The following is from John Cassidy's Nov. 29 article in The New Yorker, "What Good Is Wall Street?" The subtitle is: "Much of what investment bankers do is socially worthless" (Duh!).
"A clear implication of [Lord Adair Turner's] argument is that many people in the City [London] and on Wall Street are the financial equivalent of slumlords or toll collectors in pin-striped suits. If they retired to their beach houses en masse, the rest of the economy would be fine, or perhaps even healthier." [Turner is the chairman of Britain's top financial watchdog, the Financial Services Authority; he recently published an article entitled "What Do Banks Do?"]
"Last year, while many people were facing pay freezes or worse, the average pay of employees at Goldman Sachs, Morgan Stanley, and JPMorgan Chase's investment bank jumped 27%, to more than $340,000. This figure includes modestly paid workers at reception desks and mail rooms, and it thus understates what senior bankers earn. At Goldman...nearly a thousand employees received bonuses of at least $1 million in 2009. Not surprisingly, Wall Street has become the preferred destination for the bright young people who used to want to start up their own companies, work for NASA, or join the Peace Corps. At Harvard this spring, about a third of the seniors with secure jobs were heading to work in finance. Ben Friedman, a professor of economics at Harvard, recently wrote an article lamenting 'the direction of such a large fraction of our most-skilled, best-educated, and most highly motivated young citizens to the financial sector.'"
"Paul Woolley...has set up an institute at the London School of Economics called the Woolley Centre for the Study of Capital Market Dysfunctionality. 'Why on earth should finance be the biggest and most highly paid industry when it's just a utility, like sewage [excellent comparison] or gas?...'It is like a cancer that is growing to infinite size, until it takes over the entire body.'" [Woolley had a career as an investment banker.]
"Rather than seeking the most productive outlet for the money that depositors and investors entrust to them, [banks] may follow trends and surf bubbles. These activities shift capital into projects that have little or no long-term value, such as speculative real-estate developments in the swamps of Florida. Rather than acting in their customers' best interests, financial institutions may peddle opaque investment products, like collateralized debt obligations. Privy to superior information, banks can charge hefty fees and drive up their own profits at the expense of clients who are induced to take on risks they don't fully understand--a form of rent seeking."
"The insidious culture that allowed Wall Street firms to peddle securities of dubious value to pension funds and charitable endowments remains largely in place."
"Perhaps the most shocking thing about recent events was not how rapidly the big Wall Street firms got into trouble but how quickly they returned to profitability and lavished big rewards on themselves. Last year, Goldman Sachs paid more than $16 billion in compensation, and Morgan Stanley paid out more than $14 billion. Neither came up with any spectacular new investments or produced anything of tangible value."
"During the credit boom of 2005 to 2007, profits and pay reached unprecedented highs. It is now evident that the bankers were being rewarded largely for taking on unacknowledged risks: after the subprime market collapsed, bank shareholders and taxpayers were left to pick up the losses. From an economy-wide perspective, this experience suggests that at least some of the profits that Wall Street bankers claim to generate, and that they use to justify their big pay packages, are illusory."
"On Wall Street and elsewhere in corporate America, insiders generally learn quickly how to game new systems and turn them to their advantage."
"There is...a blog, The Epicurean Dealmaker, written by an anonymous investment banker...In March, 2008, when some analysts were suggesting that the demise of Bear Stearns would lead to a change of attitudes on Wall Street, [the author] wrote: 'I, for one, think these bankers will be even more motivated to rape and pillage the financial system in order to rebuild their ill-gotten gains.' Seven months later, on the eve of the bank bailout, [he] opined, 'Let hundreds of banks fail. Let tens of thousands of financial workers lose their jobs and their personal wealth....The financial sector has had a really, really good run for a lot of years. It is time to pay the piper, and I, for one, have little interest in using my taxpayer dollars to cushion the blow.'"
"In September, 2009, addressing the popular anger about bankers' pay, [he] wrote [to his colleagues in the banking industry]: 'You mean to tell me your work as a ___ is worth more to society than a firefighter? An elementary school teacher? A combat infantryman in Afghanistan? [bad example!] A priest? Good luck with that.'"
"In the first nine months of 2010, the big six banks cleared more than $35 billion in profits."
"Despite all the criticism that President Obama has received lately from Wall Street, the Administration has largely left the great money-making machine intact. [Gee, there's a shock.] A couple of years ago, firms such as Citigroup, JPMorgan Chase, and Goldman Sachs faced the danger that the government would break them up, drive them out of some of their most lucrative business lines--such as dealing in derivatives--or force them to maintain so much capital that their profits would be greatly diminished. 'None of these things materialized,' [Robert] Altman [the chairman of Evercore] noted. 'Reforms and changes came in, but they did not have a transformative effect."
"Even after all that has happened, there is a tendency in Congress and the White House to defer to Wall Street...."
The NYT review of "All the Devils Are Here," by McLean and Nocera (Nov. 21), concludes: "What about the future? The next crisis probably won't be a housing bubble or an Internet craze, because those are fresh in our collective memory. But in some other corner of the economy, easy money is almost certainly beginning to feed hubris and greed. So the chances are, the devils will be coming back again."
