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“Couple a multi-state disaster of Katrina’s magnitude, (including some of the poorer and less well-governed states in the union), add on a dysfunctional federal bureaucracy that had deteriorated in recent years, and a chief executive whose motto seemed to be, until yesterday, the buck stops there, and we get a helluva mess.”
–Richard Murray, Houston-based public policy expert quoted in the Washington Post
“The worst storm in our history proved perfect for exposing this president because in one big blast it illuminated all his failings: the rampant cronyism, the empty sloganeering of ‘compassionate conservatism,’ the lack of concern for the ‘underprivileged’ his mother condescended to at the Astrodome, the reckless lack of planning for all government operations except tax cuts, the use of spin and photo-ops to camouflage failure and to substitute for action.”
–Frank Rich, NY Times
Describing the President’s panicked political response to his falling poll numbers as “compassionate conservatism”, (as New York Times columnist David Brooks did last Sunday, “A Bushian Laboratory”, September 18, 2005), borders on the ludicrous. Mr Bush has now overseen the fastest increase in domestic spending of any president in recent history. Furthermore, he has never resolved the inherent contradiction between his so-called “compassionate” spending policy and his small-government tax policy (which was ostensibly designed to “kill the beast” of Big Government once and for all, according to the President’s conservative apologists). And his casual dismissal of the remnants of civilian authority in the Gulf basin – “It is now clear that a challenge on this scale requires greater federal authority and a broader role for the armed forces — the institution of our government most capable of massive logistical operations on a moment’s notice” – evokes something more along the lines of Mussolini-style fascism than any coherent, mainstream conservative, philosophy.
Hurricane Katrina is only the latest example of the President’s extraordinary fiscal largesse – this time, borrowing hundreds of billions of dollars under the guise of “clear[ing] away the legacy of inequality.” Sixty-two billion dollars has already been appropriated in the storm’s aftermath, but total spending on hurricane relief could hit $200bn before all is said and done. This for an area in which a substantial proportion of people are unlikely to return. Occurring so late in the fiscal year, the hurricane will have little effect on federal spending in 2005, when the deficit is forecast to come in around $330bn, but the 2006 deficit is looking likely to hit the $450bn mark. No wonder the gold price hit a fresh 17-year high last week.
Not even the most liberal social engineers would dare to have been as bold as the Bush administration. The President gives no accounting of how the money will be found. His governing philosophy appears to be: “It’s going to cost whatever it’s going to cost” in contrast to the vision of “focused and effective and energetic government”, David Brooks imputes to him. Mr Bush has left the oversight in the hands of his political operative, Karl Rove, suggesting that this a major PR exercise, rather than (per Brooks) “a positive use of government that is neither big government liberalism nor antigovernment libertarianism”.
For all of the talk of the President’s radical foreign policy, an even more remarkable metamorphosis has taken place domestically: The Republican Party has come full circle from, “Government is not the solution to our problem; government is the problem” to an acceptance of the primacy of government responsibility for all things. The man elected ostensibly to curb the excesses of the “spendthrift Democrats” has presided over an expansion the likes of which put FDR and LBJ to shame. According to the Heritage Foundation (not exactly a liberal propagandist), the rebuilding effort in New Orleans follows a 33 percent expansion of the federal government since 2001, a period that saw:
* The 2001 No Child Behind Act, the most expensive education bill in American history, which led to a 100 percent increase in education spending;
* The 2002 Farm Security and Rural Investment Act, the most expensive farm bill in American history;
* The 2003 Medicare Modernization Act, the most expensive Great Society expansion in history;
* A war in and the rebuilding of Iraq that, while justified, could cost between $300 and $600 billion, in total;
* International spending leap 94 percent;
* Housing and Commerce spending surge 86 percent;
* Community and regional development spending jump 71 percent;
* Health research spending increase 61 percent;
* Veterans’ spending increase 51 percent; and
* The number of annual pork projects leap from 6,000 to 14,000
This from a Federal government, which has hitherto shown a singular inability to conduct an evacuation and relief effort properly, but is now expected to lead the way in reconstructing New Orleans, a city in which the school system is virtually bankrupt and racked by corruption (the U.S. Education Department reported in February that $70-million in federal funds for low-income students had been misspent or could not be accounted for), presumably to be part-administered by a mayor whose stunning failure to mobilize resources to evacuate car-less residents and hospital patients – despite warning signals from the city’s botched response to the threat of Hurricane Ivan in September 2004 – demonstrates that ineptitude extends to all levels of government.
