Thursday, July 30, 2009

All the Answers You'll Ever Need-fred reed

Last night Vi and I watched for the first time a documentary, (Carry It On) shot by my friend Jim Coyne, on Joan Baez and the movement against a war no one any longer remembers, far away, on another planet. It was lovely filmwork. Jim is a genius. I may have to stop having friends. I feel inferior to all of them. It gets depressing.

Of no interest to anyone but me, perhaps, it completely changed my understanding of Baez, whom I had regarded for forty years as just another pretty voice. No. Smart, tough, principled in a world that isn’t. I hereby apologize.

In that war—I forget what planet it was on—the freaks and professors and mothers and the simply decent finally managed stop the carnage, though only after the Pentagon had killed 60,000 American kids and a million or so Vietnamese, not to mention devastating Laos and bringing Pol Pot to power. God I’m proud. We’re such a force for democracy.

When the GIs left Asia in ’73, the commie peaceniks thought they had won. And they had, for ten minutes. The grip of the military on the country loosened briefly.

Unfortunately the soldiers learned. Not how to win wars, which they do poorly if at all, but how to keep a war going. Winning a war isn’t all it’s cracked up to be. The promotions and contracts stop. When you are paid to do something, it is in your interest not to finish doing it.

The Pentagon’s first lesson learned was to avoid conscription, as the conscripted and their families will take to the streets. By using an army of volunteer suckers about whom nobody of importance cares, the military severs its wars from most of the country, which loses interest. The brass are then free to do as they choose.

The second lesson learned was that while defeating the enemy is not necessary, and perhaps not desirable, controlling the press is everything. And they did it.

So forty or so years after all the love-ins, the marches, the righteous dope (all of which may seem silly, but in my view preferable to watching a Cambodian mother screaming over the opened bleeding guts of her child) the Pentagon is at it again. Once more the jets howl over remote primitive countries, countries that did nothing to the US and couldn’t have, and promotions flow, and contracts, and generals demand more troops and more money to stop communism. Excuse me, terrorism. Soon, the Chinese, a better threat, coming to a theater near you. With the passing of years, one demon fades into another. Switching enemies is much easier now, what with search-and-replace.

But it’s all about democracy and freedom and patriotism and Saving America from…from something. The hoopla changes little, and how well it works. Patriotic friends sometimes say to me of the military ardent things like, “When your country says go, you go!” I seldom point out that no one in their families is in the slightest danger of having to go, nor that “the country” is recruiting hard and they aren’t urging their children to enlist; nor do I ask, “What is your attitude toward having your daughter drafted onto the streets of Baghdad for five tours, perhaps coming back drooling and gurbling for life after having her brains scrambled by a roadside bomb?” Patriotism is important to patriots. They are full of it, and I’m about a quart low. I shut up. I don’t want to lose friends.

Yet…I think I must be a communist. It seems to me that when your country says “go,” you should ask, “Why?” Do you have a reason to kill whoever you are being sent to kill? Then go. Otherwise, don’t. If I told you to go to Ottawa and kill Canadians, you would think me mad, and think it correctly. Why then should you obediently kill them because a politician in Washington tells you to do it? I do not understand.

And of course “your country” doesn’t tell you anything at all. Countries are abstractions. Men tell you to go, and for their own purposes: Dick Cheney or George Bush, Nixon or Nitze, or the men who run the petroleum industry, or people in the Israeli lobby, or men in the military companies who want contracts, or officers who want to give war a try.

Why are these people “my country”? And why isn’t Joan Baez my country instead of David Petraeus? I will choose who is my country, thank you. Ledbelly, Benny Goodman, Carl Perkins and Miss Emily Anne will come before Lemay, McNamara, Lyndon Johnson, and Obama. Long before.

Soldiers talk much of honor. I do not understand how military service can possibly be thought honorable. If the Wehrmacht were landing in North Carolina, yes, but I do not believe that it is. Where is the honor in bombing from the air lightly armed peasants who can’t fight back? It is cowardly, yes, and obscene, but do not talk of honor. Murder for hire is murder for hire.

