A Change Is Gonna Come

For the past six years our country has been taken right, very right, to a place where we fight the war against terror in a place it didn't start and where we clearly can't win it, to a place where we spy on our own citizens, where we threaten to deny women the right to control their own bodies, and to a place where the all the economic growth is routed to the people already occupying the top rung on the ladder.

I have said before on this blog that the political pendulum swings in both directions. Our country swung too far left in aftermath of the new deal and the civil rights movement (both good things) and too far right in the wake of the reagan revolution. I think we are on a verge of a swing back and this front page article in today's New York Times points out why.

wages and salaries now make up the lowest share of the nation’s gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960’s.

According to Times, Ben Bernanke warned that the unequal distribution of the economy’s spoils could derail the trade liberalization of recent decades. Because recent economic changes “threaten the livelihoods of some workers and the profits of some firms,” Mr. Bernanke said, policy makers must try “to ensure that the benefits of global economic integration are sufficiently widely shared.”

Charles Cook, a nonpartisan political analyst sums it up:

“There are two economies out there. One has been just white hot, going great guns. Those are the people who have benefited from globalization, technology, greater productivity and higher corporate earnings. And then there’s the working stiffs,’’ he added, “who just don’t feel like they’re getting ahead despite the fact that they’re working very hard. And there are a lot more people in that group than the other group.”

I am in the first group, "who have benefited from globalization, technology, etc" but I don't like it one bit that our current path is screwing over the "working stiffs" and it's time for a change and we are doing our part to make sure that change comes soon.

Last night some friends came together to do a fundraiser for two candidates for the US Senate who will help bring a needed balance to our government, Claire McCaskill of Missouri and Sherrod Brown of Ohio. As much as the right would like to paint these two as "liberals", they seem like pretty pragmatic responsible people to me.

Claire's the Missouri state auditor and talks a lot about fiscal responsibility which used to be the strong suit of the republican party but now is clearly something the democratic party has a stronger record on. She also used to be the Jackson County Prosecutor and believes that strong law enforcement (like we just saw in the UK) is our best reponse to the war on terror instead of fighting a war in a place that had nothing to do with 9/11. Claire's a tough customer and I like it when she gets fiesty. She'll make a great Senator.

Sherrod's a veteran congressman from Ohio who makes exactly the case that the Times article talks about. He's for an increase in the minimum wage which is now at its lowest point on an inflation adjusted basis since it was created. He's for full funding of No Child Left Behind, he's for fixing Medicare Part D, and a host of other issues that really matter to the "working stiffs".

Claire and Sherrod were joined by Rep. Tim Bishop who represents the eastern end of long island, where we did the fundraiser last night. Tim's also a sensible progressive who wants to bring some balance to our government. Tim looks like a shoe-in to get re-elected but let's hope Tim's in the majority in the house next session because he's got some really good ideas about education policy that ought to see the light of day.

Claire and Sherrod each left us with a parting thought that sticks with me today. Claire says that getting involved in politics is a patriotic activity. It shows we care about our country. If Claire and Sherrod end up in the Senate, I don't plan on calling in any favors. I just plan on being happy that some balance has been returned to our government.

Sherrod asked us each to convince five voters to support him. I hope that I have at least five readers in Missouri and Ohio and that you all will give Claire and Sherrod a chance, and ideally your vote. Because a change is gonna come. Our country needs it. Now.

A Change Is Gonna Come - Sam Cooke

Comments (37) | Posted August 28, 2006 in Politics

Comments

"unequal distribution of the economy’s spoils"

Who knew that the entrepreneurs at your portfolio companies were working for something called "the economy" which produces "spoils" which are then to be "distributed".

Posted by: Rockwell | Aug 28, 2006 11:32:38 AM

rockwell

i work for more than money

i suspect most of the entrepreneurs who we back do so too

fred

Posted by: fred | Aug 28, 2006 11:35:56 AM

"He's for full funding of No Child Left Behind"

Has there ever been any legislation more disasterous for our education policy than NCLB? Kudos to several states that have sued the federal government to get out of its absurd requirements and that remove the teacher's unique abilities to teach?

