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and Corporate PowerThe U.S. Supreme Court’s Jan. 21 decision unleashed unlimited corporate funds for open purchase of political control. In a special report Mason Gaffney traces the ebbs and swells of popular control of corporations since America’s founding. Did Jan. 21 mark a new high in corporate takeover? Gaffney outlines the agenda for popular counterattack in the coming decades. From the battle lines of struggles against corporate power across the world JoAnn Wypijewski reports on capital’s choke points along the “cargo chain” and how workers in ports, rail yards, trucks and warehouses can challenge a system where 225 people are worth more than the combined wealth of 2.5 billion. Get your new edition today by subscribing online or calling 1-800-840-3683 Contributions to CounterPunch are tax-deductible. Click here to make a donation. If you find our site useful please: Subscribe Now! CounterPunch books and t-shirts make great presents.
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Today's Stories March 12-14, 2010 Franklin C. Spinney David Rosen / John Ross Jorge Mariscal Ramzy Baroud Rannie Amiri Nadia Hijab Missy Beattie P. Sainath Norman Solomon Sam Bahour Mike Prysner Website of the Weekend March 11, 2010 Jonathan Cook Yossi Sarid Patrick Cockburn Jayne Lyn Stahl Winslow T. Wheeler Sasha Kramer Billy Wharton Dru Oja Jay Ron Jacobs Russell Mokhiber David Macaray Website of the Day March 10, 2010 Marie Bénilde Carl Conetta Sasan Fayazmanesh Julia Stein Joshua Frank Don Monkerud Heather Gray / Laura Flanders Dave Lindorff Russell Mokhiber Website of the Day March 9, 2010 Keane Bhatt Steven Higgs William Blum Dean Baker Roger Burbach Marshall Auerback / Ralph Nader Conn Hallinan Nadia Hijab Dan Bacher Website of the Day March 8, 2010 Gareth Porter Chris Floyd Carl Ginsburg Jonathan Cook Dean Baker Bill Quigley Greg Moses Shamus Cooke Tolu Olorunda Kieko Matteson Mike Bader Website of the Day March 5 - 7, 2010 Alexander Cockburn James Ridgeway / Saul Landau / Nelson P. Valdes The Untouchable Budget: Defense Department, Inc. Ishmael Reed Dave Lindorff Mike Whitney Russell Mokhiber John Ross Mark Schuller Mark Weisbrot Rannie Amiri Ramzy Baroud David Rosen David Ker Thomson Wajahat Ali Missy Beattie George Wuerthner Benjamin Dangl Martha Rosenberg Vladimir Radyuhin Eric Walberg Robert Bryce Alison Weir David Macaray Laura Flanders Bouthaina Shaaban Charles R. Larson David Yearsley Poets' Basement Website of the Weekend March 4, 2010 Paul Craig Roberts Dave Lindorff Conn Hallinan Steven Higgs Frank Green Ron Jacobs Christopher Brauchli Don Monkerud Roberto Rodriguez The Politics of the Census: Masking Identities or Counting the Indigenous? Raymond J. Lawrence Website of the Day
March 3, 2010 Norman Finkelstein Bill Quigley Franklin C. Spinney Dean Baker Mike Whitney Raed Jarrar / Adam Federman Joshua Frank Will Parrish / Darwin Bond-Graham Matt Siegfried Website of the Day March 2, 2010 Patrick Cockburn Tricia Shapiro Gareth Porter Paul Craig Roberts Ellen Brown David Macaray Stewart J. Lawrence Shamus Cooke Udi Aloni / Binoy Kampmark Stephen Soldz Website of the Day March 1, 2010 Ralph Nader Will Parrish / Mike Whitney Diana Johnstone Jayne Lyn Stahl Vijay Prashad Paul Buhle Organizing Against Empire: Where Left and Right Meet ... Amicably Robert Jensen Marga Tojo Gonzales Website of the Day February 26 - 28, 2010 Alexander Cockburn Alison Weir Will Parrish / Jason Hribal Saul Landau / Mark Weisbrot Alan Farago Suzan Mazur Martha Rosenberg Ray McGovern Rannie Amiri Dave Lindorff Ramzy Baroud David Macaray Jared Ritvo Missy Beattie Brian McKenna Don Santina Binoy Kampmark M.G. Piety Michael Dickinson Art as Defensive Weapon Charles R. Larson Ben Sonnenberg David Yearsley Poets' Basement Website of the Weekend February 25, 2010 Jason Hribal Clancy Sigal Tariq Ali Jonathan Cook Mike Whitney Peter Lee Russell Mokhiber Prosecuting Bush for War Crimes Deepak Tripathi Charlie Wilson's Legacy Norman Solomon Phillip Doe Website of the Day February 24, 2010 Ashley Smith Mike Whitney Garerth Porter Joe Bageant Shamus Cooke Al Benchich Harvey Wasserman Jim Goodman Ron Jacobs Stewart J. Lawrence Tom Clifford Website of the Day
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Weekend Edition How Champions of Neoliberalism are Reversing New Deal EconomicsBack to Market FundamentalismBy ISMAEL HOSSEIN-ZADEH The “golden” years of the U.S. economy in the immediate post-WW II period, along with the recovery and expansion of the economies of other industrialized countries, afforded the working class of these countries a decent, even middle-class, standard of living. Combined with extensive social safety-net programs such as the New Deal reforms in the U.S. and Social-Democratic reforms in Europe, the economic recovery and high employment rates of that period paved the way for a relatively cooperative relationship between the working and capitalist classes in these countries. This