Antidepressants are no more effective than a placebo and why that's great news

(updated seven times, please see below)

I finally read the Newsweek cover story, "The Depressing News about Antidepressants" by Sharon Begley. It's shocking. I highly encourage you to read the whole thing. Shortly thereafter, The New Yorker came out with a similar article entitled, "Head Case: Can Psychiatry be a Science" by Louis Menand that reports on a similar set of data (the article appears to be free right now but The New Yorker sometimes put things behind their subscription pay wall so check it out while you can). As is my style, I want to quote from both articles and then riff a bit at the end on what all of this may mean:

The number of Americans taking antidepressants doubled in a decade, from 13.3 million in 1996 to 27 million in 2005. [Basically 1 in 10 Americans.] -- Newsweek, January 29, 2010

In 1998, researchers examined 38 manufacturer-sponsored studies involving just over 3,000 depressed patients. The authors, psychology researchers Irving Kirsch and Guy Sapirstein of the University of Connecticut, saw—as everyone else had—that patients did improve, often substantially, on SSRIs, tricyclics, and even MAO inhibitors, a class of antidepressants that dates from the 1950s. This improvement, demonstrated in scores of clinical trials, is the basis for the ubiquitous claim that antidepressants work. But when Kirsch compared the improvement in patients taking the drugs with the improvement in those taking dummy pills—clinical trials typically compare an experimental drug with a placebo—he saw that the difference was minuscule. Patients on a placebo improved about 75 percent as much as those on drugs. Put another way, three quarters of the benefit from antidepressants seems to be a placebo effect....

Out of the blue, Kirsch received a letter from Thomas Moore, who was then a health-policy analyst at George Washington University. You could expand your data set, Moore wrote, by including everything drug companies sent to the FDA—published studies, like those analyzed in "Hearing Placebo," but also unpublished studies. In 1998 Moore used the Freedom of Information Act to pry such data from the FDA. The total came to 47 company-sponsored studies—on Prozac, Paxil, Zoloft, Effexor, Serzone, and Celexa—that Kirsch and colleagues then pored over. (As an aside, it turned out that about 40 percent of the clinical trials had never been published. That is significantly higher than for other classes of drugs, says Lisa Bero of the University of California, San Francisco; overall, 22 percent of clinical trials of drugs are not published. "By and large," says Kirsch, "the unpublished studies were those that had failed to show a significant benefit from taking the actual drug.") In just over half of the published and unpublished studies, he and colleagues reported in 2002, the drug alleviated depression no better than a placebo. "And the extra benefit of antidepressants was even less than we saw when we analyzed only published studies," Kirsch recalls. About 82 percent of the response to antidepressants—not the 75 percent he had calculated from examining only published studies—had also been achieved by a dummy pill.
The extra effect of real drugs wasn't much to celebrate, either. It amounted to 1.8 points on the 54-point scale doctors use to gauge the severity of depression, through questions about mood, sleep habits, and the like. Sleeping better counts as six points. Being less fidgety during the assessment is worth two points. In other words, the clinical significance of the 1.8 extra points from real drugs was underwhelming. Now Kirsch was certain. "The belief that antidepressants can cure depression chemically is simply wrong," he told me in January on the eve of the publication of his book The Emperor's New Drugs: Exploding the Anti-depressant Myth.

Even Kirsch's analysis, however, found that antidepressants are a little more effective than dummy pills—those 1.8 points on the depression scale. Maybe Prozac, Zoloft, Paxil, Celexa, and their cousins do have some non-placebo, chemical benefit. But the small edge of real drugs compared with placebos might not mean what it seems, Kirsch explained to me one evening from his home in Hull. Consider how research on drugs works. Patient volunteers are told they will receive either the drug or a placebo, and that neither they nor the scientists will know who is getting what. Most volunteers hope they get the drug, not the dummy pill. After taking the unknown meds for a while, some volunteers experience side effects. Bingo: a clue they're on the real drug. About 80 percent guess right, and studies show that the worse side effects a patient experiences, the more effective the drug. Patients apparently think, this drug is so strong it's making me vomit and hate sex, so it must be strong enough to lift my depression. In clinical-trial patients who figure out they're receiving the drug and not the inert pill, expectations soar. That matters because belief in the power of a medical treatment can be self-fulfilling (that's the basis of the placebo effect). The patients who correctly guess that they're getting the real drug therefore experience a stronger placebo effect than those who get the dummy pill, experience no side effects, and are therefore disappointed. That might account for antidepressants' slight edge in effectiveness compared with a placebo, an edge that derives not from the drugs' molecules but from the hopes and expectations that patients in studies feel when they figure out they're receiving the real drug.

In an analysis of six large experiments [published in the Journal of the American Medical Association in January 2010] in which, as usual, depressed patients received either a placebo or an active drug, the true drug effect—that is, in addition to the placebo effect—was "nonexistent to negligible" in patients with mild, moderate, and even severe depression. Only in patients with very severe symptoms (scoring 23 or above on the standard scale) was there a statistically significant drug benefit. Such patients account for about 13 percent of people with depression. "Most people don't need an active drug," says Vanderbilt's Hollon, a coauthor of the study. "For a lot of folks, you're going to do as well on a sugar pill or on conversations with your physicians as you will on medication. It doesn't matter what you do; it's just the fact that you're doing something."

Right about here, people scowl and ask how anti-depressants—especially those that raise the brain's levels of serotonin—can possibly have no direct chemical effect on the brain. Surely raising serotonin levels should right the synapses' "chemical imbalance" and lift depression. Unfortunately, the serotonin-deficit theory of depression is built on a foundation of tissue paper. How that came to be is a story in itself, but the basics are that in the 1950s scientists discovered, serendipitously, that a drug called iproniazid seemed to help some people with depression. Iproniazid increases brain levels of serotonin and norepinephrine. Ergo, low levels of those neurotransmitters must cause depression. More than 50 years on, the presumed effectiveness of antidepressants that act this way remains the chief support for the chemical-imbalance theory of depression. Absent that effectiveness, the theory hasn't a leg to stand on. Direct evidence doesn't exist. Lowering people's serotonin levels does not change their mood. And a new drug, tianeptine, which is sold in France and some other countries (but not the U.S.), turns out to be as effective as Prozac-like antidepressants that keep the synapses well supplied with serotonin. The mechanism of the new drug? It lowers brain levels of serotonin. "If depression can be equally affected by drugs that increase serotonin and by drugs that decrease it," says Kirsch, "it's hard to imagine how the benefits can be due to their chemical activity."

Antidepressants had sales of $9.6 billion in the U.S. in 2008.

The New Yorker article also cites the studies on the placebo effect by Kirsch and then for good measure questions the scientific basis for the entire field of psychiatry. About midway through a long article he drops this bombshell of a paragraph:

Later studies have shown that patients suffering from depression and anxiety do equally well when treated by psychoanalysts and by behavioral therapists; that there is no difference in effectiveness between C.B.T., which focuses on the way patients reason, and interpersonal therapy, which focuses on their relations with other people; and that patients who are treated by psychotherapists do no better than patients who meet with sympathetic professors with no psychiatric training. Depressed patients in psychotherapy do no better or worse than depressed patients on medication. There is little evidence to support the assumption that supplementing antidepressant medication with talk therapy improves outcomes. What a load of evidence does seem to suggest is that care works for some of the people some of the time, and it doesn't much matter what sort of care it is. Patients believe that they are being cared for by someone who will make them feel better; therefore, they feel better. It makes no difference whether they’re lying on a couch interpreting dreams or sitting in a Starbucks discussing the concept of “flow.” --The New Yorker, March 1, 2010

Okay so here's what we know:

* Most people do recover from depression.

