– B. Lester

A Warning to the Economic and Political Elites: Listen Now

The Occupy Movement is not only resulting in the occupation of public space, but also in political space. We are al­ready shifting the dialogue and the movement has just begun.

When we started planning the occupation of Freedom Plaza six months ago, our goal was to create a place where the ignored voices of the American people could be heard. They are starting to be heard thanks to occupations all over the country. If it is not clear to the economic and political elites, this is the beginning of an American revolt.

Before considering occupation, we tried other avenues: elections, lobbying, petitioning, email campaigns, tele­phone campaigns, marches, rallies – but they were ineffective. The country continued going in the direction of concentrated wealth, rather than where super-majorities of Americans wanted to go.

The occupation of Freedom Plaza in downtown Washington, DC and occupations around the country display our message of anger at the unfairness of the economy, the expanding war quagmires and the corruption of government that result in the people’s urgent necessities being ignored in favor of more wealth for the top 1%.I don’t like sleeping in a tent in Freedom Plaza. But we see no other way to get our voices heard. We are occupying Freedom Plaza because Americans have been kept out of the political process. Money rules elections and lobbying, while the 99% are ignored.

We occupy Washington, DC because it is where big busi­ness money combines with campaign laws that corrupt government so that it does not respond to the people. Washington, DC is corporate occupied territory with 18,000 professional lobbyists, most of whom work for busi­ness interests pushing the agenda of concentrated wealth.

The great health care reform “triumph” of the Obama administration highlighted how out of touch government is with the people. For more than a decade Americans have simply wanted improved Medicare for all and removal of the unnecessary insurance industry. Instead, President Obama and the Democratic leadership pushed “reform” that further entrenched the insurance industry with hundreds of millions of dollars in annual tax subsidies and forced Americans to purchase flawed insurance. They kept single payer out of the debate because Medicare for all compared with insurance-based health care is less expensive, covers everybody and improves the quality of health care.

The response to the financial crisis was also inadequate. People from Wall Street responsible for the collapse were put in key positions in the administration. Congress was unable to pass a real stimulus early in the Obama era. In­stead a weak, partial stimulus was passed that may have slowed the economic collapse but missed the opportunity to turn things around. The financial reform was inadequate as it failed to break up the big banks, bring back Glass-Steagall or adequately regulate derivatives. Last week Citibank got off easy with a $285 million fine for the sale of a billion dollars in fraudulent mortgage derivatives but this was only one of many corrupt Citibank deals, the rest will not even be investigated. Once again, obvious and necessary steps were impossible due to corporate power.

Occupying public space is an opportunity to discuss political taboos. As the war drum against Iran began to beat Freedom Plaza held an Iran night with Persian food, music, dancing and discussion. We discussed why war on Iran was wrong, as well as the problems in the U.S. relationships with Saudi Arabia and Israel. And, we mentioned a reality almost never heard in U.S. media or politics – U.S. Empire. While the military will not say how many bases and out­posts it has the most thorough review estimates more than 1,100 around the world and now a new empire of drones. The British Empire had 37 bases at its peak and the Romans had 36. The U.S. Empire is a secret to most Americans only discussed as a euphemism –policeman of the world. This false description hides the real facts of exploitation and domination. This taboo needs to be broken so Americans can debate whether empire is good for the nation and the world.

The Occupy Movement is being driven by economic insecurity. Almost all Americans feel it that is why we are all part of the 99%. The economic insecurity is not because of lack of resources, but because political elites consistently send money to economic elites through tax breaks and give­aways resulting in the wealthiest 400 Americans hav­ing the wealth of 154 million of us, yet paying 17.4% in federal taxes while working Americans pay 25% to 30%. The tax structure needs to be restructured so wealth is taxed more than work, purchases of stocks, bonds and derivatives are taxed and a truly progressive income tax is put in place. It is this unfairness at a time of economic fear that is driving the Occupy Movement.

