In 1930, the first year of the Great Depression, most economists and prognosticators thought that while the crisis was deep, it would run its course in a limited amount of time, and growth would come back to the economy.   It didn’t.   The crisis continued throughout the decade as economies were stuck in a stagnant mode while governments rejected the idea of using debt to stimulate their economies.

In some ways, the depression seems easy in comparison to the crisis we now face.   If our policy makers would go back to 1930, they’d see US debt at about $16 billion, or only about 13% of GDP.    As a percentage of GDP that debt would rise to over 40% by the middle of the decade, but in nominal terms would rise only to about $30 billion — the shrinking GDP was causing the debt to GDP ratio to worsen.   Only WWII would bring a significant increase in debt (over $220 billion and 120% of GDP by 1946) as the US had to pay for a two front war.

US policy makers in 1930 would have numerous fiscal and monetary tools at their disposal.  The low debt to GDP ratio would mean they could inject significant stimulus directly into the economy and jump start growth.  They’d have low interest rates, and the capacity to increase connections across borders to fix the economy.    I’m absolutely certain that policy makers now, if transported back to the 1930s, could create policies which would have meant economic growth by the mid-thirties, and perhaps an avoidance of WWII.  So when people ask whether or not we’re facing another “great depression” my response is “if only it were that good.”

Total US debt reached nearly $400 billion by 1970, while Richard Nixon was President.  However, that was only 37% of GDP, and reflected the new willingness to use “Keynesian” policies to maintain economic stability.   John Maynard Keynes was the economist who, besides writing in 1924 that the Versailles treaty made another war with Germany likely, figured out the Great Depression and how to get out of it.  He realized that the market had no magical or “natural” solution to an economic downturn, and fiscal stimulus was necessary to “prime the pump,” so to speak.   Yet he was not in favor of ongoing debt and deficits.   He recommended counter-cyclical budgeting — run surpluses when the economy is strong, be willing to run budget deficits if there is a recession.

Though the last Johnson budget (for 1968) was in surplus, the economies of the West ignored one side of Keynes’ advice and instead became very adept at running deficits during economic slow downs, while refusing to cut that spending when things improved.   Still, since the debt to GDP ratio was improving, this wasn’t seen as a major problem.   The first year of the Reagan Administration, saw debt at 33% of GDP, even though it had reached $1 trillion.  Our economy was growing faster than our debt.   An analogy:  If you have $10,000 credit card debt and an annual income of $35,000, you’re in trouble.  If your annual income is $200,000, it’s not that big of a deal.

The eighties, as noted last week, saw the US undertake a series of economic policies that set up the current crisis.  The biggest was to stop even attempting to limit debt growth during a boom.   In 1983, the last year of a recession, debt was $1.4 trillion, and 40% of GDP.   By 1990 it was nearly $3.3 trillion, and almost 60% of the GDP.  Yet that period from 1983-90 was defined by a serious spurt of economic growth, a time when Keynes would have said we should save money and cut deficits.   Keynes was out, however, as his “demand size” fiscal policies were replaced by “supply side” monetarism.   The deficit doesn’t matter as long as inflation is low, and inflation was low.

Now, low inflation over the past generation is in some ways an illusion.   The quality of goods has declined to the point that things need to be replaced more frequently, hiding inflation.   Anyone who has bought a cheap DVD player probably knows that the cost only seems low until a year or two later it gives out and you have to replace it.  Suddenly the Sony seems a better buy.   For the US, however, it was a double illusion — the role of the US dollar meant we could export inflation to the rest of the world, meaning that we didn’t suffer the usual currency decline caused by increasing budget deficits (or current account deficits).

In the 90s things stabilized as the US, like the rest of industrialized world, found debt at 60% of GDP something we could live with.    By 2000 US government debt was $5.8 trillion, but in a$10 trillion economy that was slightly under 60% of GDP.    Despite a booming economy in the first eight years of the 21st century, US wars and government spending started a debt to GDP increase again.  By 2008 debt was at nearly $10 trillion, or 70% of GDP.   Then the last days of the Bush Administration saw a dramatic increase due to the bailouts, meaning 2009 debt is likely to come in at $12 trillion or 90% of GDP.   Spending early in the Obama administration on economic stimuli mean that by 2014 we should be looking at debt and GDP at about $18 trillion.   Estimates suggest we could remain at such high debt loads for the next decade.

Herein lies the problem:  stimulating the economy by increasing debt becomes counter productive if debt is too high.  Given that the private and corporate sectors of the US are also in debt (total national debt is probably about $60 trillion), there is no reserve of money able to be injected.   Moreover, the US now pays relatively low interest rates on short term loans to finance much of the debt.   This could increase massively in the near future, much like people with subprime mortgages saw their loan payments go up when they couldn’t refinance.  In a weird way, the subprime crisis could symbolize the budget crisis faced by the US.

This debt crisis is the reason why the US economy will not simply grow out of this recession like we did in past recessions.   From 1980 to now we’ve gradually put ourselves in an unsustainable position, making ourselves vulnerable to a new depression, though one where we lack tools we could have used in 1930.  So what our the options?

1.   This is like  a war.   One could look to the massive spending during WWII as a sign that we can go deep into debt and, if it sparks economic growth, slowly work out of it.   This seems to be the approach of the Obama administration, and is the most optimistic scenario.  The problem is that the world was under producing in 1945, and could rely on European growth and increased trade to fuel a major spurt of economic prosperity which would allow the debt to go down as the economy prospered.   For this to happen now the developing world would have to be the engine for growth.   If this scenario plays itself out, the US is headed for a “soft fall,” though the world economy will move away from US dominance and Americans will have to get used to a lower standard of living.   And again, that is the best case scenario.

2.  Dollar devaluation.   In this scenario foreign countries will stop investing in US bonds at low interest rates, distrusting the dollar at such high debt levels.   The collapse of the dollar in an otherwise deflationary economy will have a devastating effect on the US economy.   Previously cheap foreign goods will become expensive, meaning inflation will increase during a time of economic stagnation (stagflation).    This would intensify the recession (things would get far worse), bringing structural change to the US economy.  Slowly production would increase here (to replace cheap foreign goods), meaning jobs would come back.   To deal with the debt, the US would either default or alllow currency devaluations to handle the debt (meaning new debt would not be allowed, as interest rates would be much higher).   This all would mean a long term structural adjustment to the US economy which would likely take the next decade to play itself out.   If this scenario becomes reality, we’re only at the start, only feeling a pinch of the pain that is in store.

