E.U. and U.S. Counterparts Met: A Basis for Comparison

President Barak Obama of the U.S., and Herman Van Rompuy and José Barroso of the E.U. held a news conference following the EU-US Summit at Lisbon in 2010. Even though the E.U. and U.S. are both empire-scale federal unions of states, and thus are equivalent in terms of political type or genre, they differ in terms of how their respective federal offices are arranged and constituted. This does not, however, nullify the basis of comparison.

For example, the E.U. does not have one definitive president; rather, the Commission has a president, as does the European Council. Interestingly, the alternative of having more than one president (e.g., a presidential council) was debated in the U.S. Constitutional Convention in 1787. Yet this difference does not mean that the E.U. and U.S. are not comparable. In fact, I submit that each union can be strengthened by such a comparison. 

The picture below also shows the full presidential equivalence, while showing that the EU is not structured at the federal level as a replica of the US. 

The placement of the respective flags is interesting because the arrangement was, at least as of 2019, only done for countries. By implication, I submit, the EU flag, rather than the flag of an EU state (e.g., France) should be set with the US flag as a backdrop. At the very least, the EU flag and the flag of the state of France should both be present, for the sovereignty of the state of France is partial, just as is that of the state of Texas. Both states, in other words, are in federal systems in which governmental sovereignty is split between the federal and state polities.

Besides in how they are arranged, the flags themselves are also visually equivalent. Both contain stars, which represent semi-sovereign states, or polities, which are on the scale of the early-modern nation-state. The early US flag is even more equivalent, for the number of stars is roughly the same. 

The E.U. flag was designed by Arsène Heitz and Paul Lévy for the Council of Europe in 1955. The EC and the E.U. would subsequently adopt the flag as their own. The "Betsy Ross" U.S. flag was in use by 1777. Regarding the number of stars, whereas the 13 on the U.S. flag represent the original 13 states in the U.S. alliance, the 12 stars on the E.U. flag were chosen when the Council of Europe had 15 members (10 of which were founding members). Even so, the similarity between the two flags is striking, especially as both the U.S. and E.U. have added states since their respective foundings. It would seem, in other words, that both unions have followed the same evolution, which is another signifier that the unions may be in the same political genre. 
Lastly, the "EU and US" sign in the news-conference photo above implies that the two unions are equivalent. Lest it be objected, at least as of 2019, that the EU is not a political union, I submit that having a parliament, executive (the Commission), and supreme court (the ECJ) renders the federal level not only political, but also a government. The denial (in the E.U.) and ignorance (in the U.S.) on this point boggles the mind. Such is the force of ideology on cognition and perception.

The picture below also shows the full presidential equivalence, while showing that the EU is not structured at the federal level as a replica of the US. The placement of the respective flags is interesting because the arrangement was, at least as of 2019, only done for countries. By implication, I submit, the EU flag, rather than the flag of an EU state (e.g., France) should be set with the US flag as a backdrop. At the very least, the EU flag and the flag of the state of France should both be present, for the sovereignty of the state of France is partial, just as is that of the state of Texas. Both states, in other words, are in federal systems in which governmental sovereignty is split between the federal and state polities. 

Interestingly, the photo below attests that U.S. flag flew next to the E.U. flag in front of an E.U. building in Brussels in 2012. Perhaps knowledge of the proper equivalence existed within the E.U.'s federal government, while still noticeably absent at the state level, including the residents thereof. 

Even though the E.U.'s federal level has been criticized for being populated by technocratic officials, I submit that the nature of the E.U.'s laws (e.g., directives, regulations, etc) are such whereas the officials have tended to have a good understanding of the E.U. as a political system meant in part to act as an international counter to U.S. power. 

For more on this topic, please see: Essays on Two Federal Empires: Comparing the E.U. and U.S., available at Amazon.

When Platitudes Undermine Real Change: US President Obama at the U.N.

U.S. President Obama’s 2010 speech at the UN’s annual opening lacked tangible proposals.  For example, he urged progress on the Middle East peace talks, but proffered no proposal.  He said Africa could be prosperous agriculturally, but gave no proposal for how.  He claimed that corruption in governments of developing countries is a problem, but offered no solution.  Pointing to corruption in general diffuses responsibility so talking about it does not shame anyone into making hard choices. Such platitudes belied the president's claim to being an advocate of real change. 
The substance of the platitudes rested on the then-current paradigm of international political economy rather than moved over onto an alternative. For example, he could have proposed a Middle East Federation or trading agreement. He could also have announced that the U.S. would no longer give any foreign aid to A.U. states that are riveted with corruption. He could have urged African leaders to cede more governmental sovereignty to the African Union, which in turn could have been given the power to act as a check on government corruption at the state level.
Additionally, Obama could have gone beyond citing his efforts to reduce the risk of nuclear proliferation to announce that the U.S. would join the ten countries that have created a movement with the goal of eliminating nuclear weapons completely. Meeting on the sidelines of the UN General Assembly in New York, the ten countries launched the new initiative to work towards a world without nuclear weapons. Foreign ministers, led by Japan and Australia, hoped to bring new life to efforts for nonproliferation and disarmament. Their mission statement said: “The only guarantee against the use and threat of nuclear weapons is their total elimination.”[1] This would indeed be real change.  In contrast, Obama said only that his goal was securing loose nuclear material around the world in four years. 

In short, real change goes beyond politics as usual and platitudes. It goes beyond incrementalism to proffer systemic change. Refusing to challenge the status quo intellectually or take on its power not only restricts a leader's ability to lead, but also eliminates real change as even an option. 

See: The Essence of Leadership: A Cross-Cultural Comparison, by Skip Worden, Ph.D. Available at Amazon.

1. Catherine Bolsover, “Germany Joins New International Initiative for Nuclear Disarmament,” Deutsche Welle, September 23, 2010.

