Fascism, American style

Posted on April 11, 2016 by Reid Mukai

By John W. Whitehead

“If we define an American fascist as one who in case of conflict puts money and power ahead of human beings, then there are undoubtedly several million fascists in the United States.”―Henry A. Wallace, 33rd Vice President of the United States

This is an indictment of every politician who has ever sold us out for the sake of money and power, it is a condemnation of every politician who has ever lied to us in order to advance their careers, and it is a denunciation of every political shill who has sacrificed our freedoms on the altar of Corporate America.

They’re all fascists.

If Donald Trump is a fascist—as nearly half of Americans surveyed believe—then so is every other politician in office or running for office in America who has ever prioritized money and power over human beings.

Truly, apart from Trump’s virulently bombastic comments and his metaphorical willingness to spit in the wind in order to garner media coverage and notoriety, how is he any more of a fascist than Hillary Clinton and the millions she has amassed from the financial sector?

How is Trump any more of a fascist than Barack Obama, whose willingness to march in lockstep with the military industrial complex has resulted in endless wars, covert drone strikes that have killed hundreds of civilians abroad, and militarized police who have killed thousands of American citizens here at home?

How is Trump any more of a fascist than Congress, the majority of whom are millionaires and who are more inclined to do the bidding of their corporate sponsors and benefactors, all the while remaining deaf to their less affluent constituents?

For that matter, how is Trump any more of a fascist than the Supreme Court whose decisions in recent years have been characterized most often by an abject deference to government authority, military and corporate interests?

Writing for the New York Times in 1944, Vice President Henry A. Wallace noted that “American fascists are most easily recognized by their deliberate perversion of truth and fact. Their newspapers and propaganda carefully cultivate every fissure of disunity, every crack in the common front against fascism. They use every opportunity to impugn democracy. They use isolationism as a slogan to conceal their own selfish imperialism. They cultivate hate and distrust . . .”

As Wallace concluded, American fascists are not pro-Constitution:

They are patriotic in time of war because it is to their interest to be so, but in time of peace they follow power and the dollar wherever they may lead . . . They claim to be super-patriots, but they would destroy every liberty guaranteed by the Constitution. They demand free enterprise, but are the spokesmen for monopoly and vested interest. Their final objective toward which all their deceit is directed is to capture political power so that, using the power of the state and the power of the market simultaneously, they may keep the common man in eternal subjection.

We are being played for fools. Again.

The United States of America, that dream of what a democratic republic ought to be, has become the Fascist States of America. We have moved beyond the era of representative government and entered a new age. You can call it the age of authoritarianism. Or fascism. Or oligarchy. Or the American police state.

Whatever label you want to put on it, the end result is the same.

Driven by our fears, we have entered into a corporate-controlled, militaristic state where all citizens are suspects, security trumps freedom, and the U.S. government does not represent the majority of American citizens but instead is ruled by the rich and powerful.

Any semblance of constitutional government that we might still enjoy today is a mere shadow, a mockery of what the founders envisioned. Constitutional government today—much like the farcical circus that purports to be the presidential election—is a sham, a hoax, an elaborate ruse maintained by the powers-that-be to mollify us into believing that we still have a say in the workings of our government. We do not.

Shortly after World War II, historian William L. Shirer predicted that America may be the first country in which fascism comes to power through democratic elections.

Former presidential advisor Bertram Gross also warned that we would not recognize fascism when it took over:

Anyone looking for black shirts, mass parties, or men on horseback will miss the telltale clues of creeping fascism . . . In America, it would be supermodern and multi-ethnic—as American as Madison Avenue, executive luncheons, credit cards, and apple pie. It would be fascism with a smile. As a warning against its cosmetic facade, subtle manipulation, and velvet gloves, I call it friendly fascism. What scares me most is its subtle appeal.

They were both right.

However, what we failed to realize is that the fascist coup took place long ago. It was that subtle and that incremental.

We are now ruled by the velvet-gloved, technologically savvy, militarized iron fist of what Gross termed “friendly fascism” or fascism with a smile. Having studied Shirer and Gross, tracked the rise of fascism in past regimes, and assimilated the necessary ingredients for a fascist state, I can attest to the fact—as I document in my book Battlefield America: The War on the American People—that the parallels to modern America are impossible to ignore.

Under fascism, the government:

is managed by a powerful leader (even if he or she assumes office by way of the electoral process)
assumes it is not restrained in its power (this is authoritarianism, which eventually evolves into totalitarianism)
ostensibly operates under a capitalist system while being undergirded by an immense bureaucracy
emits powerful and continuing expressions of nationalism through its politicians
has an obsession with national security while constantly invoking terrifying internal and external enemies
establishes a domestic and invasive surveillance system and develops a paramilitary force that is not answerable to the citizenry
and its various agencies (federal, state, and local) develop an obsession with crime and punishment (this is overcriminalization)
becomes increasingly centralized while aligning closely with corporate powers to control all aspects of the country’s social, economic, military, and governmental structures
uses militarism as a center point of its economic and taxing structure
and is increasingly imperialistic in order to maintain the military-industrial corporate forces.

Compare that to America today where, as economist Jeffrey Tucker rightly observes, “every industry is regulated. Every profession is classified and organized. Every good or service is taxed. Endless debt accumulation is preserved. Immense doesn’t begin to describe the bureaucracy. Military preparedness never stops, and war with some evil foreign foe, remains a daily prospect.”

Fascism thrives by hiding behind the entertainment spectacle that is partisan politics. As Tucker points out, “It’s incorrect to call fascism either right wing or left wing. It is both and neither . . . fascism does not seek to overthrow institutions like commercial establishments, family, religious centers, and civic traditions. It seeks to control them . . . it preserves most of what people hold dear but promises to improve economic, social, and cultural life through unifying their operations under government control.”

In this way, American-style fascism is deceptively appealing.

It appears friendly.

The news media covers the entertainment and political trivia. The basic forms of government remain intact. The legislators remain in session. There are elections.

Consent of the governed, however, no longer applies. Actual control has finally passed to the oligarchic elite controlling the government behind the scenes.

Yet the most crucial ingredient for fascism to succeed in America is that the majority of the people would have to agree that it’s not only expedient but necessary for the government to assume greater powers in order to keep them safe and secure, whether it’s by militarizing the police, stripping them of basic constitutional rights, criminalizing virtually every form of behavior, or spying on their communications, movements and transactions.

Sound familiar?

When you really drill down to what the various presidential candidates believe about the issues that will impact the future of our freedoms long-term—war, surveillance, civil liberties—you’ll find that most of them support the government’s position, which, conveniently enough, profits the corporate sector.

This is not freedom.

It is despotism, which Gross refers to as “faceless oligarchs [who] sit at command posts of a corporate-government complex that has been slowly evolving over many decades.” Gross explains:

In efforts to enlarge their own powers and privileges, they are willing to have others suffer the intended or unintended consequences of their institutional or personal greed. For Americans, these consequences include chronic inflation, recurring recession, open and hidden unemployment, the poisoning of air, water, soil and bodies, and, more important, the subversion of our constitution. More broadly, consequences include widespread intervention in international politics through economic manipulation, covert action, or military invasion . . .

It is, in Gross’ words, “pretended patriots who desecrate the American flag by waving it while waiving the law”:

I see at present members of the Establishment or people on its fringes who, in the name of Americanism, betray the interests of most Americans by fomenting militarism, applauding rat-race individualism, protecting undeserved privilege, or stirring up nationalistic and ethnic hatreds.

It is, concludes Gross, Big Business and Big Government in bed together:

In this present, many highly intelligent people look with but one eye and see only one part of the emerging Leviathan. From the right, we are warned against the danger of state capitalism or state socialism, in which Big Business is dominated by Big Government. From the left, we hear that the future danger (or present reality) is monopoly capitalism, with finance capitalists dominating the state. I am prepared to offer a cheer and a half for each view; together, they make enough sense for a full three cheers.Big Business and Big Government have been learning how to live in bed together and despite arguments between them, enjoy the cohabitation. Who may be on top at any particular moment is a minor matter—and in any case can be determined only by those with privileged access to a well-positioned keyhole.

When the votes have all been counted, “we the people” will be the losers.

The joke will be on us. Whether we ever realize it not, the enemy is not across party lines, as they would have us believe. It has us surrounded on all sides.

Even so, we’re not yet defeated.

We could still overcome our oppressors if we cared enough to join forces and launch a militant nonviolent revolution—a people’s revolution that starts locally and trickles upwards—but that will take some doing.

It will mean turning our backs on the political jousting contests taking place on the national stage and rejecting their appointed jesters as false prophets. It will mean not allowing ourselves to be corralled like cattle and branded with political labels that have no meaning anymore. It will mean recognizing that all the evils that surround us today—endless wars, drone strikes, invasive surveillance, militarized police, poverty, asset forfeiture schemes, overcriminalization, etc.—were not of our making but came about as a way to control and profit from us.

It will mean “voting with our feet” through sustained, mass civil disobedience. As journalist Chris Hedges points out, “There were once radicals in America, people who held fast to moral imperatives. They fought for the oppressed because it was right, not because it was easy or practical. They were willing to accept the state persecution that comes with open defiance. They had the courage of their convictions. They were not afraid.”

Ultimately, it will mean refusing to be divided, one against each other, as Democrats versus Republicans, and instead uniting behind the only distinction that has ever mattered: “we the people” against tyranny.

