(Featured Image - The American Flag, Source: The Sleuth Journal)
Parts of this post have appeared before; it is rewritten and presented in preparation for this week’s Hannah Arendt Center Conference “The Unmaking of Americans: Are There Still American Ideals Worth Fighting For?”
On Thursday and Friday of this week, “The Unmaking of Americans: Are There Still American Ideals Worth Fighting For?” will gather leading public intellectuals, lawyers, students, professors, writers, politicians, business people, philosophers, and citizens to think together about what American ideas, if any, can inspire Americans to sacrifice and struggle for the common good.
It is hard to disagree with the claim that government is too big and too bureaucratic. Citizenship is in decline. The legitimacy of representative democratic government is experiencing a crisis around the world. These are common refrains, heard often on the left and the right. Both the Tea Party and Occupy Wall Street are evidence of the general dissatisfaction with big, unresponsive, administrative government. California is thinking of splitting itself into six states. Even the New York Times Magazine, in its cover story today, suggests that the time for the Libertarian movement may have finally arrived.
Thomas Meaney and Yascha Mounk argue in a long essay in The Nation that the democratic moment is passing if not yet already passed. The sweep of their essay is broad. Alexis de Tocqueville saw American democracy replacing the age of European aristocracy. He worried that democratic equality would be unable to preserve the freedoms associated with aristocratic individualism, but he knew that the move from aristocracy to democracy was unstoppable. So today, Meaney and Mounk write, we are witnessing the end of the age of democracy and equality. This is so, they suggest, even if we do not yet know what will replace it.
Meaney and Mounk build their argument on a simple critical insight, a kind of “unmasking” of what might be called the hypocrisy of modern democracy. Democracy is supposed to be the will of the people. It is a long time since the small group of Athenian citizens governed themselves. Modern democrats have defended representative democracy as a pragmatic alternative because gathering all the citizens of modern states together for democratic debate is simply impossible. But technology has changed that.
As long as direct democracy was impracticable within the confines of the modern territorial state, the claim that representative institutions constituted the truest form of self-government was just about plausible. But now, in the early twenty-first century, the claim about direct democracy being impossible at the national level and beyond is no longer credible. As the constraints of time and space have eroded, the ubiquitous assumption that we live in a democracy seems very far from reality. The American people may not all fit into Madison Square Garden, but they can assemble on virtual platforms and legislate remotely, if that is what they want. Yet almost no one desires to be that actively political, or to replace representation with more direct political responsibility. Asked to inform themselves about the important political issues of the day, most citizens politely decline. If forced to hold an informed opinion on every law and regulation, many would gladly mount the barricades to defend their right not to rule themselves in such a burdensome manner. The challenge posed by information technology lies not in the possibility that we might adopt more direct forms of democracy but in the disquieting recognition that we no longer dream of ruling ourselves.
In short, democracy understood as self-government is now once again possible in the technical age. Such techno-democratic possibility is not, however, leading to more democracy. Thus, Meaney and Mounk conclude, technology allows us to see through the illusions of democracy as hypocritical and hollow.
The very word “democracy” indicts the political reality of most modern states. It takes a considerable degree of delusion to believe that any modern government has been “by” the people in anything but the most incidental way. In the digital age, the claim that the political participation of the people in decision-making makes democracy a legitimate form of government is only that much hollower. Its sole lingering claim to legitimacy—that it allows the people the regular chance to remove leaders who displease them—is distinctly less inspiring. Democracy was once a comforting fiction. Has it become an uninhabitable one?
Such arguments by “unmasking” are attractive and popular today. They work, as Peter Baehr argued recently in a talk at the Arendt Center, through the logic of exposure, by accusing “a person, argument or way of life of being fundamentally defective.” It may be that there are populist democratic revolts happening in Turkey and Thailand, revolts that are unsettling to elites. Similarly, the democratic energies of the Tea Party and Occupy Wall Street are seen by many as evidence of the crisis of democracy. Democracy, it is said, is defective, based on a deception and buttressed by illusion. But it hardly does a service to truth to see democratic ferment as proof of the end of democracy.
Meaney and Mounck argue that there are three main reasons that have brought democracy to the brink of crisis. First, the interrelation of democracies within a global financial world means that democratic leaders are increasingly beholden to banks and financiers than to their citizens.
[W]ith world trade more pervasive, and with the domestic economies of even the most affluent nations deeply dependent on foreign investments, the ideological predilections of a few governments have become the preoccupation of all. There is a reason why all mainstream politicians now make decisions based on variables such as the risk of capital flight and the reactions of bond rating agencies, rather than on traditional calculations about the will of their electorates. As the German economist Wolfgang Streeck has argued, this shift in political calculus occurred because the most significant constituency of democracies is no longer voters but the creditors of public debt.
Second, democracies have come to be associated not just with self-government, but with good government leading to peace and plenty. But this is a fallacy. There is no reason that democracies will be better governed than autocracies or that economic growth in democracies will outperform that of autocracies. This creates an “expectations gap” in which people demand of democracies a level of success they cannot deliver.
Third, democracy has largely been sold around the world as “synonymous with modernization, economic uplift and individual self-realization.” Democratic politicians, often an elite, wrapped their power in largesse and growth that papered over important religious and moral differences. Today populism in Thailand, Egypt, and Turkey clashes with the clientism of democratic rulers and threatens the quasi-democratic alliance of the elites and the masses.
Meaney and Mounk are no doubt correct in perceiving challenges to democracy today. And they are right that democratic citizens consistently prefer technocratic competence over democratic dissent and debate. As they write,
…we live in highly bureaucratic states that require ever-increasing degrees of technical competence. We expect our governments to do more and to do it better. The more our expectations are addressed, the more bureaucratic and opaque government becomes and the less democratic control is possible.
The danger of representative democracy is that it imagines government as something we outsource to a professional class so that we can get on with what is most important in our lives. There is a decided similarity between representative democracy and technocracy, in that both presume that political administration is a necessary but uninspiring activity to be avoided and relegated to a class of bureaucrats and technocrats. The threat of representative democracy is that it is founded upon and regenerates an anti-political and apolitical culture, one that imagines politics as menial work to be done by others.
What Meaney and Mounk overlook, however, is that at least in the United States, we have never simply been a representative democracy. The United States is a complicated political system that cannot justly or rightly be called either a democracy or a representative democracy. Rightly understood, the USA is a federal, democratic, constitutional republic. Its democratic elements are both limited and augmented by its constitutional and federalist character as well as by its republican tradition. At least until recently, it combined a strong national government with equally strong traditions of state and local power. If citizens could not be involved in national politics, they could and often were highly involved in local governance. And local institutions, empowered by the participation of energized citizens, were frequently more powerful or at least as powerful as were national institutions.
