The Bipartisan War on Liberty

Liberal and conservative elites agree on one thing:
Americans are too free for their own good.

A. Barton Hinkle | November 18, 2011

To outward appearances, it might seem as though the left and right have never been more at odds. And for the average man in the street, drawn to the Tea Party on one side or the Occupy movement on the other, this might be true. But it is not so true for elite opinion. The nation's high and mighty may be divided about many things, but on one point they often agree: Americans are still too darn free.

For example: Not enough people exercise their right to vote. Problem, right? Well, William Galston of the Brookings Institution has a solution: Force them to. The other day he took to the pages of The New York Times to explain why we should be "Telling Americans to Vote, or Else." (It doesn't seem to have occurred to Galston that making people exercise a right takes that right away, by turning it into an obligation.)

Galston is hardly alone. Mitt Romney considers it a problem that many foreign nationals enter America without a government permission slip. His solution: Force every U.S. resident to carry a biometric ID card. (Just the thing to present at the polls when meeting your mandatory-voting requirement, eh? Great minds think alike.)

One of Romney's GOP primary opponents, Michele Bachmann, laments that many Americans—53% of them—pay no federal income tax. So she proposed forcing everyone to do so, even if they don't have any income to pay taxes on. That'll show 'em.

Time magazine proposed forcing every American into national service. A federal advisory board has decided, to much applause, that we should force boys as well as girls to receive the HPV vaccine. Proponents of ObamaCare believe the government should force everyone to buy health insurance.

The Obama administration also has lots of other bright ideas about how to bend the American people to its will. Last year Transportation Secretary Ray LaHood told those at a National Press Club that the administration's "livability" initiative "is a way to coerce people out of their cars." The administration also wants to force insurers to pay for birth control and abortifacients, and to force consumers to buy more fuel-efficient cars.

Voices outside the administration, however, fret that it is not being forceful enough. In a recent Washington Post column, Dana Milbank advised the president to emulate the ruthless tactics of JFK. Milbank recounts how Roger Blough, chairman of U.S. Steel, raised prices in defiance of the president's wishes. "'You have made a terrible mistake,' Kennedy told him. Subpoenas flew, FBI agents marched into steel executives' offices, and Kennedy spoke about IRS agents examining 'hotel bills and nightclub expenses [that] would be hard to get by the weekly wives' bridge group out at the country club.'"

Ahh, the good old days. When J. Edgar Hoover pulled stunts like that, liberals considered it proof that the dark night of fascism was descending across the land. But when their own guys do it, they call it getting things done. Nary a word from Milbank about what business the president has dictating steel prices, by the way.

Yet Milbank is a piker in the thuggery-worship category, at least when compared with The New York Times' Thomas Friedman. In 2009, Friedman penned a column about how China's one-party autocracy was better than America's two-party system: "One-party autocracy certainly has its drawbacks," he wrote, "but when it is led by a reasonably enlightened group of people . . . it can also have great advantages. That one party can just impose the politically difficult but critically important policies to move a society forward." He went on to list some of China's critically important policies, which were—surprise!—policies of which he personally approved.

Well, anyone can write a stinker of a column now and then (heaven knows!). But a year later Friedman was still at it, relating on Meet the Press how he has "fantasized" about "what if we could just be China for a day?" Then "we could actually, you know, authorize the right solutions." He didn't actually want America to "be China," mind you, he just wanted "my democracy to work with the same authority." That way, Friedman could impose his will on everyone else, and life would be grand.

This is what power fetishists always do: assume the power will be used in ways they like. (And since the ends are noble, they surely must justify the means, right?) Sometimes it is. But when power changes hands, the inheritors may be a rather different sort. The people pushing for more government power never seem to think of that—until it's too late.

How Milton Friedman and Chicago Economics Undermined America

Saturday, April 2, 2011 by Corporate Crime Reporter
by Russell Mokhiber

Here’s the thing about the Chicago School of Economics – it wasn’t always this way.

Chicago School now means – market good, government bad.

But that was Chicago School hijacked by Milton Friedman, Robert Bork, and Richard Posner.

There was a Chicago School before Friedman, Bork and Posner.

“The Chicago School began with the view that in order to have a properly functioning free market, the government must drastically curtail the ability of businesses to build and maintain concentrated economic power,” writes Kenneth Davidson in his new book Reality Ignored: How Milton Friedman and Chicago Economics Undermined American Institutions and Endangered the Global Economy (2011). “Early incarnations advocated forbidding corporations to retain their earnings or to purchase other businesses. The explicit fear was that the disproportionate power of big businesses would distort commercial markets and corrupt political freedoms.”

That sounds more like Ralph Nader than the Chicago School.

“It was Henry Simons and Aaron Director,” Davidson told Corporate Crime Reporter in an interview last night.

“Aaron Director was very close to Milton Friedman. Henry Simons was one of his teachers during the 1930s.”

“Both Director and George Stigler were students of Simons. Simons wrote an essay called A Positive Program for Laissez Faire.”

“It was in the middle of the depression. At that time, people thought that many of the problems affecting the economy in the United States and the rest of the world were due to the growth of the then relatively new giant corporation.”

“They had this ideal that the market would work and would perfectly, but only if you could take out of the market the giant firms that dominated through their economic power.”

“And they saw that economic power as a great threat to the nation and national freedom.

That was essentially a Jeffersonian notion of the market. The market would regulate itself if everybody was a farmer, a yeoman farmer, a small businessman.”

“They thought it would be automatic.”

“By the time Friedman wrote his book – Capitalism and Freedom – in 1962, they had totally changed their minds.”

“The problem was not big business. The problem was government.”

Henry Simons thought the market had to be pretty rigidly controlled. It was bad to allow companies to keep their profits. The profits should be given back to the shareholders every year. And the businesses should have to sell the market every year on whatever their development plans are and raise new capital.”

