Deep State

Posted on September 29, 2013 by camelotkidd

God, we live in interesting times!

On one hand, we have ongoing revelations from whistleblower, Edward Snowden, detailing a massive surveillance state, determined to spy on everyone, American citizens included. “Collect it all,” is the motto of NSA chief, General Keith Alexander.

On the other hand, is the recent story of General Alexander’s high tech spy HQ with a central control room designed to be a replica of the bridge of the Enterprise from Star Trek.

 “…known as the Information Dominance Center. It had been designed by a Hollywood set designer to mimic the bridge of the starship Enterprise from Star Trek, complete with chrome panels, computer stations, a huge TV monitor on the forward wall, and doors that made a ‘whoosh’ sound when they slid open and closed. Lawmakers and other important officials took turns sitting in a leather ‘captain’s chair’ in the center of the room and watched as Alexander, a lover of science-fiction movies, showed off his data tools on the big screen.”

Megalomania, anyone? As they say, you can’t make this shit up.

If C. Wright Mills were still alive he would marvel. In 1956, Mills, a prominent sociologist, wrote The Power Elite, the controversial study of the vast concentration of power that had formed in the post war era. Mills described three dominant institutions in the US–the military, the corporations and the government, with an overlap between them.
“A long tradition of sociological research documents the existence of a dominant ruling class in the United States, whose members set policy and determine national political priorities. The American ruling class is complex and competitive, and perpetuates itself through interacting families of high social standing with similar lifestyles, corporate affiliations, and memberships in elite social clubs and private schools.”

These powerful constituencies comprise what President Eisenhower warned us about in his farewell address–the military/industrial complex.

Whether Mill’s recognized it or not, historical evidence has demonstrated that during World War II, this power elite determined that the United States was to replace Great Britain as the most powerful imperialist state. The Cold War with the Soviet Union was a pretext to justify a uniquely American empire.

With the demise of the Soviet Union, and especially since 9-11, the power elite in the US has united in support of a long war against a shifting cast of villains—typically dubbed terrorists. This war on terror is a pretext to maintain a worldwide empire, like the Cold War was. Examining the evidence, it is clear that the war on terror is really about controlling oil and gas, maintaining corporate profits, and projecting financial capital into every corner of the world.

There is a shadowy, secretive, very undemocratic aspect to the maintainance of empire. The Snowden revelations have made it abundantly clear that US intelligence agencies have amassed a vast amount of power through their ability to spy on everyone. The potential for blackmail is off the charts. Especially since private contractors perform 60 % of the spy agencies’ work. Remember that Snowden was working for Booz Allen Hamilton when he was able to access and copy the crown jewels of American intelligence.

Writer Gaius Publius, raises some provocative questions about this turn of events.

“Is the upper echelon of the intelligence community running the country? The ‘deep state’ is the part that can’t be touched by the political process. Does Gen. Alexander help run it? If I had to give my own best guess, I’d say — add the ‘upper echelon billionaires’  to the intel guys, and you’ve probably listed everyone who counts as someone with a say in what happens when.”

In Turkey, they describe the deep state as a merging of the power elite with a shadowy class of criminals that rules the country.

Is that what we have in America?

My feeling, is that the deep state resides within the executive branch, where the CIA, JSOC, NSA, and all the other intelligence and para-military outfits operate. We have 17 intelligence agencies. Think about that for a minute. Seventeen. In addition to spying, these secretive military and intelligence operatives have engaged in a worldwide campaign of kidnap, torture and assassination.

“The U.S. Executive Branch agencies that conduct U.S. foreign military and domestic police operations – the White House, National Security Council, Pentagon, CIA, Departments of State, Defense and Homeland Security, National Security Agency and FBI – have an overall budget of well over $1 trillion, employ 3-4 million people, and spend more money on the military than the next 10 nations combined.”

Our status as the most powerful empire that ever existed drives these policies. Sometimes our rulers even admit this. In the heady days after invasion of Iraq, Karl Rove informed reporter Ron Suskind that:

“We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality—judiciously, as you will—we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors…and you, all of you, will be left to just study what we do.”

And, like president Bush before him, President Obama continues to fiercely defend the U.S. global empire.

“He basically came out and said the United States is an imperialist nation and we are going to do whatever we need to conquer areas to take resources from around the world. I mean, it was a really naked sort of declaration of imperialism…” 

None of this is a conspiracy. One can find documents laying out the justification for this American empire. During the Truman Administration the National Security Council issued one such document–NSC 68– that describes in chilling detail our manifest duty to control the world. 

“You cannot understand the political realities of post-WWII America without understanding the deep state and its mission...The deep state has been revealed over and over again with single bits of evidence and patterns of conduct. There is no way a reasonable person cannot come to the conclusion that the deep state exists–just looking at the consistency of U.S. foreign policy despite very different Presidents.”

