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A Bi-Partisan Crisis

A Nation Brought to the Verge of Ruin

by PAUL STREET

In the Hands of a Moneyed Oligarchy

Recently on his syndicated talk show, the power-worshipping interviewer of influential elites Charlie Rose worried that Washington’s latest fiscal crisis sends the world the message that “democracy doesn’t work as well as we thought it did.” [1]

What American “democracy” was Charlie Rose talking about? As John Bellamy Foster and Robert W. McChesney noted four years ago, explaining why there would be no New Deal under Barack Obama, “The United States, despite its formally democratic character, is firmly in the hands of a moneyed oligarchy, probably the most powerful ruling class in history.” [2]

By Noam Chomsky’s account two years later, writing in the wake of the first elite-manufactured debt-ceiling crisis that nauseated the nation and mystified the world, “Corporate power, by now largely financial capital has reached the point that both political organizations, which now barely resemble traditional parties, are far to the right of the population on the major issues under debate.”[3]

Evidence in support of these statements is voluminous. On issue after issue, public opinion is irrelevant (or very close to it) in the realm of serious politics and policy, controlled by the nation’s “unelected dictatorship of money (Edward Herman and David Peterson’s phrase). Take health care coverage. Most Americans have long favored a single-payer national health insurance plan on the Canadian model. Their preference for such substantive, seriously social-democratic health reform has found no representation among the corporate- and Wall Street-captive lobbyists and politicians who pushed for big business-friendly versions of “health insurance reform. The version that finally passed in 2009, the so-called Affordable Health Care Act, is a monument to corporate and financial plutocracy. The business right wing FOX News and talk radio propaganda machine calls “Obamacare” socialism. It did not inform those it eggs into dread that the president’s measure is based on corporate-friendly prescriptions developed by the right wing Heritage Foundation in the 1990s and that his notion of “change” leaves giant insurance and drug companies free to extract massive profits that drive the nation’s health care costs to the breaking point.

The U.S. could eliminate its much-bemoaned fiscal deficit by replacing the nation’s highly dysfunctional privatized and largely employment-based health insurance system with a universal public model similar to what exists in other industrial nations – with a system that would cut health costs in half and yet deliver superior outcomes. But that’s irrelevant under the rules imposed by the reigning “plutonomy,” wherein “the financial institutions and Big Pharma are far too powerful for such options even to be considered.”[4]

The Deficit Over Jobs

“The deficit” is itself another case in point. The populace tells pollsters that government’s main priority ought to be job creation, not deficit reduction. As Demos magazine noted last December, 2011 and 2012 polls found that “the public remained focused on jobs and the economy over the deficit by two-to-one margins or more.” Surveys undertaken after Obama’s reelection last November found that “49 percent thought the election was a mandate for job creation while only 22 percent said that the President’s mandate was for deficit reduction.” NBC’s exit poll showed that “only 15 percent of voters thought the deficit was the biggest problem facing the country” A majority supported “spending money to invest in infrastructure/public sector hiring, like teachers and firemen, versus cutting to reduce the deficit.”

So what? Who cares? As Demos writer J. Mijin Cha explained, “The ‘donor class’ – the segment of the population that donates to political campaigns – is disproportionately comprised of affluent Americans.” This “donor class” (predominantly from households in the top income quintile) “does not prioritize policies to create jobs and economic growth.” It is “twice as likely to name the budget deficit as the most important issue in deciding how they would vote than middle- or lower-income respondents.” It strikingly and overwhelmingly rejects federal government action to help create jobs. Just 19% of the nation’s affluent households think the government in Washington should “see to it that everyone who wants to work can find a job” – a statement favored by 68 percent in the public. A tiny 8 percent of the wealthy think that government “should provide jobs for everyone able and willing to work cannot find a job in private employment” – something a majority (53%) of Americans support.

The “donor class” has won the policy argument, in defiance of majority sentiments. “Austerity dominates the current political debate” in ways that reflect “the influence of money in our political system…as evidenced in how well the interests and priorities of the affluent class are represented in Congressional action – even when they run counter to the wishes of most Americans” – and, we might add, counter to the requirements of meaningful economic recovery.[5] 

Demos might have added “as represented in presidential action” and in the behavior of both of the nation’s reigning political parties. The president has already made significant reductions to the highly popular Medicare and Social Security programs in the deceptive name of “deficit reduction” and he is promising to make more in the name of his neoliberal “grand bargain” (really a Great Betrayal) – with little opposition from fellow dismal dollar Democrats.