My own guess is that reality will be between the “best” case scenario 1 and the “worst” case scenario 2.  Simply: the debt crisis is real, unprecedented (not like past war time debt), and defies any quick solution.   Moreover, any external complications — an energy crisis, terrorism, war — only makes things more difficult.   The bottom line is that the US is in real economic decline, thanks to our lack of fiscal and monetary discipline over the past three decades.

I’m either none or all of the following: Christian, Muslim, Jew, Hindu, Buddhist, Zoroastrian, Pagan, and all the other religions on the planet.   I don’t have much time for religious dogma, though I think the teachings and stories from all faiths contain wisdom and insight.   The idea that an omnipotent being would only give paradise to those who happen to believe a particular set of stories seems a bit absurd.   In fact, as I noted last year, I think those “exclusivist” religions will overtime learn to accept that it makes no sense to say that the faith which happened to develop in  their part of the world is the one and only true one, with all the others wrong.

Yet, I do believe in God.   I don’t know for sure what the term means.   Is God simply “all there is,” and I’m a segment or a piece of perspective in a pantheistic universe?   Is God simply a part of my consciousness that connects it at a deep level to all of reality, linking me to the eternal?   Is it something like the “force” in Star Wars?  I suspect anthropomorphizing God into a human and giving God gender, human traits and (in the case of Judaism and Christianity) even human vices (God is jealous, God is angry) is way off base.    Most likely, God is a human concept that represents an aspect of reality that is beyond our comprehension.   We glimpse it and try to make sense of it in our various myths and religions:  God is love, God is a universal force, God provides a culture its sense of meaning, etc.

So I believe in God, don’t know what God is, but feel a sense of connection to a spiritual side of the world in which material divisions are somehow irrelevant.   Time, distance, space…that doesn’t matter, all is one at that level.

That all may sound nice, but the next question is WHY do I believe in this “God?”   Religions at least have their holy books and rituals.   You get taught from youth to believe, or you are brought into a community which helps you find meaning for life.   My view is very individualized, I’m determining what kind of God I believe in, I’m not buying someone else’s set of beliefs.   I am considering many teachings and beliefs to help guide my own personal effort, to be sure.  I also know that my belief is my “best guess,” not something I consider to be unquestionably true — and that’s good enough for me.

One reason that I don’t accept a ‘pre-packaged’ faith is that on a question of this import, I’m not going to leave my beliefs up to others to determine.   I’m not going to believe something out of fear or going to hell, or because of pre-existing institutions.  In fact, the more I study religions, the more clear it is that dogmas develop over time and due to human conflicts, not timeless commands from above.   It’s my life, I’ll determine what I believe!

The second reason is fundamental:  It works for me.  I live life in two ways.   Sometimes I’m involved in a hectic pace of preparing for classes, getting tasks done, taking care of the kids, worrying about finances, trying to find time to exercise, reading about politics, engaging ideas in blogs or by grading papers, and having a laugh at the end of the day watching Jon Stewart and Stephen Colbert.   Days pile on each other, little things bother me more easily, I get bored, I worry more, and I realize that time is slipping away.

Other times I am, in a sense, “in a state of grace.”  I do this by imagining God as a part of me, with me, every step of the way.  This “God” is both within me and outside me.   It’s like a voice assuring me that things happen for a reason, even the horrible things I can’t understand, and helping me avoid stress, see humor in tiny things, and enjoy each moment without being weighted down by expectations of the future, irritations of the present, or nostalgia for the past.   I enjoy life, feel awake, connected to the world at a deeper level, and good things seem to happen.   Instead of chance coincidences now and then, synchronicity starts to define my life.  I look for reasons why I’ve drawn things to me, lessons I can learn, ways I can enrich my experience of life.    I feel a strong sense of joy — I enjoy life.

The social scientist/rational skeptic in me smiles and thinks, “it’s just a psychological thing.  I’m engaged in a kind of auto-hypnosis whereby I’m altering my own mood by feeding myself suggestions about how to take things and how to respond.  There is no real connection or higher power, just my own mind learning how to deal with the stresses and demands of the modern world.   That’s not bad — it’s a good skill to have — but “God?”  A “state of grace”?   Nah, I’ve just learned to modify my own attitude.

That may be true .   Life may feel magical because I’m choosing to look at life through that lens.   When I do that I don’t get angry at a car that cuts me off, I laugh when my three year old spills milk on my papers, and shrug when my retirement account loses tens of thousands in a market downturn.   When I’m outside that state, I’ll honk at the obnoxious jerk who cut me off, raise my voice to my child for being so careless, and obsess about finances when I have a loss.  Since the former experience is more pleasurable than the latter, I’ll go with it even if my thoughts about God and spirituality might be a fantasy.

Yet, I don’t think I’m simply deluding myself.  I feel a sense of serenity when I allow myself to be in a state of grace.   It becomes easy to forgive others, easier to keep my temper, and can better accept it when things go wrong.  There seems to be more understanding and strength, as if I’m tapping into something beyond me — or perhaps a part of myself from which I disconnect when I lose this state.   It’s not that I won’t get angry, or write something a bit too provocative, or get irritated.  It’s not that only good things happen.   Yet inside of me I feel I am more myself, more complete when I’m in this state.

This “state of grace” is a perspective — to feel like I am where I am because somehow I chose to be here for the lessons I can learn, or the people I can help (or be helped by).   It’s the belief that I need to make the most of every moment, that each moment has purpose, and is precious.   I best maintain this and reinforce/strengthen this perspective through what Christians might call prayer — an ongoing dialogue with my conception of God, a spiritual force which connects me to everything else.   At times I imagine responses, at times it’s a monologue.  At times I just try to feel the connections.  But the more I practice doing this, the easier and more natural it seems, and the more life seems to be a joy rather than a series of burdens or anxious moments.

(Thanks to my POS 336 class discussion on globalization, and the second and third chapters of the book Globalisms by Manfred Steger for inspiring this post).

Neo-Marxian theories about the global political economy have been relegated to a secondary position in academia, and outside the third world tend not to be taken seriously by politicians.  Part of it comes simply from the term “Marxian.”   That gets associated with Soviet style communism, an approach to politics and economics which failed utterly.   But neo-Marxian analyses of the global economy are profoundly different than orthodox Marxism, and do not posit some kind of workers and farmers’ paradise in the future.   They often see communism as the major flaw in Marx’s thought — rather than just analyzing how the political economy operates, he tried to imagine some kind of perfectly just system.   That goal led to the horrors associated with Marx’s legacy.

