The Neoliberal Racket

George Monbiot traces the origins of neoliberalism and how to seized control of political and economic thought in the West eventually leading to the election of Donald Trump.

At a meeting a few months after Margaret Thatcher became leader of the Conservative party, one of her colleagues, or so the story goes, was explaining what he saw as the core beliefs of conservatism. She snapped open her handbag, pulled out a dog-eared book, and slammed it on the table. “This is what we believe,” she said. A political revolution that would sweep the world had begun.

The book was The Constitution of Liberty by Frederick Hayek. Its publication, in 1960, marked the transition from an honest, if extreme, philosophy to an outright racket. The philosophy was called neoliberalism. It saw competition as the defining characteristic of human relations. The market would discover a natural hierarchy of winners and losers, creating a more efficient system than could ever be devised through planning or by design. Anything that impeded this process, such as significant tax, regulation, trade union activity or state provision, was counter-productive. Unrestricted entrepreneurs would create the wealth that would trickle down to everyone.

[Hayek] begins the book by advancing the narrowest possible conception of liberty: an absence of coercion. He rejects such notions as political freedom, universal rights, human equality and the distribution of wealth, all of which, by restricting the behaviour of the wealthy and powerful, intrude on the absolute freedom from coercion he demands.

Democracy, by contrast, “is not an ultimate or absolute value”. In fact, liberty depends on preventing the majority from exercising choice over the direction that politics and society might take.

...The ultra rich are “scouts”, “experimenting with new styles of living”, who blaze the trails that the rest of society will follow. The progress of society depends on the liberty of these “independents” to gain as much money as they want and spend it how they wish. All that is good and useful, therefore, arises from inequality. There should be no connection between merit and reward, no distinction made between earned and unearned income, and no limit to the rents they can charge.

Inherited wealth is more socially useful than earned wealth: “the idle rich”, who don’t have to work for their money, can devote themselves to influencing “fields of thought and opinion, of tastes and beliefs”. Even when they seem to be spending money on nothing but “aimless display”, they are in fact acting as society’s vanguard.

...Thatcherism and Reaganism were not ideologies in their own right: they were just two faces of neoliberalism. Their massive tax cuts for the rich, crushing of trade unions, reduction in public housing, deregulation, privatisation, outsourcing and competition in public services were all proposed by Hayek and his disciples. But the real triumph of this network was not its capture of the right, but its colonisation of parties that once stood for everything Hayek detested.

...As I warned in April, the result is first disempowerment then disenfranchisement. If the dominant ideology stops governments from changing social outcomes, they can no longer respond to the needs of the electorate. Politics becomes irrelevant to people’s lives; debate is reduced to the jabber of a remote elite. The disenfranchised turn instead to a virulent anti-politics in which facts and arguments are replaced by slogans, symbols and sensation.

...Trump, who has no coherent politics, is not a classic neoliberal. But he is the perfect representation of Hayek’s “independent”; the beneficiary of inherited wealth, unconstrained by common morality, whose gross predilections strike a new path that others may follow. The neoliberal thinktankers are now swarming round this hollow man, this empty vessel waiting to be filled by those who know what they want. The likely result is the demolition of our remaining decencies, beginning with the agreement to limit global warming.

Monbiot thinks that man's better nature will be awakened by the excesses of
Trump and his handlers and that we will finally rise up to resist the neoliberal juggernaut. I wonder if he had to say that. After all, what is the alternative?

We Are, Indeed, Living in Interesting Times

My parents lived through the Great Depression. They lived through World War II. They lived through the Cold War. They lived in "interesting times" fraught with peril and struggle and yet emerged to be called by Tom Brokaw, "the greatest generation."

It was really difficult for me to imagine I might ever live through times even more "interesting" than my parents' and their generation's. Yet I increasingly fear that to be the case.

My parents' era was one of great progressive advancement. Perhaps lulled into complacency by the relative ease and prosperity that befell the post war generations, we have at almost every turn failed to defend that progress that was delivered to us with no sacrifice of any consequence on our part. Easy come, easy go.

We ruled the world in hubris, without regard to what follows, nemesis. And so today we stand unprepared to withstand the several monstrous calamities that loom around us in all directions.

We chose to be guided by a new rule, "Because We Can." At every turn we did whatever we could, as much as we could, as fast as we could. We didn't leave ourselves time to reflect and even ask whether we should.

We even mastered the skill of taking not only what was our fair share but what the next generations might rightly deserve. We've robbed them of their future. We did it because we could.

