Congress: Hitched to the Status Quo

To lead is to be out in front, pointing the jet’s nose one way rather than another. Leadership is not that which causes drag at the back of the plane. Leadership is not that which holds a society in place or protects the vested interests. Whether envisioning something new or a return to a better time, a leader is not oriented to the status quo. It is significant, therefore, that the Minority Leader of the U.S. House of Representatives, one of the two chambers in the American Congress, has stated publicly that the Congress is rigged to advantage the status quo. The stunning implication is that members of Congress are actually anti-leaders.

In an interview in 2013, Nancy Pelosi admitted, “This is an environment that is almost rigged, intentionally or not, wittingly or not, rigged so that the status quo just goes on.”[1] This amazing line can be read as confirmation that the fears of some of the American Founders has come true—namely, that the U.S. House would itself become an aristocratic body rivaling the U.S. Senate. With just 435 representatives for over 310 million people, George Washington’s plea on the last day of the Constitutional Convention that a minimum of 30,000 rather than 20,000 in a district would not be sufficiently democratic sounds trite, even antiquarian. With so few representatives relative to the total population, the U.S. House could not help but be aristocratic, each member being like a magnet to huge “gifts” from vested interests. “We have to kick open the door and make our own environment” in the Congress, Pelosi urged, “reduce the role of money [in campaigns], insist on the civility of debates, and bring more women here, and that’s a better reflection of our country.” In painting this picture for us, the Minority Leader was indeed leading, for she was intrepidly venturing out beyond the status quo. Nevertheless, the thrust of leadership is not always enough to counter the gravity of the vested interests grounded in the status quo.

For example, as long as so few representatives hold such power, the money of the vested interests will inevitably find its way to the campaigns and the Congressional bills will continue to be written by the vested interests themselves. In approaching this problem systemically, more is needed. One possibility is to sift the E.U.’s lower legislative chamber for possible solutions. 

The U.S. House of Representatives (top) and the European Parliament (bottom). 

At the beginning of 2012, European Parliament had a maximum of 751 representatives to cover a population of about 504 million, which works out to an average of 671,105 people in a district. Meanwhile, the U.S. House had 435 representatives to cover a population of about 313 million, which corresponds to an average of 719,540 people in a district. The difference is 48,435 people per district. To get down to 671,105 people per district, the U.S. House would need to add 31 seats. Were the House to have 751 representatives, the average number of people in a district would be 416,777. While more democratic than districts with an average population of 719,540, neither figure comes close to satisfying George Washington’s objection that 30,000 people in a given district is not sufficiently democratic (i.e., too many constituents for a given representative).

Therefore, in addition to increasing the number of seats—with the knowledge that 751 in a chamber can work—further reduction in the centralized power would be needed to reduce the money magnet’s power. One option would be returning more domestic policy areas to the state legislatures. At the time of Pelosi’s statement, the U.S. states had 7,382 state legislators altogether. [2] Spreading around additional powers, taken from the Congress, to so many more representatives would not only make American federalism more democratic, but also open up possibilities for real change beyond the grasp of the status quo. As a few examples even without the additional power, some states had legalized gay marriage, two had legalized pot, and one had achieved universal health-insurance. Admittedly, the status quo has a greater grip in some states (e.g., Kansas) than others (e.g., California). However, spreading out governmental power could perhaps be sufficient to give leadership a chance to outpace the moneyed interests in the status quo.     

1. Laura Bassett, “Nancy Pelosi: Congress Is ‘Rigged’ to Maintain the Status Quo,” The Huffington Post, June 5, 2013.

2. National Conference of State Legislatures, “Sizes of Legislatures,” 2013.

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.

On the History of Thanksgiving: Challenging Assumptions

We humans are so used to living in our subjectivity that we hardly notice it or the effect it has on us. In particular, we are hardly able to detect or observe the delimiting consequences of the assumptions we hold on an ongoing basis. That is to say, we have no idea (keine Anung) of the extent to which we take as unalterable matters that are actually quite subject to our whims individually or as a society (i.e., shared assumptions). In this essay, I use the American holiday of Thanksgiving, specifically its set date on the last Thursday of November, to illustrate the following points.

First, our habitual failure to question our own or society’s assumptions (i.e., not thinking critically enough) leaves us vulnerable to assuming that the status quo is binding when in fact it is not. All too often, we adopt a herd-animal mentality that unthinkingly “stays the course” even when doing so is, well, dumb. In being too cognitively lazy to question internally or in discourse basic, operative assumptions that we hold individually and/or collectively, we unnecessarily endure hardships that we could easily undo. Yet we rarely do. This is quite strange.

Second, we tend to take for granted that today’s familial and societal traditions must have been so “from the beginning.” This assumption dutifully serves as the grounding rationale behind our tacit judgment that things are as they are for a reason and, moreover, lie beyond our rightful authority to alter. We are surprised when we hear that some practice we had taken as foundational actually came about by accident or just decades ago.

For example, modern-day Christians might be surprised to learn that one of the Roman emperor Constantine’s scribes (i.e., lawyers) came up with the “fully divine and fully human,” or one ousia, two hypostates, Christological compromise at the Nicene Council in 325 CE. Constantine’s motive was political: cease the divisions between the bishops with the objective being to further imperial unity rather than enhance theological understanding.[1] Although a Christian theologian would point out that the Holy Spirit works through rather than around human nature, lay Christians might find themselves wondering aloud whether the Christological doctrine is really so fixed and thus incapable of being altered or joined by equally legitimate alternative interpretations (e.g., the Ebionist and Gnostic views).