led many pundits of historical developments to argue that perhaps Karl Marx had underestimated capitalism’s ability to carry out reform and share the fruits of economic progress with the poor and working class, thereby obviating revolution. They pointed to guaranteed employment and labor-management cooperation in a number of industrialized countries such as Germany and Japan as indications of “erroneous” Marxian judgment of the antagonistic capital-labor relationship. These pundits failed, however, to point out the fact that the New Deal and Social-Democratic reforms that evolved out of the Great Depression and World War II were not courtesy of “benevolent” capitalism, voluntarily bestowed upon the poor and working people. They did not bother to explain that those reforms were, rather, the product of years of struggle by the working class and their allies against the brutalities of the capitalist system—struggle that often entailed great sacrifices, including occasional loss of life. The anti-Depression and anti-war struggles of the 1930s and 1940s compelled the capitalist class to “carry out reform in order to prevent revolution,” to paraphrase President Franklin D. Roosevelt. The laissez-faire doctrine, which firmly believed in the self-correcting ability of unbridled market mechanism, was the dominant economic principle before to the Great Depression. The financial crash of 1929 and the consequent long Depression shattered this long-held, religious-like belief. The Depression, precipitated largely by predatory loan-pushing and the resulting unsustainable bubble of asset (stock) prices, made living conditions for the overwhelming majority of people extremely difficult. The ensuing economic distress, in turn, precipitated popular unrest. Large numbers of the discontented frequently took to the streets in the early 1930s. Their desire for change swelled the ranks of socialist, communist, and other opposition parties and groups. Left activists gained certain influence among labor ranks and workers’ movement for unionization, illegal in many industries until 1935, spread rapidly. Labor and other grassroots support for third party candidates in the 1932 presidential election resulted in unprecedented number of votes for those candidates. Third-party votes were even more impressive in congressional and local elections. “The union literature was like the labor literature of a century ago—looking toward a successor to capitalism,” wrote the late Studs Terkel in his Hard Times: An Oral History of the Great Depression (Pantheon Books, p. 309). Business and government leaders clearly understood the gravity of the situation and the need for action. The pressure from “below” created consensus and coalitions at the “top” as the need for reform to fend off revolution became evident. “. . . F.D.R. was very significant in understanding how best to lead this sort of situation. . . . The industrialists who had some understanding recognized this right away. He could not have done what he did without the support of important elements of the wealthy class. They did not sabotage the programs. Just the opposite” (Ibid., pp. 268-69). Two principles lay at the core of the ensuing big business-government consensus reforms, which came to be known as the New Deal reforms. The first was that Adam Smith’s “invisible hand” was not capable of resuscitating the badly depressed economy; it needed government’s visible hand. The second principle was that government intervention must be limited to stimulative and distributive measures, and that the management of industries and businesses should be left to the private sector. Facilitating and maintaining a certain level of purchasing power in the market was considered crucial to the New Deal package. While this would provide relief to the economically hard pressed, and thus reduce social tension, it would also stimulate the economy and promise stable growth and rising profitability. Regardless of the degree of the effectiveness of the New Deal reform package, the fact remains that it rescued U.S. capitalism—just as Social-Democratic reforms rescued the economies of West European countries. Combined with what the late Ernest Mandel called “extra-economic” factors (such as pliant labor leadership and peaceful trade unionism, establishment of the Bretton Woods international monetary system, Cold War ideology and the suppression or pacification of any possible dissent, and relative decline in the price of oil and other raw materials in the immediate post-WW II period), the New Deal and other government-sponsored reforms ushered in a period of rapid economic expansion that came to be known as the “golden years of US capitalism,” which lasted until around 1970. While the pressure from below played a key role in compelling the ruling establishment to carry out the New Deal and other welfare state programs, a number of other factors also contributed to the realization of those programs. One such factor was the