President Obama Took Care of Wall Street below a Public Persona of Reform

In April, 2010, President Obama gave a speech in New York City to counter what he called “the furious efforts of industry lobbyists” geared to weakening or stopping the new financial regulations that Obama claimed would be needed to stave off a second Great Depression.[1]  It is telling that the banks that had contributed to the financial crisis of 2008 were trying to diminish or block any new regulation. The very legitimacy of industry calls for deregulation in the wake of a market failure caused in part by the industry flies in the face of the rationale for regulation. In short, the rationale for government regulation has to do with market failures, which includes fraud and over-zealous profit-taking at the expense of the public good. The root of the rationale is the difference between the interests of an organization and society (i.e., the public good). 

After the financial crisis of 2008, the U.S. President wanted more consumer protections, limits on the size of banks and the risks they could take, reforms on executive compensation, and greater transparency for controversial financial securities known as derivatives.  He maintained that each of these safeguards must be in any bill that he would sign. In giving the speech with some of the banking titans in the audience, the President wanted to confront the financial industry more directly through a sharp speech. After having castigated the bankers' “failure of responsibility” in recent years, he called on them to stop resisting tighter regulation through the army of lobbyists staked out then on Capitol Hill. The president’s address at Cooper Union in Lower Manhattan circled back to another speech he had given at the same location in March of 2008 warning of financial manipulation, market bubbles and the concentration of economic power.

Analysis:

At the time of his speech, the President was actually supporting the bills coming out of Congress. These bills would do nothing to forestall or minimize market bubbles and reduce the concentration of economic power.  The bills would not even limit or reduce bank size; instead, higher reserve requirements for the biggest banks was presumed a sufficient incentive for those banks to willing reduce their sizes. Although this approach, which would become law, incorporated the market mechanism (regarding financial disincentives), the assumption that empire-building Wall Street titans would reverse the "business logic" where in the opposite of growth is bankruptcy is very naive. It is remarkable that the president considered this approach as satisfying his requirement that the bill reaching his desk must include something limiting the size of financial institutions (especially when the systemic risk of one big bank failing and taking down the entire financial system had recently been lived through). Paul Volker, Chairman of the Federal Reserve under Reagan, was urging a decrease in the sizes of the five largest banks. 

I submit that Goldman Sachs' $1 million contribution to Obama's presidential campaign may have had something to do with it, as did Wall Street lobbying in Congress. On the eve of the President’s speech, Obama’s chief of staff had met behind closed doors with representatives of Wall Street firms. Fox News reported that Obama's message was the following: we’ve got to trash you in public, but know that we will take care of you in private.  While Fox News was at the time certainly no friend of the President, the account would explain why the President would eventually sign the Dodd-Frank Act of 2010, which except for staggered reserve requirements and a consumer-protection bureau is pretty kind to Wall Street.  

 

Recalling President Andrew Jackson, who successfully took on the bank of the U.S. by refusing to fund it in 1832, and Theodore Roosevelt, who supported the Sherman Anti-trust Act in 1911, we could certainly view Obama as not having been willing to take on the guys who not only had contributed to his 2008 campaign, but could be useful again in 2012 for Obama's reelection.  

1.  Peter Baker, "Obama Issues Sharp Call for Reforms on Wall Street," The New York Times, April 22, 2010.

On the Economic Justification of American Society and Federalism: The Oxymoron of Congress Mapping the Human Brain

In his 2013 State of the Union Address, President Obama cited brain research as an example of how the government could and in fact should literally “invest in the best ideas.”[1] He cited the $140 return to the economy from every dollar that had been invested to map the human genome, and added that funding the Brain Activity Map would be a job-creating investment in science and innovation. In terms of comparative economic advantage, he said, enlarging the “knowledge economy” would be a good strategy for maintaining a formidable standard of living. As laudatory as more knowledge of the human brain is, Obama's perspective suffers from economic reductionism and a lack of political basis.
Economic reductionism means that everything reduces finally to its economic impact. Mapping the genome may have good economic returns, but the impact in terms of human fulfillment is arguably much more beneficial and thus important. Finding the gene that causes baldness, for instance, would surely have an economic benefit for some, but the non-economic benefits to bald men would be much more important. More importantly, to the extent that mapping the genome has led to new treatments for illness, especially those that are fatal, the primary benefits have surely not been economic in nature. An old person who can live ten more years rather than one does not leap for joy because of the the additional retirement income. Because this is obvious, Obama's economic basis can now be seen as artificial or skewed at best even it it was politically and economically prudent for him to point to economic returns as they would have been particularly of interest to the companies that made campaign and other, less direct, economic contributions to the Wall Street president. Unfortunately, people reading or hearing his speech could have gotten the idea that the reduction to the economic effect is fitting rather than distorting. A government, after all, should look after the public good, which is not only economic. Of course, it has been by lip service to the general welfare that U.S. presidents have tried to justify federal spending in virtually any area, hence robbing the state governments of more and more sovereignty. 
That the federal government had any constitutional basis to be funding a map of the brain's activity is a question the federal president seems not to have considered. To be sure, balancing spending for the general welfare with the enumerated (i.e., limited) powers of the federal government is a difficult task unless the general-welfare spending is assumed to pertain only to the enumerated (i.e., listed) powers of that government. It makes no sense to say that government's powers are limited and yet spending can pertain to any domain, even preempting state spending. So by logic alone, it stands to reason that the spending clause must have been intended to furnish Congress with the authority to fund its enumerated powers.
Put another way for the faint of heart, if a positive economic return to the economy is the litmus test, then the federal government could intercede in so many areas that the state governments could eventually become little more than local governments. The crucial political benefit of federalism, wherein the state governments have the power to act as a check against encroaching or tyrannical federal power so the only check is not on the state governments by the federal government, is lost if federal lawmakers and the executive can amass virtually unlimited power for the U.S. Government (and themselves in the process!) especially if done at the expense of the states. 

A Congressional rendering of how the human brain might be mapped.      Source; nytimes.

