No thinking please, we’re red-baiting

The red-baiting of Bernie Sanders is in full swing. From Democrats. Yes, the silly season is upon us as Senator Sanders was roundly condemned because he believes literacy campaigns are good things.

I know the United States is a uniquely anti-intellectual country, but, still, you’d think teaching reading and writing might be thought of as positive goals. The Republican responses to Senator Sanders’ 60 Minutes interview in which he condemned the late Cuban leader Fidel Castro’s authoritarianism but also acknowledged Cuba’s social achievements, such as drastically improving literacy rates, was predictable. It was only to be expected that there would be pushback by Florida Democrats, who continue to believe they have to roll in the dust at the feet of right-wing Cuban émigrés.

Nonetheless, Democrats outdid themselves. Let’s first pause to quote the words of Senator Sanders that sent them into paroxysm of indignation: “We’re very opposed to the authoritarian nature of Cuba but you know, it’s unfair to simply say everything is bad. You know? When Fidel Castro came into office, you know what he did? He had a massive literacy program. Is that a bad thing? Even though Fidel Castro did it?”

Evidently it is. Particularly humorous was the response of Representative Stephanie Murphy, a Florida Democrat, who said of President Castro on Twitter: “His ‘literacy program’ wasn’t altruistic; it was a cynical effort to spread his dangerous philosophy & consolidate power.”

Teaching people who previously had been left in miserable poverty and without adequate education how to read and write? Run, run for your life!

Viñales Valley, Pinar del Rio province, Cuba (photo by Adam Jones adamjones.freeservers.com)

And demonstrating yet again his complete ignorance, Senator Marco Rubio offered this “history” lesson: “Democratic socialism sounds benign, but at the core of Democratic socialism is Marxism, and at the core of Marxism is this fake offer that if you turn over more of your individual freedom, we’re going to provide you security. We’re going to provide you free healthcare. We’re going to provide you free education. But the problem is that when they can’t deliver on it or you’re not happy with it, you don’t get your freedoms back.”

Where does one begin with such nonsense? Before we get to what socialism actually is, allow me to inform Senator Rubio and other bloviators that virtually every country on Earth, and every advanced capitalist country other than the U.S., has universal health care — and gets better results than the U.S. for a lot less money. Arranging for everybody to have access to health care really isn’t a spectacular achievement. It is not even necessary to be a socialist country to achieve it.

It ought to be possible to hold more than one thought in one’s head at a time, that there could be positive and negative attributes at the same time. Nor should it be forgotten that although demonologists like Florida politicians reflect those who didn’t like Cuba, we never hear from those inside Cuba who support their revolution.

Can reading be a conspiratorial act?

A short-hand definition of socialism would be this: Popular control of production so that enterprises are oriented toward meeting the needs of everyone in a democratic system instead of for the profit of an individual owner or for speculators. A system in which working people make the decisions in their enterprises and their communities and that such decision-making is done in a broader social context so that decisions with social repercussions are made with the peoples and communities affected. In other words, when people have real control over the conditions of their lives — the rule of people instead of the rule of capital.

Incidentally, Senator Sanders isn’t offering anything like that. He’s also been in favor of some U.S. overseas offensives, such as the bombing of Yugoslavia; echoes the right-wing lies about Venezuela even if he opposes an invasion; and refers to Hugo Chávez as a “dead communist dictator” even though President Chávez and his Bolivarian movement won 16 out of 17 elections in an electoral system the Carter Center called “the best in the world.” So the red-baiting of Senator Sanders is not based on reality but on an inability to distinguish between New Deal liberalism, designed to save capitalism, and socialism.

Miami skyline (photo by Wyn Van Devanter)

As I am writing these lines, I happen to be reading the autobiography of Dorothy Healey, the long-time Communist Party organizer who rose to be the chair of the party’s Los Angeles branch, then the second biggest in the U.S. In her book, she gave a detailed account of the political trial she and several other party leaders underwent in the 1950s on trumped up, political charges. Without minimizing the seriousness of the many years of jail they faced, this story also makes useful parallels with today. The prosecution used a strategy of guilt by association, and by distorting the party’s ideas, whether intentionally or out of ignorance of what those were. Healey wrote:

“As in the Foley Square case [a previous political trial of Communist leaders], it was a trial of books. The prosecutor would have witnesses read big chunks of violent-sounding passages from Marx, Engels, and Lenin. This kind of trial could not have been conducted in any other advanced capitalist country — France or England or Italy — because the basic concepts of Marxism were so well known, studied in every university, and familiar to every active trade unionist, that people would have laughed at the outrageous simplifications offered up so solemnly at our trial. That was a peculiarly American phenomenon.”

The mere act of reading and self-education was considered part of the “evidence” against Healey and her co-defendants! She wrote:

“The assistant prosecuting attorney, Norman Neukom, was a vulgar, ignorant man. He was so astonished when one of the defendants was quoted on the need for Communists to engage in continual study. ‘Imagine,’ he told the jury, ‘grown-up people feeling the need to continue to study history and economics and philosophy after they’ve left school.’ For him, somehow, this was further evidence of the evil nature of our conspiracy, grown-ups discussing books they had read. In his cross-examination he wasn’t interested in or capable of refuting any of the substantive points Oleta [O’Connor Yates] made about Party theory and activities.”

Times certainly haven’t changed.

Cubans under Batista had good reasons to join a revolution

None of the above is to suggest that Cuba is above criticism, or that the constrictions on political expression in Cuba is something to ignore. Cuba needs more democracy as it continues to convert the services sections of its economy from state-owned enterprises to cooperatives, as agriculture has long been. We might, however, reflect on the crushing burden of 60 years of attempts to strangle the country by its giant neighbor to the North.

The United States not only threatens to use its overwhelming power in military might but abuses its desirability as a huge market for exports by making its embargo extra-territorial and fully leverages its position as the controller of the global financial system. U.S. embassy personnel have reportedly threatened firms in countries such as Switzerland, France, Mexico and the Dominican Republic with commercial reprisals unless they canceled sales of goods to Cuba such as soap and milk. Amazingly, a American Journal of Public Health report quoted a July 1995 written communication by the U.S. Department of Commerce in which the department said those types of sales contribute to “medical terrorism” on the part of Cubans! Well, many of us when we were, say, 5 years old, might have regarded soap with terror, but presumably have long gotten over that.

Conditions in pre-revolutionary Cuba were ripe for a revolution. The country’s hundreds of thousands of agricultural wage earners averaged only 123 days of work per year. Nearly half of the rural population was illiterate, 60 percent lived in huts with earth floors and thatched roofs and two-thirds lived without running water. Not surprisingly, poor health was rampant with health care generally unavailable and unaffordable to the poor who made up the huge majority of Cuba’s population. Plenty of force was used to maintain that level of inequality. In Santiago de Cuba, the country’s second-largest city, Batista’s police would torture people to death, with mutilated bodies strung from trees in city parks or dumped in gutters; victims could be as young as 14.

