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In mid 2010, I engaged in a spontaneous conversation in passing with a man who told me that he was the manager of the diving facilities of the Rockford Country Club in Illinois. I was stunned to learn that that country club had only two black members out of what must have been at least a thousand, if not more. He told me there were not many “people of color in positions” in the city. I stood there stunned. In 2010, people still have that mentality? He said the city was twenty years behind.  I would say more something more like forty. Yet strangely, he noted that because families had changed, he had recently changed the dress code in one of the dining areas so kids from the pool could be accommodated. So, we are to believe that the situation of blacks hasn’t changed, but families have. To be sure, the family structure and dynamics had indeed changed in the last quarter of the twentieth century as women entered the workplace en masse and the number (and proportion) of diverces increased. However, it is unclear to me how these changes translate into making a dining area “informal."

The caucasion manager’s selective view of societal change—being no doubt convenient for him—struck me as strange. I got the impression that people in that city must be averse to (or scared of) virually any kind of change. How is it, I thought to myself as he spoke, that people could find so much satisfaction in the status quo? The manager told me that status and race were still important in that city. Relatedly, he characterized the city of 150,000 as a southern town interlarded in the north. His country club was the epitome of consciousness based on status and race.  Moreover, that club evinced what both John Adams and Thomas Jefferson called the artificial aristocrisy, which is comprised of wealth and birth.  This kind of elitism is distinct from the natural sort, which the two American founders took to be based on virtue and talent. Racism, and the segregation that ensues from it, is of the artificial sort.

Lest any kind of segregation be excoriated against, it should be noted that it can be quite natural for polite people to want to segregate themselves from the vulgar. There is indeed a marked difference in how people have been raised, and in how they conduct themselves.  This is not to say, however, that manners are on the side of the country club, for arrogance and elitism are quite rude qualities.  It seems to me that politeness can be reckoned as a virtue, and thus placed in the natural aristocrisy.  Perhaps education too, or at least valuing it, is also akin to virtue. The city in which the country club is located is at least historically heavily blue-collar.  Traditionally, the people holding such jobs felt threatened by education, and thus looked down on it.  Is it not natural that a highly educated person would rightfully want some distance from being disvalued?  There is, I submit, a natural aristocrasy that legitimates the natural grouping tendency of human beings.  We tend naturally to segregate ourselves. It is difficult to generalize against this propensity.  A mother of young kids is apt to segregate her family from a known child molester (one of the Catholic churches in the city had one as a priest). Ex-smokers are apt to segregate themselves from people who impose with their addition.  Furthermore, people with common interests are apt to associate. An apologist for the country club might say that it is composed of members who have common interests and generally get along. In this respect, it seems quite natural. However, it is not clear to me that these qualities cannot pertain to people of different races. Such artificial delimiters are perhaps why artificial aristocrisy is so squalid; there is also a rather significant opportunity cost to it. Sadly, the manager seemed utterly unaware that he subscribed to it at all, yet fully sure of himself nonetheless.

A venture more useful than bashing presumption at a country club involves coming up with a criterion on which “good” from “bad” segregation can be determined. Generally speaking, segregating a virtue from its associated vices is justifiable. Immediately a problem can be detected. Namely, although there are a cluster of virtues on which most people would agree, there is no fixed number. Furthermore, people such as the dining manager at that country club can use a virtue (e.g., gaining a vocational position through talent and effort) to attempt to justify what is really just garden variety racism and elitism.  In short, segregation of virtue from vice, while in itself laudable, can involve a slippery slope that can essentially whitewash segregation that could be considered as a vice.  Can we trust in nature, such that the natural associative instinct can be distinguished from the squalid instances of segregation?  Furthermore, are there certain virtues that can be deemed as legitimate sources of segregation—such virtues being agreed to explicitly or tacitly in a social contract?  In modern society, segregation by race is explicitly excoriated against, though I’m not sure if it is implicitly agreed to by all. There might be a natural instinct to associate with similar people. Just as people include physical appearance in determining whom to date, external features could be part of the mix in how humans are hardwired to associate. Likeness might be associated in evolution with survival as like is not apt to fight with like.  However, external features are an imperfect indicator of whom a person is apt to get along with—though not irrelevant.  So modern man may well have to sometimes choose to override instinct in the knowledge that going by virtue can have more survival value.  Similar values can trump similar skin-color, even if the clubby vestiges of racism make it more difficult to trust across the artificial lines even in the twenty-first century.

The EU and US can be seen to differ markedly in the degree to which the interests of big business are etched in the respective societies and polities.  That is to say, the difference goes beyond the question of the relative influences of the lobbyists. I contend that the relative proclivity toward business in the American states tilts the political playing field in the direction of the financial interests. This difference reflects a more basic subterranean difference on how much wealth and its manifestation as business are valued.  That is to say, it is easier for financial sector lobbyists in the United States because the societal values lean in their favor. This can be seen from the respective financial reforms in the EU and US after the financial crisis of 2008. This case bears strongly on my thesis because in both economies the financial sector was viewed as culpable. So one would expect the ensuing laws to come down on the banks rather than be conducive to their interests, unless a societal value on the profit-motive were still in force.

