UP@NIGHT

One doesn’t need a Ph.D. in economics to know certain facts about the current state of America’s economy:

1) Unemployment continues to be a serious problem not only for the unemployed but for the economy as a whole.

2) Consumers are skittish about spending money, so they can’t help drive an economic recovery.

3) In response to fears about unemployment and the economy, consumers are paying off debt.

4) Reducing debt may be a a good thing for individuals and for the economy in the long-term, but when too many people do it all at once it leads to less goods and services being bought, which reinforces and helps sustain a recession or a weak recovery.

5) Many of the largest corporations in America are sitting on huge sums of cash.  Among the reasons for not investing it and hiring new employees:  aversion to risk, preoccupation with the current bottom line, and hefty profits through making current employees more productive, that is, making them work longer and harder.

Enter the Bank of America.  You know, the corporation that American taxpayers shelled out 45 billion dollars to rescue.  Its past and current behavior exemplifies the failings of many giant corporations to do the right thing in national crises.   Make no mistake about it, the way that the Bank of America mistreats its customers is bound to reinforce exactly the types of behavior that will maintain the economy in its present anemic state.

Let’s take the story back a few years.  It seems that for several years the Bank of America has been arbitrarily raising interest rates on its credit card customers.  Here is an excerpt from an article on MSN from BusinessWeek, February 2008.

Credit card issuers have drawn fire for jacking up interest rates on cardholders who aren’t behind on payments but whose credit scores have fallen for other reasons. Now, some consumers complain, Bank of America is increasing rates based on no apparent deterioration in their credit scores at all. The major credit card lender in mid-January sent letters notifying some responsible cardholders that it would more than double their rates to as high as 28%, without giving explanations for the increases, according to copies of five letters obtained by BusinessWeek. Fine print at the end of the letter — headed “Important Amendment to Your Credit Card Agreement” –- advised calling an 800-number for the reason, but consumers who called say they were unable to get a clear answer. “No one could give me an explanation,” says Eric Fresch, a Huron, Ohio, engineer who is on time with his Bank of America card payments and knows of no decline in the status of his overall credit….But Bank of America appears to be taking an even more aggressive stance because, beyond credit scores, it is using internal criteria that aren’t available to consumers. That makes the reasons for the rate increases even more opaque….Analysts also say they are surprised by the magnitude of the rate increases Bank of America is imposing on affected cardholders.

You can find stories all over the web about Bank of America’s bad behavior regarding its credit card customers.  Recently it appears that BofA has accelerated the use of one of its strategies: arbitrarily reducing the credit limit of customers who have very good credit histories, pay on time, and pay more than the minimum.   The deal goes like this:  You borrow an amount from BofA at a good interest rate.  After a few months you get a call.  You are told that your credit limit is being reduced to almost exactly what you owe.  When you ask for an explanation, you are given transparently bogus reasons.   And there is no appealing the reduction.  This action is unfair to credit card customers because it can adversely affect credit scores.  Consumers now appear to be maxed out on their cards when 24 hours earlier they had a nice cushion.   A lawyer in California became so incensed about this practice and arbitrary increases in interest rates that he threatened to sue the BofA.  The story can be found in the Huffington Post, January 2010.   An excerpt:

“Banks have done really well figuring out ways to screw people without making themselves legally liable,” said Ira Rheingold, director of the National Association of Consumer Advocates. “I think [the limit reduction] is another example of Bank of America’s venality. Whether or not it’s a successful lawsuit, I don’t know. Whether I think it ought to be challenged — absolutely.”

But maybe Bank of America is just trying to do what is best for its shareholders.  That’s often what you hear when companies are challenged about their executives’ pay or other practices.  Yet BofA doesn’t seem too keen on giving its shareholders a say in the pay of its executives.  For example, a Los Angeles Times headline on February 23, 2010 announced:

Bank of America resisting shareholders on executive pay. . . The bank is working to keep investor proposals on executive compensation off the ballot.

The machinations of BofA are sad stuff.  The resulting likely behavior from customers with reduced credit lines: pay off debt more quickly and spend less money in the marketplace.  Of course this will only help to extend the anemic recovery.   The fact is that the actions of leading banks and corporations have often not been good for the economy.  They rant and rave about taxes and the federal government, but it’s a shell game.   (Banks and their supporters will tell you that the reason they are not loaning is because of federal regulations.  BofA is currently sitting on 172 billion in cash.)  The intense preoccupation of corporations with the bottom line (and the well-being of their executives) has left millions of Americans un- or underemployed.   The way that credit has been handled, for example, has increased the fear that we will never come out of this downturn, which will only help to prolong it.

