Obama’s Role in the Militarization of Mexico

An interview with Laura Carlsen…

“Militarization is not the way to deal with Mexico’s political crisis.” Laura Carlsen

Mike Whitney— Will you explain what Plan Mexico is and how it relates to the North American Free Trade Agreement? (NAFTA)

Laura Carlsen: Plan Mexico, also called the Merida Initiative, is a three-year regional security cooperation plan devised by the former Bush administration and presented in October of 2007. The plan grew out of the extension of NAFTA into security areas, known as the Security and Prosperity Partnership. Originally Plan Mexico was to be announced in the context of the SPP trinational summit but was delayed. It is presented as a petition of the Mexican president Felipe Calderon for US help in the war on drugs but in reality it was designed in Washington as a way to “push out the borders” of the US security perimeter, that is, that Mexico would take on US security priorities including policing its southern border and allowing US companies and agents into Mexico’s intelligence and security operations.

Plan Mexico proposed $1.4 billion in mostly foreign military financing. It is referred to as a “Counternarcotics, Counterterrorism and Border Security” proposal.

MW—Shortly after he was elected president, Felipe Calderon began using the military in the so-called War on Drugs. Since then, there has been a steady rise in troop deployments and an escalation in the violence. What is the Washington’s role in this ongoing counterinsurgency operation?

Laura Carlsen: The Obama administration has supported the plan and even requested, and received from Congress, additional funds beyond what the Bush administration requested. In the three years since Calderon launched the war on drugs in Mexico with the support of the US government drug related violence has shot up to over 15,000 executions and formal reports of violations of human rights have increased sixfold. More than 45,000 solders have been deployed in streets and communities throughout Mexico. Washington recognizes serious problems with the drug war model and yet continues to claim, absurdly, that the rise in violence in Mexico is a good sign–it means that the cartels are feeling the heat, the argument runs. the plan itself does not contain any real benchmarks of what citizens should expect as signs of progress so it can continue to be funded despite its failure.

The State Department was required to submit a human rights report to release 15% of some portions of the appropriations and finally did so last summer. But the report stated that even given a lack of progress in human rights (including reported use of torture with impunity, lack of civilian justice for military forces, killings of civilians and corruption) the mere fact of reporting constituted compliance and released the funds.

So far the effort is not described as a counterinsurgency effort, because Mexico does not have a formal widespread insurgency movement. However, the targeting of grassroots opposition leaders in recent years has raised fears that dissidents are and will be a target of the increasingly militarized society.

MW— In your article you say that the Merida Initiative is the direct outgrowth of the national security framework imposed on bilateral relations. Does that mean that the Bush Administration was using the War on Drugs and the War on Terrorism to conceal its real political goals? If so, what are those goals?

Laura Carlsen: The Bush administration used the counterterrorism paradigm to extend US presence in strategic areas. In Mexico, the idea was to open up lucrative defense and intelligence contracts while aiding the rightwing government, which still faced serious questions of legitimacy due to unresolved accusations of fraud in the 2006 elections.

MW—Are there US intelligence agents, special forces or mercenaries conducting counterinsurgency operations in Mexico? Is Mexico required to allow the US military to operate in Mexico due to security and/or trade agreements?

Laura Carlsen: Mexico does not allow US soldiers on its territory. However there is a growing presence of DEA and other types of US agents in the country, as well as a private security companies. We do not have a good system for tracking the presence and activities of the private firms contracted for security and training purposes. This is a major problem.

MW—What effect has militarization had on political expression? How has it affected grass roots organizations, unions, and indigenous groups? Has there been an uptick in military-related violence, such as rape, beatings, torture and homicide?

Laura Carlsen: There has been an increase in human rights violations by the armed forces. In some regions, dissident leaders have been targeted by the military. Women, indigenous people, migrants, dissidents and youth are particularly vulnerable.

Note: “The militarization of Mexico has led to a steep increase in homicides related to the drug war. It has led to rape and abuse of women by soldiers in communities throughout the country. Human rights complaints against the armed forces have increased six-fold…. The Mexican Armed Forces are not subject to civilian justice systems, but to their own military tribunals. These very rarely terminate in convictions.” “The Perils of Plan Mexico“, Laura Carlsen, counterpunch.

MW—More than 50 Mexican human rights organizations have petitioned Congress to withdraw support for the Merida Initiative. Their letter reads:

“We respectfully request that the U.S. Congress and Department of State, in both the Merida Initiative as in other programs to support public security in Mexico, does not allocate funds or direct programs to the armed forces …

We urge the United States to consider ways to support a holistic response to security problems; based on tackling the root causes of violence and ensuring the full respect of human rights; not on the logic of combat.”

Have you seen any improvement or shift in policy since Barack Obama was elected?

Laura Carlsen: No. The administration has given its full support to the failed drug war. however, there are signs of drug policy reform in domestic policy that could eventually affect the way foreign counternarcotics efforts are viewed. The rhetoric of “ci-responsibility” is really nothing new and the efforts at reducing gunrunning and demand have not been followed up by new policies. the approach continues to be primarily military and violent, with no money whatsoever included in the Merida initiative for heath aspects such as addiction treatment or prevention.

Bio—Laura Carlsen, director of the Americas Policy Program in Mexico City, holds a B.A. in Social Thought and Institutions from Stanford University and a Masters degree in Latin American Studies, also from Stanford. In 1986 she received a Fulbright Scholarship to study the impact of the Mexican economic crisis on women and has lived in Mexico City since then. She has published numerous articles and chapters on social, economic and political aspects of Mexico and recently co-edited Confronting Globalization: Economic integration and popular resistance in Mexico, and co-authored El Café en Mexico, centroamerica y el caribe: Una salida sustentable a la crisis. Prior to joining the Americas Policy Program, where her most recent analysis can be found at www.americaspolicy.org, Carlsen was a correspondent for Latin Trade magazine, editor of Business Mexico, freelance writer and researcher. The Americas Policy Program is a program of the Center for International Policy in Washington DC, at www.ciponline.org.

Obama Is Preparing for War in South America

Interview with Eva Golinger…

1 Mike Whitney—-The US media is very critical of Venezuelan President Hugo Chavez. He’s frequently denounced as “anti-American”, a “leftist strongman”, and a dictator. Can you briefly summarize some of the positive social, economic and judicial changes for which Chavez is mainly responsible?

Eva Golinger—-The first and foremost important achievement during the Chávez administration is the 1999 Constitution, which, although not written nor decreed by Chávez himself, was created through his vision of change for Venezuela. The 1999 Constitution was, in fact, drafted – written – by the people of Venezuela in one of the most participatory examples of nation building, and then was ratified through popular national referendum by 75% of Venezuelans. The 1999 Constitution is one of the most advanced in the world in the area of human rights. It guarantees the rights to housing, education, healthcare, food, indigenous lands, languages, women’s rights, worker’s rights, living wages and a whole host of other rights that few other countries recognize on a national level. My favorite right in the Venezuelan Constitution is the right to a dignified life. That pretty much sums up all the others. Laws to implement these rights began to surface in 2001, with land reform, oil industry redistribution, tax laws and the creation of more than a dozen social programs – called missions – dedicated to addressing the basic needs of Venezuela’s poor majority. In 2003, the first missions were directed at education and healthcare. Within two years, illiteracy was eradicated in the country and Venezuela was certified by UNESCO as a nation free of illiteracy. This was done with the help of a successful Cuban literacy program called “Yo si puedo” (Yes I can). Further educational missions were created to provide free universal education from primary to doctoral levels throughout the country. Today, Venezuela’s population is much more educated than before, and adults who previously had no high school education now are encouraged to not only go through a secondary school program, but also university and graduate school.

The healthcare program, called “Barrio Adentro”, has not only provided preventive healthcare to all Venezuelans – many who never had access to a doctor before – but also has guaranteed universal, free access to medical attention at the most advanced levels. MRIs, heart surgery, lab work, cancer treatments, are all provided free of cost to anyone (including foreigners) in need. Some of the most modern clinics, diagnostic treatment centers and hospitals have been built in the past five years under this program, placing Venezuela at the forefront of medical technology.

Other programs providing subsidized food and consumer products (Mercal, Pdval), job training (Mission Vuelvan Caras), subsidies to poor, single mothers (Madres del Barrio), attention to indigents and drug addicts (Mission Negra Hipolita) have reduced extreme poverty by 50% and raised Venezuelans standard of living and quality of life. While nothing is perfect, these changes are extraordinary and have transformed Venezuela into a nation far different from what it looked like 10 years ago. In fact, the most important achievement that Hugo Chávez himself is directly responsible for is the level of participation in the political process. Today, millions of Venezuelans previously invisible and excluded are visible and included. Those who were always marginalized and ignored in Venezuela by prior governments today have a voice, are seen and heard, and are actively participating in the building of a new economic, political and social model in their country.

2 MW—On Monday, President Chavez threw a Venezuelan judge in jail on charges of abuse of power for freeing a high-profile banker. Do you think he overstepped his authority as executive or violated the principle of separation of powers? What does this say about Chavez’s resolve to fight corruption?

Eva Golinger—-President Chávez did not put anyone in jail. Venezuela has an Attorney General and an independent branch of government in charge of public prosecutions. Chávez did publicly accuse the judge of corruption and violating the law because that judge overstepped her authority by releasing an individual charged with corruption and other criminal acts from detention, despite the fact that a previous court had not granted conditional freedom or bail to the suspect. And, the judge released the suspect in a very irregular way, without the presence of the prosecutor, and through a back door. The suspect then fled the country.

This is part of Venezuela’s fight against corruption. Unfortunately – as in a lot of countries – corruption is deeply rooted in the culture. The struggle to eradicate corruption is probably the most difficult of all and will probably not be achieved until new generations have grown up with different values and education. In the meantime, the Chávez administration is trying hard to ensure that corrupt public officials pay the consequences. That judge, for example, engaged in an act of corruption and abuse of authority by illegally releasing a suspect and therefore was charged by the Public Prosecutor’s office and will be tried. It has nothing to do with what Chávez said or didn’t say, it has to do with enforcing the law.

3 MW—Why is the United States building military bases in Colombia? Do they pose a threat to Chavez or the Bolivarian Revolution?

Eva Golinger—-On October 30th, the US formally entered into an agreement with the Colombian government to allow US access to seven military bases in Colombia and unlimited use of Colombian territory for military operations. The agreement itself is purported to be directed at counter-narcotics operations and counter-terrorism. But a US Air Force document released earlier this year discussing the need for a stronger US military presence in Colombia revealed the true intentions behind the military agreement. The document stated that the US military presence was necessary to combat the “constant threat from anti-US governments in the region”. Clearly, that is a reference to Venezuela, and probably Bolivia, maybe Ecuador. It’s no secret that Washington considers the Venezuelan government anti-US, though it’s not true. Venezuela is anti-imperialist, but not anti-US. The US Air Force document also stated that the Colombian bases would be used to engage in “full spectrum military operations” throughout South America, and even talked about surveillance, intelligence and reconnaisance missions, and improving the capacity of US forces to execute “expeditionary warfare” in Latin America.

Clearly, this is a threat to the peoples of Latin America and particularly those nations targeted, such as Venezuela. Most people in the US don’t know about this military agreement, but it they did, they should question why their government, led by Nobel Peace Prize winner Barack Obama, is preparing for war in South America. And, in the midst of an economic crisis with millions of people in the US losing jobs and homes, why are millions of dollars being spent on military bases in Colombia? The US Congress already approved $46 million for one of the bases in Colombia. And surely more funds will be supplied in the future.

4 MW—What is ALBA? Is it a viable alternative to the “free trade” blocs promoted by the US?

Eva Golinger—-The Bolivarian Alliance of the Americas – Trade Agreement for the People, is a regional agreement created five years ago between Venezuela and Cuba, and now has 9 members: Bolivia, Cuba, Ecuador, Honduras, Nicaragua, Venezuela, Antigua and Barbuda, St. Vincent and the Grenadines, and Dominica. ALBA is a trade agreement based on integration, cooperation and solidarity, contrary to US trade agreements which are based on competition and exploitation. It promotes a way of trading between nations that assures mutual benefits. For example, Venezuela sells oil to Cuba and Cuba pays with services – doctors, educators and technological experts that help to improve Venezuela’s industries. Venezuela sells oil to Nicaragua and Nicaragua pays with food products, agricultural technology and aide to build Venezuela’s own agricultural industry, which long ago was abandoned by prior governments only interested in the rich oil industry. ALBA seeks to not just provide economic benefits to its member nations, but also social and cultural advances. The idea is to find ways to help members develop and progress in all aspects of society. ALBA recently created a new currency, the SUCRE, which will be used as a form of exchange between member nations, eliminating the US dollar as the standard for trade.

5 MW—Are US NGO’s and intelligence agents still trying to foment political instability in Venezuela or have those operations ceased since the failed coup?

Eva Golinger—-In fact, the funding of political groups in Venezuela, and others throughout Latin America that promote US agenda, has increased since the April 2002 coup against President Chávez. Through two principal Department of State agencies, USAID and the National Endowment for Democracy (NED), the US government has channeled more than $50 million to opposition groups in Venezuela since 2002. The USAID/NED budget to fund groups in Venezuela in 2010 is nearly $15 million, doubled from last year’s $7 million. This is a state policy of Washington, which the Obama Administration plans to amp up. They call it “democracy promotion”, but it’s really democracy subversion and destabilization. Funding political groups favorable to Empire, equipping them with resources, strategizing to help formulate political platforms and campaigns – all geared towards regime change – is a new form of invasion, a silent invasion. Through USAID and NED, and their “partner NGOs” and contractors, such as Freedom House, International Republican Institute, National Democratic Institute, Pan-American Development Foundation and Development Alternatives, Inc., hundreds of political groups, parties and programs are presently being funded in Venezuela to promote regime change against the Chávez government. US taxpayer dollars are being squandered on these efforts to overthrow a democratically elected government that simply isn’t convenient for Washington. Remember, Venezuela has 24% of world oil reserves. That’s a lot!

6 MW—How hard has Venezuela been hit by the economic crisis? Do the people understand Wall Street’s role in the meltdown?

Eva Golinger—-Actually, the Chávez government has taken important steps to shelter Venezuela from the financial crisis. People here in Venezuela absolutely understand Wall Street’s role in the crisis and know that the US capitalist-consumerist system is principally responsible for causing the financial crisis, but also the climate crisis that the world is facing. The Venezuelan government took preventive steps against the financial crisis, such as withdrawing Venezuela’s reserves from US banks two years ago, creating cushion funds to ensure social programs would not be cut and diversifying Venezuela’s oil clientele so as not to be dependent solely on US clients. Recently, several banks have been nationalized by the Venezuelan government and others have been liquidated. But this was more due to the mismanagement and internal corruption within those banks. The Venezuelan government reacted quickly to take over the banks and guarantee customers’ savings would not be lost. In fact, it’s the first time in Venezuela’s history that no customers have lost any of their money during a bank liquidation or takeover. This is part of the Chávez Administration’s policy of prioritizing social needs over economic gain.

