Saturday, April 27, 2019

Musings on the Legitimacy of Crony Capitalism and Progressive Capitalism

 By Rudy Barnes, Jr.


America’s crony capitalism is managed by the super-rich (we’ll call them Wall Street). They control the means of production and set prices on most of the goods and services we consume.  The old political mantra It’s the economy, stupid! remains valid.  Wall Street not only controls our economy but also our politics.  They bought Congress with campaign contributions.

A healthy democracy must balance the benefits of a privileged few with providing for the common good.  Crony capitalism exploits consumers to benefit Wall Street, while progressive capitalism balances benefits for consumers.  Altruism in U.S. politics was lost in 2016 when an alliance of white Christians and Wall Street disciples of Ayn Rand elected Trump as president.
There was a time when free enterprise was considered the golden goose of libertarian democracy.  That was when business centers were on Main Street, not Wall Street, and healthy competition limited the exploitation of the middle class by mega-banks and corporations.  But mega-mergers have since reduced competition and put consumers at the mercy of Wall Street.

The deregulation of Wall Street that began in the 1990s allowed unrestrained greed that led to the 2009 recession; and little has changed since then.  In the next economic disaster (coming soon) we can expect a supplicant Congress to again rush to save their too-big-to-fail patrons on Wall Street, rather than replace their crony capitalism with progressive capitalism.

Many economists see an overvalued stock market, yet the market keeps rising.  Sharp increases in stock prices (25% in 2018) seem more an index of inflation than the real value of corporate worth at a 2% inflation rate--which is also the Fed interest rate.  These statistical disparities and the vast sums pocketed by Wall Street indicate a dysfunctional economy.

To make matters worse, Trump is pressuring the Fed to keep interest rates low while reducing taxes on the wealthy, while Democrats are promoting a radical Keynesian MMT policy that depends on low interest rates to make massive public expenditures.  Both parties advocate short term political benefits at the expense of long term economic stability.

Wall Street’s mega-corporations are awash in cash thanks to an endless flow of 401(k) funds and cheap money from low interest rates.  But the overvalued stock market is a bubble that will soon burst. The super rich will be the first to see a crash coming and will be able to protect their assets, leaving the middle-class to suffer the most, as they did in 2009.

There are warning signs of an economic crisis in 2020.  They include a labor market reduced by technological innovations and a huge U.S. national debt that keeps growing.  Similar dysfunctions of crony capitalism led to the Great Depression in 1929, when most Americans rejected crony capitalism for progressive measures that regulated Wall Street and provided needed social programs.  But in the 1990s deregulation once again ushered in crony capitalism.

Crony capitalism fosters greed and sacrifices the economic well-being of many for the profits of a privileged few.  It ignores the greatest commandment to love God and all of our neighbors as we love ourselves.  It’s ironic that a large majority of white Christians joined forces with Wall Street to elect Trump as their president.  Progressive capitalism can restore the moral legitimacy of America’s democracy with the spirit of altruism that once made America great.

As bad as it might seem, another economic depression could save American democracy from further demise.  It will take a new political majority and a politics of reconciliation to replace crony capitalism with a more progressive form of capitalism.  While a war could serve the same purpose, an economic crisis is surely preferable to the horrors of war to save our democracy.

Crony capitalism thrives on unrestrained ambition and greed.  It may be the ideal of Ayn Rand’s objectivism and the prosperity gospel, but it conflicts with the altruistic morality taught by Jesus.  Progressive capitalism balances the profit motive with providing for the common good. It can prevent the further exploitation of the middle class and the demise of democracy; but it will be a difficult challenge since most in Congress depend on Wall Street for their campaign funds.


Notes:

Joseph E. Stiglitze has asserted that progressive capitalism is not an oxymoron.  We can save our broken economic system from itself.  Stiglitz explains: “America arrived at this sorry state of affairs because we forgot that the true source of the wealth of a nation is the creativity and innovation of its people. One can get rich either by adding to the nation’s economic pie or by grabbing a larger share of the pie by exploiting others — abusing, for instance, market power or informational advantages. We confused the hard work of wealth creation with wealth-grabbing (or, as economists call it, rent-seeking), and too many of our talented young people followed the siren call of getting rich quickly.
...We are now in a vicious cycle: Greater economic inequality is leading, in our money-driven political system, to more political inequality, with weaker rules and deregulation causing still more economic inequality.  If we don’t change course matters will likely grow worse, as machines (artificial intelligence and robots) replace an increasing fraction of routine labor, including many of the jobs of the several million Americans making their living by driving.
...The neoliberal fantasy that unfettered markets will deliver prosperity to everyone should be put to rest. It is as fatally flawed as the notion after the fall of the Iron Curtain that we were seeing “the end of history” and that we would all soon be liberal democracies with capitalist economies.  Most important, our exploitive capitalism has shaped who we are as individuals and as a society. …this is what is to be expected in a society that lauds the pursuit of profits as leading, to quote Adam Smith, “as if by an invisible hand,” to the well-being of society, with no regard to whether those profits derive from exploitation or wealth creation.”

