Mobility, Meritocracy and Other Myths

Posted on August 16, 2016 by Reid Mukai

By Kevin Carson

At the American Enterprise Institute, Mark Perry (“Yes, America’s middle class has been disappearing… into higher income groups,” Dec. 17) justifies the shrinking middle class and growing economic inequality by citing the finding of a recent Pew Institute study that of the 11% shrinkage in the American middle class, 7% have gone to the top and only 4% to the bottom.

First, movement between strata doesn’t legitimize stratification if the structure itself is illegitimate. Meritocracy is a legitimizing myth created to distract people from the question of whether the system of power those meritocratic functionaries serve is just. As Chris Dillow, an unorthodox British Marxist economist, observed (“Beyond social mobility,” Stumbling and Mumbling, Dec. 19):

“Imagine a dictator were to imprison his people, but offer guard jobs to those who passed exams, and well-paid sinecures to those who did especially well. We’d have social mobility — even meritocracy and equality of opportunity. But we wouldn’t have justice, freedom or a good society. They all require that the prisons be torn down.”

Also note that what’s called the “upper class” in the study includes not only the super-rich rentier classes and people in the C-Suites with million-dollar salaries, but also most of the larger managerial stratum. There’s a good reason this stratum has expanded from 14% to 21% of the general population. As David Gordon argued in Fat and Mean, it was the neoliberal decision in the ’70s to cap real hourly wages and shift a greater share of income upwards to rentiers and cowboy CEOs that resulted in increasing internal authoritarianism in the corporation and a need for a larger class of overseers to monitor the (understandably) increasingly disgruntled work force.

And despite the increased income of the managerial classes, the great bulk of them are still salaried employees whose income depends on the ongoing approval of their superiors. That 14-21% of the population is more or less what Orwell, in 1984, called the “middle” stratum (represented in the story by the Inner Party to which Winston and Julia belonged). Here’s how Orwell described the same general type in the corporate England of his day in another novel, Coming Up for Air: “in every one of those little stucco boxes there’s some poor bastard who’s never free except when he’s fast asleep…”

Not only do these people continue to collect their managerial salary at the good pleasure of the senior oligarchs of the corporate hierarchy, but to even have a shot at that management pay in the first place they’ve got to put themselves in a position of student debt peonage that will likely eat up a major part of that increased income for years (along with a mortgage that means they’ll really be renting their house from the bank into old age). Add to that the long hours middle management types have to work coupled with the endless bureaucratic toadyism and sycophancy required of them, and the ongoing precarity of their position.

Getting back to the issue of legitimacy, there’s also the fact that the functions exercised by most of these managerial types are illegitimate and would be unnecessary absent an exploitative class society. They are, in anarchist anthropologist David Graeber’s famous phrase, “b***s*** jobs.” They exist because the American state, in league with corporate capital, has cartelized the economy under the control of bureaucratic hierarchies many times larger than the point of declining returns in efficiency, and because the authoritarian nature of those hierarchies and the rent-seeking nature of their management creates a conflict of interest that necessitates intensified surveillance and control.

The late Joe Bageant aptly described the nature of the work these people perform: “The empire needs… about 20-25% of its population… to administrate and perpetuate itself — through lawyers, insurance managers, financial managers, college teachers, media managers, scientists, bureaucrats, managers of all types and many other professions and semi-professions.”

When workers own the firm and manage their own work, as in the recuperated enterprises of Argentina, not only can workers be trusted to use their own superior knowledge of the work process but what little coordinating costs remain are a small fraction of U.S. corporate administrative costs. In fact eliminating all those management salaries solved the unit costs problem at one stroke.

The upper quintile is growing in size and income because all the value created by actual productive workers in the lower quintiles gets extracted by those at the top. When the top classes rob everybody else, they need a lot more guard labor to keep their stolen loot secure.

And whether or not there’s been an increase in the real income of the lower four strata, production workers’ loss of control over the work force and increased precarity is even worse than that of those middle managers in the top 21%. Whether for production workers or middle management, stress correlates directly with powerlessness.

We don’t need meritocracy. We need justice.

The Rise of the Corporatocracy

Posted on August 12, 2016 by Reid Mukai

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By Graham Vanbergen

Source: The European Financial Review

Transnational corporations are wreaking havoc on financial, economic, social and ecological systems in a creeping colonisation of public life where just 147 organisations now controls 40 per cent of global trade.

We all have a feeling that something is not quite right any more. We know there is a creeping colonisation of public life by corporations because we know a slow motion coup d’état is taking place by transnational organisations facilitated by our political leaders. The incontrovertible proof stares at us in the face every day with wave after wave of financial, economic, social and ecological crisis.

A clear and troublesome picture of corporate power has emerged in recent years where rising inequality is now simply the distinction of expanding corporate activity and those being left behind.

A study in 2000 by Corporate Watch, Global Policy Forum and the Institute for Policy Studies (IPS) revealed some alarming facts about a rising corporatocracy that should have been brought to heel by western government’s years ago. Instead, corporations are now literally at the helm.

At the turn of the millennia this study confirmed that whilst there were around 40,000 worldwide corporations, just 200 had true global reach and influence. These colossal organisations, many larger than national economies controlled well over one quarter of global economic activity whilst 80 per cent of the world’s population were either left out completely, marginalised or were net losers as a direct result of their activities.¹

The decade long IPS study made for very uncomfortable reading. The most alarming amongst a long list of culpability is that as corporate profits soared – wealth concentration followed, and it did so in an environment of stagnating workers wages.

For perspective, the report highlighted that of the 100 largest economies in the world, 51 were corporations; only 49 were countries. Wal-Mart for example, was bigger than 161 countries. Mitsubishi was larger than the fourth most populous nation on earth: Indonesia. General Motors was bigger than Denmark. Ford was bigger than South Africa.

The top 200 corporations were bigger than the combined economies of 182 countries and have twice the economic influence than 80 per cent of all humanity.

You might find it something of a surprise to learn that these same 200 global corporations employed less than one third of one per cent of the world’s people – just 18.8 million.

Trading, automobiles, banking, retailing and electronics are where most corporate concentration accumulates and even then one third of all trade is transactions among various units of the same corporation.

By 2012, the top 25 corporations in the world were earning $177,000 per second with Wal-Mart’s annual revenue having risen to $470 billion.

Today the outlook is even worse. Three mathematicians at Zurich Polytechnic Institute published a quite remarkable in-depth report on transnational corporations (TNCs) according to their connections to other TNCs. Beginning with a data base that has now grown to 43,000 corporations, they refine the ownership connections, up and downstream and highlight the most interconnected of these companies. Finally, they arrive at a “core” of 147 companies that now controls an astonishing 40 per cent of the economic value of the entire sample and therefore, global trade.

In little more than a decade, TNCs share of the global market place has increased dramatically whilst competition fell by almost the same factor.

And yet, armed with such damning and conclusive information, the situation continues to deteriorate as politicians abandon any fragments of morality in favour of lucrative revolving door careers leaving entire nations with little more than the hollowed out remains of once thriving economies based on manufacturing and the corpse of democracy.

In the late 1970’s the share of economic value going to labour in the form of wages in Europe was around 70 per cent of GDP. Over the decades there has been a dire shift. Capital has had a very favourable 10 per cent rise in returns and by contrast labour a 10 per cent fall. With an economy worth €13 trillion, the loss to an already stretched working and middle class is €1.3 trillion a year. Shareholders used to be content with returns of say 3 or 4 per cent but now demand near on double digit returns or the CEO is ousted. The consequence being that corporations want to win no matter what the cost.

In Susan George’s “State of Corporations” the observation is made that “From the mid-1990s, the largest American banking, securities, insurance and accounting transnational corporations joined forces and, employing 3000 people, spent $5 billion to get rid of all the New Deal laws passed under the Roosevelt administration in the 1930s – the very laws that had protected the American economy for over sixty years. Through this collective lobbying push, they won total freedom to remove any money-losing assets from their balance-sheets and move them into “shadow” banks that appeared nowhere on their balance sheets. They became free to create and trade hundreds of billions worth of toxic derivative products, such as bundles of sub-prime mortgages, with no regulation whatever.”²

The peak of their collective effort was a global implosion of the finance industry in 2008 and eight years later its lingering state of decline now threatens the Great Depression of 1929 as the longest running recession in history – already the slowest recovery ever recorded.

In the US alone, over 10 million families had their homes repossessed and according to Bloomberg, $14.5 trillion, or 33%, of the value of the world’s companies and nearly 14% of US GDP was wiped out by the crisis. This forgets the effects on developing and third world economies where $3.3 trillion of promised aid remains just that – promised and unpaid.

