Tom Ferguson

Roosevelt Institute Senior Fellow

Recent Posts by Tom Ferguson

  • Oil-Soaked Politics: Secret U.K. Docs on Iraq

    Apr 19, 2011Tom Ferguson

    This just in: big oil companies and government ministers had discussions one year before invasion.

    This just in: big oil companies and government ministers had discussions one year before invasion.

    Revolution in the Middle East, nuclear meltdown in Japan, war in Libya, the U.S. budget crisis, the looming problems of the Eurozone -- some days it's all just too much. But today there's something no one can afford to ignore: The Independent, one of Britain's leading newspapers, broke a must-read story. In a nutshell, the story buries forever all claims that the US, the UK, and other governments did not have oil on their minds as they prepared to invade Iraq.

    The story reports on a forthcoming book that draws on more than a thousand secret government documents. The excerpts the paper prints detailing meetings between the UK government and British oil companies in the run up to the war are devastating. They demonstrate that all the denials in London and Washington that policymakers were not concerned about oil as they invaded were as false as the famous cover story about weapons of mass destruction.

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    The passages quoted in The Independent show that all the governments were negotiating over rights to oil long before the invasion and that they were working closely with their companies. But it is impossible from a single newspaper article to assess the full extent of oil's role in precipitating the invasion of Iraq. The book, obviously, will need a careful review; presumably the author realizes that he will need to make the materials he drew upon available on some website. But enough has already been revealed to make a compelling case for a Congressional committee to demand that all the relevant U.S. government documents now be revealed. Ever since a court ordered the release of some government documents in response to a suit Judicial Watch filed under the Freedom of Information Act, we have known that Dick Cheney's Energy Task Force was reviewing documents on Iraqi oil - well before the attack on 9/11. See here, for example.

    It's time the rest of the story came out -- not because it is history, but because it is not. The U.S. is still in Iraq. Major decisions about the continuing presence of U.S. troops there loom just ahead. The major U.S. media have done little or nothing to investigate the story, though journalists working the U.K., notably Greg Palast, produced excellent reports on the subject. The endless chain of books about the Green Zone and corruption has not really gotten to the heart of the matter. As the U.S. deliberates about its next steps in Iraq, it is time somebody does.

    Thomas Ferguson is Senior Fellow at the Roosevelt Institute and Professor of Political Science at the University of Massachusetts, Boston. He is the author of many books and articles, including Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems.

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  • Conversation With Thomas Ferguson: How Political Money Drives Deadlock

    Apr 12, 2011Tom FergusonLynn Parramore

    man-on-money-150Lynn Parramore caught up with Roosevelt Institute Senior Fellow Thomas Ferguson at the annual INET conference in Bretton Woods.

    man-on-money-150Lynn Parramore caught up with Roosevelt Institute Senior Fellow Thomas Ferguson at the annual INET conference in Bretton Woods. Ferguson, father of the Investment Theory of Politics, explains why polarization has completely gripped Washington -- and why the New Deal is getting rolled back in the process.

    Lynn Parramore: What's polarization in politics and how did it start?

    Thomas Ferguson: Polarization is a sharp intensification of divisions between the major political parties. The tensions between them now run through the entire system, including the Supreme Court and state and local governments. Congressional polarization is the most visible form right now and surely a key link in the whole process. Both national parties have spent enormous amounts of time and money painting each other in the worst possible terms -- to the point that some Republicans have repeatedly cast aspersions on the patriotism of the Democrats.

    The split between the two major parties first widened out in the late ‘70s and early ‘80s. It showed in a sharp increase in the number of votes in Congress along party lines -- that is, votes in which a majority of Democrats opposed a majority of Republicans and vice versa. But notice this, because it is extremely important: While the two parties name call and indeed often stalemate, the center of gravity of the whole political system moves steadily to the right. This is every bit as important as all the public discord and angry rhetoric. Just look, for example, at the current debates on entitlements. In 1954, President Eisenhower famously dismissed critics of Social Security and unemployment compensation as "stupid." Now leaders in both parties are talking about all kinds of big budget cuts, even though many Americans have been out of work for long periods and have watched their savings and the values of their homes sink, while they were forced to bail out the financial sector.

    LP: How does polarization affect what Congress does?