7 MW—Here’s an excerpt from a special weekend report by Bloomberg News:

“Americans have grown gloomier about both the economy and the nation’s direction over the past three months even as the U.S. shows signs of moving from recession to recovery. Almost half the people now feel less financially secure than when President Barack Obama took office in January…Fewer than 1 in 3 Americans think the economy will improve in the next six months….Only 32 percent of poll respondents believe the country is headed in the right direction, down from 40 percent who said so in September.” (Bloomberg)

The frustration and disillusionment with the US political/economic system has never been greater in my lifetime. Do you think people in the United States are ready for their own Bolivarian Revolution and steps towards a more progressive, socialistic model of government?

Eva Golinger—-The rise of Barack Obama neutralized a growing sentiment for profound change inside the US. Hopefully, the slowdown in US activism will only be temporary. South of the border, there is tremendous change taking place. New social, political and economic models are being built by popular grassroots movements in Venezuela, Bolivia and other Latin American nations that seek economic and social justice. I believe strongly that models in process, like the Bolivarian Revolution, provide inspiration and hope to those in the US and around the world that alternatives to US capitalism do exist and can be successful.

The US has a rich history of revolution. There are many groups inside the US dedicated to building a better, more humanist system. Unity and a collective vision are essential aspects of building a strong movement capable of moving forward. Every nation has its moment in history. This is the time of Latin America. But there is great hope that the people of the US will soon unite with their brothers and sisters south of the border to bring down Empire and help build a true world community based on social and economic justice for all.

Eva Golinger, winner of the International Award for Journalism in Mexico (2009), named “La Novia de Venezuela” by President Hugo Chávez, is a Venezuelan-American attorney from New York, living in Caracas, Venezuela since 2005 and author of the best-selling books, “The Chávez Code: Cracking US Intervention in Venezuela” (2006 Olive Branch Press), “Bush vs. Chávez: Washington’s War on Venezuela” (2007, Monthly Review Press), “The Empire’s Web: Encyclopedia of Interventionism and Subversion”, “La Mirada del Imperio sobre el 4F: Los Documentos Desclasificados de Washington sobre la rebelión militar del 4 de febrero de 1992” and “La Agresión Permanente: USAID, NED y CIA”. Since 2003, Eva, a graduate of Sarah Lawrence College and CUNY Law School in New York, has been investigating, analyzing and writing about US intervention in Venezuela using the Freedom of Information Act (FOIA) to obtain information about the US Government’s efforts to destabilize progressive movements in Latin America. Her first book, The Chávez Code, has been translated and published in six languages (English, Spanish, French, German, Italian & Russian) and is presently being made into a feature film.

Obama’s China Junket

“We’re Opening Doors for Wall Street and Nothing More”

Barack Obama took Hu Jintao to task this morning, scolding the dejected-looking Chinese leader at a press conference held in Beijing. Obama delivered one ferocious jab after another, claiming that China’s dollar-peg has cost the US millions of high-paying manufacturing jobs while creating gigantic trade imbalances which have destabilized the global economy and thrust the world into severe economic contraction. Obama demanded that the Chinese government convert to market-oriented exchange rates immediately to preserve jobs in America and to end the de facto tariff that China applies to US goods through its persistent currency manipulation. Obama’s sharply-worded prepared statement left the Chinese President gasping for air while the assembled members of the western media snapped to their feet in raucous applause.

Hard to believe, isn’t it? Hard to believe that an American president would stand up for his own people and act in the national interest.

The aforementioned press conference never took place. It’s a fairy tale. Barack Obama made a few innocuous comments about repricing the renimbi, but it was all just meaningless blather concocted for the American audience. US policymakers have no intention of rocking-the-boat and upsetting their Chinese benefactors. The system works just fine as it is…for the Big money guys, that is.

Do you know the real reason that Obama is in China?

Obama is carrying on the work of George W. Bush and Henry Paulson. He’s trying to pry open Chinese markets to US financial services. That’s right, the lavish executive junket doesn’t have anything to do with human rights, climate change, or dollar/yuan rebalancing. That’s all just public relations mumbo-jumbo. 100% bunkum.

True, China’s dollar-peg creates an unfair advantage for China’s manufactured goods, but so what? The Congress could change that in a minute by applying trade sanctions. But they won’t. Because Congress is owned by Wall Street, and Wall Street thrives on the current system. Here’s how it works: China sells the US cheap lead-based widgets, and then recycles the dollars into US Treasurys and “complex and utterly worthless” financial products. This provides the gargantuan investment banks with an endless flow of cheap capital to goose stocks and fatten the bottom line. Of course, the process does have it’s shortcomings, like the fact that it crushes the domestic work-force, but that’s how it was designed to work anyway. What economists call “unsustainable imbalances” are praised at the big brokerage houses as “windfall profits”. The total destruction of the US labor movement is just an added perk for these well-heeled, flag-waving, uber-patriots.

And here’s another item that might be of interest curious readers. This is an excerpt from an interview with Morgan Stanley’s Stephen Roach:

Question: How big are China-based multinational corporations now and how do they factor into this issue of global imbalances?

Stephen Roach: “They’re a big deal. Over 60 percent of export growth over the past twelve years has come from growth by Chinese subsidiaries of Western multinationals, but again the problem I have is that too many in the United States, especially the Congress but also Washington, focus on the bilateral trade imbalance between the United States and China. That’s just a fundamental economic mistake that’s being made.” http://www.cfr.org/publication/20486/avoiding_a_uschina_trade_showdown.html
peter Roach

Hmmm. So, a large portion of China’s industrial capacity is actually “China-based multinational corporations”. Now that’s interesting. So US workers are actually competing with US industries that are using sweatshop labor to enrich themselves while savaging the American middle class. Great. I wonder how many of these “industry leaders” affix the stars-n-stripes to their lapel each morning before they trundle off to work?

This just proves that the outsourcing of jobs, the off-shoring of businesses, and the “free trade” laws are mainly the work of cutthroat American corporatists not the “rascally Chinese” as the media would like everyone to believe. China is not destroying America; blue-blooded, brandy-guzzling, Harvard-educated Americans are. It’s just good-old-fashioned class warfare….and our class is losing.

For those who want to know what Obama’s trip is really all about; ignore Obama altogether and read Treasury Secretary Timothy Geithner’s article in the Wall Street Journal, “The Road Ahead for Asia’s Economies.” It tells the whole story. Geithner candidly admits that US markets will remain stagnant for years to come and that other emerging nations (ie China) will have to develop their own domestic markets so that Wall Street speculators can attach themselves parasitically to a more succulent host.

Timothy Geithner: “As U.S. households save more and the U.S. reduces its fiscal deficit, others must spur greater growth of private demand in their own economies……We also must keep our sights on maximizing the potential of global markets. Both exports and imports remain critical stimulate the flow of knowledge and innovation that is enabling emerging economies to catch up with developed-world living standards….To achieve durable growth, all of our economies must have flexible labor markets.”

In other words, more lowering of trade barriers, more lost jobs at home, more unemployment.

Geithner again: “Each of us has recognized the importance of strong financial regulation and fiscal balance, and is pursuing these goals in ways that reflect our own circumstances but complement each others’ efforts.”

Check.

The article concludes with a spirited appeal from Geithner to China to open its markets to the gaggle of financial pirates and bank-vermin who just blew up the global system and are looking for new prey.

Geithner again: “Among other things, emerging economies must strengthen their social safety nets through sustainable health and retirement-benefit schemes,(re: Wall Street) thus reducing the need for high precautionary saving that contributes to global imbalances. Regulatory frameworks conducive to competitive markets will support private enterprise, investment and innovation. (re: MBS, CDOs, CDS and other debt-backed exotica) In the emerging economies, deeper and more efficient financial markets will enable better intermediation of savings and enhance investment productivity.(re: “Please, let G-Sax and JPM hang their shingles in Tienanmen Square. We promise we won’t blow up your financial system like we did ours.”)

Reforms are also necessary to promote cross-border private investments, while ensuring an institutional capacity and prudent regulatory framework to enable markets to absorb capital flows … finance ministers of our respective countries, we are keenly aware that our future prosperity will be founded on a continued commitment to globalization.” (Timothy Geithner, Wall Street Journal, “The Road Ahead for Asia’s Economies”)

Blah, blah, blah.

Summary: Geithner and Co. see the US economy languishing in a low-grade Depression for the foreseeable future, therefore, Wall Street must progressively move its base-of-operations eastward.

This is the real reason behind Obama’s trip to China. There’s no truth to the rumor that US policymakers care about “currency manipulation” or the ongoing looting of the American middle class. That’s rubbish. China’s “dollar-peg” essentially serves the interests of the giant multinational corporations and Wall Street speculators who own the media, the courts, the congress, the White House and most of the country.

Is Capitalism on the Ropes?

Interview with Michael D. Yates and Fred Magdoff…

1. Mike Whitney—In your new book, “The ABCs of the Economic Crisis: What Working People Need to Know”, you allude to right wing think tanks, like the Heritage Foundation and the American Enterprise Institute, which promote a “free market” ideology. How successful have these organizations been in shaping public attitudes about capitalism? Do you think that attitudes are beginning to change now that people understand the role that Wall Street and the big banks played in creating the crisis? (“The ABCs of the Economic Crisis: What Working People Need to Know” By Fred Magdoff and Michael Yates, Monthly Review Press)

Michael Yates: Corporate America began to wage what turned out to be a one-sided war against working people in the mid-to late-1970s, when it became apparent that the post-World War Two “Golden Age” of U.S. capitalism was over. As profit rates fell, businesses began to develop a strategy for restoring them. This strategy had many prongs, and one of them was ideological, that is, a struggle for “hearts and minds,” to use a military term now being applied to Afghanistan. The presumed failure of Keynesian economics, marked by the simultaneous existence of escalating inflation and unemployment, gave the ideological struggle its foundation. Maybe there had been too many restrictions placed on the market, and these restrictions (minimum wages, health and safety regulations, laws facilitating union organizing in labor markets; public assistance in the form of money grants, housing subsidies, and the like; restrictions on the flow of money internationally) had led to results opposite those that liberal Keynesians had thought most likely. If these complex arguments could be tied to simple cliches, like “get the government off our backs,” “the unions have gotten too powerful” (with always a hint that they are too radical thrown into the argument), and “welfare queens” (with that always popular whiff of racism), they could provide ideological cover for what was really a matter of corporate economics, namely the making of money.

This ideological attack bore fruit quickly. President Carter appointed Paul Volcker to chair the Federal Reserve Board of Governors, and Volcker, under the guise of fighting inflation, immediately began to snuff the life out of working class communities by forcing interest rates up to nearly 20 percent. Today, Volcker is treated like a hero by Democrats and above reproach (though ignored by President Obama’s more right-wing economic advisors), which shows just how far to the right economic discourse has moved. What Carter began, Reagan completed, firing the Air Traffic Controllers and putting the nail in labor’s coffin. Behind the scenes in all of this and growing in strength for the next twenty years (funded by wealthy business leaders) or so were the right-wing think tanks you mention. Just as retired generals go to work for military contractors and defeated politicians become lobbyists, government economic advisors get jobs at Heritage or the American Enterprise Institute or the Cato Institute. The staffs of these ideological centers churn out endless position papers and studies, which find their way into our newspapers and the offices of our congresspersons. A gigantic network of professors, journalists, politicians, lobbyists, and, today, a television network (Fox) bombard us with right-wing propaganda. That all of this has been successful is seen by the fact that the shibboleths of neoliberalism—such as the needs for privatization of public entities, the free reign of markets, the obviousness of the success of welfare reform, the evils of raising the minimum wage—are all commonplaces today.

While the public now knows that something is rotten, I am not sure that neoliberal ideas are so under attack that they will lose their sway. I think that the tenacity of these ideas owes something to the lack of an ideological alternative, which, in turn, is due to the abject failure of organized labor to provide one. For example, we need universal health care. Labor, however, has not consistently argued in favor of this or supported it at all. Now Congress is poised to enact healthcare legislation that might well be worse than the profit-driven system we have all come to hate. Labor should refuse to support this legislation, but I doubt it will. Then, when the new healthcare plans fail to deliver the goods, the right-wing will be lying in wait, ready to pounce and say, “See, we told you so. The government always makes things worse.” In other words, until there is a radical ideology to replace right-wing thinking, the latter is unlikely to lose its drawing power.

Fred Magdoff: Although these institutions were very successful, along with a number of other forces, in shaping public attitudes toward the economy, the reality of the current severe economic conditions are causing many, including some economists, to rethink their views of how “efficiently” markets function in the real world (as opposed to their ideological make-believe world) and that some different approaches may be needed. People seem to understand that the “big players” played a major role in the crisis, but most of the anger has been placed on the outrageous salaries of the top echelon. Of course, this is just “chump change” compared to the massive amounts at that are transferred to the wealthy through the speculative casino that our economy has become.

2. MW—Socialism has a huge public relations problem. Wouldn’t you agree that socialism has been effectively discredited in the U.S. media and that, even now–with unemployment soaring at 10 percent and more than 300,000 foreclosures per month–the average American worker still believes in the virtues of capitalism? How do you explain this phenomenon?

Michael Yates: Part of my answer here can be seen in my response to your first question. Socialism has, indeed, been discredited here, partly due to its rejection by its natural supporter, namely the labor movement. The CIO expelled in the late 1940s and early 1950s the left-wing forces who built the great industrial unions. When it did this, it abandoned the worker-centered ideology that might have laid the basis for support here for at least the kind of social democracy we find in the Scandinavian nations. This left the ideological field to the enemies of social democracy and socialism. Of course, we cannot ignore the long and inglorious history of police-state repression of those persons and organizations that championed socialism. Our government has never hesitated to arrest, imprison, and even kill the enemies of capitalism. So it has been dangerous to be a radical here, though not so much today when radical ideas aren’t taken seriously and there are no powerful radical organizations left. Suppose that after the Second World War, the left in the labor movement had grown, and the left-led unions had continued to successfully organize workers and win good collective bargaining agreements. Suppose that they had built upon their impressive worker education programs, made inroads in the South, and fought hard against U.S. imperialism and the Cold War. We might have a much different political terrain on which to fight today.

Two other factors that must be considered in the attachment of the working class to capitalism are racism and imperialism. In the past, employers routinely pitted white workers against black, and one weapon they used was to associate black workers (and the civil rights movement) with communism (It was interesting to note in this connection the attempts to make Obama out to be a radical socialist). The claim that black union supporters were reds helped to solidify white support for capitalism. By the same token, anti-imperialist struggles in the poor nations of the world (often former colonies of the rich countries) were typically led by political radicals. These could be made out to be anti-American, and then those in the United States who allied themselves with these struggles could also be labeled anti-American, despite the fact that they might also be supportive of policies that would benefit working people. The schools and the media could be counted out not to try to set anyone straight on any of this.

