Corporate New Deal

"For economic shock therapy to be applied without restraint -- as it was in Chile in the seventies, China in the late eighties, Russia in the nineties and the U.S. after September 11, 2001 -- some sort of additional major collective trauma has always been required, one that either temporarily suspended democratic practices or blocked them entirely. This ideological crusade was born in the authoritarian regimes of South America, and in its largest newly conquered territories -- Russia and China -- it coexists most comfortably, and most profitable, with an iron-fisted leadership to this day." ---- The Shock Doctrine - The Rise of Disaster Capitalism, by Naomi Klein

Just four years ago, Naomi Klein's best selling book, The Shock Doctrine, accurately and vividly described what's going on in America today. It was four years ago, but she was able to predict the future; she saw the writing on the wall. What we've been witnessing in Wisconsin the last couple of weeks is the Shock Doctrine -- "disaster capitalism" -- occurring on a smaller scale.  

It's not a coincidence that last week's revelation that the U.S. Army illegally ordered a team of soldiers specializing in "psychological operations" to manipulate visiting American senators into providing more troops and funding for the war in Afghanistan. The program for CIA psychological torture techniques originally developed after the Second World War and extended into the 1960s. In the U.S., at least two lines of thought converged; one was about how to alter people's minds without leaving marks and scars, and the other was about what was the best way of organizing a given economy. The first grew out of experiments in psychological torture (electroshock therapy). The second came from the mind of Milton Friedman. Both embrace working from a "blank slate" and starting all over again.  

The premise of Ms. Klein's book, brilliant and fascinating, and at the same time painfully simple in its argument and revelation, argues that free market fundamentalism has risen to distinction in some countries because it was pushed through while the citizens were reacting to disasters or upheavals; that some crises may have been created with the intention of being able to push through unpopular reforms in their wake. In other words, taking advantage of a major disaster -- natural, as in the case of Hurricane Katrina, or manmade, as with the invasion and occupation of Iraq -- to adopt radical economic policies that the population would be less likely to accept under normal circumstances. The well-rehearsed and carefully arranged attacks on the public domain in the aftermath of catastrophic events, combined with the "treatment of disasters as exciting market opportunities", Ms. Klein coined as "disaster capitalism". 

Milton Friedman, an economist and professor at the University of Chicago, and economic advisor to President Ronald Reagan, observed that "only a crisis -- actual or perceived -- produces real change. When the crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable." This is exactly what has been happening in Wisconsin.

Public union employees, their friends, families, and students sympathetic to their cause, have been demonstrating for weeks because the newly installed governor, Scott Walker, claimed he needed to deny them their collective bargaining rights in order to balance the state budget -- despite the fact the workers expressed their willingness to concede completely to the governor's wage and benefit concessions. With several budget crises consuming the country, and Governor Walker's own state budget in arrears due to giant corporate give-aways just weeks before, this planted the seeds for the quintessential rock 'em sock 'em, kick 'em while they're down, corporate-government forcible takeover that's so quintessential disaster capitalism. As economist Paul Krugman observed, "What’s happening in Wisconsin is, instead, a power grab — an attempt to exploit the fiscal crisis to destroy the last major counterweight to the political power of corporations and the wealthy. And the power grab goes beyond union-busting. The bill in question is 144 pages long, and there are some extraordinary things hidden deep inside." Let's take a peek. 

Aside massive cuts in health coverage for low-income families, there's this: “Notwithstanding ss. 13.48 (14) (am) and 16.705 (1), the department may sell any state-owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state. Notwithstanding ss. 196.49 and 196.80, no approval or certification of the public service commission is necessary for a public utility to purchase, or contract for the operation of, such a plant, and any such purchase is considered to be in the public interest and to comply with the criteria for certification of a project under s. 196.49 (3) (b).” In other words, the bill would allow for the selling of state-owned power plants without bids and without concern for the legally-defined public interest. Privatize what's owned by the state...the people...and sell it off.

In other words, Governor Walker took Professor Friedman's legacy to heart, acted swiftly and decisively, and attempted to ramrod a bill through the state legislature that would eliminate public unions in the state and, at the same time, impose by law rapid and irreversible change. It's a microeconomic version of what occurred in the aftermath of the U.S. Iraqi invasion, essentially no different than what happened in the soggy remains of New Orleans after Katrina, and so similar to the predatory capitalist racketeering that devoured the former Soviet Union after its collapse in the early '90s. 

