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Sunday, August 26, 2012

The Establishment Paradise (Part Three)

(Note:  This is the third and concluding segment in a three part series.  The first segment traced the evolution of elective office from a noble public service calling to more of an establishment paradise for the ruling class, with ease and plenty far removed from the day to day lives of ordinary citizens.  The second segment identified themes common from Boris Yeltsin's Soviet Union just prior to the collapse of its communist system to Ben Franklin in the early days of the United States.  Franklin, in particular, warned of turning elective office from posts of Honour to places of Profit, with potentially disastrous consequences...)

Is the ownership of Property subject to any substantive limitation under the US Constitution?  Is particular expertise required to hold elective office?  Or can an ordinary citizen learn on the job?  How real is the possibility that the American system of capitalism may experience a similar fate to the now extinct communist economic system under the former Soviet Union?

Mr. Franklin then considered the concept of Property rights.  He reminded the Citizens that these are Our creation, that for a seat at the table of the American Dream, what We have conferred as a Right, We also have the Power to take away:

All Property, indeed, except the Savage’s temporary Cabin, his Bow, his Matchcoat, and other little Acquisitions, absolutely necessary for his Subsistence, seems to me to be the Creature of public Convention.  Hence, the Public has the Right of Regulating Descents, and all other Conveyances of Property, and even of limiting the Quantity and the Uses of it.  All the Property that is necessary to a Man, for the Conservation of the Individual and the Propagation of the Species, is his natural Right, which none can justly deprive him of: But all Property superfluous to such purposes is the Property of the Publick, who, by their Laws, have created it, and who may therefore by other Laws dispose of it, whenever the Welfare of the Publick shall demand such Disposition.  He that does not like civil Society on these Terms, let him retire and live among Savages.  He can have no right to the benefits of Society, who will not pay his Club towards the Support of it.

The iconic and fiery Andrew Jackson, face on the $20 bill and populist president of the common man, ushered in America’s first age of reform.  Instinctively, so it seems, Jackson understood the perils of the establishment paradise, unchecked.  Jacksonian Democracy reminded ordinary citizens that experience was overrated and that even ordinary, common citizens could learn.  Further, lifetime or long-tenured office-holding often led to inefficiency and even corruption.  The fresh, new blood of the ordinary citizen was required to bring strength, grounded, common sense qualities and the ability to renew the contest.

In May 1829, shortly after Mr. Jackson was inaugurated as the 7th President of the United States, he elaborated thus:

There has been a great noise … (h)ow every man who has been in office a few years, believes he has a life estate in it, a vested right, & if it has been held 20 years or upwards, not only a vested right, but that it ought to descend to his children, and if no children then the next of kin --- This is not the principles of our government.

President Jackson elaborated:

Office is considered as a species of property, and government rather as a means of promoting individual interests than as an instrument created solely for the service of the people.  Corruption in some and in others a perversion of correct feelings and principles divert government from its legislative ends and make it an engine for the support of the few at the expense of the many.  The duties of all public officers are, or at least admit of being made, so plain and simple that men of intelligence may readily qualify themselves for their performance; and I cannot but believe that more is lost by the long continuance of men in office than is generally to be gained by their experience. ...

In a country where offices are created solely for the benefit of the people no one man has any more intrinsic right to official station than another.  Offices were not established to give support to particular men at the public expense.  No individual wrong is, therefore, done by removal, since neither appointment to nor continuance in office is matter of right….  It is the people, and they alone, who have a right to complain when a bad officer is substituted for a good one.  He who is removed has the same means of obtaining a living that are enjoyed by the millions who never held office.  The proposed limitation would destroy the idea of property now so generally connected with official station, and although individual distress may be sometimes produced, it would, by promoting that rotation which constitutes a leading principle in the republican creed, give healthful action to the system.

Yet almost 200 years later, amazingly, here we are, with Congressmen locked in to financially lucrative places of Profit.  They hold their offices seemingly ad infinitum, as if owned and fit to be passed down to their children.  The day is long gone where public service is its own reward – it has become institutionalized as the prize.

How will it end?  Will the Princes be dethroned?  Or the People enslaved?  In the end, it comes to little else.

In closing, we return to Boris Yeltsin.  A cynical question came from the floor during his unlikely yet successful 1989 election campaign, as the Soviet Union and its communist economic system convulsed toward extinction:

Tell us what it felt like to live in the “establishment paradise.”  Is it true that the ease and plenty promised in the historical stage of communism has long been the rule “up there?”

Although the US is a vastly different experiment in democracy, is it inconceivable that a similar fate may await the American economic system of capitalism?

