Plutocracy Dominant In America?

Chances are, if you know who Francis Fukuyama is at all, you know him as an original conspirator of the Project for the New American Century, as one of the cheerleaders for an illegal attack on Iraq and as neocon apologist for Bush who later denounced Bush and Cheney as dishonest manipulators of public opinion. In endorsing Obama in 2008, he wrote that "It is hard to imagine a more disastrous presidency than that of George W. Bush. It was bad enough that he launched an unnecessary war and undermined the standing of the United States throughout the world in his first term. But in the waning days of his administration, he is presiding over a collapse of the American financial system and broader economy that will have consequences for years to come. As a general rule, democracies don't work well if voters do not hold political parties accountable for failure. While John McCain is trying desperately to pretend that he never had anything to do with the Republican Party, I think it would be a travesty to reward the Republicans for failure on such a grand scale." Today he teaches at Stanford and this week he wrote an article for Toronto's Globe and Mail about Romney's reach for the presidency and the "serious case to be made that the rich throughout American history have manipulated government in such a way as to protect and expand their own wealth and influence at the expense of others."

It is well established that income inequality has increased substantially in the United States over the past three decades, and that gains from the prolonged period of economic growth that ended in 2007-2008 have gone disproportionately to the upper end of the richest layer of society. A study by French economists Thomas Piketty and Emmanuel Saez shows that, between 1978 and 2007, the share of U.S. income accruing to the top 1 per cent of American families jumped from 9 per cent to 23.5 per cent of the total.

As the years went by and those outsized gains at the top of the income distribution pyramid failed to trickle down in any substantial way, one would have expected growing demand for a left-leaning politics that sought, if not to equalize outcomes, then at least to bound their inequality.

But that did not happen. The election of Barack Obama, it turned out, did not arrive on a tide of left-wing populism. While the Democratic majorities in Congress succeeded in moving his ambitious legislative agenda forward, the results fell far short of expectations. The stimulus package did not end the recession quickly. The health-care bill did not include a public option and failed to address the real sources of cost inflation.

Above all, the Dodd-Frank financial regulation reform bill did not change the perverse incentives that led to the crisis in the first place. Indeed, while Wall Street brought considerable opprobrium upon itself, it was arguably the sector of the U.S. economy that suffered the least in the long run. Bank earnings were restored after a couple of quarters. And though the banks now face tougher regulation, Congress failed to seriously consider the one thing that would prevent a future crisis, which was to break up the big banks and put a hard cap on their size. Indeed, the U.S. financial sector is now concentrated in fewer hands than it was before the crisis.

This swing did not happen all by itself. Wall Street spent a huge amount of money lobbying to make sure that the inevitable financial regulation was as weak as possible.

But money alone does not create political trends in the United States. Within a year of Mr. Obama’s inauguration, the most energized and angry Americans were not the homeowners with subprime mortgages who faced foreclosure as a result of the crisis, but rather those who faulted the government for taking steps to protect those homeowners and to prevent the crisis from deepening. It was a strange phenomenon that saw many of those most deeply injured by the crisis become, in effect, objective allies of those who caused it.

This, then, is the contemporary context in which we raise the question of plutocracy in America: Why, given the economic history of the past 30 years, have we not seen the emergence of a powerful left-wing political movement seeking fairer distribution of growth? Why was Mr. Obama pilloried during the 2008 campaign for even using the word “redistribution,” when all modern democracies (including the U.S.) already engage in a substantial degree of redistribution? Why has anti-elite populism taken a right-wing form, one that sees vast conspiracies not among private-sector actors such as bankers and hedge-fund operators but among government officials who were arguably trying to protect the public against real collusions if not outright conspiracies?

Why have there been so few demands for a rethinking of the basic American social contract, when the current one has been revealed to be so flawed? How can it be that large numbers of congressional Democrats and arguably the most socially liberal president in American history seriously considered extending, and even making permanent, the Bush tax cuts of 2001 and 2003? Is this not prima facie evidence of plutocracy?

The most frequent response from the left is “yes”-- corporate America can protect its interests through lobbyists and campaign contributions, and money does lock in their advantages and defeat all efforts at, say, campaign finance reform. A second explanation has to do with American exceptionalism. Many observers have noted that Americans are much less bothered than Europeans by unequal economic outcomes, being far more concerned about equality of opportunity. A third possible reason is much more time-specific: Americans have learned to distrust big government in a way they had not between 1933 and 1969. Like taxpayers in Latin America, but unlike various Swedes, Danes and Germans, Americans don’t want to pay taxes because they are convinced that the government will waste whatever it takes in.

A fourth explanation is offered by Raghuram Rajan in his book Fault Lines: How Hidden Fractures Still Threaten the World Economy. He argues that the working and middle classes whose incomes either stagnated or fell during the past generation were, in effect, bought off by cheap credit. With easy credit having dried up, people are only now waking up to the stark reality that their bankers have done far, far better than they. A final explanation is the one offered by Thomas Frank in What’s the Matter With Kansas?-- working class voters continue to vote for conservative candidates because cultural issues such as guns and abortion are more important to them than economic ones.

It has come as a surprise to many on the left that Mr. Romney-- the “sneering plutocrat,” in the words of New York magazine’s Jonathan Chait-- has pulled alongside or even ahead of Mr. Obama in some polls. They shouldn’t be so shocked. Money, power and class continue to play out in American politics in highly complex and puzzling ways. Plutocracy has kept the system going despite the enormous policy failures it has generated, not to exclude the recent crisis. And it just might push one of its prime beneficiaries, Mitt Romney, to a victory at the polls next month.

We ran this Bill Moyers video a few days ago. It's important enough to run it again, in case anyone missed it the first time:

Why it doesn't pay for pols or pundits to be right

Noted pinhead Francis Fukuyama

"Our system actively promotes people who will lie in the right way without even having to be told to and actively gets rid of anyone who is not a useful idiot – by which I mean anyone who does not tell the lies useful to the powers that be."

-- Ian Welsh (see below)

by Ken

I don't know what prompted this sudden burst of truth-telling by our friend Ian Welsh toward right-wing halfwit Francis Fukuyuma. Is it possible that while I wasn't paying attention, someone was caught taking the pinhead seriously?

Which doesn't mean that I in any way disagree with what Ian has to say about Francis the Writing Mule. And the passage he dredges up, which was indeed once much quoted, apparently noncomically, always struck me as preposterous beyond imagining, and I don't see that there should be any statute of limitations on numbskullery of this dimension. Nevertheless, I bring it up not for the Francis-bashing per se, but for the conclusion to which it leads him to.

It provides a working answer to such imponderable mysteries as:

* How is it that the pols and pundits who were wrongest about the grounds and sensibleness of the invasion of Iraq have almost without exception been rewarded while those who were rightest have almost without exception been punished?

* How does it happen that the economists who were tracking the housing bubble and warning about the dangers of resulting economy-wide implosion have remained voices crying in the wilderness while the stooges who were looking the other way or even deriding the nervous Nellies are still regarded as economic sages? (To put it another way: Why hasn't the Economics Department of the University of Chicago been mission-redirected to flower arranging? Why don't people burst out in hysterics at mention of "Chicago economist"?)

* And in general, why is there so often no reward for pols and pundits who are right and no punishment for those who are wrong?

Just listen.

Sewage

2012 FEBRUARY 20

by Ian Welsh

Why is Francis Fukuyama considered an intellectual? Why is he considered an intellectual worth of praise, his opinion important?

I ask this not because I don’t know the answer, I do, and I’ll get to it, but because so many people seem to believe he is an intellectual.

Let me quote Francis Fukuyama himself, from “The End of History” for no words I could write could condemn him as well as his own:

What we may be witnessing is not just the end of the Cold War, or the passing of a particular period of postwar history, but the end of history as such: that is, the end point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government.

Have more stupid words every been written? Probably, but these are certainly in contention. The stupidity was evident at the time (I heard the title, in my twenties, and knew immediately the author was a high functioning liar or a high functioning moron), and the piece should have been published only as a way of letting him drive a stake through his own heart, at which point he would slink of into well deserved obscurity, being sure to never show his face in learned society ever again, to spare himself the titters, coughs and awkward “oh, umm, hello”s.

Our system actively promotes people who will lie in the right way without even having to be told to and actively gets rid of anyone who is not a useful idiot – by which I mean anyone who does not tell the lies useful to the powers that be. (Well, they can tell the occasional truth, on the rare occasion when it is useful.)

Still, Fukuyama at least made it look good. The newer generation, on both “left” and right barely even goes through the motions.

(Just to be clear, the "conclusion" I was referring to wasn't this last part, which is interesting but not quite so cosmic. It's the next-to-last part.)

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Unwanted Endorsements From Crazy People & War Criminals

Barack, just say no

I was glad to see Senator Obama reject the unsought endorsement of Louis Farrakhan, as well as the implied endorsement from some group of nuts in the Middle East. It's a damn shame McCain put so much effort into pursuing endorsements from religionist fanatics and hatemongers like Rod Parsely, Jerry Falwell, John Hagee and a whole slew of others, some of whom he's already-- post-primary season-- repudiated and others who he will as their crazed statements come out. I'm wondering if he will also reject the implied endorsement he was given yesterday by Fidel Castro when Castro denounced Obama. But we'll leave it up to McCain to figure out the timings for rejecting the various crooked lobbyists, fascist dictators and crackpot snakehandlers who make up his base of support. Today it's Barack Obama who we are calling on to reject an endorsement.

This is someone who has done far more damage to America-- in the real sense-- than Jeremiah Wright ever would or could. I was revolted today to read that Obama was endorsed by neocon maniac Francis Fukuyama, one of the kooks who persuaded Bush that he needed to spread "democracy."

But Francis Fukuyama, the author of The End of History and Professor of International Political Economy at Johns Hopkins University, is now a sharp critic of US President George W Bush and has even come out as a supporter of Democrat frontrunner Barack Obama for president.

Professor Fukuyama is particularly scathing about the Bush policy in Iraq but he says that regardless of who is elected to lead it next, the United States is about to undergo a significant transformation.

In his interview he explained why he doesn't want to see McCain win and why he doesn't think Hillary would be any good and why he feels that Obama is the one. Here's a registered Republican who feels Obama will solve the problems his own advice to Bush helped cause. It's a big shift but he says he's not the only one making it.

"I think a number of people are doing that this year because I think the world is different at this juncture and we need a different foreign policy and there is this larger question about in American politics, I do think that we are at the end of a long generational cycle that began with Reagan's election back in 1980 and I think unless you have a degree of competition and alternation in power, certain ideas and habits are going to get too entrenched."