Let’s apply the same reasoning to Thanksgiving Day in the United States. On September 28, 1789, the first Federal Congress passed a resolution asking that the President set a day of thanksgiving. After an improbable win against a mighty empire, the new union had reason to give thanks. A few days later, President George Washington issued a proclamation naming Thursday, November 26, 1789 as a "Day of Publick Thanksgivin."[2] As subsequent presidents issued their own Thanksgiving proclamations, the dates and even months of Thanksgiving varied until President Abraham Lincoln's 1863 Proclamation that Thanksgiving was to be commemorated each year on the last Thursday of November. Here, the attentive reader would be inclined to jettison the “it’s always been this way” assumption and mentality as though opening windows on the first warm day of spring. The fresh air of thawing ground restores smell to the outdoors from the long winter hibernation and ushers in a burst of freedom among nature, including man. Realizing that Thanksgiving does not hinge on its current date unfetters the mind even if just to consider the possibility of alternative dates. Adaptability can obviate hardships discovered to be dogmatic in the sense of being arbitrary.[3]

The arbitrariness in Lincoln’s proclaimed date was not lost on Franklin Roosevelt (FDR). Concerned that the last Thursday in November 1939, which fell on the last day of the month, would weaken the economic recovery on account of the shortened Christmas shopping season, he moved Thanksgiving to the penultimate (second to last) Thursday of November. He defended the change by emphasizing "that the day of Thanksgiving was not a national holiday and that there was nothing sacred about the date, as it was only since the Civil War that the last Thursday of November was chosen for observance.”[4] Transcending the common assumption that the then-current “last Thursday of November” attribute of Thanksgiving was a salient—even sacred, as though solemnly passed down from the Founders by some ceremonial laying on of hands—in the very non-holiday’s very nature, FDR had freed his mind to reason that an economic downside need not be necessary; he could fix a better date without depriving Thanksgiving of being Thanksgiving.

To be sure, coaches and football fans worried that even a week’s difference could interrupt the game’s season. In a column in The Wall Street Journal in 2009, Melanie Kirkpatrick points out that "by 1939 Thanksgiving football had become a national tradition. . . . In Democratic Arkansas, the football coach of Little Ouachita College threatened: 'We'll vote the Republican ticket if he interferes with our football.'"[5] Should Christmas have been moved to April so not to interfere with college basketball? Sadly, the sheer weight being attached to the “it’s always been this way” assumption could give virtually any particular inconvenience an effective veto-power even over a change for the better, generally (i.e., in the public interest).

Unfortunately, most Americans had fallen into the stupor wherein Thanksgiving just had to be on the last Thursday of November. “The American Institute of Public Opinion, led by Dr. George Gallup, released a survey in August showing 62 percent of voters opposed Roosevelt's plan. Political ideology was a determining factor, with 52 percent of Democrats approving of Roosevelt's move and 79 percent of Republicans disapproving.”[6] Even though the significance of the overall percentage dwarfs the partisan numbers in demonstrating how pervasive the false-assumption was at the time among the general population, the political dimension was strong enough to reverberate in unforeseen ways.

With some governors refusing to recognize the earlier date, only 32 states went along with Roosevelt.[7] As a result, for two years Thanksgiving was celebrated on two different days within the United States. In his book, Roger Chapman observes that pundits began dubbing "the competing dates 'Democratic Thanksgiving' and 'Republican Thanksgiving.'"[8] Sen. Styles Bridges (R-N.H) wondered whether Roosevelt would extend his powers to reconfigure the entire calendar, rather than just Thanksgiving. "I wish Mr. Roosevelt would abolish Winter," Bridges lamented.[9] Edward Stout, editor of The Warm Springs Mirror in Georgia -- where the president traveled frequently, including for Thanksgiving -- said that while he was at it, Roosevelt should move his birthday "up a few months until June, maybe" so that he could celebrate it in a warmer month. "I don't believe it would be any more trouble than the Thanksgiving shift."[10] Although both Bridges and Stout were rolling as though drunk in the mud of foolish category mistakes for rhetorical effect, moving up a holiday that has at least some of its roots in the old harvest festivals to actually coincide with harvests rather than winter in many states could itself be harvested once the “it’s always been this way” assumption is discredited. Just as a week’s difference would not dislodge college football from its monetary perch, so too would the third week in November make a dent in easing the hardship even just in travelling and bringing the holiday anywhere close to harvest time in many of the American republics. As one of my theology professor at Yale once said, “Sin boldly!” If you’re going to do it, for God’s sake don’t be a wimp about it. Nietzsche would undoubtedly second that motion.

Why not join with Canada in having Thanksgiving on October 12^th? Besides having access to fresh vegetables and even the outdoors for the feast, the problematic weather-related travel would be obviated and Americans would not come to New Year’s Day with holiday fatigue. Of course, we wouldn’t be able to complain about the retailors pushing Christmas over Thanksgiving in line with the almighty dollar, but amid the better feasts and perhaps colorful leaves we might actually allow ourselves to relish (or maybe even give thanks!) amid natures splendors rather than continue striving and complaining.

