Sachs: The Price of Civilization

What I am currently reading is The Price of Civilization by Jeffrey Sachs.

This financial crisis and the failure to address it effectively is the natural outcome for a society that embraced the golden calf of selfishness and greed,  the will to power, and anything goes in the pursuit of wealth, with its roots in the 1980's at least.   As we have seen throughout history and in our own experience, the heirs of other people's hardship and unearned wealth through luck or birth often become dissolute and corrupt in their later years.   And so it can be with the character of a generation.

As an American economist, Sachs bears some past responsibility for this situation in past actions and advice given. It does seem he has had an epiphany of sorts in the past few years. But one has to wonder if the baggage he carries will permit him to become truly part of the solution.  Nevertheless, his points are often well-taken. I wonder if the changes can even begin to come from those who are so vested in the existing system.

The problems are too deeply rooted in corruption to be cured by changing one thing, even a pivotal element such as adopting a different monetary standard, reducing leverage, or the Volcker rule. Those may help but if only it were that simple. And destroying the government to reform it is surely the most naive folly of them all.

How can a gold standard protect people when the financial interests now feel free to loot their accounts of it, and will probably go relatively unpunished?   How can the Volcker rule, or any regulation for that matter, protect the public when laws are openly flouted, fraud becomes the general condition, and none are prosecuted for it? What is the deterrent then that provides the law its force in justice and example?   There is a certain watershed event in every outbreak of lawlessness that once passed brings an almost inevitable acceleration of the rise of the worst and the decline of civility.

It is not that this generation is worse than any other. Rather, it is because it thinks it is different, better, higher, above all others.   And out of this rises the ability to rationalize ideologically, and with lessening pangs of conscience, the worst of their excesses that is frightening. This is the path that allows the most powerful, the Übermensch, to rob, torture, starve, and euthanize the weak at their own discretion, or sometimes merely for the sake of expediency and enjoyment.  It is the most virulent moral epidemic of the early twentieth century, and the most pernicious vanity of human history, attempting a resurgence.  And the great voices of conscience and cultural transmitters are remarkably silent.

The greatest impediment to reform and renewal is the gullibility, vanity, and meanspiritedness of a self-absorbed cultural elite that pushes beyond all reason, flouting the laws that protect even them,  and strikes the Faustian bargain that eventually brings their self-destruction.   It is the fall of Rome, the British Empire and the Soviet Union.  It is an old story of hubris that leads to downfall and decline.

The Price of Civilization
Reawakening American Virtue and Prosperity
by Jeffrey D. Sachs

At the root of America's economic crisis lies a moral crisis: the decline of civic virtue among America's political and economic elite.  A society of markets, laws, and elections is not enough if the rich and powerful fail to behave with respect, honesty, and compassion toward the rest of society and toward the world. America has developed the world's most competitive market society but has squandered its civic virtue along the way. Without restoring an ethos of social responsibility, there can be no meaningful and sustained economic recovery.

I find myself deeply surprised and unnerved to have to write this book. During most of my forty years in economics I have assumed that America, with its great wealth, depth of learning, advanced technologies, and democratic institutions, would reliably find its way to social betterment.  I decided early on in my career to devote my energies to the economic challenges abroad, where I felt the economic problems were more acute and in need of attention. Now I am worried about my own country. The economic crisis of recent years reflects a deep, threatening, and ongoing deterioration of our national politics and culture of power.

The crisis, I will argue, developed gradually over the course of several decades. We are not facing a short-term business cycle downturn, but the working out of long-term social, political, and economic trends. The crisis, in many ways, is the culmination of an era-the baby boomer era- rather than of particular policies or presidents. It is also a bipartisan affair: both Democrats and Republicans have played their part in deepening the crisis.

On many days it seems that the only difference between the Republicans and Democrats is that Big Oil owns the Republicans while Wall Street owns the Democrats. (I beg to differ.  The FIRE sector and Big Pharma have considerably diversified their portfolios)  By understanding the deep roots of the crisis, we can move beyond illusory solutions such as the "stimulus" spending of 2009-2010, the budget cuts of 2011, and the unaffordable tax cuts that are implemented yea rafter year. These are gimmicks that distract us from the deeper reforms needed in our society.

