Tracking Trump

The 2016 election taught many lessons, few of which have penetrated the talking heads of the mainstream media. Most of what we could learn has been lost in the frenzy of the most outrageous political maneuvering witnessed in decades.

One of the more notable lessons is the diminished role of campaign money in determining this Presidential election outcome. Trump spent a third less than Clinton in this election (Washington Post: $932 million versus $1.4 billion). Some have made much of this discrepancy, along with the fact that Trump largely ignored the advice of his hired consultants and advisors. Of course, Clinton’s money actually bought over 3 million more votes in the nationwide count. And the mass media enthusiastically provided Trump with uncountable dollars’ worth of free coverage (Remember CBS CEO Les Moonves’s comment on Trump’s loud mouth, Berlusconi-like antics during the primaries: “I've never seen anything like this, and this is going to be a very good year for us… Man, who would have expected the ride we're all having right now? ...Who would have thought that this circus would have come to town?”)

Nonetheless, the Trump election undeniably showed that it is possible to mount an impactful campaign outside of the conventional rules of the game, especially when a substantial portion of the electorate has soured on the rules of the game.

It was this fact-- the fact that there was a new mood emerging, especially among those most devastated by the continuing economic crisis -- that was underestimated or missed by the punditry and is still largely ignored.

While the Trump election was a surprise, something new is clearly in the air. I wrote nearly a year ago:

The Sanders and Trump successes suggest that voters are not appeased by the thin gruel offered by the party elites this go-round. But something more profound is occurring—a refusal to settle for the usual charade. Moreover, party loyalty is unusually thin this time, challenging party leaders’ ability to count on a transfer from one candidate to another. What the pundits call “unpredictability” is actually the exercise of a new level of political maturity and independence. A recent Pew Research Center poll (December 8-13, 2015) bears out the mood of voter alienation: 62% of all respondents maintain that “the federal government does not do enough for middle-class people.” Thus, the notion that anti-government sentiment runs deep in the populace is a media-inspired illusion. Instead, people want better government. (A Moment Charged with Possibility 2-11-16)

We now know, thanks to Wikileaks, that the Democrats had no intention of allowing an insurgent like Sanders to address the “new mood” of the electorate. Instead, they chose to covertly ensure the nomination of the candidate of more-of-the-same-- Hillary Clinton. In undermining Sanders, Democratic Party elites guaranteed that Trump would be perceived as the only authentic “outsider” candidate.

I wrote last year, in April, that the failures of the traditional support system for the “working class and poor people-- unions, religious institutions, the Democratic Party, ethnic organizations, etc.-- explains, in no small part, the desperate turn to Trump. Tepid, aloof liberalism breeds desperate options, like the outlandish Trump, when conditions deteriorate sharply and no radical options appear available.”

Thus, a careful assessment of the Trump victory should ascribe a role to working class disaffection with business-as-usual politics, but without a simplistic blanket condemnation of the working class, without a calloused dismissal of white workers as wholly racist, misogynist, or xenophobic.

But careful assessment is not popular after the recent election. Liberal pundit and darling of the “responsible” left, Paul Krugman, penned a harsh attack on the white working class:

...the fact is that Democrats have been pursuing policies that are much better for the white working class than anything the other party has to offer. Yet this has brought no political reward… The only way to make sense of what happened is to see the vote as an expression of, well, identity politics-- some combination of white resentment at what voters see as favoritism toward non-whites (even though it isn’t) and anger on the part of the less educated at liberal elites whom they imagine look down on them. The Populist Perplex, Pittsburgh Post-Gazette, 11-26-2016.

Krugman is hardly out of step with mainstream liberals with his barely concealed contempt for the motives of white workers. But compare this statement with what he said eight years earlier when he was shilling for Hillary Clinton against Barack Obama in the midst of their primary competition:

[Princeton colleague Frank] Bartels cited data showing that small-town, working class Americans are actually less likely than affluent metropolitan residents to vote on the basis of religion and social values… Does it matter that Mr. Obama has embraced an incorrect theory about what motivates working-class voters? His campaign certainly hasn’t been based on Mr. Frank’s book [What’s the Matter with Kansas?], which calls for a renewed focus on economic issues as a way to win back the working class. Indeed, the book concludes with a blistering attack on Democrats who cater to “affluent, white collar professionals who are liberal on social issues” while dropping the class language that once distinguished them sharply from Republicans.”... Anyway, the important point is that working-class Americans do vote on economic issues-- and can be swayed by a politician who offers real answers to their problems. Clinging to a Stereotype, Pittsburgh Post-Gazette, 4-19-2008.

