January 1, 1942 - Eighty years later or "Don't Look Up"

Hope everyone had a great holiday and is looking forward to the New Year. Unfortunately, in the US and around the world, good cheer may be hard to come by. Looking at what’s happening, I have to wonder how my parents might have felt exactly 80 years ago on Jan. 1, 1942, with my mother already pregnant with me.  The Great Depression of the preceding 12 years was just receding when the world was plunged into a life-or-death struggle against fascism. That truly was the greatest generation; let’s hope their grandchildren can rise to the challenges we face today.

 

I find it almost impossible to believe that the richest nation in the history of the world, a self-proclaimed democracy … of the people, by the people and for the people …  continues to find it impossible to pay its working population a living wage; to eliminate childhood poverty; to provide its people with affordable, much less free health care; to meet the challenge of a pandemic, both home and abroad; to address the existential crisis of global warming in any meaningful way; or to provide reparations to those communities of color that have been systematically terrorized and exploited by official and unofficial white supremacy.

 

Wow, that was a long sentence. Unfortunately, it only begins to capture the failure of American society to meet the needs of its people. With the enormous wealth and power that dwarfs any other nation in history, we find ourselves mired in crisis after crisis.

 

I recently watched the Netflix movie “Don’t Look Up”. The movie (which has a star-studded cast) focuses on the discovery of a comet heading toward collision with earth that scientists predict (with a 98% certainty) will exterminate the entire human race unless it can be diverted from its path. The media ignores the gravity of the threat (treating it as a side show), the politicians are more interested in getting elected than in meeting the threat and the billionaires are focused on how much money they can make from the rare earth minerals in the comet. For the rest of us, we are simply told “don’t look up”.

 

The names may have been changed to protect the guilty, but it is more of a documentary than a parody.  It clearly illustrates “the interconnected debasement of America’s politics, pop culture, conventional media, social media, spectacle, tech and corporate elite—and of how the corruption of each element corrupts the other, feeding the general cynicism…” (Robert Kuttner, The American Prospect) Why, we have to ask, are we hurtling down this path? While there are many factors (more even than are pointed to in the movie), I think we need to focus on three.

 

The first is one I’ve been writing about for years, particularly after having read the book Runaway Inequality (BTW, if you don’t have one, I’ll be happy to ship one off to you gratis). In the last 40 years, policies based on neoliberalism (think trickledown economics and deregulation, although it’s more complicated than that) have led to the greatest concentration of wealth in the hands of a few in history. According to Oxfam, the “world's 2,153 billionaires have more wealth than the 4.6 billion people who make up 60 percent of the planet's population”. And that was before COVID! Note, that while people are dying by the thousands because they don’t have medical care, a couple of these billionaires are taking joy rides in space. Thus, the gap between the rich and the rest of us grows to the point where we are living in two totally different worlds. Sort of reminds me of a Dickens’ novel, only on steroids.

 

Don’t get me wrong, I’m not blaming runaway inequality on the greed of these 2,153 billionaires although almost all of them are greedy bastards. The problem is the economic system that allows them to accumulate that wealth (and pass it on to their children, think Donald Trump). Now neoliberalism claims that this system functions in a natural way (the invisible hand of the marketplace) to produce the best possible outcome for society. Competition ensures that everyone gets their “fair share”. The capitalists (those who own the companies) will use their profits to invest in greater productivity and a rising tide will float all boats. The problem here is that the large majority of folks don’t have boats.

 

I’m sorry, but I’m a little too old to believe in fairy tales. While it is true that the capitalists use some of their profits to invest in their businesses (usually with the goal of eliminating some of their workers), they use a lot of it to just multiply their wealth. One grand scheme that they’ve hit upon is stock buybacks. (Note – this used to be illegal, it was considered stock manipulation). In some cases, companies are using ALL their profits (or even borrowing money) to buy back their stock, greatly increasing the value of the stocks still outstanding – which (you guessed it) makes the company CEOs and other big stockholders ever richer. These gains have the added advantage of not being taxable in most cases. It’s a win-win for the 1%, and a lose-lose for the rest of us.

 

Which brings us to the second factor, which I would like to refer to as regulatory capture. To understand this, we need to note that the neoliberals are dead wrong about the invisible hand of the marketplace functioning naturally. From day one of capitalism, the rules of the marketplace have been set and regulated by …  the government! The marketplace is not some Wild West show. Governments set the rules and enforce them; otherwise, there would be chaos. Take patents for example. They can grant exclusive production rights for up to 20 years. The question is in whose interest these rules are made. In the case of patents for COVID vaccines, the government enforces them to the detriment of billions of people around the world. By influencing, or better yet capturing, the government regulatory functions, capitalists can be sure that these agencies work to their benefit.

 

A very clear historical example of this is the Federal Reserve Bank. In the late 1800s, the Populists fought for the banking system to be publicly owned and operated. What they ended up with was the Fed, which is made up of bankers, who regulate the banking system in the US; that is, the bankers regulate themselves. The ultimate in regulatory capture.

 

One thing that the Fed makes sure is to keep inflation under control, because banks (and all creditors) loose money when we have even moderate inflation. That’s because the money they collect on their loans has lost value since they made the loan. Workers, on the other hand can benefit from inflation (if they fight for a cost-of-living increase based on inflation) because they owe money, and when they have to pay it back, it’s actually worth less than when they borrowed it

 

(An aside – The populists did get one public bank, which is still around today, the Bank of North Dakota. Check it out, it is a great example of what a public bank can do to serve the community and it is one of the most stable banks in the country).

 

The 1% does not just want to capture the regulatory agencies of government, they are set on using some of their great wealth to capture control of government and both major political parties. As I’m sure you are way too aware, they’ve been very successful.

 

The third factor is the media. While the media has never been a “neutral” force in politics, prior to the advent of television, it was possible for the working class and its advocates to compete on some levels with the capitalists in getting its message out. TV changed all that. The nightly news replaced the morning edition of the local newspaper. And the corporations who own the networks and the local stations determine what is news and how to report it. On top of that, since the main function of TV was entertainment, the news had to be entertaining too. Ratings were critical to advertising revenue and so the nightly news became a real shit show, for the most part.

With the advent of the internet, there seemed to be hope that this new media would democratize the distribution of information and news. What happened is another case of capture by the very wealthy. On top of that, the social media created a space for the propagation of lies and conspiracy theories which have an emotional appeal to many of those alienated by today’s society.

 

All of this does not present a pretty picture, but one that we need to face if we are going to make (or in some cases, unmake) the changes to return some semblance of democracy and justice in the US. Like the Greatest Generation, we don’t have a choice. We either act or see the world go up in flames. "No more water, the fire next time".

 

In my next post, I’m going to focus on one other critical issue that has continued to prevent American society from addressing the crises that face us - the costs of empire.