Republicans had nothing to do with passing Obamacare, and they will not bring the program down. The falsely named Affordable Health Care Act is coming undone on the strength of its own contradictions. It’s not a national health program, at all – “just Obama working a scam for the insurance companies.”

“Private insurers make money by betting against the health interests of their customers.”

Obamacare is unraveling, not because the administration is particularly incompetent or unlucky, and certainly not as a result of the Republicans’ unrelenting hostility to the Obama health insurance plan. Indeed, ever since the bill’s passage in early 2010, the GOP’s holy war against Obamacare has served to solidify reflexive Democratic support for what has always been a Republican-inspired bill.

The truth is, the Affordable Health Care Act is coming undone because of its own, tortured internal logic. At root, it is a fraud on the public: a scheme to subsidize and more deeply embed a private insurance system that can only make profits by denying sick and vulnerable people health care, and playing different demographics of Americans against each other. As every other industrialized country in the world has already learned, it is impossible to build a genuine, universal healthcare system on a cut-throat capitalist foundation. Private insurers make money by betting against the health interests of their customers. Obama served his corporate masters by conspiring to make tens of millions more Americans into customers of private insurers. He tried to dress up one of the greatest corporate subsidies in history as if it were a solemn national mission, a rebirth of the social compact between the American people. But of course, Obamacare is no such thing; it is a racket to prop up private insurers with public money, while allowing the profiteers to continue to run the show.

“It is a fraud on the public.”

You can’t hide a truth that big. The Obamacare website has suffered from terminal complexity because white collar crime is usually quite complex. The web site attempts to reconcile the profit margins and various products of a universe of private insurance corporations, while at the same time pretending to serve the health needs of the people at an affordable cost. Obamacare claims to be in the business of serving both the public and corporate stockholders. But that’s mission impossible. If Obamacare is based on making profits for private corporations – if that is what keeps the system going – then the public’s health care needs will always be an afterthought. And, that will be obvious in the way that the website is organized as a sales platform that matches federal subsidies with corporate products, rather than matching people with the medical resources they need to survive and thrive.

Website complexity and failures aside, Obamacare can never become part of a national social compact, something of which all Americans can be proud. That’s because, by definition, corporate insurance schemes divide people into “winners” and “losers” – although, of course, the big winner is always the corporation. Young, healthy people know they are the fatted calves of the insurance business, and they are avoiding Obamacare like the plague. If this were really a national health care program, like Medicare for All, then most young people would join in the national health care mission. But this is just Obama working a scam for the insurance companies, and young folks know it. Anybody who manages to get access to the web site knows it.

The fatal flaw in Obamacare can’t be fixed. The best thing that could happen would be a quick and total collapse. Large majorities of Americans still support Medicare for All, but Obamacare stands in the way of a real national health plan – just as the Republican right-wingers that invented Obamacare back in 1989 intended.

For Black Agenda Radio, I’m Glen Ford. On the web, go to BlackAgendaReport.com.

BAR executive editor Glen Ford can be contacted at Glen.Ford@BlackAgendaReport.com.

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Fifty years ago, Martin Luther King, Jr. won the Nobel Peace Prize.  One of the most striking aspects of his acceptance speech is the hope he expressed in humanity’s ability to overcome war.  This was no mere idealism on his part.  Less than five years earlier, the world had come to the brink of thermonuclear destruction because of Cuba.  The United States and Soviet Union eventually diminished their threats and, in 1963, signed and ratified an agreement to end the open-air nuclear testing that was blanketing the planet with radioactive fallout.  These were small steps, but to King, they indicated that human beings were capable of cooperation, even in the face of something as horrendous as the suicide of the human race.

Today, the annihilation of humanity looms again as a possibility because of climate change. In 1964, King could not have imagined the particular features of global environmental destruction that we now face. Yet, he had reflected carefully on the forms of action needed to avert mass extinction before, so his work can still be useful today in thinking about directions for the climate justice movement.

