“The Bear Market Economics Phenomenon” is an observation of Political Economics. Wall Street Admits: ‘We Got Rich Off the Backs of Workers’ thus creating the Bear Market. The Bear Market is America's default war.
The ethic of Wall Street is the ethic of celebrity. It is fused into one bizarre, perverted belief system and it has banished the possibility of the country returning to a reality-based world or avoiding internal collapse. A society that cannot distinguish reality from illusion dies.
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Much of the American left is currently focused on the Democratic Party’s presidential primary in general, and the contest between Hillary Rodham Clinton and Sen. Bernie Sanders, in particular. But according to Vox’s Matt Yglesias, this laser-focus on the White House is a big mistake.
Democrats have been lulled into a kind of “complacence,” Yglesias warns, by a combination of President Obama’s late-term successes and the spectacular dysfunction of the Congressional GOP. In spite of being weaker on the state- and local-level than it’s been since perhaps the 1920s, the Democratic Party has “nothing at all in the works to redress [its] crippling weakness down the ballot.” It is one presidential election away from handing Republicans “the overwhelmingpreponderance of political power” in the U.S.
For anyone who believes the Republican Party today is “an insurgent outlier” that’s become too ideologically extreme and comically inept to wield absolute power, Yglesias’ article is a rude awakening. And, in fairness, some have argued that his vision of the future is overly grim. (Ed Kilgore, for example, says that holding the White House, as Democrats seem well-positioned to do, is “pretty damn important.”) Still, it’s hard to imagine how the left makes real progress with the presidency alone.
Yglesias’ post is more about diagnosing the problem — and spurring Democrats and leftwing activists to pay it more attention — than offering a solution. Which is fine; the first step toward fixing something is recognizing that it’s broken. But if the Democratic Party wants to truly be relevant in American politics, from top-to-bottom, it’s going to need something that it lacks but which the GOP has in abundance: A vibrant, energized, and well-organized activist base.
Yglesias talks about Republicans being more ideologically “flexible” than they’re given credit for, citing their willingness to downplay their social conservatism when campaigning in traditional Democratic strongholds like Maryland or the industrial Midwest. But I’m skeptical of that explanation. I don’t think the hangup for Democrats is that “No U.S. state is so left-wing [that] business interests are economically or politically irrelevant.” Ironically, the problem is both more and less complicated.
Simply put, while Republicans have big money at the top, they have passionate rank-and-file support at the bottom, too. They have corporate overlords like the Koch brothers, sure. But they’ve also got “boots on the ground” to make calls, knock on doors, and pass around campaign literature. They’ve got rank-and-file NRA members, whose passion and single-mindedness is legendary. And they’ve got millions and millions of evangelical Christians and other religious conservatives, all of whom approach political contests as if they were spiritual crusades.
Not everyone within the GOP is the same, of course. And as the struggles between Tea Party extremists and Chamber of Commerce conservatives show, Republicans’ internal divisions can get mighty nasty. But even when they’re at each other’s throats, most Republicans on every side think of themselves as conservatives. They generally want the same things: the maintenance of a “traditional” social order, fewer regulations and, above all else, low taxes. When they differ, in other words, it’s usually not about ends but rather means.
The Democratic coalition, on the other hand, is more diverse — not just demographically, but also ideologically. The party is the traditional home for American liberals, and it promotes many policy positions we’d describe as being “left,” especially on sex and gender. But it’s only very recently that most Democrats began to self-identify as “liberal” rather than “moderate”; and many of the party’s key players come from the self-consciously centrist niches of business. Instead of telling the people to rise up, they encourage them to lean in.
This influences how the party functions in myriad ways, but one of the most consequential pertains to organized labor. And this is the one, not incidentally, whose impact is felt most acutely on Election Day. When organized labor was stronger, it provided Democrats with a grassroots complement to the GOP’s gun rights and religious groups. To this day, in fact, organized labor is an integral part of the Democrats’ get-out-the-vote operations. They couldn’t win without them.
But organized labor in the U.S. is weaker than it’s been in over a century, if not longer; and as Democrats have tried to make up for labor’s diminishment by wooing socially liberal elements of the business class, they’ve made a more robust and unified defense of labor rights much more difficult. Today’s Democratic Party remains far more solicitous to organized labor than today’s Republican Party, to be sure. But the party’s relationship with labor is fraught and increasingly anachronistic. Their offer to slow labor’s decline only looks good because the other option is complete annihilation.
So because labor is weak, the Democratic Party cannot keep up with the GOP in races where institutional strength and organization can make the difference. Republicans can rely on churches and the NRA to make sure the GOP candidate wins the local county board race (or whatever). In low-profile races, the kind that embody Max Weber’s dictum that politics is the “strong and slow boring of hard boards,” Democrats can’t keep up.
