The Uncomfortable Truth about Iran: How the US Lost a World

 by Nomad

Amid all the advertisements for gas-guzzling cars, there is an interesting editorial from LIFE magazine, dated May 21, 1951. The title:

"How to Lose a World: Our Government's Deplorable Performance in Iran Has Contributed To a Great Disaster."

At that time, because of its location and its petroleum, Iran was caught between two great millstones of conflicting ideologies, Capitalism and Communism.

Britain, heavily reliant on Iranian oil, had directly controlled the oil monopoly through the British Anglo-Iranian Oil company (later to become BP) but now, suddenly the rules of the game had changed.The author neatly summarized the lead-up to the foreign policy disaster like this:

LIFE Magazine Examines Wall Street and Banking in 1946

by Nomad

In light of the announcement by JP Morgan CEO Jamie Dimon that his firm has lost $2 billion investing in derivatives, I thought I'd take this opportunity to re-post this article, originally published in my general blog, Nomadic View.

The most amazing thing about a casual look through the back pages of LIFE magazine is how relevant the articles can sometimes be. For example, take the January 7 1946 issue about Wall street "the Citadel to US Capitalism."

One of the side articles details the more conservative approach to banking following the world war and its origins. The story provides quite an education in the varied aspects of banking.

On Wall Street there are two principal kinds of bankers: Commercial bankers and investment bankers. The commercial banks, such as Chase and National City, make loans, accept deposits, finance foreign credits, buy government and state bonds. They also usually have a trust department which executes wills and acts as trustee. The investment bankers, such as Morgan Stanley and Kuhn, Loeb underwrite and distribute new security issues for corporations. They also have a brokerage department which buys and sells securities.

The Banking Act of 1933 made it illegal for one firm to act both as a commercial act and investment banking house. Until then, the two were often combined. In his triumphant days, J.P. Morgan, a banker, merged railroads and steel companies into nationwide corporations. In the 1920s, Wall Street made idols of men like Charlie Mitchell, chairman of National City Bank, who was also the greatest securities salesman in history and an adroit market manipulator. The 1929 crash exposed the dangers of these dual functions, With one hand, banks were taking deposits. With the other, they were financing new securities. When the business they were promoting failed, the depositors, security holder and the bank itself were in trouble.

Today the very nature of Wall street bankers has changed. In place of the speculators and market manipulator there are sound, deliberate investors who by choice as well as by law are more interested in government bonds than in a flier in market.

The Banking Act of 1933, also known as the Glass-Steagall Act, introduced banking reform and safeguards on deposits following the crash of 1929. Many of the provisions were also designed to reduce the amount of wild market speculation which was thought to be contributing factor to the collapse.

The Glass-Steagall Act passed after an ambitious former New York prosecutor, collected enough popular support for stronger regulation by bringing bank officials before the Senate Banking and Currency Committee to answer for the role in the crash.

In addition to the Banking Act of 1933, the Bank Holding Company Act was passed in 1956 and extended the restrictions on banks. According to this, bank holding companies owning two or more banks could no longer engage in non-banking activity and could not buy banks in another state.

Altogether, an impressive bit of banking regulation. The Banking Act of 1933 reduced the amount of free-wheeling risk-taking- with depositor's assets, I mean. And the Bank Holding Company Act clearly defined the role of banks and kept bank holding companies from becoming "too big to fail."

And you know something? It actually worked. Nations, which adopted such regulations and stuck to them when the rest of the world began to de-regulate, such as China and Turkey, have emerged from the latest crash, jolted but not devastated.

Another Fine Mess

So what happened? How did we come back in a full circle? Through a careful whittling away of the legislation through intensive and sustained lobbying by special interest groups, starting as far back as 1980 with the Depository Institutions Deregulation and Monetary Control Act.

This allowed banks to merge. Subsequent decisions by the Federal Reserve Board in 1986 and 1987, after the Board heard proposals from Citicorp, J.P. Morgan and Bankers Trust advocating the loosening of Glass-Steagall restrictions, further undermined the regulatory effects of the the Banking Act of 1933. 
For a full account of the various steps, see HERE. (The link is very enlightening)

The record shows a Federal Reserve Board, at the very least, flawed by its willingness to accept the demands of institutions to circumvent the laws were designed to regulate and control precisely those sectors.

Finally- perhaps inevitably- the Banking Act of 1933 was repealed in 1999 by the Gramm-Leach-Bliley Act. The legislation was signed into law by President Bill Clinton on November 12, 1999. (The role that Senator Phil Gramm played in this dismantling of regulatory protection has been cover extensively in another post.)
From there, it was a slow predictable march to the sorry mess of 2009.

