Monday, March 19, 2018

John Buell — Will Trump’s Infrastructure Plan Become Another Attack on Democracy?

John Buell is a columnist for The Progressive Populist and a faculty adjunct at Cochise College. 

President Trump promises rapid economic growth compliments of his tax cut. Even if he is correct, however, the private sector expansion he celebrates will likely leave huge holes acknowledged even by many conservative economists.   California is burning. Our highways, sewers, bridges, and tunnels are now graded at nearly failing. There is widespread agreement that repairs and restoration of our infrastructure must be funded on a massive scale. Yet what shape will this spending assume? Which projects will be funded? Who will own the new and renovated structures and with what responsibilities? If the tax cut model of gifts to the wealthy and well positioned is followed, the damage will include not only inconvenient or poorly maintained rails, roads, and other public services but also further erosion of our democracy itself.

In a prophetic essay a year ago in Boston Review Brown University political theorist Bonnie Honig, author of Public Things: Democracy in Disrepair, pointed out that the Trump family’s decision to opt out of residence at the White House in favor of life in Manhattan or Florida reflected a disdain for pubic things. Neoliberals differ on some issues, but one key notion most hold is the right to opt out of publically provided services or goods one does not need or want. This neoliberal mindset imposes substantial burdens on the rest of us. A recent Wall Street Journal article only confirms Honig’s concerns. The Wall Street Journal  found  that the president has spent more than 100 days at one of his properties, including more than a month each at his golf course in New Jersey and at Mar-a-Lago in Florida. Citizens for Responsibility and Ethics in Washington points out: ”visits to his properties in Florida costs the local Palm Beach government so much that it considered raising taxes.”

The opt- out culture has more widespread and destructive effects. As Honig puts it: “Charter schools and voucher programs invite locals to opt out of public schools while drawing on public funds that might have improved the public education system rather than provide an alternative to it.” When these schools succeed, often by excluding special needs children, their success is taken as proof of the inadequacy of public education.

Neoliberals generally resist or seek to limit the services that are provided by public entities.  When these must be provided, the service should be privately owned and run like any other profit maximizing business.  This requirement, however, exposes some of the tensions and contradiction within neoliberalism. What if, as is often the case, there are very few businesses that can provide the service? Won’t these firms be in position to charge monopoly prices for their services? If you believe in limited government—at least limited with respect to any possible downward redistribution—you will allow monopoly to serve in the faith that in the long run everything will work out. Economists more attuned to the real concerns that Smith, Mill, and Ricardo voiced regarding monopolies will demand anti trust or insist on regulation of “natural monopolies.”

In recent times, both here and internationally, the former course has prevailed. Things have not worked out and privatization has become a means by which politically and socially well positioned have increased their power. But it was not always that way. University of Missouri-Kansas City economist Michael Hudson puts it thus:

“To prevent such price gouging and to keep economies competitive with low costs of living and doing business, Europeans kept the most important natural monopolies in the public domain: the post office, the BBC and other state broadcasting companies, roads and basic transportation, as well as early national airlines. European governments prevented monopoly rent by providing the basic infrastructure services at cost, or even at subsidized prices or freely… The guiding idea is for public infrastructure to lower the cost of living and doing business…[With privatization] the economy ends up being turned into a collection of tollbooths instead of factories…”

Trump’s detailed infrastructure proposals still are not out, but early suggestions about tax credits to corporations that supply such infrastructure are problematic. Corporations are likely to invest only in those projects with likelihood of monopoly profits, i. e. those where they can impose their own tollbooth. This will leave some very important services underdeveloped and others overly costly or inconvenient.

Converting public things into private goods reinforces a trend toward corporate oligarchy. Traditional fiscal conservatives hide their support of oligarchy behind warnings of dire consequences of government overspending. Their stated reason for opposition to generous public spending on public goods is a concern about possible bankruptcy. Ad nauseam they chastise us: Just as families that splurge beyond their means go bankrupt so too will nations that spend too much on public goods. The analogy is false. Our government, unlike its citizens, controls and issues its own currency. Trillions poured into the economy by the Federal Reserve for the bank bailout occasioned little more than a yawn in world financial markets and no inflation.  

Republicans’ and centrist Democrats’ concerns about the debt are a smoke screen to attack Social Security. Neoliberals’ real fear is the greater equality generous public things might foster and the coalitions across borders, ethnicities, and faiths the construction and maintenance of such goods might encourage. Honig puts the case in Whitmanesque language: “The democratic experiment involves living cheek by jowl with others, sharing classrooms, roads, and buses, paying for them together, complaining about them together, and sometimes even praising and enjoying them together, as picnickers will do on a sunny afternoon in Central Park. But the neoliberal corrective absolves us of this necessity and responsibility. That Central Park—landscape architecture’s ode to the power of democratic beauty—is just a stone’s throw away from the barricaded Trump Tower is only one of the many sad ironies of the story to be told here.”

Public things and the democratic space they foster and are fostered by encourage both collective responses to common problems and an opportunity to address the injustices (remainders) that emerge from even the most egalitarian and idealistic processes. The physical state of our infrastructure reflects more than conventional faith in balanced budgets. It is an attack on democracy and must be resisted by appealing to and enhancing democracy itself.

