"In a time of universal deceit telling the truth is a revolutionary act." -George Orwell

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Selling Out New York City’s Public Schools: Mayor Bloomberg, David Steiner And The Politics Of Corporate “Leadership”

In Uncategorized on December 9, 2010 at 11:56 am

Oldspeak:”The corporate take over of public education is in full swing, as evidenced by Boss Bloomberg’s appointment of the grossly unqualified Hearst Magazines C.E.O. Cathleen Black who has zero background in public service/education as chancellor of the the country’s largest school system. Her mandate is to implement the Wal-Mart model of education,” ‘in which students are viewed as a cheap supply of labor, valuable to the extent that they “help employees get more education and to build a better work force.” As is usual with corporatization, the poorest and most vulnerable people will suffer. Zero-tolerance disciplinary measures, increased surveillance and criminalization of  social behaviors will further augment the school-to-prison pipeline.”

From Herny A. Giroux @ Truthout:

Politicians, anti-public intellectuals and conservative-leaning media pundits no longer ask what kind of education is needed in a democratic society. Nor do they value the importance of educating teachers and students to think critically, engage in meaningful dialogue and function as producers of knowledge rather than as objects of its transmission. Curiously, given the disastrous state of the economy since its 2008 meltdown, the leadership driving the new reform movement in education are hedge fund managers, multimillionaires, Ivy League apparatchiks and corporate executives. For them, education is largely about “applying business strategies and discipline to public schools.”(1) Education has become the new frontier for the investment dollar and very likely the next big bubble to burst. But what do the proposed reforms mean for education now, on the ground, so to speak, in classrooms across the nation? Educational theory – the guiding philosophical principles that provide a vision of what it means to be a fully functional educated citizen, as well as the vision of the kind of society educated men and women should aspire to build – has been stripped of its critical and emancipatory possibilities, in this latest demand for educational accountability and innovation, just as pedagogy has been reduced to a managerial and disciplinary process largely driven by market values, a crude empiricism and the ideology of casino capitalism with its relentless prioritization of economic interests over human interests and a politically compliant and technologically savvy labor force over one that aspires to independent thought and ethical stewardship in its efforts to meet the needs of a democratic polity.

What is emerging out of this anti-public model of education is the Wal-Mart approach to schooling, in which students are viewed as a cheap supply of labor, valuable to the extent that they “help employees get more education and to build a better work force.”(2)Evidence of how this business model, with its all-too-obvious flight from social and moral responsibility works is evident in the recent decision by David Steiner, the recently appointed commissioner of the New York State Department of Education, to name the utterly unqualified Cathleen P. Black, the chairwoman of Hearst Magazines, as the chancellor of New York City’s public schools.

The appointment of a person who has little involvement in public service and no meaningful experience as an educator to head the largest public school system in the country has prompted a great deal of public outrage and generated a significant amount of coverage in the dominant media. At one level, the protest has centered on the imperial rule of Mayor Bloomberg who, true to his corporate values, once again exhibits his disdain for any notion of governance that solicits public dialogue, values and community involvement. Not only has Bloomberg appointed a majority of his supporters to the Board of Education, but when they disagree with his policies, he simply fires them. To his critics, Bloomberg is elitist, autocratic and largely dismissive to those who challenge him. Surely, this characterization of the New York City mayor has been reinforced by the highly secretive way in which Black was chosen to assume such a vital role in educational leadership. The imperial nature, to say nothing of the thoughtlessness, of his selection of Black was echoed by her comment that “the offer came out of left field.”(3) Though, of course, in accepting the position, she reproduced the distorted assumption that “all the school system needs is a smart and talented manager.”(4) Even the director of education policy studies at the ultra-conservative American Enterprise Institute – no friend of public education – was puzzled over the official rationale for Black’s appointment and stated that it was naive for Bloomberg to believe that the only requirement necessary for Black to become the head of the New York City school system was that she was a CEO and “that all C.E.O.’s have the skills to lead this large organization.”(5)

As public outrage grew over Bloomberg’s appointment, a number of groups, including the editorial board of The New York Times, argued that one possible compromise would be to appoint a professional educator as a chief academic officer to act as Black’s chief adviser. The only person with the power to insist that Black be provided with a surrogate tutor was Steiner – at which point, the media coverage of the story shifted to Steiner. Steiner has the power, under a 73-year old state law, to prevent Black from taking the position by denying her request for a school district leader certificate, particularly in light of the fact that Black has no advanced degrees or educational credentials whatsoever. He also had the power to give her a waiver under certain specified conditions, one of which was to work with a professional educator as second in command. Only by providing a waiver to Black would it be possible for her to assume the position as chancellor of the school system, a position for which, again, she is singularly unqualified given her lack of educational preparation and experience.

Of course, Steiner, true to his own corporate-driven ideology, eventually granted Black the waiver to assume the job, but with the qualification that she work with a chief academic officer by her side. In agreeing to provide the waiver, Steiner wrote, “Despite her lack of direct experience in education, I find that Black’s exceptional record of successfully leading complex organizations and achievement of excellence in her endeavors warrant certification.”(6) Steiner is stretching the logic of deliberation and good judgment here to the point of disbelief. How does running a successful business qualify someone to run the largest school system in America? And if she is qualified by virtue of that experience, why, as a precondition for assuming the job, is she being assigned a deputy chancellor who, as an experienced educator, is serving as her private tutor – a condition which makes clear how unqualified she is for the position in the first place? Needless to say, once Steiner made his decision, Mayor Bloomberg made clear how irrelevant such an ill-conceived and conciliatory gesture was by pointing out, “There will be one person in charge. Make no mistake about that.”(7)

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This kind of mindless authoritarianism by Bloomberg feeds into a type of lethal ignorance regarding what constitutes educational leadership, and is part and parcel of free-market ideology that assumes that all social, economic, educational and political problems can be solved through the template of a business culture increasingly characterized by top-to-down modes of governance, unchecked financial recklessness, a contempt for democratic modes of deliberation, a hatred of unions’ and teachers’ rights, a disdain for all things public and a flight for social and moral responsibility. But the real issue here is not about the appointment of Black to a position for which she is embarrassingly unqualified, but about corporate power and a business culture, along with its pocketed elites, who both detest public education and who pose a serious threat to the educational conditions necessary for critical thought, engaged citizenship and democratic life itself.

