Blue State ‘clientelism’

Blue States are the epicenter of American capital investment and economic growth in the new economy. Republicans are supposed to the be the party of “big business” and commerce. Yet almost all new venture capital investment happens in Democratic-controlled regions. Only one city in a Red State, Austin, makes an appearance as a target of meaningful investment. And it is the most solidly Democratic stronghold in the South.

The unemployment rates in super-blue cities like Boston, Seattle, and San Francisco are lower than in Dallas or Houston and almost half the rate in Atlanta. Since the recession, California has absolutely swamped every other state in terms of overall job creation. The Bay Area is now the country’s undisputed wealth engine. Florida, Texas, and Arizona may be attractive places for the wealthy to retreat with the money they’ve earned, but if you want to get rich in our era you need to go to a blue city like Boston, New York, Seattle, or San Francisco.

So why are Blue States losing population in relative terms? Why does population growth in booming economies like San Francisco and New York lag behind poorer cities like Atlanta, Miami and Houston despite their economic vitality?

One explanation has to do with the fundamentally unequal shape of the knowledge economy. The rewards of success in Seattle or San Francisco are enormous, but it costs a lot just to get a seat at the table. And the industries generating this wealth are not like industrial age businesses. They need a few smart people with expensive, advanced educations, not hundreds of thousands of men wielding shovels or picks. That is a subject for another day.

What also burdens these places, especially the older Blue State cities of the North and East, is a heritage of ‘clientelism.’ To call it corruption is too simple an explanation.America’s big blue cities have inherited a culture in which incumbent industries and capital owners leverage a dense network of preferential regulation as a barrier to new competition.

This heritage may help explain why San Francisco is starting to displace New York as the global hub of capitalism despite its weaker access to the finance industry. It may also explain these blue cities on the West Coast are generally outperforming their peers in the Northeast. San Francisco is a relatively new city, with younger institutions that have less connection to 19th century clientelism.

Here’s a great explanation of clientelism, as defined by Princeton professor Francis Fukuyama, and digested at the fogbanking blog:

In this case we need to step back to “why corruption is bad”: it distorts economic outcomes in a way that we generally agree is not helpful, and it damages legitimacy of the government.

Fukuyama identifies two activities generally confused with corruption but are “not identical” to it: rent-seeking and “clientelism” (or “patronage”).

Rent Seeking: a rent is “the difference between the cost of keeping a good/service in production and its price.” Rents are driven by scarcity. Land in Manhattan is high in demand and low in supply, so rents there are high. Taxi licenses in New York are artificially low and thus pretty expensive, too. [All regulatory functions the government performs create artificial scarcities of some kind, so Fukuyama is careful not to indict all rents on principle or anything like that.]

Clientelism: Patronage is the reciprocal relationship of favors between a patron and client. Clientelism, to Fukuyama, is large-scale patronage, often involving a hierarchy of intermediaries. While usually considered a deviation from “best democratic practice”, Fukuyama considers clientelism to be at least a somewhat accountable (and, considering the natural pattern of human sociability, an incredibly common) situation. The setbacks to clientelism: a lower quality of government through nepotism instead of a more meritocratic bureaucratic model; strengthening the existing selectorate and dampens broader democratic accountability. Fukuyama suggests that poor citizens are cheaper to ‘buy’ than rich citizens, and therefore as countries become wealthier, the cost for clientelism spikes.

“The patronage-dispensing Big Man and his followers has never been fully displaced as a form of political organization up through the present.”

This blog seldom ventures into issues affecting the Democratic Party. Your fair author has little interest in matters over there. However, we are about to experience a generation of Democratic ascendance nationally and across most of the country. The single most vital issue that Democrats can address, the one that most defines the boundary between Clinton and Sanders Democrats, is the party’s approach to clientelism.

If the Republicans are at least by origin, The Party of Lincoln, then Democrats are the Party of Clientelism. There are benefits to this structure, as demonstrated by the ability of a competent politician like Hillary Clinton to resist The Politics of Crazy and defeat a political gadlfy like Sanders. There are also costs, like the way a patronage engine has successfully stunted the kind of political policies that a solid majority of Democratic voters wish to see.

Just dropping a thought on a quiet weekend, where perhaps it will send out tendrils.

Chris Ladd is a Texan living in the Chicago area. He has been involved in grassroots Republican politics for most of his life. He was a Republican precinct committeeman in suburban Chicago until he resigned from the party and his position after the 2016 Republican Convention. He can be reached at gopliferchicago at gmail dot com.

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100 comments on “Blue State ‘clientelism’
  1. 1mime says:

    Big business is speaking out against xenophobia, bigotry and stupidity. They are pushing back against red states that are passing discriminatory legislation and policies. In state after state, business is taking stands against divisive governance. Here’s a great recap of business activity to counter religious liberty hypocrisy. Business appears ready and willing to lend a hand in standing up against the politics of crazy!

    http://www.politico.com/story/2016/03/republican-governors-north-carolina-georgia-221351

  2. Anse says:

    I’m just not seeing how this “clientelism” is not apparent in any state/city that has a tradition of single-party governance. You put a political party in power long enough, the relationships between private and public sector will be forged to such a degree that the two will develop ways to align their interests.

  3. Pseudoperson Randomian says:

    Oh, yay, look! People don’t really seem to like voter suppression hearing in Arizona.

    This was after about 4-5 hours of testimonies relating to voter affiliation being changed without reason, long lines, too few polling stations, etc. at hearing to hear complaints about issues with the primary elections.

    Interesting side note here. Apparently voting on a bill that would have removed a lot of campaign finance restrictions (for example, one candidate propping up another candidate by sharing campaign money) was scheduled for later in the afternoon, and was then postponed to tomorrow for some strange reason after the uproar….

  4. 1mime says:

    This is OT but certainly in the news. I refer to the FBI/Apple stand-off and today’s announcement by the FBI that they had figured out (with anonymous help) how to break into the security code of the Apple phone and retrieve the data they need. It’s ironic that Apple protested so strongly about the government’s intrusion into their security protocol yet evidently also declined to assist the government by privately opening the phone in question and sharing the information with the FBI. Now that government has figured out a back door into the Apple phone, is Apple more or less secure than they would have been had they quietly cooperated with the FBI? Not being a “techie”, I surely don’t know, but where national security is concerned, it would seem that agreement could have been reached in a less flamboyant manner.

    • Pseudoperson Randomian says:

      I’m not an information security expert, but here’s how I understand it

      First, a bit of background. Just about every bit of tech has vulnerabilities that can be exploited if discovered. And that’s not due to gross negligence or anything. It’s just an incredibly complex process with many points of failure. The trick is to minimize vulnerabilities before they get into public devices, and then discover and fix those that do get through before a bad actor (a “black hat”) does.

      The first half can be done with code reviews, security audits, locking down the platform (for example, ChromeOS is more locked down than iOS which is more locked down than Android which is more locked down than Windows(maybe not 10…)) or other techniques an expert will probably do better explaining.

      The second half is the reason why some of the larger tech companies give prizes to people who manage to break into their tech (For example, if you can compromise a chromebook, Google will pay you $100000 for reporting it to them). There are even competitions for this. The point is, the good guys with the hacking skills will figure out vulnerabilities, and report them to the companies who then patch them ASAP before the black hats can take advantage of them.

      A backdoor is an *intentional* vulnerability. That’s what sets it apart from a regular vulnerability. You deliberately code in a vulnerability somewhere that either you or some approved party can then utilize to get into a secure system. The problem with backdoors is that they can be discovered and exploited by a bad actor. It’s another attack vector.

      What originally happened with the FBI vs Apple was that the FBI wanted to code in a new backdoor into the system. i.e. deliberately introduce a vulnerability into their system so that the FBI could access their system. And the FBI went to court to do this citing an Act from the 18th century. This would have inevitably set a precedent and opened up this option for other law enforcement agencies. The problem is that, due to the way software works, once you create a backdoor like that, and it gets into the wild, every single iPhone would be left vulnerable – and not just to the FBI. Like I mentioned earlier, these backdoors are an attack vector. Once someone figures out how to take advantage of it (and this usually happens), everyone from random script kiddies to hostile governments will be able to break into every single iPhone.