* The effect of anti-depressants is almost entirely due to the placebo effect -- which is substantial.

* The 13% of depressed patients who are severely depressed, do seem to benefit from antidepressants for reasons that aren't clear.

* For everyone else, just sitting down and talking with someone who cares about you is as effective as any clinical treatment.

* The serotonin theory of depression is bunk and always has been (in spite of being repeated hundreds of millions of times a year by doctors, nurses, and mental health professionals around the world.)

Wow.

So let me just take a moment to explain why I think this is good news, fantastic news even.

Basically, the effectiveness of psychopharmaceuticals was a bubble -- just like the dot.com bubble at the end of the 1990s and just like the housing and financial services bubbles that popped in 2008. Big Pharma is basically in the branding business -- no different than Nike, Starbucks, or Tommy Hilfiger. Big Pharma was selling a lifestyle brand -- PERMANENTLY HAPPY -- but in order to keep their huge profits going, they had to keep hyping the value of their product and pushing it on more and more people. And now that bubble has popped. It's not that there was never any value there. It's just that the value was not as great as advertised.

I was always deeply skeptical of the claims made by Big Pharma. It seemed to me that life is just a series of peaks and valleys. But Big Pharma pathologized the human condition to boost their profits (which is all kinds of messed up when you think about it). Furthermore, it seemed to me that the massive proliferation of antidepressants in the culture was too often just a (happy!) mask to hide the corporate power that has been strip mining our society for the last 40 years. Wages have been stagnant for 40 years, living standards are declining, and huge monopolies control an ever greater share of our lives (between Big Insurance, Big Energy, and Big Finance people have fewer discretionary dollars to spend each month -- most dollars are already allocated for survival before the paycheck ever arrives). PEOPLE HAVE REASON TO BE DEPRESSED BECAUSE THINGS ARE REALLY MESSED UP IN OUR SOCIETY. But Big Pharma came along and patted us all on the heads and said, no, no, it's just YOU who's messed up, society is JUST FINE!

But that quote from The New Yorker is really the big one:

patients who are treated by psychotherapists do no better than patients who meet with sympathetic professors with no psychiatric training.... it doesn't much matter what sort of care it is. Patients believe that they are being cared for by someone who will make them feel better; therefore, they feel better. It makes no difference whether they’re lying on a couch interpreting dreams or sitting in a Starbucks discussing the concept of “flow.”

Here's what that means -- if another human being cares about you and shows that he/she cares, you are likely to get better.

So much of our current moment -- the collapse of the global financial system, the decline in trust in corporations, elected official, and elites -- is pointing us to a return to modesty. To a return to what we know in our gut is true. To a return to living within our means. Furthermore, the evidence that human interaction plays such a large role in healing also points us to something much more important -- the return to community; the return to actually giving a shit about each other instead of trampling over each other in search of ever greater paper wealth. Which is really great news when you think about it.

Look, nature's antidepressants are sleep, exercise, natural food, community, and touch. All of those are almost free (natural food costs money -- but the profit margins on real food are substantially lower than on processed foods). But corporations sell us on the virtues of coffee, cubicles, fast food, and individuality -- because all of those are extremely profitable. And then corporations sell us the "solutions" to the problems they created. I think the way forward then, is for us to step away from the corporatist distortions that have come to permeate society over the last 40 years and to return to what we know to be true -- getting plenty of rest, moving our bodies, eating right, and most importantly, being really good to each other in community.

Update #1: This post is slightly modified from an earlier version. In a post I wrote earlier this week, I accused Niall Ferguson of letting his politics preceed his facts and yet I see that I did some of that in this post too so I went back and rewrote several sentences. Also, I should be clear to point out that all of the discussion above is in reference to depression and antidepressants. This research, by Kirsch and others, is only talking about the placebo effect in connection with antidepressants. Their research says nothing about other classes of psychopharmaceuticals including mood stabilizers, anti-convulsants, or anti-psychotics. Likewise, their research says nothing about the placebo effect in connection with other mental health issues like bipolar disorder, ocd, schizophrenia, etc.

Update #2: For folks interested in learning more about these issues, check out the Carlat Psychiatry Blog.

Update #3: Absolute genius: "how to be happy, a flow chart"

Update #4: Talk Deeply, Be Happy? from the NY Times. (hat tip AR for the link.)

Update #5:  It seems to me that based on the data above, we don't actually know whether the thing that is working is the 1. placebo, 2. the antidepressant drug, or 3. neither -- whether depression just remits on its own with time. Because even the placebo group in the control is still getting something -- no one in these studies is getting no treatment are they?  So isn't there still a third possibility out there -- that depression sometimes goes into remission on its own?

Update #6: A friend (who also happens to be a pharmacist) pointed out that antidepressants are both underprescribed and overprescribed at the same time.  Many of those with severe depression (the population actually helped by these drugs) are not on antidepressants whereas millions of middle class and wealthy people with good health insurance and milder symptoms are overprescribed these drugs.

Update #7:  Louis Bayard writing in Salon.com reflects on this new data in a compelling and deeply personal post entitled, "My antidepressant gets harder to swallow: As studies shed doubt on certain psychiatric drugs, I wonder: Do I really need my little white pill?"  It's very very well done (and many of the comments are fascinating too).  Money quote:

It's bracing to see how depression is treated in other countries, where the relationship between drug manufacturers and physicians isn't quite so hand-in-glove. Great Britain's National Institute for Health and Clinical Excellence, for example, recommends that, before taking antidepressants, people with mild or moderate depression should undergo nine to 12 weeks of guided self-help, nine to 12 weeks of cognitive behavioral therapy, and 10 to 14 weeks of exercise classes.

There's this "thing" and it's the only thing that we've got

I've touched on this topic before, and I even used a concert video to illustrate my point in that post too, but I want to return to this concept because I think it's really important and doesn't get talked about nearly enough. It goes like this:

In the summer of 2008, I went to a concert on the Santa Monica Pier featuring Arrested Development. It was warm, a nice breeze was blowing, and there were thousands of people out on the pier and down on the beach below. The group had been huge back in 1992 but eventually was drown out in the marketplace by the very gangsta rap they had sought to replace through their message of positive Afrocentric hip hop. Their first album, 3 Years, 5 Months & 2 Days in the Life Of... remains one of the greatest music recordings of all time and it seems that most everyone in the audience knew all the lyrics to those songs.

Even though Arrested Development hadn't been on top in a while, the lead singer (Speech?) still had it as a performer and began to lead the audience in a call and response. He'd sing out, "Lemme here you say, whoaaaa," and we'd sing back "whoaaaa" and he'd say "yeaaaah" and we'd sing back "yeaaah." Or he'd sing a line from the verse and then point the microphone out to the audience for us to sing the next line. By the time we got to "Everyday People" the band and the crowd were one -- one huge single organism, singing, smiling, together.

The moment Speech started involving the crowd, chills of inspiration went up my spine. It was the middle of the Presidential election, long before Obama wowed the world at the Democratic National Convention in Denver, and it was the first time in forever that I had actually seen someone lead anything. It was the first time in years that I had actually felt the collective energy of the group again. The crazy things is, I don't think we even have a vocabulary to describe what this thing is -- the collective sphere in the U.S. having been attacked, hacked, dismantled, thwarted, and quite literally murdered for decades. But here I was on the Santa Monica pier, feeling connected again, feeling like a part of a group, feeling the sensation that there was something here that was more than the sum of its parts.

