The Voice of Right and Wrong

Whatever the source of moral knowledge might be—divine commandments or moral reason—every sane man, it was assumed, carried within himself a voice that tells him what is right and what is wrong, and this regardless of the law of the land and regardless of the voices of his fellowmen.

-Hannah Arendt, Some Questions of Moral Philosophy, in Responsibility and Judgment, p. 61.

In a series of lectures she wrote for two courses she taught, one in 1965 at the New School and the second in 1966 at the University of Chicago, Arendt mapped out some of her complicated thinking about moral philosophy and the “perplexities inherent in the human faculty of willing.” In these lectures, she drew heavily on Kant and Nietzsche, but began her reflections by calling attention to the historical motivation for her concerns: “We—at least the older ones among us—have witnessed the total collapse of all established moral standards in public and private life during the nineteen-thirties and –forties, not only…in Hitler’s Germany but also in Stalin’s Russia.” (54). The distinction between right and wrong that it was assumed “every sane man” heard like a voice within him had not stood the test of time.

How easily, Arendt observed, ordinary people had changed their habits of mind, exchanging one set of values for another “with hardly more trouble than it [took] to change the table manners of an individual or a people.” (50). How had this happened? If acting morally, and not just legally, depended on the “thinking” conversation one had with oneself about what one should or shouldn’t do, then it was as if large sections of the population in every strata had simply stopped thinking, did what they were told to do, and then proceeded to forget.

Two weeks ago today, Anders Behring Breivik, the 33-year-old Norwegian man who admitted to killing 77 people last July in two separate attacks, entered a specially outfitted courtroom in Oslo to stand trial for criminal acts of terrorism and mass murder. After the charges against him were read, Mr. Breivik pleaded not guilty. “I acknowledge the acts, but not criminal guilt – I claim I was doing it in self-defense.” He would have preferred, he added, to appear before a military tribunal; he was, he contended, a political activist involved in a war in Europe.

Since he admitted his acts, the trial now turns on the question of Breivik’s sanity.  Two psychiatric reports have produced contradictory conclusions; the first found him insane at the time of the killings, suffering from paranoid schizophrenic delusions, while the second declared him sane. “[E]very sane man, it was assumed, carried within himself a voice that tells him what is right and what is wrong.” In his own words, Breivik was no exception. Before he started shooting, Breivik explained at his trial last week, he heard “ ‘100 voices’ in his head telling him not to do it.” ( But that moment of hesitation passed; he had prepared himself for years through a process he described as a deliberate program of dehumanization. Steeling himself against the comprehension of what he had done was important, he added, because “he would break down mentally” if he allowed himself to empathize with his victims.

“The criterion of right and wrong, the answer to the question, what ought I to do? depends in the last analysis neither on habits and customs, which I share with those around me, nor on a command of either divine or human origin, but what I decide with regard to myself,” Arendt observed in the same essay on moral philosophy. (97) What keeps a person from committing atrocities, or “evil” acts, is, for Arendt, the capacity to be a “thinking being, rooted in his thoughts and remembrances, and hence knowing that he has to live with himself.” This same capacity produce “limits to what he can permit himself to do, and these limits will not be imposed on him from the outside, but will be self-set.” These same limits, she continued, “are absent when men skid only over the surface of events, where they permit themselves to be carried away without ever penetrating into whatever depth they may be capable of.”

Breivik’s description of his yearlong “sabbatical” playing a video game, World of Warcraft, for up to 16 hours per day serves as an indication of the program of dehumanization to which he subjected himself. And his years’ long immersion in the ideology and methods of radical terrorism, with, ironically, his endorsement of Al Qaeda as “the most successful revolutionary movement in the world” serves as an example of the kinds of “thoughtlessness” that can become a willed experience, in individuals and in groups, and is a necessary prelude to despicable acts. But then, Breivik never imagined he would survive July 22; he envisioned his action as a suicide mission, perhaps the ultimate act of forgetfulness, the annihilation of the possibility of thought and judgment themselves.

-Kathleen B. Jones


Should We Justify War?

This was a busy week at Bard and the Hannah Arendt Center. In addition to two wonderful talks by Thomas Meyer on Leo Strauss and Hannah Arendt, we co-sponsored a great speech by Peter Beinart on his new book The Crisis of Zionism. In addition, Bard played host to a joint Bard-West Point conference on Just War. I was honored to give the keynote address at the Just War conference on Tuesday.