To be sure, resetting Thanksgiving to autumn in several of the states would translate into summer rather than harvest time in several others. Still other states are warm even in the last week of November, and harvest time might be December or March. Perhaps instead of carving the bird along partisan lines, Thanksgiving might be in October (or even the more temperate September!) in the “Northern” states and later in the “Southern” states, given the huge difference in climates. Remaining impotent in an antiquated assumption that lives only to forestall positive change while retailors continue to enable Christmas to encroach on Thanksgiving reeks of utter weakness.

Giving serious consideration to the notion different states celebrating Thanksgiving at different times might strengthen rather than weaken the American union. Put another way, invigorating the holiday as a day of thanksgiving amid nature’s non-canned bounty might recharge the jaded American spirit enough to mitigate partisan divides because more diversity has been given room to breathe. For the “one size fits all” assumption does not bode well at all in a large empire of diverse climes. Indeed, the American framers crafted an updated version of federalism that could accommodate a national federal government as well as the diverse conditions of the republics constituting the Union. Are the states to be completely deboned as though dead fish on the way to the market at the foot of the Lincoln Memorial? Is it so vitally important that everyone does Thanksgiving on the same day when “by state” enjoys a precedent?

Engulfed in the mythic assumption that the “last Thursday in November” is a necessary and proper fit for everyone and everywhere, Americans silently endure as if out of necessity all the compromises we have been making with respect to the holiday? Perhaps changing the date or returning the decision back to the states would free up enough space for the crowded-in and thus nearly relegated holiday that people might once again feel comfortable enough to say “Happy Thanksgiving” in public, rather than continuing to mouth the utterly vacuous “Happy Holidays” that is so often foisted on a beguiled public. 

Like Christmas and New Year’s Day, Thanksgiving is indeed now an official U.S. holiday. This would also be true were the states to establish the holiday as their respective residents see fit. As push-back against FDR’s misguided attempt to help out the retailors and the economy, Congress finally stepped in almost two months to a day before the Japanese attacked Pearl Harbor in Hawaii (whose harvest time escapes me). The U.S. House passed a resolution declaring the last Thursday in November to be a legal holiday known as Thanksgiving Day. The U.S. Senate modified the resolution to the fourth Thursday so the holiday would not fall on a fifth Thursday in November lest the Christmas shopping season be unduly hampered as it rides roughshod over Thanksgiving. Roosevelt signed the resolution on December 26, 1941, the day after Christmas, finally making Thanksgiving a legal holiday alongside Christmas and New Year’s Day.[11] Interestingly, the U.S. Commerce department had found that moving Thanksgiving back a week had had no impact on Christmas sales.[12] In fact, small retailors actually lamented the change because they had flourished under the “last Thursday” Thanksgiving rubric; customers fed up with the big-named department stores like Macy’s being so overcrowded during a truncated “Christmas season” would frequent the lesser-known stores in relative peace and quiet. Charles Arnold, proprietor of a menswear shop, expressed his disappointment in an August letter to the president. "The small storekeeper would prefer leaving Thanksgiving Day where it belongs," Arnold wrote. "If the large department stores are over-crowded during the shorter shopping period before Christmas, the overflow will come, naturally, to the neighborhood store."[13] This raise the question of whether a major legal holiday is best treated as whatever results from the tussle of business forces oriented to comparative strategic advantage as well as overall sales revenue.

Lest the vast, silent majority of Americans continue to stand idly by, beguiled by the tyranny of the status quo as if it were based in the permafrost of “first things,” things are not always as they appear or have been assumed to be. We are not so frozen as we tend to suppose with respect to being able to obviate problems or downsides that are in truth dispensable rather than ingrained in the social reality.

---

1. Jarslav Pelikan, Imperial Unity and Christian Division, Seminar, Yale University.

2.  The Center for Legislative Archives, “Congress Establishes Thanksgiving,” The National Archives, USA. (accessed 11.26.13).

3. The other meaning of dogmatic is “partial” in the sense of partisan or ideological more generally. Given the extent to which a person can shift ideologically through decades of living, might it be that partisan positions are not only partial, but also arbitrary?

4. Sam Stein and Arthur Delaney, “When FDR Tried To Mess With Thanksgiving, It Backfired Big Time,” The Huffington Post, November 25, 2013.

5. Melanie Kirkpatrick, “Happy Franksgiving: How FDR tried, and failed, to change a national holiday,” The Wall Street Journal, November 24, 2009.

6. Sam Stein and Arthur Delaney, “When FDR Tried To Mess With Thanksgiving, It Backfired Big Time,” The Huffington Post, November 25, 2013.

7. Ibid.

8. Roger Chapman, Culture Wars: An Encyclopedia of Issues, Viewpoints, and Voices (Armonk, NY: M.E. Sharpe, 2010).

9. Sam Stein and Arthur Delaney, “When FDR Tried To Mess With Thanksgiving, It Backfired Big Time,” The Huffington Post, November 25, 2013.

10. Ibid.

11. The solely religious holidays in November and December are private rather than legal holidays. As Congress cannot establish a religion on constitutional grounds, Christmas is a legal holiday in its secular sense only. Therefore, treating Christmas as a legal holiday as akin to the private religious holidays (including Christmas as celebrated in churches!) is a logical and legal error, or category mistake. Ironically, Thanksgiving, in having been proclaimed by Lincoln as a day to give thanks (implying “to God”), is the most explicitly religious of all the legal holidays in the United States.