For another example, check out this video for the song Resistance by Muse (seriously check out the video, it's amazing). The crowd shots are incredible -- this is a group of young people in black clothing who are so often portrayed as disaffected, unmotivated, unconnected to the world. But maybe the real issue is that they just don't give a fuck about what the corporatists want them to pretend to care about -- and THAT's why they appear checked out. But when their energy is gathered and focused -- you could power a city with it. Watching the crowd you get the sense that there is nothing this group, together, could not do. But then when they return out into the night again, the energy fades and scatters.

My point is this: as progressives, the collective is all that we have! Yes our policies are better, yes our governing philosophy is better, yes our policies actually work and improve peoples lives. But we are always going to get massively outspent by corporate forces and that money also buys more sophisticated messaging too -- especially in corporate media. ALL THAT WE HAVE is our ability to be popular, our ability to tap into the truth that always resides outside corporate control, our ability to tap into the collective energy that is more than the sum of our individual parts. All that we have is the ability to awaken and harness that thing that we all experience in working as a group, that sensation that anything is possible together. The collective spirit is the one thing the corporatists will never have because the true collective spirit is based on love -- love for each other, love for life, love for the planet. And love can never be bought or sold, it just is, the eternal river of life that flows around us.

During the campaign, Obama figured out how to harness this collective energy and he used it quite effectively. Since being sworn in, he has completely abandoned collective approaches, and mass politics in favor of Rahm-Emanuel-inspired inside baseball. But progressives never win based on triangulation and cynically playing an inside game. The only way we win is through tapping into the energy of the crowd that is based on the truth of love. And until Obama gets back to that, he won't be effective.

I also touch on this concept in a slightly different way in an earlier post called The River.

The Ascent of Money, part 3, a closer look at the relationship between violence and wealth

This is the last post in my three part series on The Ascent of Money (you can read parts 1 and 2 here).

In this post, I want to return to the question, 'What is the relationship between violence and wealth?' One of the reasons I'm so intrigued by this question is that the relationship between the two seems obvious and yet it is never talked about openly in popular culture, and certainly never talked about in an economics classroom. Indeed it seems to me that the only time we every acknowledge the relationship between violence and wealth is in TV shows like The Sopranos or perhaps a movie featuring the character Jason Bourne. I think it is vital to study this dynamic because as we come to understand the relationship between violence and wealth we can presumably take steps to have less violence in our economy and in our society, correct?

With that in mind, as I read through Niall Ferguson's financial history of the world, I started to write the word "violence" into the margin anytime he mentioned the relationship between violence and wealth. I just want to draw your attention to some of those passages so that we can begin to move to the foreground, some of the underlying dynamics of our economy that deserve closer scrutiny:

"Behind every loan shark, there lurks an implicit threat." --The Ascent of Money, p. 40

It's obvious, but worth noting that the informal banker to most of the world's poor, relies on violence as a business model.

"Prior to the 1390s, it might legitimately be suggested, the Medici were more gangsters than bankers: a small-time clan, notable more for low violence than high finance. Between 1343 and 1360 no fewer than five Medici were sentenced to death for capital crimes." p. 42

Quite literally, modern banking began with mafia families in Italy. Interesting too that Ferguson sees capital crimes as "low violence."

"There were no debtors' prisons in the United State in the early 1800s, at a time when English debtors could end up languishing in jail for years." p. 60

I had forgotten about debtors prisons, but up until fairly recently (1869) the country that gave us the Magna Carta also loved putting poor people in jail.

But here's where things get really interesting:

"'War', declared the ancient Greek philosopher Heraclitus, 'is the father of all things.' It was certainly the father of the bond market. In Pieter van der Heyden's extraordinary engraving, The Battle about Money, piggy banks, money bags, barrels of coins, and treasure chests -- most of them heavily armed with swords, knives and lances -- attack each other in a chaotic free-for-all. The Dutch verses below the engraving say: 'It's all for money and goods, this fighting and quarreling.' But what the inscriptions could equally well have said is: 'This fighting is possible only if you can raise the money to pay for it.' The ability to finance war through a market for government debt was, like so much else in financial history, an invention of the Italian Renaissance." p. 69

"The Battle of Waterloo was the culmination of more than two decades of intermittent conflict between Britain and France. But it was more than a battle between two armies. It was also a contest between rival financial systems: one, the French, which under Napoleon had come to be based on plunder (the taxation of the conquered); the other, the British, based on debt." p. 80

"In many ways, it was true that the bond market was powerful. By the later nineteenth century, countries that defaulted on their debts risked economic sanctions, the imposition of foreign control over their finances and even, in at least five cases, military intervention. It is hard to believe that Gladstone would have ordered the invasion of Egypt in 1882 if the Egyptian government had not threatened to renege on its obligations to European bondholders, himself among them. Bringing an 'emerging market' under the aegis of the British Empire was the surest way to remove political risk from investors' concerns. Even those outside the Empire risked a visit from a gunboat if they defaulted, as Venezuela discovered in 1902, when a joint naval expedition by Britain, Germany and Italy temporarily blockaded the country's ports. The United States was especially energetic (and effective) in protecting bondholders' interests in Central America and the Caribbean." p. 98 [By the way, don't you just love how Ferguson describes international war crimes as "energetic (and effective!) ways of protecting bondholder's interests!"]

So the micro is the macro -- just as the loan shark will kneecap a debtor who is late on a payment, creditor nations will invade and overthrow governments, even democratically elected governments, in order to increase profits.

"As [Jan Pieterszoon] Coen [officer of Dutch East India Company (VOC) in the early seventeenth century] himself put it: 'We cannot make war without trade, nor trade without war. he was ruthless in his treatment of competitors, executing British East India Company officials at Amboyna and effectively wiping out the indigenous Bandanese." p. 134

Far from being an aberration, that theology of domination continues on to this day in U.S. foreign policy. It is also interesting to think about the ways in which creditor nations kneecap debtor nations to get their money back given that China is now the de facto banker to the U.S. -- holding nearly a trillion dollars of our debt.

"Besides cheaper calories, cheaper wood and cheaper wool and cotton, imperial expansion brought other unintended economic benefits, too. It encouraged the development of militarily useful technologies -- clocks, guns, lenses and navigational instruments -- that turned out to have big spin-offs for the development of industrial machinery." p. 285-286.

"The key problem with overseas investment, then as now, is that it is hard for investors in London or New York to see what a foreign government or an overseas manager is up to when they are an ocean or more away. Moreover, most non-Western countries had, until quite recently, highly unreliable legal systems and differing accounting rules. If a foreign trading partner decided to default on its debts, there was little that an investor situated on the other side of the world could do. In the first era of globalization, the solution to this problem was brutally simple but effective: to impose European rule." p. 289

You get the point. Even in a book written by a conservative Senior Fellow at the Hoover Institution (the Hoover institution -- intentionally named after the worst president in U.S. history), a guy who has a vested interest in obscuring the relationship between wealth and violence, the relationship shows up again and again. You can't talk about the history of money, or the history of finance, or economic history, without also talking about the history of violence and the ways in which violence has been used to enforce contracts and increase profits.

