“Fighting” low pay by distributing crumbs

Two state-level legislative bills seeking to reign in bloated executive pay have the effect of applying a band-aid to a broken leg, but whatever their effect should they become law, perhaps they might stimulate debate. The Rhode Island state Senate is considering a law that would provide an incentive for companies to adopt a maximum wage and a bill in the California state Senate would introduce variable corporate tax rates based on pay ratios.

Although corporate interests are likely to be successful in defeating these bills (both of which are in early stages of the legislative process), they represent at best a tentative attempt to bring about a small reform. But symbols can sometimes be important, and the symbolic value of these bills is what is likely to be distressing to the one percent.

The Rhode Island bill, S. 2796, is under consideration by the state Senate’s Finance Committee, which has recommended it be “held for further study.” Here is the official commentary explaining the bill, which is sponsored by 14 of the state Senate’s 38 members:

“This act would establish a preference in the awarding of contracts for any person or business doing business with the state whose highest paid executive receives compensation and/or a salary equal to or less than thirty-two (32) times the compensation and/or salary paid to its lowest paid full-time employee. This act would take effect on July 1, 2014.”

It would not be mandatory for a contractor doing business with the Rhode Island state government to have this pay ratio; it would merely give such a company an advantage when bidding.

Newport, Rhode Island (photo by Šarūnas Burdulis)

Newport, Rhode Island (photo by Šarūnas Burdulis)

The California bill, S.B. 1372, would replace that state’s current 8.8 percent corporate tax rate with a sliding scale of seven to thirteen percent based on a company’s pay ratio. The highest rate would be paid by corporations in which the chief executive officer makes 400 or more times than the average worker. The bill would also raise by 50 percent the tax rate of any corporation that moves more than 10 percent of its workforce offshore in a given year.

This bill, which has two sponsors, will be difficult to pass due to a California law requiring a two-thirds majority of both houses of the state Legislature to enact a change to the tax code. It is currently in the state Senate’s Appropriations Committee.

Executive pay rises into the stratosphere

There certainly is reason to reign in executive pay. The ratio of chief executive pay to that of an average worker in the U.S. rose from 42-to-1 in 1960 to 531-to-1 in 2000, when stock options were being cashed in at the height of the stock market bubble. Growing inequality is also demonstrated by these changes from 1990 to 2005, as calculated in a study by the Institute for Policy Studies and United for a Fair Economy:

  • Chief executive officers’ pay increased 298 percent.
  • Production workers pay increased 4.3 percent.
  • The purchasing power of the federal minimum wage declined 9.3 percent, adjusted for inflation.

To bring these statistics further up to date, the U.S. labor federation AFL-CIO calculates that the chief executive-to-worker pay ratio was 331-to-1 in 2013, up from 50-to-1 in 1983 — a more than sixfold increase in three decades. The AFL-CIO also reports that in 2013 the companies comprising the S&P 500 stock-market index earned $41,249 in profits per employee. So, yes, they can afford to give employees a raise.

The standard argument given for bloated executive compensation is that the recipients “add shareholder value” — that is, they justifiably receive millions or tens of millions of dollars per year because their genius drives up the price of their companies’ stock, thereby creating wealth for stockholders. Although buying stock is, in theory, a bet on a company’s future earnings and therefore its price should rise and fall in concert with a corporation’s financial performance, bubbles fueled by speculation and larger macroeconomic conditions often account for how a stock does.

During the 1990s stock-market bubble, when valuations of publicly traded corporations were historically the most out of line in relation to actual profits, only unusually poorly managed corporations failed to have stock that significantly rose in price. More recently, the run-up in U.S. stock prices that has taken place over the past couple of years is a product of the Federal Reserve’s “quantitative easing” program, whereby it buys U.S. government debt and mortgage-backed securities in massive amounts. As of the end of December 2013, the Fed had spent a total of $3.7 trillion over five years on this program.

Therefore, it is no shock to discover that actual chief executive officer pay bears little or no relation to the financial results of their corporations. A 2013 report by the Institute for Policy Studies found that of the 241 chief executive officers who have been ranked among the 25 highest-paid U.S. chief executives at least once in the past 20 years, almost one-quarter of them headed corporations that either have ceased to exist or received taxpayer bailouts after the 2008 financial crash.

The Institute reports:

“[O]ur analysis reveals widespread poor performance within America’s elite CEO circles. Chief executives performing poorly — and blatantly so — have consistently populated the ranks of our nation’s top-paid CEOs over the last two decades. … In reality, [the] most highly paid executives over the past two decades have added remarkably little ‘value’ to anything except their own personal portfolios.”

And despite the one percent’s prevailing ideology that government only gets in their way, one of out eight of these highest-paid chief executive officers were among the biggest recipients of government contracts — a composite $255 billion in taxpayer-funded government largesse.

Hedge funders get billions for poor results

As the financial industry has swollen in relation to the rest of the economy, pay there is even more out of line with contribution. Speculation pays in fabulous ways: The 25 highest-paid hedge-fund managers of 2013 raked in a total of $21.15 billion. Yes, you read that correctly — almost $1 billion apiece in one year. Four hedge-fund managers made more than $2 billion each.

What magic do hedge funders perform that attracts such sums of money? Getting others to believe in their “magic,” it would seem. Bloomberg News reported that, as 2013 was drawing to a close, the composite gains of hedge funds for the year was 7.1 percent, as compared to the 29.1 percent gain of the S&P 500 stock index. In other words, they did worse than random chance. Nonetheless, hedge funds grabbed $50 billion in management fees for this below-average performance.

The Rhode Island legislative bill seeks to define a ratio of 32-to-1 as a “fair standard” for chief executive pay as compared to  employee pay. But isn’t that still an absurdly high ratio by any reasonable standard? By contemporary capitalist standards, such a proposal seems dramatic and has an uphill, at best, chance of passing. But if we were to design an economy that works for everybody, would you propose something anywhere near that lopsided?

Radical activists have been known to summarize the demands of liberals as “longer chains, bigger cages.” Here we have a classic case of that. If you start by asking for crumbs, at best you’ll get small crumbs. Given the immensity of problems the world faces, including declining living standards, surely we deserve much more.

When you are on top, ‘might makes right’ is ‘rule of law’

The Obama administration’s moralistic paeans to the “rule of law” concerning whistleblower Edward Snowden would carry considerably more weight if the United States weren’t continuing to harbor an assortment of ex-dictators and a terrorist who killed dozens in an airplane bombing. As soon as we look under the hood, we see “might makes right” at work, not “rule of law.”

If the U.S. government actually cares about the sanctity of international law, it could start by handing over Luis Posada Carriles, convicted of blowing up a Cuban airliner that killed 73 people, to the government of Venezuela. Not only has Mr. Posada has been living in Florida for many years, he has at times worked for the U.S. government since escaping from a Venezuelan jail. Shortly after escaping prison (allegedly thanks to bribes paid by members of the Miami Cuban exile community) he was hired to work on Oliver North’s illegal Nicaraguan Contra supply network, and is suspected of involvement in an attempt to assassinate Fidel Castro in 1994 and a string of tourist-hotel bombings in the Havana area in 1997.

Mr. Posada, who trained with the CIA in the 1960s, gave an interview to three major U.S. newspapers in 1997 in which he admitted to some of activities. Writing about this topic in 2002 in an article published in BigCityLit, I wrote:

“The Miami Herald, Los Angeles Times and New York Times reported Posada’s revelations, which detailed a series of bombings and other terror acts and connections with Cuban exile groups in Miami. Posada, then 70 years old, ‘revealed that key Cuban American lobbyists in this country financed his activities, in apparent violation of U.S. law, while the FBI and CIA looked the other way,’ according to a Los Angeles Times report.”

The National Security Archive, a project of George Washington University that publishes declassified U.S. government documents, provided further details in 2005:

“The National Security Archive today posted additional documents that show that the CIA had concrete advance intelligence, as early as June 1976, on plans by Cuban exile terrorist groups to bomb a Cubana airliner. The Archive also posted another document that shows that the FBI’s attaché in Caracas had multiple contacts with one of the Venezuelans who placed the bomb on the plane, and provided him with a visa to the U.S. five days before the bombing, despite suspicions that he was engaged in terrorist activities at the direction of Luis Posada Carriles. …

“[A] report from the State Department’s Bureau of Intelligence and Research on the bombing of Cubana flight 455 … noted that a CIA source had overheard Posada prior to the bombing in late September 1976 stating that, ‘We are going to hit a Cuban airliner.’ This information was apparently not passed to the CIA until after the plane went down. There is no indication in the declassified files that indicates that the CIA alerted Cuban government authorities to the terrorist threat against Cubana planes.”