Now, having said this, I must also say that to the extent that left forces in the United States identified themselves uncritically with the former Soviet Union and its extremely undemocratic political system, they sometimes played into the hands of those opposed to socialism. And I must also admit that socialist forces were, at their strongest, never powerful enough here to force their best ideals permanently into the consciousness of the working class majority. Finally, in the past, the success of capitalism in the United States allowed for some sharing of the wealth with workers, and this, too, made people less willing to entertain radical ideas.

Old and deeply ingrained ideas die hard, and unless there are forces at work to develop new ones and unless there is at least widespread experimentation with new ways to organize production and distribution, little is likely to change, even in the face of economic catastrophe, such as so may working men and women are facing right now. Quite the contrary, workers might be persuaded that actions detrimental to their long-term self-
interest need to be taken, such as, for example, draconian measures against immigrants.

Fred Magdoff: There is no question that the term socialism has a public relations problem. But while it’s true that most people don’t fully understand the basic workings of the capitalist system nor what socialism is, there are indications that many people are ready to talk about alternatives—and that includes socialism. The positive public response to Michael Moore’s movie, “Capitalism,” is one indication. But a Rasmussen poll last spring found that only 58% of American’s say that capitalism is better than socialism. For adults under 30, 37% preferred capitalism and 33% preferred socialism. It’s not clear what the poll results really mean. But it does indicate that people are willing to hear about and talk about alternatives to capitalism.

3. MW—In a chapter titled “Neoliberlism” you focus on the disparity of wealth in the US today. Here’s an excerpt:

“By 2006 the top 1 percent of households received close to a quarter of all income and the top 10 percent got 50 percent of the income pie. In 2006, the 400 richest Americans had a collective net wealth of $1.6 trillion, more than the combined wealth of the bottom 150 million people. This degree of income and wealth inequality was last seen just before the beginning of the Great Depression.” (pg 50)

Let’s ignore the moral issue for now, and focus on the supply/demand question. Is it possible for an economy to produce sufficient demand when more and more of the wealth and income goes to the upper 5 or 10 percent of the population? (isn’t this proof that capitalism is inherently crisis-prone?)

Michael d. Yates: If a certain amount of output is produced, an equal amount of income is generated. So, conceptually, there could be enough demand to buy the output, no matter that the incomes generated are getting more unequally distributed. It certainly has been the case that the rich people now getting such a large share of the pie spend gobs of money. And rich foreigners spend a great deal of money in the United States as well. However, the rich also save a lot of money (the more they get, the more they save), and this money does not enter immediately into the spending flow. Working people, on the other hand, can be counted on, by virtue of the limited income that they command, to spend all of their income. Therefore, the more income the rich have, the more savings there will be, and, unless some way is found to convert all this saving into spending on newly-produced goods and services, the more likely it is that there will be a crisis caused by not enough spending (and its corollaries of unsold goods and services and unemployed labor). If we understand that growing inequality is the normal trajectory of capitalist economies, a trajectory only mitigated by the power of organized working people to win a bigger share of the pie for themselves and to compel the government to intervene in the marketplace on their behalf, then it is correct to say that capitalist economies are crisis-prone for this reason alone.

Growing inequality also creates other potential problems for the system. Sometimes it can generate a political crisis, a crisis of legitimacy so to speak. The rich exert tremendous political power, and this power grows as those at the top command a larger and larger share of a society’s income. To the rest of us, the game looks increasingly rigged, with us having little chance to improve our circumstances through individual efforts. More inequality also has harmful social and economic consequences that we don’t normally think of. Recent research has shown that if we compare two entities (two states in the United States, for example) with equal average incomes but different degrees of inequality, then the place with more unequal incomes will also have higher rates of infant mortality, arrest and imprisonment, school dropouts, low infant birth weights, and many other measures of social well-being. Growing inequality actually kills some of us, makes some of us sicker, and puts some of us in jail.

I want to add an important point. To say that capitalist economies are crisis-prone, because of a tendency toward income inequality or whatever other reason, is not the same as saying that these economies are on their deathbeds, no matter how severe a crisis may be. It is possible for an economy to exist in a crisis or a prolonged period of slow growth (stagnation) without it being ready to collapse. In the end, it is political struggle, that is, class struggle, that truly destabilizes an economy and generates conditions in which it is possible to imagine the birth of a new system.

Fred Magdoff adds: It is one of the many contradictions of the system. If ordinary folk are paid well they can buy a lot of stuff and help keep the system going. So from the point of view of the system as a whole, higher paid workers would help the economy. However, there is only one driving force for individual capitalists–and that’s to make as much money as possible. What might be better for the overall economy can be of no concern to the individual trying to maximize profits. For an analogy, let’s take a look at ocean fishing. Almost every fish species is being fished to the point at which the population crashes. It would make sense for all of the companies operating the large trawlers to cooperate and fish less in order to preserve the resource on which they depend. So what’s good for their long-term future is sacrificed as each individually tries to maximize their catch and therefore profits.

4. MW—Here’s another excerpt from the book: “In 2006, the financial sector employed about 6 percent of the workers but ‘produced’ 40 percent of the profits of all domestic firms.”(pg 56) A few paragraphs later you add that, “Making money without actually making something turned out to be the largest growth sector of the U.S. economy from the early 1980s to the present crisis.”

This seems to imply that as manufacturing and other parts of the “real” economy have become less lucrative, the trading of paper assets has become Wall Street’s new profit-center, the Golden Goose. What impact has the “financialization” of the economy had on ordinary working people?

Michael Yates: I think that an answer here has two parts. First, it was the neoliberal “revolution” begun in the 1970s that did immense harm to working people. For example, unionization rates began to fall dramatically in the 1980s, as Reagan began his “magic of the marketplace” assault on the working class. Real wages (the purchasing power of our paychecks) began to stagnate in the 1970s and are not much higher today than then. Relatively high-wage public employment began to endure a long period of privatization, which also damaged working class living standards. The move toward “free trade” did workers here no good, as manufacturing began to flee our shores for low-wage havens abroad. None of these things had to do with financialization per se.

Second, however, once the neoliberal attack on working class living standards took hold and incomes began to flow upward, those with a great deal more money began to look for ways to put this money to work. The corporations that they owned also had higher profits, and they did the same. The United States has always had a robust financial sector, though in the past, it was not the tail that wagged the dog as far as our system of production and distribution was concerned. Neoliberalism brought with it a deregulation of international movements of money and goods and services. [It is important to note that we see neoliberalism as a political response to capital’s quest for restored profits beginning in the mid-1970s when the post-Second World War two economic boom ended and the slow growth (stagnation) common to mature capitalist economies reasserted itself.] These, in turn, required a certain amount of financial innovation, to reduce, for example, the risks of fluctuations in currency exchange rates and sharp changes in political conditions that could threaten investments. From these innovations came still more, until finance began to take on a life of its own. And while neoliberalism and direct corporate actions inside workplaces did reduce costs and raise profits, they did not create nearly enough capital spending opportunities (investment) to absorb the growing individual savings and business profits. Finance of one kind or another then began to be seen as a place to dispose of surplus and make still more money. Leveraged buyouts, stock market speculations, real estate “investments,” all took off from the 1980s on, absorbing money that could not find enough opportunities in the real economy of production. As these things happened, financial “innovation” exploded, with all of the alphabet soup of financial instruments we describe in our book.

This explosion of finance proved detrimental to working people in a number of ways. Leveraged buyouts inevitably resulted in the hollowing out of what were often perfectly viable businesses. Companies were saddled with debt, assets were stripped and sold, and workers were furloughed by the tens of thousands. The inflation of asset values gave rise to the notion that it was the job of managers to increase the share price of their businesses—in any way possible. Businesses came to be thought of as mere collections of assets rather than entities that produced things. Asset inflation gave rise to asset speculation and the development of ever more complex financial instruments, all leading sooner or later to financial bubbles and the inevitable bursting of the bubbles. As we have seen, the bursting of financial bubbles has had tremendously negative impacts on working people: shuttered workplaces and unemployment to name but the primary ones. The last bubble, in real estate markets, was harmful to workers not only after it burst but also as it was developing. In the aftermath of the dot.com bubble, Alan Greenspan, former Chairman of the Fed Board of Governors, directed Fed policy to pressure interest rates down to very low levels. This helped to push loose money into real estate. As house prices began to rise, banks and brokers started to encourage working people to do two things: borrow money against the appreciated value of their homes and buy homes, either as first-time buyers or as purchasers of more expensive homes (after selling old ones). Working people were eager to do both because they saw houses as sources of cash to compensate for stagnating household incomes and as a form of wealth that could help secure them against the hazards of ill health, lost pensions, or college-age children needing money for school. Working class households began to take on large amounts of debt, making themselves more vulnerable, even as they thought they were making wise financial decisions. Ironically, those who saw their incomes rise so high because of neoliberalism were now, in effect, loaning money to those who didn’t fare so well. As banks accumulated mortgages, farsighted Wall Street swindlers saw golden opportunities to develop a slew of new financial instruments based upon the packaging and repackaging of mortgages into new and exotic instruments. Greenspan played their shill, arguing that they had uncovered the secret of hedging infallibly against risk. From here it was but a short step to the criminal schemes of Countrywide and a host of other financial institutions. The billions of dollars made were used not only to finance a new gilded age of revoltingly lavish consumption but to corral the most tractable politicians money could buy.

Fred Magdoff adds: Financialization of the economy created the possibilities for people to take on more and more debt—credit cards, new cars, 2nd mortgages, etc. It was the selling of a lifestyle way beyond people’s ability to pay for it plus the easy access of loans that created the bind that many people find themselves in today. In essence, it allowed people to live beyond their means. They were encouraged to take on debt as their house values seemed headed up forever, and the great rise in foreclosures and bankruptcies is the unfortunate result of the financialization of the economy. Also, those people who had retirement money in individual accounts or with pension systems and thought that they had become very wealthy, now found themselves with much less to rely upon.

5. MW—In the last couple of decades, consumer debt has skyrocketed, as you note, “doubling from 1975 to 2005, to 127 percent of disposable income.” (pg 60) Have we gone as far as we can without deleveraging and paying down debts? What happens to a credit-dependent economy when the consumer can no longer increase his/her debt-load? Is this just the beginning of a decades-long down-cycle?

Michael Yates: Certainly no entity—not a person, a family, a business, even a government— can take on rising levels of debt (relative to income) indefinitely. Sooner or later, the piper has to be paid. Working-class consumers took on large amounts of debt, to compensate in part for stagnating wages and incomes, and, it is important to note, to pay for health problems and other household traumas. This meant that the burden of the debt rose, since income wasn’t rising as fast as the debt, and also because the interest rates charged on credit cards and subprime mortgages were so high. We at Monthly Review have been decrying the rise of consumer debt for many years, and we said that the debt chickens would come home to roost sooner of later. I must say that I was surprised that debt could be broadened and deepened for so long. The ingenuity of creditors in extending loan periods and devising so many new forms of debt has to be admired for its audacity. Then, the ways in which these debts were packaged and sold so that more debt could be extended was truly breathtaking. Unfortunately, consumers ultimately couldn’t pay and all hell broke loose. Now, with so much unemployment, workers are truly strapped. They will not be borrowing so much or spending so much anytime soon. [One interesting recent development is that, as some households have defaulted on debts or simply stopped making payments, consumer spending has showed a bit of an upward tick!] So the question arises: what spending will fuel a sustained recovery? It won’t likely be consumer spending. Capital spending was stagnating to begin with and was the root cause of the crisis. There are no new “epoch-making” innovations on the horizon that would generate the amounts of investment that were brought forth by the automobile. U.S. exports seem a very unlikely demand support. That leaves the government. In a capitalist economy, especially one like the United States with its lack of a history of generally accepted public spending, it seems very unlikely that public spending will make up for shortfalls in aggregate demand. Already, there are widespread entreaties (and not just from the far right) urging the federal government to wind down in spending programs—well before, I might add, the economy has recovered. As we see it, the United States is, indeed, in for a long period of stagnation, a “down cycle” as you put it.

Fred Magdoff: This is one of the major constraints on the system. The economy is in a process that economists call “deleveraging,” which is just another way of referring to somehow getting rid of debt. Some are able to pay off what they owe, a few are able to renegotiate down some of their debt, many are losing their homes, and some are going bankrupt. Until this works its way out, and a lot of debt is shed one way or another, there will be a drag on the “consumer” portion of the purchases. This is particularly significant to the U.S. economy because it is so dependent on consumer purchases—in 2007, these absorbed approximately 70% of the goods and services produced.

6. MW— “The ABCs of the Economic Crisis: What Working People Need to Know” is as lucid and compelling summary of the financial crisis as any I have read. In the closing chapter you state that capitalism is undergoing a “crisis of legitimacy” and that “the system can never deliver what is needed for us to realize our capacities and enjoy our lives…That “instead of private gain” the purpose of society and the economy is “to serve the needs of people, by providing the necessities of life for all, without promoting excessive consumption (consumerism) while protecting earth’s life support systems.”

All of the things that which kept capitalism in check–progressive taxation, crucial regulations, and the power of unions–have either been reversed, repealed or greatly eroded. More and more people are beginning to see the greed which governs the system, and it scares them. But is the country really ready for structural change or will the vision of an economy which “serves the needs of its people” be dismissed as “pie-in-the-sky” Utopianism?

Michael Yates: Well, first thank you Mike for the kind words. They are much appreciated. Typically, the best we have been able to hope for from the public in the United States has been an amorphous populism; people are willing to say that the system is corrupt and that it is biased in favor of the rich. But proposals for change, much less a radical transformation of the economic system, are rare commodities. I think things would be different, however, if we had a real labor movement, one that was rooted in communities, broad in its composition, and not afraid to have principles and stand by them come hell or high water. This should be the lesson that progressives learned from the right-wing. The talking heads of Fox may seem insane to us, but they and their intellectual gurus almost never deviate from the set of reactionary principles with which they began to transform the “common sense” of the nation. We suggest at the end of our book that we ought to ask ourselves if a return to the pre-economic crisis status quo is what we want. In the best of times, there is plenty of unutilized labor, a degraded environment, poverty, dead-end jobs, and much more that is not so desirable. So we chose a number of alternative outcomes to what we have now that we think have mass appeal, from universal healthcare to basic food guarantees. However, as you say, these might well, and I think will cause people to react with a pie-in-the-sky indifference. What might make working men and women stand up and take notice would be for these goals to have a mass-based advocate, one that would make these goals matters of rigid principle and begin to fight for them through mass actions. We might think that the right-wing ideologues we see on television are insane. Yet, come hell or high water, they stick to their guns. Their political and economic adherents have wielded tremendous power for a long period of time, and even today when they seem to be losing their grip on the national “common sense,” they can still mobilize the faithful. The left needs to take a lesson from this. More particularly, the labor movement must take a firm and rigid stand on issues like national health care, food security, environmental degradation, full employment, good and cheap housing, U.S. war-making and imperialis, racism, and a host of others. Then it must educate members rigorously and constantly about such principles. Most importantly, it must begin to actively fight to achieve them, activating its millions of members and allies, wherever it can find them. It is through action, bold and unafraid, that people’s minds will get changed and a new “common sense” developed.

