Phillip K. Dick’s life has long passed into legend, peppered with florid tales of madness and intoxication. There are some who consider such legend something of a diversion from the character of Dick’s literary brilliance.

MAY 20, 2012, 5:00 PM

Philip K. Dick, Sci-Fi Philosopher, Part 1

By SIMON CRITCHLEY

The Stone is a forum for contemporary philosophers on issues both timely and timeless.

This is the first in a three-part series.

~~~

Part 1: Meditations on a Radiant Fish

When I believe, I am crazy. When I don’t believe,
I suffer psychotic depression.

— Philip K. Dick

Philip K. Dick is arguably the most influential writer of science fiction in the past half century. In his short and meteoric career, he wrote 121 short stories and 45 novels. His work was successful during his lifetime but has grown exponentially in influence since his death in 1982. Dick’s work will probably be best known through the dizzyingly successful Hollywood adaptations of his work, in movies like “Blade Runner” (based on “Do Androids Dream of Electric Sheep?”), “Total Recall,” “Minority Report,” “A Scanner Darkly” and, most recently, “The Adjustment Bureau.” Yet few people might consider Dick a thinker. This would be a mistake.

Dick’s life has long passed into legend, peppered with florid tales of madness and intoxication. There are some who consider such legend something of a diversion from the character of Dick’s literary brilliance. Jonathan Lethem writes — rightly in my view — “Dick wasn’t a legend and he wasn’t mad. He lived among us and was a genius.” Yet Dick’s life continues to obtrude massively into any assessment of his work.

Everything turns here on an event that “Dickheads” refer to with the shorthand “the golden fish.” On Feb. 20, 1974, Dick was hit with the force of an extraordinary revelation after a visit to the dentist for an impacted wisdom tooth for which he had received a dose of sodium pentothal. A young woman delivered a bottle of Darvon tablets to his apartment in Fullerton, Calif. She was wearing a necklace with the pendant of a golden fish, an ancient Christian symbol that had been adopted by the Jesus counterculture movement of the late 1960s.

Leif Parsons

The fish pendant, on Dick’s account, began to emit a golden ray of light, and Dick suddenly experienced what he called, with a nod to Plato, anamnesis: the recollection or total recall of the entire sum of knowledge. Dick claimed to have access to what philosophers call the faculty of “intellectual intuition”: the direct perception by the mind of a metaphysical reality behind screens of appearance. Many philosophers since Kant have insisted that such intellectual intuition is available only to human beings in the guise of fraudulent obscurantism, usually as religious or mystical experience, like Emmanuel Swedenborg’s visions of the angelic multitude. This is what Kant called, in a lovely German word, “die Schwärmerei,” a kind of swarming enthusiasm, where the self is literally en-thused with the God, o theos. Brusquely sweeping aside the careful limitations and strictures that Kant placed on the different domains of pure and practical reason, the phenomenal and the noumenal, Dick claimed direct intuition of the ultimate nature of what he called “true reality.”

Yet the golden fish episode was just the beginning. In the following days and weeks, Dick experienced and indeed enjoyed a couple of nightlong psychedelic visions with phantasmagoric visual light shows. These hypnagogic episodes continued off and on, together with hearing voices and prophetic dreams, until his death eight years later at age 53. Many very weird things happened — too many to list here — including a clay pot that Dick called “Ho On” or “Oh Ho,” which spoke to him about various deep spiritual issues in a brash and irritable voice.

The fact is that after Dick experienced the events of what he came to call “2-3-74” (the events of February and March of that year), he devoted the rest of his life to trying to understand what had happened to him. For Dick, understanding meant writing. Suffering from what we might call “chronic hypergraphia,” between 2-3-74 and his death, Dick wrote more than 8,000 pages about his experience. He often wrote all night, producing 20 single-spaced, narrow-margined pages at a go, largely handwritten and littered with extraordinary diagrams and cryptic sketches.Now, was this just bad acid or good sodium pentothal? Was Dick seriously bonkers? Was he psychotic? Was he schizophrenic? (He writes, “The schizophrenic is a leap ahead that failed.”) Were the visions simply the effect of a series of brain seizures that some call T.L.E. — temporal lobe epilepsy? Could we now explain and explain away Dick’s revelatory experience by some better neuroscientific story about the brain? Perhaps. But the problem is that each of these causal explanations misses the richness of the phenomena that Dick was trying to describe and also overlooks his unique means for describing them.