George Will has castigated Republicans and Democrats alike for America’s borrowing from the future, calling it decadent.  Will criticizes Bernie Sanders for not explaining the cost of his Medicare-for-all plan, and goes on to condemn Republicans for their fiscal irresponsibility.  Will cites Daniel Patrick Moynihan (D-NY) for recognizing that our public debt is morally problematic: “The people who do the borrowing, which is to say elected officials, are not the ones who will do the repaying. The temptation is real to use debt not as a form of investment, but a means of consumption. Far from the denial of gratification, it can, and frequently does, reflect just the opposite.” https://www.washingtonpost.com/opinions/america-is-borrowing-from-the-future-its-decadent/2019/04/24/c898798a-65ef-11e9-a1b6-b29b90efa879_story.html?utm_term=.456fd512ab29&wpisrc=nl_headlines&wpmm=1.

On how stock valuations are the most obscene since the great depression and are giving people false hopes of economic stability when they are a likely cause of the next stock market crash, see  https://docs.google.com/document/d/1CVnWhz_hhg-DqRC2OxzaAUCrhHPAPvMcGUVnKDEld7o/edit.

Robert J. Samuelson has pondered the anomalies of the stock market: “If you think you understand what’s going on with the global economy, you’re probably not paying attention.  On the one hand, the stock market is powering ahead. ...On the other hand, the “real” economy of jobs and production is slumping in the United States, Europe and China. How can both be true? Maybe they can’t.”  Samuelson concludes that ...Either the market is mad or it’s gushing with good news.” See https://www.washingtonpost.com/opinions/if-you-think-you-understand-the-economy-youre-not-paying-attention/2019/04/03/0445e77e-5628-11e9-814f-e2f46684196e_story.html?utm_term=.6764ea545b14&wpisrc=nl_popns&wpmm=1.

On how regulators, Republicans and big banks fought for a big increase in lucrative but risky corporate loans, and how those collateralized loan obligations are similar to the risky real estate loans and derivatives that corrupted the stock market and precipitated the 2008-2009 financial crisis, see https://www.washingtonpost.com/business/economy/how-regulators-republicans-and-big-banks-fought-for-a-big-increase-in-lucrative-but-risky-corporate-loans/2019/04/06/08c8cd58-4b1e-11e9-b79a-961983b7e0cd_story.html?utm_term=.defb2ebe38a0&wpisrc=nl_headlines&wpmm=1.


Robert J. Samuelson describes the importance of an independent Fed and on its quasi-independence after asking: Think the Fed is truly independent? Wrong. Think it’s a lackey? Wrong again.  See https://www.washingtonpost.com/opinions/can-the-fed-stay-independent/2019/04/21/edd4e54e-63b5-11e9-bfad-36a7eb36cb60_story.html?utm_term=.d0ba4b7b4520&wpisrc=nl_headlines&wpmm=1
 
Lawrence H. Summers has described how the left’s advocacy of modern monetary theory (MMT), a modern Keynesian supply-side economic theory, wrongly assumes that government can finance all its costs and deficits by creating new money, when in fact government pays interest on any new money. See https://www.washingtonpost.com/opinions/the-lefts-embrace-of-modern-monetary-theory-is-a-recipe-for-disaster/2019/03/04/6ad88eec-3ea4-11e9-9361-301ffb5bd5e6_story.html?utm_term=.8fefc31e4900&wpisrc=nl_opinions&wpmm=1.

Heather Boushey objects to MMT saying the left should resist the siren song of “modern monetary theory” since it doesn’t deal “...with one of the central economic challenges of our time: The richest Americans are obstructing, subverting and distorting the way our economy works to their own benefit.”  See https://www.washingtonpost.com/outlook/the-left-should-resist-the-siren-song-of-modern-monetary-theory/2019/04/19/37e92190-5b9b-11e9-b8e3-b03311fbbbfe_story.html?utm_term=.9464a2fbe4e7&wpisrc=nl_headlines&wpmm=1.