Neo-Marxian analysis is an approach to studying the global political economy in a manner informed by Marx’s structural analysis of capitalism.   It has evolved far beyond Marx, most notably in that it looks at the global economic system while Marx was concerned with a domestic economy.    Perhaps the most famous of these is an approach put forth by Immanuel Wallerstein some time ago called “World Systems Theory” (WST).   Wallerstein was an Africanist who, in studying Africa, realized that underdevelopment there could not be explained or cured by the liberal capitalist theories coming from the West.  He sought to explain the division of the world between a relatively small wealthy core, and an impoverished and underdeveloped periphery.   A small semi-periphery held states that moved beyond poverty and instability, but could not become as wealthy and dominant as core states.

In essence, he posits capitalism as a world system with relations between the core and periphery structured so that the core exploits the periphery for cheap resources and labor, turning those goods into valuable finished products for consumption in the core.    Some finished goods are sold back to the periphery, but consumed by governmental elites whose interests are more in line with those of the core than those within their own country.   The elites in third world states thus find it in their interest to perpetuate structures that benefit the core (one reason corruption is prevalent throughout third world governments).   Because post-colonial states are often fictions with no strong sense of national identity, people go into government more to get rich than out of any idealistic notion of helping their state develop.

For Wallerstein and the numerous “world systems theorists” who followed in his wake, creating a kind of cottage industry of academic neo-Marxism, this world system functions in part through the control of a hegemon who can dominate the system and enforce its rules.   First it was the Netherlands, then Great Britain, and finally the US.   US hegemony started weakening in the 70s, and the current crisis pretty much collapses it.   US military power is seen as less credible after Iraq and Afghanistan, while US economic hegemony has vanished with the current crisis.   The US really lost economic clout with the downsizing of its manufacturing sector after the 1980-83 recession, but managed to retain hegemony by dominating financial markets.   An illusion of economic health existed with the bubble economy, but now huge deficits, a large debt, and dependence on countries like China and Saudi Arabia for maintaining the ability of the government to function, puts the US in a weakened position.   Still an important actor, but not a hegemon.

WST has been effective in predicting the on going division between rich and poor states and the limitations of the semi-periphery (Taiwan, South Korea, Brazil, etc.), but until recently seemed overly pessimistic about the health of global capitalism.   Like all Marxian theories, WST claims that capitalism as it operates in the real world contains contradictions which lead to intermittent crises.   The most dangerous is the problem of over-production which can lead to a credit crisis that can cause systemic failure.   Capitalism runs on credit, you can’t invest without credit, and any threat to the availability of credit is very dangerous.

On September 18, 2008 the world economy nearly collapsed.   Credit markets had seized and if capital wasn’t injected into the system right away there would have almost certainly been a global depression.   I do not think Americans quite comprehend the danger the world economy faced that day, and why it was that free marketeers held their noses and supported a massive federal bailout of the financial industry.   Yet this bailout didn’t solve the problem, it just bought time.   The crisis is still very real, and much like the kind of crises predicted by neo-Marxian analysts.

Now, this may sound weird, but neo-Marxism seems to find some common ground with the ideas of someone associated with a pro-US pro-military approach to globalization, Dr. Thomas P. M. Barnett.   Barnett, who writes for Esquire, has a Ph.D. from Harvard, and has worked in the defense department, puts forth a grand strategy for how to approach globalization.   He defines different types of states: Core states (much like Wallerstein’s core, though including India and China), Gap states (states not integrated into the global economy) and Seam states (those somewhat integrated).   This parallels WST’s Core, Semi-periphery and periphery in a manner that seems almost too obvious to be coincidental (given he has a Ph.D. in Political Science from Harvard, he has to know WST).

Like WST, Barnett looks at globalization as a system that should be global.   Concerned with terrorism and security, he argues that gap states represent the breeding grounds of terrorism, and seam states are places where terrorists could entire the core from the gap.    Globalization thus needs to be protected by both integrating the gap into the global economic system, and fighting anti-globalization forces, particularly jihadist terrorism.     In a way this is similar to neo-conservatism, which also views globalization as a force for good, though Barnett is more realistic about the limits of the US to manage the system alone.  In fact, his approach seems to recognize that a concerted effort in the core to manage globalization is necessary to keep the project alive and avoid systemic collapse.

Not being a Marxian thinker, Barnett seems convinced that if the globalization project is kept alive, then the gap states can successfully integrate into the system and the power of markets and liberty will spread prosperity.   WST would suspect that his approach might only help the global capitalist system overcome current structural weaknesses (especially the collapse of US hegemony) and contradictions (global financial instability and the dollar crisis) to maintain the system.   WST would predict that efforts to integrate the gap/periphery into the global economy would fail because of how the system operates and is structured.

I’m not sure if WST is right or not.   However, it seems to me that of all theories of the political economy that emerged after WWII, neo-Marxian analysis is surviving the current crises and changes brought about by globalization as good if not better than neo-liberal and neo-realist theories.    My own view remains in the constructivist camp for a variety of reasons I won’t get into here.   However, at least in explaining the changing nature of the global political economy, neo-Marxian thought may have to be taken much more seriously.   Non-Marxists like Barnett may already be doing so.

The decision to try Khalid Sheik Muhammad in New York has generated some controversy by a few on the right who have argued that this is a disastrous decision.   They would prefer a military tribunal.   The problem is that the legalities around this case point to the necessity of a trial and not towards some kind of military alternative.   We’re supposed to follow the law, right?

Not to some on the right, though I suspect for many the outrage is disingenuous.   They want to generate irrational fear in order to attack the Obama administration.   If you listen to the “outrage,” they posit all sorts of scenarios.   Some claim that American courts are somehow ineffective and won’t  be able to do justice (they are too “PC” or give groups like the ACLU too much “clout.” )   Those criticisms betray a total distrust of the American legal system.     If we can’t trust our legal system to try criminals, we have far greater problems than the venue of one suspect!

Others claim that “terrorists don’t have the same rights we do.”   But where in the constitution does that provision stand?  And don’t you have to presume guilt before you can make that kind of claim?   In other words, if we go down that route, what kind of precedent are we setting?   The state can unilaterally deny rights by declaring someone an enemy of the state?  Gee, that worked well for the USSR and dictatorships world wide, but do we want to start going down that slippery slope?   Others claim we are “at war.”   Well, we do have military operations overseas, but Congress has not declared a war, and such rhetoric is more political hyperbole than reality.

The most common claims are blatant fear mongering.   It will make New York a target!   It will be expensive!  It will cause emotional distress for New Yorkers (a claim I think New Yorkers should reject as insulting to their mental stability)!   He’ll infiltrate the prisons and create recruits!  In short, the effort is to make it sound like we should be afraid of allowing our legal system to function; out of fear, we should abandon principles.

