Politics, et Cetera
A publication from The Political Forum, LLC
Tuesday, June 25, 2013
They Said It:
LINDA: Willy, dear. Talk to them again. There’s no reason why you can’t work in New York.
WILLY: They don’t need me in New York. I’m the New England man. I’m vital in New England.
Arthur Miller, “Death of a Salesman,” 1949.
THE GNOSTIC DREAM WORLD, REDUX.
Last week, after publishing our piece on immigration, we worried that perhaps we had gone a little too far. After all, it is one thing to document and describe the American Left’s political naiveté and frivolousness in the abstract. It is something else altogether to tie that abstract madness to concrete policy proposals. When one tries, as we did last week, to make the case that political actors are not acting rationally and are instead pursuing furtive, obscure, and purely ideological ends, one runs the risk of seeming a little mad and irrational; of appearing to succumb to conspiracy theories and losing sight of any substantive and earnest political discourse.
The idea that the contemporary political Left is motivated to adopt “dream world” policies – i.e. policies that make no practical sense whatsoever in light of their true impact on domestic and geopolitical realities – is hardly unique and hardly original on our part. Indeed, Eric Voegelin’s The New Science of Politics – the book from which the “dream world” concept comes – was published over sixty years ago and has been a mainstay of the conservative critique of liberalism ever since. Still, to argue that the President and the Congress of the United States are pushing immigration reform on a reluctant nation exclusively in pursuit of the “post-War, post-modern, multiculti paradigm” is to run the risk of looking foolish. Or worse.
Enter Barack Obama.
As you likely know, our illustrious leader spent last week plodding through Europe, doing his very best to rehabilitate the image of former President George W. Bush, simply by making himself look so awful and ridiculous by comparison. Not only did Obama stir up old religious and sectarian animosity in Northern Ireland by declaring that religious education is analogous to segregation in the pre-Civil Rights American South, he also managed, somehow, to confuse the British Chancellor of the Exchequer, George Osborne, with a washed-up R&B singer, calling the former Jeffrey on three separate – and very conspicuous – occasions. This, we suppose, must all be part and parcel of the “smart diplomacy” we’ve been hearing about for just over five years now.
For our money, though, the best part of Obama’s excellent adventure was his triumphant trip back to Berlin’s Brandenburg Gate, where he had addressed a crowd of nearly a quarter million during the 2008 presidential campaign, thus affirming his position as the biggest and most influential celebrity in the world at the time. This time, however, the crowd was two orders of magnitude smaller and consisted wholly of “carefully selected” people who, it seems, had been extended an offer to take in the celebrity-president’s return engagement that they couldn’t refuse.
Indeed, we suspect that many of those in attendance would have preferred to listen to the smooth stylings of Jeffrey Osborne, or even the somewhat less-smooth stylings of tax-avoidance expert Chancellor George Osborne. But no such luck. They got Barack Obama instead. And he stood before the world and a handful of bored souls who couldn’t muster the excuse of a previous commitment and boldly declared that he would like to end the scourge of the Russian-American nuclear arms race!
Now, we know what you’re thinking. Is it 1985 again? Did Obama get hit on the head? Does he think it is 1985 again? Sadly, the answer to all of those questions is the same. Nope. It’s worse than that. He actually thinks that Russian nuclear disarmament matters. Charles Krauthammer called the President’s nuclear policy the “least important issue on the planet.” And that may well be true. But it is the most important issue in the “dream world.” Try to keep up, Chuck!
Obama – bless his heart – didn’t stop with nuclear disarmament. He prattled on . . . and on, covering nearly the whole list of “least important issues on the planet,” including “peace with justice,” “instability and intolerance,” and, of course, “climate change,” which, Obama insists – evidence to the contrary notwithstanding – threatens the world with “famine and floods, new waves of refugees, coastlines that vanish, [and] oceans that rise.”
What’s that? Oceans that rise, you say? Didn’t that stop the day that “The One We’ve Been Waiting For” won the Democratic nomination back in 2008? We could have sworn we heard that somewhere. Our mistake, we guess.