emergence of an alternative economic model to capitalism from the ruins of the two world wars and Great Depression: the centrally-planned economies of the Soviet Union and its allies. The emergence of the rival economic system, despite its bureaucratic and dictatorial character, further exposed the unjust character of market mechanism because while in the 1930s the capitalist West was suffering from economic depression, unemployment, and poverty, the Soviet and other centrally-planned economies were enjoying impressive rates of growth—with no unemployment, homelessness, or hunger. The popularity of the Soviet-type economic system at the time also meant that many of the colonial and other less-developed areas of the world combined their anti-colonial and anti-imperial national liberation struggles with demands for government-sponsored models of socialist-oriented or “non-capitalist” development. In the core capitalist countries of the West, too, demands for reform and voices of revolution were frequently heard during the widespread protest demonstrations of the 1930s. Anti-capitalist sentiments and demands to harness or to do away with the skittish, unreliable and, at times, brutal forces of market mechanism in favor of regulating and/or managing national economies were heard not only among the Left and working classes but also in the ranks of the middle and lower-middle classes. Although the fear of total economic collapse in the face of the Depression, and the “threat of revolution,” compelled government and business leaders to embark on reform in order to fend off revolution, proponents of unbridled market mechanism never really accepted or reconciled with those reforms as permanent features of capitalism. Not surprisingly, soon after the Depression turned to expansion in the immediate postwar period, and Western capitalism regained its lost confidence, the financial oligarchy and government leaders began to introduce “restructuring” measures that would undermine the New Deal reforms and revive the pre-Depression model of market fundamentalism. Just as the rival economic system of the Soviet Union and its allies, which guaranteed basic needs and job security for their citizens, indirectly contributed to the implementation of the New Deal and Social-Democratic reforms in the industrialized West, the collapse of that rival system is now contributing to the retrogressive process of reviving pre-Depression market orthodoxy. Not only has the collapse of the Soviet-type economies opened up vast markets and huge reservoirs of cheap labor in places such as the former Soviet Union, China, and India, it has also served as grounds for capitalist triumphalism—and its self-assured or self-righteous promotion of trickledown economics. Many people believe that efforts to reverse the New Deal reforms began with the arrival of Ronald Reagan in the White House in 1980. Evidence shows, however, that such efforts, pursued by both Republican and Democratic administrations, began long before the election of Ronald Reagan to presidency. As Alan Nasser, professor emeritus of Political Economy and Philosophy at The Evergreen State College in Olympia (Washington), points out, “The foundations of neoliberalism were established in economic theory by liberal Democrats at the Brookings Institution, and in political practice by the Carter administration.” Reagan picked the Democrat’s timid agenda of gradual return to economic liberalism and ran with it, replacing the rhetoric of capitalism-with-a-human-face with the imperious, self-righteous rhetoric of rugged individualism that greed and self-interest are virtues to be nurtured. Neither President Clinton changed the course of neoliberal corporate welfare policies of Reaganomics, nor is President Obama hesitating to carry out those policies. This is clearly reflected in his administration’s supply-side restructuring policies whose core principle consists of redistributing national resources in favor of the rich and powerful—cutting the critically-need social spending on basic needs to pay Wall Street gamblers and Pentagon contractors. Perhaps a most sinister neoliberal strategy to roll back the New Deal and other poverty-reducing reforms has been deliberate creation of budget deficits in order to force cuts in social spending. This has often been accomplished by a combination of drastic tax cuts for the wealthy along with drastic hikes in military spending. As this combination creates big budget deficits, it then forces cuts in non-military public spending as a way to fill the budget gaps that are thus created. The Obama administration has, indeed, escalated this creepy strategy by bailing out the Wall Street gamblers, financing multiple wars of choice and more than 800 military bases around the world, and then cutting social spending in an effort to reduce the national debt and budget deficits thus generated. Another strategy of reviving the pre-New Deal laissez faire economics has been the increasing use