My argument is quite simple: we should continue to talk about the morality of war and the justice of war, but we should cease our efforts to come up and implement standards for the justification of war.  Arendt is often overlooked in discussions of just war theory, and yet this is a mistake. She wrote quite a bit about war and the laws of war in books ranging from The Origins of Totalitarianism, On Revolution, and Eichmann in Jerusalem. For example, Arendt attacks one pillar of just war thinking, namely that wars today can still be useful:

For Hannah Arendt, the modern just-war theorizing that we encounter today is a response to the radical innovation in the violence of war witnessed in World War I. “The notion that aggression is a crime and that wars can be justified only if they ward off aggression or prevent it acquired its practical and even theoretical significance,” she writes, “only after the First World War had demonstrated the horribly destructive potential of warfare under conditions of modern technology.” At a time when war threatens Armageddon, the justification for war cannot proceed on utilitarian and rational grounds—the very idea of a useful war loses its purchase when the consequences of victory as much as defeat might mean annihilation.

The only justification left for war in the modern era is the absolute justification: we fight for freedom and for existence itself. “In other words,” Arendt writes, “freedom has appeared in this debate [over the justification of war] like a deus ex machina to justify what on rational grounds has become unjustifiable.”  Just war theory emerges as a theory, in other words, precisely when rationality and utility cease to function as meaningful justifications for war.

Discussion of justified warfare rarely concedes that war today is unjustifiable. While war is thought to be hell, the effort is to articulate norms, conventions, and laws that allow us to say when war is and is not justified. Above all, we seek to justify war, to tame it, and make it more humane.

What is often overlooked in the rush to justify war is the nagging and unpredictable question of what the impact of justifying war might be. “Wedding war to justice” may well usher in an era of humanitarian warfare; the effort to make war more humane might, however, inaugurate an unprecedented era of legalized, bureaucratized, and justified violence. Just war theory works to justify war, something made ever more possible when there is almost nothing that cannot be justified in the name of freedom, especially when it is legitimated by its attention to legal rules.

The full essay won’t be published for a bit, but you can read it here as your weekend read. And, as always, comments are welcome.



Childism, Chapter 3 – Elisabeth Young-Bruehl

Elisabeth Young-Bruehl’s final work, Childism, was published soon after her untimely passing in December of 2011. In the book, Young-Bruehl, a long time psychoanalyst and child advocate, focuses on the pervasive prejudice she feels overshadows many children in our society. Be it abuse, or the modern day phenomenon of helicopter-parenting, she felt these injustices served to demarcate children, marking them as less worthy than adults. The resulting consequences result in unhealthy and damaging parent-children relationships.

Arendt Center internAnastasia Blank, is reading Childism and providing us with a chapter by chapter review, highlighting some of the most interesting and compelling insights and arguments. Her previous posts about the book can be read here. Today, she shares her thoughts and impressions of Chapter 3. We hope you are inspired to read along. You can purchase the book here. 

Chapter 3 of Elizabeth Young-Bruehl’s Childism argues that something went terribly wrong in the early 1960’s, the initial period when forms of child abuse and neglect were being identified. Young-Bruehl explains that the emergent field of Child Abuse and Neglect [CAN] “did not understand adult motivation and childism, [so that] childism was built into the field and its legal policy and advocacy.”

So why does Young-Bruehl take issue with the advocates and academics hoping to protect children? She explains that one of the pioneers of the field, Dr Henry C. Kempe, “Construed the children’s injuries… as a disease of the child. Not a disease of the abuser that is manifested on the child.” This turns the issue of abuse into something that can be solved by removing the child from the harmful environment, implying that there is a single cure for the child’s problem.

What Young-Bruehl wants us to see is that abuse and neglect are not issues with children, they are problems that stem from the abuser.

So how could a person, a family, a government, go about dealing with this problem?  Young-Bruehl describes a mother who had four children, but beat only one. Through therapy the mother determined that she identified her son with her own brother. Her brother had been favored by their parents, while they had neglected her throughout her childhood. Her relationship with this specific son was directly affected by the resentment she harbored from her own childhood. In a way she was afraid of her son, because  she associated him with negative experiences of her youth. This in turn caused her to use abuse as a means to keep him down and demonstrate her power and importance. Here we can see how abuse manifests itself explicitly within a relationship between child and parent. There is no single cure for abuse, because each case is different. What should be clear is that the solution lies in a multi-faceted approach. Human relationships are notoriously complicated, and one so vital as that between a child and their parent need not be doomed just because there is a problem (albeit it a very grave one).

