Let's debate "radical centrism" and the New America Foundation

[BrainGlutton]

There’s a new political tendency emerging in America: “Radical centrism.” It appears to defy “left-right” categorization in cultural as well as economic terms. It expressly rejects socialism, but many of its proposals are welfare-statist or redistributive in nature. It is based on a conception of American nationalism – variously labeled “national liberalism” or “democratic nationalism” – which celebrates a melting-pot conception of American national identity, and rejects Wilsonian “liberal globalism” but also rejects the neoconservatives’ militarism and unilateralism. It is rather technocratic in tone, or at least technology-oriented, in that it treats as important political issues problems that are the products of recent technological progress, and which Democratic and Republican leaders hardly even acknowledge as issues – e.g., regulation/deregulation of the airwaves, and the potential social consequences of genetic engineering on humans.

From http://en.wikipedia.org/wiki/Radical_centrism:

Radical Middle Politics

The political application of radical middle philosophy is represented by a cluster of loosely related terms and movements: radical middle, radical centrist, responsive communitarian, third-way, etc. As a relatively grass-roots movement, especially in the United States, there is no definitive statement of radical middle politics. A primary recurring theme, however, is the idea of “sustainably improving choices.” This is reflected in the goals of various radical middle groups, which they describe as:

Maximize citizen choice, individual empowerment, and overall human potential

Facilitate greater involvement in the political process (e.g., through referendums)

Be of genuine help to those in the developing world

Emphasize epistemic virtue, so that politics are grounded in objective reality

Build character by promoting conscious moral choices

Expand community by people creating value for each other in reciprocal relationships

Possess a foundation of traditional values and Common sense

enlibra, which presents itself as the productive middle approach to environmentalism

<snip>

While the term radical center has been used in various ways since at least the 1970s, it first had a major influence in the 1990s due to the Reform Party and Ross Perot, who were frequently described as representing the radical middle due to their attempts to partisanize those portions of the American electorate. Despite a strong showing in the 1996 U.S. Presidential Election, the Reform Party is nowadays not generally perceived as a major player in national politics, though they have impacted state elections – notably with their Jesse Ventura becoming governor of Minnesota.

Today, the term radical middle is most commonly associated with a movement that does not explicitly claim descent from the Reform Party or its ideas, but rather draws its inspiration from the book The Third Way by Anthony Giddens (1998) and Giddens’s highly-regarded follow-up book The Third Way and Its Critics (2000). In the U.S. third way politics is most actively represented by the New America Foundation and its book by Ted Halstead and Michael Lind, The Radical Center (2001). Subsequent introductions to radical centrist politics include, most notably, Matthew Miller’s book The Two Percent Solution (2003) and Mark Satin’s book Radical Middle: The Politics We Need Now (2004). (Interestingly, Lind was once a promising young conservative, Miller was once an aide in President Clinton’s White House, and Satin was a co-author of the U.S. Green Party’s founding document from the 1980s, “Ten Key Values.”)

Positioning

Radical centrists are related to what is sometimes called the Vital Center in American politics, and similarly claim to be drawing on the best of both sides. However, they differ significantly from traditional centrism, which prides itself on moderation and seeking political consensus amongst the parties; radical centrists, for example, are quite radical and populist in their stated policies. Radical centrists also can be divisive, as opposed to the non-partisan approach of traditional centrism. This leads to many moderates questioning whether radical centrism deserves to be called centrist at all (perhaps analogous to how the Left and Right often distance themselves from their respective radical wings). For their part, radical centrists are quick to dissociate themselves from traditional moderates, whom they often contrast as the “sensible center”, or deride as the “squishy center.”

Radical centrists can be found in both left-wing and right-wing political parties, but (like other centrists and independents) are usually penalized for being out of step with that party’s dominant ideology. This leads to tension between what might be called separatist factions, who want to shed an unhelpful party label in order to run as independents, and puritans who want to reform (or take over) the party from within. This tension is particularly acute in countries with strong two-party traditions, since it is difficult for third-party candidates to win office or create governable coalitions absent significant electoral reform.

Radical centrists see themselves as building majority consensus for radical reforms by sidestepping (or confronting) what they consider the obsolete, polarized and non-productive ideologies of (social Conservatism/economic Liberalism) and (social Liberalism/economic Conservatism). Radical centrists assert that their principles represent the fusion of the best aspects of Conservatism and Liberalism, and thus interpolate at the level of philosophy rather than policy. They claim these ideological moorings (the ‘root’ behind their sociological use of the term ‘radical’) provide the basis for their critique of society, government and other political movements.

The most important American radical-centrist organization at present is the New America Foundation, a policy study institute which has been described as “the Silicon Valley’s think-tank.” Its website (http://www.newamerica.net/index.cfm?pg=home) discusses the following NAF projects:

The American Strategy Project – http://www.newamerica.net/index.cfm?pg=section&secID=9:

No new, compelling vision of America’s role in the world has emerged to replace the obsolete bipartisan Cold War consensus. Neither the Clinton administration’s market-driven approach to foreign policy nor the militant unilateralism of George W. Bush’s administration is an appropriate or sustainable strategy for the United States. The most promising alternative would combine tough-minded realism with pragmatic idealism in a new grand strategy joining U.S. support for great-power military and diplomatic cooperation in managing regional crises with an American commitment to promoting social and economic development throughout the global South on a significant scale.

