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These Truths: A History of the United States (Jill Lepore) - 1 views

  • It was meant to mark the start of a new era, in which the course of history might be made predictable and a government established that would be ruled not by accident and force but by reason and choice. The origins of that idea, and its fate, are the story of American history.
  • It seems to have been reserved to the people of this country, by their conduct and example, to decide the important question, whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are forever destined to depend for their political constitutions on accident and force.6 This was the question of that autumn. And, in a way, it has been the question of every season since,
  • I once came across a book called The Constitution Made Easy.7 The Constitution cannot be made easy. It was never meant to be easy.
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  • THE AMERICAN EXPERIMENT rests on three political ideas—“these truths,” Thomas Jefferson called them—political equality, natural rights, and the sovereignty of the people.
  • After Benjamin Franklin read Jefferson’s draft, he picked up his quill, scratched out the words “sacred & undeniable,” and suggested that “these truths” were, instead, “self-evident.” This was more than a quibble. Truths that are sacred and undeniable are God-given and divine, the stuff of religion. Truths that are self-evident are laws of nature, empirical and observable, the stuff of science. This divide has nearly rent the Republic apart.
  • The real dispute is between “these truths” and the course of events: Does American history prove these truths, or does it belie them?
  • The United States rests on a dedication to equality, which is chiefly a moral idea, rooted in Christianity, but it rests, too, on a dedication to inquiry, fearless and unflinching. Its founders agreed with the Scottish philosopher and historian David Hume, who wrote, in 1748, that “Records of Wars, Intrigues, Factions, and Revolutions are so many Collections of Experiments.”9 They believed that truth is to be found in ideas about morality but also in the study of history.
  • understanding history as a form of inquiry—not as something easy or comforting but as something demanding and exhausting—was central to the nation’s founding. This, too, was new.
  • A new kind of historical writing, less memorial and more unsettling, only first emerged in the fourteenth century. “History is a philosophical science,” the North African Muslim scholar Ibn Khaldun wrote in 1377, in the prologue to his history of the world, in which he defined history as the study “of the causes and origins of existing things.”11
  • Only by fits and starts did history become not merely a form of memory but also a form of investigation, to be disputed, like philosophy, its premises questioned, its evidence examined, its arguments countered.
  • Declaring independence was itself an argument about the relationship between the present and the past, an argument that required evidence of a very particular kind: historical evidence. That’s why most of the Declaration of Independence is a list of historical claims. “To prove this,” Jefferson wrote, “let facts be submitted to a candid world.”
  • In an attempt to solve this problem, the earliest historians of the United States decided to begin their accounts with Columbus’s voyage, stitching 1776 to 1492. George Bancroft published his History of the United States from the Discovery of the American Continent to the Present in 1834, when the nation was barely more than a half-century old, a fledgling, just hatched. By beginning with Columbus, Bancroft made the United States nearly three centuries older than it was, a many-feathered old bird.
  • In 1787, then, when Alexander Hamilton asked “whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are forever destined to depend for their political constitutions on accident and force,” that was the kind of question a scientist asks before beginning an experiment. Time alone would tell. But time has passed. The beginning has come to an end. What, then, is the verdict of history?
  • In deciding what to leave in and what to leave out, I’ve confined myself to what, in my view, a people constituted as a nation in the early twenty-first century need to know about their own past, mainly because this book is meant to double as an old-fashioned civics book, an explanation of the origins and ends of democratic institutions, from the town meeting to the party system, from the nominating convention to the secret ballot, from talk radio to Internet polls. This book is chiefly a political
  • Aside from being a brief history of the United States and a civics primer, this book aims to be something else, too: it’s an explanation of the nature of the past. History isn’t only a subject; it’s also a method.
  • The truths on which the nation was founded are not mysteries, articles of faith, never to be questioned, as if the founding were an act of God, but neither are they lies, all facts fictions, as if nothing can be known, in a world without truth.
  • Between reverence and worship, on the one side, and irreverence and contempt, on the other, lies an uneasy path, away from false pieties and petty triumphs over people who lived and died and committed both their acts of courage and their sins and errors long before we committed ours. “We cannot hallow this ground,” Lincoln said at Gettysburg. We are obliged, instead, to walk this ground, dedicating ourselves to both the living and the dead.
  • studying history is like that, looking into one face and seeing, behind it, another, face after face after face. “Know whence you came,” Baldwin told his nephew.17 The past is an inheritance, a gift and a burden. It can’t be shirked. You carry it everywhere. There’s nothing for it but to get to know it.
  • Nature takes one toll, malice another. History is the study of what remains, what’s left behind, which can be almost anything, so long as it survives the ravages of time and war: letters, diaries, DNA, gravestones, coins, television broadcasts, paintings, DVDs, viruses, abandoned Facebook pages, the transcripts of congressional hearings, the ruins of buildings. Some of these things are saved by chance or accident, like the one house that, as if by miracle, still stands after a hurricane razes a town. But most of what historians study survives because it was purposely kept—placed
  • As nation-states emerged, they needed to explain themselves, which they did by telling stories about their origins, tying together ribbons of myths, as if everyone in the “English nation,” for instance, had the same ancestors, when, of course, they did not. Very often, histories of nation-states are little more than myths that hide the seams that stitch the nation to the state.15
  • When the United States declared its independence in 1776, plainly, it was a state, but what made it a nation? The fiction that its people shared a common ancestry was absurd on its face; they came from all over, and, having waged a war against England, the very last thing they wanted to celebrate was their Englishness.
  • Facts, knowledge, experience, proof. These words come from the law. Around the seventeenth century, they moved into what was then called “natural history”: astronomy, physics, chemistry, geology. By the eighteenth century they were applied to history and to politics, too. These truths: this was the language of reason, of enlightenment, of inquiry, and of history.
  • Against conquest, slaughter, and slavery came the urgent and abiding question, “By what right?”
  • Yet the origins of the United States date to 1492 for another, more troubling reason: the nation’s founding truths were forged in a crucible of violence, the products of staggering cruelty, conquest and slaughter, the assassination of worlds.
  • Locke, spurred both by a growing commitment to religious toleration and by a desire to distinguish English settlement from Spanish conquest, stressed the lack of cultivation as a better justification for taking the natives’ land than religious difference, an emphasis with lasting consequences.
  • Unlike Polo and Mandeville, Columbus did not make a catalogue of the ways and beliefs of the people he met (only later did he hire Pané to do that). Instead, he decided that the people he met had no ways and beliefs. Every difference he saw as an absence.22 Insisting that they had no faith and no civil government and were therefore infidels and savages who could not rightfully own anything, he claimed possession of their land, by the act of writing. They were a people without truth; he would make his truth theirs. He would tell them where the dead go.
  • It became commonplace, inevitable, even, first among the Spanish, and then, in turn, among the French, the Dutch, and the English, to see their own prosperity and good health and the terrible sicknesses suffered by the natives as signs from God. “Touching these savages, there is a thing that I cannot omit to remark to you,” one French settler wrote: “it appears visibly that God wishes that they yield their place to new peoples.” Death convinced them at once of their right and of the truth of their faith. “The natives, they are all dead of small Poxe,” John Winthrop wrote when he arrived in New England in 1630: “the Lord hathe cleared our title to what we possess.”
  • In much of New Spain, the mixed-race children of Spanish men and Indian women, known as mestizos, outnumbered Indians; an intricate caste system marked gradations of skin color, mixtures of Europeans, Native Americans, and Africans, as if skin color were like dyes made of plants, the yellow of sassafras, the red of beets, the black of carob. Later, the English would recognize only black and white, a fantasy of stark and impossible difference, of nights without twilight and days without dawns. And yet both regimes of race, a culture of mixing or a culture of pretending not to mix, pressed upon the brows of every person of the least curiosity the question of common humanity: Are all peoples one?
  • Elizabeth’s best defender argued that if God decided “the female should rule and govern,” it didn’t matter that women were “weake in nature, feable in bodie, softe in courage,” because God would make every right ruler strong. In any case, England’s constitution abided by a “rule mixte,” in which the authority of the monarch was checked by the power of Parliament; also, “it is not she that ruleth but the lawes.” Elizabeth herself called on yet another authority: the favor of the people.48 A mixed constitution, the rule of law, the will of the people: these were English ideas that Americans would one day make their own, crying, “Liberty!”
  • In the brutal, bloody century between Columbus’s voyage and John White’s, an idea was born, out of fantasy, out of violence, the idea that there exists in the world a people who live in an actual Garden of Eden, a state of nature, before the giving of laws, before the forming of government. This imagined history of America became an English book of genesis, their new truth. “In the beginning,” the Englishman John Locke would write, “all the world was America.” In America, everything became a beginning.
  • England’s empire would have a different character than that of either Spain or France. Catholics could make converts by the act of baptism, but Protestants were supposed to teach converts to read the Bible; that meant permanent settlements, families, communities, schools, and churches. Also, England’s empire would be maritime—its navy was its greatest strength. It would be commercial. And, of greatest significance for the course of the nation that would grow out of those settlements, its colonists would be free men, not vassals, guaranteed their “English liberties.”
  • Beginning with the Virginia charter, the idea of English liberties for English subjects was planted on American soil and, with it, the king’s claim to dominion, a claim that rested on the idea that people like Powhatan and his people lived in darkness and without government, no matter that the English called their leaders kings.
  • Twenty Englishmen were elected to the House of Burgesses. Twenty Africans were condemned to the house of bondage. Another chapter opened in the American book of genesis: liberty and slavery became the American Abel and Cain.
  • To build his case against the king, Coke dusted off a copy of an ancient and almost entirely forgotten legal document, known as Magna Carta (literally, the “great charter”), in which, in the year 1215, King John had pledged to his barons that he would obey the “law of the land.” Magna Carta wasn’t nearly as important as Coke made it out to be, but by arguing for its importance, he made it important, not only for English history, but for American history, too, tying the political fate of everyone in England’s colonies to the strange doings of a very bad king from the Middle Ages.
  • Magna Carta explains a great deal about how it is that some English colonists would one day come to believe that their king had no right to rule them and why their descendants would come to believe that the United States needed a written constitution. But Magna Carta played one further pivotal role, the role it played in the history of truth—a history that had taken a different course in England than in any other part of Europe.
  • The most crucial right established under Magna Carta was the right to a trial by jury.
  • in 1215, the pope banned trial by ordeal. In Europe, it was replaced by a new system of divine judgment: judicial torture. But in England, where there existed a tradition of convening juries to judge civil disputes—like disagreements over boundaries between neighboring freeholds—trial by ordeal was replaced not by judicial torture but by trial by jury.
  • This turn marked the beginning of a new era in the history of knowledge: it required a new doctrine of evidence and new method of inquiry and eventually led to the idea that an observed or witnessed act or thing—the substance, the matter, of fact—is the basis of truth. A judge decided the law; a jury decided the facts. Mysteries were matters of faith, a different kind of truth, known only to God.
  • The age of mystery began to wane, and, soon, the culture of fact spread from law to government.
  • There would never be very many Africans in New England, but New Englanders would have slave plantations, on the distant shores. Nearly half of colonial New Englanders’ wealth would come from sugar grown by West Indian slaves.
  • One million Europeans migrated to British America between 1600 and 1800 and two and a half million Africans were carried there by force over that same stretch of centuries, on ships that sailed past one another by day and by night.42 Africans died faster, but as a population of migrants, they outnumbered Europeans two and a half to one.
  • In the last twenty-five years of the seventeenth century, English ships, piloted by English sea captains, crewed by English sailors, carried more than a quarter of a million men, women, and children across the ocean, shackled in ships’ holds.44 Theirs was not a ship of state crossing a sea of troubles, another Mayflower, their bond a covenant. Theirs was a ship of slavery, their bonds forged in fire. They whispered and wept; they screamed and sat in silence. They grew ill; they grieved; they died; they endured.
  • By what right did the English hold these people as their slaves?
  • Under Roman law, all men are born free and can only be made slaves by the law of nations, under certain narrow conditions—for instance, when they’re taken as prisoners of war, or when they sell themselves as payment of debt. Aristotle had disagreed with Roman law, insisting that some men are born slaves. Neither of these traditions from antiquity proved to be of much use to English colonists attempting to codify their right to own slaves, because laws governing slavery, like slavery itself, had disappeared from English common law by the fourteenth century. Said one Englishman in Barbados in 1661, there was “no track to guide us where to walk nor any rule sett us how to govern such Slaves.”46
  • With no track or rule to guide them, colonial assemblies adopted new practices and devised new laws with which they attempted to establish a divide between “blacks” and “whites.”
  • Adopting these practices and passing these laws required turning English law upside down, because much in existing English law undermined the claims of owners of people. In 1655, a Virginia woman with an African mother and an English father sued for her freedom by citing English common law, under which children’s status follows that of their father, not their mother. In 1662, Virginia’s House of Burgesses answered doubts about “whether children got by any Englishman upon a Negro woman should be slave or ffree” by reaching back to an archaic Roman rule, partus sequitur ventrem (you are what your mother was). Thereafter, any child born of a woman who was a slave inherited her condition.
  • By giving Americans a more ancient past, he hoped to make America’s founding appear inevitable and its growth inexorable, God-ordained. He also wanted to celebrate the United States, not as an offshoot of England, but instead as a pluralist and cosmopolitan nation, with ancestors all over the world.
  • No book should be censored before publication, Milton argued (though it might be condemned after printing), because truth could only be established if allowed to do battle with lies. “Let her and falsehood grapple,” he urged, since, “whoever knew Truth to be put to the worst in a free and open encounter?” This view depended on an understanding of the capacity of the people to reason. The people, Milton insisted, are not “slow and dull, but of a quick, ingenious and piercing spirit, acute to invent, subtle and sinewy to discourse, not beneath the reach of any point the highest that human capacity can soar to.”52
  • All men, Locke argued, are born equal, with a natural right to life, liberty, and property; to protect those rights, they erect governments by consent. Slavery, for Locke, was no part either of a state of nature or of civil society. Slavery was a matter of the law of nations, “nothing else, but the state of war continued, between a lawful conqueror and a captive.” To introduce slavery in the Carolinas, then, was to establish, as fundamental to the political order, an institution at variance with everything about how Locke understood civil society.
  • Long before shots were fired at Lexington and Concord, long before George Washington crossed the Delaware, long before American independence was thought of, or even thinkable, a revolutionary tradition was forged, not by the English in America, but by Indians waging wars and slaves waging rebellions. They revolted again and again and again. Their revolutions came in waves that lashed the land. They asked the same question, unrelentingly: By what right are we ruled?
  • Rebellion hardened lines between whites and blacks. Before Bacon and his men burned Jamestown, poor Englishmen had very little political power. As many as three out of every four Englishmen and women who sailed to the colonies were either debtors or convicts or indentured servants; they weren’t slaves, but neither were they free.61 Property requirements for voting meant that not all free white men could vote. Meanwhile, the fact that slaves could be manumitted by their masters meant that it was possible to be both black and free and white and unfree. But after Bacon’s Rebellion, free white men were granted the right to vote, and it became nearly impossible for black men and women to secure their freedom. By 1680, one observer could remark that “these two words, Negro and Slave” had “grown Homogeneous and convertible”: to be black was to be a slave.
  • Benjamin Franklin eventually settled in the tidy Quaker town of Philadelphia and began printing his own newspaper, the Pennsylvania Gazette, in 1729. In its pages, he fought for freedom of the press. In a Miltonian 1731 “Apology for Printers,” he observed “that the Opinions of Men are almost as various as their Faces” but that “Printers are educated in the Belief, that when Men differ in Opinion, both Sides ought equally to have the Advantage of being heard by the Publick; and that when Truth and Error have fair Play, the former is always an overmatch for the latter.”
  • But if the culture of the fact hadn’t yet spread to newspapers, it had spread to history. In Leviathan, Thomas Hobbes had written that “The register of Knowledge of Fact is called History.”74 One lesson Americans would learn from the facts of their own history had to do with the limits of the freedom of the press, and this was a fact on which they dwelled, and a liberty they grew determined to protect.
  • Slavery does not exist outside of politics. Slavery is a form of politics, and slave rebellion a form of violent political dissent. The Zenger trial and the New York slave conspiracy were much more than a dispute over freedom of the press and a foiled slave rebellion: they were part of a debate about the nature of political opposition, and together they established its limits. Both Cosby’s opponents and Caesar’s followers allegedly plotted to depose the governor. One kind of rebellion was celebrated, the other suppressed—a division that would endure.
  • In American history, the relationship between liberty and slavery is at once deep and dark: the threat of black rebellion gave a license to white political opposition.
  • This, too, represented a kind of revolution: Whitefield emphasized the divinity of ordinary people, at the expense of the authority of their ministers.
  • he wrote in 1751 an essay about the size of the population, called “Observations concerning the Increase of Mankind, Peopling of Countries, &c.”
  • Franklin guessed the population of the mainland colonies to be about “One Million English Souls,” and his calculations suggested that this number would double every twenty-five years. At that rate, in only a century, “the greatest Number of Englishmen will be on this Side the Water.” Franklin’s numbers were off; his estimates weren’t too high; they were too low. At the time, more than 1.5 million people lived in Britain’s thirteen mainland colonies. Those colonies were far more densely settled than New France or New Spain. Only 60,000 French settlers lived in Canada and 10,000 more in Louisiana. New Spain was even more thinly settled.
  • he wrote about a new race, a people who were “white.” “The Number of purely white People in the World is proportionably very small,” Franklin began. As he saw it, Africans were “black”; Asians and Native Americans were “tawny”; Spaniards, Italians, French, Russians, Swedes, and Germans were “swarthy.” That left very few people, and chiefly the English, as the only “white people” in the world. “I could wish their Numbers were increased,” Franklin said, adding, wonderingly, “But perhaps I am partial to the Complexion of my Country, for such Kind of Partiality is natural to Mankind.”
  • Franklin’s “JOIN, or DIE” did some of that, too: it offered a lesson about the rulers and the ruled, and the nature of political communities. It made a claim about the colonies: they were parts of a whole.
  • When Benjamin Franklin began writing his autobiography, in 1771, he turned the story of his own escape—running away from his apprenticeship to his brother James—into a metaphor for the colonies’ growing resentment of parliamentary rule. James’s “harsh and tyrannical Treatment,” Franklin wrote, had served as “a means of impressing me with that Aversion to arbitrary Power that has stuck to me thro’ my whole Life.”7 But that was also the story of every runaway slave ad, testament after testament to an aversion to arbitrary power.
  • The American Revolution did not begin in 1775 and it didn’t end when the war was over. “The success of Mr. Lay, in sowing the seeds of . . . a revolution in morals, commerce, and government, in the new and in the old world, should teach the benefactors of mankind not to despair, if they do not see the fruits of their benevolent propositions, or undertakings, during their lives,” Philadelphia doctor Benjamin Rush later wrote.
  • There were not one but two American revolutions at the end of the eighteenth century: the struggle for independence from Britain, and the struggle to end slavery. Only one was won.
  • The Revolution was at its most radical in the challenge it presented to the institution of slavery and at its most conservative in its failure to meet that challenge. Still, the institution had begun to break, like a pane of glass streaked with cracks but not yet shattered.
  • “I wish our Poor Distracted State would atend to the many good Lessons” of history, Jane Franklin wrote to her brother, and not “keep always in a Flame.”21
  • After Annapolis, Madison went home to Virginia and resumed his course of study. In April of 1787, he drafted an essay called “Vices of the Political System of the United States.” It took the form of a list of eleven deficiencies,
  • it closed with a list of causes for these vices, which he located primarily “in the people themselves.” By this last he meant the danger that a majority posed to a minority: “In republican Government the majority however composed, ultimately give the law. Whenever therefore an apparent interest or common passion unites a majority what is to restrain them from unjust violations of the rights and interests of the minority, or of individuals?”27 What force restrains good men from doing bad things? Honesty, character, religion—these, history demonstrated, were not to be relied upon. No, the only force that could restrain the tyranny of the people was the force of a well-constructed constitution. It would have to be as finely wrought as an iron gate.
  • At the convention, it proved impossible to set the matter of slavery aside, both because the question of representation turned on it and because any understanding of the nature of tyranny rested on it. When Madison argued about the inevitability of a majority oppressing a minority, he cited ancient history, and told of how the rich oppressed the poor in Greece and Rome. But he cited, too, modern American history. “We have seen the mere distinction of color made in the most enlightened period of time, the ground of the most oppressive dominion ever exercised by man over man.”40
  • If not for the three-fifths rule, the representatives of free states would have outnumbered representatives of slave states by 57 to 33.44
  • Wilson, half Franklin’s age, read his remarks instead. “Mr. President,” he began, addressing Washington, “I confess that there are several parts of this constitution which I do not at present approve, but I am not sure I shall never approve them.” He suggested that he might, one day, change his mind. “For having lived long, I have experienced many instances of being obliged by better information, or fuller consideration, to change opinions even on important subjects, which I once thought right, but found to be otherwise. It is therefore that the older I grow, the more apt I am to doubt my own judgment, and to pay more respect to the judgment of others.” Hoping to pry open the minds of delegates who were closed to the compromise before them, he reminded them of the cost of zealotry. “Most men indeed as well as most sects in Religion, think themselves in possession of all truth, and that wherever others differ from them it is so far error.” But wasn’t humility the best course, in such circumstances? “Thus I consent, Sir, to this Constitution,” he closed, “because I expect no better, and because I am not sure, that it is not the best.”
  • Except for the Massachusetts Constitution, in 1780, and the second New Hampshire Constitution, in 1784, no constitution, no written system of government, had ever before been submitted to the people for their approval. “This is a new event in the history of mankind,” said the governor of Connecticut at his state’s ratification convention.
  • Nearly everything Washington did set a precedent. What would have happened if he had decided, before taking that oath of office, to emancipate his slaves? He’d grown disillusioned with slavery; his own slaves, and the greater number of slaves owned by his wife, were, to him, a moral burden, and he understood very well that for all the wealth generated by forced, unpaid labor, the institution of slavery was a moral burden to the nation. There is some evidence—slight though it is—that Washington drafted a statement announcing that he intended to emancipate his slaves before assuming the presidency. (Or maybe that statement, like Washington’s inaugural address, had been written by Hamilton, a member of New York’s Manumission Society.) This, too, Washington understood, would have established a precedent: every president after him would have had to emancipate his slaves. And yet he would not, could not, do it.65 Few of Washington’s decisions would have such lasting and terrible consequences as this one failure to act.
  • In the century and a half between the Connecticut charter and the 1787 meeting of the constitutional convention lies an entire revolution—not just a political revolution but also a religious revolution. So far from establishing a religion, the Constitution doesn’t even mention “God,” except in naming the date (“the year of our Lord . . .”). At a time when all but two states required religious tests for office, the Constitution prohibited them. At a time when all but three states still had an official religion, the Bill of Rights forbade the federal government from establishing one. Most Americans believed, with Madison, that religion can only thrive if it is no part of government, and that a free government can only thrive if it is no part of religion.
  • The replacement of debtors’ prison with bankruptcy protection would change the nature of the American economy, spurring investment, speculation, and the taking of risks.
  • as early as 1791, Madison had begun to revise his thinking. In an essay called “Public Opinion,” he considered a source of instability particular to a large republic: the people might be deceived. “The larger a country, the less easy for its real opinion to be ascertained,” he explained. That is, factions might not, in the end, consist of wise, knowledgeable, and reasonable men. They might consist of passionate, ignorant, and irrational men, who had been led to hold “counterfeit” opinions by persuasive men. (Madison was thinking of Hamilton and his ability to gain public support for his financial plan.)
  • The way out of this political maze was the newspaper. “A circulation of newspapers through the entire body of the people,” he explained, “is equivalent to a contraction of territorial limits.” Newspapers would make the country, effectively, smaller.90 It was an ingenious idea. It would be revisited by each passing generation of exasperated advocates of republicanism. The newspaper would hold the Republic together; the telegraph would hold the Republic together; the radio would hold the Republic together; the Internet would hold the Republic together. Each time, this assertion would be both right and terribly wrong.
  • Newspapers in the early republic weren’t incidentally or inadvertently partisan; they were entirely and enthusiastically partisan. They weren’t especially interested in establishing facts; they were interested in staging a battle of opinions. “Professions of impartiality I shall make none,” wrote a Federalist printer. “They are always useless, and are besides perfect nonsense.”92
  • Washington’s Farewell Address consists of a series of warnings about the danger of disunion. The North and the South, the East and the West, ought not to consider their interests separate or competing, Washington urged: “your union ought to be considered as a main prop of your liberty.” Parties, he warned, were the “worst enemy” of every government, agitating “the community with ill-founded jealousies and false alarms,” kindling “the animosity of one part against another,” and even fomenting “riot and insurrection.”
  • As to the size of the Republic, “Is there a doubt whether a common government can embrace so large a sphere? Let experience solve it.” The American experiment must go on. But it could only thrive if the citizens were supported by religion and morality, and if they were well educated. “Promote, then, as an object of primary importance, institutions for the general diffusion of knowledge,” he urged. “In proportion as the structure of a government gives force to public opinion, it is essential that public opinion should be enlightened.”95
  • “Passion” or variants of the word appear seven times in the Farewell; it is the source of every problem; reason is its only remedy. Passion is a river. There would be no changing its course.
  • Adams and Jefferson lived in an age of quantification. It began with the measurement of time. Time used to be a wheel that turned, and turned again; during the scientific revolution, time became a line. Time, the easiest quantity to measure, became the engine of every empirical inquiry: an axis, an arrow. This new use and understanding of time contributed to the idea of progress—if time is a line instead of a circle, things can get better and even better, instead of forever rising and falling in endless cycles, like the seasons. The idea of progress animated American independence and animated, too, the advance of capitalism.
  • The quantification of time led to the quantification of everything else: the counting of people, the measurement of their labor, and the calculation of profit as a function of time. Keeping time and accumulating wealth earned a certain equivalency. “Time is money,” Benjamin Franklin used to say.
  • The two-party system turned out to be essential to the strength of the Republic. A stable party system organizes dissent. It turns discontent into a public good. And it insures the peaceful transfer of power, in which the losing party willingly, and without hesitation, surrenders its power to the winning party.
  • Behind Madison’s remarks about “lessening the proportion of slaves to the free people,” behind Jefferson’s tortured calculations about how many generations would have to pass before his own children could pass for “white,” lay this hard truth: none of these men could imagine living with descendants of Africans as political equals.
  • If the battle between John Adams and Thomas Jefferson had determined whether aristocracy or republicanism would prevail (and, with Jefferson, republicanism won), the battle between Andrew Jackson and John Quincy Adams would determine whether republicanism or democracy would prevail (and, with Jackson, democracy would, eventually, win). Jackson’s rise to power marked the birth of American populism. The argument of populism is that the best government is that most closely directed by a popular majority.
  • He was provincial, and poorly educated. (Later, when Harvard gave Jackson an honorary doctorate, John Quincy Adams refused to attend the ceremony, calling him “a barbarian who could not write a sentence of grammar and hardly could spell his own name.”)68 He had a well-earned reputation for being ferocious, ill-humored, and murderous, on the battlefield and off. When he ran for president, he had served less than a year in the Senate. Of his bid for the White House Jefferson declared, “He is one of the most unfit men I know of for such a place.”69 Jackson made a devilishly shrewd decision. He would make his lack of certain qualities—judiciousness, education, political experience—into strengths.
  • Eaton, who ran Jackson’s campaign, shrewdly revised his Life of Andrew Jackson, deleting or dismissing everything in Jackson’s past that looked bad and lavishing attention on anything that looked good and turning into strengths what earlier had been considered weaknesses: Eaton’s Jackson wasn’t uneducated; he was self-taught. He wasn’t ill-bred; he was “self-made.”
  • Watching the rise of American democracy, an aging political elite despaired, and feared that the Republic could not survive the rule of the people. Wrote John Randolph of Virginia, “The country is ruined past redemption.”
  • “The first principle of our system,” Jackson said, “is that the majority is to govern.” He bowed to the people. Then, all at once, the people nearly crushed him with their affection.
  • The democratization of American politics was hastened by revivalists like Stewart who believed in the salvation of the individual through good works and in the equality of all people in the eyes of God. Against that belief stood the stark and brutal realities of an industrializing age, the grinding of souls.
  • The great debates of the middle decades of the nineteenth century had to do with the soul and the machine. One debate merged religion and politics. What were the political consequences of the idea of the equality of souls? Could the soul of America be redeemed from the nation’s original sin, the Constitution’s sanctioning of slavery?
  • Another debate merged politics and technology. Could the nation’s new democratic traditions survive in the age of the factory, the railroad, and the telegraph? If all events in time can be explained by earlier events in time, if history is a line, and not a circle, then the course of events—change over time—is governed by a set of laws, like the laws of physics, and driven by a force, like gravity. What is that force? Is change driven by God, by people, or by machines? Is progress the progress of Pilgrim’s Progress, John Bunyan’s 1678 allegory—the journey of a Christian from sin to salvation? Is progress the extension of suffrage, the spread of democracy? Or is progress invention, the invention of new machines?
  • A distinctively American idea of progress involved geography as destiny, picturing improvement as change not only over time but also over space.
  • If the sincerity of converts was often dubious, another kind of faith was taking deeper root in the 1820s, an evangelical faith in technological progress, an unquestioning conviction that each new machine was making the world better. That faith had a special place in the United States, as if machines had a distinctive destiny on the American continent. In prints and paintings, “Progress” appeared as a steam-powered locomotive, chugging across the continent, unstoppable. Writers celebrated inventors as “Men of Progress” and “Conquerors of Nature” and lauded their machines as far worthier than poetry. The triumph of the sciences over the arts meant the defeat of the ancients by the moderns. The genius of Eli Whitney, hero of modernity, was said to rival that of Shakespeare; the head of the U.S. Patent Office declared the steamboat “a mightier epic” than the Iliad.18
  • To Jackson’s supporters, his election marked not degeneration but a new stage in the history of progress. Nowhere was this argument made more forcefully, or more influentially, than in George Bancroft’s History of the United States from the Discovery of the American Continent to the Present. The book itself, reviewers noted, voted for Jackson. The spread of evangelical Christianity, the invention of new machines, and the rise of American democracy convinced Bancroft that “humanism is steady advancing,” and that “the advance of liberty and justice is certain.” That advance, men like Bancroft and Jackson believed, required Americans to march across the continent, to carry these improvements from east to west, the way Jefferson had pictured it. Democracy, John O’Sullivan, a New York lawyer and Democratic editor, argued in 1839, is nothing more or less than “Christianity in its earthly aspect.” O’Sullivan would later coin the term “manifest destiny” to describe this set of beliefs, the idea that the people of the United States were fated “to over spread and to possess the whole of the continent which Providence has given for the development of the great experiment of liberty.”23
  • To evangelical Democrats, Democracy, Christianity, and technology were levers of the same machine. And yet, all along, there were critics and dissenters and objectors who saw, in the soul of the people, in the march of progress, in the unending chain of machines, in the seeming forward movement of history, little but violence and backwardness and a great crushing of men, women, and children. “Oh, America, America,” Maria Stewart cried, “foul and indelible is thy stain!”24
  • The self-evident, secular truths of the Declaration of Independence became, to evangelical Americans, the truths of revealed religion. To say that this marked a turn away from the spirit of the nation’s founding is to wildly understate the case. The United States was founded during the most secular era in American history, either before or since. In the late eighteenth century, church membership was low, and anticlerical feeling was high.
  • The United States was not founded as a Christian nation. The Constitution prohibits religious tests for officeholders. The Bill of Rights forbids the federal government from establishing a religion, James Madison having argued that to establish
  • The separation of church and state allowed religion to thrive; that was one of its intentions. Lacking an established state religion, Americans founded new sects, from Shakers to Mormons, and rival Protestant denominations sprung up in town after town. Increasingly, the only unifying, national religion was a civil religion, a belief in the American creed. This faith bound the nation together, and provided extraordinary political stability in an era of astonishing change,
  • Slavery wasn’t an aberration in an industrializing economy; slavery was its engine. Factories had mechanical slaves; plantations had human slaves. The power of machines was measured by horsepower, the power of slaves by hand power. A healthy man counted as “two hands,” a nursing woman as a “half-hand,” a child as a “quarter-hand.”
  • With Walker, the antislavery argument for gradual emancipation, with compensation for slave owners, became untenable. Abolitionists began arguing for immediate emancipation. And southern antislavery societies shut their doors. As late as 1827, the number of antislavery groups in the South had outnumbered those in the North by more than four to one. Southern antislavery activists were usually supporters of colonization, not of emancipation. Walker’s Appeal ended the antislavery movement in the South and radicalized it in the North.
  • The rebellion rippled across the Union. The Virginia legislature debated the possibility of emancipating its slaves, fearing “a Nat Turner might be in every family.” Quakers submitted a petition to the state legislature calling for abolition. The petition was referred to a committee, headed by Thomas Jefferson’s thirty-nine-year-old grandson, Thomas Jefferson Randolph, who proposed a scheme of gradual emancipation. Instead, the legislature passed new laws banning the teaching of slaves to read and write, and prohibiting, too, teaching slaves about the Bible.43 In a nation founded on a written Declaration, made sacred by evangelicals during a religious revival, reading about equality became a crime.
  • One consequence of the rise of Jacksonian democracy and the Second Great Awakening was the participation of women in the reformation of American politics by way of American morals. When suffrage was stripped of all property qualifications, women’s lack of political power became starkly obvious. For women who wished to exercise power, the only source of power seemingly left to them was their role as mothers, which, they suggested, rendered them morally superior to men—more loving, more caring, and more responsive to the cries of the weak.
  • Purporting to act less as citizens than as mothers, cultivating the notion of “republican motherhood,” women formed temperance societies, charitable aid societies, peace societies, vegetarian societies, and abolition societies. The first Female Anti-Slavery Society was founded in Boston in 1833; by 1837, 139 Female Anti-Slavery Societies had been founded across the country,
  • After 1835, she never again spoke in public. As Catherine Beecher argued in 1837, in An Essay on Slavery and Abolitionism, with Reference to the Duty of American Females, “If the female advocate chooses to come upon a stage, and expose her person, dress, and elocution to public criticism, it is right to express disgust.”
  • Jacksonian democracy distributed political power to the many, but industrialization consolidated economic power in the hands of a few. In Boston, the top 1 percent of the population controlled 10 percent of wealth in 1689, 16 percent in 1771, 33 percent in 1833, and 37 percent in 1848, while the lowest 80 percent of the population controlled 39 percent of the wealth in 1689, 29 percent in 1771, 14 percent in 1833, and a mere 4 percent in 1848.
  • In New York, the top 1 percent of the population controlled 40 percent of the wealth in 1828 and 50 percent in 1845; the top 4 percent of the population controlled 63 percent of the wealth in 1828 and 80 percent in 1845.49
  • While two and a half million Europeans had migrated to all of the Americas between 1500 and 1800, the same number—two and a half million—arrived specifically in the United States between 1845 and 1854 alone. As a proportion of the U.S. population, European immigrants grew from 1.6 percent in the 1820s to 11.2 percent in 1860. Writing in 1837, one Michigan reformer called the nation’s rate of immigration “the boldest experiment upon the stability of government ever made in the annals of time.”51 The largest
  • Critics of Jackson—himself the son of Irish immigrants—had blamed his election on the rising population of poor, newly enfranchised Irishmen. “Everything in the shape of an Irishman was drummed to the polls,” one newspaper editor wrote in 1828.52 By 1860, more than one in eight Americans were born in Europe, including 1.6 million Irish and 1.2 million Germans, the majority of whom were Catholic. As the flood of immigrants swelled, the force of nativism gained strength, as did hostility toward Catholics, fueled by the animus of evangelical Protestants.
  • The insularity of both Irish and German communities contributed to a growing movement to establish tax-supported public elementary schools, known as “common schools,” meant to provide a common academic and civic education to all classes of Americans. Like the extension of suffrage to all white men, this element of the American experiment propelled the United States ahead of European nations. Much of the movement’s strength came from the fervor of revivalists. They hoped that these new schools would assimilate a diverse population of native-born and foreign-born citizens by introducing them to the traditions of American culture and government, so that boys, once men, would vote wisely, and girls, once women, would raise virtuous children. “It is our duty to make men moral,” read one popular teachers’ manual, published in 1830. Other advocates hoped that a shared education would diminish partisanship. Whatever the motives of its advocates, the common school movement emerged out of, and nurtured, a strong civic culture.56
  • With free schools, literacy spread, and the number of newspapers rose, a change that was tied to the rise of a new party system. Parties come and go, but a party system—a stable pair of parties—has characterized American politics since the ratification debates. In American history the change from one party system to another has nearly always been associated with a revolution in communications that allows the people to shake loose of the control of parties. In the 1790s, during the rise of the first party system, which pitted Federalists against Republicans, the number of newspapers had swelled. During the shift to the second party system, which, beginning in 1833, pitted Democrats against the newly founded Whig Party, not only did the number of newspapers rise, but their prices plummeted.
  • The newspapers of the first party system, which were also known as “commercial advertisers,” had consisted chiefly of partisan commentary and ads, and generally sold for six cents an issue. The new papers cost only one cent, and were far more widely read. The rise of the so-called penny press also marked the beginning of the triumph of “facts” over “opinion” in American journalism, mainly because the penny press aimed at a different, broader, and less exclusively partisan, audience. The New York Sun appeared in 1833. “It shines for all” was its common-man motto. “The object of this paper is to lay before the public, at a price within the means of everyone, ALL THE NEWS OF THE DAY,” it boasted. It dispensed with subscriptions and instead was circulated at newsstands, where it was sold for cash, to anyone who had a ready penny. Its front page was filled not with advertising but with news. The penny press was a “free press,” as James Gordon Bennett of the New York Herald put it, because it wasn’t beholden to parties. (Bennett, born in Scotland, had immigrated to the United States after reading Benjamin Franklin’s Autobiography.) Since the paper was sold at newsstands, rather than mailed to subscribers, he explained, its editors and writers were “entirely ignorant who are its readers and who are not.” They couldn’t favor their readers’ politics because they didn’t know them. “We shall support no party,” Bennett insisted. “We shall endeavor to record facts.”
  • During the days of the penny press, Tocqueville observed that Americans had a decided preference for weighing the facts of a matter themselves: They mistrust systems; they adhere closely to facts and study facts with their own senses. As they do not easily defer to the mere name of any fellow man, they are never inclined to rest upon any man’s authority; but, on the contrary, they are unremitting in their efforts to find out the weaker points of their neighbor’s doctrine.60
  • For centuries, Europeans had based their claims to lands in the New World on arguments that native peoples had no right to the land they inhabited, no sovereignty over it, because they had no religion, or because they had no government, or because they had no system of writing. The Cherokees, with deliberation and purpose, challenged each of these arguments.
  • Britain, Calhoun argued that if a state were to decide that a law passed by Congress was unconstitutional, the Constitution would have to be amended, and if such an amendment were not ratified—if it didn’t earn the necessary approval of three-quarters of the states—the objecting state would have the right to secede from the Union. The states had been sovereign before the Constitution was ever written, or even thought of, Calhoun argued, and they remained sovereign. Calhoun also therefore argued against majority rule; nullification is fundamentally anti-majoritarian. If states can secede, the majority does not rule.78 The nullification crisis was
  • New York abolished debtors’ prison in 1831, and in 1841, Congress passed a federal law offering bankruptcy protection to everyone. Within two years, 41,000 Americans had filed for bankruptcy. Two years later, the law was repealed, but state laws continued to offer bankruptcy protection and, still more significantly, debtors’ prisons were gone for good. In Britain and all of Europe except Portugal, offenders were still being thrown in debtors’ prison (a plot that animated many a nineteenth-century novel); in the United States, debtors could declare bankruptcy and begin again.
  • A nation of debtors, Americans came to see that most people who fall into debt are victims of the business cycle and not of fate or divine retribution or the wheel of fortune. The nation’s bankruptcy laws, even as they came and went again, made taking risks less risky for everyone, which meant that everyone took more risks.
  • the geographical vastness of the United States meant that the anxiety about the machinery of industrial capitalism took the form not of Marxism, with its argument that “the history of all hitherto existing society is the history of class struggles,” but instead of a romance with nature, and with the land, and with all things rustic. Against the factory, Americans posed not a socialist utopia but the log cabin.
  • Were all these vast designs and rapid strides worth it? Thoreau thought not. He came to this truth: “They are but improved means to an unimproved end.”112
  • Expansion, even more than abolition, pressed upon the public the question of the constitutionality of slavery. How or even whether this crisis would be resolved was difficult to see not only because of the nature of the dispute but also because there existed very little agreement about who might resolve it: Who was to decide whether a federal law was unconstitutional?
  • In the midst of all this clamoring among the thundering white-haired patriarchs of American politics, there emerged the idea that the authority to interpret the Constitution rests with the people themselves. Or, at least, this became a rather fashionable thing to say. “It is, Sir, the people’s Constitution, the people’s government, made for the people, made by the people, and answerable to the people,” Daniel Webster roared from the floor of Congress.14 Every man could read and understand the Constitution, Webster insisted.
  • The Notes, it appeared, could be read as variously as the Constitution itself. As one shrewd observer remarked, “The Constitution threatens to be a subject of infinite sects, like the Bible.” And, as with many sects, those politicians who most strenuously staked their arguments on the Constitution often appeared the least acquainted with it. Remarked New York governor Silas Wright, “No one familiar with the affairs of our government, can have failed to notice how large a proportion of our statesmen appear never to have read the Constitution of the United States with a careful reference to its precise language and exact provisions, but rather, as occasion presents, seem to exercise their ingenuity . . . to stretch both to the line of what they, at the moment, consider expedient.”22
  • A NATION HAS borders but the edges of an empire are frayed.23 While abolitionists damned the annexation of Texas as an extension of the slave power, more critics called it an act of imperialism, inconsistent with a republican form of government. “We have a republic, gentlemen, of vast extent and unequalled natural advantages,” Daniel Webster pointed out. “Instead of aiming to enlarge its boundaries, let us seek, rather, to strengthen its union.”24 Webster lost that argument, and, in the end, it was the American reach for empire that, by sundering the Union, brought about the collapse of slavery.
  • Although hardly ever reported in the press, the years between 1830 and 1860 saw more than one hundred incidents of violence between congressmen, from melees in the aisles to mass brawls on the floor, from fistfights and duels to street fights. “It is the game of these men, and of their profligate organs,” Dickens wrote, “to make the strife of politics so fierce and brutal, and so destructive of all self-respect in worthy men, that sensitive and delicate-minded persons shall be kept aloof, and they, and such as they, be left to battle out their selfish views unchecked.”
  • They spat venom. They pulled guns. They unsheathed knives. Divisions of party were abandoned; the splinter in Congress was sectional. Before heading to the Capitol every morning, southern congressmen strapped bowie knives to their belts and tucked pistols into their pockets. Northerners, on principle, came unarmed. When northerners talked about the slave power, they meant that literally.32
  • If the United States were to acquire territory from Mexico, and if this territory were to enter the Union, would Mexicans become American citizens? Calhoun, now in the Senate, vehemently opposed this idea. “I protest against the incorporation of such a people,” he declared. “Ours is the government of the white man.”
  • And yet, as different as were Wilmot’s interests from Calhoun’s, they were both interested in the rights of white men, as Wilmot made plain. “I plead the cause of the rights of white freemen,” he said. “I would preserve for free white labor a fair country, a rich inheritance, where the sons of toil, of my own race and own color, can live without the disgrace which association with negro slavery brings upon free labor.”
  • If the problem was the size of the Republic, the sprawl of its borders, the frayed edges of empire, couldn’t railroads, and especially the telegraph, tie the Republic together? “Doubt has been entertained by many patriotic minds how far the rapid, full, and thorough intercommunication of thought and intelligence, so necessary to the people living under a common representative republic, could be expected to take place throughout such immense bounds,” said one House member in 1845, but “that doubt can no longer exist.”45
  • even Americans with an unflinching faith in machine-driven progress understood that a pulse along a wire could not stop the slow but steady dissolution of the Union.
  • the Treaty of Guadalupe Hidalgo, under which the top half of Mexico became the bottom third of the United States. The gain to the United States was as great as the loss to Mexico. In 1820, the United States of America had spanned 1.8 million square miles, with a population of 9.6 million people; Mexico had spanned 1.7 million square miles, with a population of 6.5 million people. By 1850, the United States had acquired one million square miles of Mexico, and its population had grown to 23.2 million; Mexico’s population was 7.5 million.49
  • The Louisiana Purchase had doubled the size of the United States. In gaining territory from Mexico, the United States grew by 64 percent.
  • the territory comprising the United States had grown to “nearly ten times as large as the whole of France and Great Britain combined; three times as large as the whole of France, Britain, Austria, Prussia, Spain, Portugal, Belgium, Holland, and Denmark, together; one-and-a-half times as large as the Russian empire in Europe; one-sixth less only than the area covered by the fifty-nine or sixty empires, states, and Republics of Europe; of equal extent with the Roman Empire or that of Alexander, neither of which is said to have exceeded 3,000,000 square miles.”50
  • Sentiment was not Fuller’s way; debate was her way. She was a scourge of lesser intellects. Edgar Allan Poe, whose work she did not admire, described her as wearing a perpetual sneer. In “The Great Lawsuit: Man versus Men, Woman versus Women,” Fuller argued that the democratization of American politics had cast light on the tyranny of men over women: “As men become aware that all men have not had their fair chance,” she observed, women had become willing to say “that no women have had a fair chance.”
  • In 1845, in Woman in the Nineteenth Century, Fuller argued for fundamental and complete equality: “We would have every path laid open to Woman as freely as to Man.”56 The book was wildly successful, and Greeley, who had taken to greeting Fuller with one of her catchphrases about women’s capacity—“Let them be sea-captains, if you will”—sent her to Europe to become his newspaper’s foreign correspondent.
  • Reeling from those revolutions, the king of Bavaria asked the historian Leopold von Ranke to explain why his people had rebelled against monarchial rule, as had so many peoples in Europe that year. “Ideas spread most rapidly when they have found adequate concrete expression,” Ranke told the king, and the United States had “introduced a new force in the world,” the idea that “the nation should govern itself,” an idea that would determine “the course of the modern world”: free speech, spread by wire, would make the whole world free.61
  • Unlike Thoreau, who cursed the railroads, Free-Soilers believed in improvement, improvement through the hard work of the laboring man, his power, his energy. “Our paupers to-day, thanks to free labor, are our yeoman and merchants of tomorrow,” the New York Times boasted. “Why, who are the laboring people of the North?” Daniel Webster asked. “They are the whole North. They are the people who till their own farms with their own hands, freeholders, educated men, independent men.”
  • This attack by northerners led southerners to greater exertions in defending their way of life. They battled on several fronts. They described northern “wage slavery” as a far more exploitative system of labor than slavery. They celebrated slavery as fundamental to American prosperity. Slavery “has grown with our growth, and strengthened with our strength,” Calhoun said. And they elaborated an increasingly virulent ideology of racial difference, arguing against the very idea of equality embodied in the American creed.
  • Conservative Virginian George Fitzhugh, himself inspired by ethnological thinking, dismissed the “self-evident truths” of the Declaration of Independence as utter nonsense. “Men are not born physically, morally, or intellectually equal,” he wrote. “It would be far nearer the truth to say, ‘that some were born with saddles on their backs, and others booted and spurred to ride them,’—and the riding does them good.”
  • For Fitzhugh, the error had begun in the imaginations of the philosophes of the Enlightenment and in their denial of the reality of history. Life and liberty are not “inalienable rights,” Fitzhugh argued: instead, people “have been sold in all countries, and in all ages, and must be sold so long as human nature lasts.” Equality means calamity: “Subordination, difference of caste and classes, difference of sex, age, and slavery beget peace and good will.”
  • Progress is an illusion: “the world has not improved in the last two thousand, probably four thousand years.” Perfection is to be found in the past, not in the future.66 As for the economic systems of the North and the South, “Free laborers have not a thousandth part of the rights and liberties of negro slaves,” Fitzhugh insisted. “The negro slaves of the South are the happiest, and, in some sense, the freest people in the world.”67