The conservative trademark priorities to eliminate collective bargaining, privatize public-owned infrastructure and commons, and the slashing of social spending to the detriment of those who need it most, is all here. This is how the Shock Doctrine takes control, and unless it's stopped in its tracks and prevented from spreading beyond the boundaries of Wisconsin, you can bet it's coming to a town near you.
 

Fed's Backdoor Giveaway

If you've been reading this blog for any time at all, you undoubtedly realize the passion I feel when it comes to our disappearing democracy. I've pretty much summed up the fundamental reason for most, if not all, of the problems that paralyze this republic. I've pointed out, adequately I hope, and have inferred that no matter the size of government, the same secretive and underlying manipulators will still control the reins of government.

Two years ago, Bloomberg News dropped a bombshell about how the American taxpayer, through Federal Reserve lending programs and guarantees, was being placed in the unenviable position of being the underwriter for over $9 trillion...yes, that's TRILLION...to the largest banks, investment houses, and multinational corporations in the world. Keep in mind, only the $787 billion stimulus legislation that became law early in 2009, the $700 billion Troubled Asset Relief Program (TARP) signed into law in October of 2008, and the $168 billion in tax cuts and rebates enacted in early 2008 had been voted on by congress to that point.

These trillions of dollars were "off balance sheet" transactions. Where the money went, exactly to whom, for what, and with what assets held as collateral, remains a mystery to this day, at least to the public, and at least to then-U.S. Congressman Allan Grayson. At a hearing early last May, Federal Reserve Inspector General Elizabeth Coleman was questioned during testimony to account for the $9 trillion in off-balance sheet transactions (which comes to approximately $30,000 for each man, woman and child in the U.S.). After a lot of dancing and hemming-and-hawing, she answered that no one at the Federal Reserve knows or is keeping track of where the money has gone.    

As Senator Bernie Sanders mentioned in an article early in December, "...the $700 billion Wall Street bailout signed into law by President George W. Bush turned out to be pocket change compared to the trillions and trillions of dollars in near-zero interest loans and other financial arrangements the Federal Reserve doled out to every major financial institution in this country. Among those are Goldman Sachs, which received nearly $600 billion; Morgan Stanley, which received nearly $2 trillion; Citigroup, which received $1.8 trillion; Bear Stearns, which received nearly $1 trillion, and Merrill Lynch, which received some $1.5 trillion in short term loans from the Fed."

The great giveaway didn't end there. Prior to January 21, 2009, the day the current administration took over the "official" reigns of government, special loans and dispensation to other non-bank multinational corporations peaked at $348.2 billion. Among the beneficiaries were Toyota Motor Corp. ($4.6 billion), Harley-Davidson Inc. ($2.3 billion) and Verizon Communications Inc. ($1.5 billion). General Electric Company used the Fed as its own revolving charge account, tapping the Fed a dozen times ($16.1 billion). Supposedly, in its scramble to keep the economy from collapsing, the Fed created the Commercial Paper Funding Facility, or CPFF, which tried to ensure that banks and industrial companies had the short-term loans they needed to fund everyday operations. GE was the biggest recipient.

Bloomberg News brought a lawsuit against the Board of Governors of the Federal Reserve System to force the Board to reveal the identities of firms for which it has provided guarantees and won at the trial level. The Fed appealed the decision, and on August 27, 2010, the U.S. Court of Appeals agreed to delay implementation of the ruling until Oct. 19 so that the Fed may appeal to the Supreme Court. Given the composition of the current high court, specifically the Gang of Five right-wing judicial outlaws who gave corporations unlimited influence over our elections just over one year ago, it's almost a sure bet that Bloomberg News will be on the losing end when a decision is handed down. As of today, a court date has not been scheduled. 

But the fun didn't end there. Between October 27, 2008 and August 6, 2009 (well into the Obama "watch") the Fed spent $350 billion in taxpayer funds to save thirty-five foreign banks and multinational corporations. The thirty-five were UBS, Dexia SA, BNP Paribas, Barclays PLC, Royal Bank of Scotland Group, Commerzbank AG, Danske Bank A/S, ING Groep NV, WestLB, Handelsbanken, Deutsche Post AG, Erste Group Bank AG, NordLB, Free State of Bavaria, KBC, HSH Nordbank AG, Unicredit, HSBC Holdings PLC, DZ Bank AG, Republic of Korea Rabobank, Sumitomo Mitsui Banking Corporation, Banco Espirito Santo SA, Bank of Nova Scotia, Mizuho Corporate Bank, Ltd., Syngenta AG, Mitsui & Co Ltd., Bank of Montreal, Caixa Geral de Depósitos, Mitsubishi UFJ Financial Group, Shinhan Financial Group Co Ltd., Mitsubishi Corporation, Aegon NV, Royal Bank of Canada, and last, but not least, Sumitomo Corporation. Amazing, huh? Is there something wrong with this picture? The fact that our central bank -- supposedly having the power and chosen role to do so -- doled out billions of dollars to foreign banking institutions, is not only unconstitutional but may also be treasonous.   

