Chomsky on the only American political party: The Business Party
Editor’s Note: When harmful beliefs plague a population, you can bet that the 1% is benefiting. This article is the first in a new AlterNet series, “Capitalism Unmasked,” edited by Lynn Parramore and produced in partnership with author Douglas Smith and Econ4 to expose the myths and lies of unbridled capitalism and show the way to a better future.
Summer 2009. Unemployment is soaring. Across America, millions of terrified people are facing foreclosure and getting kicked to the curb. Meanwhile in sunny California, the hotel-heiress Paris Hilton is investing $350,000 of her $100 million fortune in a two-story house for her dogs. A Pepto Bismol-colored replica of Paris’ own Beverly Hills home, the backyard doghouse provides her precious pooches with two floors of luxury living, complete with abundant closet space and central air.
By the standards of America’s rich these days, Paris’ dogs are roughing it. In a 2006 article, Vanity Fair’s Nina Munk described the luxe residences of America’s new financial elite. Compared with the 2,405 square feet of the average new American home, the abodes of Greenwich Connecticut hedge-fund managers clock in at 15,000 square feet, about the size of a typical industrial warehouse. Many come with pool houses of over 3,000 square feet.
The Romneys claimed a $77,000 loss on their taxes in 2010 (as a deductible) for the feeding and upkeep of their fancy horse. Meanwhile, the median household income in the United States in 2010 was $45,800.
Obama is far from perfect, but do you really think a guy who made $21,600,000 in 2010, has a car elevator in his beach house, spends 77K on horse, and recommends that young people “borrow money from their parents to start a business/go to college” is going to give two shits about or remotely understand what working and middle class Americans are going through?
Some unknown but alarming number of ultra-rich Americans are now basically totally delusional and completely divorced from reality. This is now an inescapable fact, confirmed by multiple media accounts of billionaire thought and an entire special issue of the New York Times Magazine.
Here’s a brief list of insane things that are apparently common knowledge among the billionaire class:
There can be no reasoning with people this irrational. Any attempt to do so will fail, as Barack Obama, whose main goal is to maintain, not upend, the system that made these people so disgustingly wealthy, is learning. It’s growing harder and harder to pretend that the fantastically wealthy have a sophisticated understanding of politics — or math, or economics, or cause-and-effect.
The Times Magazine has the story of the Obama campaign’s difficulty in matching its record 2008 contributions from the finance sector. It contains this now surely infamous passage, a true marvel of that classic rich guy cocktail of self-pity mixed with self-regard:
One of the guests raised his hand; he knew how to solve the problem. The president had won plaudits for his speech on race during the last campaign, the guest noted. It was a soaring address that acknowledged white resentment and urged national unity. What if Obama gave a similarly healing speech about class and inequality? What if he urged an end to attacks on the rich? Around the table, some people shook their heads in disbelief.
The problem with inequality in America, you see, is apparently that it has led to rhetorical attacks on the winners of the class war. Greg Sargent wrote, in response to this story: “One wonders if there is anything Obama could say to make these people happy, short of declaring that rampant inequality is a good thing, in that it affirms the talent and industriousness of the deserving super rich.”
I’m not sure even that would help, because there is already another presidential candidate who likely believes that. In the same issue of the Times Magazine, we have the story of Edward Conard, a retired Bain Capital executive who is about to release a book (presumably against the wishes of his friend and former colleague Mitt Romney) arguing “aggressively” that massive wealth disparity is an unalloyed Good Thing. In fact, Conard thinks “the wealth concentrated at the top should be twice as large.” (Paul Krugman does not think much of his argument.)
Conard also detests charitable giving and has developed a statistical method for finding a spouse, because he is a sociopath. Because he is very wealthy, he is very used to his ideas being taken seriously — even economists offer him (qualified) praise. He is utterly convinced that his book will convince every serious person that wealthy finance industry titans not only deserve their wealth, but make society a better place for all. He has basically taken what is a gut feeling among his class and turned it into a philosophy and an argument.
Perhaps the most persuasive argument — for Republicans — for nominating Mitt Romney was that he is of this class. The fact that he is more comfortable in a boardroom than a Pizza Ranch is actually a major asset, because the Democrats had, since the Clinton years, gradually won over much of Wall Street, helping them to erode the GOP’s massive Reagan-era fundraising advantages. Romney can win that money back. Our friend Ed Conard even created a shell corporation for the sole purpose of secretly donating $1 million to Romney’s super PAC. The Sunlight Foundation shows in Figure 5 here that the share of finance money going to Democrats skyrocketed during Clinton’s first term, and rose again in 2008. Clinton rewarded his super-rich donors with extensive deregulation — and they rewarded him by shifting the majority of their donations back to the GOP. (Finance, naturally, likes to chase winners: They give more to whichever party seems to be on the upswing, as Obama learned in 2010 and will learn again this year.)