“Friedman just swept that away. The government could not make a decision that would be correct. He and Stigler were adamant on the fact that the government was not only incompetent to make these decisions, but that whatever regulatory organizations were created would inevitably be dominated by big businesses.”

“So, it was better to let the businesses fight it out themselves in a survival of the fittest mode.”

One hundred years ago, antitrust policy was a populist policy. It was seen as a way not just to break up cartels, but to challenge concentrated economic and political power. Now, antitrust seems weak in comparison. The Chicago School has eviscerated its powers. Antitrust today seems to challenge power only at the edges.

“It’s true,” Davidson said. “The objectives of antitrust when passed were directed at political and social corporate power.”

“People feared the power of the large businesses. Some of those fears went away with the countervailing power of unions.”

“And some went away with the increased income and economic growth of the United States.”

“But we are now seeing much of the same kinds of fears re-emerging out of the deregulation, not only of antitrust as a social and political force, but also the deregulation of the financial sector.”

“The Supreme Court in the Credit Suisse decision two years ago said that antitrust can’t go after misbehavior in the stock markets.”

“Robert Bork, in his book The Antitrust Paradox, denies the history of the antitrust laws – he denies the social and political foundations.”

“To the extent that he would admit the legislative history, he says – that’s just words, it doesn’t make any sense.”

“And he invents or applies a Chicago theory about how the economy works and redefines antitrust.”

“And he says – if its not about this and only this, we should get rid of the antitrust laws.”

“Richard Posner comes along and writes the same thing – it’s about prices, it’s not about power.”

“They are simply making up this history, which then becomes the foundation for saying – when we look at mergers, we don’t look at the consolidation of corporate power, or the enhancement of corporate power. Instead, we look at the question of whether the price of individual products is going to go up or not. And that’s the only thing we look at.”

Do you see any chance for a new trust busting politician like Teddy Roosevelt coming down the pike?

“No,” Davidson said. “I don’t see the President taking the kind of leadership that Roosevelt took in the early 1900s that created antitrust as a political force in the United States.”

“President Obama is much more cautious in the way he goes about these things.”

“What inevitably causes the shift in the political winds is overreaching.”

“And we are seeing overreaching by these large corporations. I very much fear that the temporary resolution on Wall Street of our economic crisis, which ended up in the merger of even larger banks, which are going to be even more susceptible to disastrous failure, is eventually going to cause another crash, and this time the governments will have to break them up.”

“They will have to see that the original Chicago School theory that smaller is better is in fact better.”

“The idea that we let commercial private institutions get bigger and bigger is a recipe for disaster to the economy.”

Building a New Economy

American Decline

By MANUEL GARCIA, Jr.

When we say the American Empire is in decline, what do we mean? Is it the decline of:

1) The U.S. economy (and consequently U.S. political power) in relation to and in competition with the other national economies, the regional groupings of economies (like the E.U.), and the aggregate world economy?, or the decline of

2) The industrial mode of economic organization of society?, or the decline of

3) The capitalist model now controlling the U.S. economy in its industrial mode (as opposed to, say, a socialist model whether of democratic form or of command form as in China)?, or the decline of

4) The competence of the economic managing elite, and the influence of white males as the demographic group devising and directing public policy, controlling the national economy and ensuring their demographic group is most favored in the distribution of national prosperity?, or the decline of

5) The standard of living, physical health and security, mental state and personal development of the majority of the members of the public?

We can abstract these five aspects of a national economy, respectively, as its:

1) power,

2) organization (as an industrial mechanism or as a social relations network),

3) purpose (capitalist or socialist),

4) leadership (ability and demographics), and

5) living conditions (the typical experience of daily life).

Clearly, any person's view of the state of the economy will depend on which of these five aspects they most identify with; and any media account of the state of the economy will be crafted to resonant with the biases of the intended audience.

Economic Power

People in the corporate and political leadership classes will gauge the health of the economy on the basis of its power in relation to the international competition. The remora class of analysts, commentators, consultants and promoters, who base their livelihoods on the sale of information and "suggestions" to the executive classes, will also fabricate their interpretations of current events on the basis of the economy's power.

Economic Organization

Critics of the industrial mode of economics will focus on the mismatch between the performance of our current economic machinery and the human and societal needs of the public, which is required to support this economy. Ivan Illich (1926-2002) wrote three books in the 1970s (Deschooling Society, Tools For Conviviality, and Medical Nemesis) arguing quite effectively that many of the institutions of the modern industrial state impede their own supposed purposes; he focused on education and medicine in particular.

For example, the educational "funnels" sought today so as to insert more knowledge more quickly into student minds are so burdensome (too much homework, "one-size-fits-all" regimentation, politically circumscribed curricula) that they work against the natural impulse to intellectual exploration by children and young adults, and rob them of the time to follow their natural inclinations toward discovering and learning at their own pace. Children are conditioned, programmed and trained to be passive receptacles rather than being nurtured to become self-directed learners and creators.

Another example of industrial mode counterproductively is the high-volume production of automobiles, which enables suburban sprawl. The unavoidable result is the clogging of increasing longer commute routes between suburban homes and city jobs. The losses to individuals in hours-per-day of living-time spent commuting, and the societal costs in air pollution and the national security liability of oil dependency, are all well known.

A "convivial" (Illich's term) solution would be to group residential and work areas close together within smaller well-planned cities and towns linked by networks of intra-urban and inter-urban public transportation systems (trolley, bus, train). Such convivial towns and neighborhoods (structured around the natural scale of human interactions) would harken back to earlier times when every city block was not far from a park, and had a bakery, produce store, meat and fish store, druggist and newsstand along it or "just around the corner."

The industrial mode requires that people serve the efficiency goals of a delivery system so it operates at its lowest cost per item moved. For example, the "big box" stores one must drive to, because they are beyond walking distance from home, and because no one can carry all the bulky items and large quantities one is required to purchase in order to get the array of supplies needed for home-life. How much easier stepping off a bus or trolley a block or two from home after work, and within half an hour buying one easily-carried grocery bag filled with all the supplies and fresh food needed for the next few days.