A warning to the elites: the occupations are only the beginning. This movement is in its early stages and is going to grow in ways that are hard to imagine right now. We know that decades of the expansion of corporate power will not be undone with one occupation. Plans are being made by some of us to move “Beyond Occupation” to the next steps of building a movement that represents all Americans – youth burdened with college loans and lousy jobs, seniors stuck in poverty in retirement with their Social Security and Medicare threatened, the middle class who worked their whole lives and are now part of the long-term unemployed, those who live in homes with underwater mortgages and fear foreclosure and of course the poor, homeless and mentally ill whose mistreatment has become more obvious as the public space we occupy draws them to us for food and housing.

A message for the elites: THIS IS JUST THE BEGINNING. LISTEN TO US NOW OR THE PRICE OF CHANGE WILL GET MORE EXPENSIVE FOR YOU. What do we seek? We seek an end to corporate rule and the shifting power to the people.

For more on the October2011 movement please visit October2011.?org

“Do you think the United States has a ruling class – a portion of the population who own tremendous wealth and who benefit from the way that decisions get made in this country? If you do, you are absolutely right. There is a ruling class in the United States, and it is just as rich and powerful as any ruling class has ever been.

“There are an even smaller number of people, the power elite – primarily a few thousand powerful white men, who make many of the decisions that affect our everyday lives. The decide where to invest money, where to build factories or whether to move jobs overseas; they decide what kinds of people get locked up, what’s on the evening news, who runs for elections (and who gets to vote), and what is the quality of the food we eat and the water we drink. They decide on the conditions where we work, the state of our neighborhoods, and who has access to health care. We pay in our wages, our taxes, our health, the quality of our housing, and often with our very lives.”

The author, Paul Kivel, writes that he grew up in an “upper-middle-class white Jewish suburb of Los Angeles in the 1950s and early 1960s. My grandfather was successful in real estate and my father was a stockbroker. The end result was to increase my family’s wealth so that we ended up at the top of the managerial class, and were certainly wealthy by most people’s definition.”

Is Mr. Kivel a class traitor for writing this book? I don’t know, but I find the book to be a very interesting and eye-opening experience. It has a lot of end notes for further investigation, should the reader care to do so. I’m certain that reading the book would give anyone who supports the Occupy Wall Street movement a much better understanding of what it is that the people in that movement are protesting about. Highly recommended for all of the talking heads in the main stream media who keep saying that they have no idea what the Occupy Wall Streeters really want.

A Standard & Poor’s director said for the first time Thursday that one reason the United States lost its triple-A credit rating was that several lawmakers expressed skepticism about the serious consequences of a credit default — a position put forth by some Republicans.

Without specifically mentioning Republicans, S&P senior director Joydeep Mukherji said the stability and effectiveness of American political institutions were undermined by the fact that “people in the political arena were even talking about a potential default,” Mukherji said.

“That a country even has such voices, albeit a minority, is something notable,” he added. “This kind of rhetoric is not common amongst AAA sovereigns.”

I hope everyone remembers this, come next November.

What I liked most about the article is how Mr. Levine characterized Americans as suffering from “battered people’s syndrome” and “corporatocracy abuse”. He goes on to write that, “as a clinical psychologist who has worked with abused people for more than 25 years, it does not surprise me to see that when we as individuals or a society eat crap for too long, we become psychologically too weak to take action.”

This is an interesting and important article. It is a long but an easy read and it just might lead you to start looking further. The last sentence of the article is chilling, though: “And when people feel they have nothing left to lose and let go of their fear, watch out.” We only have to look at what is happening in London to see the truth of those words. Let’s hope that it doesn’t come to that.

Mr. Levine has a number of very interesting articles posted on his blog – I highly recommend browsing his site.

How Americans Can “Get Up, Stand Up” Against Corporatocracy Rule

By Bruce Levine on July 20, 2011

Many Americans recognize that the United States is neither a genuine democracy nor a real republic in which elected officials actually represent the people. Instead, the United States is a corporatocracy in which Americans are ruled by a partnership of giant corporations, the extremely wealthy elite, and corporate-collaborator government officials. There are at least three major pieces to the puzzle of transforming corporatocracy tyranny into something closer to democracy. First, it is necessary but not sufficient that Americans be informed about the truths of corporatocracy rule. The good news is that despite the corporate media’s failure to reveal many important truths, polls show that the majority of Americans—either through the independent media or their own common sense—know enough about the Afghanistan and Iraq wars, Wall Street bailouts, and health insurance rip-offs to oppose corporatocracy policies here.