If we are going to end this deep state we are going to need a coalition of liberals and conservatives, opposed to runaway executive power. This quasi-monarch astride a vast surveillance state is most certainly not what our founders envisioned.

The unprecedented coalition of liberals/progressives and conservatives/Tea Partiers which on July 24 almost passed a bill forbidding NSA spying on innocent Americans has offered the only hope that the U.S. Executive Branch’s danger to democracy can be challenged.

Stay tuned.

Update: Glenn Greenwald–much more NSA revelations to come.

 “For Greenwald — and rightly so — the question of surveillance gets to the heart of shadowy operations of governmentality and control.”

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The Ultimate Conspiracy

Posted on September 8, 2013 by camelotkidd

With the news dominated by Syria and the Obama Administration’s strenuous efforts to go to war, it’s a good time to look at the reasons why. Of course we won’t be examining the proffered excuses put forth by the administration, about upholding norms of civilized behavior and the horrors of chemical weapons.

Don’t make me laugh.

But, doesn’t American, need to bomb Syria to stop a brutal dictator, as NY Times writer Nicolas Kristof plaintively argues?

This seems to be the conventional wisdom. Our media assures us that the US is just an honest broker in these sorts of affairs, trying to sort out the issues in good faith and help the belegured Syrian citizens. There is no mention that the US has been up to it’s neck in the Syrian civil war, supporting the very  same Al-Qaeda terrorists that we are supposedly fighting in our endless “war on terror.” In fact, there’s a pretty good chance that these heroic “freedom fighters” that we are aiding are the ones that used the chemical weapons.

This support of Al-Qaeda is such a Orwellian story–where black is white, and up is down, that I find myself in agreement with Rush Limbugh, of all people.

Ick!

And, of course, like all other US foreign policy issues, there’s a back story. Most American’s don’t know anything about our history of meddling in Syria.

“Syria offers us a prime illustration of how this ahistorical propaganda system works. The press has ensured that every American now knows that Assad is a dictator and that Syria is in the middle of a bloody civil war, yet the knowledge ends there. Virtually no one discusses the aforementioned U.S.-backed 1963 coup; even fewer acknowledge the vile history of imperialism preceding this. One, however, can understand very little about what is happening in Syria (or in the rest of the Middle East) today without such historical framing.”

So, what is the desire to attack Syria about really? Let’s connect the dots.

It has been US policy to attack and bring about regime change in certain Middle Eastern countries. General Wesley Clark detailed after 9-11 that the U.S. had already made the decision to invade Syria as early as 1991

Perhaps this proposed strike on Syria is seen as a way to attack their ally–Iran. I’m old enough to remember that in the run up to the invasion of Iraq, “real men want to go to Tehran.”

“Iran refuses US currency for it’s oil trading, a direct blow to American hegemony. Dominating Iran is also seen by American war hawks as a way to control China based on the reasons stated above. These are transparently the real causes for American aggression towards Iran, a signatory to the nuclear non proliferation treaty with every right to enrich uranium for peaceful purposes. Since the nuclear red herring isn’t gaining traction, a war with Syria is seen as the next best thing.”

Maybe the attack on Syria is because of Saudi machinations, with “Bandar Bush” returning for a cameo role.

“Really what he’s doing is he’s reprising a role that he played in the 1980s when he worked with the Reagan administration to arrange money and arms for mujahideen fighters in Afghanistan and also worked with the CIA in Nicaragua to support the Contras,” says Wall Street Journal reporter Adam Entous. “So in many ways this is a very familiar position for Prince Bandar, and it’s amazing to see the extent to which veterans of the CIA were excited to see him come back because, in the words of a diplomat who knows Bandar, he brings the Arabic term wasta, which means under-the-table clout. You know his checks are not going to bounce and that he’ll be able to deliver the money from the Saudis.”

Or, perhaps this proposed attack is about something else entirely. As we have noted here many times before, US foreign policy always involves  powerful domestic constituencies. Give yourself a sucker if you guessed that one of the most powerful is the financial industry.

In a recent article, investigative reporter Greg Palest examines how US banks, working with key Clinton Administration economic advisors, sought to overturn not only US financial regulations, but world wide ones as well.

“Basically, there were secret calls going between Larry Summers and the head of Bank of America, the head of Goldman Sachs, the head of Citibank and Merrill, the five big boys, to find out what should happen to the world financial policing order. And the answer was: smash it. Summers was holding secret meetings with the big bankers to come up with a scheme to eliminate financial regulation across the planet.”

But, how does the elimination of financial regulations tie into the proposed attack on Syria? Here’s where the ultimate conspiracy comes in.

Long time Wall Street analyst and writer Ellen Brown, author of Web of Debt, makes the provocative argument that the attack on Syria is part of a plan to punish the Middle Eastern countries that resist US imposed financial deregulation.