Another Illich concept is that of the "radical monopoly." This occurs when a technical system or method appears to be most effective at meeting some common need, and as a consequence of its popularity makes alternatives so economically disfavored that the use of the dominant technology becomes effectively mandatory. This might be acceptable in the case where a more convenient technology replaces a less convenient one, such as personal computers replacing typewriters; but it might be detrimental when the radical monopoly consumes large amounts of energy and pollutes (which we could recast as "requires a wasteful consumption of environmental potential"). The automobile transportation required by suburbia is one such radical monopoly.

Another radical monopoly is western medicine in the form of a pharmacologically and technologically intense industrial mode of centralized medical practice. A convivial alternative would be to have doctors (and their clinics) distributed throughout the well-planned towns mentioned earlier, so that one lived on every block, and every resident would have their "personal physician" living within walking distance. Hospitals would still exist, but patients would most likely enter them as a planned visit arranged by their local doctor, rather than as the only option in an emergency. This latter health care system is used in Cuba.

People address the problems of their daily lives by applying a wide array of tools: hand tools, kitchen and food storage appliances, transport vehicles and transportation systems, electronic devices and electrical power networks, houses and housing systems, drugs and medical devices and health care systems, and many other technical entities from simple pocket knives to trans-national social, monetary, judicial and government systems. Illich called all such entities "tools."

His central point was that "A convivial society should be designed to allow all its members the most autonomous action by means of tools least controlled by others." Illich chose the term "convivial" to designate the opposite of "industrial productivity," his concept of a society of autonomous and creative interaction between people, and between people and their environment, "where individual freedom was realized in personal interdependence."

Tools that allow for many possible uses, as determined by the creativity of the user, and are not restricted to a narrow purpose by their designer, are convivial. Simple hand tools, like a hammer, are convivial tools. More complex examples are the telephone, in that the telephone company cannot restrict the nature of your conversations; and AC electrical power, in that the power company has no control over what you plug into an electrical outlet. In contrast, machines made for industrial productivity can only be used in a few ways, which is the intent of the designer so as to control and "own" the benefit of the tool's use. The specialized machinery in any factory assembly line, big box stores, and "personal" computers with proprietary and purposely exclusive operating systems are examples of non-convivial tools. Non-convivial tools require humans to become their servants, who operate them in set ways to achieve unique purposes of benefit to the tool designer.

It is easy to see that centralized systems of supply (e.g., food) and service (e.g., medical) are industrial and non-convivial, they require people to "line up" and operate them in a set fashion (e.g., through inflexible bureaucracy, and customer service telephone holds), so the system providers can minimize their costs and maximize their returns. Conversely, decentralized systems of supply and service delivery -- as we envisioned earlier in our hypothetical well-planned towns -- would not operate at the lowest cost physically possible per item moved, but they would enable a much richer and freer living experience to the wide variety of people who were using and paying for these systems. This is conviviality.

Economic Purpose

An economy is a man-made procedural structure integrating the operation of the financial and commercial interactions engaged in by the members of its society. Every economy, however primitive and disorganized, or sophisticated and highly organized, is an artificial and intentional construction. It is built to a purpose by people, it is not an organism arising out of nature. So, no economy is based on natural and unbreakable laws. Every economy is a game, and is rigged. Just exactly how any particular economy is rigged is the purpose of politics.

Generally, economies are recognized to serve two purposes: capitalist and socialist. The capitalist purpose is the accumulation of private profit at general expense, and the socialist purpose is the support of varieties of social and humanitarian needs at general expense.

Most national economies today have some mixture of capitalist and socialist purposes, though usually the capitalism dominates. For both, the industrial mode is more popular. Capitalist big box stores aim to maximize the profits to the owners, while socialist big box stores aim to minimize the cost to the state for distributing the goods they dispense. Similarly for capitalist and socialist service dispensaries in the industrial mode (e.g., health care).

Both capitalist and socialist economic purposes can be organized in either the industrial or convivial mode. The socialist purpose industrial mode was forcefully promoted by Stalin. As Illich wrote:

"In 1931 Stalin translated 'control over the means of production' to mean the increase of productivity by new methods used to control the producer [the subject population]… Since then a socialist policy has been considered one which serves the industrially organized productivity of a socialist country. Stalin's reinterpretation of Marxism has since then served as a form of blackmail against socialists and the left."

Fifty-three percent of the U.S. federal budget is spent on pure Stalinism, known simply as the Pentagon, a non-convivial radical monopoly used for political intimidation.

Social Security is another example of a socialist purpose within an otherwise capitalist U.S. economy, that purpose being the dignified management of the transition from taxpaying productive life for old people to their taxpayer-supported maintenance and death. Another socialist purpose proposed for the capitalist-dominated U.S. economy, but so far rejected, is that of universal health care. Publicly funded education through college and child-care are similarly as-yet rejected socialist purposes (note that socialized child-care is a way to ease the strain of industrial mode employment of women; the convivial alternative is socializing the costs of mothers caring for their own children).

Realize that all of these socialist purposes can be addressed in either an industrial or a convivial way. Too often the choice between an industrial organization or a convivial one is ascribed to either a capitalist or socialist motivation (whether as a recommendation or criticism).

This author's preference is for convivial socialism, probably because he lives in a capitalist-dominant industrial economy.

Economic Leadership

The leadership classes of the United States are disproportionately populated by white males, and also include attendant females and accepted minority individuals (tokens) who service the class-race ascendancy imperatives. The whys and wherefores of this are well known. The essential public responsibility of an economic leadership class is to be competent (and, it should go without saying, to be honest).

Economic Living Conditions

The conditions of daily life in the U.S. are noted and reported on by the journalists of ethnic minority and working class life. At this time there is an economic depression for the working class because of the collapse of the housing market and financial bubble of 2007 [The Emergency Economic Stabilization Act, which implemented the $700 billion emergency bank bailout Troubled Asset Relief Program (TARP), was signed into law on October 3, 2008], and because of the permanent loss of U.S. jobs outsourced to China and other minimum labor-cost economies.

