Blood On Their Hands

Posted on May 22, 2015 by camelotkidd

Republicans who voted to cut funding to Amtrak in the wake of the fatal crash have blood on their hands. These types of train crashes happen because cuts to funding translate into cuts to maintenance, leading to accidents that kill people. It’s just inevitable. Not if but when.

“The death toll from Tuesday’s Amtrak train derailment in Philadelphia is now at seven and is expected to rise. About a dozen passengers are still missing. Authorities now say the train was traveling at about 106 miles per hour, more than double the speed limit, as it headed into a steep curve. National Transportation Safety Board member Robert Sumwalt said the accident would have been preventable if Amtrak had installed positive train control technology on that section of track. Just hours after the crash, the Republican-controlled House Appropriations Committee rejected a Democratic amendment to offer $825 million to speed up positive train control implementation. In addition, the committee voted to cut Amtrak’s budget by $250 million.” 

I’ve been writing about public infrastructures importance since forever, a lonely voice in the wilderness arguing against privatization of the commons and touting the importance of government spending on public infrastructure in the effort to create a new green economy. Judging by the vote on train safety, instead of moving forward on infrastructure, we’re falling backwards. In fact, this could be part of a cynical plan to underfund Amtrak with the ultimate aim of privatization.

Many of our legislators are captured by corporate interests, who provide them with bountiful campaign contributions. In other countries, they call that sort of thing bribery, but here it’s just free speech.

“The chief sponsor of the bipartisan bill delaying the safety technology mandate, Missouri Republican Sen. Roy Blunt, has accepted more than $290,000 in campaign contributions from the railroad industry during his career — the fifth-highest tally in the Senate, according to data compiled by the Center for Responsive Politics (CRP), a campaign finance watchdog group. The Association of American Railroads — which counts private railroad companies and Amtrak as members — backed Blunt’s legislation to delay the mandate.”

Money is only part of the equation. Ideology drives much of the antipathy towards public mass transportation. Most lawmakers come from rural or suburban districts where the car is king and roads are sacrosanct. Mass transportation is viewed as something that urban residents (you know, those people) use rather than real Americans who drive automobiles. This ideology is backed up with cold hard cash that’s used to fund think tanks which provide intellectual justification for the present carbon based economy, including a car based transportation system.

“In an editorial titled “How Two Billionaires Are Destroying High Speed Rail in America,” Mike Vainisi observes that the push against public mass transit is being led by a think tank called the Reason Foundation, which is funded by the notorious Koch brothers.The Koch brothers’ $44 billion fortune comes largely from Koch Industries, an oil and gas conglomerate.That means they have a vested interest in those gas-guzzling single-rider vehicles that are mass transit’s competitors, the cars and trucks that use the roads that are heavily subsidized by the federal government.”

This conflict over transportation choices goes to the heart of the so-called red state–blue state conflict. I believe that the true divide is a rural vs urban one rather than a state vs state divide. The battle over infrastructure spending also reflects an unspoken economic argument between a green participatory economy that could work for the majority of Americans vs a old carbon economy that works for a few powerful oligarchs and is destroying our world.

To do this it’s important to not only maintain our infrastructure, but to build new infrastructure to move into a 21st century economy. The US spends a pittance on infrastructure compared to the rest of the developed world. We wonder endlessly why China is outpacing the US in GNP, but examining spending on infrastructure provides a clue. The US spends 2.5 % on infrastructure, while China spends 9%.

The US economy is captured by special interests, like the Koch brothers, who want to wring every dollar out of the old carbon based economy. Witness our energy and transportation policies. Supporting coal, oil and natural gas but not solar and wind and funding cars and roads but not rail and bike paths.

Once again the old carbon economy trumps a modern green one.

This goes to the heart of political-economy. Who gets what, and who pays the costs for these decisions.

Examining transportation policies exposes our deeply dysfunctional political system. For when we propose spending on infrastructure we run into the familiar argument of government as useless and the deep seated belief that private business can do anything the government can, only better. We’ve now endured a generation of these politicians waging an cynical  war on the common good by defunding and sabotaging government while at the same time decrying it as useless. And our timorous media, so fearful of being described as liberal, has repeatedly failed to sound the alarm at this epic act of vandalism. There’s also the decades long tax revolt of America’s wealthy and their allies–an entire cohort of conservative lawmakers whose entire purpose is cutting the taxes of rich people–full stop.

Again, and I can’t say this often enough, our elite don’t care about our infrastructure because that would mean taxing them.

And, so more of us must die.

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Hearts and Minds

Posted on May 16, 2015 by camelotkidd

At a party the other day a male relative repeated a familiar sentiment–“Government is the problem. We don’t need any government except the military.” Everyone around him kind of nodded and the party continued. Meanwhile, I wanted to bang my head against the door frame, repeatedly. The fact that this lazy libertarian meme has gained such acceptance is deeply disheartening.

Conservatives have won the battle of the hearts and minds with this simple idea of government as the problem. The role the federal government plays is extremely complicated and it depends on which part of the government they’re describing, so it’s impossible to counter argue this without going into extensive detail.  Meanwhile, peoples eyes glaze over and the conservative argument has triumphed again.

This libertarian/conservative narrative that government is the enemy has been years in the making, a triumph of business propaganda. It used to be conventional wisdom that federal government and its social programs helped the average American. Not anymore. Meanwhile, the federal government has changed dramatically in ways not really understood by the same average American. During the long post war economic boom a strong federal government helped ensure a more equal contest between workers and corporations. This concept has been turned on its head. Instead of serving the interests of the vast majority, the federal government has increasingly been subverted into serving corporate interests and their wealthy shareholders.

Libertarians/conservatives claim to hate a vast bureaucratic federal government and to pine for small simple state, however conservatives are only against some parts of the government. As the guy at the party articulated, they are firmly behind the neoconservative imperial project, with unlimited military spending. And, as the comments following the uprisings in Baltimore and Ferguson demonstrate, conservatives really, really like the police. Conservatives are, after all, authoritarian and reactionary. The modern conservative project in the US has essentially been about reducing taxes of rich people. They basically hate any government regulation that gets in the way of profits, with an almost pathological hatred of taxes levied against their heroic job creators.

So what factors besides business propaganda changed the attitudes of Americans about the role that the federal government played in their lives? Examining modern US history it’s clear that what changed this was the Civil Right Act of 1964. White people were cool with the federal government taxing and spending on programs that benefitted them. However, once African-Americans became the beneficiary of this federal largess, there was a backlash that was expertly harnessed to pursue conservative policies.

