Voices from the Past: The Military-Industrial Complex, Paranoia and the Inarticulate Poor

In 2014, according to the Bureau of Labor Statistics, nearly two thirds – 62% – of the Federal budget was devoted to military spending at a time when the U.S. is not actively engaged with troops on the ground in a major foreign conflict; only 38% of the federal budget was earmarked for non-defense programs such as education, health care and infrastructure investment.

The huge disparity in military v. civilian spending recalls prescient warnings from earlier times.

The Economist John Kenneth Galbraith:

“On the one side, powerful military bureaucracies, influential and richly financed weapons industries, their lobbies, their captive legislators, those for whom paranoia or past wars are a way of life,” Galbraith wrote. “On the other side, only reason, the will to survive, the inarticulate poor.”

Galbraith writing in 1978, as quoted in an August 28th New York Times Obituary on the passing of Ruth Sivard, an noted economist who focused on the disparities between military and social spending.

Former President Dwight D. Eisenhower:

“This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence — economic, political, even spiritual — is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

Eisenhower’s Farewell Address, January 1961

Donald Trump and the Sad State of American Journalism

Today’s news media seem to exhibit three main qualities:

  • Pandering – Telling people what they want to hear; never offending anyone, no matter the issue, ala the major news networks including PBS
  • Repetition – Repeating the same thing over and over ad nauseum, ala CNN
  • Rudeness – Shoutfests masquerading as dialogue, ala almost every cable news outlet

It is any wonder Donald Trump appears to exhibit these same qualities. His obvious strategy is to pander to the media which in turn gains him free publicity and allows him to rise in the polls.

Jorge Ramos of Univision wasn’t willing to play Trump’s little game Tuesday in Iowa. He dared to stand up and pointedly ask Trump to defend his positions on immigration. For his efforts, Ramos was removed from the press conference and, as Glenn Greenwald pointed out in an excellent article at The Intercept yesterday, was skewered by fellow journalists for being opinionated in his approach and aggressive in his questioning.

In his article, Greenwald labeled the phenomenon of journalists refusing to take a stand on major issues as part of the “Corporatization of American Journalism”.

Greenwald is putting a pretty fine point on the subject – maybe too fine in TDV’s view.   A once noble profession seems to have morphed into an arm of a pandering, repetitious and rude media establishment, with very little self-awareness that a problem even exists.

Kudos to Ramos and Greenwald for refusing to be part of the “Stupidification” of American Journalism.

Donald Trump Should “Go Back” to Whatever Race-Baiting Planet He Came From

Telling the journalist Jorge Ramos at a press conference on Tuesday evening to “go back to Univision” was a thinly veiled racist comment, and not Trump’s first by any means.

Whether Democrat, Republican, Independent or Other, we should not condone or ignore racist comments.

Even, as Democrats, taking delight in the stupidity of such comments by the opposing party is questionable.

Trump is an embarrassment, not just to the Republican Party, but to all thinking Americans (which apparently does not include much of the mainstream media).

For his part, Trump should “Go Back” to whatever foreign planet he came from, the sooner the better.

Wide Eyes on the Streets of Brooklyn

PeopleinBrooklynParkTDV travelled to Brooklyn yesterday to visit with family members.

On the surface, Brooklyn is an exciting and vibrant place, and we had a wonderful time walking Ft. Greene Park and surrounding avenues with great little shops, restaurants and bars.

Beneath the surface, however, as Spike Lee has discussed recently, it felt like something was happening that is, well, maybe not so cool.

  • An asset bubble with condos and row houses selling in the millions
  • Gentrification on a grand scale.
  • Social stratification with rich and poor, black and white, rubbing elbows but not really mixing

From a public policy perspective, how do you deal with such a situation? Well, among other things, you might want to use some of those new found tax revenues on million-dollar condos to help stimulate jobs growth and housing opportunities for low and moderate income residents.

And, oh by the way, isn’t that what Mayor de Blasio has been trying to do?

And he has been taking a lot of heat for it in some quarters, as evidenced by mounting opposition to the planned Brooklyn Bridge Park project.

