Not too long ago I was shopping in my local grocery store when I ran into an old friend whom I had not seen in some time. She and I had been out on the streets of San Francisco on the night of Barack Obama’s election to witness the electric atmosphere and celebration. She and I wrote slogans in chalk on the sidewalk in front of the Ninth Circuit that night and a few other times. She was there at the grocery store with a fellow she introduced me to, adding in almost worshipful tones that he was, «an Occupier.»
My friend, who is by no means wealthy, is doing her part for the movement by feeding and housing this guy so that he doesn’t have to worry about food and shelter while he focuses on the important work of protesting.
He proceeded to tell me about all the fun Occupy Wherever (Oakland in his case) events that were coming up and how it would be great to have me along to support the cause and help out with the actions. I politely but firmly declined, and self-deprecatingly cited my commitment to armchair activism rather than out-in-the-streets activism. I then quite earnestly added that I was quite busy protecting the corporate interests of one of my clients these days and that getting out to protest just isn’t on my to-do list.
Occupy and the Tea Party
I’m all for public expression of political opinion, and I think that the Occupy movement (though it depends on which of its claimed representatives you listen to) has some real, legitimate complaints. Though both camps fervently deny any similarity, Occupy and the Tea Party have a lot in common: they are both groups of people who see that there is something critically wrong going on in America and who take to the streets to spread their message. This is a fundamentally American activity despite any ideological or stylistic differences. Both camps have detractors that paint each entire group as extremist by using videos of individuals who carry signs with extreme messages and/or can’t speak intelligently about the issues they are supposedly protesting. I view these detractors—on both sides—with great skepticism.
Nonetheless, this encounter with the Occupier gave me a chance to reflect on why I’ve gotten caught up in neither the Occupy movement or the Tea Party. Despite the admiration I have for people who are willing to take action for their beliefs, I see each side’s view as being fundamentally incomplete. Worse, each sides’ commitment to their incomplete views is an enormous part of the problem.
Please forgive the oversimplification, but while the left and right are pointing fingers at one another, the people who benefit from our economic crisis are laughing their ways to the bank and high-fiving one another for getting us to distract ourselves from what they are doing.
Those on the right say that our problem is government and regulation; that we have too much of it and that taxation needs to be curbed. They say we essentially have nothing to fear from big business; that in fact big business will save the day, if we can get government off the back of business long enough to do some good.
The party line on the left is the same with the roles of government and business reversed. Business has too much influence in our lives, and too much capacity to do us harm with impunity. Government is our protection against the greedy robber barons who care only for short-term profit without regard for others.
Both of these perspectives contain vital truth, which is why they persist. Truly dumb ideas come and go, but in order to take hold the way these two have, a worldview must be half-baked but true. This causes two problems: first that the people holding on to these ideas cannot be persuaded to change their minds. After all, they are already right. The second problem is that they insist fervently that people with the opposing worldview are wrong. Both sides become entrenched in their argument and even less likely to consider the other point of view in any meaningful or serious manner.
If the problem in America were as simple as either of these worldviews suggest, the solution would be simple. Instead, the true problem arises from the synergy of both the problems.
How it works
In order to see how it all comes together, we must first accept that there are bad actors in both business and government. Perhaps one side has a greater proportion of bad actors, but set that aside for the moment.
Let’s take air pollution as the example. Say the manufacturer of a very popular product, the zWidget, was spewing toxic fumes from their factory. The libertarian answer to this problem is twofold: first that the market would fix the problem; people would become aware of the situation and stop buying zWidgets until the manufacturer, lets call them Arhat Computers, changed their ways. The price of zWidgets might have to increase, but the market would gladly bear the extra cost because of the benefit of clean air. The other half of the libertarian solution is to treat the problem as a property rights problem. The pollution is adversely affecting other people’s property; let them sue.
The property rights question is currently not feasible. Air moves through one’s property quickly enough that it cannot be said to belong to any one individual. Perhaps someday, but not in our current legal system.
