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    Inside, Outside - Leave Me Alone

    By Donal on Tue, 01/04/2011 - 1:47pm | Politics




    James Hamilton mentioned that The Wall Street Journal had a list of the best economics blogs, including his own - Econbrowser. Another was The Baseline Scenario run by James Kwak, who I recalled from a Democracy Now! interview, and Simon Johnson (above).

    I was immediately drawn to Kwak's post, Symbols and Substance, which referenced another blog post, A Must Read by Arnold, son of Merle - a son of Kling, but not a Klingon. Kling was talking about a book, The Symbolic Uses of Politics, by Murray Edelman, and challenged the Baseline Scenario duo by name for some previously expressed excitement about Elizabeth Warren and the Consumer Financial Protection Bureau.



    If Simon Johnson and James Kwak would only read [Chapter 2, "Symbols and Political Quiescence] and grasp its significance, then they would stop swooning over Elizabeth Warren. She provides what Edelman would call symbolic reassurance, while the bankers continue to get the real resources that government has to offer.

    The book (or, more specifically, chapter 2) has a long and deep influence on me because it was perhaps the favorite political theory of my father Merle Kling, a political scientist who earned a mention in the acknowledgments. My father constantly invoked the terms "symbolic reassurance" and "political quiescence" in commenting on political events. He would have immediately understood and appreciated my application of the terms to Elizabeth Warren and her role in the nascent financial consumer protection agency.
    Edelman posits two classes of political actors: Small, organized interest groups (I call them the Insiders) and the unorganized masses (I call them the Outsiders).

    ... the Insiders use overt political dramas as symbols that placate the masses while using covert political activity to plunder them. What we would now call rent-seeking succeeds because Outsiders are dazzled by the symbols while Insiders grab the substance.
    Edelman thought of insiders as exploiting outsiders, in almost a Marxist sense. For Edelman, symbolic reassurance and political quiescence were somewhat troubling phenomena. The masses were being lulled by symbolic gestures into accepting adverse political outcomes.

    Which to me explains the small bills approved by the lame-duck Congress. Back to Kwak at Baseline Scenario:

    Seen from this angle, then, the Insiders want to lose some battles. If they were to win all of them, the Outsiders would get suspicious. So what the Insiders really want is to lose the symbolic battles and to win the substantive battles. And I guess Kling is arguing that the appointment of Elizabeth Warren is a symbolic battle, not a substantive one.

    On the other hand, though, does that mean that I should be opposing the appointment of Elizabeth Warren? I don’t think Kling would go that far. Probably he would simply say that I am overestimating her potential impact in the grand battle with the Insiders of the financial sector. I agree that one should not overestimate the impact of one person or one agency, and I also suspect that some people in the administration were happy to go along with the Consumer Financial Protection Bureau because it gave them disproportionate political cover for a bill that, in many ways, and perhaps more important ways, is too soft on Wall Street.

    Now why I find this interesting is because my wife got me Seeds of Change, John Atlas' story of ACORN, for Xmas. I'm still in Chapter Two, but I was struck by this quote from the Preface:

    Since the Boston Tea Party, every major improvement in economic, social, and political conditions has occurred when the educated elite and ordinary people join together to push for change. That's how Americans abolished slavery, established voting rights for women, ended lynching, expanded workers' rights, provided a safety net for seniors and the poor, boosted a majority of the US population into the middle class after World War II, protected consumers from tobacco companies and the environment from corporate polluters, dismantled Jim Crow, and improved conditions for migrant farm workers. If America is going to dramatically reduce poverty, it will require a movement similar to those.

    As I read this, with my particular interest in the consequences of energy depletion, it seems to me that it took a lot of organizing and cooperation, even in times of an energy surfeit, to accomplish social goals that we now take for granted. The insiders aren't going away - in fact they're grabbing with both fists. But I no longer see much evidence of the liberal, educated elite and the ordinary people connecting on any social movements. I don't even see the liberal, educated elite connecting with each other. So maybe my fear that ADD/ADHD/Autism will damage the prospects of the poor should extend to the social capability of the so-called elite that used to be able to reach out to the poor and each other.

    Topics: 
    Politics

    Comments

    Phew, there's a bunch here.

    I don't think there's any doubt that from the insider's point of view, "give and take" means give on the symbolic issues and take on the issues where the money really changes hands. Elizabeth Warren probably is a symbolic victory, as is the creation of a consumer protection agency in the first place.  I mean, let's face it, we already have a bunch of consumer protection agencies and where have they gotten us?  Leaden goods from China, death spinach and unreported pharmaceutical side efffects.  But hey, let's not write it off yet.  We don't know what the future holds and though I believe Warren wasn't given the necessary powers, she is a spitfire.

