I apologize for that long post yesterday. I just had to get that stuff out of my system so I could get some work done. 

I promised to tell something about my ill-fated and never-ending presidential campaign, so I will. I created a platform consisting of ten parts, and my plan is to roll these parts out one by one over the next week or so. But first, a little about the campaign itself. Oddly enough (or maybe not so oddly), its rationale rather mirrors that of this blog. Here goes:

Every four years, usually in the early spring before an election, I decide to run for President. Here is how it always seems to happen: I survey all those threatening to occupy the White House, looking for anyone with actual good ideas about how to make our great nation even greater. If I find someone, I support that candidate—but he or she rarely lasts long in the race. The reason, I have come to understand, is that the combined influence of television and professional consultants makes it almost impossible for candidates for national office to articulate anything beyond the first paragraph of any idea, if they happen to have one. They’re too busy raising huge sums of money for TV advertising to think about public policy, and the last thing they want to do is alienate well-heeled donors with prospects of significant change that might affect their fortunes. That’s how a man like Barack Obama, campaigning on a platform of “Change”, can vote for the 2008 Farm Bill, the mother of all corporate welfare abominations in U.S. politics.

When this scene replays itself every four years, I remember a slightly screwy but charming and mostly harmless character named U. Utah Phillips. A songwriter and folk club entertainer of a Wobblies persuasion, Phillips used tell audiences he was running for president on the Sloth and Indolence ticket. As an anarchist, he'd say that if elected he promised to hang around the White House and shoot pool because, if you wanted to change something, you needed to go out and do it yourself. He also used to tell audiences that if elections could really change anything they’d be illegal, and so not to vote—“It only encourages them”, he’d say.

It has never been quite fair for me to appropriate Phillips’ Sloth and Indolence label, even though it has well described the tempo of my campaign if not its content, because for all I knew Phillips himself was running again on that ticket. That may change next time I run, since Phillips passed away back in May, I think it was. But unlike Phillips, I would never tell people not to vote. I only tell them not to vote for people who have no good ideas. But I have good ideas, so I ask people to vote for me, heading up what I called last time the Common Sense ticket. I have ten such ideas for starters to make America a better place, ideas far-reaching enough to make a meaningful difference were they to be implemented, but not so far-fetched as to be beyond discussion. These ten ideas are thus “torque points” in American politics, places where positive change would resonate throughout our political culture. Here is a summary of the first one.

No. 1: Re-Create a Culture of National Service

There is a crisis of civic participation in America; we’ve become increasingly a nation of cynical spectators, not participants, in our own governance. No democracy can be healthy with the levels of apathy and alienation that exist today in America. We need to recreate a culture of national service that will have long-lasting benefits for civic participation. Here’s how to do it (and note that this not just my idea).

When an American citizen is born, the U.S. government should create, along with a social security number, a savings account for that child into which somewhere around $5,000 and $7,500 is placed—called a Baby Bond (or, as some prefer to call it, a “Service Bond”). That child’s parents, family and friends may contribute to that fund until the child becomes 18 years of age, and those contributions are treated for tax purposes like charitable deductions: money put aside that can be subtracted from taxable income. Through the miracle of compound interest, every child will have a considerable nest egg upon reaching the age of consent—upwards of $18-30,000.

Even if the Baby Bond idea, which has been operating in Great Britain on a modest scale since 2003, stopped there, it would be useful as a way to get equity spread around to more young people who can put it to productive use. In my plan, it mustn’t stop there: To get that money, every citizen would have to sign up for and do national service in one of eight categories: military; Peace Corps; Educore (like Teach for America); forestry and environmental remediation; urban “broken windows” brigades; hospice and elderly care; hospital ship duty ; and a “habitat for humanity” program. (Military service, by the way, should be made to attract only a small percentage of Baby Bonders, because the last thing our generals want or need is a huge number of untrained short-timers to put up with.This idea, therefore, is definitely not a smokescreen for a new military draft.)

One 12- or 18-month stint of service, complete with training, would have to be done between ages 18 and 25, and that first stint would entitle a person to three-fourths of his or her Bond. Another 9-12 month stint at any time, even after age 65, entitles the person to the rest (it stays in the same account earning interest until its owner chooses to collect it). Our 18-25 year olds can use that money to pay for college or vocational training, to buy a home or to start a business. And we’d be crazy (we are crazy) not to encourage our older citizens to share their experience with others. This is the way to create a real shareholder mass democracy.

Everyone seems to understand the rationale for Social Security: We hold ourselves as a society morally responsible for providing a basic minimum for our elderly out of respect for their humanity and an abiding sense of basic fairness toward them. If we care about our elderly enough to pool social resources on their behalf, why don’t we take a similar attitude toward our young people—young people who not only deserve a fair start, but whose accomplishments in the constructive lives ahead of them will benefit us all? The Baby Bond idea is not charity or welfare; it is socially selfish, for it benefits everyone.

Because it will benefit everyone, businesses and state and local government will have good reason to offer partial or full matching funds to encourage Baby Bonders to spend their money at colleges or in areas they wish to encourage. So, for example, if the City of Pittsburgh, say, wanted in-state Pennsylvania Baby Bonders to invest in real estate or businesses in certain parts of the city, the municipal government could offer special incentives to attract Baby Bond resources. If General Electric wanted to encourage more students to go into electrical engineering, it could offer to match any Baby Bonder funds used to pay toward an academic major in that field. The possibilities, if not literally endless, are extensive.

In my version of the Baby Bond-National Service concept, the first 12-18 month stint of service, in whichever of the eight categories is chosen, must be done away from a person’s home area. The government will provide enough of a stipend for basic subsistence housing and board (financed in part out of the interest-earning money it is holding in maturing Baby Bond accounts), just as “City Year” and AmeriCorps programs do now.

A key reason for “circulating” our 18-25-year olds is to break the downward spiral of poverty, drug addiction and hopelessness that afflicts a still far too large percentage of inner-city residents, and a significant number of rural “white” poor, as well. The only way to really solve this problem is to literally remove young people away from harmful environments and have them come face to face with people of their own age from different places. Moreover, the only way to generate real understanding for people in such straits from the rest of our population is to have them actually meet and get to know one another in a neutral environment. The military draft used to help fulfill this function in the past; we need that function again, now by dint of another method.

This proposal amounts to integrating the many private volunteer and public service programs already in existence, and perhaps adding a few more. It amounts really to scaling up dramatically and incentivizing in a new way what we already do in a fragmented and inadequate way. Even so, a national service program of this magnitude would not be cheap. Even if we use existing non-profit infrastructures to their maximum, the government would have to put aside (but not initially spend) money for Baby Bonds, pay out money when service is rendered, and pay for the operational costs of the program, as well.