In the era of “too big to fail and jail” virtually no one was brought to heel or sent to prison for such devastating crimes. Today, the banking industry is almost totally out of control. Daily derivative trading is now a third greater than at the peak of the 2008 crisis. Fraud, rigging, insider dealing and money laundering reach a new summit of lawlessness each day. In the top twenty of global corporations, five are banks.

In the meantime, learning from previous successes, corporate lobbyists now termed “expert committees” meet daily with EU Commission officials to hammer out a trade deal whilst almost no consumer or environmental organisations are represented. Civil society is excluded, as are their representatives in the guise of MEP’s with the illusion of democracy fading fast.

Corporations now place their profits in ultra low or no tax jurisdictions and their losses in high-tax ones, where an estimated $32 trillion is shielded from making any contribution to the societies they extract their wealth from with little or no scrutiny from government’s.

What we now have is anarchy by very rich and powerful corporations. The roll call of shame is never-ending – auto manufacturers, banking, pharmaceutical, food manufacturers, energy industries to name few.

Epic financial crimes, monumental tax evasion, ecological damage on an industrial scale and non-stop illegal wars to ensure a never-ending resource supply is a shameful system based on corporate greed. In its wake we now have 1920’s style rampant inequality and rising poverty reminiscent of the era of Dickens. All of this somehow is the new normal.³

Steal a loaf of bread and it’s prison for you, loot an entire country and it’s a Knighthood. For instance, the British public believes as a result of a long, malicious class-war style political campaign, that benefits fraud is a huge social problem. A recent poll by the workers union TUC showed people believe that 27% of the welfare budget is fraudulently claimed. The figure is in fact 0.7%. As it turns out benefit underpayments by the government outweighs benefit fraud.

Contrast that with one of Britain’s biggest fraudsters – HSBC. In a few short years it has been caught laundering billions of ill-gotten gains on behalf of dictators and despots, international gangsters, traffickers, drug barons, murderers and every other criminal down a particularly odious food chain. It was also caught red-handed in the huge Swiss tax evasion scandal benefitting corporations before we even got to hear of the Panama Papers. The Conservatives gave its boss Stephen Green a plum ministerial role as trade minister in 2011 and he sits in the House of Lords as a Tory peer in an irony lost on themselves and the media.⁴

Globalisation has continually compounded corporate power and consolidated its influential reach on global governance. Again, trade deals such as TTP and TTIP where entire continents are subjected to corporate domination are evidence of that, but their reach has a more sinister outcome. Corporate lobbyists who now have unprecedented privilege granted by global decision makers to sideline sovereign regulations designed to protect citizen rights and the environment have infiltrated the United Nations.

The UN has a special section for corporations called the “Global Compact” founded about fifteen years ago by Kofi Annan and the then President of Nestle. To become a member, a corporation need only sign on for fifteen principles in the areas of human or labour rights and the environment.⁵

The corporations of the Global Compact added themselves to members of the World Business Council for Sustainable Development and other trade bodies such as the Chambers of Commerce. When the UN held its “environmental” conference in Rio 2012, business completely dominated proceedings for the first time. Corporate interests now have a disproportionality high level of political influence on a truly global scale.

A good example would be Cecilia Malmstrom, the lead EU Trade Commissioner of the TTIP negotiations between Europe and the US. She was questioned by a reporter from The Independent a few months back on why she continued her persistent promotion of the deal against such massive public opposition, her response was: “I do not take my mandate from the European people.”⁶

Just a few weeks ago we discover that the European Parliament voted in favour of the “Trade Secrets Protection Directive” – a law that gives corporations alarming new superpowers to prosecute and criminalise whistleblowers, journalists, and news organisations that publish leaked internal documents.

As Dr. Paul Craig Roberts former Assistant Secretary of the US Treasury for Economic Policy and associate editor of the Wall Street Journal put it recently “politically powerful corporations have gained the power in Western “democracies” to sacrifice the welfare of all populations to corporate greed for profit regardless of the cost to peoples, countries, and societies. American “democratic capitalism” is total and irredeemable. TTIP gives corporations unaccountable power over governments and peoples”

Democracy is now on the verge of going from farce to tragedy as a direct result of the indomitable rise of corporate power.

We now live in an era where the fetid reality between rich and poor is demonstrated no better than the rapidly rising inequality of wealth distribution. In 1976 America, the top 1% earned 9 per cent of the national wealth. Thirty years later and their take of national wealth has almost tripled to 24 per cent.⁷

One of the greatest challenges of our time is to understand the influence of transnational corporations over public policy and how we can engineer a form of capitalism that benefits a wider range of people whilst wrestling social and environmental injustice back into the safe arms of a fully functional democracy.

Currently, the only thing left in opposition now is a general public under siege who protest in cities across Europe and America and present petitions to their respective governments representing millions of citizens. These are the same people who have to pay for all this (legalised) criminality in lost services, employment and savings, yet remain unheard.

References
1. The rise of corporations – Global Policy Forum https://www.globalpolicy.org/component/content/article/221/47211.html
2. Susan George – State of Corporations
3. https://www.tni.org/sites/www.tni.org/files/download/state_of_corporation_chapter.pdf
4. UK has poorest people in Western Europe
5. http://www.ibtimes.co.uk/uks-poorest-among-most-financially-stricken-europe-1452895
6. HSBC’s Stephen Green appointed trade minister amid banking scandal
7. http://www.independent.co.uk/news/business/news/hsbc-scandal-banks-former-boss-stephen-green-resigns-from-uk-finance-lobbying-group-10046438.html
8. UN infiltrated by corporations
9. https://www.unglobalcompact.org/docs/news_events/9.1_news_archives/2013_12_06/Secretary-GeneralReportA68326.pdf
10. Head of EU TTIP negotiations quote
11. Wealth inequality in America – VIDEO

SMARTPHONES, SOCIAL MEDIA AND SLEEP: THE INVISIBLE DANGERS OF OUR 24/7 CULTURE

Posted on July 31, 2016 by Reid Mukai

By Martijn Schirp

Source: High Existence

If there is one book to read about our addictions to work, phones, consumption, and the current state of capitalism, it’s 24/7: Late Capitalism and the Ends of Sleep by Jonathan Crary, a professor of Modern Art & Theory at Columbia University. Crary argues that sleep is a standing affront to capitalism and while that seems grim, it highlights the very real dark sides of always having glowing LED screens clutched in our hands.

Technology has ushered us into a 24/7 state: we live in a world that never stops producing and is infinitely connected. We have digital worlds in our pockets, and we carry our phones and screens everywhere, feeding our dopamine addictions when we’re bored or lonely, cradling us before bed with endless scrolls of news and waking us up with notifications and emails.

The barrier between work and home life has disappeared, and most professionals are able to and choose to continue working all hours of the day in an increasingly competitive, winner-take-all environment.

Most of our time then, is either spent working or consuming (the upside of working so much is money, which is then used to consume): food, drugs, shopping, films, Youtube videos, Instagram feeds, news articles, updates from friends — even socializing-time has been reduced to a passive “Netflix & Chill”.

There are now very few significant interludes of human existence (with the colossal expectation of sleep) that have not been penetrated and taken over as work time, consumption time, or marketing time.

The social-world and the work-world are both digitized, which makes it increasingly difficult to distinguish between the two, and beyond the pop-ups and video ads, individuals have become their own marketers. Building a “personal brand” as a living is not uncommon.

It is only recently that the elaboration, the modeling of one’s personal and social identity, has been reorganized to conform to the uninterrupted operation of markets, information networks, and other systems. A 24/7 environment has the semblance of a social world, but it is actually a non-social model of machinic performance and a suspension of living that does not disclose the human cost required to sustain its effectiveness.

The average North American adult “now sleeps approximately six and a half hours a night, an erosion from eight hours a generation ago, and down from ten hours in the early twentieth century,” and what suffers most from this lack of sleep is our innate ability to dream. Most people tend to forget or don’t even think about their dreams, much less their extraordinary ability to control them. What is frightening about this is the prevalent attitude of accepting the current state of reality as it is:

The idea of technological change as quasi-autonomous, driven by some process of autopoiesis or self-organization, allows many aspects of contemporary social reality to be accepted as necessary, unalterable circumstances, akin to facts of nature. In the false placement of today’s most visible products and devices within an explanatory lineage that includes the wheel, the pointed arch, moveable type, and so forth, there is a concealment of the most important techniques invented in the last 150 years: the various systems for the management and control of human beings.

What may be the most important fact to remember: Nothing must be as it is. Here are a three ways to escape the never-ending 24/7 state:

Unplug Your Phone & Plug Into Your Imagination

Break your cell phone habit. The dopamine addiction is real. I keep my phone in a Faraday pouch, which blocks signals to my phone and keeps me to my rule of no cell phone or screen use one hour prior to sleeping and one hour after waking.

