Will Obama Save America From Capitalism?

Michael Moore’s new film Capitalism: A Love Story looked and sounded a lot like a huge conspiracy theory.  Too bad all of it was true.

Missing this time around were the legions of corporate shills employed to discredit this film -- much like they did for Moore’s previous film about the healthcare industry, Sicko.  Maybe they just gave up.  There comes a time when no amount of spin will cover up the truth.  You can sprinkle sugar on a turd and call it candy, but in that moment of reckoning, the truth becomes self-evident.

American-style capitalism is the system that gives you airline pilots buying groceries with food stamps; sheriffs and robber barons throwing families out of their homes and into the street; corporations taking out insurance policies on their own employees; corporations slashing jobs to earn record profits; college loans the size of mortgages, and people dying because they have a pre-existing condition, or can’t afford to get sick.  

For a number of years, the boosters, the sales representatives, the pimps and prostitutes of this deeply flawed system did a great job of convincing the rest of us that no one else in the world had it better.  This is the land of opportunity, they told us.  The reality is that for all of its rhetoric, America is more unequal in terms of wealth and income than other industrial democracies.  Far more economic mobility is found in those “socialist” European nations that conservatives are so loathe to emulate.

America is a nation of sharecroppers.  Not in the pull-yourself-up-by-the-bootstraps sort of way, either.  The few at the top now have more than ever because they stole it from the many, typically by highway robbery.  And every day, they continue to dupe the many into giving more.  Many at the bottom actually believe that they will emerge at the top someday, so they don’t make a fuss.  Capitalism, American-style, is that great big Ponzi scheme.  And apparently, we was had.  This is what they do, unfettered, unaccountable and unconcerned.

Elizabeth Warren, chair of the Congressional Oversight Committee that is investigating the $700 billion bank bailout giveaway, a.k.a., Troubled Assets Relief Program (TARP), told the Washington Post that “the middle class is under terrific assault.”  Middle class families are actually earning about $800 less than a generation ago.  This reality precipitated the need to have two wage earners in each family, and to borrow more and save less just to stay above water.  But people are drowning by the millions.

Meanwhile, the economic puppeteers seem to gloat over the fact that they are stealing an ever-increasing part of the economic pie at the expense of the multitude.  On March 5, 2006, Citibank -- a TARP welfare recipient of late -- issued a memo to investors entitled Revisiting Plutonomy: The Rich Getting Richer.  Plutnomy is defined as “An economy that is driven by or that disproportionately benefits wealthy people, or one where the creation of wealth is the principal goal.”  The Citibank memo proclaimed that:

The latest Survey of Consumer Finances, for 2004, has been released by the Federal Reserve. It shows the rich continue to account for a disproportionately large share of income and wealth in the US economy: the richest 10% of Americans account for 43% of income, and 57% of net worth. The net worth to income ratio for the richest 10% of Americans increased from 7.4x in 2001, to 8.4x in the 2004 survey. The rich are in great shape, financially.

Perhaps the most invidious part of the report warns that electoral democracy threatens to disrupt the wonderful party the rich are having:

Our whole plutonomy thesis is based on the idea that the rich will keep getting richer. This thesis is not without its risks. For example, a policy error leading to asset deflation, would likely damage plutonomy. Furthermore, the rising wealth gap between the rich and poor will probably at some point lead to a political backlash. Whilst the rich are getting a greater share of the wealth, and the poor a lesser share, political enfranchisement remains as was -- one person, one vote (in the plutonomies). At some point it is likely that labor will fight back against the rising profit share of the rich and there will be a political backlash against the rising wealth of the rich. This could be felt through higher taxation (on the rich or indirectly though higher corporate taxes/regulation) or through trying to protect indigenous laborers, in a push-back on globalization -- either anti-immigration, or protectionism. We don’t see this happening yet, though there are signs of rising political tensions. However we are keeping a close eye on developments.

Capitalism is as capitalism does.  Maximization of profit above all else -- to the exclusion of ethics, morality and the public good -- is the mark of a vulture society.  And this arrogant, coldhearted endeavor has been a bipartisan effort.  Beginning with Reagan, Republican administrations have championed drastic cuts to the social safety net and massive tax cuts for the wealthiest Americans.  Meanwhile, the Clinton years ushered in deregulation of the financial markets, and an end to welfare as we know it.  Corporations have far more power than a free society can tolerate.  And both major political parties are the water carriers of this plutonomy.  They are the field hands for the financial interests that currently run the show and drive public policy -- and are driving this nation into the ground.

The U.S. economy is worse than at any time since the Great Depression.  In fact, as Simon Johnson of MIT recently told Bill Moyers, we are currently experiencing elements of a depression. 