“The “end-game” would require not just coercing support among WTO members but taking down those countries refusing to join. Some key countries remained holdouts from the WTO, including Iraq, Libya, Iran and Syria. In these Islamic countries, banks are largely state-owned; and “usury” – charging rent for the “use” of money – is viewed as a sin, if not a crime. That puts them at odds with the Western model of rent extraction by private middlemen. Publicly-owned banks are also a threat to the mushrooming derivatives business, since governments with their own banks don’t need interest rate swaps, credit default swaps, or investment-grade ratings by private rating agencies in order to finance their operations.”

My iron-clad rule of modern American political-economy, is that sooner or later you will find out that the bankers are involved. They and their horrible policies are largely responsible for the descent into neo-feudalism here at home, and the policies they are pursuing worldwide are a huge contributing factor to the death and destruction seen daily on CNN.

If there can be a positive from the mendacious campaign to stampede the American public into war with Iraq ten years ago, it’s demonstrated in the overwhelming sentiment against a war with Syria. So keep it up you peaceniks, call your Congress-critters and demand that the US not attack Syria.

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Spilling Your Guts

Posted on July 10, 2013 by camelotkidd

One of my favorite novels is Catch 22. In the novel Yossarian, the protagonist, tends to a wounded comrade named Snowden after flak hits their plane during a bombing raid. At first Yossarian thinks he has found Snowden’s wound and bandaged it. But Snowden complains of being cold and Yossarian realizes to his horror that Snowden has a much more serious wound. When Yossarian opens Snowden’s flak suit, Snowden’s guts spill out.

The recent story of NSA spying revealed by contract analyist Edward Snowden, made me recall the scene from Catch 22. In a particularlly ironic twist, both Snowden’s spill their guts. One literally and one figuratively.

Let’s get one thing out of the way. Edward Snowden is a hero for revealing NSA spying to Americans. I find it just as loathsome when President Obama, rather then President Bush, is doing the spying, unlike many Democratic partisans.

Of course, this revelation of spying is hardly a surprise. Anyone who has read James Bamford’s, Puzzle Palace, knows that the NSA and the UK’s NSA equivalent–GCHQ, have since their inception, spied on each others citizens, then exchanged the data. That way each of the agencies chiefs can stand before their respective governments and swear that, no sir, we do not spy on our own citizens. These programs evolved into a program called Echelon.

“Bamford describes Eschelon as the software controlling the collection and distribution of civilian telecommunications traffic conveyed using communication satellites, with the collection being undertaken by ground stations located in the footprint of the downlink leg.”

This program still exists. Only now it goes by a different moniker and has become vastly more comprehensive, as Snowden’s ongoing revelations make clear. These revelations, rather than focusing attention on these egregious violations by the NSA, have placed Snowden in the crosshairs of US government officials, many of whom have labeled him a traitor.

“Snowden made classified information about widespread surveillance available to the American public. That’s a curious definition of an enemy for US legislators to adopt.”

The way the US press has treated this expose has shown their servility. Our, so called, “free press” puppets the official narrative far more effectively than any state controlled media possibly could, as Glenn Greenwald, the Guardian journalist, who broke the story, makes abundantly clear.

“Our NSA stories have been published and discussed in countless countries around the world, where they have sparked shock, indignation and demands for investigation. So revealingly, it is only American journalists – and them alone – who have decided to focus their intrepid journalistic attention not on the extremist and legally dubious surveillance behavior of the US government and serial deceit by its top officials, but on those who revealed all of that to the world.”

These revelations by Snowden demonstrates how our government spies on us, and lies about it.

This spying does not make us any safer. In fact it clearly demonstrates who our government views as the enemy–us.

“The Obama administration and the NSA have claimed domestic spying on Americans is necessary to prevent ‘terrorist’ attacks. From 1970 to 2013 approximately 3,500 Americans were killed in terrorist attacks. That is around 81 deaths per year attributable to terrorism. It is estimated an average 195,000 people per year die from preventable medical errors. And as both the attacks of September 11, 2001 and the recent Boston Marathon bombings illustrate, it was the Federal government’s failure to respond to actionable intelligence gathered through traditional methods that preceded the attacks, not an absence of the information needed to prevent them. This renders the official U.S. storyline around the dangers of terrorism and ‘the government’s’ response to it contrived misdirection. The NSA is conducting increasingly intrusive domestic surveillance, but preventing ‘terrorism’ has nothing to do with its reasons for doing so.”

What’s the result of the US becoming a surveillance state? Ian Welsh has some thought that are worth pondering.

“What is being run right now is a vast experiment to see if modern technology has fixed these problems with surveillance and oppressive states.  Is it cheap enough to go full Stasi, and with that level of surveillance can you keep control over the economy, keep the levers working, make people do what you want, and not all slack off and resist passively, by only going through the motions?”