First, King reminds us to think in terms of the “beloved community” in which we are all interconnected.  That means that the injustices that we experience are also intertwined.  For many climate activists, thinking about racism, sexism, or poverty are side issues; after all, if there is no habitable earth, then those problems won’t really matter.  King cautioned against the view that injustices could be divided into neat isolated silos.  The world, he said, faces the danger of the “evil triplets”:  racism, militarism, and materialism.  These are inter-related features, he thought, that are at the root of wars of aggression, such as Vietnam, against distant peoples for control of natural resources needed to maintain the luxuries of a few.

Climate change activists today need to acknowledge the overlapping systems of injustice that make some people vulnerable to climate damage much more immediately.  It will be poor countries, largely in the Global South, that will suffer the most from environmental degradation of air, water, and soil.  In the US, extreme weather–as we have already seen with Hurricanes Katrina and Sandy–will disproportionately affect economically fragile areas, usually made up of historically marginalized communities:  indigenous people, people of color, immigrants, the elderly, and LGBTQ people.  Climate justice activists will need to build alliances around these diverse issues, and develop the ally capabilities to listen to, and lift up, the voices of disenfranchised people.

In his last years, King wrote about the forms of activism that were needed to confront the evil triplets.  He warned activists not to get trapped by the usual mix of demonstrations and protest that were hallmarks of the early Civil Rights movement.  With these forms of direct action, King believed the movement had fallen into “crisis thinking,” that is, reacting to injustice after it had already appeared.  Complex justice would require mass protests, but it also meant getting out in front of social problems, and building alternative civic and economic structures so that people would not have to rely on problematic state or corporate institutions.  He called for organizing neighborhoods and creating diverse networks of allies that could support one another.

A glimpse of this kind of activism came about when Occupy organizers provided assistance in the wake of Hurricane Sandy in 2012.  Achieving climate justice, then, will mean not only protests against this pipeline or that shipping port, but also working to connect local community gardens, alternative currencies, free libraries and medical clinics, into thick webs reaching across urban and rural areas.  This kind of organizing will enable widespread skill sharing and mutual aid, but also deliver a message that was dawning at the height of the Occupy movement:  another world is possible, and there are many across the world who desire to work together to build it.

King believed we had it within us to avoid mutually assured destruction; he also thought we were developing the insights and activist resources to radically align our world to the moral arc of the universe.  The climate justice movement might become the place where we prove him right.

José-Antonio Orosco is associate professor of philosophy at Oregon State University, where he directs the Peace Studies Program. He writes for PeaceVoice and is the author of Cesar Chavez and Common Sense of Nonviolence.

There is no question but that New York’s new mayor, Bill De Blasio, owes his landslide victory in the November election to the Occupy Movement.

It was Occupy Wall Street’s minions, hemmed in by thug-like NYPD officers armed with sidearms, clubs and pepper spray cans, who in 2011 abruptly changed the national conversation about capitalism, introducing the concept of “We are the 99%,” and focusing attention on the enormous enrichment of the top 1% of Americans over the past several decades, as a direct result of public policies on taxation and de-regulation.

And it was that new focus on the country’s yawning wealth and income gap that provided De Blasio with his winning campaign theme.

It’s a sad commentary on the diminished influence and power of the left in America that De Blasio and Kshama Sawant, who won a little city council seat in the second-tier small city of Seattle (pop. 635,000) as an openly socialist candidate, are being hailed as the heroes of a resurgent progressive movement.

[pullquote]De Blasio handed the job of swearing him in to a man who, like the current president, spent most of his time in office betraying whatever progressive principles the Democratic Party may have had since the time of FDR.[/pullquote]

The truth is, it’s hard to know how progressive and “left” De Blasio really is. Certainly his background as a backer of the Sandinista revolution beats Barack Obama’s short stint as a “community organizer,” and there are other reasons, not least his evident lack of greed, that suggest De Blasio may be the real deal and at least a worthy descendent of New York’s last truly progressive mayor, Fiorello La Guardia. But there are also troubling signs that he may not be all that he presents himself as. The most troubling of these signs is his evident closeness to former president Bill Clinton — the man whose presidency brought us war in Bosnia, the unravelling of habeas corpus, the beginnings of the war on terror (see Effective Death Penalty Act), the “end to welfare as we know it,” and of course, the elimination of the Glass-Steagall Act that converted banks into casinos.