But, then, the GI Bill—which serves as the basic model for this idea—wasn’t cheap either. Neither was the Civilian Conservation Corps, but that worked, too. Just like the GI Bill and the CCC, the benefits of a Baby Bond National Service Program would more than offset its costs over time. Just think of the costs we as a society already pay for prison and drug-related debilities on account of how poisonous environments trample the hopes of so many young people. We do not have to tolerate those costs, which go way beyond the merely monetary. If we look at all the cost factors involved over the long term, a national service Baby Bond program would beyond doubt be an overall economic winner for the nation. As it is, every dollar spent on AmeriCorps volunteers pays back roughly $2 in services rendered.

Besides, costs are relative. We know how many Americans will turn 18 in any given year—a little under four million—and we can estimate program costs within reason. If we do that math, two things become clear: first, that the United States of America, the wealthiest mass society in history, can afford the Baby Bond-National Service Program; and second, that the costs are almost trivial compared, say, to wars like the one in Iraq or the financial bailout of recent months.

Note, too, that service is not compulsory, and there is no penalty for demurral. There would be no costs for the government having to track down truants and dodgers, for by definition there cannot be truants or dodgers. If a person does not wish to do service, his or her bond is merely forfeit and the money goes back into the general pool to earn interest, pay for program operations and help others. But once a culture of service is created, I believe that the opt-out rate would be small.

Obviously, a great deal more can be said about how this program would work and what its main challenges and many benefits would be. Clearly, intervening into the negative social patterns in our inner cities can’t wait until people are 18 years old, so supplementary programs would have to be devised (I have ideas here, too). But note that sending Baby Bonders in to help rescue the just 15% of our high schools nationwide (about 2,000 schools) that produce the majority of high school drop-outs can make a tremendous difference.

And we can’t wait 18 years from the passage of a bill to graduate our first Baby Bond class; we’ll have to devise ways to accelerate the program between now and 2027. But based on the already existing incubus of AmeriCorps, we can find ways to scale up over time to do that.

The patterns of undergraduate university life, too, would be temporarily thrown off pattern, as significant numbers of high school graduates do service instead of becoming college freshmen at age 18 or 19. But does anyone think it would be a tragedy for our young people to go to college a year or two more mature than most do now? Who is anyone kidding? It would be a huge improvement for our kids and our colleges alike.

Of my ten ideas, this one has the greatest potential to change American society for the better. You think it’s too hard? Then your own thinking is part of the problem, so please think again.

Cycles, Bicycles, Tricycles

President Obama held his first news conference yesterday. He did reasonably well. He was serious, on point and well balanced in the optics he projected. He also managed to duck some questions designed to get him into trouble. Whether he seemed properly presidential is another matter; it's still early. He said one thing in particular, however, that caught my attention, and provides a perfect hook for my chosen subject today: "This is not your ordinary, run-of-the-mill recession."

Well yes, that's right. But one wonders exactly what he means by that, for he did not elaborate. Unfortunately, none of the press present had the brains to probe further on how the President understands and interprets the problem. They did what they usually do: Focus on personalities and superficial politics, the "who's up/who's down" method of creating what people think of as news, but which is really a form of ever so slightly highbrow gossip that works commercially, like nearly everything else in these "bread and circus" times, as entertainment. (Some of my best friends are journalists--I have to say that, of course. But you will find as this blog progresses that I am not particularly impressed--at least not positively--by what most mainstream journalists do most of the time.)

This is of a piece with what has seemed to me to be an astonishingly superficial discussion we have been having in public about the economic mess we're in. I am about to deepen it for you, you lucky dog. But be warned: This will not be a short blog.

Now, first, a full disclosure: I am not an economist--neither a classical macroeconomist of the postwar ilk nor what is now often a behavioral economist, which, it seems to me, is just a new term for what used to be called a microeconomist. A macroeconomist, in case you missed this day in school, is someone who looks at large trends and the data that describes them. A microeconomist, or a behavioral economist, is more interested in individual and small group behavior, making him a trafficker in what other social sciences have to say about human behavior, notably psychology, anthropology and sociology. 

While I have never wanted to be a macroeconomist, or to know a whole lot about macroeconomics anymore than I ever wanted to be a lawyer, I have always wanted to know more about microeconomics as an aid to my main interests as a social scientist, which is best defined as political sociology, or political anthropology, perhaps. I pay attention to new books about "animal spirits"--a term once used by John Maynard Keynes himself--as a key to understanding why markets do what they do, and I am interested in what behavioral economists like Robert H. Frank, Tyler Cowen and others have to say. (These two gentlemen, I am happy to note, are recent additions to The American Interests' editorial board.) I am not interested very much in what the rational-thought model of social science has to say, because it all strikes me as so retro-positivist--Skinnerian even--and wrong, and far too abstract to be taken seriously as actual social science. But never mind methodological and epistmological foreplay: What the hell is going on out there, anyway?

Let's start with the most obvious elements of the problem and move along to the less obvious ones. We have not one but three problems, as Bob Samuelson pointed out some days ago. We have a financial meltdown and consequent credit crunch as the result some very stupid behavior on Wall Street. We also have a collapse in consumer spending, which is related to but still independent of the first problem. And we have an international economic problem thanks to the integration of the world's financial and trade markets, which is making itself felt in rising protectionism and the virtual disappearance of capital and credit from the poorer countries. These three problems have related but not identical causal patterns. So there is no one solution for the problem, because it isn't one problem. 

Timothy Geithner's approach to the second iteration of the bank bailout is designed to address the first problem. The stimulus package is designed to address the second problem. As far as I can make out, nothing much is being done by governments to address the third problem, although it is true that the President did see the wisdom of resisting the "buy America" element in the stimulus package. As understandable as the idea is, for a reason explained below, it would only contribute to beggar-thy-neighbor protectionism that would make pretty much everyone worse off by dampening demand worldwide.

All of this, so far, is pretty obvious, I think. Less obvious is what caused it all. For a good while most people thought that the subprime mortgage debacle was the root cause of the problem. And this view, naturally enough, led observers to focus in on the Wall Street subculture, and the regulatory environment for it shaped in Washington. This is part of the problem, to be sure, but it is not necessarily well understood. 

It is true that technology is to blame for part of what has befallen us. The speed with which transactions can be completed has enabled new products like bundled investments and derivatives to dash around madly below the radar of more sagacious observers. The top people in may investment firms really had no idea what the kids they hired were doing at their computers. So the sheer volume of bad investment decisions rose much faster than the regulatory system could detect and correct for them. It is true, too, that the incentive structures for both the bond-rating agencies and the SEC itself have been either perverse or way too lax. And it is true, further, that a market-fundamentalist ideology--that markets could be counted upon to regulate themselves--is partly to blame for that. It demobilized our sense of the possibility of error and tragedy. It made the crooked timber of humanity, to remember Kant's famous phrase, seem suddenly straight.

But that is not the whole story even at the level of the subprime crisis, and it turns out that the subprime crisis is not at all the source of the overall problem.