Steiner’s pusillanimity is a case in point. When it became clear that he had the power to derail Mayor Bloomberg’s appointment of Black, The New York Times ran a front-page story on Steiner, portraying him as a sensitive, thoughtful Oxford graduate who was having trouble sleeping over the decision. Or so it was reported in The New York Times, “He has been having trouble sleeping, gazing at a print of Rembrandt’s ‘Philosopher in Mediation’ in his apartment and taking solace in Schubert Opus 100.”(8) Not only was Steiner portrayed as a well-educated, classics enthusiast who dared, at least momentarily, to stand bravely in the way of Mayor Bloomberg’s attempt to appoint Black as the new school chancellor, but also as a sensitive intellectual who, by virtue of his education and Ivy League pedigree, would surely make the right choice. The hidden order of politics here is that the well-educated elite, even when they have been bought off by the rich and powerful, will end up making responsible decisions. This is a familiar story and legitimates the millionaire/billionaire-driven culture of philanthropy that is now waging a war against public and higher education.

The barbarians in this narrative are not the business elites, but the hordes of alleged philistines who make up the teachers unions and confront every day the growing challenges of engaging students in the classroom. In this widely fabricated and revolting scenario, this merging of the business elite with the alleged best and the brightest, while they may have given us a string of wars extending from Vietnam to Afghanistan along with scandals extending from Enron to the current financial meltdown, are, as a bloc, much too educated and civilized to be viewed as corrupt, greedy, politically challenged or subservient to the naked interests of powerful corporations. Not only does this script rival the banalities of celebrity culture, but it says little that is truthful about the reality of the alleged superior educational views, politics and morality of the elite. In this view, the presumed power of the cultivated imagination of the rich and powerful prevents them from being narrow, craven, inhumane or eagerly subservient to established power. Little is said about the shortcomings of the education that the elite actually receive, nor is there any acknowledgment that Nazi leaders along with Pol Pot and others who reviled democracy also appreciated “great” books and works of art, but that did not stop them from engaging in horrendous crimes against humanity. The truth of one’s politics lies elsewhere; it speaks in and through relations of power, compassion, empathy and public values; it is also rooted in the decisions one makes and the consequences they have regarding the important issues of equity, social justice, equality and the public good.

In the end, Steiner’s soaring imagination and literary tastes simply become a convenient alibi for refusing to engage his politics and the slavish role he now plays as a courier for corporate power and neoliberal ideology. The result, in part, has been a mainstream, media-driven narrative that depoliticizes the most important issues at hand in the Bloomberg appointment, and the role that is played at the highest levels of state power by an intellectual elite who provide support for such malfeasance. The Bloomberg decision raises larger issues about the crisis of public education, the war being waged against youth of color, the rise of the punishing state and its influence upon education and the growing disinvestment in education as a public good. The New York Times story about Steiner takes a crucial issue about educational leadership and reduces it to an utterly privatized account of Steiner’s life. While the article obsequiously gushes to its readers that Steiner is a “walking Bartlett’s, known for weaving Homer, Plato, Shakespeare and Dante into his conversation and e-mails,”(9) this is all beside the point. It hasn’t translated into effective new leadership in New York City schools. Nor does Steiner’s alleged intellectual gravitas impact in any way the literacy rates of New York City school kids. Rather, it serves as a shameful cover for divesting them of the resources necessary for meaningful and critical education. The real news is that Steiner is just as much a neoliberal, free-market enthusiast, who has a long record of prioritizing the teaching of methods over theory, substituting training for critical education, advocating for charter schools and supporting the punishing bromide of reducing teacher and student evaluations to the draconian demands of high-stakes testing and empirically based performance measures. Rather than being treated to a celebrity-style commentary about the refinement of Steiner’s musical or literary tastes, the public deserves more. For example, how does Steiner address the meaning and purpose of education so as to do justice to the hundreds of thousands of parents, administrators, teachers and students who believe that education is a central and formative element in teaching young people how to think critically and engage the world, not merely as workers, but as informed and critical citizens? What are his views on addressing the economic inequities faced by so many school children in New York? Or, for that matter, the increasing disproportionate suspensions and expulsions of poor students of color, and the increasing presence of the police in schools, and the list goes on and on.

Not only does Steiner’s actual history of policy making suggest that the outcome of his decision about Black was never in dispute, but it also reveals how conservative politicians such as Bloomberg are putting into positions of power neoliberal apparatchiks, who willingly promote the business culture and social relations so vital to the assault on public schools, teacher unions, teachers and students that marks the rise of the new neoliberal hedge fund, millionaire school reformers. Despite the Times’ willful myopia, Steiner’s conservative credentials are on full display in a number of articles he has published in highly right-wing journals. His disdain for critical pedagogical practice and support for corporate-based notions of schooling was highly visible during his tenure as dean of Hunter College. While at Hunter, he promoted charter schools, reinforced the anti-intellectual nature of teacher education by developing programs that emphasized practice over theory, criticized any attempt to deepen the connection between research and teaching, defined pedagogy as primarily the mastery of methods and abstracted any vestige of critical theory from classroom teaching by emphasizing clinical training – all the while going on record expressing a disdain for any attempt to view teachers as critical intellectuals whose classroom performance could be enhanced through a familiarity with scholarship and critical theory in general.(10) Whatever the high cultural gloss given to Steiner, his decisions and actions at various levels of the New York educational system would reveal just another neoliberal, free-market ideologue whose view of education strips away any vestige of critical imagination, undermines an environment of collaboration and undercuts teacher autonomy from classroom teaching. Steiner’s educational philosophy in the end reduces the purpose and meaning of education to the dictates of a business culture more interested in training than in educating. It is also a philosophy that supports the increased use of disciplinary measures in the schools that increasingly transform schools into laboratories for modes of surveillance that pose a threat both to civil liberties and to democracy itself. In fact, it can be argued that the use of cameras to monitor classrooms poses a troubling threat to poor black students because this type of monitoring tends to produce crime by criminalizing social behavior, removing those populations considered disposable, thus producing more bodies for the school to prison pipeline. For example, Steiner’s trademark support for videotaping classroom teachers as pedagogical practice firmly supports Bill Gates’ recent suggestion that monitoring devices be placed in classrooms as a way of evaluating teacher performance.(11) Little is said about how these technologies, elevated to pedagogical essentials, desensitize children to being under constant surveillance in the workplace and various other public spheres. In this case, the pedagogy of business culture often bears an eerie, if not chilling, alignment with diverse modes of policing.(12)

Schooling in this view is all about preparing people for jobs and setting up policies that remove critical thinking as a serious condition for independent action and engaged citizenship. What haunts people like Steiner, Arthur Levine, Gates, Jack Welch, and the rest of this neoliberal crew is that teachers might actually be educated as critical intellectuals – thoroughly versed in theory and subject matter and not simply methods – and, in doing so, may engage in the dangerous practice of teaching students how to think, hold power and authority accountable, take risks and willingly embrace their role as producers and not merely transmitters of critical information. Steiner’s decision to cave in to Bloomberg’s authoritarian view of education is just another example of a how corporate power and values in education are now working to create what Martha C. Nussbaum calls “generations of useful machines.”(13)


1. Stephanie Strom, “For School Company, Issues of Money and Control,” New York Times, (April 23, 2010), p. A1.

2. Stephanie Clifford and Stephanie Rosenbloom, “Wal-Mart to Offer Its Workers a College Program,” The New York Times, (June 3, 2010), p. B4.

