The fragile and faltering state of American democracy.
To put it crudely, the dilemma facing the Democratic party comes down to this: Will Dems decide next time to stand with the working people, or will they stick with their big-money friends in finance and business? Some twenty years ago, Bill Clinton taught Democrats how they can have it both ways. Take Wall Street’s money—gobs of it—while promising to govern on a heart-felt agenda of “Putting People First.”
It worked, sort of, for the party. Not so much for the people. New Democrats prevailed. Old labor-liberals lost their seat at the table. Among left-wing malcontents, Bill Clinton became “slick Willie.”
Now economic adversities have blown away the Clinton legacy, which is rightly blamed for much of what happened to middle-class wage earners. New voices like senators Elizabeth Warren and Sherod Brown are demanding a new new politics—big governing reforms that really do put people first. The old New Dems are stuck with their moderation and obsolete economic doctrine that is utterly irrelevant amid the nation’s depressed circumstances.
Sooner or later I expect politics will change, because the injuries and adversities will not go away in the absence of stronger government interventions. For now, however, the Clintonites are the Democratic Party, having deliberately excluded liberal thinkers and activists from the ranks of government policymakers for two decades. Economic experts recruited by the Obama administration are more likely to have been trained at Goldman Sachs or Citigroup. They do not personally share the public’s anger.
So here is the unspoken subtext for 2016 and beyond: What does the Democratic Party actually believe? Democrats argue among themselves, but try not to provoke fratricidal accusations. The question is sufficiently hot that it is no longer a subterranean discussion. The Washington Post and The New York Times are chewing on it too.
A recent Post article warned Democrats to lay off the “inequality” talk for fear of sounding like “class warfare.” Well, yes, it is. As billionaire Warren Buffett remarked, the class warfare has been underway for some years . “Our side won,” he said.
The president has made several fine speeches on the issue, but the Post says the White House has already decided to drop it. Talk specifics, but keep it cool. Robert Borosage, director of the Campaign for America’s Future, suggests this is a recipe for “passive voice populism.”
The New York Times produced a tougher piece on the Dems’ intramural debate. It described in disturbing detail how closely Hillary has relied on the financial constituency. “As Wall St. Faces Scorn, It Warms to Clinton,” the headline said. She was, after all, a senator from New York. And when she ran for president and lost in 2008, organized labor was enthusiastically on her side.
Still, Hillary Clinton is dangerously out of step with the new zeitgeist. If she already has the 2016 nomination locked up, as her campaign gremlins keep telling us, it’s hard to imagine she would desert the finance-friendly politics that supported her rise to power.
The Hillary question has many corners to it. On one hand, it could achieve the epic breakthrough of electing a woman. On the other hand, it might postpone the restoration of progressive economic polices for another four years.
For that reason and some others, Clinton could run and lose the election. Still, many Dems see her as as the best prepared candidate and the best compromise among contending party factions. Dems do realize the need to hold onto the White House and Supreme Court appointments in order to derail the Roberts Court’s attack-happy right-wingers. Or, who knows, maybe she will decide not to run.
In other words, this dilemma will not be resolved by one election, or maybe several elections, because it is larger than individual candidates and their personal qualities. Nor is it limited to Democrats (witness the nervous breakdown of the Republican Party). We are really looking at the capture of representative democracy deformed by the deadly embrace of capitalism.
Only the people themselves can dig themselves out of this trap. My personal hunch is that Democratic office holders will not find the courage to embrace the future and the reform vision that some of their colleagues are advocating until their party feels threatened by its own constituencies. That is, the Dems need to experience more of the surprise rebellions that took down some old bulls in the GOP. If the people cannot get either major party to lead the way, maybe they will need to create a new party that will.
Read Next: On NSA spying, Hillary Clinton is either a fool or a liar.
The big media talk a lot about stalemate in Congress, but they are missing the real story. While representative democracy is dysfunctional, the Supreme Court has taken over with its own reactionary power grab. In case after case, the court’s right-wing majority is making its own law—expanding the power of corporations and the very wealthy, while making it harder for ordinary citizens to fight back.
Worst of all, the Roberts Court is trying to permanently inhibit the federal government’s ability to help people cope with the country’s vast social and economic disorders.
This is not a theoretical complaint. Led by Chief Justice John Roberts, the conservative Republican Court is building a barbed wire fence around the federal government—creating constitutional obstacles to progressive legislation in ways that resemble the Supreme Court’s notorious Lochner decision of 1905. That case held that property rights prevail over people and the common good.
For more than thirty years, the conservative Justices used that twisted precedent to invalidate more than 200 state and federal laws on major social and economic concerns like child labor, the minimum wage, bank regulation and union organizing. New Deal reformers were stymied by Lochner at first, and they only managed to overturn it in 1937 and only then when FDR mobilized a take-no-prisoners campaign to reform the Supreme Court by weakening its unaccountable power.
The Roberts Court has so far produced a slew of precedent-smashing decisions designed to hobble left-liberal reform movements before they can gain political traction. Citizens United opened the floodgates for corporate money; McCutcheon scrapped the dollar limits on fat-cat donors. Roberts gutted the Voting Rights Act of 1965, implicitly endorsing the GOP’s crude campaign to block racial minorities from voting. The US Chamber of Commerce and Business Roundtable have won numerous victories, large and small, expanding the rights of their corporate sponsors.
“We are in an era of very aggressive corporate litigation to expand the constitutional prerogatives of business,” Kent Greenfield, Boston College law professor, explained. “We are on the verge of going back to the Lochner era where every new regulation will be subject to numerous constitutional attacks—any regulation of content in commercial speech attacked on First Amendment grounds, anti-discrimination law or healthcare legislation attacked on religious grounds. You’ll see financial legislation challenged on due-process grounds.”
