OK

Pick an issue—HCR, Torture, FISA, Bank bailout—ever wonder why things aren’t more different today than they were under Bush the Small?  We donate and we walk blocks and we get out the vote but things just don’t change very much.  Lots of diaries here decry this problem.  

I believe that there are some problems that are so large we can’t really see them.  They are elephants in the room that we simply refuse to recognize.  No one is blinder than he who will not see
The Nature of our Government
The Nature of our Businesses
The Nature of our Media

We must see these things as they are before we can change them.  Follow me across the fold to discuss each item and what has to change within us before we can change our world...

The Nature of our Government
If you could forget everything you were ever told about the United States of America and you looked on it with fresh eyes what would you see?  A nation "by, of, and for the people" or a nation controlled by its moneyed interests that gives its people just enough to keep them out of the streets?

Throughout history, power has sought concentration.  For the first time ever in the history of the world, with the writing of the Declaration of Independence and the Constitution, people said we don’t need shamans, warlords, robber barons or kings to rule us.  They very specifically decentralized power by crafting a 3 part government, where each part provided a check on the other.  Jefferson said "In questions of power, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution."  They recognized and acted on the fact that any concentration of power is a threat to the liberty of the people.  Their system had at its heart the notion of citizen legislators who would briefly set aside their work, go to Congress for a brief while, and then return to their community.

If Mr. Smith ever went to Washington he’s certainly not there now.  44% of our Congresspeople are millionaires vs 1% of us.  Many of our representatives have been leaders in the very industries we ask them to regulate on our behalf—like Ben Nelson, former insurance executive who played a key role in preventing the simple, obvious and effective solution to healthcare (eliminate the middleman, pocket some of the savings, use the rest of the savings to cover those who have no coverage) from ever being considered.  Former bankers vote for handouts to banks rather than aid to the people hurt by banks’ excesses.  Former defense contractors like Dick Cheney decide that the US military budget needs to be larger than the defense budget of the next 15 largest spending countries combined.  
 
Citizen legislators who return to ‘normal’ lives and jobs don’t exist.  Incumbents win over 90%.  Their campaigns are funded not by the people they represent, but by the corporations they serve and protect.  Here are the top 20 donor companies to the campaign committees of several prominent Congresspeople

Harry Reid

Nancy Pelosi

John Boehner

Mitch McConnell

As you can see, the biggest donors are from the companies and industries that have the most to gain and lose from hot topic legislation.

Do they give money because they think a particular candidate will do a better job to "establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity" or do they give money in order to see a return on their investment?  Does our government work for us, or does it work for the corporations?

Our concept of how government actually works doesn’t square with reality.  We must accept the current reality before we can change it.  

Solutions?
I see two solutions—neither of which would be easy

  1. Restrict congress to a narrow interpretation of Powers of Congress listed in Article 1, section 8 of the US Constitution.  A narrow interpretation would strip from Congress the powers to create winners and losers in the economy and thus make control of Congress uninteresting to moneyed interests.  The other side of this sword would be that Congress could no longer do many things it does that improves the lives of individuals.
  1. Restrict businesses from funding campaigns, PACs and lobbyists.  Corporations are not people.  The do not innately have rights (although this is de facto law today and is being reviewed by the SCOTUS right now)  

The Nature of our Businesses
What do we mean when we say ‘capitalism’?  Most people would agree the US is a capitalist nation and generally agree that is a good thing, but what specifically do we mean?  Is it a Free Market that exhibits Shumpeter’s Creative Destruction, with no built in bias for existing businesses nor protection for the people?  A Regulated Market that protects consumers from the excesses of free markets?  A political-economic system to protect and grow capital?  I argue it is the latter.

Folks like Hayek make a pretty good argument that unfettered markets do the best job of improving the lot of all people.  We can provide counter arguments, but we should acknowledge that folks like Hayek at least have the good of all in mind when they promote their theories and worldview.  Good ol’ Ronnie brought their theory to the market and proved Yogi Bera correct that "In theory there is no difference between theory and practice. In practice there is."
 
Testifying before Congress after the financial meltdown began, Alan Greenspan, the guru of free markets and acolyte of Ayn Rand, admitted that there is a fundamental flaw in free market philosophy.  When someone like that makes such an admission, you have to question whether people who continue to promote unfettered markets have the best interests of all at heart or simply want to make another buck before we wise up.