-Michael D’Angelo

Sunday, August 19, 2012

The Establishment Paradise (Part Two)

(This is the second segment in a three part series.  The first segment traced the evolution of elective office from a noble public service calling to more of an establishment paradise for the ruling class, with ease and plenty far removed from the day to day lives of ordinary citizens.  Boris Yeltsin spoke of the changes with the collapse of the former Soviet system.)

What tricks do Ambition (the Love of Power) and Avarice (the Love of Money) play on the life of one who aspires toward public service?  What type of men (and women) will these vices tend to attract?

Mr. Yeltsin understood what can happen when ordinary citizens lose faith in their government:

Without faith (in our leadership) even the best and most enlightened changes in our society will be impossible to accomplish.  And when people know about the blatant social inequality that persists, they see that their leader is doing nothing to correct the elite’s shameful appropriation of luxuries paid for from the public purse, then the last droplets of the faith will evaporate.

And when faith evaporates, change follows.  The only point of discussion is one of degree.

Let’s redirect our attention to early America, to the time during which the US Constitution was drafted in 1789.  From the earliest days of the republic, Ben Franklin had warned of the inherent danger of ambition and greed, when combined, having the human tendency to turn posts of honor into places of profit, or an establishment paradise.  Upon returning home after participation in the secret deliberations, Franklin was said to have had an inquisitive exchange with a Philadelphia woman:

“What have you made for us, Dr. Franklin?” the woman had wanted to know.

“A republic, madam, if you can keep it,” Franklin replied.

Franklin understood that democracy was not forever assured in the US, and that active, informed citizenship would be required not only to keep but also to help it evolve.

In a speech at the Constitutional Convention, Ben Franklin discussed the merits of limiting the perks of our elected lawmakers within the laws of human nature:

Sir, there are two Passions which have a powerful influence in the Affairs of Men.  These are Ambition and Avarice; the Love of Power and the Love of Money.  Separately, each of these has great Force in prompting Men to Action; but when united in View of the same Object, they have in many Minds the most violent Effects.  Place before the Eyes of such Men a Post of Honour, that shall at the same time be a Place of Profit, and they will move Heaven and Earth to obtain it.  The vast Number of such Places it is that renders the British Government so tempestuous.  The Struggles for them are the true Source of all those Factions which are perpetually dividing the Nation, distracting its Councils, hurrying it sometimes into fruitless and mischievous Wars, and often compelling a Submission to dishonourable Terms of Peace.

He turned to the type of men which such personal incentives would attract:

And of what kind are the men that will strive for this profitable Preeminence, thro’ all the Bustle of Cabal, the Heat of Contention, the infinite mutual Abuse of Parties, tearing to Pieces the best of Characters?  It will not be the wise and moderate, the Lovers of Peace and good Order, the men fittest for the Trust.  It will be the Bold and the Violent, the men of strong Passions and indefatigable Activity in their selfish Pursuits.  These will thrust themselves into your Government, and be your Rulers.  And these, too, will be mistaken in the expected Happiness of their Situation; for their vanquish’d competitors, of the same Spirit, and from the same Motives, will perpetually be endeavoring to distress their Administration, thwart their Measures, and render them odious to the People.

Those personal gains would be smeared into the fabric of our bedrock institutions, where they would leave an impressionable and lasting stain.  And before long, augmentations would be sought, leading to a tipping point pitting the governing against the governed:

Besides these Evils, Sir, tho’ we may set out in the Beginning with Moderate Salaries, we shall find, that such will not be of long Continuance.  Reasons will never be wanting for propos’d Augmentations; and there will always be a Party for giving more to the Rulers, that the Rulers may be able in Return to give more to them.  Hence, as all History informs us, there has been in every State and Kingdom a constant kind of Warfare between the Governing and the Governed; the one striving to obtain more for its Support, and the other to pay less.  And this has alone occasion’d great Convulsions, actual civil Wars, ending either in dethroning the Princes or enslaving the People.  Generally, indeed, the Ruling Power carries its Point, and we see the Revenues of Princes constantly increasing, and we see that they are never satisfied, but always in want of more.  The more the People are discontented with the Oppression of Taxes, the greater Need the Prince has of Money to distribute among his Partisans, and pay the Troops that are to suppress all Resistance, and enable him to plunder at Pleasure.  There is scarce a King in a hundred, who would not, if he could, follow the Example of Pharaoh, --- get first all the People’s Money, then all their Lands, and then make them and their Children Servants for ever.  ...  But this Catastrophe, I think, may be long delay’d, if in our propos’d System we do not sow the Seeds of Contention, Faction, and Tumult, by making our Posts of Honour Places of Profit. …

(The third and final segment in our three part series turns to a discussion of property rights, a man-made proposition, shifting to Andrew Jackson, the President of the Common Man, before concluding in the present.)

