Wednesday, November 16, 2011

The Death of Capitalism: Is the United States the new Rome?

Karl Marx and Ayn Rand


Has capitalism outlasted its worth?  I thought the ultimate goal of capitalism was to make prices as cheap as possible for the consumer enshrouded in the magic of the American Dream.  It seems that, at least at one point, we had that.  But now, as huge corporations and pseudo-monopolies have emerged, competition has been limited and prices are taking off.  Production is increasing and CEO pay is skyrocketing, yet worker’s wages remain stagnant.  How else can we explain this but to maybe consider the possibility that capitalism is dying?  The game has been rigged for far too long, and we are stagnating.  Maybe it is time for an alternative, but what?
Socialism has long been capitalism’s main opponent.  Unfortunately, because of populist fascists that use the people’s agenda to promote their own such as Hitler and Stalin, and because of unjustified propaganda machines like McCarthyism, socialism’s name has been tainted, and the very word strikes fear into many ignorant American’s hearts.  These American’s are the ones who are incapable of understanding how Hitler and Stalin came to power by passing a populist people’s message that everyone wanted to hear and then advancing their own agenda.  What other way could captivate a nation?
Maybe socializing more things would make things cheaper for the consumer where the market is failing.  The nonpartisan Congressional Budget Office seems to think so, as they stated that the Affordable Care Act will actually decrease deficits over ten years.  Cheaper products put more money into more American’s pockets, therefore creating a larger demand, which creates more production, and thus, a stronger economy.  I don’t see any reason why we can’t incorporate a hybrid economic system where we implement one policy where another one is failing.
This type of system, which some may refer to as Keynesian Economics, has bailed out our economy time and time again since the Regan Administration.  Every time, over the last thirty years, we have tried to incorporate a more laissez-faire economy, the Keynesian’s had to save the day.  We saw it when Regan’s policies put us in a deficit and we saw it with Bush 1.  Now we are seeing those policies eroding our economy again in the form of the Bush 2 tax cuts.  Are we going to learn from our mistakes as we had in the eighties and early nineties?
The movie Capitalism:  A Love Story (CALS) opens with a description of Rome.  It showed how Rome was the largest, richest, most beautiful city in the western world.  It went on to show how Rome eventually turned to an unhealthy dependence on slave labor in the economy and showed the high disparity between the rich and the poor.  It showed crowded slums and the difficulty to escape such conditions because of the lack of jobs for unskilled citizens who were never properly educated.  Rome held games to keep the citizens minds away from such worries, much like corporate giants like Fox shove American Idol down our throats. 
Does this sound familiar?  There is no in-between anymore.  There are the haves and the have-nots.  The right will tell you that the only people that work hard are the people at the top.  This is simply incorrect. 
Michael Moore points to the housing collapse where the poor were being evicted left and right and capitalist “vultures” swooped in to take every advantage they could over other’s misfortunes, much like capitalists do by taking out life insurance policies on their employees.  Some may say that’s just the free market, but it isn’t that easy.  To say that would be to say the banks had nothing to do with the housing collapse.
Moore also points to the 1960s where much of everyone was doing well for themselves.  Capitalism was working and competition was alive and well before the game became rigged.  We had a top tax rate of 90%, and the rich were still able to enjoy their bourgeois lifestyle.  We used that money for dams, interstates, bridges, schools, hospitals, and science…we sent a man to the moon, Moore points out.  Everyone could have a job, and the middle class only needed one income to survive.  Union families had free health and dental care, and their kids could attend an institution of higher learning without applying for loans.  Pensions were safe; workers enjoyed paid vacations; and most had the luxury of a savings account. 
So what happened?
Reagan and his trickle-down theory infiltrated America’s tax policy -- a failed theory over 25 years in the making -- and a theory that even failed when the tax payers bailed out the banks and people were still being laid off while jobs weren’t being created.  Why didn’t those banks put some of that money back into the people...the ones who bailed them out?  Why haven’t those banks paid back the bailout money even though they are prospering at the tax-payer’s expense?
But I digress...
With Ronald Reagan, came Donald Regan.  Don Regan was the chairman of Merrill Lynch, the largest, richest, brokerage firm in the world at that time.  Donald Regan became Ronald Regan’s Treasury Secretary, which enabled him to enact the tax cuts the rich wanted.  He soon became the White House Chief of Staff, and, as CALS points out, the country began to look more and more like a corporation.  The industrial infrastructure had been dismantled.
Moore points out that this wasn’t even done to save money, as companies were posting record profits in the billions.  He informed that it “was done for short-term profits.”  He then illustrated how, after Reagan, corporations began posting even higher profits while they continually laid-off workers.  GM made $23.1B while laying-off 100,000 workers.  GE made $20.4B while laying-off 100,000, and AT&T made $9.6B while laying-off 40,000 workers.  No, this wasn’t done to save the nation money, but to destroy unions.
Moore showed that millions of workers were thrown out, and those who remained had to work even harder.  Productivity increased 45% while worker wages increased 1%.  The top income tax rate was cut in half.  Instead of having Americans live on a decent wage, they were being encouraged to live on borrowed money.  This caused household debt to become almost 100% of our GDP.    CALS showed that anti-depressant sales rocketed 305%, and greedy insurance and pharmaceutical companies pushed healthcare costs up 78%.  CEO pay was 649% more than workers. 
This is why they wanted to dissolve the unions.  Life was good for them.  They just wanted more.  Greed dug its nasty claws in.
This is evident in three leaked Citigroup memos written in 2005-2006 as pointed out by CALS.  The memos were meant for the company's most important investors.  The memos stated that we were no longer living in a democracy, but a plutonomy, or “economies powered by the wealthy” for the benefit of “the top 1% of households” that had more wealth than “the bottom 95% of households put together.”  The memos then gloated at how they were “the new managerial aristocracy.”
The memos also stated that the “most potent and short-term threat would be societies demanding a more equitable share of wealth” and a “backlash” could be building.  It stated that the people might not have as much economic power as the rich, but they “have equal voting power with the rich.”
 Heavens…whatever will they do?  Their scariest plight is that they only have 1% of the vote.
The Constitution doesn’t say we have to be capitalist, so why are we so hardwired to believe that?  I have always believed that the preamble of The Constitution sounded a lot more like socialism than capitalism. “Provide for the common defense?”  “Promote general welfare?”  “Secure the blessing of liberty?”  This is the very BEGINNING of The Constitution; these sound like securities.  If the argument is freedom, and we love freedom so much, why do we give it up every day when we go to work?  