Socialism is no threat.   Corporations only looking to the bottom line, which in times such as these is downright unpatriotic, are a threat.  It’s time for companies that have done so well in America to stand up and sacrifice for America.  We are not asking you to become charities, although you were willing to take our charity when you needed it.  We are asking you to spend some money, damn it, and put people back to work, even if it’s not the absolutely best thing for your corporation’s current bottom line….and stop harassing responsible citizens while you do it.

Oh, and just in case you might be worried about the well-being of the former Chairman of BofAm, Ken Lewis, here is what ABC news reported regarding his retirement pay in 2009.

Outgoing Bank of America CEO Ken Lewis’ nearly $64 million retirement pay puts him ahead of most, though not all, fellow major bank CEOs who have left their institutions during the financial tumult of the last two years.

I usually drive to work along the Hudson River.  It’s a nice drive.  Beautiful old buildings to my left and the Hudson on the right.   But today I took the bus through the city.

In northern Manhattan there was a man, an African American man, dressed in a manner that clearly identified him as a Muslim, trying to cross the street after the bus passed.  I reacted.  “What a brave man to announce his religious affiliation in this manner.”  I was horrified.  My immediate reaction was to fear for his safety because people would know his religion.  I didn’t have time to consider, “Have we really come to this?” before the bus drove by the mural reproduced above.  (Photographed with an iPhone.)  It appears to have been painted around the time of 9/11 or shortly thereafter.  (The bottom third is certainly more recent.)  It speaks of unity.  The unity of New Yorkers.  The unity of Americans.  Of all Americans.

I now hear that there is preacher who wants to burn Korans to make a statement.  To show the world that we aren’t going to let Muslims get away with…with who knows what.  Political figures, such as Newt Gingrich (a man with a Ph.D.), are making frightening and spurious claims about Muslims.  There is no doubt: the sickness that is religious prejudice is infecting America, making a sham of the most cherished values of this nation.  And yes, I am well aware that we have not always lived up to these values.  But to see how far we have sunk in nine short years leaves one breathless.   The 9/11 terrorists would be laughing in their graves, if they had them, for what they have managed to do to us.  We have come to fear fellow Americans for no other reason than that they profess to be Muslims.  And if you think that this is not due to base prejudice and fear, consider how many Americans started to assail white (former?) Christian males after Timothy McVeigh slaughtered 168 adults and children in Oklahoma City.  (Or perhaps a better analogy: suppose an all white anti-government militant group, identifying itself as Christian, blew up the Washington Monument and the White House.  Would white Christians then be treated as suspect?)

America is in bad shape economically.  We have suffered through years of wasteful war.  But we have come through hard times before.   Let’s hope we can do so this time without condemning the innocent.

Nostradamus meets the Grim Reaper

…

This is an actual headline from an article posted on Bloomberg (News) at 7:21 this evening, September 1st, 2010: Economy Avoids Recession Relapse as Data Can’t Get Much Worse

The first lines of the article explain:

The U.S. economy is so bad that the chance of avoiding a double dip back into recession may actually be pretty good. The sectors of the economy that traditionally drive it into recession are already so depressed it’s difficult to see them getting a lot worse, said Ethan Harris, head of developed markets economics research at BofA Merrill Lynch Global Research in New York. Inventories are near record lows in proportion to sales, residential construction is less than half the level of the housing boom and vehicle sales are more than 40 percent below five years ago.

This is not from a skit on Stewart of Colbert.  This is from a leading publication on business on a day that the Stock Market rallied.   (I wonder what they will be writing when it retreats, again.)  So, let’s get this straight.  We are not going to have another recession, the dreaded double-dip, because things are already too bad to have one.   How then do we characterize our current economy?   Oh, I could think of a few words, but so can you, dear reader.

Things can get worse.  Here’s the ticket: The Republicans win the House this fall and things completely stall out as the GOP offers (once again) the panacea of tax breaks for the wealthy as the cure for our economic ills.