Despite his genteel manner, Justice Roberts is a “smart strategist” who plants provocative phrases in his decisions that he can cite later as false precedents, according to Law Professor Gregory Magarian of Washington University in St. Louis. “Roberts tells a story that sounds like they are not making radical change,” Magarain said. “But they are still making things up, still making up social policy. And the judgments are still pointed toward the past.”
Anxious Democrats applauded Roberts when he upheld the constitutionality of Obamacare, but many realized after-the-fact that Roberts rejected the Commerce Clause of the Constitution as the standard basis for justifying federal interventions on social and economic problems. This means the Supreme Court now has a five-vote majority in favor of shrinking federal authority. In effect, the Roberts Court was mimicking the narrow logic of the Lochner court 100 year before. The words and reasoning are there, just waiting for the right case to apply them.
Magarian sees a reactionary perspective motivating Roberts and his brethren. The Justices are trying to thwart a future of renewed activism and social rebellion, Magarian suspects, because they were rattled by political unrest they saw in their youth.
“The Court believes that corporate power is virtuous,” Magarian explained. “They are empowering corporations to help maintain a kind of political stability. The First Amendment in the view of the Roberts Court is not about people at the political margins. I think the Roberts Court wants to empower large, stable, wealthy and powerful institutions like the corporation so as to help maintain political and social order. These guys don’t want any social upheaval. They are like interesting echoes of the sixties.”
In the absence of aggressive political resistance, there is nothing to prevent this right-wing power grab from succeeding. But corporations are vulnerable in numerous ways that timid Democrats have not exploited. To stop the Roberts Court, the other side must get serious and begin to attack corporate power and air grievances that the public fully shares.
The corporation, after all, is not a “person” who possesses “inalienable rights.” The corporation is a legal artifice created by the government and given special protections and privileges. When the Supreme Court treats corporations as though they are living, breathing creatures who have constitutional rights just like human beings, they are embracing the fundamental contradiction in the nature of the corporation. Sometimes, they want to be people. Other times, they want to be treated better than people—that is, legally shielded from the consequences of their actions.
Companies and their owners want to have it both ways. The Roberts Court is helping them do so. The Hobby Lobby case now before the Supreme Court illustrates this contradiction. On one hand, the company’s conservative owners claim their religious rights under the First Amendment are violated when the federal government insists they include birth control coverage in their healthcare plans. If Roberts buys that argument, any employer can dream up religious values that exempt it for almost any regulatory law they choose.
On the other hand, the Hobby Lobby owners are not about to surrender their own “limited liability” protection from lawsuits against the company or criminal liability for the company’s violations of law or its failure to pay its debts. You can’t sue the shareholders for wrongful actions by their company. That is a cornerstone of American capitalism. It is also a principal source of corporate irresponsibility.
What we need now is a ferocious counterattack against these corporate owners—a campaign that demands they surrender these special privileges the government has given them. Why protect shareholders from blame when they claim the same constitutional rights—free speech, freedom of religion—that people possess? Human beings are held responsible for their debts, they go to prison for their crimes. Perhaps the owners of corporations should be made to take responsibility for theirs.
A similar contradiction is embedded in the Roberts Court decisions that have effectively destroyed the laws on campaign finance. The billionaires and their mammoth companies, banks and investment houses have been granted unlimited power to influence elections or, as we might say, buy the candidates. The Supreme Court has unilaterally unhinged the standard meaning of elections. Elections are no longer collective decisions among citizens choosing their governors. They have become bidding wars among fat cats and powerful economic interests, choosing representatives for the rest of us and thereby choosing our laws.
“We don’t let people stand up and shout in town meetings and drown out everyone else,” Greenfield observed. “When we come to elections where we make collective decisions, an equality norm comes into play, especially when the money comes from corporations. Corporations are creatures of the state; their purpose is not to affect the state and change. A reasonable thing to say to corporations is we are not going to let you skew the political process that created you.”
Magarian expands the point. “The limited liability corporation,” he observed, “owes its form and existence to a particular act of government, then the corporation turns around and says, ‘We are going to use our advantages and leverage them to influence the political process.’ Given the advantages corporations gain from government largesse and protections, the society should not have to suffer the loss of its influence. We want to sever their corporate influence from the decisions we the people make about economic questions.”
“In the long view,” Greenfield said, “we are in this bind because of the nature of corporations, not the nature of constitutional law. Over the last generation, the rise of shareholder primacy has meant that managers manage the company to maximize the share price. Willing to serve Wall Street, the corporation has really become the tool for the 1 percent. We need to rethink the nature of corporations. Rather than be a servant of a tiny sliver of the American people, the corporation should have a much more robust public obligation and should be managed in a more pluralistic way.”
Meanwhile, angry citizens do not need to wait on reform. They should get out their pitchforks and spread the message to those corporate lawyers who are corrupting democracy and to those cloistered right-wing justices who have such great solicitude for the privileged minority.
If you’re wondering why some US politicians are so hot for war in the Ukraine, think “merchants of death.” At the height of the antiwar movement, that was nasty label some of us applied to Lockheed Martin, Boeing and other major manufacturers of high-tech war-fighting equipment—planes, tanks, missiles, whatever does the job. When the drums of war are sounding in some distant land, these the weapons makers naturally smell sales opportunities.
Trouble in Ukraine has aroused the same ambitions and hawkish politicians have picked up the ball and are running with it. They are demanding that the US government send military stuff to Kiev to hold off threatening Russians (our favorite bad guys). The hawks are portraying President Obama as a wimp who’s insufficiently bellicose. But the president is so far playing a cool hand. He has been getting us out of two wars. He’s pretty sure the people don’t want another one.
