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On Paul Krugman's Howl, and Other Populist Proposals

Populist Reforms Are Only a Smokescreen

by Norman Madarasz

So now our globalizing, populist counterparts claim, like good Marxists, that capitalist is used to crises, which it always overcomes. Or, better yet, that capitalism is crisis. Shareholder capitalism– the postmodern economic fantasy– is meeting its moment of relativism.

As Alexander Cockburn wrote in CounterPunch (July 19, 2002): "Makes your blood boil, doesn’t it?" By which he was referring not to the brutal murder of five-year-old Samantha Runnion, whose picture of innocence captivated viewers of the CNN.com webpage throughout last week while the DJIA/S&P500/TSX bubble burst. Although the vapors released by the blow were already creeping up the dark alley in which CNN’s boss of bosses would soon be resigning and, finally, admitting to being under SEC investigation, her picture would not budge. By now it has become obvious that the sweetly locked child was kidnapped and murdered not once, but twice: once by her sick henchman, then by CNN and corporate media at large. America’s window on the world has its camera fixed in Warholian immobility, sentenced to filming life on Sordid Street, North America, while politics is sequestered from the people.

In the brewing stew of resentment against the sharp-eyed business slicks who ripped off its old-age pension, it isn’t just the wasted life of a child that’s being fed to the North American middle class. Executive decisions in the corporate-owned media are effective without always being explicit. Yet it is crystal clear that Samantha Runnion’s picture was cynically meant to distract and compel mounting outrage into some other site, just any other one, than the president’s dumb comment on the market now being good value, or the v.-p.’s arrogant self-righteous refusal to reveal his role as a prime profiteer of the gigantic defense budget. Beyond possible future indictment, what is also being played out in media pages is a populist cum patriotist take-over bid on reformist and progressive policies. For the first time since the late sixties, reform is seriously gripping the public mind, and populist leaders will have nothing of it.

MILITARISM IN THE NEWS

Throughout the nineties, the redundant liberal press moved fearfully away from politics and issues of reform. It draped the conservative restructuring of the government’s social obligations as progress, indeed as revolution. Their man stood in the 0-office, but nothing really changed from 1600 Pennsylvania Ave. to the Mall when it came to installing changes and living by the golden rules of abusive power. Whenever the water started scalding, Bill Clinton, like George Bush Sr., Ronald Reagan and every other American president down perhaps to James Madison, with the possible exception of FDR, took control of the corrupt circumstance by betraying the revolutionary principles on which the American republic was built. They each turned to cynical populism to assure the honorable legacy of their name, and prosperity of those who brought them to power.

And what is that populist pill prescribed to quell political heat? War. And there’s so sound resonating in the closed quarters of Washington these days more than the war huddle, which is only a euphemism for the need to divert the prospect of further House inquiries into that "corporate stuff".

There’s no better way of ensuring the required diversion than by sputtering news brief after news brief on war preparations– here and abroad. My generation came to political consciousness during the early years of Reaganism. We were primed on war: the threat from the USSR, primarily, but much more closely– absurdity of absurdities– from Nicaragua.

The war message was constant. Years later, should I have really been surprised by my gesture in 1983 while preparing my banner for a demonstration on disarmament to have symbolically stuck a cruise missile into Reagan and Andropov’s groin? What I was dreaming of was a world rid of militarism and the military murder of civilians. Yet Freud had always been a poor remedy for insufficient economic analyses. Spruced by the hyper-martial media ecology, the line between the dream of peace and the desire for war thins into a fine thread.

Two war fronts are hastily being prepared. Iraq, of course; or Iran, perhaps, if we are to judge by Sunday’s Bay of Tonkinesque maneuver against fishing boats in its territorial waters. And the Bush administration WILL wage war. As another 18 companies and/or banks are under investigation by the SEC, and stocks keep revealing their virtual and empty shells, it’ll take a little catharsis to cool the people down. Bush and the War Party, i.e. the ‘hawks’, will attack unilaterally, which means of course with Israel’s assistance, with or without Turkey’s aid (whose current political instability should not deter their all-powerful military from making airbases available to the US Air Force).

In fact, it is only a matter of time before the bombs start falling on Baghdad, as it is also only a matter of weeks before Bush and the House Republicans begin a downward spiral toward the fall elections. What with the Democrats most likely taking over the House later this year, litigation against the Executive branch of government may actually pick up steam– especially if it becomes a democrat’s campaign promise.

It has long been clear that under the impulsion of the Hawks, who have determined American foreign policy since last fall’s attacks, Bush’s only way out will be through war. "Al-Qods al-Arabi", the pan-Arabic newspaper published in London, reports on a meeting held on July 9 between twenty leading Iraqi dissidents in exile organized by the American Secretary of State in view of ousting the existing regime. They claim that the attack will take place no later than this fall, even though the Americans have not managed to rally all major Iraqi democratic forces. As the stakes behind Bush’s honor gain center stage, the times will truly become dangerous ones, for there is much foreign doubt as to the American Armed Forces’ capacity to conquer Iraq.

