As Leon Trotsky’s grandson, the economist Michael Hudson, explains, the neoliberal economy is organized to leech money from the pockets of workers. He refers to a phenomenon you rarely read about: debt deflation. That is when landlords and bankers and monopolies use rent, interest, and price gouging to suck money from the productive economy. Which is why Marx wanted to eliminate private property and classical economists wanted to tax away rents. As it is, banks get cheap money from the Fed to create more high-interest loans that inflate asset prices and encourage consumers to take on more debt. Homeowners have to borrow more to afford sky-high real estate. Compound interest on loans, user fees on transactions, price inflation that outpaces anemic wage growth, having one’s wages taxed more than capital gains, despite wages being a reflection of productive work and capital gains being ‘unearned’ income--all of this leeches disposable income from the pockets of workers and deposits it in the pocket of the rich capitalists. It’s a transfer payment from the poor to the wealthy.
And yet when the financial sector loses its high-risk derivative bets, Main Street pays the cost. When people say, “I’m in favor of the redistribution of wealth,” a good response might be, “We’ve already got that. Are you talking about changing the direction of the flow?” The Republicans and Democrats howl at the sight of downstream redistribution, but fall silent when the current turns upstream.
Protecting the Warmongers
Aside from a zealous commitment to bleeding the working class dry, there is one other storyline where our corrupt duopoly does agree: war. It’s the same for both parties. As political scientist Adolph Reed, Jr., said, the bipartisan policy is “token reformism at home and counterrevolutionary imperialism abroad.” War is, of course, wildly profitable to construction, oil, gas, defense, and agricultural corporations, not to mention bankers. This is why the Democrats, supposedly so repulsed by President Trump, supported his vast $738 billion military budget, cheered when he bombed Syria, supported his hamfisted coup attempts and medieval siege warfare in Venezuela, and backed an execrable coup in Bolivia. How eagerly they hailed the Caracas imposter Juan Gaido at the State of the Union address. Did they protest the assassination of Iranian general Qassem Soleimani as a war crime, or were they irate that they hadn’t been consulted? The duopoly knows who its true constituents are. The war profiteers generally. Shareholders Anonymous. Donors United. The men in suits in the cloud-draped spires in the City of London, DC, Paris, and New York, who see numbers and margins, not humans and horror. With enough distance between oneself and the scene of the crime, anything can be rationalized.
The imperial talking points were lustily reaffirmed in this week’s shambolic debate. Once the topic of foreign policy rolled around, toward the end of the show, the questions and answers were predictably rabid. Elizabeth Warren blathered on about the “sacred responsibility” of defending the Homeland and using diplomacy more but not abandoning our allies. In other words, revitalize NATO, the global arm of American imperialism. Scripted gibberish. Bloomberg reiterated George W. Bush’s ‘kill them there before they kill us here’ logic. He added that we are better prepared for war than we have been in a long time. He offered no evidence for this theory, nor did he mention the trillions that periodically vanish from Pentagon coffers. Buttigieg was alarming, raising the ‘credibility’ issue, insisting we need to restore the respect President Trump has squandered. The old ‘international standing’ line. This typically means destroying a defenseless nation in a chest-thumping show of might. Buttigieg also claimed that we need to listen to our intelligence agencies, this despite the fact that they are on record lying to the public since their infamous creation. Mayor Pete’s foreign policy might then be summed up: Credible and Credulous in 2020. Biden roared that there wasn’t a democratic bone in Xi Jinping’s body and called him a thug, but then added we needed to work with him. True diplomacy there. Steyer seemed to think what the world lacks is more American leadership, despite leading the world into war after war, and climate-destroying policies.
Then the debate devolved into cross-talking bedlam over whether one should acknowledge it when a “dictator” does something good. Sanders was hammered for acknowledging Chinese and Cuban successes, before railing that both countries were dictatorships. In any event, everyone including Sanders was beholden to some manner of American exceptionalism. Which is of particular interest because, if there is uncertainty about Sanders, it has to do with his foreign policy. He has repeated establishment talking points again and again about Russia, Cuba, China, Venezuela, among others. Author David Swanson recently attempted to determine just how much Bernie would cut the military budget by, and came up reasonably with a figure of $81 billion, a pittance compared the elephantine $1.25 trillion the war budget swallows every year.
