Socialism for the Rich
As we enter the post Bush era of American politics, astute political observers beginning to be notice the oddest of political alliances. The far left and the libertarian right, Dennis Kucinich and Ron Paul, Counterpunch and Lew Rockwell, followers of Karl Marx and Frederick Von Hayek are beginning to come together over diverse issues like the uncritical support of the United States government for the state of Israel, the occupation of Iraq, the Patriot and Military Commissions Acts. But can they find common ground on the economy? David Cay Johnson, an investigative reporter for the New York Times and Pulitzer Prize winner, argues that yes they can.
While two recent best sellers, “The Shock Doctrine” by Naomi Klein and “The Conscience of a Liberal” by Paul Krugman have given us strong critiques of post Reagan/Thatcher neoliberalism and government repression, Johnson’s new book “Free Lunch” takes their argument a step further. While Klein and Krugman call for more government intervention in the economy on the side of the working class and poor, for a return to the New Deal and the Great Society, Johnson argues that there is already plenty of government involvement in the economy. The United States is in fact already a socialist country, but with a twist. It’s socialism by and for the benefit of the rich.
Let’s take one example, Wal-Mart. When Rush Limbaugh, Ann Coulter, and other fanatical neoconservatives call Hillary Clinton a “socialist” there’s a grain of truth in their attacks. Hillary Clinton’s time helping to bust labor unions for the Wal-Mart Corporation or John McCain’s early years representing the Savings and Loan industry in the Senate put the government to work for private industry. When the Wal-Mart Corporation opens a store anywhere in small town America, they always demand and usually receive massive government subsidies in the form of tax breaks and the restructuring of local zoning laws. As Johnson argues, this is nothing other than socialism for the rich.
“Sam Walton practiced corporate socialism. As much as he could, he put the public’s money to work for his benefit. Free land, long-term leases at below market rates, pocketing sales taxes, even getting workers trained at government expense were among the ways Wal-Mart took every dollar of welfare it could get. Walton had a particular fondness for government-sponsored industrial revenue bonds, which cost him less in interest charges than the corporate bonds the market economy uses to raise money”.
But how do they get away with it? It’s not hard to figure out why. The wealthy in the United States have an extensive and remarkably sophisticated propaganda machine, which is almost always paid for by the taxpayer. From publicly subsidized cable news networks like Fox to the almost seamless interpenetration between government representatives, lobbyists, and corporate America, the wealthy can redefine private interests as public interests and public interests as “special” interests. This is why there’s never enough money for public parks, schools, universities, libraries, hospitals, or for improvements to the infrastructure of our roads and bridges, but always enough money for new athletic stadiums or tax breaks for big box stores. Even government spending which is, on the surface, in the public interest, new weapons systems like the Crusader self-propelled howitzer the military doesn’t even want or Homeland Security pork that benefits nobody but 9/11 profiteers like Giuliani Partners, tends to benefit a few wealthy individuals at the expense of the tax payer.
We’ve all seen this in action. When the Seattle Mariners and Seahawks demanded enormous gifts from the state of Washington for two new stadiums to replace Seattle’s venerable Kingdome, both teams used the threat of leaving the city to twist the arms of the taxpayers. You wouldn’t want Seattle to lose its status as a “world class city”, would you? The fact that Los Angeles seems to do pretty well without a football team and San Francisco can still attract plenty of tourists without a hockey team was occasionally brought up in the media, but never, of course, by Paul Allen or the other big investors.
In its more extreme form, as Johnson convincingly demonstrates, this is nothing but an out and out scam, kleptocracy every bit as blatant as what goes on in post Communist Russia or a common banana republic. When Cabela’s, the Wal-Mart like chain of hunting and fishing supply stores, demanded the usual tax breaks and government subsides from the tiny, remote town of Hamburg, Pennsylvania to build a new superstore that they hyped as a engine for jobs creation, 32 million dollars, more than Hamburg spent to run the entire city government, even a casual observer could figure out that something was up. Were people really going to drive all the way from New York, Philadelphia, or Pittsburgh and spend the night at a motel in Hamburg to buy a fishing pole or a shotgun?