Asset Building Program – http://www.newamerica.net/index.cfm?pg=section&secID=14:

Recent efforts to fight poverty in the U.S. have focused on income support, while ignoring – and in some cases even deterring – the accumulation of assets by lower-income Americans. By contrast, our nation’s public policies provide numerous incentives to upper-income Americans for accumulation of assets, primarily through generous tax breaks for private retirement plans, homeownership, education, business development, and investment. The playing field now needs to be broadened so that all Americans can become owners of assets and enjoy the many benefits they provide. New America’s Asset Building Program develops and advances detailed, market-friendly policy proposals to enable all Americans to meet their asset needs throughout life. These policies include: establishing and funding asset accounts for all citizens, beginning at birth; connecting the EITC to popular savings products such as IRAs and 529s; broadening tax incentives; reforming public and private retirement policies; and expanding financial services to the “unbanked.”

Fiscal Policy Program – http://www.newamerica.net/index.cfm?pg=section&secID=26:

Our nation’s current approach to tax and spending fails all three of the most important tests of sound fiscal policy: the tests of efficiency, sufficiency and fairness. In particular, our largest taxes punish work and saving, the revenues raised are far short of those needed, and even as income inequality has grown, our overall tax code has become less progressive. Our tax code has also become less transparent and more complex, while suffering from a failure of coordination between different levels of government and an overall lack of accountability.

<snip>

. . . In order to promote a more honest and even-handed public debate on fiscal policy, the Program works to improve the way our nation’s tax and spending priorities are framed and discussed. Too often, for instance, tax policy debates focus on the federal income tax in isolation, even though this ignores the many other forms of taxation American families are subject to – from payroll taxes, to corporate income taxes, which are passed on to workers and consumers, to a wide array of state and local taxes. To counter such misperceptions, the Program regularly produces and disseminates consolidated assessments of current tax burdens at all levels of government, and of the allocation of public resources through both direct and indirect spending programs.

Global Economic Policy Program – http://www.newamerica.net/index.cfm?pg=section&secID=4:

Toward a Global Macroeconomic Policy. Enlarging the middle class both at home and abroad requires sustained world economic growth, which in turn depends upon the effective management of macroeconomic policy and of global trade and investment flows. With a current account deficit around 5 percent of GDP, the United States can no longer serve as the engine for the world economy without the buildup of an unsustainable level of international debt. GEPP explores ways to reduce the world economy’s dependence on American consumption and to create a better balance of consumption and investment among the advanced industrialized countries and between the developed and developing worlds.

Building a Global Middle Class in Emerging Economies. Thanks to increasing global integration, more than 60 developing countries have now reached a level of development at which the United States and Western Europe stood at the time they moved to become affluent, middle-class societies. This project will seek to identify the main elements of a middle-class-oriented international economic strategy that would enable many of these countries to evolve into successful middle-class societies over the next decade or two, providing expanded markets for world goods and services, and greatly extending the benefits of globalization. More specifically, GEPP seeks to show how the American and European models of building a middle class in the 20th century, especially the experience of giving ordinary citizens greater access to credit for such purposes as homeownership and small businesses, could be adapted for use in many emerging economies.

The World Economy and International Governance. Sustainable globalization depends upon a system of global governance that can establish rules, resolve conflicts, and prevent systemic crises. The heart of such a system must be effective international and national institutions, supplemented by private sector self-regulation and the moral suasion of global civil society groups. But today’s existing international institutions, created for an earlier era, lack the resources, mandate, and the legitimacy needed to manage the increasing globalization of finance, trade, and information. The result is a serious governance gap that leads to profound problems such as the recent emerging market financial crisis. GEPP is exploring how to fill or close this governance gap with the reform of existing international institutions.

Labor and Environmental Considerations. Disputes and disagreements over the integration of labor and environmental issues into trade- and investment-related agreements threaten to halt future international negotiations, as well as arrest new efforts to address labor and environmental problems. With the goal of identifying and advancing policy proposals for incorporating labor and environmental considerations into the world’s financial architecture, GEPP is seeking to develop practical suggestions on how to integrate labor rights into new multilateral and bilateral trade agreements, and is exploring how to reform the international financial system and the world’s capital markets to better advance environmental goals.

Health Policy Program – http://www.newamerica.net/index.cfm?pg=section&secID=17:

The steadily rising number of uninsured Americans and the highest premium increases in a decade have placed healthcare reform back atop the domestic policy agenda. There is a growing realization that our healthcare problems are systemic; that they burden everyone, not only the uninsured; and that they are increasingly harmful to our economy as well as our health. As a result, momentum for fundamental healthcare reform has been building, with support coming from a surprisingly diverse group of politicians and constituencies. Building on this momentum, New America’s Universal Health Insurance Program will promote a system of mandatory health insurance for all Americans, combined with public subsidies for those who need them. This approach – premised on the principle of “universal coverage in exchange for universal responsibility” – represents the most promising avenue for achieving universal health insurance in the United States. Designed and implemented correctly, it would provide fully portable coverage to all Americans, while lowering insurance costs, expanding consumer choice, raising the quality of care, and freeing businesses from the burden of administering complex benefit plans.

Spectrum Policy Program – http://www.newamerica.net/index.cfm?pg=section&secID=3:

In the emerging information economy, the most valuable publicly owned asset may well be the electromagnetic spectrum – or the “airwaves.” Indeed, recent auctions suggest that spectrum licensed to commercial users has a market value exceeding $750 billion. Yet our nation’s antiquated spectrum policies sacrifice significant public revenues and inhibit the rapid and affordable deployment of wireless broadband access.

