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Joel: Unions Create “Good Jobs”

By dianeravitch
March 14, 2024 //
16

Joel, our reader who often comments on economic issues, is a union electrician, now retired. Here he weighs in on the subject of “good jobs.”

Joel writes:

Most of what Americans call good Jobs never existed. What existed was good Unions which made bad Jobs good. And that only for a brief period of time. From the 1930s thru the 1960s.

In 1906 Upton Sinclair described Meat Packing as “The Jungle.” By the 50s it was a desired job that could let the holder buy a house, go on vacations and send a child to a State School. The blood and stench washed off in the shower after 8 hours. Henry Ford was not a benevolent innovative mogul of American industry who paid his workers more so they could buy his product as the myth goes. The Nazi loving antisemite could not get skilled carriage builders to work on the monotonous assembly lines of his Model T. He had to raise wages.


The assembly line took the skills out of manufacturing. Far easier and cheaper to find a worker able to put the left front wheel on all day than one who can craft a carriage from soup to nuts. Ford after the most violent resistance to Unions was the last Auto maker to be Organized in the 40s after his thugs got featured on the front page of the Detroit Press brutally beating Union organizers. They seem to have missed a roll of film when the Press Photographer handed them his Camera. Having thrown the roll away before being stopped.

Unions grew from 5% of the private sector workforce in the mid to late 1920s before the Great Depression and the NLRA. Grown to between 31 -33% in the early 50s. Which essentially meant most larger firms. And if a firm was not organized there was a Union knocking on the door that forced them to treat Workers with some degree of respect. With better wages benefits and conditions. All this started changing in the late 40s after Taft Hartley eviscerated the NLRA. Almost immediately Corporations started moving Manufacturing to the Anti Union South. Turning the manufacturing Belt of the North into the Rust Belt from Lowell Ma. and Binghamton NY to Milwaukee Wisconsin. A time when Robbie the Robot was only in a Movie and on Lost in Space. That long before Foriegn Competition and out sourcing work. It took 30 years to move the American manufacturing Industry away from the North to the Non Union South. It took 10 years to move much of it out of the country to even lower priced more abusive Countries with no Labor Standards. A different issue was found in Coal mining where strip mining decimated the Unions. Of course the UMW under short sighted and criminal thugs like Tony Boyle had fought the environmentalists opposed to it. No major mine in WV is now Union. The state once the home of the UMW is now Right to Work.

But what about those “White Collar ” Jobs. Jobs that may require a College degree. C.W. Mills in the very early 50s postulated that because the Jobs required selling services and themselves. White collar workers felt more self reliant than Blue. Viewed themselves as individuals with valuable skills that others did not posses. Skills to be marketed to the highest bidder. So who needs a Union. With some disdain he also notes that, that ethos got them lower pay and benefits. An Electrical Engineer often paid less than the Electricians he handed the prints to. Possibly one day acquiring a management position. Most often not.

Through the 60s the presence of strong Unions always knocking on the door was a check on Corporate treatment of White Collar workers. The attitude from the CEO of IBM as he addressed the Public or a Shareholder meeting . “Here at IBM we are a family here to serve our Employees, our Costumers , the Public and our Shareholders.”

As Unions were eviscerated workers Blue and White collar were taken out of the stump speech as well as Costumers and the Public. Jack Welch said in the mid 80s “tell the Unions the Future of GE is in Mexico”. By 2006 IBM was dropping their defined benefit pension for White collar Workers and later taking away the matching 401k, capping it at 5%. The age of shareholder primacy was born as Unions disappeared. Back to under 6% of the private sector workforce.

Categories Economy, Equity, Unions

Chris Tomlinson: Houston’s Economy Needs Immigrants

By dianeravitch
March 10, 2024 //
14

Chris Tomlinson is a regular opinion writer for The Houston Chronicle. I tuned in to a zoom with him yesterday and learned that he is known for his fierce independence. I signed up for his column and discovered his thoughts about “the immigration crisis,” which Americans tell pollsters these days is the most serious problem facing the nation. Tomlinson thinks both parties have failed to tell the truth, so he did. Trump, in particular, has demagogued the issue with his fear-mongering.

Tomlinson writes:

The two-ring presidential circus performed along Texas’ border on Thursday, injecting cash into the local economy but adding little to the national debate over one of the year’s most consequential issues. 

President Joe Biden met with local officials in Brownsville and blamed Republicans in Congress for blocking new border security spending for political advantage. He correctly stated the broken asylum system encourages desperate people to gamble their life savings for a chance to live in the United States.

“If they get by the first day, they’ve got another five, seven, eight years before they have to do anything because they know (the immigration courts) cannot handle the caseloads quickly, and they’ll be able to stay in this country,” Biden said.

“With the new policies in this bill and the addition of 4,300 additional asylum officers, we’ll be able to reduce that process to less than six months,” he added.

Former President Donald Trump paraded before U.S. flags and uniformed National Guard troops in Eagle Pass. He renewed themes popularized by the Ku Klux Klan a century ago, sowing fear of foreigners and painting his opponent as a friend of dark-skinned criminals.

“They’re coming from jails, and they’re coming from prisons, and they’re coming from mental institutions and they’re coming from insane asylums. And they’re terrorists. They’re being let into our, our country,” Trump said in a rambling, bigoted speech. “It’s not just South America. It’s all over the world. The Congo, very big population coming in from jails from the Congo.”

Immigration is the most critical problem facing the nation, Americans told a recent Gallup poll. The issue was top of mind for 57% of Republicans, 22% of independents and 10% of Democrats.

“A separate question in the survey finds a record-high 55% of U.S. adults, up eight points from last year, saying that ‘large numbers of immigrants entering the United States illegally’ is a critical threat to U.S. vital interests,” Gallup added.

Most voters believe Trump would do a better job on border security, while only 28% of Americans approve of Biden’s immigration policies. Biden is in deep trouble, with only a 38% approval rating and a base already angry over his Middle East policies.

Anyone who’s spent time along the border will tell you most Americans don’t understand what goes on there. For example, asylum seekers are not invading the country; they turn themselves in as quickly as possible. Most of the $29 billion worth of drugs smuggled into the United States crosses at commercial entry points, which are the arterial roads keeping our economy going.

Migrants, documented or not, are critical for our workforce and society. I know people like to draw distinctions between documented and undocumented migrants, but both contribute more to the United States economy than they take. Most undocumented workers would happily pay a fine to get right with the government.

In Houston, immigrants make up almost a quarter of the population and 31% of the workforce, U.S. census data analyzed by the American Immigration Council, the Texas Association of Business and the Center for Houston’s Future found. Immigrants in the Houston statistical area earned $66.5 billion and paid $11.1 billion in federal taxes.

If Trump rounded these people up and deported them, as he promised, the construction, hospitality and hospital services would collapse.

Houston is home to more than 572,000 undocumented migrants whose households earned $13 billion in 2021. Most have fake documents and paid $794.8 million in federal taxes and $595.6 million in state and local taxes, the U.S. Congressional Budget Office reported.

Meanwhile, Biden must come up with a new approach to processing asylum seekers after Congress made it clear they will not help. But he must overcome opposition from within his party and federal courts.

Federal and international law requires the United States to grant asylum to anyone with a well-founded fear of persecution. However, establishing which claims meet that high standard under current policies can take years.

