Class Seismic Shift in 2008 Election?

Ruy Teixeira says so in an interesting interview in 538. I don't buy the title claim for reasons I'll explain later, but there are interesting statistical trends:

• Obama won not because white working class voters shifted towards him, but because the electorate shifted away from white working class voters (towards the college-educated middle class and people of color).
• younger white working class voters ("Millennials," born in 1978 and after) did vote for Obama, as did their entire cohort by a huge margin of 2:1. So "help is on the way," if you care about the dumbness of white people.
• the "country party" of rural America is as hard core conservative as ever.
  

Nothing about Teixeira's kind of analysis, with its "creative class" biases, will change that. These analyses have an alienating feedback effect that I wish demographers could actually take into account.

The Curse of the Countryside

It's Sunday morning, so I'm reading Father Frank, who flays the Republicans in no uncertain terms:

The G.O.P. ran out of steam and ideas well before George W. Bush took office and Tom DeLay ran amok, and it is now more representative of 20th-century South Africa during apartheid than 21st-century America.

It's kind of amazing to see that in print: the Republicans as the American Apartheid Party.

Rich then cites David Letterman's joke about how the 10 G.O.P. presidential candidates at an early debate looked like “guys waiting to tee off at a restricted country club."

The very limited region of GOP gains were immediately apparent, and yet the GOP base in white males remained very solid this year. I criticized Father F last Sunday for understating how Republican white males continue to be overall, regardless of how culturally brain-dead or economically dysfunctional their party becomes.

There were reports this week of an upswelling of anti-Obama racist attacks on black folks, especially but not only in the South. Is it racism or some kind of country politics - or both - that made Southern whites go for McCain 68% - 30%? If you broke males out of the number it would be even higher?

The split between country and city is huge: cities over 500,000 went for Obama 70% - 28%, and cities 50,000-500,000 gave Obama a 59% - 39% advantage. Suburbs were almost evenly split, and everything below 50,000 went 53-45% for McCain.

On the other hand, the "West" is full of rural spaces, and yet "Whites in the West" gave McCain 48% and not the 68% McCain got from their Southern cousins. This may well be because the West has more gigantic coastal cities, huge urban-oriented suburbs, and multipolar racial politics.

This begs the question of why you need all those things to have even minimally centrist politics (Obama vs. the hard-right McCain and Palin). Why can't you have centrist politics with the normal class mixture of the white and still-rural South?

Journalistic anthropology isn't yet giving us answers. The best newspaper piece I've seen focused on the Republicans overdoing it on their Southern strategy and alienating voters elsewhere. But here's the underlying analysis:

Mr. Obama’s race appears to have been the critical deciding factor in pushing ever greater numbers of white Southerners away from the Democrats.

Here in Alabama, where Mr. McCain won 60.4 percent of the vote in his best Southern showing, he had the support of nearly 9 in 10 whites, according to exit polls, a figure comparable to other Southern states. Alabama analysts pointed to the persistence of traditional white Southern attitudes on race as the deciding factor in Mr. McCain’s strong margin. Mr. Obama won in Jefferson County, which includes the city of Birmingham, and in the Black Belt, but he made few inroads elsewhere.

And the idea is driven home by the accompanying visual stereotype of Southern White Man (one Bill Pennington of Vernon, Alabama).


Unfortunately, this assumes the cracker racism that needs to be explained.

The best non-Southern analysis I've read involves my favorite issue - the degradation of public systems and social spaces that force people to stick with personal hierarchies and private solutions. Racism supports the hierarchy that has done more in a perverse and destructive way for white Southern working class security in their own world than has the region's white economic and social leaders. The latter have pursued strategies of underdevelopment decade after decade since the beginning of the South itself - slavery, Jim Crow segregation, and "massive resistance" to integration led appropriately enough by Sen. Harry F. Byrd, a descendant of the Byrd family colonizers of Virginia, who united stone racism with stone opposition to public spending - all which have kept the South backward as an economy and a civil society and a democracy. It is a non-democracy, where that requires the full participation of all social partners. The poet Charles Simic wrote a great piece on this just before the 2004 presidential election, and it is worth reading now.

Contemplating the Unchanged

It's always nice to start Sunday with a sermon from Fr. Frank of the First Church of Media Populism. That didn't come out quite right, but I mean it as a complement. Every Sunday morning Frank Rich flays patronizing media groupthink about the doltish American public, which of course is often doltish but which cannot be assumed to fall for every stupid trick that Republican campaign managers - themselves no geniuses - can invent. He's good on the class bias - the white upper-middle class big media view that has swallowed market economics whole (my beef) while anxiously overestimating the power of the public to be duped just as easily as they were by the same right-wing ideas.

Father's close is especially nice - hmm, forget it, I won't spoil the ending by pulling it out of context. Read the piece and the good Obama quote at the end.

Father misreads some of his stats, however, to make the point that we the people shattered two assumptions: that whites won't vote for a black president, and that the culture wars are over. The latter cannot be shown by saying as Father does that "only" gay marriage was crushed by culture warriors. More on this later.

As for the first point, exit polls show no improvement (outside of a margin of error) in the white vote for the Democratic candidate. Father Frank uses the National Journal poll, and if you play around with the menus you can see the sad flatline of white male support for Dems - from the previous high of 38% (Clinton 1996) to Obama's 41%. That's within a margin of error. Look at "White Men Attending Church Weekly" - an unvarying 3:1 Republican margin. The only solid Dem improvement with white men was in the 18-29 age group.

When you look at whites overall - same story. Every grouping of whites aged 30 and over went at least 55% for McCain. Among voters 65 and over, the Dems do worse every time, this one included.

And check out the impact of religion. If you declare an affiliation, even if you don't attend church regularly there's a 60% chance the Republicans own your vote.

And white women? If you break out single college-educated white women, you can see a strongly Dem group that has gotten more Democratic over time. But white women overall voted slightly more strongly for Gore and Clinton '96 than for Obama.

I just hope that marriage, when it eventually comes to them, doesn't turn the gay vote as Republican as it does the straight vote.

The Two Obamas

Obama One: Policy Obama.

This is the Obama of the often muddled and mediocre policy choices, as on health care.

This is the Obama of the boring new "change" website and the strong tendency to follow Bill Clinton into "too little too late" - like his wee stimulus package.

