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Stupid, American Style

The price of gasoline is pretty high in the United States right now. Not in international comparison, where it's still ludicrously cheap, but in comparison to what Americans -- who've let a completely car-dependent culture arise around them despite repeated oil shocks -- think they should be paying.

This fact, unfortunately, could have world-historical importance. American voters, ignorant and fickle creatures that they are, might well vote for any Republican to punish Obama for 'not doing enough' about U.S. gasoline prices, which of course are largely beyond his control. As Dave Weigel puts it:

Speaker of the House John Boehner made a prediction Monday about Barack Obama's re-election bid. "If gas prices are $5 or $6, he certainly isn't going to win." It might be the least disputable thing a politician has ever said. Well, yes: If people have to keep paying more and more to fill their cars up, the president could lose re-election—even to one of the current batch of Republicans. There's evidence, circumstantial but graphically compelling, that the president's current poll numbers are a function of the price of gas.

Now, most mainstream American journalists, like most Americans, have grown up in a political culture where the smarts of the 'common man' are universally assumed. The 22nd-tiredest political cliche in the United States is 'my opponent is underestimating the intelligence of the American people, who will see right through his craven pandering/blatant scare-mongering...' So Weigel calmly assesses the chance that gasoline prices alone will drive the next American election without ever once stopping to say to himself, or his readers: "Many of my countrymen are such fools that they will change control of the White House to a party with a different foreign policy and different spending priorities and different social values based solely on the price of one consumer good whose price the President cannot even control. God, how depressing. I should drop whatever I'm doing right now and dedicate my life to trying to improve the political judgment of my fellow Americans."

But that's clearly not the mission the American press corps has given itself. Here's a remarkable press statement from Obama yesterday (h/t Ed Philp) , in which he expains his decision to release his own birth certificate to defuse the moronic, years-long non-controversy over whether he was born in the United States:

Even Obama, who never flies off the handle, can't resist several digs at the press corps for giving 'birthers', as the morons are known, two long, pointless, wasted years of attention.

The truth is that the American journalistic lanscape -- especially when it comes to TV, the only source of news for most Americans -- is dominated by carnival barkers. Most of the news providers are for-profit companies, competing against one another for ratings. They will broadcast whatever attracts eyeballs, not whatever edifies -- yes, edifies* -- viewers. And that means stories that feature exciting controversies about emotionally-laden themes. As a result, the political judgment of those lost souls who get their news from TV becomes ever more adolescent. They're trained to focus on meaningless personality traits, ginned-up pseudo-conflicts, or vacuous horse-race bullshitting about who's got the better 'ground game'. Whatever ability they may have had to carefully balance competing policy priorities shrivels up and blows away.

And so, for the past few years, there have been thousands of U.S. television hours spent on the question of whether Obama was born in the U.S., usually in the form of idiots pontificating about the issue in ignorance, or 'debates' in which people yell at each other. These hours could have been devoted to America's two, ongoing, pointless, expensive wars, or strategies for containing health care costs, or analyses of the Arab uprisings, or even a good old-fashioned doughty, earnest documentary about water rights. But all those things would have cost a lot more money than inviting a couple of blowhards into the television studio and/or would have required finding people who actually knew what they were talking about. So they weren't done. Instead, the completely irrelevant non-controversy of Obama's 'real' place of birth was kept alive.

Since the press wouldn't police itself, Obama finally had to take action, and his frustration is visible. But even if this pointless distractions is largely put to rest, another one will surely follow, and the press corps will surely give it attention as long as it boosts ratings. As James Fallows said, "This is not a great day for the press."

* Sure, edify has all sorts of tea-cozy, church-basement-lecture overtones of stuffy didactic earnestness, but we elitists need to proudly reclaim it. I'm so old that I remember when there were some American intellectuals and officials who, quaintly enough, actually thought television might actually one day help improve people's judgment, and were disgusted at what it was doing instead:

But when television is bad, nothing is worse. I invite each of you to sit down in front of your own television set when your station goes on the air and stay there, for a day, without a book, without a magazine, without a newspaper, without a profit and loss sheet or a rating book to distract you. Keep your eyes glued to that set until the station signs off. I can assure you that what you will observe is a vast wasteland.