“The oligarchs are betting that the technology has made that change.  With the end of serious war between primary nations (enforced by nukes, among other things), with the creation of a transnational ruling class, and with the ability to scale surveillance, it may be possible to take and keep control indefinitely, and bypass the well understood problems of oligarchy and police and surveillance states.”

Famed whistleblower Daniel Ellsburg says that the US is a different country than when he released the Pentagon Papers.

“I hope Snowden’s revelations will spark a movement to rescue our democracy, but he could not be part of that movement had he stayed here. There is zero chance that he would be allowed out on bail if he returned now and close to no chance that, had he not left the country, he would have been granted bail. Instead, he would be in a prison cell like Bradley Manning, incommunicado.”

Thank you Edward Snowden. I hope you are granted asylum somewhere warm.

Update: At least someone gets it.

 “…yesterday a former GOP senator for the state of New Hampshire, Gordon Humphrey, emailed Snowden to tell him, “Provided you have not leaked information that would put in harms way any intelligence agent, I believe you have done the right thing in exposing what I regard as massive violation of the United States Constitution.”

“Humphrey added, “Having served in the United States Senate for twelve years as a member of the Foreign Relations Committee, the Armed Services Committee and the Judiciary Committee, I think I have a good grounding to reach my conclusion.”

“The Guardian‘s Glenn Greenwald posted the email from Humphrey and a reply from Snowden, where Snowden told Humphrey, “Thank you for your words of support. I only wish more of our lawmakers shared your principles – the actions I’ve taken would not have been necessary.”

“The media has distorted my actions and intentions to distract from the substance of Constitutional violations and instead focus on personalities,” Snowden wrote in the email. “It seems they believe every modern narrative requires a bad guy. Perhaps it does. Perhaps, in such times, loving one’s country means being hated by its government.”

Enough said.

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Tribal Two-Step

Posted on July 9, 2013 by camelotkidd

The Supreme Court just finished off a busy session with a flourish. After passing a host of pro-business rulings, and gutting the Voting Right Act, they pivoted and overturned the Defense of Marriage Act and Proposition 8.

Now most of us would agree that the ruling overturning the Defense of Marrige Act and Proposition 8 was the right one.

But my hypothosis is that the Supreme Court decision was a classic case of divide and rule.

“These cultural issues will keep conservative and progressive activists at each others throats, and divert attention from economic issues.”

The Koch brothers and other ruling plutocrats in the US don’t really give a shit about cultural issues. They have gay friends and relatives, and their wives, girlfriends and daughters can always get abortions. And cultural issues certainly do not impede their ability to sluice more of the profits their way.

But cultural issues do stoke the tribal differences between Republicans and Democrats.

We’ve seen this familiar dance step by Republican politicians with demonization of homosexuals and other divisive cultural-war related issues. But Democrats politicians have found that cultural issues are useful as well in diverting attention away from their pro-corporate policies.

“Politicians are winning liberal hearts and minds on social issues, while at the same time embracing a corporate political agenda based on ever-greater wealth for the few and increasing austerity for the many.”

This phenomenon goes to what political scientist Michael J. Smith calls the “Ratchet Effect.”

“The American political system, since at least 1968, has been operating like a ratchet, and both parties — Republicans and Democrats — play crucial, mutually reinforcing roles in its operation.

The electoral ratchet permits movement only in the rightward direction. The Republican role is fairly clear; the Republicans apply the torque that rotates the thing rightward.

The Democrats’ role is a little less obvious. The Democrats are the pawl. They don’t resist the rightward movement — they let it happen — but whenever the rightward force slackens momentarily, for whatever reason, the Democrats click into place and keep the machine from rotating back to the left.

Here’s how it works. In every election year, the Democrats come and tell us that the country has moved to the right, and so the Democratic Party has to move right too in the name of realism and electability. Gotta keep these right-wing madmen out of the White House, no matter what it takes.

Absent some countervailing pressure from what we’ll call, for short, the Left, it’s a foregone conclusion that the political system will evolve in a way that responds to the desires of the wealthy and powerful.

The Democrats depend on the Republicans to frighten their constituencies and keep them in the Democratic corral. It’s not too strong to say that in effect, they encourage the Republicans to play the bad cop. The Republicans, conversely, need a bogeyman to energize their activist base — a Godless, urban, liberal bogeyman who will tempt good Christian boys into sodomitical vice and take away people’s guns.”

The Robert’s Court just gave those conservative activists a big gay bogyman to campaign against.

Well played.

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Woops!

Posted on April 19, 2013 by camelotkidd

If you want to know how economic reports influence your world for the worse, look no further. Here’s Yves Smith at Naked Capitalism.

Linchpin Pro-Austerity Paper Rife with Errors; Recomputed Results Show No Growth Hit from High Government Debt

Economist’s are just willing tools to be used by the wealthy and powerful to justify their preferred policies. Just like the run up to the Iraq War, the facts are fixed to allow the plan to take place. Years later when the truth comes out, it’s too late.

Woops!