The first two years of the Obama presidency show that our economic and political failings are deeper than that of a particular president. Like many Americans, I looked to Barack Obama as the hope for a breakthrough.Change was on the way, or so we hoped; yet there has been far more continuity than change. Obama has continued down the well-trodden path of open-ended war in Afghanistan, massive military budgets, kowtowing to lobbyists, stingy foreign aid, unaffordable tax cuts, unprecedented budget deficits, and a disquieting unwillingness to address the deeper causes of America's problems. The Administration is packed with individuals passing through the revolving door that connects Wall Street and the White House. In order to find deep solutions to America's economic crisis, we'll need to understand why the American political system has proven to be so resistant to change.

The American economy increasingly serves only a narrow part of society, and America's national politics has failed to put the country back on track through honest, open, and transparent problem solving. Too many of America's elites-among the super-rich, the CEOs, and many of my colleagues in academia-have abandoned a commitment to social responsibility. They chase wealth and power, the rest of society be damned.

We need to reconceive the idea of a good society in the early twenty-first century and to find a creative path toward it. Most important, we need to be ready to pay the price of civilization through multiple acts of good citizenship...

January 8: Andrew Jackson Day Remembered

"It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes. Distinctions in society will always exist under every just government. Equality of talents, of education, or of wealth can not be produced by human institutions.

In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy, and virtue, every man is equally entitled to protection by law; but when the laws undertake to add to these natural and just advantages artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society — the farmers, mechanics, and laborers — who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their government.

There are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to equal protection, and, as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing."

Andrew Jackson, Veto of the Second Bank of the United States


"Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country.

When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin!

Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out."

From the original minutes of the Philadelphia bankers sent to meet with President Jackson February 1834, from Andrew Jackson and the Bank of the United States (1928) by Stan V. Henkels

On our dinner cards tonight is a medallion portrait of a man who gave a memorable toast, "The Federal Union, it must be preserved."

This meeting tonight, in the City of Washington, is one of many hundreds being held throughout our forty-eight States and territorial possessions and even on board ships at sea, in honor of the memory of a great General, a great President, Andrew Jackson. To all of you I extend my most sincere and heartfelt greetings.

I am happy to stand here tonight and declare to you that the real issue before the United States is the right of the average man and woman to lead a finer, a better and a happier life. And that was the same issue, more than a hundred years ago, that confronted Andrew Jackson.

I speak tonight to this Democratic meeting, to these Democratic meetings throughout the Nation, in the same language as if I were addressing a Republican gathering, a Progressive gathering, an Independent gathering, a Farmer-Labor gathering, a gathering of business men or a gathering of workers or farmers. There is nothing that I say here tonight that does not apply to every citizen in the country no matter what his or her political affiliations may be.

It is true that we Americans have found party organizations to be useful, and indeed necessary, in the crystallization of opinion and in the demarcation of issues. It is true that I have received many honors at the hands of one of our great parties. It is nevertheless true that in the grave questions that confront the United States at this hour, I, as President of the United States, must and will consider our common problems first, foremost and preeminently from the American point of view.

To most of us, Andrew Jackson appropriately has become the symbol of certain great ideals. I like best to think of him as a man whom the average American deeply and fundamentally understood. To the masses of his countrymen, his purposes and his character were an open book. They loved him well because they understood him well—his passion for justice, his championship of the cause of the exploited and the downtrodden, his ardent: and flaming patriotism.

Jackson sought social justice; Jackson fought for human rights in his many battles to protect the people against autocratic or oligarchic aggression.

If at times his passionate devotion to this cause of the average citizen lent an amazing zeal to his thoughts, to his speech and to his actions, the people loved him for it the more. They realized the intensity of the attacks made by his enemies, by those who, thrust from power and position, pursued him with relentless hatred. The beneficiaries of the abuses to which he put an end pursued him with all the violence that political passions can generate. But the people of his day were not deceived. They loved him for the enemies he had made.