This is the Obama who may pick Larry Summers or some other Clintonista who conspired with the right-wing deregulators of the late 1990s to cause the problems he is now supposed to solve.

This is the Obama who did pick a central Clinton figure Rahm Emmanuel to be White House Chief of Staff, thus putting hard-line pro-Israeli positions and hard-line pro-Wall Street neoliberalism in the guardhouse to the Oval Office.

This is the Obama who has taken up positions in foreign policy much like those of Bush and Condi Rice.

This is the Obama who favors same-sex civil unions while opposing gay marriage, and who was used by the YES on 8 campaign in California against gay marriage, even as he said he was opposed to Proposition 8.

This is the Obama who can be pushed to the "center" by right-wing spin about how the people voted massively on November 4 for low taxes and small government. This is the Obama that, like Clinton before him, the Right can roll.

Obama Two: Movement Obama

This is popular Obama, mass Obama, the Obama of the 7 hour lineup to vote, the Obama that belongs entirely to the global public because this "Obama" is created by their hopes and dreams. This could be called the Multitude Obama. This is the Obama of November 5, of the Obama Revolution. This is the Obama that inspired Le Monde to follow its gloomy editorial about Obama's conventional realism in foreign policy with several pages of articles about the electrifying effect on France's racial awareness in general and the demands of its people of color more specifically.

Some commentators were invoking Obama Two as soon as the election was finished. Here's a statement I especially like from Columbia professor Mahmood Mamdani

There is that remarkable primary debate with Hillary and Edwards, where a reporter asked the three of them who would Martin Luther King support on this day, and Hillary and Edwards responded by convincing the audience why King would have supported them. And Obama responded by saying King would not have supported anybody, that King would have organized his movement to push the winning candidate to pursue the objectives. Well, that’s the real question now in the US today.

There was a movement, a youth movement, to elect Obama. Will that movement dissolve itself? Will that movement build itself now around the objectives for which it organized? Will America recognize, as I believe South Africa has after the election of Mandela, that the election of Mandela was not change, but an opportunity to change? And whether that opportunity is realized and transformed into a program of social justice within the country and peace abroad will depend on the movement that pushes Obama and gives him the opportunity to respond to it. . . .

Has the movement been absorbed into the state? Look, there’s a remarkable difference between the youth movement of the ’60s, which mainly organized outside the system, and the youth movement which has brought Obama to power, because this movement has organized within the system to reform the system. Obama keeps on saying that this movement must not go away, that change hasn’t come, that this is the beginning of change. Now, will the candidate be able to tame the movement, or will the movement be able to stamp itself to some extent in the coming days.

See Robert Kuttner and Arun Gupta saying very similar things about the financial front: Obama One will need his better half if he is to do the right (and effective) thing, and that better half comes from social movements under the pressure of events.

We regular folks can't do a damn thing about Obama One. But we created Obama Two and can send him into battle any time we need to. He is neither of those guys at the top:

Yes We Did

Everybody's happy. everybody's jumping. On the world scale, at the very least 80%. Every single one of my blue-state Republican family and friends voted for him. My 80-year-old father and his wife wrote: "hooray, we watched the dramatic win here on Maui. It surely would have been fun to be in Chicago at Grant Park. Now let us begin."

The World joy will be hard to stop.

And it will be hard to stop everybody's work. The Seven Million who worked for Obama. The four years of endless efforts in precincts all over the country to have an actual fair vote in which everyone is counted.

On the show she does with Elizabeth Robinson on KCSB, "No Alibis," Avery Gordon said it was also sad that everyone worked so hard just for a fair election, the meager baseline of formal democracy. Sharon Hoshida pointed out the victory for bottom-up organizing in general.

Both of these are true. Community organizing was the big winner Tuesday night. Even if organizing job 1 was to count the votes correctly. wow!

Obama's greatest strength is not his "intellect" and "character" as has been touted by beltway folks. These are very good. But his real genius is understanding the power and the intelligence of the streets and corners where people live, talk, think, and act.

His best line in his acceptance speech:

I know you didn't do this just to win an election and I know you didn't do it for me. You did it because you understand the enormity of the task that lies ahead.

His second best line:

will always be honest with you about the challenges we face. I will listen to you, especially when we disagree.

Obama's win was a win for the grassroots - again, its brains and power - and a win for someone who unlike nearly any other national politician and pundit I can think of, learned how to listen.

This also means people will be able to talk back. There will be discussions. There will be multiple sides, international differences exchanged, and no prefabricated victory for the power-associated view.

This sounds simple, like a dumb-level pluralism. But in the context of American politics, it is huge.

That is because We-Obama defeated the two principles that have allowed the Right to rule three decades of US national politics:

• before the election, do not debate. Throw the other side out of the debate (liberal abortionist gay- marriage supporting terrorist-loving pacifists who hate America).

• during the election, suppress the other side's vote

The absolutely awe-inducing lines, the endless discussion of voting minutae, the national care for the voting booth defeated the second. And something else defeated the first- the sperading perception of the sheer failure of the rhetoric and the deeds of polarization to fix the country.

You could see it in the red counties of western Virginia and eastern Indiana in the way McCain and culture-war Amazon Palin polled 10-15 points behind the Bush of 2004. The casting out of the political thought of the entire post-1929 period had visibly ceased to work.

While looking for something better, people looked to Obama because he does get it - the labor, the ordinary effort, the regular intelligence, and how change comes from that. My friend Virigina, American in Paris, got me to read the Yes We Can section in the Nov 4 speech again and she is right about how good it is.

Ann Nixon Cooper is 106 years old.

She was born just a generation past slavery; a time when there were no cars on the road or planes in the sky; when someone like her couldn't vote for two reasons -- because she was a woman and because of the color of her skin.

And tonight, I think about all that she's seen throughout her century in America -- the heartache and the hope; the struggle and the progress; the times we were told that we can't, and the people who pressed on with that American creed: Yes we can.

At a time when women's voices were silenced and their hopes dismissed, she lived to see them stand up and speak out and reach for the ballot. Yes we can.

When there was despair in the dust bowl and depression across the land, she saw a nation conquer fear itself with a New Deal, new jobs and a new sense of common purpose. Yes we can.

