Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

For The Record  

FTR #747 Bringin’ It All Back Home

Richard Nixon

Cit­i­zen Rove

Lis­ten:
MP3 Side 1 | Side 2

Intro­duc­tion: As the coun­try approach­es yet anoth­er anniver­sary of Amer­i­can inde­pen­dence, this pro­gram looks at the GOP’s polit­i­cal and eco­nom­ic hege­mo­ny over Amer­i­can life. With a loom­ing show­down over rais­ing the debt ceil­ing and the pos­si­bil­i­ty of a U.S. cred­it default (with cat­a­stroph­ic con­se­quences for this and oth­er coun­tries), we exam­ine a very impor­tant arti­cle by Robert Par­ry.

Not­ing that the GOP is using the same play­book in its desta­bi­liza­tion of Barack Oba­ma that the CIA has used in the sub­ver­sion of for­eign gov­ern­ments con­sid­ered insuf­fi­cient­ly coop­er­a­tive, Par­ry sets forth the unfold­ing of this unsa­vory dra­ma.

Cen­tral to Par­ry’s analy­sis is com­par­i­son of the desta­bi­liza­tion of the Allende regime with the sub­ver­sion of Oba­ma. In addi­tion to delib­er­ate­ly sab­o­tag­ing the econ­o­my, the CIA in Chile and the GOP in the U.S. have uti­lized a vig­or­ous media cam­paign to dis­sem­i­nate and pop­u­lar­ize the mes­sage that the fail­ing econ­o­my is due to the failed poli­cies of the seat­ed gov­ern­ment.

The desired result is the polit­i­cal elim­i­na­tion of that gov­ern­ment.

Par­ry prop­er­ly cites the gin­ning up of pho­ny “pop­ulist” phe­nom­e­na, styled to appear as gen­uine dis­sat­is­fac­tion with gov­ern­men­tal pol­i­cy. In Chile, house­wives and truck­ers were turned out to high­light the “failed” poli­cies of Allende. In the U.S., the Tea Par­ty fas­cists have shown up pack­ing guns in Wash­ing­ton D.C. and else­where.

The foun­da­tion to the suc­cess of the desta­bi­liza­tion strat­e­gy is the eco­nom­ic sub­ver­sion engin­nered in both coun­tries. The failed econ­o­my is then blamed on the gov­ern­ment and used to bring to pow­er the very sub­ver­sives who bear respon­si­bil­i­ty for eco­nom­ic dis­as­ter.

Much of the rest of the pro­gram recaps key arti­cles pre­sent­ed in FTR #412. Nobel Prize win­ning econ­o­mist Paul Krug­man notes that the GOP delib­er­ate­ly ran up enor­mous deficits under George W. Bush, with the intent of using the result­ing fis­cal cri­sis as jus­ti­fi­ca­tion for the elmi­na­tion of social pro­grams dear to the pub­lic.

Pro­gram High­lights Include: The Bush admin­is­tra­tion’s sup­pres­sion of a Trea­sury Depart­ment report detail­ing the spec­tac­u­lar debt that would result from the Bush admin­is­tra­tion’s poli­cies; colum­nist Bob Her­bert’s account­ing of the grotesque inequal­i­ty of wealth and income dis­tri­b­u­tion stem­ming from the pro­grams detailed by Krug­man and the Trea­sury report; James Stew­art Mar­t­in’s warn­ing about the dan­gers of eco­nom­ic con­cen­tra­tion and the pos­si­bity that “a calm judge­ment of busi­ness neces­si­ty” might lead the U.S. pow­er elite to insti­tute fas­cism in the Unit­ed States.

1. Much of the pro­gram con­sists of the read­ing of impor­tant analy­sis pre­sent­ed by Robert Par­ry. Not­ing that the GOP is using the same play­book in its desta­bi­liza­tion of Barack Oba­ma that the CIA has used in the sub­ver­sion of for­eign gov­ern­ments con­sid­ered insuf­fi­cient­ly coop­er­a­tive, Par­ry sets forth the unfold­ing of this unsa­vory dra­ma.

Note that miss­ing from Par­ry’s analy­sis is the fact that the nation­al secu­ri­ty estab­lish­ment long ago under­took the domes­tic appli­ca­tion of the same dead­ly force used to elim­i­nate Chile’s Sal­vador Allende. The deaths of Pres­i­dent Kennedy, his broth­er Robert, Mar­tin Luther King and many oth­ers stand in mute wit­ness to this fact.

Cen­tral to Par­ry’s analy­sis is com­par­i­son of the desta­bi­liza­tion of the Allende regime with the sub­ver­sion of Oba­ma. In addi­tion to delib­er­ate­ly sab­o­tag­ing the econ­o­my, the CIA in Chile and the GOP in the U.S. have uti­lized a vig­or­ous media cam­paign to dis­sem­i­nate and pop­u­lar­ize the mes­sage that the fail­ing econ­o­my is due to the failed poli­cies of the seat­ed gov­ern­ment.

The desired result is the polit­i­cal elmi­na­tion of that gov­ern­ment.

Par­ry prop­er­ly cites the gin­ning up of pho­ny “pop­ulist” phe­nom­e­na, styled to appear as gen­uine dis­sat­is­fac­tion with gov­ern­men­tal pol­i­cy. In Chile, house­wives and truck­ers were turned out to high­light the “failed” poli­cies of Allende. In the U.S., the Tea Par­ty fas­cists have shown up pack­ing guns in Wash­ing­ton D.C. and else­where.

Cen­tral to the suc­cess of the desta­bi­liza­tion strat­e­gy is the eco­nom­ic sub­ver­sion engin­nered in both coun­tries. The failed econ­o­my is then blamed on the gov­ern­ment and used to bring to pow­er the very sub­ver­sives who bear respon­si­bil­i­ty for eco­nom­ic dis­as­ter.

Mod­ern Repub­li­cans have a sim­ple approach to pol­i­tics when they are not in the White House: Make Amer­i­ca as ungovern­able as pos­si­ble by using almost any means avail­able, from chal­leng­ing the legit­i­ma­cy of oppo­nents to spread­ing lies and dis­in­for­ma­tion to sab­o­tag­ing the econ­o­my.