12. Ibld.
13. Ibid.

Protest Movements 101

David Johnston of Reuters opined on October 7, 2011, the Occupy Wall Street “protests show signs of sparking a major change in U.S. politics by creating common ground among people with wildly divergent views. The key to their significance will be whether they foster a wholesale change in political leadership in 2013 or whether Americans return a vast majority of incumbents in both parties at all levels of government.” But are “wildly divergent views” really represented, and did the movement translate dramatic camera-ready protest parades and sit-ins into grassroots work to get specifically anti-corporate candidates past the primaries and into office in 2012?  I contend that from the get-go, the Occupy Wall Street movement set itself on a trajectory antithetical to being able to answer both of these questions in the affirmative. In so doing, the movement’s “non-leaders” sowed the seeds of the movement’s demise—or at the very least of being relegated as partisan and thus contained as a sub-part in the system.

In terms of a diversity of views, a poster board in McPherson Square, where “Occupy D.C.” pitched camp, listed, according to USA Today, “the group’s wide-ranging goals, including economic justice, education reform, repealing the Patriot Act, District of Columbia home rule and an end of the two-party system.” One protester claimed all these agendas are related because, “Everyone has a voice here.” That doesn’t really explain why the goals are related. I contend that the reason is because the group is populated by liberal Democrats.

While symmetrical with the Tea Party in the Republican Party, my pigeon-holing of the Occupy Wall Street movement deprives it of the anti-big-business populism that is salient in much of the Tea Party. Indeed, traditional agrarian Republicanism contained a strident thread of anti-corporatism, as big business, like big government, is fully capable of trampling over the individual. As Sen. Alan Simpson (R-WY) used to say on the U.S. Senate floor, “I’m for the little guy.” This is vintage Republican populism, which the “Occupy Wall Street” excluded from the get-go by failing to delimit itself in terms of topics. In other words, the “Occupy Party” may be undercutting itself by association.

It is in the corporate interest that the movement be relegated as partisan and left-wing. It is in the political interest (and comfort) of Republican officials to keep the movement from engaging in joint operations with Tea Party organizations or absorbing some Tea Party members; that would essentially muzzle representatives like Eric Cantor who would not want to insult those members.

The movement’s organizers (and there are leaders even if they claim to have a “leaderless” movement) failed to resist the ideological temptation to permit liberal Democrats who are “off topic” with respect to Wall Street and big business generally and with respect to government officials to join in anyway. Even apart from being stigmatized as simply partisan, the group ran the risk of running off course, like a sailboat without a rudder in the water. The boat goes wherever the wind takes it. To get an idea of how even just one protest event can slide, a nebulous “Stop the Machine” protest in Freedom Plaza in Washington, D.C. on October 6, 2011 “was intended to protest the ongoing wars in Iraq and Afghanistan . . . but morphed into a multigroup demonstration that decried corporate greed as well as drone attacks.” Even the best placed intentions can find themselves on the losing end of a “morphing” if the boat had no rudder in the water. So a protest event against the corporate takeover of Congress (i.e., a plutocracy) could easily morph into an anti-war rally where pot-smokers beat bongos and dance in tie-dye shirts, while singing songs from another century that was anything but peace and love. While convenient and fun to the protesters, they would quickly lose credibility in much of the wider American society. Considering how much of that society might subscribe to an anti-Wall Street and big business lobby movement, the ideological convenience came at a steep, though perhaps hidden, cost.

As far as the impact of the Occupy Wall Street movement on the primaries and general election in 2012, the most likely scenario is that turnout of liberal Democrats gets a boost. This marginal impact would be indirect, rather than from a deliberate strategy in the movement to transition protesters into campaign volunteers for anti-corporate candidates urged to run by the movement. Ideally, such candidates could be found and supported for the primaries of both of the major parties. For example, agrarian populist Republicans could readily support a Republican candidate who advocates repealing the “legal person” corporate judicial doctrine (and thus corporate political spending), capping executive compensation on Wall Street, and breaking up the banks as well as companies that are too big to fail (or simply a danger to the republic form of governance).  In short, the notion that there is no ceiling for economic liberty can be replaced by a social-contract notion of solidarity based in the viability of a republic form of government and of market competition. As such, the movement’s goals could easily have been bipartisan, with only the Rockefeller Republicans in opposition.  Alas, so close but so, so far.

Had the Occupy Wall Street movement’s leaders been oriented to getting specifically anti-corporate candidates elected on both sides of the aisle, the movement would have limited itself to a few specific policy proporals. The very existence of the mega-corporation (and the mega-compensation levels) could have been at issue. Indeed, specific proposals capable of fundamentally redefining capitalism from its mega-corporate (with mega-lobbies) variety could have been linked to setting up and supporting particular candidates for a variety of state and federal offices. The movement’s leaders would have had to bend over backwards to make sure that Republican populist (e.g., agrarian) candidates were given just as much support. This would likely have included supporting some Tea Party candidates—the movement’s litmus test being stridently narrow yet uncompromising on providing the corporations with some loop holes or watered-down policies. Most importantly, for the movement to have succeeded in terms of policy would have meant supporting candidates who are not liberal! It could almost be said that such self-discipline alone would merit success at the ballot box. In contrast, taking the road most convenient has meant that making a radical change in corporate capitalism is not likely, at least from the “Occupy Wall Street” crowd.