    Instead, let's take a look at a truly symbolic victory the Home Affordable Modification Program.  It was created to deal with a very visceral objection to TARP -- that home borrowers were not being helped while home lenders were getting blank check recapitalizations.  Well, it turns out that HAMP was a very weak program that stopped very few foreclosures, had very little authority over lenders (who had to ultimately agree to any modifications) and that it didn't even spend all of the money allocated to it which is nonsense because it could have used the money to help people get current on their mortgage debts.

    There's no outrage over the failure of HAMP, nor is there outrage over the fact that HAMP was designed to fail.  Most people didn't need it.  If they took note of it at all it was only to say "See, the government did something for the little guy," even if it didn't work.

    I suppose that if a program or policy has the support of both educated elites and the working population that it would be harder for the government to fudge the emotional equation.  But one thing to remember is that educated elites are not insiders.  They aren't at the seat of power.  We all can name plenty of even public intellectuals with great ideas who have almost no say in the process.  Michele Bachmann gets more say than Gore Vidal or, for that matter, George Will (and probably to the chagrin of both).

    Among outsiders there probably is too big a disconnect between the intellectuals and the practicals.  The insiders like it that way and have of course campaigned for years to undermine the trust that people have for people in education, media, entertainment and the arts.  The only way for intellectuals to fight back is to be less frivolous or at least to spend more time showing their pursuits benefit everyone.  But just try asking a quantum physcisist why that Large Hadron Collider is worth it.  They always stumble.  One reason intellectuals are outsiders is that they stink at explaining themselves.


    by Michael Maiello on Tue, 01/04/2011 - 2:21pm

    Great blog, donal, and great response Destor. I've lightly reviewed the resources linked here and look forward to getting back to them for more in depth reading.

    So far, it reaffirms for me what I have consistently argued about HCR and FinReg reform and nearly every other initiative that "gets passed" in Washington in our present state of political realities. It becomes increasingly apparent that we will only get as much regulation or reform as the owners (or "insiders") will allow. This results in a whole lot of window-dressing and little else in virtually every political initiative undertaken in Washington that might bear some negative impact on slaking the owners/insiders thirst for more and more wealth and power.

    Thus, we are allowed to "accomplish" Health Care Reform - but only if we first agree to hold harmless the Insurance Industry, Big pHarma, and the rest of K Street as the primary consideration in this effort. Single Payer is dismissed out-of-hand as a "third rail" to be avoided in these discussions from the outset, for example, even though many economists and health care experts advocate single payer as an important and eminently defensible option to consider - one which is in fact quite successfully realized in other countries.

    Destor sez: "I suppose that if a program or policy has the support of both educated elites and the working population that it would be harder for the government to fudge the emotional equation." 

    I respond: "Harder? Yes. Impossible? Demonstrably no."

    The Public Option "debate" was one such case where the educated elites and the working population were pretty much in synch, and for good reason. The argument in favor of offering "Medicare for all" as a competitive counter-balance to rapacious insurance monopolies was perceived by many to be a no-brainer. As one who understood this HCR effort as "symbolism over substance" in real time, I was dumbfounded (but not surprised) by the theatrics and contortions that were undertaken by the White House and certain members of Congress to quite literally snatch defeat from the jaws of victory on this one. As the public option went down to defeat, Rahm and Lieberman and Baucus, et. al., could shrug their shoulders and say "Well, we tried!" Yet, it was quite apparent that they were quite satisfied to have dodged a bullet on this one on behalf of the owner/insiders calling the shots.

    In FinReg, the effort to craft meaningless reforms was even more transparent - or was at least more difficult to embrace and act upon with the intention of not actually accomplishing anything. This is because the very purpose of the effort was to quite directly pin back the ears of the owners/insiders in response to their abuses that nearly led to a total meltdown.

    "You know, I think we desperately need an independent Financial Consumer Protection Agency," says Chris Dodd. "But we just don't have the votes."

    "I really admire Elizabeth Warren, and think she'd be an excellent choice to head such an agency," says Dodd. "But I don't think we can get her confirmed."

    No real advocacy undertaken for these positions from the Dems in Congress or the White House, despite their wholesale popularity among the voters. Instead, defeatist rhetoric is offered that is quite apparently calculated to throw a wet blanket over the idea. That Elizabeth Warren was subsequently granted a compromise(d?) position in a compromise(d?) FCPA is testament to jusy how much public support there was for these measures despite the effort to torpedo them by the Dem leaders But Dodd and Rahm & Co. did manage to wring ever bit of defeat out of it that they could.

