Vanity

"The offspring of riches: Pride, vanity, ostentation, arrogance, tyranny" ~ Mark Twain

On November 27th, 2009 the Los Angeles Times ran an excellent Op-Ed piece by Steve Salerno titled, “Can America afford the 'vanity tax'?” Salerno wrote about how he had a found a pendant for the price of $1,195 at a jewelry store in a shopping center and then a very similar one at Wal-Mart for just $39. While he never explains what the hell was he was doing at Wal-Mart in the article he does a very good job of exploring something he calls the “vanity tax.”

According to Salerno a “vanity tax” is “the difference between what a thing needs to cost (to fulfill a given function) and what it ends up costing (after being artificially inflated by imperatives besides function).” This vanity tax isn’t simply an extra cost tacked on for a better product. In fact, the more expensive item is often worse than the less costly. As he states in his article, “It costs more to own a shoe that does a worse job of doing what a shoe is supposed to do.”

While it’s a great article it fails to explain why this “bastardization of value” exists. To understand this phenomenon one needs to understand the role the market plays in modern capitalism.

As I’ve explained previously the market for goods and services was the world’s first market, appearing shortly after the advent of agriculture. And it’s through this market today that we acquire everything from food to cars to yachts. In fact it’s nearly impossible to survive in modern Western society without buying goods or services from the market. But in modern capitalism the market does much more. Rather than simply providing a mechanism to delivers goods and services or the Darwinian effect of Adam Smith’s “invisible hand,” the retail market in a modern capitalist system functions, in conjunction with other markets, as a mechanism to distribute wealth to the capitalist class, often in the form of dividends from profits or increased value of stock.

With this knowledge we can see the origin of the vanity tax. The modern capitalist system creates a false need in consumers to purchase items with artificially inflated prices, a “vanity tax” as Salerno calls it, which thereby increases the amount of wealth distributed to the capitalists via the markets.

Main Street v. Wall Street

The November 9th, 2009 issue of Time magazine had an interesting cover which read, “Why Main Street Hates Wall Street.” While there were several interesting articles and commentaries in that issue it’s the cover article that I want to write about.

Before discussing the article though I would like to comment briefly about the cover. The term “hate” really bothers me. In my opinion, we should be angry, frustrated and disgusted with Wall Street. But I would discourage “hating.” When we hate then far too often we forget that the target of our hatred is often times a human being, who then becomes ‘The Other.’ As a result we may begin down a path that ultimately ends in violence. Let us be angry but let us not hate.

Now, back to the subject at hand, the Time magazine article written by Allan Sloan which is actually titled “What’s Still Wrong with Wall Street.” There’s a lot of good that can be said about the article. It starts out with a very good analysis of what led up to the crash, such as the actions of AIG and Citibank. It then dives into the post-crash events in which these fat cats were bailed out by the feds. Sloan also centers his fire on those same execs that won’t have to face justice for swindling so many people and destroying so many lives. The article wraps up with some recommendations on fixing the system.

I have only two real criticisms of the article but I think these are important. My first critique is that it fails to point the blame where it belongs, which is the capitalist system itself. Instead, the article states that the failure was not enough regulations on the financial industry. This mistaken assumption leads to the second criticism, which is that the recommended solutions consist of simply more regulation and a warning not to blindly trust Wall Street.

Progressives need to drop these constant calls to save capitalism. These repeated statements that capitalism can be saved are starting to resemble the plot from “Weekend at Bernie’s.” Let’s just go ahead and acknowledge the demise of capitalism so that we can move on to a better system.

Moneytheism

"No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money.” - Jesus of Nazareth

If you listen to capitalists and their apologists they claim to be the voice of reason while, according to them, those of us on the Left run on passion. But actually it’s the capitalists, especially the current breed who’s been in vogue for the last few decades, who are the ones running on faith.

In his most recent book, No Rising Tide, Joerg Rieger explains that there are several tenants to this bizarre capitalist religion and they are built on blind faith. No amount of rational proof will sway the capitalist from these tenants. According to Rieger those tenants are:

• Economic deregulation always promotes growth,
• Tax cuts for powerful corporations and the wealthy always spur the economy,
• Wealth gathered at the top inevitably trickles down, and
• A rising tide will lift all boats.

The comedian Stephen Colbert hit the nail on the head when he coined the term “Moneytheism” to describe this twisted religion. One must wonder how much longer before people finally wake up and realize that they’ve been duped by false prophets all of this time?

I’ve been lucky to have heard Joerg Rieger speak on several occasions and I highly recommend his new book, No Rising Tide.