What happened in the field of child abuse and neglect was that a problem was identified without ever being fully understood. Young-Bruehl traces years of legislation beginning in the early 1960’s to show that abuse is not the only concern we need to be addressing, but also how we as a country have responded to instances of abuse. In her discussion of the 1974 Child Abuse Prevention and Treatment Act she notes that it implied that,

All physically abusing parents are impulsive, hysterical, aggressive, and untreatable, so that removing children from their homes into foster homes is necessary. In effect, it looked like an argument for increasing reliance on foster care, not for establishing treatment programs for children or parents.

Research on reported instances of child abuse has shown that only about ten percent of abusers are psychotic and untreatable. So why should the other ninety percent be marginalized as being doomed to failed parenthood? Young-Bruehl wants us to look beyond the instances of abuse and to try to recognize the underlying motivations. Once abuse is reported, the next step is to ask why it happened? And then how can it be prevented? When we fail to ask why, we fail to give families a chance. She believes that solutions can be found to help the abusers, and subsequently help the abused. While protective service agencies remove children from harm, this process is a scary and disruptive event that leaves children without their parents. If we can identify resolutions that treat the issues apparent in the abusers we may be able to leave the family intact.

-Anastasia Blank

Peter Beinart on Zionism

In 2010, Peter Beinart made waves with an essay in The New York Review of Books that laid bare the conflict between the Zionism of the American Jewish establishment and the liberalism of many young American Jews. The key faultline of his essay is this:

Among American Jews today, there are a great many Zionists, especially in the Orthodox world, people deeply devoted to the State of Israel. And there are a great many liberals, especially in the secular Jewish world, people deeply devoted to human rights for all people, Palestinians included. But the two groups are increasingly distinct. Particularly in the younger generations, fewer and fewer American Jewish liberals are Zionists; fewer and fewer American Jewish Zionists are liberal. One reason is that the leading institutions of American Jewry have refused to foster—indeed, have actively opposed—a Zionism that challenges Israel’s behavior in the West Bank and Gaza Strip and toward its own Arab citizens. For several decades, the Jewish establishment has asked American Jews to check their liberalism at Zionism’s door, and now, to their horror, they are finding that many young Jews have checked their Zionism instead.

On Thursday, April 26th, The Arendt Center, along with JStreet U at Bard, is co-sponsoring a lecture by Peter Beinart on his recently published book, The Crisis of Zionism. The lecture will be held at Bard in Olin 102 at 6:30 PM.


Pension Crisis Primer

I have been trying to understand our pension mess for years now, and I will tell you that the numbers and acronyms are at times baffling. But help is here.

Two of the nation’s Federal Reserve Banks (the Cleveland and the Atlanta Federal Reserve Banks) have joined together to form a “Financial Monitoring Team to study pension funds and municipal finance with an eye toward implications for the wider economy and financial system.” In other words, these two banks are seeking to shine a light on the dark and difficult to understand corners of municipal finance. Chiefly, the banks are interested in learning about Municipal Pensions.

The Cleveland Fed publishes a newsletter, “Forefront”, and the latest issue contains a number of incredibly helpful articles about the state of municipal pensions.  The main article is: Public Finances: Shining Light on a Dark Corner. This is a clear and helpful article, with a glossary and helpful sidebars. It also comes with a video primer on the pension crisis that is sober, clear, and helpful.

One question the article addresses is just how big the pension shortfall actually is. According to government numbers, the shortfall is $800 billion. The government estimates are based on assumptions of an 8% rate of return, which inflates the assumptions about the present value of pensions. In all likelihood, the return will be somewhere between the 8% historic average and the painfully low return offered by persistently low interest rates.  Thus, many private economists estimate the shortfall at around $4 Trillion. Here is what the Cleveland and Atlanta Feds say:

Some economists, however, have come up with a $4 trillion shortfall. They have pointed out that for most state and local plans, promised pension benefits are protected by constitutional, statutory, or common law guarantees. (See related article, “Navigating the Legal Landscape for Public Pension Reform.”) By definition, this ought to make them riskless obligations to the pensioners. Thus, the appropriate valuation methodology should discount promised benefits using the risk-free interest rate, usually calculated as the yield on long-term U.S. Treasuries. This method, argued cogently by Jeffrey Brown and David Wilcox in “Discounting State and Local Pension Liabilities” (2009), has the virtue of being supported by both economic and legal principles. It also produces substantially higher estimates of the present value of pension liabilities. Given the currently low yields on Treasury bonds, this approach implies a present value of accrued obligations as high as $6.7 trillion, leaving an unfunded liability of $4 trillion.