They said he’s a terrorist, but gave him a pardon anyway

The Cuban and Venezuelan governments have long requested extradition of Mr. Posada, to no avail. Another Cuban exile leader, Orlando Bosch, was granted a pardon by President George H.W. Bush in 1990 and lived free in the U.S. for three decades until dying in 2011. Mr. Bosch was also suspected in the Cuban airline bombing and in a series of other terroristic acts. Duncan Campbell, writing in The Guardian, reported a decade ago on him:

“According to US justice department records: ‘the files of the FBI and other government agencies contain a large quantity of documentary information which reflects that, beginning in the early 1960s, Bosch held leadership positions in various anti-Castro terrorist organisations. … Bosch has personally advocated, encouraged, organised and participated in acts of terrorist violence in this country as well as various other countries.’ ”

Lest we be tempted to chalk the above up simply to the U.S. government’s bipartisan obsession with Cuba, we’ve only scratched the surface of U.S. hypocrisy over the “rule of law.” Bolivia, for example, has requested extradition of former president Gonzalo Sánchez de Lozada. At the time already responsible for the deaths of dozens of protestors, President Sánchez sent his security forces to put down a peaceful rally opposing the selling off of Bolivian gas reserves; 67 were killed and more than 400 injured. He later fled into exile and was formally charged in 2007 with genocide.

The Obama administration refuses to send him back. A report by Glenn Greenwald in The Guardian states:

“Bolivia then demanded his extradition from the US for him to stand trial. That demand, ironically, was made pursuant to an extradition treaty signed by Sánchez de Lozada himself with the US. … The view that Sánchez de Lozada must be extradited from the US to stand trial is a political consensus in Bolivia, shared by the government and the main opposition party alike. But on [September 7, 2011], the Bolivian government revealed that it had just been notified by the Obama administration that the US government has refused Bolivia’s extradition request.”

Then there is Warren Anderson, former chairman of Union Carbide, who is wanted in India in the wake of the explosion of his company’s Bhopal pesticide plant that killed thousands of people and injured tens of thousands. Indians courts have issued warrants for his arrest, which have been met with silence while he shuttles between houses on the U.S. East Coast.

It’s not only terrorists and corporate criminals who enjoy safe havens in the United States. Amnesty International, in a 2002 report, US is a ‘Safe Haven’ for Torturers Fleeing Justice, estimated that at least 150 torturers were living in the county then, none of whom was brought to justice. The number of torturers that the U.S. has trained, at its School of the Americas at Fort Benning, Georgia, is far higher. At the SOA (currently operating under the name of “Western Hemisphere Institute for Security Cooperation”) the U.S. Army trains Latin American military and police officers in torture techniques as part of its curriculum; the countries with the worst human rights records consistently send the most trainees.

If they don’t like terrorists, why do they train them?

The watchdog group School of Americas Watch, in an investigative report written by Bill Quigley, summarizes the work of the SOA:

“[G]raduates of the SOA have been implicated in many of the worst human rights atrocities in the Western Hemisphere, including the assassination of Catholic bishops, labor leaders, women and children, priests, nuns, and community workers and the massacres of entire communities. Numerous murders and human rights violations by SOA graduates have been documented in Bolivia, Chile, Colombia, El Salvador, Guatemala, Honduras, and Paraguay among others. These horrendous acts correspond to part of the school’s curriculum: systematic use of torture and executions to neutralize dissidents.” [page 2]

An article in The Washington Post, a newspaper (despite its long-ago Watergate reporting) that often acts as if it were an official publication of the U.S. government (and which has eagerly joined in the attacks on Edward Snowden), nonetheless reported straightforwardly on the use of torture manuals released by the Pentagon under pressure:

“U.S. Army intelligence manuals used to train Latin American military officers at an Army school from 1982 to 1991 advocated executions, torture, blackmail and other forms of coercion against insurgents, Pentagon documents released yesterday show. Used in courses at the U.S. Army’s School of the Americas, the manual says that to recruit and control informants, counterintelligence agents could use ‘fear, payment of bounties for enemy dead, beatings, false imprisonment, executions and the use of truth serum.’ ”

That was the summation of a newspaper that ordinarily rushes to defend U.S. foreign policy. The techniques it described were not a small part of the curriculum, nor an aberration, as the Post article implied in an attempt to soften the revelation. A former SOA instructor, Major Joseph Blair, told The Progressive:

“I sat next to Major Victor Thiess who created and taught the entire course, which included seven torture manuals and 382 hours of instruction. … He taught primarily using manuals which we used during the Vietnam War in our intelligence-gathering techniques. The techniques included murder, assassination, torture, extortion, false imprisonment. … Literally thousands of those manuals were passed out. … The officers who ran the intelligence courses used lesson plans that included the worst materials contained in the seven manuals. Now they say that there were only eighteen to twenty passages in those manuals in clear violation of U.S. law. In fact, those same passages were at the heart of the intelligence instruction.” [“School of the Americas Critic,” July 1997]

He killed 1,000 a month, but he’s ‘dedicated to democracy’

The SOA continues to operate. One of the graduates of the school is Efrain Ríos Montt, the most blood-thirsty of a series of brutal dictators who ruled through terror in Guatemala. Each of these dictators ruled with the full support of the U.S. following the CIA-organized overthrow of the democratically elected Jacobo Árbenz Guzmán at the behest of the United Fruit Company, which had previously been the country’s de facto ruler. The succession of dictatorships killed more than 200,000 Guatemalans. The régime of President Ríos Montt murdered more than 1,000 people a month during 1982, with Ríos Montt himself hailed by U.S. President Ronald Reagan as “totally dedicated to democracy” and unfairly the target of “a bum rap.”

Simultaneously, the Guatemalan military intensified its assaults on Indigenous communities. For example, SOA Watch reports, a Guatemalan special forces unit with extensive ties to the SOA, the Kaibiles, carried out this operation:

“[The unit] entered the village of Las Dos Erres, systematically raped the women, and killed 162 inhabitants, 67 of them children. Current President of Guatemala Otto Peréz Molina, also a graduate of the SOA, spent much of his time in military service as a member of the Kaibiles. This military unit was developed by the Guatemalan government in 1974, and its initial leader was a fellow SOA graduate.”

Among the techniques used by Guatemala’s dictators, according to the book Harvest of Empire: A History of Latinos in America by Juan Gonzalez, were dropping mutilated bodies from helicopters into crowded stadiums and cutting out the tongues of people who inquired about the “disappearances” of friends and family.

And let us not forget the loyal sidekick of the U.S., Great Britain, which seeks to extradite WikiLeaks founder Julian Assange to Sweden merely for questioning at the same time it refuses to extradite a convicted pedophile, Shawn Sullivan, to stand trial in Minnesota, claiming that the U.S. justice system has a civil commitment program for sex offenders that is too draconian. The Daily Kos reports that the suspect is charged with raping a 14 year old girl and sexually assaulting two 11 year old girls in 1994, but escaped to Ireland.

In no way is Edward Snowden, a whistleblower who has provided a service to humanity, comparable to the murderous rouges gallery described in this article, but the Obama administration might want to meet its obligations under international law before it further strong-arms other countries. But then “rule of law” in a world in which force maintains vast inequality is a euphemism for “rule of the most powerful.”

The intellectual dead end of liberalism

The vacuous concept of the “third way” having degenerated into neoliberal idolatry, modern liberalism has reached its end. Sweeping pronouncements are ordinarily to be avoided, but the revelations of not only the Obama administration’s extraordinary spying campaign but the Democratic Party marching in lockstep with Republicans to celebrate it ought to be the coup de grâce.

(I’m using North American terminology for today; readers in the rest of the world can substitute “social democratic” for “liberal.”) Some difference remains between Democrats and Republicans on social issues, but that gap is shrinking and exists at all only due to social activism. Without pressure from below, that difference might not amount to much, either. The difference arises from the extraordinary social extremism of U.S. conservatism, unique among the mainstream parties of the world’s advanced capitalist countries.

PentagonNorth American liberals and European social democrats have a long history of capitulation — we see the same patterns, whether it is Bill Clinton (and now Barack Obama) in the United States, Tony Blair in Britain, Gerhard Schröder in Germany, Jean Chrétien in Canada & etc. There is something much larger at work than President Obama’s lack of resolve. The sobering conclusion is that his world view is not so different from that of George W. Bush. Democrats have much in common with Republicans.