Inviting Bill Clinton to administer his oath of office was a bad sign. There were so many New Yorkers who would have been better suited for that symbolically important job, like Ruth Messinger, former New York City Councillor and Manhattan Borough President and a life-long fighter for progressive causes in the city, or Heidi Beghosian, executive director of the National Lawyers Guild, whose minions struggled mightily to defend civil liberties under the onslaught of Mayor Mike Bloomberg and his riot-clad centurions. Instead De Blasio handed the job to a man who, like the current president, spent most of his time in office betraying whatever progressive principles the Democratic Party may have had since the time of FDR.

My suggestion for New York’s new mayor is that he make a clean break with the prior Bloomberg administration by announcing that as soon as it warms up a bit, Occupy Wall Street is invited to return to the Financial District. Instead of an army of beligerant cops, and endless harassment, denied permits and endless bureaucratic impediments, he can promise them plenty of PortaPotties and only a minimum police presence as required, not to control the occupiers but to protect them from any security goons hired by the local banking establishments. He should also promise to spend some time down there with them, maybe bringing along his family and some sleeping bags to join activists as they continue to expose and denounce the predations of the “too-big-to-fail” banks that populate Lower Manhattan’s narrow canyons.

While he’s at it, De Blasio should also immediately propose legislation offering significant bounties to financial industry whistleblowers who spill the beans on any misconduct that is contributing to the city’s financial struggles, or to the illegal enrichment of the city’s financial elite.

Given that the mayor and the city council in New York determine the budgets of the district attorneys offices for each of the city’s five boroughs, De Blasio might also put the word out to Manhattan DA Cyrus Vance Jr. that he should stop pussyfooting on prosecuting financial fraud in the banking industry. Vance’s office has only brought one criminal indictment against a bank to date [1], and that was against a tiny privately-owned Chinese bank based in New York’s Chinatown — one that, interestingly, boasts one of the lowest mortgage default rates in the nation. Although four of the nation’s largest banks — JPMorganChase, Morgan Stanley, Goldman Sachs and Citigroup — are all headquartered in Manhattan, and are all serial criminal fraudsters, Vance has not brought a criminal case against any of those institutions and their top executives, seemingly taking his cue from the non-prosecution stance of the US Justice Department. Yet New York State’s financial laws give Vance the authority to go after criminality of any bank in his district. De Blasio should use the power of the purse to try and change Vance’s mind about his prosecutorial focus, when it comes to financial crimes.

It’s great to be optimistic, and I’m happy to see De Blasio, a man of modest means, in Gracie Mansion, and billionaire Bloomberg, America’s 10th wealthiest person, taking his leave (albeit with his net worth of $31 billion now somehow almost eight times the $4 billion it was when first won election in 2000!).

But as Ronald Reagan famously said during his nuclear weapons negotiations with the Soviet Union, it should be “trust but verify.” I want to see hard evidence that New York’s new mayor is a real progressive, and not an impostor like the man who swore him in, or like the man now in the White House.

There are good ways he can prove his leftist bonifides, and I’ve named a few of them here.

Dave Lindorff is a founding member of ThisCantBeHappening!, an online newspaper collective, and is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press).

The General Theory and the Current Crisis: A Primer on Keynes’ Economics

Introduction: The “Revolutionary” Who Wasn’t

BY ALEJANDRO REUSS
This is a web-only article, available only at www.dollarsandsense.org.

Keynes is often described as a “revolutionary” thinker. In one sense, this is correct. Keynes was one of the most important economic thinkers of modern times, and his ideas were at the center of a major “paradigm shift” in economic theory and policy. He issued his masterwork, The General Theory of Employment, Interest, and Money(1936), at a critical juncture, in the middle of the Great Depression, when the orthodox views from which he had broken seemed at a loss to explain the crisis or a way out of it.