1964 was a pivotal year for the rise of modern conservatism. This was, of course, when the Civil Rights Act passed, and outlawed discrimination based on race, color, religion, sex, or national origin, and ended the racial segregation that had existed for so long in the South. To southerners, this was an enormous betrayal by the Democratic party, especially from President Lyndon Johnson, who was himself a Southern Democrat. The federal government had overstepped in many minds, and this was an opening for the small government conservatives to once again capture the minds of common working class people.

In a truly opportunistic fashion, the Republican Party decided to exploit the racial fears and prejudices of much of the populace, and the Southern Strategy was born. State’s rights had been trampled on by the federal government, so the thinking went, and in 1964, Barry Goldwater ran an election based on anti-New Deal and states’ rights policies. His coded racism was successful, and it earned the votes from five southern states and his own, though he lost every other state to Johnson. Though not as aggressively conservative as Goldwater, Richard Nixon pursued a similar strategy 1968, and won all of the former confederate states, turning the south into the solid Republican territory that it remains today.”

My friend Rick Perlstein has written eloquently about this divide and rule strategy pursued by our shameless conservative leaders, including Ronald Reagan, who opened his campaign for president in 1980 at the Neshoba County Fair, near where 3 civil rights activists were murdered in 1964. This opportunistic racism that has been used to encourage working class whites to vote against their own self interests.

At the same time, conservatives have changed the way that the federal government operates with their pathological insistence on tax cuts for the wealthy and corporations. This has led to the cutting of popular programs, and a shift of the tax burden onto the middle-class, causing more anger at the federal government, leading to more calls for tax cuts. Wash, rinse, repeat. Meanwhile, other changes in policies and especially in federal tax code have encouraged the offshoring of well paying jobs to third world countries with no regulations and cut rate labor costs, by US corporations who fund our legislators. These very same legislators then turn around and preach austerity and cutbacks for the rest of us.

No wonder the average American looks at the federal government with horror.

Meanwhile, conservatives have insisted that to bring about widespread prosperity the government just needs to get out of the way of heroic businessmen and their corporations, who will then create millions of jobs.

However, it’s been 40 years attempting this theory of “trickle down” and the results are in.

“Beneficiaries of low taxes and deregulation desperately want to believe that “trickle-down” works, or at least to convince middle America that it works. They want to believe, against all logic, that lower taxes mean more tax revenue. 

All this in the face of mountains of data disproving their supply-side ideas. As far back as1984 the Treasury Department concluded that most tax cuts lose revenue. More recent studies by Saez et al. and by the Economic Policy Institute found no connection between tax rates and economic growth, and Piketty, Saez, and Stantcheva determined that the optimal tax rate could be over 80 percent. 

There is also hard evidence that cutting taxes on the rich fails to stimulate job creation, and that raising taxes on the rich has the opposite, beneficial effect. The facts come from Kansas and Minnesota. Despite early optimism by trickle-down adherents, tax cuts in Kansas have been disastrous, leading to revenue losses, cutbacks in education and health care, and sluggish job growth. In Minnesota, on the other hand, tax increases on the rich have led to higher wages, low unemployment, and rapid business growth. “

This debate about what role the federal government should play is ongoing. Not just between the liberals and conservatives and Democrats and Republicans, but also between factions within the Democrat Party as the argument over the TPP between President Obama and Senator Warren illustrates. A huge unspoken component of the argument between the Democrats is due to the fact that the neoliberal wing of the Democratic party has embraced the same sort of trickle-down economic theory as the Republicans, where policies are crafted to benefit corporations with the idea that this will also benefit workers.

That these polices only benefit corporate CEO’s and the wealthy shareholders is never mentioned. Both parties exist to service the 1% with the policies they pursue, with the Republicans more upfront about it. So, for instance, with President Obama and the neoliberal Democrats we get platitudes about how great for workers and the environment these new and improved trade treaties will be. In fact, the TPP isn’t really a trade agreement as much as the formalization of corporate power through supranational tribunals and patent protections. The TPP will be also be horrible for workers and the environment.

We desperately need to birth a new political-economy that puts Americans back to work. An activist federal government could aid this effort immensely. Building out a public infrastructure, breaking up monopolies, taxing billionaires and vast family fortunes, subsidizing renewable energy, providing free health care and education are all good and noble projects a government that worked for us rather than for corporations could undertake.

New York Mayor Bill de Blasio has recently outlined a progressive manifesto. but this is just the beginnings of a long and arduous task ahead of us. Our present rulers will not go without a fight.

In the meantime, I remembered some simple counter arguments to this idea that government is evil. Next time someone repeats this argument just ask them if they like clean water, or clean air, or healthy food. Or if they enjoy driving on well maintained roads, etc. You get the idea. Even in its captured state of subservience to corporate interests the federal government still manages to make our lives better.

Update: Here’s a great example of some horrible bipartisan federal policy that will make our lives worse.

“The Trade Adjustment Assistance Act, sponsored by Rep. David Reichert (R-Wash.), would rely on $700 million in reduced Medicare spending in 2024 to pay for [sic] healthcare coverage and other benefits for workers who lose coverage because of any agreements negotiated under fast-track trade authority sought by President Barack Obama.”

 

 

 

 

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Let’s Get Ready to Rumble

Posted on April 30, 2015 by camelotkidd

We saw Jane Goodall the other night as part of a university lecture series. Her visit was controversial because she wanted to talk about the danger of GMO’s as well as her signature topic of chimpanzees. Goodall has been touring with Stephen Drucker, author of Altered Genes, Twisted Truth, a book detailing how GMO corporations have, “subverted science, corrupted government and systematically deceived the public.” Dr. Goodall wrote the forward to the book, describing it as one of the most important works of the last 50 years.

Altered Genes, Twisted Truth is the result of more than 15 years of intensive research and investigation by Druker, who came to prominence for initiating a lawsuit against the US Food and Drug Administration (FDA) that forced it to divulge its files on GM foods. Those files revealed that GM foods first achieved commercialisation in 1992 only because the FDA:

• Covered up the extensive warnings of its own scientists about their dangers.
• Lied about the facts.
• And then violated federal food safety law by permitting these foods to be marketed without having been proven safe through standard testing.

I was planning on writing about GMO’s and how the corporations pushing them have followed a familiar template to bring dangerous products to market. However, the battle between the two factions of the Democratic party over the TPP is far more pertinent. Besides, the two stories are related as you will see.

The fight between President Obama and Senator Warren involves the debate over the TPP (Trans-Pacific-Partnership). Obama is pushing Congress to grant him fast track authority to negotiate this treaty. Senator Elizabeth Warren is opposing the TPP. She wrote in the Washington Post that the TPP, “would allow foreign companies to challenge U.S. laws — and potentially to pick up huge payouts from taxpayers — without ever stepping foot in a U.S. court.”