Apart from the blatant hypocrisy exhibited by the marked reversal of Krugman’s views in only eight years, the earlier Krugman gets it right. Economic issues have been decisive in working class vote patterns, especially since the deindustrialization of the 1970s and 1980s and the economic catastrophe of 2007-8. And the earlier Krugman’s judgement that “working-class Americans… can be swayed by a politician who offers real answers to their problems” proved accurate with the campaign of Bernie Sanders. But with the Democratic Party actively burying that option, many workers misguidedly turned to the only other candidate promising to address their interests.

Contrary to the widespread impressions disseminated by media elites, the working-class vote was not overwhelmingly for Trump, nor was the working class vote the backbone of his success. The Electoral College totals swung his way thanks to narrow victories in a few key rust-belt states. Many factors contributed to the Trump victory, but two stand out, especially for a left analysis.

First, there was a discernable shift among many voters in working class strongholds previously giving majorities to Obama to turn in the direction of Trump in 2016. As Krugman noted in his 2008 alert and warning to the Democrats, addressing relevant economic issues is decisive in winning the working class vote. With the Sanders economic program strangled in the cradle, desperate voters saw nowhere to turn but to the false, demagogic hope of putting the industrial toothpaste back into the tube, of creating jobs out of Trump’s magic.

Democratic Party operatives and their media lapdogs have done their most to evade blame for the Party’s abandonment of working people’s interests. Instead, they have painted workers as pathologically bigoted and ignorant, a handy theme reinforced by elite media since the era of TV stereotype, Archie Bunker. Today’s archetypes for the socially dysfunctional (white) worker is found in the best-selling tell-all from a working class “escapee” (Hillbilly Elegy, J. D. Vance). By diverting the spotlight to working class dysfunction, the third-way, New Democrats who dominate the party can escape blame for their willful neglect of the multiracial working class’s increasingly desperate plight.

Second, Trump was a magnet for every backward, reactionary, racist element in the US. They, too, saw the arrogant, abrasive, loud-mouth as someone in whom they could place their hopes. Trump’s aggressive break with the typical politician’s syrupy civility was taken as a sign of contempt for the alien, the different, those perceived as threatening (Ironically, these same hates and fears were, in the past, invested in soft-spoken religious leaders and smooth-tongued conservative gentlemen). Trump engages in the Old South tactic of drawing attention by surpassing all others in race baiting and fear mongering, but it’s important to note that this simplistic tactic only works where an atmosphere of racial friction and fear already exists. It’s just that Trump opportunistically says it the loudest.

The contradiction between Trump’s appeal to workers and his courtship of the extreme right is unresolvable. Nevertheless, it is a common feature of right-wing populism, a political phenomenon emerging strongly in Europe and the US. It takes root where both objective and subjective conditions are ripe for radical change, but a weak or discredited left offers little hope. The extreme right reaches to fill the void with vague populism.

While it is not yet possible to entirely discern how Trump will attempt to resolve this contradiction, it is becoming increasingly clear that he is surrounded by advisors, confidents, and attendants fully committed to a pro-corporate, pro-capitalist domestic agenda, an agenda that, apart from theatrical moments, will leave little for workers.

Trump’s foreign policy is, however, a different kettle of fish. Domestic policy is crafted by many hands. Congress, which is 100% bipartisan for the interests of capitalism over any other interest, will have a big say over where Trump takes it. Moreover, there is space for debating divergent interpretations of the best interests of capital.

But foreign policy is largely crafted through the executive (even war powers have been commandeered by the executive branch). And there is little tolerance for dissidence from the policies of the foreign policy establishment. The tight reign over policy fixed by generations of rabid Cold Warriors continues to be a feature of governing. Many of Trump’s comments on prospective foreign relations challenge both the current consensus and those who police that consensus.