In other words, the actual size of the pension shortfall is probably somewhere between $800 Billion (the size of the 2009 stimulus package) and $4 Trillion. The likely shortfall, as the Fed says in its video on the site, is in the $3-$4 Trillion range.

So what does this mean? The Cleveland and Atlanta Feds offer a few conclusions:

1. At this point, it seems unlikely that any major pension fund will run out of cash in the next few years, barring a general worsening of economic and financial condition.

2. But we are not out of the woods yet. Many funds will require significant reforms to reduce underfunding levels, with painful new contributions from employers and employees.

3. Another concern is that some states’ legal protections may be too strong to give reforms enough time and flexibility to put plans on sustainable paths. In that case, states would ultimately be on the hook for covering pension benefits out of general revenues. This scenario, by creating crisis conditions in those states, could stress economic conditions more generally.

The real problem is the combination of #2 and #3. For if state laws make it too difficult to cut or reduce pensions, the only option is “painful new contributions from employers or employees.” It may be that we cut the guaranteed pensions of pensioners, making them less well off in retirement. That would hurt the workers. Or, if legal protections prevent that option, we the taxpayers will have to dig deep to pay their pensions, probably as we at the same time cut other essential services. And that will not be pretty. Either way, the state and local government crisis is shaping up to be one of the most important challenges of our generation.

For more on the pension crisis, you can revisit our other posts on the subject here.


New York Times Pension Crisis

My colleague Walter Russell Mead has also been covering the entitlements problem that pensions pose.  He has an excellent post on the current dispute over pensions at the NY Times. The Times staff is considering a strike to defend its defined benefit contribution plan—a plan that guarantees a certain yearly payment until death. These pension plans are the best of the best for workers, but as workers still retire at 65 and live longer, they are bankrupting the companies that offer them.

Thus, the Times, like many other companies, is seeking to switch over to a defined contribution plan, one that pays out a pension that is somehow related to what one actually puts into it. These plans risk reducing a worker’s standard of living in retirement, as do 401k’s. Mead’s essay is clear in addressing the entitlement of the Times’ staff, which insists on protecting its benefits even if it destroys the paper for which they work. You can read Mead’s post here.

You can also read additional posts about the pension crisis here, here, here, and here.


The Truth About Politics

“Factual truth is always related to other people […]. It is political by nature.”

-Hannah Arendt, Truth and Politics 

“Our inheritance was left to us by no testament”

-Hannah Arendt, quoting René Char, Between Past and Future

In his acceptance speech, the recipient of the 1997 Hannah Arendt Prize for Political Thought wondered why he of all people had been chosen for it.  He was, he said, a pragmatist, a practitioner of politics, not a political thinker.  At the time he was already a prominent figure in contemporary politics: as a courageous pastor in the GDR who did not shy away from conflict with the regime, as a participant in the freedom movement of 1989 which led to the fall of the Berlin Wall, and, since 1990, as the Federal Commissioner for the newly created Stasi Archives, which was tasked with processing the history and crimes of the socialist dictatorship.  This man, the winner of the 1997 Arendt prize, is the recently elected German Bundespräsident, Joachim Gauck . [Under the German constitution, the President is the country’s highest representative, while the Chancellor is the head of government and most influential political figure in the German parliamentary democracy (Angela Merkel currently holds the latter position).]

The connection between Arendt and the highest office of the German government makes sense only in light of its oddity and of the unorthodox character of Joachim Gauck.  His comment in the acceptance speech that he is a political practitioner rather than a political thinker marks a striking difference between himself and Arendt.  One could say, however, that Gauck’s political actions largely constitute the realization of a political understanding that Arendt herself theoretically and conceptually developed.  Their shared center of gravity can be formulated in a sentence from Arendt’s “Introduction into Politics”: “The meaning of politics is freedom.”