The other war front is home security. On Sunday July 22, on "Meet the Press" Tom Ridge cranked up fears even further with the hypnotically repeated claim that al-Quaeda is planning a nuclear attack on U.S. soil. No details of dirty bombs on Chicago thugs: just a nuclear attack. From Latin America, citizens look on scandalized at the way the Administration is waging this war on the Home Front. Awareness has grown that America is not exempt from the political repression it has sponsored elsewhere. For as the N.Y. Times reported on Saturday July 20, in an update on measures taken in Washington to pass reform on accounting practices, the financial crimes <S.W.A.T>. task force meant to clean up corporate malfeasance is really nothing more than a pilot project for a bad rerun in a perpetual return that the president might already be living out again through the bottle. As Frank Rich reported, "it exists mainly on paper, as a cutely named entity with no real assets. It calls for no new employees or funds and won’t even gain new F.B.I. agents to replace those whom the bureau reassigned from white-collar crime to counterterrorism after Sept. 11."

There is nothing being done to soothe the markets, while the administration plans to deploy the army to assist in policing. As far as the president seems to be concerned about the markets, he could care less. To the president’s credit, nor does the Senate seem interested in any accounting reforms other than a smoke screen sure to be rejected by the lower house. Furthermore, Warren E. Buffet reports that clans of CEOs, reduced to a few bad apples on the TV screen, continue to funnel shareholders’ money to lobby the House against accounting reforms making options a company expense.

There have been no major white-collar crime cases in the U.S.– or in Canada, its northern copy in this matter– over the past fifteen years that has succeeded in throwing a single corporate crook in jail: let alone forcing him to dump his shell-company tax haven accounts into the pension funds from which he stole. And the financial press keeps defending allegedly corrupt executives through the worse moments, asking, as did Matthew Ingham from The Globe and Mail: what will it solve if CEO’s are sent to jail?

POPULIST PROPOSALS ARE ONLY
A SMOKE SCREEN TO DEEP REFORM

Two wars, then, on two opposite fronts make it much safer for the North American middle class to choose populist diffusion over progressive reform. Populism loves the scapegoat. Reveling on blood, it is ready to hit hard against the unlucky bastards (Arthur Andersen?) who have confirmed the laws of human nature.

Allow me to point out that the progressive community, from a constructively critical point of view, has always known there is no such thing as human nature. Greed is a matter of circumstance and of condition. Populist choosing is a function of force and, much more efficiently, government propaganda (or information, since in North America propaganda is only what the other side does). Then there is progressive thought’s recently renewed discovery. Human nature is something whose construction is best hid by cushy humanities grants awarded with the disclaimer: all theory must recall the hand that feeds. That hand says, there IS such a thing as human nature, and it IS greedy. What’s more, there’s not a damned thing in hell any one can do to change it.

Anyone who has bothered opening a book of philosophy knows that’s a lie. Progressives and some liberals fought in the nineties to keep the population alert at the fiction of deregulating the economy and downsizing government. In early twenty-first century English North America, one does not have to strive for socialism in the hopes of building a more equitable society: being a principled capitalist today is as radical a proposal to take as being communist was in the past. That’s because there is little if any thing capitalist about the way both the Democrats and Republics have turned the economy to their limited self-interest.

While humming the mantra of small government, the House and Executive have shifted public funds to the contracts pressed upon them by big business lobby groups (i.e. scarcely camouflaged former House Representatives and Senators). High paid think tanks have been handsomely financed to tailor the transactions to a capitalist cut. Strip away social plans, but just don’t say it’s the lower and middle classes who can’t make up for lost services. Deregulate industry, but just don’t say that it’s workers who are forbidden to organize for their rights, in terms of salary, job security and safety as their executive managers pocket the exponential growth on options now known throughout the American establishment as the option to sell your life away. Especially, as all think tankers are such pious members of various churches, renew the line that kept Christendom going for two millennia: strive for the best and most honest life, and the free market will redeem you — when you’re dead!

With every extinct social, artistic and health measure or program, what many progressives failed to see was what unsavory institutions were also listed under the social program heading. Police, or at least policing, is part of the crew, as is especially police trained to fight and indict white-collar crime. Canada started to face that realization a half decade ago as a string of corporate-related crimes emerged, involving members of the federal cabinet and high-profile lobby groups (basically staffed with former cabinet members) in illegal commissions for astonishingly large state contracts in the transport industry, which in Canada also designates the military. As those under investigation caught sight of the legal agitation through their counterparts’ leaks, the sums for which they threatened to sue the government prevented most police work from continuing, and most white-collar policing jobs from existing. With a police department already under-budgeted, is it really any wonder why a commissioner decides to turn his bright minds to busting massage parlor hookers and cottage country pot smokers, instead of checked-collared corporate criminals? Liberals didn’t seem to pay much heed to matters as complexly twisted as those. It was far easier flinging missiles at Milosevich.