-Michael D'Angelo

Sunday, August 12, 2012

The Establishment Paradise (Part One)

(Note: This is the first segment in a three part series.)

Is elective office still the noble calling to public service it was once intended to be?  Or has it evolved to more of an establishment paradise for the ruling class, with ease and plenty far removed from the day to day lives of ordinary citizens?

As the summer of 2012 begins to wind down, the November US presidential election beckons on the near horizon.  It’s an excellent time to take the long view on the state of our American democracy.

At last look the latest public opinion polls indicate that members of US Congress experience an approval rating hovering at or near 9% among likely American voters.  The statistic is startling, the lowest rating in fact since statisticians began to record figures.  Long in the making, the phenomenon has been the subject of ominous warning bells ringing out for more than two centuries.

But let’s begin with the present.  What began as a call to selfless public duty for the good of the nation has evolved through the course of US history.  Today, unfortunately, public service is no longer seen as a selfless commitment to the welfare of others.  It is more like a self-centered establishment paradise.  The reasons are apparent.

Ordinary citizens may wonder what it’s like to live in an establishment paradise.  Candidates for public office in quest of so called public service make lofty promises to their courted constituents.  But are these promises real?  Or are they merely illusions, or expectations?   Or are they kept only “up there” in the establishment paradise?

During the 2008 presidential campaign, then-candidate Barack Obama lamented the high personal cost of aspiring toward a life of public service.  Red lights, traffic jams, slow, methodical passages through airport security, missed flights.  Worst of all, there would be little to no time for family.

Of course, after the election things would be much different.  Traveling in a limousine is really much more convenient.  Nobody steps on your toes, pushes you from behind, pokes you in the ribs.  Every light is green.  You travel fast without stopping.  Traffic police and security salute you.  And there is Air Force One.

For US Congressmen, the change is perhaps more subtle but equally sweeping.  Through the generosity of prior legislators, sort of as a present to themselves, upon election, members receive Cadillac-type health insurance coverage that is not the privilege of all citizens.  They also receive a federal pension which sets them up financially, for life.  Despite an obvious conflict of interest, nor are they prohibited from investing in industries and businesses they are called upon to govern.  They are wined and dined by paid lobbyists, special interests and political action committee interests whose funding sources need not be disclosed under the present law.

And they use the power of the incumbency to retain and cement their vaunted status in public service.  While the selfless George Washington created the precedent in the executive branch to limit the presidency to two successive terms totaling eight years, US Congressmen face no such limitation.  Many “run” for office seemingly forever, transforming public service into an exclusive property right with hereditary status.

In the third branch of US government, the federal judiciary, members at the highest levels are appointed for life.  And so it is not inconceivable that still-in-his-early-50s John Roberts, new Chief Justice of the Supreme Court and author of the landmark 2012 decision upholding the 2010 Affordable Care Act, can retain his position on the high court for 40 years or longer.

Over time, this is how elected representatives in a nation of laws become alienated from the nation and themselves.  Laws are passed to serve the special interests, the ones pouring money into the personal comforts of public servants, at the expense of the general welfare and public interest.

They give well-worn speeches on the yet elusive progress toward paradise for all citizens.  But that paradise is but a fiction for the masses of ordinary citizens.  The establishment paradise has been constructed and evolved in such a fashion that it is to remain that way in the name of the established order, conservatism and preservation of the powerful status quo.  As a result, the ordinary citizen's faith in the democratic process is tested.

Boris Yeltsin may not be a familiar name to ordinary American citizens.  But his name is very familiar to ordinary Russians.  Mr. Yeltsin had a unique vantage point in Russian politics.  In 1981 he was “elected” to serve on the Central Committee of the Communist Party of the Soviet Union, which was the highest party authority between governing congresses.  Then, after the fall of the communist government in 1989, Mr. Yeltsin was elected by popular vote as the first president of the new Russian Federation, an experiment in democratic and market reform, in which position he served from 1991 to 1999.  He spoke of the changes he foresaw with the imminent collapse of the former Soviet system:

Of course, our establishment cannot run away and hide.  The moment will come when they will have to give up their private dachas (government owned vacation homes) and answer to the people for having hung on to their privileges tooth and nail.  Even now some of them are starting to pay the price for their former “establishment” status.  The massive defeat at the polls suffered by party and government officials who stood for elections is the first warning bell for them.  They are now being forced to take steps to satisfy the demands of the voters.  But they make concessions reluctantly and grudgingly; they are so wedded to their privileges that every possible contrivance, including bald lies and sheer deception, is employed by them.  They will, in fact, do anything to slow down the process of reform.