Keynes was not the first major economic theorist to understand that capitalist economies were prone to depressions (Marx had written on the subject nearly a century before), nor was he the only major economist of his generation to arrive at the basic insight that total demand could fall short of the level required to ensure full employment. (Some others, most notably the Polish economist Michal Kalecki, came to the same conclusions separately from, and even slightly earlier than, Keynes.) Keynes, however, was already a major figure in British economics and politics at a time when Britain was a much more important world power than today, so his ideas had a bigger impact in ruling circles than they would have coming from elsewhere, or from economists with a more radical views about the changes necessary to cure the problem.

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As “revolutionary” a figure as Keynes was in the history of economic thought, he was, in another sense, a profoundly anti-revolutionary thinker. This is not to say that the changes he proposed, particularly in the role of government in capitalist economies, were trivial. He believed the problems of capitalism—especially the “arbitrary and inequitable” distribution of income and wealth and the “failure to provide full employment”—were very serious, and he did not think that these “outstanding faults” of capitalist economies would fix themselves. He thought that the state would have to play a major role in fixing them. However, as much as it was his goal to get rid of what he considered bad about capitalist societies, he also aimed to preserve what he considered good about them, which was a great deal.

In The General Theory, Keynes praises in no uncertain terms what he considers the virtues of “self-interest,” “individualism,” and “private initiative and responsibility” and their place in a capitalist society. His motive for wanting to eliminate excessive inequality and unemployment was, to a great extent, that he viewed them as threats to capitalism. In his view, these “outstanding faults” created the danger of revolutionary upheaval. An enlargement of the role of government was the “only practicable means” for eliminating these problems and “avoiding the destruction of existing economic forms in their entirety.” It is easy to imagine Keynes lashing those who denounce government intervention in the economy as “socialism” for their failure to recognize these policies as means of preserving a well-functioning capitalist economy.

The “Socialization of Investment”

Keynes did not object to “significant inequalities” in income and wealth, and therefore did not aim to create a society in which incomes and wealth were equally (or almost equally) distributed among all members of society. He offered two justifications for inequality, as an incentive for productive activity and as a channel for competitive impulses that otherwise, he thought, might take on more predatory forms. However, he did think that existing inequalities were excessive, and that it would be desirable to reduce them.

Keynes did not believe that the accumulation of saving in the hands of the wealthy—and the necessity of this saving for financing investment—justified inequality. He pointed out that the rates of interest necessary to pry away the savings of the rich for use by society to finance investment were typically too high to be consistent with full employment. With interest rates too high, Keynes argued, investment is too low (since some investment projects that would be profitable at a lower rate of interest would not be profitable, and therefore would not be undertaken, at a higher rate), and therefore so are total output and employment.

Keynes viewed income from interest (which he called “rentier” income) as basically parasitic. He compared the interest income of the “functionless investor” to the rental income of landlords. Neither interest nor rent, he argued, required any “genuine sacrifice” on the part of their recipients. Rather, they were merely rewards for owning scarce resources. He advocated, therefore, a reduction of the interest rate to little or nothing and what he termed the “euthanasia of the rentier.” The cost of capital equipment, he argued, would cover its production cost, as well as allowances for depreciation and risk, but not incomes for idle owners of capital.

Keynes did not think that the dramatic reduction of interest rates need disrupt the functioning of a capitalist economy. First, he recognized that such a policy would increase the incentive to spend on present consumption. He did not agree with conventional economists, however, that this would necessarily reduce overall saving or investment. He argued that increased consumption expenditures, by increasing demand and resulting in higher incomes, could actually increase saving and investment. Second, he argued that higher interest rates resulted in lower investment, since entrepreneurs would only engage in investment projects that produced returns at least equal to the rate of interest. Therefore, lower interest rates, not higher, would result in higher investment and incomes. Third, Keynes argued that a major government-directed investment program could eliminate the scarcity of capital and, with it, the “oppressive power of the capitalist” to extract a tribute in the form of interest.