Over the past four decades or so, the Repub­li­cans have sim­ply not played by the old give-and-take rules of pol­i­tics. Indeed, if one were to step back and assess this Repub­li­can approach, what you would see is some­thing akin to how the CIA has desta­bi­lized tar­get coun­tries, espe­cial­ly those that seek to orga­nize them­selves in defi­ance of cap­i­tal­ist ortho­doxy.

To stop this spread of “social­ism,” near­ly any­thing goes. Take, for exam­ple, Chile in the ear­ly 1970s when social­ist Pres­i­dent Sal­vador Allende won an elec­tion and took steps aimed at improv­ing the con­di­tions of the country’s poor.

Under the direc­tion of Pres­i­dent Richard Nixon and Sec­re­tary of State Hen­ry Kissinger, the CIA was dis­patched to engage in psy­cho­log­i­cal war­fare against Allende’s gov­ern­ment and to make the Chilean econ­o­my “scream.”

U.S. intel­li­gence agen­cies secret­ly spon­sored Chilean news out­lets, like the influ­en­tial news­pa­per El Mer­cu­rio, and sup­port­ed “pop­ulist” upris­ings of truck­ers and house­wives. On the eco­nom­ic front, the CIA coor­di­nat­ed efforts to starve the Chilean gov­ern­ment of funds and to dri­ve unem­ploy­ment high­er.

Wors­en­ing job­less­ness could then be spun by the CIA-financed news out­lets as proof that Allende’s poli­cies didn’t work and that the only choice for Chile was to scrap its social pro­grams. When Allende com­pro­mised with the Right, that had the addi­tion­al ben­e­fit of caus­ing fric­tion between him and some of his sup­port­ers who want­ed even more rad­i­cal change.

As Chile became increas­ing­ly ungovern­able, the stage was set for the vio­lent over­throw of Allende, the instal­la­tion of a right­ist dic­ta­tor­ship, and the impo­si­tion of “free-mar­ket” eco­nom­ics that direct­ed more wealth and pow­er to Chile’s rich and their Amer­i­can cor­po­rate back­ers.

Though the Allende case in Chile is per­haps the best known exam­ple of this intel­li­gence strat­e­gy (because it was inves­ti­gat­ed by a Sen­ate com­mit­tee in the mid-1970s), the CIA has employed this approach fre­quent­ly around the world. Some­times the tar­get gov­ern­ment is removed with­out vio­lence, although oth­er times a bloody coup d’etat has been part of the mix.

Home to Roost

So, it is per­haps fit­ting that a com­pa­ra­ble approach to pol­i­tics would even­tu­al­ly come home to roost in the Unit­ed States, even to the point that some of the pro­pa­gan­da fund­ing comes from out­side sources (think of Rev. Sun Myung Moon’s Wash­ing­ton Times and Aus­tralian media mogul Rupert Murdoch’s News Corp.)

Obvi­ous­ly, giv­en the wealth of the Amer­i­can elites, the rel­a­tive pro­por­tion of the pro­pa­gan­da fund­ing is derived more domes­ti­cal­ly in the Unit­ed States than it would be in a place like Chile (or some oth­er unfor­tu­nate Third World coun­try that has got­ten on Washington’s bad side).

But the con­cept remains the same: Con­trol as much as pos­si­ble what the pop­u­la­tion gets to see and hear; cre­ate chaos for your opponent’s gov­ern­ment, eco­nom­i­cal­ly and polit­i­cal­ly; blame if for the mess; and estab­lish in the minds of the vot­ers that their only way out is to sub­mit, that the pain will stop once your side is back in pow­er.

Today’s Repub­li­cans have ful­ly embraced this con­cept of polit­i­cal war­fare, where­as the Democ­rats gen­er­al­ly have tried to play by the old rules, acqui­esc­ing when Repub­li­cans are in office with the goal of “mak­ing gov­ern­ment work,” even if the Repub­li­cans are set­ting the agen­da.

Unlike the Democ­rats and the Left, the Repub­li­cans and the Right have pre­pared them­selves for this bat­tle, almost as if they are fol­low­ing a CIA train­ing man­u­al. They have invest­ed tens of bil­lions of dol­lars in a pro­pa­gan­da infra­struc­ture that oper­ates 24/7, year-round, to spot and exploit mis­steps by polit­i­cal ene­mies.

This ver­ti­cal­ly inte­grat­ed media machine allows use­ful infor­ma­tion to move quick­ly from a right-wing blog to talk radio to Fox News to the Wall Street Jour­nal to con­ser­v­a­tive mag­a­zines and book pub­lish­ing. Right-wing pro­pa­gan­dists are well-trained and well-fund­ed so they can be deployed to all man­ner of pub­lic out­lets to ham­mer home the talk­ing points.

When a Demo­c­rat some­how does man­age to get into the White House, Repub­li­cans in Con­gress (and even in the Courts) are ready to do their part in the desta­bi­liza­tion cam­paign. Rather than grant tra­di­tion­al “hon­ey­moon” peri­ods of coop­er­a­tion with the president’s ear­ly poli­cies, the bat­tle lines are drawn imme­di­ate­ly.

In late 1992, for instance, Bill Clin­ton com­plained that his “hon­ey­moon” didn’t even last through the tran­si­tion, the two-plus months before a new pres­i­dent takes office. He found him­self fac­ing espe­cial­ly harsh haz­ing from the Wash­ing­ton press corps, as the main­stream media – seek­ing to shed its “lib­er­al” label and goad­ed by the right-wing media – tried to demon­strate that it would be tougher on a Demo­c­rat than any Repub­li­can.

The main­stream press hyped minor “scan­dals” about Clinton’s White­wa­ter real estate invest­ment and Trav­el-gate, a flap about some rou­tine fir­ings at the White House trav­el office. Mean­while, the Right’s rapid­ly grow­ing media was spread­ing false sto­ries impli­cat­ing Clin­ton in the death of White House aide Vince Fos­ter and oth­er “mys­te­ri­ous deaths.”

