Pondering the palimpsest and panoply of the planet.

Archive for the category “Politics”

A Poem for Syria

While the people were shopping, the bombs were dropping,

while the tanks were rolling, the people were strolling,

while the babies were crying, the people were buying,

while the people were sleeping, the mothers were weeping.

The Political Importance of the Liberal Arts

We have heard much about the relative decline of the American education system over the past decade (or two, or three). While there is much truth to these various assertions and statistics that document the decline, there have been a wide-range of different diagnoses of the root source of this general decline, as well as different proposed solutions. A common political response is broad rhetoric calling for an increase in development of the so-called STEM fields– Science, Technology, Engineering, and Mathematics. The last two American presidents have both specifically cited this solution in their State of the Union addresses, and have both increased funding for organizations and initiatives in these fields. Additionally, work visas for immigrants to the US are more readily available to applicants with a skilled background in the STEM fields. The thinking is that this type of expertise is necessary for innovation, and that this innovation will drive the economy and secure the future for the ‘winners’ of the most well-educated nation competition. All of this information is rather uncontroversial, and I certainly have no problem with more focus and funding for education on any kind, whether it is STEM-oriented or otherwise. An objection I have, however, is that the emphasis on STEM field competition seems to be in danger of becoming a sort of Zero-Sum game, in which a top-down political and corporate mandate for more STEM education means a corresponding decrease of perceived importance or respect for other fields or types of education that may not seem to lead to instant innovation or economic dynamism. I am speaking especially about the cultural fields of education known as the Liberal Arts, or the Humanities.

The Liberal Arts encompass areas such as History, the Arts (Performing and Visual), Literature, Languages, and Philosophy, among many more. If we wanted to compare them with the STEM fields on more equal footing, we would need to call them by an easily-understood acronym– HALP (or perhaps HALLP?). Since this obviously not very appealing, we will stick with either of the classical phrases of Liberal Arts or Humanities. The original Latin meaning of artes liberales signifies what was thought necessary for a free citizen to study. This is exactly the case I would like to make here in regards to the political importance of the Liberal Arts.

I would characterize professional, technical, or vocational curricula as various types of training, with a goal of developing specific skill-sets for a particular employment. The areas of the Liberal Arts, however, lead to a more universal and well-rounded education. In this sense, Education, derived from its original Latin meaning of “leading out of”, is conducted not for any specific end in itself, other than a more general and complete individual intellectual development and understanding of the world. I would argue that a person with this type of education could be taught virtually any skill with a certain amount of training, but that education itself is a more profound and long-term (ideally lifelong) personal development.

Once again, I have no problem at all with the emphasis on the advanced training in the STEM fields, but I am afraid that, in the current social and political environment, this emphasis can lead to a drastic undervaluing of the conception of a more universal education as represented especially through study of the Liberal Arts. The USA is fortunate to have a strong system of universities which still maintain a rich Liberal Arts tradition. I do not think this system can remain strong indefinitely given the social and financial pressures. When I was entering college over a decade ago, I knew that I wanted to do my ‘major’ in History, not because I was planning for any specific future employment but because I liked it and was interested in it (a quick glance at the topics on this website will reveal that I still hold this and other humanistic interests). In a scene that has no doubt occurred to many students countless times over the past decades, I was always asked by acquaintances and interlocutors “what I wanted to do with that degree after I graduated…become a teacher?” It is maintained by many folks that someone who studies history is either unemployable, or can only work as a teacher (in history, of course). The pressure is great to spend the valuable formative years on training that leads to employment, rather than education that is interesting and intellectually and personally fulfilling.