Scores of such cases already have been brought under the another so-called trade treaty–the WTO. Senator Warren explained that

“recent cases include a French company that sued Egypt because Egypt raised its minimum wage, a Swedish company that sued Germany because Germany decided to phase out nuclear power after Japan’s Fukushima disaster, and a Dutch company that sued the Czech Republic because the Czechs didn’t bail out a bank that the company partially owned… Philip Morris is trying to use ISDS to stop Uruguay from implementing new tobacco regulations intended to cut smoking rates.”

ISDS is an acronym that means Investor-State Dispute Settlements. It would create a system of private, international tribunals through which corporations (i.e., “investors”) could sue our sovereign governments to overturn laws that might reduce the level of corporate profits that they expect to make. These corporate tribunals are a big part of the TPP and why there is such resistance to it by those such as Senator Warren.

The ISDS aspect of the TPP really exemplifies the undemocratic nature of these so-called trade treaties. In fact, rather than a trade treaty, we should view the TPP as what it truly is–a corporate coup.

And, here’s where we double back to the original story about the dangers of GMO’s. The Trans-Pacific-Partnership and its evil step-sister, the TTIP (Transatlantic Trade and Investment Partnership) would force European and Asian nations that have resisted GMO’s to allow them or else face the corporate tribunals of the ISDS.

Somewhere George Orwell is taking notes.

The fight over the TPP and TTIP represents a larger narrative. There is a battle going on for the soul of the Democratic party. Since President Clinton, the neoliberal, corporate Democrats have been ascendant, but with the middle-class in limbo, corporate profits and CEO compensation sky high and wages stagnating, there is a feeling out there that something is desperately wrong and moreover that change is required.

This contest will be between the traditional Democratic constituents–labor, environmental groups, consumer advocates, minorities, gays and lesbians–and the Wall Street and high tech elites the party has been tapping lately to fund their campaigns. It’s also largely about neoliberalism–the new religion of Democratic elites. Bill Clinton was a neoliberal, so is Obama and Hillary. Neoliberal’s believe that globalization is inevitable and benign and that the revolution in information technology is fast democratizing commerce and politics. On that note, neoliberal’s love free trade, privatization and deregulation. They also claim that the US is just like a household and must balance its budget through austerity.

Recently this wing of neoliberal Democrats has been challenged by Senator Warren on several fronts. She is joined by Senator Brown and Sanders, and the Democratic Progressive caucus, including Alan Grayson.

I’m with the progressives in this fight. The Democratic party as represented by the Clinton’s and President Obama is not much different than traditional Republicans of yore. We desperately need a political party to articulate an alternative to the type of race to the bottom, neoliberal capitalism that’s destroying our world. We need an economy that is smaller, more democratic and participatory, and especially more sustainable. We need a commons that isn’t privatized but one that is managed for all as to reduce costs for small businesses. We need to reclaim our small-d democracy, where we are citizens with rights rather than consumers with needs. We need a civic renewal where there is a sense that we’re all in this together rather than the feeling that only rich people matter.

Right now the rules are rigged against workers and the middle-class in favor of corporations and the wealthy. Former Labor Secretary Robert Reich describes this reality, and how so called trade agreements like the TPP exasperate this dynamic.

“Workers worried about keeping their jobs have been compelled to accept this transformation without fully understanding its political roots. For example, some of their economic insecurity has been the direct consequence of trade agreements that have encouraged American companies to outsource jobs abroad. Since all nations’ markets reflect political decisions about how they are organized, so-called “free trade” agreements entail complex negotiations about how different market systems are to be integrated. The most important aspects of such negotiations concern intellectual property, financial assets, and labor. The first two of these interests have gained stronger protection in such agreements, at the insistence of big U.S. corporations and Wall Street. The latter—the interests of average working Americans in protecting the value of their labor—have gained less protection, because the voices of working people have been muted.” 

This fundamental disparity in political power is the elephant in the room. Along with labor unions, the Democratic party used to represent average Americans in the undeclared class war between labor and capital. No longer. The Democrats have become the other party of capital. Professor Reich describes what this has meant for the average American worker.

“The more basic problem is that the market itself has become tilted ever more in the direction of moneyed interests that have exerted disproportionate influence over it, while average workers have steadily lost bargaining power—both economic and political—to receive as large a portion of the economy’s gains as they commanded in the first three decades after World War II. As a result, their means have not kept up with what the economy could otherwise provide them. To attribute this to the impersonal workings of the “free market” is to disregard the power of large corporations and the financial sector, which have received a steadily larger share of economic gains as a result of that power. As their gains have continued to accumulate, so has their power to accumulate even more.”

Obama has been described as a socialist by the Republicans, but he’s quite conservative. In fact progressives who wonder why the Republican party has become so deranged need to look at their own history. When President Bill Clinton moved to the right and appropriated many conservative policies the Republicans moved even further to the right as a response. Now they’re way out in crazy land.

The fight over the TPP addresses Obama’s legacy. The more dependent politicians become on their financial backers, the greater is the willingness of such politicians and their appointees to reorganize the market to the benefit of these moneyed interests. Obama wants the Clinton treatment when he retires. And to get that he has to get some important things done that the billionaires and corporations funding his retirement and historical museum want.

Obama, by this decision to fight like a wildcat for the TPP is showing his true colors.

“According to the generally progressive Democratic U.S. Senator Sherrod Brown of Ohio (who, along with Elizabeth Warren and Bernie Sanders is one of the Senate’s three leading opponents of Mr. Obama’s proposed international-trade treaties), President Obama has been lobbying Senators more insistently and more intensely on getting them to grant him “Fast Track Trade Promotion Authority” to ram these treaties through, than on any other single issue since Obama first became President in 2009. No issue, not even Obamacare nor any other, has been as important to Obama as is his getting signed into law the TPP and TTIP. It would certainly be the culmination of his Presidency if he succeeds. It would be his crowning achievement. He and his heirs will be amply rewarded if he succeeds; and that’s apparently what he really cares about.”

The brawl over the TPP will have huge implications for the Democratic party and the country going forward.

So, ladies and gentlemen, let’s get ready to rumble.

 

 

 

 

 

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Stupid Rich

Posted on April 24, 2015 by camelotkidd

“They were careless people, Tom and Daisy—they smashed up things and creatures and then retreated back into their money or their vast carelessness, or whatever it was that kept them together, and let other people clean up the mess they had made.”

F. Scott Fitzgerald wrote the Great Gatsby, in 1925, describing in lurid detail the tail end of America’s first Gilded Age. It was a cautionary tale of vast wealth, and the excess and decadence that came with it. Set in the 1920’s before the stock market crash, the story, for me, has always been a warning of what happens when a society hands the keys over to the stupid rich, who promptly drive it straight into the ditch.