What else can one answer to Mr. Andrew Grove, Chairman of Intel, who lamented in an op-ed piece published by the Washington Post of the generalized damning of CEOs and CFOS as he glorifies the America that gave him the chance his native Communist Hungary had only stifled? My own parents fled from political repression in Communist Hungary, though they quickly noticed that the changing of the guard in 1989 made a lot of people rich only at the expense of an increasingly impoverished middle class. By a fine brush stroke in the art of business ethics, Mr. Grove merely seems to be protecting his own reputation, for what he says of the corporate classes is so contemptuously dismissive as to be quite untrue: "Other honest, hard-working and capable business leaders feel similarly demoralized by a political climate that has declared open season on corporate executives and has let the faults, however egregious, of a few taint the public perception of all." Who is chasing after scape goats here, the public or corporate executives themselves?

There is systemic corruption in American finance and business. The public is only now discovering how long this system has been in place. Notwithstanding Grove’s brilliance, men of his ilk must be damning the university classes they never took on Hegel, Nietszche and historical returns. Because Soviet-styled state socialist practices are being revealed as having co-opted American big business’ competitive principles, at least since the late seventies. Yet hasn’t the honest CEO and CFO all along been arguing that there IS a free market, that there’s NO favoritism, that mergers do NOT spell monopolies. After so much lecturing, Mr. Grove would do well to encourage "systemic solutions" from workers, instead from the very managers who have led the system astray, educated as they were in leading business schools to do so as creative improvs and interpretations.

Our past is being rewritten. All the honest CEO has to offer is a choice between a Stalinist or Orwellian version.

CAPITALIST PROGRESS AND EVOLUTION

Surely now, North American state capitalism has benefited the population greatly. Yet as the rest of the world has suffered increasingly, is globalization a lie then, or a utopia? Wasn’t the American population primed on the idea that their work would help others live better, as figures kept contradicting faith? Or was it simply that globalization was a dead ringer since it also punished them as labor fled to countries that were paying lower wages?

There are parameters by which to measure affluence. In today’s world they can no longer be limited by national borders. Was it the case that the realists really new from the start that only the richest countries would vanquish, as the up-start Asian Tigers sat crossed legged with their jaws clamped wondering where the riches had flown?

In this globalized world, in which the U.S.A. had been the only economic and military superpower, never has a generation of young people failed so badly to learn other languages like 1990’s "Hip-Hop Generation" and "Generation X" did with triumphalist English. The largest class of educated individuals in the world spat on language studies, and consequently, on what their "partners" were saying in their native French, Japanese and Spanish, the languages of our closest allies after all, let alone in Russian and Arabic. North-Americans read their management gurus and self-help pathos as foreign executives desperately tried to catch up by hiring language consultants to teach them everything from perfect American English to Anglo-American pop culture, history and philosophy.

Which is why an economy skeptic like Paul Krugman uttered a cry in May. Finalizing two highly visionary and committed articles on the urgent need for accounting reform in the unsolved wake of Enron, just as the whole "corporate stuff" was about to implode the stock market, he ended by lamenting with a gloomy, pathetic: "who will save America". Krugman may have become internationally recognized as the Bush Administration’s staunchest critic. His violent partisan attacks, however, are only the flipside of his faith in populism.

Krugman knows that the only reason the American middle class rides in slick cars, drives on well-paved roads, is surrounded and determined by high-technology, and is able to work at full-employment levels despite, or in spite of, its reduced purchasing power, is because other countries and hedge funds invest massively in the American economy when it has waxed stable. The North American economy, like most others, relies on financing for its riches, not production. That’s fine as long as big money is being invested here. Apart from its exponential trade deficit, the U.S.A. has largely gained by selling its currency at astonishing exchange rates. This is why it is foolish for Americans to equate the foreign (and local) desire to invest locally as due either due to democracy, which has absolutely nothing to do with capitalism, or to American military might. To be sure, both of these factors lend illusion to the reality of economic stability. Which is why Krugman leapt on a valuable economic history lesson when pointing out the collapse of Suharto’s Indonesia. Pauperized in a matter of weeks following the economic collapse of the Asian tigers in the fall of 1997, Indonesia was a miracle of pure finance, concentrated in the dictator’s clan.

