The Undiagnosed “Cancer” that Has Killed Capitalism

by Doug Page / November 22nd, 2008

In the 1920s, Henry Ford perceived a fundamental flaw in capitalism and when he suddenly started paying his auto workers the then extremely generous sum of $5 per day. A unilateral raise of this magnitude was shocking at that time. Ford did this so that his employees would have enough money to buy his Fords. Ford had recognized a fundamental fatal defect of capitalism:

Capitalist Employers throughout the capitalist market can not pay their employees enough so that employees are able to purchase all of the products that capitalism can produce and still make a profit. Without profit there can be no capitalism.

Think about this. If we have an economic system, capitalism, where almost all humans are employees, who, if not employees, will purchase capitalism’s products? Hunters and gatherers? Self employed farmers? What group in society has cash to purchase what capitalism produces? Are there enough money lenders and capitalist employers with enough profit and earned interest to purchase all of the production? Experience now clearly demonstrates that there are not. These sources have far more money than they have needs so their wealth simply is held in multiple dwellings, jet airplanes and other luxuries, investments, loans, and cash. This is not a left-right problem, nor a conservative- liberal ideological problem. It is simply a fact. It is an inevitable, unavoidable result of the core dynamic of capitalism. That core dynamic is:

A person with money hires a person with little or no money for the lowest possible wage to earn as much profit as possible for the person who already has money.

It is this profit generating dynamic over decades of time and repeated by hundreds of employers that has created the immense disparity of wealth and power between the top 1% of our nation and the 95% of us at the bottom. This top 1% has as much wealth and income as the bottom 95% of us. The purchasing power of the bottom 95% of us would be vastly enhanced if the wealth of the top 1% was spread more equitably among us all. The fatal defect of capitalism would be bridged. We employees could then purchase all of the products that our labor produced. The fact of the almost unimaginable wealth of the top 1% is little known and is largely suppressed by the capitalist media. The capitalist media ridicules as “class warfare” any thoughts we may have about the injustice and pain we experience because of this disparity of wealth.

So we have many millions of persons on the planet who have legitimate needs, and these same persons are willing and anxious to work. Why cannot our work meet our needs? There are insufficient jobs because employers cannot hire all of us and still make a profit. Capitalism gives us only one way to meet our needs. We must go to work for somebody who can make a profit on our labor. This fundamental flaw of capitalism perceived by Henry Ford is now causing our capitalism to implode, to destroy itself. Henry Ford was unique among the planet’s employers in perceiving this flaw and acting to correct it within his own company.

So why do not all employers follow Ford’s example? One reason is that the competition by those employers who continued to pay the lowest possible wage would quickly drive the generous employer out of business. Another reason is the simple greed by capitalists to get as much profit as they can as quickly as they can. Employers as a group would have to act together cooperatively and all of them would have to pay enough wages so that employees could buy capitalism’s products. However even if all employers cooperated and paid high wages, capitalism would implode sooner or later because of the large sums drawn out by private employers in the form of profits, CEO compensation, and dividends, and the large sums drawn out by private money lenders for interest on the money loaned for the production process. It is interesting to note that the very successful Mondragon Co-ops of Basque Spain have sustained themselves and expanded over the last 40 years in part because the workers are the owners and they limit the pay of the top managers ordinarily to no more than 3 times the pay of the production workers. The Mondragon Co-ops also have their own Co-op bank to supply their credit.

Capitalism can thus produce far more than can be sold at a profit. Capitalists curtail production to avoid loss of profit. If there is no profit to be made, there can be no capitalism. There remain millions of people with legitimate needs who are anxious to work, but there is no work, because there is no profit to be made. For example, the world wide auto industry has the capacity to produce far more cars than can be sold at a profit. This defect of capitalism existed long before the current mortgage bubble and crisis. Auto plants around the world were operating at less than full capacity because there was not a demand by buyers for all of the cars that could be produced. We have some human needs, for example health care that simply cannot be adequately met by capitalists and still make a profit. If there is no profit to be made, capitalists will simply not provide health care.

This fundamental defect of capitalism that has caused it to implode is a truth that is totally suppressed in our capitalist culture. We do not learn of this truth in Econ 1 or even in Econ 101. We do not learn of this truth from our capitalist media.

Given this truth, and the culture wide failure to diagnose the problem we must look at the false solution that capitalists select for us.

Secretary Paulson, Fed Chairman Bernanke and our elected Democratic leaders identify the problem as a “credit crisis,” or a “liquidity crisis,” and they propose that we employees tax ourselves so as to pay billions of dollars to the bankrupt Wall Street investment banks in the hope that they will again extend credit to employers and liberal credit cards to consumers. They seek to supply the credit to enable capitalists to seek profit making opportunities. (The fact that the Wall Street investment banks have not chosen to use the gifts of our tax money for this purpose so far, while criminal, is irrelevant to the larger problem.) That larger but totally ignored problem is Henry Ford’s 1920s problem. That problem is that there is insufficient sustainable demand for all capitalists can produce at a profit. Human wants are insatiable, and if we humans had the money to buy, credit would flow like a quickly melting glacier. The proposed solution does nothing to provide jobs and wages, and nothing therefore to create demand for capitalism’s products. If we were not so scared, we consumer employees could borrow more money for a short time and thus be able to buy products, but this could not go on very long. Most of us are already maxed out on credit. Sooner or later we have to pay the borrowed money back.

Wall Street and our Democratic elected officials are vainly trying to rejuvenate a dead system. Lending or giving the dead system more money simply does not solve the fatal defect. The fatal defect is neither diagnosed nor dealt with. The truth is hidden behind a culture wide taboo so that it cannot be discussed in the main stream.

The solutions so far advanced seek only to create profit making opportunities for capitalists. These solutions ignore capitalism’s fatal defect. They do absolutely nothing to correct the fatal defect. Capitalism cannot solve the dilemma identified by John Steinbeck in his 1939 book, Grapes of Wrath: “there is work to do, and people to do it, but them two cannot get together, and there is food to eat and people to eat it, but them two cannot get together either.” Even Franklin Roosevelt failed to diagnose this fatal flaw of capitalism in his New Deal when he sought to save capitalism with its profit making opportunities while providing temporary “band-aid” type remedies for those who had no work.

We human being can work together to meet our needs, on a small scale by simply bartering. We can meet our sustainable needs on a larger community scale with Mondragon Co-ops, and on a nation wide scale by causing our government to act solely in our interest to be our lending bank at little or no interest, to supply co-ops, small businesses, partnerships, and self employment, and as our employer of last resort. We can no longer afford profit making employers and money lenders who siphon off the increase in value that our work creates. Because of this fatal defect, our capitalism can be thought of as a huge tornado which having sucked us dry, then dies itself. Or it can be thought of as a cancer that kills those of us who are its workers and consumers, and having killed its host, and then dies itself.

http://www.dissidentvoice.org/2008/11/the-undiagnosed-%e2%80%9ccancer%e2%80%9d-that-has-killed-capitalism/

"Brand Obama," "Brand Usa," And "The Audacity Of Marketing": Some Candid Reflections at Advertising Age

November 19, 2008 By Paul Street


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The election and nomination process is the brand re-launch of the year. Brand USA. It's just fantastic.

