Check Your Premises Before You Wreck Your Premises: The Romney Campaign Shrugs

“The rich and the crooks are two sides of the same medal, they are the principal category of parasites which capitalism fostered; they are the principal enemies of socialism.”

-Vladimir Lenin, 1918

“We risk hitting a tipping point in our society where we have more takers than makers in society, where we will have turned our safety net into a hammock that lulls able bodied people into lives of dependency and complacency.”

-Paul Ryan, 2012

“I’m stupid rich, got retarded money/I’m special Ed, I got special bread”

-50 Cent, 2008

Today’s conservative has a rather easy time dismissing leftists as naïve “bleeding-hearts” who are presumably too lazy and perhaps effeminate to undertake the rigorous analysis necessary to achieve an understanding of the contemporary world in all of its economic, political, and social complexities. The straw-man “lib’ruls” that right-wing nutjobs love to hate are a cognitively inferior race of beings first and foremost because, like sissies, they evaluate the world in terms of “fairness” and “justice” without acknowledging inconvenient truths such as ballooning government deficits or shrinking profit margins.

But whenever a leftist acknowledges such inconvenient truths and persists in calling attention to the bankruptcy of the capitalist system in the twenty-first century, the right-wing nutjobs get nervously quiet all of a sudden. How can it be that more government spending, not less, is the best plan for the people in both the short and long run if government borrowing at the current levels is unsustainable in both the short and long run?

The scientific socialism of Marx and Engels has always posed a far more serious intellectual threat to the legitimacy of capitalist rule than the utopian moralism of reformers and anarchists. It sets forth a rigorously scientific methodology for understanding the real world in real time that acknowledges and even welcomes the existence of material contradictions in the social organization of production.

Like most people living on the planet, Marxists are indeed morally outraged by the parade of horribles that capitalism has unleashed and continues to unleash upon society. But the methodology of scientific socialism demands that one temporarily set aside one’s personal indignation when studying the social reality of the present time. It demands that one pay close attention to objective contradictions in the global economy, like the fact that more productive factories that produce more widgets in less time using fewer workers may lower businesses’ operating costs but in so doing produce higher unemployment, lower wages, and thus ultimately less demand for those very widgets. To acknowledge contradictions such as these is to give up any illusion that capitalism can be “fixed” or that we should even be trying to “fix” it. It is this dialectical thought process, and not the rigid adherence to any set of dogmatic principles, that makes one a Marxist.

Ayn Rand, the Muhammad of the Mayberry Machiavellians that comprise today’s Republican Party, did not merely declare war on social democracy and collectivism of all types. She also set out to undermine, by way of sheer philosophical argument, the very dialectical thought process that Marx and Engels introduced into the realm of the social sciences. Rand denied the existence of contradictions and claimed that whenever one perceives a contradiction, one must “check one’s premises,” because surely at least one of those premises is wrong. Thus money cannot possibly be simultaneously a store and a measurement of value on the one hand and a means of exchange, circulation, and repayment on the other. Waves are waves and particles are particles, goddamit! Why? Because Ayn Rand said so. Now get a fucking job, slacker.

Which brings us to the premises Mitt Romney assumed to be true when he shared his opinion about the 47 percent of Americans who don’t pay federal income taxes with what he believed at the time was a private audience of Atlas Shrugged characters. Either Romney himself assumed, or he assumed that his audience assumed, that the same 47 percent of Americans who pay no federal income tax are (a) committed Obama supporters who can never be persuaded to vote otherwise and (b) welfare cheats who produce zero value for society while consuming an ever-growing proportion of society’s resources.

Had Romney or his audience applied dialectical thinking when studying this large chunk of the American electorate, they would have acknowledged the seemingly contradictory state of affairs in which masses of Bubbas and Skeeters numbering in the tens of millions who are part of that 47 percent have been a reliable and absolutely crucial part of the Republican base ever since Richard Nixon’s campaign staff started inventing various innocuous-sounding euphemisms for putting uppity blacks in their place. They may have even pondered the fact that the loyalty of said Bubbas and Skeeters to the Republican Party has always been tenuous because the GOP has not in the past several decades actually benefitted them in any substantial way (other than, ironically, lowering their tax burden!) but has merely validated their (largely valid) resentments against a “liberal” class that threw them under the bus in its drive to appoint slightly more women and minorities to manage its hedge funds and private equity holding companies.

The “47 percent” video will not, by itself, determine the outcome of the election, but it is a prophetic foretelling of things to come. Romney’s statement is symptomatic of the attitude of an entire ruling capitalist class that has long ago given up trying to check its ideological premises.  The apologetic politics of American capitalism today is in increasing jeopardy not, as Rand might have claimed, because any one of those premises is false, but in fact because each of them, taken on its own, is empirically true. Yes, there is a class of parasites and moochers in America who accumulate and consume without working, and yes, a good number of these parasites and moochers—perhaps even Romney himself in previous tax years—are part of the 47 percent who pay no federal income taxes. Yes, Obama supporters are more likely than Romney supporters to believe in a stronger role for government in the economy. Yet when the Republican presidential candidate attempted to weave all these separately valid empirical truths together into a coherent narrative that fits into the intellectual straightjacket that characterizes the mass politics of the contemporary GOP, the contradictions stood naked and exposed for all to see.

Getting rid of Medicare, Medicaid, Social Security, federal college assistance, food stamps, unemployment insurance, and other “free stuff” is not exactly a “surgical strike” that will affect only the black welfare queens, union thugs, and dope-smoking Marxist grad students who probably would never vote for Romney anyway while leaving the Bubbas, the Skeeters, the limbless war vets, the old timers with more “traditional” values, and countless other “decent white folks” unscathed. Romney is now on record as saying essentially to America’s poor and working-class white voters: “You are no better than niggers, and I intend to enslave you.” Maybe it’s about time they took the hint.

The LIBOR Theory of Value Has Been Discredited

Nothing is more amusing in the reports of Parliament for 1857 and 1858 concerning bank legislation and commercial crises than to hear of “the real rate produced” as the directors of the Bank of England, London bankers, country bankers, and professional theorists chatter back and forth, never getting beyond such commonplaces as that “the price paid for the use of loanable capital should vary with the supply of such capital,” that “a high rate and a low profit cannot permanently exist,” and similar specious platitudes. Customs, juristic tradition, etc., have as much to do with determining the average rate of interest as competition itself, in so far as it exists not merely as an average, but rather as actual magnitude.