Admittedly, a person could look at the U.S. Constitution and point out the spending clause, whereby the Congress has the authority to spend funds “for the general welfare.” in itself, the clause contains no limitation, and the general welfare is indeed wide in scope. Scientific advancement, it could be argued, is surely in line with advancing the general welfare of the people. Virtually any purpose, even those purposes in which the effect on the general welfare is merely a byproduct, could fit within the clause. To restrict the clause could foreseeably hold back the general welfare from what it would otherwise be. 
Turning to the enumerated powers of Congress, the commercial implications from mapping the brain's activity might seem to fit within the interstate commerce clause of the U.S. Constitution. After all, the U.S. Supreme Court had ruled in Wickard v. Filmore (1942) that even a farmer in Iowa who grows wheat for his family's own consumption can be subject to regulation. Even if his activity "be local and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce and this irrespective of whether such effect is what might at some earlier time have been defined as 'direct' or 'indirect."[2] The majority opinion reasons that the harvests of wheat for private consumption, if aggregated, would have a significant effect on the interstate wheat commerce. Even an indirect effect on the interstate wheat market can justify even the growing of wheat for private consumption being subject to the interstate commerce clause, and thus federal power. So it is no accident that the federal executive publicly justified the federal funding to map the brain's activity by characterizing such a map as "a job-creating investment in science and innovation." Obama may have engaged in warped economic reductionism in order to gain more power for his government. He and the federal court before him both distorted logic for the sake of additional power going to the federal government.
The institutional and personal conflicts of interest should be obvious. Since that ruling, the reach of the commerce clause has expanded. Even something that is not itself commerce can be federally regulated as commerce. This flawed logic should be enough of a red-flag to tell us that something went deeply wrong in the federal court's reasoning where federal power was at stake or could be expanded. 
In regard to funding the mapping of the brain's activity, commerce of the completed map could indeed extend beyond state lines (i.e., be interstate commerce), but to argue that the regulating of interstate commerce extends to investing in manufacturing of the product itself conflates spending with regulating, which is to set rules. 
President Obama could be challenged for his presumption that the federal government is the definitive level of government for virtually any matter of public policy to be enacted into law. He could have quoted from Alexander Hamilton, a delegate to the Constitutional Convention and the first U.S. Treasury Secretary,  who had wanted the states to be mere districts implementing federal policy. Of course, he also wanted the U.S. president to be in office for life.
Before Obama was the federal executive, I asked Sandra Day O’Conner, a former justice of the U.S. Supreme Court, why the Court had allowed the Congress to encroach so onto state matters. "It takes a majority," she said (meaning of justices). Then she observed that Congress was “acting like a state legislature.” This remarkable insight would prompt me years later to wonder whether Obama himself was conflating the federal and state levels. He may not have fully realized the distinctiveness of federal government on the empire scale from governance on the state, or kingdom, level. Whereas an empire-scale government of a federation must take into account differences in culture, political and moral ideology, economy, and even religion that exist from state to state, a state government need not as a state can be homogeneous rather than diverse within. The British, who had once had an empire to manage, suppose their state in the E.U. is diverse. I submit that the E.U. itself is much more diverse from state to state, and so taking into account such differences is an appreciable aspect of E.U. governance but not of that of a state, even the United Kingdom (or California in the U.S.). Yes, Virginia, such a comparison is valid.
I submit that President Obama did not sufficiently heed the vital differences between the federal and the state governments. Nor have majorities of justices sitting on the U.S. Supreme Court. Viewing things from the perspective of the federal government, and even having its interests at heart, it is possible to interpret general welfare and the commerce clause so broadly as to warp logic and yet not even notice this or the eventual cost (to use an economic term!) to the Union itself (i.e., impairing its federal system). Economic reductionism can be placed in service, resulting in bloated federal power and a warping of priorities (i.e., financial as the definitive litmus test for everything, including the public good). Of course, big business feels right at home in such a society--societal norms and values reflective of those of business. Meanwhile, the warped system feeds on itself, without being noticed and becoming even more warped in the process. For all of the reliance on the general welfare, who exactly is looking out for it as regards the impact on it from the federal system of government and the economic reductionism? 

See related: Institutional Conflicts of Interest, Essays on Two Federal Empires, and British Colonies Forge an American Empire, available at Amazon.

1. John Markoff, “Obama Seeking to Boost Study of Human Brain,” The New York Times, February 17, 2013.
2. Wickard, 317 U.S. at 125.

Beyond Collectivism and Individualism: Freedom from Fear

In his speech on April 13, 2011 on reducing the U.S. Government deficits, President Obama identified two strains that had run through the country’s political history and thus informed the American political culture. “More than citizens of any other country” he said, “we are rugged individualists, a self-reliant people with a healthy skepticism of too much government. But there has always been another thread running throughout our history – a belief that we are all connected; and that there are some things we can only do together, as a nation.  We believe, in the words of our first Republican president, Abraham Lincoln, that through government, we should do together what we cannot do as well for ourselves.”[1]  These two strains can be identified as individualism and collectivism, respectively. I contend that collectivism enables both individual and collective security. Individual security is oriented to a person’s survival and collective security is exemplified by national defense. 

In his speech, the president explicitly placed individual security within the collectivist strain. “Part of this American belief that we are all connected also expresses itself in a conviction that each one of us deserves some basic measure of security.  We recognize that no matter how responsibly we live our lives, hard times or bad luck, a crippling illness or a layoff, may strike any one of us.  ‘There but for the grace of God go I,’ we say to ourselves, and so we contribute to programs like Medicare and Social Security, which guarantee us health care and a measure of basic income after a lifetime of hard work; unemployment insurance, which protects us against unexpected job loss; and Medicaid, which provides care for millions of seniors in nursing homes, poor children, and those with disabilities.”  That is, limits to rugged individualism exist, whether in the state of nature or in an interdependent economy, and collectivized programs can bridge the gap on an individualized basis such that individuals can continue to enjoy liberty. The individualist/collectivist dichotomy is thus not so clearly dichotomist.

According to Obama, societal connectedness with others, something limited to the family or clan in the state of nature, implies the societal duty of individuals with economic surplus to contribute to the survival needs of other individuals, especially those who cannot fend for themselves. Individuals pay taxes and individuals receive sustenance benefits—the collectivism seems in actuality to mean systemic.