    TF: When you have divided government -- that is, a president of one party with the opposition controlling one or both houses of Congress -- the process of confirming nominations grinds to a halt. And even if you don't have divided government, members of Congress spend a great deal of time posturing. More congressional votes happen that are not meant to actually pass anything, but rather to send signals to outside groups and supporters. For example, Republicans may craft a bill on abortion that has no chance of being signed into law. But introducing it forces everyone to take a stand. This projects hot button divisions beyond the Congress itself to energize outside constituencies. But polarization's most obvious effect is to deadlock the legislative process. Look, for example, at the way the government has come right to the brink of shutting down over the budget or how climate change legislation has been shelved, as every form of compromise falls through. In the Senate, working control now means not a simple majority of 51, but a "super-majority" of 60, as the minority party routinely threatens to filibuster measures it dislikes.

    LP: What's the relationship between political polarization and the media?

    TF: The press powerfully amplifies partisanship. Statistical studies of media content suggest that the language newspapers use to describe politics varies systematically. Their news stories tend to employ the favorite buzzwords of one of the political parties rather more than the other. Some papers, for example, may describe inheritance taxes as "death duties" -- a term favored by Republicans. Others just talk about inheritance taxes.

    What's interesting is that word choice appears to reflect not the mix of voters in the area covered by the newspapers -- that is, their readers -- but the split in political contributions originating in individual media markets. In other words, the language of the papers reflects the terms each side's partisans prefer, with the balance in each market tilting in favor of the locally dominant bloc of political contributors. Campaign contributors are mostly very affluent; what we have here is a top-down process of language imposition. Congress speaks; America listens, whether it likes it or not, as the papers record the discussion in their locally biased way.

    This amplification of polarization in the media, in turn, encourages polarization in Congress. We get a feedback loop running between the media and political institutions.

    LP: Does polarization in Congress and the media increase division in the population?

    TF: The evidence is that people who hold an opinion on one of the handful of hot button issues that the parties debate in public tend to move toward the party that says it agrees with them. But here's the surprise: generally not that many people do this. When they do, they don't usually change their self-labeling. That is, they don't move from thinking of themselves as moderates to considering themselves conservatives, for example.

    LP: So you don't think that culture wars explain polarization?

    TF: No. Almost regardless of where you look, you'll find that changes in public opinion between the 1970s and today are relatively small. On many issues, such as gay rights, the shift among the public has gone towards the left, rather than the right. Even the famous ‘liberal label' problem is not nearly as large as people think. The number of people identifying as liberals has dropped by about 5% from the seventies to now. That hardly indicates a massive change in the way people view themselves politically.

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    LP: Some argue that we have ‘sorting' among the public that leads to polarization. If I'm surrounded by like-minded people, the thinking goes, I become more extreme in my views. Is this really happening?

    TF: The ‘Big Sort' people mostly concede that opinion shifts in the population are not large. So they focus on explaining polarization by looking for some thing or things that shoehorn people into more homogeneous groups that then contend among themselves. The evidence just doesn't support these theories. All the talk about gerrymandering has actually been debunked. There are some stunning cases, but not nearly enough to explain Congressional polarization. And you can simply observe the U.S. Senate: The Senate is about as polarized as the House -- just look at the figures in my INET paper (*see link at the end of this article). Nobody has messed with the boundaries of U.S. states in the last generation. Nor does the obvious fact that Republicans replaced conservative Democrats in the South help very much. Polarization in other areas of the country is very intense; just pointing to all the right wing Republicans from the South and West does not answer the question, given the small changes in popular opinion. It just reframes the question about what really drives this process. It has to be something else.

    LP: And what is that ‘something else'?

    TF: In a word: money. Since the mid '70s, more and more political money has been moving right and center-right. To understand Congressional polarization, though, you have to focus sharply on the crucial moment, which was 1994. That was the second stage of the Reagan Revolution, when Republicans took over both houses of Congress. Notice the key political players then. You have Newt Gingrich, who was organizing the GOP push in the House; Phil Gramm, who headed Senate fund raising for the GOP; and Haley Barbour, who chaired the Republican National Committee. These people weren't 'bowling alone'. They were free market fundamentalists. They wanted to cut taxes, on high brackets especially. They wanted to push deregulation of the financial and telecommunications industries. They wanted to abolish things like the EPA and the Consumer Product Safety Commission and cut back the FDA, the FTC, and just about every other government regulatory agency. The one area where they liked Big Government was defense.