Backed not only by his party but by thousands who had belonged to other parties or belonged to no party at all, Andrew Jackson was compelled to fight every inch of the way for the ideals and the policies of the Democratic Republic which was his ideal. An overwhelming proportion of the material power of the Nation was arrayed against him. The great media for the dissemination of information and the molding of public opinion fought him. Haughty and sterile intellectualism opposed him. Musty reaction disapproved him. Hollow and outworn traditionalism shook a trembling finger at him. It seemed sometimes that all were against him—all but the people of the United States.

Because history so often repeats itself, let me analyze further. Andrew Jackson stands out in the century and a half of our independent history not merely because he was two-fisted, not merely because he fought for the people's rights, but because, through his career, he did as much as any man in our history to increase, on the part of the voters, knowledge of public problems and an interest in their solution. Following the fundamentals of Jefferson, he adhered to the broad philosophy that decisions made by the average of the voters would be more greatly enduring for, and helpful to, the Nation than decisions made by small segments of the electorate representing small or special classes endowed with great advantages of social or economic power.

He, like Jefferson, faced with the grave difficulty of disseminating facts to the electorate, to the voters as a whole, was compelled to combat epithets, generalities, misrepresentation and the suppression of facts by the process of asking his supporters, and indeed all citizens, to constitute themselves informal committees for the purpose of obtaining the facts and of spreading them abroad among their friends, their associates and their fellow workers.

I am aware that some wise-cracking columnist will probably say that good old Jackson no doubt realized that every red-blooded American citizen considered himself a committee of one anyway. Nevertheless, Jackson got his ideas and his ideals across not through any luxurious propaganda, but because the man on the street and the man on the farm believed in his ideas, believed in his ideals and his honesty, went out and dug up the facts and spread them abroad throughout the land.

History repeats—and I am becoming dimly conscious of the fact that this year we are to have a national election. Sometimes at the close of a day I say to myself that the last national election must have been held a dozen years ago—so much water has run under the bridge, so many great events in our history have occurred since then. And yet but thirty-four months, less than three years, have gone by since March, 1933.

History repeats—in those crowded months, as in the days of Jackson, two great achievements stand forth—the rebirth of the interest and understanding of a great citizenry in the problems of the Nation, and an established Government which by positive action has proved its devotion to the recovery and well-being of that citizenry.

Whatever may be the platform, whoever may be the nominee of the Democratic Party—and I am told by the Chairman that a Convention is to be held to decide these momentous questions—the basic issue, my friends, will be inevitably the retention of popular Government—an issue fraught once more with the difficult problem of disseminating facts and yet more facts, in the face of an opposition bent on hiding and distorting facts.

And that, my friends, is why organization, not party organization alone—important as that is—but organization among all those, regardless of party, who believe in retaining progress and ideals, is so essential.

That is why, in addition to organization, I make this specific recommendation—that each and every one of you who are interested in obtaining the facts and in spreading those facts abroad, each and every one of you interested in getting at the truth that lies somewhere behind the smoke screen of charges and countercharges of a national campaign, constitute yourself a committee of one. To do this you need no parchment certificate, to do this you need no title. To do this you need only your own conviction, your own intelligence and your own belief in the highest duty of the American citizen.

To act as such a committee of one you will need only your own appointment, an appointment which carries with it some effort, some obligation on your part to carry out the task you have assigned to yourself. You will have to run down statements made to you by others which you may believe to be false. You will need to analyze the motives of those who make assertions to you. You will need to make an inventory in your own community, in order that you may check and recheck for yourself and thereby be in a position to answer those who have been misled or those who would mislead.

