Conservative Catharsis: Blame Deregulation and Privatization

George W Bush broke the world. It was pretty fucked up to begin with, after years of laissez-faire economics practiced by all American presidents since FDR, but much more so since Reagan. The conservative philosophy was corrupted by deregulators who's belief in the free market completely left out the fact that most people are greedy bastards who will steal everything that's not tied down.

Now this upper class of well-to-do Reaganites, many of them in the Democratic party, have drained the wealth of this country into their walled communities and private security forces, while they whine about their portfolios being worthless. What did they think when they were doing everything Phil Graham suggested? Did they think we could just trust the robber baron class not to be robber barons?

The profit motive works just fine in a regulated market, where everyone has their cards above the table, and we all play by the same rules, which we can all understand. Old timey conservatives were for stringent regulations, especially capital requirements on banks and the like. To be a fiscal conservative meant, literally, to not take crazy risks. A little risk for a decent return, but nothing crazy.

Well, you guys had your chance and you blew it. But what's funny about it is that Karl Marx basically predicted it. It's not hedge fund science, you know. If you have a bunch of money in one place, and you loosen the rules that protect it, someone will steal it. Human nature--GREED--is not good in a market because the greedy will take down the rest of us in that inter-dependent system.

So, now we're going to try something else. It's kind of like what FDR tried, at least in the sense of the largess, the investment in infrastructure and people, and the like. But it's also like FDR in the sense that he realized that everyone deserves some basic floor to stand on: a starting place so that we are all, indeed, created equal when we become a member of The Class of US Taxpayers. Now some of us might get more out of that system than we paid in, but the ones at the top will still get something out of it. They'll have clean dishes to eat cooked food on in restaurants. They'll have firemen and cops and teachers and those people will have the basic dignity of health coverage, affordable housing and utilities, and the like. If the private enterprise system refuses to charge enough for the products and services so that those people can be paid enough to buy their own coverage, then it is we the people, the government, who must force them to, through taxation.

And if you don't believe that, then your option is to have a whole class of people who are broke, unhealthy, and damn angry about it. In this country, those people vote for someone who will make the playing field fair again. In the current view of the dominant conservative voices, those people can just crawl off and die somewhere. Or wind up in prison where we subsidize their everything.

There will be people at the top who pay for it. That is populism. That is the price you pay for living in a country where we pay people who stock shelves at Wal Mart so little that they qualify for government subsidized health care. I'm sure most free market conservatives would prefer to have Wal Mart take care of their employees. But then how could they be the low price leader?

It's still a free country, and there's going to be a free market for practically anything (including things that are illegal). There will be a free market for health care and those of you who can afford it are more than welcome to sink your dollars into a system that profits from your sickness on one end (the HMOs) and profits from your minimal care on the other (the insurance companies who don't want to pay, they just want to collect). I ask you, which force will drive doctor salaries lower? A government that tries to enforce fairness, no matter how cumbersome a bureaucracy that develops in order to implement that fairness (and, again, medicare does it with amazingly low administrative costs compared to private companies), or a private insurance company that is trying desperately to keep outlays down because raising premiums is just making them lose customers?

I'm all for personal responsibility. I grow a lot of my own food. I own my own small business and work for a lot less than minimum wage. I would require more stringent food requirements on Food Stamp recipients, like me, to eat healthy foods and support local, small, and organic farmers. But when it comes to something as complex as health care, I just don't trust the greedy bastards to run it anywhere but into the ground.

I lived in LA for 20 years. I remember the Enron fiasco during the electricity crisis. We had been sold a bill of goods about privatizing and deregulating the electricity markets that turned out to be worse than a load of horse shit (which is at least good fertilizer). It is a perfect example of how unfettered markets only serve as suet to a bunch of hungry birds like Ken Lay who fly away with the whole chunk if they can.