Consider the following observation from Brendan Burke, a truck driver and punk rock musician who studied philosophy in college. “I have heard a thousand different things people are concerned about — inadequate teacher pay, no jobs, the rich not paying their fair share of taxes and all of it was about how we working people are not getting a fair shake.” The thousand points of light here sound to me like a grab-bag from the left wing of the Democratic Party. A small town Republican who is skeptical of big business (and big government) would naturally take one look at these causes and view the entire enterprise as partisan and left-wing. In other words, Burke’s observation confirms my sense that the movement quickly tracked to the liberal Democrat agenda writ large without even attempting to achieve a sufficient focus either on topic or on grass roots mobilization to significantly change the election results in 2012. At most, liberal Democrats will be more likely to make it to the ballot box on election-day in November, 2012. The usual suspects re-elected who had been sympathetic to the movement will have no fire under their bellies to maintain the movement’s push for fundamental change. Once again, real change will be in terms of incremental regulations rather than systemic change. Perhaps this is simply how American governance gets done.

If I am correct in my prediction, the culprit was none other than ideological selfishness or greed at the expense of driving home one radical change. It is ironic that greed (i.e., the desire for more) compromises efforts to curtail monetary greed. Perhaps the protesters were so upset in part because they knew deep down that they shared something with the bankers on Wall street: being driven by an unwillingness to resist the temptation to have more of whatever is in line with self-interest. I suspect that the corporate (and political) elite depended on this selfishness to derail the protest movement, and the protesters did not disappoint.

Given the immense wealth (and thus power) that the large American corporations and banks have, I am utterly astonished that a window could open even a crack to occasion a societal decision on whether the large corporation—the so-called “legal person”—should continue to exist in the United States. Less astonishing, the window began to close even as the movement was beginning to spread. It was a self-inflicted wound. The movement’s fate, as if predestined, will likely be taken to mean that the modern corporation itself has become virtually untouchable, meaning that it cannot be challenged politically within the system. The mega-corporate form thus ensconced in American society, pressure from the related increasing economic inequality will likely build until the system ultimately bursts open, at a much, much greater cost.

There are indeed huge costs in keeping the party going, whether in Goldman Sachs’ tower or on the street below. I suspect that neither Wall Street nor its antagonists—both of whom have been acting like predictable character-actors— grasp this point; both appear so narrow-minded yet proud. I can’t be wrong, they were undoubtedly thinking as they gazed at each other in 2011 from afar. The bankers refused even to acknowledge any culpability for the financial crisis of 2008 and the protesters were so sure they were on the right side of truth that they provided free admission to virtually any friendly agenda. What if a pro-life protester had shown up?

It would be nice if the great silent majority—those Americans who simply go about their daily business while quietly but astutely observing Wall Street and the protesters from afar—would take the reins from the arrogant and the proud in order to enact systemic change. At least from the vantage-point of a decade into the twentieth century, I suspect that many ordinary Americans like you and me had come to the uncomfortable conclusion that our political-economic system had in all likelihood been wrecked along the rocks of unbridled ambition. At the very least, many of us probably felt that, given the financial crisis of 2008 and the consolidation of special-interest power in Washington, both the financial system and the federal system were in need of major repairs, but had received only fine-tuning at most from vested interests. In other words, most citizens were probably wondering: where are the adults? It is indeed difficult to detect any such creatures among either the childish CEOs, such as Fuld (truly a lunatic), Coyne (a card-playing child), O’Neil (an insecure tyrant), Thain (selfishness incarnate) and Lewis (just plain dumb), or the angry yet somehow playful protesters. Tweedledum and Tweedledee could not put Humpty Dumpty back together again. Unfortunately, there is no Mother Goose either; sorry to say, but I'm afraid we must tackle the hard egg ourselves. Hopefully, we will muster the requisite determination before that egg completely spoils amid the stench of the sordid spoils of corporate capitalism in the stygian halls of Congress.

Sources:



David C. Johnston, “Occupy Wall Street,” Reuters, October 7, 2011. 

Donna L. Leger, “Protesting ‘Occupiers’ Spread Message Beyond Wall St.,” USA Today, October 7, 2011. 




See related essays: "Occupying Wall Street" and "A Self-Regulated Protest?"

Real or Incremental Change?

On October 13, 2010, Fox News reported a poll that found that women were turning on Obama.  The reason cited was that they feel there has been too much change—that it has been “jarring.”  I was stunned—wondering if I was listening to a broadcast from another planet. I remembered that when I had been sampling a fattening food item in a grocery store in my antiquated home town in Illinois; the old woman who gave me the sample, said, “We have lots of devils here!” as she was handing me the sample.  She was referring to the array of food samples in the store that day a few weeks before Thanksgiving.  My reaction, which I charitably did not share with her, was, Oh, horrors! I wondered what century she was from (probably Calvin's, I concluded privately as I chewed a “devilish” olive). I wondered, moreover, why some people magnify little things into horrendous sins. Such people, I concluded, cannot seem to let go of what is to the rest of us so utterly antiquated and get with it. That is, why are some people so resistant to change? Why do they perceive small, incremental changes as somehow momentous—even jarring?

In a preface to one of his books, Milton Friedman wrote, "Only a crisis—actual or perceived—produces real change. When the crisis occurs[,] the action taken depends on the ideas that are lying around.” That is to say, human nature is not exactly designed in favor of substantial change—being more inclined to the incremental variety. When a culture says that real change is to be feared and people don’t bother to come up with a broad array of ideas, even a crisis may not result in real change. Such can be said of modern American society, even as “change” shows up consistently in American political campaigns.