First, terrorism is a real threat, but not something to we have to fear.   Even 9-11 did limited damage, and it’s been eight years and they haven’t been able to mount a serious second attack in the US.   That could change tomorrow, but the idea that massive attacks could truly damage the country seems remote at best.   Second, the idea that having this trial in New York will somehow inspire al qaeda to hit New York again seems odd, especially if the claim is that they have been wanting to attack again but we’ve prevented that.   I doubt this adds to their motivation.    Finally, the idea he’ll go into the prisons and win scores of recruits is plain silly — he probably won’t have that kind of access and he will be watched.  He may even get the death penalty.

The real problem is that back in 2001 we put aside the Geneva Convention and our constitution to create a legally questionable alternate system of incarceration and justice at Guantanamo Bay.   If it would have been short term, that may have worked.  But can you really keep suspects for years — many who already have been shown to be innocent — without any kind of legal status?   This kind of issue comes up because the Bush Administration wanted to make their own rules regarding the so-called ‘war on terror,’ and in so doing veered into unexplored legal territory.   The Obama Administration has to untangle that mess.   For some captured in Afghanistan, military tribunals may function well, but in a case like this a trial is the only legally viable option.   There is no reason to hurl aside our principles and rule of law out of irrational fear.

But things get even more bizarre when one sees that an even smaller group get in a huff that President Obama bowed to the Japanese emperor.    Someone forgot to tell the President that bowing is not allowed in Japan when you greet people!    But let’s assume that Obama did bow out of courtesy to his position in Japan — the claim made by those who criticize him.   So what?   How much does that add to the budget?   What harm does that do the national interest?  What does showing respect for others cost us?

These same people don’t like that we “apologize” for errors of the past.   We should never admit a mistake (as has been pointed out by ‘classicliberal’ in comments to the last post, President Bush famously could not recall making any mistakes when asked).   In other words, we should fear admitting errors, apologizing, or showing respect for others.  We should fear showing any weakness.

What would we think of an individual who acted that way?   We would consider such a person an arrogant prick, someone with such low self-esteem that they don’t want to show any weakness, someone so afraid of what others think of them that they put on a show of false bravado.   We tell our children it takes strength to apologize, that we should show respect to others, and that it’s OK to make and admit mistakes.  But as a country we’re afraid to do so?   What exactly do these people think will happen?   We’ll lose our claim to be the ultimate superpower above the rules?   That’s been lost already.

There is no harm done to the country by any of these things, none whatsoever.  The attacks on Obama for “apologizing” or “bowing” are silly.    I mean, President Bush has been caught kissing the King of Saudi Arabia — you do things to show respect in other cultures that you might not do here.  No big deal.   Most people think it’s good when America does not try to act like a pompous jerk on the world stage.

The fears of terrorism are, to be sure, more grounded in reality.   But ultimately the last ten years have taught us that it is hard to hit the US with a terror attack, the post 9-11 panic was overblown, and while we cannot be absolutely secure, we have more to fear from car accidents than from terrorists.   As Benjamin Franklin noted, anyone who would trade freedom for security deserves neither.   We have a lot of problems as a country; irrational fear will only make them worse.

Pam at Notesalongthepath asked me when I would post something explaining the current economic crisis.  I’ve done so many posts about the economy I assume I had one that explained my view of what is happening, but there really is no one clear post laying it out.  So I’ll attempt here to explain just what’s going on, why, and why it’s not likely to get better anytime soon.

In 1980 the US economy entered its worst post-war recession, one that would last until 1983.  The pain was real — high unemployment, high interest rates to fight inflation, and major manufacturing sectors going out of business, most notably the steel industry.   Nonetheless, the economic fundamentals were not all that bad.  The US government had gone from total debt of 120% of GDP at the end of World War II to only 30% of GDP, budget deficits were small, and the US ran a current accounts surplus, meaning that we were a net investor in the world.   The US could have responded to that recession by saving the manufacturing sector and investing in national infrastructure.   Instead, the Reagan Administration made a series of bad decisions, starting a process that would yield increasingly unsustainable economic imbalances for the next thirty years.

First, the recession was ending in 1983 due to a dramatic drop in oil prices, which stimulated the economy.  The oil price drop also eased inflationary pressures, allowing interest rates to go back down.   All other things being equal, we were going into a clear recovery.  Yet the Reagan administration increased budget deficits radically.   Total debt went from 30% of GDP in 1980 to 60% of GDP by 1990.   This hyper-stimulated the economy, creating an illusion of economic prosperity — you can think of the country as the equivalent of a family whose costs are declining but yet spending beyond their income through increased credit card debt.

Second, believing in the free market, the Reagan Administration allowed industries like the steel industry and manufacturing jobs to die out, to be replaced by jobs supposedly fitting our comparative advantage.   It was thought these would be high tech jobs that would benefit our advanced economy, but it turned out to be mostly service sector jobs, often in the financial industry, which did not produce any goods.   We started consuming more than we produced, as our current account went into deficit.

A current account deficit (not to be confused with a budget deficit or debt) means that we take in more from the rest of the world than we put back.  For us, this was mostly a trade deficit.  You can’t do that unless this is financed by foreigners buying US assets — property, bonds, stocks, currency, etc.    In this case China, Japan, and the Arab world were willing to buy US bonds and currency.  They trusted the dollar and thought these were good investments.   More importantly we were purchasing goods from them, and they knew the money would cycle right back to their economy, bolstering their industrial sector.  For China especially this was a win-win situation — they get a stake in the US economy, and we use that money to buy their goods, further stimulating their economy.   At this point China has over $1 trillion of US assets, and the US relies on China to help finance the deficit.  If China wanted to, it could launch a crippling blow to the US economy.   That would hurt China too, but if you ever wonder why the US doesn’t ever really pressure China, this is the reason.   In vulgar terms, they have us by the economic balls.

The current account deficit becomes a problem at 3% of GDP.  The US hit that by 1990 and it kept growing.   We kept consuming more than we produced.   Moreover, the country as a whole went into debtor mode.   Saving rates dropped, personal debt (credit card and otherwise) increased, to the point that now the country is about $60 trillion in debt if you take all sectors into account.  Credit card debt alone is $1 trillion.  Savings rates hit zero in 2006.   Some economists sounded alarms over this, but the wealth illusion made it seem like savings were unnecessary.  Instead of having money in savings, we had it in stock portfolios (in the 90s) and real estate (in the 00’s).   That theoretically meant that we could dip into our wealth if we needed funds, and thus low interest savings accounts were irrational.