At that point, I started looking into co-ops, public ownership of utilities, community supported agriculture, and credit unions. I like employee owned companies and try to support them when I can. Guess what all those examples are? Communist! They take the assets, the factories, the power lines, the loan portfolios, and they collectively own them among all the members. Where I live now, we have an electric co-op (a remnant of FDR's Rural Electrification Association). It's great. All the people who get the cheap power own the assets of the power company collectively. There is no profit, but the guys who cut the tree branches out of the way get paid well, get health insurance and other benefits. So does the nice lady who answers the phone. Because we, the owners, have decided that's a good thing to do. There's no profit for any corporation, but there is enough to make sure everyone gets paid what they're worth. If those employees had a government health plan they could choose, and pay for with a tax on their paychecks, then as a co-owner of the co-op, I would be more than happy to give them a raise with the money the co-op saved by not having to pay for their health care.

I'm pretty sure GM would like that too.

Why should health care be any different than the co-op itself? Why can we not use the medicare paycheck tax to pay into a fund that is then used to pay our dues for a medical co-op that fairly and equitably distributes care on a triage basis, and puts a premium on prevention, even to the point of rewarding people who do the right thing for their health (thereby being less of a burden to the rest of the co-op)?

Now a lot of people will say it's a red commie flag there, but if you really think about it, and look back over American history at the collective good that has developed as a ethic in this country, it's conservative. It says YOU have a stake, YOU have a responsibility, and if you do well, you will be rewarded. The fact that we are all owners makes it the ownership society for real. And the fact that it is controlled by a bureaucracy that is built to make it as fair as possible takes it out of the realm of Stalin or other totalitarian philosophies, and puts it squarely in the hands of voters who get tho choose the head of the federal government every four years.

I worked my ass off for big entertainment companies for 20 years. They made plenty of money off my labor: more than I did, in fact. And when that work caused the degenerative disease I have in my big load bearing joints, those company's insurance companies denied that they had caused it, and tossed me out like any old broken cog. In your world, it's toughsky shitsky for Scotty because they have to profit. In my world, the money I put into the co-op would come back to me from the co-op when I needed it. Some guy who profited more from my work might have to pay a little more tax now to fund it, but I'll never get back all the profit I helped him make. That's fine. But when he tries to say he has no responsibility for my care, now that I'm broken down and can't do the physical labor that I spent 20 years turning into a career, I say he's full of it.

But when he says, well, I don't really want to pay into a system where a bunch of jet-setting insurance company executives and HMO executives milk every last dime out of everything in order to feed their Myopic vision of next quarter's stock price, then he has a point. I don't want him to pay them either. I want him to pay my doctor, with as little administrative or other overhead as possible. In fact, less overhead means more for my doctor.

So that's my long and winding explanation of why I want medical care to be non-profit and universal. And I'd like to thank the Ron Paul Republican who's been rattling a few cages around here for setting me off on what was a comment, but turned into a diary. So much for banging out a quick answer and getting back to work!

And thanks to Hunter today for firing up my populist, anti-Randian roots. Sometimes I forget why I hang out here, and then Hunter posts something that makes me feel like writing again.

Saying Bush is Socialist While He Implements Fascism

(or, Wasted Away Again in Frame-a-ritaville)

The Paulson Bailout happened so fast, who even noticed that while the "true conservatives" vituperated against this socialist move by the Bush administration, we all bought the political characterization. The negative connotation of Socialism immediately became the framing of the anti-Bush sentiment. We in the left, especially, were eager to tap the Schadenfreude of yet another chance to point out Bush's hypocrisy. Meanwhile, the conservatives call Obama socialist, and presto, they've associated Obama with Bush.

I had a Euripidean Revelation, then, when I stumbled across this nugget: Former Assistant Secretary of Treasury for Reagan and a former associate editor of the Wall Street Journal, Paul Craig Roberts, made the case recently on Democracy Now that the Paulson plan is, in fact, fascist.

AMY GOODMAN: Paul Craig Roberts, the piece you’ve written, one of them, asks, “Has deregulation sired fascism?” What do you mean?

PAUL CRAIG ROBERTS: Well, the original Paulson plan was to give the Secretary of the Treasury $700 billion with no accountability and give him complete control over the financial system. And that, of course, is state capitalism or fascism. If you control the financial system, you control the economy. And so, that was my way of pointing out the dramatic sort of power that was said to be necessary to stem a crisis that, in my view, could be fixed just by refinancing mortgages, like they did during the Great Depression.