Repub­li­cans in Con­gress did all they could to feed the press hys­te­ria,  hold­ing hear­ings and demand­ing that spe­cial pros­e­cu­tors be appoint­ed. When the Clin­ton admin­is­tra­tion relent­ed, the choice of pros­e­cu­tors was hand­ed over to right-wing Repub­li­can Appeals Court Judge David Sen­telle, who con­scious­ly picked polit­i­cal ene­mies of Clin­ton to over­see zeal­ous inves­ti­ga­tions.

Final­ly Win­ning

The use of scan­dal-mon­ger­ing to desta­bi­lize the Clin­ton admin­is­tra­tion final­ly peaked in late 1998 and ear­ly 1999 when the Repub­li­can-con­trolled House vot­ed impeach­ment and Clin­ton had to endure (but sur­vive) a humil­i­at­ing tri­al in the Sen­ate.

The Repub­li­can strat­e­gy, how­ev­er, con­tin­ued into Cam­paign 2000 with Vice Pres­i­dent Al Gore fac­ing attacks on his char­ac­ter and integri­ty. Gore was false­ly paint­ed as a delu­sion­al brag­gart, as both right-wing and main­stream media out­lets freely mis­quot­ed him and sub­ject­ed him to ridicule (while simul­ta­ne­ous­ly bow­ing and scrap­ing before Repub­li­can can­di­date George W. Bush).

When Gore man­aged to win the nation­al pop­u­lar vote any­way – and would have car­ried the key state of Flori­da if all legal­ly cast bal­lots were count­ed – the Repub­li­cans and the Right rose up in fury demand­ing that the Flori­da count be stopped before Bush’s tiny lead com­plete­ly dis­ap­peared. Start­ing a minor riot in Mia­mi, the Repub­li­cans showed how far they would go to claim the White House again.

Five Repub­li­can par­ti­sans on the U.S. Supreme Court – want­i­ng to ensure that the new pres­i­dent would keep their side in con­trol of the courts and rec­og­niz­ing that their par­ty was pre­pared to spread dis­or­der if Gore pre­vailed – stopped the count­ing of votes and made Bush the “win­ner.” [For details, see the book, Neck Deep.]

Despite this par­ti­san rul­ing, Gore and the Democ­rats stepped back from the polit­i­cal con­fronta­tion. The right-wing press cheered and gloat­ed, while the main­stream news media urged the peo­ple to accept Bush as “legit­i­mate” for the good of the coun­try.

For most of Bush’s dis­as­trous pres­i­den­cy, this dynam­ic remained the same. Though bare­ly able to com­plete a coher­ent sen­tence, Bush was treat­ed with great def­er­ence, even when he failed to pro­tect the coun­try from the 9/11 attacks and led the nation into an unpro­voked war with Iraq. There were no com­bat­ive inves­ti­ga­tions of Bush like those that sur­round­ed Clin­ton.

Even at the end of Bush’s pres­i­den­cy – when his poli­cies of dereg­u­la­tion, tax cuts for the rich and mas­sive bud­get deficits com­bined to cre­ate the biggest finan­cial cri­sis since the Great Depres­sion – the pre­vail­ing mes­sage from the Estab­lish­ment was that it was unfair to lay too much blame on Bush.

Short­ly after Barack Oba­ma took office in 2009, a Repub­li­can/right-wing talk­ing point was to com­plain when any­one took note of the mess that Bush had left behind: “There you go again, blam­ing Bush.”

Get­ting Oba­ma

Imme­di­ate­ly, too, the Repub­li­cans and the Right set to work demo­niz­ing and destroy­ing Obama’s pres­i­den­cy. Instead of allow­ing the Democ­rats to enact leg­is­la­tion aimed at address­ing the finan­cial and eco­nom­ic cri­sis, the Sen­ate Repub­li­cans launched fil­i­buster after fil­i­buster.

When Oba­ma and the Democ­rats did push through emer­gency leg­is­la­tion, such as the $787 bil­lion stim­u­lus pack­age, they had to water it down to reach the 60-vote super-major­i­ty. The Repub­li­cans and the Right then quick­ly laid the blame for high unem­ploy­ment on the “failed” stim­u­lus.

There also were waves of pro­pa­gan­da pound­ing Obama’s legit­i­ma­cy. The Right’s news media pressed bogus accu­sa­tions that Oba­ma had been born in Kenya and thus was not con­sti­tu­tion­al­ly eli­gi­ble to be pres­i­dent.  He was denounced as a social­ist, a Mus­lim, a fas­cist, an ene­my of Israel, and pret­ty much any oth­er charge that might hit some Amer­i­can hot but­ton.

When Oba­ma wel­comed Amer­i­can stu­dents back to school in 2009, the Right orga­nized against his sim­ple mes­sage – urg­ing young peo­ple to work hard – as if it were some form of total­i­tar­i­an mind con­trol. His attempt to address the grow­ing cri­sis in Amer­i­can health care was denounced as tak­ing away free­doms and impos­ing “death pan­els.”

Soon, bil­lion­aires like oil man David Koch and media mogul Mur­doch were pro­mot­ing a “grass­roots” rebel­lion against Oba­ma called the Tea Par­ty. Activists were show­ing up at pres­i­den­tial speech­es with guns and bran­dish­ing weapons at ral­lies near Wash­ing­ton.

The high-deci­bel dis­rup­tions and the “scream­ing” econ­o­my cre­at­ed the impres­sion of polit­i­cal chaos. Large­ly ignor­ing the role of the Repub­li­cans, the press fault­ed Oba­ma for fail­ing to live up to his cam­paign promise to bring greater bipar­ti­san­ship to Wash­ing­ton.

Hear­ing the dis­cord framed that way, many aver­age Amer­i­cans also blamed Oba­ma; many of the President’s sup­port­ers grew demor­al­ized; and, as hap­pened with Allende in Chile, some on the Left turned against Oba­ma for not doing more, faster.

By Novem­ber 2010, the stage was set for a big Repub­li­can come­back. The par­ty swept to vic­to­ry in the House and fell just short in the Sen­ate. But Con­gress was not the Repub­li­cans’ true goal. What they real­ly want is the White House with all its exec­u­tive pow­ers.