But in this jobless recovery, where there is one job for every six job seekers, Wall Street is doing well because its fate is not dependent upon the employment of everyday working people.  Rather, its fate is dependent upon government handouts, paper shuffling and the exotic hustling instruments to which they have grown accustomed. 

But we have been here before.  Eighty years ago, between October 24th and the 29th of 1929, the stock market collapsed.  It was a testament to an economic system run amok, unregulated and unrestrained, for the benefit of concentrated, monopolistic power.  President Franklin D. Roosevelt ushered in the New Deal -- a series of economic programs and initiatives based on relief to farmers and the unemployed, reform of business, banking and finance, and economic recovery.  The New Deal meant public works and infrastructure programs, economic planning by the government, social security and labor standards that favored union growth.  There was a sense that workers, consumers and farmers should have influence with the government, not just corporations. 

Today -- with the erosion of the New Deal legacy creating the huge mess that is early twenty-first-century America -- President Obama has a golden opportunity to make things right.  But will his administration step up to the plate and bring in the necessary reforms?  Just as F.D.R. saved capitalism from itself, will Obama save America from capitalism?  Or is the game already too fixed?

These times scream out for a “new” New Deal.  Jobs are sorely needed by millions, but they will not appear out of thin air.  The foreclosed and unemployed middle class are joining the ranks of the poor and the homeless.  The national infrastructure is crumbling.  And the cartels and monopolies of old have returned.  A paltry and ineffectual stimulus package, accompanied by some tweaking at the edges of a carnivorous, predatory system, will not make a difference.

If the Obama administration wants to be a truly transformational force in American history, rather than a slightly-better-than-average, one-term presidency with good intentions, it will give America the "new" New Deal.  The Obama administration will find the intestinal fortitude to take on the banking system, and divest itself of Wall Street enablers and Goldman Sachs cronies.  It will cast out such underwhelming individuals as Timothy Geithner and Larry Summers, and seek the advice of Nobel laureates such as Joseph Stiglitz of Columbia and Paul Krugman of Princeton.  It will go beyond its laudable plans for a consumer protection agency, and either reform the current economic system, or replace it entirely with one that reduces the status of corporations, and brings economic fairness and justice to the people.

In other words, President Obama will do what the people voted for in November.

David A. Love is an Editorial Board member of BlackCommentator.com, and a contributor to the Progressive Media Project and theGrio. He is a writer and human rights advocate based in Philadelphia, and a graduate of Harvard College and the University of Pennsylvania Law School. His blog is davidalove.com.

Follow David A. Love on Twitter: www.twitter.com/davidalove

Comments

[newbridge]

A very interesting post. Out here in California, things are pretty bleak with over 12% unemployment. Our Governor is at 20% popularity and the legislature is even less. I hear people in grocery stores talking about what must be done to change this situation.

Mr. Love, you hit the nail on the head. It is not capitalism on trial it is American capitalism on trial. Our system no longer works for its citizenry, and it is time we banded together to bring our true strengths again those who want to destroy our system.

[Lu-Miri]

Mr. Love your article is one of the best I have read .

Here's my contribution :

The owner of a factory [ any business can be a sort of factory ]

has jobs for offer . The workers get paid a low salary .. so profits are higher for the Factory ..

The factory owner to keep the workers closer to the factory ..opens a store..so the workers can purchase

food, clothes and almost everything they need...at the owners store.

..the workers buy there ... The factory owner makes more profit from the worker ...


When the work pay is not enough to keep buying..... The factory owner starts to give you credit cards ...
..
Then the worker has to pay interest for those purchases .....

back to the factory owners and that makes the owners richer still .


Then the owners bring to the store new expensive articles , and advertises everywhere they can .....


that you can't live without those articles ... ..

The worker then buys more , and more ..using credit ,,and paying more and higher interest.


When the worker reaches his max capacity of spending ...he'll make his wife get a job ..and work at the

factory too.. The cycle grows on and on.... until we reach the present situation ..

.. Conclusion : The Present System makes the worker poorer , and the factory owners richer, and richer ..

Then they open up Banks and the cycle goes on and on.... ....

[JShep]

Don't diss capitalism. It has been the driver that made the US the greatest economy in the world. Even US citizens at the poverty level have as good a standard of living as the average EU citizen. Yes, there are executives and even whole corporations that take advantage of the system, but they are the exceptions and not the rule. For every corporate horror story, there are multiple successes; it's just that the successes don't make the news that sells newspapers. There definitely needs to be better regulation in some areas, but not a wholesale overhaul of our basic economic system. Capitalism has proven to be the best economic system in the world. BTW, unlike the stimulus bill, the TARP funds to Wall Street were loans with interest, not give aways.