As “visual and auditory ‘content’ is most often ephemeral, interchangeable material that in addition to its commodity status, circulates to habituate and validate one’s immersion in the exigences of twenty-first-century capitalism,” it is important to focus on the power of our own imagination. The hierarchal and algorithm-driven fields of social media and newsfeeds tend to serve us things we already know or like, and keep us wanting.

Instead, we can explore the limitless field of our imagination. Write down your dreams in the morning and use them as a vehicle for self-exploration, or venture into lucid dreaming to manifest your own desires or to explore creative pursuits. And yet for most of us, when walking, during our daily commute, even sitting on the toilet or in any moment where it’s just us and our thoughts, we turn to our cell phones for comfort, to fill the silence:

One of the forms of disempowerment within 24/7 environments is the incapacitation of daydream or of any mode of absent-minded introspection that would otherwise occur in intervals of slow or vacant time.

Even when socializing with friends, it’s a common habit to check our phones again and again. I’ve found that when one person does this, it enables others:if I see someone sitting across from me at a dinner checking their Instagram feed, I’ll feel less guilty about doing the same. Make it can stop with you — turn off your phone.

Reevaluate Your Drug Habits & Addictions

Beyond digital dopamine, are you addicted to caffeine, sugar, alcohol, adderall, cocaine, Ambien, Lexapro, vicodin, etc., etc.? We live in a self-selecting society, where some drugs are perfectly acceptable as long as they are prescribed by a doctor and other drugs are deemed dangerous. I used to babysit for an eight-year-old who was fed Ritalin daily for his ADHD, and then at night, had to take a tranquilizer to help him fall asleep. He was speedballing throughout his childhood, and I’ve met others who had the same experience only to question the impact of these drugs on their personality and life-path.

There is a multiplication of the physical or psychological states for which new drugs are developed and then promoted as effective and obligatory treatments. As with digital devices and services, there is a fabrication of pseudo-necessities, or deficiencies for which new commodities are essential solutions… Over the last two decades, a growing range of emotional states have been increasingly pathologized in order to create vast new markets for previously unneeded products. The fluctuating textures of human affect and emotion that are only imprecisely suggested by the notions of shyness, anxiety, variable sexual desire, distraction, or sadness have been falsely converted into medical disorders to be targeted by hugely profitable drugs. Of the many links between the use of psychotropic drugs and communication devices, one is their parallel products of forms of social compliance.

Ritalin, adderall (and cocaine) not only make the takers compliant but fueled to tackle the 24/7 lifestyle, deadening empathy, increasing competitiveness and perhaps is linked to “destructive delusions about performance and self-aggrandizement”.

While methamphetamines are regularly fed to children, psychedelic drugs tend to be demonized as extreme and dangerous. Yet, refreshingly, there are organizations now like the Multidisciplinary Association of Psychedelic Studies (MAPS) and other studies looking into how psychedelics can not only treat addictions, anxiety, and disorders, but also how psychedelics can expand consciousness and leave lasting personality changes for the better.

Find Your Passion & Connect With Real Life Communities

Crary argues that “whatever remaining pockets of everyday life are not directed toward quantitative or acquisitive ends, or cannot be adapted to telematic participation, tend to deteriorate in esteem and desirability.” Our tendency to tie our social worth to digital networks takes the saying “if a tree falls in a forest and nobody is around to hear it, does it make a sound?” and turns it into “if you do something fun and meaningful and don’t post it to social media, does it matter?”

But those meaningful moments in real life do matter, as does having a strong community to participate in. After all, addictions are a result mostly of isolation and bad environments:

As stated earlier: it is much easier to fold to the insidious trap of looking at your cell phone or constantly working if the person across from you does so first. Find your passion beyond the screen. Find your source of dopamine, what drives you, what engages you and makes you want to get up every day.

Finding a real community centered around a meaningful activity can help tremendously. For me, rock climbing is a meditative activity that requires focus and attention, and is anchored in a community of people who are invested in your success as much as they are in their own. The nature of the sport is so individual because each person is unique; climbing is a niche that carves out time for people to participate in life without any social rules and concepts of winning over another. Climbing outdoors is a way to be connected to nature and to just hang out with friends.

I just returned from a week in New York City, the city that never sleeps, the capitol of the 24/7 world, and it took me two weeks just to be able to find the time to sit down and write this. It is not easy to accept the bleak claims in Crary’s book because it would be admitting our own addictions and how we play into this non-stop state. It’s just as hard to look away from our screens, but you can. Tonight, don’t put your phone or laptop into “sleep mode” — turn them off, and pay attention to your own dreams.

Further Study:

24/7: Late Capitalism and the Ends of Sleep by Jonathan Crary

24/7: Late Capitalism and the Ends of Sleep explores some of the ruinous consequences of the expanding non-stop processes of twenty-first-century capitalism. The marketplace now operates through every hour of the clock, pushing us into constant activity and eroding forms of community and political expression, damaging the fabric of everyday life.

Commodifying Dissent: Media, the Arts and the Hope in Cooperatives

Posted on July 17, 2016 by Reid Mukai

By Yoav Litvin

Source: CounterPunch

In the latest onslaught of apocalyptic news updates: The European Union is in crisis after the BREXIT vote, endless wars continue to ravage Africa and the Middle East causing millions of refugees to flee for their lives, ISIS strikes again, this time slaughtering over one hundred and fifty innocent Iraqis in Baghdad, and man-made climate change is wreaking havoc, fueling the third major mass extinction of species on Earth.

Meanwhile, back in the halls of empire the theatrics of the electoral process, together with the usual seasonal sports spectacles are mesmerizing and distracting the vast majority of the American public from the pressing issues threatening society. Despair and hatred mar our streets, nightclubs, schools, churches and movie theaters. Greed has overtaken empathy and a few powerful individuals have squashed the collective. Whole communities have been ravaged by neoliberal agendas that imprison and impoverish, all in the name of the almighty greenback.

But it is just another day at the office for the 1%. They own the Executive, Legislative and Judicial branches of government. As Chris Hedges frequently stresses: “We’ve undergone a corporate coup d’etat in slow motion. And it’s over. We’ve lost, and they’ve won.”

The vast majority of media sources, the watchdogs meant to protect democracy and the people’s interests at all costs, have succumbed to the rule of profit, aka “ratings”. They have become de factopropaganda outlets meant to manufacture consent and sell us on the faux virtues of consumerism and the American dream.

The corporate-owned mainstream media has been complicit on many levels. It is business as usual when a major outlet like MSNBC casually interrupts US Congresswoman Jane Harman speaking about NSA mass surveillance to feature the “breaking news” of teen pop star Justin Bieber’s DUI arrest. News networks carry on for hours with mind-numbing repetition about Donald Trump’s racist and misogynist antics, while all but completely ignoring a massive sit-in led by Democracy Spring, a movement that champions an end to the corruption of big money in our politics. Pundits whose job is to cry wolf endlessly discuss ISIS and the “threat of radical Islam”, but thorough analyses of the continued crimes of capitalism and imperialism are taboo, not to mention any productive discussions about systemic alternatives.

In this climate of corrupted news outlets, media that are independent of corporate funding are crucial in providing the people accurate information about systems of power and control.

But historically, the media has not been the only watchdog for the people and against powerful interest groups. Artists and other creatives have often used their works to voice progressive ideals that rebel against widely held conceptions of gender, race and class. As such, artists have been among the first voices of dissent to be targeted by totalitarian and fascist regimes. In the American capitalist culture, artists fall prey to a system that monetizes and commodifies all walks of life, including health care and education. Many artists willfully sell out, becoming court jesters who contribute their art to the needs of empire, i.e. as propaganda. Now studied as a degree at schools for higher education, the bulk of arts have become part of an “art market” – a multi-billion dollar industry that is more about a lifestyle and an investment, than it is about progressive messages or a passion for a new and interesting aesthetic. In the current cynical era when replicas sell for $100,000, there is little room for political art that expresses genuine and independent notions that challenge systemic conventions.

There are exceptions. Some artists refuse to corrupt themselves and their art by adhering to the whims of the “art market”. Notably, since the late sixties, there has been a movement of graffiti and street artists who have claimed public space from private owners. Born in the Washington Heights neighborhood in New York City (arguably) and now a global phenomenon, graffiti and street art often empower disenfranchised communities by serving as a voice of dissent, and providing free, uncensored messages regardless of commercial constraints.

The pathology behind the hijacking of media and the arts by the lords of capital runs deeper than the mere criminality of the 1%. It lies at the roots of one of the fundamental American values- individualism, where the achievements of the lone genius are sanctified, and those of the collective are ignored or even vilified. Individualism divides and conquers, providing the promise of immense spoils for victors, while always blaming failure on individual inadequacies, not systemic ones.