3. Elissa Gootman, “Frustrations With Mayor Are Backdrop to Nominee Uproar,” New York Times (November 25, 2010). P. A28.

4. Editorial, “The Mayor and the Chancellor,” New York Times, (November 24, 2010), p. A30.

5. Elissa Gootman, “Frustrations With Mayor Are Backdrop to Nominee Uproar,” New York Times (November 25, 2010). P. A28.

6. See Steiner’s 12=page defense for granting the waiver online here.

7. Cited in Javier C. Hernandez, “State Grants Waiver for Schools Chancellor,” New York Times (November 29, 2010).

Within a few days, it became obvious why Black had been chosen by Bloomberg. In an interview reported in The New York Times, she asked her critics to simply give her a chance. And, yet, she made quite clear that she would pursue the same punishing neoliberal policies instituted by her predecessor, Chancellor Joe Klein. According to Black, she “planned to continue Mr. Klein’s efforts to increase the robustness of teacher evaluations, reconsider the policy of life time tenure and seek to change the law that requires layoffs to be determined by seniority.” In other words, she will use the same slash-and-burn policies made famous by neoliberal educational leaders such as Michele Rhee, the controversial former chancellor of Washington, DC, schools. Simply put, she will eliminate tenure for teachers, disregard seniority and the job protections it offers, continue high-stakes testing modes of pedagogy, tie teacher evaluations to stripped-down empirical evaluations, close schools that are underserved and promote the opening of charter schools.

8. David W. Chen and Javier C. Hernandez, “A Classics Buff Agonizes Over Challenge to Mayor,” New York Times (November 24, 2010), p. A27.

9. David W. Chen and Javier C. Hernandez, “A Classics Buff Agonizes Over Challenge to Mayor,” New York Times (November 24, 2010), p. A27.

10. For a puff piece that spells out and celebrates Steiner’s neoliberal position on education and some of the policies he has implemented in accordance with it, see Kevin Carey, “‘Teacher U’: A New Modal in Employer-Led Higher Education,” The Chronicle of Higher Education, (December 13, 2010). Online here.

11. Sam Dillon, “Teachers Ratings Get New Look, Pushed by a Rich Watcher,” New York Times (December 4, 2010), p. A1.

12. I want to thank my colleague David Price for bringing Gates’ article to my attention and for his comments on the issue, some of which I have used.

13. Martha C. Nussbaum, “Not for Profit: Why Democracy Needs the Humanities,” (New Jersey: Princeton University Press, 2010), p. 2.

Cancun Climate Conference ‘using as much energy as a village for a year’ (via Aftermath News)

In Uncategorized on December 8, 2010 at 5:50 pm

Oldspeak: Ironic. To Say the least. 😐 Corporate controlled governments and monied interests are meeting right now to figure out how to further commodify and enclose the commons and exploit indigenous peoples around the world, in the guise of “regulating carbon emissions”. Behavior suggests they’re not serious.  Carbon taxing is the next bubble to be inflated and burst. At the world’s expense.

Cancun Climate Conference 'using as much energy as a village for a year' The total carbon footprint of the conference, according to the Mexican Government, is 25,000 tonnes Photo: AFP/GETTY The Cancun Climate Conference is using up as much energy as a small village in England for a whole year. Telegraph | Dec 7, 2010 By Louise Gray, Environment Correspondent Cancun More than 190 countries are meeting in the luxury resort for two weeks to discuss the best way to bring down global carbon emissions. The total carbon foot … Read More

via Aftermath News

Are Palestinians The Last Zionists?

In Uncategorized on December 8, 2010 at 5:08 pm

Oldspeak: “Interesting perspective.”

From Daniel Gavron @ Newsweek:

Are the Palestinians the last Zionists? It would seem so. The situation of Israel has become surreal. Just as we Israelis are making a stupendous effort to ensure the dissolution of the Jewish state, envisioned by Theodor Herzl in 1896, by hanging onto the occupied territories, the Palestinians, led by President Mahmoud Abbas and Prime Minister Salam Fayyad, are working to ensure the survival of the Zionist enterprise by striving to establish a Palestinian ministate in the West Bank and Gaza.

Let us be very clear on just what is happening here: the Palestinians are doing their best to establish a Palestinian state in the West Bank and Gaza on a mere 22 percent of British Mandate for Palestine, which would afford us Zionist Jews a predominantly Jewish state on the remaining 78 percent. This is surely more than we could ever have envisaged when we set out to create a Jewish state and guarantees the survival of the state of Israel. Against this, we Israelis are fighting to keep the West Bank, which will soon result in an Arab majority and the end of a Jewish majority state.

Moreover, the Palestinians are supported by the Arab and Muslim nations, who are offering, via the Arab initiative, normal relations with the Jewish state. They are even prepared to accept our settlement folly by means of land swaps, which will leave a majority of the Israeli Jews who settled illegally in the West Bank during the past four decades inside the state of Israel.

The Muslims, Arabs, and Palestinians are, of course, backed by virtually the entire population of the planet, led by the United States. Secretary of State Hillary Clinton is devoting a significant portion of her time to finding a formula for peace, including an agreement with Syria in return for our withdrawal from the Golan Heights. This will result not only in our dreamed-for Jewish state, but also will go a long way toward neutralizing the threats to Israel posed by Iran, Hizbullah, and Hamas.

And how are we Israelis responding? We are mobilizing every possible means of obstruction and delay. We are continuing to build in locations in the West Bank that will preclude the possibility of establishing a Palestinian state and in East Jerusalem, which is scheduled to be the Palestinian capital—as opposed to West Jerusalem, Israel’s capital. Furthermore, the so-called Israeli majority for peace—the 60-plus percent who support a two-state solution—is so apathetic that we must be regarded as accomplices in the anti-peace path that our right-wing government is currently taking.

We are demanding that the Palestinians declare their support for Israel as “the nation-state of the Jewish people,” which is totally unnecessary, as Israel’s founding document, the Declaration of Independence, already defines the state as “Jewish and democratic.” Thus it is adequate for the Palestinians to recognize the state of Israel, which they already do.