-- David Brain. CEO of the global public relations firm Edelman Europe, Middle East and Africa

The last eight years broke faith in Brand America, and people want that faith restored.

-- Carolyn Carter, London-based president and CEO of the global public relations firm Grey Group Europe, Middle East, and Africa

To my campaign manager David Plouffe, my chief strategist David Axelrod, and the best campaign team ever assembled in the history of politics - you made this happen, and I am forever grateful.

-- Barack Obama, Victory Speech, November 4, 2008

Twenty-three years ago the clever anti-television writer Neil Postman dissected the authoritarian nightmare that is modern political advertising in the United States. The television commercial, Postman noted, is the antithesis of rational popular consideration, which leading early philosophers of western economic and political life took to be the desirable and enlightened essences of "capitalism" and "democracy."

"Its principle theorists, even its most prosperous practitioners," Postman observed, "believed capitalism to be based on the idea that both buyer and seller are sufficiently mature, well-informed, and reasonable to engage in transactions of mutual self-interest...The theory states, in part, that competition in the marketplace requires that the buyer not only knows what is good for him but also what is good. If the seller produces nothing of value, as determined by a rational marketplace, then he loses out. It is the assumption of rationality among buyers that spurs competitors to become winners, and winners to keep on winning. Where it is assumed that a buyer is unable to make rational decisions," Postman elaborated, "laws are passed to invalidate transactions, as, for example, those which prohibit children from making contracts. In America, there even exists in law a requirement that sellers must tell the truth about their products, for if the buyer has no protection from false claims, rational decision-making is seriously impaired."

"The distance between rationality and advertising is now so wide," Postman argued, "that it is difficult to remember that there was once a connection between them. Today, on television commercials, propositions are as scarce as unattractive people."

The modern television commercial, Postman noted, makes "hash" out of the capitalist assumption of intelligent and informed consumer sovereignty. It undercuts the notion of rational claims, based on serious propositions and evidence. In the place of cogent language and logical discourse it substitutes evocative imagery and suggestive emotionalism.

When political success came to revolve largely around the same manipulative anti-enlightened methods prevalent in commodity advertising, Postman observed, the same sorry fate fell to "capitalist democracy's" assumption of rational and informed voters. Like the bamboozled commodity purchasers propagandized by radio and television ads, voters are subjects of persuasion through deception instead of through respectful and sensible communication. Candidate marketing makes hash out of the myth of voter sovereignty in "democratic" politics [1].

"A CASE STUDY IN AUDACIOUS MARKETING"

This is why you won't hear Barack Obama's progressive and educated supporters saying much about the interesting fact that Obama was recently selected by Association of National Advertisers (ANA) as the "Marketer of the Year." According to ANA trade journal Advertising Age two weeks before the presidential election, "Sen. Barack Obama has shown he's already won over the nation's brand builders."

Angus Macaulay, the vice president of Rodale Marketing Solutions, told Advertising Age that Obama's campaign was "something we can all learn from as marketers." AOL "Platform A" President Linda Clalirizio praised Obama for doing "a great job of going from a relative unknown to a household name to being a candidate for president." [2]

Six days after the election, Advertising Age heralded "Brand Obama" as a "case study in audacious marketing." The journal praised Obama's "messaging consistency" and "communications success," placing special emphasis on the Obama campaign's "boldness, that trait that happens to be the most important for anyone trying to build a brand now, in a chaotic time when many will be tempted to shelve innovation and creativity to take u defensive postures."

"And at same time Mr. Obama was building his brand with grand gestures," the journal added, "his campaign demonstrated an understanding of ground-level marketing strategies and tactics, everything from audience segmentation and database management to the creation and maintenance of online communities."[3]

"A MAN FOR ALL SEASONS"

"The result," Advertising Age exults, "was a brand that was big enough to be anything to anyone yet had an intimate-enough feel to inspire advocacy that raised funds at record-breaking, almost obscene levels..."

Quite right. Early in his campaign, Obama pretended to complain that he had become "a blank sheet on which people of vastly different political stripes project their own views." Reflecting on his apparent ability to win approval from people of wildly divergent perspectives, Obama claimed to worry that "everybody's projecting - particularly the way I came in - everybody's projecting their own views onto [me]."[4] The danger, he sensed, was that that some of his fans were going to become disappointed when they found out that he did not in fact represent an indefinite spectrum of viewpoints and interests and actually held positions many of them rejected. A related risk was that people would jump off "Senator Good Vibes'" ship of "Hope" once they realized that his real-world version of "change" and "unity" would mean some difficult decisions, choices, and sacrifices in accord with his underlying commitment to existing domestic and global disparities and institutions.

The irony behind Obama's reflection was that Obama and his media-savvy handlers deliberately and naturally pursued universal appeal in pursuit of victory under America's winner-take all electoral system, where corporate- and media-crafted candidate image tends to trump substantive policy positions and ideological identifications. As Rolling Stone political writer Matt Tabbai noted in a February 2007 article bearing the provocative title "Obama is the Best BS Artist Since Bill Clinton:"

"The Illinois Senator is the ultimate modern media creature...his entire political persona is an ingeniously crafted human cipher, a man without race, ideology, geographic allegiances, or, indeed, sharp edges of any kind. You can't run against him on the issues because you can't even find him on the ideological spectrum. Obama's ‘Man for all seasons' act is so perfect in its particulars that just about anyone can find a bit of himself somewhere in the candidate's background, whether in his genes or his upbringing...his strategy seems to be to appear as a sort of ideological Universalist, one who spends a great deal of rhetorical energy showing that he recognizes the validity of all points of view, and conversely emphasizes that when he does take hard positions on issues, he often does so reluctantly... His political ideal is basically a rehash of the Blair-Clinton ‘third way' deal, an amalgam of Kennedy, Reagan, Clinton and the New Deal; he is aiming for the middle of the middle of the middle." [5]