Tom Morello of Rage Against the Machine fame said, "America touts itself as the land of the free, but the number one freedom that you and I have is the freedom to enter into a subservient role in the workplace. Once you exercise this freedom you've lost all control over what you do, what is produced, and how it is produced. And in the end, the product doesn't belong to you. The only way you can avoid bosses and jobs is if you don't care about making a living…which leads to the second freedom:   the freedom to starve.”
Conservatives will point out and say socialism doesn’t work because it provides zero incentive.  This is just more of the conservative rhetoric train advancing those agendas down the corporate express.  In CALS, a fifteen million dollar a year company called Isthmus Engineering and Manufacturing co-op is showcased.  The company is owned by its workers, and issues pertaining to the company are voted on by the workers:  one person, one vote.  One of their employees explained that “it takes the money out of the equation” when it comes to company matters, and as a result, profits increase. 
Moore then pondered what would happen if you extended democracy to the workplace.  He stated that “you probably wouldn’t lay off your coworkers to increase the value of your stock, would you?  Or give yourself a pay raise while making your coworkers take a pay cut.”  Another worker added that employees wouldn’t do that, because their greed would be too obvious.    He then stated the bottom line:  “…you got plenty of people who roll up their sleeves every day and go to work, but if there is someone way up there on the chain that collects all the extra money, that’s not fair.”
CALS also showcased a bread company in California where the more hours you work, the more profits you enjoy.  This even pertains to the CEO.  An assembly line worker at their plant makes over $65,000 a year.
In a recent Rasmussen Poll among young people, only 37% of young people preferred capitalism to socialism’s 33%.  Maybe the youth are starting to take notice.  Maybe the youth are actually beginning to learn what socialism really is.  Maybe the stain of McCarthyism is fading.  Maybe it is time for something new…something like the Preamble of our Constitution and FDR’s Second Bill of Rights…rights that guarantee security.  These rights include having a decent job, a livable wage, universal health care, a good education, an affordable home, and an adequate pension. 
What is wrong with these guarantees?  We used to have them and it worked.  Imagine that.  A more prosperous nation and economy built on the middle class.  How has something so obvious become so hazy? Parts of Europe and Asia get it, and their economies are taking off.  Socialism has become such a bad word in this country that even good programs like the Affordable Care Act, and its cousin, Massachusetts’s Romneycare, have conservatives taking every chance they can get to demonize the word "socialism" even more.  Romneycare is one of the most successful health care programs of all time, and its creator, presidential hopeful Mitt Romney (R-MA), is running from his own idea that the PEOPLE love.
Why can’t we just adhere to the old axiom “you can’t judge a book by its cover?”  The Nation’s John Nichols has a few ideas:
“If there’s one constant in the elite national discourse of the moment, it is the claim that America was founded as a capitalist country and that socialism is a dangerous foreign import that, despite our unwarranted faith in free trade, must be barred at the border. This most conventional 'wisdom'—increasingly accepted at least until the recent grassroots mobilizations in Wisconsin, Ohio, Michigan and Maine—has held that everything public is inferior to everything private, that corporations are always good and unions always bad, that progressive taxation is inherently evil, and that the best economic model is the one that allows the wealthy to gobble up as much of the Republic as they choose before anything trickles down to the great mass of Americans.”
But, as his article continues, we wouldn’t be the country today if it weren’t for socialist ideals.  He stated that President Obama is no more a socialist than Abraham Lincoln, Teddy Roosevelt, F.D.R., or Dwight Eisenhower.  He stated that all "these presidential predecessors sampled ideas from Marxist tracts or borrowed from Socialist Party platforms so frequently that the New York Times noted in a 1954 profile the faith of an aging Norman Thomas that he ‘had made a great contribution in pioneering ideas that have now won the support of both major parties’ —ideas like ‘Social Security, public housing, public power developments, legal protection for collective bargaining, and other attributes of the welfare state.’"  This shows that presidents even before Obama didn’t avoid implementing social ideas for fear of putting themselves at odds with the American people and their Constitution.
Nichol’s then goes on to say that “we have suffered fools so thoroughly that too many American’s believe Sarah Palin when she says socialism is antithetical to Americanism.”  His point is not to defend socialism, but to defend history.
Nichol’s believes that the Republican Party is currently even more firm in its accusations towards socialism than it was during the McCarthy Red Scare in the 1950s.  During this time, Senator Joe McCarthy (R-WI) accused President Truman of harboring Communist Party cells in the government.  Conservatives were outraged at Truman’s anti-lynching proposals and national health care plan.  