To promote a more fair and efficient allocation of the airwaves, New America’s Spectrum Policy Program opposes efforts to privatize the airwaves and advocates requiring commercial licensees to pay fair market value for their use of the spectrum. The revenues from such auctions can best be used to meet civic and educational needs. The Program also promotes greater shared citizen access to the airwaves – particularly for wireless broadband networking with unlicensed consumer devices – and the protection of the Internet’s open and unmediated end-to-end architecture. In these and other ways, New America seeks to help preserve, update, and expand the public interest obligations of our nation’s communications infrastructure in the digital era.

Retirement Security Program – http://www.newamerica.net/index.cfm?pg=section&secID=15:

The overall aging of the American population and the fast-approaching retirement of the baby boom generation compel us to increase our rates of national saving and promote adequate asset accumulation for all Americans. Yet America has been heading in the opposite direction: personal saving rates remain well below their post-war averages, consumer debt has reached all-time highs, and budget deficits continue to mount, further reducing national saving. To put our nation back on a high-savings path and to prepare ourselves for the aging of our population, it is vital to reform both major pillars of our nation’s pension infrastructure.

Our private pension system covers less than half of America’s workers, and provides the greatest savings incentives to those who need them least. In order to level the playing field, every American should be granted access to a tax-subsidized, payroll-deducted retirement account whether or not his or her employer sponsors such a plan. Social Security, meanwhile, faces long-term future deficits as the ratio of workers to retirees continues to shrink. Here, the Retirement Security Program explores reforms that ensure Social Security’s solvency while de-linking the fate of one generation from another, increasing national saving, and maintaining the system’s progressivity.

Work & Family Program – http://www.newamerica.net/index.cfm?pg=section&secID=16:

There has been a sea change in the way American families live and work. In 1960, 70 percent of American families had at least one parent home full-time. By 2000, however, over 70 percent of families were headed by either two working parents or a single working parent. While these new “juggler families” have replaced the traditional family of the breadwinner and homemaker, an equally dramatic shift has taken place in work patterns. The era of lifetime employment with a single firm, and of big employers who provide lifetime security for employees and their families, is over.

American employees have become “global free agents,” competing with workers around the world. They work harder, often having to choose between making ends meet and caring adequately for their children and elderly parents. Those who need flexibility (usually mothers, but also fathers and those seeking phased retirement) often cobble together part-time or other nonstandard work that usually comes with lower wages, no benefits, and less job security. The result is that so many families today are caught in a “Catch 22” between inflexible full-time jobs with benefits, and flexible jobs that carry a “part-time penalty.”

New America’s Work & Family Program conducts research, engages policy makers and educates the public about the pressures on American families and policy solutions to lessen these. The Program works with members of Congress, the Administration, constituency groups, and the media to advance solutions and create a sense of urgency around the problem. In so doing, it provides a new direction in public policy that holds the promise of redesigning, for the first time in a half-century, the basic social contract as it pertains to the American family—offering working parents more flexibility and economic security, while strengthening our nation’s social fabric.

What do you think? Is this better than what our established “liberal” and “conservative” camps are offering us?

[BrainGlutton]

BTW, the NAF also supports pro-multipartisan electoral reforms, such as proportional representation and instant runoff voting. See Steven Hill’s commentary on Gov. Schwarzenegger’s proposed redistricting of California: http://www.newamerica.net/index.cfm?pg=article&DocID=2240

[BrainGlutton]

From a review of The Radical Center, by Ted Halstead and Michael Lind (Doubleday, 2001), at http://www.radicalmiddle.com/x_radical_center.htm:

The post-Seattle radical middle movement is made up of many currents. There is the serious-minded, non-opportunistic faction of the Third Way, whose ideas are well expressed in the recent work of British sociologist Anthony Giddens. There is the communitarian project of bringing people together by crafting policies that “involve much more than a compromise between Democrats and Republicans,” as Amitai Etzioni puts it in his book Next. There is the emerging civic renewal movement – brilliantly delineated by Carmen Sirianni and Lewis Friedland in Civic Innovation in America – which differs significantly from traditional social justice movements by seeking common ground with both City Hall and local businesses.

Fueling such movements are rampant desires that have as yet no formal political vehicle – the desire of frustrated citizens to clean up the political system, stop corporate malfeasance, and restore civility to daily life; the near-universal Gen-X desire for greater individual choice, greater economic fairness, and greater global connectedness (see young British economist Diane Coyle’s books The Weightless World and Paradoxes of Prosperity); and, not least, the longing among grizzled survivors of the Sixties Generation to play the role of political synthesizers and healers – an aspiration beautifully expressed in Paul Ray and Sherry Anderson’s The Cultural Creatives, and actually realized, at least on paper, in Walter Truett Anderson’s All Connected Now.

Into this glorious cacophony comes Ted Halstead and Michael Lind’s The Radical Center – the first explicit and systemic introduction to radical middle ideas by U.S. authors – and in most ways it does not disappoint.

The writing is crystal-clear, the arguments as carefully crafted and pragmatic as those you’d find in books from Brookings or the American Enterprise Institute. No surprise there. After capacious intellectual-professional journeys, the authors are now president and senior fellow, respectively, of The New America Foundation, a three-year-old Washington, D.C. think tank specializing in new ideas from young or undiscovered voices. (Halstead is all of 33; Lind, 39.) The Foundation’s 20 fellows publish in radical, liberal, and conservative periodicals, and money is cascading in from liberal and conservative foundations.