We often think of captains of industry as people who had a unique skill conceiving and delivering a product or service.  People like that, who gain riches by making a better mousetrap, deserve their riches.  Their riches are the result of their thinking and hard work.  Their companies provide jobs to many and their products and services improve our lives.  Kinda like Hank Rearden in Atlas Shrugged.

That’s a fine theory, but in practice, it’s different—especially once a company grows beyond a few hundred million in revenue.  Publicly traded companies really don’t give half a rat’s ass what they produce.  They have no great passion for their product or service.  Whatever will get the "number for the quarter" is good.  If a publicly traded car company can make more money selling loans than building cars, will they fix their car business or extend their loan business into risky mortgages?  We all know what Hank Rearden would do if he owned the car company.  We also know what an actual, modern corporation (*cough* GM) would do.

My first day of business school (class of ‘83), the professor’s first words were "The last thing a business wants is competition.  Leave your romantic notions at the door."  We spent a lot of time discussing differentiation, monopolistic competition, and building barriers to entry.  One avenue to build barriers to entry is legislative.  

What self respecting capitalist would take a hand-out from the government?  Hank wouldn’t do it that way, but real world businesses do it all the time by working with the government to engineer loop holes in tax laws, rig the letting of contracts, negotiate protective international trade regulations and design bailouts that make "privatized gains; socialized losses" the real name of the game.  When government and business collude, it’s a heads I win; tails you lose world.

There are no Hank Reardens.  Our concept of what businesses are like doesn’t square with reality.  We’ve got to accept that before we can change our reality.

Solutions?  Same as with the solutions for government—separate these Siamese twins.  They can each live separate, smaller, more beneficial and more sustainable lives.

The Nature of our Media

"The basis of our government being the opinion of the people, the very first object should be to keep that right; and were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter. But I should mean that every man should receive those papers and be capable of reading them."  Thomas Jefferson

My how the role of media has changed with its nature.  The nature of media used to be decentralized—every town of any size had more than one newspaper.  More recently, cities tended to have 10 or more local radio stations and 2 or more local TV stations.  There were many news resources, many points of view within the reach of every citizen for little or no cost.  In many cases, they succeeded in delivering useful information to their audience.  ‘Course, they got clobbered when the sharpies who knew how to make the big bucks rolled into town.

Here’s another thing I learned in college (thanks UT Austin)—news programs are a low cost way to aggregate eyeballs for sale to advertisers.  Any actual news delivered to the audience is accidental.  The name of the game is to attract and hold the audience, not inform them.

Today, most cities have one newspaper and the radio and tv stations are owned by regional, national or global conglomerates.  In many cases, the same companies own the newspaper, radio and tv stations.  The number of possible points of view has shrunk.  The fact that the owners are all large corporations means that in most markets the number of points of view is 1—the corporate view.

The purpose of corporate media is to protect corporations from democracy

Oh, they do indeed exist to make a buck—but their ability to make a buck is dependent on the same government intervention as other corporations.  Because democracy is about decentralization—after all, it devolves power to the voter and what could be more decentralized?—it is the enemy of corporations.

The purpose of corporate media is to protect corporations from democracy

Our concept of how media work doesn't square with reality.  We have to accept what is before we can change it.

Solutions?  Reinstate the laws barring ownership of multiple media outlets in a single market.  Bring back the Fairness Doctrine.  Don’t allow the owners of the wires and switches that make up the internet to throttle content.

Conclusion
The first album I bought was "The James Gang Rides Again" with Joe Walsh.  It was 1970.  I was 9.  On that album was a song with the lyrics:

The Captain’s in the chart room
navigatin' on a star.
He can’t tell where we’re going
‘cuz he don’t know where we are.

We and that captain are in the same boat.  We can’t chart a new course until we accept some of the unpleasant realities of our world and recognize where we are.

Disclaimer – please note that I do not attack business in general.  I’m a big fan of business.  Business provides my family with a nice living.  In the way that Adam Smith understood Capitalism, I too am a capitalist.  Today’s global mega-corporations could not exist without partnership with government.  They would be anathema to Adam Smith as they are to me.

Originally posted to Mosquito Pilot on Fri Jan 15, 2010 at 05:45 AM PST.

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