Arlen Spector and the Two-Party System

The big political news of the last few days is the switch of Senator Arlen Spector from a Republican to a Democrat. The reason why this is so important is that it gives the democrats 60 votes in the Senate (baring the ongoing recount in the Minnesota senate race). This of course gives the Democrats the power to break a filibuster, and more easily get their legislation passed.

Indeed, this continues to signify the shift in American politics and perhaps the public to the left. However, our country has created such a dichotomy of Democrat and Republican or Liberal and Conservative that the shift just goes back and forth. After 8 years of clear policy failures we are seeing the cycle shift back to the left. This cycle seems to me to be a function of an educated majority. Let's face it, we don't really have the best education system in the world. In fact, it's quite inefficient. While our children are not being effectively taught math or science, we have also neglected to provide them with a real and honest education in history, civics, and economics.

Our lack of history allows for the public to easily get swept up with war rhetoric, our lack of economic education allows for an uneducated mass of people scratching their heads at a very complex but important economic crisis. Finally, the lack of civics has allowed us to continue to elect incompetent and corrupted leaders from the same two ruling parties.

Now this may be a generalization, but there is something fundamentally wrong with a two party system, especially when the public is so uneducated and apathetic toward the process. One of the biggest issues is local and congressional elections. In 2006 80,975,537 people cast their votes for the mid-term elections. The number of people eligible to vote was nearly 220,000,000 people (and the voter turnout that year was good relative to recent congressional elections before it). This means that well over half of the eligible population does not vote for our lawmakers, and an even smaller amount actually voted for the person who is suppose to represent a large portion of the public.

So here we are with a Republican switching to become a Democrat and most of the country doesn’t care. Why? Is it because they are lazy and apathetic? Many certainly are, but the majority of the people are just not educated very well. Many see two parties that do not realistically relate to most working class people. Democrats and Republicans are fundamentally the same, with small deviations on certain issues. Neither party represents or even tries to carry out the will of the people. Yet, these people remain in our government mostly through an ever-exhausting tradition.

The election of Obama put a lot of faith in the Democratic Party. In the end, as we are already seeing, the message of hope and change was a fabulous marketing strategy by the Democratics. To give credit to Obama, he has not deviated from his campaign. The issues that were discussed (although very rarely during the campaign), have been addressed consistently. The problem here is that elections are never about the issues because both candidates seldom have the same ideas as the majority of the public. The problem is that the majority of Americans want to fully leave Iraq (as oppose to keeping “non-combat” troops), they want the government to look into a single-payer health care system, most want the Bush administration to be brought to justice for torture. They want better education, more regulation and to address climate change. And the list goes on. The problem here is that many think that the president is the one to look to in order to carry out these initiatives. People need to have a better understanding of the democratic-republican process, and to make informative votes for congress. I don’t mean to suggest that voting is the main answer, in fact I think voting is somewhat useless in a two party system, but the two party system is not permanently embedded into the legal structure of the country. We do have the ability to create more parties; it will just take a deeper grassroots effort. We saw a huge grassroots effort with Obama, but once most of those people realize how Democrats and Republicans are all part of a very similar agenda, they will hopefully put their efforts towards real change in American politics.

Freedom and Love

I was going through some of my writings and I found a poem I wrote a few months ago:

“Freedom” is a term such as “love”; it carries many truths, but also many delusions. Both are used with such ambiguity, yet they also carry a variety of concrete meanings for many different people. Both terms are merely a construction, which have elusive definitions depending of course on who is defining it.

‘Freedom’ and ‘love’ are terms that can be easily compared
Both are used with such ambiguity,
Yet carry concrete ideas for a variety of people
Both terms are human constructions
That serve a multitude of functions
The idea of freedom keeps the people in check
As the idea of love keeps human survival in tact

Whatever one considers about these words
Is a consequence of past experiences
And a product of their social systems
Nevertheless, the true beauty in freedom and love
Is that regardless of one’s experiences
We all possess one invaluable freedom:

To revoke and reform external notions of ‘love’, as well as ‘freedom’ to fit our own preferences.