How­ev­er, fol­low­ing Obama’s suc­cess in killing Osama bin Laden on May 2 and with what is wide­ly regard­ed as a weak Repub­li­can pres­i­den­tial field, the Right’s best hope for regain­ing com­plete con­trol of the U.S. gov­ern­ment in 2012 is to sink the U.S. econ­o­my.

Already, the Repub­li­can suc­cess in lim­it­ing the scope of the stim­u­lus pack­age and then label­ing it a fail­ure – com­bined with deep cuts in local, state and fed­er­al gov­ern­ment spend­ing – have helped push the econ­o­my back to the brink where a dou­ble-dip reces­sion is now a seri­ous con­cern.

Despite these wor­ries – and a warn­ing from Moody’s about a pos­si­ble down­grade on U.S. debt if Con­gress delays action on rais­ing the debt lim­it – the Repub­li­cans are vow­ing more brinks­man­ship over the debt-lim­it vote. Before act­ing, they are demand­ing major reduc­tions in gov­ern­ment spend­ing (while refus­ing to raise tax­es on the rich).

A Conun­drum

So, Oba­ma and the Democ­rats face anoth­er conun­drum. If they slash spend­ing too much, they will fur­ther stall the recov­ery. How­ev­er, if they refuse to sub­mit to this lat­est round of Repub­li­can black­mail, they risk a debt cri­sis that could have dev­as­tat­ing con­se­quences for the U.S. econ­o­my for years – even decades – to come.

Either way, the right-wing media and much of the main­stream press will put the blame on Oba­ma and the Democ­rats. They will be held account­able for fail­ing to gov­ern.

The Repub­li­can pro­pa­gan­da machine will tell the Amer­i­can peo­ple that they must throw Oba­ma and the Democ­rats out of office for sta­bil­i­ty to return. There will be assur­ances about how the “mag­ic of the mar­ket” will bring back the bright days of pros­per­i­ty.

Of course, the real­i­ty of a new Repub­li­can admin­is­tra­tion, espe­cial­ly with a GOP Con­gress, would be the return of the old right-wing nos­trums: more tax cuts for the rich, less reg­u­la­tion of cor­po­ra­tions, more mil­i­tary spend­ing, and more pri­va­ti­za­tion of social pro­grams.

Any bud­get bal­anc­ing will come at the expense of labor rights for union employ­ees and shift­ing the costs for health care onto the backs of the elder­ly. Yet, all this will be sur­round­ed by intense pro­pa­gan­da explain­ing the pub­lic pain as a hang­over from mis­guid­ed gov­ern­ment “social engi­neer­ing.”

There is, of course, the pos­si­bil­i­ty that the Amer­i­can peo­ple will see through today’s Repub­li­can CIA-style strat­e­gy of “mak­ing the econ­o­my scream.” Amer­i­cans might come to rec­og­nize the role of the pseu­do-pop­ulist pro­pa­gan­dists on Fox News and talk radio.

Or Repub­li­cans might have sec­ond thoughts about play­ing chick­en on the debt lim­it and run­ning the risk of a glob­al depres­sion. Such a gam­ble could redound against them. And, it’s hard to believe that even their most ardent bil­lion­aire-back­ers would find destruc­tion of their stock port­fo­lios that appeal­ing.

But there can be a momen­tum to mad­ness. We have seen through­out his­to­ry that events can get out of hand, that thor­ough­ly pro­pa­gan­dized true believ­ers can tru­ly believe. Some­times, they don’t under­stand they are sim­ply being manip­u­lat­ed for a less­er goal. Once the chaos starts, it is hard to restore order.

That has been anoth­er bloody les­son from the CIA’s oper­a­tions in coun­tries around the world. These covert actions can have exces­sive or unin­tend­ed con­se­quences.

Oust­ing Allende turned Chile into a fas­cist dic­ta­tor­ship that sent assas­sins far and wide, includ­ing Wash­ing­ton, D.C. Oust­ing Mossadegh in Iran led to the tyran­ny of the Shah and ulti­mate­ly to an extreme Islamist back­lash. Oust­ing Arbenz in Guatemala led to the butch­ery of some 200,000 peo­ple and the rise of a nar­co-state. Such exam­ples can go on and on.

How­ev­er, these CIA-type tech­niques can be very seduc­tive, both to U.S. pres­i­dents look­ing for a quick fix to some inter­na­tion­al prob­lem and to a polit­i­cal par­ty try­ing to gain a deci­sive edge for win­ning. These meth­ods can be espe­cial­ly dan­ger­ous when the oth­er side doesn’t orga­nize effec­tive­ly to counter them.

The hard real­i­ty in the Unit­ed States today is that the Repub­li­cans and the Right are now ful­ly orga­nized, armed with a potent pro­pa­gan­da machine and pos­sess­ing an extra­or­di­nary polit­i­cal will. They are well-posi­tioned to roll the U.S. econ­o­my off the cliff and blame the cat­a­stro­phe on Oba­ma.

Indeed, that may be their best hope for win­ning Elec­tion 2012.

“The GOP’s CIA Play­book: Desta­bi­lize Coun­try to Sweep Back into Pow­er” by Robert Par­ry [Con­sor­tium News]; AlterNet.org; 6/9/2011.

2. Much of the rest of the pro­gram recaps key arti­cles pre­sent­ed in FTR #412. Nobel Prize win­ning econ­o­mist Paul Krug­man notes that the GOP delib­er­ate­ly ran up enor­mous deficits under George W. Bush, with the intent of using the result­ing fis­cal cri­sis as jus­ti­fi­ca­tion for the elmi­na­tion of social pro­grams dear to the pub­lic.

‘The lunatics are now in charge of the asy­lum.’ So wrote the nor­mal­ly staid Finan­cial Times, tra­di­tion­al­ly the voice of sol­id British busi­ness opin­ion, when sur­vey­ing last week’s bill. Indeed, the leg­is­la­tion is dou­bly absurd: the gim­micks used to make an $800-bil­lion-plus tax cut car­ry an offi­cial price tag of only $320 bil­lion are a joke, yet the cost with­out the gim­micks is so large that the nation can’t pos­si­bly afford it while keep­ing its oth­er promis­es.