(Btw, the name of the person featured on this $10,000 bill is Salmon P. Chase.  If you don’t believe me, click here.  He was a Secretary of the Treasury and a Chief Justice of the Supreme Court.  Coincidence.  I think not.)

The manner in which FOX has been stirring up hatred, yes hatred, against Muslims in his country is appalling.  They have done so through mind numbing lies and innuendo.  This clip from The Daily Show is one of the most cogent and funniest send ups of FOX I have seen to date.  Enjoy.  (Give Jon a few minutes to get really going.)

…………..Mad Men Casting Contest………………………………..The Wire (Wikipedia)………..

Tonight Mad Men returns.  I liked the show.  I liked it before it became popular.   (It’s not The Wire, but then, hey, what is, except The Wire.)

But now I fear for the youth of the country.  The photo on the left–which I believe I have legally downloaded from the Mad Men web site since it is an advertising gimmick, which is in itself pretty funny–says it all.  You can be in this photo.  And it seems that many people would very much like to be in it, at least judging by the Mad Men mania among the young, many of whom collected in Times Square tonight dressed in period costume.  The photo on the right is of a group of characters from The Wire, a show that struggled to stay on the air.  (Its last season overlapped with the first season of Mad Men.)  It never found a large following in its five seasons, although today it is considered by many critics and viewers to be the finest TV series ever produced.  It is set in present-day Baltimore and one of the things that it is about is how America is broken.  It is highly unlikely that The Wire could have advertised itself by holding a contest that says, you can be in this photo.

Mad Men is great fun.  The acting, the clothing, the furniture, the nicknacks, and that wonderful lighting.   And of course the show is dutifully critical of aspects of the period that it portrays.  As a matter of fact, the narrative arc was apparently meant to swing from the uptight and hypocritical 1950′s to the liberation of the ’60′s.  But something perverse seems to have happened or be happening.  In our dark economic times the atmosphere and staging of the show are becoming the message.  And this message seems to be: it’s kind of okay to forget about how awful and repressive the 1950′s and early 60′s were if its artifacts provide the fantasy or eye candy that we need in order to escape from our own times.  I know, you are going to say that I am going too far.  It’s not the TV show’s fault if it’s seductively adorned.

A short personal sidebar.   I was a child in the 1950′s and a young adolescent in the early 1960′s, yet I can still feel the claustrophobia of the period.  I can tell you that offices were rarely glamorous.  They were enclaves of sexism and repression.  I remember working in one as a mailboy in my teens.  Men were stuffed into cubicles or small offices.  Women worked in outer areas as secretaries–a version of what you see in Mad Men.  The hierarchy was fixed.  I can swear that the men spent half their time either making passes at the secretaries or making juvenile sexual jokes about them, which were not much different from what I heard in the high school locker room.  If I were a girl at the time, I would have said “ick.”  (Of course, I couldn’t actually say, “ick,” or I would have been seen as a sissy.)  What about the clothing, you ask.  Let me tell you, when you actually had to wear this sort of clothing day in and day out or be ostracized for not wearing it, it wasn’t any fun.  (I had to wear skinny ties in a public school until the late 1960′s.)

Perhaps I am getting worked up over nothing.  After all doesn’t the show’s creator, Matthew Weiner, feel much as I do about the period?  But I am not the first to suggest that Weiner may be conflicted regarding his own creation.  (See Natasha Simons.)   The period is romanticized even as it is criticized.  Let’s be clear, the romance is a mistake.  The period was so bad that if I invented a time machine I would make sure that it would self-destruct before it could take anyone back into it.  From this perspective, the Mad Men contest photo does not appear innocuous.  It’s not simply suggesting: wouldn’t it be fun to be on a TV show.  It’s suggesting: wouldn’t it be a blast to be back in that time, when, to paraphrase Ogden Nash, candy was dandy but liquor was quicker.

This season Mad Men will present us with the trials and tribulations of a bunch of middle class folks struggling to build their own business in a day when the economy was still booming.  Escapism surely has its place.  But as we enjoy the accouterments of the characters’ life styles, I wonder how much time we will spend focusing on how far their world actually is from ours.  Which brings me back to The Wire, in which the drug of choice is heroin, not liquor, and upward mobility is not about getting a corner office but avoiding the coroner.  We don’t really want to watch The Wire.  It presents a political and economic system that is ill-equipped to grapple with depth of the corruption that plagues various strata in our society.  It doesn’t provide any eye candy and it certainly doesn’t hold out the hope of a world in which our homes and offices are bathed in sunlight.  If you are going to watch the fourth season of Mad Men, and you haven’t seen The Wire, it might be an interesting experiment to view them together.