More on that topic in future posts.

The role of fractional reserve banking in propelling the growth of capitalism in Protestant countries

Friends who know me know that I'm a huge fan of Max Weber's The Protestant Ethic and the Spirit of Capitalism. I discuss this book so often in person that I was surprised the other day when I did a search of my blog and discovered that I've never gone into much depth about the book here on the site. So today I want to rap down the basic thesis of The Protestant Ethic & The Spirit of Capitalism and then expand upon Weber's theory using data from Niall Ferguson's The Ascent of Money. (There is an excellent Wikipedia article on The Protestant Ethic & the Spirit of Capitalism for anyone who is looking for a more complete overview of the book.)

First published as a two-part article in 1904-5, The Protestant Ethic and the Spirit of Capitalism is one of the cornerstones of the field of sociology. In the book, Weber is trying to figure out why it is that capitalism developed faster in countries that adopted Protestantism while the development of capitalism in Catholic and other non-Protestant countries lagged behind. And what he finds is this:

The central question for a Christian is whether he/she is going to heaven. In Catholicism, for hundreds of years, the path to heaven was very clear -- pay "indulgences" to the church, and your sins are forgiven and when you die, you go to heaven. Indulgences were basically a way for the Catholic Church to tax all of Europe for hundreds of years. But Martin Luther and John Calvin hated the practice of indulgences (and many feudal princes in Germany and other provinces hated them too). Luther and then Calvin argued that God is so great, no human works could possibly be enough to earn his (sic) favor. Rather, everything is predestined, determined ahead of time by God. They argued that those who go to heaven are saved through God's grace alone, not human works (read: indulgences).

Which is fine as far as that goes, but people naturally want to know if they are one of the chosen, one of the elect who will be going to heaven. Weber writes:

"The question, Am I one of the elect? must sooner or later have arisen for every believer and have forced all other interests into the background." --The Protestant Ethic & The Spirit of Capitalism, p. 110.

This was no small matter either. Luther argued that only 144,000 people were going to heaven, so there were a limited number of seats on the bus, so to speak. So people started to look around for signs that one is "chosen." And what are the signs? Well according to Luther and Calvin, the chosen are those who dedicate their lives to creating God's will on earth. So the signs are that one works without ceasing -- and here's the kicker -- and one never spends much on the sins of the flesh. Luther and Calvin hated the sensuality of Catholicism, that peasants could get drunk, dance, and have sex with each other on Saturday and then pay their indulgences on Sunday and be forgiven. The mark of Protestantism became those who so ordered their lives so that they NEVER gave in to the sins of the flesh and never spent their earnings on bodily desires. Hence the Protestant Ethic was born.

"On the one hand it is held to be an absolute duty to consider oneself chosen, and to combat all doubts as temptations of the devil, since lack of self-confidence is the result of insufficient faith, hence of imperfect grace... On the other hand, in order to attain that self-confidence intense worldly activity is recommended as the most suitable means." --The Protestant Ethic and the Spirit of Capitalism, p. 111 and 112

"The God of Calvinism demanded of his believers not single good works, but a life of good works combined into a unified system. There was no place for the very human Catholic cycle of sin, repentance, atonement, release, followed by renewed sin.... [Protestantism] had developed a systematic method of rational conduct with the purpose of overcoming the status naturae, to free man from the power of irrational impulses and his dependence on the world and on nature." p. 117 - 118

"Sebastian Franck struck the central characteristic of this type of religion when he saw the significance of the Reformation in the fact that now every Christian had to be a monk all his life.... By founding its ethic in the doctrine of predestination, Protestantism substituted for the spiritual aristocracy of monks outside of and above the world the spiritual aristocracy of the predestined saints of God within the world." p. 121

Just to be clear, the relentless work ethic of Protestants was not a means to attain salvation but rather a system of self assurance (a method of existential anxiety control if you will) that simply affirmed one had already attained salvation through grace.

But something curious happens when people work extremely hard and rarely spend money. For the first time in human history you have large accumulations of capital. And large accumulation of capital naturally lead to banks (places to store that capital), which then provides the catalyst (and the capital) for the emergence of capitalism in all of the Protestant nations.

The explanatory powers of the theory are so strong that indeed, a whole academic discipline, sociology, emerged in its wake. And the writing in The Protestant Ethic and the Spirit of Capitalism is both so direct and searing that it has endured as one of the great academic treatises of all time.

And yet, as great as The Protestant Ethic and the Spirit of Capitalism is, I wonder if there are some additional factors that also help to explain the rise of capitalism in Protestant countries.

In an earlier post, I asked whether in fact, slavery, not Protestantism, was the catalyst for the emergence of capitalism? Indeed Eric Williams makes that point in his book Capitalism & Slavery and Eduardo Galeano builds upon that idea in, Open Veins of Latin America.

But I don't think it's an either/or situation. I think it's a both/and. Protestantism led to the accumulation of capital that developed the bourgeois class that accumulated even more capital that paid for the ships that participated in and profited from the African slave trade that further fueled the growth of capitalism.

After reading The Ascent of Money, I think I may have stumbled upon another important facet of the story: fractional reserve banking. I'll explain:

The early Christian Church and Islam too forbade the lending of money and charging interest. It was called usury and was considered one of the worst possible sins.

"For Christians, lending money at interest was a sin. Usurers, people who lent money at interest, had been excommunicated by the Third Lateran Council in 1179. Even arguing that usury was not a sin had been condemned as heresy by the Council of Vienna in 1311-12. Christian usurers had to make restitution to the Church before they could be buried on hallowed ground." --The Ascent of Money, p. 35

The earliest forms of modern banking began in Italy with the emergence of the powerful Medici family serving as an intermediary between various businesses.

"Of particular importance in the Medici's early business were the bills of exchange (cambium per literas) that had developed in the course of the Middle Ages as a way of financing trade. If one merchant owned another sum that could not be paid in cash until the conclusion of a transaction some months hence, the creditor could draw a bill on the debtor and use the bill as a means of payment in its own right or obtain cash for it at a discount from a banker willing to act as broker. Whereas the charging of interest was condemned as usury by the Church, there was nothing to prevent a shrewd trader making profits on such transactions. That was the essence of the Medici business. There were no checks; instructions were given orally and written in the bank's books. There was no interest; depositors were given discrezione (in proportion to the annual profits of the firm) to compensate them for risking their money. " --The Ascent of Money, p. 43-44

But it wasn't until the Reformation that modern banking and the modern capitalist system really took off. And Martin Luther and John Calvin were key in revising church teachings on lending with interest.

"From 1515 until early 1524, Luther's works indicate that he was completely opposed to lending money at interest. In the second time period, from late 1524 until his death in 1546, while still principally against usury -- especially among Christians -- Luther's writings indicate that he allowed for the practice of lending money at interest, albeit with certain restrictions." --Reforming the Morality of Usury: A Study of the Differences that Separated the Protestant Reformers, David Jones p. 52

In 1524, just 4 years after surviving the Diet of Worms and excommunication (but not execution) by the Catholic Church, Luther displayed a notable shift in his writing on usury:

"Luther's writings reveal that he tolerated and even suggested guidelines whereby usury may be practiced in the kingdom of this world. These guidelines include a call for itemized collateral, shared risk, and governmental oversight of usurious transactions." -- Reforming the Morality of Usury: A Study of the Differences that Separated the Protestant Reformers, p. 61

So too, Calvin's views on usury also represented a break from earlier church teachings. In Calvin's letter on usury in 1545 he makes a biblical case that usury might be permitted under certain circumstances:

"Calvin knew there were two Hebrew words translated as “usury.” One, neshek, meant “to bite”; the other, tarbit, meant “to take legitimate increase.” Based on these distinctions, Calvin argued that only “biting” loans were forbidden. Thus, one could lend at interest to business people who would make a profit using the money." -- Norman Jones, Utah State University

As a result of these theological shifts, the modern banking system began to emerge in Protestant countries in Europe.