December 20, 2010
December 08, 2010
Death Throes
Collapse is now a given; the pundits are busy working out the details. Check this out for chickens-coming-home-to-roost dept.:
http://www.tomdispatch.com/post/175327/tomgram%3A_alfred_mccoy%2C_taking_down_america/
http://www.tomdispatch.com/post/175327/tomgram%3A_alfred_mccoy%2C_taking_down_america/
December 04, 2010
Papering Over the Void
Law professor Ronald Dworkin has a short note in the current (9 December 2010) issue of the New York Review of Books on the midterm election of November. Marveling at the American voters’ ability to self-destruct by handing the GOP a landslide victory, he points out that their real dissatisfaction with the government—articulated most energetically by the Tea Party folks—is the feeling that they are losing the country, and they are desperate to take it back. “All their lives,” he writes,
“they have assumed that their country is [sic] the most powerful, most prosperous, most democratic, economically and culturally the most influential—altogether the most envied and wonderful country in the world. They are coming slowly and painfully to realize that that is no longer true; they are angry and they want someone to blame.”
“Our requests and demands are more and more ignored in foreign capitals,” he goes on; “our vaunted military power suddenly seems inept: we are unable to win any war anywhere.”
All this was very interesting for me to read. In The Twilight of American Culture I argued that we were in a state of collapse and had no real future as a nation—a provocative, perhaps even aggressive notion at the time. Ten years later, this argument is, at least among American intellectuals, no longer that controversial. Indeed, it’s becoming a truism, and Dworkin represents nearly mainstream thinking on the subject. I just found it satisfying to see it in print, with no editorializing about it: the US is finished, and that’s just the way it is. History did not work out in our favor; what could be more obvious? Let’s call a spade a spade, and not try to put a positive spin on it, for chrissakes.
If this is now being articulated clearly among the intellectual class, it is nevertheless being felt subjectively by a great majority of American citizens, as Dworkin points out. Although objectively speaking, they cannot reverse the decline, they nevertheless are pissed as hell about it, and are lashing out in a futile attempt to reverse history. It’s a purely emotional reaction, without an ounce of intelligent reflection behind it; but then the latter has never been America’s strong suit.
Just coincidentally, while I was reading that issue of the NYRB, I was also reading the work of the Japanese philosopher Keiji Nishitani (or as the Japanese would write it, Nishitani Keiji). Nishitani wrote a book in 1949 called Nihirizumu (Nihilism), which was subsequently translated into English as The Self-Overcoming of Nihilism. In the postwar period, Nishitani was concerned about what he regarded as the emptiness of Japanese culture, and regarded the various manifestations of the latter as “mere shadows floating over the void.” Nishitani, who died in 1990, was of the Kyoto School, a city associated with medieval Japan and the world of craft, meditation, and religious traditions. The “centering” of the latter was giving way to the commercial chaos of Tokyo, the world of Sony and Mitsubishi and the economic frenzy of modern Japanese life. Nishitani felt Japan’s only hope was to recover its traditions (of course the Japanese paid no attention to this, and are now in a major economic tailspin); he did not feel that either the American or Soviet model could solve the problem at the core. He wrote:
“Today non-European powers like the United States and the Soviet Union are coming to the fore; in any event, they are the players who have stepped on to the stage of history to open up a new era. But neither ‘Americanism’ nor ‘communism’ is capable of overcoming the nihilism that the best thinkers of Europe confronted with anxiety, the abyss of nihility [sic] that opened up in the spiritual depths of the self and the world. For the time being they are managing to keep the abyss covered over, but eventually they will have to face it.”
As we all know, the USSR had to face it in 1989-90; the Leninism and Stalinism of the previous seventy-odd years were, in Nishitani’s words, “mere shadows floating over the void.” America, for various reasons, had a more impressive run: about 400 years, I would say, of doing something very similar, if with a different ideology. Its crackup began around 1971, and has proceeded in a much slower manner than that of the Soviet Union. But there is no papering it over any longer, as both Dworkin and the Tea Party understand (if in rather different ways). The hollowness that haunted us from the beginning is now terrifyingly present; the Void, like Mephistopheles, has come to collect its due. As in the case of the USSR, there is no stuffing it this time around, and Mr. Obama has proven to be representative of our emptiness, not a remedy for it. He’s nothing more than a logo, a guy who is all dressed up with no place to go.
So now Russia has become a kind of wasteland, governed by crony capitalism and KGB-style autocracy. Our own wasteland will probably take the form of crony capitalism and American Idol vapidity. Orwell in the one case, Huxley in the other, might be another way of putting it. But there is finally no hiding from the reality of all this. “The wasteland grows,” proclaimed Nietzsche in Thus Spake Zarathustra; “woe to whomever conceals wastelands!” Wise words, sure to be ignored by the American public and government alike.
©Morris Berman, 2010
“they have assumed that their country is [sic] the most powerful, most prosperous, most democratic, economically and culturally the most influential—altogether the most envied and wonderful country in the world. They are coming slowly and painfully to realize that that is no longer true; they are angry and they want someone to blame.”
“Our requests and demands are more and more ignored in foreign capitals,” he goes on; “our vaunted military power suddenly seems inept: we are unable to win any war anywhere.”