“Stat­ing the Obvi­ous” by Paul Krug­man; The New York Times; 5/27/2003.

3. Mr. Krug­man sug­gests that “a fis­cal train wreck” is indeed intend­ed.

But then maybe that’s the point. The Finan­cial Times sug­gests that ‘more extreme Repub­li­cans’ actu­al­ly want a fis­cal train wreck: ‘propos­ing to slash fed­er­al spend­ing, par­tic­u­lar­ly on social pro­grams, is a tricky elec­toral propo­si­tion, but a fis­cal cri­sis offers the tan­ta­liz­ing prospect of forc­ing such cuts through the back door.’ Good for The Finan­cial Times. It seems that stat­ing the obvi­ous has now, final­ly, become respectable.

It’s no secret that right-wing ide­o­logues want to abol­ish pro­grams Amer­i­cans take for grant­ed. But not long ago, to sug­gest that the Bush administration’s poli­cies might actu­al­ly be dri­ven by those ideologues—that the admin­is­tra­tion was delib­er­ate­ly set­ting the coun­try up for a fis­cal cri­sis in which pop­u­lar social pro­grams could be sharply cut—was to be accused of spout­ing con­spir­a­cy the­o­ries. [Ital­ics are Mr. Emory’s] Yet by push­ing through anoth­er huge tax cut in the face of record deficits, the admin­is­tra­tion clear­ly demon­strates either that it is com­plete­ly feck­less, or that it actu­al­ly wants a fis­cal cri­sis. (Or maybe both.)

Here’s one way to look at the sit­u­a­tion: Although you wouldn’t know it from the rhetoric, fed­er­al tax­es are already his­tor­i­cal­ly low as a share of G.D.P. Once the new round of cuts takes effect, fed­er­al tax­es will be low­er than their aver­age dur­ing the Eisen­how­er admin­is­tra­tion. How, then, can the gov­ern­ment pay for Medicare and Medicaid—which didn’t exist in the 1950’s—and Social Secu­ri­ty, which will become far more expen­sive as the pop­u­la­tion ages? (Defense spend­ing has fall­en com­pared with the econ­o­my, but not that much, and it’s on the rise again.)

The answer is that it can’t. The gov­ern­ment can bor­row to make up the dif­fer­ence as long as investors remain in denial, unable to believe that the world’s only super­pow­er is turn­ing into a banana repub­lic. But at some point bond mar­kets will balk—they won’t lend mon­ey to a gov­ern­ment, even that of the Unit­ed States, if that government’s debt is grow­ing faster than its rev­enues and there is no plau­si­ble sto­ry about how the bud­get will even­tu­al­ly come under con­trol.

At that point, either tax­es will go up again, or pro­grams that have become fun­da­men­tal to the Amer­i­can way of life will be gut­ted. We can be sure that the right will do what­ev­er it takes to pre­serve the Bush tax cuts—right now the admin­is­tra­tion is even skimp­ing on home­land secu­ri­ty to save a few dol­lars here and there. But bal­anc­ing the books with­out tax increas­es will require deep cuts where the mon­ey is: that is, in Med­ic­aid, Medicare and Social Secu­ri­ty.

The pain of these ben­e­fit cuts will fall on the mid­dle class and the poor, while the tax cuts over­whelm­ing­ly favor the rich. For exam­ple, the tax cut passed last week will raise the after-tax income of most peo­ple by less than1 percent—not near­ly enough to com­pen­sate them for the loss of ben­e­fits. But peo­ple with incomes over $1 mil­lion per year will, on aver­age, see their after-tax income rise 4.4 per­cent. The Finan­cial Times sug­gests this is delib­er­ate (and I agree): ‘For them,’ it says of those extreme Repub­li­cans, ‘under­min­ing the mul­ti­lat­er­al inter­na­tion­al order is not enough; long-held views on income dis­tri­b­u­tion also require rad­i­cal revi­sion.’

How can this be hap­pen­ing? Most peo­ple, even most lib­er­als, are com­pla­cent. They don’t real­ize how dire the fis­cal out­look real­ly is, and they don’t read what the ide­o­logues write. They imag­ine that the Bush admin­is­tra­tion, like the Rea­gan admin­is­tra­tion, will mod­i­fy our sys­tem only at the edges, that it won’t destroy the social safe­ty net built up over the past 70 years. But the peo­ple now run­ning Amer­i­ca aren’t con­ser­v­a­tives: they’re rad­i­cals who want to do away with the social and eco­nom­ic sys­tem we have, and the fis­cal cri­sis they are con­coct­ing may give them the excuse they need. The Finan­cial Times, it seems, now under­stands what’s going on, but when will the pub­lic wake up?

Idem.

4. High­light­ing the cat­a­clysmic dimen­sions of what the Bush admin­is­tra­tion did, The Finan­cial Times set forth the dead­ly dimen­sions of the fis­cal impact of the Bush tax cuts. One should not over­look the fact that this infor­ma­tion is from a report com­mis­sioned by the Trea­sury Depart­ment, sup­pressed by the admin­is­tra­tion, and ignored by the US media.

The Bush admin­is­tra­tion has shelved a report com­mis­sioned by the Trea­sury that shows the US cur­rent­ly faces a future of chron­ic fed­er­al bud­get deficits total­ing at least $44,200bn in cur­rent US dol­lars. [Empha­sis added.] The study, the most com­pre­hen­sive assess­ment of how the US gov­ern­ment is at risk of being over­whelmed by the ‘baby boom’ generation’s future health­care and retire­ment costs, was com­mis­sioned by then trea­sury sec­re­tary Paul O’Neill. But the Bush admin­is­tra­tion chose to keep the find­ings out of the annu­al bud­get report for fis­cal year 2004, pub­lished in Feb­ru­ary, as the White House cam­paigned for a tax-cut pack­age that crit­ics claim will expand future deficits.