"It was in Amsterdam, London and Stockholm [all cities that broke from Catholicism during the Reformation] that the next decisive wave of financial innovation occurred, as the forerunners of modern central banks made their first appearance. The seventeenth century saw the foundation of three distinctly novel institutions that, in their different ways, were intended to serve a public as well as a private financial function. The Amsterdam Exchange Bank (Wisselbank) was set up in 1609 to resolve the practical problems created for merchants by the circulation of multiple currencies in the United Provinces, where there were no fewer than fourteen different mints and copious quantities of foreign coins. By allowing merchants to set up accounts denominated in a standardized currency, the Exchange Bank pioneered the system of checks and direct debits or transfer that we take for granted today. This allowed more and more commercial transactions to take place without the need for the sums involved to materialize in actual coins. One merchant could make a payment to another simply by arranging for his account at the bank to be debited and the counterparty's account to be credited. The limitation on this system was simply that the Exchange Bank maintained something close to a 100 percent ratio between its deposits and its reserves of precious metal and coin....

It was in Stockholm nearly half a century later, with the foundation of the Swedish Riksbank in 1656, that the barrier was broken through. Although it performed the same functions as the Dutch Wisselbank, the Riksbank was also designed to be a Lanebank, meaning that it engaged in lending as well as facilitating commercial payments. By lending amounts in excess of its metallic reserve, it may be said to have pioneered the practice of what would later be known as fractional reserve banking, exploiting the fact that money left on deposit could profitably be lent out to borrowers. Since depositors were highly unlikely to ask en masse for their money, only a fraction of their money need to be kept in the Riksbank's reserves at any given time." --The Ascent of Money, p. 48-49

Think about how important fractional reserve banking is to the history of the world. I deposit $100 in a bank that is required to hold 10% reserves. The bank then lends out $90 to a business that spends that $90 on equipment to run their business and make a profit. The seller of that equipment deposits that $90 in a bank that then lends out $81 and so on. In just 3 transactions, the original $100 has been turned into $271 of economic activity.

Basically, while the Catholic countries (Spain, Portugal, Italy) were still thinking that money was metal and building far flung empires to dig the metal ore out of the ground, the Protestant countries of Europe figured out how to make money out of nothing more than trust. And in the end, money based on credit (trust in business relationships) proved to be more resilient than money based on metal. How crazy is that!?

The important point to note here is that, it was not just the Protestant ethic that led to (capital formation which caused) the emergence of modern capitalism. It was also the theological openings by Luther and Calvin to allow usury, to allow lending with interest that sparked the emergence of capitalism in Reformed countries as well. Free from the dictates of the Vatican, the Protestant countries quickly liberalized lending rules in ways that reshaped the balance of power in the world and gave birth to our modern capitalist economy.

Final thought: it's interesting to reflect on how different church doctrines lead to different lending patterns in the economy. Basically, the Catholic ban on usury led to the rise of mafia-style families like the Medici -- informal financial intermediaries who don't charge interest but take a cut of each transaction. By contract, Protestant support for usury can be said to lead to the development of the multinational banks. They both have their problems of course, but it's fascinating to reflect on the role of theology in dictating the direction of the economy.

Update #1: A number of researchers have noted that the ban on charging interest in Islam has impeded the economic growth of the Middle East, leading in part to the millions of young men with limited financial futures (who are then a target for recruitment by radical Islamic organizations). Also I think it's interesting to note that religions that tend to de-emphasize the importance of the physical world and give priority to the spiritual or invisible world, for example Buddhism and Hinduism, both lead to economic structures that are a complete disaster -- basically leaving the society stuck with a stone age economy. Western liberal support for Tibet is always something of a mystery to me given that Tibet was a theocracy with a population left destitute by a theology that paid little attention to the need to improve living standards. The Indian economy has shown remarkable growth in recent years but I would argue that Hinduism is not driving that growth -- rather as the country has become more secular, it has devoted more resources towards economic development (investing heavily in education and infrastructure).

What is money?

[Editors note: Today I am starting what I hope will turn into a series of posts on what exactly it means to "wake up." I hear the words "awake and alive" a lot these days, particularly in Buddhist circles. When Buddhists talk about waking up they are usually referring to a state of non-dualism, everlasting consciousness, free from the ever-changing nature of our physical world. I've never really been able to discover the "awake" state that Buddhists refer to -- and I suspect most Buddhists, even those who claim enlightenment haven't experienced it either (in my experience, most people who claim to be enlightened in this world are not).

Instead, I'm talking about waking up in the political sense -- breaking through the assumptions and noise around us and seeing things as they really are. That's really the purpose of this blog in general but just in the last few weeks I feel like I've been seeing the outlines of what an awake political consciousness might really look like so I hope to begin sketching it here. I'm going to be coming at this question from a bunch of different angles so at first it will seem like my posts are all over the place. But I think over time, these various sketches will come together to paint a clearer picture of things as they are.]

As frequent readers of this blog will know, one of the questions I keep coming back to is, "What is the relationship between violence and wealth?" But I realized recently, that perhaps I have the question phrased incorrectly. Maybe the question is, "What is the relationship between violence and money?" And in order to answer that question, we need to ask, 'well, what exactly is this thing we call money?'

The answer is not as obvious as it may appear. Is money the rectangular piece of paper in my pocket printed by the government? Paper money used to be tied to gold but the U.S. went off the gold standard in 1971 and now the value of paper money is not tied to anything tangible. Furthermore, why did we ever treat hunks of metal as money in the first place? Is the demand for jewelry really that high? What about the number staring back at me on the computer screen showing my checking account balance? Are electronic ones and zeros stored in some remote server that most people never see really "money" in the same way that paper or metal is considered money?

To better understand money I read, Niall Ferguson's "The Ascent of Money: A Financial History of the World." Ferguson is a conservative (he's a Senior Fellow at the Hoover Institution) and he has a bad habit of dropping gratuitous neocon soundbites into the text that have nothing to do with his point. For example he argues that unions suck (page 116 in the hardcover edition); that the fascist military dictator Augusto Pinochet was really a great guy (pages 213-215); and that George Soros is evil (pgs 314-319). I guess that's just how conservatives roll -- they have to throw in their nonsensical applause lines every 50 pages in or so in order to keep their membership card active and get invited to the next conference.

Ferguson's knee jerk attacks on working people are all the more incongruous because he wrote this book during the middle of one of the greatest financial collapses in human history. As he narrates the economic history of the world, a picture emerges of an endless cycle of booms and busts and our era in no different. The long term data presented in The Ascent of Money serves as a pretty profound indictment of the capitalist system and the greed and avarice of bankers and businessmen (occasionally a few women too, but mostly men). But I guess that's why he had to throw in the red meat applause lines for conservatives -- he didn't want his neocon funders and friends to think he had 'gone all Naomi Klein on them' (even though the data in The Ascent of Money really supports Klein's politics more than Ferguson's.)