Lessons from the Great Depression

I decided my first post should be this essay I wrote about the Great Depression and our current economic crisis. It's very broad, but it touches upon a lot of ideas that I will most likely write about more thoroughly at a later date. Enjoy:

In understanding the current economic downturn, many pundits, reporters, and average citizens have looked at the Great Depression to calculate the severity of today’s crisis. Many have claimed that the world, particularly the United States, had lost its historical perspective and no one was able to predict the unfortunate events of 2008 that left the world economy in a tangled mess. In actuality there were many, such as New York University’s economics professor Nouriel Roubini, who did predict the housing bust, the trouble of sub-prime loans, the decline of consumer confidence, and the ensuing recession. Nevertheless, these predictions went unnoticed due to the large sum of quick cash being made around the world. Therefore, in trying to develop a recovery plan for a situation that increasingly looks more and more like the Great Depression, there needs to be a careful understanding of the Great Depression, its causes, and finally its recovery.

The most important thing to note about the Great Depression, as well as this crisis, is that there was no one single cause. Both affairs occurred due to many factors occurring under adverse circumstances. Even then, some may try to pinpoint “main” causes, but historians continue to dispute what factors should be emphasized when evaluating the causes of the Great Depression. Likewise, it is impossible to identify a prime cause for the current economic situation, especially since it is still unfolding. In mainstream thought, the Great Depression began after the stock market crash of 1929. This is dangerously short-sighted. If this were the only cause, we would be in an even more vulnerable position now because the stock market is considerably larger than it was in 1929. Thankfully, that was not the only cause of the Great Depression. Some historians may suggest that the origins of the Great Depression began during the industrialization of the late nineteenth century, but for our purposes we will begin immediately after World War I.

Just like our current economic crisis, there were those who predicted the Great Depression, but were ultimately ignored. John Maynard Keynes was one of those disregarded prophets. In The Economic Consequences of Peace, Keynes warns that the harsh penalties given to Germany after World War I would negatively affect the rest of the world economy. He writes, “If the European Civil War is to end with France and Italy abusing their momentary victorious power to destroy Germany… they invite their own destruction, being so deeply and inextricably intertwined with their victims by hidden psychic and economic bonds.” Unfortunately, the leaders of Europe did not listen to Keynes and the deep economic ties were exposed due to the harsh demands on Germany and Austria-Hungary. Similarly, all of the warning signs for our sharp economic downturn were ignored, despite several economists’ predictions. Furthermore, what Keynes recognized was that the world economy was too integrated for nationalism to have any sort of positive effect on the financial system. For the current crisis, there was no major war that exposed economic globalization; the profound global economic ties were known, but simply overlooked.

The economic ties of the 1920s, just like today, were essentially based on loans. After World War I the United States was considered the world creditor. They had loaned England so much money during the war, and England loaned so much money to France, Italy, Russia, and other allies. However, since all of these economies, except the United States, were devastated by the war, they looked for German reparations to help pay back Britain and the United States. To further confuse this economic mess, the German economy was in utter chaos, so the United States loaned Germany money to ease their incredible inflation and to help pay back the allied powers. This intergovernmental debt left the world economy in an unstable house of cards, waiting for one card to fall. The cards certainly began to fall rather quickly, and nearly simultaneously. From what is known about the current crisis, there is a similar intergovernmental credit disaster. In fact, it is even more complex than the one that led to the Great Depression. The private financial institutions of today devised a complex scheme of packaging loans and trading bad assets. It is commonly thought that this begins with the so called sub-prime loans that were packaged and traded by financial insurance companies. Since these companies are so global this mess has not only affected the United States; it has caused financial disaster to most of the world. In terms of overall national debt, in our current crisis, the players are reversed. It is the United States that is in enormous debt, and now it is Germany and China that are giving credit. In American thought, it is usually considered that the Great Depression was a product of the United States. This is clearly a fallacy, and one of the most important things we can learn from the Great Depression is that it was a global crisis, caused by global affairs.

The interconnectedness of the global economy was a main reason why the depression was so vast in scope, but historians have calculated many other causes for the downturn, and these causes are very comparable to today’s crisis. Four main factors that are considered are: consumption, investments, net exports, and government policies. The main argument for the “underconsumption” cause is that during the 1920s, labor production grew rapidly as a result of technological advances, but this increase was not reflected in rising real wages. Therefore, as productivity increased and more products were put out into the market, but people no longer had the means to purchase the products, there became a waste of capital and production. This argument for a Great Depression cause is very much comparable to today’s crisis. A study by the New York Times showed that real wages were at their lowest share of G.D.P. on record in 2006, while corporate profits were at their highest share since the 1960s. This disparity between real wages and corporate profits is significant, but certainly not the only cause of either economic downturn.