What really scared them was when Truman not only won the election he was supposed to lose in 1948, but won back congress as well.  Truman didn’t run from the word “socialism,” which, in those days, was reflected to the people in the form of “Stalinism.”  Truman joked, “Out of the great progress of this country, out of our great advances in achieving a better life for all, out of our rise to world leadership, the Republican leaders have learned nothing. Confronted by the great record of this country, and the tremendous promise of its future, all they do is croak, ‘socialism.’”
Nichols continues in saying that the “country would not be what it is today were it not for the positive influence of revolutionaries, socialists, and their fellow travelers.”  

Nichol’s added:
“If universal building codes and health protections for children can be successfully depicted by our debased media as assaults on American values and the rule of law, then the right has already won, no matter what the result is on election day. And a nation founded in revolt against empire, a nation that nurtured the radical Republican response to the sin of slavery, a nation that confronted economic collapse and injustice with a New Deal and a War on Poverty, a nation that spawned a civil rights movement and that still recites a Pledge of Allegiance (penned in 1892 by Christian socialist Francis Bellamy) to the ideal of an America ‘with liberty and justice for all’ is bereft of what has so often in our history been the essential element of progress.”
Nichol’s noted that if it weren’t for socialists like Michael Harrington, we wouldn’t have Medicare. Senator “Ted” Kennedy declared, “I see Michael Harrington as delivering the Sermon on the Mount to America.”  Nichol’s added that the same was true when socialists immigrated to the United States in 1848 when they “energized” the movement against slavery and “helped give it political expression in the form of the Republican Party.”  He goes on to state that the same was “true early in the twentieth century, when Socialist Party editors like Victor Berger battled attempts to destroy civil liberties and defined our modern understanding of freedom of speech, freedom of the press, and the right to petition for redress of grievances. The same was true when lifelong socialist A. Philip Randolph called the 1963 March on Washington for Jobs and Freedom and asked a young preacher named Martin Luther King Jr., who had many socialist counselors besides the venerable Randolph, to deliver what would come to be known as the 'I Have a Dream' speech.”
Historian Patrick Alitt believes that “millions of Americans, including many of these critics [of the Obama administration], are ardent supporters of socialism, even if they don’t realize it, and even if they don’t actually use the word.”  Programs “organized along socialist lines” do not make a state socialist.  Nichols concluded by stating that we "live in complex times, when profound economic, social, and environmental challenges demand a range of responses. Socialists certainly don’t have all the answers, but without socialist ideas and advocacy, we will not have sufficient counterbalance to an anti-government impulse that has less to do with libertarianism than with manipulation of the debate by all-powerful corporations.”
So here we are.  There is no doubt that something needs to change in Washington.  Hopefully the scars of McCarthyism have healed enough to where we The People, and our politicians, can once again succeed in using all of the tools available to us in a free society.