Category Archives: Politics

Political Coalitions

I define people who are basically on my team politically like this. We agree on a basic humanist, consequentialist worldview of wanting to produce the greatest good for the greatest number of people. And we agree that the basic plan for how to accomplish that is to organize politically, take control of the state, and use state power to transform society in a positive way. We agree that what that basically looks like is increasing the size of the welfare state and democratizing decision making in both the public and private sectors.

And that’s it! We might disagree on the details, but if the above describes you then you are my ally in that project. If it doesn’t then we can still totally be in coalitions together, but eventually there’s something serious that we’re going to have to fight about.


Right-Left Progressive-Conservative

People use political labels pretty haphazardly, it is what it is. There’s no real right or wrong definitions, but we can aim for ones that at least cut reality at the joints and illuminate more than they obscure about the people they’re labeling. So here are my definitions:

Right-Left: To be on the right means to be in favor of concentrated wealth and power. To be on the left means to be in favor of dispersing wealth and power widely.

Progressive-Conservative: To be a progressive means to be part of a political movement to make positive change. To be a conservative means to be against whatever it is the current progressive movement wants to do. We can also add “reactionary” to this category, which is actually pretty similar to progressive except the change they want to make involves a reversion to a real or imagined past state of affairs.

Liberal-Authoritarian: To be liberal means to be tolerant and have a “live and let live” attitude. To be an authoritarian means to believe that there are correct and incorrect ways of doing things that need to be enforced.

I would consider myself a left-progressive-liberal. I’d say the modern Democratic Party are mostly centrist conservative liberals, while the modern Republican Party is composed of right-wing reactionary authoritarians. I call the Democrats conservatives because they’re for the most part just trying to defend the gains of past progressive ages rather than make any particular new ones. Even the new policy prescriptions they have are mostly about shoring up systems that are coming apart (healthcare anyone?) rather than embarking on some bold new plan to improve people’s lives.

The American culture wars are pretty much fought based on the liberal-authoritarian axis, on which the country has been steadily moving in the liberal direction for decades. And really that’s for the most part what elections are won and lost on, since those tribal culture war issues are what really seems to get people riled up. Meanwhile we’ve been moving to the right for a few decades despite there not really being much of a popular outcry for doing so because that’s what the right-reactionaries driving the Republican Party really care about.

 


The State of the Economy

After the financial crisis central banks lowered interest rates as far as they could. This has the effect of stimulating more lending, which creates more money, which then gets spent. The idea is that the money will be invested and this should stimulate the economy because that investment will entail employing people, utilizing resources, building, doing, etc. It should put the spare capacity in the economy to work.

The problem is that that’s not what happened with most of that money. A little leaks out into the real economy, but in general there’s no profit in investing in expanding productive capacity, because our whole problem is that demand is too weak. If factories are already operating at half capacity, why invest in building new factories? So instead of being spent on investments that require buying goods and services, it’s been spent on buying assets. It’s spent on real estate, stocks, gold, bitcoin, bonds, etc. This can be a great financial decision for the investors, but buying more of all that stuff doesn’t put any spare capacity in the economy to work, it just raises the price of that asset class.

So now we have gigantic bubbles in every conceivable asset class, but still a lot of spare capacity in the economy. The Fed is raising interest rates because they’re worried about those bubbles, while people who care about the real economy are saying “Are you crazy? You’re reducing the stimulus now when the economy’s still so fragile?” This is a hard decision for the Fed, since there’s no action they can take that won’t make one of those two major problems worse.

Luckily for those of us who don’t work at that Fed, there is a silver bullet we can use to solve this problem. It’s just not anything the Fed has access to. The way to fix things is with fiscal rather than monetary stimulus. Rather than throwing up our hands and saying “How can we possibly get businesses to use this spare capacity?” we just have the government use it directly. This can come in the form of handing out money to people through the welfare state in order to boost both demand and their living standards, or in the form of spending government money on the infinity of badly needed public goods that have gone underfunded for decades.

You might say “But wait! How can we afford all this?” That’s a stupid question! Just kidding. But seriously, the federal government is in charge of money. It owns the literal and metaphorical printing presses. It’s literally not possible for it to be unable to afford things. The only limitation is that printing too much money can cause inflation. Luckily though we have a great tool for combatting inflation: raising interest rates! As you may remember, that’s what the Fed desperately wants to do now even though inflation has remained low, because it’s what’s needed to deflate these crazy asset bubbles.

This has all been about our specific current situation, but it’s also a thesis on a shift we need to make in how we think about government spending. Currently the idea is that the Fed sets interest rates at the sweet spot where it utilizes the economy’s spare capacity without going overboard and causing inflation and bubbles. Government spending is treated as just one more source of demand in the economy among others, and is constrained by the need to borrow money at whatever interest rate the Fed sets. What we need to do is have government spending come first. We spend as much as is needed to make sure that the economy is running at full capacity all the time. And then we use interest rates to control bubbles and inflation without worrying that if rates go high it will result in wasted capacity and the accompanying unemployment and economic distress that comes with it.


