It’s Pee

Republican’s want to immediately privatize government. They hate the thought of the government doing anything for “those people.” Ever since the New Deal, Republicans have made the intellectual argument that a welfare state saps American’s freedoms, and have mounted a decades long moral crusade against the basic idea of government. In a large part, they are ideologues who view the beneficiaries of public-sector programs as takers who need the harsh lash of austerity.

“Within the US, the grotesque failure of socialism in China and the Soviet Union became a propaganda weapon in the neoliberal war against the public sector in its most innocuous forms and a core argument for the privatization of just about everything.

The Democrats used to believe in government as a solution to our problems. Today, not so much. Now their solution is Public-Private Partnerships(PPP’s) PPP’s are basically public infrastructure that the government will sell off to the ruling party’s major campaign contributors for pennies on the dollar.

“The pretense is that privatization is more efficient. But privatizers add on interest and financial fees, high executive salaries and bonuses, and turn the roads into toll roads and other infrastructure into neofeudal fiefdoms to charge monopolistic access fees for people to use. This is what has happened in Chicago when it sold off its sidewalks to let bankers finance parking meters in exchange for a loan. Chicago needed this loan because the financial lobbyists demanded that it cut taxes on commercial real estate and on the rich. So the financial sector first creates a problem by loading the economy down with debt, and then “solves” it by demanding privatization sell-offs under distress conditions.”

President Obama has especially enabled Wall Street–his biggest campaign contributer–to enrich the financial sector at the expense of everyone else.

“The man whom Obama asked to be his mentor when he joined the Senate was Joe Lieberman. He evidently gave Obama expert advice about how to raise funds from the financial class by delivering his liberal constituency to his Wall Street campaign contributors. So the problem is not that President Obama is well meaning but inept – an idealist who just can’t fight the vested interests and insiders. He’s thrown in his lot with them. In fact, he really seems to believe the right-wing, pro-Wall Street ideology – that the economy can’t function without a financial system that guarantees “savers” (the top 1%) against loss, even when the bottom 99% have to pay more and more.”

So how do we change the American economy to make it more fair and participatory, free from the distortions of the financial sector?

“The classical idea of a free market economy was radical in its way – precisely by being natural and thus getting rid of unnatural warping by special privileges for absentee landlords and banks. This led logically to socialism, which is why the history of economic thought has been dropped – indeed, excluded – from today’s academic curriculum.”

Simon Patten, the first professor of economics at the Wharton Business School, believed that there was a fourth factor of production (alongside, labor, capital and land). The forth factor is public infrastructure investment, which takes its return not in the form of profits, but in the degree to which it lowers the economy’s cost of doing business and living.

This idea is fundamentally at odds with PPP’s. Patten believed that by subsidizing public infrastructure we the people could create the conditions where a free market could flourish. Patten, like other Progressive Era economists, wanted to minimize “rent seeking.”

“The Progressive Era that emerged from classical economics understood the economic benefits of taxing unearned wealth (“rent extraction”) at the top of the economic pyramid, provide basic infrastructure services at cost rather than creating fiefdoms for privatizers to install tollbooths and make their gains tax-exempt. Radical neoliberalism has reversed this.”

This neo-liberalism is what the Democratic Party is offering. If you listened to the President’s speech and stripped away the soaring rhetoric, he talked almost exclusively about public-private partnerships as his solution to the problems we face as a nation. From health care, to education, to construction of new public works projects, it was all PPP’s.

“This is leading to debt peonage and what really is neo-feudalism. We are seeing a kind of financial warfare that is as grabbing as the old-style military conquests. The aim is the same: the land, basic infrastructure, and use of the government to extract tribute.”

How do we maintain a system of public infrastructure? And, on related note, what can we do to maintain and strengthen our democracy?

 “The proper role of government is that of preserving the public commons. To make a commons work, there needs to be some system in place to monitor the state of the commons, assess how changes will impact it, and prohibit those things that will cause harm to it.  On a purely local level, as Elinor Ostrom showed, a self-regulating commons is easy to establish and easy to maintain, since it’s in the direct self-interest of everyone who benefits from the commons to prevent anyone else from abusing it.” 

“The problem here is precisely that of centralization. The research for which economist Elinor Ostrom won her Nobel Prize a few years back showed that, by and large, effective management of a commons is a grassroots affair; those who will be most directly affected by the way the commons is managed are also its best managers.  The more distance between the managers and the commons they manage, the more likely failure becomes, because two factors essential to successful management simply aren’t there. The first of them is immediate access to information about how management policies are working, or not working, so that those policies can be adjusted immediately if they go wrong; the second is a personal stake in the outcome, so that the managers have the motivation to recognize when a mistake has been made, rather than allowing the psychology of previous investment to seduce them into pursuing a failed policy right into the ground.”

Pay attention to the policies that are rolled out in the near future by the Democrats as a solution to our problems. It’s like the old joke about someone pissing on your head and calling it rain. Except, it’s not rain, it’s pee.

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