The market solution is too slow and requires both the company and the consumers to be vigilant good actors. Short-term interests can easily override either party’s best intentions. I think it’s a shame that dolphins get caught in tuna nets, but I don’t want to stop eating tuna; I just want it to be harvested in a more dolphin-safe manner. I generally won’t boycott a product unless I have a nearly equal alternate product lined up. By the time Arhat Computers’ marketing department discovered that they were losing sales of zWidgets, millions of people could have been poisoned.
Furthermore, Arhat’s legal department might suggest that studies be commissioned to determine whether the chemicals from the zWidget plant actually have an adverse health risk. The parameters of such studies could be such that they could refute the harm caused by their factories. A well-done public relations campaign could discredit any assertions that their toxic waste is anything other than healthy and delicious.
Here’s the tricky thing: Arhat Computers would be right to do at least most of this. From the company’s perspective, they oughtn’t waste money and raise the price of zWidgets unless it is certain that they would be making life safer for the people breathing their fumes. If their smaller competitors are also using similar production techniques, the added expense would put Arhat in a disadvantageous position. That is not just about profits, it’s an existential threat to the product and ultimately the company. It’s natural and logical that Arhat Computers would approach such a question with skepticism and resistance.
Nevertheless there remains a problem. Considering the price of the delay of waiting to see whether the market will correct the pollution problem and the comprehensive nature of the damage done, using the power of the government seems appropriate. That’s what government is supposed to do: proscribe behavior for the good of the citizens.1
People write to their elected representatives complaining about Arhat’s pollution and demanding that something be done. Legislators draft legislation that would (at least pretend to) address the problem by imposing heavy restrictions or heavy taxes for polluters. That’s all well and good, but Arhat Computers wines, dines, and donates to the politicians. Their lobbyists make the case why their company deserves to be exempted. Perhaps there is a grandfather clause that exempts factories older than a given date, but more likely it’s a complex set of criteria with plausible reasoning at each juncture. The end result will still be: Arhat and no one else will be exempt from the new law.
When the final law comes out: it’s trumpeted as a triumph for goodness. The new law holds down those nasty corporations and keeps them from doing evil, except that the fine print exempts the ones that were actually doing evil in the first place.
End result: politicians look like they are fixing things and can brag about their accomplishments at campaign time, and also get huge war chests on which to run their campaigns (and probably insider trading information as well.2) Arhat Computers remains unaffected by legislation that would affect their profits.
On its face, that looks like Arhat Computers didn’t gain anything. They just failed to lose as much as they would have. But all the other businesses in the industry now have expensive restrictions or high taxes to deal with. If you could be the only runner in a race without your feet tied together, you’d win all the time!
Since it worked so well once, the next step is for Arhat Computers to take a proactive stance and lead the charge for greater accountability in their industry. As long as they can work it out that they get fewer restrictions than their competitors, increasingly restrictive laws and higher taxes work out in favor of the corporations. As much as the wealthy and influential talk about lowering taxes and getting government off of our backs, that’s not what their paid lobbyists advocate for. It would be bad for them if they used their influence to get everyone’s taxes cut or everyone’s restrictions reduced. They want the uneven playing field that comes from draconian regulation and high taxes that affect everyone except them.
It gets worse. Because the original problem—a polluting factory—is still unaddressed. So the cycle in this oversimplified scenario starts over. People get up in arms about the wrongs that some businesses are doing and push for more laws, which makes it easier for companies to get laws passed which don’t affect them. The people who are trying to use government to make the country safer actually make things less safe.
As long as corporations profit from things that are contrary to the public interest, there will be people pushing to restrict those things. As long as politicians are corrupt, only an elite few corporations and influential individuals will be able to do things contrary to the public interest, which keeps those corporations doing those things because they can make more profit now that their competition is in a weaker position. Trying to fix this by strengthening government and weakening business, or by strengthening business and weakening government, will always do only one thing: strengthen the influential minority that profits from corruption and profits from our divided nation.
The rhetoric isn’t helping
The adage «divide and conquer» applies. America is being divided by Fox News and MSNBC telling us that we have to point our fingers at each other and fight amongst ourselves. We are being divided by the Tea Party and Occupy Wall Street telling us that the solution is to give one half of the problem less power and by doing so embolden the other half of the problem.