Trump’s deviance from that consensus on relations with Russia, NATO, and other matters explains the brazen intervention of US security services in post-election politics. A massive media campaign was mounted to distract the people from the Democratic Party fiasco and construct a reliable straw man, Russia, to take the blame for the embarrassing loss. The mainstream media shamelessly and nearly uniformly spread the speculative story that Russia had intervened profoundly in the US election. With skepticism rising, the joint US security agencies released an amateurish report, allegedly confirming Russian intervention. Many private security experts remained skeptical. Trump challenged the report.

Within days, government insiders released a second document-- an addendum-- reputedly based on a UK private investigation, alleging outrageous misconduct on Trump’s part and an extensive Russian disinformation campaign. The security agencies admitted sharing the report with Obama and Trump, denied leaking it, and refused to attest to its accuracy. In a recent interview, CIA Director Brennan was said “to give it no particular credence.” He said, instead: “I would have no interest in trying to give that dossier any additional airtime.” That, he says, “...would make no sense at all.”

So, if the report had no credence, if it made “no sense” to give it “more airtime,” why was it shared with the President and President-elect and leaked to the press in the first place?

The answer should be obvious to all but the gullible and kept corporate press: The memorandum was meant, on the part of the security agencies, as a threat to Donald Trump, a reminder that wandering off the establishment reservation is not tolerated.

The media’s failure to challenge this “memorandum,” its veracity, its timing, its source, and its leak is a new low in groveling before power. To think that the head of the CIA, the most formidable intelligence apparatus in the world, had a hand in confronting Trump with a document that Brennan claimed “he had no way to assess the allegations contained in the dossier of political opposition research…” (Wall Street Journal, 1-19-17) is outrageous (Brennan even claimed that he hadn’t read it). That the CIA held no interest or lacked the ability to confirm a dossier written by a former member of the close-knit intelligence community is preposterous. That the security agencies promoted a dossier that bore “no credence” and that they released it for any other reason than to intimidate Trump is unbelievable.

Of course, this would not be the first time that security agencies scared the hell out of politicians challenging establishment shibboleths. FBI Director J. Edgar Hoover famously kept extensive files on virtually all political players and would frequently leak embarrassing information to media friends whenever he felt it was necessary to bring dissenters back into the fold. Among many other political maneuvers, the CIA notoriously overstated Soviet capabilities in order to influence US Cold War policies, elections, and funding. And beyond any dispute, the intelligence and foreign policy communities constructed an argument of lies to support the 2003 invasion of Iraq. We are asked to trust them today? And the too-often uncritical, gullible media believes them today?

In the wake of contemporary revelations of torture protocols and comprehensive spying on everyone, apparently witting opinion makers have now found the intelligence community to be wholly reliable and trustworthy. They surrender their critical faculties to the professional liars and plotters. Even George Orwell would be aghast!

We assuredly have every reason to fear the policies of President Trump and his supporters.

But based on recent events, we equally have every reason to fear the brazen power and intrusion of clandestine security agencies and the unreliability of the fawning, supine corporate media.

Zoltan Zigedy

zoltanzigedy@gmail.com

Election Follies

Intercept reports via Extra! that CBS CEO Les Moonves is ecstatic over the revenues flowing into entertainment coffers from the primary campaigns (I've never seen anything like this, and this is going to be a very good year for us.”). Moonves, the entertainment mogul, understands better than most the triumph of entertainment over substance, posture over issues; CBS and the other mega-corporations peddle reality television and tabloid news. So it's not surprising to see him hail the current electoral season's antics as special (“Man, who would have expected the ride we're all having right now? ...Who would have thought that this circus would have come to town?”). For Moonves and his ilk the more inanity and sensationalism, the more money flows into corporate coffers (“You know, we love having all 16 Republican candidates throwing crap at each other. It's great. The more they spend, the better it is for us...”).

But lost to many in the explosion of vulgarity and outrageousness is the strong and strengthening connection between the dominance of money-- big money-- and the increasing irrelevance of bourgeois democracy. Every election cycle ups the ante-- from millions to billions-- in competitions contested around increasingly marginal issues and massive doses of insincerity. Bourgeois democracy is to genuine people's democracy as “reality” television shows Survivor and Duck Dynasty are to the reality of working peoples' lives. The campaigns are driven not by political import, but by competitive entertainment value.

Of course the losers in this charade are working people, the poor, and minorities. Their representatives and institutions are dominated by liberals largely content with a slightly more humane, less nasty capitalism, though, sadly, elected liberals seldom deliver even that for them.