of various schemes of outsourcing and privatization. The outsourcing of public services to private hands pervades all areas of state responsibility. Perhaps a most notorious example of this policy is the case of the Pentagon/security contracting. The services outsourced by the Pentagon are no longer limited to the relatively simple or routine tasks and responsibilities such as food and sanitation services. More importantly, they include contracts for services that are highly sophisticated and strategic in nature, such as the contracting of security services to corporate private armies, or modern-day mercenaries. Reporting on the steadily rising trend of outsourcing, Scott Shane and Ron Nixon of the New York Times reported, “Without a public debate or formal policy decision, contractors have become a virtual fourth branch of government. On the rise for decades, spending on federal contracts has soared during the Bush administration, to about $400 billion last year from $207 billion in 2000, fueled by the war in Iraq, domestic security and Hurricane Katrina, but also by a philosophy that encourages outsourcing almost everything government does.” The policy of privatization and outsourcing has led the U.S. Department of Housing and Urban Development (HUD), tasked with expanding the American dream of home ownership and affordable housing free from discrimination to people of modest means, to surreptitiously “move a chunk of that role to Wall Street since 2002,” reports Pam Martens, a freelance investigative reporter. Martens further writes:
Outsourcing policies are bound to be further accelerated by the rising budget deficits of many states and municipalities, and their need to sell off public property or outsource their traditional services in order to raise funds to finance their budgetary needs. These include outsourcing the maintenance of parks, the management of toll roads, the collection of waste, the operation of municipal neighborhood centers, and more. For example, according to a recent MSNBC report, in the two years since Mitch Daniels was elected governor in Indiana, “the state has leased the 157-mile Indiana Toll Road to an outside company for the next 75 years for $3.8 billion, hired vendors for $1.16 billion over 10 years to process welfare applications, and brought in a company to serve food at a mental hospital.” While cash-strapped states and other local governments can generate quick cash by privatizing public property or outsourcing public services, they forgo long-term opportunities of income generation from such properties and services. Another Wall Street plot to rob the people of their social safety net programs is the recently renewed attack on the once-sacred entitled programs such as Social Security, Medicare and Medicaid. Having piled up huge sums of national debt and deficit (through bank bailouts, military spending, and tax cuts for the affluent), Wall Street champions, firmly ensconced at the Congress and the White House, are now singing the “fiscal responsibility” song as a prelude to chip away at Social Security and other entitlements. This ominous scheme is clearly reflected in President Obama’s recently appointed “National Commission on Fiscal Responsibility and Reform,” a bi-partisan group that is tasked with reviewing the Social Security and other entitlements in an effort to further “trim” social spending in order to pay for the sins of major banks and military contractor. The bipartisan nature of the attack on Social Security indicates that the plan to undercut economic safety net programs cannot be blamed solely on the blatently neoliberal Republicans. It shows that, with few exceptions, Democrats are as much indebted and committed to the powerful financial interests as are Republicans. The neoliberal economic policies of the Obama administration, crafted by his economic team of ex-bankers/Wall Street advisors, should dispel any illusions that he is committed to “change” in favor of the people. The New Deal and other basic needs programs were put in place not so much because of F.D.R.’s or Keynes’s genius, or the goodness of their heart, as they were because of the compelling pressure from the people. Freed (or feeling free) from that pressure, the government, as the executive body of the financial/economic oligarchy, is now trying to undermine those social safety net programs, and revive the pre-New Deal/pre-Keynesian economic orthodoxy, that is, the economic model of the survival of the fittest. This sinister, profit-driven effort at undermining the poor and working people’s hard-won basic needs programs can be stopped only through a renewed and compelling pressure from the grassroots—pressure that must be exerted not through the Democratic Party machine but independent of the so-called two-party system. Ismael Hossein-zadeh, author of The Political Economy of U.S. Militarism, teaches Economics at Drake University, Des Moines, Iowa.
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