Acting in accord with the longstanding dance of America's Winner Take All politics, the media-savvy Obama Team cultivated his "blank sheet" appeal by tailoring Obama's message in flexible, chameleon-like accord with his own shifting audiences. Claiming to stand above "ideology" and partisan conflict, Obama bashed Wal-Mart and upheld the right to organize unions when talking to labor audiences but extolled free trade," "free markets," and entrepreneurial values when addressing "the business community." He invoked the legacy of the Civil Rights Movement when talking to black audiences but downplayed racial justice when speaking to white farmers and workers. He embraced capitalism's supposed virtues when talking to the rich and powerful but seemed stress its "drawbacks" when addressing the working class and poor. He told liberal and progressive primary voters that they could "joint the movement to end the war [on Iraq]" and shift U.S. policy towards peace and negotiation but made sure to tell The Council on Foreign Relations of his belief in the essential nobility of U.S. war aims and empire and of his desire to advance American global supremacy through gigantic military expenditures and a ready willingness to use force, unilaterally when "necessary," to "protect the American people and their vital interests." [6]

He suggested to progressive Iowa and New Hampshire voters that he was a populist outsider out to change the nation's corrupt, corporate-dominated culture but his campaign was staffed by and linked to Washington and corporate insiders. His current transition team is loaded with Washington political and policy veterans and his cabinet and administration more broadly will be packed with big players from the Bill Clinton regime. [7]

Hillary Clinton was a "polarizing insider" in Obama's campaign rhetoric. The President-Elect is courting her to be the next Secretary of State.

The campaign and candidate's conscious pursuit of "universalist" ideological hermaphroditism was strongly displayed in Obama's book The Audacity of Hope. Released in the fall of 2006, this bestselling marked the unofficial beginning of his presidential candidacy. In Steve Sailer's words, it "show[ed] his wordsmith's facility at eloquently restating the views of both his liberal supporters and his conservative opponents, leaving implicit the suggestion that all we require to resolve these wearying Washington disputes is to find a man who understands us - a reasonable man, a man very much like, say, Obama - and turn power over to him." [8]

At the same time, the Obama campaign clearly spent a considerable amount of time, money, and energy cultivating their candidate's pure celebrity. It relished and profited from his emergence as a "BaRockstar" - a mass-cultural as well as mass-political persona crafted around the vague and amorphous symbols of "Hope," "Change," and "Unity" to absorb the diverse and often confused aspirations and dreams of a mass constituency containing numerous and often contradictory values and positions.

"NOT BUSH": THE SELLING OF THE PRESIDENT

It worked, to say the least. As mainstream journalist Ryan Lizza recently noted in an interesting New Yorker reflection on "How Obama Won," Obama's media and campaign managers took the "tactical view" that "all that was wrong with the United States could be summarized in one word: Bush." Further:

"The clear alternative, then, was not so much a Democrat or a liberal as it was anyone who could credibly define himself as ‘not Bush.' [Obama's legendary media strategist David] Axelrod had a phrase he often used to describe this approach: America was looking for ‘the remedy, not the replica.' The appeal of this strategy was that, with only minor alterations, it could work in the primaries as well as in the general election, and that, in turn, allowed Obama to finesse the perpetual problem of Presidential politics: having one message to win over the a party's most ardent supporters and another when trying to capture independents and ‘up-for-grabs' voters - the voters who decide a general election." [9]

The key to success is deception and mushiness through mass marketing. Obama's media strategist David Axelrod and Obama's campaign manager David Plouffe performed masterfully well in blazing this path to victory.

The most genuinely accurate thing Obama said in his highly nationalist and propagandistic November 4th acceptance speech was that he owed his victory to Axelrod, Plouffe, and the rest of his top campaign staff. "You made this happen," Obama rightly told them, "and I am forever grateful." [9A]

Obama's handlers sold him as a "new" brand. They brilliantly advertised him as the "not Bush" just like Pepsi once expanded as the "not Coke" or like Burger King was once the up-and-coming "not McDonald's." They did it with the latest and best selling techniques.

"The 2008 Obama presidential run," noted Bruce Dixon in February of 2008,"may be the most slickly orchestrated marketing machine in history." [10] According to the campaign's financial report to the Federal Election Commission. Obama had by then spent $52 million on "media, strategy consultants, image-building, marketing research and telemarketing." As Pam Martens noted in early March of 2008:

"The money has gone to firms like GMMB, whose website says its "goal is to change minds and change hearts, win in the court of public opinion and win votes" using ‘the power of branding - with principles rooted in commercial marketing,' and Elevation Ltd., which targets the Hispanic population and has ‘a combined experience well over 50 years in developing and implementing advertising and marketing solutions for Fortune 500 companies, political candidates, government agencies.' Their client list includes the Department of Homeland Security. There's also the Birmingham, Alabama- based Parker Group which promises: ‘Valid research results are assured given our extensive experience with testing, scripting, skip logic, question rotation and quota control ... In-house list management and maintenance services encompass sophisticated geo-coding, mapping and scrubbing applications.' Is it any wonder America's brains are scrambled?" [11]

Besides contracting with sophisticated big client corporate marketing firms like GMMB and the Parker Group, the Obama operation grew its own considerable internal, sophisticated, and vertically integrated mass market research and sales capacities for identifying and seducing political consumers (voters) susceptible to "brand Obama." When ABC News anchorman Charles Gibson visited Obama's sprawling Chicago office seven days before the Ohio and Texas primaries, he observed the quiet hum of a corporate sales office. "The tone of the campaign headquarters," Gibson noted, was "strikingly serene." He observed "33,000 square feet of downtown Chicago office space and no one is sure exactly how many staff....The 20-somethings in the New Media department," Gibson said, "are responsible for everything from designing merchandise sold on the Web site to blogging to unloading videos and managing chat rooms." By Gibson's account, "the money flows through the computers, a steady infusion of cash in $10, $25, and $50 dollars. Obama's media maven Axlerod told Gibson, "It's strange that a computer terminal can make politics more intimate, but that's what happened." [12]

In Dixon's judgment, however, the Obama campaign's massive investment in selling their candidate was "not a good thing. Marketing," Dixon noted, "is not even distantly related to democracy or civil empowerment. Marketing is about creating emotional, even irrational bonds between your product and your target audience." [12A]

It's nothing new. Astute commentators since at least the Progressive Age (1890-1914) have noted that campaigns market U.S. candidates like they sell cars, candy, and toothpaste.

