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As I've written in several places earlier, the rise of debt in the United States, and elsewhere has had profoundly negative effects on various parts of the American psyche. I've argued that we Americans have been seduced into thinking that debt is neutral, or perhaps good. I've also pointed out the obvious fact (at least obvious after some reflection) that corporations have made a conscious effort to convince us that debt is a good thing, that the world will come to an end, or perhaps fall off its axis, if we don't take on more and more debt. I've also pointed out that the move toward more and more debt produces slavery, rather than the freedom pronounced in commercial after commercial by Visa, Mastercard, AmEx, etc. This slavery, I contend, is intentional, and produces a dramatic dampening effect on the force of democracy here and elsewhere. People who are in debt slavery are resistant to efforts to rock the boat. If you have a huge amount of debt, maintenance of the status quo is crucial to keeping the status quo.
I have also stated my ongoing concern about the pronouncements from the Obama administration regarding our economy, and the fact that the same ship of fools that got us into this mess are hard at work now within the Obama White House. In last few days, some additional analysis of some of the President's recent comments on our economic travails. Referring back to a speech the President gave in April 2009, economist Steve Keen points out an obvious fact. First here's the speech, with the section in question:
Of course, there are some who argue that the government should stand back and simply let these banks fail – especially since in many cases it was their bad decisions that helped create the crisis in the first place. But whether we like it or not, history has repeatedly shown that when nations do not take early and aggressive action to get credit flowing again, they have crises that last years and years instead of months and months – years of low growth, low job creation, and low investment that cost those nations far more than a course of bold, upfront action. And although there are a lot of Americans who understandably think that government money would be better spent going directly to families and businesses instead of banks – "where's our bailout?," they ask – the truth is that a dollar of capital in a bank can actually result in eight or ten dollars of loans to families and businesses, a multiplier effect that can ultimately lead to a faster pace of economic growth.
In these words, President Obama spells out the strategy of bailing out the financial institutions that got us into this mess, rather than directly giving money to individual Americans. Read it carefully. Can you spot the problem with this strategy?
Steve Keen makes this statement of the obvious, once you discover the fly in the ointment:
This argument comes straight out of the neoclassical economics textbook. Fortunately, due to the clear manner in which Obama enunciates it, the flaw in this textbook argument is vividly apparent in his speech. This “multiplier effect” will only work if American families and businesses are willing to take on yet more debt: “a dollar of capital in a bank can actually result in eight or ten dollars of loans”. So the only way the roughly US$1 trillion of money that the Federal Reserve has injected into the banks will result in additional spending is if American families and businesses take out another US$8-10 trillion in loans. What are the odds that this will happen, when they already owe more than they have ever owed in the history of America? …
Our President, who I voted for and campaigned for in the 2008 election, presents me with a gift I must refuse: more debt. He states that for all of this to succeed, we all must go into debt yet more! Be it a business or an individual, the only way for this economic stimulus to work as planned is if, for every dollar given to a lending institution, we all borrow ten times as much!
I, for one, must just say "NO" to this idea. Not only is it a bad financial idea, it is also bad for our democracy. Keen argues, and I think convincingly, that money given to consumers would have a far more positive effect on the economy than the Bernanke/Geithner/Summers plan for us all to go directly to debtor hell. I argue, further, that, in addition to the economic travail produced by more and more and more debt, that our democracy will falter yet further, that Americans will feel more and more inslaved - and more and more powerless - if they mount up more and more debt, which appears to be the plan, in the President's own words.
This is a very bad idea. These people are playing with fire. We've seen recently that a certain segment of the American population already feels that our socialist, communist, Marxist, Kenyan undocumented worker president (their fears, not mine) will do from the inside what Osama bin Laden tried from the outside on 9/11. They already carry signs suggesting that the next time they show up that they may do something with all those guns they own.