      Now, you might ask, couldn’t Apple have created a backdoor just for that one specific iPhone? The answer is yes, they could have created that backdoor on Apple premises, guarded it with the same zeal that they protect their source code, pulled the data that the FBI wanted, and then wiped all traces of the backdoor clean from that singular iPhone. I suppose it’s possible, plausible even, but I can’t say for sure. Someone better versed in the matter should answer that. In any case though, the FBI case would have set a precedent – and the more often that it’s employed the more likely that the backdoor would have leaked out. I also have to mention here that there are a couple of hundred phones waiting to be broken by various other law enforcement agencies.

      Let me leave this Michael Hayden (CIA and NSA) interview for an interesting viewpoint.

      Ok, and finally, on to the latest development. The FBI says they found some other third party that can break into the phone for them. I’m going to assume this third party will be breaking into the phone via some as yet undiscovered vulnerability. All this means is that there is an exploit in that operating system that’s not yet known to Apple. Cooperating with the FBI wouldn’t have lead to Apple discovering this vulnerability. All cooperating with the FBI would have meant is that it would have added a backdoor (a NEW vulnerability) into the system. Apple wouldn’t have even known that a vulnerability existed if the FBI hadn’t decided to go with a third party. And that would also explain why Apple requested the FBI to inform them exactly how the break in to the phone would happen, presumably so that Apple can patch it.

      Also, interesting factoid. Apparently the FBI testified under oath that Apple was the only possible party that can break into the phone. Now that this is clearly shown to be a lie, is that perjury?

      • johngalt says:

        Good post. Apple did not want to demonstrate that all their security features were just one iOS update away from being useless and give the impression they were hacking their own phones. What is possibly on this phone that the FBI couldn’t have gotten from subpoenaed phone records?

      • 1mime says:

        Are all data entries – texts, calls, cloud files, websites visited….are all of these available through simple phone records?

      • 1mime says:

        Wow, great primer on cell phone security! I still don’t see why the government, aka “FBI” and Apple couldn’t have quietly agreed to an information withdrawal process that would have provided the data the FBI needed and still have provided protection that Apple required to protect its investment. That the whole issue became so public made this cooperation impossible as things progressed.

        As to your later question: did the FBI lie? The articles have all stipulated that an “individual came forward” well after the tete a tete between the FBI and Apple ensued. If they did, then the FBI could have honestly not known at the point they testified that a person was out there who had the capability to break into the Apple security system. That’s my take. Proving they had such a person in the wings would be a tough thing to prove, don’t you think? We are talking about the FBI here…..

        Thanks for the lesson in phone technology. I am still unable to utilize all of the features of my I-phone 4 (no “s”), so all of your info was new to me (-;

      • Creigh says:

        Good post, PsR. I don’t think that the FBI would have accepted a one-time break, they wanted to set a precedent. I also don’t think the FBI will divulge the vulnerability to Apple, if they even got that info from the third party. Apple will probably try to find out who the third party is and pay them directly.

      • 1mime says:

        I’m sure I am not sensitive enough to Apple’s proprietary concerns, but when national security is at stake, what is the proper balance between business privacy and government’s need to know? The government did go through a legal process to advance their request, but what bothered me is that issues of national security should be able to be quietly worked out. That doesn’t appear to be the case here. Regardless, both got what they wanted in the end though I wonder if Apple has greater vulnerability as a result of this “unknown” tech wizard. Why would/should the government divulge the individual’s name to Apple when Apple wasn’t cooperative? One thing is certain, the era of technology is going to drive a whole new field of law….much like patents and copyrights did. It’s gonna be interesting.

      • Pseudoperson Randomian says:

        @1mime

        Few quick points.

        1. Apple had already turned over all the data they had on the cloud relating to the terrorist before this case even started. I can’t be sure what was only on the phone locally, because we don’t know what the sync settings were.

        2. Exploits and vulnerabilities are not uncommon and there is even an active market for them as far I know. I even remember reading an article talking about corps dealing in these a while ago. I refuse to believe that the FBI really had no idea that they might be able to able to break in without Apple. That would either suggest a colossal failure in understanding current technology, in which case, there needs to be an immediate and massive shakeup because infosec is essential to security in the modern world, or it was a deliberate ploy so that they could use that as an argument in the court case. I am, however, willing to believe that the FBI figured that it was far easier to get Apple to do it, though that still doesn’t make complete sense because Apple estimated it’d take 4 weeks for a team of engineers to code in that backdoor, and an already known exploit would be usable immediately – as it was in this case.

        3. Yes they may have been able to resolve this quietly behind the scenes for just this one phone. But I really don’t know if that was possible, and I don’t know what happened there. Something someone with more knowledge about this than me might be able to comment on.

        Speculative reasons I can think of, for this
        A. Apple didn’t want to give in to this request and suggest to the FBI that they can pop in whenever they wanted. Argument against this is that if that was the issue, then they might have preferred to wait till a more low profile case came along rather than a heavily publicized terrorist.
        B. The FBI wanted to set a precedent so that they could do this whenever they wanted and they used this the San Bernardino shooter case because it was high profile and they could have the public on their side. (Not to mention the hundreds of other phones that other law enforcement agencies wanted to break).
        C. The FBI wanted to have the backdoor installed and worked with in their turf, rather than, say, at Apple HQ. Apple might not have agreed to this because it would have massively increased the chances of the backdoor getting leaked
        Again, the above three reasons are speculative

      • 1mime says:

        I’ll go with your “if the FBI lacked the technological capability they need a ‘shake up'” suggestion …. very thoughtful analysis, Pseudo. I hope the courts who eventually will have to decide on complex technological issues like this will have the ability to do so….When Ma Bell was broken up many years ago, there were many who felt that the court didn’t know what it was doing at the time. Now, with so many huge companies merging, one wonders if there is still an anti-trust division of the Justice Dept.

        Thanks for your ideas.

      • Pseudoperson Randomian says:

        @1mime
        Security in tech is precarious as it is. It’s a constant battle trying to balance security and flexibility. All the tech companies are constantly fixing and refixing code to harden it against attackers, and then they add a new feature and they have to do the fixing and refixing all over again. And even with all that, some exploits get out into the wild.

        The problem with tech is that every vulnerability affects a ginormous number of devices. A few million is a small number. Every vulnerability is virtually a master key.

        I disagree that it’s a greater vulnerability for Apple because of this third party that the FBI is using. That vulnerability already exists regardless of this case and they are not uncommon wither. They are constantly being patched over. This will get patched over the moment they figure out what it is – and vulnerabilities very rarely remain undiscovered in the wild for long.

      • Pseudoperson Randomian says:

        Regarding privacy:

        The concept of privacy is a rapidly changing concept. What do you do when a huge number of people are actively, and voluntarily publishing personal and sometimes intimate details, photos and videos of themselves and their friends on to the internet?

        I draw a careful line around what I have on the internet and what I don’t, but I’m beginning to realize this is an uncommon behavior – and it becomes less common the newer the generation gets.

        All the newer generations are being brought up in the age of social media and some very fundamental concepts surrounding privacy, intimacy, voyeurism and so on will be challenged and will change. It’ll be a generational clash too. I don’t know which direction they’ll go. All I do know is that I’ll have to shed old ideas and adapt quickly if things do change…

      • duncancairncross says:

        It’s a few years old now but David Brin’s – Transparent Society – is required reading if you are interested in privacy and the future

        http://www.amazon.com/The-Transparent-Society-Technology-Between-ebook/dp/B004P5O37W?ie=UTF8&keywords=transparent%20society&qid=1459225387&ref_=sr_1_1_twi_kin_2&s=books&sr=1-1

      • Titanium Dragon says:

        Perjury is about deliberately lying, not about making mistakes. People make mistakes in testimony all the time. If you said you saw Bob at the store, but it was actually just someone who looked like him, then you didn’t commit perjury, you screwed up. If you said Bob was at the store, and you know he wasn’t, that’s perjury.