Continue Reading →

Wednesday, February 28, 2018

Jairus Grove — Living on the Wrong Side of the Redline

Jairus Grove
Director, University of Hawai'i Research Center for Futures Studies 
Associate Professor of International Relations

Department of Political Science
University of Hawai'i at Manoa

On Valentine’s day 2018, Admiral Harry Harris revealed that an evacuation plan for Non-essential personnel and military dependents was being developed for South Korea. A few weeks earlier the public was given a brief preview of this policy when almost-U.S. Ambassador to South Korea, Victor Cha, announced that he was dismissed by the Trump administration in part because of his resistance to undertaking an evacuation. In his words, an evacuation would provoke North Korea and hasten the pace of invasion plans by the White House. Admiral Harris’ testimony before congress confirmed Cha’s incredulity regarding such a plan as he described the unrealistic logistics of moving thousands of American military dependents and potentially hundreds of thousands of U.S. citizens residing primarily in Seoul. Adm. Harris’ testimony is not encouraging, particularly in light of Trump’s ominous foreshadowing of a world-threatening “phase II” if another round of sanctions do not produce complete nuclear disarmament on the part of North Korea.

From the island of Oahu the response is: what about us? Seoul is 5 to 10 minutes from North Korean retaliation but Honolulu is only 15 minutes further away by ICBM. Where is our evacuation plan? The already unimpressive track record of U.S. nuclear interceptors has been joined by another very public failure of an interceptor test here in Hawai’i. Add to this the lingering collective dread after our mistaken missile alert on January 13th of this year, and we want to know where our military-assisted evacuation plans are. Unlike South Korea which has thousands of bomb shelters, Honolulu has no approved public bomb shelters. This is a fact reinforced by recent statements by state civil defense authorities recommending that we all shelter in place despite the fact that most Honolulu homes are of wooden construction and do not have basements. We have nowhere to go, nowhere to hide, and we have received a taste of what it is like to wait for unstoppable death with those we love most.

What makes our collective vulnerability all the more terrifying is the palpable panic on the faces of our active duty service personnel in our communities, classrooms, and families. They are being told to prepare themselves to die for their country in Korea, are being issued a new generation of body armor, trained for tunnel warfare, and tasked to move the last of the necessary tactical equipment to South Korea. States move B-2 bombers to Guam to send a signal to North Korea. They move body armor to Seoul to prepare for invasion. Here in Hawai`i, we take the Trump administration at its word when they say there is no ‘bloody nose strike’ in the works. That is because we know a full scale attack is being planned. If this seems unthinkable on the mainland, consider how often you have said Donald Trump’s behavior was unthinkable just before he proved you wrong.

If all of this seems alarmist, just read the news. Another career diplomat and one of the last veteran experts on North Korea, Joseph Yun, is unexpectedly retiring this Friday. The administration’s active pursuit of war is further corroborated by leaks inside the DoD that war planners were purposely slowing down the development of new scenarios for invading North Korea out of fear that it would empower Trump to enact one of the scenarios. To further complicate the possibility of peace, North Korea has responded to the weak U.S. offer of post-Olympic talks by staying that diplomacy cannot happen if nuclear disarmament and North Korean vulnerability are not negotiable. Further, the U.S. administration is trumpeting the U.N. announcement that North Korea is aiding Syria’s chemical weapons development; this is an accusation hauntingly reminiscent of the ramp up to invade Iraq. And as Honolulu Star-Advertiser journalist, William Cole, has confirmed, Fort Schafter here in Honolulu is furiously at work on a plan to evacuate the dependents of military and diplomatic personnel from South Korea. The graveness of the situation has been publicly underlined by statements from Senator Lindsey Graham and Senator Tammy Duckworth who both believe that war is an imminent threat to U.S. citizens. Finally, the troops, air power, naval power, and the munitions to supply them have all already been moved to the theatre of our impending war. To bring it all to a point, and repeat the tragic history of the 2003 Iraq invasion, February 28th, the Wall Street Journal published John Bolton's editorial "The Legal Case for Striking North Korea First." The only thing left standing between the U.S. and war is a decision by President Donald Trump.

The wrong people have been making the decisions over war and peace for too long and with tragic consequences. We have a generation of soldiers with PTSD, traumatic brain injury, and permanently life-altering wounds because President George W. Bush decided to prosecute a war of opportunity in Iraq. If President Donald Trump were to make a similar decision on the Korean peninsula, the consequences for the United States would be incomparably catastrophic. Figures reported by Adm. Harry Harris as well as regional expert and CSIS director Ralph Cossa estimate that more than 200,000 U.S. civilians would be in harm’s way in South Korea, 162,000 in Guam, and another 1.4 million Americans would be targeted in Hawai’i. The overwhelming majority of all of these populations live just a few miles from the most probable military targets. Seoul, all of Guam, Pearl Harbor, Fort Schafter, are all densely populated civilian areas that would be engulfed in fire.

Those on the periphery would face nuclear fallout of a kind for which we have no models to predict the consequences. We have never fought a nuclear war with weapons in the range of a hundred kilotons. The only thing we can know for certain is that a nuclear exchange between the U.S. and North Korea would kill millions in the first hours of combat. What happens next, a potential strike on the mainland with biological or chemical weapons? The sudden discovery that North Korea does have the potential to reach the U.S. mainland with nuclear ICBMs? With both sides fighting for their very survival and the potential to draw in China and Russia, the gamble on the Korean peninsula risks not only the first global nuclear war but the first time as many as four nuclear powers could be engaged simultaneously.

