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Sun

25

Apr

2010

A Geezer’s Challenge to President Obama: How About a Rebellion At the Top?
Sunday, 25 April 2010 20:59
by Richard W. Behan

Mr. President, the people of your country are restive, surly, very angry, and exasperated. We will soon rise in open rebellion, unless you do so first.

Thirty million of us have no jobs, by some counts. Fifty million of us live in poverty. One in four of our children subsists on food stamps. Millions of us have lost our homes, and more soon will. Forty five thousand of us succumb each year to preventable deaths. Personal bankruptcies are skyrocketing. Eleven percent of American families are “food insecure”—hungry.

With this appalling national disgrace at center stage, Washington showered the Wall Street banks with trillions of our tax dollars. Then it handed a windfall to the healthcare industry: nearly a trillion dollars over the next decade in direct subsidies, and a guarantee of 32 million new customers, forced by law to buy health insurance.

Public benefits in these actions may be visible but they are trivial in comparison: beyond question, corporate interests take precedence today over those of the American people. With your own words, Mr. President, you have acknowledged this reality:

The system we have now might work for the powerful and well connected interests that have run Washington for far too long, but I don’t. I work for the American people. I didn’t come here to do the same thing we’ve been doing or to take small steps forward, I came to provide the sweeping change that this country demanded when it went to the polls in November.

You promised this transformation—a rebellion in fact—during your first days in office, but then you experienced first hand the corporate stranglehold: in developing any legislation addressing public needs, corporate interests must first be accommodated and their financial welfare assured. That’s the point of departure. When this became starkly apparent your pragmatism overrode your promise.

The perversion of democracy will not be tolerated much longer. The elements for domestic violence in our country are festering. Early sparks are visible, in the small-plane suicide attack on the IRS office in Texas, in the shootout in the Pentagon, in the tuition-increase riots in California, even among the Tea Party protestors—misguided, misinformed, but they see democracy jeopardized, too, and they’re toting guns.
 

If we are to avoid widespread violence, Mr. President, you must revisit your promise and stake your presidency on delivering its game-changing revolution.

What we need is not more incrementalism, but quantum change, and that is not typical of day-to-day policymaking in Washington. So, as presidents have done in other acute crises, you will need first to take your case directly to the American people—perhaps in a series of televised chats. You can describe the politics of hegemonic corporate influence. Then you can declare your open rebellion against it, and recruit the active support of the American people.

Mr. President, my children are older than you are, so I have the time-honored license of senior citizens to speak in somewhat patronizing terms.

This I assert: we once lived better lives in America. Two indisputable, indicative facts bear this out: we raised our families on a single income, and most of us were skinny.

The economy displayed a fair approximation of free market capitalism. Millions of small businesses—highly localized producers and vendors—competed vigorously for our dollars as consumers and for our time and skills as workers. (They were not transnational mega-corporations.)

Because of this, living costs were reasonable and incomes were decent; a family lived comfortably on a single income. And consumers made autonomous decisions, wise and healthy choices; an epidemic of obesity was inconceivable and nowhere in sight.

Our political system was controlled by and served the American voters, not least because of the facile economics of political campaigning: money didn’t count for much. Lapel buttons, posters, and whistle-stop speechmaking didn’t cost a great deal, so year-round fund raising was unnecessary. Candidates spent their time instead hearing the problems and aspirations of their voters, and these dialogs influenced heavily their behavior in office.

Public policy was made in the public interest, accordingly. Taxation was progressive, so the distribution of wealth and incomes was equitable. Primary and secondary education was public, first-rate, and free. State universities were heavily subsidized and eminently affordable. Transportation and communication infrastructure was built and maintained to high standards. Public parks were well maintained. Community hospitals were commonplace. Care for the indigent was provided with grace and generosity. And a minimal standing army and navy were sufficient to provide national security.

Those old days were good indeed, Mr. President. There was little anger, exasperation, or threat of violence among the American people at large. (Yes, there were inequities and injustices, but they were particularized, not systemic.)