Constitutional attorney and author John W. Whitehead is founder and president of The Rutherford Institute. His new book “The Freedom Wars” (TRI Press) is available online at www.amazon.com. Whitehead can be contacted at johnw@rutherford.org. Information about The Rutherford Institute is available at www.rutherford.org.

The Media and the Corporate State

Posted on April 8, 2016 by Reid Mukai

By Kevin Carson

Source: Center for a Stateless Society

In an interview with Cenk Uygur March 23, Bernie Sanders noted, “The media is an arm of the ruling class of this country,” going on to point out its concentrated corporate ownership (for example, Disney’s ownership of ABC, Comcast’s of NBC, etc). This corporate media has a vested interest in not covering real news in a way that examines the root causes of problems. Such coverage might lead to radical threats to the power structure. Of course he’s quite right. And it’s not a situation that came about by accident; the state played a central role in bringing it about.

The mainstream media — network news shows, cable news networks, major newspapers and wire services — is part of an interlocking set of governing institutions that also includes government agencies, large corporations, and universities, think tanks and charitable foundations. These institutions share a common organizational style — top-down hierarchies and enormous managerial bureaucracies, Weberian rules, million-dollar executives — and tend to shuffle their personnel back and forth from one such institution to the other.

This whole interlocking complex of institutions goes back to the rise of such institutions in the late 19th century as the dominant organizational form — a top-down transformation of the American economy and society that the state and the plutocratic interests controlling it imposed on the country.

From the beginning of radio, the state’s regulatory approach fostered a cartelized system of nationwide media networks. The FCC licensing system permitted a limited number of radio stations compared to what the spectrum permitted. Had the full spectrum been opened up on a first-come first-served basis, with something like the common law of riparian rights preventing new stations from broadcasting on frequencies that might disrupt broadcasts of existing stations, there would have been many more stations. And had the spectrum been open to all homesteaders, there would have been a variety of participants including amateurs and hobbyists, and community and labor groups. For that matter the FCC itself might have awarded its licenses to such a variety of groups; but instead it awarded them almost entirely to commercial interests. And given a limited number of salable licenses, they inevitably appreciated in value just like taxicab medallions, so that only plutocratic interests could afford them.

But before the mass broadcast media ever came into existence, there was already a nationwide advertising market in place fostered by the corporate centralization of the economy, and a complex of corporate and government institutions to influence the content of media.

The existence of a nationwide advertising market, coupled with “intellectual property” in content and rebroadcast rights, further reinforced the concentration of broadcast media into nationwide networks.

And the pre-existence of an interlocking system of corporate, state and civil society institutions into which the media could be assimilated, created the systemic pressures and filters behind what Noam Chomsky and Edward Herman called the media’s “Propaganda Model.” This doesn’t just mean the cruder forms of influence like direct advertiser vetoes of stories, or even editorial fear of offending advertisers — although that obviously plays a real part in filtering content. More important is the common class background and affinity, and common social ties of those in charge of the media and governing institutions, and the symbiotic organizational structures of the institutions themselves.

Network executives, talk show hosts, and newspaper publishers and editors travel in the same social circle as the powerful state and corporate figures whom they’re theoretically supposed to serve as watchdogs over. So you have “responsible” and “patriotic” news organizations refusing to report on government war crimes, and people like publisher Katherine Graham of the Washington Post telling an appreciative audience of CIA spooks that “there are some things the public doesn’t need to know.”

You have a “professional” journalistic culture, since Walter Lippmann’s time, dominated by the same managerial ethos as other governing institutions, seeing their job as simply reporting “objectively” what “both sides” say without regard to facts. And given the limited (and dwindling) resources for actual reporting, you have the majority of TV news anchor scripts and newspaper column inches taken up either by quotes from public figures or the output of public spokespersons and corporate and state PR departments. You have wire service correspondents in countries where the U.S. is backing local death squads or military coups, sitting in hotel rooms writing their copy directly from U.S. embassy handouts.

The cumulative effect of all these filters, without much central direction, is a sort of “invisible hand” mechanism with exactly the result Chomsky and Herman described: a corporate media that reports news from the perspective of the state and the corporations in control of it almost the same as if they were officially censoring it.

So Sanders is right: the media is an arm of the ruling class — and the state is at the heart of it.

American Cartel: How America’s Two Major Parties Helped Destroy Democracy

Posted on April 6, 2016 by Reid Mukai

By Frank Castro

Source: The Hampton Institute

Cartel: An association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition.

A little over two decades ago, on December 2, 1993, the principle engineer of Colombia’s infamous cocaine empire, Pablo Escobar, was killed while fleeing police on the barrio rooftops of his hometown, Medellin. Before he died he had amassed an organization of state-like power, challenging, in fact, the government of Columbia itself over the question of its extradition policies-and winning. Dubbed the Medellin drug cartel, his international cocaine operation grew to prominence functioning similarly to the corporations which dominate today’s global economy. Escobar knew, by controlling every possible link in the drug chain from production to retail, he could corral suppliers under a single umbrella, dictate the price of his product, and severely limit any would-be competitors from challenging his power.

Escobar was not alone in learning from the strategies of corporate giants. If anything he was late. Few organizations have pervasively and durably monopolized a market as well as America’s Republican and Democratic parties. The two dominant machines steering the U.S. electorate have consistently diminished the potential for a freer America. That’s because the reality is, rather than arch rivals, liberals and conservatives are two factions of the same team. Both are capitalist. Both are imperialist. Both are white supremacist surrogates. And both are controlled by a plutocratic elite who have discovered what Escobar learned in his early twenties, that competition is best neutralized by eliminating all possible outliers. We merely perceive the two parties as markedly different because of the degree to which the spectrum of possibilities has been narrowed.
American Cartel

Politics, at its barest, is a market characterized by power-and the struggle for how power will be distributed. As CrimethInc illustrated some time ago, in this market ideas function similar to currency. Delineated by ideas which can build capital enough for the acquisition of more power, and those which might unbind power, political parties are tethered to the same basic operating principles of any capitalist enterprise. They must solidify market share in the realm of ideas and grow, wherever and whenever possible, or go bankrupt. Incubated within this constant power play, self-preservation becomes the party’s central priority; and it does not matter if the ideas which accomplish this outcome are beneficial to the electorate or detrimental, so long as it achieves the imperative to survive.

Political organizations which maintain growth long enough to survive often do so by normalizing their ideological framework. When they have obtained a disproportionate amount of influence over their immediate surroundings, they can metastasize into monopolies and control large swaths of the idea-economy. New ideas about how society ought to function can enter the market to contest old ideas, but usually encapsulated within reforms incapable of unseating the dominant paradigm. Characteristic of any capitalist system, once market monopolies are established “power tends to flow upward to the top of a hierarchy, from which the masters, the ones qualified to employ it, decide matters for everyone else.”

Remember the age-old question, what do all those with power want? More power. As such, two monopolies have dominated American politics for over 150 years-the Democratic Party, founded in 1828, and the Republican Party, founded in 1854. Together, they form a political cartel, or an association of political parties with the purpose of maintaining concentrated power and restricting or repressing competition. Throughout the past century its loosely managed agreements, often wholly unofficial, but embedded deep within its standard operation, have been the quasi-coordinated production, distribution, and enforcement of a set of normalized choices which reflect only the range of needs of private corporate power.

Essentially, to solidify and gain greater control, the two parties staked out a set of positions within a predetermined and standardized framework which express the basic ideas of the status quo. This way any “new” solutions about what might be possible tend toward ideas which pose no serious danger to the framework itself, which produce reforms only capable of gutting radical resistance while leaving the underlying problems intact. Any outliers are assimilated or positioned to enhance the strength of current institutions. In other words, all ideas must first be filtered through the umbrella of the Democrat-Republican cartel, which dictates the pedigree of ideas both old and new, and therefore severely limiting any competition from threatening its hegemony.
American Sicarios

Central to the project of any cartel is control. And within most drug cartels there is an armed group responsible for carrying out violence in an effort to maintain it. In Colombia they were called sicarios. Though the violence is systematically different, American sicarios are most accurately found in state institutions like the Central Intelligence Agency (CIA) and the Federal Bureau of Investigation (FBI). Such an observation should not be seen as hyperbole. Even the most marginally informed American should know their government frequently has been involved in shameful acts of violence, whether it was the assassination, framing, and political neutralization of black, brown, indigenous, and left-radical movements and their leaders, or organized coups in the Middle East, Africa, and Central or South America.

Without enforcers America’s political cartel simply could not exist. As I wrote in Gangs Of The State: Police And The Hierarchy Of Violence , our society operates on a clearly defined, yet often unarticulated, hierarchy of violence; and the function of politicians and police agencies is to normalize and enforce that violence. As an institution, these agencies act as state-sanctioned gangs, or, in this instance, the sicarios of America’s political ideology, charged with the task of upholding the violent, racist hierarchy of white supremacist capitalism. Wherever and whenever possible, they are tasked with solidifying a monopoly of power where all violence from/by those higher on the hierarchy upon those lower can be normalized into business as usual. Any deviation from the status quo, any resistance whatsoever, is met with brutal repression.

