Plutocrats Plus - Why Neoliberalism Is Bad For Us All

Author Thomas Frank in a recent essay ('Plutocracy Without End: Why the 1 Percent Always Defeats the Middle Class') wrote:

"The One Percent have already broken every record for wealth-hogging set by their ancestors, going back to the dawn of record-keeping in 1913. But what if it all just keeps going? How much fatter can the fat cats get before they hit some kind of natural limit? Before the invisible thumb of history presses down on the other side of the scale and restores balance?"

How much fatter can the fat cats get? Much fatter indeed! We've already seen the Gini coefficient, one of the best measures of inequality, rise to its highest level in decades - accelerating most since the Reagan era and the massive cut in the top income tax rates. People bitch and moan about paying taxes, but don't understand that they are what keeps our society afloat. No taxes, then no roads, no schools, no benefits......and no armies! The problem with the myopic Right is that they want all the taxes to go for armies and weapons and none for the domestic foundation. But this is a fool's thinking because without domestic security at its basic level, in terms of providing roads, bridges, water mains, sewer lines and means for people to not only subsist but thrive, you are looking at a banana republic.

The problem with the Neoliberal, pro -free market idiom is that it denies the most basic security for the majority of citizens. In this way it feeds economic inequality while it rewards the speculator and banker class. It also helps to corrupt the political class via unregulated campaign contributions.

Jay Bookman aptly noted('The New World Disorder Evident Here, Abroad', in The Baltimore Sun, December 15, 1997):

"The global economy has been constructed on the premise that government guarantees of security and protection must be avoided at all costs, because they discourage personal initiative. In times of crisis, however, that premise cannot be sustained politically. In times of trouble it is human nature to seek security and protection and to be drawn toward those who promise to provide it. That is how men such as Adolf Hitler, and Vladimir Ilyich Lenin came to power, with disastrous consequences."

This description of the New World Neoliberal Order is exactly why the seeds of its own destruction are built into it, have been built into it.  Even as I read (in the New York Times) yesterday of the collapse of multi-employer Pension benefits funds, and how many union workers can no longer receive pensions, it occurred to me that if congress doesn't act, this is a situation that can rapidly destabilize.  There's only a small critical threshold between mass suffering and mass unrest- as we've seen all over, from the Arab Spring, to the Ukraine.

 But in the case of the Ukraine, the unrest was fomented by U.S. Neoliberals and their neocon sidekicks,  driving NATO expansion to the east. The cover story sold is that the people wanted "freedom" and being aligned with the EU and the West. The truth is that if they go that route they will become economic slaves to the Neoliberal  Economic Order. Indeed, once the IMF and EU funds go through one of the first offsets will be cutting public pensions and abolition of all rigid price controls, as well as painful cuts to public subsidies. Those Ukrainians pining for "freedom" would have been better served to have pondered FDR's famous words:

"Necessitous men cannot be free men."

And looked before they leaped into the Neoliberal Abyss (which they might have asked EU Sovereign debt victim Greece about).

Meanwhile, Thomas Frank goes on to observe (ibid.):

"That we are very close to such a limit—that the contradictions inherent in the system will automatically be its undoing—is an idea much in the air of late. Not many still subscribe to Marx’s dialectical vision of history, in which inevitable worker immiseration would be followed, also inevitably, by a revolutionary explosion, but there are other inevitabilities that seem equally persuasive today. We hear much, for example, about how inequality contributed to the housing bubble and the financial crisis, how it has brought us an imbalanced economy that cannot survive."


Marx's dialectic theory of history is one thing, but a more germane or relevant destabilizer is that without adequate income, with only debt to purchase the capitalist goods manufactured - the whole edifice of the consumer economy (and our GDP) collapses.  The reason is simple, and one evident to anyone with basic math skills: it is consumption that supports 70 percent of our GDP. Take away that consumption, and kaput! The economy dives into depression, irrespective of what the Fed, Obama, congress or anyone does.

Thus, once the Neoliberal Order of Globalized capital was established, the seeds for its future destruction were sown. Recall that it was Vladimir Ilyich Lenin ( 'Imperialism, the Highest Form of Capitalism', 1916) who first sounded the warning that mobile finance capital was designed to continually leverage labor to the lowest common denominator. Lenin clearly showed in his treatise how the Political and Economic Elite, simply by the expedient of export capital, could indirectly exploit raw materials from poor nations, or use the latter as captive labor markets. Meanwhile, that same exported capital would ensure working conditions degraded at home. Under such a scheme, financiers would continually divert capital to foreign locales where it would generate the highest return and refrain from aiding industry in their own countries.