It is fitting, in a certain way, that the intellectual correspondence between Arendt and Gauck is least to be found in his text Plea for Freedom. This small book, published shortly before his election, can be read as the manifesto of his presidency.  The book, divided into the three chapters “Freedom,” “Responsibility,” and “Tolerance” preaches more than it reflects.  Generalized talk of “the soul,” and of supposed anthropological constants such as “the human psyche,” or the universal desire for happiness and healing overshadows the knowledge upon which the book is based: that politics comes out of plurality and exists in the living modes of “relatedness.”

When writing serves to express a political program, it becomes a part of the process of political action.  Action and thought cannot occur simultaneously, Arendt notes.  Thought and consideration become possible only when action has become history– that is, when it has been completed and can be retold as a story and reflected upon.

Joachim Gauck’s best texts are distinguished by the fact that they are written out of personal experience.  They speak from the perspective of an “I” that knows that political speech must be concrete and therefore limited.  The more I generalize, the farther I distance myself from the solid ground of the facts.  For a theologian, this may not be self-evident.  In his acceptance speech for the Arendt prize, Gauck does not pay lip service to the prize’s eponym– as did so many of those to whom Arendt became “hip” after 1989– by claiming her as the inspiration for his political actions during the dictatorship.  Rather, he recognizes his own lapse in not studying Arendt’s texts at the right time.  He sees it as a failure to confront the intuitive striving and fighting for freedom with “conceptual clarity and precision,” quoting Arendt’s On Revolution.

Does this lack of conceptual clarity point to a romanticization which placed (the self-perceptions of) personal actions in the world of wishful thinking instead of in the world of facts, Gauck asked? The question is directed at himself and his contemporaries.  “Did it suffice to have an opinion about reality, whose facts I hadn’t thoroughly developed?” he reflects with reference to Arendt in his afterword to the Blackbook of Communism (1998).  I individually can hold an opinion, almost like philosophically wise thoughts or words; facts, on the other hand, are political, since I always share them with others.  Arendt formulated it thus in Truth and Politics: “Factual truth is always related to other people […]. It is political by nature.”

This understanding of the eminently political quality of facts shaped Joachim Gauck’s work as the Federal Commissioner for the Stasi-Archives.  Perhaps this constitutes the greatest accomplishment of his life: Gauck’s work secured the documents and archived materials without which the history of the SED-dictatorship and its repressive apparatuses could not have been written.

In the months after the fall of the Berlin Wall, hundreds of citizens and members of opposition groups occupied the headquarters of the state secret police in East Berlin and other cities of the GDR.  The Stasi had already begun to destroy documents on a large scale.  Approximately 130 miles of files were saved, where 3 feet of files could contain up to 10,000 pages.  The Stasi had collected approximately 6 million personal files– 4 million on citizens of the GDR, 2 million on citizens of the old Bundesrepublik.  What was to be done with such a legacy?

Many demanded that the files be closed or even destroyed in the interest of “national peace.”  One could expect such a vote from former GDR elites, who could be prosecuted or face moral discredit if the files were made public.  But even reputable social-democratic politicians like Egon Bahr and, out of quite different motives, the West German secret service, wanted to prevent the Stasi files from becoming publicly accessible.

The “inherited burden of dictatorship,” Gauck called this legacy in his Memoirs (2009).  It is an inheritance left with no testament, one could say with Arendt and René Char.  It is an inheritance without precedent, for which a legal, political, moral, and historiographic procedure had to be found before any work could begin.  Joachim Gauck, along with more than 3000 staff members, created the blueprints for dealing with the material.  Since 1990, victims of Stasi persecution, as well as the media and researchers, are able to read and study the files of the state surveillance apparatus.

The fact that this is now possible cannot be taken for granted.  Since the transition to democracy, other countries such as Poland, Hungary, and Romania have decided against opening their archives.  In Germany, it’s one of Gauck’s major accomplishments to have successfully carried out the demand of the East Germany democracy movement to make the Stasi files publicly accessible.