Opinions differ on what he can do without new laws. Seventy-seven Democratic lawmakers sent Biden a letter in January objecting to the deal he offered Republicans. A federal judge in San Diego has forbidden authorities from separating families at the border, and an earlier ruling limits how long Immigration and Customs Enforcement can detain families with children.

Trump’s speech on Thursday was craven but likely effective. Biden’s blame-shifting onto Republicans in Congress is disingenuous and ineffective.

While the campaigns play political games, though, people suffer, something too many overlook.

Award-winning opinion writer Chris Tomlinson writes commentary about money, politics and life in Texas. Sign up for his “Tomlinson’s Take” newsletter at houstonhchronicle.com/tomlinsonnewsletter or expressnews.com/tomlinsonnewsletter.

[Note from Diane: I added the bold emphasis.]

Categories Bigotry, Economy, Elections, Extremism, Houston, Immigration, Propaganda, Texas

Thom Hartman: How the Monopolists Stole the U.S. Government

By dianeravitch
March 9, 2024 //
24

Thom Hartmann has written a new book titled The Hidden History of Monopolies: How Big Business Destroyed the American Dream. He has decided to offer it for free, a chapter at a time, on his blog.

He writes:

Because the Founders set up America to be resistant to the coercive and corruptive influence of monopoly and vested interest, the monopolists didn’t have any direct means of taking over the American government. So, two processes were necessary.

First, they knew that they’d have to take over the government. A large part of that involved the explicit capture of the third branch of government, the federal judiciary (and particularly the Supreme Court), which meant taking and holding the presidency (because the president appoints judges) at all costs, even if it required breaking the law; colluding with foreign governments, monopolies, and oligarchs; and engaging in massive election fraud, all issues addressed in previous Hidden History books.

Second, they knew that if they were going to succeed for any longer than a short time, they’d need popular support. This required two steps: build a monopoly-friendly intellectual and media infrastructure, and then use it to persuade people to distrust the US government.

Lewis Powell’s 1971 memo kicked off the process.

Just a few months before he was nominated by President Richard Nixon to the US Supreme Court, Powell had written a memo to his good friend Eugene Sydnor Jr., the director of the US Chamber of Commerce at the time.32 Powell’s most indelible mark on the nation was not to be his 15-year tenure as a Supreme Court justice but instead that memo, which served as a declaration of war against both democracy and what he saw as an overgrown middle class. It would be a final war, a bellum omnium contra omnes, against everything FDR’s New Deal and LBJ’s Great Society had accomplished.

It wasn’t until September 1972, 10 months after the Senate confirmed Powell, that the public first found out about the Powell memo (the actual written document had the word “Confidential” at the top—a sign that Powell himself hoped it would never see daylight outside of the rarified circles of his rich friends). By then, however, it had already found its way to the desks of CEOs all across the nation and was, with millions in corporate and billionaire money, already being turned into real actions, policies, and institutions.

During its investigation into Powell as part of the nomination process, the FBI never found the memo, but investigative journalist Jack Anderson did, and he exposed it in a September 28, 1972, column in the Washington Post titled, “Powell’s Lesson to Business Aired.” Anderson wrote, “Shortly before his appointment to the Supreme Court, Justice Lewis F. Powell Jr. urged business leaders in a confidential memo to use the courts as a ‘social, economic, and political’ instrument.”33

Pointing out that the memo hadn’t been discovered until after Powell was confirmed by the Senate, Anderson wrote, “Senators . . . never got a chance to ask Powell whether he might use his position on the Supreme Court to put his ideas into practice and to influence the court in behalf of business interests.”34

This was an explosive charge being leveled at the nation’s rookie Supreme Court justice, a man entrusted with interpreting the nation’s laws with complete impartiality. But Anderson was a true investigative journalist and no stranger to taking on American authority or to the consequences of his journalism. He’d exposed scandals from the Truman, Eisenhower, Johnson, Nixon, and Reagan administrations. In his report on the memo, Anderson wrote, “[Powell] recommended a militant political action program, ranging from the courts to the campuses.”35

Powell’s memo was both a direct response to Franklin Roosevelt’s battle cry decades earlier and a response to the tumult of the 1960s. He wrote, “No thoughtful person can question that the American economic system is under broad attack.”36

When Sydnor and the Chamber received the Powell memo, corporations were growing tired of their second-class status in America. The previous 40 years had been a time of great growth and strength for the American economy and America’s middle-class workers—and a time of sure and steady increases of profits for corporations—but CEOs wanted more.

If only they could find a way to wiggle back into the minds of the people (who were just beginning to forget the monopolists’ previous exploits of the 1920s), then they could get their tax cuts back; they could trash the “burdensome” regulations that were keeping the air we breathe, the water we drink, and the food we eat safe; and the banksters among them could inflate another massive economic bubble to make themselves all mind-bogglingly rich. It could, if done right, be a return to the Roaring Twenties.

But how could they do this? How could they persuade Americans to take another shot at what was widely considered a dangerous “free market” ideology and economic framework that had crashed the economy in 1929?

Lewis Powell had an answer, and he reached out to the Chamber of Commerce—the hub of corporate power in America—with a strategy. As Powell wrote, “Strength lies in organization, in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations.” Thus, Powell said, “the role of the National Chamber of Commerce is therefore vital.”37

In the nearly 6,000-word memo, Powell called on corporate leaders to launch an economic and ideological assault on college and high school campuses, the media, the courts, and Capitol Hill. The objective was simple: the revival of the royalist-controlled “free market” system. As Powell put it, “[T]he ultimate issue . . . [is the] survival of what we call the free enterprise system, and all that this means for the strength and prosperity of America and the freedom of our people.”

The first front that Powell encouraged the Chamber to focus on was the education system. “[A] priority task of business—and organizations such as the Chamber—is to address the campus origin of this hostility [to big business],” Powell wrote.38

What worried Powell was the new generation of young Americans growing up to resent corporate culture. He believed colleges were filled with “Marxist professors” and that the pro-business agenda of Harding, Coolidge, and Hoover had fallen into disrepute since the Great Depression. He knew that winning this war of economic ideology in America required spoon-feeding the next generation of leaders the doctrines of a free-market theology, from high school all the way through graduate and business school.

At the time, college campuses were rallying points for the progressive activism sweeping the nation as young people demonstrated against poverty, the Vietnam War, and in support of civil rights. Powell proposed a list of ways the Chamber could retake the higher-education system. First, create an army of corporate-friendly think tanks that could influence education. “The Chamber should consider establishing a staff of highly qualified scholars in the social sciences who do believe in the system,” he wrote.39

Then, go after the textbooks. “The staff of scholars,” Powell wrote, “should evaluate social science textbooks, especially in economics, political science and sociology. . . . This would include assurance of fair and factual treatment of our system of government and our enterprise system, its accomplishments, its basic relationship to individual rights and freedoms, and comparisons with the systems of socialism, fascism and communism.”

Powell argued that the civil rights movement and the labor movement were already in the process of rewriting textbooks. “We have seen the civil rights movement insist on re-writing many of the textbooks in our universities and schools. The labor unions likewise insist that textbooks be fair to the viewpoints of organized labor.”41 Powell was concerned that the Chamber of Commerce was not doing enough to stop this growing progressive influence and replace it with a pro-plutocratic perspective.