The Radical Center is elegantly structured. Definitions come early, and are very similar to those used by writers like Coyle and Giddens. The term “Radical Center,” we’re told, is meant to instantly differentiate the authors’ “principles and policies from those of the Democratic Left and the Republican Right.” The word “radical” conveys that the authors “are interested not in tinkering at the margin . . . but rather in promoting, when necessary, a wholesale revamping” of institutions.

Next comes the heart of the authors’ argument, and if you’re an old activist you’ll smile at the quasi-Marxian nature of it. The “Information Age” – based on brainpower – has made us “increasingly competent” as citizens, but our “basic social contract, our political parties, our governmental programs, and our educational and even charitable institutions are designed on the premise that highly educated experts should be in charge of relatively passive, ignorant, and incompetent people. A century ago this paternalistic approach may have promoted progress. Today it retards progress.”

The authors then suggest “design criteria” for an “Information Age political program” – in effect, a program for the competent masses. First and foremost is “increasing the amount of choice available to individuals . . . : voting choices, educational choices, medical choices, retirement choices. . . .” Another criterion is providing a “true safety net” for those who make unfortunate choices.

The policy chapters – on the economy, governance, and community, respectively – don’t just bring the design criteria down to earth. They also demonstrate with great sophistication and panache that the radical middle has arrived as a distinct and cohesive political position.

A radical centrist economy would stress fairness, freedom, and personal responsibility rather than security-as-drudgery. That’s why each of us would receive a $6,000 grant from the government at birth (basically untouchable by mom and dad), which with interest would climb to $20,000 by high school graduation. Later on, as adults, we’d each be required to purchase a “basic” private health insurance policy (we could always buy more if we chose), and the government would subsidize basic health insurance for the poor. We’d also be required to save 5 percent of our gross earnings for retirement (Social Security would be eliminated), and those whose retirement incomes fell below a certain “floor” would receive government assistance. Thanks to these and similar measures, say the authors more than once, each of us would have more real options in life – and corporations would have far fewer employee administrative costs, enabling them to better compete in the global economy.

Governance would change equally deftly and dramatically in radical centrist society. For example, the federal government would pay for most or all K-12 education – it’s the “only way to ensure that all students have access to a quality education on a relatively equal basis,” say the authors, sounding very much like the Washington Monthly. In addition, the progressive income tax would be radically simplified – and made more truly equitable – by eliminating most tax deductions, credits, and exemptions. Here the authors differ profoundly from Giddens and other radical centrists who advocate generating less tax revenue from income and more from consumption of goods and “bads” (energy, waste, transport).

Like Sirianni and Friedland, Halstead and Lind emphasize that community need not mean balkanization. For example, to combat the “racial divide,” the authors would pursue affirmative action “by race-neutral methods like better primary education for all Americans.”

A closing chapter scours the U.S. for a “coalition of the Radical Center” – and finds the elements for one among “disaffected voters,” “the newly wealthy and influential elites of the technology sector,” and “young adults.” The authors’ analysis differs significantly from that of Ray and Anderson, who focus not on identifying promising social sectors but on the potential of certain broad values (e.g., altruism, globalism, ecology, self-actualization) to cut across social sectors. Both analyses are provocative, and both seem to be pointing to the same 50 million people.

[Maeglin]

This is a lot to chew on, BrainGlutton. I am precisely in this group’s target market, and unsurprisingly, many of these ideas resonate intensely with me. To stimulate actual debate, perhaps we should just choose one of these proposals to dissect.

[BrainGlutton]

@Maeglin

To stimulate actual debate, perhaps we should just choose one of these proposals to dissect.

How about the Asset Building Program? It’s a redistributive proposal, but you can’t really call it socialist. Rather, it aims to strengthen capitalism by giving every citizen a real ownership interest in it. That’s how Henry Ford thought: “No man who owns his own home can be a Bolshevik.” From “The $6,000 Solution,” by Ray Boshara, Atlantic Monthly, 2/1/03, http://www.newamerica.net/index.cfm?pg=article&DocID=1146:

In the effort to shrink the huge wealth gap that has developed over the past decade or two, the first step is straightforward: we should extend the same opportunities that better-off Americans now have to everyone else, through refundable tax credits and matching deposits to encourage college education, home ownership, business ownership, and retirement saving.

But the next step has to be bolder: a Homestead Act for the twenty-first century. Here’s how it might work. Every one of the four million babies born in America each year would receive an endowment of $6,000 in an American Stakeholder Account. If invested in a relatively safe portfolio that yielded a seven percent annual return, this sum would grow to more than $20,000 by the time the child graduated from high school, and to $45,000 by the time he or she reached thirty (assuming that the account had not yet been used). Funds in the American Stakeholder Account would be restricted to such asset-building uses as paying for the cost of higher education or vocational training, buying a first home, starting a small business, making investments, and, eventually, creating a nest egg for retirement. Withdrawals would of course decrease the account; work and saving would build it back up. Family members and others could also add money to the account.

Although the program would be universal, giving every American child a tool to help meet his or her lifelong asset needs, it would especially benefit the 26 percent of white children, the 52 percent of black children, and the 54 percent of Hispanic children who start life in households without any resources whatsoever for investment. For these children and others, an asset stake would provide choice, a ticket to the middle class, and, most important, hope.