We’ve Seen This Movie (Dance) Before

The latest crisis in Washington is yet another in a series of plutocratic fiscal dramas illustrating the irrelevance of public opinion under the “unelected dictatorship.” Like the debt-ceiling fiasco of 2011 and the fiscal cliff freak show of 2012, it will end with a bipartisan deal the advances the financial elite’s drive for more austerity and do nothing to addresses the nation’s interrelated and ongoing crises of poverty, joblessness, and inequality (the latter problem so savagely advanced now that 400 Americans have more wealth than half of all Americans) With the Teapublicans’ “defund [supposedly socialist and in fact corporatist] Obamacare” having been taken off the table (it was never serious[6]), the two wings of the single corporate party” have begun to hammer out a deal that will, as the left economist Jack Rasmus predicts:

“result in more spending cuts, especially Social Security, Medicare and Medicaid, as well as an understanding and consensus to cut corporate taxes when the tax code overhaul bill comes to votes in Congress and for Obama’s signature…… The deal may include some token concessions to Teapublicans in the House…. Perhaps the already offered repeal of the medical device tax. Perhaps some further exemptions to Obamacare for business and wealthy individuals. A long list of such concessions to exempting and postponing parts of Obamacare have already been unilaterally made by Obama since the beginning of this year. Difficulties in the rollout of Obamacare may encourage him to agree to more. There may even be a short delay of a few months in the implementation deadline for the Obamacare act….But the final deal to be struck in 2013 will appear more like the prior 2011-2012 deal of spending cuts and tax largesse for the wealthy. This time seniors and retirees will be the primary target of the spending cuts, while corporations get the tax cuts instead of wealthy individuals.”[7]

“We’ve seen this movie before, we know how it’s going to end.” So said Donald T. Ellenberger, the “head of multisector strategies” at the giant financial services firm Federated Investors, last week, explaining why the financial markets were responding with cautious calm in response to the threat of default.[8] Rasmus prefers a different metaphor: dance, as in a “well-orchestrated dance” in which corporate-captive elites in both of the leading parties align with the mass media in whipping up fears of government and economic collapse to advance the neoliberal austerity agenda favored by political and economic investor class.

So what if this deal has nothing to do with – and in fact coldly defies – majority popular sentiments? We the not-so sovereign shock-doctrined [9] people are supposed to be so relieved that the bipartisan plutocrats in Washington have decided “at the last minute” not to throw the already weak recovery and savagely unequal economy into catastrophic decline (something that no Washington players beyond a part of the GOP.’s proto-fascistic Tea Party faction might seriously seek or welcome) that we are ready to accept whatever regressive bargain is worked out supposedly on our behalf. We are expected to direct our ire at one or both of the two dominant political organizations, and/or at government and politics and “Washington” in general, but not at the real power behind the outwardly reigning parties and state – the nation’s hidden senate of corporate and financial wealth, which has trumped democracy with plutocracy for quite some time now.

“Wall Street Owns the Country”

It’s not exactly new. Listen to how the great Kansas populist orator Mary Ellen Lease put things to an angry crowd in 1890, one hundred and twenty-one years before Occupy Wall Street (OWS) launched its remarkable but short-lived, police state-dismantled encampment in lower Manhattan:

 “Wall Street owns the country. It is no longer a government of the people, by the people, and for the people, but a government of Wall Street, by Wall Street, and for Wall Street….Our laws are the output of a system which clothes rascals in robes and honesty in rags….There are thirty men in the United States whose aggregate wealth is over one and one-half billion dollars. And there are half a million looking for work….The people are at bay, let the bloodhounds of money who have dogged us thus far beware.”[10]

Another sterling populist speaker of the time spoke in similar and hauntingly Occupy-foreshadowing terms, adding a critique of the two dominant parties’ (Republicans and Democrats) shared subservience to the moneyed power. As Ignatius Donnelly noted at the People’s Party national convention on July 4th, 1892, in terms that seem hauntingly familiar in our current New Gilded Age:

 “We meet in the midst of a nation brought to the verge of moral, political, and material ruin. Corruption dominates the ballot-box, the Legislatures, the Congress, and touches even the ermine of the bench. The people are demoralized…The newspapers are largely subsidized or muzzled, public opinion silenced, business prostrated, homes covered with mortgages, labor impoverished, and the land concentrating in the hands of capitalists….The urban workmen are denied the right to organize for self-protection, imported pauperized labor beats down their wages, a hireling standing army, unrecognized by our laws, is established to shoot them down….The fruits of the toil of millions are badly stolen to build up colossal fortunes for a few, unprecedented in the history of mankind; and the possessors of these, in turn, despise the Republic and endanger liberty…We have witnessed for more than a quarter of a century the struggles of the two great political parties for power and plunder, while grievous wrongs have been inflicted upon the suffering people. We charge that the controlling influences dominating both these parties have permitted the existing dreadful conditions to develop without serious effort to prevent or restrain them…. …They propose to sacrifice our homes, lives, and children on the altar of mammon; to destroy the multitude in order to secure corruption funds from the millionaires….” [11]

 Sound familiar? “Wall Street owns the country.” Encouraged by the original well-orchestrated first debt-ceiling dance in the summer of 2011, that was the lesson drawn and disseminated with no small initially favorable public response by OWS and its many hundreds of imitators across the country two years ago. That left-led populist movement (or moment) was crushed by predominantly Democratic mayors and city councils with no small help from a coordinated federal (Obama administration) campaign of repression. It is long past time for a popular grassroots re-occupation seeking among other things to bring about a semblance of actual popular sovereignty to an ever more authoritarian and Orwellian, state-capitalist America.