Still, Krugman’s last words on salvation are a strong reminder of his politically self-interested pedigree. The political language for that is populist damning of extra-parliamentary reform. A post-modern Machiavellian, recall that Krugman also denounced the anti-globalization movement as fanatics while the Canadian State unleashed full repression in Quebec City last year, as he also tainted the progressive intellectual French group ATTAC as "extremists". At the World Social Forum in Porto Alegre, Brazil, ATTAC proved that NGO’s do succeed in pressuring the repressive World system (basically the Bretton-Woods institutions) to answer solid and rigorous criticism from skilled professionals who have not sold their ideals to historical fatalism. With Krugman’s tough talk, it becomes possible to "ignore the politics and look at the situation objectively", as he coolly invited his readers on Tuesday morning. Unless, of course, your only choice is the passion play between Democrats and Republicans. Reducing that choice to the only game in town is the populist’s favorite backstroke.

What the current financial crisis may end up provoking is the rising awareness among American consumers that they are indeed part of a political collective. By politics, I obviously don’t mean the two-party trade-off the political and corporate classes profess to be democracy. Politics really means awareness of the class stakes being fought over through the institution of representational bodies, and the attempts made by the upper classes to flatten greater distribution of services and wealth. As it does to establish the international effects as analytic parameters for evaluation whether an economic system is functioning as a productive, and not only a financial system. So the U.S. hasn’t done that bad for a state-capitalist pseudo-democracy? With its GDP topping the international scale, its relative purchasing power parity ranks low in comparison, without even mentioning the worrisome projection of 4% for the median Consumer Index, most often pointed to as the best predictive measure for the economy.

All of this means that the distributed wealth of American society is only a drop of what it could be with true political leadership. Instead, North America has been granted a stand in for the corporate take-over of civil society and industry. Even as staunch a Republican ideologue as Kevin Phillips argues angrily in Wealth and Democracy how both democracy and the economy have been usurped by a small plutocracy of corporate lords, i.e. an "overclass". Once the American consumer witnesses his and her savings stolen by the very state they had believed was enshrining them with individuality, even the sacredness of American individualism can grow into a myth.

There has been no greater opportunity since the late 1960s to think again what democracy means in a country in which barely 50% vote, and of that 50% the proportion is significantly higher in the upper classes than in the middle and lower ones. This is not a question of politics only being acted upon by the educated. It’s a question of political control being cast by those who hold the reigns of economic power, and who, furthermore, will do everything in their power to hide the process and mechanism behind the way control works. The key to that has obviously been the corporate take over of the media, opening the gates, in Phillips’ words, to "the submergence of politics in today’s money culture." Did CEOs really believe they would be kings for more than a day?

That’s where populism comes in, and that’s what populism is meant to do at critical moments: distract and focus on war. Yeah, we should have flattened ‘Nam into a massive parking lot, just like we’ve got to blow Iraq back into the Middle Ages. Whether the USA could afford to continue depleting its gold reserves in fighting the Vietnamese while the economies of Germany and Japan were turning over yearly surpluses, remains a point the hawks do not like to face.

As for Iraq, (or Iran), the irony is of course that the "Middle Ages" for Europe was the time during which Baghdad excelled as the center of the civilized world. And it had been that center not for 100 years, but something closer to 400 years until it was run over by Genghis Kahn’s nomadic war machine in the thirteenth century. Meanwhile back in Western Europe, feudalism ruled with no signs of change, devoid of science and press. Freedom of research and thought was burnt at the stake by the brutal Inquisition waged upon believers by its own Church. Faced with the populist cum patriotist euphoria of war, September’s attack on the gleaming twins and twilit geometric marshal star should stand as reminders of the enormous risks to which the American political and business overclass is willing to put the American people when the primary interest rate of their business ethics is to keep justice at bay.

On Monday morning, North America woke up to shareholder capitalism’s fall. Not even a day had passed after WorldCom filed for bankruptcy that the US Telecom Association was already soliciting the FCC to allow it to pass the bankruptcy cost down to the consumer. In the letter he sent to the FCC, Michael Powell, president of the Association, claimed that it was necessary to keep WorldCom’s fall from destabilizing the entire telecommunications industry. After executives stripped the base upon which small investors’ pension savings rested, now the small consumer will have to pay for being so awfully shortsighted.

Up-keeper, savior and bailiff of the economy all at once, the consumer is especially its political pawn. It’s something like the get-rich principle from options that executives have used to creating fake profits. Just that for the small guy, the opposite rule applies: meet the get-poor principle. It’s what entire classes get when fighting conservatism only by populism, which is no better than nothing. Until the North-American middle and lower classes accept progressive challenges waged on an international scale, we may as well just accept the current scenario as simply another story among the tales spun in the name of North-American shareholder capitalism. Critical analyses of overclass dominance of the economy in the North American context will not, however, be satisfied with cultural fictions.

Norman Madarasz is a Canadian philosopher, and political and economic analyst. He writes from Rio de Janeiro, and welcomes comments at normanmadarasz@hotmail.com