All this was very interesting for me to read. In The Twilight of American Culture I argued that we were in a state of collapse and had no real future as a nation—a provocative, perhaps even aggressive notion at the time. Ten years later, this argument is, at least among American intellectuals, no longer that controversial. Indeed, it’s becoming a truism, and Dworkin represents nearly mainstream thinking on the subject. I just found it satisfying to see it in print, with no editorializing about it: the US is finished, and that’s just the way it is. History did not work out in our favor; what could be more obvious? Let’s call a spade a spade, and not try to put a positive spin on it, for chrissakes.
If this is now being articulated clearly among the intellectual class, it is nevertheless being felt subjectively by a great majority of American citizens, as Dworkin points out. Although objectively speaking, they cannot reverse the decline, they nevertheless are pissed as hell about it, and are lashing out in a futile attempt to reverse history. It’s a purely emotional reaction, without an ounce of intelligent reflection behind it; but then the latter has never been America’s strong suit.
Just coincidentally, while I was reading that issue of the NYRB, I was also reading the work of the Japanese philosopher Keiji Nishitani (or as the Japanese would write it, Nishitani Keiji). Nishitani wrote a book in 1949 called Nihirizumu (Nihilism), which was subsequently translated into English as The Self-Overcoming of Nihilism. In the postwar period, Nishitani was concerned about what he regarded as the emptiness of Japanese culture, and regarded the various manifestations of the latter as “mere shadows floating over the void.” Nishitani, who died in 1990, was of the Kyoto School, a city associated with medieval Japan and the world of craft, meditation, and religious traditions. The “centering” of the latter was giving way to the commercial chaos of Tokyo, the world of Sony and Mitsubishi and the economic frenzy of modern Japanese life. Nishitani felt Japan’s only hope was to recover its traditions (of course the Japanese paid no attention to this, and are now in a major economic tailspin); he did not feel that either the American or Soviet model could solve the problem at the core. He wrote:
“Today non-European powers like the United States and the Soviet Union are coming to the fore; in any event, they are the players who have stepped on to the stage of history to open up a new era. But neither ‘Americanism’ nor ‘communism’ is capable of overcoming the nihilism that the best thinkers of Europe confronted with anxiety, the abyss of nihility [sic] that opened up in the spiritual depths of the self and the world. For the time being they are managing to keep the abyss covered over, but eventually they will have to face it.”
As we all know, the USSR had to face it in 1989-90; the Leninism and Stalinism of the previous seventy-odd years were, in Nishitani’s words, “mere shadows floating over the void.” America, for various reasons, had a more impressive run: about 400 years, I would say, of doing something very similar, if with a different ideology. Its crackup began around 1971, and has proceeded in a much slower manner than that of the Soviet Union. But there is no papering it over any longer, as both Dworkin and the Tea Party understand (if in rather different ways). The hollowness that haunted us from the beginning is now terrifyingly present; the Void, like Mephistopheles, has come to collect its due. As in the case of the USSR, there is no stuffing it this time around, and Mr. Obama has proven to be representative of our emptiness, not a remedy for it. He’s nothing more than a logo, a guy who is all dressed up with no place to go.
So now Russia has become a kind of wasteland, governed by crony capitalism and KGB-style autocracy. Our own wasteland will probably take the form of crony capitalism and American Idol vapidity. Orwell in the one case, Huxley in the other, might be another way of putting it. But there is finally no hiding from the reality of all this. “The wasteland grows,” proclaimed Nietzsche in Thus Spake Zarathustra; “woe to whomever conceals wastelands!” Wise words, sure to be ignored by the American public and government alike.
©Morris Berman, 2010
November 26, 2010
November 23, 2010
Taking It Up a Notch
Journalist Ted Rall recently published a remarkable book, The Anti-American Manifesto. It is not remarkable for its all-too-familiar argument that the US is a violent nation, by now almost totally dysfunctional and in the hands of a plutocracy. Anyone familiar with my work, or (much more likely) that of Noam Chomsky, Chris Hedges, Chalmers Johnson et al. will not be shocked by this argument. What distinguishes Rall’s work is the explicit call for violent overthrow of the American government as the only serious way of addressing our situation. It is, thus, a courageous book; he worries that he could wind up in jail, or at the very least see his career destroyed, which is hardly a far-fetched scenario (informal censorship is very powerful in the US). But he is committed to putting the case before the American people (or more realistically, a tiny fraction thereof), that there is simply no reforming the system; that it is simply beyond repair, and needs to be replaced by something completely different.