But perhaps his critics have not walked the streets of Ft. Greene lately with eyes wide open.


Debt is Debt. Investment for Growth is “Good”

In Paul Krugman’s column in the New York Times yesterday, the headline asserted “Debt is Good.”

At the risk of nitpicking over an otherwise excellent article, is debt really “good”? Debt can be used to finance all kinds of things – such as routine government expenditures or unnecessary foreign wars.

As most economics majors will tell you, debt that yields a positive future return is good – debt that doesn’t yield a positive return – well, not so much.

Of course, a big question becomes – how do you measure future returns?

Well, as one measure, how about the impact on economic growth?

Public investment in infrastructure typically has a positive impact on economic growth. It creates jobs, improves mobility and stimulates future economic activity. That’s good.

Debt – well that is just a means to an end – and some debt is better than others – in other words, some debt yields high returns; some debt yields marginal or negative returns.

So how about we focus the discussion on the need for high-return investment in public infrastructure to stimulate jobs creation and economic growth?

A big mistake this country is making, in the opinion of TDV,  is to conflate debt and investment.  Let’s invest for growth – and if we need debt to make that happen, so be it.

To Help Address Inequality, Invest for Growth

Democrats in particular often have a tendency to lose sight of the big picture. Hillary Clinton’s economic proposals are a case in point: a whole laundry list of initiatives, many of them important and worthy, but nonereally getting to the heart of the core issue facing America – which is stagnating economic growth.


The Federal Reserve Bank has done its bit by buying bonds and holding down interest rates. But the net effect of Fed actions has been to inflate asset values, which is turn has contributed to the inequality of wealth and income in the U.S.

Congress, on the other hand, has completely failed to do it job. Even though we have inflated asset values and increased asset-related income from dividends and stock appreciation, taxes on wealth and asset income are at historic lows, further exacerbating inequality.

Meanwhile, government investment in infrastructure and other fixed assets has declined significantly since the great recession of 2008, with all levels of government failing to step up to the challenge.

How “stupid” is it really that at the very time when the real cost of borrowing is near or below zero, Congress (and state and local governments) ratchet back on investment? Especially when the overall condition of our infrastructure – roads, bridges, transit and airports – is so awful.

No wonder we have an inequality problem in this country. We have inflated asset values; kept asset related taxes low; reduced investment in infrastructure and failed to maintain reasonable levels of growth in the economy that Americans depend on for jobs.

Beware Another March to War In Neoconservative Opposition to Iran Deal

Republican and neoconservative opposition to the nuclear accord reached between Iran and six global powers has been as unwavering as it has been nonsensical. It’s been unwavering in that they opposed it before negotiations began, they opposed it while negotiations were occurring, and oppose now it that negotiations have concluded.

The argument they have made against reaching an agreement is that Iran can’t be trusted. Neoconservatives have also argued that Iran will get nuclear weapons at the end of the deal–although Benjamin Netanyahu has been telling anyone naïve enough to listen that Iran will get the bomb in the few years … and he’s been saying that since the early 1990’s!

If we are really going to have bomb Iran anyway, wouldn’t this nuclear deal be the perfect strategic play for the United States and Israel? We’re giving up sanctions in exchange for regular inspections and valuable intelligence on Iran’s nuclear program.

If Benjamin Netanyahu and neoconservatives in the U.S. were genuinely concerned with Iran’s acquisition of nuclear weapons, they would want more intelligence on it. They would support this nuclear accord because it allows regular inspections of Iranian nuclear facilities.  To the argument that Iran will inevitably “cheat”, this agreement will make it easier for us to detect when and if Iran does cheat.

One suspects that Israel and its neoconservative allies in the U.S. don’t really care about gathering real intelligence on Iran’s nuclear program.

Just like the decision to invade Iraq in 2003 was made based on trumped-up intelligence, for neoconservatives, one suspects the decision to bomb Iran has, likewise, already been made, and no amount of real intelligence is likely to get in the way of their proposed March to War.