They are one of those industries that is used to getting exactly what it always wants from Washington, because they essentially own both parties. (As opposed to say, oil and gas, ally of Republicans, or the entertainment industry, ally of Democrats.) So Dodd-Frank made them very, very mad. But not just mad: Confused, hurt, betrayed. There is a psychosocial element to the response, clearly on display in the story of the rich people who wish for a speech about how they are not evil. They are essentially spoiled children who have just been lightly reprimanded for the first time that they can remember.
Obama has not been remotely unkind to Wall Street, even as he’s grudgingly adopted a slightly more leftist tone. The grotesque nature of our campaign finance system has effectively made economic populism impossible. Even populist rhetoric not backed up by any sort of action is apparently hurtful to these masters of the universe.
But Conard is wrong. The rich are not intrinsically more virtuous or hardworking than the masses. They are also, decidedly, not any smarter. And they receive their news, and their political opinions, from the exact same organs as everyone else. They may be more likely to read the Wall Street Journal than the New York Post, but both of those Murdoch-owned newspapers carry similar lies on their editorial pages. In other words, they actually believe their bullshit. They honestly believe that mean Democrats invented “Occupy Wall Street” in order to make them scapegoats for a crisis that they feel no responsibility for. People who are in the business of extracting fees and interest from consumers, or moving rich people’s money around, unironically think of themselves as “job creators.”
The result of their last few decades of job creation has been the decoupling of productivity grown from wage growth and skyrocketing compensation for CEOs and finance industry workers.
But appeals to logic, history and common sense will not get you far with a roomful of very rich guys who feel paranoid and victimized. The Wall Street types asked to become Obama donors wanted assurances that the president would not criticize his opponent’s finance industry record. It’s not enough that they’re ridiculously wealthy: They wish to be utterly above criticism. That’s the most important thing to remember: These people, the .01 percent, are mostly childish idiots. Idiot children have now accumulated all of the nation’s wealth and they are terrified that someone might try to take some of it away.
Alex Pareene writes about politics for Salon and is the author of “The Rude Guide to Mitt.” Email him at firstname.lastname@example.org and follow him on Twitter @pareene
When Craig Dubow resigned as CEO of the nation’s largest newspaper conglomerate amid health problems last year, he ended a six-year stint that “was, by most accounts, a disaster.” Gannett, the parent company of the USA Today and 80 other American newspapers, had seen its revenue plummet $1.7 billion and its stock price fall 86 percent, from $72 a share to just over $10.
To counter those losses, Gannett shed jobs, and a lot of them. Industry estimates say the company has laid off at least 20,000 workers since 2005, reducing its workforce from 52,000 to roughly 32,000. Despite those losses, Gannett awarded Dubow a severance package worth $32 million, NPR reports:
Dubow’s final compensation package includes $12.8 million in retirement benefits, $6.2 million in disability benefits and a $5.9 million severance payment, according to the filing. Gannett stock options and restricted stock, which Dubow had accrued during his years of employment with the company, were also part of the package. Those stock awards are valued at nearly $7 million.
Separately, Gannett will pay $25,000 to $50,000 annually for a $6.2 million life insurance policy covering Dubow and another $70,000 annually for benefits such as health insurance, home computer and secretarial assistance and financial counseling. He will receive most of these benefits for three years unless he goes to work for a competitor, according to the filing.
The lavish severance package Gannett is giving Dubow stands in stark contrast with how it treated many of the 20,000 employees it let go. After giving severance packages to employees during early rounds of layoffs (a common industry practice), Gannett decided in 2009 that it would no longer offer such packages, instead paying supplemental unemployment benefits that shifted most of the costs to states. At the time, Gannett claimed the decision would help many employees get more than they would from severance. But for those who worked or freelanced at other jobs, that meant they’d get much less — and perhaps nothing at all.
“Craig championed our consumers and their ever-changing needs for news and information,” the chair of Gannett’s board of directors said when his retirement was announced in October. The question, as former reporter Peter Lewis asked at the time, is how exactly Dubow served consumers or his employees. “They laid off journalists. They cut the pay of those who remained, while demanding that they work longer hours. They closed news bureaus. They slashed newsroom budgets,” Lewis wrote on his blog. “As revenue fell, and stock prices tanked, and product quality deteriorated, they rewarded themselves huge pay raises and bonuses.”
AMAZING article from Common Dreams. Click the link!