There are storm clouds on the horizon for We-Obama:

Obama's Clintonomics
Obama's Clinton people.
The hardship that was already there.

Amy Goodman got one of the best quotes of the night, from a woman at an Obama rally in Chicago:

I feel that I want to hang a flag. That I'm a part of the United States. And that we matter. All of us.

That's the core of the victory right there. "we matter. All of us." That will be the source of all the change to come.

the Amazing Lines

The lines are unbelievable and suggest not just our less than democratic election system but a mass upwelling of devotion to turn things around. That's Calais, Vt., Virginia Beach, Va., San Francisco, Ca., Alexandria, Va, Hialeah, Fla and Vienna, Va.

And here's a nice Rachel Maddow rant about long lines as the new version of the poll tax.

We're Gonna Party Like It's 1996

You see the point. Obama will lose those three per- ennial disa- ppoint- ments to modern America, Indiana, Missouri, and North Carolina. He won't get the cracker belt in Arkansas and Louisiana. He won't get the rural center - too obvious to be sad about. He won't get AZ. But he will get Florida and the other big battlegrounds. Amazingly Obama will win Virginia (I really feel bad for the Carolinas, trailing Virginia again). And he can add Colorado.

Clinton got 379 electoral votes.

They way they were: page down to look at the mug shots of the 90s rulers.

Obama is gonna win.

And then what?

California split? Red county vs. Blue county? Krugman's right to worry. Friedman's right to say "I can’t remember a presidential campaign that was so disconnected from the actual challenges of governing that will confront the winner the morning after." But this election is about a revolution in cultural capital and symbolic power.

This is why the possible advent of a "new FDR" is being announced in places like Bloomberg's financial news service. The 28 year reign of Reaganomics is over - by which I mean its existence as common sense and assumed ground rules (it still has lots of institutional power). That will make Obama's life easier than Clinton's on the economic front, as bad as the crisis is now.

But we're going to have to help him think up the next step.

Dumbness Factor

I just re-found this analysis of the correlation between voting Democratic and level of education. It's only suggestive - on the level of states - but does show the big factor in shifting populations out of hard conservatism (as opposed to the Dems' soft conservatism) is not high school but college completion.
The author adds,

I'm well aware that these results do not mean that getting a degree makes one vote Democratic. It is more likely that getting a degree makes one reject simplistic populism in favor of issue-based analysis, makes one more likely to live in cities, and makes one gravitate to the more college-dense and simultaneously more Democratic states on the coasts and Great Lakes -- and that those things are much more causative than the degree itself.

Well ok - close enough.

One of the California students in Grenoble said it's pretty obvious why Republicans cut higher ed spending - it grows their vote. There are worse explanations.

hoping, wishing, and all but praying

The Obama Revolution

I realized how this is going to work while not making it through 10 minutes of Sunday CNN in Lyon and flipping to a cable channel called Demain.TV, and finding a show whose French title means "Desperately seeking a French Obama." One of its guests was a woman called Khédidja Bencherif, la Présidente du comité de soutien parisien à Barack Obama, a group in Paris that supports Obama. The host asked her why, since you can't vote for him. She said because he represents the possiblity of a society without exclusion. And she said if this happened in many societies it would change the world.

Mme Bencherif is right. The Obama revolution is the end of the politics of casting out that has dominated US political discourse for a generation. It was designed to keep inclusion from getting any farther than it had in the 60s and 70s. And it worked.

The media versions were Rush Limbaugh and Bill O'Reilly, among many others. The idea was not to have a debate but to throw the other side(s) of the debate out before it got started. Liberalism was treason, criticism was weakness, government was an attack on working Americans, etc etc. The responses were banished in advance. This was the point of the culture wars - to eliminate the cultural and psychological sources of resistance to the grossly elitist economic and social policies that have formed the Washington Consensus since 1980.

Not to up the ante, but I do like quoting Jean-Francois Lyotard defining the act of casting the opponent out of the language game as a strategy of terror. But that's pretty much what we've had. And that's what Obama's success will end.

Let's be clear. The Obama revolution isn't in his policies, obviously. On the French scale his politics are closest to that of the country's dominant conservative, President Nicholas Sarkozy. Sarkozy is in fact somewhat to the left of Obama in proposing new unemployement protectoins as a repsonse to the crisis and in accepting France's single-payer health care, which is causing popular anger with its new American-style, Obama-endorsed, proliferation of extra uncovered fees. Obama wouldn't be a socialist in a country whose largest non-conservative party is the Socialist Party, which is in turn not so radical that it can't be regularly taken to task by the weekly magazine Marianne for having swallowed neoliberalism's faith in the power of self-regulating markets to govern economies and societies, which Marianne does from its left Gaullist position (de Gaulle having been a conservative nationalist who put the social fabric first).

The Obama revolution is that he would not simply advocate, or represent, but, in the White House, getting off Air Force 1 instead of Bush in Moscow, Johannesburg, Buenos Aires, Paris, Tokyo, Cairo, accompanied by the real sista - as Rev. Wright reminded us - Michelle Obama as First Lady - wow, it's amazing even to write those words, an African American First Lady of the United States - Obama would incarnate the end of the triumph of exclusion and discrimination.

Not the end, obviously, but the end of exclusion as the governing principle.

And then we'll have to do the rest. for example . . .

Middle-Class Issues

It's great news that Obama is doing as well as projections like this one suggest (where he wins with almost 350 electoral votes). But he has campaigned as a moderate, appealing to the economic majority with a combination of tax cuts and cheap, low-cost reforms in areas like health-care. If the economy hadn't gone into crisis mode, we would be taking more skeptical views of Obama's political genius right now.

How should the mass middle-class decide how to vote? A clear choice was laid out by John McCain and Michael Moore.

On October 26th, John McCain said this at a rally:

We’re going to double the child deduction for every family. We’ll cut the capital gains tax. We’ll cut business taxes to help create jobs and keep American businesses in America. You know, as Joe the Plumber and small business owners across the country have now reminded us all, America didn’t become the greatest nation on earth by giving our money to the government to spread the wealth around.

This reflects the core Republican position throughout the 20th century: cut taxes and justify it by larding large cuts for the top brackets (capital gains) with apparently middle-class cuts (child deduction). Denounce redistribution, and make this seem like something other than plutocracy by equating redistribution with socialism and poverty.