Those conditions and the use of state terror tactics to keep those conditions in place were swiftly reversed after the revolution, never to return. But let us not have any fear of acknowledging that authoritarianism is not unknown in post-revolutionary Cuba and although there are fully free elections at the municipal level, higher-level government positions are not subject to popular vote. One-party states are not conducive to democratic decision-making, regardless of where on the political spectrum the one-party state sits and even in a case like Cuba where citizens are widely consulted and policies adjusted based on popular feedback. Consultation isn’t the same as the power to make decisions.

There is terrorism, but it comes from Washington

But is the United States in any position to point fingers at another country? Let’s look at the record of U.S.-Cuba relations.

The mere fact of the revolution, and its insistence on developing Cuban resources to benefit Cubans rather than immiserating them to enhance U.S. corporate profits, was sufficient to ensure steady hostility from Washington. Aviva Chomsky, in her book A History of the Cuban Revolution, reports the Central Intelligence Agency’s Miami station alone was given $50 million per year to coordinate the sabotage and overthrow of the Castro government following the Cuban rout of the Bay of Pigs invaders. Not content with the CIA’s efforts, President John Kennedy established a separate effort to sabotage Cuba, called “Operation Mongoose,” tolerated terrorist activities by Cuban exile groups based in Miami, and oversaw a series of sabotage operations against Cuban infrastructure, one of which led to the death of 400 workers at an industrial plant. A steady stream of raids intended to sabotage infrastructure and industry continued after the missile crisis, including a CIA-organized operation in which Cuban exiles mined a harbor, which led to the destruction of boats and the deaths of several people.

Cartoon by Carlos Latuff

Later in the 1960s and thereafter, CIA tactics switched to encouraging exile groups to conduct those types of terrorist operations rather than directly conducting them itself. Instead, the CIA concentrated on biological attacks that resulted in a variety of crop, animal and human outbreaks of diseases. The CIA goal (carrying out U.S. government policy) remained fixed, as an agency operative would later admit: “We wanted to keep bread out of the stores so people would go hungry. We wanted to keep rationing in effect and keep leather out, so people got only one pair of shoes every 18 months.”

In a report published on April 20, 2000, in the Miami New Times, Jim Mullen compiled a list of terroristic acts committed by Cuban exiles in the Miami area, a list Mr. Mullen said is “incomplete, especially in Miami’s trademark category of bomb threats.” Mr. Mullen listed 71 acts of violence from 1968 (all but two from 1974) through April 2000. The list includes seven people, six of whom were exile figures, murdered in a three-year span of the 1970s; a radio reporter whose legs were blown off by a bomb after the reporter condemned exile violence; dozens of actual bombings; several beatings of demonstrators, including a nun; and bombings of cultural events.

Who gets to point fingers?

There is no bigger hypocrisy than U.S. government officials condemning other governments. Martin Luther King was correct when he called the U.S. the biggest pervader of violence in the world, and that is no less true today. The list of countries that the U.S. has invaded, overthrown governments or interfered in elections is too long to fully recount. In Latin America and the Caribbean alone, the U.S. has invaded 96 times. That total represents only the direct invasions; it doesn’t include coups fomented by the U.S., including Guatemala in 1954 and Chile in 1973.

Chile under Salvador Allende was similarly denounced as a dangerous dictatorship even though the Allende government kept strictly within legal bounds while the right-wing opposition used extralegal means to oppose it and when that didn’t work called in the military to bomb, arrest, force into exile, “disappear,” torture and kill hundreds of thousands. What “crimes” did President Allende commit? These three statistics concisely summarize the story:

• In 1970, on the eve of Allende’s electoral victory, 50 percent of Chile’s children were undernourished, stunting their development; there were 600,000 considered developmentally disabled because of lack of protein and other problems of malnutrition.

• In 1972, the Allende administration arranged for 550,000 breakfasts and 700,000 lunches to be served daily to students.

• By the early 1980s, under Pinochet, more than half the population of greater Santiago was unable to develop normally either physically or mentally as a result of lack of proper nourishment.

It takes a breathtaking level of ignorance to see providing health care, seeing to it that children receive proper food and raising literary and cultural levels is a form of terrorism while believing such basics should be provided only to those who can afford them. Unfortunately, such ignorance is bipartisan.

Why do Yemen’s dead not merit the attention of Jamal Khashoggi?

The apparent murder of Saudi Arabian dissident journalist Jamal Khashoggi is a shocking crime that merits the international attention it has received, but nonetheless it is impossible not to wonder why the death of a single person receives vastly more coverage than ongoing Saudi atrocities in Yemen.

Is it that a dramatic story involving a single personality is easier to grasp than a war fought over complex political and ethnic issues, or does the differing levels of attention signal that Mr. Khashoggi has achieved the status of an honorary westerner while the tens of thousands dead in Yemen represent a distant “other”? Some combination of both of these are likely at work, and that he is a fellow journalist makes his fate all the more compelling for reporters and editors. Geopolitical considerations are certainly at play here, with the towering hypocrisy of the Trump administration on full display, a hypocrisy that stands out even in the dismal history of U.S. government policies toward Saudi Arabia.

President Donald Trump’s transparent attempts to exonerate Saudi Arabia’s de facto leader, Crown Prince Mohammed bin Salman, by “speculating” that “rogue agents” might be behind Mr. Khashoggi’s demise inside the consulate is beyond laughable, or would be if the issue weren’t so serious. Billions of dollars of arms sales are at stake (not to mention a reliable supply of oil), so minor trifles like human rights or cold-blooded murder can be swept aside. Whatever evidence the Turkish government possesses has not been made public, and it would seem the most likely reason is because Ankara has bugged the Saudi consulate. If so, a sensitive matter that the Turkish government would rather evade.

The thuggish behavior of the crown prince has to be laid partially at the doorstep of the White House because President Trump has heartedly embraced him, giving the green light to Saudi Arabia’s bottomless contempt for human rights. We might even speculate that President Trump wishes he could do away with opponents as firmly as the crown prince. And never mind the atrocities the United States (along with Britain and France) facilitate in its all-out support of Saudi Arabia’s war in Yemen — what is human life (especially the lives of “others”) when profits are at stake?

A blind child carries a dove at a protest against the attack on the al-Nour Center for the Blind in Sana’a, Yemen, on January 10, 2016. Students say neither the school, nor themselves, have taken any side in the war. (photo by Almigdad Mojalli/VOA)

By any standard, the conduct of the war in Yemen is inhumane. Nobody knows how many people have died as a result of the fighting, although the independent group Armed Conflict Location & Event Data Project (ACLED) estimates that almost 50,000 people were killed from January 2016 to July 2018. Implying a much higher total, Save the Children estimates that at least 50,000 children died in 2017 alone, or about 130 per day. The charity further estimated that almost 400,000 children will need treatment for severe acute malnutrition.

The United Nations Office for the Coordination of Humanitarian Affairs offers this sobering assessment:

“An alarming 22.2 million people in Yemen need some kind of humanitarian or protection assistance, an estimated 17.8 million are food insecure — 8.4 million people are severely food insecure and at risk of starvation — 16 million lack access to safe water and sanitation, and 16.4 million lack access to adequate healthcare. Needs across the country have increased steadily, with 11.3 million who are in acute need — an increase of more than one million people in acute need of humanitarian assistance to survive.”