Second, in addition to awareness of economic and social injustices, it is also necessary to have knowledge of strategies and tactics that oppressed people have historically used to overcome tyranny. Third, a routinely overlooked piece of the puzzle is overcoming the problem of demoralization. There are a great many Americans who have been so worn down by decades of personal and political defeats, financial struggles, social isolation, and daily interaction with impersonal and inhuman institutions that they no longer have the energy for political actions.

Polls Reveal the Myth of U.S. Democracy

Americans, for quite some time, have opposed the U.S. government’s wars in Afghanistan and Iraq, but We the People have zero impact on policy. A March 10-13, 2011 ABC News/Washington Post poll asked, “All in all, considering the costs to the United States versus the benefits to the United States, do you think the war in Afghanistan has been worth fighting, or not?”; 31 percent said “worth fighting” and 64 percent said “not worth fighting.” When a CNN/Opinion Research Corporation Poll on December 17-19, 2010 asked, “Do you favor or oppose the U.S. war in Afghanistan?,” only 35 percent of Americans favored the war, while 63 percent opposed it. For several years, the majority of Americans have also opposed the Iraq War, typified by a 2010 CBS poll which reported that 6 of 10 Americans view the Iraq War as “a mistake.”

The opposition by the majority of Americans to current U.S. wars has steadily increased for several years. However, if you watched only the corporate media’s coverage of the 2010 election between Democratic and Republican corporate-picked candidates, you might not even know that the United States was involved in two wars—two wars that are not only opposed by the majority of Americans but which are also bankrupting the United States.

How about the 2008 Wall Street bailout? Even when Americans believed the lie that it was only a $700 billion bailout, they opposed it. Their opinion was irrelevant. In September 2008, despite the corporate media’s attempts to terrify Americans into believing that an economic doomsday would occur without the bailout of so-called “too-big-to-fail” corporations, Americans still opposed it. A Los Angeles Times/Bloomberg poll in September 2008, asked, “Do you think the government should use taxpayers’ dollars to rescue ailing private financial firms whose collapse could have adverse effects on the economy and market, or is it not the government’s responsibility to bail out private companies with taxpayers’ dollars?”; 31 percent of Americans said we should “use taxpayers” dollars while 55 percent said it is “not government’s responsibility.” Also in September 2008, both a CBS News/New York Times poll and a USA Today/Gallup poll showed Americans opposed the bailout. This disapproval of the bailout was before most Americans discovered that the Federal Reserve had loaned many trillions of dollars more to financial firms, other giant corporations, and foreign central banks (which, if this had been known, would certainly have upset even more Americans).

What about universal health insurance? Despite the fact that several 2009 polls showed that Americans actually favored a “single-payer” or “Medicare-for-all” health insurance plan, it was not even on the table in the Democrat-Republican 2009–2010 debate over health insurance reform legislation. And polls during this debate showed that an even larger majority of Americans favored the government providing a “public option” to compete with private health insurance plans. But the public option was quickly pushed off the table in the Democratic-Republican debate. A July 2009 Kaiser Health Tracking Poll asked, “Do you favor or oppose having a national health plan in which all Americans would get their insurance through an expanded, universal form of Medicare-for-all?” In this Kaiser poll, 58 percent of Americans favored a Medicare-for-all universal plan, and only 38 percent opposed it—and a whopping 77 percent favored “expanding Medicare to cover people between the ages of 55 and 64 who do not have health insurance.” A February 2009 CBS News/New York Times poll reported that 59 percent of Americans said the government should provide national health insurance. And a December 2009 Reuters poll reported that, “Just under 60 percent of those surveyed said they would like a public option as part of any final healthcare reform legislation.”

