Krugman and the Truth About the 1% That Can't Be Spoken

I have been participating in OWS with increased intensity over the course of the last two months. The defining moment for me was the illegal and brutal eviction on November, 15. One of the things that I liked about the Freedom Plaza encampment was the Think Tank discussion: people from all walks of life gathering together in a public space discussing openly about the inadequacies of capitalism.

Today's New York Times op-ed by Paul Krugman The Post-Truth Campaign reminded me of these discussions particularly in terms of certain ideological tenets that seem so engrained into our collective unconscious even in the face of the starkest of realities. In this regard, Krugman opens his essay by positing the following:

Suppose that President Obama were to say the following: “Mitt Romney believes that corporations are people, and he believes that only corporations and the wealthy should have any rights. He wants to reduce middle-class Americans to serfs, forced to accept whatever wages corporations choose to pay, no matter how low.”

Krugman goes on to say that such a statement would be universally condemned by almost everyone, including himself, and much of the essay is dedicated to creating a moral equivalence between the statement above and the continuous charges coming from Republicans about Obama being a redistributive socialist. He continues by wondering why the latter statements do not meet a condemnation similar to that which the former would receive if Obama, or anyone else for that matter, would dare uttering it.

As the title of his piece summarizes, Krugman describes this type of environment the Post-Truth Campaign.

While Krugman should be thanked for putting his finger on a praxis that has become pretty much the modus operandi of political discourse, his underlying ideological tenets don't seem to alert the Princeton economist to the fact that he has lured himself into an logical fallacy. If the idea of a post-truth political environment is assumed to be true – as I believe it has been for at least a decade – then Obama should be able to say that Mitt Romney, the embodiment of the 1%, wants to reduce middle-class Americans to serfs without causing any particular uproar in the establishment community. For this reason, the fact that he can't say it is proof that the statement is true: the 1% wants to reduce middle-class Americans to serfs, forced to accept whatever wages corporations choose to pay, no matter how low.

One of the primary goals of capitalism is to reduce labor costs. According to Marx's concept of surplus value, the lower the wages the higher the profits for capital. This is why the 1% has historically being opposed to unions or anyone and anything (i.e. minimum wage legislation) that would champion workers' wages. In the post-truth age, the increase of surplus value is called an increase in productivity. This is an euphemism for laying off workers while putting the extra work on the shoulders of remaining workers who must work longer ours without having their salaries raised.

If we take this tendency of capitalism to maximize profit by minimizing labor costs to its logical conclusion, it follows that the ideal wage from a capitalist's standpoint is zero. And what do we call someone who works for free or perhaps for simply food and shelter? That is a serf or, in other words, a slave. For this reason, it can be said that serfdom and slavery are an intrinsic tendency of capitalism because they represent the ultimate zero-level labor cost.

Yet, many in this country – including Krugman and those who I sometimes happened to converse with in the Think Tank discussions at Freedom Plaza – seem to not be able to grasp this simple reality. It's as if it is not possible for many people to accept that in America there are people, the 1%, who would have no qualms to return this country to the middle-ages or even earlier, more brutal forms of slavery. This resistance is perhaps rooted in the positivist idea of inevitable human progress, the idea that we could never go back to certain forms of barbarism. Yet, history is full of examples of regress – the middle-ages being only one the most glaring. Even Krugman admitted so much in an op-ed earlier this year when he wrote that the country was well on its way of becoming a banana republic.

The fact is that many Americans still seem unable to accept that given the chance the 1% would gladly turn this country into a Honduran style republic, where a tiny oligarchy which controls most of the wealth uses the government and death squads as a tool to repress a population of mostly peasants. Yet, the signs of this coming reality are all around us if one only cares to look:

– The absolute impunity of Wall Street executives in the greatest plunder of wealth in human history.

– A defense (sic) bill that enables the executive to deploy the military in the United States to arrest and detain Americans indefinitely.

– A 1% whose wealth has reached 1929 levels of concentration and which is thrusting the country into a depression.

I could go on and on but the point is simple: rather than being an imaginary statement, the truth about the 1% that can't be spoken is that they sense an historic opportunity and they are pursuing it with a vengeance: turning working people into serfs. Krugman even alluded to that much when he said that the Troika is now trying to destroy the European dream. On this, economist Dean Baker concurs. The truth is that, if they succeed, we are next.

Cornel West on Obama

First posted on Daily Kos on May 16, 2011.

In a interview with Chris Hedges published on May 16 on truthdig, moral philosopher and democratic intellectual Cornel West speaks openly about his feelings of disillusionment about Barak Obama. While feeling misled by the Obama phenomenon, West also says that he needs to take responsibility for "reading into it more than was there."