The cult of individualism has been so deeply ingrained in the American psyche that it has degenerated the biological human affinity to empathize rather than disregard, collaborate rather than dominate and has stifled the desire to give without the expectation of immediate return. Individualism has made cooperation a waste of time. But the fact of the matter is that humans have evolved as a social species and naturally yearn for and need connection, affirmation, love and stimulation to survive, thrive and create.

The crises humanity faces leave no choice but to decommodify dissent, abandon notions of individuality at the expense of others, topple hierarchies, and unite around democratic cooperatives that promote community, democracy and solidarity. Returning ownership of dissent to the public is a crucial step towards revolutionizing the workspace, en route toward a truly free and just democratic society.

Yoav Litvin is a Doctor of Psychology/ Behavioral Neuroscience.

A Universal Basic Income Is The Bipartisan Solution To Poverty We’ve Been Waiting For

Posted on June 1, 2016 by Reid Mukai

What if the government simply paid everyone enough so that no one was poor? It’s an insane idea that’s gaining an unlikely alliance of supporters.

By Ben Schiller

Source: FastCoexist.com

There’s a simple way to end poverty: the government just gives everyone enough money, so nobody is poor. No ifs, buts, conditions, or tests. Everyone gets the minimum they need to survive, even if they already have plenty.

This, in essence, is “universal minimum income” or “guaranteed basic income”—where, instead of multiple income assistance programs, we have just one: a single payment to all citizens, regardless of background, gender, or race. It’s a policy idea that sounds crazy at first, but actually begins to make sense when you consider some recent trends.

The first is that work isn’t what it used to be. Many people now struggle through a 50-hour week and still don’t have enough to live on. There are many reasons for this—including the heartlessness of employers and the weakness of unions—but it’s a fact. Work no longer pays. The wages of most American workers have stagnated or declined since the 1970s. About 25% of workers (including 40% of those in restaurants and food service) now need public assistance to top up what they earn.

The second: it’s likely to get worse. Robots already do many menial tasks. In the future, they’ll do more sophisticated jobs as well. A study last year from Carl Frey and Michael Osborne at Oxford University found that 47% of jobs are at risk of computerization over the next two decades. That includes positions in transport and logistics, office and administration, sales and construction, and even law, financial services and medicine. Of course, it’s possible that people who lose their jobs will find others. But it’s also feasible we’re approaching an era when there will simply be less to do.

The third is that traditional welfare is both not what it used to be and not very efficient. The value of welfare for families with children is now well below what it was in the 1990s, for example. The move towards means-testing, workfare—which was signed into law by Bill Clinton in 1996—and other forms of conditionality have killed the universal benefit. And not just in the U.S. It’s now rare anywhere in the world that people get a check without having to do something in return. Whatever the rights and wrongs of this, that makes the income assistance system more complicated and expensive to manage. Up to up to 10% of the income assistance budget now goes to administrating its distribution.

For these reasons and others, the idea of a basic income for everyone is becoming increasingly popular. There has been a flurry of reports and papers about it recently, and, unusually, the idea has advocates across the political spectrum.

The libertarian right likes basic income because it hates bureaucracy and thinks people should be responsible for themselves. Rather than giving out food stamps and health care (which are in-kind services), it thinks people should get cash, because cash is fungible and you do what you like with it.

The left likes basic income because it thinks society is unequal and basic income is redistributive. It evens up the playing field for people who haven’t had good opportunities in life by establishing a floor under the poorest. The “precariat” goes from being perpetually insecure to knowing it has something to live on. That, in turn, should raise well-being and produce more productive citizens.

The technology elite, like Netscape’s Marc Andreessen, also likes the idea. “As a VC, I like the fact that a lot of the political establishment is ignoring or dismissing this idea,” Albert Wenger, of Union Square Ventures, told a TED audience recently, “because what we see in startups is that the most powerful innovative ideas are ones truly dismissed by the incumbents.” A minimum income would allow us to “embrace automation rather than be afraid of it” and let more of us participate in the era of “digital abundance,” he says.

The exact details of basic income still need to be worked out, but it might work something like this: Instead of welfare payments, subsidies for health care, and tax credits for the working poor, we would take that money and use it to cover a single payment that would give someone the chance to live reasonably. Switzerland ~~recently held an (unsuccessful)~~ is planning to hold a referendum on a basic income this year, though no date is set. The proposed amount is $2,800 per month.

But would it actually work? The evidence from actual experiments is limited, though it’s more positive than not. A pilot in the 1970s in Manitoba, Canada, showed that a “Mincome” not only ended poverty but also reduced hospital visits and raised high-school completion rates. There seemed to be a community-affirming effect, which showed itself in people making use of free public services more responsibly.

Meanwhile, there were eight “negative income tax” trials in the U.S. in the ’70s, where people received payments and the government clawed back most of it in taxes based on your other income. The results for those trials was more mixed. They reduced poverty, but people also worked slightly less than normal. To some, this is the major drawback of basic income: it could make people lazier than they would otherwise be. That would certainly be a problem, though it’s questionable whether, in the future, there will be as much employment anyway. The age of robots and artificial intelligence seems likely to hollow out many jobs, perhaps changing how we view notions of laziness and productivity altogether.

Experiments outside the U.S. have been more encouraging. One in Namibia cut poverty from 76% to 37%, increased non-subsidized incomes, raised education and health standards, and cut crime levels. Another involving 6,000 people in India paid people $7 month—about a third of subsistence levels. It, too, proved successful.

“The important thing is to create a floor on which people can start building some security. If the economic situation allows, you can gradually increase the income to where it meets subsistence,” says Guy Standing, a professor of development studies at the School of Oriental and African Studies, in London, who was involved with the pilot. “Even that modest amount had incredible effects on people’s savings, economic status, health, in children going to school, in the acquisition of items like school shoes, so people felt in control of their lives. The amount of work people were doing increased as well.”

Given the gridlock in Congress, it’s unlikely we’ll see basic income here for a while. Though the idea has supporters in both left and right-leaning think-tanks, it’s doubtful actual politicians could agree to redesign much of the federal government if they can’t agree on much else. But the idea could take off in poorer countries that have more of a blank slate and suffer from less polarization. Perhaps we’ll re-import the concept one day once the developing world has perfected it?

The Man Who Bought the Clintons: the Political Business of Terry McAuliffe

Posted on May 24, 2016 by Reid Mukai

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(Editor’s note: In light of yesterday’s announcement that Hillary Clinton’s former campaign chairman Terry McAuliffe is being investigated by federal prosecutors for illegal foreign campaign donations made directly to him and through the Clinton Foundation, it’s worth revisiting this article from 10/15 to learn more about his shady history.)

By Jeffrey St. Clair

Source: CounterPunch

In May 1999, the Labor Department brought suit against Jack Moore and John Grau, charging the two men with mismanaging the pension fund for the International Brotherhood of Electrical Workers. Moore was the longtime secretary of the union, while Grau was the vice-president of the National Electrical Contractor’s Association, which was partner in the fund. At issue was a series of sweetheart real estate deals in central Florida, which regulators labeled “imprudent”, and cost the fund money. Moore and Grau eventually settled the case for more than six figures. The union was forced to kick in another $5 million to cover the losses to the pension fund. The person at the center of the scandal, however, made out in the deal very well, indeed. His name: Terry McAuliffe, former head of the DNC, now governor of Virginia.

McAuliffe met Moore in 1988, when both were raising money for the doomed presidential bid of Dick Gephardt. They became close friends, allies in a campaign to redesign the Democratic Party into a more moderate political vessel, along the lines of the pre-Reagan Republicans. Moore controlled the $6 billion IBEW pension fund and had a reputation for investing money in businesses run by friends and political cronies.

So it was that in November 1990, McAuliffe approached Moore and his friend Grau with a proposal for a real estate partnership in central Florida with an investment company called American Capital Management, which McAuliffe owned with his wife Dorothy. The deal involved the purchase of the Woodland Square Shopping Center and five apartment complexes outside Orlando, Florida. It was a lopsided partnership. The pension fund put up $39 million to purchase the property. McAuliffe shelled out $100, yet he and his wife enjoyed 50 percent ownership in the project. He eventually parlayed his $100 investment into a $2.45 million profit.

Fresh from this triumph, McAuliffe approached Moore with a new proposal. He asked Moore to dip into the pension fund one more time for $6 million so that he could purchase a parcel of land south of Orlando called Country Run, which McAuliffe planned to subdivide into 500 single-family homes. Moore obliged and loaned McAuliffe the money. The development soon proved to be a bust. Only half the homes were built and many of them didn’t sell. Years passed, but McAuliffe never bothered to make a single payment to the pension fund on the loan. According to Labor Department records, McAuliffe was in default from December 1992 through October 1997. The managers of the pension fund never demanded payment or called in the loan. The only collateral they had required was the nearly worthless Country Run property itself.

