Why California is Not too Big to Fail

California is big, very big. If it were a separate country, it would be one of the largest economies in the world: somewhere between the 8th and 10th largest, depending on the year and source you look at. In 2007, California’s gross state product was $1.812 trillion, number one in the country. In terms of population, California is the largest state in the U.S. with about 38 million people, or about one-eighth of total U.S. population. California is also a pretty large employer: in 2009, the state had, on its direct payroll, 244,061 active employees. By these measures, California is certainly “bigger” than, say, AIG, which has received something like $173 billion in US taxpayer money. Hundreds of other banks, insurers and even a few manufacturers (all much smaller than California) have received bailout funds as well, ranging from a few million dollars to tens of billions of dollars. Despite California’s immense size, however, there is almost no prospect that it will receive federal “bailout” funds to help it out of its current budget mess—a deficit that exceeds $26 billion (really, pocket change in light of the amount of money AIG has received).

All of this raises the obvious question, “Is California too big to fail?” This is a question many pundits have also asked and answered: most answer that California, in fact, is not too big to fail. I think they are right, but they are asking the wrong question. The right question should focus more on the “power” of California as a state. And, as an economic and political actor, California has precious little power. It is important at this point, however, to take a small step back. When I speak of “power” I do not mean the power that comes from just being big. Indeed, that’s a small aspect of power, especially from the standpoint of political economy. Instead, when I speak of power, I’m borrowing from the ideas of Susan Strange, who talked about structural power and, more specifically, four dimensions of structural power: security, production, finance, and knowledge. I don’t have time to discuss all these dimensions here (to learn more, take my POLS/ECON 426 course), so let me just say that in terms of structural power, California is quite small.

As an economic and political actor, for example, California doesn’t have much productive power in its own right: “California” doesn’t produce things in the way that Chrysler or GM do (two economic actors that received bailouts); rather, it’s the companies that are based in California that produce things. Similarly, while banks and large financial institutions have power because they control “credit” (the lifeblood of an economy), California’s financial power is very limited. The state does provide security, which is why police, prison system, and the courts are much more protected than other players in the state, but this isn’t enough to protect the budget as a whole. Finally, the state does have a university system, which produces “knowledge,” and this is not unimportant: but “knowledge” comes from a wide variety of sources, both inside and outside of California, so even here the state is a relatively small player.

Without structural power, the state is basically at the mercy of larger forces. This is why California is not too big to fail.

America: A Culture of Violence?

I came across the following story in the National Briefings section of the LA Times on May 9, 2009:

"Four off-roaders shot; couple held A couple has been accused of opening fire and wounding four people, including a 7-year-old boy and a 5-year-old girl, who they mistakenly thought were trespassing on their property near Dayton. The victims, who were off-roading near a residential area about 40 miles northeast of Houston, were struck with shotgun pellets late Thursday after stopping their vehicles near the Trinity River so the children could go to the bathroom, said Liberty County Chief Deputy Ken DeFoor. Police said Sheila Muhs, 45, fired once with a 12-gauge shotgun, then handed it to her husband, Gale, also 45. DeFoor said Sheila Muhs called 911 and told the dispatcher, 'They're out here tearing up the levee, so I shot them.'

The Muhs are charged with aggravated assault with a deadly weapon. Donald Coffey Jr., 7, was in critical condition after being shot in the head. Patrick Cammack, a friend of the boy's father who was driving a separate vehicle, was also shot in the head and in critical condition."

The story--at an admittedly anecdotal level--helps to support the view that there is something unusual about American culture. It is a culture where at least some otherwise normal people (but probably not an inconsequential number) believe that it is appropriate to shoot at a family, including two small children, because they were "tearing up a levee" (instead of, say, calling the police or simply yelling at them to stop).

Culturalists might tell us that such actions cannot be considered rational, because they are fundamentally based on a particular process of enculturation that shapes people's views and perceptions of what is appropriate or inappropriate behavior. Does this prove the cultural perspective? Certainly not. But if we could find that such attitudes and perceptions shape the behavior of a significant part of the American population (especially in relation to other societies), we may be on to something.