Of course, the late 20th and early 21st centuries have witnessed a tectonic constitutional shift in America away from local institutions and toward a highly powerful, centralized, and bureaucratized national government. But this shift is neither inevitable nor irreversible. Indeed, largely driven by the right, the new federalism has returned to states some traditional powers. These powers can be used, however, by the left and the right. As Ben Barber has been arguing from the left, there is an opportunity in the dysfunctional national government to return power and vitality to our cities and our towns. Both Occupy Wall Street and the Tea Party show that there are large numbers of people who are dissatisfied with our political centralization and feel disenfranchised and distant from the ideals of democratic self-government. The Tea Party, more than Occupy, has channeled that disenchantment into local political organizations and institutions. But the opportunity to do so is present on the left as well as on the right.
There is a deeply religious element to American democracy that is bound up with the idea and reality of American exceptionalism, a reservoir of democratic potency that is not yet tapped out. Meaney and Mounk see this, albeit in a throwaway line that is buried in their essay:
Outside of a few outliers such as India and the United States, where deep in the provinces one still encounters something like religious zeal for democracy, many people in nominal democracies around the world do not believe they are inheritors of a sacral dispensation. Nor should they.
We are witnessing a crisis of democracy around the world, in the sense that both established and newer democracies are finding their populations dissatisfied. While it is true that people are not flocking to technical versions of mass democracies, they are taking to the streets and organizing protests, and involving themselves in the activities of citizenship. Meaney and Mounk are right, democracy is not assured, and we should never simply assume its continued vitality. But neither should we write it off entirely. Their essay should be read less as an obituary than a provocation. But it should be read. It is your Weekend Read.
Is there such a thing as too much free speech? The Editors at N+1 think so. They posted an editorial this week lamenting the overabundance of speaking that has swept over our nation like a plague:
A strange mania governs the people of our great nation, a mania that these days results in many individual and collective miseries. This is the love of opinion, of free speech—a furious mania for free, spoken opinion. It exhausts us.
The N+1 Editors feel besieged. And we can all sympathize with their predicament. Too many people are writing blogs; too many voices are tweeting; too many friends are pontificating about something on Facebook. And then there are the trolls. It’s hard not to sympathize with our friends at N+1. Why do we have to listen to all of these folks? Shouldn’t all these folks just stop and read N+1 instead?
Of course it is richly hypocritical for the Editors of an opinion journal to complain of an overabundance of opinions. And N+1 acknowledges and even trumpets its hypocrisy.
We are aware that to say [that others should stop expressing their opinions] (freely! our opinion!) makes us hypocrites. We are also aware that America’s hatred of hypocrisy is one of few passions to rival its love of free speech—as if the ideal citizen must see something, say something, and it must be the same thing, all the time. But we’ll be hypocrites because we’re tired, and we want eventually to stop talking.
Beyond the hypocrisy N +1 has a point: The internet has unleashed packs upon packs of angry often rabid dogs. These haters attack anything and everything, including each other. Hate and rage are everywhere:
The ragers in our feeds, our otherwise reasonable friends and comrades: how do they have this energy, this time, for these unsolicited opinions? They keep finding things to be mad about. Here, they’ve dug up some dickhead writer-professor in Canada who claims not to teach women writers in his classes. He must be denounced, and many times! OK. Yes. We agree. But then it’s some protest (which we support), and then some pop song (which we like, or is this the one we don’t like?), and then some egregiously false study about austerity in Greece (full of lies!). Before we know it, we’ve found ourselves in a state of rage, a semi-permanent state of rage in fact, of perma-rage, our blood boiled by the things that make us mad and then the unworthy things that make other people mad.
Wouldn’t it be nice of public discourse were civil and loving? I too would prefer a rational discussion about the Boycott, Diversity, and Sanction movement. I would be thrilled if the Tea Party and Occupy Wall Street could join forces to fight political corruption and the over-bureaucratization of government that disempowers individuals. And of course I would love it if those who religiously attack Hannah Arendt for her opinion that Adolf Eichmann was a superficial and banal man responsible for unspeakable evils could find common cause with those who find her provocative, moving and meaningful.
Of course it is exhausting dealing with those with whom we don’t see eye to eye. And there is always the impulse to say simply, “enough! I just don’t want to hear your opinions anymore.” This is precisely what N+1 is saying: “We don’t care!”
We assert our right to not care about stuff, to not say anything, to opt out of debate over things that are silly and also things that are serious—because why pretend to have a strong opinion when we do not? Why are we being asked to participate in some imaginary game of Risk where we have to take a side? We welcome the re-emergence of politics in the wake of the financial crash, the restoration of sincerity as a legitimate adult posture. But already we see this new political sincerity morphing into a set of consumer values, up for easy exploitation.
Underlying N+1’s ironic distance from the arena of opinions and discord is a basic anti-political fantasy that opinion is a waste of time, if it is not destructive. Wouldn’t it be better to skip the opinions and the battles and the disagreements and just cut straight to the truth? Just listen to the truth.
Truth is not an imperative, but something that must be discovered. Unlike liquid opinion, truth does not always circulate. It is that which you experience, deeply, and cannot forget. The right to not care is the right to sit still, to not talk, to be subject to unclarity and allow knowledge to come unbidden to you. To be in a constant state of rage, by contrast, is only the other side of piety and pseudoscience, the kind of belief that forms a quick chorus and cannot be disproved. Scroll down your Facebook feed and see if you don’t find one ditto after another. So many people with “good” or “bad politics,” delivered with conviction to rage or applause; so little doubt, error, falsifiability—surely the criteria by which anything true, or democratic, could ever be found.
What N+1 embraces is truth over opinion and escapism against engagement with others. What they forget, however, is that there are two fundamentally opposed routes to truth.
In one, the truthseeker turns away from the world of opinion. The world in which we live is a world of shadows and deceptions. Truth won’t be found in the marketplace of ideas, but on the mountaintop in the blinding light of the sun. Like Plato’s philosopher king, we must climb out of the cave and ascend to the heights. Alone, turned toward the heavens and the eternal truths that surf upon the sunrays, we open ourselves to the experience of truth.
A second view of truth is more mundane. The truthseeker stays firmly planted in the world of opinion and deception. Truth is a battle and it is fought with the weapons of words. Persuasion and rhetoric replace the light of the sun. The winner gains not insight but power. Truth doesn’t emerge from an experience; truth is the settled sentiment of the most persuasive opinion.