“To believe that Cabela’s would draw six million visitors each year meant believing that sporting goods store could be as big a draw as Universal Studios in Orlando, whose commercials ran regularly on television, and which was really two theme parks with enough rides and shows to keep a family occupied for several days. Why, it would mean more than twice as many people would come every year to Cabela’s as visited Hershey park, less than an hour down the highway from Hamburg, with its roller coasters, water rides, and faux boardwalk. Weaknecht did not believe.
But what struck Weaknecht even more than the fantastic visitor prediction was the tribute Cabela’s demanded. Cabela’s was not so much interested in free enterprise and competition as in using the promise of economic development to exact tribute.
‘They played it up that they were not certain where they would go, it could be Delaware or Pennsylvania or New Jersey,’ Weaknecht recalled. They said they could end up in Berks County or in Lebanon County, so they had all the local politicians competing for Cabela’s. The winner would be the community willing to pay the most in tribute to the sporting good chain.’”
For Paul Krugman, who makes a number of similar points in “Conscience of a Liberal” the solution to the problem is obvious. Go into the voting booth and pull the lever for anything with a “D” after his or her name then hope the Democratic party somehow magically transforms itself into a real social democratic party that puts the interests of the working class above the interests of people like Sam Walton, George Steinbrenner and Rudy Giuliani. OK, I’m not being fair to Paul Krugman, who aware of the shortcomings of the Democratic Party but continues to support it anyway. David Cay Johnson is nowhere near as good a writer as Krugman or Klein. Indeed, “Free Lunch” can often be frustrating to read. Like many newspapermen who write books, Johnson likes to pack all of his thinking into the first sentence of a paragraph and the first paragraph of a chapter, but often falls short of carrying through on the argument he begins.
But Johnson has a fundamental insight into politics that Krugman and Klein in spite of their clear thinking and literate style don’t. There is a structural problem that can’t be solved by voting George Bush and the Republicans out of office. Hillary Clinton, with her fake national health care program that will eventually wind up being nothing more than a new round of subsidies to the pharmaceutical industry and John McCain, with his 100 more years of war and war profiteering, are not the answer. The answer is to destroy socialism for the rich, and this will take an alliance of the left and right, of red and blue America, of socialists and libertarians. The distinction between liberal and conservative is a sham that the corporate socialists use to keep us from thinking about how the American economy really works.
The minority group in Washington is composed of Republicans and Democrats who agree on almost nothing except their Adam Smithian belief that business is at all times engaged in a conspiracy against the public that out not to be aided by government policies.
At one end is Representative Ron Paul, a libertarian Republican from Texas. He believes that income tax violates the Thirteenth Amendment prohibition against slavery because the government requires people to the work of filling out their tax returns. To Paul, that is a form of involuntary servitude, while filling out a form for, say, a driver’s license is not because you are not required to have a driver’s license (unless you want to drive).
At the other end is Senator Bernie Sanders of Vermont, the only socialist in Congress, though he caucuses with the Democrats. Sanders rails about a government that lavishes welfare on corporations, but not on children born into poverty.
While their views run the gamut from left to right, these politicians share a belief that government should be run mostly to maintain the people and their liberties and that corporate interests are too powerful, too doted upon.”
While supporters of both Bernie Sanders and Ron Paul might object to being put the same category as either socialists or libertarians, depending on which group you talk to, neither would be against real investigative journalism. And in the current climate of junk politics, buzz words like “change”, and with the concentration of the corporate media on a electoral horse race between almost identically empty suits competing for his or her party’s share of the taxpayers largesse for his or her “clients”, David Cay Johnson’s “Free Lunch” is a welcome example of what real journalism should aspire to. Highly recommended.
