Category Archives: Corporate Crime

The Stomach-churning Violence of Monsanto, Bayer and the Agrochemical Oligopoly

Posted on by
4

By Colin Todhunter

Source: RINF

As humans, we have evolved with the natural environment over millennia. We have learned what to eat and what not to eat, what to grow and how to grow it and our diets have developed accordingly. We have hunted, gathered, planted and harvested. Our overall survival as a species has been based on gradual, emerging relationships with the seasons, insects, soil, animals, trees and seeds. And out of these relationships, we have seen the development of communities whose rituals and bonds have a deep connection with food production and the natural environment.

However, over the last couple generations, agriculture and food production has changed more than it had done over previous millennia. These changes have involved massive social upheaval as communities and traditions have been uprooted and have entailed modifying what we eat, how we grow our food and what we apply to it. All of this has been driven by geopolitical concerns and powerful commercial interests with their proprietary chemicals and patented seeds. The process of neoliberal globalisation is accelerating the process as farmers are encouraged to produce for global supply chains dominated by transnational agribusiness.

Certain crops are now genetically engineered, the range of crops we grow has become less diverse, synthetic biocides have been poured on crops and soil and our bodies have been subjected to a chemical bombardment. We have arrived at a point where we have lost touch with our deep-rooted microbiological and social connection with nature and have developed an arrogance that has placed ‘man’ above the environment and all other species. One of the consequences is that we have paid an enormous price in terms of the consequent social, environmental and health-related devastation.

Despite the promise and potential of science, it has too often in modern society become a tool of vested interests, an ideology wrapped in the vestiges of authority and the ‘superstition’ that its corporate-appointed priesthood should not be challenged nor questioned. Instead of liberating humankind, it has now too often become a tool of deception in the hands of companies like Monsanto, Bayer and Syngenta which make up the oligopoly that controls what is an increasingly globalised system of modern food and agriculture.

These corporations have successfully instituted the notion that the mass application of biocides, monocropping and industrial agriculture are necessary and desirable. They are not. However, these companies have used their science and propaganda to project certainty in order to hide the fact that they have no real idea what their products and practices are doing to human health or the environment (and in cases when they do know, they do their best to cover it up or hide behind the notion of ‘commercial confidentiality‘).

Based on their limited, tainted studies and co-opted version of science, they say with certainty that, for example, genetically engineered food and glyphosate are ‘safe’. And when inconvenient truths do emerge, they will mobilise their massive lobbying resources to evade regulations, they will seek to hide the dangers of their products or they will set out to destroy scientists whose findings challenge their commercial bottom line.

Soil microbiologists are still trying to fully comprehend soil microbes and how they function as anintegrated network in relation to plants. The agrochemical sector has little idea of how their biocides have affected soils. It merely churns out public relations spin that their inputs are harmless for soil, plants and human health. Such claims are not based on proper, in-depth, long-term studies. They are based on a don’t look, don’t find approach or a manipulation of standards and procedures that ensure their products make it on to the commercial market and stay there. The devastating impacts on soil are increasingly clear to see.

And what are these biocides doing to us as humans? Numerous studies have linked the increase in pesticide us with spiralling rates of ill health. Kat Carrol of the National Health Federation is concerned about the impacts on human gut bacteria that play a big role in how organs function and our neurological health. The gut microbiome can contain up to six pounds of bacteria and is what Carroll calls ‘human soil’. She says that with their agrochemicals and food additives, powerful companies are attacking this ‘soil’ and with it the sanctity of the human body.

And her concerns seem valid. Many important neurotransmitters are located in the gut. Aside from affecting the functioning of major organs, these transmitters affect our moods and thinking. Feed gut bacteria a cocktail of biocides and is it any surprise that many diseases are increasing?

For instance, findings published in the journal ‘Translational Psychiatry’ provide strong evidence that gut bacteria can have a direct physical impact on the brain. Alterations in the composition of the gut microbiome have been implicated in a wide range of neurological and psychiatric conditions, including autism, chronic pain, depression, and Parkinson’s Disease.

Environmental campaigner Dr Rosemary Mason has written extensively on the impacts of agrochemicals (especially glyphosate) on humans, not least during child and adolescent development. In her numerous documents and papers, she cites a plethora of data and studies that link the use of agrochemicals with various diseases and ailments. She has also noted the impact of these chemicals on the human gut microbiome.

Writing in The Guardian, Mo Costandi discusses the importance of gut bacteria and their balance. In adolescence the brain undergoes a protracted period of heightened neural plasticity, during which large numbers of synapses are eliminated in the prefrontal cortex and a wave of ‘myelination’ sweeps across this part of the brain. These processes refine the circuitry in the prefrontal cortex and increase its connectivity to other brain regions. Myelination is also critical for normal, everyday functioning of the brain. Myelin increases a nerve fibre’s conduction velocity by up to a hundred times, and so when it breaks down, the consequences can be devastating.

Other recent work shows that gut microbes control the maturation and function of microglia, the immune cells that eliminate unwanted synapses in the brain; age-related changes to gut microbe composition might regulate myelination and synaptic pruning in adolescence and could, therefore, contribute to cognitive development. Upset those changes, and, As Mason argues, there are going to be serious implications for children and adolescents. Mason places glyphosate at the core of the ailments and disorders currently affecting young people in Wales and the UK in general.

Yet we are still being subjected to an unregulated cocktail of agrochemicals which end up interacting with each other in the gut. Regulatory agencies and governments appear to work hand in glove with the agrochemical sector.

Carol Van Strum has released documents indicating collusion between the manufacturers of dangerous chemicals and regulatory bodies. Evaggelos Vallianatos has highlighted the massive fraud surrounding the regulation of biocides and the wide scale corruption at laboratories that were supposed to test these chemicals for safety. Many of these substances were not subjected to what was deemed proper testing in the first place yet they remain on the market. Shiv Chopra has also highlighted how various dangerous products were allowed on the commercial market and into the food chain due to collusion between these companies and public officials.

Powerful transnational corporations are using humanity as their collective guinea pig. But those who question them or their corporate science are automatically labelled anti-science and accused of committing crimes against humanity because they are preventing their products from being commercialised ‘to help the poor or hungry’. Such attacks on critics by company mouthpieces who masquerade as public officials, independent scientists or independent journalists are mere spin. They are, moreover, based on the sheer hypocrisy that these companies (owned and controlled by elite interests) have humanity’s and the environment’s best interests at heart.

Many of these companies have historically profited from violence. Unfortunately, that character of persists. They directly profit on the back of militarism, whether as a result of the US-backed ‘regime change’ in Ukraine or the US invasion of Iraq. They also believe they can cajole (poison) nature by means of chemicals and bully governments and attack critics, while rolling out propaganda campaigns for public consumption.

Whether it involves neocolonialism and the destruction of indigenous practices and cultures under the guise of ‘development’, the impoverishment of farmers in India, the twisting and writing of national and international laws, the destruction of rural communities, the globalisation of bad food and illness, the deleterious impacts on health and soil, the hollowing out of public institutions and the range of human rights abuses we saw documented during The Monsanto Tribunal, what we are witnessing is structural violence in many forms.

Pesticides are in fact “a global human rights concern” and are in no way vital to ensuring food security. Ultimately, what we see is ignorance, arrogance and corruption masquerading as certainty and science.

“… when we wound the planet grievously by excavating its treasures – the gold, mineral and oil, destroy its ability to breathe by converting forests into urban wastelands, poison its waters with toxic wastes and exterminate other living organisms – we are in fact doing all this to our own bodies… all other species are to be enslaved or driven to extinction if need be in the interests of human ‘progress’… we are part of the same web of life –where every difference we construct artificially between ‘them’ and ‘us’ adds only one more brick to the tombstone of humankind itself.” – from ‘Micobes of the World Unite!’ By Satya Sager

Freedom Rider: Oligarch Jeff Bezos

Posted on by
2

By Margaret Kimberley

Source: Intrepid Report

Amazon CEO Jeff Bezos has a net worth of $105 billion and is the richest man in the world. But he is not just the richest man at this moment in history. He is the richest person who has ever lived. As of 2017 he and seven other billionaires had a collective net worth equal to that of the poorest 3.6 billion people on earth.

These figures have been in the news of late but without much useful analysis. The corporate media refuse to state what is obvious. Namely that inequality is worse around the world precisely because these super rich people demand it.

While pundits and politicians go on breathlessly about oligarchs in Russia, they seldom take a look at the wealthiest in their own backyard and the control they exert over the lives of millions of people. When Amazon announced it would choose a site for its new headquarters, cities across the country began a furious race to the bottom. Amazon is not alone in the thievery department. Major corporations like Walmart always request and receive public property and public funds in order to do business.

Some 235 cities have put themselves in the running for this dubious venture. Chicago is willing to give Amazon $1.3 billion in payroll taxes that prospective employees would ordinarily pay that city. If Chicago wins this booby prize, Amazon employees would pay taxes to their employer and not to the government. This is truly cutting out the middle man and makes real the rule of, by, and for the wealthiest.

The potential for public outrage isn’t lost on unprincipled politicians. Some cities now refuse to reveal how much they plan to give away. But the news to date is disheartening with Boston offering $75 million while Houston is willing to part with $268 million. Amazon says it will hire 50,000 people but their business model already pays employees so little that many of them qualify for public assistance, despite being employed.

