UP@NIGHT

A poll recently done for the New York Times and CBS News on the state of the American Dream has some interesting results.  It appears that more Americans believe that they have achieved the American Dream today (44%) than they did four years ago (32%).  The results may seem strange given the depth of the recession.   However, it appears that for a substantial number of Americans the way in which the Dream is understood has undergone a revision.  There is now less emphasis on financial security.  The New York Times article excerpted below is worth a read, although the examples given in the article are open to alternative interpretations.

What Happens to the American Dream in a Recession? (excerpt)

The Times and CBS News asked this same open-ended question four years ago and again last month: “What does the phrase ‘The American dream’ mean to you?”

Four years ago, 19 percent of those surveyed supplied answers that related to financial security and a steady job, and 20 percent gave answers that related to freedom and opportunity.

Now, fewer people are pegging their dream to material success and more are pegging it to abstract values. Those citing financial security dropped to 11 percent, and those citing freedom and opportunity expanded to 27 percent.

….

Delacroix’s Lady Liberty leading consumers and investors who say, enough is enough.

America, land of opportunity, where hard work and merit determines who gets ahead.   A nation where a good education, the gateway to success, is available to all.

Not so fast, I’m afraid.   America is actually losing ground in providing access to college.   And disparities in income are responsible.   How bad is the situation?  It seems that, “bright and focused kids from poor families are going to college at the same rate as unfocused or low-scoring kids from families much better off.” This quotation is from a recent piece by Andrew Delbanco, “The Universities in Trouble,” in The New York Review of Books.  It’s worth a read.  Here is an excerpt.

But the public–private partnership that did much to democratize American higher education has been coming apart. In 1976, federal Pell grants for low-income students covered 72 percent of the average cost of attending a four-year state institution; by 2003, Pell grants covered only 38 percent of the cost. Meanwhile, financial aid administered by the states is being allocated more and more on the basis of “merit” rather than need—meaning that scholarships are going increasingly to high-achieving students from high-income families, leaving deserving students from low-income families without the means to pay for college.

In 2002, a federal advisory committee issued a report, aptly entitled “Empty Promises,” which estimated that “more than 400,000 students nationally from families with incomes below $50,000″ met the standards of college admission “and yet were unable to enroll in a four-year college because of financial barriers. More than 160,000 of these students did not attend any college because of these barriers, not even a two-year institution.” Two years later one leading authority pointed out that “the college-going rates of the highest-socioeconomic-status students with the lowest achievement levels is the same level as the poorest students with the highest achievement levels.”[1] In short, bright and focused kids from poor families are going to college at the same rate as unfocused or low-scoring kids from families much better off.

….

1. Donald E. Heller quoted in Paul Attewell and Davd E. Lavin, Does Higher Education for the Disadvantaged Pay Off Across the Generations? (Russell Sage Foundation, 2007), p. 199; Donald E. Heller, “A Bold Proposal: Increasing College Access Without Spending More Money,” Crosstalk, Fall 2004; and Brian K. Fitzgerald and Jennifer A. Delaney, “Educational Opportunity in America,” Condition of Access: Higher Education for Lower Income Students, edited by Donald E. Heller (ACE/Praeger, 2002).

1934  movie poster, United Artists

For reasons that you might easily be able to infer from our present collective financial woes, I recently had an urge to read (and listen to) a book that I have never read, The Count of Monte Cristo.   My more philosophical side says, avoid revenge.  No good will come of it.  My gut says, go, go, go.

Here is a short passage you might enjoy.   The Count is speaking to the banker Danglars, one of the guys who “done him wrong,” but is unaware of the Count’s actual identity.

“But what is the matter with you?  You look careworn; really, you alarm me; for a capitalist to be sad, like the appearance of a comet, presages some misfortune to the world.”  The Count of Monte Cristo, Modern Library Edition, 2002, p. 887.

