Monday, April 21, 2014


[House Minority Leader] Nancy Pelosi was on Jon Stewart a few weeks ago, and he asked, "Well, don't you need to make sure that the laws are working?"

And she said, "No, that's not my responsibility, my responsibility is just to pass the laws."

So where does oversight come in? Given Congress’s ever increasing tendency to block and micromanage, it’s hard to blame the executive alone for government ineffectiveness. We have a structural problem here. In fact, we have structural problems just about everywhere.

The Rule of NobodyGovernments come in all shapes and sizes—and operate at different levels (federal, state and local). Some are reasonably honest and highly effective. Others are corrupt and incompetent. A third group are moderately corrupt, but work well. Whatever be the situation, whether we like it or not—I find it hard to overstress that point—we need government. It is—or should be—no more than us cooperating for the common good. In practice—because we have a tendency to be singularly misinformed—and to elect the mediocre—the results have a tendency to disappoint profoundly.

The trick is to make government work for us. Currently, we don’t seem to be able to. Could we? Given that government works extraordinarily well in some countries, the answer has to be in the affirmative—but not without changing the system. The structure we have is corrupt,

There are some who believe that the private sector is always the better alternative. For much of the economy, it clearly is (I have no desire to see the government selling hamburgers) but given that the financial part of the private sector was that the principal cause of the Great Recession—and that scarcely a day goes by without a major corporation being found guilty of malfeasance—I take issue with that opinion as an absolute. There are some areas where government performance is consistently superior—healthcare being the obvious one. http://victororeillyIn fact, at a certain level, it is hard to tell the differences between government and corporate cultures (and bureaucracies)—except that we have even less chance of checking e.corporate power in the U.S. today. It is now literally out of control—because it funds much of our political system. The results speak for themselves.

Philip K. Howard has just written a new book, THE RULE OF NOBODY, on one of the reasons why American democracy is so dysfunctional. Let me quote briefly from a Huffington post article.

HUFF POST: One of the phrases that struck me in the book is that "American Democracy is basically run by dead people." What do you mean by that?

PKH: The important decisions made by our government have been preset in legal concrete by statutes and regulations written in past generations and not altered for decades.

HUFF POST: You spend much of the book criticizing regulation. What are some examples of regulations being harmful?

PKH: What I criticize is not the idea of regulation. I think that government oversight is vital in a crowded society to make sure that nursing homes and day care centers are adequate, [along with] other important regulatory goals.

What I criticize is this idea of micro-regulation, where you impose literally thousands of rules onto things like nursing homes. What happens is that they are counterproductive, because the people in the nursing homes spend their time complying with the rules instead of making life nice for the residents. There's a fair body of evidence that it is counterproductive, and other countries that have moved over to a more general principles-based type of regulation where you go for goals to have a nursing home that respects the dignity of the residents and offers a home-like setting.

Those forms of regulation produce dramatically better nursing homes than this kind of micro-regulation strategy that we have adopted in the United States.

The United States is like an obsessive-compulsive. The Constitution was 10 pages long, the Volcker rule is 950 pages. Words can't create fairness. It's goals and principles and people applying them that creates fairness and adequacy. We've tried to create a form of automatic government that isn't working.

HUFF POST: You say "No one in Washington is asking what the right thing to do is." What do you mean by that, specifically?

PKH: I think Washington has become its own bubble, its own culture, separated by the Beltway from the rest of the country. It's mutated into a perpetual tug of war, where political leaders get up in the morning not trying to do anything constructive but just make the other side look bad.

The other people in Washington, lawyers, lobbyists and journalists, play their role in dealing with this perpetual tug of war, and nothing much happens. It's this paralytic political structure without any significant connection to the real needs of the country. I think it's a profoundly sick and dysfunctional political culture much worse today than it was even 30 years ago.

I don't think the problem is so much bad leadership or even polarized politics. I think those are symptoms of a structural powerlessness, where the combination of the accretion of law, the influence of special interest money, has made it so hard to change a law or to change directions that people have really given up.

HUFF POST: Lastly, do you see any signs of hope?

PKH: The hope is not within Washington or within the political system ... It's in kind of a swamp. I think the hope is in the American people. If you look at the surveys and polls, the American people are almost universally disgusted with the way the system of government works. If you poll on specific issues, you'll get surprising responses on things like global warming or the need to make justice more reliable or other issues which the parties are deeply divided on but which the public seems to be more than willing to accept a change in direction.

The opportunity is to mobilize the public behind big change in a way that allows our country to meet the challenges of this new century, and I think the public is going to get there a lot sooner than Washington is.

