https://ourfiniteworld.com/2016/03/29/why-we-have-a-wage-inequality-problem/
Why we have a wage inequality problem
Wage inequality is a topic in elections around the world. What can be done to provide more income for those without jobs, and those with low wages?
Wage inequality is really a sign of a deeper problem; basically it reflects an economic system that is not growing rapidly enough to satisfy everyone. In a finite world, it is easy for an economy to grow rapidly at first. In the early days, there are enough resources, such as land, fresh water, and metals, for each person to get a reasonable-sized amount. Each would-be farmer can obtain as much land as he thinks he can work with; fresh water is readily available virtually for free; and goods made with metals, such as cars, are not expensive. There are many jobs available, and wages for most people are fairly similar.
As population grows, and as resources degrade, the situation changes. It is still possible to grow enough food, but it takes large farms, with expensive equipment (but very few actual workers) to produce that food. It is possible to produce enough water, but it takes high-tech equipment and a handful of workers who know how to use the high-tech equipment. Metals suddenly need to be lighter and stronger and have other characteristics for the high tech industry, thus requiring more advanced products. International trade becomes more important to be able to get the correct mix of materials for the advanced products needed to operate the high-tech economy.
With these changes, the economic system that previously provided many jobs for those with limited training (often providing on-the-job training, if necessary) gradually became a system that provides a relatively small number of high-paying jobs, together with many low-paying jobs. In the United States, the change started happening in 1981, and has gotten worse recently.
Figure 1. Chart comparing income gains by the top 10% to income gains by the bottom 90% by economist Emmanuel Saez. Based on an analysis IRS data, published in Forbes.
Figure 1. Chart comparing income gains by the top 10% to those of the bottom 90%, by economist Emmanuel Saez. Based on an analysis of IRS data; published in Forbes.
What Happens When an Economy Doesn’t Grow Rapidly Enough?
If an economy is growing rapidly enough, it is easy for everyone to get close to an adequate amount. The way I think of the problem is that as economic growth slows, the “overhead” grows disproportionately, taking an ever-larger share of the goods and services the economy produces. The ordinary worker (non-supervisory worker, without advanced degrees) tends to get left out. Figure 2 is my representation of the problem, if the current pattern continues into the future.
Figure 2. Authors' depiction of changes to workers share of output of economy, as costs keep rising for other portions of the economy keep rising.
Figure 2. Author’s depiction of changes to workers’ share of output of economy, if costs keep rising for other portions of the economy. (Chart is only intended to illustrate the problem; it is not based on a study of the relative amounts involved.)
The reason for the workers’ declining share of the total is that we live in a finite world. We are using renewable resources faster than they replenish and continue to use non-renewable resources. The workarounds to fix these problems take an increasing share of the total output of the economy, leaving less for what I have called “ordinary workers.” The problems we encounter include the following:
Pollution control. Pollution sinks are already full. Continuing to use non-renewable resources (including burning fossil fuels) adds increased pollution. Workarounds have costs, and these take an increasing share of the output of the economy.
Energy used in energy production. When we started extracting energy products, the cheapest, easiest-to-extract energy products were chosen first. The energy products that are left are higher-cost to extract, and thus require a larger share of the goods the economy produces for extraction.
Water, metals, and soil workarounds. These suffer from deteriorating quantity and quality, leading to the need for workarounds such as desalination plants, deeper mines, and more irrigated land. All of these take an increasingly large share of the output of the economy.
Interest and dividends. Capital goods tend to be purchased through debt or sales of stock. Either way, interest payments and dividends must be made, leaving less for workers.
Increasing hierarchy. Companies need to be larger in size to purchase and manage all of the capital goods needed to work around shortages. High pay for supervisors reduces funds available to pay lower-ranking employees.
Government funding and pensions. Government programs grow in size in good times, but are hard to cut back in hard times. Pensions, both government and private, are a particular problem because the number of elderly people tends to grow.
It should be no surprise that this type of continuing pattern of eroding wages for ordinary workers leads to great instability. If nothing else, workers become increasingly disillusioned and want to change or overthrow the government.
It might be noted that globalization also plays a role in this shift toward lower wages for ordinary workers. Part of the reason for globalization is simply to work around the problems listed above. For example, if pollution becomes more of a problem, globalization allows pollution to be shifted to countries that do not try to mitigate the problem. Globalization also allows businesses to work around the rising cost of oil production; production can be shifted to countries that instead emphasized coal in their energy mix, with much lower energy used in energy production. With increased globalization, people who are primarily selling the value of their own labor find that wages do not keep up with the rising cost of living.
Studies of Previous Economies that Experienced Declining Wages of Ordinary Workers
Researchers Peter Turchin and Surgey Nefedov analyzed eight civilizations that collapsed in detail, and recorded their findings in the book Secular Cycles. According to them, the typical economic growth pattern of civilizations that collapsed was similar to Figure 3, below. Before the civilizations began to collapse (Crisis Stage), they hit a period of Stagflation. During that period of Stagflation, wages of ordinary workers tended to fall. Eventually these lower wages led to the downfall of the system.
Figure 3. Shape of typical Secular Cycle, based on work of Peter Turkin and Sergey Nefedov in Secular Cycles.
Figure 3. Shape of typical Secular Cycle, based on work of Peter Turchin and Sergey Nefedov in Secular Cycles. Chart by Gail Tverberg.
In many instances, a growth cycle started when a group of individuals discovered a way that they could grow more food for their group. Perhaps they cleared trees from a large plot of land so that they could grow more food, or they found a way to irrigate an area that was dry, again leading to sufficient food for more people. A modern analogy would be discovering how to use fossil fuels to grow more food, thus allowing population to rise.
At first, population grew rapidly, and incomes tended to grow as well, as the size of the group expanded to the carrying capacity of the improved land. Once the economy got close to the carrying capacity of the land, a period of Stagflation took place. There no longer was room for more farmers, unless plots of land were subdivided. Would-be farmers were forced to take lower-paying service jobs, or to become farmers’ helpers. In this changing world, debt levels rose, and food prices spiked.
To try to solve the many issues that arose, there was a need for more elite workers–what we today would call managers and high-level government officials. In some cases, a decision would be made to expand the army, in order to try to invade other countries to obtain more land to solve the problem of inadequate resources for a growing population. All of these changes led to a higher needed tax level and more high-level managers.
What tended to bring the system down was the growing wage inequality and the resulting low wages for ordinary workers. Governments needed ever-higher taxes to pay for their expanding services, but they had difficulty collecting sufficient tax revenue. If they raised taxes to an adequate level, workers found themselves without sufficient money for food. In their weakened state, workers became subject to epidemics. Governments with inadequate tax revenue tended to collapse.
Sometimes, rather than collapse, wars were fought. If the wars were successful, the resource shortage that ultimately led to low wages of workers could be addressed. If not, the end of the group might come through military defeat.
Today’s Fundamental Problem: The World Economy Can No Longer Grow Quickly
Because of our depleted resources and because of the world’s growing population, the only way that the world economy can now grow is in a strange way that assigns more and more output to various parts of “overhead” (Figure 2), leaving less for workers and for unemployed individuals who want to be workers.
Automation looks like it would be a solution since it can produce a large amount of goods, cheaply. It doesn’t really work, however, because it doesn’t provide enough employees who can purchase the output of the manufacturing system, so that demand and supply can stay in balance. In theory, companies that automate their operations could be taxed at a very high rate, so that governments could pay would-be workers, but this doesn’t work either. Companies have a choice regarding which country they operate in. If a tax is added, companies can simply move to a lower-tax rate jurisdiction, where no tax is required for automation.
The world is, in effect, reaching the end of the Stagflation period on Figure 3, and approaching the Crisis period on Figure 3. The catch is that the Crisis period is likely to be shorter and steeper than illustrated on Figure 3, because we live in a much more interconnected world, with more dependence on debt and world trade than in the past. Once the interconnected world economic system starts to fail, we are likely to see a rapid drop in the total amount of goods and services produced, worldwide. This will produce an even worse distribution problem–how does everyone get enough?
The low oil, natural gas, and coal prices we are now seeing may very well be the catalyst that brings the economy to the “Crisis Period” or collapse. Unless there is a rapid increase in prices, companies will cut back on fossil fuel production, as soon as 2016. With less fossil fuel production, the total quantity of goods and services (in other words, GDP) will drop. Most economists do not understand that there is a physics reason for this problem. The quantity of energy consumed needs to keep rising, or world GDP will decline. Technology gains and energy efficiency improvements provide some uplift to GDP growth, but this generally averages less than 1% per year.
Figure 4. World GDP growth compared to world energy consumption growth for selected time periods since 1820. World real GDP trends for 1975 to present are based on USDA real GDP data in 2010$ for 1975 and subsequent. (Estimated by author for 2015.) GDP estimates for prior to 1975 are based on Maddison project updates as of 2013. Growth in the use of energy products is based on a combination of data from Appendix A data from Vaclav Smil's Energy Transitions: History, Requirements and Prospects together with BP Statistical Review of World Energy 2015 for 1965 and subsequent.
Figure 4. World GDP growth compared to world energy consumption growth for selected time periods since 1820. World real GDP trends for 1975 to present are based on USDA real GDP data in 2010$ for 1975 and subsequent. (Estimated by author for 2015.) GDP estimates for prior to 1975 are based on Maddison project updates as of 2013. Growth in the use of energy products is based on a combination of data from Appendix A data from Vaclav Smil’s Energy Transitions: History, Requirements and Prospects together with BP Statistical Review of World Energy 2015 for 1965 and subsequent.
Are There Political Strategies to Solve Today’s Wage Inequality Problem?
Unfortunately, the answer is probably, “No.” While some strategies look like they might have promise, they risk the possibility of pushing the economy further toward financial collapse, or toward war, or toward a major reduction in international trade. Any of these outcomes could eventually bring down the system. There also doesn’t seem to be much time left.
Our basic problem is that the world economy is growing so slowly that the ordinary workers at the bottom of Figure 2 find themselves with less than an adequate quantity of goods and services. This problem seems to be getting worse rather than better, over time, making the problem a political issue.
These are a few strategies that have been mentioned on political sites for fixing the problem:
Provide a basic income to all citizens. The intent of this strategy is to try to capture a larger share of the world’s goods and services by printing money (or borrowing money). This money would hopefully allow citizens to purchase a larger share of the goods and services available on the world market. If the pool of goods and services is pretty much fixed in total, more goods and services purchased by one country would mean fewer goods and services purchased by other citizens of other countries. I would expect that this strategy would not really work, because of changing currency relativities: the level of the currency of the country issuing the checks would tend to fall relative to the currencies of other countries. The basic problem is that it is possible to print currency, but not goods and services. There is also a possibility that printing checks for everyone will encourage less work on the part of citizens. If citizens do less work, the country as a whole will produce less. Such a change would leave the country worse off than before.
Lower interest rates, even negative interest rates. With lower interest rates, the interest portion of the Interest and Dividend sector shown on Figure 2 can theoretically mostly disappear, leaving more money for wages on Figure 2 and thus tending to “fix” the wage problem this way. Low interest rates also tend to reduce dividends, because companies will choose to buy back part of their stock and issue very low interest rate debt instead. If interest rates become negative, the sector can completely disappear. The ultra-low interest rates will have negative ramifications elsewhere. Banks are likely to have a hard time earning an adequate income. Pension funds will find it impossible to pay people the pensions they have been promised, creating a different problem.
Get jobs back from foreign countries through the use of tariffs. Some jobs might be easier to get back from foreign countries than others. For example, programming, call center operations, and computer tech support are all “service type” jobs that can be done from anywhere, and thus could be transferred back easily. In situations where new factories need to be built, and materials sourced from around the world, the transfer would be more difficult. Businesses will tend to automate operations, rather than hire locally. The countries that we try to get the business from may retaliate by refusing to sell needed devices (for example, computers) and needed raw materials (such as rare earth minerals). Or a collapse may occur in a country we try to get jobs back from, so fewer goods and services are produced worldwide.