In fact, neutral historians may someday conclude that it was the United States who stirred up the trouble in the Ukraine, inadvertently if not intentionally, and that US arms makers played an important supporting role. When the Cold War ended in 1991, these companies saw a promising new market opening for their stuff—the newly liberated Soviet satellites in Eastern Europe. Let’s expand NATO! The manufacturers lobbied policy makers in Washington and courted governments of post-Soviet nations as potential customers.
Bill Clinton decided to do it, cheered on by the arms merchants. Why is nobody talking about that? Because It might sound unpatriotic. And the media love bang-bang, even if the cause is stupid.
But expanding NATO to the east—even right up to Russian borders—was the provocative decision that led eventually to the current tensions and troubles. The Clinton administration determined that the United States must reach out and embrace the nations of Eastern Europe by offering them membership in the defense alliance originally created to hold off Soviet aggression. Expanding NATO, it was said, would guarantee the Communists could never reclaim their old dominance.
The decision would also sell a lot of fighter planes. Starting with Poland, the Czech Republic and Hungary, the countries were delighted to be free of the old Warsaw Pact and eager to replace clunky old Soviet jet fighters with high-tech American versions—awesomely superior and also much more expensive. No problem, Washington would lend the money and guarantee the loans.
To sell this deal, the arms makers created the US Committee to Expand NATO. Its president was Bruce Jackson, director of strategic planning for Lockheed. Between 1996 and 1998 alone the six biggest military contractors spent $51 million lobbying Congress and public opinion, according to The New York Times, while helping ethnic groups of Eastern European descent organize supporters.
Senator Tom Harkin of Iowa, an opponent, called it “a Marshall Plan for defense contractors who are chomping at the bit to sell weapons and make profits.” A congressional aide confided to New York Times reporter Katharine Seelye that the arms manufacturers were so intent on NATO expansion that “we’ll probably be giving land-locked Hungary a new navy.”
Starting with Poland, the Czech Republic and Hungary, six nations from the old Soviet system have joined NATO, though not Ukraine. As allies, they are welcome to shop in the Western weapons market. Poland wanted forty-eight of Lockheed’s F-16s fighter planes and five Hercules military transports. Romania wanted jet fighters to replace its tired old Russian MIGs. Bulgaria’s defense minister said he was studying the probable purchase of F-16s. And so on.
American companies now practically “own” the international market in big-ticket armaments. According to Congressional Research Service reports, the US sales abroad were $66 billion in 2011, more than three-fourths of all global trade. Russia finished second with $4.8 billion. Those totals exaggerate the imbalance because the United States had an especially good year in 2011. There was a very large purchase from Saudi Arabia—$33 billion for 84 F-15s and upgrades to seventy other planes.
Which brings us back to Ukraine. That troubled country actually manufactures some weapons itself and sells them to other countries, including India, Thailand and China. But as news stories have made clear, the Ukraine itself an unstable mess, its army small and feeble, its government corrupt and inept.
Nevertheless, twenty-one Republican senators—the usual crowd led by John McCain and Lindsey Graham—are hammering the Obama administration to get tough with Putin. Their rhetoric evokes nostalgia for “good old days” when the Cold War was in bloom.
“We need to inflict more direct consequences on Russia,” declared Senator Bob Corker of Tennessee, “prior to Vladimir Putin taking additional steps that will be very difficult to undo…. What we’re saying is that Russia is winning.”
Note that the senators do not actually propose to send American troops into the Ukraine, though the United States has deployed fighter planes to Poland and US ships to the Black Sea. The bill they introduced would send $100 million in direct military aid, anti-tank and anti-aircraft weapons. Plus, their legislation would designate Ukraine as a “major non-NATO ally,” which would give a green light to arms sales.
But isn’t Ukraine already broke? No matter, we will lend them the money. People who remember such moments from the distant past know where this tough talk leads. When the rhetoric fails to intimidate the bad guys, the United States defends its reputation by raising the stakes—deeper and deeper into the big muddy.
The real tragedy of Ukraine is that American policy leaders, from Bush I and Clinton to Bush II and Obama, seem to have forgotten the true history of big wars across the twentieth century. After World War I, the victors chose to punish the vanquished Germans, imposing harsh and impossible penalties that sowed a bitter desire for revenge and that led ultimately to World War II.
After that war, however, the great powers led by the United States did the opposite. Instead of vengeance, they chose to rebuild the devastated nations of Japan and Germany and help restore them to strength and pride.
This time, American leaders reverted to the old pattern—throwing more pain and indignities in Russia’s path. Imposing the ideas of Washington and Harvard, US governing elites allowed the plundering oligarchs to strip public asset. US economic policy squeezed the country tight while the Russian people endured an epic depression that triumphant Americans barely noticed. That was a dumb thing to do. It was also dangerous, as our history has taught.
Now comes Vladimir Putin seeking revenge—or at least restored national pride. He said his country was demeaned and humiliated, deliberately taunted by the encircling NATO alliance. You don’t have to like him to recognize he is right about that.
Edward Snowden is portrayed as a traitor, a fugitive criminal and maybe even a Russian spy, but when he showed up in Washington, he was greeted by numerous standing ovations. Despite government efforts to demonize him, Snowden looks a lot like the boy next door, maybe more idealistic than most but modestly understated when he talks about his sensational role as a world-class truth-teller. The boyish smile says, Aw, shucks, I’m not anything special. If the feds decide to prosecute this plain-spoken young citizen, they will find it very difficult to convince Americans he is an enemy of the people.