But as Lizza suggests, the problem has origins prior to the corporate and mass consumerist age. "By 1840," distinguished American historian Eric Foner has noted, "the mass democratic politics of the Age of Jackson had absorbed the logic of the marketplace. Selling candidates and their images was as important as the positions for which they stood."[13]

The two-party political system that emerged from the U.S. Republic's blueprint does not encourage the development of parties with clear ideological and policy differences or strong relationships between voter choices and citizens' actual positions on key policy issues. It leads rival candidates to blur their policy and ideological distinctions in the quest to win those all-important voters in the middle, focusing instead on personal qualities rather than hard policy and ideological differences. [14]

This harsh reality, combined with the almost complete absence of serious left political choices and furthered by the corporate and visual-imaginary takeover of much of the U.S. electoral process in the 20th century, goes a long way towards explaining why substantive policy issues tend to be badly downplayed in U.S. campaigns. It also explains much of the desperation and myopia that leads many ostensibly progressive voters and activists to back corporate-imperial candidates guaranteed to betray populist and peaceful promises "upon the assumption of power." [15]

CHE GUOBAMA: REBRANDING AMERICA WITH "A CLEAN SLATE"

Before he could be in a position to be sold (brilliantly) on the mass American electoral market, of course, Obama first needed to sell himself to the national political and business elite that controls much of the political action behind the scenes. That sales job did not involve deceptive one- or two-message commercials and slogans. It was about candid, up-close meetings in which the candidate made it clear that he posed no substantive challenge to dominant domestic and imperial structures and doctrines. That earlier marketing project, ably recounted by Ken Silverstein and David Mendell [16], took place in late 2003 and 2004 and made possible the first great rolling out of Brand Obama during the senator's instantly famous keynote address to the Democratic National Convention in late July of 2004.[17] It has continued behind the scenes ever since, with Obama continually reassuring his many big-money sponsors and corporate media enthusiasts that he is not some sort of starry-eyed idealist about to seriously question the interrelated hierarchies and ideologies of corporate-managed state capitalism, empire, and inequality.

The basic Obama message to the nation's ruling class - NOT advertised to the electorate - is that he is safe to concentrated power centers even if occasional populist-sounding slivers make their way into the construction of "Brand Obama." More than that, the campaign's message to the elite has included the promise that Obama will wrap reigning institutions and dogma in fake-progressive rebel's clothing and help repair the damage done to the United States' global public relations image by the vicious and clumsy post-9/11 excesses of the brazenly imperial Cheney-Bush gang.

Consistent with that hope, Advertising Age hails President-Elect Obama for producing "An Instant Overhaul for Tainted Brand America." The journal quotes David Brain, CEO of the global public relations firm Edelman Europe, Middle East and Africa, on how "the election and nomination process is the brand relaunch of the year. Brand USA. It's just fantastic." [18]

Nick Ragone has an interesting resume. He is both "a presidential historian" and the senior VP of client development at the leading global advertising firm Omnicom Group's Ketchum. "We've put a new face on [America] and that face happens to be African-American," Ragone told Advertising Age. "It takes a lot of the hubris and arrogance of the last eight years and starts to put it in the rearview mirror for us." [19]

Rigone might want to review Orwell's dystopian novel Nineteen Eighty Four on the deletion of unpleasant history - sent "down the memory hole" - by totalitarian communication authorities. "Rearview mirror" is code language for Orwellian revisionism.

Then there's the interesting commentary of Harvard Business School professor John Quelch. Quelch is a former "WWP Group" (a global advertising firm) board member and the co-author of a recent book with an oxymoronic title: "Greater Good: How Good Marketing Makes for Better Democracy."

According to Welch, echoing Orwell, "The election result zero-bases the image of the United States worldwide. We have a clean slate with which to work," Welch told Advertising Age. "Let us hope the opportunity is not squandered the way it was after 9/11." [20]

According to Carolyn Carter, the London-based president and CEO and Grey Group Europe, Middle East and Africa (creator of the popular teeth-rotting "Coke Zero" ad campaign for Northern Europe), "The last eight years broke faith in Brand America, and people want that faith restored." [21]

Enter the openly imperial Obama, who is "almost like Che Guevera, in a good way," according to Foreign Policy magazine's web editor Blake Hounshell. "He has icon status," Hounshell explains, "with the all the art around the world of his face." The difference, of course, is that Che boldly inspired radical challenges to the American Empire but Obama inspires captivation with the corporate-imperial U.S. and its supposed self-reinvention as a land of progressive democracy and endless possibility. According to Scott Kronick, global marketing firm "Ogilvy PR's" Beijing-based president, Obama's triumph "send a strong message to the world that despite what many people believe and feel...America can be very open, democratic, and progressive."[22]

"EXPECTATION CALIBRATION AND EXPECTATION MANAGEMENT"

It's not all good for the masters of American Empire and Inequality, however. The Obama-based "rebranding of America" in the wake of the long proto-fascistic, arch-plutocratic, and messianic-militarist Cheney-Bush nightmare comes with heightened popular product expectations at home and abroad. The risks and likelihood of disappointment and betrayal are high. Many American and other world citizens can be counted on to take "Brand Obama" and the refurbished "Brand USA" and give them meanings that do not accord very well with the U.S. power elite's agenda. Rising and betrayed expectations are the stuff of actual social revolutions (something rather different than marketing revolutions), as the left historian Barrington Moore once argued. For these and other reasons, Obama will be relying heavily on his marketing and public relations experts to keep the bewildered citizenry's hopes and dreams properly constrained and downsized. Popular thought coordination through mass marketing will be important to the governance period as well as the election phase of the Obama ascendancy. As Obama's early and excessively candid foreign policy advisor and Harvard ally Samantha Power told the power-worshipping public affairs talk-show host Charlie Rose last February, "Expectation calibration and expectation management is essential at home and internationally."[23].

Chilling words but they signify nothing new in the long history of the dark science of "Taking the Risk out of [American] Democracy". [24]

Paul Street is a writer and activist in Iowa City. He is the author of

Empire and Inequality: America and the World Since 9/11 (Boulder, CO: Paradigm, 2004); Segregated Schools: Educational Apartheid in the Post-Civil Rights Era (New York: Routledge, 2005); Racial Oppression in the Global Metropolis (New York, 2007), and most recently Barack Obama and the Future of American Politics (Boulder, CO: Paradigm, September 2008), which can be ordered at http://www.paradigmpublishers.com/Books/BookDetail.aspx?productID=186987.

Paul can be reached at paulstreet99@yahoo.com.

NOTES

1. Neil Postman, Amusing Ourselves to Death: Public Discourse in the Age of Show Business (New York: Penguin, 1985), 126-132.

2. "Obama Wins...Ad Age's Marketer of the Year," Advertising Age (October 17, 2008), read at http://adage.com/print?article_id=131810

3. "Barack Obama and the Audacity of Marketing," Advertising Age (November 10, 2008), read at http://adage.com/print?article_id=132351

4. As quoted in David Mendell, Obama: From Promise to Power (New York: HarperCollins, 2007), 12, 310.

5. Matt Tabai, "Obama is the Best BS Artist Since Bill Clinton," RollingStone.com. posted on AlterNet (February 14, 2007), read online at http://www.alternet.org/story/48051.

6. For many details and sources, see Paul Street, Barack Obama and the Future of American Politics (Boulderm CO: Paradigm, 2008), 1-163.