But, but, but — what about Washington’s notorious gridlock? The rewards of office are at stake and, just like professional athletes, professional politicians who make it to the top levels are highly competitive. They like to win, a rather human emotion, and with a distinct lack of seriousness in tackling any real issue — political, economic or environmental — winning is about the only thing that matters. Fight, team, fight!

The Obama administration’s record

Liberalism has ceased to possess ideas, however much individual liberals may yearn for alternatives. A partial list of Obama administration “achievements” makes for depressing reading:

  • Not simply keeping the Guantánamo Bay gulag open but force-feeding prisoners (torture by any realistic standard).
  • Stepping up the war against dissent through violent suppression of the Occupy movement organized by the Department of Homeland Security, waves of arrests and harassment of anarchists in the Pacific Northwest and harsh reprisals against government whistleblowers, among other offensives.
  • Widespread collection of telephone calls.
  • The gargantuan collection of personal information from online communications.
  • A president arrogating to himself the right to unilaterally kill people anywhere in the world, without a pretense of legal procedure.
  • A continual weakening of women’s fundamental rights to control their own bodies, often by making unilateral capitulations to Republican demands before negotiating.
  • A total failure to reign in “too big to fail” banks and a total failure to prosecute any financial industry executive for the chicanery that precipitated the financial collapse of 2008 and the ongoing stagnation.
  • Unquestioning acceptance of financial industry perspectives on economic matters.
  • Elevation of corporate maximization of profits above all other human considerations, embodied in a steady stream of one-sided trade agreements, the most dangerous one yet the Trans-Pacific Partnership being negotiated in secrecy, with only corporate executives privy to the text.

Let’s not pin this on the personality of one person. Each fresh outrage by the Obama administration is met by a shrug of the shoulders or outright support by Democrats. They are nearly unanimous in their approval of the National Security Agency. They are already united behind policies that exist, regardless of the ideology attached to them, to funnel ever more wealth upward. These two tendencies are not independent of one another.

There are various reasons that can be assigned as to the cause of the Democratic Party’s — and, thus, liberalism’s — steady march rightward: Dependence on corporate money, corruption, domination of the mass media by the Right, philosophical and economic myopia, cowardliness. Although these factors form a significant portion of the answer to the puzzle, an underlying cause has to be found in the exhaustion of North American liberalism. Similar to social democracy, it is trapped by a fervent desire to stabilize an unstable capitalist system.

The political and intellectual leaders of liberalism believe they can discover the magic reforms that will make it all work again. They do have criticisms, even if they are afraid of saying them too loud, but are hamstrung by their belief in the capitalist system, which means, today, a belief in neoliberalism and austerity, no matter what nice speeches they may make.

The Right, on the other hand, loudly advocates policies that are anathema to the working people who form the overwhelming majority but have the mass media, an array of institutions and the money to saturate society with their preferred policies. But, perhaps most importantly, they have something they believe in strongly — people who are animated by an ideal, however perverted, are motivated to push for it with all their energy.

In contrast, those who are conflicted between their belief in something and their acknowledgment that the something needs reform, and are unable to articulate a reform, won’t and can’t stand for anything concrete, and ultimately will capitulate. When that something can’t be fundamentally changed through reforms, what reforms are made are ultimately taken back, and society’s dominant ideas are of those who can promote the hardest line thanks to the power their wealth gives them, it is no surprise that the so-called reformers are unable to articulate any alternative. With no clear ideas to fall back on, they meekly bleat “me, too” when the world’s industrialists and financiers, acting through their corporations, think tanks and the “market,” pronounce their verdict on what is to be done.

Suppressing dissent is big business

And let us not be fooled by libertarian opposition to government spying; libertarians are among those most strongly rooted in the system. Although any opposition to the National Security Agency’s Stasi state is welcome, libertarians are motivated by an irrational hatred of government — they would rather have the market decide all social questions. But the market is merely the aggregate interests of the most powerful industrialists and financiers. Moreover, the market has already weighed in — security is big business, a high-profit sector worth hundreds of billions of dollars a year that exists solely as the result of government largesse.

City police departments are now equipped as armies; a web of federal agencies works closely with local law enforcement focused on squelching dissent; and seemingly bottomless sums of money are doled out to finance a network of spying agencies, a proliferation of cameras in public spaces and the militarization of police departments and investigatory agencies.

That is big business, indeed, as a quick summary demonstrates:

  • Lockheed Martin, a military contractor, earned US$2.7 billion on revenues of $47 billion. More than 80 percent of its revenue comes from the U.S. government, mostly from the Department of Defense.
  • Northrop Grumman, a military contractor, earned $2 billion on revenues of $25 billion. Most of its business is with the U.S. government, with much of the rest from various other governments.
  • Boeing, a producer of military aircraft and missile equipment, earned $3.9 billion on revenues of $81 billion. The U.S. government is a primary customer.
  • Booz Allen Hamilton earned $219 million on revenues of $5.8 billion. One-quarter of its revenue came from work for U.S. spying agencies and 98 percent of its revenues comes from work for the U.S. government. Booz Allen had employed whistleblower Edward Snowden.

U.S. government military spending for fiscal year 2014 is projected to account for more than $1.3 trillion, or 47 percent of the federal government’s budget, according to an analysis prepared by the War Resisters League. (The War Resisters calculation includes past military spending not counted toward the regular military budget by the government.)

A government is not an abstract entity; it is an expression of the social forces within a society. The U.S. government — the Obama administration, past administrations and the “permanent government” of the security apparatus and the various bureaucracies — is the enforcer for industrialists’ and financiers’ dominant institutions — corporations — and many of those corporations profit handsomely from the equipment, materiel and services they sell to the government that provides their muscle. This is bankrupt, whether the liberal or conservative version.

Seeing bias but supporting the architect of bias: We have a long way yet to go

Half a century has passed since Martin Luther King Jr. delivered his “I Have a Dream” speech in Washington, a passage of time symbolized by a Black man sworn in as president on a holiday celebrating Dr. King’s birthday. Yet it would be naïve to suggest that racism is now something in our past; that Dr. King’s hope that people would be judged by the content of their character rather than the color of their skin has become everyday reality.

Racism is so woven into the fabric of society that it is sadly comprehensible that two generations of civil rights struggle has not eradicated it. The contradictions that swirl around a subject that is still uncomfortable for most to discuss were captured in a New York Times survey published last week. The survey asked a series of questions related to the “stop and frisk” tactic used by the New York City Police Department in which police officers routinely stop young people on the street and search them in what is claimed to be an effort to catch potential criminals before they commit a crime.

In 2011, the last full year for which statistics are available, the New York Civil Liberties Association reports that New Yorkers were stopped and searched by the police 685,724 times. Of these stops, 88 percent were reported by the police as stops of people who were totally innocent. Only nine percent of these stops were of White people. Those numbers are typical for a program that has run for several years.

The Times survey found that:

  • 55 percent believe that New York City police favor Whites over Blacks, while 27 percent believe that both Whites and Blacks are treated fairly.
  • By almost identical margins, New Yorkers believe that police favor Whites over Hispanics.
  • 61 percent say they approve of Police Commissioner Raymond Kelly while 24 percent disapprove.

People of Color were more likely to observe bias and less likely to support the commissioner than Whites, but the general pattern was the same. That majorities could simultaneously acknowledge racial bias and support the police chief responsible for a practice that most exemplifies that bias demonstrates that regressive attitudes like racism retain a strong social hold. Virtually all of the more 1,000 people who participated in the Times survey surely would vehemently oppose a hooded Klansman and look upon the Jim Crow South with horror. And yet a majority have little trouble in voicing approval of systematic harassment, a routine of criminalizing young people simply for being Black or Hispanic.

Mistaken beliefs that stop-and-frisk are effective in suppressing crime account for much of the reason for those approvals. But it is far from only that. And the law-and-order angle is not untinged with stereotyping — I vividly remember watching an interview of a White producer of a typical police “reality show” who, when asked why his program showed Black people almost exclusively as perpetrators, unashamedly answered, “Because they are the ones who commit the crimes.”

Ah, yes, it’s always the “Other” who is responsible for social problems.

The power of divide-and-conquer

And here we get closer to the reasons for the persistence of racism. And also to the persistence of sexism, anti-Semitism, homophobia, national hatreds and other social ills. In any society that is based upon inequality — where an elite arrogates to itself a hugely disproportionate share of wealth and dominates the levers of power and opinion-making to maintain its elite status — strong social divisions work to maintain such inequity. Divide-and-conquer is an old technique.