Prime Minister Tony Blair has proposed a variation on this idea in England, and it could be done in the United States for only about $24 billion a year—a very small amount by the standards of federal programs, and only about a sixth of what the government gives in tax breaks to corporations every year. The American Stakeholder Act, like the Homestead Act and the GI Bill before it, would be a smart investment in our nation’s future. Nearly a quarter of all American adults today have a legacy of asset ownership that can be directly linked to the Homestead Act. The GI Bill has generated returns to our country of up to $12.50 for every dollar invested. If asset-building were started at birth, even greater returns could be expected from the American Stakeholder Act. Moreover, research indicates that asset ownership increases educational attainment, civic involvement, health quality, and life satisfaction, while decreasing marital breakup. And assets, unlike public assistance, can be passed from one generation to the next.

Americans readily tolerate inequality of outcomes, accepting that it’s a necessary by-product of how we reward the hard work, initiative, and creativity that underpin our much envied economy. But we should not accept inequality of opportunity. Expanding the ownership of assets through a program of American Stakeholder Accounts would help to ensure that wealth inequality in one generation does not become magnified into gross inequality of opportunity in the next.

[Ludovic]

I believe that before we enhance capitalism in America, we should implement capitalism. The true owners of corporate America are not the stockholders, it is the managers. If we gave back the ownership to the capitalists, it would improve the returns in the stock market, on average. (There’s always irrational exceptions.)

As it stands, it’s nearly impossible for stockholders to change the corporate governance structure to oust the overpaid, underperforming managers. These managers vote themselves huge bonuses and are not held accountable for bad judgements, do not return profits to the stockholders, and watch each others backs to keep each other employed, or if not employed, at least leaving the company with a hefty sum of the stockholders’ moneys.

If we were to make sure that, at the very least, the outright deceivers get hard time, it would improve both our productivity and faith in our nation. We should go further and demand a true voice for the owners of the company rather than the lords, usurpers.

The $6,000 proposal would not be, as it stands, a true stake in ownership of America, as previously explained, especially if one cannot invest it in real estate or material objects.

And by no means would a “safe” investment yield anywhere close to 7%: that is the expected return of stocks for the foreseeable future. And who knows if American stockholders will eventually demand a return to true profits rather than “reinvestment” in the companies, which by definition are economically inefficient since only a handful of people get the choice in how to spend them, rather than many in the case of dividends.

Therefore, I also think that somehow equating the tax benefits of dividends versus reinvestment by the companies would greatly lead to a stronger faith in the American Way and a greater economy. Whether it would come about by increasing corporate taxes or reducing personal ones, if Americans knew that they could have more of the profits for themselves to direct as they see fit with no tax penalty, even the current executive stranglehold would not be able to prevent dividends from being increased. And the power of stockholders could not but increase thereafter with their newfound access to the new moneys.

But more important is reforming the corrupt corporate governance structures.

[BrainGlutton]

@Ludovic

I believe that before we enhance capitalism in America, we should implement capitalism. The true owners of corporate America are not the stockholders, it is the managers. If we gave back the ownership to the capitalists, it would improve the returns in the stock market, on average. (There’s always irrational exceptions.)

But how is that possible in practice? Most investors have no particular interest in managing the companies in which they happen to “own” a “share”; their stock certificates are nothing but casino chips to them. A given investor might buy and sell shares in hundreds of companies in the course of a year, and might be unable even to name all the stocks in his portfolio on a given day.

[Maeglin]

Lunchtime and SDMB time.

I submit that there are two ways of analyzing this proposal. The first is to test whether this asset scheme proceeds consistently from New America Foundation’s principles and whether it meets our own standards of fairness and justice. The second, which I think I would rather take up here, is to analyze whether the projected consequences of this scheme are consistent with its goals.

For now, I accept that this plan is consistent with NAF’s mission and, to me, is essentially fair. I daresay I am even excited about it.

Practically speaking, it does a little worse.

1. Financing for this scheme is not straightforward. Between April 2000 and July 2004, there have been an estimated 17,198,187 births. This plan rapidly becomes costly, especially since initial allocations need to be adjusted for inflation. This financing really has to be generated by current revenue: borrowing on the margin is dangerous for an individual, and utterly irresponsible for government, especially given the possibility that increased borrowing may correlate with higher interest rates, thus crowding out private sector investment.

Making room using current revenue would have to be offset by a concomitant reduction in funding in other places or some other creative funding vehicle. Higher taxes do not seem to be consistent with this group’s core fiscal principles. I am not certain how I feel about trading off what few current benefits I feel I have for America’s yet unborn.

2. The idea of a seven percent return on a “relatively safe portfolio” is humorous. One does not generate seven percent out of thin air nor by peddling government paper. This return is only as sustainable as our productivity growth. Historically, this ain’t so great, nor does it appear to be sustainable.

3. The restricted nature of access to funds is also problematic. Before I pass judgment, I would have to see some proposed criteria that are more concrete than the ones listed below. Rules of this type can pervert incentives or induce people to make unhelpful decisions.

4. Last but not least, what entitlements will we reasonably be able to eliminate if this act is implemented?

[mswas]

In my community, we have been working on implementing models to share our resources amongst people around us. We become economically dependent upon one another, but to a large degree it creates a common bond that gives us more freedom as our network expands.

