Undoing the New Deal

The depression was not so Great
And almost nobody ate
Millions had no shoes
Only lawbreakers had the booze
The poverty was grinding
While the nation was finding
A way from the third level of hell
And yet the wealthy did well



In reading the recent biography of FDR A Traitor to his Class by H. W. Brands, lots of interesting facts glared out at me from the pages of the book. Some were related to the personal life of Franklin Roosevelt, but many more were related to the disturbing parallel of the roaring twenties and the depressing thirties to recent times. Foremost among these is that the record corporate profits of today were also the center of the economy of the twenties. In the US, especially, corporations saw record profits as well as reckless speculation in the stock market. Of course, there were differences as well. Only perhaps 15% of the nation was invested in stocks. We now boast of at least 70% participation. Today, we have derivatives that schemers in the 20s did not. Instead of today’s Tea Party extremists and neo-Nazi militia, we had militant Ku Klux Klan and Communist agitators as well as real Nazi sympathizers stirring up hate, discontent and isolationism. Famous people including aviator Charles Lindbergh supported Germany directly and he received a Nazi Medal of Honor presented by Hermann Goering.

Perhaps it is more difficult for folks to peacefully share poverty than it is for them to share the good times. We tend to define differences more sharply in recessions and depressions. During the thirties, blacks were still being lynched, European and Asian immigrants were attacked and humiliated, while today, Hispanic immigrants and Islamic citizens seem to be hated and under attack. Agitation was actually a bit more common then than now with government in the 1920s often supporting ruthless suppression of crowds whether they were unions seeking fair wages or WW I veterans seeking their bonuses promised for service in WW I. In Anacostia, part of the District of Columbia, President Hoover ordered General MacArthur to disperse the 20,000 veterans. He did, brutally using cavalry with swords drawn. The injuries to veterans and the death of an infant in the assault stunned even Hoover who had ordered the action. Child labor in the US was not stopped until 1938 when FDR signed the Fair Labor Standards Act. That was successful largely because adults were competing with children for the same low wages during the depression. A regressive Supreme Court had earlier ruled that children must be given the right to contract for their labor, although they were prohibited from most other contracts. Earlier legislative attempts to force the Supreme Court to respect children in the workplace were fruitless. Our current Supreme Court is not alone in being right wing in makeup. The late 19th and early 20th centuries fostered highly conservative Supreme Courts, similar to today. There was no economic or social safety net except the generosity of neighbors. The American ideal of self-sufficiency was the basis for government policy. The Poor House was the alternative.

Wealth was concentrated in the upper echelons of society to a point not to be seen again until today. Worker productivity until the crash of 1929 was high, however there were problems of sharing productivity gains with workers. That has again occurred with executive salaries and bonuses exceeding a level of 400 times that of the average worker despite record employee productivity. Strangely, the main argument defending harsh treatment of millions of hungry citizens was nearly a verbatim prediction of today’s conservative response to hungry and frightened people of today. “The promise of America is opportunity, not a handout.” Hoover expressed the thought that if citizens were given a handout, it might create a dependence on continued handouts and that people would lose any motivation to work. Today, we have heard almost identical words being echoed by leaders of the conservative elements of the Republican Party as a reason to not extend jobless benefits. Then, as now, politicians resisted unemployment assistance. When a priest in Pittsburgh marched with 12,000 workers to help get unemployment consideration, four were killed in the process. We now know that the conservatives will fight any extension of the unemployment payments to millions of out-of-work men and women. This lack of empathy is cloaked in a “rugged individualism” rhetoric now as it was then and yet they see no connection between their support from government and support of the less fortunate. Coal miners at Matewan, West Virginia were attacked by a detective agency hired by the owners and 12 people were killed. Violence by owners to avoid unions was common and union retaliation became a fact of life. The conservative distrust and even hatred of unions had its beginnings in the New Deal when FDR attempted to level the playing field by encouraging management negotiation with unions. Management did so only under duress and not really until early war production to sell to the British.

The history books are filled with the examples of failed conservative policies that protected the wealthy business owners while government policy was essentially laissez faire with the idea that prosperity was cyclical and that it was all right if some people were hurt or starved in the process of waiting for the cycle to right itself. That was the natural way. The thirties saw the insertion of the Glass-Steagal Act (FDIC, etc.) and Social Security that conservatives even today are trying to eliminate or emasculate by replacing it with defined contributions into privatized stock plans. Can you imagine our individual and family pain and chaos in this current recession if GW Bush had succeeded in replacing Social Security with privatized investment? Maybe you should listen closely to the conservatives, read back to the Great Depression and think hard, because that is our current direction despite the fact that we have the lowest tax rate since 1950 at less than 10% on average. The cry to reduce our deficit caused mainly by two wars of choice may sound appealing, but it is only crying wolf unless the wealthy are willing to give a little to let the real spenders of the middle class help save the republic, its economy and its self respect.

Conservatives are trying to undo the New Deal. To them, regulation is un-American and real freedom is the freedom to hurt everybody except the bankers and large corporations who must be bailed out. The little guy is just that. Little. Big is just that…and too big to fail. What an American concept! Freedom fries the little guy. Freedom gets Big a free lunch.