That’s the quandary that confronts the party on the local level and in the states. And it’s a question that many of the party’s leaders — Sen. Bernie Sanders and his “political revolution,” excluded — haven’t even tried to answer.
Elias Isquith is a daily columnist at Salon who focuses on politics and inequality. He tweets at @eliasisquith.
The Democratic Party is in much greater peril than its leaders or supporters recognize, and it has no plan to save itself.
Yes, Barack Obama is taking a victory lap in his seventh year in office. Yes, Republicans can't find a credible candidate to so much as run for speaker of the House. Yes, the GOP presidential field is led by a megalomaniacal reality TV star. All this is true — but rather than lay the foundation for enduring Democratic success, all it's done is breed a wrongheaded atmosphere of complacence.
The presidency is extremely important, of course. But there are also thousands of critically important offices all the way down the ballot.And the vast majority — 70 percent of state legislatures, more than 60 percent of governors, 55 percent of attorneys general and secretaries of state — are in Republicans hands. And, of course, Republicans control both chambers of Congress. Indeed, even the House infighting reflects, in some ways, the health of the GOP coalition. Republicans are confident they won't lose power in the House and are hungry for a vigorous argument about how best to use the power they have.
Not only have Republicans won most elections, but they have a perfectly reasonable plan for trying to recapture the White House. But Democrats have nothing at all in the works to redress their crippling weakness down the ballot. Democrats aren't even talking about how to improve on their weak points, because by and large they don't even admit that they exist.
Instead, the party is focused on a competition between Bernie Sanders and Hillary Clinton over whether they should go a little bit to Obama's left or a lot to his left, options that are unlikely to help Democrats down-ballot in the face of an unfriendly House map and a more conservative midterm electorate. The GOP might be in chaos, but Democrats are in a torpor.
VIDEO: Democrats list their biggest enemies
Democrats have been obliterated at the state level
The worst part of the problem for the Democratic Party is in races that are, collectively, the most important: state government.
Elections for state legislature rarely make the national news, but they are the fundamental building blocks of American politics. Since they run the redistricting process for the US House of Representatives and for themselves, they are where the greatest level of electoral entrenchment is possible.
And in the wake of the 2014 midterms, Republicans have overwhelming dominance of America's state legislatures.
In what Democrats should take as a further bleak sign, four of the 11 states where they control both houses of the state legislature — Maryland, New Jersey, Massachusetts, and Illinois — have a Republican governor. This leaves just seven states under unified Democratic Party control.
Republicans have unified control of 25 states. Along with the usual set of tax cuts for high-income individuals and business-friendly regulations, the result has been:
The spread of union-hostile "right to work" laws into the Great Lakes states
New curbs on voting rights, to further tilt the electorate in a richer, whiter, older direction
Large-scale layoffs of teachers and other public sector workers who are likely to support Democrats
Admittedly, one of the Democrats' seven states is California, which contains more than 10 percent of the nation's total population. But Texas and Florida combine for more people than the Golden State, and the GOP also dominates Ohio, Georgia, and North Carolina — all of which are among the 10 largest states by population. Democrats' largest non-California bastion of unified control is Oregon, home to only about one percent of the American people.*
As of 2012 or so, Democrats thought they had a solution to this. Hard-right GOP governors in places like Wisconsin and Florida had become unpopular and were clearly overreaching — reading a wave driven by the poor economy in 2010 as an ideological mandate for sweeping conservative policy change. And that worked in Pennsylvania's 2014 gubernatorial election — Tom Wolf rode a backlash against then-Gov. Tom Corbett's hard-right policies to victory. But Scott Walker, Rick Scott, Rick Snyder, and even Maine's Paul LePage were all reelected. And while the old plan didn't pan out, no new one has risen to take its place.
The GOP is flexible
Liberals accustomed to chuckling over the ideological rigor of the House GOP caucus won't want to hear this, but one of the foundations of the GOP's broad national success is a reasonable degree of ideological flexibility.
Essentially every state on the map contains overlapping circles of rich people who don't want to pay taxes and business owners who don't want to comply with labor, public health, and environmental regulations. In states like Texas or South Carolina, where this agenda nicely complements a robust social conservatism, the GOP offers that up and wins with it. But in a Maryland or a New Jersey, the party of business manages to throw up candidates who either lack hard-edged socially conservative views or else successfully downplay them as irrelevant in the context of blue-state governance.