The Corporatocracy in Control

In the U.S. corporatocracy, as in most modern tyrannies, there are elections, but the reality is that in elections in a corporatocracy, as is the case in elections in all tyrannies, it’s in the interest of the ruling class to maintain the appearance that the people have a say, so more than one candidate is offered. In the U.S. corporatocracy, it’s in the interest of corporations and the wealthy elite that the winning candidate is beholden to them, so they financially support both Democrats and Republicans. It’s in the interest of corporations and the wealthy elite that there are only two viable parties—this cuts down on bribery costs. And it’s in the interest of these two parties that they are the only parties with a chance of winning. In the U.S. corporatocracy, corporations and the wealthy elite directly and indirectly finance candidates, who are then indebted to them. It’s common for these indebted government officials to appoint key decision-making roles to those friendly to corporations, including executives from these corporations. And it’s routine for high-level government officials to be rewarded with high-paying industry positions when they exit government. It’s common and routine for former government officials to be given high-paying lobbying jobs so as to use their relationships with current government officials to ensure that corporate interests will be taken care of.

The integration between giant corporations and the U.S. government has gone beyond revolving doors of employment (exemplified by George W. Bush’s last Treasury secretary, Henry Paulson, who had previously been CEO of Goldman Sachs; and Barack Obama’s first chief economic adviser, Lawrence Summers, who in 2008 received $5.2 million from hedge fund D. E. Shaw). Nowadays, the door need not even revolve in the U.S. corporatocracy. For example, when President Obama earlier in 2011 appointed General Electric CEO Jeffrey Immelt as a key economic advisor, Immelt kept his job as CEO of General Electric (which paid no federal taxes on over $14 billion dollars in profits last year).

The United States is not ruled by a single deranged dictator but by an impersonal corporatocracy. Thus, there is no one tyrant that Americans can first hate and then finally overthrow so as to end senseless wars and economic injustices. Revolutions against Qaddafi-type tyrants require enormous physical courage. In the U.S. corporatocracy, the first step in recovering democracy is the psychological courage to face the humiliation that we Americans have neither a democracy nor a republic, but are in fact ruled by a partnership of giant corporations, the extremely wealthy elite, and corporate-collaborator government officials.

Psychological and Cultural Building Blocks

Activists routinely become frustrated when truths about lies, victimization, and oppression don’t set people free to take action. But as a clinical psychologist who has worked with abused people for more than 25 years, it does not surprise me to see that when we as individuals or a society eat crap for too long, we become psychologically too weak to take action.

Other observers of subjugated societies have recognized this phenomenon of subjugation resulting in demoralization and fatalism. Paulo Freire, the Brazilian educator and author of Pedagogy of the Oppressed, and Ignacio Martin-Baró, the El Salvadoran social psychologist and popularizer of “liberation psychology,” understood this psychological phenomenon. So too did Bob Marley, the poet laureate of oppressed people around the world. Many Americans are embarrassed to accept that we, too, after years of domestic corporatocracy subjugation, have developed what Marley called “mental slavery.” But unless we acknowledge that reality, we won’t begin to heal from what I call “battered people’s syndrome” and “corporatocracy abuse.” A vitally important piece of the solution is overcoming the problem of demoralization and fatalism and creating the “energy to do battle.”

There exist solid strategies and time-tested tactics that people have long used to battle the elite. However, these strategies and tactics by themselves are not sufficient. For large-scale democratic movements to have enough energy to get off the ground, certain psychological and cultural building blocks are required.

Historian Lawrence Goodwyn has studied democratic movements and written extensively about the Populist Movement in the United States that occurred during the end of the 19th century, what he calls “the largest democratic mass movement in American history.” Goodwyn concludes that democratic movements are initiated by people who are not resigned to the status quo or intimidated by established powers, and who have not allowed themselves to be “culturally organized to conform to established hierarchical forms.” Goodwyn writes in The Populist Moment: “Democratic movements are initiated by people who have indi­vidually managed to attain a high level of personal political self-respect…. In psychological terms, its appearance reflects the development within the movement of a new kind of collec­tive self-confidence. ‘Individual self-respect’ and ‘collec­tive self-confidence’ constitute, then, the cultural building blocks of mass democratic politics.”