The Silver Screen

There already exists many reviews of Michael Moore’s new movie, Capitalism: A Love Story. I would echo the various reviewers who have said that this may be his best movie yet. But what's lost in all of these reviews is that this is more than just a good movie.

In his new movie Moore does the one thing no other popular commentator has been willing to do. He’s willing to go on record and call capitalism an evil that has to be replaced. Most will critique and criticize but then they wimp out saying, “But I still support capitalism.” Moore instead steps up to the plate and tells it like it is.

If that wasn’t enough Moore goes one important step further. At one point in the movie he shows a possible alternative to the corporation. And what do we see? He visits two worker-owned cooperatives!

Finally, Moore ends the movie with a call for the viewer to join him in replacing capitalism with a more just system. Amazingly this call seems to be resonating with the audience for at the showing that I attended half of the theater broke out in applause at the movie’s end.

Some criticize Moore for taking liberties with the facts. Admittedly there are times when the critics are right. In the movie he strongly criticizes the bail out yet all evidence points that this Keynesian action may have indeed pulled the economy out of a nose dive.

Yet Moore provides the style and emotion needed to transmit our message via the mass media. With Capitalism: A Love Story Michael Moore has taken a stand and has joined the call for an economic democracy.

Olbermann on Health Care

There’s a distinct possibility that most of my readers are already aware of this but just on the off chance that some aren’t I thought I would write about it. Most know that one of Keith Olbermann’s claims to fame is his occasional “Special Comment,” which is usually just a few minutes long. Recently, Keith Olbermann gave another Special Comment but this one was very different than his previous. Olbermann’s most recent Special Comment was an hour long commentary on health care in which he destroyed the false arguments against the public option and presented numerous powerful arguments for the need for universal health care.

This Special Comment is one of his best as well as one of his most important. I highly recommend it to both those who support health care reform and to those who oppose it.

MSNBC will replay this Special Comment on October 16th at 8:00 PM ET. It can also be viewed at the MSNBC web site.

Delay

I apologize but due to circumstance beyond my control this week’s blog will be delayed until Friday, October 16th.

Choice?

"Now, if you're one of the tens of millions of Americans who don't currently have health insurance, the second part of this plan will finally offer you quality, affordable choices." President Barack Obama, September 9, 2009, Remarks by the President to a Joint Session of Congress on Health Care.

So here we are at the beginning of autumn and Congress has yet to pass health care reform. To make matters worse the legislation that we’ve been given is the Baucus Bill. While there are numerous problems with the bill I want to center on only two elements: weak, poorly funded health care cooperatives and the lack of a public option.

First, the problems with the provisions relating to health care cooperatives. While I strongly support their creation, which I’ve mentioned previously, the details in this bill will handicap the new co-ops. According to the bill the start-up capital would only be $6 billion, which would be spread among the new co-ops. That’s far too little investment to create the type of co-ops that can challenge the private insurers. Add to this the co-ops will be limited in their scope. Ezra Klein with the Washington Post reports that rather than being able to contract with large employers the co-ops would be limited to contracting only with "small groups and individual markets." Another major flaw in the cooperative provision is that it fails to give the co-ops special pricing power. While they can band together to increase their purchasing power they’re restricted from setting national payment rates. To challenge the big boys these co-ops need this power. As Klein put it, "The insurance industry is, in other words, being protected from not just public competition, but co-op competition." Finally, even if the above flaws are fixed there needs to be a restriction placed on these co-ops that would prevent them from some day demutualizing into private corporations as some co-ops have done in the past.

Second, the Baucus Bill lacks a public option. The poorly funded co-ops, as they would be set up by the Baucus Bill, simply would not be able to reign in the abuses of the private insurers. If we’re not going to properly fund and empower the co-ops where that they’re able to challenge the private insurance companies then why not create a strong public option that could have a real effect on the private insurers?

Let me make my position clear. It’s my belief that quality, affordable health care is a fundamental human right. A sure way to guarantee this right would be through a Single-Payer system operating within a network of private practitioners and community-based, non-profit clinics/ hospitals. But we know that no matter what legislation comes out of Congress this year it will not include this. So whatever legislation that we do get must have the ability to restrict the power of the private insurers and to provide access to quality health care to those who currently don’t. This means that we need legislation that includes either a strong public option or well-funded and powerful health-care cooperatives.

One last comment. I can’t help but wonder why couldn’t a bill include both a strong public option and well-funded, powerful co-ops? What would prevent such a combination? The President said that this legislation will include "quality, affordable choices." Then I say that Congress should give the American people exactly that. Give us the ability to choose either well-funded co-ops with real power or a strong public insurance.