The unfinished mountain of paper, assembled posthumously into some 91 folders, was called “Exegesis.” The fragments were assembled by Dick’s friend Paul Williams and then sat in his garage in Glen Ellen, Calif., for the next several years. A beautifully edited selection of these texts, with a golden fish on the cover, was finally published at the end of 2011, weighing in at a mighty 950 pages. But this is still just a fraction of the whole.

Dick writes, “My exegesis, then, is an attempt to understand my own understanding.” The book is the most extraordinary and extended act of self-interpretation, a seemingly endless thinking on the event of 2-3-74 that always seems to begin anew. Often dull, repetitive and given to bouts of massive paranoia, “Exegesis” also possesses many passages of genuine brilliance and is marked by an utter and utterly disarming sincerity. At times, as in the epigraph above, Dick falls into melancholic dejection and despair. But at other moments, like some latter day Simon Magus, he is possessed of a manic swelling-up of the ego to unify with the divine: “I was in the mind of God.”

In order to understand what happened to him on 2-3-74, Dick used the resources that he had at hand and that he liked best. These were a complete set of the 15th edition of Encyclopedia Britannica that Dick purchased late in 1974 and Paul Edwards’s arguably unsurpassed “Encyclopedia of Philosophy,” published in eight handsome volumes in 1967, one of the richest and most capacious philosophical documents ever produced. Dick’s reading was haphazard and eclectic. Encyclopedias permitted an admittedly untutored rapidity of association that lent a certain formal and systematic coherence to his wide-ranging obsessions.

This leads me to an important point. Dick was a consummate autodidact. He survived for less than one semester at college, at the University of California, Berkeley, in 1949, taking and quitting Philosophy 10A in the space of a few weeks. Dick left the class in disgust at the ignorance and intolerance of his instructor when he asked his professor about the plausibility of Plato’s metaphysical theory of the forms — the truth of which was later proven for Dick by the experience of 2-3-74. Dick was evidently not trained as a philosopher or theologian — although I abhor that verb “trained,” which makes academics sound like domestic pets. Dick was an amateur philosopher or, to borrow a phrase from one of the editors of “Exegesis,” Erik Davis, he was that most splendid of things: a garage philosopher.Skimming through and across multiple encyclopedia entries, Dick found links and correspondences of ideas everywhere. He also stumbled into the primary texts of a number of philosophers and theologians — notably the pre-Socratics, Plato, Meister Eckhart, Spinoza, Hegel, Schopenhauer, Marx, Whitehead, Heidegger and Hans Jonas. His interpretations are sometimes quite bizarre but often compelling.

What Dick lacks in academic and scholarly rigor, he more than makes up for in powers of imagination and rich lateral, cumulative association. If he had known more, it might have led him to produce less interesting chains of ideas. In a later remark in “Exegesis,” Dick writes, “I am a fictionalizing philosopher, not a novelist.” He interestingly goes on to add, “The core of my writing is not art but truth.” We seem to be facing an apparent paradox, where the concern with truth, the classical goal of the philosopher, is not judged to be in opposition to fiction, but itself a work a fiction. Dick saw his fiction writing as the creative attempt to describe what he discerned as the true reality. He adds, “I am basically analytical, not creative; my writing is simply a creative way of handling analysis.”

Next, Part 2: “Future Gnostic.”

Simon Critchley is Hans Jonas professor of philosophy at the New School for Social Research in New York. He is the author of many books, most recently, “Faith of the Faithless: Experiments in Political Theology,” and is the moderator of this series.

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This post has been revised to reflect the following correction:

Correction: May 21, 2012

An earlier version of this article misspelled the name of the tablets delivered to Philip K. Dick's apartment in 1974. They are called Darvon, not Davron.

True 'Muircans Despise Paying Taxes so Much, They'd Rather Renounce Their Citizenship than to do so.

May 21, 2012, 1:40 PM

No Comment Necessary: 

Grover Norquist Plays the Nazi Card

By ANDREW ROSENTHAL

Chuck Schumer and Bob Casey introduced legislation last week that would penalize Americans who renounce their citizenship to evade taxes.