Greg Jaffe has described the shaky foundations of crony capitalism from the perspective of capitalists in  capitalism in crisis: U.S. billionaires worry about the survival of the system that made them rich. See https://www.washingtonpost.com/politics/capitalism-in-crisis-us-billionaires-worry-about-the-survival-of-the-system-that-made-them-rich/2019/04/20/3e06ef90-5ed8-11e9-bfad-36a7eb36cb60_story.html?utm_term=.84d7430816bb&wpisrc=nl_headlines&wpmm=1.
 

On how 70% of Wall Street thinks Trump will be re-elected in 2020 (and supports him in his efforts), see https://www.cnbc.com/2019/04/05/70percent-of-wall-street-thinks-trump-will-be-reelected-in-2020.html
On crony capitalism generally, see Wikipedia at https://en.wikipedia.org/wiki/Crony_capitalism.

      
Related commentary:

On the greatest commandment and love over law:
(1/11/15): The Greatest Commandment: A Common Word of Faith
(1/18/15): Love over Law: A Principle at the Heart of Legitimacy
(1/23/16): Who Is My Neighbor?
(1/30/16): The Politics of Loving Our Neighbors as Ourselves
(3/31/18): Altruism: The Missing Ingredient in American Christianity and Democracy
(10/13/18): Musings on a Common Word of Faith and Politics for Christians and Muslims
(2/23/19): Musings on Loving Your Enemy, Including the Enemy Within

On Christianity and capitalism:     
(3/8/15): Wealth, Politics, Religion and Economic Justice
(8/9/15): Balancing Individual Rights with Collective Responsibilities
(10/18/15): God, Money and Politics
(1/30/16): The Politics of Loving Our Neighbors as Ourselves
(6/4/16): Christianity and Capitalism: Strange Bedfellows in Politics
(10/1/16): The Federal Reserve, Wall Street and Congress on Monetary Policy
(2/11/17): The Mega-Merger of Wall Street, Politics and Religion
(3/11/17): Accountability and the Stewardship of Democracy
(9/9/17): The Evolution of the American Civil Religion and Habits of the Heart  http://www.religionlegitimacyandpolitics.com/2017/09/the-evolution-of-american-civil.html.
(9/16/17): The American Civil Religion and the Danger of Riches
(12/16/17): Can Democracy Survive the Trump Era?
(1/20/18): Musings of a Maverick Methodist on Morality and Religion in Politics
(1/27/18): Musings on Conflicting Concepts of Christian Morality in Politics
(3/8/15): Wealth, Politics, Religion and Economic Justice
(8/9/15): Balancing Individual Rights with Collective Responsibilities
(10/18/15): God, Money and Politics
(6/4/16): Christianity and Capitalism: Strange Bedfellows in Politics
(10/1/16): The Federal Reserve, Wall Street and Congress on Monetary Policy
(2/11/17): The Mega-Merger of Wall Street, Politics and Religion
(3/11/17): Accountability and the Stewardship of Democracy
(9/9/17): The Evolution of the American Civil Religion and Habits of the Heart http://www.religionlegitimacyandpolitics.com/2017/09/the-evolution-of-american-civil.html.
(9/16/17): The American Civil Religion and the Danger of Riches
(2/17/18): Musings of a Maverick on Money, Wall Street, Greed and Politics





Saturday, April 20, 2019

Musings on the Resurrection of Altruistic Morality in Dying Democracies

 By Rudy Barnes, Jr.


Easter is about resurrection--God’s promise to overcome death with new spiritual life.  In America and around the world democracies are dying because those responsible for keeping them healthy have abdicated their political power to populist demagogues who exploit fear, hate and anger to turn people against themselves and undermine democracy.

Democracies have no morality.  A democracy’s morality is derived from its dominant religion, whether it’s Christianity in America, Judaism in Israel, or Islam in Egypt and Turkey.  In all of those nations, the moral imperative of the greatest commandment to love God and to love our neighbors--including our neighbors of other races and religions--as we love ourselves, is a common word of faith and politics that emphasizes providing for the common good.

That altruistic moral imperative has been ignored in all those democracies with the election of right-wing demagogues.  In America, Christians elected Trump, the antithesis of Christian morality. In Israel, Jews re-elected Netanyahu after he pledged a form of apartheid for Palestinian Israelis.  And In Egypt and Turkey, Muslims have given al-Sisi and Erdogan dictatorial powers even though both men have made a mockery of human rights.

The greatest challenge for any democracy is to balance individual and group rights with providing for the common good.  Globalization has exacerbated nativist tensions with increasing racial and religious diversity; and Trump and other populist demagogues have exploited nativist hostility generated by refugees and immigrants to promote their authoritarian nationalism.

