Friday, April 12, 2013

Tilting to the Left. Just a Little.

My son, a freshman at Washington State University, is taking one of those courses that are the backbone of a university's core mission: to produce broadly educated minds. Or, to say it more concisely, a gen-ed requirement -- History 105, Contemporary Issues.

This the prompt, quoted in full, from his class's most recent assignment:

Some pundits, academics, and politicians often talk about the “unintended consequences” of global capitalism (Joyce Appleby uses this phrase in the final assigned section).  Others argue that there is nothing unintended about capitalism’s consequences – that those in power are fully aware of the potential results, including financial crises like the one that shook the global economy in 2008 and continues to plague people’s of all nations (Naomi Klein makes such an argument).

In a succinct, clearly written, three-page double-spaced essay that uses multiple historical examples from not only Appleby but from other readings, lecture notes, and discussion notes, answer the following question:

Why has the capitalism/socialism debate been so divisive?

Use the 2008 financial crisis and the ensuing global recession as a starting point for a discussion of the historical and very contentious “consequences” of and responses to capitalism – arguably one of the most defining historical processes of the modern era.

On taking a look at this, some questions came immediately to mind:
  • In what universe, no matter how distant in space or time, does Naomi Klein make an actual argument?
  • Others argue there is nothing unintended about capitalism's consequences. Are there other Others who argue that socialism's bugs are actually features?
  • Based upon the prompt, what is "arguably one of the most defining defining historical processes of the modern era?"
  • Again based upon the prompt, why would the students suspect the professor would be able to tell the difference between a succinct, clearly written essay and a pile of fish dead for three days?
  • Why does leaden, prolix and ungrammatical writing plague the collectivist professor's of all humanities?
  • What the heck is the question, anyway?
  • Is that even important to providing the correct answer?

Remember, this is a prompt for a writing assignment. What is the prompt prompting? On the face of it, that is easy — discuss some ways in which the intellectual divide between socialism and capitalism persists. And, for the clairvoyant students, not just the ways, but the whys, too. At some point, our entering arguments become axiomatic. In many cases, there is no proving that a greater degree of individualism is preferable to more collectivism, because the notion of "preferable" itself is also at stake.

So, if the prompt had gone on from the seemingly simple question and focused it by saying "Use the 2008 financial crisis to show why the argument between socialism and capitalism will continue", then the student could take the fundamental tenets of each, and show how the crisis both undermined and substantiated them. (The CRA was an instance of socialism, and, by ignoring risk, destroyed the housing market. The banks, through looking only at personal enrichment, privatized gain while socializing risk.)

But that isn't what the prompt says. Instead, it amounts to a non-sequitor. One might just as well ask "Why are the arguments between Yankee and Red Sox fans so divisive? Using the recent doping scandals in athletics, explain why baseball is bad."

And that is before getting to the ambiguous references. What, arguably, is the most defining historical process of the modern era, the 2008 financial crisis, the responses to it, or capitalism?

Then there is the fundamental viewpoint of the prompter, who really seems to be asking "why, since socialism is so obviously superior, how can there possibly be, absent those possessed of malevolent intent, any capitalists around with whom to argue?"

But wait, there's more. My son got his paper back today — he got a middling B. That's reasonably good, I suppose, unless you are one of those Others who suspects that, in the humanities, A's are already a seriously debased coin of the academic realm.

Here is the content portion of his grade:

Content 17/20 - You do a great job of outlining some of the key differences between the two ideologies and giving modern examples. There are a few key elements that are missing from your essay, however. YOu do not discuss the role of the Cold War and World War II in the assoctaion of socialism with communism and the major propaganda efforts to solidify this idea in the minds of capitalistic nations. You also do not talk about the Great Depression, which is one of the most important events that Socialists point to when condemning Capitalism.
Others who argue that academia hasn't tilted so far to the left that only its Wiley Coyote ignorance of physics has kept from long ago toppling over should hang their academic head in shame, should such an emotion still be available to them. This is a perfect example of the kind of shameless bias that comes with collectivists' unquestioned — and let's savor the irony here — religious beliefs. Yes, the banking sector stunk the place up. But the ways in which the financial crisis of 2008 continues to plague people’s of all nations, particularly those lashed to the Euro, can hardly be separated from that socialist paradise which is Greece.