Grover Norquist, the president of Americans for Tax Reform, had this to say:

“I think Schumer can probably find the legislation to do this. It existed in Germany in the 1930s and Rhodesia in the ’70s and in South Africa as well. He probably just plagiarized it and translated it from the original German.”

Obama on the High Wire

MAY 20, 2012, 11:55 PM

Obama on the High Wire

By THOMAS B. EDSALL

Is the Democratic party the tribune of the underdog or the slave of special interests?

This is a very important and critical question.  My contention is that the Democratic Party has for years merely paid lip service to it's "traditional" roots as it talks out of one side of its mouth (metaphorically speaking) and acts like a well-paid corporate whore.

For much of his first three years in office, President Obama has struggled to maintain the loyalty of the liberal wing of his party. Suddenly, in 2012, he has put on a full court press.

He's "struggled to maintain the loyalty because his entire agenda has been one of kow-towing to corporate (especially Goldman Sachs) financial interests. Perhaps talking the talk, but never walking the walk.

The president’s policy shift in favor of same-sex marriage, for example, has allowed him to win back the hearts, minds and wallets of the gay rights community, a crucial source of Democratic support.

I don't see this as a "policy shift," only a recent band wagon to jump on, and it is NOT a band wagon one would jump on in order to win votes, because he will alienate more voters than he will win over, EXCEPT ... in that 18-29 aged cohort which is not so likely to be voting at all (except that they voted in 2008). And while it is frequently wrong to "impute motive" (as my dear and beloved friend Mike Huston is so often wont to admonish me), there is nothing about Obama's career as a legislator to suggest that everything he does (or does not do, in the case of voting "present") is very calculated, mostly to avoid taking a stand that might come back and alienate voters.  The facts on the ground are that "the younger generation (of voters)" is far more "liberal" (accepting) of gay people, because they have good and dear gay friends and they simply do not care about whom other people choose to be intimate with.  This is a VERY advanced and mature way to be (it helps that there are many places, school systems, etc, for the GLTB communities to come out, where they are encouraged to come out, and where "straight" kids join with them in standing shoulder to shoulder to fight those that would oppress others purely on the basis of sexual preference.  This, indeed is growth and maturity.

On another front, no week goes by without one or more events designed to secure and deepen Obama’s advantage among women. On May 14, he pointedly gave the graduation address at Barnard, the women’s college affiliated with Columbia (his alma mater), informing graduates:

After decades of slow, steady, extraordinary progress, you are now poised to make this the century where women shape not only their own destiny but the destiny of this nation and of this world.

A clearer case of "pandering" for votes to a cohort that helped to elect him could hardly be made.  But, this for all intents and purposes is no different from the appeals made by the GOP during the Cheney administration's reign to the Conservative (so-called) Christian Right - in the Cheney adniminstrations overt pandering to the fears and prejudices of the group that voted them in most consistently.  This is simply good politics.  Make statements that appeal to "your base."  Then, do nothing about or for your base for your entire next term.

From Barnard in upper Manhattan, Obama traveled downtown to ABC and an appearance on “The View,” to tell Barbara Walters, Whoopi Goldberg, Joy Behar, Sherri Shepherd and Elisabeth Hasselbeck, “I like hanging out with women.”  (To which I must say, "big fucking deal; don't we all?"

In an effort to revive the strong margin of support he received from young voters in 2008, Obama has stressed his support for legislation keeping the student loan interest rate at 3.4 percent, instead of allowing the scheduled increase to 6.8 percent. Loan burdens, especially on recent graduates struggling to find work, are a major issue for voters under the age of 30 – voters Obama must mobilize this year.

Obama may have "had" to mobilize his voting blocks, at one time, but that was before the best the Republicans had to offer was a Mitt.  I repeat, for the umpteenth time, the Republicans (and their corporate overlords) have NO, repeat NO interest whatsoever in seeing Romney win, because they are VERY content and satisfied with virtually every aspect of the Obama administration's legislative policies.

On Capitol Hill, Democrats are also taking up similar themes. The Senate passed what would normally be routine legislation reauthorizing the Violence Against Women Act, but with added provisions to protect those in same-sex relationships from abuse — a pro-gay rights amendment anathema to House Republicans.