For those familiar with United States history, the record of repression against anti-capitalist groups has been a source of considerable alliance between Democrats and Republicans. In A People’s History of the United States, recounting America’s anti-leftist atmosphere after Russia’s Bolshevik Revolution, Howard Zinn wrote:

“In early September 1917, Department of Justice agents made simultaneous raids on forty-eight IWW [International Workers of the World] meetings across the country, seizing correspondence and literature that would become courtroom evidence. Later that month, 165 IWW leaders were arrested for conspiracy to hinder the draft, encourage desertion, and intimidate others in connection with labor disputes. One hundred and one went on trial [en masse] in April 1918; it lasted five months, the longest criminal trial in American history up to that time… [T]he jury found them all guilty. The judge sentenced [IWW president William “Big Bill”] Haywood and fourteen others to twenty years in prison; thirty-three were given ten years, the rest shorter sentences. They were fined a total of $2,500,000. The IWW was shattered.”

Commonality between the United States’ two major political parties has been most visible when viewed through its historically imperialist and anti-communist foreign policy. Beginning with the expansion of Soviet influence, the relationship is best described by a popularized euphemism of the Cold War Era: Partisanship ends at the water’s edge, meaning, if the two factions of the cartel could ever totally agree, it must be on the dismembering of communism everywhere. As the growth of nationalist and anti-colonialist movements abroad strengthened in concert with labor movements in America, a fierce need for bipartisan crackdown to preserve the dominant regime emerged. Zinn once again lends clarity:

“The United States was trying, in the postwar decade [of World War II], to create a national consensus-excluding the radicals, who could not support a foreign policy aimed at suppressing revolution-of conservatives and liberals, Republicans and Democrats, around the policies of the Cold War and anti-Communism. Such a coalition could best be created by a liberal Democratic President, whose aggressive policy abroad would be supported by conservatives… [I]f the anti-Communist mood became strong enough, liberals could support repressive moves at home which in ordinary times would be seen as violating the tradition of liberal tolerance.”

Repressive moves were exactly what happened. Imperialist consensus not only generated cohesion on issues of foreign policy, it refined a coordinated relationship of narrowed domestic power between Democrats and Republicans, providing the groundwork to enact an increasingly clandestine police-state. Repression of previous magnitude would continue against not only anti-capitalists, but against movements for self-determination throughout the ’60s and ’70s among black people, Puerto Ricans, Chicanos, and indigenous populations, most notably through the FBI’s COINTELPRO operations. The tactics for gutting competing political currents pioneered by police agencies then became standard operating procedure, evolved into pervasive surveillance apparatuses, and have been deployed in both recent uprisings against Occupy Wall Street and Black Lives Matter protesters.
American Crime Lords

If there is a position within the cartel’s classic hierarchy embodied by most liberal and conservative politicians, it would not be the rank of crime lord, but rather that of lieutenant, the second highest position. Lieutenants are responsible for supervising the sicarios within their own territories-in our case, their respective states. They are allowed discretion to carry-out the day-to-day operations of the cartel, to ensure its smooth operation. Crucial duties include voting on legislation filtered through existing idea-monopolies, which remain firmly rooted within the sanctioned political spectrum, and policing the spectrum’s established borders by criminalizing outliers, especially ones that cannot be assimilated and must be repositioned to reinforce the existing framework. If they perform well enough, they become the focus of investigative inquiry and obscure the higher authority they serve.

The rank of real crime boss goes to richest of the rich. The multi-billionaires of America who-in recent years-have given up to 42 percent of all election contributions, and captured the state in the process. Brothers Charles and David Koch, owners of Koch Industries, the second largest privately owned company in the United States, are known for funding the Republican political machine, giving over one hundred million dollars to far-right causes. But the Kochs are no more alone in their policy purchasing than Republicans are in begging the super wealthy for campaign funds. Democrats have increasingly relied on it too. Money awarded to Democrats from corporate PACs now far outstrips what used to come from labor unions and trial lawyers. For instance, corporate PACs donated $164.3 million to Republicans during the 2010 election season and $164.3 million to Democrats also. Unions gave $59-$79 million.

Owning a cartel may not seem cheap, but it pays dividends. It accomplishes this not only through generating enormously disproportionate wealth, or even through buying elections, but by imposing upon the impoverished a set of values which ensure their continued exploitation. Karl Marx himself pointed this out, explaining that “the class which is the ruling material force of society, is at the same time its ruling intellectual force.” For the poor American voter this means individuals are made to develop in such a fashion that their development fosters the strength of the capitalist state. At their core, working class people are constantly being sold and resold their own disempowerment, until finally we sell it to ourselves-over and over again. It is a sinister, but brilliant, stroke of genius-what better way to destroy the possibility of expropriation than to make disparity gold.

Michel Foucault described this process of perpetually re-inscribing within ourselves, and each other, the relation we have to power as the effect of unspoken warfare, a war where we build within our social institutions, and our very bodies, an ultimate disequilibrium. We self-police so thoroughly that when power’s effects upon us begin self-reproducing “there is no need for arms, physical violence, [or] material constraints,” just an inspecting gaze, “which each individual under its weight will end by interiorisation to the point that he is his own overseer, each individual thus exercising this surveillance over, and against, himself.” In short, we become our own worst enemies. The rules and values of the rich become the self-inflicted rules and values of the poor. But they never benefit us. And we quit asking why.
American Plutocracy

Democracy describes today’s America by only the most facile standards. It has never really described America anyway. Plutocracy is the accurate word. And our plutocratic overlords keep us in a hamster-wheel choosing which lieutenant we will take orders from next for practical reasons. It gives them, and the political parties they own, a sort of object permanence. We understand the prescriptions of those in power even when we cannot observe them directly; because we have been inundated by their surrogates and transformed into a passive body meant only to ratify our subjugation. Imagine waking up in a prison cell with the choice to continue sleeping on an unpadded iron bench or a concrete floor. No matter what “decision” you make, neither can destroy the cage. This is the reality of our political climate, a series of non-decisions masquerading as choice.

Ultimately, the emergence of plutocracy has not been the fault of the working class. Even though we have internalized many of the mechanisms used to exploit us, we constantly have been outpaced, outgunned, and outright demoralized. And in our attempts at democracy we have fundamentally failed to understand that political freedom cannot exist in the absence of economic freedom. They are inextricably linked, like a tree to its roots. Now that many Americans are beginning to see how capitalism has been the physical incarnation of inequality, we must move forward in this moment and reconcile with another unassailable truth: That capitalism’s relation to democracy will always be characterized by adversary, not coexistence. In such an environment, America’s major political parties remain henchmen to a perverse and morally bankrupt distribution of power.

The Slow, Inevitable Collapse of the Two-Party System

Posted on April 4, 2016 by Reid Mukai

By Russell A. Whitehouse

Source: Strategic Culture Foundation

In this election year, it’s clear that a seismic political shift is rumbling through America. Widespread discontent for the status quo is surfacing from both the left and right. A year ago, it would have been impossible to envision a card-carrying socialist and a pre-WWII style populist mounting legitimate presidential campaigns (much less without Super PACs). Now, far-left and far-right sentiments are emerging from the underground as perfectly palatable options to Middle America. Establishment darlings like Hillary Clinton, Jeb Bush & Marco Rubio have faced extreme pressure from the New Normal in their respective political tents.

It has become clear that the traditional 2-party system in America is starting to erode. Sanders’ supporters view Clinton as too untrustworthy & beholden to Big Business. Meanwhile Trump’s blue-collar base has rejected rank-and-file Republicans as being too unsympathetic to their economic concerns, while his surprising chunk of the evangelical contingent is refuting the Bush-flavored puritanism of Ted Cruz. Conversely, Clinton’s supporters reject Sander’s bold platform as delusional and Cruz’s base is increasingly being filled by #NeverTrump neocon purists and Romey-ite country club Republicans.

One can see political parallels across the pond, in the UK’s 2015 Parliamentary elections. The two main parties in Westminster Palace, Conservative and Labour (roughly equivalent to the GOP and Democrats), were shaken up by two popular insurgencies. UKIP, the UK Independence Party, rose up from the rising flames of the relatively conservative British heartland’s fears of free trade in the EU and immigration, winning an eighth of the popular vote in England. To the north, SNP, the Scottish National Party, won 95% of Scotland’s seats by inspiring among other things, record youth turnout and social media support (sound familiar?), with a message of social democracy and defiance against the British status quo.

Intra-party schisms are also forming in the two Anglophone democracies. The Tories are tearing themselves apart over the Brexit, austerity and jockeying to succeed Cameron as Party Leader, while the American neocons are assessing the fallout of Trump’s ascendance while in free fall. Labour officials are debating whether to follow their insurgent leader Jeremy Corbyn to the far Left after 20 years of Tony Blair’s New Labour movement, which moved the party to the center to win back the support of big business and blue-collar voters. The New Labour centrist putsch coincided with Bill Clinton (and later Obama’s) similar efforts as the face of the Democrats. Now, Democratic voters are beginning to second-guess this political realignment, spearheaded by the presumptive Democratic nominee’s husband. Her opponent Bernie Sanders is siphoning away the youth vote and blue-collar moderates from the Democratic establishment, two of the Party’s traditional constituencies, by railing against neoliberal policies like free trade and social welfare cuts.