“Perhaps the most fundamental problem is the imbalance of many faculties,” Powell pointed out. “Correcting this is indeed a long-range and difficult project. Yet, it should be undertaken as a part of an overall program. This would mean the urging of the need for faculty balance upon university administrators and boards of trustees.” As in, the Chamber needed to infiltrate university boards in charge of hiring faculty to make sure that only corporate-friendly professors were hired.

Powell’s recommendations targeted high schools as well. “While the first priority should be at the college level, the trends mentioned above are increasingly evidenced in the high schools. Action programs, tailored to the high schools and similar to those mentioned, should be considered,” he urged.

Next, Powell turned to the media, instructing that “[r]eaching the campus and the secondary schools is vital for the long-term. Reaching the public generally may be more important for the shorter term.” Powell added, “It will . . . be essential to have staff personnel who are thoroughly familiar with the media, and how most effectively to communicate with the public.” He advocated that the same system “applies not merely to so-called educational programs . . . but to the daily ‘news analysis’ which so often includes the most insidious type of criticism of the enterprise system.”

Following Powell’s lead, in 1987 Reagan suspended the Fairness Doctrine (which required radio and TV stations to “program in the public interest,” a phrase that was interpreted by the FCC to mean hourly genuine news on radio and quality prime-time news on TV, plus a chance for “opposing points of view” rebuttals when station owners offered on-air editorials), and then in 1996 President Bill Clinton signed the Telecommunications Act of 1996, which eliminated most media-monopoly ownership rules. That same year, billionaire Rupert Murdoch started Fox News, an enterprise that would lose hundreds of millions in its first few years but would grow into a powerhouse on behalf of the monopolists.

From Reagan’s inauguration speech in 1981 to this day, the single and consistent message heard, read, and seen on conservative media, from magazines to talk radio to Fox, is that government is the cause of our problems, not the solution. “Big government” is consistently—more consistently than any other meme or theme—said to be the very worst thing that could happen to America or its people, and after a few decades, many Americans came to believe it. Reagan scare-mongered from a presidential podium in 1986 that “the nine most terrifying words in the English language are: I’m from the government and I’m here to help.”

Once the bond between people and their government was broken, the next steps were straightforward: Reconfigure the economy to work largely for the corporate and rich, reconfigure the criminal justice system to give white-collar criminals a break while hyper-punishing working-class people of all backgrounds, and reconfigure the electoral systems to ensure that conservatives get reelected.

Then use all of that to push deregulation so that they can quickly consolidate into monopolies or oligopolies.

Categories Accountability, Corporate Reformers, Corruption, Democracy, Deregulation, Disruption, Economy, Elections, Ethics, For-Profit, History

Ohio: Legislature Wants a Course in Capitalism, Not Financial Literacy

By dianeravitch
March 8, 2024 //
42

State legislatures these days tthjnkbthat they should pass laws telling teachers how to teach reading and what to teach in social studies. The latest example comes from Ohio, where the far-right legislature is in the midst of mandating a course on capitalism.

Denis Smith, retired educator, writes:

In case anyone hasn’t noticed, our republic is on fire. And that’s not being hyperbolic.

Incendiary language is now the norm in Congress and across the nation, further fanning the flames of overheated rhetoric in an election year. Indictments pile up against a former president, along with criminal trials looming in multiple jurisdictions. Perhaps even more ominous, jurors, judges, and election workers are being threatened with harm by extremists across our land.

But that’s only the short version of a narrative about a country at the brink, where democracy is threatened by the specter of authoritarianism.

Meanwhile, back in Ohio, the legislature has examined the state of the state and determined that in today’s volatile world, there is a pressing need to modify public school curriculum by teaching … capitalism.

That’s right. Ohio Republicans have decided that teaching about capitalism is more important in troubled times than strengthening student learning opportunities about democracy. Yes, learning about capitalism is more important for Ohio students than the critical need for media literacy and increased research and critical thinking skills in an age of artificial intelligence and fake news.

Add to that the importance of teaching about character and caring about others, a key cornerstone of character education. 

To Republicans, whose former House Speaker and former state party chair are now serving prison sentences, along with their twice-impeached presidential front runner facing 91 felony criminal counts, there appears to be no pressing need for young people to learn more about personal ethics, citizenship, and the importance of character. 

But we probably should know that when it comes to Republicans, caring about the needs of others might be tantamount to socialism.

After the passage of Ohio Senate Bill 17 by a margin of 64-26 on Feb. 7, a measure which calls for the addition of teaching about capitalism in high school financial literacy standards, one Democratic legislator told the Cincinnati Enquirer/USA Today Network that adding capitalism to carefully crafted financial literacy classes only dilutes the amount of content students can learn in this important course of study designed to prepare students for assuming adult roles and functions. 

‘This bill is one part partisan message, one part ideological warfare and one part a poor fix’ to Ohio’s financial literacy class requirement, said Rep. Joe Miller, D-Lorain, a former social studies teacher who instructed students on the principles of capitalism.

The educator and legislator, now serving his third term in the Ohio House, is quite savvy in knowing the usual lockstep behavior of Republicans, none of whom voted against the bill. An additional observation by Miller might have also been influenced by knowing the tired rhetoric of one of the bill’s co-sponsors in the Ohio Senate, Andrew Brenner, who famously said in 2014 that public education was “socialism” and should be privatized. 

The Enquirer piece continued, saying Miller worried opponents of the bill would be labeled socialists in future campaigns.

With Brenner and Senate President Matt (“we can kind of do what we want”) Huffman, it’s only a matter of time before they use the words socialism and socialist, along with other Republicans, as tired descriptors for the noun Democrat. 

Come to think of it, if the titular head of the Republican Party is constantly complaining about witch hunts, what if we soon find out that the latest supply chain issue generated by the GOP might result in a shortage of witches?  If they do run out of witches, look for socialist hunts in this election year.

Categories Citizenship, Civics, Curriculum, Democracy, Disruption, Economy, Ethics, Extremism, Ohio

Catharine Rampell: Immigration Boosted Our Economy by $7 Trillion

By dianeravitch
March 6, 2024 //
46

My personal view: I hope Congress passes and the President signs a rational and fair immigration bill. Every one who enters the country should enter legally. Once they are admitted, they should be able to get work permits. If they are seeking asylum, their case should be heard by an immigration judge in a matter of weeks or months, not years. I am not an expert on the subject, just a citizen expressing her views.

Catherine Rampell of the Washington Post asks an interesting question: What if the common wisdom about the costs and benefits of immigration is wrong? We have heard incessantly about the dangers of immigration, about “rapists and murderers,” about all the negatives, but we have also seen a rise in child labor, which may be a replacement for immigrant workers.

Rampell writes:

As the economy has improved and consumers have begun recognizing that improvement, Republicans have pivoted to attacking President Biden on a different policy weakness: immigration. After all, virtually everyone — Democrats included — seems to agree the issue is a serious problem.

But what if that premise is wrong? Voters and political strategists have treated our country’s ability to draw immigrants from around the world as a curse; it could be a blessing, if only we could get out of our own way.

Consider a few numbers: Last week, the nonpartisan Congressional Budget Office released updated 10-year economic and budget forecasts. The numbers look significantly better than they did a year earlier, and immigration is a key reason.