  • HISTORY TEEMS WITH mishaps and might-have-beens: explosions on the Potomac, storms not far from port, narrowly contested elections, court cases lost and won, political visionaries drowned. But over the United States in the 1850s, a sense of inevitability fell, as if there were a fate, a dismal dismantlement, that no series of events or accidents could thwart.
  • over the United States in the 1850s, a sense of inevitability fell, as if there were a fate, a dismal dismantlement, that no series of events or accidents could thwart.
  • Douglas promoted the idea of popular sovereignty, proclaiming, “If there is any one principle dearer and more sacred than all others in free governments, it is that which asserts the exclusive right of a free people to form and adopt their own fundamental law.”75 Unfree people, within Stephen Douglas’s understanding, had no such rights.
  • the Fugitive Slave Law, required citizens to turn in runaway slaves and denied fugitives the right to a jury trial. The law, said Harriet Jacobs, a fugitive slave living in New York, marked “the beginning of a reign of terror to the colored population.”76 Bounty hunters and slave catchers hunted down and captured former slaves and returned them to their owners for a fee. Little stopped them from seizing men, women, and children who had been born free, or who had been legally emancipated, and selling them to the South, too. Nothing so brutally exposed the fragility of freedom or the rapaciousness of slavery.
  • February 1854, at their convention in Philadelphia, northern Know-Nothings proposed a platform plank calling for the reinstatement of the Missouri Compromise. When that motion was rejected, some fifty delegates from eight northern states bolted: they left the convention, and the party, to set up their own party, the short-lived North American Party. Nativism would endure as a force in American politics, but, meanwhile, nativists split over slavery.
  • Lincoln’s was the language of free soil, free speech, and free labor. He grounded his argument against slavery in his understanding of American history, in the language of Frederick Douglass, and in his reading of the Constitution. “Let no one be deceived,” he said. “The spirit of seventy-six and the spirit of Nebraska, are utter antagonisms.”
  • As a nation, we began by declaring that “all men are created equal.” We now practically read it “all men are created equal, except negroes.” When the Know-Nothings get control, it will read “all men are created equal, except negroes, and foreigners, and Catholics.” When it comes to this I should prefer emigrating to some country where they make no pretense of loving liberty—to Russia, for instance, where despotism can be taken pure, and without the base alloy of hypocrisy.
  • “That negroes, whether slave or free, that is, men of the African race, are not citizens of the United States by the Constitution.” The implications of the ruling stunned his readers. Even Americans who held no strong views on the question of slavery—and they were rare enough—were nonetheless shocked by the court’s exercise of the authority to determine the unconstitutionality of the law.
  • “A large meeting of colored people” was held in Philadelphia in April, at which it was resolved that “the only duty the colored man owes to a Constitution under which he is declared to be an inferior and degraded being, having no rights which white men are bound to respect, is to denounce and repudiate it, and to do what he can by all proper means to bring it into contempt.”
  • “You may close your Supreme Court against the black man’s cry for justice, but you cannot, thank God, close against him the ear of a sympathising world, nor shut up the Court of Heaven.” Taney’s interpretation of the Constitution would be ignored, Douglass predicted. “Slavery lives in this country not because of any paper Constitution, but in the moral blindness of the American people.”102
  • APHOTOGRAPH STOPS TIME, TRAPPING IT LIKE A BUTTERFLY in a jar.
  • No other kind of historical evidence has this quality of instantaneity, of an impression taken in a moment, in a flicker, an eye opened and then shut. Photographs also capture the ordinary, the humble, the speechless. The camera discriminates between light and dark but not between the rich and the poor, the literate and the illiterate, the noisy and the quiet.
  • portraits were also closely associated with death, with being trapped in time, on glass, for eternity, and, even more poignantly, with equality.3 With photography, Walt Whitman predicted, “Art will be democratized.”
  • Morse had long predicted that the telegraph would usher in an age of world peace. “I trust that one of its effects will be to bind man to his fellow-man in such bonds of amity as to put an end to war,” he insisted.8 War was a failure of technology, Morse argued, a shortcoming of communication that could be remedied by way of a machine. Endowing his work with the grandest of purposes, he believed that the laying of telegraph wires across the American continent would bind the nation together into one people, and that the laying of cable across the ocean would bind Europe to the Americas, ushering in the dawn of an age of global harmony.
  • But war isn’t a failure of technology; it’s a failure of politics.
  • Debate is to war what trial by jury is to trial by combat: a way to settle a dispute without coming to blows. The form and its rules had been established over centuries. They derived from rules used in the courts and in Parliament, and even from the rules of rhetoric used in the writing of poetry. Since the Middle Ages and the founding of the first universities, debate had been the foundation of a liberal arts education.
  • (Etymologically and historically, the artes liberales are the arts acquired by people who are free, or liber.)10 In the eighteenth century, debate was understood as the foundation of civil society. In 1787, delegates to the constitutional convention had agreed to “to argue without asperity, and to endeavor to convince the judgment without hurting the feelings of each other.”
  • Some twelve thousand people showed up for their first debate, at two o’clock in the afternoon on August 21, in Ottawa, Illinois. There were no seats; the audience stood, without relief, for three hours.
  • They’d agreed to strict rules: the first speaker would speak for an hour and the second for an hour and a half, whereupon the first speaker would offer a thirty-minute rebuttal.
  • And, as to the wrongness of slavery, he called it tyranny, and the idea of its naturalness as much an error as a belief in the divine right of kings. The question wasn’t sectionalism or nationalism, the Democratic Party or the Republican Party. The question was right against wrong. “That is the issue that will continue in this country when these poor tongues of Judge Douglas and myself shall be silent,” Lincoln said.16
  • The price of slaves grew so high that a sizable number of white southerners urged the reopening of the African slave trade. In the 1850s, legislatures in several states, including South Carolina, proposed reopening the trade. Adopting this measure would have violated federal law. Some “reopeners” believed that the federal ban on the trade was unconstitutional; others were keen to nullify it, in a dress rehearsal for secession.
  • “If it is right to buy slaves in Virginia and carry them to New Orleans, why is it not right to buy them in Cuba, Brazil, or Africa and carry them there?”21 Proslavery southerners made these arguments under the banner of “free trade,” their rhetorical answer to “free labor.”
  • To George Fitzhugh, all societies were “at all times and places, regulated by laws as universal and as similar as those which control the affairs of bees,” and trade itself, including the slave trade, was “as old, as natural, and irresistible as the tides of the ocean.”
  • In 1855, David Christy, the author of Cotton Is King, wrote about the vital importance of “the doctrine of Free Trade,” which included abolishing the tariffs that made imported English goods more expensive than manufactured goods produced in the North. As one southerner put it, “Free trade, unshackled industry, is the motto of the South.”23
  • Darwin’s Origin of Species would have a vast and lingering influence on the world of ideas. Most immediately, it refuted the racial arguments of ethnologists like Louis Agassiz. And, in the months immediately following the book’s publication—the last, unsettling months before the beginning of the Civil War—abolitionists took it as evidence of the common humanity of man.30
  • The truths of the Confederacy disavowed the truths of the Union. The Confederacy’s newly elected vice president, a frail Georgian named Alexander Stephens, delivered a speech in Savannah in which he made those differences starkly clear. The ideas that lie behind the Constitution “rested upon the assumption of the equality of races,” Stephens said, but
  • “Our new government is founded upon exactly the opposite idea: its foundations are laid, its cornerstone rests, upon the great truth that the negro is not equal to the white man; that slavery . . . is his natural and moral condition. This, our new government, is the first, in the history of the world, based upon this great physical, philosophical, and moral truth.”52 It would become politically expedient, after the war, for ex-Confederates to insist that the Confederacy was founded on states’ rights. But the Confederacy was founded on white supremacy.
  • Opposition to free speech had long been the position of slave owners, a position taken at the constitutional convention and extended through the gag rule, antiliteracy laws, bans on the mails, and the suppression of speakers. An aversion to political debate also structured the Confederacy, which had both a distinctive character and a lasting influence on Americans’ ideas about federal authority as against popular sovereignty.
  • Secessionists were attempting to build a modern, proslavery, antidemocratic state. In order to wage a war, the leaders of this fundamentally antidemocratic state needed popular support. Such support was difficult to gain and impossible to maintain. The Confederacy therefore suppressed dissent.55
  • By May of 1861, the Confederacy comprised fifteen states stretching over 900,000 square miles and containing 12 million people, including 4 million slaves, and 4 million white women who were disenfranchised. It rested on the foundational belief that a minority governs a majority. “The condition of slavery is with us nothing but a form of civil government for a class of people not fit to govern themselves,” said Jefferson Davis.
  • There would be those, after the war ended, who said that it had been fought over states’ rights or to preserve the Union or for a thousand other reasons and causes. Soldiers, North and South, knew better. “The fact that slavery is the sole undeniable cause of this infamous rebellion, that it is a war of, by, and for Slavery, is as plain as the noon-day sun,” a soldier writing for his Wisconsin regimental newspaper explained in 1862. “Any man who pretends to believe that this is not a war for the emancipation of the blacks,” a soldier writing for his Confederate brigade’s newspaper wrote that same year, “is either a fool or a liar.”
  • Lincoln would remain a man trapped in time, in the click of a shutter and by the trigger of a gun. In mourning him, in sepia and yellow, in black and white, beneath plates of glinting glass, Americans deferred a different grief, a vaster and more dire reckoning with centuries of suffering and loss, not captured by any camera, not settled by any amendment, the injuries wrought on the bodies of millions of men, women, and children, stolen, shackled, hunted, whipped, branded, raped, starved, and buried in unmarked graves.
  • No president consecrated their cemeteries or delivered their Gettysburg address; no committee of arrangements built monuments to their memory. With Lincoln’s death, it was as if millions of people had been crammed into his tomb, trapped in a vault that could not hold them.
  • People running for Congress didn’t have to meet property requirements; they didn’t have to have been born in the United States; and they couldn’t be subjected to religious tests. This same logic applied to citizenship, and for the same reason: the framers of the Constitution understood these sorts of requirements as forms of political oppression. The door to the United States was meant to be open.
  • Before the 1880s, no federal law restricted immigration. And, despite periods of fervent nativism, especially in the 1840s, the United States welcomed immigrants into citizenship, and valued them. After the Civil War, the U.S. Treasury estimated the worth of each immigrant as equal to an $800 contribution to the nation’s economy,
  • Nineteenth-century politicians and political theorists interpreted American citizenship within the context of an emerging set of ideas about human rights and the authority of the state, holding dear the conviction that a good government guarantees everyone eligible for citizenship the same set of political rights, equal and irrevocable.
  • The Civil War raised fundamental questions not only about the relationship between the states and the federal government but also about citizenship itself and about the very notion of a nation-state. What is a citizen? What powers can a state exert over its citizens? Is suffrage a right of citizenship, or a special right, available only to certain citizens? Are women citizens? And if women are citizens, why aren’t they voters? What about Chinese immigrants, pouring into the West? They were free. Were they, under American law, “free white persons” or “free persons of color” or some other sort of persons?
  • In 1866, Congress searched in vain for a well-documented definition of the word “citizen.” Over the next thirty years, that definition would become clear, and it would narrow.
  • In 1896, the U.S. passport office, in the Department of State, which had grown to thousands of clerks, began processing applications according to new “Rules Governing the Application of Passports,” which required evidence of identity, including a close physical description Lew Wa Ho worked at a dry goods shop in St. Louis; the photograph was included in his Immigration Service case file as evidence of employment. Age, _____ years; stature, _____ feet _____ inches (English measure); forehead, _____; eyes, _____; nose, _____; mouth, _____; chin, _____; hair, _____; complexion, _____; face, _____ as well as affidavits, signatures, witnesses, an oath of loyalty, and, by way of an application fee, one dollar.12
  • The Fourteenth Amendment, drafted by the Joint Committee on Reconstruction, marked the signal constitutional achievement of a century of debate and war, of suffering and struggle. It proposed a definition of citizenship guaranteeing its privileges and immunities, and insuring equal protection and due process to all citizens. “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside,”
  • “No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”20
  • During the drafting of the amendment, the committee betrayed the national phalanx of women who for decades had fought for abolition and for black civil rights by proposing to insert, into the amendment’s second section, a provision that any state that denied the right to vote “to any of the male inhabitants of such state” would lose representation in Congress. “Male” had never before appeared in any part of the Constitution. “If that word ‘male’ be inserted,” Stanton warned, “it will take us a century at least to get it out.”21 She was not far wrong.
  • Women protested. “Can any one tell us why the great advocates of Human Equality . . . forget that when they were a weak party and needed all the womanly strength of the nation to help them on, they always united the words ‘without regard to sex, race, or color’?” asked Ohio-born reformer Frances Gage. Charles Sumner offered this answer: “We know how the Negro will vote, but are not so sure of the women.” How women would vote was impossible to know. Would black women vote the way black men voted? Would white women vote like black women? Republicans decided they’d rather not find out.
  • In the federal census of 1860, 24,282 out of 34,935 Chinese toiled in mines. Although some Chinese immigrants left mining—and some were forced out—many continued to mine well into the 1880s, often working in sites abandoned by other miners.
  • An 1867 government report noted that in Montana, “the diggings now fall into the hands of the Chinese, who patiently glean the fields abandoned by the whites.” Chinese workers began settling in Boise in 1865 and only five years later constituted a third of Idaho’s settlers and nearly 60 percent of its miners. In 1870, Chinese immigrants and their children made up nearly 9 percent of the population of California, and one-quarter of the state’s wage earners.
  • Their rights, under state constitutions and statutes, were markedly limited. Oregon’s 1857 constitution barred “Chinamen” from owning real estate, while California barred Chinese immigrants from testifying in court, a provision upheld in an 1854 state supreme court opinion, People v. Hall, which described the Chinese as “a race of people whom nature has marked as inferior, and who are incapable of progress or intellectual development beyond a certain point, as their history has shown.”29
  • And what about the voting rights of U.S.-born Chinese Americans? Much turned on the Fifteenth Amendment, proposed early in 1869. While the aim of the amendment was to guarantee African Americans the right to vote and hold office, its language inevitably raised the question of Chinese citizenship and suffrage. Opponents of the amendment found its entire premise scandalous. Garrett Davis, a Democratic senator from Kentucky, fumed, “I want no negro government; I want no Mongolian government; I want the government of the white man which our fathers incorporated.”33
  • Douglass spoke about what he called a “composite nation,” a strikingly original and generative idea, about a citizenry made better, and stronger, not in spite of its many elements, but because of them: “I want a home here not only for the negro, the mulatto and the Latin races; but I want the Asiatic to find a home here in the United States, and feel at home here, both for his sake and for ours.”36
  • Tilden won the nomination anyway and, in the general election, he won the popular vote against Hayes. Unwilling to accept the result of the election, Republicans disputed the returns in Florida, Louisiana, and South Carolina.
  • Eventually, the decision was thrown to an electoral commission that brokered a nefarious compromise: Democrats agreed to throw their support behind the man ever after known as Rutherfraud B. Hayes, so that he could become president, in exchange for a promise from Republicans to end the military occupation of the South. For a minor and petty political win over the Democratic Party, Republicans first committed electoral fraud and then, in brokering a compromise, abandoned a century-long fight for civil rights.
  • As soon as federal troops withdrew, white Democrats, calling themselves the “Redeemers,” took control of state governments of the South, and the era of black men’s enfranchisement came to a violent and terrible end. The Klan terrorized the countryside, burning homes and hunting, torturing, and killing people. (Between 1882 and 1930, murderers lynched more than three thousand black men and women.)
  • Black politicians elected to office were thrown out. And all-white legislatures began passing a new set of black codes, known as Jim Crow laws, that segregated blacks from whites in every conceivable public place, down to the last street corner. Tennessee passed the first Jim Crow law, in 1881, mandating the separation of blacks and whites in railroad cars. Georgia became the first state to demand separate seating for whites and blacks in streetcars, in 1891.
  • “Capital buys and sells to-day the very heart-beats of humanity,” she said. Democracy itself had been corrupted by it: “the speculators, the land-robbers, the pirates and gamblers of this Nation have knocked unceasingly at the doors of Congress, and Congress has in every case acceded to their demands.”44 The capitalists, she said, had subverted the will of the people.
  • In the late nineteenth century, a curious reversal took place. Electoral politics, the politics men engaged in, became domesticated, the office work of education and advertising—even voting moved indoors. Meanwhile, women’s political expression moved to the streets. And there, at marches, rallies, and parades, women deployed the tools of the nineteenth-century religious revival: the sermon, the appeal, the conversion.45
  • 1862 alone, in addition to the Homestead Act, the Republican Congress passed the Pacific Railway Act (chartering railroad companies to build the line from Omaha, Nebraska, to Sacramento, California) and the National Bank Act (to issue paper money to pay for it all). After the war, political power moved from the states to the federal government and as the political influence of the South waned, the importance of the West rose. Congress not only sent to the states amendments to the Constitution that defined citizenship and guaranteed voting rights but also passed landmark legislation involving the management of western land, the control of native populations, the growth and development of large corporations, and the construction of a national transportation infrastructure.
  • The independent farmer—the lingering ideal of the Jeffersonian yeoman—remained the watchword of the West, but in truth, the family farming for subsistence, free of government interference, was far less common than a federally subsidized, capitalist model of farming and cattle raising for a national or even an international market. The small family farm—Jefferson’s republican dream—was in many parts of the arid West an environmental impossibility.
  • Much of the property distributed under the terms of the Homestead Act, primarily in the Great Basin, was semi-arid, the kind of land on which few farmers could manage a productive farm with only 160 acres. Instead, Congress typically granted the best land to railroads, and allowed other, bigger interests to step in, buying up large swaths for agricultural business or stock raising and fencing it in, especially after the patenting of barbed wire in 1874.46
  • In 1885, an American economist tried to reckon the extraordinary transformation wrought by what was now 200,000 miles of railroad, more than in all of Europe. It was possible to move one ton of freight one mile for less than seven-tenths of one cent, “a sum so small,” he wrote, “that outside of China it would be difficult to find a coin of equivalent value to give a boy as a reward for carrying an ounce package across a street.”48
  • instability contributed to a broader set of political concerns that became Mary Lease’s obsession, concerns known as “the money question,” and traceable all the way back to Hamilton’s economic plan: Should the federal government control banking and industry?
  • No group of native-born Americans was more determined to end Chinese immigration than factory workers. The 1876 platform of the Workingmen’s Party of California declared that “to an American death is preferable to life on par with a Chinaman.”55 In 1882, spurred by the nativism of populists, Congress passed its first-ever immigration law, the Chinese Exclusion Act, which barred immigrants from China from entering the United States and, determining that the Fourteenth Amendment did not apply to people of Chinese ancestry, decreed that Chinese people already in the United States were permanent aliens who could never become citizens.
  • Populists, whether farmers or factory workers, for all their invocation of “the people,” tended to take a narrow view of citizenship. United in their opposition to the “money power,” members of the alliance, like members of the Knights of Labor, were also nearly united in their opposition to the political claims of Chinese immigrants, and of black people. The Farmers’ Alliance excluded African Americans, who formed their own association, the Colored Farmers’ Alliance. Nor did populists count Native Americans within the body of “the people.”
  • In 1887, Congress passed the Dawes Severalty Act, under whose terms the U.S. government offered native peoples a path to citizenship in a nation whose reach had extended across the lands of their ancestors. The Dawes Act granted to the federal government the authority to divide Indian lands into allotments and guaranteed U.S. citizenship to Indians who agreed to live on those allotments and renounce tribal membership.
  • In proposing the allotment plan, Massachusetts senator Henry Laurens Dawes argued that the time had come for Indians to choose between “extermination or civilization” and insisted that the law offered Americans the opportunity to “wipe out the disgrace of our past treatment” and instead lift Indians up “into citizenship and manhood.”58
  • But in truth the Dawes Act understood native peoples neither as citizens nor as “persons of color,” and led to nothing so much as forced assimilation and the continued takeover of native lands. In 1887 Indians held 138 million acres; by 1900, they held only half of that territory.
  • In 1877, railroad workers protesting wage cuts went on strike in cities across the country. President Hayes sent in federal troops to end the strikes, marking the first use of the power of the federal government to support business against labor. The strikes continued, with little success in improving working conditions. Between 1881 and 1894, there was, on average, one major railroad strike a week. Labor was, generally and literally, crushed: in a single year, of some 700,000 men working on the railroads, more than 20,000 were injured on the job and nearly 2,000 killed.59
  • In 1882, Roscoe Conkling represented the Southern Pacific Railroad Company’s challenge to a California tax rule. He told the U.S. Supreme Court, “I come now to say that the Southern Pacific Railroad Company and its creditors and stockholders are among the ‘persons’ protected by the Fourteenth Amendment.”
  • In offering an argument about the meaning and original intention of the word “person” in the Fourteenth Amendment, Conkling enjoyed a singular authority: he’d served on the Joint Committee on Reconstruction that had drafted the amendment and by 1882 was the lone member of that committee still living. With no one alive to contradict him, Conkling assured the court that the committee had specifically rejected the word “citizen” in favor of “person” in order to include corporations. (A
  • Much evidence suggests, however, that Conkling was lying. The record of the deliberations of the Joint Committee on Reconstruction does not support his argument regarding the committee’s original intentions, nor is it plausible that between 1866 and 1882, the framers of the Fourteenth Amendment had kept mysteriously hidden their secret intention to guarantee equal protection and due process to corporations. But
  • in 1886, when another railroad case, Santa Clara County v. Southern Pacific Railroad, reached the Supreme Court, the court’s official recorder implied that the court had accepted the doctrine that “corporations are persons within the meaning of the Fourteenth Amendment.”62 After that, the Fourteenth Amendment, written and ratified to guarantee freed slaves equal protection and due process of law, became the chief means by which corporations freed themselves from government regulation.
  • In 1937, Supreme Court Justice Hugo Black would observe, with grim dismay, that, over the course of fifty years, “only one half of one percent of the Fourteenth Amendment cases that came before the court had anything to do with African Americans or former slaves, while over half of the cases were about protecting the rights of corporations.”63 Rights guaranteed to the people were proffered, instead, to corporations.
  • He devised an economic plan that involved abolishing taxes on labor and instead imposing a single tax on land. Tocqueville had argued that democracy in America is made possible by economic equality; people with equal estates will eventually fight for, and win, equal political rights. George agreed. But, like Mary Lease, he thought that financial capitalism was destroying democracy by making economic equality impossible. He saw himself as defending “the Republicanism of Jefferson and the Democracy of Jackson.”72
  • Between 1889 and 1893, the mortgages on so many farms were foreclosed that 90 percent of farmland fell into the hands of bankers. The richest 1 percent of Americans owned 51 percent of the nation’s wealth, and the poorest 44 percent owned less than 2 percent.
  • For all its passionate embrace of political equality and human rights and its energetic championing of suffrage, the People’s Party rested on a deep and abiding commitment to exclude from full citizenship anyone from or descended from anyone from Africa or Asia.
  • Many of the reforms proposed by populists had the effect of diminishing the political power of blacks and immigrants. Chief among them was the Australian ballot, more usually known as the secret ballot, which, by serving as a de facto literacy test, disenfranchised both black men in the rural South and new immigrants in northern cities.
  • to deliberate at length over the secret ballot. Quickest to adopt the reform were the states of the former Confederacy, where the reform appealed to legislatures eager to find legal ways to keep black men from voting. In 1890, Mississippi held a constitutional
  • Both by law and by brute force, southern legislators, state by state, and poll workers, precinct by precinct, denied black men the right to vote. In Louisiana, black voter registration dropped from 130,000 in 1898 to 5,300 in 1908, and to 730 in 1910. In 1893, Arkansas Democrats celebrated their electoral advantage by singing,         The Australian ballot works like a charm         It makes them think and scratch         And when a Negro gets a ballot         He has certainly met his match.82
  • One Republican said, “I felt that Bryan was the first politician I had ever heard speak the truth and nothing but the truth,” even though in every case, when he read a transcript of the speech in the newspaper the next day, he “disagreed with almost all of it.”85
  • In 1894, Bryan tacked an income tax amendment to a tariff bill, which managed to pass. But the populist victory—a 2 percent federal income tax that applied only to Americans who earned more than $4,000—didn’t last long. The next year, in Pollock v. Farmers’ Loan and Trust Company, the Supreme Court ruled 5–4 that the tax was a direct tax, and therefore unconstitutional, one justice calling the tax the first campaign in “a war of the poor against the rich.”
  • POPULISM ENTERED AMERICAN politics at the end of the nineteenth century, and it never left. It pitted “the people,” meaning everyone but the rich, against corporations, which fought back in the courts by defining themselves as “persons”; and it pitted “the people,” meaning white people, against nonwhite people who were fighting for citizenship and whose ability to fight back in the courts was far more limited, since those fights require well-paid lawyers.
  • After 1859, and the Origin of Species, the rise of Darwinism contributed to the secularization of the university, as did the influence of the German educational model, in which universities were divided into disciplines and departments, each with a claim to secular, and especially scientific, expertise. These social sciences—political science, economics, sociology, and anthropology—used the methods of science, and especially of quantification, to study history, government, the economy, society, and culture.96
  • For Wilson’s generation of political scientists, the study of the state replaced the study of the people. The erection of the state became, in their view, the greatest achievement of civilization. The state also provided a bulwark against populism. In the first decades of the twentieth century, populism would yield to progressivism as urban reformers applied the new social sciences to the study of political problems, to be remedied by the intervention of the state.
  • The rise of populism and the social sciences reshaped the press, too. In the 1790s, the weekly partisan newspaper produced the two-party system. The penny press of the 1830s produced the popular politics of Jacksonian democracy. And in the 1880s and 1890s the spirit of populism and the empiricism of the social sciences drove American newspapers to a newfound obsession with facts.
  • The newspapers of the 1880s and 1890s were full of stunts and scandals and crusades, even as they defended their accuracy. “Facts, facts piled up to the point of dry certitude was what the American people really wanted,” wrote the reporter Ray Stannard Baker. Julius Chambers said that writing for the New York Herald involved “Facts; facts; nothing but facts. So many peas at so much a peck; so much molasses at so much a quart.”
  • Ballot reform, far from keeping money out of elections, had ushered more money into elections, along with a new political style: using piles of money to sell a candidate’s personality, borrowing from the methods of business by using mass advertising and education, slogans and billboards. McKinley ran a new-style campaign; Bryan ran an old-style campaign. Bryan barnstormed all over the country: he gave some six hundred speeches to five million people in twenty-seven states and traveled nearly twenty thousand miles.
  • But McKinley’s campaign coffers were fuller: Republicans spent $7 million; Democrats, $300,000. John D. Rockefeller alone provided the GOP with a quarter of a million dollars. McKinley’s campaign manager, Cleveland businessman Mark Hanna, was nearly buried in donations from fellow businessmen. He used that money to print 120 million pieces of campaign literature. He hired fourteen hundred speakers to stump for McKinley; dubbing the populists Popocrats, they agitated voters to a state of panic.108 As Mary Lease liked to say, money elected McKinley.
  • Turner, born in Wisconsin in 1861, was one of the first Americans to receive a doctorate in history. At the exposition, he delivered his remarks before the American Historical Association, an organization that had been founded in 1884 and incorporated by an act of Congress in 1889 “for the promotion of historical studies, the collection and preservation of historical manuscripts and for kindred purposes in the interest of American history and of history in America.”110
  • like journalists, historians borrowed from the emerging social sciences, relying on quantitative analysis to understand how change happens. Where George Bancroft, in his History of the United States, had looked for explanations in the hand of providence, Frederick Jackson Turner looked to the census.
  • The difference between Turner’s methods and Bancroft’s signaled a profound shift in the organization of knowledge, one that would have lasting consequences for the relationship between the people and the state and for civil society itself. Like Darwinism, the rise of the social sciences involved the abdication of other ways of knowing, and, indirectly, contributed to the rise of fundamentalism.
  • Across newly defined academic disciplines, scholars abandoned the idea of mystery—the idea that there are things known only by God—in favor of the claim to objectivity, a development sometimes called “the disenchantment of the world.”111 When universities grew more secular, religious instruction became confined to divinity schools and theological seminaries.
  • theologian at the University of Chicago’s divinity school defined modernism as “the use of scientific, historical, and social methods in understanding and applying evangelical Christianity to the needs of living persons.”112 Increasingly, this is exactly what evangelicals who eventually identified themselves as fundamentalists found objectionable.
  • Influenced by both Jefferson and Darwin, Turner saw the American frontier as the site of political evolution, beginning with the “savages” of a “wilderness,” proceeding to the arrival of European traders, and continuing through various forms of settlement, through the establishment of cities and factories, “the evolution of each into a higher stage,” and culminating in the final stage of civilization: capitalism and democracy.114
  • “American democracy is fundamentally the outcome of the experiences of the American people in dealing with the West,” by which he meant the experience of European immigrants to the United States in defeating its native peoples, taking possession of their homelands, and erecting there a civilization of their own. This, for Turner, was the story of America and the lesson of American history: evolution.116
  • Douglass, who, as the former U.S. ambassador to Haiti, had represented the nation of Haiti at the Haitian pavilion, was the only eminent African American with a role at the fair, whose program had been planned by a board of 208 commissioners, all white.117 There were, however, black people at the fair: on display. In the Hall of Agriculture, old men and women, former slaves, sold miniature bales of cotton, souvenirs, while, in a series of exhibits intended to display the Turnerian progress of humankind from savagery to civilization, black Americans were posed in a fake African village. “As if to shame the Negro,” Douglass wrote, they “exhibit the Negro as a repulsive savage.”118
  • “A ship at anchor, with halliards broken, sails mildewed, hull empty, her bottom covered with sea-weed and barnacles, meets no resistance,” Douglass said that day, turning the idea of a ship of state to the problem of Jim Crow. “But when she spread her canvas to the breeze and sets out on her voyage, turns prow to the open sea, the higher shall be her speed, the greater shall be her resistance. And so it is with the colored man.”
  • He paused to allow his listeners to conjure the scene, and its meaning, of a people struggling against the sea. “My dear young friends,” Douglass closed. “Accept the inspiration of hope. Imitate the example of the brave mariner, who, amid clouds and darkness, amid hail, rain and storm bolts, battles his way against all that the sea opposes to his progress and you will reach the goal of your noble ambition in safety.”124
  • The majority in Plessy v. Ferguson asserted that separation and equality were wholly separate ideas. “We consider the underlying fallacy of the plaintiff’s argument to consist in the assumption that the enforced separation of the two races stamps the colored race with a badge of inferiority. If this be so, it is not by reason of anything found in the act, but solely because the colored race chooses to put that construction upon it.” The resulting legal principle—that public accommodations could be “separate but equal”—would last for more than half a century.
  • The sole dissenter, John Marshall Harlan, objecting to the establishment of separate classes of citizens, insisted that the achievement of the United States had been the establishment, by amendment, of a Constitution that was blind to race. “Our constitution is color-blind, and neither knows nor tolerates classes among citizens,” Harlan wrote, and it is therefore a plain violation of the Constitution “for a state to regulate the enjoyment by citizens of their civil rights solely upon the basis of race.”
  • What all these laws had in common, Harlan argued, was that they were based on race. And yet a war had been fought and won to establish that laws in the United States could not be based on race; nor could citizenship be restricted by race. The court’s opinion in Plessy, Harlan warned, was so dreadfully in error as to constitutional principles that “the judgment this day rendered will, in time, prove to be quite as pernicious as the decision made by this tribunal in the Dred Scott Case.”128 This prediction proved true.
  • Four centuries had passed since continents, separated by oceans, had met again. A century had passed since Jefferson had declared all men equal. Three decades had passed since the Fourteenth Amendment had declared all persons born or naturalized in the United States to be citizens.
  • And now the Supreme Court ruled that those who would set aside equality in favor of separation had not violated the nation’s founding truths. In one of the most wrenching tragedies in American history—a chronicle not lacking for tragedy—the Confederacy had lost the war, but it had won the peace.
  • Lippmann started out as a socialist, when even mentioning the masses hinted at socialism; The Masses was the name of a socialist monthly, published in New York, and, especially after the Russian Revolution of 1917, which brought the Bolshevists to power (“bol’shinstvo” means “the majority”), “the masses” sounded decidedly Red.
  • But Lippmann soon began to write about the masses as “the bewildered herd,” unthinking and instinctual, and as dangerous as an impending stampede. For Lippmann, and for an entire generation of intellectuals, politicians, journalists, and bureaucrats who styled themselves Progressives—the term dates to 1910—the masses posed a threat to American democracy.
  • This change was wrought in the upheaval of the age. In the years following the realigning election of 1896, everything seemed, suddenly, bigger than before, more crowded, and more anonymous: looming and teeming. Even buildings were bigger: big office buildings, big factories, big mansions, big museums. Quantification became the only measure of value: how big, how much, how many.
  • To fight monopolies, protect the people, and conserve the land, the federal government grew bigger, too; dozens of new federal agencies were founded in this era,
  • “Mass” came to mean anything that involved a giant and possibly terrifying quantity, on a scale so great that it overwhelmed existing arrangements—including democracy. “Mass production” was coined in the 1890s, when factories got bigger and faster, when the number of people who worked in them skyrocketed, and when the men who owned them got staggeringly rich.
  • “Mass migration” dates to 1901, when nearly a million immigrants were entering the United States every year, “mass consumption” to 1905, “mass consciousness” to 1912. “Mass hysteria” had been defined by 1925 and “mass communication” by 1927, when the New York Times described the radio as “a system of mass communication with a mass audience.”3
  • And the masses themselves? They formed a mass audience for mass communication and had a tendency, psychologists believed, to mass hysteria—the political stampede—posing a political problem unanticipated by James Madison and Thomas Jefferson,
  • To meet that challenge in what came to be called the Progressive Era, activists, intellectuals, and politicians campaigned for and secured far-reaching reforms that included municipal, state, and federal legislation.
  • Their most powerful weapon was the journalistic exposé. Their biggest obstacle was the courts, which they attempted to hurdle by way of constitutional amendments. Out of these campaigns came the federal income tax, the Federal Reserve Bank, the direct election of U.S. senators, presidential primaries, minimum-wage and maximum-hour laws, women’s suffrage, and Prohibition.
  • And all of what Progressives accomplished in the management of mass democracy was vulnerable to the force that so worried the unrelenting Walter Lippmann: the malleability of public opinion, into mass delusion.
  • Progressives championed the same causes as Populists, and took their side in railing against big business, but while Populists generally wanted less government, Progressives wanted more, seeking solutions in reform legislation and in the establishment of bureaucracies, especially government agencies.6
  • Populists believed that the system was broken; Progressives believed that the government could fix it. Conservatives, who happened to dominate the Supreme Court, didn’t believe that there was anything to fix but believed that, if there was, the market would fix it. Notwithstanding conservatives’ influence in the judiciary, Progressivism spanned both parties.
  • Woodrow Wilson himself admitted, “When I sit down and compare my views with those of a Progressive Republican I can’t see what the difference is.”7
  • Much that was vital in Progressivism grew out of Protestantism, and especially out of a movement known as the Social Gospel, adopted by almost all theological liberals and by a large number of theological conservatives,
  • The Social Gospel movement was led by seminary professors—academic theologians who accepted the theory of evolution, seeing it as entirely consistent with the Bible and evidence of a divinely directed, purposeful universe; at the same time, they fiercely rejected the social Darwinism of writers like Herbert Spencer, the English natural scientist who coined the phrase “the survival of the fittest” and used the theory of evolution to defend all manner of force, violence, and oppression.
  • argued that fighting inequality produced by industrialism was an obligation of Christians: “We must make men believe that Christianity has a right to rule this kingdom of industry, as well as all the other kingdoms of this world.”9 Social Gospelers brought the zeal of abolitionism to the problem of industrialism.
  • In 1908, Methodists wrote a Social Creed and pledged to fight to end child labor and to promote a living wage. It was soon adopted by the thirty-three-member Federal Council of Churches, which proceeded to investigate a steelworkers’ strike in Bethlehem, ultimately taking the side of the strikers.10
  • Washington, in the debate over the annexation of the Philippines, Americans revisited unsettled questions about expansion that had rent the nation during the War with Mexico and unsettled questions about citizenship that remained the unfinished business of Reconstruction. The debate also marked the limits of the Progressive vision: both sides in this debate availed themselves, at one time or another, of the rhetoric of white supremacy. Eight million people of color in the Pacific and the Caribbean, from the Philippines to Puerto Rico, were now part of the United States, a nation that already, in practice, denied the right to vote to millions of its own people because of the color of their skin.
  • “You are undertaking to annex and make a component part of this Government islands inhabited by ten millions of the colored race, one-half or more of whom are barbarians of the lowest type,” said Ben Tillman, a one-eyed South Carolina Democrat who’d boasted of having killed black men and expressed his support for lynch mobs. “It is to the injection into the body politic of the United States of that vitiated blood, that debased and ignorant people, that we object.”
  • Tillman reminded Republicans that they had not so long ago freed slaves and then “forced on the white men of the South, at the point of the bayonet, the rule and domination of those ex-slaves. Why the difference? Why the change? Do you acknowledge that you were wrong in 1868?”14
  • The war that began in Cuba in 1898 and was declared over in the Philippines in 1902 dramatically worsened conditions for people of color in the United States, who faced, at home, a campaign of terrorism. Pro-war rhetoric, filled with racist venom, only further incited American racial hatreds. “If it is necessary, every Negro in the state will be lynched,” the governor of Mississippi pledged in 1903.
  • By one estimate, someone in the South was hanged or burned alive every four days. The court’s decision in Plessy v. Ferguson meant that there was no legal recourse to fight segregation, which grew more brutal with each passing year.
  • Nor was discrimination confined to the South. Cities and counties in the North and West passed racial zoning laws, banning blacks from the middle-class communities. In 1890, in Montana, blacks lived in all fifty-six counties in the state; by 1930, they’d been confined to just eleven. In Baltimore, blacks couldn’t buy houses on blocks where whites were a majority.
  • In 1917, in Buchanan v. Warley, the Supreme Court availed itself of the Fourteenth Amendment not to guarantee equal protection for blacks but to guarantee what the court had come to understand as the “liberty of contract”—the liberty of businesses to discriminate.16
  • A generation earlier, he’d have become a preacher, like his father, but instead he became a professor of political science.23 In the academy and later in the White House, he dedicated himself to the problem of adapting a Constitution written in the age of the cotton gin to the age of the automobile.
  • “We have grown more and more inclined from generation to generation to look to the President as the unifying force in our complex system, the leader both of his party and of the nation. To do so is not inconsistent with the actual provisions of the Constitution; it is only inconsistent with a very mechanical theory of its meaning and intention.” A president’s power, Wilson concluded, is virtually limitless: “His office is anything he has the sagacity and force to make it.”24
  • the U.S. Supreme Court overruled much Progressive labor legislation. The most important of these decisions came in 1905. In a 5–4 decision in Lochner v. New York, the U.S. Supreme Court voided a state law establishing that bakers could work no longer than ten hours a day, six days a week, on the ground that the law violated a business owner’s liberty of contract, the freedom to forge agreements with his workers, something the court’s majority said was protected under the Fourteenth Amendment.
  • The laissez-faire conservatism of the court was informed, in part, by social Darwinism, which suggested that the parties in disputes should be left to battle it out, and if one side had an advantage, even so great an advantage as a business owner has over its employees, then it should win.
  • In a dissenting opinion in Lochner, Oliver Wendell Holmes accused the court of violating the will of the people. “This case is decided upon an economic theory which a large part of the country does not entertain,” he began. The court, he said, had also wildly overreached its authority and had carried social Darwinism into the Constitution. “A Constitution is not intended to embody a particular economic theory,” Holmes wrote. “The Fourteenth Amendment does not enact Mr. Herbert Spencer’s Social Statics.”
  • Wilson pointed out that the Constitution, written before mass industrialization, couldn’t be expected to have anticipated it, and couldn’t solve the problems industrialization had created, unless the Constitution were treated like a living thing that, like an organism, evolved.
  • Critics further to the left argued that the courts had become an instrument of business interests. Unions, in fact, often failed to support labor reform legislation, partly because they expected it to be struck down by the courts as unconstitutional, and partly because they wanted unions to provide benefits to their members, which would be an argument for organizing.
  • conservatives insisted that the courts were right to protect the interests of business and that either market forces would find a way to care for sick, injured, and old workers, or (for social Darwinists) the weakest, who were not meant to thrive, would wither and die.
  • “No other social movement in modern economic development is so pregnant with benefit to the public,” wrote the editor of the Journal of the American Medical Association. “At present the United States has the unenviable distinction of being the only great industrial nation without compulsory health insurance,” the Yale economist Irving Fisher pointed out in 1916.36 It would maintain that unenviable distinction for a century.
  • In California, the legislature passed a constitutional amendment providing for universal health insurance. But when it was put on the ballot for ratification, a federation of insurance companies took out an ad in the San Francisco Chronicle warning that it “would spell social ruin in the United States.” Every voter in the state received in the mail a pamphlet with a picture of the kaiser and the words “Born in Germany. Do you want it in California?” The measure was defeated. Opponents called universal health insurance “UnAmerican, Unsafe, Uneconomic, Unscientific, Unfair and Unscrupulous.”
  • “Scientific management has no place for a bird that can sing and won’t sing,” answered Taylor. “We are not . . . dealing with horses nor singing birds,” Wilson told Taylor. “We are dealing with men who are a part of society and for whose benefit society is organized.
  • Jim Crow thrived because, after the end of Reconstruction in 1877, reformers who had earlier fought for the cause of civil rights abandoned it for the sake of forging a reunion between the states and the federal government and between the North and the South. This wasn’t Wilson’s doing; this was the work of his generation, the work of the generation that came before him, and the work of the generation that would follow him, an abdication of struggle, an abandonment of justice.
  • War steered the course of American politics like a gale-force wind. The specter of slaughter undercut Progressivism, suppressed socialism, and produced anticolonialism. And, by illustrating the enduring wickedness of humanity and appearing to fulfill prophecies of apocalypse as a punishment for the moral travesty of modernism, the war fueled fundamentalism.
  • Bryan’s difficulty was that he saw no difference between Darwinism and social Darwinism, but it was social Darwinism that he attacked, the brutality of a political philosophy that seemed to believe in nothing more than the survival of the fittest, or what Bryan called “the law of hate—the merciless law by which the strong crowd out and kill the weak.”77
  • Germany was the enemy, the same Germany whose model of education had secularized American colleges and universities, which were now teaching eugenics, sometimes known as the science of human betterment, calling for the elimination from the human race of people deemed unfit to reproduce on the basis of their intelligence, criminality, or background.
  • Nor was this academic research without consequence. Beginning in 1907, with Indiana, two-thirds of American states passed forced sterilization laws.
  • In 1916, Madison Grant, the president of the Museum of Natural History in New York, who had degrees from Yale and Columbia, published The Passing of the Great Race; Or, the Racial Basis of European History, a “hereditary history” of the human race, in which he identified northern Europeans (the “blue-eyed, fair-haired peoples of the north of Europe” that he called the “Nordic race”) as genetically superior to southern Europeans (the “dark-haired, dark-eyed” people he called “the Alpine race”) and lamented the presence of “swarms of Jews” and “half-breeds.” In the United States, Grant argued, the Alpine race was overwhelming the Nordic race, threatening the American republic, since “democracy is fatal to progress when two races of unequal value live side by side.”79
  • fundamentalists were, of course, making an intellectual argument, if one that not many academics wanted to hear. In 1917, William B. Riley, who, like J. Frank Norris, had trained at the Southern Baptist Theological Seminary, published a book called The Menace of Modernism, whose attack on evolution included a broader attack on the predominance in public debate of liberal faculty housed at secular universities—and the silencing of conservative opinion.
  • The horror of the war fueled the movement, convincing many evangelicals that the growing secularization of society was responsible for this grotesque parade of inhumanity: mass slaughter. “The new theology has led Germany into barbarism,” one fundamentalist argued in 1918, “and it will lead any nation into the same demoralization.”
  • “If my re-election as President depends upon my getting into war, I don’t want to be President,” Wilson said privately. “He kept us out of war” became his campaign slogan, and when Theodore Roosevelt called that an “ignoble shirking of responsibility,” Wilson countered, “I am an American, but I do not believe that any of us loves a blustering nationality.”
  • Wilson had in fact pledged not to make the world democratic, or even to support the establishment of democratic institutions everywhere, but instead to establish the conditions of stability in which democracy was possible.
  • nearly five million were called to serve. How were they to be persuaded of the war’s cause? In a speech to new recruits, Wilson’s new secretary of state, Robert Lansing, ventured an explanation. “Were every people on earth able to express their will, there would be no wars of aggression and, if there were no wars of aggression, then there would be no wars, and lasting peace would come to this earth,” Lansing said, stringing one conditional clause after another. “The only way that a people can express their will is through democratic institutions,” Lansing went on. “Therefore, when the world is made safe for democracy . . . universal peace will be an accomplished fact.”88
  • Wilson, the political scientist, tried to earn the support of the American people with an intricate theory of the relationship between democracy and peace. It didn’t work. To recast his war message and shore up popular support, he established a propaganda department,
  • Social scientists called the effect produced by wartime propaganda “herd psychology”; the philosopher John Dewey called it the “conscription of thought.”89
  • To suppress dissent, Congress passed a Sedition Act in 1918. Not since the Alien and Sedition Acts of 1798 had Congress so brazenly defied the First Amendment. Fewer than two dozen people had been arrested under the 1798 Sedition Act. During the First World War, the Justice Department charged more than two thousand Americans with sedition and convicted half of them. Appeals that went to the Supreme Court failed.
  • “If we want real peace,” Du Bois wrote, “we must extend the democratic ideal to the yellow, brown, and black peoples.” But after the United States entered the war, Creel called thirty-one black editors and publishers to a conference in Washington and warned them about “Negro subversion.”
  • Du Bois asked black men who could not vote in the United States to give their lives to make the world “safe for democracy” and asked black people to hold off on fighting against lynchings, whose numbers kept rising.91
  • Wilson signed a tax bill, raising taxes on incomes, doubling a tax on corporate earnings, eliminating an exemption for dividend income, and introducing an estate tax and a tax on excess profits. Rates for the wealthiest Americans rose from 2 percent to 77, but most people paid no tax at all (80 percent of the revenue was drawn from the income of the wealthiest 1 percent of American families).
  • Wars, as ever, expanded the powers of the state. It rearranged the relationship between the federal government and business, establishing new forms of cooperation, oversight, and regulation that amounted to erecting a welfare state for business owners.
  • As the war drew to a close, the reckoning began. American losses were almost trivial compared to the staggering losses in European nations. Against America’s 116,000 casualties, France lost 1.6 million lives, Britain 800,000, and Germany 1.8 million. Cities across Europe lay in ashes; America was untouched. Europe, composed of seventeen countries before the war, had splintered into twenty-six, all of them deeply in debt, and chiefly to Americans.
  • Before the war, Americans owed $3.7 billion to foreigners; after the war, foreigners owed $12.6 billion to Americans. Even the terrifying influenza epidemic of 1918, which took 21 million lives worldwide, claimed the lives of only 675,000 Americans. The war left European economies in ruins, America’s thriving. In the United States, steel production rose by a quarter between 1913 and 1920; everywhere else, it fell by a third.98 The Armistice came on November
  • Wilson left a lasting legacy: his rhetoric of self-determination contributed to a wave of popular protests in the Middle East and Asia, including a revolution in Egypt in 1919; made the nation-state the goal of stateless societies; and lies behind the emergence and force of anticolonial nationalism.100
  • Thirty black men were lynched in 1917, twice as many the next year, and in 1919, seventy-six, including ten veterans, some still wearing their uniforms, having fought, some people thought, the wrong war.101
  • IN 1922, when Walter Lippmann turned thirty-two, he wrote a book called Public Opinion, in which he concluded that in a modern democracy the masses, asked to make decisions about matters far removed from their direct knowledge, had been asked to do too much. “Decisions in a modern state tend to be made by the interaction, not of Congress and the executive, but of public opinion and the executive,” he’d once observed.108 Mass democracy can’t work, Lippmann argued, because the new tools of mass persuasion—especially mass advertising—meant that a tiny minority could very easily persuade the majority to believe whatever it wished them to believe.
  • The best hope for mass democracy might have seemed to be the scrupulously and unfailingly honest reporting of news, but this, Lippmann thought, was doomed to fall short, because of the gap between facts and truth.
  • Reporters chronicle events, offering facts, but “they cannot govern society by episodes, incidents, and eruptions,” he said.109 To govern, the people need truth, sense out of the whole, but people can’t read enough in the morning paper or hear enough on the evening news to turn facts into truth when they’re driven like dray horses all day.
Javier E