Even in the best case scenario, that is, unprecedented accuracy and execution, 100 percent of U.S. missile interceptors would be spent before a small fraction of the potential nuclear missiles were launched by any of these powers. Many will certainly scream that this is exactly why we need a more robust national missile defense and they may be right. Unfortunately, this war is going to be fought in the next few months and in addition to the major technological breakthroughs that will need to occur at a pace we cannot control, even the construction and deployment of existing technology will take years. A future defense system cannot save my children in Hawai’i and it will not save yours on the mainland either.

We must demand the democratic control of war and peace now. Unlike the floundering development of the national missile defense system, the technology for U.S. war control was deployed March 4th, 1789. The U.S. constitution gives the war powers to Congress, a body held accountable by citizen voters, not an electoral college. The U.S. Congress can make peace with North Korea and begin the process of normalizing relations so that real diplomacy can begin for a lasting peace. The lesson of the Cold War is that diplomacy and the institutionalization of enmity saves lives. Nuclear hotlines, arms control treaties, and diplomacy save lives. Deterrence did not save us from the Soviet menace; deterrence held each of the parties at bay until co-existence could be successfully negotiated.

What we face on the Korean peninsula is even more terrifying than the Cuban Missile Crisis. What Trump is planning for North Korea would be the equivalent of President Kennedy thinking he could preemptively invade the Soviet Union, safely destroy or secure all of their missiles, and all before a retaliatory response could be mustered. Add to this insane scenario that we live in a world with China and Russia both better equipped than the Soviet Union of 1962 and you begin to get a glimpse of the hubris of our current administration. A decision of this magnitude should not be made in the oval office. If democracy has any value at all, if the right of representation has ever mattered, it is at the moment in which the decision could mean the end of our world as we have known it.

What would democratic control look like? To begin with, Congress should reciprocate North Korea’s public declaration not to use nuclear weapons offensively. At the same time that Congress declares our own nuclear no-first use policy, it should direct Strategic Command that the President only has retaliatory nuclear authority. It must be made clear that this includes the use of so-called tactical nuclear weapons and nuclear bunker busters. Defanged of a nuclear first strike, Trump’s ability to escalate the conflict too quickly for Congress to act becomes equal parts impractical and unthinkable. The next step should be a concerted effort to normalize relations with North Korea and support the bilateral dialogue between North and South Korea. You cannot successfully negotiate with another country while you also have a stated policy of overthrowing the government of that country’s regime. Mutual recognition of sovereign equality is a precondition to any real discussion. If these efforts fail, if North Korea truly is undeterrable and launches their weapons, thereby committing national suicide, the U.S. is no worse off than it would be minutes after a preemptive invasion. We must exhaust real diplomacy or face a world in which sacrificing a few million Americans at a time is a rational foreign policy objective. Maximal Pressure is not a strategy for peace. It is a prelude to war and it must be stopped. Our President will not protect us. Our lives are in our hands and it is time to fight for survival.

Suggested Reading and Public Evidence of Claims Made

Admiral Harry Harris Before Congress on Effort to Evacuate U.S. Citizens from South Korea

Tammy Duckworth Urges Evacuation of South Korea

Lindsey Graham and Others Urge Evacuation of South Korea

U.S. Sends Hundreds of Thousands of Bombs to Guam for War with North Korea

Hawaii and Guam Will Be Targeted and Escalation Will Not Be Controllable

U.S. Envoy to North Korea, Joseph Yun, Unexpectedly Retires

Victor Cha Dismissed In Part Because of Discussion Over North Korea Strike and Evacuation

DOD Fears Too Many Options for War Will Increase Trump’s Confidence to Go To War

Trump Has Sole Authority to Launch Nuclear Attack

How a War With North Korea Would Unfold. Millions Dead.

B2 Nuclear Stealth Bombers Deployed to Guam

F-35’s Stealth Fighters Deployed to Okinawa

Three Aircraft Carrier Groups Deployed to North Korean Theatre

U.S. To Deploy Missile Capable Drones to South Korea

U.S. Soldiers Training for Tunnel Warfare

CIA Head Predicts North Korean Nuclear Capability will Reach Mainland U.S. in Months not Years.

Trump Threatens Destructive Phase II if Sanctions Do Not Work

Trump Sabotages Tillerson’s Diplomatic Efforts

U.S. Quietly Deploys Soldiers and Pilots to South Korea for War

U.S. Missile Interceptor Fails Off Coast of Hawaii

The Missile Defense System is Speculative at Best

North Korea Possesses Significant Biological and Chemical Weapons Threat

Hawaii Residents Told To Shelter In Place

University of Hawaii System Sends Out Email That There Are No Bomb Shelters

U.S. Congress Estimates 390,000 Veterans with PTSD and Traumatic Brain Injury From Iraq and Afghan Wars.

Signs of an Impending Korean War

Russia Will Interpret a Nuclear Attack on its Allies as A Nuclear Attack on Russia

Japan Intercepts Russian Bombers

Bolton Makes A Public Case for Striking First
Continue Reading →

Tuesday, December 26, 2017

Gitte du Plessis — Cultivating Catastrophe: Why Does North Korea Still Pursue Biological Weapons?


Gitte du Plessis

Gitte du Plessis earned her PhD in the Department of Political Science at the University of Hawaiʻi at Mānoa, and is now a post-doctoral researcher at the RELATE Centre of Excellence in the department of Geography, University of Oulu, Finland. She is currently completing a monograph titled Microbial Geopolitics: Living with Danger and the Limits of Security, and has begun a new project that focuses on non-human forces in Arctic geopolitics.