The U.S. population has a capitalist utility as a market -- a mass from which to extract cash and dump goods into -- but this population is largely unnecessary as regards productivity (Pentagon industries excepted). Much cheaper foreign labor can produce the goods needed to absorb the retail cash from the U.S. market. How the U.S. population is supposed to get this retail cash in the first place does not seem to be a matter of concern for U.S. capitalism's economic planners.

Food, energy consumption and entertainment, often in combined forms such as "fast food," flashy oversized automobiles, giant plasma-screen home-theater systems and hand-held video-viewing telecommunications devices (telescreens aplenty), are popular retail goods. Like the soma and feelies of Aldous Huxley's Brave New World, they serve the political purpose of pacifying the U.S. population so it conforms itself to the service of the capitalist industrial mode economy that profits from them. In rural communities in California's Central Valley, Mexican-American children of farm-worker parents play with iPods in homes with dirt floors.

Decline And Expectation

The experience of economic decline is a matter of expectation. Investors in stocks, bonds, real estate and currencies might fear a decline of the U.S. economy when the productivity of foreign economies surges relative to that of the U.S. Changes of this type are the result of: continuing progress in less-developed nations, changes in labor and resource availability, the unexpected twists and turns of international politics, and the occasional influence of geophysical forces (e.g., natural disasters and climate effects). 

Investors might also fear a "downturn" of their expectations if there is a serious possibility that sectors of the economy might be reorganized in a convivial fashion (meeting people's needs instead of just extracting cash from them), or worst yet become nationalized.

However, if a working class family is now covered by an industrial mode national health care plan, it could easily experience better economic conditions even if the cost of the plan actually reduced the national gross domestic product, and the economy's power relative to the international competition. That family would feel even richer if their health care were available through a convivial system of neighborhood-based physicians and clinics, even if the Wall Street Journal were to assure them that they were now living in an even weaker national economy. In reality, no wealth would be lost. Quite simply, the profit potential of investor fantasy in an industrialized mode capitalist economy would have been used to provide the people-centered national health care benefit. A potential wave of private profit, and chips for financial speculation, having been smoothed out into a rising tide of socialized benefit.

This is an evolving planet, and some can view changes in demographics as an economic decline. This is race-based thinking, something like tribalism; it is primitive, ignorant and very popular.

The fertility rate of whites is lower than that of nonwhites in the U.S., and the fertility rates of northern latitude and industrialized countries are lower than those of less-developed and tropical latitude countries. This is the glacially advancing demographic steamroller that flattened the apartheid regime of South Africa, will eventually inundate the Israeli colonial project in Palestine, and is darkening the complexion of North American and European life.

For some of the most insular and least cosmopolitan populations of white North Americans, the visible changes in the complexion of the leadership classes -- still predominately white but now routinely mixed in with non-white personalities -- is too jarring a reminder of their own social and economic stagnation, and they express their resentment over their own unacknowledged backwardness by a rejection of any society with nonwhite members of equal status. This in turn is voiced most honestly as simple racism (against Latinos, blacks and muslims in the U.S., and muslims and blacks in Europe), or disingenuously nuanced as anti-government sentiment, by which they mean opposition to the socialized purposes of the national economy because such socialized activity is by definition racially integrated. These are the Tea Party people.

These resentful whites, angry at the imagined loss of their assumed race-based socio-economic privileges rail about the illegal immigrants (a.k.a. Mexicans) "taking" jobs and "getting free government benefits" which they have to pay for through their taxes (this is usually just the overblown hyperbole of simple misers resenting taxation). Yet, they never seem perturbed that 53 cents of every tax dollar they hand the government goes straight to the Pentagon and funds the most wasteful and destructive subsidy on Earth, at a societal cost far beyond that actually created by undocumented immigrants.

But, these resentments grow out of fears born out of ignorance, and logical argument can do little to break through to the emotional engine driving this mindset. These people see loud, uncouth and very rich nonwhite people on their televisions; they see as their president a black man whose sophistication and intellectual attainments they will never match; in their towns and shopping malls they see Mexicans, walking in large family groups and chattering in an undecipherable lingo, and obviously spending money, where did they get it?

It all comes back to hammer the painful point home: "things aren't as I expected, I'm not special, and they're making me pay to have it this way." This mindset sees national social and economic decay in the darkened complexion of the national demographic, and harrumphs about "taking the country back." Tea Party politicians will try to actualize their faction's guiding delusion by disabling as much of the socializing purpose of the national economy as will return the country to a more racially segregated and white-favored past, without the loss of subsidies popular with white people, like Medicare and the military. In this work of social regression they will be the useful idiots of the capitalist ownership class, for whom industrialization is profit, conviviality is taxation, and socialism is expropriation.

Decline? Yes Or No For Five Factors

1) Decline of economic power? Yes. 

China and India combined hold 36% of the world population (2.49B of 6.89B). The 2010 GDP third quarter growth rate for India was 8.9% and for China 9.6%. These rates are representative of their respective economies during the last three years (though all economies experienced some dip near the 2008 U.S. banking collapse). The growth of U.S. GDP during the 2010 third quarter was 2.6%, and the average U.S. growth rate over the last 15 quarters was 0.49%. The U.S. population of 311.9M is 4.5% of the world total.

If we take the GDP (in 2009 $) of India, China, the U.S. and the World ($1.31T, $4.99T, $14.12T, $58.14T) and divide each by their respective population (1.155B, 1.331B, 0.312B, 6.893B) we arrive at a productivity per capita (GDP/#) of, respectively: $1134, $3749, $45,270, $8438. Note that we are assuming that every single person in the country (and World) is a "worker" who contributes to the GDP; hardly exact but usefully indicative. 