Pre-capitalist societies were subject to scarcities; the precarious nature of agriculture and lack of modern medicine guaranteed that periodic famines would leave too little for everybody to survive. Lords needed a powerful ideology (and deadly force when necessary) to enforce their “rights” to take so much of what their peasants or serfs produced. Nowadays, the dizzying increase in productivity ensures that mass starvation is not a possibility, if you are fortunate enough to live in a developed country, however much inequality ensures that millions in those countries will go to bed hungry some of the time.

But whether it is the aristocracy and the church dominating peasants, with the church continually telling them that their subordinate position is dictated by God, or capitalists and their corporate mass media dominating working people, with the mass media and orthodox economists telling them that the world cannot be organized any other way, the same dynamics are at work. But any ideology has to be supplemented. And what better than divide-and-conquer?

Racism (and sexism and other backward ideologies) are artificial constructs. The origination of modern racism can be traced to seventeenth century colonial Virginia. The plantation-owning aristocracy feared that Black slaves, White indentured servants and those former servants who were nominally “free” would unite, putting an end to their rule. Instilling anti-Black racism in poor Whites was the solution to this threat, a process facilitated by the racism justifying massacres of Native Americans.

At first, White indentured servants and Black slaves were treated similarly by plantation owners on the North American mainland, excepting the significant fact that the servants had seven-year terms in contrast to the slaves’ lifetime sentences.* Servants’ sentences, however, were frequently extended. The Virginia of the seventeenth century had workhouses on the English model; children of poor parents could be removed and sent to workhouses, enabling those parents to be pressed back into the ranks of servants. Black slaves and White indentured servants socialized together, helped each other escape and joined in rebellions.

Racism began to be developed as an ideology to counter solidarity between Blacks and Whites and to counter poor White settlers who left the colonies to live among Indigenous peoples, whose non-hierarchical society was more appealing to thousands of them. To facilitate this process, freed servants were given small privileges not available to slaves to give them the illusion of having a stake in the aristocracy-dominated social order; Whites who rebelled were not punished as severely as Blacks; and poor Whites were forced to move inland due to the monopolization of coastal land by elites, thereby exacerbating tensions with Native Americans.

The genocide of Native Americans — ultimately reducing their populations by 95 percent — was of course well under way across the New World. The plantation-based economies there were dependent on slaves, and the European countries that were the earliest sites of the emerging capitalist system grew wealthy. More specifically, the emerging capitalist class grew wealthy and increasingly assertive in political matters.

Old World capitalists and New World slaves

European economies grew on the “triangular trade” in which European manufactured goods were shipped to the coast of western Africa in exchange for slaves, who were shipped to the Americas, which in turn sent sugar and other commodities back to Europe. (At this time, the Caribbean was far more important than mainland colonies, and conditions for slaves there was harsher; owners of Caribbean plantations often worked their slaves to death within a few years.) Profits from the slave trade and from colonial plantations were critical to bootstrapping the takeoff of British industry and modern capitalism in the second half of the eighteenth century into the early nineteenth century.

Walter Rodney, in his outstanding book How Europe Underdeveloped Africa, pointed out that it was necessary to rationalize the exploitation of African labor that was crucial to European accumulations of wealth. He wrote:

“Occasionally, it is mistakenly held that Europeans enslaved Africans for racist reasons. European planters and miners enslaved Africans for economic reasons, so that their labor power could be exploited. Indeed, it would have been impossible to open up the New World and to use it as a constant generator of wealth, had it not been for African labor. There were no other alternatives: the American (Indian) population was virtually wiped out and Europe’s population was too small for settlement overseas at that time.”**

This early buoying of capitalism can be obscured because slavery is a system best suited for accumulating agricultural surpluses; slavery’s association with plantations, however, can’t be disassociated from the use of plantation profits. Those surpluses provided investment capital for capitalist development despite slavery having been abolished within the internal British and other Western European capitalist systems.

Slave revolts and popular movements had much to do with abolishments of slavery, but the changing economic system was prominent as well. Slavery, as well as serfdom, is incompatible with industrial capitalism’s need for “flexible” workforces that can be hired or fired at will and for large numbers of consumers who can buy the capitalists’ products.

Slavery ended in the South, but subordination enforced with state-sanctioned terrorism did not until the civil rights movement a century later, when activists quite literally staked their lives on ending it. The wealth of the plantation owners and the desperate poverty of newly freed slaves were both transmitted to their respective descendants, locked in through terrorism. When the civil rights movement forced a dismantling of Southern apartheid, U.S. elites countered by saying, in effect: “Look! We’re all equal now! If you are not rich it’s your own fault.”

Imprisonment and a lack of jobs

This line of thinking, widely propagated, is a direct descendant of earlier, more crude ideologies. And from here it is a small step to justify mass incarceration and the racial bias exemplified by the U.S. prison system. More than 2.2 million people are imprisoned in the United States, a total and a rate that are the highest in the world. Black men are incarcerated at a rate almost seven times that of White men; two-thirds of all persons in prison for drug offenses are People of Color although Whites use drugs in similar amounts.

It is no longer unusual for police chiefs in large cities to be Black, and even the president and his attorney general are Black, yet the conveyor belt of repression continues to run smoothly. This is an institutional, structural problem that is untouched by the symbolism of a single leader.

In this neoliberal era, massive economic dislocations and poverty have made migrants of tens and hundreds of millions of people around the world, many of whom are small farmers forced off their lands due to cheap, often-subsidized agricultural products imported from the strongest capitalist countries. Corollary to dominant/subordinate pairings are immigrants, particularly those who become undocumented workers — another source of exploitable labor and a new means of fostering divisions when jobs are harder to find.

It so much easier to point at immigrants and blame them for depressing wages rather than examine the economic and social structure, at home and abroad, that puts mass immigration in motion and creates the conditions for the exploitation. Similarly, it is much more comforting to see oneself as a self-made success rather than someone who does work hard but nonetheless is a recipient of social privileges. In a country in which racism is so densely interwoven into the fabric of society, can any of us honestly say we are free of all prejudices?

The question, then, becomes one of a willingness to overcome social conditioning. Shaking one’s head sadly at racial bias in policing but supporting the police chief who intensifies that bias and voting for the politicians who appoint the chief is an unwillingness to critique the world you live in, and all the inequalities that have made today’s world what it is. A better world is not going to come into being by wishful thinking; it’ll only come about when we are not only willing to confront ourselves and our society, but to act.

* This and the following paragraph are based on Howard Zinn, A People’s History of the United States: 1492-present, pages 37-58 [HarperCollins, 1995]; Edmund Sears Morgan, American Slavery, American Freedom: The Ordeal of Colonial Virginia, page 297-299, 327-328 [W.W. Norton & Co., 1975]; and Chris Harman, A People’s History of the World, pages 252-254 [Bookmarks Publications, 1999]
** Walter Rodney, How Europe Underdeveloped Africa, page 88 [Howard University Press, 1982]

Solo geniuses who scorn the society that provides the shoulders they sit on

By Pete Dolack

The lone inventor is an archetype of long standing. The image remains, but, particularly in the United States, the image of the inventor has morphed from Thomas Edison and his cluttered laboratory to the hard-charging entrepreneur who single-handedly builds businesses.

The change in imagery mirrors the emphasis on wealth in U.S. popular culture, and the tendency to either defer to or scorn people based on perceptions of their wealth. Such imagery also serves as a particularly enticing carrot to dangle in front of those who aren’t millionaires, allowing them to entertain ideas that, if only they work hard enough, they too can accumulate fortunes.

Nobody creates a product, builds a company or makes a scientific discovery all on their own. There are engineers who design the product’s physical form, assembly-line workers who assemble the product and advertising agencies who create the demand for the product. For scientific discoveries, there are public investments in equipment or laboratory facilities, and scientific discoveries are often the basis for new products. For any of these, there are schools and universities, often paid for with public money, that provided the education that developed the skills of the creator or discoverer.

Then there is the social structure that enabled the millionaire to become wealthy through an invention or the creation of a popular product or through rising to the top of a large corporation or simply through being a popular entertainer or athlete. (We’ll set aside for now the fact that inheritance is the path most often trod to wealth.)

It appeared that the foundation of financial success was going to become a focus of the otherwise intellectually arid presidential campaign between Barack Obama and Mitt Romney. For one day last week (prior to the movie-theater massacre in Aurora, Colorado) the two campaigns traded barbs over a speech President Obama made the previous week in Roanoke, Virginia, in which he pointed out that business leaders often ignore the social capital behind their success. He said:

“There are a lot of wealthy, successful Americans who agree with me — because they want to give something back. They know they didn’t, look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something, there are a whole bunch of hard-working people out there.