Greed is Good?

What on earth could have persuaded, sensible people with all the wisdom a chastising experience as the Great Depression, to lift restrictions and to deregulate and repeal? The only answer seems to be the temptation of tremendous profits that de-regulation allowed financial institutions. In short, greed.

Much to their credit, Republican Senator McCain of Arizona and Democratic Senator Cantwell of Washington made a proposal for a return to the Glass-Steagall Act, specifically the distinction between commercial and investment banking. Ironically this regulation rollback to the 1930s is being called "Obama's banking reform", making it sound untested and potentially risky when a stronger case of risk by deregulation of the banking industry in the 1980s could- and should- have been made at that time.

Despite the crisis of 2008, banks, which have continued to rake in vast profits, have been strongly opposed to a return to the restrains of the Banking Act of 1933. Not surprising, is it?

As The New York Times reports:

The outlines of the Volcker Rule, one of the flagship provisions of the sweeping financial regulatory overhaul passed last year, will begin to take shape this week as regulators propose rules to limit the ability of most banks and Wall Street firms to use their own funds to buy and sell stocks, corporate bonds and derivatives.

For more information about the Volcker Rule, NYT gives a concise explanation of the reform.  
Wall Street will simply have to choose between being a source of dependable investment or a free-wheeling casino, but, it is a shame that we have to learn these lessons twice.

Update:

Mitt Romney has gone on record as wanting to repeal much of the reform legislation that President Obama and Congress enacted in light of the financial crisis of 2008. The Boston Globe reported in August of 2011:

Republican presidential candidate Mitt Romney has sharpened his critique of the financial regulatory overhaul signed by President Obama.

In response to the financial meltdown, Obama and Congress passed the Dodd-Frank bill, Wall Street reform legislation that enacted consumer protections, reformed some derivatives trading, and imposed new regulations on mortgage lenders and hedge funds.

In the past, Romney has criticized the bill for creating uncertainty in the financial industry and causing bankers and the financial service employees to pull back.

The lobbyist for the banking industry worked hard at watering down the legislation in any case and as a result, left many loopholes for financial institution to skate around regulations and oversight. 

From TalkingPointsMemo:

Dimon claims that the investment in question wouldn’t have violated the rule had it been in effect — he says the bets JPM made were meant to hedge against potential losses in other investments. But finance experts have cast doubt on that claim, and Dimon himself admitted that the incident will provide ammunition for the Volcker Rule supporters.

Politically, the latest financial disaster could create more doubt in the minds of the voters that the Republicans (in the form of Mitt Romney) is a little too eager to win the support of Big Banks and Wall Street and are setting up a repeat of the 2008 meltdown of the economy. 

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Related articles

• Volcker Rule To Restrict Banks' Proprietary Trading Contains Loopholes, Experts Say (huffingtonpost.com)
• Volcker Rule gets FDIC approval (money.cnn.com)
• AND NOW WE KNOW THE TRUTH ABOUT WALL STREET: It's Just Kids Playing With Dynamite (businessinsider.com)
• How J.P. Morgan Chase Has Made Case For Breaking Up Big Banks And Resurrecting Glass-Steagall - OpEd (eurasiareview.com)
• JP Morgan $2 billion loss stirs memories of 2008 crisis (csmonitor.com)
• Banks' Glass-Steagall Walls Quietly Rebuilt (Update 1) (jhaines6.wordpress.com)
• Wall Street, Romney, and Obama (crooksandliars.com)
• One Last Chance To Get Wall Street Reform Right (tpmdc.talkingpointsmemo.com)

A Nemesis in Washington: How The Evangelists in Reagan’s Administration Undermined the War on AIDS 2/2

by Nomad

Link to Part One
Not of Facts, But of Values

Elizabeth Taylor thanking Reagan for his speech

It was not until May 31, 1987, that Ronald Reagan made his first major speech on AIDS and even then he did not mention the word “gay.” It was on eve of the Third International Conference on AIDS in Washington. He was the invited by Elizabeth Taylor to speak at a fundraiser for the American Foundation for AIDS Research. It was a carefully-worded script in other ways too, aimed at pleasing both his immediate audience as well as his conservative base. 

Corporations can help get the information out, so can community and religious groups, and of course so can the schools, with guidance from the parents and with the commitment, I hope, that AIDS education or any aspect of sex education will not be value-neutral. A dean of St. Paul's Cathedral in London once said: "The aim of education is the knowledge not of facts, but of values."