    These anti-government, pro-corporate Republicans broke every record for raising political money. Look at Gingrich and his history in particular. When he started attacking the older Republican leaders in the House as timid and too willing to compromise, money came pouring in. Yes, they supported and allied with evangelical religious groups. But those were always secondary to the main objective, which was to deregulate the economy and roll back the New Deal in all its manifestations.

    LP: How did the 1994 Republican victory affect Congress itself?

    TF: When Gingrich won control of the House, he installed what amounted to a pay-to-play system internally, which forced individual representatives to compete to hold their positions on key committees and leadership posts by raising funds for the party. The effect on the House was far-reaching, because the seniority system was already pretty much dead as a result of reforms in the seventies. The movement to limit the terms of committee chairs also worked in this direction, because it meant that more posts were coming open on a regular basis. What happened was that the entire Congress became money-driven.

    Positions on key committees, leadership posts -- they were all being sold. The money collected then was poured into election campaigns, especially for so-called "open seats," in which no incumbents were running and in doubtful races. The vast spending and noisy campaigns heated up the political atmosphere in and out of Washington, as the media transmitted the messages.

    The Democrats looked at the Republicans' pay-to-play system and basically decided to copy it. They did this instead of mobilizing their old mass constituencies. Today, as my paper documents, both parties are essentially posting prices for influential committee slots and leadership posts.

    The Democrats' decision to emulate the Republicans and follow the money shifts the system's center of gravity to the right, as both parties frantically cultivate investor blocs. The result is the weird political world we live in. Behind the scenes, investor blocs and businesses maneuver for advantages in both parties. The system's center of gravity moves to the right, checked only by the diminishing influence of unions and other mass political groups that retain some resources and influence on the Democrats. You end up with two "money-driven" parties. The parties are not identical, but they have this in common: They cannot possibly campaign only on appeals to investor blocs, so each party reaches out to select public constituencies to scrape together enough votes to win elections, in a sea of public cynicism.

    Polarized politics is money-driven politics and political parties are first of all bank accounts, whatever else they do. More precisely, the current polarization of the system is the direct result of the Republicans' attempt to roll back the New Deal and the way the Democrats responded. I regret to say I don't see much chance that it will abate any time soon. The Obama administration's failure to deliver "real change" has given the Republicans a new lease on life. Less than three years after the financial collapse, which handed the presidency and both houses of Congress to the Democrats on a platter, free market fundamentalism is back. Today Republicans look closer to rolling back the New Deal than they ever have. They are unlikely to see much reason to compromise; especially when the Obama administration, in the middle of trying to raise a billion dollars for the 2012 campaign, declines to press a strong defense of investments in people and regulation, not even financial regulation.

    LP: Will the tsunami of money released by the Citizens United decision make polarization even more intense?

    TF: Alas, the post-Watergate campaign finance reforms have been steadily watered down. The role big money plays in our electoral system was already grotesque before Citizens United, what with "527s," independent expenditures, and other devices for spending without limits. But the Supreme Court's decision sets corporations (and of course, any labor union that still has any resources) free to disgorge funds directly from corporate treasuries to campaigns, as long as the money is spent independently of candidates' own campaigns. Much of this money is likely to be impossible to track in public. But it will find its way into campaigns, raise the stakes, and set off further rounds of campaign spending. It's just going to make the carousel rotate faster. Yes, polarization is likely to persist.

    **Read Ferguson's complete INET paper, delivered April 10 at Bretton Woods: "Legislators Never Bowl Alone: Big Money, Mass Media, and the Polarization of Congress ".

    **And for details on how money impacted the 2010 elections, see Parramore's November interview with Ferguson: "Money and the Midterms: Are the Parties Over?"

    Thomas Ferguson is Senior Fellow at the Roosevelt Institute and Professor of Political Science at the University of Massachusetts, Boston. He is the author of many books and articles, including Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems.

    Lynn Parramore is the editor of New Deal 2.0, Media Fellow at the Roosevelt Institute fellow, co-founder of Recessionwire, and the author of Reading the Sphinx.