The study asserts that sharp tax increas­es, mas­sive spend­ing cuts or a painful mix of both are unavoid­able if the US is to meet ben­e­fit promis­es to future gen­er­a­tions. It esti­mates that clos­ing the gap would require the equiv­a­lent of an imme­di­ate and per­ma­nent 66 per cent across-the-board income tax increase. . .

Mr. O’Neill, who was fired last Decem­ber, refused to com­ment. The study’s analy­sis of future deficits dwarfs pre­vi­ous esti­mates of the finan­cial chal­lenge fac­ing Wash­ing­ton It is rough­ly equiv­a­lent to 10 times the pub­licly held nation­al debt, four years of US eco­nom­ic out­put or more than 94 per cent of all US house­hold assets. [Empha­sis added.] Alan Greenspan, Fed­er­al Reserve chair­man, last week bemoaned what he called Washington’s ‘deaf­en­ing silence about the future crunch.’

The esti­mates reflect the extent to which the annu­al deficit, the nation­al debt and oth­er wide­ly report­ed, back­ward-look­ing data are becom­ing archa­ic and mis­lead­ing as mea­sures of the government’s sol­ven­cy. Mr. [Kent] Smet­ters, now a Uni­ver­si­ty of Penn­syl­va­nia finance pro­fes­sor, said tax cuts were only a frac­tion of the imbal­ance, and that the big­ger prob­lem ‘is the whole [bud­get] lan­guage we’re using.’ Lau­rence Kot­likoff, an expert on long-term bud­get account­ing alleged in a recent Boston Globe edi­to­r­i­al that the Bush admin­is­tra­tion sup­pressed the research to ease pas­sage of the tax-cut plan.

“Report Warns of Chron­ic US Deficits” by Per­onet Despeignes; The Finan­cial Times; 5/29/2003; p. 1.

5. In his last col­umn for The New York Times, Bob Her­bert chron­i­cled the depth of the fail­ure of GOP eco­nom­ic poli­cies exe­cut­ed under George W. Bush.

. . . . Income and wealth inequal­i­ty in the U.S. have reached stages that would make the third world blush. As the Eco­nom­ic Pol­i­cy Insti­tute has report­ed, the rich­est 10 per­cent of Amer­i­cans received an uncon­scionable 100 per­cent of the aver­age income growth in the years 2000 to 2007, the most recent extend­ed peri­od of eco­nom­ic expan­sion.

Amer­i­cans behave as if this is some­how nor­mal or accept­able. It shouldn’t be, and didn’t used to be. Through much of the post-World War II era, income dis­tri­b­u­tion was far more equi­table, with the top 10 per­cent of fam­i­lies account­ing for just a third of aver­age income growth, and the bot­tom 90 per­cent receiv­ing two-thirds. That seems like ancient his­to­ry now.

The cur­rent mald­is­tri­b­u­tion of wealth is also scan­dalous. In 2009, the rich­est 5 per­cent claimed 63.5 per­cent of the nation’s wealth. The over­whelm­ing major­i­ty, the bot­tom 80 per­cent, col­lec­tive­ly held just 12.8 per­cent. [Ital­ics are mine–D.E.]

This inequal­i­ty, in which an enor­mous seg­ment of the pop­u­la­tion strug­gles while the for­tu­nate few ride the gravy train, is a world-class recipe for social unrest. Down­ward mobil­i­ty is an ever-short­en­ing fuse lead­ing to pro­found con­se­quences.

A stark exam­ple of the fun­da­men­tal unfair­ness that is now so wide­spread was in The New York Times on Fri­day under the head­line: “G.E.’s Strate­gies Let It Avoid Tax­es Alto­geth­er.” Despite prof­its of $14.2 bil­lion — $5.1 bil­lion from its oper­a­tions in the Unit­ed States — Gen­er­al Elec­tric did not have to pay any U.S. tax­es last year. . . .

“Los­ing Our Way” byb Bob Her­bert; The New York Times; 3/25/2011.

6. The broad­cast presents dis­cus­sion indi­cat­ing that the white work­ing class vot­ing bloc may well hold the key to Oba­ma’s reelec­tion.

. . . .Each elec­tion cycle there occurs a tired rit­u­al, in which pun­dits and reporters redis­cov­er that yes, indeed, there are still a lot of white work­ing class vot­ers in Amer­i­ca, and they rep­re­sent a seri­ous vul­ner­a­bil­i­ty for the Democ­rats. But just this once, let’s skip the peri­od where every­one ini­tial­ly ignores this group and cut straight to the chase: There will be a lot of white work­ing class vot­ers show­ing up at the polls next Novem­ber, and the degree to which they sup­port (or aban­don) Pres­i­dent Oba­ma could very well make or break his reelec­tion.

In 2008, dur­ing his oth­er­wise-sol­id elec­tion vic­to­ry, Oba­ma lost the white work­ing class vote by 18 points. In 2010, how­ev­er, things got much worse: Con­gres­sion­al Democ­rats’ expe­ri­enced a cat­a­stroph­ic 30 point deficit among the same group. While the first num­ber is a fig­ure Oba­ma could live with repeat­ing, the sec­ond could very well prove fatal.

Indeed, if Repub­li­cans can repli­cate that 30 point deficit in 2012—a mar­gin which seems increas­ing­ly pos­si­ble giv­en the recent bad news about the economy—Obama will have lit­tle to no room for error among his oth­er con­stituen­cies. For exam­ple, even if, as expect­ed, the share of minor­i­ty vot­ers increas­es from 26 to around 28 per­cent in the next elec­tion and Oba­ma receives the typ­i­cal 75 per­cent of that vote, while the share of white work­ing class vot­ers declines by anoth­er 3 per­cent­age points, a 30 point hole in Obama’s white work­ing class sup­port would mean that the over­all sup­port he needs to win the elec­tion was tee­ter­ing right on the knife’s edge. In such a sce­nario, Oba­ma would have to hold essen­tial­ly all of his white col­lege grad­u­ate sup­port from 2008 (47 per­cent, a his­toric high for Democ­rats) to be assured of vic­to­ry.

And make no mis­take about it, GOP strat­e­gy for 2012 will start with the white work­ing class and attempt to dri­ve up sup­port among this group as high as pos­si­ble. . . .

