Wednesday, September 24, 2008

Idiosyncracies of American Democracy

Democracy does not work so rationally as we would wish. The public knows the word "economy" and believes that there are difficulties with it. It is unlikely that many of those who believe that there are difficulties with the economy can identify the diffculties accurately. For example, real wages have been declining since the early 1970s, but the public has not generally been concerned about this trend, which ought to be of serious concern to anyone who works. However, now that the mass media has been telling people that house prices, which have increased dramatically during the same period, are too low, the public feels that there is a crisis.

When I was in college in 1974 I worked as a door man in an apartment building in Manhattan on 54th Street between 5th and 6th Avenues. It was down the street from Gucci's on 5th and across the street from the back entrance of the Museum of Modern Art. At that time I earned about $200 per week and a one bedroom apartment in that building was selling for $55,000. If you multiply $200 per week times 52 weeks and divide the result into $55,000 you get 5.3 times.

A one bedroom apartment in that same building now probably sells for over $1 million. However, wages for building workers have probably gone up about three or four fold. If you're generous to today's door men and you divide $1 million by $45,000 you get 22.2 times, and that is probably an understatement because the apartment may be selling for more than $1 million and the doorman may be making less than $45,000.

Despite apartment prices' having gone up at four times the rate of wages, the public is willing to believe that a reduction in housing prices constitutes a "crisis" and some kind of "unruliness in the markets" that requires massive government intervention.

Let real estate prices fall. Then, perhaps, I can afford a new apartment in Manhattan and move back to civilization!

Even odder than public unawareness that the average person earns less than his parents did is the belief that Barack Obama is somehow best qualified to alleviate the non-existent housing "crisis".

Andy Martin has forwarded a press release that indicates that:

"A new Washington Post poll now shows Barack Obama opening up a decisive lead based on the amazing belief that Obama is more competent to manage the economy."

The Washington Post article states that:

"Just 9 percent of those surveyed rated the economy as good or excellent, the first time that number has been in single digits since the days just before the 1992 election. Just 14 percent said the country is heading in the right direction, equaling the record low on that question in polls dating back to 1973.

"More voters trust Obama to deal with the economy, and he currently has a big edge as the candidate who is more in tune with the economic problems Americans now face. He also has a double-digit advantage on handling the current problems on Wall Street, and as a result, there has been a rise in his overall support."

This is especially odd because it is Obama who has received the lion's share of backing from Wall Street and from the pro-Wall Street media, for instance the New York Times and the media conglomerates that depend on Wall Street for financing. Given that the current "sub-prime crisis" is of Wall Street's making and Wall Street has primarily contributed to Senator Obama, current public opinion can best be described as idiosyncratic.

Part of the idiosyncratic public opinion is likely due to the media's slanted coverage of Obama and McCain. Jim Crum writes in an e-mail:

"I’ve said for months now that the main stream media need to be wearing...knee pads when dealing with Mr. Obama. It really has gotten that bad, and I doubt that there is any sin, now matter how grievous, that would escape their filters and be reported. Meanwhile, there is a near complete blackout on anything or McCain/Palin accomplishes. (Yes I have reservations about McCain & Palin, but given the alternative, there is no substantive choice)."

In an e-mailed press release Andy Martin states that McCain should break with the Bush administration and:

"speak clearly and simply and directly: he must announce in no uncertain terms his total opposition to the Wall Street bailout.

"First, over the past year I have repeatedly pointed out that the current financial crisis is a "manufactured" crisis. The urgency was created by maladroit steps to rein in sub-prime mortgages when they posed no threat to the overall economy. One bad step led to another. We have rather clumsily managed to topple our own financial dominoes. The mess is Wall Street's fault, not George Bush's responsibility."

In several e-mails about the media's reaction to the Obama's campaign lies about Senator McCain's supposed blocking of stem cell research Bob Robbins points out:

"That our media finds it all so amusing tells us just how much they value the truth as well."

The Progressives believed that a well informed democracy would be possible and that the public could fairly assert its own interests given an abundance of good information. Today's public is widely misled by the Progressives' descendants, the mass media, and is incapable of assessing even the most elementary facts about the political economy.

I have an increasing share of my assets either in hard commodities or outside the United States in foreign currency CDs. I do not believe that this country is headed for a healthy future, and it will be worse if Barack Obama, Wall Street's and the New York Times's boy wonder, is elected.

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