On March 10, 2010, the EU Parliament adopted a Resolution (536 votes in favour to 80 against) calling for the financial sector to contribute fairly towards economic recovery since the costs of the crisis are being borne by taxpayers. On 25 March, Members of Parliament’s special “Financial, Economic and Social Crisis Committee” debated the rationale behind a possible financial transaction tax. Stephan Schulmeister of the Austrian Institute for Economic Research in Vienna said short-term financial transactions can make short-term prices of currencies and other financial products such as derivatives and shares vary wildly. Schulmeister claimed that a tax on financial transactions of just 0.05% would eliminate these short-term transactions, bring greater stability and bring €300 billion of additional revenues to the EU. While the tax would undoubtedly bring in revenue, it is not clear to me that short-term transactions would be eliminated, as they can be worthwhile even with such a tax. Moreover, the financial crisis of 2008 shows us that the volitility can come from the market mechanism itself (in so far as it magnifies irrational exuberance). At any rate, even as there has been division on the matter of such a tax in the parliament, that the proposal has been made distiguishes the legislative body of the EU from the Congress in the US, where such a proposal would undoubted by blocked. Indeed, the EU Parliament has gone ever further.

On July 7, 2010, the EU Parliament approved some of the strictest rules in the world on bankers’ bonuses.  In the legislation, caps are imposed on upfront cash bonuses and at least half of any bonus will have to be paid in contingent capital and shares. MEPs also toughened rules on the capital reserves that banks must hold to guard against any risks from their trading activities and from their exposure to highly complex securities. “Two years on from the global financial crisis, these tough new rules on bonuses will transform the bonus culture and end incentives for excessive risk-taking. A high-risk and short-term bonus culture wrought havoc with the global economy and taxpayers paid the price. Since banks have failed to reform we are now doing the job for them”, said British MEP Arlene McCarthy. Upfront cash bonuses are capped at 30% of the total bonus and to 20% for particularly large bonuses.  Between 40 and 60% of any bonus must be deferred for at least three years and can be recovered if investments do not perform as expected. Moreover at least 50% of the total bonus would be paid as “contingent capital” (funds to be called upon first in case of bank difficulties) and shares. Bonuses also have to be capped as a proportion of salary. Each bank must establish limits on bonuses related to salaries, on the basis of EU wide guidelines, to help bring down the overall, disproportionate, role played by bonuses in the financial sector. Finally, bonus-like pensions are also covered. Exceptional pension payments must be held back in instruments such as contingent capital that link their final value to the overall strength of the bank. This is to avoid situations, similar to those experienced in the wake of the financial crisis of 2008 in which some bankers retired with substantial pensions unaffected by the crisis their bank was facing. The rules apply to foreign banks operating in the EU and to subsidiaries of EU banks operating abroad. The law gives state regulators in the 27 EU states binding powers to take action against banks that fail to comply with the new rules (contrast this with the US Gov’t going after Arizona for trying to enforce US immigration law).

Clearly, the US financial reform does not go this far. Notably, it does not put much of a crimp in the American bankers’ life. This is no accident. The feeling among big bankers in the US is that they dodged a bullet concerning what could have been in the bill. That is to say, there was no “too big to fail” limit put on a bank’s capital or size generally speaking, or on the bankers’ compensation. The American media and President Obama have been strangely silent on why.  Perhaps it is as in the case of the health reform, where the President removed his objection to an insurance mandate and dropped his desire for a public option after the lobbyist for the American health insurance companies told him that her support was contingent on these changes. My point is simply this: Were not American society leaning in a pro-business direction (e.g., economic liberty being salient in how liberty itself is viewed), the President might not have felt the need to be bent in the lobbyist’s direction. That is to say, the lobbyist would not have had so much leverage. Wall Street no doubt had massive influence in the crafting of the financial reform as it was making its way through Congress (even though the banks were culpable in the financial crisis—which is itself telling). I submit that the reasons go beyond the sheer power of money. Fortunately, we can look across the pond for a better look at ourselves.

Sources: http://www.europarl.europa.eu/news/public/story_page/044-71441-088-03-14-907-20100329STO71433-2010-29-03-2010/default_en.htm
http://www.europarl.europa.eu/news/public/focus_page/008-76988-176-06-26-901-20100625FCS76850-25-06-2010-2010/default_p001c011_en.htm
http://www.dw-world.de/dw/article/0„5769943,00.html

See related:http://euandus3.wordpress.com/2010/06/23/regulating-financial-and-commercial-derivatives/ (for a look at the US financial reform—esp. derivatives) and http://euandus3.wordpress.com/2010/07/01/immigration-and-federalism/ (contrast this federalism with that of the EU wherein the states are to enforce the bank bonus limits passed by the EU Parliament).

Just after winning the World Cup of 2010, FIFA officials handed the trophy to the team captain of the Spanish team rather than to the coach or a team owner (in this case, an official of Spain).  In contrast, at the Kentucky Derby, the honors went to the horse’s owner, rather than to the jockey. The distinctively American value on wealth could not be more evident, and the contrast with the World Cup confirms it.  We value wealth so much that we regularly hand trophies to team owners rather than to the players, even as the world does otherwise.  Hence when George Steinbrenner died, the NYT ran a front-page article describing him as “a visionary and a giant in the world of sports.” To be sure, he was a notable team owner. However, in terms of the winning, what of the players and coach of the renowned Yankee teams that won the World Series? It was their talent that was decisive. It is odd at best that at Steinbrenner’s last appearance at the 2010 home owner, the manager and team captain presented him with his 2009 World Series championship ring. That being an owner would justify getting a ring evinces a sort of sordid category mistake—and at the very least an over-reaching.  Putting money on the table does not mean you won; rather, to be out on the field would be necessary.  Sports, in other words, cannot be vicariously won.  Yet wealth is vaunted so in the U.S. that such a stretch is accepted without question.  So, too, we allow physcians to go by the “Dr.” title in front of their names even though they have not earned a doctorate (unless they have the D.Sci. M. degree, which is the graduate degree in Medicine, for which the first degree—the MD—is a prerequisite).  I would even say that we (meaning Americans) are blind to how distortive our dominant value on wealth is, and how it has been exploited.  Essentially, I am pointing to a societal blind-spot rather than merely complaining over trophy ceremonies. Once the blind-spot becomes transparent, it is apt to be approached differently.