Rall’s documentation of how violent we are and have been, and of our present decay and corruption, is quite elaborate, and certainly worth reading even if you already know the score. Thus on pp. 72-81 he compiles a table of wars the United States has been involved in over the period 1798-2007. It’s quite breathtaking, and would seem to confirm the argument I’ve made elsewhere that the country derives its identity via opposition, i.e. the creation and pursuit of enemies. (Cf. Walter Hixson’s thesis that war is at the center of American identity, as he presents it in The Myth of American Diplomacy.) The data of our dysfunction are supplied more or less randomly throughout the text: Americans live shorter lives than the citizens of almost every other developed country, ranking 42nd in terms of life expectancy; the top 10% of wage earners receive nearly 50% of all national income, and hold 80% of the nation’s wealth; a murder is committed every 31 minutes in the United States, and a rape every 5.8 minutes; more than 47 million of us live in poverty (with the definition of the term very conservatively drawn); more than 3% of the adult population is in jail, on probation, or on parole (actually, 1 out of every 31 people--!); 1 out of 5 of us is unemployed, with little prospect of altering our situation for years to come; the national debt is off the charts (see the previous post on this blog); and so on. His first conclusion, that we are in a state of advanced collapse, is by now a truism, though most of the country is in denial about this, or just simply blind to it.
Rall’s second conclusion is that there is no real political left to speak of, in the sense that it is, at best, a collection of wimps. Radical groups spend time selling newspapers on college campuses; organizations such as Democracy Now! or Common Dreams threaten no one, as the US government well knows. American college students do not call for replacing that government with something better, and if you go to the website of the CPUSA (American Communist Party), it says that it is not, and never was, “a supporter of violent revolution”—“as though impotence was something to brag about,” Rall wryly remarks. As for Michael Moore, an “agent non-provocateur,” “the best the official Left has to offer,” Rall regards the man as little more than a joke. Moore declares that the system is “fundamentally corrupt and undemocratic,” but keeps on rooting for Obama to rectify the situation. When one interviewer asked Moore, apropos of his film Capitalism: A Love Story, “Short of revolution, what can people do?”, Moore lamely replied that the purpose of the film was to open the audience to new ideas. He never questioned the interviewer’s premise, writes Rall, that a solution should fall short of revolution. “He thinks he’s dangerous,” Rall comments sarcastically.
This brings him to his third, and major, conclusion, that we must forsake the pseudo-left, start amassing an arsenal, and take over the government by means of violent uprising. This is how history works, he tells us, and of course he’s right (Gandhi excepted, I suppose). The problem I have with this, and which haunts the book, is the inability to say, precisely, who “we” is. This is the Achilles heel in the whole argument, an argument that Rall himself undercuts quite decisively at various points. For “we” seems to be basically, “the good guys”—folks like Rall, or the ones he calls “people of good will.” His definitions are as follows:
We: “Hard-working, underpaid, put upon, thoughtful, freedom-loving, disenfranchised, ordinary people”
They (i.e., the enemy): “Reactionary, stupid, overpaid, greedy, shortsighted, exploitative, power-mad, abusive politicians and corporate executives.”
And this is where things fall apart, because the stats don’t bear Rall out. By and large, Americans are not thoughtful and freedom-loving; instead, they are reactionary, stupid, greedy, shortsighted, and given a chance would like to be corporate executives raking in $50 million a year. They don’t vote for Nader or Kucinich; 99% of the electorate just wants the American Way of Life, which is stupid, greedy, shortsighted, etc., to continue. There is no interest in rebellion here: as Rall himself notes, the public collectively shrugged after the Supreme Court stole the election for the GOP in 2000, and didn’t care all that much that no WMD’s were found in Iraq three years later. Contrary to all common sense, 91% of Americans regard themselves as middle class (this from a 2008 Pew Charitable Trust poll). Americans, says Rall, believe that they are better than everyone else and so deserving of more than anyone else, and this is their religion—what he calls “the Cult of the Asshole.” So in 2009 CNN found that 50% approve of the use of “enhanced interrogation techniques,” including waterboarding—torture apparently being an effective way to ensure the continuation of our Asshole way of life. Rall writes that “we” have to educate people about what is wrong with the country, and teach them how to think—“propaganda comes first,” he says—but adds that “the ability to absorb it intelligently is required before propaganda can become effective.” Meanwhile, he admits that a large fraction of the American public is illiterate, and that (CBS News poll, 2004) 55% of Americans don’t believe that man evolved (actually, I think it’s closer to 67%). “How does one reason [with them]?”, he rightly asks. Hence, “The number of truly independent-minded Americans willing and able to commit to what can and should and must be done at this time is a fraction of a fraction of a fraction of a percent.”
Then what, Mr. Rall, are we talking about? There is an endless call in this book for the reader to “stand up and act.” Again, who is We? And what is it We should do? We and whose army? A revolution requires having the military on your side, or at least remaining neutral during the uprising, and the American military is generally conservative and committed to following the government’s orders. Rall’s prescription for action is that “we” form cells and cadres—talk to a friend, spread the word, develop a decentralized revolutionary network. Meanwhile, he again undercuts his argument by observing that it is the right wing in this country that is armed and ready to take action, not the (nonexistent) left. Anger, he admits, exists on the political right; the rest of the populace is docile. It is the right that is opening camps in rural areas, accumulating weapons, training new recruits, etc. They are, he points out, preparing for war, exchanging information about these weapons and stockpiles and discussing various strategies. Rush Limbaugh, it turns out, has actually endorsed such activity, whereas there is no influential figure on the left crazy enough to publicly endorse a similar left-wing mobilization. Nor is there any popular interest in it; that strikes me as being too obvious to warrant comment.
