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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Liberation Theology

Posted on March 14, 2013 by camelotkidd

The 1960’s brought momentous changes, both to the US and to the third world. Fledgling democratic governments were formed in the wake of European colonialism, and reform was the order of the day. Hierarchy and status quo were on the defensive.

The Catholic Church was strongly influenced by this reform movement. In 1962, hundreds of Catholic leaders convened in St. Peter’s Basilica in a massive display of solemn ecclesiastical pomp. It was the start of a historic three-year assembly that would change the Catholic Church in numerous ways.

“It does not seem accidental that Vatican II  took place both in the wake of, and during the time which the liberation movements in Africa and Asia brought about the dismantlement of the old empires, followed by the creation of new nation states, in which surged visions of freedom and development for the newly enfranchised populations which had previously experienced oppression, deprivation and dispossession under the yoke of colonialism.”

Catholic bishops, priests and nuns sought to integrate themselves into this changing world, and minister to their newly liberated congregation.

With Vatican II, the Catholic Church sent out the message that it was part of the modern world, said Thomas Ryan, director of the Loyola Institute for Ministry. “Not against, not above, not apart, but in the modern world,” he said. “The church sought to engage, not condemn.”

Out of Vatican II came numerous reforms to Catholicism.

“The men and women in religious orders started taking on causes, even risking arrest, when they spoke out in favor of civil rights and workers’ rights and against the war in Vietnam.”

One of the most momentous reforms to come out of Vatican II was liberation theology.

“Liberation theology is a political movement in Catholic theology which interprets the teachings of Jesus Christ in relation to a liberation from unjust economic, political, or social conditions. It has been described by proponents as “an interpretation of Christian faith through the poor’s suffering, their struggle and hope, and a critique of society and the Catholic faith and Christianity through the eyes of the poor, and by detractors as Christianized Marxism.”

Liberation theology was instantly controversial within the Church. Since the Roman Empire, the Catholic Church had been the state religion, supporting wealth and power, but suddenly Vatican II reformers were advocating Jesus Christ’s teachings, supporting the poor and powerless instead.

“The nature of the Church had changed with Constantine’s declaration in 324 A.D. that the Catholic Church would be the official Church of the Roman Empire, thereby making it the “persecuting Church,” with the Crusades, the Spanish Inquisition and complicity with Nazism among the numerous crimes which flowed from this.”

Many of the conservative church hierarchy bitterly opposed liberation theology. They viewed it as little better than Marxism. One of the foremost critics was German Cardinal Joseph Ratzinger, now recently resigned Pope Benedict XVI.

“Liberation theology, by exposing and critiquing the concentration and control of wealth and power in the hands of the few at the top of the political, economic and social pyramid, showed how the structures and institutions of capitalist society resulted in both a dispossessed, impoverished, oppressed and powerless rural peasantry and the creation of an impoverished urban proletariat. Using Marxist tools of analysis, these studies revealed that these social conditions of poverty were the deliberate and predictable results of the structures and institutions of capitalist society, and not mere accidents. That is to say, that human destruction and suffering produced in these economies was was both intentional and unavoidable, and not merely an undesirable by- product of their functioning.”

Despite conservative Catholic leaders opposition, liberation theology was embraced by many third world Catholic priests, and made great inroads in Latin America. Unsurprisingly, the US viewed liberation theology as a grave threat to its interests, and depicted it as part of a world-wide communist conspiracy.

“Liberation theology led to an empowerment of the poor, and thus had the potential of confronting the rich and powerful to demand a change in the institutional structures. Given that South America’s economies were dominated by a capitalist United States, working in cohorts with local powerful wealthy ruling groups and manipulating political power in their favor, it is not surprising that such socio-economic critiques of Central and South America would cause more than one confrontation: with the local ruling powers, with the upper hierarchy of the Church, and not far behind, the United States government, which represented big business interests.”

Sensing their opportunity, conservative forces within the Catholic church acted to halt the spread of liberation theology.

“Two historical events occurred in the Church to bring to a halt the spread of liberation theology and its political concomitants: the election of Pope John Paul II in 1978, and his appointment, in 1981, of Cardinal Joseph Ratzinger, now Pope Benedict XVI, as Prefect of the Congregation for the Doctrine of the Faith, formerly referred to as the Holy Inquisition. Both men were intractably anti-Communist and identified Marxism with the communism of the Soviet Union: the Pope from his experience living in Communist Poland, and Cardinal Ratzinger as a result of the student uprising in Tübingen University in 1968, an experience which indelibly affected his approach to life, placing him firmly on the right in the conservative camp. Here the term “conservative” means the conservation of those structures of power that already exist for the sake of order.”