As Surgeon General Koop has pointed out, if children are taught their own worth, we can expect them to treat themselves and others with greater respect. And wherever you have self-respect and mutual respect, you don't have drug abuse and sexual promiscuity, which of course are the two major causes of AIDS. Nancy, too, has found from her work that self-esteem is the best defense against drug abuse.

Had they been consulted, scientists would have told Reagan that the major cause of AIDS was a virus, not a lack of self-esteem.

A Nemesis in Washington: How The Evangelists in Reagan’s Administration Undermined the War on AIDS 1/2

by Nomad

Association and Contact

On July 5, 1981, less than six months after Ronald Reagan took office, an article appeared in the Morbidity and Mortality Weekly Report (MMWR). The newsletter is a weekly report distributed by the CDC written by University of California-Los Angeles Dr. Michael Gottlieb and Centers for Disease Control (CDC) Dr. Wayne Shandera. In it, an article detailed the unusual cases of a new type of pneumonia which specifically seem to target gay males. 

According to the report , the cases suggested “some association between some aspect of a homosexual lifestyle or disease acquired through sexual contact.” The article was to mark the first public announcement of the disease which became known as AIDS and later HIV infection.

Little Foxes: News Corps' Silent Partner - Prince Al-Waleed bin Talal - Part 1

Royal Shadow

Following the World Trade Center attacks, when Prince Al-Waleed bin Talal offered Mayor Rudy Giuliani a check for $10million as donation towards disaster relief, the mayor initially accepted and then refused it.

According to reports, the reason for the mayor’s declining the donation was that the prince had suggested that the United States "must address some of the issues that led to such a criminal attack," and "re-examine its policies in the Middle East." With some indignation, Giuliani stated that "There is no moral equivalent for this [terrorist] act. There is no justification for it. The people who did it lost any right to ask for justification for it when they slaughtered 4,000 or 5,000 innocent people." 

Perhaps it was predictable that Fox News should have supported the mayor's decision. On October 11, 2001 the Fox News' Special Report, Fox News contributor Mara Liasson said that Al-Waleed's statement was "completely false," "outrageous," and that "the mayor did the right thing and refused the money."

Betraying Our Values Abroad: How Western Corporations in China Lobbied Against Workers' Rights

by Nomad

Western corporations and economists regularly promote the idea that trade with China has had, and will have, a civilizing effect on the institutions there. As adjunct scholar Stuart Anderson writes

“U.S. corporations act as a liberalizing force, helping to strengthen the private sector, establishing alternative centers of power, and creating subtle but important pressures for democratic reforms. They also tend to raise wages and labor standards in the countries in which they operate.”

 Regardless of the merits of the statement, Anderson as a former director at the Cato Institute is hardly an unbiased scholar. The Cato Institute is a libertarian think tank headquartered in Washington, D.C. by Charles Koch, chairman of the board and chief executive officer of the oil conglomerate Koch Industries, Inc.

The Secret Problem with Jeb: Why Another Bush is not the Solution 2/2

by Nomad

In the previous post we examined the kind assistance Jeb Bush, gave a Cuban exile turned business and how that led to one of the largest Medicare frauds in American history. In this post, we will look into some other possible reasons why Jeb Bush (and his father) would have been so eager to help Recarey and his friends.

The Exiled Mobster
With Jeb Bush's help in overcoming certain Medicare regulations, Cuban businessman and Bush business partner Miguel Recarey was able to amass a fortune in a very short time. 

In exchange, he provided free and no-questions medical care to Nicaraguan right wing rebels, otherwise known as Contras. When the scheme collapsed, Bush and high level Bush administration officials successfully helped Recarey avoid prosecution and even had the kindness to give him a bonus for his services in the form of a hefty IRS check.

But Bush and company were not the only people involved in Recarey Medicare fraud. If he had friends in high places, Recarey also has important contact in the lower realms too. Back in 1988, Pulitzer Prize winning journalist Sydney P. Freedberg of the Wall Street Journal, wrote of Miguel Recarey’s longstanding connection with Florida underworld boss Santo Traffincante, Jr. It was alleged by Miguel Recarey's associates that the medical company IMC was, in fact, financed by the Miami mafia don Trafficante.

Sanity Break: Sinnnerman Remix

For a small sanity break:

Normally I don't like remixes. I mean, half the time remixes are made by people with half  the talent of the original and it depresses me to think that a whole generation is going to listen to the remix version and think that this is the original. (Look what Vanilla Ice did to Bowie/Queen's Under Pressure) 

However, the clip below, (taken from the great Nina Simone's Sinnerman has taken a hypnotic and powerful song - without ruining it- and used the best part without spoiling the effects. Added to that, some bright young thing has taken a superior video and combined them. (Perhaps this can be a tribute to Andrew Breitbart who died this week.) 