I recently returned to school and earned a Master’s degree, which was quite rewarding for me even if it did not directly lead to new or higher-paying employment, or necessary on-the-job skills. In the United Kingdom, where I studied, I became aware of the fact that upcoming budget cuts from the government would slash and burn a number of departments throughout the university system. My own department of Classical Studies would soon be phased out permanently, as well as several modern language programs and countless others. This is a failure of leadership.  In America, while I am happy that STEM fields are apparently receiving better funding and support, I have to take strong issue with the harsh budget cuts at the federal, state, and local levels. For shamefully short-sighted reasons, a number of politicians feel that the best way to make up for their (mostly self-inflicted) budgetary shortfalls is to cut funding for education. It is inconceivable how people could be elected or certainly re-elected who support such measures. Many politicians consider the enormously outsized and wasteful military budget to be sacrosanct, while having no qualms in cutting off any education programs whatever (not to mention the select few who want to eliminate the Department of Education altogether). I would submit that re-allocating even 10% of the monstrous “defense” budget towards education would be a more efficient, forward-looking, ethical, and a valuable use of public funds (and who could disagree that a more well-educated population itself would do more for the ‘defense’ of a country than the newest redundant fighter plane or missile). I will rest my case (and my rant) with the support of the two charts below.

Back to the topic at hand, I maintain that education, especially universal liberal education, is necessary for the maintenance of a healthy democratic society. This is exactly the position of American philosopher and educator John Dewey (1859-1952), who was one of the most important and influential theorists and reformers of modern school systems (not only in America, but in Turkey and China). In several books, especially his 1916 Democracy and Education, Dewey describes how education should be a synthesis between the needs of the individual and the society, whose ultimate aim is to teach a person how to live. As a tireless defender of democracy, Dewey knew that a well-educated population was necessary for the survival of an ordered society. For example, without learning how to think independently and use critical judgment, how can a person be expected to choose leaders or public policies? This type of independent and critical thinking, as well as broad cultural and historical perspective, is developed especially through engagement with the Liberal Arts. Dewey’s progressive style of education fell somewhat out of favor during the Cold War, when technological and scientific education was promoted as essential for national survival (e.g.: the “Sputnik” moment and the Space Race). With the political, financial, and rhetorical emphasis now finding favor with the STEM fields, it is, in my opinion, imperative to not lose sight of the importance of liberal, progressive, humanistic studies as well. While better STEM training can lead to technological, industrial, and economical growth and innovation, a more universal Liberal Arts education can lead to a stronger Democracy– that is, a body politic that is curious, cultured, creative, and critical.

(For some further reading, I can endorse these related opinions about justifying culture by Alain de Botton, why knowledge is not about securing a gain on student debt by Emmanuel Jaffelin, and how higher education became corporatized.)

The Techniques of Propaganda

It’s so easy for propaganda to work and for dissent to be mocked.

–Harold Pinter, playwright and winner of the 2005 Nobel Prize for Literature

It can be difficult to differentiate what defines propaganda as opposed to other forms of persuasion. Propaganda tends to have a level of subjectivity or lack of partiality that allows for its sympathetic interpretation of merely ‘education’ or ‘information’ if it is ‘our side’ who does it, while carrying the negative connotations of the word ‘propaganda’ if it is ‘the other side’ that does it; basically, we understand it depending on whether it comes from Us or Them. In a book by Garth Jowett and Victoria O’Donnell, propaganda is defined as “the deliberate, systematic attempt to shape perceptions, manipulate cognitions, and direct behavior to achieve a response that furthers the desired intent of the propagandist.” In general, it is safe to say that propaganda can be considered a one-sided and biased informational message that appeals to the emotions rather than the intellect. Traditionally, most forms of propaganda have appeared as some form of print media, such as posters, pamphlets, newspapers, etc, while the growth of technology has facilitated its use into radio broadcasts, television, film, and internet. Another aspect to keep in mind is the similarity between propaganda and advertising.

There are a number of problems with propaganda prima facie, but I will contend that its right to exist is not one of them. Since propaganda is subjective, it cannot legally or practically be separated from the right to engage in free and open speech. Problems arise only when propaganda incites violence or hatred, or when the means of propaganda becomes concentrated in too few hands, so that free speech and discussion is subverted. Both of these characteristics lead inexorably towards a totalitarian state, as can be seen in Communism/Stalinism and Fascism/Corporatism (according to Mussolini, “Fascism should more properly be called Corporatism because it is the merger of state and corporate power”). Therefore, all speech inciting hatred/violence/intolerance must not be tolerated (as I discussed here in my previous post). Even more importantly, perhaps, there should be a highly diverse, independent, and critical media.