Eventually, McAuliffe found a buyer for the property and repaid the loan. But the aroma of the deals attracted the attention of the Labor Department, which had been looking into the looting of worker pension funds. In May of 1999, the agency brought a suit against Moore and Grau for mismanagement of the fund. Both eventually settled, agreeing to six figure fines, and resigned their positions. The IBEW was compelled to reimburse the pension fund to the tune of five million dollars. The Labor Department didn’t have any authority to go after McAuliffe. That was up to the Clinton Justice Department and they took a pass. He wasn’t sued or otherwise inconvenienced. So a labor fund got looted and Terry McAuliffe got very rich.

This wasn’t the only time McAuliffe steered a labor union toward dangerous legal and financial shoals. In 1996, McAuliffe helped devise a political money-cycling scheme that led to the downfall of several leaders of the Teamster’s Union, including the union’s reform-minded president Ron Carey and his political director William Hamilton. At Hamilton’s trial on corruption charges, Richard Sullivan, the former director of finance for the Democratic National Committee, testified that McAuliffe asked Sullivan and other top DNC fundraisers to approach big Democratic donors who could make a contribution of at least $50,000 to the re-election campaign of Ron Carey, then in a pitched battle with James Hoffa, Jr. Under McAuliffe’s scheme, Sullivan testified, the Teamster’s Union would later recycle that $50,000 back into various Democratic Party accounts. Once again, McAuliffe was never charged with wrongdoing and his lawyer, Richard Ben-Veniste, repeatedly said there’s was nothing illegal in his client’s plan. He lives a charmed life.

* * *

Terry McAuliffe was born in 1957 in Syracuse, New York. His father was a longtime Democratic powerbroker in upper state New York and a top fundraiser for the party. Terry got into politics at a young age. But as anyone can tell there’s not much evidence that he was ever excited about policy issues. The environment, abortion rights, civil rights, peace. These great issues didn’t turn Terry on. Instead, he was entranced by the mechanics of political fundraising, party planning and schmoozing with business elites and Hollywood celebrities.

He made a beeline for the Beltway, attending Catholic University. Through his father’s influence, he got a position as a fundraiser for Jimmy Carter. And then he was off and running, renting his financial services to House and senate races and gubernatorial elections.

In the meantime, McAuliffe managed to earn the obligatory law degree from Georgetown University. Then in 1984, he began to fine-tune his craft under the wing of Tony Coelho, the longtime House whip and master fundraiser from California. At the time, Coelho was heading up the Democratic Congressional Campaign Committee, the main DNC fundraising apparatus for House races.

More than anyone, Coelho laid the foundations for the Democratic Party’s open courting of big business. And Terry McAuliffe, working from the master’s Rolodex, served as Coelho’s chief apprentice, sprinting from one Beltway lobby shop to the next offering prime access to Democratic powerbrokers for political cash, hard and soft money, the new coin of the realm.

The young fundraiser learned an early lesson. No enterprise was off-limits, no matter how tarnished the reputation of the company: weapons-makers, oil companies, chemical manufacturers, banks, sweatshop tycoons. Indeed, McAuliffe made his mark by targeting corporations with festering problems, ranging from liability suits to environmental and worker safety restraints to bothersome federal regulators. The more desperate these enterprises were for political intervention, the more money McAuliffe knew he could seduce into DNC coffers. What about environmental groups? Big labor? The traditional core of the Democratic Party? Not only didn’t their objections (assuming they voiced any) matter, they actually made McAuliffe’s pitch more appealing to the corporadoes. After all, the Republicans didn’t have any sway over these organizations. Triangulation, the backstabbing political playbook of Clintontime, originated as a fundraising gimmick. A very lucrative one.

In the early 90s, really big money began to pour into the DNC. McAuliffe recruited robust donations from Arco and Chevron, Entergy and Enron, Phillip Morris and Monsanto, Boeing and Lockheed, Citibank and Weyerhaeuser. Many of these corporations had all but abandoned the Democrats during the Reagan era. McAuliffe lured them back with promises of favorable treatment by a new generation of anti-regulatory Democrats attuned to the special needs of multinational corporations. This was the mulch bed from which the Clinton presidency took root.

By 1994, Clinton himself had aligned himself to McAuliffe’s magic touch. He tapped him as the chief fundraiser for the 1996 reelection campaign. In this capacity, McAuliffe masterminded some of the more risqué political fundraising operations since the Kennedy era. There were the fundraisers at Buddhist temples in California. There were the notorious coffee klatches, where for a six-figure contribution to the DNC, corporate executives were brought to the White House for some face-time with Bill and Hillary, Al and Tipper, and a retinue of cabinet secretaries, with pen in hand ready to address any nagging problem. McAuliffe also devised the plan to rent out the Lincoln Bedroom to top contributors for slumber parties with the president.

Over the course of the next six years, McAuliffe was personally responsible for raising, largely from corporate sources, more than $300 million for the DNC.

* * *

The scene: the MCI Center in Washington, D.C. The date: May 14, 2000. The Event: “BBQ and Blue Jeans Gala.” It’s Terry McAuliffe’s biggest party yet. A star-studded gathering of DC lobbyists, corporate executives and Hollywood liberals, all in dressed in blue jeans, eating BBQ and listening to the blues and country music. It was also the single biggest fundraiser in history. More than $25 million was raised for the DNC in a single night.

Toward the end of the evening, Al Gore lumbered his way onto the stage and seized the microphone. He directed the spotlight turned on McAuliffe, the real star of the evening. “Terry”, Gore said, “You are the greatest fundraiser in the history of the universe.” The crowd thundered with applause for the man who had just lightened their wallets of several thousands of dollars.

Gore would soon come to rue those fervent words. While most Democrats blamed Katherine Harris or the Supreme Court for the loss of the White House to George W. Bush, McAuliffe pointed the finger at Gore. The fundraiser believed that Gore ran an inept campaign, misspending the precious millions he had worked so diligently to raise. McAuliffe detested the way that Gore distanced himself from the Clintons and refused to allow the president to campaign for him even in key southern states. Even worse from McAuliffe’s perspective, Gore had subtly dissed Clinton on the campaign trail, suggesting that he himself was a man of firmer moral sinew than the embattled president.

When Gore lost, the party fell back into the control of the Clintons and their chief emissary, Terry McAuliffe. The fundraiser swiftly took his revenge out on Gore. In late January, as the moving vans where pulling away from the White House, McAuliffe planned a major send off for the Clintons at Andrews Air Base. All the top Democrats were there; many were invited to give tributes to the first couple in front of the national TV cameras. Al Gore, naturally, expected to give the keynote farewell address. But McAuliffe refused to allow Gore even near a microphone. Gore wasn’t permitted to speak a single word. “McAuliffe didn’t want Gore to speak”, a top aide at the DNC told the Washington Post. “McAuliffe didn’t even want Gore there. The send off was about good memories, success stories. And the VP wasn’t either.”

McAuliffe’s implacable loyalty to Clinton was soon rewarded. Later in 2001, Bill Clinton engineered the ouster of Joe Andrew as head of the DNC and installed McAuliffe, who only months earlier had offered to purchase the Clintons a house in Chappaqua, New York for $1.3 million, as the chief of the party. As the head of the DNC, McAuliffe was now in a position to protect the Clintons’ legacy, reward loyalists, punish party dissidents and select the next presidential nominee.

When Gore began to flirt with the notion of challenging Bush in 2004, McAuliffe went to work to kill off his campaign before it even started. He went straight to Gore’s top political sponsors and advised them to withhold funds from the Gore campaign chest. He was tremendously persuasive, convincing even some of Gore’s most loyal backers, such as financier James Tisch, to deny money to their old friend.

The sabotage of the nascent Gore 2004 campaign was just a run-up for demolition job McAuliffe directed against the unauthorized campaign of Vermont governor Howard Dean. The Dean threat had almost nothing to do with any perceived ideological heresy from the Vermonter. After all Dean was a run-of-the-mill neoliberal who pretty much aped the centrist economic policies of Clinton. The real threat posed by Dean came from his determination to raise millions in campaign contributions outside of the precincts of the DNC. McAuliffe’s control over the party stemmed from his role as the prime dispenser of campaign cash, the elixir necessary to keep political recipients loyal to the party leadership and its policies. Dean showed another way was possible and he had to be put down.

But after the Dean juggernaut was scuttled, McAuliffe reached out a helping hand to the defeated candidate. As usual, the hand proffered money. The Dean campaign was in debt, the legions of Deaniacs seething with rage over the demolition of their hero. McAuliffe offered to help pay off Dean’s debts and set up his new institute, Democracy for America. In return, Dean worked to calm his troops, imploring them not to abandon the party for the independent campaign of Ralph Nader.