Larry Summers wants to know: are you an insider or an outsider?

Larry Summers really likes to ask people whether they want to be outsiders, who can speak the truth but can’t have power, or insiders who can have power as long as they don’t say anything that’s unacceptable to the oligarchy. Who knows how many people he’s asked that question. We only know about the ones that have answered “outsider” so firmly that they then tell the world about the question being asked.

In her book released [2014], Sen. Elizabeth Warren recounted a dinner she had with President Obama’s chief economic adviser, Larry Summers, in April 2009, when Warren was the outspoken chairman of a congressionally appointed panel probing the government’s response to the financial crisis.

Larry leaned back in his chair and offered me some advice. … He teed it up this way: I had a choice. I could be an insider or I could be an outsider. Outsiders can say whatever they want. But people on the inside don’t listen to them. Insiders, however, get lots of access and a chance to push their ideas. People — powerful people — listen to what they have to say. But insiders also understand one unbreakable rule. They don’t criticize other insiders.

I had been warned.

Warren ignored the warning.”

Source: https://www.washingtonpost.com/news/wonk/wp/2014/12/14/elizabeth-warren-is-changing-washington-without-giving-up-her-outside-status/?utm_term=.6808511df256

“[Varoufakis] dramatises his intent throughout the crisis with a telling anecdote. He’s in Washington for a meeting with Larry Summers, the former US treasury secretary and Obama confidant. Summers asks him point blank: do you want to be on the inside or the outside? “Outsiders prioritise their freedom to speak their version of the truth. The price is that they are ignored by the insiders, who make the important decisions,” Summers warns.

Elected politicians have little power; Wall Street and a network of hedge funds, billionaires and media owners have the real power, and the art of being in politics is to recognise this as a fact of life and achieve what you can without disrupting the system. That was the offer. Varoufakis not only rejected it – by describing it in frank detail now, he is arming us against the stupidity of the left’s occasional fantasies that the system built by neoliberalism can somehow bend or compromise to our desire for social justice.”

Source: https://www.theguardian.com/books/2017/may/03/yanis-varoufakis-greece-greatest-political-memoir

 

Summers is right to ask that question; it’s an important one. But where he’s wrong is that he implies that “insider” is a morally acceptable answer. If you’re an insider in the sense he means you’re an ally of the oligarchy and thus an enemy of everyone else. And as Warren has demonstrated, you don’t have to be an insider to succeed in politics anymore. The insiders are a lot richer and better organized, but there are a lot more outsiders. We’re coming.

 


Mainstream Worldviews

Everyone has a worldview. It’s the framework through which you understand the world, and into which you assimilate new knowledge. One worldview can be more accurate than another (modern scientific rationality versus all previous worldviews for example), but it’s also common for two worldviews to each get different things right and wrong (classical Mayans knowing more about astronomy but less about metallurgy than Europeans for example). If everyone you hang around with has a basically similar worldview to yours, it doesn’t really even seem like a worldview at all; it’s just the way the world works.

That’s what has happened to the mainstream media and to the people who get their news exclusively from it. The mainstream media (Network news, CNN, NBC, New York Times, Washington Post, etc.) all reflect the same basic liberal corporate centrist worldview (left neoliberalism). The last few decades have seen the rise of another popular media worldview: the conservative corporate hard-right worldview (right neoliberalism) pushed by Fox News and the rest of the Murdoch media empire. And more recently we have seen the rise of the internet creating opportunities for a lot more media worldviews, primarily the too-racist-for-Fox alt-right worldview and the whole gamut of possibilities to the left of the mainstream that had previously been shut out of the conversation.

To people who still exist purely within the mainstream media worldview this looks like everybody who is exiting that worldview is just going crazy. They’re starting to have beliefs that the mainstream media worldview says are incorrect. It leads them to talk about a “post-truth” world and fret about how we can’t agree on facts anymore. What they’re missing is that there was never an agreement on the facts, just a situation where the media was united around one interpretation. Meanwhile the people exiting that worldview to the new alternatives feel like they’re waking up to the mainstream media’s lies and have now found the truth. To be fair to the exiters, the mainstream media worldview is very flawed. To be fair to the mainstream media, most of the alternative worldviews people are leaving for are at least as flawed, often way more.

We’re going to have to get used to a world where people choose media sources based on agreement with their worldview. Other sources feel like they’re lying to you by reporting based on assumptions you don’t share. People who agree with the mainstream media worldview are bummed that everyone’s no longer forced to hear reporting from their perspective, but the rest of us will be able to hear reporting from a perspective we share.  And that’s not so bad.