How Emergent BioSolutions Put an 'Extraordinary Burden' on the U.S.'s Troubled Stockpil... - 0 views

  • Government purchases for the Strategic National Stockpile, the country’s emergency medical reserve where such equipment is kept, have largely been driven by the demands and financial interests of a handful of biotech firms that have specialized in products that address terrorist threats rather than infectious disease.
  • “Today, I think, we would not allow anthrax to take up half the budget for a guaranteed supply of vaccines,” he said, adding, “Surely after such a calamity as the last year, we should take a fresh look at stockpiles and manufacturing and preparing for the next pandemic.”
  • Under normal circumstances, Emergent’s relationship with the federal stockpile would be of little public interest — an obscure contractor in an obscure corner of the federal bureaucracy applying the standard tools of Washington, like well-connected lobbyists and campaign contributions, to create a business heavily dependent on taxpayer dollars.
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  • Security concerns, moreover, keep most information about stockpile purchases under wraps. Details about the contracts and inventory are rarely made public, and even the storage locations are secret.
  • Former Emergent employees, government contractors, members of Congress, biodefense experts and current and former officials from agencies that oversee the stockpile described a deeply dysfunctional system that contributed to the shocking shortages last year.
  • Purchases are supposed to be based on careful assessments by government officials of how best to save lives, but many have also been influenced by Emergent’s bottom line
  • The stockpile has long been the company’s biggest and most reliable customer for its anthrax vaccines, which expire and need to be replaced every few years.
  • In the two decades since the repository was created, Emergent’s aggressive tactics, broad political connections and penchant for undercutting competitors have given it remarkable sway over the government’s purchasing decisions related to the vaccines
  • While national security officials still consider anthrax a threat, it has not received specific mention since 2012 in the intelligence community’s annual public assessment of dangers facing the country, a report that has repeatedly warned of pandemics.
  • Emergent bought the license for the country’s only approved anthrax vaccine in 1998 from the State of Michigan. Over time, the price per dose the government agreed to pay Emergent increased nearly sixfold, accounting for inflation, contributing to record revenues last year that topped $1.5 billion
  • The company, whose board is stocked with former federal officials, has deployed a lobbying budget more typical of some big pharmaceutical companies
  • Competing efforts to develop a better and cheaper anthrax vaccine, for example, collapsed after Emergent outmaneuvered its rivals, the documents and interviews show.
  • preparations for an outbreak like Covid-19 almost always took a back seat to Emergent’s anthrax vaccines
  • the government approved a plan in 2015 to buy tens of millions of N95 respirators — lifesaving equipment for medical workers that has been in short supply because of Covid-19 — but the masks repeatedly lost out in the competition for funding over the years leading up to the pandemic
  • After Dr. Frieden and others in the Obama administration tried but failed to lessen Emergent’s dominance over stockpile purchases, the company’s fortunes rose under Mr. Trump, who appointed a former Emergent consultant with a background in bioterrorism to run the office that now oversees the stockpile
  • “If I could spend less on anthrax replenishment, I could buy more N95s,” Dr. Kadlec said in an interview shortly after leaving office. “I could buy more ventilators. I could buy more of other things that quite frankly I didn’t have the money to buy.”
  • And now, as some members of Congress push for larger reserves of ventilators, masks and other equipment needed in a pandemic, a trade group led in part by a top Emergent lobbyist has warned that the purchases could endanger companies focused on threats like anthrax and smallpox by drawing down limited funds.
  • Last year, as the pandemic raced across the country, the government paid Emergent $626 million for products that included vaccines to fight an entirely different threat: a terrorist attack using anthrax.
  • “I think it’s pretty clear that the benefit of the vaccine is marginal,” he said in an interview
  • “They’re very vicious in their behavior toward anybody they perceive as having a different point of view,” said Dr. Tara O’Toole, a former Homeland Security official who says she ran afoul of Emergent in 2010 after telling Congress that the nation needed a newer and better anthrax vaccine.
  • That year, the company that would become Emergent — then known as BioPort — paid Michigan $25 million to buy the license for a government-developed anthrax vaccine and an aging manufacturing plant.
  • The company opened its doors with one product, called BioThrax, and one customer, the Defense Department, which required the vaccine for service members.
  • Emergent’s anthrax vaccine was not the government’s first choice. It was more than 30 years old and plagued by manufacturing challenges and complaints about side effects. Officials instead backed a company named VaxGen, which was developing a vaccine using newer technology licensed from the military.
  • Emergent’s successful campaign against VaxGen — deploying a battalion of lobbyists, publicly attacking its rival and warning that it might cease production of its own vaccine if the government didn’t buy it — established its formidable reputation. By 2006, VaxGen had lost its contract and the government had turned to Emergent to supply BioThrax.
  • “They were totally feared by everybody,” Dr. Philip Russell, a top health official in the administration of President George W. Bush, said in an interview. He said that he clashed with Emergent when he backed VaxGen, and that his reputation came under attack, which was documented by The Times in 2006. (Dr. Russell died this January.)
  • the group of federal officials who make decisions about the stockpile and other emergency preparations — known as the Phemce, for the Public Health Emergency Medical Countermeasures Enterprise — ordered up a study. It found in 2010 that the government could not afford to devote so much of its budget to a single threat.
  • Instead, the review concluded, the government should invest more in products with multiple applications, like diagnostic tests, ventilators, reusable respirator masks and “plug and play” platforms that can rapidly develop vaccines for a range of outbreaks.
  • from 2010 through 2018, the anthrax vaccine consumed more than 40 percent of the stockpile’s budget, which averaged $560 million during those years.
  • Emergent and the government have withheld details of the stockpile contracts, including how much the company has charged for each dose of BioThrax, but executives have shared some of the missing information with investors.
  • The company in 1998 agreed to charge the government an average of about $3.35 per dose, documents show. By 2010, the price had risen to about $28, according to financial disclosures and statements by Emergent executives, and now it is about $30
  • Over the past 15 years, the company recorded a gross profit margin of about 75 percent for the vaccine, in an arrangement that one Emergent vice president called a “monopoly.”
  • Emergent’s rise is the stuff of lore in biodefense circles — a tale of savvy dealings, fortuitous timing and tough, competitive tactics.
  • One afternoon in October 2010, Wall Street investors gathered at the Millennium Broadway Hotel in Manhattan for a presentation by Mr. Burrows. He shared with them a secret number: 75 million.That was how many BioThrax doses the government had committed to stockpiling, and it was the backbone of Emergent’s thriving business. In pursuit of that goal, the government had already spent more than $900 million, and it continued to buy virtually every dose Emergent could produce. It had even awarded the company more than $100 million to expand its Michigan factory.
  • “The best approach toward anthrax is antimicrobial therapy,” Dr. Anthony S. Fauci, the government’s top infectious-disease expert, told Congress as early as 2007.
  • In an analysis published in 2007, the firm determined that giving antibiotics immediately after a large outdoor anthrax attack was likely to reduce serious illnesses by more than 80 percent. Administering the vaccine would then cut serious illnesses only by an additional 4 percent.
  • Dr. Ali S. Khan, who ran the C.D.C. office managing the stockpile until 2014, said bluntly: “We overpaid.”
  • “A bunch of people, including myself, were sitting in a room and asking what kind of attack might happen,” said Dr. Kenneth Bernard, a top biodefense adviser to Mr. Bush, recalling a meeting in the months after the 2001 attacks.
  • “And somebody said, ‘Well, I can’t imagine anyone attacking more than three cities at once,’” he said. “So we took the population of a major U.S. city and multiplied by three.”
  • A team of Homeland Security and health officials began doing just that in 2013. The group determined, in a previously undisclosed analysis, that the government could stockpile less BioThrax and still be prepared for a range of plausible attacks, according to two people involved in the assessment. Separately, government researchers concluded that two doses of BioThrax provided virtually the same protection as three.
  • the National Intelligence Council, which helped draft the assessments during Mr. Obama’s second term, said in an interview that the idea of a three-city attack affecting 25 million people was “straining credulity.”
  • “If you talk to the head of the House Intelligence Committee,” Don Elsey, Emergent’s chief financial officer, told investors in 2011, “and you say, ‘What are you most worried about?’ he’ll say, ‘Let me see: Number one, anthrax; number two, anthrax; number three, anthrax.’”
  • Emergent’s sales strategy was to address that fear by promising the federal government peace of mind with its vaccine.
  • “There’s a political element involved,” Mr. Burrows, the company’s vice president of investor relations, said at an industry conference in 2016. “I don’t have a marketing expense. I have lobbying expense.”
  • Since 2010, the company has spent an average of $3 million a year on lobbying — far outspending similarly sized biotech firms, and roughly matching the outlays of two pharmaceutical companies with annual revenues at least 17 times greater, AstraZeneca and Bristol Myers Squibb
  • In 2015, as stockpile managers questioned the large purchases of BioThrax, the spending topped $4 million
  • “They were pouring it on — how poor they were and how this was going to ruin the company, and they’d have to close down factories, and America was going to be left without anthrax vaccine,”
  • “Their revolving door is moving at 60 miles per hour,” said former Senator Claire McCaskill, a Democrat from Missouri who had questioned spending on the vaccine while in the Senate. “There is really a lot of incestuousness because it’s such a specialized field.”
  • Ms. DeLorenzo, the Emergent spokeswoman, said the lobbying was necessary because government investment “in biodefense and other public health threats has not been as strongly prioritized as it should be.”
  • Over the past 10 years, Emergent’s political action committee has spread almost $1.4 million in campaign contributions among members of both partie
  • The move followed a yearslong pattern of retaining a bipartisan lobbying corps of former agency officials, staff members and congressmen, including Pete Hoekstra of Michigan, Tom Latham of Iowa and Jim Saxton of New Jersey.
  • “You have people coming and saying, ‘There’s no market for this — nobody’s going to produce this unless you buy enough of it to keep the production line open,’” he said. “It’s an absolutely appropriate argument to make.”
  • Emergent’s campaign proved effective. Despite the 2015 recommendation by the stockpile managers, Senate overseers made clear they opposed the reduction, and the government went ahead and bought $300 million worth of BioThrax.
  • Emergent executives, meanwhile, warned that there could be job losses at the factory in Lansing, Mich. — the capital of a swing state at the center of a contentious presidential campaign between Mr. Trump and Hillary Clinton.
  • Because Emergent was the sole manufacturer of a product deemed critical to national security, the company has played what one former executive described to The Times as “the we’re-going-to-go-bankrupt card.”
  • Dr. Hatchett said the idea gave him pause. But, he explained in an interview, “if there’s only one partner that can provide a product and only one customer for that product, the customer needs the partner to survive.”
  • Just a year later, Emergent spent about $200 million in cash, and made other financial commitments, to acquire Sanofi’s smallpox vaccine and GlaxoSmithKline’s anthrax treatment, two products with established pipelines to the stockpile. The purchases expanded Emergent’s hold over the reserve.
  • Ms. DeLorenzo said the acquisitions did not suggest the company was better off than it had claimed, but Dr. Bright said he and others involved in the bailout felt used.
  • a plan five years earlier to create an emergency supply of N95 respirators was simply not funded. A team of experts had proposed buying tens of millions of the masks to fill the gap during an outbreak until domestic manufacturing could ramp up, according to five officials involved in the assessment, which has not been previously disclosed.
  • By the time the novel coronavirus emerged, the stockpile had only 12 million of the respirators. The stockpile has since set a goal of amassing 300 million.
  • Dr. Kadlec, the Trump administration official overseeing the stockpile, said he used the previous administration’s mask recommendation to raise alarms as early as 2018.
  • Dr. Annie De Groot, chief executive of the small vaccine company EpiVax, spoke about the need to break Emergent’s lock on research dollars at a biodefense forum in 2015.
  • “Politicians want to look like they’ve addressed the problem,” she said. “But we need to actually listen to the scientists.”
  • Over the last five years, Emergent has received nearly a half-billion dollars in federal research and development funding, the company said in its financial disclosures.
  • “We know ahead of time when funding opportunities are going to come out,” Barbara Solow, a senior vice president, told investors in 2017. “When we talk to the government, we know how to speak the government’s language around contracting.”
  • The company used federal money to make improvements to BioThrax, and also found a way to earn government money from a competing anthrax vaccine it had excoriated. After the demise of VaxGen in 2006, Emergent bought the company’s unfinished vaccine and in 2010 persuaded the federal government to continue paying for research on it
  • By the time the research contract was canceled in 2016, Emergent had collected about $85 million, records show. The company then shelved the vaccine. “If the U.S. government withdraws funding, we re-evaluate whether there is any business case for continuing,” Ms. DeLorenzo said.
  • For more than 30 years, the government had been encouraging the development of a BioThrax replacement. In 2002, the Institute of Medicine had concluded that an alternative based on more modern technology was “urgently needed.” By 2019, there were three leading candidates, including one made by Emergent, known as AV7909.
  • Emergent’s candidate was hardly the breakthrough the government was seeking, former health officials said. AV7909 was essentially an enhanced version of BioThrax. The competitors were using more modern technology that could produce doses more rapidly and consistently, and were promising significant cost savings for the stockpile.
  • To qualify for emergency authorization, a vaccine must be at an advanced stage of development with no approved alternatives. Emergent acknowledged in its financial disclosures that there was “considerable uncertainty” whether the new vaccine met those requirements.
  • The election of Mr. Trump as president was good news for Emergent.
  • Dr. Lurie, the senior health official in the Obama administration who had tried to scale back BioThrax purchases, was out. Mr. Trump’s pick to replace her was Dr. Kadlec, a career Air Force physician and top biodefense official in the Bush administration who was fixated on bioterrorism threats, especially anthrax, current and former officials said
  • Soon after entering the Trump administration in 2017, Dr. Kadlec took a series of actions that he characterized as streamlining a cumbersome bureaucracy but that had the effect of benefiting Emergent.
  • He assumed greater control of purchasing decisions, diminishing the authority of the Phemce, the oversight group that had proposed buying less BioThrax. And in 2018, he backed a decision to move control of the stockpile to his office in the Department of Health and Human Services and away from the C.D.C., which is based in Atlanta and prides itself on being insulated from the influence of lobbyists.
  • Dr. Frieden, the former C.D.C. director, was strongly opposed. The move, he said, “had almost as an explicit goal to give the lobbyists more say in what got purchased.”
  • That July, the government made the announcement Emergent had been banking on, committing to buying millions of doses. Separately, it said it would stop funding Emergent’s competitors.
  • The decision to side with Emergent did not surprise Dr. Khan, the former C.D.C. official overseeing the stockpile.“Again and again, we seem unable to move past an old technology that’s bankrupting the stockpile,” he said.
  • Last month, as the death toll from Covid-19 neared a half-million, Mr. Kramer, the company’s chief executive, told analysts there had been no “evidence of a slowdown or a delay or a deprioritization,” and echoed a statement he had made in April when asked whether the pandemic might interrupt Emergent’s sales to the stockpile.“It’s pretty much business as usual,” he said then.
Javier E

Opinion | Are We on the Cusp of a New Political Order? - The New York Times - 1 views