Having said this, I think it is clear that the labor movement, as currently constituted, is not up to the tasks at hand. Too many unions are moribund, stuck in the failed labor-management cooperation mind set of the past and run by people too old and infirm to do much of anything. So, not only will we have to have a worker-led opposition to the status quo, fighting to change it radically, but this opposition will have to be built on a new basis. There are some hopeful signs, such as the development of community-based worker centers, mainly in immigrant communities. These may be models for the labor movement of the future.

Fred Magdoff: Just getting what should be the most reasonable reforms through Congress is a major effort, which usually fails or is corrupted in the process. Look what’s happening with health care “reform.” Even if a “public option” is finally part of the bill, it will be a bill that helps some people, but is primarily a boon to the health care industry, which will get a lot of new revenue. It’s not a bill designed with the single purpose in mind: how can we supply medical care for everyone at reasonable cost. Rather it’s a bill designed with significant input from the for-profit sector that will end up supplying them with extra profits. It is clear that government-run systems (and there are a variety of ways to do this) are far cheaper and more efficient and can actually cover everyone. SO, it seems as though piecemeal reform is a) very difficult to obtain and b) can be reversed as the power of the wealthy increases. A system is needed that can break the power of the wealthy and create a real political and economic democracy in order to be able to meet the basic needs for all the people.

Michael D. Yates and Fred Magdoff, “The ABCs of the Economic Crisis: What Working People Need to Know” Monthly Review Press, New York

Made in China

Importing America To Its Own Death…

During the Bolshevik Revolution that led to communist Russia, Comrade Vladimir Lenin said, “Sell the capitalists enough rope and they will hang themselves!”

Nearly 100 years later, Lenin’s predictions reveal his veracity with chilling fruition. The United States bleeds $11 trillion in debt. It suffers a $700 billion annual trade deficit, mostly with China, which by the way thrives as a communist nation selling us lots of ‘rope’, i.e., consumer goods. We import another $700 billion in oil annually from other countries. We borrow $2 billion daily to float our sinking economy. The average American’s credit card debt equals $9,425.00 according to NBC’s Brian Williams. We suffer 15 million unemployed American workers and 35 million subsisting on food stamps.

How did Lenin’s foreshadowing come to pass? How could he know that we would bring our downfall upon ourselves?

First of all, every empire in history fell to its own manifest destiny (ego), avarice and greed. Today, the U.S. empire features 572,000 military personnel on 700 bases in 120 countries around the world. Their purpose? Few Americans could tell you! The costs accelerate to unimaginable levels.

Secondly, major capitalists, the ‘gatekeepers’ or money changers, however you want to call them, ‘own’ the power to make their choices realized. Some call them the Rothchilds, Bilderbergers, etc. The fact remains, they pull all the money strings. We remain their puppets.

For instance, in the past 15 years, the second richest man in the world, Bill Gates, ‘persuaded’ our U.S. Congress to implement H-1B, H-2B and L-1 visas that brought foreign workers into this country to displace 1.0 million U.S. IT workers. How? Those visa beneficiaries arrived from third world countries and worked at a third the wage. Additionally, big manufacturing firms insourced jobs, outsourced jobs and offshored jobs. Maytag moved to Mexico. Levi Straus moved to India. Schwinn bikes moved to Taiwan, etc.

If you visit a Wal-Mart, Home Depot, Lowe’s, Target, Sears, Penny’s, Kohl’s and hundreds of other retail outlets, you will notice 80 to 90 percent of the hard and soft goods “Made in China” ; “Made in Mexico” : “Made in Pakistan” : “Made in Bangladesh”, etc. The most popular cars sold in America originate from Japan, Korea and Germany.

Each year, China sells the United States $700 billion in goods. Unlike Clinton, we ‘inhale’ that much junk from China! The United States sells China $67 billion in goods annually as reported by Charles Gibson on ABC last week! How’s that for ‘free trade’ and you can see the communists figured out how to sell us enough ‘rope’ to kill ourselves—and we are! China holds nearly $1 trillion of our treasury bills. We feel the squeeze of our debt every year as we pay out over $540 billion in interest on our debt. Our leaders ‘keep’ us fighting at a cost to taxpayers of $12 billion a month wars in Iraq and Afghanistan for eight friggin’ years! Are you feeling incensed?

If you look inside the USA, you see Hormel, Tyson Chicken, McDonald’s, Berger Chef, Pizza Hut, Chipotle’s, Taco Bell, and many more as well as construction firms, landscaping firms, roofing firms and car washes hiring unlawful immigrants by the millions. At least 10 million unlawful immigrants work jobs at 21st century slave wages while our citizens stand in unemployment lines or live on welfare. At the same time, we lose our jobs to illegal aliens, or see our wages downgraded, or watch our schools, culture and language vanish in front of our eyes—those few corporate chiefs make horrific profits—while we pay for illegal aliens’ educations, medical care and incarceration. How did we arrive at this obscene juncture?

Because our corrupt capitalists can make many more billions of dollars! And, they can get away with it because their lobbyists “pay off” our U.S. Senators and House Reps to NOT enforce our laws against such activities. Of recent note, former U.S. House Rep. John “Duke” Cunningham serving an eight year jail sentence for taking $2.4 million in construction bribes. How about House Rep. William Jefferson hiding $100,000 in cash in his freezer?

How many scoundrel U.S. Congressional reps haven’t been caught? My estimate: dozens if not a hundred in the U.S. House and Senate.

Notice also, that AIG just awarded more annual bonuses of $6 to $10 million to their corporate bosses—after failing—and after we taxpayers bailed them out!

You cannot help but lament, “What a country!”

Not only that, we citizens fail to demand accountability. We citizens shop at Wal-Mart, Home Depot and other stores by the millions, which means we kill our own American jobs and manufacturing.

How can I say that? Just look at our economy. We’re in debt up to our nostrils! We’re dangling at the end of an economic rope bull-hooked into our wallets by 535 members of U.S. Congress and the last four presidents. And our newest president, Barack Obama, rides and talks the same bull!

As Mark Twain once said, “Suppose you were an idiot; and suppose you were a member of congress—ah, but I repeat myself.”

The greatest flaw of our founding fathers: not placing a 12 year term limit on every position in Congress. The cronyism, personal greed and outright materialism of most of them defy a sane man’s imagination.

Amazingly, the American voters stupidly re-elect such men as the late Teddy Kennedy for 44 years of incompetence, John McCain for 30 years of failing to protect our borders, Robert Byrd who can barely totter across the Senate floor, Arlen Spector with full blown cancer for 35 years and the list grows. Those men and some women bring death to this republic, but we elect them again and again to kill us and our futures.

You might think that importing 160,000 foreigners every month, in the form of legal immigrants, would stop with 14 million Americans unemployed and 35 million living on food stamps. But you would be wrong! Not only will Congress continue, but those 535 men and women will vote for an amnesty that will lead to adding 100 million people to this country in 26 years, over 70 million immigrants.

Lenin’s prophesy continues and Mark Twain remains right on the money—while the American people watch their language, culture and way of life swirl the toilet. America: made “in” and owned “by” China!

The First Shots of the Trade War

With the G-20 summit approaching, cheerful talk of “international cooperation” fills the White House press-room. These comments carry with them the implication that “free trade” is integral to “cooperation,” a fact made explicit in the last meeting of the G-20. There, in the name of “united action,” world leaders agreed not to install any new protectionist measures. Since then, protectionist measures have flourished. Instead of global cooperation we have its opposite: international tensions are on the rise as trade disputes sharpen.

For example, the Obama administration “slapped a 35 percent tariff on Chinese tires… and China responded this past weekend by threatening to retaliate against U.S. chickens and auto parts. That followed French President Nicolas Sarkozy’s demand on Thursday that Europe impose a carbon tariff on imports from countries that don’t follow its cap-and-trade diktats.” (Wall Street Journal, September 15, 2009).

The U.S.-China skirmish is especially explosive, since the relationship is central to the functioning of the global economy. China stood silent for years as the U.S. imposed tariffs on various Chinese products, a passiveness that lured Obama into his recent action. China’s quick response sent a strong signal: enough is enough.

China’s Commerce Secretary warned that the U.S. tariff “not only violates WTO rules, but also runs against U.S. pledges at the G-20 summits, constitutes an abuse of trade remedy measures, and sets an extremely bad precedent in the current backdrop of a world economy in crisis.”

One aspect of this “bad precedent” is that the tariff could inspire other U.S. corporations to apply for China-specific protections, perhaps setting off an avalanche of tariffs that China will inevitably respond to. The Wall Street Journal confirms:

“Trade lawyers said the [U.S.] decision could invite a raft of similar petitions for temporary protection from Chinese imports. Such so-called safeguards.” (September 14, 2009).

If the China-U.S. relationship sours, much of the global economy may spoil with it.

Another recent trade spat flared up between U.S.-based Boeing and Europe-housed Airbus. Years ago the U.S. filed a grievance at the World Trade Organization (WTO) claiming that Airbus received unfair subsidies from European governments (Europe’s identical grievance against the U.S. is still pending). A preliminary decision finally announced that Europe is guilty of illegally subsidizing Airbus, with the full implications yet unknown.

An immediate outcome of the dispute is the demand from some U.S. congressmen that a multi-billion dollar U.S. military contract be awarded to Boeing instead of Airbus. Politicians are using the nationalistic “buy American” slogan to pressure the government to bless the mega-corporation Boeing with mountains of U.S. tax dollars instead of its European counterpart. If the U.S. government were to freeze Airbus out of the gargantuan U.S. military market, large-scale retaliatory measures would surely be expected. As it stands, the seeds for such a conflict are being planted. Business Week notes:

“On sheer politics, Boeing clearly has an edge over Airbus: The company has a big presence in such Democratic strongholds as Illinois, Connecticut, and the state of Washington and it can count on labor unions to work Congress on its behalf.” (September 16, 2009).

So not only does Boeing’s billions of dollars enable it to purchase politicians, which is out of the reach of Airbus, but misguided labor leaders are encouraging workers to fight alongside the corporate giant as it battles an international competitor. The same Boeing that threatened to leave the state of Washington for a union-free South has labor leaders singing its praises until the factory doors shut.

Workers should not lend their voices in defense of the corporate shareholders that squeeze profits from them; an independent position is needed — less they’re suckered into the corporate “partnerships” preached by CEO’s, politicians, and defunct labor leaders.

One way to gain a worker’s perspective on trade is to study history. A simple appraisal of the Great Depression proves an undeniable fact: protectionist measures taken by governments deepened the depression, led to a trade war, and helped fuel the national conflicts that ignited World War II.

With this conventional wisdom known by every world leader today, why are protectionist measures on the rise? Why does Obama speak against trade protectionism while at the same time imposing protectionist tariffs?

Although free trade is crucial to the functioning of a capitalist economy, the desire for short-term profits sometimes supersedes rational considerations, especially in a recession.

Large recessions create huge drops in corporate profit rates. To help maintain profits, corporations force politicians to use tariff walls to exclude foreign competitors. In an earlier article we wrote:

”In normal times, market warfare is kept at bay by such institutions as the World Trade Organization and more importantly the profit-induced cooperation of the rich countries. In times of deep recessions, however, these niceties fly out the windows. The banks and corporations that ultimately control politics in each country demand bailouts and other forms of protection from the cruelty of the once-friendly “free market.” (Will Obama Start the Next Trade War? February 5, 2009).

Some U.S. corporations may find that having a seller’s monopoly over the highly valued U.S. market — by imposing tariffs — is more profitable than cooperating with the Chinese. But these U.S. corporations aren’t mom and pop local producers, they’re world exporters. And while they’re making super-profits by blocking Chinese imports, these U.S. companies subsidize their exports abroad by the monopoly profits at home, which is considered “dumping,” causing further retaliatory measures from the Chinese and other countries suffering from the competition.

Not only does protectionism create global conflicts, but it also destroys the jobs that some claim it saves. When tariffs cut off imports to the U.S., consumers are forced to buy more expensive products, creating inflation that hurts the economy as a whole. More importantly, when U.S. corporations are shut off from foreign markets via retaliation, job slashing and wage cutting are the inevitable results.

It’s true that free trade is essentially an agreement between corporate-controlled governments to unleash raw, unbridled competition among the world’s corporations. Such a system deserves zero support since workers are constantly asked to make sacrifices so that the company they work for can survive. Protectionism, on the other hand, equals a breakdown of the global capitalist system, creating a vicious battle between corporations for access to the best markets, rarest raw materials and cheapest labor.

As long as the economy is controlled by the super wealthy and produces things only for their profit, neither free trade nor protectionism should be a concern for workers. We cannot afford to link our fate with that of “our” corporations, since the corporations are not ours to begin with. Their profits are raised at our expense by lowering wages, administering frequent layoffs, and reducing benefits.

Groveling to politicians to “protect” American corporations is a losing strategy for workers. Instead, workers must demand and fight for living wages and good benefits from their employers. If a company threatens to move to a place where labor is cheap, workers are not powerless. In Latin America workers have developed militant methods to keep jobs in their community: mass protests, strikes, and factory occupations are used interchangeably to assert control over their workplace. As long as workers see themselves in competition with workers in other countries, ALL workers will inevitably be caught up in a race to the bottom. Companies all over the world will tell their workforce that in order for the company to survive foreign competition, the workers will have to accept lower wages and reduced benefits. But if workers begin to forge alliances across borders, then we can all begin to demand that our wages and benefits rise collectively, and the corporations will have no place to go.

Much ado about nothing?

What is there about the Iranian election of June 12 that has led to it being one of the leading stories in media around the world every day since? Elections whose results are seriously challenged have taken place in most countries at one time or another in recent decades. Countless Americans believe that the presidential elections of 2000 and 2004 were stolen by the Republicans, and not just inside the voting machines and in the counting process, but prior to the actual voting as well with numerous Republican Party dirty tricks designed to keep poor and black voters off voting lists or away from polling stations. The fact that large numbers of Americans did not take to the streets day after day in protest, as in Iran, is not something we can be proud of. Perhaps if the CIA, the Agency for International Development (AID), several US government-run radio stations, and various other organizations supported by the National Endowment for Democracy (which was created to serve as a front for the CIA, literally) had been active in the United States, as they have been for years in Iran, major street protests would have taken place in the United States.