We now have men who sit at screens, drinking coffee and firing missiles from remote robotic aircraft at people on the ground whom they cannot identify. Brave men, they. I could burst into a kindergarten and kill the children with a ball bat. The one is as honorable as the other.

Recently I saw on television a black sergeant in Afghanistan, probably chosen by his commander for photogenicity, standing in front of a tank or mobile gun, I forget which. He said something scripted like “This is a such-and-such unit, the most powerful fighting force in the world.” This sort of ritual cockiness is carefully ingrained. Near my barracks in Parris Island was a sign, “The most dangerous thing in the world is a Marine rifleman.” If it had said “an ambitious colonel” it would have come closer to truth.

But one may wonder (unless one already knows) how good the Pentagon’s military really is. A pissed-off peasant with an RPG would seem on the evidence more effective than the pricey zoom-kapows arrayed against him.

I cannot endorse the politics of the Taliban. If one of them told me that my daughter couldn’t go to school, one of us would leave the room on a stretcher. Yet as fighting men, are they not magnificent? They have only rifles, explosives, RPGs, and balls. Their enemies have unlimited air support, helicopters, armor, artillery, sophisticated communications, night-vision gear, good food and excellent medical care. The Taliban take heavy casualties, their enemies almost none. The ragheads do not even have PX privileges. Yet they have not been defeated. A fight on even terms would last perhaps five minutes.

This, for a trillion dollars.

What the hell. Plus ca change, plus ca doesn’t. Next year in Beijing. Tell you what, though. I never liked Kum Ba Yah, and “We Shall Overcome” is probably the sappiest song every written. But those people had nothing to be ashamed of.

On a pleasanter note: I have decided to become a famous song-writer and make millions. The following is a beginning, copyright Fred Reed, all rights reserved. Major recording studios can send large checks.

Tuesday, July 21, 2009


All sorts of startling conclusions are being drawn about the failure of California’s ballot funding initiatives last week. Newt Gingrich hailed it as another Boston Tea Party, and New York Times columnist Paul Krugman insisted that it condemns California, one of the world’s largest economies, to banana republic status. But if it was such a big deal, how come the voter turnout was so low?

Maybe because the statewide ballot initiatives were a bit of a political practical joke played by a Republican governor and leading Democrats pretending to be dealing on a statewide basis with the consequences of a national economic crisis that can be solved only through massive federal intervention. There is no way that the people of any state will vote to increase their taxes in the midst of a deep recession, and certainly not when the funding demands seem to have little to do with solving the problem at hand. As a subheading in the ever-sober Economist magazine put it, “Voters reject a ballot they could not comprehend.”

I tried, and after reading the opposing argument in the literature supplied at my nearly empty polling station I voted for the ballot propositions that our governor, Arnold Schwarzenegger, had requested. I assumed that this would help our vastly underfunded inner-city schools. Later, my son Chris, who teaches in one of those schools, told me that I might have been wrong and that the convoluted paragraphs of the all too typically obtuse California propositions could not improve matters much at all.

So, filled with doubt and guilt, I took solace in the fact that in terms of the money involved it wasn’t that big a deal, and that surely the feds, to whom we Californians send more in revenue than any other state, would bail us out as they have the banks. Heck, the entire projected California budget shortfall comes to only $21 billion, a tiny fraction of the banking bailout. Yes, only—what is $21 billion in federal loan guarantees for California to skirt bankruptcy compared with the $45 billion given to Citigroup, along with $300 billion more in guarantees for that company’s toxic paper? Or how about the $185 billion doled out to AIG? If Citigroup is too big to fail, isn’t the state of California? Does anyone seriously believe that the national economy can snap back to health if California is in the dump?