The United Nations Human Rights Council reports that Saudi-led “coalition air strikes have caused most direct civilian casualties. The airstrikes have hit residential areas, markets, funerals, weddings, detention facilities, civilian boats and even medical facilities.” Both sides are reported by the council to forcibly conscript children between the ages of 11 and 17 to fight.

A study written for the World Peace Foundation, The Strategies of the Coalition in the Yemen War: Aerial bombardment and food war, by Martha Mundy reports that “From August 2015 there appears a shift from military and governmental to civilian and economic targets, including water and transport infrastructure, food production and distribution, roads and transport, schools, cultural monuments, clinics and hospitals, and houses, fields and flocks.”

To what end are these atrocities committed? Professor Mundy writes:

“While the US and UK back their Coalition allies unfailingly in their wider political and strategic objectives, the two major Arab actors in the Coalition, Saudi Arabia and the [United Arab] Emirates, have different economic priorities in the war. That of Saudi Arabia is oil wealth, including preventing a united Yemen’s use of its own oil revenues, and developing a new pipeline through Yemen to the Indian Ocean; that of the Emirates is control over seaports, for trade, tourism and fish wealth. The attack on al-Hudayda [a major port] explicitly aims to complete the economic war militarily. That the immense suffering of Yemen’s people has still not brought surrender by those in Sanʾa [the Yemeni capital] does not give credibility to the tactic of further hunger and disease. Yet for the Coalition, as a senior Saʿudi diplomat responded (off the record) to a question about threatened starvation: ‘Once we control them, we will feed them.’ ”

Yemen is highly dependent on food imports, and the blockades of its ports have put Yemenis at risk of famine. Professor Mundy draws this conclusion:

“If one places the damage to the resources of food producers (farmers, herders, and fishers) alongside the targeting of food processing, storage and transport in urban areas and the wider economic war, there is strong evidence that Coalition strategy has aimed to destroy food production and distribution in the areas under the control of Sanʾa. … [F]rom the autumn of 2016, economic war has compounded physical destruction to create a mass failure in basic livelihoods. Deliberate destruction of family farming and artisanal fishing is a war crime.”

There is little coverage of this ongoing humanitarian disaster in the corporate media. Why are millions of lives almost an afterthought while one privileged life merits such intense attention? Again, the fate of Mr. Khashoggi and the spotlight it shines on Saudi practices merit the widespread commendation it has attracted. But why such indifference to millions of others? Where is our humanity?

World Bank solution for lack of jobs: Cut worker protections

The World Bank is in the process of completing its “World Development Report 2019: The Changing Nature of Work” and, surprisingly, the latest draft version opens with quotes from Karl Marx and John Maynard Keynes. Has the World Bank suddenly lost sight of its purpose and will now take up the cause of working people?

Well, you already know the answer to that question, didn’t you?

Only a few paragraphs down we begin to see where this paper is heading. After a bit of perfunctory hand-wringing over disruptions caused by robotics, we read the problem is “domestic bias towards state-owned or politically connected firms, the slow pace of technology adoption, or stifling regulation.” And although some jobs are disappearing, fear not because “the rise in the manufacturing sector in China has more than compensated for this loss.”

Oh, so we should all move to China to get new jobs.

Never mind that the highest minimum wage for Chinese workers, that mandated in Shanghai, is $382 per month. In some places the minimum wage is half that, if workers are fortunate enough to be paid regularly. And that millions of rural Chinese are being driven into cities to become sweatshop workers, so for now there won’t be enough work for the rest of the world. Then again, letting bosses have the upper hand is what the World Bank has in mind. No, its economists haven’t forgotten what the institution’s purpose is nor why it exists.

A Chinese-owned factory in Lesotho (photo by K. Kendall)

So what to do? The World Bank report does suggest not allowing corporations to dodge taxes to the degree that they do. Very well, but even if taxes were collected at the statutory rates, that would still leave corporations vastly under-taxed. No suggestion by the bank, of course, that corporations actually pay a fair tax rate. Corporations currently account for a paltry nine percent of U.S. tax receipts; in the 1950s, they accounted for 30 percent or more. Similarly, in Canada personal income taxes account for three and a half times more revenue than do corporate income taxes; these were equal in 1952.

There is much discussion of “investing in human capital,” a particularly favored mantra of the World Bank. What does that mean? Capitalists are likely to interpret such talk — rather common in NGO circles these days — to mean demanding more skills or degrees from prospective workers, but in the United States graduates with doctorate degrees are being forced to take jobs in academia as part-time adjuncts, and plenty of folks in other fields are “over-educated” already for the jobs they hold. This concept comes from the idea that the problem is that there aren’t enough skilled people for all those wonderful jobs that are out there, just over the rainbow. But in the real world, as opposed to Right-wing think tanks, that is not so.

A 2014 report issued by the National Employment Law Project found that higher-wage jobs were created at a much lower rate during the “recovery” from the 2007-08 economic collapse than had been lost; conversely, low-wage jobs (paying less than $13.33 per hour) were created twice as fast as they had been lost. In separate studies, the Economic Policy Institute found that long-term unemployment is elevated for workers at every education level (and was increasing at a somewhat higher rate for those with some college or a four-year college degree than the average), and that the so-called “skills mismatch” is a myth.

So we come to the real “solution” in the minds of World Bank officials: Cut worker-protection laws.

Aw, you really aren’t surprised, are you?

(Graphic by Real-World Economics Review)

Here’s a key passage in the report: “Rapid changes to the nature of work put a premium on flexibility for firms to adjust their workforce, but also for those workers who benefit from more dynamic labor markets.”

Dynamic for who? What we have here are code words meaning make it easier to fire people. And that’s the real takeaway message, no matter the lofty rhetoric about governments creating a new social contract. “Creating jobs” and “investing early in human capital” are two elements of the World Bank paper’s suggested new social contract. Unfortunately, there are no thoughts on how new jobs might be created when capitalists are in a frenzy of eliminating jobs to maintain their profit rates and survive relentless market competition. More schooling, which is what “investing early in human capital” amounts to, is fine by capitalists, as long as they don’t have to bear any of the costs. It’s up to students to take on more debt to create this new “human capital.”

Contrast this happy talk with the reality of the capitalist workplace. A report just issued by Democratic U.S. Representative Keith Ellison found the average ratio of CEO-to-median-worker pay is 339-to-1. That ratio among the 500 biggest U.S. corporations is as high as almost 5,000-to-1. Nope, I don’t think the boss works thousands of times harder than you do. At McDonalds, for example, the CEO’s annual salary could be used to pay the yearly wages of 3,101 workers making the chain’s median pay.

The sort of societal priorities and imbalances of power that enable such appalling inequality might be summed up by the uses to which money is put. In Los Angeles, a new football stadium is being built and the estimated cost of it is now estimated at $4.9 billion. That figure has risen considerably and likely will again. Given all the homelessness in Los Angeles, and all the other social problems, what could have been done with $4.9 billion?