Yet the wealth illusion was built on bubbles.   First was the stock bubble, where people literally believed all they had to do to get rich was buy some stock and watch it grow.   We got addicted to the notion of something for nothing.   People were borrowing to buy stocks, knowing they’d earn enough to pay back the loan and make money.  It was quite literally too easy.   And in 2000 (over a year before 9-11-01) the inevitable occurred:  it crashed.   The tech-heavy Nasdaq collapsed, and stocks started reeling.   The current account deficit was up to 5% of GDP, and the only good news is that we briefly had small budget surpluses rather than deficits.   But those surplusses were built on the bubble economy, and represented a kind of illusionary sense of economic health.

At this point in time a painful recession like that of 1980-83 might have been enough to correct the imbalances and force us to increase production to bring it in line with consumption (and balance our current account).   Yet after 9-11, the US decided that we could not let terrorism bring down the economy.  President Bush said the patriotic thing to do was to go shopping, interest rates were kept very low, and thus a new bubble formed, the housing bubble.

Again, a something for nothing mentality took over.   Making money on real estate became easy, people could borrow from the equity on their home to buy more property, knowing it would go up in value.   Or at times people would borrow against their home just to have a better lifestyle, invest in a company, or pay for college.   With housing values rising, it seemed to be easy money.   The claim was that though housing values might finally stop rising, real estate values never actually decline, so the investments appeared safe.   Again, a wealth illusion spurred greater consumption, and by 2006 the current account deficit reached a whooping 7% of GDP.   Budget deficits started to rise again as well, as a mix of tax cuts and war (I still cannot comprehend cutting taxes in a time of war) led to rising debt and deficits.

With the financial markets deregulated, bizarre financial products were put on the market.   Mortgages were bundled and sold, and then those bundles were rebundled and resold.   These ‘derivatives’ were wholly unregulated, and produced huge gains as people saw them as both safe, and rising in value by 10% or more a year.  The perfect investment!   On top of that, other financial products were sold that were really insurance policies on those mortgages.  They appeared to be safe investments, and many buyers didn’t realize they were obligated to pay if that insurance was needed — meaning they could lose whole principle on those “safe” investments overnight.

When the housing bubble burst, this started a chain reaction.   Note: the bad mortgages or subprime sector could not alone bring down the economy.   If it wasn’t for how these got bundled up and turned into complex financial products, the housing bubble could have burst with containable damage, easy mortgages alone were not the problem.   Rather, these complex and little understood financial products came crashing down, bringing the entire financial industry with them.  Bear Stearns felt it first in March 2008, then the biggie came when Lehman brothers had to declare bankruptcy in September 2008.

By September 18, 2008 credit markets had seized completely, the financial system stood at an abyss.  Without a dramatic injection of capital the financial sector was about to collapse, and with it the US and likely the world economy.  If that had happened, a spiral into depression was all but guaranteed.  That’s why free marketeers like Treasury Secretary Hank Paulson were forced to go for a massive government bailout, and why Alan Greenspan admitted he was wrong in trusting the market to “get it right.”

However, that is only the tip of the iceberg.   The imbalances in the US economy not only are unsustainable, but it’s clear that China and the rest of the world are no longer willing to continue to finance a completely out of balance US economy.   We need to start producing more, or we will be forced to consume much less.    Even as we try to stimulate the economy, we do so by increasing debt, now at about 90% of GDP, and likely to rise to over 120% of GDP by 2015.

This has been a long post, but the upshot is this:  there is no way  we can right our economy without a massive decrease in our standard of living, and some kind of restructuring of our budget, especially as the baby boomers retire.  The imbalances are real, and with the US no longer seen as a safe investment, countries will refuse to finance our debt and deficits.   That means unemployment will be with us for quite awhile, and the US is in the midst of a severe economic decline/restructuring which will weaken us on the world stage, force a more isolationist foreign policy, and end the days of US global economic and military dominance.    I suspect it will be at least a decade before things start to turn around, and even then it will not be like the heady days of 2006.

Or, as I tell my students, “my generation has enjoyed a thirty year party of wild excess, a kind of consumerist orgy.   Now we’re leaving you with the bill.   Sorry.”

In a panel discussion last week I said that November 9, 1989 may be the second most important day of the 20th century.   (I put June 22, 1941 as the most important, since that’s the day I think Germany’s defeat in WWII became inevitable).   It is the day that the Berlin Wall became irrelevant, as citizens of East Germany were allowed to cross into the West, and started physically chipping away at the wall.   The Cold War was ending.

Communism did not fall because of what happened November 9th.  It fell mostly due to internal collapse.  Bureaucratic socialism didn’t work, was inflexible, denied personal initiative, and led to a system that from the late sixties onward was in constant decay.   By the mid-seventies the Soviet KGB knew that they would face a major economic crisis in the eighties, but the political leaders didn’t believe them.  Aging Politburo members were oblivious to reality, caught up in their own world of jargon and superpower ambitions.

By the mid-eighties the crisis was acute.  Though the West vastly over-estimated the strength of the Soviet economy and political system, the Soviet government was becoming aware that things were starting to fall apart and they had no way to deal with it.   Thus they chose a leader from a new generation, relatively young Mikhail Gorbachev, who argued that the system had to be opened (glasnost) and restructured (perestroika).   He hoped to turn Communism from a system of the bureaucrats to one that took the needs of citizens seriously, and gave people the right to speak up and participate openly.   It would ultimately fail — the system was incapable of such dramatic reform.  Yet his efforts opened the way for real change in Eastern Europe.   By 1989 Poland and Hungary were making dramatic changes, with Gorbachev signaling acceptance of even those changes with which he disagreed.

In East Germany, the leader Erich Honecker was from the old guard, aloof and convinced by his own ideology.   He ignored or didn’t even understand how weak the East German economy was, and he dismissed dissidents as “immoral” for rejecting the state.  Even as East Germans fled to the West through Hungary and Czechoslovakia in September and October of 1989, he thought the problem minor.   As protests within East Germany mounted, he decided to end them with the “Chinese solution,” refering to the June 4, 1989 Chinese crackdown on their protesters.

But Gorbachev had convinced Honecker’s subordinates to torpedo such efforts and remove the aging leader from power.   Honecker’s orders were ignored, and on October 17th he stepped down.  The new government then tried to convince the public it would reform the system, yet protests continued to grow.  By November 4th a half a million filled East Berlin’s Alexanderplatz to demand change.   Then, on the evening of November 9th, it got surreal.