Democrats, of course, are conceptually aware of the possibility of nominating unusually conservative candidates to run in unusually conservative states. But there is a fundamental mismatch. No US state is so left-wing as to have created an environment in which business interests are economically or politically irrelevant. Vermont is not North Korea, in other words.
But there are many states in which labor unions are neither large nor powerful and non-labor national progressive donor networks are inherently populated by relatively affluent people who tend to be emotionally driven by progressive commitments on social or environmental issues. This is why an impassioned defense of the legality of late-term abortions could make Wendy Davis a viral sensation, a national media star, and someone capable of activating the kind of donor and volunteer networks needed to mount a statewide campaign. Unfortunately for Democrats, however, this is precisely the wrong issue profile to try to win statewide elections in conservative states.
Republicans have a plan
Any serious article about the prospects for Democratic Party policymaking in 2017 starts with the premise that Republicans will continue to hold a majority in the US House of Representatives. This presumption is built on four premises:
The natural distribution of population in the United States tends to lead the average House district to be more GOP-friendly than the overall population.
GOP control of most state legislatures lets Republicans draw boundaries in a way that is even more GOP-friendly than the natural population distribution would suggest.
Incumbents have large advantages in House elections, and most incumbents are Republicans.
So-called "wave" elections in which tons of incumbents lose are typically driven by a backlash against the incumbent president. Since the incumbent president is a Democrat, Democrats have no way to set up a wave.
One striking fact about this is that the presumption of continued GOP control is so solid that you don't even get pushback from House Democratic leaders when you write it down. Privately, some backbench Democrats express frustration that the leadership has no plan to try to recapture the majority. In their defense, it's not like anyone outside the leadership has a great plan either.
But this isn't just a parochial issue for the House Democratic caucus. It means that the party's legislative agenda is entirely dead on arrival at the federal level. And it's particularly striking that this stronghold of conservatism comes from the exact institution that so frequently generates embarrassing headlines for the GOP. House Republicans act extreme in part because they know they can get away with it.
The GOP, by contrast, has basically two perfectly plausible plans for moving its agenda forward. One is to basically change nothing and just hope for slightly better luck from the economic fundamentals or in terms of Democratic Party scandals. The other is to shift left on immigration and gain some Latino votes while retaining the core of the party's commitments. Neither of these plans is exactly brilliant, innovative, or foolproof. But neither one is crazy. Even if you believe that Democrats have obtained a structural advantage in presidential elections, it's clearly not an enormous one. The 51 percent of the vote obtained by Barack Obama in 2012 was hardly a landslide, early head-to-head polling of 2016 indicates a close race, and there's always a chance that unexpected bad news will hit the US economy or impair our national security.
Winning a presidential election would give Republicans the overwhelming preponderance of political power in the United States — a level of dominance not achieved since the Democrats during the Great Depression, but with a much more ideologically coherent coalition. Nothing lasts forever in American politics, but a hyper-empowered conservative movement would have a significant ability to entrench its position by passing a national right-to-work law and further altering campaign finance rules beyond the Citizens Unitedstatus quo.
VIDEO: Democrats on the biggest threat to national security
The first step for Democrats is admitting they have a problem
In some ways, the Democrats' biggest disadvantage is simply their current smugness. A party that controls such a small share of elected offices around the country is a party that should be engaged in vigorous debate about how to improve its fortunes. Much of the current Republican infighting — embarrassing and counterproductive though it may be at times — reflects the healthy impulse to recognize that the party lacks the full measure of power that it desires, and needs to argue about optimal strategies for obtaining it.
On the Democratic side, the personal political success of Barack Obama has created an atmosphere of complacency and overconfidence. If a black guy with the middle name Hussein can win the White House, the thinking seems to be, then anything is possible. Consequently, the party is marching steadily to the left on its issue positions — embracing same-sex marriage, rediscovering enthusiasm for gun control, rejecting the January 2013 income tax rate settlement as inadequate, raising its minimum wage aspirations to the $12-to-$15 range, abandoning the quest for a grand bargain on balancing the budget while proposing new entitlements for child care and parental leave — even though existing issue positions seem incompatible with a House majority or any meaningful degree of success in state politics.
Whatever you make of this agenda substantively, there's no way to actually enact it without first achieving a considerably higher level of down-ballot electoral success than Democrats currently enjoy.
But instead of a dialogue about how to obtain that success, Democrats are currently engaged in a slightly bizarre bidding war between Hillary Clinton and Bernie Sanders to see whether Congress in 2017 will reject a legislative agenda that is somewhat to the left of Obama's or drastically to its left. The differences between them are real, of course, and at least somewhat important.