Of course, fascism has other necessary conditions, which I'll get to. But it's an important point that the concentration of power in the executive branch is, in and of itself, a fascist move. While the ultimate result of the nationalization of these financial firms might be socialistic (assuming we all share in the upside), the actual administrative move, approved by congress, is, in and of itself, fascist.

Moving on to further conditions that should set our fascism alarms blaring, we can see that the money, power, and control under this bailout is concentrated throughout the upper class, especially the lobbyist class that pulls the executive levers. They are using their power to perpetrate a crime, exhibiting a blatant disregard for the law. If they can't change a law they don't like, they just break it, and dare anyone to do anything about it. After all, what can we do to a runaway executive branch? Arrest them? Aren't they the cops? Don't they have the guns? Who's going to arrest the ones who are supposed to do the arresting?

AMY GOODMAN: Who is driving this? Who framed this bailout? And explain exactly who it is who benefits right now.

PAUL CRAIG ROBERTS: Well, what the bailout does is it takes troubled financial instruments off the balance sheet of the banks and puts them on the balance sheet of the taxpayer at the US Treasury. So it’s a bailout of the financial institutions whose recklessness caused the problem. And as I’ve already said, it does not address the problem. It only addresses the problem of the banks. So the foreclosures and the defaulting mortgages will continue as the economy worsens, and yet nothing is being done to stabilize that default rate or to stop these foreclosures. So the money is essentially being poured into the coffers of Washington’s financial donor base.

This is not a complex problem. Follow the money. First you loosen it up. Then you swap it around. Then you say, "Don't worry!" Then you make it disappear. Then you ask for a refund. So exactly how do you steal the money the first time around?

PAUL CRAIG ROBERTS: [...] In 1999, in the Clinton administration, they repealed the Glass-Steagall Act. This was the Depression-era legislation that separated commercial from investment banking. In 2000, they deregulated all derivatives. And in 2004, Hank Paulson, the current Treasury Secretary, who at the time was chairman of Goldman Sachs, he convinced the Securities and Exchange Commission to remove all capital requirements for investment banks, and thus they were able to drive up their profits by amazing leverage. For example, when Bear Stearns finally went under, it had $33 in debt for every dollar in equity. So this is an amazing leverage. And it’s amazing that all reserves against debt would have been removed by the Securities and Exchange Commission. So, the whole thing is reckless beyond imagination. Now, they claim that they had new mathematical models that assessed risk and that they didn’t need these reserves. Well, that was all a bunch of hooey, as we now see.

We were just conned out of yet another generation's taxes and we're supposed to settle for "oops"? Is this power grab more justified because they say it was an accident? We're supposed to think that after the systematic dismantling of regulations, starting in 1999 with the repeal of Glass-Steagall, that they were simply reckless? Asst. Secretary Roberts should be commended for his liberal view of the goodness of man. I don't share his forgiving nature. You don't have to be an expert on the Bush Administration to see what seems pretty clear: a federal prosecutor could make a career out of it. If something is "reckless beyond imagination," then it's likely to be illegal as well.

The religious component of pure corporate fascism is the God of the Market. Nothing rings the opening/church bells like the holy grail of 700 Billion Dollars. When searching for a definition to demonize for the Nationalization of Financial Institutions, the Republican Party once again associated "socialism" with "communism" while the opposite was true. This financial rein-seizing will do little to nothing for society as a whole. It will do everything for society at the Country Club. This is fascist plutocracy.

A unitary executive is one of the necessary conditions for fascism. Another is disregard for the rule of law. Another is hate. The "dirty-fucking-hippie" meme is being whipped up by the standard bearers of the Republican party right now, with their Christian Right zealots right behind, and you have the very model of a fascist system. Sprinkle in some racism, and they get their picture in the fascist textbook.