Rall’s description of the state of disintegration and decay of the United States is right on the money. Given the stupidity and docility of the American public that he himself documents, the most likely scenario is further disintegration and decay, until, like Rome or England, we drift away to nothing. That process is, in fact, well underway. And yet, Rall persists in the fantasy that American rage will boil over into left-wing revolution; that the segment of the population that is “in the know” will obtain guns and learn how to use them; that they will take out “the idiotic, incompetent, greedy, evil, and stupid people who are ruining our lives,” even if they have to work with racist skinheads in Idaho to accomplish their goals (which Rall says might be necessary). “Unless you choose to lay down and die,” he tells the reader, “there is no other choice.” Don’t worry, he concludes: millions will be with you.
Where these millions are going to come from, of course, is not clear, for this “Rall Call” ultimately has no basis in reality, and this by the author’s own admission. The author is honest in recognizing that there can be no substantive social change in this country short of revolution; and that no matter whom we elect, no matter how many books Noam Chomsky publishes or movies Michael Moore makes, none of it redistributes power, none of it makes any difference for how business and government are actually conducted. His strange, even bizarre, error is to think that this sad and stupefied population will somehow transform itself from sheep into (left-wing) wolves. When pigs fly, is the only thing I can say in response.
©Morris Berman, 2010
Rall’s documentation of how violent we are and have been, and of our present decay and corruption, is quite elaborate, and certainly worth reading even if you already know the score. Thus on pp. 72-81 he compiles a table of wars the United States has been involved in over the period 1798-2007. It’s quite breathtaking, and would seem to confirm the argument I’ve made elsewhere that the country derives its identity via opposition, i.e. the creation and pursuit of enemies. (Cf. Walter Hixson’s thesis that war is at the center of American identity, as he presents it in The Myth of American Diplomacy.) The data of our dysfunction are supplied more or less randomly throughout the text: Americans live shorter lives than the citizens of almost every other developed country, ranking 42nd in terms of life expectancy; the top 10% of wage earners receive nearly 50% of all national income, and hold 80% of the nation’s wealth; a murder is committed every 31 minutes in the United States, and a rape every 5.8 minutes; more than 47 million of us live in poverty (with the definition of the term very conservatively drawn); more than 3% of the adult population is in jail, on probation, or on parole (actually, 1 out of every 31 people--!); 1 out of 5 of us is unemployed, with little prospect of altering our situation for years to come; the national debt is off the charts (see the previous post on this blog); and so on. His first conclusion, that we are in a state of advanced collapse, is by now a truism, though most of the country is in denial about this, or just simply blind to it.
Rall’s second conclusion is that there is no real political left to speak of, in the sense that it is, at best, a collection of wimps. Radical groups spend time selling newspapers on college campuses; organizations such as Democracy Now! or Common Dreams threaten no one, as the US government well knows. American college students do not call for replacing that government with something better, and if you go to the website of the CPUSA (American Communist Party), it says that it is not, and never was, “a supporter of violent revolution”—“as though impotence was something to brag about,” Rall wryly remarks. As for Michael Moore, an “agent non-provocateur,” “the best the official Left has to offer,” Rall regards the man as little more than a joke. Moore declares that the system is “fundamentally corrupt and undemocratic,” but keeps on rooting for Obama to rectify the situation. When one interviewer asked Moore, apropos of his film Capitalism: A Love Story, “Short of revolution, what can people do?”, Moore lamely replied that the purpose of the film was to open the audience to new ideas. He never questioned the interviewer’s premise, writes Rall, that a solution should fall short of revolution. “He thinks he’s dangerous,” Rall comments sarcastically.
This brings him to his third, and major, conclusion, that we must forsake the pseudo-left, start amassing an arsenal, and take over the government by means of violent uprising. This is how history works, he tells us, and of course he’s right (Gandhi excepted, I suppose). The problem I have with this, and which haunts the book, is the inability to say, precisely, who “we” is. This is the Achilles heel in the whole argument, an argument that Rall himself undercuts quite decisively at various points. For “we” seems to be basically, “the good guys”—folks like Rall, or the ones he calls “people of good will.” His definitions are as follows:
We: “Hard-working, underpaid, put upon, thoughtful, freedom-loving, disenfranchised, ordinary people”
They (i.e., the enemy): “Reactionary, stupid, overpaid, greedy, shortsighted, exploitative, power-mad, abusive politicians and corporate executives.”
And this is where things fall apart, because the stats don’t bear Rall out. By and large, Americans are not thoughtful and freedom-loving; instead, they are reactionary, stupid, greedy, shortsighted, and given a chance would like to be corporate executives raking in $50 million a year. They don’t vote for Nader or Kucinich; 99% of the electorate just wants the American Way of Life, which is stupid, greedy, shortsighted, etc., to continue. There is no interest in rebellion here: as Rall himself notes, the public collectively shrugged after the Supreme Court stole the election for the GOP in 2000, and didn’t care all that much that no WMD’s were found in Iraq three years later. Contrary to all common sense, 91% of Americans regard themselves as middle class (this from a 2008 Pew Charitable Trust poll). Americans, says Rall, believe that they are better than everyone else and so deserving of more than anyone else, and this is their religion—what he calls “the Cult of the Asshole.” So in 2009 CNN found that 50% approve of the use of “enhanced interrogation techniques,” including waterboarding—torture apparently being an effective way to ensure the continuation of our Asshole way of life. Rall writes that “we” have to educate people about what is wrong with the country, and teach them how to think—“propaganda comes first,” he says—but adds that “the ability to absorb it intelligently is required before propaganda can become effective.” Meanwhile, he admits that a large fraction of the American public is illiterate, and that (CBS News poll, 2004) 55% of Americans don’t believe that man evolved (actually, I think it’s closer to 67%). “How does one reason [with them]?”, he rightly asks. Hence, “The number of truly independent-minded Americans willing and able to commit to what can and should and must be done at this time is a fraction of a fraction of a fraction of a percent.”