Source: http://www.nytimes.com/2010/07/14/sports/baseball/14steinbrenner.html?ref=sports

 "Professional" is a cherished word in modern American society. We are all professionals.  On Craigslist, people use the word to signify that they are not students. Technically, the term applied to highly trained professions in which the extent of training meant that only one's peers could be one's boss. A manager trained at a business school is hardly able to supervise a surgeon, for example.  Only other surgeons can evaluate how well a surgeon does in the operating room.  This differs from a janitor, for example, whose work could be assessed by a manager who has not been trained to clean. Our misuse of the term "professional" can be viewed as an inevitable expansion that plays on the value that we accord with vocation in particular and money in general. That is to say, we look up to executives, physicians and lawyers because they make a lot of money.  Accordingly, other professions want to be known as professionals.  The term thus comes to mean "mature," which can indeed apply to anyone.  Beyond the misuse of professional, the value we put on the moneyed professions (and wealth) has blinded us to the place of the first degrees in schools of medicine and law.  As the first degrees in academic schools, the MD and JD are undergraduate (before graduation in those fields) rather than graduate. That those two degrees are viewed as doctorates by many of their holders in the United States (not so in Europe) illustrates how self-serving the value of being a professional can be.  Essentially, it is the value on wealth that has usurped academic distinctions, resulting in false-entitlement. If those who have not earned doctorates would feel insulted rather than ashamed when called on their ignorance, the extent of arrogance in the value on professionalism and wealth could finally be seen.

It would surprise virtually every American (but only a few Europeans) to know that neither the JD nor the MD degree is a doctorate.   Each one is the first degree in its school, or discipline.  Yet we presume them to evince advanced knowledge, even allowing people with two undergraduate degrees to be "professors" (really instructors) in American law and medical schools. In the school of law, the sequence of degrees is: JD (same as the LLB), LLM (hint: M...Masters), and JSD (Doctorate in Juridical Science). The JSD degree includes advance study, a comprensive exam (an academic exam graded by faculty--not a industry-qualifying exam like the bar), and a defended dissertation. A doctoral degree must be the terminal degree of a field, contain a comprehensive exam, and include significant original research in a defended dissertation. The JD misses on all three points. The title of the first degree in law, the LLB (bachalors in letters of law) was replaced with "JD" largely for marketing purposes in 1901 in the founding of the U of Chicago law school (by three Harvard professors) because prospective students were complaining about having two "B" degrees after seven years of school.  People don't like to think they have gone to school for seven or eight years for two undergraduate degrees, but this is precisely what they have done. Nevertheless, the new law school in need of students complied with the "customer" complaint with a feat of mirrored marketing that was perhaps intentionally ambiguous.  To eviscerate the ambiguity in  Juris Doctor and a doctorate, one must look beyond the mere words.

In medicine, the MD is the first degree. Substantively, it contains survey courses and some seminars, just as in a BA or BS program in liberal arts or sciences. The D. Sci.M. is the doctorate in the field of medicine, and the M.D. is a prerequisite (so the latter cannot be the terminal degree of the field).  The fact that some schools give the D.Sci. M. degree as an honorary degree does not mean that it does not exist elsewhere as the real, terminal degree. Particular medical schools may give the degree as honorary where there are not enough prospective students interested in a doctorate in medicine. 

In divinity schools, the M.Div (before 1968, called the BD) is the undergraduate degree. It is followed by the STM (the masters) and the DD.   When the BD name was changed to the M.Div name, a perhaps-deliberate ambiguity was created wherein one apparent masters would be followed by another (M.Div. and STM).   It evinces a category mistake to have two masters degrees with one being substantively prerequisite to the second. Substantively, the M.Div. program consists of a year and a half of survey classes, followed by senior seminars (just as in the undergraduate law, liberal arts & science, and medical programs).  To regard a graduate with a M.Div., JD, or MD as having achieved advanced knowledge in the respective field is a fallacy perpetuated by the superfluous esteem we heap on the "professions" on account of their association with money (the religious vocation being revered for sacrificing the vaunted wealth).

It makes no difference how many degrees a person has in other fields before commencing study in a professional school. In beginnning to study law, medicine or theology, one begins with survey courses. Furthermore, it doesn't matter whether one's particular school or even country offers the doctorate in the field.  Try telling people that your BA is a doctorate in English because no Ph.D. in the field is offered at your college or even in one's country.  Every field (just like life itself) has a first degree and a terminal degree.  A student does not obtain advanced knowledge in two or three years in a law, medical or divinity school, but only a first degree's worth in liberal arts and sciences.

Sadly, we as a people have esteemed the physcians and lawyers so much that we have vaunted them by unwittingly appreciating their degrees into the stratisphere.   One degree in a given field does not a doctor make.   Europeans have been correct in refusing to call an American physician, "Dr. Smith."   The fact that Mr. Smith would take offense just points to the arrogance that lies in ignorance.  The rest of us enable Mr. Smith to claim the doctoral title before his last name because we don't know any better.   We give physicians titled trophies that they do not deserve.  Moreover, the use of vocational titles (including Professor Jackson) risks a vocational reductionism wherein a person is rgarded (and comes to regard himself) as that which he or she does.   Is vocation really so important that it eclipses or overcomes a person's identity? 