As I write this (in the early afternoon of Wednesday, October 16, 11 hours before the debt-ceiling deadline, I see from the AP wire that the “last minute” deal in the “well-orchestrated dance” is being cut.

Postscript: “The Ultimate Green Party” (Thursday morning, October 17):

As this latest fiscal crisis dance winds down (there are others scheduled for the future) with the interim resolution predicted by the financial markets, I would imagine that the president is denouncing out-of-control “partisanship” in the nation.  It is a good time to look at Mark Leibovich’s bestselling expose on the money soaked bipartisan orgy that is Washington D.C.: This Town: Two Parties and a Funeral Plus Plenty of Valet Parking (New York: Blue Rider Press, 2013). “In recent years,” Leibovich writes, “Washington has defied the national economic slump and become the richest metropolitan area in the country.  Getting rich became the great bipartisan ideal: ‘No Democrats and Republicans in Washington anymore, only millionaires,’ goes the maxim. The ultimate Green Party.  You still hear the term ‘public service’ thrown around, but often with irony and full knowledge that ‘self-service’ is now the real insider play.” (p.9)

“Much of the Washington economy – lobbying, consulting, and cable news – is predicated on the perpetuation of conflict, not the resolution of problems….All of the shouting partisanship that we see on television is just winking performance art….Off-air, everyone in Washington is joined in a multilateral conga line of potential business partners” (p.98).

Beneath all the drama about “the Tea Party’s” defeat and the Democrats’ “victory,” a Bloomberg Businessweek item this morning reports that “Obamacare aside, events have actually gone the [Tea Party] movement’s way ever since Republicans wrested control of the House of Representatives in the 2010 midterm elections. Discretionary spending has been falling. Federal-employee head count is down. And since 2010, deficit reduction has been more rapid than in any three-year period since the demobilization following World War II… The nonpartisan Congressional Budget Office projects that, under current law, by 2038 total spending on everything other than the major health-care programs, Social Security, and interest will decline to the smallest share of the economy since the 1930s.”
See http://www.businessweek.com/articles/2013-10-17/tea-partys-victory-against-government-spending-comes-at-high-price?campaign_id=yhoo.
Of course, what Bloomberg describes here as a “pyrrhic victory” for the so-called Tea Party’s so-called movement is in fact the triumph of richly bipartisan neoliberalism and the financial and corporate elite, whose wealth and power continue to concentrate while millions of Americans struggle to stay afloat

Paul Street’s next book is They Rule: The 1% v. Democracy (Paradigm. January 2014).

Notes

1. “U.S. Government Shutdown: Wolf, Mallaby, Osnos,” October 15

w-10-16-jFJwWPc7R_G831yY2kch~A.htmlww.bloomberg.com/video/u-s-government-shutdown-charlie-rose 8:15

2. J.B. Foster and R.W. McChesney, “A New Deal Under Obama?” Monthly Review, February 2009, 7).

3. Noam Chomsky, “American Decline: Causes and Consequences,” Alakhbar English, August 24, 2011.

4. N. Chomsky, “Americain Decline,” New York Times Syndicate, August 5, 2011).

5. J. Miljin Cha, “Why is Washington Reducing the Deficit Instead of Creating Jobs?” Demos, December 7, 2012.

6. Jack Rasmus, “The Coming Debt Ceiling Settlement: The Well-Orchestrated Dance, 2.0,” (October 15, 2013), As Rasmus ads, “The recent Teaparty grandstanding on Obamacare has been for the media and public, with the goal of enhancing their 2014 midterm election results within the Republican party as well as in general. They have now accomplished this. The Obamacare issue was never a serious possibility. They will now retreat.”

7. One should not forget that Obama has been, and continues to be, a strong advocate of cutting the corporate tax rate from 35% to 28% and providing ‘relief’ for multinational corporations’ tax rates. Obama has also already indicated cuts of $630 billion in social security and medicare in his 2014 budget. This is the starting point for the ‘original process’ negotiations that have been temporarily derailed by Teapublican grandstanding, now coming to an end.

8. N. Popper, “Little Fear On Wall St. Of Default, At Moment,” New York Times, October 8, 2013, B5.

9. Noami Klein, The Shock Doctine: The Rise of Disaster Capitalism (New York: Metropolitan, 2007).

10. Howard Zinn, A People’s History of United States (New York, 1980), 288.11. Larry Goodwyn, The Populist Movement (New York: Oxford University Press, 1978), 167-168. Emphasis added.