The beginning of wisdom here is that a regulatory system is effective in relation to the people it is supposed to regulate. If you have a flawed and loose regulatory system, it will still work reasonably well if the people being regulated are basically provident, patient, honest, abstemious and mindful of intergenerational responsibility as inculcated in the traditions of society's core institutions. But if you have people who are greedy, impetuous, dishonest, debauched and selfish, even a much more rigorous regulatory system will not work well. In the end the problem at this level is not about values but virtues. One would do well to recall something Edmund Burke once wrote: "Men are qualified for civil liberty in exact proportion to their disposition to put moral chains upon their own appetites. . . . Society cannot exist unless a controlling power upon the will and appetite be placed somewhere, and the less of it there is within, the more there must be without. It is ordained in the eternal constitution of things, that men of intemperate minds cannot be free. Their passions forge their fetters."

This is why, when this mess began to take the shape it did, The American Interest searched at this level not for the symptoms of the problem but it's true source: virtue, not value. So I thought immediately of Gertrude Himmelfarb and her work on the Victorians, but she never replied to my invitation to write. Neither did Thomas Sowell. Nate Glazer replied, but declined to commit to write. I had to content myself with a marvelous essay on "The End of Thrift" by Barbara Defoe Whitehead, the end of thrift being a part of the problem but not the whole of it. 

I still insist that, as far as Wall Street is concerned, the real issue isn't technical or technological; it is moral in the broadest sense of the word. And that is why, too, I have commissioned Ramesh Khurana of the Harvard Business School to write on the monumental but virtually unmentioned shift in business school culture over the past thirty years. We have gone from a time when business understood its social responsibility as that of creating wealth to one that rewards and cares about only making money. These are not at all the same things, of course, but that I need even to point that out is a measure of what has happened to us as a culture. 

Yes, we have to change the way the bond-raters get paid. Yes, they have to get serious over there at the SEC, start guarding the chickens rather than feeding the foxes, and Ms. Shapiro seems to understand that very well. Yes, along with Senator Levin, we have to do something drastic about offshore secrecy jurisdictions, which aid and abet the cavalier deals and selfish behaviors Wall Street has specialized in lately. But even all that will not make bankers and hedge fund operators any more intrinsically trustworthy. It will only constrain their ability to act badly within the law. Rather, the business culture itself has to change, and we have to hope that it doesn't take thirty years. We need more George Baileys and fewer Mr. Potters, if the metaphor from "It's a Wonderful Life" works for you. How do we do that? I wish I knew. I do know, however, that changing a few regs will not do the trick. 

As I say, however, the subprime problem is not really the source of the mess. As most people know, the subprime bubble arose in part because an earlier bubble, the tech bubble of the previous decade, was never really popped and deflated. Thanks to Mr. Greenspan's political instincts, about which we could speak for hours, the Fed let interest rates dwell at rates that instead caused the bubble to migrate into the housing market. But even this is not the source of the problem, but only a prior second-order manifestation of it. The source of the problem, as Martin Wolf of the Financial Times has been at pains to point out now for some years, is that there was just way too much money in American banks and financial institutions, far more than could be lent out wisely.

There was way too much money to lend to the U.S. government, whose deficits were nowhere near that level. American businesses did not need to borrow so much, for the their profits were adequate for their own investment in capital. So where did it go? The banks essentially tried to bribe the money into loans to consumers using very low real interest rates. Want to buy a house you can't afford? We can make that happen. Want to extend your debt on your credit cards? Let us accommodate you. Want to borrow huge sums to send your kids to expensive private colleges and universities, so that you can keep up in the status race for the future? Here not only did banks oblige, but the Federal structures for student lending became bizarrely corrupt, and university administrations, for reasons of their own, hiked tuitions and fees way up trying to take best advantage of loan environment. Yes, you heard me right: The breathtaking rise in tuition in recent years, vastly above the rate of inflation, is partly because of all the money available to be borrowed by status-sensitive parents. 

Where did this money come from? Well, China, and Japan and the Arabs mainly. The Chinese in particular, trying to propel export-led growth like the Japanese and Germans did three, four and five decades ago, have kept their currency artificially undervalued. They have done this, and prevented inflation, by soaking up export earnings in dollars and reinvesting them back into what was and, amazingly, still is, taken to be the safest place: the United States. Think of it this way: Joe the plumber goes to Wal-mart and buys some cheap piece of Chinese junk he doesn't really need but wants anyway because he saw it advertised on TV, and pays for it with a credit card; the Chinese manufacturer makes $2 from the purchase, and the Chinese government buys those dollars with cheap yuan (which the manufacturer saves or reinvests) and uses them to buy T-Bills.  So the $2 ends up back where it came from, except now it is the property of the Chinese government in some sovereign wealth fund. The Fed keeps interest rates low, because it would attract even more foreign capital if it promised higher yields. And that encourages consumers to borrow more and go deeper into personal debt, and the whole stupid cycle starts all over again.

I've left out a lot, like the inflation-dampening effects of cheap goods from abroad, and I intend to keep it left out, but you get the basic idea. The basic idea is what Niall Ferguson has called Chimerica--the idea being that China and the United States formed a single economic system in which China saved and manufactured and America spent and consumed. They basically acted as our savings bank, and we provided them a market sized commensurately to their expanding manufacturing base. This led to a huge trade deficit, of course, which had to be financed, but the Chinese and others were happy to help finance it, even at low yields on their investment, to sustain American demand. And around and around and around we went until the whole arrangement simply went off the tracks, and Wolf and few others warned it had to eventually.

It is human nature that too much money chasing too few really valuable goods and services is going to eventually lead to people taking risks they should not take. Money should not sit idle; it should earn more money. And of course it's a kind of game, too, in which emotions about status and success play a role. The bubbles we've seen were the result of risky behavior at a near mass level. Ordinarily, you learn in economics class that too much money chasing too few goods and services leads to inflation, as the price of what there is to buy is bid up by raging demand. But an asset bubble is a kind of inflation, after all. As long as the money supply is responsibly shepherded, the currency will not degrade. But that only stokes asset inflation--the money has to go somewhere. But just like a currency inflated beyond the value it can actually procure is worth less, so overvalued assets end up creating what amounts to virtual, ghost or fantasy money. I am sorry that so many people my age have lost so much of their retirement savings, but they have to know that a lot of that money wasn't ever real in the first place; it did not represent real value extent in the real economy.  

Of course, if in the past 16 years we had had a government that understood all this, the government might have borrowed massive funds at low rates on behalf of long-term investments in infrastructure, education, energy research and technology and a few others areas. That money borrowed would have paid off in spades had it been invested wisely--like the GI Bill did, only several hundred times scaled up. But this didn't happen. The Clinton Administration was happy that it left us with a balanced budget and even a surplus there for a while. Democrats took pride in that. They shouldn't have. As for the Bush Administration, as far as I can see it had no economic investment strategy for the long haul at all. It took a market fundamentalist view of things, an ideologically driven policy in that domain no less than its foreign policy after 9/11 was faith- instead of reality-based.

So far, I have been talking about the recession/depression (we'll find out which it is in due course) as though it were just a bigger, badder business cycle. That was the premise of an interesting article in the Wall Street Journal last week by two economists, Reinhart and Rogoff. These two scholars did us a service of sorts by comparing past recessions both here and abroad. By looking at the historical data and plugging in what we know about our own situation near the front end of the current recession, they predicted how deep and how long this one was liable to be. Very interesting. 