    **Follow Lynn Parramore on Twitter at http://www.twitter.com/lynnparramore

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  • Obama's Budget Speaks to Wall Street, Ignores Voters

    Feb 14, 2011Tom Ferguson

    Thomas Ferguson explains how the President's budget is way out of focus.

    President Obama's budget proposal fails to address the real deficit culprits.

    Thomas Ferguson explains how the President's budget is way out of focus.

    President Obama's budget proposal fails to address the real deficit culprits.

    Addressing long-term budget issues requires bringing US health care costs in line with those of other major countries with better records on providing adequate services to their populations. That is not done by fixing inflexible spending limits, but by allowing the government to bargain with Big Pharma over drug prices and making health insurers actually compete. In the long run, we probably need a single-payer system that eliminates all the wasteful duplication in medical forms, advertising, etc, that pass on costs to the consumer. If you also rein in military spending and regulate banks to prevent another financial crisis from wrecking both the economy and the budget again, much of the deficit problem disappears. Then you can admit the truth of what close students of Social Security already know: That there is no problem with that program for decades, if ever.

    The President should have started us down that road today. He didn't. Instead, he's kicking off a race to the bottom with the Republicans that will will wreck America's future and further mystify the public. And don't fool yourself with talk about appeals to "independent voters." Almost no polls ask voters if they would like to tax the wealthy. The one poll that did found 61% opting for that. For the next two years, one number towers over all others: $1 billion. That's what the President's reelection campaign is going to cost. The real audience for the budget proposals is Wall Street, not any set of voters, and certainly not the popular movement that elected him.

    **For more, check out a paper co-authored by Tom Ferguson and Rob Johnson: "A World Upside Down? Deficit Fantasies in the Great Recession"

    Thomas Ferguson is Senior Fellow at the Roosevelt Institute and Professor of Political Science at the University of Massachusetts, Boston. He is the author of many books and articles, including Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems.

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  • Memo to Obama: Anything but Democracy Now for Egypt is Building on Sand

    Feb 7, 2011Tom Ferguson

    Food and oil prices are rising as tension in Cairo is soaring -- time to get on board with the people's demands.

    Food and oil prices are rising as tension in Cairo is soaring -- time to get on board with the people's demands.

    Add Barack Obama to the long list of statesmen who couldn't solve the Riddle of the Sphinx. For a while last week it looked like a miracle was happening: The United States was on the verge of doing right and doing well at the same time. After stumbling initially, the administration openly warned the Egyptian army and government not to slaughter the protesters. It also started lining up behind the Egyptian people's demands for a swift transition to a new, more democratic regime. Neo-con lions like Robert Kagan and Elliott Abrams bedded down with liberal internationalist lambs in a "Working Group on Egypt" that called for reforms and Mubarak's exit, while John McCain and other Republicans offered bipartisan cover for Real Change in the world's oldest civilization.

    But by Saturday, February 5, the wheels started coming off. With oil prices threatening the anemic global recovery and commodity prices soaring, the President dialed up leaders of the Persian Gulf states for whom the aging Egyptian leader is Mummy Dearest. As the world watched in astonishment, Frank Wisner, a veteran US diplomat who now works with a major Washington law firm that represents major Egyptian business and government interests, calmly advised the Munich Security Conference that Mubarak should stay on for a while. The hapless State Department responded by being against it before the White House and other NATO leaders all came out for it.

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    Now with the whole world watching, Mubarak's American (and Soviet -- the Cold War is truly over) trained intelligence chief now presides over the "democratic transition" as Mubarak holds on.

    It's always dangerous if you lose your compass amid the desert sands. But for the White House to lose its moral compass now is potentially catastrophic. The President is already bent on one Mission Impossible in Afghanistan, a land that Alexander the Great couldn't conquer. Now he's trying again in a place that Napoleon couldn't hold.

    A foreign exchange crisis lies immediately ahead, as food prices keep rising. If the security police or the army turns Cairo's streets and squares into the Valley of the Dead, the harm to both Egypt and U.S. interests will be incalculable. In the longer run, the confidence the US reposes in the army as a force for stability may also be misplaced. Vertical and horizontal tensions run deep within a fighting force that is now big business. Better supplement it while you can with a free press, an independent judiciary, a real parliament and an end to repression. In a word: democracy.