* * *

Terry McAuliffe didn’t just use his business contacts to fatten the accounts of the Democratic National Committee; he also deftly exploited them to inflate his own fortune, which now nudges toward nine figures. A similar fruitful intimacy with corporate cronies led to Tony Coelho’s stunning fall from grace, but McAuliffe never looked back. His trajectory has been decidedly prosperous and, to this point, utterly immune to the slumping fortunes of the economy outside the confines of the Beltway. These days McAuliffe says he wants to resurrect the Misery Index, but he’s not acquainted with any of the numbers.

In 1996, McAuliffe met a young corporate tycoon named Gary Winnick, who had once referred to himself as the richest man in Los Angeles. Winnick ran Global Crossing, a fiber-optics company chartered in the tax-friendly haven of Bermuda. At the time McAuliffe met Winnick, Global Crossing was a privately held company, poised to cash in on the deregulation of the telecom industry and the new opportunities in China. In 1997, Winnick offered McAuliffe the opportunity to purchase $100,000 worth of Global Crossing stock.

When Global Crossing shares went public in 1998, the value of the stock soared. Operating with an acute sensitivity to the fluctuations of the market bordering on ESP, McAuliffe sold his shares at the precise moment the stock peaked. McAuliffe told the New York Times he pocketed $18 million in the deal. Within a few months, Global Crossing’s stock collapsed, the company plunged into bankruptcy and more than a third of its workforce were tossed into the ranks of the unemployed.

McAuliffe also served as an on-call DC fixer for Winnick in those optimistic days following the Clinton reelection. In early 1997, McAuliffe set up shop in an office in downtown DC owned by a Winnick company called Pacific Capital Group. According to a boastful McAuliffe, Winnick hired him as a consultant to “help work some deals” with the federal government. “Gary was looking for some political action”, McAuliffe told Worth magazine. “He wanted a stable of people around him with great contacts.”

Few people inside the Beltway enjoyed better contacts than McAuliffe, as Winnick would soon discover. At an appearance in Los Angeles later that year, Bill Clinton lavished on Winnick his personal endorsement. “Gary Winnick has been a friend of mine for some time now and I’m thrilled by the success that Global Crossing has had.”

There’s no evidence that Winnick and Clinton had even met each other before that evening. But the endorsement proved fruitful. It signaled not only Clinton’s faith in the company, but also sent a message to federal agencies that Global Crossing was a firm that they should do business with. It soon paid off. A few months later Global Crossing won a $400 million contract from the Pentagon after repeated prodding from the White House.

After the contract was awarded, McAuliffe arranged for Winnick to play a round of golf with Clinton. Shortly after the afternoon on the links, Winnick donated $1 million to the Clinton presidential library.

Winnick’s joy was short lived, however. In the winter of 2001, the Pentagon rescinded the Global Crossing deal following an investigation by the Inspector General of the Defense Department, which raised questions over how the contract was awarded and Global Crossing’s ability to fulfill its obligations. Later, the company fell into the financial death noted above.

The attack dogs in the Bush White House never really made much of McAuliffe’s ripe ties to Global Crossing. Why? Global Crossing had been almost equally generous to the Bush family.

In 1997, Global Crossing invited former President George H.W. Bush to address company executives in Tokyo, Japan. At the time, Bush’s standard speaking fee was $80,000. The morning after the speech, Bush had breakfast with Winnick. Winnick advised Bush that it would prove much more profitable for the former president to accept payment in Global Crossing stock, then privately held, than cash. Bush agreed. Soon the company went public and the value of Bush’s stock swelled to more than $14 million. Not a bad pay-off for an hour’s speech. To complete the symmetry, one of Winnick’s top executives also serves as a trustee of the G.H.W. Presidential Library Fund.

Winnick tried to cover all of his bases. Yet as with Enron and Tyco, even the most judicious dispensation of money across the political spectrum couldn’t save a company that had been looted from the inside out. Global Crossing went down and so did Winnick. But the politicians who made it all possible remain indemnified from any liability for the carnage, protected by a mutually advantageous non-aggression pact.

Never bite the hands that feed the system.

This essay will appear in “An Orgy of Thieves: Scenes from the Counter-Revolution” coming in 2016 from CounterPunch Books.

Jeffrey St. Clair is editor of CounterPunch. His new book is Killing Trayvons: an Anthology of American Violence (with JoAnn Wypijewski and Kevin Alexander Gray). He can be reached at: sitka@comcast.net.

Is the US Economy Heading for Recession?

Posted on May 5, 2016 by Reid Mukai

By Jack Rasmus

Source: Global Research

This past week the U.S. government announced the country’s economy rose in the January-March 2016 at a mere 0.5 percent annual growth rate. Since the U.S., unlike other countries, estimates its GDP based on annual rates, that means for the first quarter 2016 the U.S. economy grew by barely 0.1 percent over the previous quarter in late 2015.

Growth this slow indicates the US economy may have “slipped into ‘stall speed’, that is, growth so weak that the economy loses enough momentum and slides into recession”, according to economists at JPMorgan Chase.

Has the U.S. economy therefore come to a halt the past three months? If so, what are the consequences for a global economy already progressively slowing? What will an apparently stagnating US economy mean for Japan, already experiencing its fifth recession since 2008? For Europe, stuck in a long term chronic stagnation? And for emerging market economies, struggling with collapsing commodity prices and currencies, rising unemployment, and long term capital flight trends? Once heralded as the only bright spot in the global economy, the US economy now appears to have joined the slowing global trend.

Some Interesting Trends

Last quarter’s 0.5 percent U.S. GDP may indicate the nation’s economy is even weaker than it appears. The economy of the United States’ recent 0.5 percent growth rate is the latest in a steady declining U.S. GDP growth trend over the past year. In the previous fourth quarter 2015, the US economy grew 1.4 percent, which was down from the preceding quarter’s growth of 2 percent and before that 3.9 percent. So the U.S. economy appears to be slowing rapidly over the past year.

Over an even longer period of more than eight years, since the previous peak growth in late 2007, the U.S. economy has grown by a cumulative total of only 10.1 percent. That’s a paltry annual growth of only 1.2 percent a year on average for the past 8+ years.

But even those figures are overestimated. In 2013, the U.S. redefined the way it estimated GDP, adding categories like R&D expenses and other intangibles that artificially boosted U.S. GDP estimates simply by redefining it. That “economic growth by redefinition” raised GDP by around 0.3 percent annually, and in dollar terms by roughly US$500 billion annually. So the real U.S. GDP may be actually growing by less than 1 percent on average per year since 2007; and during the most recent quarter, January-March 2016, the economy may not have grown at all, but may have stagnated, collapse, and come to a halt.

Behind the Wizard’s Curtain

The media and press like to define recessions as two consecutive quarters of negative GDP growth. Actually, U.S. economists tasked with declaring when a recession has begun or has ended don’t rely totally on GDP estimates, which are notoriously inaccurate and have become increasingly so, given U.S. and other governments’ penchant for changing how they define GDP.

Redefining GDP to boost the appearance of growth is not just a problem in the US in recent years. For example, there are few independent research sources that think China is growing at its officially announced 6.8 percent GDP rate. To note but a couple, both Capital Economics and Lombard Street research estimate that China’s GDP is growing at only around 4-4.5 percent based on close examination of other indicators like electricity usage, power generation, local transport volumes, and so forth. In recent years India officially nearly doubled its GDP overnight by redefining it. So did Nigeria. India bank researchers, whom this writer has talked to, say they have a rule of thumb: take the official government GDP rate and half it and that’s probably close to India’s actual GDP. In Europe, a number of economies, including Britain, which have been desperate to raise their GDP in recent years, now include drug smuggling and prostitution services in their estimates of GDP. How they come up with such estimates and the pricing of such services is, of course, interesting.

Not satisfied with the media-press definition of a recession as two consecutive quarters of negative GDP, US economists at the National Bureau of Economic Research, who are tasked with declaring the beginning and end of a recession, look at various economic indicators — like industrial production, retail sales, exports-import trends, and other sources. A recession may occur in just one quarter; or may require more than two.

Looking at these other indicators for this past January-March 2016 period, the US economy appears even more likely headed for a recession and sooner rather than later.

US industrial production (manufacturing, mining and utilities) declined at an annual rate of -2.2 percent this past quarter, after having declined -3.3 percent the preceding quarter. Industrial production has fallen six of the last seven months. US industrial capacity is now at its lowest point since 2010.

Business investment is another trouble spot. Investment in business structures fell by -10.7 percent and investment in new equipment by -8.6 percent, the latter the biggest drop since the 2007-09 recession. Business inventories rose barely, by the smallest amount in two years, continuing a slowing trend of the past nine months.