In the deadly game of sabre rattling, biological weapons are out of vogue. As I have explored elsewhere, the idea of pathogens as weapons of mass destruction had its heyday in the last century, when countries such as Britain, France, Japan, the Soviet Union, the United States, Israel, South Africa, and Iraq all had offensive bioweapons programs. Overwhelmingly, the pursuit of biological weapons has been futile and a waste of resources. The problem with weaponizing pathogens is that pathogens resist weaponization. Microbes are living beings, which sets them distinctively apart from chemical or nuclear weapons. Nobody, thus far, has been able to control microbes enough to actually train them. Microbes don’t respond to discipline, threat or punishment, they don’t understand human commands, and their modes of conduct are so radically different from human modes of conduct that mastering contagion in the interest of war has proved close to impossible. Hence, the history of the use of biological weapons is sketchy and everything but glorious – a series of failed attempts at microbial control. Infectious pathogens are lethal, and they pose a threat to human lives, but overwhelmingly, the lives that have been lost to biological weapons are of lab workers, test animals, test humans and civilians killed by pathogens from programmes that were supposed to protect them. The laboratory is deadly in itself, and the weapon rarely makes it to the battlefield in a decisive way.

For these reasons, most global powers have turned their attention to other kinds of weapons. The United States now only conducts research on biological weapons for defense purposes. Contemporary innovations in high-tech weaponry are focused on drones, robots, and artificial intelligence, while low-tech innovation is turning to everyday items such as cars or improvised explosive devices made out of surplus electronic and military components. In comparison to the effectiveness of these sorts of weapons, pursuing biological weapons is a strategic blunder.

So why is the North Korean regime still investing in the capabilities of biological weapons? A recent report from the Harvard Kennedy School Belfer Center for Science and International Affairs titled North Korea’s Biological Weapons Program: The Known and Unknown, details how North Korea is in possession of 13 different biological agents that can be weaponized, and that they likely have the capability to weaponize at least anthrax and smallpox within a matter of days. The easy explanation is that North Korea is still living in the last century. I think something else is going on. 

Compared to other international powers, characteristics of North Korea make the regime more likely to attempt collaboration with pathogens. Only great powers are heavily invested in global order. The disordering properties of biological weapons are alluring to North Korea, because the regime thrives and depends on global disorder. The way in which pathogens are unknowable and uncontrollable suits the North Korean regime, whose tactic is to be exactly this kind of presence in international relations, in the hopes that others are discouraged from messing with them. Other nations gave up on biological weapons as they realized that the destruction caused by pathogens cannot be mastered to the point where a nation can direct pathogenic destruction only at the enemy, without significant risk to itself. Pathogens are finicky, and easily turn back on the disperser. According to an expert interview cited in the report from the Belfer Center, North Korea considers human vectors as one way of dispersing their biological weapons. This kind of sacrifice is currently unthinkable to other nations given the relative security of most great powers and their allies, but not to North Korea, who values the survival of the regime via deterrence over North Korean lives. This means that the self-destructive elements of pursuing biological weapons are tolerable to North Korea. 

North Korea’s pursuit of biological weapons receives little attention. The international community focuses primarily on the security threat of North Korea’s nuclear program. Unlike the threat of biological weapons, the nuclear threat can be managed and to some extent controlled with conventional and nuclear deterrence strategies. This is not to suggest that nuclear weapons are safe, however the international order has normalized the rules of nuclear competition, and despite concern of nuclear proliferation, nuclear technologies mostly comply with these rules. While the pursuit of biological weapons is a strategic blunder from the perspective of a user of those weapons, being the enemy of a power that nonetheless pursues them is a strategic headache. Biological weapons are a last resort, and it makes sense to use them for a crumbling power with nothing to loose, as a last dash against a global order that refuses to accept its existence. This means that biological weapons cannot be controlled with war, because destruction of North Korea is an incentive to turn to these kinds of weapons. We could for example imagine North Korea infecting its own fleeing refugees as a kind of second strike in an already lost war. 

Because North Korea is an outlier resonating with global disorder, their pursuit of biological weapons makes sense. While the United States and North Korea are equal enemies in the power play of nuclear deterrence, the uncertainty of the North Korean biological weapons program gives North Korea an edge. Biological weapons destabilize the world of international relations in different ways than the seemingly rational world of nuclear weapons. 

In the West, we are accustomed to the strategy of destroying everything that is dangerous. We spray to kill mosquitoes carrying Zika, we kill wolves if they dare to attack humans, ISIS must be eradicated, and so on. This logic does not work with North Korea. North Korea has managed to corral itself in a way that requires us to cohabitate with the uncertainty and danger that constitutes the regime. This position is the best North Korea can hope for, and the pursuit of biological weapons aids them in defending it vigorously. 

Continue Reading →

Thursday, December 21, 2017

Samuel A. Chambers — The Washington Post “fact checks” Sanders on Wealth Inequality: This is What Ideology Looks Like

Samuel A. Chambers

Samuel A. Chambers is a Professor at Johns Hopkins University. He co-edits the journal Contemporary Political Theory and is series co-editor of Routledge's Innovators in Political Theory. His current research project has the current working title "How to Be a Capitalist."