We can compare the performance of two different economies by forming ratios from pairs of GDP/#, to arrive at:

• the number (at top of the resulting fraction) of U.S. workers that produce the same absolute output ($ amount) as

• the number (at bottom of the resulting fraction) of workers from India, China, the U.S. and the World, respectively,

•           as: 1/40, 1/12, 1/1, 2/11.

So, the output of one averaged U.S. worker equals that of 40 averaged Indian workers (as defined here), or 12 averaged Chinese workers; and 2 averaged U.S. workers produce as much as 11 averaged World workers.

Performing the same exercise but this time comparing India, China, the U.S. and the World to the averaged World worker, we find, respectively (World/country): 2/15, 4/9, 11/2, 1/1. So, 2 averaged World workers produce as much as 15 averaged Indian workers, 4 World to 9 Chinese, 11 World to 2 U.S. (and 1/1 for World to World).

If we assume that the third quarter 2010 growth rates remain constant, then (by simple exponential extrapolation) the Chinese economy will match the total output of the U.S. economy in 15.8 years, at $21.2T (unchanging $).

By a similar extrapolation, India's economy will match that of the U.S. in 39.9 years, at $39.4T. The estimated averaged Chinese "worker" productivity in 15.8 years will be one quarter that of the averaged U.S. worker then, and a similar calculation for Indian productivity at GDP parity yields 23% that of the U.S. in 39.9 years. (These calculations used national populations projected for 15.8 years and/or 39.9 years in the future; the projections were calculated using constant population growth rates of 1.3%, 0.5%, 0.9%, respectively, for India, China and the U.S.)

The sheer size of China's population compared to that of the U.S. means that it must inevitably outpace the U.S. economy, as long as China's productivity increases over time (and there is no revolutionary improvement in U.S. productivity). India follows the same trend but at less than half the pace.

2) Decline of economic organization? Neutral (yes and no).

The U.S. economy is as highly organized as it ever was, in its overwhelmingly dominant industrial mode. There has been no overall decline of organization, nor modal shift to conviviality (the no part).

However, there are significantly fewer industrial sectors today than existed three decades ago. The range of possible industrial production has diminished because of the permanent loss of major portions of the manufacturing base (the yes part).

In brief, civilian manufacturing industries have largely been "outsourced" to replace American labor with lower-cost foreign labor (primarily Chinese). Those portions of the domestic productivity base that have not been abandoned are strictly, even obsessively, organized along the industrial mode.

The haste, one might say panic, with which U.S. capitalist planners tossed domestic manufacturing labor overboard and walked away from domestic manufacturing physical plant suggests there has been little useful thought about the future economic impact of a swelling population of the permanently unemployed, and expanses of decaying industrial ruins (http://jalopnik.com/5110995/the-ruins-of-detroit-industry-five-former-factories).

The outsourcing gimmick has kept "the economy" (as experienced by U.S. capitalism's management, ownership and investor classes) robust and competitive (factor #1). However, the detritus of mega-capitalist "open loop" schemes of wealth generation, in this case entire industries and their skilled domestic labor populations, is just too large a burden to dump onto the public for reabsorption and regeneration, without cost to the schemers. There will have to be "taxes" on future "earnings" to help pay for the reintegration of the jettisoned industrial capacity into a new type of all-are-included domestic economy.

The political conflict at hand is between capitalist exploiters and speculators, who wish to escape paying for the waste and societal damage of their schemes, and the working class taxpaying public (most of the people), which deserves receiving sizable payment for damages caused to the commonwealth, because the people of that public will do all the work of reprocessing abandoned industrial ruins and unemployed industrial workers into a new regrouped national community, with cleaned-up reusable sites, and revitalized neighbors, colleagues and co-workers.

3) Decline of capitalism and shift to socialism? No.

Circumstances have yet to decay to the point where they batter most Americans severely enough so they question their childhood indoctrination to capitalism (think Berlin or Tokyo, 1945).

Health care is the single issue that draws most interest to socialism in the U.S. today. The pressure for socialized medical care arises out of the stresses of the industrial mode of employment and service delivery.

I suspect that most Americans (U.S.) would lose interest in socialized medicine if they had access to a convivial capitalist health care system they could afford. An individual might state it this way: "If I have to be just one of the herd in some industrial medical system, then I'd rather it were government-run and taxpayer funded. At least then I wouldn't have the added anxiety about paying for the indignity, nor even about being able to get it when I needed it. However, if I could get quick and easy access close to home anytime, and a professional to deal with the hospital for me when that was needed, I'd be happy to pay dues comparable to a swim club."

4) Decline of economic leadership? Yes.

There has been an absolute decline in the competence of economic leadership, certainly since the days of John Maynard Keynes and John Kenneth Galbraith, and especially since the onset of the Reagan Administration (and Thatcherism in England), with its rabid Chicago School ideology (e.g., Milton Friedman's "free market").

The logical terminus of Reaganomics was the bank crash of 2008, though today's economic managers remain witless before it, their minds still possessed by the free market cult. How can anyone think that the economic managers, ministers, experts and regulators, who collectively gave us the economic crisis of 2007 to the present, are competent? Unfortunately, neither these incompetents nor their Reaganomic mindset -- which has eviscerated the American economy as a living experience, as opposed to an investment climate -- have been swept off the scene so an authentic recovery and effective reforms can be started. Present U.S. fiscal policy is the equivalent of trying to blow air back into a burst balloon. Somewhere, Santayana's ghost is laughing.

As described earlier, from a Tea Party perspective there has been a decline of the leadership elite by virtue of demographic titration. This is really a public health problem regarding epidemic mental illness.

5) Decline of the standard of living? Yes.

This is the great theft in the U.S. during the late 20th and early 21st centuries. A specific instance is the abandonment of the American skilled industrial laborer, but the overall scheme affects every working person: the socialization of vast speculative losses and the costs of capital flight from civic responsibilities.