The many variations of Christianity, Judaism and Islam have produced conflicting moral standards in each religion.  It will take a 21st century reformation for Christians to conform the conflicting moral standards of the myriad variations of Christianity to the moral imperatives of altruistic love taught by Jesus and summarized in the greatest commandment.

It will take a Christian reformation and a new moral majority to save American democracy from its demise.  The American civil religion is where religion and politics come together, and Christian morality shapes its concepts of political legitimacy.  But when Christians elected Trump in 2016, they threw Jesus under the bus and abandoned altruistic morality. That resulted in the polarized partisan politics that are the death knell of America’s democracy.

Any religious and political reformation in America must reconcile divisive issues of race.  Most black Christians vote Democratic, while most white Christians vote Republican. While white evangelicals actively support Trump and his Republican minions, more traditional white Christians avoid mixing religion and politics in church, but still vote Republican.

Christians must assume the stewardship of American democracy to save it from its demise.  They must relate the moral imperatives taught by Jesus to their politics and promote a politics of reconciliation that minimizes partisan polarization.  Only then can Congress balance individual rights and the demands of identity groups with providing for the common good.

As libertarian democracies around the world seem to be dying, Easter should remind us that authoritarian demagogues cannot destroy the transforming power of God’s will to reconcile and redeem humanity.  But Satan’s will to divide and conquer is formidable since Satan does a convincing imitation of God in the synagogue, church, and mosque--as well as in politics.

In the cosmic battle between the forces of good and evil, Satan seems to be winning the popularity contest with God.  While the ascendancy of evil is evident in the demise of democracy around the world, Easter should give us hope that God will ultimately resurrect good over evil, even in politics.  But in liberating democracies from demagogues, God needs our help.


Notes:

America’s political values are taught in America’s public schools where there has been contentious debate over whether they are “democratic” or “core” values.  For instance, in Michigan the moral standards of democracy have been identified as a “...list of core values that the standards writers eventually agreed on was ‘equality; liberty; justice and fairness; unalienable individual rights (including life, liberty and the pursuit of happiness); consent of the governed; truth; common good.’ And after months of sometimes bitter debate, the group decided these values could still be called ‘democratic.’”  See https://www.washingtonpost.com/opinions/global-opinions/netanyahu-has-descended-into-new-depths-of-demagoguery/2019/04/08/4cf3247e-5a19-11e9-842d-7d3ed7eb3957_story.html?utm_term=.594ca7227420&wpisrc=nl_headlines&wpmm=1
       
David P. Gushee recalls when he first discovered that “some conservative Christians are not all that into democracy.”  He was shocked to discover that his daughter’s “...Christian school taught a neo-Puritan civics curriculum, which proclaimed that God’s design for human government is rule by ‘godly Christian men’ applying scripture under the sovereignty of God.”  Gushee described the American experiment in democracy being “...nourished deeply by Christian scripture, but not from any paradigm of government found in those sacred pages. ...Americans would create a government in which realistic biblical understandings both of human worth and human sinfulness would be wired into the structure of our institutions. ...Nobody ever guaranteed that our constitutional democracy would survive in perpetuity.  Our generation must decide, again, whether we will continue the flawed but extraordinary experiment in self-government begun in 1776.” David P. Gushee, The Trump Prophecy: Is the Christian Right Giving Up on Democracy?, Sojourners, May 2019, at pages 10,11.


Related commentary:

On the greatest commandment and love over law:
(1/11/15): The Greatest Commandment: A Common Word of Faith
(1/18/15): Love over Law: A Principle at the Heart of Legitimacy
(1/23/16): Who Is My Neighbor?
(1/30/16): The Politics of Loving Our Neighbors as Ourselves
(3/31/18): Altruism: The Missing Ingredient in American Christianity and Democracy
(10/13/18): Musings on a Common Word of Faith and Politics for Christians and Muslims
(2/23/19): Musings on Loving Your Enemy, Including the Enemy Within