Keep out immigrants. The theory is, “If there aren’t enough jobs to go around, why give them to immigrants?” In a world with sagging GDP, job growth will be slow or may not occur at all. There may be a particular point in keeping out well-educated immigrants, if there aren’t enough jobs for college-educated people who already live in a country. Of course, Europe has been doing the opposite–taking in more immigrants, in the hope that they will provide young workers for countries that are rapidly aging. (Another approach to finding more workers would be to raise the retirement age–but such an approach is not politically popular.)
Medicare for all. Medicare is the US healthcare plan for those over 65 or having a disability. It pays a substantial share of healthcare costs. The concern I have with “Medicare for all” is that because of the way the economy now functions, the total amount of goods and services that we can choose to purchase, for all kinds of goods and services in total, is almost a fixed sum. (Some people might say we are dealing with a zero-sum game.) If we make a choice to spend more on medical treatment, we are simultaneously making a choice that citizens will be less able to afford other things that might be worthwhile, such as apartments and transportation. The US healthcare system is already the most expensive in the world, as a percentage of GDP. We need to fix the overall system, not simply add more people to a system that is incredibly expensive.
Free college education for all. As the situation stands today, 45% of recent college graduates are in jobs that do not require a college degree. This suggests that we are already producing far more college graduates than there are jobs for college graduates. If we provide “free college education for all,” this offer needs to be made in the context of entrance exams for a limited number of spaces available (reduced from current enrollment). Otherwise, we sink a huge share of our resources into our education system, to no great benefit for either the students or the overall system. We are back to the zero-sum game problem. If we spend a large share of our resources on college educations that don’t really lead to jobs that pay well, more people of all ages will find themselves unable to afford apartments and cars because of the higher tax levels required to fund the program.
Renewables to replace fossil fuels. Despite the popularity of the idea, I don’t think that adding renewables provides any significant benefit, given the scenario we are facing. Renewables are made using fossil fuels, and they tend to have pollution problems of their own. They don’t extend the life of the electric grid, if we are facing collapse. At most, they might be helpful for a few people living off grid, if the electrical grid is no longer operating. If the economic system is on the edge of collapse already, fossil fuel use will drop quickly, with or without the use of renewables.
Conclusion
It would be really nice to “roll back” the world economy to a date back before population rose to its current high level, resources became as depleted as they are, and pollution became as big a problem as it is. Unfortunately, we can’t really do this.
We are now faced with the question of whether we can do anything to mitigate what may be a near-term crisis. At this point, it may be too late to make any changes at all, before the downward slide into collapse begins. The current low prices of fossil fuels make the current situation particularly worrisome, because the low prices could lead to lower fossil fuel production, and hence reduce world GDP because of the connection between energy consumption and GDP growth. Low oil prices could also push the world economy downward, due to increasing defaults on energy sector loans and adverse impacts on economies of oil exporters.
In my view, a major reason why fossil fuel prices are now low is because of the low wages of “ordinary workers.” If these wages were higher, workers around the globe could be buying more houses and cars, and indirectly raising demand for fossil fuels. Thus, low fossil fuel prices may be a sign that collapse is near.
One policy that might be helpful at this late date is increased focus on contraception. In fact, an argument could be made for more permissive abortion policies. Our problem is too little resources per capita–keeping the population count in the denominator as low as possible would be helpful.
On a temporary basis, it is also possible that new programs that lead to rising debt–whether or not these programs buy anything worthwhile–may be helpful in keeping the world economy from collapsing. This occurs because the economy is funded by a combination of wages and by growing debt. A shortfall in wages can be hidden by more debt, at least for a short time. Of course, this is not a long-term solution. It simply leads to a larger amount of debt that cannot be repaid when collapse does occur.
Wednesday, March 30, 2016
Sunday, March 20, 2016
SC134-10
http://www.truthdig.com/report/item/the_mexicanization_of_the_united_states_20160313
The Mexicanization of the United States
The neoliberal ideology that is the engine of corporate capitalism spews its poison around the globe. Constitutions are rewritten by judicial fiat in a mockery of democracy. Laws and regulations that impede corporate exploitation are abolished. Corporations orchestrate legally sanctioned tax boycotts. Free-trade deals destroy small farmers and businesses along with labor unions and government agencies designed to protect the public from contaminated air, water and food and from usurious creditors and lenders. The press is transformed into an echo chamber for the corporate elites. Wages stagnate or decline. Unemployment and underemployment soar. Social services are curtailed or abolished in the name of austerity. The political system becomes a charade. Dissent is criminalized. The ecocide by the fossil fuel industry accelerates. State enterprises and utilities are sold to corporations. The educational system mutates into vocational training. Culture and the arts are replaced by sexual commodification, banal entertainment and graphic depictions of violence. Infrastructures crumble.
The working poor—sacrificed on the altar of corporate profit and suffering job losses, bankruptcies, foreclosures, harassment and arrest—watch helplessly as their dreams for themselves and their children evaporate. Some are forced into an underground economy dominated by drugs, crime and human trafficking. Some turn to opiates to blunt the despair. (Heroin use in the United States has doubled since 2007.) Suicides mount. (There are more than 40,000 a year in the U.S.) Hunger spreads. (Some 48.1 million Americans, including 15.3 million children, live in food-insecure households.) The state, to prevent unrest, militarizes the police agencies and empowers them to use lethal force against unarmed civilians. It fills the prisons.
From Mexico to Greece to the United States, the scenario is the same, varying only in degree. Neoliberalism and globalization create a vast race to the bottom. Duplicitous political elites, epitomized by Barack Obama and Bill and Hillary Clinton, are or will be highly compensated for doling out trillions in “quantitative easing” to banks and other financial firms while delivering credulous voters to the corporate guillotine. Everyone and everything, including the natural world, is transformed into a commodity to exploit for profit.
The corporate pillage, as the Argentines have recently discovered, is limitless. The new Argentine president, the right-wing Mauricio Macri—put in office by corporate backers—has agreed to pay billions to a handful of hedge funds that bought up the country’s debt for a pittance and then demanded full repayment. Paul Singer’s Elliott Management alone will make $2.4 billion, as much as 15 times its initial investment.
The corporate looting is impervious to regulation or reform. It will continue until there is nothing left to exploit or is halted by popular revolt. It is creating frustrated and enraged populations that are being seduced in the United States, Europe and elsewhere by demagogues and protofascists. “Fascism, like socialism,” the economist Karl Polanyi wrote, “was rooted in a market society that refused to function.” Left unchecked, the present system will usher in a dystopia ruled by criminal power structures, including Wall Street, and inflict tremendous suffering and poverty on societies rent apart by global warming as well as internecine and nihilistic violence. Mexico is not an anomaly. Mexico is the future.
In the U.S. there is the added dead weight of the war industry. We have spent or obligated $4.4 trillion for the wars in Afghanistan, Pakistan and Iraq. In 15 years of war we have produced hundreds of thousands of dead, millions of refugees, wholesale devastation in countries such as Iraq and Afghanistan, tens of thousands of Islamic terrorists, a series of failed states that stretches from Iraq and Syria to Libya, and obscene profits for the arms manufacturers, who constitute the only real reason these wars are still being fought. The national treasury is being drained for military adventurism that makes us one of the most reviled nations on earth. At some point the entire house of cards, including the speculative financial markets, will collapse. And then, as John Milton wrote in “Paradise Lost,” “engorged without restraint,” we will eat death.
We are devolving into a nation that increasingly resembles countries such as Mexico and Greece where the destruction is more advanced. We are undergoing a slow-motion crash. The continued reliance on established mechanisms of political participation and reform—the chief mistake made by the supporters of Democratic presidential candidate Bernie Sanders—will not work. The entire system has to be demolished, as radicals in parties such as Syriza and Podemos understand. The effort is not only a war to bring down financial systems. It is a war to bring down political systems. It is a war that requires widespread and sustained popular revolt dedicated to overthrowing all the mechanisms of corporate power.
“To allow the market mechanism to be sole director of the fate of human beings and their natural environment, indeed, even of the amount and use of purchasing power, would result in the demolition of society,” Polanyi warned in “The Great Transformation.”
“In disposing of a man’s labor power the system would, incidentally, dispose of the physical, psychological, and moral entity ‘man’ attached to the tag,” he went on. “Robbed of the protective covering of cultural institutions, human beings would perish from the effects of social exposure; they would die as the victims of acute social dislocation through vice, perversion, crime, and starvation. Nature would be reduced to its elements, neighborhoods and landscapes defiled, rivers polluted, military safety jeopardized, the power to produce food and raw materials destroyed.”
I recently met with the Mexican activist Jessica Alcazar in New York for my teleSUR broadcast “Days of Revolt.” She is a leader of Jóvenes ante la Emergencia Nacional, a national organization that has mobilized against state repression in Mexico and called for a return to Mexico’s revolutionary ethic. Alcazar says that the passage of the North American Free Trade Agreement (NAFTA) in 1994 triggered a corporate coup d’état in Mexico that mirrors the corporate coup d’état in the United States.
“As a result of the signing of [NAFTA] in Mexico, all possibilities of sovereignty were taken from us, even food sovereignty,” Alcazar said. “Since NAFTA, the majority of the food we eat comes from the United States. There is also a big migration problem for the indigenous people, with small farmers leaving to the United States. Such is NAFTA’s vortex. There is a bloom of sweatshop factories, mainly car factories, an important industry. These corporations bring in employment but offer low wages. The majority of workers have no rights. They are paid by the hour—seven pesos an hour [about 39 U.S. cents]. This is nothing compared to what people used to make.
“The factories are suspected of having a connection with human trafficking, because of the disappearance of young girls working in those factories, many who eventually turn out to have been assassinated,” she said. “A clear example of this happens in Chihuahua. There are thousands of missing girls who worked in the factories. [There are] factories that know how to disappear a person so they don’t have to pay them. They either kill them or traffic them into sexual slavery.”
There have been some 27,000 registered disappearances in Mexico. More than 120,000 people have been killed since then-President Felipe Calderón sent the army to patrol city streets in 2006, ostensibly to curb drug-related violence.
“The problem in Mexico is not only one of violence, but about social rights being stripped away, rights which were won in the revolutionary process of 1917,” Alcazar said, referring to the Mexican Revolution. “Such rights allowed anyone to have access to education, health, employment and housing. The state and its neoliberal politics have been slowly transforming the constitution. This means that the Mexican people have lost all of their constitutional rights.”
As many as 3 million Mexican farmers and their families were driven into bankruptcy after American agro-businesses, because of NAFTA, began to flood the market with cheap corn. This contributed to the creation of an economic vacuum filled by financial speculators and drug cartels. The drug cartels in Mexico conduct a $30-billion-a-year business. They not only sell drugs, most destined for the United States, but trade in migrant workers, human organs, kidnapping for ransom and the trafficking of women in sexual slavery.
U.S. military action similar to Mexico’s 2006 deployment of the army into cities is possible under Section 1021 of the National Defense Authorization Act. Section 1021, which I successfully challenged in federal court before the ruling was overturned on appeal, was signed into law by President Obama on the final day of 2011. It effectively overturns the 1878 Posse Comitatus Act, which barred the government from using the military as a domestic police force. Section 1021 authorizes the federal government to order the military to carry out the extraordinary rendition of U.S. citizens, hold them indefinitely in military detention facilities and strip them of due process if the state brands them as terrorists. The elites, even if they do not publicly acknowledge it, know very well what is coming. They intend to be prepared.
The devolution of the social and political order leads to a fusion between criminals and the ruling elites. It creates, as Polanyi wrote, a Mafia capitalism and a Mafia political system. In Mexico, mayors and other municipal officials, law enforcement officers, judges and governors have become indistinguishable from the drug cartels. Similarly in the United States, financiers from big banks and firms such as Goldman Sachs—many of whom launder huge sums of money for illicit activity and openly carry out billions of dollars in fraud—are part of the inner circles of power.
Mexico’s state oil company, Pemex, formed in 1938 to make sure the profits from oil extraction remained in Mexico, is slowly being privatized. Mineral rights, often on indigenous land, along with water rights have been sold to foreign investors. Foreign corporations, as in the United States, are using eminent domain to push people off their land. Resistance to the land expropriation has been met by lethal state violence.