  • Gary Gerstle: A political order is a way of thinking differently about political time in America. We focus so much on two-, four- and six-year election cycles. A political order is something that lasts beyond particular elections, that refers to the ability of one political party to arrange a constellation of policies, constituencies, think tanks, candidates, individuals who come to dominate politics for extended periods of time. And their dominance becomes so strong that the opposition party feels compelled — if they still want to remain real players in American politics — it compels them to acquiesce and to come aboard the other political party’s platform.
  • They usually last 30 or 40 years. Economic crisis is usually involved in the emergence of a new order and the breakup of the old. Every political order also has not only an ideology but a vision of a good life in America.
  • What constitutes a good life? Because that becomes really important in terms of selling the virtues of that political order to a mass base, which is something that has to be won and sustained in American politics in order for a political order to exist and thrive.
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  • It was a revolutionary power that wanted to end capitalism everywhere, not just in the Soviet Union but all over Asia and Africa, North America, South America. They were gaining a lot of support in the decolonizing societies of Africa and Asia. America was not confident in the ability of its economy to have a permanent recovery from the Great Depression.
  • When I teach young people today, it’s hard for them to grasp the magnitude and the seriousness of the Cold War and how it shaped every aspect of American life. And the Soviet Union represented an existential threat to the United States.
  • What coheres to the New Deal is that the Republicans eventually submit to it. And that happens when Gen. Dwight D. Eisenhower beats Senator Robert A. Taft. So tell me a bit about the counterfactual there that you think almost happened. What led to Taft losing prominence in the Republican Party, and what might have happened if he hadn’t?
  • he was slow to get on the bandwagon in terms of the threat of China, the threat of Communist expansion, and that opened up an opportunity for another candidate, by the name of Dwight D. Eisenhower, to enter the presidential race in 1952 and to present a very different vision.
  • He was a Republican in a classical sense — small central government, devolved power to the states, suspicious of foreign entanglements — believing that America was protected by the two vast oceans and thus did not need a strong standing army, did not have to be involved in world affairs. And he was opposed to the New Deal.
  • He thought it was a form of tyranny. It was going to lead to collectivism, Soviet style. And he was poised in the 1940s to roll back the New Deal, and he was looking forward to the postwar period after the war emergency had passed. Of course, the war emergency would require a very strong state to mobilize armed forces, to mobilize the economy for the sake of fighting a world war.
  • They needed foreign markets. America wasn’t sure whether it would have them. And the capitalist class in America was scared to death by the Communist threat, and it had to be met everywhere, and America mobilizes for the Cold War to contain Communism everywhere where it appeared. And that required a standing army in quasi-peacetime of a sort that America had never experienced before, and Taft was profoundly uncomfortable with this.
  • my counterfactual is that, absent the Cold War, the New Deal, which we now regard as such a juggernaut, would be seen as a momentary blip like so many other progressive moments in American politics. And we would see it as a blip and not for what it became, which was a political order that dominated politics for 30 years.
  • So there’s been this conventional story of the New Deal era, which is that the fear of Communism, the fear of being painted as soft on Communism or soft on socialism, leads progressives to trim their sails, moderates the sort of left flank of New Dealism. You argue that that story misses what’s happening on the right.
  • the imperative of fighting the Communists caused Republicans to make even larger concessions than the Democrats did.” What were those concessions?
  • Well, the biggest concession was agreeing to an extraordinary system of progressive taxation.
  • The highest marginal tax rate in the 1940s during World War II reached 91 percent, a level that is inconceivable in America of the 21st century. Eisenhower wins the election in 1952. He has both houses of Congress. And quite extraordinarily, Eisenhower maintains the 91 percent taxation rate
  • I think what mattered to him was the Cold War. The Cold War had to be fought on two fronts: It had to be fought militarily — international containment of Communism — and that required enormous expenditures on national defense, which meant not simply a conventional army but the nuclear arms race.
  • Eisenhower understood that in order to win the ideological struggle of the Cold War — which was not simply an American-Soviet struggle, but it was a global struggle to convince all the peoples of what was then called the Third World to come with the capitalist way, to come with the American way. In order for that to happen, America had to demonstrate that it could give its ordinary citizens a good life.
  • America had to prove that it had the better system, and that meant you could not return to unrestrained American capitalism — you had to regulate it in the public interest.
  • And the other aspect of that, which he appreciated, was that in the 1950s, it was not clear whether the Soviet Union or the United States could provide a better life for its average citizen. The Soviet Union was still doing quite well in the 1950s.
  • And that meant taking money from the rich and redistributing it, narrowing the inequality between rich and poor. It meant supporting powerful labor movement and not trying to roll back the Wagner Act, which the labor movement regarded as its Magna Carta, a very strong piece of federal legislation that gave it unambiguous rights to organize and obligated employers to bargain collectively with them.
  • He felt that this had to be the way that America went. Maintenance of Social Security — really all the key New Deal reforms — he ended up maintaining because he thought this would be a critically important instrument for convincing not just ordinary Americans but people around the world that this would prove the superiority of the American way.
  • That is why he acquiesced to the New Deal order.
  • It’s a pervasive recognition among America’s business class. You say, “The fear of Communism made possible the class compromise between capital and labor that underwrote the New Deal order.”
  • And you say it wasn’t just here; this was also true in many of the social democracies in Europe after World War II. Tell me a bit about that class compromise and the role the Cold War played in it.
  • It is often said that socialism was weaker in America than it was elsewhere. And in many respects, that has been true.
  • The corollary of that is that the American business class historically has been bigger, more powerful, more unencumbered than the business classes of other nations, especially in Western Europe among America’s industrial rivals. There was no shortage of labor protest in America, but rarely could labor achieve what it wanted to achieve because the resistance was extraordinary, the resistance was legal, it was extralegal.
  • The national security argument is crucial to getting large segments of the Republican Party on board. For them, the greatest threat, both internationally and domestically, was the Communist threat. And thus, they were willing to extend themselves beyond a point where they otherwise would have gone
  • I argue that it was the fear of the Soviet Union. And what did the fear of the Soviet Union represent? The expropriation of all corporate capital in the world. That was the Communist dream. And that was deeply felt. And it was felt not simply in a global setting. It was felt within the United States itself,
  • The history of industrial relations in America was very violent. The business class in America had a reputation of being very powerful and aggressive and unwilling to share its power with its antagonists. So what was it that got them to share that power?
  • it’s really remarkable to look at how closely the R. and D. state was designed and sold, in terms of its ability to keep America ahead for national defense. It has its roots in World War II, and it continues building much off that rhetoric.
  • so there’s this interesting way, I think we think of the New Deal in terms of Social Security. We think of it in terms of some of these individual programs. But it is this thoroughgoing expansion of the government into all kinds of areas of American life. And the thing that allows the Republican Party to get on board with a lot of that is this idea that if you don’t do that, well, the Soviets are going to do it
  • And the business class felt that it was in its interests to compromise with organized labor in a way that it had never done before. That was the grand compromise. It was symbolized in a treaty in Detroit between the three automobile makers, then among the biggest corporations in America, and the United Auto Workers — the Treaty of Detroit — purchasing labor peace by granting unions, good wages, good conditions, good pensions, good health care. Absent the threat of Communism, I think that grand compromise either would not have been arrived at or it would have been scuttled much sooner than it was.
  • they’re going to have the highways, or they’re going to have the technological or scientific superiority, they’re going to make it to the moon, etc., and then America is going to be left behind.
  • The vast education bills that are going to propel the tremendous growth of American universities in the 1960s and 1970s — which you mentioned about R. and D. — has a similar propulsion
  • the scale of this would not have reached the point that it did without getting a lot of Republicans on board. And the critical argument for them was national security, and a critical event was Sputnik, when Soviet Union shocks the United States by putting into orbit a satellite before the United States had done it.
  • that is a shocking moment: Oh, my God, America is falling behind. We must bend every muscle to beating the Soviet Union in every way, and that requires tremendous investments because of satellite technology and R. and D., and also that becomes the foundation of what is going to become the I.T. industry and the I.T. revolution — also a product of the Cold War.
  • How does that order end?
  • There are three factors that pull this order apart. The first is race, the second is Vietnam, and the third is the major economic recession of the 1970s.
  • Every political order has tensions within it in the United States. And the great contradiction in the New Deal Party of Franklin Roosevelt was the treatment of African Americans. In order to have a new political economy of a big state managing private capital in the public interest, Roosevelt had to get the South on board, and the South meant the white South.
  • And the entire promise of Western Europe prosperity and American university had been premised on the flow of unending supplies of very cheap Middle Eastern oil — most of them controlled by U.S. and British oil companies. And Saudi Arabia and other oil-producing nations in the 1970s say: No, these are our resources. We will determine how much is drawn out of the ground and the prices that they will be charged.
  • That was then complicated by Vietnam, a vastly unpopular war — inaugurated and presided over by Democratic presidents who were perceived by their own constituents to not be telling the truth about this awful quagmire.
  • It also inaugurated trade-offs between funding a war and funding Johnson’s beloved Great Society. Inflation began to take off.
  • the third element was profound changes in the international political economy. One of the reasons why America was able to enter its grand compromise between capital and labor and pay labor very high wages was that America had no serious industrial competition in the world from the ’40s to the ’60s.
  • Most of the industrialized world had been destroyed. The U.S. is actively helping the recovery of Western European economies, Japan, promoting development in Southeast Asia, and in the 1970s, these economies begin to challenge American supremacy economically. The symbol of that is the rise of Japanese car manufacturers
  • Roosevelt assented to that. But this was also a time, especially in the 1940s, when African Americans were migrating in huge numbers to the North, and they were becoming a constituency in the Democratic Party. This was the first point of crisis, and the Democratic Party found itself unable to contain the racial conflicts that exploded in the 1960s.
  • The quadrupling of oil prices leads to a profound economic crisis, along with competition from European nations against the United States. And this plunges the United States into a very unexpected and profound — and long — economic crisis known as stagflation. Inflation and unemployment are going up at the same time
  • None of the textbooks say this should be happening. The tools are no longer working. And it’s in this moment of crisis, the Democratic Party — this is the third strike against it — opens up an opportunity for alternative politics, an alternative party, an alternative plan for American political economy.
  • that sort of leaves out something that is happening among Democrats at this time. There’s a movement inside of liberalism. There’s the New Deal Democratic order, but you develop this New Left, and there is a movement of liberals against big government — young liberals for reasons of self-expression, for reasons of civil rights, for reasons of this feeling that they’re being fed into a bureaucracy and giant soulless organizations and eventually into the meat grinder of Vietnam
  • older liberals who are angry about the sort of reckless growth and the poisoning of streams and the building of highways through their communities and the sort of ticky-tacky rise of these suburbs. And this predates Reagan
  • Yes, the New Left erupts on university campuses in the 1960s, and the two primary issues in the beginning are race and Vietnam. But they also quite quickly develop a critique of the established order.
  • What was called at the time the system
  • what was the system? The system was large American corporations who were no longer under control. And one reason they were no longer under control is they were being aided and abetted by a large federal state that was supposed to manage them in the public interest
  • the system was meant to identify not just the corporations who were doing ill in America, but it was meant to identify a federal state that was birthed in the optimism of the New Deal and had been corrupted. So you have this fissure within the Democratic Party itself.
  • The other element of this is this profound search for personal freedom and autonomy that was intensely felt by members of the New Left.
  • The computers were these enormous machines, mainframes, and they were seen as stultifying to human creativity. The personal computer movement was born on — as part of the New Left. Steve Jobs, Stewart Brand imagined a personal computer that would be free of the IBM mainframe, free of big corporations, big corporate power — that it would be the authentic voice of only every individual who would be using that machine.
  • It was a profound expression of a desire for personal autonomy, individuality, expressiveness — unconstrained by larger structures. This cry, or cri de coeur, came from the left. It was a very powerful part of the New Lef
  • ne can see how it might suit the purposes of a rising neoliberal order because the rising neoliberal order was also intent on deregulating, freeing individuals from the grip of large institutions and allowing them to go their own way.
  • Neoliberals believe that the best economic program is one that frees capitalism from its shackles, that allows people to truck, barter and exchange goods, that gets the government out of economic life. And the only role for government is to ensure that markets can function freely and robustly. So it runs opposite to the New Deal. If the core principle of the New Deal was: Capitalism left to its own devices would destroy itself. The core principle of neoliberalism: Remove the shackles from capitalism. That will bring us the most productive and freest world we can imagine.
  • I have a shorthand for describing the neoliberal world that was envisioned by neoliberal thinkers and brought by policymakers into existence. It’s what I sometimes call the four freedoms of neoliberalism: freedom of movement, people; freedom of goods to move across national boundaries; the free flow of information; and the free flow of capital across all boundaries.
  • In a perfect neoliberal world, people, goods, information and capital are moving freely without constraint. If we can imagine a perfect world that The Wall Street Journal wants, this would be pretty close to it.
  • I do not want to suggest for a moment that the New Left intentionally created neoliberalism. But it turned out that the cries of freedom, personal freedom, personal autonomy that were emanating from them turned out to be very conducive to the economic philosophy of neoliberalism.
  • Jimmy Carter is an heir to suspicion of excessive federal power. But I also think he’s grasping at this moment a point of transition in the American economy and a sense that government policy as set forth in the New Deal was not working as well as it should have been. I think it mattered that he was an engineer and he was doing a lot of cost-benefit analysis: What kind of yield are we getting for the bucks that we’re investing?
  • so he’s open to this fertile moment of dissent. He’s channeling new thinkers and imagining a different Democratic Party that you are correct in saying precedes Clinton by 20 years. And the key figure in this movement is a man by the name of Ralph Nader.
  • I think as I evaluate the Carter presidency, I see a man really caught in the throes of a moment of transition, able to glimpse what is coming but unable to master what is coming
  • what defines his presidency, for me, is uncertainty, vacillation and, thus, failure. He’s a classical transitional figure, more controlled by than in charge of the moment.
  • Nader is a man of the left, but he doesn’t fit in the old left or the New Left.
  • We might call him a man of the consumer left. For him, the key figure in American society was the consumer, and he wanted to champion the consumer. And his contributions — in terms of automobile safety, occupational safety, food safety — were immens
  • But he also executed a profound shift in ideology, and I’m not even sure how aware he was of the consequences of what he was generating. Because in the process of making the consumer sovereign, he deflected attention, I would say, from what was and what remains the core relationship in a capitalist economy, and that is in the realm of production and the relations between employers and employees
  • And he was reluctant, in some respects, to challenge corporate power if corporate power was serving the consumer in a good way. He anticipates, in some respects, a profound shift in antitrust policy, and the key figure in this is going to be Robert Bork in the 1980s and 1990s.
  • It had been an article of faith in American history that no corporation should be allowed to get too large, because they would inevitably exercise power in an undemocratic fashion. So antitrust meant breaking up big corporations. Under Robert Bork, the question changed. Big corporate power was OK as long as it served the consumer with cheap goods.
  • he and his supporters and his organizations deserve a lot of credit for holding the government accountable and making vast improvements in a whole host of areas — regulating the environment and other matters, regulating food — and compelling government to do the service that it does.
  • But it also distracts from understanding part of that which powers the rise of large corporations and gives them the ability to control government and capture regulatory agencies. And I think the results of his attacks on government have been ambivalent, in terms of their consequences: in some respects really accelerating the process of delivering goods to the American people and American consumers that they want but, on the other hand, contributing to an atmosphere of thinking the government can’t really do much that’s right.
  • As you move toward Reagan, certainly part of Ronald Reagan’s appeal is his anti-Communism.So how do you describe the role of the Soviet Union in this period of political time?
  • The collapse of the Soviet Union between 1989 and 1991 is one of the most stunning events, I think, of the 20th century and arguably much longer.
  • What were its consequences? First, it opened up the whole globe to capitalist penetration, to a degree that had not been available to capitalism since prior to World War I. And this generates a tremendous amount of belief and excitement and expansion and a good deal of arrogance and hubris within the capitalist citadel, which is the United States. So that’s one major consequence.
  • The second major consequence is: What does it mean for Communism no longer to exist as a threat? And what we begin to see in the 1990s is capital in America regaining the power, assurance, authority, belief in its unilateral power that it had, across the years of the Cold War, if not sacrificed, then moderated.
  • hat the Soviet Union had promised, what Communism had promised, was that private enterprise could be superseded by rational planning on the part of an enlightened set of rulers who could manage the economy in a way that benefited the masses in extraordinary ways.
  • That whole project fails, and it fails in a spectacular fashion.
  • Ronald Reagan had insisted that there was a continuum between Soviet government tyranny and what he regarded as New Deal government tyranny. They were on the same spectrum. One inevitably led to another. He and other Republicans, George H.W. Bush, the party as a whole take this as a great vindication of their core beliefs: that capitalism, which, under the New Deal, was sharply constrained, should be freed from constraint; its animal spirits allowed to soar; venture capitalists encouraged to go everywhere; investments made easy; lower taxation; let capitalists and capital drive America and the world economy, unconstrained by regulation.
  • these were the core ideas of neoliberals, which have been incubating for decades. And now suddenly these ideas seem to be vindicated. This is the moment of free market triumph.
  • it intersects in a very powerful way with the ongoing I.T. revolution, which is also bound up with the Soviet Union’s collapse. Because the Soviet Union was very hostile to the personal computer because it required a degree, at that time, of personal freedom that the Soviet Union wasn’t willing to allow what the I.T. revolution represented in the 1990s. And this is one of the reasons that Democrats get on board with it. What it represented was a belief that market perfection was now within human grasp, that there may have been a need for strong government in the past, because knowledge about markets was imperfect, it was limited, it took time for information about markets to travel, a lot of it was wrong, not enough of it was available instantaneously.
  • Well, suddenly in the 1990s, you have this dream, this vision of all economic knowledge in the world being available at your fingertips instantaneously and with a degree of depth and a range of statistics and figures that had been unimaginable, and a techno-utopianism takes hold
  • it’s the intersection of these two vectors — a sense that the collapse of the Soviet Union vindicates free market thinking and the I.T. revolution — that allows people to think market perfection is within our grasp in ways it never has been before, that pours fuel on the fire of neoliberal free market thinking.
  • You described Bill Clinton as the Dwight D. Eisenhower of neoliberalism. What do you mean by that, and what are some of the, for you, core examples?
  • When Bill Clinton was elected in 1992, no Democratic U.S. president had been elected since 1976. Sixteen years is an eternity in electoral politics in the United States. And the question becomes: Will he roll back the Reagan revolution of the 1980s — massive efforts at deregulation — or will he follow a path that Dwight Eisenhower followed in the early ’50s?
  • Clinton, in the beginning, is a little uncertain about what he is going to do. And he has some ambitious proposals in his first two years — most notably a vast program of national health insurance, which crashes spectacularly.
  • And then he gets punished for that venture severely in the 1994 congressional elections, which bring Newt Gingrich and a very right-wing group of Republicans to power — the first time that Republicans control both houses of Congress since 1952. It’s a huge achievement for the Republicans
  • Clinton reads that moment as signifying that the older Democratic Party of the New Deal, of Franklin Roosevelt and Lyndon Johnson, really had to be reworked and revamped.
  • the only way for him to win re-election, and the only way for the Democrats to hold on to national power and to regain it in Congress in 1996, is for him to acquiesce to some core Reaganite beliefs. And at the center of the Reaganite project was deregulation — which is a code word for getting the government out of economic affairs or curtailing government power.
  • Archived clip of President Bill Clinton: We know big government does not have all the answers. We know there’s not a program for every problem. We know and we have worked to give the American people a smaller, less bureaucratic government in Washington. And we have to give the American people one that lives within its means. The era of big government is over.
  • so Clinton signs off on the Telecommunications Act of 1996, which effectively deregulates the burgeoning I.T. sector of the economy, makes possible an unregulated internet. He signs off on the repeal of the Glass-Steagall Act in 1999.
  • The Glass-Steagall Act had divided investment from commercial banking and had imposed a kind of regulation on Wall Street that brought an end to the crazy speculation that had brought about the Great Depression in the first place. It was a core principle of the New Deal
  • He does not seek to revive the Fairness Doctrine, in terms of regulating public media, which had guided successive Democratic administrations: the idea that if a news outlet put out one side of a debate on a policy matter, they were obligated to give the other side equal access.
  • He becomes an advocate of deregulation and, in some respects, pushes deregulation further than Reagan himself had been able to do. And in that sense, he acquiesces to some of the core principles of the Reagan revolution rather than seeking to roll them back, and it is in that respect that I think it’s appropriate to think of him as a Democratic Eisenhower.
  • what one remembers most about those battles is how much Clinton and Newt Gingrich hated each other’s guts. And they were seen as being polar opposites.
  • Clinton, the representative of a New Left America: cosmopolitan, open to the liberation movements, looking for new ways of creating a new and diverse America, embracing sexual liberations — his embrace of gay rights was somewhat limited but still significant. Newt Gingrich, on the other hand, representing traditional Victorian America, wanting to reassert the patriarchal, heterosexual family, men at work, women in the home, religious.
  • one of the surprises, to me, in working on this book, because I remember those days very well, was the degree to which they worked together — on telecommunication, on reform of Wall Street, on welfare.
  • Clinton would claim, and his defenders would claim, that he was triangulating. He was trying to make the best of a bad deal, that popular opinion was running with free markets, was running with the Republicans. And to some extent, that was true.
  • the lesson that I draw from that moment is that one must refrain from always getting sucked into the daily battles over cultural issues.
  • “cosmopolitanism.” Something that was fresh, to me, in your book was this argument that in neoliberalism, you’re looking at more than just what we typically think of it as, which is an economic theory. You argue that there is a moral ethic that came alongside it, that is part of it. You talk about it as, at various times, cosmopolitan, individualistic. Tell me about it.
  • “Neoliberalism” is often defined, as you say, simply as being about markets and freeing them up
  • And “neoliberalism” is also defined as something that’s profoundly elitist in orientation, and it’s a device and an ideology used by elites to implant market ideology on a society in ways that deepens economic inequality and has the ability to strangle the democratic rights of the masses.
  • I also say that in America, it had a profound popular base. Reagan was an enormously successful president, and by “success,” I mean he was able to excite the imagination of majorities of American voters, and his core message was freedom.
  • half the time he meant freedom in terms of a free enterprise economy, but the other half of the time he meant freedom in terms of giving individuals the autonomy to go their own way.
  • he was not a fan of the liberation movements of the ’60s. But when Clinton becomes president in the 1990s, he has a profound connection to those liberation movements of the 1960s — to feminism, to sexual liberation, to civil rights.
  • he detects in a world in which everyone can travel to wherever they want to go. He valorizes immigrants. He valorizes diversity. These are all values that are profoundly compatible with the neoliberal vision. The opportunity to travel anywhere, to seek out personal adventure, to seek out different cultures.
  • This is a world that neoliberalism makes possible, and it’s a thrilling moment for many people who have the opportunity either to mix in the world of American cities, which have filled up with immigrants, or to travel abroad and experience other cultures.
  • A single global marketplace enables and encourages the kind of cosmopolitanism that people on the left-center side of the political spectrum in America have so deeply valued.
  • you locate the end of this era in the financial crisis of 2008 and 2009. Why?
  • The promise of neoliberalism was that it would lift all boats. There was an acknowledgment about those who were freeing the energies of the market economy that it would probably increase inequality, the distance between the rich and the poor, but that the increase in inequality wouldn’t matter because the forces of production that would be unleashed on a global scale would be so powerful and so profound that everybody would have more and everybody would have a better life.
  • And what the 2008-9 financial crisis exposed was first a lot of the market freedom that neoliberalism had unleashed had led to corrupt banking and financial practices that had brought the world to the edge of financial abyss of unimaginable proportions. We ended up skirting that abyss — but not by a lot.
  • on the other hand, it brought into view a sense of how profoundly unequal the access to power was under the neoliberal regime. And here it’s not so much the financial crash itself but the nature of what governments did to promote recovery from the financial crash.
  • The object in the U.S. and also in Europe became to save the banks first. The culprits of this financial crisis were the ones who were bailed out first. If you were an American in 2009, 2010, 2011, who had assets in the stock market, you had pretty much recovered your position by 2011, 2012. If you were not one of those fortunate Americans and you were living week to week on a paycheck, your recovery did not occur.
  • You didn’t reach pre-2008 levels until 2016, 2017, 2018, and people understood, profoundly, the inequality of recovery, and it caused them to look with a much more scrutinizing gaze at the inequalities that neoliberalism had generated and how those inequalities have become so embedded in government policy toward the rich and the poor.
  • one of the identity crises in the Republican Party — one reason the Republican Party is not held together better — is that the Soviet Union was fundamental to what made its various factions stay in place. And it was also, I think, fundamental to what kept the Republican Party, which at its core has a real anti-government streak, committed in any way to real government.
  • hen I think there’s a sort of casting about for another enemy. I think they end up finding it after 9/11, or think they have, in what they try to turn into global jihadism, and then it falls apart — both as the antagonist and as a project and just feels to me like another part of the sort of wreckage of this period that opens a way for something new.
  • That new thing, I think, is more Donald Trump than it is anything else.
  • I think it discredits what had been a core project of the Republican Party, which was to spread market freedom everywhere. When I teach the Iraq war, I tell my 20-year-old students that this is the worst foreign policy mistake in U.S. history, that it’s going to take the U.S. and the world 50 years to recover from. And it’s imbued with a neoliberal hubris that everyone in the world is simply waiting for the wonders of a market economy to unleash, to be unleashed upon them.
  • OK, if that era ended, what is being born?
  • there’s also new zones of agreement that have emerged. When I think about the way I covered politics in 2010, the legitimacy of elections could be taken for granted, and the legitimacy of the Affordable Care Act could not.
  • I think it’s useful in this moment of acute polarization to look at some of what lies beneath the polarization.
  • you’re right: On a series of issues there are intriguing conversations going on between Democrats and Republicans. China and tariffs are one area of agreement.
  • Ironically, immigration is becoming another area of agreement, regardless of who wins the election. One can imagine that the bill agreed to in the Senate late in 2023 could easily be implemented in some form.
  • here is an area of convergence on antitrust. Josh Hawley and Lena Khan seem to like each other and are finding some common ground on that. And the national security hawks in the G.O.P., people like Marco Rubio and Mitch McConnell, have converged with what we might call the industrial policy doves in the Democratic Party — people like Bernie Sanders — on the importance of reshoring critical sectors of manufacturing and on improving in dramatic ways the nation’s infrastructure.
  • we can see here a new political economy taking shape, one that breaks with the central principle of neoliberalism, which is that markets must lead and the only role for a state is to facilitate markets.
  • another element of that, which has been crucial to the ideological reorientation, is a new understanding of the relationship of free markets to democracy.
  • for the longest period of time, Americans and Europeans were willing to give China a blank check on their democracy, or on their violations of democracy, because of the belief that if market freedom and capitalist practices set down deep enough roots in China that people with economic freedom would want to add to that political freedom and that democracy would begin to flourish and that the Communist Party that rules China would either have to profoundly reform itself or see itself ushered from the political stage.
  • It’s hard to convince people now of how deeply rooted that belief was. No one in the Democratic or Republican Parties believes that anymore, and that has intensified the fear along with this “Oh, my God” sense that China is not simply producing ordinary goods. It’s producing very sophisticated goods. It’s cornering markets on electrical vehicles and batteries and solar panels that seemed unimaginable 15 or 20 years ago. And it has had the effect of profoundly shocking both parties.
  • that has completely transformed and the word “protectionism” is not being used because it’s such a negative term, but the sentiments that lie behind protectionism, which might be described more positively as fair trade, are profoundly with us and shape conversation about U.S. economic relations with China every day of the week.
  • So the change has been profound in both parties, and one of the surprises of the Biden administration, although in retrospect, it’s not so surprising, given the Biden administration’s commitment to industrial policy, is the continuity we see between Trump tariffs and Biden tariffs.
  • hey’ve also come, in many cases, to the view that we should have much more industrial policy: the sense that if you leave it to the market, China might, by using the government to foster and supercharge certain kinds of market pursuits in China, just lap us. I think it’s become the dominant view in both parties.
  • I would agree with that, although I think the Republican Party is probably more deeply split on this than the Democratic Party is. The Democratic Party arranged another kind of grand compromise between the left, represented by Bernie Sanders, and the center, represented by Joe Biden, which led to a profound commitment symbolized by Build Back Better, a $5 trillion project that was going to insert industrial policy into the heart of government economic relations in a way that marks the Biden administration as profoundly different from his Democratic predecessors, both Obama and Clinton.
  • I think the Republican Party does not have agreement on that to the same degree. And one of the interesting things to watch if Trump wins is how that internal fight in the Republican Party works itself out.
  • So the sort of ideological strain in the Republican Party that JD Vance is part of, this sort of more populist dimension of it: What they see markets and, particularly, free trade and trade with China and immigration as having violated is the strength of communities and families. They look around, and they see broken communities, hollowed-out communities.They see families where the male breadwinners have lost their jobs and lost their earning power, and so they’re not getting married, and there are divorces, and there are too many single-parent families
  • on the Democratic side, I think there’s some of the same views. There’s a lot of broken communities.
  • a huge part participant in this ideologically is climate change: the sense that markets would happily make people rich by cooking the planet. The market doesn’t know if the money is coming from, the profit is coming from, burning oil or laying down solar panels. And so once again, that some goal actually does need to be set. Markets can maybe serve our goals. They can serve our vision, but they can’t be assumed to get what we want right in the world.
  • And so the sense on both parties that you actually do need to define goals and define vision and that, ultimately, that is going to have to happen through government setting policy and making decisions — the primacy of that kind of dialogue now, the degree to which the first conversation is: What are we trying to achieve? That does feel different.
  • that speaks to the decisive nature of the election of 2016, which we will see the longer we get from it as a decisive inflection point, as really marking the end of the neoliberal order
  • It doesn’t mean that suddenly there are no more advocates of strong free markets. I think one of the questions now and one of the key questions for the Republican Party is: Can they get serious about this?
  • It requires them to have a serious program of political economy in a party that has lacked direction on political economy for quite some time.
  • You describe the sort of neoliberal era as bringing this much more cosmopolitan view of ethics, of morals and of America’s relationship with the world — a more sort of urbanist view. There’s a lot of connections between what it means to live in New York and to live in London and to live in Tokyo and to live in Hong Kong.
  • JD Vance is a good example of this — are much more skeptical of the individualistic moral structure that dominated here and that Republicans, for all the influence of the Christian right, largely left untouched.
  • it’s actually very complicated in both parties because Donald Trump is himself such a poor vehicle for a return of traditionalist virtue. But there is something happening here, a sort of questioning of not just government policy and industrial policy but: Did all this individualism work? Is a world where kids are on their smartphones all the time and families are having this much trouble — and did we get something more fundamental, almost spiritual, wrong?
  • he concern about the moral fiber of the American people is not new in the Republican Party. That goes back to Jerry Falwell, to some of the ministers who became popular in the 1990s and calling America back to moral virtue and identifying enemies of God.
  • The new element is a sense that one has to connect that concern for this kind of morality to a serious program of political economy, that it’s not enough simply to call on people to be virtuous.
  • t serious conservatives have to find a way to rebuild the economic foundation that lies at the root of so much immorality and so much despair in American life.
  • If that develops enough of a base in the Republican Party, then there becomes an opportunity to talk with Democrats about that, about family welfare, about the welfare of children, about creating institutions, both economic and social, that have the capacity to sustain communities in ways in which they have not been sustained.
  • There are some issues that run so deeply on questions of morality between Republicans and Democrats, it’s hard to see how they can find common ground. And probably the most important of these is on the question of abortion and reproductive rights. And to the extent to which JD Vance and his associates take their stand on this issue, the possibilities for developing a conversation about morality with liberals and Democrats are going to be very, very slim, indeed.
  • the things that I think would have once been framed in terms of Christianity are now framed in terms of classical virtue. There’s a sort of rediscovery of the Stoics, not the early Christians.
  • there’s something here where — obviously, efforts to remoralize America are not new — but this idea that we have gone wrong in modernity by becoming so individualistic seems to be gathering a fair amount of force.
  • My read of it is that the Christian right is just too weak and not sufficiently appealing to be the vehicle for it. And so these other aesthetic and ancient containers are being searched for, but there is some kind of pushback happening
  • I think you see a lot of interest among people in both parties around some of these tech regulations. But I think of that as sort of fundamentally moralistic.
  • he Christian right has become somewhat contaminated by its blind adherence to Trump and by its too great a willingness to plunge into politics with any messenger, no matter what moral qualities they’re exhibiting.
  • That there is a movement among conservatives to step back from that and to ground their morality in something deeper, more widespread, something that can appeal to a greater cross-section of Americans, regardless of whether they go to church or not
  • If there is a moral awakening underway that is not tied to instrumentalizing churches for strictly partisan purposes, which is one way of describing evangelicalism in the last 20, 25 years, then that would be new.
  • Sarah Igo, “The Known Citizen” — very different kind of book — “A History of Privacy in Modern America.” We’re talking about morality, we’re talking about community, and of course, social media has put the question of privacy and what constitutes privacy and what’s private and what’s public — such an urgent question in understanding America. And she gives us a wonderful hundred-year overview of how Americans in almost every generation have redefined the boundary between private and public, and I found that extremely useful in thinking about where America is at in the 21st century.
Javier E