The cause of California’s, and almost every other state’s, predicament is an economy ruined by deregulation policies that were secured by the lobbying efforts of Wall Street, led most prominently by Citigroup. So, I expected a federal government that has spent trillions salvaging the banks that got us into this mess to find the relatively minor sums needed to bail out California and other states that have been the victims of Wall Street’s dangerous games.

But I didn’t count on the tough-love steeliness of President Obama’s senior adviser David Axelrod, who told Californians that “there’s a limit to what the government can do” when it comes to bailing out our state (as opposed to the banks). Or of White House press secretary Robert Gibbs: “Obviously, the state has to make some very tough fiscal decisions … [given] the budgetary constraints that they have.”

Tough for whom? Not the politicians of either party. The results of such decisions are tough for the poor of America, two-thirds of whom are kids, left to the tender mercy of the states, thanks to the sweeping “welfare reform” and other programs put into place by the Clinton White House in one of that Democratic administration’s signature triangulation ploys.

The Los Angeles Times summarized the direction of those difficult choices in a story headlined “Poor would be hard hit by proposed California budget cuts,” which stated that Schwarzenegger “is considering a plan to slash California’s safety net for the poor by eliminating the state’s main welfare program, health insurance for low-income families and cash grants to college students.”

Bail out the banks, but not the 500,000 poor families with children served by the CalWorks program, which will be dismantled, or the 928,000 children covered by the Healthy Families program, slated for oblivion.

At a time when the feds are spending with such abandon in an effort to stimulate the economy, why is it tolerable to leave states in a position where they are forced to fire teachers? As the Los Angeles Times reported: “Schwarzenegger has proposed slashing state spending on education by $3 billion to help close the budget gap, and the state would pay dearly for canceling classes, firing instructors, cutting class days and shortening the school year, experts said.” How can there be federal funds readily available for banker bonuses but not to keep teachers in the classroom with their students? It must have been the kids who caused the meltdown.

Thursday, July 16, 2009


Dispatch from the commute: A TriMet driver's got something to say

Posted by Joseph Rose, The Orgeonian July 16, 2009 08:23AM

Today, out of fairness and a desire to once again show that I'm not out to kick around TriMet drivers, we offer up a dispatch from behind the big, stressful wheel of a bus.

First, some context. Two weeks ago, I wrote about an Oregon City woman who felt a bus driver had been overly hostile to her family on two occasions along the No. 33 line. During the last encounter, the driver threw the woman and four children off the bus and into the pouring rain because she didn't have enough fare for one of the kids.

TriMet seemed to side with the rider, saying it was a perfect example of how a little give by bus drivers might go a long way toward helping the agency's reputation as it moves forward with unpopular cutbacks.

As you can imagine, the story wasn't popular with operators, many of whom wrote and called to accuse me of writing a "hit" piece. The mother of a driver even left a phone message, demanding that I do another story about how her son and his transit compatriots are under so much pressure to keep their route schedules they skip bathroom breaks.

Then there was operator Chris Hanen, who wrote me a letter, encouraging me to ask "What causes the drivers to be rude?" Well, here it is in its entirety:

Dear Mr. Rose

As a TriMet driver of over 16 years. I found the story you wrote about rude drivers a little biased. You reported the effect but what you should have asked yourself is, "What causes the drivers to be rude?"

We all have bad days but that is not what is going on here. Drivers are not given enough time to use the restroom, eat a snack, have a cup of coffee or just have a few minutes to themselves before having to turn the bus around and do it all again.

Stressed drivers don't provide very good customer service. The difference in bus lines is drastic. Some lines have ample time which will have no complaints while other lines like the 33 for example will have more complaints. I used to enjoy my job a lot more than I do now.

A passenger who has been riding the system for many years said to me, "I never see the bus drivers smile much any more like they used to." That should tell you a lot. With the new cuts in service, it's not going to get any better.

TriMet saves a lot of money by cutting break time from runs. Lots of blue shirts are not happy about the way management has chopped time from the runs the past 7 years. Saving money makes Fred (Hansen) look good though. And all his new trains that go where buses used to. Do you think WES service will be cut? It's costing a lot to serve only a few.