Mexican activists argue they must build an alliance with radical movements in the United States and the rest of the world to reverse the corporate coup. This will require global solidarity. Without it, no movement to take back power from rapacious capitalism can succeed.
“There are many organizations like ours which are trying to build [political momentum] from outside the institutional left, from outside the political parties,” Alcazar said. “The Zapatista Liberation Army is one of those organizations. We believe that today’s community resistance and willingness to take a stand, especially from the indigenous communities, are very important, like the work of ‘snail’ cells, of autonomous Zapatista zones. It’s important to build from the ground up, to form independent self-governments. It’s a long process. We have to struggle to ‘refound the nation.’ We have to rewrite the constitution. We need a new way of governance.”
The Mexicanization of the United States
The neoliberal ideology that is the engine of corporate capitalism spews its poison around the globe. Constitutions are rewritten by judicial fiat in a mockery of democracy. Laws and regulations that impede corporate exploitation are abolished. Corporations orchestrate legally sanctioned tax boycotts. Free-trade deals destroy small farmers and businesses along with labor unions and government agencies designed to protect the public from contaminated air, water and food and from usurious creditors and lenders. The press is transformed into an echo chamber for the corporate elites. Wages stagnate or decline. Unemployment and underemployment soar. Social services are curtailed or abolished in the name of austerity. The political system becomes a charade. Dissent is criminalized. The ecocide by the fossil fuel industry accelerates. State enterprises and utilities are sold to corporations. The educational system mutates into vocational training. Culture and the arts are replaced by sexual commodification, banal entertainment and graphic depictions of violence. Infrastructures crumble.
The working poor—sacrificed on the altar of corporate profit and suffering job losses, bankruptcies, foreclosures, harassment and arrest—watch helplessly as their dreams for themselves and their children evaporate. Some are forced into an underground economy dominated by drugs, crime and human trafficking. Some turn to opiates to blunt the despair. (Heroin use in the United States has doubled since 2007.) Suicides mount. (There are more than 40,000 a year in the U.S.) Hunger spreads. (Some 48.1 million Americans, including 15.3 million children, live in food-insecure households.) The state, to prevent unrest, militarizes the police agencies and empowers them to use lethal force against unarmed civilians. It fills the prisons.
From Mexico to Greece to the United States, the scenario is the same, varying only in degree. Neoliberalism and globalization create a vast race to the bottom. Duplicitous political elites, epitomized by Barack Obama and Bill and Hillary Clinton, are or will be highly compensated for doling out trillions in “quantitative easing” to banks and other financial firms while delivering credulous voters to the corporate guillotine. Everyone and everything, including the natural world, is transformed into a commodity to exploit for profit.
The corporate pillage, as the Argentines have recently discovered, is limitless. The new Argentine president, the right-wing Mauricio Macri—put in office by corporate backers—has agreed to pay billions to a handful of hedge funds that bought up the country’s debt for a pittance and then demanded full repayment. Paul Singer’s Elliott Management alone will make $2.4 billion, as much as 15 times its initial investment.
The corporate looting is impervious to regulation or reform. It will continue until there is nothing left to exploit or is halted by popular revolt. It is creating frustrated and enraged populations that are being seduced in the United States, Europe and elsewhere by demagogues and protofascists. “Fascism, like socialism,” the economist Karl Polanyi wrote, “was rooted in a market society that refused to function.” Left unchecked, the present system will usher in a dystopia ruled by criminal power structures, including Wall Street, and inflict tremendous suffering and poverty on societies rent apart by global warming as well as internecine and nihilistic violence. Mexico is not an anomaly. Mexico is the future.
In the U.S. there is the added dead weight of the war industry. We have spent or obligated $4.4 trillion for the wars in Afghanistan, Pakistan and Iraq. In 15 years of war we have produced hundreds of thousands of dead, millions of refugees, wholesale devastation in countries such as Iraq and Afghanistan, tens of thousands of Islamic terrorists, a series of failed states that stretches from Iraq and Syria to Libya, and obscene profits for the arms manufacturers, who constitute the only real reason these wars are still being fought. The national treasury is being drained for military adventurism that makes us one of the most reviled nations on earth. At some point the entire house of cards, including the speculative financial markets, will collapse. And then, as John Milton wrote in “Paradise Lost,” “engorged without restraint,” we will eat death.
We are devolving into a nation that increasingly resembles countries such as Mexico and Greece where the destruction is more advanced. We are undergoing a slow-motion crash. The continued reliance on established mechanisms of political participation and reform—the chief mistake made by the supporters of Democratic presidential candidate Bernie Sanders—will not work. The entire system has to be demolished, as radicals in parties such as Syriza and Podemos understand. The effort is not only a war to bring down financial systems. It is a war to bring down political systems. It is a war that requires widespread and sustained popular revolt dedicated to overthrowing all the mechanisms of corporate power.
“To allow the market mechanism to be sole director of the fate of human beings and their natural environment, indeed, even of the amount and use of purchasing power, would result in the demolition of society,” Polanyi warned in “The Great Transformation.”
“In disposing of a man’s labor power the system would, incidentally, dispose of the physical, psychological, and moral entity ‘man’ attached to the tag,” he went on. “Robbed of the protective covering of cultural institutions, human beings would perish from the effects of social exposure; they would die as the victims of acute social dislocation through vice, perversion, crime, and starvation. Nature would be reduced to its elements, neighborhoods and landscapes defiled, rivers polluted, military safety jeopardized, the power to produce food and raw materials destroyed.”
I recently met with the Mexican activist Jessica Alcazar in New York for my teleSUR broadcast “Days of Revolt.” She is a leader of Jóvenes ante la Emergencia Nacional, a national organization that has mobilized against state repression in Mexico and called for a return to Mexico’s revolutionary ethic. Alcazar says that the passage of the North American Free Trade Agreement (NAFTA) in 1994 triggered a corporate coup d’état in Mexico that mirrors the corporate coup d’état in the United States.
“As a result of the signing of [NAFTA] in Mexico, all possibilities of sovereignty were taken from us, even food sovereignty,” Alcazar said. “Since NAFTA, the majority of the food we eat comes from the United States. There is also a big migration problem for the indigenous people, with small farmers leaving to the United States. Such is NAFTA’s vortex. There is a bloom of sweatshop factories, mainly car factories, an important industry. These corporations bring in employment but offer low wages. The majority of workers have no rights. They are paid by the hour—seven pesos an hour [about 39 U.S. cents]. This is nothing compared to what people used to make.
“The factories are suspected of having a connection with human trafficking, because of the disappearance of young girls working in those factories, many who eventually turn out to have been assassinated,” she said. “A clear example of this happens in Chihuahua. There are thousands of missing girls who worked in the factories. [There are] factories that know how to disappear a person so they don’t have to pay them. They either kill them or traffic them into sexual slavery.”
There have been some 27,000 registered disappearances in Mexico. More than 120,000 people have been killed since then-President Felipe Calderón sent the army to patrol city streets in 2006, ostensibly to curb drug-related violence.
“The problem in Mexico is not only one of violence, but about social rights being stripped away, rights which were won in the revolutionary process of 1917,” Alcazar said, referring to the Mexican Revolution. “Such rights allowed anyone to have access to education, health, employment and housing. The state and its neoliberal politics have been slowly transforming the constitution. This means that the Mexican people have lost all of their constitutional rights.”
As many as 3 million Mexican farmers and their families were driven into bankruptcy after American agro-businesses, because of NAFTA, began to flood the market with cheap corn. This contributed to the creation of an economic vacuum filled by financial speculators and drug cartels. The drug cartels in Mexico conduct a $30-billion-a-year business. They not only sell drugs, most destined for the United States, but trade in migrant workers, human organs, kidnapping for ransom and the trafficking of women in sexual slavery.
U.S. military action similar to Mexico’s 2006 deployment of the army into cities is possible under Section 1021 of the National Defense Authorization Act. Section 1021, which I successfully challenged in federal court before the ruling was overturned on appeal, was signed into law by President Obama on the final day of 2011. It effectively overturns the 1878 Posse Comitatus Act, which barred the government from using the military as a domestic police force. Section 1021 authorizes the federal government to order the military to carry out the extraordinary rendition of U.S. citizens, hold them indefinitely in military detention facilities and strip them of due process if the state brands them as terrorists. The elites, even if they do not publicly acknowledge it, know very well what is coming. They intend to be prepared.
The devolution of the social and political order leads to a fusion between criminals and the ruling elites. It creates, as Polanyi wrote, a Mafia capitalism and a Mafia political system. In Mexico, mayors and other municipal officials, law enforcement officers, judges and governors have become indistinguishable from the drug cartels. Similarly in the United States, financiers from big banks and firms such as Goldman Sachs—many of whom launder huge sums of money for illicit activity and openly carry out billions of dollars in fraud—are part of the inner circles of power.
Mexico’s state oil company, Pemex, formed in 1938 to make sure the profits from oil extraction remained in Mexico, is slowly being privatized. Mineral rights, often on indigenous land, along with water rights have been sold to foreign investors. Foreign corporations, as in the United States, are using eminent domain to push people off their land. Resistance to the land expropriation has been met by lethal state violence.
Mexican activists argue they must build an alliance with radical movements in the United States and the rest of the world to reverse the corporate coup. This will require global solidarity. Without it, no movement to take back power from rapacious capitalism can succeed.
“There are many organizations like ours which are trying to build [political momentum] from outside the institutional left, from outside the political parties,” Alcazar said. “The Zapatista Liberation Army is one of those organizations. We believe that today’s community resistance and willingness to take a stand, especially from the indigenous communities, are very important, like the work of ‘snail’ cells, of autonomous Zapatista zones. It’s important to build from the ground up, to form independent self-governments. It’s a long process. We have to struggle to ‘refound the nation.’ We have to rewrite the constitution. We need a new way of governance.”
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http://www.truthdig.com/report/item/the_revenge_of_the_lower_classes_and_the_rise_of_american_fascism_20160302
The Revenge of the Lower Classes and the Rise of American Fascism
College-educated elites, on behalf of corporations, carried out the savage neoliberal assault on the working poor. Now they are being made to pay. Their duplicity—embodied in politicians such as Bill and Hillary Clinton and Barack Obama—succeeded for decades. These elites, many from East Coast Ivy League schools, spoke the language of values—civility, inclusivity, a condemnation of overt racism and bigotry, a concern for the middle class—while thrusting a knife into the back of the underclass for their corporate masters. This game has ended.
There are tens of millions of Americans, especially lower-class whites, rightfully enraged at what has been done to them, their families and their communities. They have risen up to reject the neoliberal policies and political correctness imposed on them by college-educated elites from both political parties: Lower-class whites are embracing an American fascism.
These Americans want a kind of freedom—a freedom to hate. They want the freedom to use words like “nigger,” “kike,” “spic,” “chink,” “raghead” and “fag.” They want the freedom to idealize violence and the gun culture. They want the freedom to have enemies, to physically assault Muslims, undocumented workers, African-Americans, homosexuals and anyone who dares criticize their cryptofascism. They want the freedom to celebrate historical movements and figures that the college-educated elites condemn, including the Ku Klux Klan and the Confederacy. They want the freedom to ridicule and dismiss intellectuals, ideas, science and culture. They want the freedom to silence those who have been telling them how to behave. And they want the freedom to revel in hypermasculinity, racism, sexism and white patriarchy. These are the core sentiments of fascism. These sentiments are engendered by the collapse of the liberal state.
The Democrats are playing a very dangerous game by anointing Hillary Clinton as their presidential candidate. She epitomizes the double-dealing of the college-educated elites, those who speak the feel-your-pain language of ordinary men and women, who hold up the bible of political correctness, while selling out the poor and the working class to corporate power.
The Republicans, energized by America’s reality-star version of Il Duce, Donald Trump, have been pulling in voters, especially new voters, while the Democrats are well below the voter turnouts for 2008. In the voting Tuesday, 5.6 million votes were cast for the Democrats while 8.3 million went to the Republicans. Those numbers were virtually reversed in 2008—8.2 million for the Democrats and about 5 million for the Republicans.
Richard Rorty in his last book, “Achieving Our Country,” written in 1998, presciently saw where our postindustrial nation was headed.