  

So the question, the "$9 trillion dollar question" to be exact, remains: Where did the money go, and why? What power, instilled by We the people, gave the Federal Reserve the right to loan and guarantee loans to...well, most of the largest banking institutions worldwide? And finally, the question needs to be asked: Who benefited? It certainly wasn't Main Street, U.S.A., was it? We, the People, ultimately came up the biggest loser.

Why do the American people, time and time again, allow themselves to be taken for the collective fool? Why is it, while tens-of-thousands have taken to the streets of major cities of Greece and France to protest government-imposed austerity programs, the real looters steal away virtually in the daylight, and while the cauldrons of revolution boil over in places such as Tunisia and Egypt, the American people continue to sit on their hands and hope...and pray...that a better day will be just down the road? Is our mindset so colonized, so propagandized, that we can't discern what is happening right in front of us? 

Matt Taibbi explained it best in a piece about our peasant mentality: "You know you’re a peasant when you worship the very people who are right now, this minute, conning you and taking your shit. Whatever the master does, you’re on board. When you get frisky, he sticks a big cross in the middle of your village, and you spend the rest of your life praying to it with big googly eyes. Or he puts out newspapers full of innuendo about this or that faraway group and you immediately salute and rush off to join the hate squad.  A good peasant is loyal, simpleminded, and full of misdirected anger.  And that’s what we’ve got now, a lot of misdirected anger searching around for a non-target to mis-punish . . . can’t be mad at AIG, can’t be mad at Citi or Goldman Sachs. The real villains have to be the anti-AIG protesters!" Mr. Taibbi's right.  

Today, during the 202nd birthday celebration of probably this country's finest president, we're reminded of just how great a leader Abraham Lincoln was. He warned us about the reign of corporate power and the corruption in high places that would follow, and he correctly saw that the moneyed interests would perpetuate its reign by working upon the prejudices of the people, fleecing our treasure and stealing our republic. Chris Hedges, in last Sunday's column articulating the way empire thrives and prospers, said "All centralized power, once restraints and regulations are abolished, once it is no longer accountable to citizens, knows no limit to internal and external plunder. The corporate state, which has emasculated our government, is creating a new form of feudalism, a world of masters and serfs. It speaks to those who remain in a state of self-delusion in the comforting and familiar language of liberty, freedom, prosperity and electoral democracy."

Mr. Lincoln foretold all this, and it's my opinion that's the true reason he lost his life to a "lone assassin's" bullet. Those in position, who stand for We the People, who speak out against corporate power and domination, all too frequently do.

Justices Thomas and Scalia Should Have Recused Themselves...But Didn't

This past weekend, at the exclusive Rancho Las Palmas resort near Palm Springs, California, the infamous Koch brothers hosted a gala for some of the largest titans of industry and government; the influential and the moneyed. It wasn't necessarily a celebratory gathering to praise and applaud those who participated in a hard-fought election, but rather a secretive planning and strategizing session for the prominent conservative elected (and un-elected) officials, donors and strategists that have been shaping American political thought and policy the last few years. The twice-a-year gathering has been framed as a session "to review strategies for combating the multitude of public policies that threaten to destroy America as we know it."

It's not known whether two Supreme Court justices, namely Antonin Scalia and Clarence Thomas, were attending the Rancho Las Palmas festivities, but it is known that both have had dealings with David and Charles Koch in the past and have been guests of the notorious pair at similar occasions. This has raised red-flags, appropriately so, by legal ethicists and other groups who want to see more disclosure. Although supreme court justices are not barred, like federal judges, from appearing at partisan events, they are ethically-bound from attending overt political planning functions. Obviously, their presence at these conferences greatly raises questions of transparency and, for some, broader concerns about judicial independence.

