Republican Scam

The scam was this: The banks unloaded their debts onto the taxpayer, and then the fiscal hawks dutifully began screaming about how we were drowning in debt and how Social Security and Medicare were responsible. Cuts in your earned benefits will pay for the banks bad loans. Beautiful !: Mike Lofgren, The Party is Over

How Right Wingers scam people into Buying Their Toxic Philosophy

Capitalism's Self-Inflicted Apocalypse

You may wonder how it is that the Republican scam has worked so well for the well connected or why it is such a disaster for the rest of us. The results are plain to see.  The distribution of wealth in the US is leading us to a two-class society. A few very wealthy people have profited immensely at the expense of everyone else. It is part of the vast right-wing conspiracy. If we are not there already, we are on a path that will lead to aristocracy.

Here's how its done:

  • Republicans want smaller government, spread the message that private is better than public, and, as much as possible, outsource to the private sector including schools, prisons, military, security, etc. Since there is little accountability in the deregulated private sector, they cut wages, raid pensions, bust unions, hire lightly qualified people, and, when profitable, move work off shore. This requires great management skill (a sociopath), so extraordinary salaries are required for a CEO. After this, public employees contracts are 'renegotiated'. That way, everyone, except the CEO, gets cut. That's how they roll us to the bottom.
  • They cut taxes driving government into debt so that financial entities can loan money instead and pocket the interest.
  • They loan to subprime borrowers knowing that the result will be default, bundle the loans into securities, sell them to innocents, and then bet they will go down, and they make money at every step.
  • They lobby Congress so that if derivatives trading goes wrong, the taxpayer will bail them out.

Market fundamentalism

Over the last few years, the financial sector grew like a cancer and destroyed the economy. No other industry could match the profits from the financial sector, so the brightest went not to industry, but to Wall Street.

As wages and benefits declined, demand fell, and the economy went into a downward spiral. Banking went wild after the Glass-Steagle Act was repealed. Derivatives brought short term profit at the price of long term risk. 

Newspapers were consolidated, loaded down with resulting debt, milked for extraordinary profits. In the process they were downsized, the product degraded, readership fell, but right-wing propaganda still flourished as oligarchs took over the industry. Media concentration leads to increasing market domination by a declining number of corporations, and smaller players are forced out in many ways. The internet offers some diversity of opinion and easy access to the foreign press...for now.

US Manufacturing, pressured by Wal-Mart and the like, migrated to overseas sweatshops where there are few environmental protections, and fewer social supports, and often totalitarian governments. Capitalism thrives under dictatorships.

Auto companies used their profits to buy out unions, send jobs overseas. Product development not only lagged, but was irresponsible, and anemic. They went bankrupt.  Even though they were rescued, they may not recover.

Consumers are no longer protected by usury laws. Predatory lending companies never expected their loans to be paid off. Bankruptcy laws were strengthened by Republicans for corporations. Students can no longer claim bankruptcy.

Corporations, in their quest for profits, aggressively fought unions. Wages fell. CEOs helped themselves to obscene compensation packages even as their companies verged on insolvency. Pension funds were raided. Taxpayers paid for the failures. Since unions are traditional Democratic supporters, it is predictable Republican activity to oppose them.

Income distribution changed shrinking the middle class, rewarding the already wealthy, and continues to increase poverty. We have lemon socialism. That is, socialism for the rich.

Result: the system collapsed. and taxpayers are paying to shore it up. (Not fix it.) Republicans think that the market left to itself will do the right thing. It won't. The middle class having lost much of their assets and in heavy debt may find themselves  serfs if they are luck enough to find work...but many will find themselves one of the surplus labor.

"Markets enable people to pursue their private interests through free exchange with others, but markets are not designed to take care of common interests such as the preservation of peace, the protection of the environment or the maintenance of the market mechanism itself. Such common interests require political institutions...." The Bubble of American Supremacy: Correcting the Misuse of American Power: Page 196 George Soros.

The Economy

 It should not be necessary to say this: The economy is the servant of the people, not their master. It needs to be tamed so that it does not spin out of control. What can control it is regulation. Anathema to Republicans, but a necessity. A mixed economy, balanced public and private, is best. We need a dialog determining division of responsibility between public and private.

The current crash is no accident. The Glass-Steagle Act was a jewel of the New Deal legislation. It divided banks into savings banks (which were government insured), and investment banks (which were free to take risk, but were not insured). This law was considered quaint. How did that work out ?

Economic statistics are designed to be misleading. Inflation numbers are minimized so that Social Security increases will be low, unemployment statistics understate the reality, and worst is we lump all expenditures as if they were all beneficial. A natural disaster like Katrina gives a large boost to GNP. So do nuclear weapons.

David Korten's recent book, Agenda For A New Economy, makes a convincing case that we cannot and should not continue with business as usual. He writes:

"Wall street interests have defined not only the structure of our economy but also the indicators by which we assess its performance. Focused on financial indicators, we accept that the economy is sound even when it is killing us. Real-wealth indicators of the health and well-being of our children, families, communities, and natural systems reveal terminal systemic failure. Since we get what we measure, we should measure what we want."