In reality, public services create wealth, and they built the mass middle-class. Governments built middle classes with high-quality common systems - schools, roads, mass communication infrastructure, bus and train systems, health care, etc. - that market forces always undervalue and underinvest in (this comes from 1950s neoclassical innovation economics - Kenneth Arrow, Richard Nelson - and not only from the left). America did "become the greatest nation on earth by giving money to the government" to build things companies never build - Microsoft, Exxon, Cindy Hensley McCain's beer distributor Hensley & Co.

Hopefully Obama knows this, though he won't say it out loud. Sounds like "taxes." But later a big education campaign will be needed to get the middle class to see where its origins really lie.

Why don't they know this already? Alaska has socialism, in the form of Sen Ted Stevens's federal pork train. Sarah Palin increased the windfall profit tax to double the annual state handout to every man, woman and child to about $3300 a year, or $13,000 for a family of four. The red states who vote against big government get more from big government than the blue states that like it. Nothing wrong with this- they're mostly more backward and more poor than the blue states. But they are pretty dumb to have never figured out where roads and sewers in Alaska actually come from.

On the Obama side, it was Michael Moore who raised the mass middle-class issue of who runs the economy.

AMY GOODMAN: How did it happen that they didn’t change, that you have now in Michigan the highest unemployment rate in the country?
MICHAEL MOORE: It happened because the workers don’t control the means of production. Oops, I guess I can’t be president now that I said that. No, but seriously, I think that if the autoworkers, years and years ago, could have had a say in the cars that were being built, the Big Three would have built cars that people wanted to drive, instead of the kind of crappy-mobiles that they continue to build, the gas-guzzlers they continue to build. And people wanted something different, and nobody listened, because the auto companies were arrogant.

Moore starts with a classical marxist formulation, then Americanizes it by saying it's common sense to put worker knowledge into the production process, and Detroit's massive failure proves the stupidity of not doing this. He's right: unilateral executive control - the watchword of US "free market" capitalism - is not only unfair and undemocratic, but inefficient as well.

In fact "markets" have made the economy more oligarchic than it was 30 years ago - unionized workers and white-collar professionals have generally speaking less governing power than ever, in the midst of what is supposed to be a knowledge economy. This is no accident, and a turnaround toward democratic economics is the core stake of this election.

Republicans are right about what the first practical outcome of a turnaround like that: a major stimulus plan for the states, where most public systems need to be rebuilt and upgraded for the twenty-first century.

Is Joe Biden Obama's Dick Cheney?

I really can't think about it after a couple of weeks back in le Morvan - aka The Shire - dodging the the news. I also moved to Lyon and started my new 2-year j0b as the director of two University of California study centers - one here and the other in Grenoble, which is surrounded by the best mountain scenery I've seen in France. My main memory of the first week is spending four hours at Ikea outside of Lyon buying giant boxes, and then four hours turning the boxes into furniture. And then doing it all over again. It was actually fun, and the place looks great.

Here are some shots from the first week back in July:


I'm looking west from the middle of Place Bellecour towards the hill and the cathedral on Fourviere hidden behind it. that's my building, and I have the top floor windows - the three on the right.

Here's the best Ikea living room in history - main credit to Avery:


And here are two shots from yesterday evening looking left out the window in front of the table above (Place Bellecour, la grande roue, and the "crayon"), and then looking right.





I like it here.

You can see 100 or so pictures from the first week at Grenoble EAP on my Facebook page.

Road Warrior Cometh

The premise of the Mad Max series is a comb- ination of "peak oil" - the radical decline of this resource coupled with strong-man anarchy. May ended with emerging signs of the coming dog-eat-dog.

There are various signs here and there, and I won't even mention the increase in deadly tornadoes.

• Baraka Obama's new economic policy director is Jason Furman, who has been close to Robert Rubin and other architects of Clintonomics. Clinton, Rubin, Larry Summers, et al presided over many a Road Warrior scenario around the world, Argentina and Russia being classic examples. Naomi Klein links the "shock doctrine" to right-wing warriors like Milton Friedman, but concentrated finance capital has the same effect, holding policymakers hostage and undercutting whole industrial sectors as money whips in and out of nations to arbitrage small price spreads. With the 1990s Washington Consensus embodied by Furman, Obama won't be able to resist the darkness.
  
• the hidden laws of finance. Here's a short overview of the quasi-private way that a small group of unknown authorities set the LIBOR bank rate - a key international index.
• ye olde middle-class high-tech foundations continue to erode. The Semiconductor Industry Association reported that revenue from memory chips "declined by 34 percent even as unit shipments increaesd by more than 30 percent in the first four months of 2008 compared to the same period last year." We can barely make money on more or less our best industry. Strap on those rooftop fuel tanks.
• L.A. area hospitals were dumping poor, sometimes helpless patients on Skid Row, usually in hospital gowns . Hollywood Presbyterian got fined $1 million and will need to appease a federal monitor. Maybe patient dumping will stop. But given the state of LA County healthcare, it probably won't.
• The NYT's front page for May 30 juxtaposed two stories: "For the Military, Ultimate Fighting, but with a Cheering Section," about how the military is using the human equivalent of dogfights to recruit poor kids into the military. Next to this: "As Oil Prices Soar, Restaurants Learn to Lock Up Old Grease": "The bandit pulled his truck to the back of a Burger King in Northern California one afternoon last month armed with a hose and a tank. After rummaging around assorted restaurant rubbish, he dunked a tube into a smelly storage bin and, the police said, vacuumed out about 300 gallons of grease."

Now you'll have something to put in your rooftop tanks.

Dum n Dummer 2

The LA Times had a poll today showing John McCain losing to either Clinton or Obama, which is good news for the economy. The bad news is that although 56% of the folks in this poll think the economy is "the top priority for candidates running for president to address," only 25% of them thought this in December 2007. Too late - you're already screwed!

"This American Life" ran a good show today on the subprime and credit crises. A former trader at Morgan Stanley's mortgage-backed securities desk said that they realized it was all going wrong around Halloween of 2006. Over a year later, only a quarter of the general public was very worried about the economy, and this was five months after the blow-ups of August. Why so slow, people? At this rate, we'll never turn it around.