Instead, every public school teacher is forced to plan their lessons according to the test, far too much weight is given to even more standardized testing (which has repeatedly been proven to be only one of many indicators of future scholastic success) all while failing to produce the results it intended.

A candidate that simply wants to throw more money at a growing problem is not someone I would vote for this November.

Posted by: Josh | Aug 28, 2006 11:39:13 AM

josh

sherrod also pointed out all those problems you mention with No Child Left Behind. he's for letting teachers teach too. but there are a lot of good things that would come of fully funding No Child Left Behind. Bush promised a ton of money for education as part of getting the things he wanted. once he got them, he punted on the money. to date No Child Left Behind is underfunded by about $42bn.

fred

Posted by: fred | Aug 28, 2006 11:46:43 AM

I totally agree with the post.

There is also the "disappearance" of the middle space between the "top" and the "working stiffs"... generally sending even more people into second category.

And I cannot stop wondering why is it that the "top" category is not worrying about the economic polarization. Why are they so incredibly defensive in such an myopic way... as if not understanding that they are the ones that need a stable (much more integrated) society if they want to preserve their own way of life in the long-term. They have much more to loose. What is so "foreign" and difficult to understand about the Scandinavian models of prosperity? Sweden has about the same number of billionaires per capita as the US. Is it that the Swedish "top" are smarter that our own bunch?

One more thing... it will be interesting (to me at least) how many comments will this post generate. My bet is - not much. I hope I am wrong.

Posted by: Emil Sotirov | Aug 28, 2006 11:55:30 AM

Fred,

Thanks for the response. Sherrod should speak with more teachers because letting them teach and giving NCLB more credibility via fully funding are pretty mutually exclusive. There jobs are on the line as an entire year's worth of work becomes boiled down to the scores of one test.

And what does fully funded mean exactly? It's still a relatively new bill; just because Bush originally gave a higher number and later gave a smaller number doesn't mean it needs more and has actually raised taxes on the state level to comply with its requirements.

Making the entire process even more silly is the fact that education has always been a traditional state function. Part of the 1994 Republican Contract with America was the elimination of the Carter-era federal Department of Education and now here comes Bush expanding the federal government's role. Aren't conservatives traditionally for more local control in education? No wonder Ted Kennedy jumped all over this.

Posted by: Josh | Aug 28, 2006 11:59:41 AM

Click here... and browse... for a "feel" of the current life of the "working stiffs."

Posted by: Emil Sotirov | Aug 28, 2006 12:15:09 PM

great post.

i agree with you regarding the problem: the current inequity in the U.S. is horrible. but the hard question is how are we going to fix it?

in the NYT article you cited, the most insightful comment was this:

“If I had to sum it up,” said Jared Bernstein, a senior economist at the institute, “it comes down to bargaining power and the lack of ability of many in the work force to claim their fair share of growth.”

globalization has eroded the bargaining power of the middle class. none of the changes considered by politicans of any stripe can really effect this fundamental dynamic in any significant way (without seriosly damaging the incentives critical to our economy).

the most insightful thinking (though also the most pessimistic) in this area that i've come upon lately is The Long Emergency by James Kunstler. the book shows how deeply every facet of our socitey is tied into the bargin we made with oil and cheap, overseas labor. it also shows, however, how once the fossil fuel platform that enables globablization is gone--sooner than we think--a new localism will be ushered in, along with a host of other challenges in the transition.

Posted by: Toby Murdock | Aug 28, 2006 12:33:28 PM

In reference to the comments by Josh:

Josh:

No Child Left Behind was written by no other than Senator Kennedy. Several years ago, Bush tried to reach out to the other side of the aisle and worked with Kennedy who wrote the No Child Left Behind bill.

One thing about politics. Facts seem to get left behind in favor of passion. In these times more than ever, we need to keep our heads on straight.

Examples:
1. Name 2 Presidents that suspended Freedom of the Press during war time?

A: Franklin Delano Roosevelt (Democrat)
A: Abraham Lincoln (Republican)

2. Which President has authorized the most money to Africa to combat AIDS?
A: George Bush (Republican)

3. Name the Terrorist group that killed the most Americans in terrorist attacks before 9/11?
A: Hizbollah - Hizbollah has killed the most Americans in terrist attacks prior to 9/11.