The reviews of Obama’s speech were universally awful. MSNBC’s Chris Matthews was so upset that he declared the sun an enemy of the state, insisting that this awful oration by the world’s greatest orator was the fault of the sunshine, which made The One’s teleprompter nearly impossible to read. The aforementioned Charles Krauthammer somewhat less charitably (and less insanely) called the speech “empty, self-indulgent, anachronistic, and adolescent.” Nile Gardiner of London’s Telegraph wrote that Obama’s address was “pure mush” and that “there was little in this speech that advances US interests or makes the world a safer place.” Frankly, we think Mr. Gardiner was being kind. Of course, he also missed the point. George Will, like Krauthammer, was astounded by Obama’s ego. He was also shocked at the danger posed to the President, to the country, and to the world by the blind sycophancy exhibited by Obama’s staff. To wit:
Obama’s vanity is a wonder of the world that never loses its power to astonish, but really: Is everyone in his orbit too lost in raptures of admiration to warn him against delivering a speech soggy with banalities and bromides in a city that remembers John Kennedy’s “Ich ben ein Berliner” and Ronald Reagan’s “Tear down this wall”? With German Chancellor Angela Merkel sitting nearby, Obama began his Berlin speech: “As I’ve said, Angela and I don’t exactly look like previous German and American leaders.” He has indeed said that too, before, at least about himself. It was mildly amusing in Berlin in 2008, but hardly a Noel Coward-like witticism worth recycling.
His look is just not that interesting. And after being pointless in Berlin, neither is he, other than for the surrealism of his second term.
Like Gardiner, Will was, frankly, too kind. And also like Gardiner, he missed the point. The fact of the matter is that nobody in Obama’s orbit knows that these are “banalities and bromides.” Nobody in Obama’s orbit understands that nuclear disarmament with Russia is not merely pointless but stupid as well. Nobody in Obama’s orbit “warns” him of anything having to do with his nutty priorities and fantastical beliefs . . . because they all share them! Gardiner worries that Obama didn’t advance US interests? Is he kidding? Advance US interests? Why would Obama do that? US interests are the cause of all the world’s problems, not the solution. Have these guys not been paying attention for the last five years?
Michael Goodwin, writing for the New York Post, laments that Obama’s speech amounted to a declaration of dissociation from reality:
It was as if he was trying to turn attention away from the present dangers by floating a tired vision of Hope & Change.
Forget the world as it is, let’s dream about the world we want. Maybe throw a little pixie dust in the air and wish for a pony, too.
You don’t say?
Goodwin is right about the dynamic at work here. He nonetheless joins the rest in missing the point, as he seems believe that there’s something comical or peculiarly novel about Obama’s retreat to a fantasy world. This is a mistake, a dangerous and foolish mistake at that.
The problem with the Left’s dream-world interpretation of events isn’t that it’s silly or crazy or even stupid. The problem is that these silly, crazy, and stupid interpretations lead to very serious and often very damaging real world consequences. When one applies dream world analyses to real world problems, in short, the result is disaster. Voegelin explains:
In the Gnostic [read liberal] dream world . . . nonrecognition of reality is the first principle. As a consequence, types of action which in the real world would be considered as morally insane because of the real effects which they have will be considered moral in the dream world because they intended an entirely different effect. The gap between intended and real effect will be imputed not to the Gnostic immorality of ignoring the structure of reality but to the immorality of some other person or society that does not behave as it should behave according to the dream conception of cause and effect . . .
Gnostic politics is self-defeating in the sense that measures which are intended to establish peace increase the disturbances that will lead to war . . . If an incipient disturbance of the balance is not met by appropriate political action in the world of reality, if instead it is met with magic incantations, it may grow to such proportions that war becomes inevitable. The model case is the rise of the National Socialist movement to power, first in Germany, then on the continental scale, with the Gnostic chorus wailing its moral indignation at such barbarian and reactionary doings in the progressive world – without however raising a finger to repress the rising force by a minor political effort in proper time . . . These policies were pursued as a matter of principle, on the basis of Gnostic dream assumptions about the nature of man, about a mysterious evolution of mankind toward peace and world order, about the possibility of establishing an international order in the abstract without relation to the structure of the field of existential forces, about armies being the cause of war and not the forces and constellations which build them and set them into motion, etc.
