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Recommended: Michael Hudson: America’s Deceptive 2012 Fiscal Cliff, Part II

7:00 am in Uncategorized by szielinski

Wage Slavery plus debt peonage — these are the fates awaiting the ‘better off’ members of the 99%, Alan Simpson’s “lesser people.” The ‘worst off’ shall continue to find themselves existing on city streets, squatting in vacant land and buildings, suffering one of the many prisons which pockmark the body politic or dying from untreated illnesses. These fates — wage slavery, debt peonage and social outcast — should not be considered accidents of history. They have obvious systemic causes. The economist Michael Hudson explains in the second of a four-part series:

Today’s economic warfare is not the kind waged a century ago between labor and its industrial employers. Finance has moved to capture the economy at large, industry and mining, public infrastructure (via privatization) and now even the educational system. (At over $1 trillion, U.S. student loan debt came to exceed credit-card debt in 2012.) The weapon in this financial warfare is no larger military force. The tactic is to load economies (governments, companies and families) with debt, siphon off their income as debt service and then foreclose when debtors lack the means to pay. Indebting government gives creditors a lever to pry away land, public infrastructure and other property in the public domain. Indebting companies enables creditors to seize employee pension savings. And indebting labor means that it no longer is necessary to hire strikebreakers to attack union organizers and strikers.

Workers have become so deeply indebted on their home mortgages, credit cards and other bank debt that they fear to strike or even to complain about working conditions. Losing work means missing payments on their monthly bills, enabling banks to jack up interest rates to levels that used to be deemed usurious. So debt peonage and unemployment loom on top of the wage slavery that was the main focus of class warfare a century ago. And to cap matters, credit-card bank lobbyists have rewritten the bankruptcy laws to curtail debtor rights, and the referees appointed to adjudicate disputes brought by debtors and consumers are subject to veto from the banks and businesses that are mainly responsible for inflicting injury.

The aim of financial warfare is not merely to acquire land, natural resources and key infrastructure rents as in military warfare; it is to centralize creditor control over society. In contrast to the promise of democratic reform nurturing a middle class a century ago, we are witnessing a regression to a world of special privilege in which one must inherit wealth in order to avoid debt and job dependency.

What is truly astonishing about this situation is the nature of contemporary finance capital. In essence, it is functionless. It does not exist to generate capital for investment in the real economy. It does not provide safe storage for pension funds, insurance monies, personal savings, etc. It does not even provide the common investor with rational investment programs. Rather, finance capital today is just a system specific mechanism (or, better, set of mechanisms) which extracts massive quantities of wealth from the world. Profit taking — that is its sole purpose. Moreover, it is omnivorous and perpetually famished. It cannot be satiated. Its appetites thus put everyone at risk. It lacks a home, a national identity. It cares not for people, their cultures, societies and well-being. It is everywhere and nowhere.

It is, in a word, the vampire about which so many Americans fantasize.

First they came for welfare….

10:33 am in Uncategorized by szielinski

In Obama’s America, each day is Halloween. The “lesser people” (Alan Simpson) should be afraid, very afraid! Why? Uncle Sam is bankrupt. He lives merely on the kindness of strangers. Only painful actions can remedy this situation.

Uncle Sam, you see, has long suffered from Affluenza. While the condition is often mistaken for a state of healthy well-being, the illness can be terminal. There are limits. They need to be respected. Austerity looms. The open question before Americans today: What kind of austerity will we have? The common answer amounts to this: Uncle Sam’s Affluenza would be fatal but for the remedies which a public commitment to fiscal austerity can provide.

The medicine is harsh and drastic, but necessary.

Or, so it is often claimed by a large fraction of America’s political and economic elite. Bob Urie, on the other hand, points out that:

The scare tactics being used to cut social insurance depend on the public’s misunderstanding of several related issues. In the first, the U.S. isn’t ‘broke’ because it can create money as needed — ask yourself: how were the bank bailouts funded? Next: what is an ‘entitlement’ when existing government policy overwhelmingly benefits the rich through favorable tax treatment, cost-plus government contracts, Federal Reserve bailouts and government guarantees of the banks. ‘Free markets’ have nothing to do with how the wealthy became so. The fight over ‘entitlements’ is over how government expenditures are allocated, not over their ‘scarcity.’