Good Cop, Bad Coop
In any event, the clamorous recitation of imperialist talking points, be it in an op-ed read quietly at the breakfast table or under the sizzling lights of the debate stage before tens of millions, are aimed at re-establishing control of the national narrative. On economic issues and on foreign policy issues. Ideological indoctrination is crucial for the ruling class, and the wild frontier of the Internet has been undermining that narrative for years. The slow-footed, ham-fisted elites, sunk in their armchairs, adjusting their monocles, have finally lurched into action.
Billionaires will make do with either the Democrat or Republican narrative. For them, it’s all a good cop/bad cop confidence trick. The perp gets the max no matter who he confides in. As Chris Hedges acidly noted when asked if there was a difference between the Democrats and Republicans, “Of course there’s a difference: it is how you want corporate fascism delivered to you. Do you want it delivered by a Princeton-educated, Goldman Sachs criminal, or do you want it delivered by a racist, nativist, Christian fascist?...One tries to present it in a multicultural, inclusive way, the other is embraced by troglodytes.”
An interesting poll in France showed that in 1945 some 57 percent of French people recognized that Russia contributed the most to the defeat of the Germans, while just 20 percent felt the U.S. had contributed the most. By 2015, 54 percent of French people thought the U.S. had done the most to defeat the Nazis, while those crediting the Soviets with the biggest effort dropped to 23 percent. Point being, disinformation works.
But even when it doesn’t, the billionaires have options. Should the nonstop hectoring propaganda aimed at the public not succeed in stopping Sanders, there’s the Doomsday option: Mike Bloomberg. Bloomie has $61 billion dollars and is staring down a party with a For Sale sign millstoned around its neck. The Democratic Party is like a run-down, leaking sieve of a fixer upper that some underwater consumer is desperately trying to unload before he is foreclosed, evicted, and dispossessed. Bloomberg is the deep-pockets property vulture looking for his next distressed asset purchase. Tom Perez is the broker looking for his middling cut. It’s not a pretty picture. But here’s how it might play out at the closing. First, mix together a batch of thoroughly transparent voter suppression, some judicious delegate juggling, and a bit of dodgy math. Then bake in massive ad spends from Bloomberg and industry orgs, relentless disinformation from Buttigieg, and ferocious MSM disinformation. This will all conspire to hold Bernie beneath the 38 percent delegate count he needs to win outright. Which will create a “brokered convention,” another pseudo-sophisticate’s term for ‘not democracy,’ being thrown around by liberals over their Michelin-star meals. During this anti-democractic spectacle, the infamous superdelegates will step in and throw the nomination to Bloomberg with Buttigieg as his deputy, or some equally indigestible variation thereof. Then it’s off to the races against the Trumpire. Note that a Times article revealed that all but nine of 93 superdelegates would happily throw the nomination to someone else if Sanders sailed into the convention with a plurality of votes but not a clinching percentage of delegates. Super Tuesday looms, and will likely tell us all we need to know.
An Ideological Reset: The Costs of Capitalism
Given this state of affairs, it’s sometimes instructive to reiterate some of the standout statistics that capture the real state of the union, Trumpian piffle, personal vendettas, and Democrats ‘he’ll give Alaska to Putin’ gaslighting aside.
The true story goes something like this: the system we live within is wildly polarizing. Some 85 percent of stock ownership in America is held by 10 percent of the population. About 50 percent own no stocks. Trump’s crude brags about the rising stock market means nothing to them. Many Americans are continuing to pile up debt. Personal loan balances over $30,000 have risen 15 percent in the past five years, according to the Washington Post. Consumers are getting loans to pay interest on debt. Subprime credit cards in arrears have spiked sharply. Banks don’t much care because they’ve securitized or dumped many of the bad loans off on collection agencies. And what do a few defaults matter when the cost of originating credit is 1 percent and you are charging 30 percent interest? Big-ticket items like cars and college and homes have skyrocketed well beyond the inflation and wages in the last couple of decades. This is obviously unsustainable. Again, see Michael Hudson on debt deflation. It’s also partly why Millennials, at the age of 31, own just 4 percent of U.S. housing real estate. At the age of 35, Boomers owned 35 percent. As a nation, we have just crossed $14 trillion dollars in total U.S. household debt for the first time. We have long surpassed the trillion dollar debt threshold in credit cards, auto-loans, student loans, and mortgages. Plenty of the credit card debt is medical. Some 43 percent of Americans work for $15 an hour or less. And about 40 percent of Americans would go further into debt just to cover an unexpected $400 expense. Nearly eighty percent live paycheck to paycheck.