You will see a procession of game shows, formula comedies about totally unbelievable families, blood and thunder, mayhem, violence, sadism, murder, western bad men, western good men, private eyes, gangsters, more violence, and cartoons. And endlessly commercials — many screaming, cajoling, and offending. And most of all, boredom. True, you'll see a few things you will enjoy. But they will be very, very few. And if you think I exaggerate, I only ask you to try it.

That was back in 1961.


Is the EU Self-Immolating?

Ireland_unemployment_rate_June_2010
Some Crooked Timber bloggers think so:

The measures that the eurozone states have recently decided to adopt will be even harsher, if they make the mistake of following Germany’s example. Germany’s debt brake, which at first Berlin implicitly proposed as a model for other European countries, turns austerity into a constitutional obligation. In theory, it provides some flexibility during hard economic times, but in practice it makes deficit spending as difficult as possible: only the vote of a supermajority of German legislators can relax it. And it rules out debt-financed investment, such as in infrastructure, even though that can spur long-term growth.

As they begin to adopt Germany’s model, or something along those lines, the other eurozone states will find it nearly impossible to use fiscal stimulus in times of crisis. And with monetary policy already in the hands of the dogmatically anti-inflationary European Central Bank, their only means of adjusting to crises will be to stand by as wages fall and unemployment soars. Ireland—with its collapsed tax revenues, massive cuts in government spending, shrinking wages, and skyrocketing unemployment—is the unhappy exemplar of rigid austerity measures in the new Europe.

This approach cannot be sustained for long. The EU has never had much popular legitimacy: many voters have gone along with it so far only out of the belief that their politicians knew best. Today, they are more suspicious. And if they come to think that further European integration is causing more economic hardship, their suspicion could harden into bitterness and perhaps even xenophobia. Ireland’s new finance minister, Michael Noonan, has told voters that the EU is a game rigged in Germany’s favor; editorials in major Irish newspapers warn of Germany’s return to racist imperialism. As economic shocks hit other EU countries, politicians in those states will also look for someone to blame.

...

Resorting to hard Keynesianism to deal with the euro crisis would require making far-reaching changes to the rules and practices of the EU’s economic and monetary union. It would mean both toughening the requirements of the Stability and Growth Pact, which governs the euro, and strengthening the enforcement of these rules. As they stand, the Stability and Growth Pact’s bylaws require the eurozone states to maintain budget deficits under three percent of GDP and debt-to-GDP ratios under 60 percent. The system does not provide enough flexibility during downturns: even German politicians ignored these requirements a few years ago, when Germany was suffering from a recession—much as they prefer not to remember this today.

To be more effective, the system needs to be stricter. The Stability and Growth Pact should be strengthened so that it requires countries to put aside surpluses during auspicious years. Since governments are persistently tempted to squander surpluses, a new supervisory institution should be introduced at the EU level. It should be granted access to detailed budget-planning and other economic information from the eurozone states and should be empowered to sanction misbehaving states....

Such an active use of fiscal policy requires the coordination of fiscal and monetary policies. This, in turn, means that the European Central Bank can no longer be totally independent, as it has been since the implementation of the euro. As it stands, the European Central Bank is possessive about its powers. For example, it has resisted oversight by the European Parliament even though it has begun to take on an increasingly important political role through its support for the European banking system. It has assiduously avoided mingling monetary policy and fiscal policy, focusing instead on targeting inflation. But it nonetheless failed to prevent asset price booms, and these could only have been prevented with much more direct institutional control over unsound financial innovations. As the interaction between governments and central banks is unavoidable and the role of the European Central Bank is increasingly political, it would be better to properly define the relations of authority among these bodies. The European Central Bank must be more willing to adjust its policies so that they do not undercut those of elected national governments. Even if this were not necessary economically, it would be necessary politically. Handing the power to destroy national economies to unelected technocrats is simply not politically sustainable.


What High European Taxes Buy

Following up on my post from a few days ago, here's a section of a much longer David Cay Johnston called "Nine Things the Rich Don't Want You to Know About Taxes." Here, Johnston compares American and German tax policies:

We measure our economic progress, and our elected leaders debate tax policy, in terms of a crude measure known as gross domestic product. The way the official statistics are put together, each dollar spent buying solar energy equipment counts the same as each dollar spent investigating murders.

We do not give any measure of value to time spent rearing children or growing our own vegetables or to time off for leisure and community service. 

And we do not measure the economic damage done by shocks, such as losing a job, which means not only loss of income and depletion of savings, but loss of health insurance, which a Harvard Medical School study found results in 45,000 unnecessary deaths each year.

Compare this to Germany, one of many countries with a smarter tax system and smarter spending policies.

Germans work less, make more per hour and get much better parental leave than Americans, many of whom get no fringe benefits such as health care, pensions or even a retirement savings plan. By many measures the vast majority live better in Germany than in America.

To achieve this, unmarried Germans on average pay 52 percent of their income in taxes. Americans average 30 percent, according to the Organization for Economic Cooperation and Development. 

At first blush the German tax burden seems horrendous. But in Germany (as well as in Britain, France, Scandinavia, Canada, Australia and Japan), tax-supported institutions provide many of the things Americans pay for with after-tax dollars. Buying wholesale rather than retail saves money. 

A proper comparison would take the 30 percent average tax on American workers and add their out-of-pocket spending on health care, college tuition and fees for services, and compare that with taxes that the average German pays. Add it all up and the combination of tax and personal spending is roughly equal in both countries, but with a large risk of catastrophic loss in America, and a tiny risk in Germany. 

Americans take on $85 billion of debt each year for higher education, while college is financed by taxes in Germany and tuition is cheap to free in other modern countries. While soaring medical costs are a key reason that since 1980 bankruptcy in America has increased 15 times faster than population growth, no one in Germany or the rest of the modern world goes broke because of accident or illness. And child poverty in America is the highest among modern countries—almost twice the rate in Germany, which is close to the average of modern countries.

On the corporate tax side, the Germans encourage reinvestment at home and the outsourcing of low-value work, like auto assembly, and German rules tightly control accounting so that profits earned at home cannot be made to appear as profits earned in tax havens. 

Adopting the German system is not the answer for America. But crafting a tax system that benefits the vast majority, reduces risks, provides universal health care and focuses on diplomacy rather than militarism abroad (and at home) would be a lot smarter than what we have now.


From the Annals of German Labor Law

Yes, but I'm not.

The Frankfurter Allgemeine brings us this delightful story (g): Call center employee, let's call him Christian, ended every conversation with a customer by saying "Jesus loves you! Thanks for your purchase." Employer: 'Where do you think you are, Alabama?' Not amused, fires employee.

Christian files lawsuit seeking reinstatement, citing his right to religious freedom. The Bochum labor court agrees. This will not surprise anyone who knows German labor courts, or Bochum. Employer appeals to the State Labor Court in Hamm, which decides that no, Christian's right to religious freedom doesn't include a right to tell strangers that Jesus loves them. An employee's religious freedom only outweighs an employer's right to control the employee's performance when job duties would cause 'conflicts of conscience', and Christian hasn't shown that refraining from telling customers that Jesus loves them would do so.

Interesting side note: A Muslim employee does have the right to refuse to handle alcohol on the job (g).


The Crumbling Plutocracy

Whenever people ask me why I've chosen to live in Europe, I say that America's just become too damn depressing. What I'm talking about are things like this New York Times article, which helpfully informs us that the American higher-education system, which charges tuition fees that put students in a kind of debt bondage -- is demanding ever more tribute from its victims students:

Two-thirds of bachelor’s degree recipients graduated with debt in 2008, compared with less than half in 1993. Last year, graduates who took out loans left college with an average of $24,000 in debt. Default rates are rising, especially among those who attended for-profit colleges.

The mountain of debt is likely to grow more quickly with the coming round of budget-slashing. Pell grants for low-income students are expected to be cut and tuition at public universities will probably increase as states with pinched budgets cut back on the money they give to colleges.

Some education policy experts say the mounting debt has broad implications for the current generation of students.

“If you have a lot of people finishing or leaving school with a lot of debt, their choices may be very different than the generation before them,” said Lauren Asher, president of the Institute for Student Access and Success. “Things like buying a home, starting a family, starting a business, saving for their own kids’ education may not be options for people who are paying off a lot of student debt.”

It's just another data point in the gradual destruction of the American middle class. You could also add the homeless shelter, already full, sending homeless families into the woods to live in tents , or the bankruptcy of one of America's greatest orchestras, or the political resentment caused by rising gas prices in an overwhelmingly car-dependent culture.

All these signs show America abandoning a principle that it used to share with Western Europe: In a decent society, someone of average talents with an average job should be able to afford the basic incidents of civilized life, such as a reasonably comfortable retirement, job security, regular vacations, childcare, entertainment, healthcare, and the ability to finance as much education as they or their children qualify for. This is the essence of social democracy -- it's not, as some people think, a giant charity for the poor, but a giant redistribution system for the middle class. In these societies, making a middle-class lifestyle affordable is partly done by naked redistribution, but is also accomplished indirectly by creating complex public-private hybrids like a heavily-regulated insurance industry and various tax subsidies. At least in Northern Europe, it still works reasonably well. That is, in Europe, much government activity is aimed at ensuring that ordinary people -- not the gifted, the beautiful, or the driven -- can go to a nice park on Sunday, take several vacations a year, get basic medical care, send their children to college, afford a newspaper subscription and opera tickets and the occasional nice restaurant meal, etc.

In the U.S., by contrast, the amount you need to earn to secure the ordinary incidents of middle-class life continues to rise, and far outstrips what most (formerly) middle-class people earn, as this report (pdf) documents. The middle class is like the proverbial frog in boiling water, passively observing as more and things their parents took for granted gradually slip out of reach. In short, the people who live where most Americans live -- not on the coasts, but in states like Texas or Arizona or Florida -- and the politicians who lead them -- have given up on the idea of trying to improve the way their communities work as societies. Of course, there are always exceptions. There are Arizonans and Texans who are doing old-fashioned social work (among them the Catholic Church, one reason the church has a reputation as -- mirabile dictu -- left wing in many parts of the USA). But changing a culture is a question of critical mass. There will never be a uniform belief that the welfare of all is the concern of all, but there has to be at least a broad consensus.

In places like Arizona, that's not even remotely the case. If you're an relatively privileged Arizonan, you don't try to solve social problems, or expect any government to do so. Suburban McMansions and massive vehicles waste incredible amounts of energy, yet merely suggesting that it might be wise to seek alternatives to a single person driving a three-ton automobile 500 yards to buy a gallon of milk will earn you a tirade about an American's God-given right to spend their hard-earned money however the hell they damn well please. Like this one.

The huge cars are all part of the contemporary American dream, which involves insulating yourself from social problems, rather than solving them. You live in the suburbs, possibly in a gated community, you buy a security system for your home (and maybe a gun), you send your kids to private school, you buy that tank-like car, you start saving for your children's college the moment they're born, you do whatever you can to keep your health insurance, you save for your own retirement, etc. If your children have problems, the last thing you will do is turn to the state. Its social services -- like its mass transit and its public-defender offices and its charity hospitals -- are under-funded and populated exclusively by people who can't afford anything better. You'll need to resolve family emergencies privately, and that means money for lawyers, tutors, shrinks, and private clinics, to make sure your childrens' futures aren't ruined by a criminal record.

All this private-market insulation against social problems and loss of status costs money, more every year. But if you're one of the few who can afford it, you can live a life in which everything works well for you: you live in a nice house in a safe neighborhood, you can pay all your bills, you'll get good medical care if you're sick, and your children will attend good schools and go to college. You'll soon forget about the people who don't have it as well as you do. Which, after all, is the point of insulation.

But you'll still be in the minority. As the Washington Post recently reported:

More than a year into the recovery, the economy is starting to show signs of improvement. The stock market has rebounded. Corporate profits are soaring. And yet, for millions of Americans, the lingering legacy of the Great Recession is a Great Slide, as job losses, declining home values and decimated retirement savings have knocked them down the socioeconomic ladder. For the formerly middle class, this slide plays out in big and small ways, from a loss of identity to the day-to-day inconveniences of life with less.

Unemployment is still over 8%, and income inequality has been increasing steadily. The latest crisis has just thrown into relief the background process in which working and middle classes have been falling behind for decades. It's brutally exposing just how much little insulation against misfortune remains for anyone below the upper-middle class.

Of course, the fact that the government doesn't meet the needs of ordinary people doesn't mean nobody does. Ever entrepreneurial, many firms make a living by exploiting others' economic hardship. The number one profiteers are, of course, large companies: unemployment increases the reserve army of labor, decreasing pressure on wages and reducing pressure to improve working conditions. Amazing as it sounds, there are still Americans naive enough to show unfeigned surprise that corporate profits are rising in times of high unemployment. But companies are just the beginning. The poorer areas of town are filled with payday loan shops, pawn shops, and other businesses whose business model is based on the old maxim: "It's expensive to be poor." Millions of people also get suckered in by private, for-profit "universities" located in gleaming office buildings by the side of the highway. There, they borrow tens of thousands of dollars a year to get degrees that often turn out to be useless -- or, at least, which don't furnish them with anything like the earning power they'll need to pay off their five-figure students loans. There's money to be made in convincing working-class people to spend beyond their means: the housing boom was caused in no small part by mortgage brokers who conned people of limited means into buying houses they couldn't afford, simply to pocket the fees.

When the other shoe drops -- when the house gets foreclosed on, or the sleep-deprived trucker working overtime jackknifes on the freeway, or the minimally-qualified nurse's assistant gives the wrong medication -- there are others waiting to profit. David J. Stern, a Florida lawyer who "made millions" processing evictions, "enjoyed a lifestyle that featured grand mansions, flashy sports cars and a yacht called Misunderstood. But the days of easy money are over for Mr. Stern, his law firm and ... investors."

Advertisements for plaintiffs' lawyers, in which they promise help to victims of truck or refinery accidents, plaster the freeways. Their websites proclaim them to be the tribunes of the little man -- the official motto of one plaintiff's firm is "Protecting What's Right®." But don't get the idea these protectors of the right are missionaries: they'll take 1/3 of whatever they win for the 'little guy". In return for this, of course, they'll always provide excellent and honest legal representation to their working-class (in American legal parlance, "unsophisticated") clients. Or maybe not -- as evidenced by the burgeoning sub-industry of lawyers who sue other lawyers for malpractice. Note, however, that the lawyer-malpractice lawyer won't take cases unless they involve at least $100,000 in damages.

And God forbid you should get in trouble with the law. America has a two-tier justice system: if you can't afford a private lawyer, you'll be dumped onto public defenders or "contract" attorneys. There, it's a pure lottery: the local public defender or private lawyer may care about their job -- or they may just be interested in processing as many cases as possible to enhance profit margins. Inmates in jails and prisons are fleeced right and left. One common scam, noted by a friend of mine who represents prisoners, is special meals for jail and prison inmates. The prison will outsources food preparation to a private firm. Part of the contract allows the firm to offer special higher-quality meals, which prisoners' relatives -- working-class or poor people -- can order online or by telephone. Of course, the same company providing the expensive-yet-delicious meals at a fat profit is also responsible for the "normal" meals. Which, predictably, are flavorless. Prisons also farm out telephone services to private companies, who charge astronomical fees to their captive customers.

The bottom line: if you're a working-class American, your social landscape is teeming not with efficient, low-cost social services, but with people and businesses picking over your ever-dwindling earnings like vultures huddled around a rotting corpse.

The most depressing part of all of this, perhaps, is that there's no end in sight. Americans have always been more individualistic than most other peoples, but this individualism used to be counterbalanced by an appreciation of solidarity, the role of unions, some sort of sense of collective responsibility for the most vulnerable. But that's all been gradually dismantled. Mainstream American discourse no longer understands the vocabulary it would need to even properly understand these problems. Firebrand, progressive Democratic politicians who actually took the 'little man's' side are long gone, as are the sort of Tory-conservative Rockefeller Republicans who acknowledged the need for strong social institutions -- if need be, the government -- to guarantee a decent standard of living to all. That sort of language doesn't even exist anymore in mainstream American political discourse. Kevin Drum recently summed it up well:

Income inequality has grown dramatically since the mid-'70s—far more in the US than in most advanced countries—and the gap is only partly related to college grads outperforming high-school grads. Rather, the bulk of our growing inequality has been a product of skyrocketing incomes among the richest 1 percent and—even more dramatically—among the top 0.1 percent. It has, in other words, been CEOs and Wall Street traders at the very tippy-top who are hoovering up vast sums of money from everyone, even those who by ordinary standards are pretty well off.

Second, American politicians don't care much about voters with moderate incomes. Princeton political scientist Larry Bartels studied the voting behavior of US senators in the early '90s and discovered that they respond far more to the desires of high-income groups than to anyone else. By itself, that's not a surprise. He also found that Republicans don't respond at all to the desires of voters with modest incomes. Maybe that's not a surprise, either. But this should be: Bartels found that Democratic senators don't respond to the desires of these voters, either. At all.

So it's hardly a surprise that Obama recently announced his ideal campaign contribution for the upcoming 2012 election: $350,000. I'll vote for him anyway, I suppose, if I bother to vote at all. But until something dramatic changes -- and in America, it always can -- I can't get all that excited about who will eventually run the crumbling plutocracy...


A Writer's Greatest Compliment

Strolling through Istanbul is the sort of book you continue reading after you've left Istanbul, because you stumble upon gems like the following, during the book's leisurely description of Dolmabahce Palace (p. 422):

Evliya [Turkish chronicler Evliya Celebi] goes on to tell one of his astonishing stories about his unpredictable friend, Murat IV: "Sultan Murat IV happened once to be reading at Dolmabahce the satirical word Sohami of Nefii Efendi, when the lightning struck the ground near him: being terrified he threw the book into the sea, and then gave orders to Bayram Pasha to strangle the author Nefii Efendi."


Adopt-a-Peasant

Spiegel Online interviews (g) the operator of a satirical German website called www.titel-kaufen.de ('buy-a-title'). Apparently they get plenty of requests from irony-impaired German's who don't realize the site is a joke:

SPIEGEL ONLINE: The most famous doctor in Germany, who obtained his title through years of hard work, and plagiarism, was the jurist and former minister Guttenberg. How is it with his colleagues? Do you get many requests from lawyers?

Bücherl: The number is shockingly high. Many are qualified lawyers who now want to add a 'Dr.' to their names. Especially with lawyers, you have to assume they know what they're doing.

...

SPIEGEL ONLINE: Do you actually try to find out how much money your airy-fairy applicants would be willing to pay for a title?

Bücherl: There's a box where they can enter the price they're willing to pay. It ranges from a couple Euro for a journeyman's certificate to six-figure sums for a title of nobility. We once got an inquiry from a real title-dealer. He wanted to know whether we had access to an actual member of the nobility who would be willing t to adopt someone -- for a six-figure sum.

Ahh, the blessings of winning the metempsychosis lottery! The extra syllables in your name means that people will pay hundreds of thousands of euros to be adopted by you -- an insufferably smug unemployed tenured student of 'German literature' who calls himself a 'man of letters' and lives off rents from inherited real estate! Soon you'll have your very own von Manson family.

But really, you don't have to get adopted by some lazy toff to reap the unearned respect of your social inferiors: you can just adopt a title of nobility as a your artist's name (g) for a small fee, and it's off to the races -- literally.


Karamba, Karacho, Dance Party: Career Perspectives in Early 1970s Switzerland

This gripping Swiss television documentary profiles a one-week course offered 1973 to learn how to be a DJ. It ends with the participants being evaluated by a 'jury' made up, it would seem, of inexpertly revivified corpses. If you pass the 'strict' test,* you're blessed with a highly official-looking  'skill certificate' which will be your golden ticket to the glamorous world of disc jockeying! (h/t LS)

* If my understanding of Swiss-accented German is accurate (never a sure thing), the test has a 'theory' component!