      • Titanium Dragon says:

        1mime: There is no tension at all. Strong unbreakable cryptography is a matter of national security.

        First off, any vulnerability leaves millions of phones at risk, many of which are likely to be misused by people working for the government to store sensitive national security data. There are a million Hillaries working for the government who fail to take proper precautions with data, and if any of their phones are vulnerable, that data is vulnerable. It is inevitable that this happens.

        Secondly, any vulnerability leaves millions of phones at risk, many of which are likely to be used by private industry. This is a huge criminal problem and a huge espionage risk, both for private and industrial espionage, as well as fraud and other things. Crime is a matter of public security, and we don’t want that. Likewise, espionage, both public and private, is a matter of public security, and we don’t want that either.

        Thirdly, any backdoor means every other country on the planet should ban iPhones, because the FBI has a backdoor into every phone in that country, and that’s bad for THEM. This is a huge economic threat to the US.

        Fourthly, any backdoor means that every other country is entitled to install backdoors into everything, which is very undesirable for us for the exact same reasons.

        The FBI was clearly in the wrong here. Unbreakable cryptography is in the best interest of the nation’s security, and trying to get companies to generate backdoors for them to use is against the national interest.

        The FBI has the right to try and get into a house with a warrant, but they don’t have the right to make copies of everyone’s housekeys.

      • 1mime says:

        Excellent response, Titanium! It’s a thorny delimma but I think you and others are correct. I find myself being willing to give up more privacy for more security these days….

  5. 1mime says:

    Had to share this totally non-partisan, intelligent justification for continued Republican obstruction to the President’s constitutional authority to have his nominations heard by the House. (of course I am being verrrrry cynical, lest anyone have any doubt)

    http://www.nytimes.com/2016/03/28/opinion/let-voters-decide-the-courts-future.html?emc=edit_ty_20160328&nl=opinion&nlid=41048410&_r=0

    This is how Republicans govern. Change it or live with it. Vote.

  6. Good analysis. What I think is missing is the fact that Democrats and blue staters in general prize education, so you have major feeder universities in blue cities. It isn’t an accident that Harvard, MIT, NYU, Columbia, etc. etc. are located in blue cities. They feed into the economy with research grants and by producing a very educated populace.

    Of course there are many educated Republicans, but there is also a virulent anti-elite / education strain which is baffling to say the least. I still believe you can get ahead in this country, but training is absolutely essential in the 21st century.

    • tuttabellamia says:

      What about the excellent universities in Southern states — Rice, Duke, Vanderbilt, Emory?

      • Titanium Dragon says:

        Vanderbilt is one of the best universities in the country. I had friends who went to both Vanderbilt and Harvard and they actually thought Vanderbilt was better.

        Of course, I went to Vanderbilt, so I may be slightly biased. :3

        Vanderbilt is an amazing university. It is also in Nashville. The three wealthiest counties in Tennessee are Williamson County, Wilson County, and Davidson County. These are, respectively, Nashville surburbs, Nashville suburbs, and Nashville itself.

        And if you look at the 2012 election, you will notice there is this suspicious blue dot in the middle of Tennessee. That dot is… Davidson County, where 58% of the population voted for Barack Obama.

        Vanderbilt itself is quite liberal. People there were very accepting of gays, and felt sorry for the gay Republican on campus with a very homophobic family who hated himself. He was actually my hallmate freshman year, and came out to me in the fall.

        He was a decent enough dude personally, if frustratingly conservative and self-denying.

        He really got the shaft.

        There was a big protest when Bush came across the street to speak, and the student body was liberal.

        But not the crazy stupid far-left authoritarians that you associate with those college idiots. They were just the ordinary, sensible kind of liberal.

        Not that there weren’t Republicans; there were. But they were, you know, liberal Republicans who were for Republican economic policies but didn’t mind gay people at all. I had plenty of Republican friends, and plenty of Democratic ones, but pretty much everyone was pretty open-minded and nice.

        Anyway, yeah. I can’t really speak for the others, but Vanderbilt honestly felt like it could have been in Oregon and wouldn’t have been at all out of place, other than the fact that there were some black people there.

        There were like, five hospitals around campus. I’m not even exaggerating; it was kind of nuts. It was an obvious center of lots of richness and economic activity, as is Nashville proper.

        So yeah, there are excellent universities in the South – but the best of them, Vanderbilt, basically exists in a place where it makes its surroundings not the South. Heck, none of my friends had southern accents, despite many of them being from Tennessee.

        I wouldn’t be surprised if the other universities in the South were much the same way – creating islands in the sea of red.

        Doing some quick research:

        Duke is located in Durham County. It and its suburbs are all in the top 8 wealthiest counties in the state. In 2008, 76% of people in Durham voted for Barack Obama.

        Rice is in Houston, Texas. Harris County is the 38th wealthiest county in Texas, which sounds awful until you realize there are like 250 of them, so it is actually in the top 15% or so. Its two suburb counties, Fort Bend and Montgomery County, are 8th and 9th in per capita income in the state respectively. Obama won Harris county in 2012, and almost won Fort Bend as well.

        Emory is in Druid Hills, Georgia. It is located in DeKalb county, which has the 9th highest per-capita income out of 159 Georgian counties. Barack Obama won 77% of the vote there in 2012. The CDC has a major facility there.

        So in all four cases, we’re looking at a university which generates higher income around it (or possibly, was originally built in a higher income location – is it cause or effect?) and generates an area which votes for the Democrats – in some cases, intensely.

    • 1mime says:

      Let’s not overlook that Democratic mayors and governors run their cities well. I think there is a myth out there that assumes only conservatives are capable at governance because of their focus on business. History records successes and failures from both parties in this regard; however, the vast majority of major cities in the U.S. are governed by Democrats. How are they doing? A pretty good job for the most part. Let’s give them credit as deserved.

      • Titanium Dragon says:

        I don’t think either party has a superpower for local governance. Really, governance reflects the population. Democratic cities full of intelligent voters end up with good governments; democratic cities full of idiotic voters end up with idiotic governments.

        I mean, New York City elects Republican mayors who do a fine job on the whole.

        Really, once you get down to the level of local politics, a lot of very different things hold sway. I mean, look at Oregon politics; Oregon Republicans are often very strange compared to other Republicans. We had a Republican senator for ages here. We have some decent Republicans in our house and senate. The main problem here is mostly the usual problem with politicians – most politicians are basically experts on like, one subject, and don’t really understand things unless you explain them to them. They basically require the bureaucracy to help them make good decisions because they have no clue.

      • duncancairncross says:

        Hi Dragon
        I find some of this puzzling
        Here (NZ) and in the UK local government is not by party
        Most city and district councillors don’t seem to have a party identity
        It’s only the bigger cities and the national MP’s that are identified by party

        At all of the lower levels we vote for the person and his/policies

      • 1mime says:

        The inability of Republicans to think broadly is because the party requires such lock-step thinking. No deviance from the GOPe script, no thinking for oneself. It’s really rather pathetic and it contributes poorly to informed leadership.

    • johngalt says:

      It is interesting that the great universities in the Northeast you mention are all private and expensive. Surely they do greatly benefit their regional economies (I spent a bit of time at MIT and they were found of claiming that MIT alums had founded 4,000 companies). When you look at great public universities, the picture changes quite a bit, because none of them are in the Northeast. They’re in California, Big 10 schools in the midwest, and a number of universities in the South (Virginia, North Carolina, Texas, Georgia Tech. The best public school in the northeast is Penn St. at #47, tied with Florida.

  7. Martin says:

    As you layer artificial intelligence on top of this you will find that pressure on red states grows disproportionally. And so does social unrest. Great analysis as usual Chris.

    When you listen to people who support both Trump or Bernie, it strikes me how similar their rational sound. The problem is the same, but the conclusions we reach are fundamentally different.