But the much more significant question facing the party isn't about the White House — it's about all the other offices in the land. The problem is that control of the presidency seems to have blinded progressive activists to the possibility of even having an argument about what to do about all of them. That will change if and when the GOP seizes the White House, too, and Democrats bottom out. But the truly striking thing is how close to bottom the party is already and how blind it seems to be to that fact.
* Correction: Earlier versions of this article said that Minnesota or Washington was the biggest non-California Democratic-controlled state, but in fact the Republicans control one legislative house in both of those states.
“It will be the largest redistribution of wealth from the poor to the wealthy in history.”
No one knows how climate change will transform our lives. Not only is it uncertain how much elevated levels of carbon dioxide in the atmosphere will raise temperatures and affect precipitation in different parts of the world, but there remains much to learn about how these changes will reduce agricultural productivity, damage human health, and affect economic growth. In addition to these worrisome unknowns is a question that provokes even deeper anxiety: could the damage wrought by climate change, or even the threat of it, lead to a far more violent world?
In Black Earth: The Holocaust as History and Warning, Timothy Snyder argues that such fears have historical justification. A Yale University professor and a prominent scholar of the Holocaust, Snyder describes Hitler as driven by a twisted ecological panic that the German people would not have enough land to grow the food they needed. To Hitler, he writes, “ecology was scarcity, and existence meant a struggle for land.” Hitler particularly lusted after the fertile lands of Ukraine. In fact, Germany was not in danger of starving, and Snyder points out that many of the agricultural improvements that would later produce the Green Revolution were already under way. But Hitler, Snyder explains, did not believe technology was capable of significantly increasing agricultural output; indeed, he rejected the idea that science in general could disrupt the racial struggle for survival he perceived.
Much of Black Earth is a description of how Germany ruthlessly destroyed neighboring countries and their political institutions, leading to the mass murder of Jews in those regions. But then, in the conclusion, Snyder makes a disturbing “warning” based on the lessons of the Holocaust. As the benefits of the Green Revolution peter out and the risks of climate change increase, he suggests, we are once again becoming vulnerable to fears of food insecurity—and, thus, once again in danger of battling over agricultural lands. “Another moment of choice, a bit like the one Germany faced in the 1930s, could be on the way,” Snyder writes. He adds: “We have changed less than we think.”
Snyder argues that the changing climate has already played a role in conflicts in Africa, such as the civil war in Sudan that began in 2003. But his real fears are for the future. China, he points out, is unable to feed itself with domestic agricultural production, and many of its people have personally faced the terror of starvation: the famine caused by Mao’s Great Leap Forward between 1958 and 1962 killed tens of millions. Much as Germany in the 1930s envied the agricultural resources of Eastern Europe, China is increasingly attempting to control those of Africa and eyeing the vast resources of its neighbor Russia, says Snyder.
Invoking the haunting evils of Nazi Germany to warn of future dangers ignores the unique perversion of Hitler’s thinking. And, as Snyder readily acknowledges, China is not Nazi Germany; its rulers have embraced science and technology in addressing climate change. Nevertheless, Snyder’s fundamental point remains: climate change—even the prospect of it—has the power to grotesquely transform global politics. And if history is any guide, governments and rulers may not respond to the threats in a rational manner.
Syria and the Mideast
The suspicion that climate change will contribute to conflict is not new. Nicholas Stern, a former chief economist of the World Bank and advisor to the British government, predicted in his 2006 report “Economics of Climate Change” that “higher temperatures will increase the chance of triggering abrupt and large-scale changes that lead to regional disruption, migration and conflict.” Over the last decade, many researchers have tried to document the connection.
In 2011, Solomon Hsiang, then at Princeton and now a professor at the Goldman School of Public Policy at the University of California, Berkeley, coauthored a paper showing that instances of civil war doubled in the tropics during times when the El Niño effect produced unusually warm temperatures at those latitudes. The paper was the first to demonstrate that a global climate effect could be linked to conflict. A few years later, Hsiang and his colleagues at Berkeley and Stanford analyzed the growing literature on climate and conflict and found a consistent result in 60 research papers: rising temperatures and changes in precipitation patterns increased the risk of conflicts. Not only is there evidence that climate is connected to conflict, says his coauthor Marshall Burke, a Stanford professor, but the effects can be substantial. He says, “In sub-Saharan Africa, when temperatures are a degree warmer, we see 20 to 30 percent increase in civil conflict. That’s a huge number.”
One explanation might lie in the way climate changes affect agriculture. Take the war in Syria, for example. Beginning in the winter of 2006-2007, the Fertile Crescent, which runs across northern Syria and provides the country with much of its food, experienced a three-year drought that was the most severe on record. It prompted as many as 1.5 million people to migrate to the country’s urban centers. These formerly rural people joined more than a million refugees from Iraq’s war of the mid-2000s, who were already living in the areas surrounding Syria’s cities. There, growing crime, inadequate infrastructure, overcrowding, and a lack of response from the government all contributed to unrest. Widespread uprisings in these urban outposts quickly spun into today’s civil war, which began in early 2011.