Transcript: Ezra Klein Interviews Robinson Meyer - The New York Times - 0 views

  • Implementation matters, but it’s harder to cover because it’s happening in all parts of the country simultaneously. There isn’t a huge Republican-Democratic fight over it, so there isn’t the conflict that draws the attention to it
  • we sort of implicitly treat policy like it’s this binary one-zero condition. One, you pass a bill, and the thing is going to happen. Zero, you didn’t, and it won’t.
  • ROBINSON MEYER: You can almost divide the law up into different kind of sectors, right? You have the renewable build-out. You have EVs. You have carbon capture. You have all these other decarbonizing technologies the law is trying to encourage
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  • that’s particularly true on the I.R.A., which has to build all these things in the real world.
  • we’re trying to do industrial physical transformation at a speed and scale unheralded in American history. This is bigger than anything we have done at this speed ever.
  • The money is beginning to move out the door now, but we’re on a clock. Climate change is not like some other issues where if you don’t solve it this year, it is exactly the same to solve it next year. This is an issue where every year you don’t solve it, the amount of greenhouse gases in the atmosphere builds, warming builds, the effects compound
  • Solve, frankly, isn’t the right word there because all we can do is abate, a lot of the problems now baked in. So how is it going, and who can actually walk us through that?
  • Robinson Meyer is the founding executive editor of heatmap.news
  • why do all these numbers differ so much? How big is this thing?
  • in electric vehicles and in the effort, kind of this dual effort in the law, to both encourage Americans to buy and use electric vehicles and then also to build a domestic manufacturing base for electric vehicles.
  • on both counts, the data’s really good on electric vehicles. And that’s where we’re getting the fastest response from industry and the clearest response from industry to the law.
  • ROBINSON MEYER: Factories are getting planned. Steel’s going in the ground. The financing for those factories is locked down. It seems like they’re definitely going to happen. They’re permitted. Companies are excited about them. Large Fortune 500 automakers are confidently and with certainty planning for an electric vehicle future, and they’re building the factories to do that in the United States. They’re also building the factories to do that not just in blue states. And so to some degree, we can see the political certainty for electric vehicles going forward.
  • in other parts of the law, partially due to just vagaries of how the law is being implemented, tax credits where the fine print hasn’t worked out yet, it’s too early to say whether the law is working and how it’s going and whether it’s going to accomplish its goal
  • EZRA KLEIN: I always find this very funny in a way. The Congressional Budget Office scored it. They thought it would make about $380 billion in climate investments over a decade. So then you have all these other analyses coming out.
  • But there’s actually this huge range of outcomes in between where the thing passes, and maybe what you wanted to have happen happens. Maybe it doesn’t. Implementation is where all this rubber meets the road
  • the Rhodium Group, which is a consulting firm, they think it could be as high as $522 billion, which is a big difference. Then there’s this Goldman Sachs estimate, which the administration loves, where they say they’re projecting $1.2 trillion in incentives —
  • ROBINSON MEYER: All the numbers differ because most of the important incentives, most of the important tax credits and subsidies in the I.R.A., are uncapped. There’s no limit to how much the government might spend on them. All that matters is that some private citizen or firm or organization come to the government and is like, hey, we did this. You said you’d give us money for it. Give us the money.
  • because of that, different banks have their own energy system models, their own models of the economy. Different research groups have their own models.
  • we know it’s going to be wrong because the Congressional Budget Office is actually quite constrained in how it can predict how these tax credits are taken up. And it’s constrained by the technology that’s out there in the country right now.
  • The C.B.O. can only look at the number of electrolyzers, kind of the existing hydrogen infrastructure in the country, and be like, well, they’re probably all going to use these tax credits. And so I think they said that there would be about $5 billion of take up for the hydrogen tax credits.
  • But sometimes money gets allocated, and then costs overrun, and there delays, and you can’t get the permits, and so on, and the thing never gets built
  • the fact that the estimates are going up is to them early evidence that this is going well. There is a lot of applications. People want the tax credits. They want to build these new factories, et cetera.
  • a huge fallacy that we make in policy all the time is assuming that once money is allocated for something, you get the thing you’re allocating the money for. Noah Smith, the economics writer, likes to call this checkism, that money equals stuff.
  • EZRA KLEIN: They do not want that, and not wanting that and putting every application through a level of scrutiny high enough to try and make sure you don’t have another one
  • I don’t think people think a lot about who is cutting these checks, but a lot of it is happening in this very obscure office of the Department of Energy, the Loan Program Office, which has gone from having $40 billion in lending authority, which is already a big boost over it not existing a couple decades ago, to $400 billion in loan authority,
  • the Loan Program Office as one of the best places we have data on how this is going right now and one of the offices that’s responded fastest to the I.R.A.
  • the Loan Program Office is basically the Department of Energy’s in-house bank, and it’s kind of the closest thing we have in the US to what exists in other countries, like Germany, which is a State development bank that funds projects that are eventually going to be profitable.
  • It has existed for some time. I mean, at first, it kind of was first to play after the Recovery Act of 2009. And in fact, early in its life, it gave a very important loan to Tesla. It gave this almost bridge loan to Tesla that helped Tesla build up manufacturing capacity, and it got Tesla to where it is today.
  • EZRA KLEIN: It’s because one of the questions I have about that office and that you see in some of the coverage of them is they’re very afraid of having another Solyndra.
  • Now, depending on other numbers, including the D.O.E., it’s potentially as high as $100 billion, but that’s because the whole thing about the I.R.A. is it’s meant to encourage the build-out of this hydrogen infrastructure.
  • EZRA KLEIN: I’m never that excited when I see a government loans program turning a profit because I think that tends to mean they’re not making risky enough loans. The point of the government should be to bear quite a bit of risk —
  • And to some degree, Ford now has to compete, and US automakers are trying to catch up with Chinese EV automakers. And its firms have EV battery technology especially, but just have kind of comprehensive understanding of the EV supply chain that no other countries’ companies have
  • ROBINSON MEYER: You’re absolutely right that this is the key question. They gave this $9.2 billion loan to Ford to build these EV battery plants in Kentucky and Tennessee. It’s the largest loan in the office’s history. It actually means that the investment in these factories is going to be entirely covered by the government, which is great for Ford and great for our build-out of EVs
  • And to some degree, I should say, one of the roles of L.P.O. and one of the roles of any kind of State development bank, right, is to loan to these big factory projects that, yes, may eventually be profitable, may, in fact, assuredly be profitable, but just aren’t there yet or need financing that the private market can’t provide. That being said, they have moved very slowly, I think.
  • And they feel like they’re moving quickly. They just got out new guidelines that are supposed to streamline a lot of this. Their core programs, they just redefined and streamlined in the name of speeding them up
  • However, so far, L.P.O. has been quite slow in getting out new loans
  • I want to say that the pressure they’re under is very real. Solyndra was a disaster for the Department of Energy. Whether that was fair or not fair, there’s a real fear that if you make a couple bad loans that go bad in a big way, you will destroy the political support for this program, and the money will be clawed back, a future Republican administration will wreck the office, whatever it might be. So this is not an easy call.
  • when you tell me they just made the biggest loan in their history to Ford, I’m not saying you shouldn’t lend any money to Ford, but when I think of what is the kind of company that cannot raise money on the capital markets, the one that comes to mind is not Ford
  • They have made loans to a number of more risky companies than Ford, but in addition to speed, do you think they are taking bets on the kinds of companies that need bets? It’s a little bit hard for me to believe that it would have been impossible for Ford to figure out how to finance factorie
  • ROBINSON MEYER: Now, I guess what I would say about that is that Ford is — let’s go back to why Solyndra failed, right? Solyndra failed because Chinese solar deluged the market. Now, why did Chinese solar deluge the market? Because there’s such support of Chinese financing from the state for massive solar factories and massive scale.
  • EZRA KLEIN: — the private market can’t. So that’s the meta question I’m asking here. In your view, because you’re tracking this much closer than I am, are they too much under the shadow of Solyndra? Are they being too cautious? Are they getting money out fast enough?
  • ROBINSON MEYER: I think that’s right; that basically, if we think the US should stay competitive and stay as close as it can and not even stay competitive, but catch up with Chinese companies, it is going to require large-scale state support of manufacturing.
  • EZRA KLEIN: OK, that’s fair. I will say, in general, there’s a constant thing you find reporting on government that people in government feel like they are moving very quickly
  • EZRA KLEIN: — given the procedural work they have to go through. And they often are moving very quickly compared to what has been done in that respect before, compared to what they have to get over. They are working weekends, they are working nights, and they are still not actually moving that quickly compared to what a VC firm can do or an investment bank or someone else who doesn’t have the weight of congressional oversight committees potentially calling you in and government procurement rules and all the rest of it.
  • ROBINSON MEYER: I think that’s a theme across the government’s implementation of the I.R.A. right now, is that generally the government feels like it’s moving as fast as it can. And if you look at the Department of Treasury, they feel like we are publishing — basically, the way that most of the I.R.A. subsidies work is that they will eventually be administered by the I.R.S., but first the Department of the Treasury has to write the guidebook for all these subsidies, right?
  • the law says there’s a very general kind of “here’s thousands of dollars for EVs under this circumstance.” Someone still has to go in and write all the fine print. The Department of Treasury is doing that right now for each tax credit, and they have to do that before anyone can claim that tax credit to the I.R.S. Treasury feels like it’s moving extremely quickly. It basically feels like it’s completely at capacity with these, and it’s sequenced these so it feels like it’s getting out the most important tax credits first.
  • Private industry feels like we need certainty. It’s almost a year since the law passed, and you haven’t gotten us the domestic content bonus. You haven’t gotten us the community solar bonus. You haven’t gotten us all these things yet.
  • a theme across the government right now is that the I.R.A. passed. Agencies have to write the regulations for all these tax credits. They feel like they’re moving very quickly, and yet companies feel like they’re not moving fast enough.
  • that’s how we get to this point where we’re 311 days out from the I.R.A. passing, and you’re like, well, has it made a big difference? And I’m like, well, frankly, wind and solar developers broadly don’t feel like they have the full understanding of all the subsidies they need yet to begin making the massive investments
  • I think it’s fair to say maybe the biggest bet on that is green hydrogen, if you’re looking in the bill.
  • We think it’s going to be an important tool in industry. It may be an important tool for storing energy in the power grid. It may be an important tool for anything that needs combustion.
  • ROBINSON MEYER: Yeah, absolutely. So green hydrogen — and let’s just actually talk about hydrogen broadly as this potential tool in the decarbonization tool kit.
  • It’s a molecule. It is a very light element, and you can burn it, but it’s not a fossil fuel. And a lot of the importance of hydrogen kind of comes back to that attribute of it.
  • So when we look at sectors of the economy that are going to be quite hard to decarbonize — and that’s because there is something about fossil fuels chemically that is essential to how that sector works either because they provide combustion heat and steelmaking or because fossil fuels are actually a chemical feedstock where the molecules in the fossil fuel are going into the product or because fossil fuels are so energy dense that you can carry a lot of energy while actually not carrying that much mass — any of those places, that’s where we look at hydrogen as going.
  • green hydrogen is something new, and the size of the bet is huge. So can you talk about first just what is green hydrogen? Because my understanding of it is spotty.
  • The I.R.A. is extremely generous — like extremely, extremely generous — in its hydrogen subsidies
  • The first is for what’s called blue hydrogen, which is hydrogen made from natural gas, where we then capture the carbon dioxide that was released from that process and pump it back into the ground. That’s one thing that’s subsidized. It’s basically subsidized as part of this broader set of packages targeted at carbon capture
  • green hydrogen, which is where we take water, use electrolyzers on it, basically zap it apart, take the hydrogen from the water, and then use that as a fue
  • The I.R.A. subsidies for green hydrogen specifically, which is the one with water and electricity, are so generous that relatively immediately, it’s going to have a negative cost to make green hydrogen. It will cost less than $0 to make green hydrogen. The government’s going to fully cover the cost of producing it.
  • That is intentional because what needs to happen now is that green hydrogen moves into places where we’re using natural gas, other places in the industrial economy, and it needs to be price competitive with those things, with natural gas, for instance. And so as it kind of is transported, it’s going to cost money
  • As you make the investment to replace the technology, it’s going to cost money. And so as the hydrogen moves through the system, it’s going to wind up being price competitive with natural gas, but the subsidies in the bill are so generous that hydrogen will cost less than $0 to make a kilogram of it
  • There seems to be a sense that hydrogen, green hydrogen, is something we sort of know how to make, but we don’t know how to make it cost competitive yet. We don’t know how to infuse it into all the processes that we need to be infused into. And so a place where the I.R.A. is trying to create a reality that does not yet exist is a reality where green hydrogen is widely used, we have to know how to use it, et cetera.
  • And they just seem to think we don’t. And so you need all these factories. You need all this innovation. Like, they have to create a whole innovation and supply chain almost from scratch. Is that right?
  • ROBINSON MEYER: That’s exactly right. There’s a great Department of Energy report that I would actually recommend anyone interested in this read called “The Liftoff Report for Clean Hydrogen.” They made it for a few other technologies. It’s a hundred-page book that’s basically how the D.O.E. believes we’re going to build out a clean hydrogen economy.
  • And, of course, that is policy in its own right because the D.O.E. is saying, here is the years we’re going to invest to have certain infrastructure come online. Here’s what we think we need. That’s kind of a signal to industry that everyone should plan around those years as well.
  • It’s a great book. It’s like the best piece of industrial policy I’ve actually seen from the government at all. But one of the points it makes is that you’re going to make green hydrogen. You’re then going to need to move it. You’re going to need to move it in a pipeline or maybe a truck or maybe in storage tanks that you then cart around.
  • Once it gets to a facility that uses green hydrogen, you’re going to need to store some green hydrogen there in storage tanks on site because you basically need kind of a backup supply in case your main supply fails. All of those things are going to add cost to hydrogen. And not only are they going to add cost, we don’t really know how to do them. We have very few pipelines that are hydrogen ready.
  • All of that investment needs to happen as a result to make the green hydrogen economy come alive. And why it’s so lavishly subsidized is to kind of fund all that downstream investment that’s eventually going to make the economy come true.
  • But a lot of what has to happen here, including once the money is given out, is that things we do know how to build get built, and they get built really fast, and they get built at this crazy scale.
  • So I’ve been reading this paper on what they call “The Greens’ Dilemma” by J.B. Ruhl and James Salzman, who also wrote this paper called “Old Green Laws, New Green Deal,” or something like that. And I think they get at the scale problem here really well.
  • “The largest solar facility currently online in the US is capable of generating 585 megawatts. To meet even a middle-road renewable energy scenario would require bringing online two new 400-megawatt solar power facilities, each taking up at least 2,000 acres of land every week for the next 30 years.”
  • And that’s just solar. We’re not talking wind there. We’re not talking any of the other stuff we’ve discussed here, transmission lines. Can we do that? Do we have that capacity?
  • ROBINSON MEYER: No, we do not. We absolutely do not. I think we’re going to build a ton of wind and solar. We do not right now have the system set up to use that much land to build that much new solar and wind by the time that we need to build it. I think it is partially because of permitting laws, and I think it’s also partially because right now there is no master plan
  • There’s no overarching strategic entity in the government that’s saying, how do we get from all these subsidies in the I.R.A. to net zero? What is our actual plan to get from where we are right now to where we’re emitting zero carbon as an economy? And without that function, no project is essential. No activity that we do absolutely needs to happen, and so therefore everything just kind of proceeds along at a convenient pace.
  • given the scale of what’s being attempted here, you might think that something the I.R.A. does is to have some entity in the government, as you’re saying, say, OK, we need this many solar farms. This is where we think we should put them. Let’s find some people to build them, or let’s build them ourselves.
  • what it actually does is there’s an office somewhere waiting for private companies to send in an application for a tax credit for solar that they say they’re going to build, and then we hope they build it
  • it’s an almost entirely passive process on the part of the government. Entirely would be going too far because I do think they talk to people, and they’re having conversations
  • the builder applies, not the government plans. Is that accurate?
  • ROBINSON MEYER: That’s correct. Yes.
  • ROBINSON MEYER: I think here’s what I would say, and this gets back to what do we want the I.R.A. to do and what are our expectations for the I.R.A
  • If the I.R.A. exists to build out a ton of green capacity and shift the political economy of the country toward being less dominated by fossil fuels and more dominated by the clean energy industry, frankly, then it is working
  • If the I.R.A. is meant to get us all the way to net zero, then it is not capable of that.
  • in 2022, right, we had no way to see how we were going to reduce emissions. We did not know if we were going to get a climate bill at all. Now, we have this really aggressive climate bill, and we’re like, oh, is this going to get us to net zero?
  • But getting to net zero was not even a possibility in 2022.
  • The issue is that the I.R.A. requires, ultimately, private actors to come forward and do these things. And as more and more renewables get onto the grid, almost mechanically, there’s going to be less interest in bringing the final pieces of decarbonized electricity infrastructure onto the grid as well.
  • EZRA KLEIN: Because the first things that get applied for are the ones that are more obviously profitable
  • The issue is when you talk to solar developers, they don’t see it like, “Am I going to make a ton of money, yes or no?” They see it like they have a capital stack, and they have certain incentives and certain ways to make money based off certain things they can do. And as more and more solar gets on the grid, building solar at all becomes less profitable
  • also, just generally, there’s less people willing to buy the solar.
  • as we get closer to a zero-carbon grid, there is this risk that basically less and less gets built because it will become less and less profitable
  • EZRA KLEIN: Let’s call that the last 20 percent risk
  • EZRA KLEIN: — or the last 40 percent. I mean, you can probably attach different numbers to that
  • ROBINSON MEYER: Permitting is the primary thing that is going to hold back any construction basically, especially out West,
  • right now permitting fights, the process under the National Environmental Policy Act just at the federal level, can take 4.5 years
  • let’s say every single project we need to do was applied for today, which is not true — those projects have not yet been applied for — they would be approved under the current permitting schedule in 2027.
  • ROBINSON MEYER: That’s before they get built.
  • Basically nobody on the left talked about permitting five years ago. I don’t want to say literally nobody, but you weren’t hearing it, including in the climate discussion.
  • people have moved to saying we do not have the laws, right, the permitting laws, the procurement laws to do this at the speed we’re promising, and we need to fix that. And then what you’re seeing them propose is kind of tweak oriented,
  • Permitting reform could mean a lot of different things, and Democrats and Republicans have different ideas about what it could mean. Environmental groups, within themselves, have different ideas about what it could mean.
  • for many environmental groups, the permitting process is their main tool. It is how they do the good that they see themselves doing in the world. They use the permitting process to slow down fossil fuel projects, to slow down projects that they see as harming local communities or the local environment.
  • ROBINSON MEYER: So we talk about the National Environmental Policy Act or NEPA. Let’s just start calling it NEPA. We talk about the NEPA process
  • NEPA requires the government basically study any environmental impact from a project or from a decision or from a big rule that could occur.
  • Any giant project in the United States goes through this NEPA process. The federal government studies what the environmental impact of the project will be. Then it makes a decision about whether to approve the project. That decision has nothing to do with the study. Now, notionally, the study is supposed to inform the project.
  • the decision the federal government makes, the actual “can you build this, yes or no,” legally has no connection to the study. But it must conduct the study in order to make that decision.
  • that permitting reform is so tough for the Democratic coalition specifically is that this process of forcing the government to amend its studies of the environmental impact of various decisions is the main tool that environmental litigation groups like Earthjustice use to slow down fossil fuel projects and use to slow down large-scale chemical or industrial projects that they don’t think should happen.
  • when we talk about making this program faster, and when we talk about making it more immune to litigation, they see it as we’re going to take away their main tools to fight fossil fuel infrastructure
  • why there’s this gap between rhetoric and what’s actually being proposed is that the same tool that is slowing down the green build-out is also what’s slowing down the fossil fuel build-out
  • ROBINSON MEYER: They’re the classic conflict here between the environmental movement classic, let’s call it, which was “think globally, act locally,” which said “we’re going to do everything we can to preserve the local environment,” and what the environmental movement and the climate movement, let’s say, needs to do today, which is think globally, act with an eye to what we need globally as well, which is, in some cases, maybe welcome projects that may slightly reduce local environmental quality or may seem to reduce local environmental quality in the name of a decarbonized world.
  • Because if we fill the atmosphere with carbon, nobody’s going to get a good environment.
  • Michael Gerrard, who is professor at Columbia Law School. He’s a founder of the Sabin Center for Climate Change Law there. It’s called “A Time for Triage,” and he has this sort of interesting argument that the environmental movement in general, in his view, is engaged in something he calls trade-off denial.
  • his view and the view of some people is that, look, the climate crisis is so bad that we just have to make those choices. We have to do things we would not have wanted to do to preserve something like the climate in which not just human civilization, but this sort of animal ecosystem, has emerged. But that’s hard, and who gets to decide which trade-offs to make?
  • what you’re not really seeing — not really, I would say, from the administration, even though they have some principles now; not really from California, though Gavin Newsom has a set of early things — is “this is what we think we need to make the I.R.A. happen on time, and this is how we’re going to decide what is a kind of project that gets this speedway through,” w
  • there’s a failure on the part of, let’s say, the environmental coalition writ large to have the courage to have this conversation and to sit down at a table and be like, “OK, we know that certain projects aren’t happening fast enough. We know that we need to build out faster. What could we actually do to the laws to be able to construct things faster and to meet our net-zero targets and to let the I.R.A. kind achieve what it could achieve?”
  • part of the issue is that we’re in this environment where Democrats control the Senate, Republicans control the House, and it feels very unlikely that you could just get “we are going to accelerate projects, but only those that are good for climate change,” into the law given that Republicans control the House.
  • part of the progressive fear here is that the right solutions must recognize climate change. Progressives are very skeptical that there are reforms that are neutral on the existence of climate change and whether we need to build faster to meet those demands that can pass through a Republican-controlled House.
  • one of the implications of that piece was it was maybe a huge mistake for progressives not to have figured out what they wanted here and could accept here, back when the negotiating partner was Joe Manchin.
  • Manchin’s bill is basically a set of moderate NEPA reforms and transmission reforms. Democrats, progressives refuse to move on it. Now, I do want to be fair here because I think Democrats absolutely should have seized on that opportunity, because it was the only moment when — we could tell already that Democrats — I mean, Democrats actually, by that moment, had lost the House.
  • I do want to be fair here that Manchin’s own account of what happened with this bill is that Senate Republicans killed it and that once McConnell failed to negotiate on the bill in December, Manchin’s bill was dead.
  • EZRA KLEIN: It died in both places.ROBINSON MEYER: It died in both places. I think that’s right.
  • Republicans already knew they were going to get the House, too, so they had less incentive to play along. Probably the time for this was October.
  • EZRA KLEIN: But it wasn’t like Democrats were trying to get this one done.
  • EZRA KLEIN: To your point about this was all coming down to the wire, Manchin could have let the I.R.A. pass many months before this, and they would have had more time to negotiate together, right? The fact that it was associated with Manchin in the way it was was also what made it toxic to progressives, who didn’t want to be held up by him anymore.
  • What becomes clear by the winter of this year, February, March of this year, is that as Democrats and Republicans begin to talk through this debt-ceiling process where, again, permitting was not the main focus. It was the federal budget. It was an entirely separate political process, basically.
  • EZRA KLEIN: I would say the core weirdness of the debt-ceiling fight was there was no main focus to it.
  • EZRA KLEIN: It wasn’t like past ones where it was about the debt. Republicans did some stuff to cut spending. They also wanted to cut spending on the I.R.S., which would increase the debt, right? It was a total mishmash of stuff happening in there.
  • That alchemy goes into the final debt-ceiling negotiations, which are between principals in Congress and the White House, and what we get is a set of basically the NEPA reforms in Joe Manchin’s bill from last year and the Mountain Valley pipeline, the thing that environmentalists were focused on blocking, and effectively no transmission reforms.
  • the set of NEPA reforms that were just enacted, that are now in the law, include — basically, the word reasonable has been inserted many times into NEPA. [LAUGHS] So the law, instead of saying the government has to study all environmental impacts, now it has to study reasonable environmental impacts.
  • this is a kind of climate win — has to study the environmental impacts that could result from not doing a project. The kind of average NEPA environmental impact study today is 500 pages and takes 4.5 years to produce. Under the law now, the government is supposed to hit a page limit of 150 to 300 pages.
  • there’s a study that’s very well cited by progressives from three professors in Utah who basically say, well, when you look at the National Forest Service, and you look at this 40,000 NEPA decisions, what mostly holds up these NEPA decisions is not like, oh, there’s too many requirements or they had to study too many things that don’t matter. It’s just there wasn’t enough staff and that staffing is primarily the big impediment. And so on the one hand, I think that’s probably accurate in that these are, in some cases — the beast has been starved, and these are very poorly staffed departments
  • The main progressive demand was just “we must staff it better.”
  • But if it’s taking you this much staffing and that much time to say something doesn’t apply to you, maybe you have a process problem —ROBINSON MEYER: Yes.EZRA KLEIN: — and you shouldn’t just throw endless resources at a broken process, which brings me — because, again, you can fall into this and never get out — I think, to the bigger critique her
  • these bills are almost symbolic because there’s so much else happening, and it’s really the way all this interlocks and the number of possible choke points, that if you touch one of them or even you streamline one of them, it doesn’t necessarily get you that f
  • “All told, over 60 federal permitting programs operate in the infrastructure approval regime, and that is just the federal system. State and local approvals and impact assessments could also apply to any project.”
  • their view is that under this system, it’s simply not possible to build the amount of decarbonization infrastructure we need at the pace we need it; that no amount of streamlining NEPA or streamlining, in California, CEQA will get you there; that we basically have been operating under what they call an environmental grand bargain dating back to the ’70s, where we built all of these processes to slow things down and to clean up the air and clean up the water.
  • we accepted this trade-off of slower building, quite a bit slower building, for a cleaner environment. And that was a good trade. It was addressing the problems of that era
  • now we have the problems of this era, which is we need to unbelievably, rapidly build out decarbonization infrastructure to keep the climate from warming more than we can handle and that we just don’t have a legal regime or anything.
  • You would need to do a whole new grand bargain for this era. And I’ve not seen that many people say that, but it seems true to me
  • the role that America had played in the global economy in the ’50s and ’60s where we had a ton of manufacturing, where we were kind of the factory to a world rebuilding from World War II, was no longer tenable and that, also, we wanted to focus on more of these kind of high-wage, what we would now call knowledge economy jobs.That was a large economic transition happening in the ’70s and ’80s, and it dovetailed really nicely with the environmental grand bargain.
  • At some point, the I.R.A. recognizes that that environmental grand bargain is no longer operative, right, because it says, we’re going to build all this big fiscal fixed infrastructure in the United States, we’re going to become a manufacturing giant again, but there has not been a recognition among either party of what exactly that will mean and what will be required to have it take hold.
  • It must require a form of on-the-ground, inside-the-fenceline, “at the site of the power plant” pollution control technology. The only way to do that, really, is by requiring carbon capture and requiring the large construction of major industrial infrastructure at many, many coal plants and natural gas plants around the country in order to capture carbon so it doesn’t enter the atmosphere, and so we don’t contribute to climate change. That is what the Supreme Court has ruled. Until that body changes, that is going to be the law.
  • So the E.P.A. has now, last month, proposed a new rule under the Clean Air Act that is going to require coal plants and some natural gas plants to install carbon capture technology to do basically what the Supreme Court has all but kind of required the E.P.A. to do
  • the E.P.A. has to demonstrate, in order to kind of make this rule the law and in order to make this rule pass muster with the Supreme Court, that this is tenable, that this is the best available and technologically feasible option
  • that means you actually have to allow carbon capture facilities to get built and you have to create a legal process that will allow carbon capture facilities to get built. And that means you need to be able to tell a power plant operator that if they capture carbon, there’s a way they can inject it back into the ground, the thing that they’re supposed to do with it.
  • Well, E.P.A. simultaneously has only approved the kind of well that you need to inject carbon that you’ve captured from a coal factory or a natural gas line back into the ground. It’s called a Class 6 well. The E.P.A. has only ever approved two Class 6 wells. It takes years for the E.P.A. to approve a Class 6 well.
  • And environmental justice groups really, really oppose these Class 6 wells because they see any carbon capture as an effort to extend the life of the fossil fuel infrastructure
  • The issue here is that it seems like C.C.S., carbon capture, is going to be essential to how the U.S. decarbonizes. Legally, we have no other choice because of the constraints the Supreme Court has placed on the E.P.A.. At the same time, environmental justice groups, and big green groups to some extent, oppose building out any C.C.S.
  • to be fair to them, right, they would say there are other ways to decarbonize. That may not be the way we’ve chosen because the politics weren’t there for it, but there are a lot of these groups that believe you could have 100 percent renewables, do not use all that much carbon capture, right? They would have liked to see a different decarbonization path taken too. I’m not sure that path is realistic.
  • what you do see are environmental groups opposing making it possible to build C.C.S. anywhere in the country at all.
  • EZRA KLEIN: The only point I’m making here is I think this is where you see a compromise a lot of them didn’t want to make —ROBINSON MEYER: Exactly, yeah.EZRA KLEIN: — which is a decarbonization strategy that actually does extend the life cycle of a lot of fossil fuel infrastructure using carbon capture. And because they never bought onto it, they’re still using the pathway they have to try to block it. The problem is that’s part of the path that’s now been chosen. So if you block it, you just don’t decarbonize. It’s not like you get the 100 percent renewable strategy.
  • ROBINSON MEYER: Exactly. The bargain that will emerge from that set of actions and that set of coalitional trade-offs is we will simply keep running this, and we will not cap it.
  • What could be possible is that progressives and Democrats and the E.P.A. turns around and says, “Oh, that’s fine. You can do C.C.S. You just have to cap every single stationary source in the country.” Like, “You want to do C.C.S.? We totally agree. Essential. You must put CSS infrastructure on every power plant, on every factory that burns fossil fuels, on everything.”
  • If progressives were to do that and were to get it into the law — and there’s nothing the Supreme Court has said, by the way, that would limit progressives from doing that — the upshot would be we shut down a ton more stationary sources and a ton more petrochemical refineries and these bad facilities that groups don’t want than we would under the current plan.
  • what is effectively going to happen is that way more factories and power plants stay open and uncapped than would be otherwise.
  • EZRA KLEIN: So Republican-controlled states are just on track to get a lot more of it. So the Rocky Mountain Institute estimates that red states will get $623 billion in investments by 2030 compared to $354 billion for blue states.
  • why are red states getting so much more of this money?
  • ROBINSON MEYER: I think there’s two reasons. I think, first of all, red states have been more enthusiastic about getting the money. They’re the ones giving away the tax credits. They have a business-friendly environment. And ultimately, the way many, many of these red-state governors see it is that these are just businesses.
  • I think the other thing is that these states, many of them, are right-to-work states. And so they might pay their workers less. They certainly face much less risk financially from a unionization campaign in their state.
  • regardless of the I.R.A., that’s where manufacturing and industrial investment goes in the first place. And that’s where it’s been going for 20 years because of the set of business-friendly and local subsidies and right-to-work policies.
  • I think the administration would say, we want this to be a big union-led effort. We want it to go to the Great Lakes states that are our political firewall.
  • and it would go to red states, because that’s where private industry has been locating since the ’70s and ’80s, and it would go to the Southeast, right, and the Sunbelt, and that that wouldn’t be so bad because then you would get a dynamic where red-state senators, red-state representatives, red-state governors would want to support the transition further and would certainly not support the repeal of the I.R.A. provisions and the repeal of climate provisions, and that you’d get this kind of nice vortex of the investment goes to red states, red states feel less antagonistic toward climate policies, more investment goes to red states. Red-state governors might even begin to support environmental regulation because that basically locks in benefits and advantages to the companies located in their states already.
  • I think what you see is that Republicans are increasingly warming to EV investment, and it’s actually building out renewables and actually building out clean electricity generation, where you see them fighting harder.
  • The other way that permitting matters — and this gets into the broader reason why private investment was generally going to red states and generally going to the Sunbelt — is that the Sunbelt states — Georgia, Texas — it’s easier to be there as a company because housing costs are lower and because the cost of living is lower in those states.
  • it’s also partially because the Sunbelt and the Southeast, it was like the last part of the country to develop, frankly, and there’s just a ton more land around all the cities, and so you can get away with the sprawling suburban growth model in those citie
  • It’s just cheaper to keep building suburbs there.
  • EZRA KLEIN: So how are you seeing the fights over these rare-earth metals and the effort to build a safe and, if not domestic, kind of friend-shored supply chain there?
  • Are we going to be able to source some of these minerals from the U.S.? That process seems to be proceeding but going slowly. There are some minerals we’re not going to be able to get from the United States at all and are going to have to get from our allies and partners across the world.
  • The kind of open question there is what exactly is the bargain we’re going to strike with countries that have these critical minerals, and will it be fair to those countries?
  • it isn’t to say that I think the I.R.A. on net is going to be bad for other countries. I just think we haven’t really figured out what deal and even what mechanisms we can use across the government to strike deals with other countries to mine the minerals in those countries while being fair and just and creating the kind of economic arrangement that those countries want.
  • , let’s say we get the minerals. Let’s say we learn how to refine them. There is many parts of the battery and many parts of EVs and many, many subcomponents in these green systems that there’s not as strong incentive to produce in the U.S.
  • at the same time, there’s a ton of technology. One answer to that might be to say, OK, well, what the federal government should do is just make it illegal for any of these battery makers or any of these EV companies to work with Chinese companies, so then we’ll definitely establish this parallel supply chain. We’ll learn how to make cathodes and anodes. We’ll figure it out
  • The issue is that there’s technology on the frontier that only Chinese companies have, and U.S. automakers need to work with those companies in order to be able to compete with them eventually.
  • EZRA KLEIN: How much easier would it be to achieve the I.R.A.’s goals if America’s relationship with China was more like its relationship with Germany?
  • ROBINSON MEYER: It would be significantly easier, and I think we’d view this entire challenge very differently, because China, as you said, not only is a leader in renewable energy. It actually made a lot of the important technological gains over the past 15 years to reducing the cost of solar and wind. It really did play a huge role on the supply side of reducing the cost of these technologies.
  • If we could approach that, if China were like Germany, if China were like Japan, and we could say, “Oh, this is great. China’s just going to make all these things. Our friend, China, is just going to make all these technologies, and we’re going to import them.
  • So it refines 75 percent of the polysilicon that you need for solar, but the machines that do the refining, 99 percent of them are made in China. I think it would be reckless for the U.S. to kind of rely on a single country and for the world to rely on a single country to produce the technologies that we need for decarbonization and unwise, regardless of our relationship with that country.
  • We want to geographically diversify the supply chain more, but it would be significantly easier if we did not have to also factor into this the possibility that the US is going to need to have an entirely separate supply chain to make use of for EVs, solar panels, wind turbines, batteries potentially in the near-term future.
  • , what are three other books they should read?
  • The first book is called “The End of the World” by Peter Brannen. It’s a book that’s a history of mass extinctions, the Earth’s five mass extinctions, and, actually, why he doesn’t think we’re currently in a mass extinction or why, at least, things would need to go just as bad as they are right now for thousands and thousands of years for us to be in basically the sixth extinction.
  • The book’s amazing for two reasons. The first is that it is the first that really got me to understand deep time.
  • he explains how one kind of triggered the next one. It is also an amazing book for understanding the centrality of carbon to Earth’s geological history going as far back as, basically, we can track.
  • “Climate Shock” by Gernot Wagner and Marty Weitzman. It’s about the economics of climate change
  • Marty Weitzman, who I think, until recently, was kind of the also-ran important economist of climate change. Nordhaus was the famous economist. He was the one who got all attention. He’s the one who won the Nobel.
  • He focuses on risk and that climate change is specifically bad because it will damage the environment, because it will make our lives worse, but it’s really specifically bad because we don’t know how bad it will be
  • it imposes all these huge, high end-tail risks and that blocking those tail risks is actually the main thing we want to do with climate policy.
  • That is I think, in some ways, what has become the U.S. approach to climate change and, to some degree, to the underlying economic thinking that drives even the I.R.A., where we want to just cut off these high-end mega warming scenarios. And this is a fantastic explanation of that particular way of thinking and of how to apply that way of thinking to climate change and also to geoengineerin
  • The third book, a little controversial, is called “Shorting the Grid” by Meredith Angwin
  • her argument is basically that electricity markets are not the right structure to organize our electricity system, and because we have chosen markets as a structured, organized electricity system in many states, we’re giving preferential treatment to natural gas and renewables, two fuels that I think climate activists may feel very different ways about, instead of coal, which she does think we should phase out, and, really, nuclear
  • By making it easier for renewables and natural gas to kind of accept these side payments, we made them much more profitable and therefore encouraged people to build more of them and therefore underinvested in the forms of generation, such as nuclear, that actually make most of their money by selling electrons to the grid, where they go to people’s homes.
Javier E

Harvey shows the anti-government crowd's utter hypocrisy - The Washington Post - 0 views

  • The anti-government crowd, however, seems indifferent to actual abuse of power, one key reason to keep government limited and transparent.
  • These same anti-government figures couldn’t care less about President Trump’s conflicts of interest and money-making off the federal government, ludicrous nepotism that invests huge power in unqualified and ignorant presidential family members, abusive Immigration and Customs Enforcement raids that tear apart families, or ex-sheriff Joe Arpaio’s vicious racism and violation of civil liberties.
  • In sum, they hate the functioning, responsible and professional part of government while they embrace the authoritarian, abusive, erratic Trumpism we now see. Somehow the “rule of law” and of predictable government has gone out of fashion with the right wing.
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  • Part of the anomaly is surely attributable to jaw-dropping lack of empathy for people who do not look like them (e.g. poor immigrants, minorities) and to rank partisanship (President Barack Obama’s support for Solyndra is bad, but Big Ag subsidies are fine). The anti-government syndrome is fueled by a refusal to look at the particular beneficiaries of government help and the obsession with generalized, usually grossly inaccurate data. Illegal immigrants are stealing our jobs! (They’re not.)
  • When something like Harvey comes along, however, the light ever so briefly goes on (sometimes) for the anti-government types. Suffering is visible, the need impossible to ignore. And when the tragedy is in deep-red Texas, not deep-blue New Jersey or New Orleans, suddenly the wonders of government become clear to them.
  • (Then-Rep. Mick Mulvaney, who now heads the Office of Management and Budget, opposed a large Sandy relief package without offsets, while both Texas senators tried to block the Sandy relief bill on the grounds that it was extraneous spending.) The crew that cheered Trump’s proposed 11 percent cut to FEMA (government is bad!) will support billions of dollars in Harvey relief (my people are suffering!).
  • Empathy requires one to put oneself in others’ shoes — to understand their needs and concerns that do not affect you. That seems to be beyond their abilities. It seems the essence of their philosophy boils down to: Government is good only when it’s abusing people you don’t like and when it’s helping your own.
Javier E

How China's buses shaped the world's EV revolution - BBC Future - 0 views

  • After around two decades of government support, China now boasts the world's largest market for e-buses, making up more than 95% of global stock. At the end of 2022, China's Ministry of Transport announced that more than three-quarters (77% or 542,600) of all urban buses in the country were "new energy vehicles", a term used by the Chinese government to include pure electric, plug-in hybrids, and fuel cell vehicles powered by alternative fuels such as hydrogen and methanol. In 2022, around 84% of the new energy bus fleet was pure electric.
  • . In 2015, 78% of Chinese urban buses still used diesel or gas, according to the World Resources Institute (WRI). The NGO now estimates that if China follows through on its stated decarbonisation policies, its road transport emissions will peak before 2030.
  • China is also home to some of the world's biggest electric bus manufacturers, such as Yutong, which has been raking up orders across China, Europe and Latin America.
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  • "China has really been at the forefront of success in conversion of all vehicles to electric vehicles, especially buses," says Heather Thompson, chief executive officer of the Institute for Transportation and Development Policy (ITDP), a non-profit focusing on sustainable transport solutions. "The rest of the world is trying to do the same, but I think China is really out ahead."
  • At the time of China's 2001 entry into the World Trade Organisation, the international automotive industry was dominated by European, US and Japanese brands. These companies had spent decades perfecting internal combustion engine technology. To compete, Beijing decided to find a new track for its auto industry: making cars that did not use conventional engines.
  • That same year, the central government launched the so-called "863 plan" for EV research and development. There were numerous practical challenges, however, in the way of mass electrification. Not many manufacturers were making new energy vehicles, buyers were few and there was a lack of charging infrastructure in existence. The answer? Buses.
  • "The Chinese government adopted a very smart strategy," says Liu Daizong, ITDP's East Asia director. "They realised quite early on that they should drive [the EV industry] through electric buses," he notes, since their public service status meant Beijing "could have a strong hand on their electrification".
  • "Bus routes were fixed. This means when an electric bus finished a round, it could return to the depot to recharge," explains Xue Lulu, a mobility manager at the World Resources Institute (WRI) China. The typical daily mileage of a Chinese bus ­– 200km (120 miles) – was a realistic range for battery makers to meet.
  • The following year, the country began its large-scale rollout of new energy buses, with the "Ten Cities and Thousand Vehicles" programme. Over three years, the programme aimed to provide 10 cities with financial subsidies to promote 1,000 public-sector new energy vehicles in each, annually. Its goal was to have 10% new energy vehicles in the country by the end of 2012.
  • Strong policy support from both central and regional governments "gave manufacturers confidence in setting up production lines and stepping up research efforts," says Liu.
  • Together, these strong and consistent government signals encouraged Chinese manufacturers to expand their EV production capacity, bring down costs and improve their technologies. One such company was Build Your Dream, better known as BYD. The Shenzhen-based firm, the world's largest EV maker in 2022, ballooned its business a decade before by supplying electric buses and taxis for China's EV pilot cities.
  • "Back then, most buses used diesel, which was a main source of nitrogen oxides (NOx) emissions," says Xue, referring to the air pollution that smothered Beijing and other Chinese cities in the early 2010s. Yet in 2013, a new plan from central government cited tackling air pollution as one of the reasons for rolling out EVs.
  • This addition proved to be critical: it not only connected EV uptake with people's health, it also indirectly tied the e-bus campaign to local officials' political performance, as the central government would soon hand air-quality targets to all provinces.
  • The years 2013 and 2014 proved to be important for China's EV push. For the first time, the central government made EV purchase subsidies available to individual consumers, not just the public sector, opening the floodgate to private ownership. Additionally, it offered discounted electricity tariffs to bus operators to make sure the cost of running electric buses would be "significantly lower than" that of their oil or gas-powered equivalents.
  • The new economic push, plus local government's determination to battle air pollution, generated great enthusiasm for e-buses. By the end of 2015, the number of EV pilot cities rocketed from 25 to 88. In the same year, the central government set a target of 200,000 new energy buses on the road by 2020 and announced a plan to phase out its subsidies for fossil-fuel-powered buses.
  • To further stimulate the market, many cities devised various local policies on top of national incentives. For example, Shenzhen, a southern city with a population of more than 17 million, encouraged government agencies to work with private companies to create a full range of renting mechanisms for bus operators
  • Different cities' bus operators also designed different charging strategies. "Buses in Shenzhen had bigger batteries, so they normally charged overnight," says Xue, of WRI China. Between 2016 and 2020, Shanghai, another electric bus hub, subsidised the electricity e-buses used -- regardless of the hours of the day -- to give them more flexibility in charging.
  • Generous financial support did lead to problems. In 2016, an EV subsidy fraud shook China, with some bus operators found to have exaggerated the number of e-buses they had purchased. So that same year Beijing shifted its EV subsidy rules so bus operators could only receive financial support when a bus's mileage reached 30,000km (19,000 miles).
  • one year later, the government announced the so-called "dual-credit" policy. This allowed new energy vehicle makers to rake up credits which they could sell for cash to those needing to offset "negative credits" generated from making conventional cars.
  • it wasn't only China's buses that had benefitted.China's e-bus campaign helped create a big and stable market for its wider EV industry, brought down the costs and created economies of scale. In 2009, the year the e-bus campaign was rolled out, the total number of new energy vehicles sold stood at 2,300; by 2022, it was 6.9 million, analysis by Huang Zheng,
  • By 2022, the country had also built the world's largest EV charging network, with 1.8 million public charging stations – or two-thirds of the global total – and 3.4 million private equivalents. This means that on average, there is one charging pillar for every 2.5 of China's 13.1 million new energy vehicles.
  • Cold weather is a problem, too, as it can make a battery's charging time longer and its range shorter. The reason China has not achieved 100% electrification for its buses is its northern regions, which have harsh winters, says Xue.
  • To make e-buses truly "green", they should also be charged with renewable power, Wang says. But last year coal power still accounted for 58.4% of China's energy mix, according to the China Electricity Council, a trade body..
  • Globally, however, China is now in a league of its own in uptake of e-buses. By 2018, about 421,000 of the world's 425,000 electric buses were located in China; Europe had about 2,250 and the US owned around 300. A
  • But earlier this year, the European Commission announced a zero-emission target for all new city buses by 2030. And some countries are increasing their overall funding for the transition.
  • In 2020, the European Commission approved Germany's plan to double its aid for e-buses to €650m (£558m/$707m), then again in 2021 to €1.25 billion euros (£1.07m/$1.3bn). And the UK, which last year had the largest electric bus fleet in Europe with 2,226 pure electric and hybrid buses, has announced another £129m ($164m) to help bus operators buy zero-emissions fleets.
  • Countries have thus responded to China's manufacturing lead in divergent ways. "While the US has opted for a more competitive angle by fostering its own e-bus production, regions like Latin America are more open to trade with China due to a more friendly trading setup through [China's] Belt and Road Initiative,"
  • In order to avoid direct competition from Chinese manufacturers, the US has come up with a "school-bus strategy", says Liu. The Chinese don't make the iconic yellow vehicles, so this could ignite American e-bus manufacturing and create a local industry chain, he suggests. Backed by the US Environmental Protection Agency's $5bn (£3.9bn) Clean School Bus Programme, the national effort has so far committed to providing 5,982 buses.
  • In contrast, many Latin American cities, such as the Colombian capital of Bogota and the Chilean capital of Santiago, are greening their traditional bus sectors with the help of Chinese manufacturers, who are the largest providers to the region. In 2020, Chile became the country that had the most Chinese e-buses outside of China, and this year Santiago's public transport operator announced it has ordered 1,022 e-buses from Beijing-based Foton Motor, the biggest overseas deal the firm had received.
  • Chinese manufacturers are likely to receive a lot more orders from Chile and its neighbours in this decade. According to latest research by the global C40 Cities network, the number of electric buses in 32 Latin American cities is expected to increase by more than seven times by 2030, representing an investment opportunity of over $11.3bn (£8.9bn)
  • In June 2023, BloombergNEF forecast half of the world's buses to be entirely battery-powered by 2032, a decade ahead of cars. And by 2026, 36% and 24% of municipal bus sales in Europe and the US, respectively, are expected to be EVs as they begin to catch up with China
  • To meet the global climate goals set by the Paris Agreement, simply switching the world's existing bus fleets might not be enough. According to ITDP, the cumulative greenhouse gas emissions from urban passenger transport globally must stay below the equivalent of 66 gigatonnes CO2 between 2020 and 2050 for the world to meet the 1.5C temperature goal. This emissions limit will only be possible when the world not only adopts electric buses, but goes through a broader shift away from private transport
  • "We can't just focus on [replacing] the buses that exist, we need to actually get many, many more buses on the streets," Thompson adds. She and her team estimate that the world would need about 10 million more buses through 2030, and 46 million more buses cumulatively through 2050, to make public transport good enough to have a shot at achieving the Paris Agreement. And all those buses will need to be electric.
  • In China therefore, even though EVs are being sold faster than ever, its central government has instructed cities to encourage public transport use, as well as walking and riding bikes.
  • In Wang's hometown, meanwhile, which has just over three million residents, the local government has gone one step further and made all bus rides free. All citizens need to do is to swipe an app, with no charge, to get onto the bus. "My aunt loves taking buses now," says Wang. "She says it is so convenient."
Javier E

Biden's Climate Law Is Ending 40 Years of Hands-off Government - The Atlantic - 0 views

  • It is no exaggeration to say that his signature immediately severed the history of climate change in America into two eras. Before the IRA, climate campaigners spent decades trying and failing to get a climate bill through the Senate. After it, the federal government will spend $374 billion on clean energy and climate resilience over the next 10 years. The bill is estimated to reduce the country’s greenhouse-gas emissions by about 40 percent below their all-time high, getting the country two-thirds of the way to meeting its 2030 goal under the Paris Agreement.
  • Far less attention has been paid to the ideas that animate the IRA.
  • , the IRA makes a particularly interesting and all-encompassing wager—a bet relevant to anyone who plans to buy or sell something in the U.S. in the next decade, or who plans to trade with an American company, or who relies on American military power
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  • Every law embodies a particular hypothesis about how the world works, a hope that if you pull on levers A and B, then outcomes C and D will result
  • Democrats hope to create an economy where the government doesn’t just help Americans buy green technologies; it also helps nurture the industries that produce that technology.
  • The idea is this: The era of passive, hands-off government is over. The laws embrace an approach to governing the economy that scholars call “industrial policy,” a catch-all name for a wide array of tools and tactics that all assume the government can help new domestic industries get started, grow, and reach massive scale.
  • If “this country used to make things,” as the saying goes, and if it wants to make things again, then the government needs to help it. And if the country believes that certain industries bestow a strategic advantage, then it needs to protect them against foreign interference.
  • From its founding to the 1970s, the country had an economic doctrine that was defined by its pragmatism and the willingness of its government to find new areas of growth.
  • It’s more like a toolbox of different approaches that act in concert to help push technologies to grow and reach commercial scale. The IRA and the two other new laws prefer four tools in particular.
  • “Yes, there was an ‘invisible hand,’” Stephen Cohen and Brad DeLong write in their history of the topic, Concrete Economics. “But the invisible hand was repeatedly lifted at the elbow by the government, and placed in a new position from where it could go on to perform its magic.”
  • That pragmatism faded in the 1980s, when industrial policy became scorned as one more instance of Big Government coming in to pick so-called winners and losers.
  • The two other large bills passed by this Congress—the $1 trillion bipartisan infrastructure law and the CHIPS and Science Act—make down payments on the future as well; both laws, notably, were passed by bipartisan majorities.
  • it is in the IRA that these general commitments become specific, and therefore transformative.
  • Since the 1980s, when Congress has wanted to spur technological progress, it has usually thrown money exclusively at R&D. We have had a science policy, not an industrial policy
  • inextricable from that turn is Washington’s consuming anxiety over China’s rise—and China has embraced industrial policy.
  • although not a single Republican voted for the IRA, its wager is not especially partisan or even ideological.
  • the demonstration project. A demonstration project helps a technology that has previously existed only in the lab get out in the real world for the first time
  • supply-push policies. As the name suggests, these tools “push” on the supply side of an industry by underwriting new factories or assuring that those factories have access to cheap inputs to make things.
  • demand-pull policies, which create a market for whatever is coming out of those new factories. The government can “pull” on demand by buying those products itself or by subsidizing them for consumers.
  • protective policies, meant to insulate industries—especially new ones that are still growing—from foreign interference
  • Although both parties have moved to embrace industrial policy, Democrats are clearly ahead of their Republican colleagues. You can see it in their policy: While the bipartisan infrastructure law sets up lots of demonstration projects, and the CHIPS Act adopts some supply-push and protectionist theory, only the IRA uses all four tools.
  • In order to stop climate change, experts believe, the United States must do three things: clean up its power grid, replacing coal and gas power plants with zero-carbon sources; electrify everything it can, swapping fossil-fueled vehicles and boilers with electric vehicles and heat pumps; and mop up the rest, mitigating carbon pollution from impossible-to-electrify industrial activities. The IRA aims to nurture every industry needed to realize that vision.
  • Hydrogen and carbon removal are going to benefit from nearly every tool the government has. The bipartisan infrastructure law will spend more than $11 billion on hydrogen and carbon-removal “hubs,” huge demonstration projects
  • These hubs will also foster geographic concentration, the economic idea that when you put lots of people working on the same problem near one another, they solve it faster. You can see such clustering at work in San Francisco’s tech industry, and also in China, which now creates hubs for virtually every activity that it wants to dominate globally—even soccer.
  • Then the IRA will take over and deploy some good ol’ supply push and demand pull. It includes new programs to underwrite new hydrogen factories; on the demand side, a powerful new tax credit will pay companies for every kilogram of low-carbon hydrogen that they produce
  • Another tax credit will boost the demand of carbon removal by paying firms a $180 bounty for trapping a ton of carbon dioxide and pumping it undergroun
  • Today, not only does China make most batteries worldwide; it alone makes the tools that make the batteries, Nathan Iyer, an analyst at RMI, a nonpartisan energy think tank, told me. This extreme geographic concentration—which afflicts not only the battery industry but also the solar-panel industry—could slow down the energy transition and make it more expensive
  • the new tax credit is also supply-minded, arguably even protectionist. Under the new scheme, very few electric cars and trucks will immediately qualify for that full $7,500 subsidy; it will go only toward vehicles whose batteries are primarily made in North America and where a certain percentage of minerals are mined and processed in the U.S. or one of its allies. Will these policies accelerate the shift to EVs? Well, no, not immediately. But the idea is that by boosting domestic production of EVs, batteries will become cheaper and more abundant—and the U.S. will avoid subsidizing one of China’s growth industries.
  • Right now, next to no solar panels are made in the U.S., even though the technology was invented here. The IRA endeavors to change that by—you guessed it—a mix of supply-push, demand-pull, and protectionist policies. Under the law, the government will underwrite new factories to make every subcomponent of the solar supply chain; then it will pay those factories for every item that they produce
  • “It’s realistic that within four to five years, [U.S. solar manufacturers] could completely meet domestic demand for solar,” Scott Moskowitz, the head of public affairs for the solar manufacturer Q CELLS, told me.
  • In each of these industries, you’ll notice that the government isn’t only subsidizing factories; it is actually paying them to operate. That choice, which is central to the IRA’s approach, is “really defending against the mistakes of the 2009 bill,” Iyer told me. In its stimulus bill passed during the Great Recession, the Obama administration tried to do green industrial policy, underwriting new solar-panel factories across the country. But then Chinese firms began exporting cheap solar panels by the millions, saturating domestic demand and leaving those sparkly new factories idle
  • So many other industries will also be touched by these laws. There’s a new program to nurture a low-carbon aviation-fuel industry in the U.S. (Long-distance jet travel is one of those climate problems that nobody knows how to solve yet.)
  • the revelation of the IRA is that decarbonizing the United States may require re-industrializing it. A net-zero America may have more refineries, more factories, and more goods production than a fossil-fueled America—while also having cheaper cars, healthier air, and fewer natural disasters. And once the U.S. gets there, then it can keep going: It can set an example for the world that a populous, affluent country can reduce its emissions while enjoying all the trappings of modernity,
  • There are a slew of policies meant to grow and decarbonize the U.S. industrial sector; every tax credit pays out a bonus if you use U.S.-made steel, cement, or concrete. “You would need thousands and thousands of words to capture the industries that will be transformed by this,” Josh Freed, the climate and energy leader at Third Way, a center-left think tank, told me.
  • Five EVs were sold in China last year for every one EV sold in the United States; that larger domestic market will provide a significant economy of scale when Chinese EV makers begin exporting their cars abroad. For that reason and others, many people in China are “deeply skeptical” that the U.S. can catch up with its lead,
  • We are about to have a huge new set of vested interests who want the economy to be clean and benefit from that. We’ve literally never had that before,” Freed told me.
  • “This is going to change everything,” he said
  • that is the IRA’s biggest idea, its biggest hypothesis: that America can improve its standard of living and preserve its global preeminence while ruthlessly eliminating carbon pollution; that climate change, actually, doesn’t change everything, and that in fact it can be addressed by changing as little as possible.
  • This hypothesis has already proved itself out in one important way, which is that the IRA passed, and the previous 30 years of climate proposals did not. Now comes the real test.
Javier E

Who Benefits From the Safety Net - NYTimes.com - 0 views

  • Terms like entitlements, government benefits and safety net often conjure images of tax dollars sliding from the hands of the wealthy into the pockets of the poor. But as we reported Sunday, that image is badly outdated. Benefits now flow primarily to the middle class.The center’s study found that the poorest American households, the bottom fifth, received just 32 cents of every dollar of government benefits distributed in 2010.
  • the recent recession did not cause any significant increase in the share of benefits flowing to the poor, as might once have been expected.
  • older people received slightly more than half of government benefits, while the nonelderly with disabilities received an additional 20 percent. Most of these benefits are not means-tested – indeed, better-paid workers get more in Social Security.
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  • politicians have shifted benefits away from the “jobless poor,” through reductions in traditional welfare, and increased benefits for working families, for example through tax credits.
  • African-Americans, who make up 22 percent of the poor, receive 14 percent of government benefits, close to their 12 percent population share.
Javier E