In a speech given at Westminster College on September 21, 2017, US Senator Bernie Sanders (I-VT) made the following claim: “There is no moral or economic justification for the six wealthiest people in the world having as much wealth as the bottom half of the world’s population, 3.7 billion people.” 

On October 2nd, 2017, The Washington Post’s Nicole Lewis published a fact check of Sanders’ claim, coming to the following conclusion: “Sanders’s statistic, while provocative, is basically meaningless. He earns Three Pinocchios.” To clarify, for the Post “Three Pinochios” entails a “significant factual error and/or obvious contradictions. This gets into the realm of ‘mostly false’” (emphasis added).[1]

What does it mean to conclude—in an “Analysis” piece, not opinion, as the Post emphasizes—in one of the foremost national American newspapers that Sanders’ claim is “basically meaningless” and “mostly false.” And what’s going on when the Post takes the time to make this assertion?

Unlike many tortured statistical claims, the basic facts underlying Sanders’ statement are relatively straightforward. First, according to the Forbes list of billionaires, the top six men in the world have a combined net worth of $462.6 billion. Second, according to the 2016 Credit Suisse Global Wealth Report, the bottom 50% of people in the world hold a combined net worth of $409 billion.[2]

So where does the meaninglessness and the falseness come from? Mainly from the Post’s apparent inability to accept the basic definition of wealth as net worth. Lewis writes: “The Credit Suisse report measures wealth as net worth, or assets minus debts. This means people with burdensome debt and a high income but few assets wind up ranking lower on the global wealth scale than someone with no debt, low income and no assets.” But this is not some idiosyncrasy of Credit Suisse: “net worth = assets – debts” is basically the way all accountants and economists would calculate wealth. Indeed, there is no other viable metric out there, so if you are going to talk about wealth, much less wealth inequality, the measure you have to work with is net worth. But Lewis is convinced that net worth is really skewing things, as she emphasizes in probably the most important line in this analysis: basing wealth on net worth “means a recent medical school graduate in the United States with high earning potential and loads of debt would wind up on the lower end of the scale than someone in India living on $2 a day.” The first thing to say is that of course that is true, for tautological reasons: a person with negative net worth has less net worth than a person with a small positive net worth. 

But Lewis is also, intentionally or not, conflating Sanders claim with a different assertion about the problems of global inequality. In 2015 Oxfam published a report (based on earlier Credit Suisse data) that made claims and even certain problematic projections (based on simplistic extrapolations) about increasing global wealth inequality. Some legitimate economic authorities responded to this report to point out that comparing aggregate wealth levels across countries proves to be tricky business, since it overlooks the fact that the middle class in some countries (e.g. China) are actually doing much better over time than the middle class in others (e.g. Europe and North American).

But anyone who has ever heard Bernie Sanders give a speech knows perfectly well that his major concern and his target audience is the USA. Improvements of the standard of living among wealthier Chinese citizens is not his focus: he is interested in those Americans who are less well off than they were 25 or 50 years ago – and that could be the bottom 25%, the bottom 50%, or arguably even the bottom 90%. To clarify matters, we can reconstruct Sanders’ statement strictly and narrowly within the terms of the USA. What do we find? That the top 10 American billionaires have a total net worth 58% greater than the bottom 40% of Americans combined.[3] Sure, this new American-only stat has extended the number of rich people from six to ten, and it has decreased the number of poor people from 50% (of the global population) to 40% (of the USA), but wouldn’t Sanders’ fundamental political claim still hold, perhaps even more so: there is no moral or economic justification for this distribution of wealth. 

Perhaps none of this would satisfy Lewis who comes at the claim about inequality from other directions as well—though, it must be said, not ones that have much to do with the basic factual claims. Lewis (here again, following other attempts to undermine the implications that some have drawn from the Credit Suisse data) still cannot seem to get over the fact that to measure wealth as net worth means to include a lot of people with negative net worth. As the quote above makes clear, Lewis means to suggest to her reader that Sanders’ claim relies on portraying young doctors as poor. But that raises a question that Lewis fails to even consider: what percentage of those Americans with negative equity actually become future rich professionals? I have yet to locate definitive data that answers this question, but the data we do have on debt in America seems to indicate that most Americans with negative net worth are poor Americans who are most likely to remain poor Americans. It is true, of course, that many wealthy Americans also hold debt (especially mortgage debt), but this is a red herring since those people are not a part of the group with negative net worth. Lewis repeatedly appeals to her reader (usually subtly and implicitly, but nonetheless) to believe that Sanders is factually wrong in his claims about wealth inequality for the reason that so many Americans have negative net worth. Hence she writes: “When the lowest 10 percent of the wealth spectrum, which holds -.43 percent of the global wealth, is removed, the remaining 40 percent of the bottom 50 percent own $1.51 trillion.” Two responses: first, eliminating all the people with negative net worth still means that the wealth held by those in the 10% to 50% range (more than 100 million people) is still only twice that held by the ten richest Americans; second, what, exactly, does it mean to “remove” the poorest 10%? I see why Lewis wants to set them aside to make the numbers look better—although from this perspective she should just have found a way to “remove” the top 1%, which would have solved almost all the inequality problems in one fell swoop—but what is to be done with the millions of Americans we have just “excluded.” I suppose Lewis wishes that they will all turn out to be doctors. 