Both the mountain path and the road through the marketplace are paths to truth, but of different kinds. Philosophers and theologians may very well need to separate themselves from the world of opinion if they are to free themselves to experience truth. Philosophical truths, as Hannah Arendt argues, address “man in his singularity” and are thus “unpolitical by nature.” For her, philosophy and also philosophical truths are anti-political.
Politicians cannot concern themselves with absolute truths; they must embrace the life of the citizen and the currency of opinion rather than the truths of the philosopher. In politics, “no opinion is self-evident,” as Arendt understood. “In matters of opinion, but not in matters of [philosophical] truth, our thinking is discursive, running as it were, from place to place, from one part of the world to another, through all kinds of conflicting views, until it finally ascends from these particularities to some impartial generality.” In politics, truth may emerge, but it must go through the shadows that darken the marketplace.
What Arendt understands about political truths is that truths do indeed “circulate” in messy and often uncomfortable ways that the n+1 editorial board wishes to avoid. Political thought, Arendt argues, “is representative.” By that she means that it must sample as many different viewpoints and opinions as is possible. “I form an opinion by considering a given issue from different viewpoints, by making present to my mind the standpoints of those who are absent; that is, I represent them.” It is in hearing, imagining, and representing opposing and discordant views that one comes to test out his or her own views. It is not a matter of empathy, of feeling like someone else. It is rather an imaginative experiment in which I test my views against all comers. In this way, the enlarged mentality of imaginative thinking is the prerequisite for judgment.
When Arendt said of Adolf Eichmann that he was possessed of the “fearsome word-and-thought-defying banality of evil” because he did not think, what she meant was that he was simply incapable or unwilling to think from the perspective of others. His use of clichés was not thoughtlessness itself, but was evidence that he had barricaded himself inside an ideological cage. Above all, his desire to make others including Jews understand his point of view—his hope that they could see that he was a basically good man caught up on the wrong side of history—was for Arendt evidence of his superficiality and his lack of imagination. He simply could not and did not ever allow himself to challenge his own rationalizations and justifications by thinking from the perspective of Jews and his other victims. What allowed Eichmann to so efficiently dispatch millions to their deaths was his inability to think and encounter opinions that were different from his own.
In the internet age we are bombarded with such a diversity of angry and insulting and stupid and offensive viewpoints that it is only naturally to alternate between the urge to respond violently and the urge to withdraw.
It is easy to deride political opinion and idolize truth. But that is to forget that “seen from the viewpoint of politics, truth has a despotic character.”
Political thinking requires that we resist both the desire to fight opinions with violence and the desire to flee from opinions altogether. Instead, we need to learn to think in and with others whose opinions we often hate. We must find in the melee of divergent and offending opinions the joy that exists in the experience of human plurality. We don’t need to love or agree with those we find offensive; but so long as they are talking instead of fighting, we should respect them and listen to them. Indeed, we should care about them and their beliefs. That is why the N+1 manifesto for not caring is your weekend read.
Last week the Arendt Center held its Sixth Annual International Conference, “Failing Fast: The Educated Citizen in Crisis.” The conference was an incredible success. More than double the number of people registered for the conference this year over last year; more than 1,000 people attended over two days; another 250 watched the conference live on the web. You can now watch the whole conference here. Above all, the conference generated incredible discussions and provocations. Here is one response we received from someone on a post-conference survey sent to attendees:
"Richard Rodriguez's opening keynote lecture was a model of lucidity and profundity. It set the tone for two days of discussion about the tense boundary between private and public personhood and citizenship. The interaction of Rodriguez's call to speak with strangers and Leon Botstein's defense of a public self was clear and powerful, and contrasted meaningfully with James Tooley's advocacy for private schools. The combination was deeply meaningful and provocative."
For your Weekend Read, here is a transcript of Roger Berkowitz's introductory remarks. You can watch his speech and the entire conference here.
Failing Fast: The Educated Citizen in Crisis
Oct. 3, 2013
In the early years of our federal-constitutional-democratic-republican experiment, cobblers, lawyers, and yeoman farmers participated in Town Hall meetings. They would judge how much to pay in taxes in order to pay for how many teachers and how many firemen. By engaging citizens in governance, town hall meetings imbue in citizens the habit of democratic self-governance.
Today, few of us have the experience or the desire to govern and we have lost the habit of weighing and judging those issues that define our body politic. Why is this so?
Are we suffering an institutional failure to make clear that participation in governance is a personal responsibility?
Do the size and complexity of bureaucratic government mean that individuals are so removed from the levers of power that engaged citizenship is rationally understood to be a waste of time?
Or do gerrymandered districts with homogenous populations insulate congressmen from the need for compromise?
Whatever the cause, educated elites are contemptuous of common people and increasingly imagine that the American people are no longer qualified for self-government; and the American people, for their part, increasingly distrust the educated elite that has consistently failed to deliver the dream of a well-managed government that provides social services cheaply and efficiently?
It is against this background that we are here to think about “The Educated Citizen in Crisis.” Over the next two days, we will ask: What would an educated citizen look like today?
Maybe it’s the homeowner underwater on his mortgage who, in 2010, disgusted with decades of failed policies that enabled the largest fiscal crisis since the Great Depression, was shocked to see Congress award a bailout to the very bankers who were responsible for the crisis.
Maybe its woman who told the pollster that people are mad about what has happened, but that they are even angrier that “no one in Washington is listening to them.”
Maybe it’s the author who concludes:
If the business of America is business, the business of government programs and their clients is to stay in business.
That author was John Rauch of the Brookings Institute. He goes on to say that the American Government
has become what it is and will remain: a large, incoherent, often incomprehensible mass that is solicitous of its clients but impervious to any broad, coherent program of reform.
Or, maybe it is a reader of Hannah Arendt who is struck by Arendt’s bracing claim that the
transformation of all government into bureaucracies… may turn out to be a greater threat to freedom and to that minimum of civility… than the most outrageous arbitrariness of past tyrannies has ever been.
In all these personas, today’s concerned and educated citizen is angry at the betrayal of American democracy. He or she is dismayed that at the power of money, the legal corruption of lobbyists, and a bureaucracy that seems impervious to popular control.
Such a citizen might, very well, in 2013—and here I beg the self-satisfied partisan liberals amongst you to suspend your disbelief for a moment—look and sound a lot like Eric Cantor, the majority leader of the House of Representatives.
To be clear, there is no claim that Hannah Arendt would be or should be a supporter of the Tea Party. She was not the type to join a movement and certainly not one with as much ugliness and racism circulating around it.
But as we stare blankly upon the theatre of the absurd in Washington, it behooves us to take Representative Cantor and his fellow House Republicans seriously; at least, that is, if we are serious about thinking about what it means to be an educated citizen.