This latter point is important because the influence of propaganda can only be mitigated when there is ample information available in an open marketplace of ideas that can challenge the monopolization of propaganda by any particular interest group. According to a 2012 study by Freedom House, roughly one third of  countries have a Free Press, one third Partly Free, and one third Not Free. Today in China, for example, all media is state-controlled and the internet is censored (and this in a country of 1.4 Billion). In Russia, the media is heavily controlled and intimidated by the de facto single party. In America, while the situation is obviously not so grave (the USA is ranked 22nd out of 197 countries in press freedom), there have been some rather disquieting trends, however. In the last 30 years, especially since the Reagan administration, the number of major corporations that control almost all of the American media market has dropped precipitously from 50 to a mere 5. The dissemination of information, therefore, has been concentrated in fewer and fewer hands, with a corresponding diminution of diversity of information and opinion. Thus, the propaganda that is now spread by these few corporations is more powerful, more difficult to challenge, and more difficult for normal citizens to detect truth from lies. See this interesting article on the website Truth-Out for more information on the centralization of informational control. Additionally, the competition between the more powerful media interests becomes more fierce and more partisan, leading to less nuance and rationality in political discussions, and more demonizing of those who have different opinions.

We have seen all of these things happening in America recently. With the elections approaching in November, we will see yet more polarization of all political issues into narrow corporate interests for one side or the other. The fact that unlimited and secret money can be spent on this propaganda ensures that things will get much worse before they get better. The only solution is an educated and aware citizenry who judges issues on their merits and not on emotional propaganda. Fortunately, in America, the internet is not yet censored or controlled by the major media corporations, and is therefore the best place to gather and evaluate information in an objective and productive way. (For more information on the deeper issue of social control through propaganda, which I am not prepared to discuss at this time, see for example Noam Chomsky’s 1988 book Manufacturing Consent [excerpts here]).

The captivating Wikipedia article on propaganda lists 52 specific distinct techniques for generating propaganda and manipulating the receivers of the message. Ideally, I would like to have given some specific examples of how they are each used to influence or misinform people in practice, but in the name of brevity and the maintenance of at least nominal objectivity, I will leave it up to you to use your own imagination. Hopefully, you will also be more on the lookout for such techniques in the media at large (including advertising, which is often indistinguishable from propaganda). If we recognize it and understand it rationally, it already loses much of its power and allows us to maintain more political and intellectual independence.