The capitulation to this bankrupt ideology of the traditional support system for working class and poor people-- unions, religious institutions, the Democratic Party, ethnic organizations, etc.-- explains, in no small part, the desperate turn to Trump. Tepid, aloof liberalism breeds desperate options like the outlandish Trump when conditions deteriorate sharply and no radical options appear available.

The always sharp Doug Henwood offers the “...proof that Democrats, especially liberal Democrats, are the cheapest dates around-- throw them a few rhetorical bones, regardless of your record, and they'll be yours to take home and bed.” (from his new book, My Turn, as quoted in the NYRB, 4-7-16)

No candidates promote this cynical behavior more consistently than the Clintons and their “New” Democrat acolytes.

That the Democratic Party selection process has been fixed against party insurgency since the overturn of the McGovern party reforms and the McGovern defeat of 1972 should be obvious to everyone. Nonetheless, the party's operatives and loyalist zombies will answer that the system forgoes undesirable electoral landslides like the one occurring in 1972. What they don't say is that McGovern lost overwhelmingly because these same party stalwarts failed to campaign for McGovern and mounted a stealth campaign to give away the election rather than support a leftward swing. In fact, the system is designed to stifle any inner-party rising like the one currently mounted by Bernie Sanders.

The fact that the other party felt no similar need to stack the deck accounts for the current anti-Trump hysteria in the Republican Party.

Consider the deck-stacking that makes a Sanders' victory just short of impossible: 719 super delegates loom over the process, a group made up largely of reliably centrist party hacks ready and willing to block insurgencies. Should the hacks stand as a bloc, they make it possible for a preferred candidate to win roughly 40% of the contested delegates and still gain the nomination.

The Democratic Party establishment strengthens the super delegate bloc by favoring proportional apportionment in the primaries over winner-take-all. Without the possibility of taking all of the votes in a large state, an insurgent candidate loses the opportunity to counter the super delegate bloc with a boost from delegate-rich states. While proportional representation formally appears more democratic, it actually and paradoxically denies fair representation in the face of a loaded, undemocratic bloc of delegates. The road becomes much steeper.

The party fixers organize the primaries so that the generally more conservative states speak early and often in the primary season, favoring the perception of a more conservative electorate and forestalling any momentum gained by a left insurgent. Demonstrating this advantage, the party elite's favorite Hillary Clinton enjoyed early victories in Southern states that the Democratic Party has no chance of winning in a general election, but leaving the mistaken impression that she was more “electable.”

Amazingly, Democratic Party zealots and apologists deny that their party's primaries are structurally fixed, that they are effectively undemocratic.

But the voters seem to sense this fact: Pew Research Center telephone polls show that the election has drawn the highest political interest of the last five Presidential campaigns (85%). But the same respondents show the second lowest confidence (36%) in the primary system of elections dating back to 1996.

Sanders supporters, recognizing the stacked deck presented by the super delegate system, have been contacting the super delegates to sway their votes or, at least, convince them to stay neutral until the convention. The party hacks (largely staffers and elected officials) have reacted with indignation, as reported by The Wall Street Journal. How dare rank-and-file Democrats reach out directly to their party's leadership!

But counting on the gullibility of voters is not limited to Democratic Party operatives. Nobel laureate economist and darling of liberals and the soft left, Paul Krugman, added his magisterial voice to the stop-Bernie crowd. In a recent NYT column (4-8-16), he addresses a key tenet of Sanders' campaign: “Let's consider bank reform. The easy slogan is 'Break up the Banks'... But were big banks at the heart of the financial crisis and would breaking them up protect us from future crises?”

For most people, the answer would be a decided “yes.” But astonishingly, Krugman disagrees.

“Many analysts concluded years ago that the answers to both questions are no. Predatory lending was largely carried out by smaller, non-Wall Street institutions like Countrywide Financial; the crisis itself was centered not on big banks but on ‘shadow banks’ like Lehman Brothers that weren't necessarily that big. And the financial reform that Barack Obama signed in 2010 addressed these problems.”

Seldom will a reader encounter four sentences with more hair-splitting, nit-picking spin and deflection than in Krugman's disputation. Furthermore, it would be difficult to find a more misleading and flimsy apology for the big banks.