Many writers on socioeconomic policy have warned that the old industrialized democracies are heading into a Weimar-like period, one in which populist movements are likely to overturn constitutional governments. Edward Luttwak, for example, has suggested that fascism may be the American future. The point of his book The Endangered American Dream is that members of labor unions, and unorganized unskilled workers, will sooner or later realize that their government is not even trying to prevent wages from sinking or to prevent jobs from being exported. Around the same time, they will realize that suburban white-collar workers—themselves desperately afraid of being downsized—are not going to let themselves be taxed to provide social benefits for anyone else.
At that point, something will crack. The nonsuburban electorate will decide that the system has failed and start looking around for a strongman to vote for—someone willing to assure them that, once he is elected, the smug bureaucrats, tricky lawyers, overpaid bond salesmen, and postmodernist professors will no longer be calling the shots. A scenario like that of Sinclair Lewis’ novel It Can’t Happen Here may then be played out. For once a strongman takes office, nobody can predict what will happen. In 1932, most of the predictions made about what would happen if Hindenburg named Hitler chancellor were wildly overoptimistic.
One thing that is very likely to happen is that the gains made in the past forty years by black and brown Americans, and by homosexuals, will be wiped out. Jocular contempt for women will come back into fashion. The words “nigger” and “kike” will once again be heard in the workplace. All the sadism which the academic Left has tried to make unacceptable to its students will come flooding back. All the resentment which badly educated Americans feel about having their manners dictated to them by college graduates will find an outlet.
Fascist movements build their base not from the politically active but the politically inactive, the “losers” who feel, often correctly, they have no voice or role to play in the political establishment. The sociologist Émile Durkheim warned that the disenfranchisement of a class of people from the structures of society produced a state of “anomie”—a “condition in which society provides little moral guidance to individuals.” Those trapped in this “anomie,” he wrote, are easy prey to propaganda and emotionally driven mass movements. Hannah Arendt, echoing Durkheim, noted that “the chief characteristic of the mass man is not brutality and backwardness, but his isolation and lack of normal social relationships.”
In fascism the politically disempowered and disengaged, ignored and reviled by the establishment, discover a voice and a sense of empowerment.
As Arendt noted, the fascist and communist movements in Europe in the 1930s “… recruited their members from this mass of apparently indifferent people whom all other parties had given up as too apathetic or too stupid for their attention. The result was that the majority of their membership consisted of people who had never before appeared on the political scene. This permitted the introduction of entirely new methods into political propaganda, and indifference to the arguments of political opponents; these movements not only placed themselves outside and against the party system as a whole, they found a membership that had never been reached, never been ‘spoiled’ by the party system. Therefore they did not need to refute opposing arguments and consistently preferred methods which ended in death rather than persuasion, which spelled terror rather than conviction. They presented disagreements as invariably originating in deep natural, social, or psychological sources beyond the control of the individual and therefore beyond the control of reason. This would have been a shortcoming only if they had sincerely entered into competition with either parties; it was not if they were sure of dealing with people who had reason to be equally hostile to all parties.”
Fascism is aided and advanced by the apathy of those who are tired of being conned and lied to by a bankrupt liberal establishment, whose only reason to vote for a politician or support a political party is to elect the least worst. This, for many voters, is the best Clinton can offer.
Fascism expresses itself in familiar and comforting national and religious symbols, which is why it comes in various varieties and forms. Italian fascism, which looked back to the glory of the Roman Empire, for example, never shared the Nazis’ love of Teutonic and Nordic myths. American fascism too will reach back to traditional patriotic symbols, narratives and beliefs.
Robert Paxton wrote in “The Anatomy of Fascism”:
The language and symbols of an authentic American fascism would, of course, have little to do with the original European models. They would have to be as familiar and reassuring to loyal Americans as the language and symbols of the original fascisms were familiar and reassuring to many Italians and Germans, as [George] Orwell suggested. Hitler and Mussolini, after all, had not tried to seem exotic to their fellow citizens. No swastikas in an American fascism, but Stars and Stripes (or Stars and Bars) and Christian crosses. No fascist salute, but mass recitations of the pledge of allegiance. These symbols contain no whiff of fascism in themselves, of course, but an American fascism would transform them into obligatory litmus tests for detecting the internal enemy.
Fascism is about an inspired and seemingly strong leader who promises moral renewal, new glory and revenge. It is about the replacement of rational debate with sensual experience. This is why the lies, half-truths and fabrications by Trump have no impact on his followers. Fascists transform politics, as philosopher and cultural critic Walter Benjamin pointed out, into aesthetics. And the ultimate aesthetic for the fascist, Benjamin said, is war.
Paxton singles out the amorphous ideology characteristic of all fascist movements.
Fascism rested not upon the truth of its doctrine but upon the leader’s mystical union with the historic destiny of his people, a notion related to romanticist ideas of national historic flowering and of individual artistic or spiritual genius, though fascism otherwise denied romanticism’s exaltation of unfettered personal creativity. The fascist leader wanted to bring his people into a higher realm of politics that they would experience sensually: the warmth of belonging to a race now fully aware of its identity, historic destiny, and power; the excitement of participating in a wave of shared feelings, and of sacrificing one’s petty concerns for the group’s good; and the thrill of domination.
There is only one way left to blunt the yearning for fascism coalescing around Trump. It is to build, as fast as possible, movements or parties that declare war on corporate power, engage in sustained acts of civil disobedience and seek to reintegrate the disenfranchised—the “losers”—back into the economy and political life of the country. This movement will never come out of the Democratic Party. If Clinton prevails in the general election Trump may disappear, but the fascist sentiments will expand. Another Trump, perhaps more vile, will be vomited up from the bowels of the decayed political system. We are fighting for our political life. Tremendous damage has been done by corporate power and the college-educated elites to our capitalist democracy. The longer the elites, who oversaw this disemboweling of the country on behalf of corporations—who believe, as does CBS Chief Executive Officer Leslie Moonves, that however bad Trump would be for America he would at least be good for corporate profit—remain in charge, the worse it is going to get.
The Revenge of the Lower Classes and the Rise of American Fascism
College-educated elites, on behalf of corporations, carried out the savage neoliberal assault on the working poor. Now they are being made to pay. Their duplicity—embodied in politicians such as Bill and Hillary Clinton and Barack Obama—succeeded for decades. These elites, many from East Coast Ivy League schools, spoke the language of values—civility, inclusivity, a condemnation of overt racism and bigotry, a concern for the middle class—while thrusting a knife into the back of the underclass for their corporate masters. This game has ended.
There are tens of millions of Americans, especially lower-class whites, rightfully enraged at what has been done to them, their families and their communities. They have risen up to reject the neoliberal policies and political correctness imposed on them by college-educated elites from both political parties: Lower-class whites are embracing an American fascism.
These Americans want a kind of freedom—a freedom to hate. They want the freedom to use words like “nigger,” “kike,” “spic,” “chink,” “raghead” and “fag.” They want the freedom to idealize violence and the gun culture. They want the freedom to have enemies, to physically assault Muslims, undocumented workers, African-Americans, homosexuals and anyone who dares criticize their cryptofascism. They want the freedom to celebrate historical movements and figures that the college-educated elites condemn, including the Ku Klux Klan and the Confederacy. They want the freedom to ridicule and dismiss intellectuals, ideas, science and culture. They want the freedom to silence those who have been telling them how to behave. And they want the freedom to revel in hypermasculinity, racism, sexism and white patriarchy. These are the core sentiments of fascism. These sentiments are engendered by the collapse of the liberal state.
The Democrats are playing a very dangerous game by anointing Hillary Clinton as their presidential candidate. She epitomizes the double-dealing of the college-educated elites, those who speak the feel-your-pain language of ordinary men and women, who hold up the bible of political correctness, while selling out the poor and the working class to corporate power.
The Republicans, energized by America’s reality-star version of Il Duce, Donald Trump, have been pulling in voters, especially new voters, while the Democrats are well below the voter turnouts for 2008. In the voting Tuesday, 5.6 million votes were cast for the Democrats while 8.3 million went to the Republicans. Those numbers were virtually reversed in 2008—8.2 million for the Democrats and about 5 million for the Republicans.
Richard Rorty in his last book, “Achieving Our Country,” written in 1998, presciently saw where our postindustrial nation was headed.
Many writers on socioeconomic policy have warned that the old industrialized democracies are heading into a Weimar-like period, one in which populist movements are likely to overturn constitutional governments. Edward Luttwak, for example, has suggested that fascism may be the American future. The point of his book The Endangered American Dream is that members of labor unions, and unorganized unskilled workers, will sooner or later realize that their government is not even trying to prevent wages from sinking or to prevent jobs from being exported. Around the same time, they will realize that suburban white-collar workers—themselves desperately afraid of being downsized—are not going to let themselves be taxed to provide social benefits for anyone else.
At that point, something will crack. The nonsuburban electorate will decide that the system has failed and start looking around for a strongman to vote for—someone willing to assure them that, once he is elected, the smug bureaucrats, tricky lawyers, overpaid bond salesmen, and postmodernist professors will no longer be calling the shots. A scenario like that of Sinclair Lewis’ novel It Can’t Happen Here may then be played out. For once a strongman takes office, nobody can predict what will happen. In 1932, most of the predictions made about what would happen if Hindenburg named Hitler chancellor were wildly overoptimistic.
One thing that is very likely to happen is that the gains made in the past forty years by black and brown Americans, and by homosexuals, will be wiped out. Jocular contempt for women will come back into fashion. The words “nigger” and “kike” will once again be heard in the workplace. All the sadism which the academic Left has tried to make unacceptable to its students will come flooding back. All the resentment which badly educated Americans feel about having their manners dictated to them by college graduates will find an outlet.
Fascist movements build their base not from the politically active but the politically inactive, the “losers” who feel, often correctly, they have no voice or role to play in the political establishment. The sociologist Émile Durkheim warned that the disenfranchisement of a class of people from the structures of society produced a state of “anomie”—a “condition in which society provides little moral guidance to individuals.” Those trapped in this “anomie,” he wrote, are easy prey to propaganda and emotionally driven mass movements. Hannah Arendt, echoing Durkheim, noted that “the chief characteristic of the mass man is not brutality and backwardness, but his isolation and lack of normal social relationships.”
In fascism the politically disempowered and disengaged, ignored and reviled by the establishment, discover a voice and a sense of empowerment.
As Arendt noted, the fascist and communist movements in Europe in the 1930s “… recruited their members from this mass of apparently indifferent people whom all other parties had given up as too apathetic or too stupid for their attention. The result was that the majority of their membership consisted of people who had never before appeared on the political scene. This permitted the introduction of entirely new methods into political propaganda, and indifference to the arguments of political opponents; these movements not only placed themselves outside and against the party system as a whole, they found a membership that had never been reached, never been ‘spoiled’ by the party system. Therefore they did not need to refute opposing arguments and consistently preferred methods which ended in death rather than persuasion, which spelled terror rather than conviction. They presented disagreements as invariably originating in deep natural, social, or psychological sources beyond the control of the individual and therefore beyond the control of reason. This would have been a shortcoming only if they had sincerely entered into competition with either parties; it was not if they were sure of dealing with people who had reason to be equally hostile to all parties.”
Fascism is aided and advanced by the apathy of those who are tired of being conned and lied to by a bankrupt liberal establishment, whose only reason to vote for a politician or support a political party is to elect the least worst. This, for many voters, is the best Clinton can offer.
Fascism expresses itself in familiar and comforting national and religious symbols, which is why it comes in various varieties and forms. Italian fascism, which looked back to the glory of the Roman Empire, for example, never shared the Nazis’ love of Teutonic and Nordic myths. American fascism too will reach back to traditional patriotic symbols, narratives and beliefs.
Robert Paxton wrote in “The Anatomy of Fascism”:
The language and symbols of an authentic American fascism would, of course, have little to do with the original European models. They would have to be as familiar and reassuring to loyal Americans as the language and symbols of the original fascisms were familiar and reassuring to many Italians and Germans, as [George] Orwell suggested. Hitler and Mussolini, after all, had not tried to seem exotic to their fellow citizens. No swastikas in an American fascism, but Stars and Stripes (or Stars and Bars) and Christian crosses. No fascist salute, but mass recitations of the pledge of allegiance. These symbols contain no whiff of fascism in themselves, of course, but an American fascism would transform them into obligatory litmus tests for detecting the internal enemy.