Without individual self-respect, people do not believe that they are worthy of power or capable of utilizing power wisely, and they accept as their role being a subject of power. Without collective self-confidence, people do not believe they can succeed in wresting power away from their rulers. There are many battlefields—from schools to the workplace—on which self-respect can be either won or lost and it is in the interest of the elite to make sure that their opponents lose sight of these multiple battlefields. If we don’t recognize a battlefield, we can lose an opportunity to create those cultural and psychological building blocks necessary for democracy.

People seeking democracy, in addition to individual self-respect, must also have collective self-confidence—the belief that they can succeed as a group—if their goal is to be achieved and sustained. They must have faith that, though imperfect in their decision making, they are capable of creating a freer and more just society than one orga­nized and controlled by the elite. Thus, in this battle against the corporatocracy, human relationships are vitally important. It is in the interest of the elite to keep people divided and distrust­ing one another. It is in the interest of people working toward democracy to build respectful and cooperative human relationships across all levels of society.

The Energy to Do Battle

Whether one’s abuser is a spouse or the corporatocracy, there are parallels when it comes to how one can maintain enough strength to be able to free oneself when the opportunity presents itself—and then heal and attain even greater strength. This difficult process requires:

Honesty that one is in an abusive relationship

Self-forgiveness that one is in an abusive relationship

A sense of humor about one’s predicament

The good luck of support, and the wisdom to utilize this good luck

It is a waste of our precious energy to beat ourselves up for having succumbed to corporatocracy abuse. Our energy is better spent redefining ourselves as human beings who have beliefs and values that define us more than our fears and greed (which the corporatocracy exploits to control us). We need to redefine ourselves as worthy of respect and capable of effecting change. And then we can use our energy to provide respect and create confidence in others, which will produce even more energy for ourselves. This is part of “liberation psychology,” in which critically thinking people can regain morale, discover the various ways people are energized, learn how to combat social isolation and build community, and understand how we can forge alliances among anti-authoritarians.

Critical to healing from “battered people’s syndrome” and “corporatocracy abuse” and gaining strength is a liberation from one’s fatal­ism, which has become an internal oppression. External oppression, left unchallenged, results ultimately in fatalism, which makes it less likely one will challenge oppression. One way of extricating from this fatalistic vicious cycle is through what Freire, Martin-Baró, and others have called conscien­tizacao or “critical consciousness.” With critical consciousness, an individual can identify both external oppression and self-imposed internal oppression—and free oneself from self-imposed powerlessness. Critical consciousness cannot be learned in a top-down manner. It is essentially a self-education process among equals. Liberation from fatalism and powerlessness is a process in which participants are not mere objects of instruction or of treatment. Instead of being acted upon, they are taking actions, learning, and then taking even more powerful actions.

Recent History and Realistic Hope

The lesson from history is that tyrannical and dehumanizing institu­tions are often more fragile than they appear, and with time, luck, morale, and the people’s ability to seize the moment, damn near anything is possi­ble. We never really know until it happens whether or not we are living in that time when historical variables are creating opportuni­ties for seemingly impossible change.

Until shortly before it occurred, the collapse of the Soviet empire seemed an impossibility to most Americans, who saw only mass resignation within the Soviet Union and its sphere of control. But the shipyard workers in Gdansk, Poland did not see their Soviet and Communist Party rulers as the all-powerful forces that Americans did. And so Polish workers’ Solidarity, by simply refusing to go away, provided a strong dose of morale across Eastern Europe at the same time other historical events weakened the Soviet empire.

Arrogance by oppressive authorities makes them miscalculate the fear and greed variables, important in keeping people passive. In the case of Hosni Mubarak, his greed and arrogance resulted in him not spreading enough of his loot around with enough thugs, so not enough of them cared about his fall from power. Once Egyptians lost fear and took action, they found even more courage. Arrogance of oppressive forces makes them a lot more fragile than they appear.