4. Name the legislation that authorizes payments to families of victims of 9/11?
A: The Patriot Act - Part of the Patriot Act authorizes payments to comensate victim families of 9/11. What would happen to 3,000 families if the bill was repealed outright?

I'm not trying to play politics here, I'm just pointing out that painting with a broad brush and overlooking important facts will hurt your cause rather than help it.

Posted by: Jim Eiden | Aug 28, 2006 12:51:31 PM

I'm tired of pendulum swings and of people who are so invested in their side of the swing that they can't see where their ideology falls apart in real life.

In an economy where people are paid according to the level of commoditization of their job/skill, what amount of risk they are willing to take, and who they know, how do you fix this problem?

In your own thinking about how to "fix" this problem, would you ever give consideration to establishing a flat rate tax system? For example, would you ever consider the ideas presented in The Fair Tax Book?

Posted by: Sean Winstead | Aug 28, 2006 12:55:29 PM

The irony is that New York and California, which benefit from globalization, are blue states.

The Kansases and Kentucky's where everyone ends up working at a Wal-mart (not that there's anything wrong with that) are red states.

When the change comes it will make '68 look like the summer of love. I suspect that like in '68 the people who pay the price won't be the ones responsible for the mess.

Posted by: curmudgeonly troll | Aug 28, 2006 1:07:24 PM

Fred, I appreciate the fact you will post your political opinion, when it might be at odds with your investors and entreprenuers. (As I write that, I notice the rootworms widget showing your most recent searches. You've got to be the most open VC out there.) Keep it up.

Posted by: steve odom | Aug 28, 2006 1:20:57 PM

Your opening paragraph definitely displays your political bias and of course being a liberal, you provide no logic, facts or analysis for your conclusions (I guess they are supposed to be merely self-evident). It is not clear at all that we cannot win in Iraq; the only defeat we will suffer is that which we bring on ourselves for failing to stand firm. Do you think that if we just leave that all of our problems will be solved?

As far as the spying nonsense goes, the program simply involves listening to phone calls from someone in the US to known or suspected terrorists outside the US. We would have to be stupid not to be doing this. Ditto for the anonymous telephone records database.

To say that abortion is about a woman's "right to control her body" is the most ridiculous and absurd argument put out by the left. So, you can kill a baby one second before birth (because a woman has a "right to contorl her own body"), but one second after birth it's murder? Does that make sense to anyone? If you think that argument is ridiculous then you tell me at what point in the pregnancy the fetus becomes a baby so that it is "okay" to kill the fetus prior to that point and give me a good argument based on facts, logic and sound medicine, not left-wing rhetoric, as to why you are correct.

Mind you, I am not religious and I grew up being "pro-choice"--probably because my parents are liberals and the mainstream media paints anyone who believes otherwise as "radical" or "extreme". I am simply the father of a 2 1/2 year old boy who has really thought through the reality of pregnancy and what it means and applied a little commen sense to reach a conclusion that abortion is morally wrong.

As to the economic argument you make, I have to say that I am continually astounded that the vast majority of venture capitalists seem to be liberals. The VC industry is one of the most cut-throat examples of raw capitalism in action (I have first-hand knowledge of the first and second statements as I work in the VC industry from the legal side every day). You know that you cannot just give a worker "a larger share of the pie" and not expect there to be dramatic economic consequences. The market sets labor rates, nothing else. And in a global marketplace, raising the cost of American labor through some arbitrary fix will only mean fewer jobs in the us and will make it more difficult for US companies to compete with foreign companies. I am sure you know this as I would hazard to guess that more than one of your portfolio companies have operations in India or China or perhaps Eastern Europe. Why do they do this? Because they can get labor cheaper. As is typically the case with these sorts of arguments, the proponent talks about needing "change" without specifying what that means. How would you, Fred Wilson, propose to change the laws of economics to "fix" this "problem"?

I so often hear rish liberals make these sorts of arguments. You probably thinking raising taxes on "the rich" is a good idea also? The problem is, the way liberals define rich is anyone making six figures a year. The sort of tax policy hurts the upwardly mobile middle class whose primary source of income is their wage earlings, which of course are taxed at the highest rates. The real "rich", people like you, John Kerry, the Kennedys, George Soros, etc. have the vast bulk of their wealth invested in capital assets, which are not taxed until sold and then at a much lower rate, or in assets that product tax-free income, like municipal bonds. The real effect of this sort of tax policy is to keep the middle class down and allow the rich to stay rich.