    In this age of exponential technological progress, the only hope for the less educated, the elderly, and all other groups that are not part of the knowledge economy is a vastly improved social safety net. Without it revolution and social unrest is the inevitable tunnel we have to go through. Both demagogues and ideologues will kill us. They will remove our opportunity to prosper and if let loose will kill a generation.

    In my view there is no hope to fix the GOP. Like in every other (Western) country there is a group of about 20% of the population that is extreme beyond repair. In the U.S, they now dominate one of only two parties. If power does not move to the remaining more rational people, then we are in for a rude awakening. These more rational people congregate around the Democrats. It is the only place to go. Accept it; don’t sweat it.

    • tuttabellamia says:

      Question — I was thinking that one solution for the less educated would be more education, but even in that case, would there be enough jobs to go around for all these people, no matter how educated they are or could be?

      • 1mime says:

        Tutta, there are jobs that require skills vs a college degree, and they are valuable. Technology will likely replace many of these in the future, but our society has time to help people transition – if we care to. This weekend’s analysis of which job sectors are strong in the Houston area showed service jobs are leading the pack with health care positions in second place. Many of these positions are skills oriented, some acquired through experience, some through specific vocational training. Why not build on that demand and retrain people who are looking for work?
        Big business and government have been derelict in their recognition and acceptance of their respective responsibility to help people who are caught in the jobs purgatory that occurs through obsolescence, new development, and global competition. That is why so many working class people are angry. They want to work but they can’t find a job they can do that will allow them to be self-sufficient. As Sara explained, this lack of interest and support for small business has helped kill our middle class, and changing times have killed opportunities for the working class. Instead of criticizing or ignoring this growing class of people, this would be a perfect time for another WPA to assist those Americans who need immediate income and are able to learn a new skill. No welfare, workfare.

      • duncancairncross says:

        Hi Mime

        You guys are talking as if there are a lack of jobs for “ordinary people” – there IS a lack of such “jobs”
        BUT it is NOT because there is a lack of “things that need doing”

        There are oodles of things that need to be done from replacing and updating infrastructure to looking after old people to just making things
        Have a look at a “Victorian” building to see the sort of extra things that could be done that would enrich our environment

        And NO robots can’t do them – not for a long while – have a look at the last DARPA challenge – a drunk could have done the whole thing in 1/3rd the time of the best multi million dollar robot

        But there are no jobs – because the 0.01% has glommed onto the money and is not spending it

        The big toe has grown a blood blister and is hogging most of the bodies blood supply

      • 1mime says:

        “IF” the working class mattered, jobs would be found for them. Yes, yes, jobs exist which do not require a college degree, and they will likely exist for a long time. America cannot ignore the march towards technological dominance in the jobs arena and we should be preparing our people so that they can be useful and productive both right now and going forward. Yet, our Congress can’t even pass a budget because Republicans refuse to use any Democratic votes to get the job done! Forget concensus or compromise. Heck, forget Democrats exist. It seems that the only time American voters get to choose is when they elect Republicans. So much for the nonsense of delaying the SCOTUS nomination until the voters have spoken! Looks mighty selective from where I stand.

        So, all those “jobs” that are out there? They are not coming via government unless appropriations underwrites them, and right now the GOP can’t get a budget passed! What jobs are available are not going to working class Americans and the sooner people recognize this, the sooner Republicans will be called to task. That big red blister needs to be lanced soon or the patient dies.

      • Creigh says:

        The answer is no, not under our current economic system. And that is the economic c question of our time – what to do with all the people made redundant by automation, productivity increases, etc.

      • moslerfan says:

        Again, it depends on whether your definition of “job” is “”an activity that pays a wage or salary” or “an activity that is socially or individually productive or useful.”

      • Titanium Dragon says:

        I disagree. There aren’t a lack of jobs for normal people. Technology is not ENDING THE WORLD.

        A big part of the problem is resistance to moving. There are jobs. There are people without jobs. Often, these two things aren’t in the same places. If I need a worker in, say, Corvallis, Oregon, someone from Detroit, Michigan isn’t going to be able to move out here and take it, and there’s no way for me to put the job in Detroit (as if I would want to anyway).

        It is also the case that we have a ton of job openings for jobs that don’t have people for them. There are oodles of PHD positions which have no one to fill them.

        High-quality people can also create their own businesses, but a lot of start-ups require a lot of high-end people rather than ordinary workers.

        Of course, there are exceptions – when I worked for Energ2, we were a manufacturing company which made the magic black dust that makes ultracapacitors work, among other things.

        We could run our factory with 5 people at a time, though we’d really prefer eight – and we could have automated a few of those positions but the capital outlay was too high.

        We had as many scientists and engineers in our production factory than we had ordinary workers.

        And that’s ignoring our big R&D team, which had like, 30 or 40 people, who actually developed the product to begin with.

      • 1mime says:

        The structure you describe (weighted on the research side/low on production side) is exactly what Lifer has described as the future work environment. Education really needs to make some changes to prepare….wonder when that will begin…

  8. Great post. Thanks. One point you might want to add is that the Bay Area is also the source of a lot of the ‘de-renting’ business processes (AirBnB, Uber, etc.) the could unwind the clientism that stifles capitalism in the ‘union’ cities.

    I remember one of our clients (a large investment house) expanded to a new floor in their NY building and needed to run some CAT-5 cable up to it (this was a while ago). They sent in somebody in the middle of the night to drill a hole and run the cable because the union would have taken weeks and cost thousands of dollars.

    • lomamonster says:

      All the “ism’s” wont matter once the VR craze takes hold and the nation is gripped by massive cases of brain cancer caused by idiots staring into cell phones closely bound with goggles to their heads. We will methodically kill ourselves off, as usual…

      • tuttabellamia says:

        Has the risk of brain cancer been proven, or are you just being sarcastic? My question is sincere.

      • lomamonster says:

        So far, there have been no definitive links to brain cancer with cell phones, but the studies are still incomplete on the whole and don’t take into consideration a VR craze catching on and binge watching by vast amounts of people.
        http://www.cancer.org/cancer/cancercauses/othercarcinogens/athome/cellular-phones

      • duncancairncross says:

        “So far, there have been no definitive links to brain cancer with cell phones,”

        Also no known links to the height of the victim or to the number of dogs they have ever owned

        Seriously in order to spend money on an investigation you should have either some actual cases or a “theory”
        And in the case of cell phones there is neither!

        Look up the differences between “ionizing” and “non-ionizing” radiation

      • lomamonster says:

        At least LG thought better of it’s VR implementation in the G5, opting to remote the phone from the headset viewer with a USB cord so you can lay the phone down while viewing. I like the idea of playing it safe and applaud that approach.

      • lomamonster says:

        Plus, just take your cell phone with just one hand and hold it up for five minutes at face height and imagine what the effects of that weight would be like watching a full length movie. I don’t think that I have the nose for it!

      • tuttabellamia says:

        I am personally interested in any links between our digital habits and VR and DEMENTIA, how the constant distractions and interruptions of digital life and being immersed in another reality could seriously mess with our brains. I would.think there is a limit to how much our brains can handle. Stimulation is good for the brain but constant digital use seems to have more of a numbing effect.

        I have no concrete proof of this, only personal experience and observation, but I agree with Loma that sometimes it’s good to err on the side of caution.

      • lomamonster says:

        And we do have a multitude of cases of burnout to reference like airport controllers and drone pilots for the military…

      • 1mime says:

        I would think that the stresses of the job that drone and airport traffic controllers perform are far more significant than exposure to the technological gear they utilize in the performance of their duties. Psychological “burn out” versus brain burn out.

      • tuttabellamia says:

        As for forgetfulness, I’ve spoken to several ladies who’ve been in abusive relationships who talk of having suffered from brain fog and stuttering during that time in their lives.

  9. Griffin says:

    On the Politics of Crazy, this was written in the mid 1950’s.

    “…in a populistic culture like ours, which seems to lack a responsible elite with political and moral autonomy, and in which it is possible to exploit the wildest currents of public sentiment for private purposes, it is at least conceivable that a highly organized, vocal, active and well-financed minority could create a political climate in which the rational pursuit of our well-being and safety would become impossible.”