We are insisting that the Palestinians and other Arabs agree in advance to give up the “right of return” of the Palestinian refugees to their former homes in Israel. This also is superfluous, as the Arab initiative makes it clear that the solution to the refugee problem must be just, fair, and (most significantly) “mutually agreed.” It is generally accepted that if there is a significant return of refugees, it will be to Palestine, not to Israel.

And now our latest demand: that the Americans put in writing their promises of aid and support. After decades of firm American support, this last demand is the very personification of chutzpah, and the U.S. administration is calling our bluff by giving us this document.

Following the Holocaust and the wars to establish Israel, it is understandable that we Jews deal cautiously with our Arab neighbors. But we have moved into the realm of paranoia. It is time to seize the remarkable opportunity before us. Peace with Egypt, the strongest Arab state, laid the foundations; peace with Palestine and Syria, backed by the Arab and Muslim nations, will finally place the roof on the Jewish house. The Obama administration’s effort to establish a small Palestinian state, accompanied by withdrawal from the Golan Heights and peace with Syria, will finally ensure survival of the state of Israel. Why are we Israeli Jews trying so hard to prevent it?

Gavron is the author of nine books on Jewish history, Israel, and the Palestinians. His latest is Holy Land Mosaic.

Obama Caves on Tax Cuts, Endorses ‘Bush-McCain Philosophy’

In Uncategorized on December 7, 2010 at 3:11 pm

Oldspeak:”Yet another example of Candidate Obama saying the right thing and President Obama doing the wrong thing. It really is disheartening. But the reality is in the U.S. you’re highly unlikely to be elected president unless you are able to generate vast amounts of money, and are beholden to powerful and monied interests. Far too many elected officials have been bought and paid for to affect far-reaching change for the people who need it most, without first paying tribute to the Corporatocracy.”

From Ari Berman @ The Nation:

During the 2008 presidential campaign, Barack Obama said over and over that he was running to “put an end to the Bush-McCain philosophy.” Campaigning in Colorado just days before the election (see video below), Obama clearly stated his opposition to Bush-era economic policies and ridiculed the idea that “we should give more and more to millionaires and billionaires and hope that it trickles down on everybody else. It’s a philosophy that gives tax breaks to wealthy CEOs and to corporations that ship jobs overseas while hundreds of thousands of jobs are disappearing here at home.”

Now Obama, in a blatant reversal, is preparing to do just that, agreeing to extend the Bush tax cuts for the wealthy [1], which my colleague Chris Hayes accurately calls the “single defining domestic policy of W.”

In 2008, Obama presented himself as a clean break from the Bush and Clinton dynasties and a fresh face for the nation and the world. Yet once in office he packed his White House with holdovers from the Bush and Clinton administrations and continued or even accelerated key Bush-era policies, whether in the realm of counterterrorism, Afghanistan or offshore drilling. The latest “compromise” on the Bush tax cuts, extending the upper-income tax cuts for two years in exchange for the continuation of unemployment benefits, is simply the latest in a series of capitulations from the Obama White House.

Obama and Congressional Democrats bungled the tax debate [2] from the start, even though it was clearly a winning issue for the president and his party. Even though everyone knew the Bush tax cuts were set to expire at the end of this year, Democrats failed to develop an overall strategy for this issue last summer or force a vote in the Congress before the election—at a time when even Republicans like John Boehner said they’d vote to extend only the middle-class tax cuts if that was their only option. Yet Democrats refused to put the GOP on the spot or talk about the tax cuts during the campaign, blurring what should have been a core distinction between the parties; Democrats for the middle class, Republicans for the rich. As former Ohio Governor Ted Strickland [3] said recently: “If we can’t win that argument we might as well just fold up.”

Once Democrats finally decided to vote on only the middle-class tax cuts, last week, Republicans had all the momentum and the issue had become mere political theater. Even as Congress was voting on the Democrats’ plan, Obama signaled to Republicans that a more favorable deal was just around the corner, giving the GOP no incentive to side with Democrats. The Obama administration’s posture on the tax cuts is eerily similar to its stance on the public option during healthcare reform—the president says he wants the policy, but does absolutely nothing to fight for it, either through his own bully pulpit or on Capitol Hill. Last week, Organizing for America asked Obama supporters to phone bank in support of the DREAM Act, repealing “don’t ask, don’t tell,” and a pay freeze for federal workers [4] (yet another concession to the GOP), but did nothing on the tax front.

So now Obama is planning to spend $60 billion a year on tax cuts for millionaires and billionaires rather than, for example, a national infrastructure plan [5] that would rebuild America and put people back to work. It’s hard to see how the president will benefit either politically or substantively from this latest reversal of policy—caving on the tax cuts will only embolden GOP leaders, who already see Obama as weak and unprincipled, and will further deflate restless Democratic activists and Obama supporters. If this is how Obama plans to govern in the future, we’re in for a rough next two years.

UPDATE: Five major progressive groups–MoveOn, Democracy for America, TrueMajority, Credo Action and the Progressive Campaign Change Committee–are now urging the Senate not to ratify the imminent Obama deal. Says DFA chair Jim Dean: “Voters – and activists – are not buying the notion that tax cuts for high income earners are the only path to extending the middle class tax-cuts. As for any Democratic members of Congress who are going along with extending the tax cuts for high income earners — this is the stuff that primaries are made of.”


Happy As A Hangman

In Uncategorized on December 6, 2010 at 4:54 pm

Oldspeak: “In collapsing societies, the normal state of affairs is defined by “doublethink”: To know and not to know, to be conscious of complete truthfulness while telling carefully constructed lies, to hold simultaneously two opinions which cancelled out, knowing them to be contradictory and believing in both of them…. Innocence is guilt. Reality is illusion. Ignorance is strength. One only need look at the furor caused by the Wikileaks revealations, the efforts by governments to further enrich the wealthy while abandoning and empoverishing the poor, the acceptance of know nothingness and devaluation of critical education, ‘reality television’ replacing naturalistic, honest depictions of life. The madness is all ecompasing ”

From Chris Hedges @ Truthdig:

Innocence, as defined by law, makes us complicit with the crimes of the state. To do nothing, to be judged by the state as an innocent, is to be guilty. It is to sanction, through passivity and obedience, the array of crimes carried out by the state.

