon as their planes touched down, including legal permanent residents of the US, with the intent of deporting them on the spot. Even though courts around the country were issuing injunctions ordering the practice to stop immediately, CBP did not do so, and they continued to detain people, deny them access to counsel, and deport them throughout the night.

The reason this was so important, and so profoundly dangerous, is that every single enforcement agency in the Federal government ultimately rolls up to the President; neither the Congress nor the courts have any enforcement power of their own. Even the US Marshals' Service, often raised as a counterexample, is actually a part of the Department of Justice; they are simply tasked with enforcing court orders.

Had Trump not backed down that night, the Marshals would have been faced with an impossible decision. If they had gone along with the President's orders, the President would be above the power of any court to contradict; and having set such a precedent, it would be very hard to pull it back afterwards. But if they remained loyal to the law and went to enforce that decision, they would have found themselves at airports facing CBP agents who were (even with lawyers descending on the sites in droves) continuing to openly flout the court orders. This would not have been a mere constitutional crisis; it would have been an armed standoff. There would have been no good ending.

Protesters at San Francisco Airport attempting to block enforcement of the Muslim Ban, January 28th, 2017 (Associated Press)

That moment demonstrated just how fragile our system really is. The only power any branch has over the President which is not ultimately rooted in the enforcement power of Executive police agencies is the power of impeachment. Everything else, the President either has de jure or de factopower to override. (Special prosecutors were an exception to this until 1999.)

I don't think Trump had anything in mind as complex as testing the limits of Constitutional authority; he wanted to see what he could get away with, and how people would react, and he used that information later to see if he could get away with more. It's very simple, and it's been his M.O. for his entire life. It was, in short, an experiment to see how much power he could seize, an attempt to go as far as he could to see if anyone could actually stop him. This is why I referred to it as a "trial balloon for a coup."

________________________________

Today, the constitutional crisis has only deepened. The problem is simple: the President continues to openly and brazenly flout the law (with his open self-dealing through "golf vacations" and through his family's businesses, and with his senior appointees' near-weekly habits of perjury, being the least controversial examples), and his essential argument is that no-one can stop him, so it must be legal.

What's troubling is that, to a great extent, he's right. The only power anyone has over the President which does not ultimately rely on the President himself to enforce is the power of impeachment. This has rarely been an issue in the past, because custom, shame, and basic honesty have kept Presidential power in check; Jimmy Carter famously sold his beloved peanut farm rather than have any business holdings that could be portrayed as a conflict of interest, and even Richard Nixon never used his pardon power to protect the Watergate conspirators.

But the power of impeachment is limited by the willingness of Congress to act, and for structural reasons, that no longer exists. In the mid-1990's, Gingrich's opposition party in Congress started to take on the role of "spoiler," shutting down the government rather than making a deal that didn't satisfy all their requirements. In the years following, Gingrich and others developed a strategy in which dealing across party lines was tantamount to treason. This meant that Congress' ability to get anything done fell apart, and a sequence of presidents (of both parties) had to turn to increasingly creative means to bypass them. And as that further weakened Congress, legislators increasingly saw their power not as the ability to pass laws (which was hopeless), but as the ability to either back or oppose the party leader — the President.

In short, Congress has spent the past twenty years weakening itself, reducing itself from the primary source of power in the government to a backup squad for the Executive. This is why in February, after National Security Advisor Michael Flynn's activities as an illegal foreign agent came to light, Sen. Rand Paul could quite naturally say "I just don't think it's useful to be doing investigation after investigation, particularly of your own party. We'll never even get started with doing the things we need to do, like repealing Obamacare, if we're spending our whole time having Republicans investigate Republicans. I think it makes no sense." The idea of an investigation as being about the power of Congress over the President is actively alien to Washington today; investigations have, for decades now, been about the power of party over party.

What this means is that today, it's hard to imagine anything which would cause Paul Ryan to call for an impeachment vote. Trump's statement in early 2016 that he "could stand in the middle of 5th Avenue and shoot somebody and… wouldn't lose voters" has turned out to be prescient: today, if he shot someone in the street, we would be treated to the same dance we've seen with every previous malfeasance of the past six months. (First Presidential spokespeople would deny it; then, Democratic members of Congress would decry it as clearly the last straw, while a few Republicans would say it was "clearly concerning;" then, talking heads explaining why it's a non-story, until Trump himself, most likely, would publicly tweet bragging about having done it; then, the same Republican Congresspeople explaining how it was technically legal and within the purview of the President; then, the next news story.)

The fact is that, for a powerless Congress, the only power possible comes from having their own President in office; anything which jeopardizes that jeopardizes their own ability to pass their favorite legislation. And there is no incentive left to counterbalance that.

It is possible that Mueller's investigation (if it isn't stopped by Trump in the next few days) will come out with evidence so damning that it makes even Paul Ryan blush, but I would not suggest you bet any money on that.

________________________________

What does this mean for our country? It means that we are now firmly in a place where the Constitution no longer offers any meaningful solutions. We have run into a basic bug in the system which the Founders didn't anticipate: that Congress would become subservient to the President, effectively eradicating the only surefire check on that power.

While that's not a shocking bug in retrospect, we should respect why the Founders didn't predict it: what they were doing was literally the first attempt ever at building a constitutional democracy at scale. Nobody had any experience with this, and the fact that what they built lasted for nearly 228 years is quite impressive. But we should also recognize that no other constitution in the world is this old; every other democracy since then has had its government collapse, or otherwise required massive changes to its system, at least once. France — our democratic younger sibling, inspired in 1789 to its own revolution — is currently on its Fifth Republic. The Fourth was ended by public referendum in 1958; the Third, by the Nazis in 1940. France, like many other countries, has changed its political structure both by force and of its own free will.

