Sunday, September 23, 2012

Entitlements II


Again, a relocation.  The seasons change and we push off for St. Petersburg shortly.  A productive summer behind us in the Granite State.

A month or so ago an old friend, a veteran CIA functionary still hard at work attempting to present the Agency with a human face, responded to one of my speculations about the frightening shift of wealth in this democracy into the hands of fewer and fewer, while larger numbers every month are sliding into dependency, with her own conclusion that the deficit would kill us.  We were about to degenerate into another Greece.

I fear it could turn out a lot worse.  We could be moving into the middle years of the Weimar Republic.  Even as a high-school student I was absorbed in German language and literature, and kept it going through college, where I spent a lot of time contemplating the cultural convulsion the Nazis brought to what had become the center of European civilization.  After that I spent something over a year supported by a Fulbright grant in Freiburg im Breisgau, in the Black Forest;  one of my teachers there was the existential philosopher Martin Heidegger, the rector during the late thirties and himself a Nazi convert.  I lived with several German families, in one of which the father had been forced into the Party to save his job and fought in both World Wars.

This was in 1955-1956.  Several neighborhoods in Freiburg were still rubble.  What came through, month after month, was the extent to which the economic horrors of the twenties had effectively liquidated the middle class in a country long regarded as the most enlightened in Europe.  Allied reparations demands imposed by the Treaty of Versailles had induced Hjalmar Schacht, whose answer to the occupation of the Saarland, when payments were not paid in time, was to so inflate the currency that it was effectively destroyed.  It took a billion Marks to mail a letter.  The savings of middle-class families which had lived comfortably for hundreds of years vaporized.  In response radical parties of the left and right formed militias and terrorized the streets.  Communists occupied Berlin and Munich; alarmed onlookers from the major industrialists to the Vatican treasury subsidized the Brownshirts.  British and American bankers -- among them Prescott Bush, father and grandfather of two U.S. presidents -- made their fortunes pushing bond offerings Hitler would ultimately repudiate -- see my book The Old Boys for details.  The result by the middle of the forties was utter devastation of the German heartland and the extermination of close to an entire generation of German men, along with many tens of millions of Russians and Poles and Jews.

In our time, the equivalent of the unrealistic reparations demands may turn out to be the swelling deficit.  Like global warming, the implications of too much debt are insidious.  Technology and off-shoring and no-interest bank accounts are swiftly eroding the faltering middle class. We can deal with it, or in the end it will deal with us.  Everybody will have to give up quite a bit, from our avaricious billionaires to food stamp addicts.  If we don't face up to what is happening before long, and act, what portends for Greece may look like a vacation.

If that doesn't buck you up, wait until I get to Florida.

Burton Hersh

Wednesday, September 12, 2012



Greetings, a few days belated.  As fellow members of the property-owning class, I felt that you all might appreciate the chance to share my current take on the politics of jobs and taxes.  Accordingly....

Some of the most anguished sounds, the most heartfelt wails of outrage, emerging from the Tea Party stalwarts these days, arise from the fear that the Obama government has become the instrument of redistribution, of taking from the deserving opulent and scattering the wealth of the Republic at the feet of the demanding poor.  The "I did it" crowd, home safe after cashing this month's trust fund check, fears those insatiate populists out there, those would-be Socialists, the rabble determined to take away everything that grandfather accumulated for them.

It would be hard to imagine an apprehension less grounded in reality.  One thing that some of our more astute commentators have started to pick up on is the extent to which the current, painfully slow recovery is the result of onsetting technological changes.  In the July 23 issue of TIME, the ever perceptive Fareed Zakaria notes that, after each recent recession, the rebound has been slower and slower no matter which party is in charge.  He anticipates that "it may take about 60 months -- five years! -- for unemployment to return to pre-recession levels...."  He attributes this to "world globalization and the information revolution...."  Fareed -- always diplomatic -- is talking about outsourcing and computerization, both of which have a way of relocating those precious jobs either in the Third World or perhaps in The Cloud.  Either way, nobody you know is going back on any payroll in any hurry.

Much of the slack all this off-shoring and robotization produce is taken up by those deplorable government programs so resented by the right.  Businessmen have the right to fire people, a particular source of delight to Candidate Romney, but why should anybody's taxes subsidize the months these dead-beats waste on unemployment before they find themselves another job?  Other programs are equally deplorable.  Food stamps -- what a waste.

Recently I have discovered that the younger generation in a number of families like mine -- well-educated, of considerable social status throughout recent generations, youngsters likely to have graduated from good colleges and eager to work -- are now food-assistance  -- "food-stamp" -- recipients.  Some are in graduate school; others, especially single mothers, do have jobs, in industries like fast food and eldercare, that pay so poorly, rarely more than the $7-plus minimum wage, that to eat regularly they are dependent on food assistance and whatever additional help state or federal auspices can provide.

Now, step back.  What is really going on is that gigantic American corporations -- read McDonalds here, but there are innumerable others -- which hire these desperate souls by the millions in the midst of a faltering economy, are pumping up their own bottom lines by enlisting government to subsidize their balance sheets and pick up the minimum living costs for underremunerated employees.  The redistribution here is plain enough --  from government to corporations.  After which the radically overcompensated senior executives can be expected to complain day and night about the corrupting "nanny-state."

I could go on.  And I will -- next time.  We have a federal budget that now runs well over a thousand pages, every lobbiest-ridden line of which authorizes somebody some kind of deduction or carve-out or depletion allowance or matching governmental grant.  It will demand simplification, sooner rather than later if this economy  -- this political system! -- is to survive.  The first step is going to be a frank look at who really benefits, and who suffers, and what we can do about all of it.


Burton Hersh