Pope Benedict XVI, the recently resigned Pope, played a huge part in the reversal of liberation theology. Coincidently, he also oversaw the ongoing coverup of the child molestation scandal presently engulfing the Catholic Church.

“The pope continues to appear uncomfortable and embarrassed by the pedophile scandal, unable to grasp the scandal’s full moral and legal consequences. While Benedict has, up until recently, appeared to take seriously sexual-abuse charges against the clergy, he is ultimately a faithful follower of the traditions of the Inquisition. His primary duty seems to be to protect those who adhere to Church dogma even if they break secular laws. As such, the indiscreet actions of loyal servants of the bureaucracy are hushed up, offenders shifted to another parish and abusers permitted to continue to serve the Church. Sadly, it appears the neither the pope nor his loyal minions really comprehend (or care about) the institutional failure at the heart of the scandal: where Vatican II sought to open the Church to its faithful, Benedict seeks to limit accountability to only those who accept faithful obedience.”

Pope Benedict XVI spent his professional life working tirelessly to place the Catholic Church back where it belongs: the loyal servant of empire and protector of hierarchy. This powerful hierarchy within the Catholic Church, rather than following the path of reform, instead collaborated with the US to undo attempts at democratization, and then cover up their complicity.

The outpouring of vitriol expressed by our elite media in response to the demise of Hugo Chavez demonstrates the continued hatred of liberation theology. Chavez, more than any other Latin American leader, represented the living, breathing incarnation of liberation theology, with his concern for the poor and powerless of Venezuela and his willingness to use oil revenues to affect real improvements in their lives.

As we can see, the end of the Cold War and the demise of communism did not diminish the US’s antipathy towards liberation theology. Communism was always a pretext. What the US opposes is any sort of alternative to capitalism and empire that liberation theology represents.

In fact, examining Wikileaks materials, it is obvious that the US views liberation theology exactly like terrorism, as an extreme threat to be eradicated.

“In short, the U.S. very much views Liberation Theology, and those that adhere to it, as enemies.  And, it views itself as aligned with the Vatican in their mutual efforts to destroy this philosophy.”

Let’s face it. The US is waging war against true Christianity. For all its ballyhooed rhetoric about being a Christian nation, the persecution of liberation theology demonstrates that the US prefers a Christianity that remains a loyal supporter of capitalism and empire, rather than one that ministers to the poor and downtrodden.

Can I get an Amen?

Update: A new pope has been chosen. Meet the new boss, same as the old boss.

“Indeed, the predominant role of the Church hierarchy – from the Vatican to the bishops in the individual countries – was to give political cover to the slaughter and to offer little protection to the priests and nuns who advocated “liberation theology,” i.e. the belief that Jesus did not just favor charity to the poor but wanted a just society that shared wealth and power with the poor.”

 

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The Empire Strikes Back

Posted on March 7, 2013 by camelotkidd

I discuss neo-feudalism at CK a fair amount. Okay, a lot.

Going forward, I want to explore how Neo-feudalism came to be our reality. My decades of research have convinced me that this was no accident; shaped by benign, external forces. No, it was a very conscious plan from the beginning, involving a host of individual, corporate and intellectual actors. Economic, political, ideological, cultural, educational, legal and religious theories, all played their part in the great reversal: from a more democratic and egalitarian society, to more plutocratic and concentrated one.

“Now control of government is narrowly concentrated at the peak of the income scale, while the large majority “down below” has been virtually disenfranchised. The current political-economic system is a form of plutocracy, diverging sharply from democracy, if by that concept we mean political arrangements in which policy is significantly influenced by the public will.”

The Empire Strikes Back, is going to be a hugely complex series of posts examining how the neo-feudal plan was hatched and carried out. And, like any good crime drama, the narrative begins in the middle of the action–the 1960’s.

The 1960’s, featured student protest in academia, antiwar protest against US foreign policy, and consumer protest against corporate power. Worse still for established authority, was the moral protest occurring in religion. Especially problematic was liberation theology. Liberation theology is a political movement in Catholic theology which interprets the teachings of Jesus Christ in relation to a liberation from unjust economic, political, or social conditions.

That’s where we’re going to start.

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The Road to Neo-Feudalism

Posted on March 1, 2013 by camelotkidd

Every single day I read articles that solidify my belief that we’re headed at full speed towards neo-feudalism, with the American people asleep in the back seat. Fasten your seat belts.