The CBO has now factored in a previously unexpected surge in immigration that began in 2022, which the agency assumes will persist for several years. These immigrants are more likely to work than their native-born counterparts, largely because immigrants skew younger. This infusion of working-age immigrants will more than offset the expected retirement of the aging, native-born population.

This will in turn lead to better economic growth. As CBO Director Phill Swagel wrote in a note accompanying the forecasts: As a result of these immigration-driven revisions to the size of the labor force, “we estimate that, from 2023 to 2034, GDP will be greater by about $7 trillion and revenues will be greater by about $1 trillion than they would have been otherwise.”

Got that? The surprise increase in immigration has led a multitrillion-dollar windfall for both the overall economy and federal tax coffers.

The CBO is hardly the only observer that has highlighted the benefits of the recent influx of foreign-born workers.

As I reported in 2021, “missing” immigrant workers — initially because of pandemic-driven border closures and later because of backlogged immigration agencies — contributed to labor shortages and supply-chain problems. But since then, work-permit approvals and other bureaucratic processes have accelerated. Federal Reserve officialsnoted that this normalization of immigration numbers boosted job growth and helped unwind supply-chain kinks.

Over the long term, Federal Reserve Chair Jerome H. Powell recently said on CBS News’s “60 Minutes,” “the U.S. economy has benefited from immigration. And, frankly, just in the last year a big part of the story of the labor market coming back into better balance is immigration returning to levels that were more typical of the pre-pandemic era.”

A rise in the number of people ready and willing to work is not the only economic benefit. Immigrants are also associated with other positive growth effects, including higher entrepreneurship rates and disproportionate contributions to science, research and innovation.

Consider, too, the national security, humanitarian and religious arguments for providing refuge to persecuted people around the world.

None of this is to diminish the near-term stresses on the U.S. economy that come from poorly managed flows of immigration. These challenges clearly exist, both at the southwest border and in cities such as New York and Chicago, where busloads of asylum seekers are ending up (by choice or otherwise). Absent more resources to manage these inflows and expedite processing either to authorize migrants to work in the United States or to return them to their home countries, this strain will continue.

But there are ways to harness the energies and talents of the “tempest-tost” and patch our tattered immigration system. Some of those tools were built into the bipartisan Senate border bill, which now appears dead.

Instead, GOP lawmakers scaremonger about the foreign-born, characterizing immigration as an invasion. As Rep. Mike Collins (R-Ga.) dog-whistled last week, “Import the 3rd world. Become the 3rd world.”

Alas, the faction working to turn the United States into a developing country is not immigrants but Collins’s own party. It’s Republicans, after all, who have supported the degradation of the rule of law; the return of a would-be dictator; the gutting of public education and health-care systems; the rollback of clean-water standards and other environmental rules; and the relaxation of child labor laws (in lieu of letting immigrants fill open jobs, of course).

America has historically drawn hard-working immigrants from around the world precisely because its people and economy have more often been shielded from such “Third World”-like instability, which Republican politicians now invite in.

Ronald Reagan, the erstwhile leader of the conservative movement, often spoke poignantly of this phenomenon. In one of his last speeches as president, he described the riches that draw immigrants to our shores and how immigrants in turn redouble those riches:

Thanks to each wave of new arrivals to this land of opportunity, we’re a nation forever young, forever bursting with energy and new ideas, and always on the cutting edge, always leading the world to the next frontier. This quality is vital to our future as a nation. If we ever closed the door to new Americans, our leadership in the world would soon be lost.— https://www.reaganlibrary.gov/archives/speech/remarks-presentation-ceremony-presidential-medal-freedom-5

Reagan’s words reflected the poetry of immigration. Since then, the prose — as we’ve seen in the economic numbers, among other metrics — has been pretty compelling, too.

Catherine Rampell is an opinion columnist at The Washington Post. She frequently covers economics, public policy, immigration and politics, with a special emphasis on data-driven journalism. She is also an economic and political commentator for CNN, a special correspondent for the PBS NewsHour and a contributor to Marketplace. She serves on the advisory board for the Journal of Economic Perspectives. Before joining The Post, she wrote about economics and theater for the New York Times. Rampell received the 2021 Online Journalism Award for Commentary and the 2010 Weidenbaum Center Award for Evidence-Based Journalism, and she is a six-time Gerald Loeb Award finalist. She grew up in Florida and graduated Phi Beta Kappa from Princeton University.

Honors and Awards: Weidenbaum Center Award for Evidence-Based Journalism, 2010; Gerald Loeb Award, Finalist, 2011; Gerald Loeb Award, Finalist, 2012; Gerald Loeb Award, Finalist, 2018; Gerald Loeb Award, Finalist, 2019; Gerald Loeb Award, Finalist, 2020; Gerald Loeb Award, Finalist, 2021; Online Journalism Award, 2021

Categories Accountability, Democrats, Economy, Elections, Extremism, Republicans

Thom Hartmann: How the Bork Doctrine Promoted Monopolies and Billionaires

By dianeravitch
March 4, 2024 //
40

If you are old enough to remember a different America, an America of neighborhood shops, of local bakeries, butchers, drugstores (with a soda fountain), shoe stores, bookstores, and dress shops, you may have wondered why most of them have been replaced by national chain stores and anonymous strip malls. Now we see even neighborhood public schools replaced by national charter chains, some even operated by for-profit corporations. Thom Hartmann explains the roots of this change in his new book The Hidden History of Monopolies: How Big Business Destroyed the American Dream. He is releasing the book a chapter at a time on his blog, which should whet our appetite to buy and read the book. This chapter describes the legal ploy that resulted in crushing local enterprise and creating billionaires.

He writes:

Robert Bork was Richard Nixon’s solicitor general and acting attorney general and had a substantial impact on the thinking in the Reagan White House—so much so that Reagan rewarded his years of hard work on behalf of America’s monopolists with a lifetime appointment to the federal bench in the DC Circuit, frequently a launching pad for the Supreme Court.

In the years following Lewis Powell’s 1971 memo, as numerous “conservative” and “free market” think tanks and publications grew in power and funding, Bork’s ideas gained wide circulation in circles of governance, business, and the law.

In 1977, in the case of Continental T.V., Inc. v. GTE Sylvania, the Supreme Court took up Bork’s idea and, for the first time in a big way, embraced the “welfare of the consumer” and “demonstrable economic effect” doctrines that Bork had been promoting for over a decade.

Neither of those phrases exists in any antitrust law, at least in Bork’s context. Nonetheless, the Supreme Court embraced Bork’s notion that the sole metric by which to judge monopolistic behavior should be prices that consumers pay, rather than the ability of businesses to compete or the political power that a corporation may amass.

When Ronald Reagan entered the White House in 1981, bringing with him Bork’s free market philosophy and a crew from the Chicago School, he ordered the Federal Trade Commission to effectively stop enforcing antitrust laws even within the feeble guidelines that the Supreme Court had written into law in GTE Sylvania.

The result was an explosion of mergers-and-acquisitions activity that continues to this day, as industry after industry concentrated down to two, three, four, or five major players who function as cartels. (A brilliant blow-by-blow cataloging of that decade is found in Barry C. Lynn’s book Cornered: The New Monopoly Capitalism and the Economics of Destruction.)