Update: And it should come as no surprise that the economists have ties to Wall Street billionaire Pete Peterson.

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It’s all about the rents

Posted on April 15, 2013 by camelotkidd

John Maynard Keynes was famous for his acerbic quote: Euthanize the rentiers.

How did we come to worship the rentiers in our economy instead?

I’ve been nattering on about the scourge of rentiers since CK’s inception, and how classical political economy focused on freeing an economy from rent seeking.

Lately, other writers are starting to take notice. Here’s libertarian author, Michael Lind, calling attention to the drag on the economy that these rentiers impose.

“Landlords, lenders, copyright holders and others — which use their natural or artificial monopoly power to extract excessive tolls, fees and other recurrent payments from the rest of society, including productive businesses. The fees or rents extracted by these interests constitute a kind of “private taxation” which — rather than public taxation — is the greatest threat facing America’s productive economy.”

Lind deconstructs the persistent conservative myth of government taxation and regulation being the problem, and well describes the real threat to the American economy.

“Today America’s powerful rentier interests, particularly those in the FIRE (finance, insurance and real estate) sector, are mobilizing campaign contributions and paid propaganda to promote what I called the Rentier Agenda: low taxes on those whose income is derived from capital gains; the privatization of public infrastructure and the deregulation of regulated private utilities, to generate windfall profits for investors in privatized or deregulated agencies; and a macroeconomic policy that serves the interests of creditors, at the expense of slow growth and mass unemployment, rather than productive businesses and workers.”

Of course, some writers have been at this beat far longer than yours truly. Pulitzer Prize-winning journalist David Cay Johnston, has been doing heroic work exposing how the economic deck is tilted against average Americans. His rigorously researched books –Perfectly Legal, Free Lunch and now with his latest, The Fine Print, well describe our economic disparity.

“The reality is people are now, finally — and I can claim some of the credit for this through my books and my reporting — people are looking around and saying, “Wait a minute! Starting back in 1980, I was promised that I was going to have a better life. We’d all prosper. Yet all the gains are going to the top.”

Johnston shows how the wealthy and the corporations they control have gamed our legislative system to their benefit, through the use of campaign contributions and non-stop lobbying.

“In the case of corporations, what they do is they get rules passed that prevent competitors from coming into the markets, so they can charge higher prices. As I said, all you need is a penny a day extra, from every person in America, and you have an extra billion dollars at the end of the year. This problem of rent-seeking is, then, compounded by our campaign finance system. What big business — and that’s those 2,600 companies which own 80 percent of the business assets in America – what those 2,600 companies have figured out, and their leaders have figured out, because people running these firms are very smart people, is that it is easier to mine Congress and the state legislatures for gold than to go out and earn it in the marketplace. Sometimes all you need is to get one word put in to a regulation.”

Rent seeking has been massively enabled by the forty year trend of lowering tax rates on the wealthy and the corporations they control. This low tax regime was sold on the premise that it would benefit all Americans with increased growth. It turns out that this claim was not exactly true.

Economist, Joseph Stiglitz took to the New York Times the other day to point out that the idea of low taxes on the wealthy leading to growth is ideological nonsense. And, rather than productive enterprises, this low tax rate encourages rent seeking.

“Remember, the low tax rates at the top were supposed to spur savings and hard work, and thus economic growth. They didn’t. Indeed, the household savings rate fell to a record level of near zero after President George W. Bush’s two rounds of cuts, in 2001 and 2003, on taxes on dividends and capital gains. What low tax rates at the top did do was increase the return on rent-seeking. It flourished, which meant that growth slowed and inequality grew.”

This low tax environment enabled the wealthy and the corporations they control to fund more lobbying, and better public relations describing the wonders of low taxes. Wash, rinse, and repeat. It’s a vicious circle.

What would an economy free from rent seeking look like? Here’s Michael Lind with a proposal.

“The Anti-Rentier tax agenda would seek to raise capital gains taxes on rentiers while lowering the tax burden on American workers and the profits of productive businesses. The Anti-Rentier policy reform agenda would involve increasing public ownership or utility regulation of infrastructure. Instead of cutting Social Security and Medicare to force the elderly to buy more products from parasitic private-sector monopolies and oligopolies, the Anti-Rentier coalition would favor expanding Social Security and other public social insurance, while phasing out tax subsidies for private health insurance and private retirement products. When it comes to economic management, an Anti-Rentier movement would tolerate a modest amount of inflation, in the interest of productive business and solvent government, at the expense if necessary of the creditor elite.” 

You’ll notice that this proposal is pretty much the opposite from what is proposed by our Kenyan, Muslim, Socialist President, with his policies enabling Wall Street criminals, and his latest budget calling for the cutting of Social Security.

As the French say–

Plus ça change.

 

 

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Eating Your Foot

Posted on April 11, 2013 by camelotkidd

We have an amazing amount of stupid in our country when it comes to economics.

