No Teddy Today

Everyone wants to be someone else. Back in the late sixties every chunky young girl in America wanted to be Audrey Hepburn, the princess in Rome or the free spirit in Manhattan who liked breakfast at Tiffany’s and wore that classic little black dress. But that wasn’t going to happen. Genetics matter. And for a time every hapless young man in America wanted to be James Bond – the Sean Connery Bond, not the foppish Roger Moore Bond. But that wasn’t going to happen either. No one is that manly and suave. But one can dream. And it’s hard to tell who Newt Gingrich wants to be, other than what he lists – “advocate of civilization, definer of civilization, teacher of the rules of civilization, arouser of those who form civilization, organizer of the pro-civilization activists,” and, in his spare time, “leader (possibly) of the civilizing forces.” Perhaps it might be better for all of us if he just wanted to be James Bond. But then all the other Republicans want to be John Galt – or at least hang out with him, or write tax code for him. Of course John Galt is entirely fictional, and quite absurdly improbable. But again, one can dream. And this was the week Barack Obama decided he wanted to be Teddy Roosevelt.

Yes, Teddy Roosevelt, and the event was what might be called Obama’s Teddy Roosevelt tribute speech in Osawatomie, Kansas, where he offered a critique of rising income inequality, middle-class wage stagnation, and the failure of the conservative economic agenda. This was all about the disappearing middle class and “the breathtaking greed of a few” and “insurance companies that jacked up people’s premiums with impunity” and “mortgage lenders that tricked families into buying homes they couldn’t afford” and so on and so forth. We can’t “go back to business as usual” – that was his theme. And the tiny farm town of Osawatomie was where Teddy Roosevelt gave his New Nationalism speech in 1910 that called upon the three branches of the federal government to put the public welfare before the interests of money and property. That was a radical idea, but Teddy Roosevelt was the progressive and the trust-buster, and, oddly, a Republican.

But this was hardly Republican:

“It’s heartbreaking enough that there are millions of working families in this country who are now forced to take their children to food banks for a decent meal. But the idea that those children might not have a chance to climb out of that situation and back into the middle class, no matter how hard they work? It’s wrong,” he said drawing loud applause. …

“Investing in things like education that give everybody a chance to succeed. A tax code that makes sure everybody pays their fair share. And laws that make sure everybody follows the rules. That’s what will transform our economy. That’s what will grow our middle class again,” Obama said.

Of course the likes of Rush Limbaugh and Charles Krauthammer attacked this speech as dangerous radical left-wing class warfare, as one would expect. The lazy parasites who produce nothing want all our goodies. You know the drill. But there were the moderate conservatives like David Frum and Ross Douthat saying that Obama’s fiery indictment of inequality did not seem to be matched by any equally strong program to do much of anything about it.

Here’s Frum:

Let’s accept that our future prosperity will be very narrowly based, and instead use some of the proceeds of that narrow prosperity to create government jobs as consolation prizes for those who lose out in private markets. …

Few politicians offer a more acute assessment of America’s problems than President Obama. But when it comes to creating an effective alternative – the country is left waiting.

Douthat calls Obama’s plan “a defense of business-as-usual” – there’s not much there. What are you going to do, just raise taxes on the rich? Is that it?

And Jonathan Chait sees this:

I think there’s a lot of power in this critique. It actually echoes a left-wing critique of “pity-charity liberalism,” which is one critical term for a liberalism that allows unchecked market inequality, and hopes to use government to slightly ameliorate that inequality with transfers, as opposed to directly intervening to change the shape of market outcomes. The basic thrust of the critique is that it’s hopelessly naïve for liberals to imagine the wealthy will gain more economic power while allowing the government to transfer larger shares of their income to the great majority of the population. I remain unconvinced that there is a useful plan that can actually reverse or halt growing pre-transfer inequality at an acceptable price, and even if there were, it’s impossible to imagine the U.S. political system ever enacting it.

In short, Obama’s pity-charity liberalism is kind of odd – let everyone grab what they can in a dog-eat-dog all-out competitive economy, and then tax the winners to keep the losers from dying in the streets. It accepts the current economic structures, and tries to pay for the devastating harm they cause by transferring a few bucks back and forth, here and there. It fixes nothing. It just pays damages. Taxes become, essentially, fines for bad behavior.

But Chait sees that is only what is now possible:

Obama may not be making a frontal assault on rising inequality, but he is doing something about it. He proposes slightly more progressive taxes, and he wants to provide universal health insurance – not an insignificant part of the basic protection the government can offer its citizens against the hazards of the market.