The United States is as much of an oligarchy as countries it usually disparages but it is far more dishonest about its true nature. All talk of democracy is a lie as the rich get richer, by an additional $1 trillion in 2017, and wield more and more power over the lives of everyone else.

The Bezos juggernaut is not restricted to theft of public money. He is also the sole owner of the Washington Post, one of the most influential newspapers in the country. Bezos owns a newspaper that is an organ of the ruling elite and he also has a $600 million contract to provide the Central Intelligence Agency with cloud computing services.

The Washington Post was the force behind Propaganda or Not, an effort to destroy left wing voices like those at Black Agenda Report. Under the guise of fighting Russia and so-called fake news, the Bezos owned Post began the censorship campaign that has put the left’s presence on the Internet in such jeopardy.

Politicians outdo one another giving away public resources to the richest man on the planet who also owns a major newspaper and services the surveillance state. If it can be said that any one person rules the world, Bezos would be obvious choice. No one in Chicago, Boston, Houston or any of the other cities giving away the store ever voted for Jeff Bezos. All talk of democracy is a sham as long as the richest people take from the rest of humanity.

The effort to make government an irrelevance is thoroughly bipartisan. Republicans and Democrats alike are willing to turn over government coffers to Bezos and his ilk and the rights of the people be damned.

Whoever wins this tarnished brass ring ought to be consigned to political defeat. The mayor, aldermen, city council members or whoever else brings disaster to their locality should be punished for aiding and abetting the theft. If these cities can give to the richest man who ever lived, they can surely use public money to help their residents right now. But they will never do that because they are all bought off and compromised. They are either cynical or afraid to go against the real rulers of the country.

Bezos may look like the villain in a James Bond movie but there is nothing funny about him. He is deadly serious and so are his intentions. In a Bezos run world, every worker will be impoverished, every level of government will subsidize corporations, and anyone who speaks out will be discredited and under surveillance.

The last thing any city needs is a new Amazon headquarters. We need an end to billionaire rule in this country and around the world. That will be the salvation of the people, not more sweatshops run by wealthy people who steal from everyone else.

 

Margaret Kimberley’s Freedom Rider column appears weekly in BAR, and is widely reprinted elsewhere. She maintains a frequently updated blog as well as at freedomrider.blogspot.com. Ms. Kimberley lives in New York City, and can be reached via e-Mail at Margaret.Kimberley(at)BlackAgendaReport.com.

Financial Tyranny: ‘We the People’ Are the New Permanent Underclass in America

Posted on by
2

By John W. Whitehead

Source: The Rutherford Institute

“When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.” ― Frédéric Bastiat, French economist

Americans can no longer afford to get sick and there’s a reason why.

That’s because a growing number of Americans are struggling to stretch their dollars far enough to pay their bills, get out of debt and ensure that if and when an illness arises, it doesn’t bankrupt them.

This is a reality that no amount of partisan political bickering can deny.

Many Americans can no longer afford health insurance, drug costs or hospital bills. They can’t afford to pay rising healthcare premiums, out-of-pocket deductibles and prescription drug bills.

They can’t afford to live, and now they can’t afford to get sick or die, either.

To be clear, my definition of “affordable healthcare” is different from the government’s. To the government, you can “afford” to pay for healthcare if your income falls above the poverty line. That takes no account of rising taxes, the cost of living, the cost to clothe and feed a household, the cost of transportation and communication and education, or any of the other line items that add up to a life worth living.

As Helaine Olen points out in The Atlantic:

“Just because a person is insured, it doesn’t mean he or she can actually afford their doctor, hospital, pharmaceutical, and other medical bills. The point of insurance is to protect patients’ finances from the costs of everything from hospitalizations to prescription drugs, but out-of-pocket spending for people even with employer-provided health insurance has increased by more than 50 percent since 2010.”

For too many Americans, achieving any kind of quality of life has become a choice between putting food on the table and paying one’s bills or health care coverage.

It’s a gamble any way you look at it, and the medical community is not helping.

Healthcare costs are rising, driven by a medical, insurance and pharmaceutical industry that are getting rich off the sick and dying.

Indeed, Americans currently pay $3.4 trillion a year for medical care. We spent more than $10,000 per person on health care in 2016. Those attempting to shop for health insurance coverage right now are understandably experiencing sticker shock with premiums set to rise 34% in 2018. It’s estimated that costs may rise as high as $15,000 by 2023.

As Bloomberg reports, “Rising health-care costs are eating up the wage gains won by American workers, who are being asked by their employers to pick up more of the heftier tab… The cost of buying health coverage at work has increased faster than wages and inflation for years, pressuring household budgets.”

Appallingly, Americans spend more than any developed country on healthcare and have less to show for it. We don’t live as long, we have higher infant mortality rates, we have fewer hospital and physician visits, and the quality of our healthcare is generally worse. We also pay astronomical amounts for prescription drugs, compared to other countries.

Whether or not you’re insured through an employer, the healthcare marketplace, a government-subsidized program such as Medicare or Medicaid, or have no health coverage whatsoever, it’s still “we the consumers” who have to pay to subsidize the bill whenever anyone gets sick in this country. And that bill is a whopper.

While Obamacare (a.k.a. the Affordable Care Act) may have made health insurance more accessible to greater numbers of individuals, it has failed to make healthcare any more affordable.

Why?

As journalist Laurie Meisler concludes, “One big reason U.S. health care costs are so high: pharmaceutical spending. The U.S. spends more per capita on prescription medicines and over-the-counter products than any other country.”

One investigative journalist spent seven months analyzing hundreds of bills from hospitals, doctors, drug companies, and medical equipment manufacturers. His findings confirmed what we’ve known all along: health care in America is just another way of making corporations rich at consumer expense.

An examination of an itemized hospital bill (only available upon request) revealed an amazing amount of price gouging. Tylenol, which you can buy for less than $10 for a bottle, was charged to the patient at a rate of $15 per pill, for a total of $345 for a hospital stay. $8 for a plastic bag to hold the patient’s personal items and another $8 for a box of Kleenex. $23 for a single alcohol swab. $53 per pair for non-sterile gloves (adding up to $5,141 for the entire hospital stay). $10 for plastic cup in which to take one’s medicine. $93 for the use of an overhead light during a surgical procedure. $39 each time you want to hold your newborn baby. And $800 for a sterile water IV bag that costs about a dollar to make.

This is clearly not a problem that can be remedied by partisan politics.

The so-called Affordable Care Act pushed through by the Obama administration is proving to be anything but affordable for anyone over the poverty line. And the Trump administration’s “fixes” promise to be no better. Indeed, for too many Americans who live paycheck to paycheck and struggle just to get by, the tax penalty for not having health insurance will actually be cheaper than trying to find affordable coverage that actually pays for care.

This is how the middle classes, who fuel the nation’s economy and fund the government’s programs, get screwed repeatedly.

When almost 60% of Americans are so financially strapped that they don’t have even $500 in savings and nothing whatsoever put away for retirement, and yet they are being forced to pay for government programs that do little to enhance their lives, we’re not living the American dream.

We’re living a financial nightmare.

We have no real say in how the government runs, or how our taxpayer funds are used, but that doesn’t prevent the government from fleecing us at every turn and forcing us to pay for endless wars that do more to fund the military industrial complex than protect us, pork barrel projects that produce little to nothing, and a police state that serves only to imprison us within its walls.

We have no real say, but we’re being forced to pay through the nose, anyhow.

George Harrison, who died 16 years ago this month, summed up this outrageous state of affairs in his song Taxman:

If you drive a car, I’ll tax the street,
If you try to sit, I’ll tax your seat.
If you get too cold I’ll tax the heat,
If you take a walk, I’ll tax your feet.

Don’t ask me what I want it for
If you don’t want to pay some more
‘Cause I’m the taxman, yeah, I’m the taxman

Now my advice for those who die
Declare the pennies on your eyes
‘Cause I’m the taxman, yeah, I’m the taxman
And you’re working for no one but me.

In other words, in the eyes of the government, “we the people, the voters, the consumers, and the taxpayers” are little more than indentured servants and sources of revenue.

If you have no choice, no voice, and no real options when it comes to the government’s claims on your property and your money, you’re not free.

Consider: The government can seize your home and your car (which you’ve bought and paid for) over nonpayment of taxes. Government agents can freeze and seize your bank accounts and other valuables if they merely “suspect” wrongdoing. And the IRS insists on getting the first cut of your salary to pay for government programs over which you have no say.

It wasn’t always this way, of course.

Early Americans went to war over the inalienable rights described by philosopher John Locke as the natural rights of life, liberty and property.

It didn’t take long, however—a hundred years, in fact—before the American government was laying claim to the citizenry’s property by levying taxes to pay for the Civil War. As the New York Times reports, “Widespread resistance led to its repeal in 1872.”

Determined to claim some of the citizenry’s wealth for its own uses, the government reinstituted the income tax in 1894. Charles Pollock challenged the tax as unconstitutional, and the U.S. Supreme Court ruled in his favor. Pollock’s victory was relatively short-lived. Members of Congress—united in their determination to tax the American people’s income—worked together to adopt a constitutional amendment to overrule the Pollock decision.

On the eve of World War I, in 1913, Congress instituted a permanent income tax by way of the 16th Amendment to the Constitution and the Revenue Act of 1913. Under the Revenue Act, individuals with income exceeding $3,000 could be taxed starting at 1% up to 7% for incomes exceeding $500,000.