For America, this idea is hard to comprehend, since so much of our national identity is tied up with the very concept of the Constitution. If we are not the country founded in 1776, then what are we?

But we should remember that we are not the country founded in 1776. We are actually already in (at least) our second Republic; after the Revolutionary War, we were governed by the short-lived Articles of Confederation. The Constitution that we use today replaced it in 1789. And arguably, that Constitution was deeply changed between 1861 and 1877, with not only new amendments which fundamentally changed the relationship between the States and the Federal government, but a deep reinterpretation of many of its earlier provisions as well. (Even the modern notion of the "right to bear arms" as an individual right is a post-Civil War idea!)

And today, the Constitution — in either its 1789 or 1877 form — has broken. There is a President who claims to be above the law, and there is no mechanism in place which can contradict him. If this persists, the Constitution is no longer meaningful except as history; if it does not persist, the Constitution must be changed.

In an American Third Republic, we should consider that many ideas which seem "obvious" to us today about how our government is run — not merely the Electoral College, but even the idea of a President elected with powers separate from Congress — may change. This is not a failure of democracy, but rather its best function: the ability to fix itself when it breaks.

The experience of other countries in drafting their own Constitutions, often under either American guidance or the guidance of those who we ourselves guided in the past, may often be instructive. It can be useful to define certain "super-Constitutional principles" which are even more fundamental than the Constitution itself: in America, for example, the freedom of speech, religion, and association, or the right to due process of law, would be obvious candidates, things which we consider to be not merely political decisions but fundamental to who we are as a people.

It may also be useful to take the idea of checks and balances and turn the knob even higher than we have in the past; for instance, no democracy in the modern world gives as much power to their executive as the President of the United States has today. And certainly nobody grants legislatures the power to draw their own electoral districts!

________________________________

But we should not jump to drafting a new Constitution yet. We are watching the fall of the Second Republic, not yet the rise of the Third; extremely powerful forces would be violently opposed to anyone trying to rewrite the Constitution today, especially if it were for the purpose of deposing Trump. What comes next is not a Constitutional Convention, but rather a process during which the democracy we grew up with finally collapses; a process in which the power which has steadily accumulated in the hands of the Executive increasingly turns to serving its own interests, and abandons even the pretense of public service.

What happens between where we are now and the end of this situation remains unclear. The only thing clear is that there are no legal mechanisms which will end it; what happens next depends entirely on informal processes, on things like the public pressures which causes Congress and Trump to do one thing or another. Impeachment, for example, will not happen by any laws of nature; it would only happen if public outcry were so severe that Congress felt it had no choice. The 2018 and 2020 elections may or may not have any effect, when they come; if they end up being rigged in any number of legal or extralegal ways, they certainly will not. But those are still far away: even the voter suppression efforts are only just beginning. We are only, after all, six months into the age of Trump.
--
John Case
Harpers Ferry, WV

The Winners and Losers Radio Show
7-9 AM Weekdays, The Enlighten Radio Player Stream, 
Sign UP HERE to get the Weekly Program Notes.

Yonatan Zunger:Medium -- The Present Crisis



by 

Yonatan Zunger

There is one thing certain about the political crisis in the United States today: when it ends, the Constitution will be profoundly different. Either we will make major changes to it — through amendment or through rewriting — or it will become a mere decoration, a relic of a history which no longer applies. But the system that we have grown up with, the particular powers of each branch of government, has already come to an end.


While it's hard to put a precise date on that ending, I would pick January 28th, 2017: the day of Donald Trump's first Muslim Ban. I'm not picking this date because the ban itself was particularly abhorrent, but because it represented the first genuine constitutional crisis of the present situation, a moment where the system itself had no idea what to do.
To refresh your memory: Having issued the order, Customs and Border Patrol (the CBP) had started to detain nationals of the seven affected countries as soon as their planes touched down, including legal permanent residents of the US, with the intent of deporting them on the spot. Even though courts around the country were issuing injunctions ordering the practice to stop immediately, CBP did not do so, and they continued to detain people, deny them access to counsel, and deport them throughout the night.

The reason this was so important, and so profoundly dangerous, is that every single enforcement agency in the Federal government ultimately rolls up to the President; neither the Congress nor the courts have any enforcement power of their own. Even the US Marshals' Service, often raised as a counterexample, is actually a part of the Department of Justice; they are simply tasked with enforcing court orders.

Had Trump not backed down that night, the Marshals would have been faced with an impossible decision. If they had gone along with the President's orders, the President would be above the power of any court to contradict; and having set such a precedent, it would be very hard to pull it back afterwards. But if they remained loyal to the law and went to enforce that decision, they would have found themselves at airports facing CBP agents who were (even with lawyers descending on the sites in droves) continuing to openly flout the court orders. This would not have been a mere constitutional crisis; it would have been an armed standoff. There would have been no good ending.

Protesters at San Francisco Airport attempting to block enforcement of the Muslim Ban, January 28th, 2017 (Associated Press)

That moment demonstrated just how fragile our system really is. The only power any branch has over the President which is not ultimately rooted in the enforcement power of Executive police agencies is the power of impeachment. Everything else, the President either has de jure or de factopower to override. (Special prosecutors were an exception to this until 1999.)

I don't think Trump had anything in mind as complex as testing the limits of Constitutional authority; he wanted to see what he could get away with, and how people would react, and he used that information later to see if he could get away with more. It's very simple, and it's been his M.O. for his entire life. It was, in short, an experiment to see how much power he could seize, an attempt to go as far as he could to see if anyone could actually stop him. This is why I referred to it as a "trial balloon for a coup."