New Ecosystem

We’re undergoing a transition in how we get information. It’s going from a world in which it’s possible for elite gatekeepers to directly shape what content people see, with the limitation of ratings and light government regulation, to a world where there’s an information ecosystem where different information sources can rapidly climb to prominence and particular stories can ‘go viral’ based purely on their memetic fitness rather than any particular human effort.

On minus side, this mean’s a lot more misinformation can get out there, both deliberately and accidentally. When there are no gatekeepers all sorts of stuff gets through the gates. On the plus side, true information that the gatekeepers were keeping out also has a much easier time getting out there. So we have a surge in people getting woke and understanding the true situation we find ourselves in, with our society dominated by a political and economic oligarchy that is looking out for their own interests ahead of everyone else’s. And that’s great! But on the other hand we have a surge in all sorts of crazy conspiracy theories and the kinds of intolerance deemed sufficiently extreme for the gatekeepers to not allow it in.

The old world is dying and the new struggles to be born. But once the process is complete and ‘old media’ is just one set of content producers in the information ecosystem, I think we’ll be better off. The traditional media sucks! They’re owned by big corporations or random rich people. Those owners are not going to fund institutions that work against their own interests. That would be crazy. It doesn’t take a conspiracy or anything, you just have to assume they’re not idiots. Sometimes they’ll go as far left as NBC or the New York Times, supporting mainstream Democratic policies, but that’s it. Whatever money is to be made with a TV station catering to an audience farther left than that has so far been left on the table. In contrast, under the information ecology model, something will inevitably emerge to fill that void. If you go to the /r/socialism subreddit, something is going to be posted there, even if it’s just blog posts. Once this all stabilize it should mean that everyone pretty much has access to information sources that come at thing from that person’s same worldview. And that’s fantastic, because it means that we won’t have the massive ideological distortions created by having an all-capitalist owned media. There won’t be any general direction in media bias, since the media directed at people with each viewpoint would just be biasing people towards itself, and they’d all be pointing in different directions depending on what viewpoints there’s demand for.

There are worries about this causing people to end up in information bubbles, only aware of their own viewpoint, but even without such bubbles people change viewpoints so rarely that I’m not sure what harm it could do. And at least this way you’ll presumably be at least aware that you are in just one of many information sub-cultures and that other ones that also think their views are just as valid are out there, rather than living in the mainstream consensus universe as determined by the media gatekeepers. And I think the “information bubble” is a little simplistic anyway. It’s more like we’re all at various points on a landscape and can see the viewpoint of people some distance around us on that landscape. You encounter the views of your friends on social media, the denizens of whatever internet comment boards you frequent, and of course the actual media content you choose to consume. Those will present a range of views that statistically you’ll probably be roughly in the center of, since they’re all from people similar to you at least in that you both ended up at online location X. And of course you’re made aware of the viewpoints of people at more distant parts of the landscape by within group discussion and investigation of those subcultures, obviously with the ability to go look at their content and engage with them directly if desired. Each group bleeds into the other at the edges. We’d all be discussing the same real world events. The ‘bubbles’ would be restrained from diverging too far. And in exchange we get a far more egalitarian and democratic method of information sharing that might let people resist their oppressors. That’s a trade I’m willing to make.


Monetary Policy Thoughts

Monetary policy is supposed to be a balance between unemployment and inflation rates. The higher interest rates are, the lower inflation and the higher unemployment. The lower interest rates are, the higher inflation and the lower unemployment. Central bankers then are supposed to find a nice middle ground. Farther left ones like the idea of targeting full employment and accepting whatever inflation it takes to produce that. Farther right ones like the idea of targeting some inflation rate (sometimes 0 for the dumber ones) and accepting whatever unemployment it takes to hit that inflation rate.

However, this isn’t what modern monetary policy debates look like. Currently we have moderate unemployment and low inflation. The response by the Fed has been to raise rates – theoretically increasing unemployment in order to drive inflation even lower. It seems crazy. But it’s less so when you remember one crucial additional factor: Central banks are run by bankers, and the higher interest rates are, the better it is for bank profitability. So there is always a major interest group within a central bank pushing for higher interest rates no matter what the macroeconomic situation, just because that’s good for their former/current/future employers, and all their friends and colleagues who work in the financial industry.

(There’s also a point to be made about how the tradeoff is really more between economic growth and inflation rather than between unemployment and inflation, with reduced unemployment just being a factor of improved growth, but that’s less relevant to this discussion.)

So all over the world we have central banks that are desperate to raise interest rates whenever it is remotely economically justifiable to do so. This gives us a significant bias in favor of tight money (high interest rate producing) policies. Anyone who thinks economic growth is a good idea should get angry about monetary policy and demand changes in the Fed’s governing structure. Rather than having the Fed’s leadership be composed of bankers, people who have ever worked at a bank should be banned from working at the Fed. A non-partisan council of academics and bureaucrats tasked with setting interest rates to maximize overall economic growth could do MUCH better than the current setup.