“If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business, you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.

“The point is, is that when we succeed, we succeed because of our individual initiative but also because we do things together. There are some things, just like fighting fires, we don’t do on our own. I mean, imagine if everybody had their own fire service. That would be a hard way to organize fighting fires.”

There is nothing in the above quote that should strike any rational U.S. citizen as controversial. President Obama made the requisite genuflection to “American exceptionalism” — an ultra-nationalistic slogan used within the United States to portray the country as superior to all others in all categories, a vapid capitulation to xenophobia that is mandatory for any major office-holder. But in this specific context, “this unbelievable American system” is not out of place since the subject at hand is the ability to amass wealth. Having made the ritualistic genuflection, the president felt free to acknowledge that government investment is behind many a private fortune (or perhaps he accepts he has to do something to recapture the populist image he crafted in 2008 after spending most of first term thumbing his base in the eye).

Government research, after all, did create the Internet; President Obama did not mention that government research created the World Wide Web, perhaps because it was European, rather than U.S., money that created that. Private businesspeople simply found ways to get rich off what others invented. Thus we have the spectacle of Microsoft founder Bill Gates becoming for a time the richest person on Earth because his company aggressively wields its monopoly status in personal-computer operating systems while making inferior products at the same time the people who invented the Internet and its architecture earned no fortunes.

Mr. Gates’ billions enables him to be a prime mover behind the privatization of education and compels the corporate mass media to portray him as a genius whose every word is a golden pearl. The inventors of the Internet and its architecture — although it is their work in government laboratories that made possible the Silicon Valley moguls’ fortunes — are obscure. Indeed, we would have to do research to learn their names.

There are many examples of industries similarly booted up by government investment — among them, cellphones, GPS technology and medical equipment. That is a simple fact; it is only the pervasiveness of capitalist ideology that makes such a statement in any way controversial. The Obama administration bends over backwards to benefit business: Showering subsidies on them, giving bailouts with no strings attached, promoting their interests with “free trade” agreements with a variety of countries, and discarding most of his promises to ease the extreme tilt against employees in labor relations.

Indeed, one of the very first people President Obama picked to staff his administration was Lawrence Summers, one of the leading ideologues of neoliberalism. Mr. Summers has distinguished himself in various ways, including in imposing austerity on Russia and other countries from posts at the World Bank and the U.S. Treasury Department. He once infamously, while the World Bank’s chief economist, wrote in an internal memo that Africa was “vastly UNDER-polluted” (emphasis in original) and “I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.”

So said the person whom President Obama picked to be his lead economic adviser. During the 2008 campaign, the public’s exhaustion with George W. Bush and Dick Cheney and their administration’s unilateral foreign policy led to Barack Obama becoming the embodiment (realistically or not) of a widely desired change. At the same time, the disapproval of a significant number of capitalists over the narrowness of the Bush II/Cheney administration in promoting the interests of a handful of industries (in particular energy) instead of pursuing more general business interests and a desire for a White House that would be less quick to alienate allied countries led to an unusual split among elites who normally overwhelmingly prefer Republicans.

The interests of powerful capitalists and the interests of the rest of the country are far from aligned, and it should come as no surprise that the interests of capitalist elites are dominant in the Obama administration. The capitalist elites who backed him desired a calm, steady hand at the helm of empire, and that is what they have received: Military interventions are coordinated with allied capitalist countries, the fig leafs of United Nations resolutions are obtained, Nato allies are treated as partners (albeit junior partners) and not as flunkies to be ordered about; a soothing public demeanor to mask harsh policies; and conducting the arm-twisting of foreign governments behind closed doors. Those elites are dependent on selling their products in stable foreign markets.

It is precisely the concept of “American exceptionalism” that provides a crucial ideological underpinning for unending interference in the affairs of other countries. All presidents have to carry out the duties of the belief in “American exceptionalism” and could do not do so without a firm personal belief in it themselves. A president or any other high government official can (and does) convince themselves of their duty to act on the “exceptionalism” but all that is exceptional is that it happens to be the United States that is the center of the capitalist system and possesses the military muscle to maintain it.

The “duty” carried out in the name of this “exceptionalism” is a “duty” to assert the interests of multi-national corporations. That the country voted by a solid majority to put an end to wars and corporate domination was of no consequence.

Having low expectations for the president, I did not expect “change,” although the extent of the willingness of the Obama administration to give almost nothing to its base is a surprise. For some time, it is has been apparent that the main theme of the re-election campaign would be “You have to vote for us, the Republicans are even worse.” But it is useless to see this in terms of “selling out” or “ineptitude” or “softness.” The Obama administration is simply reflecting the dominant sources of power within the U.S., and that is not going to change without a countervailing mass movement.

Governments around the world are at the mercy of the largest capitalists within the advanced capitalist countries; interests that are distilled into the pressures applied by financial markets. A country at the center of the world capitalist system, the United States, experiences such pressures primarily from its domestic capitalists, although those capitalists’ business interests are intimately tied with peer capitalists around the world in today’s global economy. Most countries experience market pressures as external forces.

As an example, let us briefly examine South Africa in its first years after the apartheid system was overthrown in a negotiated process forced by a massive international popular movement backing the African National Congress. During the long years of struggle by the ANC and pitiless repression by the National Party, the apartheid-era rulers in South Africa, the guiding document of the ANC was its “Freedom Charter.”* The charter, adopted after democratic consultations in 1955, calls for the right to work; to decent housing; freedom of thought; and nationalization of mines, banks and “monopoly industry” and land distribution so that all South Africans can share in the wealth of their country.

Although the ANC had the moral authority to carry out its program, its negotiators tragically (and unwittingly) gave up all economic control, forfeiting their ability to carry out any aspect of their program, with the result that, two decades later, the economy is firmly in the hands of its numerically minuscule White business elite (which is tied to international markets) and South Africa remains among the world’s most unequal countries. The country’s eyes were on the political talks between Nelson Mandela and F.W. de Klerk, in which the ANC decisively was the victor against the National Party’s attempts to dilute its loss of government control.

But in the parallel economic talks, which drew little attention, the ANC gave everything away. The central bank would be independent of government (as financiers demanded), National Party government finance officials would remain in office and the ANC government would sign on to everything demanded by the World Bank, the International Monetary Fund and all international trade agreements. Having done so, the ANC took office handcuffed, and having tied themselves to financial markets, those markets applied further discipline by attacking the South African economy at the first sign of anything that displeased them. From pleasing markets and giving financiers repeated assurances, it proved a short path to President Mandela’s successor, Thabo Mbeki, imposing austerity — a 180-degree turn from the Freedom Charter.

The mythology that markets know best is intimately linked with the mythology that the economy should be entrusted to financial elites and those elites’ intellectual servants, neoclassical economists. The mythology of the solo genius justifies massive inequality because the “solo genius” single-handedly created a popular product and thus single-handedly brought prosperity upon the land. For such selfless services, the solo genius must be compensated with fantastic wealth.

The “magic of the market” takes care of the compensation. For a young, growing company, the preferred route is the initial public offering. The IPO does indeed shower riches upon the founder, a small circle of his or her insiders, and the investment banks who take care of the details. If that money comes out of the wallets of everyday investors, well that’s the market for you. This system reached near-perfection in the Facebook IPO earlier this year. The key to an IPO is to price the stock high enough so that the money largely accrues to the insiders (who possess most of the stock through pre-IPO awards) but not so high that the stock price plummets afterward (making the scam too obvious) nor so low that a significant post-IPO stock-price rise means that some money was lost to investors.

Thus Facebook chief executive Mark Zuckerberg wound up with $18 billion, Facebook’s investment bankers and insiders received substantial windfalls and all those who bought in after the opening bell are out of luck. The stock price never has returned to its opening-day level. Oh well, a “long-term hold” as they say in financial-analyst circles.

Facebook’s current popularity is undeniable, but what of value did Mr. Zuckerberg create? Perhaps Facebook will be an exception, but Internet sites tend to be cyclical fads. What was once popular can rapidly become passé. Does he, or anyone, really deserve $18 billion for a few years of work? Did he work tens of thousands of times harder than the average employee of a U.S. company? Remember, what he, and other Internet moguls, created was built on the creation of people who didn’t get rich or famous, and who created it through public investment — that is, in a government facility.