At this point, though, I must say there is one particular area where capitalism is inferior.

In socialism, you don't have to pay for reeducation camp.

25 Comments:

Blogger Susan's Husband said...

"Others argue there is nothing unintended about capitalism's consequences. Are there other Others who argue that socialism's bugs are actually features?"

As bizarre as it seems, yes. I have been seeing this more and more over the last few years as the difficulty of arguing that collectivism has economic benefits has become more difficult. The solution? Argue that its economic deprivations are features, not bugs. In particular the idea that no one will have better service or goods among the masses. I'll keep an eye out for examples I can link.

April 12, 2013 6:50 PM  
Blogger Peter said...

I'm not sure I'd get my knickers too twisted about ideological bias. What did you expect in the Arts Faculty of a State University? These are the years the kids should be exposed to this kind of stuff and if he is bent a bit by this particular neo-marxist, he's got plenty of time and opportunity to figure it out.

But what is kind of sad is that a typical freshman couldn't possibly handle such a sweeping challenge without just desperately regurgitating what he thinks the prof wants. He didn't discuss the Depression, WW11 and the Cold War? For an assignment? Gee, what would be left for him to talk about after lunch? That's a thesis, not an assignment.

April 15, 2013 11:43 AM  
Blogger Hey Skipper said...

Peter:

What gets my knickers in a twist -- almost twisted enough for an entirely futile gesture like a letter to the WSU president -- is that this class is utterly antithetical to the supposed purpose for a college education. If this class were to teach its contemporary issues in light of the fact that all ideological starting points are underdetermined (the position my son took in writing his assignment), then the class would have earned its keep by teaching the students both the elements of opposing arguments, and how their own arguments will lead to undesirable outcomes.

But that isn't what is happening here.

YOu do not discuss the role of the Cold War and World War II in the assoctaion of socialism with communism and the major propaganda efforts to solidify this idea in the minds of capitalistic nations.

Besides the incompetence on display here -- if you want the students to discuss those things, then you damn well ought to mention that in the prompt -- is the glaringly blinkered take on history.

WHAT propaganda efforts to solidify the association of socialism and communism in the minds of capitalist nations?

I did a google search, and came up with something from Noam Chomsky -- and what it boiled down to a was a couple pages of practicing the No True Scotsman Fallacy.

The other reason I have knotted knickers is that I spent $1200 for a nearly complete waste of time.

Its only saving grace is what my son did learn: the bias in the humanities is pervasive; humanities professors are deficient in both reasoning and writing; and, that the humanities are the province of smug no-nothings.

April 15, 2013 8:51 PM  
Blogger Harry Eagar said...

Really, the banking crisis of 2008 (which actually began, as RtO said in February 2008, in August 2007) was about Greece? Really?

April 16, 2013 12:16 PM  
Blogger Hey Skipper said...

Here is what I wrote:

But the ways in which the financial crisis of 2008 continues to plague people’s of all nations, particularly those lashed to the Euro, can hardly be separated from that socialist paradise which is Greece.

Socialism, by way of the CRA, was the toxin that infected first the US property market, then confidence, then liquidity.

Did bankers contribute to the conflagration? Of course, although any fair criticism of their behavior would at least glance in the direction of perverse incentives imposed by the government, and aggravated by Freddie and Fannie.

But back to what I wrote. Beyond satirizing the professor's atrocious grammar, is precisely on point. The Euro, a socialist notion untainted by any particular connection with reality, is at risk now because of socialist Greece, which like all socialisms, works fine until it runs out of other people's money to spend, and lies about it every inch of the way.

The behavior of Greece's politicians makes bankers look like amateurs with decidedly limited ambitions. The economic wreckage from their behavior is playing the part of a short-chained anchor.