    I know I’m repeating myself but Richard Hofstaeder really was a genius. I recommend everyone check out his most famous pieces on radical right politics to help understand the rise of the Moral Majority, Gingrich, and finally Trump. Almost all of it still rings true today.

    https://theamericanscholar.org/the-pseudo-conservative-revolt/#.VvdsrvkrLnB

    http://harpers.org/archive/1964/11/the-paranoid-style-in-american-politics/

    • tuttabellamia says:

      Griffin, thanks for those links. I am especially enjoying the Harpers article, which I am still in the process of reading. It doesn’t just talk about Whites’ move to the right, but also about the internal struggles and conflicts for identity and status within immigrant communities. I like the concept of the shift from a “poor man’s paranoia” against Blacks and recent immigrants towards a less offensive (and dare I say more politically correct) paranoia against the elite. I was not acquainted with the term “status politics” until now. This would explain not just the move to status politics when economic life is good, but how some groups might actually vote against their own best economic interests, all in the name of status politics.

      Harpers is actually my favorite magazine, probably because it’s not so overtly political in tone, but it still gets the message across. There is something about this article from 1964 that struck a chord with me — something about the tone that I liked. As you point out, it discussed issues that are still relevant today, but I don’t detect the snark and superiority I see in articles written today. It has an earnest tone about it. I need to delve into Harpers archives more often.

      • tuttabellamia says:

        The Harpers article is objective and historical and doesn’t focus only on Whites’ move toward conservatism (or “pseudo conservatism”). It also examines the tendency of immigrants to move toward conservatism over time in order to preserve their own sense of status within American society.

        The author’s term “pseudo conservative” is also interesting. He maintains that American society, which is based on the policies of FDR and the New Deal, is so set in its liberal ways that this way of living is actually conservative, and anyone who calls himself conservative, who wants to overthrow the current way of life in the name of going back to how things were before is not truly a conservative but a pseudo conservative.

      • Griffin says:

        That is very true Tutt. You could argue that Obama is much more “conservative” than his opponents because for the most part he’s just trying to preserve our current model of government with only minimal reforms. The Republicans are actual radicals who want to dismantle much of the government and have utter disgust for modern American society. You can hear it in the voices of the AM radio hosts and Republican pundits who rail against the values of Blue States (where most of the US population actually lives), the universities, the liberal media, the liberal churches that have “sold out” to leftists (something even George Wallace railed against), the “decadence” promoted by television, etc.. There are very few US institutions that “conservatives” don’t hate and don’t want to fundamentally change.

      • 1mime says:

        “Few institutions that Republicans don’t want to change…” And, change from what to what, I ask? Bringing everything down to the state level with little purpose other than to reduce federal government offers no assurance of “better” governance. Lifer has identified areas of institutional change that could be achieved through decentralization, consolidation, elimination, or change of function. Why isn’t this type of analysis not happening among those elected to run our country for “we the people”? Absent leadership or cooperative, thoughtful discussion and analysis within Congress, we are lucky the lights are still on up in D.C. There are real security threats and basic operational functions that are necessary to everyday life. Yet, our Congressional leadership is unwilling to put the needs of our country before their party objectives. Our dangerous, interconnected world is changing at warp speed. Maybe it is not a bad thing that Institutional change is so tedious, as changing for the sake of change can be more destructive than doing the wrong thing.

  10. duncancairncross says:

    From my far distant point of view

    The “Blue” cities – it’s less a case of clientelism than of history – and some really bad political decisions

    Cities like Detroit were based on a core of heavy industry – when that core “failed” they ended up with a structure that was unsustainable

    Cities like San Francisco were not built around an armature that failed and disappeared

    That alone would be enough to explain the differences BUT there is more,
    After the core failure cities like Detroit were further savaged by the outer parts of the cities skipping out on their obligations

    The result is that the Detroit’s were in a no win situation with not enough money coming in to keep them going

    The San Francisco’s have not had that problem (yet)

    • Titanium Dragon says:

      Well, there’s some other things as well.

      Detroit has a huge black population. San Francisco does not (they all live in Oakland). They have tons of Asians, with blacks and Hispanics being more recent comers. As a result of all of these factors, the city never experienced white flight. Also, the fact that you can’t actually build around the city omnidirectionally due to the bay and the ocean meant that you either had a stupid long commute or you were stuck living there.

      Now you get both, but I digress.

      Also, San Francisco has a very diversified economy. Detroit’s economy was based entirely around manufacturing, and nothing else – and to a frightening degree, a few specific kinds of manufacturing (especially automobiles).

      Once those jobs moved/went away/got automated, the city had nothing, and because the city was built up around those things, what was the point of building there?

      San Francisco and the Bay Area have a huge variety of things they do, so even if some particular industry fails, they’ve got tons of backups.

      The same is true of other big successful cities like New York City, Portland, Seattle, ect.

      It may not be coincidental that these are all major ocean port cities as well, whereas Detroit is on the Great Lakes, which means it is a port, but not to the same huge hub extent that the big coastal cities are.

      On the other hand, Colorado has some very well-off cities which are more or less randomly in the middle of a random state in the middle of the country. It is oddly wealthy compared to the surrounding states, and I have no clue why.

      It also is blue in a sea of rural red states. Or green, now that they’ve legalized cannabis.

      • 1mime says:

        We have friends who chose to move their business and life to CO. They tell me that the educational attainment level per capita is extremely high and broadly spread throughout the state. (Of course, there is the enclave of Co Springs to explain, but ….) They love it there and all of their adult children except one have chosen to come there as well to make their living and raise their families. The state is struggling to stay blue, from what I’m told. Purple at best. Hopefully that will change but the state is in play.

  11. Nick Danger says:

    Is San Francisco a new city? It was one of the ten largest cities in the country from 1870 to 1900, comparable in size to Cincinnati.

    That suggests that there is another reason why it has a different attitude towards clientelism.

    https://en.wikipedia.org/wiki/Largest_cities_in_the_United_States_by_population_by_decade

    • goplifer says:

      San Francisco is a new city. Houston was founded in the 1830’s. It is also a new city.

      Boston and New York date from the 17th century. More to the point, both San Francisco and Houston developed just late enough and far enough from the East to be independent of almost all of the country’s early traditions.

      • 1mime says:

        There is an excellent documentary on the cultural conflicts that are emerging in San Francisco, Berkeley and surrounding areas. Money is driving change and the original inhabitants of these areas are not happy with some of the consequences.

        http://www.hbo.com/documentaries/san-francisco-2-0

      • 1mime says:

        San Francisco is a “new” city….by American standards, yes. However, if one goes back to the original owners of that stretch of western coast, the Spanish first sailed into SF harbor in 1769, followed by Russian trappers and furriers, and finally, Mexico, which claimed the area as part of its country….until the Mexican-American War 1848 when it officially became “American “.

        I say this in humor because America is so very proud of “its” cities and forgets those who have gone before. In comparison, NY and Boston were original settlements (except for those unfortunate Indian tribes who had to be routed) and they pre-dated the acquisition of SanFrancisco and California in the Treaty of Guadalupe Hidalgo by well over 140 years. New kid on the block, indeed.

      • Titanium Dragon says:

        1mime: An important thing to recognize is that while SF was a “big city” back then, the Bay Area’s population literally doubled between 1940 and 1950. In fact, it added a million people per decade from 1940 to 2000, with the exception of 1970 to 1980, when it added a “mere” 500,000 people (and it added another 500,000 between 2000 and 2010).

        The flood of people who came after World War II probably made a big difference to the place.

  12. vikinghou says:

    At the risk of appearing obtuse, isn’t the relationship between lobbyists and elected officials a form of clientelism? If so, there’s little difference between the parties.

    • Griffin says:

      Lobbyists actually seem to have surprisingly little influence over Republican politics. If House Republicans got everything they wanted it would wreck the economy in ways that even most lobbyists don’t want. For instance most lobbyists don’t want to pull out of the UN and rip up all our international trade agreements but that’s what the radical right Congressman want.

