But consider some of the events transpiring over the last few weeks. Reality is indeed stranger than fiction. These events rival any work of literature in illustrating hypocrisy and proud ignorance. And the real-life actors in this public theater know no shame or regret.
The Republican primary medicine show is low entertainment. Its candidates and their stage hands have amused liberal, but spineless commentators and shocked international observers with the primary debate inanities.
Within the arena of right-wing ultimate fighting, Gingrich has assailed Romney’s money making career as “vulture capitalism.” Romney sups at the table of Bain Capital, a private equity fund that preys on vulnerable businesses weighed by debt and burdened by marginally criminal mismanagement. Bain buys these businesses at a heavily discounted price by leveraging their substantial assets and then guts the victims chiefly of their employees, imposing a new draconian labor discipline, and reselling the polished product at an enormous profit. Indeed, "vulture capitalism" is the appropriate term for this parasitic process widely practiced among ambitious capitalists in the US.
But wait! This exposé came from Newt Gingrich? Not from Paul Krugman? Joseph Stiglitz? Or any of the other economists or pundits arrayed around the liberal wing of the Democratic Party? None of the Party’s shrewd operatives rallied around President Obama? Or the President himself?
No, this exposé of vulture capitalism came from one of the icons of the ultra-right. Further, the ultra-right fed on the revelation that Romney only paid taxes at a rate of 15% or less compared to the much higher rates paid by most citizens.
Surely this is class warfare initiated from the right. And just as surely no prominent Democrat – representing the presumed Party of working people – joined the chorus. As David Bromwich noted, in The New York Review of Books (2-9-2012), “Gingrich… fleetingly placed himself to the left of President Obama, who has been careful to portray the financial collapse as a disaster without a villain.” Isn’t this an indictment of the hypocrisy and deception of the two-party circus?
Yes. Exposing a sector of capitalism as illegitimate is beyond the pale, beyond the two-party discourse, even though no one but Romney has rushed to defend it. Everyone knows that private equity firms – that have worked their black magic on over 3,200 firms – engage in wholesale destructive behavior (apologists call it “constructive destruction”) yet no one will say it – except Gingrich.
Similarly, Ron Paul, the only candidate in years with a set of internally consistent principles, has dared to challenge the two-party consensus on aggressive imperialism, arguing that the US should abandon its occupations and wars and let the rest of the world (including Iran) go its own way. Paul, the only Republican right-wing ideologue who believes what he says, stands for an anachronistic Republicanism favored by the Party before the New Deal. The target of liberal derision because of his appearance and mannerisms and discounted by conservatives because of his slender fund-raising, Paul continues to have his campaign energized by poll results and young volunteers impressed with his integrity. And he dares to speak heresy.
Of course those who respect the man’s integrity should consider the consequences of his free market and barely-breathing government principles before jumping on his bandwagon. Nineteenth-century nostrums are not the solution to twenty-first-century problems, regardless of Paul’s honesty.
It is incredible, however, that no one among the left of the Democratic Party’s luminaries has either defended Paul’s anti-imperialism or, at least, used it as a spring board for a tepid critique of US policies regarding Israel, Iran, or the rest of the Middle East. Again, writing in the New York Review of Books, David Bromwich ventures: “In addressing such issues, he has no rival among Republicans, and, after the death of Robert Byrd and the defeat of Russ Feingold, none among Democrats of national stature. On issues of national security and war, he is the American politician who speaks to Americans as if they were grownups interested in their own condition…”
But who speaks for “grownups” on the other urgent issues? Certainly not the Democrats. This is surely a measure of the untenable, unpopular and unsustainable US two-party system and its money-driven pre-election entertainment.
Hungary has its own Ron Paul in the body of conservative Prime Minister Viktor Orban. A political maverick born of the anti-Communist scramble for power after Hungary’s socialist government crumbled, Orban won election in 2010 representing the right-wing, nationalist Fidesz Party. Lacking Paul’s principles or any principles at all, Orban delights in playing to nationalist sentiments and defying the EU and the IMF. I wrote earlier of the outrage created by Orban when he dared to tax banks to reduce Hungary’s deficit. As I sarcastically noted, austerity programs to lower the deficit on the backs of working people are prescribed by these august bodies, but raising revenue by taxing banks is strictly forbidden, even though the deficit-lowering results would be the same! So much for the independence and objectivity of the EU and the IMF.