The number of homeless people in California is estimated at 130,000. Doing something about that might be one way to “invest” in human development, and doing so might even save money. A Rand Corporation study carried out for Los Angeles County found that homeless people who are provided stable shelter make fewer trips to the emergency room and are arrested less frequently, to the extent that the cost of the housing is more than offset.

Oops, but that’s not profitable for the well-connected as throwing money at stadium boondoggles or cutting jobs. But if you earn enough degrees, perhaps you’ll fulfill the World Bank’s prophesy by landing a job at a Chinese sweatshop.

Leaked Trump infrastructure plan is a plan for corporate subsidies

The Trump administration’s plans to rebuild infrastructure in the United States have been leaked, and it appears to be as bad as feared. At least three-quarters of intended funding will go toward corporate subsidies, not actual projects. It is possible that no funding will go directly toward projects.

There’s no real surprise here, given that President Donald Trump’s election promise to inject $1 trillion into infrastructure spending was a macabre joke. What is actually happening is that the Trump administration intends to push for more “public-private partnerships.” What these so-called partnerships actually are vehicles to shovel public money into private pockets. These have proven disastrous wherever they have been implemented, almost invariably making public services more expensive. Often, far more expensive. They are nothing more than a variation on straightforward schemes to sell off public assets below cost, with working people having to pay more for reduced quality of service.

That is no surprise, as corporations are only going to provide services or operate facilities if they can make a profit. And since public-private partnerships promise guaranteed big profits, at the expense of taxpayers, these are quite popular in corporate boardrooms. And when those promises don’t come true, it taxpayers who are on the hook for the failed privatization.

Panorama of Paris (photo by Benh Lieu Song)

The collapse earlier this month of Carillion PLC in Britain put 50,000 jobs at risk, both those directly employed and others working for subcontractors. The holder of a vast array of government contracts for construction, services and managing the operations of railways, hospitals, schools and much else, Carillion received contracts worth £5.7 billion just since 2011. Overall, an astonishing £120 billion was spent on outsourcing in Britain in 2015.

What did British taxpayers get for this corporate largesse? It certainly not was the promised savings. Parliament’s spending watchdog agency, the National Audit Office, found that privately financing public projects costs as much as 40 percent more than projects relying solely on government money. The office estimates that existing outsourcing contracts will cost taxpayers almost £200 billion for the next 25 years. (This report was issued before Carillion’s collapse.) In response, Labour leader Jeremy Corbyn said, “These corporations need to be shown the door. We need our public services provided by public employees with a public service ethos and a strong public oversight,” The Guardian reported.

Naturally, there was one group that did quite well from this privatization: Carillion’s shareholders, who reaped £500 billion in dividends in the past seven years. But it is the government that will have to pick up the tab if the company’s employees are to continue to be paid. On top of that, the company’s pension shortfall reached £900 billion, according to Reuters.

By no means is Carillion’s collapse the only privatization disaster in Britain. A bailout of the corporate-run East Coast rail system is expected to cost hundreds of millions of pounds. There are numerous other examples that have proven windfalls for corporate executives but expensive mistakes for the public.

Offer subsidies first, ask questions later

One of the many empty promises made by President Trump during the 2016 campaign was that his infrastructure plan would “leverage public-private partnerships, and private investments through tax incentives, to spur $1 trillion in infrastructure investment over ten years. It is revenue neutral.”

“Spur” investment, not actually spend on investment. This supposed plan originated with Wilbur Ross and Peter Navarro, a conservative economics professor. Ross, now Commerce secretary (although perhaps not for long if recent reports are to believed), was an investment banker who specialized in buying companies and then taking away pensions and medical benefits in order to quickly flip his companies for a big short-term profit. The two recommended the Trump administration allocate $137 billion in tax credits for private investors who underwrite infrastructure projects. The two claimed that over 10 years the credits could spur $1 trillion in investment.

So the new administration won’t actually spend $1 trillion to fix the country’s badly decaying infrastructure; it hopes to encourage private capital to do so through tax cuts.

That brings us to this week’s leak. The news site Axios published the Trump administration’s six-page outline for infrastructure investment on January 22. The document mentions no dollar figures. But what the document does do is to discuss where money will be sent. First up is “infrastructure incentives initiative,” which is to account for 50 percent of total appropriations. This category will provide grants to be used for “core infrastructure” projects and requires “Evidence supporting how applicant will secure and commit new, non-federal revenue to create sustainable long-term funding” and requires new sources of “revenue for operations, maintenance and operations.”

Netherlands highway (Daan Roosegaarde)

Although it is possible that local- or state-government funding could provide the required revenues, given the intentions of the Trump régime, what this means is that privatization is being counted on for these projects, with corporations taking over public facilities providing the required ongoing revenue streams.

A hint that this is intended is that the first item on a list of “Principles for Infrastructure Improvements” is an intention to make it easier for tolls to be placed on highways. That item is this: “Allow states flexibility to toll on interstates and reinvest toll revenues in infrastructure.” Again, it is possible that state governments might do this themselves. But the more likely scenario is the privatization of highways, with the corporations gaining control then installing toll booths to not only provide funds for maintenance but to hand themselves a perpetual profit. And if the profits don’t materialize, it won’t be private capital holding the bag. For example, nine privatized toll roads in Spain will cost taxpayers there €5 billion because the roads are being nationalized in the wake of the private operators’ failures.

A further hint is found buried in the section on water infrastructure, where we find this passage: “Remove the application of Federal requirements for de minimis Federal involvement.” This is likely intended to provide a green light to privatization of water systems. That has been done in France and Germany, with disastrous results. For example, water prices in Paris doubled over 25 years before the city took back its water system, saving €35 million in the first year and cutting rates. The German city of Bergkamen reduced costs by as much as 30 percent after returning its basic utilities to the public sector.

No details for a plan not based in reality

Another 25 percent of the total appropriations for the White House infrastructure investment plan is a “rural infrastructure program,” under which state governments are “incentivized to partner” with “private investment.” Various other programs constitute the remainder of the plan, none of which are clear as to who or what will be eligible.

The official unveiling of the plan will likely not be released until after the January 30 State of the Union address, according to a report in The Hill. A further sign of the lack of specifics is that the White House has had nothing substantial to say on the topic. The most recent statement on infrastructure that a search of the official White House web page could find was an August announcement that the president had signed an executive order making the “environmental and permitting processes more efficient.”

Channeling the president’s usual disregard for reality, the announcement claimed that “delays” in infrastructure projects cost “trillions” of dollars. The only actual projects mentioned are three pipelines, including the Keystone XL and Dakota Access lines, of which the announcement claims will “create over 42,000 jobs and $2 billion in earnings.” (Those figures appear directly copied from a widely discredited State Department environmental impact statement issued in 2014, when the Obama administration was supporting them.) In reality, a study by the Cornell Global Labor Institute found that, when all effects are calculated, there may be a net loss of jobs. Additional fuel costs in the Midwest, pipeline spills, pollution and the rising costs of climate change would contribute to job losses.