Bernie M

Music to the rescue in the face of economic troubles….In this case some saxophonists.

Another reason to support the arts, even in times of trouble.

At today’s Congressional Hearing:

“We are meeting today at a high point of public anger,” said Mr. Liddy, a former chief executive of Allstate who was installed as A.I.G.’s chief when the Federal Reserve announced its rescue package. “I share that anger. As a businessman of some 37 years, I have seen the good side of capitalism. Over the last few months, in reviewing how A.I.G. had been run in prior years, I have also seen evidence of its bad side.”  NY Times,  March 18, 2009.

I watched a good portion of Edward M. Liddy’s testimony before Congress today.  I hadn’t planned to.  I got caught up.   Liddy took on the job of CEO at A.I.G. for 1 dollar a year.  He appears to be a man sincerely dedicated to the service of his country.  However, while by no means clueless about the possible reaction of the American people to the AIG bonuses, he did not realize that his arguments amounted to telling the American people that we had been blackmailed.  If he hadn’t agreed to pay the executives of the compromised division their bonuses, they would have walked, AIG would have tanked, and our economy would have headed into a death spiral.  Or so he claimed.  Liddy needed to retain these folks.  And he could only do so by paying out millions.  (Yes, he made it clear time and again that there were contracts that had to be honored,  but as congressmen pointed out, the company could have chosen not to pay and accepted the possibility of being sued.)

“Of the 418 employees who received bonuses, 298 got more than $100,000, according to the New York attorney general, Andrew M. Cuomo. The highest bonus was $6.4 million, and 6 other employees received more than $4 million. Fifteen other people received bonuses of more than $2 million and 51 received $1 million to $2 million.” NY Times,  March 18, 2009

The danger to the nation due to a complete financial collapse is far greater than the danger of terrorism.  And this is just what Liddy was claiming might happen if these executives walked and AIG tanked. So we have people dying in the fight against terrorism, but we have others insisting on the entire amounts of their bonuses in order to cooperate and prevent financial ruin. As patriotic Americans (that is, those who are Americans), they should have offered to work for a small portion of what they were being paid, especially the top earning executives.

Each contract with each employee had its own unique structure, reported Liddy.   They simply couldn’t hold back the funds.  However, today he reported that he has asked the executives to return 50% of the money.  They don’t have to, but as good Americans they might.   (Why didn’t he ask this of them last week? or a month ago? or ask for more?) Think about this, as you think about all those who are on the street without jobs, including Wall Street people.  Think about the sense of entitlement that these AIG executives have.   Think about why so many of us didn’t see this sense of entitlement as dangerous to the well-being of our nation until very recently.

The American people have been sold a bill of goods for almost two generations now, and it goes something like this: if we take advantage of the magic of the market, if we just look out for number 1, the free market will reward us as a nation.  Yes, there are folks in the military who sacrifice, and there are those who volunteer for civilian service, but at the end of the day we serve our country and communities best by seeking our own fortunes.

I am putting this too starkly you say?  Perhaps.  But it became the mantra of Wall Street.  And as they once said about GM, what’s good for Wall Street is good for America.   Just watch those 401k’s grow, and never take any money out of them.  The market always makes a profit in the long run.   (Of course what they forget to tell you is that the long run can be very long indeed.)

The party’s almost over, as so many have declared.  The party, however, is not just about living the high life in good financial times.  The party is about having a set of beliefs that comfort and aid us in getting on in the world.  And one set of these beliefs has involved the goodness of capitalism and the free market.  We have spoken about them as if they are gods.  They are not.  Capitalism can be an exceedingly productive economic system, but only when operating under proper guidance and regulation.  There are no free lunches and there are no entirely free markets.   Believing so is exceedingly dangerous, especially when this ideology replaces our common sense about the sacrifices and labors required to build and maintain communities and a nation.

AIG, Bernie, foreclosures, housing bubble, -401K, recession, depression, global financial meltdown, Eric Cantor, Mad Money, etc.