In essence, Howard believes that only a major—and highly visible—crisis  will force change. I tend to agree with him, but you would have to wonder how significant such a crisis would have to be to initiate the kind of mass movement which could force change—particularly given the power of the status quo. They control the bulk of the nation’s wealth, the political system, virtually all our major corporations, much of academia, the media, key portions of the internet, the armed services (by way of the political system), the legal system up to and including the Supreme Court—and the most sophisticated surveillance and law enforcement system the world has ever seen.

To force the kind of fundamental overhaul that the U.S. clearly needs will be a task that even Hercules might decline.

It is also worthwhile noting that we have just been through a major crisis—the Great Recession—which wreaked economic havoc on this country—but which has resulted in almost no change except to make the malefactors even wealthier at the expense of the average American (and the too-big-to-fail banks are now even larger).

In point of fact, we are going through another major crisis at present, but it is so all encompassing, and the consequences are going to be so horrendous, that most of us don’t want to recognize it, let alone think ) about it. It’s called THE LONG (AND NOT SO SLOW) COLLAPSE OF THE AMERICAN WAY OF LIFE (FOR MOST AMERICANS).

It really needs a catchier title to catch on. END OF DAYS has already been used. Given the massive transfer of wealth from average Americans to the ultra-rich over the last third of a century, THE GREAT HEIST would seem appropriate. Still, let’s keep it simple. We’ll settle for THE COLLAPSE.


Why you, of course. This is even better than 3-D. It’s real life (doubtless patented already).

Rubbish, I hear you say. Things will be back to normal real sooner now.

I hope you are right. But just consider.