Gunter Schabowski, a member of the Politburo and East German press spokesman, was giving a press conference.  It was to end at 7:00, but at 6:53 an Italian journalist asked about travel between East and West Berlin.   Schabowski had papers about travel between East and West Germany (not internal Berlin), which was an issue to be decided at a Politburo meeting later that evening.  He thought, however, that the paper was part of what the journalists had been given, and was already in effect.  He read that travel would be allowed.   When asked when it starts, he looked at his paper and read ’immediately’ (unverzueglich).    The journalists weren’t sure what to make of this, and a slightly confused Schabowski headed towards his next meeting.   That Politburo meeting was to determine next steps at winning public support, and they left strict instructions not be disturbed.

West Berlin TV praised Schabowski’s unintended announcement and invited East Germans to come over.   East German protest leaders rounded people up to go to the border crossings.  Yet, since no decision to allow travel between the two parts of the city had actually been made, the border guards had their usual complement and orders — kill anyone who tries to cross.  The crowds grew.  East German radio reported Schabowski’s statements.   The border guards called to get orders on what to do, but their calls went unreturned — the man who had to make the decision was a member of the Politburo, in a meeting that could not be disturbed.   As time passed, frustrated guards decided to go ahead and make the decision to open the gates.  East Berliners poured into the West.   Soon they stood atop the wall, chipping away at the structure which symbolized communism — a wall was needed to lock people in, people desperate to escape the “workers and farmers paradise.”

When the Politburo meeting ended and they realized what happened, they knew there was no going back.   Back in 1961 when the wall was built, President Kennedy came to the wall and gave his historic Ich bin ein Berliner speech (and yes, his phrase was gramatically correct), where he made the wall the symbol of communism:  A repressive system that walls their people in, in contrast to the freedom of the West.   When that symbol was breached on November 9th, East Europeans realized that the power to change their countries was in their own hands, and within two months Eastern Europe was transformed — mostly in a peaceful manner.

What is also striking about the fall of the wall is how it emphasizes the power of the people, not the governments.  It was average East German citizens trying to escape through Hungary who started the crisis, and by October East Germans were willing to endure Stasi beatings, arrests and pressure to keep protesting and demanding change.   They left the leaders speechless, they had no idea what to do to fix things.   It is especially fitting and a bit ironic that a mistake made by a press secretary would lead to the wall’s demise — it shows how little control the government has when the people are willing to take charge.

Many people down play that day.   Perhaps I magnify its importance because of my emotional connection to Germany and Berlin.  I had been in Berlin in August of 1989, and visited the East.  I recall the vast differences between the two parts of the city, and how sad I felt as I truly understood the meaning of the Cold War division.  I talked to Germans who had tragic stories of families and loved ones divided by the wall, sometimes never seeing each other again. 

I heard about the news driving in to the University of Minnesota on November 9, 1989.  I took the elevator to the Poli-Sci offices on the 12th floor and started telling people what was happening.   There was no internet news yet.  A number of us went to the Lippincott room which happened to have a television.   We tuned in and watched the scenes as people now were atop the wall.   I realized I had to go home.   The emotion was sweeping me thinking about the drama of the change and how totally unexpected it was.   Experts on East Germany from all major political parties and some major research institutes had told me that summer that this kind of scene was impossible.   The experts were caught off guard as well as the politicians.

I got home to my basement efficiency apartment on Lyndale, Avenue, and watched the scenes and interviews on my small portable TV with rabbit ears, letting tears roll down my checks as I was amazed at the meaning of these events, so glad I’d taken the chance to see East Berlin a few months earlier, just before things started to unravel.  I was there literally in the final days of the “old order,” a week before events in Hungary and protests at home began.    Watching history being made I felt a deep and immense sense of joy.

It was truly one of the great stories of the 20th century.   The people take control and overthrow a regime that had oppressed them for half a century.   A system in economic collapse falls peacefully.  And though there would be problems in the transition to something new, and many in the East still believe western style capitalism goes too far the other way, nothing can diminish the meaning and drama of that day.

November 9th is an odd day in German history.   On November 9, 1918 Philipp Scheidemann proclaimed that the Kaiser had abdicated and Germany would have a Republic.  On November 9, 1923, in the midst of the great inflation, Adolf Hitler failed in his attempted Beer hall Putsch.  On November 9, 1938, the Nazis started the wave of violence with the famous Kristallnacht, attacking Jewish shops and buildings.    In a way, November 9, 1989 symbolically ends that story.   The birth of Democracy in Germany, followed by the rise of Hitler, the violence of the holocaust, and the subsequent division of the country and Europe.  That chapter of German (and European) history finally ended twenty years ago today.

This week the House of Representatives is taking up their own health care measure, a $1.2 trillion bill which so far has the endorsements of both the American Medical Association (AMA) and the American Association of Retired Persons (AARP), two very important organizations representing the medical community and the elderly (though AARP welcomes anyone 50 or over).    House Speaker Nancy Pelosi is wheeling and dealing to get a vote by Saturday; though there are over 280 Democrats, many moderate and conservative Democrats dislike the cost and scope of this bill, she needs to find one palatable to at least 218.

While political junkies find this fascinating inside politics, most people see it as a side show.   Senate moderates in both parties have no desire to pass something as broad as the House bill, and so more attention is placed on the threats made by Joe Lieberman or Olympia Snowe to resist something too ambitious.   But what if the White House has made an unannounced change in strategy?   What if the Obama Administration, recognizing that the drawn out effort to pull in moderates and build something bi-partisan is only hurting Obama’s credibility and helping the GOP energize its base, decides to forego bi-partisanship and get passed the best bill they can pass?

In that case, the Senate would pass a bill based on the procedural maneuver of “reconciliation.”   Although the purpose of reconciliation, as put in the 1974 Budget bill, was to allow contentious bills to by pass filibusters if they are needed to cut spending, it has been used far more broadly.   Most recently President Bush used reconciliation to drive through his second tax cut, with Vice President Cheney breaking a 50-50 Senate tie.

If the Senate uses this procedure (no doubt with Joe Biden presiding), the Democrats need only 50 votes to pass the bill, Biden can break any tie.  That means they can lose up to ten Democratic moderates and still win the vote.   The Republicans will scream “foul,” but the Bush tax cut will be shoved back in their faces.   The public virtually never gets incensed about parliamentary procedure anyway, so the big story will be how close the vote might be.

This could play out in three ways.   First, once the House passes something, the possibility of reconciliation of a bill like that from the House could hang in the air as an unstated threat, subtly putting pressure on moderates.   Pundits would talk about it, but Obama would insist he still wants to find bi-partisan compromise.   However, it’s also possible that Majority Leader Ried could make it clear that if the GOP doesn’t give the Senate an acceptable bill to pass, he’ll use reconciliation to pass the House version.   Theoretically this could be done to pressure moderate Democrats and Republicans to say “if you don’t do something to get your concerns into a bill acceptable to us, we’ll ram this down your throat.”

