Thursday, November 13, 2008

123. Bailout argues against capitalism

In Planned Parenthood of Southern Pennsylvania v. Casey (1992), the court wrote of imposed substantial limitations on legislation limiting economic autonomy in favor of health and welfare regulation in Lochner v. New York. It notes that these limitations were overruled in West Coast Hotel Co. v. Parrisk, but that, "In the meantime, the Depression had come and with it, the lesson that seemed unmistakable to most people by 1937, that the interpretation of contractual freedom protected rested on fundamentally false factual assumptions about the capacity of a relatively unregulated market to satisfy minimum levels of human welfare.

The bailout, which reared its ugly head right smack in the middle of the presidential election, left a lot of blame on the table. Just who was responsible, and why should taxpayers foot the bill? Was this the result of deregulation, greed, and reckless risk-taking? Or, does the blame flow further down the food chain- such as unemployment and irresponsible home buying? Furthermore, with huge budget deficits and a war costing 10 billion per month, where is this money coming from?

Is this a case of socialism, that oh so dirty word, bailing out capitalism? If the lending institutions do not get the bailout, what impact would that have had on the credit markets- and the ability of Americans to get loans to buy houses and cars? And, if Americans cannot get loans, what impact does this have on the already hurting housing market and the struggling auto industry?

It is easy to see the spiral...for if industry struggles, then more people lose their jobs and more loans go unpaid, and more homes are foreclosed on. Where does it end, if not in another depression?

Consumer advocate, Ralph Nader firmly believes that this is the case of socialism rescuing capitalism. "The bailout was so frantic, so ultimatum-laced, so open-ended, so absent of criteria or standards . . . that it was clearly socialism bailing out capitalism," said Nader. I have written for a few years now that capitalism, as much as we wish it were not true, needs to be regulated. Free markets, in their purity, make absolute economic sense. However, in reality, in a world of lobbyists, corrupt CEOs, unethical corporations and the demise of labor unions, there needs to be some sort of government regulation. It is deeply unfortunate, but greed pressures the economic markets to the point of, as we have seen here, near collapse.

It is not just the financial markets, it is, as I have also argued for the last few years, the corporate incentive to placate shareholders at any cost- which is often American jobs. It is impossible to continue to send good jobs overseas, to save labor costs and avoid environmental regulations, and not believe that it will not have an effect of Americans' ability to pay back loans and make their mortgage payments. Capitalistic economic systems fail when corporations, through political relationships, are afforded legislative loopholes to exploit a global market- yet are subsequently rescued when they fail. Nader also views the bailout as the "collapse of corporate capitalist ideology" and that he emphasizes, "'corporate' because the only capitalism left now is small business. They are the only ones free to go bankrupt."

Adamant capitalist and famous American economist Milton Freedman aptly suggests, "What kind of society isn't structured on greed? The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system." Although capitalists will always find an argument, as the Supreme Court justices recall it, the Depression hurt lots of people, lots of innocent people- because of the lack of legislative regulation. And today, Americans are hurting. We are reaching unemployment highs, millions of people have lost their homes, those that are employed are often underemployed or taking pay cuts, and prices just keep going up. The American people need a bailout, and, and they need their politicians to understand the issues- and history.

Thursday, November 6, 2008

122. Campaign was a study in contrasts

It is too remarkable, and I was too invested emotionally, to just move on as though the election is all of the sudden behind me. While so much has been said, perhaps everything has been said, regarding this historic election, I still feel the need for reflection, and to, of course, offer some thoughts.

This election is a culmination of our being as a country for over 200 years. This country, today, should be proud that a majority of voters were willing to look past prejudices, through the scope of history, and elect an African-American president. It was a long and trying election campaign.

It is my feeling that McCain knew early on that he was in over his head. He knew Obama was the better spoken, better educated and more popular candidate. His entire campaign was about shifting the focus- first by selecting Sarah Palin, then by engaging in a negative campaign- which basically admitted that he was the default candidate. His aim was to give people a reason not to vote for Obama- whether it was the pledge of allegiance or the insinuation that he was a socialist. Had he picked a more credible female vice-presidential candidate, he might have pulled it off. Palin was a disaster, for reasons which I have previously written about at length.

The election reached absurdity when "Joe the plumber" became a focus of the republican campaign. What was at first a charismatic attempt to relate to the middle class, a word McCain rarely uttered in his campaign, later turned into a circus show. After "Joe" was exposed as a liar, fraud and individual with some pretty weird perspectives, the McCain campaign should have laid the issue to rest. Instead, they invited him to campaign stops, and Palin entered into long, annoying verses about every "joe" profession imaginable.

Obama, on the other hand, played it smart. His campaign was organized and remained on task- the need for change and the condition of the economy. He did not engage in retaliating with counter insinuations, nor did he overreact to the attacks made on him. When given the chance to strike back at Palin in his third debate about whether she was qualified, he merely suggested that was for the country to decide. He would not give in and give the reason not to vote for him. He remained classy- he had to.

Race was obviously a focus of the election. Since African-Americans often vote democratic, Obama had to increase the number that voted, and, more importantly, he had to gain a significant portion of the white vote. While he never converted some voting demographics, while males for example, he was able to increase the percentage enough to win the election. And although there were pockets of the country and some of McCain's crowds, that were ugly and more representative of 1850 America, it was feared that it might have been much worse.

Today, there is much work to be done. Free of the campaign dissection, I think Obama will be an even stronger and more divisive leader. However, we are all accountable for our country. The country does not change simply because we voted for change. It is time to take responsibility for our actions- to be educated and informed on the issues. We need to make the effort to contact our elected representatives to express our opinions- and then hold them accountable for their votes. We need to donate our time and money to others suffering under the current economic conditions. And, finally, we need to be responsible parents and citizens, and expend that extra effort that can really change a country.

Other election results:

Thumbs up: Proposition 2 in California passed, a major initiative in the requirement that animals that exist simply for food, or lay eggs, have a moment of decency in their lives- such as room to turn around in their cages. It is not nearly enough, but it is a start. And granted, it is progressive California, but it does send a clear message that people will not accept animal abuse in exchange for profit.

Thumbs down: A few more states worked to pass gay-marriage amendments. It remains, in my opinion, a pathetic endeavor to control the lives of others. In 100 years, people will look back at this discrimination as we look back to a time when African-Americans and women were not permitted to vote. In fact, maybe, just maybe, in 100 years, they will be celebrating the first openly gay American as president.