      Lobbyists, on the other hand, are hugely influential in the Democratic Party. They’re a big part of the reason why ObamaCare was so watered down and why Obama didn’t have much political capital left after he went against them to get healthcare reform through.

      • 1mime says:

        I disagree with you about breadth of lobbyist influence in Republican politics. Both parties have lobbyists, but lobbyists are much influential for Republicans, if you consider raw dollars and longevity. The ones that come to mind immediately for me are: NRA, ALEC, US Chamber of Commerce, The Heritage Foundation, the pharmaceutical industry, defense industry. OpenSecrets.org is a treasure trove of information on lobbying and fundraising across a broad spectrum if you’re interested in looking more deeply into this area.

        https://www.opensecrets.org/industries/

        Remember always, “He who has the gold, rules”, and the GOP has been in control for a long time, excepting Clinton’s first term and the first couple of years of O’s first term. Lobbyists pay attention to power centers. On the left, unions have been a huge force but their influence is waning as their numbers decline and their financial clout is reduced. The phenomenon of special interest organizations and individuals are becoming potent forces for shaping political and public policy….especially since C.U. opened the floodgates. Thank you Justice Scalia.

        Lobbyists in and of themselves serve an important function in informing members of Congress. Where they are harmful is where their influence usurps legislative independence.

    • vikinghou says:

      I would counter with the influence of the gun lobby and the fossil fuel industry on GOP lawmakers.

      • Griffin says:

        You can be a climate denier and have no love for the fossil fuel companies. Indeed most Republicans I know who are climate deniers don’t like “Big Oil”, it’s more pyschological than anything. Global warming being real means that A) we have to regulate the private market and B) those dirty hippies and liberals were kinda right and they were dead wrong. Considering the main, if not only, tenet of modern American conservatism (or what Hofstaeder would call pseudo-conservatism, read that piece I posted below it is amazingly prophetic) is anti-leftism admitting that the “leftists” were right about a major issue is too much for them to handle.

      • 1mime says:

        I think those of us who support the science behind global warming make a mistake to ignore the value of the fossil fuel industry. We need this industry to bridge our transition to alternative energy sources. When the starting point is you’re either “for” global warming and “against” fossil fuels is wrong and short-sighted. Millions upon millions of people are employed in this industry and the industry makes the wheels of many parts of our economy go round. Does it need to be more responsible? Emphatically, YES. Let’s be clear, though, the problem is with those decision makers who ignore science and either make bad policy or no policy to protect our environment.

  13. irapmup says:

    This may be considered a naive or ingenuous question, but why, after so many years of back and forth between our two major political parties, haven’t those involved in governing, which is supposed to serve us all, reached a workable solution as to what works and what doesn’t?

    No business would run smoothly let alone survive if sound decisions were not reached and adhered to after an initial period of trial and error.

    Is this, as it appears, a game? Am I missing something?

    • goplifer says:

      Actually, Fukuyama also argued that, for the most part, we have. One of the reasons that The Politics of Crazy has happened is that we’ve run out of interesting conflicts. We have more or less globally settled into a consensus around democratic capitalism as the only credible, legitimate system of government. Once you’ve done that, all that remains is boring administration.

      Here in the US, boring administration is too boring to keep people engaged. Almost all of our remaining political conflicts are manufactured to earn votes and ratings. Having settled on some form of democracy as the only route to political legitimacy, now we have to figure out how to keep people engaged through the boring stuff, and encourage them to develop the maturity not to be distracted by meaningless crap.

      Strange as it may sound, we may only be a generation from accomplishing that goal also. We’re actually doing pretty good when you compare the present to the past.

      • texan5142 says:

        When does the manufactured political conflicts turn into the Stanford prison experience?

      • texan5142 says:

        Or should I say at what point does it turn into the Stanford prison experience.

      • tuttabellamia says:

        This reminds me of my frequent complaints about the media’s and politicians’ penchant for trendy topics and catchphrases, the 5 or so topics (subject to change over time) that dominate and create our manufactured reality, topics that are easy to understand and perpetuate and keep us from having to deal with the truly important but boring stuff.

      • Griffin says:

        Richard Hofstaeder basically said the same thing 50 years ago.

        “In a country where physical needs have been, by the scale of the world’s living standards, on the whole well met, the luxury of questing after status has assumed an unusually prominent place in our civic consciousness. Political life is not simply an arena in which the conflicting interests of various social groups in concrete material gains are fought out; it is also an arena into which status aspirations and frustrations are, as the psychologists would say, projected. It is at this point that the issues of politics, or the pretended issues of politics, become interwoven with and dependent upon the personal problems of individuals.”

        https://theamericanscholar.org/the-pseudo-conservative-revolt/#.Vvb-cPkrLnA

      • irapmup says:

        if nothing else I am no longer naive and it appears, never ingenuous.

        it is a game and I am missing something; the interest in, playing.

      • Stephen says:

        @ Griffin,
        Plenty of people do not have their basic needs in our country meet. My churches food bank and others in my area are well used. Many people are still hungry. Many people still do not have adequate medical care. And bunches of these people are working more than 40 hr weeks, often multiple part time jobs. Many of the middle class are worried about falling into the same situation which is one reason that Trump and Sanders are so popular right now. Issues like this are not boring administration for many people. All modern societies economies are a mix of socialism and capitalism. Finding the right mix is the problem for each country. And democracy and authoritarianism exist in countries that lean towards one or the other type of economic system. China and Sweden are examples of this. While I lean towards capitalism I realize that is not in itself democracy or authoritarianism. Mixing the two is a dribble some on the far right and left are apt to do.

      • 1mime says:

        As many have pointed out, capitalism is positive unless it is unchecked. So is power.

  14. Stephen says:

    Just got through reading two articles in The Economist. “The problem with profits” and “Too much of a good thing”. It seems that competition in the United States has been stifled and therefor profits are up much more for a few well connected large firms, but only in the US. And the protective moats are so strong much fewer small businesses have been able to start. This has many ramifications of productivity, employment and inequality which the magazine gets into the weeds fairly deep. Although they enter through another door the writers pretty much have reached the same conclusion as you Lifer. Being a British magazine and conservative to boot is telling.

    http://www.economist.com/news/briefing/21695385-profits-are-too-high-america-needs-giant-dose-competition-too-much-good-thing

    http://www.economist.com/news/leaders/21695392-big-firms-united-states-have-never-had-it-so-good-time-more-competition-problem

    You may have to be a subscriber to read the articles.

    Adam Smith wrote that special interest and cheaters would if unregulated destroy capitalism. But regulation can also if done to protect the connected few destroy capitalism. And both of our political parties have been guilty of that. The price for economic freedom is also eternal vigilance paired with actively being politically engaged.

    • 1mime says:

      I agree with you, Stephen. That is why I do not support one party having total control of government – either party. There has to be a checks and balance, and if one party controls Congress, the White House, and SCOTUS, Katy bar the door!

      BTW, enjoyed reading the first article in The Economist but I was surprised that there was no mention of the practice of foreign mergers to reduce taxation. Maybe I missed it but that is becoming a tax gambit…Pfizer is the latest of many to leave America’s shores to reduce tax liability. Looking forward to the second article.

    • Sara Robinson says:

      This has also been one of the biggest things that happened to the middle class. I’m old enough to remember when local economies were populated with hundreds of self-employed people. Even in the small town I grew up in, every shop on Main Street, every professional’s office, and every contractor and service provider was owned by a small business person; and those little businesses very comfortably supported hundreds of families who could afford to own homes, buy new cars, send kids to college, and take vacations.

      Now, the professionals work on salary for large group practices. The independent shops closed when K-Mart came to town. The service providers are being rounded up into larger, low-wage businesses, too. I can drive down the highway in my hometown and tell you what used to be there 25 years ago — the dairy, the shoe store, the men’s shop that sold nice suits and rented tuxes, the cute women’s shops, the ice cream shop, the lumber yard, the florist, the deli, the electronics repair shop, the family-owned pharmacies — they’re all gone, driven out of business by big boxes who now do the same jobs (at an inferior scale, in most cases) using people who don’t make half the money.

