The Threat of a Good Example

Posted on June 6, 2015 by camelotkidd

The political and economic elite in the US is threatened by an alternative model for organizing society. This is the perverse flip side to Margaret Thatchers admonishment–“there is no alternative.” However, the constant repetition of the this free market dogma in recent years is not a sign of strength as much as desperation. You might have noticed this desperation in some of the recent statements by financial leaders equating taxing capital gains with Hitler invading Poland.

The United States maintained this hostility towards any alternative to capitalism throughout the Cold War. Back then it was all part of opposing the Soviet Union and its, supposed, world-wide expansionist agenda. There was a term for it–containment. Examining declassified documents of the Cold War reveals that it was actually the threat of a good example that had US planners scared shitless. By this idea of a good example, I mean any country that freely chooses socialism through elections and then pursues economic and foreign policies independent of the US. Here’s Henry Kissinger perfectly expressing this fear our elite had that people in another country would chose an economic system different than the Washington Consensus.

“I don’t see why we need to stand by and watch a country go communist because of the irresponsibility of its own people.” 

Noam Chomsky examined this elite fear of a good example in Deterring Democracy.

“In the book, Chomsky explores the idea that the US is the only remaining world superpower that works to maintain its dominance, even ruthlessly employing violence such as outright invasions and overthrowing governments pursuing independent economic policies. He also discusses the large difference between public opinion on the Cold War, establishment American educated opinion and reality.

What’s important to note is that when the Soviet Union ceased to be, US foreign policy didn’t change. This calls into question the rational for US behavior during the Cold War. Supposedly we had to do all this horrible things and support all those murderous dictators in Third-World countries or else the Soviets would take over the world.

Cuba is the best example of how far US planners were willing to go to prevent the threat of a good example–60 years of sanctions, terrorist attacks and attempted assassinations–all to demonstrate the folly of pursuing policies that Uncle Sam found threatening. These policies have spanned more than five decades, from the launching of the Bay of Pigs invasion in 1961, to the numerous U.S.-organized assassination attempts against Fidel Castro, to the blowing up of a jetliner and other terrorist attacks from Cuban exiles operating out of the United States.

This hostility to an alternative to US controlled corporate capitalism has intensified since the demise of the USSR. During the Cold War, the US had to at least pretend to value nonaligned countries in the Third World. The US also maintained domestic policies that benefitted the majority of working and middle class Americans as a counter to Soviet propaganda that depicted capitalism as only benefitting the wealthy.

Almost makes one pine for the good old days of the Cold War.

Many Americans are starting to realize that they are now viewed as the enemy. Under  neoliberalism, policies carried out against Third World countries have been imported, while vital government social programs are shredded.

This segues into economic and foreign policies where there’s the same hostility to the threat of a good example. Want to pursue policies that benefit the majority rather than the 1%? Too bad. Want to use the Fed to enact fiscal policies that put Americans back to work rather than austerity? Too bad. Want to spend less on war and more on education and public health?

You know the answer.

You see this fear of a good example domestically with the portrayal of Elizabeth Warren and Bernie Sanders as some sort of bomb throwing anarchists that yearn to create a communist gulag. This nascent attempt to transform the Democratic party back to an entity that represents middle and working class Americans rather than another neoliberal party that represents the 1%, is viewed with hysteria.

“With Washington already broken, the last thing we need is a left-wing version of the tea party,” Delaney wrote in a Washington Post op-ed published online Thursday evening. “But I am worried about where some of the loudest voices in the room could take the Democratic Party.”

Suddenly, everyone is freaking out about modest efforts by progressive Democrats to take their party back from the neoliberals. Again, any threat of an alternative is to be ruthlessly smashed. For an example, see this editorial in the New York Times. (One can only imagine what the Wall Street Journal is saying.)

“…it is important to note that Wehner seems to look back no further than our current era of neoliberalism, which started in the ’70s. This is very convenient for someone who wants to argue that the Democrats have gone too far to the left, but it is intellectually dishonest. If we were to include the preceding New Deal period, from FDR up until the early seventies, contemporary Democrats would suddenly seem rather centrist, and Clinton Democrats would be center-right on many issues. Bernie Sanders implied this much the other day, bringing up the top marginal tax rate of 90 percent under the “radical socialist Dwight D. Eisenhower.” Looking back over the past century, it is quite clear that the Democrats have not suddenly become radically left, but that American politics as a whole have gone further to the right.”

These domestic policies favoring the 1%, pursued by both parties, are changing our country in a rather dramatic fashion, creating sub-classes of peoples with diminished rights. Here’s Bill Fletcher commenting on how neoliberalism creates winners and losers, with the losers increasingly viewed as superfluous.

“Neo-liberal capitalism, therefore, does not pretend to offer an idealistic vision of the future. There is no further sense of satisfying a collective future in which we are all in this together. Neither is there a sense that one can expect, even as a citizen, that one’s living standard will continue to exist, let alone improve. The elite, the common citizen, and the sub-citizen have all been in the process of being trained to measure and modify their expectations of life.”

This milieu is what I’ve taken to referring to as neofeudalism. Other writers have noticed it as well.

“America has fallen into neo-feudalism: A wealthy capital-owning class exists behind a servile class with no assets, and only a life of drudgery ahead of them. The master-servant relationship will only further degrade social trust and civic values. Americans can’t see themselves as equals in the political sphere when large portions are consigned to wait upon the whims of new aristocracy. Conservative politics relies on the middle class making a devil’s bargain, believing they have more in common with the rich than the poor. It won’t be long before that facade crumbles.”