Businesses were managed primarily to provide quality goods and dependable services, and satisfactory profit levels resulted; but eventually “satisfactory” wasn’t good enough. With the arrival of “management science,” computers, quantitative decision models, and floods of MBA bean-counters, profit maximization came into view and was universally put into practice. American managers shifted their emphasis from the quality and competitiveness of output to the costs of production, and cost-economies were sought in every conceivable dimension.

Perhaps the most vigorously pursued was the economy of scale. An unprecedented wave of mergers and acquisitions concentrated the nation’s productive and marketing capacities into fewer and fewer, but inevitably larger and larger corporate hands. (Anti-trust laws were essentially ignored.)

Very promising also was the potential for externalizing costs, shifting them to society at large (think environmental pollution, occupational hazards, tax avoidance).

A sizeable accumulation of public regulation stood in the way of this, but it soon came under attack—notably by the free-market fundamentalism introduced in the Reagan Revolution. Government was the problem, not the solution, the argument went, and the mantra of deregulation was recited for most of three decades—to “free the markets.”

It wasn’t the markets that were freed, Mr. President. It was the American corporation that was freed, to rampage through the economy no matter the social costs or macroeconomic effects, in a profit-maximizing frenzy.

No practice of liberated corporations did more structural and permanent damage to the American economy than arbitraging labor or “offshoring”—the wholesale exporting of jobs. Corporations enjoyed immensely larger profits immediately, but in the process they simultaneously and systematically destroyed their markets. The unemployed workers in Detroit could no longer buy automobiles, and neither could the workers paid subsistence wages to build them in Mexico. Repeat this in dozens of industries and you produce the hollowed-out economy we witness today; it is likely beyond repair.

As the economic power of American corporations increased, so did their ability to manipulate cultural norms, through massive nationwide and incessant advertising campaigns. Epidemic obesity was hardly the result of free, autonomous consumer choice: the ubiquitous high-fat, habit-forming, pathogenic foods were branded and marketed successfully to be accepted as routine.

The market power of accreting corporations increased as competitive pressures declined, and they used it, both to depress wages and to increase prices. Raising a family became progressively more difficult on a single income. Soon the wife and mother went to work.

No, deregulation did not “free” the markets: it led to their corporate capture. Free-market capitalism became managed-market capitalism in which the corporate producer was sovereign, no longer the consumer.

The American people surrendered their primacy in politics as well.

American corporations once were expressly prohibited from contributing to political campaigns. But the voting reform legislation in the 1970’s changed that, allowing corporations to form political action committees, and thereby channel funds to their preferred candidates. That capability meant little, however, until the economics of campaigning changed dramatically.

The localized, whistle-stop politics of earlier times morphed into nationwide extravaganzas of vastly more expensive televised perception management. Now an immense amount of money became an unconditional necessity for a successful campaign. American corporations could easily provide it, they did, and still do. Today, corporate-source funding dominates campaign finance, and it alters profoundly the behavior of elected officials: the interests of corporate benefactors become paramount. Constituents’ wishes may be of some casual interest, but corporate money is indispensable.

American representative democracy has disappeared, too. In its place is a crypto-fascism, a mutually beneficial conflation of government and mega-corporations, heavily concentrated in the finance, energy, health care, and defense industries. These are the “powerful and well-connected interests” you spoke of, Mr. President. Policy enacted ostensibly in the public interest must first provide for the creation, protection, or enhancement of profit opportunities for American corporations.

This is utterly perverse governance, Mr. President, and it is driving the American people to the flashpoint of rebellion. You still have an epic opportunity to repudiate it, as you said you would, but “sweeping change” will call for unprecedented Presidential courage.

To keep the promise, you will need first to transform your Administration, to commit it explicitly to a counter-corporate, public interest agenda. Those officials willing to honor the marching order can remain. Those unwilling or unable must depart. In the eyes of many, that could be a sizeable group, but the calls are yours to make, Mr. President.

Next you will need to talk directly to the American people to propose, explain, and rally popular support for a breathtaking agenda of policy redirection, expressed in law. If you do this well—you are capable of brilliance—we will press our Congressional delegations to enact it.

Few Senators or Representatives, however, can afford to support a counter-corporate agenda while their incumbencies depend on corporate largesse. The first task is to sever that connection.