I have noticed that rich Europeans tend to acknowledge both that they too may someday be in need of such benefits, and that, under the principle of solidarity, a duty exists to pay higher taxes than otherwise so other people may survive rather than perish. As the American president pointed out in his speech, hard luck can befall each of us; no one is immune from calamity and ruin. Europeans seem to get this; American’s don’t.

Europeans also seem to recognize a basic psychological ease of mind exists in knowing that even in the worst-case scenario, a safety net exists. Even if a rich or middle-income American never needs to draw on Social Security and Medicare in retirement, whether due to age or disability/illness, the psychological security afforded by this recognition through life is surely worth something to the individual. Such a person (i.e., with economic surplus year to year) can justify on self-interest alone paying more in taxes to feel even this subtle peace-of-mind (i.e, individual security) through life. In other words, the narrow breed of self-interest (i.e., selfishness) that exists in American culture as a common trait among individuals is not even in the individual’s own interest. Such individualism is thus faulty.

I have not come across many rich Americans who recognize that they too may need such services (ignoring the stock market crashes of 1873, 1929 and others); such people thus view sustenance-oriented taxes as paying for lazy people to play or do drugs. Should such people therefore die? As disgusted as I am with the American inner-city “ghetto” mentality that potential employers justifiably eschew, I believe that to say people with such entrenched mentalities should therefore die for want of sustenance violates human rights, which are not conditional. Too many Americans may be guilty of an entrenched selfishness whose greed knows no bounds even at high levels of wealth. The selfishness that sees narrowly only that earning or amassing more wealth is possible at any level is utterly blind to the foundational peace of mind that comes with having confidence that a safety net even for oneself exists.

Together, callousness toward others less fortunate and selfishness concerning wealth are, I submit, just as ugly as a “fuck society, the rules don’t apply to me” ghetto mentality. A bad odor surrounds both even if some noses are immune to their own smell. In contrast, imagine a society in which the fear stemming from a recognition that survival itself is conditional even out of the state of nature, in “advanced” societies, is absent. The psychological effects even from the removal of such a subtle, subterranean fear, can be significant. My dad used to refer to “quality of life” as being an important attribute of reaching an old age. Yet the importance of obviating a sustenance-conditional fear in a person’s quality of life even when the quality is otherwise good tends to be missed by most Americans in their prime. The Titanic can’t sink!

---

[1] Barak Obama, “Text of Obama Speech on Deficit,” The Wall Street Journal, April 13, 2011.

President Obama's Proposal to Rescue States: Unattended Problems in American Federalism and Human Sustenance

In 2011, President Obama proposed "to ride to the rescue of states" that had borrowed billions of dollars from the federal government to continue to pay unemployment benefits during the economic downturn. His plan was to "give the states a two-year breather before automatic tax increases would hit employers, and before states would have to start paying interest on the loans." Many of the states had begun the recession with "too little money in their unemployment trust funds'" Those states "quickly ran through what little they had as unemployment rose and remained stubbornly high month after month. With their own trust funds depleted, 30 states borrowed $42 billion from the federal government to continue paying unemployment benefits." These states were facing an estimated $1.3 billion in interest payments to Washington due in the fall of 2011. The President’s proposal also included raising the minimum taxable wage base from $7,000 to $15,000 in 2014. "The rate of the federal portion of the unemployment taxes would then be lowered, so the proposal would not raise federal taxes on states that do not owe the federal government money. But it would speed the rate at which states that do owe money repay the federal government, and allow states to collect more unemployment taxes to rebuild their trust funds if they do not lower their tax rates." By February, 2011, eighteen states had already raised their minimum taxable wage base to $15,000 or more, according to the National Association of State Workforce Agencies. Iris Lav, an adviser at the Center on Budget and Policy Priorities, said that the unemployment system was “a constellation of problems" that needed to be solved." She added that the near-term problem was the economy, and "both the interest payments and the principal repayments are [were] cutting into employers, and it [made] great sense to postpone them." The larger question was how to "get states to solvency.”[1]

Analysis of the proposal:

The proposal itself makes sense from the standpoint of getting thirty states out of a tight fix at the time. The debate on whether taxes should go up in 2011 or 2014 was less important than attention to the larger structural fault-lines, which are only hinted at in the President's proposal to ease up on States in debt at the time due to their participation in the unemployment compensation system. To be sure, it is important to note that having extended the length of unemployment-compensation's term to cover the length of the recession following the financial crisis of 2008 required either higher taxes or more debt. Both Reagan's and (George W) Bush's tax cuts had not paid for themselves, so a tax cut, especially during the severe recession, would not have covered the bill. What is good for people and companies facing high tax bills is not necessarily in the public good, and thus good public policy. Even so, I want to stress the larger structural fault-lines that are implicit in the President's proposal, for subterranean tensions rarely reach the surface of a society's consciousness. 

First, under the proposal, the "rescue" was to be limited to the states' respective debt from paying unemployment compensation; neither the Federal Reserve nor the U.S. Government would have been able to come to the rescue of the states concerning their entire deficits and debt. In fact, due to the "crowding out" tax effect, the more that the U.S. Government takes in, the less the state governments can politically raise taxes to cover their respective deficits and debts. Moreover, implicit in the notion of coming to the rescue of is the dependence or lower position of the rescued. In a viable federal system, neither the federal government nor state governments is subservient to the other, for otherwise both could not serve in the systematic role as a check on power. 
Perhaps the "cooperation," or intermixing, of the two government systems (that of the states and that of the federation) in the unemployment system is problematic because it gives the U.S. Government a way to dominate the states. According to Jacobs and Karst, “It is the preservation of the balance between the central authority and the constituent states that is the essence of federalism.” Yet, “[i]n the American federal structure the central authority is stronger."[2] Rescuing thirty states attests to the overweening power of the federal head, and thus the imbalance that is so problematic in the long term to a federal system of checks and balances.[3] 
Ken Wheare claimed in his text, Federal Government, that maintaining at least one autonomous domain for the states is sufficient for a viable federal system of dual-sovereignty. I disagree; a state with one power and otherwise "surrounded" by a federal government with many is not de facto semi-sovereign even if so de jure. In his text, Wheare's statement is utterly inconsistent with his other contention that the two systems of government in a federal system must be able to act as a check on each other. Balance is simply not possible if the state governments have only one or even a few areas of sovereignty whereas the federal government has many and can even pre-empt states from legislating in an area in which the federal legislature has no intent to play an active role legislatively!
To the extent that President Obama's proposal was debated in terms of rescuing the thirty states and whether to raise taxes in 2011 or 2014, the discourse failed the opportunity to include the broader questions pertaining to what is necessary to preserve the American federal system; the superficial debate meant blindly sitting by once again while the political consolidation of a diverse continent proceeded full throttle ahead to a "one size fits all" federation.  The building pressure from the unaccommodated natural diversities would go on, likely to explode one day. 

