Plantation Economics? [Metaphorical Narrative]

The recent 2008 elections have felt like a turning point in American history for many of us; and, much has been written about the current state of the conservatives and the Republican Party. The mantra of CHANGE unmistakably matched the sentiments of the American majority, but the GOP continues to struggle with its meaning. Most of the published ideas mentioned from Republican politicians have not changed at all.

GOP platform staples include (in simple abbreviated form): 1) Lower Taxes, 2) State’s Rights, 3) Small Government, and 4) Strong Military and a Global Projection of Power.

I have just finished reading a fantastic book by Malcolm Gladwell called Outliers which I recommend highly to all. In chapter six he tells the story of Harlan, Kentucky of the early eighteenth century and the high level of violence in the town as a result of the family feud between the Howards and the Turners. Gladwell states:

“We want to believe that we are not prisoners of our ethnic histories. But the simple truth is that if you want to understand what happened in those small towns in Kentucky in the nineteenth century, you have to go back into the past.”

Although I use this quote a bit out of context, it also applies to understanding the political platform positions of the current Republican party which is a southern-conservative party as reflected in the 2008 election results.

The GOP platform positions can be linked directly to Pre-civil war economies of the South and the Post-civil war social developments and political positions of the “dixiecrats” and their “southern strategy.” They left the Democratic party over the Civil Rights Act of 1964 and eventually joined the Republican Party.

Plantation owners held strong political influence in the South pre-civil war and ran their operations with tight controls demanding loyalty from all subjects. This plantation narrative provides a model to understand the political dynamics of Southern-Conservative politics. At this point, I think we are all familiar with the history of slavery. This history plays into, I believe, the current southern political perspective of labor. Minimize and eliminate opportunities for collaboration to challenge the authority of the Leader/Ruling Class/Strict Father figure (no labor unions). This authority is reinforced through biblical interpretation that allows dominion over the earth by God and government should not interfere with these activities (re: the Civil War). Labor is a business cost on the income statement that should be managed with all other input costs to increase profitability to the enterprise.

Further elaboration of this narrative provides that the Ruling Class is the source and creator of jobs and should not be taxed at any greater levels than the rest of the population. In fact, the government should invest into the businesses of this group through subsidies for greater economic prosperity. Therefore, eliminate most social programs to reduce the size and scope of the central government to focus on defense of the national interest through an overwhelming military presence.

The only problem with this platform is that it has been proven to not work and is ineffective at accomplishing any of its stated goals to improve, protect, and benefit all of American society.


My understanding of the strict father model is from the writings of George Lakoff from his book Don't Think of an Elephant: Know Your Values and Frame the Debate -- The Essential Guide for Progressives and his essay “Metaphor, Morality, and Politics, Or, Why Conservatives Have Left Liberals In the Dust.”

Could Pensions follow Healthcare?

While reading the lead story in the April 2009 edition of CFO Magazine regarding the evolution of 401k plans in America, I began to wonder about the occurrences behind the shift away from pensions and if their dismal performance could eventually require a government takeover similar to plans for universal healthcare.

Initially, the 401(k) plan was a benefit to the corporations because it allowed for the general shift in financial recognition from the income statement to the balance sheet. The move allowed companies to give employees stock as a benefit where the employees would share in the gains (and losses) of the company stock performance. The pension plans required the company to make-up investment short-comings with cash contributions to ensure the benefit obligations.

With the current state of the economy and corporate equity valuations as measured by stock indices, the gains in stock performance supporting the middle class wealth have disappeared due to the financial crisis. Employees with plans to retire within the next five years will have to reevaluate those plans even if they had managed to alter their portfolio mix prior to the decline. They still took a hit. Those workers in bankrupt companies still covered by defined pensions have some protections provided by the Pension Benefit Guaranty Corporation (PBGC).

This current economic state of the financial crisis is what brought on the pondering. However, I do not think that pension/401(k) retirement plans will go the way of healthcare for a couple of fundamental reasons. The first reason is that there is no current political pressure highlighting the system disparities because all employees are theoretically in the same system. Although contributions vary at different employment levels within any organization, all are subject to the market fluctuations in stock values.

The second reason, and probably the biggest, is that the system is not a structural competitive burden to US corporations such as healthcare. The largest commercial competitors in the US market hail from the EU, Japan, and China which all have some version of Universal Healthcare. This means the burden of managing rising healthcare cost rests with the government and not the corporations. Insurance companies, hospitals, and pharmaceutical companies are not transferring inefficiencies and protecting their own profitability at the expense of manufacturers or other companies competing internationally.