Checkers, Chicken and Chess-Playing For Keeps with the Future of American Prosperity

by: Paul Rosenberg

Tue Apr 27, 2010 at 19:00

Cross-Posted from The Campaign For America's Future Virtual Summit on Fiscal & Economic Responsibility (For People Who Did Not Wreck the Economy)

If you're playing checkers on a checkerboard, but your opponent is playing chess, it's only a matter of time until you lose.  And that's the problem in fighting against the enemies of Social Security and Medicare who are rallying around the flag of so-called "fiscal responsibility" this week. The attack on these two popular programs is part of a decades long war-a game of chess, if you will-that all too few of us understand.

Earlier in the Virtual Summit, Kim Wright provided a hint of what it's all about by calling attention to  Cato Institute document from 1983, when the very immediate prospect of Social Security running out of money lead to the creation of the Social Security Trust Fund:

The Cato Institute described their long-term strategy (implemented after the last major Social Security reform in 1983) this way:
So here we are.  As promised, the American people have been bombarded with a steady stream of pronouncements that Social Security is bankrupt, broken, or just too expensive.  In truth, what these folks really mean is that they don't [want] Washington to honor its obligations to the Social Security trust fund.

Cato's "Lenninst strategy" also included building up a cadre of those who stood to benefit from privatization--some just a little, others enormously:

What we must do is construct a coalition around the Ferrara plan [for gradual privatization], a coalition that will gain directly from its implementation.  That coalition should consist of not only those who will reap benefits from the IRA-based private system Ferrara has proposed but also the banks, insurance companies, and other institutions that will gain from providing such plans to the public.

As it turns out, of course, the "other institutions that will gain from providing such plans to the public"--Wall Street--turned out to be almost entirely responsible for the current financial crisis--a crises that impacts the long-term health of Social Security far less than it impacted those institutions themselves.  The difference is, of course, that due to its enormous political clout Wall Street has managed to save itself--temporarily at least.  Social Security--not being a wealthy special interest--remains far more vulnerable, just like Medicare, Medicaid and all other programs that "only" benefit the American people at large.

Still, even a full awareness of what Cato proposed, and how well the follow-through has conformed to its vision doesn't fully explain the nature of the chess game.  To understand that, we need to turn to the creation of Europe's first modern welfare state by Otto von Bismark in the 1880s, and to Gosta Esping-Andersen's classic 1990 study, The Three Worlds of Welfare Capitalism.  

Paul Rosenberg :: Checkers, Chicken and Chess-Playing For Keeps with the Future of American Prosperity
When Bismark created the first modern welfare state, his aim was anything but socialistic--even though socialists had long been the driving force in calling for universal health care and other social protections.  Instead, Bismark had three goals--(1) to take away the socialists' strongest political rallying points, and to craft programs in such a way that they (2) strengthened the newly-formed German Empire internationally, and (3) consolidated the power of existing elites.

Over a century later, Esping-Andersen analyzed the European welfare states, and concluded that they reflected three different kinds of basic logic--Bismark's "conservative" model, predominant on the Continent, which aims to produce stability and maintain social stratification, the [European-style] "liberal" model, predominant in English-speaking countries, which aims to narrowly handle market failures with minimal disruption to the market system generally, and the "socialist" or "social democratic" model, predominant in Scandanavia, which aims to provide a fundamental level of basic economic security as a matter of rights and expression of solidarity.

While America has long had the smallest welfare state, with predominantly "liberal" non-interventionist goals, its conservatives have been far and away the most hostile to it, as they have had relatively little control over it compared to their international counterparts.   And for that reason, another dynamic has unfolded, most visibly over the past 40 years or so.  Unable to dismantle the welfare state because of massive public support, as they would dearly like to, they have hit on a strategy of re-purposing it for their own conservative ends--which are far less compatible with the broader public interest than the conservative welfare states of Europe.

Nothing could illustrate the narrowness of their conservative ends better than the continued sacrifice of broad American prosperity for the bailout of Wall Street crooks and their accomplices and enablers.  The fact that this policy initiated under the Bush Administration continues under Obama simply serves to show how firmly entrenched their ideology has become--despite its great unpopularity with the voter base of both parties, as well as independents.  The continued attack on Social Security, Medicare, Medicaid and other domestic spending is simply the other side of the same coin.

