Fear and Loathing – Globally

By J.M. Hamilton (10-16-11)

“Politics is the art of controlling your environment.”  - Hunter S. Thompson

“Strange memories on this nervous night in Las Vegas. Five years later? Six? It seems like a lifetime, or at least a Main Era—the kind of peak that never comes again. San Francisco in the middle sixties was a very special time and place to be a part of. Maybe it meant something. Maybe not, in the long run . . . but no explanation, no mix of words or music or memories can touch that sense of knowing that you were there and alive in that corner of time and the world. Whatever it meant. . . .

History is hard to know, because of all the hired bullshit, but even without being sure of “history” it seems entirely reasonable to think that every now and then the energy of a whole generation comes to a head in a long fine flash, for reasons that nobody really understands at the time—and which never explain, in retrospect, what actually happened.

There was madness in any direction, at any hour. If not across the Bay, then up the Golden Gate or down 101 to Los Altos or La Honda. . . . You could strike sparks anywhere. There was a fantastic universal sense that whatever we were doing was right, that we were winning. . . .

And that, I think, was the handle—that sense of inevitable victory over the forces of Old and Evil. Not in any mean or military sense; we didn’t need that. Our energy would simply prevail. There was no point in fighting—on our side or theirs. We had all the momentum; we were riding the crest of a high and beautiful wave. . . .

So now, less than five years later, you can go up on a steep hill in Las Vegas and look West, and with the right kind of eyes you can almost see the high-water mark—that place where the wave finally broke and rolled back.”

-          Hunter S. Thompson, Fear and Loathing in Las Vegas, Circa 1971

Could a tide of sixties idealism, a tide- also - of pure economic and political survival, be rolling back in?  As I explained to my Texas friend, Bubba, this week, while the caricature of the sixties is one of free love, drugs, and tie dye, the reality is the sixties were a time of political rebellion against the establishment and the economic-political elite.   The military industrial complex and the politicians, who fed same, LBJ/Nixon, put the fear of god into all classes of society with the Draft and Vietnam War.   Americans felt excluded from the decision making process that significantly impacted their lives, with their son’s and daughter’s – of all classes of society - drafted into a badly managed war that few appreciated or wanted, except for the power elite, the corporations, and stockholders, who profit from war. 

Separately, the social fabric was torn further when Post WWII black servicemen and GIs, treated as equals in Europe, returned to America’s Jim Crow, and decided they had enough.  These black men and women, who had risked their lives for America to help defeat Nazism, and would later help stop the tide of Communism, were not going to allow themselves any longer to be marginalized and excluded from the American dream.   And a mass movement was born.

The resulting rebellion, the sixties, was born out of desperation and a feeling that the political elite, and the corporations who rule same, had ignored, or worse, abandoned them.   In short, this was a rebellion born of fear, a struggle over life and death, and the realignment of economic and political responsibilities and sensitivities.  Once the goals were realized (the end of the Vietnam War, and much later the end of the Draft, and the birth of civil rights), the better part of sixties rebellion was eventually co-opted into the mainstream, while the excesses of the movement were used by the establishment to tar and vilify it, as run by dilettantes and undesirables.  Might history repeat itself once again?

Today’s budding struggles in both Europe and the U.S., indeed globally, are also driven by fear and instincts for survival, and the feeling of societal abandonment by the plutocracy, who are catering to banks and major corporations, at the expense of the politically disenfranchised.  People may laugh at the naiveté and the innocence of the Occupy Wall Street crowd, but they are possibly the vanguard of economic and political rebellion that will be with the U.S. and Europe for as long as the financial crisis continues; and as the liabilities and excesses of Wall Street, and European banks, are transferred from the private sector onto the backs of those who can afford it the least, the poor and the middle class, this crisis is likely to be with us for awhile.  With Japan pointing the way to America’s and Europe’s foreseeable future, one of endless bank bailouts, wealth destruction, and an economic fugue of recession and depression, Occupy Wall Street is a possible prelude to much darker forces that could, eventually, rip the lid off social stability.  This nascent movement will likely metastasize into what remains of the middle class, as the real unemployment and underemployment rate continues to rise, economic opportunity and the safety net is rent and shredded by cries for fiscal austerity, and reactionary forces continue to advocate for and insist upon living with the fantasy/delusion of a free market economic system (when the reality is we are all living under quasi- free market/socialist regimes, globally).

If we examine how America and Europe got here, it appears that the worst excesses of both capitalism and socialism have collided, and reanimated into crony capitalism and crony democracy, the worst of all worlds.  Let’s then examine some of the recent political and economic events and trends for a snap shot in how we got here and what might be done.