First, let’s dispose of any elitist condescension that portrays Cantor and his fellow Republicans as wild children in need of stern parenting. This begins with Senate Majority Leader, Harry Reid, who joys in describing the House Republicans as “vexatious,” “banana Republicans” who are engaged in “kid’s stuff.” He vowed every day this week not to negotiate with “anarchists” and “extremists.”
Representative Cantor is a man who has a B.A. from The George Washington University, a J.D. from The College of William and Mary, and his MA from Columbia University in New York. Interestingly enough, his website fails to say what that Masters degree was in. A little digging shows it was in Real Estate Development. But I ask you: don’t sit here at Bard and be snarky and condescending -- and relieved that Cantor’s Masters is not in something serious like political science or philosophy.
Ok, But isn’t Senator Reid right that Cantor and his ilk are churlish juveniles laying waste to the common good? President Barack Obama—another deeply educated citizen—has put the matter clearly. The country had a debate about health care. The President and his party won. The Republicans lost. The Supreme Court has upheld the President’s healthcare law. The President was reelected. The Healthcare law is the law of the land. Given these facts, it is irresponsible and petulant for a small group of Republicans to demand concessions in return for passing a budget. As the President says, if he negotiates with the Republicans now, every future President will be subject to the same kind of shakedown on any issue every time an important piece of legislation needs to be passed. This is hardly a recipe for good governance.
Educated citizens must ask: is the shutdown of government coercion instead of persuasion? Consider this quotation reported yesterday from Cantor’s House colleague Steve King: “Now the pressure will build on both sides, and the American people will weigh in.” He is right. The American people will weigh in. And if Americans weigh in on the side of the President and the Democrats, the consequences for the Republican Party will be disastrous – something for which many here might well celebrate Cantor and King.
Cantor and his colleagues are not actually threatening anyone. They are with utter clarity of purpose standing up for a principle; and they are taking a huge risk that they can convince the American people that the Affordable Care Act and other entitlements are part of the general overreaching and enlargement of government that has eroded the power of individual self-government and thus brought about a crisis of educated citizenship.
Cantor’s is an unpopular and uphill struggle to say the least. It is further corrupted by association with racist elements. Moreover, it is also dishonest to the extent that it refuses to own up to the pain his plans will cause. For all these reasons, it is likely that the House Republicans will fail. [Update. as of today, Friday Oct. 11, it seems that the Republicans are admitting defeat and agreeing to accept the Affordable Healthcare Act, although the negotiations are ongoing.]
But success or failure is not the point.
The educated citizen must ask himself today whether good governance is what is called for. Certainly the freedom riders of the Civil Rights Movement did not think good governance was called for. Nor did the Texas State Senator Wendy Davis when she filibustered a Texas bill that restricted abortions. It will be easy to say that there is a difference between fighting for civil rights and fighting to take away health insurance. There is a difference. And yet both fights are waged in the name of freedom, albeit two very different ideas of what freedom means.
Freedom is at the very center of Hannah Arendt’s political thinking. To be free, Arendt thought, was what it meant to be human. Politics exists because it is in and through politics that human beings can build common worlds in which we can speak and act together in ways that are new and surprising. Arendt’s valuation of freedom, however, made her deeply suspicious of education, at least in its relation to politics.
In “The Crisis in Education," Hannah Arendt writes: "education can play no part in politics, because in politics we always have to deal with those who are already educated.” What Arendt means is that in democratic politics we are all equal and no one has the authority to teach others. Some may be geniuses, and others loved. Some are liberals, other conservatives. Some may be racist. And some may hate rich people. But whatever our private feelings, in politics we encounter each other on a field of equality and respect as educated citizens.
Politics for Arendt is allergic to truth claims. It is about opinion and for this reason respectful and reasoned “debate constitutes the very essence of political life.”
Arendt worried that when politicians, pundits, or people talk about educating voters—when they complain that other citizens are ignorant or condescend to speak and argue with those they demean—they are really seeking to use the rhetoric of education to achieve a unanimity that is foreign to politics.
During the recent presidential election, the candidates frequently appealed to education as the panacea for everything from our flagging economy to our sclerotic political system. How to solve poverty? Education. How do we address global warming? Education. How to heal our divided country? Education.
Behind such arguments is the unspoken assumption: “If X were educated they would see the truth and agree with me.” But that is not the way human nature or politics works. Education will not make people see eye to eye, end political paralysis, or usher in a more rational polity.
What then is the value of education? And why is that we so deeply need great schools and great teachers?
Hannah Arendt saw education as “the point at which we decide whether we love the world enough to assume responsibility for it." The educator must love the world and believe in it if he or she is to introduce young people to that world as something noble and worthy of respect. In this sense education is conservative, insofar as it conserves the world as it has been given.
But education is also revolutionary, insofar as the teacher must realize that it is part of that world as it is that young people will change the world. Teachers simply teach what is, Arendt argued; they leave to the students the chance to transform it.
For Arendt, Education teaches self-thinking. Education propels us from the darkness of private life into the bright light of the public sphere. In short, education leads us into the common world where we can take our place as an equal and free already-educated citizen.
We are asking over the next two days, “What is an educated citizen?” And “why is the educated citizen in crisis?”
We might ask, then, why it is that so few on the left are responding to the attack on the healthcare bill and entitlements more generally? Why is it that the only Americans who are upset enough at what is going on in Washington to protest, mobilize, and get involved are members of the Tea Party? Where is the new left that pundits like Peter Beinart argue is in ascent? Where is Occupy Wall Street? Are they biding their time? Are they waiting for the right time to pounce and to respond? In my world, they are qvetching on Facebook and Twitter.
Or might it be that Americans on the left—especially younger Americans who have grown up in an era of state-sponsored capitalism and Occupy Wall Street—harbor such a deep cynicism toward the federal state and government that their support for entitlements is deflated by their disdain for government.
We are witness today to a widespread distrust and disdain for government. Few people seem to care. On both left and right, government and politics no longer embody our collective aspirations to care for the common good. Government is administratively necessary, but an irritant to daily life; it is a set of services we outsource rather than an activity we engage.
Confronting unprecedented challenges from the environment to terrorism and the decline of the middle class, we need to resurrect our political institutions. We need to inspire citizens to once more care about the common world that we—through politics—build together. New institutions are needed—political, technological, and social—to bring citizens together to speak and act alongside those with whom we disagree but share a more fundamental commitment to a common good.