Thurston Howell Romney - NYTimes.com - 1 views

  • In 1980, about 30 percent of Americans received some form of government benefits. Today, as Nicholas Eberstadt of the American Enterprise Institute has pointed out, about 49 percent do.
  • Americans haven’t become childlike worshipers of big government. On the contrary, trust in government has declined. The number of people who think government spending promotes social mobility has fallen.
  • Romney, who criticizes President Obama for dividing the nation, divided the nation into two groups: the makers and the moochers. Forty-seven percent of the country, he said, are people “who are dependent upon government, who believe they are victims, who believe the government has a responsibility to take care of them, who believe they are entitled to health care, to food, to housing, to you name it.”
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  • the entitlement state has expanded, but America remains one of the hardest-working nations on earth. Americans work longer hours than just about anyone else. Americans believe in work more than almost any other people.
  • entitlement transfers to individuals have grown by more than 700 percent over the last 50 years. This spending surge, Eberstadt notes, has increased faster under Republican administrations than Democratic ones.
  • The people who receive the disproportionate share of government spending are not big-government lovers. They are Republicans. They are senior citizens. They are white men with high school degrees.
  • In 1987, during Ronald Reagan’s second term, 62 percent of Republicans believed that the government has a responsibility to help those who can’t help themselves. Now, according to the Pew Research Center, only 40 percent of Republicans believe that. The Republican Party, and apparently Mitt Romney, too, has shifted over toward a much more hyperindividualistic and atomistic social view — from the Reaganesque language of common citizenship to the libertarian language of makers and takers.
  • Romney knows nothing about ambition and motivation. The formula he sketches is this: People who are forced to make it on their own have drive. People who receive benefits have dependency. But, of course, no middle-class parent acts as if this is true. Middle-class parents don’t deprive their children of benefits so they can learn to struggle on their own. They shower benefits on their children to give them more opportunities
Javier E

Economics of Good and Evil: The Quest for Economic Meaning from Gilgamesh to Wall Stree... - 2 views

  • Instead of self-confident and self-centered answers, the author humbly asks fundamental questions: What is economics? What is its meaning? Where does this new religion, as it is sometimes called, come from? What are its possibilities and its limitations and borders, if there are any? Why are we so dependent on permanent growing of growth and growth of growing of growth? Where did the idea of progress come from, and where is it leading us? Why are so many economic debates accompanied by obsession and fanaticism?
  • The majority of our political parties act with a narrow materialistic focus when, in their programs, they present the economy and finance first; only then, somewhere at the end, do we find culture as something pasted on or as a libation for a couple of madmen.
  • most of them—consciously or unconsciously—accept and spread the Marxist thesis of the economic base and the spiritual superstructure.
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  • He tries to break free of narrow specialization and cross the boundaries between scientific disciplines. Expeditions beyond economics’ borders and its connection to history, philosophy, psychology, and ancient myths are not only refreshing, but necessary for understanding the world of the twenty-first century.
  • Reality is spun from stories, not from material. Zdeněk Neubauer
  • “The separation between the history of a science, its philosophy, and the science itself dissolves into thin air, and so does the separation between science and non-science; differences between the scientific and unscientific are vanishing.”
  • Outside of our history, we have nothing more.
  • The study of the history of a certain field is not, as is commonly held, a useless display of its blind alleys or a collection of the field’s trials and errors (until we got it right), but history is the fullest possible scope of study of a menu that the given field can offer.
  • History of thought helps us to get rid of the intellectual brainwashing of the age, to see through the intellectual fashion of the day, and to take a couple of steps back.
  • Almost all of the key concepts by which economics operates, both consciously and unconsciously, have a long history, and their roots extend predominantly outside the range of economics, and often completely beyond that of science.
  • That is the reason for this book: to look for economic thought in ancient myths and, vice versa, to look for myths in today’s economics.
  • stories; Adam Smith believed. As he puts it in The Theory of Moral Sentiments, “the desire of being believed, or the desire of persuading, of leading and directing other people, seems to be one of the strongest of all our natural desires.”
  • “The human mind is built to think in terms of narratives … in turn, much of human motivation comes from living through a story of our lives, a story that we tell to ourselves and that creates a framework of our motivation. Life could be just ‘one damn thing after another’ if it weren’t for such stories. The same is true for confidence in a nation, a company, or an institution. Great leaders are foremost creators of stories.”
  • contrary to what our textbooks say, economics is predominantly a normative field. Economics not only describes the world but is frequently about how the world should be (it should be effective, we have an ideal of perfect competition, an ideal of high-GDP growth in low inflation, the effort to achieve high competitiveness …). To this end, we create models, modern parables,
  • I will try to show that mathematics, models, equations, and statistics are just the tip of the iceberg of economics; that the biggest part of the iceberg of economic knowledge consists of everything else; and that disputes in economics are rather a battle of stories and various metanarratives than anything else.
  • Before it was emancipated as a field, economics lived happily within subsets of philosophy—ethics, for example—miles away from today’s concept of economics as a mathematical-allocative science that views “soft sciences” with a scorn born from positivistic arrogance. But our thousand-year “education” is built on a deeper, broader, and oftentimes more solid base. It is worth knowing about.
  • is a paradox that a field that primarily studies values wants to be value-free. One more paradox is this: A field that believes in the invisible hand of the market wants to be without mysteries.
  • mathematics at the core of economics, or is it just the icing of the cake, the tip of the iceberg of our field’s inquiry?
  • we seek to chart the development of the economic ethos. We ask questions that come before any economic thinking can begin—both philosophically and, to a degree, historically. The area here lies at the very borders of economics—and often beyond. We may refer to this as protoeconomics (to borrow a term from protosociology) or, perhaps more fittingly, metaeconomics (to borrow a term from metaphysics).
  • In this sense, “the study of economics is too narrow and too fragmentary to lead to valid insight, unless complemented and completed by a study of metaeconomics.”17
  • The more important elements of a culture or field of inquiry such as economics are found in fundamental assumptions that adherents of all the various systems within the epoch unconsciously presuppose. Such assumptions appear so obvious that people do not know what they are assuming, because no other way of putting things has ever occurred to them, as the philosopher Alfred Whitehead notes in Adventures of Ideas.
  • I argue that economic questions were with mankind long before Adam Smith. I argue that the search for values in economics did not start with Adam Smith but culminated with him.
  • We should go beyond economics and study what beliefs are “behind the scenes,” ideas that have often become the dominant yet unspoken assumptions in our theories. Economics is surprisingly full of tautologies that economists are predominantly unaware of. I
  • argue that economics should seek, discover, and talk about its own values, although we have been taught that economics is a value-free science. I argue that none of this is true and that there is more religion, myth, and archetype in economics than there is mathematics.
  • In a way, this is a study of the evolution of both homo economicus and, more importantly, the history of the animal spirits within him. This book tries to study the evolution of the rational as well as the emotional and irrational side of human beings.
  • I argue that his most influential contribution to economics was ethical. His other thoughts had been clearly expressed long before him, whether on specialization, or on the principle of the invisible hand of the market. I try to show that the principle of the invisible hand of the market is much more ancient and developed long before Adam Smith. Traces of it appear even in the Epic of Gilgamesh, Hebrew thought, and in Christianity, and it is expressly stated by Aristophanes and Thomas Aquinas.
  • This is not a book on the thorough history of economic thought. The author aims instead to supplement certain chapters on the history of economic thought with a broader perspective and analysis of the influences that often escape the notice of economists and the wider public.
  • Progress (Naturalness and Civilization)
  • The Economy of Good and Evil
  • from his beginnings, man has been marked as a naturally unnatural creature, who for unique reasons surrounds himself with external possessions. Insatiability, both material and spiritual, are basic human metacharacteristics, which appear as early as the oldest myths and stories.
  • the Hebrews, with linear time, and later the Christians gave us the ideal (or amplified the Hebrew ideal) we now embrace. Then the classical economists secularized progress. How did we come to today’s progression of progress, and growth for growth’s sake?
  • The Need for Greed: The History of Consumption and Labor
  • Metamathematics From where did economics get the concept of numbers as the very foundation of the world?
  • All of economics is, in the end, economics of good and evil. It is the telling of stories by people of people to people. Even the most sophisticated mathematical model is, de facto, a story, a parable, our effort to (rationally) grasp the world around us.
  • idea that we can manage to utilize our natural egoism, and that this evil is good for something, is an ancient philosophical and mythical concept. We will also look into the development of the ethos of homo economicus, the birth of “economic man.”
  • The History of Animal Spirits: Dreams Never Sleep
  • Masters of the Truth
  • Originally, truth was a domain of poems and stories, but today we perceive truth as something much more scientific, mathematical. Where does one go (to shop) for the truth? And who “has the truth” in our epoch?
  • Our animal spirits (something of a counterpart to rationality) are influenced by the archetype of the hero and our concept of what is good.
  • The entire history of ethics has been ruled by an effort to create a formula for the ethical rules of behavior. In the final chapter we will show the tautology of Max Utility, and we will discuss the concept of Max Good.
  • The History of the Invisible Hand of the Market and Homo Economicus
  • We understand “economics” to mean a broader field than just the production, distribution, and consumption of goods and services. We consider economics to be the study of human relations that are sometimes expressible in numbers, a study that deals with tradables, but one that also deals with nontradables (friendship, freedom, efficiency, growth).
  • When we mention economics in this book, we mean the mainstream perception of it, perhaps as best represented by Paul Samuelson.
  • By the term homo economicus, we mean the primary concept of economic anthropology. It comes from the concept of a rational individual, who, led by narrowly egotistical motives, sets out to maximize his benefit.
  • the Epic of Gilgamesh bears witness to the opposite—despite the fact that the first written clay fragments (such as notes and bookkeeping) of our ancestors may have been about business and war, the first written story is mainly about great friendship and adventure.
  • there is no mention of either money or war; for example, not once does anyone in the whole epic sell or purchase something.5 No nation conquers another, and we do not encounter a mention even of the threat of violence.
  • Gilgamesh becomes a hero not only due to his strength, but also due to discoveries and deeds whose importance were in large part economic—direct gaining of construction materials in the case of felling the cedar forest, stopping Enkidu from devastating Uruk’s economy, and discovering new desert routes during his expeditions.
  • Even today we live in Gilgamesh’s vision that human relations—and therefore humanity itself—are a disturbance to work and efficiency; that people would perform better if they did not “waste” their time and energy on nonproductive things.
  • is a story of nature and civilization, of heroism, defiance, and the battle against the gods, and evil; an epic about wisdom, immortality, and also futility.
  • But labour is unlike any other commodity. The work environment is of no concern for steel; we do not care about steel’s well-being.16
  • But it is in friendship where—often by-the-way, as a side product, an externality—ideas and deeds are frequently performed or created that together can altogether change the face of society.19 Friendship can go against an ingrained system in places where an individual does not have the courage to do so himself or herself.
  • As Joseph Stiglitz says, One of the great “tricks” (some say “insights”) of neoclassical economics is to treat labour like any other factor of production. Output is written as a function of inputs—steel, machines, and labour. The mathematics treats labour like any other commodity, lulling one into thinking of labour like an ordinary commodity, such as steel or plastic.
  • Even the earliest cultures were aware of the value of cooperation on the working level—today we call this collegiality, fellowship, or, if you want to use a desecrated term, comradeship. These “lesser relationships” are useful and necessary for society and for companies because work can be done much faster and more effectively if people get along with each other on a human level
  • But true friendship, which becomes one of the central themes of the Epic of Gilgamesh, comes from completely different material than teamwork. Friendship, as C. S. Lewis accurately describes it, is completely uneconomical, unbiological, unnecessary for civilization, and an unneeded relationship
  • Here we have a beautiful example of the power of friendship, one that knows how to transform (or break down) a system and change a person. Enkidu, sent to Gilgamesh as a punishment from the gods, in the end becomes his faithful friend, and together they set out against the gods. Gilgamesh would never have gathered the courage to do something like that on his own—nor would Enkidu.
  • Due to their friendship, Gilgamesh and Enkidu then intend to stand up to the gods themselves and turn a holy tree into mere (construction) material they can handle almost freely, thereby making it a part of the city-construct, part of the building material of civilization, thus “enslaving” that which originally was part of wild nature. This is a beautiful proto-example of the shifting of the borders between the sacred and profane (secular)—and to a certain extent also an early illustration of the idea that nature is there to provide cities and people with raw material and production resources.
  • started with Babylonians—rural nature becomes just a supplier of raw materials, resources (and humans the source of human resources). Nature is not the garden in which humans were created and placed, which they should care for and which they should reside in, but becomes a mere reservoir for natural (re)sources.
  • Even today, we often consider the domain of humanity (human relations, love, friendship, beauty, art, etc.) to be unproductive;
  • Both heroes change—each from opposite poles—into humans. In this context, a psychological dimension to the story may be useful: “Enkidu (…) is Gilgamesh’s alter ego, the dark, animal side of his soul, the complement to his restless heart. When Gilgamesh found Enkidu, he changed from a hated tyrant into the protector of his city. (…)
  • To be human seems to be somewhere in between, or both of these two. We
  • this moment of rebirth from an animal to a human state, the world’s oldest preserved epic implicitly hints at something highly important. Here we see what early cultures considered the beginning of civilization. Here is depicted the difference between people and animals or, better, savages. Here the epic quietly describes birth, the awakening of a conscious, civilized human. We are witnesses to the emancipation of humanity from animals,
  • The entire history of culture is dominated by an effort to become as independent as possible from the whims of nature.39 The more developed a civilization is, the more an individual is protected from nature and natural influences and knows how to create around him a constant or controllable environment to his liking.
  • The price we pay for independence from the whims of nature is dependence on our societies and civilizations. The more sophisticated a given society is as a whole, the less its members are able to survive on their own as individuals, without society.
  • The epic captures one of the greatest leaps in the development of the division of labor. Uruk itself is one of the oldest cities of all, and in the epic it reflects a historic step forward in specialization—in the direction of a new social city arrangement. Because of the city wall, people in the city can devote themselves to things other than worrying about their own safety, and they can continue to specialize more deeply.
  • Human life in the city gains a new dimension and suddenly it seems more natural to take up issues going beyond the life span of an individual. “The city wall symbolizes as well as founds the permanence of the city as an institution which will remain forever and give its inhabitants the certainty of unlimited safety, allowing them to start investing with an outlook reaching far beyond the borders of individual life.
  • The wall around the city of Uruk is, among other things, a symbol of an internal distancing from nature, a symbol of revolts against submission to laws that do not come under the control of man and that man can at most discover and use to his benefit.
  • “The chief thing which the common-sense individual wants is not satisfactions for the wants he had, but more, and better wants.”47
  • If a consumer buys something, theoretically it should rid him of one of his needs—and the aggregate of things they need should be decreased by one item. In reality, though, the aggregate of “I want to have” expands together with the growing aggregate of “I have.”
  • can be said that Enkidu was therefore happy in his natural state, because all of his needs were satiated. On the other hand, with people, it appears that the more a person has, the more developed and richer, the greater the number of his needs (including the unsaturated ones).
  • the Old Testament, this relationship is perceived completely differently. Man (humanity) is created in nature, in a garden. Man was supposed to care for the Garden of Eden and live in harmony with nature and the animals. Soon after creation, man walks naked and is not ashamed, de facto the same as the animals. What is characteristic is that man dresses (the natural state of creation itself is not enough for him), and he (literally and figuratively) covers52 himself—in shame after the fall.53
  • Nature is where one goes to hunt, collect crops, or gather the harvest. It is perceived as the saturator of our needs and nothing more. One goes back to the city to sleep and be “human.” On the contrary, evil resides in nature. Humbaba lives in the cedar forest, which also happens to be the reason to completely eradicate it.
  • Symbolically, then, we can view the entire issue from the standpoint of the epic in the following way: Our nature is insufficient, bad, evil, and good (humane) occurs only after emancipation from nature (from naturalness), through culturing and education. Humanity is considered as being in civilization.
  • The city was frequently (at least in older Jewish writings) a symbol of sin, degeneration, and decadence—nonhumanity. The Hebrews were originally a nomadic nation, one that avoided cities. It is no accident that the first important city57 mentioned in the Bible is proud Babylon,58 which God later turns to dust.
  • is enough, for example, to read the Book of Revelation to see how the vision of paradise developed from the deep Old Testament period, when paradise was a garden. John describes his vision of heaven as a city—paradise is in New Jerusalem, a city where the dimensions of the walls(!) are described in detail, as are the golden streets and gates of pearl.
  • Hebrews later also chose a king (despite the unanimous opposition of God’s prophets) and settled in cities, where they eventually founded the Lord’s Tabernacle and built a temple for Him. The city of Jerusalem later gained an illustrious position in all of religion.
  • this time Christianity (as well as the influence of the Greeks) does not consider human naturalness to be an unambiguous good, and it does not have such an idyllic relationship to nature as the Old Testament prophets.
  • If a tendency toward good is not naturally endowed in people, it must be imputed from above through violence or at least the threat of violence.
  • If we were to look at human naturalness as a good, then collective social actions need a much weaker ruling hand. If people themselves have a natural tendency (propensity) toward good, this role does not have to be supplied by the state, ruler, or, if you wish, Leviathan.
  • How does this affect economics?
  • us return for the last time to the humanization of the wild Enkidu, which is a process we can perceive with a bit of imagination as the first seed of the principle of the market’s invisible hand, and therefore the parallels with one of the central schematics of economic thinking.
  • Sometimes it is better to “harness the devil to the plow” than to fight with him. Instead of summoning up enormous energy in the fight against evil, it is better to use its own energy to reach a goal we desire; setting up a mill on the turbulent river instead of futile efforts to remove the current. This is also how Saint Prokop approached it in one of the oldest Czech legends.
  • Enkidu caused damage and it was impossible to fight against him. But with the help of a trap, trick, this evil was transformed into something that greatly benefited civilization.
  • By culturing and “domesticating” Enkidu, humanity tamed the uncontrollable wild and chaotic evil
  • Enkidu devastated the doings (the external, outside-the-walls) of the city. But he was later harnessed and fights at the side of civilization against nature, naturalness, the natural state of things.
  • A similar motif appears a thousand years after the reversal, which is well known even to noneconomists as the central idea of economics: the invisible hand of the market.
  • A similar story (reforming something animally wild and uncultivated in civilizational achievement) is used by Thomas Aquinas in his teachings. Several centuries later, this idea is fully emancipated in the hands of Bernard Mandeville and his Fable of the Bees: or, Private Vices, Publick Benefits. The economic and political aspects of this idea are—often incorrectly—ascribed to Adam Smith.
  • Here the individual does not try anymore to maximize his goods or profits, but what is important is writing his name in human memory in the form of heroic acts or deeds.
  • immortality, one connected with letters and the cult of the word: A name and especially a written name survives the body.”77
  • After this disappointment, he comes to the edge of the sea, where the innkeeper Siduri lives. As tonic for his sorrow, she offers him the garden of bliss, a sort of hedonistic fortress of carpe diem, where a person comes to terms with his mortality and at least in the course of the end of his life maximizes earthly pleasures, or earthly utility.
  • In the second stage, after finding his friend Enkidu, Gilgamesh abandons the wall and sets out beyond the city to maximalize heroism. “In his (…) search of immortal life, Gilgamesh
  • The hero refuses hedonism in the sense of maximizing terrestrial pleasure and throws himself into things that will exceed his life. In the blink of an eye, the epic turns on its head the entire utility maximization role that mainstream economics has tirelessly tried to sew on people as a part of their nature.81
  • It is simpler to observe the main features of our civilization at a time when the picture was more readable—at a time when our civilization was just being born and was still “half-naked.” In other words, we have tried to dig down to the bedrock of our written civilization;
  • today remember Gilgamesh for his story of heroic friendship with Enkidu, not for his wall, which no longer reaches monumental heights.
  • the eleventh and final tablet, Gilgamesh again loses what he sought. Like Sisyphus, he misses his goal just before the climax
  • is there something from it that is valid today? Have we found in Gilgamesh certain archetypes that are in us to this day?
  • The very existence of questions similar to today’s economic ones can be considered as the first observation. The first written considerations of the people of that time were not so different from those today. In other words: The epic is understandable for us, and we can identify with it.
  • We have also been witnesses to the very beginnings of man’s culturing—a great drama based on a liberation and then a distancing from the natural state.
  • Let us take this as a memento in the direction of our restlessness, our inherited dissatisfaction and the volatility connected to it. Considering that they have lasted five thousand years and to this day we find ourselves in harmony with a certain feeling of futility, perhaps these characteristics are inherent in man.
  • Gilgamesh had a wall built that divided the city from wild nature and created a space for the first human culture. Nevertheless, “not even far-reaching works of civilization could satisfy human desire.”
  • Friendship shows us new, unsuspected adventures, gives us the opportunity to leave the wall and to become neither its builder nor its part—to not be another brick in the wall.
  • with the phenomenon of the creation of the city, we have seen how specialization and the accumulation of wealth was born, how holy nature was transformed into a secular supplier of resources, and also how humans’ individualistic ego was emancipated.
  • to change the system, to break down that which is standing and go on an expedition against the gods (to awaken, from naïveté to awakening) requires friendship.
  • For small acts (hunting together, work in a factory), small love is enough: Camaraderie. For great acts, however, great love is necessary, real love: Friendship. Friendship that eludes the economic understanding of quid pro quo. Friendship gives. One friend gives (fully) for the other. That is friendship for life and death,
  • The thought that humanity comes at the expense of efficiency is just as old as humanity itself—as we have shown, subjects without emotion are the ideal of many tyrants.
  • The epic later crashes this idea through the friendship of Gilgamesh and Enkidu. Friendship—the biologically least essential love, which at first sight appears to be unnecessary
  • less a civilized, city person is dependent on nature, the more he or she is dependent on the rest of society. Like Enkidu, we have exchanged nature for society; harmony with (incalculable) nature for harmony with (incalculable) man.
  • human nature good or evil? To this day these questions are key for economic policy: If we believe that man is evil in his nature, therefore that a person himself is dog eat dog (animal), then the hard hand of a ruler is called for. If we believe that people in and of themselves, in their nature, gravitate toward good, then it is possible to loosen up the reins and live in a society that is more laissez-faire.
  • For a concept of historical progress, for the undeification of heroes, rulers, and nature, mankind had to wait for the Hebrews.
  • Because nature is not undeified, it is beyond consideration to explore it, let alone intervene in it (unless a person was a two-thirds god like Gilgamesh). It
  • They practiced money lending, traded in many assets (…) and especially were engaged in the trading of shares on capital markets, worked in currency exchange and frequently figured as mediators in financial transactions (…), they functioned as bankers and participated in emissions of all possible forms.
  • As regards modern capitalism (as opposed to the ancient and medieval periods) … there are activities in it which are, in certain forms, inherently (and completely necessarily) present—both from an economic and legal standpoint.7
  • As early as the “dark” ages, the Jews commonly used economic tools that were in many ways ahead of their time and that later became key elements of the modern economy:
  • Gilgamesh’s story ends where it began. There is a consistency in this with Greek myths and fables: At the end of the story, no progress occurs, no essential historic change; the story is set in indefinite time, something of a temporal limbo.
  • Jews believe in historical progress, and that progress is in this world.
  • For a nation originally based on nomadism, where did this Jewish business ethos come from? And can the Hebrews truly be considered as the architects of the values that set the direction of our civilization’s economic thought?
  • Hebrew religiosity is therefore strongly connected with this world, not with any abstract world, and those who take pleasure in worldly possessions are not a priori doing anything wrong.
  • PROGRESS: A SECULARIZED RELIGION One of the things the writers of the Old Testament gave to mankind is the idea and notion of progress. The Old Testament stories have their development; they change the history of the Jewish nation and tie in to each other. The Jewish understanding of time is linear—it has a beginning and an end.
  • The observance of God’s Commandments in Judaism leads not to some ethereal other world, but to an abundance of material goods (Genesis 49:25–26, Leviticus 26:3–13, Deuteronomy 28:1–13) (…) There are no accusing fingers pointed at
  • There are no echoes of asceticism nor for the cleansing and spiritual effect of poverty. It is fitting therefore, that the founders of Judaism, the Patriarchs Abraham, Isaac and Jacob, were all wealthy men.12
  • about due to a linear understanding of history. If history has a beginning as well as an end, and they are not the same point, then exploration suddenly makes sense in areas where the fruits are borne only in the next generation.
  • What’s more, economic progress has almost become an assumption of modern functional societies. We expect growth. We take it automatically. Today, if nothing “new” happens, if GDP does not grow (we say it stagnates) for several quarters, we consider it an anomaly.
  • however, the idea of progress itself underwent major changes, and today we perceive it very differently. As opposed to the original spiritual conceptions, today we perceive progress almost exclusively in an economic or scientific-technological sense.
  • Because care for the soul has today been replaced by care for external things,
  • This is why we must constantly grow, because we (deep down and often implicitly) believe that we are headed toward an (economic) paradise on Earth.
  • Only since the period of scientific-technological revolution (and at a time when economics was born as an independent field) is material progress automatically assumed.
  • Jewish thought is the most grounded, most realistic school of thought of all those that have influenced our culture.17 An abstract world of ideas was unknown to the Jews. To this day it is still forbidden to even depict God, people, and animals in symbols, paintings, statues, and drawings.
  • economists have become key figures of great importance in our time (Kacířské eseje o filosofii dějin [Heretical Essays in the Philosophy of History]). They are expected to perform interpretations of reality, give prophetic services (macroeconomic forecasts), reshape reality (mitigate the impacts of the crisis, speed up growth), and, in the long run, provide leadership on the way to the Promised Land—paradise on Earth.
  • REALISM AND ANTIASCETICISM Aside from ideas of progress, the Hebrews brought another very fundamental contribution to our culture: The desacralization of heroes, nature, and rulers.
  • Voltaire writes: “It certain fact is, that in his public laws he [Moses] never so much as once made mention of a life to come, limiting all punishments and all rewards to the present life.”21
  • As opposed to Christianity, the concept of an extraterrestrial paradise or heaven was not developed much in Hebrew thought.19 The paradise of the Israelites—Eden—was originally placed on Earth at a given place in Mesopotamia20 and at a given time,
  • The Hebrews consider the world to be real—not just a shadow reflection of a better world somewhere in the cloud of ideas, something the usual interpretation of history ascribes to Plato. The soul does not struggle against the body and is not its prisoner, as Augustine would write later.
  • The land, the world, the body, and material reality are for Jews the paramount setting for divine history, the pinnacle of creation. This idea is the conditio sine qua non of the development of economics, something of an utterly earthly making,
  • The mythology of the hero-king was strongly developed in that period, which Claire Lalouette summarizes into these basic characteristics: Beauty (a perfect face, on which it is “pleasant to look upon,” but also “beauty,” expressed in the Egyptian word nefer, not only means aesthetics, but contains moral qualities as well),
  • THE HERO AND HIS UNDEIFICATION: THE DREAM NEVER SLEEPS The concept of the hero is more important than it might appear. It may be the remote origin of Keynes’s animal spirits, or the desire to follow a kind of internal archetype that a given individual accepts as his own and that society values.
  • This internal animator of ours, our internal mover, this dream, never sleeps and it influences our behavior—including economic behavior—more than we want to realize.
  • manliness and strength,28 knowledge and intelligence,29 wisdom and understanding, vigilance and performance, fame and renown (fame which overcomes enemies because “a thousand men would not be able to stand firmly in his presence”);30 the hero is a good shepherd (who takes care of his subordinates), is a copper-clad rampart, the shield of the land, and the defender of heroes.
  • Each of us probably has a sort of “hero within”—a kind of internal role-model, template, an example that we (knowingly or not) follow. It is very important what kind of archetype it is, because its role is dominantly irrational and changes depending on time and the given civilization.
  • The oldest was the so-called Trickster—a fraudster; then the culture bearer—Rabbit; the musclebound hero called Redhorn; and finally the most developed form of hero: the Twins.
  • the Egyptian ruler, just as the Sumerian, was partly a god, or the son of a god.31
  • Jacob defrauds his father Isaac and steals his brother Esau’s blessing of the firstborn. Moses murders an Egyptian. King David seduces the wife of his military commander and then has him killed. In his old age, King Solomon turns to pagan idols, and so on.
  • Anthropology knows several archetypes of heroes. The Polish-born American anthropologist Paul Radin examined the myths of North American Indians and, for example, in his most influential book, The Trickster, he describes their four basic archetypes of heroes.
  • The Torah’s heroes (if that term can be used at all) frequently make mistakes and their mistakes are carefully recorded in the Bible—maybe precisely so that none of them could be deified.32
  • We do not have to go far for examples. Noah gets so drunk he becomes a disgrace; Lot lets his own daughters seduce him in a similar state of drunkenness. Abraham lies and (repeatedly) tries to sell his wife as a concubine.
  • the Hebrew heroes correspond most to the Tricksters, the Culture Bearers, and the Twins. The divine muscleman, that dominant symbol we think of when we say hero, is absent here.
  • To a certain extent it can be said that the Hebrews—and later Christianity—added another archetype, the archetype of the heroic Sufferer.35 Job
  • Undeification, however, does not mean a call to pillage or desecration; man was put here to take care of nature (see the story of the Garden of Eden or the symbolism of the naming of the animals). This protection and care of nature is also related to the idea of progress
  • For the heroes who moved our civilization to where it is today, the heroic archetypes of the cunning trickster, culture bearer, and sufferer are rather more appropriate.
  • the Old Testament strongly emphasizes the undeification of nature.37 Nature is God’s creation, which speaks of divinity but is not the domain of moody gods
  • This is very important for democratic capitalism, because the Jewish heroic archetype lays the groundwork much better for the development of the later phenomenon of the hero, which better suits life as we know it today. “The heroes laid down their arms and set about trading to become wealthy.”
  • in an Old Testament context, the pharaoh was a mere man (whom one could disagree with, and who could be resisted!).
  • RULERS ARE MERE MEN In a similar historical context, the Old Testament teachings carried out a similar desacralization of rulers, the so-called bearers of economic policy.
  • Ultimately the entire idea of a political ruler stood against the Lord’s will, which is explicitly presented in the Torah. The Lord unequivocally preferred the judge as the highest form of rule—an
  • The needs of future generations will have to be considered; after all humankind are the guardians of God’s world. Waste of natural resources, whether privately owned or nationally owned is forbidden.”39
  • Politics lost its character of divine infallibility, and political issues were subject to questioning. Economic policy could become a subject of examination.
  • 44 God first creates with the word and then on individual days He divides light from darkness, water from dry land, day from night, and so forth—and He gives order to things.45 The world is created orderly— it is wisely, reasonably put together. The way of the world is put together at least partially46 decipherably by any other wise and reasonable being who honors rational rules.
  • which for the methodology of science and economics is very important because disorder and chaos are difficult to examine scientifically.43 Faith in some kind of rational and logical order in a system (society, the economy) is a silent assumption of any (economic) examination.
  • THE PRAISE OF ORDER AND WISDOM: MAN AS A PERFECTER OF CREATION The created world has an order of sorts, an order recognizable by us as people,
  • From the very beginning, when God distances Himself from the entire idea, there is an anticipation that there is nothing holy, let alone divine, in politics. Rulers make mistakes, and it is possible to subject them to tough criticism—which frequently occurs indiscriminately through the prophets in the Old Testament.
  • Hebrew culture laid the foundations for the scientific examination of the world.
  • Examining the world is therefore an absolutely legitimate activity, and one that is even requested by God—it is a kind of participation in the Creator’s work.51 Man is called on to understand himself and his surroundings and to use his knowledge for good.
  • I was there when he set heavens in place, when he marked out the horizon on the face of the deep (…) Then I was the craftsman at his side.47
  • There are more urgings to gain wisdom in the Old Testament. “Wisdom calls aloud in the street (…): ‘How long will you simple ones love your simple ways?’”49 Or several chapters later: “Wisdom is supreme; therefore get wisdom. Though it cost all you have, get understanding.”50
  • examination is not forbidden. The fact that order can be grasped by human reason is another unspoken assumption that serves as a cornerstone of any scientific examination.
  • then, my sons, listen to me; blessed are those who keep my ways (…) Blessed is the man who listens to me, watching daily at my doors, waiting at my doorway. For whoever finds me finds life and receives favor from the Lord.
  • the rational examination of nature has its roots, surprisingly, in religion.
  • The Lord brought me forth as the first of his works, before his deeds of old. I was appointed from eternity, from the beginning, before the world began. When there were no oceans, I was given birth, when there were no springs abounding with water, before the mountains were settled in place,
  • The Book of Proverbs emphasizes specifically several times that it was wisdom that was present at the creation of the world. Wisdom personified calls out:
  • The last act, final stroke of the brush of creation, naming of the animals—this act is given to a human, it is not done by God, as one would expect. Man was given the task of completing the act of creation that the Lord began:
  • MAN AS A FINISHER OF CREATION The creation of the world, as it is explained in Jewish teachings, is described in the Book of Genesis. Here God (i) creates, (ii) separates, and (iii) names [my emphasis]:
  • Naming is a symbolic expression. In Jewish culture (and also in our culture to this day), the right to name meant sovereign rights and belonged, for example, to explorers (new places), inventors (new principles), or parents (children)—that is, to those who were there at the genesis, at the origin. This right was handed over by God to mankind.
  • The Naming itself (the capital N is appropriate) traditionally belongs to the crowning act of the Creator and represents a kind of grand finale of creation, the last move of the brush to complete the picture—a signature of the master.
  • Without naming, reality does not exist; it is created together with language. Wittgenstein tightly names this in his tractatus—the limits of our language are the limits of our world.53
  • He invented (fictitiously and completely abstractly!) a framework that was generally accepted and soon “made into” reality. Marx invented similarly; he created the notion of class exploitation. Through his idea, the perception of history and reality was changed for a large part of the world for nearly an entire century.
  • Reality is not a given; it is not passive. Perceiving reality and “facts” requires man’s active participation. It is man who must take the last step, an act (and we
  • How does this relate to economics? Reality itself, our “objective” world, is cocreated, man himself participates in the creation; creation, which is somewhat constantly being re-created.
  • Our scientific models put the finishing touches on reality, because (1) they interpret, (2) they give phenomena a name, (3) they enable us to classify the world and phenomena according to logical forms, and (4) through these models we de facto perceive reality.
  • When man finds a new linguistic framework or analytical model, or stops using the old one, he molds or remolds reality. Models are only in our heads; they are not “in objective reality.” In this sense, Newton invented (not merely discovered!) gravity.
  • A real-ization act on our part represents the creation of a construct, the imputation of sense and order (which is beautifully expressed by the biblical act of naming, or categorization, sorting, ordering).
  • Keynes enters into the history of economic thought from the same intellectual cadence; his greatest contribution to economics was precisely the resurrection of the imperceptible—for example in the form of animal spirits or uncertainty. The economist Piero Mini even ascribes Keynes’s doubting and rebellious approach to his almost Talmudic education.63
  • God connects man with the task of guarding and protecting the Garden of Eden, and thus man actually cocreates the cultural landscape. The Czech philosopher Zdeněk Neubauer also describes this: “Such is reality, and it is so deep that it willingly crystallizes into worlds. Therefore I profess that reality is a creation and not a place of occurrence for objectively given phenomena.”61
  • in this viewpoint it is possible to see how Jewish thought is mystical—it admits the role of the incomprehensible. Therefore, through its groundedness, Jewish thought indulges mystery and defends itself against a mechanistic-causal explanation of the world: “The Jewish way of thinking, according to Veblen, emphasizes the spiritual, the miraculous, the intangible.
  • The Jews believed the exact opposite. The world is created by a good God, and evil appears in it as a result of immoral human acts. Evil, therefore, is induced by man.66 History unwinds according to the morality of human acts.
  • What’s more, history seems to be based on morals; morals seem to be the key determining factors of history. For the Hebrews, history proceeds according to how morally its actors behave.
  • The Sumerians believed in dualism—good and evil deities exist, and the earth of people becomes their passive battlefield.
  • GOOD AND EVIL IN US: A MORAL EXPLANATION OF WELL-BEING We have seen that in the Epic of Gilgamesh, good and evil are not yet addressed systematically on a moral level.
  • This was not about moral-human evil, but rather a kind of natural evil. It is as if good and evil were not touched by morality at all. Evil simply occurred. Period.
  • the epic, good and evil are not envisaged morally—they are not the result of an (a)moral act. Evil was not associated with free moral action or individual will.
  • Hebrew thought, on the other hand, deals intensively with moral good and evil. A moral dimension touches the core of its stories.65
  • discrepancy between savings and investment, and others are convinced of the monetary essence
  • The entire history of the Jewish nation is interpreted and perceived in terms of morality. Morality has become, so to speak, a mover and shaker of Hebrew history.
  • sunspots. The Hebrews came up with the idea that morals were behind good and bad years, behind the economic cycle. But we would be getting ahead of ourselves. Pharaoh’s Dream: Joseph and the First Business Cycle To
  • It is the Pharaoh’s well-known dream of seven fat and seven lean cows, which he told to Joseph, the son of Jacob. Joseph interpreted the dream as a macroeconomic prediction of sorts: Seven years of abundance were to be followed by seven years of poverty, famine, and misery.
  • Self-Contradicting Prophecy Here, let’s make several observations on this: Through taxation74 on the level of one-fifth of a crop75 in good years to save the crop and then open granaries in bad years, the prophecy was de facto prevented (prosperous years were limited and hunger averted—through a predecessor of fiscal stabilization).
  • The Old Testament prophesies therefore were not any deterministic look into the future, but warnings and strategic variations of the possible, which demanded some kind of reaction. If the reaction was adequate, what was prophesied would frequently not occur at all.
  • This principle stands directly against the self-fulfilling prophecy,80 the well-known concept of social science. Certain prophecies become self-fulfilling when expressed (and believed) while others become self-contradicting prophecies when pronounced (and believed).
  • If the threat is anticipated, it is possible to totally or at least partially avoid it. Neither Joseph nor the pharaoh had the power to avoid bounty or crop failure (in this the dream interpretation was true and the appearance of the future mystical), but they avoided the impacts and implications of the prophecy (in this the interpretation of the dream was “false”)—famine did not ultimately occur in Egypt, and this was due to the application of reasonable and very intuitive economic policy.
  • Let us further note that the first “macroeconomic forecast” appears in a dream.
  • back to Torah: Later in this story we will notice that there is no reason offered as to why the cycle occurs (that will come later). Fat years will simply come, and then lean years after them.
  • Moral Explanation of a Business Cycle That is fundamentally different from later Hebrew interpretations, when the Jewish nation tries to offer reasons why the nation fared well or poorly. And those reasons are moral.
  • If you pay attention to these laws and are careful to follow them, then the Lord your God will keep his covenant of love with you, as he swore to your forefathers. He will love you and bless you and increase your numbers.
  • Only in recent times have some currents of economics again become aware of the importance of morals and trust in the form of measuring the quality of institutions, the level of justice, business ethics, corruption, and so forth, and examining their influence on the economy,
  • From today’s perspective, we can state that the moral dimension entirely disappeared from economic thought for a long time, especially due to the implementation of Mandeville’s concept of private vices that contrarily support the public welfare
  • Without being timid, we can say this is the first documented attempt to explain the economic cycle. The economic cycle, the explanation of which is to this day a mystery to economists, is explained morally in the Old Testament.
  • But how do we consolidate these two conflicting interpretations of the economic cycle: Can ethics be responsible for it or not? Can we influence reality around us through our acts?
  • it is not within the scope of this book to answer that question; justice has been done to the question if it manages to sketch out the main contours of possible searches for answers.
  • THE ECONOMICS OF GOOD AND EVIL: DOES GOOD PAY OFF? This is probably the most difficult moral problem we could ask.
  • Kant, the most important modern thinker in the area of ethics, answers on the contrary that if we carry out a “moral” act on the basis of economic calculus (therefore we carry out an hedonistic consideration; see below) in the expectation of later recompense, its morality is lost. Recompense, according to the strict Kant, annuls ethics.
  • Inquiring about the economics of good and evil, however, is not that easy. Where would Kant’s “moral dimension of ethics” go if ethics paid? If we do good for profit, the question of ethics becomes a mere question of rationality.
  • Job’s friends try to show that he must have sinned in some way and, in doing so, deserved God’s punishment. They are absolutely unable to imagine a situation in which Job, as a righteous man, would suffer without (moral) cause. Nevertheless, Job insists that he deserves no punishment because he has committed no offense: “God has wronged me and drawn his net around me.”94
  • But Job remains righteous, even though it does not pay to do so: Though he slay me, yet will I hope in him.95 And till I die, I will not deny my integrity I will maintain my righteousness and never let go of it; my conscience will not reproach me as long as I live.96
  • He remains righteous, even if his only reward is death. What economic advantage could he have from that?
  • morals cannot be considered in the economic dimension of productivity and calculus. The role of the Hebrews was to do good, whether it paid off or not. If good (outgoing) is rewarded by incoming goodness, it is a bonus,99 not a reason to do outgoing good. Good and reward do not correlate to each other.
  • This reasoning takes on a dimension of its own in the Old Testament. Good (incoming) has already happened to us. We must do good (outgoing) out of gratitude for the good (incoming) shown to us in the past.
  • So why do good? After all, suffering is the fate of many biblical figures. The answer can only be: For good itself. Good has the power to be its own reward. In this sense, goodness gets its reward, which may or may not take on a material dimension.
  • the Hebrews offered an interesting compromise between the teachings of the Stoics and Epicureans. We will go into it in detail later, so only briefly
  • constraint. It calls for bounded optimalization (with limits). A kind of symbiosis existed between the legitimate search for one’s own utility (or enjoyment of life) and maintaining rules, which are not negotiable and which are not subject to optimalization.
  • In other words, clear (exogenously given) rules exist that must be observed and cannot be contravened. But within these borders it is absolutely possible, and even recommended, to increase utility.
  • the mining of enjoyment must not come at the expense of exogenously given rules. “Judaism comes therefore to train or educate the unbounded desire … for wealth, so that market activities and patterns of consumption operate within a God-given morality.”102
  • The Epicureans acted with the goal of maximizing utility without regard for rules (rules developed endogenously, from within the system, computed from that which increased utility—this was one of the main trumps of the Epicurean school; they did not need exogenously given norms, and argued that they could “calculate” ethics (what to do) for every given situation from the situation itself).
  • The Stoics could not seek their enjoyment—or, by another name, utility. They could not in any way look back on it, and in no way could they count on it. They could only live according to rules (the greatest weakness of this school was to defend where exogenously the given rules came from and whether they are universal) and take a indifferent stand to the results of their actions.
  • To Love the Law The Jews not only had to observe the law (perhaps the word covenant would be more appropriate), but they were to love it because it was good.
  • Their relationship to the law was not supposed to be one of duty,105 but one of gratitude, love. Hebrews were to do good (outgoing), because goodness (incoming) has already been done to them.
  • This is in stark contrast with today’s legal system, where, naturally, no mention of love or gratefulness exists. But God expects a full internalization of the commandments and their fulfillment with love, not as much duty. By no means was this on the basis of the cost-benefit analyses so widespread in economics today, which determines when it pays to break the law and when not to (calculated on the basis of probability of being caught and the amount of punishment vis-à-vis the possible gain).
  • And now, O Israel, what does the Lord your God ask of you but to fear the Lord your God, to walk in all his ways, to love him, to serve the Lord your God with all your heart and with all your soul, and to observe the Lord’s commands and decrees that I am giving you today for your own good? To the Lord your God belong the heavens, even the highest heavens, the earth and everything in it. Yet the Lord set his affection on your forefathers and loved them….
  • the principle of doing good (outgoing) on the basis of a priori demonstrated good (incoming) was also taken over by the New Testament. Atonement itself is based on an a priori principle; all our acts are preceded by good.
  • The Hebrews, originally a nomadic tribe, preferred to be unrestrained and grew up in constant freedom of motion.
  • Human laws, if they are in conflict with the responsibilities given by God, are subordinate to personal responsibility, and a Jew cannot simply join the majority, even if it is legally allowed. Ethics, the concept of good, is therefore always superior to all local laws, rules, and customs:
  • THE SHACKLES OF THE CITY Owing to the Hebrew’s liberation from Egyptian slavery, freedom and responsibility become the key values of Jewish thought.
  • Laws given by God are binding for Jews, and God is the absolute source of all values,
  • The Hebrew ideal is represented by the paradise of the Garden of Eden, not a city.116 The despised city civilization or the tendency to see in it a sinful and shackling way of life appears in glimpses and allusions in many places in the Old Testament.
  • The nomadic Jewish ethos is frequently derived from Abraham, who left the Chaldean city of Ur on the basis of a command:
  • In addition, they were aware of a thin two-way line between owner and owned. We own material assets, but—to a certain extent—they own us and tie us down. Once we become used to a certain material
  • This way of life had understandably immense economic impacts. First, such a society lived in much more connected relationships, where there was no doubt that everyone mutually depended on each other. Second, their frequent wanderings meant the inability to own more than they could carry; the gathering up of material assets did not have great weight—precisely because the physical weight (mass) of things was tied to one place.
  • One of Moses’s greatest deeds was that he managed to explain to his nation once and for all that it is better to remain hungry and liberated than to be a slave with food “at no cost.”
  • SOCIAL WELFARE: NOT TO ACT IN THE MANNER OF SODOM
  • regulations is developed in the Old Testament, one we hardly find in any other nation of the time. In Hebrew teachings, aside from individual utility, indications of the concept of maximalizing utility societywide appear for the first time as embodied in the Talmudic principle of Kofin al midat S´dom, which can be translated as “one is compelled not to act in the manner of Sodom” and to take care of the weaker members of society.
  • In a jubilee year, debts were to be forgiven,125 and Israelites who fell into slavery due to their indebtedness were to be set free.126
  • Such provisions can be seen as the antimonopoly and social measures of the time. The economic system even then had a clear tendency to converge toward asset concentration, and therefore power as well. It would appear that these provisions were supposed to prevent this process
  • Land at the time could be “sold,” and it was not sale, but rent. The price (rent) of real estate depended on how long there was until a forgiveness year. It was about the awareness that we may work the land, but in the last instance we are merely “aliens and strangers,” who have the land only rented to us for a fixed time. All land and riches came from the Lord.
  • These provisions express a conviction that freedom and inheritance should not be permanently taken away from any Israelite. Last but not least, this system reminds us that no ownership lasts forever and that the fields we plow are not ours but the Lord’s.
  • Glean Another social provision was the right to glean, which in Old Testament times ensured at least basic sustenance for the poorest. Anyone who owned a field had the responsibility not to harvest it to the last grain but to leave the remains in the field for the poor.
  • Tithes and Early Social Net Every Israelite also had the responsibility of levying a tithe from their entire crop. They had to be aware from whom all ownership comes and, by doing so, express their thanks.
  • “Since the community has an obligation to provide food, shelter, and basic economic goods for the needy, it has a moral right and duty to tax its members for this purpose. In line with this duty, it may have to regulate markets, prices and competition, to protect the interests of its weakest members.”135
  • In Judaism, charity is not perceived as a sign of goodness; it is more of a responsibility. Such a society then has the right to regulate its economy in such a way that the responsibility of charity is carried out to its satisfaction.
  • With a number of responsibilities, however, comes the difficulty of getting them into practice. Their fulfillment, then, in cases when it can be done, takes place gradually “in layers.” Charitable activities are classified in the Talmud according to several target groups with various priorities, classified according to, it could be said, rules of subsidiarity.
  • Do not mistreat an alien or oppress him, for you were aliens in Egypt.140 As one can see, aside from widows and orphans, the Old Testament also includes immigrants in its area of social protection.141 The Israelites had to have the same rules apply for them as for themselves—they could not discriminate on the basis of their origin.
  • ABSTRACT MONEY, FORBIDDEN INTEREST, AND OUR DEBT AGE If it appears to us that today’s era is based on money and debt, and our time will be written into history as the “Debt age,” then it will certainly be interesting to follow how this development occurred.
  • Money is a social abstractum. It is a social agreement, an unwritten contract.
  • The first money came in the form of clay tablets from Mesopotamia, on which debts were written. These debts were transferable, so the debts became currency. In the end, “It is no coincidence that in English the root of ‘credit’ is ‘credo,’ the Latin for ‘I believe.’”
  • To a certain extent it could be said that credit, or trust, was the first currency. It can materialize, it can be embodied in coins, but what is certain is that “money is not metal,” even the rarest metal, “it is trust inscribed,”
  • Inseparably, with the original credit (money) goes interest. For the Hebrews, the problem of interest was a social issue: “If you lend money to one of my people among you who is needy, do not be like a moneylender; charge him no interest.”
  • there were also clearly set rules setting how far one could go in setting guarantees and the nonpayment of debts. No one should become indebted to the extent that they could lose the source of their livelihood:
  • In the end, the term “bank” comes from the Italian banci, or the benches that Jewish lenders sat on.157
  • Money is playing not only its classical roles (as a means of exchange, a holder of value, etc.) but also a much greater, stronger role: It can stimulate, drive (or slow down) the whole economy. Money plays a national economic role.
  • In the course of history, however, the role of loans changed, and the rich borrowed especially for investment purposes,
  • Today the position and significance of money and debt has gone so far and reached such a dominant position in society that operating with debts (fiscal policy) or interest or money supply (monetary policy) means that these can, to a certain extent, direct (or at least strongly influence) the whole economy and society.
  • In such a case a ban on interest did not have great ethical significance. Thomas Aquinas, a medieval scholar (1225-1274), also considers similarly; in his time, the strict ban on lending with usurious interest was loosened, possibly due to him.
  • As a form of energy, money can travel in three dimensions, vertically (those who have capital lend to those who do not) and horizontally (speed and freedom in horizontal or geographic motion has become the by-product—or driving force?—of globalization). But money (as opposed to people) can also travel through time.
  • money is something like energy that can travel through time. And it is a very useful energy, but at the same time very dangerous as well. Wherever
  • Aristotle condemned interest162 not only from a moral standpoint, but also for metaphysical reasons. Thomas Aquinas shared the same fear of interest and he too argued that time does not belong to us, and that is why we must not require interest.
  • MONEY AS ENERGY: TIME TRAVEL AND GROSS DEBT PRODUCT (GDP)
  • Due to this characteristic, we can energy-strip the future to the benefit of the present. Debt can transfer energy from the future to the present.163 On the other hand, saving can accumulate energy from the past and send it to the present.
  • labor was not considered degrading in the Old Testament. On the contrary, the subjugation of nature is even a mission from God that originally belonged to man’s very first blessings.
  • LABOR AND REST: THE SABBATH ECONOMY
  • The Jews as well as Aristotle behaved very guardedly toward loans. The issue of interest/usury became one of the first economic debates. Without having an inkling of the future role of economic policy (fiscal and monetary), the ancient Hebrews may have unwittingly felt that they were discovering in interest a very powerful weapon, one that can be a good servant, but (literally) an enslaving master as well.
  • It’s something like a dam. When we build one, we are preventing periods of drought and flooding in the valley; we are limiting nature’s whims and, to a large extent, avoiding its incalculable cycles. Using dams, we can regulate the flow of water to nearly a constant. With it we tame the river (and we can also gain
  • But if we do not regulate the water wisely, it may happen that we would overfill the dam and it would break. For the cities lying in the valley, their end would be worse than if a dam were never there.
  • If man lived in harmony with nature before, now, after the fall, he must fight; nature stands against him and he against it and the animals. From the Garden we have moved unto a (battle)field.
  • Only after man’s fall does labor turn into a curse.168 It could even be said that this is actually the only curse, the curse of the unpleasantness of labor, that the Lord places on Adam.
  • Both Plato and Aristotle consider labor to be necessary for survival, but that only the lower classes should devote themselves to it so that the elites would not have to be bothered with it and so that they could devote themselves to “purely spiritual matters—art, philosophy, and politics.”
  • Work is also not only a source of pleasure but a social standing; It is considered an honor. “Do you see a man skilled in his work? He will serve before kings.”170 None of the surrounding cultures appreciate work as much. The idea of the dignity of labor is unique in the Hebrew tradition.
  • Hebrew thinking is characterized by a strict separation of the sacred from the profane. In life, there are simply areas that are holy, and in which it is not allowed to economize, rationalize, or maximize efficiency.
  • good example is the commandment on the Sabbath. No one at all could work on this day, not even the ones who were subordinate to an observant Jew:
  • the message of the commandment on Saturday communicated that people were not primarily created for labor.
  • Paradoxically, it is precisely this commandment out of all ten that is probably the most violated today.
  • Aristotle even considers labor to be “a corrupted waste of time which only burdens people’s path to true honour.”
  • we have days when we must not toil connected (at least lexically) with the word meaning emptiness: the English term “vacation” (or emptying), as with the French term, les vacances, or German die Freizeit, meaning open time, free time, but also…
  • Translated into economic language: The meaning of utility is not to increase it permanently but to rest among existing gains. Why do we learn how to constantly increase gains but not how to…
  • This dimension has disappeared from today’s economics. Economic effort has no goal at which it would be possible to rest. Today we only know growth for growth’s sake, and if our company or country prospers, that does not…
  • Six-sevenths of time either be dissatisfied and reshape the world into your own image, man, but one-seventh you will rest and not change the creation. On the seventh day, enjoy creation and enjoy the work of your hands.
  • the purpose of creation was not just creating but that it had an end, a goal. The process was just a process, not a purpose. The whole of Being was created so…
  • Saturday was not established to increase efficiency. It was a real ontological break that followed the example of the Lord’s seventh day of creation. Just as the Lord did not rest due to tiredness or to regenerate strength; but because He was done. He was done with His work, so that He could enjoy it, to cherish in His creation.
  • If we believe in rest at all today, it is for different reasons. It is the rest of the exhausted machine, the rest of the weak, and the rest of those who can’t handle the tempo. It’s no wonder that the word “rest…
  • Related to this, we have studied the first mention of a business cycle with the pharaoh’s dream as well as seen a first attempt (that we may call…
  • We have tried to show that the quest for a heaven on Earth (similar to the Jewish one) has, in its desacralized form, actually also been the same quest for many of the…
  • We have also seen that the Hebrews tried to explain the business cycle with morality and ethics. For the Hebrews,…
  • ancient Greek economic ethos, we will examine two extreme approaches to laws and rules. While the Stoics considered laws to be absolutely valid, and utility had infinitesimal meaning in their philosophy, the Epicureans, at least in the usual historical explanation, placed utility and pleasure in first place—rules were to be made based on the principle of utility.
  • CONCLUSION: BETWEEN UTILITY AND PRINCIPLE The influence of Jewish thought on the development of market democracy cannot be overestimated. The key heritage for us was the lack of ascetic perception of the world, respect to law and private…
  • We have tried to show how the Torah desacralized three important areas in our lives: the earthly ruler, nature,…
  • What is the relationship between the good and evil that we do (outgoing) and the utility of disutility that we (expect to) get as a reward (incoming)? We have seen…
  • The Hebrews never despised material wealth; on contrary, the Jewish faith puts great responsibility on property management. Also the idea of progress and the linear perception of time gives our (economic)…
  • the Hebrews managed to find something of a happy compromise between both of these principles.
  • will not be able to completely understand the development of the modern notion of economics without understanding the disputes between the Epicureans and the Stoics;
  • poets actually went even further, and with their speech they shaped and established reality and truth. Honor, adventure, great deeds, and the acclaim connected with them played an important role in the establishment of the true, the real.
  • those who are famous will be remembered by people. They become more real, part of the story, and they start to be “realized,” “made real” in the lives of other people. That which is stored in memory is real; that which is forgotten is as if it never existed.
  • Today’s scientific truth is founded on the notion of exact and objective facts, but poetic truth stands on an interior (emotional) consonance with the story or poem. “It is not addressed first to the brain … [myth] talks directly to the feeling system.”
  • “epic and tragic poets were widely assumed to be the central ethical thinkers and teachers of Greece; nobody thought of their work as less serious, less aimed at truth, than the speculative prose treatises of historians and philosophers.”5 Truth and reality were hidden in speech, stories, and narration.
  • Ancient philosophy, just as science would later, tries to find constancy, constants, quantities, inalterabilities. Science seeks (creates?) order and neglects everything else as much as it can. In their own experiences, everyone knows that life is not like that,
  • Just as scientists do today, artists drew images of the world that were representative, and therefore symbolic, picturelike, and simplifying (but thus also misleading), just like scientific models, which often do not strive to be “realistic.”
  • general? In the end, poetry could be more sensitive to the truth than the philosophical method or, later, the scientific method. “Tragic poems, in virtue of their subject matter and their social function, are likely to confront and explore problems about human beings and luck that a philosophical text might be able to omit or avoid.”8
Javier E