7. For a useful summary of Obama administration insiders, see Stephen Lendman, "Obama Mania," ZNet (November 17, 2008).

8. Steve Sailer,"Obama's Identity Crisis," The American Conservative (March 26, 2007).

9. Ryan Lizza, "Battle Plans: How Obama Won," The New Yorker (November 15, 2008).

9A. Barack Obama, "Remarks on Election Night," read at www.barackobama.com/2008/11/04/remarks_of_presidentelect_bara.php. For reflections on Obama's speech as a form of system-legitimizing propaganda, see Paul Street, "Barack Obama: Empire's New Clothes," Black Agenda Report (November 12, 2008), read at http://www.blackagendareport.com/index.php?option=com_content&task=view&id=879&Itemid=1

10. Bruce Dixon, "Holding Barack Obama Accountable," Dissident Voice (February 15, 2008), read at www.dissidentvoice.org/2008/02/holding-barack-obama-accountable/

11. Pam Martens, "The Obama Bubble: Why Wall Street Needs a Presidential Brand," Black Agenda Report, March 5, 2008.

12. ABC News, "Backstage at Barack Obama's Headquarters," February 28, 2008.

12A Dixon, "Holding Barack Obama Accountable." I would argue (somewhat differently from Dixon) that the mass-marketing of candidates is in fact intimately related to democracy in that it is a natural effort on the part of concentrated power to pervert and subvert it.

13. Eric Foner, Give Me Liberty! An American History, volume 1 (New York: WW Norton, 2005), 377.

14. G. William Domhoff, Who Rules America? Power, Politics, and Social Change (New York: McGraw Hill, 2006), 139.

15. Edward S. Herman, "Democratic Betrayal," Z Magazine (January 2007).

16. Ken Silverstein, "Barack Obama, Inc.: The Birth of a Washington Machine," Harper's (November 2006); Mendell, Obama, 248-49.

17. A very conservative speech by the way. See Paul Street "Keynote Reflections," (Featured Article), ZNet Magazine (July 29th, 2004), available online at http://www.zmag.org/content/showarticle.cfm?SectionID=41&ItemID=5951.

18. "An Instant Overhaul for Tainted Brand America," Advertising Age (November 10, 2008), read at http://adage.com/print?article_id=132352

19. Quoted approvingly in "An Instant Overhaul."

20. Quoted approvingly in "An Instant Overhaul."

21. Quoted approvingly in "An Instant Overhaul."

22. Quoted approvingly in "An Instant Overhaul."

23. The Charlie Rose Show, PBS, February 21, 2008. See www.charlierose.com/shows/2008/02/21/2/a-conversation-with-samantha-power

(accessed March 1, 2008). For some dark reflections on Charlie and Samantha's chat, see Paul Street, "‘Calibrating' HOPE in the Effort to ‘Patrol the Commons': Samantha Power and the Hidden Imperial Reality of Barack Obama," ZNet (February 26, 2008), read at www.zcommunications.org/znet/viewArticle/16640. Thanks to David Peterson for alerting me to the Power comment.

24. To steal the title of Alex Carey's important book: Taking the Risk Out of Democracy: Corporate Propaganda versus Freedom and Liberty (Urbana, IL" University of Illinois Press, 1997). "The twentieth century," Carey noted, "has been characterized by three developments of great importance: the growth of democracy, the growth of corporate power, and the growth of corporate propaganda as a means of protecting corporate power against democracy."

WALTER BENN MICHAELS

AGAINST DIVERSITY

The importance of race and gender in the current us presidential campaign has, of course, been a function of the salience of racism and sexism—which is to say, discrimination—in American society; a fact that was emphasized by post-primary stories like the New York Times’s ‘Age Becomes the New Race and Gender’.1 It is no doubt difficult to see ageism as a precise equivalent—after all, part of what is wrong with racism and sexism is that they supposedly perpetuate false stereotypes whereas, as someone who has just turned 60, I can attest that a certain number of the stereotypes that constitute ageism are true. But the very implausibility of the idea that the main problem with being old is the prejudice against your infirmities, rather than the infirmities themselves, suggests just how powerful discrimination has become as the model of injustice in America; and so how central overcoming it is to our model of justice.

From this standpoint, the contest between Obama and Clinton was a triumph, displaying, as it did, both the great strides made toward the goal of overcoming racism and sexism, and the great distance still to go towards that goal. It made it possible, in other words, to conceive of America as a society headed in the right direction but with a long road to travel. The attraction of this vision—not only to Americans but around the world—is obvious. The problem is that it is false. The us today is certainly a less discriminatory society than it was before the Civil Rights movement and the rise of feminism; but it is not a more just, open and equal society. On the contrary: it is no more just, it is less open and it is much less equal.

In 1947—seven years before the Supreme Court decision in Brown v. Board of Education, sixteen years before the publication of Betty Friedan’s The Feminine Mystique—the top fifth of American wage-earners made 43 per cent of the money earned in the us. Today that same quintile gets 50.5 per cent. In 1947, the bottom fifth of wage-earners got 5 per cent of total income; today it gets 3.4 per cent. After half a century of anti-racism and feminism, the us today is a less equal society than was the racist, sexist society of Jim Crow. Furthermore, virtually all the growth in inequality has taken place since the passage of the Civil Rights Act of 1965—which means not only that the successes of the struggle against discrimination have failed to alleviate inequality, but that they have been compatible with a radical expansion of it. Indeed, they have helped to enable the increasing gulf between rich and poor.

Why? Because it is exploitation, not discrimination, that is the primary producer of inequality today. It is neoliberalism, not racism or sexism (or homophobia or ageism) that creates the inequalities that matter most in American society; racism and sexism are just sorting devices. In fact, one of the great discoveries of neoliberalism is that they are not very efficient sorting devices, economically speaking. If, for example, you are looking to promote someone as Head of Sales in your company and you are choosing between a straight white male and a black lesbian, and the latter is in fact a better salesperson than the former, racism, sexism and homophobia may tell you to choose the straight white male but capitalism tells you to go with the black lesbian. Which is to say that, even though some capitalists may be racist, sexist and homophobic, capitalism itself is not.

This is also why the real (albeit very partial) victories over racism and sexism represented by the Clinton and Obama campaigns are not victories over neoliberalism but victories for neoliberalism: victories for a commitment to justice that has no argument with inequality as long as its beneficiaries are as racially and sexually diverse as its victims. That is the meaning of phrases like the ‘glass ceiling’ and of every statistic showing how women make less than men or African-Americans less than whites. It is not that the statistics are false; it is that making these markers the privileged object of grievance entails thinking that, if only more women could crash through the glass ceiling and earn the kind of money rich men make, or if only blacks were as well paid as whites, America would be closer to a just society.