To be innocent in America means we passively permit offshore penal colonies where we torture human beings, some of whom are children. To be innocent in America is to acquiesce to the relentless corporate destruction of the ecosystem that sustains the human species. To be innocent in America is to permit the continued theft of hundreds of billions of dollars from the state by Wall Street swindlers and speculators. To be innocent in America is to stand by as insurance and pharmaceutical companies, in the name of profit, condemn ill people, including children, to die. To be innocent in America is refusing to resist wars in Iraq and Afghanistan that are not only illegal under international law but responsible for the murder of hundreds of thousands of people. This is the odd age we live in. Innocence is complicity.

The steady impoverishment and misery inflicted by the corporate state on the working class and increasingly the middle class has a terrible logic. It consolidates corporate centers of power. It weakens us morally and politically. The fraud and violence committed by the corporate state become secondary as we scramble to feed our families, find a job and pay our bills and mortgages. Those who cling to insecure, poorly paid jobs and who struggle with crippling credit card debt, those who are mired in long-term unemployment and who know that huge medical bills would bankrupt them, those who owe more on their houses than they are worth and who fear the future, become frightened and timid. They seek only to survive. They accept the pathetic scraps tossed to them by the corporate elite. The internal and external corporate abuse accelerates as we become every day more pliant.

Our corrupt legal system, perverting the concept that “all men are created equal,” has radically redefined civic society. Citizens, regardless of their status or misfortune, are now treated with the same studied indifference by the state. They have been transformed from citizens to commodities whose worth is determined solely by the market and whose value is measured by their social and economic functions. The rich, therefore, are rewarded by the state with tax cuts because they are rich. It is their function to monopolize wealth and invest. The poor are supposed to be poor. The poor should not be a drain on the resources of the state or the oligarchic elite. Equality, in this new legal paradigm, means we are all treated alike, no matter what our circumstances. This new interpretation of equality, under which the poor are abandoned and the powerful are unchecked, has demolished the system of regulations, legal restraints and services that once protected the underclass from wealthy and corporate predators.

The creation of a permanent, insecure and frightened underclass is the most effective weapon to thwart rebellion and resistance as our economy worsens. Huge pools of unemployed and underemployed blunt labor organizing, since any job, no matter how menial, is zealously coveted. As state and federal social welfare programs, especially in education, are gutted, we create a wider and wider gulf between the resources available to the tiny elite and the deprivation and suffering visited on our permanent underclass. Access to education, for example, is now largely defined by class. The middle class, taking on huge debt, desperately flees to private institutions to make sure their children have a chance to enter the managerial ranks of the corporate elite. And this is the idea. Public education, which, when it functions, gives opportunities to all citizens, hinders a system of corporate neofeudalism. Corporations are advancing, with Barack Obama’s assistance, charter schools and educational services that are stripped down and designed to train classes for their appropriate vocations, which, if you’re poor means a future in the service sector. The eradication of teachers’ unions, under way in states such as New Jersey, is a vital component in the dismantling of public education. Corporations know that good systems of public education are a hindrance to a rigid caste system. In corporate America everyone will be kept in his or her place.

The beating down of workers, exacerbated by the prospect that unemployment benefits will not be renewed for millions of Americans and that public sector unions will soon be broken, has transformed those in the working class from full members of society, able to participate in its debates, the economy and governance, into terrified people in fragmented pools preoccupied with the struggle of private existence. Those who are economically broken usually cease to be concerned with civic virtues. They will, history has demonstrated, serve any system, no matter how evil, and do anything for a salary, job security and the protection of their families.

There will be sectors of the society that, as the situation worsens, attempt to rebel. But the state can rely on a huge number of people who, for work and meager benefits, will transform themselves into willing executioners. The reconfiguration of American society into a corporate oligarchy is conditioning tens of millions not only to passively accept state and corporate crimes, but to actively participate in the mechanisms that ensure their own enslavement.

“Each time society, through unemployment, frustrates the small man in his normal functioning and normal self-respect,” Hannah Arendtwrote in her 1945 essay “Organized Guilt and Universal Responsibility,” “it trains him for that last stage in which he will willingly undertake any function, even that of hangman.”

Organs of state repression do not rely so much on fanatics and sadists as ordinary citizens who are desperate, who need a job, who are willing to obey. Arendt relates a story of a Jew who is released from Buchenwald. The freed Jew encountered, among the SS men who gave him certificates of release, a former schoolmate, whom he did not address but stared at. The SS guard spontaneously explained to his former friend: “You must understand, I have five years of unemployment behind me. They can do anything they want with me.”

Arendt also quotes an interview with a camp official at Majdanek. The camp official concedes that he has assisted in the gassing and burying of people alive. But when he is asked, “Do you know the Russians will hang you?” he bursts into tears. “Why should they? What have I done?” he says.

I can imagine, should the rule of law ever one day be applied to the insurance companies responsible for the deaths of tens of thousands of Americans denied medical care, that there will be the same confused response from insurance executives. What is frightening in collapsing societies is not only the killers, sadists, murderers and psychopaths who rise up out of the moral swamp to take power, but the huge numbers of ordinary people who become complicit in state crimes. I saw this during the war in El Salvador and the war in Bosnia. It is easy to understand a demented enemy. It is puzzling to understand a rational and normal one. True evil, as Goethe understood, is not always palpable. It is “to render invisible another human consciousness.”

Alexander Solzhenitsyn in his book “The Gulag Archipelago” writes about a close friend who served with him in World War II. Solzhenitsyn’s defiance of the Communist regime after the war saw him sent to the Soviet gulags. His friend, loyal to the state, was sent there as an interrogator. Solzhenitsyn was forced to articulate a painful truth. The mass of those who serve systems of terrible oppression and state crime are not evil. They are weak.

“If only there were vile people … committing evil deeds, and if it were only necessary to separate them from the rest of us and destroy them,” Solzhenitsyn wrote. “But the line dividing good and evil cuts through the heart of every human being. And who is willing to destroy a piece of his own heart?”

The expansions of public and private organs of state security, from Homeland Security to the mercenary forces we are building in Iraq and Afghanistan, to the burgeoning internal intelligence organizations, exist because these “ordinary” citizens, many of whom are caring fathers and mothers, husbands and wives, sons and daughters, have confused conformity to the state with innocence. Family values are used, especially by the Christian right, as the exclusive definition of public morality. Politicians, including President Obama, who betray the working class, wage doomed imperial wars, abandon families to home foreclosures and bank repossessions, and refuse to restore habeas corpus, are morally “good” because they are loyal husbands and fathers. Infidelity, instead of corporate murder, becomes in this absurd moral reasoning the highest and most unforgivable offense.