Case in point. One of our state legislators, representative Jake Andregg, R–Lehi, claims that taking federal money for Medicaid expansion, is akin to cannibalism.

“It’s like eating your foot because you think there’s protein there.”

Unfortunately, Jake is not the only one holding on to the stupid. Even our Kenyan, Muslim, Socialist President seems to be painfully misguided, with regard to economics, as J.D. Alt at New Economic Perspectives points out.

“A few years ago, when the hysteria about the nation’s “deficit” first emerged, President Obama could have calmly pointed out that because the sovereign government issues the nation’s currency and spends it into the private sector, having a sovereign “deficit” is actually a GOOD thing. He could have shown the American people a simple chart and patiently explained that the federal government CAN’T limit its spending to what it collects back in taxes (creating a “balanced budget”) because that would mean no net new Dollars would remain in the private accounts of citizens and businesses—in a real sense, the private economy would begin starving.”

This concept is so confusing. Most American’s believe that our government is just like their small business or their household, where they have to balance the checkbook.

William Black, associate professor of economics and law at the University of Missouri-Kansas City, reminds us that a country is not like a household.

“A Nation is not like a household (even a Nation that has made the terrible mistake of giving up a sovereign currency and adopting the euro). If a Nation cuts spending on “social welfare programs” when they are most needed during a severe economic contraction two results are certain. It will increase the misery inflicted by the recession or depression. It will also slow its recovery from the economic crisis compared to what would have been the result had it maintained, or preferably, increased spending. When a Nation cuts its social spending during a serious contraction it makes the problem of inadequate demand worse. The result is that the contraction is likely to deepen and any recovery is often halted and reversed.”

Economic stupidity is not limited to Americans. It’s a world-wide phenomenon, unfortunately.

“Mark Blyth’s new book, Austerity: The History of a Dangerous Idea, gives us some important clues. Many books have been published in the last few years explaining why some economic ideas (the efficient markets hypothesis; the Black-Scholes option pricing model) are dangerous. Blyth, a professor of international political economy at Brown University, explains why a blind fixation on austerity is one of these terrible ideas. However, his book does two additional things that other books in this genre do not. First, it asks why bad economic ideas, like austerity, have such powerful consequences. Economists themselves do not think that ideas are powerful, and their models usually assume that people are motivated by straightforward self-interest rather than complicated notions. Second, it asks why these ideas keep on coming back. Every time governments have experimented with austerity, it has led to disaster, and yet a couple of decades later, their successors try again, with equally dismal consequences.”

This austerity craze goes beyond economics to ideology. And frequently this ideology rest on concepts of morality. The austerity craze is based on the idea that people lived too well during the boom years and now they are going to have to pay for their sins. Blyth describes this as an economic morality tale.

“After the initial shock wore off, American neoliberals interpreted the economic crisis as a morality tale about the need to reduce government debt by ending entitlements and hacking away at out-of-control government spending.”

Exactly. Neo-conservative and neo-liberal politicians have cynically used this crisis to do what they have always wanted to do–reduce the state down to the size that they can drown it in the bathtub. But, there’s still an element of ideology involved. Blyth ties the quest for austerity to appeasing the confidence fairy.

“These arguments acquired ever fancier mathematical trappings. Economists came up with toy models under which austerity could actually expand the economy by restoring business confidence. And this general wisdom seeped down into politics. In 2009, Alberto Alesina and Silvia Ardagna wrote a paper arguing that austerity was a signal that politicians sent to entrepreneurs, guaranteeing that tax increases would not happen in the future so that they would have the confidence to invest in the present.” 

Neo-liberal economic theories have been employed to advance a specific agenda. But economists are not gods, they generally reflect the outlook of the wealthy and powerful, to the detriment of the average worker.

“John Maynard Keynes famously argued that politicians are the unwitting slaves of the ideas of defunct economists. Blyth’s book is a practical application of Keynes’s dictum, asking what those ideas are, why they are so important, and where they came from in the first place. If Blyth is right, we are only going to get out of the mess we’re in by developing new ideas that work better than austerity and can shape a new economic order, at least for a while…The economy is much too important to leave to economists. We need to understand how ideas shape it, and Blyth’s new book provides an excellent starting point.”

And, of course, don’t eat your foot.

 

 

 

 

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All-American Oligarchy

Posted on March 30, 2013 by camelotkidd

Deconstructing “free-market” economic ideology is why I started blogging. It was hard to miss that economic ideology was being employed much like religious dogma in an effort to justify conservative neo-feudal policies.

These neo-feudal policies, best exemplified by the bi-partisan push for austerity, are being pushed by what Northwestern University, political scientist, Jeffery Winters, describes as an American oligarchy.

“Oligarchy is not inconsistent with democracy; that oligarchs need not occupy formal office or conspire together or even engage extensively in politics in order to prevail; that great wealth can provide both the resources and the motivation to exert potent political influence.”