Why this crisis might be our best chance to build a new economy.

Corporate Media

To support the 'conservative' agenda, corporate media and the Republican's message celebrates ignorance.

With pretty much all of the media sending the same message, you are conditioned to believe that the market is always right and it is the best guide to our direction. Nothing could be further from the truth. The market, when it is allowed free reign will benefit the wealthy, who have the resources to engage with it. The market is amoral, so it will do what it pleases whether it be selling drugs to children or providing weapons to criminals. Wages are suppressed, most of the people fall into debt servitude and the interest trickles up. Capitalism thrives under dictatorship and we are slowly gravitating to a strong-man head of state. Profits go to the insiders, and the debt goes to the taxpayers. Such is the dynamic of a banana republic. It is corruption.

Political power rises to the top as well:  For the connected, profitable contracts follow, tax burden lifted.  Congress makes decisions based on money, they are mostly not what most of the people would choose.

Willful Ignorance

Rush Limbaugh, Sarah Palin, and other leading Republicans are not scholars. They don't listen to scholars, and they label them as 'liberals'. They believe the ghost stories told by Christian supremacists. What they have mastered is Orwellian speak. They may call themselves 'conservative', but they are not in any real sense of the word.

When 'conservatives' sneer at Harvard and other Universities, they are rejecting the judgment of responsible accademics who are informed, scholarly, and educated. 

Faith based decision making, is not based on any evidence and is not just counterproductive, but can be disastrous. It should not surprise anyone that terrorist violence is often motivated by religion.

From that grows the Republican War on Science.

Extreme religion cannot support quality education. When it promotes or motivates people to violence, it should at least lose its tax exempt status.

Observe that the best educated communities are more affluent, more prosperous, liberal and do not vote Republican. Religion is highly correlated with poverty, lack of education, and rejection of science.

Divisiveness

Racism, Religion, are divisive. The Republicans play them often. See Immigration.

There is talk that the current immigration flap has been deliberately raised by Republicans to block action on climate change.

Privatization Gone Wild

Kids For Cash

Undermine the Constitution

 Republicans don't much trouble themselves with the Constitution...except possibly for the second Amendment.

They need to re-read the Preamble to the Constitution:

"We the people of the United States, in order to form a more perfect union, establish justice, ensure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United State of America "

There are some good intentions and some appropriate mechanisms in the Constitution for dealing with the kind of problems that we now have. The notion of Checks and Balances requires that the executive branch must be open to oversight. For the Bush years it was not. The press, with few exceptions, pretty much ignored this simple fact. Canadian media is not allowed to lie, and based on his performance Murdoch is not allowed to do business there.

We should beware concentration of power. Republicans advocated an all powerful Presidency and on this they are extremely misguided. Unfortunately we often have Presidents who are not particularly wise, In any event in large organizations where decisions are made by a single individual, they can be very wrong. (Example: It would be a good idea to support Senator Feingold's initiative to see that Senate seats are filled by elections...not by Governor's appointment. Looks like an obvious improvement to me.)

Much of the Bill of Rights has been shredded. You have no fourth amendment rights at the airport. When we last visited Washington, DC I decided to visit the National Archive where you can see the original Constitution in its resting place. At the entrance, the security guard told me to empty my pockets, place my carry-on in the basket, and to walk through the metal detector. I told her what I thought, turned around, and walked away.

 Economic stratification sheds doubt whether we have much of a democracy any more. 

Corporate Responsibility

Many corporations are not good citizens. They tolerate environmental damage, worker rights suppression, workplace safety compromises, toxic products,  biopiracy, advertising exploitation. They own the media: they are important determiners of culture, they can strongly influence our political outcomes, and they have made technology advances in broadcasting into a useless distraction that carries little or no social value. They are willing to move offshore if it is profitable to do so...and it is.

There exist in the world many countries where labor unions cannot be organized, where wages are at bare subsistence, where there are no environmental laws, where workplace safety is unimportant. In short, a free market paradise. US workers cannot compete on that basis, so their wages decline,  job migration increases, and many people find themselves surplus. Being politically powerless, they are also victims of a disappearing social safety net.

Right wing corporations manufacture our voting machines and keep the mechanism inscrutable because the software is a trade secret. The public does not know whether elections have any integrity or not. We can easily see a consistent pattern of very bad leadership though.

As with the Presidency, Republicans favor extreme Corporate concentration. Concentration of power is dangerous in any form, but the public is not really informed of that because media is strictly on the corporate message. McCain was clearly for big media, not the public.

Concentration works well for Corporations. It destroys the competition and, as we see all too frequently now, it makes companies too big to fail. Taxpayers become responsible for their losses, but the profits are theirs. This is the Republican way: Socialism for the rich. There is no escaping that CEO compensation is often obscene, and it is but a symptom of widespread corporate governance dysfunction. There is no pretense of democracy in corporate America.

Media make it clear that the market decides. That private management is always better than public. That government failure is inevitable, and certainly not the responsibility of Republicans.  These are the starting premises for media lies. We have seen that extreme deregulation results in corruption.