Keynes proposed that “communal saving through the agency of the State” take the place of private saving in financing investment. The details in The General Theory are rather sketchy, but one can imagine a government investment fund that either supplies private businesses with funds to finance the purchase of durable equipment or that finances the construction of such equipment directly and rents it out to private businesses. Keynes does not go into detail on the sources of this saving, though he seems to be thinking primarily of tax revenue (rather than voluntary deposits in a public bank). While he mentions “higher taxation of larger incomes and inheritances” as one possibility, he does not come down firmly in favor of this idea. Nor does he come to any firm conclusions about the magnitude of such savings—the degree to which it is “right and reasonable to call on the living generation to restrict their consumption” for the benefit of future generations.

What Keynes Did Not Have in Mind

Keynes did not favor the general socialization (public control) of productive enterprise. He regarded private enterprise as a source of “efficiency” and a “safeguard of personal liberty” (379-381). He envisioned the state as regulating the overall levels of consumption and investment, an enlarged role to be sure, but one perfectly consistent with leaving most of the economy in the hands of private actors. This overall regulation could be accomplished, he argued, by such means as control of taxes and interest rates, and did not require the “ownership of the instruments of production” by the state (378-379).

Keynes did not favor the elimination of all inequality of income or wealth, which he viewed as incentives for “valuable human activities,” nor the elimination of all income from property. While Keynes criticized the landlord and rentier as parasitic, he certainly did not view business owners in this way. (When he referred to the “oppressive power of the capitalist” to exploit the scarcity of capital, he was reserving the term “capitalist” for the rentier. He usually used the term “entrepreneur,” rather than “capitalist,” for business owners.) Keynes suggested that the elimination of interest income—from “risk-free” investments—would still leave room for investor to profit from the exercise of “enterprise and skill” in choosing among risky investments (221). He also thought that society could benefit from the “intelligence and determination and executive skill” of business people, which could be “harnessed … on reasonable terms of reward” (376-377) under a system of progressive taxation.

Keynes did not aim at a major upheaval in the basic economic or political institutions of capitalist societies. He did not oppose private property (over productive resources such as factories, mines, land, etc.), wage labor (workers being hired for pay by the owners of these resources), or market exchange. Nor did he favor sudden or conflictive social change. Quite the contrary, Keynes clearly describes himself as an enemy of revolution and insists that none of the changes that he proposes require one. He imagines the “euthanasia of the rentier” as a quiet and incremental process, “nothing sudden, merely a gradual but prolonged continuance of what we have seen recently in Great Britain, requiring no revolution” (376). The overall government regulation of economic activity, he argues, could be “introduced gradually and without a break in the general traditions of society” (378).

What Keynes Did Have in Mind

The picture that emerges, Keynes as an advocate of a “regulated capitalism,” with a substantially increased role for the state in economic life (especially in guaranteeing full employment) and reduced inequality of incomes and wealth, is correct but incomplete. A fuller picture of Keynes’ social vision comes from his political writings of the 1920s, especially a 1926 book titled Britain’s Industrial Future. While formally issued by an economic commission of Britain’s Liberal Party, Keynes authored several sections outlining his view of the place of the large corporation in Britain’s present and future.

Keynes’ views of the large corporation strongly paralleled those of a school of thought known as “managerialism.” (The Modern Corporation and Private Property (1932), by U.S. economists Adolf Berle and Gardiner C. Means, is usually regarded as the founding statement of managerialism. Keynes, however, actually anticipated its main conclusions by several years.) Managerialists argued that most large corporations were controlled by paid managers (top executives and directors) rather than by individual owners or shareholders collectively. The ownership of shares in a typical large corporation, they argued, were dispersed among such a large number of shareholders that it was not typically possible for most of them to have much knowledge of or say in the corporation’s day-to-day decisions. Managerialists concluded that this gave managers a high—some argued, nearly total—discretion in how to run those companies, effectively disenfranchising the stockholders (their titular “owners”).