Fascism is about an inspired and seemingly strong leader who promises moral renewal, new glory and revenge. It is about the replacement of rational debate with sensual experience. This is why the lies, half-truths and fabrications by Trump have no impact on his followers. Fascists transform politics, as philosopher and cultural critic Walter Benjamin pointed out, into aesthetics. And the ultimate aesthetic for the fascist, Benjamin said, is war.
Paxton singles out the amorphous ideology characteristic of all fascist movements.
Fascism rested not upon the truth of its doctrine but upon the leader’s mystical union with the historic destiny of his people, a notion related to romanticist ideas of national historic flowering and of individual artistic or spiritual genius, though fascism otherwise denied romanticism’s exaltation of unfettered personal creativity. The fascist leader wanted to bring his people into a higher realm of politics that they would experience sensually: the warmth of belonging to a race now fully aware of its identity, historic destiny, and power; the excitement of participating in a wave of shared feelings, and of sacrificing one’s petty concerns for the group’s good; and the thrill of domination.
There is only one way left to blunt the yearning for fascism coalescing around Trump. It is to build, as fast as possible, movements or parties that declare war on corporate power, engage in sustained acts of civil disobedience and seek to reintegrate the disenfranchised—the “losers”—back into the economy and political life of the country. This movement will never come out of the Democratic Party. If Clinton prevails in the general election Trump may disappear, but the fascist sentiments will expand. Another Trump, perhaps more vile, will be vomited up from the bowels of the decayed political system. We are fighting for our political life. Tremendous damage has been done by corporate power and the college-educated elites to our capitalist democracy. The longer the elites, who oversaw this disemboweling of the country on behalf of corporations—who believe, as does CBS Chief Executive Officer Leslie Moonves, that however bad Trump would be for America he would at least be good for corporate profit—remain in charge, the worse it is going to get.
SC134-8
http://www.informationclearinghouse.info/article44475.htm
The Wrong Kind Of Victory
One often hears of the fact that the US spends more on its military than most other nations combined. This is usually presented as evidence that the US is more powerful militarily—perhaps so powerful that it could take on the rest of the planet, and prevail. I find this attitude highly questionable. If we look at what sort of “defense” the US actually spends money on, and what it gets in return in terms of military capabilities, an entirely different picture emerges: of a corruption-riddled blundering leviathan that is thwarting its own purpose at every turn.
To start with, assessing relative military strength based on relative levels of military spending is a lot like betting on a race horse based on how much the horse eats. Sure, horses have to eat, but a horse that eats ten times more than all the other horses is probably not going to come out ahead because there is something seriously wrong with it.
Then consider the fact that a dollar spent on the US military in the US is not directly comparable to a dollar's worth of rubles or yuan spent on in Russia or China; in terms of purchasing parity, the ratios can be 5 to 1, or even 10 to 1. If Russia gets 10 times the bang for the buck, there goes the assumption of supposed US military superiority based on how much the US military eats.
Also, let's not lose track of the fact that the US military has different objectives from the rest of the world's militaries: its goal is primarily offensive rather than defensive. The US military strives to dominate and subjugate the entire planet; everyone else simply tries to defend their territory, while a few countries also try to thwart the US military in its ambition to dominate and subjugate the entire planet.
In general, if the objective is unrealistic, it doesn't matter how much money is wasted in trying to achieve it. More specifically, it's a lot cheaper to break something than to make something work, and the US military, no matter how much money is spent on it, remains quite cheap to neutralize. For instance, a Nimitz-class aircraft carrier costs somewhere around $5 billion, while a Russian Kaliber missile that can be launched from a fishing boat from 1200 km away and destroy it is competitively priced at $1.2 million apiece. To put these numbers in perspective, Russia can wipe out the entire US aircraft carrier fleet without exceeding its military training budget for the year.
But all of this matters only if the US actually spends money in trying to achieve some actual military objective. If the US military establishment mostly wastes its money on vanity projects and expensive technological albatrosses, then none of this matters at all, and this may very well be the case. Just look at what the US actually spends its defense dollars on:
• It spends it on military bases around the world—hundreds of them. What purpose do they serve? What does their presence achieve? Nobody knows. It's all part of US military “activity”: assessing and responding to “threats,” most of which are purely theoretical. It seems to have an irrational compulsion to not leave any spots on the planet without a US military base. This is mostly just a waste of resources.
• It spends it on a bunch of aircraft carrier groups. These are very useful for launching attacks on defenseless countries. But it is very important to keep these aircraft carriers outside of conflict zones that may involve China or Russia, or even Iran, because each of these countries has several cost-effective ways to destroy an aircraft carrier: ballistic missiles, supersonic cruise missiles and supersonic torpedoes. The entire aircraft carrier fleet is obsolete, and is another huge waste of money.
• It spends it on the Aegis integrated naval combat system, which is considered state-of-the-art and has been installed on a number of cruisers and destroyers. There is just one problem: it is trivial to shut down, as Russia has demonstrated. A jet fighter equipped with a basket of electronic countermeasures equipment called Khibiny was used to shut down Aegis. The jet (which was otherwise unarmed) then performed a dozen bombing runs on the defenseless US navy vessel.
• It spends it on disastrous development programs of various kinds. A classic example is Ronald Reagan's Strategic Defense Initiative, a.k.a. “Star Wars”: it never resulted in anything strategically useful. Another good example is the F-35 Joint Strike Fighter, which cost over a trillion dollars to develop. It is supposed to be useful for a lot of different missions, but has turned out to be ineffective for all of them.
This list can be continued virtually ad infinitum, but just these examples make clear a basic principle: spending money on things that don't work does not make the US any stronger militarily.
Next, look at the manner in which the US spends money on defense. It spends it by paying military contractors, which are public companies—highly profitable ones. These defense contractors are not primarily interested in delivering value in terms of defense spending; they are interested in generating profits for their shareholders. This is the stated prime directive of all public companies. Therefore, it is safe to write off a good third of all defense spending which goes toward profits: this money may feather a lot of nests, but none of that is military-related.
Also, keep in mind that much of the money is actually just pretty much stolen. The Pentagon has not been audited in decades, and sums unaccounted for run into the billions of dollars. A great deal of defense-related spending is recycled using a variety of schemes into campaign contributions for members of US Congress, whose members then unfailingly vote for increased defense spending. There is also the scheme where defense contractors pay exorbitant consulting fees to retired officers in what is really a form of deferred compensation: the officers work for the defense contractors throughout their careers, but are only paid after they retire. Nobody knows what fraction of defense spending gets siphoned off using these or any number of other corrupt schemes, but it seems likely that the US military establishment is the single largest den of corruption that this planet has ever seen.
The little bit of money that might eventually get spent on developing useful defense systems runs into a truly insurmountable problem: lack of brains. You see, for generations now the US has been falling behind in science and math, along with almost everything else. There are some excellent universities and institutes in the US that graduate top-notch technical specialists, but they mostly graduate foreigners. At the graduate level in science and engineering, US nationals are a small minority.
Now, this doesn't matter in many technical fields, where it is common practice in the US to hire foreign-born specialists. But defense is special: it requires native talent, or the allegiance, and the morale for doing superior work, simply isn't there. And so the defense contractors end up being staffed by native-born knuckle-draggers who couldn't get a job that wasn't defense-related. In turn, the Department of Defense is staffed by similarly dim bulbs: highly caffeinated fitness freaks who run around looking busy, waiting for their next promotion, never criticizing their superiors, never questioning their orders no matter how idiotic they are, and never thinking too hard. What can a system like that achieve? Disasters, that's what.
And so that's what we see: a long sequence of unmitigated military disasters. The US has been involved in a long series of military campaigns against very weak adversaries, in which it proved itself capable of destruction, with staggering levels of collateral damage, and some very impressive unintended consequences such as the emergence of ISIS/Daesh/Islamic Caliphate, but not much else.
Critically, it has turned out to be utterly incapable of winning the peace. The ultimate objective of all military missions is cessation of hostilities on favorable terms. If this objective cannot be achieved, then the military mission is worse than useless. Has the US military been able to achieve cessation of hostilities on favorable terms in any of the countries in which it intervened militarily—Afghanistan, Iraq, Libya, Yemen, Syria, the Ukraine? No, it certainly hasn't.
The US defense establishment can be considered victorious in one sense only: it has conquered and subdued the people of the United States, and is extracting a plentiful tribute from them. It is a pure parasite, serving no useful purpose. It should be disbanded. As far as standing up to the neighbors, the Texas National Guard should be a good match to Mexico's Federales in case Mexico decides to stage a military-style reconquista, which is unlikely, since the de facto demographic reconquista is going so well. On the other hand, the northern border requires no protection it all, since it is inconceivable that Canada would ever pose any sort of military threat.
Of course, there is an alternative to voluntarily disbanding the US military: a resounding, humiliating military defeat at the hands of clever, cost-conscious adversaries. However, this plan is fraught with the danger of triggering a nuclear exchange, and highly placed Americans who are concerned that a nuclear explosion might interfere with their personal longevity plans should give the voluntary approach a good think.
P.S. Some people might find my criticism and suggestions “unpatriotic” because we should all “support our troops.” Rest assured, this has nothing to do with the troops: they do not get to make procurement decisions, and they do not get to choose their missions. As far as as patriotism is concerned, it is the sworn patriotic duty of the troops to serve and protect the people, not the other way around. But if you wish to be a patriot, then you too can serve and protect the people, the troops in particular (because, don't you forget, they are people too) by bringing them home and giving them civilian jobs doing something useful, or at least something that isn't harmful to the world at large or to the country's finances, environment, health, reputation or security.
The Wrong Kind Of Victory
One often hears of the fact that the US spends more on its military than most other nations combined. This is usually presented as evidence that the US is more powerful militarily—perhaps so powerful that it could take on the rest of the planet, and prevail. I find this attitude highly questionable. If we look at what sort of “defense” the US actually spends money on, and what it gets in return in terms of military capabilities, an entirely different picture emerges: of a corruption-riddled blundering leviathan that is thwarting its own purpose at every turn.
To start with, assessing relative military strength based on relative levels of military spending is a lot like betting on a race horse based on how much the horse eats. Sure, horses have to eat, but a horse that eats ten times more than all the other horses is probably not going to come out ahead because there is something seriously wrong with it.
Then consider the fact that a dollar spent on the US military in the US is not directly comparable to a dollar's worth of rubles or yuan spent on in Russia or China; in terms of purchasing parity, the ratios can be 5 to 1, or even 10 to 1. If Russia gets 10 times the bang for the buck, there goes the assumption of supposed US military superiority based on how much the US military eats.
Also, let's not lose track of the fact that the US military has different objectives from the rest of the world's militaries: its goal is primarily offensive rather than defensive. The US military strives to dominate and subjugate the entire planet; everyone else simply tries to defend their territory, while a few countries also try to thwart the US military in its ambition to dominate and subjugate the entire planet.
In general, if the objective is unrealistic, it doesn't matter how much money is wasted in trying to achieve it. More specifically, it's a lot cheaper to break something than to make something work, and the US military, no matter how much money is spent on it, remains quite cheap to neutralize. For instance, a Nimitz-class aircraft carrier costs somewhere around $5 billion, while a Russian Kaliber missile that can be launched from a fishing boat from 1200 km away and destroy it is competitively priced at $1.2 million apiece. To put these numbers in perspective, Russia can wipe out the entire US aircraft carrier fleet without exceeding its military training budget for the year.
But all of this matters only if the US actually spends money in trying to achieve some actual military objective. If the US military establishment mostly wastes its money on vanity projects and expensive technological albatrosses, then none of this matters at all, and this may very well be the case. Just look at what the US actually spends its defense dollars on:
• It spends it on military bases around the world—hundreds of them. What purpose do they serve? What does their presence achieve? Nobody knows. It's all part of US military “activity”: assessing and responding to “threats,” most of which are purely theoretical. It seems to have an irrational compulsion to not leave any spots on the planet without a US military base. This is mostly just a waste of resources.