Trains are not a bad thing but too much too fast doesn't serve the public as a whole. Low ridership runs don't even have a chance anymore. Buses feed the trains not the other way around. We have been expanding train service at the expense of bus sevice.

He signed off as "Nice Driver. Almost all the time!"

Bottom line: This year's service cutbacks aren't easy on the operators either.

I've said it before, and I'll say it again: I'm not on a crusade to make the hard-working -- and often under-appreciated -- army of TriMet operators look bad. Despite what that note attached to a clipping of one of my Oregonian columns on break-room wall says (yes, I know about it), I'm also not in cahoots with TriMet administrators to force concessions in a contract year.

One, I didn't even know negotiations were going on. And TriMet managers also have plenty of issues with what I write.

Don't believe me? Just ask Al Margulies, who drives the endangered No. 67 in Beaverton and runs the "Rantings of a TriMet Driver" blog and its sister site, "Who is Joseph Rose and Why Does He Hate Bus Drivers?"

Recently, Margulies challenged me to ride his route with him. I did. We talked. He gained a better understanding of the watchdog role of every journalist, and I stepped off his bus with a greater appreciation of what operators face on the road.

The offer is out there for any driver. Ask and I'll ride with you.

Of course, for the sake of full disclosure, there have been times when I've been an anonymous rider and witnessed behavior that made me wonder why the drivers behind the wheel chose their profession.

On one ride, I held on tightly as an operator seemed to be on a mission to blow through every red light downtown. And I'll never forget the driver who jumped out of his seat at a stop, glared at his passengers and shouted, "Whoever's got their earphones blaring that music better turn it down or you're off at the next stop!"

I looked around and realized I was the only one listening to music. Another rider, obviously in shock, looked at me and said, "I think he's talking to you."

Weird. First, the "headphones" were actually those tiny iPod earbuds. Second, the volume was low enough that I had no trouble hearing the driver. Also, it was hardly skull-shattering hip-hop or hard rock.

I was listening to Miles Davis' "Sketches of Spain."

The driver must have been a Coltrane fan.

Wednesday, July 15, 2009

Wendell Potter is the health insurance industry’s worst nightmare

Wendell Potter is the health insurance industry’s worst nightmare. He’s a whistle-blower. Potter, the former chief spokesperson for insurance giant CIGNA, recently testified before Congress, “I saw how they confuse their customers and dump the sick—all so they can satisfy their Wall Street investors.”

Potter was deeply involved in CIGNA and industrywide strategies for maintaining their profitable grip on U.S. health care. He told me: “The thing they fear most is a single-payer plan. They fear even the public insurance option being proposed; they’ll pull out all the stops they can to defeat that to try to scare people into thinking that embracing a public health insurance option would lead down the slippery slope toward socialism ... putting a government bureaucrat between you and your doctor. They’ve used those talking points for years, and they’ve always worked.”

In 2007, CIGNA denied a California teenager, Nataline Sarkisyan, coverage for a liver transplant. Her family went to the media. The California Nurses Association joined in. Under mounting pressure, CIGNA finally granted coverage for the procedure. But it was too late. Two hours later, Nataline died.

While visiting family in Tennessee, Potter stopped at a “medical expedition” in Wise, Va. People drove hours for free care from temporary clinics set up in animal stalls at the local fairground. Potter told me that weeks later, flying on a CIGNA corporate jet with the CEO: “I realized that someone’s premiums were helping me to travel that way ... paying for my lunch on gold-trimmed china. I thought about those men and women I had seen in Wise County ... not having any idea [how] insurance executives lived.” He decided he couldn’t be an industry PR hack anymore.

Insurance executives and their Wall Street investors are addicted to massive profits and double-digit annual rate increases. To squeeze more profit, Potter says, if a person makes a major claim for coverage, the insurer will often scrutinize the person’s original application, looking for any error that would allow it to cancel the policy. Likewise, if a small company’s employees make too many claims, the insurer, Potter says, “very likely will jack up the rates so much that your employer has no alternative but to leave you and your co-workers without insurance.”