And that is before getting to the consequences of socialism on the labor markets of most of Europe.

None of which you are going to learn from this poster child of blinkered, parochial, unexamined thinking.

April 16, 2013 4:35 PM  
Blogger Harry Eagar said...

We've been over the CRA before and it's a false hope of the capitalists.

The first casualty of the mortgage crisis in my county was a 150-unit condominium, which went under owing Lehman about $335 million.

Hardly housing for Guatemalan landscapers, and nothing to do with Fannie or Freddie either.

I do not understand why you are so coy about admitting that after 28 years of rampant Reaganism, when the financial markets crashed, it must have had something to do with rampant Reaganism. Especially considering how the previous 60 years had been the longest period ever without a financial center panic.

As RtO's watchword goes, unsupervised markets crash.

April 16, 2013 4:47 PM  
Blogger Hey Skipper said...

We've been over the CRA before and it's a false hope of the capitalists.

It never ceases to astonish me how you can say that unsupervised markets always crash, while ignoring the market supervision imposed the CRA.

Try adopting a counterfactual. Instead of the CRA, the federal government passed a law requiring what was customary at the time: at least 10% down to purchase a house.

No, really, try it. Because I think if you do, you will realize that the CRA was a necessary, but not sufficient, cause of the housing market crash.

Which is what is bound to happen if socialists try to solve a market "problem" (i.e., displeasing results) where there are all the conditions for a well functioning market.

The apologists on the left, and the self-interested "investigations" by the government of itself fall well short of convincing, regardless of what the first casualty of the mortgage crisis in your county was.

April 16, 2013 6:06 PM  
Blogger Harry Eagar said...

Tsk, tsk. The crash did not originate in housing, still less in housing for worker bees. As RtO pointed out 6 months before the crash, the suspension at Bear signaled crash coming.

The place it originated, and where Bear stumbled, was completely unregulated.

It isn't only in the prole universities where the professoriate concludes, after deep study, that something is wrong with finance capitalism. As Professor Rediker of the U. of Pittsburgh says with a sigh in his latest monograph, "this has been a painful book to write, and if I have done any justice to the subject, it will be a painful book to read. . . . I offer this study with the greatest reverence for those who suffered almost unthinkable violence, terror and deaath, in the firm belief that we must remember that such horrors have always been, and remain, central to the making of global capitalism."

I quarrel with the professor on the phrase "almost unthinkable." To the contrary, these methods are at the core of capitalist thinking.

As it happened (quite by chance), I had planned to watch a documentary by a man who, I did not realize until yesterday, is probably Washington State's most admired, or at least most widely known, graduate.

It was "Harvest of Shame." I commend it to your attention, especially the statements by the capitalists justifying their methods.

Also interesting is the statement by a Republican secretary of labor.

April 16, 2013 11:04 PM  
Blogger Susan's Husband said...

So, you think WWI was caused by Serbia, because that's where it started?

April 17, 2013 5:53 AM  
Blogger Hey Skipper said...

Tsk, tsk. The crash did not originate in housing, still less in housing for worker bees. As RtO pointed out 6 months before the crash, the suspension at Bear signaled crash coming.

The crash originated in .... wait for it .... the collapsing market for suprime loans*, which is a .... wait for it .... just another way of saying CRA.

Which is why I asked you to consider the counterfactual: what if, instead of the CRA, Congress had passed a law requiring at least 10% equity to obtain a mortgage?

(* In reading the Wikipedia article, I lost count of the number of times the word "subprime" showed up.)

(Also, sometime in the last week I saw an article in either the WSJ or the NYT describing how many hundreds of millions of people capitalism has saved from poverty over the last 25 years. An assignment that my sons Re-ed 105 class should but will never get: compare and contrast with socialism.)

April 18, 2013 8:35 PM  
Blogger Hey Skipper said...