Karl Marx, Capital, Volume III, Chapter 22

As this crisis develops, if you are an equity portfolio manager and you want to outperform the market, you are going to have to position your portfolio so that it benefits most from your own wealth destruction and that of your family, friends and colleagues. Almost everybody is going to lose and there aren’t many places to hide. This is deeply unpleasant but you can blame the central planners.

Paul Mylchreest, Thunder Road Report, July 5, 2012

The human mind is conservative by instinct. We naturally want to be able to trust authority, because if we can’t, then we have nobody to rely on but ourselves and each other, and that is scary. The more power and influence that a person or institution has, the more we instinctively believe them when they say they know what is best for us—in fact, the more we root for them to be correct in their pronouncements. Surely they know better then we how the world really works, we reason, because the alternative is too terrifying to ponder.

But if those who govern us do in fact have such knowledge of how the world works it does not follow that they willingly share all of it with us, for they know that if they did, they would not be governing us for very much longer.

For decades now, political and social stability in the United States has depended on the economic and financial illiteracy of her people. Year after year, as American wages stagnated, American workers borrowed, spent, saved, and invested based upon certain assumptions about the meaning of value and wealth that simply do not add up when one actually does the math.

When it became clear that the factory job their fathers retired from would no longer be around, they borrowed huge sums to attend a university in order to increase what some snake oil salesman economist referred to as their “human capital.” They took out mortgages from bank representatives who told them the property would appreciate forever and that their ability to make the payments would therefore not depend on income from any source other than rising equity in the property itself. And they stood by trustingly when their employers replaced their retirement pension guarantees with money set aside from their own wages that some “professional” money manager would turn into more money through the magic of globalized securities trading.

And the entire time this was happening, the American worker believed that the USA (and the entire rest of the world after the fall of the Berlin wall in 1989) was governed by something called a free market, which was something real complicated that involved a lot of math but which made it possible for anyone with even mediocre drive and initiative to have a two-car garage, a giant flat screen TV, and a cushy air-conditioned job.

That America was abandoning her productive capital wholesale, that American employers were setting up shop in Asian countries and hiring workers in those countries at wages that would be illegal in the United States itself only to sell the products these “competitive” workers produced back to American consumers at inflated prices, which said consumers could increasingly afford only with borrowed money, did not seem problematic when the “smartest guys in the room” incessantly told the American worker that his country was now a post-industrial “knowledge economy” where value came not from producing goods and services that people need but from ideas!

Now that the jig is up, now that we are finally getting wise to the fact that the those sober, pragmatic grown-ups who now tell us there’s no such thing as a free lunch are the same bullies who stole our lunch money in the first place, more and more of us are peering into the world of the financial services industry and beholding the utter banality of Atlas shrugging.

The banking industry is nothing more than a bunch of dudes sitting in front of computer screens playing World of ClassWarcraft. At the end of the day, whichever brohim racks up the most points in the game wins. Its just that these numbers on the screen are not just points in a video game—they are real currency that can be exchanged for food, clothing, shelter, and all the necessities of life that millions on the planet desperately lack.

In order for John Pierpont Morgan-Chase to unload his losing London Whale sperm all over America’s face and thereby save himself (and human civilization) from total collapse, Mr. Morgan-Chase needs to find willing dupes to buy these worthless securities. These “muppets” include union retirement funds, municipal governments, and millions of trusting, conservative Americans who are just trying to be good savers and not live beyond their means, who understand that the global economy is volatile and risky these days and want to put what little they have somewhere safe where it might grow a little.

Many of these good, patriotic Americans regularly watch Fox News, served or have family who served in the military, and have a personal relationship with Jesus Christ. Whatever will they do when the King of Kings returns to earth and the money-changers give Him a big ol’ Cleveland steamer?

It’s the System, Stupid

The basic point is that the recession of 2001 wasn’t a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment.

-Paul Krugman, 2002

[Perhaps this] borrowing to create cash flow … The personal ‘savings’ rate has fallen to a new all time record low of minus 6%. Rather than curtailing consumption, Americans have merely responded to higher gas prices by borrowing more money. Therefore, the immediate damage isn’t reduced consumption by increased debt. As a result, the actual damage is only being postponed, but with even greater consequences for future consumption, as not only will Americans be required to pay more for energy tomorrow, they will have to pay interest and principal associated with today’s purchases as well. What America has succeeded in creating is not an economy impervious to ‘shocks,’ but merely one which enables their consequences to be postponed to a later date. Unfortunately, that date may have finally arrived.

– Peter Schiff, 2008

The capitalist class, on average, is “bullish” on productive assets in periods of economic upswing and “bearish” on those same assets during slumps. By “productive assets,” I mean to refer specifically to shares in enterprises that create expanding value for the shareholder by producing goods and services and realizing a profit from the sale of those goods and services to the consuming masses.

It is thus self-evident that the value of a productive asset can only grow if said consuming masses (a) have cash or credit on hand and (b) are willing to spend this cash or credit on the goods or services that the enterprise in question produces. Notice I said cash or credit. By “cash,” I mean not necessarily physical dollar bills and coins but merely money that the consumer both owns and possesses outright, that he does not have to repay with interest to a lender.

The shareholders who collectively own a productive capitalist enterprise neither know nor care what proportion of their enterprise’s product was purchased with “owned” money and what proportion was purchased with “borrowed” money during a given quarter. In fact a good many shareholders are indifferent to what proportion of their company’s quarterly earnings comes from sales revenue at all, as opposed to interest on company bonds or capital gains from sales of the company’s own assets. Short term gain is the name of the game for our one percent, and as long as the sausage is juicy, they need not inquire into how it was made.

The short attention span of the investor class trickles down to the rest of us far more liberally than their wealth does. The result is a society divided between a “left” and a “right,” each of which offers a solution to one set of problems while ignoring another set of problems, which the solution to the first set of problems only exacerbates. Some would reinvigorate our moribund Keynesian social democracy by siphoning away the lion’s share of the one percent’s profits while others would pull the plug entirely on what’s left of our welfare state and “let them eat cake.” Everybody is seemingly interested in the misery of the working class and argues over whether this misery is the cause of or the solution to the crisis. For the “left,” unemployment is too high and wages are too low; for the right (though they’ll never admit this publicly during an election year), unemployment is too low and wages are too high.