I would be remiss at this point if I failed to point out just how odious it is to have to read nonsense like this is a book by a major publisher:

To work the mines, the Spaniards at first relied on paying wages to the inhabitants of nearby villages. But conditions were so hard that from the late sixteenth century a system of forced labor (la mita) had to be introduced, whereby men aged between 18 and 50 from the sixteen highland provinces were conscripted for seventeen weeks a year. Mortality among the miners was horrendous, not least because of constant exposure to the mercury fumes generated by the patio process of refinement, whereby ground-up silver ore was trampled into an amalgam with mercury, washed and then heated to burn off the mercury. The air down the mine shafts was (and remains) noxious and miners had to descend seven-hundred-foot shafts on the most primitive of steps, clambering back up after long hours of digging with sacks or ore tied to their backs. (p. 21)

Did you catch that? Ferguson writes that 'The Spanish at first relied on paying wages. But the conditions were so bad (namely most of the miners died) so a system of forced labor HAD TO BE INTRODUCED.' The Spanish enslaved the population and worked them to death in the mines -- but Ferguson writes about it as an economic necessity as if the Spanish HAD NO OTHER CHOICE but to enslave and kill the local population.

Think of all the other ways that a more conscientious person might have written that passage: "But the conditions in the mines were so horrendous that the indigenous population refused to work at any price. Rather than improve conditions in the mine or simply walk away, the Spanish, driven by their lust for wealth and a theology of domination, decided to enslave the local population instead. The resulting forced labor and early death for the indigenous population were acts of genocide that enriched the Spanish crown." It's amazing to me that none of the editors at The Penguin Press bothered to cut out the sentences that make Ferguson look like a corporatist monster. But maybe they just didn't see it because they come from a similar worldview. It really shows the sorry state of conservative thinking that Ferguson is treated as a "serious academic" even though he reflexively sides with capital and against people every single time.

The numerous instances of sloppy, ideologically driven prose are really too bad because the information contained in The Ascent of Money is really quite excellent. Case in point, Ferguson's explanation of "what is money" is very insightful -- perhaps the strongest section in the book:

"What the Spaniards had failed to understand is that the value of precious metal is not absolute. Money is worth only what someone else is willing to give you for it. An increase in its supply will not make a society richer, thought it may enrich the government that monopolizes the production of money. Other things being equal, monetary expansion will merely make prices higher. There was in fact no reason other than historical happenstance that money was for so long equated in the Western mind with metal. In ancient Mesopotamia, beginning around five thousand years ago, people used clay tokens to record transaction involving agricultural produce like barley or wool, or metals such as silver. Rings, blocks or sheets made of silver certainly served as ready money (as did grain), but the clay tablets were just as important, and probably more so. A great many have survived, reminders that when human beings first began to produce written records of their activities they did so not to write history, poetry or philosophy, but to do business." (The Ascent of Money, p. 26 - 27.)

"What the conquistadors failed to understand is that money is a matter of belief, event faith: belief in the person paying us; belief in the person issuing the money he uses or the institution that honors his checks or transfers. Money is not metal. It is trust inscribed: on silver, on clay, on paper, on a liquid crystal display. Anything can serve as money, from the cowrie shells of the Maldives to the huge stone discs used on the pacific islands of Yap. And now, it seems, in this electronic age nothing can serve as money too." (p. 29 - 30.)

"It is no coincidence that in English the root of 'credit' is credo, the Latin for 'I believe.'" (p. 30)

"Cursed with an abundance of precious metal, mighty Spain failed to develop a sophisticated banking system relying instead of the merchants of Antwerp for short-term cash advances against future silver deliveries. The idea that money was really about credit, not metal, never quite caught on in Madrid. Indeed, the Spanish crown ended up defaulting on all or part of its debt no fewer than fourteen times between 1557 and 1696. With a track record like that, all the silver in Potosi could not make Spain a secure credit risk. In the modern world, power would go to the bankers, not the bankrupts." (p. 52)

In my next post I'll explore the ways in which fractional reserve banking explains The Protestant Ethic & the Spirit of Capitalism.

I shouldn't have watched Religulous again, but...

Okay this is not gonna go over well, but, that's never really stopped me before. [Actually, social disapproval is one of the ways that our minds become colonized, circumscribed, and constrained.  And it is only through risking social disapproval that we break through those chains to see the world as it really is.]  So here goes:

By any standard modern definition of mental health, the founders of most of the major world religions were  mentally ill.  Matching our modern understanding of mental health up against the written accounts of the actions of these religious figures, one would observe that:

Siddhārtha Gautama, the Buddha, appears to have suffered from anti-social personality disorder.  He abandoned his family and avoided most personal relationships with other people, preferring instead to live under a tree with his eyes closed for most of his life. 

Abraham, the patriarch of the Israelites and the Jewish faith, appears to have suffered from paranoid schizophrenia: he heard voices, thought God was talking to him, and tried to murder his own son because of the voices in his head.

Jesus of Nazareth, the founder of the Christian faith, appears to have suffered from narcissistic personality disorder.  He thought he was the son of God, told people to abandon their families, give everything away, and follow him.

I know less about the life and works of Muhammad ibn ‘Abdullāh, the founder of Islam.  But he too, claimed that angels sent by God spoke directly to him and is said to have transcribed an entire book, the Qur'an, based on these messages from God.  Today we would call that sort of thinking schizophrenic. 

More recently:

Martin Luther (who started the Protestant Reformation), St. Ignacius of Loyola (founder of the Jesuits), and John Bunyan (author of Pilgrim's Progress which formed the cornerstone of Puritanism) all suffered from obsessive compulsive disorder.

Joseph Smith Jr., founder of Mormonism, was a well known con man.  [Read Jon Krakauer's book, Under the Banner of Heaven to learn more.]  I don't know where being a con man fits in the DSM-IV but needless to say, it suggests that Smith's mental health was not 100%. 

What this suggests is that 1) our tradition of holding the medical practice of psychiatry in high esteem; and 2) our tradition of respecting various religious traditions -- are fundamentally incompatible with each other.  To the extent that we hold that the DSM-IV is the best approximation we have for what constitutes mental health and mental illness -- then we necessarily conclude that the followers of the various major religions traditions are following the teachings of people who were likely suffering from mental illness.  And to the extent that we conclude that religion is a good and true depiction of life on earth (and beyond) -- then we necessarily conclude that the DSM-IV is invalid.  And yet, most respectable, modern people in Western society hold these two fundamentally incompatible sets of views ('religious tolerance is good and modern psychology is good') without noting the severe dissonance between these two sets of views.

Said simply -- it seems that we either we need to respect crazy people more, or respect religious traditions less.

some thoughts on economic growth

In order for the economy to grow, you have to make things that improve people's quality of life.

You have to grow things that people can eat (real food that nourishes bodies not the frankenfood that ConAgra creates).

You have to make manufactured goods that save people time or money, or that increase comfort or well being.

You have to make technological innovations that cure diseases or solve problems or connect people in meaningful ways.

You have to provide services that increase stability, that increase happiness, or that help people live fulfilling lives.

You have to build the infrastructure (physical and social) upon which all of the rest of this economic activity can transpire.

That is the foundation of economic growth in any country.

But since 1993 and the passage of NAFTA, the U.S. doesn't really make things anymore. We've shipped a large portion of our manufacturing to Mexico and China and the third world.