It’s not a good thing when the stupid rich manage a countries affairs. Examining past empires bears this out. Not all rich people are stupid, of course, but when you pursue short term policies that benefit the wealthy above all else, like cutting taxes, public investment and much-needed services, all in accordance with conservative economic dogma, you get ruinous results for everyone else.

It has become common wisdom since Reagan that cutting the taxes of our heroic job creators will bring about a plethora of jobs for the rest of us lucky duckies. The evidence is in and the avalanche of jobs has failed to materialize. It turns out that cutting taxes on the rich only allows them to buy up our political system, ensuring more of the same policies. In fact, maybe the whole purpose of this decades long economic con was simply to cut taxes on the wealthy, full stop.

Mission accomplished, as they say.

The relentless crusade against taxes paid by the rich has led directly to the policies of austerity, including cuts to government programs that benefit the poor and the middle class, leaving them faced with decreased services and more expenses.

Want an example of stupid rich policies? Take a look at Kansas, the wholly owned subsidiary of the Koch brothers. Governor Sam Brownback followed the conservative, trickle down economic playbook to the letter, in slashing state income taxes on the wealthiest state citizens–a move supported by supply-side icon Arthur Laffer. What were the results?

“Justly dubbed a “failed experiment” for the massive deficits it has generated, the experiment also produced only lackluster job growth.”

Meanwhile, Brownback is attempting to balance his state’s budget by slashing programs that benefit the most needy residents. Salon writer Brittney Cooper, absolutely kills it in describing the results of these punitive state policies.

“Conservative disdain for the poor has reached new heights with the recent passage of the HOPE Act in Kansas earlier this month. This bill, signed into law by Governor Sam Brownback, prohibits those who receive TANF (Temporary Assistance for Needy Families) from using funds to go to movies, to go swimming, to go to theme parks, to gamble, to visit strip clubs or bars.”

Sometimes I have to stop and admire the sheer evil genius of America’s divide and rule overlords, utilizing class and race, when it come time to gin up the stereotyping and hatred of the other in their pursuit of austerity.

Years of media saturation in victim blaming has only conditioned Americans to see themselves as responsible for their lack of economic success in America. But, this blame is always shifted on to someone less powerful. Not only is there a hatred of the poor in America, but there is a sort of quiet desperation among the middle class to keep up appearances. Here, Miss Cooper touches on the details of this insidious pressure.

“Those of us solidly situated in the middle class work harder and harder with less to show for it.  That can only be justified at a psychological level if there are clear demarcations of value. So when we look at the poor, their lives need to look appreciably more difficult than ours, in order for our lives to look like middle-class lives.”

It’s a beautiful, thing for the owners. We’re so busy fighting each other, while they’re making out like bandits. Like I said, pure genius. There was a class war but it’s all over now, and the owners are finishing off the wounded workers.

You lost.

Now might be a good time to learn about the enemy, you know, Sun Tzu and all.

Here’s Yves Smith, at Naked Capitalism doling out more Oriental wisdom about America’s 1%.

“Confucius said that the beginning of wisdom was learning to call things by their proper names. The time is long past to kid ourselves about the nature of the ruling class in America and start describing it accurately, as an oligarchy.”

Much of this new oligarchy involves what economist Simon Johnston calls the “capture” of the state by the wealthy and the corporations they control. Johnson wrote the definitive article on the capture of the US by this home grown oligarchy, called The Quiet Coup.

“Every crisis is different, of course….But I must tell you, to IMF officials, all of these crises looked depressingly similar….Typically, these countries are in a desperate economic situation for one simple reason—the powerful elites within them overreached in good times and took too many risks. Emerging-market governments and their private-sector allies commonly form a tight-knit—and, most of the time, genteel—oligarchy, running the country rather like a profit-seeking company in which they are the controlling shareholders. When a country like Indonesia or South Korea or Russia grows, so do the ambitions of its captains of industry. As masters of their mini-universe, these people make some investments that clearly benefit the broader economy, but they also start making bigger and riskier bets. They reckon—correctly, in most cases—that their political connections will allow them to push onto the government any substantial problems that arise…

In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (and only in emerging markets): South Korea (1997), Malaysia (1998), Russia and Argentina (time and again)….But there’s a deeper and more disturbing similarity: elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.”

Just saying.

Update: Here’s Michael Lind with a wee suggestion–

How to demolish the oligarchy in 3 easy steps

 

 

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Manufacturing Acquiescence

Posted on April 17, 2015 by camelotkidd

We live in a second Gilded Age where fabulous wealth and grinding poverty exist uneasily. In this milieu, American elites have largely come to rely on advertising, public relations and propaganda, rather than force, as a means of controlling a restless and sometimes hostile populace. Of course, the power of the state deployed daily through police shootings remains a constant reminder of what could happen if you resist, or if you’re superfluous, or if you’re the wrong color.

I’m reading Steve Fraser’s new book, The Age of Acquiescence, where he asks the provocative question–“Why, until the sudden eruption of ­OWS — a​ flare‑up that died down rather quickly­ — was​ the second Gilded Age one of acquiescence rather than resistance?”

Fraser examines the first Gilded Age and comes to the conclusion that conditions for workers were remarkably different from our present neoliberal order. He makes clear that much of the strife that marked America’s rapid industrialization at the end of the 19th Century was sparked by the sheer alienness of early capitalism. Did capitalism–“so​ deeply disturb traditional ways of life that for several generations it seemed intolerable to many of those violently uprooted by its onrush? Did that shattering experience elicit responses, radical yet proportionate to the life‑or‑death threat to earlier, cherished ways of life and customary beliefs?”

Before the onrush of industrial capitalism in the wake of the Civil War many Americans lived on farms or in small towns within a network of small craftsman and merchants. Many were bitter that capitalism took much of that away. Workers in the first Gilded Age especially chafed at the loss of autonomy, something we confront today with a similar lack of control amidst our market driven society.

Fraser asks if today Americans have become complacent because a market system is all they have ever known. Perhaps this market based system of values has become something that’s just there, like the weather.

The modern division of American workers into their own little units figures prominently in Fraser’s analysis of the differences in the two gilded ages. Think about how Federal-Express requires their drivers to be sub-contrators, for instance. At the onset of the industrial revolution workers labored together in a great mass. There was an obvious working class and a capitalist class. It was also easier to organize into unions to represent workers interests. In fact, Fraser takes great pains to lament the loss of unions in the last 30 years and directly points to this lack of worker representation to help explain the gross inequality so visible in the US today.

