Noam Chomsky recently featured Martin Gilens’s new book AFFLUENCE AND INFLUENCE: Economic Inequality and Political Power in America in his column on AlterNet.org.
As a scholar and a critic David Joselit has worked on transformative moments in modern art ranging from the Dada movement of the early 20th century to the emergence of globalization and new media over the past decade. His forthcoming book is After Art, a look at how art and architecture are changing in the age of Google, and a new way of thinking about art’s circulation and currency. But for Election 101, Joselit talks about art’s political currency, responding to the recent comment made by Mitt Romney’s former partner at Bain, quoted in the New York Times Magazine, to the effect that the epitome of the unproductive citizen is the “art history major”. Read his post here:
When former Mitt Romney employee at Bain capital and author of the notorious apology for enormous income inequality, “Unintended Consequences: Why Everything You’ve Been Told About the Economy is Wrong,” Edward Conard wants to stigmatize those unproductive wimps who don’t know how to take financial risk, he calls them art-history majors. As Adam Davidson reported in the May 1 edition of the New York Times Magazine, this is “his derisive term for pretty much anyone who was lucky enough to be born with the talent and opportunity to join the risk-taking, innovation-hunting mechanism but who chose instead a less competitive life.”
Conard’s choice of art history as opposed to say, English, or Philosophy or French for the most unproductive of majors is not arbitrary. In fact, I would argue that his comment marks a glaring return of the repressed. Everyone in the art world knows that the huge and recession/depression-proof explosion in the art market in the last decades is owed in large part to the vast fortunes, like Conard’s made in finance. Perhaps he doesn’t travel on a private jet to the Art Miami Basel Art Fair to make a few purchases, but many of his class do—and they negotiate their sales with those very same despised art-history majors.
If, as Conard asserts, art (and its histories) lack the capacity of business innovation to build value, why then, does the international financial elite seem to crave—and even need—the kind of value and validation that art does possess? The fact is, even if Conard doesn’t recognize the value of art personally, very many of the financial innovators he lionizes do. To understand why, we need only consider another election strategy on the part of the Republicans. When President Obama began to speak out about the enormous student debt that so many Americans have been saddled with since the economic downturn and the corresponding rise in tuition in both public and private universities, the Republicans accused him of creating a diversion from serious efforts at economic recovery. This is despite the fact that massive student debt is a demonstrable drain on the economy (if you are paying back loans for college you won’t be buying cars and houses). As with the value of art, Republicans don’t want the value of education, or any other cultural currency to be equated with finance currency. This is one of the most important subterranean currents of this election, and it’s nothing new. Ronald Reagan and his radical right supporters understood the value of culture wars thirty years ago during which time they took the National Endowment for the Arts from a broadly innovative—risk-taking institution, to one that was both defanged and defunded. The result is the privatization and enclosure of public museums and other arts organizations, now even more dependent on individual contributions by wealthy trustees—many of whom belong to the financial elite of which Conard is the would-be spokesmen. No wonder he hasn’t noticed any risk-taking art history majors!
Let me put it bluntly, the 1% (and particularly those Republicans among it) know the value of art and an elite college education very well—and, like so many other things, they want to keep it for themselves by seeking to limit access to these benefits to a broader public, reserving them for the very few.
David Joselit is the Carnegie Professor of the History of Art at Yale University. His books include American Art Since 1945 (Thames & Hudson) and Feedback: Television against Democracy.
Geoff Mulgan is Chief Executive of the National Endowment for Science Technology and the Arts (NESTA) and Visiting Professor at University College, London, the London School of Economics, and the University of Melbourne. He is a member of our European advisory board and author of the forthcoming The Locust and the Bee, which offers the key to understanding capitalism: Why it works, why it falls into crisis, and why it generates such anger and resentment. According to Mulgan, the capitalism that has made our nation wealthy has entered a new and harder phase that the candidates now struggle to address. Read his assessment of the situation after the jump:
Election 2012 and the Challenge of Capitalism
Four years ago Barack Obama’s election was an ominous contradiction. It scaled the heights of exhilaration and hope. But it also plumbed the depths of bad luck, coming amidst the worst crisis in several generations. Over the succeeding months the contradiction then deepened, as an immensely clever, pragmatic moderate found himself face to face with an extreme situation demanding extreme measures.