“The White Work­ing Class: The Group that Will Like­ly Decide Oba­ma’s Fate” by Ruy Tex­eira; The New Repub­lic; 6/20/2011.

7. Cor­po­rate Amer­i­ca has turned its back on the U.S.  mid­dle class, with results that may well rebound on Oba­ma’s elec­toral chances and play into the Repub­li­can strat­e­gy.

The big mys­tery in the Unit­ed States today s why the job cri­sis is not at the cen­ter of the polit­i­cal and eco­nom­ic debate. After all, the numbers–and the human tragedies they reflect–could not be bleak­er. . . .

. . . Politi­cians and pun­dits on the left have begun warn­ing that this rel­a­tive indif­fer­ence to job­less­ness is worse than a crime, it is a mis­take. In a blog post­ing, for­mer labour sec­re­tary Robert Reich said “the eco­nom­ic bur­dens of Amer­i­ca’s vast mid­dle class may be catch­ing up with the street.” Unless more jobs are cre­at­ed soon , he warned ‘Amer­i­can con­sumers will not hae enough pur­chas­ing pow­er to buy what the pri­vate sec­tor can pro­duce.’

The real­i­ty may be even more chill­ing: Per­haps U.S. busi­ness is learn­ing to get by just fine, thanks you, with­out mid­dle-class con­sumers. While that may be good news for chief exec­u­tives and share­hold­ers, it could be the begin­ning of a new and social­ly wrench­ing polit­i­cal logifc that leaves the great Amer­i­can mid­dle class behind.

Wall Street, which is paid for smarts, not sen­ti­ment, has this fig­ured out. In a news­pa­per inter­view ear­li­er this month, Robert Doll, chief equi­ty strate­gist at Black­Rock, the largest mon­ey man­ag­er in the world, point­ed out that the for­tunes of U.S. com­pa­nies and the for­tunes of the coun­try as a whole are diverg­ing: ‘The U.S. stock mar­ket and the U.S. econ­o­my are increas­ing­ly dif­fer­ent ani­mals.” . . .

“U.S. Mid­dle Class Becomes a Big Busi­ness After­thought” by Chris­tia Free­land; Toron­to Globe and Mail; 6/0/2011.

8. The broad­cast con­cludes by revis­it­ing the work of James Stew­art Mar­tin, the Jus­tice Depart­ment offi­cial charged with help­ing the dis­so­lu­tion of the transna­tion­al cor­po­rate links that enabled the rise of Hitler and the Nazi war of aggres­sion. One of the most impor­tant aspects of Martin’s elo­quent book is his warn­ing for the future. Hav­ing wit­nessed first­hand how eas­i­ly the Amer­i­can busi­ness inter­ests were able to sub­vert the eco­nom­ic restruc­tur­ing of Ger­many, Mar­tin feared for the future of the Unit­ed States. Not­ing that eco­nom­ic con­cen­tra­tion in Ger­many had made it pos­si­ble for a small num­ber of pow­er­ful inter­ests to put Hitler in pow­er, Mar­tin not­ed the same pat­tern of eco­nom­ic con­cen­tra­tion becom­ing evi­dent in the Unit­ed States as of the late 1940’s. He offered a stark warn­ing for future gen­er­a­tions of Amer­i­cans.

. . . .The ecopo­lit­i­cal mas­ters of Ger­many boost­ed Hitler and his pro­gram into the driver’s seat at a time when the tide in the polit­i­cal fight between the Nazis and the sup­port­ers of the Weimar Repub­lic was swing­ing against the Nazis. All of the men who mat­tered in bank­ing and indus­tri­al cir­cles could quick­ly agree on one pro­gram and throw their finan­cial weight behind it. Their sup­port won the elec­tion for the Nazis. We must assume that the same thing is not yet true in the Unit­ed States. We do have eco­nom­ic pow­er so con­cen­trat­ed that it would lie in the pow­er of not more than a hun­dred men—if they could agree among themselves—to throw the same kind of com­bined eco­nom­ic weight behind a sin­gle pro­gram. They have not agreed yet. . . . If the Unit­ed States should run into seri­ous eco­nom­ic dif­fi­cul­ties, how­ev­er, most of the con­di­tions for a re-enact­ment of the Ger­man dra­ma would already exist on the Amer­i­can stage. The slight dif­fer­ences with­in the camp of the fra­ter­ni­ty then may be the only real bar­ri­er to the kind of inte­gra­tion of the finan­cial and indus­tri­al com­mu­ni­ty behind a sin­gle repres­sive pro­gram, like that which the financiers and indus­tri­al­ists of Ger­many exe­cut­ed through Hitler. Are we safe in assum­ing that it would take a grave eco­nom­ic cri­sis to pre­cip­i­tate the dan­gers inher­ent in eco­nom­ic con­cen­tra­tion? The basic inte­gra­tion of the finan­cial and indus­tri­al groups in the Unit­ed States is evi­dent when we look at the increase of con­cen­tra­tion in the past few years. . . .

(All Hon­or­able Men; James Stew­art Mar­tin; Copy­right 1950 [HC]; Lit­tle, Brown & Co.; p. 295.)

9. The last para­graph of Mar­t­in’s book, pub­lished in 1950, may well fore­cast what the GOP has in mind for the U.S. As Robert Par­ry notes above, if the GOP can desta­bi­lize Oba­ma, their “alter­na­tive” pro­gram will sim­ply be more of the same, tax cuts for the rich and spend­ing cuts for every­one and every­thing else. In that this will no more cre­ate jobs than it did dur­ing the Bush years (see the Bob Her­bert col­umn above), the for­mal impo­si­tion of fas­cism to “deal” with the pop­u­lar dis­sat­is­fac­tion stem­ming from the inevitable fail­ure is a pos­si­bil­i­ty to con­tem­plate.

That impo­si­tion of fas­cism may well stem from some mon­ster ter­ror­ist inci­dent, or per­haps a nat­ur­al or civic dis­as­ter (Cal­i­for­nia earth­quake or a nuclear pow­er plant melt­down).