“The President’s “sequester” offer slashes non-defense spending by $830 billion over the next ten years. That happens to be the precise amount we’re implicitly giving Wall Street’s biggest banks over the same time period.”

“We’re collecting nothing from the big banks in return for our generosity.  Instead we’re demanding sacrifice from the elderly, the disabled, the poor, the young, the middle class – pretty much everybody, in fact, who isn’t “too big to fail.”

“That’s injustice on a medieval scale, served up with a medieval caste-privilege flavor. The only difference is that nowadays injustices are presented with spreadsheets and PowerPoints, rather than with scrolls and trumpets and kingly proclamations.”

During the feudal era peasants paid a tribute to their lords. Think of the money we  hand over to the banks as a neo-tribute.

“In this case the tribute is made possible, not by military occupation, but by the hijacking of our political process by the corrupting force of corporate contributions.”

Thanks to these campaign contributions, both parties are all in for austerity. This economic version of bleeding the patient, goes against 80 years of established economic theory and follows the disastrous path of Europe. But, hey, all the cool kids are down with austerity. They are convinced that the American people simply must take their medicine.

President Obama is proposing to end the Sequester by cutting non-defense spending almost a trillion dollars over ten years. This offer includes cuts in Social Security and Medicare, which should come as a surprise to voters who backed his reelection. To be fair, he has asked for some increase in revenues as well.

“But if we start reintroducing cutbacks just as the US economy is beginning to show faltering signs of recovery, all of the recent gains on the budget deficit will go by the wayside. Why? Because fiscal austerity deflates economic activity, causing tax revenues to plunge and social welfare payments – unemployment insurance, welfare, food stamps – to explode.  The perverse impact, then, is that deficits get larger – precisely the opposite of what the “austerian” brigade desires, but which is happening in earnest in places like Greece and Spain.”

The Republicans would really like much deeper cuts to non-defense spending. But, truth be told, there is only one thing Republicans care about deeply.

“What matters to congressional Republicans is low taxes for the wealthy, period. They’ll take cuts to spending for the poor, and they’ll accept cuts to middle class programs if they can blame Democrats for them, but given the choice they would much rather have upper-class tax cuts than cuts to Social Security and Medicare.”

The sequester and the embrace of austerity by both parties, is just the beginning of a rough ride. If you need an example of what we’re in for, check out the nightmare that’s occurring in Europe right now.

“If we had no evidence of how to solve a debt crisis equitably, we could perhaps regard the policies of Europe’s leaders as misguided. But we have the positive example of Germany 60 years ago, and the devastating example of the Latin American debt crisis 30 years ago. The actions of Europe’s leaders are nothing short of criminal.”

If it’s austerity for us, it must be bonuses for our ruling class. Because, you know, they stole it fair and square. And, they’re not finished.

You remember who our ruling class is don’t you? Just when you thought that it couldn’t get any better for Wall Street, Jack Lew gets Senate confirmation to be our next Treasury Secretary. I thought little Timmah was horrible. Lew may be worse.

“Take a guess who will lose out as Washington decides who is going to get stuck with the bill for the drastic cuts being considered in the sequester?  No matter how much money or how many jobs Wall Street loses for the US, they still will always get their man in Washington.”

I don’t know what the tipping point will be. Do the American people retain the capacity for outrage? Or are we serfs, keeping our heads down and hoping we still have a job?

You know my answer. But I certainly don’t know what will happen going forward. We are rapidly exhausting the working within the political system options.

As President Kennedy warned:

“Those who make peaceful revolution impossible will make violent revolution inevitable.”

This is not rocket science. We did this before after the stock market crash of 1929, and the suffering of the Great Depression. The neo-liberal notion that markets are self correcting has been proven to be ideological rubbish. We need to reenact regulations and laws to prevent this sort of banana republic scale of corruption. And we must do something about the revolving door between government and the private sector. How about a tax of 50% on all income earned the first 5 years after leaving government to discourage this type of legalized bribery.

All this was known to the Founders. James Madison presciently wrote.

“If men were angels, no government would be necessary.”

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It’s Pee

Posted on February 27, 2013 by camelotkidd

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Mars Bitches

Posted on February 24, 2013 by camelotkidd

The documentary, “Hubris: Selling the Iraq War,” recently aired on MSNBC to mark the tenth-anniversary of the selling of the Iraq War by President George W. Bush’s administration.

Sometimes I wonder if American’s even remember this shameful period.