Consider, if you will, the real-world implications of Obama’s agenda, as presented in his Brandenburg Gate speech.
When Obama offered to cut American nuclear weapons in exchange for the same from the Russians, what, do you suppose, was Vladimir Putin’s reaction? It’s hard to say, obviously, but we suspect that he giggled. Then he guffawed. Then he fell out of his chair and rolled on the ground in an uncontrollable fit of laughter.
Russia and the United States are indeed at loggerheads in geopolitics today. But this conflict has nothing whatsoever to do with nuclear weapons, or at least nothing to do with American and Russian nuclear weapons. As we’re certain you know, Putin’s Russia is the chief sponsor of the Iranian nuclear weapons program. It is also one of two chief suppliers of munitions and support to the Assad regime in Syria. The offer by Obama to deal with Putin on an irrelevant issue was all but certainly viewed in Moscow – as well as in Tehran and Damascus – as an admission of weakness, a demonstration of Obama’s inability to address any relevant, real-world issues, namely the ongoing Syrian civil war, the ongoing Iranian nuclear weapons program, and the ongoing support of Russia for both. Putin, of course, has always considered Obama a weak and feckless adversary. After the Brandenburg Gate speech, though, he now knows him to be indecisive, feeble, and little more than a long-winded nuisance.
Worse yet, the rest of the world also now knows him to be indecisive, feeble, and little more than a long-winded nuisance. And while this has a modicum of entertainment value, given Obama’s exaggerated sense of his own political prowess, it has serious implications throughout the globe, especially in the Muslim world.
Obviously, for example, the Syrian regime knows that it is under no real threat from the Obama administration. The President with the Muslim middle name may talk a good game (though even that is debatable), but he doesn’t have the heart to do much other than talk. The Iranians can continue to supply Assad and continue to push on toward the “nuclear club” without much worry about repercussions. Likewise, in Egypt, the Islamic Brotherhood and its newfound friends in the military know that they have a free hand to do whatever they deem necessary to bring their restive population under control. Again, they know that there will be no repercussions.
In Afghanistan, the message is both clear and deadly. The Obama team has already announced its intention to leave the country, much as it left Iraq. It has also announced plans to strike a “peace deal” with the Taliban on the way out the door. The administration line is that the Taliban’s real crime was harboring al Qaeda. And now that al Qaeda is largely gone from Afghanistan, the Taliban can be considered rehabilitated. Never mind that even as the Obama administration courts the Taliban in “peace,” the Taliban continues to murder American soldiers and even mountain-climbing tourists. And why should they stop? What’s the indecisive, feeble, bed-wetter going to do about it?
Of course not only the world’s bad guys have noticed. The good guys – or what passes for good guys in that part of the world – have noticed as well. Hamid Karzai, the president of and therefore the Unites States’ ostensible ally in Afghanistan, for example, has put the brakes on Obama’s Taliban peace initiative, demanding changes to the process. We suspect that what he really wants is time to launch his own, back-door process, one that will protect him and provide him with new friends, once his American pals bug-out.
In Saudi Arabia, Jordan, Turkey, and Israel the truth about Obama’s friendship and support is, at last, beginning to sink in. Syria is now more than a localized civil war. It is, rather, the flashpoint for a regional war between the Sunnis and the Shiites, with Iran and Hezbollah seeking to maintain and expand Shiite influence, while the Saudis, Turks, Egyptians, and Jordanians seek to counter with Sunni extremism. In the end, Iran’s nuclear ambitions will likely also be met directly, with the Saudis and their Gulf compatriots using their massive oil wealth to buy their own bomb.
The Israelis, for their part, can’t be too excited about either outcome. An ascendant and nuclear Islamic Republic is frightening, but so, for that matter, is an ascendant and nuclear Wahhabist Middle East. More frightening still is the idea of having to address these potential developments on their own. It has been four decades since the Israeli government was unsure of the level and nature of support that it would receive from the United States, and it would hardly surprise anyone if the Netanyahu-led government were making serious and potentially region-shattering plans for its survival without American aid. Indeed, we’d be surprised if it weren’t.