At that point, the Republicans would have to wonder if it’s just a bluff — will they really pass something so major on slight vote margins?   This could also be used to get something this year rather than next year.   That would be an overt threat, with the White House playing hardball.

However, there is a third possibility.   What if Obama has given up on the Senate moderates, and decided to get something through sooner rather than later?  What if Reid’s statement that a bill may not come until next year, and the continuing emphasis on moderates is really a diversion to prevent people from seeing just how important the House vote on Saturday might be?

Here’s how that could play out:  The House passes a bill by a relatively narrow margin.   Reid, having already conferred very secretly with top allies in the Senate and White House, would see if he could patch together at least 50 votes for a House like version of the bill.   If he could, we could see dramatic action in a relatively short time period, with health care reform passed this year — maybe even this month.

I’m not predicting this will happen, nor do I know if the Senate has fifty votes for something akin to the bill in the House.   But at this point in time Obama is not helped politically by having this stretch out, and he needs accomplishments.   He has one year before the Mid-term elections, and needs to move on other matters currently put aside due to the health care conundrum.   Doing this quickly — and even a bit on the sly to catch the opposition by surprise — would have the added benefit of limiting the time the lobbyists have to really pressure Senate Democrats.  Many in the House might vote “yes” for Pelosi, thinking that the bill is just setting up negotiations with the Senate in the future.

All this is unlikely.   Moreover, it’s hard to imagine them working it in this way without any leaks.  Still, if Obama and the Democrats need a game changer to shake up the political world and re-take the initiative, an unexpected success on health care legislation would be a dramatic statement.

President Obama finds himself in an almost surreal situation.   He leads a country that stands at the abyss of a major economic collapse, with massive debt threatening the foundation our system, yet the politicians in the House and Senate are unable to come together and try to figure out a way to overcome this mess.   In part this is because the two sides have different perspectives about the world, but in part it is because Americans, including our political leaders, remain in denial.  The US is too big to fail, after all.  China needs our markets, the dollar is still dominant, and we’re the center of the (wounded) world financial industry.

Perhaps.   But twenty years ago this very month the breaching of the Berlin Wall by East Germans wanting freedom (more about that on November 9th) harkened the collapse of the Soviet empire; no country is really too big to fail.  France in the late 18th century was the dominant European power, whose economy had been the most successful in Europe.  Yet as the French refused to change with the times, unsustainable imbalances in their system led to bankruptcy and ultimately revolution.   They didn’t see it coming for the same reason the Soviets didn’t — they were so used to being a major power that the idea of collapse was preposterous.

The US faces a similar threat.   If the lessons of the past are any guide, the economic policies of massively increasing debt to create a short term stimulus will fail.   The most dramatic example of such an effort came in Nazi Germany between 1933 and 1938 (and NO, I’m not calling Obama a Nazi!).   Germany experienced a short term boom, and became convinced their new leader was a miracle worker.   Soon it was clear that this boom would go bust, leaving  Germany’s leaders to choose between war and the collapse of the Nazi regime.   Hitler chose the former (and, of course, had been planning war all along).

Obama’s debt is different.  The stimulus is not based on military spending (which tends to ultimately be a drag on the economy), but infrastructure investments and efforts to create jobs.   The gamble is that this will work, and make the US productive again.  During the past thirty years we’ve moved from being a strong manufacturer of world goods to a consumer of cheap goods made elsewhere.  We consume, but don’t produce.   Obama’s plan is focused on opening new avenues of production — the green economy, new sources of energy, innovative products — to increase our production and allow us to overcome the imbalance.

To pull this off he has to handle three problems.   One involves radically reducing US military commitments abroad, which I won’t discuss today.   The second is the need for radical transformation of our costly health care system which is currently spiraling into a severe crisis.  Insurance premiums are skyrocketing, hospitals are losing money, and millions remain uninsured.   Solving this in a time of economic decline will require us to find a way to ration health care, reduce compensation to doctors, minimize duplication of services, and prioritize care.   All of that sounds scary, so neither party in Congress really tackles the issue.   My hunch: Obama has to get some kind of health care reform which can be built upon as the inevitable deterioration of the system occurs.   Whether its triggers or opt outs or whatever, he needs something he can build upon.   Clearly neither the public nor the Congress comprehend the scope of the problem or, if they do, they prefer to look for short term political gain rather than long term solutions.

Third, there must be aggressive cuts in debt and deficits.   This seems counter-intuitive if we need an economic stimulus.   The problem is that as soon as the US starts getting out of the recession, the inflationary pressures are going to be immense, and the dollar may fall precipitously in value.   In the past the position of the dollar as the world’s global currency allowed the US to essentially export inflation.   This time the imbalances are such that we can’t do that any more; we actually have to figure out how to live within the normal laws of economics.  Moreover, a health care program will cost money and stimulate the economy as well.   If not matched with spending cuts (or tax hikes), inflationary pressures will mount.   There is real disagreement about the possibility of hyperinflation, which is runaway inflation that destroys the savings (and retirement plans) of the public.   To avoid that the US would have to do something like default on its loans, which has other severe ramifications.   In any event, this is a risk we can’t afford taking, we have to find a way to cut debt as soon or sooner than the economy starts bouncing back.

Part of avoiding this is psychological.   Global bankers want a stable dollar and are skeptical of both the Euro or the ideas floating around of some new global currency.  If they have reason to think inflationary pressure will ease, they may act in a way that helps the greenback keep value.   Obama thus needs a plan of spending cuts (or tax hikes) which is realistic and do-able.   Then, he has to pull it off.

To do all this — alter our military commitments, transform the health care system into something sustainable, and work on a mix of budget cuts and tax hikes — will take all the skill any politician could muster.   Obama will need to sell the country on voluntarily taking some pretty strong and distasteful medicine, and he can’t do it with happy talk.   When President Bush took us to war, he did so with flippant optimism.   Obama can’t make that same mistake if he is to pull this off and bring America back from the economic abyss.  He has to tell it it like it is, without worrying about soundbites or political ramifications.

Right now, I get the impression that they are convinced that “we can’t handle the truth” and thus the warnings are vague, the optimism superficial, and more is being hidden from us than made clear.   You can find the reality of the situation if you dig, and there have been documentaries and well publicized reports about the scope of the problem.  But you have to want to look for that, otherwise, it all gets buried by the political noise.