Then what, Mr. Rall, are we talking about? There is an endless call in this book for the reader to “stand up and act.” Again, who is We? And what is it We should do? We and whose army? A revolution requires having the military on your side, or at least remaining neutral during the uprising, and the American military is generally conservative and committed to following the government’s orders. Rall’s prescription for action is that “we” form cells and cadres—talk to a friend, spread the word, develop a decentralized revolutionary network. Meanwhile, he again undercuts his argument by observing that it is the right wing in this country that is armed and ready to take action, not the (nonexistent) left. Anger, he admits, exists on the political right; the rest of the populace is docile. It is the right that is opening camps in rural areas, accumulating weapons, training new recruits, etc. They are, he points out, preparing for war, exchanging information about these weapons and stockpiles and discussing various strategies. Rush Limbaugh, it turns out, has actually endorsed such activity, whereas there is no influential figure on the left crazy enough to publicly endorse a similar left-wing mobilization. Nor is there any popular interest in it; that strikes me as being too obvious to warrant comment.
Rall’s description of the state of disintegration and decay of the United States is right on the money. Given the stupidity and docility of the American public that he himself documents, the most likely scenario is further disintegration and decay, until, like Rome or England, we drift away to nothing. That process is, in fact, well underway. And yet, Rall persists in the fantasy that American rage will boil over into left-wing revolution; that the segment of the population that is “in the know” will obtain guns and learn how to use them; that they will take out “the idiotic, incompetent, greedy, evil, and stupid people who are ruining our lives,” even if they have to work with racist skinheads in Idaho to accomplish their goals (which Rall says might be necessary). “Unless you choose to lay down and die,” he tells the reader, “there is no other choice.” Don’t worry, he concludes: millions will be with you.
Where these millions are going to come from, of course, is not clear, for this “Rall Call” ultimately has no basis in reality, and this by the author’s own admission. The author is honest in recognizing that there can be no substantive social change in this country short of revolution; and that no matter whom we elect, no matter how many books Noam Chomsky publishes or movies Michael Moore makes, none of it redistributes power, none of it makes any difference for how business and government are actually conducted. His strange, even bizarre, error is to think that this sad and stupefied population will somehow transform itself from sheep into (left-wing) wolves. When pigs fly, is the only thing I can say in response.
©Morris Berman, 2010
November 16, 2010
The Age of Austerity
The current issue of Foreign Affairs has a remarkably sobering article by Roger Altman and Richard Haass entitled "American Profligacy and American Power" that seems, if I read it correctly, to spell out the death knell of the United States. In a word, they argue that we are going broke. The Bush tax cuts of 2001 and 2003, they point out, will reduce federal revenue by more than $2 trillion over ten years. This, and federal spending, make the Bush years the period of "the largest fiscal erosion in American history." (Note that Haass, who is President of the Council on Foreign Relations, was Director of Policy Planning at the State Dept. during 2001-3.)
It gets worse. The deficit for fiscal year 2009 was $1.6 trillion, or nearly 12% of the GDP--the largest in US history. The federal debt itself went from 35% of the GDP in 2000 to 62% of it in 2010. Given the corresponding rise in interest rates on all this, annual interest expense will begin to dwarf all domestic discretionary spending (including infrastructure, education, energy, and agriculture), requiring the Treasury to borrow $5 trillion annually to finance it. "Yet the real outlook for deficits and debt," the authors write, "is much worse than these forecasts." In fact, "The post-2020 fiscal outlook is downright apocalyptic." The Congressional Budget Office projects that official federal debt, excluding government-sponsored enterprises, could hit 110% of the GDP by 2025 and 180% by 2035. China is the biggest lender--i.e. purchaser of our debt--but it and the other lenders "have no strategic reason to continue holding US dollars." True, they would suffer losses if the dollar fell, but the consequences would be much worse for us.
The authors make it clear that US politicians have the choice of being proactive, moving to soften this scary trajectory to the extent that they can; or--more likely--fail to act, in which case the solution to the US out of control will be "a solution imposed on the United States by global capital markets." Things may be calm today (really?! I had the opposite impression), write Altman and Haass, but this "will not last in the face of the United States' disastrous financial outlook." Whether we act or don't act, in other words, there is no escaping a rather bleak fate. The only issue is the intensity of that fate, its degree of darkness. Either we attempt to manage our "transition into austerity," they say, or we don't; but either way, austerity is our future. We can expect smaller budgets, with major cuts in entitlements and domestic discretionary spending. The American citizen is going to suffer, and in a major way.