On the home front, as we noted last week, Obama is currently pursuing immigration “reform.” And as he noted himself in his Berlin speech, he is also quite interested in using the power of the regulatory state to address the dreaded problem of global climate change. Indeed, despite the fact that even the New York Times has been forced to admit that global warming has been on “pause” for the nearly the last two decades, Obama is set to issue new regulations this week that will purportedly address climate change. And as the Wall Street Journal reported over the weekend, these regulations are going to be far more onerous than almost anyone expected:
President Barack Obama, in a speech on Tuesday, will announce his intent to regulate emissions from existing power plants as part of a broader effort to curb carbon pollution and confront the effects of global warming, people familiar with the speech said.
The Obama administration is developing rules to regulate new power plants. Environmentalists, part of the president’s political base, have been pressing him to also target emissions from existing coal-fired power plants.
Regulations affecting existing power plants could require deep cuts in emissions from coal-fired units and are virtually certain to draw a legal challenge from the coal industry.
In Obama’s dream-world, of course, cutting emissions will save the globe, “slow the rise of the oceans,” “heal the planet.” And passing immigration “reform” will bring justice both to the immigrants who have moved here in contravention of unjust laws and to the racist, xenophobic reactionaries who think that national borders should be regulated and enforced. And all of this, in turn, will facilitate the march toward a noble and tolerant world government managed by dutiful and enlightened philosopher kings.
But how will it all affect the country in the real world? The New York Times’ token conservative Ross Douthat attempted recently to answer that very question:
[O]n the issues that Americans actually prioritize — jobs, wages, the economy — it’s likely that both immigration reform and whatever the White House decides to do on greenhouse gases will make the short-term picture somewhat worse. The Congressional Budget Office’s recent analysis of the immigration bill errs on the side of optimism, but it still projects that the legislation would leave unemployment “slightly elevated” through 2020, and average wages modestly reduced. Given that similar estimates greeted the Waxman-Markey cap-and-trade bill in 2009, it’s reasonable to assume that carbon regulations would slightly raise the unemployment rate as well.
These costs might be more acceptable in a world where Washington was also readying, say, payroll tax relief for working-class families, or measures to help the long-term uninsured. But since those ideas currently lack constituencies in the capital, we’re left with the peculiar spectacle of a political class responding to a period of destructive long-term unemployment with an agenda that threatens to help extend that crisis toward 2020 and beyond.
Now, there may be some who see an uptick in unemployment as a modestly good thing, in light of the fact that the Fed is openly targeting this indicator. Our guess, though, is that most Americans will not. They will see increased legal, low-skilled immigration, increased energy costs, increased compliance costs, and therefore ongoing elevated unemployment and depressed economic growth as bad things. Does Obama care? Does the Leftist political establishment care? Heck, does the Republican political establishment? Again: no, no, and no.
Over the next 12 months, the proverbial caca is going to hit the fan on several fronts, foreign and domestic. Obamacare, for example, will be fully implemented. And when it is, the liberal “dream” of universal, free health care will be realized with massive premium increases, massive non-compliance, and a massive mess.
And the best part about of all this is that here is where it will get really sticky and really dangerous. There is no chance whatsoever that Obama – or the rest of the Left, for that matter – will leave the dream world, no matter how badly his policies fail or how bad things become. As Voegelin wrote, in the dream world, “the critical exploration of cause and effect in history is prohibited; and consequently the rational coordination of means and ends in politics is impossible.”
Our sad, little Willy Loman-esque president likes it in the dream world, where he can fantasize about his greatness and blame the world’s unfairness and depravity for the failure of reality to conform to his greatness. He’s been living in the dream world all his life, after all, drank it in like mother’s milk, so to speak. Rather than deal honestly with the fact that he’s become a joke – and the butt of others’ jokes – Willy Obama will instead stand tall and mock his critics for their stupidity, their stubbornness, and their moral failings, even as the world crumbles in on him. That’s how things go in the lunatic asylum of the Gnostic dream world.
DETROIT, MUNIs, AND THE 21st CENTURY RESOURCE WARS.