The bureaucrats who maintain these repressive state organs, who prosecute the illegal wars in Iraq and Afghanistan or who maintain corporate structures that perpetuate human suffering, can define themselves as good—as innocent—as long as they are seen as traditional family men and women who are compliant to the laws of the state. And this redefinition of civic engagement permits us to suspend moral judgment and finally common sense. Do your job. Do not ask questions. Do not think. If these bureaucrats were challenged for the crimes they are complicit in committing, including the steady dismantling of the democratic state, they would react with the same disbelief as the camp guard at Majdanek.

Those who serve as functionaries within corporations such as Goldman Sachs or ExxonMobil and carry out crimes ask of their masters that they be exempted from personal responsibility for the acts they commit. They serve corporate structures that kill, but, as Arendt notes, the corporate employee “does not regard himself as a murderer because he has not done it out of inclination but in his professional capacity.” At home the corporate man or woman is meek. He or she has no proclivity to violence, although the corporate systems they serve by day pollute, impoverish, maim and kill.

Those who do not carry out acts of rebellion, no matter how small or seemingly insignificant, are guilty of solidifying and perpetuating these crimes. Those who do not act delude themselves into believing they are innocent. They are not.

Chris Hedgesis a senior fellow at The Nation Institute and a weekly columnist for Truthdig. His newest book is “Death of the Liberal Class.” On Dec. 16 he, Daniel Ellsberg, Medea Benjamin, Ray McGovern, Dr. Margaret Flowers and several others will hold a rally across from the White House to protest the wars in Iraq and Afghanistan and attempt to chain themselves to the White House fence.  More information on the Dec. 16 protest can be found at www.stopthesewars.org.

Why Wikileaks Is Good For Democracy

In Uncategorized on December 1, 2010 at 12:50 pm

Oldspeak: “Information is the currency of democracy.  -Thomas Jefferson. The U.S. has been going in the wrong direction for years by classifying millions of documents as secrets. Wikileaks and other media that report these so-called secrets will embarrass people, yes. Wikileaks and other media will make leaders uncomfortable, yes. But embarrassment and discomfort are small prices to pay for a healthier democracy. ”

From Bill Quigley @ Truthout:

Since 9/11, the US government, through Presidents Bush and Obama, has increasingly told the US public that “state secrets” will not be shared with citizens. Candidate Obama pledged to reduce the use of state secrets, but President Obama continued the Bush tradition. The courts, Congress and international allies have gone meekly along with the escalating secrecy demands of the US Executive.

By labeling tens of millions of documents secret, the US government has created a huge vacuum of information.

But information is the lifeblood of democracy. Information about government contributes to a healthy democracy. Transparency and accountability are essential elements of good government. Likewise, “a lack of government transparency and accountability undermines democracy and gives rise to cynicism and mistrust,” according to a 2008 Harris survey commissioned by the Association of Government Accountants.

Into the secrecy vacuum stepped Private Bradley Manning, who, according to the Associated Press, was able to defeat “Pentagon security systems using little more than a Lady Gaga CD and a portable computer memory stick.”

Manning apparently sent the information to Wikileaks – a nonprofit media organization that specializes in publishing leaked information. Wikileaks in turn shared the documents to other media around the world, including The New York Times, and published much of the documents’ contents on its website.

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Despite criminal investigations by the U.S. and other governments, it is not clear that media organizations like Wikileaks can be prosecuted in the U.S., in light of the First Amendment. Recall that the First Amendment says: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or of the right of the people peaceably to assemble, and to petition the government for a redress of grievances.”

Outraged politicians are claiming that the release of government information is the criminal equivalent of terrorism and puts innocent people’s lives at risk. Many of those same politicians authorized the modern equivalent of carpet bombing of Baghdad and other Iraqi cities, the sacrifice of thousands of lives of soldiers and civilians and drone assaults on civilian areas in Afghanistan, Pakistan and Yemen. Their anger at a document dump, no matter how extensive, is more than a little suspect.

Everyone, including Wikileaks and the other media reporting on what the documents reveal, hopes that no lives will be lost because of this flood of information. So far, it appears those hopes have been met: McClatchy Newspapers reported November 28, 2010, that “US officials conceded that they have no evidence to date that the [prior] release of documents led to anyone’s death.”

The U.S. has been going in the wrong direction for years by classifying millions of documents as secrets. Wikileaks and other media that report these so-called secrets will embarrass people, yes. Wikileaks and other media will make leaders uncomfortable, yes. But embarrassment and discomfort are small prices to pay for a healthier democracy.

Wikileaks has the potential to make transparency and accountability more robust in the U.S. That is good for democracy.

Obama’s Greatest Betrayal: The Coming Sell-Out To The Super Rich And What It Means For The Rest Of Us

In Uncategorized on December 1, 2010 at 11:42 am

Oldspeak:“The wealthy now see victory within reach, through regressive taxation and the slashing of public spending on anything except more bailouts for the financial oligarchy. Why in the midst of the most dire economic crisis since the great depression is the Obama Administration pushing a policy that’s been proven to be deficit expanding money pit? ”

From Michael Hudson @ Counterpunch:

Now that President Obama is almost celebrating his bipartisan willingness to renew the tax cuts for the super-rich enacted under George Bush ten years ago, it is time for Democrats to ask themselves how strongly they are willing to oppose an administration that looks like Bush-Cheney III. Is this what they expected by Mr. Obama’s promise to rise above partisan politics – by ruling on behalf of Wall Street, now that it is the major campaign backer of both parties?

It is a reflection of how one-sided today’s class war has become that Warren Buffet has quipped that “his” side is winning without a real fight being waged. No gauntlet has been thrown down over the trial balloon that the president and his advisor David Axelrod have sent up over the past two weeks to extend the Bush tax cuts for the wealthiest 2% for “just” two more years. For all practical purposes the euphemism “two years” means forever – at least, long enough to let the super-rich siphon off enough more money to bankroll enough more Republicans to be elected to make the tax cuts permanent.

Mr. Obama seems to be campaigning for his own defeat! Thanks largely to the $13 trillion Wall Street bailout – while keeping the debt overhead in place for America’s “bottom 98%” – this happy 2% of the population now receives an estimated three quarters (~75%) of the returns to wealth (interest, dividends, rent and capital gains).

This is nearly double what it received a generation ago. The rest of the population is being squeezed, and foreclosures are rising.
Charles Baudelaire quipped that the devil wins at the point where he manages convince the world that he doesn’t exist. Today’s financial elites will win the class war at the point where voters believe it doesn’t exist – and believe that Mr. Obama is trying to help them rather than shepherd them into debt peonage as the economy settles into debt deflation.