That working conditions have degraded at home is self evident to the most cursory reader who follows economic conditions. We still have more than 24 million people under-employed or unemployed and we have a Middle Class losing more ground every day, even as the Elites talk wildly of cutting their Social Security and Medicare benefits - the last barriers between them and penury ...

Then there are the millions trapped in minimum wage jobs with no chance of advancement. Nor is there any motivation in our congress to help them by increasing their wage to a living wage, despite the fact that such a move could actually extend the life of their market Neoliberalism - since it would permit workers to purchase the goods that prop up the GDP without going into debt.

Finally, there are the tens of thousands of recently graduated college students mired in debts accrued that they now must pay off, but with no decent job prospects by which to do so. Do the Neoliberals care at all about the plight of these students or their families? Not at all! Their message is basically, "Sink or swim!" 


Will the Neoliberals quit while they're (relatively ) ahead? Not on your life! They want to add the Ukraine to their potpourri of misery, saddle them with endless debt and poverty like they did the Russians post-1990,. They also want to double down on the global Neoliberal order itself - this time using TPP or Trans-Pacific Partnership, another way to screw with us like the earlier GATT and NAFTA.

Are people paying attention? Maybe, maybe not. It is painful to watch as many of our citizens simply hunker down with their TVs, DVDs, notebooks, Twitter, Facebook or other entertainment and refuse to understand that the active citizen must come to the fore if the Neoliberals are not to send our nation into a plutocracy.

Meanwhile, WikiLeaks has released the draft text of a chapter of the Trans-Pacific Partnership (TPP) agreement, currently being negotiated in secret by 12 Pacific Rim nations.   It would be well for every citizen who thinks of him (or her-)self as more that than consumer to read it, and do so carefully.

Your future, and especially that of your offspring, may well depend on it. You need to know of the massive collision coming - heading right toward you - before it happens.  If an informed citizenry is the basis for democracy, why are we being kept in the dark? Perhaps because we no longer have a democracy  but a corporatocracy!

But that is the other prop the Neoliberals depend upon: citizen inertia, stupidity or belief in impotence, i.e. that they only have "opinions" - which carry no weight.  Also, they don't want citizens pursuing truth - information outside the media they promote, which is more invested in propaganda.

If we each do our part, as opposed to retreating, we may yet wake the Neoliberal New World Order up to the fact that poverty stricken indigents (replacing well paid, economically secure citizens) is the last thing it needs.

See also:

http://www.smirkingchimp.com/thread/william-boardman/55716/msnbc-can-be-trusted-by-the-established-order-thats-a-problem

How A Libertarian Cabal Plotted to Eviscerate Social Security

As President Obama prepares to deliver his budget tonight, and all eyes of an angry, hyper-aroused Left base are upon him as he plans to propose a 'chained CPI' to cut Social security benefits (as 'bait' to lure Repukes into a sequester spending deal)- it is useful to recall some recent history. This pertains to a decades old plot to defund, privatize and ultimately destroy the program - by using a strategic ploy first devised by Vladimir Ilyich Lenin.

This is timely, because I also believe this blog bears close attention from  Abby Huntsman and other Millennials, given the cabal that devised the plan factors them in as pawns to be manipulated. Normally, I’d not recommend specific books on Social Security to Millennials, aka the Generation Y cohort, but in this case I believe their attention and reading will enable them to escape ongoing exploitation by the Neoliberal-Libertarin 'Axis of Economic Evil' out to use them for its own purposes.

This book: ‘The Plot Against Social Security’ – by Michael A. Hiltzik, will make them aware of a decades old plan to turn generations against each other, while at the same time copying a political strategy hatched by Vladimir Ilyich Lenin (yes, THAT Lenin) to incite that detrimental change and enlist Social Security’s own putative ‘friends’ against it by appeal to political  “mind-fucking” (my term).