A number of companies -- like the private health insurance industry -- create the illusion of making something. Judging from their ads, private health insurance companies claims to be an accounting service to improve health care access, quality, and affordability. But in reality, they are just rackets to pump money from people to corporations.

Since the repeal of Glass-Steagal in 1999, the only thing that has propelled U.S. economic growth is "financial services." But it turns out that the U.S.led "innovation in financial services" was really just a scam, an elaborate mathematical Ponzi scheme executed by the best and brightest firms on Wall Street.

So when President Obama tries to stimulate a depressed economy now, the problem is, the only thing that the U.S. really makes anymore, the only thing we really excel at, is rackets, scams, and financial Ponzi schemes. Left with little choice, the Obama financial team led by Geithner & Summers has tried to re-inflate the financial services bubble and the housing bubble. Because really, that's all we got.

The problem is that this strategy is not going to work. The fundamentals just aren't there. The idea that we can run a successful economy without making things that actually improve people's lives is just silly. The idea that we can just muddle through this mess and everything will be okay is about to crash headfirst into the brick wall of reality.

So, my guess is that the re-inflated housing and financial services bubble will pop. I imagine traders will take profits in the early summer, sticking small scale investors with huge losses, and we'll head into the second dip of the great recession by fall. Because the Wall Street crowd doesn't really don't care if the bubble pops again-- they know they'll get a better deal from a Republican Congress and that a Republican electoral sweep is more likely if the economy is in tatters next November.

The alternative of course would be for Obama to acknowledge the depth of the economic and political problems facing the country and begin to address them. It would likely need to include restoring Glass-Steagal, canceling NAFTA, nationalizing the health insurance and oil industries, cutting the defense budget in half, bringing our troops home from Afghanistan and Iraq, restoring FDR-era levels of taxation on the rich, and creating a national university system dedicated to science and engineering. Ian Welsh has a great list of things that are needed "To Fix America." But again it does not seem that Obama is interested in having that sort of conversation with America or pushing that sort of legislative agenda through Congress. It is exactly the sort of sober, adult conversation that Obama potentially could be really great at. But instead we get nonsense about bipartisan budget commissions and the 'need to reform entitlement programs' including Medicare and Social Security. Quite literally, facing an economy that is hitting on no cylinders -- our political class proposes slashing the most effective anti-poverty programs in the history of the world rather than addressing the sources of the problem.

a couple of great links

I know I'm posting a lot of links these days (as opposed to my original essays). But some folks out there are completely rocking it right now so I want to be sure to highlight some of the great thinking and writing happening in the progressive blogosphere. (I actually think we're witnesses the maturation of the progressive blogosphere -- it is getting smarter and faster before our eyes, but that's another post.)

Devilstower over at DailyKos hits it out of the park with his(?her?) post, "Remember the Naughts." Money quote (hat tip to Digby for highlighting it!):

Don't forget the naughts, because this decade, no matter what anyone on the right might say, was conservatism on trial. You want less taxes? You got less taxes. You want less regulation? You got less regulation. Open markets? Wide open. An illusion of security in place of rights? Hey, presto. Think we should privatize war by handing unlimited power given to military contractors so they can kick butt and take names? Kiddo, we passed out boots and pencils by the thousands. Everything, everything, that ever showed up on a drooled-over right wing wish list got implemented -- with a side order of Freedom Fries.

They will try to disown it, and God knows if I was responsible for this mess I'd be disowning it, too. But the truth is that the conservatives got everything they wanted in the decade just past, everything that they've claimed for forty years would make America "great again". They didn't fart around with any "red dog Republicans." They rolled over their moderates and implemented a conservative dream.

What did we get for it? We got an economy in ruins, a government in massive debt, unending war, and the repudiation of the world. There's no doubt that Republicans want you to forget the last decade, because if you remember... if you remember when you went down to the water hole and were jumped by every lunacy that ever emerged from the wet dreams of Grover Norquist and Dick Cheney, well, it's not likely that you'd give them a chance to do it again.

Then Ian Welsh answers a question that I have been pondering myself for the last few weeks, "Why Democrats Are Trying to Commit Electoral Suicide." Really the whole piece should be required reading for any poli sci 101 class, but I'll just quote one paragraph and urge you to click over to read the whole thing:

The elites are convinced they know what has to be done. Not necessarily what’s “best”, but what is possible given the constraints they believe America operates under and the pressures which elected officials work with. So Obama can say, and mean, that if he were creating a medical system from scratch, he’d go with single payer. But he “knows” that’s impossible, not just for political reasons, but because there are huge monied interests who would be horribly damaged or even destroyed by moving to single payer. On top of that, he looks at the amount of actual change required to shift all that money away from insurance companies and to reduce pharma profits, and to change which providers get paid what, and he sees it as immensely disruptive to the economy. In theory, it might lead to a better place, but to Obama, the disruption on the way there is unthinkable.

Ian Welsh continues to be one of the few voices of reason as the Democratic Party (and its apologists) shows that almost none of its leaders has the sort of transformative consciousness necessary for real change [just so people don't get the wrong idea, fuck Ralph Nader too, self described green party people in the U.S. appear to have even less transformative consciousness than Democrats]. Also the comments over at IanWelsh.net are often surprisingly good -- definitely worth a look.

the Obama disconnect: why progressives ain't happy with Obama's first year in office

It's no secret that progressives are not happy with President Obama's performance over the past year. Jane Hamsher, Markos Moulitsas, and Digby are in open revolt over the Senate health care reform bill. John Aravosis over at Americablog has been railing against President Obama for his failure to deliver on promises regarding LGBT equality. The peace movement, including MoveOn & Brave New Films, has been completely undermined by President Obama's decision to double down in Afghanistan. And don't even get the Canadians started -- Naomi Klein and Ian Welsh could melt the paint off a barn with their withering criticism of President Obama's failures on climate change (Klein) and his corporatist approach to the financial crisis (Welsh).

With that in mind, the conversation in the progressive blogosphere over the last month has been truly bizarre. Progressives have measured Obama's actions and concluded that he has failed to deliver on core promises and principles. Meanwhile, Obama loyalists like Ezra Klein, Nate Silver, and Josh Marshall have all jumped into the fray to say, 'Whoa! Whoa! That's CRAZY TALK to say that Obama is not a progressive or to say that he has failed to deliver on key promises.' Then they'll trot out a soundbite from the campaign and say, 'See! See! Obama always was a moderate (Republican) and never claimed otherwise.' Strangely they also trot out other soundbites to say 'See! See! Obama really is a true progressive (even though he is acting like a moderate Republican from the Northeast).' (And yes, I know that E. Klein, Silver, and Marshall do not think of themselves as "Obama loyalists" more like just good "mainstream" Newsweek Democrats. But the fact remains that they are doing the heavy lifting for Obama in the progressive blogosphere right now).

And into this scrum walks Micah L. Sifry over at TechPresident with a pitch-perfect analysis of what happened this past year -- how "Yes We Can" became Summers, Geithner, & Emanuel running the country. I'm just going to quote from one paragraph, but I really want to encourage you to read the whole piece, it's really well thought out and well argued:

The truth is that Obama was never nearly as free of dependence on big money donors as the reporting suggested, nor was his movement as bottom-up or people-centric as his marketing implied. And this is the big story of 2009, if you ask me, the meta-story of what did, and didn't happen, in the first year of Obama's administration. The people who voted for him weren't organized in any kind of new or powerful way, and the special interests--banks, energy companies, health interests, car-makers, the military-industrial complex--sat first at the table and wrote the menu. Myth met reality, and came up wanting.