The United States is effectively a plutocracy, as reported by none less than Princeton University. 95 percent of the Obama recovery went to the one percent. Similar percentages for the benefits of the Trump tax cuts. The Pentagon has misplaced $6 trillion dollars of taxpayer monies, most likely squandered in illegal capitalist wars in Iraq and Afghanistan, as well as in Syria, Libya, Ukraine, and Venezuela. The three richest Americans own more than the bottom 50 percent. Globally, 2,000 billionaires have more than 4.6 billion humans.
But despite the sorry state of the average American, all is not lost for domestic profiteers. Capitalism is nothing if not protean in its ability to squeeze surplus out of otherwise empty husks. How do you monetize the poor and economically useless supply of citizens in the modern age? One is to incarcerate them, thereby supplying corporations with an artificially cheap labor pool, cheaper even than the poverty wages paid to the so-called “free” population, creating a profit center out of crime. In a nice Orwellian spin, Bloomberg had prisoners making fundraising calls for his campaign--jailbirds forced to solicit funds to keep the prison open. Next, you can take the disgruntled, depressed unemployed subsisting in the American rust belt and urban ghettos and get them legally addicted to opioids, creating a profit center out of an epidemic. In this manner, consumers who can provide little to nothing in the conventional consumer economy can be turned into revenue streams through their very desperation.
This is what neoliberal capitalism gets you. And for those who continue to believe that the Democrats will save us from this rot, Rob Urie provides some useful data worth reviewing. Hedges called this infantile savoirism, “a kind of willful blindness.” And always remember, even if your wages rise, money depreciation and the rise in prices means you take a wage cut. Even a higher paycheck can be misleading.
Sanders Stages An Intervention
At a certain level, what Sanders is trying to do is reintroduce working class consciousness to the political spectrum. There has been no class consciousness among workers in this country for a long time. Thanks principally to the information war we’ve been discussing. The working class has been so thoroughly atomized by neoliberalism. Its mantra of rugged individualism underlies the push for deregulation, downsizing, and privatization of government in favor of unregulated markets that are supposedly free for any individual to take advantage of. But this is the Big Lie. The “free market” ideology of economic individualism disarms the working class, rendering it defenseless against exploitation by, yes, ruling class collectivism.
The fact is, there is intense class consciousness among elites, which means they act together as a class in their own interests. Corporations are collectivist entities. Monopolies are the same. And their capture of the state is the use of the unified machinery of authority to their own minority ends. The old worker solidarities--unions, socialist organizations, and a progressively disposed Democratic Party as a consequence--have dissolved before our eyes.
In the sense of raising class consciousness among workers, Sanders campaign is a victory, no matter how it ends. But for socialist transformation, a much larger, more destabilizing rebellion, one that fouled the gears of the consumer economy, would likely be required to force the one percent into a compromise, let alone topple it. Just take one of many historical examples: Korea’s fight for independence from imperialism, first Japanese then American. Koreans learned rather quickly they could not petition their way to independence, couldn’t vote their way to democracy. Under the leadership of Kim Il Sung, they built not only a revolutionary movement but a revolutionary army. They finally seized on the faltering state of Asian imperialism after Americans had debilitated Japanese forces, and with Soviet and Chinese backing shouldered off the slave yoke. (Only to have counterrevolutionary American forces brutally occupy South Korea.)
As Kim said, “All the Japanese left behind were empty safes and account books.” Which is what will be left behind once the one percent have done with their plunder of America and finally decamp for more lucrative investment climates. A mass understanding we are actually under occupation by a pillaging stateless corporate autocracy could revolutionize class consciousness. The motive force of American consciousness seems to be consumption. Until it is solidarity, revolution is just a noun, a myth, a rumor, a hypothesis and a clue. And yet Sanders’ run may be remembered as the spark that lit a prairie fire. We’ll see. But if we’ve learned anything from 2016, it’s that we should trust neither the government nor their bush-league pundits.
Despite Kubrick’s ancient warning, our unimpeachable sources continue to mislead us. Our current state of the union is nothing like that presented by the pitiless pagliacci inhabiting the White House. It is quite different in actuality, but we are misguided by a number of flawed notions. The comfortable are afflicted by the idea that foreigners have overtaken our democracy--by our negligence. And the afflicted are afraid that foreigners are too comfortable--at our expense. But these are not viewpoints arrived at by an autonomous, discerning citizenry. They are rather examples of indoctrination, doctrines cleverly implanted in us by the Machiavelian machinery of power.
The Sins of Empire and Imperial Fictions. He lives in New York City and can be reached at jasonhirthler@gmail.com.