As long as the political problem of reintegrating the U.S. economy, so it includes all workers in an equitable sharing of economic gains, remains unsolved, even unaddressed, then the standard of living will continue to decay, and with it prospects of long term profitability even for members of the elite economic classes.

"Big capital" uses its money to forestall any political engagement on this fundamental issue, and too much of the public accepts being distracted and pacified by high-tech trinkets, toys and endless entertainment streams, to focus on the work needed for their own education in reality, and the commitment needed to organize politically in the public interest.

When a quorum of the public wakes up (Yoo Hoo! Stop watching and believing TV!) and comes together to take action, the capital interests will be forced to negotiate for their survival, and that will make it possible to actually reform the economic machinery of the country, to re-rig the game in the public's favor.

Conclusions

1, 2, 3, 4, 5, respectively: yes, neutral, no, yes, yes.

The economy-as-lived by Americans has declined steadily for three decades, and sharply after 2007. This economy is in a depression now, with no indication of imminent improvement. Further decline is inevitable unless an extensive recovery scheme is implemented (think non-militarized Keynes plus significant financial reforms plus large and permanent cuts in military spending).

The economy-for-investors, which hosts financial speculation, is growing slowly. However, it is a non-convivial shell game that excludes a large population of unemployed and underemployed people, except as members of a public dump used to absorb cast-off banking corporation liabilities and environmental damage. This is politically unsustainable in the long term. An economy that produces livelihoods for everyone is needed.

The long term solution to both problems is a reorganization and reorientation (a.k.a., 're-purposing') of the U.S. economy, by dissolving and recombining the economy-as-lived and the economy-for-investors into a re-integrated whole. Of necessity, the result would have significantly more socialism and some more conviviality. A public that could accomplish this reform would understand that "lost" potential profits (which could have been had from the old economy-for-investors) would only have gone into risky and destabilizing gambling activities, and "lost" potential subsidies (like the excessive Pentagon favoritism in the old economy-as-lived) would only have gone into wasteful military adventurism and consumption. The new economy would produce living wealth.

How do we achieve this? Politics. Impossible? Remember, the barriers are all in our minds, collectively.

Democrats Propose National ID Card to Combat Illegal Immigration

And it didn't even take a year before the Democrats--as the party in power--began considering the same Orwellian policy tactics the Republicans threw out there when they were the party in power. A national ID card is a bad idea that furthers the whole "show me your papers" theme so commonly used in reference to the Nazi Germany (which is ALWAYS a hyperbolic comparison, but there you go).

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Dems Proposal Would Create National ID Card

By Jason Ditz

April 30, 2010

Privacy concerns are taking a back seat to a massive power grab again as top Congressional Democrats are proposing to institute a national ID card under the guise of “immigration reform.”


The proposal (pdf) insists that the government can “end illegal employment” by requiring every worker in the country to carry a biometric ID card including fingerprint data with them at all times. The bill insists that the ID card would "prevent future waves of illegal immigration."

Called the “Believe” System, the plan would have every employer required to check the validity of the ID card with a digital scanner before they would be allowed to hire anyone. The proposal drew quick condemnations from a number of civil libertarians groups, unsurprisingly.

But Sen. Dick Durbin (D – IL) expressed confidence that Americans would accept the measure, adding “now we live in a world where we take off our shoes at the airport and pull out our identification.” Americans have been cowed by threats of terror into all manner of travel restrictions, but will the specter of illegal immigration work the same wonders for this latest government program?

It is unclear, but it seems the Democratic leadership is willing to bet the answer is yes. Unthinkable not so many years ago, the growing calls for the federal government to do “something,” no matter how unwise, about immigration has made a national ID card proposal politically safe.

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Democrats Push for National ID
By Anthony Gregory 

Apr 30, 2010

At least since 9/11, the Democrats have, if anything, been even worse than the Republicans in their push for a national ID. I recall the Bush administration, very early on, dismissing this totalitarian idea, although Bush soon enough signed the Real ID Act into law, with the support of hawkish and anti-immigration conservatives. But the establishment left is also a major threat on this front, and Democrats traditionally get a pass on civil liberties issues, whereas under Republicans there is more populist criticism of surveillance, police powers and the like.

Consider the Orwellian program being proposed by the Democratic leadership as part of “immigration reform.” Alexander Bolton writes:

Democratic leaders have proposed requiring every worker in the nation to carry a national identification card with biometric information, such as a fingerprint, within the next six years, according to a draft of the measure. The proposal is one of the biggest differences between the newest immigration reform proposal and legislation crafted by late Sen. Edward Kennedy (D-Mass.) and Sen. John McCain (R-Ariz.). The national ID program would be titled the Believe System, an acronym for Biometric Enrollment, Locally stored Information and Electronic Verification of Employment. It would require all workers across the nation to carry a card with a digital encryption key that would have to match work authorization databases.

Whereas the Kennedy/McCain bill was bad enough, containing both positive elements and nasty ones, this new monstrosity would force leviathan’s way even further into every employment relationship. And this actually speaks to the false dichotomy between civil and economic liberties. Both incorrectly bifurcated forms of freedom are rooted in the same set of property rights, first and foremost in one’s own person and, by extension, in the tangible property one acquires justly through homesteading, gifts and honest market transactions. If Big Brother tries to comprehensively regulate immigration, he can smash economic freedom of association. And if the state has the power to oversee our economic lives, our personal freedom will always suffer in the process.

This also is a good time to question the entire idea of the national government trying to “seal the borders,” pick winners and losers among immigrants, decide who gets all the welfare benefits of being a legal immigrant and who is not even allowed into our golden door. Invariably, when the federal government imposes its way on immigration, we get some immigrants who come in with legal sanction and quickly become dependents of the U.S. government—whereas illegals are probably not net beneficiaries of the welfare state, legal immigrants might very well be. What’s worse, plenty of people are denied peaceful and legal entry when all they want is to enter the job market, improve their situation and that of their families, and join in the American dream. Of course, despite the state’s distinction between legal and illegal immigrants, most illegal aliens are de facto invited by the American people—by those who employ them, rent to them and associate with them as part of the community and in the glorious network of voluntary exchange known as the market economy. Since conservatives often say our rights come not from the government but from God and the nature of man, it is not for the government to decide whether someone should have the right to live here or not—it is up to individuals and communities, which obviously are able to sustain a fair number of illegals. Moreover, constitutionalists in particular should question the very notion that the feds have legal authority to crack down on the border, since immigration is not an Article I, Section 8 authority of Congress. Conservatives especially should follow Reagan’s example and embrace immigration amnesty.