Free markets do not operate in conditions of oligopoly. Since anti-trust laws are rusty, consolidation proceeds inexorably toward market domination in practically every industry. When it proceeds too far, the market crashes. That's the long history, and, since we haven't learned that lesson, it WILL happen again. Each time it is a little worse.

Big Red Scare

Question: Is the private sector always the best choice for an industry ?

Answer: No. Examples are many (prisons, military like Blackwater), but lets start with health care

Here's an eye-opening letter to the editor of The Economist, Jan 22, 2009 issue:

"SIR – Michael Moore’s claim that Cuba has a better health-care system than the United States is not as “ridiculous” as you think (“Health screen”, January 10th). The United States was ranked 37th in the latest report on health care from the World Health Organization, whereas Cuba ranked 39th. I suspect there is little difference between being placed 37th and 39th. However, when productivity is factored in Cuba’s health-care system does indeed seem to be more effective than America’s. America spends 15% of GDP on health care (which works out at $6,700 per person in 2006 dollars) while Cuba spends 8% ($360 per person). Most businesses would consider themselves better than their competitors if they delivered an equivalent product or service at one-twentieth the cost. Kenneth McLeod, Chair, Department of bioengineering, Binghamton University" http://www.economist.com/opinion/displaystory.cfm?story_id=12970732

People here in the US don't hear such things because there is a Media Blackout on Single-Payer Healthcare (3/6/2009)

More than 60 lawmakers co-sponsored H.R. 676, the single-payer bill in Congress, but media never talks about it. Given the high level of popular support the policy enjoys, that's all the more reason it should be front and center in the public debate about the future of healthcare.

The Republicans on talk radio, when they are not considering rebellion, call this socialism. Bear in mind that they are dispensing cool-aid for the corporate elite and the last thing that they would tolerate is a thoughtful discussion of optimal division of responsibilities between the public and private sectors.

Media is the problem. Problem solving will be difficult until it is fixed.

People who listen to and rely on US media will often respond that a single payer system is Socialism. They are ready to go to war to prevent such a thing, but it means that insurance companies will continue to run US health care and it will continue to be another way to scam the public.

When Ronald Reagan was in office, a politicized 'intelligence' informed him that the Russians were ten feet tall, and that justified an unprecedented military buildup. The military industrial complex has succeeded in placing facilities in every important Congressional district, and what they have actually created is a massive jobs program and each Congressman has to become a representative for the defense contractor(s) in his district. Result: The US spends more on the military than every other country combined. Although war profiteering is publicly visible, there has been no public accounting. What a change from WW II when some of our most distinguished executives worked for a dollar a year. Republicans don't worry much about the public good.

Unlimited resources for the military ultimately flows to the politically well connected, while the massive debt falls on taxpayers. This fact is hidden in various ways but you will notice that the war in Iraq (like the war in Vietnam) was not on the books. Stiglitz estimates Iraq will cost in excess of three trillion dollars. That's another reason why social programs starve.

Blame the victim

Why the Right Attacked Unions, Acorn, and Planned Parenthood (3/3/2011)

It is a curious fact that while joblessness and homelessness has increased lately, the welfare rolls have declined. Republicans blame the victims: years ago,  welfare mothers were to blame, so welfare was 'reformed' so that they could go to work (the family values people don't worry that they left home to do it.) Now it's immigrants who are to blame.

These, like race, are divisive wedge issues, but they have worked well for Republicans in the past. 

Republicans consistently oppose measures to help people: as a result the US is hostile to union organizing, there is little or no provisions for old age insurance except for Social Security (and they tried to loot that also), healthcare is much more expensive than elsewhere in the world but it does not cover all of us and there is nothing to stop insurance companies from cherry-picking the healthiest and denying coverage for any one who might have a problem. Such a system is an oxymoron. But here's the bottom line: Republicans want to cut government...but that means any expense that might actually benefit people. Cutting government expense for them never means cuts for the military. Probably the best way to loot the public is to help prepare for war.  That's why Republicans tend to be warmongers. It helps if they can scare the public. (see media) As the neocons opined: A new Pearl Harbor would do it.

Dirty Tricks

There is too much of this to try to detail here. Google 'Republican Dirty Tricks' or try this link.

Exploit the Third World

The US does not do its agreed upon share of Foreign aid. It is a world class arms supplier though. If you look at it, you will see that it is building an empire. The press never questioned whether remaking the Middle East as Bush intended was consistent with the Constitution.

Because, up till now, the US has provided the world's reserve currency, it can tax the rest of the world without really asking.

Although colonialism is no longer practical, there are other more effective ways to achieve control in other countries. The IMF, the WTO, can implement structural adjustment programs that mandate the privatization of public facilities which allows multi national corporations free access. Investment capital can come and go freely, but labor cannot. If it becomes impossible to make a living, people then become migrants. Keeping poor countries in debt is better than colonialism for keeping them in political control. John Perkins writes in depth about this.

Bibliography

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