The Federal Commission for the Stasi-Archives is now a permanent institution in Germany.  The commission is internationally respected, and stands as a symbol for Germany’s way of dealing and coming to terms with dictatorship after 1989.  The legal and administrative character of the commission, and the basis of its success, is largely thanks to Joachim Gauck’s capacity for political judgment, as he was the first director of the Commission from 1990 to 2000.  Gauck, the unconventional political activist from the Baltic, recruited a legal and data protection expert from Bavaria as an administrator, to help carry out the revolutionary civil movement’s lofty goal of universal access to the records.  The two persistently maintained this political demand in the face of the reservations and greediness of West German administration and political parties.  Gauck recognized that the new Commission for the Stasi Archives would have to fit into the institutional structure of West Germany, and that this framework had to be confronted without naivete or arrogance.

During and since the first national elections in unified Germany in 1990, naivete and arrogance towards the power of established parties and institutions relegated almost all of the East German opposition groups to political meaninglessness.  The widespread feeling that the momentum of political freedom was too quickly muted by, and swallowed up into the institutional structure of West Germany burdens the unification process to this day.  The Federal Commission for the Stasi Archives is one of the few achievements in which something truly politically new came out of the momentum of freedom in 1989.

The election of Joachim Gauck connects the memory of this founding moment of political freedom with the highest office in Germany—which is delightful, but also feels incongruous.  It may also appear incongruous to many that Gauck is the first nominee in Germany’s post-war history who was not elected President directly from another high political office.  Since 2000, Gauck has worked for foundations, and as a free-lance writer and lecturer.  He is less a man of the political class than a political man. This symbolic fact is one that might have interested Hannah Arendt.

-Thomas Wild,

with Anne Posten

Thomas Wild will begin teaching at Bard in the fall and will join the Hannah Arendt Center as a Research Associate.


Who Killed the Middle Class?

John Cassidy over at the New Yorker has an excellent article that clarifies some of the basics about the debate over inequality. In Inequality 101, Cassidy reproduces a chart “Who Killed the Middle Class?” an article he published in 1995. The chart is fairly clear. It shows how from 1947-1973, the wealthy, the middle class, and the poor in the United States all saw their incomes rise at about the same levels. From 1973-1993, however, this equality disappeared. While the poor saw incomes decrease, and the middle-class stayed the same, the wealthy saw incomes rise, although not as much as earlier.

This chart is similar to the one I described in my Friday Post, The Way Forward.  As I wrote there:

We see that until 1982, the wages of workers and the income of non-wage earners (thus the higher-paid supervisory workers) was largely equal. Beginning in 1982, however, the earnings of non-wage earners began to rise significantly faster than the income of wage workers. This is at least one original source of the increasing inequality of the American populous and it is exacerbated by an increasingly less-progressive tax code and also by the increasingly profitability of capital investments in the global economy.

Since the 1990s, the rate of inequality in our society has skyrocketed, especially for the very highest earners in the 1% and even the .1%. Cassidy provides this chart as well to make this clear.

I will be speaking with John Cassidy on May 10 in New York City. The event is part of the Hannah Arendt Center NYC Lecture Series. You can learn more about the event and RSVP here, as seating is limited.


The Way Forward

It is a fallacy to think that political thinking can exist separately from economic thinking. Hannah Arendt, no economist, saw clearly that the origins of totalitarianism were, in large part, traceable to the importing of economic thinking (unlimited growth) into the political realm, where politics is concerned with geographical, social, and moral limits. The economic victory over politics at that time went under the name of imperialism. Today, under the rubric of globalization, economic thinking continues to subsume political thinking to economic calculations.

The economic crisis of the last four years has brought with it a particular challenge to politics. The crisis is so large and so devastating and it so completely threatens to undermine our ways of life that there is a feeling of political futility. What possibly can be done to address this crisis? From out of this futility arises a kind of head-in-the-sand approach that denies the crisis instead of addressing it. One end point of such an approach is the kind of technocratic governance by bureaucrats now holding sway in Greece and Italy, as well as in a selection of American cities and counties. If we are to avoid giving up our political self-determination and if we want to engage the crisis rather than submit to it, we must first understand it, something that few politicians have been willing to do.

To confront the depth of our ongoing crisis, it is helpful to look at a new report out from the New America Foundation, authored by Daniel Alpert, Robert Hockett, and Nouriel Roubini. This report was sent to me by a long-time supporter of the Arendt Center. It is well worth reading in full.  A few basic facts to set the stage:

•Four years into the Great Recession, more than 25 million working-age Americans remain unemployed or underemployed;

•The employment-to-population ratio lingers at a near-historic low of 58.3 percent;

•Consumption expenditure remains weighed down by massive private sector debt overhang left by the bursting of the housing and credit bubble a bit over three years ago (even if debt levels are coming down, as Floyd Norris argued today in the NY Times.)