We’ve taken the commonality inherent in the underground electronic dance culture, and built more and more out of it. We use each other’s networks and expertise to enhance our own professional lives, and we use collective manpower to drive down the costs on projects we all hold dear to our hearts. There is a large movement across the board in this arena, and my personal network covers New York, Chicago, San Francisco and we are working on LA, Orlando and Albuquerque. Large festivals such as Burning Man oftentimes act as conventions for these activities.

To bring this around to having a point, my point is simply that I don’t want to see the policymakers DO anything to help me except to retract policies that hinder me. I think that the only way to promote sustainability is to build it up from the ground level, so that’s what we do. Our network is rather large and it expands exponentially as we don’t just introduce new people, we introduce new networks into the fold. Applications such as Friendster and MySpace facillitate this culture quite well.

So overall I tend to agree with this end of thinking on policy, but I would rather see a more community oriented ground up approach than to see more energy wasted trying to change the top. When you try to change things at the top you have to affect the entire populace to be successful, but when you change things at the bottom, you only have to change your little realm to be successful, and then you connect to other networks that have been moving in the same direction as you have, eventually market saturation occurs and you have changed the macro, rather than trying to turn the entire macro around at once.

I think the government needs to get it’s hands off of my ASSets. I also think that there is a myth of the middle class. I’d rather see resources divided up tribally amongst communities that network with one another. There is no need for every family of four to own their own house, but a cooperative community can own a whole building. The way it works now in many cases however, is that the building is made up of shareholders who have no commonality other than being a shareholder in the cooperative. I’d like to see more cooperatives built with purpose. As I used myself as the example, I’d turn my own particular cooperative into a multimedia collective if I had the money to implement it. Getting that money is down the road and we are making plans to be able to execute such a maneuver. Not only does this defray costs by sharing resources and utilizing collective buying power, it also reduces the need for redundant resources. The collective can own a toolshop and run it’s own servers rather than each person needing access to an individual drill for instance. So the environmental cost is driven down, while the standard of living is driven up. Not only that, but the individual domestic skillsets come into play, and the person who isn’t as good at eating healthy is more exposed to the people who are good at eating healthy. I’ve seen these principles in action, and have worked to implement them on a smaller scale, the issue now is just to start making them work on a larger scale such as a whole building, rather than on the level of six - ten people in a loft.

That’s how I feel about the assets. I am conflicted on issues such as socialized medicine. Part of me feels that community group health plans that one buys into are the answer, but another part of me isn’t so sure that universal healthcare isn’t the answer.

Erek

[BrainGlutton]

@Maeglin

1. Financing for this scheme is not straightforward. Between April 2000 and July 2004, there have been an estimated 17,198,187 births. This plan rapidly becomes costly, especially since initial allocations need to be adjusted for inflation.

Boshara estimates a cost of $24 billion a year. If his math is correct, that’s chicken feed by federal standards – one-fourth the annual cost, to date, of the invasion and occupation of Iraq, and “about a sixth of what the government gives in tax breaks to corporations every year.” (Hint, hint.)

@Maeglin

This financing really has to be generated by current revenue: borrowing on the margin is dangerous for an individual, and utterly irresponsible for government, especially given the possibility that increased borrowing may correlate with higher interest rates, thus crowding out private sector investment.

Cite? You’re contradicting the whole system of Keynesian economics here; you don’t get to just state it as an obvious common-sense fact. (Especially as we’re living under an administration that, although Republican, appears to be perfectly comfortable with deficit spending.)

@Maeglin

Higher taxes do not seem to be consistent with this group’s core fiscal principles.

Well, that’s what I was referring to when I called Boshara’s proposal “redistributive” (a word he himself does not use). More progressive taxes – a much heavier net tax burden on the rich – are indeed consistent with their principles. See the “Fiscal Policy Program” in the OP.

@Maeglin

4. Last but not least, what entitlements will we reasonably be able to eliminate if this act is implemented?

Boshara’s thinking seems to be that a nation of wealth-owners would be less dependent on “entitlements” (at least, on the welfare-and-food-stamps scale). Note also that the NAF is for health-insurance reform – not on the Canadian single-payer model, but they are thinking in terms of some form of publicly subsidized universal coverage. See the “Health Policy Program” in the OP.

[mswas]

To put it simply, I think the top-down paradigm just cannot work sustainably in a global market. One must work from the bottom-up in every instance, and solidify their foundation before they move up to the top of the pyramid. If individual nodes could see that other nodes in other places are building up like they are, then there would be the attainable interim goals of meeting up with the other networks/nodes. Basically, take the internet model and apply it to community building. An approach like this implements both socialism and capitalism in concert, rather than forcing the macro to accept either.

[BrainGlutton]

@mswas

To put it simply, I think the top-down paradigm just cannot work sustainably in a global market. One must work from the bottom-up in every instance, and solidify their foundation before they move up to the top of the pyramid. If individual nodes could see that other nodes in other places are building up like they are, then there would be the attainable interim goals of meeting up with the other networks/nodes. Basically, take the internet model and apply it to community building. An approach like this implements both socialism and capitalism in concert, rather than forcing the macro to accept either.

[Maeglin]

Thanks for your reply, BrainGlutton.

Boshara estimates a cost of $24 billion a year. If his math is correct, that’s chicken feed by federal standards.