Peace,
George Giacoppe
10 November 2010

Shock Doc

 
I’ve been reading Naomi Klein’s truly shocking book, The Shock Doctrine. Everyone should read it without delay. For not only does it tell a riveting tale about an overarching plan hatched by the right wing in this country for the last 40 years or so, but it helps make sense of the economic turmoil now facing this nation and the world. It also points out that while the Left has focused its attention on the peril it has seen in political violence and war, the Right has focused on “free market” economics and the real control and profits it provides to those in power. Lastly, it tells us how the 9/11 attacks have been used by the Right to “shock” us all into compliance (see www.ae911truth.org for engineering analyses of the tower collapses), and indeed, what that compliance was really about.
            To put it briefly, the right wing objective for more than 40 years has been to foist a fundamentalist version of capitalism—Milton Friedman’s purist version of “free market” capitalism—on the world. This is the system espoused by Friedman and his “Chicago boys” at the University of Chicago. It is a system that argues that all government interference in the economy is evil, especially the social programs (social security, public housing, government regulations on banks, government-run building programs) that Franklin Roosevelt instituted to end the Great Depression, and that many third world governments instituted to ameliorate the misery of their impoverished masses.  Rather, the Chicago plan urges the privatization of all nationalized industries (especially oil, but also water, power, and so on), the elimination of all social programs designed to help the poor, and the opening of every country to “free trade.” Of course, when such purifying “surgery” is administered to a country rapidly, the pain and misery of the population increases dramatically. Therefore, Friedman argued, a shock is needed to instill fear in the people, and force them and the government to accept the harsh medicine, often called “structural adjustment” when implemented by the IMF and the World Bank.  Klein quotes Milton Friedman’s statement in 1982 about the necessity of crisis or shock to implement such ideas:
            “Only a crisis—actual or perceived—produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.”
            Klein’s book then leads us through the countries to whom this “free market” medicine has been applied in recent years: Chile, Argentina, Uruguay, Brazil, Bolivia, as well as China, Russia, South Africa, and more recently the United States itself. In almost every case, the medicine is initially rejected as too harsh—rejected, that is, until a shock either occurs from the outside, or is initiated by the government. In every case, as well, the necessity for either a dictator or some form of police state is required to force people to accept the pain. The preferred method, and according to Klein, the virtual twin of such programs, is torture. In Chile, for example, the coup which killed the democratically-elected president, Salvador Allende, and installed as dictator Augusto Pinochet, was the necessary precursor to the transition to free market capitalism. The road to this coup, however, was paved in prior years by a crew of Chileans studying with Friedman at the University of Chicago (the Chicago Boys), a crew which returned to await the chance to implement their policies. The road was also paved by the CIA in helping to overturn the elected government, as well as in the training it supplied in the best methods of counter-insurgency and torture. Once Pinochet seized power, he immediately began to “disappear” people—either dropping them from planes into the ocean or depositing them in torture chambers. In either case, most were never heard from again. And the targets were not only political leaders on the left, but also union leaders of every kind (destroying unions has been a key element of the “free market” program: think Reagan and the firing of 14,000 air traffic controllers). Such killings were not kept secret: the public demonstrations of repression were necessary to send the message that anyone who opposed the new regime did so under threat of death. Thousands left the country, while thousands more—including some of the most prominent figures in the nation like the composer/singer Victor Jara—were eliminated. In sum, Chile endured three complementary forms of shock: the shock of the military coup; the capitalist shock treatment to the economy; and the shock of the CIA-codified torture chamber meant to destroy the left-leaning culture itself. The result was then referred to, especially in the United States, as the Chilean Economic Miracle.
            Of course, what the promoters of this “miracle” never mention is that in fact, the Chicago-inspired shock therapy actually resulted in economic disaster: Chile’s economy crashed in 1982, its debt exploded, it faced hyperinflation, and its unemployment reached 30%, ten times higher than under Allende. Neither do they note that in response, Pinochet was forced to emulate the leader he had killed, and nationalize many of the companies in trouble (he never had to re-nationalize Chile’s biggest industry, copper, because he had never de-nationalized it in the first place.) And even with the economic growth that followed, more than 45% of the population fell below the poverty line, while the richest 10% of Chileans saw their incomes rise by almost 100%. In other words, the free-market “miracle” did what it has done elsewhere, including the United States: it transferred enormous wealth from the poor and middle classes to the very rich (Joseph Giannone of Reuters wrote on Sept. 4, 2008, that “the top 1 percent of all households owned 35% of the world’s wealth last year. Meanwhile, the top 0.001 percent, ultra-rich households holding at least $5 million in assets, commanded $21 trillion—1/5 of the world’s wealth.”)