This Week in American Decline

Everyone was picking through symptoms of the financial crisis this week. The fire sale of bad boy investment bank Bear Stearns got five times more expensive than it was on Friday. The Financial Times reported that the $2 share deal came unglued not just because of Bear Stearns shareholder outrage but because JP Morgan, the buyer, didn't sew up the deal legally. This is not very comforting, given that they are the rescuer here.

Other financial themes persist:

• The economic confidence of middle-class and working folks has been crushed. Floyd Norris has the week's best view of the underlying issues. In terms of overall confidence levels, the last time we were this low was the oil crisis of 1973! He points out it's not just falling housing prices and market volatility that is the problem, but rather the

  evidence that America is no longer a leader, or perhaps even competent, in one area in which we believed it excelled.
  
  That area is finance. Only months ago, American financial institutions were pre-eminent in the world economy. We were the country that invented all the new financial products and that made lots of money from them. It was our investment banks that were called upon to advise companies and governments in other countries, and then to arrange the financing they needed.
  
  Now that reputation lies in tatters. Our big banks have been forced to turn to places like China and Abu Dhabi for capital as losses have mounted. But no similar angel turned up for Bear Stearns, and the Federal Reserve Board had to step in to avert disaster.
  
  The Fed, which only months ago seemed omniscient, now seems to be making it up as it goes along.

• Blind-date investing. Big asset pools remain mystery dinners. What the hell is inside the Bear Stearns asset pool, for example, which in theory among the most scrutinized? Who knows whether it's "really" all worth $2 a share, $10? 5 cents a share? Senators don't know either.
  
• crumbling middle-class dreams. The NYT again discovered the equity crisis and the truly amazing amount of credit on which the trappings of prosperity have come to depend.
  
• Obama sought to occupy working-folks ground with his speech on the financial crisis. Paul Krugman pointed out his proposals are all weaker than Hillary's.
• Help the Top First (and then Stop). The economist Dean Baker pointed out that the Fed guaranteeing nearly all of Bear Stearns's assets bails out the big institutions that hold instruments backed by BS assets. In the same vein, Republican candidate McCain made it clear that he will follow anti-government dogma on the genius of markets and not intervene. Treasury Secretary Paulson also rejected the New Deal quid pro quo: you get government money and support, you get government ground-rules.
• Hail Mary in High-Tech. Motorola hasn't found a product replacement for its smash hit Razr phone. Sales decline. Stock prices fall. Gorilla investor Carl Ichan gets upset. Motorola appeases Ichan by deciding to "split itself into two separate publicly traded companies, spinning off its unprofitable mobile phone unit to investors." Which is stupider - selling your main business, cell phones, instead of fixing it, or thinking that if you brand it a loser investors will buy it? I don't know. I do know the "real economy" folks don't know any more than last year's hedge fund geniuses. I also know that Carl Ichan should retire.
  

Politically, the crisis has continued and not transformed the two-party politics we've seen all decade. Republicans favor the upper brackets, really the top 0.1% and top 1% over even the top 10%. McCain's speech was proof that the best Republican minds see no mounting opposition to this.

Everyone else has to rely on the Democrats. There's an uptick in popular fear and hence popular suspicion of the Republican monopoly-market policies that got us here. But no one calls it that, and the Dems still have 1) too-little-too-late plans and 2) no overall philosophy of "social markets" or something similar that would be truly counter-cyclical and get the economy moving again. So for the moment, both the economy and the political debate are going nowhere.

Meanwhile, "Old Europe" and its apparently backwards social infrastructures (aka welfare states) is doing relatively well, even with the strongest currency in a couple of generations.

Half-Way Houses of the Less Than Blind

I can't remember a time in my life of watching politics - going back to Nixon and Watergate - when so many people called a campaign speech one of the best in American history (Samantha Power, in a talk in Santa Barbara), or one of the best ever on race (Orlando Patterson) or one of the best in post-war history (Frank Rich). The reference is of course to Barak Obama's race speech in Philadelphia last week, and at the moment Obama is the king of the kingdom of racial healing and the king of the kingdom of political candor.

Of course in the US both of these kingdoms are kingdoms of the blind (see this ignorant, backward lead piece in the New York Times today). To rule them Obama need only have one eye. In the first, he need only admit both racial anger and racial mixed feelings, both of which have been denied in US political life. Thus he referred to his white grandmother both loving her African grandson above all things in the world, while admitting she was often afraid when she saw black men on the street. We must admit the feelings and the racial programming, Obama said. In the second kingdom, US politics is ruled by lying buzzwords that deny the emotional fabric of people's everyday life. See Obama's example of disagreeing with and yet loving his pastor, Jeremiah Wright, or his acknowledgement that he has been called both too black and not black enough, or his descriptions of the white resentment over their economic stuckness that both wrongly scapegoats black folks and yet is real and must be addressed.

The most appealing moment of the speech came toward the end, when he point-blank blasted the dissociative, the denial-based understructure of American political life.

We can pounce on some gaffe by a Hillary supporter as evidence that she's playing the race card, or we can speculate on whether white men will all flock to John McCain in the general election regardless of his policies.

We can do that.

But if we do, I can tell you that in the next election, we'll be talking about some other distraction. And then another one. And then another one. And nothing will change.

That is one option. Or, at this moment, in this election, we can come together and say, "Not this time." This time, we want to talk about the crumbling schools that are stealing the future of black children and white children and Asian children and Hispanic children and Native American children. This time, we want to reject the cynicism that tells us that these kids can't learn; that those kids who don't look like us are somebody else's problem. The children of America are not those kids, they are our kids, and we will not let them fall behind in a 21st century economy. Not this time.

Obama named the corrosive source of American political stupidity - the mass refusal to face real sources of our problems. He did so in multiracial terms. He thus also rejected the politics of racial stigmatization. And he rejected the politics of group repudiation. These have been the twin pillars of right-wing rule for thirty years. Obama the two-eyed man - the one who would actually win both the nomination and the election - is the one that can tap these vast emotional reservoirs where lie mixed feelings and hence the capacity to negotiate with the other sides, including the other sides of oneself. Were this to happen, it would mean the sidelining of the authoritarian tendency in American political life, a tendency that has allowed conservatives to rule with ideas that, by any measure, have consistently and routinely failed.