      This is how the heart and soul got ripped out of the middle class. The GOP talks a great game about entrepreneurs and small businesses — but it’s done more enable the big businesses to steamroll them out of business, and make it impossible for people to start new ones. And one of the more dismal legacies of the Dem’s long marriage to labor is its narrow focus on wage labor, rather than supporting policies (like the ACA, finally) that enable people to go out on their own.

      • 1mime says:

        Rolling Stones writes that Republicans haven’t been especially interested in the working class Republican – not their problems, nor their loyalty to the establishment. That these principally white middle to lower working class people have the temerity to roil “their” convention process by supporting a candidate of Trump’s “ilk” has sorely tested the ability of the GOPe to maintain control of the process without alienating those who are important, and it isn’t the average working class Republican who is supporting Donald Trump. How “dare” these people screw up the best shot in decades for the GOP to secure all three branches of government!

        http://www.rollingstone.com/politics/news/the-republican-civil-war-has-begun-20160325?page=2

      • Titanium Dragon says:

        The thing is, a lot of this has to do with economy of scale. Small-scale businesses and cottage industry by and large are no longer sustainable. You can’t build 1 iPhone; you have to build a million of them to make any money at it at all. The fact that there are 7 billion people on the planet, and over a billion affluent ones between the US, Europe, the rest of the Anglosphere, the Asian Tigers, and the various other random rich places on the planet, means that economy of scale is not only viable, but necessary for supplying people’s needs.

        And the thing is, if you have huge economy of scale, you can make things which would otherwise be unaffordable or impossible to make – like computers and iPhones.

        The result of a lot of this is increased capital costs – if you need to build a huge expensive facility to make microchips (and you DO), then suddenly you need huge sums of money to get started at all.

        This is creating an upward spiral in the cost of creating any form of new business which is based on the creation of technological products – as they are so sophisticated now, they’re also really expensive to produce. Sure, we have automation… but automation has huge capital costs, and is necessary for making a lot of these products (you just can’t make a nano-scale microchip by hand).

        Likewise, because we’ve gotten so good at discovering drugs, the result has been that we’ve discovered almost all of the easy drugs, and now are going into the hard mode drugs, to the point where drug discovery costs are spiralling upwards. If it costs $500 million to make a new drug, who can just graduate from college and make some new drug? No one. They have to hire themselves out to people with a lot of capital. Sure, they might make a bunch of money by having some product and finding investors, but the result is still that it is hard to create a new company because they have to bet tens of millions of dollars.

        Even in the video game industry, we’ve seen teams go from a dozen people making games in the 1990s to hundreds or even thousands in the 2010s because video games are much more sophisticated. The indie game market exists and has much smaller teams, but they produce niche products for smaller markets – and unlike other industries, there is no additional cost from economy of scale there, as making an infinite number of electronic copies is almost (but not quite) free.

        On the other hand, the Internet has provided tons of opportunity for small businesses.

        There are small internet startup companies aplenty, but these things often have almost no employees. How many employees does Google’s core group have?

        It is pretty easy to be self-employed online as a Webcomic person or an artist or something similar. But, well, most of these people will never be rich, and they’re mostly producing entertainment (though there are people who do like web development and stuff).

        Anyway, point is, yeah, there are businesses, but the big businesses generally require a lot of scale to start with, while the little ones don’t require many new employees.

      • 1mime says:

        “Most of these people (in small niche businesses) won’t ever be rich”…

        For some, making a lot of money is not as important as personal fulfillment. Sure one has to have “enough” money to live comfortably and plan for the future, but if one’s personal and professional goals can be merged while doing something they love, good for them.

        I hate to think that one aspect of change due to technology and the information age is that we become a nation of little worker bees living in our hive business. That will secure employment and income but the ones in that organizational structure who thrive are those in R & D. Again, education needs to be re-envisioned to adapt to the workplace but there will be some quality of life lost in the process for many. It used to be that one could form their own mom and pop business and achieve a nice lifestyle and security. This was highly satisfying. The shrinking of the middle class is going to impact small business development.

  15. texan5142 says:

    At what point does it turn into cronyism? Same as it ever was, and here I thought clientelism was the natural order of things no matter the party in charge, silly me.

    Sara explains it well, no one is exempt from clientelism it will manifest it self in different forms no matter the party.

  16. moslerfan says:

    Just a quibble from paragraph 6 where you refer to the “finance industry.” Finance isn’t an industry, it’s a market. Industry produces, markets facilitate. One of the problems our economy has is that finance is trying to act like an industry, creating financial “products” of questionable value that seem to only benefit the bankers and are a driver of inequality.

    • goplifer says:

      Finance is an industry. Nothing you see around you grander than a garden shed was possible without finance. You may not like what finance did to the mortgage business in the last decade, but that doesn’t change the role of finance in the economy.

      Why is there so little high-yield economic activity in the southern states? Because of their long hostility to finance and banking. Where finance thrives, people thrive. Avoid living in places where people are persistently suspicious of bankers.

      • moslerfan says:

        I’m not trying to hate on finance, and I recognize its benefits. Traveling in Mexico, for example, you will observe a large number of partially completed buildings. My theory is that a poor finance infrastructure is the main cause.

        Finance is good when it enables increased output. But it has a tendency to enable speculation and bubbles, which are very profitable for finance itself although generally at the expense of the real economy. If the true role of finance is not kept in mind, it will inevitably turn pathological.

  17. Sara Robinson says:

    “You picked a perfect time to check out”…? Tell me more. What did I miss?

    It seems arguable to me that the Christian Right has developed something like a clientist cartel with deep hooks into the GOP. I’ve often written of my awe at the size and completeness of their epistemic bubble: you can go your whole life now, from cradle to grave, and not have to step outside it for anything. Every good and service you could possibly want can be furnished by your fellow believers. You can live in Evangelically-dominated states, consume a complete diet of Christian media, go to Christian schools from K through PhD, vacation at Christian resorts, wear clothes by Christian designers, and begin and end that life in Christian hospitals — it’s all-encompassing.

    As you can probably testify, it’s very true throughout much of the South that you really can’t succeed in business unless you join the right church, which puts you into a patronage network that will ensure your success as long as you pray in the right way, with the right people. A lot of money stays in this system (Walmart, Hobby Lobby, the entire oil industry), so it’s bought itself a lot of political power, which it doesn’t hesitate to use to promote its interests, enrich its favorite sons, and (when possible) foist its pinched view of morality onto the heathen scum outside its circle. The proof of this network’s power is that it has elected itself two presidents — both of whom were notable for their tragic immersion in faith-based, fictive realities.

    That’s what right-wing clientelism looks like now. While the Dixiecrats may have brought it to the South, the region’s turn to the GOP hasn’t done much to put an end to it. It just re-directed the system to that party’s own ends.

    • Creigh says:

      Sara, clearly the Christian right has created a bubble as you describe, but it exists almost completely within the private sector. Doesn’t clientelism as Chris is talking about imply diverting of public resources to favored groups?

      It does seem important that rent seeking largely benefits haves, and clientelism largely benefits have nots.

      • 1mime says:

        That’s an interesting observation, Creigh, but possibly favored groups are benefiting from public resources via friendly legislation and friendlier rulings. I assume that you are referring to seniors (medicare/social security) sort of thing? That may not be exactly to your point but it is what occurred to me after I read your comment. I’m sure Sara can elaborate.

      • Creigh says:

        Not sure how to respond to that, Mime, having a hard time getting my head around “clientelism.” I understand patronage, Chris seems to think it’s prevalent in some areas, and I won’t argue although it seems like it’s dying out slowly at least. (Rent seeking not so much.)

        Things like social security and medicare don’t seem to me to be corruption in any sense, therefore they can’t be considered clientelism. Maybe legislation favoring things like labor unions are more like what the column had in mind. Not much of that going around lately either.