(The second segment in this three part series turns to a discussion of what can happen when ordinary citizens lose faith in their government...)

-Michael D'Angelo 

Sunday, August 5, 2012

Privatized Gains, Socialized Losses (Part Two)

(Note: This is the second and concluding segment in a two part series.  The first segment documented how the forces of Wall Street appeared to “outsmart” the US government once again.  Finding a creative way to promote and package financial derivatives, Wall Street escaped protective federal regulation.  As a consequence, a financial bubble ensued, followed by the Great Recession of 2008 from which the masses of ordinary citizens are now attempting to recover.)

Are the stewards of the law capable of keeping up with the powerful forces of Wall Street this time around?  When the financial crisis has abated and things return to a state of normalcy, do we conveniently forget the lessons of history?  What, if anything, keeps us on a forward course, refusing just to ride the cycles of boom and bust, ascent and decline?

In the aftermath of the Great Recession of 2008 the US Congress with President Obama’s strong backing has passed what we are advised is the most sweeping expansion of financial regulatory reforms since the Great Depression.

But, but within minutes of the bill’s passage, several Wall Street groups were leveling criticism at the new regulations, as was The Business Roundtable, the US Chamber of Commerce and other business organizations.

The substance of the law is said to subject more financial companies to federal oversight and regulates many derivatives contracts, while creating a consumer protection regulator and a panel to detect risks to the financial system.  However, a number of the details have been left for regulators to work out, “inevitably setting off complicated tangles down the road that could last for years.”

Before signing the legislation, President Obama remarked that “because of this law, the American people will never again be asked to foot the bill for Wall Street’s mistakes.”  Mr. Obama said that “There will be no more taxpayer-funded bailouts.  Period.”  Ordinary citizens, however, are expressing frustration and doubt in attempting to take Mr. Obama at his word.  This stems from a working knowledge of the history and underpinnings of the US financial industry, dating back to Alexander Hamilton and his plan for US capitalism based on the British model.

But does anyone doubt the profit-induced mindset of Wall Street to creatively devise new ways to bypass Federal legislation again, no matter how well conceived that legislation appears to have been?  And does anyone also doubt the human element that federal regulators will once again be asleep at the switch, when the time comes for decisive action?  Last time, it took about 75 years for Wall Street to circumvent the Feds, a tribute in and of itself to the staying power of the New Deal.  This time, surely it is again not a question of if, but when.  Where profit is concerned, Wall Street has also proven to be very patient in biding its time.

While ordinary citizens may rightfully give Mr. Bernanke a pass, presently, they are also angry.  The federal government has bushels of money for Wall Street, the large banks, insurance companies and the auto industry, to name but a few, while Main Street is left to fend for itself.  The results and the present economic malaise are apparent.

Frustration and anger are rooted in the reality that the rules of the game are neither particularly fair nor the playing field level.  Raw emotions are heightened by the fact that financial gain from success is privatized, while loss from failure is socialized.

That is, if Wall Street takes a financial risk which succeeds, Wall Street doles out the reward to individuals privately.  On the other hand, if Wall Street’s gamble should fail, the loss is spread out socially among the masses of ordinary citizens.  As a consequence, it is said that there is no accountability on Wall Street.  It is also of little consequence that the risk taken is seemingly reckless, great enough in fact to take down the entire national economy.

Frustrations and anger are further magnified by the fact that ordinary citizens must live within their means.  That is to say, ordinary citizens cannot spend what they do not have.  If the money is not there, spending must be reduced and consequently brought back into balance with income or revenue.  Ordinary citizens wonder, if these are the rules of the road, then why do they not also apply equally to their state and federal governments, which are awash in a sea of financial debt and borrowing?  Of course, it is not always that simple.

Are we ordinary humans capable of not only aiming higher but also achieving real, meaningful progress?  Then-US Senator, Barack Obama, has expressed similar sentiments:

I wonder, sometimes, whether men and women in fact are capable of learning from history --- whether we progress from one stage to the next in an upward course or whether we just ride the cycles of boom and bust, war and peace, ascent and decline.

Given the predictability of our imperfect human nature, one can only wonder.

-Michael D’Angelo