The Occupy movement has its math dangerously wrong as well. The top 1% is paying 28% of all federal taxes according to FactCheck.org (which I don’t think can be accused of right-wing bias.) It’s not the top 1% earners we need to worry about, it’s a much smaller minority of wealthy individuals with access to and influence over politicians. Despite this group being wealthy, they are not all the wealthiest. Danger is not measurable by income.
A few months ago Lawrence Lessig made an appearance on the Daily Show in which he refreshingly distinguished influence from wealth as the problem in America (and here is his solution.) Despite his rejection of the idea that government should be made smaller, Lessig correctly identified systemic political corruption as a problem bigger than any other our nation currently faces. Indeed, Alexis de Tocqueville credited America not with having the right answers, but with having the capacity to correct our mistakes. Whether you believe that we have too much government or too little, the fact that your opinion almost doesn’t matter unless you organize political fundraisers is a more fundamental problem.
This has been my biggest disappointment with Barack Obama. Though I have complaints about policy, that amounts to a difference of opinion. I had hope for his presidency, and that hope was dashed on discovering that the top five TARP recipients were the top five contributors to Obama’s presidential campaign. (Note: this appears not to be true, although the top TARP recipients are indeed among the Presidents top 2008 contributors. Please see the comments below.) I can’t believe that is a coincidence. I can forgive almost any policy, program, or law he has signed (though the provisions for indefinite detention without charge stick in my craw—was Obama trying to emulate Abraham Lincoln by tossing habeas corpus in the wastebin?) so long as it comes from an honest belief that it is the right path. Handing out hundreds of billions of dollars of taxpayer money (nearly $3000 for every man, woman, and child in the United States) to the people who funded his campaign is not forgivable.
To be sure, I’m not a fan of Obamacare. Though critics are fond of calling it socialism, it’s not certain that outright socialism is as bad as what’s actually happening. We have a handout to large corporations in the form of individual compulsion to hand over their wealth. This is not socialism, it’s that horrid thing the worst of the Republicans embrace: crony capitalism. Which of course should not be confused with actual capitalism.
Yet the rhetoric from both sides is talking about the same thing: capitalism versus socialism. The real thing we need to be concerned about is neither the power of the government nor the power of corporations, it’s the influence of a small minority over both institutions. Solve the problem of systemic corruption and government and big business will still have a tug of war over their competing interests, but that tug of war will lead to checks and balances on both sides rather than a continued collusion that reinforces our problems.
What can be done?
How to address the problem of undue influence is very tricky and politically difficult because essentially it’s a struggle to get the foxes out of the henhouse. Solutions are necessarily more difficult and complex than is appropriate for a short article. However, there are some ideas worthy of consideration.
Repeal the Reapportionment Act of 1929. This is the law the restricts the number of Representatives in the House of Representatives to 435 members. The Constitution states that representation should not exceed more than one representative for every 30,000 citizens. Capping the number of Representatives means that individual representation gets diluted and lessened every year. If each Representative had 30,000 constituents to get votes from, local interests would have a higher priority. Further, if lobbying companies had to try to influence over 10,000 members of the House of Representatives, lobbying on national issues would become much more expensive. Certainly not impossible, but more difficult. Any actual corruption of individual Representatives would have less impact, and considering the number of bribes one would have to make in order to get anywhere with real, direct corruption, the chances of keeping such corruption secret would be much lower.
There are obvious logistical problems with having a House of Representatives with 10,000 members, but in the 21st Century those shouldn’t be difficult to solve. The State of the Union address might have to be made in a football stadium, but if the rules were changed so that votes could be made remotely and debate could take place via videoconference or using forum software on an intranet (even the Internet so long as the site could be secured properly) it could all work out.
The real problem is that current Representatives would never stand for such a thing, because their power would be diminished and diluted. But the purpose of the House of Representatives is to provide a balance against an elite ruling body, not to be an elite ruling body itself. Yes, I’ve complained elsewhere about direct democracy having too much influence in our country, but the House of Representatives is the appropriate, designated place for the popular voice. Let it actually be that.