It’s all gone downhill from there.

Unsurprisingly, the government has used its tax powers to advance its own imperialistic agendas and the courts have repeatedly upheld the government’s power to penalize or jail those who refused to pay their taxes.

Irwin A. Schiff was one of the nation’s most vocal tax protesters. He spent a good portion of his life arguing that the income tax was unconstitutional. He paid the price for his resistance, too: Schiff served three separate prison terms (more than 10 years in all) over his refusal to pay taxes. He died at the age of 87 serving a 14-year prison term. As constitutional activist Robert L. Schulz noted in Schiff’s obituary, “In a society where there is so much fear of government, and in particular of the I.R.S., [Schiff] was probably the most influential educator regarding the illegal and unconstitutional operation and enforcement of the Internal Revenue Code. It’s very hard to speak to power, but he did, and he paid a very heavy price.”

It’s still hard to speak to power, and those who do are still paying a very heavy price.

All the while the government continues to do whatever it likes—levy taxes, rack up debt, spend outrageously and irresponsibly—with little thought for the plight of its citizens.

The national debt is $20 trillion and growing. The amount this country owes is now greater than its gross national product (all the products and services produced in one year by labor and property supplied by the citizens). We’re paying more than $270 billion just in interest on that debt annually. And the top two foreign countries who “own” our debt are China and Japan.

To top it all off, all of those wars the U.S. is so eager to fight abroad are being waged with borrowed funds. As The Atlantic reports, “For 15 years now, the United States has been putting these wars on a credit card… U.S. leaders are essentially bankrolling the wars with debt, in the form of purchases of U.S. Treasury bonds by U.S.-based entities like pension funds and state and local governments, and by countries like China and Japan.”

If Americans managed their personal finances the way the government mismanages the nation’s finances, we’d all be in debtors’ prison by now.

Still, the government remains unrepentant, unfazed and undeterred in its money grabs.

While we’re struggling to get by, and making tough decisions about how to spend what little money actually makes it into our pockets after the federal, state and local governments take their share (this doesn’t include the stealth taxes imposed through tolls, fines and other fiscal penalties), the police state is spending our hard-earned tax dollars to further entrench its powers and entrap its citizens.

For instance, American taxpayers have been forced to shell out $5.6 trillion since 9/11 for the military industrial complex’s costly, endless so-called “war on terrorism.” That translates to roughly $23,000 per taxpayer to wage wars abroad, occupy foreign countries, provide financial aid to foreign allies, and fill the pockets of defense contractors and grease the hands of corrupt foreign dignitaries.

Mind you, that staggering $6 trillion is only a portion of what the Pentagon spends on America’s military empire.

That price tag keeps growing, too.

The 16-year war in Afghanistan, which now stands as the longest and one of the most expensive wars in U.S. history, is about to get even longer and more costly, thanks to President Trump’s promise to send more troops over.

In this way, the military industrial complex will get even richer, and the American taxpayer will be forced to shell out even more funds for programs that do little to enhance our lives, ensure our happiness and well-being, or secure our freedoms.

As Dwight D. Eisenhower warned in a 1953 speech:

Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. This is, I repeat, the best way of life to be found on the road the world has been taking. This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron. […] Is there no other way the world may live?

This is still no way of life.

Yet it’s not just the government’s endless wars that are bleeding us dry.

We’re also being forced to shell out money for surveillance systems to track our movements, money to further militarize our already militarized police, money to allow the government to raid our homes and bank accounts, money to fund schools where our kids learn nothing about freedom and everything about how to comply, and on and on.

Are you getting the picture yet?

The government isn’t taking our money to make our lives better. Just take a look at the nation’s failing infrastructure, and you’ll see how little is being spent on programs that advance the common good.

We’re being robbed blind so the governmental elite can get richer.

This is nothing less than financial tyranny.

“We the people” have become the new, permanent underclass in America.

It’s tempting to say that there’s little we can do about it, except that’s not quite accurate.

There are a few things we can do (demand transparency, reject cronyism and graft, insist on fair pricing and honest accounting methods, call a halt to incentive-driven government programs that prioritize profits over people), but it will require that “we the people” stop playing politics and stand united against the politicians and corporate interests who have turned our government and economy into a pay-to-play exercise in fascism.

We’ve become so invested in identity politics that label us based on our political leanings that we’ve lost sight of the one label that unites us: we’re all Americans.

As I make clear in my book Battlefield America: The War on the American People, the powers-that-be want to pit us against one another. They want us to adopt an “us versus them” mindset that keeps us powerless and divided. Trust me, the only “us versus them” that matters anymore is “we the people” against the police state.

We’re all in the same boat, folks, and there’s only one real life preserver: that’s the Constitution and the Bill of Rights.

The Constitution starts with those three powerful words: “We the people.”

The message is this: there is power in our numbers.

That remains our greatest strength in the face of a governmental elite that continues to ride roughshod over the populace. It remains our greatest defense against a government that has claimed for itself unlimited power over the purse (taxpayer funds) and the sword (military might). As Patrick Henry declared in the last speech before his death, “United we stand, divided we fall. Let us not split into factions … or … exhaust [our strength] in civil commotions and intestine wars.”

This holds true whether you’re talking about health care, war spending, or the American police state.

America’s Painful Self-delusion

Posted on by
6

By Allen Marshall

Source: Information Clearing House

America is the only nation brought forth by a set of beliefs, and those beliefs, captured so eloquently in our founding documents, are some of the most powerful and inspiring ever conceived. We consider this to be the land of the free, where the individual is supreme and nothing prevents us from going as far as our talents can take us. That image of America – that “brand” – is incredibly strong.

However, there’s a very large gap between that long-held image and the reality of America today. What was once a government built for the people is now a government run for the rich and powerful, one that throws the people under the bus whenever their interests differ from those of the corporate and political leaders who run the show.

And living in one world (the corrupt) while stubbornly believing you live in another (the ideal), despite mounds of evidence, causes a distinct kind of stress, often called cognitive dissonance.

Psychologists suggest that when people are in a state of cognitive dissonance, they’ll search for a way to resolve it, either by rejecting one view or the other as either wrong or unimportant. If you’re a smoker looking at the link between smoking and cancer, for example, you’ll either quit smoking or decide that the research is biased, wrong, or doesn’t apply (in other words, that you’re smart enough to quit before the long-term damage is done).

But what happens if you can’t resolve the two?

For most of us Americans, resolving our cognitive dissonance would mean either accepting that we’re impotent and living futile (and feudal) lives, or rejecting our lifestyles and actively fighting the rot in the system. If we’re not willing to do either of those, the dissonance stays – and eats at us.

People carrying this kind of ongoing, underlying stress find ways of coping with it; in America we’re doing it with self-medication, compulsive behaviors and distractions. Consider the following examples of the way we cope with the ever-present stress in our lives:

  • Drugs – Our country is awash in drugs, both legal and illegal, that keep us numb. In 2014, there were 245 million prescriptions filled for opioid pain relievers. The number of deaths from drug overdoses has risen from around 30,000 in 2005 to 64,000 in 2016. And communities across the country are being devastated by the opioid epidemic, as explained in this in-depth reporting by Cincinnati.com.
  • Drinking – People don’t only use drugs to self-medicate; drinking does the trick as well, and we’re doing a lot more of it than we used to. According to a new study in JAMA Psychiatry, overall drinking in the US increased by 11% between 2002-13, while high-risk and problem drinking rose even higher: high-risk drinking rose by 29.9%, while problem drinking rose by 50%.
  • Mental Illness – In 2015, 17.9% of adults held a diagnosis for a mental disorder, while a 2010 study found that 46.3% of children ages 13-18 had a mental disorder at some point in their young lives, and the majority of those adults and children are given prescriptions. This includes a dramatic increase in ADHD diagnoses for children: According to SharpBrains, “Among children aged 5 to 18, between 1991-92 and 2008-09, rates of ADHD diagnosis increased nearly 4-fold among boys – from 39.5 to 144.6 per 1000 – and nearly 6-fold for girls – from 12.3 and 68.5 per 1000 visits.”
  • Obesity – If drinking and drugs aren’t your thing – or even if they are – more of us are coping with stress by overeating, and it’s showing up on our waistlines. From 1990 to 2016, the average percentage of obese adults increased from 11.1% to 29.8%; when you add in the number of people who are overweight but not obese, it rises to more than two in three adults.
  • Sleeping problems – Sleep has a significant impact on our physical and mental health, and in America we’re not getting enough of it: The CDC states that 50-70 million American adults have a sleep or wakefulness disorder.
  • Media Usage – Is there any better distraction from life’s problems than media? We certainly spend a lot of our time being passively entertained: In 2016, Americans consumed an average of 10 hours of media per day, compared with 7.5 hours per day globally. Nielson reports that lower income adults spend much more time with media than do affluent adults, with adults in households with include under $25,000 watching 211 hours/month of television, versus 113 hours/month for adults in households earning $75,000 or more. (The trend is similar across other media as well.)
  • The Disease of Debt – According to the New York Fed, household debt reached a new peak in the third quarter of 2017, at $12.8 trillion. Part of our debt problem comes from the compulsive shopping we do as a distraction; the other results from denying the reality that our wages aren’t keeping up with the increase in the cost of living, meaning that we use debt to plug the gap rather than reducing our living standards to align with our reality.

