Wall Street and the Founding Fathers

Yesterday's New York Times provides a nice, anecdotal (and I mean that in a good way), look into the worldview of Wall Street businesspeople who supported Obama for president, but now are turning on him over financial reform and his rhetorical corporate America. Of particular note for this blog is the contention by hedge fund manager Daniel Loeb that “[a]s every student of American history knows, this country’s core founding principles included nonpunitive taxation, constitutionally guaranteed protections against persecution of the minority and an inexorable right of self-determination."

Statements such as these go to what should be a core "banalogical rule": if someone is claiming their political views are the direct inheritance of the founding generation and its principles, it's likely they're oversimplifying. What makes the Founding Fathers a perpetual source of fascination and debate is that they were extremely complicated and even contradictory thinkers. Let's take as an example Thomas Jefferson, given that some of his pronouncements found themselves recruited for the complaints of businesspeople on Wall Street. Here are two Jefferson quotes on economics:

(1) "Having always observed that public works are much less advantageously managed than the same are by private hands, I have thought it better for the public to go to market for whatever it wants which is to be found there; for there competition brings it down to the minimum of value." --Thomas Jefferson to William B. Bibb, 1808. ME 12:107

(2) "Money and not morality is the principle of commerce and commercial nations... Justice, honor, faith, must yield to the necessity of keeping themselves in place. The question whether a measure is moral is never asked, but whether it will nourish the avarice of their merchants."
--Thomas Jefferson to John Langdon, 1810. (*) ME 12:376

Do those two quotes make sense in the modern left-right context? Potentially, but not easily. However, in the late 18th and early 19th centuries, in an era when merchants and large-scale businesses were only beginning to emerge, they did. Taking Jefferson and his fellow republicans as a case study, we find that the views on economics debated by the founding generation mixed a variety of viewpoints that today we associate with left and right into patterns very different than today.

Jeffersonians certainly expressed some views which fit in well with conservative politics, as seen in the first quote. Jefferson was a strong proponent of free trade and territorial expansion to provide more lands for production. Support of such policies also led Jefferson to promote an aggressive foreign policy aimed at assisting U.S. export interests, something associated with both political parties, but often criticized from a progressive perspective. Jeffersonians also opposed government subsidies to businesses, seeing them as helping to breed monopolies which undermined a real free market system. One can also find in Jefferson's opinion on the constitutionality of a national bank his fears about excessive federal government power being employed in regulating commerce.

At the same time, Jeffersonians expressed grave doubts about merchants and manufacturers, questioning their loyalty and very morality, as well as criticizing wealth inequality as a major threat to nation and justice. As one example, take this quote from James Madison, who, in speaking about the future of the nation, urged that laws be passed "which, without violating the rights of poverty, reduce extreme wealth to a state of mediocrity and raise extreme indigence to a state of comfort." To those who might find the part about property rights a counter, one can find concrete expressions of Madison's view in places such as his support for a wealth tax in Federalist No. 21. Jefferson similarly advocated versions of progressive taxation and worried constantly about the "misery" wealth inequalities created, as well as the dangers to a fair republic they represented. As the modern corporation began to take form in the early nineteenth century, Jefferson grew increasingly concerned and his writings showed at least as much antipathy to early "big business" as to "big government." As an example, in 1816 he declared that "I hope we shall crush… in its birth the aristocracy of our moneyed corporations."

What to make of this? Well, to put succinctly, Jeffersonians feared concentrated power - they believed a nation of independent farmers (white ones of course, slaves inhabited essentially a different universe), neither particularly wealthy nor poor, mostly unrestrained by government but also protected from the greed of merchants, represented the most just path for the future. Try grafting that into our modern, post-industrial national situation.

That said, I do not mean to imply that the thoughts of the founding generation bear no relevance on today. Many of the larger dynamics they faced are still issues today. Let's just remember they were complex people in a different time before enrolling them into today's fights.

