by: Noam Chomsky, Truthout | Op-Ed
“It is a common theme” that the United States, which “only
a few years ago was hailed to stride the world as a
colossus with unparalleled power and unmatched appeal is
in decline, ominously facing the prospect of its final
decay,” Giacomo Chiozza writes in the current Political
The theme is indeed widely believed.
And with some reason, though a number of qualifications
are in order. To start with, the decline has proceeded
since the high point of U.S. power after World War II, and
the remarkable triumphalism of the post-Gulf War '90s was
Another common theme, at least among those who are not
willfully blind, is that American decline is in no small
measure self-inflicted. The comic opera in Washington this
summer, which disgusts the country and bewilders the
world, may have no analogue in the annals of parliamentary
The spectacle is even coming to frighten the sponsors
of the charade. Corporate power is now concerned that the
extremists they helped put in office may in fact bring
down the edifice on which their own wealth and privilege
relies, the powerful nanny state that caters to their
Corporate power’s ascendancy over politics and society
– by now mostly financial – has reached the point that
both political organizations, which at this stage barely
resemble traditional parties, are far to the right of the
population on the major issues under debate.
For the public, the primary domestic concern is
unemployment. Under current circumstances, that crisis can
be overcome only by a significant government stimulus,
well beyond the recent one, which barely matched decline
in state and local spending – though even that limited
initiative probably saved millions of jobs.
For financial institutions the primary concern is the
deficit. Therefore, only the deficit is under discussion.
A large majority of the population favor addressing the
deficit by taxing the very rich (72 percent, 27 percent
opposed), reports a Washington Post-ABC News poll. Cutting
health programs is opposed by overwhelming majorities (69
percent Medicaid, 78 percent Medicare). The likely outcome
is therefore the opposite.
The Program on International Policy Attitudes surveyed
how the public would eliminate the deficit. PIPA director
Steven Kull writes, “Clearly both the administration and
the Republican-led House (of Representatives) are out of
step with the public’s values and priorities in regard to
The survey illustrates the deep divide: “The biggest
difference in spending is that the public favored deep
cuts in defense spending, while the administration and the
House propose modest increases. The public also favored
more spending on job training, education and pollution
control than did either the administration or the House.”
The final “compromise” – more accurately, capitulation
to the far right – is the opposite throughout, and is
almost certain to lead to slower growth and long-term harm
to all but the rich and the corporations, which are
enjoying record profits.
Not even discussed is that the deficit would be
eliminated if, as economist Dean Baker has shown, the
dysfunctional privatized health care system in the U.S.
were replaced by one similar to other industrial
societies’, which have half the per capita costs and
health outcomes that are comparable or better.
The financial institutions and Big Pharma are far too
powerful for such options even to be considered, though
the thought seems hardly Utopian. Off the agenda for
similar reasons are other economically sensible options,
such as a small financial transactions tax.
Meanwhile new gifts are regularly lavished on Wall
Street. The House Appropriations Committee cut the budget
request for the Securities and Exchange Commission, the
prime barrier against financial fraud. The Consumer
Protection Agency is unlikely to survive intact.
Congress wields other weapons in its battle against
future generations. Faced with Republican opposition to
environmental protection, American Electric Power, a major
utility, shelved “the nation’s most prominent effort to
capture carbon dioxide from an existing coal-burning power
plant, dealing a severe blow to efforts to rein in
emissions responsible for global warming,” The New York
The self-inflicted blows, while increasingly powerful,
are not a recent innovation. They trace back to the 1970s,
when the national political economy underwent major
transformations, ending what is commonly called “the
Golden Age” of (state) capitalism.
Two major elements were financialization (the shift of
investor preference from industrial production to
so-called FIRE: finance, insurance, real estate) and the
offshoring of production. The ideological triumph of “free
market doctrines,” highly selective as always,
administered further blows, as they were translated into
deregulation, rules of corporate governance linking huge
CEO rewards to short-term profit, and other such policy
The resulting concentration of wealth yielded greater
political power, accelerating a vicious cycle that has led
to extraordinary wealth for a fraction of 1 percent of the
population, mainly CEOs of major corporations, hedge fund
managers and the like, while for the large majority real
incomes have virtually stagnated.
In parallel, the cost of elections skyrocketed, driving
both parties even deeper into corporate pockets. What
remains of political democracy has been undermined further
as both parties have turned to auctioning congressional
leadership positions, as political economist Thomas
Ferguson outlines in the Financial Times.
“The major political parties borrowed a practice from
big box retailers like Walmart, Best Buy or Target,”
Ferguson writes. “Uniquely among legislatures in the
developed world, U.S. congressional parties now post
prices for key slots in the lawmaking process.” The
legislators who contribute the most funds to the party get
The result, according to Ferguson, is that debates
“rely heavily on the endless repetition of a handful of
slogans that have been battle-tested for their appeal to
national investor blocs and interest groups that the
leadership relies on for resources.” The country be
Before the 2007 crash for which they were largely
responsible, the new post-Golden Age financial
institutions had gained startling economic power, more
than tripling their share of corporate profits. After the
crash, a number of economists began to inquire into their
function in purely economic terms. Nobel laureate Robert
Solow concludes that their general impact may be negative:
“The successes probably add little or nothing to the
efficiency of the real economy, while the disasters
transfer wealth from taxpayers to financiers.”
By shredding the remnants of political democracy, the
financial institutions lay the basis for carrying the
lethal process forward – as long as their victims are
willing to suffer in silence.
(Noam Chomsky’s most recent book is ''9-11: Tenth
Anniversary.'' Chomsky is emeritus professor of
linguistics and philosophy at the Massachusetts Institute
of Technology in Cambridge, Mass.)
© 2011 Noam Chomsky
Distributed by The New York Times Syndicate.
July 25, 2011
The Tea Party,
Right About Everything
narrative is that the Tea Party is a bunch of stubborn nuts,
if not outright racists. In truth, the Tea Party has been
right about everything, while almost everyone else has been
nuts, especially the "experts."
One of the first things Democrats did after taking back
Congress in 2007 was raise the federal minimum wage 41% from
2007 to 2009. Result? The unemployment
rate went from 4.4% in May 2007 to 10.1% in 2009. It is
9.2% even today -- four years later.
As for teens,
the unemployment rate went from 14.9% to 27.1%, the highest
ever recorded, meaning since 1948. Today it is still a high
24.5%. And for blacks:
from a low of 7.9% in 2007 to 16.5% in 2010. It is still a
Congress also decided to apply the same minimum wages to
American Samoa. Results?
Near-decimation of its economy, one that had been based
largely on low-cost tuna canning and textile work.
fell 19 percent from 2008 to 2009 ... tuna canning employment
fell 55 percent from 2009 to 2010... Average
inflation-adjusted earnings fell by 5 percent from 2008 to
2009 and by 11 percent from 2006 to 2009.
Of course, some
of the increase in unemployment was a result of the Great
Recession. But the Employment
Policies Institute did a study to separate the effects for
the most vulnerable group: males aged 16-24 without high
school diploma. EPI's answer: the minimum wage increase
killed over 100,000 jobs (31% of the lost jobs) for that
Unless you were a politician or executive of a large bank, you
were likely against the Troubled Asset Relief Program. I
would guess that most anyone now calling herself a member of
the Tea Party was against TARP in 2008. But Senator Barack
Obama voted for it, along with most of his Democrat
colleagues. Also the top brains of the Stupid Party pushed
it: Henry Paulson, George W. Bush, and John McCain.
On October 3,
2008, Congress authorized Treasury Secretary Paulson to use up
to $350 billion under TARP to do what was needed to stave off
financial disaster. By December, after using $267B, Paulson
said he was done, crisis
averted. (Of course his successor, Tim Geithner, was not
Here's the funny
thing: while Paulson was lending out less than $0.3 trillion,
Reserve was lending out over $16T to do about the same
thing! By my calculations, Paulson's TARP slush fund was less
than 2% the size of the Federal Reserve's.
Do you think
that 2% was critical to staving off financial apocalypse?
(FYI, over 3T of the Fed's emergency loans were to
subsidiaries of foreign-owned banks.)
When the dust
cleared, the federal government owned two bankrupt car
companies and the god-awful home mortgage portfolios of Fannie
Mae and Freddie Mac -- entities that had nothing to do with
the original purpose of TARP.
Global markets were so enamored with TARP that there was
an immediate sell-off of about 20% in global stock markets the
moment it went into effect. I also credit TARP, and McCain's
reaction to it, for McCain's loss to Obama. Ever since, all
budget discussions have involved units of trillions instead of
mere billions. The world has not been the same since TARP.
Opposition to Obama's stimulus was the origin of the Tea
Party. Now we know the story.
How the stimulus
was sold: It would create three million jobs or more. It
would keep the unemployment rate under 8%, instead of 9%
without a stimulus. It would cost $787B. The jobs were
What really happened:
There are 1.2 million fewer jobs now than when the
stimulus was passed. Unemployment went over 10% (vs.
prediction of 8%) and is still over 9% (vs. prediction of
about 6.8% at this time). It cost $814B or
more. Maybe 6% of it went to infrastructure
projects. Obama's reaction? A
little joke: "Shovel ready was not as shovel ready as we
Of course, Obama
and his minions simply blame this on their underestimating the
size of the mess they inherited from Bush. But that has
been studied by economists at the University of Western
Ontario and Ohio State University. The verdict: the stimulus
itself cost about one million private-sector jobs; the net job
loss was about 595,000. We'd have been better off without any
"stimulus" at all, just as the Tea Party said.
ObamaCare was sold as a way to bend the health "cost
curve" down. As it turned out, it is bending the cost
curve up -- health care will be more costly than it
would have been without ObamaCare. It's so great that in its
first year about 1,500 companies, states, and unions were
strangled the recovery in the crib. The private
sector has been generating only 6,400 jobs per month since
it was passed, compared to 67,600 before. We would never return
to pre-recession unemployment levels at the current pace. ObamaCare
is costing us over 60,000 jobs per month.
According to a new study by IHS
Global Insight, merely picking up the pace in granting oil
drilling permits would go a long way in producing jobs
throughout the US, adding to GDP and reducing dependency on
foreign oil sources. In 2012 alone it could mean 230,000 new
jobs, $44B more in GDP, 150 million more barrels of oil, and
$15B less in imported oil.
Now we find ourselves in another budget fight, with the Tea
Party getting the blame from much of the media and liberal
punditry. The truth is that Democrats have not even written,
much less passed, a budget of any kind in over two years; they
simply kill everyone else's.
The Republican-led House
passed a budget on schedule in April. Senate Democrats
voted it down.
Obama proposed a budget in
February. The Congressional Budget Office scored it as
having a 10-year cumulative deficit of $9.5 trillion. The
Democrat-led Senate voted that down too, 97-0.
The House proposed the only
written plan for addressing the debt ceiling -- the Cut, Cap
and Balance plan. Senate Democrats voted that down, too.
take a keen insight to see that Senate Democrats are the
"Party of No" and the obstacle to resolving budget and debt
Just last December Obama said keeping Bush's tax rates was
critical to keeping the recovery going. He and the Democrat
Congress at the time extended them for another two years, plus
added over $300 B in additional tax cuts
and credits. Now, just seven months later, Obama insists
that any deal to raise the debt ceiling must include
the Dodd-Frank bill to regulate all finance in the country is
a thousand-page-plus piece of legislation. As the New
York Times understated it just after its passage, "[a]
number of the details have been left for regulators to work
out." Got it? Those thousand-plus pages did not include the
The EPA now has power
to regulate every use of fossil fuels in this country, as
well as every breath we take, if they so deem. What will it
do with that power? You get to guess. If you think it
wouldn't do anything too stupid, know that the FDA
just outlawed common inhalers for asthma sufferers. Their
reason was, get this, those inhalers are blamed for
contributing to upper-atmosphere ozone loss.
Even if you
think CFCs contribute to ozone loss, how much do you think the
CFCs released by asthma inhalers have to do with it? And how
much is the indirect and ambiguous loss of ozone worth
compared to the direct and known suffering of asthma
patients? Such is the wisdom of government regulators.
The list is
endless. If you were thinking of starting a business or
making an investment that might not pay off for five or ten
years, would you feel like you know the rules and could depend
on them? No, you'd hunker down, which is exactly what
everyone with any money left is doing right now.
recovery is not some mystery. It is very clearly the result
of decisions -- decisions made by Obama and the Democrats. At
every opportunity they grew government, shrank the private
sector, and viewed budding enterprises as little more than
beasts of burden -- something to whip while healthy and carve
up and eat when not.
As Robert Mugabe
viewed white-owned farms, Obama views corporations not yet in
Democrats did helped; everything they did hurt. Everything.
Min wage. TARP. Stimulus. ObamaCare. The Gulf oil spill.
Every budget they ever proposed, written or not. Every
little czar they put in place to spend other people's money
and to bully the only productive people still toiling away at
the thankless tasks of making stuff and providing jobs.
At every point,
the Tea Party and its sympathizers tried to stop these
idiocies, only to be called ignorant racists. You might want
to ask yourself why so many people talk of the "Tea Party,"
whatever that is, the way Lenin and Stalin talked of kulaks
and saboteurs, whoever they were.
Do "taxed enough
already," "stop spending," and "obey the Constitution" sound
that crazy to you? If so, you might want to think about why
you think so.
Hoven can be followed on Twitter.
His bio and previous writings can be found at randallhoven.com.