    They are Palooka Dems, as I call this iteration of the Dem Party establishment. They are allowed to play the role of the liberals on the Hill and in the White House. And they are afforded opportunities to burnish their credentials, too, on matters that don't directly affect the pocketbooks of the owner/insiders. But when "the insider" shows up ringside in the midst of a fight to whisper in their ear, you can fully expect these Dems will pull their punches and take a powder on cue.

    We absolutely must come to terms with this dynamic if we ever hope to gain control of our government. Yeah, the "liberal Dem" side in this theatrical performance under the directiion of the owners/insiders is always going to appear to be more sympathetic to the left. As we assume our role as scripted for us, we will continue to hear folks on the left rooting for the "good guys" because the other side is so blatantly opposed to everything we hold dear.

    But given the assault we are under from those who wish to grow richer and more powerful at our expense, ask yourself just how effective a political system it is when it's core priority - from the "left" and the "right" - is to make certain that no one ever lands a blow against those who are the rich and more powerful? If we are allowed only so much economic justice and reform and regulation as K Street will allow, how will we ever actually tip the balance in OUR favor?

    There are alot of owner/insiders who have invested a great deal of monies and effort in gaining their preferred answer to that question. And by playing along in the role scripted for us as cheerleaders for "our side" against "the other guys," we perform well the task of making sure the question never really gets asked.

    I suggest instead that we remake the Dem Party as a force in Washington that actually stands in opposition to the other side in this fight over who will be the winners and losers in this economy. Let the owner/insiders have the Republicans as their agents who will carry their water. But at least give us a fighting chance to place someone in their way who just might poke a hole or two in their bucket so that even the thirsty can drink.


    by SleepinJeezus on Wed, 01/05/2011 - 10:15am

    So religion isn't the only opiate of the masses?

    Seriously, thanks for the pointer.  I used to read Arnold.  His experience at the Fed and Freddie Mac was very helpful in understanding the financial crisis.  Not sure why I stopped reading him.  I think there was a problem with the feed .

    Anyway,  he is so smart.  I have to get that book.


    by EmmaZahn on Tue, 01/04/2011 - 3:16pm

    I just spent 45 minutes on a relply, Donal, and apparently pressed the wrong keyboard key, and it's gone.  Bugger.  I'll try to get back; I'd read Kwak's piece and the Klingon's last month, and have been thinking about them a lot.  So many examples abound, though fin-reg symbolism has been even worse than the hidden parts of the tax bill.  Anyway, thanks for writing this up.  It's great.


    by we are stardust on Tue, 01/04/2011 - 5:46pm


    Seen from this angle, then, the Insiders want to lose some battles. If they were to win all of them, the Outsiders would get suspicious.

    This brings back the gambling analogy and is also an example relating to Insurance.

    The light has to shine on a few slot machine winners while the bells and whistles sound off in order to keep the action hot. A few houses have to burn down to keep people too scared to gamble on no insurance. The casino owners in Las Vegas aren't gambling and the insurance companies have a sure bet.


    by A Guy Called LULU on Tue, 01/04/2011 - 6:01pm

    Lulu you have once again just given us a snapshot of the American Dream.

    Oh, the machine paid out cause I prayed to my Lord & Savior.

    Oh, the machine paid off because I am so clever and I work so hard.

    Ha

    THE HOUSE NEVER LOSES AND IT AINT CAUSE OF PRAYER.


    by Richard Day on Tue, 01/04/2011 - 8:27pm

    Those casino owners aren't gambling because the odds are 50-50...that's reserved for high rollers with entry fees of 10's to 100's of thousands of dollars just to sit at the table. Instead, they're more into gaming for the general public where the odds are heavily in their favor with the blessings of the State Gaming Commission...note gaming in the title. All machines are programmed to pay off in frequent intervals depending on the probability a specific combination of cards are dealt...chance isn't even calculated in the program. So a slot machine is a virtual goldmine simply because a regulatory authority has allowed the casinos to adjust the programming to rake in profits under the veil that a slot machine is a game of chance...which it's not. So take the casino gaming plan and apply it to insurance and you have a system ripe for exploitation of the public with approval of the government who has established the rules by which the insurance industry follows. Strange thing about slot machines is most people who put their money into them do so out of boredom, like someone smoking a cigarette...they need something to occupy their minds and just about all know in advance their chances of breaking even is the only 50-50 chance in the game if they're lucky. It really depends on the mindset of the public if a game is a gamble. Same can be said for insurance too.


    by Beetlejuice on Wed, 01/05/2011 - 5:44am

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