What's Really Going On Part 2

The first part of the domestic Plan has been obvious for awhile. The Bush Conspiracy found a way to reward its rich supporters and corporate cronies with a huge tax cut (the richest bunch of them will reap $8 million this year just on the cut) and thereby forcing government to "shrink" (that is, turn over its legitimate functions to corporations) because state governments and the federal government won't have enough tax money to meet the needs of the people.

It had to be done this way because voters haven't fully bought into the GOP message of destroying government. They like the rhetoric all right, but when it comes down to the decisions, they'd rather have the services, the protections, the functions of government that seed the economy, encourage a vibrant society, fulfill our common commitment to justice and a civilized society.

But the GOP of today has also found their fatal flaw---people want a robust government but they don't want to pay the taxes that support it. So promise them everything, especially tax cuts. It's a very successful strategy that can't last any longer than the machinations of Enron, and it will have even more tragic results. But that's all right, because the corporate interests that Bush represents will make plenty of money anyway. That's the second part of the Plan that we didn't quite understand.

Because the basic conundrum is obvious to everybody: if the rich keep stealing from the not rich, they will have all the money, and nobody will be making enough to buy the consumer products that currently drive the economy. So pretty soon the consumer economy will collapse and lots of corporations will stop making profits. Can't they see this?

We got the answer from James K. Galbraith in an article in the October issue of The Progressive entitled "Why Bush Likes A Bad Economy." "The oil, mining, defense, media, and pharmaceutical firms who form the core of their constituency rely on monopoly power, patents, and the control of public resources for their profits," he writes. "They do not depend, very much, on strong consumer demand."

So we have seen the future and it is called Urinetown. The premise of the play of that name is that all public and private toilets are controlled by corporations, who demand a fee. That's what will happen as government is forced to shed social security, education, social services, etc. and they are picked up by private interests, who will display all the compassion and cost efficiency of the health insurance and pharmaceutical industries.

Of course the Bushies know which focus group buttons to push. They prey on the apparent common sense notion that business can be more efficient than government, because a profit motive is incentive to cut waste and fraud, and to please customers. You know, what would buying a Big Mac be like if government was in charge of hamburgers? Pretty scary, right?

In the real world however we all should have learned by now that pleasing customers is hardly necessary for making profits, and that the method of choice for many huge corporations is fraud on a scale no government bureaucrat could dream of. Lying, manipulating, bilking people out of their life savings, their future and their very lives is standard procedure these days, as long as the quarterly report is favorable. For even making a profit isn't the main goal---the goal is SHOWING a profit, quarter by quarter, stock blip by stock blip.

They make money by manipulating the systems---the financial systems, through favorable laws, secret deals and simply pushing money around. There are billions to be made that way once they get their hands on Social Security.

Then there are the unfortunate differences between businesses and government, one of which is a very painful lesson for a town in California, as reported on Friday's "Now" on PBS: businesses can move somewhere else, but governments can't. In this case it was the biggest corporation and most successful retailer in the world, Wal Mart, that extracted millions of dollars from a local government for the construction of its store in their municipality, promising that government even more in tax revenues over the long run. But the long run never happened. The month the government made its last payment to Wal Mart, the corporation announced it was closing that store and building a couple more in nearby municipalities. So Wal Mart stole the money, and now will add further injury by further destroying the remaining tax base as it drives smaller retailers out of business.

That's how consumer businesses are surviving these days: by cutting costs the Wal Mart way: paying way less than a living wage to employees, treating them shamefully, forcing mini-management to act unethically and illegally, and when they aren't making a "competitive" profit (that is, enough money to keep expanding like a nightmare cancer) they go elsewhere. In this of course they follow the shining example of manufacturers and now service businesses that take their plants and office parks to other countries where wages are miniscule and health, safety and environmental regulations are even more fictional than they've become in America.

Yes, it's likely that Governor Arnold would prefer to move his government to South Korea, but unfortunately it's stuck in California. Maybe he'll get a nice payoff loan from Bush in exchange for trying to deliver the state’s votes to him in November, but in the meantime the schools are quickly dwindling to a state of depressed disorganization, the vitality is being leached out of the bones of public institutions that will cripple California for years to come. And it's happening in most other states as well, though perhaps less dramatically.

In California the Governator precipitated a crisis by cutting the motor vehicle fee increase (which was actually a reinstating of fees that had been cut just a few years ago when the state was flush.) That money had been destined to go to hard-pressed localities to support basic services. So it meant cutbacks in fire protection and police, and the now famous basic function of government: the roads don't get fixed. And health and social programs incidentally would have also suffered, along with thousands of children, elders and sick people.

But the Governator dramatically rescued the state from his own destructive act. Sort of like how the Terminator is the bad guy in the first movie but comes back as the good guy in the second movie? In this case, the Governator issued an emergency order to fund the localities out of other state revenues, specifically by making additional cuts in the budgets of the two state university systems. Very dramatic, perhaps illegal, but hey, he was elected to be an action hero, and a little dictatorial power is part of the script.

In the meantime, the universities have been hacking away at themselves for several years already, and are looking at cuts of up to 30% next year, even before this last bit. Now there are rumors that the most prestigious state funded universities are looking for ways to go private. If UC Berkeley and UCLA, for instance, succeeded in doing that, the collapse of state higher education for the middle class would probably follow in a big hurry. This might result in a reverse Gold Rush, except, where are people going to go? South Korea?