It’s time for a break, if only a short one.    

Let’s return for a moment to how our grandparents (or perhaps our great-grandparents) kept their spirits up in the Great Depression. From “Follow the Fleet” (1936): 

The word is out.  Unless AIG pays their executives millions more in bonuses, they might lose the best and the brightest of their employees.  Corporate raiders will swoop out of the clouds and plunder their human capital.  And then where would AIG be?  And then where would we be?   (According to FOX, if AIG cannot retain their top execs, it has threatened to morph into a black hole and take the inner planets with it.)

But wait.  We may have nothing to fear but fear itself.   Let us not forget that AIG is in the business of insuring companies against their own incompetence.  The solution is simple.  AIG should insure itself against its own incompetence through one of its products, for example, FinancialGuard (see below).  So, even if it were to lose its best and brightest by not paying out the bonuses, AIG could still survive through the miricle of insurance.

……

Here is AIG/Australia hawking one “product” that can help save it (and us):

FinancialGuard™ Civil Liability Insurance

What is it?

Professional indemnity insurance on a civil liability basis

Why do you need it?

The activities of regulators, the changing distribution of financial institutions products and a more informed and litigious consumer environment lie behind the increase in the frequency of civil liability claims against financial institutions….

Our Civil Liability product provides blanket protection against the financial consequences of a legally enforceable obligation in which a civil liability is incurred arising from services provided. Covers includes defence costs and civil penalties.

Who needs it?

All Financial Institutions including Banks, Building Societies, Investment Management Companies, Insurance Companies and Stockbrokers.

…….

And under a discussion of assets on the AIG site we find the following pitch:

A company’s assets are vital to its operations. And protecting those assets is essential to the well being of a business. Assets can be tangible and intangible and can include a company’s corporate reputation, as well as physical assets such as property or goods. We offer standard or customised programmes on a domestic or global scale as well as a wide range of products covering more demanding and specialist risks.

Protection of assets!!  Protection for corporate reputation!!  Protection from the activities of regulators!!  AIG can save itself (and us). 

Up until now little beside blind greed and gross incompetence have been offered to explain AIG’s behavior.  Here is an alternative hypothesis: Someone inside AIG decided that the best way to stimulate the market for its financial insurance products was to come up with an example (AIG’s own failure) that would scare the daylights out of even the most confident of finance people, pushing them right into the arms of AIG’s financial insurance sales force.   Insanely diabolical, wouldn’t you say?

And if this hypothesis is incorrect, I have another:  AIG is a corporate comic genius.

P.S.  Here’s five bucks.   Feel free to buy yourself half a dozen shares of AIG.

And here is Late Night with Conan O’Brien – Stephen Colbert String Dance Off (2/17/09)

Posters from the WPA, Library of Congress Collection

Sometimes you can almost smell a cheap shot.

The stimulus package that passed the House last week failed to receive one Republican vote.  Among the worthwhile provisions in the bill is fifty million dollars for the National Endowment for the Arts.  This is no mere give away.  The money would help to stimulate the economy, even though it is a rather paltry sum for the whole nation–the price of one CEO’s jet to be exact.   But the arts certainly make for an easy target, especially when you are willing to lie about  the contents of the bill.

While the debate over the stimulus package was raging, the Republican whip, Mr. Eric Cantor, claimed that $300,000 had been set aside in the bill for a sculpture garden in Miami.  Well, here are the facts.  No such provision exists in the bill.  It seems that Cantor felt that the package wasn’t specific enough for his taste, so he decided to claim on national TV that a project that had been funded in the past is in the current bill.   From Politifact.com (St. Petersburg Times):

In an interview with Fox News on Jan. 23, 2009, Virginia Rep. Eric Cantor, the House Republican whip, said that in a meeting with President Obama, Cantor asked if he “could use his influence on this process to try and get the pork barrel spending out of the bill. I mean, there’s $300,000 for a sculpture garden in Miami.” . . .