And in the United States, when it appeared to the elite that American workers and their supporters had become completely pacified, once again, arrogance by corporate-collaborator government officials resulted in miscalculation. In Wisconsin, for example, public employees had actually agreed to eat considerable crap, accepting a major increase in how much they would pay toward their pensions and healthcare benefits. But even those major concessions were not good enough for Wisconsin’s governor, who continued to demand the elimination of collective bargaining in key areas. Eliminating collective bargaining rights on health insurance, pension, and work safety is a blatant attempt to completely crush a union. By this “union death threat,” workers and union leaders were put in a position of having virtually nothing left to lose in terms of retaining a meaningful union. And when people feel they have nothing left to lose and let go of their fear, watch out.

As evidence of this assertion, check out this article, almost a year old:

Which Party Poses the Real Risk to Social Security’s Future?

Monday, 08/16/2010

by Marshall Auerback

Hint: it’s not Republicans.

Social Security remains one of the greatest achievements of the Democratic Party since its creation 75 years ago. Although Republicans have historically fulminated against the program (Ronald Reagan once likened it as something akin to “socialism”), they have actually made little headway in touching this sacred “third rail” in American politics. President Bush pushed for partial privatization of the program in 2005, but the proposal gained no policy traction (even within his own party) because Social Security continues to be hugely popular with American voters. It’s a universal program that benefits all Americans, not a government handout to a few privileged corporations.

More ….

Worse Than Hoover, by Marshall Auerback

As a side note – pay attention to the sentence about CBS News and Scott Pelley. Then, go read Jerry Mander’s book on television, which I wrote about in this post. This is precisely how the ruling elite creates the reality so that these kinds of bills are supported by the American public.

The title of the essay makes no sense at all to me, so perhaps you’d be best advised to just ignore it and read the article!

The Debt Ceiling Set For Progressive Repealing

By Prof. Michael Hudson

Global Research, July 29, 2011

Mr. Obama’s scare tactics to get Democrats to vote for his Republican Wall Street plan

The Wall Street bailout melodrama should be viewed as a dress rehearsal for today’s debt-ceiling non-crisis.

You know that the debt kerfuffle is as melodramatically staged as a World Wrestling Federation exhibition when Mr. Obama makes the blatantly empty threat that if Congress does not “tackle the tough challenges of entitlement and tax reform,” there won’t be money to pay Social Security checks next month. In his debt speech last night (July 25), he threatened that if “we default, we would not have enough money to pay all of our bills – bills that include monthly Social Security checks, veterans’ benefits, and the government contracts we’ve signed with thousands of businesses.”

This is not remotely true. But it has become the scare theme for over a week now, ever since the President used almost the same words in his interview with CBS Evening News anchor Scott Pelley.Of course the government will have enough money to pay the monthly Social Security checks. The Social Security administration has its own savings – in Treasury bills. I realize that lawyers (such as Mr. Obama and indeed most American presidents) rarely understand economics. But this is a legal issue. Mr. Obama certainly must know that Social Security is solvent, with liquid securities to pay for many decades to come. Yet Mr. Obama has put Social Security at the very top of his hit list!

The most reasonable explanation for his empty threat is that he is trying to panic the elderly into hoping that somehow the budget deal he seems to have up his sleeve can save them. The reality, of course, is that they are being led to economic slaughter. (And not a word of correction reminding the President of financial reality from Rubinomics Treasury Secretary Geithner, neoliberal Fed Chairman Bernanke or anyone else in the Wall Street Democrat administration, formerly known as the Democratic Leadership Council.)

It is a con.

Mr. Obama has come to bury Social Security, Medicare and Medicaid, not to save them. This was clear from the outset of his administration when he appointed his Deficit Reduction Commission, headed by avowed enemies of Social Security Republican Senator Alan Simpson of Wyoming, and President Clinton’s Rubinomics chief of staff Erskine Bowles. Mr. Obama’s more recent choice of Republicans and Blue Dog Democrats delegated by Congress to rewrite the tax code on a bipartisan manner – so that it cannot be challenged – is a ploy to pass a tax “reform” that democratically elected representatives never could be expected to do.

The devil is always in the details. And Wall Street lobbyists always have such details tucked away in their briefcases to put in the hands of their favored congressmen and dedicated senators. And in this case they have the President, who has taken their advice as to whom to appoint as his cabinet to act as factotums to capture the government on their behalf and create “socialism for the rich.”