And that may well be her only hope, because her remaining arguments are misguided and incoherent. Her last gasp is to tell her readers something that was already obvious: Bill “Gates’s wealth is prone to major fluctuations. Sudden changes in the stock market…will affect his bottom line.” Lewis points this out to her readers in order to draw a sharp distinction between, on the one hand, Gates’s financial assets and, on the other, the “nonfinancial assets” held by others, particularly in so-called developing countries. But from the fact that the Credit Suisse report categorizes some assets as “financial” and some others as “nonfinancial,” Lewis draws this conclusion: “the comparisons are mismatched. Gates’s wealth is held in a complex financial system, but his wealth is being compared with nonfinancial wealth, the value of which does not fluctuate (or soar) with the same ease.” 

This statement betrays a fundamental misunderstanding of the nature of capitalism. Real estate and land are no less a part of a “complex financial system” than any stock or bond, or even CDO or CDS. To think that somehow real estate is more “stable” in value than stocks is preposterous in general, but it is especially so for any person who lived through the great housing collapse of 2008. Tell the person who owned a home in Las Vegas in 2007 that nonfinancial assets are not subject to major fluctuations: house prices dropped 63% overall, and for certain condo owners the drop was even steeper. In comparison, the S&P 500 lost 50% of its total value in roughly the same crisis period.[4]

So what is at stake in all of this? By which I mean both, why does the Post “fact check” a relatively straightforward claim about global wealth distribution, and why have I spent the time and energy to fact check the fact checker? One relatively simple answer is that the Post is shilling for its owner, Jeff Bezos—net worth $72.8 billion, good for number 3 on the Forbes list. In an earlier fact check of a Sanders’ claim about inequality, the Post’s Glenn Kessler made the point almost transparently. Sanders had said that from 2013 to 2015 the 15 richest Americans had gained more in total wealth, $170 billion, than the bottom 100 million Americans. Kessler’s response: 1) sure, but sometimes the wealth of the rich goes down too; 2) “about a third of the billionaires became recently rich because of the computer and Internet boom”; 3) “Some of this wealth is quite recent”; 4) Sanders has a net worth of $330,000, so he’s richer than most everyone else too, 5) once again, everyone in the bottom 10% has negative net worth, so they “drag everyone else down.” I briefly rehearse Kessler’s arguments because this fact check concludes by stating as unassailable fact almost exactly what the later analysis will question. Kessler writes: “We agree the wealth of the 15 richest Americans is certainly staggering. Another way to look at it is they have as much net worth as the bottom half of the American population.” Indeed, that is another way of looking at it; it is just the way Sanders looked at it in his September 2017 speech, the one that earned him three pinochios from Lewis. All of which brings me to Kessler’s telling conclusion: “We will leave it to readers to decide if this means the economy is ‘rigged’—or if innovative entrepreneurs simply have the ability today to earn vast sums of money. While Sanders says he wants to make the wealthy pay their fair share, it is worth noting that five members of this group — Gates, Buffett, Ellison, Bloomberg and Zuckerberg — have signed a pledge saying they will give up most of their wealth for philanthropic causes.” It couldn’t be plainer: innovative entrepreneurs earn their money and they plan to give it a way anyway, so don’t worry about it.

But I’m actually less interested in the extent to which the Post is running interference for the third wealthiest man in the world. There is something greater at stake here, something clearly betrayed in the critics’ continued weak attacks on, and deep frustrations with, the idea of net worth. In these retorts here are two elements of net worth as the Freudian symptom in play. First, a large number of those who populate the bottom 10% that Lewis would have us find a way to “exclude” are a newly indebted class. In fact, to give the point some color we can say that today the worst off are not those who have nothing, but those who have less than nothing. Somewhere between 9% to 12% of Americans have negative net worth, and while this is may in fact be temporary for a small number of them, that is surely a tiny minority of the total. For many Americans, negative net worth and a life of debt is the new ordinary. Payday loans, Western Union, and 30% interest Credit Cards are not making record profits from medical students; they are making those profits on the backs of the poor – and today’s poor is the indebted poor.

Second, in calculating and comparing net worth we put ourselves on a slippery slope, because by looking hard at actual net worth numbers we may come to address the elephant in the room. This elephant has already been located, well lit, and dressed for the party, since Thomas Piketty’s publication of Capital in the Twenty-First Century. What is going on in pieces like those by Kessler and Lewis is a concerted effort to refuse to talk about capital. Piketty’s vast collection of historical data shows bluntly what Marx’s analysis of the fundamental logic of capital had revealed almost 150 years before: that capital is a force, and as that force grows and grows it begins to attain an inertial momentum that is almost unstoppable. In this context, let me close with my own stat, one that I hope speaks even more directly to the narrative of self-authored earnings that the Post hopes to bolster. Many of the critiques of claims about wealth inequality are designed to turn our attention away from wealth (which is just so hard to measure and compare) and back to income, a metric that resonates with the narrative about innovative earners making individual decisions. And of course, because they are measuring an annual flow and not a total stock, income numbers are simply much smaller in scale both absolutely and in comparative terms. According to the latest data from the Federal Reserve Survey of Consumer Finances, the median family/household income in the United States in 2016 was $52,700. And the median incomes for the bottom four quintiles of income distribution are as follows: $16,200, $33,100, $54,100, $86,100. After that, the top two deciles move up more steeply: 80–90% is $135,300, and 90–100% is $251,500. Yet, overall, the distances don’t seem that dramatic. 