Both sides of this banal, myopic debate, accept as an eternal given the wage system of employment. Each side insists that only its plan will enable society to achieve the “deleveraging” necessary for the resumption of growth. The “left” conveniently ignores the fact that fiscal stimulus money is borrowed money that can never be repaid. The “right,” meanwhile, willfully forgets that if wages are reduced to levels that are “competitive” on the world market, workers will finance a far greater proportion of the consumption upon which growth depends with borrowed money (if they continue to consume at all). Few among us possess the foresight and/or courage to acknowledge that regardless of whether we have a food stamp president or a paycheck president, we will inevitably continue to have a credit card president.

The rejection of the labor theory of value—what Marx termed the Law of Value—in mainstream American economics became for post-secondary education during and after the Cold War what the Pledge of Allegiance was for high school. We have all been raised to believe that value is purely subjective and that it is identical to price. It was this idea in particular that was responsible for the widespread belief through 2007 that home prices could continue to rise indefinitely. A house is a durable consumer good, not a productive asset. But until five years ago, houses in America were consumer goods that moonlighted as speculative assets. If one refuses to acknowledge that value is created by productive labor, one could easily come to assume that speculative gains cause economic growth as much as the production and sale of goods and services.

The tragedy of the capitalist system is that it both succeeds by failing and fails by succeeding. Furthermore, as time goes on, the system’s successes become increasingly spectacular and its failures become increasingly catastrophic. In the past several decades, the proportion of capital accumulation that is speculative has risen tremendously in comparison to the proportion of capital accumulation that results from the production and sale of goods and services. As long as the capitalist system continues to remain in place on this planet, that speculative gain will only continue to crowd out productive profit. Individuals, corporations, and governments will continue to borrow ever further beyond their ability to repay, and hedge fund swinging dicks will continue to keep rich people rich by dumping the liability for the defaults of a growing army of insolvent debtors on various suckers, chumps, and muppets.

All of the half-assed “reforms” that one hears proposed today from either side are very short-term solutions if they are solutions at all. Every ounce of these “cures” contains a pound of poison. The time has now come for anybody who is serious about the future of humanity to put aside their various idols and superstitions and start thinking seriously about how to wrest control of production away from the shareholders and directors who have proven themselves incapable of being competent stewards of the social product and into the hands of the workers upon whose toil all genuine growth has always depended. This is the only sort of political discussion today that is in any sense an adult discussion.

Attica Rises Up

“It is undisputed that the Greek people have to suffer from the consequences of decades of neglect.”

-German Finance Minister Wolfgang Schaeuble, May 14, 2012

“Everyone realizes that to control debt, competitiveness needs to be increased, and — too bad for the population — it is translated into some form of impoverishment linked to lower wages[.]”

-Belgian Finance Minister Steven Vanackere, May 14, 2012

“I do not know of any banking group that would be put in a situation of difficulty by an extreme scenario in Greece.”

-Bank of France Governor Christian Noyer, May 14, 2012

“The British recovery has been damaged over the last two years not by Britain getting a grip on its public finances but by uncertainty in the eurozone. It is that uncertainty, not austerity, that is doing the real damage to the European recovery, and indeed the British recovery.”

-UK Chancellor George Osborne, May 14, 2012

“I don’t like the way of dealing with Greece of those who are threatening Greece day after day. This is not the way of dealing with partners, colleagues and friends, and citizens.”

-Luxembourg Prime Minister Jean-Claude Juncker, May 14, 2012

Greece’s three-year odyssey through the seas of austerity has been a long, strange, and bad trip. If the country were to comply with the ever-more sadistic terms the Troika has imposed on it as a condition of continuing financial rescue, economists predict that in 10 years it would still be in recession. The bankers of Europe and the political prostitutes in Berlin and Brussels who serve them address the Greeks much in the same way the jealous God of the Old Testament addressed the errant Hebrews: “If you abandon the LORD and serve foreign gods, he will turn and bring disaster on you. He will destroy you, although he has been so good to you.”

Greece’s long-suffering people, we’re told, must choose between the Scylla of continued austerity and the inevitable feedback loop of stagnation it entails, and the Charybdis of abandoning the European currency altogether and striking out on its own.  Economic policy, perhaps for the first time in modern Western history, is being openly discussed as a penological theory, and one that privileges retribution and deterrence far above rehabilitation. If John Maynard Keynes and Milton Friedman agreed on one thing, it was that economic growth is good and should be the ultimate purpose of any economic policy for a nation.  The debate among the capitalists used to be between austerity and stimulus as two alternative vehicles for achieving growth. Today, the debate is between austerity and growth itself!

For the citizens of Attica, whom a jury of Europe’s peerage has convicted such capital crimes as high wages, paid holidays, an early retirement, and generous pensions, this debate has become essentially one of clemency. What is slowly dawning on the Greek people, however, is the freedom—and immense power—that their having nothing left to lose confers upon them. The extent of the social misery in this country has reached such absurdly extreme proportions that the prospect of leaving the Eurozone actually sounds a great deal better for Greece than staying in under the current death-spiral of austerity. Returning to the Drachma, we are told, would be acutely terrible for the country for about two years or so, and then maybe growth will explode, kinda like it did in Argentina, or something.

All around the world, the markets today have spoken in a unified voice that the consequences for Europe and beyond of a “Grexit” would be nothing short of catastrophic—a kind of Lehman Brothers on steroids . . . and PCP. Yet Chancellor Merkel is taking as unflinchingly hard a line toward the fiscal and monetary inmates financially incarcerated in the old world Attica as Governor Rockefeller took toward the inmates who were literally incarcerated in the new world Attica. The difference is that whereas Rockefeller was willing to spill the blood of as many prison guards as was necessary to subdue the restive population in his Attica, Merkel appears to be willing to annihilate the entire global capitalist system as we know it in order to show her Attica who is boss.

The question, fellow citizens of the Earth, is whether we shall continue to play the role of the market’s “correctional” officers.