Given the rise of social-democratic populism and nativist-protectionist populism to either flank of American politics, it would make sense to look at the formation of entirely new parties. Bernie Sanders can form a Stars-and-Pinstripes version of SNP; he too has the momentum of a more secular, progressive generation reaching political maturity as the more religious, conservative Baby Boomers begin to die out. Assuming Trump completes his takeover of the Grand Old Party at July’s convention, the neocon brain trust can form a new conservative movement; this is already being planned by members of the #NeverTrump triad. Evangelical and free market diehards can unite to mount a serious challenge to Trump’s right by fielding a Texas crusader like Ted Cruz or Rick Perry, or Mormon elder statesman Mitt Romney.

Regardless of how Trump and Sanders fare in their respective conventions, they could still operate a serious race for the White House. Both New York loudmouths boast a gigantic wave of rabid new voters, as well as a wellspring of working-class Americans desperate to reverse Wall Street’s increasingly oligarchical dominance, mass layoffs/underemployment, stagnant wages, crumbling infrastructure & the other byproducts of the neoliberal-neoconservative economic policy alliance. Sanders could march into November as the nominee of the new Democratic Socialist Party, with a trail of young, idealistic future leaders tweeting and live-streaming behind him. Depending on July’s RNC, we could see a Make America Great Again Party (MAGAP, for short) trumpeting Trump’s message of putting power back in the hands of the American working class or a Romney-Cruz True Conservatives Party ticket touting Christian piety and Wall St fiscal policy.

Get used to Sanders, Clinton, Trump & Cruz. You may see all 4 of them, come November…

It’s Not Just the Corrupt, Cronyist Republican Party That’s Imploding–the Corrupt, Cronyist Democratic Party Is Imploding, Too

Posted on March 28, 2016 by Reid Mukai

By Charles Hugh Smith

Source: Of Two Minds

Anyone who thinks the Democratic Party isn’t imploding for the exact same reasons the Republican party is imploding is purposefully ignoring reality.

Legions of pundits are crawling out of the woodwork to gloat over the implosion of the Republican Party. Corrupt, crony-capitalist, Imperial over-reach–good riddance.

But far fewer pundits dare declare that the other corrupt, crony-capitalist party of Imperial over-reach–yes, the Democratic Party–is imploding, too, for the same reason: it too is rotten to the core and exists solely to protect the privileges of the few at the expense of the many.

Democrats need to ask themselves: if Hillary Clinton is the shining epitome of what the Democratic Party stands for and represents, then what does the Democratic party stand for other than corruption, greed, pay-to-play, Imperial over-reach, elites who are above the law, and a permanent war state overseen by a corporatocracy bent on protecting the unearned privileges of the few at the expense of the many?

How about the Clintons’ $153 million in speaking fees? Just good ole democracy in action?

How about Hillary’s “super-delegates”–you know, the delegate system that makes the old Soviet Politburo look democratic by comparison. Hillary has rigged the media coverage, a fact that is painfully obvious to anyone who is non-partisan. The New York Times, for example, couldn’t wait to announce in blaring headlines that Hillary regains the momentum after she rigged a couple-hundred vote caucus in Nevada–and barely won that.

The mainstream media fell all over themselves to declare Hillary the clear winner in the Michigan debate, and were delighted to run story after story of Hillary’s commanding 21-point lead– all designed, of course, to discourage Sanders supporters from even going to the polls.

It was obvious to non-partisan observers that Sanders won the debate–no question. And he went on to trounce Clinton despite her “commanding 21-point lead”, which was quickly finessed away by a servile corporate media.

How many pundits are commenting on the fact that Democratic voters are staying away in droves? Or that–according to one zany poll–venereal disease is more popular than Hillary among young quasi-Democratic voters?

Every American knows the system is rigged to guarantee the skim of the protected classes. Insider Peggy Noonan recently penned an essay calling out the protected class, which can only be protected by stripmining the unprotected: Trump and the Rise of the Unprotected.

The only difference between the two parties’ protected class is the Democrats protect public union employees from any market or fiscal realities, until their unaffordable pay and health/pension benefits bankrupt local governments. At that point, the party bosses will come crying to Washington, D.C. to bail out benefit and payroll costs that were never fiscally viable in the first place.

The protected classes love the Status Quo, because it exists to protect their privileges. The unprotected classes loathe the Status Quo for the same reason.

Anyone who thinks the Democratic Party isn’t imploding for the exact same reasons the Republican party is imploding is purposefully ignoring reality–a reality that threaten the protected classes’ lock on wealth and power.

The Federal Reserve and the Global Fracture

Posted on March 16, 2016 by Reid Mukai

An Interview with Finnish Journalist Antti J. Ronkainen

Michael Hudson

Source: The Unz Review

Antti J. Ronkainen: The Federal Reserve is the most significant central bank in the world. How does it contribute to the domestic policy of the United States?

Michael Hudson: The Federal Reserve supports the status quo. It would not want to create a crisis before the election. Today it is part of the Democratic Party’s re-election campaign, and its job is to serve Hillary Clinton’s campaign contributors on Wall Street. It is trying to spur recovery by resuming its Bubble Economy subsidy for Wall Street, not by supporting the industrial economy. What the economy needs is a debt writedown, not more debt leveraging such as Quantitative Easing has aimed to promote. But the Fed is in a state of denial that the U.S. and European economies are plagued by debt deflation.

The Fed uses only one policy: influencing interest rates by creating bank reserves at low give-away charges. It enables banks too make easy gains simply by borrowing from it and leaving the money on deposit to earn interest (which has been paid since the 2008 crisis to help subsidize the banks, mainly the largest ones). The effect is to fund the asset markets – bonds, stocks and real estate – not the economy at large. Banks also are heavy arbitrage players in foreign exchange markets. But this doesn’t help the economy recover, any more than the ZIRP (Zero Interest-Rate Policy) since 2001 has done for Japan. Financial markets are the liabilities side of the economy’s balance sheet, not the asset side.

The last thing either U.S. party wants is for the election to focus on this policy failure. The Fed, Treasury and Justice Department will be just as pro-Wall Street under Hillary. There would be no prosecutions of bank fraud, there would be another bank-friendly Attorney General, and a willingness to subsidize banks now that the Dodd-Frank bank reform has been diluted from what it originally promised to be.

So let’s go back to beginning. When the Great Financial Crisis escalated in 2008 the Fed’s response was to lower its main interest rate to nearly zero. Why?

The aim of lowering interest rates was to provide banks with cheap credit. The pretense was that banks might lend to help the economy get going again. But the Fed’s idea was simply to re-inflate the Bubble Economy. It aimed at restoring the value of the mortgages that banks had in their loan portfolios. The hope was that easy credit would spur new mortgage lending to bid housing prices back up – as if this would help the economy rather than simply raising the price of home ownership.

But banks weren’t going to make mortgage loans to a housing market that already was over-lent. Instead, homeowners had to start paying down the mortgages they had taken out. Banks also reduced their credit-card exposure by a few hundred billion dollars. So instead of receiving new credit, the economy was saddled with having to repay debts.

Banks did make money, but not by lending into the “real” production and consumption economy. They mainly engaged in arbitrage and speculation, and lending to hedge funds and companies to buy their own stocks yielding higher dividend returns than the low interest rates that were available.

In addition to the near zero interest rates, the Fed bought US Treasury bonds and mortgage backed securities (MBS) with almost $4 trillion during three rounds of Quantitative Easing stimulus. How have these measures affected the real economy and financial markets?

In 2008 the Federal Reserve had a choice: It could save the economy, or it could save the banks. It might have used a fraction of what became the vast QE credit – for example $1 trillion – to pay off the bad mortgages and write them down. That would have helped save the economy from debt deflation. Instead, the Fed simply wanted to re-inflate the bubble, to save banks from having to suffer losses on their junk mortgages and other bad loans.

Keeping these debts on the books, in full, let banks foreclose on defaulting homeowners. This intensified the debt-deflation, pushing the economy into its present post-2008 depression. The debt overhead is keeping it depressed.

One therefore can speak of a financial war waged by Wall Street against the economy. The Fed is a major weapon in this war. Its constituency is Wall Street. Like the Justice and Treasury Departments, it has been captured and taken hostage.

Federal Reserve chairwoman Janet Yellen’s husband, George Akerlof, has written a good article about looting and fraud as ways to make money. But instead of saying that looting and fraud are bad, the Fed has refused to regulate or move against such activities. It evidently recognizes that looting and fraud are what Wall Street is all about – or at least that the financial system would come crashing down if an attempt were made to clean it up!

So neither the Fed nor the Justice Department or other U.S. Government agencies has sanctioned or arrested a single banker for the trillions of dollars of financial fraud. Just the opposite: The big banks where the fraud was concentrated have been made even larger and more dominant. The effect has been to drive out of business the smaller banks not so involved in derivative bets and other speculation.

The bottom line is that banks made much more by getting Alan Greenspan and the Clinton-Bush Treasury officials to deregulate fraud than they could have made by traditional safe lending. But their gains have increased the economy’s overhead.

Do you believe Mike Whitney’s argument that QE was about a tradeoff between the Fed and the government: the Fed pumped the new bubble and saved the banks that the government didn’t need to bail out more banks. The government’s role was to impose austerity so that inflation and employment didn’t rise – which would have forced the Fed to raise interest rates, ending its QE program? source: http://www.counterpunch.org/2016/01/15/the-chart-that-explains-everything/]

That was a great chart that Mike put up from Richard Koo, and you should reproduce it here. It shows that the Fed’s enormous credit creation had zero effect on raising commodity prices or wages. But stock market prices doubled in just six years, 2008-15, and bond prices rose to new peaks. Banks left much of the QE credit on deposit with the Fed, earning an interest giveaway premium.