So far, so good; I mean, bad. But in terms of really understanding what has happened to us, it's at this point that the authors drift into a kind of doublespeak, while being oblivious to it. Consider the following two paragraphs:
"A related cost of the United States' debt has even greater consequences [than the transition to austerity]: the diminished appeal of the American model of market-based capitalism. Foreign policy is carried out as much by a country's image as it is by its deeds. And the example of a thriving economy and high living standards based on such capitalism was a powerful instrument of American power, especially during the Cold War, when the American model was competing with Soviet-style communism around the world.
"Now, however, the competition comes from Chinese-style authoritarianism: a top-heavy political system married to a directed and hybrid form of capitalism. The recent stellar performance of China's economy in the midst of Western economic troubles has enhanced the appeal of its system. Reinforcing this trend is the reality that the US approach (one associated with a system of little oversight and regulation) is widely seen as risk-prone and discredited after the recent financial crisis. If the United States is unable to address its own debt crisis and a solution is forced on it, then the appeal of democracy and market-based capitalism will take a further blow."
So the authors don't say that there is something fundamentally wrong with our (sham) democracy and market-based capitalism, of which our massive debt crisis is the proof. No, it's rather, in their eyes, that the fact that we somehow went off the rails will tarnish the reputation of this way of life. There is a failure to grasp that the American Way of Life, the dream of unlimited economic expansion, was a mistake and an illusion even in the heyday of its supposed success. We were never living in reality; we thought infinity was a reasonable goal. We also defined the good life purely in terms of money, of material accumulation--really, our only value--and this, more than any other single factor (in my view), has brought us to our knees.
And of course, the American public went along with all this, and with the notion that any form of socialism was evil. Indeed, it regarded any kind of social safety net as equivalent to communism, and regarded those who saw it differently as traitors. But in fact, the Soviet Union was hardly the only alternative model around; and here the authors make their second big mistake, for they put Europe into the same category as the US, and say that America's fate will be Europe's as well. But as Steven Hill shows in his book Europe's Promise, the European socioeconomic model--Scandanavia's in particular--is very different from America's, and Europe is doing fairly well with it. Thus the authors fail to connect the disintegration of our way of life with the inherent nature of that way of life, and in classic Cold War style, seem to believe it's either us or the Reds. As I have said over and over again on this blog, it's not just the man in the street who has been brainwashed. The "best and the brightest," to borrow an old phrase from David Halberstam, don't really understand the base-line problem of America, what America finally is, and that it did itself in by being precisely what it is. ("Character is destiny"--Heraclitus) The brightest, in short, are not really very bright at all (an argument most recently made, for US foreign policy, at least, by Derek Leebaert in Magic and Mayhem).
In a word, the authors seem to be blaming Bush Jr. for our no-exit situation, when the groundwork was laid with James Madison ("Extend the sphere," he wrote, and "you make it less probable that a majority of the whole will have a common motive to invade the rights of other citizens." In other words, any demands for a more equitable type of economy could be defused by opening up "surplus social space.") Historian Walter McDougall (Freedom Just Around the Corner) locates it nearly 200 years earlier, describing a commercial hustling mentality on the American continent that can be dated to the late sixteenth century. And because Altman and Haass have no understanding of the dialectical nature of history, and seem to believe that "a system of little oversight and regulation" is a recent phenomenon, they treat our current economic failure--basically, our collapse as a nation--not as the consequence of our very "success" (which turned around and bit us in the ass), but as something that descended accidentally, as it were--practically came out of nowhere; as a big surprise. The point, as the historian William Appleman Williams repeatedly made, is that we could have had a different type of nation, a social democratic one; but we made choices early on that precluded that, and then sit around wondering why we're screwed.
But we can nevertheless give credit where credit is due. Altman and Haass make no attempt to pull a rabbit out of a hat at the eleventh hour, as so many other pundits do; to paint a rosy picture that the American public is always so desperate to have. No: it's pretty obvious we are doomed, on a downhill slide of increasing suffering and austerity with only some type of "crisis management" possibly acting as a modifying influence. Nor do they think that we shall act in a proactive, intelligent way. Rather, circumstances will force us into austerity against our will, they suggest, and it will not be a pretty picture.
Kurt Vonnegut summed it up pretty well, some years ago: "There's a shit storm coming." Get out your umbrella.
It gets worse. The deficit for fiscal year 2009 was $1.6 trillion, or nearly 12% of the GDP--the largest in US history. The federal debt itself went from 35% of the GDP in 2000 to 62% of it in 2010. Given the corresponding rise in interest rates on all this, annual interest expense will begin to dwarf all domestic discretionary spending (including infrastructure, education, energy, and agriculture), requiring the Treasury to borrow $5 trillion annually to finance it. "Yet the real outlook for deficits and debt," the authors write, "is much worse than these forecasts." In fact, "The post-2020 fiscal outlook is downright apocalyptic." The Congressional Budget Office projects that official federal debt, excluding government-sponsored enterprises, could hit 110% of the GDP by 2025 and 180% by 2035. China is the biggest lender--i.e. purchaser of our debt--but it and the other lenders "have no strategic reason to continue holding US dollars." True, they would suffer losses if the dollar fell, but the consequences would be much worse for us.