"Business, always business": The Wire and the History of U.S. Capitalism

WARNING: SPOILERS AHEAD

The Wire is that rare cultural creation that is even better than the overwhelming praise would suggest. The show's explorations of urban inequalities, the failures of institutions, and the ambiguities of how people survive (and don't) are truly epic, yet manage to stay grounded in the experiences of its many and sharply drawn characters. Central to the show however is the emphasis David Simon, Ed Burns and co. place on the failures of the current economic model to provide opportunity and decent lives for so many people. One only need to watch the tragic story of Frank Sobotka, head of a local dockworkers’ union, to get a sense of Simon’s deep understanding of the way, particularly since the Reagan presidency, that the "profits before all" economic model has bred an increasingly unequal and in many ways dysfunctional society.

One of The Wire's main arguments centers on how deindustrialization and the failure (as of yet) for the transforming economy or our political system to ensure some matter of economic security for everyone (especially people of color in urban centers) contributes mightily to creating the array of issues associated with illegal drugs. Ironically (as the creators take delight in pointing out), although the drug trade exists outside many societal norms, it is at the same time as thoroughly capitalistic an enterprise as selling footwear or electronics. One can imagine a world in which, if they were legal, some of the despised drug kingpins might be hailed as innovative CEOs.

Building on the idea that the depictions of the drug gangs can teach us about business dynamics, I would like to suggest that watching The Wire contains lessons not only about the present, but also the past. As I plan to help show in a series of posts, watched at a metaphorical level,The Wire presents a solid introduction to the history of how organizational structures and the worldviews of U.S. business have transformed repeatedly over the past hundred years. That may sound a bit outlandish, but given that one of the leading scholars of the urban crisis in the United States, William Julius Wilson, is teaching an entire class based on the show, perhaps not. I'll have more to say about this, but for the moment, here's a sneak peak of what's to come:

1) "Games beyond the game": Avon, Stringer, and the Rise of the Corporation

2) "Making sense of this game": Prop Joe, Stringer, and the Post-War "Consensus"

3) "I ain't been one for meets no how": Marlo and the Robber Barons

4) "And of course, I'm not even Greek": The "Greeks" and the Multinational Corporation

Gay marriage opponents and the USSR

Maggie Gallagher, Chair of the anti-gay marriage group the National Organization for Marriage (NOM) called the overturning of Prop 8 by activist leftist judge (who in fact was a Reagan appointee recommended by Ed Meese) a "Soviet" style takeover. Which makes some sense as a metaphor but also raises a funny little historical issue. See, I know the specter of communism is supposed to be an indictment of liberalism, but if one looks at the actual policies of the U.S.S.R., they were actually much more in line with right-wingers on homosexuality. Starting in the Stalinist era, homosexuality was in fact illegal under Article 121 of the Soviet criminal code which made sexual relations among men punishable by a five year prison term. Communist propaganda not only in the USSR, but throughout Eastern Europe and also in Cuba (though its policies have dramatically shifted in more recent decades) depicted homosexuality as one more negative symptom of capitalism, painting it as a form of "bourgeois decadence." While all of this is certainly much more harsh than what NOM would like to see, perhaps in this area, Ms. Gallagher should rethink what a "Soviet-style" takeover would really mean.

FDR Would Appoint Elizabeth Warren

The historically-minded debate over "is Obama's presidency progressive?" seems the perfect topic for this blog, so it’s long past time I jump in. To summarize: On one side are those who look at Obama so far and see missed opportunities, political cowardice, and a presidency whose ideological marker seems more mushy third-way then strong progressivism. Obama’s failings often find themselves unflatteringly contrasted to the strength and principle that Roosevelt or Lyndon Johnson brought to achieving their legislative aims. Perhaps the most cited example of this involves contrasting some seemingly weak-willed, overly nuanced Obama talk about big business with the fire of Franklin Roosevelt's "I welcome their hatred" speech in Madison Square Garden in November 1936. One could also note the extraordinary pressure Johnson often brought on members of Congress to vote his way on particular bills or even Roosevelt’s noble (though somewhat disastrous attempt) to purge ultra-conservative Democrats with more progressive ones in the 1938 midterm elections.