(Richard Koo: “The struggle between markets and central banks has only just begun,”

http://www.businessinsider.com/richard-koo-struggle-between-markets-and-central-banks-has-only-just-begun-2015-9?r=UK&IR=T

The important point is that the Fed (backed by the Obama Administration) refused to use this $4 trillion to revive the production-and-consumption economy. It claimed that such a policy would be “inflationary,” by which it meant raising employment and wage levels. The Fed thus accepted the neoliberal junk economics proposing austerity as the answer to any problem – austerity for the industrial economy, not the Fed’s own Wall Street constituency.

According to a Fed staff report, QE would lower the exchange rate of dollar to the other currencies causing competitiveness boost for the U.S. firms. Former finance minister of Brazil Guido Mantega, as well as the chairman of Central Bank of India Raghuram Rajan, have described the Fed’s QE as a “currency war.” What’s your take?

The Fed’s aim was simply to provide banks with low-interest credit. Banks lent to hedge funds to buy securities or make financial bets that yielded more than 0.1 percent. They also lent to companies to buy their own stock, and to corporate raiders for debt-financed mergers and acquisitions. But banks didn’t lend to the economy at large, because it already was “loaned up,” and indeed, overburdened with debt.

Lower interest rates did spur the “carry trade,” as they had done in Japan after 1990. Banks and hedge funds bought foreign bonds paying higher rates. The dollar drifted down as bank arbitrageurs could borrow from the Fed at 0.1 percent to lend to Brazil at 9 percent. Buying these foreign bonds pushed up foreign exchange rates against the dollar. That was a side effect of the Fed’s attempt to help Wall Street make financial gains. It simply didn’t give much consideration to how its QE flooding the global economy with surplus dollars would affect U.S. exports – or foreign countries.

Exchange rate shifts don’t affect export trends as much as textbook models claim. U.S. arms exports to the Near East, and many technology exports are non-competitive. However, a looming problem for most countries is what may happen when ending QE increases the dollar’s exchange rate. If U.S. interest rates go back up, the dollar will strengthen. That would increase the cost to foreign countries of paying dollar-denominated debts. Countries that borrowed all dollars at low interest will need to pay more in their own currencies to service these debts. Imagine what would happen if the Federal Reserve let interest rates rise back to a normal level of 4 or 5 percent. The soaring dollar would push debtor economies toward depression on capital account much more than it would help their exports on trade account.

You have said that QE is fracturing the global economy. What do you mean by that?

Part of the flood of dollar credit is used to buy shares of foreign companies yielding 15 to 20 percent, and foreign bonds. These dollars are turned over to foreign central banks for domestic currency. But central banks are only able to use these dollars to buy U.S. Treasury securities, yielding about 1 percent. When the People’s Bank of China buys U.S. Treasury bonds, it’s financing America’s dual budget and balance-of-payment deficits, both of which stem largely from military encirclement of Eurasia – while letting U.S. investors and the U.S. economy get a free ride.

Instead of buying U.S. Treasury securities, China would prefer to buy American companies, just like U.S. investors are buying Chinese industry. But America’s government won’t permit China even to buy gas station companies. The result is a double standard. Americans feel insecure having Chinese ownership in their companies. It is the same attitude that was directed against Japan in the late 1980s.

I wrote about this financial warfare and America’s free lunch via the dollar standard in Super Imperialism (2002) and The Bubble and Beyond (2012), and about how today’s New Cold War is being waged financially in Killing the Host (2015).

The Democrats loudly criticized the Bush administration’s $700 billion TARP-program, but backed the Fed’s QE purchases worth of almost $4 trillion during the Obama administration. How does this relate to the fact that officially, QE purchases were intended to support economic recovery?

I think you’ve got the history wrong. My Killing the Host describes how the Democrats supported TARP, while the Republican Congress opposed it on populist grounds. Republican Treasury Secretary Hank Paulson offered to use some of the money to aid over-indebted homeowners, but President-elect Obama blocked that – and then appointed Tim Geithner as Treasury Secretary. FDIC head Sheila Bair and by SIGTARP head Neil Barofsky have written good books about Geithner’s support for Wall Street (and especially for Citigroup and Goldman Sachs) against the interests of the economy at large.

If you are going to serve Wall Street – your major campaign contributors – you are going to need a cover story pretending that this will help the economy. Politicians start with “Column A”: their agenda to reimburse their campaign contributors – Wall Street and other special interests. Their public relations team and speechwriters then draw up “Column B”: what public voters want. To get votes, a rhetorical cover story is crafted. I describe this in my forthcoming J is for Junk Economics, to be published in March. It’s a dictionary of Orwellian doublethink, political and economic euphemisms to turn the vocabulary around and mean the opposite of what actually is meant.

How do TARP and QE relate to the Federal Reserve’s mandate about price stability?

There are two sets of prices: asset prices and commodity prices and wages. By “price stability” the Fed means keeping wages and commodity prices down. Calling depressed wage levels “price stability” diverts attention from the phenomenon of debt deflation – and also from the asset-price inflation that has increased the advantages of the One Percent over the 99 Percent. From 1980 to the present, the Fed has inflated the largest bond rally in history as a result of driving down interest rates from 20 percent in 1980 to nearly zero today, as you have noted.

Chicago School monetarism ignores asset prices. It pretends that when you increase the money supply, this increases consumer prices, commodity prices and wages proportionally. But that’s not what happens. When banks created credit (money), they don’t lend much to people to buy goods and services or for companies to make capital investments to employ more workers. They lend money mainly to transfer ownership of assets already in place. About 80 percent of bank loans are mortgages, and the rest are largely for stocks and bond purchases, including corporate takeovers and stock buybacks or debt-leveraged purchases. The effect is to bid up asset prices, while loading down the economy with debt in the process. This pushes up the break-even cost of doing business, while imposing debt deflation on the economy at large.

Wall Street isn’t so interested in exploiting wage labour by hiring it to produce goods for sale, as was the case under industrial capitalism in its heyday. It makes its gains by riding the wave of asset inflation. Banks also gain by making labour pay more interest, fees and penalties on mortgages, and for student loans, credit cards and auto loans. That’s the postindustrial financial mode of exploiting labor and the overall economy. The Fed’s QE program increases the price at which stocks, bonds and real estate exchange for labour, and also promotes debt leverage throughout the economy.

Why don’t economists distinguish between asset-price and commodity price inflation?

The economics curriculum has been turned into an exercise for students to pretend that a hypothetical parallel universe exists in which the rentier classes are job creators, necessary to help economies recover. The reality is that financial modes of getting rich by debt leveraging creates a Bubble Economy – a Ponzi scheme leading to austerity and shrinking markets, which always ends in a convulsion of bankruptcy.

The explanation for why this is not central to today’s economic theory is that the discipline has been captured by this neoliberal tunnel vision that overlooks the financial sector’s maneuvering to make quick trading profits in stocks, bonds, mortgages and derivatives, not to take the time and effort to develop long-term markets. Rentiers seek to throw a cloak of invisibility around how they make money. They know that if economists don’t measure their wealth and the public does not see it, voters will be less likely to bring pressure to regulate and tax it.

Today’s central economic problem is that inflating asset prices by debt leveraging extracts more interest and financial charges. When the resulting debt deflation ends up hollowing out the economy, creditors try to blame labour, or government spending (except for bailouts and QE to help Wall Street). It is as if debtors are exploiting their creditors.

If there is a new class war, what is the current growth model?

It’s an austerity model, as you can see from the eurozone and from the neoliberal consensus that cites Latvia as a success story rather than a disaster leading to de-industrialization and emigration. In real democracies, if economies polarize like they are doing today, you would expect the 99 Percent to fight back by electing representatives to enact progressive taxation, regulate finance and monopolies, and make public investment to raise wages and living standards. In the 19^th century this drive led parliaments to rewrite the tax rules to fall more on landlords and monopolists.

Industrial capitalism plowed profits back into new means of production to expand the economy. But today’s rentier model is based on austerity and privatization. The main way the financial sector always has obtained wealth has been by privatizing it from the public domain by insider dealing and indebting governments.

The ultimate financial business plan also is to lend with an eye to end up with the debtor’s property, from governments to companies and families. In Greece the European Central Bank, European Commission and IMF demanded that if the nation’s elected representatives did not sell off the nation’s ports, land, islands, roads, schools, sewer systems, water systems, television stations and even museums to reimburse the dreaded austerity troika for its bailout of bondholders and bankers, the country would be isolated from Europe and faced with a crash. That forced Greece to capitulate.

What seems at first glance to be democracy has been hijacked by politicians who accept the financial class war ideology that the way for an economy to get rich is by austerity. That means lowering wages, unemployment, and dismantling government by turning the public domain over to the financial sector.

By supporting the banking sector even in its predatory and outright fraudulent behavior, U.S. and European governments are reversing the trajectory along which 19^th-century progressive industrial capitalism and socialism were moving. Today’s rentier class is not concerned with long-term tangible investment to earn profits by hiring workers to produce goods. Under finance capitalism, an emerging financial over-class makes money by stripping income and assets from economies driven deeper into debt. Attacking “big government” when it is democratic, the wealthy are all in favor of government when it is oligarchic and serves their interests by rolling back the past two centuries of democratic reforms.