After my Annual Message to the Congress last Friday evening, I received many appreciative letters and telegrams from all over the country, and I think it will interest you to know that within a few hours I received more of these than at any time since the critical days of the spring of 1933. I have carefully read those letters and telegrams and I found two facts that I think are worthy of repeating to you tonight. The first is that out of the many, many hundreds, a very large number were sent to me by families who evidently heard my Message while grouped together in the family home. "My wife and I want you to know how much we appreciate," and so forth—or "The Jones family, gathered tonight with our friends, sends you this message of confidence." In other words, as greatly as and perhaps even more greatly than on any other occasion since I have been in the White House, I have the definite feeling that what I have said about the great problems that face us as a Nation has received a responsive, an appreciative and an understanding answer in the homes of America. This means a lot tome.

The other interesting fact about these letters and telegrams is the very great number of them that come from business men, from storekeepers, from bankers and from manufacturers. The gist of their messages to me is that they are grateful, that they appreciate my statement that it is but a minority of business and finance that would "gang up" against the people's liberties. I reiterate that assertion tonight. By far the greater part of the business men, industrialists, and other employers of the Nation seek no special advantage; they seek only an equal opportunity to share in the common benefits, the common responsibilities and the common obligations of their Government.

I am naturally grateful for this support and for the understanding on their part that the Government of the United States seeks to give them a square deal and a better deal—seeks to protect them, yes, to save them from being plowed under by the small minority of business men and financiers, against whom you and I will continue to wage war.

We can be thankful that men and women in all walks of life realize more and more that Government is still a living force in their lives. They understand that the value of their Government depends on the interest which they display in it and the knowledge they have of its policies.

A Government can be no better than the public opinion which sustains it.

I know that you will not be surprised by lack of comment on my part tonight on the recent decision of the Supreme Court. I cannot and will not render offhand judgment without studying, with the utmost care, two of the most momentous opinions, the majority opinion and the minority opinion, that have ever been rendered, in any case before the Supreme Court of the United States. The ultimate results of the language of these opinions will profoundly affect the lives of Americans for many years to come. It is enough to say that the attainment of justice and the continuance of prosperity for American agriculture remain an immediate and constant objective of my Administration.

Just as Jackson roused the people to their fundamental duties as citizens, so must the leadership of this era do its utmost to encourage and sustain widespread interest in public affairs. There was something of eternal youth in the spirit of Andrew Jackson. The destiny of youth became the destiny of America.

Tasks immediately before us are as arduous as the conquest of the frontiers a century ago. The Nation is still young, still growing, still conscious of its high destiny. Enthusiasm and the intelligence of the youth of the land are necessary to the fulfillment of that destiny.

As I understand the temper of the people, particularly the temper of youth, no party of reaction, no candidates of reaction can fulfill the hope and the faith of that everlasting spirit. It is the sacred duty of us who are vested with the responsibility of leadership to justify the expectations of the young men and women of the United States.

We are at peace with the world; but the fight goes on. Our frontiers of today are economic, not geographic. Our enemies of today are the forces of privilege and greed within our own borders.

May a double portion of Old Hickory's heroic spirit be upon us tonight. May we be inspired by the power and the glory and the justice of his rugged and fearless life.

The people of America know the heart and know the purpose of their Government.

They, and we, will not retreat.

Franklin D. Roosevelt, Jackson Day Dinner Address, Washington, D.C.
January 8, 1936

Remember these leaders, these giants, from days gone by, and their unselfish defense of liberty and the people, as we look upon the empty suits, self-serving spokesmodels, and heartless mannequins, vetted and strutted out by the corporate interests, who pretend to the leadership of their great nation in its time of greatest need.

And let us not blame them, for the fault is ours in not having the courage to stand for the truth, even in the most incidental ways, to pass the honest message on, to resist the allure of demagogues, prejudice and old hatreds, the fear of otherness, the seductive mouthpieces and clever arguments of powerful and the monied interests, and support the voices of fundamental reform and equal protection for all people under the law.

What is remarkable is not how many sell themselves and their honor, but how eagerly, how cheaply. But the profit does not matter if one considers their soul to be worth nothing.

And if lawlessness increases, the hearts of many will grow cold. And then comes the downfall, and hell comes with it.