The other side, best represented by Michael Tomasky in his piece, "Against Despair," urges progressives to take a deep breath and look at the full records of Roosevelt and Johnson. Rather than liberal stalwarts, Tomasky and writers such as Eugene Goodheart, note the many compromises and failings of both Roosevelt and Johnson in fighting for progressive goals. One need only look at the essential exclusion of African-American workers from the original Social Security program (a compromise to Southern Democrats) to see that high progressive principle was not the only pillar Roosevelt stood upon. Overall, as Tomasky describes in writing about FDR, both his presidency and Obama’s provide clear demonstrations of the “difficulties inherent in trying to effect change, the readiness to accept half a loaf, and the regular reassurances sent to the moneyed classes that the liberals hadn’t taken over the candy store.” He then goes on to detail the historical and structural barriers Obama faces that FDR and LBJ did not: the ballooning of the filibuster, the evaporation of bipartisanship, the weakening of social movements like labor, etc.

Overall, I tend to agree with the tenor of Tomasky and others who, looking at the history, find that "all this has happened before and will happen again" so to speak, a subject I hope to come back to later. For now however, let’s focus on one area where a historical perspective does not place Obama in as good standing as an FDR: diversity of advisers.

Generally, both camps have ignored the specific issue of advisers when examining Obama historically. Goodheart does cite Obama's promotion of a "team of rivals" as a positive characteristic of his administration. At a forum about his article, I had the opportunity to ask Tomasky about Obama's lack of progressive high-level appointees; his response focused on the fact that Roosevelt’s cabinet did not overflow with aggressive liberals, but rather counted among its number several conservative appointees, such as Hans "let's cut the deficit during a depression, what could go wrong?" Morgenthau.

The point however is not to expect that Obama’s policy team would be totally culled from the precincts of The Nation or the Economic Policy Institute. Rather, where some disappointment with Obama in historical context seems merited revolves around the lack of an ideologically diverse set of core advisers. I differentiate this from his cabinet in general; on that count Secretary of Labor Hilda Solis is an obvious progressive and strong cases can also be made for many on the energy and environment team such as Stephen Chu or Lisa Jackson. Thinking specifically about the economics team, the question though is how much he listens to those outside the Geithner-Summers pole of opinion. Solis for example has dramatically transformed the Department of Labor into a force siding with working people as it should (we have Treasury and Commerce Departments to look after business after all). But does Obama listen to her about larger economic matters? How much input did Solis have in health care or financial reform? Or Jared Bernstein for that matter?

Now, one could easily fit Tomasky and co.'s overall argument on to the appointee question: with the absurd filibuster continuing as a sort of tragicomical block on reform, what good would some more progressive advisers have? Perhaps none. At the same time, who knows what political and policy options currently receive scant consideration because there are not forceful advisers to make their case. As William Leuchtenburg and others have long argued, Roosevelt did not want to expend political capital on the National Labor Relations Act, although he did not fundamentally oppose the idea. It took the great upswell and pressure of organized labor to provide the space for people Roosevelt trusted (primarily then New York Senator Robert Wagner) to lobby him personally and bring the bill over the line. Similarly, it was the relentless lobbying by Frances Perkins that helped push Roosevelt to embrace and fight for the creation of Social Security. Are there similar situations for Obama? Perhaps regarding a public option or a different sort of jobs bill?

This is where Elizabeth Warren comes in. I don't know how good Obama and her relationship is or how much weight he places on her opinions. However, we do know that Nancy Pelosi takes Warren seriously, as do several key Senators. The fact that in the past she and Geithner have sparred to me is a big PLUS; they're both smart people and her presence could bring some needed variety and yes "rivalry" to Obama's team. Also, like strong progressives in past administrations, she can count on an independent public constituency (in some ways akin to Perkins, whose previous labor advocacy work gave her key allies in civil society) willing to support and assist her, one she has helped build through media appearances, including several with Jon Stewart. Certainly there are other good nominees who could run the agency competently. Warren however, would be an outsized voice, someone who could spark debate and maybe even cause some trouble from time to time. And history does show that it is often the healthy annoyances that catalyze real accomplishment.