Second, the fitness of the unemployment-compensation system itself, being limited to helping the unemployed for discreet periods often shorter than a recession, is not touched on in the proposal. For instance, the X-weeks limit of compensation as the program's default could have been addressed, as it treats "convenient" things like food, rent and utilities as though they were optional commodities that could be skipped after the Xth week on unemployment-compensation. In short, the matter of necessities being conditional warranted debate because of the underlying assumption that the very survival of a human being is (or should be) conditional. Doubtless it is in Hobbes' state of nature, but even he accepts a right of self-preservation even under a Leviathan. In other words, the natural urge to preserve oneself is not conditional, so a conditional government program covering basics is not natural or in sync with human beings.  
Relying exclusively on business to bring an economy to full employment is problematic in that that goal has rarely been achieved anywhere without government to pick up the slack. From the standpoint of survival as a human right, laissez-faire economics is thus insufficient. To be sure, the recognition of survival as a human right, as is the case in the E.U., requires higher taxes than are necessary in simply treating survival as a conditional matter. This broader debate and thus the broader fault-line are typically ignored as Americans debate incremental or temporary changes in legislative or executive proposals bearing on public policy.

1. Michael Cooper and Sheryl Stolberg, "Obama Plans to Rescue States with Debt Burdens," The New York Times, February 8, 2011.
2. Jacobs, Francis G. and Kenneth L. Karst, “The 'Federal' Legal Order: The U.S.A. And Europe Compared A Juridical Perspective,” in Integration Through Law: Europe and the American Federal Experience, Mauro Cappelletti, Monica Seccombe, and Joseph Weiler, eds., Vol. 1, Methods, Tools and Institutions. Bk. 1, “A Political, Legal and Economic Overview” (Berlin: Walter de Gruyter, 1986), pp. 169-244, p. 171.
3. Skip Worden, Essays on Two Federal Systems: Comparing the E.U. and U.S., and American and European Federalism: A Critique of Rick Perry's "Fed Up!" 

Public Access to the Public Domain Increasingly Privatized for Profit

To Aaron Swartz, the subject of the documentary, The Internet’s Own Boy (2014), the major concern in his day regarding the internet was not the ability of a person to create a blog or use social media; rather, the problem was in the trend of the power of the gate-keepers, who tell you were on the internet you want to go, concentrating. In other words, the issue concerned what commands our attention. More specifically, who gets access to the ways people find things on the internet. “Now everyone has a license to speak; it’s a question of who gets heard,” he said.  Although he was a computer wiz, he also had political aspirations; both of which were on display as he lobbied against the Stop Online Piracy Act (SOPA), which was introduced in Congress in October of 2011. Unfortunately, the combination of his computer and political skills got the attention of the FBI, which engaged in a relentless pursuit of him until, under the pressure, he committed suicide at the age of 26. His short life was one of idealism that should not have been squashed by an unstoppable criminal-justice system, especially when influenced by political pressure from corporations and politicians. Lest the overzealousness of law enforcement obscure a vision of Aaron’s idealism, it can be viewed as public access being restored to the public domain in terms of the internet.

The full essay is at "The Internet's Own Boy."

Second-Term Inaugural Addresses of American Presidents: Of Transformational or Static Leadership?

According to a piece in the National Review, “George Washington might have had the right idea. Second inaugural addresses should be short and to the point. Of course, speaking only 135 words as Washington did in 1793 might be a little severe.”[1] Consider how short, and (yet?) so momentous Lincoln's Gettysburg Address was. The challenge for second-term-presidents, whether Barack Obama or the sixteen two-term presidents before him, is “how to make a second inaugural address sound fresh, meaningful and forward-looking." Almost all of Obama’s predecessors failed at this. Only Abraham Lincoln and Franklin D. Roosevelt made history with their addresses. One stirred a nation riven by civil war; the other inspired a country roiled by a deep depression. All but forgotten are the 14 other addresses, their words having been unable to survive the test of time. Even those presidents famed for their past oratory fell short.”[2] This is a particularly interesting observation: surviving the test of time being the decisive criterion. Even a president whose silver tongue mesmerizes a people of his or her time may not deliver ideas that survive beyond being a cultural artifact of the president’s own time. What of an address that is quite meaningful in its immediate time yet does not pass the test of time so as to be recognized as a classic? 

The full essay is at "Inaugural Addresses: Of Leaders?"

1. George E. Condon, Jr., “The Second-Term Inaugural Jinx,” National Journal, January 20, 2013.

2. Ibid.

The 2012 U.S. Presidential Election: Fueled by Leadership or Money?

The 2012 U.S. presidential election was the first in which neither of the major-party candidates participated in the campaign-matching system that imposes campaign spending limits in return for federal financing. It was also the first presidential election since the Citizens United case in 2010. That U.S. Supreme Court ruling was a significant factor in the election because corporations and unions could dip into their respective treasuries directly, rather than only through employee or member contributions, spend an unlimited amount on political ads by making donations to “social welfare” organizations. Without disclosing their donor lists, these non-profit organizations could create political ads that in turn could favor or criticize a particular candidate, albeit with no formal approval from the favored candidate. Faced with formidable super PACs pumping some $800 million or more in favor of Mitt Romney, Obama’s money-machine went into high-gear in a sort of “rich man’s” arms-race. Some rich donors had spent millions of dollars to push the massive ship of state a discernible distance in their direction. Hardly anyone expected that the contending high monies would virtually cancel each other out. Hardly anyone thought the Obama campaign’s scientifically-based “ground game” oriented to getting new voters registered would trump Romney’s financial advantage. To be sure, Wall Street was also behind Obama; Goldman Sachs had donated $1 million in 2008, and Obama in turn gave the big banks federal money (TARP) without strings, including on bonuses (which the bankers abused).