It is the increasing gap between rich and poor that constitutes the inequality, and rearranging the race and gender of those who succeed leaves that gap untouched. In actually existing neoliberalism, blacks and women are still disproportionately represented both in the bottom quintile—too many—and in the top quintile—too few—of American incomes. In the neoliberal utopia that the Obama campaign embodies, blacks would be 13.2 per cent of the (numerous) poor and 13.2 per cent of the (far fewer) rich; women would be 50.3 per cent of both. For neoliberals, what makes this a utopia is that discrimination would play no role in administering the inequality; what makes the utopia neoliberal is that the inequality would remain intact.

Worse: it is not just that the inequality remains intact but also—since it is no longer produced by discrimination—that it gets legitimated. Apparently American liberals feel a lot better about a world in which the top 20 per cent are getting richer at the expense of everyone else, as long as that top 20 per cent includes a proportionate number of women and African-Americans. In this respect, the ability of the Obama campaign to make us feel pretty good about ourselves while at the same time leaving our wealth untouched, is striking—as emblematized in his tax proposals which are designed to ask more of the ‘well-off’, but not of ‘the middle class’. Who are the well-off? ‘I generally define well-off’, says Obama’s website, ‘as people who are making $250,000 a year or more’. Which means that people making, say, $225,000 (who are in the 97th percentile of American incomes) are middle class; and that they deserve to be taxed in the same way as those in the 50th percentile, making $49,000. The headline of the website on which this appears is ‘I’m Asking You to Believe’. But asking the 40 per cent of Americans who live on under $42,000 to believe that they belong to the same middle class as the approximately 15 per cent who make $100,000–$250,000 may be asking too much. It is, however, what the Democratic Party has been asking them to believe for the last twenty years. Economic inequality did not grow as fast under the Clinton Administrations as it did under both the Bushes, but it grew. In 1992, when Clinton was elected, the bottom quintile made 3.8 per cent, the top quintile 46.9 per cent of all money earned; in 2000, at the end of his second term, the bottom quintile made 3.6 per cent, the top quintile 49.8 per cent.

The point, then, is that the nomination of Obama is great news for American liberals, who love equality when it comes to race and gender, but are not so keen when it comes to money. Liberals are the people who believe that American universities and colleges have become more open because, although they are increasingly and almost exclusively populated by rich kids, more of these today are rich kids of colour. (Obama’s popularity on college campuses is no accident—he is diversity’s pin-up.) And having helped keep the poor out of college and thus made sure they remain poor, liberals are now eager to point out that white voters with only a high-school education (the very people who do not go to Harvard) are disproportionately sceptical of Obama; they are happy to deplore the ignorant racism of people whom they have kept ignorant, and whose racism they have thus enforced. The Obama candidacy is great news, in other words, for a liberalism that is every bit as elitist as its conservative critics say—although not, of course, quite as elitist as the conservative critics themselves.

There is a real difference between Obama and McCain. But it is the difference between a neoliberalism of the centre and a neoliberalism of the right. Whoever wins, American inequality will be left essentially untouched. It is important to remember just how great that inequality is. A standard measure of economic inequality is through the Gini coefficient, where 0 represents perfect equality (everybody makes the same), and 1 perfect inequality (one person makes everything). The Gini coefficient for the us in 2006 was 0.470 (back in 1968 it was 0.386). That of Germany today is 0.283, that of France, 0.327. Americans still love to talk about the American Dream—as, in fact, do Europeans. But the Dream has never been less of a reality than it is today. Not just because inequality is so high, but also because social mobility is so low; indeed, lower than in both France and Germany. Anyone born poor in Chicago has a better chance of achieving the American Dream by learning German and moving to Berlin than by staying at home.

Whether debates about race and gender in American politics involve self-congratulation, for all the progress the us has made, or self-flagellation over the journey still to go, or for that matter arguing over whether racism or sexism is worse, the main point is that the debate itself is essentially empty. Of course discrimination is wrong: no one in mainstream American politics today will defend it, and no neoliberal who understands the entailments of neoliberalism will do so either. But it is not discrimination that has produced the almost unprecedented levels of inequality Americans face today; it is capitalism.

Put that way, however, it is clear that the characterization of the race–gender debate as ‘empty’ needs to be qualified. For the answer to the question, ‘Why do American liberals carry on about racism and sexism when they should be carrying on about capitalism?’, is pretty obvious: they carry on about racism and sexism in order to avoid doing so about capitalism. Either because they genuinely do think that inequality is fine as long as it is not a function of discrimination (in which case, they are neoliberals of the right). Or because they think that fighting against racial and sexual inequality is at least a step in the direction of real equality (in which case, they are neoliberals of the left). Given these options, perhaps the neoliberals of the right are in a stronger position—the economic history of the last thirty years suggests that diversified elites do even better than undiversified ones. But of course, these are not the only possible choices.

Vote independent or boycott the elections

Vote independent or boycott the elections By Reza Fiyouzat Online Journal Contributing Writer

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How long shall we allow the system to kick us in the head, take our money, insult us after taking our money, and still expect us to participate in its frauds? With every passing year, the differences between the two ruling political parties in the U.S. diminish further, and their outlook, conduct and even advertising campaigns merge so much so that their members can be mistaken one for the other.

By now it must be clear that the ‘two-party’ system is not only no such thing, it is corrupt to the bone.

It should be instructive to recount some major points of Obama’s record, but since much of that has been done by far more qualified people, it should suffice to point to what’s presented by Matt Gonzalez, in his piece, What Do They Have to Do to Lose Your Vote?, in which we find all that is needed to persuade any whose illusions regarding Obama are still unshaken. If, after reading that, you still vote for Obama, then you deserve everything Obama throws at you once in office, and it is you who have no right to complain.

Despite all that is recounted by Matt Gonzalez, and is known by the left, a good section of the American left is still agonizing over whether or not to vote for this ‘lesser’ evil! Some qualify this support with: “But, don’t have any illusions!” Anybody who supports, even qualified twenty-fold, the notion of voting for a Democratic Party candidate, is already filled with illusions. Such recommendations coming from the ‘left’ are stunningly amusing if it weren’t so infuriating to hear such talk always certified with tons of qualifications, which in turn make the recommendations not just absurd, but highly irresponsible.

Most progressives voting for Obama do so out of their partial blindness regarding the crimes of the American state; they see all the crimes commissioned and executed by the Republicans, but if a Democrat vote-getting team ransacked their very neighborhoods, doing drive-bys at high noon, with ‘Vote Democrat’ signs on their SUVs, they would most likely not see it. If a Democratic candidate is not too pretty, their answer is simple: it is a vote against Republicans. When pushed for something more positive, more substantial, lacking anything to offer, they argue that Obama-Biden ticket is less scary than McCain-Palin, and so we must make sure they get elected.