This is from a 1997 press release:

CHARLOTTE – First Union Capital Markets Corp. and Bear, Stearns & Co. Inc. have priced a $384.6 million offering of securities backed by Community Reinvestment Act (CRA) loans – marking the industry’s first public securitization of CRA loans.
...

The
$384.6 million in senior certificates are guaranteed by Freddie Mac and have an implied "AAA" rating.


(Emphasis added)

April 18, 2013 8:43 PM  
Blogger Harry Eagar said...

Not where the Bear stubbed its toe, however.

As I explained long ago, if you're leveraged 100:1, when the market turns down 1%, you're done.

I believe even the starriest-eyed free marketeers envisions occasional downturns.

That placement, by the way, was just about equal to the amount lost in one -- count 'em. 1 -- condo project in my county.

The CRA had nothing to do with that.

I understand why you free marketeers have to cling to the crime of CRA, but it cannot explain the crash in Iceland, can it?

The thing about globalization is that it is, well, global.

April 18, 2013 8:50 PM  
Blogger Hey Skipper said...

Which is why I asked you to consider the counterfactual: what if, instead of the CRA, Congress had passed a law requiring at least 10% equity to obtain a mortgage?

April 25, 2013 10:54 PM  
Blogger Harry Eagar said...

The market would have crashed because it was unsupervised.

Here's my factual to your counterfactual: Tens of millions of Americans took low- and no-down mortgages for generations and the financial markets did not crash? Explain.

April 27, 2013 8:45 PM  
Blogger Bret said...

Harry,

You can make up what ever "factual" you like, but I know you know that's not true and it won't convince anybody here. Unless your definition of low down payment is 20%.

April 28, 2013 10:51 AM  
Blogger Susan's Husband said...

NBER agrees with Skipper.

April 28, 2013 9:03 PM  
Blogger Hey Skipper said...

Tens of millions of Americans took low- and no-down mortgages for generations and the financial markets did not crash?

Do you always gut shoot your own argument?

To the extent tens of millions took low- and no-down mortgages, it is worth knowing who those tens of millions were . And, for generations, what the requirements were for their obtaining mortgages.

Because, after generations of the mortgage market doing just fine without any particular supervision, some supervision, in the CRA, came along and required the elimination of risk pricing in mortgages.

In order for that to happen, there had to be knock-on effects in secondary markets and bundling mortgages. After all, the CRA created risk didn't just go away.

It is worth noting that since 2007, banks want a great deal of documentation and a significant down payment before approving a loan.

Pretty much exactly the opposite direction from the CRA.

May 01, 2013 6:40 AM  
Blogger Harry Eagar said...

Low-down was 5%, no down was 0%.

Th borrowers were a crosssection of all America -- vets.

And if you think banks want lots of documentation and high downs, you are not keeping up. They are maneuvering to go back.

May 12, 2013 6:08 PM  
Blogger Susan's Husband said...

Wrong again, it is the current government that is doing so. Perhaps you should open a daily paper and be better informed.

May 13, 2013 5:12 AM  
Blogger Bret said...

Harry wrote: "They are maneuvering to go back [to low down payments]."

Of course. Now that the government has firmly established the concept of too-big-to-fail and even too-big-to-prosecute for breaking the law, there's no downside to creating highly risky but highly profitable portfolios. If they didn't have government backing, they might be more hesitant.

May 13, 2013 7:49 AM  
Blogger Hey Skipper said...

[Harry:] Th borrowers were a crosssection of all America -- vets.

Which isn't, and really, you should know this, a cross section of all america. Those getting VA loans have to either have an honorable discharge, or be serving honorably. Almost all vets have at least high school educations. Vets have to be literate. I could go on, but I think my point is made.

And if you think banks want lots of documentation and high downs, you are not keeping up. They are maneuvering to go back.

I have to apologize, since I only have first hand experience to go on. I just refinanced my house a couple months ago, at 15 years with just over 20% equity and -- no exaggeration -- a perfect credit score, absolutely no debt other than the mortgage, and a monthly payment less than 20% of my take home pay.

I was astonished at how much documentation I had to provide

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