It would seem that the carrot of a multibillion-dollar payoff is not necessary for technical progress. People invent, people create works of art, people write, people aspire every day without outlandish renumeration. Often without it at all. Inventions are made routinely in government laboratories, in university laboratories and in corporate laboratories — and in each of these, it is the government, university or corporation and not the inventor who owns the rights to the invention. Many others toil on their own to create an invention, with only slim chances of making a fortune out of it. Some of these people undoubtedly are motivated by the potential for enrichment, but the overwhelmingly majority will never see it — either they will fail, or their success will lead to little or no money.

Why should one person amass $18 billion and so many other get nothing? Why should a lucky handful of people amass billions of dollars and then get to claim they did it all on their own with no help at all? President Obama’s reference to “this unbelievable American system” is true here in the sense that a few people are able to amass fantastic riches. But it is glaring inequality that enables the accumulation, and the accumulation comes on the backs of employees. Without a system that does not simply tolerate, but celebrates and causes, massive inequality, the superrich whom Governor Romney is so fast to promote as solo geniuses who had no help (no surprise as this is the myth he spins for himself) would not be the superrich.

Without the infrastructure that government provides in the form of educational institutions, a court system that adjudicates commercial disputes, means of coercion such as police and the military to suppress dissent at home and abroad, an ever larger basket of subsidies, “free trade” agreements that promote corporate interests above human rights, and a transportation infrastructure such as expressways that are mostly free, billionaires would not be able to become billionaires. And yet they continually whine that “government” is in the way.

In a better world, government would be the product of public demand and benefit. Instead, it is the reflection of the arrayed social forces within a given society — in an advanced capitalist country, that is its most powerful industrialists and financiers. The constant chatter of government “getting in the way” of business interests and of entrepreneurial geniuses single-handedly creating wealth should be laughed at for the joke those mythologies are.

* This and the next two paragraphs based in part on Naomi Klein, The Shock Doctrine: The Rise of Disaster Capitalism, pages 194-217 [Metropolitan Books, 2007]

Attacks on critical thinking vs. cheers for scapegoating

By Pete Dolack

On the surface, it seems a mystery. Occupy Wall Street protestors organized peaceful protests, concentrated their critiques on the financial institutions responsible for the worst economic downturn in eight decades and consciously used inclusive language to unite people. Yet Occupy was subjected to brutal police assaults as part of a coordinated government campaign against it, and has increasingly faced volleys of disapproval in the mass media.

By contrast, “Tea Party” protestors routinely used threatening language, brought weapons not only to their own demonstrations but to public talks of government office holders, attacked government institutions in denunciatory language and sought to divide people through scapegoating. Yet the Tea Party was lovingly embraced by the mass media and allowed to operate unimpeded by law enforcement and other institutions.

These contrasting responses were not monolithic, and we can all cite exceptions. Nonetheless, there is no mistaking the general tenor of the responses. On the surface this may appear to be a mystery, but it is not at all mysterious once we examine a little closer.

Occupy was and is a genuine grassroots movement, and the hundreds of Occupies that spontaneously followed the example of Occupy Wall Street demonstrated that a large pool of discontent and anger about the corporate domination of the United States exists. That discontent may sometimes be unfocused — leading to a sometimes confusing plethora of messages at Occupy encampments and demonstrations — but it is very real, based on the reality of the lives of working people (including students). And it is precisely this bottom-up self-organization that engendered the wrath of the establishment.

The Tea Party seeks to deflect anger from corporate elites consumed by greed and arrogance who bend the country’s institutions to their benefit, and instead pin the blame on “the government,” on minorities, on immigrants and any other handy scapegoat. This movement, although calculated to tap into genuine grassroots anger, was manufactured and materially supported by corporate benefactors. And this is the key to understanding the warm embrace given it.

Both movements result from a pervasive feeling of anxiety over an economic crisis now measured in years with no end in sight; both movements are fueled by people who know that “something is wrong” and seek answers as to why the present is bleak, why the future appears bleak and what can be done to change the stagnation or downward trend of the economy and all the social problems that piggyback on economic distress. Anxiety is not only due to worries about today or fears of tomorrow in times of uncertainty and instability; anxiety also flows from a lack of understanding. Why has the economy turned so sour, why is the malaise so persistent, why is this happening to me even though I went to work every day and studied hard in school?

We naturally wish to find the answers to these questions. One way to seek answers is to channel anxiety, anger, fear and frustration into study: Read, watch, listen, observe and discuss, until a picture begins to emerge. Modern economics and society is complex and globalization only hastens further complexity. But these are human constructions, and so most humans can understand them. It is only when we understand what had seemed to work but no longer does that we can begin to construct ideas and plans to improve our lives and give ourselves stability.

Another way to seek answers is to channel anxiety, anger, fear and frustration into emotional release: Designate scapegoats from groups that are either unpopular or are vulnerable. Those scapegoats can be immigrants, they can be racial, ethnic or religious minorities, they can be women. Or the scapegoat can be “the government,” reduced to an abstract entity that somehow hovers above society as an alien force. Scapegoats have in common that they represent an “Other,” somebody or something outside or different, and thus liable to be portrayed as an impurity “polluting” society.

Scapegoating is seductive because it taps into emotion. Very real emotion, for the anxiety, anger, fear and frustration felt by Tea Partiers, Occupiers, sympathizers of one or the other and people who do not identify with either movement is based on the concrete realities of their lives. A belief that tomorrow will be better than today, that our children will live more comfortably than their parents is woven deeply into the fabric of advanced capitalist countries, and perhaps that sense of optimism has been nowhere stronger than in the United States, where such beliefs are inseparable from the expansionism, dynamism and geographical diversity that are foundations of its traditional ethos.

When long-held beliefs crumble, answers are naturally sought. Easy answers tap into emotion. Emotions are real, genuine and should be taken seriously. We share many emotions; we share a desire to understand. A cliché that is often repeated because it is true despite being a cliché is the statement that a lie can travel halfway around the world before the truth can finish lacing up its boots. A parallel can, and should, be drawn: Emotions take root much faster than the concrete. In no way is that meant to suggest that emotions are “lies” — emotions, again, are very real. In our personal lives, we become upset, but we talk and analyze, and although we may still be upset, we come to understand and thus are much better equipped to do something to change the situation that made us upset.

Zooming out from the personal to the societal, we can see similarities. But, since we are back to discussing large, impersonal social forces and institutions, what if the controllers of those institutions want to deflect attention and avoid blame for their actions? Tapping into emotions is a sure way of achieving those results, and if those institutions are very wealthy and very powerful, they can create entire movements (and new institutions) to suit their purposes.

The Tea Party is a prominent example. Tea Partiers wanted answers as to why the foundations around them are crumbling. Just as the Wizard of Oz wanted Dorothy to look elsewhere, Tea Party organizers point in another direction and yell, “It’s them, over there.” And who are the organizers of the Tea Party? By that question, I mean the originators and, in particular, the funders of the Tea Parties, not the people who became involved and assumed leadership roles in their local communities. We can readily see that some of the most active members of Corporate America are the organizers.

At the very top of the list are three entities: the Americans for Prosperity Foundation, FreedomWorks and Fox News. FreedomWorks is a group of corporate lobbyists run by Dick Armey (a hard-line Republican Party operative who once was majority leader in the U.S. House of Representatives) that was the primary organizer of the early Tea Party protests. Americans for Prosperity is a lavishly funded and tightly controlled pressure group founded by David and Charles Koch dedicated to promoting the Koch brothers’ business interests and extremist political philosophies. Fox News is one of the most notorious pieces of Rupert Murdoch’s media empire, an empire dedicated to promoting Murdoch’s business interests and extremist political philosophies.

Other corporate interests have made their contributions, but without these three groups there would be no Tea Party. Americans for Prosperity is a crucial funder of FreedomWorks, and both organizations are behind a series of initiatives to deny the reality of global warming, attack any and all regulation of business and promote libertarian political ideas, such as eliminating Social Security. Fox News is an active promoter of these agendas. Together, bottomless sums of money, corporate muscle, the ability to control a myriad of institutions and the power to have their agenda adopted by the corporate mass media was leveraged to coordinate and tap into the anger felt by millions of people, creating the corporate-inspired Tea Party.

As many other corporate elites similarly backed these agendas, they were undoubtedly happy to free-ride on the money and influence wielded by Americans for Prosperity, FreedomWorks and Fox News, the three of which provided the Tea Party with organizers, money, material support and publicity. Within any group, there will always be those who are the most active; the Koch Brothers, who fund a network of institutions to do their bidding, are among them in the ranks of big capitalists. Such people have the immense wealth and all the power that goes with that wealth to have their viewpoints and messages suffused throughout a society through continual repetition via a spectrum of outlets.