We’re collectively doing so much damage to ourselves, solely to protect our psyches from the reality that the America that used to be is no longer the America we have. And who does that help? As you can see from the points above, it doesn’t help us: Instead, it helps the rich and powerful who are subverting the system. They’re corrupting everything this country once was, and by willfully refusing to acknowledge that reality, we’re inadvertently helping them to do it.

The best thing we can do – for our mental and physical health, as well as for our country – is to open our eyes to what America has become, not what we wish it still was. It’s time to face reality and take action.

Putting an End to the Rent Economy

Posted on by
2

By Michael Hudson and Vlado Plaga

Source: Unz Review

Interview with Vlado Plaga in the German magazine FAIRCONOMY, September 2017.

Originally, you didn’t want to become an economist. How did it come that you changed your plans and digged so deep into economics?

I found economics aesthetic, as beautiful as astronomy. I came to New York expecting to become an orchestra conductor, but I met one of the leading Wall Street economists, who convinced me that economics and finance was beautiful.

I was intrigued by the concept of compound interest and by the autumnal drain of money from the banking system to move the crops at harvest time. That is when most crashes occurred. The flow of funds was the key.

I saw that these economic cycles were mainly financial: the build-up of debt and its cancellation or wipe-out and bankruptcy occurring again and again throughout history. I wanted to study the rise and fall of financial economies.

But when you studied at the New York University you were not taught the things that really interested you, were you?

I got a PhD as a union card. In order to work on Wall Street, I needed a PhD. But what I found in the textbooks was the opposite of everything that I experienced on Wall Street in the real world. Academic textbooks describe a parallel universe. When I tried to be helpful and pointed out to my professors that the textbooks had little to do with how the economy and Wall Street actually work, that did not help me get good grades. I think I got a C+ in money and banking.

So I scraped by, got a PhD and lived happily ever after in the real world.

So you had to find out on your own… Your first job was at the Savings Banks Trust Company, a trust established by the 127 savings banks that still existed in New York in the 1960s. And you somehow hit the bull’s eye and were set on the right track, right from the start: you’ve been exploring the relationship between money and land. You had an interesting job there. What was it?

Savings banks were much like Germany’s Landesbanks. They take local deposits and lend them out to home buyers. Savings and Loan Associations (S&Ls) did the same thing. They were restricted to lending to real estate, not personal loans or for corporate business loans. (Today, they have all been turned into commercial banks.)

I noticed two dynamics. One is that savings grew exponentially, almost entirely by depositors getting dividends every 3 months. So every three months I found a sudden jump in savings. This savings growth consisted mainly of the interest that accrued. So there was an exponential growth of savings simply by inertia.

The second dynamic was that all this exponential growth in savings was recycled into the real estate market. What has pushed up housing prices in the US is the availability of mortgage credit. In charting the growth of mortgage lending and savings in New York State, I found a recycling of savings into mortgages. That meant an exponential growth in savings to lend to buyers of real estate. So the cause of rising real estate prices wasn’t population or infrastructure. It was simply that properties are worth whatever banks are able and willing to lend against them.

As the banks have more and more money, they have lowered their lending standards.

It’s kind of automatic, it’s just a mathematical law…

Yes, a mathematical law that is independent of the economy. In other words, savings grow whether or not the economy is growing. The interest paid to bondholders, savers and other creditors continues to accrue. That turns out to be the key to understanding why today’s economy is polarizing between creditors and debtors.

You wrote in “Killing the Host” that your graphs looked like Hokusai’s “Great Wave off Konagawa” or even more like a cardiogram. Why?

Any rate of interest has a doubling time. One way or another any interest-bearing debt grows and grows. It usually grows whenever interest is paid. That’s why it looks like a cardiogram: Every three months there’s a jump. So it’s like the Hokusai wave with a zigzag to reflect the timing of interest payments every three months.

The exponential growth of finance capital and interest-bearing debt grows much faster then the rest oft he economy, which tends to taper off in an S-curve. That’s what causes the business cycle to turn down. It’s not really a cycle, it’s more like a slow buildup like a wave and then a sudden vertical crash downward.

This has been going on for a century. Repeated financial waves build up until the economy becomes so top-heavy with debt that it crashes. A crash used to occur every 11 years in the 19th century. But in the United States from 1945 to 2008, the exponential upswing was kept artificially long by creating more and more debt financing. So the crash was postponed until 2008.

Most crashes since the 19th century had a silver lining: They wiped out the bad debts. But this time the debts were left in place, leading to a massive wave of foreclosures. We are now suffering from debt deflation. Instead of a recovery, there’s just a flat line for 99% of the economy.

The only layer of the economy that is growing is the wealthiest 5% layer – mainly the Finance, Insurance and Real Estate (FIRE) sector. That is, creditors living of interest and economic rent: monopoly rent, land rent and financial interest. The rest of the economy is slowly but steadily shrinking.

And the compound interest that was accumulated was issued by the banks as new mortgages. Isn’t this only logical for the banks to do?

Savings banks and S&Ls were only allowed to lend for mortgages. Commercial banks now look for the largest parts of the economy as their customers. Despite the fact that most economic textbooks describe industry and manufacturing as being the main part of economy, real estate actually is the largest sector. So most bank lending is against real estate and, after that, oil, gas and mining.

That explains why the banking and financial interests have become the main lobbyists urging that real estate, mining and oil and gas be untaxed – so that there’ll be more economic rent left to pay the banks. Most land rent and natural resource rent is paid out as interest to the banks instead of as taxes to the government.

So instead of housing becoming cheaper and cheaper it turns out to be much less affordable in our days than in the 1960s?

Credit creation has inflated asset prices. The resulting asset-price inflation is the distinguishing financial feature of our time. In a race tot he bottom, banks have steadily lowered the terms on which they make loans. This has made the economy more risky.

In the 1960s, banks required a 25-30% down payment by the buyer, and limited the burden of mortgage debt service to only 25% of the borrower’s income. But interest is now federally guaranteed up to 43% of the home buyer’s income. And by 2008, banks were making loans no down payment at all. Finally, loans in the 1960s were self-amortizing over 30 years. Today we have interest-only loans that are never paid off.

So banks loan much more of the property’s market price. That is why most of the rental value of land isn’t paid to the homeowner or commercial landlord any more. It’s paid to the banks as interest.

Was this the reason for the savings and loan crisis that hit the US in 1986 and that was responsible for the failure of 1,043 out of the 3,234 savings and loan associations in the United States from 1986 to 1995?

The problem with the savings and loan crisis was mainly fraud! The large California S&L’s were run by crooks, topped by Charles Keating. Many were prosecuted for fraud and sent to jail. By the 1980s the financial sector as a whole had become basically a criminalized sector. My colleague Bill Black has documented most of that. He was a prosecutor of the S&L frauds in the 1980s, and wrote a book “The best way to rob a bank is to own one”.

That’s a famous quotation, I also heard that.

Fraud was the main financial problem, and remains so.

Since 2007 Americans were strangled by their mortgages in the sub-prime crisis…

These were essentially junk mortgages, and once again it was fraud. Already in 2004 the FBI said that the American economy was suffering the worst wave of bank fraud in history. Yet there was no prosecution. Essentially in the United States today, financial fraud is de-criminalized. No banker has been sent to jail, despite banks paying hundreds of billions of dollars of fines for financial fraud. These fines are a small portion of what they took illegally. Such payments are merely a cost of doing business. The English language was expanded to recognize junk loans. Before the financial crash the popular press was using the word “junk mortgages” and “Ninjas”: “No Income, No Jobs, no Assets”. So everybody knew that there was fraud, and the bankers knew they would not go to jail, because Wall Street had become the main campaign contributor to the leading politicians, especially in the Democratic party. The Obama Administration came in basically as representatives of the bank fraudsters. And the fraud continues today. The crooks have taken over the banking system. It is hard for Europeans to realize that that this really has happened in America. The banks have turned into gangsters, which is why already in the 1930s President Roosevelt coined the word “banksters”.

I also heard the nice English sayings “Too big to fail” or “Too big to jail”…
But what has become of those 10 million households that ended up losing their homes to foreclosure? How are their economic and living conditions today? What has become of their houses? The economy has recovered…

Most of the houses that were foreclosed on have been bought out by hedge funds for all cash. In the wake of 2008, by 2009 and 2010 hedge funds were saying “If you have $5,000,000 to invest, we’re going to buy these houses that are being sold at distress prices. We’re going to buy foreclosed properties for all cash, because we can make a larger rate of return simply by renting them out.” So there has been a transfer of property from homeowners to the financial sector. The rate of home-ownership in America is dropping.

The economy itself has not recovered. All economic growth since 2008 has accrued only to the top 5% of the economy. 95% of the economy has been shrinking by about 3% per year… and continues to shrink, because the debts were kept in place. President Obama saved the banks and Wall Street instead of saving the economy.

That’s why we live in an “age of deception” as the sub-title of your latest book suggests, I guess?

“People have the idea that when house prices go up, somehow everybody’s getting richer. And it’s true that the entry to the middle class for the last hundred years has been to be able to own your own home…”

What is deceptive is the fact that attention is distracted away from how the real world works, and how unfair it is. Economics textbooks teach that the economy is in equilibrium and is balanced. But every economy in the world is polarizing between creditors and debtors. Wealth is being sucked up to the top of the economic pyramid mainly by bondholders and bankers. The textbooks act as if the economy operates on barter. Nobel prices for Paul Samuelson and his followers treat the economy as what they call the “real economy,” which is a fictitious economy that in theory would work without money or debt. But that isn’t the real economy at all. It is a parallel universe. So the textbooks talk about a parallel universe that might exist logically, but has very little to do with how the real economy works in today’s world.