I grew up very poor, worked my way through college and law school, often working two jobs in the Summer to pay for schoole expense during the year. I grew with and still have many friends who are "working stiffs". My observation is that many of these "working stiffs" make bad choices in life and are not willing to work hard enough to get what they want. Other simply do not want the responsibility that goes along with management-related higher paying jobs.

Posted by: jgalt1968 | Aug 28, 2006 1:29:37 PM

Nice comment jgalt1968. I have always found the magic wand abortion argument particularly stupid. I mean, who is standing on more fixed logical ground, those who believe life begins at conception or those who believe it begins when mommy waves her magic wand and deems it so? Ridiculous.

Libs are all too anxious to use science to advocate dumbing down the US economy by a few hundred billion dollars in response to the spectre of global warming, but throw it out the window in the abortion debate.

Posted by: Derek | Aug 28, 2006 1:58:16 PM

Jim,

I am not exactly sure what your point is or what important facts that I have overlooked.

If it was mostly Kennedy's bad idea, why didn't Bush veto the bill? They were both complicit in NCLB's passage. The doctrines of checks and balances and separation of powers dictates that more than one branch of government is ultimately responsible for the passage of legislation.

My point is that Republicans have always been opposed to this type of stuff (giving the federal government a larger role in traditional state functions). Democrats, on the contrary, have not.

Posted by: Josh | Aug 28, 2006 2:14:30 PM

Does this sound familiar Josh?

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

Posted by: Derek | Aug 28, 2006 2:35:21 PM

Derek,

That sounds very familiar (the 10th Amendment) and is the justification for the states assuming the education policy in this country. So why is there a federal Department of Education and why is the Congress passing laws that effect this paradigm (such as NCLB)?

Posted by: Josh | Aug 28, 2006 2:41:15 PM

Thanks Derek. I have to point out one other fear-mongering argument that you and the rest of the left make, Fred. The whole argument about abortion at the federal level is not about threatening "to deny women the right to control their own bodies". Your statement implies that if the Supreme Court were to overturn Roe v. Wade, abortion would suddenly become illegal. That is not true. All it means is that each state would be free to regulate abortion according to how state legislatures (and indirectly the state's cirizens) see fit. It's called state's rights and its a doctrine that goes back to the founding of our country. The reality is, if Roe v. Wade were overturned, there would probably be a handful of states that outlaw abortion, a handful that allow it in almost all circumstances, and the rest would fall somewhere in between. Abortion would be available to those who want it, possibly with a little travel required for those who live in a state that outlaws it.

Posted by: jgalt1968 | Aug 28, 2006 2:46:00 PM

Derek:

You just proved my point.

"My point is that Republicans have always been opposed to this type of stuff (giving the federal government a larger role in traditional state functions). Democrats, on the contrary, have not."

No they haven't. You are generalizing too much.

1. National Healthcare was first introduced by a Republican (Nixon to be exact).

2. National Parks system was created by a Republican (Roosevelt - Teddy that is).

3. Roosevelt's (Teddy) cracking down on the Robber-Baron's such as JP Morgan, Rockefeller, and Vanderbilt which scaled back the over-reaching power of big business has ripple effects that we see even to this day.

4. Eisenhower sent the 101st Airborne to Little Rock Arkansas, a Democratic State, so African-American Children could attend school. That is clearly interfering in State affairs.

But Kennedy also sent troops to enforce desegregation.

As I said before, over-generalizing can mess you up. This country and our citizens would be a lot better off if we stuck to the facts.

Posted by: Jim Eiden | Aug 28, 2006 3:42:23 PM

Russell Roberts applies an economist's eye to this article in his post Catering to ignorance.

Posted by: Mike | Aug 28, 2006 3:50:43 PM

I'm the one doing the overgeneralizing here?

So you believe that the Republican Party of 2001-2006 (Rove, Cheney, Bush, DeLay, etc.) is the same now on these policy positions as it was in the late 1960s-early 70's (Nixon), the 1950's (Eisenhower), or the 1900's (TR)?