……Cadillac (1960), Winchester, Virginia, June 2010……       Ubik, first hardcover.

In his novel Ubik, Philip K. Dick imagines a world in which corporations employ telepaths to undermine the interests of their competitors.  In turn, the competition hires firms with anti-telepaths in order to defend themselves against their adversaries and protect their privacy.  Dick is having a good time.  The use of psychic powers by companies merely mimics the dirty tricks employed by current corporate spies.  It’s still chess whether played in two or three dimensions.  New frontiers, same games.  (The best science fiction always makes the implicit present explicit.)

It seems that we face the world of Ubik today but on an even more personal level.  The World Wide Web is a marvelous thing.  But it doesn’t forget.  If you say something you might regret or post an unflattering picture, it is caught by the Web and freeze dried.  Employers, friends, strangers, those wishing you ill, or old-fashioned voyeurs will have you under their gaze with the click of a mouse for the foreseeable future.   It’s hard living in a Facebook culture when we can’t always control how we appear.  Different sorts of answers to this dilemma have been proposed.  Some legal: prevent the firing of employees based on information that does not reveal illegal activity.  Some technological: posts that automatically self-destruct after a number of months or years.  Some positively Dickean:  neutralize those who would do you harm by hiring a company to transform your presence on the Web.  Here is how the latter strategy is explained in a current New York Times Magazine article by Jeffrey Rosen, “The Web Means the End of Forgetting.” (Catch the name of the company below, ReputationDefender.  Dick might have called the company PsycheDefender.)

[W]ith the help of the kind of search-optimization technology that businesses use to raise their Google profiles, ReputationDefender can bombard the Web with positive or neutral information about its customers, either creating new Web pages or by multiplying links to existing ones to ensure they show up at the top of any Google search. (Services begin from $10 a month to $1,000 a year; for challenging cases, the price can rise into the tens of thousands.) By automatically raising the Google ranks of the positive links, ReputationDefender pushes the negative links to the back pages of a Google search, where they’re harder to find.

Perhaps this is akin to how the anti-telepaths worked in Dick’s novel.  But Dick’s concerns were not just with corporate dirty tricks.  The issues were deeper.  If one is always being watched, tracked in some fashion, defined by the gaze of others who one does not control, how does one become a person?  Being a person involves the possibility of changing the course of one’s life, of making choices to be (somewhat) different from how one has been.  The Web presents a real danger.   We can find ourselves permanently defined by past words and deeds, some from the long past.  Americans have always been especially attuned to the idea that we could remake ourselves, change our lives, start all over again, perhaps by going West.  But the Frontier option is no longer available, according to Rosen.

In the 20th century, however, the ideal of the self-made man came under siege. The end of the Western frontier led to worries that Americans could no longer seek a fresh start and leave their past behind, a kind of reinvention associated with the phrase “G.T.T.,” or “Gone to Texas.” But the dawning of the Internet age promised to resurrect the ideal of what the psychiatrist Robert Jay Lifton has called the “protean self.” If you couldn’t flee to Texas, you could always seek out a new chat room and create a new screen name. For some technology enthusiasts, the Web was supposed to be the second flowering of the open frontier, and the ability to segment our identities with an endless supply of pseudonyms, avatars and categories of friendship was supposed to let people present different sides of their personalities in different contexts. What seemed within our grasp was a power that only Proteus possessed: namely, perfect control over our shifting identities.

But the hope that we could carefully control how others view us in different contexts has proved to be another myth. As social-networking sites expanded, it was no longer quite so easy to have segmented identities: now that so many people use a single platform to post constant status updates and photos about their private and public activities, the idea of a home self, a work self, a family self and a high-school-friends self has become increasingly untenable. In fact, the attempt to maintain different selves often arouses suspicion. Moreover, far from giving us a new sense of control over the face we present to the world, the Internet is shackling us to everything that we have ever said, or that anyone has said about us, making the possibility of digital self-reinvention seem like an ideal from a distant era.