Subtly missing in the 2012 presidential election season among all the financial fire-power and Obama’s grass-roots operation and even all the presidential “debates” were ideas and a sustained societal discussion of a few basic principles of political economy and governance. The result, in spite of all the money, time and effort, was a continuance of the political status-quo because few minds were changed in the process. If ideas and rational argument are not absolutely required for a basic shift in a body politic worth the name vision, at least they provide for a basis for leadership and real change.  

Unfortunately, The New York Times reported afterwards that “the overall cost of the campaign rose accordingly, with all candidates for federal office, their parties and their supportive ‘super PACs’ spending more than $6 billion combined.” The grand result for all that money was that the U.S. House remained in Republican hands, the U.S. Senate continued with a slim Democratic majority, and the Democrats held the White House. Even the deal-makers—the major players—notably John Boehner, Nancy Pelosi, Harry Reid, Mitch McConnell, and Barak Obama—remained in place. The difficulty they had had as a group in coming to agreement on major policy items before the election was essentially unchanged.

On Thursday, November 8^tth The New York Times summed up the previous year and a half as follows: “After $6 billion, two dozen presidential primary election days, a pair of national conventions, four general election debates, hundreds of Congressional contests and more television advertisements than anyone would ever want to watch, the two major political parties in America essentially fought to a standstill. When all the shouting was done, the American people on Tuesday more or less ratified the status quo that existed at the start of the day: they returned President Obama to the White House for another four years, reaffirmed Republican control of the House and kept the Senate in Democratic hands. As of Wednesday, the margins in the House and the Senate had each changed by just two or three seats.” For all the money, time and effort spent kicking up dirt and picking fights, when the dust settled it was clear that the American electorate had not moved much at all.

It is not that the American electorate intentionally voted for continued divided government or gridlock. Rather, the American body politic contained voters of diametrically-opposed political, economic and social ideologies. In spite of the length of the campaign “season,” neither camp had budged by election-day. The resulting continuance of the status quo meant the continuance of the political constellation in Washington that had led to gridlock. Besides gridlock being more generally etched into the very design of the federal lawmaking apparatus in part to check power as well as unwelcome encroachments of the General Government on to the turf of the state governments, the various stalemates on the Hill in 2011 and 2012 were a manifestation, or symptom, of where the People as an aggregate stood then politically—that is, divided and even polarized ideologically. As a result of the stark ideological differences between citizens and the multiple points of access available in the U.S. Government, both major parties had sufficient electoral support and accessibility to the federal law-making machinery to grind policy-making and legislative activity to a halt on major problems desperately in need of solutions.

A story in The New York Times on the day after the election had as a headline, “Electorate Reverts to a Familiar Divide as Obama’s Support Narrows.” He “garnered just 50 percent of the popular vote, three percentage points lower than in 2008, in a sign of just how divided” the electorate was “over his leadership.” In spite of Obama having lost some of his base, the mere two-percentage-point difference in the popular vote between the two major candidates meant that among the electorate neither “side” had budged much. To find a “verdict” on the president’s first term beyond the vested opinions of the two bases, one must look to how the independents. Even there, the “verdict” was muted.

Referring to the independents, the New York Times reported that the vote was “very close.” In some swing states, including Ohio and Virginia, Romney received a slight majority of such voters (53 and 54 percent, respectively), while Obama received similar majorities in a few others (Iowa and New Hampshire). However, Obama received 45 percent of the independents over all (Romney got 50 percent), and in 2008 Obama had received 52 percent. This means that Obama lost some of the independents he had had in 2008. As a “verdict” of the relatively neutral “jury” segment within the electorate, the loss of 8 percent suggests something less than a vindication for the president.

Moreover, that Obama received 50% of the popular vote over all while Romney got 48% suggests that the contest ended unchanged as a virtual draw. Put another way, only about 3 million Americans out of 310 million residents in the U.S. separated the two candidates in the popular vote. About 1% of the entire population hardly constitutes a mandate, as if “the American people” has swung around en mass to support the incumbent after a long and hard-fought campaign.

To be sure, some general movement can be discerned, as most counties had shifted in the Democratic direction in 2008 to vote for Obama only to shift back in a Republican direction in 2012. It could be said that the country had returned to its native center-right position. That Obama’s narrower base came out in sufficient force to counter the general shift in a Republican direction in most counties and a slight shift away by some independents accounts for his slight majority in the popular vote (and his wins in almost all of the swing states). Even so, such wan movement does not constitute the sort that is associated with an idea or mandate. Put another way, even the shift toward “Obamania” of 2008 was short-lived—the ideational shortfall rendering the “movement” as akin to a short-lived energy spirt from cotton-candy rather than new muscle from rich protein.

Accordingly, “(t)he bottom-line scorecard [from the 2012 federal election] left Washington as divided as ever,” according to the Times, “with no resolution of most of the fundamental issues at stake. The profound debate that has raged over the size and role of government, the balance between stimulus spending and austerity and the proper level of taxation has not been settled in the least.” The ideas had not changed because the hyperactive campaigns had been relatively bereft of new ones or even serious discussion of the central principles.

For all of the money, ads, and “debates,” one might say that talking points rather than novel arguments or ideas took center-stage during the long campaign “season.” In an interview on CBS’s Sixty Minutes broadcast shortly before the election, David McCullough, who had written several books on American political history (and who spoke at my doctoral graduation ceremony!), said he doubted that any words from the two major presidential candidates would stand the test of time. In fact, nothing said or written during even the “debates” was worthy of being retained past the news cycle of the day. The historian went on to contrast the contemporary talking-points with the authenticity in Truman’s “Give ‘em hell Harry!” campaign of 1942. In 2012, talking points backed up by fund-raising and the application of empirical political science to getting elected punctuated the candidates’ trajectories along paths of political-least resistance.