Urie suggests that the rich have prevailed in the democratic class struggle and now wish to deepen and intensify their exploitation of the “lesser people,” using the federal state and its fiscal situation as their hammer:

Social Security has an income ‘cap’ of $110,000 above which no deduction is made. A billionaire who became rich by sending jobs overseas — by firing and lowering the wages of labor, pays a smaller proportion of his or her income into Social Security than does the worker whose wages have been reduced. And by reducing the wages of labor, workers are left with less to pay in to these social insurance programs through payroll taxes. The problem with Social Security and Medicare is that a small group of connected plutocrats have ‘entitled’ themselves to far more of what labor produces. How often has the deficit ‘crisis’ been raised when there is a war to be fought for multi-national oil companies or a corporate welfare scheme like the bank bailouts to be paid for?

And this all ties back to Mr. Obama’s Affordable Care Act — if he and his corporate supporters were truly interested in fiscal discipline they would have pushed for far less costly ‘Medicare for all.’ Instead Mr. Obama pursued a deal with private health insurers that includes (sic) a ‘profit’ above the cost of a government program. Those wanting to argue the political infeasibility of Medicare for all are now confronted with a ‘liberal’ Democratic President who believes he can cut the programs that most of us have paid into under known terms for decades. If doing this is politically feasible while building a rational public health care system isn’t, we are truly doomed.

Doomed? Yes….

Ultimately Mr. Obama, like his ‘opponent’ Mitt Romney, is but an apparatchik in a class war launched by the rich against the rest of us. Left out of the contrived nonsense about an ‘entitlement’ society is who exactly is entitled. Were the government spending the rich live off of under the knife there would be no argument of scarcity — we have the wars, the bailouts and corporate welfare to prove it. But social insurance programs stand between over one hundred million of our citizens and destitution. And these are programs we have collectively paid for — they aren’t a ‘gift’ as the rich and their servants in government would have us believe

Even the ‘gifts’ of income transfers, support for education and public transportation, Medicaid, subsidized housing, occupational training, works programs, etc. are not lacking in social benefits which directly and indirectly improve the quality of life enjoyed by every American. Every American would benefit from a fair and humane society, from a better standard of living. Such a society serves a common and public good. Who, after all, wants to watch the homeless die on the street for want of food and medical care? How might the United States compete with the emerging Asian economic powers when its education system, long the envy of the world at large, falters because of a lack of fiscal and political support? Who wants to bring children into the world when they will intimately know insecurity and want?

But the Nobel Laureate Americans just reelected wishes to create neither a fair nor humane society. He is a system politician who serves his various masters. The latter are cruel and greedy. Americans of the lesser kind along with the world at large deserve much better than Barack Obama. They truly need a man much better than him..

From Hoovervilles to Bush Bayous to Obamaland

3:10 pm in Uncategorized by szielinski

A Hooverville

A Bush Bayou (Sacramento, CA)

The Obamaland to come with a damaged social security office

President Obama wants to respect Constitutional limits

6:56 pm in Uncategorized by szielinski

After Barack Obama’s meeting today with Republican leaders — during which they discussed the pain they would spread around the country and when they also agreed that they could live with the pain they will cause if they go through with their plans — it was left to Treasury Secretary Geithner to whip up Congressional support for the latest austerity budget. In this matter, the New York Times reports:

Mr. Geithner appeared to be playing a role not unlike that of Ben Bernanke, the chairman of the Federal Reserve, who warned lawmakers in the fall of 2008 that unless Congress voted to bail out the banking system, the credit crisis threatened to plunge the United States into a depression. Stunned by Mr. Bernanke’s dire depiction, the lawmakers undertook measures that were until then unthinkable.

Lest his warnings go unheeded,

…Mr. Geithner told the lawmakers the White House did not believe it had the authority, under the Constitution, to continue issuing debt if it reached the debt ceiling. Nobody in the room disputed Mr. Geithner’s bleak assessment, the officials said.

Naturally, this President, a man of principle and a Constitutional scholar, would not want to exceed the authority given to his office by the Constitution. Never would he choose a path marked by political excess and legal impropriety. He would not act unconstitutionally even though his acting thusly would spare so many Americans the pain the emerging austerity budget will inflict upon them. It is just not in his nature. He will not flinch when forced by circumstances to look deeply into the abyss; nor would he refuse to throw the “lesser people” into this nothingness when Constitutional duty demands that he do so. He, like President Kennedy, would ask the “lesser people” what they can do for their country. The Constitution, as we have been told, is sacred and enduring, the Demos, on the other hand, is profane and transient.

Way too much is just enough for them

Barack Obama — a Neoliberal without Restraints

9:22 am in Uncategorized by szielinski

Now that Barack Obama has provided Wall Street with the economic and political aid it craves, wrecked Health Care Reform for a generation or more, prosecuted two politically senseless and criminal wars, tipped the Supreme Court to the right, has the 2010 midterm elections the results of which he can use as shields when his deceptions prove too damaging to his persona — now that he has accomplished so much, he appears poised to ruin Social Security. His first trick in this game, the Cat Food Commission, failed to complete its mission. But Obama seems determined, and the Commission’s failure only requires he use another tactic. The destruction of Social Security would be considered a decisive historical moment if it came to be, as Andrew Levine suggests: “The danger that the last nail is about to be driven into the New Deal’s coffin is real and imminent.”