But these two phenomena are only dramatic hallmarks of the conservative repurposing of the welfare state.  They are hardly the whole story, and if we limit our attention to them, then we will not fully grasp the nature of the game being played.  For example, Isaiah J. Poole called attention to the mechanism of "tax expenditures" in one his contributions to the Virtual Summit, "The $1.1 Trillion In 'Spending' That Shouldn't Escape The Budget Knife".  These automatic tax entitlements tend to disproportionately favor the wealthy and special interests (the Earned Income Tax Credit is a notable exception), and are legislatively structured to fly below the radar, requiring attention only to change or challenge them--not to deliver their largess.

Other pieces of the puzzle include entitled industrial sectors--the well-known military-industrial complex, in it's new high-profi Chenefied form, the health-industrial-insurance complex, well-protected by the Democrat's recent "reforms", the energy sector, with its vast basket of goodies in the so-called Kerry-Graham-Lieberman "climate change bill" that stands the "polluter-pays" principle on its head, and so on.  The point is not to get fixated on only one of these sectors, or to see their special protections and prerogatives in isolation from the larger ideological movement that feeds into protecting them, and drawing support from them in return, not necessarily on every fight, on every vote, but where it matters most: in reshaping the contours and content of American politics, and defining the nature of the unthinkable on one hand, and the unquestionable on the other.

This is the game of chess, referred to above--the game of repurposing the American welfare state--and, indeed, American government as a whole--to protect, defend and expand the privileges of the have-mores at the expense of everybody else. And when it comes to economics, the core material foundations of everything else, the have-mores number only about one percent of the entire population:

Source: Emmanuel Saez "Income Inequality in the United States, 1913-1998" Updated tables (.xls)

In a democracy, there should really be no question of whose will, whose interests, and whose welfare should prevail: 99 percent of the population, or one percent--particularly if that one percent is already quite well taken care of.  In our dysfunctional democracy, many things stand in the way of that, but two things stand out as key: First, understanding what's really going on--seeing that we're in a game of chess, not checkers.  Second, having the guts to stand up and fight for what we know is right-seeing that we're also in game of chicken, too.

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P-QB3 (4.00 / 1)
Sure enough, the queen gets behind enemy lines in only three moves, from where it can easily decimate the entire checkers team.  For a movement, I almost convinced myself that the ability to capture multiple pieces per move would prevail, but no way.

Oh, and yeah, the Social Security compromise of the 80's had a conservative, regressive taxation era, which we are now leaving behind us, and a progressive era, which we are just about to enter.  No way in Hell should we give up our end of the bargain.

All You Need To Know Really (0.00 / 0)
is that checkers only move on one color of square.  Keep your king on the other color square, and you can't lose.

And this:

Oh. and yeah, the Social Security compromise of the 80's had a conservative, regressive taxation era, which we are leaving behind us, and a progressive era, which we are just about to enter.

is what's known as the "long con."

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
. (0.00 / 0)
"In a democracy, there should really be no question of whose will, whose interests, and whose welfare should prevail."

I think you would agree that america is not a democracy, its a republic. We don't vote for what we wish to happen, we vote for people who we think would make what we wish to happen happen. Often times, these people can be liars, but other times the system itself can make it seem that way.

We Are A DEMOCRATIC Republic (4.00 / 1)
It's not an either/or thing.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
All of what you say is true and well written (4.00 / 1)
But how do we ever change when those on the left, including some of the managers of this blog, are willing to support and work for those who lie, deceive, and work for undermining the people of this country.  I think it is beyond controversy that the last five presidents, including the present occupant of the White House, are (were) blatant liars promoting anti-democratic policy.  Yet the principals in this board work for them.  Such partisan activity by the spokesmen of the left makes reuniting the working citizens seem unlikely.  

Much of what you discuss is caused by the liberal elite.  It seems little has changed.  My first exposure to elitist vs. working class politics came back in the 50's.  The popular term at that time was egghead.  My father was a Kefauver Democrat and I remember asking him what an egghead was.  To this day, when someone uses the term egghead, I still have a mental picture of Adlai Stevenson.  My dad was fond of saying that an egghead was a college guy who stuck his head into a book and pulled it out of his ass.