Barack Obama needs to refocus the country on why he was elected — to bring change, and to deal with immense problems left by  not only the last administration, but really the last four administrations.   He should show graphically the state of the budget, the upcoming costs of entitlements, the problems in the health care system, and the devastating consequences doing nothing will have.  He should note how close we came to economic collapse in 2008, and state that we are literally at a crossroads, America could go into steep decline if we do not act aggressively.

He should invite Republicans and Democrats to work together, to put aside ideological purity for the sake of finding common ground to find solutions.   The idea that two parties should fight on “principles” (an oft abused word) and have the “winner” govern in a “pure” sense is un-American and irrational.   Rather, we compromise and find something neither one really likes, but that we can live with.   All sides will have to make concessions, and chart a new path for America.   It has to be honest, bold, and create an atmosphere for real initiative.

I still sense that most people don’t realize how bad the situation is.   Most seem to think the economy will start moving again, and the debt, well, trillions, billions, tens of trillions…it’s just numbers!   But it’s not just numbers.  The fundamentals of the economy are completely out of balance and in danger of collapse.   Unless we work now, we’ll get to a point where solutions become almost impossible and we’ll be forced into a massive downsizing.   President Obama, it’s time to start doing what we elected you to do!

Last night by a margin of about 53-47% the “Yes on One” group seeking to overturn the state legislature’s approval of same sex marriage scored a victory.   What might have been an historic vote to allow same sex marriage turned out to be just another setback.

Reading Facebook last night and this morning as the results became clear, the disappointment among so many students (and faculty) was evident.   Many said they were “ashamed of Maine,” wondered “how people could be so bigoted and closed minded,” and found it hard not to “hate the haters” who insult and degrade a segment of the population for no reason.   “Gay marriage will harm no one,” one person remarked, “but not allowing it harms families and loving couples.”  Many of these people were the same ones who were thrilled one year ago today when Barack Obama won an historic election for the Presidency.   Within a year they learn that political activism can inspire great highs and great lows.   So what happened, what does this election mean?

First, as I noted awhile back in the post Culture Shift, the very fact this election was so close is a sign that the world of 2009 is far different than the world of 1999, when Mainers rejected a law to end discrimination against gays in work, housing, and other similar circumstances.  At that time, a same sex marriage referendum would have had no chance.   The gay rights measure did get passed in a referendum a few years later, and its worth remembering how upset so many people were when the first attempt was defeated.   The game gets played again.

Go back even farther — though not much farther — and you can find a time when interracial marraige was seen with the same kind of disdain by a large part of the population that same sex marriage is today.  Yet over time that stigma slowly changed, and now we have a President who had a black father and a white mother.   That slow change, of course, came from political activism that suffered numerous setbacks, but yet slowly moved forward.

Not only do cultures change, but once change starts it’s hard to hold back.   Anti-gay efforts have become less ambitious in recent years.   In the 70s they wanted to fire gay teachers or anyone who helped them, in the 90s they wanted to stop civil unions, and this year the “Yes on One” people claimed that civil unions were a legitimate alternative to same-sex marriage.   Each battle is hard fought, such as the non-discrimination battles a decade ago, but movement remains inexorably towards equality.  Especially when one takes into account changing values amongst young people, I suspect within decades we’ll not only have same sex marriage, but an openly gay President.   People will look back at this form of discrimination the same way that we now look at bans on interracial marriage as odd.

Patrice in a comment to yesterday’s post ended with a five word sentiment many share:  “I just don’t get it.”   How can people be so cruel to others in our society, denying them equality, and acting as if their sexual orientation makes them inferior, evil, dangerous or second class?   That seems so profoundly ignorant and hateful. And, to be sure, there are bigots out there whose homophobia and hatred eats them from within.   It’s tempting to hate them back, but better to pity them.

That does not describe 53% of Maine, however.   Most who voted yes are not hateful bigots.   The “Yes on One” people approach the issue from a whole different perspective.  They are less concerned with the individual than with the collective cultural identity of the people.   Conservatism is at base a collectivist ideology seeing society as a kind of organic whole, held together by cultural norms and traditions.  True, in the hyper-capitalist United States conservatives have also embraced free market economics, creating a kind of schizophrenic collectivist libertarianism (whose consequences were seen this election in the 23rd district of NewYork).  But real social conservatives are at base worried about society over the individual.

To them, marriage is not just a legal status, but  a social institution built around the family which has shaped and defined the core of human existence since the beginning of recorded history.  And, though some cultures have embraced polygamy, child brides, and other things we abhor, marriage has never been associated with homosexuality until recently.  To them, this is a radical jolt to their understanding of the world and how it operates, and seems to be an unreasonable effort to change society in order to ‘appease’ the interests of a minority — a minority they often think are acting ’sinfully’ or ‘unnaturally.’  I know many such conservatives who are not hateful people, and who grimace when told the impact their view has on gays — their intent is not to hurt.  They see same sex marriage as a radical upending of tradition and what they consider the natural order of things.  It seems like a minority is trying to change how their world operates.

Those are legitimate perspectives.   One can’t just dismiss those who want to protect traditions as they know them by calling them names or labeling them bigots.  Most of them are being presented with perspectives that they did not grow up with, and which seem strange to them.  Some will never give up their opposition to change, but many if not most can over time be persuaded.

What the “No on One” campaign did so well is they humanized the issue.   They showed same sex couples and their families, and moved away from abstract reasoning to show those who are skeptical the human impact of discrimination.   They had lobstermen, pastors, Catholics, the elderly, and numerous people from every day life in their images and commercials.   This wasn’t about “changing marriage,” it was about letting other loving couples have marriage as well.   Traditional marriage was not under threat, traditional marriage is what same sex couples want.

So despite my disappointment — I really thought the ‘No’ side would win — I feel like this was still a small movement forward.   Even Ari Fleischer, former Press Secretary to President George W. Bush, said that while he opposes same sex marriage, he believes the culture is clearly heading that direction.   Civil rights movements always meet resistance, cultures change slowly, and there will always be those who use fear tactics and predictions of dire consequences to try to convince people not to let go of the status quo.   But things are changing.  And ultimately, I don’t think those who won the election yesterday will be able to stop the tide.   I would not be surprised if within five years same sex marriage is legal in Maine, and within 20 years young people will think it odd that it ever was not.

Other elections: Though I’ll have more on those and what Obama needs to do moving forward in coming days, the surprise victory of Owens in NY -23 is a gut punch to the “teaparty” movement, and made what was overall a bad evening for the Democrats not quite so bad.   They lost two Governorships, but gained a seat in Congress.   Still, I was hoping for the second year in a row to be writing about an historic election.   That’s not been canceled, just postponed.