Once installed the money flowed; vast sums bailed out Wall Street; and the worst possibilities didn’t materialise. But four years on it seems almost impossible for the candidates to persuade voters that they are simultaneously in tune with their lives and their values, and possessed of the key to a brighter future.
Instead all the candidates are struggling. The fire and fury on Tea Party issues and Obamacare seem like symptoms of a deeper, unspoken malaise. From afar it looks as if none of the candidates wants to face up to the big issues – the continued decline of US influence, the scale of its fiscal crisis, and above all its failure to offer opportunities and growth to the majority of its citizens.
The US is not alone in this respect. Nowhere has a post-crash politics yet crystallised. Everywhere the left still promises more debt, more education, more infrastructure and more science, while the right still promises that growth will come from scaling government back. Neither side has come to terms with the bigger problem now faced in all developed societies. The capitalism that made them wealthy has entered a new and harder phase. For the first few decades after 1945 it provided not only jobs but also rising wages, and rising standards of living for the great majority. Now it appears to benefit only the very top layer of society, but does little or anything for the middle or bottom. The result is a hollowing out of the economy that is visible everywhere, including the statistics showing that US median earnings appear to be continuing their long stagnation and even decline.
You might have expected politics to change, as it did in previous periods when capitalism’s operating model for a time produced more losers than winners. But we’re still in a transitional moment. For a start the 1% provide a high proportion of the cash for running campaigns and can’t easily be faced down. Then there’s the uncertainty over who to trust. In his first period in office Barack Obama put his trust in insiders to guide the perilous decisions over who to bail out and how. Given the scale of the crisis and his own inexperience it’s understandable that he thought bankers might be best placed to understand how to solve problems caused by bankers. But in retrospect he was far too soft on Wall street and far too influenced by its alumni; a little bit more of the spirit of FDR, who surrounded himself with a group of radical outsiders, might have paid off by now.
The deeper structural problem is also one that’s becoming more visible. Finance has become as much a predator on the rest of the economy as a source of wealth. It circulates money, but doesn’t actually do much to provide investment in new ideas, technologies or firms, despite soaking up a much larger share of GDP than in previous decades. None of the major financial markets plays any serious role in investing in future products and services. Venture capital has almost opted out – even at the beginning of the 2000s it was only providing 2% of investment in innovation and now the figure is even smaller. Meanwhile big firms are now sitting on unprecedentedly large cash piles rather than investing it in new ideas, and even the highest tech have chosen share buybacks over investment.
In my book I show that these are symptoms of what has always been the challenge of capitalism – it can be immensely productive, good at rewarding inventors and entrepreneurs. But it has always also rewarded predators, speculators and non-productive activity. Adam Smith saw this all too clearly. And for much of the last 150 years legislators and governments have tried to rein in the predators and give more encouragement to the creators. Over the last generation they lost the will to do this, and were much more likely to end up fawning over billionaires than challenging their wealth and power.
To fix the imbalances and flaws radical new settlements will be needed, that will involve rethinking how we create wealth, what we value, and how we use wealth. These settlements will have to reshape capital markets to more directly serve the public interest rather than predation; they’ll have to reshape welfare and education to promote resilience and self-reliance; and they’ll have to recast health not just as a right but as a public good that depends for its realisation as much on the individual and their circles of support as it does on the state or the medical profession. Some countries are now well down the road of reimagining their social contracts, and shaping a capitalism that can serve the many not just the few. But Obama’ misfortune may have been to be elected a couple of terms too early, before the landscape is ready.
Some Presidential elections in retrospect made the weather and set the nation on a decisive course. Others were, in the bigger scheme of things, beside the point. It’s not too late for this one to get real. But the odds are lengthening.