What a change in course from just a mere year ago when the administration pressured Congress to cut $71 million from the budget of the Army Corps’ New Orleans district despite warnings of the epic hurricane seasons close at hand. In fact, during the early stages of the Bush Presidency, then director of FEMA, former Bush campaign manager Joe M. Allbaugh, (now a lobbyist for Kellogg Brown & Root Services, a subsidiary of Halliburton), decried disaster assistance as “an oversized entitlement program” and urged Americans to rely more upon the Salvation Army and other faith-based groups.
The reality today is that there remains a fundamental contradiction between the planned Gulf Opportunity Zone approach (is there a Wizard of GOZ?) which rhetorically fits the Ownership Society theme of this Administration, and the actual botched dirigiste response to date, which further begs the question: what good has all that money dropped into homeland security done if the government cannot execute natural disaster relief effectively? So much for a consistent governing philosophy!
To be fair, one element of consistency has always been evident during the Bush Presidency: that of cronyism. Within days of this disaster striking, Halliburton was awarded a Navy contract for repairing naval installations. This company’s ongoing involvement in the operations of the US Federal government is nothing new, but it is not the only beneficiary from the latest example of “compassionate conservatism”. Many other Bush-allied companies that have performed so well in the field of Iraqi “reconstruction” are getting the lion’s share of new no-bid contracts, while smaller, local businesses (which arguably have a far greater stake in the economic survival in the region) are essentially being locked out of the rebuilding effort. According to the St. Louis Post Dispatch,
“Tom Cason, president of Kingston Environmental Services in Kansas City, said his company had plenty of experience in hauling away contaminated soil and water. He even has a business license in Louisiana for his line of work.
But thus far, his calls and e-mails ‘have gone into a black hole somewhere,’ he said.
Coz Passalacqua, 63, who runs Golden Eagle Marine Services in Rolla, Mo., says he has the equipment to salvage boats as long as 60 feet damaged or destroyed in the storm.But, he added, ‘I’m not hearing anything at all, and I figure that it’s gotten too late.'”
Among the other recipients who did hear from the Bush administration were California-based Fluor Corp., which has contributed more than $800,000 to political campaigns this decade, about three-fourths of it to the GOP, the Shaw Group Inc. of Louisiana, (another client of consultant Joe Allbaugh), and Kellogg.
President Bush’s “compassionate conservatism” appears neither particularly compassionate, nor conservative (nor particularly efficient: with all of the reconstruction work largely conducted via contractors and sub-contractors, it is difficult to see how the government will effectively monitor the funds provided for this exercise). But it does reward political loyalty.
If Halliburton et al actually provided value for money for the American taxpayer, it would be one thing. The reality is quite different: Henry Waxman, a Democrat and the ranking minority member on the House of Representatives Committee on Government Reform has uncovered evidence that Vice President Cheney’s former company was being grossly overpaid by the American occupation authorities for the petrol it was importing into Iraq from Kuwait, at a profit of more than $150 million. Waxman and his assistants found, for example, that Halliburton was charging $2.64 a gallon for petrol for Iraqi civilians, while American forces were importing the same fuel for $1.57 a gallon.
The reconstruction of Louisiana, Mississippi, and Alabama provides a fascinating picture of how the Bush administration actually works. His government represents an odd melding of corporatism and cronyism, more in tune with the workings of 1930s Italy or Spain. In fact, if one looks at fascist regimes of the 20th century, it is appears that the Bush administration draws more from these sources than traditional conservatism. Dr. Lawrence Britt has examined the fascist regimes of Hitler (Germany), Mussolini (Italy), Franco (Spain), Suharto (Indonesia) and several Latin American regimes. Britt found 14 defining characteristics common to each:
1. Powerful and Continuing Nationalism – Fascist regimes tend to make constant use of patriotic mottos, slogans, symbols, songs, and other paraphernalia. Flags are seen everywhere, as are flag symbols on clothing and in public displays.