    Thomas Ferguson is Senior Fellow at the Roosevelt Institute and Professor of Political Science at the University of Massachusetts, Boston. He is the author of many books and articles, including Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems.

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  • The Story Behind Obama's Remarks on FDR

    Nov 18, 2010Tom Ferguson

    What really went on in the first few months after FDR was elected?

    "We didn't actually, I think, do what Franklin Delano Roosevelt did, which was basically wait for six months until the thing had gotten so bad that it became an easier sell politically because we thought that was irresponsible. We had to act quickly." - President Obama

    What really went on in the first few months after FDR was elected?

    "We didn't actually, I think, do what Franklin Delano Roosevelt did, which was basically wait for six months until the thing had gotten so bad that it became an easier sell politically because we thought that was irresponsible. We had to act quickly." - President Obama

    Sometimes a chance remark trains a searchlight on aspects of the historical record that would otherwise be shrouded in Stygian blackness for a generation. So I think it was yesterday when in the Huffington Post, Leo J. Hindery, Jr. quoted from a transcript of President Obama's remarks to a group of liberal bloggers who were querying his handling of the financial crisis.

    Many readers responded in shocked disbelief: The President can't mean what he said. He must have misspoken -- he can't really be claiming that Roosevelt sat on his hands, deliberately letting the Depression get worse and worse.

    Perhaps it was just a slip. But in 2010, even slips can be revealing -- and this one comes from a definite part of the political spectrum. The President was repeating a canard that goes back to the circle of die hards around President Herbert Hoover as he exited the White House in a cloud of bitterness in 1933. In recent years, as a vast campaign against the memory of the New Deal has gathered steam, such claims have gone mainstream. For example, take the carefully hedged version recently put forward by Amity Shlaes in her study of the New Deal, "The Forgotten Man": "But Roosevelt was not interested in cooperation. We will never know all his motives, but it was clear that a crisis now could only strengthen his mandate for action come inauguration in March."

    We are unlikely ever to know for sure. But as President Obama took office, the Council on Foreign Relations was cranking up a remarkably one-sided conference purporting to be a "Second Look at the Great Depression and the New Deal." Ms. Shlaes was a prominent participant, as was the Council's co-chair, one Robert Rubin, whose myriad protégés thronged the Obama Treasury and economic councils.

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    Whether our highly intellectual president picked up the idea by reading it or hearing somebody else say it, it was, and is, in the air. And you can be sure that his words will now be rattling around for years to come and likely cited as proof of Franklin D. Roosevelt's "irresponsibility."

    So it makes sense to look more closely at what really happened between Roosevelt and Hoover. This is not too easy to do, though one or two studies, notably Elliot Rosen's "Hoover, Roosevelt, and the Brains Trust", have written with insight on the subject.

    I often joke that North America is the true "Dark Continent." We probably know more about tribes in the Amazon jungle than we do about the real nature of power in the United States. Neither political science, nor history, nor economics do very well on this. If you want to understand what really happened between Hoover and Roosevelt between November 1932, when FDR won the election by a landslide, and March 1933, the old inauguration day before passage of the 20th Amendment to the Constitution, you need to comb through the papers of private bankers and the material in more easily available public sources such as the splendid Roosevelt Library in Hyde Park, New York. I have been engaged in this over more decades than I now care to admit. The bottom line is this: Hoover and a substantial bloc of New York bankers wanted Roosevelt to commit to staying on the gold standard and US participation in the upcoming London Economic Conference. These commitments would have meant continued austerity and completely destroyed any chance of fundamental reform -- which was why the banks and Hoover were so insistent. In effect, they were hoping to continue with Hoover's policies, if not Hoover himself.

    Roosevelt exchanged some messages with them, but finally refused the whole package. He and his advisers correctly concluded that the idea was to suck them into a foolish set of commitments. FDR was simply not willing to make the kind of arrangements with bankers that President Obama was. That's the heart of the matter.

    Thomas Ferguson is Senior Fellow at the Roosevelt Institute and Professor of Political Science at the University of Massachusetts, Boston. He is the author of many books and articles, including Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems.

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