Of course, environmental damages are not considered in Trump administration projections, putting them even more in the realm of fantasy. Consider two World Health Organization studies that concluded polluted environments cause 1.7 million children age five or younger to die per year. The U.S. Environmental Protection Agency estimated a year ago that 230,000 lives would be saved and 120,000 emergency-room visits saved in 2020 if the Clean Air Act is left intact. Globally, air pollution could lead to nine million premature deaths and US$2.6 trillion in economic damage from the costs of sick days, medical bills and reduced agricultural output by 2060, according to an Organisation for Economic Cooperation and Development study.

This doesn’t come cheap, either — a study of energy subsidies estimates the totality of subsidies given to fossil fuels for 2015 was $5.6 trillion. Lest you think some “anti-oil” group made that calculation, that figure comes to us courtesy of the International Monetary Fund! The Trump administration will only add to this mind-boggling total as it has made clear its intentions to further subsidize gas, oil and especially coal, no matter the lack of rational economics. And the cost of global warming? Incalculable. What would be the future cost of hundreds of millions displaced from drowned cities? Or, in the long term, of destroying the Earth’s ability to maintain a stable environment?

Although Donald Trump is the worst yet of a long line of disastrous U.S. presidents, let’s forgo the easy idea that he alone is responsible for facilitating corporate plunder at the cost of all other human considerations. He is highly useful to the plutocrats who control the Republican Party, so much so that talk of a Trump impeachment should be relegated to the level of fantasy for the foreseeable future, barring an all-time wipeout in the 2018 midterms despite the Democratic Party’s uncanny ability to blow elections. The greater question is if sufficient numbers of Trump voters come to realize the degree they were hoodwinked for believing that a billionaire who built his fortune by screwing working people would somehow come to their rescue.

That’s the short term. For the longer term, humanity finding its way out of the dead end it is speeding toward depends on freeing itself from the grips of a system that repeatedly throws up Trumps, Bushes, Harpers, Thatchers and the like. The Trump administration is a symptom, not a cause, of morbid decay.

Can’t we have an honest conversation about Vietnam?

The Ken Burns/Lynn Novick television series on the Vietnam War provides yet another example of the narrowness of “acceptable” political discourse in the United States. More than four decades past the end of that imperialist adventure, having a serious discussion about it remains taboo.

The series also provides a fresh example of how the narrowness of acceptable discourse is disguised through the appearance of a vigorous debate. I will confess here I have not watched Burns and Novick’s The Vietnam War, but the consistency of the many discussions of it I have read confirm what would have been expected: The liberal side of the “debate” on the Vietnam War, that an “honorable” effort was tragically miscarried because of “mistakes.”

The series has a long list of corporate sponsors, typical for a Public Broadcasting System production. One of the Koch Brothers, David H. Koch, provided funding, as did the Andrew W. Mellon Foundation, the Rockefeller Brothers Fund and Bank of America. Such blue-chip sponsors are not going to associate themselves with any organization that has the slightest potential of providing any challenging critique.

Rice paddies in Vietnam (photo by Simon Gurney)

But let us not reverse cart and horse. This is the sort of case where corporate sponsors, including fiercely anti-democratic ones like the Koch Brothers, provide funding because they are confident of what they will be getting. There is no need for any formal censorship because corporate control of the media will see to it that viewpoints challenging the mythologies of capitalism are deemed out of bounds.

Most large, influential broadcast stations and print publications are owned by large corporations, and a typical small-city newspaper is owned by a prominent local businessperson if it is not owned by a large corporation. Powerful corporate interests appoint the top editors and managers of their media properties — these mass media decision-makers are men and women who already see the world through the prism of dominant ideologies, and those ideologies will be reflected in the way that news stories are covered. Those ideologies are also reflected in indirect ways — pressure to increase readership or viewership easily leads to pandering to perceived (and sometimes manufactured) consumer interests such as wall-to-wall coverage of celebrity gossip and exhaustive coverage of sports teams simultaneous with the shrinking of news sections.

The press isn’t free if you don’t own one

Many folks on the Left have the idea that there is some sort of organized conspiracy among owners and managers of major media outlets to make sure that ideologically inconvenient perspectives are shut out. That simply isn’t so. Competition alone would prevent any such collusion; within “acceptable parameters” reporters and editors want to be the first to report news. It is enough that corporate-inspired ideologies pervade a society and that corporate ownership ensures that decision-making positions are filled with those who hold to some variant of prevailing ideologies or are inclined to “play it safe” by cautiously remaining within “acceptable” boundaries.

The mass media will then simply reflect these dominant ideologies, and continual repetition through multiple mass media outlets reinforces the ideologies, making them more pervasive until the emergence of a significant countervailing pressure. The very competitive nature of mass media ownership helps dominant ideologies prevail — if so many different outlets report the same news item in a nearly identical way, that “spin” can easily gain wide acceptance. Or if stories are reported differently by competing media outlets, but with the same dominant set of presumptions underlying them, those dominant presumptions, products of ideologies widely propagated by elite institutions, similarly serve as ideological reinforcement.

Editors can reign in reporters with independent mindsets by not running unacceptable stories, or revising them so that dominate ideologies and mythologies are not challenged. When a reporter is fearless enough to follow the trail until some semblance of the truth can be published, even if in watered-down fashion, an exemplary punishment can be made of him or her (such as was done to Gary Webb after his reporting on the CIA). But even when that is not the case, a simple ignoring of a story can make it disappear.

The persistence with which stories are reported is another reinforcement — stories that serve, or can be manipulated, to uphold dominant ideologies can be covered for long periods of time with small developments creating opportunities to create fresh reports at the same time that stories that are ideologically inconvenient are reported briefly, often without context, then quickly dropped. An inconvenient story run once, then ignored, can even misleadingly be pointed to as “proof” that news is being reported no matter what interests are at stake.

One well-documented example will provide an illustration — coverage by elite media of Jerzy Popieluszko, a pro-Solidarity priest in Poland murdered in 1984 by Polish secret policemen in contrast to coverage of priests and other church personnel murdered in U.S.-backed Latin American dictatorships.

Human rights depends on if the U.S. supports the régime

In their classic book, Manufacturing Consent, Noam Chomsky and Edward Herman analyzed four U.S. media outlets that then often set the tone for the press — the most influential newspaper (The New York Times), the two main news magazines (Time and Newsweek) and the most authoritative television news broadcaster (CBS). Their study found 140 articles/broadcasts on Popieluszko and eleven articles/broadcasts on 23 victims in Guatemala during a period that overlapped with Popieluszko’s murder; the Times ran ten front-page articles on Popieluszko, none on the others.

The articles on Popieluszko routinely featured graphic descriptions of the details of his murder and consistently tied his murder to Polish communist authorities despite the fact that the murderers were swiftly arrested and found guilty in an open trial. By contrast, only four of the 23 Guatemalan victims had their names mentioned in any news account, little detail was offered for any of these murders, no remark was made concerning the fact that no arrests were made in any of these cases, nor was U.S. material support of the Guatemalan government that was behind the murders once mentioned.