Poll: View that Economy is Rigged Transcends Racial Divide

A New York Times / CBS poll conducted July 14 to 19 finds a fairly sharp increase in people, white and black alike, who think race relations in the US are deteriorating. 68% of black respondents said relations were generally bad, while 57% of white respondents felt that way.   Prior to this year, this level of pessimism in race relations in the U.S. has not been seen on a sustained basis since the 1990’s, according to the data.

The good news is that, in the wake of the Charleston, SC church shootings, a majority appear to recognize the problem and we now seem open to at least having the conversation. The bad news is the conversation is not easy; the problems are deeply ingrained in our society, and they won’t be easy to fix.

Among the problems that need to be addressed, and there are many, is a general lack of economic opportunity that the NY Times / CBS poll suggests transcends the racial divide. The poll found that whites and blacks, at 57% equally within each group, share the view that it is “mainly just a few people at the top who have a chance to get ahead”

Perhaps if we were to do a better job of leveling the playing field for all our citizens – white, black, Hispanic and Asian – it would make the conversation on improving racial discrimination go just a little easier, and yield results a little quicker.

David Brooks: Mangling Economic Theory to Justify Poverty-Level Wages

July 25, 2015 – There are two contradictory justifications corporations, and their mouthpieces, use to argue against the minimum wage.

The first is Inflation Theory, which says that any increase in the wages paid to the lowest-income workers is immediately counter-acted by a society-wide increase in prices.  New York Times columnist David Brooks, in The Minimum Wage Muddle, explains Inflation Theory this way:

“The costs of raising the wage are passed onto consumers in the form of higher prices. Minimum-wage workers often work at places that disproportionately serve people down the income scale. So raising the minimum wage is like a regressive consumption tax paid for by the poor to subsidize the wages of workers who are often middle class.”

If that sounds somewhat nonsensical, it is. Inflation Theory is flawed because inflation is relative—it does not matter if the price of an apple goes from 50 cents to a dollar so long as everything else doubles in price, including wages. And it is blatantly misleading to characterize minimum wage workers as “middle class”; if they are a head of household or supporting a family, they are living in poverty.

But while inflation is neither inherently good nor bad, inflation benefits debtors and hurts creditors.

Inflation has a two-fold benefit to the working poor who carry significant debt (mortgage, student loans, credit cards).  First, workers earn more money. The lowest income earners (minimum wage), receive the biggest benefit, but those making just-above minimum wage will also see a rise in wages.  Second, they can more easily pay back outstanding debts. This is the principle reason right-wing economists use Inflation Theory less is that there are clear winners (low-income workers, especially those with debt) and clear losers (the wealthy).

Which brings us to the Job Loss Theory. Job Loss Theory, unlike Inflation Theory, has the advantage of at least purporting to be supportive of low-income workers. Job Loss Theory holds that if the price of hiring workers goes up, firms will hire less workers.

As David Brooks explains Job Loss Theory:

“You can’t intervene in the market without unintended consequences. And here’s a haunting fact that seems to make sense: Raising the minimum wage will produce winners among job holders from all backgrounds, but it will disproportionately punish those with the lowest skills, who are least likely to be able to justify higher employment costs.”

Although Job Loss Theory is superficially supportive of low-income workers, the breakdown in the logic results from treating human beings as commodities. If Job Loss Theory were true, then the minimum wage would result in a sustained high unemployment. But no one—no economist, dare I say not even David Brooks—has the audacity to try to link, over time, the real minimum wage to unemployment.

We’ve highlighted David Brooks’ column for two reasons:  1) the shocking arrogance of a political commenter writing things like “here’s a haunting fact that seems to make sense” and 2) the use of both Inflation Theory and Job Theory to justify keeping low income workers in poverty.

Of course, David Brooks mangled economic theory left out the fact that any full-time minimum wage employee working full-time in any State in the U.S. feeding a family of four is living in poverty. And that’s under the ridiculous Department of Health and Human Services Guidelines that say that a family of four can live on less than $25,000.