Orban struck again late last year securing a parliamentary law that slightly limits the powers of Hungary’s Central Bank. Like most Central Banks, Hungary’s enjoys a special status buffering it from any popular or governmental influence. In essence, capitalist Central banks are enormously powerful economic actors that are isolated from any kind of democratic control, pressure, or oversight. And the EU, the IMF, and capitalism, in general, want to keep it that way. It is capitalism’s ultimate economic tool immunized from the will of the people.
Orban’s parliament would place a government minister on the Bank’s monetary council, seemingly a small step towards democratizing the Bank, as well as requiring the Bank to share its meeting agenda with the parliament, another small step towards transparency. The move was met by righteous indignation from the European Commission (threatening to sue), the IMF (threatening to withhold funds) and the entire global financial hierarchy. They charged indignantly that the new law compromised the Central Bank’s “independence”.
Of course the question is independence from whom. Currently the Bank is independent from any sort of Hungarian popular governance, but it is hardly independent from outside influence, particularly the IMF, the EU, and financial markets. This is a strange sort of independence advocated and protected by foreign financial forces. To quote the famed philosopher, Humpty Dumpty: “When I use a word… it means just what I choose it to mean—neither more nor less.” Financial elites occupy the same fantasy world created by Lewis Carroll.
US workers can breathe easier. The wholesale destruction of their living standards, benefits, and wages, coupled with a dramatic increase in the rate of exploitation over the last decade is paying dividends. But not dividends for them.
Recently Caterpillar Inc locked out its Canadian workers in London, Ontario, contending that the workers need to cut their pay dramatically. They point to the fact that Caterpillar pays its workers 50% less in Lagrange, Illinois. Quoting The Wall Street Journal (US: A Cheaper Labor Pool 1-6-2012): “…[B]ut instead of pointing to the usual models of cheap and pliant labor, such as China and Mexico, it is using a more surprising example: the US.”
So the tables are turning and today we find that US workers are setting miserable standards of pay and benefits against their Canadian and European counterparts. They, in turn, could repeat the same sad misguided tactic popular in the US by blaming poorly paid “foreigners” – in this case US workers or their government’s policies -- for the pressure on their living standards. US hourly compensation costs in manufacturing rose only 39% over the last decade, while average comparable labor costs grew by 74% in OECD countries and 91% in Canada.
Put differently, labor costs per unit of output in the US are 13% less than they were in manufacturing a decade earlier. In Germany they rose 2.3%, the Republic of Korea 15%, and Canada 18%. These figures are most telling because they reflect—assuming roughly similar levels of productive force development – differences in the relative rates of exploitation. Clearly US workers have surrendered far more than their international brothers and sisters while being squeezed much harder in the work place.
Instead of the divisive and diversionary tactic of blaming foreign governments or foreign workers for job losses or pay cuts – typically China – it’s time to target the trans-national corporations that exploit labor cost differentials to increase profits. Like the machine-breakers of yore, workers and their trade union leaders must correctly identify the enemy and embrace class struggle unionism if they have any hope of stopping this destructive game of competition to see who can offer the best wage deal to rapacious corporations.
Speaking of China, the Western media reported on January 17 an ominous drop in fourth quarter GDP in the Peoples Republic of China; quoting Reuters: “Growth of 8.9% over a year earlier was slightly [my emphasis] stronger than the 8.7% forecast by economists in a Reuters poll, but the data on Tuesday raised concerns about the immediate outlook and how much support China can offer a struggling global economy… Growth for all of 2012 slipped to 9.2%, a pace last seen in 2009… from 10.4% in 2010."
While it is true that the PRC GDP growth dropped slightly (5%) from the 3rd to the 4th quarter, it meant that that the PRC GDP would double, at that rate, in a little over eight years rather than a bit more than seven and a half – not a bad performance either way for the world’s second largest economy. Put into perspective, the OECD estimates that from 2011 through 2013 the collective OECD states (including PRC) will only average less than 2% growth. At that rate, it would take the entire OECD over 37 years to double its economic output!
But the Reuters report, like so many other media accounts of PRC 4th quarter GDP performance, masks two implicit points:
1. The Chinese economy is vigorous even in the midst of world wide economic turmoil (2009, for example, and now).
2. Most importantly, economic wizards concede that the health of the global capitalist economy depends critically on the continued vigor of that economy.
So it’s not the future of the Chinese people that so worries the pundits, but the impact of the Chinese economic engine on capitalism’s future. At the same time, they continue to demonize the policies that fuel that powerful engine. Strange, indeed.