Levine continues by stating a point that is obvious but often ignored:

Republicans may still be better than Democrats at engineering the tax system to redistribute wealth upwards. But Republicans can’t touch the ‘third rail’ of American politics. Even with the vaunted “political capital” he acquired after the 2004 election, the first that he actually won, George Bush couldn’t privatize (gut) Social Security. Clinton probably could have but for la Monica, and so can Obama, at least so long as the “folks” who routinely vote Democratic, the only people left who can block the Reaganite tide he is riding, continue to stand by their man.

We might hope that Obama faces strenuous opposition to his plan when it becomes publicly evident that he intends to wreck Social Security. Will he? Perhaps not. On the one hand, Obama would need to confront popular unrest before he trimms his sails. On the other hand, he knows he can count on the Republicans for their votes on this matter and for more than that. Levine writes, that “Obama is counting on Tea Partiers and their representatives in Congress to scare those voters into line and to bring ‘moderates’ back into his fold. Perhaps they will.” This is the “lesser evil argument” in action, revealing to be a mechanism which forces some to abandon their interests and others to follow the physically safe path.

Would it be surprising if Obama were to derive indirect political benefits from America’s white terror? I think not! As Walter Karp remarked (Karp, 1993, p. 31) years back when he discussed state party politics:

It is not electoral competition which characterizes the relation between two state party organizations, but strict and pervasive collusion. That collusion does not necessarily require conspiratorial plotting in smoke-filled back rooms. It springs up automatically between two state party organizations by virtue of powerful bonds of common interest. Neither party organization could retain control of its party unless the two organizations were in collusion. As Senator Robert Lafollette rightly remarked in 1912: “Machine politics is always bipartisan.” It is because it has to be.

An insight today even though the American political system is much different than it had been when Karp wrote these words (circa 1973).

This article was cross-posted to OpenSalon and All Tied Up and Nowhere to Go

Let’s Vote Out the SOBs

8:40 pm in Uncategorized by szielinski

We could do that, but such resistance today seems futile, according to Maureen Tkacik, of the New York Observer. She wrote:

“If you want to get some traffic on this one [the White House hiring Daley and Sperling],” a former senior House aide told The Observer, “make your angle ‘Obama’s Fixers to End the New Deal.’ They are going to dismantle Social Security. I guarantee it. And he won’t suffer any push-back. But Obama is the extremist here; he is the wing nut. There’s been a total collapse of political power on the left. The left is not even at the table, and they don’t even realize it. You can’t blame the voters. In 2006 they voted out the party of endless war and corporate bailouts. In 2008 they voted out the party of endless war and corporate bailouts. And in 2010 they voted out the party of endless war and corporate bailouts.”

Well, I am certain that some on the left are aware of their lack of political power. And for this situation the left in general cannot criticize the voters who voted for a national alternative that did not exist but for the 2008 Nader candidacy. Barack Obama may have fooled some Democrats or, perhaps, enabled them to fool themselves. But that was then. As of this moment, who but a political innocent, a yellow dog Democrat or a committed neoliberal would vote for him? No one would except for those savvy individuals who consider voting for the “lesser evil” Democrat to be an iron rule of political life.

Building large and well-organized social movements provides a path that can break the power of the legacy party duopoly, an outcome that would create political options for a left that effectively has none. This is the path principled leftist must take if they wish to become effective.

This article was cross-posted to All Tied Up and Nowhere to Go and OpenSalon

Progress Rusts While Reaction and Conformism Play the Fool

3:29 pm in Uncategorized by szielinski

BooMan defends the Democratic Party, with its warts, grifters and insiders, along with President Obama, the most advanced representative of that Party and its politics:

Can’t we [progressives] have a party just for ourselves?

Well, actually, no. No, we can’t. Not if we want to keep the crazies at bay we can’t, anyway. It’s hard to define the Obama coalition, and people make the mistake on focusing on only one element of it (e.g. the anti-war movement, the youth, people of color, disillusioned Republicans, fickle independents, people tired of the bickering). I don’t know what unites all these people other than a belief in what I’d call ‘core American values’ that we established from the onset of the New Deal to the conclusion of the Cold War. I don’t mean the development of the national security state or the exact parameters of our economic system, because people disagree about that stuff. What brought together Obama’s coalition wasn’t anything specific as much a sense that Bush and Cheney had taken us off a well-trodden path. And that path might have had its flaws, but it was a good path that we needed to get back to. Some people never liked the path, but they weren’t the majority-makers.