Toward the end of the piece they admitted that this recession displays some differences with past ones, including the 1981-82 U.S. recession, the last really deep one we experienced. But, as if the editor was holding a sword and a limited word count over their heads, they only managed to mention one: global scale. This recession is global in a way the 1981-82 recession was not, so that American investors lost money not just here but pretty much everywhere. Spatial diversification no longer buys much insurance against tough times. Fine, but that is hardly the only difference.

One other difference is that in 1981-82 Paul Volcker was deliberately trying to create a recession in order to wring a devastating inflation out of the economy. It was painful, but it was the right thing to do and it worked. Now, we're trying to do the reverse: We're not fighting inflation but deflation.  We're trying to create not a recession but some inflationary sparks to offset the deflationary trends. One would think, would one not, that the policy measures one would take would hardly look like those of 1981-82? 

Another difference is that in 1981-82 the United States retained a much larger manufacturing sector than it has today. I don't know the numbers, but I would not be surprised if our manufacturing sector today involved no more than 15% of the labor force, and it may well have been double that 25 years ago. If you go to the American Midwest and talk to people, you quickly hear tales of large manufacturing concerns having simply disappeared. Now, to stimulate an economy like the one we have today do you use the same models as those that were used 25 years ago?  I've asked some economists this question. Some say it doesn't matter what the ratio of manufacturing to services is, you do the same things with interest rates, taxes, money supply and so on. I've asked others who answer that with so much of what Americans buy being imported today compared to 1982, you do need a different model. If the stimulus puts money into the hands of Americans through tax cuts, but the money gets spent mostly on stuff from China and Korea and Indonesia and oil from the Arabs, well, it seems highly unlikely that this is going to create or sustain the same number of American jobs as would be the case if all or most of that stuff were made here.  Hence the reference above to the logic of the "buy America" impulse. So those economists who say the manufacturing/services ratio makes no difference do not persuade me. 

And then I have actually met a few economists who I sense are telling the truth. The truth sounds something like this: "We have no idea. We do not yet have the methodological tools to generate any empirical basis upon which to give an answer. Yes we need a new model, but no, we don't have one."

If this is what the President meant by the phrase not your run-of-the-mill recession, well, that's both good and bad: Good that he realizes that we're off the charts, bad that our economic experts have no real idea what to do.

So far, we have raised the possibility that this dive in the business cycle may be sui generis and hence not subject to prediction or policy treatment based on past experience.  But now it's time to go to a more speculative level. What if what we're witnessing is not just about a business cycle, the sort of cycle typically measured in 12, 18 or 20-some-year intervals? What if what we are seeing has to do with a cultural cycle whose causal power exceeds that of a business cycle, and is shaping this particular business cycle in ways we are not accustomed to perceive?

What on earth am I talking about?  I will try to explain, but bear with me, please, for we need to take a few steps sideways to set the stage.

Forty years ago and more there was a spate of books and article on automation and its social impact. To simplify, a lot of people were very impressed by the sharply rising capacity of humans to design machines to substitute for human labor--machines that could do whole categories of work faster, better and cheaper than people could. Of course, assembly line use of machines predated the 1950s, but the scale and sophistication of machine tooling and automated processes really took off after World War II, and we'll not delay here to go into the sociology-of-science reasons why that was. Suffice it to say that it dawned on some people to ask the following kind of question: What if, twenty or thirty or forty years from now, we reach a stage where only a fraction of our labor force--say 10-20%--are able with the use of sophisticated technology to produce all the core products we really need: food, energy, shelter, transportation, medicine? What will the other 80-90% of the labor force do?

In some versions of the automation thesis, it seemed inevitable that Western economies would have to devise some means of collectivizing not the means of production, but the means of distribution. The basic idea was there there were core, indispensable economic functions, as described by the categories just mentioned, and everything else that was secondary, or tertiary. So if so many working Americans were not necessary for core production, how would food, shelter, transportation and the rest make it from the producers to the whole population? How would the nonessential buy it? Where would their spending power come from?

These rather old-fashioned types concluded that, well, we'll just need to give them what they need; they won't have to buy it. How will the superfluous 80-90% spent their days, get satisfaction, feel purposeful and maintain their dignity? That was a tough one, and answers varied: Arts and crafts; lots of leisure; and whatever other non-essential activities that transcended just laying around shooting pool and drinking beer people could think of. (Yes, I'm being a little glib here, but not that much. Don't believe me? Go read this stuff for yourself.)

What actually happened, of course, was different--but for some strange reason is still not well understood by a lot of Americans because, after all as the saying goes, a fish is the last to discover water. What happened was, to make a very complex matter simple, a consumer society, complete with the generation of artificial "needs" manufactured from naked "wants" via the genius of advertising. That consumer society came complete with planned obsolescence, with, for the first time in human history, whole factories making products no one really needed that were planned to break and be disposed of--thrown away. So the way nonessential workers got money to buy essentials and filled up their work hours so as not to feel completely marginal to creating social wealth and welfare was by doing things on the outer edge of necessity, but which were rarely if ever discussed in those terms. 

Now, running a society and an economy this way accelerates the use of raw materials and accelerates the creation of waste. It also requires massive social delusion, wishful thinking, or non-thinking, by equating the social value of someone producing food or steel or quality education with someone working in a factory making sea-monkeys or plastic-ware. If any American from the 18th or 19th century were to somehow be plopped down in late 1950s, 1960s, 1970s America and witness how most people were making their livings, they would simply not have been able to understand what they were seeing. Take the aphorisms in Poor Richard's Almanack and they harmonize well with pre-World War II America; look at them in the context of the throwaway, fast-food culture of postwar America and they seem a kind of bad joke. Such a person, whether Ben Franklin himself or some lesser typical man or woman, would look at us and conclude that some mysterious derangement had occurred.

Now, as I say, this is highly simplified. One way it is simplified is that science and technology made more products available to people, so that "want" turned not unreasonably into "need." How about an electric washing machine? It beat the hell out of washboard and tub. How about a refrigerator instead of an ice box? How about power tools? Better automobiles, radios, record-players and medical care, in particular? It is no easy matter for anyone to say objectively where "need" stops and "want" starts as time moves on--everyone knows that. Do you really "need" a microwave oven, despite the fact that people lived well and never missed one for more than 99% of recored history? But sure, you "need" one.  Heck, I have one, too. 

Fair enough--it's a tough call between need and want at the margins. But beyond the margins it is sometimes not a tough call at all. Who "needs" a hand razor that vibrates? Who needs pre-packaged food full of preservatives? Who needs room deodorizers that last six months? There is simply no doubt, in my mind at least, that a great deal of demand in our economy is artificially produced by prodigious amounts of advertising in all forms, of which television was the key original delivery vehicle, and really still is. Do an experiment, if you watch television. Monitor all the commercials you see over a period of, say, a week. Write down what's being sold. Then, after a week or whatever period you choose, review the list and ask yourself: "Which of these products and/or services advertised do I really need?" Not "food", but a Wendy's double-cholesterolburger with cheese and pickles that's actually pictured and advertised. The answer, of course, will be none of them. Not one thing; not one service.  If you really need something, there is no reason for anyone to advertise it, save, if necessary, to let you know it exists. 