There are, however, some other reasons for this modern acquiescence. Since the first Gilded Age, the American elite has spent a lot of time and effort into manufacturing this acquiescence. The effort at softer control began in ernest with the Creel Committee, organized by the Wilson Administration to whip Americans into a war hysteria prior to the US entry into WWI. On April 13, 1917, Wilson created the Committee on Public Information (CPI) to promote the war domestically while publicizing American war aims abroad. Prominent members of the committee included, Walter Lippmann, Harold Lasswell, and Edward Bernays, the nephew of Sigmond Freud. All went on to play significant roles in the burgeoning industries of advertising and public relations. Berneys even wrote a book entitled Propaganda.

Bernays described propaganda as “The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country.”

In Manufacturing Consent, Noam Chomsky and Edward Herman, examine how the American elite are able to employ advertising, public relations and propaganda in order to control the populace. They describe a propaganda model to illustrate how the modern US corporate media operates to control the narrative. It is the media’s function to “amuse, entertain and inform, and to inculcate individuals with the values, beliefs, and codes of behavior that will integrate them into the institutional structures of the larger society.”

This subtle, 24/7 propaganda effort by the corporate media goes a long way in explaining how this idea of a market based system of morality came to be accepted as completely natural. It is, after all, a system of morality that we’re talking about. The American model of capitalism is depicted as the pure embodiment of morality, where every one, rich or poor, gets exactly what they deserve, and any efforts to ameliorate this unequal outcome violates this sacred economic value system.

Advertisers in the US have figured out how to sell any number of products–from soap, to cigarettes, to nuclear power, to GMO’s, to the ultimate accessory item–your very own politician. Above all else, what they’re really selling is acquiescence to the market based value system.

Who doesn’t remember, in the wake of 9/11, President Bush admonishing Americans to be calm and go shopping.

I don’t know about you, but for me, there has to be something more. Being a consumer within a market based value system is different from being a citizen within a democratic republic, a world in which people participate in the political decision-making and in related economic decisions.

The crisis facing America isn’t just economic, it’s political and moral. The American people have become atomized, unable to imagine a collective response. They’ve forgotten their rights and freedoms as citizens and desperately need to reclaim a language that allows them to articulate a moral vision of a world where value isn’t just ascribed to the wealthy. Right now, at every level of our society, there exists the idea that only people with money matter.

This is the notion of neofeudalism that I’ve been raging against, where the wealthy have used the economic system of neoliberalism to largely reestablish the class structure of the first Gilded Age with all the bowing and scraping. After all, it’s not enough for the wealthy in America to have all the money, what they really want is aristocracy, with all the trappings.

I’ve said this before but it needs to be repeated–Fuck you, I won’t do what you tell me.

 

 

 

 

 

 

 

 

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Externalities

Posted on April 8, 2015 by camelotkidd

Powerful US corporations socialize the costs of doing business and privatize the profits. In economic speak, this socialization of costs is described as an externality. If such things as exploitation of labor, income inequality, and environmental destruction were forced to be internalized by these corporations, the costs would be prohibitively high and they would not be so incredibly profitable and able to pay their executives sky high salaries and bonuses. Stock valuations would not be in the stratosphere.

That these powerful elites and the corporations they own are allowed to externalize their costs on to society and the environment says a lot about the power structure in the US. I’ve said this before but it bears repeating. Political-economy offers the best way to understand our milieu and political-economy at the most basic is–who gets what, and who bears the costs.

John Michael Greer is a wonderful writer and a joy to read. His topics, however, are not for the squeamish. He writes quite compellingly about the end of the industrial world and how society can go forward at a much reduced state. As such, he’s an apostate to the ultimate religion in the US–technological progress. In that process he’s also a trenchant critic of our present economic activity. Here, he describes how externalities, or the shifting of costs, is actually the basis of our modern technological world that we take for granted.

“Economic life in the industrial world these days can be described, without too much inaccuracy, as an arrangement set up to allow a privileged minority to externalize nearly all their costs onto the rest of society while pocketing as much as possible the benefits themselves.”

  1. a) Every increase in technological complexity tends also to increase the opportunities for externalizing the costs of economic activity;
  1. b) Market forces make the externalization of costs mandatory rather than optional, since economic actors that fail to externalize costs will tend to be outcompeted by those that do;
  1. c) In a market economy, as all economic actors attempt to externalize as many costs as possible, externalized costs will tend to be passed on preferentially and progressively to whole systems such as the economy, society, and the biosphere, which provide necessary support for economic activity but have no voice in economic decisions;
  1. d) Given unlimited increases in technological complexity, there is no necessary limit to the loading of externalized costs onto whole systems short of systemic collapse;
  1. e) Unlimited increases in technological complexity in a market economy thus necessarily lead to the progressive degradation of the whole systems that support economic activity;
  1. f) Technological progress in a market economy  is therefore self-terminating, and ends in collapse”

If you stop for a moment and look around there are glimpses of this collapse. Global warming is the ultimate manifestation of externalities run amuck and the potential for catastrophic upheaval is quite real.

Nevertheless, it’s quite illuminating to watch conservatives and libertarians, who worship private property, attempt to grapple with the implications of this externality.

Environmental writer George Monbiot well describes the libertarian dilemma:

“So here we have a simple and coherent explanation of why libertarianism is so often associated with climate change denial and the playing down or dismissal of other environmental issues. It would be impossible for the owner of a power station, steel plant, quarry, farm or any large enterprise to obtain consent for all the trespasses he commits against other people’s property – including their bodies.

“This is the point at which libertarianism smacks into the wall of gritty reality and crumples like a Coke can. Any honest and thorough application of this philosophy would run counter to its aim: which is to allow the owners of capital to expand their interests without taxation, regulation or recognition of the rights of other people. Libertarianism becomes self-defeating as soon as it recognises the existence of environmental issues. So they must be denied.

Denial seems to be winning the day. While the US fails to address global warming or environmental devastation, the Obama administration is pushing the Trans-Pacific-Partnership (TPP), free trade pact, codifying multi-national corporations ability to externalize costs onto others. The TPP allows corporations to sue countries for costs they must bear if environmental regulations impinge on their bottom line.

I’m not kidding. In fact, externalizing costs seems to be a large component of free trade pacts  negotiated by the US. It wasn’t just labor costs, but also the ability to evade US environmental regulations, that sent US corporations to Mexico then China.

Here’s John Michael Greer with the last word on where this obsession with externalizing costs will lead to.

“…you can see the chasm opening up under the foundations of industrial society. Externalized costs don’t just go away; one way or another, they’re going to be paid, and costs that don’t appear on a company’s balance sheet still affect the economy. That’s the argument of The Limits to Growth, still the most accurate(and thus inevitably the most reviled) of the studies that tried unavailingly to turn industrial society away from its suicidal path: on a finite planet, once an inflection point is passed, the costs of economic growth rise faster than growth does, and sooner or later force the global economy to its knees.”