The same cannot be said for wealth, where the median net worth is $97,300, but the top two decile means look like this: $800,500 and $4,526,600. In other words, while the top decile median income is only five times larger than the overall median income, the top decile mean net worth is 47 times greater than median wealth. Of course, critics of claims about wealth distribution and wealth inequality might just repeat their arguments: net worth and income are two totally different measures, and are simply not comparable. And this ostensible response brings us to the crux of my argument; it helps to underscore the importance of a particular understanding of capital as a dynamic force. The key is this: net worth is not just a spreadsheet accounting of total assets, it is also a potential generator of income. We can, in fact, compare income and capital and we can do so precisely because it is in the very nature of capital to generate an income. It should go without saying that from a specific moment in the present to any moment in the future we cannot predict with any certainty what that income will be; indeed, it is also precisely in the nature of capital that it can fail to earn any income at all, that it can decline in value, that it might even disappear entirely. Be that as it may, we can look to the past within advanced capitalist societies and see quite clearly what sort of income capital generates on average, over both the medium and long term. For example, from 1928 through 2014, the S&P 500 index returned an average of 10% net, or a “real return” of 7% if adjusted for average inflation over the same time period. If we take that 7% and apply it to the top decile median net worth, we see not only that people in that decile have massively more wealth than the median American, but also that their average net worth will generate an annual income of $316,862. 

This brings me to my preferred statistic: the average wealth of the top decile will produce in income annually a sum more than six times the median income. Here’s another: the wealth of the top 1% will generate an annual income 45,000 times greater than the median income of the bottom quintile. None of these numbers call on the powers of compounding interest (a power only available to net worth, not to income), as they are simply one-off calculations based upon the modest assumption of 7% average return. But most high net-worth individuals (i.e. wealthy people) reinvest a large portion of the income that their capital generates, which means that their capital grows and therefore generates an even greater income. Here, then, is just a slightly expanded example. The mean net worth of the top 1% is $10,350,300, which would produce (at 7% return) an annual income in year 1 of $724,521. In year 2, just the income from year 1 could itself be used as capital to produce a year 2 income of $50,716.[5] That is roughly equivalent to the median income of all Americans, and it is produced not from the income on wealth, but from just the income on the income from wealth. 

Net worth matters because wealth matters. And wealth matters because capital matters. It should go without saying that capital matters because the system is called capitalism. It’s not a “free market” system or an “exchange” system or a “competitive” system; it’s a capitalist system, in which the primary driving force, the force that structures, constrains and ultimately (re)organizes the system itself is the force by which capital grows, by which capital begets more capital. This is what the Post does not want anyone talking about. 


[1] For comparison sake, here are two statements from President Trump (then Candidate Trump) that earned the exact same three-Pinochios rating: 1) “The Department of Justice, the State Department and the FBI colluded, got together, to make Hillary Clinton look less guilty” and 2) “I’ve won most of the lawsuits against Trump University.” The former statement is blatantly false based simply on the definition of collusion; as to the latter, at the time of this statement, none of the three cases against Trump University had even been decided, so Trump had won exactly zero of them. 

[2] Indeed, if Sanders had wanted to round the numbers off and make the stat pop just a bit more, he could easily have claimed that the five wealthiest people held as much wealth as the bottom half, since #6 on the Forbes list is worth $68 billion, so the total for the top five would be just a titch under the total for the bottom 50%. 

[3] My “top 10” combines the Koch brothers (tied for #8 on Forbes list) into one entry, and aggregates the three Waltons (15–17) into one as well; this gives a total of $672 billion. The bottom 40% of Americans own 0.5% of America’s total net worth of $76 trillion, or a total of $425 billion. All data here are from the 2016 Credit Suisse Global Wealth Report and from the 2017 Forbes billionaires list. 

[4] Lewis also suggests that the Credit Suisse data is invalid because “Credit Suisse converts all the currencies to U.S. dollars, based on the value of the dollar at the time in question.” But this claim is simply false, as even a cursory reading of the report makes it clear that Credit Suisse sometimes gives data at current exchange rates and sometimes in constant exchange rates, and frequently remarks in detail on when and why the two diverge (Credit Suisse 2016: 15). 

[5] None of this is not to mention that the income generated from wealth is taxed at significantly lower rates than the income from wages, so in net terms the second year income from the income of the mean 1%’s net worth would actually be greater than the net from the median income American. And none of this is to mention the fact the crucial importance of the “Wealth Defense Industry” by which those who hold capital can use the power of the state to protect that capital and its growth (Winters 2017).
Continue Reading →

Monday, October 23, 2017

Bonnie Honig — (Un)Reality TV: Trump, Kelly, and the Revolving Door of Whiteness

Bonnie Honig
Brown University 

With a Reality TV president in office, it should be no surprise to watch, once again, as the revolving door between reality and TV swings round, and we are left unclear which side of it we are on. And yet I am stunned at the usefulness, not for the first time, of the show VEEP, in helping us understand Trump in Washington.
Selina, for those who do not know the show, is an empty, ambitious woman who will do or say anything to get what she wants and is indifferent to, and indeed totally unaware of the impact of her actions on those around her. In Season 6, episode 8 of VEEP, Selina’s devoted assistant, Gary, after 5 ½ seasons of degradation and dependence, gets Selina to go to his hometown, meet his parents, and attend a party he wants to throw. Jessica Goldstein summarizes what happens next. Before the party, "Gary confides in Selina that he has this childhood story, a loving one he has tenderly held all his life...The party has gone in decidedly not Gary’s planned direction ... [and then Selina, who is trying to impress one of the guests with her folksiness] gets up to give a toast … and she steals Gary’s story. It’s a wonder to behold. She does tell it better than he does, fake folksy lines and all,” and she ends with an authentic-sounding line: “’He just wanted to make his little girl as happy as a hound dog with a horse’s Johnson.’ Gary’s face as he sees that Selina is really going to take every last thing about this milestone away from him is wrenching. He is gutted. The betrayal leaves him speechless, and, as usual, Selina is cavalier about the pain her actions have caused." 