Of course, bad feelings about the throwaway consumer culture and the madness of television in being the delivery vehicle for it all have existed for a long, long time. A lot of traditional people, religious people, conservative people did not like what they saw the first time they saw it. But these were a growing minority. 

It's true, too, that in the mid-to-late 1960s and into the 1970s the environmental movement, the ecology movement and the counterculture generally were all motivated by opposition to this kind of artificial economy and the social effects it produced. Lots of people warned that these social effects, not to mention the literal long-term costs of this kind of social organization, were not sustainable. Daniel Bell wrote a book in 1976 called The Cultural Contradictions of Capitalism in which he tried to suggest the mechanisms by which this system would undermine itself. (Bell was, and remains, a social conservative but also a socialist, something most people think of as sort of an odd combination but which I understand intuitively.) Twenty years later, when Bell wrote a new introduction to the book, some critics took him to task for being wrong about practically everything. Capitalism was alive and well, socialism was discredited, the American economy was going gangbusters, and so there, Danny boy, in your eye! Now who looks to be closer to the truth, perhaps--Bell or his critics?

In short, what I am suggesting is the possibility that a cultural cycle is finally drawing to an end, a cycle in which consumerism, material fetishism of all kinds (where depressed people go shopping to relieve their depression; after all, every age has its specific psychological illnesses), and disdain for or the discounting and ridiculing of traditional social restraints associated with religion are ebbing. Maybe consumer spending is down so sharply not only because people are worried about not being able to make core-need ends meet, but because ever more people are sobering up and asking themselves, what do I need all this crap and clutter for anyway?

I don't know if that's really so. Maybe I am giving the typical American way too much credit for straight thinking. I probably am; most Americans, I am sure, are spending less because they're frightened of losing their job. But what if it is so, or what if one day not too long in the future it becomes so?  What are the implications for American recovery from this mess we're now in, and for the future of the American economy?  

One implication would be that a lot of the jobs now disappearing in nonessential (or downright harmful) sectors of the economy will never come back, and should never come back.  So assuming we don't move to collectivized means of distribution (which would be a bad thing, to be sure), what will new and useful jobs look like?

It's not up to me, you know. But if it were, I would not be shy about making a few suggestions about the kinds of long-term investments America ought to be making. 

One would be to revitalize American agriculture--make it far less capital-intensive and agribusiness-oriented than it is now. I could imagine a new Homestead Act of sorts, where the Federal government revises the old "40 acres and a mule" formula, and gets more distressed and socially stranded Americans back to the land, an expanded agricultural extension service there to help them learn best practice in growing food and animal husbandry. There's nothing wrong and a lot right with producing high quality food, and that looks to me like a major export bonanza lies ahead, as well.  (I could go on about the environmental damage created by agribusiness and the political distortions its lobby is responsible for in Washington, but I'll set that aside for now.)  

Another would have to do with education, the development of the highest quality human capital being the best investment any society can make in its future. And that's very labor intensive. It also means that we should open our doors to smart, creative entrepreneurial talent from abroad. We don't do that well anymore; seems we'd rather let in, or allow to stay, immigrants capable only of being gardeners, maids and bedpan emptiers. Boy, is that stupid.

Then, as everyone knows, there are new jobs in green energy paths. I love when people talk these days like this is something new. There hasn't been a new concept here in 40 years, though there have been some new technical breakthroughs.  We could have done this sort of thing decades ago had the Congress any guts or foresight, or a President who made it a top priority. We've had no such thing, of course. Maybe we do now, however.

We can skip generations of technology in infrastructure development, too, and also in medical technology. Lots of high human-capital input jobs there.

And I believe that any truly liberal society also needs art, craft, music and literature. These are not superfluous to core economic functions; they inspire them in the first place. 

If I try hard enough, I can close my eyes and see America several decades hence as a healthier, wiser and better society, with many more farmers and shepherds and teachers and artists and musicians and writers, and lots fewer advertising executives, K Street consultants, TV salesmen and repairmen, and fast-food "restaurants." 

Of course, I have to close my eyes to see this America, because as far as I can tell it's all just a dream. Look at where we are with this stimulus package, and the debate over it. There is little to nothing transformational, in any sense, about what the President and the Democrats in Congress have proposed. And the Republicans, lord love a duck, are even worse right now: There is nothing too short-term for them. They want the stimulus package to be even more short-term than it already is!  These are supposed to be real conservatives?  Do they even know what word means?

Final thought for today: Maybe we're not talking just about a business cycle, or even just a culture cycle. Maybe we're talking about a civilizational cycle that involves the whole world, or most of it.  We've had periods of globalization before, though less fully planetary in scope. There was the "other" gilded age of the late 19th and early 20th century. There was, it can be fairly argued (though I don't have time to describe it), the fairly well integrated Euro-Mediterranean culture of the high medieval era (say, late 12th to mid-14th centuries). There was also the integrated world of late classical times, say early 2nd to mid-4th centuries. None of them lasted. The earlier two were destroyed, you will be amused to learn, by pandemics (Justinian's Plague and the Black Death, respectively) enabled in part by climate change, and wars that erupted from the social chaos that followed. Note also that both World Wars I and II followed sharp economic downturns that followed in the wake of heightened material expectations. 

Does that mean I expect this sharp global recession to kindle major wars, or be attended by a civilization-scale pandemic?  Oh, I'm just a magazine editor; how on earth would I know? Barack Obama is the President. He's the one who understands that this is no run-of-the-mill recession. He's the one who needs to know.  Does he?

Next up, several blogs describing my ill-fated but never-ending presidential campaign....

 

 

I took another extended weekend off from this blog, which would ordinarily lead me to apologize for so doing to all my expectant and disappointed readers. But since virtually no one is reading this blog, for reasons explained earlier, I don't have to do that.  It doesn't mean, however, that I haven't been thinking about Obamanation and the Newest Deal while I was sleeping, reading, playing music, getting my brains beat out at bridge, walking in the woods, baking rye bread and making an eggplant parmesan that truly kicked culinary ass. I have indeed been thinking, and I'll come to that in a bit. But first a little public service notice, or better, some backstory to a public service notice.

In Sunday's Washington Post, front page on the right above the fold--in other words, the Post's Sunday lead--there appeared an article by Karen DeYoung (one of Colin Powell's biographers, as it happens) entitled "Obama's NSC Will Get New Power." You can read what General Jim Jones has in store, evidently with the President's approval, for yourself. What you can't read in the Washington Post is about where these ideas came from. They came, in the main, from a two-year Congressionally-funded commission called the Project on National Security Reform (PNSR). 