 

 

 

 

 

 

 

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Confidential Informants

Posted on March 25, 2015 by camelotkidd

The banks and the financial industry have an outsized role in US economic and political affairs. Yet, they’ve also been accused of engaging in an ongoing crime spree. Rigging markets, hoarding commodities, hiding massive amounts of plundered loot, evading taxes, laundering drug money from some of the most heinous drug cartels, the list goes on and on. Yet, not one banker has been charged with a crime or done any jail time.

In the last few posts–here and here–I’ve explored why.

However, maybe I’ve been looking at this the wrong way.

The intrepid and indefatigable Marcy Wheeler at the blog emptywheel.net, has an interesting thesis on why there’ve been no prosecutions of the banksters.

“To what extent have banks won themselves immunity by serving as intelligence partners for the federal government?

Wow. So, in addition to the wealth, power and class thing they have going for them, maybe the banks have been enlisted in the war-on-drugs and war-on-terror as confidential informants for the US government. Think about it: any sort of intelligence operation involves confidential informants, who are promised a pass for their own criminal conduct in exchange for information.

After I stopped laughing, I remembered the case of Whitey Bulger, the Boston-Irish mob kingpin and hit-man who served as an confidential informant for the FBI and was shielded from justice, free to carry out his own criminal activities including murder, robbery, extortion and racketeering. In 2013, to the eternal embarrassment of the FBI, he was found guilty on 31 counts, including racketeering, and was found to have been involved in 11 murders.

In a way, enlisting the banksters as intelligence partners and confidential informants makes perfect sense in our present milieu, where everything has been privatized and it’s hard to tell where government ends and corporate America begins.

Update: Marcy finds more criminality among confidential informants. I guess it’s not just banks committing all those crimes.

“The FBI gave its informants permission to break the law at least 5,658 times in a single year, according to newly disclosed documents that show just how often the nation’s top law enforcement agency enlists criminals to help it battle crime.”

 

 

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Out of Thin Air

Posted on March 12, 2015 by camelotkidd

The US has a fiat currency, where money is created out of thin air with a stroke of the keyboard. For political reasons, we allow banks to enjoy the advantage of money creation rather than having the US Treasury issue it directly.

“Financial institutions are able to borrow funds through the interbank lending market as well as the discount window and both rates charged to the bank will be below the rate that a bank imposes upon a customer therefore the bank is not constrained by the amount of reserves entered in their accounting ledgers.  The most important aspect regarding the methods that banks employ to accumulate funds to maintain solvency is that connections are established between households, firms, banks and the government.  Financial institutions therefore do not lend from reserves but create money by issuing liabilities, within this system the bank is only monetarily constrained by the amount of credit worthy borrowers wherein the solvency of the loans made rely on the ability of the initial debtor to make good on the loan.”

Ellen Brown, author of Web of Debt, argues provocatively that the ability to create money allows a cartel of international bankers to control our country.

“Today, Federal Reserve Notes and U.S. dollar loans dominate the economy of the world; but this international currency is not money issued by the American people or their government. It is money created and lent by a private cartel of international bankers, and this cartel has the United States itself hopelessly entangled in a web of debt.”

We discussed the immense power and reach of banking and finance in the last post. However, the ability to create money goes a long ways toward explaining why the, too big to fail, too big to jail, banks appear omnipotent. As Amschell Rothschild is claimed to have declared–“Give me control of a nations money supply, and I care not who makes it’s laws.”

Many Americans seem to have forgotten that President Nixon took the country off the gold standard in 1971. To be blunt, the conventional wisdom concerning money is incredibly fucked-up. Even otherwise smart and sophisticated Americans seem baffled by the idea of a fiat currency that is created out of thin air, and still falsely believe that our country is like a household, with the threat of default forever hanging over us. If you don’t believe me, examine all the wailing and rending of garments by the fiscal scolds who warn darkly of a descent into economic Armageddon, like Greece. What were the Tea Baggers so exercised about? Oh yeah, government debt.

That our executive and legislative branches make statements regularly that belie the understanding of how money is created is not an accident. I’m enough of a cynic to think that much of this misdirection on monetary policy is deliberate, in pursuit of neoliberal goals of advancing capital at labors expense.

Here’s the Congressional Budget Office (CBO) fear mongering about how the evil deficit is going to end life as we know it.

“Less National Saving and Future Income–Large federal budget deficits over the long term would reduce investment, resulting in lower national income and higher interest rates than would otherwise occur. Increased government borrowing would cause a larger share of the savings potentially available for investment to be used for purchasing government securities, such as Treasury bonds. Those purchases would crowd out investment in capital goods—factories and computers, for example—which makes workers more productive.”

And, President Obama gravely intones that, “small businesses and families are tightening their belts. Their government should, too.”

This is completely wrong but it sounds right to all the serious people who believe that people like you and I should suffer. Basically, it’s all just a fucking morality play.

The US government is not like a household, there is no threat to funding available for private investment in capital goods, and no threat to the growth rate of future national income.  The President’s and the CBO’s analysis is completely inconsistent with how the modern financial system actually works.

Speaking slowly–the only way that the US government can default on debt in its own currency is to willfully refuse to pay the debt.

There is a method to the madness, politically speaking, in articulating over and over the falsehood that the US government is funded solely through tax receipts to fund government programs and commitments. After all, this fictional fiscal constraint prevents us from funding any sort of progressive spending on healthcare or education, or even repairing our infrastructure.

Modern Monetary Theory–MMT, articulates a novel way of understanding how money is created, as well as defining a framework for progressive policy, going forward. According to MMT, the debates over the deficit and spending are political not economic problems. The fact that government can spend an unlimited amount of money does not mean it should, and ultimately the choice of how much a government should spend is a political question. MMT aims at promoting political processes that allow the will of the people to be expressed as well as possible, free of unnecessary financial constraints.

And, this is where we the people are supposed to step in and demand that our leaders discuss our economic and monetary policies in good faith without all the bullshit about deficits and balanced budget acts.

Recent history demonstrates just how dishonest and craven our leaders, Republican and Democrats, have been. The Bush, and Obama administrations shoveled trillions of dollars into Wall Street banks in the aftermath of the Wall Street crash of 2008. Where did that money come from? Did we borrow it from the Chinese? And, what about quantitative easing? Where does that money come from?

You get the idea. These are political decisions–to give money to banks but not American citizens. Not because they don’t have the money. The truth is, our leaders just don’t want to spend money on progressive policies that would help the vast majority of Americans at the expense of their banker friends.

The ultimate expression of this attitude was expressed by Obama’s Treasury Secretary Tim Geithner, who thought his job was to foam the runway for crashing banks using the money appropriated to help homeowners.

There is another choice.