Rather than address the Krugman claims in detail, it is enough to attend to the AP news story (4-11-16) following only days after the NYT column. Writer Eric Tucker records the $5 billion settlement by Goldman Sachs against charges made by the Federal government. The settlement “holds Goldman Sachs accountable for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail.” Tucker notes that JP Morgan Chase settled similar charges for $13 billion, Bank of America $16.6 billion, Citibank $7 billion, and Morgan Stanley $3.2 billion. Tucker wisely attributes these negotiated settlements to big bank activity “kicking off the recession in late 2007...” Krugman preferred to blame the dead-- two banks that were “executed” for their bad behavior.

But that's where you are taken when you shill for Hillary Clinton.

As the electoral season winds down and moves inexorably towards a stage managed, more elite-satisfying finale, it might be a good moment to reflect upon the future. How do we turn these regular exercises into real contests? How do we escape the two-party trap with its relentless rightward drift? How do we inject class and race into the superficialities of the bourgeois political process? How do we create a political force that can contest on behalf of working people and their allies without surrendering independence to a ruling class party? How do we break the two-party monopoly?

If we continue to ignore these questions, we will find the left even further marginalized watching an unfolding “drama” with a predictable outcome.

Zoltan Zigedy

zoltanzigedy@gmail.com

After State Monopoly Capitalism?

Few review articles are as satisfying as the recent Paul Krugman examination of Robert Reich’s new book, Saving Capitalism: For the Many, Not the Few, in the New York Review of Books (December 17, 2015). To begin with, it was gratifying to find the stark candor behind the title of Reich’s book. “Saving capitalism” assuredly implies that capitalism is on the ropes—in danger of expiring—an implication that I both believe and welcome.

Robert Reich, Paul Krugman, and another colleague, Joseph Stiglitz share lofty accomplishments in academic economics and constitute the intellectual triumvirate informing the non-Marxist left in the US. Although they do not agree on everything, they share a core set of beliefs in the viability of capitalism and its need to reform. It is unusual to see Krugman and Reich suggesting such blatant urgency.

The felt urgency turns on the dramatic increase of economic inequality in major capitalist countries, particularly the US. Krugman stresses that inequality was an issue that Reich and he “were already taking seriously” twenty-five years ago. That may be, but I think it’s fair to say that neither was taking the growth of inequality seriously as a structural feature of capitalism until the important work of Thomas Piketty two years ago.

Krugman takes us on an intellectual journey, outlining in clear, non-technical terms how he, Reich, and other non-Marxist economists modified their understanding of the causes of inequality growth (not simply inequality, but its growth) over the last several decades. Where Krugman arrives is nothing short of amazing: he, no doubt unwittingly, describes an evolved capitalism resembling the capitalism that Marxists described well over half of a century ago.

Decades ago, liberal, mainstream economists believed that rising inequality in the US sprang from a poor match between technological requirements and workers’ skill sets—what Krugman calls “skill-based technological change” (SBTC). Education was seen as the great leveler, restoring wealth and income to those falling behind. But with the correlation between levels of education and compensation broken today, all reject SBTC as an adequate explanation and the key to arresting the growth of inequality. The growth of debt-laden college graduates working in call centers surely shatters that illusion. Or as Krugman smartly puts it: “…hedge fund managers and high school teachers have similar levels of formal training.”

But economists fell back on another technological example: robots and other productivity-enhancing devices replacing workers. But Krugman makes short shrift of this explanation:

…if we were experiencing a robot-driven technological revolution, why did productivity growth seem to be slowing, not accelerating?

…if it were getting easier to replace workers with machines, we should have seen a rise in business investment as corporations raced to take advantage of the new opportunities; we didn’t and in fact corporations have increasingly been parking their profits in banks or using them to buy back stocks.

Krugman thus dismisses a technological explanation for the growth of inequality.

Instead he urges that we consider the centerpiece of Reich’s study: monopoly power.

It is the concentration of economic power in the hands of fewer corporate players that accounts for growing economic inequality, according to Krugman and Reich: “…it’s obvious to the naked eye that our economy consists much more of monopolies and oligopolists than it does of the atomistic, price-taking competitors economists often envision.”

So why did it take Reich and Krugman so long to arrive at this juncture, a place that Lenin visited over a hundred years ago? Marxist writers like Paul Baran and Paul Sweezy devoted an entire influential book to monopoly capitalism nearly fifty years ago.