Individually, these and other steps taken by the administration and Democratic legislators to build support among diverse constituencies have varying degrees of popular support. In and of themselves, they would not create political problems.

The volatility of this issue can be seen in the current controversy in Massachusetts over the Democratic Senate candidate Elizabeth Warren’s past description of herself as of indigenous American descent, which prompted opponents to accuse her of using that status to gain special consideration in hiring and promotion decisions. The difficulty for the Democratic Party and its candidates arises when voters perceive that elected officials are granting special, non-universal privileges or preferences for political gain. With some regularity over the past four and a half decades, many voters — moderates and conservatives in particular — have demonstrated an aversion to contemporary liberal public policy that provides benefits and protections to groups defined by race, ethnicity, gender, or sexual orientation.  (Thus it almost goes without saying, that team Obama has done its research and determined that the number of voters to be offput by Obama taking such a "courageous, moral stance" is less than the numbers of voters is less than the numbers who will embrace him for his so-called "courageous moral stance.")

“For years, Harvard has claimed special minority status for Professor Elizabeth Warren as a member of a Native American tribe and their first minority hire,” declared Jim Barnett, who is managing Senator Scott Brown’s re-election campaign.

That Warren allowed Harvard to hold her up as an example of their commitment to diversity in the hiring of historically disadvantaged communities is an insult to all Americans who have suffered real discrimination and mistreatment, and Warren should apologize for participating in this hypocritical sham.

Some evidence that Obama must walk a fine line as he seeks majority backing can be found in the May 15 CBS News/New York Times poll, which showed that 67 percent of respondents said Obama came out for same-sex marriage “mostly for political reasons,” while just 24 percent said he made the decision “mostly because he thinks it is right.”

These numbers do not mean that two thirds of the public oppose same-sex marriage; in fact, the public is fairly evenly split. What the numbers do reveal is that a majority of the electorate believes that political calculation, rather than moral principle, drove the president’s decision.

In an equally troublesome finding for Obama, the Times poll recorded a dramatic drop in the level of support for Obama among women, with Romney actually pulling ahead, 46-44. Obama’s support among female voters has fallen from 49 to 44 percent over the past two months, while Romney’s rose three points.

Stephanie Cutter, deputy manager of the Obama campaign, has challenged the accuracy of the Times poll, arguing that the methodology – calling people who have been previously surveyed,  known as a “panel back” — resulted in “a biased sample.”

But even if the poll findings can be reasonably disputed, they still suggest that Obama’s aggressive bid to strengthen his support among women may be backfiring. Separate polling by Marquette Law School in Wisconsin shows Obama holding a strong, but declining advantage among women voters. In February, Obama had a 21 percentage point lead among women, 56-35; by mid-May, his margin among women had fallen to 9 points, 49-40.

The roots of Democratic Party vulnerability on affirmative action and other forms of group-based “preferences” lie in the social, cultural and moral revolutions of the 1960s and 70s – revolutions that have been the source of contemporary liberalism’s strengths and liabilities.

This is perhaps best illustrated in the following chart, created by two political scientists, Christopher Ellis of Bucknell and James Stimson of the University of North Carolina.

The chart tracks the percentage of the electorate that identifies itself as liberal. There is an abrupt and steep drop in self-identified liberals in the mid-1960s, which coincided with the emergence of the rights revolution – including civil rights, women’s rights, and the right to sexual privacy – as well as the  anti-war movement. The Democratic Party and liberalism were increasingly identified with these movements.

Ellis and Stimson write that from 1963 to 1967, “the ranks of self-identified liberals fell by 10.5 points – about one fourth – and never recovered.” They argue that the shift resulted from “the new clientele of liberalism”:

The New Deal had for clients the working people of America. In one phrase it was “the common man.” Thus liberalism was conjoined with pictures of workers, often unionized, hard-working people, playing by the rules, and trying to get ahead…. With the coming of the Great Society there was a new clientele of liberalism, the poor – and the nonwhite. The focus of Lyndon Johnson’s war on poverty was the underclass of people whose usual defining characteristic was that they did not work. And although there were – and are – more poor white people than black people, the image of poverty from the very beginning was black.