Can America's Middle Class Be Saved from a New Depression? - The New York Times - 0 views

  • In 2016 the Pew Research Center released a study that examined 229 metropolitan areas across the country: In 203, the share of adults living in middle-­income households declined from 2000 to 2014, while the share of adults living in lower- and upper-income homes each rose in more than 150 areas.
  • At the same time, the cost of minivans, homes, health care and college tuition has increased. Families reacted to this new reality by plunging themselves into debt and neglecting to save,
  • in America, you become middle-class by consuming: If you cannot afford a home in a respectable school district, a pet, summer vacations and so on, you have not ‘‘made it.’’ Despite their outward trappings of prosperity — and often because of them — many middle-class families have negligible savings and too much debt.
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  • But the American middle class is neither stable nor self-reliant. Recognizing this is the prerequisite to determining what we need to weather this storm.
  • The American middle class long has been presented as evidence that self-reliance leads to stability, even prosperity. The very existence of a middle class appears to prove the notion that if we work hard enough and make the right choices, everything will be OK — and also its corollary: that the poor must have somehow brought poverty upon themselves and that we, industrious workers that we are, will surely never be one of them
  • Before the pandemic, Americans saved approximately 8 percent of their income, which would cover a fraction of their living expenses. American households carry an average of $111,198 in debt. Even in flush times, this kind of financial exposure can be stressful. During long spells of unemployment and underemployment, it can lead to ruin.
  • virtually every American has benefited from some form of public aid, from programs widely recognized as ‘‘welfare,’’ like food stamps, to more hidden subsidies issued through the tax code, like government-subsidized retirement benefits
  • the average middle-class American family (with a before-tax household income of $66,400) receives more help from the government than it pays in federal taxes and collects more aid than the average American family in the lowest income quintile (with a before-tax household income of $24,600).
  • We’re all on the dole, however meager it may be.
  • countries with more robust welfare states have been able to respond to the recent economic downturn with a high level of competence and the kind of deep investment that the Covid-19 pandemic demands.
  • In nations like Britain and Germany, workers have been allowed to keep their jobs even as businesses shuttered because their governments are paying all or most of their wages.
  • Because Germany already had a system, known as Kurzarbeit, in place to pay workers whose hours are reduced during economic crises, it didn’t need to reinvent the wheel when the coronavirus began to spread. Other countries that didn’t have such a system in place, including Ireland and Denmark, quickly fashioned one.
  • it’s not just the design of a nation’s welfare infrastructure that matters but also its level of commitment to protecting basic human needs.
  • just as states go to war with the army they have, in a recession they tend to catch the unemployed with the safety net they have
  • America not only lacks many programs that buffer workers from economic calamity — such as the right to housing or universal health care — it is also bereft of a national culture characterized by social solidarity and faith in government.
  • About a third of Americans express trust in the government, unlike most Germans, Norwegians and Swiss.
  • countries that have been able to bend the curve of Covid-19 cases, both in Europe (Switzerland, France) and Asia (South Korea, Taiwan), have been those where citizens recognize the importance of strong government.
  • Countries that have yet to respond as effectively — including Brazil, the United Kingdom and the United States — have publics deeply skeptical of their governments as well as current heads of state (Jair Bolsonaro, Boris Johnson and Donald Trump) who share, and stoke, that sentiment.
  • ‘‘The American public consistently expresses a desire for more government effort and higher levels of spending for almost every aspect of the welfare state,’’
  • The New Deal erected an institutional scaffolding designed to provide unprecedented stability and predictability for the American economy,’
  • The quarter century of prosperity that followed World War II was rooted in the profound structural reforms of the New Deal. A strong market was made possible by strong government intervention.
  • It is now widely acknowledged that the federal government should have acted sooner and spent bigger when addressing the 2008 financial crisis. In March, Neel Kashkari, who oversaw the rescue package (the Troubled Asset Relief Program) and is now president and chief executive of the Federal Reserve Bank of Minneapolis, wrote, ‘‘My experience underscores that if there is a principle policymakers need to keep in mind going forward, it’s this: Err on the side of helping as many workers and businesses as possible rather than on prudence.’’
  • In 2008, the government hobbled the rescue package by trying to make sure that only ‘‘deserving’’ Americans received help, slowing and narrowing relief. ‘‘The American people ultimately paid more because of our attempts to save them money,’’ Kashkari wrote with hindsight.
  • ‘‘Adding $3 trillion in spending,’’ as the HEROES Act would, ‘‘is necessary for spending after the summer and most importantly to start helping states.’’ J. W. Mason, an associate professor of economics at John Jay College in New York, pointed out that $3 trillion corresponds to a 20 percent decline in private demand, which, based on what happened in the 2008 recession, we should prepare for.
Javier E

Studies find huge benefit from life-saving social distancing policies, despite economic... - 0 views

  • the exact kind of cost-benefit analysis implied by the president.
  • the economic benefits from lives saved by efforts to “flatten the curve” outweighed the projected massive hit to the nation’s economy by a staggering $5.2 trillion
  • Another study by two University of Chicago economists estimated the savings from social distancing could be so huge, “it is difficult to think of any intervention with such large potential benefits to American citizens.”
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  • the economists are saying, “the cure” doesn’t come at a cost at all when factoring in the economic value of the lives saved.
  • What these academics are doing — and what Trump’s tweet is getting at — is measuring how the extreme efforts to avoid covid-19 deaths compare to the devastating economic fallout.
  • They do this by putting a price tag on the deaths avoided. It’s something the federal government does all the time
  • Value of a Statistical Life or VSL — is the amount people are willing to spend to cut risk enough to save one life.
  • The VSL at most federal agencies, developed over several decades, is about $10 million. If a new regulation is estimated to avoid one death a year, it can cost up to $10 million and still make economic sense.
  • a cost-benefit analysis using VSL, while far from perfect, would force policymakers to confront the reality of their decisions in a much more precise way. Without it, they are left to gut feelings, educated guesses or political arguments.
  • “It’s missing from the discussion,” said Linda Thunstrom, an economist at the University of Wyoming, “so instead you have such loud voices on both sides — advocating that all lives should be saved or that, no, we need to open the economy. But there are trade-offs. It’s hard. But we should be talking about them.”
  • The economist’s answer is to ask people and observe their behavior.”
  • Economists use public opinion surveys on mortality risk. They look at how much more dangerous jobs pay. They study what people are willing to spend for safety devices, such as bike helmets. The information is then used to calculate VSL.
  • “Now we’re just trying to figure out how to balance two difficult things — lives lost and incomes lost.”
  • The White House’s Office of Management and Budget said it wasn’t doing a pandemic cost-benefit analysis, either
  • the CDC is not doing any cost-benefit analysis of the pandemic’s social distancing measures, agency spokesman Tom Skinner said.
  • The White House Council of Economic Advisers, through spokeswoman Rachael Slobodien, declined to comment on whether it has looked into the issue.
  • The Wyoming economists sent a copy of their cost-benefit study to the White House
  • The study estimated the U.S. economy would shrink less from an uncontrolled pandemic (GDP declines by $6.49 trillion) than a pandemic curtailed by social distancing (GDP declines by $13.7 trillion)
  • But social distancing would slash the peak infection rate in half, resulting in 1.2 million fewer deaths — leading to a VSL of $12 trillion
  • So the value of social distancing would work out to a net benefit of $5.16 trillion, the study estimated.
  • So far, the number of deaths has been lower than the study projected, Thunstrom said, “so social distancing has done more than what we assumed.
  • The Wyoming study also noted potential costs from the lack of cost-benefit analysis: The public health savings might not be well understood, so the public focuses solely on job losses and declining GDP, potentially eroding voluntary compliance with valuable social distancing measures.
  • It could be the pandemic’s VSL should be even higher than the traditional government number of $10 million — and thus the efforts to avoid covid-19 even more valuable.
  • The virus is dreaded, and studies have shown people are willing to pay more to avoid the risk of dying from cancer than an auto acciden
  • And it’s contagious. VSL doesn’t capture what people would pay to avoid a disease that could kill someone else.
  • The government’s VSL also doesn’t reflect willingness to avoid injury, such as the strokes or breathing problems associated with covid-19 cases.
  • The Chicago study examined this point, using a VSL that declines with age — finding that even though about 90 percent of the benefit would go to saving the lives of people at least 50 years old, social distancing still makes economic sense for the nation as a whole.
  • the most controversial aspect is whether older people should be assigned the same VSL as younger people. The Environmental Protection Agency in 2002 suggested a clean air rule would offer less of a benefit to senior citizens. Some academics agreed with the agency’s reasoning. But when critics decried it as a “senior discount,” it proved politically untenable.
Javier E

Want a Green New Deal? Here's a better one. - The Washington Post - 0 views

  • the goal is so fundamental that policymakers should focus above all else on quickly and efficiently decarbonizing. They should not muddle this aspiration with other social policy, such as creating a federal jobs guarantee,
  • the goal is so monumental that the country cannot afford to waste dollars in its pursuit. If the market can redirect spending most efficiently, money should not be misallocated on vast new government spending or mandates.
  • we propose our own Green New Deal. It relies both on smart government intervention — and on transforming the relentless power of the market from an obstacle to a centerpiece of the solution.
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  • U.S. natural gas is far less damaging to the environment than coal. It has become so cheap that it is displacing coal in electricity generation, driving down emissions. To others, Cove Point is an environmental catastrophe. Natural gas is still a fossil fuel, and burning it releases lots of greenhouse-gas emissions, which cause climate change. Both arguments are right.
  • society must eliminate its carbon dependency. It cannot burn vast amounts of any fossil fuel for “decades and decades,” as Mr. Farrell hopes, unless there is a revolution in emissions capture technology. Even in the short term, U.S. emissions are rising, despite the restraint that stepped-up natural-gas burning has provided. The government must demand more change, more quickly.
  • One objection is that carbon pricing is not powerful enough. The European Union’s carbon pricing program has not worked well. But that is a failure of design and political will. A carbon price equal to the challenge would start high and rise higher, sending a much stronger price signal.
  • carbon pricing is still the best first-line policy
  • A high-enough carbon price would shape millions of choices, small and large, about what to buy, how to invest and how to live that would result in substantial emissions cuts. People would prioritize the easiest changes, minimizing the costs of the energy transition. With a price that steadily rose, market forces would steadily wring carbon dioxide out of the economy — without the government trying to dictate exactly how, wasting money on special-interest boondoggles.
  • The Intergovernmental Panel on Climate Change found last year that an average carbon price between 2030 and the end of the century of $100, $200 or even $300 per ton of carbon dioxide would result in huge greenhouse-gas emissions cuts, could restrain warming to the lowest safety threshold of 1.5 degrees Celsius and would almost certainly prevent the world from breaching the traditional warming limit of 2 degrees Celsius
  • Republicans never embraced the market-based idea, even though conservative economists admit its appeal, because they never accepted the need to act at all. Some environmentalists, meanwhile, are increasingly wary of carbon pricing. The Democrats’ Green New Deal, which is noncommittal on the policy, reflects the accelerating drift from the obvious.
  • Another criticism is that carbon pricing hurts the poor, who would suffer most when prices rose. But the revenue from carbon pricing could be recycled back to Americans in a progressive way, and most people would end up whole or better off.
  • A third objection is that carbon pricing is politically impossible, because it reveals the cost of fighting global warming in the prices people pay
  • This is a leadership challenge, not a policy challenge. More than 40 governments globally, including several states, have found the political will to embrace carbon pricing programs, which is the only option that would plausibly be bipartisan.
  • One objection does have merit: Though carbon pricing would spur huge change in infrastructure and power generation, that alone would not be enough. It would not stimulate all the innovation the nation needs in the climate fight, nor would it change behaviors in circumstances where the desired price signal is muted or nonexistent
  • Start with carbon pricing. Then fill in the gaps.
  • , economists know that companies that invest in research and development do not get rewarded for the full social value of their work. Others benefit from their innovations without paying. Consequently, firms do not invest in research as much as society should want
  • It would take only a small fraction of the revenue a carbon pricing system would produce to fund a much more ambitious clean-energy research agenda. Basic scientific research and applied research programs such as ARPA-E should be scaled up dramatically
  • The government must also account for the fact that not all greenhouse-gas emissions come from burning the fuels that a carbon pricing program would reach — coal, oil and gas. How would the government charge farmers for the methane their cows emit or for the greenhouse gases released when they till their soil? How about emissions from cement, ammonia and steel production? The federal government would have to tailor programs to the agricultural and industrial sectors, which might include judicious use of incentives and mandates.
  • only government can ensure adequate mass transit options. Local governments could help with zoning laws to encourage people to live in denser, more walkable communities. The federal government should also press automakers to steadily improve fuel efficiency.
  • That starts with making sure that emissions-cutting efforts at home do not have unintended consequences. If the United States puts a price on greenhouse-gas emissions, other countries would lure U.S. manufacturers with the promise of lax environmental rules. Relocated manufacturers could then export their goods to the United States. The net effect would be no benefit for the planet but fewer U.S. manufacturing jobs.
  • One response is a kind of tariff on goods entering the country from places with weaker carbon-dioxide policies. That would both eliminate the incentive to offshore manufacturing and encourage countries to strengthen their own rules.
  • Participating in the agreement would give the United States a forum — and a basis — to press other nations to reduce emissions.
  • Foreign aid to prevent deforestation could be among the most cost-effective climate-preserving measures. Helping other countries to replace archaic cooking stoves that produce noxious fumes would help cut emissions and improve quality of life across the developing world.
  • There are a lot of bad ideas out there.
  • The Green New Deal that some Democrats have embraced is case in point. In its most aggressive form, the plan suggests the country could reach net-zero greenhouse-gas emissions by 2030, an impossible goal
  • that would be more spent every three years than the total amount the country spent on World War II.
  • At the same time, the Democratic plan would guarantee every American “high-quality health care” and “a job with a family-sustaining wage, adequate family and medical leave, paid vacations, and retirement security.” These expensive aspirations, no matter how laudable, would do nothing to arrest greenhouse-gas emissions.
  • Massive social reform will not protect the climate. Marshaling every dollar to its highest benefit is the strongest plan.
Javier E

Opinion | It's Time to Break Up Facebook - The New York Times - 1 views

  • For many people today, it’s hard to imagine government doing much of anything right, let alone breaking up a company like Facebook. This isn’t by coincidence.
  • Starting in the 1970s, a small but dedicated group of economists, lawyers and policymakers sowed the seeds of our cynicism. Over the next 40 years, they financed a network of think tanks, journals, social clubs, academic centers and media outlets to teach an emerging generation that private interests should take precedence over public ones
  • Their gospel was simple: “Free” markets are dynamic and productive, while government is bureaucratic and ineffective. By the mid-1980s, they had largely managed to relegate energetic antitrust enforcement to the history books.
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  • This shift, combined with business-friendly tax and regulatory policy, ushered in a period of mergers and acquisitions that created megacorporations
  • In the past 20 years, more than 75 percent of American industries, from airlines to pharmaceuticals, have experienced increased concentration, and the average size of public companies has tripled. The results are a decline in entrepreneurship, stalled productivity growth, and higher prices and fewer choices for consumers.
  • Because Facebook so dominates social networking, it faces no market-based accountability. This means that every time Facebook messes up, we repeat an exhausting pattern: first outrage, then disappointment and, finally, resignation.
  • Over a decade later, Facebook has earned the prize of domination. It is worth half a trillion dollars and commands, by my estimate, more than 80 percent of the world’s social networking revenue. It is a powerful monopoly, eclipsing all of its rivals and erasing competition from the social networking category.
  • Facebook’s monopoly is also visible in its usage statistics. About 70 percent of American adults use social media, and a vast majority are on Facebook products
  • Over two-thirds use the core site, a third use Instagram, and a fifth use WhatsApp.
  • When it hasn’t acquired its way to dominance, Facebook has used its monopoly position to shut out competing companies or has copied their technology.
  • Facebook’s dominance is not an accident of history. The company’s strategy was to beat every competitor in plain view, and regulators and the government tacitly — and at times explicitly — approved
  • The F.T.C.’s biggest mistake was to allow Facebook to acquire Instagram and WhatsApp. In 2012, the newer platforms were nipping at Facebook’s heels because they had been built for the smartphone, where Facebook was still struggling to gain traction. Mark responded by buying them, and the F.T.C. approved.
  • Neither Instagram nor WhatsApp had any meaningful revenue, but both were incredibly popular. The Instagram acquisition guaranteed Facebook would preserve its dominance in photo networking, and WhatsApp gave it a new entry into mobile real-time messaging.
  • As a result of all this, would-be competitors can’t raise the money to take on Facebook. Investors realize that if a company gets traction, Facebook will copy its innovations, shut it down or acquire it for a relatively modest sum
  • In 2014, the rules favored curiosity-inducing “clickbait” headlines. In 2016, they enabled the spread of fringe political views and fake news, which made it easier for Russian actors to manipulate the American electorate.
  • As markets become more concentrated, the number of new start-up businesses declines. This holds true in other high-tech areas dominated by single companies, like search (controlled by Google) and e-commerce (taken over by Amazon)
  • I don’t blame Mark for his quest for domination. He has demonstrated nothing more nefarious than the virtuous hustle of a talented entrepreneur
  • It’s on our government to ensure that we never lose the magic of the invisible hand. How did we allow this to happen
  • a narrow reliance on whether or not consumers have experienced price gouging fails to take into account the full cost of market domination
  • It doesn’t recognize that we also want markets to be competitive to encourage innovation and to hold power in check. And it is out of step with the history of antitrust law. Two of the last major antitrust suits, against AT&T and IBM in the 1980s, were grounded in the argument that they had used their size to stifle innovation and crush competition.
  • It is a disservice to the laws and their intent to retain such a laserlike focus on price effects as the measure of all that antitrust was meant to do.”
  • Facebook is the perfect case on which to reverse course, precisely because Facebook makes its money from targeted advertising, meaning users do not pay to use the service. But it is not actually free, and it certainly isn’t harmless.
  • We pay for Facebook with our data and our attention, and by either measure it doesn’t come cheap.
  • The choice is mine, but it doesn’t feel like a choice. Facebook seeps into every corner of our lives to capture as much of our attention and data as possible and, without any alternative, we make the trade.
  • The vibrant marketplace that once drove Facebook and other social media companies to compete to come up with better products has virtually disappeared. This means there’s less chance of start-ups developing healthier, less exploitative social media platforms. It also means less accountability on issues like privacy.
  • The most problematic aspect of Facebook’s power is Mark’s unilateral control over speech. There is no precedent for his ability to monitor, organize and even censor the conversations of two billion people.
  • Facebook engineers write algorithms that select which users’ comments or experiences end up displayed in the News Feeds of friends and family. These rules are proprietary and so complex that many Facebook employees themselves don’t understand them.
  • What started out as lighthearted entertainment has become the primary way that people of all ages communicate online.
  • In January 2018, Mark announced that the algorithms would favor non-news content shared by friends and news from “trustworthy” sources, which his engineers interpreted — to the confusion of many — as a boost for anything in the category of “politics, crime, tragedy.”
  • As if Facebook’s opaque algorithms weren’t enough, last year we learned that Facebook executives had permanently deleted their own messages from the platform, erasing them from the inboxes of recipients; the justification was corporate security concerns.
  • No one at Facebook headquarters is choosing what single news story everyone in America wakes up to, of course. But they do decide whether it will be an article from a reputable outlet or a clip from “The Daily Show,” a photo from a friend’s wedding or an incendiary call to kill others.
  • Mark knows that this is too much power and is pursuing a twofold strategy to mitigate it. He is pivoting Facebook’s focus toward encouraging more private, encrypted messaging that Facebook’s employees can’t see, let alone control
  • Second, he is hoping for friendly oversight from regulators and other industry executives.
  • In an op-ed essay in The Washington Post in March, he wrote, “Lawmakers often tell me we have too much power over speech, and I agree.” And he went even further than before, calling for more government regulation — not just on speech, but also on privacy and interoperability, the ability of consumers to seamlessly leave one network and transfer their profiles, friend connections, photos and other data to another.
  • I don’t think these proposals were made in bad faith. But I do think they’re an attempt to head off the argument that regulators need to go further and break up the company. Facebook isn’t afraid of a few more rules. It’s afraid of an antitrust case and of the kind of accountability that real government oversight would bring.
  • We don’t expect calcified rules or voluntary commissions to work to regulate drug companies, health care companies, car manufacturers or credit card providers. Agencies oversee these industries to ensure that the private market works for the public good. In these cases, we all understand that government isn’t an external force meddling in an organic market; it’s what makes a dynamic and fair market possible in the first place. This should be just as true for social networking as it is for air travel or pharmaceuticals.
  • Just breaking up Facebook is not enough. We need a new agency, empowered by Congress to regulate tech companies. Its first mandate should be to protect privacy.
  • First, Facebook should be separated into multiple companies. The F.T.C., in conjunction with the Justice Department, should enforce antitrust laws by undoing the Instagram and WhatsApp acquisitions and banning future acquisitions for several years.
  • How would a breakup work? Facebook would have a brief period to spin off the Instagram and WhatsApp businesses, and the three would become distinct companies, most likely publicly traded.
  • Facebook is indeed more valuable when there are more people on it: There are more connections for a user to make and more content to be shared. But the cost of entering the social network business is not that high. And unlike with pipes and electricity, there is no good argument that the country benefits from having only one dominant social networking company.
  • others worry that the breakup of Facebook or other American tech companies could be a national security problem. Because advancements in artificial intelligence require immense amounts of data and computing power, only large companies like Facebook, Google and Amazon can afford these investments, they say. If American companies become smaller, the Chinese will outpace us.
  • The cost of breaking up Facebook would be next to zero for the government, and lots of people stand to gain economically. A ban on short-term acquisitions would ensure that competitors, and the investors who take a bet on them, would have the space to flourish. Digital advertisers would suddenly have multiple companies vying for their dollars.
  • But the biggest winners would be the American people. Imagine a competitive market in which they could choose among one network that offered higher privacy standards, another that cost a fee to join but had little advertising and another that would allow users to customize and tweak their feeds as they saw fit
  • The American government needs to do two things: break up Facebook’s monopoly and regulate the company to make it more accountable to the American people.
  • The Europeans have made headway on privacy with the General Data Protection Regulation, a law that guarantees users a minimal level of protection. A landmark privacy bill in the United States should specify exactly what control Americans have over their digital information, require clearer disclosure to users and provide enough flexibility to the agency to exercise effective oversight over time
  • The agency should also be charged with guaranteeing basic interoperability across platforms.
  • Finally, the agency should create guidelines for acceptable speech on social media
  • We will have to create similar standards that tech companies can use. These standards should of course be subject to the review of the courts, just as any other limits on speech are. But there is no constitutional right to harass others or live-stream violence.
  • These are difficult challenges. I worry that government regulators will not be able to keep up with the pace of digital innovation
  • I worry that more competition in social networking might lead to a conservative Facebook and a liberal one, or that newer social networks might be less secure if government regulation is weak
  • Professor Wu has written that this “policeman at the elbow” led IBM to steer clear “of anything close to anticompetitive conduct, for fear of adding to the case against it.”
  • Finally, an aggressive case against Facebook would persuade other behemoths like Google and Amazon to think twice about stifling competition in their own sectors, out of fear that they could be next.
  • The alternative is bleak. If we do not take action, Facebook’s monopoly will become even more entrenched. With much of the world’s personal communications in hand, it can mine that data for patterns and trends, giving it an advantage over competitors for decades to come.
  • This movement of public servants, scholars and activists deserves our support. Mark Zuckerberg cannot fix Facebook, but our government can.
Javier E

Opinion | Joe Biden Is a Transformational President - The New York Times - 0 views