Climate change made the drought far more severe, and the subsequent widespread crop failure and resulting mass migration contributed to the conflict, says Colin Kelley, a climate scientist at the University of California, Santa Barbara, who has specialized in the Mediterranean region. In a recent paper, Kelley and his coauthors document how rising levels of greenhouse gases disrupted the normal patterns of wind that bring moisture from the Mediterranean during the winter rainy season. It’s part of a long-term drying effect in the region and consistent with predictions from climate-change models, he says. In general, he adds, subtropical regions around the world, such as the Fertile Crescent, are expected to become more arid.
Some political scientists aren’t convinced that such climate effects trigger wars. “There is more that we don’t know than what we do know, but we do know there is no general and direct relationship between climate variability and large-scale organized wars,” says Halvard Buhaug of the Peace Research Institute Oslo in Norway. Still, Buhaug does say it “makes sense” that climate change might exacerbate the main causes of civil war, which he says include systemic inequality, severe poverty, and poor governance. “If climate change affects groups in society differently or presents challenges too severe or too great for political systems to respond,” he says, “then of course climate change might contribute to more instability in the future.”
The relative importance of the drought in causing the Syrian war is very difficult to untangle from the other factors, Kelley acknowledges. But, he says, determining the specific role of climate is not merely an academic question, especially in regions as volatile as the Middle East. “Who’s next?” he asks. “What countries will climate change push over the edge?”
Costs
The research on the links between climate change and conflict is part of a larger effort to better understand the economic and social impact that rising temperatures will have on people in various parts of the world. The effort is designed to improve on previous analyses that often involved crude back-of-the-envelope calculations of impacts averaged over large areas. “Until a few years ago,” says Berkeley’s Hsiang, “we really had no idea what was coming down the road.”
In an attempt to make economic forecasts more rigorous, Hsiang and his colleagues, who include climate scientists and social scientists, have looked at how temperature has affected labor productivity and agriculture in different countries over the years. In a paper published this fall in Nature, the group examined how yearly changes in temperature affected economic output in 160 countries between 1960 and 2010. Then they combined the data with climate-change models developed by dozens of teams around the world that predict how temperatures will change with global warming. The result is a projection of economic growth throughout the next century.
The findings are disturbing. The scientists expect that if climate change continues largely unabated, global economic output will drop 23 percent by century’s end, a much higher cost than previously predicted. The researchers found that economic output universally declines as average yearly temperatures rise above 13 °C; labor performance, productivity, and agriculture output begin dropping as temperatures increase. Surprisingly, the drop after 13 °C is seen in both rich and poor countries, regardless of whether the economy was dependent on agriculture or nonagricultural industrial sectors.
But perhaps the most shocking finding is just how uneven the impacts will be. Since poorer countries already tend to be hotter, they will feel the brunt of the damage. While the economies of China, India, and much of South America suffer, those of Western Europe, Russia, and Canada could actually benefit. “It would be the largest redistribution of wealth from the poor to the wealthy in history,” Hsiang says. “It’s incredibly regressive.”
How the world’s politicians and populations respond to this growing wealth inequality could be the most critical uncertainty we face. And Snyder reminds us how badly things can go if politicians and rulers prey on the fears and prejudices of their people.
One of the most powerful lessons from Hitler’s regime has to do with, as Snyder puts it, “conflating science with politics.” Rightly, he points an accusing finger at climate-change deniers motivated by political ideology. Likewise, he might have cited those on the other end of the political spectrum who turn their backs on technology and science, rejecting options such as nuclear power and genetic advances in agriculture that could help lessen the impact of climate change. Rather, he argues, policy decisions must be informed by objective scientific results.
Despite all the uncertainties about the future of climate change, the science is clear on a few basic points. We must move as quickly as possible to transform our energy infrastructure so that we can reduce carbon emissions and, by around midcentury, essentially stop such pollution altogether. But the science is also beginning to tell us that even radical steps to curb emissions may not be enough. The damage from climate change is already beginning to hurt people in many parts of the world and will escalate even if emissions begin to drop soon. It’s time we figured out how to adapt. And that’s where the recent research clarifying the social and economic costs could help. “The climate is going to change,” says Hsiang. “We need to figure out how to minimize the losses.”