The authors make it clear that US politicians have the choice of being proactive, moving to soften this scary trajectory to the extent that they can; or--more likely--fail to act, in which case the solution to the US out of control will be "a solution imposed on the United States by global capital markets." Things may be calm today (really?! I had the opposite impression), write Altman and Haass, but this "will not last in the face of the United States' disastrous financial outlook." Whether we act or don't act, in other words, there is no escaping a rather bleak fate. The only issue is the intensity of that fate, its degree of darkness. Either we attempt to manage our "transition into austerity," they say, or we don't; but either way, austerity is our future. We can expect smaller budgets, with major cuts in entitlements and domestic discretionary spending. The American citizen is going to suffer, and in a major way.
So far, so good; I mean, bad. But in terms of really understanding what has happened to us, it's at this point that the authors drift into a kind of doublespeak, while being oblivious to it. Consider the following two paragraphs:
"A related cost of the United States' debt has even greater consequences [than the transition to austerity]: the diminished appeal of the American model of market-based capitalism. Foreign policy is carried out as much by a country's image as it is by its deeds. And the example of a thriving economy and high living standards based on such capitalism was a powerful instrument of American power, especially during the Cold War, when the American model was competing with Soviet-style communism around the world.
"Now, however, the competition comes from Chinese-style authoritarianism: a top-heavy political system married to a directed and hybrid form of capitalism. The recent stellar performance of China's economy in the midst of Western economic troubles has enhanced the appeal of its system. Reinforcing this trend is the reality that the US approach (one associated with a system of little oversight and regulation) is widely seen as risk-prone and discredited after the recent financial crisis. If the United States is unable to address its own debt crisis and a solution is forced on it, then the appeal of democracy and market-based capitalism will take a further blow."
So the authors don't say that there is something fundamentally wrong with our (sham) democracy and market-based capitalism, of which our massive debt crisis is the proof. No, it's rather, in their eyes, that the fact that we somehow went off the rails will tarnish the reputation of this way of life. There is a failure to grasp that the American Way of Life, the dream of unlimited economic expansion, was a mistake and an illusion even in the heyday of its supposed success. We were never living in reality; we thought infinity was a reasonable goal. We also defined the good life purely in terms of money, of material accumulation--really, our only value--and this, more than any other single factor (in my view), has brought us to our knees.
And of course, the American public went along with all this, and with the notion that any form of socialism was evil. Indeed, it regarded any kind of social safety net as equivalent to communism, and regarded those who saw it differently as traitors. But in fact, the Soviet Union was hardly the only alternative model around; and here the authors make their second big mistake, for they put Europe into the same category as the US, and say that America's fate will be Europe's as well. But as Steven Hill shows in his book Europe's Promise, the European socioeconomic model--Scandanavia's in particular--is very different from America's, and Europe is doing fairly well with it. Thus the authors fail to connect the disintegration of our way of life with the inherent nature of that way of life, and in classic Cold War style, seem to believe it's either us or the Reds. As I have said over and over again on this blog, it's not just the man in the street who has been brainwashed. The "best and the brightest," to borrow an old phrase from David Halberstam, don't really understand the base-line problem of America, what America finally is, and that it did itself in by being precisely what it is. ("Character is destiny"--Heraclitus) The brightest, in short, are not really very bright at all (an argument most recently made, for US foreign policy, at least, by Derek Leebaert in Magic and Mayhem).
In a word, the authors seem to be blaming Bush Jr. for our no-exit situation, when the groundwork was laid with James Madison ("Extend the sphere," he wrote, and "you make it less probable that a majority of the whole will have a common motive to invade the rights of other citizens." In other words, any demands for a more equitable type of economy could be defused by opening up "surplus social space.") Historian Walter McDougall (Freedom Just Around the Corner) locates it nearly 200 years earlier, describing a commercial hustling mentality on the American continent that can be dated to the late sixteenth century. And because Altman and Haass have no understanding of the dialectical nature of history, and seem to believe that "a system of little oversight and regulation" is a recent phenomenon, they treat our current economic failure--basically, our collapse as a nation--not as the consequence of our very "success" (which turned around and bit us in the ass), but as something that descended accidentally, as it were--practically came out of nowhere; as a big surprise. The point, as the historian William Appleman Williams repeatedly made, is that we could have had a different type of nation, a social democratic one; but we made choices early on that precluded that, and then sit around wondering why we're screwed.
But we can nevertheless give credit where credit is due. Altman and Haass make no attempt to pull a rabbit out of a hat at the eleventh hour, as so many other pundits do; to paint a rosy picture that the American public is always so desperate to have. No: it's pretty obvious we are doomed, on a downhill slide of increasing suffering and austerity with only some type of "crisis management" possibly acting as a modifying influence. Nor do they think that we shall act in a proactive, intelligent way. Rather, circumstances will force us into austerity against our will, they suggest, and it will not be a pretty picture.
Kurt Vonnegut summed it up pretty well, some years ago: "There's a shit storm coming." Get out your umbrella.
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