Americans are starting to realize what a savage and unequal world the neoliberals have created. However, they’re also coming to realize that the chains that have been surreptitiously emplaced have precluded the possibility of a different world, an alternative to neoliberal capitalism, where people can be free to organize to make their lives better.

This threat of a good example must be destroyed at all costs.

Faced with the threat of a political uprising the ruling class would prefer that the unemployed dutifully remain on the job treadmill, keep their nose to the grindstone, and stay with the program. Because in doing so workers offer tacit acquiescence to existing political, economic, and social arrangements. To do otherwise might give the unwashed masses a chance to organize and consider alternatives. For the moneyed gentry of the 0.1% that could be truly dangerous.

I don’t like where this is headed. John F. Kennedy famously stated that: “Those who make peaceful revolution impossible will make violent revolution inevitable.”

 

 

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What Are They Good For?

Posted on May 29, 2015 by camelotkidd

What’s the point of having two political parties that both represent corporations and the wealthy? 

My first post at Camelotkidd was entitled TINA,—“There is no Alternative,” proclaimed by Margaret Thatcher about the superiority of neoliberal capitalism. This phrase, uttered with such smug assurance always pissed me off. I wasn’t very old or sophisticated but I knew it was bullshit. I mean fuck! There are lots of alternatives. We’re talking about economics, which concerns people, who have been known to do things differently.

In the 1980’s Ronald Reagan introduced neoliberalism to the world. This economic system of unfettered markets was supposed to lead to freedom, prosperity and economic growth through deregulation, privatization and globalization. Since then there’s been a parallel media campaign informing us just how wonderful our market based life is, while at the same time insisting at the top of their lungs that there is no alternative to neoliberalism, and no alternative is needed.

Looking around at our world it’s clear that this promise has only been achieved for the very wealthy 1% and the corporations they control.

What Reagan and Thatcher did that was worse than their policies, which were horrible, was to move the opposition party rightward as well. Look at the Labor party in Britain and the Democratic party here. They become neoliberal and moved rightward, aping their conservative rivals. Even conservative pundit George Will grasped this essential shift in party dynamics saying–“This represents a transfer of wealth from labor to capital unprecedented in Americans history…If a Democrat can’t make something of that, what are Democrats for.”

The reality of two corporate parties means that vast segments of the American population have become effectively disenfranchised, with little or no say in critical economic and foreign policies. We’ve now had 30 years of these policies carried out by Republicans and Democrats, with the practical effect of the US becoming an oligarchy, with a fig leaf of democracy. And, even this small bit of democracy is under assault.

“I’m talking about the myriad ways that the super-rich control the political process — and in controlling the political process, both make themselves richer and give themselves even more control over the political process. Purging voter rolls. Cutting polling place hours. Cutting back on early voting — especially in poor districts. Voter ID laws. Roadblocks to voter registration — noticeably aimed at people likely to vote progressive. Questionable-at-best voter fraud detection software, which — by some wild coincidence — tends to flag names that are common among minorities. Eliminating Election Day registration. Restricting voter registration drives. Gerrymandering — creating voting districts with the purpose of skewing elections in your favor.”

About this disenfranchisement. The salient point in all this is the fact that the so-called party of the people–the Democrats–are seemingly cool with the loss of their traditional supporters. I wonder why that is?  Maybe, it’s because the Democrats increasingly are funded by the same corporate and financial interests as are Republicans. The policies that both parties have recently embraced give a clue to their priorities. Here’s an example: Since the Wall-Street crash both parties have embraced fiscal conservatism because that’s what the rich people and corporations who fund their campaigns want.

Unfortunately, for us, here’s what you get with fiscal conservatism.

“The reality of fiscal conservatism in the United States is not cautious, evidence-based attention to which government programs do and don’t work. If that were ever true in some misty nostalgic past, it hasn’t been true for a long, long time. The reality of fiscal conservatism in the United States means slashing government programs, even when they’ve been shown to work. The reality means decimating government regulations, even when they’ve been shown to improve people’s lives. The reality means cutting the safety net to ribbons, and letting big businesses do pretty much whatever they want.” 

Here’s one of my favorite writers–Ian Welsh–making some basic organizational points about opposition parties. Ian says that to win from the left don’t offer up Republican-lite. Offer a real alternative to neo-liberalism.

“Therefore your job, as a left-winger, right-winger, or whatever, is to keep control of that party. This takes precedence over winning the most immediate election.  Winning by becoming a lite version of the other ideology does not serve you. Having the second (or every) party be neo-liberal is not in the interests of anyone but neo-liberals.”

Going forward, progressives either need to take over the Democratic party, or kill it and form a political party that offers an alternative to neoliberalism.

Update: Bernie Sanders is running for President as an avowed socialist, but the language he’s using is how Democrats used to speak.

“Sanders’ language is important here. You’ll note that he does not actually use the term “redistribution” of wealth. That’s because the term “redistribution” implies that the status quo, in which wealth is stacked at the top, is the natural order of things. The status quo is simply one of various possible distributions of wealth as determined by the current set of laws governing the country. Prior to Reagan, there was a different set of policies that led to a different distribution of wealth — strong labor rights, higher, more prohibitive marginal tax rates on the very wealthy, and so forth. As Sanders says, it’s not about “redistributing” wealth — it’s about recalibrating the distribution to one that was better. His challenge in appealing to voters will be decades of free-market agitprop that’s conditioned lower- and middle-income people to believe that policy directly challenging the super-wealthy’s right to be super-wealthy would mark the end of human civilization, and the death of God.”

 

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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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