Obama's political intelligence rests in his ability to offer Americans - especially whites - a political and a racial half-way house. The political half-way house appears in moments like this one: Why associate myself with Reverend Wright in the first place, they may ask? Why not join another church? And I confess that if all that I knew of Reverend Wright were the snippets of those sermons that have run in an endless loop on the television sets and YouTube, or if Trinity United Church of Christ conformed to the caricatures being peddled by some commentators, there is no doubt that I would react in much the same way.

But the truth is, that isn't all that I know of the man.

Obama says it's OK for you to reject the anti-white moments of this anti-racist preacher, one who may remind you of Malcolm X, or at least Radio Raheem in Do the Right Thing, since he, a black member of this black congregation would feel just as you do - IF he didn't know what he knows. So Obama relieves the white repudiation of black radicalism of its guilt and shame, and at the same time says look again. American politics without shame would be a revolution indeed - it would end the Right's power as we have known it.

Unfortunately, Americans in their political life move too easily from relief to innocence. Obama held out this temptation too by orienting his major race speech around a repudiation of the core beliefs of Jeremiah Wright, as in this unpleasant passage.

But the remarks that have caused this recent firestorm weren't simply controversial. They weren't simply a religious leader's efforts to speak out against perceived injustice. Instead, they expressed a profoundly distorted view of this country — a view that sees white racism as endemic, and that elevates what is wrong with America above all that we know is right with America; a view that sees the conflicts in the Middle East as rooted primarily in the actions of stalwart allies like Israel, instead of emanating from the perverse and hateful ideologies of radical Islam.

As such, Reverend Wright's comments were not only wrong but divisive, divisive at a time when we need unity; racially charged at a time when we need to come together to solve a set of monumental problems — two wars, a terrorist threat, a falling economy, a chronic health care crisis and potentially devastating climate change — problems that are neither black or white or Latino or Asian, but rather problems that confront us all.

In this speech Obama criticizes Rev. Wright again and again. It starts to feel like his version of Bill Clinton's Sister Soljah moment in 1992, when he showed how he could talk to and about black radicals as though they were misbehaving ghetto schoolkids. Obama relapsed into the language of racial scapegoating, using the particularly insidious updating that links anti-white "racism" to anti-Israeli "anti-semitism." In both cases, the vast majority of criticism of white racism and of Israeli policies are critics of the specific outlooks and actions of those parties, not of some essence of evil (whites as essentially racist, Israel = Jews = anti-Arab). Here weakened his "candor" with falsehood. We of course all do this - find freedom of thought in one area and bondage to received ideas on the other. But he blanketed with innocence one of the key Obamablindnesses of American domestic policy (that things are terrible for many if not most black folks today, and that white racism persists), and one of the blindnesses of American foreign policy - the obvious absence of fairness and evenhandedness and respect for popular Arab democracy. Both leave him open to manipulation by Hillary Clinton and John McCain alike. As he knows better than any other current politician, it is the lie that will leave him open to defeat.

What for Brains?

You know I'm a faithful reader of Fr. Frank's Sunday sermon, and today is no exception. I would feel better about this piece if I had Obama Fever. But I just can't catch it.

I do like him better than Hillary, who has always struck me as an institutional manipulator whose main goal is her own advantage. Not that this makes her worse than Bill Clinton or most other politicians for that matter in a country as trapped as ours by old ideologies and thus more or less unable to have new social ideas and look for political innovators. But I agree with Sean Gonsalves, who wrote about Hillary, what record? What has she done besides broker a lot of forgettable-to-rotten deals on stuff like enabling the Iraq invasion? That's a non-rhetorical question.

But Obama. I notice that Fr. Frank used to praise him by damning Hillary. Today he's moved on to praising him by damning McCain. He points out how the Republicans are a party of old and wealthy white men who don't represent or resemble America. And . . . ah, so what? That has been true since General Grant, and in the modern period since Ronald Reagan. Reagan turned 70 a month after he was inaugurated. MacCain will turn 72 before election day 2008, but lucky for him 72 is the new 62 - he looks a lot better than Reagan at the same age, leading member of the meat-and-martinis generation. The point is that the Republicans have represented the interests of a tiny white minority since for decades, and this hasn't stopped them from controlling three out of three branches of government for most of that time. We need a better reason for thinking that Obama can actually win.

There's the post-boomer belief that they are post-racism: Gonsalves believes this about his people. I don't. I haven't seen a massive movement about white Thirtysometimes to put their kids in majority-Latino public schools for the good of society. What is true is that crude racism toward Obama will sink the Republicans in a second - even comments about how "articulate" he is will be turned into instant CNN crawlers.

What is also still true is that Obama won't be able to Act Black. He'll have to get mad only in that weird resonant TV-preacher way, full of high-minded moral indignation. If he falls off that wagon it will be a huge deal and lots of fun to watch the media tie itself in knots trying to talk about his blackness without actually using the words.

The Change Candidate wasn't in #1 most-emailed position in the NYT today though. That position went to a piece called "Dumb and Dumber," about how Americans don't actually know anything. Well TV Americans, anyway, one of whom thought Budapest was the capital of the country called "Europe." It's tempting to see Obama, who says only what other Democrats have already said, is the candidate of the Dumb Generation(s), who will inherit America and do an even better job than the Meat-and-Martini generation of running the country into the ground.

But there's also the "hope" thing. Obama comes along at a time when leaders have never in recent times been more removed from the majority, more ignorant of it, and more unaccountable. Something about Obama's fervor and commitment makes it seem like he can cross the chasm. I think that's what people really loved about Kennedy's Camelot - he came from a family of bootleggers, but he wasn't a dreary, overstuffed crook. He seemed to have ideals. He wasn't just handsome enough to be a romantic lead, but had enough idealism to be romantic about politics and therefore make politics seem like it was part of people's lives again - of their hopes. He helped people take romanticism seriously. Obama seems to be doing the same thing.