One crucial point that the article does not address is that we appear to be shackling ourselves to a digital past at a time when real income for most Americans simply hasn’t been rising in line with the American Dream.  We believed, and were led to believe, that economic progress would provide us with opportunities in which we could realize ourselves in new and different ways.  The objects of our material desires, like the Cadillac pictured above, were objects that allowed our fantasies to play out.  If I buy one of those, I can be like those who own them.  If I buy this, and this, and this….I will be different.  I will be free.  Free of my past.  Free of the past.

But now that the party appears to be over, the new technology of the Internet has stepped in.  Give me an avatar and freedom will ring.  Yet the Web may have as many bobby traps in store for us as the unfettered materialism of the go go economy myth.  Unless of course we can call on a new company, ReputationCreators, that will give us whatever persona we would like.   The catch…for a price that many of us won’t be able to pay.

There is jabbering from the right.  There is remorse on the left.   Too much change.  Too little change.   But the promise was, change we can believe in.

Since the days of the Federalists and Anti-Federalists our Republic has always been, more or less, a house divided, and it will continue to be so for the foreseeable future.  Even wars don’t typically unite us.  To move the nation often requires an economic crisis, and then we argue about how to respond.  What then is a politician to do if he or she believes that change is necessary, for example, in health care?  Move too far to the right or left at any given time–unless there is a grave crisis, for example, the Depression–and your legislation is unlikely to make it through Congress or face repeal down the road.  And even if it isn’t repealed, there is the risk that it will not generate enough support to move the legislation off the books and into the real world.

When Obama said that he offered change that we can believe in, most on the right and left took him to mean change that was so different, we could believe in it.  The argument seemed to be about whether we wanted dramatic change.   But this is not what someone with his temperament and political philosophy would emphasize.  It wasn’t the dramatic nature of the change that we were being asked to believe in, but its staying power, its resiliency, its endurance.

Am I pleased with all of the moves that Obama has made.  No.  Do I think that he has gone back on his campaign pledge?  Hardly.   What he asked us, and is asking us, to believe in is legislation that will stick, in policies that will have staying power, ones that will take root over time and lead to other changes.   But this is the route of the sell out, those on the left say.  Of one who has given up on principles.  No.  It is a reasonable way of trying to get as much of the cake as possible given the nature of our political and economic system, which is not changing in a fundamental way any time soon.  Of course those on the left may disagree about how much of the cake might be acquired.   This, however, is a debate about the possible, which is just how Obama approaches these matters.  In this regard, the slogan was always there for all to see.   Come the next presidential election I don’t doubt that one of Obama’s major themes will be:  I brought you change that was positive and sustainable.   (If you think it is a weak message, I ask you to consider how many “mainstream” Republican politicians are furious about health care.  I submit that one reason, and a big one, is that they know his plan can stick and it will be a game changer, and not a good one for them over time.)

In the New York Times on Sunday, January 24, 2010, Thomas Friedman writes in his piece, “More (Steve) Jobs, Jobs, Jobs, Jobs,” about programs that can be helpful in getting the economy moving.  For example,

Obama should make the centerpiece of his presidency mobilizing a million new start-up companies that won’t just give us temporary highway jobs, but lasting good jobs that keep America on the cutting edge. The best way to counter the Tea Party movement, which is all about stopping things, is with an Innovation Movement, which is all about starting things.

Fine.  Let’s support programs that can provide education and opportunity.  But Friedman also gives the president some advice.

Well, here’s my free advice to Obama, post-Massachusetts. If you think that the right response is to unleash a populist backlash against bankers, you’re wrong. Please, please re-regulate the banks in a smart way. But remember: in the long run, Americans don’t rally to angry politicians. They do not bring out the best in us. We rally to inspirational, hopeful ones. They bring out the best in us. And right now we need to be at our best.

This is a bad piece of political advice.  It pretends that one can decontextualize a politician’s responses and hides behind the phrase “in the long run” in order to do so.  President Franklin Roosevelt sounded pretty angry when he spoke to the nation about the Japanese attack on Pearl Harbor—you remember, “a date which will live in infamy.”  And then there was his cousin, Theodore.  He got pretty angry at those old monopolies in order to help pass some progressive anti-trust laws.  In general, can you imagine how the American people would react if an American president did not get angry at a perceived threat, domestic or foreign, to the well-being of the nation?