Bork’s reasoning—that antitrust law should defend only the consumer (through low prices), and not workers, society, democracy, or local communities—has become such conventional wisdom that in the 2014 Supreme Court case of FTC v. Actavis, Chief Justice John Roberts wrote a virtual word-for-word parroting of Bork: “The point of antitrust law is to encourage competitive markets to promote consumer welfare.”

Barak Orbach, professor of law at the University of Arizona, is one of a small number of scholars today who are genuine experts in the field of antitrust law. In a 2014 paper published by the American Bar Association, he wondered if Bork knew he was lying when he wrote that the authors of the Sherman Antitrust Act intended to reduce prices to advance “consumer welfare,” instead of protecting the competitiveness of small and local businesses, and the independence of government at all levels.

His conclusion, in “Was the ‘Crisis in Antitrust’ a Trojan Horse?” was that Bork was probably just blinded by ideology and had never bothered to go back and read the Congressional Record, which, he noted, says nothing of the kind.74

While Bork wrote that “the policy the courts were intended [by the Sherman Antitrust Act] to apply is the maximization of wealth or consumer want satisfaction,” Orbach said, “Members of Congress . . . were determined to take action against the trusts to stop wealth transfers from the public.” So much for that: today the Walton (Walmart) family is the richest in America and one of the richest in the world. They’re worth more than $100 billion, having squirreled away more wealth than the bottom 40% of all Americans. And they spend prodigiously on right-wing political causes, from the national to the local.

Amazon’s Jeff Bezos is now wealthier than any Walton; with a registered net worth of $112 billion, he is the richest single person in the world. Bezos is so rich that when he divorced his wife, MacKenzie Bezos, she received 19.7 million shares of Amazon worth $36.8 billion. She instantly became the world’s third-richest woman, and Jeff Bezos remained the world’s wealthiest man.75 While local newspapers are shutting down or being gobbled up all over the country, Bezos personally purchased the 140-year-old Washington Post in 2013 for $250 million. Now Bezos, like the Walton family, can use his sub- stantial wealth to obtain political ends that protect his wealth and allow Amazon to continue to grow.

Categories Billionaires, Competition, Democracy, Deregulation, Disruption, Economy, Ethics, Extremism, For-Profit, History

Reader: Biden’s Economy Is Even Better Than You Think!

By dianeravitch
February 24, 2024 //
46

We have a regular reader named Joel (no last name) who worked for years in a union job in New York. I think he is/was an electrician, but I’m not certain. Nor do I know if he is retired. I do know that he reads economic data with care and knows how to put economic trends into perspective.

Joel wrote in response to a post about the success of Bidenomics, which referred to voters’ concerns about inflation:

The qualifier about inflation is over the top.
According to the Department of Labor Real Median Income is higher than in 2019. The thing about that is that it does not matter what year you pick . It is calculated in 1984 dollars. Simply how much can you purchase with your income today compared to 1984 or in any given year after 1984. So at least 50% can purchase more than they could in 2019 when nobody complained about inflation. Then there is the question of who that 50% is ? Most of the wage gains in the past few years have gone to the bottom 2/5ths of the wage ladder. So presumably those hurt worst by inflation were higher income wage earners who after paying more for eggs and steak still managed to book a trip to Europe or a Disney Cruise in record numbers.

Then there are the poor millennials who can not afford to buy a house! The problem there again home ownership among younger Americans is higher today than it was in 2019. I will help agent 77 a bit with this. The Pandemic and working from home drove a whole bunch of wealthier millennials out of rental apartments in major cities to houses in the burbs making the primary assets of many Boomers a lot higher.

It is well accepted by most economists that “Animal Spirits ” (thank you John Maynard Keynes) drive markets one way or the other. What many economists are not willing to admit is the role of Media in driving those “Animal Spirits .”

Long before Putin invaded Ukraine in 2014 and again in 2022, the media started hyping inflation like it was the late 1970s. Gas in September of 2021 was historically cheap at $3.21 a gallon. It was way higher in 2007-8 and it was was between $3.60 and $3.90 a gallon for 4 whole years from 2011 till 2015. Between increased income and millage the average worker was working far less hours to fill a tank. As Neil Irwin at the NYTimes pointed out. and Yet the Media including the NYTimes managed to find a station a 100 miles off the coast of California (sarcasm)that had gas at $5.99 a gallon. Portraying families as having to choose between baby milk and gas.

Those including Yellen and Krugman who called the spike in prices transitory and due to supply chain issues were absolutely correct. This was not a wage price spiral. Their problem was like most “liberals” they lacked the strength of their convictions and apologized as those supply chains actually started easing.

Meantime bad news sells. Nobody had to convince Republicans (47% of voters) that the Economy was terrible they blamed Biden for the Bad Economy the day he won the Democratic Nomination. However normal Americans whose brains were not yet eaten out by the MAGA virus were convinced that inflation was out of control. Convinced that it was 1981 all over again and this before Putin invaded Ukraine. Which also was also a short lived spike. With inflation starting to ease by June of 2022.

Corporate America took note. If the people expected inflated prices they were going to give it to them. As they laughed all the way to the bank with record profits.

In a complete reversal:

” Strikingly, over half of this increase (53.9%) can be attributed to fatter profit margins, with labor costs contributing less than 8% of this increase. This is not normal. From 1979 to 2019, profits only contributed about 11% to price growth and labor costs over 60%,” EPI.

And now we are told by the Media that Americans are disappointed that prices have not come down. As a reminder for those with short memories.

Or the few here not over 60. Most prices do not come down short of a Depression.

In Sept 1984 when Reagan’s ad declared “Morning in America” :

UNEMPLOYMENT: was 7.3% not 3.7% a pathetic improvement of 0.2% from when he took office in 1981.

INFLATION: was 4.3% not 3.4% as it is today.

The FEDERAL FUNDS Rate was (for those thinking interest rates are high) was 11.30% not 5.33%. Again for those with no memory outside of a few recent recessions a rate not high at all.

If 1984 was morning in America it was a cloudy one at best. Biden has brought a bright sunny day. With some of the most pro worker / working class policies since FDR.

Categories Biden, Economy, Elections, History

Bidenomics: A Surprisingly Successful Economic Program

By dianeravitch
February 8, 2024 //
12

The latest jobs report was released a few days ago, and economists were astonished. The economy added 353,000 jobs in the past month, and unemployment remained low at 3.7%. This should be good news for Biden, But consumers are still concerned about inflation, which hits them in their pocketbook.

President Biden came into office in the midst of a global pandemic. Supply chains were disrupted, and prices were soaring in response. After the chaos of the Trump years, Biden set about hiring seasoned Cabinet officers and a strong economic team. Although the experts predicted that the instability of the COVID years would be followed by a deep recession, that’s not what happened. Throughout Biden’s term, unemployment remained low; the stock market reached historic records; manufacturing revived; and the U.S. economy outperformed nations in Europe and Asia. Yet public opinion polls showed a different picture: Consumers knew that the price of gasoline and grocery store staples went up and didn’t go down. Biden got no credit for the healthy economy because of the price of eggs, cereal, and other staples.

The Economist magazine reviewed the situation and wrote about Biden as an “Octogenarian Radical.”