Orsola Costantini, Senior Economist at the Institute for New Economic Thinking, is the author of a newpaper which exposes the disturbing history of how a budget approach cloaked in scientific and technical jargon became a tool to manipulate public opinion and serve the interests of the powerful. In the following conversation, she reveals how austerity has been sold to the public through a process that hurts the people, consolidates knowledge and power at the top, and compromises democracy. As economic inequality reaches new heights and austerity programs are debated around the world (most recently, in Spain and Portugal), learn how a lie becomes a political and economic “truth." *This post originally appeared on the blog of the Institute for New Economic Thinking.
Lynn Parramore: Your recent work deals with something called the “cyclically adjusted budget.” What is it and what does it mean in the lives of ordinary people?
Orsola Costantini: The Cyclically Adjusted Budget (CAB) is a statistical estimate that aids government officials when they decide what to spend money on and how much they’re going to tax you. It is mostly federal governments that use it, but also international institutions like the International Monetary Fund (IMF).
Economists will tell you this tool is imprecise. Yet national and international institutions still rely on it to justify important decisions about government spending and taxation.
But there’s something the experts aren’t telling you: the cyclically adjusted budget can be easily maneuvered depending on which way the political winds are blowing. And it appears technical and obscure enough so that regular people tend to look at it as objective and undisputable. That’s where the trouble comes in.
Politicians and government officials using the CAB can limit the range of political choices that appear viable to a community. Policymakers can avoid the hassle of taking political responsibility for these choices, too. We had to do it! The budget says so!
Look at what happened all over Europe in 2008: It’s one thing to say to students in the streets that their education and economic wellbeing are not a priority for the government while saving banks is. It’s quite another to say that politics has nothing to do with it and the economy requires taking certain actions, sometimes painful.
LP: You indicate that this approach to budgeting was invented as a way of making the New Deal acceptable to the business community. How did that work? Over time, who has benefitted from it? Who has lost?
OC: Back in the 1940s, workers were fighting for their rights, class struggle was heating up, and soldiers would soon be returning from the fronts. At that point, a new business organization, the Committee for Economic Development (CED), came together. Led by Beardsley Ruml and other influential business figures, the CED played a crucial role in developing a conservative approach to Keynesian economics that helped make policies that would help put all Americans to work acceptable to the business community. The idea was that more consumers would translate into more profits — which is good for business. After all, the economic experts and budget technicians said so, not just the politicians. And the business leaders were told that economic growth and price stability would go along with this, which they liked.
But things changed progressively over the 1970s and early 1980s. Firms went global. They became financialized. The balance of power between workers and owners started to shift more towards the owners, the capitalists. People were told they needed to sacrifice, to accept cuts to social spending and fewer rights and benefits on the job — all in the name of economic science and capitalism. The CAB was turned into a tool for preventing excessive spending — or justifying selected cuts.
Middle class folks were afraid that inflation would erode their savings, so they were more keen to approve draconian measures to cut wages and reduce public budgets. People on the lower rungs of the economic ladder felt the pain first. But eventually the middle class fell on the wrong side of the fence, too. Most of them became relatively poorer.
I suppose this shows the limits of democracy when information, knowledge, and ultimately power are unequally distributed.
LP: You’re really talking about birth of austerity and the way lies about public spending and budgets have been sold to the public. Why is austerity such a powerful idea and why do politicians still win elections promoting it?
OC: Austerity is so powerful today because it feeds off of itself. It makes people uncertain about their lives, their debts, and their jobs. They become afraid. It’s a strong disciplinary mechanism. People stop joining forces and the political status quo gets locked down.
Even the name of this tool, the “cyclically adjusted budget,” carries an aura of respect. It diverts our attention. We don’t question it. It creates a barrier between the individual and the political realm: it undermines democratic participation itself. This obscure theory validates, with its authority, a big economic mistake that sounds like common sense but is actually snake oil — the notion that the federal government budget is like a household budget. Actually, it isn’t. Your household doesn’t collect taxes. It doesn’t print money. It works very differently, yet the nonsense that it should behave exactly like a household budget gets repeated by politicians and policymakers who really just want to squeeze ordinary people.
LP: How does all this play out in the U.S. and in Europe?
OC: The European Union requires its members to comply with something called a cyclically adjusted budget constraint. Each country has to review its economic and fiscal plans with the European Commission and prove that those are compatible with the Pact. It’s a ceiling on a country’s deficit, but it’s also much more than that.
Thanks to the estimate, the governments of Italy or Spain, for example, are supposed to force the economy toward some ideal economic condition, the definition of which is obviously quite controversial and has so far rewarded those countries that have implemented labor market deregulation, cut pensions, and even changed the way elections happen. Again, it’s a control mechanism.