PNSR was conceived and led by James Locher, the man who also conceived the Goldwater-Nichols reform back in 1986, the one that revamped for the better the structure of the Joint Chiefs of Staff. Not only was General Jones one of about two dozen commissioners who have been with the PNSR effort pretty much from the start, so was the new DNI Admiral Dennis Blair. You can go to the PNSR website for a list of the other members; if you're more or less attentive to the American national security/foreign policy scene, you'll recognize plenty of the names. 

If you want really to understand the analysis behind what Gen. Jones is thinking and has said and plans, you have two choices. One is that you can read the PNSR Commission study, which will be available to the general public pretty soon, but that's about 650 pages--a small hernia, in other words. Or you can read the executive summary to the study, of some 5,000 words, published in James Locher's name in the January/February issue of The American Interest. The American Interest is, of course, the magazine of which I am the founding editor, and it so happens that I helped the PNSR commission, in the latter weeks and months of its effort, to craft that executive summary upon Mr. Locher's request. Translation: I wrote it, and that's largely how I managed to snag this important piece of work for my magazine. 

That doesn't mean that I'm on an intimate basis, politically speaking, with General Jones. Never met the man (yet). I did go to one PNSR Commission meeting toward the end of the effort, in case anyone in attendance wanted to ask questions about my draft executive summary, and I did see Admiral Blair there--and we spoke a bit. We've since exchanged a few emails and I sent him the intell material from the March/April issue of the magazine (essays by Gordon Lederman and John McLaughlin). 

We'll see how this new NSC works out. I am optimistic that General Jones understands the system and its flaws, and has a good line to how to make things work better. But one thing is already clear, however: The transition to a stronger, more authoritative NSC is not likely to be a smooth one. The system in transition has already scored one doozy of a boner. 

Jones apparently offered General Tony Zinni the post of U.S. Ambassador to Iraq, replacing Ambassador Crocker who is leaving real soon. Possibly seeing this as a power grab, Secretary Hillary scotched the idea, apparently arguing that it wasn't a good idea to have military guys in both Baghdad and Kabul (General Eikenberry, a 3-star, is headed there). So Chris Hill got that job instead--Chris Hill of the Six-Power Talks negotiations, Chris Hill who I met and worked with on Air Force II (and on the ground) when I travelled to India, Pakistan, Korea, China and Japan with Secretary Rice almost exactly four years ago. But that's not important.

Anyway, this was pretty embarrassing, obviously. Jones then reportedly apologized to Zinni for the mix-up and asked him if he'd wanted to be our man in Riyadh instead.  Zinni, again reportedly (heck, I certainly wasn't there), general to general, Marine to Marine, told Jones where he could shove that job. 

Boy, isn't gossip fun, especially when it has that strong, musky odor of verisimilitude about it? 

You can see why Hillary felt as she did, assuming she did and this was not just an innocent start-of-administration communications mix-up. The Arab-Israeli portfolio has been rented out to George Mitchell, the Afghan-Pak portfolio to Richard Holbrooke. Vice-President Biden has staked a claim to policy on Russia and NATO. What does she get to do? Stare down Hugo Chavez? 

But maybe she's lucky. Look what these folks have drummed up for Afghanistan alone. You've got a 4-star in Washington at Centcom, General Patreaus, with overall authority on the security side. You've got another 4-star in the field there, Gen. McKiernan. You've got a 3-star soon in the Embassy, Gen. Eikenberry. You've got Holbrooke as special representative of the President. You've got the lurking Biden, who has taken a special interest in Afghanistan for some time, and one of his longtime aides, Tony Blinken, in a hot seat with a joy stick at the NSC. Someone down there is the Assistant Secretary of State for Central Asia, too, presently Richard Boucher but probably not for long. And so the question: Who the hell is in charge?!  Beats me. Hillary is wise to stay out of the way until this gets sorted out.....if it ever does get sorted out.

Anyway, I have had lots of other thoughts this weekend, mainly about cycles, bicycles and tricycles. And I want to tell you all about my failed Presidential campaign as well--not the rubber chicken I never ate but the ideas I developed. But later for this......later. I have other things I need to do.

Boy, things just get stranger every day around here, in Washington. The Montgomery County government is threatening to curtail public transportation. This is a replay of what it tried to do last year, even with my commuter bus, the wonderous #37 Ride-On.  We arose to stop the stupidity back then, trying to explain to the county executives that eliminating efficient modes of transportation and forcing the substitution of more expensive ones would not save county government money in the longer run. This is obvious. We also tried to explain that their proper metric of accounting was not their own parochial budget but the good of the community people who elected them. This was a hard concept for them to grasp. 

Apparently, they are not alone. In the New York Times yesterday, there was a front page story, dateline St. Louis, about the paradox of there now being more riders on buses and trains and less of them to ride. It's not a paradox, but a sign of stupidity, and of the Federal system not meshing properly. You cut public transportation routes and you will increase unemployment in the class segments that can least afford it, people who have no other viable, affordable way to get to work. You create a cascade of disconnection. You harm the economy double: not only do you not create jobs, you destroy ones that exist. The stimulus package would be more efficient by far if it saved jobs that already existed than tried to create new ones. But that's not how the thing seems to be designed with respect to mass transit. 

The result? We will end up delivering new buses and train cars in three or four years time to transportation systems that have eliminated the routes on which those buses and train cars are supposed to go, and have mothballed all the vehicles they used to run. And later on, the people who are in charge now will say, Oh, well, we didn't realize. Horsefeathers. If I can see that now, and you can see that now, so can they.

Also amusing (yes, you have to have a graveyard sense of humor these days) is another New York Times item -- Maureen Dowd's columns. Maureen Dowd was savagely funny and insightful during the Bill Clinton watch. With George W. Bush, however, she lost her muse entirely. She was in an over-the-top competition where she had no real comparative advantage, for there was so very, very much for liberals to be over the top about. Now, she seems to be back in her element. In a way she's a kind of Benjamin Button columnist, a backwards critic who excels at skewering her own kind better than her ideological opposites. 

As always, there is plenty more to say, but I lack the octane right now to say it. So a brief blog today; forgive me, those who may be listening in. 

I have now collected nearly a half dozen comments saying, in effect, that President Obama has called off the "war on terror." I'm sure I could have collected many, many more such statements if I read more widely. The most noteworthy of these comments was one by Dana Priest, a highly regarded journalist, and Priest was referring, of course, to the fact that with the stroke of a pen during his first week in office the President reversed a whole raft of legal interpretations related to the state of war, notably policy concerning the treatment and status of detainees, made during the Bush Administration. 

This is true, of course, the President did do that. I am not qualified to judge that subject this way or that, not myself being a lawyer. Others are busy doing it--fine. But the concept of a "war" on terrorism is not limited to legal issues. This is a complicated matter, with legal, political-strategic and psychological elements that don't neatly overlap. (You remember, perhaps, from before, one of the definitions of a temperamental conservative? Well, here is an example of that way of thinking in action.) I am at a loss to understand how anyone can say that Obama has called off the war on terror in the face of what he has said and done in that regard. 