• It spends it on a bunch of aircraft carrier groups. These are very useful for launching attacks on defenseless countries. But it is very important to keep these aircraft carriers outside of conflict zones that may involve China or Russia, or even Iran, because each of these countries has several cost-effective ways to destroy an aircraft carrier: ballistic missiles, supersonic cruise missiles and supersonic torpedoes. The entire aircraft carrier fleet is obsolete, and is another huge waste of money.
• It spends it on the Aegis integrated naval combat system, which is considered state-of-the-art and has been installed on a number of cruisers and destroyers. There is just one problem: it is trivial to shut down, as Russia has demonstrated. A jet fighter equipped with a basket of electronic countermeasures equipment called Khibiny was used to shut down Aegis. The jet (which was otherwise unarmed) then performed a dozen bombing runs on the defenseless US navy vessel.
• It spends it on disastrous development programs of various kinds. A classic example is Ronald Reagan's Strategic Defense Initiative, a.k.a. “Star Wars”: it never resulted in anything strategically useful. Another good example is the F-35 Joint Strike Fighter, which cost over a trillion dollars to develop. It is supposed to be useful for a lot of different missions, but has turned out to be ineffective for all of them.
This list can be continued virtually ad infinitum, but just these examples make clear a basic principle: spending money on things that don't work does not make the US any stronger militarily.
Next, look at the manner in which the US spends money on defense. It spends it by paying military contractors, which are public companies—highly profitable ones. These defense contractors are not primarily interested in delivering value in terms of defense spending; they are interested in generating profits for their shareholders. This is the stated prime directive of all public companies. Therefore, it is safe to write off a good third of all defense spending which goes toward profits: this money may feather a lot of nests, but none of that is military-related.
Also, keep in mind that much of the money is actually just pretty much stolen. The Pentagon has not been audited in decades, and sums unaccounted for run into the billions of dollars. A great deal of defense-related spending is recycled using a variety of schemes into campaign contributions for members of US Congress, whose members then unfailingly vote for increased defense spending. There is also the scheme where defense contractors pay exorbitant consulting fees to retired officers in what is really a form of deferred compensation: the officers work for the defense contractors throughout their careers, but are only paid after they retire. Nobody knows what fraction of defense spending gets siphoned off using these or any number of other corrupt schemes, but it seems likely that the US military establishment is the single largest den of corruption that this planet has ever seen.
The little bit of money that might eventually get spent on developing useful defense systems runs into a truly insurmountable problem: lack of brains. You see, for generations now the US has been falling behind in science and math, along with almost everything else. There are some excellent universities and institutes in the US that graduate top-notch technical specialists, but they mostly graduate foreigners. At the graduate level in science and engineering, US nationals are a small minority.
Now, this doesn't matter in many technical fields, where it is common practice in the US to hire foreign-born specialists. But defense is special: it requires native talent, or the allegiance, and the morale for doing superior work, simply isn't there. And so the defense contractors end up being staffed by native-born knuckle-draggers who couldn't get a job that wasn't defense-related. In turn, the Department of Defense is staffed by similarly dim bulbs: highly caffeinated fitness freaks who run around looking busy, waiting for their next promotion, never criticizing their superiors, never questioning their orders no matter how idiotic they are, and never thinking too hard. What can a system like that achieve? Disasters, that's what.
And so that's what we see: a long sequence of unmitigated military disasters. The US has been involved in a long series of military campaigns against very weak adversaries, in which it proved itself capable of destruction, with staggering levels of collateral damage, and some very impressive unintended consequences such as the emergence of ISIS/Daesh/Islamic Caliphate, but not much else.
Critically, it has turned out to be utterly incapable of winning the peace. The ultimate objective of all military missions is cessation of hostilities on favorable terms. If this objective cannot be achieved, then the military mission is worse than useless. Has the US military been able to achieve cessation of hostilities on favorable terms in any of the countries in which it intervened militarily—Afghanistan, Iraq, Libya, Yemen, Syria, the Ukraine? No, it certainly hasn't.
The US defense establishment can be considered victorious in one sense only: it has conquered and subdued the people of the United States, and is extracting a plentiful tribute from them. It is a pure parasite, serving no useful purpose. It should be disbanded. As far as standing up to the neighbors, the Texas National Guard should be a good match to Mexico's Federales in case Mexico decides to stage a military-style reconquista, which is unlikely, since the de facto demographic reconquista is going so well. On the other hand, the northern border requires no protection it all, since it is inconceivable that Canada would ever pose any sort of military threat.
Of course, there is an alternative to voluntarily disbanding the US military: a resounding, humiliating military defeat at the hands of clever, cost-conscious adversaries. However, this plan is fraught with the danger of triggering a nuclear exchange, and highly placed Americans who are concerned that a nuclear explosion might interfere with their personal longevity plans should give the voluntary approach a good think.
P.S. Some people might find my criticism and suggestions “unpatriotic” because we should all “support our troops.” Rest assured, this has nothing to do with the troops: they do not get to make procurement decisions, and they do not get to choose their missions. As far as as patriotism is concerned, it is the sworn patriotic duty of the troops to serve and protect the people, not the other way around. But if you wish to be a patriot, then you too can serve and protect the people, the troops in particular (because, don't you forget, they are people too) by bringing them home and giving them civilian jobs doing something useful, or at least something that isn't harmful to the world at large or to the country's finances, environment, health, reputation or security.
Sunday, March 6, 2016
SC134-7
http://peakoil.com/consumption/economic-collapse-of-south-america
Economic Collapse of South America
The 7th largest economy on the entire planet is completely imploding. I have written previously about the economic depression that is plaguing Brazil, but since my last article it has gotten much, much worse. During 2015, Brazil’s economy shrank by 3.8 percent, but for the most recent quarter the decline was 5.89 percent on a year over year basis. Unemployment is rising rapidly, the inflation rate is up over 10 percent, and Brazilian currency has lost 24 percent of its value compared to the U.S. dollar over the past 12 months.
At this point, Brazil is already experiencing its longest economic downturn since the Great Depression of the 1930s, and things are getting worse for ordinary Brazilians every single day. The following comes from CNN…
But with Brazil plunging into its worst recession in over two decades — hopes for a brighter future are fading. The Brazilian economy shrank 3.8% in 2015, according to government data published Thursday. That’s the biggest annual drop since 1990 and the country is in its longest recession since the 1930s.
“I have never seen anything like this,” said Alves, 24, as he stood on his balcony overlooking Rocinha, a massive lower middle class neighborhood or favela in Rio de Janeiro where he grew up. “My parents would tell me about hard times, but today it is really tough. Prices are going up every day.”
So how did this happen?
Well, there are a couple of factors that are really hurting South American economies.
Number one, during the “boom years” governments and businesses in South America absolutely gorged on debt. Unfortunately, many of those loans were denominated in U.S. dollars, and now that the U.S. dollar has appreciated greatly against local South American currencies it is taking far more of those local currencies to service and pay back those debts.
Number two, collapsing prices for oil and other commodities have been absolutely brutal for South American economies. They rely very heavily on exporting commodities to the rest of the world, and so at the same time their debt problems are exploding they are getting a lot less money for the oil and industrial commodities that they are trying to sell to North America, Asia and Europe.
I want you to pay close attention to the following chart and analysis from Zero Hedge. As you can see, the economic problems in Brazil appear to be greatly accelerating…
“The Brazilian economic downturn took a real turn for the worse in February,” according to Markit’s Composite PMI, which collapsed to record lows at 39.0. Despite a slightly less bad than expected GDP print this morning (still down a record 5.89% YoY), hope was quickly extinguished as PMIs showed economic activity continuing to contract at a record pace, job losses accelerating, and manufacturing’s collapse accelerating. As Market sums up, “With the global economy also showing signs of slowing, which will impact on external demand, it looks as if the downturn is set to continue to run its course in the coming months.”
GDP was a disaster (but better than expected)
Brazil GDP - Zero Hedge
And of course Brazil is not the only South American economy that is a basket case right now. In fact, things in Venezuela are far worse. In 2015, the Venezuelan economy shrunk by 10 percent, and the official rate of inflation was a staggering 181 percent.
Could you imagine living in an economy with a 181 percent inflation rate?
As prices have escalated out of control, citizens have attempted to hoard basic supplies in advance, and this has resulted in food shortages that are absolutely frightening…
Cardboard signs on the door warning of “No bread” have become increasingly common at Venezuelan bakeries.
Venezuela gets 96 percent of its foreign currency from oil exports, and as crude prices have plunged, so have the country’s imports — among them wheat.
The leftist government of President Nicolas Maduro has tightly controlled access to hard currency, and this has affected imports ranging from medicine to toilet paper. Now it is seriously affecting imports of wheat, which Venezuela does not grow.
Add to this the soaring inflation rate — 181 percent in 2015, the world’s highest — and you see why customers are mainly interested in buying basic food items such as bread.
Here in the United States, there are still people who doubt that an economic crisis is happening.
But in Venezuela and Brazil there is no debate.
Unfortunately, what is happening in Venezuela and Brazil is also slowly starting to happen to most of the rest of the planet as well. It is just that they are a little farther down the road. Economic and financial bubbles are bursting all over the world, and I like how author Vikram Mansharamani described this phenomenon during a recent interview with CNBC…
Deflationary tides are lapping the shores of countries across the world and financial bubbles are set to burst everywhere, Vikram Mansharamani, a lecturer at Yale University, told CNBC on Thursday.
“I think it all started with the China investment bubble that has burst and that brought with it commodities and that pushed deflation around the world and those ripples are landing on the shore of countries literally everywhere,” the high-profile author and academic said at the Global Financial Markets Forum in Abu Dhabi.
And of course the evidence of what Mansharamani was talking about is all around us.
Just this week we found out that Chinese state industries plan to lay off five to six million workers, U.S. factory orders have now fallen for 15 months in a row, and the corporate default rate in the United States has now risen above where it was at when Lehman Brothers collapsed.
There are some people that would like to point to the fact that stocks have bounced back a bit over the past couple of weeks as evidence that the crisis is over.
If they want to believe that, they should go ahead and believe that.
Unfortunately, the truth is that the hard economic numbers that are coming in from all over the world tell us very clearly that global economic activity is slowing down significantly.
A new global recession has already begun, and the pain that is already being felt all over the planet is just the beginning of what is coming.
Economic Collapse of South America
The 7th largest economy on the entire planet is completely imploding. I have written previously about the economic depression that is plaguing Brazil, but since my last article it has gotten much, much worse. During 2015, Brazil’s economy shrank by 3.8 percent, but for the most recent quarter the decline was 5.89 percent on a year over year basis. Unemployment is rising rapidly, the inflation rate is up over 10 percent, and Brazilian currency has lost 24 percent of its value compared to the U.S. dollar over the past 12 months.
At this point, Brazil is already experiencing its longest economic downturn since the Great Depression of the 1930s, and things are getting worse for ordinary Brazilians every single day. The following comes from CNN…
But with Brazil plunging into its worst recession in over two decades — hopes for a brighter future are fading. The Brazilian economy shrank 3.8% in 2015, according to government data published Thursday. That’s the biggest annual drop since 1990 and the country is in its longest recession since the 1930s.
“I have never seen anything like this,” said Alves, 24, as he stood on his balcony overlooking Rocinha, a massive lower middle class neighborhood or favela in Rio de Janeiro where he grew up. “My parents would tell me about hard times, but today it is really tough. Prices are going up every day.”
So how did this happen?
Well, there are a couple of factors that are really hurting South American economies.
Number one, during the “boom years” governments and businesses in South America absolutely gorged on debt. Unfortunately, many of those loans were denominated in U.S. dollars, and now that the U.S. dollar has appreciated greatly against local South American currencies it is taking far more of those local currencies to service and pay back those debts.
Number two, collapsing prices for oil and other commodities have been absolutely brutal for South American economies. They rely very heavily on exporting commodities to the rest of the world, and so at the same time their debt problems are exploding they are getting a lot less money for the oil and industrial commodities that they are trying to sell to North America, Asia and Europe.