Like the current economic situation, the Great Depression had some roots in the housing market. Investment began to decline as early as 1926 following a housing boom. As Attack and Passall point out, this decrease in the housing market was in part caused by the slowing of immigration and the fewer number of families. Although the current crisis has much to do with the housing market, where it differs from the Great Depression is that this housing bubble burst due to the complicated and risky behavior of financial institutions. Another factor discussed by Attack and Passall is net exports. This factor more than any other shows how interconnected the Depression was. The United States had been the world’s leading industrial exporter, but after the war, the European market drastically declined. One way of addressing this problem would be for the United States to import more from Europe, but this was unrealistic because of the simple fact that the there were no European products that the United States wanted. After all, the United States was the leading industrial producer of the time, so there was no incentive for Americans to import from Europe. As mentioned earlier, the United States’ role is currently reversed. The problem of net exports is now that the United States is in the position of Europe. The United States has not been an exporter nation for many years, but in order to get out of their debt, like Germany needed in the 1920s, is to receive capital through exports. The problem is still the same, but reversed, with China in the United States’ prior role. There are no products that the United States could export to China, which would help America pay back their current massive debt.

As mentioned earlier, the Great Depression was not solely provoked by the stock market crash of 1929. These other factors allowed the crash to be so devastating, but it did not end there. The government understood that there was a significant recession and that they needed to take some action to ease the economic downturn. Unfortunately, the model that was used was the recession of 1920, which was very short and not exceptionally damaging. The thought at the time was that the 1929 recession would be very similar and the same policies would relieve the situation. Like other explanations for the depression there are contending views. Usually this falls into two different camps: the government did too much, or the government did too little. Under President Hoover, there were indeed public works projects and other government spending to try and offset decline in private consumption. In addition the government cut taxes to help stimulate the economy. These measures may have alleviated the situation at first, but by cutting taxes while spending, the government loses revenue. This led to a budget deficit of $2.7 billion in 1932. The solution to the deficit was to raise taxes, and to raise taxes in a time of recession ultimately makes the recession worse. According to this view, the failure of governmental policy exacerbated what might have been a less sever recession.

Since the current crisis is still uncertain, it is practically impossible to fully compare the eventual recovery of the Great Depression with today, especially since this is indeed only a comparison and not a suggestion that we are heading toward another Great Depression. However, the attempts that are being taken today to solve our economic problems certainly resemble the measures that were taken during the 1930s. The Obama stimulus plan, which is inevitably political, has taken measures to funnel money into education, environmental and energy issues, public works, and other spending that parallels the New Deal. Some of the New Deal spending is what created much of the infrastructure that we have today. The biggest lesson to learn from this is that the United States needs to maintain its infrastructure and continue to make innovations in areas such as transportation, construction, and energy sources.

Economics ultimately ends up being political. The current economic crisis is very much at the whim of how the United States responds. It is a global affair, but the United States has such a significant economy, but has also been slower to respond to the dilemma. This has been in large part due to a deep ideology and a trepidation about anything that might be considered “socialist.” The biggest lesson we can learn from the Great Depression is that we need to cut these deep rooted ideological ties and act in a pragmatic way to solve the current situation. Every economic crisis is different, and thus the responses should be made by understanding the situation and developing policies that are suitable to the problem. What worked for the Great Depression, most likely will not work today. In fact, what is considered the biggest factor that led the world out of the Depression was the military industry and World War II. Today, the United States spends more money than any other nation on the military. In fact out of every tax dollar, 37 cents is used for the military. Therefore, this crisis needs to be treated carefully and new ideas need to be allowed into political economic thought. History does not repeat itself, but what we can learn from the past is that every action we have today will drastically affect the future in ways we need to take very seriously. We can either look at the Great Depression as a looming potential reality for the future, or use it to learn the complexities of not only the economy, but also of human and political actions.

Why Blog?

I decided to start this blog for several reasons:

1) I want to keep up on writing while I'm out of classes, and this gives me a great outlet.
2) I feel as though I have an interesting outlook on history, politics, economics, and culture, that I would like to share with others and hear other opinions outside of my own.
3) This is a much better use of the internet than looking at videos of people playing with feces, or following other nauseating aspects of our culture.

So, with that in mind I hope I can attract some readers, and that I can offer an interesting perspective on life, or at least what our collective consciousness calls reality. I also hope to hear opinions and feedback on my writing and ideas. To those who will read, enjoy!

Cheers.