The violence in Arizona is a consequence of too much government meddling—the drug war that causes the inflated profits and black market conditions on which gangsters thrive, as well as the immigration controls that lead to abuse of aliens at the hands of coyotes and others. A heavy-handed government response to it and to the immigration issue generally will inevitably yield disastrous consequences for the economy, the rule of law and, most important, individual liberty. Some folks fear that Obama will be soft on the border—even as they demand that he stop taking over the economy and expanding presidential power, this is one area where they want him to be more active. But no one should fear the Democrats will do nothing about immigration. One should instead fear that they will do all too much and that we will wake up living in a police state, with the walls closing in.

"Cyberwar" Hype Intended to Destroy the Open Internet

This relates perfectly to the last article I posted. They are going to crackdown on the web to protect us from cyber terrorists! Thank god, for these lovely people. < sarcasm>I would GLADLY trade my freedom and rights to feel more safe!< /sarcasm>

SCREW THAT! And screw these bozos for limiting democracy in the name of homeland security, when it's really all about forcing us into the new corporate profit-driven dynamic.

Cyberwar Hype Intended to Destroy the Open Internet
By Ryan Singel
March 1, 2010

The biggest threat to the open internet is not Chinese government hackers or greedy anti-net-neutrality ISPs, it’s Michael McConnell, the former director of national intelligence.

McConnell’s not dangerous because he knows anything about SQL injection hacks, but because he knows about social engineering. He’s the nice-seeming guy who’s willing and able to use fear-mongering to manipulate the federal bureaucracy for his own ends, while coming off like a straight shooter to those who are not in the know.

When he was head of the country’s national intelligence, he scared President Bush with visions of e-doom, prompting the president to sign a comprehensive secret order that unleashed tens of billions of dollars into the military’s black budget so they could start making firewalls and building malware into military equipment.

And now McConnell is back in civilian life as a vice president at the secretive defense contracting giant Booz Allen Hamilton. He’s out in front of Congress and the media, peddling the same Cybaremaggedon! gloom.

And now he says we need to re-engineer the internet.

We need to develop an early-warning system to monitor cyberspace, identify intrusions and locate the source of attacks with a trail of evidence that can support diplomatic, military and legal options — and we must be able to do this in milliseconds. More specifically, we need to re-engineer the Internet to make attribution, geo-location, intelligence analysis and impact assessment — who did it, from where, why and what was the result — more manageable. The technologies are already available from public and private sources and can be further developed if we have the will to build them into our systems and to work with our allies and trading partners so they will do the same.

Re-read that sentence. He’s talking about changing the internet to make everything anyone does on the net traceable and geo-located so the National Security Agency can pinpoint users and their computers for retaliation if the U.S. government doesn’t like what’s written in an e-mail, what search terms were used, what movies were downloaded. Or the tech could be useful if a computer got hijacked without your knowledge and used as part of a botnet.

The Washington Post gave McConnell free space to declare that we are losing some sort of cyberwar. He argues that the country needs to get a Cold War strategy, one complete with the online equivalent of ICBMs and Eisenhower-era, secret-codenamed projects. Google’s allegation that Chinese hackers infiltrated its Gmail servers and targeted Chinese dissidents proves the United States is “losing” the cyberwar, according to McConnell.

But that’s not warfare. That’s espionage.

McConnell’s op-ed then pointed to breathless stories in The Washington Post and The Wall Street Journal about thousands of malware infections from the well-known Zeus virus. He intimated that the nation’s citizens and corporations were under unstoppable attack by this so-called new breed of hacker malware.

despite the masterful PR about the Zeus infections from security company NetWitness (run by a former Bush Administration cyberczar Amit Yoran), the world’s largest security companies McAfee and Symantec downplayed the story. But the message had already gotten out — the net was under attack.

Brian Krebs, one of the country’s most respected cybercrime journalists and occasional Threat Level contributor, described that report: “Sadly, this botnet documented by NetWitness is neither unusual nor new.”

Those enamored with the idea of “cyberwar” aren’t dissuaded by fact-checking.

They like to point to Estonia, where a number of the government’s websites were rendered temporarily inaccessible by angry Russian citizens. They used a crude, remediable denial-of-service attack to temporarily keep users from viewing government websites. (This attack is akin to sending an army of robots to board a bus, so regular riders can’t get on. A website fixes this the same way a bus company would — by keeping the robots off by identifying the difference between them and humans.) Some like to say this was an act of cyberwar, but if it that was cyberwar, it’s pretty clear the net will be just fine.

In fact, none of these examples demonstrate the existence of a cyberwar, let alone that we are losing it.

But this battle isn’t about truth. It’s about power.

For years, McConnell has wanted the NSA (the ultra-secretive government spy agency responsible for listening in on other countries and for defending classified government computer systems) to take the lead in guarding all government and private networks. Not surprisingly, the contractor he works for has massive, secret contracts with the NSA in that very area. In fact, the company, owned by the shadowy Carlyle Group, is reported to pull in $5 billion a year in government contracts, many of them Top Secret.

Now the problem with developing cyberweapons — say a virus, or a massive botnet for denial-of-service attacks, is that you need to know where to point them. In the Cold War, it wasn’t that hard. In theory, you’d use radar to figure out where a nuclear attack was coming from and then you’d shoot your missiles in that general direction. But online, it’s extremely difficult to tell if an attack traced to a server in China was launched by someone Chinese, or whether it was actually a teenager in Iowa who used a proxy.