“We don’t know what they’re going to spend it on,” Bradley [a Cantor spokesperson] said. “There is no direction to the NEA on how to spend it.”

So to give people an idea of how the NEA spends its money, Cantor’s staff looked at some recent grants awarded by the NEA.

And in 2008, the NEA gave $300,000 to the Vizcaya Museum and Gardens in Miami to restore an outdoor statuary. The Vizcaya estate is one of the country’s most intact remaining examples from the American Renaissance, a period when the very wealthy built estates to look European. The $300,000 grant was to help restore some of the outdoor sculptures — statues, urns and fountains — that had been severely deteriorating due to South Florida’s salty, damp and subtropical climate, not to mention the hurricanes.

But again, this was an NEA grant from last year .

Vizcaya Museum and Gardens

Yes, there certainly have been more serious lies by politicians, but the point is that here you have the House whip willing to make stuff up (non-existent pork)  in order to help sink the stimulus package.  Pretty shameless stuff.   (As a matter of fact, Eric, it’s a shanda fur die goyim. You should know better.)

The fact is that 1) artists have lost jobs in the current recession and 2) the arts are economic engines in many communities.  There is good statement on the website of the National Endowment for the Arts detailing reasons for supporting the provision for the arts in the stimulus package.  For example, the statement cites a report by the National Governor’s Association:

A recent study released by the National Governors Association titled Arts & the Economy: Using Arts and Culture to Stimulate State Economic Development states, “Arts and culture are important to state economies.  Arts and culture-related industries, also known as ‘creative industries,’ provide direct economic benefits to states and communities:  They create jobs, attract investments, generate tax revenues, and stimulate local economies through tourism and consumer purchases.”

P.S.   Eric Cantor appears to be a major piece of work.  Here he is trying to blame Congress during Jimmy Carter’s administration for the current housing crisis.

UPDATE  2-11-09.  More Cantor…This guy is just what the Republicans need to make sure that they remain the minority party for the next few generations.  Go, Eric (and his Office), Go.

The Plum Line, Greg Sargent’s blog
Cantor’s Office Responds: Video Depicting AFSCME Members As Goons

As a professional philosopher what I am about to do here on this site, on this day, is sacrilege. Instead of making arguments against John McCain’s ideas (or lack thereof), which I do elsewhere, I am going to mock him. What I will be doing is a form of ad hominem argumentation, which is to say, arguing against the person and not his ideas. Definitely Verboten. But in my defense, first, McCain really doesn’t have any ideas. Second, he started it with Paris and Spears, comparing Obama to a gas pump (which was really the point of McCain’s gas commercial, think about it), and then by bringing in Moses. Third, this is a political contest, not an academic dispute. So, the gloves are off. If Obama can’t respond in kind, I can.

On this site, here and now, and in the coming weeks, you will find revealing insights into McCain the man. Each of these images have been cursor selected for their revelatory power. (Suggestions for additions are welcome. As a matter of fact, following Larry Geater’s idea, let’s see this as a contest.  Submit your entries under Comments.)  Stayed tuned. And in the meantime, take your pick and start circulating some visual memes around the Web.

On how to run a tight ship and be a Cylon, BSG’s Colonel Saul Tigh is John McCain (or vice versa):

On knowledge of the economy, John McCain is Alfred E. Neuman (with green $ backgrounds):

On military preparedness and guns: John McCain is Elmer Fudd

On general competence, anger, and far-sightedness, John McCain is Mr. MaGoo:

The Young John McCain and the Young George Bush. Can you tell the difference?

McCain before and after a recent election make-over:

John McCain having another senior moment, confusing the phrase “a thousand years in Iraq” with “a thousand year Reich.”

And then after “recovering,” some eight or nine minutes later, fantasizing about his place in the cosmos as a celebrity because of his win on American Idol: