Occupy America's Wallet

There is entirely too much to say about the phenomena of Wall Street protesters springing up across the land claiming to speak for 99% of the population.  Noman imagines that his first reply should be, please don't.

Though belonging to the 99%, he has nothing else in common with Occupy Wall Street.  He pays taxes; they don't.  He works in the private sector; they don't.  He thinks America is just great; they don't.  He bathes...  

Unlike the various students demanding subsidized education, and others insisting on free whatever-they-think-they-are-entitled-to, Noman doesn't believe that anyone owes him anything more than common courtesy, and space within the confines of common decency to be who he is.

The one constant in this metastasizing phenomenon has been the futile search for a causal nexus between the protester's actions, aims and the various injustices they point to in order to explain themselves.

One young woman on the radio was willing to risk her scholarship to medical school in order to protest 1.5 million homeless children living in America.  Granting the number, ad arguendo, Noman scratched his head trying to connect her risking her scholarship, going to New York to protest Wall Street, desire for higher taxes and more spending, and how any of it would address the problem of homeless children--or even had anything to do with it.

It was classic Liberal: clutch onto a tear-jerking problem and cite it righteously to demand the policies you favor.  If the reader, for instance, is against the policies, it is because you want the problem to fester.  You probably profit from it, too.

Add Saul Alinsky to this mix and hopeless polarization ensues.  You are a "Have" trying to keep power away from the "Have-Nots."  Moreover, you are "the enemy."

In any event, and at all costs, ignore the obvious causes of the problem, which would recommend policies that Liberals oppose and spent decades deconstructing.

For example, the primary causes of child poverty in the US are the breakdown of the family, especially in black, single-parent families, and the breakdown of traditional sexual morality.  Policies addressing these root causes would undoubtedly spur Occupy Maternity Ward protests, chants of "get your rosaries off my ovaries," and invocation of child poverty as the raison d'être for their outbreak. 

Noman might focus with justice on the rank hypocrisy angle.  For instance, Nancy Pelosi--The Speaker of the House who shepherded Hank Paulson and Ben Bernnanke's bailout of Wall Street through Congress over the objections of House Republicans (who voted it down the first time, and took a beating from the media and a Republican Administration for torpedoing the stock market)--is magically the scourge of Wall Street.

She called down God's blessings on the protestors saying: “The message of the American people is that no longer . . . will the recklessness of some on Wall Street cause massive joblessness on Main Street.”  Really?  Who will prevent it?  Government?  Her?

Perhaps Nancy forgot her role in the January 24, 2010 deal to increase Fannie Mae and Freddie Mac's loan limits in high-cost areas from $417,000 to $729,750.

Packing in that last trillion-dollars-plus of sub-prime, Alt-A mortgage-backed debt before the system froze up from cascading defaults didn't work out too well for Main Street.  But, Wall Street and the GSE's sub-prime confederates loved it.  [n.b. Fannie Mae and Freddie Mac are "government sponsored entities," or GSE's.]

She also colluded with Chris Dodd and Barney Frank to omit the GSE's from Dodd-Frank's ambit.  Another big win for big finance at the expense of the 50%-of-the-99% who continue to pick up the tab for the 49%-Party's formerly government-subsidized, now government-owned, cash cows.

Noman supposes that it is Minority Leader Pelosi's theatrical outbursts, not governing actions--what she says, not what she does --that count.  Like her oft-repeated, yet never-substantiated (nor questioned by the mainstream media) accusation that tea party protesters spit on members of Congress, it is her words, not reality, that matter.  (They presumably did so as they picked up garbage leaving Washington, DC cleaner than when they arrived en masse.)

There is also President Obama himself, who despite talking protesters onto the streets and winking at them for encouragement is the leading recipient of Wall Street contributions among all politicians in the 1989-2010 period.  That's impressive, especially considering that he's been a candidate for less than a decade.  Nevertheless, he leads the pack of pols with decades more campaign experience, and expenses, reaping $16 million of Wall Street lucre into his coffers.

Then there is a matter that George Soros complained about recently.  The Government--President Obama's government, and before that Senator Obama's government with House Speaker Pelosi and Majority Leader Reid running it--injected capital into banks, effectively relieving them of their bad assets and allowing them to earn their way out of a hole.  This allowed banks to earn bumper profits, and pay bumper bonuses once they had paid off their TARP loans.

Banks have earned these profits on President Obama's watch in relatively risk-free fashion courtesy of access to Fed money at record low interest rates held down for a record long period, and capturing the generous spread on tight-money loans in the marketplace even while dragging their feet on lending to small businesses and to the middle class.

Noman doesn't want to dwell on any of that, however.  For now, he's happy just to sit back and enjoy the spectacle.

Taking the longer view, some kind of taxonomy would help to put the disparate pieces of this puzzle together, and describe it.  Aristotelian causation provides one; Michael Novak's tripartite components of modern political economy provide another.  A hybrid of the two ordering devices provides us with a map to survey the scene.

Aristotlte's four causes are the material (that out of which a thing is); formal (that into which a thing becomes); efficient (that by which a thing becomes); and final (that for the sake of which a thing exists).  While they apply specifically to physical objects, e.g., tables, they are useful, though less definitive, for analyzing non-physical phenomena.

Novak's three elements of the American political economy are the political system (which is liberal), the economic system (which is market driven), and the cultural-moral system (which is pluralistic).  Putting the two together, one gets the following matrix:

Cause/System	Political (liberal)	Economic (market driven)	Cultural-Moral (pluralistic)
Material (that out of which)
Formal (that into which)
Efficient (that by which)
Final (that for the sake of which)

Political:

Materially, these protests are a legitimate expression of 1st Amendment rights.  This is the way we do things in America, and it is to be welcomed, even if not appreciated.

That said, there is a question about whether conduct is law-abiding.  If not--and, let's be real--then the right is conditioned, curtailed by arrests, etc.

Additionally, the movement has caught on.  We can expect some manifestation of it to be with us throughout the election season.

The interesting, and troubling, prospect is of what will happen when opposing Occupy Wall Street and Tea Party throngs encounter each other in earnest on the streets.

Formally, these political phenomena are being shaped by narrators, talking heads like Barbara Walters who exalted that "it has spread to more than 250 American cities, more than a thousand countries," despite there being only 195 nation states in the world.

It bears mentioning that the mainstream chattering class, people like Barbara Walters, works for big media corporations.

Also worth mentioning is media's importance to Saul Alinsky's first rule of power tactics: "Power is not only what you have but what the enemy thinks you have."  As Walter's cheer-leading indicates, there is no force comparable to media for creating illusions.

Otherwise, there is no unified narrative, as protesters clamor for everything from egalitarian utopia, to gay rights, to the freeing of convicted cop killer Mumia Abu-Jamal.  Occupy Wall Street is decidedly a left-fest.  Its general message is "I want.  Gimme.  I'm entitled.  It's fair.  Tear something down."

Just as the Musllim brotherhood will shape the outcome of the Arab Spring despite the participation of idealistic protesters, Occupy Wall Street is already being shaped by the professional community organizers from SEIU, ACORN's successors, and others operating according to Alinsky's rules.

On this latter point, a look at Chapter 7 of "Rules For Radicals," provides an illuminating glimpse into tactics: e.g., "The real action is the enemy's reaction"; "The enemy properly goaded and guided in his reaction will be your major strength"; "Tactics, like organization, like life, require that you move with the action."

Recall that ACORN received access to $5 billion of community stabilization funds in the first stimulus bill, though its leader disclaimed any intention of availing himself or the organization of it; AmeriCorps received $6 billion; state employees unions received hundreds of billions of dollars in redistributed loot, as did recipients of transfer payments.

Despite high-brow protestations to the contrary, it stretches credulity--all but Liberals'--to maintain that none of this money is finding its way back into organized initiatives supportive of federal redistribution.

The trigger was President Obama's fiery oratory in support of a jobs bill that was legislatively dead on arrival but rhetorically alive with populist bombast to fuel combustable dispositions.

His speeches to the joint session of Congress and the Congressional Black Caucus bear special mention, though his every utterance since his return from Martha's Vineyard has defiantly fanned the flames of class warfare.  He is even proud of it.

Nor is the President alone.  Today, Vice-president Biden blamed an increase in the number of murders and rapes in Flint, Michigan--the communist city that drove GM away to its own detriment, and nurtured the chip on Michael More's shoulder as well as the scars in his soul--on Republican obstructionism.

Despite the VP's failure to establish causation (as opposed to correlation), and to explain when, how and why local police became the financial responsibility of every US citizen including those in law-abiding communities (as opposed to local citizens who generally pay for local police), the red meat will undoubtedly feed an Occupy Flint movement, and encourage escalating tensions elsewhere.

Finally, Occupy Wall Street is dedicated to greater federal spending and higher taxes.  It is a protest geared towards stimulating Congressional action along Democrats preferred lines, and establishing its fiscal (and social) priorities into law.

Note this contrast with the Tea Party movement.  Occupy Wall Street is dedicated to the use of government power to confiscate wealth from others in order to redistribute it to protesters and their preferred recipients.  The Tea Party is dedicated to the abstention of government power so that those who earn or have wealth can put it to their own preferred uses rather than surrender it to the uses preferred by government-favored third parties.

With respect to those who create wealth, their uses are far more likely to prosper society than the uses of politically connected cronies, e.g., Solyndra.

It takes a peculiar outlook, the Alinsky perspective for instance--i.e., "How can the Have-Nots take power away from the Haves"?--to consider Occupy Wall Street claims sympathetic, or to call a Tea Party leader a nazi for upholding the rule of law.

Economic:

Populist rage is the matter from which this movement springs.  It is easy to despise Wall Streeters (if one lets oneself, which is never advisable) who profited wildly from participating in schemes that nearly bankrupted the global economy.

This particular genie, however, once coaxed out of its bottle, can be devastatingly destructive and well nigh impossible to put back in.  Unstable minds are already at work drawing crude connections and making incendiary remarks.

One problem with Alinsky's tactics is that goading enemies into impolitic reactions can be done by anybody, not just the politically correct, which is already bad enough.

Lost in the protests is the nuance doggedly insisted upon by Financial Crisis Inquiry Commission (FCIC) dissenter Peter Wallison, who writes in today's Wall Street Journal that protestor's rage springs from a false narrative.

It was primarily the government's housing policies, specifically Fannie Mae and Freddie Mac's engineering of the sub-prime bubble that bears the blame for our financial misery.   Wall Street was merely a willing accomplice, not its principle architect.

Research by Edward Pinto, a former chief credit officer of Fannie Mae (now a colleague of mine at the American Enterprise Institute) has shown that 27 million loans—half of all mortgages in the U.S.—were subprime or otherwise weak by 2008. That is, the loans were made to borrowers with blemished credit, or were loans with no or low down payments, no documentation, or required only interest payments. 

Of these, over 70% were held or guaranteed by Fannie and Freddie or some other government agency or government-regulated institution. Thus it is clear where the demand for these deficient mortgages came from. 

The huge government investment in subprime mortgages achieved its purpose. Home ownership in the U.S. increased to 69% from 65% (where it had been for 30 years). But it also led to the biggest housing bubble in American history. This bubble, which lasted from 1997 to 2007, also created a huge private market for mortgage-backed securities (MBS) based on pools of subprime loans.

Naturally, when one is trying to "pick the target, freeze it, personalize it, and polarize it" ("all issues must be polarized if action is to follow"--a teaching whose classical expression Alinsky finds in Christ's dictum that "He who is not with me is against me"), nuance gets in the way.

Formally, the idea of a planned, targeted and government-directed economy drives this movement.  Command and control is its essence.

Noman finds this curious as the notion has been thoroughly discredited in management and organizational behavior literature, even in the military, for its suppression of private initiative, reduction of personal responsibility and dependence on centralized actors who cannot possess the omniscience required to make the system work efficaciously.

Ironically, protesters favoring government power over private initiative operate under the cloak of speech and assembly freedoms granted by the same constitution that protects commerce, in its body, not in an added amendment.

The economic trigger was the badly sagging fortunes of the command and control idea.   Despite Newsweek's famous 2009 cover declaring that "We Are All Socialists Now," we are not.

And with persistently high unemployment, skyrocketing deficits and debt, an impending double-dip recession and a proliferation of crony corporatism and corruption, there are daily fewer voices that confidently advocate for top-down economic power.

The discrediting of this economic panacea is all the more alarming to the President's Party as it is accompanied by the President's sinking poll numbers, doubts about his re-election, and concomitant fears of losing Congressional power, which was so opposrtunistically deployed against popular majorities, e.g., ObamaCare.  There is fear of payback, and even of merely justifiable roll back

The momentum to cut spending and lower taxes--a trajectory diametrically opposed to the Democrat's thrust--is on the ascent.  Repeated legislative and budgetary confrontations have only served to raise the profiles of smaller-government proponents such as John Boehner, Eric Cantor and Paul Ryan.

The final cause of Occupy Wall Street's economic thrust is Statism.  Under present conditions, this requires utilizing corporatist intermediaries such as General Electric, Dow Chemical, Pfizer and Walmart: public-private partners that, unlike Chamber of Commerce members, have grown comfortable in bed with the federal government.

Notably, these companies are not the target of protestors' rage.  That could change quickly should the government decide to dispense with their services.

There is nothing in the rhetoric or actions of Occupy Wall Street to indicate where, to protestors' minds, the limits to collectivism, if any, reside.


Cultural-Moral

Materially, the movement's moral impulse is grievance at perceived unfairness.  Income disparities are unseemly to many, and Wall Street is a haven for the exorbitantly paid and lavishly pampered.

Noman does not share Occupy Wall Street's aversion to economic difference, or think that there is no economically meaningful distinction to be drawn between an investment banker and a shoe-shiner.  So, he is not convinced that both should earn roughly the same pay for their efforts--something sundry protestors have suggested, and that he has heard from undergraduates for years.

This implicates at least a touch of self-interest--convenient moralizing, say, or easy virtue--given that protesters, unlike Warren Buffet, are not clamoring to pay more taxes.  Rather, they are demanding more benefits paid for by other's taxes.

The conflicts of interest inherent in the frustrated sentiments expressed have largely escaped protestors' self-examination, which does not excuse public sympathizers from Fed Chairmen Ben Bernanke and Treasury Secretary Tim Geithner to short seller George Soros for failing to recognize and acknowledge them.

Formally, the tendency is towards an equal distribution of resources.  It is an article of faith for some that equality of outcome will end injustice and suffering, and usher in heaven on earth.  The pedigree for this notion runs from Rousseau through Marx to Lenin.

But, will redistribution ever achieve its lofty aims?  Noman thinks not given the evidence of history, which leads to the opposite conclusion.

No system geared towards equality could ever ensure that everybody had something because it could never guarantee supply under demotivating conditions.  It could only ensure that nobody (besides the rulers) had anything.

Do you remember Liberals waxing eloquent about Cuba? The Soviet Union?  Nicaragua?  How has the equal distribution of resources worked in those worker's paradises?

Naturally, perfect equality proves elusive because those who effectuate the balancing, the Party, always reserves the lion's share for itself and its members.

What would be different should Occupy Wall Street and the Democratic Party have its way with the people's morals, and wallets?

The efficient cause of this movement is opportunity, specifically opportunism provided by our proximity to the financial crisis.  The relevance of occupying Wall Street as opposed to Beverly Hills, where arguably more millionaires and sub-prime/Alt-A mortgages might be found, is the financial capitol's psychological connection to the still-profusing economic wound.

Moreover, Liberals are so close, yet so far from consolidating massive gains.  The Wall Street Journal editorialized in January of 2009 about Democrats' 40 year wish list.  Today, this article serves primarily as a grim testament to Democrat's faulty prognosticative powers, and untrustworthiness to manage the nation's finances and affairs.

The adoption of the 40 year wish list in the first stimulus bill was followed by countless Liberal conquests including most notably, ObamaCare and Dodd-Frank.  All that remains to accomplish--besides establishing a blue state entitlement to red state taxes--is to pay for these spend-and-tax victories before capital markets definitively protest, and credit default swaps on the nation's debt render them Pyrrhic.

To Occupy Wall Street, these legislative triumphs make America more fair.  They redistribute money and power from the Haves to the Have-Nots.  The Have-Nots are entitled.  Consequently, taxes must be raised now, regardless of the consequences, or all will be lost.  Carpe diem.

Resentment, unemployment and malaise also trigger this moral response.  Things are not going well economically.  As it sounds less-and-less credible to blame the mess on the other guys the further they recede from memory, it must be the fault of systemic injustices.

When the going gets tough, the Left capitalizes on its opportunity for big change, even when its policies are the cause of the tough sledding.  Perhaps especially then.

Finally, the cause is the demand for social justice.  Who doesn't want that, you ask?  But, along whose, and what lines are we talking?

Philosopher Alasdair MacIntyre highlighted the problems besetting contemporary moral discourse and suggested means to surmount them in a landmark series of books commencing with "After Virtue" (1981) and ending with "Dependent Rational Animals" (1999).  The second of four books, entitled "Whose Justice? Which Rationality?" highlighted the incommensurability of moral positions predicated on disparate foundations, each rooted in separate and distinct historical epochs.

To the extent that mere words such as "social justice" and "fairness" bind listeners in their spells, it behoove us to discern the roots of their varying articulations.

Noman will attempt to ground those roots in varying conceptions of "Hope" in a subsequent post on the topic.

Lilies of the Field (1963)

No-family enjoyed another of its favorite movies this weekend, "Lilies of the Field" starring Sidney Poitier and Lilla Skalla.  

Poitier plays Homer Smith, a handyman drifter whose station wagon is his magic carpet and whose domain is the world.  Driving through Arizona, he stops for radiator water at a desolate farm in Arizona, which turns out to be the convent of a group of eastern European sisters.

Mother Superior (Maria), played by Skalla is a battle-axe nun in the pre-Vatican-II mold: extremely high on the faith and endurance scales; extremely low on the social grace and gratitude scales.  The nuns barely speak English.  

Homer's grand adventure begins when Mother Maria identifies him as the answer to her prayers.  She's asked for God to send her a strong man to build them a chapel.  His good nature and humor make him a perfect dupe.  But, for whom?  Mother Superior, or God?

You feel badly for Smith as he gets sucked into Mother Superiors schemes, and badly for  her (them) when he walks out or stands on his rights as a man owed his due.  They are made for each other; they need each other in providential ways; they do God's will through their struggles against each other's wills.

The movie's most famous artifact is the "Amen" song that too many Catholics have had to endure in too many churches for too many decades.  Nevertheless, it's fresh in this scene, which is more-or-less repeated, quite meaningfully, at the end.  This feeling-it Baptist shows these buttoned-up Romans a thing or two about sacred music.  And, they dig it.

In this scene, Smith, having come to grips with his aversions, insists on undertaking the project on his own despite others desire to help him.  His commitment drags them out of incredulity into Mother Superior's dreams, but he doesn't want to share the task with anyone.

This movie works for a number of reasons.  First, Poitier is a magical actor.  He could invoke more pathos with one facial expression than most contemporary actors can with 100 grunts and emotional conundrums.  Secondly, the interplay of Mother Maria, Smith, the nuns, and the Mexican town folk is precious.  Thirdly, it is a story of profound faith, mysterious providence, human frailty and divine strength.

A YouTube commenter left the following illuminating tidbit:

This movie was made is three weeks, with almost no budget, and no sets. The director saved money by casting himself in the part of "Mr. Ashton." Poitier agreed to do the project for no money, but a return on ticket sales. He won an Oscar for this performance, instead.

There's a character for every disposition in this film: the carefree soul who revels in his capability and freedom; the strong-willed autocrat who doesn't know the meaning of the words "give it up," "enough" or "thank you"; the pure and trusting souls who live in obedience and the grace of state; the pious and humble people for whom the souls of their children mean more than all the riches of the world; the skeptics whose grasp of the practical leaves little-to-nothing to reach towards heaven with; the fallen for whom things have not turned out as they bargained.  All are saved, just as we would hope for in reality.

For Noman's money, this is nearly a perfect film.  It makes you laugh, cry, squirm and, most importantly, contemplate the mysterious ways of God who writes prose with the leg of a table just to let everyone know who the author is.

Populist Winds Blowing

Senators--mostly Democratic, but not exclusively--are incensed at China's artificially low currency, which reduces the value of its exports to the US, and increases American firms' propensity to source overseas.  Taken as an isolated phenomenon, this costs the US manufacturing jobs.

Critics of China specifically, and global sourcing generally, are reluctant to recognize the domestic benefits flowing from outsourcing, e.g., lower domestic consumer prices; money flowing to more efficient and competitively advantageous domestic uses thereby creating jobs in new growth industries.

Neither do they care that a stronger Chinese Yuan will merely shift the venue of sourcing, not its incidence.  The latter won't happen until US union wages fall back to earth, as evidenced by Ford's recent announcement pending union approval of a newly negotiated contract.

Many manufacturing jobs are union jobs.  Union jobs pay a lot, often more than the companies providing them can afford.  That's how the Big-Three automakers were driven to penury.  Incidentally, unions are Democrat, vote Democrat, fund Democrats, and provide muscle for Democrats, e.g., marching on New York to protest capital, capitalists and capitalism.

The Democratic Senate's response to these interconnected phenomena is to propose tariffs on Chinese imports.  If China won't let the market float the value of its currency, then the US will forcibly increase costs associated with doing business in China.  Those costs will fall onto companies and ultimately consumers.  Nicholas Hastings thinks this is a desperate response to recent dollar appreciation due mainly to Euro disintegration.

The trouble is the U.S. is getting desperate. 

It is looking for any solution to stop unemployment from rising and its economy from heading back into recession. And China, with its weak yuan, is back in the firing line. 

For most of last year and much of this one, the dollar itself had been under heavy selling pressure and China was essentially off the hook. 

With the weakness of its own currency being accused of causing ‘currency wars’ by countries such as Brazil, the U.S. was hardly in a position to point the finger of blame anywhere else.

President Obama has joined the chorus despite cautioning Senators recently to proceed with respect for international norms.

"China has been very aggressive in gaming the trading system to its advantage and to the disadvantage of other countries, particularly the United States," Mr. Obama said. He acknowledged China has allowed some appreciation in the yuan, but said "it's not enough." 

Senate lawmakers, voting almost at the same time as Mr. Obama spoke, moved a step closer to passing legislation that would target Beijing for its exchange-rate policies...

"We are in a trade war (emphasis added). We have our clocks cleaned every day and lose jobs every day because of unfair Chinese practices," Sen. Charles Schumer (D., N.Y.) said on the Senate floor before the vote... 

"They don't outwork us, they don't outperform you, they steal our intellectual property, they manipulate their currency, they subsidize their industries," Sen. Lindsey Graham (R., S.C.) said during debate, referring to China as a "communist dictatorship who cheats" (emphases added).

The President cautioned the Senate not to punish American companies by exposing them to WTO sanctions.  Punishing them with higher prices, and squeezing their margins, apparently doesn't bother him, at least in principle.

“I don’t want a situation where we’re just passing laws that are symbolic, knowing that they’re probably not going to be upheld by the World Trade Organization for example, and then suddenly U.S. companies are subject to a whole bunch of sanctions,” he said.

“I think we’ve got a strong case to make, but we’ve just got to make sure that we do it in a way that’s going to be effective,” the president said. Chinese officials this week threatened a trade war if the bill is enacted. 

In a key procedural vote Thursday, the Senate moved the currency bill a step closer to passage. The chamber could hold a final vote on the bill later Thursday. It faces an uncertain fate in the House where Speaker John Boehner (R., Ohio) has called it “dangerous.” 

The legislation is a popular political symbol for lawmakers concerned about the faltering U.S. economy. With unemployment still above 9%, many politicians see targeting China as an issue that will resonate with voters in next year’s elections.

Mechanisms already exist for the Treasury Department to officially designate China a "currency manipulator" in its periodic currency report, which would have legal trade trade implications.  That Tim Geithner hasn't done so indicates to Noman that the President and his Party are more interested in drumming up populist passions for political gain rather than in addressing China's currency peg.

Presumably, Americans should not be concerned about the resurrection of yellow-peril scapegoating.  Korematsu was such a long time ago, and it couldn't happen again, not here.  In any event, the end of resonating with voters in next year's elections justifies pretty much any means (see  "Rules for Radicals" below).

The WSJ strikes a somber note regarding the potential consequences of the proposed Currency Exchange Rate Oversight Reform Act.

Unlike America's last great trade blunder, the Tariff Act of 1930 (aka Smoot-Hawley), the China bill wouldn't raise tariffs across the board, but would instead allow companies to seek countervailing duties by treating a "misaligned" currency as a subsidy. This would nonetheless open the floodgates to applications from American companies, and the resulting tariffs would violate World Trade Organization rules. China would undoubtedly retaliate, meaning companies and consumers in both countries would lose.

If other countries follow suit, there would be knock-on effects throughout the global economy. As the erstwhile leader of the world's trading system as well as one of its main beneficiaries, the U.S. bears a special responsibility to avoid this outcome. 

One reason we are so close to this ledge is that Washington has not led on global and regional liberalization. Free trade is like a bicycle, which needs to be pedaled forward or it tips over. When a President is AWOL on trade as Mr. Obama has been, U.S. politicians succumb to populist temptations. Instead of concentrating on domestic reforms to restore growth, Congressmen tell Americans that their lost prosperity was taken by China rather than by poor policy decisions. So now the U.S. will punish the biggest developing nation, and one of America's main goods suppliers, for its economic success. 

With respect to China's allegedly undervalued currency and its role in exacerbating trade imbalances, the evidence is mixed.

The last six years are proof that revaluing the yuan is not the key to reducing China's large and persistent trade surplus with the world. The yuan has appreciated by almost 30% since the middle of 2005, when Mr. Schumer was pushing for a 25% revaluation. But the Chinese surplus has mostly grown and occasionally shrunk during this period in response to other forces... 

Democrats want to appease labor to hold the Senate next year. The White House wants to appease Senate Democrats and labor, so it has failed to speak against the tariff bill. White House spokesman Jay Carney says only that it is "reviewing" the legislation and that "we share the goal." 

Senate Republicans aren't about to stand in the way, especially when their Presidential front-runner, the supposedly business savvy Mitt Romney, is also calling for unilateral trade duties against China to give his candidacy a populist edge. John Boehner's House Republicans may be the last obstacle to such a destructive bill passing.

Boehner is paying a high price in populist bashing for it, too.  Senator Schumer's response to the House Speaker's description of the proposed legislation stopped just short of calling him a traitor:

"The only thing that would be dangerous would be to continue turning he other cheek while China mounts its assault on U.S. jobs, U.S. wealth, U.S. manufacturing," Schumer said on the Senate floor. He said that "I'm aghast at that notion that the Speaker says fighting for American jobs against unfair practices that China foists upon is us well beyond what Congress should be doing ... There is nothing else Congress should be doing except rising to defend American jobs."..." 

For some inexplicable reason, the Republican leadership in the House is siding with the Chinese government," Schumer said. "This is not the time to go soft on China."..

Though Boehner's position suggests he won't allow a vote in the U.S. House of Representatives, "there's going to be huge pressure for him to do so," Schumer said. Schumer said that the only answer is to get tough with China, saying that "the Chinese only understand one thing: being tough, telling them if they don't discontinue these actions we are going to take action unilaterally on our own."... 

"There's already a trade war going on Mr. Speaker -- China is cheating to gain unfair advantage," Schumer said. "It's about time we do something about it."... 

"China has more to lose in a trade war than we do," Schumer said. "They may take a few sanctions in response," he said, but "they're not going to create a trade war -- absolutely not."

Timing is everything.  With things not going well for the President on the offensive and facing public scrutiny of his ideas, it's better to change the subject, demagog, and let Senate surrogates and street smart union organizers take the lead.

Noman alludes to the twin populist pressure-whistles blowing from Democratic kettles in recent days.  China-bashing is one.  The other is Wall Street bashing.

Noman finds this amusing as it was President Clinton who mined the Chinese Communists for campaign contributions in return for sensitive military technology, and the Democratic Party which reaps the majority of Wall Street contributions.  Perhaps these confrontations have all been prearranged in back rooms, like a staged bout of Big-Time Wrestling.  Do you think?

The Senate vote puts the White House in a delicate position. Like previous administrations, the Obama White House is wary of antagonizing Chinese leaders, whose cooperation it needs not just on economic issues but also on an array of national security matters. But criticizing China remains popular with the public, and many Democrats, including those from big industrial states, say China's currency policy is unfair to U.S. workers...

Opponents of the bill say that instead of potentially sparking a trade war, the U.S. should face its own problems, such as the burgeoning federal budget deficit. "It's like we know what we've got to do but we won't do it," said Sen. Bob Corker (R., Tenn.). "It's like we've got to find a bogeyman."

Readers of Saul Alinsky's "Rules for Radicals"--the community organizer's and practical revolutionary's bible--will immediately recognize his handiwork in current events.

Specifically:

Rules for Power Tactic: 

#2 - Never go outside the experience of your people. 

# 8 - Keep the pressure on with different tactics and actions, and utilize all events of the period for your purpose. 

#13 - Pick the target, freeze it, personalize it, and polarize it.


Rules to test whether power tactics are ethical: 

#3 - In war the end justifies almost any means. (n.b., the minor premise is that everything you consider important is war.) 

#7 - Generally, success or failure is a mighty determinant of ethics. 

#8 - The morality of means depends upon whether the means is being employed at a time of imminent defeat or imminent victory. 

#10 - You do what you can with what you have and clothe it in moral garments.

Americans are frustrated with a collapsing economy and high unemployment despite assurances of a government-driven turnaround.  They are disgusted with the trillions of dollars that have been wastefully larded into government-selected troughs since the President's election.

The people are looking for a convenient bogeyman, but don't want to look too closely at their President who might not be the nice, clean-cut fellow they imagined him to be.  It is crucial for Democrats to deflect their frustration, disgust and desperation onto a perceived enemy and away from their governance.  The Chinese (and Wall Street bankers) are straight out of central casting.

Democrats are hoping that populist demagoguery along Alinskyite lines will turn the trick.  Defeat has been looking rather imminent, with a recent poll  indicating that any Republican candidate is preferable to President Obama.

It is evident from Alinsky's ethics rules that his disciples are not bound by classical-Christian notions of reality (being), truth, goodness, virtue, the moral object, etc.   In essence, they reduce to one rule: metaphysics are what you make them.   Demonizing third parties while throwing world markets into chaos as the global economy teeters on the brink of a double-dip recession are perfectly acceptable means.  You've got to break a few nest eggs to make a Statist omelet.

As one might expect, China is disturbed by the scapegoating.  It pledges to continue its exchange rate reforms, and despite noises about trade wars, is leaving the door open to reconciliation.  Yet:

Senior Chinese officials have become increasingly forceful in their approach to the U.S. since the global recession, with many convinced that China is now in the ascendant and the U.S. is in permanent decline. Some feel China has the upper hand as the largest holder of U.S. debt—and the only major economy still growing rapidly.

Chinese leaders say the U.S. is to blame for plunging the world into crisis as a result of economic mismanagement, and resent moves that America has taken to boost its recovery, including buying bonds to hold down interest rates—so-called quantitative easing—which they argue is debasing the U.S. dollar and pumping up inflation in China and other emerging economies...

Chinese leaders also recognize that in a globalized economy, their own fate is closely linked to that of the U.S., and a trade war would likely be as damaging to China as the U.S.—perhaps even more so given China's greater reliance on exports.

Noman wonders why the Senate and White House don't recognize that in this globalized economy with a universal capital market, America's fate is closely linked to that of China's.

If he understands Americas's economic predicament correctly, it is that America--especially its Blue States, and federal government--refuses to live within its means, and insists that China and other foreign nations finance the profligacy on our terms, even to the point of their own detriment.

At the risk of desdcending into arcana and boring the reader to distraction, Noman thinks it worth the digression to contextualize this controversy, and situate it in reality.

Peter and Andrew Schiff have written an informative little economics allegory illustrated with comic book drawings entitled "How an Economy Grows and Why It Crashes."  It is imminently accessible, and will help to shed light.

America doesn't under-consume sufficiently to generate enough savings to create capital--that which is used to increase productivity and supply future consumption.  On the contrary, Americans are negative savers--America spends more than it earns.  It borrows from other producers, China for instance, in order to consume more.  America's consumption addiction adds little to US productive capacity, and drives the country deeper into debt.

Government compounds matters by inserting itself into the process of credit allocation via guarantees, credits, taxes and penalties, which is to say that it directs how savings (loanable funds) are to be allocated.  For instance, it threw its full weight behind an "affordable housing mission" that led to an overallocation of economic resources to housing, generally, and sub-prime housing specifically.  America and the world are still suffering the affects of this public-private partnership.

Government further influences the flow of credit through the Federal Reserve Bank--a supposedly independent entity that actually functions as an adjunct of the US Treasury--which sets the base interest rate upon which all rates rest.  Lower rates are politically popular, and consequently tend to be the norm. This further encourages borrowing, and retards necessary savings.

Artificial booms and busts follow investment choices predicated upon artificially set rates that send false signals to borrowers, i.e., that consumption has been deferred thereby pushing rates lower, indicating pent-up demand for future consumption.  Capital investment made to supply this future consumption is likely to underperform, if not be lost altogether, because the demand won't actually materialize.

Since the Fed's creation in 1913, the dollar has lost 95% of its value to inflation!  The Schiffs write that "the Fed now exists for the sole purpose of providing the inflation necessary to allow the government to spend more than it collects in taxes."

In 1971, President Nixon terminated the dollar's gold backing.  Consequently, America's currency is supported by nothing other than government's power to tax savings away from citizens who under consumed, risked, and produced them.  It has neither intrinsic nor convertible value.

The money supply, consequently, is inflatable at will.  While doing so deflates the purchasing power, or value, of the currency, it defers hard choices regarding spending and taxes.

The money supply is presently rocketing under the Fed's various quantitative easing initiatives.  Because only some prices are rising (e.g., food, energy, resources), and others are remaining stable in the recessionary economy, inflation is masked.  Yet, prices should be falling as people pay down debt and reign in their spending.

The economy is being prevented by government action from rebalancing at lower prices that will give relief to consumers, and eventually settle at a level where purchasing will resume.  That is when the economy will sustainably expand.

China provides the US with cheap goods and cheap loans, which enables America to defer saving and to spend.  The Chinese work, under consume, save, invest, produce and lend.  Yet, they don't borrow; they consume meagerly.  The majority of China's population lives in poverty, while America's lives in relative opulence.  In return, China accumulates increasingly inflated (decreasingly valuable) dollars.

Low interest rates in the US are made possible by high savings rates abroad.   Because the US dollar is the world's official reserve currency, every country needs dollars to conduct trade.  Dollars are consequently always in demand for reasons not directly related to the health of the US economy.  Many dollars held by foreigners are done so in US banks, where they can be lent easily to Americans.  Others save, we borrow cheaply.

Without China's savings, America would find it much harder to borrow, even at much higher interest rates.  How would that work for the federal government given its $14 trillion debt--over $1 trillion of it held by China, America's largest creditor?  Additionally, China is estimated to hold in excess of $2 trillion of dollar denominated assets.

The US has run persistent trade deficits since 1976, which is only possible due to the built-in demand for dollars occasioned by its world reserve currency status.  The US trade deficit averaged roughly $600 billion per year between 2000 and 2010, or $2,500 per citizen.  Reserve currency status is neither permanent nor guaranteed.

This dynamic should strengthen the currencies of countries, like China, that enjoy big trade surpluses.  Because the Chinese peg the yuan to the dollar at a relatively fixed rate, however, Chinese dollar holders are discouraged from consuming and are essentially obliged to save them.  Consequently, US borrowers have dollars available to them at low rates.  This is what DC presently is excoriating China for.

China keeps the Yuan artificially low.  Perhaps it might be said with equal justice that foreign demand for America's currency due to its reserve status keeps the value of the dollar artificially high.

America borrows recklessly, and has used available credit to consume and to create a housing boom.  When credit stopped expanding and eventually tightened in 2007-2008, the bubble burst.   Falling prices have been partially arrested--thereby preventing a necessary rebalancing of the economy--by deficit government spending.  The government is borrowing $1.6 trillion per year, more than half from foreigners, and faces similar or greater deficits far into the foreseeable future.

DC has made no effort to seriously cut government spending.  Quite the contrary, it has dug in to preserve prerogatives, expand entitlements, and balloon spending.  China is continuing to extend credit, albeit more reluctantly, to a debtor that is decreasingly likely to pay with anything but near-worthless dollars.  It is also moving to forge consensus on the need for an alternative reserve currency.

Eventually, China will cease lending to America and refocus its productivity on domestic consumption.  It will then enjoy the fruits of its labor, rather than make them available to us at low rates in return for depreciating paper currency and political abuse.

America is inflating its way out of its debts with rounds of quantitative easing and other weapons of mass distraction, which ensures it will pay debts off with diluted currency.  The money China gets in return will not buy as much as what it lent.  Consequently, China partially protects itself  and its present advantages by pegging the Yuan.

In sum, Inflation transfers money from savers in a currency (China) to debtors in that same currency (America).  DC is mad ostensibly because China takes steps to prevent the full brunt of Americas's backdoor devaluation strategy from falling on it.

Senators Schumer, Graham and company appear to Noman not only to be biting the hand that feeds America, they are shooting America in the foot.  Because the dollar is the reserve currency, it is widely accepted regardless of America's economic fundamentals.    Either hyperinflation, or a loss of reserve status, however, will change that, and thrust America into abject penury.

The proposed Currency Exchange Rate Oversight Reform Act does nothing to address those horizontal concerns, but rather does much to hasten their onset.

Noman has sufficient doubts about the wisdom of this course to hope that the Senate will desist from its populist exercise before it hastens America's comeuppance in return for political gain, and alienates those who permit the Senators to maintain illusions of government omnipotence.  At the very least, Noman hopes that if Senator Schumer must play with guns, he learns to shoot straight.

Demotivating Conditions: A Giant Organizational Problem

Why do we care about professional baseball, or sports teams generally? Perhaps it matters to us because rooting for a team is an initiation into a culture, a history, a tradition, and a people. The club confers its identity on all who root for it, and everyone who plays for it, if the player lets it. We belong. And, that's important to people.

This post is about the team of Noman's heart, the one he's belonged to all his life: the San Francisco Giants.  They traded for Carlos Beltran at the end of July, and will enter long-term negotiations with him shortly.  This article expresses two-cents worth from a life-long fan whose loyalty was finally requited last year.  He cares, therefore he writes.

For all of the demigods and Hall-of-Famers that have played for this historic franchise, the 2010 Giants gave Noman a gift that no other Giants team had since he was eight months in the womb, a World Series Championship.

His father had been a Giants fan in New York. The team moved west four years after his birth in San Francisco, and they became his team by osmosis. His loyalties were fated, though seemingly destined never to be feted.

His earliest Giants memory occurred three years before he was born: "The Giants win the pennant! The Giants win the pennant!" Russ Hodges immemorial call redounds in his soul like a Platonic form.

His earliest actual memory is of the 1962 Giants improbable pennant, which depended on the Dodgers losing ten of their last 13 games, blowing a four game lead with seven games left to play, and a two game lead with three remaining. He still thanks the 1962 Cardinals for sweeping the Dodgers in the final three games of the season (and taking five of six from them in the final nine) to set up a playoff.

The Giants needed to win a three-game playoff series with the final two games set in Los Angeles where the Dodgers were all but unbeatable. They needed to rally for four runs in the top of the 9th inning to win game three by a score of 6-4. It all came to pass.

Noman can't remember a time when the Giants weren't important to him. Twenty-five years after leaving his native San Francisco--eleven of them living abroad in Europe—they’re still his team.

The 2010 Champions emerged in the least expected of fashions--when there were no giants among mortals leading them onto the field; when every game down the stretch was so agonizing as to prompt Giants’ announcer Duane Kuiper to dub them "torture"; when the Phillies and Yankees and Rangers, oh my, were oh so formidable. It all added to the wonder and joy.

What an unlikely bunch: Andres Torres, Freddie Sanchez, Aubrey Huff, Pat Burrell, Juan Uribe, Cody Ross, led by a rookie catcher, Buster Posey. Who dey? They were the guys who rose to every occasion, and astonished—sometimes even overwhelmed—its chop-licking adversaries.

The Giants dispatched long-time nemesis Bobby Cox to retirement on a down note. Cody Ross et al. dispatched the unhittable Doc Halladay. Edgar Renteria et al. dispatched the unbeatable Cliff Lee.  Juan Uribe dispatched everyone.

The secret, of course, was lights-out pitching, a September ERA of 1.78 to win the division coming from behind, and a postseason ERA of 2.47. Of fifteen playoff games to the crown, the Giants’ staff allowed fewer than three runs in eleven of them.

Lincecum and Cain and forget about rain; Sanchez and Baumgarner; Lopez and Wilson. Fear the beard! Tight defense was nearly all they needed.

Something happened on that team that doesn't happen in many organizations, not even on championship teams. It grew to become greater than the sum of its parts.

Every man filled in wherever another man vacated. Twenty-five men each made the team his personal problem, and not his personal problem the teams. The players self-identified as castoffs and misfits who had found a home. This team was the place where they belonged; they became one with it, and with each other.

The players adhered from the heart outward, and it raised their game to unconquerable heights. They merged to form a unity. They became champions, together, as one.

The World Champion Giants departed from the organization's historical modus operandi. Giants teams were always built around a savior: Willie Mays, Willie McCovey, Bobby Bonds, Barry Bonds, Jack Clark, Will Clark, Kevin Mitchell, Hackman Leonard. Normally, it was a dynamic duo or trio: Mays & McCovey; Bonds, Matthews & Maddox; Mercer & Montanez; Clark & Evans; Mitchell & Leonard; Williams & Clark; Bonds & Kent.

GM Brian Sabean built the Champions around young pitching. He brought in a bunch of role players who performed capably and fit in with one another around the mound talent. They fielded like they knew it was important. They hit clutch home runs in key situations.

Sabean, top management and manager Bruce Bochy let them grow, fit in, find their niches, learn, and somehow gave them something to care about bigger than themselves. They responded as ballplayers, and as men. They made their fortunes; they won; and they bonded.

For most of 2011, the Giants deployed the same Punch & Judy attack and remained in first place in their division. They won fifty games by the midseason All-Star break. Most importantly, they remained true to form.

Then, they made a giant organizational mistake. They reverted back to their ineffectual savior mentality. They put their faith in a big bat rather than in unity. Not that there's anything wrong with a big bat. The mistake was to let its possessor dictate conditions.

Desperate to defend their championship, and thinking that they needed a star in their lineup to do so, they traded for Carlos Beltran at the deadline.

Sabean also said he would be more open to a rental because of the Giants’ dire situation. Let’s face it. You can’t look at this team right now and say it can beat Atlanta, Philadelphia and Texas/New York/Boston in the postseason.

Sometimes, when you have a shot for the grand prize, you have to ease your principles. Sabean said he’d trade for a rental if he was a “difference-maker.” That’s exactly what Beltran can be.

Honestly, you couldn’t have looked at the team last year and said that it would beat Atlanta, Philadelphia, and Texas/New York/Boston. Nobody gave them a snowball’s chance in hell, even as they won. Yet, they took on all comers including three of the aforementioned powerhouses.  O ye of little faith.

Moreover, most of the time it’s best to stick to your principles, which is what got you in position for a shot at the grand prize in the first place.

As a veteran player with ten years in the league and five on the same team, Beltran had no-trade rights, which he used to exact conditions from the Giants. The rumor was that Beltran conditioned the trade's acceptance on playing right field (his normal position) and batting third in the order. Sabean has denied part of that, saying only that Beltran's position in right field was "academic."

The important point is that the Giants organization and players know what the conditions were, and so does Beltran. They acceded to them, and proceeded to collapse.

The Giants were 16 games over .500 when they traded for him, with the third-best record in the National League despite having the third-worse offense in baseball. They held a four game lead over second-place Arizona, and made a statement by taking the rubber game of a series with the cocky Philadelphia Phillies on the road the night that Beltran joined them.

To play Beltran in right field, they moved Nate Schierholtz, who was slowly maturing into a star, over to left field. They departed from their core philosophy of not trading homegrown talent for a big-bat, high-priced free agent. They added to a burgeoning pack of outfielders, and trifled with their castoff-and-misfit chemistry.

Most importantly, they acceded to his conditions in order to secure his approval to the trade, rather than insist on his acceptance of theirs in order to take him onto the defending World Champions in the thick of a pennant race. That was the beginning of the end.

By August 10th, twelve days after he'd joined the team, they’d fallen permanently out of first place in their division. By August 20th, they'd capped a 6-16 stretch that dropped them 2.5 games behind the first place Diamondbacks. By August 29th, a month into his rental, they were 5 games back.

On September 18th, the team won its 8th in a row, too little, too late. The Diamondbacks clinched the division by pummeling the punchless Giants on September 23rd, and knocked them out of NL Wild-Card contention the following night.

It was an inglorious ending to a glorious run.

They died like flashes-in-the-pan, confirming critics’ assessment of their achievement as a fluke. Ignominy of ignominies: there would be no post-season defense, no stand at Thermopylae, no reconquest of Everest.

The Giants finished 2011 at ten games over .500 (86-76), second in the NL’s Western Division, eight games behind the Diamondbacks.

The Giants lost their je ne sais quoi along the way. That wasn't Beltran's fault, or any individual player's. It was management's fault. It was the organization's fault for letting it happen.

When the season ended, Noman realized that the Giants had been—we had been—campaigning for two years running. Last year's Championship caught this season up into it's whirlwind, and extended 2010-2011 into one magnificent quest to remain atop the pinnacle they'd scaled for the first time in 56 years, and first time in San Francisco.

Thank you, Giants. It was fun. Noman will see you next year.

The Giants are watching the playoffs rather than defending their championship because a star player's conditions were placed ahead of the team's, ironically for the team’s sake, and it killed the team's unity.

The episode is a mini-retreat to the Barry era, albeit on a much lesser scale. Everyone knew about Barry's special treatment, his three lockers, his lounge chair and personal trainer in the clubhouse.

Barry Bonds was a transcendent talent, however, and so superior to his contemporaries as to warrant the experiment. That was especially true because the Giants didn't know yet what worked.

Barry, despite giving one of the greatest playoff performances on record in 2002, couldn't win the championship for San Francisco, even with Jeff Kent. Lincecum, Posey, Huff and Wilson did. Yet, the Giants succumbed to the temptation to toss aside what worked to pick up what hadn't.

Carlos Beltran, for all of his hitting prowess, couldn't carry Barry Bonds’ batting gloves. Standing alone, he wouldn't warrant the experiment. And, today, the World Champion Giants have less excuse for misplacing faith in a salvific bat.

Worse, however, is that he failed to adhere to the team’s gravitational pull. He is still a rental player, not a Giant; he is still laying down conditions. 

With their season over, the Giants attention now turns to signing Beltran, who is a free agent.

Agent Scott Boras expects slugger Carlos Beltran to seriously consider returning to the San Francisco Giants beyond this season...

The 34-year-old Beltran, who joined the defending World Series champion Giants in a July 28 trade from the New York Mets, has said he will think about his next step once he is home for the offseason.

"Well, you have to remember when Carlos and I sat down to determine what teams he was going to go to, it was his choice," Boras told The Associated Press on Monday night... " He came to the Giants for a reason. Obviously he has played very well here. He has gotten a chance to get to know the city and the organization."

The switch-hitting Beltran told the San Jose Mercury News last week he would like to see San Francisco take steps to upgrade the offense — aside from just getting back a healthy catcher Buster Posey and second baseman Freddy Sanchez, both out with season-ending injuries — and the parties would be in touch regarding the plan this winter. Addressing the leadoff spot is something else Beltran has noted.

He said quite a bit more than that, actually. He wants more from the Giants.  Despite it's "unbelievable pitching," he wants to be around players "that will make the lineup better." The Giants "have missed a leadoff hitter," a huge issue for Beltran who earns his money by producing runs. He believes that the Giants have a "good team," but at this point in his career he wants the opportunity to win. Moreover, there is no guarantee that returning injured players will be the players they once were.

Unfortunately, this reads as if the World Champions are not quite good enough for him, yet. Its lineup doesn't measure up to his expectations, especially not it's leadoff hitter(s). He needs more people on base to drive in, and he wants better odds of winning than presently exist in San Francisco.

Presumably, he knows that an injured player is a risk, being one himself. He has a history of knee problems, and didn't play between August 7th and 23rd due to a strained right hand.

His comments are commonplace for someone pondering his own circumstances in splendid isolation from the context of others. To be fair, it is understandable that he would coax the Giants into complying with his expectations while he has negotiating leverage over them.

It would certainly be better for him not to sign if he can't get his way than to sign, whine, pine and consign his leadership responsibilities to others.

But, his tack is not good for the Giants, who need him, and everyone in the enterprise, to conform to the team's expectations and to think about his contribution to the organization rather than the other way around.

He wants more from the Giants?  Poppycock. They want more from him.  Paradoxically, his giving it to them rather than withholding it and making demands will more likely produce what he wants.  

Beltran’s comments underscore that his and the Giant's worlds are separate and distinct even two months after his arrival in the thick of a pennant race to defend their championship. Despite his investment in getting to know the city and the organization, he is still an outsider and not a Giant. 

As for Beltran's contribution in San Francisco, Scott Boras might more accurately have said that his stats were good rather than that he played very well. In 44 games and 167 at bats with the Giants, he scored 17 runs, drove in 18, batted .323 and was on base at a .369 clip. His power numbers were equally professional: seven home runs, nine doubles, four triples and a 1.471 SLG+OPS. He hit his milestone 300th career home run on September 14th, his second homer of that game, which led the Giants to a sweep of the San Diego Padres.

In sum, he is a star ball player who performed capably. The Giants got what they paid for, but not their money's worth.

If Beltran wants to play with the Giants--as his actions in choosing to join them in the first place indicate, and as his agent's comments confirm--he would be better served by saying so and signing a contract that affords the team leeway to negotiate with other players. The last thing he should do is to dictate conditions and call teammates out publicly for their deficiencies.

I can't imagine that his comments will help him in the club house, especially with Andres Torres--last year's Willie McCovey Award Winner who was voted the team's most inspirational player by his teammates--whose subpar year at the top of the lineup he highlighted; or Buster Posey and Freddie Sanchez, two mainstays of the Giants championship team whose ability to recover form he questioned.

 

Self-centeredness and friction are the norms in organizational life as in everyday life. We're only human, and organizations are filled with human beings. But, these postures are neither ideal nor salutary for an organization, especially not when contrasted to the Giants championship team, which was idyllic in crucial respects despite torturing itself and its fans.

The champions were notable for their unity, which translated into character and the ability to tough out close wins on the road or at home, the kind you need to win in order to be winners. That context accentuates Beltran's faux pas, and his role in the team's late season collapse. 

Though it's little appreciated even in business schools where Organizational Behavior is studied and taught, creating the conditions in which unity can occur is a key function of management, and the key function of leadership.

Management creates the conditions for unity, or conversely disunity. Either can only happen through organizational participants (e.g., teammates) free election of real (not just apparent) goods on offer. The organization proposes values that the human heart can freely elect, if capable.

Unity thus exists because favorable conditions exist, and players are capable of choosing it. It comes about by appealing to human beings where they can be drawn in--first by the belly, next by the head, and last by the heart. 

 Achieving unity requires reaching players at all three levels of motivation.  Thus, players must have capacity at all three levels, which depends ultimately on them--on their uses of freedom.

Note the dual conditions: (1) the organization must structure and make its appeals to the belly ($), the head (professionalism) and the heart (service), and (2) the players must be capable of personally responding to those appeals at all three levels of motivation.

No heart; no unity. No interest in excellence; no unity. Base needs unsatisfied; no unity.

One might classify managerial types by motivational emphasis. Strategists align people to the organization by appealing to their material well-being. Executives do that and additionally secure buy-in from people via their assent. Leaders do that and additionally unite people to the organization by appealing to their desire to belong, to give, to participate in something good in and of itself, in something bigger than oneself.