Our goal, over the next two days, is to think together about what it means to be an educated citizen. In the most literate and technologically savvy society of all time, we have produced politically uneducated and disengaged citizens. What would it mean to reverse that trend? And how do we do so? These are the questions I ask you to keep in your mind as you listen to the excellent speakers who have generously agreed to guide and provoke us over the next two days.
You can watch Roger Berkowitz deliver his speech and the entire conference here.
The crisis must matter.
The most important divide in political and intellectual life today is between those who see society undergoing a transformative crisis and others who believe that the basic structures the 20th century industrial welfare state will persist.
The divide over how to understand the crisis of our times was front and center at the recent Hannah Arendt Center conference "Does the President Matter? A Conference on the American Age of Political Disrepair."
A number of speakers worried about the language of crisis. They rightly see talk about a "crisis" as code for an attack on the institutions of the welfare state. It can be an excuse to not only scale back the unsustainable aspects of our entitlement programs, but also to lower taxes on the wealthiest Americans while doing so.
It is true that many want to misuse the crisis as an attack on the poor and the middle class; that potential abuse, however, is not an excuse to deny the fact of the crisis itself. It is simply no longer possible to responsibly deny that we are living through a transformative crisis that will change the character of America and much of the world. The drivers of that crisis are many and include technology and globalization. The effects are profound and won't be fully understand for decades. At present, the first consequence is a crisis of institutional authority.
We in the US have indeed lost faith in our basic institutions. We don't trust scientists who warn us about global warming; we doubt economists who warn us about debt; we deny doctors who tell us that vaccines are safe. Very few people trust politicians or Ph.D.'s anymore. In fact, according to a 2009 General Social Survey, there are only two institutions in the United States that are said to have "A great deal" of confidence from the American people: the military and the police. This faith in the men with guns is, as Christopher Hayes writes in The Twilight of the Intellectuals, deeply disturbing. But it is not an illusion.
According to John Zogby, who spoke at the Hannah Arendt Center Conference last weekend, the crisis of faith in institutions is widespread and profound. Zogby said:
We call this the greatest economic crisis since the Great Depression and it is. But this is much more than that. This is a transformational crisis. Much more than simply the Great Depression, this is equivalent on the global stage to the fall of the Roman Empire. To the demise of Feudalism. What we have at this moment in time is a myriad—if not almost all—of our familiar institutions unprepared to deal with multiple crises all at once. Whether it is the federal Government or the near bankrupt states or the Democratic Party or the Republican Party or the banking institutions or the brick and mortal halls of higher education. Whether it is the Boy Scouts of America or the Roman Catholic Church, a number of our institutions that make up the superstructure of our society are simply unprepared to deal with the force of change, where we find ourselves.
Zogby was not the only speaker at our conference who noted that "our minds as well as our institutions have not caught up with the failure that they represent." Tracy Strong pointed to the outdated capacity of political primaries and Jeffrey Tulis spoke of the ways that Congress has, over the last century, increasingly abdicated its governmental and constitutional responsibilities. Institutions today spend more resources on self-sustenance (like fund raising) than on problem solving. Today our most important institutions are not only unable to solve the problems we face; the institutions have themselves become the problem.
Walter Russell Mead compared our current period to that era of American politics between 1865 and 1905. Mead noted that few people can name the presidents in that period not because of a failure of leadership but, rather, because in that period the U.S. was going through a cultural and societal transformation from, on one level, an agrarian to an urban-industrial society. We today are experiencing something equally if not more disruptive with globalization, technology, and the Internet. It is a mistake, Mead argued, to think that government or any group can understand and plan for such profound changes. There will be dislocations and opportunities, most of which are invisible today. While Mead offered optimism, he made clear that the years before the new institutions of the future emerge will be difficult and at times dark. There is little a president or a leader can do to change that.
Todd Gitlin and Anne Norton spoke of Occupy Wall Street and also the Tea Party as U.S. movements founded upon the loss of political and institutional power. Gitlin began with the widely quoted quip that the system is not broken, its fixed, an expression that feeds upon the disaffection with mainstream institutions. Norton especially noted the difficulties of a movement that at once decries and yet needs governmental power. The one constant, she rightly noted, is that in a time of institutional decay, those with the least to lose will lose the most.
Rick Falkvinge, founder of the Swedish Pirate Party, situated his party precisely in the space of institutional distrust that Mead and Zogby described. Falkvinge noted that the primary value held by 17 year-olds today is openness and transparency, which he distinguished from free speech. While free speech respects the rights of government and the media to regulate and curate speech, the radical openness embodied by the new generation is something new. The Pirate parties, for example, follow the rule of three. If three members of the Party agree on a policy, then that policy can be a platform of the party. There is no hierarchy; instead the party members are empowered to act. Like Wikileaks, with which it has strong affinities, the Pirate Party is built upon a profound distrust of all institutional power structures that might claim the authority to edit, curate, or distill what ought to be published or how we should govern ourselves.
Hannah Arendt wrote frequently about crises. "A crisis," she saw, "becomes a disaster only when we respond to it with preformed judgments, that is, with prejudices." The recent Arendt Center Conference sought to think about one particular crisis, namely the crisis of leadership in responding to the various crises that beset our age. It was born from the sense that we are increasingly confronting problems before which we cower helpless.
There are, of course, dangers and pitfalls in leadership. I too worry about calls for a leader to redeem us. That said, the coming seismic shifts in our world will bring great pain amidst what may be even greater opportunity. Without a workable political system that can recognize and respond to the coming changes with honesty and inspiration, chances are that our crises will morph into a disaster. Our President must matter, since men rarely accomplish anything meaningful without it. How a president might matter, was the theme of the two day conference.
If you missed the conference, or if you just want to review a few of your favorite talks, now is your chance. The Conference proceedings are online and can be found here. They are your weekend "read".
“Hence it is not in the least superstitious, it is even a counsel of realism, to look for the unforeseeable and unpredictable, to be prepared for and to expect “miracles” in the political realm. And the more heavily the scales are weighted in favor of disaster, the more miraculous will the deed done in freedom appear.”
—Hannah Arendt, What is Freedom?
This week at Bard College, in preparation for the Hannah Arendt Center Conference "Does the President Matter?", we put up 2 writing blocks around campus, multi-paneled chalkboards that invite students to respond to the question: Does the President Matter? The blocks generated quite a few interesting comments. Many mentioned the Supreme Court. Quite a few invoked the previous president, war, and torture. And, since we are at Bard, others responded: it depends what you mean by matters.
This last comment struck me as prescient. It does depend on what you mean by matters.
If what we mean is, say, an increasing and unprecedented power by a democratic leader not seen since the time of enlightened monarchy, the president does matter. We live in an age of an imperial presidency. The President can, at least he does, send our troops into battle without the approval of Congress. The President can, and does, harness the power of the TV, Internet, and twitter to bypass his critics and reach the masses more directly than ever before. The president can, and does, appoint Supreme Court Justices with barely a whimper from the Senate; and the president’s appointments can, and do, swing the balance on a prisoner’s right to habeas corpus, a woman’s right to choose, or a couple’s right to marry.
And yet, what if by matter, we mean something else? What if we mean, having the power to change who we are in meaningful ways? What if by matter we mean: to confront honestly the enormous challenges of the present? What if by matter we mean: to make unpredictable and visionary choices, to invite and inspire a better future?
On the really big questions—the thoughtless consumerism that degrades our environment and our souls; the millions of people who have no jobs and increasingly little prospect for productive employment; the threat of devastating terrorism; and the astronomical National Debt: 16 trillion and counting for the US. -- That is $140,000 for each taxpayer. -- Add to that the deficiency in Public Pension Obligations (estimated at anywhere from $1 to $5 trillion.) Not to mention the 1 trillion dollars of inextinguishable student debt that is creating a lost generation of young people whose lives are stifled by unwise decisions made before they were allowed to buy a beer.
This election should be about a frank acknowledgement of the unsustainability of our economic, social, and environmental practices and expectations. We should be talking together about how we should remake our future in ways that are both just and exciting. This election should be scary and exciting. But so far it’s small-minded and ugly.
Around the world, we witness worldwide distrust and disdain for government. In Greece there is a clear choice between austerity and devaluation; but Greek leaders have saddled their people with half-hearted austerity that causes pain without prospect for relief. In Italy, the paralysis of political leaders has led to resignation and the appointment of an interim technocratic government. In Germany, the most powerful European leader delays and denies, trusting that others will blink every time they are brought to the mouth of the abyss.
No wonder that the Tea Party and Occupy Wall Street in the US, and the Pirate Parties in Europe share a common sense that liberal democratic government is broken. A substantial—and highly educated—portion of the electorate has concluded that our government is so inept and so compromised that it needs to be abandoned or radically constrained. No president, it seems, is up to the challenge of fixing our broken political system.
Every President comes to Washington promising reform! And they all fail. According to Jon Rauch, a leading journalist for The Atlantic and the National Journal, this is inevitable. He has this to say in his book Government's End:
If the business of America is business, the business of government programs and their clients is to stay in business. And after a while, as the programs and the clients and their political protectors adapt to nourish and protect each other, government and its universe of groups reach a turning point—or, perhaps more accurately, a point from which there is no turning back. That point has arrived. Government has become what it is and will remain: a large, incoherent, often incomprehensible mass that is solicitous of its clients but impervious to any broad, coherent program of reform. And this evolution cannot be reversed.
On the really big questions of transforming politics, the President is, Rauch argues, simply powerless. President Obama apparently agrees. Just last week he said, in Florida: "The most important lesson I've learned is that you can't change Washington from the inside. You can only change it from the outside."
A similar sentiment is offered by Laurence Lessig, a founding member of Creative Commons. In his recent book Republic 2.0, Lessig writes:
The great threat today is in plain sight. It is the economy of influence now transparent to all, which has normalized a process that draws our democracy away from the will of the people. A process that distorts our democracy from ends sought by both the Left and the Right: For the single most salient feature of the government that we have evolved is not that it discriminates in favor of one side and against the other. The single most salient feature is that it discriminates against all sides to favor itself. We have created an engine of influence that seeks not some particular strand of political or economic ideology, whether Marx or Hayek. We have created instead an engine of influence that seeks simply to make those most connected rich.
The system of influence and corruption through PACs, SuperPacs, and lobbyists is so entrenched, Lessig writes, that no reform seems plausible. All that is left is the Hail Mary idea of a new constitutional convention—an idea Lessig promotes widely, as with his Conference On the Constitutional Convention last year at Harvard.
For Rauch on the Right and Lessig on the Left, government is so concerned with its parochial interests and its need to stay in business that we have forfeited control over it. We have, in other words, lost the freedom to govern ourselves.
The question "Does the President Matter?" is asked, in the context of the Arendt Center conference, from out of Hannah Arendt's maxim that Freedom is the fundamental raison d'etre of politics. In "What is Freedom?", Arendt writes:
“Freedom is actually the reason that men live together in political organization at all. Without it, political life as such would be meaningless. The raison d’être of politics is freedom.”
So what is freedom? To be free, Arendt says, is to act. Arendt writes: "Men are free as long as they act, neither before nor after; for to be free and to act are the same.”
What is action? Action is something done spontaneously. It brings something new into the world. Man is the being capable of starting something new. Political action, and action in general, must happen in public. Like the performing arts—dance, theatre, and music—politics and political actions requires an audience. Political actors act in front of other people. They need spectators, so that the spectators can be drawn to the action; and when the spectators find the doings of politicians right, or true, or beautiful, they gather around and form themselves into a polity. The political act, the free act must be surprising if it is to draw people to itself. Only an act that is surprising and bold is a political act, because only such an act will strike others, and make them pay attention.
The very word politics derives from the Greek polis which itself is rooted in the Greek pelein, a verb used to describe the circular motion of smoke rings rising up from out of a pipe. The point is that politics is the gathering of a plurality around a common center. The plurality does not become a singularity in circling around a polestar, but it does acknowledgement something common, something that unites the members of a polity in spite of their uniqueness and difference.
When President Washington stepped down after his second term; when President Lincoln emancipated the slaves; when FDR created the New Deal; when President Eisenhower called the Arkansas National Guard into Federal Service in order to integrate schools in Little Rock; these presidents acted in ways that helped refine, redefine, and re-imagine what it means to be an American.
Arendt makes one further point about action and freedom that is important as they relate to the question: Does the President Matter? Courage, she writes, is "the political virtue par excellence." To act in public is leave the security of one's home and enter the world of the public. Such action is dangerous, for the political actor might be jailed for his crime or even killed. Arendt's favorite example of political courage is Socrates, who was killed for his courageous engagement of his fellow Athenians. We must always recall that Socrates was sentenced to death for violating the Athenian law.
Political action also requires courage because the actor can suffer a fate even worse than death. He may be ignored. At least to be killed for one's ideas means that one is recognized as capable of action, of saying and doing something that matters. To be ignored, however, denies the actor the basic human capacity for action and freedom.
One fascinating corollary of Arendt's understanding of the identity of action and freedom is that action, any action—any original deed, any political act that is new and shows leadership—is, of necessity, something that was not done before. It is, therefore, always against the law.