In the Spring 2013 issue of the Claremont Review of Books, Michael Barone, one of the best and most recognizable conservative commentators and essayists working today, had an insightful and, frankly, troubling piece on his political conversion and the city that caused it. To wit:
When people ask me why I moved from liberal to conservative, I have a one-word answer: Detroit. I grew up there, on a middle-class grid street in northwest Detroit and a curving street in affluent suburban Birmingham, and I got a job as an intern in the office of the mayor in the summer of 1967 when Detroit rioted. I was at the side of Mayor Jerome Cavanagh and occasionally Governor George Romney during the six days and nights in which 43 people, mostly innocent bystanders, died. I listened to the radio in the police commissioner’s office as commanders announced, shortly after sundown, that they were abandoning one square mile after another. The riot ended only after federal troops were called in and restored order . . .
Liberal policies promised to produce something like heaven. Instead they produced something more closely resembling hell. You can get an idea of what happened to Detroit by looking at some numbers. The Census counted 1,849,568 people in Detroit in 1950, including me. It counted 713,777 in 2010 . . .
Who is responsible for all this? . . .
I blame the ambitious liberalism of the Cavanagh years, which I believed in at the time, and the 20-year rule of Coleman Young, mayor from 1973 to 1993. Young was smart, funny, and politically ruthless, with a background in left-wing unionism . . . As mayor he disbanded the police department’s stop-and-frisk unit. Crime soared and Devil’s Night became a Detroit institution. Young occasionally denounced black criminals. But much more often he denounced white suburbanites and in his autobiography, published after he left office, savaged white homeowners who left the city. His economic strategy was to ally with the big auto companies and the UAW, just as their business model was undermined by foreign-based competitors. He got the Big Three automakers to finance the 70-story Renaissance Center, physically disconnected from the rest of downtown, and tore down a viable white neighborhood to make room for General Motors’s Poletown plant. The great northward migration of Southern blacks quadrupled Detroit’s black population from 149,000 in 1940 to 660,000 in 1970. The high crime rates of the Young years reduced its non-black population from 853,000 in 1970 to 250,000 in 1990; it was down to 125,000 in 2010.
Liberal city government is expensive—Cavanagh instituted a city income tax raised later to 2.5%—and increasingly ineffective. The Detroit News reported that 47% of property owners didn’t pay their 2011 property tax. The public employee unions, just starting up in the Cavanagh years, have long been pushing for salaries, benefits, and pensions that are increasingly unaffordable. So the city has let its physical facilities go to ruin . . .
Young complained about white flight, but that’s not much of a problem any more. Hardy urbanites are trying to reclaim neighborhoods around downtown and Wayne State University for their hip form of civilization and may succeed. Now blacks are fleeing. Detroit’s black population peaked at 777,000 in 1990; it leveled off to 775,000 in 2000 and plunged to 590,000 in 2010. Blacks with decent jobs and steady habits have been moving to the suburbs or back to their grandparents’ South, and those who remain tend to be the people with no good alternative and no hope. Those who have visited both Detroit and Hiroshima will have trouble guessing which country won that war.
Regular readers know that we have spent a great deal of time discussing Detroit and its imminent collapse over the last couple of years. The question now is why does Detroit matter? So it’s a failed city. So it’s an example of 20th century liberalism gone wrong. So . . . what? Why should anyone outside of Michigan care one whit about Detroit?
The answers to those questions and more can be found in the near and long-term effects of Detroit’s financial collapse, which will all but certainly destroy for good one or both of two enduring features of American urban governance, namely public sector unionism and the municipal bond market. Last week, the New York Times explained the battle lines that are forming:
Detroit, appears to be on the brink of filing for bankruptcy, but there is little talk of sharing the pain. Instead, the fiscal crisis in Michigan is setting up as a gigantic clash between bondholders and city retirees.
The city’s proposals, which could give some bondholders as little as 10 cents on the dollar, are making some creditors think they would be better off in bankruptcy. They see the specter of a federal judge imposing involuntary losses as less ominous than it was for New York.
“The haircut is so severe,” said Matt Fabian, a managing director of Municipal Market Advisors, “I think it’s scaring them into bankruptcy, rather than away from bankruptcy.”
But city retirees, facing the prospect of sharply reduced benefits whether in bankruptcy or under Detroit’s restructuring proposal, think they stand squarely on the moral high ground because despite the poverty of many current and retired members, they have already offered big concessions.