Obama has something else going for him. The president is always the national father, and Hillary threatens that cultural function. Of course the president has always also been the white father, so it looks at first like Obama would be at as much of a disadvantage as Hillary. But "presidentialism," as the American Studies scholar Dana Nelson puts it, involves a deep masculinity function. George Lakoff, the Democratic commentator on campaign language and categories, identifies Democrats with the nurturing parent, which he contrasts with the Republican's strong father. Obama has the air of idealism, but whites, especially white men, will automatically attribute to him a suppressed rage that they will identify with strength. Hope in Obama comes from the sense that his race, ironically, will allow him to appear to be the first strong-nurturer the democrats have had since JFK.

Sunday Politics

I've been avoiding David "Schoolboy" Brooks for a long time, but embarrassed myself by finally biting on his listing as a top-10 most forwarded on the NYT webpage for the past few days. The piece is an "Answer Man" dialog that makes Obama an upmarket "experience" candidate and Hillary a working-class retail gal. Schoolboy improves his grades by getting a B+ this time. College vs. non-college is not a dumb analytic distinction.

You can also see the New anti-Hillary Strategy taking form on the Right. Rush and the rest will trot out the Hillary-hating themes, while Thoughtful Conservatives led in the media by Schoolboy and Bill Kristol will paint Hillary as old-school New Deal - actually a pretty nice lady, but outdated and misguided. This will trick her into moving right, and she will lose exactly the working-class votes she needs to win in November.

The overall Right doesn't actually see working America as defunct. They see the white working-class as the key to their own power, unions as their great political enemy, and their culture war (click Schoolboy label) against colleges and its middle-class grads as one of their two or three essential strategies.

Fr Frank's sermon does a good job of analyzing the "thick deck of race cards" Hillary is playing against Obama.

In October, seven months after the two candidates’ dueling church perorations in Selma, USA Today found Hillary Clinton leading Mr. Obama among African-American Democrats by a margin of 62 percent to 34 percent. But once black voters met Mr. Obama and started to gravitate toward him, Bill Clinton and the campaign’s other surrogates stopped caring about what African-Americans thought. In an effort to scare off white voters, Mr. Obama was ghettoized as a cocaine user (by the chief Clinton strategist, Mark Penn, among others), “the black candidate” (as Clinton strategists told the Associated Press) and Jesse Jackson redux (by Mr. Clinton himself).

The result? Black America has largely deserted the Clintons. In her California primary victory, Mrs. Clinton drew only 19 percent of the black vote.

Can you say "President McCain"?

My friend Susan's son Arnault has grown up in Paris with dual US-French citizenship, and asked me at dinner the other night whether the Clintons weren't good people whom liberals etc. should support. I gave him a short lecture on the Clinton Republocrat completion of the Reagan Revolution (wall street economy, end of welfare as we know it, acceptance of the evil of New Deal social democracy that, I added, is our only bulwark against barbarism and the "planet of slums) - poor kid. But I will send him this link on Bill Clinton in action. His deep driver was always to attract, be with, be liked by, be supported by the rich, and then become one of them.

This whole generation of post-60s politicians offers a sellout idealism that just makes me miss FDR - or CLR.

Coming Democratic sea-change

Here's an interesting piece from the Financial Times that strikes me as a real possibility, and it is not written by an advocate of a shift to the left, but by an opponent.

***
Beware the coming Democratic sea-change
By David Frum
Financial Times: February 7 2008

The conservative ascendancy in American politics is coming to an end. For three decades, the right has dominated, with the Republicans winning five of the seven presidential elections since 1980. Conservatives did more than just win elections: even when liberals gained power, they governed on conservative terms.

What were the most important accomplishments of the Clinton presidency? Balancing the budget, welfare reform and the expansion of Nato - not exactly left-of-centre projects. And of Jimmy Carter's? The deregulation of the airline and natural gas industries.

Neither president set out to accomplish these goals. Indeed, they often resisted them. In the end they had to accept the limits of the possible - just as Republican presidents Dwight Eisenhower and Richard Nixon accepted the limits of the possible in the liberal era from 1930 to 1975.

Neither Mr Clinton nor Mr Carter created a single, major, permanent new national social programme. Mr Clinton failed to bequeath power to his chosen successor; Mr Carter failed even to win a second term.

John Mitchell, Richard Nixon's attorney-general, predicted in 1970: "This country is going so far right you won't recognise it." His prophecy was vindicated. Now its time is up: 2008 is shaping up to be the first decisive Democratic victory since 1964 - a 1980 in reverse. The signs are gathering everywhere. Three-quarters of Americans now describe the country as "on the wrong track". Almost 90 per cent express strong dissatisfaction with the costly healthcare system.

In primaries and caucuses, Democratic contests have drawn more voters than Republican ones. An early estimate after Super Tuesday suggests that, thus far, 11m Americans have cast ballots for Republican candidates, while more than 15m have voted for Democratic ones. Democrats outpolled Republicans by 20 per cent even in the state of South Carolina, maybe the most conservative in the nation.

Usually pundits expect that the party that chooses its nominee first will win the election. That will probably not be true this time. Although the Hillary Clinton-Barack Obama contest looks likely to continue longer than John McCain's march to the Republican nomination, Democrats tell pollsters they like both candidates - they are just deciding which they like best. Republicans remain divided, with Mr McCain, Mitt Romney and Mike Huckabee each passionately disliked by opposing factions within their party.

In polls, Americans express preference for Democrats over Republicans on almost every issue surveyed, including such traditional Republican advantages as taxes, ethics and competence.

In 2002, equal numbers of Americans identified as Republicans and Democrats. In the six years since, Republican identification has collapsed back to the level recorded before Ronald Reagan. The decline has been steepest among young voters. If they eat right, exercise and wear seatbelts, today's 20-somethings will be voting against George W. Bush deep into the 2060s. Most ominously, US polls show an ideological sea change: a desire for a more activist government, a loss of interest in the tax question and a shift to the left on most social issues (although not, interestingly, abortion).

As things are going, the Democratic nominee will win a majority of the votes cast (unlike Mr Clinton). They will almost certainly gain an increased majority in Congress (unlike Mr Carter). If the present mood lasts, that nominee will have a green light to move the US in new policy directions (unlike either Mr Clinton or Mr Carter).

The stage has been set for the boldest and most dramatic redirection of US politics since Reagan's first year in office. Of course, there are no guarantees in politics. An inept president could bungle his or her chances. Unexpected events could intrude: a nuclear test in Iran, a major terrorist attack on US soil or some attention-grabbing political scandal. But given moderate luck and skill, the next president could join Reagan, Lyndon Johnson and Franklin Roosevelt as one of the grand reshapers of politics and government.