At the National Press Club luncheon where Snowden made his surprise appearance, he was embraced as a national hero. He talked for fifteen or twenty minutes, even took a few questions. The applause was thunderous, the drama so enthralling I failed to take any notes. The Ridenhour awards event is an annual ceremony in Washington honoring public servants and activists, documentary film makers, authors or investigative reporters for their courageous accomplishments.
Snowden and Laura Poitras, the film maker who has collaborated with him, received the Ridenhour Prize for Truth-Telling. The award is named for the late Ron Ridenhour, another brave truth teller who exposed the My Lai massacre during the Vietnam war. The annual luncheon, sponsored by the Nation Institute and the Ferlel Foundation, is always a warm-spirited tribal gathering for the left-liberal and progressive activists who labor for the public interest in the nation’s capital.
Of course, neither Snowden nor Poitras was actually in DC. They appeared, live and in color, on a big screen on the wall of the banquet hall, linked by the marvels of modern communications. Snowden was presumably in Russia, no one said where Poitras was. The transmission was a little jumpy, so their words were often out of sync with the pictures, which added dramatic tension. James Bamford, the authoritative author of three investigative books on the surveillance agency, introduced Snowden–an influential endorsement in Washington circles. The press ignored the event, or maybe they were not informed in advance. Snowden and Poitras have had a lot of experience dodging the cyber-nets cast by government spies and spooks.
Perhaps the most striking thing Snowden said was that when he decided to make public the treasure trove of National Security Agency documents he expected to spend the rest of his life in prison. He decided nevertheless it was “the right thing to do.” Poitras recalled the first time she heard from Snowden was an anonymous e-mail query in early 2013. As an investigative film maker, she was used to dealing with sources who dared not reveal themselves. As discussions progressed about what Snowden wanted to disclose, she was astonished by the scope of what he knew and even more astonished that he intended to go public.
But Snowden made the point that his decision was neither frivolous nor reckless. His alarm at what NSA was doing to spy on Americans was widely shared among NSA technicians, he said. Rank-and-file workers saw the same abuses and were as upset as he was. NSA spies on more Americans than it spies on any other peoples, he said. But NSA insiders also knew that internal complaints were worse than useless. When internal whistleblowers had tried to follow procedure and file formal objections, they were stiffed or punished. If they went public, top officials insisted they were lying or delusional or whatever.
Snowden the citizen concluded that if he was going to act, he would have to supply the documents that confirm his shocking accusations. Otherwise, the system would simply brush off his truth-telling and likely punish him as the villain. So Snowden produced a veritable truckload of evidence. Whatever criminal offenses might be lodged against him, Snowden observed that James Clapper, the director of national intelligence, had lied under oath to the US Senate and nothing has happened to him. The president has not fired Clapper or even reprimanded him. Snowden made this point twice. Is NSA above the law? The more Obama protects these guys, the more their dirt will become his dirt.
Meanwhile, Snowden’s manner is the opposite of rancor. He went on at length in defense of NSA people he had worked with, praised them as patriotic Americans proud of their work. He also addressed his family and apologized for the pain and anguish his actions may have caused them. His father was in the audience, evidently proud to see his son honored in the nation’s capital.
The Justice’s dissent in the Michigan college admissions case was courageous, as the attorney general said, because she dared to identify an enduring remnant of “white supremacy” still clinging to American democracy. Of course, the Justice did not use that odious phrase. She would have been accused of sensationalizing the issue. But her Republican colleagues in the majority on the Supreme Court must have felt the sting of her accusation.
The Michigan case, Sonia Sotomayor explained, is simply the latest example of an old and familiar abuse of the Constitution. The white majority used its power to change the rules in the middle of the game and deprive racial minorities of a fair shot at acquiring their just political rights.
“While our Constitution does not guarantee minority groups victory in the political process,” she wrote, “it does guarantee them meaningful and equal access to the process. It guarantees that the majority may not win by stacking the political process against minority groups permanently, forcing the minority alone to surmount unique obstacles in pursuit of its goals.”
Chief Justice Roberts harrumphed in reply. Justice Scalia ridiculed her reasoning. Yet I have a hunch Sotomayor’s dissent will be read and taught in classrooms long after the names Roberts, Alito, Scalia, Thomas and Kennedy have faded from historical memory.
At issue was the state-wide referendum at which Michigan voters amended their state constitution to forbid consideration of “race-sensitive issues” in the admission policies at Michigan’s public universities. Black enrollment predictably plummeted afterwards. The majority rules, people declared. In this case, the Supreme Court agreed. Sotomayor reminded them of the long, brutal history of American apartheid when the Supreme Court was compelled, again and again, to set aside “majority rules” in order to secure the constitutional rights of minorities.
At first, she said, states acted with an open contempt for the Fifteenth Amendment, adopted after the Civil War to grant liberated slaves the rights of citizens. “Certain states shut racial minorities out of the political process altogether by withholding the right to vote,” Sotomayor recalled. “This Court intervened to preserve that right. The majority tried again, replacing outright bans on voting with literacy tests, good character requirements, poll taxes and gerrymandering.”
Fraud, intimidation and violence were standard tactics that continued in the twentieth century. Texas adopted a law in 1923 that prevented racial minorities from voting in party primaries. When the Supreme Court declared that law unconstitutional, Texas passed another law that gave the parties the right to decide who was eligible to vote (the Democratic party said only white Democrats). Oklahoma required a literacy test but exempted anyone who whose grandfathers had been eligible to vote before 1866 (naturally, no African-Americans needed apply). Other states built legal barriers to prevent blacks from winning election to local offices—sometimes abolishing the offices or having the governor, not voters, appoint the office holders. School desegregation spawned new tactics of resistance (abolishing public schools in Virginia or an entire county in Alabama).
This pattern of extreme responses became established across the South. Each time racial minorities achieved a foothold in the political process, state governments would change the rules and nullify their accomplishment. It was a bitter contest, often fought out in the intimacy of small towns. Black people would organize and push for change, often backed up by the NAACP other civil rights organizations. If they finally won something, the white electorate and legislature would intervene. Majority rules, ha-ha-ha.
Sotomayor’s incendiary accusation is that Michigan’s fight over race and college admissions policy resembles the same crude political combat, only this time the Supreme Court has come down on the other side.
The debate, she pointed out, was not about affirmative action, which is easily demonized as racial quotas. The question was whether the majority can disable the “equal protection” political rights of the minority by cementing the prohibition in the state constitution. Repeal campaigns are extraordinarily expensive and effectively beyond the capacity of minority communities. They can sometimes win by organizing normal political actions, like citizen lobbying or electing new office holders. In fact, Michigan went through those battles in a series of electoral contests. Minority voters and university allies successfully defended the race-sensitive admission policies. But then the opposition trumped them with a high-powered campaign to ratify the constitutional amendment. Majority rules.
A Michigan citizen can lobby university regents or organize pressures on the governor and legislature in favor of other admission factors—recruiting good athletes with poor grades or favoring the children of alumni, for example. But they cannot propose race and racial diversity as valuable elements in education. That prohibition might sound fair to lots of white people. It will sound familiar to lots of non-white people.
Sotomayor described the consequences for people: “A white graduate of a public Michigan university who wishes to pass his historical privilege on to his children may freely lobby the board of that university in favor of an expanded legacy policy, whereas a black Michigander who was denied the opportunity to attend that very university cannot lobby the board in favor of a policy that might give his children a chance that he never had and they might never have absent that policy.”
Beyond the legal reasoning, Sotomayor offered a poignant expression of why race matters. “Race matters,” she said, “because of the long history of racial minorities being denied access to the political process…because of persistent racial inequality in the society.… Race matters to a young man’s view of society when he spends his teenage years watching other tense up as he passes.… Race matters to a young woman’s sense of self when she states her hometown and then is pressed, no, where are you really from.… Race matters because of the slights, the snickers, the silent judgments that reinforce the most crippling thoughts: ‘I do not belong here.’”
The Roberts Court wants to ignore all that. In fact, talking so much about race may do more harm than good, the Chief Justice said. Time to move on—the voters have spoken.
One wonders how conservative Republicans will feel about “majority rules” in a generation or two white people are no longer the majority of American citizens. I suspect they may change their minds.
Read Next: Efforts to revive affirmative action in California split the Asian-American community.
On the editorial pages of The Washington Post, the White House chief of staff was trying to pump up some enthusiasm for its still-secret trade agreement among a dozen nations, the so-called Trans-Pacific Partnership. But at The New York Times, the editorial writers were getting off the team. The Times is a long-loyal advocate of free trade, but its Sunday editorial was riddled with doubts—the very same doubts critics like The Nation have been articulating for more than twenty years.
“This Time, Get Global Trade Right,” the Times suggested. Americans, it noted, are “increasingly anxious about the downside.” So is The New York Times. To get the public and Congress on board, it said “the administration must ensure that new agreements are much stronger than NAFTA and other pacts.” Done right, US trade policy “could reduce abuses like sweatshop labor, currency manipulations and the senseless destruction of forests. They could weaken protectionism against American goods and services in countries like Japan.”
Don’t hold your breath. That is not where the president is headed. Washington cynics assume Obama will find reasons to postpone a showdown on trade until after the fall elections (just as he’s done on the Keystone pipeline decision). Then the White House will try to soften up opposition among Democrats, assisted by a lot of heavy-breathing corporate lobbyists. If Republicans capture the Senate this fall, Obama can get help from the GOP.
One thing missing from Obama’s negotiating strategy is the scandal of Bangladesh. The US and European garment industries have concentrated production there to capture dirt-cheap labor and the corrupt, compliant government willing to ignore the flagrant abuses of sweatshop labor. Last year, some 1,100 people were killed there when the Rana Plaza factory in Dhaka collapsed. The Times itself seemed particularly upset. When other mass killings in southeast Asian factories had occurred during the last twenty-five years, the newspaper declined to dig deeper, framing the deaths as an unfortunate but perhaps inevitable part of global development. “Two cheers for sweatshops,” Times pundits used to say.
Only these horrendous events did not go away. They got worse. This time, to its great credit, Times reporters stayed on the story and are closely following the aftermath of controversy and reform. This week, it reported on the rivalry of two garment industry organizations over how to prevent another catastrophe. One group, the Bangladesh Accord for Fire and Building Safety, includes more than 150 companies, mainly European, and has an explicit commitment to cover the costs of creating safe and sound factory buildings. The other group, the Alliance for Bangladesh Worker Safety, is dominated by Walmart, Gap and Target, and it does not actually require the companies to fund factory improvements, according to Scott Nova, director of the Worker Rights Consortium.
The Accord, unlike the Alliance, helps workers form unions so they can do their own surveillance of working conditions. Activists with United Students Against Sweatshops are bluntly skeptical of Alliance claims. “We need to do a better job as an organization in telling our story,” an Alliance advisor said. Scott Nova simply sees the Alliance as Walmart’s artful public relations to dodge responsibility.
So who is missing from this fight? Barack Obama. If he wished to persuade skeptics of his good intentions, he could address the problems of Bangladesh’s garment industry quickly by changing US trade policy. He should be proposing new rules for importers who manufacture their products overseas. No more sweatshops or dangerous buildings where innocent workers lose their lives making clothing for Americans. The legislation could be straightforward and no more complicated than many existing laws on imports. To enter US markets, the garment importer would have to certify the the goods were not produced under sweatshop conditions. Any importer who violates the law gets a huge fine. Repeat offenders would face boycott.
In other words, the “crime” should punish the real culprits and many of them are in American retailing. Scott Nova believes the industry group called Accord is making encouraging progress. “What we really need,” he said, “is legislation that imposes fines on the companies. As long as you allow importers with impunity to import goods made in appalling conditions, you are going to get a lot of goods made in sweatshops.”
Read Next: Bangladeshi garment workers fight back.
Good news! Janet Yellen, the new chair of the Federal Reserve, speaks English. This is most irregular, even unprecedented in modern times. I’ve been following Fed pronouncements for more than thirty years and cannot remember a time when Volcker-Greenspan-Bernanke ever departed from the dry-as-dust abstractions of monetary economics. Some called it double-talk. But these Fed chairmen were really only talking to a very narrow audience of bankers, financiers and learned economists. The rest of America either wasn’t listening or was unable to translate Fedspeak.
Yellen broke the mold this week with her very first speech to a public audience in Chicago, a national conference on community reinvestment. She talked about the people who don’t have jobs and with a rare sense of human empathy. She even named several whom she had talked with.
Dorine Poole lost her job processing medial insurance claims when the recession hit. Jermaine Brownlee, an apprentice plumber and skilled construction worker, had to scramble for odd jobs with lower pay. Vicki Lira lost the full-time job she had for twenty years when the printing plant closed, then she lost another job processing mortgages when the housing market crashed.
“Vicki faced some very difficult years,” Yellen said. “At times she was homeless. Today she enjoys her part-time job serving food samples to customers at a grocery store but wishes she could get more hours.”
The Fed chair (the title Yellen prefers to chairwoman) declared her solidarity with these “brave men and women.” She explicitly promised the central bank would not abandon their cause, though the economy is again attempting a sputtering recovery. This is a foundational speech for Yellen’s tenure and she will doubtless get brickbats from the usual conservative bean counters. She deserves to get far more energetic support from other political quarters, including the White House.
“The hardships faced by some have shattered lives and families,” Yellen explained. “Too many people know firsthand how devastating it is to lose a job at which you had succeeded and be unable to find another, to run through your savings and even lose your home, as months and sometimes years pass trying to find work, to feel your marriage and other relationships strained and broken by financial difficulties. And yet many of those who have suffered the most find the will to keep tryng.”
Of course she was trying to show that, despite its austere reputation, the Federal Reserve does have a heart. But, more to the point, she asserted explicitly that Fed policy will continue to support economic growth with low interest rates intended to encourage job creation. “The recovery still feels like a recession to many Americans and it also looks that way in some economic statistics,” she warned.
Her declaration is especially impressive because she did not “dumb down” the economic argument for people who are not versed in the indicators. Yellen walked though the evidence that demonstrates why the economy remains feeble—too slack to generate either vigorous job creation or rising wages. Clarity of expression was never one of the Fed’s strong traits. Indeed, Fed officials often seemed to enjoy befuddling members of Congress, most of whom are no more sophisticated than their constituents.
I do not doubt her sincerity, but I expect Yellen to be tested on this commitment. The Federal Reserve’s efforts to stimulate or provoke stronger growth have not succeeded to date and deflationary forces are still present worldwide. At some point rather soon, progressive forces should start asking Yellen what else the Fed can do and demand some answers. As I have been writing for the last few years, the central bank has great untapped lending powers that could cooperate in supporting new job-creating programs like infrastructure spending—if the president and White House take the lead.
Yellen, so far as I know, has never expressed herself on this possibility nor has Barack Obama. But if the misery and loss continue to tear up the lives of millions of families, as Yellen described, then the people deserve a straight answer from her and the president. To make such a deal, the Federal Reserve will need political cover to protect it from right-wing howlers. The President can provide this leadership if he has the nerve. Maybe the gutsy new Fed chair can encourage him to explore possibilities with her.
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The punditry is having such a good time blaming Putin for war-like moves against his neighbors, one hesitates to interrupt their fun with a few hard facts. But our desktop warriors seem to be lost in nostalgic amnesia. David Brooks laments that Putin has destroyed the so-called post-Cold War peace. The guy from National Review says Putin has taken the world back to the great power wars of the 19th century. Even President Obama indulged in a bit of self-righteous forgetfulness—he found a way to say something good about our unilateral “shock and awe” invasion of Iraq.
Let’s review the bidding here. No one in the world can match our bloody record for unprovoked assaults on other nations to remove their governments (unless you count Hitler). Sometimes we invaded with armies, sometimes we sent in the CIA to topple governments we didn’t like. Mosaddegh in Iran in 1953; Arbenz in Guatamala in 1954; Allende in Chile in 1973; Hussein in Iraq in 2003.
Stephen Kinzer, former foreign correspondent for The New York Times and author of Overthrow: America’s Century of Regime Change from Hawaii to Iraq, counted fourteen governments that were brought down by American forces. He did not count a lot of countries like Indonesia, Brazil and Congo where US agents were involved but only played subsidiary roles. Sometimes, they assassinated the leader. Sometimes, they exiled him.
Of all the commentaries I’ve seen, Washington Post columnist David Ignatius was perhaps closest to acknowledging the hypocrisy of Americans who beat up on Putin for doing what American presidents have done repeatedly for years. Putin grabbed Crimea. The US bombed the crap out of Serbia to make Serbians give Kosovo its independence. The Soviets imposed cruel oppression on eastern Europe. Ronald Reagan launched a semi-secret army, the Contras, against the leftwing government of Nicaragua. The US had invaded Nicaragua fifty years earlier and killed their leader Sandino. Washington did not ask for permission. Nobody apologized afterwards. The US claimed this power for reasons not very different from Putin’s.
What’s alarming to me is American hypocrisy and facile forgetfulness. A bipartisan “war party” has dominated the US government since the dawn of the Cold War but its hawks do not seem to understand that things have changed for the US, too. Like Russia, the United States is not as powerful as it used to be. Yet it still has secret agents and soldiers spread around the world in scores of countries, looking for bad guys to take out, ready to start a fight. The amnesia and arrogance are perhaps our gravest danger.
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I am addicted to House of Cards, the British and American versions, but I suggest that both TV series have been looking at the wrong game.
On television, the story line is about a wicked political schemer, accompanied by his wicked wife, who climbs to the ultimate perch of power—prime minister or president—through fiendishly malevolent manipulations, including homicide. In the real world of Washington, however, politicians look more like impotent innocents compared to their true masters. It is the spooks and the spies who shuffle the deck and deal the cards. They hide their cut-throat intrigues behind bland initials—the CIA and the NSA.
In recent weeks, a lurid real-life melodrama has been playing out in the nation's capital that has the flavor of old-fashioned conspiracy theories. The two clandestine agencies are the true puppet masters.
It is elected politicians, even the president, who are puppets dancing on a string. I hope the TV writers are taking notes. This would make a swell plot outline for a third season of the popular drama—"House of Cards, the Reality TV Version."
The plot begins a decade ago in the bad years after 9/11 when the CIA embraced global torture in the war against terrorism. Official Washington was traumatized by the attack and looked the other way, pretending not to know what the spooks were doing. The men in black plucked various "terrorists" off the Arab Street and shipped them to less squeamish countries around the world where the US agents could use medieval methods for pain and punishment, techniques officially prohibited by US law.
The political system was at first shocked when gruesome details were exposed by vigilant reporters. But soon enough the spooks were being celebrated as our anonymous heroes—sticking it to the bad guys, satisfying the popular thirst for revenge. CIA operatives even taped the cruelty for agency archives. The torturers even got their own popular TV show called 24. The Bush administration issued far-fetched legal justifications explaining their torture wasn't illegal torture. The press backed off a bit and began gingerly noting differences of opinion on waterboarding and sleep deprivation.
Eventually, as truth caught up with official lies and the long war in Iraq was exposed as another gigantic fraud, Americans lost their stomach for lawlessness in Washington. The CIA discreetly destroyed its torture tapes (a pity since this would have been terrific footage for the TV show). The Agency denied everything and promised not to do it again. The new president took their word for it. In a forgiving tone, Obama urged Americans not to be obsessed with old controversies. Congress assured the nation that the Intelligence Committees of House and Senate were exceedingly vigilant and they would scold the CIA vigorously if it ever lied again (details, alas, were kept "classified" so as not to aid the enemy).
Public affairs in Washington might have settled down to usual pretensions of "straight talk" except that some high-minded computer geeks came along and blew the doors off government secrecy. First, it was the notorious Wikileaks gang that posted reams of official government documents on the Internet, lighting bonfires of indignation around the world. Reading the private cables from US embassies or the text of a secretly negotiated trade agreement is an educational experience. It desanctifies the lofty legends of diplomacy.
Next it was Citizen Snowden who came forward with the crown jewels of secrets—the shocking dimensions of the National Security Agency's digital invasion of privacy. The government really is listening to your daily pedestrian talk, recording our intimate thoughts. For many years, the people who believed this were usually also hearing voices from God and the Wizard of Oz. Now it is established that Americans at large are in the files, their phone calls conveniently recorded for the spooks and spies, should the government agencies find a reason to know more about you. The agency says it won't do this (unless really, really necessary to save the nation). But we also learned the agency lies, not just to you and me, but to congressional inquiries.
The NSA and the CIA, though sometimes rivals for power, can be thought of as the "evil twins" of government bureaucracy—licensed to trample on the Bill of Rights in the name of protecting the nation from alien forces. The two agencies are joined at the hip by this new storm of staggering revelations. Both are trying awkwardly to maintain their Cold War mystique but the storm threatens to blow away their "house of cards." Puppet-like politicians are exposed as utterly incompetent watchdogs. The puppet masters don't look so smart either.
What's promising is they are turning on each other. Senator Dianne Feinstein, chair of the Senate Intelligence Committee and long-loyal apologist for the spy agencies, accused the CIA of spying on her committee's belated investigation into the torture scandal. CIA Director John Brennan turned around and put the blame on her, actually accusing her committee staff of snooping on the agency. He even filed a complaint with the Justice Department and asked for a criminal investigation of the congressional oversight committee.
Feinstein in turn asked Justice to investigate Brennan. This is truly weird.
A Huffington Post headline captured the absurdity: " Senators Okay with Spying on Citizens, But Outraged It Happened to Congress." You can turn it around and make the same point. The CIA and NSA routinely ignore the law and Constitution themselves but want the Justice Department to protect them from an over-reaching Congress. The "House of Cards" is playing for laughs. Which side will President Obama take in this fight?
Meanwhile, Citizen Snowden continues his educational campaign with more bracing revelations about the National Security Agency. Thanks to Snowden, The Washington Post reported that the NSA has built a surveillance system that can record "100 percent" of a foreign country's telephone calls—every single phone conversation. The voice interception program is called MYSTIC. Its official emblem portrays a gnarly wizard in a purple robe and pointy hat, holding a cell phone aloft. Do they think this is a Saturday morning cartoon?
"At the request of US officials, The Washington Post is withholding details that could be used to identify the country where the program is being employed or other countries where its use was envisioned," the story said. Furthermore, the Post reported that at least five other countries are listed for potential use of the same total collection though the Post doesn't name them either. Each month, the newspaper reported, NSA analysts send millions of voice clippings for processing and long-term storage.
So which countries in the world are getting "hoovered" everyday by Washington? Russia or China? Maybe both? Or a trading rival like Germany? Whatever the agencies claim, we know not to take their denials too seriously. They lie when they think they need to lie, even to their supposed overseers. But Snowden and associates certainly know the answer. They could conduct a worldwide contest or conversation of their own—asking people to guess. Or Snowden can simply make the revelation and prepare to take a lot of heat from the desktop warriors in Washington.
The more I thought about it, I kept coming back to the homeland.
Maybe the NSA is listening to the USA. It cannot say so for obvious reasons but the premium value of turning the MYSTIC wizard loose on fellow Americans would be fantastic. Maybe for national security purposes or maybe for the NSA-CIA's own security. Sounds outlandish, I know, but if the NSA can listen to the cell phone of Angela Merkel in Germany, it can undoubtedly listen in on Barack Obama in Washington. I am not making an accusation but asking the question describes the true depth of distrust the government has brought upon itself.
Where is the president in all this? Mostly limp and unpersuasive so far in very restrained responses. He didn't fire the CIA director nor the NSA director though both have lied to Congress and the public, and are obvious candidates for blame. The president did not launch a seriously independent inquiry nor does he seem to understand that, whether or not it's fair, the blame falls at his feet. Why didn't he get angry?
Because he knows the secrets, he is therefore vulnerable to reprisal.
The spies may not have tapped the White House phones but they do know what he knows and can always make use of it. This is the very core of the card game played by the intelligence agencies and it didn't start with Barack Obama. When any new president comes to town, he is told the secrets first thing and continuously. The briefings can be chilling but also thrilling.
Ultimately, it can also be slyly coopting to learn what the government knows only at the very highest level. As the agencies take the White House deeper and deeper into the black box, it becomes harder for a president to dissent. It also makes it riskier to do so. The CIA or NSA know what he heard and know what he said when he learned the secrets. If the president decides to condemn their dirty work, the spooks and spies can leak to the press how in the privacy of the Oval Office the commander-in-chief gave the green light.
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The Yellen era began officially on Monday when Janet Yellen took the oath and became the new chair of the Federal Reserve Board. The very first female to hold that title. And not a day too soon. The New York Times greeted her with a headline that bluntly describes the circumstances. “The Middle Class Is Steadily Eroding. Just Ask the Business World.”
Wouldn’t you know. It took thirty years of guys running the Fed—Volcker, Greenspan, Bernanke—to create this messed-up economy. Now the woman has to clean up after them. From what we know about her, Yellen understands the challenge. She must undo the past. It took a generation of conservative Fed chairmen to tip the balance in one direction and accept the extreme inequalities of income and wealth. It might very well take another generation to correct the damage and restore equity. The Fed, of course, does not control every economic outcome, but, as Yellen knows, its policy levers can have decisive influence on jobs and wages.
What the Times reported—the disintegrating middle class—is not exactly news. But business reporter Nelson Schwartz managed to make the abstraction of rising inequality visible by describing the real-world consequences in the marketplace. Olive Garden and Red Lobster restaurants are losing altitude, while high-end restaurants are surging. General Electric’s mass-market appliances are slowing, while fancier models are hot. Sears and J.C. Penney, which target middle-class consumers, are both in trouble.
Follow the money. Business strategists have this stark choice—either move upscale to target the affluent or down to the very low-end bargain basements where more shoppers are concentrating. The middle buyers are missing in action. Between 2009 and 2012, about 90 percent of the increased consumption came from the top fifth of household incomes, Schwartz reported. The familiar adverse social implications are buried in those business statistics. To put itcrudely, the United States has too many rich people awash with surplus wealth, but not enough healthy consumers with incomes that allow them to both spend and save for the future.
The president and like-minded Democrats are belatedly talking about inequality, but mostly discuss it as a moral issue, a matter of fairness. They will not get serious about finding solutions, I suspect, until they recognize that inequality is, above all, an economic issue. They might consult Janet Yellen about that. Since the crash and tepid recovery, Yellen has been talking consistently about what the economy needs for a healthier recovery—jobs and wages—without going into the obvious implications of inequality.
The twisted nature of American economic life is not new. Nearly a decade ago in 2005, a team of economists at Citigroup identified this new era of inequality and gave it a name, “plutonomy.” The rich are getting richer, these experts agreed, and the US economy has adjusted comfortably to the new reality. Plutonomy, they explained, is an economy “powered by and largely consumed by the wealthy few.” By Citigroup’s reckoning, only the United States, Britain and Canada qualify.
“We project that the plutonomies…will likely see even more income inequality, disproportionately feeding off a further rise in the profit share in their economies, capitalist-friendly governments, more technology-driven productivity, and globalization,” they concluded. The follow-up report a year later was titled “The Rich Are Getting Richer.”
Janet Yellen, if she dares, might ask the Fed’s deep stable of economists to look into the subject. These Citi forecasters did not see the financial crash coming nor the near-death experience of their own institution. Nevertheless, they got the picture right and their provocative projection is clearly back on track. The American plutonomy has recovered smartly. It is just the overall economy that’s still struggling.