Meanwhile, the Republican program is a dramatic acceleration of those trends. The party is committed to wiping out taxes on investment income and turning the tax code into a vast engine of upward redistribution. It is likewise committed to undoing universal health insurance coverage. The Republicans have also voted almost unanimously for a budget that absolutely slashes Pell Grants, Head Start, Medicaid, and other programs that provide a bit of relief to the unfortunate.

So Chait assesses Obama’s program as not much of a response to runaway inequality, when measured against nothing else. And that’s the issue:

To miss the contrast between Obama’s program and the existing alternative that the American people could choose in 2012 is an act of blindness. The obvious point of the speech is that, in the context of runaway inequality and corporate power, an agenda of locking in the Bush tax cuts, imposing the budget cuts this would require, deregulating Wall Street, and repealing health care reform is an act of madness.

The mismatch between Obama’s staunch populist tone and the meekness of his agenda is simply a function of the ideological contrast between a radical GOP and a moderate Democratic Party.

Yes, these days you might want to be Teddy Roosevelt, but these days it is hard to be. And Chait says Obama is really not much of a populist-progressive like Roosevelt – but he really is if you consider “the radical plutocracy of the opposition party.” It’s all a matter of perspective.

And Matthew Yglesias adds perspective:

Obama framed the choice as one about whether or not this would be a country where “everyone gets a fair shot” and argued that “this isn’t the first time America has faced this choice.” The previous time, interestingly, was said not to be the depths of the Great Depression but the height of the Gilded Age when “we had to decide: Would we settle for a country where most of the new railroads and factories were being controlled by a few giant monopolies that kept prices high and wages low?”

The correct answer, of course, was no. The Progressive movement championed by Teddy Roosevelt weakened giant corporations and vastly improved working conditions. And Obama’s quite right. Living standards rise when technology improves, but for society to genuinely prosper, deployment of new technology can’t be throttled by grasping monopolies.

And Yglesias argues that Obama’s speech and his policy agenda essentially ignore this issue:

Obama’s speech dwelled primarily on the time-honored Obama themes of taxes, financial regulation, and education. These are worthy ideas all. But they are also exactly what Teddy Roosevelt didn’t bring to the table at a time when income taxes were unconstitutional and schools were entirely in the hands of local authorities. Instead, exactly as Obama said, Roosevelt’s idea was that we needed rules “to ensure competition is fair and open and honest” so “he busted up monopolies, forcing those companies to compete for consumers with better services and better prices.”

Today, thanks to the availability of trucks, we don’t need to worry about predatory freight-rail monopolies. But new technologies have created new problems for antitrust policy. Today’s version of the railroad barons are broadband Internet providers.

And he asks you to think about that:

These telecoms aren’t bad guys, exactly, anymore than the railroad barons were. If they weren’t around, the world would be a worse place… But the benefits of the technology they provide are undermined by the reality that there’s almost no competition in the telecom sector. In my apartment, I’m able to choose between Comcast and Verizon, and two choices are about the best you can get in America. Under the circumstances, the companies compete – but only a little. Both offer slightly obsolete technology, crummy customer service, and high prices.

Bu the odd thing here is that the obstacle to better service is not technology:

Average Internet speed in many foreign countries leaves the United States in the dust. And in some select parts of the United States, Americans can get state-of-the-art fiber to the home. But it’s being rolled out at a snail’s pace. In Washington, D.C., where I live, we’re told that Verizon will bring FIOS to the entire city by 2018. They’re four years into the process and there are six more years to go. But six years is a lifetime on the Internet. Six years ago there was no Twitter, no Tumblr, no iPhone, and no Android. And it’s not like D.C. is last in line for this technology. Rollout hasn’t even begun across much of the country.

It doesn’t take a genius to see why. Exactly as the president said, when you have robust competition, companies offer better services and better prices to stay ahead of their rivals. When competition is weak, it doesn’t happen.

But we’re not going to have that because opening things up to fierce competition is now, paradoxically, considered interference in the private market, and everyone knows that would be a bad idea. Yglesias notes that this gets complicated:

Broadband, like railroads, is inextricably bound up with the state. You can launch a software company from your bedroom, but a scrappy startup can no more tear up your street to lay fiber optic cable than it can build a train to Chicago. Without a mix of eminent domain and access to public spaces, it’s simply not possible to construct infrastructure that requires long, straight lines and the ability to cross existing property. That means barriers to entry are frightfully high and competition is inevitably muted. What’s more, trying to create competition by inserting a bunch of different wires into your house would be absurdly wasteful. We’d all benefit from having more broadband providers to choose from, but nobody actually needs more than one connection at a time. In other words, we only need one company to bring the line to your house, but lots of companies to be able to compete to serve you on that line. That’s why, when telecom prices were first deregulated in the 1990s, “local loop unbundling” was the other side of the coin. Firms who owned wires into homes were made to agree to terms under which the wires could be leased by rivals who thought they had better ideas about how to manage the existing physical infrastructure. Incumbent telecoms never liked this idea, courts helped them stall implementation, and then the Bush administration scrapped the relevant rules. Obama hasn’t moved to reinstate them.