That’s why McConnell and others want to change the internet. The military needs targets.

But McConnell isn’t the only threat to the open internet.

Just last week the National Telecommunications and Information Administration — the portion of the Commerce Department that has long overseen the Internet Corporation for Assigned Names and Numbers — said it was time for it to revoke its hands-off-the-internet policy.

That’s according to a February 24 speech by Assistant Commerce Secretary Lawrence E. Strickling.

In fact, “leaving the Internet alone” has been the nation’s internet policy since the internet was first commercialized in the mid-1990s. The primary government imperative then was just to get out of the way to encourage its growth. And the policy set forth in the Telecommunications Act of 1996 was: “to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation.”

This was the right policy for the United States in the early stages of the Internet, and the right message to send to the rest of the world. But that was then and this is now.

Now the NTIA needs to start being active to prevent cyberattacks, privacy intrusions and copyright violations, according to Strickling. And since NTIA serves as one of the top advisers to the president on the internet, that stance should not be underestimated.

Add to that — a bill looming in the Senate would hand the president emergency powers over the internet — and you can see where all this is headed. And let the past be our guide.

Following years of the NSA illegally spying on Americans’ e-mails and phone calls as part of a secret anti-terrorism project, Congress voted to legalize the program in July 2008. That vote allowed the NSA to legally turn America’s portion of the internet into a giant listening device for the nation’s intelligence services. The new law also gave legal immunity to the telecoms like AT&T that helped the government illegally spy on American’s e-mails and internet use. Then-Senator Barack Obama voted for this legislation, despite earlier campaign promises to oppose it.

As anyone slightly versed in the internet knows, the net has flourished because no government has control over it.

But there are creeping signs of danger.

Where can this lead? Well, consider England, where a new bill targeting online file sharing will outlaw open internet connections at cafes or at home, in a bid to track piracy.

To be sure, we could see more demands by the government for surveillance capabilities and backdoors in routers and operating systems. Already, the feds successfully turned the Communications Assistance for Law Enforcement Act (a law mandating surveillance capabilities in telephone switches) into a tool requiring ISPs to build similar government-specified eavesdropping capabilities into their networks.

The NSA dreams of “living in the network,” and that’s what McConnell is calling for in his editorial/advertisement for his company. The NSA lost any credibility it had when it secretly violated American law and its most central tenet: “We don’t spy on Americans.”

Unfortunately, the private sector is ignoring that tenet and is helping the NSA and contractors like Booz Allen Hamilton worm their way into the innards of the net. Security companies make no fuss, since a scared populace and fear-induced federal spending means big bucks in bloated contracts. Google is no help either, recently turning to the NSA for help with its rather routine infiltration by hackers.

Make no mistake, the military industrial complex now has its eye on the internet. Generals want to train crack squads of hackers and have wet dreams of cyberwarfare. Never shy of extending its power, the military industrial complex wants to turn the internet into yet another venue for an arms race.

And it’s waging a psychological warfare campaign on the American people to make that so. The military industrial complex is backed by sensationalism, and a gullible and pageview-hungry media. Notable examples include the New York Times’s John “We Need a New Internet” Markoff, 60 Minutes’ “Hackers Took Down Brazilian Power Grid,” and the WSJ’s Siobhan Gorman, who ominously warned in an a piece lacking any verifiable evidence, that Chinese and Russian hackers are already hiding inside the U.S. electrical grid.

Now the question is: Which of these events can be turned into a Gulf of Tonkin-like fakery that can create enough fear to let the military and the government turn the open internet into a controlled, surveillance-friendly net.

What do they dream of? Think of the internet turning into a tightly monitored AOL circa the early ’90s, run by CEO Big Brother and COO Dr. Strangelove.

That’s what McConnell has in mind, and shame on The Washington Post and the Senate Commerce, Science and Transportation Committee for giving McConnell venues to try to make that happen — without highlighting that McConnell has a serious financial stake in the outcome of this debate.

Of course, the net has security problems, and there are pirated movies and spam and botnets trying to steal credit card information.

But the online world mimics real life. Just as I know where online to buy a replica of a Coach handbag or watch a new release, I know exactly where I can go to find the same things in the city I live in. There are cons and rip-offs in the real world, just as there are online. I’m more likely to get ripped off by a restaurant server copying down the information on my credit card than I am having my card stolen and used for fraud while shopping online. “Top Secret” information is more likely to end up in the hands of a foreign government through an employee-turned-spy than from a hacker.

But cyber-anything is much scarier than the real world.

The NSA can help private companies and networks tighten up their security systems, as McConnell argues. In fact, they already do, and they should continue passing along advice and creating guides to locking down servers and releasing their own secure version of Linux. But companies like Google and AT&T have no business letting the NSA into their networks or giving the NSA information that they won’t share with the American people.

Security companies have long relied on creating fear in internet users by hyping the latest threat, whether that be Conficker or the latest PDF flaw. And now they are reaping billions of dollars in security contracts from the federal government for their PR efforts. But the industry and its most influential voices need to take a hard look at the consequences of that strategy and start talking truth to power’s claims that we are losing some non-existent cyberwar.

The internet is a hack that seems forever on the edge of falling apart. For awhile, spam looked like it was going to kill e-mail, the net’s first killer app. But smart filters have reduced the problem to a minor nuisance as anyone with a Gmail account can tell you. That’s how the internet survives. The apocalypse looks like it’s coming and it never does, but meanwhile, it becomes more and more useful to our everyday lives, spreading innovation, weird culture, news, commerce and healthy dissent.

But one thing it hasn’t spread is “cyberwar.” There is no cyberwar and we are not losing it. The only war going on is one for the soul of the internet. But if journalists, bloggers and the security industry continue to let self-interested exaggerators dominate our nation’s discourse about online security, we will lose that war — and the open internet will be its biggest casualty.