Joe Biden’s opponents focus on his age as something that makes him doddering, confused and ultimately unfit for office. So the great paradox of the 81-year-old’s first term is that he has presided over perhaps the most energetic American government in nearly half a century. He unleashed a surge in spending that briefly slashed the childhood poverty rate in half. He breathed life into a beleaguered union movement. And he produced an industrial policy that aims to reshape the American economy.

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There is plenty to debate about the merits of all of this. A steep rise in federal spending has aggravated the country’s worrying fiscal trajectory. Subsidies for companies to invest in America have angered allies and may yet end up going to waste. But there is no denying that many of these policies are already having an impact. Just look at the boom in factory construction: even accounting for inflation, investment in manufacturing facilities has more than doubled under Mr Biden, soaring to its highest on record.

What would he do in a second term? Mr Biden’s re-election motto—“we can finish the job”—sounds more like a home contractor’s pledge than the rhetoric of a political firebrand. Yet to hear it from the president’s current and former advisers, Bidenomics amounts to little short of an economic revolution for America. It would be a revolution shaped by faith in government and a mistrust of markets.

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Five elements stand out. The first is a desire to boost workers, mostly through unions. The second is more social spending, especially on early-childhood education. Third is tougher competition policy to restrain big business. Fourth, a wave of investment intended to make America both greener and more productive. Last, Mr Biden wants to tax large firms and the wealthy to pay for much of this.

As with any president, Mr Biden’s agenda thus far has been limited by Congress. The five elements were all present in the $3.5trn “Build Back Better” bill that Democrats in the House of Representatives backed in 2021, only to run smack into a split Senate. The result is that the most prominent part of existing Bidenomics has been the investment element, comprising three pieces of legislation focused on infrastructure, semiconductors and green tech. Signing three big spending bills into law nevertheless counts as a productive presidential term. They add up to a $2trn push to reshape the American economy.

If Mr Biden returns to the White House for a second term but Republicans retain control of the House or gain the Senate, or potentially both, advisers say that his focus would be on defending his legislative accomplishments. Although Republicans would be unable to overturn his investment packages if they did not hold the presidency, they could chip away at them.

Take the semiconductor law. Along with some $50bn for the chips industry, it also included nearly $200bn in funding for research and development of cutting-edge technologies, from advanced materials to quantum computing. But that giant slug of cash was only authorised, not appropriated, meaning it is up to Congress to pass budgets to provide the promised amount. So far it is falling well short: in the current fiscal year, it is on track to give $19bn to three federal research agencies, including the National Science Foundation, which is nearly 30% less than the authorised level, according to estimates by Matt Hourihan of the Federation of American Scientists, a lobby group. If Congress refuses to work with Mr Biden, these shortfalls will grow.

The funding directed at infrastructure and semiconductors is more secure, but much of it will run out by 2028, before the end of a second term. Without Republican support for funding, the investment kick-started over the past couple of years may ease off. High-cost producers will struggle to survive. Critics may see no reason to devote so much treasure to manufacturing when a modern economy based on professional, technical and scientific services already generates plenty of well-paying jobs.

But Mr Biden will have some leverage if Republicans try to water down his policies. Many of the big tax cuts passed during Donald Trump’s presidency expire at the end of 2025. Republicans want to renew them, to avoid income-tax rates jumping up. So one possibility is that Mr Biden could fashion a deal in which he agrees to an extension of many of the tax cuts in exchange for Republicans in Congress backing some of his priorities, including his industrial subsidies—never mind that such an agreement would be fiscally reckless.

The White House is also hoping that Mr Biden’s investment programmes will develop momentum of their own. “We are very pleasantly surprised by the extent to which private capital has flowed in the direction of our incentives,” says Jared Bernstein, chair of the president’s Council of Economic Advisers. Much of the money is going to red states, spawning constituencies of businesses and local politicians who would object to cuts. Meanwhile, there is, in principle, bipartisan support for federal spending on science and technology as a way of safeguarding America’s competitive edge over China. That is why a few dozen Republicans in the House and Senate, albeit a minority, voted for the semiconductor package. Given this constellation of interests and leverage, the industrial policies that defined Bidenomics in the president’s first term would probably survive his second term, albeit in somewhat more limited form.

But what if Mr Biden is less constrained? To really understand the potential scope of Bidenomics, it is worth asking what the president would do if the Democrats end up controlling both houses of Congress. Once they come down from their elation at such an outcome, the team around Mr Biden would know that they have a limited window—probably just two years, until the next set of midterm elections—to get anything of note done.

For starters they would turn to the social policies left on the Build Back Better cutting-room floor. These include free pre-school for three- and four-year-olds, generous child-care subsidies, spending on elderly care, an expanded tax credit for families with children and paid parental leave. Janet Yellen, the treasury secretary, has described this agenda as “modern supply-side economics”. She argues that investments in education would make American workers more productive, while investments in care would free up people, especially women, to work, leading to a bigger labour force. But it would also be costly, running to at least $100bn a year of additional spending—adding half a percentage point to the annual federal deficit (which hit 7.5% of gdp in 2023). And implementation would be challenging. For instance, funding for child care would fuel demand for it, which in turn would exacerbate a chronic shortage of caregivers.

Mr Biden’s desire to strengthen unions would also receive fresh impetus. The president describes himself as the most pro-union president in American history—a claim that may well be true. In his first term support for unions was expressed most clearly through words and symbolic actions: when he joined striking auto workers near Detroit in September, he became the first president to walk a picket line. Mr Biden would have liked to have done more. He had at first wanted to make many industrial subsidies contingent on companies hiring unionised workers, a requirement that did not make it into law. The labour movement’s big hope for a second Biden term is passage of the pro Act, which would boost collective bargaining by, among other things, making it harder for firms to intervene in union votes. That would represent a gamble: the flexibility of America’s labour market is a source of resilience for the economy, which has been good to workers in recent years.

The flipside of Mr Biden craving approbation as a pro-union president is that he has also come to be seen as anti-business. Members of his cabinet bridle at this charge, noting that corporate profits have soared and that entrepreneurs have created a record number of businesses during his first term. Yet the single biggest reason why Bidenomics has got a bad rap has been his competition agenda, led by Lina Khan of the Federal Trade Commission (ftc). Although her efforts to cut down corporate giants have spluttered, with failed lawsuits against Meta and Microsoft, she is not done. The ftc has introduced new merger-review guidelines that require regulators to scrutinise just about any deal that makes big companies bigger, which could produce even more contentious competition policy. Excessive scrutiny of deals would also use up regulators’ scarce resources and poison the atmosphere for big business. An alternative focus, on relaxing land-use restrictions and loosening up occupation licensing, would provide a much healthier boost to competition.

Captain of Industry

At the same time, Mr Biden may double down on the manufacturing policies of his first term. The $50bn or so of incentives for the semiconductor industry has been a start, but it is small relative to how much investment is required for large chip plants. Advisers talk of a follow-on funding package. There would also be a desire to craft new legislation to smooth out bumps in the implementation of industrial policy. Todd Tucker of the Roosevelt Institute, a left-leaning think-tank, advocates a national development bank, creating a reservoir of cash that could be channelled to deserving projects.

How to pay for it all? Mr Biden has long made clear that he wishes to raise taxes on the rich, in particular on households earning over $400,000 a year and on businesses. The president’s advisers argue that he truly believes in fiscal discipline. His budget for the current fiscal year would, for instance, cut the deficit by $3trn over a decade, or by 1% of gdp a year, according to the Committee for a Responsible Federal Budget (crfb), a non-profit outfit. That, however, is predicated on Democrats exercising restraint as tax receipts increase—something that is hard to imagine, says Maya MacGuineas of the crfb….