Considering the sheer duration of the primaries and general campaign, the opportunity-cost of shallow campaigning is in terms of foregone governance not only during the duration, but afterward as well. Moreover, the empty-form of a superficial campaign-mode exacerbates the fundamental flaw in having extended the campaign “season” further and further:  Taking a means—that of selecting office-holders to govern—as more important than its end, governance. The eclipse of governance at the federal level in the U.S. is from not only gridlock, but also the enabling ideational emptiness of the modern campaign elongated into a sustained void of sorts that the electorate allowed to take on a life of its own. 

For the body politic to shift as a body having a will from the status quo such that political leadership evincing a direction could replace gridlock and stasis, some ideational-ideological change would have to have occurred in enough voters that the contours of the body itself will have changed. Sadly, the experience of having gone through the financial crisis of 2008—rather than any new idea or exchange of ideas—led an unusually high 51% of the presidential voters in 2008 to favor more government intervention in the economy while only 43% wanted more things to be left to business. The unusually high percentage was a result of economic fear and perhaps even greater hardship due to the crisis, rather than from a national debate centered on a reconsideration of old ideas.

That even powerful people can reflect on the level of fundamental ideas and come to different conclusions genuinely rather than in a political calculation (e.g., Obama’s “change” on gay marriage during his re-election campaign) suggests that citizens too can allow themselves to be more open ideologically and thus shift. An empirical crisis, for instance, can jar loose even fundamental paradigms. For example, Alan Greenspan, a former chairman of the Federal Reserve, admitted in Congressional testimony after the financial crisis of 2008 that the freezing-up of the commercial paper market in September 2008 had shown him that his free-market, or laissez-faire economic paradigm had a fundamental flaw. He marveled before a panel of lawmakers that forty years of observing markets had done nothing to point to the flaw. Specifically, the market mechanism itself can freeze-up rather than make pricing adjustments under conditions of high volatility involving high uncertainty and risk. In September 2008 as banks lost trust in each other, they stopped lending rather than adjust their rates of interest upward to compensate for the additional risk. High risk, especially if occurring all of a sudden, can paralyze a market’s mechanism. Hence, the former central banker could suddenly discern a rationale for regulation by the government because of the “fatal flaw” in the “market-alone” paradigm.

Had the ideas behind Greenspan’s paradigmatic shift percolated through the electorate during the presidential election of 2008 or even 2010 in place of “Obama as the flavor of the month,” the percentages on the question would not have subsequently flipped back in 2012 back to “center-right” on the question of the role of government in regulating business. Rather, a fundamental shift similar to that which ushered in the New Deal in the 1930s would have been realized. That Greenspan’s “ideational moment” had not registered in the campaigns or the electorate itself at least by 2012 can be seen from the fact that Romney called for financial deregulation even though the lack of regulation of mortgage-based securities had played a significant role in the financial crisis. Absent a sustained paradigmatic reflection from a shared experience of the financial crisis, the electorate was vulnerable to the financial-political power of Wall Street as it continued as though legitimately along its familiar trajectory of profit and self-interest. It is significant that even though Obama came out slightly ahead in 2012, the electorate as a body evinced a shift back to its pre-2008 center-right position on government intervention in business.

Absent new ideas and a sustained reflection on the continued viability of extant paradigms, an electorate succumbs to the status quo. More money—much more money—and more time—much more time—does not necessarily mean that an election-cycle makes a dent in the judgment of the popular sovereign—the We the People—come election day. An election-campaign season should be a rather brief yet poignant opportunity for a genuine societal reflection that results in the body politic being in a new place—that is, changed in some way that will reflect on the ensuing governance. I contend that the way Americans elect the president of the Union was by 2012 not only flawed, but also rather ineffectual and even impotent. It is as though a runner were running in circles only to end up panting where he had begun. To use another analogy, it is as though the voters woke up the day after election day still hungry in spite of having eaten so much cotton-candy. The sacrifice of governance alone, not to mention the value in the popular sovereign (the We the People) making its judgment on general policy and candidates, suggests that elections should include new ideas and substantive arguments rather than each side hammering in more of the same through an eternally-repeated stump-speech and “debate” talking-points.

If there is one thing we can discern concerning the voters almost without exception on the morning after voting, according to the Times, “they were glad that the strident and polarizing contest between President Obama and Mitt Romney was ending.” Beyond the proliferation of negative ads, especially in the “swing states,” and the sheer length of the primary and general campaigns, the voter-frustration may reflect a still-unsatisfied hunger for ideas and authentic, substantive discussion of them and the paradigms we construct out of them and what can be termed, ideational values. I suspect that the want of ideas and genuine discourse had existed for so long that few if any Americans realized what was at the core of their discontent regarding the election cycle. The root may go far deeper than Citizens United and even the serial elongation of campaigning at the expense of governance. It may be asked whether a starving man will eat if he does not realize he is starving.

Sources:

Jackie Calmes and Megan Thee-Brenan, “Electorate Reverts to a Familiar Partisan Divide,” The New York Times, November 7, 2012.

Susan Saulny, “The Most Sought-After Voters Were No Longer Flattered by the Attention,” The New York Times, November 7, 2012.

Jeff Zeleny and Jim Rutenberg, “Focus Is On Economy As Voters Choose,” The New York Times, November 7, 2012.

Michael Shear, “As Electorate Changes, Fresh Worry for G.O.P.” The New York Times, November 8, 2012.

Peter Baker, “Obama Wins a Clear Victory, but Balance of Power Is Unchanged in Washington,” The New York Times, November 8, 2012.

Sara Murray and Patrick O’Connor, “How The Race Slipped Away From Romney,” The Wall Street Journal, November 8, 2012.