In Britain’s Industrial Future, Keynes argued, much as the U.S. managerialists would, that many corporations had “passed out of the effective control of their shareholders.” Keynes argued that “shareholders are so scattered and disorganized that it is seldom or never practicable” for them to control the composition of the management. As a result, in “large companies of diffused ownership,” he argues, directorships come to resemble “offices for life.” Keynes did not think that the insulation of management from control by the stockholders was necessarily a good thing. Directors, he argued, could be “useless” and “without special qualifications,” or command “high [pay] relative to the work done,” and still keep their positions. Stockholders’ lack of information about the inner workings of a company could also permit directors to “take great advantage over other shareholders through their knowledge of the exact position of their concern” (that is, to take advantage of insider information).

Like the U.S. managerialists, however, Keynes hoped and believed that the “separation between ownership and management” might liberate managers from the tyranny of the bottom line, and allow them to pursue other (hopefully, socially laudable) aims. In his essay “The End of Laissez-Faire” (1926), Keynes suggests that large corporations may, under some circumstances, act with the social welfare, rather than private gain, in mind. As management grew increasingly independent from ownership, Keynes argued, it tended to focus on the “general stability and reputation of the institution” instead of the maximization of shareholder profits. Corporations, in his view, were becoming more and more like quasi-public institutions “whose criterion of action within their own field is solely the public good as they understand it, and from whose deliberations motives of private advantage are excluded.” More concerned with their public image than the bottom line, large private corporations, such as railroads, utilities, universities, banks, insurance companies, Keynes argued, were “as time goes on, socializing themselves.”

Keynes, Technocracy, and Democracy

This argument reflects the strong technocratic streak in Keynes’ thought. Keynes thought that the world should be governed by an educated elite that, in his view, would stand above conflicting class interests and govern in the public interest. He did not believe that political, intellectual, or economic elites always acted in the best interests of society as a whole, but he did believe that the right elites could. Moreover, he certainly did not believe that ordinary people could run society well, or should run it at all.

In The General Theory, Keynes frames his argument against “State Socialism”—that is, against the comprehensive nationalization of the “instruments of production”—as a caution against the “homogeneous or totalitarian state.” Too much nationalization, he seems to suggest, and you’re in Stalinist Russia (or Nazi Germany or Fascist Italy). His argument against a socialism that would lift the working class to power is different. Keynes famously wrote, in a rant against Marxism in the essay “A Short View of Russia” (1925): “How can I adopt a creed which, preferring the mud to the fish, exalts the boorish proletariat above the bourgeois and the intelligentsia who, whatever their faults, are the quality in life and surely carry the seeds of all human advancement?” That is not an argument against totalitarianism, but against democracy.

Keynes’ certainly had no sympathy for the radically democratic ideas, advocated by some socialists in his day and ours, that the principles of self-government should not end at the door to the workplace, and that no real democracy can exist in the political sphere as long as the economic sphere is dominated by unelected captains of industry (whether owners or managers). Keynes undoubtedly would have cringed at the idea of allowing the “boorish proletariat” to decide how a factory should be run, much less an entire economy. If ordinary people were allowed to decide the fate of society, Keynes believed, their ignorance and lack of refinement would stand in the way of “human advancement.”

Keynes’ outlook was consistent with political democracy, in the sense of a multiparty system with competitive elections, but not with a very participatory version of it. He was even suspicious of labor-based political parties that—unlike the elite that he imagined standing above all class interests—he denounced as “class” parties. As biographer Robert Skidelsky notes, Keynes believed society could be ruled by an “interconnected elite of business managers, bankers, civil servants, economists and scientists, all trained at Oxford and Cambridge and imbued with a public service ethic.” In other words, he thought it should be ruled by people rather suspiciously like him.

Alejandro Reuss is an historian and economist, and a member of the Dollars & Sense collective.

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