I want you to pay close attention to the following chart and analysis from Zero Hedge. As you can see, the economic problems in Brazil appear to be greatly accelerating…
“The Brazilian economic downturn took a real turn for the worse in February,” according to Markit’s Composite PMI, which collapsed to record lows at 39.0. Despite a slightly less bad than expected GDP print this morning (still down a record 5.89% YoY), hope was quickly extinguished as PMIs showed economic activity continuing to contract at a record pace, job losses accelerating, and manufacturing’s collapse accelerating. As Market sums up, “With the global economy also showing signs of slowing, which will impact on external demand, it looks as if the downturn is set to continue to run its course in the coming months.”
GDP was a disaster (but better than expected)
Brazil GDP - Zero Hedge
And of course Brazil is not the only South American economy that is a basket case right now. In fact, things in Venezuela are far worse. In 2015, the Venezuelan economy shrunk by 10 percent, and the official rate of inflation was a staggering 181 percent.
Could you imagine living in an economy with a 181 percent inflation rate?
As prices have escalated out of control, citizens have attempted to hoard basic supplies in advance, and this has resulted in food shortages that are absolutely frightening…
Cardboard signs on the door warning of “No bread” have become increasingly common at Venezuelan bakeries.
Venezuela gets 96 percent of its foreign currency from oil exports, and as crude prices have plunged, so have the country’s imports — among them wheat.
The leftist government of President Nicolas Maduro has tightly controlled access to hard currency, and this has affected imports ranging from medicine to toilet paper. Now it is seriously affecting imports of wheat, which Venezuela does not grow.
Add to this the soaring inflation rate — 181 percent in 2015, the world’s highest — and you see why customers are mainly interested in buying basic food items such as bread.
Here in the United States, there are still people who doubt that an economic crisis is happening.
But in Venezuela and Brazil there is no debate.
Unfortunately, what is happening in Venezuela and Brazil is also slowly starting to happen to most of the rest of the planet as well. It is just that they are a little farther down the road. Economic and financial bubbles are bursting all over the world, and I like how author Vikram Mansharamani described this phenomenon during a recent interview with CNBC…
Deflationary tides are lapping the shores of countries across the world and financial bubbles are set to burst everywhere, Vikram Mansharamani, a lecturer at Yale University, told CNBC on Thursday.
“I think it all started with the China investment bubble that has burst and that brought with it commodities and that pushed deflation around the world and those ripples are landing on the shore of countries literally everywhere,” the high-profile author and academic said at the Global Financial Markets Forum in Abu Dhabi.
And of course the evidence of what Mansharamani was talking about is all around us.
Just this week we found out that Chinese state industries plan to lay off five to six million workers, U.S. factory orders have now fallen for 15 months in a row, and the corporate default rate in the United States has now risen above where it was at when Lehman Brothers collapsed.
There are some people that would like to point to the fact that stocks have bounced back a bit over the past couple of weeks as evidence that the crisis is over.
If they want to believe that, they should go ahead and believe that.
Unfortunately, the truth is that the hard economic numbers that are coming in from all over the world tell us very clearly that global economic activity is slowing down significantly.
A new global recession has already begun, and the pain that is already being felt all over the planet is just the beginning of what is coming.
Friday, March 4, 2016
SC134-6
http://www.informationclearinghouse.info/article44371.htm
Murder Is Washington’s Foreign Policy
Washington has a long history of massacring people, for example, the destruction of the Plains Indians by the Union war criminals Sherman and Sheridan and the atomic bombs dropped on Japanese civilian populations, but Washington has progressed from periodic massacres to fulltime massacring. From the Clinton regime forward, massacre of civilians has become a defining characteristic of the United States of America.
Washington is responsible for the destruction of Yugoslavia and Serbia, Afghanistan, Iraq, Libya, Somalia, and part of Syria. Washington has enabled Saudi Arabia’s attack on Yemen, Ukraine’s attack on its former Russian provinces, and Israel’s destruction of Palestine and the Palestinian people.
The American state’s murderous rampage through the Middle East and North Africa was enabled by the Europeans who provided diplomatic and military cover for Washington’s crimes. Today the Europeans are suffering the consequences as they are over-run by millions of refugees from Washington’s wars. The German women who are raped by the refugees can blame their chancellor, a Washington puppet, for enabling the carnage from which refugees flee to Europe.
In this article, Mattea Kramer points out that Washington has added to its crimes the mass murder of civilians with drones and missile strikes on weddings, funerals, children’s soccer games, medical centers and people’s homes. Nothing can better illustrate the absence of moral integrity and moral conscience of the American state and the population that tolerates it than the cavalier disregard of the thousands of murdered innocents as “collateral damage.”
If there is any outcry from Washington’s European, Canadian, Australian, and Japanese vassals, it is too muted to be heard in the US.
As Kramer points out, American presidential hopefuls are competing on the basis of who will commit the worst war crimes. A leading candidate has endorsed torture, despite its prohibition under US and international law. The candidate proclaims that “torture works” — as if that is a justification — despite the fact that experts know that it does not work. Almost everyone being tortured will say anything in order to stop the torture. Most of those tortured in the “war on terror” have proven to have been innocents. They don’t know the answers to the questions even if they were prepared to give truthful answers. Aleksandr Solzhenitsyn relates that Soviet dissidents likely to be picked up and tortured by the Soviet secret police would memorize names on gravestones in order to comply with demands for the names of their accomplices. In this way, torture victims could comply with demands without endangering innocents.
Washington’s use of invasion, bombings, and murder by drone as its principle weapon against terrorists is mindless. It shows a government devoid of all intelligence, focused on killing alone. Even a fool understands that violence creates terrorists. Washington hasn’t even the intelligence of fools.
The American state now subjects US citizens to execution without due process of law despite the strict prohibition by the US Constitution. Washington’s lawlessness toward others now extends to the American people themselves.
The only possible conclusion is that under Clinton, George W. Bush, and Obama the US government has become an unaccountable, lawless, criminal organization and is a danger to the entire world and its own citizens.
Murder Is Washington’s Foreign Policy
Washington has a long history of massacring people, for example, the destruction of the Plains Indians by the Union war criminals Sherman and Sheridan and the atomic bombs dropped on Japanese civilian populations, but Washington has progressed from periodic massacres to fulltime massacring. From the Clinton regime forward, massacre of civilians has become a defining characteristic of the United States of America.
Washington is responsible for the destruction of Yugoslavia and Serbia, Afghanistan, Iraq, Libya, Somalia, and part of Syria. Washington has enabled Saudi Arabia’s attack on Yemen, Ukraine’s attack on its former Russian provinces, and Israel’s destruction of Palestine and the Palestinian people.
The American state’s murderous rampage through the Middle East and North Africa was enabled by the Europeans who provided diplomatic and military cover for Washington’s crimes. Today the Europeans are suffering the consequences as they are over-run by millions of refugees from Washington’s wars. The German women who are raped by the refugees can blame their chancellor, a Washington puppet, for enabling the carnage from which refugees flee to Europe.
In this article, Mattea Kramer points out that Washington has added to its crimes the mass murder of civilians with drones and missile strikes on weddings, funerals, children’s soccer games, medical centers and people’s homes. Nothing can better illustrate the absence of moral integrity and moral conscience of the American state and the population that tolerates it than the cavalier disregard of the thousands of murdered innocents as “collateral damage.”
If there is any outcry from Washington’s European, Canadian, Australian, and Japanese vassals, it is too muted to be heard in the US.
As Kramer points out, American presidential hopefuls are competing on the basis of who will commit the worst war crimes. A leading candidate has endorsed torture, despite its prohibition under US and international law. The candidate proclaims that “torture works” — as if that is a justification — despite the fact that experts know that it does not work. Almost everyone being tortured will say anything in order to stop the torture. Most of those tortured in the “war on terror” have proven to have been innocents. They don’t know the answers to the questions even if they were prepared to give truthful answers. Aleksandr Solzhenitsyn relates that Soviet dissidents likely to be picked up and tortured by the Soviet secret police would memorize names on gravestones in order to comply with demands for the names of their accomplices. In this way, torture victims could comply with demands without endangering innocents.
Washington’s use of invasion, bombings, and murder by drone as its principle weapon against terrorists is mindless. It shows a government devoid of all intelligence, focused on killing alone. Even a fool understands that violence creates terrorists. Washington hasn’t even the intelligence of fools.
The American state now subjects US citizens to execution without due process of law despite the strict prohibition by the US Constitution. Washington’s lawlessness toward others now extends to the American people themselves.
The only possible conclusion is that under Clinton, George W. Bush, and Obama the US government has become an unaccountable, lawless, criminal organization and is a danger to the entire world and its own citizens.
Wednesday, March 2, 2016
SC134-5
http://www.truthdig.com/report/item/the_graveyard_of_the_elites_20160228
The Graveyard of the Elites
Power elites, blinded by hubris, intoxicated by absolute power, unable to set limits on their exploitation of the underclass, propelled to expand empire beyond its capacity to sustain itself, addicted to hedonism, spectacle and wealth, surrounded by half-witted courtiers—Alan Greenspan, Thomas Friedman, David Brooks and others—who tell them what they want to hear, and enveloped by a false sense of security because of their ability to employ massive state violence, are the last to know their privileged world is imploding.
“History,” the Italian sociologist Vilfredo Pareto wrote, “is the graveyard of aristocracies.”
The carnival of the presidential election is a public display of the deep morbidity and artifice that have gripped American society. Political discourse has been reduced by design to trite patriotic and religious clichés, sentimentality, sanctimonious paeans to the American character, a sacralization of militarism, and acerbic, adolescent taunts. Reality has been left behind.
Politicians are little more than brands. They sell skillfully manufactured personalities. These artificial personalities are used to humanize corporate oppression. They cannot—and do not intend to—end the futile and ceaseless wars, dismantle the security and surveillance state, halt the fossil fuel industry’s ecocide, curb the predatory class of bankers and international financiers, lift Americans out of poverty or restore democracy. They practice anti-politics, or what Benjamin DeMott called “junk politics.” DeMott defined the term in his book “Junk Politics: The Trashing of the American Mind”:
It’s a politics that personalizes and moralizes issues and interests instead of clarifying them. It’s a politics that maximizes threats from abroad while miniaturizing large, complex problems at home. It’s a politics that, guided by guesses about its own profits and losses, abruptly reverses public stances without explanation, often spectacularly bloating problems previously miniaturized (e.g.: Iraq will be over in days or weeks: Iraq is a project for generations). It’s a politics that takes changelessness as its fundamental cause—changelessness meaning zero interruption in the processes and practices that, decade after decade, strengthen existing, interlocking American systems of socioeconomic advantage. And it’s a politics marked not only by impatience (feigned or otherwise) with articulated conflict and by frequent panegyrics on the American citizen’s optimistic spirit and exemplary character, but by mawkish fondness for feel-your-pain gestures and idioms.
He went on: “Great causes—they still exist—nourish themselves on firm, sharp awareness of the substance of injustice. Blunting that awareness is a central project of junk politics.”
Our constitutional democracy is dead. It does not work. Or rather, it does not work for us. No politician or elected official can alter anything of substance. Throughout the administrations of George W. Bush and Barack Obama there has been complete continuity on nearly every issue. Indeed, if Obama has a legacy it is that he made things incrementally worse. He has accelerated the assault on civil liberties, expanded the imperial wars—including empowering the government to order the assassination of American citizens—and opened up new drilling sites on public lands as if he were Sarah Palin. He has failed to rein in Wall Street, which is busy orchestrating another global financial meltdown, and turned our health care system over to rapacious corporations. He has made war on immigrants and overseen economic collapse among the poor, especially African-Americans. He appears to be powerless to shut down our torture center in Guantanamo—a potent recruiting tool for jihadists—or place a new justice on the Supreme Court. His successor will be as impotent.
Obama, now a charter member of our ruling elite, will become rich, as did the Clintons, when he leaves office. The moneyed elites will pay for his two presidential libraries—grotesque vanity projects. They will put him on boards and lavish him with astronomical speaking fees. But as a democratic leader he has proved to be as pathetic as his predecessor.