Corporate Appointees in the West Wing: A Counter-Productive Way of Holding Business Accountable

Presidents in governments are called to be leaders, which means advocating a vision of change from the status quo. Otherwise, they are merely administrators. So it would be counter-productive for a U.S. president to fill his administration with people financially invested in the status quo. Yet President Obama did just that, in spite of the fact that his rhetoric envisioned radical change in health insurance and still regulations on Wall Street to prevent another financial crisis. In short, he not only let the regulatees in the room, but also gave them important roles with power that would affect their respective industries.

For example, President Obama's chief of staff, William Daley, had been a top executive at JPMorgan Chase, where according to The New York Times, he was paid as much as $5 million a year and supervised the Washington lobbying efforts of the nation’s second-largest bank. Daley also served on the board of directors at Boeing, a large military contractor, and Abbott Laboratories, the global drug company, which had "billions of dollars at stake in the overhaul of the health care system." Although some argued that the White House needed someone on the inside who had the ear of business, the conflict of interest in having someone so tied to vested commercial interests decide on who gets into the Oval Office and determine the President's agenda ought to be troubling. Just one year earlier, a Wall Street reform bill had been passed that sidestepped the question of whether banks too big to fail should be allowed to exist and did nothing to address the fact that executive compensation had been so out of step with performance in the years leading up to the financial crisis. Also, the enacted health-care reform law, Obamacare, included a mandate and excluded a public option as per the interests of the heath insurance lobby. Even the appearance of a conflict of interest like this one is enough to spur us on to investigate it even though Obama's time in office has passed. That there were more blatant conflicts of interests in Obama's choice of appointees should raise even more of a red flag. Was he blind to them (unlikely), or did he intend to stay within the status quo in spite of his rhetoric against health insurance companies and investment banks? Put another way, if he really intended to offer an alternative to private insurance companies and constrain Wall Street firms in the wake of the financial crisis, putting corporate insiders in key offices would be counter-productive. Of course, he may have meant to hold back on his rhetoric, given all the financial inducements that the corporate sector could offer. Obama was much richer leaving office than he was when he entered the White House.
Larry Summers, whom Obama appointed as his chief economic advisor, had been instrumental in the Clinton Administration in keeping derivative securities from being regulated. How could Summers advise on a solution when he was against regulating the financial sector, at least where most needed (CDO's), and had actually played a role in causing the financial crisis? Simply in his choice of Summers, Obama sent a signal that he was a creature of the status quo (and its powerful adherents). 
Timothy Geithner, whom Obama nominated to be Secretary of the Treasury, had been president of the New York Fed, a job that not even Geithner saw as regulating. The big banks had had a formal say in his assuming that role--Citigroup being his sponsor. It is no surprise that he played a major role in AIG paying Goldman Sacks dollar-for-dollar on the CDO swaps even though AIG was essentially on life-support with federal money. So he would be an unlikely pick for a president who wanted systemic change involving the relationship between the federal government and Wall Street. Mark Patterson, Geithner's chief of staff, had been a lobbyist for Goldman Sachs, and Lewis Sachs, a senior advisor at Treasury, had been head of Tricadia, which bet against the CDOs (mortgage-based derivatives) it was selling to clients.
William C. Dodley, President of the New York Federal Reserve after Geithner left to become Treasury Secretary, had praised financial derivatives (including sub-prime-mortgage-based) before the financial crisis and, not coincidentally, had also been the chief economist at Goldman Sachs.
Gary Ginsler, Obama's head of the Commodities Futures Trading Commission, had been an executive at Goldman Sachs. He had helped ban the regulation of financial derivatives, including those based on risky sub-prime mortgages.
Mary Shapero, Obama's head of the Securities and Exchange Commission (SEC) had been CEO of an investment banking self-regulation body. As a MBA student, I volunteered to help a professor with his research on NASD self-regulation. I was attracted by the application of systems theory to the notion of industry self-regulation. In hindsight, I was very naive concerning the propensity of a self-regulatory body to hold to the public good, rather than take the industry's own interest as a starting point and perhaps even devolve to enable a few bad participants with the self-regulatory body serving as a cloak. Even at the industry level, money talks; securitizing especially sub-prime mortgages was very profitable for investment banks through the first seven years of the twenty-first century.
Campaigning on September 29, 2008 in heat of the financial crisis, Obama said, "The era of greed and irresponsibility on Wall Street and in Washington have led us to a financial crisis." That is, "A lack of oversight in Washington and on Wall Street got us into this mess." Even so, as president he signed the Dodd-Frank Financial Reform Act, which in hindsight has been recognized as moderate at best, for it left the conflict of interest at rating agencies, executive compensation, and CPA firms largely entact. Obama resisted adding strings to the TARP federal funds for the big banks, such as restrictions on executive compensation and employee bonuses even though the E.U. enacted new restrictions. Furthermore, as of mid-2010, no financial firm or individuals therein had been prosecuted under Obama for fraud--not even Countrywide. In short, Obama as president fell well short of the "Real Change" mantra of his campaign. As one person observed at the time, Obama put together a Wall Street government. To think that real change could come from such a status-quo of appointees is so incredulous that Obama's very claim of real change could only be taken in hindsight as a false selling-point not unlike the traders at Goldman Sachs who were telling even good clients that the bonds based on sub-prime derivatives were safe even as the traders privately regarded them as "crap." Whether misleading the American people or good clients, the culprit is private advantage over public good via deceit. 
In the case of Obama, I suspect the answer can be found in following the money. Goldman Sachs contributed $1 million to Obama's presidential campaign. Also, he was considerably richer after his two terms in office. I suspect that he had discovered that he could say one thing in public and do another thing in private. It may be that representative democracies are susceptible to becoming invisible plutocracies with a patina of democracy to satisfy the masses while the representatives and the business executives make out quite well working together.

For more on institutional conflicts of interest, see Institutional Conflicts of Interest, available at Amazon.com

Sources:

 Eric Lipton, “Business Background Defines Chief of Staff,” The New York Times, January 6, 2011.
"Inside Job" (2010), Sony Pictures Classics.