The other point they make is that a vote for Obama is a slap in the face of racism. To think that one is fighting racism while voting for a candidate that upholds every racist element of the structures of imperialism is to venture into political oblivion.

Such arguments can only come from people who do nothing whatsoever to change the really existing political life of the U.S. in between presidential elections. But, of course, every four years they must express some political recommendation of sorts, and out of desperate frustration, due to seeing the political field as only what the system presents (i.e., due to the fact that they do not act as subjective agencies), they can only decide which system-provided choice is less harmful. This is the gist of their dilemma.

So long as the left in the U.S. does not create its own independent institutions, so long as there is no institutional alternative that can channel people’s grievances, and so long as there is no political party representing the working classes along a socialist outlook, the current balance of forces will continue to work increasingly against the working people and those interested in a more just society, and no matter how learned we might be, we will end up supporting the ‘lesser’ of the two evil parties dominating the people; in other words, supporting the imperial system.

What to do then? For starters, a good half of the eligible voters have been conducting a de facto boycott of the presidential elections, since they instinctively and correctly realize that the two ruling parties do not represent them. So, why not join them?

The only thing that can transform ‘apathy’ into an actual political force is to organize the non-voters, and we can only do so by addressing their (which is ours, too) concerns. A boycott of the elections should be done with the purpose of announcing to the non-voting public that another way is possible, and must be sought and created to bring about political change. This other way must engage them, the non-voting population, with a strategic vision, while making a serious effort to build a real party of opposition.

This, in turn, requires a genuine opposition party-building effort. The Populists in the 19th century did not agonize over whether or not to vote for the lesser evils of their days. They built their own party. Granted, by the end of the 19th century, the Democrats had pretty much swallowed them whole by adopting key elements of their platform reflecting their social demands, while watering them down, and blunting their force. But, the organizing spirit of the Populists is something to learn from. The lesson: Build your own party! Oppose both ruling parties consistently.

Within the context of building a real opposition party, then, a boycott as a tactical move makes political sense. It would bring coherence and political direction to the energies not wasted in the electoral fraud (yet sitting still); it potentially gives a voice to the energies not burned in the electoral game presented by the system as an opiate (to paraphrase Max Kantar). But, simply not voting by itself (i.e., without an announced boycott) is also useless.

In lieu of a disclaimer, I must say that I respect anybody who votes for Nader or McKinney (Amee Chew makes a great case for supporting McKinney in her October 29 Counterpunch piece), as a way of registering their opposition to the ‘two party’ monopoly. I have argued in previous articles that, IF you think by voting you can bring change, then know that the only change worth voting for is the kind presented in the platforms of the independent candidates. Also, voting for independent candidates as a way of registering your support for people who are actually addressing our problems is a way of getting a real tally of how many people actually oppose the establishment candidates and support real change.

My argument for a boycott addresses a different sub-set of the population affected by this system, whether we vote or not. The point here is that regardless of the outcome of these elections, which is the continuation of the empire and its deep-rooted corruptions, we need to look past the elections and think how to build a long-term strategy for a real movement for fundamental change. This must include addressing those who do not vote.

People who do not vote are not participating for very good reasons. However, in the absence of a loud boycott, their non-participation gets interpreted as ‘conceding’ or ‘apathy.’ My point here is that, NO, this is not apathy. In fact it makes perfect logical sense, and it is far more honest than participating in fraudulent elections that only reproduce illusions about America, the ‘world’s greatest democracy’; illusions that only buttress the imperial system.

I come from the so-called Third World, in which boycotting elections is a political tool the masses, and the parties that stand with them, employ with good effect. Imran Khan’s party (Insaf) in Pakistan, for example, boycotted the last elections there, and it was an organized message sent to the establishment that the rulers would not get a stamp of approval from the real opposition. This, far from recreating ‘apathy’ or ‘conceding’ the elections, actually makes governments nervous. In Iran, for another example, you are required to take your birth certificate with you when you vote, so the authorities can stamp it, so they can see who has not participated, so they can do unto you what they will, should you have to deal with the authorities at some point.

So, boycott is actually a very powerful political tool, because it gives political voice to those who refuse to participate. Simply sitting at home and not announcing that you are boycotting is a different matter. Boycott is a political move, with a long-term vision in mind.

The American people are fed a huge lie every four years that their voices can make a difference. Really? It didn’t make a jot of difference in 2006, when people, out of pure illusion, voted into the Congress a majority of Democrats with the hope that they would bring the war of occupation in Iraq to a speedy end. As George Carlin would have said, people might as well have wished on a rabbit’s foot!

It didn’t make any difference when a huge majority of the American people kept yelling down the jammed congressional telephone lines, and over-stuffed Congressional email inboxes with, “Don’t give my money away to those scum sucking swine!” The people’s ‘representatives’ stole people’s money anyway and handed it over to the banksters in broad daylight!

So, to repeat, what’s the point of voting for establishment people? Except becoming demoralized, such behavior has no other effect.

If influential people on the left, or even political parties on the left, such as the Communist Party, had spent the last 30 years of their collective lives, using their influence and authority, building truly oppositional parties, maybe for the past two presidential elections they wouldn’t have to recommend voting for such a corrupt bunch of people, and instead could recommend voting for a truly oppositional party that really channeled people’s grievances, with some (even if symbolic) presence in the legislature.

So, instead of wringing our hands over whether or not to vote for an evil, which is only a tiny bit less so, let us recognize the necessity of building a truly oppositional party. The first step in that direction is to either vote for independent candidates or conduct a boycott of these elections with the declaration that voting is bunk until real political alternatives representing people’s needs are built. Don’t waste your vote, and don’t encourage the establishment bastards.

http://onlinejournal.com/artman/publish/article_3943.shtml

Effectiveness of AIG's $143 Billion Rescue Questioned

By Carol D. Leonnig

Washington Post Staff Writer
Monday, November 3, 2008; Page A18

A number of financial experts now fear that the federal government's $143 billion attempt to rescue troubled insurance giant American International Group may not work, and some argue that company shareholders and taxpayers would have been better served by a bankruptcy filing.

The Treasury Department leapt to keep AIG from going bankrupt on Sept. 16, and in the past seven weeks, AIG has drawn down $90 billion in federal bailout loans. But some key AIG players argue that bankruptcy would have offered more structure and greater protections during a time of intense market volatility.

AIG declined to comment on the matter.

Echoing some other experts, Ann Rutledge, a credit derivatives expert and founding principal of R&R Consulting, said she is not sure how badly the financial system would have been rocked if the government had let AIG file for bankruptcy protection. But she fears that the government is papering over the problem with a quick fix that was not well planned.

"What we see now are a lot of games by the government to keep these institutions going with a lot of cash," she said. "This is to fill holes in companies' balance sheets, and they're trying to hold at bay the charges that our financial system is insolvent."