“If the main purpose of elections is to serve up pliant legislators for lobbyists to shape, such a system deserves to be called ‘misrepresentative or clientry government,’ ” Sheldon Wolin wrote in “Democracy Incorporated: Managed Democracy and the Specter of Inverted Totalitarianism.” “It is, at one and the same time, a powerful contributing factor to the depoliticization of the citizenry, as well as reason for characterizing the system as one of antidemocracy.”
“Managed Democracy,” Wolin continued, “is the application of managerial skills to the basic democratic political institution of popular elections. An election, as distinguished from the simple act of voting, has been reshaped into a complex production. Like all productive operations, it is ongoing and requires continuous supervision rather than continuing popular participation. Unmanaged elections would epitomize contingency: the managerial nightmare of control freaks. One method of assuring control is to make electioneering continuous, year-round, saturated with party propaganda, punctuated with the wisdom of kept pundits, bringing a result boring rather than energizing, the kind of civic lassitude on which a managed democracy thrives.”
Bernie Sanders, who at least acknowledges our economic reality and refuses to accept corporate money for his presidential campaign, plays the role of the Democratic Party’s court jester. No doubt to remain a member of the court, he will not condemn the perfidy and collaboration with corporate power that define Obama, Hillary and Bill Clinton and the Democratic Party. He accepts that criticism of empire is taboo. He continues, even as the party elites rig the primaries against him, to make a mockery of democratic participation, to hold up the Democrats as a tool for change. He will soon be urging his supporters to vote for Hillary Clinton, actively working as an impediment to political mobilization and an advocate for political lethargy. Sanders, whose promise of a political revolution is as hollow as competing campaign slogans, will be rewarded for his duplicity. He will be allowed to keep his seniority in the Democratic caucus. The party will not mount a campaign in Vermont to unseat him from the U.S. Senate. He will not, as he has feared, end up a pariah like Ralph Nader. But he, like everyone else in the establishment, will have sold us out.
The whole election cycle is a carnival act, full of sound and fury, signifying nothing. It caters to the most venal instincts of the public. It is an example of the deep cynicism among elites who, like all other con artists, privately mock us for our gullibility and naiveté. We are treated like malleable children. DeMott called out this infantilization, this “babying of the electorate, spoiling of voter-age ‘children’ with year-round upbeat Christmas tales, the creation of a swelled-head citizenry, morally vain and irremediably sentimental.” In the world of junk politics, he wrote, “distinctions vanish between foundational democratic principles and decorative pleasurable tropes.”
“The familiar apparatus of constitutional government and party organizations survives seemingly untouched,” he wrote. “In time, though, the language of justice and injustice comes to strike ordinary ears as Latinate and archaic—due for interment—and attachment to old forms weakens.”
None of those elected to the White House, the Congress or statehouses have the power, and they know it, to challenge the corporate disemboweling of the country. The popular rage and frustration that have been rising against the established power elites during this election campaign will mount further as Americans, especially with a new president in the White House, realize that their voice and their vote are meaningless. The white nativists and bigots who flock to Donald Trump, along with those who sell out the most basic liberal tenets to support Hillary Clinton, are about to get taught a harsh lesson about the nature of our system of “inverted totalitarianism.” They are about to discover that we do have a class of “superpredators.” These superpredators are not poor people of color walking the streets of marginal communities. They inhabit the exclusive corporate enclaves of the privileged and the powerful.
“One cannot point to any national institution[s] that can accurately be described as democratic,” Wolin wrote, “surely not in the highly managed, money-saturated elections, the lobby-infested Congress, the imperial presidency, the class-based judicial and penal system, or, least of all, the media.”
Corporations control the three branches of government. Corporations write the laws. Corporations determine the media narrative and public debate. Corporations are turning public education into a system of indoctrination. Corporations profit from permanent war, mass incarceration, suppressed wages and poor health care. Corporations have organized a tax boycott. Corporations demand “austerity.” Corporate power is unassailable, and it rolls forward like a stream of lava.
The seeds of destruction of corporate power, however, are embedded within its own structure. The elites have no internal or external constraints. They will exploit, manipulate, lie and oppress until they create an ideological vacuum. No one but the most obtuse, including the courtiers who have severed themselves from reality, will sputter out the inanities of neoliberal ideology. And at that point the system will implode.
The revolt may be right-wing. It may have heavy overtones of fascism. It may cement into place a frightening police state. But that a revolt is coming is incontrovertible. The absurdity of the election proves it.
The Graveyard of the Elites
Power elites, blinded by hubris, intoxicated by absolute power, unable to set limits on their exploitation of the underclass, propelled to expand empire beyond its capacity to sustain itself, addicted to hedonism, spectacle and wealth, surrounded by half-witted courtiers—Alan Greenspan, Thomas Friedman, David Brooks and others—who tell them what they want to hear, and enveloped by a false sense of security because of their ability to employ massive state violence, are the last to know their privileged world is imploding.
“History,” the Italian sociologist Vilfredo Pareto wrote, “is the graveyard of aristocracies.”
The carnival of the presidential election is a public display of the deep morbidity and artifice that have gripped American society. Political discourse has been reduced by design to trite patriotic and religious clichés, sentimentality, sanctimonious paeans to the American character, a sacralization of militarism, and acerbic, adolescent taunts. Reality has been left behind.
Politicians are little more than brands. They sell skillfully manufactured personalities. These artificial personalities are used to humanize corporate oppression. They cannot—and do not intend to—end the futile and ceaseless wars, dismantle the security and surveillance state, halt the fossil fuel industry’s ecocide, curb the predatory class of bankers and international financiers, lift Americans out of poverty or restore democracy. They practice anti-politics, or what Benjamin DeMott called “junk politics.” DeMott defined the term in his book “Junk Politics: The Trashing of the American Mind”:
It’s a politics that personalizes and moralizes issues and interests instead of clarifying them. It’s a politics that maximizes threats from abroad while miniaturizing large, complex problems at home. It’s a politics that, guided by guesses about its own profits and losses, abruptly reverses public stances without explanation, often spectacularly bloating problems previously miniaturized (e.g.: Iraq will be over in days or weeks: Iraq is a project for generations). It’s a politics that takes changelessness as its fundamental cause—changelessness meaning zero interruption in the processes and practices that, decade after decade, strengthen existing, interlocking American systems of socioeconomic advantage. And it’s a politics marked not only by impatience (feigned or otherwise) with articulated conflict and by frequent panegyrics on the American citizen’s optimistic spirit and exemplary character, but by mawkish fondness for feel-your-pain gestures and idioms.
He went on: “Great causes—they still exist—nourish themselves on firm, sharp awareness of the substance of injustice. Blunting that awareness is a central project of junk politics.”
Our constitutional democracy is dead. It does not work. Or rather, it does not work for us. No politician or elected official can alter anything of substance. Throughout the administrations of George W. Bush and Barack Obama there has been complete continuity on nearly every issue. Indeed, if Obama has a legacy it is that he made things incrementally worse. He has accelerated the assault on civil liberties, expanded the imperial wars—including empowering the government to order the assassination of American citizens—and opened up new drilling sites on public lands as if he were Sarah Palin. He has failed to rein in Wall Street, which is busy orchestrating another global financial meltdown, and turned our health care system over to rapacious corporations. He has made war on immigrants and overseen economic collapse among the poor, especially African-Americans. He appears to be powerless to shut down our torture center in Guantanamo—a potent recruiting tool for jihadists—or place a new justice on the Supreme Court. His successor will be as impotent.
Obama, now a charter member of our ruling elite, will become rich, as did the Clintons, when he leaves office. The moneyed elites will pay for his two presidential libraries—grotesque vanity projects. They will put him on boards and lavish him with astronomical speaking fees. But as a democratic leader he has proved to be as pathetic as his predecessor.
“If the main purpose of elections is to serve up pliant legislators for lobbyists to shape, such a system deserves to be called ‘misrepresentative or clientry government,’ ” Sheldon Wolin wrote in “Democracy Incorporated: Managed Democracy and the Specter of Inverted Totalitarianism.” “It is, at one and the same time, a powerful contributing factor to the depoliticization of the citizenry, as well as reason for characterizing the system as one of antidemocracy.”
“Managed Democracy,” Wolin continued, “is the application of managerial skills to the basic democratic political institution of popular elections. An election, as distinguished from the simple act of voting, has been reshaped into a complex production. Like all productive operations, it is ongoing and requires continuous supervision rather than continuing popular participation. Unmanaged elections would epitomize contingency: the managerial nightmare of control freaks. One method of assuring control is to make electioneering continuous, year-round, saturated with party propaganda, punctuated with the wisdom of kept pundits, bringing a result boring rather than energizing, the kind of civic lassitude on which a managed democracy thrives.”
Bernie Sanders, who at least acknowledges our economic reality and refuses to accept corporate money for his presidential campaign, plays the role of the Democratic Party’s court jester. No doubt to remain a member of the court, he will not condemn the perfidy and collaboration with corporate power that define Obama, Hillary and Bill Clinton and the Democratic Party. He accepts that criticism of empire is taboo. He continues, even as the party elites rig the primaries against him, to make a mockery of democratic participation, to hold up the Democrats as a tool for change. He will soon be urging his supporters to vote for Hillary Clinton, actively working as an impediment to political mobilization and an advocate for political lethargy. Sanders, whose promise of a political revolution is as hollow as competing campaign slogans, will be rewarded for his duplicity. He will be allowed to keep his seniority in the Democratic caucus. The party will not mount a campaign in Vermont to unseat him from the U.S. Senate. He will not, as he has feared, end up a pariah like Ralph Nader. But he, like everyone else in the establishment, will have sold us out.
The whole election cycle is a carnival act, full of sound and fury, signifying nothing. It caters to the most venal instincts of the public. It is an example of the deep cynicism among elites who, like all other con artists, privately mock us for our gullibility and naiveté. We are treated like malleable children. DeMott called out this infantilization, this “babying of the electorate, spoiling of voter-age ‘children’ with year-round upbeat Christmas tales, the creation of a swelled-head citizenry, morally vain and irremediably sentimental.” In the world of junk politics, he wrote, “distinctions vanish between foundational democratic principles and decorative pleasurable tropes.”
“The familiar apparatus of constitutional government and party organizations survives seemingly untouched,” he wrote. “In time, though, the language of justice and injustice comes to strike ordinary ears as Latinate and archaic—due for interment—and attachment to old forms weakens.”
None of those elected to the White House, the Congress or statehouses have the power, and they know it, to challenge the corporate disemboweling of the country. The popular rage and frustration that have been rising against the established power elites during this election campaign will mount further as Americans, especially with a new president in the White House, realize that their voice and their vote are meaningless. The white nativists and bigots who flock to Donald Trump, along with those who sell out the most basic liberal tenets to support Hillary Clinton, are about to get taught a harsh lesson about the nature of our system of “inverted totalitarianism.” They are about to discover that we do have a class of “superpredators.” These superpredators are not poor people of color walking the streets of marginal communities. They inhabit the exclusive corporate enclaves of the privileged and the powerful.
“One cannot point to any national institution[s] that can accurately be described as democratic,” Wolin wrote, “surely not in the highly managed, money-saturated elections, the lobby-infested Congress, the imperial presidency, the class-based judicial and penal system, or, least of all, the media.”
Corporations control the three branches of government. Corporations write the laws. Corporations determine the media narrative and public debate. Corporations are turning public education into a system of indoctrination. Corporations profit from permanent war, mass incarceration, suppressed wages and poor health care. Corporations have organized a tax boycott. Corporations demand “austerity.” Corporate power is unassailable, and it rolls forward like a stream of lava.
The seeds of destruction of corporate power, however, are embedded within its own structure. The elites have no internal or external constraints. They will exploit, manipulate, lie and oppress until they create an ideological vacuum. No one but the most obtuse, including the courtiers who have severed themselves from reality, will sputter out the inanities of neoliberal ideology. And at that point the system will implode.
The revolt may be right-wing. It may have heavy overtones of fascism. It may cement into place a frightening police state. But that a revolt is coming is incontrovertible. The absurdity of the election proves it.
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