The classic “outside agitators” can not only foment dissent through propaganda, adding to already existing dissent, but they can serve to mobilize the public to strongly demonstrate against the government. In 1953, when the CIA overthrew Iranian Prime Minister Mohammed Mossadegh, they paid people to agitate in front of Mossadegh’s residence and elsewhere and engage in acts of violence; some pretended to be supporters of Mossadegh while engaging in anti-religious actions. And it worked, remarkably well.¹ Since the end of World War II, the United States has seriously intervened in some 30 elections around the world, adding a new twist this time, twittering. The State Department asked Twitter to postpone a scheduled maintenance shutdown of its service to keep information flowing from inside Iran, helping to mobilize protesters.² The New York Times reported: “An article published by the Web site True/Slant highlighted some of the biggest errors on Twitter that were quickly repeated and amplified by bloggers: that three million protested in Tehran last weekend (more like a few hundred thousand); that the opposition candidate Mir Hussein Mousavi was under house arrest (he was being watched); that the president of the election monitoring committee declared the election invalid last Saturday (not so).” ³

In recent years, the United States has been patrolling the waters surrounding Iran with warships, halting Iranian ships to check for arms shipments to Hamas or for other illegal reasons, financing and “educating” Iranian dissidents, using Iranian groups to carry out terrorist attacks inside Iran, kidnapping Iranian diplomats in Iraq, kidnapping Iranian military personnel in Iran and taking them to Iraq, continually spying and recruiting within Iran, manipulating Iran’s currency and international financial transactions, and imposing various economic and political sanctions against the country.⁴

“I’ve made it clear that the United States respects the sovereignty of the Islamic Republic of Iran, and is not at all interfering in Iran’s affairs,” said US President Barack Obama with a straight face on June 23. “Some in the Iranian government [have been] accusing the United States and others outside of Iran of instigating protests over the elections. These accusations are patently false and absurd.”⁵

“Never believe anything until it’s officially denied,” British writer Claud Cockburn famously said.

In his world-prominent speech to the Middle East on June 4, Obama mentioned that “In the middle of the Cold War, the United States played a role in the overthrow of a democratically elected Iranian government.” So we have the president of the United States admitting to a previous overthrow of the Iranian government while the United States is in the very midst of trying to overthrow the current Iranian government. This will serve as the best example of hypocrisy that’s come along in quite a while.

So why the big international fuss over the Iranian election and street protests? There’s only one answer. The obvious one. The announced winner, Mahmoud Ahmadinejad, is a Washington ODE, an Officially Designated Enemy, for not sufficiently respecting the Empire and its Israeli partner-in-crime; indeed, Ahmadinejad is one of the most outspoken critics of US foreign policy in the world.

So ingrained is this ODE response built into Washington’s world view that it appears to matter not at all that Mousavi, Ahmadinejad’s main opponent in the election and very much supported by the protesters, while prime minister 1981-89, bore large responsibility for the attacks on the US embassy and military barracks in Beirut in 1983, which took the lives of more than 200 Americans, and the 1988 truck bombing of a US Navy installation in Naples, Italy, that killed five persons. Remarkably, a search of US newspaper and broadcast sources shows no mention of this during the current protests.⁶ However, the Washington Post saw fit to run a story on June 27 that declared: “the authoritarian governments of China, Cuba and Burma have been selectively censoring the news this month of Iranian crowds braving government militias on the streets of Tehran to demand democratic reforms.”

Can it be that no one in the Obama administration knows of Mousavi’s background? And do none of them know about the violent government repression on June 5 in Peru of the peaceful protests organized in response to the US-Peru Free Trade Agreement? A massacre that took the lives of between 20 and 25 indigenous people in the Amazon and wounded another 100.⁷ The Obama administration was silent on the Peruvian massacre because the Peruvian president, Alan Garcia, is not an ODE.

And neither is Mousavi, despite his anti-American terrorist deeds, because he’s opposed to Ahmadinejad, who competes with Hugo Chavez to be Washington’s Number One ODE. Time magazine calls Mousavi a “moderate”, and goes on to add: “It has to be assumed that the Iranian presidential election was rigged,” offering as much evidence as the Iranian protestors; i.e., none at all.⁸ It cannot of course be proven that the Iranian election was totally honest, but the arguments given to support the charge of fraud are not very impressive, such as the much-repeated fact that the results were announced very soon after the polls closed. For decades in various countries election results have been condemned for being withheld for many hours or days. Some kind of dishonesty must be going on behind the scenes during the long delay it was argued. So now we’re asked to believe that some kind of dishonesty must be going on because the results were released so quickly. It should be noted that the ballots listed only one electoral contest, with but four candidates.

Phil Wilayto, American peace activist and author of a book on Iran, has observed:

Ahmadinejad, himself born into rural poverty, clearly has the support of the poorer classes, especially in the countryside, where nearly half the population lives. Why? In part because he pays attention to them, makes sure they receive some benefits from the government and treats them and their religious views and traditions with respect. Mousavi, on the other hand, the son of an urban merchant, clearly appeals more to the urban middle classes, especially the college-educated youth. This being so, why would anyone be surprised that Ahmadinejad carried the vote by a clear majority? Are there now more yuppies in Iran than poor people?⁹

All of which is of course not to say that Iran is not a relatively repressive society on social and religious issues, and it’s this underlying reality which likely feeds much of the protest; indeed, many of the protesters may not even have strong views about the election per se, particularly since both Ahmadinejad and Mousavi are members of the establishment, neither is any threat to the Islamic theocracy, and the election can be seen as the kind of power struggle you find in virtually every country. But that is not the issue I’m concerned with here. The issue is Washington’s long-standing goal of regime change. If the exact same electoral outcome had taken place in a country that is an ally of the United States, how much of all the accusatory news coverage and speeches would have taken place? In fact, the exact same thing did happen in a country that is an ally of the United States, three years ago when Felipe Calderon appeared to have stolen the presidential election in Mexico and there were daily large protests for more than two months; but the American and international condemnation was virtually non-existent compared to what we see today in regard to Iran.

Iranian leaders undertook a recount of a random ten per cent of ballots and recertified Ahmadinejad as the winner. How honest the recount was I have no idea, but it’s more than Americans got in 2000 and 2004.

By what standard shall we judge Barack Obama?

Many of my readers have been upset with me for my criticisms of President Obama’s policies. Following my last two reports, more than a dozen have asked to be removed from my mailing list. But if you share my view that the numerous atrocities US foreign policy is responsible for constitute the greatest threat to world peace, prosperity and happiness, then I think you have to want leaders who are unambiguously opposed to America’s military adventures, because those interventions are unambiguously harmful. There’s nothing good to be said about dropping powerful bombs on crowds of innocent people, invading their land, overthrowing their government, occupying the country, breaking down the doors of the citizens, killing the father, raping the mother, traumatizing the children, torturing those opposed to all this … Barack Obama has no problem with this, if we judge him by his policies and not his rhetoric.

And neither does Al Franken, who’s about to become a Democratic Senator from Minnesota. The former Saturday Night Live comedian would like you to believe that he’s been against the war in Iraq since it began, but he’s gone to Iraq four times to entertain the troops. Does that make sense? Why does the military bring entertainers to soldiers? To lift the soldiers’ spirits. Why does the military want to lift the soldiers’ spirits? A happier soldier does his job better. And what’s the soldier’s job? All the charming things listed above. Doesn’t Franken know what these guys do? He criticized the Bush administration because they “failed to send enough troops to do the job right.”¹⁰ What “job” did the man think the troops were sent to do that had not been performed to his standards because of lack of manpower? Did he want them to be more efficient at killing Iraqis who resisted the occupation?

Franken has been lifting soldiers’ spirits for a long time. This past March he was honored by the United Service Organization (USO) for his ten years of entertaining troops abroad. That includes Kosovo in 1999, as imperialist an occupation as you’ll want to see. He called his USO experience “one of the best things I’ve ever done.”¹¹ Franken has also spoken at West Point, encouraging the next generation of imperialist warriors. Is this a man to challenge the militarization of America at home and abroad? No more so than Obama.

Tom Hayden wrote this about Franken in 2005 when Franken had a regular program on the Air America radio network:

Is anyone else disappointed with Al Franken’s daily defense of the continued war in Iraq? Not Bush’s version of the war, because that would undermine Air America’s laudable purpose of rallying an anti-Bush audience. But, well, Kerry’s version of the war, one that can be better managed and won, somehow with better body armor and fewer torture cells. This morning Franken was endorsing Sen. Joe Biden’s proposal to send 5,000 NATO troops to close the Syrian-Iraq border, bring in foreign trainers for the Iraqi officer corps, and put Iraqis to work cleaning up the destruction of our invasion. … Now that Bush has manipulated us into the invasion, Franken thinks we have no choice but to … stay until we crush the insurgents. It’s a humanitarian excuse for open-ended American occupation. And it’s shared widely by the professional political and pundit class who think of themselves as the conscience of the American establishment and the leadership of the Democratic Party.¹²

I know, I know, I’m taking away all your heroes. But such people shouldn’t be your heroes. You can learn to see through the liberal, Democratic Party apologists for the empire. Only a week ago, documents released by the Nixon Library in California revealed that five days before US and South Vietnamese troops made their surprise invasion of Cambodia on April 29, 1970 – which elicited widespread, angry protests in the US, resulting in the fatal shootings by the National Guard of students at Kent State University in Ohio – President Richard Nixon got approval for the invasion from the top Democrat on the Senate Armed Services Committee, Sen. John Stennis of Mississippi. Stennis told the president: “I will be with you. … I commend you for what you are doing.”¹³

Long live the Cold War

President Manuel Zelaya of Honduras was overthrown in a military coup June 28 because he was about to conduct a non-binding survey of the population, asking the question: “Do you agree that, during the general elections of November 2009 there should be a fourth ballot to decide whether to hold a Constituent National Assembly that will approve a new political constitution?” One of the issues that Zelaya hoped a new constitution would deal with is the limiting of the presidency to one four-year term. He also expressed the need for other constitutional changes to make it possible for him to carry out policies to improve the life of the poor; in countries like Honduras, the law is not generally crafted for that end.

At this writing it’s not clear how matters will turn out in Honduras, but the following should be noted: the United States, by its own admission, was fully aware for weeks of the Honduran military’s plan to overthrow Zelaya. Washington says it tried its best to change the mind of the plotters. It’s difficult to believe that this proved impossible. During the Cold War it was said, with much justification, that the United States could discourage a coup in Latin America with “a frown”. The Honduran and American military establishments have long been on very fraternal terms. And it must be asked: In what way and to what extent did the United States warn Zelaya of the impending coup? And what protection did it offer him? The response to the coup from the Obama administration can be described with adjectives such as lukewarm, proper but belated, and mixed. It is not unthinkable that the United States gave the military plotters the go-ahead, telling them to keep the traditional “golpe” bloodiness to a minimum. Zelaya was elected to office as the candidate of a conservative party; he then, surprisingly, moved to the left and became a strong critic of a number of Washington policies, and an ally of Hugo Chavez of Venezuela and Evo Morales of Bolivia, both of whom the Bush administration tried to overthrow and assassinate.

Following the coup, National Public Radio (NPR) showed once again why progressives refer to it as National Pentagon Radio. The station’s leading news anchor, Robert Siegel, interviewed Johanna Mendelson Forman, of the conservative think tank, Center for Strategic and International Studies:

Siegel: “There hasn’t been a coup in Latin America for quite a while.”

Forman: “I think the last one was in 1983″

Siegel did not correct her.¹⁴

This is ignorance of considerable degree. There was a coup in Venezuela in 2002 that briefly overthrew Hugo Chavez, a coup in Haiti in 2004 that permanently overthrew Jean-Bertrand Aristide, and a coup in Panama in 1989 that permanently overthrew Manuel Noriega. Is it because the US was closely involved in all three coups that they have been thrown down the Orwellian Memory Hole?

Notes

1. William Blum, Killing Hope, chapter 9 ^↩
2. Associated Press, June 16, 2009 ^↩
3. New York Times, June 21, 2009 ^↩
4. See Seymour Hersh, New Yorker magazine, June 29, 2008; ABC News, May 22, 2007; and Paul Craig Roberts in CounterPunch, June 19-21, 2009 for descriptions of some of these and other anti-Iran covert activities. ^↩
5. White House press conference, June 23, 2009 ^↩
6. The only mention is by Jeff Stein in “CQ Politics” [Congressional Quarterly], online, June 22, 2009, “according to former CIA and military officials”. ^↩
7. Center for International Policy (Washington, DC) report, June 16, 2009 ^↩
8. Time magazine, June 29, 2009, p.26 ^↩
9. AlterNet.org, June 14, 2009; Wilayto is the author of “In Defense of Iran: Notes from a U.S. Peace Delegation’s Journey through the Islamic Republic” ^↩
10. Washington Post, February 16, 2004 ^↩
11. Star Tribune (Minneapolis), March 26, 2009 ^↩
12. Huffington Post, sometime in June 2005, but it may no longer be there. ^↩
13. Washington Post, June 30, 2009 ^↩
14. NPR, All Things Considered, June 29, 2009 ^↩

Dr. King Spanks Obama: Part 2

At the 23rd Annual Dr. Martin Luther King, Jr., Holiday Celebration in San Francisco attendees were asked to answer the question, “What would Dr. King want to say to Barack Obama?” But Dr. King actually provides the best answers to this question in his book, “Where Do We Go From Here: Chaos or Community?” For example, in chapter 3 he states:

“The Washington Post has calculated that we spend $332,000 for each enemy we kill. It challenges the imagination to contemplate what lives could transform if we were to cease killing. The security we profess to seek in foreign adventures we will lose in our decaying cities. The bombs in Vietnam explode at home; they destroy the hopes and possibilities for a decent America.” — Dr. Martin Luther King Jr. [1]
But this is data from 1967. Has anyone performed more recent calculations with regard to Iraq, Gaza or Afghanistan? With his great interest in “transparency”, perhaps Barack Obama has already posted these statistics on his Web site. How many American jobs does it cost to kill one “enemy” in Iraq? How many American homes does is cost to kill one “enemy” in Afghanistan? Has anyone checked? I haven’t yet. But this does promise to be a very interesting study in terms of — “free trade”.

Meanwhile, I must confess to a recent error in suggesting Obama’s commitments lie outside the democratic process. [2] While it is true that Obama’s choices don’t seem to align with the interests of most Americans (or most other life forms), this does not indicate he is operating outside the democratic process. Such misinterpretations are quite understandable, and as outlined below I appear to be in good company. After all, we’re constantly taught to believe that we live in a democratic society — and to some extent we certainly do. The problem is that more than 99-percent of the US population is deliberately excluded from active daily participation in the democratic process.