________________________________

Today, the constitutional crisis has only deepened. The problem is simple: the President continues to openly and brazenly flout the law (with his open self-dealing through "golf vacations" and through his family's businesses, and with his senior appointees' near-weekly habits of perjury, being the least controversial examples), and his essential argument is that no-one can stop him, so it must be legal.

What's troubling is that, to a great extent, he's right. The only power anyone has over the President which does not ultimately rely on the President himself to enforce is the power of impeachment. This has rarely been an issue in the past, because custom, shame, and basic honesty have kept Presidential power in check; Jimmy Carter famously sold his beloved peanut farm rather than have any business holdings that could be portrayed as a conflict of interest, and even Richard Nixon never used his pardon power to protect the Watergate conspirators.

But the power of impeachment is limited by the willingness of Congress to act, and for structural reasons, that no longer exists. In the mid-1990's, Gingrich's opposition party in Congress started to take on the role of "spoiler," shutting down the government rather than making a deal that didn't satisfy all their requirements. In the years following, Gingrich and others developed a strategy in which dealing across party lines was tantamount to treason. This meant that Congress' ability to get anything done fell apart, and a sequence of presidents (of both parties) had to turn to increasingly creative means to bypass them. And as that further weakened Congress, legislators increasingly saw their power not as the ability to pass laws (which was hopeless), but as the ability to either back or oppose the party leader — the President.

In short, Congress has spent the past twenty years weakening itself, reducing itself from the primary source of power in the government to a backup squad for the Executive. This is why in February, after National Security Advisor Michael Flynn's activities as an illegal foreign agent came to light, Sen. Rand Paul could quite naturally say "I just don't think it's useful to be doing investigation after investigation, particularly of your own party. We'll never even get started with doing the things we need to do, like repealing Obamacare, if we're spending our whole time having Republicans investigate Republicans. I think it makes no sense." The idea of an investigation as being about the power of Congress over the President is actively alien to Washington today; investigations have, for decades now, been about the power of party over party.

What this means is that today, it's hard to imagine anything which would cause Paul Ryan to call for an impeachment vote. Trump's statement in early 2016 that he "could stand in the middle of 5th Avenue and shoot somebody and… wouldn't lose voters" has turned out to be prescient: today, if he shot someone in the street, we would be treated to the same dance we've seen with every previous malfeasance of the past six months. (First Presidential spokespeople would deny it; then, Democratic members of Congress would decry it as clearly the last straw, while a few Republicans would say it was "clearly concerning;" then, talking heads explaining why it's a non-story, until Trump himself, most likely, would publicly tweet bragging about having done it; then, the same Republican Congresspeople explaining how it was technically legal and within the purview of the President; then, the next news story.)

The fact is that, for a powerless Congress, the only power possible comes from having their own President in office; anything which jeopardizes that jeopardizes their own ability to pass their favorite legislation. And there is no incentive left to counterbalance that.

It is possible that Mueller's investigation (if it isn't stopped by Trump in the next few days) will come out with evidence so damning that it makes even Paul Ryan blush, but I would not suggest you bet any money on that.

________________________________

What does this mean for our country? It means that we are now firmly in a place where the Constitution no longer offers any meaningful solutions. We have run into a basic bug in the system which the Founders didn't anticipate: that Congress would become subservient to the President, effectively eradicating the only surefire check on that power.

While that's not a shocking bug in retrospect, we should respect why the Founders didn't predict it: what they were doing was literally the first attempt ever at building a constitutional democracy at scale. Nobody had any experience with this, and the fact that what they built lasted for nearly 228 years is quite impressive. But we should also recognize that no other constitution in the world is this old; every other democracy since then has had its government collapse, or otherwise required massive changes to its system, at least once. France — our democratic younger sibling, inspired in 1789 to its own revolution — is currently on its Fifth Republic. The Fourth was ended by public referendum in 1958; the Third, by the Nazis in 1940. France, like many other countries, has changed its political structure both by force and of its own free will.

For America, this idea is hard to comprehend, since so much of our national identity is tied up with the very concept of the Constitution. If we are not the country founded in 1776, then what are we?

But we should remember that we are not the country founded in 1776. We are actually already in (at least) our second Republic; after the Revolutionary War, we were governed by the short-lived Articles of Confederation. The Constitution that we use today replaced it in 1789. And arguably, that Constitution was deeply changed between 1861 and 1877, with not only new amendments which fundamentally changed the relationship between the States and the Federal government, but a deep reinterpretation of many of its earlier provisions as well. (Even the modern notion of the "right to bear arms" as an individual right is a post-Civil War idea!)

And today, the Constitution — in either its 1789 or 1877 form — has broken. There is a President who claims to be above the law, and there is no mechanism in place which can contradict him. If this persists, the Constitution is no longer meaningful except as history; if it does not persist, the Constitution must be changed.

In an American Third Republic, we should consider that many ideas which seem "obvious" to us today about how our government is run — not merely the Electoral College, but even the idea of a President elected with powers separate from Congress — may change. This is not a failure of democracy, but rather its best function: the ability to fix itself when it breaks.

The experience of other countries in drafting their own Constitutions, often under either American guidance or the guidance of those who we ourselves guided in the past, may often be instructive. It can be useful to define certain "super-Constitutional principles" which are even more fundamental than the Constitution itself: in America, for example, the freedom of speech, religion, and association, or the right to due process of law, would be obvious candidates, things which we consider to be not merely political decisions but fundamental to who we are as a people.