..It depends, for instance, on worker organization. When workers are organized, they’re better able to fight for higher wages and to represent their interests in the political sphere. When workers are disorganized, capitalists can easily “capture the state” and use it to make laws that rig the game in their favor. The more control over government that capitalists achieve, the worse the rigging and the greater the inequality that results.
Inequality also depends on capitalist organization. An internally cohesive capitalist class is more powerful than a factionalized one. The worst situation is when capitalists are united and workers are divided. That’s when we’re likely to see runaway inequality.
In the United States, inequality has waxed and waned as a result of these factors. When the working class has been well organized, when the demand for skilled labor has been high, when the economy has been expanding, and when immigration policy and trade laws protected U.S. workers from exploitation on a Third-World scale, inequality has decreased. The period from about 1945 to 1970 fits this pattern. Because less inequality means less wealth for capitalists, capitalists fight back. That’s what we’ve seen in the period from about 1970 to today.
Extreme economic inequality in U.S. society is indeed beginning to generate widespread discontent. But some economists and sociologists have argued that the last 30 years of capitalist ascendancy have brought us to something other than a routine tide-turning moment. What these last decades have brought us to, or rather gotten us into, they say, is an inequality trap — a situation in which capitalists are so far ahead that it may be nearly impossible to turn things around without fundamental change.
The kind of inequality trap in which we find ourselves has a number of parts. One is the nearly complete capitalist capture of the state. As capitalists and their elite agents — think here of the richest 1% — have accumulated more and more wealth, their ability to control elections and policy-making has grown enormously. This has yielded not only an economic game hugely rigged in favor of capitalists, but the squeezing-out of populist opposition in government. It’s no surprise, then, that many people have lost hope in mainstream electoral politics, and thus refuse to participate in what seems like a sham. Under these conditions, capitalist dominance is more or less ensured and inequality is locked in.
A second part of the inequality trap is the destruction or co-optation of institutions that once inspired dissent and built solidarity among the working class. I am referring principally to unions. Despite their all-too-human failings, unions once brought working people together to fight for their interests. Capitalists know this, which is why they have devoted so much effort over the last 30 years to crushing unions in the private sector and are now doing it in the public sector. As unions have been weakened, the inequality trap has closed all the more tightly.
Another part of the inequality trap, alluded to earlier, is the ability of capitalists in the U.S. to draw on a worldwide labor pool. The international “free trade” laws that make this possible undercut the ability of workers in the U.S. to demand better wages. Which means that many workers in the U.S. feel that resisting capitalist demands is pointless, because if these demands aren’t met, capitalists will just move overseas. Workers here are thus stuck in a situation of worsening inequality, while capitalists enjoy a new freedom to roam the globe in search of cheaper labor and higher profits.
We need to tax financial transactions and wealth itself. We need to tax income and capital gains over $400,000 a year at a 90% rate. We need to use the money to create a democratically controlled central bank to fund cooperative work enterprises. We need to create a public jobs program so that everyone who is willing and able to work can have a meaningful job at a living wage. We need to at least double the minimum wage and set a maximum wage.
And, while we’re at it, we need to establish a national health service, so no one goes broke trying to pay for medical care. We also need to abolish tuition at public universities, so that every qualified student can get as much education as he or she wants.
In the meantime, finding that peaceful way will depend on facing the gloomy reality of our current predicament. To get out of the inequality trap, we must first see that we’re in it. If there is a solution, perhaps it will be found by refusing to believe that what is necessary is impossible. That refusal will also be a step toward escaping the larger inequality trap called capitalism.
6 people have the equivalent wealth of 30% of the population, or 93,000,000 people. They did nothing to earn that money, other than being related to Sam Walton. All they’ve done is ensure that Wal-Mart keeps a culture of poverty wages, union busting, unpaid overtime, and sexism. Aside from paying low wages here, they ramp up the race to the bottom by filling their store with products made with near slave labor from China.
Click the link for some Rachel Maddow goodness via MoveOn.org
Dear politicians, Reaganomics doesn’t work. All it seems to do is perpetuate class privilege.
“By emphasizing the influence of family background, the studies not only challenge American identity but speak to the debate about inequality. Wile liberals often complain that the United States has unusually large income gaps, many conservatives have argued that the system is fair because mobility is especially high, too: everyone can climb the ladder. Now the evidence suggests that America is not only less equal, but also less mobile.”
“The United States is also less unionized than many of its peers, which may lower wages among the least skilled, and has public health problems, like obesity and diabetes, which can limit education and employment.”
Labor law reform, universal healthcare, and path to socialist democracy needed.