The Nation's Mental Decline

Dean Baker nails yesterday's theme:

One of the key lessons of this economic crisis should be that there is a remarkable lack of capacity for independent thinking in our most important institutions: government (both the executive and legislative branches), business, the media, and academia. It is possible that an important authority figure could force a re-examination of deeply held views of the world, but we all must recognize that there is a huge amount of dogma to overcome.

Mixed Signals

Yes - United manage- ment IS asleep as usual. They think they can over- come "peak oil" and their own ineptitude by charging $15 for checked baggage.

Leaders don't generally pay their way. In fact they cost a lot more than they're worth - generally about 3,400,000 more, by my scientific estimate. People kind of know this, and don't expect much, and try not to think about politics most of the time. Folks I know like Obama because he will bring people together, Whitman style - "and what I assume you shall assume." They don't like him because he will lead them solo out of the wilderness.

The good news this week was a massive reigning-in of leaders - the Guantanamo decision, in which the Supreme Court said in essence that executives can't do whatever they want to prisoners by putting them in off-world limbos like Guantanamo. It was a nice victory for habeas corpus, even if it never should have been necessary. It was also a win for the regular folks - the mass middle class - who either win with law or lose with force.

The New Dark Ages

The signs are everywhere that we continue to move backwards into the political past. One of the most important is the return to private government.

• A good piece on Gazprom in Russia describes the extent to which the country's monopoly gas and oil company controls the state. Putin's handpicked successor as President was Dimitri A. Medvedev, Gazprom's Chairman. Here he is, thumbs up, posing with his favorite rock group, Deep Purple. Deep Purple was my favorite rock group too - for a few months in 1972. Why do moguls and hedge-fund managers like groups who long ago stopped having anything to say? OK, I answered my own question. Back to Gazprom - their taxes constitute 20% of the Russian state's budget, may soon surpass everyone's favorite oil company Exxon Mobil as the world's largest, will start to raise domestic gas prices 25% per year (Medvedev's brilliant idea), and is about to accept the man Putin is replacing as Prime Minister, Viktor Zubkov, as its new chairman. Musical chairs - or neofeudalism.
  
• The US State Department has renewed Blackwater's contract to provide security for US diplomats, the NY Times reported yesterday. Blackwater had been under investigation for starting a Baghdad firefight that killed at least 17 Iraqis last September. Oh well. Rep. Henry Waxman says he can't understand the renewal. He's right to be upset, but wrong not to understand it. "The chief reason for the company’s survival? State Department officials said Friday that they did not believe they had any alternative to Blackwater, which supplies about 800 guards to the department to provide security for diplomats in Baghdad. 'We cannot operate without private security firms in Iraq,' said Patrick F. Kennedy, the under secretary of state for management. 'If the contractors were removed, we would have to leave Iraq.' The US government is neither large nor independent enough to protect itself. A little harmless outsourcing - or neofeudalism.
  
• Finance historian Peter Bernstein starts his column today with this: "In the darkest days of the Depression, Treasury Secretary Andrew W. Mellon, one of the richest men in the United States, opposed any government action to stem the tide of plunging business activity and soaring unemployment. Instead, he urged a policy of supreme indifference. 'Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate,' he said. 'It will purge the rottenness out of the system,' he added, and values 'will be adjusted, and enterprising people will pick up the wrecks from less competent people.'" Vicious, lazy, rich-man pseudo-Darwinism? No - just neofeudalism. Bernstein rejects it, but his piece is so defensive in suggesting it was ok for the Fed to intervene in the credit crisis this year that it's clear that modern government is in his financial circles a beleaguered thing.
• Same goes for Gretchen Morgenson's headline, "Big Rescues Can Work," which summarizes the difficult collaboration among banks, unions, governmental bodies, etc. that refinanced New York City's bad debt in 1976. She notes that President Gerald Ford's attitude really was "New York: Drop Dead" until he went to "an economic summit outside Paris sponsored by President Valéry Giscard d’Estaing of France and Chancellor Helmut Schmidt of West Germany." These leaders told him that if he didn't fix New York he'd have "a global dollar crisis." Ford didn't care about New York, but he did care about the dollar, in part because he cared about himself, and his election campaign.

Politics as usual - or neofeudalism? Ford was the starting point of Pitiful Government as we know it today. I vote for the latter once again.