This number is simply 4m births per year times $6k. This does not include presumably vast administration fees, transaction fees, investment management costs, and periodic adjustments for inflation. In order for later generations to avoid receiving less than the present generation, the initial allocation must somehow be indexed to inflation. Furthermore, if you assume a mere 3% inflation per year, that erodes a significant percentage of the stakeholder’s real return. If I were born today, that $45,000 I would have when I hit 30 might by my beer and cigarettes.

Furthermore, any entitlement such as this must be secured. Americans would be building their hopes for the future on this money. The decision-making process young Americans would face during a period of downturn is very complicated: do you postpone your education in order to realize an increase in the value of your stake or do you cash out while you still can before your savings erode further? This is not a trivial problem and can only be offset by widespread security. I am simply not knowledgeable enough to guess how this would be done and at what cost. Hint: probably more than $24b per year.

Cite? You’re contradicting the whole system of Keynesian economics here; you don’t get to just state it as an obvious common-sense fact. (Especially as we’re living under an administration that, although Republican, appears to be perfectly comfortable with deficit spending.)

I disagree. There is a significant difference between spending financed by public debt and financing investment on the margin. I can accept the government selling bonds to finance public works or the next Head Start program. I would need rather more persuasion to accept a government functionary picking stocks at taxpayer expense, or worse, hiring Goldman Sachs to do it.

Boshara’s thinking seems to be that a nation of wealth-owners would be less dependent on “entitlements” (at least, on the welfare-and-food-stamps scale).

Which yields in turn a host of transitional problems. Are people subject to the stakeholder benefit not eligible for these programs? Which ones?

[Evil_Captor]

Where would radical centrism stand on the free market economy? Would they regard it as something that must never be regulated, or regulated as little as possible, or would they regard it as something that has to be watched and regulated for the benefit of all? What kind of economics would radical centrism support?

[Maeglin]

@Evil Captor

Where would radical centrism stand on the free market economy? Would they regard it as something that must never be regulated, or regulated as little as possible, or would they regard it as something that has to be watched and regulated for the benefit of all? What kind of economics would radical centrism support?

I think this question is not very helpful. Asking “what kind of economics” is like asking “what kind of physics” radical centrism supports. It is rather nonsensical. For my part, I support quantum physics and neoclassical economics, for what it’s worth. When you drop stuff, it falls. Human beings respond to incentives. There is no need to saturate this in any more ideology than is strictly necessary, I don’t think.

[mswas]

@BrainGlutton

Hmm, I don’t see why you are confused. So I’m having trouble clarifying for you, but I’ll try. Basically, whenever discussions like this come up I see the same question being asked, with a minor cosmetic form change. The question can usually be boiled down to:

“What can the government do to facilitate X.”, my answer to that would be that it’s not really an issue for the government. We need to stop focusing so much on the federal government. The federal government is not NEARLY as important as we act like it is. In fact most of our problems, IMO can be attributed to the federal government roundly failing at it’s micromanagement. It’s also nearly impossible to get things done at the federal level.

I recently read a quote from Tip O’Neill but I forget where I saw it from, “All politics are local.”

I’ll put it into a strategic perspective. When trying to win a war, one doesn’t spread their troops across the entire battlefield. They come down in a few sustainable zones where they can consolidate their power. Then those units drive a wedge through the enemy forces until they can connect to one another and establish supply lines. This is the key to sustainability. When you approach the federal government, it’s like trying to take the entire battlefield all at once.

Your concept of an “Asset building program” is flawed from the outset because it is a concept that requires the initiative to be taken by the bureaucracy. The American entrepeneurial spirit has fallen by the wayside as we’ve more and more come to depend upon big monolithic agencies for our day to day well-being. We can no longer see the fruits of our labor, and must depend upon stock numbers that benefit the stockholders we may never meet long before we ever see an increase in our own standards as part of the ‘lower’ or ‘middle’ class.

We don’t need an “Asset building program” we need a culture that is less dependent upon the federal and state governments.

Let me outline a simple model for a cooperative that I would like to implement at some point in my life.

You buy a building, you outfit it as a live and work situation. Say you have 30 residents. So you need residential for those 30 residents. Not every resident needs their own kitchen. There can be communal areas for recreation, such as an entertainment center area or two for watching movies, a library.

Then you have your commercial aspects, The building has a high speed internet backbone, it’s own web and mail servers. The web/mail servers could be revenue generating, they may not be. You have offices etc…

Then you have your industrial section. This is things like a wood/machine shop, perhaps a garage to fix cars in. A large room for photo/film shoots with a green screen that can also be used for social events like a ballroom.

Basically you have a lot of revenue generating possibilities available in a building like this, that can support the building and it’s residents. Then you defray costs by setting up a food cooperative within your building, or maybe with other cooperatives like your own. Every week you have a delivery of Lettuce, Cucumbers, Peas etc… Every month you get potatoes, rice, beans etc… Because you are buying in bulk the cost per person is driven down significantly. Also, a division of labor can be created, so that people pick up the slack where they are proficient, and they are picked up for where they are not proficient. Perhaps someone lives there and earns a stipend by managing the cleanup of the residence, or the food preparation, or however it is chosen to be handled.

The difference is, that we don’t need people in New York or Washington manipulating numbers to allow this to happen. The current system in place already allows for it. What is more important is that it be made easier for the individuals to manage things like Zoning restrictions.