Now the economic idiots, who are apparently very bright folks, think we should take on more debt? This is a very bad idea. Debt slavery will only add more fuel to this fire. It will produce the mentality of slaves among those who take on more debt. And slaves will, at some point rise up and throw off their chains.
This is exactly what we don't need. I will give President Obama the benefit of the doubt on this; however, perhaps he's thinking too much like the other wealthy white guys he's surrounded himself with. Perhaps the President needs a refresher course on what it's like in the neighborhood his Chicago house is in. You can be sure that most of those folks are already feeling that things have not gone well economically. The more that the average American senses that his or her government is operating for the advantage of a select few rather than the people at large, the greater the threat that those left out will find less peaceful means to resolve their grievances.
And that is something to avoid at all costs.
This message is in response to this comment on Huffingtonpost about the supposed Post-racial world after the Obama election:
OK Mr. Teabagger....where was your rage at out of control government when our out of control government - run by Republicans - invaded Iraq? Where was your anger at being fooled into supporting an effort that had NOTHING to do with "defending our freedoms", which we heard time after time from the Bush administration? Where was your rage a year ago this month - BEFORE Obama was elected - when the Bush administration cooked up the entire financial bailout deal that got us into this mess?
Now go look at the pictures of the rally this last weekend in DC - what color are all the people there? Is is possible, despite your black friends, that something may have slipped your notice about who you hang out with? Maybe it's true you're not racist, but what about all your cohorts?
Now, for the record, my skin color is probably closer to yours than to Obama's. My ancestors came to this continent about 400 years ago, but not as slaves. I, too have many black friends. Hell, I play jazz and R&B for a living. (that's "black" music) With black folk. But the color of my skin doesn't prevent me from seeing what is patently obvious. When your fellow teabaggers start bragging about their 2nd amendment rights while carrying guns to town hall meetings, and showing up at events where our president is speaking, only a fool could mistake the non-subliminal message these people wish to convey. When the President is receiving death threats at a rate 400 TIMES as many as previous presidents, no person with lineage back to Africa is either surprised or confused about the reasons why.
You call yourself a conservative. What exactly do you want to conserve? What is it you don't want to change? The insanity of the Bush years? The wanton spending propagated by other "conservatives"? The unbroken history of control of the White House by white males - until now? Do you really think that this country has broken with its tragic racist past?
If you have black friends, ask them what THEY think of all this. Go ahead. Then have the courage to write back with the results.
We Americans must have the courage to do much to deal with this issue. First of all, we must have the moral fortitude to look at things as they are in matters of race. It is we, who call ourselves "white" (I'm still looking for that actually white skin on my beige skinned body) who imagined that this group of people WE stole from their homeland are "black" (even very few of them have skin color that is really black, and not brown). We imagined that they were another "race" aside from the human one. We enslaved them, not the other way around.
Secondly, there are still consequences for our actions when we hang out with people who are still racist. The spike in the sale of guns after the 2008 election is not accidental, particularly when the people buying the guns proclaim, point blank, that they're buying guns because there's a negro in the White House. If you have black friends, where in the world is your rage at THAT injustice? Do you have the courage to speak out FOR your black friends?
Those of you who have followed my earlier threads on corporations are aware of my argument that, since the turn of the 19th/20th century, corporations, particularly those spawned in the United States, have a character. That nature, I contend, is anti-democratic, and has also actively worked toward the demise of the middle class.
Today on Daily Kos, on blogger echoes my thoughts and concerns about this well. Entitled This Corporate Life, the writer discusses the recent book by author Douglas Rushkoff, Life Inc.: How The World Became A Corporation and How To Take It Back. Here are a few points made by the blogger and the author that I believe are quite important to any discussion about our current state of national travail.
How would the people screaming around the reflection pool this past Saturday react if you told them that a big part of what drove the American Revolution was not the unfair actions the British government, but the grinding tactics of British corporations?