None of the prevailing situation precludes energetic debate in capitalist mass media within the parameters set by prevailing ideological interpretations. Ideas that directly challenge corporate orthodoxy can be excluded at the same time that a debate among two or more “acceptable” ideas rages. This brings us back to interpretations of the Vietnam War. At the end of the 1990s a strong debate played out in the mass media outlets of the United States concerning the Vietnam War (one in which the Times was a significant participant).

A U.S. Air Force plane drops a white phosphorus bomb on Vietnam in 1966.

This debate had all the appearances of a serious dissection of a bloody, deeply divisive blot on U.S. history. But although the debate was heated and lively, it was only between two “acceptable” viewpoints — an honorable effort that tragically failed or a well-intentioned but flawed effort that should not have been undertaken if the U.S. was not going to be “serious” about fighting. Left out were the widely held views that the war should never have been fought because it was a war to extend U.S. hegemony or that the U.S. simply had no business fighting in someone else’s civil war.

Further, the first “acceptable” viewpoint implied, and the second explicitly stated, that the U.S. didn’t really fight hard to win the war, ignoring the actual intensive level of the U.S. war effort in which most of North Vietnam’s larger cities were reduced to rubble, much of the farming lands were destroyed and three million Vietnamese were killed. The total tonnage of bombs dropped by the U.S. in Vietnam exceeded that of all bombing by all countries during World War II. Reports of the countryside at the end of the war spoke of entire regions as “bare, gray and lifeless.”

So much for the proverbial “fighting with one hand tied behind the back.” And let’s not forget that the Vietnamese had already spent years freeing themselves from the grip of France, only to have the U.S. sabotage elections and resume the fight. That the Vietnamese have the right to decide for themselves how their economy will be structured, or even be allowed independent development at all, and that the U.S. used the full might of the world’s biggest military machine to prevent that, is still outside “acceptable” discussion.

Debate in the service of obfuscation

The liberal conception of an honorable effort that tragically failed is every bit an obfuscation as the conservative perspective that a well-intentioned but flawed effort that should not have been undertaken if the U.S. was not going to be “serious” about fighting. But that these two narrow perspective were allowed to fight it out provided the appearance of a free and open media at the same time that the media obscured.

To return briefly to Guatemala, there has only rarely been any effort in the U.S. to discuss Washington’s bloody role (and elsewhere in Latin America). The Eisenhower administration overthrew Guatemala’s democratically elected government, after a 1952 “national intelligence estimate” (a joint document put together by the CIA and other U.S. intelligence agencies) declared that the United Fruit Company’s massive profits there were a “U.S. interest” requiring intervention.

Allen Dulles, then the CIA director, met with a United Fruit official, promising that whomever the CIA would select as the next Guatemalan leader would not touch the company. The overthrow would institute a 40-year nightmare of state-organized mass murder. A series of military leaders, each more brutal than the last and fortified with U.S. aid, unleashed a reign of terror that ultimately cost 200,000 lives, 93 percent of whom were murdered by the state through its army and its death squads.

The worst of these dictators was General Efraín Ríos Montt, whose régime murdered more than 1,000 people a month during 1982. Ríos Montt was an evangelical Protestant preacher who declared that his presidency was the will of God. Ronald Reagan responded by paying a visit to Ríos Montt, declaring him “totally dedicated to democracy” and claiming that reports of human rights abuses were a “bum rap.”

Do you ever see of this (only one of dozens of examples that could be cited) discussed in the U.S. corporate media? I don’t, either.

In countries in which the media is controlled by the government, it is easy for people to disregard what they read or hear because it is all coming from the same source, even when there is room for different opinions. A system in which the mass media is believed to be independent is far more effective at suffusing a society with an ideology. Such a system is not the result of some sort of conspiracy or a conscious plan, it is simply a natural outgrowth of corporate institutions growing so powerful at the expense of all other institutions.

And when a particularly skilled team of producers is able to uphold the interests of elite institutions, corporate and otherwise, the red carpet will be rolled out. Slick, beautifully presented work beats ham-fisted propaganda every time.

Koch brothers take aim at Republican ‘moderation’ and the Constitution

The Republican Party isn’t extreme enough. So say the Koch brothers, who are threatening to withhold the $400 million they have promised to inject into the 2018 electoral cycle.

Members of the U.S. Congress have received their marching orders: Repeal the Affordable Care Act (in other words, replace “Obamacare” with “Trumpcare”) and lavish billionaires with massive tax cuts. A June “donor retreat” at a Koch brothers’ compound in Colorado was attended by 400 people, and the “price for admission for most was a pledge to give at least $100,000 this year to the Kochs’ broad policy and political network,”  The Guardian reported.

The Koch brothers are on record as committing up to $400 million on the next midterm elections, but such largesse is not without strings. The Guardian quoted the head of the Koch brothers’ political arm, Americans for Prosperity, Tim Phillips, as frustrated at the delays in extremist legislation getting through Congress. “There is urgency,” Phillips said. “We believe we have a window of about 12 months to get as much of it accomplished as possible before the 2018 elections grind policy to a halt.”

A Louisiana bayou devastated by a nearby natural gas operation (photo by John Messina for the U.S. Environmental Protection Agency)

As an example of what is expected to be done, one wealthy donor told the gathering that his “Dallas piggy bank” is closed for now. “Get Obamacare repealed and replaced, get tax reform passed. Get it done and we’ll open it back up,” he told The Guardian, adding that he has encouraged other wealthy donors to similarly withhold money until they get what they expect.

There really isn’t anything new here, other than it is unusual for any window to be opened into the secretive workings of Charles and David Koch’s networks. Their massive spending to buy Congress and state legislatures (they budgeted $900 million for the 2016 elections), their widespread funding of global-warming denialism, their willingness to destroy the environment in pursuit of endless profits, and their relentless focus on privatizing public assets are well known. Their Americans for Prosperity outfit was also a crucial funder for the corporate-sponsored Tea Party movement. Perhaps less known is that they are bankrolling an attempt to re-write the U.S. Constitution.

Amending the Constitution to suit themselves

There are two separate pushes for a constitutional convention. In a Truthout report, Alex Kotch writes:

“One would attempt to engineer a convention for a balanced budget amendment only, and the other tries to secure an open convention for the purpose of limiting the power and jurisdiction of the federal government. But once a convention is underway, all bets are off. The convention can write its own rules, resulting in a wide-open or ‘runaway’ convention that can make major changes to the constitution and, some argue, even change the number of states required to ratify those changes.”

Under U.S. law, if the legislatures of 34 states (two-thirds of the states) call for a constitutional convention, Congress is required to convene one. The balanced-budget resolution has been passed by 29 states, Truthout reports. Once a convention is convened, it can write its own proposals, including changing the number of states required to pass a constitutional amendment to make it easier for extreme corporate wish lists to be converted into permanent law. But even if only a balanced-budget amendment were to become part of the U.S. Constitution, such an amendment would enshrine harsher austerity with little or no recourse.