Successful Democratic presidential candidates – especially Bill Clinton and Obama – have been acutely aware of these liabilities.

Many of the strategies undergirding the campaigns of 1992, 1996 and 2008 were explicitly designed to mute or eliminate perceived liberal vulnerabilities. Clinton famously promised to “end welfare as we know it,” to reward those “who work hard and play by the rules.” He also went out of his way to demonstrate his support for the death penalty as Arkansas Governor by rejecting clemency for convicted killer Ricky Ray Rector, who was executed in Arkansas during the 1992 campaign despite serious brain damage resulting from a self-inflicted wound.

In 2008, Obama confounded liberal supporters when he praised a Supreme Court ruling overturning a Washington, D.C. ban on handguns, endorsed a proposed wiretap law and spoke favorably about applying the death penalty to those convicted of raping a child.

One of the interesting phenomena demonstrated in the Ellis-Stimson chart above is the ebb and flow of liberal self-identification after the drop in the mid-1960s. While never rising to previous levels, liberal self-identification increases during Republican administrations (Nixon-Ford-Reagan-Bush) and decreases when Democrats take over the presidency (Carter-Clinton). The sole exception is the increase in liberal self-identification in the latter years of the Clinton administration, likely a negative response to the Republican take-over of the House and Senate in 1995, the ascendance of House Speaker Newt Gingrich and the Republican attempt to impeach Clinton in 1998.

A second interesting political development in recent decades is that Democrats have paid a higher price for policies favoring their constituencies, especially the poor and minorities, than Republicans have paid for doing the same thing on behalf of the rich.

Both Ronald Reagan and George W. Bush won approval, soon after winning election, of tax policies decisively favoring the affluent, and both went on to win re-election.

The relative invulnerability of the Republican Party in recent years to backlash after pushing through regressive tax policies is even more surprising because a plurality of the public, 46 percent, believes the rich are rich as a result of their connections, not their hard work, according to Pew surveys. In other words, while voters are hostile to policies benefiting those seen as the “undeserving” poor, they are more tolerant of policies benefiting the undeserving rich:

Part of this difference is rooted in the power of race in American politics. Some of the most controversial policies supported by Democrats, including civil rights generally, affirmative action and busing, have alienated a portion of white voters, especially those in the South and in northern working-class communities.

At the same time, part of the tolerance of policies that favor the rich comes from the fact that voters place a much higher value on increasing opportunity than they do on decreasing inequality.

Gallup reported in December that 70 percent of survey respondents said it was “extremely” (29 percent) or “very” important to increase the equality of opportunity for people to get ahead,” while 46 percent said it was “extremely” (17 percent) or “very” (29 percent) important to “reduce the income and wealth gap between the rich and the poor.”

In the same survey, Gallup found that 52 percent described “the fact that some people in the United States are rich and others are poor” as acceptable, while 45 percent said it is “a problem that needs to be fixed.” The percentage answering “acceptable” actually grew seven points, up from 45 percent in 1998, despite the efforts of the Obama administration and the Occupy Wall Street movement to make inequality a more salient issue.

Perhaps most fascinatingly, a majority of Americans, 58 percent, identify themselves as “haves” while 34 percent say they are “have nots,” according to Gallup. A person identifying him or herself as a have is more likely to see a threat to their own assets in redistributive government policies.

As the 2012 election progresses, there is every sign that Republicans will seek to strengthen the perception of the Obama administration as dependent on constituencies that are often disadvantaged or that have been previously marginalized. They will gleefully label their advocates “special interests.”

The conservative columnist Jay Cost wrote last week:

You, me, and almost everybody else in this country wants to talk about jobs, the deficit, national security, but the Democratic party simply does not listen to us. It is not responsive to what we want, but rather only to the special interests that now dominate it. Organized labor, the environmentalist left, the feminists, big city machine politicos, and all the rest – they hum the tune to which the party dances. If you are lucky enough to be in one of those groups, then the Democrats will be happy to hear what you have to say. If you aren’t, then you’ll be lucky if they don’t hang up on you!

The campaign will require Obama to reinvigorate support among core constituencies – minorities, single women, the young, “knowledge workers” and “creatives”– without antagonizing moderates. It will not be easy.