Ad hominem
A Latin phrase that has come to mean attacking one’s opponent, as opposed to attacking their arguments.
Ad nauseam
This argument approach uses tireless repetition of an idea. An idea, especially a simple slogan, that is repeated enough times, may begin to be taken as the truth. This approach works best when media sources are limited or controlled by the propagator.
Appeal to authority
Appeals to authority cite prominent figures to support a position, idea, argument, or course of action.
Appeal to fear
Appeals to fear and seeks to build support by instilling anxieties and panic in the general population, for example, Joseph Goebbels exploited Theodore Kaufman’s Germany Must Perish! to claim that the Allies sought the extermination of the German people.
Appeal to prejudice
Using loaded or emotive terms to attach value or moral goodness to believing the proposition. Used in biased or misleading ways.
Bandwagon and “inevitable-victory” appeals attempt to persuade the target audience to join in and take the course of action that “everyone else is taking”.
Big Lie
The repeated articulation of a complex of events that justify subsequent action. The descriptions of these events have elements of truth, and the “big lie” generalizations merge and eventually supplant the public’s accurate perception of the underlying events. After World War I the German Stab in the Back explanation of the cause of their defeat became a justification for Nazi re-militarization and revanchist aggression.
Black-and-white fallacy
Presenting only two choices, with the product or idea being propagated as the better choice. For example: “You’re either with us, or against us….”
Classical conditioning
All vertebrates, including humans, respond to classical conditioning. That is, if object A is always present when object B is present and object B causes a negative physical reaction (e.g., disgust, pleasure) then we will when presented with object A when object B is not present, we will experience the same feelings.
Cognitive dissonance
People desire to be consistent. Suppose a pollster finds that a certain group of people hates his candidate for senator but love actor A. They use actor A’s endorsement of their candidate to change people’s minds because people cannot tolerate inconsistency. They are forced to either dislike the actor or like the candidate.
Common man
The “plain folks” or “common man” approach attempts to convince the audience that the propagandist’s positions reflect the common sense of the people. It is designed to win the confidence of the audience by communicating in the common manner and style of the target audience. Propagandists use ordinary language and mannerisms (and clothe their message in face-to-face and audiovisual communications) in attempting to identify their point of view with that of the average person. For example, a propaganda leaflet may make an argument on a macroeconomic issue, such as unemployment insurance benefits, using everyday terms: “Given that the country has little money during this recession, we should stop paying unemployment benefits to those who do not work, because that is like maxing out all your credit cards during a tight period, when you should be tightening your belt.”
Demonizing the enemy
Making individuals from the opposing nation, from a different ethnic group, or those who support the opposing viewpoint appear to be subhuman (e.g., the Vietnam War-era term “gooks” for National Front for the Liberation of South Vietnam aka Viet Cong, or “VC”, soldiers), worthless, or immoral, through suggestion or false accusations.Dehumanizing is also a termed used synonymously with demonizing, the latter usually serves as an aspect of the former.
The creation or deletion of information from public records, in the purpose of making a false record of an event or the actions of a person or organization, including outright forgery of photographs, motion pictures, broadcasts, and sound recordings as well as printed documents.
The use of an event that generates euphoria or happiness, or using an appealing event to boost morale. Euphoria can be created by declaring a holiday, making luxury items available, or mounting a military parade with marching bands and patriotic messages.
Fear, uncertainty and doubt
An attempt to influence public perception by disseminating negative and dubious/false information designed to undermine the credibility of their beliefs.
An attempt to justify an action on the grounds that doing so will make one more patriotic, or in some way benefit a country, group or idea the targeted audience supports.
Glittering generalities
Glittering generalities are emotionally appealing words that are applied to a product or idea, but present no concrete argument or analysis. This technique has also been referred to as the PT Barnum effect.
A half-truth is a deceptive statement, which may come in several forms and includes some element of truth. The statement might be partly true, the statement may be totally true but only part of the whole truth, or it may utilize some deceptive element, such as improper punctuation, or double meaning, especially if the intent is to deceive, evade, blame or misrepresent the truth.
A euphemism is used when the propagandist attempts to increase the perceived quality, credibility, or credence of a particular ideal. A Dysphemism is used when the intent of the propagandist is to discredit, diminish the perceived quality, or hurt the perceived righteousness of the Mark. By creating a “label” or “category” or “faction” of a population, it is much easier to make an example of these larger bodies, because they can uplift or defame the Mark without actually incurring legal-defamation. Example: “Liberal” is a dysphemism intended to diminish the perceived credibility of a particular Mark. By taking a displeasing argument presented by a Mark, the propagandist can quote that person, and then attack “liberals” in an attempt to both (1) create a political battle-ax of unaccountable aggression and (2) diminish the quality of the Mark. If the propagandist uses the label on too-many perceivably credible individuals, muddying up the word can be done by broadcasting bad-examples of “liberals” into the media. Labeling can be thought of as a sub-set of Guilt by association, another logical fallacy.
Latitudes of acceptance
If a person’s message is outside the bounds of acceptance for an individual and group, most techniques will engender psychological reactance (simply hearing the argument will make the message even less acceptable). There are two techniques for increasing the bounds of acceptance. First, one can take a more even extreme position that will make more moderate positions seem more acceptable. This is similar to the Door-in-the-Face technique. Alternatively, one can moderate one’s own position to the edge of the latitude of acceptance and then over time slowly move to the position that was previously.
Lying and deception
Lying and deception can be the basis of many propaganda techniques including Ad Homimen arguments, Big-Lie, Defamation, Door-in-the-Face, Half-truth, Name-calling or any other technique that is based on dishonesty or deception. For example, many politicians have been found to frequently stretch or break the truth.