 Maybe it is time that we say "enough is enough" on the green glitter and deflate those who have vaunted their own entitlements going along with being a  professional  to a value or level more fitting to what they have earned.   The extent of illusion that a society can create and maintain is astonishing, yet being in the illusion (think here of the Matrix) we do not see it.  It is time to see the green numbers on the wall.  No wonder even the hint of such sight is apt to incur the wrath of the agents who instinctively protect the illusion because they benefit inordinately from it.   It is time, ladies and gentleman, that we wake up, as the sun is already quite high in the sky and there is much to be done.

“I hope we shall crush in its birth the aristocracy of our moneyed corporations.” 
       Thomas Jefferson

In Citizens United v. FEC on January 21, 2010, the US Supreme Court held by 5 to 4 that because US corporations are legal persons, they can contribute to political campaigns.   The assumption here is that corporations are more than the sum of an aggregate of persons—that is, more than citizens associating.  The corporate entity has rights in itself.  Ginsberg and Sotomeyer questioned in oral arguments whether free speech applies to spending money, and, moreover, whether corporations should be considered legal persons, much less citizens.  After all, they can’t be drafted, or vote.

A corporate is essentially privately owned wealth.  To say that wealth counts as speech seems spurious to me.  In fact, the whole legal person designation seems contrived.  Whereas the Roman republic fell to dictatorship, our republic may well have already fallen to oligarchy or corporatism.   So I agree with Barak Obama that the decision is worrisome.   Already, Dick Durbin of the US Senate said that the banking lobby owns Congress after that lobby sank Durbin’s amendment to allow bankrupcy judges to modify mortgages in foreclosure (the banks want a veto, even if they contributed to the sub-prime mess).  If Goldman Sachs can spend virtually unlimited amounts of money on political campaigns, we can expect to see that bank’s influence over the government expand even beyond what influence it has over its own alums who occupy high policy-making positions in the US Government (e.g., Hank Paulson and Neil Kashkari at Treasury under Bush II).  If our republic is already compromised under the weight of huge concentrations of private capital, the US Supreme Court’s decision may well be enough to sink the republic…ironically in the name of liberty.  But liberty for whom?  Or does “whom” even apply here…  It seems to me that corporations are not citizens associating for political purposes.  There are indeed non-profit political organizations whose function it is to influence policy.  This is not a business corporation’s function.  Nor is spending money itself political speech.  Any CEO can stand outside his or her building and give a political speech for free.  But which citizens does the CEO represent in his or her association of citizens?  Stockholders?  They don’t approve corporate public affairs spending.  Employees?  They don’t either.  Customers?   We don’t approve what a CEO says just because we have purchased a bar of soap.  The US Supreme Court’s majority might well say that the CEO represents the legal person that is the corporation, but then it is not an association of citizens because associations are not said to be persons (rather, they consist of persons).  Is this too logical?  Too reasoned?  Maybe so. But maybe it shows the duplicity involved in referring to an account of private wealth as a person.  It seems to me that it is rather blatant case of anthropomorphism.  …humans treating our artifacts as having our characteristics.  We must really think we are something.

Today, the term ”professional” is commonly used to mean “does X for a living” (other than what, a hobby?).  Actually, the word properly refers to being sufficiently high skilled that one is subject to the industry self-regulation of one’s peers rather than to a manager who is not a peer from the standpoint of the skills.  Modern management is taught in business schools under the premise that a person can apply managerial skill to anything.  However, where a given vocation is highly skilled and a manager doesn’t have that skill (having instead managerial skill), a manager is not qualified to manage the highly skilled professionals.  Put simply, the professionals know so much more about what they are doing that managerial skill alone cannot be a basis for competency in decisions that involve the highly skilled.    The subversion of the term “professional” is meant to democratize the true professionals beyond physicans, dentists, priests, professors and lawyers—the professional class.  That is, the misnomer is actually a rejection of there being higher classes based on skill.   There is an overreaching involved in the common usage.  In Nietzschean terms, it evinces the herd animal claiming a dominance without the requisite strength.  In other words, democratication can be a case of overreaching and presumptuousness borne out of a resentment towards the wealthy and higher skilled.  The misnomer is a case of passive aggression.  I submit that the incorrect use of the term points to a tension within modern society wherein two distinct groups of people do not respect each other.  The highly skilled and the highly educated dismiss the people using the misnomer as pretentious idiots, while the non-professionals dismiss the distinction based on the skill or education.  “I’m a professional too!” the salewoman proclaims while the lawyer replied, “No you aren’t.”  Mutual dismissiveness.  The culpability is not symetric, however.
Fundamentally, the misnomer is rooted in the non-professional’s presumptuousness and resentment.  These qualities are no substitute for continuing one’s studies in graduate school to become a scholar or turning to a second bachelors degree in a professional school by earning a first degree in  law, divinity, or medicine (business is a professional school but managers are not professionals).  That one degree in law or medicine is typically presumed (mostly in the US) to be a doctorate even though it is the first rather than the terminal degree in the school (the latter degree requiring it as a prereq)  is an instance of the democratization of “professional”—but here it is the professional’s credential that is overstated.  That is to say, it is a case of a lawyer or physician rarifying herself beyond her professional grade as if a lateral move to another field were equivalent to getting two graduate degrees (a masters and doctorate) on top of a first degree. 