Diane Coyle runs Enlightenment Economics, a consulting firm specializing in technology and globalization, and is the author of a number of books on economics, including The Soulful Science (Princeton), Sex, Drugs and Economics, and The Weightless World. A vice-chair of the BBC Trust and a visiting professor at the University of Manchester, she has a new paperback coming out this Fall called The Economics of Enough: How to Run the Economy as if the Future Matters. Read on for her thoughts on why, like many long-term and difficult challenges, the creation of a sustainable economy is an issue unlikely to be embraced as a campaign issue:
“Will you still need me, will you still feed me, when I’m 64?” sang The Beatles. Paul McCartney wrote these lyrics in 1967 when he was 25, a member of the post war baby boom generation. This lucky generation has enjoyed the expansion of education, the golden age of economic growth, rising house prices, and generous healthcare and pension support from the government if they need it. So the majority of them are doing just fine at 64.
Later generations will not be so lucky. The United States population is aging quickly now. The number of people of 65 and over was 35.5 million in 2000 and will be 69.4 million in 20.30. Every retiree was supported by 16.5 workers in 1950, 3.4 in 2000 – and probably just 2 in 2030, when the last of the baby boomers is due to retire.
What does this have to do with the 2012 Presidential election? The government’s fiscal deficit is far worse than everybody thinks. To pay for current benefits for tomorrow’s pensioners would require an increase of about a third in the employee Social Security payroll tax, according to economists Laurence J Kotlikoff and Scott Burns. Yet of course no candidate will campaign on a platform of raising taxes so much, or alternatively cutting back benefits for seniors like Social Security and Medicaid.
So unfortunately the answer is that the demographic burden has nothing to do with the election campaign. Neither do other difficult long-term challenges, including the depletion of natural resources and energy, resolving the financial crisis that has dragged on for four years, and recreating the prospect of economic opportunity for the middle class. Not one of these (which I wrote about in The Economics of Enough) will make it as an election issue. But that will not make them go away.
The candidates do not believe they can debate these issues in public. But the public knows the economy faces serious long-term challenges with no quick fixes. Hence the steep decline in the trust Americans place in political institutions, including Congress and the media. The people have lost respect for politics and politicians in all the western democracies, not just the US. This year’s US campaign looks like it is going to get exactly the reaction it deserves from the people.
The economy seems to be weakening, and Republicans are eager to blame Obama. This is by-the-books political messaging: the party opposing the incumbent president should talk about the economy when its weak. But the success of the attack, as Steve Kornacki notes, may depend on whether Obama really gets the blame for the weak economy.
To this point, more Americans have blamed George W. Bush, during whose tenure the recession and financial crisis began, than Barack Obama. This was true in a series of Gallup polls between July 2009 and September 2011. For example, in September 2011 69% said Bush deserved “a great deal” or “a moderate amount” of blame. Just over half (53%) said that of Obama. In a more recent poll, conducted by the Washington Post in January 2011, respondents were given the option of choosing whether Obama or Bush was “most responsible for the country’s economic problems.” Many more chose Bush (54%) than Obama (29%).
New data from an April 14-17 YouGov poll confirms that Obama is still winning the blame game.
As the graph shows, 56% gave Bush a great deal or a lot of the blame, while only 41% gave Obama that much blame. This 15-point gap is nearly identical to what Gallup found in September, albeit with a differently worded question and response categories. Looked at a different way, 47% of voters blamed Bush more than Obama, 21% blamed them equally, and 32% blamed Obama more than Bush.
Naturally, Democrats and Republicans do not see eye-to-eye on the question of blame:
The vast majority of Democrats (80%) blame Bush, while large numbers of Republicans (83%) blame Obama. The partisan bias isn’t quite symmetric, as there are more Republicans who blame Bush (24%) than Democrats who blame Obama (12%). Pure independents, those with no leaning toward either party, tend to blame Bush more than Obama.