Digby has some great reflections on Sifry's piece too, (here). She writes:

And even someone as cynical as I was about the race was a little bit surprised at how clumsily the White House has handled the politics. It's felt gratuitous, as if the plan was to repeatedly disappoint the base in order to prove their centrist bonafides. That sort of triangulation may have been necessary at another time, but right now it foolishly has moved the debate to the right when the right was badly discredited. It seems to be a matter of policy preference. And there is probably a price to pay for that.

I think some of the feelings of betrayal among progressives stem from the fact that the fundamental equation appears to have has changed. During the campaign, the equation that guided everything was, 'This is about you. We live and die based on our popular grassroots base.' But President Obama's governing philosophy (as implemented by Rahm Emanuel) has been guided by, 'This is about corporation campaign contributions. We will do our best to make things better for everyone with the caveat that we will NOT take any actions that upset our largest donors.' It's hard to have two more radically different guiding philosophies in the space of 12 months. Obama's message to his progressive base has gone from empowering ("Yes, we can!") to condescending ('trust me, it'll all work out') in the space of less than a year.

Maybe it's all just a sad commentary on the progressive movement. A candidate came along who said, "We're the ones we've been waiting for!" and we all swooned with adoration. We heard, "Yes we can" and filled in our own wish list. But I think there was also a wink and a nod orchestrated by the Obama campaign. The heavy emphasis on Obama's background as a community organizer created the impression that MLK himself was resurrected and running for President. Regardless of who led the other person on, after the first year of the Obama administration, it's clear that progressives need to tighten our belts, step back into the trenches, and fight for every single scrap that we can, because ain't no one gonna deliver it for us on a silver platter. And that's probably for the best, progressivism is never about one person, it's a vision of policy based on the idea that collective approaches are almost always better than individual ones. President Obama is gonna make progressives prove our mettle on every single issue for the next eight years. I hope we rise to the challenge.

Update #1. bmaz has an extensive post on this topic over at Firedoglake. Interestingly, in many ways, Firedoglake is building the sort of loud, messy, smart, participatory, nimble, truly progressive political organization that we had hoped would emerge from OFA.

Constitutional questions regarding the Senate health care reform bill

Look, I'm as progressive as they come. I want national health insurance as much as anyone. But it seems to me that the Senate health care reform bill, as it currently stands, may be unconstitutional.

As I understand it:

The Constitution gives Congress the power to tax.

The Constitution gives Congress the power to provide services with said tax money.

But the Constitution does NOT give Congress the power to require that I purchase a product or service from a private corporation as a condition of citizenship.

Let me give an example that might illustrate what I'm talking about:

Suppose that the best scientific research had shown that running makes people healthier (it does).

And suppose that New Balance Shoes was the last American shoemaker remaining and that it had fallen on hard times (it is and it has).

Now suppose that in order to save New Balance Shoe Corporation, Congress passed a law saying that all American citizens must purchase a pair of New Balance Shoes every year or face a penalty. That would clearly be unconstitutional, correct?

Isn't that what the Senate health care reform bill actually does? Absent a public option or Medicare for All, the Senate health care bill doesn't provide services. Rather it mandates that every American must buy a service from a private corporation as a condition of citizenship. I don't see how that passes Constitutional muster.

Now of course the obvious reply is to point to car insurance. Every state requires that those who own a car have valid car insurance from a private corporation. And it seems to work out fine for everyone (with some grumbling and subsequent reforms in the system from time to time). But the important difference between health insurance and car insurance is that car insurance is a condition of owning a car -- not citizenship. I can always opt out of car insurance by taking the bus or walking or riding my bike or staying home.

I imagine the other potential variation of disagreement might be to argue that Congress subcontracts with private corporations to provide services all the time -- so what's so different about providing health insurance through a private subcontractor? The difference as I see it is that in the case of using a private corporation to build a road for example -- the private corporation is always the SUBcontractor. Even in that case, the ultimate responsibility for the work still resides with the government who is paying for the product or service. But that's not how the Senate health care bill works, does it? The Senate health care bill says I must purchase a service from a private corporation (which is then free to pocket 30% of that money as profit). Government may provide a subsidy to me to help me to buy that private service, but the contractual relationship is between me and the private insurer, not me and the government.

The rules for citizenship are pretty clearly laid out in the Constitution. And if Congress wants to amend the rules for citizenship to require private health insurance as a condition of citizenship, that's fine, but they would have to amend the Constitution in order to do it.

If Congress provided a universal public option or Medicare for All, then all of these Constitutional questions go away. But in the absence of a universal public option or Medicare for All, I don't see how the Senate health care bill is Constitutional.

(Hat tip to emptywheel at FDL for providing the inspiration for this post.)

Update #1: Well knock me over with a feather! Senator Orrin Hatch (R-UT) has an editorial in the Wall Street Journal that argues that the individual mandate is unconstitutional. Of course Senator Hatch is making the argument in the attempt to block any expansion of coverage. By contrast, I'm saying that the individual (private health insurance) mandate is unconstitutional and THEREFORE the only way to constitutionally expand coverage is through a universal government run plan like Medicare for All (see the comment below from "Bob the Health and Health Care Advocate" along these lines). I gotta admit, I'm extremely uncomfortable making a argument that is similar to the one made by Orrin Hatch -- because that dude is wrong about almost everything.

mcjoan over at DailyKos cites Jack Balkin who slaps down the unconstitutionality argument. He writes:

The individual mandate is structured as a tax. And the tax is perfectly constitutional under Congress's powers to tax and spend for the general welfare.

That doesn't seem very reassuring to me. If indeed the individual mandate is structured as a tax then it would seem that Congress is authorizing the IRS to collect taxes from citizens on behalf of a private corporation -- which raises even more constitutional questions. On the other hand, it really is the perfect metaphor for the sorry state of the U.S. Congress at this point -- a public body working on behalf of the interests of its corporate bosses.

Said differently, Congress could create a mandate whereby all citizens are required to buy Miley Cyrus CDs. And presumably Congress could "structure that as a tax." But I don't see how that would be constitutional. Same problem with private health insurance. Congress doesn't decide what is or is not constitutional, the courts decide that.

Update #2: Many commentators have credited President Obama with practicing "the art of the possible." The notion is that President Obama figures out the limits of what Congress can hope to pass and never asks for anything beyond those limits. Never mind that "the art of the possible" is the exact opposite of what candidate Obama ran on. What "the art of the possible" argument overlooks is that what is possible to get through Congress may not be possible on the ground as policy.

Here's the thing:

Lots of people hate the U.S. Postal Service -- and yet the U.S. Postal Service is amazing! The U.S. Postal Service will deliver a letter door-to-door anywhere in the U.S. in about three days for less than the cost of a tip at Starbucks or chump change thrown in the case of a street musician. And yet many people rail against the USPS, incensed by the high cost of a 43 cent stamp!!!

Now imagine if instead of a 43 CENT stamp and wonderful service, if the Congress sends the IRS to collect THOUSANDS OF DOLLARS from citizens on behalf of Aetna -- even though Aetna is still allowed to deny claims and cap lifetime payments.

Good luck with that.

Many commentators (and policymakers too) have been so busy trying to read the mind of Joe Lieberman to figure out what he would tolerate, that it seems that they never bothered to ask what the average citizen would be willing to tolerate.