            This really gets to an underlying thesis of Klein’s book. In each country, the violence against the populace becomes the focus of those opposing the dictator or the dictatorial government. However, the violence is never the goal, but only the means. Klein quotes Claudia Acuna, an Argentine journalist, on the government that “disappeared” so many thousands: “Their human rights violations were so outrageous, so incredible, that stopping them of course became the priority. But while we were able to destroy the secret torture centers, what we couldn’t destroy was the economic program…” The truth pointed out by Klein is that far more lives were stolen by “planned misery” than by bullets:
            “…what happened in the Southern Cone of Latin America in the seventies is that it was treated as a murder scene when it was, in fact, the site of an extraordinarily violent armed robbery.”
            In other words, torture is not meant to extract information, as is commonly stated, but rather is a “means of terrorizing and controlling populations.” It is a means to seize from millions of people what they absolutely require to live with minimal dignity, and would never give up willingly. That this is so can be seen in South Africa. There, the apartheid government “gave” political freedom to Nelson Mandela and the black majority. But while Mandela’s government, the ANC, was focusing on political matters so it could redistribute land and wealth, the white power structure was ensuring that economic power remained with them: the ANC was saddled with the enormous debt of the rulers who had oppressed it, and with paying the pensions of the very officials that had maintained the apartheid system. Further, it became crystal clear that any attempt to renege on those debts or nationalize industries such as mining would cause international investors to withdraw from South Africa and plunge the country into depression. The ANC was, and is trapped, and the majority of South Africans are worse off than ever.
            Many readers would find all this information about “them” interesting, if not compelling. What Klein points out, however, is that the “them” is now “us.” With underdeveloped nations increasingly closing their doors to U.S. privatization schemes, U.S. conservatives saw that the profits of privatization in the new century would have to come from within. Consider the announced plans of our recently- departed Secretary of Defense, Donald Rumsfeld. This corporate CEO, with a reputed fortune of $250 million, cared little about how best to protect the nation; rather, his primary interest was in reforming the Pentagon bureaucracy—but NOT to save money or increase efficiency. It was to privatize the biggest agency of the United States government. The military, said Rumsfeld, should reduce its focus to warfighting alone…whereas “in all other cases, we should seek (private) suppliers who can provide these non-core activities…” Such suppliers could do everything from cutting DOD checks to running its warehouses to picking up its garbage to providing housing for soldiers to providing computer systems. And as Jeremy Scahill points out in Blackwater: The Rise of the World’s Most Powerful Mercenary Army, the drive to privatize the military and outsource its traditional functions did not stop with providing clean laundry and Burger Kings at army bases; it was extended to include protection for military leaders and visiting dignitaries, and even to implementing torture (always termed ‘information gathering’) in places like Abu Ghraib.
            Thus, Rumsfeld and his protégé Cheney became the point men not so much in downsizing the United States government that they largely ran for the first 6 years of the Bush administration, but rather in creating a corporate bonanza for their corporate friends and cronies such as Cheney’s Halliburton and Rumsfeld’s Gilead Sciences (maker of Tamiflu, the preferred drug for avian flu, which Rummie expected, when the next flu epidemic hit, to turn into a cash cow of unprecedented proportions). Privatizing and outsourcing were the key policies, and the Gold Dust Twins were already masters of these policies by the time they got to the Bush administration. Under Cheney’s 5-year reign in the 1990s, for example, Halliburton’s take from the U.S. Treasury ballooned by almost 100%---from $1.2 billion to $2.3 billion—while its federal loans and guarantees “increased fifteenfold.” God only knows what Halliburton, now super-enriched by its contracts in Iraq, has been raking in since then.
            There is far more detail in Klein’s book, but the essence is this: The real agenda of the Right since at least the Reagan administration has been not repression and war so much, but an increasing economic stranglehold over the world and its resources. War, violence, spying, torture are only the necessary means to this end. And the corollary truth—which stems from the guru, Milton Friedman himself—is that only a crisis, only deeply disorienting shocks to a national body, can make a population accept the kind of economic pain that goes along with such theft. Everyone now knows what those shocks have been in the last 8 years: the attacks of 9/11, the so-called war on terror, the drowning of New Orleans, and now, the financial meltdown. And it is sobering if not frightening to realize that the most recent shock—the financial one—has done its job perfectly. The United States Congress, even in the face of massive outrage from its constituents, finally succumbed to the shock therapy, and agreed to the massive bailouts for the very banks and CEOs whose policies and thefts were responsible for the collapse in the first place.
            Read Naomi Klein’s book. You may not be glad you did, but you’ll certainly be better equipped to comprehend the public fleecing you’ve been enduring for years.
 
Lawrence DiStasi
 



addendum on joe the so-called plumber, from the Daily Kos:


The facts - as even the reluctant to bother actually doing reporting Corporate Media have revealed - are that: Joe The Plumber only makes $40,000 a year, doesn't have a valid plumbers license in the state of Ohio, has only been a "plumber" for 6 years - not 15, has never finished his plumber courses, has never apprenticed as a plumber, can't afford to buy his bosses business - which only generates $100,000 a year in income Profit, not $250,000 - is a registered republican who owes over a $1,000 in back taxes, and under any version of Obama's plan would get a tax cut that would be larger than McCain's.

His (first) Name isn't even Joe - It's SAM!
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