As Mr. Thompson said, “Politics is the art of controlling your environment,” and the plutocracy manages the 99% of us, politically, like a virtuoso violinist plays a Stradivarius.  The plutocracy actually fears democracy and the law of large numbers, because it is something that they cannot control; but where there is a will there is often a way, for what the the one percent lack for in votes, they more than make up for it in money, and money is how the one percent control “democracy,” their political environment, and 99% of us.  With the Roberts Court’s Citizen’s United decision, the plutocracy can control the public through a flood of unlimited political campaign contributions, and hence control party nominees, the political parties themselves, and who gets elected in the vast majority of instances.  Money then is the river that feeds the political sea, and controls and reigns in populist impulses, at the expense of the majority.  Money controls the politicians, the political message, and the issues that are debated and discussed (e.g. during the recent Republican presidential debates, the issue of unemployment, bank bailouts, and possible solutions for the housing market are rarely if ever mentioned or discussed in any kind of detail).  These same power brokers to a very large degree also control the media and its output, and hence the questions posed to candidates.  Those politicians, who are elected, are so beholden to monied interests that they might as well be remote controlled robots, operated via remote feed; these politicians, in turn, vote for and maintain the lower tax rates that allow for the massive accumulation of wealth into the hands of a few, who in turn use this font to perpetuate their power (i.e. through the subversion of democracy).

If you think I’m just some crank with too much time on his hands, let’s hear what the King-Daddy of all plutocrats has to say on the matter, Mr. Warren Buffett (the living embodiment of F.D.R.): 

“There has been class warfare going on,” Buffett, 81, said in a Sept. 30 interview with Charlie Rose on PBS. “It’s just that my class is winning. And my class isn’t just winning, I mean we’re killing them.”

The global power elite also use their money to subvert populist uprisings, internationally.  Witness the Royal House of Saud’ deft and expert management of the Arab Spring (recently written about in Foreign Affairs), with the removal of the Egyptian Dictator, which was replaced by the far more oppressive Egyptian military and intelligence apparatus.  The Egyptian military, of course, dominates the Egyptian economy and politics.  The prosecution of Egyptian President Mubarak is nothing more than a side show, a distraction, red meat for the masses, while the popular uprising is subverted and controlled from within, by the money and power of the oil rich Saudis and the rise of the Saudi supported Muslim Brotherhood.   This example reminds us of how another popular uprising in America, the Tea Party movement, was co-opted and harnessed by the billionaire Koch Brothers, ultimately to serve their own ends (i.e. the continuation of their privileged tax status, and to insure the rules and regulations that govern their industries remain pro-Koch  – all under the guise of perpetuating free market principles).

Of course the plutocracy is all for the “free market,” as long as it serves their ends, but the free market also has a nasty downside, which is bankruptcy and putting corporate management teams on the street when they fail.  Hence, the plutocracy is not in favor of the free market when it threatens their own interests, and this is when they go running to the government tit for bailout monies (e.g. Wall Street during the 2008 financial crisis, up to the present day).  Hence, the plutocracy also favors socialism, when it favors them, although you’ll never hear them endorse it.

What this all adds up to is crony capitalism and crony democracy.  As predicted by J.M. Hamilton, the masses it seems, the 99%, are beginning to wake up, and they don’t like what they see: the instability the massive concentration of wealth creates, and the subversion of democratic institutions that results from same.

The ninety-nine percent are controlled politically and economically, like a puppet on a string.  Economically, globalism, free market ideology, and free trade dogma also insure that the masses and the message are controlled, via the number of jobs that are made available, and the opportunity that is created, when, where, and in what country, by the oligarchs and interlocking boards.

“Free trade” is nothing more than regulatory, tax and labor arbitrage by any other name.  Large multi-national manufacturers scour the globe, looking for the most advantageous trade laws, regulatory regimes, labor costs, and tax laws and rates.  Factor in the logistical costs of transporting foreign manufactured goods and services to their ultimate destination/market, plus the exchange rate, and you have “free trade.”   There’s just one problem, practiced in the extreme, arbitrage leaves advanced economies, and its citizens and labor, in a state of economic and political paralysis, as production, jobs, and tax revenue are shifted to emerging markets.   And while advanced economies and consumers maybe the beneficiaries of cheaper imported goods, from arbitrage and emerging markets (i.e. BRIC nations), those inexpensive goods and services don’t do the consumer a damn bit of good, if said consumer is unemployed.  At the end of the day, one can't dine on iPad.

To combat “free trade” dogma, and encourage emerging markets to develop their own self –sustaining middle class and economies, America needs to embrace the actions of President Reagan and focus on fair trade agreements that benefit American labor and the U.S. tax base.  The best way to do that is via trade policy reciprocity, that is to say, with the imposition of taxes and tariffs upon imported products that neutralizes to the manufacturer the benefits that accrue from arbitrage.   Until there is global parity in tax laws, labor markets, and rules and regulation governing industry and business, there is no other way than import taxes, tariffs and trade barriers, unless Americans are satisfied with high unemployment, declining economic opportunity, deficit spending, a shrinking tax base, and the resulting social upheaval.   In short, if you like one in five Americans being on the government dole (and a 25% childhood poverty rate), with those numbers likely to rise, then continue to embrace free trade.  This is why the Obama administrations support and passage of three Bush-era free trade agreements last week was so disappointing to many Democrats and labor.