This week, as the House and Senate introduce their health care bills, Potter warns, “One thing to remember is that the health insurance industry has been anticipating this debate on health care for many years ... they’ve been positioning themselves to get very close to influential members of Congress in both parties.” Montana Sen. Max Baucus chairs the Senate Finance Committee, key for health care reform. Potter went on, “[T]he insurance industry, the pharmaceutical industry and others in health care have donated ... millions of dollars to his campaigns over the past few years. But aside from money, it’s relationships that count ... the insurance industry has hired scores and scores of lobbyists, many of whom have worked for members of Congress, and some who are former members of Congress.”

The insurance industry and other health care interests are lobbying hard against a government-sponsored, nonprofit, public health insurance option, and are spending, according to The Washington Post, up to $1.4 million per day to sway Congress and public opinion.

Don’t be fooled. Profit-driven insurance claim denials actually kill people, and Wendell Potter knows where the bodies are buried. His whistle-blowing may be just what’s needed to dump what’s sick in our health care system.

Denis Moynihan contributed research to this column.

Sunday, July 12, 2009


By Joe Conason

The new senator from Minnesota is a comedian, writer and actor who lived on the Upper West Side of Manhattan and raised a lot of money from friends in Hollywood. The departing governor of Alaska is a hockey mom from a small backwoods town who likes to hunt and fish. Yet today, Al Franken looks wholesomely mainstream, while Sarah Palin seems headed for the tabloid fringe.

That unexpected contrast reveals much about the current configuration of Republicans, Democrats and politics in America—a story of two parties that crossed paths while traveling in opposite directions over the past dozen years or so.

Before he entered politics, Franken had a long and highly successful career in television, wielding a sense of humor that could be wicked, outrageous and even offensive. He was an urban denizen with liberal sensibilities who counted professional wrestlers, college professors, scruffy journalists (including this one) and members of the Grateful Dead among his friends. Even after he signed on as the star host of the progressive Air America radio network, he was primarily an entertainer.

Back around the time that Franken quit “Saturday Night Live” for the second time, Sarah Palin entered public life as a civic activist and candidate for local office in Wasilla, Alaska, where she was soon elected mayor. She was a populist of the right-wing variety, a fundamentalist churchgoer and a scourge of politics-as-usual. Concerning herself with such conservative staples as government spending, tax cuts, term limits and gun rights, she was a textbook Republican officeholder.

But somewhere along the line, everything changed for both them and their parties. Franken left showbiz behind to prove himself a serious policy wonk as well as a devoted family man; Palin transformed herself and her family into a reality television show.

The entertainer became a public servant—and the public servant became entertainment.

How this all came to pass is a complicated story that actually begins long before the political decisions that led to his rise and her fall. The bookish, wise-guy Al always had a political streak dating back to his college years at Harvard, where he switched from mathematics to political science and graduated with honors. The telegenic, athletic “Sarah Barracuda” embarked on a career as a TV sportscaster in Alaska’s biggest city before eloping with Todd and moving home to Wasilla.

The reversal of the parties’ trajectories, in style and substance, may have begun during the 2002 election, a stunning midterm defeat for the Democratic opposition that Republican strategist Karl Rove predicted to be the start of decades of unchallenged rule for GOP conservatism. That was also the moment when Paul Wellstone, the Democratic senator from Minnesota who had become a national icon of progressive politics, died in a terrible plane crash along with his wife, Sheila, his daughter Marcia and three aides, as he was campaigning for re-election.

In the bitter aftermath of his death, turncoat Democrat Norm Coleman won a special election to succeed Wellstone, and joined the Republican majority in the Senate. And Franken, a Minnesota native, began to think about whether he might someday run for that same seat to vindicate the legacy of Wellstone, one of his closest friends.