Thanks to Netflix, the wife and I have been re-watching the Dave Chappelle Show, that ran during the invasion of Iraq. While still funny as shit, the show is a reminder of the non-stop propaganda that accompanied the war. In one of his skits, Dave plays Black Bush, and adroitly demonstrates the absurdity of the Bush Administration’s numerous, ever changing, justifications for the invasion. At the end of the skit Black Bush changes the subject from the illegal invasion and instead talks about space exploration, exhorting–Mars Bitches.

It was very funny, but on a more serious note, it reminded me just how easy it is to lie to the American people. Gore Vidal always said that USA actually stood for United States of Amnesia. It’s true. Americans are clueless about history. They barely remember what happened yesterday. And, of course, there’s always American Idol, and Honey Boo Boo on the TV.

This recent historical amnesia is a feature not a bug. US media focuses on celebrities and trivial events, eschewing historical content and connection.

Both the MSNBC documentary and the Chappelle Show, also reinforced how subservient and craven the media were during this period. Then, as now, being pro-war is always good for ones media career. If you have any doubts, compare how pro-war and anti-war pundits fared, both during this period and in the present day.

“Pressures subtle and blatant were brought to bear. Phil Donahue’s nightly MSNBC talk show was virtually the only program of its type that gave antiwar voices a chance to be heard. Donahue was canceled 22 days before the invasion of Iraq. The reason was supposedly low ratings, but the New York Times intercepted an in-house memo in which a network executive complained: “Donahue represents a difficult public face for NBC in a time of war. At the same time, our competitors are waving the flag at every opportunity.”

Our media exists largely as an amazing system of propaganda, selling war the same way they sell neo-liberal economic policies that benefit the elite at the expense of everyone else.

Numerian examines the way that the media treats President Obama today, as he continues Bush’s policies of war, torture and drone assassination.

“Very little of this has been of interest to the US media. Perhaps they know something we don’t know. Perhaps they know the United States is well past the point where anything can be done about an imperial presidency that operates in almost complete secrecy, and that can intimidate both the Congress and the press into acquiescence and silence on any matter deemed to be highly classified and in the interest of national security. Perhaps they know that only the implosion of the national security state, as a result of reckless over-expansion and the ruinous financial drain it represents on the Treasury, can finally put some constraint on the military-industrial complex.”

Obama, like all other presidents, has one overarching task–maintenance of the US empire. Anyone who still has hope for a different foreign policy during Obama’s second term has not been paying attention.

This American empire is the reason for the imposition of neo-feudalism here at home. And, the propaganda used to sell empire is also used to sell the neo-liberal economic policies leading to neo-feudalism. The two are mutually reinforcing.

Americans used to be well versed in all this. Writers such as Mark Twain, made the connection between capitalism and empire.

“Mark Twain despised The American Empire. In fact, he was a founder and vice president of The American Anti-Imperialist League. It was pretty common knowledge among educated Americans at the turn of the 20th century. He wrote about it…sarcastically and vitriolic as usual…but with especial venom and passion. However, the most cutting and incisive of his loathing about the hypocrisy of Americans in their lust for wealth and imperial power.”

Capitalism needs new sources of raw materials, energy and markets. Twas always so.

“You can call it what you want, but America needs a war to pull the people together and expand into new resource rich areas. That’s what it has always done from Mexico on. And that is what it needs now.” 

This knowledge of capitalism and class used to be more widespread. Unlike today, American workers and farmers in the late 19th century understood that industrialists, bankers and railroad owners: the Carnegie’s, Morgan’s and Rockefeller’s, were their implicit enemy. Back then the bankers and industrialists of the day made no pretense about the unequal state of affairs. They used force to maintain control. Private armies, such as the Pinkertons intimidated, beat and killed workers who dared protest or strike for better working conditions.

“In the late nineteenth century, labor disputes often erupted into violent riots, and a cottage industry sprang up to serve the paramilitary needs of the modern industrialist. Local sheriffs were usually too poorly equipped or too sympathetic to labor to put down strikes. The Pinkerton Detective Agency, on the other hand, staked its reputation on crushing labor actions. Between 1866 and 1892, Pinkertons participated in seventy labor disputes and opposed over 125,000 strikers.”

Today, the elite are much more sophisticated in their approach. Instead of force, advertising, public relations and propaganda are employed to keep American’s complacent. As Alex Carey Australian writer and social psychologist who pioneered the study of corporate propaganda, described it as Taking the Risk Out of Democracy.

“The 20th century, is marked by three historic developments: the growth of democracy via the expansion of the franchise, the growth of corporations, and the growth of propaganda to protect corporations from democracy.”

So, when you watch TV or read the paper, remember what the brilliant comedian George Carlin said.

“It’s all bullshit, folks and it’s bad for ya.”

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