Does the Fed realize global turbulences what its unconventional policies have caused?

Sure. But the Fed has painted itself in a corner: If it raises interest rates, this will cause the stock and bond markets to go down. That would reverse the debt leveraging that has kept these markets up. Higher interest rates also would bankrupt Third World debtors, which will not be able to pay their dollar debts if dollars become more expensive in their currencies.

But if the Fed keeps interest rates low, pension funds and insurance companies will have difficulty making the paper gains that their plans imagined could continue exponentially ad infinitum. So whatever it does, it will destabilize the global economy.

China’s stock market has crashed, western markets are very volatile, and George Soros has said that the current financial environment reminds him of the 2008 crash. Should we be worried?

News reports make it sound as if debt-ridden capitalist economies will face collapse if the socialist countries don’t rescue them from their shrinking domestic markets. I think Soros means that the current financial environment is fragile and highly debt-leveraged, with heavy losses on bad loans, junk bonds and derivatives about to be recognized. Regulators may permit banks to “extend and pretend” that bad loans will turn good someday. But it is clear that most government reports and central bankers are whistling in the dark. Changes in any direction may pull down derivatives. That will cause a break in the chain of payments when losers can’t pay. The break may spread and this time public opinion is more organized against 2008-type bailouts.

The moral is that debts that can’t be paid, won’t be. The question is, how won’t they be paid? By writing down debts, or by foreclosures and distress sell-offs turning the financial class into a ruling oligarchy? That is the political fight being waged today – and as Warren Buffet has said, his billionaire class is winning it.

That’s all for now. Thank you Michael!

The Mad Violence of Casino Capitalism

Posted on March 8, 2016 by Reid Mukai

By Henry Giroux

Source: Counterpunch

American society is morally bankrupt and politically broken, and its vision of the future appears utterly dystopian. As the United States descends into the dark abyss of an updated form of totalitarianism, the unimaginable has become imaginable in that it has become possible not only to foresee the death of the essential principles of constitutional democracy, but also the birth of what Hannah Arendt once called the horror of dark times. The politics of terror, a culture of fear, and the spectacle of violence dominate America’s cultural apparatuses and legitimate the ongoing militarization of public life and American society.

Unchecked corporate power and a massive commodification, infantilization, and depoliticization of the polity have become the totalitarian benchmarks defining American society. In part, this is due to the emergence of a brutal modern-day capitalism, or what some might call neoliberalism. This form of neoliberal capitalism is a particularly savage, cruel, and exploitative regime of oppression in which not only are the social contract, civil liberties and the commons under siege, but also the very notion of the political, if not the planet itself. The dystopian moment facing the United States, if not most of the globe, can be summed up in Fred Jameson’s contention “that it is easier to imagine the end of the world than to imagine the end of capitalism.” He goes on to say that “We can now revise that and witness the attempt to imagine capitalism by way of imagining the end of the world.”¹

One way of understanding Jameson’s comment is through the ideological and affective spaces in which the neoliberal subject is produced and market-driven ideologies are normalized. Capitalism has made a virtue out of self-interest and the pursuit of material wealth and in doing so has created a culture of shattered dreams and a landscape filled with “Broken highways, bankrupt cities, collapsing bridges, failed schools, the unemployed, the underpaid and the uninsured: all suggest a collective failure of will. These shortcomings are so endemic that we no longer know how to talk about what is wrong, much less set about repairing it.”[i]

Yet, there is a growing recognition that casino capitalism is driven by a kind of mad violence and form of self-sabotage and that if it does not come to an end what we will experience in all probability is the destruction of human life and the planet itself. Certainly, more recent scientific reports on the threat of ecological disaster from researchers at the University of Washington, NASA, and the Intergovernmental Panel on Climate Change reinforce this dystopian possibility.² The undermining of public trust and public values has now given way to a market-driven discourse that produces a society that has lost any sense of democratic vision and social purpose and in doing so resorts to state terrorism, the criminalization of social problems, and culture of cruelty. Institutions that were once defined to protect and enhance human life now function largely to punish and maim.

As Michael Yates points out throughout this book, capitalism is devoid of any sense of social responsibility and is driven by an unchecked desire to accumulate capital at all costs. As power becomes global and politics remains local, ruling elites no longer make political concessions to workers or any other group that they either exploit or consider disposable.

Security and crisis have become the new passwords for imposing a culture of fear and for imposing what Giorgio Agamben has called a permanent state of exception and a technology of government repression.[ii] A constant appeal to a state of crisis becomes the new normal for arming the police, curtailing civil liberties, expanding the punishing state, criminalizing everyday behavior, and supressing dissent. Fear now drives the major narratives that define the United States and give rise to dominant forms of power free from any sense of moral and political conviction, if not accountability.

In the midst of this dystopian nightmare, there is the deepening abyss of inequality, one that not only separates the rich from the poor, but also increasingly relegates the middle and working classes to the ranks of the precariat. Concentrations of wealth and income generate power for the financial elite and unchecked misery for most people, a fear/insecurity industry, and a growing number of social pathologies.

Michael Yates in The Great Inequality provides a road map for both understanding the registers that produce inequality as well as the magnitude of the problems it poses across a range of commanding spheres extending from health care and the political realm to the environment and education. At the same time, he exposes the myths that buttress the ideology of inequality. These include an unchecked belief in boundless economic growth, the notion that inequality is chosen freely by individuals in the market place, and the assumption that consumption is the road to happiness. Unlike a range of recent books on inequality, Yates goes beyond exposing the mechanisms that drive inequality and the panoply of commanding institutions that support it. He also provides a number of strategies that challenge the deep concentrations of wealth and power while delivering a number of formative proposals that are crucial for nurturing a radical imagination and the social movements necessary to struggle for a society that no longer equates capitalism with democracy.

As Yates makes clear throughout this book, money now engulfs everything in this new age of disposability. Moreover, when coupled with a weakening of movements to counter the generated power of capitalists, the result has been a startling increase in the influence of predatory capitalism, along with inequities in wealth, income, power, and opportunity. Such power breeds more than anti-democratic tendencies, it also imposes constraints, rules, and prohibitions on the 99 percent whose choices are increasingly limited to merely trying to survive. Capitalists are no longer willing to compromise and have expanded their use of power to dominate economic, political, and social life. For Yates, it is all the more crucial to understand how power works under the reign of global capitalism in order to grasp the magnitude of inequality, the myriad of factors that produce it, and what might be done to change it.

Accompanying the rise of a savage form of capitalism and the ever-expanding security state is the emergence of new technologies and spaces of control. One consequence is that labor power is increasing produced by machines and robotic technologies which serve to create “a large pool of more or less unemployed people.” Moreover, as new technologies produce massive pools of unused labor, it also is being used as a repressive tool for collecting “unlimited biometric and genetic information of all of its citizens.”[iii]

The ongoing attack on the working class is matched by new measures of repression and surveillance. This new weaponized face of capitalism is particularly ominous given the rise of the punishing state and the transformation of the United States from a democracy in progress to a fully developed authoritarian society. Every act of protest is now tainted, labeled by the government and mainstream media as either treasonous or viewed as a potential act of terrorism. For example, animal rights activists are put on the terrorist list. Whistleblowers such as Edward Snowden are painted as traitors. Members of the Black Lives Matter movement are put under surveillance,[iv] all electronic communication is now subject to government spying, and academics who criticize government policy are denied tenure or worse.

Under neoliberalism, public space is increasingly converted into private space undermining those sphere necessary for developing a viable sense of social responsibility, while also serving to transform citizenship into mostly an act of consumption. Under such circumstances, the notion of crisis is used both to legitimate a system of economic terrorism as well as to accentuate an increasing process of depoliticization. Within this fog of market induced paralysis, language is subject to the laws of capitalism, reduced to a commodity, and subject to the “tyranny of the moment….emaciated, impoverished, vulgarized and squeezed out of the meanings it was resumed to carry.”[v]

As the latest stage of predatory capitalism, neoliberalism is part of a broader economic and political project of restoring class power and consolidating the rapid concentration of capital, particularly financial capital.[vi] As a political project it includes “the deregulation of finance, privatization of public services, elimination and curtailment of social welfare programs, open attacks on unions, and routine violations of labor laws.”[vii] As an ideology, it casts all dimensions of life in terms of market rationality, construes profit making as the arbiter and essence of democracy, consuming as the only operable form of citizenship, and upholds the irrational belief that the market can both solve all problems and serve as a model for structuring all social relations. As a mode of governance, it produces identities, subjects, and ways of life driven by a survival-of-the fittest-ethic, grounded in the idea of the free, possessive individual, and committed to the right of ruling groups and institutions to exercise power removed from matters of ethics and social costs. As a policy and political project, it is wedded to the privatization of public services, the dismantling of the connection of private issues and public problems, the selling off of state functions, liberalization of trade in goods and capital investment, the eradication of government regulation of financial institutions and corporations, the destruction of the welfare state and unions, and the endless marketization and commodification of society.