The US government could use our fiat currency to carry out direct sovereign spending—the issuing of sovereign fiat dollars to pay for collective goods and services.

There is much that needs to be done. Repairing our infrastructure, educating our students, providing healthcare to all Americans, are all good and worthy goals.

The money is there, waiting.

Update: Economist, Michael Hudson, explains how quantitative easing works.

“So the Fed was pretty open in what quantitative easing is supposed to do since 2008. It’s supposed to lower the interest rates, which raises bond prices, and it inflates the stock market. And since 2008, they’ve had the largest monetary inflation history–$4 trillion of quantitative easing by the Fed. But it’s all gone into the stock market and the bond market.

So what has this done? Well, it’s helped stock and bond holders get richer. And who are the stock and bond holders? They’re the 1 percent and they’re the 10 percent. And people are wringing their hands and saying, why isn’t the economy getting richer? Why is it since 2008 economic inequality and the distribution of wealth have worsened instead of gotten closer together? Well, it’s because of quantitative easing. It’s because quantitative easing has increased the value of the stocks and the bonds that the 1 percent or the 10 percent hold, and it hasn’t helped the economy at all, because the Fed is really concerned with its constituency, which are the banks.”

 

 

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They Own the Place

Posted on March 5, 2015 by camelotkidd

The banks and financial industry have a lock on our political and economic systems, directly contributing to the growing economic inequality and bifurcated rule of law. Since Senator Dick Durbin blurted out to a radio host the power that the banking and financial industries have over the US Senate–“they frankly own the place”–the too big to fail, too big to jail banks have only become more brazen.

Rigging markets, hoarding commodities, hiding massive amounts of plundered loot, evading taxes, laundering drug money from some of the most heinous drug cartels, the list goes on and on. Yet, not one banker has been charged with a crime or done any jail time.

Well, maybe Bernie Madoff. He was sent to jail, but he fleeced rich people, and we can’t have that can we?

That the banks feel so immune to the laws that govern us points to the much larger problem of power asymmetry in this country, contributing to what I like to call: neo-feudalism.

Wikipedia has this helpful explanation of neo-feudalism:

“… a theorized contemporary rebirth of policies of governance, economy and public life reminiscent of those present in many feudal societies, such as unequal rights and legal protections for common people and for nobility.”

Does anyone else notice this two tiered justice system? I’m pretty sure I can’t go around laundering drug money and not wind up in the stir with a new and menacing roommate. The bankers, however, can pretty much do what they want.

Matt Taibbi, at Rolling Stone, is the best current financial muckraker, and his stories of banksters gone wild and Vampire Squid, are so humorous you almost forget your outrage. Almost. Here’s one of his most colorful descriptions of the bailout of the banks in the aftermath of the 2008 stock market crash:

“It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences. We thought we were just letting a friend crash at the house for a few days; we ended up with a family of hillbillies who moved in forever, sleeping nine to a bed and building a meth lab on the front lawn.”

How have banks and the financial sector become so powerful?

Examining the money the banking and financial industry have contributed, it’s clear that given the enormous amounts spent the banks and financial industry have received a pretty sweet return on their investment: the deregulation of financial derivatives and credit default swaps, the elimination of the line between investment banks and commercial banks, the increased hardship for those filing for bankruptcy, just for starters.

The Sunlight Foundation tracks corruption in the US. Here’s what they had to say about the banks and financial spending.

“Since 1997, the financial sector has spent a combined total of $3.6 billion on lobbying the federal government. The total lobbying expenses have increased by 260% since 1997. Over that same time financial sector corporate profits have gone through the roof, with the financial sector reporting up to 40% of corporate profits in recent years.”

And, there are the 3000 financial and banking lobbyists calling, e-mailing and meeting with Congress and the White House, promoting their interests, 24/7.

Taibbi, describes this lobbyist power imbalance.

“Members of Congress, when they talk about having to vote on issues like derivative reform, express frustration about the political dynamics of this debate. When they go back to their districts, nobody is standing up at town halls and shaking fists about relaxing rules at Swap Execution Facilities. On the other hand, when they return to Washington, they’re inundated with bank lobbyists who offer extensive financial backing if they play ball on these votes, while simultaneously threatening to run primary candidates if they don’t.”

It’s not just money and lobbyists. There’s a mutual ideology that says–whatever is good for the bankers is good for the country–that permeates recent Republican and Democratic administrations. This mutual ideology is cemented into place by a veritable revolving door between finance and government.

Taibbi complains how the revolving door is spinning at 78 rpm.

“…couldn’t they have found someone who isn’t a perfect symbol of the revolving-door culture under which regulators go soft on suspected Wall Street criminals, knowing they have million-dollar jobs waiting for them at hotshot defense firms as long as they play nice with the banks while still in office?”

While banks have become too big to fail, too big to jail, the evidence continues to mount that they are a drag on the productive economy.

In a properly functioning economy, a financial sector efficiently allocates capital to the productive sector of the economy that makes things and employs workers. Unfortunately, that’s not the scenario we have. Presently, the US economy is dominated by a extractive financial sector. As a new study by the Bank of International Settlements shows, this is terrible for the real economy.

The BIS has released an important paper, embedded at the end of this post, which has created quite a stir, even leading the orthodoxy-touting Economist to take note. Titled, Why does financial sector growth crowd out real economic growth?, its analysis of why too much finance is a bad thing is robust and compelling. This article is a follow up to a 2012 paper by the same authors, Stephen Cecchetti and Enisse Kharroubi, which found that when finance sectors exceeded a certain size, specifically when private sector debt topped 100% of GDP or when financial services industry professions were more than 3.9% of the work force, it became a drag on growth. Notice that this finding alone is damning as far as policy in the US is concerned, where cheaper debt, deregulation, more access to financial markets, and “financial deepening” are all seen as virtuous.

The paper starts by looking empirically at the fact that larger financial sectors are correlated with lower growth rates:

Again, to reiterate, the purpose of finance is to efficiently allocate capital for the productive economy that makes things and employees workers. An economy that works for the majority of Americans is not one of speculation in stocks and bonds, or the manipulation of exotic financial instruments such as derivatives. An economy that works for Americans is one that produces goods and services which have value for human beings.

We should be aghast at the control of our government by banks and finance and the way that there’s a different justice system for them than there is for us. This not healthy development for a democratic republic, if that term still applies. A plutocracy is probably more like it.

The infuriating thing about this state of affairs, is that we’ve been here before, back in the Gilded Age of the 1890’s, where inequality was the norm and both political parties bought and paid for by the bankers. Just like then, we desperately need a progressive movement to challenge our present banking and financial cabal.

Update: Bill Black asks the obvious question.

“So I have to ask our class of criminal bankers: “Have you no sense of decency sir, at long last?” Is there any crime so depraved that you would refuse to commit it or aid and abet its commission if it would increase your bonus?”