Great write.  Thanks

BTW:   Dad paid for a significant part of the eight years I spent in college.  ;)

"Oh. My. God. .... We're doomed." -- Paul Krugman

[ Parent ]
How's That Social Welfare Statism Working Out (0.00 / 0)
.. in Greece, Portugal and Spain these days Paul? Sovereign debt stability, employment, inflation, GDP growth.. yep, models all for what happens when liberal social and economic policies rule a nation. We can either learn from these unfortunate examples or live them ourselves. One's rational, one isn't.

It Was OUR Unregulated Capital Markets That CAUSED The Worldwide Recession (4.00 / 6)
And, of course, like a good little conservative you go and blame the victims.

How typical!

Those countries are in trouble because of the CAPITALIST financial crisis.  And they're among the poorest & least developed of the European welfare states.  Similar STATES in the US--Southern and RED states in particular--are habitually net recipients of federal tax money here in the US to keep them afloat.

If you stand back and compare the US to European welfare states as a whole, they're doing much better than we are with an unemployment rate of 8.6% in February.

Finally, you ought to be comparing us to non-welfare state industrial democracies.

Only, of course, there aren't any.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
. (0.00 / 0)
Unregulated capital markets don't cause countries to go bankrupt. Unregulated capital markets cause deficit countries with annual borrowing requirements to go bankrupt.

[ Parent ]
I would be more specific (4.00 / 2)
The devious, complicated rip off schemes and outright lieing done by thieves operating in unregulated financial markets to increase profit unethically and illegally cause.....etc.

Government by organized money is just as dangerous as government by organized mob..... FDR

[ Parent ]
Oh That's Right, It's ALWAYS America's Fault (0.00 / 0)
Please enlighten me on how an American-government-induced risk orgy (the CRA and the very existence of Fannie and Freddie did more to incentivize the absurd behaviors of the Goldmans, Lehmans and AIGs than underregulation of the financial sector ever could) prompted the governments of Greece, Portugal and Spain to define their own social democratic models of governance. I'm talking about all of the social bullshit that's at the core of their fiscal catastrophes - things like pampered, overpaid and over-benefitted unionized public sector employees for whom the notion of reducing wages is simply incomprehensible (it's government's fault, let IT tighten IT'S belt). Add to that rampant corruption at virtually every level of the state and that's America's fault how again?

Of course this is all conservative piffle to you - it's that awful ambition, drive and hunger for success' fault! - for which we have irreconcilable differences. Fair enough. Do one thing for me though - convince your Democratic Party campaign leadership this fall and again in 2012 that the key elements of your platform should be a celebration of the grand and glorious American victory that was the passage of your very socially democratic health reform bill, that incurring trillions of dollars more in debt is the path to economic recovery, that Arizonans are racist for wanting illegal immigration to be treated as illegal, that global warming truly is so grave a threat as to necessitate spectacular new costs, regulations and restrictions on business, that the successful and entrepreneurial don't pay even close to enough taxes already and, most importantly, that America, its people and its principles are the principal evil in our world and must be reined in. Trust me, it'll all go over GREAT with voters.

[ Parent ]
You Need To Fix a Broken Link! (0.00 / 0)

the link to The Three Worlds Of Welfare Capitalism is broken. I would very much like to read this because I missed it earlier.

Fixed (0.00 / 0)
The link is to the publisher's page for the book.

A brief discussion of three worlds can be found here.

Most of a chapter by the same name in a welfare state reader can be found in google books here.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
Laughing all the way to the banksters... (0.00 / 0)
"Fearless prediction": Shamwow & the Dems are gonna fuck us.

One of the jobs left over from the Busheviks for Shamwow to accomplish is to deliver the Social Security trust fund to the banksters. They lust for it more than for life itself. It is the largest pool of cash in the world that is NOT entirely devoted to enriching the oligarchs.

As it required "Republican" Nixon to go to China, so to it requires "Democrat" Obama to administer the coup de grace to the last vestiges of the New Deal.

Even sweeter, to the owners, is the fact that the person designated to drive the last nail into FDR's coffin is a "person of color." You know they laugh and laugh and laugh about that...


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