The Double Movement and Foreign Workers

In my course on International Political Economy, I discuss the ideas of Karl Polanyi, who argued that one consequence of the market was the commodification of labor. This refers to the treatment of labor as if it were the same as any other factor of production. In the U.S., western Europe and many other "advanced" industrialized nations, of course, (domestic) labor has long been "de-commodified," at least to a certain extent. But this has not necessarily been true of foreign migrant labor.

One reason for this is obvious: foreign migrant workers are viewed as unwanted or barely tolerable interlopers; they are certainly not citizens, and therefore, most people do not believe that they are deserving of any rights whatsoever. As a result, there are few objections when foreign migrant workers are, in fact, treated as commodities--as nothing more than an undifferentiated "product" that should, rightfully, be subject to the laws of supply and demand. In the Marxist view, people become commodified when their value is determined solely "exchange-value" as defined by money (a special type of commodity).

All of this was brought to mind after I read a article titled, "Sri Lanka: Unions Strike Landmark Deal to Protect Migrant Workers." The article discussed a recent agreement between Sri Lanka on the one hand (which has sent more than 1.6 million workers to the Middle East, Asia and Europe) and Bahrain, Jordan and Kuwait on the other hand. The agreement gives Sri Lankan workers "internationally recognized labor rights," the implementation of which will be ensured by local unions in the receiving countries. The new agreement is based on a model developed under the aegis of the International Labour Organisation (ILO) and its Bureau for Workers’ Activities. It is also the first of its kind covering Asian migrant workers in Arab states

One sentence in the article stood out: "A key clause in the agreement is that, in line with ILO conventions, labourers will not be treated as a ‘commodity.'"

This is, I think, an important development and also one that is of relevance to American workers. For a significant aspect of the global political economy is the gap between the different segments of the global workforce. The larger that gap, the more power global corporations have in setting wage rates; the smaller the gap, the more power workers have.

Is this a good or bad thing? I'll leave that up to you to decide. But, one critical point to remember is that we do live in a world where power matters. Students of political economy need to keep this firmly in mind.

Twins, Aging, and the Logic of the MSS Design

One useful way to get a sense of the logic upon which the MSS--"most similar system--design is based is to consider differences between identical twins. Obviously, twins share the widest range of similarities that two human beings (units of analyses; "systems") can share: in this regard, they are almost perfect examples of two "most similar systems." Yet, for the most part, twins do not develop exactly alike: over time, differences invariably crop up. These differences--such as "aging"--can be identified as dependent variables: an outcome or phenomenon that is the product of some other factor or set of factors. With this in mind, consider the picture of two "identical" twins (above), one of whom appears much older than the other. The difference tells us that something caused one twin to age faster than the other. Thus, the task of the researcher is to focus on finding out what other differences may have caused or resulted in one twin appearing older than the other. These other differences are the independent variable(s). The task, to put it in slightly different terms, is to find key differences in a sea of similarities. Click here to read an article in Time Magazine about a study on identical twins.

Obama: The First Asian-American President

Back in July 2008, Jeff Yang wrote a column titled, "Could Obama be the first Asian American president?" Yang, of course, was building from the well worked notion of Clinton as the first Black president. As Toni Morrison put it in 1998:

White skin notwithstanding, this [Clinton] is our first black president. Blacker than any actual black person who could ever be elected in our children's lifetime. After all, he displays almost every trope of blackness: single-parent household, born poor, working-class, saxophone-playing, McDonald's-and-junk-food-loving boy from Arkansas.

The jist of Morrison's argument (and of Yang's as well), is that racial or ethnic identity is not determined solely (or even mostly) by skin color or some other genetic characteristic, but instead is cultural. There is, moreover, a clear implication in this view: cultural values influence our outlook, attitudes, and behavior. From this perspective, Obama almost certainly is our first Asian-American president. This is not to say, I should emphasize, that Obama's other identities--African-

American, multiracial, American, and so on--are less important or less valid, for we all have multiple identities. But it is to say that Obama, in a very meaningful and even profound way, represents Asian-Americans.