The transition into what would be known as neo-liberalism was ushered in by three conservative stalwarts - Reagan, Thatcher and Mulroney. All of them abdicated government responsibility to the commercial sector, surrendering critical aspects of national sovereignty along with the other powers given up in a totally one-sided deal. They freed commerce of the restraints of tariffs and trade regulation, endorsing the free movement of capital and, with it jobs and entire industrial sectors. They promised this would yield more and better jobs, higher wages. Environmental and labour laws were tossed on the block.

It would be unfair to blame this on Conservatism. Indeed what these leaders (and those that have followed them) did was antithetical to Conservatism, the political ideology. Just as Communism is rooted in the theories of Karl Marx, Conservatism finds its roots in the 18th century prescriptions of Edmund Burke.

Burke fully grasped the bond between Conservatism and conservation.

All persons possessing any portion of power ought to be strongly and awfully impressed with an idea that they act in trust.

...one of the first and most leading principles on which the commonwealth and the laws are consecrated, is lest the temporary possessors and life-renters in it, unmindful of what they have received from their ancestors, or of what is due to their posterity, should act as if they were the entire masters; that they should not think it among their rights to cut off the entail, or commit waste on the inheritance, by destroying at their pleasure the whole original fabric of their society; hazarding to leave to those who come after them a ruin instead of an habitation—and teaching these successors as little to respect their contrivances, as they had themselves respected the institutions of their forefathers. By this unprincipled facility of changing the state as often, and as much, and in as many ways, as there are floating fancies or fashions, the whole chain and continuity of the commonwealth would be broken. No one generation could link with the other. Men would become little better than the flies of a summer.

It's plain that in Burke's Conservatism, we are "temporary possessors and life-renters" of our world and our society. He enjoins us not to, "think it among (our) rights to cut off the entail, or commit waste on the inheritance, by destroying it at (our) pleasure the whole original fabric of (our) society; hazarding to leave to those who come after (us) a ruin instead of an habitation - and teaching these successors as little to respect their contrivances as we had (ourselves) respected the institutions of (our) forefathers.

Some century and a half later, in Osawatomie, Kansas, Theodore Roosevelt said much the same thing:

Of conservation I shall speak more at length elsewhere. Conservation means development as much as it does protection. I recognize the right and duty of this generation to develop and use the natural resources of our land; but I do not recognize the right to waste them, or to rob, by wasteful use, the generations that come after us. I ask nothing of the nation except that it so behave as each farmer here behaves with reference to his own children. That farmer is a poor creature who skins the land and leaves it worthless to his children. The farmer is a good farmer who, having enabled the land to support himself and to provide for the education of his children, leaves it to them a little better than he found it himself. I believe the same thing of a nation. 

What we call "Conservative" today bears no connection to the conservation ethos of true conservatism. It simply exists to the far right of the dominant political spectrum that besets us today. 

Why should this matter? Because we cannot return to the society envisioned by Burke, Roosevelt and so many others until we break the yoke of neoliberalism that hangs around our necks today and "skins the land and leaves it worthless" to our children. How have we skinned the land? The evidence is everywhere. Climate change is one chilling example. The global freshwater crisis and the draining of our aquifers is another. Oceanic dead zones and the toxic algae blooms that now flourish in our lakes and rivers are others. We're consuming natural resources at 1.7 times Earth's carrying capacity, making up the excess by robbing future generations.

The hard truth is that we can't change this predation, we can't even our keel, until we're prepared to quit what we've been doing. Part of that entails restoring posterity to its rightful place in our government planning and policy. That means restraining our wants, abandoning our "because we can" mentality. It's going to be hard enough meeting our needs before long. Our wants that drive our growth-obsessed governments today will become a bad memory discarded of necessity.

We are indeed living in interesting times. How we come through this is up to us.                      

America's Racist Revolution

“Should any political party attempt to abolish social security, unemployment insurance and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes that you can do these things. Among them are a few Texas oil millionaires, and an occasional politician or businessman from other areas. Their number is negligible and they are stupid.”

Those thoughts from the US president who launched postwar America on the path to building the greatest middle class the world has ever known, the same president whose parting words were a chilling warning about the ascendancy of a malignant threat to democracy, the "military-industrial complex," Dwight D. Eisenhower.

Who could have foreseen back then that the party of Abraham Lincoln, Teddy Roosevelt and Dwight Eisenhower would, under Ronald Reagan, begin a turn to the dark side transforming America into a corporatist, illiberal democracy and leaving the once vaunted middle class a pile of bleached bones?