The professionals who are accustomed to claiming more than they have actually earned educationally may be motivated to overreach here because their professional standing is in turn being claimed by overreaching pseudo-professionals, such as managers (or bankers).  Not unexpectedly, marginal universities are turning some of their skills-oriented masters degrees (such as physical therapy)  into doctorates by adding a year of study without the required doctoral comprehensive exam of the entire discipline and book-length dissertation of original research, which are required for the Ph.D., D.Sci. M, DBA, DD, and JSD— these are the doctoral degrees of Liberal Arts & Sciences and several of the professional schools (Medicine, Business, Divinity and Law, respectively).  Two years (roughly) of survey courses and a year of senior-level seminars in a professional school does not a doctorate make.  The move is lateral from the first bachelors.  Yet the presumptuousness of the physican and lawyer claiming to have doctorates by virtue of their first degree in medicine and law, respectively, are missed by society in the effulgent gloss of “professional,” which comes to be applied by the society further and further down its chain of vocational being.   The emperor is not wearing any clothes, yet fawning crowds marvel at the cloth and claim to be wearing like material themselves.

Does this make me an elitist—pointing out that the cloth is not as refined as we have been led to believe by those claiming to wear it?  Admittedly, my argument may seem elitist prime facie.  My use of big words doesn’t help. However, it may simply be a case of good old-fashioned truth-telling in the midst of some dandy fibbing to the unknowing, who do not realize that they are being lied to by people with a vested interest in the lies.  Surely it is an act of kindness to tell a man, “excuse me, your fly is unzipped,” or to tell a woman, “there is something in your hair in back.”

Democracy is great; it is the overreaching pretentiousness whereby the demos takes itself for something more that it is—something unearned and thus undeserved—that is pernicious and nefarious.

I think it is because income/wealth/profits is valued so much in the US that there is such selfishness recoiling from Obama’s desire for universal health coverage. Also, the republican argument that the Bush tax cuts on incomes above $200,000 should be continued attests to the value. The fact that the argument is being made at all is unbelievable.  Data shows that the rich save the extra money saved from taxes, but that isn’t stopping the Republicans and some House democrats from arguing that the rich would spend the money to hire (i.e., lowering unemployment).  Incroyable, je crois.  The income taxed of small business people is on the income they take out…which would otherwise be saved or spent on themselves…not on their business.  The argument doesn’t make sense and yet it is made as if it does!  Incredibly, some democrats are beginning to buy it.  It is incredible that tax cuts are being talked about at all, given the $13 tillion US govt debt. I understand that raising tax has a contraction effect on the GNP, but how much?  The rich avoiding some additional taxes: would that really mean such a contraction?  Even if it does, the increase to the debt would tend to increase interest rates as well as the amount that the US Government will have to pay on interest. Moreover, an unsustainable public debt makes the US itself ultimately unsustainable. It seems small to worry about a slight contraction (if any) from the restoration of tax rates on those people who have the means to pay higher taxes. I suspect that the underlying reason for the argument is the hypertropic value put on wealth in the US.

Republican outside groups are outspending democrats by eight to one in the 2010 election cycle.  Citizens United, the court case allowing unlimited (and anonymous) corporate political spending (as if spending were speech!), is benefiting the republicans. The republican party advocates policies that are more in the financial interest of the wealthy (e.g., cutting entitlements and extending the Bush tax cuts for those over $200,000). In my view, the case opens up the dichotomy between a plutocracy (rule by wealth) and a representative democracy (rule by the people through their representatives). Although the latter is not perfect (esp when most of the people are idiots), it is better than rule by the moneyed interests (i.e., the status quo).  It is ironic that after electing real change, the forces of the status quo would gain the upper hand. Since the vast majority of American voters are not wealthy, the question is perhaps whether we can be effectively manipulated by political ads into voting for the interests of the wealthy. For example, one outside group had an ad complaining about the U.S. government’s debt and urging less spending on entitlements.  No mention is made of the roughly $1 trillion spent on the wars in Iraq and Afghanistan.  As another example, extending the Bush tax cuts for the wealthy is put in terms of the latter using the savings to hire workers, even though studies show that such tax savings are typically saved. An educated electorate seems to me the best means of resisting such manipulation. Essentially, the distinction can be said to be between the vested interests of the status quo and those of real change.  Too much power going to the wealthy can stultify the political system, such that we do not adapt.  An organism that does not adapt to a changing environment does not tend to survive.

James Madison wrote in Federalist #10, “a rage for paper money, for an abolition of debts, for an equal division of property, or for any other improper or wicked project, will be less apt to pervade the whole body of the Union, than a particular member of it.”

That is to say, it is in the interest of the wealthy that power be taken from your State capital and deposited in the US Government. Is it any wonder, therefore, that consolidation has eclipsed federalism in the U.S?  Given the diversity that naturally exists in an “extended republic” such as the U.S. (i.e., an empire-scale polity), this one-size-fits-all interest of the rich is ultimately self-defeating with respect to the continued viability of the United States. The question is perhaps whether the financial elite will be oriented to the long or short term, and, relatedly, to public or particular interests.

In the U.S. Constitutional Convention, Governeur Morris said on July 2, 1787, that the “Rich will strive to establish their dominion & enslave the rest. They always did. They always will. The proper security [against] them is to form them into a separate interest.” (Madison, p. 233) By this he meant the U.S. Senate. The democratic principle in the U.S. House and the aristocratic spirit in the U.S. Senate “will then controul each other.” (Madison, p. 233) Having the State Legislatures appoint their U.S. Senators—as was the case until 1913—would defeat the independence of the Senate, and hence its function as a check on the excesses of democracy in the U.S. House.  Such excesses had just been evinced in Shays’ Rebellion in Massachusetts, wherein the legislature there had sided with the former soldiers who had not been paid for their service but were still to make payments on their debts.