From a practical political perspective, this means he recognizes that Asian-Americans are an integral part of the United States. This is reflected in his refusal to treat Asian Americans as mere tokens in his administration. Indeed, he is the first president to nominate more than a single Asian-American to a cabinet post. To date, in fact, he has nominated three: Eric Shinseki for Secretary of Veteran Affairs, Steven Chu for Secretary of Energy, and, most recently, Gary Locke for Secretary of Commerce. In addition, the most senior members of his congressional team (when he was still serving as a senator) are Asian-American: his Senate chief of staff was Pete Rouse, whose mother is Japanese American, and his legislative director was Chris Lu, whose parents come from China (Lu is now Cabinet Secretary and Rouse is now a Senior Adviser).

Most likely, Obama did not necessarily "see" these individuals as Asian-Americans; but, this too, is part of the point: until Obama, Asian Americans, no matter how qualified, were largely invisible. They no longer are.

Addendum: Obama's recent nomination of Harold Hongju Koh as the State Department's top legal advisor continues the president's pattern of recognizing Asian-Americans.

States or Markets? The Problem with Binary Thinking

While teaching International Political Economy this quarter (after a rather long hiatus) and watching John Stossel's interview of Arriana Huffington last night on ABC's 20/20, it struck me how binary thinking really does make otherwise intelligent people “stupid.” Stossel, who I've written about before, is similar to many pundits: he sees the world in stark black- and-white, binary or dichotomous terms. In particular, to Stossel and others, if the government is not the solution (and to Stossel, it's clearly not the solution) it must be the problem. There's no middle ground, no room for a more nuanced understanding of the role that governments (or states) must play in the modern world. It is not surprising, then, that Stossel extols the virtues of the market: without exaggeration, he believes that only the market (or, perhaps more accurately, the logic of the market) can solve the most pressing problems of modern society. If the educational system is “broken,” it must be the government's fault and only market-based competition can fix it. If the welfare system doesn't work, again, it's the government's fault and the only solution is to subject “welfare recipients” to the efficient winds of market forces.

What Stossel and others of his ilk fail to see, however, is that modern states and markets exist in a mutually dependent, even co-dependent relationship. State power, at the most general level, allows markets to function (consider what would happen if there was no political authority capable of enforcing private property rights and contracts). Even more, states are often necessary to create and maintain “free” markets: consider what might happen if companies had no restraint on their exercise of their power. Many, if they could, would do everything possible to eliminate-permanently-their rivals (even Adam Smith believed this) to snuff out competition so they could reap monopolistic profits. In an era of mega-corporations, which can figuratively reach around the world, only states can stand in their way. In a world populated by other states, moreover, no private actor would be able to create and sustain a framework of international or global free trade.

Once we recognize that states are part-and-parcel of the capitalist process, it becomes harder to sustain the argument that they are, as Stossel implies, antithetical to markets and competition. And, if one cannot sustain that argument, then the related argument that state action and power is the problem begins to crumble.

It is also important to understand that states, at least in principle, operate according to a different logic than firms, and that this difference is something we all want. Capitalist firms, by definition, are motivated by profit. The profit motive is important and it leads to tremendous economic results, of this there is no doubt. A (democratic) state, however, is ostensibly motivated by a much broader set of goals: a state must ensure the survival and security of the country (both internal and external), it must be concerned with issues of equity, justice, and, indeed, social welfare (broadly defined), and it must be concerned with creating and maintaining public goods (a livable environment, clean water, transportation systems, etc.). (An aside: Marxists are less sanguine about the motivations of states; they believe that states represent the interests of capital to begin with. This is worthwhile position to explore, as I do in my classes, but for the sake of argument, let us assume that states can also act in the interest of the population at large.)

We know that capitalism, even or especially when it is operating smoothly, produces unemployment and poverty and all sorts of socially destructive results-at least in the short-run. Market actors have no incentive to protect workers and others since doing so undermines their profits. This is perhaps the best reason we don't want “national defense” privatized: it's really an oxymoron, since “privatization” implies exclusive (i.e., private) interests, while “national” implies collective interests. Really, does Stossel believe that we should turn over national defense to Blackwater?