[David A. Love - Huffpost Blogger]

JShep thanks for your comment and for making some good points. I guess my issue is not with capitalism per se, but with the system that America has. The rest of the industrialized world has capitalism in one form or another, yet they have far more economic equality. America has a greater gap between rich and poor than any of the European nations and Japan, and it tells me that our system is not serving most people well. A stronger regulatory regime for big business and wall Street, and a stronger social safety net would help I think. Real health care reform would do a lot of good, too.

[Angiefranci]

Don't you know talking 'bout a revolution sounds like a whisper? Tracy Chapman sang for Obama two nights ago at the DNC.
She wrote that song over twenty years ago--the whisper is getting louder.

[quiviran]

The question is, what will we the people do when the rich discover they don't need us any more? They can get their goods manufactured overseas, have their food grown by conveniently illegal aliens with no rights and their personal needs tended to by this same undemanding group? We the people will just be in the way, with the risk to the rich that we will vote the wrong way. What to do, what to do. Maybe a nice destructive war, overseas of course. But wait, unemployed, homeless people can't register to vote. Problem solved.

[WorkingClass]

The rich already know perfectly well that they don't need us. What is not so well known is we don't need them.

[quiviran]

We may know it, but we have yet to act upon it. Probably not the guillotine this time, but maybe some representation with our taxation?

[mcmutter]

Capitalism running amuck is ruining the USA.

[S Andersen]

A standing ovation to David A. Love for, with elegant decisiveness, laying bare the cancer hiding beneath the skin of our republic and for showing us precisely where the scalpel need be applied.

[David A. Love - Huffpost Blogger]

Thank you for reading and for listening!

[Nickesq]

The financial sector has taken over the economy and, according to Elliot Spitzer, former sheriff of Wall Street, Wall Street controls the Treasury Department. Such a great amount of money has been squeezed out of the middle and working classes to stream directly to the top of the economic ladder where the weathy can control the political decision makers with the result that they and their friends become richer and more powerful. Couple this with the consolidation of industry and services, including banks, we have quite a task set out for us.

[iridium53]

John Stuart Mill wrote, “A person may cause evil to others not only by his actions but by his inaction, and in either case he is justly accountable to them for the injury.”

As Shakespeare wrote, "Action is eloquence."

[austinro]

The average salary for a commercial pilot is around 75,000 depending on experience, if that is food stamp wages sign me up. Thanks capitalism for the invention for the invention of the Radio, Air Conditioning, Airplanes, Computers etc. I guess the system that has the best cancer survival rates and is the best in the world in saving premature babies ought to be chastised. If we are sharecropping then what is the rest of the world doing, forced bondage? When the poorest of your poor have cell phones and T.V's you had better put things in perspective. Yes the United States has unequal distribution of wealth, it also has unequal distribution of taxes, unequal distribution of risk, and unequal distribution of hard work. Rage on capitalism is misplaced, but its easy to jump on the bandwagon and get in some cheap shots/

[S Andersen]

I do not believe that either David Love or many of the posters here are claiming that capitalism is wholly evil. Claims of that kind commit the baby-in-th­e-bath-wat­er fallacy. The same is true of over-reaching claims against socialism.

But it is not the benefits of capitalism that are on trial here. It is the failures of the system that demand our scrutiny and call upon us to seek redress of the grievances it brings to the lives of far too many human souls.

To turn a blind eye to these faults--to seek to block the healing of the system's flaws--is to condemn humanity to unnecessary misery and to invite revolution to replace peaceful evolution.

[TheBaffler]

Obama is handing the capitalists America on a silver platter, saying, "Rip into the carcass some more."

He is a trenchant believer in Reagan's failed trickle-down philosophy, not a reformer.

[commonsensor]

I would not hold my breath on this one. It's pretty clear where Obama stands on the Wall Street issue. In fact, it was clear BEFORE the election but considering the options, I think most of us took the huge leap of faith and held onto HOPE!

Nine months later - do I still have Hope?

Nope!

[josephXY]

It's about time Americans and Russians begin to share their real life experiences. The differences
that once existed, before and after the 1989, are pretty much gone. They can share experiences now.

[pajoly]

Early last November, so many of us felt the dream was real -- America was going to be saved! We saw the light at the end of the tunnel drawing near. One year later, we lay more bloodied in the gutters or whistling as we step over the bodies. One year later we are fully awake to the growing nightmare. We see the light at the end of the tunnel, but now we know it is a runaway train and we are affixed to the track.

[eciaccio]

Don't hold your breath.

Obama, as is every major-party candidate allowed to get as far as he, is a dedicated corporatist doing the bidding of those who really run (ruin) our country.

Don't expect a cog in the wheel of the system to change the system.

[David A. Love - Huffpost Blogger]

FDR told his base to make him do the things they wanted. Maybe the progressives will be forced to do the same thing today.