University Professor of African American Studies and Religion at Princeton University Cornell West is no stranger to the now president of the United States, having done 65 campaign events in support for Obama during the 2008 presidential campaign. But after Obama was elected, he began to realize that things in Washington were not going to be as different as many of Obama's supporters liked to believe:

I was thinking maybe he has at least some progressive populist instincts that could become more manifest after the cautious policies of being a senator and working with Lieberman as his mentor. But it became very clear when I looked at the neoliberal economic team. The first announcement of Summers and Geithner I went ballistic. I said, ‘Oh, my God, I have really been misled at a very deep level.’ And the same is true for Dennis Ross and the other neo-imperial elites. I said, ‘I have been thoroughly misled, all this populist language is just a facade. I was under the impression that he might bring in the voices of brother Joseph Stiglitz and brother Paul Krugman. I figured, OK, given the structure of constraints of the capitalist democratic procedure that’s probably the best he could do. But at least he would have some voices concerned about working people, dealing with issues of jobs and downsizing and banks, some semblance of democratic accountability for Wall Street oligarchs and corporate plutocrats who are just running amuck. I was completely wrong.

West continues:

It became very clear to me as the announcements were being made that this was going to be a newcomer, in many ways like Bill Clinton, who wanted to reassure the Establishment by bringing in persons they felt comfortable with and that we were really going to get someone who was using intermittent progressive populist language in order to justify a centrist, neoliberalist policy that we see in the opportunism of Bill Clinton. It was very much going to be a kind of black face of the DLC.

Speaking about his sense of betrayal, West feels that Obama has been swallowed by the oligarchic mentality which pervades Washington:

This was maybe America’s last chance to fight back against the greed of the Wall Street oligarchs and corporate plutocrats, to generate some serious discussion about public interest and common good that sustains any democratic experiment. We are squeezing out all of the democratic juices we have. The escalation of the class war against the poor and the working class is intense. More and more working people are beaten down. They are world-weary. They are into self-medication. They are turning on each other. They are scapegoating the most vulnerable rather than confronting the most powerful. It is a profoundly human response to panic and catastrophe. I thought Barack Obama could have provided some way out. But he lacks backbone.

Finally, while not excluding voting for Obama again as a last resort, West contends that perhaps the only hope for a better future rests in third party formations and grassroots movements as well as acts of civil disobedience:

We have got to attempt to tell the truth, and that truth is painful. It is a truth that is against the thick lies of the mainstream. In telling that truth we become so maladjusted to the prevailing injustice that the Democratic Party, more and more, is not just milquetoast and spineless, as it was before, but thoroughly complicitous with some of the worst things in the American empire. I don’t think in good conscience I could tell anybody to vote for Obama. If it turns out in the end that we have a crypto-fascist movement and the only thing standing between us and fascism is Barack Obama, then we have to put our foot on the brake. But we’ve got to think seriously of third-party candidates, third formations, third parties. Our last hope is to generate a democratic awakening among our fellow citizens. This means raising our voices, very loud and strong, bearing witness, individually and collectively. Tavis [Smiley] and I have talked about ways of civil disobedience, beginning with ways for both of us to get arrested, to galvanize attention to the plight of those in prisons, in the hoods, in poor white communities. We must never give up. We must never allow hope to be eliminated or suffocated.

In the end, Cornel West, has come to the conclusion that Barack Obama did not turn out to be the hope and change that most of his supporters around the world would have liked him to be. As noted earlier, West takes responsibility for projecting a lot of his hopes and aspirations onto a person who, after all, never pretended to be anything other than a centrist pro-corporate Democrat.

On the other hand, it is good that West and other intellectuals are waking up in light of the upcoming presidential election. Perhaps, this awakening on the left will force Obama and the Democrats to do something more than simply pay lip service to a base which has been mostly used and abused ever since Barack Obama has come into office.

Obama: Old Wine In New Bottle

As I observe the moral implosion of the Democratic leadership, I keep thinking of an essay by Noam Chomsky commenting on the Clinton presidency. In the 1996 essay, titled "Old Wine in New Bottles: A Bitter Taste," Chomsky expands on Paul Krugman's assumption that "bad ideas flourish because they are in the interest of powerful groups." In this case, Krugman was talking about international economic development and specifically about New Zealand; but Chomsky extrapolated this conclusion and applied it to corporate capitalism in general.

In a way, Chomsky's insight presaged Naomi Klein's "Shock Doctrine," and today, it is easy to see how Obama is simply continuing the regressive policies systematized by Clinton, and put on hyperdrive by Bush. In the essay, Chomsky restates Krugman's conclusion by saying that "the "bad ideas" may not serve the "expressed goal," but they typically turn out to be very good ideas for their proponents." The current health care reform bill is a perfect example of such bad ideas.