We learn in Hiltzik’s book (p. 18) that the plan was spurred after a (1983) Reagan administration plan to slash Social Security benefits sent 26 Republican congressmen crashing to defeat. At that point Social Security’s reputation as “the third rail” of American politics was born. But some ensconced in libertarian quarters weren’t happy. According to Hiltzik (ibid.):

“The following year, a privatization blueprint written by two analysts at the Heritage Foundation (Stuart Butler and Peter Germanis) surfaced in the libertarian CATO Institute’s  CATO Journal. Mischievously entitled, Achieving A Leninist Strategy. –  the article observed that while Social Security was certain to collapse someday under its own fiscal burdens, it was worth examining the Bolshevik leader’s precept that even a preordained revolution often needs to be jump-started by an elite vanguard.”  

These CATO vermin understood the key to enabling more open attacks on Social Security would be to undermine its reliability. People had to be made to believe, little by little, that the program could not deliver what it promised over the long term. So long as the reliability remained unchallenged, any politician that sought to change it, by reducing its benefits, would be served up ready roasted on the 3rd rail.

The CATO pests also realized they needed to employ a “divide and conquer” template to try and set younger generations-workers against the older. Betting on the ignorance or lack of attention of the young to the issue, they wagered they could eventually parlay their concept into a full-fledged triumph. Some excerpts from their tract:

"We (must)…construct … a coalition that will … reap benefits from the IRA-based private system … but also the banks, insurance companies, and other institutions that will gain from providing such plans to the public.”


“The first element consists of a campaign to achieve small legislative changes that embellish the present IRA system, making it in practice a small-scale private Social Security system.

“The second main element … involves what one might crudely call guerrilla warfare against both the current Social Security system and the coalition that supports it.”

“The banking industry and other business groups that can benefit from expanded IRAs …… the strategy must be to propose moving to a private Social Security system in such a way as to … neutralize … the coalition that supports the existing system.”

Hence, according to Hiltzik:

“The key to securing reform, they said, was to ‘cast doubt on the picture of reality’ promoted by Social Security’s supporters. This required ‘guerilla warfare against both the Social Security system, and the coalition that supports it’”


Additionally critical was to breed skepticism in the young that they’d receive a thin dime from the program, hence might be more disposed toward privatized solutions or outright cuts. Naturally, the themes of “permanent fiscal crisis” together with “Ponzi scheme” were soon adopted, especially after payroll taxes were increased in 1983 to accommodate the coming Boomer onslaught. (One reason why the other bollocks that “there aren’t enough workers” doesn’t hold water.)

In a more recent piece Hiltzik wrote last year for the LA Times (Attacks on Social Security, Medicare borrow a strategy from Lenin)  he noted:   "The answer, (Butler and Germanis) concluded, was to “neutralize” elderly voters while continuing to undermine confidence in Social Security among the young. Their model was the Leninist movement’s “success in isolating and weakening its opponents.”

Any plan to change Social Security, they wrote, “must therefore be neutral or (better still) clearly advantageous to senior citizens … the most powerful element of the coalition that opposes structural reform.”
-----

The young, by contrast, were "not organized to support privatization", and "uninformed about its virtues.”

Hiltzik observes these libertarians intended to “fill the knowledge gap” by making use of the financial industry, i.e. to impart faux beliefs to the young. This then is where the younger generations must enter. Then, hopefully, by educating themselves (say starting with Hiltzik’s book) they won’t fall into the mind trap that Abby Huntsman did on the Bill Maher show. They will, instead, recognize an insidious, cynical con when they see one and not take the bait.

If they also know there is a plan  that ultimately harms them too, and they recognize the plan describes a smokescreen strategy (that distracts people from seeing what is happening to them),  then  sthey should be able to see the plan unfold step by step … hence can stop reacting to the cover story meant to distract them!  In this case, the Millennials  can start fighting back as opposed to becoming willing and unknowing (unconscious?) pawns like Abby Huntsman displayed.

Next time any cheeseball pundit says:  “Social Security is going broke!” or “Social Security is making the debt worse!” the astute citizen can see what is going on in a whole different way. Social Security is not “going broke” and Social Security does not add to the debt.  Nor can it go "bankrupt" because it has no creditors against it - rather the U.S. gov't OWES Social Security via Treasuries to make good on ITS debts to the program!

See also: http://www.smirkingchimp.com/thread/gaius-publius/48988/obamas-budget-takes-more-from-seniors-than-from-the-wealthy

http://www.smirkingchimp.com/thread/norman-solomon/48990/time-to-bell-the-obama-cat