Corporate contributions cannot immediately be outlawed again, especially since Citizens United, but they can be made irrelevant, by adopting a feature of British campaign law. Candidates in Britain are not limited in what they can collect for their campaigns, but limited instead in what they can spend.

Suppose we impose the British spending limit—a bit over £7,000, say $10,500. (That won’t buy much television time, but it is ample to communicate in print everything American voters truly need to know: the candidate’s qualifications and positions on the issues.) Candidates don’t need what they can’t spend, so the corporate millions are rendered useless.

Well, not quite. Citizens United still stands. Corporations could still fund vicious media campaigns of punishment—or lavish ones of support. A final, definitive step is called for.

Freed of the need for corporate campaign money, the Congress can now attack the root causes of corporate hegemony—the ludicrous concept of legal personhood for corporations and the absurd derivative, their Constitutional rights—and legislate to extinguish both. The Roberts Supreme Court will salivate to strike the law down, but nullifying personhood has two unassailable defenses.

Thom Hartmann’s book Unequal Protection unearthed the utter fraudulence of corporate personhood. Bestowed allegedly in the Santa ClaraCounty decision of 1886, Hartmann discovered it is technically but unalterably illegal. And the Founding Fathers in their wildest nightmares would not have granted—or foreseen—Constitutional rights for corporations. This is abundantly clear in their writings. Deny all this, Mr. Chief Justice.

With personhood disallowed, nothing stands in the way of voiding Citizens United–-in statute: prohibiting corporate spending for any political purpose.

Mr. President, Washington is now rid of corporate dominance. You and the Congress are free once more to govern in the public interest.

But the pathologies of 30 years of deregulation remain, displayed in today’s appalling social and economic injustices. You cannot undo all the pathologies overnight but you can attack two problems of immediate, screeching concern: affordable health care and employment for every American seeking work.

We need a single-payer healthcare system (you’ve stated its superiority) and a massive program of public works, two very costly new initiatives. Nothing could rebuild the economy and defuse the incipient rebellion sooner than these two in combination.

They could both be financed without borrowing a penny, but a single private corporation, indulging in a legalized form of extortion, stands in the way of doing so.

The corporation is the Federal Reserve Bank, and the extortion results from the greatest giveaway to corporate interests in the nation’s history: the power to create money.

The Federal Reserve Bank is by no means “federal,” a public institution. It is a private corporation, the stock of which is owned by the private member banks in each Federal Reserve District. (53% of the stock is held in the New York District, and a large fraction of that is owned by the bailed-out banks on Wall Street.)

In the Federal Reserve Act of 1913 the Fed was given the power to create money, simply by printing Federal Reserve Notes. The Fed can and does lend money created in this fashion to the U.S. Treasury, through the purchase of Treasury bonds ($300 billion worth, for example, throughout 2009). Then the Fed frequently sells the bonds into the system of member banks. The Treasury is obligated, of course, to pay interest to the banks, and does.

Follow the bouncing ball. Private sector banks collect interest on money another private corporation, the Federal Reserve Bank, did not own, did not earn, did not even have on deposit. The Fed simply created it, the Treasury borrowed it, and the taxpayers pony up the interest charges.

Mr. President, you can use this mechanism of borrowing privately-created money to finance single-payer healthcare and public-works jobs.

Or you can honor the Constitution instead and stop the extortion altogether.

The private creation of money is not what the Founding Fathers had in mind. In Article 1, Section 8 of the Constitution they wrote: “CONGRESS shall have the power to coin money and regulate the value thereof.” (My emphasis, sir, but the Constitution’s words.)

We need to nationalize the Federal Reserve Bank, by one more act of Congress. Now the money “coined”—the Federal Reserve Notes printed—will be public, not private assets. Money so created can be spent into circulation for any public purpose: funding healthcare and public-works jobs, perhaps. Interest free.

Mr. President, if you can establish in statute this public-interest agenda—several procedural laws, several of substance—you will have vanquished the “powerful and well connected interests.” You will have everything you need to “work for the American people.” And so will successive Administrations and Congresses, far into the future.

The opportunity facing you is truly historic; please seize it, or confront the American people in the streets.

Richard W. Behan lives and writes on Lopez Island, off the northwest coast of Washington state. He can be reached at rwbehan@rockisland.com

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