In other words, one of the purposes of the U.S. Senate as originally envisioned was to protect property (including creditor interests). The assumption was that the representative democracy of the U.S. House would favor the lower classes.  Although the amounts spent on Senatorial campaigns in the early twenty-first century practially guarantee that the seats would defend the interests of the rich, that the Senators are elected by citizens rather than appointed by State governments must compromise the U.S. Senate as a check on the democratic excesses in the U.S. House. Even as this check has been enervated, the protection of wealth function endures.  Indeed, given Shaws’ Rebellion the check on excess democracy is really just the protection of property, which is practially guaranteed anyway by the amounts needed to run for the U.S. Senate.  Not surprisingly, in 2010 the medium wealth of a U.S. Senator was roughly $2.8 million. It is worth quoting from Governeur Morris again—this time from July 19 in Convention. “Wealth tends to corrupt the mind & to nourish its lvoe of power, and to stimulate it to oppression.” (Madison, p. 323)  As the number of electors per member of the U.S. House has increased, even that body could be said to evince a moneyed aristocracy.  The question may thus be raised: Is there a sufficient check against the rich in the national legislature?

Governeur Morris claimed in convention that the U.S. President “should be the guardian of the people, even of the lower classes” on account of the wealth-interest in the U.S. Senate. (Madison, p. 322). However, if the wealth interest has gained a foothold in the U.S. House and even in the presidency itself, that check may well be insufficient and nugatory. A return of domestic functions of government to those of the respective States could perhaps evince a greater weight for what Morris calls “the Mass of the people.” (Madison, p. 323)  At the very least, the lower houses of the State governments are not dominated by the rich. This was precisely what the delegates of the convention wanted to check, and the creation of a general government was their solution. It is no wonder that it has become top-heavy both at the expense of federalism and the poor.

Source: James Madison, Notes in the Federal Convention of 1787. New York: Norton, 1987

For general information on the U.S. Constitutional Convention, see: http://en.wikipedia.org/wiki/Constitutional_Convention_(United_States)

In the constitutional convention of the United States in 1787, the property-interests were well-represented. Even so, a fear of a plutocracy was voiced by those property-protectors as well. While one might conclude at first glance that the wealthy delegates were duplicitous, their position is not self-contradictory, even if the bias toward wealth is discomforting for those of us who value representative democracy.

Governeur Morris, on July 5, asserted that property is “the main object of Society.” (1) Rutlidge, on July 5, concurred, maintaining, “Property was certainly the principal object of Society.” (2) Hamilton, on June 26, argued that the “inequality of property constituted the great & fundamental distinction in Society.” (3) King, on July 6 averred that “property was the primary object of Society.” (4) In Morris’ view, property is thus “the main object of [Government].” (5) Hamilton articulated this view in the Federalist by writing that the adoption of the Constitution will afford additional security “to the preservation of [republican] government, to liberty and to property.” (6) “I am convinced,” he writes, “that this is the safest course for your liberty, your dignity and your happiness.” (7) So his statement that “the vigour of government is essential to the security of liberty” can be read as a plea for a General Government primarily to protect property interests. (8) Butler, on July 11, claimed likewise that government is “instituted principally for the protection of property.” (9) At the very least, these remarks evince a reductionism wherein society and government were viewed in terms of wealth. Shouldering a minority view on this point, Wilson, on July 13 in the convention, “could not agree that property was the sole or the primary object of [Government] & society. The cultivation & improvement of the human mind was the most noble object.” (10) This object, he suggested, is a personal right. (11) As much as this object is laudatory, it is not the object of government, which I contend is to provide and ensure order, which goes beyond the protection of property. If there is a higher purpose, government can express and operationalize societal ideals, which can thus orient whatever order government provides.

The primary result of the delegates’ property-centric view was the formation of a General Government of the U. States to counter the risk that State legislatures would act democractically at odds with the interests of the wealthy. Just a year before the convention, the Massachusetts legislature had attempted to act in the interest of debtors (i.e., unpaid soldiers who were still expected to pay on their farm debts; the representatives sought to stop this injustice at the expense of the creditors). Shays’ Rebellion was the unhappy result. Govereur Morris, on July 2, alluded to this affront on property interests in stating, “Every man of observation had seen in the democratic branches of the State Legislatures, precipitation—in Congress changeableness, in every department excesses [against] personal liberty [,] private property & personal safety.” (12) However, what if private property is acquired unjustly at the expense of another’s liberty? In other words, liberty may run counter to the interests of the rich.

Madison, on June 26 in the convention, remarked that “we had not among us those hereditary distinctions, … nor those extremes of wealth or poverty which characterize [the modern States in Europe]… . An increase of population will of necessity increase the proportion of those who will labour under all the hardships of life, & secretly sigh for a more equal distribution of its blessings… . a leveling spirit… the future danger.” (13) Leveling would actually be in line with liberty if wealth has been acquired unjustly, as for example, under duress. Moreover, too great an inequality of wealth can threaten the viability of a republic. For example, in 1985, the top five percent in the U.S. held $8 trillion in wealth. By 2007, they had $40 trillion. Besides being in part from the dot.com and housing bubbles wherein asset values were overvalued, the concentration of wealth cannot but undermine representative democracy wherein each person has one vote. Interestingly, even as they sought to protect their wealth from being leveled via representative democracy, the delegates also feared that the U. States would end up as a plutocracy (i.e., ruled by the wealthy who would be our aristocracy). Governeur Morris, on July 2, expressed the following. “Let the rich mix with the poor and in a Commercial Country, they will establish an oligarchy. Take away commerce, and the democracy will triumph. Thus it has been all the world over. So it will be among us.” (14) Madison reports that Morris feared “the influence of the rich.” (15) That the U.S. was even then an extended republic on the scale of an empire was thought, at least by Morris, to strength the ability of the rich to rule.  “The schemes of the Rich,” he maintained, “will be favored by the extent of the Country. The people in such distant parts can not communicate & act in concert. They will be the dupes of those who have more knowledge & intercourse.” (16) Govereur Morris, on July 2, maintained that “The Rich will take advantage of their passions & make these the instruments for oppressing them. The Result of the Contest will be a violent aristocracy, or a more violent despotism.” (17)