This tendency to blame the previous incumbent more than the current one is nothing new. The same was true when Bush himself was president. Early in Bush’s first term, from March through November 2001, the country also experienced a recession. Because the recession came so early in Bush’s term, and because the economic slowdown had begun late in Clinton’s second term, there was debate about who to blame.
Two different polls — by the Washington Post in February 2002 and by Princeton Survey Research Associates in May 2003 — showed that, in fact, Clinton was blamed more than Bush. In the Post poll, 78% of pure independents thought that the economy was “not so good” or “poor.” Among this subset of independents with a negative view of the economy, 69% believed Clinton deserved “a great deal” or “a fair amount” of blame, but only 48% believed this of Bush. Similarly, among the minority who thought the economy was doing well, more credited Bush than Clinton. In the PSRA poll, 30% of independents thought Clinton deserved “most” or “a lot” of blame while 22% thought Bush did. Even though Bush, like Obama now, was well into his first term, these voters still saw the prior president as more responsible for the country’s economic problems.
The ultimate question for Obama is: could some voters’ willingness to blame Bush more than Obama actually help him win reelection? Here is one way to answer this question. Take the difference between how much blame voters assign to Obama and Bush. This serves as a measure of Obama’s blame advantage or disadvantage relative to Bush (where, as noted above, Obama has a net advantage). Using that measure — as well as other relevant factors, including party identification, ideology, sex, race, and income — predict how much people approve of the job Obama is doing as president and whether they would vote for him and not Romney.
Then “erase” any blame advantage for either Bush or Obama, which assumes a world in each every person blamed Bush and Obama equally. What would happen in this world? First, Obama’s job approval would decline by about 11 points. Second, his poll standing relative to Romney’s would decline by 3 points. Both of these declines are statistically significant and substantively important.
To be sure, this exercise is purely hypothetical. Life isn’t a laboratory, and we can’t replay Obama’s first 3 years and have voters blame him less or more than they do in reality. Nevertheless, Obama’s lead in the blame game appears to be helping him in the horserace.
Teresa Ghilarducci, author of When I’m 64, writes that states should expand public pension programs in the NY Times
Writing in response to the NY State Legislature’s recent move to limit pensions for future public employees, PUP author Teresa Ghilarducci writes in the NY Times “Don’t Cut Pensions, Expand Them”: http://www.nytimes.com/2012/03/16/opinion/pension-funds-for-the-public.html.
Rather than curtailing public and private pensions, New York and other states could save millions of workers from impending poverty by creating public pensions for everyone.
While the recession bears some blame for the looming retirement crisis, experts agree that the primary cause is more fundamental: Most workers do not have retirement accounts at work. Over half of the workers in New York State, more than four million people in 2010, do not participate in retirement plans with their current employers, while over half of American workers do not have pension plans at work.
For years Teresa has been making the case that there should be a new savings platform for American workers. In her book When I’m 64 she described Guaranteed Retirement Accounts–publicly managed retirement savings accounts funded by money from employees and employers. In the article, she explains why public pension plans not only provide greater coverage, but also greater benefits and security:
The benefits of public pension plans: usually outperform 401(k) plans and individual retirement accounts: large institutional plans pool workers of all ages, diversify the portfolio over longer time periods, use the best professional managers that aren’t available for retail accounts and have the bargaining power to lower fees and prioritize long-term investment.
The best part she saves for last: “since these plans would be financed by workers and their employers, there would be no cost to taxpayers.”
Sounds too good to be true, right? Well, Ghilarducci writes that some of these ideas are already becoming a reality in California where “California State Senator Kevin De León and Darrell Steinberg, the Senate president pro tempore, introduced legislation that would allow private-sector workers in California to enroll in a modest, state-operated retirement program financed by the workers and their employers — at virtually no cost to taxpayers.”
She also notes that John Liu in his recent State of the State address called for a similar program to head off a looming retirement crisis.
To learn more about the complete picture of retirement savings plans, start by reading Ghilarducci’s book When I’m 64.