The Center on Budget and Policy Priorities puts this plain:

“By requiring a balanced budget every year, no matter the state of the economy, such an amendment would raise serious risks of tipping weak economies into recession and making recessions longer and deeper, causing very large job losses. That’s because the amendment would force policymakers to cut spending, raise taxes, or both just when the economy is weak or already in recession. … [T]he amendment would force policymakers to cut spending, raise taxes, or both. That would launch a vicious spiral of bad economic and fiscal policy: a weaker economy would lead to higher deficits, which would force policymakers to cut spending or raise taxes more, which would weaken the economy further.”

A detailed analysis by Macroeconomic Advisers estimates that, had a balanced-budget amendment been in place at the time of the 2008 economic crash, there would have been an additional 11 million people unemployed in 2012 and gross domestic product would have declined 12 percent that year. Because of the decline in tax revenue this would cause, an additional $500 billion would have been added to that year’s deficit, and coupled with the cuts in spending that would have mandated by such an amendment, U.S. government discretionary spending would have been reduced to zero. As in literally nothing.

The Koch brothers and their billionaire confederates would be doing just fine, however, and that’s all that matters. A web of Koch-funded organizations are funding and promoting these pushes for a constitutional convention.

Clean air and water? Who needs them?

Koch Industries is one of the country’s worst polluters of the air and water as well as a major source of greenhouse gases. Thus it comes as no surprise that Charles and David Koch, who operate the company, are also active funders of global-warming denialism, and the two stand to profit enormously from the Alberta tar sands. They own close to two million acres that, should that land be fully exploited, would throw another 19 billion metric tons of carbon emissions into the atmosphere. The International Forum on Globalization estimates that the Koch brothers stand to make more than one million times more than the average Keystone XL pipeline worker over the life of the pipeline, based on potential profits of $100 billion.

The Alberta tar sands (photo by Howl Arts Collective, Montréal)

The Koch brothers are major funders of the extremist American Legislative Exchange Council (ALEC) that writes legislation to benefit its corporate membership that is frequently passed by state legislators verbatim; and even attempted to take control of the Cato Institute, the far-right libertarian “think tank” that, despite agitating for the end of Social Security, was apparently not extreme enough for them.

Not content with control of Congress and state legislatures, David Koch donated $300,000 to U.S. Vice President Mike Pence’s gubernatorial bids, and Pence has dutifully denied global warming. A 2014 Politico article reported:

“A number of Pence’s former staffers from his days in Congress have assumed major roles in the brothers’ corporate and political spheres. And Americans for Prosperity, the Kochs’ top political group, has been holding up Pence’s work in Indiana as emblematic of a conservative reform agenda they’re trying to take nationwide. … Pence has worked to spotlight the fiscal issues that animate the Kochs’ political giving. People close to the brothers say he first earned their network’s admiration during the George W. Bush years, when he opposed what he deemed Big Government policies backed by his own party, including No Child Left Behind and a Medicare expansion, and repeatedly warned that the GOP was veering off course.”

As I have noted before, this is a lament that the Bush II/Cheney administration was too liberal!

National parks in the cross hairs

The Koch brothers’ extreme hostility to anything public — that is, anything that is not being exploited for corporate plunder — has gone so far as to oppose national parks. Unfortunately, this is not a joke. A Koch brothers-backed outfit calling itself the Property and Environment Research Center is advocating selling them. Reed Watson, the center’s executive director, argues that “land management agencies [should] turn a profit” by removing restrictions on timber and energy development.

To soft-peddle this extremism, the center calls for selling off other federal lands rather then openly advocating selling national parks — an immensely unpopular idea across the political spectrum — but that is where the logic of its extremism points. In a paper the center produced, “How and Why to Privatize Public Lands,” the group makes it intentions clear:

“Four criteria should guide reform efforts: land should be allocated to the highest-valued use; transaction costs should be kept to a minimum; there must be broad participation in the divestiture process; and ‘squatters’ rights’ should be protected. Unfortunately, the land reform proposals on the table today fail to meet some or all of those criteria. Accordingly, we offer a blueprint for auctioning off all public lands over 20 to 40 years.”

Note that it says “all” without qualification. Oil rigs and fracking operations instead of natural scenery for all to enjoy because it would be more profitable in the short term. This mindset has reached the highest level of government as exemplified by the Trump administration’s intentions to open federal lands to mining and oil extraction at fire-sale prices without oversight, or to sell them.

It’s not as if the Koch brothers don’t know where their next billion is coming from. Combined, the two are worth about $97 billion. Each is one of the nine richest people on Earth, and together the two possess more wealth than the world’s richest person, Bill Gates. They were worth $32 billion in 2009 — nearly tripling their fortune since the first year of the Obama administration.

This is all the product of libertarianism, a a philosophy of might makes right. A belief in complete freedom of commerce, of minimal government involvement in the economy or social affairs, is nothing less than allowing the “market” to determine economic and social outcomes. The logical outcome of this is no more minimum wage, no more Social Security, no more laws against discrimination in the workplace, no more safety rules, no more consumer-protection laws, no more environmental protection. This indeed is what libertarians preach, including the Koch brothers and Ron Paul.

Who is this individualistic “freedom” for? It is “freedom” for industrialists and financiers to rule over, control and exploit others. “Justice” becomes the unfettered ability to enjoy this freedom, a justice reflected in legal structures. Working people are “free” to compete in a race to the bottom set up by capitalists.

On an even playing field, the brutality of the programs put forth by the Koch brothers and their fellow libertarian billionaires wouldn’t pass the laugh test. But when you have hundreds of millions of dollars to throw around every two years, and an interlocking maze of organizations and “think tanks” to promote your self-serving agenda, you have the ability to make the most obscene ideas “mainstream.” On what basis should such one-sided power relations be considered democratic?

Austerity never ends: Economists say wages are too high

No, you can’t really make this stuff up: Orthodox economists continue to tell us that the reason for ongoing economic stagnation is that wages and unemployment benefits are too high. Yes, that’s right. You haven’t suffered enough.

Given that orthodox economics (or “neoclassical” or Chicago School, if you prefer alternate labels) exists as a propaganda tool to justify all manner of capitalist excesses and inequality, it’s not actually surprising that such snake oil continues to be peddled with a straight face. Never mind the years of stagnant wages, the decades of wages trailing productivity ever further, housing costs rising far more sharply than inflation, and the increased use of debt just to stay afloat.

(Photo by Gargolla)

If you would just work for less, all would be well. The basic reason for that belief is an admission that, in a capitalist economy, wages are a commodity. (That really means human beings are commodities, but we can only expect so much truth here.) This underlying belief is succinctly summarized by this commentary offered by the conservative Library of Economics and Liberty:

“Unemployment is just a labor surplus; since wages are the price of labor, the fundamental cause of unemployment has to be excessive wages.”