Managing the news
According to Adolf Hitler “The most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly – it must confine itself to a few points and repeat them over and over.” This idea is consistent with the principle of classical conditioning as well as the idea of “Staying on Message.”
Propagandists use the name-calling technique to start fears and arouse prejudices in their hearers in the intent that the bad names will cause hearers to construct a negative opinion about a group or set of beliefs or ideas that the propagandist wants hearers to denounce. The method is intended to provoke conclusions about a matter apart from impartial examinations of facts. Name-calling is thus a substitute for rational, fact-based arguments against the an idea or belief on its own merits.
Obfuscation, intentional vagueness, confusion
Generalities are deliberately vague so that the audience may supply its own interpretations. The intention is to move the audience by use of undefined phrases, without analyzing their validity or attempting to determine their reasonableness or application. The intent is to cause people to draw their own interpretations rather than simply being presented with an explicit idea. In trying to “figure out” the propaganda, the audience forgoes judgment of the ideas presented. Their validity, reasonableness and application may still be considered.
Obtain disapproval or Reductio ad Hitlerum
This technique is used to persuade a target audience to disapprove of an action or idea by suggesting that the idea is popular with groups hated, feared, or held in contempt by the target audience. Thus if a group that supports a certain policy is led to believe that undesirable, subversive, or contemptible people support the same policy, then the members of the group may decide to change their original position. This is a form of bad logic, where a is said to include X, and b is said to include X, therefore, a = b.
Favorable generalities are used to provide simple answers to complex social, political, economic, or military problems.
Pensée unique
Enforced reduction of discussion by use of overly simplistic phrases or arguments (e.g., “There is no alternative to war.”)
Quotes out of context
Selectively editing quotes to change meanings—political documentaries designed to discredit an opponent or an opposing political viewpoint often make use of this technique.
Rationalization (making excuses)
Individuals or groups may use favorable generalities to rationalize questionable acts or beliefs. Vague and pleasant phrases are often used to justify such actions or beliefs.
Red herring
Presenting data or issues that, while compelling, are irrelevant to the argument at hand, and then claiming that it validates the argument.
Assigning blame to an individual or group, thus alleviating feelings of guilt from responsible parties and/or distracting attention from the need to fix the problem for which blame is being assigned.
A slogan is a brief, striking phrase that may include labeling and stereotyping. Although slogans may be enlisted to support reasoned ideas, in practice they tend to act only as emotional appeals. Opponents of the US’s invasion and occupation of Iraq use the slogan “blood for oil” to suggest that the invasion and its human losses was done to access Iraq’s oil riches. On the other hand, supporters who argue that the U.S. should continue to fight in Iraq use the slogan “cut and run” to suggest withdrawal is cowardly or weak.
This technique attempts to arouse prejudices in an audience by labeling the object of the propaganda campaign as something the target audience fears, hates, loathes, or finds undesirable. For instance, reporting on a foreign country or social group may focus on the stereotypical traits that the reader expects, even though they are far from being representative of the whole country or group; such reporting often focuses on the anecdotal. In graphic propaganda, including war posters, this might include portraying enemies with stereotyped racial features.
Straw man
A straw man argument is an informal fallacy based on misrepresentation of an opponent’s position. To “attack a straw man” is to create the illusion of having refuted a proposition by substituting a superficially similar proposition (the “straw man”), and refuting it, without ever having actually refuted the original position.
Testimonials are quotations, in or out of context, especially cited to support or reject a given policy, action, program, or personality. The reputation or the role (expert, respected public figure, etc.) of the individual giving the statement is exploited. The testimonial places the official sanction of a respected person or authority on a propaganda message. This is done in an effort to cause the target audience to identify itself with the authority or to accept the authority’s opinions and beliefs as its own.
Third-party technique
Works on the principle that people are more willing to accept an argument from a seemingly independent source of information than from someone with a stake in the outcome. It is a marketing strategy commonly employed by Public Relations (PR) firms, that involves placing a premeditated message in the “mouth of the media.” Third-party technique can take many forms, ranging from the hiring of journalists to report the organization in a favorable light, to using scientists within the organization to present their perhaps prejudicial findings to the public. Frequently astroturf groups or front groups are used to deliver the message.
Thought-terminating cliché
A commonly used phrase, sometimes passing as folk wisdom, used to quell cognitive dissonance.
Also known as association, this is a technique that involves projecting the positive or negative qualities of one person, entity, object, or value onto another to make the second more acceptable or to discredit it. It evokes an emotional response, which stimulates the target to identify with recognized authorities. Often highly visual, this technique often utilizes symbols (e.g. swastikas) superimposed over other visual images (e.g. logos). These symbols may be used in place of words.
Selective truth
Richard Crossman, the British Deputy Director of Psychological Warfare Division (PWD) for the Supreme Headquarters Allied Expeditionary Force (SHAEF) during the Second World War said “In propaganda truth pays… It is a complete delusion to think of the brilliant propagandist as being a professional liar. The brilliant propagandist is the man who tells the truth, or that selection of the truth which is requisite for his purpose, and tells it in such a way that the recipient does not think he is receiving any propaganda… [...] The art of propaganda is not telling lies, bur rather selecting the truth you require and giving it mixed up with some truths the audience wants to hear.”
Virtue words
These are words in the value system of the target audience that produce a positive image when attached to a person or issue. Peace, happiness, security, wise leadership, freedom, “The Truth”, etc. are virtue words. Many see religiosity as a virtue, making associations to this quality effectively beneficial. Their use is considered of the Transfer propaganda technique.