Nothing engenders the wrath of conservatives more than the existence of the government providing a universal safety net, especially one that works, such as either Medicare or Social Security. As Yates points out, government is viewed by capitalists as an institution that gets in the way of capital. One result is a weakening of social programs and provisions. As Paul Krugman observes regarding the ongoing conservative attacks on Medicare, “The real reason conservatives want to do away with Medicare has always been political: It’s the very idea of the government providing a universal safety net that they hate, and they hate it even more when such programs are successful.”[viii] In opposition to Krugman and other liberal economists, Michael Yates argues rightly in this book that the issue is not simply preserving Medicare but eliminating the predatory system that disavows equality of wealth, power, opportunity, and health care for everyone.

Neoliberalism has put an enormous effort into creating a commanding cultural apparatus and public pedagogy in which individuals can only view themselves as consumers, embrace freedom as the right to participate in the market, and supplant issues of social responsibility for an unchecked embrace of individualism and the belief that all social relation be judged according to how they further one’s individual needs and self-interests. Matters of mutual caring, respect, and compassion for the other have given way to the limiting orbits of privatization and unrestrained self-interest, just as it is has become increasingly difficult to translate private troubles into larger social, economic, and political considerations. One consequence is that it has become more difficult for people to debate and question neoliberal hegemony and the widespread misery it produces for young people, the poor, middle class, workers, and other segments of society– now considered disposable under neoliberal regimes which are governed by a survival-of-the fittest ethos, largely imposed by the ruling economic and political elite. Unable to make their voices heard and lacking any viable representation in the process makes clear the degree to which the American public, in particular, are suffering under a democratic deficit producing a profound dissatisfaction that does not always translate into an understanding of how neoliberal capitalism has destroyed democracy or what it might mean to understand and challenge its diverse apparatuses of persuasion and power. Clearly, the surge of popularity behind the presidential candidacy of a buffoon such as Donald Trump testifies to both a deep seated desire for change and the forms it can take when emotion replaces reason and any viable analysis of capitalism and its effects seem to be absent from a popular sensibility.

What Michael Yates makes clear in this incisive book on inequality is that democratic values, commitments, integrity, and struggles are under assault from a wide range of sites in an age of intensified violence and disposability. Throughout the book he weaves a set of narratives and critiques in which he lays bare the anti-democratic tendencies that are on display in a growing age of lawlessness and disposability. He not only makes clear that inequality is not good for the economy, social bonds, the environment, politics, and democracy, Yates also argues that capitalism in the current historical moment is marked by an age that thrives on racism, xenophobia, the purported existence of an alleged culture of criminality, and a massive system of inequality that affects all aspects of society. Worth repeating is that at the center of this book, unlike so many others tackling inequality, is an attempt to map a number of modalities that give shape and purpose to widespread disparities in wealth and income, including the underlying forces behind inequality, how it works to secure class power, how it undermines almost every viable foundation needed for a sustainable democracy, and what it might mean to develop a plan of action to produce the radical imagination and corresponding modes of agency and practice that can think and act outside of the reformist politics of capitalism.

Unlike so many other economists such as Paul Krugman and Joseph Stiglitz who address the issue of inequality, Yates refuses the argument that the system is simply out of whack and can be fixed. Nor does he believe that capitalism can be described only in terms of economic structures. Capitalism is both a symbolic pathological economy that produces particular dispositions, values, and identities as well as oppressive institutional apparatuses and economic structures. Yates goes even further arguing that capitalism is not only about authoritarian ideologies and structures, it is also about the crisis of ideas, agency, and the failure of people to react to the suffering of others and to the conditions of their own oppression. Neoliberal capitalism has no language for human suffering, moral evaluation, and social responsibility. Instead, it creates a survival-of-the fittest ethos buttressed by a discourse that is morally insensitive, sadistic, cannibalistic, and displays a hatred of those whose labor cannot be exploited, do not buy into the consumerist ethic, or are considered other by virtue of their race, class, and ethnicity. Neoliberalism is the discourse of shadow games, committed to highlighting corporate power and making invisible the suffering of others, all the while leaving those considered disposable in the dark to fend for themselves.

Yates makes visible not only the economic constraints that bear down on the poor and disposable in the neoliberal age of precarity, he also narrates the voices, conditions, hardships and suffering workers have to endure in a variety of occupations ranging from automobile workers and cruise ship workers to those who work in restaurants and as harvester on farms. He provides a number of invaluable statistics that chart the injuries of class and race under capitalism but rather than tell a story with only statistics and mind boggling data, he also provides stories that give flesh to the statistics that mark a new historical conjuncture and a wide range of hardships that render work for most people hell and produce what has been called the hidden injuries of class. Much of what he writes is informed by a decade long research trip across the United States in which he attempted to see first-hand what the effects of capitalism have been on peoples’ lives, the environment, work, unions, and other crucial spheres that inform everyday life. His keen eye is particularly riveting as he describes his teaming up with Cesar Chavez and the United Farm Workers in the 1970s and his growing disappointment with a union that increasingly betrayed its own principles.

For Yates, the capitalist system is corrupt, malicious, and needs to be replaced. Capitalism leaves no room for the language of justice, the social, or, for that matter, democracy itself. In fact, one of its major attributes is to hide its effects of power, racial injustice, militarized state violence, domestic terrorism, and new forms of disposability, especially regarding those marginalized by class and race. The grotesque inequalities produced by capitalism are too powerful, deeply rooted in the social and economic fabric, and unamenable to liberal reforms. Class disparities constitute a machinery of social death, a kind of zombie-like machine that drains life out of most of the population poisoning both existing and future generations.

The politics of disposability has gone mainstream as more and more individuals and groups are now considered surplus and vulnerable, consigned to zones of abandonment, surveillance, and incarceration. At one level, the expansive politics of disposability can be seen in the rising numbers of homeless, the growing army of debt-ridden students, the increasingly harsh treatment of immigrants, the racism that fuels the school-to-prison pipeline, and the growing attack on public servants. On another level, the politics of disposability has produced a culture of lawlessness and cruelty evident by the increasing rollback of voting rights, the war waged against women’s reproductive rights, laws that discriminate against gays, the rise of the surveillance state, and the growing militarization of local police forces. Yates argues convincingly that there is a desperate need for a new language for politics, solidarity, shared responsibilities, and democracy itself. Yates sees in the now largely departed Occupy Movement an example of a movement that used a new discourse and set of slogans to highlight inequality, make class inequities visible, and to showcase the workings of power in the hands of the financial elite. For Yates, Occupy provided a strategy that can be and is being emulated by a number of groups, especially those emerging in the black community in opposition to police violence. Such a strategy begins by asking what a real democracy looks like and how does it compare to the current society in which we live. One precondition for individual and social agency is that the horizons for change must transcend the parameters of the existing society, and the future must be configured in such a way as to not mimic the present.

What is remarkable about The Great Inequality is that Yates does not simply provide a critique of capitalism in its old and new forms, he also provides a discourse of possibility developed around a number of suggested policies and practices designed to not reform capitalism but to abolish it. This is a book that follows in the manner of Dr. Martin Luther King’s call to break the silence. In it Yates functions as a moral witness in reporting on the hardships and suffering produced by grotesque forms of inequality. As such, he reveals the dark threats that capitalism in its ruthlessly updated versions poses to the planet. Yet, his narrative is never far from either hope or a sense that there is a larger public for whom his testimony matters and that such a public is capable of collective resistance. The Great Inequality also serves to enliven the ethical imagination, and speak out for those populations now considered outcast and voiceless. Yates provides a furious reading of inequality and the larger structure of capitalism. In doing so he exhibits a keen and incisive intellect along with a welcomed sense of righteous fury.

Notes.

[i] Tony Judt, Ill Fares the Land, (New York, N.Y.: The Penguin Press, 2010), p. 12.

[ii] Giorgio Agamben, “The Security State and a theory of destituent power,” Philosophers for Change, (February 25, 2014). Online:

The security state and a theory of destituent power

[iii] Ibid., Agamben, “The Security State and a theory of destituent power,”

[iv] George Joseph, “Exclusive: feds regularly monitored black lives matter since ferguson,” Intercept (July 24, 2015). Online: https://firstlook.org/theintercept/2015/07/24/documents-show-department-homeland-security-monitoring-black-lives-matter-since-ferguson/; Deirdre Fulton, “Exposed: Big Brother Targets Black Lives:Government spying can be an ‘effective way to chill protest movements,’ warns Center for Constitutional Rights,” CommonDreams (July 24, 2015). Online: http://www.commondreams.org/news/2015/07/24/exposed-big-brother-targets-black-lives

[v] Zygmunt Bauman and Leonidas Donskis, Moral Blindness: The loss of Sensitivity in Liquid Modernity, (Cambridge, UK: Polity Press, 2013), p. 46.

[vi] I have taken up the issue of neoliberalism extensively in Henry A. Giroux, Against the Terror of Neoliberalism (Boulder: Paradigm, 2008) . See also, David Harvey, A Brief History of Neoliberalism (New York: Oxford University Press, 2007); Manfred B. Steger and Ravi K. Roy, Neoliberalism: A Very Short Introduction (New York: Oxford University Press, 2010); Gerad Dumenil and Dominique Levy, The Crisis of Neoliberalism (Cambridge: Harvard University Press, 2011). Henry A. Giroux, Twilight of the Social (Boulder: Paradigm, 2013); Henry A. Giroux, and in Against the Violence of Organized Forgetting: Beyond America’s Disimagination Machine (San Francisco: City Lights, 2014);

Wendy Brown, Undoing the Demos: Neoliberalism’s Stealth Revolution (Cambridge: Zone Books 2015).