The left is understandably dismayed at the form this health care bill is taking, but if we look at its unfolding under the prism of Chomsky's and Klein's analysis, we can see how, in the end, it is all according to plan. Sure, the "realists" will tell you that this is the best thing we can get in the current climate, but their thinking is predicated on an old dichotomy that sees the Democratic party leadership in opposition to the Republican leadership.

Unfortunately, such dichotomy is all for show and nothing more. And all we really need in order to expose the theatrical aspect of this purported opposition between the Republican party and the Democratic party is the following picture:


This is not a portrait of people who disagree with each other. This is the portrait of five masters of the universe showing unity of mind and purpose.

Returning to the health care bill and Chomsky's analysis, he goes on to point out some regularities in the policies imposed by international capital onto unwilling populations around the world, the first being that:

[T]he designers seem to come out quite well, though the experimental subjects, who rarely sign consent forms, quite often take a beating.

The current health care bill will do just that: let the designers (the health insurance companies) come out quite well with the government mandating 30 million new customers to purchase unregulated products from a cartel of colluding private corporations. In this case, we the people are also one of the "rare" examples where we did sign a consent form in the form of a ballot. Unlike other countries around the world who have no say in what the World Bank tells them to do, we actually put the people who are screwing us, and the rest of the world, in charge.

The fact that the current bill does not guarantee any real form of competition in the health care system brings me to another point that Chomsky makes later on in the essay:

Free market doctrine comes in two varieties. The first is the official doctrine that is taught to and by the educated classes, and imposed on the defenceless. The second is what we might call "really existing free market doctrine": For thee, but not for me, except for temporary advantage; I need the protection of the nanny state, but you must learn responsibility under the harsh regimen of "tough love." Those in a position to make choices typically adopt the second version of free market doctrine, the one that has been a prerequisite to development, so the historical record suggests, though not a sufficient condition for it.

This is not only what is happening now with the health care bill, but also what has happened with the TARP bill and the rescue of big banks. The common term would be corporate welfare, or corporate socialism, or corporatism (can you say, fascism?). Maybe, but you get the point. International corporations are getting their way in the world, and while until Clinton the American people where under the assumption that this system also benefited them, now it is clear that those days were simply a rehearsal for what is coming to pass now.

Once these bait and switch techniques have been refined in New Zealand, Latin America, Africa and such, they can be applied to the much more sophisticated western populations. And so, today we see Obama and the Democrats touting this health care bill as a great thing, when they can't even look at the camera with a straight face because they know that this will only drive more people into bankruptcy and destitution. Matt Taibbi has done a great job in this regard by exposing Obama and the Democrats in "Obama's Big Sellout."

This type of attitude of our political class goes also to show their hubris. The Democrats believe that working people and progressives have nowhere to turn to, and thus they are confident that no matter how bad they behave, people will eventually hold their nose and vote for them as the lesser of two evils. As Chomsky points out:

[D]emocracy is a nuisance to be ignored as long as possible, and that free enterprise means that the public pays the costs under various guises, bearing the risks if things go wrong, while profit is privatized. And in pursuit of these ends, decision-making is to be transferred as much as possible from the public arena to unaccountable private tyrannies, and "locked in" by treaties that undermine the potential threat of democracy.

AIG bailout, anyone?

This is exactly what is happening today, and while under Clinton it was still under most people's radar, and only perceptive people like Chomsky and some other few could see it, today is all done in the open, by dangling the specter of Depression in front of the American people. In the meantime, we are in a Depression; at least those of us who live in the real world. The real unemployment is probably close to 20% since the government, from Clinton onward, has been fudging the figures to the point that they are meaningless. The term jobless recovery is also something that is becoming an euphemism for the government bailing out the rich while letting everyone else hanging out to dry.

In conclusion, Chomsky's essay shows us how Clinton then and Obama now are simply new bottles for the same old wine. And if this wine tasted bitter in 1996, now it makes people want to puke. That's why people are getting mad, and throwing things at the likes of Bush and Berlusconi, or why there are clashed in Copenhagen as I write. People are sick and tired of vampire like corporations sucking them dry and they are speaking out. For this reason, while things seem to be going from bad to worse, and even though the political process is deadlocked, I see hope for the future. Not the Obama empty promise type of hope, but the hope that people are once more taking their destiny into their own hands as it happened during the Vietnam war.

On this, I'll leave the last word to Howard Zinn, who on Bill Moyers last week so eloquently said:

[T]hink for yourself. Don't believe what the people up there tell you. Live your own life. Think your own ideas. And don't depend on saviors. Don't depend on the Founding Fathers, on Andrew Jackson, on Theodore Roosevelt, on Lyndon Johnson, on Obama. Don't depend on our leaders to do what needs to be done... [P]eople should defy the rules if they think they're doing the right thing.