Higher Education Clusterfuck Redux: The Talk

Middle class parents in the United States (and I acknowledge that “middle class” is an entirely subjective term in the United States) are going to have to make sure they have the talk with their college-bound teenagers from now on. You know, the talk.

America’s middling moms and dads already understand they are expected to have the drug talk (marijuana will never kill you and is probably healthier than drinking but a criminal record can ruin your future so just say no), the sex talk (for girls: don’t dress like a slut and save your punany for a guy who’s going places in life; for boys: wrap that shit up and make sure you at least call her within 24 hours lest she accuse you of raping her), and the race talk (for black kids: whenever you see a man in uniform, spread your cheeks, lift your sac, and mind your manners; for Hispanic kids: never leave home without your passport, driver’s license, birth certificate, social security card, three separate utility bills, and a notarized affidavit from the homeowners association swearing that we live here; for white kids: never venture north of 96th Street and always carry a little cash on you because if you’re wallet’s empty when they mug you, they’ll be more likely to violently take out their rage and anger over 400 years of slavery and oppression on you personally out of pure spite; for Asian kids: I don’t care if it’s Saturday, 70 degrees, and sunny and all the other kids are playing ball outside . . . weekends and holidays are for the other, less disciplined races . . . now do your homework!).

But now, rising tuition and persistently high unemployment are giving rise to a new talk that all parents must have with their kids before they matriculate at one of America’s fine institutions of higher learning. That talk goes something like this:

You know how we always used to tell you that you can be anything you want to be when you grow up as long as you work really hard at it and never give up? Well, that’s not exactly true. You see, the cost of sending you to college for four years, when you factor in tuition, room and board, health insurance, books, and so forth, is over $200,000. That’s money we simply don’t have ever since your father got downsized and had to cash in his 401(k) (at a time when it was worth half of what it was worth before the economy crashed) so we can continue to pay our bills. That means you will have to take out student loans. Now I know they never taught you basic principles of personal finance in school, but since you are going to end up owing somebody over 200 Gs in four years, it’s important that you know what interest is.

You see, nobody just lends large sums of cash to a total stranger out of the goodness of their heart. If I’m sitting on a lot of money and I let somebody borrow a bunch of it, there’s no guarantee that person is gonna pay it all back. But if I only let them borrow this money on the condition that they pay it back and then some, something is in it for me to be a lender. Now, the chunk of money that they’re gonna lend you so you can go to school—that’s called the principal. You’re gonna have to pay all of that back. But wait . . . there’s more. You’re also gonna have to pay them an extra chunk of money on top of that which is calculated by taking a percentage of the principal. Now focus . . . did you take your Ritalin today? Good.

Now, after you graduate, you will have to make monthly loan repayments. What will happen is, they will pick a block of time for you to pay it all back – say 10 years after you graduate – and then divide the principal by the number of months in 10 years. There are 12 months in a year, so there are 120 months in 10 years. You will owe $200,000, so $200,000 divided by 120 is $1,666.66 per month for ten years. But that’s just the principal! The interest rate on your loan is 3.4 percent. 3.4% of 1666.66 is $56.66. That means you will owe $1,723.33 per month.

That is to say, you will continue to owe $1,723.33 per month for ten years if you consistently make that monthly payment for ten years. If you miss a payment, the interest you didn’t pay will get added to the principal, and the monthly payment you owe will increase! That is to say, the less able you are to pay back your loans, the more you will owe, and the less you will be able to pay back your loans, and the more you will owe, and so on ad infinitum (which, by the way, is Latin for until the end of time!).

So why is it important that we’re telling you this now? Because very soon you will be picking what courses to take and what to major in and you’ll be discovering who the fuck you are and what you’re good at. What we are trying to tell you today is that it doesn’t matter who the fuck you are or what you’re good at. There are certain fields of study that will qualify you to get one of the shrinking number of jobs that will enable you to pay off your debt before you die. You will have to be exceptionally successful within those fields, whether you are good at them or not, and we don’t just mean getting good grades. You will have to know the right people and probably at some point stab your rivals in the back to get ahead.

What’s that you said . . . ? You don’t wanna go to college at all if that’s the price you will have to pay for the privilege? Do you wanna be a loser all your life? You think flipping burgers is a respectable vocation? Let’s get real – you’ve been raised all your life to feel accustomed to a standard of living that you will have to fight to the death now to perpetuate for yourself as an adult. Most of what you know about college you probably got from the movies, and right now, we’re telling you that in real life, for you, the movie you should have in mind when thinking about college is not Animal House or Revenge of the Nerds but rather The Hunger Games with a little Lord of the Flies mixed in for good measure.

So, what fields of study will be most likely to land you a job when you graduate? Well, where do people make money in America these days? Think F I RE – finance, insurance, real estate. Do whatever you need to become qualified to work in these sectors. Yes, I know those are the very sectors that put America in the situation where we have to have this talk with you in the first place, but part of growing up is learning to accept that life isn’t fair. You can either become a part of the problem and continue to live as an adult with the comforts you grew up with as a kid, or you can try to be part of the solution and end up destitute, with a ruined credit rating, unable to marry and raise a family, much less qualify for a home mortgage, and very likely dead or in jail when its all said and done.

Well, I’m glad we had this talk, and remember, we’re both so very proud of you!

Hoodies, Reasonable Suspicion, and Black America’s Revolt Against Cosbyism

Are you not paying attention, people with their hat on backwards, pants down around the crack. Isn’t that a sign of something, or are you waiting for Jesus to pull his pants up (laughter and clapping ). Isn’t it a sign of something when she’s got her dress all the way up to the crack…and got all kinds of needles and things going through her body. What part of Africa did this come from? (laughter). We are not Africans. Those people are not Africans, they don’t know a damned thing about Africa. With names like Shaniqua, Shaligua, Mohammed and all that crap and all of them are in jail.

Bill Cosby, 2004

NYPD critics . . . erroneously assert that the police are racially biased in making stops, ignoring the fact that we focus police resources where spikes in violent crime are the highest, and where last year 96% of shooting victims were minorities, mainly young men of color.

From a March 18, 2012 official NYPD press release titled “New York Times is Wrong: NYPD Lawfully Thwarts Terror & Suppresses Violence”

In the last post, your humble host made a passing, parenthetical reference to a phenomenon he labeled Cosbyism. Cosbyism is an ideology that says black people in America, particularly the younger generation, have nobody to blame but themselves for the fact that their schools are underfunded and crumbling, they can’t get a job, they get harassed and worse by cops all the time, their wealth evaporated into thin air after the housing bubble burst, and so on and so forth.

Cosbyism is a variation on the classic American rugged individualism of Horatio Alger novels, but with an important twist: the traditional idea held that individual moral failings are the cause of one’s poverty and lack of upward mobility and that therefore individual personal responsibility was the solution. Cosbyism, however, holds that black people have failed collectively, as a race, to achieve the American dream, but it nonetheless holds each black individual responsible for pulling up his or her pants, turning off the TV, saying ask instead of ax, “looking like a prospect instead of a suspect,” and doing whatever else is necessary to endear himself or herself to America’s ruling white capitalist power structure.

White people, even white people who appear regularly on Fox news, will seldom if ever publicly espouse Cosbyist talking points because the racism that is inherent in the Cosbyist line of thinking becomes impossible to deny when such talking points come out of white lips. Instead, you see various “leaders” of the black community saying these things, and that somehow makes it ok, as though changing the messenger somehow changes the message.

The intellectual history of Cosbyism is part of the intellectual history of neoliberalism more generally but is a product, more specifically, of the “broken windows” theory of crime control that criminologist James Q. Wilson conceived of in the 1980s and NYC Police Commissioner Bill Bratton implemented in the early 1990s. New York in those days had a lot of character. Subway trains were covered in graffiti, giant boomboxes blasted Gang Starr, Public Enemy, and A Tribe Called Quest, Times Square was obscene, squeegee men serviced car windows at every major intersection, and Washington Square Park was an open air supermarket for dope. The 1% felt at the time that the city was impossible for them to govern. Somebody had to clean it up, make it safe again for tourists, yuppies, Mickey Mouse, and Elmo.

The savior our social betters were looking for was a man named Rudolph W. Giuliani. Giuliani become mayor in 1993 by posturing himself as the tribune of the NYPD and of the ethnic white communities in the outer boroughs from which most NYC cops hailed. He had lost his previous bid for mayor to David Dinkins in 1989, who then became NYC’s first black mayor. The ferocious degree to which the city’s predominantly Irish and Italian police force resented having to answer to a black man in City Hall equaled if not surpassed the Tea Party’s racially tinged hatred of President Obama. Giuliani won in 1993 by stoking this white ethnic working-class resentment while simultaneously telling the city’s financial and business elite that unleashing that resentment on poor black communities in the Bronx and East New York was the key to cleaning up the city and making it open for business once more.

Yet Giuliani was smart enough to avoid sounding like George Wallace with a Brooklyn accent when justifying his police department’s new reign of racial terror to the liberal media, and here’s where Wilson’s “broken windows” theory came very much in handy. That theory attributes high crime levels in a neighborhood not to poverty, lack of opportunity, or underinvestment, but rather to superficial aesthetic deficiencies like broken windows or graffiti-covered walls and more generally to the social acceptance in those neighborhoods of trivially minor crimes like smoking a joint, taking a leak in a dark alleyway, or jaywalking. If society imposes draconian punishments on these de minimis offenses, the neighborhood will look cleaner, people will have more respect for authority, and therefore the incidence of truly serious, violent felonies will drop, and then maybe one day a Starbucks will move in. Liberals, particularly the white ones, love Starbucks, so they never objected to broken windows policing. To them, the end really did justify the means. To this day, there has never been a Democrat mayor of New York City since Dinkins.

It was now Giuliani Time, which meant that if you were black, you could be lawfully walking down the street minding your own business when all of a sudden, out of nowhere, cops might haul you into the station and stick a plunger up your ass or unload a number of rounds into you that would put the Corleone family out of business. Whenever something like this happened, the mayor would go on TV and reflexively defend the cops before doing everything he could to defame your character, including illegally unsealing your juvenile record in order to prove that because you were caught playing hooky twice, you were “no altar boy.”

After 9/11 happened, the there was a lot of scrutiny on how the NYPD was treating Muslims, and rightfully so, but little awareness of the department’s new “stop-and-frisk” policy. Bloomberg was now mayor, and the Starbucks-drinking, Sex-and-the-City TEVOing liberal class didn’t seem to take offense to an unabashed plutocrat the same way they took offense to a thinly-veiled bigot like Giuliani. The term “stop-and-frisk” is familiar to any law student who ever had to read Terry v. Ohio for a criminal procedure class. Terry was a case about a cop in downtown Cleveland who saw two suspicious figures looking like they were casing a store they intended to rob. The cop didn’t have probable cause to make an arrest, but he stopped them briefly and patted down the outside of their clothing to see if they were armed. The Supreme Court said this is ok, as long as the cop’s suspicion is “reasonable,” even in the absence of probable cause. This has been the law since the late 60s.

Under Bloomberg, however, such “reasonable” suspicion is no longer individualized–it is the black community in its entirety that is under suspicion, and the NYPD claims, if not in these exact words, that its suspicion of the black community is “reasonable” because, well, they’re black. They then cite some kind of statistic about black-on-black crime and shed crocodile tears over the victims of such crimes. Their private Facebook pages, meanwhile, say something different entirely.

What happened with the NYPD in the last 20 years has happened in police departments nationwide, but communications technology has only very recently enabled videotaped evidence of  “broken windows” policing’s excesses to spread to millions instantly. The economic downturn, meanwhile, has caused a lot of white folks for the first time in their lives to get uppity with the State. All last fall, Americans saw footage of a mostly white crowd chanting “fuck the police!” and even identifying themselves with the black victims of broken windows policing (“We are all Sean Bell, NYPD go to hell!”). It is unclear how many of these uppity white folks realized that their loud, aggressive, and vulgar professions of solidarity with black America in the face of police repression was itself a product of of the “courtesy, professionalism and respect” which white America reserves exclusively for its own malcontents. Much of black America, however, and the youth in particular, must have viewed Occupy Wall Street with a mixture of elation and trepidation–elation at the change that was seemingly around the corner in this new radical period we’re living in but fear of personally being an agent of that change after a lifetime of repression that had been invisible outside their own communities. After all, white people getting loud and disorderly in America may be a political inconvenience for our rulers, but black people doing the same is grounds for calling out the National Guard.

Which brings us to Trayvon Martin, a young man who lived his life, it seems, according to the Cosbyist playbook. Martin’s friends say he never picked a fight in his life. He was wearing his hoodie on the night he was shot for its intended purpose–it was raining. His shooter, meanwhile, was a wannabe cop whom the police academy probably rejected as too overzealous. The housing crisis had hit central Florida hard, and lots of foreclosed homes in Sanford were selling for dirt cheap, which meant that the gated community George Zimmerman was so altruistically protecting had grown considerably more racially integrated in recent years. In seeking to emulate a real police officer, Zimmerman copied the aggressive, authoritarian, “broken windows” style of policing that he saw real police officers practicing. And here’s the rub. Black bodies have one thing in common with broken windows and graffiti-covered walls: all three bring down property values in a neighborhood. In this sense, the free market is, quite literally, a bigot.

When a young man comes to realize that he is the broken window the system is perpetually trying to eradicate, when he realizes that pulling up his pants is not the same thing as pulling himself up by his bootstraps and that speaking the king’s English will only make the nobility despise him all the more passionately, when he sees the middle-class utopia that has from time immemorial defined itself by excluding him suddenly crumbling to dust and its citizens in open revolt, it is not inconceivable that he will from all of this conclude that it is well past time to exercise his God-given right to be just as uppity as these white folks in the Missouri GOP caucuses in the video below got when they found themselves suddenly disenfranchised.

Class War and Culture War

There is a religious war going on in our country for the soul of America. It is a cultural war, as critical to the kind of nation we will one day be as was the Cold War itself.

-Pat Buchanan, 1992

The idea is that the state doesn’t have rights to limit individuals’ wants and passions. I disagree with that. I think we absolutely have rights because there are consequences to letting people live out whatever wants or passions they desire. And we’re seeing it in our society.

-Rick Santorum, 2003

The Cricket has thus far avoided making any commentary on Rick Santorum other than “huh huh huh, huh huh huh, he said Santorum.” It is now March 2012, however, and Not-So-Slick Rick has persevered in the GOP primaries for long enough that he has earned his place in the political-economic analysis this blog specializes in.

After the crash of 2008, it seemed that social conservatism had reached a permanent dead end, almost as though it had been a luxury that the country could only afford when the unemployment rate was at “reasonable” levels. With millions more suddenly out of work, nobody much cared who was smoking what or who was fucking whom and in what orifice. But now all of a sudden, we hear that the Obama feds are cracking down hard on medical marijuana, that American right has launched a “war against women,” among other things.

The culture war politics the Republicans have engaged in for the last several decades is at heart a small variation on their “Southern Strategy,” which dates from roughly the same point of origin. If the Southern Strategy said to white working class men: “Willie Horton just escaped from prison and he’s coming after your lily white daughter with a sawed-off shotgun in one hand and his big black dick in the other,” the culture war said to the same group of voters: “Your lily white daughter–and wife–are kind of turned on by Willie’s willie, your son just purchased that new Ice-T album with the song about killing cops, and your other son is a homosexual who also wants a piece of Willie’s magic johnson.” All of that–plus the fact that another Willie just signed NAFTA and now the plant you worked at all your life just moved to Red China–is the fault of . . . wait for it . . . the left!

That last part, about how the Democrats have been complicit in selling the American dream down the Rio Grande and ultimately the Yangtze River, has been absolutely critical to the success of the right’s culture war politics all these years. The truth is, it was the Democrats who abandoned the NASCAR dads and security moms, not the other way around. It was this class-blind third way neoliberal Clintonist bullshit, which substituted diversity for equality and told poor white people–collectively–to blame their own bigotry for their deteriorating circumstances instead of the greed of the one percent, that drove so many American workers into the arms of their worst enemy. (As an aside, it should be noted that Clintonism has increasingly, over the years, albeit subtly, told poor black people–collectively–to blame their lack of family values for their perpetually dismal circumstances–one might call this Cosbyism).

Rick Santorum is currently trying to capitalize on this culture war tactic, which has proven so successful year after year during our lifetimes. We are, however, living in a period of history unlike any that has existed in our lifetimes (unless you happen to be old enough to remember the 1930s). Because the capitalist system is beset by internal material contradictions, the ideological superstructure that the ruling class uses to maintain its popular legitimacy likewise is beset by contradictions. Chief among these ideological contradictions is the tension between saving and spending, between frugality and indulgence, between abstinence and ecstacy. A capitalist is compelled to constantly set aside a part of his profit for reinvestment instead of spending it all on limos and prostitutes and blow. The ultimate id motivating the capitalist to postpone gratification in the short run is the promise of even more limos and prostitutes and blow in the future.

Under the pretty fiction of equality under the law, workers really are capitalists, and their saving and spending habits are to be evaluated in the exact same manner. In reality however, the saving and spending habits of capitalists are a truly personal matter–if a certain capitalist overindulges too much, his business fails, the market punishes him justly, and another capitalist, with better self-discipline, takes his place, end of story.

The saving and spending habits of workers in the aggregate, however, are of interest to the capitalist class in the aggregate. The owners of capital–collectively–depend on as many workers as possible constantly spending, constantly indulging, constantly fulfilling their desires through the act of exchange, in order to stay in business. Each individual capitalist, however, wants his own workers to be as frugal as possible, to be good savers, to abstain from pleasure and excess. That way they can be paid as little as possible and still show up for work every day.

The serious strategists of capital understand that the system will not recover from the global crisis now afflicting it any time soon and that the means by which it recovers will not involve another speculative bubble, another mania where people start spending money with a ferocity worthy of a gay crystal meth orgy. The real “correction” that must take place before genuine growth can resume is the “deleveraging” of the American dream itself. For decades, the good times were kept on life support by easy credit, but now that bill is finally due, and there is no way out for America’s investor class other than to force American workers to be more “competitive” with workers in other countries. The “competitiveness” of workers is really a euphemism for their willingness to settle for less while producing more–to be more like those Chinese Foxconn workers who make your iPhone.

That the family values conservatism Santorum and his ilk preach seems so antithetical to the libertarian “freedom” talk that conservatives–often the same ones–also promulgate should not be so confusing once one understands that the former message is only aimed at and only really applies to the working class. The rich will continue to drink and smoke and fuck and do blow and have mistresses and father out-of-wedlock children and engage in all kinds of exotic homosexual acts and maybe even do “man-on-dog,” and Rick Santorum will never chastise them for any of it. In fact, the only reason the rest of society is being pressured by the top one percent to have stable, two parent families and not to have extramarital sex and not to enjoy any kind of sex for that matter and to spend our Sundays in church instead of, say, at the mall, is so that we may, by our sacrifice, by our abstinence, by our self-denial restore the economic conditions that permit that top one percent to resume both their literal and their metaphorical orgy.

The Freudian Slip Heard Around the World: Mitt Romney Puts Free Enterprise on Trial

[Mitt Romney] and his friends at Bain were bad guys. Any real capitalists should disavow Romney’s ‘creative destruction’ model that made him wealthy at the expense of thousands of American jobs.

Independent political attack ad supporting Newt Gingrich’s campaign

“I will suggest [private equity firms are] just vultures[.] They’re vultures that are sitting out there on the tree limb, waiting for a company to get sick. And then they swoop in, they eat the carcass, they leave with that and they leave the skeleton.”

Rick Perry, January 9, 2012

Now Main Street’s whitewashed windows and vacant stores

Seems like there ain’t nobody wants to come down here no more

They’re closing down the textile mill across the railroad tracks

Foreman says these jobs are going boys and they ain’t coming back

Bruce Springsteen, 1984

Those who continue to remind us that Mitt Romney’s professed penchant for being able to fire people was taken out of context, that the GOP frontrunner was making a comment about consumer choice in health insurance (which, by the way, has about as much to do with reality as unicorns) that we have no right to read further into, are insulting our intelligence. The Obama camp’s intention of framing a general election campaign against Romney as a Main Street vs. Wall Street thing–a kind of Bowdlerized answer to Occupy–is not exactly classified information.

The Democrat establishment believes that the 99 percent (the Great Unwashed to whom they must pander every four years) does not currently grasp intellectually such concepts as “private equity,” “leveraged buyout,” and “hostile takeover.” It all must seem to simple folks in the heartland like some mysterious shit guys in suits do with their cellphones somewhere in Manhattan. After all, if American voters did by and large understand that stuff, there never would have been Reagan Democrats and NASCAR dads, right?

Running against Romney is supposedly going to shine the light, at long last, on the connection between those sorry yokels hoarding a lifetime’s worth of cheap merchandise on reality TV and the guys in suits hoarding the cash that said yokels exchanged for said merchandise. Romney could have used any number of metaphors to make his point; his instinct was to go with what is most familiar to him: firing people.

Romney has thereby hastened an event that was inevitably destined to happen at some point this election year. That event is the sudden and violent decoupling of “job creator” and “capitalist” in the mind of the American electorate. By instantly jumping on the statement as a political admission against interest, conflating in the process his record as a private businessman with his record as an elected official, Romney’s more-conservative-than-thou rivals have put themselves in the embarrassing position of sounding a lot like Michael Moore.

But what’s a right-winger to do when adherence to free market principles interferes with the competitive instinct of the individual to exploit every opportunity that presents itself for short-term gain? Fomenting a little old-fashioned proletarian class warfare in the service of a regressive and reactionary agenda is a time-honored tradition that dates back to Europe during the Depression. Hitler, after all, didn’t call his party the National Libertarians.

Time will only tell whether Gingrich et al. continue to run against Romney’s success as a corporate raider as opposed to his failure as a politician. What is certain, however, is that what is now called the “dark side of private equity” is on the table for political debate in households all over the country, and voters don’t like what they’re learning about what the guys in suits talking on cellphones have been doing to their future for the past thirty years.

But can either Obama or Romney’s GOP rivals really run against the King of Bain in this way without running against private equity itself? And can they really run against private equity without running against capitalism? It’s not as though what Romney did at Bain was public policy. He saw an opportunity to get rich and he took it. Ain’t that the American way?

It would be one thing if this was simply a moral question about the past–something akin to Trent Lott’s sympathizing with Strom Thurmond’s defense of segregation–that is a teachable moment but has no contemporary political or social relevance. Private equity, corporate predation, and mass layoffs however, still happen. All of the giant firms that survived the crash of got bailed out after 2008 are gobbling up the carnage as we speak. And if you look at the people Obama actually surrounds himself with, they are nothing other than the new Mitt Romneys, Wall Street scumbags gorging themselves without any restraint.

Now that the 99 percent are on the move, the traditional pandering tactics that we have grown accustomed to all our lives are suddenly fraught with peril for those who would govern. You’re not hallucinating; that flag you saw the guy waving at the NASCAR race was red and it had a hammer and sickle on it.

Ron Paul: The Highest Stage of American Exceptionalism

“In the United States, the imperialist war waged against Spain in 1898 stirred up the opposition of the ‘anti-imperialists.’ the last of the Mohicans of bourgeois democracy who declared this war to be ‘criminal,’ regarded the annexation of foreign territories as a violation of the Constitution, declared that the treatment of Aguinaldo, leader of the Filipinos (the Americans promised him the independence of his country, but later landed troops and annexed it), was ‘jingo treachery,” and quoted the words of Lincoln: ‘When the white man governs himself, that is self-government; but when he governs himself and also governs others, it is no longer self-government; it is despotism.’ But as long, as all this criticism shrank from recognizing the inseverable bond between imperialism and the trusts, and, therefore, between imperialism and the foundations of capitalism, while it shrank from joining the forces engendered by large-scale capitalism and its development-it remained a ‘pious wish.’”  (Vladimir Lenin, Spring 1916)

“Simply put, freedom is the absence of government coercion. Our Founding Fathers understood this, and created the least coercive government in the history of the world. The Constitution established a very limited, decentralized government to provide national defense and little else. States, not the federal government, were charged with protecting individuals against criminal force and fraud. For the first time, a government was created solely to protect the rights, liberties, and property of its citizens. Any government coercion beyond that necessary to secure those rights was forbidden, both through the Bill of Rights and the doctrine of strictly enumerated powers. This reflected the founders’ belief that democratic government could be as tyrannical as any King.” (Ron Paul, February 8, 2005)

What are we to make of the ideological oddity that is Ron Paul? The Texas congressman, who is by many accounts slowly and steadily attaining frontrunner status as a candidate for president in the GOP primaries, in spite of the media’s willful ignorance, wants to end U.S. imperialism in the Middle East and beyond–along with the military-industrial complex that supports and profits from it–and then remove every last governmental restraint on the ability of America’s ruling capitalists to reinvest the “peace dividend” in what he promises will be productive, socially beneficial endeavors. He wants to dismantle the expanding Homeland-Security police state at home and force cops to actually give a shit about the Bill of Rights, even presumably in the ghettos, which he tells us can do without taxpayer-funded “welfare-state” provisions like public schools and hospitals. He wants to restore America to its purer, more noble past, a throwback utopia that emerged historically straight out of the heads of Jefferson, Madison, and the rest of the crew. If he is unreasonable, it is only because he is incorruptible.

We are living in a time of universal corruption in government and in private commercial life. Indeed, as the two grow ever more corrupt, they appear ever more inseparable. Obama and the “serious” GOP candidates this time around don’t even seem all that interested in engaging with that teeming mass of unwashed known as their constituents. They know the jig is up. They know that American politics has at long last declared independence from the stultifying, deceptive analytical paradigm peddled incessantly by the Wolf Blitzers and David Gergens of society. These official gatekeepers would have us believe that Barack Hoo-sane Obama is the best the working class could ever hope for and that Ron Paul is the worst it has to fear. History has not yet come back from the dead for these reasonable, pragmatic adults in the room. They are clinging desperately to Fukuyama’s opium dream of a world where each of the billions of exploited wretches on the planet wants to be like Michael Jordan or Bono or Bill Clinton eating a Big Mac while getting his dick sucked. If Mitt Romney can be said to have any base at all, it is these Bourbons of the Beltway who have recently stepped down from their lofty political perches in order to smear Mr. Paul as a “racist” or worse.

Because mainstream debate has never taken seriously even the remote possibility of a Ron Paul presidency, nobody it seems has given any real thought to how a Ron Paul administration might actually govern. American history is filled with presidents who built their political careers advocating one thing only to do a complete 180 when they got to the White House. Jefferson started out as a fierce opponent of American territorial expansion but his greatest legacy as president was the Louisiana Purchase. Lincoln opposed the further expansion of slavery as a candidate in 1860 but went out of his way to disavow abolitionism during the campaign. Wilson kept us out of World War I until he didn’t. Reagan told us government is the problem and then presided over the most astronomical deficit expansion to date at the time. Obama . . . nuff said.

But no candidate for president other than Ron Paul has ever been so committed to an idea as to be seemingly indifferent to who his base is. Like some silver-tongued Roman orator, Paul speaks of a republic lost and an empire in decay and promises to return us to our former Ciceronian virtue by demolishing both the “warfare state” that the left so despises and the “welfare state” that the right professionally loves to hate. In doing so, he has made the strangest of bedfellows out of a remarkably diverse coalition of white boys, from young college kids, to rural armed survivalists. To publicly support Ron Paul is to be personally at least tolerated by all of the politicized sections of the 99 percent, from the Tea Party to the Occupations and everywhere in between. Put this guy in the oval office, and there’s no telling, it seems, what he would try to get away with, much less accomplish.

America (more specifically, the United States thereof) has for most of its young history been exceptional in following ways: it is a country that began just as the industrial revolution was accelerating in Europe and the capitalist system was consolidating itself as the dominant mode of production around the globe, but its vast, “uninhabited” lands enabled its people to postpone the social reckoning that the contradictions of that system caused in Europe for over a century. For nearly a century after the closing of the frontier, the United States further postponed this reckoning by being the economic beneficiary of two world wars that obliterated the productive capacity of the rest of the industrialized world while leaving American capital untouched. When the rest of the world finally caught up economically beginning on the 1970s, and American wages began to stagnate (they still are!), the U.S. ruling class postponed the reckoning even further by extending easy credit to working class households so that the same extraordinary consumption patterns could continue. A little over three years ago, the party ended, and the reckoning is right now upon us.

When people say that “socialism never took hold” in the U.S. because of some essential cultural attribute of its people, or that Americans are distinguished by their tendency to value “pragmatism” over “ideology,” they obscure–whether inadvertently or willfully–the exceptional material circumstances that have historically allowed Americans to put off the inevitable confrontation between labor and capital. This kicking of the can down the road has occurred with little interruption for so long that we have fallen accustomed to believing that we really are different, that we really are immune from the laws of history that govern other countries, that we can work it out, just like John Lennon promised.

Ron Paul’s capital crime as a candidate, for which the media will now lynch him, is not his advocacy of a radical “left wing” foreign policy platform or a radical “right wing” approach to domestic spending. It is the more general ideological narrative he is promoting on the campaign trail, a narrative that portrays the actually-existing United States as just another imperialist welfare-warfare state instead of the liberal-democratic “city on a hill” that the 1-percentrists on CNN have told us it is all throughout our lives. By forcing us to critically confront the actual words and thoughts of the same founding fathers that our rulers so incessantly fetishize, and by forcing us to compare those ideals to the endless wars, mounting police state, and exploding social crisis this country now suffers from, Paul invites ordinary Americans to fantasize that we can continue to be exceptional, that we can continue to prosper without resorting to class struggle like they do in other countries–at the expense of their “liberty.” That we need not concern ourselves with what socialism is really all about.

The problem is that the material circumstances that have made America so exceptional for over two centuries have now been exhausted, and like fossil fuels, they can never be replaced. A Ron Paul presidency (or even merely an Obama-Paul general election) would force this realization into the forefront of the American political debate because the litany of government evils Paul has spent his career railing against are, as a material historical fact, absolutely vital to the survival of the very capitalist system Paul has spent his career defending.

Ron Paul’s platform, taken as a whole, does not, indeed cannot, consistently represent any one person or constituency’s interests. At best, it represents our aspirations as a people. But these aspirations are informed not by our future but by our past, and as such, they can never be realized in our present. The sooner these anachronistic aspirations are put to the test and exposed for the fantasies they are, the sooner the more culturally conservative layers of the American 99 percent will get serious about the historical duty they share with the rest of us in the coming global confrontation with capital.