Neither Barry Goldwater nor Ronald Reagan would recognize their fellow partisans today. Let's try to place things into better context.

Posted by: Josh | Aug 28, 2006 3:55:47 PM

Fred, thank you for this post.

It really meant a lot for me to read this today.

I really hope you are right when you say:
"I have said before on this blog that the political pendulum swings in both directions."

I was crushed for a week after your last elections, I don't think I can take that again... and I live in Canada.

Posted by: brian | Aug 28, 2006 3:57:41 PM

Pete Townshend said it best: "Meet the new boss, same as the old boss"...the coda in "Won't Get Fooled Again".

We'll be fighting in the streets
With our children at our feet
And the morals that they worship will be gone
And the men who spurred us on
Sit in judgement of all wrong
They decide and the shotgun sings the song

I'll tip my hat to the new constitution
Take a bow for the new revolution
Smile and grin at the change all around
Pick up my guitar and play
Just like yesterday
Then I'll get on my knees and pray
We don't get fooled again

Meet the new boss
Same as the old boss

Posted by: Chris Gilbey | Aug 28, 2006 4:19:22 PM

At least there's one good things about Bush being in office - there's a really quick proxy to determine someone's intelligence.

Right away if someone despises Bush you know they are relatively smart. If they support Bush you know they are a) dumb/ignorant (potentially racist) white trash, or b) a christian fundamentalist.

Posted by: OneGoodThing | Aug 28, 2006 4:21:33 PM

140,000 square miles. Bush designated 140,000 miles of Hawaiian wilderness and ocean islands as a National monument. Not a National Park, but a monument. This means it is off limits to the public and is only open for research. Sounds like he is following in the footsteps of Roosevelt in that respect.

But too often facts get overlooked for the sake of political agenda.

Bush allocated the most money ever to combat AIDS in Africa. More than any other President.

But too often facts get overlooked.

Fact - Bush had very close ties to Enron.

Fact - Hillary Clinton was on the board of directors for Wal-Mart

Yep, I do believe the GOP is still the party of Lincoln.

In fact, Time magazine did an entire issue dedicated to the legacy of Teddy Roosevelt. Rove wrote a piece in Time magazine of what Roosevelt means to the current Republican Party and how they are still influenced by him.

Just like I believe the Democratic Party is still the party of Truman, Kennedy, Clinton, Carter, Johnson, Gore, etc. Although, I am worried about the Democratic Party. It was not right the way they turned against Lieberman for having a different opinion.

90% - Lieberman voted along party lines 90% of the time. A former VP Candidate now an independent.

What I am saying is we have to get beyond the generalizations, the partisanship, the name calling and stick with the facts. That is going to win you voters; the facts are going to be the foundation for change.

And all too often the facts get ignored.

Have you ever heard of iwpr.net? Institute for War & Peace Reporting. Based out of the UK, it is a non-profit, non-partisan group that goes into war torn countries and teaches people how to become objective journalists. You can subscribe to their free reports. They have reporting from the natives, by the natives from these regions. Some reports are positive, some are negative.

But it cuts through all the partisanship and you read exactly what is going on in these regions from the people who live there. There is a report from Afghanistan, another from Iraq, the Balkans, African, and the Caucuses.

Did you know that there is still simmering tensions in the Balkans? Kosovo? That it could erupt at any time and the US will have troops there for a long time? You never hear about that.

Did you know Iraqi's like to race cars? Don't be surprised if an Iraqi becomes a NASCAR driver one day.

Did you know that Zimbabwe is in a serious crisis after Mugabe ruined the country? The breadbasket of Africa now has to rely on the UN for food? Much of this food winds up on the black market. Meanwhile the Zimbabwe people are starving.

Did you know Jesse Jackson went to Syria to influence the release of the Fox journalists held in Gaza? They were released as he got there. Meanwhile a Nobel Prize peace winner has been held under house arrest in Burma for several years now. Burma is one of the most repressive regimes in the whole world. No one ever talks about it. Why doesn’t Jesse go to Burma?

Pay attention to the facts and the big picture.

Posted by: Jim Eiden | Aug 28, 2006 4:54:47 PM

A VC

Musings of a VC in NYC