2. Disdain for the Recognition of Human Rights – Because of fear of enemies and the need for security, the people in fascist regimes are persuaded that human rights can be ignored in certain cases because of “need.” The people tend to look the other way or even approve of torture, summary executions, assassinations, long incarcerations of prisoners, etc.
3. Identification of Enemies/Scapegoats as a Unifying Cause – The people are rallied into a unifying patriotic frenzy over the need to eliminate a perceived common threat or foe: racial, ethnic or religious minorities; liberals; communists; socialists, terrorists, etc.
4. Supremacy of the Military – Even when there are widespread domestic problems, the military is given a disproportionate amount of government funding, and the domestic agenda is neglected. Soldiers and military service are glamorized.
5. Rampant Sexism – The governments of fascist nations tend to be almost exclusively male-dominated. Under fascist regimes, traditional gender roles are made more rigid. Divorce, abortion and homosexuality are suppressed and the state is represented as the ultimate guardian of the family institution.
6. Controlled Mass Media – Sometimes to media is directly controlled by the government, but in other cases, the media is indirectly controlled by government regulation, or sympathetic media spokespeople and executives. Censorship, especially in war time, is very common.
7. Obsession with National Security – Fear is used as a motivational tool by the government over the masses.
8. Religion and Government are intertwined – Governments in fascist nations tend to use the most common religion in the nation as a tool to manipulate public opinion. Religious rhetoric and terminology is common from government leaders, even when the major tenets of the religion are diametrically opposed to the government’s policies or actions.
9. Corporate Power is protected – The industrial and business aristocracy of a fascist nation often are the ones who put the government leaders into power, creating a mutually beneficial business/government relationship and power elite.
10. Labor Power is suppressed – Because the organizing power of labor is the only real threat to a fascist government, labor unions are either eliminated entirely, or are severely suppressed.
11. Disdain for Intellectuals and the Arts – Fascist nations tend to promote and tolerate open hostility to higher education, and academia. It is not uncommon for professors and other academics to be censored or even arrested. Free expression in the arts and letters is openly attacked.
12. Obsession with Crime and Punishment – Under fascist regimes, the police are given almost limitless power to enforce laws. The people are often willing to overlook police abuses and even forego civil liberties in the name of patriotism. There is often a national police force with virtually unlimited power in fascist nations.
13. Rampant Cronyism and Corruption – Fascist regimes almost always are governed by groups of friends and associates who appoint each other to government positions and use governmental power and authority to protect their friends from accountability. It is not uncommon in fascist regimes for national resources and even treasures to be appropriated or even outright stolen by government leaders.
14. Fraudulent Elections – Sometimes elections in fascist nations are a complete sham. Other times elections are manipulated by smear campaigns against or even assassination of opposition candidates, use of legislation to control voting numbers or political district boundaries, and manipulation of the media. Fascist nations also typically use their judiciaries to manipulate or control elections.
(Source: The Fourteen Defining Characteristics of Fascism, Dr. Lawrence Britt, Spring 2003, Free Inquiry)
Perhaps it is unfair to characterise the Bush Presidency in these terms, because it would imply the existence of a coherent governing philosophy.
In fact, the President’s actions in regard to the “war on terror”, Iraq, and now the reconstruction efforts in the Gulf basin smack of panic and political expediency: When there’s a problem, throw money at it. For all of the talk about the President “accepting responsibility” for the fiasco, his speech was certainly not Trumanesque “The buck stops here” oratory; it was rather a promise to rebuild New Orleans with other people’s money, saying that his people (not the President himself, mind you) had made mistakes and they would fix them.
Of course, part of the point of fiscal responsibility, after all, is that disasters do happen and the government should have fiscal leeway to respond to them. But the US today has no leeway at all, thanks to this president and his party. The “compassion and resolve of our nation” are amply demonstrated by a whopping huge expenditure, the costs of which are to be imposed on future generations of American taxpayers. Or more accurately, coming during a week which also saw the annual rate of growth in the current account deficit hitting nearly $750 billion, (more than 6% of GDP), the President’s latest act of “compassionate conservatism” puts the rest of the world on notice that it is going to have to stump up even more credit for this Argentina of the northern hemisphere. One wonders whether these particular creditors’ goodwill is likely to prove as durable as the levees of New Orleans.
MARSHALL AUERBACK is an international equity strategist work with RAB Capital in London.