In victory, the Republicans grew increasingly extreme and overconfident, encouraging figures such as Palin to follow their most extreme instincts. In defeat, the Democrats at last began to refurbish their progressive ideology, reconnect with working American families and rediscover their will to fight.

As an author and radio personality, Franken made a significant contribution to his party’s renewal. He was ready for prime-time politics in ways that Palin, the sudden star who could barely utter a coherent paragraph, was not.

Beneath the glittering surface, she exhibited profound weakness. Behind the joking persona, he showed moral and intellectual strength.

Joe Conason writes for The New York Observer.


By Marie Cocco

When a virulent disease is ravaging you like a cancer, you don’t want a cacophony of voices promoting different or contradictory cures. Yet that is what we’re starting to hear about the economic crisis, not only from a politically divided—and pretty scared—capital, but from within the Obama administration itself.

In just the past few days, Vice President Joe Biden has said the young administration misread the depth of the recession—an honest account, since most private economists did as well. Laura Tyson, an outside economic adviser to the White House, said it’s wise to start preparing another stimulus package.

Then President Barack Obama made everything perfectly muddy when he said in an ABC News interview that the seriousness of the downturn and how to attack it is “something we wrestle with constantly.” Yet in the next breath, he expressed concern about the burgeoning deficit.

But if anyone’s looking for some clear voices, there are 650,000 of them just waiting to be heard. That is roughly the number of long-term unemployed who will begin losing their jobless benefits in September, according to the National Employment Law Project.

Remember, the recession didn’t start last fall when the government bailed out AIG and the financial system froze. It began in December 2007—and 6.5 million jobs have been lost since then. Depending on which state and the sort of triggers that apply to benefits, hundreds of thousands of workers laid off early in the downturn are soon to be left without the basic sustenance of an unemployment check.

Meanwhile, the Labor Department says, the number of unemployed people out of work for 27 weeks or longer continues to grow, reaching 4.4 million last month. In June, three out of 10 jobless workers had been out of work for at least six months, according to the department’s data.

The stimulus package the president signed soon after taking office did provide extended benefits, and boosted weekly payments. But even that extension runs out on Dec. 26, and would not apply to all the unemployed. Does anyone really believe that a significant portion of the unemployed will have found new work by then? Hardly. Both private and government economists now predict that unemployment will continue to rise at least through the end of this year.

“We can’t ignore this moment when all these folks are running out [of benefits],” says Maurice Emsellem of the National Employment Law Project. “That needs to be a top priority, to help these workers.”

Let’s stop kidding ourselves. In no contemporary economic crisis—not even those that unfolded on the Republicans’ watch—has Congress left the unemployed completely in the lurch. So some sort of spending package—call it stimulus, call it stopgap emergency aid, whatever works—is going to have to be passed.

The unemployment emergency helps feed another crisis Congress is going to be forced to address: the state budget disasters unfolding around the country. So far, 42 states have cut budgets that already had been enacted for fiscal 2009, according to the National Governors Association. More and deeper cuts are expected next year.

Already states have laid off and furloughed workers—including, in some states, the very workers who process unemployment claims. Generally speaking, states are required to balance their budgets each year, a mandate that forces them to pull money out of the economy through spending reductions and tax hikes, counteracting the federal government’s efforts to juice things up. “That is what happened during the Great Depression, we had states working against what the federal government was doing,” says Heidi Shierholz, an economist with the Economic Policy Institute.

With red states and blue, Republican governors and Democrats, all struggling against the same relentless, recession-driven drops in tax revenue, an almost irresistible political coalition for more aid to states eventually will take shape. And with the fast-approaching September deadline for extending some unemployment benefits, there will probably emerge one of those must-pass measures that may or may not be called another stimulus bill.

Any hot air expended trying to stop it serves no purpose but to fuel political fires. Remember, that is the whole point of those now huffing and puffing most heartily. They don’t want to figure a way out of this morass; they just want to figure out a way to unseat those now in office.