To say that Americans don’t rally in the long run to angry politicians is one of those innocuous truisms that mean little in the real political world, for everything depends on what one means by “the long run.”  (As Keynes said, “in the long run we’ll all be dead.”)  In the short run, and medium runs, the American people surely do rally to an angry president, as long as they can connect with the anger.  They also rally to presidents who know when to get angry and when to be inspirational.  (Presumably this would mean getting angry on and off, so it would sort of be in the long run.)  Oh, yes, and then there are those presidential moments that combine anger and inspiration.

Since the statement about anger is so obviously off the mark and hackneyed, one might be inclined to look for some other motivation for Friedman tossing it out.  Here’s my guess.  Friedman is scared that if Obama goes too far in attacking the bankers a rift may develop between his administration and the wonderful world of capital.  And then America may find itself falling behind foreign nations in the new flat world of economic competition that we face.  According to Friedman, entrepreneurs, who at some point will require capital, are the movers and shakers in this world, and it will be a pretty scary place for those places and persons who aren’t on board in terms of the new world order.

But back home, in the meantime, Obama only gets to use the bully pulpit with one hand tied behind his back while he is trying to back Wall Street down.  (Note Machiavelli here: it is better that the prince be loved and feared.)  Friedman wants Obama to re-regulate the banks.  In the real world of American politics just how is he supposed to accomplish this without some heavy duty support in Congress?  And given the special interests standing in the way of reforms, you can kiss them good-bye if the American people don’t get sufficiently excited about the issue to get their representatives worried about reelection.

I have a piece of advice for Mr. Friedman and I hope that he won’t mind.  It is in the spirit of his advice to the president:  Don’t worry!  Obama won’t forget about being loved over the long run.

….

UPDATE, January 27, 2010

For readers who may have felt that I was being a bit unfair to Friedman by claiming that he may have been motivated by fear, I suggest that you check out his column today, “Adult’s Only, Please.” Here is an excerpt.  Catch the last line.   (He does acknowledge that Obama might be justified in being a bit peeved by the way some on Wall Street have behaved, but hey, just let’s not make them too angry.  And if you do, well, you are not being an adult, which of course Friedman is.)

Lately, we’ve seen an explosion of situational thinking. I support the broad proposals President Obama put forth last week to prevent banks from becoming too big to fail and to protect taxpayers from banks that get in trouble by speculating and then expect us to bail them out. But the way the president unveiled his proposals — “if those folks want a fight, it’s a fight I’m ready to have” — left me feeling as though he was looking for a way to bash the banks right after the Democrats’ loss in Massachusetts, in order to score a few cheap political points more than to initiate a serious national discussion about an incredibly complex issue.

President Obama is so much better when he takes a heated, knotty issue, like civil rights or banking reform, and talks to the country like adults. He is so much better at making us smarter than angrier. Going to war with the banks for a quick political sugar high after an electoral loss will just work against him and us. It will spook the banks into lending even less and slow the recovery even more.

I am a professor by trade.  I like the idea of making people smarter (or perhaps I should say, better educated), especially over the long run.  But I think we all know the danger of coming off like a professor discussing fire codes while the house is burning down.

Photo Brendan

William James………………………Teabaggers

Compromise is at the heart of American politics; yield in order to gain.  Politicians and citizens compromise because self-interest demands that they do so.  But at times they also compromise because they come to see the other person’s point of view.  Or as Obama likes to put it, they stand inside the other guy’s shoes.  This doesn’t necessarily mean, as Bill Clinton was so fond of saying, that I feel your pain.  We don’t have to go this far to see the other person’s point of view, although sometimes we might.  We just have to be willing to engage in an imaginative act that allows us to step outside of our comfort zone.  Functioning democracies depend on this ability.  Without it they descend into gridlock, civil strife, and even civil war.

However, sometimes we can’t empathize with others.  Not, for example, because they are hardened criminals whose ways are simply unacceptable, but because the ways in which other people understand and experience the world are beyond our powers of imaginative reconstruction.  Our failure here is not due to a lack of good will.  It relates to a distinction that the philosopher William James makes in his essay, “A Will to Believe,” between two kinds of hypotheses: living and dead.  That the earth is round is a living hypothesis for most every American in 2010.  That the earth is flat is a dead one.   This was not always true.  For much of human history the opposite was the case.  Today there are those for whom God is a living hypothesis, and the Deity is a vital and accepted feature of their experience.  But others, convinced atheists, can make no connection with this hypothesis.  They do not experience God as a living hypothesis and no amount of arguing or cajoling will change their minds.  Agnostics on the other hand experience God as a living hypothesis, but they also experience the notion that there is no God in a similar fashion.  They have what James calls an option: a choice between two living hypothesis, although it is possible that they may never choose.