Salon.com's Conor Lynch writes that, along with the dismemberment of American democracy, the Republicans also ushered in a revolution of racism.

1964 was a pivotal year for the rise of modern conservatism. This was, of course, when the Civil Rights Act passed, and outlawed discrimination based on race, color, religion, sex, or national origin, and ended the racial segregation that had existed for so long in the South. To southerners, this was an enormous betrayal by the Democratic party, especially from President Lyndon Johnson, who was himself a Southern Democrat. The federal government had overstepped in many minds, and this was an opening for the small government conservatives to once again capture the minds of common working class people.

In a truly opportunistic fashion, the Republican Party decided to exploit the racial fears and prejudices of much of the populace, and the Southern Strategy was born. State’s rights had been trampled on by the federal government, so the thinking went, and in 1964, Barry Goldwater ran an election based on anti-New Deal and states’ rights policies. His coded racism was successful, and it earned the votes from five southern states and his own, though he lost every other state to Johnson. Though not as aggressively conservative as Goldwater, Richard Nixon pursued a similar strategy 1968, and won all of the former confederate states, turning the south into the solid Republican territory that it remains today.

Reagan followed similar dog-whistle strategies when he ran, preaching states’ rights at the Neshoba County Fair, just miles from where three civil rights activists had been murdered in 1964, and declaring a rhetorical war on the safety net, adding “welfare queen” to the American lexicon. Today, many benefactors of social welfare programs protest those same programs, some unaware of the racial dynamic that has influenced the current animosity.

Of course, this racial force is more unconscious today than it was when the Southern Strategy began, just as the language has changed over the years. In a candid and originally anonymous interview, Reagan’s 1984 campaign director Lee Atwater described how racial language became more coded over the years:

“You start out in 1954 by saying, “n***er, n***er, n***er,” Said Atwater, “[But] by 1968 you can’t say ‘n***er’ — that hurts you. Backfires. So you say stuff like forced busing, states’ rights and all that stuff. You’re getting so abstract now, you’re talking about cutting taxes, and all these things you’re talking about are totally economic things and a byproduct of them is, blacks get hurt worse than whites.”

The Southern Strategy lives on as never before.  It has lost none of its utility as it continues to serve the interests of the plutocracy, who benefit enormously from a deeply divided, distrustful and powerless society - the precariat - and, of course, today's military-industrial-neoconservative-evangelical-commercial warfighting complex.

As a kid of the 60s, the blatant expression of racism even in America's media is jarring.  It's hard to imagine what's left except to reinstate slavery although they'll probably find a better name for it next time.

And then there's this.  The head of America's Federal Election Commission has all but thrown in the towel on regulating the 2016 elections.

You need to know this. The person in charge of our Federal Election Commission (FEC) says she has pretty much given up hope of regulating the 2016 election. That agency has been unable to reach a conclusion on any key vote, because they are perpetually locked in a 3-to-3 tie along party lines. In an interview with the New York Times, FEC Chairwoman Ann M. Ravel said, "The likelihood of the laws being enforced is slim." She's not even talking about dealing with new rules to address the massive level of corruption in our political system. She's saying that they can't even hold anyone accountable for violating the inadequate rules that are already on the books. According to that recent piece in the Times, "Some commissioners are barely on speaking terms, cross-aisle negotiations are infrequent, and with no consensus on which rules to enforce, the caseload against violators has plummeted.

So, with the US Supreme Court in the bag to corporatism with the Citizens United decision and American mega billionaires like Sheldon Adelson and the Koch Brothers intent on buying the election, supported by state administrations working tirelessly to suppress minority voting, and the election regulator, the Federal Election Commission gridlocked, 2016 is shaping up to be the year America's oligarchs cement their control over the nation and the American people.

Justin, Tommy - Here's Your Talking Points

Look, if you can't nail Harper on this ISIS business, you're not fit to govern anything much less our country.

What you need to do is pry the lid off ISIS.  Show Canadians what lies beneath, who stands behind.

Start with the notion that this seemingly well-organized, well-trained, well-equipped and obviously well-funded ISIS army didn't rise magically from the sands of the Arabian deserts.

ISIS is an armed force that was quite carefully and skillfully manufactured. Somebody, with a lot of money and know-how, raised ISIS.  That sort of undertaking leaves traces - all over the place.

Western intelligence scours that region.  We know the Dr. Frankenstein who created the ISIS monster that now rampages through Syria and Iraq.  We've known all along.  Why not name the fiends?