Herein lies another useful point: The American state (or government) is very good, very effective at providing national defense. We hear time and time again, that the U.S. has the best military in the world. Yet, it is a monopoly (i.e. no actor, private or otherwise, can compete against the U.S. government in providing military defense). Yet, according to Stossel, state-based monopolies never work. Now, I can already hear Stossel and others saying, “Yes, but the U.S. government relies on private enterprise to provide defense, and there is competition among private firms to manufacturer weapons.” Fair enough. But this makes my point: as in many, many areas, governments and private enterprise (the logic of the state and the logic of the market) go hand-in-hand. They are not binary opposites, but mutually reinforcing.

This is not, I should emphasize, meant to be a paean to the state (I am, in fact, skeptical of both the state and market). Rather, I simply want to make the point that binary, either-or thinking leads to simplistic, even dangerous conclusions.

Cheney and the Limits of Realism

Realism tells us that individual- and state-level factors--e.g., the interests of major economic actors, the perceptions and cognitive processes of individual political leaders--are largely irrelevant to understanding signifcant foreign policy decisions. This short interview with Dick Cheney, however, gives us an indication of the limits of realism. Cheney's analysis of the reasons against removing Saddam Hussein from power after the first Guf War are a textbook example of realist logic: the US had no compelling national interest in removing a dangerous dictator largely because the strategic costs of doing so outweighed the benefits. That is, without support from Arab allies, without a reliable method of maintaining stability in the region and political coherence within Iraq (which would lead to bigger problems), and so on, it simply made no "strategic" sense for the US to go further. Of course, in 2003 (and even before), Cheney's tune changed completely. Yet, and this is the important point, the strategic environment of decision-making remained largely the same. In 2003, there was still no support from Arab or Islamic allies, there was still no viable political alternative to the Baathist regime, and there was even less support from the international community at large, including the UN and major powers (France, Russia and China). As we know now, too, there was no imminent danger from the Hussein regime itself--that is, there were no weapons of mass destruction. (Indeed, even if Hussein had WMDs, from a strict realist perspective, this would not have mattered since Hussein could not have used the weapons against the US without fear of total obliteration--a point that Condoleezza Rice made quite clearly when she, too, was still espousing realist principles.)

Despite all this, the United States launched a "pre-emptive" invasion to remove Hussein from power. It is clear, to repeat, that the international strategic environment did not necessitate this action, as realism claims. Instead, the key motivating factors almost certainly had to be domestic in nature. Whether these were economic/class interests or products of individual needs, interests or perception is, of course, important. But, the larger theoretical point is simply that realism cannot adequately explain this extraordinary foreign policy decision. To put it bluntly, this is a major flaw in the realist framework, and one that students of international relations cannot afford to ignore.

Imagine there's no Heaven

It's easy if you try

No hell below us

Above us only sky

Imagine all the people

Living for today

Imagine there's no countries

It isn't hard to do

Nothing to kill or die for

And no religion too

Imagine all the people

Living life in peace.

John Lennon's "Imagine" (1971), while immensely popular, is considered idealistic at best; indeed, even people who embrace the message of "Imagine" may think that it is naively utopian. Certainly, when one looks at the hard "reality" of the world we live in--especially the international world--it's not hard to concur. From a different perspective, however, Lennon's "utopianism" reflects the very simple belief that "ideas" matter--that ideas can and do have a profound impact on the world in which we live. Surprisingly, perhaps, this is a belief shared by many hard-headed, no-nonsense neo-conservatives. Neo-conservatives, however, believe that only hard power can be used to reshape reality--a point I discuss in my entry on the Bush Administration's View of Reality" below.

But Lennon, too, is talking about power: he is talking about the power of millions, tens of millions, even hundreds of millions of people imagining a more peaceful world. Imaginiing a world in which international borders and religious cleavages did not exist. Can such thing simply be wished away? Well, probably not. But one point is that international borders and religions are, in essence, little more than ideas. Yes, it is true that borders have an objective existence, yet the significance we attach to borders exists within our heads. That is, borders have meaning through the ideas of nationalism or citizenship. Certainly, this is even clearer in the case of religion: religion is simply a set of beliefs and values that exists within our collective heads. To change the world, then, requires changing our ideas about how the world should work or how it should be organized.