If you had a picture you’d see me nodding all the time, because that’s what I also found out: if you look at the mathematics, it is polarizing all the time, it is de-stabilizing. Without government interference we’d have crash after crash… It is not under control anymore.

But you also suggest that there’s another factor that makes housing prices go up – and that’s property tax cuts. Why?

“Taxes were shifted off the Donald Trumps of the world and onto homeowners….”

Whatever the tax collector relinquishes leaves more rental income available to be paid to the banks. Commercial real estate investors have a motto: “Rent is for paying interest.” When buyers bid for an office building or a house, the buyer who wins is the one who is able to get the largest bank loan. And that person is the one who pays all the rent to the bank. The reason why commercial investors were willing to do this for so many decades is that they wanted to get the capital gain – which really was the inflation of real estate prices as a result of easier credit. But now that the economy is “loan up,” prospects for further capital gains are gone. So the prices are not rising much anymore. There is no reason to be borrowing. So the system is imploding.

So, how could we change the situation and make land a public utility?

There are two ways to do this. One way is to fully tax the land’s rental value. Public investment in infrastructure – roads, schools, parks, water and sewer systems – make a location more desirable. A subway line, like the Jubilee tube line in London, increases real estate prices all along the line. The resulting rise in rents increases prices for housing. This rental value could be taxed back by the community to pay for this infrastructure. Roads and subways, water and sewer systems could be financed by re-capturing the rental value of the land that this public investment creates. But that is not done. A free lunch is left in private hands.

The alternative is direct public ownership of the land, which would be leased out to whatever is deemed to be most socially desirable, keeping down the rental cost. In New York City, for instance, restaurants and small businesses are being forced out. They’re closing down because of the rising rents. The character of the economy is changing. It is getting rid of the bookstores, restaurants and low-profit enterprises. Either there should be a land tax, or public ownership of the land. Those are the alternatives. If you tax away the land’s rent, it would not be available to be paid to the banks. You could afford to cut taxes on labor. You could cut the income tax, and you could cut taxes on consumption. That would reduce the cost of living.

To me that’s pretty close to the position of Georgists on how to handle land, isn’t it?

I don’t like to mention Henry George, because he didn’t have a theory of land rent or of the role of the financial sector and debt creation. The idea of land tax came originally from the Physiocrats in France, François Quesnay, and then from Adam Smith, John Stuart Mill, and in America from Thorstein Veblen and Simon Patten. All of these economists clarified the analysis of land rent, who ended up with it, and how it should be taxed. In order to have a theory of how much land rent there is to tax, you need a value and price theory. Henry George’s value theory was quite confused. Worst of all, he spent the last two decades of his life fighting against socialists and labor reformers. He was an irascible journalist, not an economist.

The classical economists wrote everything you need to know about land rent and tax policy. That was the emphasis of Adam Smith, John Stuart Mill… all the classical economists. The purpose of their value and price theory was to isolate that part of the economy’s income that was unearned: economic rent, land rent, monopoly rent, and financial interest. I think it is necessary to put the discussion of tax policy and rent policy back in this classical economic context. Henry George was not part of that. He was simply a right-wing journalist whom libertarians use to promote neoliberal Thatcherite deregulation and anti-government ideology. In Germany, his followers were among the first to support the Nazi Party already in the early 1920s, for instance, Adolf Damaschke. Anti-Semitism also marked George’s leading American followers in the 1930s and ‚40s.

So I guess I have to go back a bit further in history, to read the original Physiocrats as well…

John Stuart Mill is good, Simon Patten is good, Thorstein Veblen is wonderful. Veblen was writing about the financialization of real estate in the 1920s in his Absentee Ownership. I recently edited a volume on him: Absentee Ownership and its Discontents (ISLET, Dresden, 2016).

Germany’s land tax reform seems to go in the wrong direction. Germany has to establish new rules for it’s “Grundsteuer” that in fact is a mingled tax on land and the buildings standing on it, based on outdated rateable values of 1964 (in the West) and 1935 (in the East). The current reform proposals of the federal states will maintain this improper mingling and intend a revenue neutral reform of this already very low tax. It brings about 11 billion Euro to the municipal authorities, but this is only 2% of the total German tax revenue, whereas wage tax and sales tax make up for 25% each. We need a complete tax shift, don’t we?

Germany is indeed suffering from rising housing prices. I think there are a number of reasons for this. One is that Germans have not had a real estate bubble like what occurred in the US or England. They did lose money in the stock market, and many decided simply to put their money in their own property. There is also a lot of foreign money coming into Germany to buy property, especially in Berlin.

The only way to keep housing prices down is to tax away the rise in the land value. If this is done, speculators are not going to buy. Only homeowners or commercial users will buy for themselves. You don’t want speculators or bank credit to push up prices. If Germany lets its housing prices rise, it is going to price its labor out of the market. It would lose its competitive advantage, because the largest expense in every wage-earner’s budget is the cost of housing. In Ricardo’s era it was food; today it is housing. So Germany should focus on how to keep its housing prices low.

I’d like to come back to the issue of interest once more. The English title of “Der Sektor” is “Killing the host – How Financial Parasites and Debt Bondage Destroy the Global Economy”. It’s much more coming to the point. It struck me that you mention John Brown. He wrote a book called “Parasitic wealth or Money Reform” in 1898. I came across his book some years ago and thought that he was somehow America’s Helmut Creutz of the 19th century. He was a supporter of Henry George, but in addition John Brown analyzed and criticized the interest money system and its redistribution of wealth. He said that labour is robbed of 33% of its earnings by the parasitic wealth with subtle and insidious methods, so that it’s not even suspected. Why does almost nobody know this John Brown?

John Brown’s book is interesting. It is somewhat like that of his contemporary Michael Flürscheim. Brown’s book was published by Charles Kerr, a Chicago cooperative that also published Marx’s Capital. So Brown was a part of the group of American reformers who became increasingly became Marxist in the 19th and early 20thcentury. Most of the books published by Kerr discussed finance and the exponential growth of debt.

The economist who wrote most clearly about how debt grew by its own mathematics was Marx in Vol. III of Capital and his Theories of Surplus Value . Most of these monetary writers were associated with Marxists and focused on the tendency of debt and finance to grow exponentially by purely mathematical laws, independently of the economy, not simply as a by-product of the economy as mainstream economics pretends.

So you recommend reading his book?

Sure, it is a good book, although only on one topic. Also good is Michael Flürscheim’s Clue to the Economic Labyrinth (1902). So is Vol. III of Capital.

Brown’s plan of reforms included the nationalization of banks and the establishment of a bank service charge in lieu of interest. The latter sounds remarkably up-to-date. In Germany the banks are raising charges because of the decrease in their interest margins. How is your view on the matter of declining interest rates?

Well, today declining interest rates are the aim of central bank Quantitative Easing. It hasn’t helped. The most important question to ask is: what are you going to make your loans for? Most lending at these declining interest rates has been parasitic and predatory. There’s a lot of corporate take-over lending to companies that borrow to buy other companies. There is an enormous amount of stock market credit that has helped bid up stock prices with low-interest credit and arbitrage. This has inflated asset prices for stocks, bonds and real estate. If the result of low interest rates is simply to inflate asset prices, the only way this can work is to have a heavy tax on capital gains, that is asset price gains. But in the US, England, and other countries there are very low taxes on capital gains, and so low interest rates simply make housing more expensive, and make stocks and buying a flow retirement income (in the form of stocks or bonds that yield dividends and interest) much more expensive.

I guess Brown is getting to the positive aspects of low interest also.

What Brown was talking about were the problems of finance. In the final analysis there is only one ultimate solution: to write down the debts. Nobody really wants to talk about debt cancellation, because they try to find a way to save the system. But it can’t be fixed so that debts can keep growing at compound rates ad infinitum. Any financial system tends to end in a crash. So the key question is how a society is NOT going not to pay debts that go bad. Will it let creditors foreclose, as has occurred in the US? Or are you going to write down the debts and wipe out this overgrowth of creditor claims? That’s the ultimate policy that every society has to face.

Very topical, the German Bundesbank sees the combination of low interest rates and a booming housing market as a dangerous cocktail for the banking sector. “The traffic lights have jumped to yellow or even to dark yellow”, Andreas Dombret said, after the Bundesbank had denied the problem in the last years by dismissing it as Germany’s legitimate catch-up effects. The residential property prices have gone up by 30% since 2010, in the major cities even by more than 60%. The share of real estate loans in the total credit portfolio is significantly rising. The mortgage loans of the households have increased in absolute terms as well as relative to their income. It’s only due to the low interest rates that the debt service has not increased yet. But the banks and savings companies are taking on the risk: the mortgages with terms of more than ten years have risen to more than 40% of the residential real estate loans. The interest-change risks lie with the banks. Don’t we have to face up to the truth that interest rates shouldn’t go up again?