When Obama won, he took the center-right with him. The center-right are part of his coalition. They didn’t make the majority alone. Obama also attained spectacular base-turnout and brought in all kinds of new voters. Taken together, these groups put him over the top and wiped out the last vestiges of the Republican Party in New England (in the House, anyway). Obama didn’t win a mandate for progressive change, although he did have many progressive elements in his platform. He won a mandate for responsible governance in the mold of presidents past. And, because his majority was made through both the incorporation of the reasonable right and the newly engaged left, there was a built-in contradiction that he couldn’t avoid when he went about his policy decisions.

It’s not at all difficult to identify the red flag in the quoted passage: “Obama didn’t win a mandate for progressive change, although he did have many progressive elements in his platform. He won a mandate for responsible governance in the mold of presidents past. And, because his majority was made through both the incorporation of the reasonable right and the newly engaged left, there was a built-in contradiction that he couldn’t avoid when he went about his policy decisions.”

So, the Democratic Party left and their fellow travelers did not vote for progressive reforms when they voted for Obama in 2008, they voted instead for responsible governance such as the conservative “New Democrat” Bill Clinton practiced during the 1990s. But, a key component of this position assumes or asserts as fact that Bill Clinton actually provided America with good government during his two terms. Did he? If Clinton gave America good government during his two terms, then it was government of this stripe:

Those who we know and who pay to play are part of our team; those who do not pay and who are faceless get good government.

Good government under Bill Clinton amounted to his botching his defective reform program for America’s irrational health care system; affirming bubble-master Allan Greenspan in 1992; making bloody, senseless and immoral war in the Balkans, Afghanistan, the Sudan and Iraq; pursuing a regressive, barbaric and successful effort to ‘reform’ welfare along with a similar effort to reform Social Security and Medicare; shepherding NAFTA and GATT through Congress; repealing the Glass-Steagall Act with the passage of the Gramm-Leach-Bliley Act; and much else. Candidate Clinton’s “new covenant” amounted to little more than an attempt to repackage old-time fiscal conservatism, along with the “beggar my neighbor” cultural values it encapsulates, in a ‘postmodern’ package. Far from providing a true third way that splits the difference between Reagan’s voodoo economics and the vestiges of New Deal liberalism which survived Reagan and George H.W. Bush, Clinton gave the country his variant of modern Republicanism, as he was quoted as saying by Bob Woodward (p. 165):

“Where are all the Democrats,” Clinton bellowed. “I hope you’re all aware we’re all Eisenhower Republicans,” he said, his voice dripping with sarcasm. “We’re all Eisenhower Republicans here, and we are fighting the Reagan Republicans. We stand for lower deficits and free trade and the bond market. Isn’t that great.”

It was only a matter of time before some conservatives learned to appreciate Bill ‘third way’ Clinton. One opined:

If they were honest with themselves, however, conservatives would view the Clinton presidency the same way many liberals now view the Reagan years. Just as Ronald Reagan was not as bad as many liberals thought, neither was Bill Clinton as bad as many conservatives think.

Like most conservatives, I thought Bill Clinton was a terrible president when he was in office. Especially after the Republicans won control of Congress in 1994, we all dreamed of the paradise that would be ours if we could just get a Republican in the White House. We could fix the budget and the tax system, rein in the bureaucracy, neuter the trade unions and trial lawyers, and do all those other things that could never be done because Democrats were always blocking the way.

It was foolish to think like this, of course….

Why was it foolish? “At least on economic policy, there is much to praise and little to criticize in terms of what was actually done (or not done) on his [Clinton’s] watch.”

Robert Pollin, an economist by trade, summed up his analysis of Clinton’s economic program thusly: “…as we have seen, Clinton offered only a mildly less severe version of neoliberal orthodoxy, adhering fundamentally to all its basic tenants. (p. 173)” But, as Pollin also notes: “Clinton never abandoned the idea that ‘it’s the economic policy, stupid’ should remain the watchwords of his Presidency. It was just that the “Putting People First” agenda of his 1992 campaign would have to yield top priority to the prerogatives of the financial markets and the wealthy. (p. 21)”

Bill Clinton — BooMan’s “well-trodden path” is merely a road troubled by mass poverty, oligarchic political power, expansive social control and the political predominance of finance capital over everything but the security-surveillance system. Obama, like Clinton before him, is just an agent of a class war that has remained in effect for the last few centuries. We must do better. To achieve better, the left might first choose to abandon the Democrats and oligarchic politics in general.