There is one factor helping Obama to negotiate this political minefield on the path to Nov. 6: the taint of racial or anti-gay prejudice that clings to some Republican initiatives. It can all happen very quickly. The disclosure by the Times of a plan under consideration by a conservative super PAC to run tough, racially-freighted ads using the comments of the Rev. Jeremiah Wright to attack Obama, forced the super PAC to back away from the proposal.

Republicans and Democrats are aware that attack ads can prove highly counterproductive if voters see them as divisive and intolerant. Both parties and their candidates run the risk of putting a foot wrong and slipping off the tightrope.

Thomas B. Edsall, a professor of journalism at Columbia University, is the author of the book “The Age of Austerity: How Scarcity Will Remake American Politics,” which was published earlier this year.

An institution like JPMorgan — a too-big-to-fail bank, not to mention a bank whose deposits are already guaranteed by U.S. taxpayers — shouldn’t be engaged in this kind of speculative investment at all. And that’s why we need a return to much stronger financial regulation.

May 20, 2012

Dimon’s Déjà Vu Debacle

By PAUL KRUGMAN

Sometimes it’s hard to explain why we need strong financial regulation — especially in an era saturated with pro-business, pro-market propaganda. So we should always be grateful when someone makes the case for regulation more compelling and easier to understand. And this week, that means offering a special shout-out to two men: Jamie Dimon and Mitt Romney.

It's only hard to explain to someone who has no historical perspective about "The Great Depression" and the impact the Glass-Seagall Act had on bringing banks back into the business of business like lending.

I’ll come back shortly to the troubles at JPMorgan Chase, the bank Mr. Dimon runs. First, however, let me talk about Mr. Romney, whose remarks about those troubles were so off-point that they constitute a teachable moment.

Here’s what the presumptive Republican presidential nominee said about JPMorgan’s $2 billion loss (which may actually have been $3 billion, or $5 billion, or more, but who’s counting?): “This was a loss to shareholders and owners of JPMorgan and that’s the way America works. Some people experienced a loss in this case because of a bad decision. By the way, there was someone who made a gain.”

At the Barrington Kiwanis Club Meeting last Tuesday, the most inane member of a relatively sober group of people with some understanding of the human condition, although the virtually all self-identify as Republicans, the inane one says, "So, what's JPMorgan's cash flow?  $600 billion per year?  And their assets are $3 trillion.  What's a mere $2 billion compared to those numbers?  (He is all death on ALL government regulation.)  What's the problem with that?  Companies drop way more (speaking of percentages of annual cash flow) all the time in Research & Development.  (He's a patent attorney.  I have NO idea how accurate his numbers are.) I relate this story only to point out that some people are not troubled one wit by JPMorgan's loss of a relatviely small $2 billion!!!!!

What’s wrong with this statement? Well, suppose that someone — say, Jimmy Stewart in the movie “It’s a Wonderful Life” — runs a bank that takes in deposits and invests the money in various ways. And suppose that one of those investments is a risky bet on some complex financial instrument, with Mr. Potter, the evil plutocrat, on the other side.

If Jimmy Stewart’s bet pays off, we’re in Romneyworld: he’s made money, Mr. Potter has lost money, and that’s that. But suppose Jimmy Stewart loses his bet. If the bet was big enough, he no longer has enough assets to pay off his depositors. His bank collapses, probably in a chaotic bank run that takes down the whole town’s economy as collateral damage. Mr. Potter makes money on the deal, but so what?

I had a conversation at the train station a few weeks back, and I was very critical of Harvard Business School and the University of Chicago Business School.  A young man, graduate of both schools, took me to task, saying, "People have no memory.  It's all their fault (for investing in these institutions in the first place). Once again, I will state, Harvard and Chicago's business schools have destroyed more potential not-so-bad men than whiskey and cocaine at 22-year old pussy combined.

The point is that it’s not O.K. for banks to take the kinds of risks that are acceptable for individuals, because when banks take on too much risk they put the whole economy in jeopardy — unless they can count on being bailed out. And the prospect of such bailouts, of course, only strengthens the case that banks shouldn’t be allowed to run wild, since they are in effect gambling with taxpayers’ money.

Incidentally, how is it possible that Mr. Romney doesn’t understand all of this? His whole candidacy is based on the claim that his experience at extracting money from troubled businesses means that he’ll know how to run the economy — yet whenever he talks about economic policy, he comes across as completely clueless.

Well, Kruggers, it could be that the man is functionally illiterate, and does not know shit from shinola.  This is ENTIRELY possible, because he has been sheltered from reality his entire life, having to the manor been born.

Anyway, it goes without saying that Jamie Dimon is no Jimmy Stewart. But he has, in a way, been playing Jimmy Stewart on TV, posing as a responsible banker who knows how to manage risk — and therefore the point man in Wall Street’s fight to block any tightening of regulations despite the immense damage deregulated banks have already inflicted on our economy. Trust us, Mr. Dimon has in effect been saying, we’ve got this covered and it won’t happen again.

Now the truth is coming out. That multibillion-dollar loss wasn’t an isolated event; it was an accident waiting to happen. For even as Mr. Dimon was giving speeches about responsible banking, his own institution was heaping on the risk. “The unit at the center of JPMorgan’s $2 billion trading loss,” reports The Financial Times, “has built up positions totaling more than $100 billion in asset-backed securities and structured products — the complex, risky bonds at the center of the financial crisis in 2008. These holdings are in addition to those in credit derivatives which led to the losses.”

And what was going on as these positions were being accumulated? According to a fascinating report in Sunday’s Times, the reality behind JPMorgan’s facade of competence was a scene all too reminiscent of the behavior that brought down firms like A.I.G. in 2008: arrogant executives shouting down anyone who tried to question their activities, top management that didn’t ask questions as long as the money kept rolling in. It really is déjà vu all over again.

The point, again, is that an institution like JPMorgan — a too-big-to-fail bank, not to mention a bank whose deposits are already guaranteed by U.S. taxpayers — shouldn’t be engaged in this kind of speculative investment at all. And that’s why we need a return to much stronger financial regulation, stronger even than the Dodd-Frank regulations passed back in 2010.

Will we get that kind of regulation? Not if Mr. Romney wins, obviously; he wants to repeal Dodd-Frank, and in general has made it clear that he would do everything in his power to set us up for another financial crisis. Even if President Obama is re-elected, getting the kind of regulation we need will be an uphill struggle. But as Mr. Dimon’s debacle has just demonstrated, that struggle remains as necessary as ever.

Doom and gloom, and yet, some original thinking on addressing the increasing costs of social security and Medicare.

MAY 20, 2012, 9:51 PM

Entitlement Reform For the Entitled

By EZEKIEL J. EMANUEL

Philadelphia

IF nothing is done about entitlement spending, and if our current tax breaks continue, then by 2025, tax revenue will be able to pay for Medicare, Medicaid, Social Security, interest on the debt and nothing else. The rest — defense, medical research, highways, education, energy — will have to be financed by deficits. Social Security’s funding is predicted to run short in 2033, Medicare’s trust fund in 2024.

There is a huge technical innacuracy about this paragraph.  It sounds SO certain. While there are indeed SOME caveats (If nothing is done ... and if our current tax breaks continue) there is one caveat in particular that needs to bestate and that is AND IF ALL OF THE ASSUMPTIONS UNDERLYING THE FINANCIAL PROJECTIONS upon which my thesis is based come to pass. In actual point of fact, BECAUSE the U.S. government CAN raise taxes, the Gross Domestic Product might grow at a more favorable rate, unemployment might be reduced, more people might enter or re-enter the work force making significantly more money than they are making at present, then, things won't be so bleary.  OR, if things continue going South, things could be worse and the day of "demise" might come sooner. But the main thesis is based on some predictions which in fact WILL NOT COME TO PASS, because that is the nature of intermediate and long term predictions.  STUFF HAPPENS!  Nonetheless, the forecasts are useful because they provide us with a future scenario which is likely, PROVIDED ALL THE ASSUMPTIONS COME TO PASS.

Like much else in Washington, there is little bipartisan agreement on what to do about it. When it comes to Social Security and Medicare, Republicans emphasize cuts and privatization, while Democrats strongly oppose both approaches. Neither side was able to embrace the 2010 bipartisan Simpson-Bowles plan, which proposed lowering Social Security’s cost-of-living adjustments, increasing the taxable maximum income and raising the eligibility age to 69 by 2075.