Woodrow Wilson's Leftist Lawyer, Part I

It has been one of the more idiosyncratic aspects of Glenn Beck’s version of reality that Woodrow Wilson has become one of its central villains, with our 28th president also serving as the father of the "cancer" that is modern progressivism. Suffice it to say, no, Woodrow Wilson did not invent progressivism. Wilson fits in no easy box (one of the reasons historians keep writing about him), but certainly he embodied both progressive and conservative (even reactionary) views. Wilson certainly has many detractors on the left, who, while perhaps not as vitriolic as Beck, have found much to criticize him for, ranging from Wilson's often hypocritical foreign policy in which rhetoric (and some action) seeming to challenge imperialism cohabitated quite nicely with often imperial policies, his deep racism which saw expression in the segregating of the federal government, and his unforgivable suppression of civil liberties during World War I. Perhaps because of this, Wilson’s legacy as a sometimes quite progressive president have been sidelined, but are worth looking at. To tie these to my previous post about Beck's obsession with Obama's "radical" advisers, I want to look specifically at how major pieces of Wilson's legacy are due, in part, to the work of a "radical" adviser, who helped make the U.S. a fairer nation for the wage-earning masses.

And with that, let us now turn to one of the great unsung heroes of the Progressive Era: Frank P. Walsh. A brilliant labor lawyer from Kansas City, Walsh served as a steady ally of Wilson in the 1912 campaign. This work caught Wilson's attention and led him to push for Walsh to chair the U.S. Commission on Industrial Relations (USCIR), a congressionally appointed body tasked with investigating the problems of labor in the new industrial economy (a commission, it is worth pointing out, created because of organized citizen pressure). Walsh devoted himself completely into the USCIR's work, often stirring up great controversy as its investigations proceeded. Among its most impressive features was the the set of witnesses the USCIR heard from, which consisted of a range of views one rarely sees invited into mainstream dialogue. Coming before the commission was everyone from Industrial Workers of the World founder "Wild Bill" Haywood to the grand industrialists such as John D. Rockefeller and Andrew Carnegie. In a rather surprising turn of events, the members of the USCIR, representing a variety of interests, disagreed with each other on the final report so vigorously that they issued three separate reports! The most important of these however was Walsh's, which also advanced the most radical analysis and recommendations. With exhaustive documentation, Walsh's USCIR report gave a greater legitimacy to the struggles of workers in a time when unions were in many ways still a rogue institution. Walsh minced no words in the report, stating that "the basic cause of industrial dissatisfaction . . . .[is] the fact that the workers of the nation, through compulsory and oppressive methods, legal and illegal, are denied the full product of their toil." He called for unions to be given the right to organize and for the society to embrace the idea that "political freedom can only exist where there is industrial freedom [and he wasn't talking about deregulation], political democracy only where there is industrial democracy."

Before discussing Walsh's further work with the Wilson administration, it is worth taking a moment to comment on where Walsh stood ideologically. While his politics are somewhat hard to describe, he certainly stood on the left end of progressivism and showed at least a comfort with, if not outright support of, socialist ideals. In a letter to Eugene V. Debs, the perennial Socialist Party candidate and hero of American radicalsim, Walsh approvingly quoted one of his staffers' summary of the USCIR report, that, “[a]ccording to this report, Eugene Debs was right, and his only mistake was in being twenty years in advance of the times.” Walsh also maintained a friendship with the renown anarchist Emma Goldman, including providing legal assistance to her. Goldman felt sufficiently ideologically compatible with Walsh to call him in her memoirs a "radically minded man." Yet, Goldman also recognized the limits of Walsh's radicalism, particularly in his close relationship not just with Wilson, but with the Democratic Party, and in the next sentence after noting his radicalism she goes on to accuse him of "political blindness and social muddle-headedness." Walsh's desire to remain connected to the Democrats and the mainstream led him away from some of his more progressive stances, as in his support U.S. entry into World War I, despite having identified himself as a pacifist. Perhaps Walsh himself best expressed the seemingly contradictory relationships and positions he found himself in when he commented to feminist activist Doris Stevens that, "I hate like hell to be so respectable."