We are dealing with shameless demagogy. The financial End Time has arrived, but Mr. Obama’s happy-talk pretends that “two years” will get us through the current debt-induced depression. The Republican plan is to make more Congressional and Senate gains in 2012 as Mr. Obama’s former supporters “vote with their backsides” and stay home, as they did earlier this month. So “two years” means forever in politician-talk. Why vote for a politician who promises “change” but is merely an exclamation mark for the Bush-Cheney policies from Afghanistan and Iraq to Wall Street’s Democratic Leadership Council on the party’s right wing? One of its leaders, after all, was Mr. Obama’s Senate mentor, Joe Lieberman.

The second pretense is that cutting taxes for the super-rich is necessary to win Republican support for including the middle class in the tax cuts. It is as if the Democrats never won a plurality in Congress. (One remembers George W. Bush with his mere 50+%, pushing forward his extremist policies on the logic that: “I’ve got capital, and I’m using it.” What he had, of course, was Democratic Leadership Committee support.) The pretense is “to create jobs,” evidently to be headed by employment of shipyard workers to build yachts for the nouveau riches and sheriff’s deputies to foreclose on the ten million Americans whose mortgage payments have fallen into arrears. It sounds Keynesian, but is more reminiscent of Thomas Robert Malthus’s lugubrious claim (speaking for Britain’s landed aristocracy) that landlords would keep the economy going by using their rental income (to be protected by high agricultural tariffs) to hire footmen and butlers, tailors and carriage-makers.

It gets worse. Mr. Obama’s “Bush” tax cut is only Part I of a one-two punch to shift taxes onto wage earners. Congressional economists estimate that extending the tax cuts to the top 2% will cost $700 to $750 billion over the next decade or so. “How are we going to go out and borrow $700 billion?” Mr. Obama asked Steve Croft on his Sixty Minutes interview on CBS last week.

It was a rhetorical question. The President has appointed a bipartisan commission (right-wingers on both sides of the aisle) to “cure” the federal budget deficit by cutting back social spending – to pay yet more bailouts to the economy’s financial wreckers. The National Commission on Fiscal Responsibility and Reform might better be called the New Class War Commission to Scale Back Social Security and Medicare Payments to Labor in Order to Leave more Tax Revenue Available to Give Away to the Super-Rich. A longer title than the Deficit-Reduction Commission used by media friendlies, but sometimes it takes more words to get to the heart of matters.

The political axiom at work is “Big fish eat little fish.” There’s not enough tax money to continue swelling the fortunes of the super-rich pretending to save enough to pay the pensions and related social support that North American and European employees have been promised. Something must give – and the rich have shown themselves sufficiently foresighted to seize the initiative. For a preview of what’s in line for the United States, watch neoliberal Europe’s fight against the middle and working class in Greece, Ireland and Latvia; or better yet, Pinochet’s Chile, whose privatized Social Security accounts were quickly wiped out in the late 1970s by the kleptocracy advised by the Chicago Boys, to whose monetarist double-think Mr. Obama’s appointee Ben Bernanke has just re-pledged his loyalty.

What is needed to put Mr. Obama’s sell-out in perspective is the pro-Wall Street advisors he has chosen – not only Larry Summers, Tim Geithner and Ben Bernanke (who last week reaffirmed his loyalty to Milton Friedman’s Chicago School monetarism), but by stacking his Deficit Reduction Commission with outspoken advocates of cutting back Social Security, Medicare and other social spending. Their ploy is to frighten the public with a nightmare of $1 trillion deficit to pay retirement income over the next half century – as if the Treasury and Fed have not just given Wall Street $13 trillion in bailouts without blinking an eye. President Obama’s $750 billion tax giveaway to the wealthiest 2% is mere icing on the cake that the rich will be eating when the bread lines get too long.

To put matters in perspective, bear in mind that interest on the public debt (that Reagan-Bush quadrupled and Bush-Obama redoubled) soon will amount to $1 trillion annually. This is tribute levied on labor – increasing the economy’s cost of living and doing business – paid for losing the fight for economic reform and replacing progressive taxation with regressive neoliberal tax policy. As for military spending in the Near East, Asia and other regions responsible for much of the U.S. balance-of-payments deficit, Congress will always rise to the occasion and defer to whatever foreign threat is conjured up requiring new armed force.

It’s all junk economics. Running a budget deficit is how modern governments inject the credit and purchasing power needed by economies to grow. When governments run surpluses, as they did under Bill Clinton (1993-2000), credit must be created by banks. And the problem with bank credit is that most is lent, at interest, against collateral already in place. The effect is to inflate real estate and stock market prices. This creates capital gains – which the “original” 1913 U.S. income tax treated as normal income, but which today are taxed at only 15% (when they are collected at all, which is rarely in the case of commercial real estate). So today’s tax system subsidizes the inflation of debt-leveraged financial and real estate bubbles.

The giveaway: the Commission’s position on tax deductibility for mortgage interest

The Obama “Regressive Tax” commission spills the beans with its proposal to remove the tax subsidy for high housing prices financed by mortgage debt. The proposal moves only against homeowners – “the middle class” – not absentee owners, commercial real estate investors, corporate raiders or other prime bank customers.

The IRS permits mortgage interest to be tax-deductible on the pretense that it is a necessary cost of doing business. In reality it is a subsidy for debt leveraging. This tax bias for debt rather than equity investment (using one’s own money) is largely responsible for loading down the U.S. economy with debt. It encourages corporate raiding with junk bonds, thereby adding interest to the cost of doing business. This subsidy for debt leveraging also is the government’s largest giveaway to the banks, while causing the debt deflation that is locking the economy into depression – violating every precept of the classical drive for “free markets” in the 19th-century. (A “free market” meant freedom from extractive rentier income, leading toward what Keynes gently called “euthanasia of the rentier.” The Obama Commission endows rentiers atop the economy with a tax system to bolster their power, not check it – while shrinking the economy below them.)

Table 7.11 of the National Income and Product Accounts (NIPA) reports that total monetary interest paid in the U.S. economy amounted to $3,240 billion in 2009. Homeowners paid just under a sixth of this amount ($572 billion) on the homes they occupied. Mr. Obama’s commission estimates that removing the tax credit on this interest would yield the Treasury $131 billion in 2012.

There is in fact a good logic for stopping this tax credit. The mortgage-interest tax deduction does not really save homeowners money. It is a shortsighted illusion. What the government gives to “the homeowner” on one hand is passed on to the mortgage banker by “the market” process that leads bidders for property to pledge the net available rental value to the banks in order to obtain a loan to buy the home (or an office building, or an entire industrial company, for that matter.) “Equilibrium” is achieved at the point where whatever rental value the tax collector relinquishes becomes available to be capitalized into bank loans.