I hope you like it as much as I did. 

And here's a remix of the video of the remix of the audio. http://www.yooouuutuuube.com/m/?yt=0hcEiEyylEA
Unfortunately there's no way to embed the video (as far as I could see) but it's perfectly safe. By the way, every time you watch it, it seems different so I suppose the scenes are selected randomly.

_______________

So what do you think? Thumbs up or thumbs down?

The Secret Problem with Jeb: Why Another Bush is not the Solution 1/2

by Nomad

W

ith her fabulous dreams of stardom, Republican Party’s failed vice-presidential candidate in 2008 and Fox New analyst Sarah Palin might relish the notion of a brokered convention but few intelligent elites in the GOP look forward to a potentially acrimonious knock-down drag-out fight in Tampa.

Many voters might have hoped that the primaries would clear the murky fog and one candidate would emerge with an overriding support. If anything, quite the opposite has occurred. The debates, endless and inconclusive, have also failed to convince voters. 

The one solution, tentatively broached by Palin and her Fox News cohorts, is a brokered convention- a negotiated settlement with a lot of bargaining in the back rooms, a lot of haggling, back-slapping and back-stabbing and endless deal-making, all for a suitable alternative to any of the present candidates. It has happened before and the nominees have actually even won using the tactic. 
 It is, however, a long shot and with the uncompromising attitude of the Tea Party and the Religious Right, who on earth could ever be deemed satisfactory? Since political ideology has become all-important, the days of cloistered backroom deal-making may be gone forever.

As Palin (the rogue) well knows, should disunity in the party leak out to the media, a brokered convention could destroy any chance for the party, with everybody walking away dissatisfied and disenfranchised. Think of voter turn-out and get used to hearing the phrase: Historic lows.

The Far Right vs. The Christian Ethic: Who is my Neighbor?

by Nomad

A

lthough I wouldn't classify myself as a devout Christian, I have been raised as one and am familiar, at least, with the philosophy of the teachings. One of my favorite stories from the New Testament is the one known as  “The Good Samaritan.” 

Most people think of this story as a call to charity for those less fortunate and in this narrow sense, I suppose that is true. However, there's a lot more to it than just being a "do-gooder" or being politically correct and or even about doing a favor for somebody when he is down on his luck. It's not about being a "bleeding heart."

In the Next Election....

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We welcome your comments and opinions.

The 11 Reasons Why Ronald Reagan is Un-Electable in 2012

The next time you find yourself cornered by a gaggle of Fox News-loving Right-Wing radicals, you might try this fun exercise. With a rather blankly innocent look on your face (practice beforehand in a mirror)- ask these any one or all of these questions:

Would you ever vote for a Republican candidate that..  had been a Socialism-loving Democrat for 13 years before becoming a Republican? had once been a member of a Far Left wing organization that was on an FBI watch list for being Communistic? had been a union leader- for one of the largest unions in the country? later became an FBI informant, secretly reporting on his former friends? became involved with corrupt mob-connected unions? had signed into law a sweeping anti-gun bill for his state?  had signed into the largest single tax increase in the history of any state in the US- $1 billion in one step?  brought both moderates and liberals into his campaign and after victory gave them top jobs in his administration?  had, as governor, signed legislation that established collective bargaining for all the state’s municipal and country employees? had once declared that civil right legislation must be enforced “ at the point of a bayonet if necessary"? supported Affirmative Action?

If, as you'd expect, their faces flush and the veins bulge from their often-overheated foreheads and they rant, hoop and holler. "NO! Of course not."
You can simply say,"Then you mean... you wouldn't have voted for ...Ronald Reagan?"
It’s a cruel sport, as I shall presently explain.

The Powerful Speech that Made Santorum Throw Up and Lose Michigan and Arizona

Breaking News: James Murdoch Steps Down

by Nomad

According to the BBC, James Murdoch, son of Rupert Murdoch, has decided to step down from his position as executive chairman at News International the United Kingdom newspaper publishing division of News Corporation. 

News International publishes The Times, The Sun and The Sunday Times. News International has been the center of an ongoing scandal involving illegal phone-hacking and as a result, several top editors were arrested. Additionally the News of the World, once considered Murdoch's flagship, abruptly closed last year. 

James Murdoch, the son of media mogul Rupert Murdoch, will now be taking on a new role. Rupert Murdoch issued this statement:

Faith in Politics Exposed: Controversial but Necessary Questions for the Presidential Candidates

by Nomad

Here's an excerpt from an NPR article, entitled "Has Obama Waged War on Religion?"