Sound familiar? It should. This, I imagine, is the scene in the Oval Office earlier this week, when General Kelly shared privately his story of his son's death with the President, using language that military men who have earned it use for such things. 'He knew what he signed up for.' 'He understood the mission.' Or, perhaps, as he put it, later after the scandal began to unravel: He “was doing exactly what he wanted to do when he was killed…He knew what he was getting into … He knew what the possibilities were because we were at war.”
I imagine this was all part of Kelly's effort to persuade Trump NOT to call the survivors of those who died in Niger and elsewhere. ‘Sir, there’s nothing you can do to lighten the burden on these families,’” he says he told Trump. I imagine he was suggesting, on the surface, that there is no lightening the burden for the bereaved that anyone can offer, but he was also saying, beneath that, the real truth, which is that there is no comfort this president can offer, given who he is, how he talks, and so on. 
As part of this conversation about whether or not to call the bereaved, Kelly also mentioned that he, himself, never got a call from Obama. He said this in the context of a conversation in which his aim was, again, to prevent Trump from getting on the phone, likely knowing that it could not go well. But Kelly misstepped. Undoubtedly thinking that by taking Obama out of the calculus, he frees Trump to not call, Kelly failed to anticipate the infantile one-upmanship that inevitably kicked in. ‘Wait: Obama didn't call?’ I can just see the VEEP-like digestion of this information, the presidential brain processing it clunkily to conclude: 'Then I WILL! I will be better than him! How hard can it be? And think of the press coverage!'
Shortly after, asked in a press conference about why he has not spoken about the 4 dead in Niger, Trump, channeling VEEP’s Selina, tells part of the story that Kelly has told him: Obama didn’t call everyone, but he, Trump, does, or will.
  Then later, in a phone call with the family of La David Johnson, one of the four American men who died in Niger, Trump uses the words and phrases Kelly used with him. They are manly phrases: 'he knew what he signed up for!' When Kelly said those words, Trump admired them. He was admiring the man who said them. He thought that if he stole the words, he could steal also the character, history, and experience he admires in Kelly. He could do it cavalierly. Why not? 
But Trump is no Selina. He couldn't pull it off. And Kelly is left in the role of Gary, whose face, "as he sees that Selina is really going to take every last thing about this milestone away from him, is wrenching." Unlike Gary, however, Kelly is not left speechless. Kelly says things, and now he makes it worse. Because the things he is used to saying in his circles are not now the things to say in the circle into which he is made to step by all of this. The congresswoman is not a political congresswoman, she herself is kin; she is not listening in on a phone call, she is part of the family circle to whom the phone call is made. She is saying things that are true: Trump’s words did not convey to the bereaved the care and comfort he proclaimed as his but rather the callous disregard he has for everything. The words that Trump said were offensive because they are words for men and women in the armed forces to say to each other. They are not the words that a draft-evading, cavalier, military wannabe and serial user of people can say with credibility and they are not the words anyone says to grieving non-military family members, either. They were words said to Kelly by his military friends and colleagues. I doubt very much they were the words he said to his wife Karen when, as he says, he went upstairs to break her heart. And so when Trump stole them for himself, to say them to the wrong people, at the wrong time, in the wrong way, they felt foul. They rang false, and hollow. Of course they did. 
That is not the end of the story. So far it is all just tawdry, VEEP-level tawdry. The real irony is in what happens next, as Kelly begins to sound more and more like Trump. The revolving door turns once more and suddenly Kelly, who has never spoken publicly about these things, is speaking in public, about his loss and about who gets to speak about loss: only people with a direct experience of or relationship to life and death in the military.
But wait, that criterion leaves out the current President and includes the Congresswoman the administration is currently out to discredit. That is Congresswoman Frederica S. Wilson (D-Fla.), who shared with the press how Trump’s bereavement call aggravated rather than alleviated the Johnson family’s suffering. She is in the Gold Star circle by virtue of her years-long involvement with the Johnson family and others.
  What to do? Kelly unspeakably steps into the racist waters of the White House, referring to Wilson, who is black, as an “empty barrel” that sounds loudest as a drum, meaning she was, as he also said: “grandstanding.” It is false, as so many of Trump’s Fox-news type claims are. This time there really is a tape, and it vindicates the Congresswoman. Remember when Trump called Comey a “showboat?” Who’s speaking whose words now? But Kelly is not stealing from Trump as Trump stole from him. No, the General on stage is now, himself, an emptied barrel, speaking the empty words of an empty man whose Midas touch turns everything not to gold, as he clearly wishes to persuade us, but to Whiteness. And this is a step even Selina’s Veep has not taken. That is how we know VEEP is fiction. And how the calumnious verities of Fox News are made real.

*This Article First Appeared at Politics Letters Live
Continue Reading →