On this point, it worth remembering that democracy and individual freedom are ideas. The Bush administration believes, we are told, deeply in the idea and power of democracy. The Bush administration believes that spreading democracy will bring a fundamental change to international relations, and in particular, will bring peace to the Middle East. Is Bush a utopian? Perhaps. But, if he is, he has a lot of company.

The issue, needless to say, is much, much more complex than what I presented here. Suffice it to say, then, that we--as students of political science--need to consider seriously the significance of ideas in the "real world." Do ideas have power? If so, how is this power manifested and under what conditions? Can ideas--shared among whole populations--reshape the world in a fundamental way? I am not offering an answer here, only an "idea" to ponder.

Bush and Reality

A few years back an unnamed Bush official told reporter Ron Suskind, "We're an empire now, and when we act, we create our own reality. And while you're studying that reality--judiciously, as you will--we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors...and you, all of you, will be left to just study what we do." Now, I know it's a bit late to be commenting on this statement (first reported in 2005), but I was reminded of it when I heard and wrote about Ann Coulter's quote, "I'm more of a man than any liberal." Ironically, both quotes reflect a post modernist or reflectivist perspective, which understands reality as socially constructed. I say ironically because most conservatives see post modernism as mushy, leftist thinking associated with such strange foreigners (even worse, Frenchmen!) as Foucault, Derrida, and Lyotard.

Yet, from a post modern or reflectivist perspective, the idea that powerful governments--even more, hegemonic powers--create their own realities is not at all far-fetched. Indeed, in many respects, this is the starting point of analysis, a fundamental assumption. Certaiinly, as we look at the what the Bush administration has done--and what it is doing--it is not difficult to conclude that it is creating and recreating realities, some of which, to be sure, are very tenuous. (But, in a post modern world, we have to accept the "truth" that reality is not a fixed, objective fact.) Today, for example, the new reality is that we live in an inherently dangerous world populated by irrational terrorists who "hate freedom." In this reality, we have to fight the terrorists "over there" so that they cannot bring death and destruction "here." In this new reality, moreover, the United States is largely, if not entirely, an innocent target; the US--even as an empire--is certainly not responsible for creating the conditions that breed terrorists and terrorism. Of course, not everyone accepts this reality, but perhaps this is because the power of the American empire is under seige.

In sum, the idea that the Bush administration has the literal capacity to reshape reality should not be dismissed out of hand. For critics of the Bush administration, too, it is a lesson to take to heart. For while the present administration is not producing a more peaceful, more socially just world, one could argue that it possesses capaciity to do so. Social constructivists (such as Alexander Wendt), in fact, would argue that powerful states--especially acting under the influence of a hegemonic power--can, through their actions and understanding, construct a peaceful world order.

Ann Coulter: A Post-Modern Feminist?

In an interview with Bill O'Reilly, Ann Coulter pronounced, "I'm more of a man than any liberal." Now, I'm sure Coulter would be the last women in the world to claim allegiance to feminist post-modernism, but her pithy statement reflects beautifully a key concept in post-modernist thought. This thought is the idea that gender is a socially constructed concept. What this means, in more simple terms, is that what we think of as "masculine" and "feminine"--as male and female--has as much do with societal norms and values as it does with supposedly fixed biological categories. Ann Coulter is "more of man than any liberal" because, supposedly, she personifies masculine traits: she's aggessive, tough, rational, and so on. She is telling us that women who embrace such traits are, for all intents and purposes, men. On the other hand, men who adopt supposedly feminine traits cease being "true men" and become something else, something less than men.

Note, though, a clear implication of Coulter's statement, which is that maleness is "naturally" superior to femaleness, that feminine traits are essentially undesirable and inferior. So, Coulter, after all, isn't a feminist, nor is she a post-modernist. For she essentializes "maleness": she tells us that maleness can only be defined, understood or interpreted as a binary opposition to femaleness and, that by definition, maleness is superior to femaleness, at least in the world of politics.