Most of the action, then, would be in the domestic arena—the battleground for everything from child-care spending to semiconductor subsidies. Supporters argue that these policies would make America more equal, propel its industry and tilt the playing-field towards workers and away from bosses. To many others, they look like a lurch back to bigger government, with an outdated focus on both manufacturing and unions, which may strain ties with allies. Mr Biden was a most unlikely radical in his first term. If the polls head his way, he may go further yet in a second. 7

Categories Biden, Competition, Democracy, Democrats, Economy, Elections, Unions

Billy Townsend: America Rejects DeSantis and “the Florida Blueprint”

By dianeravitch
February 4, 2024 //
64

Florida blogger Billy Townsend was delighted to see Ron DeSantis get booted from the Republican primaries after the Iowa caucuses. DeSantis had large ambitions, thinking that the nation wanted his harsh rightwing policies. But he made the mistake of thinking he could run to the right of Trump. There’s no space there.

Billy hopes that voters saw through the hype about “the Florida Blueprint” and DeSantis’s promise to “Make America Florida.”

Before the primaries, in March 2023, he predicted that DeSantis would flounder, and he was right:

The same Florida state “government” of gangsters that destroyed the Florida state education system will invade the United States of America in 2024. Whoever wins this civil war-as-referendum — the gangsters or the country — will control the U.S. Military and federal law enforcement power.

We don’t know who will command Florida’s invasion yet — tiny Emperor Ron DeSantis (with his pseudo VP Jeb Bush) or Florida-ism’s Pope Donald Trump. But it makes no difference. Whoever wins their gross song of ice and fire will then lead Florida’s army of the dead right toward Colorado and Wisconsin and Pennsylvania.

Florida’s political and cultural invasion of the country should be laughable. The Florida “blueprint” has made us a hollowed out shell of a state — pleasantly livable for people with capital (like me) because a few big private interests team up to “govern” our warm spaces enjoyably for customers who can pay. And a few cities, like mine (Lakeland), which is blessed with a money-belching socialist power utility, create a nice and warm urban experience.

But as a state, rather than a vacation destination, retirement home, or temporary crash pad for remote workers and tech bros, we are: extremely high cost, extremely low wage, extremely corrupt, high inflation, nation’s worst education “learning rate,” bad public service, high crime, low birth rate, high and spiking abortion rate, and very very old.

If America fully grasps that Florida Blueprint by 2024, I feel quite certain that we will repulse this absurd invasion-by-mafia. The referendum on Florida should not be a close run affair.

But our worst American billionaires and mouthiest showboating sheriffs like hollowed out states; and they far prefer mafias to unions or citizens mobilized politically around public good.

Florida is their model state for decadent capital cut free from any public oversight, public good, or sense of shared citizenship. And they will try to impose that Florida on everybody else by pretending that Florida is not Florida. Anti-civic capital is often dumb. But it’s heavily armed; and it has great sway — although not total away — over what the public is told.

Crushing Florida’s invasion — explicitly rejecting the failed “Florida Blueprint” at the national level — is crucial to any effort to reform Florida at home. The Florida Blueprint must culminate, in the military sense, as an expansive political force. That’s the sine qua non of Florida’s future…

The MAGA Pope thrashed the Tiny Emperor

Well, MAGA Pope Trump’s GOP smashed the tiny emperor’s irrationally cocky army of Pushaws and private jet jockeys as easily as Trump gropes unwilling women. (Sorry Trumpers, he is who he is. I can’t make your citizenship choices for you. But you will own them. Expect no moral mercy or understanding from me this time around.)

Trump’s formally adjudicated sexual abuse and Capitol Lynch Mob leadership aside, his defenestration of DeSantis is a useful first step. It’s good for Florida and America.

Even better, when America as a whole saw the “Florida Blueprint” personified by Gov. High Heels, America as a whole rejected Gov. Pudding Fingers thoroughly and humiliatingly, with the national contempt growing almost by the moment. Watching DeSantis in the polls has been like watching the Enron stock price circa October 2001 (go Google it, youngs).

Yes, in large part, that’s because he’s personally very weird and off-putting and cruel in the way that people who torture cats are weird and off-putting and cruel.

But it was also because Florida, as a model for America, got a thorough thrashing — including by Trump himself. Of all people, Florida Man Bonesaw Jesus himself attacked the Florida Model of “governing” a week or two after I published my piece.

He sounded just like me. LOL. I’d bet a lot of money his gross people read my stuff.

The GOP primary campaign ended that day, with the Trump campaign’s unanswered dismantling of Florida as an expansive idea. A loooooonnnnnng, slow humiliation ensued, tempered only by extensive luxury travel.

In some ways Trump is now running as the ultimate Florida man — full of gross indulgence and utterly devoid of any concern for the state where he lives. Only a Florida Man would have the chutzpah to run against Florida from Florida when the party he owns has been in power here for a generation…

Anyway, ya’ll will generally share my mirth for now in laughing at DeSanctimonious. We can do that together. Trump gives you permission.

But then you’re all gonna try to convince yourselves it’s fine to line up behind a more senile version of the Zieglers writ large — the Capitol Lynch Mob leader with a terrible economic record, a jury-adjudicated sexual abuser, a criminal openly running on “retribution” and “dictatorship on Day 1,” who you all know would rape your wife and daughter and force them to have an abortion after getting rid of Roe v. Wade.

You’re going to line up meekly and pathetically behind the idol who defiled your religion and turned it against Jesus Christ Himself.

If you are enjoying the news from Florida, open the link and keep reading.

Categories Bigotry, Censorship, Corruption, Democracy, DeSantis, Economy, Education Industry, Elections, Ethics, Extremism, Florida, Trump

Umair Haque: MAGA and the Failure of America’s “Grand Social Experiment”

By dianeravitch
February 2, 2024 //
59

Umair Haque is an economist and a brilliant analyst of social and political trends. I read whatever he writes with a sense of amazement at his insight and his ability to synthesize events and their underlying causes. The following post from his blog called “The Issue” is especially alarming. It explains a lot about why we don’t have good health care, why the public sector is neglected, why privatization has run amok.

If you read one thing today, read this.

He writes:

He’s cruising towards clinching the nomination—as we all knew he would. The dreaded Trump-Biden rematch appears to be squarely in the sights.

And there are many, many theories being floated about Trump’s resurgence. Did he ever really go away, though? Still, it’s worth examining them for a moment. Trumpism’s a form of racial power, in a society divided. Trump’s power’s amplified by technology and society’s dependence on social media. Trump might win, but the coalition’s going to be so unstable he won’t accomplish much. It’s the last gasp of a nation facing demographic change. And so on.

I think that all these carry water. But I also think…there’s a truer truth at work here. Perhaps, in a sense, Trumpism’s America’s destiny. I know that’s a provocative thing to say, but I don’t mean it that way. I just can’t help thinking it lately, because…

What’s the most salient fact about America? Americans? Even—especially—Trumpists? The vast majority of Americans want a very, very different society. A more…can I say it? Liberal one. Even Trumpists don’t agree with most of Trump’s policies—they just support Trump, the Father Figure, come hell or high water. But when we ask Americans what kind of society they want, invariably, the vast, vast majority will plead for things like healthcare, childcare, retirement, stability, security. In short, Americans want eudaemonia—genuinely good lives.