This is an insight familiar to readers of Fyodor Dostoevsky. In Crime and Punishment Raskolnikov says:
Let's say, the lawgivers and founders of mankind, starting from the most ancient and going on to the Lycurguses, the Solons, the Muhammads, the Napoleons, and so forth, that all of them to a man were criminals, from the fact alone that in giving a new law they thereby violated the old one.
All leaders are, in important ways, related to criminals. This is an insight Arendt and Nietzsche too share.
Shortly after we began to plan this conference, I heard an interview with John Ashcroft speaking on the Freakonomics Radio Show. He said:
"Leadership in a moral and cultural sense may be even more important than what a person does in a governmental sense. A leader calls people to their highest and best. ... No one ever achieves greatness merely by obeying the law. People who do above what the law requires become really valuable to a culture. And a President can set a tone that inspires people to do that."
My first reaction was: This is a surprising thing for the Attorney General of the United States to say. My second reaction was: I want him to speak at the conference. Sadly, Mr. Ashcroft could not be with us here today. But this does not change the fact that, in an important way, Ashcroft is right. Great leaders will rise above the laws in crisis. They will call us to our highest and best.
What Ashcroft doesn't quite say, and yet Arendt and Dostoevsky make clear, is that there is a thin and yet all-so-important line separating great leaders from criminals. Both act in ways unexpected and novel. In a sense, both break the law.
But only the leader's act shows itself to be right and thus re-makes the law. Hitler may have acted and shown a capacity for freedom; his action, however, was rejected. He was a criminal, not a legislator. Martin Luther King Jr. or Gandhi also broke the laws in actions of civil disobedience. Great leader show in their lawbreaking that the earlier law had been wrong; they forge a new moral and also written law through the force and power of moral example.
In what is perhaps the latest example in the United States of a Presidential act of lawbreaking, President George W. Bush clearly broke both U.S. and international law in his prosecution of the war on terror. At least at this time it seems painfully clear that President George W. Bush's decision to systematize torture stands closer to a criminal act than an act of great legislation.
In many ways Presidential politics in the 21st takes place in the shadow of George W. Bush's overreach. One result is that we have reacted against great and daring leadership. In line with the spirit of equality that drives our age, we ruthlessly expose the foibles, missteps, scandals and failures of anyone who rises to prominence. Bold leaders are risk takers. They fail and embarrass themselves. They have unruly skeletons in their closets. They will hesitate to endure and rarely prevail in the public inquisition that the presidential selection process has become.
These candidates, who are inoffensive enough to prevail, are branded by their consultants as pragmatists. Our current pragmatists are Products of Harvard Business School and Harvard Law School. Mr. Romney loves data. President Obama worships experts. They are both nothing if not faithful to the doctrine of technocratic optimism, that we with the right people in charge we can do anything. The only problem is they refuse to tell us what it is they want to do. They have forgotten that politics is a matter of thinking, not a pragmatic exercise in technical efficiency.
Look at the Mall in Washington: the Washington monument honors our first President, the Jefferson Memorial, the Lincoln Memorial, the Memorial to Franklin Delano Roosevelt. There is not a monument to any president since FDR. And yet, just 2 years ago we dedicated the Martin Luther King Memorial. It doesn't seem like an accident that the leaders of the Civil Rights Movement were not politicians. Our leaders today do not gravitate to the presidency. The presidency does not attract leaders. Bold leaders today are not the people running for office.
Yet, people crave what used to be called a statesman. To ask: "Does the President Matter?" is to ask: might a president, might a political leader, be able to transform our nation, to restore the dignity and meaning of politics? It is to ask, in other words, for a miracle.
At the end of her essay, "What is Freedom?", Hannah Arendt said this about the importance of miracles in politics.
Hence it is not in the least superstitious, it is even a counsel of realism, to look for the unforeseeable and unpredictable, to be prepared for and to expect “miracles” in the political realm. And the more heavily the scales are weighted in favor of disaster, the more miraculous will the deed done in freedom appear.
It is men who perform miracles—men who because they have received the twofold gift of freedom and action can establish a reality of their own.
I don't know if the president matters.
But I know that he or she must. Which is why we must believe that miracles are possible. And that means we, ourselves, must act in freedom to make the miraculous happen.
In the service of the not-yet-imagined possibilities of our time, our goal over the two days of the conference days was to engage in the difficult, surprising, and never-to-be-understood work of thinking, and of thinking together, in public, amongst others. We heard from philosophers and businessmen, artists and academics. The speakers came from across the political spectrum, but they shared a commitment to thinking beyond ideology. Such thinking is itself a form of action, especially so in a time of such ideological rigidity. Whether our meeting here at Bard gives birth to the miracle of political action--that is up to you. If we succeeded in thinking together, in provoking, and in unsettling, we perhaps sowed the seeds that will one day blossom into the miracle of freedom.
Watch Roger's opening talk from the conference, "Does the President Matter?" here.
You know that the problem of inequality has gone mainstream when even Charles Murray has written a book about it. Not only the Occupy movement and the Tea Party, but also Murray—the conservative force between The Bell Curve and other controversial contributions to the culture wars—is now loudly screaming about the dangers of inequality in America. But with Murray, there is a difference.
If the Occupy Wall Street movement focuses on the vast income inequality that divides the country into haves, have nots, and have-it-alls, and if the Tea Party divides the country into the self-sufficient and the governmental dependents, Murray points to yet another divide: the Cultural Divide.
Murray begins with a point that I take to be essential:
Life sequestered from anybody not like yourself tends to be self-limiting.
Americans (Murray means by this term always white Americans) are living increasingly amongst those like themselves. Murray means by this that American elites (both Republican and Democrat) have separated themselves from the rest of the country. Specifically, he is worried that wealthy white Americans live apart from and are ignorant of poor white Americans. And vice versa.
In his new book, Coming Apart: The State of White America, 1960–2010, Murray argues that an enormous cultural divide has separated white Americans into classes that don't mix. While many liberals might welcome Murray's voice pointing to the rise of inequality in America, his analysis and prescriptions are radically different from those usually suggested by the left. For one thing, Murray focuses on white Americans between 30-49. Part of this focus is to support his argument that "Cultural inequality is not grounded in race or ethnicity." This itself will strike many on the left as an evasion, which it is. And yet, Murray's focus on the increasingly vast class divisions amongst white Americans points to the profound depths of the rising class and income inequality that pervades and divides American society.
Murray does not only point out the vast class divide in the United States. He points to solutions as well. His book is a call to action, but one that has little if nothing to say about the need for government to help the poor. No, for Murray, what both the lower and upper classes need are better values. The lower classes must learn from the upper classes the values of hard work, marriage, and family. The upper classes must learn from the lower classes the value of community, patriotism, and religion.
Whatever one thinks of Murray's analysis, he is right that we all need to do more to read and think and interact with others with whom we don't always agree. Those interested in and concerned by inequality in American can learn from Murray's book, and they should, even as they should wonder at his single-minded concern with white people. Problematic books can teach us much. Thus, for this week's weekend read, I suggest you take a look at Murray's latest essay on "The New American Divide."
Occupy Wall Street has been looking for issues to coalesce around. Now the Canadian group Adbusters—the group that issued the initial call that began the protests—has proposed that Occupy Wall Street adopt a Robin Hood Tax on financial transactions as its first issue. Here is their call to action.
The Financial Transaction Tax (FTT) is an idea that has lots of support amongst some economists. My friend David Callahan has been arguing for the FTT for a while now. By far the best and most balanced analysis of an FTT is by the IMF, here. On the positive side, the FTT has the advantage of being simple and intuitively attractive. But is a Financial Transaction Tax really a good issue for Occupy Wall Street to coalesce around?
The main problem is that the FTT employs a sawed off shot-gun approach to a real but specific problem and unintended consequences. Thus, the IMF study cited above concluded that a FTT would not clearly target financial excesses:
Where the goal is to curb financial market excesses, [FTT] offer a less specific remedy for the excessive leverage that is believed to cause them than other tax and/or regulatory solutions. Financial complexity does not derive solely or even primarily from trading activity. The buildup of hidden financial risks in the recent crisis resulted predominantly from excess leverage, risk concentration, and product innovation such as asset securitization, which would have been largely unaffected by a transactions tax. An [FTT] also does not directly address systemic risk.
The point is that the real problem in speculation is leverage and volatility. The FTT doesn't address leverage, and it doesn't target the high frequency traders who drive volatility. Instead, the FTT taxes ALL transactions.
What is more, the FTT will penalize smaller and retail investors—precisely those in the 99%. As the chart below shows, most stock in the U.S. is held by middle-class investors—those between the 80th percentile and the 99th percentile. They are responsible for the vast majority of financial transactions (this is especially true since a large percentage of the equity holdings of the 1% in the chart are enormous trusts containing dividend paying stocks that have been held for generations and which never trade). Thus, the FTT falls most heavily on the people who own the most stock in the country and depend on that stock for our retirements and investments.
Another problem is that if the Financial Transaction Tax is not adopted globally, it may well drive trading off shore to even less well-regulated markets than our own. The U.S. tried a similar tax in the 1960s and repealed it when trading moved to London. Sweden tried a FTT tax in the 1980s and 1990s and repealed it later when trading fled to other countries.
Finally, the IMF concludes that the FTT would increase consumption and reduce savings by lowering the returns of investment and savings—a result directly opposite to at least some of the goals of Occupy Wall Street. In addition, the FTT discourages the rebalancing of portfolios, thus depressing total returns on mutual funds investments and 401ks.
So what might be some other ideas for Occupy Wall Street—and also our political leaders (such as they are)—to consider? Here are a few ideas that a number of professionals I spoke with mentioned:
1. Ban all High Frequency Trading. It has no purpose except to make some very big and wealthy firms money while increasing volatility for the rest of us. High frequency traders justify the practice as increasing market efficiency. But there is no economic justification to prefer a system that makes 1000 trades per second to one that makes 10 trades per second. Such trading is disruptive and very profitable. Ban it outright. Doing so would be much easier than getting the global cooperation needed to make a Financial Transaction Tax workable. And doing so would also make the U.S. markets more stable and thus give them a competitive advantage over other markets worldwide.
2. A Cancelled Order Tax. It turns out nearly 99% of the orders placed on Wall Street are never filled, but cancelled. A small percentage of these cancellations are just people changing their minds. But the vast majority of cancelled orders are used to manipulate prices by tricking other traders into thinking that a stock is moving in a particular direction. According to one study on an average trading day in 2010, only 1% of all the 89.7 billion orders were executed, which means that nearly 99% of all orders placed can be attributed to high frequency traders trying to manipulate stock prices. A tax on cancelled-orders has distinct advantages over a tax on all financial transactions. First, it will fall primarily on hedge funds and large high-frequency traders, and will not affect retail investors. Second, it will specifically target the casino-like aspect of Wall Street. A cancelled-order tax is not as simple or sexy as a financial transaction tax. Less has been written on it. But it actually seems like a better idea. Read more about the idea here and here.
3. Reinstate the Uptick Rule. Nearly every market professional I polled supports the re-instatement of the "Uptick Rule," a rule that was imposed in 1938 during the Depression and repealed in 2007—just before the market crash and the financial crisis. The Uptick Rule prevents hedge funds and traders from betting on falling stock prices when the markets are already falling, thus reducing volatility and reducing the ability of traders to make money by encouraging market panics. There is a debate about how effective the Uptick Rule is, but there seems to be little or no downside to reinstating it. The only people who oppose doing so are traders.
4. Taxing Corporate Debt and Leverage and Raising Margins. The IMF proposes taxing not financial transactions but corporate debt, thus discouraging corporations from using debt and leverage to finance their activities. As part of this approach, it would be wise to raise margin requirements, the amount of money that someone has to put up before buying a stock or financial instrument on credit.
While Hannah Arendt may not have been much interested in the minutiae of Wall Street regulation, she did care deeply about the importance of facts in thoughtful and reasoned argument. In just one week, on Friday Oct. 28, the Hannah Arendt Center will open our two-day conference on Truthtelling: Democracy in an Age Without Facts. When facts and opinions blur, reasoned argument falls prey to spin and deception. Politics is a realm of conflicting opinions, Arendt argued, but the opinions must necessarily be grounded on facts.
Whether or not the Financial Transaction Tax is a good idea, the debate around it should be based on solid knowledge of the financial system, the affects of such a tax, and also the alternatives. These are very complex issues and, in all honesty, much of the debate so far has traded in simplifications, soundbites, and falsehoods.
If Occupy Wall Street really wants to distinguish itself from the Tea Party and change our political culture, let's use this first foray into politics as an opportunity to model adult argument, something that has been absent from our public life for far too long. If they do want to model a future of fact-based decision making, they will do well to look deeply into the cons as well as the pros of a financial transaction tax. They would also do well to consult those people who work in financial markets daily. Many of these people—both those in the 99% and the 1%—want to eliminate market excesses and reign in the speculation and insanity that helped lead to the recent financial crisis. In the name of common sense and a way forward, let's have a real debate based in both fact and expertise.