  • We’re seeing a policy realignment without a partisan realignment.
  • In a polarized era, the legislation is widely popular. Three-quarters of Americans support the law, including 60 percent of Republicans, according to a Morning Consult survey. The Republican members of Congress voted against it, but the G.O.P. shows no interest in turning this into a great partisan battle. As I began to write this on Thursday morning, the Fox News home page had only two stories on the Covid relief bill and dozens on things like the royal family and cancel culture.
  • This is not socialism. This is not the federal government taking control of the commanding heights of the economy. This is not a bunch of programs to restrain corporate power. Americans’ trust in government is still low. This is the Transfer State: government redistributing massive amounts of money by cutting checks to people, and having faith that they spend it in the right ways.
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  • But income inequality, widespread child poverty and economic precarity are the problems of our time. It’s worth taking a risk to tackle all this. At first Biden seemed like the third chapter of the Clinton/Obama center-left era. But this is something new.
  • The law stretches far beyond Covid-19 relief. There’s a billion for national service programs. Black farmers will receive over $4 billion in what looks like a step toward reparations. There’s a huge expansion of health insurance subsidies. Many of these changes, like the child tax credit, may well become permanent.
  • I’m worried about a world in which we spend borrowed money with abandon.
  • As Michael Hendrix of the Manhattan Institute notes, America spent $4.8 trillion in today’s dollars fighting World War II. Over the past year, America has spent over $5.5 trillion fighting the pandemic.
  • There was a premise through American history that if you worked hard you would earn economic security. That’s not as true for millennials and Gen-Z, or many other people across America.
  • The role of government is being redefined. There is now an assumption that government should step in to reduce economic insecurity and inequality.
  • The Covid-19 relief law that was just enacted is one of the most important pieces of legislation of our lifetimes. As Eric Levitz writes in New York magazine, the poorest fifth of households will see their income rise by 20 percent; a family of four with one working and one unemployed parent will receive $12,460 in benefits. Child poverty will be cut in half.
  • This has been one of the most quietly consequential weeks in recent American politics.
  • There’s a billion for national service programs. Black farmers will receive over $4 billion in what looks like a step toward reparations.
  • There’s a huge expansion of health insurance subsidies. Many of these changes, like the child tax credit, may well become permanent.
  • As Michael Hendrix of the Manhattan Institute notes, America spent $4.8 trillion in today’s dollars fighting World War II. Over the past year, America has spent over $5.5 trillion fighting the pandemic.
  • the legislation is widely popular. Three-quarters of Americans support the law, including 60 percent of Republicans,
  • Somehow low-key Joe Biden gets yawns when he promotes progressive policies that would generate howls if promoted by a President Sanders or a President Warren.
  • This moment is like 1981, the dawn of the Reagan Revolution, except in reverse. It’s not just that government is heading in a new direction, it’s that the whole paradigm of the role of government in American life is shifting
  • Biden is not causing these tectonic plates to shift, but he is riding them
  • Reaganism was the right response to the stagflation of the 1970s, but Bidenism is a sensible response to a very different set of economic problems.
  • These realities have created a different emotional climate that the pandemic has magnified — a climate of insecurity and precarity. These realities have also produced an intellectual revolution.
  • It was assumed, even only a decade ago, that the Fed could not just print money with abandon. It was assumed that the government could not wrack up huge debt without spurring inflation and crippling debt payment costs. Both of these concerns have been thrown out the window by large numbers of thinkers
  • We are now experiencing monetary and fiscal policies that would have been unimaginable a decade ago. This is like the moment when the G.O.P. abandoned fiscal conservatism for the go-go excitement of supply-side economics
  • The role of government is being redefined. There is now an assumption that government should step in to reduce economic insecurity and inequality.
  • This is the Transfer State: government redistributing massive amounts of money by cutting checks to people, and having faith that they spend it in the right ways.
  • With the wind at their backs, Democrats are concluding that Biden’s decision to eschew bipartisanship to pass a relief package is better than Barack Obama’s attempts to attract it
  • Republicans have learned that in this new era it’s foolish to fight Democrats on redistribution policy, but they can win elections by fighting culture wars.
  • But income inequality, widespread child poverty and economic precarity are the problems of our time
  • It’s worth taking a risk to tackle all this.
  • At first Biden seemed like the third chapter of the Clinton/Obama center-left era. But this is something new.
Javier E

Peter Thiel Is Taking a Break From Democracy - The Atlantic - 0 views

  • Thiel’s unique role in the American political ecosystem. He is the techiest of tech evangelists, the purest distillation of Silicon Valley’s reigning ethos. As such, he has become the embodiment of a strain of thinking that is pronounced—and growing—among tech founders.
  • why does he want to cut off politicians
  • But the days when great men could achieve great things in government are gone, Thiel believes. He disdains what the federal apparatus has become: rule-bound, stifling of innovation, a “senile, central-left regime.”
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  • Peter Thiel has lost interest in democracy.
  • Thiel has cultivated an image as a man of ideas, an intellectual who studied philosophy with René Girard and owns first editions of Leo Strauss in English and German. Trump quite obviously did not share these interests, or Thiel’s libertarian principles.
  • For years, Thiel had been saying that he generally favored the more pessimistic candidate in any presidential race because “if you’re too optimistic, it just shows you’re out of touch.” He scorned the rote optimism of politicians who, echoing Ronald Reagan, portrayed America as a shining city on a hill. Trump’s America, by contrast, was a broken landscape, under siege.
  • Thiel is not against government in principle, his friend Auren Hoffman (who is no relation to Reid) says. “The ’30s, ’40s, and ’50s—which had massive, crazy amounts of power—he admires because it was effective. We built the Hoover Dam. We did the Manhattan Project,” Hoffman told me. “We started the space program.”
  • Their failure to make the world conform to his vision has soured him on the entire enterprise—to the point where he no longer thinks it matters very much who wins the next election.
  • His libertarian critique of American government has curdled into an almost nihilistic impulse to demolish it.
  • “Voting for Trump was like a not very articulate scream for help,” Thiel told me. He fantasized that Trump’s election would somehow force a national reckoning. He believed somebody needed to tear things down—slash regulations, crush the administrative state—before the country could rebuild.
  • He admits now that it was a bad bet.
  • “There are a lot of things I got wrong,” he said. “It was crazier than I thought. It was more dangerous than I thought. They couldn’t get the most basic pieces of the government to work. So that was—I think that part was maybe worse than even my low expectations.”
  • eid Hoffman, who has known Thiel since college, long ago noticed a pattern in his old friend’s way of thinking. Time after time, Thiel would espouse grandiose, utopian hopes that failed to materialize, leaving him “kind of furious or angry” about the world’s unwillingness to bend to whatever vision was possessing him at the moment
  • Thiel. He is worth between $4 billion and $9 billion. He lives with his husband and two children in a glass palace in Bel Air that has nine bedrooms and a 90-foot infinity pool. He is a titan of Silicon Valley and a conservative kingmaker.
  • “Peter tends to be not ‘glass is half empty’ but ‘glass is fully empty,’” Hoffman told me.
  • he tells the story of his life as a series of disheartening setbacks.
  • He met Mark Zuckerberg, liked what he heard, and became Facebook’s first outside investor. Half a million dollars bought him 10 percent of the company, most of which he cashed out for about $1 billion in 2012.
  • Thiel made some poor investments, losing enormous sums by going long on the stock market in 2008, when it nose-dived, and then shorting the market in 2009, when it rallied
  • on the whole, he has done exceptionally well. Alex Karp, his Palantir co-founder, who agrees with Thiel on very little other than business, calls him “the world’s best venture investor.”
  • Thiel told me this is indeed his ambition, and he hinted that he may have achieved it.
  • He longs for radical new technologies and scientific advances on a scale most of us can hardly imagine
  • He longs for a world in which great men are free to work their will on society, unconstrained by government or regulation or “redistributionist economics” that would impinge on their wealth and power—or any obligation, really, to the rest of humanity
  • Did his dream of eternal life trace to The Lord of the Rings?
  • He takes for granted that this kind of progress will redound to the benefit of society at large.
  • More than anything, he longs to live forever.
  • Calling death a law of nature is, in his view, just an excuse for giving up. “It’s something we are told that demotivates us from trying harder,”
  • Thiel grew up reading a great deal of science fiction and fantasy—Heinlein, Asimov, Clarke. But especially Tolkien; he has said that he read the Lord of the Rings trilogy at least 10 times. Tolkien’s influence on his worldview is obvious: Middle-earth is an arena of struggle for ultimate power, largely without government, where extraordinary individuals rise to fulfill their destinies. Also, there are immortal elves who live apart from men in a magical sheltered valley.
  • But his dreams have always been much, much bigger than that.
  • Yes, Thiel said, perking up. “There are all these ways where trying to live unnaturally long goes haywire” in Tolkien’s works. But you also have the elves.
  • How are the elves different from the humans in Tolkien? And they’re basically—I think the main difference is just, they’re humans that don’t die.”
  • During college, he co-founded The Stanford Review, gleefully throwing bombs at identity politics and the university’s diversity-minded reform of the curriculum. He co-wrote The Diversity Myth in 1995, a treatise against what he recently called the “craziness and silliness and stupidity and wickedness” of the left.
  • Thiel laid out a plan, for himself and others, “to find an escape from politics in all its forms.” He wanted to create new spaces for personal freedom that governments could not reach
  • But something changed for Thiel in 2009
  • he people, he concluded, could not be trusted with important decisions. “I no longer believe that freedom and democracy are compatible,” he wrote.
  • ven more notable one followed: “Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women—two constituencies that are notoriously tough for libertarians—have rendered the notion of ‘capitalist democracy’ into an oxymoron.”
  • By 2015, six years after declaring his intent to change the world from the private sector, Thiel began having second thoughts. He cut off funding for the Seasteading Institute—years of talk had yielded no practical progress–and turned to other forms of escape
  • The fate of our world may depend on the effort of a single person who builds or propagates the machinery of freedom,” he wrote. His manifesto has since become legendary in Silicon Valley, where his worldview is shared by other powerful men (and men hoping to be Peter Thiel).
  • Thiel’s investment in cryptocurrencies, like his founding vision at PayPal, aimed to foster a new kind of money “free from all government control and dilution
  • His decision to rescue Elon Musk’s struggling SpaceX in 2008—with a $20 million infusion that kept the company alive after three botched rocket launches—came with aspirations to promote space as an open frontier with “limitless possibility for escape from world politics
  • It was seasteading that became Thiel’s great philanthropic cause in the late aughts and early 2010s. The idea was to create autonomous microstates on platforms in international waters.
  • “There’s zero chance Peter Thiel would live on Sealand,” he said, noting that Thiel likes his comforts too much. (Thiel has mansions around the world and a private jet. Seal performed at his 2017 wedding, at the Belvedere Museum in Vienna.)
  • As he built his companies and grew rich, he began pouring money into political causes and candidates—libertarian groups such as the Endorse Liberty super PAC, in addition to a wide range of conservative Republicans, including Senators Orrin Hatch and Ted Cruz
  • Sam Altman, the former venture capitalist and now CEO of OpenAI, revealed in 2016 that in the event of global catastrophe, he and Thiel planned to wait it out in Thiel’s New Zealand hideaway.
  • When I asked Thiel about that scenario, he seemed embarrassed and deflected the question. He did not remember the arrangement as Altman did, he said. “Even framing it that way, though, makes it sound so ridiculous,” he told me. “If there is a real end of the world, there is no place to go.”
  • You’d have eco farming. You’d turn the deserts into arable land. There were sort of all these incredible things that people thought would happen in the ’50s and ’60s and they would sort of transform the world.”
  • None of that came to pass. Even science fiction turned hopeless—nowadays, you get nothing but dystopias
  • He hungered for advances in the world of atoms, not the world of bits.
  • Founders Fund, the venture-capital firm he established in 200
  • The fund, therefore, would invest in smart people solving hard problems “that really have the potential to change the world.”
  • This was not what Thiel wanted to be doing with his time. Bodegas and dog food were making him money, apparently, but he had set out to invest in transformational technology that would advance the state of human civilization.
  • He told me that he no longer dwells on democracy’s flaws, because he believes we Americans don’t have one. “We are not a democracy; we’re a republic,” he said. “We’re not even a republic; we’re a constitutional republic.”
  • “It was harder than it looked,” Thiel said. “I’m not actually involved in enough companies that are growing a lot, that are taking our civilization to the next level.”
  • Founders Fund has holdings in artificial intelligence, biotech, space exploration, and other cutting-edge fields. What bothers Thiel is that his companies are not taking enough big swings at big problems, or that they are striking out.
  • In at least 20 hours of logged face-to-face meetings with Buma, Thiel reported on what he believed to be a Chinese effort to take over a large venture-capital firm, discussed Russian involvement in Silicon Valley, and suggested that Jeffrey Epstein—a man he had met several times—was an Israeli intelligence operative. (Thiel told me he thinks Epstein “was probably entangled with Israeli military intelligence” but was more involved with “the U.S. deep state.”)
  • Buma, according to a source who has seen his reports, once asked Thiel why some of the extremely rich seemed so open to contacts with foreign governments. “And he said that they’re bored,” this source said. “‘They’re bored.’ And I actually believe it. I think it’s that simple. I think they’re just bored billionaires.”
  • he has a sculpture that resembles a three-dimensional game board. Ascent: Above the Nation State Board Game Display Prototype is the New Zealander artist Simon Denny’s attempt to map Thiel’s ideological universe. The board features a landscape in the aesthetic of Dungeons & Dragons, thick with monsters and knights and castles. The monsters include an ogre labeled “Monetary Policy.” Near the center is a hero figure, recognizable as Thiel. He tilts against a lion and a dragon, holding a shield and longbow. The lion is labeled “Fair Elections.” The dragon is labeled “Democracy.” The Thiel figure is trying to kill them.
  • When I asked Thiel to explain his views on democracy, he dodged the question. “I always wonder whether people like you … use the word democracy when you like the results people have and use the word populism when you don’t like the results,” he told me. “If I’m characterized as more pro-populist than the elitist Atlantic is, then, in that sense, I’m more pro-democratic.”
  • “I couldn’t find them,” he said. “I couldn’t get enough of them to work.
  • He said he has no wish to change the American form of government, and then amended himself: “Or, you know, I don’t think it’s realistic for it to be radically changed.” Which is not at all the same thing.
  • When I asked what he thinks of Yarvin’s autocratic agenda, Thiel offered objections that sounded not so much principled as practical.
  • “I don’t think it’s going to work. I think it will look like Xi in China or Putin in Russia,” Thiel said, meaning a malign dictatorship. “It ultimately I don’t think will even be accelerationist on the science and technology side, to say nothing of what it will do for individual rights, civil liberties, things of that sort.”
  • Still, Thiel considers Yarvin an “interesting and powerful” historian
  • he always talks about is the New Deal and FDR in the 1930s and 1940s,” Thiel said. “And the heterodox take is that it was sort of a light form of fascism in the United States.”
  • Yarvin, Thiel said, argues that “you should embrace this sort of light form of fascism, and we should have a president who’s like FDR again.”
  • Did Thiel agree with Yarvin’s vision of fascism as a desirable governing model? Again, he dodged the question.
  • “That’s not a realistic political program,” he said, refusing to be drawn any further.
  • ooking back on Trump’s years in office, Thiel walked a careful line.
  • A number of things were said and done that Thiel did not approve of. Mistakes were made. But Thiel was not going to refashion himself a Never Trumper in retrospect.
  • “I have to somehow give the exact right answer, where it’s like, ‘Yeah, I’m somewhat disenchanted,’” he told me. “But throwing him totally under the bus? That’s like, you know—I’ll get yelled at by Mr. Trump. And if I don’t throw him under the bus, that’s—but—somehow, I have to get the tone exactly right.”
  • Thiel knew, because he had read some of my previous work, that I think Trump’s gravest offense against the republic was his attempt to overthrow the election. I asked how he thought about it.
  • “Look, I don’t think the election was stolen,” he said. But then he tried to turn the discussion to past elections that might have been wrongly decided. Bush-Gore in 2000, for instanc
  • He came back to Trump’s attempt to prevent the transfer of power. “I’ll agree with you that it was not helpful,” he said.
  • there is another piece of the story, which Thiel reluctantly agreed to discuss
  • Puck reported that Democratic operatives had been digging for dirt on Thiel since before the 2022 midterm elections, conducting opposition research into his personal life with the express purpose of driving him out of politic
  • Among other things, the operatives are said to have interviewed a young model named Jeff Thomas, who told them he was having an affair with Thiel, and encouraged Thomas to talk to Ryan Grim, a reporter for The Intercept. Grim did not publish a story during election season, as the opposition researchers hoped he would, but he wrote about Thiel’s affair in March, after Thomas died by suicide.
  • He deplored the dirt-digging operation, telling me in an email that “the nihilism afflicting American politics is even deeper than I knew.”
  • He also seemed bewildered by the passions he arouses on the left. “I don’t think they should hate me this much,”
  • he spoke at the closed-press event with a lot less nuance than he had in our interviews. His after-dinner remarks were full of easy applause lines and in-jokes mocking the left. Universities had become intellectual wastelands, obsessed with a meaningless quest for diversity, he told the crowd. The humanities writ large are “transparently ridiculous,” said the onetime philosophy major, and “there’s no real science going on” in the sciences, which have devolved into “the enforcement of very curious dogmas.”
  • “Diversity—it’s not enough to just hire the extras from the space-cantina scene in Star Wars,” he said, prompting laughter.
  • Nor did Thiel say what genuine diversity would mean. The quest for it, he said, is “very evil and it’s very silly.”
  • “the silliness is distracting us from very important things,” such as the threat to U.S. interests posed by the Chinese Communist Party.
  • “Whenever someone says ‘DEI,’” he exhorted the crowd, “just think ‘CCP.’”
  • Somebody asked, in the Q&A portion of the evening, whether Thiel thought the woke left was deliberately advancing Chinese Communist interests
  • “It’s always the difference between an agent and asset,” he said. “And an agent is someone who is working for the enemy in full mens rea. An asset is a useful idiot. So even if you ask the question ‘Is Bill Gates China’s top agent, or top asset, in the U.S.?’”—here the crowd started roaring—“does it really make a difference?”
  • About 10 years ago, Thiel told me, a fellow venture capitalist called to broach the question. Vinod Khosla, a co-founder of Sun Microsystems, had made the Giving Pledge a couple of years before. Would Thiel be willing to talk with Gates about doing the same?
  • Thiel feels that giving his billions away would be too much like admitting he had done something wrong to acquire them
  • He also lacked sympathy for the impulse to spread resources from the privileged to those in need. When I mentioned the terrible poverty and inequality around the world, he said, “I think there are enough people working on that.”
  • besides, a different cause moves him far more.
  • Should Thiel happen to die one day, best efforts notwithstanding, his arrangements with Alcor provide that a cryonics team will be standing by.
  • Then his body will be cooled to –196 degrees Celsius, the temperature of liquid nitrogen. After slipping into a double-walled, vacuum-insulated metal coffin, alongside (so far) 222 other corpsicles, “the patient is now protected from deterioration for theoretically thousands of years,” Alcor literature explains.
  • All that will be left for Thiel to do, entombed in this vault, is await the emergence of some future society that has the wherewithal and inclination to revive him. And then make his way in a world in which his skills and education and fabulous wealth may be worth nothing at all.
  • I wondered how much Thiel had thought through the implications for society of extreme longevity. The population would grow exponentially. Resources would not. Where would everyone live? What would they do for work? What would they eat and drink? Or—let’s face it—would a thousand-year life span be limited to men and women of extreme wealth?
  • “Well, I maybe self-serve,” he said, perhaps understating the point, “but I worry more about stagnation than about inequality.”
  • Thiel is not alone among his Silicon Valley peers in his obsession with immortality. Oracle’s Larry Ellison has described mortality as “incomprehensible.” Google’s Sergey Brin aspires to “cure death.” Dmitry Itskov, a leading tech entrepreneur in Russia, has said he hopes to live to 10,000.
  • . “I should be investing way more money into this stuff,” he told me. “I should be spending way more time on this.”
  • You haven’t told your husband? Wouldn’t you want him to sign up alongside you?“I mean, I will think about that,” he said, sounding rattled. “I will think—I have not thought about that.”
  • No matter how fervent his desire, Thiel’s extraordinary resources still can’t buy him the kind of “super-duper medical treatments” that would let him slip the grasp of death. It is, perhaps, his ultimate disappointment.
  • There are all these things I can’t do with my money,” Thiel said.
Javier E

Larry Summers and Glenn Hubbard Square Off on Our Economic Future - NYTimes.com - 0 views

  • Even these two, with such similar training and moderate impulses, are remarkably far apart on basic questions
  • Hubbard argues that the imperative of the moment — our 3-point shot — is rolling back federal benefits for wealthier and middle-class Americans. If it’s done right, he says, taxes will fall and “more entrepreneurs will start businesses. Corporate investment would rise, creating more jobs. Individuals will work harder and save more. The country would have faster growth. The benefits are quite broad.” If we stay the present course, though, Social Security, Medicare and Medicaid will keep growing unchecked, and the United States, paralyzed by debt, could burn like Rome.
  • Summers, who once told me “I don’t do apocalypse,” acknowledged that some entitlement reform is inevitable, but that it is not the real adjustment that needs to be made. “That is playing defense,” he said. “It is essential but insufficient.” Instead, Summers wants the country to start playing offense: the crisis that demands our attention now, he says, is long-term unemployment. Millions of Americans have been out of work for more than half a year, many for much longer; not only are they suffering, but the overall economy is poorer without their contribution. Summers argues that the U.S. government can address this problem in several ways, especially by committing to more government spending, notably on infrastructure.
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  • they might at least help clarify the choices that will define the future of our economy.
  • How did two men, whose work is widely respected, reach such different conclusions from data about the same economy? As I read their papers, I realized that they simply asked different questions.
  • Hubbard was fascinated by analyzing the ways in which government intervention can distort otherwise efficient markets; many of Summers’s papers explored the reasons markets aren’t always perfectly efficient.
  • I met Summers and Hubbard in a small, well-appointed room at the Council on Foreign Relations on Manhattan’s Upper East Side to hear them battle it out as if they were preparing to brief the president and leaders of Congress on what must be done to fix our economy right now
  • I wanted to hear their answers, of course, but I was also interested in how they made them. I wanted to understand the extent to which empirical economic research can provide objective guidance for policy — and at what point even brilliant, highly trained economists resort to articles of faith.
  • Hubbard quickly zeroed in on the issue that has defined his career. In regard to the size of the government, Hubbard said the real challenge is the steady rise in so-called entitlement spending
  • His views all seemed to coalesce around a fairly simple idea: the U.S. economy is better off when the government gets out of the way.
  • Summers’s worldview seemed to take into account more moving pieces. “It would surely be better to address long-run fiscal issues sooner rather than later,” he said. “But this needs to be done in a balanced way. The highest priority is getting the economy growing.”
  • Their views were especially incompatible when the talk veered to rising inequality.
  • Summers said he would limit benefits for the rich like “carried interest” rules that allowed private-equity managers (including, I recalled, Mitt Romney) to convert their income, which would be taxed close to 40 percent, into something that looked just like capital gains, which are taxed at 20 percent. He also said that the very wealthy should pay higher inheritance taxes. Dynastic wealth is “highly problematic in a society committed to freedom of opportunity,” he said.
  • For Hubbard, though, the rich aren’t the problem. The pursuit of wealth, he said, is an engine that powers the economy, and it makes no sense to address inequality by redistributing the very thing that fuels growth. “The real question is ‘What can we do to improve the earnings of lower- and middle-income Americans?’ ” he said. “That’s about increased education and skills training, and that may require higher government spending.” (Hubbard’s belief in more education financing sets him apart from more doctrinaire conservatives.) Hubbard also dismissed Summers’s concerns about dynastic wealth. So few Americans have that kind of money, he said, that taxing them doesn’t make a major impact on the nation’s finances.
  • In the end, it became clear that Hubbard sees many of our economic challenges — rising entitlements, inequality and even the financial crisis — as different manifestations of the same basic problem: unsustainable debt. Those challenges also have the same solution. If Congress and the White House can agree on a long-term plan to reduce the entitlements, everything will begin to look better. With a permanent solution in sight, investors will gain confidence from the fact that their country’s finances are in good shape and that their future tax burden will be lower; companies will hire workers. Then, once the big fiscal problem is solved, the government can redouble its efforts on education and help the truly needy.
  • . “There is no serious statistical evidence in support of the view that tax rates at current levels have a major disincentive effect on economic growth,” he said. He suggested, pointedly, comparing the rapid economic growth during the Clinton years with the comparatively worse performance of the post-tax-cut Bush period.
  • Summers settled on his point: The United States, he said, is not simply facing one unified problem that could be solved through one straightforward solution. The country is facing myriad challenges, starting with unemployment and slow growth. These immediate challenges, he said, can be addressed with a 10-year commitment by the government to spend $1 trillion on infrastructure.
  • both men took evident satisfaction in sticking to their guns, leaving me feeling the frustration that many do these days: Why can’t these two sides just work something out?
  • t he has come to think of the presidential election of 2016 as a battle between whoever will hire Larry Summers and whoever will hire Glenn Hubbard
  • Because somewhere in those following four years, he said, the fiscal crisis will become unavoidable, Congress will have to act, and it will have to work with the White House.
Javier E

Opinion | The 'Rotten Equilibrium' of Republican Politics - The New York Times - 0 views

  • The key result: the 20 most prosperous districts are now held by Democrats, while Republicans represent 16 of the 20 least prosperous, measured by share of G.D.P. The accompanying chart illustrates their analysis.
  • The authors’ calculation of the contribution to the G.D.P. of every congressional district showed that Democratic districts produce $10.2 trillion of the nation’s goods and services and Republican districts $6.2 trillion.
  • Candidates on the right do best during hard times and in recent elections, they have gained the most politically in regions experiencing the sharpest downturn. Electorally speaking, in other words, Republicans profit from economic stagnation and decline.
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  • “A rising economic tide tends to sink the Trump tugboat,”
  • This pattern is not limited to the United States. There are numerous studies demonstrating that European and British voters who are falling behind in the global economy, and who were hurt by the 2008 recession and the subsequent cuts to the welfare state, drove Brexit as well as the rise of right-wing populist parties.
  • political scientists at Penn, Duke and University College London, found, for example,A strong relationship between job loss and decreased generalized solidarity. We find evidence of in-group bias and the bias becomes more pronounced due to exposure to austerity policies
  • austerity policies adopted in the wake of the 2008 financial collapse were crucial both to voter support for the right-wing populist party UKIP in Britain and to voter approval of Brexit.
  • the EU referendum (Brexit) could have resulted in a Remain victory had it not been for a range of austerity-induced welfare reforms. These reforms activated existing economic grievances
  • Further, auxiliary results suggest that the underlying economic grievances have broader origins than what the current literature on Brexit suggests. Up until 2010, the UK’s welfare state evened out growing income differences across the skill divide through transfer payments. This pattern markedly stops from 2010 onward as austerity started to bite.
  • The results here and in England reinforce the conclusion that the worse things get, the better the right does.
  • As a rule, as economic conditions improve and voters begin to feel more secure, they become more generous and more liberal. In the United States, this means that voters move to the left
  • postwar prosperity from 1945 to the mid-1970s led to a liberal international consensus:In light of the historical experience of advanced countries, embracing the program of embedded liberalism made economic and political sense. Twentieth-century democratic capitalism had proved to be both successful and resilient: it had delivered high growth; it had allowed governments to fund generous social programs; and it had sent its main political and economic competitor — communism — to the ash heap of history.
  • As global competition, outsourcing and later, automation, began to produce significant economic disruption, beginning in the 1970s, this liberal consensus frayed.
  • If the Republican Party now depends on the votes of those who are falling behind, does the party have a vested interest in economic stagnation and decline?
  • “as conservatives see it, the more visible government dysfunction is, the better. It provides civic education.”
  • Taylor argued that as far as conservatives go,anything that dispels the illusion that government can be harnessed for positive ends is generally a good thing, and anything that reduces its power and scope is a salutary development.
  • Trump’s populism offered a false but compelling diagnosis of their economic problems, immigrants and insufficiently protectionist trade policy, which dovetails neatly with rural white anxieties about declining cultural status and relative political power. If you can align threats to identity with threats to material security, as Trump did, it’s pretty powerful.
  • But, in actual practice moving from campaigning to governing, Wilkinson continued, Trump’strade war is positively hurting agriculture and manufacturing, and every Republican member of congress has voted multiple times to strip away health benefits — leaving ‘identity threat’ as the party’s last resort.
  • Identity threat — ‘I don’t recognize this country anymore’ — is very abstract compared to material threat — ‘my daughter with leukemia will die if they don’t cover pre-existing conditions’ — and far less motivating. And the argument that the G.O.P. establishment itself has become a threat to economic/material welfare has started to become persuasive.
  • It’s going to get worse for the G.O.P. as the urgency of the economic problems grows. But they just don’t understand that pushing the same button over and over isn’t going to have the same effect. And this is so in part because they don’t really want to see the seriousness of economic divergence, because they have no idea what to do about it that is remotely consistent with Zombie Reagan social policy dogma.
  • This is not, according to Lindsey,a conspiracy, but rather a rotten equilibrium. Lack of trust in government brings charlatans to power, further reducing trust in government and widening the path to power for future charlatans
  • The first, of course, is Trump himself. His victory in 2016 was a charlatan’s ascent, and his presidency has served to sustain distrust in government — fuel, in one sense, for the continued success of charlatans. For the moment, though, his failure to win money for the border wall has punctured his viability as a governing force.
  • Trump’s second, if less heralded, achievement has been to invigorate the Democratic opposition
criscimagnael

Hackers Bring Down Government Sites in Ukraine - The New York Times - 0 views

  • Hackers brought down dozens of Ukrainian government websites on Friday and posted a message on one saying, “Be afraid and expect the worst,” a day after a breakdown in diplomatic talks between Russia and the West intended to forestall a threatened Russian invasion of the country.
  • Diplomats and analysts have been anticipating a cyberattack on Ukraine, but proving the source of such actions is notoriously difficult.
  • A Ukrainian government agency, the Center for Strategic Communications and Information Security, which was established to counter Russian disinformation, later issued a statement more directly blaming Russia for the hack.
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  • “the United States and its allies are actually saying ‘no’ to key elements of these texts,” referring to two draft treaties on security issues that Russia had proposed to NATO and the United States.
  • “Ukrainians! All your personal data was uploaded to the internet,” the message read. “All data on the computer is being destroyed. All information about you became public. Be afraid and expect the worst.”
  • The attack came within hours of the conclusion of talks between Russia and the United States and NATO that were intended to find a diplomatic resolution after Russia massed tens of thousands of troops near the border with Ukraine.
  • On Friday, the Biden administration also accused Moscow of sending saboteurs into eastern Ukraine to stage an incident that could provide Russia with a pretext for invasion.
  • Moscow has demanded sweeping security concessions, including a promise not to accept Ukraine into the NATO alliance. But the cyberattack Friday led to immediate pledges of support and closer cooperation with Ukraine from NATO and the European Union, exactly the opposite of what Russian diplomats had said they were seeking.
  • On Thursday, Russian officials said the talks had not yielded results, and one senior diplomat said they were approaching “a dead end.”
  • A Russian military spyware strain called X-Agent, or Sofacy, that Ukrainian cyber experts say was used to hack Ukraine’s Central Election Commission during a 2014 presidential election, for example, was later found in the server of the Democratic National Committee in the United States after the electoral hacking attacks in 2016.
  • Ukrainian government websites began crashing a few hours later, according to the Ukrainian Foreign Ministry, which said the cyberattack occurred overnight from Thursday to Friday.
  • “We have not seen such a significant attack on government organizations in some time,” it said. “We suggest the current attack is tied to the recent failure of Russian negotiations on Ukraine’s future in NATO,” it added, referring to Moscow’s talks with the West.
  • The websites of the president and the defense ministry remained online. Ukrainian officials said the attack targeted 70 government websites.
  • the hacking activity targeting state bodies could be a part of this psychological attack on Ukrainians.”
  • “I strongly condemn the cyberattacks on the Ukrainian Government,” Mr. Stoltenberg said in a statement, adding, “NATO & Ukraine will step up cyber cooperation & we will continue our strong political & practical support.”
  • Sophisticated cybertools have turned up in standoffs between Israel and Iran, and the United States blamed Russia for using hacking to influence the 2016 election in the United States to benefit Donald J. Trump.
  • The U.S. government has traced some of the most drastic cyberattacks of the past decade to Russian actions in Ukraine.
  • By morning, the hack had crippled much of the government’s public-facing digital infrastructure, including the most widely used site for handling government services online, Diia. The smartphone app version of the program was still operating, the Ukrainska Pravda newspaper reported. Diia also has a role in Ukraine’s coronavirus response and in encouraging vaccination.
  • The malware, known as NotPetya, had targeted a type of Ukrainian tax preparation software but apparently spun out of control, according to experts.
  • It coincided with the assassination of a Ukrainian military intelligence officer in a car bombing in Kyiv and the start of an E.U. policy granting Ukrainians visa-free travel, an example of the type of integration with the West that Russia has opposed.
  • But NotPetya spread around the world, with devastating results, illustrating the risks of collateral damage from military cyberattacks for people and businesses whose lives are increasingly conducted online, even if they live far from conflict zones
  • The total global cost is thought to be far higher
Javier E

How Insurers Exploited Medicare Advantage for Billions - The New York Times - 0 views

  • The health system Kaiser Permanente called doctors in during lunch and after work and urged them to add additional illnesses to the medical records of patients they hadn’t seen in weeks. Doctors who found enough new diagnoses could earn bottles of Champagne, or a bonus in their paycheck.
  • Anthem, a large insurer now called Elevance Health, paid more to doctors who said their patients were sicker. And executives at UnitedHealth Group, the country’s largest insurer, told their workers to mine old medical records for more illnesses — and when they couldn’t find enough, sent them back to try again.
  • Each of the strategies — which were described by the Justice Department in lawsuits against the companies — led to diagnoses of serious diseases that might have never existed.
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  • But the diagnoses had a lucrative side effect: They let the insurers collect more money from the federal government’s Medicare Advantage program.
  • Medicare Advantage, a private-sector alternative to traditional Medicare, was designed by Congress two decades ago to encourage health insurers to find innovative ways to provide better care at lower cost.
  • by next year, more than half of Medicare recipients will be in a private plan.
  • a New York Times review of dozens of fraud lawsuits, inspector general audits and investigations by watchdogs shows how major health insurers exploited the program to inflate their profits by billions of dollars.
  • The government pays Medicare Advantage insurers a set amount for each person who enrolls, with higher rates for sicker patients. And the insurers, among the largest and most prosperous American companies, have developed elaborate systems to make their patients appear as sick as possible, often without providing additional treatment, according to the lawsuits.
  • As a result, a program devised to help lower health care spending has instead become substantially more costly than the traditional government program it was meant to improve.
  • Eight of the 10 biggest Medicare Advantage insurers — representing more than two-thirds of the market — have submitted inflated bills, according to the federal audits. And four of the five largest players — UnitedHealth, Humana, Elevance and Kaiser — have faced federal lawsuits alleging that efforts to overdiagnose their customers crossed the line into fraud.
  • The government now spends nearly as much on Medicare Advantage’s 29 million beneficiaries as on the Army and Navy combined. It’s enough money that even a small increase in the average patient’s bill adds up: The additional diagnoses led to $12 billion in overpayments in 2020, according to an estimate from the group that advises Medicare on payment policies — enough to cover hearing and vision care for every American over 65.
  • Another estimate, from a former top government health official, suggested the overpayments in 2020 were double that, more than $25 billion.
  • The increased privatization has come as Medicare’s finances have been strained by the aging of baby boomers
  • Medicare Advantage plans can limit patients’ choice of doctors, and sometimes require jumping through more hoops before getting certain types of expensive care.
  • At conferences, companies pitched digital services to analyze insurers’ medical records and suggest additional codes. Such consultants were often paid on commission; the more money the analysis turned up, the more the companies kept.
  • they often have lower premiums or perks like dental benefits — extras that draw beneficiaries to the programs. The more the plans are overpaid by Medicare, the more generous to customers they can afford to be.
  • Many of the fraud lawsuits were initially brought by former employees under a federal whistle-blower law that allows them to get a percentage of any money repaid to the government if their suits prevail. But most have been joined by the Justice Department, a step the government takes only if it believes the fraud allegations have merit. Last year, the department’s civil division listed Medicare Advantage as one of its top areas of fraud recovery.
  • In contrast, regulators overseeing the plans at the Centers for Medicare and Medicaid Services, or C.M.S., have been less aggressive, even as the overpayments have been described in inspector general investigations, academic research, Government Accountability Office studies, MedPAC reports and numerous news articles,
  • Congress gave the agency the power to reduce the insurers’ rates in response to evidence of systematic overbilling, but C.M.S. has never chosen to do so. A regulation proposed in the Trump administration to force the plans to refund the government for more of the incorrect payments has not been finalized four years later. Several top officials have swapped jobs between the industry and the agency.
  • The popularity of Medicare Advantage plans has helped them avoid legislative reforms. The plans have become popular in urban areas, and have been increasingly embraced by Democrats as well as Republicans.
  • “You have a powerful insurance lobby, and their lobbyists have built strong support for this in Congress,”
  • Some critics say the lack of oversight has encouraged the industry to compete over who can most effectively game the system rather than who can provide the best care.
  • “Even when they’re playing the game legally, we are lining the pockets of very wealthy corporations that are not improving patient care,”
  • In theory, if the insurers could do better than traditional Medicare — by better managing patients’ care, or otherwise improving their health — their patients would cost less and the insurers would make more money.
  • But some insurers engaged in strategies — like locating their enrollment offices upstairs, or offering gym memberships — to entice only the healthiest seniors, who would require less care, to join. To deter such tactics, Congress decided to pay more for sicker patients.
  • Almost immediately, companies saw ways to exploit that system. The traditional Medicare program provided no financial incentive to doctors to document every diagnosis, so many records were incomplete
  • Under the new program, insurers began rigorously documenting all of a patient’s health conditions — say depression, or a long-ago stroke — even when they had nothing to do with the patient’s current medical care.
  • But for insurers that already dominate health care for workers, the program is strikingly lucrative: A study from the Kaiser Family Foundation, a research group unaffiliated with the insurer Kaiser, found the companies typically earn twice as much gross profit from their Medicare Advantage plans as from other types of insurance.
  • The insurers also began hiring agencies that sent doctors or nurses to patients’ homes, where they could diagnose them with more diseases.
  • Cigna hired firms to perform similar at-home assessments that generated billions in extra payments, according to a 2017 whistle-blower lawsuit, which was recently joined by the Justice Department. The firms told nurses to document new diagnoses without adjusting medications, treating patients or sending them to a specialist
  • Nurses were told to especially look for patients with a history of diabetes because it was not “curable,” even if the patient now had normal lab findings or had undergone surgery to treat the condition.
  • Adding the code for a single diagnosis could yield a substantial payoff. In a 2020 lawsuit, the government said Anthem instructed programmers to scour patient charts for “revenue-generating” codes. One patient was diagnosed with bipolar disorder, although no other doctor reported the condition, and Anthem received an additional $2,693.27, the lawsuit said. Another patient was said to have been coded for “active lung cancer,” despite no evidence of the disease in other records; Anthem was paid an additional $7,080.74. The case is continuing.
  • The most common allegation against the companies was that they did not correct potentially invalid diagnoses after becoming aware of them. At Anthem, for example, the Justice Department said “thousands” of inaccurate diagnoses were not deleted. According to the lawsuit, a finance executive calculated that eliminating the inaccurate diagnoses would reduce the company’s 2017 earnings from reviewing medical charts by $86 million, or 72 percent.
  • Some of the companies took steps to ensure the extra diagnoses didn’t lead to expensive care. In an October 2021 lawsuit, the Justice Department estimated that Kaiser earned $1 billion between 2009 and 2018 from additional diagnoses, including roughly 100,000 findings of aortic atherosclerosis, or hardening of the arteries. But the plan stopped automatically enrolling those patients in a heart attack prevention program because doctors would be forced to follow up on too many people, the lawsuit said.
  • Kaiser, which both runs a health plan and provides medical care, is often seen as a model system. But its control over providers gave it additional leverage to demand additional diagnoses from the doctors themselves, according to the lawsuit.
  • At meetings with supervisors, he was instructed to find additional conditions worth tens of millions of dollars. “It was an actual agenda item and how could we get this,” Dr. Taylor said.
  • Last year, the inspector general’s office noted that one company “stood out” for collecting 40 percent of all Medicare Advantage’s payments from chart reviews and home assessments despite serving only 22 percent of the program’s beneficiaries. It recommended Medicare pay extra attention to the company, which it did not name, but the enrollment figure matched UnitedHealth’s.
  • Even before the first lawsuits were filed, regulators and government watchdogs could see the number of profitable diagnoses escalating. But Medicare has done little to tamp down overcharging.
  • Several experts, including Medicare’s advisory commission, have recommended reducing all the plans’ payments.
  • Congress has ordered several rounds of cuts and gave C.M.S. the power to make additional reductions if the plans continued to overbill. The agency has not exercised that power.
  • The agency does periodically audit insurers by looking at a few hundred of their customers’ cases. But insurers are fined for billing mistakes found only in those specific patients. A rule proposed during the Trump administration to extrapolate the fines to the rest of the plan’s customers has not been finalized.
  • Ted Doolittle, who served as a senior official for the agency’s Center for Program Integrity from 2011 to 2014, said officials at Medicare seemed uninterested in confronting the industry over these practices. “It was clear that there was some resistance coming from inside” the agency, he said. “There was foot dragging.”
  • few analysts expect major legislative or regulatory changes to the program.
  • “Medicare Advantage overpayments are a political third rail,” said Dr. Richard Gilfillan, a former hospital and insurance executive and a former top regulator at Medicare, in an email. “The big health care plans know it’s wrong, and they know how to fix it, but they’re making too much money to stop. Their C.E.O.s should come to the table with Medicare as they did for the Affordable Care Act, end the coding frenzy, and let providers focus on better care, not more dollars for plans.”
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