The basic argument that Alpert, Hockett, and Roubini make is that economists and politicians have misunderstood the nature of the financial crisis. As a result, our responses have been ineffective. As they write: “The principal problem in the United States has not been government inaction. It has been inadequate action, proceeding on inadequate understanding of what ails us. ”

So what is really the problem? Alpert, Hockett, and Roubini argue that the crisis is a conjunction of an extreme a credit crisis along with two other long-term trends that exacerbate that crisis. While most commentary and political response has focused on the credit crisis, the importance and impact of the two long-term trends have been largely overlooked. The two trends are:

First, the steady entry into the world economy of successive waves of new export- oriented economies, beginning with Japan and the Asian tigers in the 1980s and peaking with China in the early 2000s, with more than two billion newly employable workers.

Second, the “long term development that renders the current debt-deflation, already worse than a mere cyclical downturn, worse even than other debt-deflations is this: The same integration of new rising economies with ever more competitive workforces into the world economy also further shifted the balance of power between labor and capital in the developed world. That has resulted not only in stagnant wages in the United States, but also in levels of income and wealth inequality not seen since the immediate pre-Great-Depression 1920s.”

The upshot of these two trends is that wage labor in developed countries is under continuing downward pressure. Whether the limpid economic recovery continues or not, the wage levels of the pre-crisis period will not return and those workers who earn wages for their performance will continue to experience lower real wages and thus a deteriorating standard of living.

What many still have not wanted to see is that the crisis itself was a response to these trends. For the last 20 years, the decreasing wages of workers in developed countries was hidden and compensated for by increasing debt, both private and public. As the report sees,

Easy access to consumer credit and credit-fueled rises in home values – themselves facilitated by recycled savings from emerging economies’ savings – worked to mask this widening inequality and support heightening personal consumption.

There is a chart in the report that itself shows the problem with crystal clarity. In Figure 2, we see that until 1982, the wages of workers and the income of non-wage earners (thus the higher-paid supervisory workers) was largely equal. Beginning in 1982, however, the earnings of non-wage earners began to rise significantly faster than the income of wage workers. This is at least one original source of the increasing inequality of the American populous and it is exacerbated by an increasingly less-progressive tax code and also by the increasingly profitability of capital investments in the global economy. As the report concludes,

Because many workers were no longer sharing the fruits of the economy’s impressive productivity gains, capital was able to claim a much larger share of the returns, further widening wealth and income inequality which by 2008 had reached levels not seen since the fateful year of 1928.

For anyone concerned with politics in the 21st century, understanding our current economic predicament is essential. That is why reading such a lucid report as this one from the New America Foundation is so important. It is, this weekend, your weekend read.

New America Foundation Article, The Way Forward


Edna Brocke, Hannah Arendt’s Niece, Visits the Center

Edna Brocke, Hannah Arendt’s niece and heir, visited the Arendt Center at Bard with her sister Hannah Pinto (named after Arendt) yesterday and delivered a talk that combined personal reflections of her time with Arendt, specifically during the Eichmann trial, with her professional assessment of the current debate over Eichmann in Jerusalem as the 50th anniversary of the book approaches.

Brocke, whose parents left Germany for Israel in 1934,  met Hannah Arendt for the first time in 1955 when she was 12 years old and quickly became her favorite among the children in the family. When Arendt returned to cover the Eichmann trial in 1961, she acquired a guest pass for her niece, who, then 17, accompanied her to many of the sessions.

In addition to fascinating reflections about the Eichmann Trial,  Brocke also devoted part of her talk to describing resistance to Arendt’s analysis of both Eichmann and of totalitarianism in contemporary Germany and to what she sees as its continuing political motivations.

Brocke also related the personal side of her relationship with her aunt, noting that she last saw Arendt in 1975, just months before her death. Arendt was on her way to the train station to visit Heidegger when Brocke, venturing into a subject of tense disagreement in their family, asked if she really had to go. Arendt replied by whispering in her ear: “There are things that are stronger than man.” (“Es gibt Dinge, die stärker sind, als der Mensch.”)

View the video footage of her illuminating visit here.