On religion and politics:
(12/29/14): Religion, Violence and Military Legitimacy
(4/12/15): Faith as a Source of Morality and Law: The Heart of Legitimacy
(6/28/15): Confronting the Evil Among Us
(7/12/15): Reconciliation in Race and Religion: The Need for Compatibility, not Conformity   http://www.religionlegitimacyandpolitics.com/2015/07/reconciliation-in-race-and-religion.html
(8/9/15): Balancing Individual Rights with Collective Responsibilities
(8/23/15): Legitimacy as a Context and Paradigm to Resolve Religious Conflict
(11/15/15): American Exceptionalism: The Power of Persuasion or Coercion?
(1/16/16): Religion, Politics and Public Expectations
(3/26/16): Religion, Democracy, Diversity and Demagoguery
4/30/16): The Relevance of Religion to Politics
(5/7/16): Religion and a Politics of Reconciliation
(5/28/16): Nihilism as a Threat to Politics, Religion and Morality
(7/2/16): The Need for a Politics of Reconciliation in the Wake of Globalization
(8/5/16): How Religion Can Bridge Our Political and Cultural Divide http://www.religionlegitimacyandpolitics.com/2016/08/how-religion-can-bridge-our-political.html
(9/24/16): The Evolution of Religion and Politics from Oppression to Freedom
(11/5/16): Religion, Liberty and Justice at Home and Abroad
(12/31/16): E Pluribus Unum, Religion and a Politics of Reconciliation
(1/7/17): Religion and Reason as Sources of Political Legitimacy, and Why They Matter
(1/21/17): Religion and Reason Redux: Religion Is Ridiculous
(3/4/17): Ignorance and Reason in Religion and Politics
(3/18/17): Moral Ambiguity in Religion and Politics
(4/22/17): The Relevance of Jesus and the Irrelevance of the Church in Today’s World
(7/1/17): Religion, Moral Authority and Conflicting Concepts of Legitimacy
(7/15/17): Religion and Progressive Politics
(7/29/17): Speaking God’s Truth to Man’s Power
(8/5/17): Does Religion Seek to Reconcile and Redeem or to Divide and Conquer?
(8/12/17): The Universalist Teachings of Jesus as a Remedy for Religious Exclusivism  
(8/19/17): Hate, History and the Need for a Politics of Reconciliation
(10/7/17): A 21st Century Reformation to Restore Reason to American Civil Religion http://www.religionlegitimacyandpolitics.com/2017/10/a-21st-century-reformation-to-restore.html.
(10/21/17): The Symbiotic Relationship between Freedom and Religion
(11/18/17): Radical Religion and the Demise of Democracy
(12/2/17): How Religious Standards of Legitimacy Shape Politics, for Good or Bad
(12/16/17): Can Democracy Survive the Trump Era?
(12/23/17): If Democracy Survives the Trump Era, Can the Church Survive Democracy? http://www.religionlegitimacyandpolitics.com/2017/12/if-democracy-survives-trump-era-can.html.
(1/6/18): Musings of a Maverick Methodist on Diversity in Democracy
(1/13/18): Nationalist Politics and Exclusivist Religion: Obstacles to Reconciliation and Peace
(1/27/18): Musings on Conflicting Concepts of Christian Morality in Politics
(2/24/18): Musings of a Maverick Methodist on Religion, Freedom and Legitimacy
(3/31/18): Altruism: The Missing Ingredient in American Christianity and Democracy
(4/7/18): Musings of a Maverick Methodist on the Need for a Moral Reformation
(4/28/18): Musings of a Maverick Methodist on the Virtues and Vices of Christian Morality
(5/12/18): Musings of a Maverick Methodist on Christianity and Making America Great Again
(5/19/18): Musings on Morality and Law as Symbiotic but Conflicting Standards of Legitimacy
(7/21/18): Musings on America’s Moral and Political Mess and Who Should Clean It Up
(8/4/18): Musings of a Maverick Methodist on Religious Problems and Solutions in Politics
(8/11/18): Musings of a Maverick Methodist on Changing Morality in Religion and Politics
(8/25/18): Musings of a Maverick Methodist on Moral Priorities in Religion and Politics
(9/1/18): Musings on the American Civil Religion and Christianity at a Crossroads
(9/29/18): Musings of a Maverick Methodist on the Resurrection of Christian Universalism
(10/6/18): Musings on Moral Universalism in Religion and Politics http://www.religionlegitimacyandpolitics.com/2018/10/musings-on-moral-universalism-in.html.
(10/27/18): Musings of a Maverick Methodist on a Migrant Tidal Wave
(11/24/18): Musings of a Maverick Methodist on Christianity and the Legitimacy of Democracy http://www.religionlegitimacyandpolitics.com/2018/11/musings-of-maverick-methodist-on.html.
(1/5/19): Musings of a Maverick Methodist on Building Political Walls or Bridges
(2/16/19): Musings of a Maverick Methodist on America the Blessed and Beautiful--or is it?
(3/30/19): Musings on What the Mueller Report Doesn’t Say About Trump’s Wrongdoing
(4/12/19): Musings on Religion, Nationalism and Libertarian Democracy