Krugman apologetically-- “an intellectual and a policy error”--attributes the mainstream economic neglect of monopoly to an influential paper written by Milton Friedman in 1953 that emphatically dismissed the effects of monopoly power on significant economic behavior.

Thus, non-Marxist economists and their political allies have scorned the concept of monopoly power until recently, a concept that Marxists have made a centerpiece of their analyses for most of the twentieth century. What is “obvious to the naked eye…” now informs the theories embraced by our left-leaning reformers.

But Krugman and Reich reveal another crucial linkage—that between economic power (monopoly power) and political power (“And this ties the issue of market power to political power”). They see monopoly power as sustained, protected, and expanded by political actors. At the same time, they see political actors as selected, nourished, and guided by monopoly power. This creates a troubling conundrum for those seeking to reform capitalism. Reich’s conclusion, in Krugman’s words:

Rising wealth at the top buys growing political influence via campaign contributions, lobbying, and the rewards of the revolving door. Political influence in turn is used to rewrite the rules of the game—antitrust laws, deregulation, changes in contract law, union-busting—in a way that reinforces income concentration. The result is a sort of spiral, a vicious circle of oligarchy.

Putting aside the clashing metaphors of circles and spirals, this statement reasonably captures the mechanism behind the socio-economic formation Marxists call State Monopoly Capitalism.  For Marxists, concentration necessarily begets monopoly capitalism, which subsequently completely fuses with the state, creating a mutually reinforcing synthesis. The state rules in the interest of monopoly capitalism while policing the economic terrain to maximize the viability and success of monopoly capital. Monopoly capital legitimizes the state and selects and imposes its overseers. Nothing demonstrates the intimacy more than the crisis bailouts of mega-corporations (“too big to fail”) and the increasing establishment of international governing bodies and trade agreements. Nothing demonstrates monopoly capital’s political dominance more than the decisive role of mega-corporate money in the two-party political process.

With the recognition of the vital link of monopoly capital and the state, Krugman and Reich reach an understanding on a parallel with those Marxist theorists who characterized the post-World War II era as one of state monopoly capitalism. While some features of that characterization were and are sometimes disputed (see, for example, Politico-Economic Problems of Capitalism, Y. Varga, 1968), most Marxists would enthusiastically welcome the two economists to their camp on this important issue.

But unlike Marxists, who see the overthrow of capitalism as the final answer to the wedding of monopoly power to political power, Krugman, Reich and their liberal and social democratic colleagues are left with the conundrum that follows inescapably from their conclusions about the source of inequality. The economic reforms that they envision to retard the growth of inequality are altogether blocked by the massive political power stacked against them. And that political power is stacked against reform because political power is the purchase of monopoly power. In other words, their findings confirm that monopoly has the political process locked up and that lock will ensure that monopoly will continue to grow along with inequality.

Krugman clearly recognizes this conundrum and casts serious doubts over Reich’s wistful glance back at the past and faith that a New Deal-like solution will magically emerge from the amorphous “populism” of candidates from both parties (he mentions Ted Cruz!).

Of course Krugman is right in dismissing Reich's nostalgic answer, but he can offer no alternative.

We conclude that the growth of inequality will only be stopped when the program of saving capitalism is put aside for a program that vigorously challenges the capitalist system. We hope that Krugman and Reich will draw the same conclusion in the future.

Zoltan Zigedy

zoltanzigedy@gmail.com

Stockman’s Rant

On the rare occasion, an article appears in the mainstream press that takes a deeper, more thoughtful view of human affairs, a document that gives a hint or glimpse of an unspoken truth beyond the pablum that occupies media puppets. Such an occasion was the publishing of The New York Times opinion piece entitled “State Wrecked: The Corruption of Capitalism in America” (3-31-2013) and authored by former Reaganite budget director, David Stockman.

Now Stockman is a renegade from corporate Republicanism; he actually believes in the ancient principles put forward by Adam Smith and other classical capitalist thinkers. While corporate Republicans cozy up to their party’s ugly, fascistic outliers, they always, in the end, make their bed with the rich and powerful. Stockman, on the other hand, actually embraces the mythical virtues of small business ownership and town hall democracy. In classical Marxist terms, he represents the ideology of the petite-bourgeoisie.