But here is a better bipartisan reform: Graduated eligibility. Instead of having a fixed age at which people can get Social Security and Medicare, we should link the age of eligibility to lifetime wealth. The richer you are, the older you would have to be to be eligible for Social Security and Medicare.

The only problem with "graduated eligibility is that it will be opposed by the wealthy.  STRONGLY opposed, because they get so little (in comparison) from social security, and they resent having to pay "so much" for "so little" in return, never once considering that the price one will eventually pay for putting into penury the overwhelming majority of a nation's citizens is that eventually, out of desperation, the citizens will rise up in revolt and they will take their anger out on the wealthy, decapitating them and impaling their heads on stakes; burning them alive; guillotining them, as has been done in France (twice).  So, it is in the best interests of the wealthy elites, that they pay more in taxes for social insurance.  The insurance that they are permitted to continue to frolic about in their social circles without having to fear for the lives (which they should).

Here’s how it would work. People in the bottom half of the lifetime earnings distribution would become eligible for normal retirement benefits at age 65 for Medicare and 66 for Social Security, just as they are today. But people in the next quarter of the lifetime earnings distribution would become eligible for the respective programs at 67 and 68, and those in the top quarter would become eligible at 70 and 71. All eligibility ages would increase over time, as they are scheduled to now.

In all income brackets, those choosing to retire later than the standard age would still receive higher Social Security benefits, called delayed-retirement credits. For those choosing to retire earlier and accept reduced benefits, on the other hand, nothing would change in the lower bracket, while the minimum age would increase in the two higher income brackets. And wealthier older people would have the choice of buying into Medicare at age 65, though they would have to pay for it before the age of 70.

Demographic changes since Social Security was first enacted are a good argument for raising the retirement age. In 1935, a man who reached the age of 65 was likely to live almost 13 more years (and a woman, almost 15). But today, Americans who reach 65 are likely to live nearly 19 more years.

But graduated eligibility also accounts for the fact that the rich live longer than the poor, and that the longevity gap is increasing. In 2007, the Social Security Administration did a study of mortality and income. Among 65-year-old men born in 1922, those with income in the top half lived an average of 2.2 years longer than those in the bottom half. But among 65-year-old men born in 1941, those with income in the top half were projected to live an average of 5.3 years longer. Thus, requiring wealthier Americans to wait five more years to claim Social Security and Medicare has the effect of giving an average rich and an average poor person nearly the same number of years of benefits.

This reform also combines several important values. The main reason Social Security and Medicare have such strong public support is that they are universal benefits; they are not just for the poor. With graduated eligibility, all Americans will still get benefits, regardless of income; the only thing that changes is when. And because the rich, on average, would live longer and get the same number of years of benefits as those in lower income brackets, the plan should appeal to those who still feel strongly that everyone should pay their fair share.

No, they are NOT just for the poor.  But, what happens when those who have climbed fairly high up the food chain end up LOSING IT ALL (as has happened to friends of ours who, in their early 50's could never have envisioned that they would be living primarily off of Social Security benefits after a particularly bad career choice ended up costing them 100's of 1,000's of dollars).

It also makes practical sense. Americans in the bottom half of the income distribution are more likely to have jobs in manual labor, which is more physically difficult for older people to perform. White-collar workers in the upper bracket don’t face the same physical demands. And their greater earnings mean they should be able to save more to support themselves longer.

I suspect very few "white collar" people are comfortably well off, and I further suspect that they KNOW IT!

Graduated eligibility should be based on lifetime earnings instead of any particular year’s income, which can be quite volatile. It would be administratively simple to determine each citizen’s lifetime earnings, because the Social Security Administration already has all this data. And this measure would have the benefit of encouraging personal responsibility; people making more than the median income would have an incentive to save. Anyone who earned a lot at one time but frittered it away would have to continue working longer.

Either in the lame duck Congressional session after the election or in 2013, there will surely be debate about a deal to address taxes and the deficit. Graduated eligibility should be on the table. It would not completely close the shortfall of the trust funds, but it would put Social Security and Medicare on a stronger financial footing, while reaffirming their universal nature and reflecting the fortunate fact that Americans are living longer.