There is no such thing, of course. When governments are run by the rich, it is called oligarchy. Plato’s dialogues made clear that rather than viewing societies as democracies or oligarchies, it was best to view them in motion. Democracies tended to polarize economically (mainly between creditors and debtors) into oligarchies. These in turn tended to make themselves into hereditary aristocracies. In time, leading families would fight among themselves, and one group (such as Kleisthenes in Athens in 507 BC) would “take the people into his party” and create a democracy. And so the eternal political triangle would go on.

This is what is happening today. Instead of enjoying what the Progressive Era anticipated – an evolution into socialism, with government providing basic infrastructure and other needs on a subsidized basis – we are seeing a lapse back into neo-feudalism. The difference, of course, is that this time around society is not controlled by military grabbers of the land. Finance today achieves what military force did in times past. Instead of being tied to the land as under feudalism, families today may live wherever they want – as long as they take on a lifetime of debt to pay the mortgage on whatever home they buy.

And instead of society paying land rent and tribute to conquerors, we pay the bankers. Just as access to the land was a precondition for families to feed themselves under feudalism, one needs access to credit, to water, medical care, pensions or Social Security and other basic needs today – and must pay interest, fees and monopoly rent to the neo-feudal oligarchy that is now making its deft move from the United States to Ireland and Greece.

The U.S. Government has spent $13 trillion in financial bailouts since Lehman Bros. failed in September 2008. But Mr. Obama warns that thirty years from now, the Social Security fund may run a $1 trillion deficit. It is to ward it off that he urges dismantling the plans for such payments now.

It seems that the $13 trillion used up all the money the government really has. The banks and Wall Street firms have taken the money and run. There is not enough to pay for Social Security, Medicare or other social spending that the Blue Dog Democrats and Republicans now plan to cut.

Not right away. The plan will be to “paper over” the current crisis by delegating the plans to a “Deficit Reduction Commission #2,” appointed from Congressional members.

Finally, we have “Change we can believe in.”

Real change is always surprising, after all.

The Faux Crisis

Usually a crisis is needed to create a vacuum into which these toxic details are fed. Wall Street does not like real crises, of course – except to make quick computer-driven speculative gains on the usual fibrillation of today’s zigzagging markets. But when it comes to serious money, the illusion of a crisis is preferred, staged melodramatically to wring the greatest degree of emotion out of the audience much like a good film editor edits a montage sequence. Will the speeding train run over the girl strapped to the tracks? Will she escape in time?

The train is debt; the girl is supposed to be the American economy. But she turns out to be Wall Street in disguise. The exercise turns out to be a not-so-divine comedy. Mr. Obama offers a plan that looks very Republican. But the Republicans say no. There is an illusion of a real fight. They say Obama is socialist.

Democrats express shock at the giveaway being threatened. Many say, “Where is the real Obama?” But it seems that the real Obama turns out to be a Republican Wall Street imposter in Democratic clothing. That is what the Democratic Leadership Committee basically is: Wall Street Democrats.

This is not as much of an oxymoron as it may sound. There is a reason why today’s post-Clinton Democrats are the natural party to undo what FDR and earlier Democrats stood for. A Democratic Senate never would stand for such giveaways to Wall Street and double-cross of their urban constituency if a Republican president would propose what Mr. Obama is putting before them.

Here’s what the next Republican presidential candidate can say: “You know that whatever we Republicans want, Mr. Obama will support us. If you don’t want a Republican policy, then you should vote for me for president. Because a Democratic Congress will oppose a Republican policy if we propose it. But if Mr. Obama proposes it, congress will be de-toothed, and cannot resist.”

It’s the same story in Britain, where the Labour Party is called upon to finish up the job that the Conservatives start but need New Labour to subdue popular opposition to privatizing the railroads and a Public/Private Partnership financial giveaway for the London tube line. And it’s the same story in France, where a Socialist government is supporting the privatization program dictated by the European Central Bank.