Let me remind you, if I may, that in his Inaugural address the President said the following: "Our nation is at war against a fair-reaching network of violence and hatred." How does his use of the word "war" square with a judgment that he has called off the war?! Does anyone suppose that he and his speechwriter just made a brain fart? (No, folks, at that level brain farts don't make it through into the final draft.) How does the idea that Obama has called off the war square with his authorization of deadly (and apparently effective) drone strikes into Pakistan, for example?

Maybe he should not have said "war" in his Inaugural, however. Here is why.

Calling the terrorism problem a war from the start, after 9/11/2001, was, in my view, justified and sensible, and not only or even mainly because of the legal flexibility it gave the President as Commander-in-Chief. It had to do with an appreciation for how the Clinton Administration's legalist approach backfired crucially. As some of you may know, the U.S. government has a chance to intercept Osama bin-Laden's plane en route from Khartoum to Kabul in 1996, and declined to go after him for fear that we would be unable to convict him in a court without revealing classified information. We all know what that kind of thinking led to, and Bush Administration principals were determined not to repeat that generic error. 

That does not justify the stupidity of stepping in the classic terrorist trap--of getting the target of terrorism to be untrue to his own principles. And we have certainly stepped in it, having mis- and overreacted badly to the threat. I, for one, don't think the Patriot Act went too far, but honest people can disagree about that. (Most liberals, however, don't share that assessment: They think anyone who disagrees with them is evil, although in most other non-political contexts--religious ones, for example--they will deny the existence of evil. But never mind......) I do think that a lot of the other things we've done have gone too far and have harmed us strategically. (I have written about this: "Comte's Caveat: How We Misunderstand Terrorism", Orbis (Summer 2008). 

Anyway, back to the point: While it made sense to use the "war" concept after 9/11/2001, to mobilize the consciousness of the American people and to shatter the legalist mindset of the past, it pretty soon became problematic, for several reasons. 

It became problematic because Vice-President Cheney and his aide, David Addington, used the legal implications of "war" to lard on their minority view of what Executive power entailed. That is largely what the President reversed--he de-larded the law as understood, interpreted and hence practiced. 

It was also problematic because it didn't align with what most of our closest allies thought was going on, and so over time hindered coooperation. 

It is also problematic because it debases the meaning of war. Very few Americans outside of the armed services have had to sacrifice anything in this "war." It hasn't felt like wartime to most of us, even with the protracted campaigns in Afghanistan and Iraq, and to its eternal shame, the Bush Administration never asked the American people to sacrifice for the common good. President Bush told us to go shopping. There probably will be a real war somewhere in America's future, sad to say. When it happens, the silliness of having called the 2002-09 period "wartime" will come vividly clear.

It was problematic, too, because of the amorphous and open-ended nature of the struggle against jihadi violence. The Alien and Sedition Act, what Lincoln did with civil liberties during the Civil War, what Wilson did with them during World War I, what FDR did with the Japanese internment during World War II, were ugly, but they were temporary because the problems that gave rise to them had a clear-cut end. This "war" isn't likely ever to have that kind of end, so the legal and psychological problems that are not severe from the outset might grow more severe over time.  

In short, I think it's too soon to say that Obama has called off anything. So far he has thought and acted on this issue like the lawyer he is.  We will see if he comes to understand the complexities of the matter well enough to think and act like a statesman. Time will tell.

.

So, Tom Daschle has withdrawn, as has Nancy Killefer, both for reason having to do largely with tax evasion issues and other legally questionable practices. Timothy Geithner made it under the wire, though most people admitted that in normal times he might not have made it. Gov. Richardson never even made it to the inauguration. They're falling like flies. 

What does this prove, if anything? It proves that our tax code is absurdly complex, hard to understand, tempting to evade and in dire need of radical simplification. I have never been particularly fond of Mr. Daschle, but the whole idea that he could owe more than $250,000 just for the use of a car service seems absurd on the face of it. As for Nancy Killefer, I sympathize with anyone who has to deal with DC government bureaucrats over anything, let alone taxes.

The bigger picture, however, is even more frustrating. I believe President Obama has been sincere all along in wanting to attack the transactional K-Street politics that has destroyed good government in this country. But I think he has been terribly naive in supposing that just changing the ethics laws and banning lobbyists from an administration could really solve the problem. 

Had he understood better what the real situation was, and here a new book by Robert G. Kaiser of the Washington Post, So Damned Much Money, might be illuminating, he would have known that a stimulus package could not avoid getting tangled up in the web of lobbyists who pollute this city. The talk here in town has been about whether a stimulus package could simultaneously be used to jump-start some needed reform. Rahm Emanuel has supposedly captured this advance spirit by commenting on how it's a sin to let a crisis go unused. That's the wrong question. The issue is not whether a bill can stimulate job-creation and jump-start reform simultaneously, but whether it can stimulate job-creation and strangle the transactional morass simultaneously. Apparently, it can't. Apparently, some of the would-be stranglers need to be strangled themselves.

As for jump-starting real reform, whether in education, energy policy, health policy and so forth, what really stands forth from what we've seen in the past few weeks is that the Democratic members of our political class have no new ideas. And that includes the President, as I've said before. Almost nothing in the stimulus package that is supposed to be reform-engendering is new, and way too much of it may be fairly described as rancid old pork. What have these people been doing for eight years in opposition, anyway, that when their chance to make a difference in the midst of a crisis lands right in their lap, they can't think their way out of a Seven-Eleven?

It's not because there aren't ideas out there either. Liberal think-tanks and magazines have had and have propagated some good ideas over recent years, and some centrist and conservative groups have done so, too. The American Interest, for example, has promoted the idea of a Baby Bond-Service culture, along with CityYear and others. Now that's an idea that would really make a difference, sort of like a second GI Bill but wider and bigger. There are lots of ideas out there, some of them well developed and promising--why doesn't President Obama or the Democratic leadership in the Congress seem to know about them? Don't they read? This I find a lot more disturbing, and depressing, than what has happened to Mr. Daschle, Ms. Killefer and may happen to still others.  

I've taken a few days off from this blog, which I know bloggers are not supposed to do. Tough. As I have already said, I don't really like the whole blogging subculture, so I have no intention of being obedient toward it beyond necessity. I was just tired. But now I am not tired, and I have plenty to blither about. I'll limit myself, however, to three semi-random comments.

First, I noticed that one of the answers in Sunday's New York Times crossword puzzle is "Powell", the clue referencing his autobiography. Did I send my old boss an email advising him that now he'd really hit the bigtime? He has a finely honed sense of humor, but I thought better of it. I'll save it. Another, less royal friend once provided the quote for the Times' quote acrostic puzzle, from his book Modern Dictators. This was some several years ago. I told him about it; he, no puzzle doer himself, never otherwise would have found out. He was delighted and appreciative. So one never knows about such things. 