Madison reports that Morris’ “creed was that there never was, nor ever will be a civilized Society without an aristocracy. His endeavor was to keep it as much as possible from doing mischief.” (18) To contain such mischief (and to protect property-rights), the delegates wanted the proposed U.S. Senate to represent the interests of the wealthy (as well as wisdom and the state governments—a combination they problematically assumed would play well together in the Senate). Govereur Morris, on July 2, claimed that “The Rich will strive to establish their dominion & enslave the rest. They always did. They always will. The proper security [against] them is to form them into a separate interest.” (19) Accordingly, Davy, on July 6, urged that “wealth or property ought to be represented in the [second] branch.” (20)

The Senate was to be a conservative institution, wherein the vested property interests must sign off on any reform.  This could partially explain why passing health-insurance reform in 2010 was so arduous (and why extant health-insurance companies were able to kill off a competing public option). It could also explain why the wealthy could insist that their tax cuts be extended even as the U.S. Government was facing another deficit over $1 trillion also in 2010.

In short, the delegates to the constitutional convention were concerned that a “leveling danger” not be allowed to redistribute wealth even as they feared the advent of a plutocracy as essentially aristocratic governance. Government should protect wealth but not be run by it. In modern terms, this position might seem familiar as: CEO’s like Lloyd Blankfein of Goldman Sachs should not run the government, but the latter should not be used by those without to take from the wealthy. Yet as the CEOs’ agents in government essentially operate in the interest of the corporations and the wealthy, does not the government’s orientation to property already evince a plutocracy by a moneyed aristocracy? If so, Jefferson and Adams, who were for a natural aristocracy of talent and virtue rather than money (the latter being an “artificial aristocracy,” which the two founders believed was taking hold in the U. States even in the early 1800s), would doubtless demur. It is telling for us that government protecting wealth is virtually taken for granted among the American people even as the fear of an impending plutocracy and moneyed aristocracy is nearly absent. Any balance from the delegates’ two fears has dissolved in favor of property. The bias is so engrained in American society and government that it has become invisible.

1. James Madison, Notes in the Federal Convention of 1787. New York: Norton, 1987, p. 244
2. James Madison, Notes in the Federal Convention of 1787. New York: Norton, 1987, pp. 245
3. James Madison, Notes in the Federal Convention of 1787. New York: Norton, 1987, p. 196
4. James Madison, Notes in the Federal Convention of 1787. New York: Norton, 1987, pp. 247
5. James Madison, Notes in the Federal Convention of 1787. New York: Norton, 1987, p. 244
6. Alexander Hamilton, Federalist #1, in Jacob E. Cooke, The Federalist, Hanover, N.H.: Wesleyan University Press, 1961, p. 7
7. Alexander Hamilton, Federalist #1, in Jacob E. Cooke, The Federalist, Hanover, N.H.: Wesleyan University Press, 1961, p. 6
8. Alexander Hamilton, Federalist #1, in Jacob E. Cooke, The Federalist, Hanover, N.H.: Wesleyan University Press, 1961, p. 5
9. James Madison, Notes in the Federal Convention of 1787. New York: Norton, 1987, p. 268
10. James Madison, Notes in the Federal Convention of 1787. New York: Norton, 1987, p. 287
11. James Madison, Notes in the Federal Convention of 1787. New York: Norton, 1987, p. 287
12. James Madison, Notes in the Federal Convention of 1787. New York: Norton, 1987, pp. 233
13. James Madison, Notes in the Federal Convention of 1787. New York: Norton, 1987, p. 194
14. James Madison, Notes in the Federal Convention of 1787. New York: Norton, 1987, pp. 233-34
15. James Madison, Notes in the Federal Convention of 1787. New York: Norton, 1987, pp. 235
16. James Madison, Notes in the Federal Convention of 1787. New York: Norton, 1987, pp. 235
17. James Madison, Notes in the Federal Convention of 1787. New York: Norton, 1987, p. 235
18. James Madison, Notes in the Federal Convention of 1787. New York: Norton, 1987, p. 251
19. James Madison, Notes in the Federal Convention of 1787. New York: Norton, 1987, p. 233
20. James Madison, Notes in the Federal Convention of 1787. New York: Norton, 1987, pp. 248

I've been following politics less now that Obama has caved on his campaign pledge (or promise) not to extend the bush tax cuts for the rich.  The added growth expected in 2011 from ALL of the cuts is just a half of a percent of GNP growth.  I have read that the rich save their tax cuts rather than use them in ways that stimuate the economy.  As for savings, banks have enough capital to lend (this isn't why they are still skittish in 2010).  That the vacuous argument that tax cuts for the rich will somehow create lots of jobs and save the economy from another recession has had <em>any</em> weight or credance really discourages me about American political discourse.  That Obama didn't "just say no" is also discouraging. On December 14, 2010, Pat O'Reilly said on his Foxs News show that the "far left" is in retreat because Ameriicans have rejected it.  He said even Obama has rejected the left. I think the left has vanquished itself.  Perhaps it could be said that the left is willingly impotent. Where is Al Gore?  Ralph Nadar?  Micheal Moore?  silence.  Only the sound of Obama caving. He should have refused to sign a tax cut continuation for the rich and said the Repubs could refuse to extend the cut for lower and middle income people--it would be the Repubs provoking the resumption of higher taxes for everyone rather than just on those who can afford them.  We need a Teddy Roosevelt or an Andrew Jackson. Teddy stood up to Standard Oil, and Jackson stood up to the Second Bank of the United States. By contrast, Obama has operated largely in line with Wall Street (e.g., the bailout for the banks rather than foreclosed homeowners) and the health insurance industry (e.g. not even a public option, which was odious to the industry).  Barak Obama does not want to displease the powers that be; I suspect reelection has a lot to do with this state of affairs.  This raises the question: is there a counter in American politics to the selfishness of property?