It may also be useful to take the idea of checks and balances and turn the knob even higher than we have in the past; for instance, no democracy in the modern world gives as much power to their executive as the President of the United States has today. And certainly nobody grants legislatures the power to draw their own electoral districts!

________________________________

But we should not jump to drafting a new Constitution yet. We are watching the fall of the Second Republic, not yet the rise of the Third; extremely powerful forces would be violently opposed to anyone trying to rewrite the Constitution today, especially if it were for the purpose of deposing Trump. What comes next is not a Constitutional Convention, but rather a process during which the democracy we grew up with finally collapses; a process in which the power which has steadily accumulated in the hands of the Executive increasingly turns to serving its own interests, and abandons even the pretense of public service.

What happens between where we are now and the end of this situation remains unclear. The only thing clear is that there are no legal mechanisms which will end it; what happens next depends entirely on informal processes, on things like the public pressures which causes Congress and Trump to do one thing or another. Impeachment, for example, will not happen by any laws of nature; it would only happen if public outcry were so severe that Congress felt it had no choice. The 2018 and 2020 elections may or may not have any effect, when they come; if they end up being rigged in any number of legal or extralegal ways, they certainly will not. But those are still far away: even the voter suppression efforts are only just beginning. We are only, after all, six months into the age of Trump.
--
John Case
Harpers Ferry, WV

The Winners and Losers Radio Show
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The ideology of "the market" [feedly]

The ideology of "the market"
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2017/07/the-ideology-of-the-market.html

One curiosity of the row over top BBC pay has been the attempts of past and present BBC bosses to defend high pay by invoking "the market". "There is a market for Jeremy Vines, there is a market for John Humphrys" says James Purnell. "We operate in a market place." Pay is based on a "market-based calculation" say Mark Damazer (9" in). "The BBC does not exist in a market on its own where it can set the market rates.If we are to give the public what they want, then we have to pay for those great presenters and stars" says Lord Hall.

However, the "market" here is a queer one. There aren't many firms who want to hire someone to read the ten o'clock news, and there aren't many who can supply the provenskills to do so. It's a thin market. In such a market, we should understand pay as being set by a bargaining process in which power is exercised on both sides.

Talk of the "market" is therefore what Georg Lukacs called reification – the process whereby "a relation between people takes on the character of a thing and thus acquires a 'phantom objectivity.'" It obfuscates the fact that wages are set by the power of one person over another. Such obfuscation serves a profoundly ideological function; it effaces the fact that the capitalist economy is based upon power relationships.

Of course, BBC presenters aren't unusual here. It's generally the case that the labour "market" is in fact a power relationship.

For example, (many) capitalists have bargaining power and (many) workers do not. This means that, generally speaking, capitalists exploit labour.

And the "market" has given us a relative decline in low-skilled pay since the 1980s. This isn't wholly due to technical developments but to changes in power, such as the decline of trades-unions and welfare state and adoptions of surveillance technologies that have reduced the efficiency wage element of their pay.

Similarly, "market forces" have given us stagnating real wages over the last ten years. But again talk of the "market" disguises what are in fact dysfunctional emergent features of capitalism – the stagnant labour productivity that has arisen from, among other things, low innovation and capital spending.

What's more, "demand" is in part an ideological construct. Bosses are well-paid in part because of an ideological belief in the transformative power of leadership – a belief that isn't wholly backed by facts. And carers and cleaners are poorly paid because of an ideology which devalues their work.

Talk of "the market" is often question-begging; it begs the question of how, exactly, prices and wages are determined in the market. The answer usually involves some element of power.

Now, Hall, Damazer and Purnell are not stupid men and they probably fancy themselves – not perhaps wholly without justification - as among the more liberal and humane members of the ruling cadre. And yet they guilty of an unreflecting inability to see that market relationships are also power relationships. In this of course, they are not unusual. I've long complained that centrists and "liberals" have a blindspot about power; we saw just this in this week's Taylor report for example.

This blindspot, of course, serves the interests of the rich well. The BBC is not impartial.


 -- via my feedly newsfeed

Nearly Half of Trump Supporters Want Republicans to Work with Democrats to Improve ACA [feedly]

Nearly Half of Trump Supporters Want Republicans to Work with Democrats to Improve ACA
http://www.yesmagazine.org/new-economy/senate-fails-to-kill-affordable-health-care-will-an-independent-bloc-take-shape-20170719

And the majority of the Senate wants to work together, find common ground, and move on. That's called governing.

Larry SummersL Kenneth Arrow Commemoration at the Institute for Advanced Studies [feedly]

containing Summers now controversial remarks on Joan Robinson....Summer...for such a smart guy, who can compose speech in entire coherent paragraphs without notes...has a penchant for foot-in-mouth outbursts that resemble Tourette's syndrome

Kenneth Arrow Commemoration at the Institute for Advanced Studies
http://larrysummers.com/2017/07/15/kenneth-arrow-commemoration-at-the-institute-for-advanced-studies/

Tel Aviv, Jerusalem
July 5, 2017

I should say that there are many things I wish for in life. One of them is that I had the capacity for abstraction to follow the typical lecture at this remarkable seminar, which I know has done so much to shape so many careers and has meant so much to Kenneth. From discussions of gridlock in democratic countries, to issues of health insurance, to debates about how to discount the future benefits of environmental projects, to issues around derivatives markets, we see every day that albeit with long and variable lags, abstract economic theory moves the world.

I do not need to tell this group of Kenneth's genius. You've all heard the stories of him, apparently asleep, waking up to ask exactly the right question in the middle of a seminar. You've all heard the story of the group of assistant professors that were tired of him knowing everything, and, so found an obscure issue of National Geographic on the sounds that dolphins make to communicate with each other and drove the conversation to that topic, figuring this would be a topic that they knew more about than Kenneth. Kenneth proceeded to explain that National Geographic had described a superseded theory, and that the most recent work in the area explained that what the assistant professors were saying was wrong.

I witnessed one of these moments at our annual family Thanksgiving in Philadelphia. We took the kids to see Independence Hall–that's a relatively standard site when visiting the city. On the ride back, Kenneth recited the entire Declaration of Independence from memory. Later on that same trip, my wife Lisa, who's a Professor of American Poetry at Harvard, found herself in conversation with Kenneth. They were discussing Emily Dickinson, who Lisa was writing about at that stage. Kenneth asked Lisa which of the two then recent biographies of the poet she felt had captured her better and discussed at length their respective merits.

Those stories could be multiplied, but one wonders when one thinks about genius, what other human qualities go along with it? I thought my comparative advantage might be commenting on a few aspects of Kenneth's life that I think were inseparable from, but not the same as, his genius.

First, Kenneth the child: I didn't know Kenneth, obviously, as a child, but I've heard many stories from my mother and two features of those stories stand out. One, that for someone so brilliant, he was extraordinarily patient and gentle in teaching his younger siblings about anything they wanted to know. When his ten-year-old sister, four years younger than he, inquired of Kenneth, "What exactly does the phrase, 'make love' mean?," Kenneth found an appropriate and judicious answer. As I've heard it described, roughly speaking, as a child Kenneth did nothing wrong. This was good because there was the problem of how you punish a child like Kenneth. How do you punish normal children? You send them to their room. Well, there was no activity Kenneth liked better than being in his room, reading. Far, far better than trying to play baseball, or sitting outside on a hot day. What could be better than sitting in his room and reading? And he read and he read.

Second, Kenneth the teacher. Many have already referred to Kenneth as a teacher. As best I can tell, the only athletic ability at which Kenneth excelled was tossing a piece of chalk in the air and catching it. I experienced, when David and Andy were young, playing various ball games with Kenneth. I can reliably report that he was not able to catch a ball thrown from a distance of more than six feet, but with chalk he was excellent. For the right students, Kenneth was as good a teacher as there has ever been. But Kenneth had a real problem as a teacher, which is that he didn't really think like the rest of us. From his Olympian perspective, it was very difficult to understand what students did and did not understand.

A story is told—and I'm not sure it's true, but it's a good story–that in the year that I was in Kenneth's microeconomic theory graduate course, nobody was in any doubt about the profundity of what we were being exposed to, but there was some group in the class that was having substantial difficulty discerning the main points. So, a group of students very politely and humbly approached Kenneth and said, perhaps, he could work at explaining definitions and explaining terms, and just being a little more clear so people could follow the lecture. At the next lecture, very sweetly and innocently, Kenneth wrote, f(x) on the board, and he explained what f(x) means: a function. A function is something that maps one variable into another.

Now, if I had done something like that, it would have been because I was being sarcastic. If others had done that, it likely would have been because they were making a point about students needing to keep up or their frustration about students' slowness. Kenneth was utterly sincere and in good faith. From his perspective, the Slutsky equation and the meaning of a function were equally elementary concepts.

Not everything Kenneth did succeeded. There was a movement in the Harvard Economics Department in the early '70s (this is an experiment that has not been repeated as best I know in the last 45 years) to assure that faculty rather than graduate students would teach introductory economics to college freshmen. This was accomplished in two ways: one is assistant professors were required to teach introductory economics, and the other is that generous souls were prevailed on. Kenneth was a generous soul and he was prevailed on. So, for a full year Kenneth was the teaching fellow for 24 fortunate freshmen. He reported afterwards, and I fear data confirms this, that he had not been quite able to find their level, and of 24 teaching fellows that year, he had been ranked 13th. The experiment was not repeated.

Third, Kenneth's insatiable intellectual curiosity: You don't become a prodigious contributor to a discipline like Kenneth, with the kind of insights that Kenneth offered us, without a certain extraordinary intellectual intensity. I remember the fall night in 1972, after Kenneth was awarded the Nobel Prize. The other American Nobel Prize winner at that moment, Paul Samuelson, also my uncle, hosted a party for Kenneth and the Cambridge economics community. I was a sophomore economics major at MIT, so I was hardly appropriate company for such an august gathering, but I was a little unique in being related to both the host and the honoree, so I was invited and I participated as best I could in the conversation. I have only one enduring impression of that evening, which is that seven o'clock, became eight o'clock, became nine o'clock, and then approached ten o'clock. Almost everybody left, and Paul and Kenneth were discussing turnpike theorems. Kenneth was discussing aspects of the Pontryagin's maximum principle. Paul was discussing how stupid Joan Robinson was. Those of you who are old enough will really get this. And they were discussing the turnpike theorem, and the maximum principle, and the Hamiltonian and whatever. My aunt Marion, Paul's wife, went upstairs. The caterers finished cleaning and left. Selma had her very heavy winter coat and looked on impatiently. I was waiting for my ride back to Cambridge Kenneth and Paul were still discussing the theorems. Until they got it straight, that discussion was not going to end. It made an impression on me that I never forgot. There were two people in that room who wanted to discuss economics for the longest period of time, with the least regard for social exigencies. And those were the two people in that room who had won the Nobel Prize.

Fourth, Kenneth and public policy. Some of you probably don't know this, but Kenneth was proud of having been integral to the first cost benefit analysis of the US SST (Super Sonic Transit) proposal during his time on the staff of President Kennedy's Council of Economic Advisers. He had the right to be proud as his analysis was part of the reason that the United States did not join Britain and France in their costly SST error.
Kenneth followed many, many aspects of public policy, closely. The two Americans who, in my experience, were able to discuss Israel's dozen or so political parties with the most nuance were Bill Clinton and Kenneth Arrow. He would, each year at Thanksgiving, review with Eytan Sheshinski the progress of each of Israel's political parties. While it was enough for me to get a sense of how the good guys were doing, Kenneth was on top of every twist and turn.

I think there was only one moment in the 62 years of my being Kenneth's nephew, when we were seriously annoyed with each other, and I don't actually know now which of us was right. In the summer of 1996, when I was in charge of international financial policy for the Clinton Administration, Boris Yeltsin was running for reelection against Zyuganov who was the full-fledged revanchist, the "return to the old way" Communist. Privatizations had taken place and were continuing. As history has recorded, the privatizations were not entirely legitimate, to put it mildly, and had substantial elements of unjust enrichment. It bears emphasis that some of the enterprises being privatized were being stolen from their state managers, so there was a reasonable argument that at least having some owner, even an illegitimate one, would improve the way in which they were being managed. The United States government, while not supporting the details of the privatization, was working very hard to support Boris Yeltsin against the Communist, and to support the idea of economic reform in Russia.

Just before the election Kenneth signed a letter, along with a group of pre-perestroika, pre-glasnost Soviet economists condemning the economic policies of the Yeltsin administration. It got enormous play in Russia. I thought it was an irresponsible and politically naïve act to intervene in a way that would predictably favor the communist without checking with the US government. He thought that I was losing my proper focus on what the right economic policy should be, in order to serve the political objective of the government. My poor mother had to hear my view of Kenneth's actions and Kenneth's view of my views. Fortunately, there were months that passed before Thanksgiving.

Five years ago I was involved in forming a commission of various former officials and scholars on global health. Dean Jamison, who is a former student of Kenneth's, and was my collaborator in this venture, asked whether we should have Kenneth join. I said, "No, he's 89 years old. The commission's going to meet in Oslo. The commission's going to meet in Addis Ababa. Who knows where this commission is going to meet? This is surely not what he wants to be doing at this stage in life. I don't think that really makes sense." And Dean said, "Really??" I thought about it and I decided that consumer sovereignty was a good principle in which Kenneth believed, and so I worked very hard to figure out a way of asking him whether he'd be interested in doing it, that was designed to make "no" as easy an answer for him as possible. Kenneth said, "Yes, absolutely, I'd be happy to do it. And just one more thing, as I'm approaching my 90th birthday, I probably won't be able to write a section of the report myself." And I said, "That will be okay." I can report in a style that I do not think has been passed onto the next generation of academics, Kenneth joined the commission before learning that it would be possible to fly business class to its meetings. He would have been wholly prepared to fly coach, if that is something that had been requested.

Fifth, Kenneth, the person: One of the things that has never stopped impressing me about Kenneth was that while he was obviously extraordinary and he was obviously treated by people, like the people in this room and so many others, as extraordinary, he never had a sense of himself as special. I remember many, many years ago, probably 35 or 40 years ago, the American Economic Association, for some reason, had its meeting in Atlantic City. Atlantic City is about an hour, maybe an hour-and-a-quarter from Philadelphia, and after the meeting Kenneth was coming to my parents' home. There are many ways one could make the journey. Kenneth went to the Atlantic City bus terminal, got on the bus, rode the bus to Philadelphia, and wanted to be picked up at the bus terminal. My mother explained, "You know, you were given a fair amount of money, we read in the paper a few years ago, when you won the Nobel prize. There are taxis, there are limos, there are many Penn faculty who, undoubtedly, would have been delighted to give you a ride in order to spend an hour with you. Did you really need to take the bus?" He said, "Oh, really? I guess I could have done those things but I never really thought of anything else."

This was something that ran very deep. Four or five years ago, Kenneth found himself in Stanford Hospital needing surgery, and there were different surgical options. For whatever reason, the process of finding the way to the right option was not happening in an especially effective and efficient way. My mother and I said to Kenneth, "Kenneth, you know, you are not just any patient at the hospital of Stanford University. You have devoted much of your life to Stanford University and you are, perhaps, the most distinguished person associated with Stanford University. They really should take care of you and they should see you quickly, not slowly." Kenneth said, "Really? Well, what should we do?" And I said, "Well, just kind of make it clear." And it was clear that he didn't really quite know what I meant, or how to do it. I asked, "Would it be okay if I made a couple of phone calls?" And he said, "Yeah, I suppose, if you want to." The appropriate things then started to happen.

A final example of this, just slightly ethereal quality: I remember being in a conversation, with Kenneth and Selma in their kitchen in Cambridge, many years ago. We were discussing annuities. We were having a highly-animated conversation about intemporally separable utility, the nature of the bequest motive, risk aversion, adverse selection and whether purchasing annuities was optimal. A group of economic theorists like those here can more or less imagine all the propositions. Selma didn't really find the conversation very interesting, but said, "Well, wait a minute, annuities? , We're approaching retirement. Do we have our plan?" And Kenneth said, "Oh, I don't know. Whatever, it will work itself out. It will work itself out in some reasonable way."

Finally, Kenneth as an uncle and as a great uncle: If there's a lot of ruin in a nation, there's a fair amount of ignorant assertion in a family of 17, with many young persons present. I have never heard Kenneth treat a comment other than utterly seriously. If a nine year old or a twelve year old was trying to figure out whether it was true, false, or sometimes that all equilateral triangles are isosceles, he was prepared to devote himself to that question with the same thoughtful seriousness that he was prepared to devote himself to questions of mechanism design or the limits of information. If an opinion was being expressed about gambling or football betting, he was prepared to devote himself to at least the quantitative aspects of the betting, if not the content of the sport, in the same way that he would devote himself to the Savage axioms of risk and utility theory. He was there for everyone, expecting nothing in return, and, therefore, for his family, as for all of us here, he made us feel like we were smarter, more noble, and better than we actually were.

I miss him today, and the world will miss him always. Rest in peace, gentle genius.


 -- via my feedly newsfeed

DeLong: Reading Notes for Robert Skidelsky: "Keynes: A Very Short Introduction"... [feedly]

Reading Notes for Robert Skidelsky: "Keynes: A Very Short Introduction"...
http://www.bradford-delong.com/2017/07/reading-notes-for-robert-skidelsky-keynes-a-very-short-introduction.html

John Maynard Keynes: John Maynard Keynes was brought up a classical liberal and a classical economist. He believed in free trade, economic progress, cultural uplift, and political reason. He then found himself working for the British Treasury during World War I, unable to stop what he thought were disastrous post-World War I political decisions. He then found himself watching as the classical economic mechanisms he had been taught to admire all fell apart.

He then picked himself up.

After World War I Keynes used what power he had to—don't laugh—try to restore civilization.

He had, all things considered, amazing success and an amazing impact.

In Skidelsky's—powerful and I believe correct--interpretation, Keynes before 1914:

believed (against much evidence, to be sure) that a new age of reason had dawned. The brutality of the closure applied in 1914 helps explain Keynes's reading of the interwar years, and the nature of his mature efforts... to restore the expectation of stability and progress in a world cut adrift from its nineteenth-century moorings... (ES, page xv)

Thus he then spent the rest of his life arguing that, if only statesmen would be farsighted and clever enough, they could put Humpty-Dumpty back together again: the world could get back to a good world of free trade, economic progress, cultural uplift, and political reason. He undertook a brave if losing struggle against the approaching Great Depression, against political insanity, and against the Nazi Party's attempted revenge for the German defeat in World War I. And when he lost in the 1920s and the 1930s he picked himself up yet again, and tried yet again in the mid-1930s and thereafter to lay the groundwork for future victories for prosperity, rationality, and technocracy.

And, in the end, he succeeded.

In this second attempt at the task of rescuing civilization he was successful: His General Theory of Employment, Interest, and Money did change the world. The book ends with a bold claim for the importance of ideas rather than interests that, in context, has to be read not as a considered judgment but as his desperate hope:

Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas.... But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil... (page 570).

The most extraordinary thing is that Keynes was right.

But what, exactly, did he think needed to be done? What framework of ideas did he construct in the process of trying to persuade people to do it? And how well did he do? And how did he do so well?

These notes assume that you have followed my advice for how to read Skidelsky's Keynes: A Very Short Introduction http://amzn.to/2utbWBG: Start with the first paragraph of chapter 1, then skip forward to chapter 3, and read to the end of chapter 5, and then read the eipilogue. Only after that go back: read first the Introduction, and then chapters 1 and 2, and finally chapter 6.

1st ¶: "Keynes set out to save what he called 'capitalistic individualism'...:

Chapter 3: The Monetary Reformer: Skim (and largely ignore) the sections if this chapter in which Skidelsky summarizes and analyzes Keynes's Treatise on Money: It was largely a dead end. Focus on the sections devoted to Keynes's Tract on Monetary ReformThe Economic Consequences of Mr. Churchill, and Can Lloyd George Do It?

Keynes believed that full employment and price stability were the essential keys to the creation of prosperity and the maintenance of social and international peace. The rich, under the influence of their established morality of thrift, would take the profits from the capital they owned and largely reinvest them, thus boosting productivity, and thus raising wages and creating equitable growth. The key for Keynes was therefore that the government had to manage the monetary system to avoid the extremes of both "deflation" and "inflation":

Rising prices and falling prices each have their characteristic disadvantage.... Inflation is unjust and Deflation is inexpedient. Of the two perhaps Deflation is, if we rule out exaggerated inflations such as that of Germany, the worse; because it is worse, in an impoverished world, to provoke unemployment than to disappoint the rentier. But it is not necessary that we should weigh one evil against the other. It is easier to agree that both are evils to be shunned. The Individualistic Capitalism of today, precisely because it entrusts saving to the individual investor and production to the individual employer, presumes a stable measuring-rod of value, and cannot be efficient—perhaps cannot survive—without one. For these grave causes we must free ourselves from the deep distrust which exists against allowing the regulation of the standard of value to be the subject of deliberate decision...

But if full employment and price stability could not be maintained, bitter political experience taught that the result would be the very unpleasant victory of Hitler-Mussolini fascism or Lenin-Stalin communism.

But how did you avoid inflation or deflation? In the terms in which Keynes was thinking in the 1920s, you did so by having the government take steps to balance the supply and demand for money. If there was an excess demand for money, people would slow down their spending in order to build up their money balances—and the result would be closed factories, unemployed workers, and deflation. If there was an excess supply of money, people would speed up their spending in order to get rid of money they did not think the needed—and the result would be inflation and disappointed savers. Clever technocratic management of monetary policy could, Keynes thought in the 1920s, do the job of balancing the supply of and the demand for money. Skidelsky's chapter 3 follows Keynes's thought as he makes this first attempt to explain why he thought that, and thus his first attempt to build something that could be called a "macroeconomic theory".

Chapter 4: The General Theory: Chapter 4 is Skidelsky's account of how Keynes changed his mind: how he came to believe that clever technocratic management of monetary policy could not always and—perhaps—could not even usually do the job, and that other tools would be needed: "a somewhat comprehensive socialization of investment" under the auspices of the government or of incentives provided by it, was his ending point. Most of the issues we will cover in at least the business cycle portions of the course are raised here, in Skidelsky's chapter 4, in his account of Keynes's second attempt to build something that could be called a "macroeconomic theory", and his publication of that theory in his book The General Theory of Employment, Interest and Money http://amzn.to/2utumlZ.

Chapter 5: Economic Statesmanship: With the growing influence of the General Theorybefore September 1939 in promising an easy and straightforward policy path that would lead the North Atlantic out of the Great Depression, and with the outbreak of World War II in Europe in September 1939, Keynes's influence grew. He found himself applying his theory to problems of how to finance World War II (in which his theory had moderately conservative implications, in that it required less of a government takeover of the whole economy than was presumed to be needed) and how to build a strong and prosperous post-WWII economy (where his role in creating the Bretton Woods system of international macroeconomic management was a remarkable politico-economic success). He also found himself nurturing and guiding a growing group of economists who took the task of managing and damping the business cycle seriously. Unlike other schools of economics, which tended to see depressions as things like bad weather that one had to endure, Keynes and his disciples promised a much more sunny future for the economy.

Epilogue: The View from 2010: What has remained of Keynes's accomplishments? Among economists, the idea that it is the government's business to generate full employment and price stability has remained—except for diminishing factions of economists at the University of Chicago, the University of Minnesota, and the Ludwig von Mises Institute. And, among economists, the General Theory framework he proposed of focusing primarily on the components of spending and demand rather than primarily on the excess demand or supply of money has endured. In addition, we owe to Keynes:

  1. A focus on the role of uncertainty, and of changing expectations.
  2. A belief, among economists, that fiscal policy has a powerful role to play: that when the private sector sits down as far as demand and spending are concerned, the government should stand up.

As Skidelsky closes his book:

We do not need a new Keynes; we do need the old Keynes, suitably updated. He will not be our sole guide to the economic future, but he remains an indispensable guide.

Introduction: By now you should have read chapters 3-5 and the epilogue, and should be circling back to the introduction. Tell me what you think of the introduction: there is a lot in it, but it is, it seems to me, written more for somebody steeped in the intellectual and cultural history of Great Britain in the first half of the twentieth century than for you, or indeed for pretty much anybody likely to pick up the book in this day and age. This time through reading it, I was struck by a passage in the introduction that, I believe, summarizes Keynes's standpoint toward life and toward his mission very well:

After 1914 there was the management of the world to attend to—a world which, after 1914, seemed to be spinning into chaos. Here the problem was one of control, not liberation. Civilization, Keynes acknowledged in 1938, was a 'thin and precarious crust'. The men of power took over... Stalin... Mussolini... Hitler.... But the important point is that [Keynes] never succumbed to the politics of cultural despair. Despite everything, that Edwardian [era, 1894-1914,] cheerfulness survived. Uncertainty could be managed, not by brute force, but by the exercise of intelligence, and gradually the harmonies might be restored. This was his ultimate credo, his message, if there is one, for our time...

Chapter 1: The Life: Keynes's life was one of the most interesting lives I know of lived in the twentieth century. It is not, however, clear to me that it has all that much to do with his economics—either with the economics of John Maynard Keynes or with the doctrines of those who have claimed to follow and develop his insights and created Keynesian economics. So read this chapter for a flavor of the times in which he lived: not to get a secret key to understanding macroeconomics.

Chapter 2: Keynes's Philosophy of Practice: This chapter, also, is very interesting in its own right—the intellectual and cultural portrait of a particular kind of man, the early twentieth century British anti-democratic liberty, a man for whom the Conservative was the stupid party and Labour was the silly party. Inequality did not much bother Keynes. Disappointment did. And waste. And lost opportunities. Nevertheless, as with chapter 1, it is not clear to me that this chapter has all that much to do with his economics—either with the economics of John Maynard Keynes or with the doctrines of those who have claimed to follow and develop his insights and created Keynesian economics.

Chapter 6: Keynes's Legacy: This chapter is, I think, largely wrong. It was written in July 1905, just a few years after the Reagan-Thatcher high tide. In the United States, Ronald Reagan had been president for eight years from 1981-1989, his Republican successor George H.W. Bush for four from 1989-1993, and then Bill Clinton had become president in a confused three-candidate election. Clinton was seen as largely an accident—and it was, after all, Clinton rather than Reagan who had announced that "the age of big government is over" in his State of the Union address. In Britain, the highly conservative Margaret Thatcher had ruled from 1979-1990 and her Conservative successor John Major was still resident at 10 Downing Street. Thus Skidelsky's judgment was that Keynes and "Keynesian" policies were of little relevance:

Keynesian policies come to us today wrapped in a history of rising inflation, unsound public finance, expanding statism, collapsing corporatism, and general ungovernability, all of which have seemed inseparable from the Keynesian cure for the afflictions of industrial society. We do not want to traverse that path again...

This conclusion is very much of the particular time in which it was written. The epilogue is, I think, much more balanced.

Further Reading:

John Maynard Keynes:

Brad DeLong:

MOAR from me, if you have time:

Housekeeping:


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