Economics, despite all the blather about efficient markets and free trade, is really about who gets the rewards and who pays the costs in an economy. Just remember the old adage–follow the money. During the New Deal, the amount of wealth the rich controlled was reduced dramatically. Since 1980, wages for most American’s have stagnated and all the gains in productivity have gone to the top 1%, as this Congressional Committee report makes clear.

“In September of this year, the U.S. Congress Joint Economic Committee released a report called Income Inequality and the Great Recession. A statement from that report summarizes the problem. “Over the past three decades, income inequality has grown dramatically.…” Most of this inequality was observable in “…the share of total income accrued by the richest 1 percent of households. Between 1980 and 2008, their share rose from 10.0 percent to 21.0 percent, making the United States as [sic] one of the most unequal countries in the world.”

This amazing turnabout is the result of decades of tireless effort. Ever since the ink was dry on New Deal legislation, our wealthy elite have worked assiduously to return to the robber baron era, where they had all the money and the average American worker had to bow and scrape.

In 2009, Simon Johnson, former IMF chief economist, wrote an essay in The Atlantic, entitled The Quiet Coup, where he described the US as a banana republic, and our financial elite as parasitic oligarchy.

“The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform.”

We had the chance to break up this financial oligarchy in the wake of the Wall Street Crash in 2008, but chose not to. In the article, Johnson discusses how an oligarchy can stymie reform.

“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.”

Our oligarchic elite always wins when it comes to economic issues. Republicans and Democrats trip over each other to enact economic policies favoring the wealthy. Even our erstwhile, Kenyan, Muslim, Socialist President is onboard. After all, when he leaves office he will want the Clinton treatment.

President Bill Clinton was not a wealthy man when he left office. However, the policies he enacted as President, primarily the repeal of the Glass-Steagall Act, permitted him to rapidly become a millionaire by giving speeches to banks and wealthy foundations for handsome fees.

Economic ideology plays an enormous role in enabling these destructive, oligarchic policies that Republicans and Democrats politicians enact. Dr. Johnson says both parties have drank the kool-aid.

“The American financial industry gained political power by amassing a kind of cultural capital—a belief system. Once, perhaps, what was good for General Motors was good for the country. Over the past decade, the attitude took hold that what was good for Wall Street was good for the country. The banking-and-securities industry has become one of the top contributors to political campaigns, but at the peak of its influence, it did not have to buy favors the way, for example, the tobacco companies or military contractors might have to. Instead, it benefited from the fact that Washington insiders already believed that large financial institutions and free-flowing capital markets were crucial to America’s position in the world.”

Our leaders are all true believers in oligarchy. More than that, they seem determined to carry out the policy recommendations of the oligarchy, which are largely the agenda of Fix the Debt.

The true believers in this poisonous economic ideology are like the Aztec high priests; they need someone to sacrifice to the gods.

Who is it they intend to sacrifice?

Look in the mirror.

 

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Critical Pedagogy

Posted on March 26, 2013 by camelotkidd

Is our children learning?

Yeah. They’re learning to be passive, non-critical thinking consumers who don’t know anything about history. As radical intellectual Noam Chomsky, notes.

“Our kids are being prepared for passive obedience, not creative, independent lives.”

This is not a bug, but a feature of the American educational system. It simply will not work to teach critical thinking in a system where the inequalities are becoming so striking. What we get here in the US is a caste, or perhaps feudal, system of education. On one hand, we have the best education in the world for our young elite. On the other hand, the education system for the lower classes is designed to warehouse and control.

Henry Giroux, one of the foremost contemporary writers on critical pedagogy, schooling, higher education, neo-liberalism and the condition of vulnerable young people, outlines this new trajectory of the American educational system.

“We see the criminalization of disadvantaged youth, instead of the social conditions which they are forced to endure. Behaviors that were once handled by teachers, guidance counselors, and school administrators are now dealt with by the police and the criminal justice system. The consequences have been disastrous for young people.”

This assault on education is part of a massive backlash against the liberalization brought about by the 1960’s. To the American elite, it was a “Crisis of Democracy.” Noam Chomsky, articulates how much of a problem this represented.

“The crisis that they perceived was that there was too much democracy. The system used to work fine when most of the population was silent, passive, apathetic and obedient. The American rapporteur, Professor Samuel Huntington of Harvard, looked back with nostalgia to the good old days when “Truman had been able to govern the country with the cooperation of a relatively small number of Wall Street lawyers and bankers,” so that democracy flourished, with no crisis.”

Something happened in the 1960’s. American’s got it in their heads that all that rhetoric about democracy and American exceptionalism actually applied to them.

Good Lord! What were they thinking?

This outbreak of critical thought is why we are bombarded with negative connotations about the decade. Think about the dominant narrative of the 1960’s–Dirty hippies wallowing in the mud at Woodstock.

Again, if you have not read Chomsky, or for that matter, even heard of him, use the Google. He is a national treasure–a public intellectual who is not afraid to critique US economic, and foreign policies. As a noted linguist at MIT, he effortlessly deconstructs the language that is employed to control us. He has much to say about the elite response to the outbreak of organic American democracy. All this activism in the 1960’s led to calls for a transformation of the American educational system. Chomsky articulates the concerns and recommendations of the Trilateral Commission, formed in the wake of this “Crisis of Democracy.”

“One leading concern of the Trilateral scholars was the failure of the institutions responsible for the “indoctrination of the young” — the schools, the universities, the churches. They’re not indoctrinating the young properly. That’s why we have these uprisings in the streets and the efforts of the special interests to press their demands in the political arena. The Trilateral scholars therefore urged more “moderation in democracy” if the national interest is to be protected, and more effective indoctrination of the youth.”

How has the effort to indoctrinate proceeded? Very well, thank you. Our bi-partisan, anti-democratic elite have developed a model where they defund public education, push for charter schools, or some variant, and relentlessly attack teachers. Chomsky, again, deconstructing this sham educational reform.

“If you want to privatize something and destroy it, a standard method is first to defund it, so it doesn’t work anymore, people get upset and accept privatization. This is happening in the schools. They are defunded, so they don’t work well. So people accept a form of privatization just to get out of the mess.”

But what would a educational system that trained critical thinkers look like? Chomsky, who grew up in Philadelphia, attending a progressive school that emphasized student self-actualization, articulates an Enlightenment vision of education.

 “One image is of education as being a kind of vessel into which you pour water. As we all know, it is a pretty leaky vessel. Everyone has gone through this. You memorize something for an exam, and a week later, you can’t remember what the subject was. The other image is that teaching ought to be like laying out a string along which the student can progress in his or her own way. Education fosters discovery, not memorizing. The structure is designed so that the process of gaining understanding and gathering information is a creative, individual activity, often in cooperation with others.” 

How do we develop this sort of critical pedagogy, where students are encouraged to think for themselves? Is it even possible in the neo-liberal, market driven world we live in?

Professor, Henry Giroux laments the disappearance of the public intellectual, and offers a view of education as a social value instead of a commodity.

“Where students develop consciousness of freedom, recognize authoritarian tendencies, and connect knowledge to power and the ability to take constructive action.”

Giroux firmly believes that we should be educating students as critical citizens, as a means to bring about a more democratic nation. Giroux’s thinking and  work on critical pedagogy was: “…influenced by the works of Paulo Freire, arguably the most celebrated critical educator. According to his writings, Freire heavily endorses students’ ability to think critically about their education situation; this way of thinking allows them to “recognize connections between their individual problems and experiences and the social contexts in which they are embedded.”

Like liberation theology, critical pedagogy challenges status quo and hierarchy, and as such is to be ignored, ridiculed or dismissed as impractical. In our highly unequal society, education and spirituality are to be used for control, not as a means for the serfs to get any ideas about an alternative to neo-feudalism.

Remember: there is no alternative.

Update: Here’s a great example of how the privatization gig works.

 

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The Empire Strikes Back–Continued…

Posted on March 18, 2013 by camelotkidd

The recent election was quite illuminating in understanding neo-feudalism. There’s always been a tension inherent in the vision of America democracy.   On one hand are the Jeffersonians who see democracy as the natural trajectory. On the other hand, are the Hamiltonians who view democracy as mob rule. Mitt Romney’s comment about the 47% of American’s he views as moochers or takers is the most obvious expression of how the American elite view the idea of democracy. This comment clearly articulates the idea that only property owners should have the right to vote. The fear of those like Mittens, is that the property-less American voters: the “moochers,” will vote themselves goodies, ie. health care, and make the “makers” pay for it through increased taxes on them.

The road to neo-feudalism is paved with this ideology. Mittens and his ilk want to take us back before the New Deal, to the days of the robber barons, before the right to vote was extended widely. In their eyes, democracy is mob rule. If you think I’m kidding, check out the comments made by Supreme Court justice Scalia in regards to the Voting Rights Act case before the court. Scalia’s comments reflect our elite inherent contempt for democracy.

This is why the attack against the 1960’s is so vicious. The 1960’s was the high point of American democracy, to the horror of our elite. To them the 1960’s represented a “Crisis of Democracy.”

“The crisis that they perceived was that there was too much democracy. The system used to work fine when most of the population was silent, passive, apathetic and obedient.”

“In the ‘60s, something dangerous happened. Special interest groups began to try to enter the political arena and press for their demands. The special interests were women, minorities, young people, old people, farmers, workers. In other words: The population, who are supposed to sit obediently while the intelligent minority runs things in the interest of everyone.”

In response our elite plotted a counterattack. And, there was no greater target than the American education system.

That’s where we will turn to next.

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