Too often I see these conversations dominated by the people who are very good with the larger numbers, and it glosses out the “facts on the ground” or the people who want a less theoretical and more practical approach. I tend toward the middle ground of these two approaches, and I would like to have these conversations, but all too often I am pushed out because I don’t understand the statistical analysis portion, however I represent a large percentage of the population that isn’t stupid, just one that understands a different aspect of it all.

For instance, I’ve been active implementing a lot of these “Radical Center” ideas for the past two years. It doesn’t take the Federal government providing me an incentive to do what I am doing for me to do it. It’s not about creating a new middle-class either. The middle-class is part of the reason that we have many of the economic and environmental problems that we do. Our material possessions are too redundant. Too many of us own machines that sit in our closets collecting dust except for the once every two months we need to fix a door knob and pull out our power drill.

Again, I am not quite so good at the statistical analysis portion of the quiz, but I’ve always had this hunch that when we get world poverty statistics, they include farmers living in a sustainable equilibrium with their environment as though that is poverty. In a part of the world where water is available to grow crops, and the basic survival needs can be met at a subsistence level, then a dollar a day per person isn’t a bad living wage. I’d hate to see us push the American suburban model into the third world anymore than is necessary. The West has been antagonistic to tribal models of living in order to push “Civilization” when, IMO it’s a hybrid of tribal and global networks that we really need to push. We need to stop trying to break up tribal models to give them our “inherently” better model, and perhaps we should look at more tribal models for ourselves here.

The biggest problem I’ve found with adopting tribal models here is an inherent fear in attaching one’s well-being to that of those around. “I don’t mix business and pleasure.”, but our desire to assuage our fears by living two lives is inefficient. It requires more energy on every level, intellectually, emotionally, economically, and environmentally to sustain. We keep a comfortable detachment from the lives of our neighbors. In the original post it mentioned “Building reciprocal relationships”, and that’s what I think is key.

So I think this is a good thread, but I’d hate to see it hijacked into another statistical analysis of the situation, because that’s not a holistic picture of what we are talking about.

In short, I think “asset building programs” while maybe a part of it are unecessary and counter-productive, as taxes are taking money from the poor and middle-class to give to the poor and middle-class.

We need to see an end to paternalism and the welfare state, and right now we have an unprecedented opportunity with the technology recently availed to us.

Think Networked Kibbutzes or Hippy Communes.

Erek

[mswas]

You can replace “Federal Government” with “Paternalist Oligarchy” in my previous post.

[BrainGlutton]

@Evil Captor

Where would radical centrism stand on the free market economy? Would they regard it as something that must never be regulated, or regulated as little as possible, or would they regard it as something that has to be watched and regulated for the benefit of all? What kind of economics would radical centrism support?

Based on statements in the NAF website, I think they favor about as much regulation as there is now, with some changes in details. They differ from the Republicrats’ policies, not in how much economic regulation they countenance, but in what ends should be in mind.

@Maeglin

I think this question is not very helpful. Asking “what kind of economics” is like asking “what kind of physics” radical centrism supports.

Obviously, by “what kind of economics,” Evil meant, “what public economic policies.” For the rest – surely you don’t believe economics, at its present state of development, is anything near as exact a science as physics?

[Maeglin]

@BrainGlutton

Obviously, by “what kind of economics,” Evil meant, “what public economic policies.” For the rest – surely you don’t believe economics, at its present state of development, is anything near as exact a science as physics?

I disagree. I do not want to speak for EvilCaptor or anything, but I interpret this question as whether or not RC (wish I could do a sqrt symbol here) is hostile to the fundamentals of neoclassical economics. This is not a question of particular social policies, but a question of, among other things, how benefits of production should be divided between labor and capital. This is far more profound and ideological than simply fiscal policies.

Economics is hardly as exact a science as physics for many reasons, including the failure to model individual behavior in a robustly determinist way and the sheer novelty of the discipline. For what it’s worth, physics has been around for 2500 years and has probed all manner of esoterica. Not to mention the fact that the incentives that drive human behavior appear to change a little faster than, say, the rate of gravitational acceleration on earth at sea level.

The fact that economics isn’t an “exact” science does not undermine its successes in any way, just as the fact that physicists are often simply wrong does not undermine its exactness.

Are you interested in continuing the discussion about the stakeholder act?

[BrainGlutton]

@Maeglin

I disagree. I do not want to speak for EvilCaptor or anything, but I interpret this question as whether or not RC (wish I could do a sqrt symbol here) is hostile to the fundamentals of neoclassical economics. This is not a question of particular social policies, but a question of, among other things, how benefits of production should be divided between labor and capital. This is far more profound and ideological than simply fiscal policies.

Economics is hardly as exact a science as physics for many reasons, including the failure to model individual behavior in a robustly determinist way and the sheer novelty of the discipline. For what it’s worth, physics has been around for 2500 years and has probed all manner of esoterica. Not to mention the fact that the incentives that drive human behavior appear to change a little faster than, say, the rate of gravitational acceleration on earth at sea level.

The fact that economics isn’t an “exact” science does not undermine its successes in any way, just as the fact that physicists are often simply wrong does not undermine its exactness.

Are you interested in continuing the discussion about the stakeholder act?

Yes – and, in particular, please explain how the operations of neoclassical economics would make the proposal workable or unworkable.

Also – do you believe that it is a proven fact that the neoclassical economic theories are valid, and other schools, such as Keynesian economics or monetarist economics, are not? If so, why?