Last spring, in a letter to Attorney General Eric Holder and signed by Common Cause President & CEO Bob Edgar and Vice President Arn Pearson, they asked that the Justice Department promptly investigate whether Justices Thomas and Scalia should have recused themselves from the Citizens United case. If the Department finds sufficient grounds for disqualification of either Justice, they have requested that the Solicitor General file a motion with the full Supreme Court seeking to vacate the judgment.

Although sufficient evidence may be unattainable, questions included in the petition include: (1) Would a reasonable person question the impartiality of Justices Thomas and Scalia based on their attendance at secretive Koch Industries retreats?, and (2) Does attendance of a closed-door Koch Industries retreat constitute political activity? Common Cause argues, “We believe it is inappropriate for a Supreme Court judge to be ‘featured’ at or attend closed-door strategy meetings with political donors, corporate CEOs, candidates and political officials, and thereby lend the prestige of their position to the political goals of that event” and “A reasonable person would question the impartiality of Justices Thomas and Scalia in the Citizens United case based on their attendance at political strategy meetings sponsored by a corporation that raises and spends millions to defeat Democrats and elect Republicans”.

And there's another fly in the ointment that may add credence to Common Cause's request: As you can probably imagine (simply because you undoubtedly consider yourself a "reasonable person"), federal judges -- and justices -- are required by law to disclose their spouse's income. This prohibits unsavory organizations and individuals from influencing the judiciary by channeling money (i.e., "influence") through their wife or husband. Yet, Justice Thomas has not complied with this requirement for years. Between 2003 and 2007, Virginia Thomas, Justice Thomas' wife, earned $686,589 from the Heritage Foundation, according to a Common Cause review of the foundation’s IRS records. Thomas failed to note the income in his Supreme Court financial disclosure forms for those years, instead checking a box labeled “none” where “spousal noninvestment income” would be disclosed. It's also known that Virginia Thomas has been active in the political group, Liberty Central, an organization of her founding, that's predominately guided by the Tea Party's vague philosophies of limited government, free enterprise, national security, and personal responsibility, and is also funded charitably by Koch Industries, the second largest private corporation in America.  

Thus, the Common Cause petition to the Department of Justice also asked a third very critical question: Did Justice Thomas have a conflict of interest based on his wife’s interest in the subject matter of the Citizens United case? If so, and this is an equally important question to ask (again, assuming you're a "reasonable person"): Does Koch Industries' ties to Virginia Thomas' organization, Liberty Central, create an additional appearance of bias for Justice Thomas? 

Knowing what we know now -- that Koch Industries, a major beneficiary of the Citizens United decision, and benefiting from the ruling to expand its multi-million dollar investment in political campaigns and causes -- should the Citizens United ruling be vacated? If there were a such thing as justice, and rule of law, it would be. But given the American mainstream media, and its refusal to report this, the vast majority of Americans will never even be aware of this blatant and obvious conflict of interest. And not being aware creates no pressure by We the People to force and elicit change through the Obama Administration. If the Common Cause petition ever sees the light of day, I'll be surprised. In just about all areas, this administration has shown it's more concerned with the welfare of corporate America than with the rights of We the People. I'm sure this will be no exception.

The First Year -- Only a Preview

Yesterday's arctic blast didn't dissuade about one-hundred, We the People, from attending the rally marking the one-year anniversary of the Supreme Court's monumental and disastrous decision, Citizens United v. FEC. The wind blew furiously out of the north, but We the People held fast to the concept of true democracy, while holding up, equally tight, a giant (20’ x 210’) replica of the original Preamble to the Constitution. It was a celebration of our inalienable rights, as they were intended, for actual blood-in-our-veins persons (not the corporate variety), who also happen to have this unending capacity to breathe unpolluted air, drink clean water, along with other human qualities that make it impossible to compete on even ground with corporate entities and their unlimited "speech" and interminable lives.

The turnout was low, disappointingly small to me, but the recognition and understanding has to start somewhere. The movement has to begin within our conscience body, that almost unrecognizable part of ourselves that comes to the forefront when we see wrongs that need to be righted and injustices made whole. It's that portion that realizes our busy lives, with all the routine and trivial minutia, finally takes a backseat. That's why I chose, and will continue to choose, to stand-up for democracy; why I stand against oppression, no matter the oppressor. I've recognized the real enemy, and as Pogo famously said, it is us.

Read John Nichols' excellent article from yesterday. He talks about the numerous community events that took place yesterday, including the one I attended on the Capitol lawn. Grassroots movements: it's where every extraordinary and mighty truth-against-power and power-to-the-people action had its beginning. It has to start somewhere.