Second, I saw that President Obama, in the early flurry of things he can do by Executive Order alone, reversed several Bush Administration edicts having to do with labor relations. Hurray! This, to remind myself and others, is why I once was a Democrat and never was a Republican. It is unfair to caricature Republicans as the party of big business, who have no interest or compassion for the "little guy", while Democrats are the party of  real, working Americans and are against corporate concentrations of power. In fact there are compassionate conservatives; this is not just some sort of deflectionary slogan. And in fact, if you look at the record, Democrats have been in bed as much or more with the Wall Street muggers than have Republicans. Many if not most of the deeply unfortunate decisions made about the deregulation of financial markets in recent years were made during the Clinton watch, not the Bush watch.

All that said, yeah, it's true: Rank-and-file Republicans are unsympathetic to labor unions, while at least most Democrats are sympathetic. Even my colleague and friend Frank Fukuyama, a Republican who nonetheless pronounced himself pro-Obama, opined recently that we should not overreact to the present economic crisis, and one example of overreacting he gave was that we should not want to return to the union-dominated labor markets of the 1950s and 1960s. 

Well, there isn't much chance of that, but why would that be such a bad thing? There isn't much chance of it because we don't have the kind of industries anymore in plentitude sufficient to support such a shift. Our manufacturing sector in this country is a pathetic shell of its once thunderous self. This is bad, for reasons I'll get to later. And the recent growth of the percentage of the workforce in unions is mainly a result of the growth of public sector unions, teachers unions and, worse, things like AFSCME.  These are to real industrial labor unions what a mere Brussel sprout is to a full-grown cabbage. 

Now, it's true that Labor unions -- AFL-CIO and International Brotherhood of Teamsters -- did abuse their power and their rank-and-file in some respects some decades back. It's also true that high labor costs put many American manufacturers at a competitive disadvantage in a world of liberalizing trade. But what's wrong with the kind of collective bargaining that insures that skilled workers get paid a living wage? Do Republicans think that only unions skew the market, that without unions there would be a completely fair labor market -- that large concentrations of corporate power are not capable of unfair practices, of tipping the playing field in their direction by, not least, suborning Congress and shaping, say, tax laws, in their own favor? Wake up, wake up, little GOP-children.

We have a law about all this stuff, of course: The National Labor Relations Act. It's a good law, too. But like all complex laws that beg regulators and interpretations, there are ways to bend it this way and ways to bend it that way. The Bush Administration bent it in ways that hurt labor; all these little subversions at the margins, which I will not stop to describe here, have been undone with the President's pen.  Good for him.  

Now third: What really got me toward the end of last week was John E. Potter, the postmaster general, who went on Wednesday before a Senate committee and broached the idea of ending Tuesday mail delivery to bail out the ailing USPS -- that's United States Postal System, for those not in the postal "know."

Mr. Potter noted before the Congress that new technology has depressed first-class mail volume, which is true; there is no doubt that the post office faces a long-term structural problem. But that isn’t its only problem, which is proved by the fact that USPS inefficiency long predated the technology/structure issue. After all, increases in first-class rates have significantly and consistently outpaced the rate of inflation for more than 40 years.

As I understand it, the real sources are threefold and internally related:

(1) An obscenely complex rate structure that gets worse every year. Gratuitous complexity is very expensive. It takes tens of thousands of over-paid middle managers working in acres of needless office space to manage this completely pointless baroque rate structure.

(2) The postal union, which strikes me most days as institutionalized featherbedding that does not really benefit the heroes of the postal service, the clerks and especially the carriers, but all those overpaid middle managers mentioned in point 1.

I suspect that the complexity of the rate structure derives in part from an infatuation with technology that violates Occam’s Razor in spades, and which, combined with the union problem, explains why the USPS is the only large organization I can think of that adds labor-saving technology without ever saving any labor costs! 

(3) Congress’ success over the years in turning the USPS into a business subsidy. All that advertising crap in our mailboxes six days a week is tax deductible for business. You didn't know that, did you? The USPS claim that it makes money off 3rd-class mail would turn out to be inaccurate, I suspect, if one counted all system costs over time, including the middle-manager, rate-complexity-induced bloat I’ve already noted, since most of the rate complexity is business/advertising related.

If it were up to me (obviously, it isn’t) I would simplify the rate structure dramatically, getting rid of as many of the transactional costs it takes to apply it as possible. We need first class, parcel post, media mail and a special rate for advertising, but within those simple categories there should be no subdivisions for zip-plus four or machinable packages or bulk-mail. The rates should be set in a way to raise the necessary revenue while simplifying the whole affair, it being understood that simplification in the end will trump all the glass-bead-game like "incentives" cooked up to try to get USPS patrons to accommodate its absurdly complex machinery. 

I would also get rid of ounce-by-ounce distinctions under a pound within the rate structures, since it has been many, many decades since the fine weight of a package was the main factor in determining how much it costs to deliver (how many hands and machines have to move it now matters a whole lot more): 1 ounce and under; 2-6 oz.; 7-12 oz.; and 12-16 oz should do it. 

I would also significantly increase costs to advertisers and significantly decrease costs for both individual/individual and business/individual exchanges. We should be making it easier to buy and exchange goods and services via the USPS—that’s good for the economy—and using advertising revenue to subsidize that: not the other way around! I think most manufacturers would love a deal that decreases their shipping costs more than it raises their advertising budget. That would be good for everyone, except of course the special interests that make their livings dumping printed garbage into our homes and offices. Well, screw `em; let them learn to do something useful for a change.

Seems to me there is still a role for the postal service as an inherently governmental function that, in my view, should allow competition but not be completely privatized. It may have a smaller role on account of technology, but it still has a role. For Mr. Potter to propose eliminating Tuesday service, without even hinting at what’s really wrong, is a depressing sight to see (or to read about the next day).

I realize that efforts have been afoot for a long while now to deal with the real problems. I know that the Postal Regulatory Commission was created in 1996, and I know about Vision 2013 from this past October, a study designed to look out to the future and get ahead of the USPS' problems. But I frankly don’t think that these efforts so far have been bold enough to save the system from its problems—the structural ones combined with the self-inflicted ones.

Well, by now you're saying "Who cares? Who gives a shit or a giggle about the post office?" (Well, maybe you didn't say it quite that way, fair enough.) Yes, fair enough, but it's interesting all the same at least as a minor example of a major problem: Bureaucratic aging, the encrustation of layers of memo-and-meeting nonsense in governmental functions that prove the old adage of committee life that "where there's a will, there's a won't." Good heavens, folks: If we can't even tell ourselves the truth about something as insignificant as the post office, let alone figure out how to fix it, how on earth are we going to fix Social Security and Medicaid, the Homeland Security Department, the intelligence community, Defense Department acquisition and personnel policy, our bizarre food safety system, our health care mess, our failing schools (I could go on)?

I won't however.  Next time something, maybe, about Davos, about free trade, about whether this economic crisis is really all that bad...... is economic growth really the "master" social good?  Rather than assume that, as most do, perhaps we ought to think about it for a change.