And yet we go on with the crude caricature that associates the Bush administration with leftist philosophy. Even worse, of course, is that all this framing takes our eye off the Ace in this game of political three card monty. While our heads spin with the dissonance of inaccurate name-calling and right-wing red meat keywords, they pass another trillion dollars in corporate welfare, concentrate more power into the executive branch, incite violence, ignore the law, and steal more money from our children. Anyone who dares to call what they're doing is singled out as a "hater" because they didn't mean to steal this money. They were just reckless.

The snake oil we've been sold was cranked out by computers, but it was just as slimy as what you could get off a wagon a hundred years ago. This isn't the first time that markets and the treasury have been gamed. And it won't be the first time that the guilty parties walk away, probably with presidential pardons.

Another of the right's favorite frames is "Who could have seen it coming?" As in, "Who could have predicted terrorists would fly planes into buildings?" Or, "Who could have predicted that Iraq didn't have WMD?" Or, "Who could have predicted that deregulation would lead to financial trickery?" In The Rise of the Machines, Richard Dooling points out that this latest crime was, of course, predicted.

“BEWARE of geeks bearing formulas.” So saith Warren Buffett, the Wizard of Omaha. Words to bear in mind as we bail out banks and buy up mortgages and tweak interest rates and nothing, nothing seems to make any difference on Wall Street or Main Street. Years ago, Mr. Buffett called derivatives “weapons of financial mass destruction” — an apt metaphor considering that the Manhattan Project’s math and physics geeks bearing formulas brought us the original weapon of mass destruction, at Trinity in New Mexico on July 16, 1945.

Dooling goes on to make the case that the entire scheme is essentially one giant computer crime. Keep in mind that Paulson, as chairman of Goldman Sachs, convinced the administration (of which he was about to become a cabinet member) to obliterate the capitalization rule, the lack of which helped create the "crisis." Then, as Treasury Secretary, he engineered a "bail out" that makes us all pay, again. What gall they have to even ask that he have total control of the $700 billion! Well-connected corporate directors perpetrated the fleecing of America by sending their insiders and lobbyists to run the White House, aiding and abetting the crime. Looking at the Bush Administration as a whole, wasn't it obvious where this was leading? When it was said foxes were guarding the hen house, did we trust them in spite of knowing that foxes eat chickens?

Dooling, again, uncovers the crime:

Somehow the genius quants — the best and brightest geeks Wall Street firms could buy — fed $1 trillion in subprime mortgage debt into their supercomputers, added some derivatives, massaged the arrangements with computer algorithms and — poof! — created $62 trillion in imaginary wealth.

Their was nothing imaginary about the cut of that wealth that the upper classes took out of the system during the last 8 years. Enron was simply foreshadowing. An executive branch already injecting the steroids of military industrial complex money and unchecked war making power forced us to purchase a seat on the board of their corrupt and broken corporation. There is nothing free about a market that can force the sale of failure to the taxpayer. These CEO's took over our government. They infused it with Religion and War. They created the United Corporations of America, aka the Bush Administration, and their chief export is war. It was heavily subsidized with tax cuts, defense spending, and corporate welfare. CEO pay inflated to the point that even astrophysicists object to calling the numbers astronomical. After all, there are only a hundred billion stars in the galaxy.

Now these unrepentant financial terrorists sip lattes on the porches of their devalued McMansions, hung-over from their drunken spending spree, and they want us to pay for it all? They complain that Obama wants to take away their Bush tax cuts for the wealthy. They scream about socialism as if it's some evil to which even George Bush has sold out. They propose more tax cuts for themselves, and tax increases on the middle class. They demand cuts in social programs, education, and infrastructure investments. They want the people who stole our future in charge of the justice that protects it? That isn't just fascism. That's an insult.

It was nice to hear Colin Powell stand up for reason and dignity when he endorsed Obama. But in his comments to the press after the endorsement, he said it was wrong to call Obama a socialist. It was a lot like hearing McCain say Obama's not an Arab, as if being an Arab was evil. I'm not sure if Powell understands that the point is not whether socialism is bad, but that after the fascism of George Bush, it's hard not to move to the left, if only because there's no room left on the right.