“It’s not the employees that are costing the city money,” said Edward L. McNeil, an official with the American Federation of State, County and Municipal Employees who is leading a coalition of 33 unions that will be affected by any restructuring of Detroit’s debts, which total roughly $17 billion. Just last year, he said, those unions offered concessions that could have saved the city hundreds of millions of dollars a year. But Detroit “botched the implementation,” he said.
Now, long-time readers will recognize this as yet another battlefield in the “war for resources” that we predicted three years ago and that we said would characterize the collapse of the New Deal social model over the next couple of decades. What’s new and interesting about this front in the war is one potential victim, one whose losses may well inhibit municipal governance in very serious ways for a very long time to come.
When we first wrote about this war, back in the summer of 2010, we suggested that the likely victims would include: “the electorate,” which will “give (and give . . . and give) in the form of substantially higher taxes”; “the public sector,” which will be compelled “to accept force reductions, lower wages, and reduced pensions and other beneﬁts”; and public-sector retirees, who have come to rely on municipal governments for health care and pensions, but whose costs – so-called “legacy costs” – will spiral out of control and will leave towns and cities with enormous budgets and little in return for the expense.
What we didn’t fully expect then – but admittedly should have – was the impact that all of this could have on the municipal bond market. If bondholders get screwed – as they did when the Obama administration liquidated General Motors’ debt – it will suddenly become very, very difficult for municipal governments to do much of anything, largely because their cost of borrowing will necessarily skyrocket. And it now appears quite likely that bondholders will, in fact, get screwed. Bloomberg News reports:
Emergency Manager Kevyn Orr’s plan to suspend payments on $2 billion of Detroit’s debt threatens a basic tenet of the $3.7 trillion municipal market: that states and cities will raise taxes as high as needed to avoid default.
Orr, appointed by Republican Governor Rick Snyder to oversee Michigan’s largest city, proposed a deal last week that included skipping a $39.7 million payment on pension-obligation debt. The city is also set to default on unsecured unlimited-tax and limited-tax general-obligation bonds as it grapples with $17 billion in liabilities to avoid a record bankruptcy.
By calling into question the safety of any security backed by a government’s general obligation to pay what it owes, Orr, 55, imperils similar debt across Michigan, the eighth-most-populous state. As local governments strive to rebound from the longest recession since the 1930s, they may confront higher borrowing costs.
“It definitely sets a precedent, and there’s definitely going to be a penalty going forward for the city and the state,” said Dan Solender, director of munis at Lord Abbett & Co. in Jersey City, New Jersey . . .
The biggest surprise is Orr’s willingness to skip payments on interest and principal owed on unlimited-tax general-obligation bonds, said Matt Fabian, a managing director at Concord, Massachusetts-based Municipal Market Advisors.
Paying less than 100 cents on the dollar would “rock the market,” said Tamara Lowin, director of research for Belle Haven Investments in White Plains, New York.
Unlimited bonds – unlike limited bonds – are considered “secured” debt, which is to say that Detroit’s refusal to pay would utterly destroy the confidence and the trust that underpins the municipal bond market. And then everyone will pay, or as Tamara Lowin puts it, “It will certainly affect all the debt of struggling governments in Michigan, if not nationally.”
And that, we think, is the big take away. The fact of the matter is that Detroit is anomalous in that it has fallen so far so fast. But that is not to say that it is an anomaly in being way over its head in debt; indeed, so far over its head that it will disrupt municipal governance nation-wide.
The bottom line here is that Detroit appears to be merely a preview of the future. It happened in Stockton. It’s happening in Detroit. And it will happen again somewhere else. And then it will happen again. And again. And again. And then it will happen at the state level . . . And it will snowball as borrowing becomes more difficult and as borrowing costs rise. New York, for example, may be making ends meet today, but add 300 basis points to the city’s borrowing costs? Good luck with that.
Back in 2010, we noted that “the early stages of this war have been relatively mild, and the worst is all but certain to come . . . Eventually, the bill will come due.”
The bill is coming due in Detroit. And everyone is going to suffer. The bill will come due elsewhere as well. And there will be more suffering. Pensioners, union employees, state-government lifers, and the municipal bond market will all suffer because of the failure of the liberal model of governance.
There’s a war on, remember. And it’s about to escalate.