Who was J.P. Morgan?

It has been discovered in the last week that the financial firm of JP Morgan Chase & Co. has lost $2 Billion in risky hedge fund trading gone awry. This sum, incredibly, is a mere pittance to the firm’s overall profit margin, but has interesting ramifications. JP Morgan, throughout the financial meltdown, has been portrayed as the most responsible and sensible of the major Wall Street banks. The CEO, Jamie Dimon, has been widely respected for his apparent risk-averse approach, and he has maintained a certain air of being above the fray in relation to the other banks. Consequently, he has been the strongest advocate for minimizing government reforms, oversight, and regulations in wake of the enormous distress to the worldwide economy caused by the actions of financial institutions. Even President Obama said in an interview, after the news of the recent $2 Billion gambling loss by JP Morgan, that that firm was “one of the best managed banks there is” and that CEO Dimon was “one of the smartest bankers we got.” Sadly, there is no doubt that Obama is correct. In order to be a smart banker, and to be a top-notch bank manager, it is necessary to manipulate the government and the media, and to make a profit at all costs. In these cases, JP Morgan & Co. has always been one of the best. (UPDATE, 14 July: the losses are actually three times larger than previously reported, Dimon is still both CEO and board member of the Federal Reserve, and still stridently supports the claim that banks can regulate themselves)

John Pierpont Morgan was born in Connecticut in 1837, to the New England version of the aristocracy. His father, Junius Spencer Morgan, was a wealthy trans-Atlantic banker who enrolled his son Pierpont (as he was called) at the best private schools, and at universities in Switzerland in Germany, before taking a position at one of the Morgan banks in London. Throughout the second half of the 19th century, J.P. Morgan gained power as a crafty financier involved in several industries and banks. During the Civil War, J.P. Morgan paid $300 to avoid serving his draft status in the Union Army, while serving instead as a bank-roller and war-profiteer. There was an incident, for example, in which he was responsible for the sale of 5000 defective rifles for a large profit, which was investigated by the government. Unsurprisingly, there were no charges brought against him.

John Pierpont Morgan (1837-1913)

In contrast with the diverse group of infamous monopolists and ‘robber barons’ such as Commodore Vanderbilt and Jay Gould (railroads), John J. Rockefeller (oil), and Andrew Carnegie (steel), J.P. Morgan was primarily a money-man–that is, an investor of capital rather than an industrialist. In the many conflicts between the nascent railroad and oil industries for control of resources and land, J.P. Morgan showed that the next stage in the development of capitalism was the represented by the power of finance. In the case of the railroads, he could see that the suppression of competition was the most efficient and profitable course of action, and every deal he made multiplied his profits and control over other capitalists. The watershed moment in this history came in 1901, when J.P. Morgan bought out Andrew Carnegie and took control of his steel empire, reorganized it as the US Steel Corporation. Carnegie, who was a self-made man and a pure manufacturer rather than financier, sold for $400,000,000 and became the richest man in history. He spent the next 18 years giving away 90% of his wealth to education, libraries, scientific research, and world peace.