Newt Gingrich warns the U.S. is becoming a secular country, which would be a "nightmare." Rick Santorum says there's a clash between "man's laws and God's laws."

Religious conservatives see an escalating war with the Obama White House. One Catholic bishop called it "the most secularist administration in history." Another bishop says it is an "a-theocracy." Bishop William Lori of Bridgeport, Conn., who heads the U.S. Conference of Catholic Bishops' new Ad Hoc Committee on Religious Liberty, believes the First Amendment is clear: The government cannot make people choose between obeying the law and following their faith.

Whether Newt Gingrich knows it or not, America is NOT becoming a secular state. It is a secular state and has been since its inception. It is in very real danger of becoming a theocratic state and that, many people would say, is the potential “nightmare.”

Two Roads Diverged: Jimmy Carter’s Speech - July 15, 1979

By Nomad

Background
The recent stunning images of revolution in the Islamic world is reminiscent of the Iranian revolution of 1978. Protests throughout Iran had led to the dethroning of the Shah of Iran and in his place, Ayatollah Khomeini- a fundamentalist cleric- became the leader of the nation.

The revolution had thrown oil production into decline and, this, in turn, had driven up prices.

To make up for this loss, Saudi Arabia and other OPEC nations boosted their respective production; however, the cartel had also announced that a series of oil price increases would accompany this increase. Gasoline prices skyrocketed and the perception of a shortage had led to widespread panic. Beginning in California and spreading eastward, the panic soon turned to anger from the American public and this hostility was primarily directed at the Carter administration. One of reason for this was Carter’s decision to cut all imports of Iranian goods, following the seizure of American hostages when students raided the American embassy in Tehran.

Carter's approval rating had dropped to 25%, lower than Richard Nixon's during the Watergate scandal. Following an exhausting summit in Tokyo, the one thing President Carter desired most was a break. He had planned to travel to Hawaii for a vacation. However, his chief of staff took a look at the poll numbers and warned him that his chances of re-election would be in serious doubt unless he took some action immediately.

You Cannot Deny Women..

https://twitter.com/#!/ANomadicView/status/172104667277438980

American Dreams: My Father, Karl Marx and the Man who Sold the Rope 2/2

by Nomad 

In part one of this two-part series, I wrote of how the American dream had changed since my father's time. The promise of ever-increasing prosperity seems to belong to a shrinking minority. History had played an ironic joke on the West. While the Soviet Union was collapsing due to the pressure of union labor, the United States under Reagan was signaling to corporate America that unionized labor was to be discarded on the ''scrap heap of history.''
Now let's take a look at the consequences of this policy and who actually benefited.

And Then The Slow Decline

At one time, when the main challenge to capitalism was Communism, leaders of the free world touted rising consumption afforded by rising wages as a measure of its success. Starting around 1980s, however, real wages and productivity, which once went hand in hand, decoupled. No longer did harder work mean higher wages. Productivity continued to rise- adding to the wealth of corporations- while wages remained steady. This trend has continued to the present day.

Additionally, access to easy credit has allowed the American citizen to shop and shop, giving, at least, the illusion of prosperity. But buying a lifestyle built on credit is a gamble, because credit assumes that tomorrow will be as good or better than today. Life could be pretty good with a high credit limit. Especially with the flood of cheaply-priced merchandise on offer, all of it made possible by non-unionized workers in Asia and elsewhere.

Consider these facts.

Before credit was became so widely available, personal savings rates were rising steadily each year. In 1960, Americans were saving 5.4% of their total income, It reached a high of 14.6% in 1975, and by 1982, it leveled off at 10.9%. But all that changed in the mid-1980s under Reagan when consumer credit became more commonplace.

At that point, personal savings began dropping hitting an all time low of just .09% in 2000 and it stayed low until the last few years. After hitting depression-era lows, it has been slowly rising again since 2008.

During the Depression, Franklin Roosevelt encouraged Americans to buy US savings bonds then called “baby bonds.” These bonds provided a safe investment option for investors- not a get rich quick scheme- and helped finance government operations and initiatives. It was truly, as my mother told me, “a means of investing in the country.” Essentially, with the purchase of savings bonds you were lending the government money. Today, our government must borrow vast sums of money from China. Today we are told that the only way the economy will be on the rebound is by consumer spending, not consumer saving. Saving money for a rainy day is frowned upon. Spending like there’s no tomorrow is the answer. Even when that spending is on credit. 