A critical component of those messages must be a deflection of blame. Government is a handy scapegoat, and an easy one because very few of us has not had at least one frustrating experience with a bureaucracy. Government has to be portrayed as an alien force disembodied from society, demonized for “interfering” in the lives of people. But government is not an abstract entity, it is a reflection of the social forces inherent within a society; its actions and policies will most often harmonize with the most powerful.

No objective analysis of government can deny that corporations reap enormous benefits from government — through contracts in an ever increasing variety of industries, the passing of laws in legislatures that not only benefit them but are frequently written by their lobbyists, the building and maintenance of transportation and other public infrastructure, the public assumption of the costs of business such as pollution mitigation, and an ever widening collection of subsidies.

If government is part of the problem, than it is because it has become dominated by corporate elites. Corporate elites reap the benefits of inequality and want to keep it that way, or widen the inequality. It is corporate elites who benefit from moving factories to new countries, from mass layoffs and a system that funnels enormous sums of money upward. It is a big job to obscure these obvious facts. And only corporate elites have the money to fund such a campaign so they can continue to reap personal rewards from this system’s continuation.

Given the web of domination by corporate elites, it then becomes no surprise that their creation, the Tea Party, is lavished with affection while the Occupy movement that challenges them and fosters independent thinking is attacked. Today is the national holiday in the United States in which the country celebrates its founding and its defining themes of “freedom” and “liberty.” But, as always, we should ask: Freedom for who? Freedom for what?

Wisconsin’s recall election proves no substitute for a social movement

By Pete Dolack

Walking home on election night in 2008, my partner and I waded into a street celebration. Young people, primarily, had taken over an entire block to joyously celebrate Barack Obama’s trouncing of John McCain. Veteran activists that we are, we talked to many of the celebrants, cautioning them that the work of progressive change had only begun: If there is no strong pressure from President Obama’s supporters, he would be taken off the hook and feel himself free to not do what he said he would do.

Neither of us believed the president-elect would follow through on most of his campaign platform, and the fact that the strong anti-war movement that mushroomed during the Bush II administration had been silenced by United for Peace and Justice’s deft channeling of it into the John Kerry presidential campaign and its unwillingness to work with any coalitions to its Left should not have been far from activist minds. The hopes of Obama voters for an end to wars waged for imperialist plunder and for meaningful “change” soon met the traditional graveyard of U.S. social movements, the Democratic Party.

And so it was in Wisconsin last week. Yet again, an energetic, grassroots movement, motivated by a sense of urgency, was diluted, rendered “respectable” and converted by political and union leaders into an election campaign. And thereby lost their biggest battle. Are they to lose the war, too?

Before we tackle that question, let’s analyze the battle. Given the legitimate questioning of electronic voting machines that do not print records that can confirm the results, it is understandable that some question who really won the Wisconsin recall vote. But it is necessary to point out that the 53 to 47 percent victory of Scott Walker over Tom Barrett, although wider than expected, does fall within the margin of error of the many polls that consistently had Walker ahead. We should accept the result as legitimate, and analyze seriously a bitter defeat for all working people.

Union leaders’ fear of Madison’s energetic resistance

One of the groups critical to the uprising in Madison, the Wisconsin state capital, were graduate students organized into the Teachers Assistants’ Association. The TAA is centered on the University of Wisconsin’s main campus, located blocks from the Wisconsin capitol building. Already anticipating cuts to the university system, the TAA had begun mobilizing for a February 2011 protest. When details of Governor Walker’s draconian program of deep cuts to education and social programs coupled with union-busting measures became known, the sense of urgency increased.

Mike Ludwig, writing in Truthout, has described the birth of a movement that quickly had the world’s eyes on it:

“A public hearing on the legislation was scheduled the next day and the TAA organized a massive turnout. At such hearings, each member of the public is given up to two minutes to speak, and thanks to the tireless TAA and allied groups, a continuous stream of testimonies prevented the bill from going up to a vote. It was the birth of an occupation that would take over the Capitol and stall Walker’s union-busting bill for more than three weeks.”

Teaching assistants and teachers came to that first legislative hearing prepared to stay overnight. An early attempt to evict the Capitol occupiers backfired, solidifying their public support. Demonstrations in numbers that sometimes exceeded 100,000 outside the capitol building were regular occurrences. Support for the capitol occupiers was exemplified in a continual stream of well-wishers from outside Madison phoning in pizza orders to be delivered to the occupiers. Crowds lined the streets of Madison when a procession of farmers riding tractors drove down one of the city’s main streets to the capitol. African-American and Hispanic high school students from Wisconsin’s biggest city, Milwaukee, and people from small towns across the state were on board.

Sadly — but not surprisingly — union leaders saw this inspiring solidarity as a threat to be contained.

Talk of a general strike was in the air — something that has not happened in the United States since the 1930s. Although some organizers believed that there was too little infrastructure in place for a general strike to be realistic at the time, there were other steps that could have been taken to ratchet up the pressure on Governor Walker and his Big Business funders.

Matthew Rothschild of the Madison-based monthly magazine The Progressive, who participated in many of these events, said the co-optation of the movement began early:

“Actually, it began to disintegrate the moment the leaders (and who were they, exactly?) decided to pour everything into the Democratic Party channels rather than explore the full potential of the power that was latent but present in the streets back in February and March of 2011. … Procedurally, decisions were made (again, who made them?) in a very undemocratic way. Here we had 100,000 people storming the square but there was no effort to include them in any meaningful — or even symbolic — decision-making process. … We gathered at noon every day, we gathered every night, and we massed on the weekends, but then the decision was made (by whom?) to stop marching and essentially to go back to our home districts and throw all our energies into recalling state senators. I remember being at a protest and being told to do so from the podium.”

Local activist Allen Ruff, quoted in a Truthout analysis written by Arun Gupta and Steve Horn, confirmed that state-level Democrats actively demobilized the movement:

“One got up in the middle of the [capitol building’s] Rotunda when there were a few thousand people present and asked them to walk out to show we are willing to compromise and around 1,200 people left the Capitol with him. At the last big rally in March, with more than 200,000 people present, Democratic [state] Senator Jon Erpenbach, said ‘I don’t want to see you people back here. Go back to your home communities and work on the recall.’ ”

Briefly, the intensity of the movement had driven Wisconsin Democrats to take their lead from the masses of people in the streets; the party’s state senators fled the state in an ultimately failed attempt to block a vote on Governor Walker’s bills. But soon enough, Democratic Party and union leaders asserted leadership, and steered the movement’s energy into the usual directions. People deferred to those party and union leaders, who were afraid of the power of people on display, afraid of a movement that had blossomed out of their control and afraid that they would not look “respectable” in the eyes of establishment power brokers and the corporate mass media. Union leaders, once again, mobilized their memberships to elect Democrats without asking for anything ahead of time.

That channeling involved not only tactics, but message. The early message of linking fightbacks against the entire panoply of neoliberal attacks became narrowed into messages tailored to appear “safe” to Wisconsin’s suburban middle class.

Bruce A. Dixon, writing for the Black Agenda Report, wrote:

“When would-be movements sideline the youthful risk-taking initiative and egalitarian core values that might have sustained them to become political campaigns, they generally don’t even run good campaigns. The crowds on the sidewalks and parking lots in Madison were conducting anti-racism seminars and study groups. But the electoral campaign the whole thing was turned into, even though they had a whole year to plan, neglected to do the labor-intensive ground game of massive voter registration in poor and minority communities. They spent their relatively scarce dollars on media instead, and pursued the easy consultant-class strategy of pursuing the “frequent voters” alone. They didn’t talk about the poor and renters, of which there are many in Milwaukee. They only talked about the middle class. They didn’t talk much about mass incarceration either, even though Wisconsin and Milwaukee consistently have the highest rates of Black imprisonment in the U.S. … They came up with a black candidate for lieutenant governor. But mostly they went from hundreds of thousands of people shivering in the cold, standing outside the people-proof, democracy-proof cages of elite consensus and two-party politics and beginning to feel their own power to decide what to do next to folks campaigning for the candidate and the slate that sucked less.”

The slate that “sucked less” and its union backers may have been eager to “compromise,” but the billionaire funders opposed to them were not.

A money deficit, yes, but an uninspired recall campaign

As a matter of strategy, organizers of the signature-gathering campaign to get the recall vote on to the ballot intentionally avoided naming a candidate. Brendan Fischer, writing in AlterNet a month before the election, reported:

“Their strategy was to make it clear that signing a petition was a choice to recall the governor, rather than a vote in favor of any particular challenger. But that move left Walker opponents without a candidate when signatures were handed in on January 16.”