J.P. Morgan, on the other hand, became the head of the world’s largest, and first Billion-dollar, corporation. US Steel was actually worth $1.4 Billion, and it now controlled a majority of American steel production. This, however, was only one of J.P. Morgan’s diverse business interests. The power he amassed through his monopolistic policies in steel, railroad, banking, and other ventures like newspapers, livestock, and ocean liners, was enough to make him arguably the most powerful man in the world from 1901 to his death in 1913. He was received as a king by Edward VII, Kaiser William, and the Pope. In the Panic of 1907, J.P. Morgan arranged a deal to single-handedly bail out the U.S. government and restore confidence in an economy in crisis. This almost directly led to the Federal Reserve System of 1913, in which politicians and rival bankers wished to prevent one corporation (in this case, one man) from having so much power in the future. In addition, public opinion gradually turned hostile to J.P. Morgan after 1901 due to his anti-competition, monopoly-building practices, and he was often at war with Trust-busting Progressive leaders like Theodore Roosevelt.

Upon his death, this erstwhile king of finance was succeeded to the throne by his son, J.P. Morgan, Jr. His biggest claim to fame came immediately as World War I broke out, when he began financing the governments of Russia, England, and France. J.P Morgan Jr.’s extensive dealings, especially his favoritism towards England, surely played no insignificant part in escalating the war, drawing the U.S. into that destructive and absurd conflict on the side of the Allies, and continuing the Morgan family tradition of war-profiteering. Post-war, J.P. Morgan, Jr.’s notable accomplishments include financing Germany’s unfair reparation payments of the Versailles treaty, giving Mussolini a $100,000,000 loan prior to the Second World War, and fighting tooth-and-nail against President Franklin Roosevelt’s New Deal plan. Fortunately, he was largely unsuccessful in this last endeavor, and many much-needed financial reforms and regulations were enacted in the wake of the Great Depression. One of these pieces of legislation was the Glass-Steagall Act of 1933. One of the main provisions of this Act was the forced separation of commercial and investment banks, which helped to mitigate risk to the national economy due to under-regulated banking conglomerates. Though this Act was imperfect and obviously not a panacea, it represented a positive step towards achieving a better balance of government regulation and free market enterprise. Naturally, it was gradually circumvented and undermined by a series of the “smartest bankers” of the day, who realized that new generations of politicians could be bought and controlled just like the old ones.

Despite 50 years without a financial crisis after the instatement of the Glass-Steagall Act, the weakening of regulation by the time of the Reagan-era 1980′s led once again toward the dangerous path of the consolidation of banking power, along with increasing risk of meltdown. After the formal repeal of the Act in 1999 by Bill Clinton, it was only 7 years before the nearly-fatal event occurred. By 2000, JP Morgan & Co. was back in full force, merging with Chase Manhattan Bank to eventually become the largest bank in the United States by assets, and the largest public company in the world (as of 2011). This is the context in which we find this venerable institution leading the way in the next round of financial wizardry at the public’s expense. How do we feel about this, the “best managed bank there is,” still fighting against needed reforms that will keep its dangerous power in check? Should it be left to its own devices, as CEO Dimon says, or should it, and all similar institutions be broken up so that they cannot willfully cause another meltdown?

I think the answer is self-explanatory. An easy step to take is mustering public opinion toward a reinstatement of an updated Glass-Steagall Act which will force the separation of commercial and investment banks (there are many online petitions calling for this exact thing, and a few progressive politicians leading the way). Likewise for a strengthening of the recent, but too weak (due to immense lobbying pressure from Wall Street), Dodd-Frank Financial Reform Act. In addition, income from financial investments should not be singled out for a preferential tax rate of 15% but should be taxed as any other income. Also, there should be some sort of public ownership and control over at least a part of the enormously powerful financial machine that has been created since the days of the original J.P. Morgan. The rich will still be rich, and no one faults them for that, but they will be prevented from amassing and exerting the type of power which tends to happen when they are given special political privileges. Then, we will have a healthier, less risky, and more sustainable balance of regulated capitalism where many can succeed, and more equal democracy for all.

Concerning Income Inequality

There has been much news coverage in the last 24 hours about the just-released figures from the Congressional Budget Office regarding change in income for each economic group over the last 30 years. Basically, the top 1% of income-earners have seen their incomes grow 275% over that time, and everyone else has either seen only minimal gains (the top 20% or so) or completely stagnated (the bottom 80%). I have already seen numerous charts, graphics, blog entries, and opinions on the internet talking about this statistic–one of the most comprehensive seems to be here. Let me add one more to the mix.