This fact echoes my own concerns about corporations that few Americans stop to consider: The original Boston Tea Party was an act against a corporation, The East India Tea Company. The American colonists took up arms over the support by the British government of this corporation. The rallying cry, "No taxation without representation" arose out of the fact that the East India Tea Company received favorable tax treatment that the British withheld from American colonists.
Further:
Rushkoff shows that corporations don't owe their origins to a desire for fostering innovation or to open up the investor class. It wasn't about building an "ownership society" or encouraging enterprise. Corporations were invented to stop all those things. They were invented because the ruling class saw that the middle class was ascendant, that the would-be bourgeoisie were expanding their wealth and threatening to squirm out from under the thumbs of their upper-class lords. The aristocracy created the corporation to perpetuate the control of the aristocracy.
This is a critical point. As I argued here, the move by corporations to encourage debt for the middle class folks was purposeful, designed to actually bring about the demise of this middle class. By fooling Americans, and others, to accept the false premise that we can be "free" while enslaved to massive personal debt, corporations have succeeded in dissolving the middle class in the United States. By creating a debtor nation, too fearful to speak up in the totalitarian workplace, corporations have succeeded in dismantling the middle class. By trading actual ownership for debt, corporations have successfully enslaved the large majority of us.
Here is another key point:
It’s not that individual corporations are bad. It’s that corporations can’t help but be bad. It’s built into the design.
Integral to every modern corporation is a model that incorporates (literally) the power structure of the late Middle Ages, and the colonization strategy of 18th century empires. They don't open a store in an area, they establish a colony.
Corporations are designed a certain way. In particular, publicly held, for-profit corporations, by law, must increase profits at all costs. The colonial model, which involves, first of all, having power over the colonists, is the centerpiece.
The blogger moves to this key point:
What each chapter of the book drives home is that this activity doesn't require evil people at the helm. There doesn't need to be a cackling set of greedy bastards circling the board table. The structure of a corporation dictates how it will operate. Force of law and force of habit ensures that any action not intended to improve the corporation's means of exploitation is discarded. The corporation is drive to act... like a corporation. It's not an evil plot, it's an evil system.
Please consider this point carefully. Corporations act as they are designed to act. A small group of people have benefited inordinately from this effort. Most of us aren't in that minuscule group.
Until we, as Americans, face this fact, little will make sense. Consider, as an example, the reaction of people under the spell of right wing radio and TV commentators, supporting insurance companies, worrying that the public option will spell the demise of insurance companies. Where is the person who, when actually attempting to get benefits from their health insurance company, ends up thinking, "Wow, what a great company!" ?
Finally, consider these words:
But the stories about corporations aren’t the worst of it. In fact, that’s just the set up. The world is under the control of giant international companies which employ ruthless tactics to break down national barriers -- actually, who often don't even notice national barriers -- and we've all cooperated to the extent that we've helped them dismantle the few things that stood between these relentless abstractions and real people. Yeah, what else is new?
What’s new, at least relatively so, is the extent to which we’ve internalized the values of corporations. We criticize corporations for acting as if only the next quarter counts, but how often do we treat our own investments (an not just our financial investments) in the same way? How often is our response on any issue made on corporate terms, on terms that assume life is a zero-sum game where your advancement means my stagnation?
This type of corporate-think is pandemic. I fully admit that the specter of changing this seems almost beyond our scope. Corporations, and the manner in which they think and operate, are ubiquitous, the norm. To think otherwise seems Luddite. We see the same kinds of arguments about corporations as we do about guns: Corporations aren't either good or bad, it's how people use them.
This notion is false. Corporations will destroy the middle class, and democracy, here and elsewhere unless we recognize this threat and change the laws governing corporations to our advantage. We must make these legal fictions serve our needs. Unless we take this on, corporations will continue to work, consciously and deliberately, to enslave us, to get us to serve their needs.
My writing has been sporadic. I've been hustling my music career and other work. But I'm going to write more....