[vii] Michael D. Yates, “Occupy Wall Street and the Significance of Political Slogans,” Counterpunch, (February 27, 2013). Online:http://www.counterpunch.org/2013/02/27/occupy-wall-street-and-the-significance-of-political-slogans/

[viii] Paul Krugman, “Zombies Against Medicare,” New York Times (July 27, 2015). Online: http://www.nytimes.com/2015/07/27/opinion/zombies-against-medicare.html?_r=0

This essay is excerpted from the introduction to The Great Inequality by Michael D. Yates.

Henry A. Giroux currently holds the McMaster University Chair for Scholarship in the Public Interest in the English and Cultural Studies Department and a Distinguished Visiting Professorship at Ryerson University. His most recent books are America’s Education Deficit and the War on Youth (Monthly Review Press, 2013) and Neoliberalism’s War on Higher Education (Haymarket Press, 2014). His web site is www.henryagiroux.com.

The Age of Authoritarianism: Government of the Politicians, by the Military, for the Corporations

Posted on March 4, 2016 by Reid Mukai

By John W. Whitehead

Source: The Rutherford Institute

“I was astonished, bewildered. This was America, a country where, whatever its faults, people could speak, write, assemble, demonstrate without fear. It was in the Constitution, the Bill of Rights. We were a democracy… But I knew it wasn’t a dream; there was a painful lump on the side of my head… The state and its police were not neutral referees in a society of contending interests. They were on the side of the rich and powerful. Free speech? Try it and the police will be there with their horses, their clubs, their guns, to stop you. From that moment on, I was no longer a liberal, a believer in the self-correcting character of American democracy. I was a radical, believing that something fundamental was wrong in this country—not just the existence of poverty amidst great wealth, not just the horrible treatment of black people, but something rotten at the root. The situation required not just a new president or new laws, but an uprooting of the old order, the introduction of a new kind of society—cooperative, peaceful, egalitarian.” ― Historian Howard Zinn

America is at a crossroads.

History may show that from this point forward, we will have left behind any semblance of constitutional government and entered into a militaristic state where all citizens are suspects and security trumps freedom.

Certainly, this is a time when government officials operate off their own inscrutable, self-serving playbook with little in the way of checks and balances, while American citizens are subjected to all manner of indignities and violations with little hope of defending themselves.

As I make clear in my book Battlefield America: The War on the American People, we have moved beyond the era of representative government and entered a new age—the age of authoritarianism. Even with its constantly shifting terrain, this topsy-turvy travesty of law and government has become America’s new normal.

Don’t believe me?

Let me take you on a brief guided tour, but prepare yourself. The landscape is particularly disheartening to anyone who remembers what America used to be.

The Executive Branch: Whether it’s the Obama administration’s war on whistleblowers, the systematic surveillance of journalists and regular citizens, the continued operation of Guantanamo Bay, or the occupation of Afghanistan, Barack Obama has surpassed his predecessors in terms of his abuse of the Constitution and the rule of law. President Obama, like many of his predecessors, has routinely disregarded the Constitution when it has suited his purposes, operating largely above the law and behind a veil of secrecy, executive orders and specious legal justifications. Rest assured that no matter who wins this next presidential election, very little will change. The policies of the American police state will continue.

The Legislative Branch: It is not overstating matters to say that Congress may well be the most self-serving, semi-corrupt institution in America. Abuses of office run the gamut from elected representatives neglecting their constituencies to engaging in self-serving practices, including the misuse of eminent domain, earmarking hundreds of millions of dollars in federal contracting in return for personal gain and campaign contributions, having inappropriate ties to lobbyist groups and incorrectly or incompletely disclosing financial information. Pork barrel spending, hastily passed legislation, partisan bickering, a skewed work ethic, graft and moral turpitude have all contributed to the public’s increasing dissatisfaction with congressional leadership. No wonder 86 percent of Americans disapprove of the job Congress is doing.

The Judicial Branch: The Supreme Court was intended to be an institution established to intervene and protect the people against the government and its agents when they overstep their bounds. Yet through their deference to police power, preference for security over freedom, and evisceration of our most basic rights for the sake of order and expediency, the justices of the United States Supreme Court have become the guardians of the American police state in which we now live. As a result, sound judgment and justice have largely taken a back seat to legalism, statism and elitism, while preserving the rights of the people has been deprioritized and made to play second fiddle to both governmental and corporate interests.

Shadow Government: America’s next president will inherit more than a bitterly divided nation teetering on the brink of financial catastrophe when he or she assumes office. He or she will also inherit a shadow government, one that is fully operational and staffed by unelected officials who are, in essence, running the country. Referred to as the Deep State, this shadow government is comprised of unelected government bureaucrats, corporations, contractors, paper-pushers, and button-pushers who are actually calling the shots behind the scenes right now.

Law Enforcement: By and large the term “law enforcement” encompasses all agents within a militarized police state, including the military, local police, and the various agencies such as the Secret Service, FBI, CIA, NSA, etc. Having been given the green light to probe, poke, pinch, taser, search, seize, strip and generally manhandle anyone they see fit in almost any circumstance, all with the general blessing of the courts, America’s law enforcement officials, no longer mere servants of the people entrusted with keeping the peace but now extensions of the military, are part of an elite ruling class dependent on keeping the masses corralled, under control, and treated like suspects and enemies rather than citizens. In the latest move to insulate police from charges of misconduct, Virginia lawmakers are considering legislation to keep police officers’ names secret, ostensibly creating secret police forces.

A Suspect Surveillance Society: Every dystopian sci-fi film we’ve ever seen is suddenly converging into this present moment in a dangerous trifecta between science, technology and a government that wants to be all-seeing, all-knowing and all-powerful. By tapping into your phone lines and cell phone communications, the government knows what you say. By uploading all of your emails, opening your mail, and reading your Facebook posts and text messages, the government knows what you write. By monitoring your movements with the use of license plate readers, surveillance cameras and other tracking devices, the government knows where you go. By churning through all of the detritus of your life—what you read, where you go, what you say—the government can predict what you will do. By mapping the synapses in your brain, scientists—and in turn, the government—will soon know what you remember. And by accessing your DNA, the government will soon know everything else about you that they don’t already know: your family chart, your ancestry, what you look like, your health history, your inclination to follow orders or chart your own course, etc. Consequently, in the face of DNA evidence that places us at the scene of a crime, behavior sensing technology that interprets our body temperature and facial tics as suspicious, and government surveillance devices that cross-check our biometrics, license plates and DNA against a growing database of unsolved crimes and potential criminals, we are no longer “innocent until proven guilty.”

Military Empire: America’s endless global wars and burgeoning military empire—funded by taxpayer dollars—have depleted our resources, over-extended our military and increased our similarities to the Roman Empire and its eventual demise. The U.S. now operates approximately 800 military bases in foreign countries around the globe at an annual cost of at least $156 billion. The consequences of financing a global military presence are dire. In fact, David Walker, former comptroller general of the U.S., believes there are “striking similarities” between America’s current situation and the factors that contributed to the fall of Rome, including “declining moral values and political civility at home, an over-confident and over-extended military in foreign lands and fiscal irresponsibility by the central government.”

I haven’t even touched on the corporate state, the military industrial complex, SWAT team raids, invasive surveillance technology, zero tolerance policies in the schools, overcriminalization, or privatized prisons, to name just a few, but what I have touched on should be enough to show that the landscape of our freedoms has already changed dramatically from what it once was and will no doubt continue to deteriorate unless Americans can find a way to wrest back control of their government and reclaim their freedoms.

That brings me to the final and most important factor in bringing about America’s shift into authoritarianism: “we the people.” We are the government. Thus, if the government has become a tyrannical agency, it is because we have allowed it to happen, either through our inaction or our blind trust.

Essentially, there are four camps of thought among the citizenry when it comes to holding the government accountable. Which camp you fall into says a lot about your view of government—or, at least, your view of whichever administration happens to be in power at the time.

In the first camp are those who trust the government to do the right thing, despite the government’s repeated failures in this department. In the second camp are those who not only don’t trust the government but think the government is out to get them. In the third camp are those who see government neither as an angel nor a devil, but merely as an entity that needs to be controlled, or as Thomas Jefferson phrased it, bound “down from mischief with the chains of the Constitution.”

Then there’s the fourth camp, comprised of individuals who pay little to no attention to the workings of government, so much so that they barely vote, let alone know who’s in office. Easily entertained, easily distracted, easily led, these are the ones who make the government’s job far easier than it should be.

It is easy to be diverted, distracted and amused by the antics of the presidential candidates, the pomp and circumstance of awards shows, athletic events, and entertainment news, and the feel-good evangelism that passes for religion today. What is far more difficult to face up to is the reality of life in America, where unemployment, poverty, inequality, injustice and violence by government agents are increasingly norms.

The powers-that-be want us to remain divided, alienated from each other based on our politics, our bank accounts, our religion, our race and our value systems. Yet as George Orwell observed, “The real division is not between conservatives and revolutionaries but between authoritarians and libertarians.”

The only distinction that matters anymore is where you stand in the American police state. In other words, you’re either part of the problem or part of the solution.

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