The PBS Frontline report, "The Secret History of the Credit Card" lays out the case quite well:

As the deregulation of interest rates enabled more people to get credit cards, the industry began to expand and became the most profitable sector of banking, with $30 billion in profits last year...Today, nearly 144 million Americans have credit cards, and they are using their cards like never before, charging $1.5 trillion last year alone. Credit cards have become an essential part of the American economy.

With all that convenience, it is easy to ignore the potential danger to the consumer. As Professor Elizabeth Warren points out:

And what families are discovering, even with Mom and Dad in the workplace, is they often can't make it to the end of the month, and so they often use credit cards to bridge the gap. They borrow to make ends meet. And then what happens is something goes wrong. Somebody loses a job, somebody gets sick, family breaks apart through death or divorce...

The main things that triggers a bankruptcy filing are job loss, a medical problem or a family break-up. Without these things, most American families can deal with their credit card debt. But high credit card debt puts them at much great risk, so that if they stumble, if they get hit by one of the other blows, they get their feet tangled up in those high interest rates, and they just get sunk.

All of these dramatic changes brought about the wholesale de-regulation of various industries have caused people to question the entire capitalist system- as it has been allowed to evolve in the last thrty years. Most importantly, they ask where it is going and whether it is a sustainable model. Should self-respecting people tolerate a system such as this? But, of course, all this corruption was predicted well over a century ago- by a man named Karl Marx.

Why Marx was wrong and right

I hear what you are saying. Oh no! Karl Marx and the Marxist theory were proven wrong. The workers did not spring up and overthrow their masters. Communism, or at least the perversion of it that emerged in the Soviet Empire, was proof that Marx got it wrong. 

Professor of Political Science from Rutgers, Dr. Michael Curtis, writing back in 1965, would have agreed. In his book “Great Political Theories” he writes:

“..(M)any of Marx’s predictions about the course of history have not been fulfilled. The condition of the working class in industrial countries has grown steadily better, not worse. class struggles have been reduced rather than intensified; the middle class and other classes between the capitalists and the proletariat have not been eliminated; state power has not withered away in communists countries, but has increased in scope and intensity; the supposed international solidarity of the working class has retreated before bellicose nationalism. Perhaps the greatest irony is that the social revolutions that have occurred have been, not in the most highly industrialized countries when “the conditions were ripe” as the theory predicted but in the less developed or undeveloped countries.”

End of story. Or is it? That was written back in 1965 and the battle of ideologies was still unfinished. It is probably even now not quite complete.

In any case, perhaps it’s important to ask why was Marx wrong? Capitalism has proven, at least, until recent years, to have been a smashing success and eventually triumphed over Communism. 

So where did Karl go wrong and what can we learn from it? The world that Marx saw and commented on was not the same world that evolved afterward. Many of the intolerable conditions that he witnessed were reversed or kept in check by four main factors:

• the growth of organized labor,
• a strong government with effective regulating authorities,
• a court that acted as a fair arbitrator and deliverer of the appropriate punishments.
• a free press which served the public interest by being the indifferent observer, separate from corporate influence and from political bias.

With these institutions in place, capitalism, tamed but dynamic, could be a world-changing force for good. Without them, life could be hell on Earth.

Admittedly it was never a perfect system but it was good enough to allow a tolerable sense of democracy. It might not have been free from corruption but at least, it allowed each of us to cherish some precious bit of self-respect and individualism. While often as not, equality was more of an ideal to attain than a reality, there was a sense of constant improvement. Things would get better, if not for me, then for my children.

Unions were there to protect the workers from capitalist excesses and exploitation.This allowed the growth of a middle class which stabilized society and contributed to the unprecedented growth we saw in the middle of the last century. 

When one sees the failure of Marxism in this light, it begins to make much more sense. It is only natural that Marx’s warnings were more appropriate to less developed countries (that were unable to use these capitalist-taming tools) than to the industrialized nations, which had managed to restrain the excesses of capitalism. Wherever these tools did not exist, one could see the same conditions that Marx described repeating themselves time and time again.

And sadly, during the Cold War, whenever the impulse to rise up occurred in a developing nation, it would be attributed, in the West, to the Communists and it had to be fought with all of the weapons of war that a capitalist society could produce.

China and America: A Search for Solutions

All this is important because the four factors I have mentioned are now being eroded by the unprecedented corruption by corporations like Koch Industries. Our dependence on oil- as well as a empire's taste for luxury has created monstrously powerful corporate entities who would stop at nothing short of treason itself to have their way.

We see more and more every day of this kind of slide toward decline and desperation. The infiltration of the Supreme Court, the mutation of the free press into a propaganda machine for special interests, the purchase of politicians from both parties to make legislative reform impossible.