  • GOVERNMENT PARALYIS. We have a government that has been  rendered largely incapable of doing much that is clearly necessary—and where Congress is largely financed and controlled by corporations which are, in turn, controlled by by the ultra-rich (who constitute about 0.1 percent of the population). The U.S. may have the trappings of democracy—but, in practice, it is nothing of the sort. That is not just my opinion. A recent scientific study by Princeton researchers Martin Gilens and Benjamin I. Page confirms just that. Currently, it is a plutocracy run by the ultra-rich for their own benefit. Though the ultra-rich cannot always control a situation—in the sense of determining that the outcome will be precisely what they want--they can always influence it (because they have money which—in turn—buys access) and they can almost always block—or delay for extended periods of time, normally through the Republican party. This has now moved so far to the right, it is now quite blatantly—and unashamedly—the political tool of the ultra-rich (a sad state for a once great party). Since the status quo suits the ultra-rich, they favor gridlock, and are largely the cause of it.
  • THE DEMONIZATION OF GOVERNMENT. The ultra-rich and the Republicans have also worked hard to demonize government over the last 30 plus years—with considerable success. I don’t pretend for a moment that government is flawless (or anywhere close—but then neither are corporations) but the effect of such sustained propaganda has been to undercut government’s credibility and effectiveness—and thus its ability to do the job it is there to do. For instance, though there are laws against monopolies, they are largely not enforced. Similarly, though the Great Recession was largely caused by financial institutions—and involved substantial illegal behavior—there have been virtually no criminal prosecutions (a truly extraordinary situation). We really do have a law for the rich and a law for the poor—and it does not speak well of us that we tolerate it. But, if the Princeton study is to be believed, what the American public as a whole wants is largely irrelevant. They found "the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy." Put another way, our opinion does not count. That is not the way democracy is supposed to work—even U.S. style representative democracy.
  • GOVERNMENT REFUSAL TO PLAN. We refuse to plan—largely for ideological reasons—despite the fact that virtually all our more successful competitors plan (because, demonstrably, it works). It helps to know where you are going if you want to work out how to get there. Successful planning doesn’t mean the government does everything—or micromanages. It merely sets common goals for the country as a whole. Mind you, if your are indifferent to the fate of the population as a whole—as seems to be the case where many of the ultra-rich are concerned—then it makes sense to limit your planning to your own interests. But, it is shabby behavior at best—albeit all too common.
  • WEALTH & POWER IN THE HANDS OF THE ULTRA RICH. Virtually all the wealth and power in the county is in the hands of the ultra-rich who (subject to some exceptions) are utterly opposed to reform—and who largely control our political system.
  • RIGGED ECONOMIC SYSTEM. We have an economic system which is rigged to favor the ultra-rich in innumerable ways.
  • RIGGED & COMPLEX TAX SYSTEM. We have a tax system which is excessively complicated and grossly unfair—and blatantly written to favor the ultra-rich.
  • ECONOMY EXCESSIVELY FINANCIALIZED. The U.S. economy is heavily financialized with all its associated costs. Such costs include everything from egregious bank charges to health insurance to high prices resulting from speculation. The common denominator is that financialization does not add real value. It is primarily a series of ways to extract resources from the real economy. Economists call this ‘rent seeking,’ and it acts as a de facto tax on economic activity—and serves to distort it negatively. Ironically, and sadly, financialization does not work to the benefit of either employment or small business. In fact, as financialization has increased, our economic health has decreased.
  • ECONOMY EXCESSIVELY DEBT BASED. We have an economy which is structured to be massively debt based at all levels—with all  its associated disadvantages and pressures. This high level of debt is compounded by the financial institutions charging high interest rates despite being able to obtain capital at minimal interest (thanks to the Federal Reserve).
  • MINIMAL SAVING IN CONTRAST TO COMPETITION. We save minimally compared to our competitors. Low savings make us less resilient and less productive. For instance, over the last three decades, Germany, France, Austria and Belgium have maintained household savings rates of between 10 and 13 percent—while the U.S. rate has varied from about 5 percent to zero. Given the current sustained downward pressure on pay, the prognosis for U.S. savings is not good. That puts us at a competitive disadvantage.
  • U.S. NATIONAL INTERESTS DIVERGING FROM CORPORATE INTERESTS. The interests of major U.S. corporations—many of whom now trade globally—are becoming increasingly divorced from the national interest. Consequences include massive exporting of jobs, cash being hoarded abroad, and expertise being given to potential competitors to gain short-term advantage. Above all, many major corporations today seem to lack any sense of either moral or social responsibility.
  • CORPORATE CULTURE DEEPLY FLAWED. Manifestations of this include greed, short termism, lack of concern for employees, indifference to local communities, over-charging, indifference to product quality, poor customer service, excessive senior executive pay, and lack of either social responsibility or a moral compass.
  • CORPORATE POWER VIRTUALLY UNCHECKED. Corporate power is now excessive, but is neither checked nor balanced by either government or unions—and the Supreme Courts seem to favor it actively. This is socially disastrous.
  • CORPORATE HEALTH SYSTEM. U.S. healthcare is largely based upon private insurance companies, drug companies, hospitals, doctors, and medical staff. The results have been disastrous in both healthcare and financial terms. Overall, we enjoy poorer health than the populations of other developed nations, but pay between 50 and 100 percent more for it. This is one area where the track record is that the government does a better job than the private sector. Over-paying to the extent Americans do means that other important needs relating to the quality of our lives are neglected.
  •  CORPORATIONS TENDENCY TOWARDS MONOPOLY. Competition is fundamental to a healthy free market. The U.S. is far from a free market. Instead, sector after sector is dominated by an increasingly small number of corporations financed by a small number of financial institutions. The consequences of such a lack of competition are extensive and include market manipulation, overcharging, poor service, and underinvestment.
  • CORPORATION USE OF LEGAL SYSTEM TO RESTRAIN TRADE. Contrary to corporate propaganda, the U.S. is not a fully free market—or even close. Instead not only is it oligopolistic, but corporations have learned to game the legal system to minimize or eliminate competition. Such behavior is extensive. The best current example concerns Tesla which wants to sell directly to consumers, but is prevented from doing so in many states because it is legally mandated that independent car dealerships must be used.