As a side benefit, it would be easy to mostly eliminate gerrymandering of Congressional districts. One can dictate that no municipality can share more than one district with other districts. Otherwise, districts must conform to city limits. There would still be gerrymandering within cities, but the more extreme and harmful examples would be curbed.
Repeal the Seventeenth Amendment. I wouldn’t even go back to the original text of the Constitution.3 Instead, I would leave it up to each state to determine how their Senator is chosen. Let some states choose by popular votes, others by appointment by the Governor and approval by the Legislature, others by appointment of the Legislature with approval of the Governor. There may be ways to select or elect Senators that I haven’t thought of.
The important part is that a Senator ought to be free of the direct influence of the popular vote, and would therefore be vulnerable to an entirely different set of sources of corruption. They would be beholden to the interests of their state, which might not be an exact match for the interests of the voters in the state. Let’s not forget that the Federal Government did not create the states; the states created the Federal Government.
Due to these acts, one Federal law and one Amendment to the Constitution, we no longer have legislative bodies at the Federal level that act effectively as checks and balances to one another. We have two versions of the same legislative bodies, both beholden to very similar constituencies. The difference between the House and the Senate has become subtle; each has changed into something less effective and with less integrity than these bodies at the time of their foundation.
Seats of power will always be attractive to the power-hungry. What was once special about the United States is that most of these seats of power were limited and balanced by other powers. Both the Seventeenth Amendment and the Reapportionment Act consolidated the power of the members of Congress while weakening the institution of Congress. It weakened the states while bolstering the Federal Government. One reduced the voice of the people while the other eliminated a safeguard against the tyranny of the majority.
Make the tax system simple, fair, and free of undue loopholes. This is a topic that deserves its own post and I won’t delve into it too much now. I like the FairTax, but I’m certainly open to other suggestions. It ought to be visible to the citizenry how much of their money the Government takes, and we ought to stop conflating taxing businesses with taxing those who profit from business. Raising taxes on «the 1%» is counterproductive, but when the very wealthiest (less than 1% of the 1%) pay much less proportionately than the middle class or even the poor, there’s a problem there. Increasing tax rates doesn’t help. Eliminating loopholes does. If we stick with a system of taxing income, capital gains ought to be taxed at the same rate as any other income. To some that will sound like a wacky left-wing idea, but if it was good enough for Ronald Reagan it ought to be good enough for today’s conservatives.4
Would any of these measures eliminate systemic corruption? Of course not. But they would be a good step toward strengthening and protecting the people while spreading corrupting influences more thinly. Corruption would be naturally more localized, but even that’s not a bad thing. I’d rather have my Representative in my neighbor’s pocket than in the pocket of a Board of Directors of a multinational corporate entity.
What really needs to happen is for Americans to come together. United we stand, divided we fall applies not just to foreign threats but to the problems that face us domestically. This is not a pollyanna plea for harmony; our nation depends on vigorous debate over important issues. But we must—we absolutely must—stop letting the influence of a few, both in government and without, divide us as a nation by showing some one-half of the problem and showing others the other half. Remember that solutions may be mutually exclusive in some cases, but identifying the problems aren’t. Just because you’re right about the problem doesn’t mean that the people on the other side of the fence are wrong. Recognizing the real threat is key if we are ever going to overcome it instead of fighting each other.
Actually, that may be the only thing government is capable of. ↩
Remember that members of Congress are exempt from most insider trading regulations. Think about that for a moment. Who needs actual bribes when you can get advance notice of privileged information not yet available to the general public and buy and sell stocks with that information? It’s illegal for most, but legal for members of Congress. ↩
Article I, Section 3, Clause 1: The Senate of the United States shall be composed of two Senators from each State, chosen by the Legislature thereof, for six Years; and each Senator shall have one Vote. ↩
OK, I know that Reagan wanted lower capital gains taxes, but the fact remains that he thought that lowering income taxes while equalizing capital gains taxes to income taxes was a fair enough deal to sign into law. ↩