The slow demolition of organized labor has not brought about better conditions. It has not improved the living standards of the middle class. It has not made America any more competitive. If anything, it has achieved quite the opposite.

But how can America be competitive with nations like China which has an unlimited supply of cheap labor? There's only one way and it's a solution you aren't likely to hear from corporate owned mainstream media.

First of all, we have to remember that the situation in China is not a static one and China is not our enemy. In time, the Chinese worker will soon reach critical mass and make the same demands as the American worker once did. And this seems already to be happening, much to the chagrin of Western companies doing business there.

When workers at a Honda transmission plant in China went on strike for higher wages last month (May 2010) , they touched off a domino effect of high-profile labor disputes.

As the strikes, many of them at foreign-owned plants, rippled through China's southern manufacturing heartland, the government — usually quick to crush mass protests of any kind — did not step in, but allowed them to spread.

That's because it views the strikes less as a political threat these days than as an economic tool — a way to help restructure China's current export-driven economy to a more self-sustaining one, driven by ordinary people with more cash to spend.

There are other signs of hope from across the Pacific, but they are rarely mentioned in the mainstream media.. 

In September 2010, the Teamsters, including Joint Council 25 President John T. Coli, welcomed five delegates from the Shangdong Provincial Federation of Trade Unions of China (SPFTU) to Chicago. The groups signed an official memorandum of exchange and cooperation. As part of the agreement, “the delegations will share views and common concerns on a variety of labor issues, including the benefits of collective bargaining and protection for workers’ rights. The unions expect to share information on organizing and management techniques, and will be looking for new opportunities to support and communicate with workers.” 

This advancement in labor rights in China is supported, rather surprisingly, by the Chinese government. The American Chamber of Commerce (along with other groups) did all it could to water-down the new labor reform laws last year but their efforts were fairly unsuccessful. Corporations complained that China might not be such a great place to do business, but have since, begrudgingly accepted the situation. There was very little they could do. As one source observes:

In line with its provisions(of the recent Chinese labor law), the ACFTU (All China Federation of Trade Unions) that serves as a government endorsed umbrella for the world’s largest trade union organization, is currently implementing a mass unionization initiative. Thus, the unions’ significance is likely to grow in the coming years, which should be taken into account by any company doing business in China.

So, competition with China need not mean a race to the bottom. Chinese workers- as well as the Chinese government- must be allowed to see the success of the American system, as a model to imitate. Not the other way around. Perhaps the key, the solution, is the encouragement, by union groups, by the Left, of worker rights in China in order that Western corporations would have to chose the high productivity of the American worker compared to the low cost of the Chinese worker. That is a fair competition. It is a marvelous irony to have American unions calling on a former Communist country to reform and empower its own unions to control unbridled Capitalism.

China’s present policy to allow union labor with collective bargaining is a wise move, especially when added to a court system ready and willing to hand down punishment for abuse. Imagine how much more timid white collar criminals would in the US if they were punished like they are in China.

The Man who Sold the RopeDespite what Mitt Romney might think, corporations are not people.To quote Edward Thurlow, 1st Baron Thurlow:

Corporations have neither bodies to be punished, nor souls to be condemned; they therefore do as they like.

They don’t fall in love, they don’t get hungry in the middle of the night and they especially don’t feel patriotism. Corporation’s interests are actually quite narrow. The search for greater profits, ever-cheaper labor and new markets may be all-important to corporations but it is also a blinding one. So relying on politicians who have been bribed- isn’t this the word?- by corporations is extremely foolish. Allegiance of politicians of this ilk is not to the tax-paying citizen but to the hedge fund managers, religious fanatics with the money of their followers to spend, the anxious CEOs and the corporate board of directors.

Ultimately it is the corporations themselves that are being foolish. In their zealous abuse of the capitalist system they are destroying its very foundations. As Karl Marx reportedly said, “The last capitalist we hang shall be the one who sold us the rope.”

Therefore, when you hear the Republican candidates call for “de-regulation” and for “less Big Government” it is important to consider what exactly that means in practice. The definition of “to govern” is “to restrain” “to control” and “to direct.” Who is government supposed to restrain, control and direct? Only its citizens but not its corporations? Only the law-abiding, the weak and the defenseless or the powerful, the wealthy, the selfish and the corrupt?

So in effect, when conservative politicians speak of de-regulation they are speaking of a land without rules, with no checks and balances, in a word, lawlessness. When they demand “less government interference” they actually mean anarchy, disorder and accepted injustice. It is a vision of America as a third world nation, without class mobility, without representation and in most respects, intolerable for Americans. It is, therefore, an act of patriotism to send a clear message in the next election. This is not an acceptable future for the nation.