      • 1mime says:

        Creigh, religious extremists have learned how to use the political process to enact friendly legislation (witness all the extreme laws being passed on social and religious issues) and this goes all the way up to Congress and SCOTUS. These groups, in effect, are “clients” because of their politcal clout. They vote in a block. Maybe I’m the one who doesn’t understand “clientelism”, but it appears to me that the religious right has exploited the institution of politics and government quite effectively.

      • Creigh says:

        Right, also I think corporations deserve a mention here.

  18. RobLL says:

    Chris, Sara – great discussion. I am also from Seattle.

    res Amazon – it is also a little like the bank (power of mega lender over bank) , Amazon is also locked into Seattle. Look how Boeing has been willing to lose or spend upwards of $100 Billion to escape Seattle.

    I suspect most Democrats have been happy to see Sanders force Clinton to move to the left.

  19. DFC says:

    The thesis might apply in retrospect, but going forward it’s not likely to have the same sway. Business has been globalized, and the principal drivers are 1) new technologies such as fiber optics; 2) the understanding that engineering principles and quantification are largely universal, so solutions can originate anywhere and go anywhere; and 3) the crashing costs of knowledge. We all know this story–a medical transcriptionist in Mumbai is as likely to be adequately competent as one in San Francisco for a fraction of the cost, hence the accelerating displacement of the local knowledge worker. Soon a computer will be displacing them both.

    What happens to the local physical world when the ways in which it used to sustain itself evaporate? Who’s going to pay the rent? Who’s going to go “there” when “there” isn’t necessary?

    Southern cities aren’t “Southern” anymore culturally in this respect. Chattanooga and Atlanta are massive fiber hubs. I share some of Sara’s apprehension over the empire-builders and their local effects (Bezos in Seattle, Comcast in Philadelphia, etc.) but that very crystallization is being functionally de-localized. The Cloud is the city now.

  20. Sara Robinson says:

    You seem to be having it two ways here. On one hand, you’re arguing that the Democrats are “the party of clientelism.” At the same time, you’re pointing out that the deep blue cities on the Left Coast are remarkably free of this curse, and that this is a critical factor in their (um, our) success.

    Machine politics has been endemic to both parties; it’s probably more arguable that it’s something that is generated out of party structures themselves. It may be more useful to explore the specific conditions that lead to the rise of political machines. Off the top off my head, a preliminary list might include the existence of labor (usually on the left) or capital (usually on the right) cartels that consolidate control of the region’s critical resources in a few hands, which makes it far easier for political bosses to get a grip on power.

    Knowledge work hasn’t lent itself well to this — so far — but from where I sit in Seattle, the first rays of a more patronage-riddled dawn are already creeping over the horizon. Amazon now controls a big patch of our downtown, and is probably our largest single property tax payer. What kind of leverage does that give Jeff Bezos over, say, city policy regarding education, transportation, development, civic investment? How long before we get to a point where nobody gets a seat on the City Council or any other important board without his blessing?

    San Francisco’s fighting these same battles, at later stages and on more fronts, so we don’t have to go far to see what that future looks like a few more years out. Any time you get crystallized power in large quantities — whether it’s big labor or big money — you’re going to get a situation in which those who control that power are able to corrupt democratic systems. Given that conservatism exists to reify the power of such elites, and progressivism at its historical best has always been about breaking it up, you’ve actually pointed out our best argument for preventing such concentrations of power in the first place.

    BTW, your argument also explains a hell of a lot about Europe, which is astonishingly lawless. France and Italy have patronage networks that go back half a millennium or more; and if you’re outside them, you’re pretty well screwed — you won’t even be able to get a cop to come if you call.

    • goplifer says:

      Welcome back, by the way. You picked a perfect time to check out.

      Fukuyama does a better job describing this than I do (and he takes about 250 pages). Corruption or plutocracy and clientelism aren’t quite the same thing. Eighty years ago clientelism was not associated with one party or the other. The demise of Republicans as a force in major northern cities ended that. The institution survives into the present in the US (and almost nowhere else in the Western world other than Italy, Greece and the Balkans) only via the Democratic Party.

      That said, it doesn’t really exist on the west coast. Those cities developed in an era after clientelism had lost most of its relevance. Meanwhile it completely controls Chicago and Philadelphia. Just like every policy dispute inside the GOP right now gets settled in favor of aging, bigoted white people, every Democratic internal dispute is ultimately resolved in favor of clientelistic interests. That will have to change, with major consequence in the old urban centers.

      Clientelism is not all bad, but it is archaic and it can’t really continue. Look at a map of Sanders and Clinton success (in Blue States) and you can see the contours of clientelism vs. what Fukuyama describes as “programmatic” (policy-driven) politics.

      The future is policy-driven programmatic politics rather than clientelism. There will be earthquakes on the way there. Sanders is one of those earthquakes.

      • Griffin says:

        I think the Sanders campaign is going to help pave the way for a more “credible” (one that’s been closer to power, isn’t as rigid in their thinking, etc) left-liberal by 2024, much like Barry Goldwater did for Ronald Reagan. Alot of young people who got involved in the Goldwater campaign later became leading lights of the dominant conservative movement, and I think you’re going to see something similar on the left side of the spectrum.

        Most of Sanders’ supporters are not actually crazy. Unlike many Trump and Cruz supporters they have (broad) policy positions for real world problems, and Sanders only ran because no other progressives were running against Clinton. Remember that he was their last choice in terms of candidates to run to Clinton’s left and he still got this far, you can only imagine what would have happened if someone like Elizabeth Warren, who is actually well-versed in economics and more well-known, had run instead.

        Also on a side-note another reason the early Democratic Party openly supported patronage was because it was presented as a way for the “common man” to acquire political power, in contrast to the more “elitist” Whig/Republican system where you had to be wealthy or highly educated or born into the right family to get into politics. I’m doubtful of how true that actually is but that’s what they ran on.

      • 1mime says:

        This post is especially interesting if one looks at how business (patronage) is speaking out against ultra-conservative positions. They are using their positions of power … property taxes, ability to move major financial events, sheer “image”….to force changes that they see as negative for their return on investment. Coca Cola in GA, NBA in NC, and so many more are more attuned to the diversity of our country and how it impacts their bottom line (I doubt their concern is driven by moral outrage) than the elected leadership and that of their base. IOW, business is “leading” change in social and political ways through the might of their size and financial importance.

        You mentioned San Francisco… Those areas may be deep blue on social issues, but what I am reading indicates a shift right in financial matters. Frankly, that’s a pretty cool combination…wish there were a party that had that balance…Austin, TX is interesting because it has rejected the crony politics of the entire state heirarchy and even houses the state capital within its environs! How fun is that!

        I am very interested to watch Sylvester Turner manuever through the Houston political briar patch. Big cities have big problems for all the reason you outlined, but it is going to take someone who can function within them and has a grasp of a better alternative to keep these cities vibrant. Frankly, I don’t care what party they represent as long as there is efficiency and equity. I’m still hopeful that those two can co-exist in government.

      • 1mime says:

        Today, CNN reports that embattled GA Governor Nathan Deal (got it right this time!) will veto a highly controversial bill passed by his Legislature. Major corporations doing business in his state have stated the legislation would curtail the rights of GA’s LGBT community.

        “The bill — HB 757 — would have given faith-based organizations in Georgia the option to deny services to gay, lesbian, bisexual and transgender people. Supporters said the measure would have protected religious freedom, while opponents have described it as “anti-LGBT” and “appalling.” (Personal note: If anyone thinks legislation like this is to protect religious liberty, ask yourself one question: “whose” religious liberty?)

        This is a good use of one’s clout as a major employer and financial contributor to state coffers. No doubt, there was a lot of hard work behind the scenes from members of the LGBT community to pressure these businesses to stand up for “real” religious freedom, but the important thing is that those who sought help to overturn this heinous legislation used the political process effectively to achieve their goal. (just as the Satanists did with the Gideon Bible issue) That is how politics can work in an open society. Of course, passing such discriminatory legislation is politics at its worst. At least this time, the bigots didn’t win. On to the next battle.

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