In terms of the jarring change being reported on Fox News, the journalist pointed to the health-insurance reform law as a case in point.  In spite of its purported “socialism,” the law relies on private health-insurance companies, whose lobby pressured Obama into dropping his “public option” requirement and adding a mandate that requires Americans to become customers of those companies.  If relying on extant private companies—giving them a guaranteed and vastly enlarged customer base—is somehow “jarring” change, I have to start wondering about whether some people have a pathological issue with change itself.

One need only point to the Dodd-Frank financial regulation law of 2010, which subjects banks deemed too big to fail to additional capital requirements and requires the banks to develop liquidation contingency plans. This “change” pales in comparison to breaking up the banks having $1 or more trillion in assets so they do not pose a danger while extant. That some people might find increasing capital requirements as jarring boggles the mind. Are such people familiar with real change—even if they voted for it in 2008? I suspect they would not recognize it if it jumped up and bite them on their asses, and yet political campaigns are ostensively all about change—or the illusion thereof—but just enough to tell people what they want to hear.

Not surprisingly, much of the campaigning in the 2010 midterm elections was oriented to incremental change on a variety of issues, rather than to real change, even though the latter would have been more fitting given the systemic negative effects of the financial crisis of 2008. Even in states bordering on bankruptcy, like California, Florida and Illinois, campaigning as usual belied any purported crisis. 

For example, I watched a candidate forum that was being held in Illinois and one of the main questions was why a candidate’s business was so successful.  Meanwhile, the last governor had been impeached and removed from office by a nearly-unanimous vote in the legislature, and the government was borrowing $18 billion in 2010 alone.  The forum struck me as an exercise in “rearranging the deck chairs on the Titanic” as if the ship of state was not on the verge of sinking.  In other words, it was business as usual in a context that demanded substantial change. Clearly, the candidates knew of Illinois’s fiscal (and corrupt) condition. It occurred to me that they were either bereft of ideas or too accustomed to going along on the track of status quo to proffer any real alternatives. Lest one heap all the blame on the candidates at the forum, it is important to note that it was a citizen of Illinois who asked about the candidate’s business. Perhaps the society in Illinois is too entranced by custom and thus insufficiently equipped for real change—ironically even as one of Illinois’ former U.S. senators was serving as the “real change” president of the United States.

Lest the pallid phenomenon be presumed to be limited to the heartland, the California Governor’s race between Jerry Brown and Meg Whitman also evinced politics as usual. The two candidates had a chance in their debates to persuade a California-wide audience that they could turn around the economically-troubled republic. Instead, they resorted—at least in their third debate—“to many of the personal attacks that have dominated the last few weeks of the campaign,” according to MSNBC, whose verdict can be said to apply to American politics even in the wake of a crisis: “Neither candidate presented any new ideas.”

Source:

Jeff Madrick, Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present (New York: Alfred A. Knoff, 2011).

Business CEO’s Overstating Political Uncertainty in the United States

The impact on business of political uncertainty in countries that are seized by revolution can be substantial—so much so in fact that CEO’s and board directors are motivated to avoid the uncertainty itself. I submit that business analysts of political risk tend unwittingly to routinely overstate the uncertainty arising from incoming U.S. presidential administrations. If I am correct in this claim, CEO’s and board directors pay too much heed to political uncertainty itself in the making of major strategic decisions involving operations in the American context.

Although American culture welcomes and even encourages leaps in technological development capable of transforming daily life, another sort of change—one more subject to societal control—is tolerated only if made incrementally. Otherwise, the change is dubbed as radical, which is a charge made more out of fear than according to any objective measure. Clutching at the status quo unduly translates politically into the tyranny of the status quo as powers both in business and government that profit as things are hold back all but incremental change that does not threaten the current basis of benefits. The many points of access into the federal legislative and executive machinery enable the stultifying influence a virtual veto over proposals of serious, or “real,” change. Such change tends to be pulled back until only the tolerated incremental change remains.

A few examples reveal the pattern. In 1986, amid large budget deficits caused in part by the tax cuts of the early 80’s, Ronald Reagan pushed for a wholesale change in the federal income tax, ridding it of its myriad of deductions. Yet as the U.S. Senate debated the tax code, individual senators came forward with rationales for all of the major deductions. The “powers that be” were exercising their prerogatives to continue their respective benefits, which Reagan’s vision for change would put at risk. Business practitioners anxiously pointing to the political uncertainty of a revised tax code were in retrospect overreacting, and thus putting too much emphasis on the uncertainty itself.

In 2008, Barak Obama campaigned under the slogan of “real change.” After his election, political risk analysts were doubtlessly impressed with the sheer uncertainty latent in the very notion of real change. Yet when Congress was considering the Affordable Care Act, Obama dropped his proposal for a public option, which would be useful should private insurers leave the planned exchanges. The president gave into pressure from the insurance industry lobby, the members of which stood to lose benefits should Obama’s healthcare plan instantiate real change even just in terms of there being a public health-insurance option. The resulting law was incremental because the private health-insurance companies were still to be relied on. The anticipated uncertainty regarding the American health insurance system turned out to be much less. The analyses of CEO’s making strategic decisions based in part on avoiding the American context due to the uncertainty would have been distorted, and thus not optimal.