 

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On a fast track to the bottom

Posted on February 25, 2015 by camelotkidd

The Trans-Pacific Partnership (TPP) is a massive new trade pact that is being pushed by the Obama Administration at the behest of multi-national corporations. The TPP is fundamentally undemocratic and horrible for most Americans where it counts–in their pocketbook. Contrary to the hope and change rhetoric of the Obama candidacy, the TPP offers neither change or hope. It’s just more neoliberalism.

President Obama’s push for fast track authority to pass the TPP belies his recent progressive head fake and demonstrates beyond a shadow of a doubt that he is a corporate Democrat through and through. That the TPP is part of Obama’s pivot to Asia–China containment policy–just makes it more odious.

Trade pacts, like war authorization, expose partisanship in Washington for what it is–Kabuki theatre. Obama will find that Republicans, while professing to despise him, will still find the wherewithal to vote as their corporate sponsors insist, and support the passage of the TPP.

We’ve been discussing corporate power vis-a-vis democracy, examining who benefits from recent neoliberal economic policies. Trade pacts have been a huge part of neoliberalism, as neoliberals have insisted that new technologies of communication and transportation make free trade inevitable and desirable. However, it’s pretty clear who free trade has benefitted. Trade policies have given multi-national corporations the ability to move their operations to Mexico or China, where they can pay pennies on the dollar in labor costs, then export their products as if American made. Corporations can then pit city against city, worker against worker, with the power to go elsewhere if their demands are not met.

Examining the history of trade pacts bears this out. Trade pacts have been horrendous for American workers, whose pay has stagnated since the 1970’s, even as productivity has soared. Trade pacts have enabled American corporations to move offshore to take advantage of super low cost labor. This has led to a staggering loss of jobs and a lowering of the wages paid to surviving American workers. Millions of middle-class manufacturing and service industry jobs have been taken away from Americans and given to workers in Mexico and Asia, all to benefit American corporations. In this way, trade pacts have contributed to the soaring inequality so visible in the US today.

Trade pacts, like the TPP, come with secretive free trade courts that make a mockery of democracy and sovereignty. In fact, these free trade agreements basically enable corporate predation. For example, if a country attempts to ban smoking or mandate clean air a corporation can sue them for damages. These free trade courts are the corporate weapon of choice when faced with a democratically decided outcome that goes against their ability to plunder.

Most of what we know about the TPP has been leaked because the transcripts of the pact have not been made available, not even to our erstwhile Congressional representatives. Of course, the lobbyists, representing the most powerful corporations in the world, have not been so inconvenienced.

Luckily, there are groups that have made some of the secret negotiating details available. The Citizens Trade Campaign has identified what exactly corporations want from the TPP, and why they’re so desperate to keep the details secret.

  • Cheaper Labor Costs. Many corporations are looking for ways reduce labor costs and undercut worker power in the United States, China and throughout the world. The TPP would grant corporations easier access to labor markets in countries such as Vietnam where workers are paid even less than Chinese sweatshop workers. Whether or not corporations decide to move their production to these lower-paid countries, the threat of moving there (or of being undercut by competitors who have already done so) can be used suppress employee compensation virtually anywhere in the world.
  • New Tools for Dismantling Environmental Laws. A wide range of transnational corporations, including those in extractive industries, have pushed for investment provisions in the TPP that would enable them to challenge virtually any new law, regulation or even court decision that adversely affects their expected profits as a “regulatory taking” through international tribunals that circumvent domestic judicial systems. Similar provisions under past trade pacts have already been used to weaken portions of theClean Air Act, Endangered Species Act and Marine Mammal Protection Act in the United States, as well as the environmental and consumer safety protections of developing countries throughout the world.
  • Longer Drug Patents. The leaked U.S. proposal for an intellectual property chapter within the TPP would have the effect of extending drug patents for big pharmaceutical companies, making it harder for countries to produce or procure low-cost generic medications for people with HIV, tuberculosis and other life- threatening diseases.
  • Further Financial Deregulation. Wall Street banks, insurance companies and hedge funds want the financial services provisions of the Trans-Pacific Partnership to handcuff the steps governments can take to: protect against “too big to fail,” regulate trade in toxic assets, erect firewalls between different financial service firms and control the flow of short-term capital into and out of economies.
  • Caps on Food Safety Protections. So- called “life sciences” corporations that produce pesticides, food additives and genetically-modified organisms use trade pacts to erect barriers making it harder for countries to adopt and maintain strong food safety regulations based on the precautionary principle.
  • Concentration of Global Food Supplies. Big agribusiness middlemen want the TPP to enable them to “buy low” and “sell high” throughout the Pacific Rim, a practice that increasingly concentrates global food supplies in their hands, undercutting family farmers and often leading to wild fluctuations in food prices for consumers.
  • Greater Access to Government Contracts. A range of corporations want the TPP’s public procurement provisions to prevent governments from instituting public purchasing preferences designed to keep taxpayer dollars circulating in local economies. They also want to prevent government contracts from being used to advance a variety of other environmental, social and human rights goals.
  • Lower Taxes. Corporations that have already offshored their production to countries throughout the Pacific Rim are also looking to avoid tariffs on merchandise they’ve been importing back to the United States.

In The Great Transformation, Karl Polanyi, offers a forceful argument against a neoliberal market economy with free trade pacts and ruthless capitalism. He argues that creating a neoliberal market economy mandates that humans and the environment be transformed into commodities, which will lead to the destruction of society and the environment.

“Our thesis is that the idea of a self-adjusting market implied a stark utopia. Such an institution could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness.”

Looking around, it’s apparent what Polanyi was warning against. Our neoliberal leaders seem determined to destroy our society and our environment with schemes like the TPP. Polanyi does offer hope, saying that, historically, when the consequences of unrestrained markets becomes apparent, people revolt and insist that the market is not simply a means to itself, but that the market needs to be subordinated to democracy.

It’s time to revolt. Call President Obama and your representatives and senators and give them hell!

It’s your choice. We can have representative democracy and national sovereignty or we can have a corporate race to the bottom.

Update: Be creative and use their propaganda against them. We can do the divide and conquer thing too. Also, it doesn’t have to be entirely accurate, but the rage is important. Here what I said when I called my right-wing congressional representative. (I know. Is there any other kind?)

Dear Congressman Stewart;

Please oppose Fast Track authority for the Trans-Pacific Partnership trade pact. President Obama seems hell bent on passing this horrible piece of legislation. He obviously hates America! This trade pact takes away from American sovereignty and gives it to some pointy-headed corporate bureaucrat at the UN. We elected you to go to Washington and oppose everything Obama proposes. Get with it.

 

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