But capitalism is supposed to be a perfect system, always moving toward equilibrium, according to capitalist dogma. So there should be no unemployment. There obviously is, so what’s the culprit? You’ve likely already guessed — it’s the government’s fault. The self-proclaimed capitalist tool, Forbes magazine, claims that wages aren’t increasing because “pent-up wage cuts didn’t happen” following the 2008 global economic meltdown and so poor downtrodden corporations have no choice but to keep wages from rising to make up for those cuts that should have been imposed. If only government policies wouldn’t interfere with the magic of the market, all would be well, Forbes asserts:

“To summarize, government regulation and policy are very much linked to the enduring presence of wage stickiness and slow wage growth since the Great Recession.”

There’s ideology, and then there’s the real world

You can even win a Nobel Prize for these beliefs. The Nobel Prize for economics isn’t actually a Nobel Prize (officially, it is an add-on called the “The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel”), but, still, it’s widely considered one and it’s the highest honor an economist can receive. It almost invariably goes to a conservative economist who upholds orthodox ideology. One recent recipient is Thomas Sargent. Although he formally received his prize for other work, Dr. Sargent is known for writings in which he argues that unemployment benefits are too generous, and if such benefits were reduced, there would be “incentive” for people to go back to work.

Here in the real world, there are many more candidates than jobs that pay a living wage, and unemployment benefits are insufficient to live on. Depending on the state, unemployment benefits amount to 30 to 50 percent of lost wages in the United States — hardly enough to live comfortably on, and it’s cut off after 26 weeks. British benefits are capped at £73.10, and it can be less if you have savings you have yet to tap. Nobody is living large on that amount.

Continental European unemployment coverage is better, and, interestingly, some of the countries with the highest levels of benefits, such as Denmark, Norway and Finland, have among the lowest unemployment rates, although those benefits have eroded in recent years. Nonetheless, social safety nets in general lead to unemployment, Dr. Sargent believes. In an interview with Swedish Television, he said workers ought to be prepared for having low unemployment compensation in order to get the right incentives to search for jobs.

“Sargent, with Swedish economist Lars Ljungqvist, found that high, long-lasting unemployment benefits in Europe have caused many European workers who lost their jobs to stay unemployed for years and, thereby, erode their human capital. This makes them less employable in the long run. The fact that the U.S. government extended unemployment benefits in many U.S. states to 99 weeks, said Sargent in the 2010 interview … ‘fills me with dread.’ ”

Those extended terms of unemployment have since been rescinded, so he can hopefully now sleep at night. Related to supposedly overly generous social safety nets, is the idea that working people stubbornly refuse to accept wage cuts. This is not entirely true, as the effects of the North American Free Trade Agreement demonstrate. NAFTA has caused a persistent decline in wages for displaced workers and manufacturers routinely threaten to shut down and/or move their facilities in response to unionization drives since NAFTA came into force. But, remember, we’re dealing with ideology here, not practical reality. Two years ago, the San Francisco branch of the Federal Reserve issued a report that blamed ongoing economic weakness on wages not falling enough. The paper claimed:

“One explanation for this pattern is the hesitancy of employers to reduce wages and the reluctance of workers to accept wage cuts, even during recessions, a behavior known as downward nominal wage rigidity.”

Cutting wages won’t be a panacea

Falling wages might provide a short-term boost to corporate profits, but the reduced purchasing power of working people would soon cause people to buy less. That is disastrous in advanced capitalist countries, where consumer spending generally accounts for anywhere from 60 to 70 percent of gross domestic product.

Lars Syll, a heterodox economist and self-described critic of market fundamentalism writing on the Real-World Economics Review Blog, put this plainly:

“The aggregate effects of wage cuts would, as shown by Keynes, be catastrophical. They would start a cumulative spiral of lower prices that would make the real debts of individuals and firms increase since the nominal debts wouldn’t be affected by the general price and wage decrease. In an economy that more and more has come to rest on increased debt and borrowing this would be the entrance-gate to a debt deflation crises with decreasing investments and higher unemployment. In short, it would make depression knock on the door.”

A food line in Toronto in 1931; falling wages didn’t work out during the Great Depression.

Falling wages were a reality during the Great Depression, but that didn’t help matters. By 1933 in the United States, manufacturing wages fell 34 percent and unemployment rose to about 25 percent. The Canadian economy contracted by more than 40 percent and unemployment reached 30 percent in 1933. Collapses in wages did not bring better times; only the massive government spending to wage World War II put an end to the Depression.

Moreover, already existing low wages come at a high cost. A 2015 study by the researchers at the University of California Berkeley Center for Labor Research and Education found that public benefits given to people who have jobs but can’t live on their meager wages cost the public more than $150 billion annually in the United States — more than half of total public-assistance spending by federal and state governments. Wal-Mart alone costs taxpayers an estimated $6 billion per year subsidizing the retailer’s low pay and paltry benefits at the same time it pays out similar amounts in dividends, half of which go to the Walton family.

Working harder for less

As all of you doing the jobs of two or three people at your place of employment have undoubtedly noticed, more work is not being rewarded with more pay. The average U.S. household earns about $18,000 less than it would had wages kept pace with productivity gains, and the average Canadian household is short at least $10,000 per year because of pay lagging productivity gains. Workers across Europe, including in Britain, Germany and Spain, have also seen pay lag productivity.

The upward flow of money not only causes more inequality but further concentrates power in the hands of plutocrats. As David Ruccio summarized in a separate Real-World Economics Review Blog post:

“If you put the two trends together—increased individual income inequality and increased corporate savings—what we’re witnessing then is increasing private control over the social surplus. Wealthy individuals and large corporations are able to capture and decide on their own what to do with the surplus, with all the social ramifications associated with their decisions to invest where and when they want—or not to invest, and thus to accumulate cash, repay debt, and repurchase their own equity shares.

And proposals to decrease tax rates for wealthy individuals and corporations will only increase that private control.”

And that is the context to keep in mind when one reads fairy tales such as this from the far right Mises Institute:

“Ending poverty and giving people additional income are praiseworthy goals, but there are no free lunches in this world. And trying to force prosperity through a minimum wage simply creates a whole host of negative and unintended consequences especially for those who are the most vulnerable.”

The value of the minimum wage in the U.S. is about two-thirds of what it was when it reached its inflation-adjusted peak in 1968. The Canadian minimum wage is worth about a dollar less than its peak in 1976. Australia’s minimum wage is well below what it was worth in 1985.

Even in these bare bottom-line terms, a higher minimum wage is hardly a “free lunch.” It is still less so when we realize that jobs don’t come from the great benevolence of bosses nor are profits conjured out of thin air by the genius of capitalists. Employers generate profits by paying employees much less than the value of what they produce. Increased exploitation through work speedups, increased workloads and benefits reductions mean that capitalists are taking a bigger share of the value of what you produce.

And here we come to the real meaning of “freedom” that capitalists and their publicists so love to extol. “Freedom” for industrialists and financiers is freedom to rule over, control and exploit others; “justice” is the unfettered ability to enjoy this freedom, a justice reflected in legal structures. Working people are “free” to compete in a race to the bottom set up by capitalists. The world’s central banks have printed and spent $8 trillion (€7.4 trillion) to buy bonds, mostly those issued by their own governments. Imagine what that spending could have done if that money had been given to people or used for productive social spending instead of a free lunch for financial speculators.