Marie Cocco’s e-mail address is mariecocco(at)

Sunday, July 5, 2009


Many in Britain and the United States are in mourning for what’s taken as the suicide of the American (or Thatcherite, or Chicago-school) model of capitalism, accompanied by the non-interventionist state that hands the national economy over to business and financial leaders to run.

Not least among the mourners ought to be The Economist magazine in London, a major part of whose charm has always been the insolent certitude with which it expresses its views. It is not a publication used to lunching on its own words. But The Economist too has become a victim of the world crisis, and its current issue’s cover story pays a handsome tribute to the success of the formerly scorned, centralized, interventionist, Colbertist French economic model, and the state practices and values that support it.

“France’s economy,” it writes, “has been less hard hit than many. Its GDP is expected to shrink by 3 percent this year ... against 4 percent in Britain, 4.4 percent in Italy, and 5.6 percent in Germany. It is less dependent on exports than Germany, and consumer spending in the first quarter of 2009 was up on the same period last year. The government ... is set to have a deficit in 2009 (6.2 percent of GDP) well below those in America (13.6 percent) and Britain (9.8 percent).”

French household debt is half that in America, no bank has failed, none has been nationalized, executive pay is reasonable, and “the income gap between the top 10 percent and the bottom 10 percent is far smaller than in Britain or America.” The country is crisscrossed by 230-mph TGV trains, 80 percent of the power is nuclear (and more is exported), its auto producers are in reasonably good shape, Air France is the most profitable airline in the world, and French-dominated Airbus sells more planes than Boeing.

The French are uncertain of what to make of this tribute, since self-denigration is (oddly enough) a national characteristic, and they have only recently elected Nicolas Sarkozy, another font of certitudes, who won the presidency while insisting to the French that the “French model” was obsolete and that France had to learn new ways to live by adopting the “Anglo-Saxon” model of laissez-faire capitalism, market freedom and financial innovation.

It is, of course, premature to say that what the French call capitalisme sauvage is dead. One doubts that it’s really dead—the cadaver twitches; the Obama administration in the U.S. has yet to drive a stake through its heart. A decade from now, Barack Obama might well be discovered on the board of Goldman Sachs, and Timothy Geithner will almost certainly be there. But the capitalism they serve may not quite be the same.

The United States is certain to learn something from the French success in long-term state planning, infrastructure development and, one would hope, will build a vastly improved health system (the World Health Organization considers France’s the best in the world) and other social protections.

The business model that has dominated the British and American economies since the 1960s, and been propagated worldwide, crashed because it is inherently unstable. It works in only one direction, to take value away from the real economy and give it to stockholders and bankers. It’s an asset-stripping system that benefits company managers and directors, bankers, stock traders and financiers. To workers and their families, who in the past believed that they had a stake in the business economy, and to the communities suffering de-industrialization, it said, “Too bad, but you’ll be better off in the long term—if you are still around.”

To be fair, this was the unintended result of an ideological position of political origin, which claimed that unregulated property ownership is the fundamental right of a free society, and which in its American version subordinated the interests of the labor force and local and national communities to the pursuit of ever-higher returns on investment.

This doctrine concerning property rights historically was a reaction against the 20th century totalitarian communism that intended to destroy private property. While the modern economic system makes a natural appeal to greed, its theoretical origins lie in the work of certain Central European intellectuals—notably Frederick Hayek, Karl Popper and, to an extent, Joseph Schumpeter—who were exiles from the political crisis in Europe and fearful of the abuse of centralized government power.

The business model that Margaret Thatcher, her advisers and conservative Americans constructed from this foundation was condemned to its eventual self-destruction by its disequilibrium.

The classic English and Scottish economists (Adam Smith, David Ricardo, etc.) believed that a business enterprise was an agent of social benefit, in that it created goods and wealth, but also had obligations to its workforce and society as a whole. The same values are responsible for the “French model,” and are now demonstrating that they can succeed in bad times as well as good.

Visit William Pfaff’s Web site at

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