How then does this relate to Obama and health care?  Obama is a savvy politician, who is both politically and philosophically pragmatic.  This doesn’t mean that he is without values.  It means that he thinks about their realization in terms of what will work.  And this may mean modifying his goals, compromising if necessary on his goals, in order to create some reform.  Obama is also a storyteller, one who understands that storytelling requires being able to see different points of view.  As a storyteller he appreciates the importance of empathy in the go of human life.  It wasn’t accidental that he spoke of it when he nominated Judge Sotomayor.  And he has also spoken about empathy as a lesson that he learned from his mother.  That he can listen and stand inside the other guy’s shoes is one of his strengths as a storyteller and as a politician.  Empathy, no doubt, can be an important tool in a politician’s toolkit.  But it can also be an Achilles heal.

Obama made several tactical judgments on how best to pass health care legislation.  One of them, however, was not actually a tactical judgment, although it could be read this way.  It was actually an assumption.  He believed (at times) that his use of empathy would be reciprocated by the opposition.  Obama has an unusual ability to empathize with others.  It is natural for him to take the perspective of others.  He assumed too much, or had too much faith, in the opposition possessing a comparable skill.  Although he certainly understood that powerful special interests  would be aligned against him, he appears to have forgotten how James’s notion of live and dead hypothesis could come into play.

There are forces out there, forces for whom the idea that the federal government can be a force for good is a dead hypothesis.  The birthers and teabaggers fall into such a camp.  It is not that they merely have firm convictions or values.  It is that the hypothesis that the federal government can be a force for good is simply not a part of their repertoire.  It is a dead hypothesis.  There are Republicans in Congress who believe this.  And there are also Republicans in Congress who need to pretend to believe it so that they can get reelected.   A fatal brew for a reformist president whose natural inclination is to try to compromise with the opposition, and who was once convinced that a cooperative bipartisan approach to health care would carry the day.

So where does this leave Obama?  Of course he knew that his initiatives would give raise to strong opposition.  But there is a difference between strong opposition and folks like the teabaggers.  There will be no compromising with those for whom health care reform is part of the dead hypothesis of “the good federal government.”  Resurrecting the federal government for them is like resurrecting God for the confirmed atheist.   And there will be no compromising with those who have been captured by them or their ilk.  They will hold their ground on every new initiative, and they will carry along the entire GOP, unless the self-interest of (some) Republicans leads the party in another direction.  (Pay attention here to how Brown handles himself in Massachusetts.)

It’s not that Obama doesn’t know this.  Yet he has been hesitant to acknowledge the limits of empathy and compromise, not just intellectually but perhaps more importantly emotionally.   The paradox here is that recognizing the limits of empathy and compromise may very well lead to substantial movement on legislation that Obama supports.  The savvy politician in him knows this.  It’s going to have  to bring the storyteller along, at least for now.  There will always be times for tales.

Most Americans generally shy away from absolutes.  They don’t like to think of themselves as driven by dead hypothesis.  Most Americans are more like agnostics than atheists or the religious when it comes to the federal government, ready to shift one way or the other depending on circumstance.  They will become (temporary) believers if they are given something that they believe will work.  Give them a reason to believe that the federal government can be an active and helpful feature of their lives and they will take it.  Give them a reason to believe the opposite, and they will, at least for the time being.  Regarding health care, Obama’s rhetorical task is clear.  He must help make (temporary) believers of the agnostics with regard to the federal government.

Here you have Professor Irving Fisher after the 1929 Market Crash explaining that stocks were not actually too high; it was just that people were going into debt in order to invest.  Right and wrong.  Stocks were too high and there was too much investment that involved debt.

And here we are eighty years later and we all know who took on too much debt in order to make bundles of money.  How come you didn’t you listen to Professor Fisher, financial wizards of Wall Street?  Perhaps because you were able to take the money and run?  (Or not even run.  Just wait for another bonus as the smoke cleared.)