In 2016, when Donald Trump was elected president, the uncertainty in terms of political risk must have been palpable in corporate boardrooms. Trump’s proposal of a substantial tax, or tariff, on American companies that take advantage of lower labor-cost countries and import the resulting products back into the large U.S. domestic market undoubtedly stocked the uncertainty without much thinking-through of how political compromise could take its toll on the proposal as it moves through Congress. Similarly, fears of trade wars resulting from the proposed tariff may have been overblown. That American companies would be subject to the penalty means that foreign companies manufacturing outside of the U.S. and importing into the large domestic market would have a competitive advantage. Pressure from Chinese companies could mitigate the likelihood of a Chinese-stoked trade war even though the pulling out of American companies (i.e., the loss of some manufacturing plants) would have a detrimental impact on the Chinese economy. Of course, such a scenario assumes that the actual tariff is enough to motivate American CEO’s to return their manufacturing to America; the political compromise that may be needed to pass such a tariff might reduce it to an insufficient level and thus effectively discredit the very idea of using public policy to alter the financial calculus of American companies such that they have a financial incentive to return voluntarily in line with maximizing profit.

The American preference for incremental over systemic change puts any genuinely new political proposal at risk of being shrunk to fit through the contours of the status quo, which is so dear to the vested interests. The uncertainty typically thought to exist in the advent of a new presidential administration tends to be overblown in retrospect. The American economy suffers from this bloated condition to the extent that CEO’s and corporate board directors move operations away from the geographically delimited hyper-uncertainty.

Electric Utilities Thwart Solar Applications: A Conflict of Interest Rewarding the Status Quo

Considering the contribution of coal-burning power-plants to atmospheric carbon-emissions and thus global warming, governments around the world should be encouraging rather than discouraging home-owners to install solar panels. That is to say, we ought not privilege the status quo when it has contributed so much already to an uncomfortable or even uninhabitable Earth for mankind. So it is unfortunate that energy officials in Hawaii’s government had to step in to pressure—no, order—the Hawaiian Electric Company to approve its “lengthy backlog” of solar applications.[1] I submit that the officials should have gone further in correcting for the conflict of interest in the utility. Put in the vernacular, electric companies tended at the time to screw customers who could sell back “home-grown” solar power. The root problem here is in the utilities’s dual roles of seller and consumer of power.


The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.

Stifling Change: Columbus Day and Thanksgiving

In Canada, Thanksgiving is celebrated at harvest-time, on October 12^th, rather than a week before the first month of winter in the Northern Hemisphere. For the States south of Canada, whether their respective peoples are cold or warm on the third Thursday in November, the holiday’s date is etched in stone, given the illustrious aura of the U.S. president who had enshrined the date in the midst of a horrendous war between the USA and CSA in the 1860s. Few people would dare even entertain the natural assimilation of Columbus Day and Thanksgiving Day on October 12^th. So, well after harvest in most of the States and bunched in with Christmas and New Years—effectively ridding the latter of any left-over enthusiasm—people in the States in the northern climes are consigned to stuff themselves like Turkey birds while the surviving natural turkeys shiver outside. Human nature itself may be hardwired against change, and the massive scale of modern political association may exacerbate the paralysis.

Early October in 2014, the Seattle City Council voted unanimously to replace Columbus Day with “Indigenous People’s Day” as a city holiday, even though Columbus Day would still be celebrated locally as the federally-recognized holiday. Seattle councilman Bruce Harrell explained that he had co-sponsored the resolution because he believed that the city would not be successful in its programs and outreach to Indians until “we fully recognize the evils of our past.”[1] One local resident took offense at an Indigenous People’s Day “coming at the expense of what essentially is Italian Heritage Day.”[2] However, because Columbus was part of a Spanish expedition, Columbus Day is not “essentially” an “Italian Heritage Day.” Rather, the holiday remembers back to the time of Spanish power. It follows that the resistance to the change in Seattle was overblown.

The “indigenous People’s Day” label is itself problematic, as American Indians “only” came to the continent about 15,000 years ago—not long at all for a species that has been around for 1.8 million years. The thorny issues could be obviated simply by moving Thanksgiving from the crowded year-end field of holidays to October 12^th at harvest-time in many of the States. That this change would seemingly ruin the “holiday season” as it has always been and undo the order penned by the iconic Abraham Lincoln pinning Thanksgiving to the third Thursday in November suggests that the chances of moving the holiday are slim to nil even though having Thanksgiving so late (and so close to Christmas and New Year’s) is arguably suboptimal.  

Compounding the problem with effecting change in the U.S., the increasing political consolidation at the federal level stymies a societal change through legislative means because more political energy must be amassed. The “one size fits all” assumption does not help. Even though Seattle can safely contemplate two holidays on one day, the sheer possibility of Thanksgiving being in October in some States and in November in others would likely trigger fears of disunion.

 In the E.U., the subsidiarity principle urges that legislation be done at the lowest practicable level of political organization; in the U.S., the Tenth Amendment seeks to forestall political consolidation at the expense of federalism. As Seattle attests, Congress need not have such a choking power-monopoly on holidays, and Americans need not be so afraid and thus over-reactive as proposals see the light of day.

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[1] Phuong Le, “Columbus Day in Seattle Replaced with a New Holiday,” Associated Press, October 6, 2014.

[2] Ibid.