Reciprocity should also be the U.S. tax policy in regards corporate profit repatriation.

By managing the economy, the plutocracy also manages our elected officials and their prospects for re-election.  By inflating prices at the pump, or inflating the price of basic consumer goods and services (or by decreasing the number of jobs, as a result of same), through financial speculation, or simply by controlling supply, and the deployment of capital, the monied interests can also expand and contract the economy, and the political fortunes of our elected officials.   President Obama and some of the “manufactured economic conditions” he has had to contend with, some possibly of his own making, immediately come to mind.

What can be done then to prevent the resulting societal unrest?  These proposals are neither novel nor new; they are basically, just common sense.

Push for higher tax rates on the rich, who are better organized and smarter than we are, or certainly have the resources to accentuate their god given talents, in the furtherance of their goal of global economic domination.  By raising the tax rates upon the rich, we effectively de-fang them and preserve democracy.  It also pushes the plutocracy to focus and work harder on sustaining and preserving their own wealth and status - this means they have less time to "screw over" the 99%.  Republicans like to wax nostalgic about the 50's and the Eisenhower Presidency, when the upper income tax rate was 90%... why not return there?

Advocate and push elected officials for caps on campaign contributions, the amounts of money that can be spent on campaigns, and push for limits on the amount of time our politicians can campaign.  The year around campaign cycle, with unlimited flow of money, has lead to an abdication of responsibility, and a vacuum that the elite exploit.  The Supreme Court might not like it, and view such restrictions as a violation of free speech, but in its present incarnation, the Roberts Court is just another plutocratic tool.  Besides, our system of checks and balances allows our legislative body to create new laws to counteract the worst tendencies/rulings of this judicial body, and vice versa.  The judicial smoke screen about money and free speech aside, what makes a democracy, ultimately, is the citizenry’s ability to vote (not the amount of money spent on a campaign, or the duration of the election cycle).

Encourage your elected officials to adopt fair trade agreements that protect America, American labor, and the U.S. tax base.  America has been exploited long enough by multi-national manufacturing interests to maximize their profit margin, and developing nations, as a dumping ground for their social problems (i.e. poverty and unemployment).  It’s time for emerging markets to create their own advanced economies and their own middle class, all the better to create greater opportunity for all, globally, and as a countervailing force against the downward economic spiral advanced economies present to the world today.  At the end of the day is the world better off with more advanced economies or fewer?

Advocate against excessive corporate combinations, oligopoly and monopoly.  We have seen time and time again, where these combinations are risk management nightmares, lead to greater inefficiency, and ultimately failure (e.g. UBS just lost a couple billion and saw their CEO dismissed).   The failure of these institutions often leads to great economic stress, and bailouts at the public’s expense (take for instance, the Wall Street cartel).  What these excessive combinations do achieve, however, is the greater enrichment of the elite, at the expense of their clients, consumers, and the general public.

Communism doesn’t work, which is the ultimate combination of the means of production under a single entity…. Why would the free market’s equivalent to communism, monopolies and oligopolies, work any better?

It’s time for an honest conversation with the American public, and the citizens of the world, about the right mix of free market principles and socialism, as a matter of economic policy.  I call it the big girl/big boy conversation.  The free market demagoguery that reactionary forces have foisted upon us all for so long has lead to some of the greatest economic and political abuses in the 20^th and early 21^st centuries, often with the 99% paying the price.   Socialism, and free markets in there purest forms, presently, do not exist, and would lead to the worst of all worlds:  it’s time that the public was educated accordingly.  Therefore, what should be open to debate and discussion, among the electorate and candidates for office, is the appropriate capitalistic and socialistic mix within the economy and society?

The plutocracy is at a cross roads… ultimately, they can rein themselves in via reform, or allow events to continue to spin out of control, and watch in dismay at the rising tide of economic instability and social unrest.  The current picture is none too bright for anybody: the 99% or 1%.   Ultimately, the political wave that broke in the sixties and receded, so well described by Mr. Thompson, did so because the plutocracy yielded to public demands for a more politically just and civil society.   However, this victory did not come easily or quickly, and was paid for at tremendous cost.

Now the question, some forty to fifty years later, is will the plutocracy yield and allow for a more economically just society?  There’s only one way to contain the fear and loathing unleashed, globally, and that is to contain the worst excesses of the ruling class.  Flexibility is key.

P.S.  On this date in history, the NY Times reports:  “October 16, 1793- Marie Antoinette was beheaded during the French Revolution,” seems that the Parisian 99% were not content with their cake.