In the U.S. this scenario plays out, too, although less strictly. Talk about the budget often relies on the same shifty and politically-shaded statistical tools to support one argument or the other. Usually we hear arguments that suggest we have to cut social programs and workers’ rights and benefits or face economic doom. Tune in to the presidential debates and you’ll hear this played out — and it isn’t strictly limited to one party.
LP: How do we stop powerful players from co-opting economics and budgets for their own purposes?
OC: Our education system is increasingly unequal and deprived of public resources. This is true in the U.S. but also in Europe, where the crisis accelerated a process that was already underway. When children don’t get good educations, the production of knowledge falls into private control. Power gets consolidated. The official theoretical frameworks that benefit the most powerful get locked in.
In the economic field, we need to engage different points of view and keep challenging dominant narratives and frameworks. One day, human curiosity will save us from intellectual prostitution.
Lynn Parramore is contributing editor at AlterNet. She is cofounder of Recessionwire, founding editor of New Deal 2.0, and author of "Reading the Sphinx: Ancient Egypt in Nineteenth-Century Literary Culture." She received her Ph.D. in English and cultural theory from NYU, and she serves on the editorial board of Lapham's Quarterly. Follow her on Twitter @LynnParramore.
The 2009 G20 protests. (Photo: James Butler/cc/flickr)
The seizure of political and economic power by corporations is unassailable. Who funds and manages our elections? Who writes our legislation and laws? Who determines our defense policies and vast military expenditures? Who is in charge of the Department of the Interior? The Department of Homeland Security? Our intelligence agencies? The Department of Agriculture? The Food and Drug Administration? The Department of Labor? The Federal Reserve? The mass media? Our systems of entertainment? Our prisons and schools? Who determines our trade and environmental policies? Who imposes austerity on the public while enabling the looting of the U.S. Treasury and the tax boycott by Wall Street? Who criminalizes dissent?
A disenfranchised white working class vents its lust for fascism at Trump campaign rallies. Naive liberals, who think they can mount effective resistance within the embrace of the Democratic Party, rally around the presidential candidacy of Bernie Sanders, who knows that the military-industrial complex is sacrosanct. Both the working class and the liberals will be sold out. Our rights and opinions do not matter. We have surrendered to our own form of wehrwirtschaft. We do not count within the political process.
This truth, emotionally difficult to accept, violates our conception of ourselves as a free, democratic people. It shatters our vision of ourselves as a nation embodying superior virtues and endowed with the responsibility to serve as a beacon of light to the world. It takes from us the “right” to impose our fictitious virtues on others by violence. It forces us into a new political radicalism. This truth reveals, incontrovertibly, that if real change is to be achieved, if our voices are to be heard, corporate systems of power have to be destroyed. This realization engenders an existential and political crisis. The inability to confront this crisis, to accept this truth, leaves us appealing to centers of power that will never respond and ensures we are crippled by self-delusion.
The longer fantasy is substituted for reality, the faster we sleepwalk toward oblivion. There is no guarantee we will wake up. Magical thinking has gripped societies in the past. Those civilizations believed that fate, history, superior virtues or a divine force guaranteed their eternal triumph. As they collapsed, they constructed repressive dystopias. They imposed censorship and forced the unreal to be accepted as real. Those who did not conform were disappeared linguistically and then literally.
The vast disconnect between the official narrative of reality and reality itself creates an Alice-in-Wonderland experience. Propaganda is so pervasive, and truth is so rarely heard, that people do not trust their own senses. We are currently being assaulted by political campaigning that resembles the constant crusading by fascists and communists in past totalitarian societies. This campaigning, devoid of substance and subservient to the mirage of a free society, is anti-politics.
No vote we cast will alter the configurations of the corporate state. The wars will go on. Our national resources will continue to be diverted to militarism. The corporate fleecing of the country will get worse. Poor people of color will still be gunned down by militarized police in our streets. The eradication of our civil liberties will accelerate. The economic misery inflicted on over half the population will expand. Our environment will be ruthlessly exploited by fossil fuel and animal agriculture corporations and we will careen toward ecological collapse. We are “free” only as long as we play our assigned parts. Once we call out power for what it is, once we assert our rights and resist, the chimera of freedom will vanish. The iron fist of the most sophisticated security and surveillance apparatus in human history will assert itself with a terrifying fury.