The Right wing vision isn’t even a system that offers stability- the very lowest standard for any political system. Whenever market-oriented economies are de-regulated, that is, allowed to manage themselves without government interference, inevitably the economy goes into overdrive, a few become incredibly rich while the rest are stripped of all they own. The astonishing part of all of this is that anybody should have to be reminded of what happens they corporations go “free-range.” People only need to look around and see the misery caused by de-regulation of the last decade. Yet, this is the only vision the Republicans have to offer for the next election, it would seem.

What we are seeing and experiencing is a slow decay of America led by foolish policies from the Far Right. The trickle down theory redux. The Bush tax breaks for the super wealthy (continued), and the progress of the corporate corruption of democracy’s most valuable institutions. In this upcoming election, the same illegitimate slogans and wrongheaded solutions are trotted out to the American public. Once again, the spokesmen for party of the 1% will attempt to mislead an easily fooled electorate into voting against their own best interests. Rest assured they are planning to use every dirty trick, every negative ad, every divisive tactic and all fear-mongering they can think of in order to return to power. Clearly they are not finished with destroying the country.

There is good news despite everything. According the The Atlantic,

Although support for government regulation of business hasn't risen, 50 percent of Americans think it is necessary to protect the public interest, compared with 38 percent who say that regulation usually does more harm than good. In fact, not only do more Americans worry that businesses are snooping into their personal lives (74 percent), than think government is doing so (58 percent), fully six-in-ten think that business makes too much profit, and an overwhelming 78 percent think there is too much power in the hands of large companies.

According to Pew Research Center, the majority of American appear to know where to place the blame.

Although fully 80% of Americans attribute at least some of the blame for the current financial crisis to weak government regulation of financial institutions, public support for regulation more generally has not shifted upward.

One doesn’t need to be a atheist Marxist or some wild-eyed revolutionary to understand the obvious. Back in 1891, Pope Leo XIII- who probably had very little in common with Karl Marx- stated things pretty clearly:

The richer class have many ways of shielding themselves, and stand less in need of help from the State; whereas the mass of the poor have no resources of their own to fall back upon, and must chiefly depend upon the assistance of the State. And it is for this reason that wage-earners, since they mostly belong in the mass of the needy, should be specially cared for and protected by the government.

This ray of enlightenment simply has not reached many in the Republican party. What can you say when you still have people like Representative Spencer Swalm from Colorado, arguing that families can stay out of poverty by avoiding having kids outside of marriage. It certainly hasn’t hurt Bristol Palin.

Or when a South Carolina Lt. Gov. Andre Bauer compared poor people to stray animals by saying, "You're facilitating the problem if you give an animal or a person ample food supply"? And yet, this is a man who doubtless goes to church every Sunday.

As Change.org notes:

When Rush Limbaugh says that food stamps enable people to "buy Twinkies, Milk Duds, potato chips, six-packs of Bud, then head home to watch the NFL on one of two color TVs," he encourages his millions of listeners to engage in low-grade class warfare, whether by voting for candidates who similarly oppose helping those in need, failing to donate to organizations doing their best to help, or engaging in even more rants against people struggling to survive in the wealthiest country in the world. Words like Limbaugh's, Bauer's and Swalm's are a self-perpetuating cycle that serves only to keep those who need help even further down.

And it isn’t merely small time politicians or bloated radio talk show hosts speaking such nonsense. It is even more disgraceful when you have a candidate for president, Herman Cain, saying things like “Don’t blame Wall Street, don’t blame the big banks, if you don’t have a job and you’re not rich, blame yourself! […] It is not a person’s fault because they succeeded, it is a person’s fault if they failed.” 

To that I would quote to Mr. Cain the words of Franklin Roosevelt- a man whose reforms proved Marx wrong. “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.”

Presidential candidate Michele Bachmann can say things like "Literally­, if we took away the minimum wage —if conceivabl­y it was gone—we could potentiall­y virtually wipe out unemployme­nt completely because we would be able to offer jobs at whatever level." 

To that, I would again quote Franklin Roosevelt- a man she might have heard of.

“No business which depends for existence on paying less than living wages to its workers has any right to continue in this country.”

Americans are indeed fortunate to have a heritage of intelligent and compassion leaders from the past to recall and take courage from and remind us who were are whenever we need a touchstone. Their words offer a shelter from the day to day bluster from the Far Right. 

We can only hope that voters across the nation are as equally intelligent and understand where all of these “bright” Republican ideas will lead. When they hear a Republican candidate tell his audience that he wants to take this nation back, they should inquire how far back they plan to go and at what cost to the average citizen.

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