In the swamp occupied by Democratic and Republican politicos—the breeding ground for conventional politics—such views are unwelcome. Principled politics from the right or the left are alien equally to the snakes and the rats that prey on the cognitively weak and unwary.

Stockman is in a panic because he sees beyond the stock market euphoria and Pollyanna commentaries that have induced the mass delusions of the last several months. And what he sees angers him.

Stockman constructs an indictment, a list of charges against the current US economy: growth of output is woefully inadequate, jobs are both indecently scarce and low paying, the incomes and the net worth of “ordinary” citizens are dropping while poverty is on the rise. To anyone with a grip on reality, these are not signs of real economic recovery or systemic success. He notes that “we’ve had eight decades of increasingly frenetic fiscal and monetary policy activism intended to counter the cyclical bumps and grinds of the free market and its purported tendency to underproduce jobs and economic output. The toll has been heavy.” And yet imagine the toll if no remedial action had been taken! Surely, this unintended critique of eighty years of state-monopoly governance counts as a devastating charge against modern capitalism. If the era of state-monopoly capitalism can do no better than produce the sad state outlined by Stockman, it is decidedly a failure.

Stockman dares speak the truth so discomforting to liberals and social democrats: [World War II] “did far more to end the Depression than the New Deal did,” though he misleadingly praises the Eisenhower years for its “sound money and fiscal rectitude.” Perhaps he is too young to remember the massive increases in military spending, the ambitious interstate highway system, and the enormous growth of public spending brought on by the Cold War and the Sputnik panic. In any case, the dose of war socialism and the “frenetic… activism” of state-monopoly capitalism kept the capitalist ship afloat, though with fewer and fewer rewards for the majority of US citizens.

Stockman correctly sees that the remedies pursued by US state-monopoly capitalism directed more and more of the lubricant of public funds towards the financial sector over the last decades: the Greenspan “put,” the Long-Term Capital Management bailout, extended ultra-low interest rates, TARP, Fed purchases of bank junk, the support of federal bond prices, and support for equity markets. He calls this, not incorrectly, “Keynesianism—for the wealthy.”

And this is a salient point. It is commonplace to express the differences between Democratic and Republican policy makers since the Reagan era as pro- and anti-Keynesianism. But this is wrong. Ironically, it was only during the Clinton administration that growth of government spending was at all curtailed and today fiscal and monetary expansion remains a ready tool of the ruling class well after Reagan's departure. Certainly Keynesian pump priming has taken new and evolving forms over decades: direct job creation, military spending, massive space programs, infrastructure projects, public-private partnerships, repair of financial institutions, and stimulation of financial demand. While one or the other may be the favored priming tool of rulers at any given time, the similarities of the forms are far more important to recognize than their differences. State intervention in markets continues to be at the core of contemporary state-monopoly capitalism. Stockman sees this; others don't.

In Stockman's account, the enabler of pump priming in all of its forms has been debt. Borrowing or printing money is the means to continue the regimen of “frenetic fiscal and monetary policy activism.” But, in his view, this regimen is running out of steam. “The future is bleak.” And the “Fed has incited a global currency war (Japan just signed up, the Brazilians and Chinese are angry, and the German dominated euro zone is crumbling) that will soon overwhelm it...”

A bleak picture indeed, but one entrenched in reality.

So if modern capitalism-- in its state-monopoly form-- is a disaster, does that mean that Stockman advocates socialism?

Definitely not. Instead he holds out for a nostalgic return to the gold standard. Avoiding what he calls “end-state metastasis,” “would necessitate a sweeping divorce of the state and the market economy [the wholesale rejection of state-monopoly capitalism! ZZ]. It would require a renunciation of crony capitalism and its first cousin: Keynesian economics in all its forms. The state would have to get out of the business of imperial hubris, economic uplift and social insurance and shift its focus to managing and financing an effective, affordable, means-tested safety net.”

 In short, Stockman advocates going back to a conjured idyllic time before state-monopoly capitalism, a time imagined by the petite-bourgeoisie as one of healthy competition, entrepreneurship, and opportunity. For him, the golden age of capitalism would be the pre-depression era of small town USA, family farms, vibrant and expansive industry and foreign policy isolationism. Of course any pretense of continuity or viability of that era was dashed by the Great Depression. In fact, the policies decried by Stockman (and associated by Marxists with state-monopoly capitalism) served as a temporary backstop to the further contraction of the capitalist system produced by that fantastic era.