But a kind of Stockholm Syndrome’s set in. They won’t…choose that form of sociopolitical economy. Even when it’s offered to them time and time again, whether in the way of a Bernie, or a Liz, and so forth.

Why is that? What explains that? This isn’t just “voting against your own interests”—it’s something stranger, deeper, weirder: remember, even Trumpists don’t agree with much of Trump’s agenda. So what can explain this pattern persisting over decades?

Let’s look at America objectively for a moment. What do you see? We’re going to speak factually, empirically—this isn’t about politics at all, really.

America’s a nation which failed to modernize, as I often say. It didn’t invest in itself. Europe and Canada’s investment rate is about 50%—while America’s is just 20% or so. Hence, Europeans and Canadians have cutting edge social contracts—made of the very things Americans desperately lack, like universal healthcare, childcare, high-speed rail, retirement, and so on. It’s true that in recent years, for example, in Europe, investment hasn’t kept pace—and hence, pessimism has grown there, too.

But America’s a special case. Its flatly refused to build a functioning social contract for…the entire modern era. Decade after decade, America’s rejected basic public goods. And so the result of course is that Americans pay eye-watering rates for everything that’s free in most other rich nations—education, healthcare, etc. My favorite example is universities. Harvard will set you back north of $60K a year—the Sorbonne in Paris is free. That’s the difference a functional social contract makes.

America’s social contract, sadly, is more pre-modern, Darwinian, Victorian: the strong survive, the weak fall and or perish, and that’s what’s not just right and just, but “efficient” and “productive.” Life is dog-eat-dog, and brutal competition defines every aspect of life. But how has that worked out?

Before we get there, another question needs to be asked. Why did—do—Americans fail to choose a modern social contract, time and again? There are many reasons, each one like the layer of an onion. It wasn’t offered to them. They were offered a lukewarm choice between Reaganomics, and then Clintonomics—etcetera. All of these, while they differed in the details, were variants of the same form of economy: nobody should have anything much as a basic right, everything should be financialized and capitalized, profit-maximization in “free” markets would unleash prosperity for all, and the wealth would trickle down.

But the very opposite happened. The wealth trickled up. We recently discussed how billionaires have gotten so much richer just during the pandemic that every American household would be $40,000 better off. That’s more than the median income—an astonishing statistic. And that comes after yet another wealth transfer upwards, during the last few decades—$50 trillion to the very richest. That’s half of the entire world’s GDP. Another startling statistic.

America, in other words, was the subject of Grand Social Experiment. Call it what you like—hypercapitalism, free markets, neoliberalism. We’re at the point where labels don’t matter much anymore—just the point does. The experiment failed. I’m not saying that American life is all bad, but I am saying that the results are self-evident: democracy’s on the brink, there’s a feeling of hopelessness on every side, among every social group, generation after generation’s experiencing rapid, sharp downward mobility, and young people say they “can’t function anymore”—just a smattering of statistics of social collapse.

So. America was a nation that failed to invest in itself—the Grand Social Experiment. We can put it in yet another way, a more philosophical one: all the old guff about “standing on your own two feet” and “pulling yourself up by your bootstraps” and whatnot. The results have been catastrophic: now democracy itself faces an existential challenge from a figure who’s already tried to unseat it once.

How are those two things linked? I think they’re connected in many, many ways. You see, when people experience what Americans have, especially those in the former working and lower middle class—a profound sense of dread, hopelessness, even trauma, shaped by downward mobility, and the disappearance of a future, community, social bonds, security, stability—they seek just strength and succor in the arms of demagogues. Those wounds open the door for an omnipotent Father Figure—they practically invoke the need for one.

These are shades of Weimar Germany, of course. The demagogue arrives, and scapegoats long-hated groups in society, blaming them for the woes of the pure and true. Isn’t that more or less what Trumpism’s appeal is based on? And doesn’t it begin to explain just why plenty of those who support Trump as demagogue even when they want a very, very different society from the one he’s going to deliver? They’re not thinking straight, as we all say. But there’s a reason why. The wounds go deep, right into existential territory itself. And then there’s an existential backlash, too. It’s me or you. I’m the master, you’re the slave. I deserve to live, you deserve to…

All Grand Social Experiments need…maybe not propaganda, but a certain ideological hardening to take place. They can’t happen otherwise. And this, too, is what happened in America. People were fed the myths of “free markets” and “trickle down economics” and so on for decades. So much so that even to this day to challenge them is to be labelled a “socialist.”

This was a process of ideological politicization. That is, these were all theories. Politics trucks in theories. But when those theories come true—or not—then we’re in the realm of empiricism, facts, reality. Americans were told that these theories had to come true. So much so that both parties offered slightly different versions of them. Sadly, that’s still true today—the Democrats are there for democracy’s sake, true, but they’re hardly offering much in the way of a modern social contract. Yes, on issues like abortion, the Democrats offer something better than theocracy. Still, their notion of progress falls well short of a truly modern social contract. Both parties agree, basically, that a modern social contract isn’t something Americans enjoy. That’s how deep this ideological hardening goes.

“Conditioning” might be too strong a word—but certainly, Americans were told to believe in the Grand Social Experiment for decades, to the point that any other alternative was considered “radical,” or even “communist” and so on—even while Europe and Canada proceeded to forge a different, socially democratic path. And of course it’s eminently true that there was a racial component to all this: Americans were told to reject “paying for those people’s schools” or educations or what have you, the clear implication being that “they” were different, lazy, foolish, liabilities. No clear aspiration to universalism was had, and in no sense were Americans bonded together as equals—the strong were to survive, and the weak perish, and that was what was moral, just, true, and theoretically sound, the key, somehow, to prosperity. Lead was to turn to gold. And to question it was taboo.

America still lives in the residue of this process of ideological hardening. This conditioning, though like I said, I think that’s too strong a word. I think that’s what explains this strange Stockholm Syndrome: Americans want a modern social contract, by and large, and yet here they are, unable to bring themselves to back one. In that vacuum, in that gap, what choice is left? The insecurity and instability, the fear and trauma—they turn people towards demagoguery. They reopen old wounds of hate and spite, instead of healing them with prosperity and trust and progress. They reduce people to their animal selves, seeking what stability and security they can find in older hierarchies of power and dominance, in which there appears to be some nostalgic certainty.

That’s a lot to chew on. I’m not saying I’m right. But I am saying that this may be where a society that fails to forge a modern social contract ends up. Haven’t we seen just this in plenty of “third world” countries? This oscillation between democracy and authoritarianism? I’m not saying America’s a “third world” country—don’t kid yourself, it’s not exactly Bangladesh. But I am saying that this place isn’t a stable equilibrium. The place the Grand Social Experiment—everyone’s a competitor, rival, adversary, in a brutal game called only the strong survive—ends? It might be right here. Destiny.

Destiny, of course, isn’t fate. It can be made and remade. But will America understand that before it’s too late?

Categories Accountability, Billionaires, Corruption, Cruelty, Economy, Elections, Extremism, Poverty, Privatization, Trump
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