And what about consumption, which constitutes about two thirds of the total US economy? US consumer spending has been growing at an average monthly rate of only 0.1 percent. Retail sales, the largest element of consumer spending, has fallen every month on average during the quarter. After having sustained retail sales in previous years, auto sales, a large component of retail sales, declined for the second consecutive quarter during the January-March period. The outlook for U.S. consumer spending recovery is also not too bright. A recent Gallup poll reported that 60 percent of those interviewed indicated the U.S. economy was “getting worse.” Reflecting the poor demand for consumer goods, U.S. consumer prices now hover on the brink of deflation, falling at an average monthly rate of -0.1 percent for the quarter.

Exports are declining, residential housing construction recently plummeted. In other words, not many of the economic indicators that comprise GDP show a promising picture. GDP should probably be even lower than the recently reported 0.5 percent annual and 0.1 percent quarter to quarter growth rates. The U.S. economy has obviously “stalled.” But it’s not the first time. In fact, it’s the fifth time it has since the official end of the last recession in June 2009.

What’s a Relapse?

The performance of the US economy this past January-March, a trend that appears is continuing into April, represents what this writer has called an ‘economic relapse’. A relapse is a collapse of economic growth for a single quarter, to near zero or even negative growth.

The U.S. economy has experienced now five such single quarter relapses since the 2007-09 recession was officially declared over. The economy collapsed to 0.1 percent in early 2011, to 0.2 percent in late 2012, declined again by -2.2 percent in 2014 and collapsed to 0.2 percent in 2015.

Relapses are the consequence of “epic” recessions such as occurred in 2007-09, which are typically characterized by short, shallow recoveries that slip repeatedly into periodic bouts of renewed stagnation. They are the result of near total reliance on central bank monetary policies that are designed to boost stock, bond and other financial markets — and thus the incomes of rich investors — but which fail to generate a sustained real economic recovery. Fiscal policies designed to stimulate consumption and good paying jobs are rejected. That almost perfectly describes U.S. economic policy the past eight years.

Politicians Wearing Rose-Colored Glasses

Despite the facts, U.S. government politicians and Federal Reserve bank officials continue to run around declaring that the U.S. economy is performing well. They like to cite the 200,000 jobs allegedly created in recent months. But a closer examination shows the jobs being created are part time, temp, contract, low paid, no benefit service jobs. Jobs that generate no overall wage increase for the economy and no real income gains for working people.

Young workers 30 years old or less are especially hard hit by this “‘well performing US economy.” A recent study by the Center for American Progress, for example, showed that 30 year old workers earn today the same pay, adjusted for inflation, that 30 year olds earned back in 1984.

Despite all that, President Obama continues to tour the country complaining that he doesn’t get enough credit for bringing the US back from the worst recession since the 1930s depression. He should tell that to the millions of millennial young workers, with low paid crappy service jobs, with no medical insurance, having to live at home with relatives because they can’t afford to rent an apartment, loaded with debt and with no prospects for meaningful change on the horizon. No wonder they’re rallying around Bernie Sanders, who continues to capture 85 percent of their votes in the presidential primaries. Obama (and Hillary) will have a hard time convincing them “all is well” — and an even harder time getting them to vote Democrat in the coming election in November.

Jack Rasmus is author of the recent, 2016 book “Systemic Fragility in the Global Economy,” by Clarity Press, soon translated into a Chinese edition, and the forthcoming June 2016 book, “Looting Greece: The Emerging New

Thomas Frank on How Democrats Went From Being the ‘Party of the People’ to the Party of Rich Elites

Posted on May 3, 2016 by Reid Mukai

Democrats have gone from the party of the New Deal to a party that is defending mass inequality.

By Tobita Chow

Source: In These Times

The Democratic Party was once the party of the New Deal and the ally of organized labor. But by the time of Bill Clinton’s presidency, it had become the enemy of New Deal programs like welfare and Social Security and the champion of free trade deals. What explains this apparent reversal? Thomas Frank—best known for his analysis of the Republican Party base in What’s the Matter with Kansas?—attempts to answer this question in his latest book, Listen Liberal: Or, What Ever Happened to the Party of the People?

According to Frank, popular explanations which blame corporate lobby groups and the growing power of money in politics are insufficient. Frank instead points to a decision by Democratic Party elites in the 1970s to marginalize labor unions and transform from the party of the working class to the party of the professional class. In so doing, the Democratic Party radically changed the way it understood social problems and how to solve them, trading in the principle of solidarity for the principle of competitive individualism and meritocracy. The end result is that the party which created the New Deal and helped create the middle class has now become “the party of mass inequality.” In These Times spoke with Frank recently about the book via telephone.

The book is about how the Democratic Party turned its back on working people and now pursues policies that actually increase inequality. What are the policies or ideological commitments in the Democratic Party that make you think this?

The first piece of evidence is what’s happened since the financial crisis. This is the great story of our time. Inequality has actually gotten worse since then, which is a remarkable thing. This is under a Democratic president who we were assured (or warned) was the most liberal or radical president we would ever see. Yet inequality has gotten worse, and the gains since the financial crisis, since the recovery began, have gone entirely to the top 10 percent of the income distribution.

This is not only because of those evil Republicans, but because Obama played it the way he wanted to. Even when he had a majority in both houses of Congress and could choose whoever he wanted to be in his administration, he consistently made policies that favored the top 10 percent over everybody else. He helped out Wall Street in an enormous way when they were entirely at his mercy.

He could have done anything he wanted with them, in the way that Franklin Roosevelt did in the ‘30s. But he chose not to.

Why is that? This is supposed to be the Democratic Party, the party that’s interested in working people, average Americans. Why would they react to a financial crisis in this way? Once you start digging into this story, it goes very deep. You find that there was a transition in the Democratic Party in the ‘70s, 80’s and ‘90s where they convinced themselves that they needed to abandon working people in order to serve a different constituency: a constituency essentially of white-collar professionals.

That’s the most important group in their coalition. That’s who they won over in the ’70s, ’80s and ’90s. That’s who they serve, and that’s where they draw from. The leaders of the Democratic Party are always from this particular stratum of society.

A lot of progressives that I talk to are pretty familiar with the idea that the Democratic Party is no longer protecting the interests of workers, but it’s pretty common for us to blame it on mainly the power of money in politics. But you start the book in chapter one by arguing there’s actually something much deeper going on. Can you say something about that?

Money in politics is a big part of the story, but social class goes deeper than that. The Democrats have basically made their commitment [to white-collar professionals] already before money and politics became such a big deal. It worked out well for them because of money in politics. So when they chose essentially the top 10 percent of the income distribution as their most important constituents, that is the story of money.

It wasn’t apparent at the time in the ‘70s and ‘80s when they made that choice. But over the years, it has become clear that that was a smart choice in terms of their ability to raise money. Organized labor, of course, is no slouch in terms of money. They have a lot of clout in dollar terms. However, they contribute and contribute to the Democrats and they almost never get their way—they don’t get, say, the Employee Free Choice Act, or Bill Clinton passes NAFTA. They do have a lot of money, but their money doesn’t count.

All of this happened because of the civil war within the Democratic Party. They fought with each other all the time in the ‘70s and the ‘80s. One side hadn’t completely captured the party until Bill Clinton came along in the ‘90s. That was a moment of victory for them.

Bill Clinton’s presidency is what progressives usually cite as the time when things went bad. But there’s a trend that goes back to the ’70s, right?

Historians always cite the ’68 election as the turning point. The party was torn apart by the controversy over the Vietnam war, protesters were in the streets in Chicago and the Democratic candidate Hubert Humphrey went on to lose. Democrats thought this was terrible, and it was. So they set up a commission to reorganize the party, the McGovern Commission.

The McGovern Commission basically set up our modern system of primaries. Before the commission, we didn’t have these long primary contests in state after state after state. Primaries are a good thing, as were most things the McGovern Commission did.

But they also removed organized labor from its structural position of power in the Democratic Party. There was a lot of resentment towards labor during the Vietnam War. A lot of unions took President Johnson’s side on Vietnam. There was also this sense—which I think was correct at the time—that labor was a dinosaur, that it was out of touch and undemocratic and very white.

There were a lot of reasonable objections to organized labor at the time. The problem is, when you get rid of labor in your party, you also get rid of issues that matter to working people. That’s the basic mistake that Democrats made in the ’70s. Of course, labor still is a big part of the Democratic coalition—it gives them their money, it helps out at election time in a huge way. But unions no longer have the presence in party councils that they used to. That disappeared.

One of the most shocking quotes in the book is from Alfred Kahn, an advisor to Jimmy Carter, who said, “I’d love the Teamsters to be worse off. I’d love the automobile workers to be worse off.” He then basically says that unionized workers are exploiting other workers.

Isn’t that amazing? He’s describing a situation in the 1970s. There was all this controversy in the 1970s about labor versus management—this was the last decade where those fights were front and center in our national politics. And he’s coming down squarely on the side of management in those fights.