  • CORPORATIONS UNDERINVESTING & CASH HOARDING. Major U.S. corporations are underinvesting massively—neglecting everything from plant and equipment to research and development to employee training. Instead they are engaged in share buybacks, cash hoarding, and tax avoidance. 
  • CORPORATIONS PAYING LESS & LESS TAX. Where tax is concerned, corporations are contributing less and less—while receiving ever more grants and subsidies.
  • MAJOR YOUTH UNEMPLOYMENT. We have massive youth unemployment—and no strategy for eliminating it.
  • MAJOR LONG-TERM UNEMPLOYMENT. We have massive long-term unemploymentand largely ignore the problem.
  • AUTOMATION THREAT TO JOBS. Ever increasing automation is likely to decrease job creation.—but we have no plan for how to cushion the impact.
  • EARNING POWER DECREASING. The well-paid middle class job is vanishing, and is being replaced by low wage jobs, In fact, the earning power of most Americans has been virtually static for a third of a century—and is now in decline.
  • COSTS ARE INCREASING. Housing, healthcare, education, food, gas and numerous other costs are steadily increasing—though scarcely showing up in our official statistics. Clearly, the juxtaposition of low pay, declining household income, and increasing costs is unsustainable—and cannot work to the benefit of the economy as a whole.
  • VANISHING PENSIONS. The defined pension is vanishing fast.
  • SOCIAL SECURITY UNDER ATTACK. Social Security is under attack.
  • MASSIVE STUDENT DEBT. The young are crushed by massive student debt. It’s about $1.2 trillion as matters stand—and going nowhere but up. Meanwhile, youth unemployment is worryingly high—and those fortunate enough to be employed are increasingly finding the pay is low.
  • UNAFFORDABLE COLLEGE & UNIVERSITY. Third level education is becoming unaffordable. Its cost has increased much faster than inflation—particularly where the private sector is concerned. There, academic institutions are increasingly becoming corporate in their behavior with the earning power of a few being massively increased while tenure is reduced—and adjunct professors being paid minimally.
  • INFERIOR EDUCATION. 12K education is largely inferior to that of our competitors—and we are not gaining ground. This, in turn, is leading to the creation of a massive poorly educated underclass—which we seem quite content to tolerate. Such a situation is socially divisive, deprives society of human potential, and turns what should be a primary asset into a massive cost to society. 
  • HOUSING BECOMING UNAFFORDABLE. The cost of housing—whether bought or rented—largely thanks to financial institutions investing in private dwellings—is becoming increasingly unaffordable.
  • CARS BECOMING UNAFFORDABLE. Automobiles are becoming increasingly unaffordable.
  • MASSIVE POLLUTION. Both our environment and our food chain are massively polluted. The health consequences—insofar as we know them—are severe.
  • SUBSTANDARD FOOD. We have an industrial agricultural system which relies on increasingly expensive fertilizers and GM seeds—and which produces nutritionally sub-standard food. There is increasing evidence that GM foodstuffs may have negative health implications. There are other severe weaknesses in our food chain including Big Food’s excessive use of salt, sugar, and fats. In addition, there is increasing evidence that processed food, in itself, is unhealthy—and that we should be eating fresh food as much as possible.
  • POLLUTED WATER SUPPLIES. We have serious problems with both the quality and availability of water. Even where it is available, it is contaminated with meds and toxic chemicals (which, mostly, we don’t test for). Further, our current water treatment facilities cannot eliminate such contaminants even when we know they are there.
  • LIVE SICKER & DIE YOUNGER. We live sicker and die sooner than the populations of other developed nations—by several years. Chronic conditions are now common—and Canadians, for instance, live several years longer than Americans.
  • UNDERINVESTMENT IN INFRASTRUCTURE. Our infrastructure has been neglected for decades and is crumbling. It will cost trillions of dollars to bring up to standard.
  • MINIMAL PUBLIC TRANSPORT. We largely lack effective public transport. This places a steadily increasing cost burden on most Americans (at a time when earning power is in decline), massively increases pollution and congestion, and increases our trade deficit.
  • INADEQUATE SOCIAL SAFETY NET. Our social safety net is entirely inadequate—and non-existent in some situations. 
  • BAD LABOR RELATIONS & MINIMAL WORKER RIGHTS. We have the worst labor relations in the developed world—and worker rights are minimal to non-existent. Management’s attitude towards workers is mostly adversarial and arbitrary. The European concept of working with unions—codetermination—is neither understood nor practiced.
  • DECLINING PRODUCTIVITY. U.S. productivity is in decline. Though it has grown by an average of 2.5% a year since 1945, it has averaged only 1.1% since 2011 (and even then the statistics are suspect).
  • BAD NUMBERS LEADING TO BAD DECISIONS. We have serious problems with our statistical base in general—which leads to bad decision-making. For instance our official inflation statistics don’t correspond with what most of us actually experience.
  • AN UNJUST AND EXPENSIVE PRISON SYSTEM. We incarcerate far too many people for too long for too little reason at vast financial and social cost—while largely failing to imprison corporate criminals. Our system of justice is manifestly unjust.
  • EXCESSIVE MILITARY EXPENDITURE. We spend way too much on National Security. The total is in excess of $1 trillion if all the items which should be in the National Security Budget are factored in,
  • CLIMATE CHANGE. We have climate change to deal with—and are largely ignoring it. 
  • STRESS. U.S. stress levels—as measured by the PERCEIVED STRESS SCALE are at unprecedented heights. The primary reason for this seems to be economic and the lack of a support system enhances this. High stress has decidedly negative side effects and, in particular, undermines your immune system. It is almost certainly part of the reason why our longevity is significantly lower than that of other developed countries—and why so many of us suffer from a chronic condition.
  • CURRENT AMERICAN BUSINESS MODEL WORKS AGAINST INTERESTS OF MOST. We have created and operate a greed and short-term based economic system—the ABM (American Business Model) which results in insecurity, stress, misery, worry, poverty and homelessness on an unprecedented scale by the standards of the rest of the developed world—and which makes too many of those enmeshed in it a cost to society rather than contributors. This makes no economic sense, isn’t delivering what the American people needs, and is morally wrong. It is also the primary reason why the U.S. is in decline in both relative and absolute terms. The ultra-rich—who are primarily responsible for this situation—will be largely unaffected. They are insulated from the lives of most Americans and have the resources to live and do where and what they want.

But every society has problems!

Very true—but what most Americans don’t seem to understand is that there are now many countries which have significantly fewer problems than we do—and where the quality of life is superior. This raises a fundamental point: What is the purpose of this decision to band together to constitute which we call “a country?” It has to be for the advantage of all. “We the people” means ALL of us—not 0.1 percent.

Currently it clearly does not.

Go look. The evidence and the answers are out there.

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