“Through two centuries, a continuous indoctrination of Americans has separated people according to mythically superior and inferior qualities while a democratic spirit of equality was evoked as the national ideal.” — Dr. Martin Luther King Jr. [1]

Though typically aimed at racial segregation, most of Dr. King’s observations also extend to the more general problems of economic and political segregation. King’s ultimate goal was racial equality to be achieved through the eradication of global poverty. His obvious ability to organize the masses in this regard, his suggestion of a Basic Income Guarantee and his vocal opposition to the Vietnam war seem the most likely reasons Dr. King was assassinated by his own government. He connected the dots between war and poverty and he was able to effectively organize the masses against both — so they shot him. [3]

What does this tell us about our democratic system? What does this tell us about our government’s agenda? What does this tell us about Dr. King’s approach to “democracy” versus Barack Obama’s? Peace activist Cindy Sheehan suggests Obama is “a sell-out in opposition to King’s legacy, not a fulfillment”:

“Besides filling his cabinet with militarists and members of the white establishment, he has selected very few persons of color. His support for a trillion dollar bailout of Wall Street shows that he has sold out himself, and the nation’s poor to be a tool of the bankers. Obama’s devotion to war (‘I am not against war, I am against dumb wars’) is not only demonstrated by his words, but by his actions, as well. While pledging to withdraw ‘combat troops’ from Iraq, he also promises to dramatically increase troop level in Afghanistan and also increase overall troop levels by almost 100,000 warm bodies. Obama recognizes Israel’s right to ‘defend’ itself by bombing the prisoners of Gaza.” [4]

Regarding Obama’s first 100 days in office, John Pilger concurs:

“Many Americans also believed he was the heir to Martin Luther King’s legacy of anti-colonialism. Yet if Obama had a theme at all, apart from the vacuous ‘Change you can believe in’, it was the renewal of America as a dominant, avaricious bully. ‘We will be the most powerful,’ he often declared… In his first 100 days, Obama has excused torture, opposed habeas corpus and demanded more secret government. He has kept Bush’s gulag intact and at least 17,000 prisoners beyond the reach of justice. On 24 April, his lawyers won an appeal that ruled Guantanamo Bay prisoners were not ‘persons’, and therefore had no right not to be tortured… All over the world, America’s violent assault on innocent people, directly or by agents, has been stepped up… In Pakistan, the number of civilians killed by US missiles called drones has more than doubled since Obama took office… In Afghanistan, the US ‘strategy’ of killing Pashtun tribespeople (the ‘Taliban’) has been extended… Perhaps the biggest lie is Obama’s announcement that the US is leaving Iraq… According to unabashed US army planners, as many as 70,000 troops will remain ‘for the next 15 to 20 years’…” [5]

As a result, Pilger says a growing number of Americans believe they have been “suckered” — especially as the nation’s economy has been entrusted to the same fraudsters who destroyed it. Sheehan describes Obama as a “sell-out”, and geniuses like me suggest that he’s committed to forces “outside the democratic process”. But Americans have been suckered for much longer that a mere 100 days. It’s actually been more like 230 years. If we think of democracy as a distribution of decision-making power, we see that the democratic process is alive and well in the United States and that Barack Obama tends to operate well within its boundaries. But the democratic process in the US is also monstrously skewed in favor of wealth derived from the passive ownership of capital.

So, as Noam Chomsky suggests, most Americans are passive spectators (“ignorant and meddlesome outsiders”) in the democratic process. [6] It’s no coincidence that those same people are also the most active daily participants in the economic process of generating wealth — for somebody else. The passive claimants of all that wealth are the owners of capital — and it’s no coincidence that those people (less than 1-percent of the US population) also happen to be the most active daily participants in the democratic process. Moreover, the interests of workers and the interests of passive ownership are directly opposed. [7] After more than 200 years “Americans” are finally beginning to see that something is terribly wrong with this picture. [8] But it’s not a new problem. This is actually a manufacturer’s defect.

The United States was not founded on the principle that “all people are created equal”. It was founded on the principle that “all MEN are created equal”. The term “men” denoted white male property owners. The term “property” denoted land and slaves. Much like a factory recall, the American Civil War eventually replaced slavery with capitalism as a new and improved way for passive ownership to siphon wealth and income away from the active participants (workers) who produce it. Black slaves were literally tossed to the wolves as the exploitation of labor was extended to every human being who was not an owner of capital.

Meanwhile, the right to vote in the US is controlled at both the state and federal levels, and its history is replete with legislation intended to discriminate against certain (especially ethnic) groups. But in general, only white male property owners (about 10 to 16 percent of the US population) had the right to vote at the time the US Constitution was written. By the beginning of the Civil War, the property-ownership requirement had finally been dropped, and most white male citizens could vote. Women and Native Americans achieved the right to vote in the 1920s, and the Voting Rights Act of 1965 finally guaranteed blacks the right to vote in the United States without racial discrimination. [9] [10]

But the right to vote in no way guarantees either the right or the opportunity for active daily participation in the democratic process. As Dr. King laments, the laws have changed, but the democratic process hasn’t improved at all. In fact, the exclusive control of US democracy has shrunk from 10- to 16-percent of the population in 1787 to less than half of a percent today. So despite our many historic struggles for the right to vote, our democratic process is now more heavily skewed than ever before in favor of property ownership and wealth accumulation. The decisions that most deeply affect our daily lives are being made for us by others. According to Dr. King, “someone or some system has already made these decisions for me, and I am reduced to an animal”. [1] David Chandler’s “L-Curve” is the best graphic representation I’ve found for illustrating the aggressive assault on US democracy: [8]

“The horizontal spike [on the curve] has the votes. The vertical spike [on the curve] has the money. Who wins, when it comes to electoral politics? Who has influence? Whose interests are being represented in Washington? Can democracy meaningfully exist where the distribution of wealth, and thus the distribution of power, is this concentrated? We recently went through an economic boom where people on the horizontal spike showed little if any improvement in their condition while those in the vertical spike showed huge gains. Can this be considered “prosperity”? Do we really want to gear up our national policies to repeat this performance?” [8]

Less than half of a percent of the US population are passive economic claimants and active political participants. The rest of us are active economic generators and passive political spectators. Does this suggest that Barack Obama and his corporate puppet-masters are operating outside the “democratic process”?

No. In fact we, the people, are imposters in our own democratic system — deliberately excluded from an economically skewed distribution of “democracy”. The good news is that this problem can be corrected. The bad news is that correcting the problem involves something called “cooperation”. Dr. King calls it “cooperative alliance”, and it is the very foundation of genuine democracy: “For an alliance to have permanence and loyal commitment from its various elements, each of them must have a goal from which it benefits and none must have an outlook in basic conflict with the others.” [1] Thus, the antagonistic relationship between workers and passive ownership cannot exist in any truly democratic society. While Dr. King’s work might have helped make it possible for a black man to become President of the United States, Barack Obama is in no way a fulfillment of Dr. King’s dream. To “normalize” our democratic process, the extreme influence of unearned income derived from passive ownership must be removed from the distribution.

Here’s more from Dr. Martin Luther King Jr:

Where Do We Go From Here: Chaos or Community?
Excerpts from chapter 3:

Since the institution of slavery was so important to the economic development of America, it had a profound impact in shaping the social-political-legal structure of the nation. Land and slaves were the chief forms of private property, property was wealth and the voice of wealth made the law and determined politics. In the service of this system, human beings were reduced to propertyless property. Black men, the creators of the wealth of the New World, were stripped of all human and civil rights. And this degradation was sanctioned and protected by institutions of government, all for one purpose: to produce commodities for sale at a profit, which in turn would be privately appropriated.

It seems to be a fact of life that human beings cannot continue to do wrong without eventually reaching out for some rationalization to clothe their acts in the garments of righteousness. And so, with the growth of slavery, men had to convince themselves that a system which was so economically profitable was morally justifiable. The attempt to give moral sanction to a profitable system gave birth to the doctrine of white supremacy. Religion and the Bible were cited and distorted to support the status quo. Logic was manipulated to give intellectual credence to the system of slavery. Academicians eventually climbed on the bandwagon and gave their prestige to the myth of superior race. Even natural science, that discipline committed to the inductive method, creative appraisal and detached objectivity, was invoked and distorted to give credence to a political position. A whole school of racial ethnologists developed using such terms as “species,” “genus” and “race.” It became fashionable to think of the slave as a “species of property.” It was during this period that the word “race” came into fashion.

Generally we think of white supremacist views as having their origins with the unlettered, underprivileged, poorer class whites. But the social obstetricians who presided at the birth of racist views in our country were from the aristocracy: rich merchants, influential clergymen, men of medical science, historians and political scientists from some of the leading universities of the nation. With such a distinguished company of the elite working so assiduously to disseminate racist views, what was there to inspire poor, illiterate, unskilled white farmers to think otherwise? Soon the doctrine of white supremacy as imbedded in every textbook and preached in practically every pulpit. It became a structural part of the culture. Virtually all of the Founding Fathers of our nation, even those who rose to the heights of the Presidency, those whom we cherish as our authentic heroes, were so enmeshed in the ethos of slavery and white supremacy that not one ever emerged with a clear, unambiguous stand on Negro rights. Morally Lincoln was for black emancipation, but emotionally, like most of his white contemporaries, he was for a long time unable to act in accordance with his conscience. But Lincoln was basically honest and willing to admit his confusions. He saw that the nation could not survive half slave and half free.

With all the beautiful promise that [Frederick] Douglass saw in the Emancipation Proclamation, he soon found that it left the Negro with only abstract freedom. Four million newly liberated slaves found themselves with no bread to eat, no land to cultivate, no shelter to cover their heads. It was like freeing a man who had been unjustly imprisoned for years, and on discovering his innocence sending him out with no bus fare to get home, no suit to cover his body, no financial compensation to atone for his long years of incarceration and to help him get a sound footing in society; sending him out with only the assertion: “Now you are free.” What greater injustice could society perpetrate? All the moral voices of the universe, all the codes of sound jurisprudence, would rise up with condemnation at such an act. Yet this is exactly what America did to the Negro. In 1863 the Negro was given abstract freedom expressed in luminous rhetoric. But in an agrarian economy he was given no land to make liberation concrete. After the war the government granted white settlers, without cost, millions of acres of land in the West, thus providing America’s new white peasants from Europe with an economic floor. But at the same time its oldest peasantry, the Negro, was denied everything but a legal status he could not use, could not consolidate, could not even defend. As Frederick Douglass came to say, “Emancipation granted the Negro freedom to hunger, freedom to winter amid the rains of heaven. Emancipation was freedom and famine at the same time.” The marvel is, as he once said, that Negroes are still alive.

In dealing with the ambivalence of white America, we must not overlook another form of racism that was relentlessly pursued on American shores: the physical extermination of the American Indian. The South American example of absorbing the indigenous Indian population was ignored in the United States, and systematic destruction of a whole people was undertaken. The common phrase, “The only good Indian is a dead Indian,” was virtually elevated to national policy. Thus the poisoning of the American mind was accomplished not only by acts of discrimination and exploitation but by the exaltation of murder as an expression of the courage and initiative of the pioneer. Just as Southern culture was made to appear noble by ignoring the cruelty of slavery, the conquest of the Indian was depicted as an example of bravery and progress.

Thus through two centuries a continuous indoctrination of Americans has separated people according to mythically superior and inferior qualities while a democratic spirit of equality was evoked as the national ideal. These concepts of racism, and this schizophrenic duality of conduct, remain deeply rooted in American thought today. This tendency of the nation to take one step forward on the question of racial justice and then to take a step backward is still the pattern.

The civil rights measures of the 1960s engraved solemn rights in the legal literature. But after writing piecemeal and incomplete legislation and proclaiming its historic importance in magnificent prose, the American Government left the Negro to make the unworkable work. Against entrenched segregationist state power, with almost total dependence economically on those they had to contend with, and without political experience, the impoverished Negro was expected to usher in an era of freedom and plenty. When the war against poverty came into being in 1964, it seemed to herald a new day of compassion. It was the bold assertion that the nation would no longer stand complacently by while millions of its citizens smothered in poverty in the midst of opulence. But it did not take long to discover that the government was only willing to appropriate such a limited budget that it could not launch a good skirmish against poverty, much less a full-scale war.

There is a tragic gulf between civil rights laws passed and civil rights laws implemented. There is a double standard in the enforcement of law and a double standard in the respect for particular laws. With all of her dazzling achievements and stupendous material strides, America has maintained its strange ambivalence on the question of racial injustice. The value in pulling racism out of its obscurity and stripping it of its rationalizations lies in the confidence that it can be changed. If America is to respond creatively to the challenge, many individuals, groups and agencies must rise above the hypocrisies of the past and begin to take an immediate and determined part in changing the face of their nation. As a first step on the journey home, the journey to full equality, we will have to engage in a radical reordering of national priorities.

Are we more concerned with the size, power and wealth of our society or with creating a more just society? The failure to pursue justice is not only a moral default. Without it social tensions will grow and the turbulence in the streets will persist despite disapproval or repressive action. Even more, a withered sense of justice in an expanding society leads to corruption of the lives of all Americans. All too many of those who live in affluent America ignore those who exist in poor America; in doing so, the affluent Americans will eventually have to face themselves with the question that Eichmann chose to ignore: How responsible am I for the well-being of my fellows? To ignore evil is to become an accomplice to it.

Without denying the value of scientific endeavor, there is a striking absurdity in committing billions to reach the moon where no people live, while only a fraction of that amount is appropriated to service the densely populated slums. On what scale of values is this a program of progress? In the wasteland of war, the expenditure of resources knows no restraints; here our abundance is fully recognized and enthusiastically squandered. The recently revealed misestimate of the war budget amounts to $10 billion for a single year. The error alone is more than five times the amount committed to antipoverty programs. If we reversed investments and gave the armed forces the antipoverty budget, the generals could be forgiven if they walked off the battlefield in disgust. The Washington Post has calculated that we spend $332,000 for each enemy we kill. It challenges the imagination to contemplate what lives could transform if we were to cease killing. The security we profess to seek in foreign adventures we will lose in our decaying cities. The bombs in Vietnam explode at home; they destroy the hopes and possibilities for a decent America.

A considerable part of the Negro’s efforts of the past decades has been devoted, particularly in the South, to attaining a sense of dignity. For us, enduring the sacrifices of beatings, jailings and even death was acceptable merely to have access to public accommodations. To sit at a lunch counter or occupy the front seat of a bus had no effect on our material standard of living, but in removing a caste stigma it revolutionized our psychology and elevated the spiritual content of our being. Instinctively we struck out for dignity first because personal degradation as an inferior human being was even more keenly felt than material privation.

But dignity is also corroded by poverty no matter how poetically we invest the humble with simple graces and charm. No worker can maintain his morale or sustain his spirit if in the market place his capacities are declared to be worthless to society. The Negro is no longer ashamed that he is black — he should never have permitted himself to accept the absurd concept that white is more virtuous than black, but he was crushed by the propaganda that superiority had a pale countenance. That day is fast coming to an end. However, in his search for human dignity he is handicapped by the stigma of poverty in a society whose measure of value revolves about money. If the society changes its concepts by placing the responsibility on its system, not on the individual, and guarantees secure employment or a minimum income, dignity will come within reach for all.

Meanwhile, any discussion of the problems of inequality is meaningless unless a time dimension is given to programs for their solution. It is disquieting to note that President Johnson in his message to Congress on the Demonstration Cities program stated, “If we can begin now the planning from which action will flow, the hopes of the twentieth century will become the realities of the twenty-first.” On this timetable many Negroes not yet born and virtually all now alive will not experience equality. The virtue of patience will become a vice if it accepts so leisurely an approach to social change. Conflicts are unavoidable because a stage has been reached in which the reality of equality will require extensive adjustments in the way of life of some of the white majority. Many of our former supporters will fall by the wayside as the movement presses against financial privilege. Others will withdraw as long-established cultural privileges are threatened.