And remember, Kahn was a very important figure in the Carter administration. The way that he describes unions is incorrect—he’s actually describing professionals. Professionals are a protected class that you can’t do anything about—they’re protected by the laws of every state that dictate who can practice in these fields. It’s funny that he projects that onto organized labor and holds them responsible for the sins of another group.

This is a Democrat in an administration that is actually not very liberal. This is the administration that carried out the first of the big deregulations. This is the administration that had the great big capital gains tax cuts, that carried out the austerity plan that saw the Federal Reserve jack its interest rates sky high. They clubbed the economy to the ground in order to stop “wage inflation,” in which workers, if they have enough power, can keep demanding higher wages. It was incredible.

What’s the content of the ideology of the professional class and how does it hurt working people? What are their guiding principles?

The first commandment of the professional class is the idea of meritocracy, which allows people to think that those on top are there because they deserve to be. With the professional class, it’s always associated with education. They deserve to be there because they worked really hard and went to a good college and to a good graduate school. They’re high achievers. Democrats are really given to credentialism in a way that Republicans aren’t.

If you look at the last few Democratic presidents, Bill Clinton and Obama, and Hillary Clinton as well, their lives are a tale of educational achievement. This is what opened up the doors of the world to them. It’s a party of who people who have gotten where they are by dint of educational accomplishment.

This produces a set of related ideas. When the Democrats, the party of the professionals, look at the economic problems of working-class people, they always see an educational problem, because they look at working class people and say, “Those people didn’t do what I did”: go and get advanced degrees, go to the right college, get the high SAT scores and study STEM or whatever.

There’s another interesting part of this ideology: this endless search for consensus. Washington is a city of professionals with advanced degrees, and Democrats look around them there and say, “We’re all intelligent people. We all went to good schools. We know what the problems are and we know what the answers are, and politics just get in the way.”

This is a very typical way of thinking for the professional class: reaching for consensus, because politics is this ugly thing that you don’t really need. You see this in Obama’s endless efforts to negotiate a grand bargain with Republicans because everybody in Washington knows the answers to the problems—we just have to get together, sit down and make an agreement. The same with Obamacare: He spent so many months trying to get Republicans to sign on, even just one or two, so that he could say it was bipartisan. It was an act of consensus. And the Republicans really played him, because they knew that’s what he’d do.

To go back to your point about education: At one point you quote Arne Duncan, who was Obama’s secretary of education, saying that the only way to end poverty is through education. Why can’t that work?

The big overarching problem of our time is inequality. If you look at historical charts of productivity and wage growth, these two things went hand in hand for decades after World War II, which we think of as a prosperous, middle-class time when even people with a high school degree, blue-collar workers, could lead a middle class life. And then everything went wrong in the 1970s. Productivity continued to go up and wage growth stopped. Wage growth has basically been flat ever since then. But productivity goes up by leaps and bounds all the time. We have all of these wonderful technological advances. Workers are more productive than ever but they haven’t benefited from it. That’s the core problem of inequality.

Now, if the problem was that workers weren’t educated enough, weren’t smart enough, productivity would not be going up. But that productivity line is still going up. So we can see that education is not the issue.

It’s important that people get an education, of course. I spent 25 years of my life getting an education. It’s basic to me. It’s a fundamental human right that people should have the right to pursue whatever they want to the maximum extent of their individual potential. But the idea that this is what is holding them back is simply incorrect as a matter of fact. What’s holding them back is that they don’t have the power to demand higher wages.

If we talk about the problem as one of education rather than power, then the blame goes back to these workers. They just didn’t go out and work hard and do their homework and get a gold star from their teacher. If you take the education explanation for inequality, ultimately you’re blaming the victims themselves.

Unfortunately, that is the Democratic view. That’s why Democrats have essentially become the party of mass inequality. They don’t really have a problem with it.

So really, the solution would have to be solidarity and organized power.

That was an essential point that I try to make in Listen Liberal: that there is no solidarity in a meritocracy. A meritocracy really is every man for himself.

Don’t get me wrong. People at the top of the meritocracy, professionals, obviously have enormous respect for one another. That is the nature of professional meritocracy. They have enormous respect for the people at the top, but they feel very little solidarity for people beneath them who don’t rise in the meritocracy.

Look at the white-collar workplace. If some professional gets fired, the other professionals don’t rally around and go on strike or protest or something like that. They just don’t do that. They feel no solidarity because everything goes back to you and whether or not you’ve made the grade. If somebody gets fired, they must’ve deserved it somehow.

I have my own personal experience. Look at academia over the last 20 years. They’re cranking out these Ph.D.s in the humanities who can’t get jobs on tenure track and instead have to work as adjuncts for very low pay, no benefits. One of the fascinating parts about this is that, with a few exceptions, the people who do have tenure-track jobs and are at the top of their fields, do very little about what’s happened to their colleagues who work as adjuncts. Essentially this is the Uberizing of higher education. The professionals who are in a position of authority have done almost nothing about it. There are academics here and there who feel bad about what’s happened to adjuncts and do say things about it, but by and large, overall, there is no solidarity in that meritocracy. They just don’t care.

Do you think there’s a connection between the fact that the Democratic Party has turned against workers and the rise of Donald Trump?

Yes. Because if you look at the polling, Trump is winning the votes of a lot of people who used to be Democrats. These white, working-class people are his main base of support. As a group, these people were once Democrats all over the country. These are Franklin Roosevelt’s people. These are the people that the Democrats essentially decided to turn their backs on back in the 1970s. They call them the legatees of the New Deal. They were done with these guys, and now look what’s happened—they’ve gone with Donald Trump. That’s frightening and horrifying.

But Trump talks about their issues in a way that they find compelling, especially the trade issue. When he talks about trade, they believe him. Ironically, he’s saying the same things that Hillary Clinton and Bernie Sanders are saying about trade, but for whatever reason people find him more believable on this subject than they do Hillary Clinton.

Do you think that the rise of the Bernie campaign could herald a new era in the history of the Democratic Party?

I hope so. Both Trump and Bernie are turning their respective parties upside down. What Bernie is doing is very impressive. I interviewed him a few years ago and have always admired him. I think he’s a great man. To think that he could beat a Clinton in a Democratic primary anywhere in this country, let alone many primaries, was unthinkable a short time ago. And he’s done it without any Wall Street or big-business backing. That is extraordinary. It shows the kind of desperation that’s out there.

He has shown the way, and whether he gets the nomination or not (he probably won’t), there’ll be another Bernie four years from now. And there’ll also be another Trump. The Republican Party is being turned on its head much more violently than the Democrats. Hillary will probably get the nomination. I live in Washington, D.C., and I spend time around Hillary-style Democrats. They really think that they’ve got this thing in the bag. And I don’t just mean her versus Bernie. I mean the Democratic Party winning the presidency for the rest of our lives. From here to eternity. They can choose whoever they want. They could nominate anybody and they would win. They think they’re in charge.

One of your villains from the ’70s is Frederick Dutton, who wrote a book about how the Democratic Party needed to realign itself. You have a quote from him saying, “Every major realignment in U.S. political history has been accompanied by the coming of a large new group into the electorate.” You’re very critical of how he uses that idea in the ‘70s. But if you look at the newer voters attached to the Bernie campaign, it looks like the Democratic Party is experiencing something like that now.

Yes, in both cases you’re talking about a generational shift. That’s what he meant in 1971. He was talking about the counterculture and the “Now Generation” and the idea that they would come into the electorate and demand a different kind of politics—specifically his kind of politics.

Everybody always sees this new group that’s coming in as supporting what they want. That’s what he thought. I have a certain amount of contempt for that. Many years ago I wrote a book about the counterculture and how it was used for this purpose—specifically by the advertising industry. But Bernie’s doing the same thing. He’s using it for his own purposes.

Millenials’ take on the world is fascinating. Just a few years ago, people thought of them as very different. But now they’re coming out of college with enormous student debt, and they’re discovering that the job market is casualized and Uberized. The work that they do is completely casual. The idea of having a middle-class lifestyle in that situation is completely off the table for them.

Every time I think about these people, it burns me up. It makes me so angry what we’ve done to them as a society. It really gives the lie to Democratic Party platitudes about the world an education will open up for you. That path just doesn’t work anymore. Millenials can see that in their own lives very plainly.

So I’m very excited that they’re pro-Bernie. They really are the future.

Tobita Chow is chair of The People’s Lobby, an independent political organization based in Chicago, and co-author of “The Movement We Need,” a pamphlet on analysis and strategy for the progressive movement. He has been involved in faith-based community organizing on the South Side of Chicago since 2009, and is a leader in the “Moral Mondays Illinois” campaign against state budget cuts. He is an MDiv student at the Lutheran School of Theology at Chicago.

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