In part 2 I will discuss Walsh's involvement in helping set the first real federal labor policy through his service on the National War Labor Board.

Is Rand Paul an NAACP Member?

I don't have anything particularly original to say about the Rand Paul/Civil Rights debate, but one thought has crossed my mind. A number of folks have written about Rand Paul as fitting into the Barry Goldwater conservative mold, including in his reasons for showing, hesitation, about the Civil Rights Act of 1964. Rand's defenders do this in good part to disprove accusations that he is racist. To which I would ask: what has Rand Paul done to fight racism?

Here's the issue: to oppose federal actions/regulations to combat racism and claim that one opposes racism, it's important to show that you can show that people will take private initiatives to combat this societal cancer. While Barry Goldwater's record is by no means perfect on that, his background indicated that the idea of private action was not just a theoretical counterargument. Goldwater was a member of the Phoenix chapter of the NAACP, and not just a passive dues payer; he actively worked for desegregation, overseeing the process in his family's department stores, as well as while serving as chief of staff of the Arizona Air National Guard.

Were such efforts enough? Of course not, but it at least suggested that the libertarian critique against civil rights legislation emerged from real ideological differences, rather than as a cover for ultimately racist views. I would say that modern "Goldwater" Republicans would do well to heed that lesson if they want to be taken seriously, but we're sadly long passed the point where people care about being taken "seriously." Well, except in the DC "serious way" which means moderately liberal social values, along with a pro-bombing and entitlement cutting agenda elsewhere. Yargh.

Glenn Beck Has a Point About the Left

Glenn Beck Has a Point (Part I in a series)

Yeah, you read that right. While Glenn Beck’s version of the past, present, and future has been well analyzed (and challenged) elsewhere, I would like to address one strain of his critique from a slightly different angle. For anyone who’s watched Beck’s show (or seen Jon Stewart’s parodies of it) the sight of Beck scrambling around various blackboards, drawing out the nefarious connections between far-left radicals and the Obama administration are as familiar as the morning commute. Often such connections are, at best, overblown and mostly exist as fantasies easily discounted or disproven. However, Beck’s insistence that radicalism has seeped into the policies and politics of past U.S. presidents actually bears some weight (though not as much for the Obama administration, which, in my opinion, could benefit from some more heterodox, left-of-center voices having the president’s ear). Democratic and progressive presidential administrations have been influenced by more radical actors in this country, and that has often been for the good of the U.S. While there’s a long history of radical movements making demands on the government, I would like to focus on one aspect of this relationship: the role of individuals who had (or continued to) travel in more radical circles who ended up becoming key influences on or members of past presidential administrations. This has been a specific fascination for Beck, visible most infamously in his campaign against presidential adviser Van Jones.

Radicals in the White House

In the next few posts I will explore a few “radical” figures who have become members of past administrations and used those perches to fight for social change. First, it is worth saying a few words about such individuals more generally. What do I mean by saying there have been “radical figures” in the White House? Primarily these have been individuals who have been appointed to various commissions, agencies, or cabinet posts whose political beliefs and experiences were forged (at least in part) through encounters with left-wing ideas and groups (the Socialist Party for example). Contra Beck, most of these individuals, by the time they reach an administration job, have moved towards more “moderate” positions (though not always) and such figures invariably hold very pragmatic views about making social change (otherwise they would not have the desire or ability to work for a U.S. president). Even with these caveats, their goals have often been thwarted and their influence should not be overstated. Despite the many obstacles in their way however, some of the key legislative and political progress on labor rights, social insurance, and civil rights in the U.S. are partially because of such figures.

So stay tuned; first up we'll add more kindling to Beck's Woodrow Wilson hate fire through a look at attorney and labor champion Frank Walsh.