P.S. I'll never listen to A Day in the Life in the same way again. If you're a child of the '60s, or even a Beatles aficionado, you'll know what I mean. Special thanks, and kudos, to The Coffee Party U.S.A. 

The Dismantling of Democracy

Just as today, Monday, January 17th, we commemorate and memorialize Martin Luther King for being an iconic figure in the advancement of civil rights in the United States and around the world, this Friday we'll denounce the landmark Supreme Court decision of last January 21st -- Citizens United v. Federal Election Commission -- for taking, as Thom Hartmann condemningly expresses, the "radical step of overturning more than a hundred years of laws passed by elected legislatures and signed by elected presidents and declared that not only are corporations 'persons' but that they have constitutional rights such as the First Amendment right to free speech."  

The following article appeared in today's Truthout. Mr. Hartmann, a historical researcher and writer concerning the legal fiction of corporate personhood and its devastating affects on our democratic processes, presents another penetrating analysis of this subject, and how Citizens United has effectively allowed corporations, domestic and foreign, to leapfrog over our democratic ideals and to the forefront of our constitutional protections.

Mr. Hartmann is totally correct in his historical analysis of the history of corporate personhood. Even prior to his work, scholars and other writers investigated and engaged in understanding this legal fiction; others, since, have corroborated his research. This is the single biggest issue confronting our democracy and our future. With last January's errant Supreme Court decision, the stakes got even higher. To dismiss Mr. Hartmann's work, as one commenter mentioned, "hypocritical", or to throw in the towel and see the cause as being too futile, does nothing to help stem the tide of this horrific neo-feudalism.

If you're in Washington D.C this coming Friday, January 21st, join us for a rally condemning last year's dreadful decision. We'll be in front of the Supreme Court building at 11:00 a.m. See www.movementforthepeople.org for more information.

 

Wal-Mart Is Not a Person by Thom Hartmann

The peculiar evil of silencing the expression of an opinion is that it is robbing the human race; posterity as well as the existing generation; those who dissent from the opinion, still more than those who hold it. If the opinion is right, they are deprived of the opportunity of exchanging error for truth: if wrong, they lose, what is almost as great a benefit, the clearer perception and livelier impression of truth, produced by its collision with error.

—John Stuart Mill

In 2003, after my book Unequal Protection was first published, I gave a talk at one of the larger law schools in Vermont. Around 300 people showed up, mostly students, with a few dozen faculty and some local lawyers. I started by asking, “Please raise your hand if you know that in 1886, in the Santa Clara County v. Southern Pacific Railroad case, the Supreme Court ruled that corporations are persons and therefore entitled to rights under the Constitution and the Bill of Rights.”

Almost everyone in the room raised their hand, and the few who didn’t probably were new enough to the law that they hadn’t gotten to study that case yet. Nobody questioned the basic premise of the statement.

And all of them were wrong.

We the People are the first three words of the Preamble to the Constitution; and from its adoption until the Robber Baron Era in the late nineteenth century, people meant human beings. In the 1886 Santa Clara case, however, the court reporter of the Supreme Court proclaimed in a “headnote”—a summary or statement added at the top of the court decision, which is separate from the decision and has no legal force whatsoever—that the word person in law and, particularly, in the Constitution, meant both humans and corporations.

Thus began in a big way (it actually started a half century earlier in a much smaller way with a case involving Dartmouth University) the corruption of American democracy and the shift, over the 125 years since then, to our modern corporate oligarchy.

Most recently, in a January 2010 ruling in Citizens United v. Federal Election Commission, the Supreme Court, under Chief Justice John G. Roberts, took the radical step of overturning more than a hundred years of laws passed by elected legislatures and signed by elected presidents and declared that not only are corporations “persons” but that they have constitutional rights such as the First Amendment right to free speech.

This decision is clear evidence of how far we have drifted away as a nation from our foundational principles and values. Particularly since the presidency of Ronald Reagan, over the past three decades our country and its democratic ideals have been hijacked by what Joseph Pulitzer a hundred years ago famously called “predatory plutocracy.”

The Citizens United decision, which empowers and elevates corporations above citizens, is not just a symbolic but a real threat to our democracy, and only the will of We the People, exercised through a constitutional amendment to deny personhood to corporations, can slay the dragon the Court has unleashed.

Read the rest at Truthout.