This means that what appears at first as “helping homeowner” afford to pay mortgages turns out merely to enable them to afford to pay more interest to their bankers. The tax giveaway uses homebuyers as “throughputs” to transfer tax favoritism to the banks.

It gets worse. By removing the traditional tax on real estate, state, local and federal governments need to tax labor and industry more, by transforming the property tax onto income and sales taxes. For banks, this is transmuting tax revenue into gold – into interest. And as for the home-owning middle class, it now has to pay the former property tax to the banker as interest, and also to pay the new taxes on income and sales that are levied to make up for the tax shift.

I support removing the tax favoritism for debt leveraging. The problem with the Deficit Commission is that it does not extend this reform to the rest of the economy – to the commercial real estate sector, and to the corporate sector.

The argument is made that “The rich create jobs.” After all, somebody has to build the yachts. What is missing is the more general principle: Wealth and income inequality destroy job creation. This is because beyond the wealthy soon reach a limit on how much they can consume. They spend their money buying financial securities – mainly bonds, which end up indebting the economy. And the debt overhead is what is pushing today’s economy into deepening depression.

Since the 1980s, corporate raiders have borrowed high-interest “junk bond” credit to take over companies and make money by stripping assets, cutting back long-term investment, research and development, and paying out depreciation credit to their financiers. Financially parasitized companies use corporate income to buy back their stock to support its price – and hence, the value of stock options that financial managers give themselves – and borrow yet more money for stock buybacks or simply to pay out as dividends. When the process has run its course, they threaten their work force with bankruptcy that will wipe out its pension benefits if employees do not agree to “downsize” their claims and replace defined-benefit plans with defined-contribution plans (in which all that employees know is how much they pay in each month, not what they will get in the end). By the time this point has been reached, the financial managers have paid themselves outsized salaries and bonuses, and cashed in their stock options – all subsidized by the government’s favorable tax treatment of debt leveraging.

The attempted raids on McDonalds and other companies in recent years provide object lessons in this destructive financial policy of “shareholder activists.” Yet Mr. Obama’s Deficit Reduction Commission is restricting its removal of tax favoritism for debt leveraging only for middle class homeowners, not for the financial sector across the board. What makes this particularly absurd is that two thirds of homeowners do not even itemize their deductions. The fiscal loss resulting from tax deductibility of interest stems mainly from commercial investors.

If the argument is correct (and I think it is) that permitting interest to be tax deductible merely “frees” more revenue to pay interest to banks – to capitalize into yet higher loans – then why isn’t this principle even more applicable to the Donald Trumps and other absentee owners who seek always to use “other peoples’ money” rather than their own? In practice, the “money” turns out to be bank credit whose cost to the banks is now under 1%. The financial-fiscal system is siphoning off rental value from commercial real estate investment, increasing the price of rental properties, commercial real estate, and indeed, industry and agriculture.

Alas, the Obama administration has backed the Geithner-Bernanke policy that “the economy” cannot recover without saving the debt overhead. The reality is that it is the debt overhead that is destroying the economy. So we are dealing with the irreconcilable fact that the Obama position threatens to lower living standards from 10% to 20% over the coming few years – making the United States look more like Greece, Ireland and Latvia than what was promised in the last presidential election.

Something has to give politically if the economy is to change course. More to the point, what has to give is favoritism for Wall Street at the expense of the economy at large. What has made the U.S. economy uncompetitive is primarily the degree to which debt service has been built into the cost of living and doing business. Post-classical “junk economics” treats interest and fees as payment for the “service” for providing credit. But interest (like economic rent and monopoly price extraction) is a transfer payment to bankers with the privilege of credit creation. The beneficiaries of providing tax favoritism for debt are the super-rich at the top of the economic pyramid – the 2% whom Mr. Obama’s tax giveaway will benefit by over $700 billion.

If the present direction of tax “reform” is not reversed, Mr. Obama will shed crocodile tears for the middle class as he sponsors the Deficit Reduction Commission’s program of cutting back Social Security and revenue sharing to save states and cities from defaulting on their pensions. One third of U.S. real estate already is reported to have sunk into negative equity, squeezing state and local tax collection, forcing a choice to be made between bankruptcy, debt default, or shifting the losses onto the shoulders of labor, off those of the wealthy creditor layer of the economy responsible for loading it down with debt.

Critics of the Obama-Bush agenda recall how America’s Gilded Age of the late 19th century was an era of economic polarization and class war. At that time the Democratic leader William Jennings Bryan accused Wall Street and Eastern creditors of crucifying the American economy on a cross of gold. Restoration of gold at its pre-Civil War price led to a financial war in the form of debt deflation as falling prices and incomes received by farmers and wage labor made the burden of paying their mortgage debts heavier. The Income Tax law of 1913 sought to rectify this by only falling on the wealthiest 1% of the population – the only ones obliged to file tax returns. Capital gains were taxed at normal rates. Most of the tax burden therefore fell on finance, insurance and real estate (FIRE) sector.

The vested interests have spent a century fighting back. They now see victory within reach, by perpetuating the Bush tax cuts for the wealthiest 2%, phasing out of the estate tax on wealth, the tax shift off property onto labor income and consumer sales, and slashing public spending on anything except more bailouts and subsidies for the emerging financial oligarchy that has become Mr. Obama’s “bipartisan” constituency.

What we need is a Futures Commission to forecast just what will the rich do with the victory they have won. As administered by President Obama and his designated appointees Tim Geithner and Ben Bernanke, their policy is financially and fiscally unsustainable. Providing tax incentives for debt leveraging – for most of the population to go into debt to the rich, whose taxes are all but abolished – is shrinking the economy. This will lead to even deeper financial crises, employer defaults and fiscal insolvency at the state, local and federal levels. Future presidents will call for new bailouts, using a strategy much like going to military war. A financial war requires an emergency to rush through Congress, as occurred in 2008-09. Mr. Obama’s appointees are turning the U.S. economy into a Permanent Emergency, a Perpetual Ponzi Scheme requiring injections of more and more Quantitative Easing to to rescue “the economy” (Mr. Obama’s euphemism for creditors at the top of the economic pyramid) from being pushed into insolvency. Mr. Bernanke’s helicopter flies only over Wall Street. It does not drop monetary relief on the population at large.


Michael Hudson, a former Wall Street Journal reporter, is a staff writer at the Center for Public Integrity (http://www.publicintegrity.org), a nonprofit journalist organization. He is the author of “THE MONSTER: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America – And Spawned a Global Crisis” (2010, Times Books)