Leadership, in sum, is a three-dimensional operation. Organizational behavior, which manifests itself on the playing field, is a three-dimensional phenomenon initiated by leaders wherever they are found in the organization.

Not just any offer will suffice to draw the human heart. People must believe that cooperation with the organization promises some good worth serving, worth loving. This is something beyond money (belly), and even beyond winning (head).

Participants' true good--from players to fans to vendors--forms part of the rightly-directed organization's mission. Human flourishing occurs only where all three motivational levels are satisfied. And, that’s not likely to come about by serendipity.

Knowing that one will get rich through participation, as all players do, will suffice to draw the belly. Knowing that one may win the championship will draw the head. But neither will draw the heart. Only service to teammates, coaches, fans, a city, an organization, a team, others, someone or something will do that.

Naturally, teams win championships without creating conditions for human flourishing. They might overwhelm opponents with talent, or payroll. The 2010 Champion Giants, however, weren't one of them. They didn't overwhelm opponents with their sheer brilliance or superior talent. They won because they played as one.

Where there is smoke, there is fire. Where there is unity, there is the fire of love.

The Giants may attach Beltran by the belly, as did the Mets, as surely will the next team that acquires his big bat. But, they don't have his heart, and it cost them. Their appeals to it, if they made any, failed to reach him.

He was invited to join a unified championship team and proceeded to ask what it could do for him rather than what he could do for it. And, Giants management let him, even before he joined so as to gain his consent to the trade. That was their mistake, which is why they are not now defending their championship in the post-season.

If they continue to let Beltran impose conditions, they will continue signaling that they are not really interested in his true good, his fullness as a human being capable of service. They'll signal to the entire team that they just want a hitting machine, not a person.

They will have to signal that his learning to appreciate what's fully on offer forms part of their intention towards him. His bat is not enough. Neither is his desire to win.  They need his heart. 

It follows that an organization unconcerned with building up people capable of identifying the authentic good and choosing it is not fully rational. It has no plan for achieving a sine qua non of unity, a condition of its own success.

In brief, improving moral quality--helping people to become more generous, to think of others, to serve the team--forms part of the intelligent organization's mission, and vivifies its leaders and managers.

The moral quality of an organization's people is like the tensile strength of a bridge's steel. Just as it would be foolish to build a bridge without knowing the tensile strength of the steel going into it, it is foolish to undertake a project without knowing the moral quality of the people on the field.

From public indications given by Beltran regarding what he considers essential, his tensile strength could stand improvement. Its current state hasn't helped him to achieve what he says he wants. He's being irrational. And, the Giants aren't helping him.

It's not a question of his prowess, competitive fire or work ethic. By all accounts, he is an exemplary player, a star. For him to grab the brass ring on this team, however, he's going to have to learn to give to something bigger than himself.

The Giants accepted conditions to bring Beltran to San Francisco that he had no right to impose, and they had no business acceding to. It was bad for him, and caused him to miss out on a true good. The Giants let him be self-centered; they let him hurt himself.

Had he agreed (or merely been willing to agree) to play left field, for instance, to allow Schierholtz to continue dominating AT&T Park’s Byzantine right field and to mature undisturbed, or to bat behind Pablo Sandoval so as to make Panda even more dangerous than he was, Beltran might be playing for a Championship this very week.  Regardless, he'd be loved in the clubhouse and in San Francisco.

In matters of the heart, reasons for action--the "why's"--are determinative.

Despite his professed passion to win a championship, Beltran’s participation on the reigning World Champions devolved to his playing well, racking up stats and setting himself up to secure his last big contract.

The Giants didn't educate him about using freedom for something bigger than self. Noman's suspicion given the Giants perceived urgency and manifest covetousness of Beltran's bat, is that they didn't try to, not that he lacked the capacity to freely respond had they.

Regardless, he missed out on unifying his heart to a championship team. Consequently, it missed out on a post-season defense of its title. Pity.  They deserved better.

At the risk of reaching for too sublime an authority, Noman would like to suggest a theological insight.

Taking the miracle(s) of the loaves and the fishes as a point of departure, the lesson is that God works by mediating his action through the participation of faithful disciples. There is normally no certitude of the type that Jesus could have provided by converting the loaves and fishes available into mountains of food so that everyone could see, and relax.

Ask the 2010 Braves, Phillies, or Rangers who were loaded with talent but yet gave way to the nasty Giants (Lincecum’s description), a relatively rag-tag bunch, whether this makes sense. The perennially overloaded Yankees and Red Sox didn’t even get the chance to face David.

There is something to learn from this parable whether one is religious or not. There are no assurances of victory in life, or in baseball, no matter how many stars a team accumulates in its firmament. Better for Beltran to concentrate on excellence and service, play ball rather than politics, and see what the baseball gods have in store for the team.

Noman would like to end with a suggestion for the Giants organization, and to make a prediction.

The suggestion: the Giants should let Beltran stay (if they can afford to feed his belly) only if he agrees to their conditions, and stops laying down his. Otherwise, he is simply not worth the cost to team unity. Better to look for a lesser talent with a bigger heart.

The prediction: the Giants team that won last year's championship will repeat another time or more, if and only if the pitching staff is kept relatively intact, and the Giants revert back to last year's motivational form.

If Beltran thinks that his bat is insufficient for the Giants, then let him go, and find a hitter with more confidence in his teammates. This team is built around pitching, not hitting.

The pitchers might be frustrated with anemic run support. But Lincecum is on the way to Cooperstown, and the rest of them are World Champions. They will all be celebrated and regaled beyond their wildest dreams if they stick together.  That’s not bad for a life.

The 2010 San Francisco Giants strike Noman as being more like the 1981 San Francisico 49ers than like the 1974-1975 golden State Warriors.  And, he saw both teams play many times, the 49ers every week for years as a season ticket holder.

The 49ers went on to dominate football for a decade, and more. They went on to become a star-studded organization. But, they didn't start that way.

The Warriors conversely shocked the basketball world, and collapsed in self-admiration to a hungrier team in the following year's playoffs. They've never recovered.

The Giants know that championship baseball counts more on timely hitting than on big-time hitters. With pitching like they have, they'll always be in the game. That's when unity--which comes from self-donation--pays off, torture or no torture.

Ultimately, organizational flourishing, just as personal flourishing, is a matter of heart. The Giants can ill afford to let any player, no matter how talented, jeopardize that.

Postscript: On 12/22/2011, Carlos Beltran signed a two year, $26 million contract with the 2011 World Champion St. Louis Cardinals, who lost star player Albert Pujols to the Los Angeles Angels (ten year, $254 million contract).

2nd Postscript: On 10/22/2012, the Giants eliminated Carlos Beltran and the defending champion Cardinals in the National League Championship Series.  Showing indomitable character, the Giants rallied from a three-games-to-one deficit to beat the Cardinals.  They'd rallied from a two-games-to-none deficit against the Cincinnati Reds in the first round of the playoffs (best-of-five-games series) sweeping three games in Cincinnati where the Reds had not lost three consecutive games all season.  The Giants went on to sweep the American League Champion Detroit Tigers in the World Series to capture their second championship in three years.  Buster Posey recovered in 2012 to win the National League batting championship and MVP award along with a host of other honors.  Freddie Sanchez did not recover, and did not play for the team in 2012.  Marco Scutaro and Hunter Pence--lesser talents than Beltran-- arrived as late-season acquisitions to contribute heart, prowess and whatever else the Giants needed to win the championship.  Pence's fiery motivational speeches during the playoffs were widely praised for rallying the team's spirits when it faced elimination.  Pitching and incredible defense led the way for clutch hitting.