The "ardent glow of freedom gradually evaperates;--the charms of popular equality . . . insensibly decline;--the pleasures, the advantages derived from the new kind of government grow stale through use. Such declension in all these vigorous springs of actions necessarily produces a supineness. The altar of liberty is no longer watched with such attentive assiduity;--a new train of passions succeeds to the empire of the mind;--different objects of desire take place:--and, if the nation happens to enjoy a series of prosperity, volumptuousness, excessive fondness for riches, and luxury gain admission and establish themselves--these produce venality and corruption of every kind, which open a fatal avenue to bribery. Hence it follows, that in the midst of this general contageon a few men--or one--more powerful than all others, industriously endeavor to obtain all authority; and by means of great wealth--or embezzling the public money,--perhaps totally subvert the government, and erect a system of aristocratical or monarchic tyranny in its room. What ready means for this work of evil are numerous standing armies, and the disposition of the great revenue of the United States! . . . All nations pass this parokism of vice at some period or other;--and if at that dangerous juncture your government is not secure upon a solid foundation, and well guarded against the machinations of evil men, the liberties of this country will be lost--perhaps forever!"

Source: The Impartial Examiner, Essay (March 5, 1788), 5.14.15, in Herbert J. Storing, ed., The Anti-Federalist, Chicago: University of Chicago Press, 1985, p. 290-91.

In the wake of the financial crisis that came to a head in September of 2008, people might have been wondering if sufficient normative constraints on Wall Street greed are available, even possible. The ability of traders to create complex derivative securities that are difficult for regulators to regulate, much less understand, may have people looking for ethical or even religious constraints. It would be only natural to ask if such “soft” restraint mechanisms really do have the puissance to do the trick. Here’s the rub: the tricksters are typically the last to avail themselves of ethical or religious systems, and they the wrongdoers are the ones in need of the restraint. Blankfein said of his bank, Goldman Sachs, that it had been doing God’s work. About a week after saying that, he had to walk his statement back and admit that the bankers had does some things that were morally wrong. Although divine omnipotence is by definition not limited by human ethical systems, it is hard to imagine a divine decree telling bankers to tell their clients one thing (buy subprime mortgage derivatives) while taking the opposite position on the bank’s proprietary position (shorting the derivatives, beyond being a counterparty to clients). Divine duplicity seems to represent an oxymoron on a megascale rather than a justification for greed.

As the crisis erupted and was subsequently managed by public offiicals in government and new managers brought in to salvage AIG, I was researching the history of Christian thought on profit-seeking and wealth. I had found evidence of a gradual shift in the thought between Aquinas and the fifteenth-century Christian Humanists (mainly in what is now Italy). Whereas early Christian thought had tended to stress the negative attitude toward riches—the camel being in extreme pain in getting through the eye of the needle—in the Renaissance Christian theologians tended to argue that being wealth is necessary for a Christian to exercise the godly practical virtues of liberality and magnificance (particularly the latter, which alone permits gifts reflective of God’s majesty). Something had happened in the dominant Christian attitude on wealth that made the religion less of a buttress against greed because it had become possible for a Christian to be both rich and to go to heaven. Cosimo de Medici is a perfect example of a banker who was assured by the pope that a career based on urury would not necessarily bar a banker from entering heaven (assuming he gave financially to the Church). The various Reformers can be read as efforts to pull Christianity back from being so close to incorporating love of gain, or greed. I looked at the (Standard Oil) monopolist and devout Baptist, John D. Rockefeller, to get a sense of how efficacious the Reformation was in attempting to arrest and reverse the momentum of the pro-wealth Christian paradigm.

Having sketched the shift and subsequent reactions of the Reformers, I turned my attention to trying to explain both the shift itself and the efficacy of the Reformation. I believe the increasingly commercialized environment since the Commercial Revolution does not provide enough of an explanation; I contend that one must look at the religion itself to find the roots of the shift and the results of the Reformation as concerns the religion's theological attitudes toward wealth. In other words, Christianity itself must be examined. As you read through the book, you could do worse than ask yourself: is there something deeper in Christianity at work in the historical shift in thought on wealth and profit-seeking?  You will find my theory in the conclusion. Undoubtedly, you will develop your own as you reflect as you read.

The main question I want to pose through the treatise is whether religion itself, as a phenomenon touching the human domain of existence, can hold us back from ourselves even when we least want it to do so. If so, then a religion operating in the human domain can operate as a wholly-other mechanism by which sins such as greed can be reduced in force or perhaps even finally exterpated. To expunge the sordid stuff from our banks and corporations, human nature itself would have to be radically changed. Perhaps the question is whether it is possible even if not probable for religion operating through human beings to accomplish this task, given that religion cannot but interact with the world.

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Source: http://www.amazon.com/Godliness-Greed-Shifting-Christian-Thought/dp/0739139835/ref=sr_1_1?ie=UTF8&s=books&qid=1294957599&sr=8-1