What is freedom? It is, first the capacity to deliberate or to weigh alternatives. “Shall I be a doctor or a lawyer?” “Shall I be a Democrat, Republican or Socialist?” “Shall I be a humanist or a theist?” Second, freedom expresses itself in decision. The word “decision,” like the word “incision,” involves the image of cutting. Incision means to cut in, decision means to cut off. When I make a decision I cut off alternatives and make a choice. The existentialists say we must choose, that we are choosing animals, and that if we do not choose, we sink into thinghood and the mass mind. A third expression of freedom is responsibility. This is the obligation of the person to respond if he is questioned about his decisions. No one else can respond for him. He alone must respond, for his acts are determined by the totality of his being.

The immorality of segregation is that it is a selfishly contrived system which cuts off one’s capacity to deliberate, decide and respond. The absence of freedom imposes restraint on my deliberations as to what I shall do, where I shall live or the kind of task I shall pursue. I am robbed of the basic quality of manness. When I cannot choose what I shall do or where I shall live, it means in fact that someone or some system has already made these decisions for me, and I am reduced to an animal. Then the only resemblance I have to a man is in my motor responses and functions. I cannot adequately assume responsibility as a person because I have been made the victim of a decision in which I played no part. Nothing can be more diabolical than a deliberate attempt to destroy in any man his will to be a man and to withhold from him that something which constitutes his true essence. [11]

_____________

Notes:

[1] King, Dr. Martin Luther (1968). “Where Do We Go From Here: Chaos Or Community?”. New York, NY: Beacon Press, pgs 80, 86, 99, 151. ISBN 0807005711

[2] Kendall, David. (April, 2009). “Dr. King Spanks Obama: Part 1″. Oped News. http://www.opednews.com/articles/Dr-King-Spanks-Obama-Par-by-David-Kendall-090412-92.html

[3] Douglass, James W. (March 15. 2000). “The King Assassination: After Three Decades, Another Verdict”. Christian Century. http://www.precaution.org/lib/09/prn_king_assassination_another_verdict.000315.htm

[4] Sheehan, Cindy. (January, 2009). “The Legacy of Dr. King”. Workers Action. http://www.workerscompass.org/mlk_sheehan.html

[5] Pilger, John. (April, 2009). “Obama’s 100 Days: The Mad Men Did Well”. World News Daily: Information Clearing House. http://informationclearinghouse.info/article22514.htm

[6] Chomsky, Noam; Carlos Peregrín Otero. (2003). “Chomsky on democracy & education”. Routledge. pg 249, ISBN 0415926327.

[7] Kendall, David. (2009). “Natural Adversaries”. Oped News. http://www.opednews.com/articles/Natural-Adversaries-by-David-Kendall-090324-854.html

[8] Chandler, David. (2009). “Tour of the US Income Distribution: The L-Curve”. David Chandler. http://www.lcurve.org/

[9] infoplease. (2009). “U.S. Voting Rights”. infoplease. http://www.infoplease.com/timelines/voting.html

[10] Wikipedia. (2009). “Right to vote: History of suffrage in the United States”. Wikipedia. http://en.wikipedia.org/wiki/Right_to_vote#History_of_suffrage_in_the_United_States

[11] King, Dr. Martin Luther (1968). “Where Do We Go From Here: Chaos Or Community?”. New York, NY: Beacon Press, Excerpts from chapter 3. ISBN 0807005711

Natural Adversaries

In any debate regarding the current economic crisis, the antagonistic relationship between workers and investors seems most conspicuously missing from discussion. Everyone seems to have a solution for fixing the economy, and every theory is a little bit different. The best ones suggest placing purchasing power directly into the hands of consumers, which actually makes the most sense in terms of “fixing” the economy. But even this approach naively assumes a prevailing desire to actually “fix” or stabilize the economy. It also relies heavily upon cooperation from the US government, and as we’ve already seen, this doesn’t seem very likely.

Like Barack Obama, Franklin Delano Roosevelt also received thousands of “open letters” from people all over the world advising him how to “fix” the broken economy. An insightful letter from John Maynard Keynes was among them, but FDR ignored it along with all the others. Roosevelt made genuine efforts to correct the unemployment problem of the 1930s, but nothing helped until World War II finally forced full-employment in the US. Even so, recession returned in 1954, immediately after the Korean conflict , and we’ve struggled ever since to minimize the many strategies of private investors to drive wages down. [1] Moreover, the US Government has been hijacked by Big Business for at least the past 30-years, and no longer functions as a safety net for the general interest.

So I’m afraid the overall problem is that US wages are simply too high to support investor confidence. The interests of investors and the interests of workers are directly opposed. Yes, there are plenty of other problems. But it always boils down to wages. The general function of economic crisis is to drive wages down. Even if Barack Obama’s heart is in the right place, I doubt he can generate investor confidence in US wages compared with far cheaper labor in other countries.

Since before the Great Depression people have been shouting for “social revolution”. There’s never much agreement about how exactly this should be accomplished, but permanently removing human labor-power from the capitalist system seems the most obvious and proven approach. This can be done in the United States, as it’s already been done elsewhere, by simply transferring labor-power to the cooperative system. With a little persistence and organized financial collaboration, business becomes far more regional and democratic. The cooperative movement nonviolently removes both wages and the tyranny of private investors from the economic system altogether, and voila! — no more crisis.

No, it’s not easy. But it is fairly simple: “Tyrants need not be expropriated by force; they need only be deprived of the public’s continuing supply of funds and resources.” [2] If we understand that human labor-power -IS- the “continuing supply of funds and resources”, then Rothbard’s observation suggests some very practical application in terms of economic withdrawal — a real-world “transition” from Capitalism toward Economic Democracy. [3]

For now, the interests of investors and the interests of workers are directly opposed. This mutual antagonism accounts for the instability of our current economic system. Workers strike for higher wages by withdrawing their labor from production. Investors strike for lower wages by withdrawing capital. But Instead of “investment strike”, we politely refer to the latter as economic crisis, recession or depression. “The Hoover administration tried to popularize the word ‘depression’. They thought this was a milder word that would somehow soothe a worried American public.” [1]

However, the battle over wages threatens millions of lives and renders economic stability impossible. Insipid labels don’t soothe the heated anger of homeless workers. But the miseries of “Hooverville” don’t seem to alter their blind consent much either. Between 1929 and 1933, US investors withdrew 90-percent of their spending from the overall economy. Since wages are a direct provision of capital investment, consumer spending dropped 20-percent and $4-billion in consumer savings were depleted. [1]

Now, Bloomberg News reports $8.85-trillion is being hoarded by private investors. [4] Millions of US jobs have been lost and more of the same is on the horizon. Increased competition for jobs drives US wages down. Whether this is the intended goal or not, it is most certainly the result. The interests of investors and the interests of workers are directly opposed, particularly regarding wages.

Moreover, the capitalist economy will not automatically correct itself. It has no automatic self-regulatory device. [5] Quite the contrary, “an investment strike is a particularly formidable weapon, since it requires no planning or coordination to implement. Indeed, it will come into play ‘automatically’ if a government should come to power deemed unfriendly to business interests.” [6] As long as labor is a cost of production, investors will be highly motivated to drive wages as close to zero as possible through capital flight and capital strike. [7] [8]

Assistant Secretary of the Treasury for the Reagan Administration and a nationally syndicated columnist, Paul Craig Roberts summarizes the function of capital flight: “The off shoring of American jobs is the antithesis of free trade. Free trade is based on comparative advantage. Jobs off shoring is an activity in pursuit of lowest factor cost — an activity that David Ricardo, the originator of the free trade theory, described as the betrayal of one’s own country in pursuit of absolute advantage.” [9] [10] Short-selling is another clever investment strategy. [11] But by yanking jobs out from under millions of workers, “short” becomes a mere technical term for aggressively leveraged capital strike.

The interests of investors and the interests of workers are directly opposed. On this essential point, not everybody agrees. In fact, most people tend to disagree. Sadly, the people who most vehemently disagree are those who stand to benefit the least from continuing the sick relationship. These people are called “workers”. Their incomes are derived primarily from work, and they are paid in wages. White collar, blue collar, salary, hourly, middle-class and lower-class all fall into this general group. They also happen to comprise the vast majority of the human population, including a reserve army of unemployed — “workers”.

“Investors”, on the other hand, is a term that refers to people whose incomes are derived primarily from ownership — not wages. This group unanimously agrees (albeit very quietly) that the interests of workers and the interests of investors are directly opposed. This group also stands to benefit most from the adversarial relationship. Workers’ lives depend upon wages while investors provide and control those wages. A general conflict of interest in this regard seems readily apparent. But there is no confusion amongst the tiny group of immeasurably powerful investors regarding — wages.

Even as independent competitors, the decisions amongst individual investors tend to be very consistent, sometimes presenting the appearance of conspiracy or even central planning. If wages are too high or business is too regulated in a certain region, then investors either transfer investments to regions where wages are cheaper and business is less regulated (capital flight), or they stop investing altogether (capital strike). This is the main reason why Barack Obama’s “regulation” will not likely “save Capitalism from itself”. [12] The interests of workers and the interests of investors are directly opposed.

But while investors tend to be very unified in their understanding of Capitalism, workers tend to be stubbornly and chaotically divided. This is a powerful advantage for investors and a severe disadvantage for everyone else. Investors don’t need to organize a union or meet in a secret room to plan an investment strike. Nowadays, they can do this from the comfort of their own homes, sitting in their underwear in front of a computer screen.

Investors simply understand how the capitalist system works and they respond — “automatically” — against the best interests of every life on the planet whose sustenance relies upon wages. Since private investment is the primary source of wages and workers have little or no control of those wages, workers always find themselves at the mercy of investors — particularly regarding wages.

If we could all agree that this sick relationship is the root of all our socioeconomic problems, we might have withdrawn from it in favor of more balanced and sustainable arrangements a long time ago. But we don’t all agree. Unfortunately, no matter how painful the abusive relationship becomes, most proud “Americans” continue chasing an illusion called “The American Dream”. Since US wages are generally insufficient to maintain exorbitant levels of US consumption, brave Americans throw themselves head-long into debt to maintain their delusional pursuit of upward mobility.

All goes well for 40-years or so, even as Big Business continues to castrate labor and deregulate banking. Our trusted government plays along with the game, and nobody seems to notice. After all, we’re getting what we always wanted, right? Something for nothing — the “American Dream” — Yay team.

But then the spring-loaded trap slams shut with a loud metallic “CLANK!” Workers suddenly lose their jobs and their homes, unemployment and crime escalate, and government officials point fingers at each other to evade the blame as a supposedly “liberal” administration not-so-coincidentally comes into power.

“Save us, Obama! Save us!” comes the desperate cry of the American middle-class as they look down in horror at the rest of society, “We don’t want to be like THOSE people!”

But FDR didn’t “save Capitalism from itself”, and neither will Barack Obama. [12] Turns out the Japanese actually “saved” the American economy when they bombed Pearl Harbor in 1941. Expensive as they might have seemed, Roosevelt’s “New Deal” programs were far too small to stop the avalanche of growing US unemployment.

Instead, the Great Depression finally ended with the vast production of the wartime economy. “Government spending, which had frightened Roosevelt when atop $15-billion in 1936, soared above $100-billion in the middle of the war. The massive government intervention in the economy finally brought full production and full employment.” [1] And for a short time after World War II, fiscal policy seemed like an effective counter strategy for the ups and downs of investor confidence.

But now, even Keynesian government intervention seems awash, as Big Business controls our trusted government with seductive lobbying and campaign finance. Moreover, US workers are now confronted with an army of competition in the labor market imposed by civil rights, feminism, immigration and the hypermobility of capital driven by technological advancement. [6] [13] Forced into poverty by a US middle-class pursuit of the “American Dream”, cheap labor in Mexico, India, China, Korea and the Philippines are now the greatest competitors for middle-class American jobs.

Justice is a funny thing, ain’t it? Groping and grabbing and stabbing each other in the back, “Americans” stand on each other’s throats in a desperate attempt to ascend the corporate ladder of individual success. But the greatest obstacle to “The American Dream” seems to be — “The American Dream” — and there’s not a thing that George W. Obama can do about it.

Thanks to all his Republicratic predecessors, the bulk of Uncle Tom’s [14] “economic recovery plan” will most likely be paid to workers outside the United States — because — most of the world’s manufacturing now resides outside the United States. [15] As Obama himself has observed, batteries for electric cars and hybrids are manufactured in Japan and wind turbines for electric power are manufactured in Europe. Meanwhile, Bill Gates and friends are pressuring the US Congress for more lenient immigration laws so that Microsoft and other US corporations can avoid hiring “American” workers within the United States. [9]

None of this comes as much of a surprise. Workers and investors are natural adversaries because their interests are directly opposed. Human beings tend to produce more than they consume, and human labor-power is the one commodity that creates more value than it costs to buy. But as long as labor is a cost of production, investors will try to drive wages as close to zero as possible. This conflict of human interest is the dysfunctional root of our entire economic system.

Eventually, the “marginal utility” of this sick relationship must come into question. Eventually this general dysfunction must be rejected and replaced. Most of our economic problems could be solved by permanently removing the antagonism between workers and investors with regard to wages. Since about 99-percent of us happen to be workers, the most obvious approach might be to get rid of both wages and investors to arrive at a more balanced and sustainable system of “Economic Democracy”. [3]

But the proposal of a new economic model, or even reform agendas, only raises more questions about “transition”. How can we possibly get from “here” to “there”? In this regard, the power of economic withdrawal seems largely misunderstood and grossly underestimated. If most of us can’t even admit that the current crisis was created by collective consent, then how can we possibly reform or replace the existing model through either democracy or consensus?

Despite Barack Obama’s flowery claims regarding faith and hope, it was “work” — human labor and innovation — that made the United States a dominating force in the modern world. The US could continue to provide an innovative and glimmering example for the rest of the world to emulate. But if we cannot generally agree that labor-power is the most fundamental basis for any human economy, then how can we collectively withdraw that power from the current crisis in favor of a more balanced and sustainable system?

Of course, a new and improved economic system will not save the earth or even save the human race. Turns out the planet doesn’t need any “saving” –WE DO– For the first time in the Earth’s 4.5-billion-year history, human influence is THE most significant factor in ecological change that threatens to kill us all. Assuming this self-created human disaster doesn’t completely exterminate the human species, how should human survivors reorganize to prevent similar calamities in the future?

These and many other questions must be explored with regard to “transition” from Capitalism toward Economic Democracy. In general, creation cannot dominate its creator. People like to worship their own creations just as dogs seem to enjoy sniffing their own feces. But at some point the human species needs to grow up and realize that Capital cannot dominate People, and People cannot dominate Nature. The model is upside-down, ladies & gentlemen. It’s time to flip it over.