What should be raised are taxes on the land, natural resource rent and monopoly rent. The aim should be to keep housing prices low instead of speculation. Land rent should serve as the tax base, as the classical economists said it should. Adam Smith, John Stuart Mill… all urged that the basis of the tax system should be real-estate and natural resource rent, not income taxes (which add to the cost of labor), the cost of labor and not value-added taxes (which increase consumer prices). So tax policy and debt write-downs today are basically the key to economic survival.

Banking should be a public utility. If you leave banking in the present hands, you’re leaving it in the hands of the kind of crooks that brought about the financial crisis of 2008.

Couldn’t the subprime-crisis have been prevented if the Fed had introduced negative interest rates in the 1990s?

No. The reason there was the crash was fraud and speculation. It was junk mortgages and the financialization of the economy. Pension funds and people’s savings were turned over to the financial sector, whose policy is short-term. It seeks gains mainly by speculation and asset price inflation. So the problem is the financial system. I think the Boeckler foundation has annual meetings in Berlin that focus on financialization and explain what the problem is.

Yes, that’s a big topic. The financial sector is interested, as you said, in short-term gains, but people who want to save for their retirement are interested in long-term stability – that is contradictory. Do you know the “Natural Economic Order by Free Land and Free Money” by Silvio Gesell?

It is not practical for today’s world, it is very abstract. The solution to the financial problem really has to be ultimately a debt write-down, and a shift to the tax system, as the classical economists talked about.

Gesell was also advocating the taxing of land. I think he had something in mind with bidding for the land, letting the market fix the prices.

He did not go beneath the surface to ask what kind of market do you want. Today, the market for real estate is a financialized market. As I said, the basic principle is that most rent is paid out as interest. The value of real estate is whatever a bank will lend against it. Unless you have a theory of finance and the overall economy, you really don’t have a theory of the market.

You are advocating a revival of classical economics. What did the classical economists understand by a free economy?

They all defined a free economy as one that is free from land rent, free from unearned income. Many also said that a free economy had to be free from private banking. They advocated full taxation of economic rent. Today’s idea of free market economics is the diametric opposite. In an Orwellian doublethink language, a free market now means an economy free for rent extractors, free for predators to make money, and essentially free for financial and corporate crime. The Obama Administration de-criminalized fraud. This has attracted the biggest criminals – and the wealthiest families – to the banking sector, because that’s where the money is. Crooks want to rob banks, and the best way to rob a bank is to own one. So criminals become bankers. You can look at Iceland, at HSBC, or at Citibank and Wells-Fargo in the news today. Their repeated lawbreaking and criminal activities have been shown to be endemic in the US. But nobody goes to jail. You can steal as much money as you want, and you’ll never go to jail if you’re a banker and pay off the political parties with campaign contribution. It’s much like drug dealers paying off crooked police forces. So crime is pouring into the financial system.

I think this is what’s going to cause a return to classical economics – the realization that you need government banks. Of course, government banks also can be corrupted, so you need some kind of checks and balances. What you need is an honest legal system. If you don’t have a legal system that throws crooks in jail, your economy is going to be transformed into something unpleasant. That’s what is happening today. I think that most Europeans don’t want to acknowledge that that’s what happened in America (USA). There is such an admiration of America that there is a hesitancy to see that it has been taken over by financial predators (a.k.a. “the market”).

We always hear that oligarchies are in the east, in Russia, but hardly anyone is calling America an oligarchy… although alternative media says that it’s just a few families that rule the country.

Yes.

 

Michael Hudson is the author of Killing the Host (published in e-format by CounterPunch Books and in print by Islet). His new book is J is For Junk Economics. He can be reached at mh@michael-hudson.com

 

The Cost of Resistance

Posted on by
3

 

(Museum of the Revolution, León, Nicaragua)

By Chris Hedges

Source: TruthDig

Resistance entails suffering. It requires self-sacrifice. It accepts that we may be destroyed. It is not rational. It is not about the pursuit of happiness. It is about the pursuit of freedom. Resistance accepts that even if we fail, there is an inner freedom that comes with defiance, and perhaps this is the only freedom, and true happiness, we will ever know. To resist evil is the highest achievement of human life. It is the supreme act of love. It is to carry the cross, as the theologian James Cone reminds us, and to be acutely aware that what we are carrying is also what we will die upon.

Most of those who resist—Sitting Bull, Emma Goldman, Malcolm X and Martin Luther King Jr.—are defeated, at least in the cold calculation of the powerful. The final, and perhaps most important quality of resistance, as Cone writes, is that it “inverts the world’s value system.” Hope rises up out of defeat. Those who resist stand, regardless of the cost, with the crucified. This is their magnificence and their power.

The seductive inducements to conformity—money, fame, prizes, generous grants, huge book contracts, hefty lecture fees, important academic and political positions and a public platform—are scorned by those who resist. The rebel does not define success the way the elites define success. Those who resist refuse to kneel before the idols of mass culture and the power elites. They are not trying to get rich. They do not want to be part of the inner circle of the powerful. They accept that when you stand with the oppressed you get treated like the oppressed.

The inversion of the world’s value system makes freedom possible. Those who resist are free not because they have attained many things or high positions, but because they have so few needs. They sever the shackles used to keep most people enslaved. And this is why the elites fear them. The elites can crush them physically, but they cannot buy them off.

The power elites attempt to discredit those who resist. They force them to struggle to make an income. They push them to the margins of society. They write them out of the official narrative. They deny them the symbols of status. They use the compliant liberal class to paint them as unreasonable and utopian.

Resistance is not, fundamentally, political. It is cultural. It is about finding meaning and expression in the transcendent and the incongruities of life. Music, poetry, theater and art sustain resistance by giving expression to the nobility of rebellion against the overwhelming forces, what the ancient Greeks called fortuna, which can never ultimately be overcome. Art celebrates the freedom and dignity of those who defy malignant evil. Victory is not inevitable, or at least not victory as defined by the powerful. Yet in every act of rebellion we are free. It was the raw honesty of the blues, spirituals and work chants that made it possible for African-Americans to endure.

Power is a poison. It does not matter who wields it. The rebel, for this reason, is an eternal heretic. He or she will never fit into any system. The rebel stands with the powerless. There will always be powerless people. There will always be injustice. The rebel will always be an outsider.

Resistance requires eternal vigilance. The moment the powerful are no longer frightened, the moment the glare of the people is diverted and movements let down their guard, the moment the ruling elites are able to use propaganda and censorship to hide their aims, the gains made by resisters roll backward. We have been steadily stripped of everything that organized working men and women—who rose up in defiance and were purged, demonized and killed by the capitalist elites—achieved with the New Deal. The victories of African-Americans, who paid with their bodies and blood in making possible the Great Society and ending legal segregation, also have been reversed.

The corporate state makes no pretense of addressing social inequality or white supremacy. It practices only the politics of vengeance. It uses coercion, fear, violence, police terror and mass incarceration as social control. Our cells of resistance have to be rebuilt from scratch.

The corporate state, however, is in trouble. It has no credibility. All the promises of the “free market,” globalization and trickle-down economics have been exposed as a lie, an empty ideology used to satiate greed. The elites have no counterargument to their anti-capitalist and anti-imperialist critics. The attempt to blame the electoral insurgencies in the United States’ two ruling political parties on Russian interference, rather than massive social inequality—the worst in the industrialized world—is a desperate ploy. The courtiers in the corporate press are working feverishly, day and night, to distract us from reality. The moment the elites are forced to acknowledge social inequality as the root of our discontent is the moment they are forced to acknowledge their role in orchestrating this inequality. This terrifies them.

The U.S. government, subservient to corporate power, has become a burlesque. The last vestiges of the rule of law are evaporating. The kleptocrats are pillaging and looting like barbarian hordes. Programs instituted to protect the common good—public education, welfare and environmental regulations—are being dismantled. The bloated military, sucking the marrow out of the nation, is unassailable. Poverty is a nightmare for half the population. Poor people of color are gunned down with impunity in the streets. Our prison system, the world’s largest, is filled with the destitute. And presiding over the chaos and the dysfunction is a political P.T. Barnum, a president who, while we are being fleeced, offers up one bizarre distraction after another, much like Barnum’s Feejee mermaid—the head and torso of a monkey sewed to the back half of a fish.

There is no shortage of artists, intellectuals and writers, from Martin Buber and George Orwell to James Baldwin, who warned us that this dystopian era was fast approaching. But in our Disneyfied world of intoxicating and endless images, cult of the self and willful illiteracy, we did not listen. We will pay for our negligence.

Søren Kierkegaard argued that it was the separation of intellect from emotion, from empathy, that doomed Western civilization. The “soul” has no role in a technocratic society. The communal has been shattered. The concept of the common good has been obliterated. Greed is celebrated. The individual is a god. The celluloid image is reality. The artistic and intellectual forces that make transcendence and the communal possible are belittled or ignored. The basest lusts are celebrated as forms of identity and self-expression. Progress is defined exclusively by technological and material advancement. This creates a collective despair and anxiety that feeds and is fed by glitter, noise and false promises of consumer-culture idols. The despair grows ever-worse, but we never acknowledge our existential dread. As Kierkegaard understood, “the specific character of despair is precisely this: it is unaware of being despair.”

Those who resist are relentlessly self-critical. They ask the hard questions that mass culture, which promises an unachievable eternal youth, fame and financial success, deflects us from asking. What does it mean to be born? What does it mean to live? What does it mean to die? How do we live a life of meaning? What is justice? What is truth? What is beauty? What does our past say about our present? How do we defy radical evil?