On the Tyranny of the Status Quo

Ever wondered why so much energy must be expended to dislodge a long-established institution, law, or cultural norm? Why does the default have so much staying power? Are we as human beings ill-equipped to bring about, not to mention see, even the “no-brainer” changes that are so much (yet apparently not so obviously) in line with our individual and collective self-interest? In this essay, I look at Ukraine, Spain, and Illinois to make some headway on this rather intractable difficulty.

Ukrainian President Yanukovych refused for months to budge then suddenly disappeared as if a teenager fleeing from a now-likely punishment. (Image Source: AP)

In Kiev’s central square, Ukrainian protesters braved bitter cold for months in late 2013 and early 2014 without any movement whatsoever in disgorging a divisive president who may gone on to surrender Ukraine’s sovereignty for money  in line with Vladimir Putin’s imperial dream of a restored Russian empire under the rubric of a “Eurasian Union.” It took twenty and then seventy deaths before the steadfast protesters would see the president replaced by an interim parliament-centered coalition government. After months of stalemate, the president actually fell from power quite suddenly once his partisan support in parliament had sunk below a threshold.[1] Until that point was reached, any trickles of power shifting behind the scenes did not register in the least as even a slight movement toward a resolution in the massive tug-of-war. Such ongoing intransigence, or gravity, that seemingly inheres in a default is itself an obstacle that can easily dissuade anyone who comes to view the way things are as not only contingent, but also, well, rather stupid. Such an individual might wonder why societal self-corrections in the public interest are so elusive even though they are rather obvious.

Even realizing that a given domain is subject to the rigid longevity of invisible sub-optimality can be difficult to achieve. For example, only after seven decades did the E.U. state of Spain seriously reassess Franco’s decree on May 2, 1942 moving Spain from the GMT time zone, which Spain had adopted at the International Meridian Conference in 1884, to GMT +1. Falling back an hour would put the dictator on the same time as Hitler’s Germany (and France) and Mussolini’s Italy. Seven decades later, in October 2012, the VII National Congress for Rationalise Spanish Time Zones proposed returning to GMT. With more daylight in the morning and less in the evening, state residents might not stay up so late on work-nights. Once the state had been bailed out by the E.U. federal government after the financial crisis of 2008, Spain could ill-afford the continued loss of 8 percent of the state’s GNP due to productivity losses from the nocturnal proclivity that coincided with another cultural icon, the siesta. For our purposes here, why did it take decades even to propose the easily-rationalized correction even though it meant returning to a rule that had been in effect for decades before the rise of Nazi Germany.

Let’s travel across the Atlantic Ocean to Illinois, whose major metropolis is the bewindowed city of Chicago. The latest sunset there is at 8:30pm (20:30 hrs), which occurs during the last week of June. The sun rises during that week at around 5:15am, though relatively few Chicagoans are awake at 4:45 to witness daybreak. Bentham’s rule of utilitarianism would have us believe that the greatest good for the greatest number somehow matters in life. Might it be rather obvious that taking an hour of daylight during the summer from early morning and depositing it at the other end of the day, prolonging evening from turning into night, would be more optimal? Perhaps it is merely common sense that many more people could enjoy the hour of light in question were they awake to see it. This point would not be missed by many tourists from Spain. Why is it so difficult for the people losing out to become aware of what they could have in a better life?

Even moving another hour of daylight, such that sunrises would occur roughly between 7:00am and 7:30 during June and July (daylight before 7) and sunsets would be after 10:00pm (22:00hrs) would not unduly fine “morning people.” Yet this would mean a three-hour shift from standard time. Achieving even a 9:30pm sunset would entail a two-hour change (not necessarily on the same days). Lest such a proposal seem too catastrophic, the PSOE, a political party in Spain, established the addition of another hour in summer beginning in the 1980s.

Perhaps the fear of the unknown is assuaged by the news of the same unknown being part of the default somewhere else. Furthermore, perhaps what does not work in a state of one Union may work just fine in a state in another Union; even within an empire-scale Union diversity of clime and custom justify allowances for interstate differences (e.g., via federalism).

Perhaps, moreover, members of the homo sapiens species are “hard-wired” to prefer “missing out” in the face of even a relatively simple change that would add appreciably to the good for the greatest number. In this case, the good to be had is in terms not only of summer enjoyment in a clime whose long winters can keep the door open to extreme cold from the Arctic, but also of improved health (from more exercise en plein air) and greater safety (i.e., fewer muggings and rapes). Perhaps the over-riding lesson here is simply that making life a little better—a bit more enjoyable—need not be so difficult.

Dorothy, in The Wizard of Oz, could have used the magic slippers to return to Kansas at anytime. Unfortunately, she did not even ponder the possibility, and thus had to come to it the hard way. 

(Image Source: Hollywoodreporter.com)

I am reminded of Dorothy in the 1939 film, The Wizard of Oz. The good witch of the North tells her at the end that she could have used her ruby shoes to return to Kansas at any time, but that she had to come to realize this herself. Perhaps the question for us is why we have such trouble in coming to realize that we, too, need not wait so long to effect change that we could have accomplished long before because it lies within our power. The pickle in all of this is that enough people in a given society must come to this self-empowering realization themselves for any movement to take place. For once a threshold is met, even a societal change can be effected surprisingly fast and much easier than expected or feared.

1. Jim Heintz and Angela Charlton, "Ukraine Parliament Boss Takes Presidential Powers," GlobalPost, February 23, 2014.