Stockman may wish for a return to an earlier time just as others may wish to time travel back to the court of Louis XIV, but it isn’t going to happen. Capitalism, like any organism, has its own life span, its own history. Saved from a critical illness, capitalism passed from its laissez faire period to a period of intensifying state intervention and management. Today, that phase of capitalism’s development—state-monopoly capitalism-- is also threatened with a critical illness. I would not be so bold as to predict capitalism’s imminent death, but certainly it will not be revived by reliving its past as Stockman fantasizes.

At a time when liberals and conservatives argue pathetically over the right mix of austerity and stimulus, Stockman is a welcome mainstream herald of the profound crisis pummeling global capitalism. His anxiety and anger reflect a deeper understanding of the contradictions of the moment. His rant, spiked with sarcasm and vitriol, stands in stark relief against the smugness of the lap dog punditry.

Krugman Strides into the Ring

 The Stockman screed generated a storm of opposition. Liberals and the fuzzy, mushy left were particularly affronted. Unlike Stockman, they would like to only turn the clock back to the early seventies, another supposedly “idyllic” time when business unionism was generating satisfactory contracts, the “Great Society” programs were blooming, and war in Vietnam was winding down (at least for US combatants). The fruits of the civil rights struggles and urban uprisings were realized in the creation of programs, bureaucracies, and other buffering agents against domestic insurgency. Jobs servicing the Great Society generated a stratum of social liberals who matured into the base of a social democratic left inside and outside of the Democratic Party. For them, the world turned evil and foreboding with the Reagan “revolution,” a movement they characterize as neo-liberalism.

In the dust-up with Stockman, Paul Krugman, columnist for The New York Times, assumed the role of savior and protector of their interests and perspective. Krugman, the darling of the “respectable” left, attacked Stockman for his audacious critique of the track record of state intervention in the capitalist economy. Anyone who follows Krugman knows that his response to the crisis is a simple solution: spend more public funds and spend freely until growth perks up. The soft left finds this an agreeable solution because it promises to save capitalism (and forestall socialism!) while creating a potential material basis for pet welfare programs. It is simply the fantasy of another New Deal. And never mind that Krugman doesn’t share the fantasy!

Apparently, the Stockman-Krugman battle merited a major media appearance before the Sunday morning gasbags, the big stage for what our media passes off as intellectual fare. While I lacked the stomach to watch the sparring between the two, refereed by the likes of Huffington, van Sustern, and Will, I would commend an entertaining account of the match by Mike Whitney in Counterpunch (Krugman vs. Stockman, April 11, 2013).

The merit of Stockman’s account is that he is righteously indignant with an economic system that has failed the great majority of people and inflicted great pain and uncertainty. He goes beyond the dominant rhetoric of “we are all in this together” and “we are all at fault” to find systemic rot in capitalism. He correctly places the blame for this at the doorstep of state-monopoly capitalism, the stage of capitalism evolved to rescue the system from the accumulated contradictions of laissez faire capitalism, contradictions brought to light by the Great Depression. But he cannot go where logic would take him. He cannot entertain options that would transcend capitalism. Thus, he is resigned to a pathetic nostalgia for a bygone era where the contradictions of capitalism did not appear in such sharp focus. While he stretches the bounds of mainstream thinking, he can not see beyond markets and private ownership; he cannot see socialism.

Krugman and most of the US left are thoroughly conventional in their thinking—they offer a more “enlightened” management of the economic system and a cheerful capitalism with a human face. They would be hard pressed to point to a period when capitalism bore a human face, however. Nonetheless, they are undaunted before a rising tide of interest in the socialist option. They are resolute in their fear and rejection of real socialism.

Pressured by five years of relentless economic crisis and increasing signs of favor towards socialism, especially with the young, our feckless left offers a cold plate of empty slogans of localism, anti-consumerism, platitudinous “participatory” democracy, cooperatives, and a vacuous “new” economy. As if these are answers to the $17 trillion dollar US multinational, monopoly capital behemoth. In truth, these are simply evasions and dissemblance. 

If Stockman is right and capitalism is “state-wrecked,” then its time to leave the wreckage and turn to socialism. 

Zoltan Zigedy

zoltanzigedy@gmail.com