When Obama refused the Saudis' orders to attack Assad, their chief of skulduggery, prince Bandar bin Sultan vowed to raise an army in the deserts of Jordan to attack Syria. He did precisely as he'd promised. We did nothing to stop him.  We watched him recruit, train, arm and fund an army of religious extremists that would become ISIS.

Let's name the countries we're really up against while we're trying to "degrade" ISIS - Saudi Arabia, Kuwait, Qatar.  Those are the states who created and funded and armed ISIS.  They're the states that will create and fund and arm the next ISIS too.

It's called "state sponsored terrorism."    We're very, very familiar with that term. We've been using it since the Reagan era as a justification to bomb people we don't like.  Regan used it, so did GHW Bush and Clinton.  Shrub Bush used it big time when he castigated Saddam for being in league with al Qaeda.

This time it's our supposed allies that are the states sponsoring this most diabolical terrorism of all.  This isn't their first kick at the can and, judging by the past, it likely won't be their last either.

Ask Harper, straight up, who created ISIS?  Where did it come from?  Who raised this army?  Who trained it?  Where was it trained?  Who equipped and armed it?  Where did the weapons originate?  Who funded it and who directed it?

Ask Harper how we're going to prevent the people who created the ISIS monster and the monsters that preceded it from creating the next monster?  What will that be?  Where are we going to be fighting next?

A decade ago Canada got swept up in the fight against al Qaeda.  Now we're getting swept up in the fight against ISIS.  What iteration of this same degenerate monstrosity are we to fight ten years from now?

Ask Harper how a conventional force, especially an air force, can ever make a real dent in an unconventional force that can morph at will from a conventional, fighting force into an insurgency or even dissolve into gangs and individuals to be reconstituted somewhere else into the next al Qaeda or the next ISIS?

Ask Harper if it's worth attacking the snake, wouldn't it be even more worthwhile to cut off its head and end this once and for all?

We're never going to wipe out the legions of extremists willing to enlist in outfits like ISIS.  They're a dime a thousand.   In fact, the more of them we kill the more of them we recruit to their cause.

We can, however, wipe out the directing minds who stand behind the curtain pulling the levers.  We've been doing their dirty work and covering up for them for way too long and look where that's brought us.

Granted they're the same bunch that just placed a juicy 15-billion dollar order with us for armoured vehicles but, hey, we castigated the French for agreeing to sell helicopter carriers to Vlad Putin during the Ukraine fiasco.  It would be more than slightly hypocritical for us to deliver weapons of war to the Saudis, wouldn't it?

So Justin and Tommy, start asking Harper a few pointed questions.  Then ask him why we keep getting dragged into inconclusive wars fighting Frankenstein's monsters when we could be going after the evil doctor himself?

The Toxic Delusion of Exceptionalism

A great many Americans believe in Creationism but, of all the fanciful myths our southern cousins embrace, none rivals the notion of American exceptionalism. Ronald Reagan parlayed American exceptionalism from myth to outright delusion because of the horde of believers.

The notion of American exceptionalism is grounded in the genuinely exceptional (for their time) concepts that forged the creation of the United States of America. It's why American courts constantly struggle to read into their country's constitution the intentions of the "founding fathers." The idea is that strict adherence to the beliefs of a gaggle of highly privileged, 18th Century white guys somehow assures the security, sanctity and vigor of the state even into the 21st Century.

Ronald Reagan duped his people with the cheap parlour trick of restored exceptionalism. The Reagan vision they so eagerly embraced carried with it an enormous price tag that garnered scant attention. Ronald Reagan came into office when America was the world's largest creditor nation. He left America, eight years later, as the world's largest debtor nation.

In the post WWII era, successive administrations, Republican and Democratic, had steadily whittled away at their nation's debt as a percentage of GDP. Under Reagan's stewardship that unglamorous effort by his predecessors was utterly trashed as the debt to GDP ratio soared madly.

The graph above depicts the betrayal of America as shown in the red lines of Bush/GHW Bush and, later, GW Bush. That's the malignancy that has brought the United States to its knees. Reagan and Bush Sr. and Jr. have savaged their own country and its promise.

The mortal sin of the American people must be their gullibility. I recall many years ago Pierre Berton opining that the greatest difference between Canadians and Americans was that Americans were guided by a powerful "need to believe." This craving has left them easy meat for hucksters like Reagan and the Bush dynasty. It has led them to a childish indifference to debt and a retarded, self-destructive antagonism to taxation.