. . . The moral of this is not that Ger­many is an inevitable men­ace, but that there are forces in our own coun­try which can make Ger­many a men­ace. And, more impor­tant­ly, they could cre­ate a men­ace of their own here at home, not through a delib­er­ate plot to bring about a polit­i­cal cat­a­stro­phe but as a calm judg­ment of ‘busi­ness neces­si­ty.’ The men who would do this are not Nazis, but busi­ness­men; not crim­i­nals, but hon­or­able men.

(Ibid.; p. 300.)

Discussion

7 comments for “FTR #747 Bringin’ It All Back Home”

  1. I have main­tained and con­tin­ue to main­tain that the GOP (aka. Repub­li­can Par­ty) is a cen­trifuge of evil in the uni­verse. An axis of evil, if you will. How­ev­er, I do not believe the Demo­c­ra­t­ic Par­ty is bet­ter, or has any less a vest­ed inter­est in con­trol and author­i­tar­i­an­ism. Both par­ties have killed Amer­i­ca. A friend of mine recent­ly told me about a sign on the store­front of a polit­i­cal­ly vocal per­son which had the Repub­li­can Par­ty with the Nazi sym­bol (the Nazi swasti­ka) and the Demo­c­ra­t­ic Par­ty with the sick­le and ham­mer of the CCCP (aka. Sovi­ety Union, USSR) and the text read “pick one”.

    Posted by Joshua Laudermilk | July 6, 2011, 7:03 pm
  2. Some com­ments:

    (1) Par­ry fails to par­ry GOP inten­tions when he could have sourced the full quote and its ori­gin:

    “Make the econ­o­my scream” was a direct quote from Nixon, under advice from Kissinger, in a com­mu­nique to the CIA:

    http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB8/nsaebb8i.htm

    (2) This was a pow­er­ful edi­tion of FTR for me, not least because I’ve been pros­e­ly­tiz­ing for years that 1973 Chile is their plan for Amer­i­ca.

    There’s a lot to learn from the 1973 Chilean coup.

    Chile’s coup cul­mi­nat­ed in “Oper­a­tion Con­dor” which has been cov­ered by Dave in AFA #24–28, FTR #223, FTR #259, and FTR #490 (an inter­view with Robert Par­ry).

    Oper­a­tion Con­dor was a 1975 covert multi­na­tion­al pro­gram to assas­si­nate & kid­nap/round-up & tor­ture lib­er­als.

    Strange­ly, in 2005, Team Bush gave us a dress-rehearsal that “nabbed” 10,000 in a sin­gle week. The inter­est­ing name of this oper­a­tion was “Oper­a­tion Fal­con”:

    http://articles.cnn.com/2005–04-14/justice/fugitive.arrests_1_law-enforcement-fugitives-operation-falcon?_s=PM:LAW

    (3) Chile’s first order of the coup was to pri­va­tize Social Secu­ri­ty:

    http://tinyurl.com/68dooeo

    Failed Neva­da Tea Par­ty can­di­date Shar­ron Angle in 2010 explic­it­ly laud­ed Pinochet and called for Chilean-style pri­va­ti­za­tion of Social Secu­ri­ty.

    Pres­i­dent Oba­ma seems to be will­ing to com­pro­mise Social Secu­ri­ty:

    http://www.washingtonpost.com/business/economy/in-debt-talks-obama-offers-social-security-cuts/2011/07/06/gIQA2sFO1H_story.html

    This isn’t just anoth­er Oba­ma capit­u­la­tion, but rather part of a pat­tern:

    http://content.usatoday.com/communities/theoval/post/2010/12/social-security-backers-blast-obamas-payroll-tax-cut/1

    Even though cen­trist Democ­rats as big as Charles Schumer are affirm­ing Dav­e’s & Robert Par­ry’s the­sis of eco­nom­ic sab­o­tage –

    http://www.huffingtonpost.com/2011/06/27/debt-ceiling-negotiations-deficit_n_885111.html#28_schumer-accuses-gop-of-sabotaging-economy-to-hurt-obama

    – nev­er­the­less, Oba­ma’s pro-GOP trend con­tin­ues with his snub of Bill Clin­ton’s very sound idea of defer­ring this cri­sis until the econ­o­my is bet­ter:

    http://www.huffingtonpost.com/2011/06/27/debt-ceiling-negotiations-deficit_n_885111.html#27_bill-clinton-proposes-deficit-deal-

    Oba­ma says NO to Bill Clin­ton’s idea:

    http://news.yahoo.com/obama-warns-against-short-term-deal-debt-limit-210135046.html

    Let the econ­o­my scream, indeed.

    (4) FTR #412, one of the best of FTR, is the first place I start with friends when try­ing to spread the word about FTR. I have hand­ed-out many CDs of FTR #412. This episode will now be a com­pan­ion piece in my future efforts to expand the FTR lis­ten­ing audi­ence.

    Posted by R. Wilson | July 6, 2011, 7:52 pm
  3. @R. Wil­son: Why am I not sur­prised that Nevada’s Shar­ron Angle would be pro­mot­ing that ass­hole Pinochet?
    Also, FTR #412 sounds real­ly fan­tas­tic as an intro. Got any oth­ers to sug­gest? I’m all ears. =)

    Posted by Steven | July 8, 2011, 2:49 pm
  4. Try FTR #651, The Engi­neer Has Wrecked The Train

    Posted by Sandra | July 13, 2011, 10:15 pm
  5. @Sandra: I appre­ci­ate the advice, thanks. I’ve been a lit­tle behind on get­ting the infor­ma­tion out(low hard dri­ve space is an issue at this point.), but I’m hop­ing to get back on it soon. =)

    Posted by Steven | July 15, 2011, 8:49 pm
  6. Key­word: “Super Con­gress”. Say g’night, Gra­cie.

    Posted by brownzeroed | July 23, 2011, 8:36 pm
  7. occu­py wall st is pop­u­lar but does not have the big mon­ey of the tea par­ty. now we have a ‘social­ist’ front vying against a fas­cist front. will it end like 1933?

    Posted by bob hope | October 23, 2011, 2:07 am

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