From: CBO

The phenomenon has been commented on by some astute observers previously. Last year, Bill Moyers gave a speech called “Welcome to the Plutocracy” that charts the long process of growing inequality, something he has talked about at other times in the past. It is rather long, but well worth the read:


Nevertheless, it is an interesting and positive development how much coverage this issue is receiving at this moment, exactly when there is so much public and popular backlash about inequality, rapacious banks financing corrupt politicians, a general sense of injustice, and the rise of the Occupy Wall Street movement. It is also a bit ironic that this study was done at the behest of a bipartisan request of Congress, and was conducted by the non-partisan CBO. Given the results of the findings, it will only help to advance the Democratic platform, and weaken the Republican one. This does not follow automatically, but only because Democrats, by default, are the only party that supports anything like a progressive tax policy, whereas the Republicans have regressed from any earlier forms of progress they might have once embraced, however tentatively, in order to cling to what can only be described as “survival of the richest, and screw the rest.” I don’t think I am exaggerating, as I have been observing and trying to understand the political situation for some time, and can come to no other conclusion about the regressive intransigence of the Republicans.

Is it important to understand the source of the growing inequality over the last 30 years? Yes, it can be considered a recent historical trend that did not develop in a vacuum. It also helps us to understand the current situation of our national financial system, deficit, budget, political system, etc. We must first consider that these figures are so alarming to many people not because of the percentage itself, but because of the overall progression of inequality. For example, we know that there has always been a huge disparity between ‘haves’ and ‘have nots’, and that the richest 1% took home a similar percentage of income even at the time before the Great Depression. Thanks to a series of regulations, union growth, and progressive taxation, the disparity between super-rich and everyone was gradually lessened throughout much of the 20th century. ‘Trust-busting’ of huge monopolies used to be enforced by the government, and companies were not allowed to become what we now call ‘too big to fail’. For several decades, the richest earners paid income taxes much higher than today, but this not only did not hinder their success, but it helped everyone else to prosper as well.

From: moveon.org

So when did the trend of growing prosperity end and growing inequality reassert itself? The best (or at least simplest) answer is clear: the Reagan presidency. Multiple tax cuts for the top earners were coupled with an overall lessening of financial regulations, and refusal to enforce even existing regulations. All the charts and the figures involved clearly show the pattern of gross financial abuse of the system gaining considerable force during the Reagan years, while the simultaneous rejection of progressive policies on all accounts have led to stagnation for everyone else. I know that this is an over-simplication, but it remains true nonetheless. And during this time, the US has gone from being a sort of ‘beacon’ of freedom and equality, to a place that now ranks in the same sterling group of countries as Rwanda and Uganda–last in the world in income equality!

So what does this mean? I admit that higher tax rates for millionaires will not cure all of our problems, and in fact, will do very little in the big scheme of things. But that is beside the point. Allowing the Bush tax cuts to expire next year would automatically set the highest tax rate back up to 39.6% from the 35% of the last 9 years. This is the first step in a series of symbolic, but meaningful, steps to adjust the role of government back towards the successful progressive role it maintained in the recent past. Taxing the rich directly is the most effective single way to mitigate inequality, provide more means of assistance to the bottom 20% in poverty, and make way for a more just society. I always thought Robin Hood was a popular character for all time because he did what is intuitive to us all–robbed the rich to feed the poor. The difference with these tax rates is that no one is getting ‘robbed’–the rich will hardly notice the difference, and the extra revenue will make a world of difference to supporting programs such as education that help even the poorest citizens to have more control over their own ability to rise out of poverty. A full two thirds of millionaires have no disagreement with this same argument, agreeing with Warren Buffett that the rich should, in fact, pay more taxes. There is obviously much to say and many vociferous disagreements on these issues, especially regarding the rival political philosophies of liberalism and libertarianism. I will discuss those points in a later post. The most basic thing we must ask ourselves, however, is what kind of society we want to live in…one in which everyone has a possibility to attain a prosperous existence, or one in which the richest minority writes it own rules at the expense of the majority.

Post Navigation

%d bloggers like this: