Why it’s a disastrous mistake for Democrats to call Trump voters “stupid”

Don Pelton
September 1, 2017

Kansas native, lover of populism (the good kind, the FDR kind), historian Thomas Frank gives the most brilliant analysis I’ve heard yet of the failure of the Democratic Party and the resurgence of right-wing populism (the bad kind!) all around the world.

He says that the answer to the right-wing populism that has plagued us for decades is to “give them the real thing.” He talks about why calling Trump voters “stupid” is a disastrous mistake for Democrats.

He calls Trump “a man whose main appeal is as a human middle finger raised to the complacent, responsible, status quo world.”

This talk, called “Why Democrats Lose,”  was given in Seattle in April of 2017 as an introduction to his most recent book, “Listen Liberal.” His book and his talk focus, as the title implies, on what’s wrong with the Democratic Party, and how it could return to its traditional role of representing the middle class.

Interestingly, Frank mentions that his message is not welcomed today by the current leadership of the Democratic Party, which is still obsessed with Russian dirty tricks as an excuse for losing the election. (Frank used to appear regularly on MSNBC, for instance, but is no longer invited).

His is precisely the message that Democrats should be hearing and heeding today.

Upbeat and entertaining and well worth an hour of your time.

 

Old West theme parks paint a false picture of pioneer California

Reprinted from the August 30, 2017 edition of The Conversation

Editor’s Note: The nostalgia for California’s past is still very much an influence throughout much of the state, and is especially conspicuous in the Gold Country, where many old-timers long to re-open old polluting gold mines, such as the Idaho-Maryland mine here in Grass Valley.

By Amanda Tewes

Old West, as seen through 1967 Orange County eyes. Orange County Archives, CC BY

In 1940, just a year before Pearl Harbor plunged the United States into a world war, Walter and Cordelia Knott began construction on a notable addition to their thriving berry patch and chicken restaurant in the Orange County, California, city of Buena Park. This new venture was an Old West town celebrating both westward expansion and the California Dream – the notion that this Gold Rush state was a land of easy fortune for all. The Knotts’ romanticized Ghost Town – including a saloon, blacksmith’s shop, jail and “Boot Hill” cemetery – became the cornerstone of the amusement park that is today Knott’s Berry Farm.

While Ghost Town is arguably the first of its kind, since 1940 Old West theme parks have proliferated around the United States and the world. They’re more than just destinations for pleasure seekers. Like Hollywood Westerns and dime novels, these theme parks propagate a particular myth of “the West.”

The relationship between history and entertainment is especially complex when these theme parks exist in California – a place that actually experienced “the Wild West.” Visitors can have a hard time differentiating between fantasy landscapes and local history.

In studying California’s Old West theme parks and their version of the state’s past, I’ve conducted oral histories, visited these sites and observed continued nostalgia for these places. What do these imagined spaces reveal about cultural conflicts of politics and regional identity in midcentury California? How do they demonstrate the attraction of a fantasy past that has captivated Californians?

Knott’s original berry stand, Buena Park, California, circa 1926. Orange County ArchivesCC BY

Chicken with a side of ‘pioneer spirit’

The addition of a Ghost Town may seem an odd choice for the Knotts, who were farmers and restaurateurs. But it was a calculated move to entertain guests waiting upwards of three hours in line for their chicken dinner – as well as to tell a particular story about the California Dream.

Walter Knott grew up listening to his grandmother’s tales about traveling across the Mojave Desert to California in a covered wagon, with her young daughter (Walter’s mother) in tow. Knott admired his grandmother’s “pioneering spirit,” which influenced his own decisions to homestead (unsuccessfully) in the desert. For Knott, his grandmother’s account sparked ongoing admiration for independence and adventure, qualities that embody the myth of the West but not necessarily the realities of California’s past.

And it was this personal connection to California’s past that colored Knott’s critique of his present. Looking back over the devastation the Great Depression wrought on California, the farmer – a lifelong proponent of free enterprise – concluded federal interference had prolonged the situation by offering aid and social welfare programs, instead of encouraging struggling residents to work harder.

In the 1930s, Orange County was starting to transition from a land of orange groves and strawberry fields.Orange County Archives, CC BY

This assessment ignores the fact that an agricultural hub like Orange County gained much from New Deal programs. The Agricultural Adjustment Act, for instance, offered farmers price support for their crops, which Orange County growers accepted.

But Knott remained steadfast. In an oral history from 1963, he explained,

“We felt that if [Ghost Town visitors] looked back, they would see the little that the pioneer people had to work with and all the struggles and problems that they had to overcome and that they’d all done it without any government aid.”

This virulent independence shaped Ghost Town and ensured that Knott’s Berry Farm’s memorial to California history was a political statement as much as a place of leisure.

Beyond its political message about the past, Walter Knott wanted Ghost Town “to be an educational feature as well as a place of entertainment.” Indeed, the first edition of the theme park’s printed paper Ghost Town News in October 1941 explained, “…we hope it will prove of real tangible educational advantage and a lasting monument to California.” By 1963, Knott asserted,

“I suppose there’s hundreds of thousands of kids today that know what you mean when you say, ‘pan gold.’ I mean, when they read it in a book they understand it because they’ve gone down and actually done it [at Ghost Town].”

Indeed, the message reached generations of visitors.

Perpetuating the myth of rugged individualism

But Knott learned – and taught – the wrong lesson from the past. Certainly 19th-century Anglo pioneers faced financial, physical and psychological challenges in reaching California. But these individuals did actually benefit from the “government aid” Knott scorned.

Federal funds and policies supported land grants in the West, a military to expand territory and fight indigenous peoples and even the development of the railroad that eventually connected California to the rest of the country. Government intervention helped support these Anglo pioneers as much as it did their Depression-era descendants.

What’s left out of this picture? Orange County Archives, CC BY

Despite the fantasy past it represented, the premise of Ghost Town inspired local appreciation. Visitors to Knott’s Berry Farm saw evidence of California’s financial greatness when they panned for gold. Stories about the trials Walter Knott’s own relatives faced crossing the Mojave Desert reinforced the fortitude of those who settled in the Golden State. Indeed, by midcentury many Orange County residents had themselves moved west to California and could well identify with the theme of 19th-century migration.

Ghost Town played on mid-20th-century nostalgia for simpler and more adventurous times in California, especially as the area began to rapidly shed its agricultural past in the years following World War II. The Knotts’ nod to California’s 19th-century history was a welcome distraction from the modernization efforts in Orange County’s backyard.

Richard Nixon pans for gold with Walter Knott in 1959. Orange County Archives, CC BY

The romantic and often whitewashed version of California’s past embodied by Ghost Town played an ongoing role in shaping midcentury cultural and political identity in the region. The Knotts used the living they earned from Ghost Town and their other attractions to support conservative causes locally and nationally. In 1960, Ghost Town and the Old California it represented was the literal backdrop of a Richard Nixon rally during his first presidential run.

Later, fellow conservative and the Knotts’ personal friend Ronald Reagan produced a segment about their attraction on his political radio show. On the July 15, 1978 episode, Reagan said, “Walter Knott’s farm is a classic American success story…And, it still reflects its founder’s deep love and patriotism for his country.” Reagan celebrated the theme park as the pinnacle of free enterprise and the California Dream.

Among California’s Old West theme parks, Ghost Town at Knott’s Berry Farm is not unique in tweaking the state’s 19th-century past to more closely align with a Hollywood Western than the complex racial, cultural and political reality. Today Ghost Town serves millions of domestic and foreign visitors annually and continues to sell a fantasy version of the Golden State’s history. But this fantasy memorializes mid-20th-century conservative values rather than 19th-century California.

With renewed debates about public memory and monuments, it’s more important than ever to examine sites like historical theme parks as places where individuals learn (false) history. These romantic and politicized versions of the Old West can leave visitors longing for a past that never was.


Disclosure statement

Amanda Tewes does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.

Centrist Democrats Riled as Warren Says Days of ‘Lukewarm’ Policies Are Over

“The Democratic Party isn’t going back to the days of welfare reform and the crime bill.”

Sen. Elizabeth Warren (D-Mass.) addresses a rally against Trump Administration budget cuts to education funding outside the U.S. Capitol July 19, 2017 in Washington, D.C.

Sen. Elizabeth Warren (D-Mass.) addresses a rally against Trump administration budget cuts to education funding outside the U.S. Capitol July 19, 2017 in Washington, D.C. (Photo: Chip Somodevilla/Getty Images)

In a wide-ranging and fiery keynote speech last weekend at the 12th annual Netroots Nation conference in Atlanta, Georgia, Sen. Elizabeth Warren (D-Mass.) relentlessly derided moderate Democratic pundits calling for the party to move “back to the center” and declared that Democrats must unequivocally “fight for progressive solutions to our nation’s challenges.”

“We’re not going back to the days when universal healthcare was something Democrats talked about on the campaign trail but were too chicken to fight for after they got elected.”
—Sen. Elizabeth Warren

As The Hill‘s Amie Parnes reported on Friday, Warren’s assertion during the weekend gathering that progressives are “the heart and soul of today’s Democratic Party”—and not merely a “wing”—raised the ire of so-called “moderate” Democrats, who have insisted that progressive policies won’t sell in swing states.

But recent survey results have consistently shown that policies like single-payer healthcare, progressive taxation, a higher minimum wage, and tuition-free public college are extremely popularamong the broader electorate. Sen. Bernie Sanders (I-Vt.)—the most prominent advocate of an ambitious, far-reaching progressive agenda—has consistently polled as the most popular politician in the country.

For Warren, these are all indicators that those pining for a rightward shift “back to the center” are deeply mistaken.

Specifically, Warren took aim at a recent New York Times op-ed by Democratic commentators Mark Penn and Andrew Stein, who argued that Democrats must moderate their positions in order to take back Congress and, ultimately, the presidency.

Warren ridiculed this argument as a call for a return to Bill Clinton-era policies that “lock[ed] up non-violent drug offenders and ripp[ed] more holes in our economic safety net.”

A free and independent press is essential to the health of a functioning democracy

“The Democratic Party isn’t going back to the days of welfare reform and the crime bill,” Warren said. “We’re not going back to the days of being lukewarm on choice. We’re not going back to the days when universal healthcare was something Democrats talked about on the campaign trail but were too chicken to fight for after they got elected.”

“And,” Warren concluded, “we’re not going back to the days when a Democrat who wanted to run for a seat in Washington first had to grovel on Wall Street.”

For months media outlets have speculated that Warren is gearing up for a 2020 presidential run, but she has denied the rumors.

Warren’s remarks came as a large coalition of progressive groups is mobilizing during the congressional recess to pressure Democrats to formally endorse the “People’s Platform,” a slate of ambitious legislation that includes Rep. John Conyers’ (D-Mich.) Medicare for All bill.

Watch Warren’s full speech at Netroots Nation:

Are We Doomed? Let’s Have a Talk

We’re not all ready to have the same conversation, but perhaps that’s a good place to start

      Reprinted from CommonDreams under a Creative Commons Attribution-Share Alike 3.0 License

 

A placard warning against the dangers of climate change used in the March on Washington stands by an overflowing garbage can on Saturday, January 21, 2017. (Photo by Epics/Getty Images)

 

My most recent essay, in which I discussed a highly publicized controversy over the efficacy of plans for a comprehensive transition to an all-renewable energy future, garnered some strong responses. “If you are right,” one Facebook commenter opined, “we are doomed. Fortunately you are not right.” (The commenter didn’t explain why.) What had I said to provoke an expectation of cataclysmic oblivion? Simply that there is probably no technically and financially feasible energy pathway to enable those of us in highly industrialized countries to maintain current levels of energy usage very far into the future.

My piece happened to be published right around the same time New York Magazine released a controversial article, titled “The Uninhabitable Earth,” in which author David Wallace Wells portrayed a dire future if the most pessimistic climate change models turn to reality. “It is, I promise, worse than you think,” wrote Wells. “If your anxiety about global warming is dominated by fears of sea-level rise, you are barely scratching the surface of what terrors are possible, even within the lifetime of a teenager today.” Wells’s article drew rebukes from—of all people—climate scientists, who pointed out a few factual errors, but also insisted that scaring the public just doesn’t help. “Importantly, fear does not motivate,” responded Michael Mann with Susan Joy Hassol and Tom Toles, “and appealing to it is often counter-productive as it tends to distance people from the problem, leading them to disengage, doubt and even dismiss it.”

“We humans have overshot Earth’s long-term carrying capacity for our species…”It’s true: apocalyptic warnings don’t move most people. Or, rather, they move most people away from the source of discomfort, so they simply tune out. But it’s also true that people feel a sense of deep, unacknowledged unease when they are fed “solutions” that they instinctively know are false or insufficient.

Others came to Wells’s defense. Margaret Klein Salamon, a clinical psychologist and founder of the climate action group The Climate Mobilization, which advocates for starting a “World War II-scale” emergency mobilization to convert from fossil fuels, writes, “it is OK, indeed imperative, to tell the whole, frightening story. . . . [I]t’s the job of those of us trying to protect humanity and restore a safe climate to tell the truth about the climate crisis and help people process and channel their own feelings—not to preemptively try to manage and constrain those feelings.”

So: Are we doomed if we can’t maintain current and growing energy levels? And are we doomed anyway due to now-inevitable impacts of climate change?

First, the good news. With regard to energy, we should keep in mind the fact that today’s Americans use roughly twice as much per capita as their great-grandparents did in 1925. While people in that era enjoyed less mobility and fewer options for entertainment and communication than we do today, they nevertheless managed to survive and even thrive. And we now have the ability to provide many services (such as lighting) far more efficiently, so it should be possible to reduce per-capita energy usage dramatically while still maintaining a lifestyle that would be considered more than satisfactory by members of previous generations and by people in many parts of the world today. And reducing energy usage would make a whole raft of problems—climate change, resource depletion, the challenge of transitioning to renewable energy sources—much easier to solve.

The main good news with regard to climate change that I can point to (as I did in  this essay posted in June) is that economically recoverable fossil fuel reserves are consistent only with lower-emissions climate change scenarios. As BP and other credible sources for coal, oil, and natural gas reserves figures show, and as more and more researchers are pointing out, the worst-case climate scenarios associated with “business as usual” levels of carbon emissions are in fact unrealistic.

Now, the bad news. While we could live perfectly well with less energy, that’s not what the managers of our economy want. They want growth. Our entire economy is structured to require constant, compounded growth of GDP, and for all practical purposes raising the GDP means using more energy. While fringe economists and environmentalists have for years been proposing ways to back away from our growth addiction (for example, by using alternative economic indices such as Gross National Happiness), none of these proposals has been put into widespread effect. As things now stand, if growth falters the economy crashes.

There’s bad climate news as well: even with current levels of atmospheric greenhouse gases, we’re seeing unacceptable and worsening impacts—raging fires, soaring heat levels, and melting icecaps. And there are hints that self-reinforcing feedbacks maybe kicking in: an example is the release of large amounts of methane from thawing tundra and oceanic hydrates, which could lead to a short-term but steep spike in warming.  Also, no one is sure if current metrics of climate sensitivity (used to estimate the response of the global climate system to a given level of forcing) are accurate, or whether the climate is actually more sensitive than we have assumed. There’s some worrisome evidence the latter is case.

But let’s step back a bit. If we’re interested in signs of impending global crisis, there’s no need to stop with just these two global challenges. The world is losing 25 billion tons of topsoil a year due to current industrial agricultural practices; if we don’t deal with that issue, civilization still crash even if we do manage to ace our energy and climate test. Humanity is also over-using fresh water: ancient aquifers are depleting, while other water sources are being polluted. If we don’t deal with our water crisis, we still crash. Species are going extinct at a thousand times the pre-industrial rate; if we don’t deal with the biodiversity dilemma, we still crash. Then there are social and economic problems that could cause nations to crumble even if we manage to protect the environment; this threat category includes the menaces of over-reliance on debt and increasing economic inequality.

If we attack each of these problems piecemeal with technological fixes (for example, with desalination technology to solve the water crisis or geo-engineering to stabilize the climate) we may still crash because our techno-fixes are likely to have unintended consequences, as all technological interventions do. Anyway, the likelihood of successfully identifying and deploying all the needed fixes in time is vanishingly small.

Many problems are converging at once because society is a complex system, and the challenges we have been discussing are aspects of a systemic crisis. A useful way to frame an integrated understanding of the 21st century survival challenge is this: we humans have overshot Earth’s long-term carrying capacity for our species. We’ve been able to do this due to a temporary subsidy of cheap, bountiful energy from fossil fuels, which enabled us to stretch nature’s limits and to support a far larger overall population than would otherwise be possible. But now we are starting to see supply constraints for those fuels, just as the side effects of burning enormous amounts of coal, oil, and natural gas are also coming into view. Meanwhile, using cheap energy to expand resource-extractive and waste-generating economic processes is leading to biodiversity loss; the depletion of soil, water, and minerals; and environmental pollution of many kinds. Just decarbonizing energy, while necessary, doesn’t adequately deal with systemic overshoot. Only a reduction of population and overall resource consumption, along with a rapid reduction in our reliance on fossil fuels and a redesign of industrial systems, can do that.

Economic inequality is a systemic problem too. As we’ve grown our economy, those who were in position to invest in industrial expansion or to loan money to others have reaped the majority of the rewards, while those who got by through selling their time and labor (or whose common cultural heritage was simply appropriated by industrialists) have fallen behind. There’s no technological fix for inequality; dealing with it will require redesigning our economic system and redistributing wealth. Those in wealthy nations would, on average, have to adjust their living standards downward.

Now, can we do all of this without a crash? Probably not. Indeed, many economists would regard the medicine (population reduction, a decline in per-capita energy use, and economic redistribution) as worse than whatever aspects of the disease they are willing to acknowledge. Environmentalists and human rights advocates would disagree. Which is to say, there’s really no way out. Whether we stick with business as usual, or attempt a dramatic multi-pronged intervention, our current “normal” way of life is toast.

Accepting that a crash is more or less inevitable is a big step, psychologically speaking. I call this toxic knowledge: one cannot “un-know” that the current world system hangs by a thread, and this understanding can lead to depression. In some ways, the systemic crisis we face is analogous to the individual existential crisis of life and death, which we each have to confront eventually. Some willfully ignore their own mortality for as long as possible; others grasp at a belief in the afterlife. Still others seek to create meaning and purpose by making a positive difference in the lives of those around them with whatever time they have. Such efforts don’t alter the inevitability of death; however, contributing to one’s community appears to enhance well-being in many ways beyond that of merely prolonging life.

In some ways, the systemic crisis we face is analogous to the individual existential crisis of life and death, which we each have to confront eventually.

But is a crash the same as doom?

Not necessarily. Our best hope at this point would seem to be a controlled crash that enables partial recovery at a lower level of population and resource use, and that therefore doesn’t lead to complete and utter oblivion (human extinction or close to it). Among those who understand the systemic nature of our problems, the controlled crash option is the subject of what may be the most interesting and important conversation that’s taking place on the planet just now. But only informed people who have gotten over denial and self-delusion are part of it.

This discussion started in the 1970s, though I wasn’t part of it then; I joined a couple of decades later. There is no formal membership; the conversation takes place through and among a patchwork of small organizations and scattered individuals. They don’t all know each other and there is no secret handshake. Some have publicly adopted the stance that a global crash is inevitable; most soft-pedal that message on their organizational websites but are privately plenty worried. During the course of the conversation so far, two (not mutually exclusive) strategies have emerged.

The first strategy envisions convincing the managers and power holders of the world to invest in a no-regrets insurance plan. Some systems thinkers who understand our linked global crises are offering to come up with a back-pocket checklist for policy makers, for moments when financial or environmental crisis hits: how, under such circumstances, might the managerial elite be able to prevent, say, a stock market crash from triggering food, energy, and social crises as well? A set of back-up plans wouldn’t require detailed knowledge of when or how crisis will erupt. It wouldn’t even require much of a systemic understanding of global overshoot. It would simply require willingness on the part of societal power holders to agree that there are real or potential threats to global order, and to accept the offer of help. At the moment, those pursuing this strategy are working mostly covertly, for reasons that are not hard to discern.

The second strategy consists of working within communities to build more societal resilience from the ground up. It is easier to get traction with friends and neighbors than with global power holders, and it’s within communities that political decisions are made closest to where the impact is felt. My own organization, Post Carbon Institute, has chosen to pursue this strategy via a series of books, the Community Resilience Guides;  the “Think Resilience” video series; and our forthcoming compendium, The Community Resilience Reader.  Rob Hopkins, who originated the Transition Towns movement, has been perhaps the most public, eloquent, and upbeat proponent of the local resilience strategy, but there are countless others scattered across the globe.

Somehow, the work of resilience building (whether top-down or bottom-up) must focus not just on maintaining supplies of food, water, energy, and other basic necessities, but also on sustaining social cohesion—a culture of understanding, tolerance, and inquiry—during times of great stress. While it’s true that people tend to pull together in remarkable ways during wars and natural disasters, sustained hard times can lead to scapegoating and worse.

Most people are not party to the conversation, not aware that it is happening, and unaware even that such a conversation is warranted. Among those who are worried about the state of the world, most are content to pursue or support efforts to keep crises from occurring by working via political parties, religious organizations, or non-profit advocacy orgs on issues such as climate change, food security, and economic inequality. There is also a small but rapidly growing segment of society that feels disempowered as the era of economic growth wanes, and that views society’s power holders as evil and corrupt. These dispossessed—whether followers of ISIS or Infowars—would prefer to “shake things up,” even to the point of bringing society to destruction, rather than suffer the continuation of the status quo. Unfortunately, this last group may have the easiest path of all.

By comparison, the number of those involved in the conversation is exceedingly small, countable probably in the hundreds of thousands, certainly not millions. Can we succeed? It depends on how one defines “success”—as the ability to maintain, for a little longer, an inherently unsustainable global industrial system? Or as the practical reduction in likely suffering on the part of the survivors of the eventual crash? A related query one often hears after environmental lectures is, Are we doing enough? If “Enough” means “enough to avert a system crash,” then the answer is no: it’s unlikely that anyone can deliver that outcome now. The question should be, What can we do—not to save a way of life that is unsalvageable, but to make a difference to the people and other species in harm’s way?

This is not a conversation about the long-term trajectory of human cultural evolution, though that’s an interesting subject for speculation. Assuming there are survivors, what will human society look like following the crises ensuing from climate change and the end of fossil fuels and capitalism? David Fleming’s book, Surviving the Future, and John Michael Greer’s, The Ecotechnic Future, both  offer useful thoughts in this regard. My own view is that it’s hard for us to envision what comes next because our imaginations are bounded by the reality we have known. What awaits will likely be as far removed from from modern industrial urban life as Iron-Age agrarian empires were from hunting-and-gathering bands. We are approaching one of history’s great discontinuities. The best we can do under the circumstances is to get our priorities and values straight (protect the vulnerable, preserve the best of what we have collectively achieved, and live a life that’s worthy) and put one foot in front of the other.

The conversation I’m pointing to here is about fairly short-term actions. And it doesn’t lend itself to building a big movement. For that, you need villains to blame and promises of revived national or tribal glory. For those engaged in the conversation, there’s only hard work and the satisfaction of honestly facing our predicament with an attitude of curiosity, engagement, and compassion. For us, threats of doom or promises of utopia are distractions or cop-outs.

Only those drawn to the conversation by temperament and education are likely to take it up. Advertising may not work. But having a few more hands on deck, and a few more resources to work with, can only help.

“Being rich wrecks your soul. We used to know that”

“With a billionaire real estate tycoon occupying America’s highest office, the effects of riches upon the soul are a reasonable concern for all of us little guys. After all, one incredibly wealthy soul currently holds our country in his hands. According to an apocryphal exchange between F. Scott Fitzgerald and Ernest Hemingway, the only difference between the rich and the rest of us is that they have more money. But is that the only difference?

“We didn’t used to think so. We used to think that having vast sums of money was bad and in particular bad for you — that it harmed your character, warping your behavior and corrupting your soul. We thought the rich were different, and different for the worse.

“Today, however, we seem less confident of this. We seem to view wealth as simply good or neutral, and chalk up the failures of individual wealthy people to their own personal flaws, not their riches. Those who are rich, we seem to think, are not in any more moral danger than the rest of us. Compare how old movies preached the folk wisdom of wealth’s morally calamitous effects to how contemporary movies portray wealth: For example, the villainous Mr. Potter from “It’s A Wonderful Life” to the heroic Tony Stark (that is, Iron Man) in the Avengers films.”

Read the full article by  Charles Mathewes and Evan Sandsmark in the Washington Post here.

About the authors:

“Charles Mathewes is the Carolyn M. Barbour Professor of Religious Studies at the University of Virginia, where he teaches courses on religion, politics, and ethics.”

“Evan Sandsmark is a PhD student in Religious Studies at the University of Virginia.”

 

Will Democrats in Congress Go Bolder or Backwards?

The new Democratic Party ‘Better Deal’ agenda features a job-training proposal that demands less from CEOs than the training proposal Bill Clinton ran on a quarter-century ago.

 
By Sam Pizzigati

Originally published in Inequality.org
Reprinted under a Creative Commons License 3.0

The Democratic Party’s congressional leadership has just unveiled a new slogan — and set of policy proposals — to help the party prep for the 2018 midterm elections ­­­


 

America Last: Will Trump Set a Record for the History Books?

By Tom Engelhardt
Reprinted from TomDispatch.com

In its own inside-out, upside-down way, it’s almost wondrous to behold. As befits our president’s wildest dreams, it may even prove to be a record for the ages, one for the history books. He was, after all, the candidate who sensed it first.  When those he was running against, like the rest of Washington’s politicians, were still insisting that the United States remained at the top of its game, not an — but the — “indispensable nation,” the only truly “exceptional” one on the face of the Earth, he said nothing of the sort.  He campaigned on America’s decline, on this country’s increasing lack of exceptionality, its potential dispensability.  He ran on the single word “again” — as in “make America great again” — because (the implication was) it just isn’t anymore.  And he swore that he and he alone was the best shot Americans, or at least non-immigrant white Americans, had at ever seeing the best of days again.

In that sense, he was our first declinist candidate for president and if that didn’t tell you something during the election season, it should have. No question about it, he hit a chord, rang a bell, because out in the heartland it was possible to sense a deepening reality that wasn’t evident in Washington.  The wealthiest country on the planet, the most militarily powerful in the history of… well, anybody, anywhere, anytime (or so we were repeatedly told)… couldn’t win a war, not even with the investment of trillions of taxpayer dollars, couldn’t do anything but spread chaos by force of arms.

Meanwhile, at home, despite all that wealth, despite billionaires galore, including the one running for president, despite the transnational corporate heaven inhabited by Google and Facebook and Apple and the rest of the crew, parts of this country and its infrastructure were starting to feel distinctly (to use a word from another universe) Third Worldish.  He sensed that, too.  He regularly said things like this: “We spent six trillion dollars in the Middle East, we got nothing… And we have an obsolete plane system. We have obsolete airports. We have obsolete trains. We have bad roads. Airports.”  And this: “Our airports are like from a third-world country.”  And on the nation’s crumbling infrastructure, he couldn’t have been more on the mark.

In parts of the U.S., white working-class and middle-class Americans could sense that the future was no longer theirs, that their children would not have a shot at what they had had, that they themselves increasingly didn’t have a shot at what they had had.  The American Dream seemed to be gaining an almost nightmarish sheen, given that the real value of the average wage of a worker hadn’t increased since the 1970s; that the cost of a college education had gone through the roof and the educational debt burden for children with dreams of getting ahead was now staggering; that unions were cratering; that income inequality was at a historic high; and… well, you know the story, really you do.  In essence, for them the famed American Dream seemed ever more like someone else’s trademarked property.

Indispensable? Exceptional? This country? Not anymore. Not as they were experiencing it.

And because of that, Donald Trump won the lottery.  He answered the $64,000 question.  (If you’re not of a certain age, Google it, but believe me it’s a reference in our president’s memory book.)  He entered the Oval Office with almost 50% of the vote and a fervent base of support for his promised program of doing it all over again, 1950s-style.

It had been one hell of a pitch from the businessman billionaire.  He had promised a future of stratospheric terrificness, of greatness on an historic scale. He promised to keep the evil ones — the rapists, job thieves, and terrorists — away, to wall them out or toss them out or ban them from ever traveling here.  He also promised to set incredible records, as only a mega-businessman like him could conceivably do, the sort of all-American records this country hadn’t seen in a long, long time.

And early as it is in the Trump era, it seems as if, on one score at least, he could deliver something for the record books going back to the times when those recording the acts of rulers were still scratching them out in clay or wax. At this point, there’s at least a chance that Donald Trump might preside over the most precipitous decline of a truly dominant power in history, one only recently considered at the height of its glory.  It could prove to be a fall for the ages.  Admittedly, that other superpower of the Cold War era, the Soviet Union, imploded in 1991, which was about the fastest way imaginable to leave the global stage.  Still, despite the “evil empire” talk of that era, the USSR was always the secondary, the weaker of the two superpowers.  It was never Rome, or Spain, or Great Britain.

When it comes to the United States, we’re talking about a country that not so long ago saw itself as the only great power left on planet Earth, “the lone superpower.”  It was the one still standing, triumphant, at the end of a history of great power rivalry that went back to a time when the wooden warships of various European states first broke out into a larger world and began to conquer it.  It stood by itself at, as its proponents liked to claim at the time, the end of history.

Applying Hard Power to a Failing World

As we watch, it seems almost possible to see President Trump, in real time, tweet by tweet, speech by speech, sword dance by sword dance, intervention by intervention, act by act, in the process of dismantling the system of global power — of “soft power,” in particular, and of alliances of every sort — by which the U.S. made its will felt, made itself a truly global hegemon.  Whether his “America first” policies are aimed at creating a future order of autocrats, or petro-states, or are nothing more than the expression of his libidinous urges and secret hatreds, he may already be succeeding in taking down that world order in record fashion.

Despite the mainstream pieties of the moment about the nature of the system Donald Trump appears to be dismantling in Europe and elsewhere, it was anything but either terribly “liberal” or particularly peaceable.  Wars, invasions, occupations, the undermining or overthrow of governments, brutal acts and conflicts of every sort succeeded one another in the years of American glory.  Past administrations in Washington had a notorious weakness for autocrats, just as Donald Trump does today.  They regularly had less than no respect for democracy if, from Iran to Guatemala to Chile, the will of the people seemed to stand in Washington’s way.  (It is, as Vladimir Putin has been only too happy to point out of late, an irony of our moment that the country that has undermined or overthrown or meddled in more electoral systems than any other is in a total snit over the possibility that one of its own elections was meddled with.)  To enforce their global system, Americans never shied away from torture, black sites, death squads, assassinations, and other grim practices.  In those years, the U.S. planted its military on close to 1,000 overseas military bases, garrisoning the planet as no other country ever had.

Nonetheless, the cancelling of the Trans Pacific Partnership trade deal, the withdrawal from the Paris climate accord, threats against NAFTA, the undermining of NATO, the promise of protective tariffs on foreign goods (and the possible trade wars that might go with them) could go a long way toward dismantling the American global system of soft power and economic dominance as it has existed in these last decades.  If such acts and others like them prove effective in the months and years to come, they will leave only one kind of power in the American global quiver: hard military power, and its handmaiden, the kind of covert power Washington, through the CIA in particular, has long specialized in. If America’s alliances crack open and its soft power becomes too angry or edgy to pass for dominant power anymore, its massive machinery of destruction will still be left, including its vast nuclear arsenal.  While, in the Trump era, a drive to cut domestic spending of every sort is evident, more money is still slated to go to the military, already funded at levels not reached by combinations of other major powers.

Given the last 15 years of history, it’s not hard to imagine what’s likely to result from the further elevation of military power: disaster.  This is especially true because Donald Trump has appointed to key positions in his administration a crew of generals who spent the last decade and a half fighting America’s catastrophic wars across the Greater Middle East.  They are not only notoriously incapable of thinking outside the box about the application of military power, but faced with the crisis of failed wars and failing states, of spreading terror movements and a growing refugee crisis across that crucial region, they can evidently only imagine one solution to just about any problem: more of the same.  More troops, more mini-surges, more military trainers and advisers, more air strikes, more drone strikesmore.

After a decade and a half of such thinking we already know perfectly well where this ends — in further failure, more chaos and suffering, but above all in an inability of the U.S. to effectively apply its hard power anywhere in any way that doesn’t make matters worse.  Since, in addition, the Trump administration is filled with Iranophobes, including a president who has only recently fused himself to the Saudi royal family in an attempt to further isolate and undermine Iran, the possibility that a military-first version of American foreign policy will spread further is only growing.

Such “more” thinking is typical as well of much of the rest of the cast of characters now in key positions in the Trump administration. Take the CIA, for instance.  Under its new director, Mike Pompeo (distinctly a “more” kind of guy and an Iranophobe of the first order), two key positions have reportedly been filled: a new chief of counterterrorism and a new head of Iran operations (recently identified as Michael D’Andrea, an Agency hardliner with the nickname “the Dark Prince”).  Here’s how Matthew Rosenberg and Adam Goldman of the New York Times recently described their similar approaches to their jobs (my emphasis added):

“Mr. D’Andrea’s new role is one of a number of moves inside the spy agency that signal a more muscular approach to covert operations under the leadership of Mike Pompeo, the conservative Republican and former congressman, the officials said. The agency also recently named a new chief of counterterrorism, who has begun pushing for greater latitude to strike militants.”

In other words, more!

Rest assured of one thing, whatever Donald Trump accomplishes in the way of dismantling America’s version of soft power, “his” generals and intelligence operatives will handle the hard-power part of the equation just as “ably.”

The First American Laster?

If a Trump presidency achieves a record for the ages when it comes to the precipitous decline of the American global system, little as The Donald ever cares to share credit for anything, he will undoubtedly have to share it for such an achievement.  It’s true that kings, emperors, and autocrats, the top dogs of any moment, prefer to take all the credit for the “records” set in their time.  When we look back, however, it’s likely that President Trump will be seen as having given a tottering system that necessary push.  It will undoubtedly be clear enough by then that the U.S., seemingly at the height of any power’s power in 1991 when the Soviet Union disappeared, began heading for the exits soon thereafter, still enwreathed in self-congratulation and triumphalism.

Had this not been so, Donald Trump would never have won the 2016 election.  It wasn’t he, after all, who gave the U.S. heartland an increasingly Third World feel.  It wasn’t he who spent those trillions of dollars so disastrously on invasions and occupations, dead-end wars, drone strikes and special ops raids, reconstruction and deconstruction in a never-ending war on terror that today looks more like a war for the spread of terror.  It wasn’t he who created the growing inequality gap in this country or produced all those billionaires amid a population that increasingly felt left in the lurch.  It wasn’t he who hiked college tuitions or increased the debt levels of the young or set roads and bridges to crumbling and created the conditions for Third World-style airports.

If both the American global and domestic systems hadn’t been rotting out before Donald Trump arrived on the scene, that “again” of his wouldn’t have worked.  Thought of another way, when the U.S. was truly at the height of its economic clout and power, American leaders felt no need to speak incessantly of how “indispensable” or “exceptional” the country was.  It seemed too self-evident to mention. Someday, some historian may use those very words in the mouths of American presidents and other politicians (and their claims, for instance, that the U.S. military was “the finest fighting force that the world has ever known”) as a set of increasingly defensive markers for measuring the decline of American power.

So here’s the question: When the Trump years (months?) come to an end, will the U.S. be not the planet’s most exceptional land, but a pariah nation?  Will that “again” still be the story of the year, the decade, the century? Will the last American Firster turn out to have been the first American Laster?  Will it truly be one for the record books?


 

Tom Engelhardt is a co-founder of the American Empire Project and the author of The United States of Fear as well as a history of the Cold War, The End of Victory Culture. He is a fellow of the Nation Institute and runs TomDispatch.com. His latest book is Shadow Government: Surveillance, Secret Wars, and a Global Security State in a Single-Superpower World.

Follow TomDispatch on Twitter and join us on Facebook. Check out the newest Dispatch Book, John Dower’s The Violent American Century: War and Terror Since World War II, as well as John Feffer’s dystopian novel Splinterlands, Nick Turse’s Next Time They’ll Come to Count the Dead, and Tom Engelhardt’s Shadow Government: Surveillance, Secret Wars, and a Global Security State in a Single-Superpower World.

Copyright 2017 Tom Engelhardt

 

Steve Frisch: “It’s Time to Kill This Tired Old Cliche That Government Should Run Like a Business”

By SteveFrisch

Editor’s Note: Steve Frisch offered the following comments on his Facebook page in response to the article linked below, about Trump’s appointment of his son-in-law Jared Kushner to a “swat team to fix government with business ideas”

So I don’t think it’s a terrible idea to create an office to advance innovation in government. How we approach issues and how government provides services should always be getting a fresh look.

I am profoundly uncomfortable with the idea of putting someone in charge who has absolutely no experience in government, and whose success in business was inherited, reporting directly to someone else with equally no experience in government.

Government and business are not the same thing.

Government does the stuff business can’t do or won’t do because there is no profit in it, or the profits to be realized in it have such a long return on investment that the private sector won’t invest in it. The purpose of business is to maximize profit (much to my chagrin) and serving all of the people does not necessarily maximize profit.

Add to that the fallacy of the basic concept that competition inherently provides lower costs and higher efficiency. That concept has been disproved time and time again, in certain areas of investment. Sometimes it just provides an advantage for profit making businesses.

Let’s just take the example of pharmaceuticals. Costs are higher in the US with a basically unregulated market than they are in any other developed nation on earth, largely because government refuses to play the role of negotiating prices and centralizing supply.

Some things are simply so costly that the only way to provide them is for government to take on the burden. Infrastructure, basic research, national defense, and governance itself are prime examples.

The purpose of government as defined in our Constitution is to ‘promote the general welfare.” If one breaks that down based on the meaning of the words, it means, “to support or actively encourage advancements for most or all of the people that improve health, happiness or fortune.”

In essence business, with a mandate to maximize profits to shareholders, and government, with a mandate to promote the general welfare, have sometimes diametrically opposed objectives that are often in competition with each other….that is why we have governments, because what is good for GM is not necessarily what is good for the country.

The idea that reforming government to be like a business also ignores a basic reality of government itself, which Trump just learned by getting his ass handed to him over health care; government is inherently about collaboration between interests to get the best possible deal. Henry Paulson famously said, “You succeed in Washington by collaborating.” Business may be increasingly about collaboration but that ethic has not reached the board room yet; in the board room business is about making decision that affect shareholder value.

Finally this gets down to one basic truth, that not everything that is profitable is of social value and not everything of social value is profitable. Kim Kardashian is profitable but has low social value (I would argue the same of The Apprentice). Research has high social value but low profit. There is no worse place to be in business than “the first” one who pioneers a new idea or technology. They bear all the development cost and have to share the profit.

It’s time to kill this tired old cliche that government should run like a business. What we really mean is that government should run efficiently, should provide value, and should promote the general welfare.

There is no worse way to get to that ideal than to give the reins to a guy whose sole qualification for digging into the issue is running his parents real estate fortune.

If one is serious about governing one puts seasoned professional with a track record in the area of expertise being addressed in position of management authority.


Steve_FrischSteve Frisch is President of Sierra Business Council and one of its founding members. Over the last 20 years Sierra Business Council has leveraged more than $100 million of investment in the Sierra Nevada and its communities through community and public-private partnerships.  Sierra Business Council also manages the Sierra Small Business Development Center focusing on advancing sustainable business practices and linking new and expanding businesses to climate mitigation and adaptation funding. Steve manages SBC’s staff and programmatic development.

Prior to joining the Sierra Business Council, Steve owned and operated a small business in Truckee. Steve serves on the board of the California Stewardship Network, the Large Landscape Practitioners Network, the National Geographic Geo-tourism Council, Capital Public Radio, and Leadership For Jobs and a New Economy.  Steve is also a former Fulbright Exchange Program Fellow, sharing information and knowledge gained in the Sierra Nevada in China and Mongolia.  Steve is a graduate of San Francisco State University with a B.A. in Political Science.

The Constitutional Apocalypse

At the Kentucky Capitol in January, union leaders addressed those protesting a Senate-approved bill making it illegal for workers to be required to join a union or pay dues to keep a job. (Photo: Timothy D. Easley/Associated Press)

As Trump vilifies the press, the courts, immigrants, Muslims, Democrats, protestors and anyone who disagrees with him, it isn’t hard to imagine a modern day Mussolini… or worse. But, an even greater threat lies in the Republican’s march towards full control of state government. If they get there, they will have the frightening power to amend the Constitution into their own authoritarian image… or Ayn Rand’s.Republicans now control 32 state legislatures and 33 governorships. They have majorities in both state legislative chambers as well as the governorships in 25 states. The Democrats have total control in only six states and legislative control in two more (see here).If Republicans achieve veto-proof control in 38 states, they can do something that has never been done before ― hold a constitutional convention, and then ratify new amendments that are put forth. To date all amendments have been initiated from Congress where two-thirds of both houses are required. In either case 38 states would be needed to ratify the amendments. The Republicans are well on their way.We know what they are likely to do: end collective bargaining, outlaw abortion, forbid progressive income, estate and Wall Street taxes; prohibit class action law suits, privatize social security, guarantee “free choice” in all school systems, and so on. They would do what they’ve always wanted to do ― outlaw the New Deal and its social democratic programs. And if they get crazy enough, they could end separation of church and state and undo other portions of the Bill of Rights.A paranoid fantasy? Just say President Trump.How did we get here?Ask the corporate Democrats who have turned losing into an art form.Since 2008, they have lost 917 state legislative seats. Explanations range from Koch brothers funding to gerrymandering, to voter suppression to the rise of the Tea Party. All partially true.

The Democrats also shoulder a good deal of the blame. Ever since Bill Clinton triangulated into NAFTA and away from working people, the Democratic party’s embrace of financial and corporate elites have become the norm.

Hillary Clinton took $225,000 per speech from Goldman Sachs not because she was corrupt. Rather, this is simply the way the political game is played. You raise money from rich people, and then you back away from attacking their prerogatives while still trying to placate your liberal/worker base. Getting rich along the way is to be expected.

But as economist Jamie Galbraith put it, ultimately it is not possible for the Democrats to be both the party of the predators and the prey.


The failure and rebirth of progressivism?

The amazing acts of resistance popping up all over prove that the progressive spark is alive and well. Even seniors at the Progressive Forum in Deerfield Beach, Florida are planning to put their bodies on the line to stop ICE raids.

While raising hell all over the country, we also should re-examine how our strategies and structures may have contributed to the rise of the right. After all, this electoral coup happened on our watch.

Silo Organizing

Here’s our working hypothesis for how progressives contributed to the rise of the right: We have failed to come out of our issue silos to build a national movement that directly confronts runaway inequality.

For more than a generation progressive organizations have shied away from big picture organizing around economic inequality. Instead we’ve constructed a dizzying array of issue silos ― environment, LBGQ, labor, immigration, women, people of color, criminal justice and so on. We are fractured into thousands of discreet issues, enabled by philanthropic foundations that are similarly siloed.

Few of our groups focused on the way Wall Street and corporate elites strip-mined the economy. Very few of us mobilized around the great crash. Few of us noticed as the CEO/worker income gap jumped from 45 to 1 in 1970 to an incredible 844 to 1 by 2015. We collectively missed how this growing economic inequality was causing and exacerbating nearly all of our silo issues.

We didn’t connect the dots.

Most importantly, we failed to grasp how runaway inequality was alienating millions of working people who saw their incomes decline, their communities whither and their young unable to find decent jobs.

While the Tea Party and the right had a clear message ― big government is bad ― progressives had little to say collectively about runaway inequality.

Enter Occupy Wall Street

By the summer of 2010, the progressive failure was painfully obvious. After Wall Street had robbed us blind and crashed the economy, a Democratic president was about to enter a “grand bargain” with the Republicans to promote austerity. Think about this: While Wall Street got bailed out in full, Obama and the Democrats were about to cut Social Security. Amazing.

Then out of nowhere came Occupy Wall Street. (Out of nowhere is correct because the actions did not originate from any of our progressive silos.) In six months there were 900 encampments around the world. Thankfully, “We are the 99%.” shifted the debate from austerity to inequality.

Unfortunately, Occupy believed in spontaneous political combustion and shunned any and all organizational structures and agendas. Social media, consensus decision making, horizontal anti-organizing, and anti-leadership were to carry the day. In six months they were gone.

Meanwhile the traditional progressive groups watched it rise and fall from the outside. We were spectators as we continued to press forward in our issue silos.

Enter Bernie Sanders

We got a second chance. Bernie Sanders, an independent socialist with a clear social democratic agenda, decided to challenge Hillary Clinton, the presumptive nominee. At first, few of us took him seriously. After all, he’d been around for 40 years, saying the same things but never gaining any traction outside of Vermont.

But like Occupy, he and his message hit a nerve, especially among the young and among disaffected working people who were entirely fed up with the corporate Democrats.

In a flash, Sanders did the impossible. He beat Hillary in several primaries. He drew much larger crowds. He even raised more money from small donors than the Clinton machine could raise from the rich. Progressive unions like the Communications Workers of America and National Nurses United went all in. For a few months the dream looked possible.

But too many other large unions and liberal issue groups committed early to Clinton, thinking she would win easily. That would allow them to gain more access for their issues and for themselves. Didn’t happen.

Trump toppled the Clinton machine in the Rust Belt. Some say he did so with a toxic combination of racism, sexism and xenophobia and that certainly was the case for a good portion of his vote. Others are certain that Comey and Putin made the difference.

But in the Rust Belt Trump won because he picked up millions of those who previously had voted for Obama and Sanders. It is highly likely that runaway inequality, and the trade deals that exacerbated it, defeated Clinton in the Democratic strongholds of Wisconsin, Michigan, and Pennsylvania. In Michigan alone Hillary received 500,000 fewer votes than Obama. (see here)

What now?

We need to turn the marvelous anti-Trump resistance into a common national movement to that binds us together and that directly confronts runaway inequality. We need to come out of our silos because nearly every issue we work on is connected by growing inequality.

Such a movement requires the following:

1. A common analysis and agenda: As we’ve written elsewhere, resisting Trump is not enough. We need a proactive agenda about what we want that goes beyond halting the Trump lunacy.

The Sanders campaign offered a bold social democratic agenda to young people in particular. Progressive should be able to build broad support around a Robin Hood Tax on Wall Street, free higher education, criminal justice reform, humane immigration policies, Medicare for All, fair trade, real action on climate change, and a guaranteed job at a living wage for all those willing and able.

2. A common national organization: A big problem. We have no equivalent to the Tea Party. We have no grand alliance that links unions, community, groups, churches and our issue silos. There are excellent websites like Indivisible that are successfully encouraging widespread resistance on the congressional level. But they consider themselves to be purely defensive against Trump.

There are hundreds of demonstrations popping up all over but no organizational glue to hold them together. There’s Our Revolution ― an outgrowth of the Sanders campaign ― that is still getting its sea legs. But to date we have no common center of gravity that is moving us forward organizationally.

Ideally we should all be able to become dues paying members of a national progressive alliance. We should be able to go from Paterson to Pensacola to Pomona and walk into similar meetings dedicated to fighting for our common agenda to reverse runaway inequality. Perhaps the hundreds of town hall meetings will head that way? It’s too early to tell.

3. An education infrastructure: The Populist movement of the late 19th century waged a fierce battle against Wall Street. It wanted public ownership of banks and railroads. It wanted livestock and grain cooperatives. It wanted a progressive income tax on the rich and public banks. The organization grew by fielding 6,000 educators to explain to small farmers, black and white, how the system was rigged against them and what they could do about it.

We need about 30,000 educators to hold similar discussions with our neighbors about runaway inequality, how it binds us together and what we can do about. (If you’re interested in getting involved see here.)

4. A new identity: Our toughest challenge. For 40 years we’ve been conditioned to the idea that runaway inequality is an immutable fact of life ― the inevitable result of automation, technology and competitive globalization. Along the way, neoliberal (free market) values shaped our awareness.

  • We accepted the idea that going to college meant massive debts for ourselves and our families;
  • That there was nothing abnormal about having the largest prison population in the entire world;
  • That it was part of the game to pay high deductibles, co-pays and premiums for health insurance;
  • That it was OK for the super-rich to hide their money off-shore;
  • That there was nothing to be done about chronic youth unemployment, both rural and urban, other than to try harder and pull themselves up;
  • That it was perfectly natural for a factories to pick up and flee to low wages areas with no environmental enforcement;
  • And that somehow private sector jobs, by definition, were more valuable to society than public ones.

These mental constraints have got to go. We got here as the result of deliberative policy choices, not by acts of God. We need to reclaim a basic truth: the economy should work for its people and not the other way around.

Most importantly, we have to relearn the art of movement building which starts in our own minds―we have to believe that it is both necessary and possible, and that each and every one can contribute to it.

We desperately need a new identity―movement builder.

Is this so difficult to imagine?

Les Leopold

Les Leopold, the director of the Labor Institute in New York is working with unions, worker centers and community organization to build a national economics educational campaign. His latest book, Runaway Inequality: An Activist’s Guide to Economic Justice (Oct 2015), is a text for that effort. All proceeds go to support this educational campaign. (Please like the Runaway Inequality page on Facebook.) His previous book is The Looting of America: How Wall Street’s Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It (Chelsea Green/2009).

(Join Us! at Runaway Inequality: Resistance is breaking out all over. Millions are eager to help take back our country from the hard right. To get there, we need educators — thousands of them — to spread the word.) 

A California State-Owned Bank Could Help Finance Single-Payer

Editor’s Comment: It seems like serendipity: The Trump administration and the GOP Congress are both hell-bent on dismantling the Affordable Care Act, California state senators  Ricardo Lara (D-Bell Gardens) and Toni G. Atkins (D-San Diego) introduce the single-payer Californians for a Healthy California Act (SB 562), and public banking proponent Ellen Brown (who ran for California treasurer in 2014) is now pitching again for state-run banks.

So where’s the serendipity? A California state-run bank could help finance a single-payer health care system in California. The financing of single-payer has so far been the biggest stumbling block in the way of its success in other states — like Vermont and Colorado — where it has been proposed, but defeated.

Ellen Brown, attorney, author of The Public Bank Solution and President of the Public Banking Institute explains in the following article the advantage of public banking.

How to Cut Infrastructure Costs in Half

Americans could save $1 trillion over 10 years by financing infrastructure through publicly-owned banks like the one that has long been operating in North Dakota.

by Ellen Brown

President Donald Trump has promised to rebuild America’s airports, bridges, tunnels, roads and other infrastructure, something both Democrats and Republicans agree should be done. The country needs a full $3 trillion in infrastructure over the next decade. The $1 trillion plan revealed by Trump’s economic advisers relies heavily on public-private partnerships, and private equity firms are lining up for these plumbing investments. In the typical private equity water deal, for example, higher user rates help the firms earn annual returns of anywhere from 8 to 18 percent – more even than a regular for-profit water company might expect. But the price tag can come as a rude surprise for local ratepayers.

Private equity investment now generates an average return of about 11.8% annually on a 10-year basis. For infrastructure investment, those profits are made on tolls and fees paid by the public. Even at simple interest, that puts the cost to the public of financing $1 trillion in infrastructure projects at $1.18 trillion, more than doubling the cost. Cities often make these desperate deals because they are heavily in debt and the arrangement can give them cash up front. But as a 2008 Government Accountability Office report warned, “there is no ‘free’ money in public-private partnerships.” Local residents wind up picking up the tab.

“As a 2008 Government Accountability Office report warned, ‘there is no ‘free’ money in public-private partnerships.’ Local residents wind up picking up the tab.”

There is a more cost-effective alternative. The conservative state of North Dakota is funding infrastructure through the state-owned Bank of North Dakota (BND) at 2% annually. In 2015, the North Dakota legislature established a BND Infrastructure Loan Fund program that made $50 million in funds available to communities with a population of less than 2,000, and $100 million available to communities with a population greater than 2,000. These loans have a 2% fixed interest rate and a term of up to 30 years. The proceeds can be used for the new construction of water and treatment plants, sewer and water lines, transportation infrastructure and other infrastructure needs to support new growth in a community.

If the Trump $1 trillion infrastructure plan were funded at 2% over 10 years, the interest tab would come to only $200 billion, nearly $1 trillion less than the $1.18 trillion expected by private equity investors. Not only could residents save $1 trillion over 10 years on tolls and fees, but they could save on taxes, since the interest would return to the government, which owned the bank. In effect, the loans would be nearly interest-free to the government.

New Money for Local Economies

Legislators in cash-strapped communities are likely to object, “We can’t afford to lend our revenues. We need them for our budget.” But banks do not lend their deposits. They actually create new money in the form of bank credit when they make loans. That means borrowing from its own bank is not just interest-free to the local government but actually creates new money for the local economy.

As economists at the Bank of England acknowledged in a March 2014 report titled “Money Creation in the Modern Economy”, the vast majority of the money supply is now created by banks when they make loans. The authors wrote:

The reality of how money is created today differs from the description found in some economics textbooks: Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits. . . . Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money. [Emphasis added.]

Money is not fixed and scarce. It is “elastic”: it is created when loans are made and extinguished when they are paid off. The BOE report said that private banks now create nearly 97 percent of the money supply in this way.

Richard Werner, Chair of International Banking at the University of Southampton in the UK, argues that to get much-needed new money into local economies, rather than borrowing from private investors who cannot create the money they lend, governments should borrow from banks, which create money in the form of deposits when they make loans. And to get that money interest-free, a government should borrow from its own bank, which returns the interest to the government.

Besides North Dakota, many other states and cities are now exploring the public bank option. Feasibility studies done at both state and local levels show that small businesses, employment, low-cost student loans, affordable housing and greater economic stability will result from keeping local public dollars out of the global banking casinos and in the local community. Legislation for public banks is actively being pursued in Washington State, Michigan, Arizona, Philadelphia, Santa Fe, and elsewhere. Phil Murphy, the front-running Democratic candidate for New Jersey governor, is basing his platform on a state-owned bank, which he says could fund much-needed infrastructure and other projects.

New Money for a Federal Infrastructure Program

What about funding a federal infrastructure program with interest-free money? Tim Canova, Professor of Law and Public Finance at Nova Southeastern University, argues that the Federal Reserve could capitalize a national infrastructure bank with money generated on its books as “quantitative easing.” (Canova calls it “qualitative easing” – central bank-generated money that actually gets into the real economy.) The Federal Reserve could purchase shares, whether as common stock, preferred stock or debt, either in a national infrastructure bank or in a system of state-owned banks that funded infrastructure in their states. This could be done, says Canova, without increasing taxes, adding to the federal debt or hyperinflating prices.

Another alternative was proposed in 2013 by US Sen. Bernie Sanders and US Rep. Peter DeFazio. They called for a national infrastructure bank funded by the US Postal Service (which did provide basic banking services from 1911 to 1967). With post offices in nearly every community, the USPS has the physical infrastructure for a system of national public banks. In the Sanders/DeFazio plan, deposits would be invested in government securities used to finance infrastructure projects. Besides financing infrastructure without raising taxes, the plan could save the embattled USPS itself, while providing banking services for the one in four households that are unbanked or under-banked.

Reliance on costly private capital for financing public needs has limited municipal growth and reduced public services, while strapping future generations with unsustainable debt. By eliminating the unnecessary expense of turning public dollars into profits for private equity interests, publicly-owned banks can allow the public to retain ownership of its infrastructure while cutting costs nearly in half.


This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License

Ellen Brown is an attorney and founder of the Public Banking Institute. She is the author of twelve books, including the best-selling Web of Debt, and her latest book, The Public Bank Solution, which explores successful public banking models historically and globally.

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