The powerful web of interlocking corporate entities is beyond our control. Our priorities are not corporate priorities. The corporate state, whose sole aim is exploitation and imperial expansion for increased profit, sinks money into research and development of weapons and state surveillance systems while it starves technologies that address global warming and renewable energy. Universities are awash in defense money but cannot find funds for environmental studies. Our bridges, roads and levees are crumbling from neglect. Our schools are overcrowded, decaying and being transformed into for-profit vocational centers. Our elderly and poor are abandoned and impoverished. Young men and women are crippled by unemployment or underemployment and debt peonage. Our for-profit health care drives the sick into bankruptcy. Our wages are being suppressed and the power of government to regulate corporations is dramatically diminished by a triad of new trade agreements—the Trans-Pacific Partnership, the Transatlantic Trade and Investment Partnership and the Trade in Services Agreement. Government utilities and services, with the implementation of the Trade in Services Agreement, will see whole departments and services, from education to the Postal Service, dismantled and privatized. Our manufacturing jobs, sent overseas, are not coming back. And a corporate media ignores the decay to perpetuate the fiction of a functioning democracy, a reviving economy and a glorious empire.
The essential component of totalitarian propaganda is artifice. The ruling elites, like celebrities, use propaganda to create false personae and a false sense of intimacy with the public.
The emotional power of this narrative is paramount. Issues do not matter. Competency and honesty do not matter. Past political stances or positions do not matter. What is important is how we are made to feel. Those who are skilled at deception succeed. Those who have not mastered the art of deception become “unreal.” Politics in totalitarian societies are entertainment. Reality, because it is complicated, messy and confusing, is banished from the world of mass entertainment. Clichés, stereotypes and uplifting messages that are comforting and self-congratulatory, along with elaborate spectacles, replace fact-based discourse.
“Entertainment was an expression of democracy, throwing off the chains of alleged cultural repression,” Neal Gabler wrote in “Life: The Movie: How Entertainment Conquered Reality.” “So too was consumption, throwing off the chains of the old production-oriented culture and allowing anyone to buy his way into his fantasy. And, in the end, both entertainment and consumption often provided the same intoxication: the sheer, endless pleasure of emancipation from reason, from responsibility, from tradition, from class and from all the other bonds that restrained the self.”
The more communities break down and poverty expands, the more anxious and frightened people will retreat into self-delusion. Those who speak the truth—whether about climate change or our system of inverted totalitarianism—will be branded as seditious and unpatriotic. They will be hated for destroying the illusion. This, as Gabler noted, is the danger of a society dominated by entertainment. Such a society, he wrote, “… took dead aim at the intellectuals’ most cherished values. That theme was the triumph of the senses over the mind, of emotion over reason, of chaos over order, or the id over the superego. … Entertainment was Plato’s worst nightmare. It deposed the rational and enthroned the sensational and in so doing deposed the intellectual minority and enthroned the unrefined majority.”
Despair, powerlessness and hopelessness diminish the emotional and intellectual resilience needed to confront reality. Those cast aside cling to the entertaining forms of self-delusion offered by the ruling elites. This segment of the population is easily mobilized to “purge” the nation of dissenters and human “contaminants.” Totalitarian systems, including our own, never lack for willing executioners.
Many people, maybe even most people, will not wake up. Those rebels who rise up to try to wrest back power from despotic forces will endure not only the violence of the state, but the hatred and vigilante violence meted out by the self-deluded victims of exploitation. The systems of propaganda will relentlessly demonize those who resist, along with Muslims, undocumented workers, environmentalists, African-Americans, homosexuals, feminists, intellectuals and artists. The utopia will arrive, the state systems of propaganda will assure its followers, once those who obstruct or poison it are removed. Donald Trump is following this script.
The German psychoanalyst and sociologist Erich Fromm in his book “Escape From Freedom” explained the yearning of those who are rendered insignificant to “surrender their freedom.” Totalitarian systems, he pointed out, function like messianic religious cults.
“The frightened individual,” Fromm wrote, “seeks for somebody or something to tie his self to; he cannot bear to be his own individual self any longer, and he tries frantically to get rid of it and to feel security again by the elimination of this burden: the self.”
This is the world we live in. The totalitarian systems of the past used different symbols, different iconography and different fears. They rose up out of a different historical context. But they too demonized the weak and persecuted the strong. They too promised the dispossessed that by subsuming their selves into that of demagogues, or parties or other organizations that promised unrivaled power, they would become powerful. It never works. The growing frustration, the ongoing powerlessness, the mounting repression, leads these betrayed individuals to lash out violently, first at the weak and the demonized, and then at those among them who lack sufficient ideological purity. There is, in the end, an orgy of self-immolation. The death instinct, as Sigmund Freud understood, has a seductive allure.
History may not repeat itself. But it echoes itself. Human nature, after all, is constant. We will react no differently from those who went before us. This should not dissuade us from resisting, but the struggle will be long and difficult. Before it is over there will be blood in the streets.