So maybe Obama is too timid, and just not Teddy Roosevelt:

Obama mentioned broadband in his speech, arguing that instead of sitting at home scanning the help-wanted ads, construction workers should be “rebuilding our roads and our bridges, laying down faster railroads and broadband, modernizing our schools.” Fine ideas all, but exactly as the president said when invoking TR at the beginning, to build the infrastructure you need, you must regulate it properly and create competitive markets.

Until the government gets serious about doing that, we’re going to have to settle for a country where most of the new cables are controlled by a few giant monopolies that keep prices high and quality low.

And that’s just one example. Think of the big banks, getting bigger, as they swallow up all the failing littler ones. Think of Wal-Mart wiping out all the mom-and-pop stores everywhere. And we’re left with a policy of basically leaving entrenched monopolists in place and just asking people to pay higher taxes. That’s it?

Yglesias calls this Loser Liberalism – borrowing the term from Dean Baker’s book The End of Loser Liberalism – and asserting that “this tax-centric approach to governance misses a lot of crucial issues that don’t necessarily relate directly to the issue of inequality.” And the problem, as Yglesias sees it is what he calls the implicit moral dimension of the economy:

Loser liberalism, by implying that all fortunes are created equal, alternately goes too easy on scoundrels and comes down too hard on people who are merely prosperous. … Folks working on Wall Street are making a living in an industry that’s systematically dependent on implicit and explicit government guarantees. Making a living as a patent troll is totally different from making a living as a genuine innovator. Dentists enriching themselves by blocking competition from independent dental hygienists and tooth whiteners aren’t the richest people around, but their income represents a healthy share of ill-gotten gains. A viable egalitarian politics needs to find a way to distinguish between “malefactors of great wealth” whose revenue streams need to be systematically re-appropriated, and people who are just paying higher tax rates because of the declining marginal utility of income.

Reasonable people are going to disagree, of course, as to who exactly the malefactors are and what policy levers can and should be used against them. And I hesitate to speculate as to what the consequences of my own preferred ideas would be… But there’s something deeply unimaginative, cramped, narrow, and – I think – fundamentally incorrect about this vision of America where everything is on the level, but people need to pay a top marginal income tax rate of 39.5% rather than 35%.

Yes, that is a nit when the problem is much larger. And Chris Bickerton and Alex Gourevitch do think the problem is deeper, and it is income inequality, and more than that:

There is no single view on economic inequality at Occupy Wall Street or elsewhere, but it is clear that the concern is with a wider form of inequality than mere earning power.

The ability to meet basic needs is of course important, and that is why pushing back against housing and student debt has been a recurring theme. But the relevant inequalities are of social and political power more widely. One sees demands for transforming work, for ending corporations, for real democracy and political equality, for socializing the means of production and for anarchist productive collectives. Some of these demands are contradictory, others downright undesirable. But they have in common the view that the inequality problem here is more fundamental than mere differences in income. Even income inequality itself tends to be seen as a consequence of differences in social and economic power.

So, back in 1910, Teddy Roosevelt was onto something. And it seems Obama, more than a hundred years later, wants to be a bit of a Teddy Roosevelt, even now, and even if his attempts are necessarily modest. But then everyone wants to be someone else. It’s just damned hard, given the forces at play. Real life just doesn’t cooperate. It never does. Heck, just try being James Bond.

About Alan

The editor is a former systems manager for a large California-based HMO, and a former senior systems manager for Northrop, Hughes-Raytheon, Computer Sciences Corporation, Perot Systems and other such organizations. One position was managing the financial and payroll systems for a large hospital chain. And somewhere in there was a two-year stint in Canada running the systems shop at a General Motors locomotive factory - in London, Ontario. That explains Canadian matters scattered through these pages. Otherwise, think large-scale HR, payroll, financial and manufacturing systems. A résumé is available if you wish. The editor has a graduate degree in Eighteenth-Century British Literature from Duke University where he was a National Woodrow Wilson Fellow, and taught English and music in upstate New York in the seventies, and then in the early eighties moved to California and left teaching. The editor currently resides in Hollywood California, a block north of the Sunset Strip.
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1 Response to No Teddy Today

  1. mike shupp says:

    Civilization civilization civilization …

    Ah! Gingrich wants to be Sid Meier.

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