Tragically, that reshaping is likely to be for the worse. The things that Mrs Clinton and Mr Obama want to do are likely to prove costly and counterproductive, if not outright disastrous. A greater government role in healthcare, higher taxes, tighter regulation, more social welfare, an increased flow of low-skilled migrants with amnesty for those already here, a cut-and-run from Iraq: these are not measures likely to improve US competitiveness or enhance America's standing in the world.

To prevent these negative consequences - to retrieve victory from impending defeat - would require more creativity and responsiveness than Republicans and conservatives have displayed for many years. Unless American conservatism can rejuvenate itself, the odds favour the liberal left holding sway until the day that its own errors and delusions lay it low again.

The writer, a resident fellow at the American Enterprise Institute, is the author of Comeback: Conservatism That Can Win Again

Meltdown Continued

Dean Baker is clearer today about why homeowners are defaulting on their houses before they default on their credit cards.

Glen Ford projects a historic loss of wealth for people of color. The report on which his piece is based suggests that African Americans will achieve home-ownership parity with whites in only 5, 423 years!

Very unpleasant data on US contraction sent the Dow and S&P 500 into a tailspin - they are around 3 percent down in one day. Markets were especially shocked by a survey of non-manufacturing sector managers that looked like the service economy in the US is going off a cliff. European bankers may be figuring out a US decline will start to sink them too.

The frequently awful Martin Wolf of the Financial Times is scared into making real sense today. He points out that "the banking sector is the recipient of massive explicit and implicit public subsidies," makes risk public and profits private, suffers from "massive agency problems," while society lacks the ability to monitor transactions until long after they're over. This is the FT equivalent of Bolshevism, and ends in a call for - regulation!

Take a careful look at that graph above. See where the US makes its money. Nearly half of all profits in the U.S. now come from the financial sector. This is about double their share at the end of the decade. Meanwhile, the last employment report showed that manufacturing employment in the U.S. feel for the first time in known history below 10 percent of the total.

Now look at the one below. See how much financials make.



I had a great day with Gaye and Chuck visiting from out of town - aside from the moment when Chuck predicted Mitt Romney will be the Republican candidate.

I tried to find something economically relevant on the candidates' websites. Well they do say things: Hillary Clinton for one; Barak Obama for another. He at least calls for raising the cap on social security taxes to pick up higher-income folks - some minimal tax fairness. They don't know what to do about the larger picture.

While you're waiting for the candidates' to say something effective, have fun with the NYT's class graphic.

The absence of a clear explanation of what's happening that people can understand - it's fairly mindboggling.

The absence in the mainstream of a coherent policy alternative to Blairite-Clintonish finance capital is equally interesting.

But it will come. As Chuck said, "The Giants won the Super Bowl on Sunday. Anything is possible."

Why Care about Keynes

Thinking about the presidential campaign makes Fr. Frank dull this morning. A fit of economic nationalism makes Maureed Dowd more interesting. Actually the term economic nationalism just means healthy concern at the blatantly negative effects of the dogma of free trade and the decoupling of the financial sector from national development.

In case anyone thought the Bush Administration would think about the national welfare instead of the welfare of its wealthy core, the president's "stimulus package" wants to make permanent the upper-bracket skew of his tax cuts, which will fail to stimulate. Fail, that is, to stimulate anything except more donations to him from the very rich, who appear to be giving more money than usual to the Democrats.

I'm not sure folks have grasped the philosophy behind the Republican hatred of "Keynesian" economics. Keynes was a major source of the idea that a government-led stimulus could reduce and end a downturn, like the one that in the 1930s was known as the Great Depression. The core concept is that you give money to people who will spend it. They get the goods the money pays for, and the economy is stimulated by their spending on those goods, which increases sales of products and services, which increases investment and hiring, which gets the economy going again.

Republican hatred starts with the association of Keynesian policy with the Democrats, and specifically with their most influential and effective president ever, Franklin Delano Roosevelt. They never stopped hating his New Deal, and here we get beyond the surface partisanship. The people who most immediately and completely spend the extra money they get from a tax rebate or government program are the middle-class and the poor. Keynes offered a solid technical reason for targeting generous, substantial public services at the bottom and the middle of the income ladder rather than at the top.

Even worse for Republicans, Keynesian policy worked. It created a counter-cycle during the Depression. It justified the massive public investment that was the fundamental ingredient of the economic "golden age" after World War II (I've written about this more than once.) It greatly expanded the American middle class (and the British, and the French, and the German . . .) It also, for a time, made a huge number of basically conservative white voters into Democrats. Only Nixon- and Reagan-pioneered campaigns against ungrateful Negroes and hippie students started to peel off the white middle-class from the Democrats (Nixon-Wallace in the 1968 election, Reagan in the 1966 election for governor of California). Good public services remained very popular - as long as their main beneficiaries didn't seem to be "welfare queens" and unAmerican critics of big business or war.

Beneath the political concerns lies a Darwinist disdain for the financial status of ordinary people. The silent assumption is that if ordinary people were any good with money they would already have more of it. If they deserve more money, then they will go out on their own and get more money. Republicans generally deny the economic conditions, discrimination, structural problems, or the sheer mediocrity of the wages nearly all of us earn doing basically useful things like teaching children how to add and subtract or or like nursing hospital patients. There are still some "Main Street" Republicans who don't stick their fingers in their ears or cover their eyes - Kevin Phillips has long been one, and has railed against Wall Street economic concentration better than nearly any Democrat. But the party leaders oppose economic power and broad-based wealth every chance they get.

Sounds a little extreme to say so, but in fact Republicans have spread economic Darwinism, rationalized all inequality booms, and suggested in effect that if schoolteachers don't like their salaries they can always quit and become intellectual property lawyers. They always oppose minimum wage policies,wage increases for the public-sector employees that have been the backbone of the black middle class, and broad-based stimulus packages that give meaningful rebates to regular people. "Free markets" have for a quarter-century been moving wealth and income from the bottom and middle to the top, and Republicans will protect the perimeter that defends around market inequality to their dying breath.

As long as the Democratic candidates don't really attack the inequality perimeter, I will stay bored with them.