The deal that the Treasury and the Federal Reserve Bank of New York pressed upon AIG was intended to stop any domino effect of financial institutions falling because of their business ties to AIG. The rescue allowed AIG to provide cash to huge banks and other players who had invested in rapidly souring mortgages insured by the company.

Early this year, investors had begun privately demanding that AIG pay off its billion-dollar guarantees. But in mid-September, when the demands for cash reached a public crescendo, AIG had to admit that it didn't have enough cash on hand to meet the obligations.

In the first weeks of its federal rescue, AIG has used the loan money to post collateral demanded by these firms, sources close to those deals say.

"No one else benefits," former AIG chief executive and major shareholder Maurice R. "Hank" Greenberg wrote to AIG's current chief executive on Thursday. "Unless there is immediate change to the structure of the Federal loan, the American taxpayer will likely suffer a significant financial loss."

Another concern is that in this depressed market, AIG, and the taxpayers that now own 80 percent of the company, will lose coming and going.

The company may be forced to borrow additional federal funds for rising payouts to counterparties. Neither the government nor AIG is releasing information about the specific amounts paid to individual firms, but numerous credit experts say that the value of those mortgage assets is probably declining every week. That means AIG has to pay a higher price as part of its guarantees.

The company also may be forced to sell many more assets at low, fire-sale prices. As part of its loan deal, AIG was to sell some assets -- valued at $1 trillion before the crisis -- to raise cash to pay off the loan.

AIG's Financial Products division is the primary villain in the company's free-fall. It made tens of billions of disastrously bad bets on mortgage investments but may not have carefully hedged those bets or properly estimated its risk. The company's rapid burn of $90 billion also suggests that it grossly undervalued its obligations to counterparties in a worst-case scenario.

In February, internal notes show, board members discussed a growing dispute between AIG Financial Products and Goldman Sachs about the value of those assets when Goldman called for AIG to post collateral. AIG's chief financial officer warned of "Goldman's acknowledged desire to obtain as much cash as possible." But AIG's external accountants warned that it was they who alerted management to the dispute, not AIG Financial Products, and that the division was not properly considering the market in its pricing.

Rutledge warns that because there has been no public disclosure of AIG's payments to counterparties, it is impossible to know whether the pricing it is using now is proper.

The Federal Reserve and its advisers have acknowledged privately that things are not going according to plan.

As AIG has rapidly eaten through the loan money, the Fed has twice expanded its original $85 billion bailout -- which itself was the largest government bailout of a private company in U.S. history. Earlier last month, the Fed reluctantly gave AIG $38 billion more in credit for securities lending to try to keep the firm from drawing down its first Fed loan too quickly.

Then on Thursday, the Fed agreed to let AIG borrow $20 billion from a larger commercial paper bailout fund it had set up days earlier for all institutions that lend money to each other.

If the company had filed for Chapter 11 bankruptcy protection, AIG could have frozen the crippling collateral calls, and shareholders would have had a chance at recovering some value from the company's 80 percent drop in stock price from earlier this year, said Lee Wolosky, a lawyer for AIG's largest shareholder, Starr International.

"AIG is nothing more than a pass-through being charged 14 percent interest," Wolosky said. "Company assets are eroding on a daily basis; asset sales have not begun and can only be at fire-sale prices in the current market. "

But David Schiff of Schiff's Insurance Observer said he could not see how bankruptcy would have been a better solution.

"The point isn't to save AIG; it's to save the U.S. financial system. I think they were afraid to find out who else goes under if you let AIG fail," he said. "But right now, no one knows if this is going to work."

http://www.washingtonpost.com/wp-dyn/content/article/2008/11/02/AR2008110202150.html?sub=new

The Bailout And The Innocent Bystander Fable

By David Sirota

In my book, The Uprising, and in a series of blog posts and YouTube videos, I explored the Innocent Bystander Fable—the myth forwarded by congressional Democrats claiming that, despite being in the majority, they have absolutely no power to stop anything the federal government is doing. This fable was the reason most cited for congressional Democratic inaction on the Iraq War. Democrats told us they had no power to stop or even slow down the war, even though they had the legislative and filibuster power to stop funding the war.

Now, the Innocent Bystander Fable is making its debut on the issue of the Wall Street bailout. The Bush administration is handing over taxpayer cash to banks, and banks are subsequently refusing to lend more money - instead either using the money to pay out executive bonuses or to buy up smaller banks. That's utterly outrageous, yet in this Wall Street Journal story, we see Democrats already claiming they can do nothing about it:

House and Senate leadership aides say it would be difficult to pass any controversial legislation [reforming the bailout], citing the difficulty lawmakers had in passing the financial-rescue package in the first place, as well as the limited Democratic majority in the Senate. "There's not much we can do other than jawbone," Sen. Charles Schumer, D-N.Y., said in an interview earlier this week.

Read that again: Despite controlling Congress and therefore having the ability to amend or even repeal the bailout bill, Schumer expects the public to believe "there's not much we can do other than jawbone." Indeed - Chuck Schumer thinks Americans are stupid.

The good news on the bailout bill is that some other senior Democrats seem to be countering Schumer:

Senate Banking Committee Chairman Christopher Dodd (D-Conn.) offered a number of specific steps he is considering, including crafting a federal statute based on a New York state law that would allow the government to reclaim money from firms that accept federal funds but don't fulfill their commitments.

Current law would only allow the government, as a creditor, to take such a step if a company enters bankruptcy. Mr. Dodd said he wants to expand the government's right to address his concerns that companies may be using government funds to pay executives.

"We've got to make sure we deal with this," Mr. Dodd said, adding that he's tried lecturing firms "and it's not working."

Dodd's rhetoric stands in stark contrast to Democrats' near total unity in promoting the Innocent Bystander Fable on the Iraq War—and that's a good thing if it turns into substantive Banking Committee action. Additionally, because the bailout bill was so undemocratically structured to give czar-ish power to the Treasury Secretary, the next Treasury Secretary will have almost complete authority to reform the bailout him/herself. So there's a chance this bailout can be changed before it fully gives away 5 percent of our entire economy to Wall Street fat cats.

But make no mistake about it —Schumer is debuting the Innocent Bystander Fable on the issue of the bailout. And if Democrats retain control of Congress, we can expect that meme to become more prevalent. Caught between their financial industry donors and a public that hates the bailout, Democratic leaders will trot out this Trojan horse to explain away their corruption—claiming it isn't deliberate, but merely a product of their supposed powerlessness.

They aren't powerless, of course—they were the ones who originally provided the votes to pass the bailout. And if they had the votes to pass it—they sure as hell have the votes to amend it or repeal it.

http://www.ourfuture.org/blog-entry/2008114402/bailout-innocent-bystander-fable