We are in the grip of what Kierkegaard called “sickness unto death”—the numbing of the soul by despair that leads to moral and physical debasement. Those who are ruled by rational abstractions and an aloof intellectualism, Kierkegaard argued, are as depraved as those who succumb to hedonism, cravings for power, violence and predatory sexuality. We achieve salvation when we accept the impediments of the body and the soul, the limitations of being human, yet despite these limitations seek to do good. This burning honesty, which means we always exist on the cusp of despair, leaves us, in Kierkegaard’s words, in “fear and trembling.” We struggle not to be brutes while acknowledging we can never be angels. We must act and then ask for forgiveness. We must be able to see our own face in the face of the oppressor.

The theologian Paul Tillich did not use the word “sin” to mean an act of immorality. He, like Kierkegaard, defined sin as estrangement. For Tillich, it was our deepest existential dilemma. Sin was our separation from the forces that give us ultimate meaning and purpose in life. This separation fosters the alienation, anxiety, meaninglessness and despair that are preyed upon by mass culture. As long as we fold ourselves inward, embrace a perverted hyper-individualism that is defined by selfishness and narcissism, we will never overcome this estrangement. We will be separated from ourselves, from others and from the sacred.

Resistance is not only about battling the forces of darkness. It is about becoming a whole and complete human being. It is about overcoming estrangement. It is about the capacity to love. It is about honoring the sacred. It is about dignity. It is about sacrifice. It is about courage. It is about being free. Resistance is the pinnacle of human existence.

Gaius Publius: Defining Neoliberalism

Posted on by
3

By Yves Smith

Source: Naked Capitalism

For years I’ve been using the term “neoliberalism” (or sometimes neo-liberalism*) and I’m always uncomfortable, since it sounds so academic. So I usually add one-phrase definitions and move on. For example, this from a recent piece on Puerto Rico:

If neoliberalism is the belief that the proper role of government is to enrich the rich — in Democratic circles they call it “wealth creation” to hide the recipients; Republicans are much more blatant — then the “shock doctrine” is its action plan.

That’s sounds pretty blunt, but it’s a true statement, even among academics. See this great interview (start at about 6:15) with Professor Philip Miroski of the University of Notre Dame on how modern neoliberals have come to see the role of government in society. It’s weedy but excellent.

I want to offer our readers a better description of neoliberalism though, yet not get into too many weeds. So consider these excerpts from a longer Guardian essay by the British writer George Monbiot. (My thanks to Naked Capitalism commenter nonclassical for the link and the idea for this piece.)

Neoliberalism — The Invisible Water the West Is Swimming In

We’ll start with Monbiot’s brief intro, just to set the scope of the problem:

Imagine if the people of the Soviet Union had never heard of communism. The ideology that dominates our lives has, for most of us, no name. Mention it in conversation and you’ll be rewarded with a shrug. Even if your listeners have heard the term before, they will struggle to define it. Neoliberalism: do you know what it is?

Ask people to define “neoliberalism,” even if they’ve heard of it, and almost no one can. Yet the comparison of our governing ideology to that of the Soviet Union’s is a good one — like “communism,” or the Soviet Union’s version of it, neoliberalism defines and controls almost everything our government does, no matter which party is in office.

The Birth of Neoliberalism

What is neoliberalism and where did it come from? Monbiot writes:

The term neoliberalism was coined at a meeting in Paris in 1938. Among the delegates were two men who came to define the ideology, Ludwig von Mises and Friedrich Hayek. Both exiles from Austria, they saw social democracy, exemplified by Franklin Roosevelt’s New Deal and the gradual development of Britain’s welfare state, as manifestations of a collectivism that occupied the same spectrum as nazism and communism.

Neoliberalism is an explicit reaction to Franklin Roosevelt and the welfare state, which by a quirk of history was called “liberalism” at the time, even though, in the nineteenth century, “liberalism” had roughly the same meaning that “neoliberalism” has today. In other words, “FDR liberalism” is in many ways the opposite of classical “liberalism,” which meant “liberty (freedom) from government,” and a quirk of history has confused these terms.

Back to Monbiot and Hayek:

In The Road to Serfdom, published in 1944, Hayek argued that government planning, by crushing individualism, would lead inexorably to totalitarian control. Like Mises’s book Bureaucracy, The Road to Serfdom was widely read. It came to the attention of some very wealthy people, who saw in the philosophy an opportunity to free themselves from regulation and tax. When, in 1947, Hayek founded the first organisation that would spread the doctrine of neoliberalism – the Mont Pelerin Society – it was supported financially by millionaires and their foundations.

With their help, he began to create what Daniel Stedman Jones describes in Masters of the Universe as “a kind of neoliberal international” [a term modeled on “the Communist International]: a transatlantic network of academics, businessmen, journalists and activists. The movement’s rich backers funded a series of thinktanks which would refine and promote the ideology. Among them were the American Enterprise Institute, the Heritage Foundation, the Cato Institute, the Institute of Economic Affairs, the Centre for Policy Studies and the Adam Smith Institute. They also financed academic positions and departments, particularly at the universities of Chicago and Virginia.

As it evolved, neoliberalism became more strident. Hayek’s view that governments should regulate competition to prevent monopolies from forming gave way – among American apostles such as Milton Friedman – to the belief that monopoly power could be seen as a reward for efficiency.

Note the mention of Milton Friedman above. Neoliberalism is a bipartisan ideology, not just a Clintonist-Obamist one.

Democrats, Republicans and Neoliberalism

As Monbiot explains, for a while neoliberalism “lost its name” and was more or less a fringe ideology in a world still dominated by the ideas of John Maynard Keynes and Keynesian economics. When neoliberalism later came back strong in the Republican Party, it wasn’t called “neoliberalism” but “Milton Friedman free market conservativism,” or something similar.

Only when Bill Clinton and his Democratic Party allies adopted it in the 1980s did the term “neoliberal” re-emerge in public discourse.

[I]n the 1970s, when Keynesian policies began to fall apart and economic crises struck on both sides of the Atlantic, neoliberal ideas began to enter the mainstream. As Friedman remarked, “when the time came that you had to change … there was an alternative ready there to be picked up”. With the help of sympathetic journalists and political advisers, elements of neoliberalism, especially its prescriptions for monetary policy, were adopted by Jimmy Carter’s administration in the US and Jim Callaghan’s government in Britain.

After Margaret Thatcher and Ronald Reagan took power, the rest of the package soon followed: massive tax cuts for the rich, the crushing of trade unions, deregulation, privatisation, outsourcing and competition in public services. Through the IMF, the World Bank, the Maastricht treaty and the World Trade Organisation, neoliberal policies were imposed – often without democratic consent – on much of the world. Most remarkable was its adoption among parties that once belonged to the left: Labour and the Democrats, for example. [emphasis added]

Note the role of Jimmy Carter and start of deregulation in the late 1970s. For that reason, many consider Jimmy Carter to be the “proto-neoliberal,” both for the nation and the Democratic Party.

Neoliberalism — “Just Deserts” for Predators and Prey

What makes “neoliberalism” or “free market conservatism” such a radical — and destructive — ideology? It reduces all human activity to economic competition. It creates and glorifies, in other words, a world of predators and prey, a world like the one we live in as today:

Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that “the market” delivers benefits that could never be achieved by planning.

In a world where competition is right and good, a world in which the “market” is the defining metaphor for human activity, all social ties are broken, the individual is an atom left to survive as an individual only, the strongest relentlessly consume the weakest — and that’s as it should be. (It’s easy to imagine how the apex predators of our social order would be attracted to this, and insist on it with force.

Thus the bipartisan world we live in today. Under a neoliberal regime, everyone gets what they deserve. Big fish deserve their meal. Little fish deserve their death. And government sets the table for the feast.

The Role of Government in a Neoliberal World

Since for neoliberals, the “market” is the source of all that is good in human interaction, non-interference in “the market” is rule one for government.

Over time that has changed, however, as winners have grown more successful and their control of government more absolute. The proper role of government in today’s neoliberal regime is not merely to allow the market to operate for the benefit of wealth-holders; it’s to make sure the market operates for the benefit of wealth-holders.

In other words, the role of government is to intervene in the market on behalf of wealth-holders, or, as I put it more colloquially, to proactively enrich the rich. The interview with Professor Mirowski, as I noted above, makes that same point, but from an academic standpoint.

From this it should be also clear that until we free ourselves of rule by neoliberals and the pain and misery they create, we’ll always be victims to the predatory giants — the very very wealthy and the corporations they use as power-extenders — those, in other words, who want merely to own everything else in the world.

This means we need to free ourselves from neoliberals in both parties, not just the ones in current seats of power. But that idea seems to have been excised from most discussions these days. Fair warning though. If the Age of Trump ends with the Restoration of Mainstream Democrats, we’ll have won almost nothing at all.

____________

* I sometimes spell “neo-liberalism” with the hyphen to suggest the following connection: Neo-liberalism is “new liberalism,” and has the same relationship to FDR liberalism as New Labour has to Labour — the two are exactly opposite.

What You May Not Know About Today’s Economic War

Posted on by
1

By Phil Butler

Source: New Eastern Outlook

Many people believe the world is spiraling in a downward freefall toward Armageddon. At the same time billions on Earth feel the sting of crippling poverty, sanctions, and austerity imposed by the elites – the numbers of billionaires have risen geometrically. And so have those billionaire’s profits. It’s time we took a closer look at where we stand as of 2018, if we are to be left anything at all to cling to. From the steppes of Russia to the ancient lands of the Minoans, economic terror now reigns.