Harper, his buddy Tom Flanagan and the University of Calgary cabal, still cling to the Reagan vision albeit with a lower tolerance for public debt. They embrace the Norquist ideology of shrinking government (through privatization where possible) until it can be drowned in a bathtub.

Yet the world we'll see by 2015 will put the lie to their ideologies as those nations with strong central governments ascend to dominance. America's greatest fear is of the day its foreign lenders no longer fear an abrupt American economic decline and, instead, come to accept it as an unfortunate inevitability offset by commensurate prospects for their advancement.

George w. Bush spoke of America's "addiction to oil" but never touched on the greatest affliction, America's addiction to borrowing and debt. No matter how dark the scenario confronting president-elect Obama, try to imagine what he and his countrymen would have to face if the foreign lending tap was turned off. Imagine what America would look like if it was forced to live on its own GDP. That's so frightening as to be almost inconceivable.

And yet there is a creditors' psychology that comes into play whenever they're confronted with a particularly troublesome debtor. There's a tendency to let bad debts ride - for a while, sometimes a long while - hoping against hope that a miracle turnaround might appear. But eventually there comes a stage of painful resignation where a creditor knows it has to cut its losses, it has to take a big hit now instead of an even bigger hit later. There's a whole basket of emotions that comes into play - self-ridicule at not having acted sooner, anger at the debtor's betrayal, even a thirst to punish the debtor in non-pecuniary ways. I can't begin to tell you how many times I've seen this process played out at levels great and small.

Bush, Cheney, Rumsfeld, Wolfowitz and the lesser players were true believers in American exceptionalism. They freely drank of the cup of hemlock served up by lunatic outfits such as the Project for the New American Century which proclaimed that the 21st Century belonged to the United States provided it was prepared to be both ruthless and mass murderous in its pursuit of global domination.

What they never understood is that the PNAC vision, as restated in the puerile Bush Doctrine, couldn't begin to work in any nation that couldn't live for a year on its own takings. It couldn't possibly work for a country permanently dependent on foreign lenders. Someone had to pay for those enormous military expenditures.

Can Obama rescue America? I can't see how. He can probably, at best, stablize its decline, make it bearable and spare his people complete chaos. What he cannot do is restore the United States to anything resembling pre-Reagan America. Too much damage has already been inflicted, too many rivals are on their way up. The Reagan legacy has done its work.

The day will come, probably within the next decade, when Americans are shaken out of their stupor and finally confront the reality of their notional exceptionalism and those who used it to con them. I wonder what they'll think of Reagan and his disciples then?

Why Americans Still Venerate Ronald Reagan

Over the past 30-years, Americans have come to revere Ronald Reagan as the guy who restored their country and their pride. I suspect the Reagan magic has as much to do with how Americans saw only his achievements and not the downside he inflicted, the very hens that are now coming home to roost.

Ronald Reagan did transform the United States. When he took charge America was the world's largest creditor nation. That's right, America was a country that loaned money to other, poorer countries. When Reagan finally left eight years later he had transformed the United States into the world's largest debtor nation.

Ronald Reagan launched America onto the path of continuously living beyond its means. Every previous president since WWII had reduced the government debt as a percentage of GDP. Each and every one of them, Republican and Democratic. Reagan changed all that, sending the debt/GDP ratio soaring.

I think the secret of Reagan's veneration, however, is that when he sold out his nation's real wealth, its fiscal integrity, he left a country that was able to continue to borrow vast sums for decades to come. It was in pursuit of Reagan's fiscal legacy that Bush Jr. managed to double the federal government's debt to what will be a staggering $11-trillion by the time he packs up his crayons in January.

It was Reagan who tought the American people that paying for their government was wrong, that taxes were bad. It was Reagan who, with the aid of his conjurer Stockman, pulled the wool over his people's eyes with nonsense about "supply side economics" and the "trickle down" theory of tax cuts for the rich.

It was Reagan who launched the transformation of the American economy from an industrial driven engine to a financialized economy in which financial services - banking, stocks and insurance - became the largest component of the American economy while its industrial base was packaged up and shipped abroad.

It was Reagan who pushed for massive federal deregulation, a mission that was taken up with gusto by Bush/Cheney. It was the union rep Reagan who turned union buster and drove American labour into the ground.

Debt, deficits, foreign borrowings, deregulation, de-industrialization, financialization, tax cuts for the rich - everything Reagan mapped out has brought America to where it is today. His directing hand is in everything that has gone so horribly wrong today in the United States.

And yet the American people continue to revere Ronald Reagan and venerate his legacy. Astonishing.