That decision gave Governor Walker a huge head start. The unions’ preferred candidate lost in a primary to Milwaukee Mayor Tom Barrett, whom the governor defeated in 2010. By the time Mayor Barrett began raising money, Governor Walker had already spent 20 million dollars, according to Mr. Fischer. The challenger had only a month to make his case, but although the recall election inevitably was based on the personality of the governor, Mayor Barrett had not only already been defeated a year and a half earlier, he stood for “austerity lite” instead of providing a clean alternative.

During his 2010 gubernatorial campaign, the centerpiece of Mayor Barrett’s campaign was a 67-page document called “Put Madison on a Diet.” He advocated layoffs, cuts to benefits and cuts to wages as the main routes to trimming more than one billion dollars in state spending per year. This time around, he avoided drawing attention to such plans, but also avoided saying anything of substance. In a June 2, 2012, commentary published in the Milwaukee Journal-Sentinel, he offered platitudes but no concrete programs. Instead he offered a general critique of Governor Walker and issued bland declarations such as “My priority is Wisconsin.” Had somebody though his priority Saskatchewan?

He did, however, offer a hint of his previous program in a debate when he said, “The real test of leadership is whether you can say no to your friends.” That, perhaps, was less than inspiring to those whom he needed to get to the voting booth.

Whatever else can be said of the Republican Party, it does not boast of “standing up” against its base. But nor does the Democratic Party wish to offend its corporate benefactors, without whom it could not survive. We square the circle here: Mass movements are the only possible alternative to corporate power and money (especially as that money and power holds a tight grip on both major parties), but such movements are precisely what Democrats fear most. Union leaderships have become so removed from their rank-and-file members and so entangled with party politics that they are unable to critique the dead end of giving support to Democrats with no demands, hoping that some crumbs will fall their way.

When you guarantee unconditional support, when you keep your mouth shut when you are forgotten after the election, when you desperately suppress any independent mass movement, when you are so comfortable in your bubble that you can’t conceive of doing anything different, when you are unable to differentiate between a crumb and a loaf, you will lose. And you will keep losing.

Union households who voted for attacks on themselves

An analysis of the recall vote is not complete without examining the eyebrow-raising exit-poll finding that 38 percent of union-household members voted for Governor Walker. In 2010, he earned 37 percent of that vote — no substantial change.

More than one-third endorsed a direct assault on their ability to maintain their standard of living. How do we account for that?

In part, answering that question is partly dependent on knowing the breakdown of those voters between public-sector and private-sector union households, a breakdown that does not appear in the results of the exit poll conducted by Edison Research. Governor Walker generally directed his anti-union rhetoric at government workers, although the fierce attack on public-sector unions are an opening gambit — corporate antipathy toward unions does not differentiate. Such attacks are the tip of a well-honed spear aimed at breaking down solidarity among working people.

Capitalist ideology furiously promotes individuality in an effort to atomize society and to justify extraordinary disparities in wealth. We are constantly bombarded with messages that declare you, too, could be rich if only you worked as hard as the chief executive officer does. Many CEOs undoubtedly work hard, but 340 times harder than the average worker? The reality is that only a handful can be rich, because being rich means accumulating money and capital through paying employees much less than the value of what they produce. Therefore, most people are going to struggle economically. How can that be if you work hard every day?

Scapegoats are provided as the answer — not that the is system stacked against you and always will be, nor is the answer that the capitalism system is undergoing a serious structural crisis that is the logical outcome of its highly competitive nature and need for ever more accumulation. A favorite scapegoat are always a society’s minorities or immigrants, and when that line loses effectiveness, the scapegoat becomes public-sector workers. Thus we have the sad spectacle of the current Big Business-led war on teachers, waged across the United States. Government workers in general are demonized as lazy and the recipients of unwarranted largesse.

Another critical strand of capitalist ideology is to foster jealousy. This is a crucial piece of ideological campaigns, in part to create atomization of society (crucial to blocking ideas of solidarity and common economic interests from taking root) but also to facilitate the scapegoating. Carefully targeted, the jealousy is never against the executive or speculator who makes millions of dollars off other people’s hard work, but rather the jealousy is carefully fanned against other working people who have something somebody else does not.

Because government workers — and unions — were the designated scapegoats, their pensions became easy targets. Republican Party operatives went to rural counties and made sure to play up the fact that most people no longer have pensions, while government workers do. Mike McCabe, the executive director of the watchdog group Wisconsin Democracy Campaign, argues that Wisconsin Republicans have forged a “rich-poor alliance” of suburban and rural areas:

“Republicans ask people in places like [rural] Clark County if they have pensions, and the answer is invariably no. ‘Well, you are paying for theirs,’ they tell them. ‘Do you have health insurance? No. Well, you are paying for theirs. Are you getting pay raises? No. Well, you are paying for theirs.’ For years now Democrats have not plausibly made the case that they will deliver better health or retirement security or higher pay to all. Only the state’s few government workers have so benefited from the Democrats’ toil.”

Exit polling seems to back up these claims. Residents of cities with at least 50,000 people voted by a close to 2-to-1 margin in favor of Mayor Barrett, but all other areas voted by wide margins for Governor Walker.

Notice, however, how the question is framed by conservatives: “Why does someone have something you don’t have” (a pension), instead of “Why do you not have something that you should be entitled to but don’t have.” Once the question is framed that way, and anti-government rhetoric is wrapped around it, then it is a short path to making pensions indistinguishable from excessive government spending.

An analysis in the Wisconsin State Journal newspaper contained a noteworthy quotation from the district attorney and Republican Party chairman (the same person holds both posts) of another rural county, Green County. This official had his district-attorney pay cut but, considering his other post, not surprisingly backed Governor Walker. “I was also able to see the other side of the equation. Taxpayers, businesspeople and retired citizens had just as strong feelings about the necessity to control state spending and require state employees to ‘pay their fair share,’ ” the official said.

Once again: Why do those people have something I don’t when I work hard? Nor can such sentiments simply be waved off by virtue of party — one-sixth of Governor Walker’s voters intend to vote for President Obama, according to the exit poll.

Capitalist ideology permeates every every institution. Not simply the corporate mass media, but churches, schools, think tanks, militaries and a host of others incessantly carry similar messages: We “deserve” what we get. The generally unspoken but nonetheless inferred coda to that message is that if what we “deserve”  is not as much as we need in a time of scarcity and cutbacks, then then someone else must not be deserving, either, so we should take away from them. Take it away from them, not have it for ourselves and our neighbors, too.

If you’ve heard this before, you are not hallucinating

There is nothing unique about Wisconsin. Or about the United States. Government workers are the brunt of attacks in Greece. If it is true (I don’t know myself) that the Greek government is over-staffed, government workers there nonetheless have to pay their taxes because their employer certainly isn’t going to fail to collect them, while it is Greek corporations, the wealthy and even some middle class private-sector workers who don’t pay taxes, a significant factor in Greece’s financial crisis.

Voters in two California cities, San Diego and San Jose, one a conservative military town and the other a liberal Silicon Valley town, voted last week by 2-to-1 margins to cut the pensions of public workers despite the fact that those pensions are subject to collective bargaining. In New York, there has been the odd revelation that leaders of a group of construction-worker unions donated half a million dollars to the “Committee to Save New York.” That is odd, because the committee has been bankrolled by millions of dollars by corporate donors and is the leading ally of Governor Andrew Cuomo’s drive to impose layoffs, pay cuts and pension reductions on government workers. That drive continues despite the government workers already agreeing to cuts.

The capitalists pushing the anti-union agenda must be delighted to have unions of private-sector workers joining their attacks on public-sector workers. Talk about short-sighted: Private-sector unions will become targets if public-sector unions are disabled, and construction unions are already routinely scapegoated as responsible for high construction costs. Never mind that real estate is a fantastically profitable business for developers and landlords in and around New York City, where most of the population of New York state resides. Non-union labor has become a more common sight on city construction jobs, but you should not hold your breath waiting for rents or sale prices to be reduced on account of resulting lower labor costs.

All these agendas do not fall from the sky. A handful of billionaires bankrolled Governor Walker’s victories in Wisconsin, and there are plenty of other capitalists who are happy to free-ride on their largesse. Austerity may come in several flavors, but, ultimately, from one source. If so-called leadership offers only austerity-lite “me, too,” the alternative is to become our own leaders.