When I left Germany for Greece several months ago, the common belief there was that the “lazy Greeks” were part of the cause of Deutsche banker discomfort. My neighbors in Germany’s oldest city of Trier honestly believe the bailout of Greece is because Greeks unwilling to work hard. The bitter irony of this believe lies in the fact the average German would melt under the workload of the average citizen here in Heraklion on Crete. As an American what I witnessed in Germany can only be considered a “part-time” employment state. But here in Greece the average person works seven days a week, and usually at more than one job. This microeconomic perception is one that has been implanted by state and corporate controlled media in Germany. There’s a very good reason for this, which I will now explain.

A New Secret Economic Weapon – Organized Failures

The International Monetary Fund, the German and American bankers, the globalist elites who control financial systems in the so-called “west” – they’ve been on a mission since 2008. The “meltdown” of markets when Barack Obama first took office as American president was not some random and chaotic economic mistake. Wall Street and the global markets were turned upside down on purpose. In his book “Secret Weapon”, the CEO of Freeman Global Holdings and a New York Times bestselling author Kevin Freeman presents a persuasive chain of evidence pointing to the fact the crash of September 2008 was the result of a deliberate and well-prepared act of sabotage. Even though the author blames competing governments like China and Iran for what he terms “economic terrorism”, his proofs and theories are correct in so far as the “meltdown” being on purpose. The fact Freeman is founder and chairman of the NSIC Institute, and a Senior Fellow of the Center for Security Policy suggests his work may be a double dealing by the financial community to obscure the real perpetrators. But for my report it’s more important to follow the trail of financial chaos to our financial reality.

Freeman is not alone in his suggestion the economic crisis was a conspiracy. The financial disaster of 2008 costs Americans nearly $20 trillion dollars, as framed in this Forbes piece by investment banker and former Forbes editor, Robert Lenzner. In the report the financial guru inadvertently points the finger at Goldman Sachs and Citigroup, claiming the Greenspan Treasury allowed them to “master their own appetite for profits,” which in turn led to the various collapses that forced the American people to bail out the banks. Lenzner, to his great credit, goes on to describe the lurking dangers for total collapse we still face. But what about Greece, the rest of Eastern Europe, the Germans and the rest of the indebted world? Who can we blame for destroying the futures of a billion people? When I’m done your come to realize the Nazis never lost World War II. Read on.

Win-Win or Lose-Lose for Ukraine

Ukraine was turned into a “scorched Earth” when Hitler’s operation Barbarossa threatened Russia. When the armies commanded by Joseph Stalin during the German Army’s invasion of the Soviet Union in the Second World War destroyed crops and goods in their path, the invaders found nothing to fuel their advance. Today Ukraine is laid waste by an economic Barbarossa where the Russians had no opportunity to defend the steppes. Some will remember Vice President Joe Biden’s son taking a position to reap Ukrainian energy benefits. Other readers may recall when a Franklin Templton investment fund, one controlled by the Rothschild bankers, bought up 20% of Ukraine’s debts at junk bond prices. You see, the US orchestrated situation in Ukraine is not simply about events on the Maidan and the ongoing war in the Donbass as a byproduct of the geopolitics of the United States seeking to cut off Ukraine from Russia. Agri-giant Monsanto and other GMO companies had targeted Ukraine long before the events on Maidan Square, and the fact Ukraine is a Central hub in the supply of Russian gas to Europe cannot be under-stressed. Where foreign profiteering in Ukraine is concerned, this story on my blog tells of an Oakland Institute report where more than 1.6 million hectares of land in Ukraine went under the control of foreign-based corporations. This quote from the report makes my case for economic terrorism by the west for me:

“International financial institutions swooped in on the heels of the political upheaval in Ukraine to deregulate and throw open the nation’s vast agricultural sector to foreign corporations….Monsanto, Cargill, and DuPont, and how corporations are taking over all aspects of Ukraine’s agricultural system.”

These stories were more than two years ago. Today we see the catastrophic effects of the Euromaidan far from the battle front and the Donbass region’s pro-Russian separatists.

When I first learned that the forests in the Ukrainian Carpathians were being chopped to the ground back in 2016, the impending ecological disaster perpetrated by these globalist blood suckers hit home hard. This Counterpunch story tells the tale of a brand of liberty and democracy no Ukrainian can afford. Despite the aerial photos and other proofs Ukraine’s forests were being stolen from under the people, the Lviv Regional Forestry and Hunting Agency denied all such reports in customary Eastern European mafia form. The fact is, the Petro Poroshenko assisted in selling out Carpathian forests. Ecologists now predict an ecological Armageddon for western Ukraine. These photos from Censor.net prove the disaster in progress. This RT story on the firesale by the Poroshenko regime of 22 out of 34 state assets being put up for sale at a 60 percent discount leads us into the Greece situation, where the legacy of a people is up for grabs.

Those lazy Greeks! Funny, I just walked around the corner to the bakery here in Heraklion to get a coffee from the same lady I get coffee from every day. She was there Christmas, and I am sure she’ll be there behind the counter New Year’s Eve and New Year’s Day. The shopkeeper across the street, he sees Alexis Tsipras on TV and shoves an open hand toward Greece’s Prime Minister shouting; “Malaka!”, which can only be translated coldly as “jerk-off”. Also in the hotel lobby, at the donut house in the city center, and at each-and-every shop along Heraklion’s many retail districts, Greece officials are all Malakas (in ancient Greek – mentally ill) or worse. I’ll bet most Germans don’t know or care to know that the VAT in Greece is now 24%, and that the average shopkeeper pays 37% – 45% in income tax on top of the VAT for the goods they purchase. As crazy as it sounds though, Cretans are still especially friendly toward foreigners like me. If they only know what the German and American bankers did to them.

The Greece Fire Sale – A Tsipras Sellout

I just made a report about the great Greek sellout of privatization on my travel news site Argophilia Travel News this morning. Researching it prompted me to do this piece for NEO. The long and short of the Greek economic crash that was assisted by none other than Goldman Sachs, is that the same privatization the globalists had in store for Russia during the Yeltsin years is being exacted on Greeks. The latest sellout by Tsipras, who swore he’d end privatization, the Germans and Americans snapping up the Thessaloniki Port and the future of LNG shipments to Europe through Greece. I found it interesting that one of the principals in this sale, South Europe Gateway Thessaloniki (SEFT) Limited Director, Alexander von Mellenthin Has a distinguished German name. I’m not certain, but I believe he is a close relative of both General of the artillery, Horst Alexander, Alfred Paul von Mellenthin, and his brother, Major General Friedrich Wilhelm von Mellenthin, who served as Hitler’s chief of staff of the XXXXVIII Panzer Corps in the occupied Soviet Union, including the Battle of Kursk, the Battle of Kiev, and the spring 1944 retreat through the western Ukraine. The term “irony” will simply not do if Mellenthin is the son or grandson of a key Nazi general. Financial Blitzkrieg, Financial Armageddon, and the Fourth Reich finalizing the rape of Greece! Wow.

Regardless of whether or not the kin of old Nazis are expanding the Fourth Reich or not, the fact the European Commission, the International Monetary Fund and the European Central Bank have insisted on Greek and other privatization schemes as a condition for much-needed loans for bailouts is a smoking gun held by the same elites who always fuel wars. The fallacy of the “lazy Greek” lives on because of those who would reap the vast financial rewards of yet another deconstructed economy. It’s no coincidence that the Greek privatization plan’s administrator — the Hellenic Republic Asset Development Fund (TAIPED) — so closely resembles Germany’s Treuhandanstalt, or the agency charged with the privatization of East Germany’s state-owned enterprises following unification. Few readers will recall Treuhandanstalt being accused of turning over to West German big business hundreds of billions of Deutsche Marks in national property for little or nothing. And, though a number of Treuhandanstalt managers were ultimately indicted for corruption and embezzlement, this brand of pillaging has escalated in the Greece situation. There was even a plan back in 2014 to convert much of Greece’s protected coastal areas into “composite tourist villages,” a move which would essentially privatize every inch of valuable Greek seaside. Former Greek Finance Minister, Yanis Varoufakis called the Treuhandanstalt-like plan for Greece “an abomination” in this Huff Post piece. Varoufakis, who resigned on principle from the Tsipras administration, goes on to frame the Greek debt debauchery, describing the real IMF scheme:

“The plan is politically toxic, because the fund, though domiciled in Greece, will effectively be managed by the troika. It is also financially noxious, because the proceeds will go toward servicing what even the IMF now admits is an unpayable debt. And it fails economically, because it wastes a wonderful opportunity to create homegrown investments to help counter the recessionary impact…”

Yanis Varoufakis proposed to the Germans and the Rothschild bankers of Luxembourg and Frankfurt a Greek plan for repayment of the staggering debt the Goldman Sachs bankers helped usher into Greece. But the IMF and the new Reich refused, of course. His plan was for Greece to cooperate via its own newly formed central holding company for some Greek assets. The IMF and the banksters would have nothing of it, they needed complete control of what, and for how much Greece was to be auctioned off. Tsipras betrayed his country, and the only decent politician the Greeks have had in decades stepped down.