_________

David Kendall lives in Washington state and is concerned about the future of our world.
_________

Notes:

[1] Shoumacher, David and Richard Gill. (1997 – 2008). “Economics USA: John Maynard Keynes”. Annenberg Media. ISBN: 1-57680-527-1. http://www.learner.org/resources/series79.html

[2] Rothbard, Murray N. (1975). “The Politics of Obedience”. LewRockwell.com. http://www.lewrockwell.com/rothbard/rothbard29.html

[3] Wikipedia. (01/02/2009). “Economic Democracy”. Wikipedia. http://en.wikipedia.org/wiki/Economic_democracy

[4] Martin, Eric, and Michael Tsang. (01/04/2008). “Cash Glut Could Take Markets on a Ride”. Bloomberg News/The Washington Post. http://www.washingtonpost.com/wp-dyn/content/article/2009/01/03/AR2009010300027_pf.html

[5] Shoumacher, David, and Rober L. Heilbroner. (1997 – 2008). “Economics USA: John Maynard Keynes”. Annenberg Media. ISBN: 1-57680-527-1. http://www.learner.org/resources/series79.html

[6] Schweickart, David (June 2002). “After Capitalism”. Rowman & Littlefield Publishers, Inc. ISBN 0742513009

[7] Wikipedia. (3/21/2009). “Capital flight”. Wikipedia. http://en.wikipedia.org/wiki/Capital_flight

[8] Wikipedia. (3/21/2009). “Capital strike”. Wikipedia. http://en.wikipedia.org/wiki/Capital_strike

[9] Roberts, Paul Craig. (2/19/2009). “President Of Special Interests”. Countercurrents. http://www.countercurrents.org/roberts190209.htm

[10] Wikipedia. (3/21/2009). “Comparative advantage”. Wikipedia. http://en.wikipedia.org/wiki/Comparative_advantage

[11] Wikipedia. (3/21/2009). “Short (finance)”. Wikipedia. http://en.wikipedia.org/wiki/Short_(finance)

[12] Obama, Barack (2006). “The Audacity of Hope: Thoughts on Reclaiming the American Dream”. Crown Publishing Group. pg 155. ISBN 0307237699.

[13] Barnes, Peter and Chuck Collins. (11/1/2006). “Capitalism 3.0: A Guide to Reclaiming the Commons”. Berrett-Koehler Publishers. ASIN: B001KYEZPG. http://www.capitalism3.com/

[14] Kendall, David L. (11/10/2008). “The Truth About Ralph Nader and Uncle Tom”. OpEd News. http://www.opednews.com/articles/The-Truth-About-Ralph-Nade-by-David-Kendall-081110-496.html

[15] Ford, Glen. (2/25/2009). “How Can the U.S. Economy Recover Without Manufacturing Capacity?”. The Market Oracle. http://www.marketoracle.co.uk/Article9109.html

Bailouts, Stimulus Packages or Redistribution of Assets?

Part Two of Two

Unconstrained, the bankers have financed all of the profit-producing, declared and undeclared wars. The U.S. government alleged that the Second World War was caused by obstacles to free trade, exacerbated by the financial events of 1929 manifested in Nazi fascism and responsible for the tensions that led to the Second World War. As a consequence of their questionable theory, the conditions of receiving American economic aid included the implementation of a free trade policy. Free trade policies, like central banks, only assist the bankers and the corporations who exploit cheap labor in third world countries.

World War II ended the depression. There was plenty of money. People had jobs. Women were encouraged to work – more money to service the interest payments to the Federal Reserve. Shuffling women into the workplace was really never about equal rights and opportunities, despite the rhetoric. Bankers serve on corporate boards and control corporate decisions. They depress or increase corporate stock by leveraging loans. When stock prices are depressed, bankers’ agents purchase large blocks of the company’s stock. The bank may then approve a multi-million dollar loan to the company which increases the stock which can be sold at a profit. Billions are accrued, enabling the purchase of additional stock. The Federal Reserve Board manipulates the market by increasing or decreasing their discount rates. Stocks soar or crash at their whim, sustained by economic experts who manipulate public opinion.

The Fed can also coerce corporations to borrow huge sums so that earnings can be siphoned off to pay the interest to the banks, reducing actual profits. Banks may collect billions in interest through corporate loans even with depressed stock prices. The bankers benefit while individual stockholders suffer. New money or credit carries debt, keeping most citizens in a never-ending cycle of debt. Dumping more money into the system, which bailouts and stimulus packages do, devalues the money already in circulation which escalates the prices of basic commodities, usually without comparable wage increases. Compound interest on mortgages and other items produces massive profits for the banks. Over the term of a mortgage, a house ultimately costs as much as three homes. With numerous taxes attached to products and services, plundered Americans are drowning in debt. If you think you are off the hook because you have paid off your mortgage, just fail to pay property taxes and see how fast the government seizes your house. We have been transformed from a debt-free nation into a debt-ridden nation.

Since 1935, the one dollar Federal Reserve Note has had the Illuminati all-seeing eye within the Great Seal. At the base of the pyramid is Roman numerals 1776, the year the Illuminati was founded. One dollar bills were printed as Federal Reserve Notes beginning in 1963. The phrase “In God We Trust” was added in 1957. Considering the enslaving amount of usury that we pay, totally eschewed by Jesus, the Fed’s use of that statement on their notes appears to be an ironic hoax on the Christian citizens of this country. The Power Elite enjoy concealing their nefarious agenda in plain sight. Under the pyramid are the Latin words – “Nova Ordo Seclorum” which means “a new order of the ages” or “new order of the centuries.” The words “Annuit Coeptis” are above the eye which means “he looks upon your endeavors favorably.” Who would that be? Some suggest that it represents Osiris, Egypt’s pagan god. [1]

In 1958, Chase Manhattan Bank introduced the Chase Manhattan Charge Plan, the first bank in the nation to offer customers a convenient, immediate gratification interest-bearing credit card. Consumer credit, encouraged by constant tantalizing media advertising, has sky-rocketed. Recently, big pharma started advertising their consistently inadequately tested, questionably-safe products. If your doctor fails to prescribe their latest miracle cure or vaccines for every minor malady, just ask for the product or injection and hope that the side effects don’t permanently harm or kill you.

On June 4, 1963, President John F. Kennedy issued Executive Order 11110 which directed the U.S. Treasury to issue $4,292,893,815 in interest-free U.S. Notes. On October 2, 1963, he issued NSAM 263, an order for the immediate withdrawal of 1,000 U.S. military advisors from Vietnam and a timetable for the withdrawal of all CIA operatives and U.S. personnel. This would have ended the steady stream of profits to the banks. He was assassinated on November 22, 1963 in Dallas, Texas.

Government bailouts started in 1970 with the bailout of Penn Central which had 96,000 employees and had borrowed from most of the major banks. Additionally, those same banks held stock in the railroad and seats on their board of directors. They made many of the management decisions and were privy to insider financial information. The banks loaned the railroad more money – millions that were used to artificially inflate the stock market price and pay dividends. A month before the railroad failed and before the public was notified, Chase Manhattan’s trust department dumped 262,000 shares. The bevy of bankers who held the loans had received dividends on the worthless stock, earned interest on the loans and unloaded a total of 1.8 million share of stock after they collected the dividends. [2]

Lockheed was near bankruptcy in 1970. Bank of America had loaned them $400 million. Lockheed’s managers and employees approached congress with pleas – 31,000 jobs would be lost, national security would be at risk, sub contractors and suppliers would be hurt. Banks, due to Lockheed’s dire financial straits, would not make any further loans. Allegedly, to protect the economy, Treasury Secretary John B. Connally finagled a bailout plan guaranteed by the government (taxpayer).

Once the government stepped in, the banks freely loaned Lockheed money. Ultimately, the government awarded hundreds of no-bid contracts to Lockheed which has become one of the nation’s biggest war contractors. Other similar companies who operated more efficiently lost contracts to Lockheed. [3]

Connally, a former big oil lawyer turned Texas governor, was riding in John F. Kennedy’s limousine in the motorcade and witnessed the president’s assassination.

Connally encouraged Johnson to be aggressive in accelerating and executing the war in Vietnam. When Connally was Treasury Secretary under Nixon, he oversaw a $50 billion increase in the debt limit. Additionally, he endorsed a $40 billion budget deficit referred to as a “fiscal stimulus.” At the time, five million Americans were unemployed. Secretary Connally announced Nixon’s program to increase gold prices and officially devalue the dollar. During Nixon’s administration, the U.S. was taken off the gold standard completely, a process started by Roosevelt.

Then there was the bailout of New York City, a city overflowing with corruption and a burgeoning bureaucracy. In 1975, New York, a huge welfare state, was unable to get additional credit. New York City employees, otherwise known as friends and relatives, were paid huge salaries for lower-paying comparable jobs in private industry. The city managed to get a loan from the Treasury for $2.3 billion, approved by Congress. It was enough to continue paying interest on their previous bank loans. The taxpayers suffered the consequences through massive inflation. But the banks collected their interest, a huge source of income. New York was supposed to make changes and reduce spending. That didn’t happen. [4] Chicago, with their glut of relative and friend employees, is in similar circumstances. But Mayor Daley manages to stealthily sell public property. Recently, it was the city’s parking meters. Now, in addition to inflation, citizens pay outrageous fees to park in the city which affects business. Before that, it was the famous Skyway.

Rod Blagojevich, the former Illinois governor was arrested December 9, 2008, the day after he publicly declared that the state of Illinois would suspend all business dealings with the Bank of America, the recipient of a $25 million bailout, until it restored a credit line to Republic Windows & Doors which, without credit, was forced to close and lay off their 240 employees. The governor apparently forgot who really runs everything. His indiscretions, attributable to every other professional politician, went unnoticed until he challenged the banks. Goldman Sachs, another bailout recipient, used $6.5 billion of our taxpayer dollars to give bonuses to their financial staff.

Banks create money with a computer keystroke. The money changers can print a $5 bill or a $100 bill for a few cents each. The Federal Reserve prints money to pay the obligations of the metastasizing government. Congress authorizes the Treasury Department to print U.S. bonds, held by the Federal Reserve which the government agrees to pay it back, plus interest, by plundering the labor of the taxpayers. The Fed now considers those bonds as assets, reserves to create more credit to lend to states, municipalities, individuals and businesses. Currently, banks give credit for home purchases, cars and other commodities that people used to save for. U.S. citizens depend on consumer and business credit. When that credit is arbitrarily withheld or withdrawn, industry and spending comes to a halt.

The Federal Reserve is the power behind the recently inaugurated, smooth-talking, charismatic Barack Obama who is overly-anxious to impose government control and dispense bailouts through the Stimulus Package. Through wealth transference and suppressive legislation designed to decrease liberty, each consecutive administration moves America closer to economic collapse and one world governance. Bush coerced passage of the PATRIOT Act (written long before 9/11 and unread by Congress), facilitated the Department of Homeland Security, increased the number of FEMA detention centers, allowed unrestrained illegal invasion to drain state economies (especially California), and incited invasive economy-destroying war against two countries which do not have central banks with debt-based money under the control of the international bankers. Arabs do not believe in charging or paying usury (interest on loans). By the end of 2008, the U.S. had spent $3 trillion on the Iraq War, borrowed from the Fed with interest.

With Obama, citizens will likely be disarmed, in direct violation of the 2nd Amendment, created for citizens to protect themselves against a tyrannical government. We will finally get Hillary Clinton’s universal health care. Big pharma, run in concert with big banks and insurance companies, the main benefactors. The government will make all health decisions – who lives, who dies, how many children one may bare, etc. Natural solutions for health care may be outlawed. Warfare will continue as demonstrated by the very recent deployment of 17,000 troops to Afghanistan. This, despite those campaign promises about reducing the troops. Warfare, a huge drain on our economy and a financial boon for the Fed, will continue. Troop numbers are being augmented by waiving criminal histories of those who enlist simply because they are unable to find work. The economy will ultimately bleed-out resulting in riots, food shortages and eventually martial law and perhaps mass detention.

The recent bailouts and the current stimulus package, disguised as assistance to the populace, is a huge transference of wealth – from the taxpayer’s pockets into the banker’s pockets. Any promised infrastructure enhancements may consist of such things as the completion of the unpublicized NAFTA super highway to connect Canada, the United States and Mexico. While in Denver signing the Stimulus Package, Obama said: “We will build on the work that’s being done in places like Boulder, Colorado – a community that is on pace to be the world’s first Smart Grid city.” [5] This appears to refer to an Agenda 21 program being initiated in Boulder by Xcel Energy.

Senators disregarded the taxpayer’s pleas to reject the socialist Stimulus Package. The taxpayers, stuck with the tab, are outraged. Democratic senators, including the newly-installed Roland Burris, voted for the stimulus. Burris is now under criminal investigation for his duplicitous involvement with Rod Blagojevich’s brother regarding questionable fundraising. This issue was concealed until after his guaranteed vote. Concealment of significant facts seems common with the incoming administration and its appointments. Apologies that follow embarrassing exposures somehow seem insincere.

The outrageous, squealing, pork-filled stimulus plan was designed to benefit the bankers and bleed America dry. The 1000+ page package was certainly written months ago. Pelosi, who recently claimed that America was losing 500 million jobs a month, lacks the intelligence to devise anything more that a one page yes-memo to the bankers that finance her repetitive campaigns. Congress, with few exceptions, have not represented the voters for decades. They are agents for the banks and corporations while paying lip service to their constituents during election campaigns. They profess concern for the voter’s essential needs and pass measures that appear to address those needs which in reality expand the coffers of big business and the banks. Meanwhile, members of congress collect generous salaries with regular self-approved pay increases, lobbyist perks, private health plans, and look forward to a life-long, non-Social-Security pension.

Ayn Rand (1905-1982) said in her book Atlas Shrugged: “When you see that trading is done, not by consent, but by compulsion – when you see that in order to produce, you need to obtain permission from men who produce nothing – when you see that money is flowing to those who deal, not in goods, but in favors – when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you – when you see corruption being rewarded and honesty becoming a self-sacrifice – you may know that your society is doomed.”

Banks and corporations run a centralized, metastasizing entity, disguised as the federal government. Their objectives are promoting war while financing both sides, confiscating people’s money and resources, and propagandizing the naïve masses to maintain and perpetuate their power. Our two main political parties are their servants, government departments are the spending agencies, and the Internal Revenue Service, a private offshore corporation is the collection agency.

Thomas Jefferson said: “I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

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[1] The Greatest Story Never Told, Winston Churchill and the Crash of 1929 by Pat Riott, 1994, Nanoman Press, pg 28.

[2] The Creature From Jekyll Island by G. Edward Griffin, American Media, 2002, pp. 41-48

[3] Ibid

[4] Ibid

[5] Obama’s Remarks at Stimulus Signing, New York Times, February 17, 2009, p. 2