Round up the Usual Fallacies

Whenever one finds government officials and the media repeating an economic error as an incessant mantra, there always is a special interest at work. The financial sector in particular seeks to wrong-foot voters into believing that the economy will be plunged into crisis if Wall Street does not get its way – usually by freeing it from taxes and deregulating it.

Mr. Obama’s first fallacy is that the government budget is like a family budget. But families can’t write IOUs and have the rest of the world treat it as money. Only governments can do that. It is a privilege that the banks would now like to obtain – the ability to create credit freely on their computer keyboards, and charge interest for what is almost free, and what governments can indeed create for free. (That is the State Theory of Money. See the UMKC Economics Blog.)

“Now, every family knows that a little credit card debt is manageable. But if we stay on the current path, our growing debt could cost us jobs and do serious damage to the economy.” But economies need government money to grow – and this money is provided by running federal budget deficits. This has been the essence of Keynesian counter-cyclical spending for more than half a century. Until the present, it was Democratic Party policy.

It’s true that Pres. Clinton ran a budget surplus. The economy survived by the commercial banking system supplying the credit needed to grow – at interest. To force the economy back into this reliance on Wall Street rather than on government, the government needs to stop running budget deficits. The economy will then have a choice: to shrink sharply, or to turn almost all the economic surplus over to banks as economic rent on their credit-creation privilege.

Mr. Obama also pretends that credit ratings agencies are able to act as mascots for their clients, the large financial underwriters, by making the entire economy pay even higher interest rates on its credit cards and banks. “For the first time in history,” Mr. Obama dissembled, “our country’s Triple A credit rating would be downgraded, leaving investors around the world to wonder whether the United States is still a good bet. Interest rates would skyrocket on credit cards, mortgages, and car loans, which amounts to a huge tax hike on the American people.”

The reality is that running a budget surplus would increase interest rates, by forcing the economy into captivity to the banking system. The Obama administration is now deep into its Orwellian rhetorical phase.

Why Wall Street needs Obama Democrats to shepherd Rubinomics #2 through Congress

During Mr. Obama’s speech I could not help feeling that I had heard it all before. And then I remembered. Back in 2008, Treasury Secretary Henry Paulson sought to counter Sheila Bair’s argument that all FDIC-insured depositors would be able to ride out the September crisis, with only the reckless gamblers losing the gains they hoped to make on their free credit. “If the financial system were allowed to collapse,” he warned in his Reagan Library speech, “it is the American people who would pay the price. This never has been just about the banks; it has always been about continued prosperity and opportunity for all Americans.”

But of course, it is all about the banks! Wall Street knows that to get sufficient Congressional votes to roll back the New Deal, Social Security, Medicare and Medicaid, a Democratic president needs to be in office. A Democratic Congress would block any Republican president trying to make the kind of cuts that Mr. Obama is sponsoring. But Congressional Democratic opposition is paralyzed when President Obama himself – the liberal president par excellence, America’s Tony Blair – acts as cheerleader for cutting back entitlements and other social spending.

So just as the City of London backed Britain’s Labour Party in taking over when the Conservative Party could not take such radical steps as privatizing the railroads and London tube system, and just as Iceland’s Social Democrats sought to plunge the economy into debt peonage to Britain and Holland, and the Greek Socialist Party is leading the fight for privatization and bank bailouts, so in the United States the Democratic Party is to deliver its constituency – urban labor, especially the racial minorities and the poor who are most injured by Pres. Obama’s austerity plan – to Wall Street.

So Mr. Obama is doing what any good demagogue does: delivering his constituency to his campaign contributors on Wall Street. Yves Smith has aptly called it Obama’s Nixon goes to China moment in reverse.

The Republicans help by refraining from putting forth a credible alternative presidential candidate. The effect is to give Mr. Obama room to move far to the right wing of the political spectrum. Far enough so that it is his own Democrats who are most intent on scaling back Social Security, not the Republicans.

This is done most easily under pressure of near panic. This worked after September 2008 with TARP, after all. The Wall Street bailout melodrama should be viewed as a dress rehearsal for today’s debt-ceiling non-crisis.