Taking Sides

It's pretty obvious who is going to pay for the California budget crisis by class: the rich and near rich reap the benefits of intact programs and corporate subsidies, while programs for the poor and the working middle class are cut or killed.

The winners and especially the biggest losers are divided by age: the very young whose nutrition and health programs are cut, the young whose education is shortchanged, and the elderly who may see home health care killed entirely.

But the losers are also visible by race, that most obvious and ugly remnant of how America apportions its bounty. This is not only because the social and health programs being cut and killed disproportionately affect blacks, Latinos and Native Americans. It's because cuts to education also deprive them most directly. Education is their path to a better life, that the well off already have.

But in taking sides, the Terminator is deeply wounding the state of California, and the country's future. Every layoff by the state is lost revenue as well as lost talent. California cannot prosper without good schools and an educated population. But schools from primary through college are in state-caused chaos, as well as suffering from decades of neglect. That California is close to becoming a majority non-white state, a mainly black and brown state, makes these decisions destructive to education all the more racist.

As for the national economy and the nation's future, President Obama made this point in his stirring address on the 100th anniversary of the NAACP:

"The state of our schools is not an African American problem; it is an American problem. Because if black and brown children cannot compete, then America cannot compete... We used to rank number one in college graduates. Now we are in the middle of the pack. And since we are seeing more and more African American and Latino youth in our population, if we are leaving them behind we cannot achieve our goal, and America will fall further behind -- and that is not a future that I accept and that is not a future that the NAACP is willing to accept."

But it a future that the Terminator's California is not only willing to accept, but a future it invites.

The Shock Doctrine

Since this blog is supposed to also be about "world affairs" a little time out at the movies. The Shock Doctrine is a book I'm on record admiring--after all, a quote from my SF Chronicle review leads the blurbs on the back of the paperback edition. But this six minute plus video can save you a lot of reading time, or just give you a great idea of what this book is about. It's time well spent.

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?

What's Really Going On, Part 1

They said it couldn't be done, but the Dash Brothers have been walking around in stunned silence, thanks to the increasingly tragic and increasingly surreal situation in Iraq.

"The hallmark of the Bush foreign policy has been a naïve radicalism married to an operational incompetence," writes Robert Kuttner in the November American Prospect. "A small clique with a preconceived blueprint took advantage of a national emergency and a callow president, blowing a containable threat into war while dismissing more ominous menaces. These people are out to remake the world, with little sense of risk, proportion or history."

Of course we've been saying all this for months, and as we've also said, one remarkable feature of this context is that the above analysis has quickly become the conventional wisdom among several if not nearly all of the Democratic candidates for president, as well as the established "liberal" or what's left of the Left within the ruling class, from Washington to Hollywood, the Nation magazine to Doonesbury. It took years for this kind of critique made by outsiders demonized as radical leftists to enter the public commentary of establishment liberals during the Vietnam sixties and seventies.

And if this analysis has any impact on the 2004 presidential election, we suspect political historians will refer to this past week as a key moment. That's because two sets of events happened almost simultaneously. One set was a series of almost incredible missteps and disasters for the Bushies.
Just hours before Bush himself was scheduled to get on the phone to heads of state of France, Germany, Canada and Russia, to pitch them on forgiving debt to Iraq and otherwise help the U.S. get out of this mess without going into bankrupt Depression, the Pentagon announced that major reconstruction contracts would be banned from going to companies in France, Germany, Canada and Russia. This carries the policy of preemptive destruction to new heights.

The fallout from this appalling act has already caused international furor, and will likely lead to incalculable consequences, probably in a number of small and subtle ways that will add up to real damage to U.S. internal security and interests in the world. But it may have greater consequences domestically and politically. There are lots of people supporting Bush in Iraq who don't have the resources to ignore consequences to themselves. The Bush government may feel free to plunge the country into massive debt, and strain society to the limit by sending thousands of National Guard weekend warriors to get picked off one by one in the Middle East, but American families will feel the real pain. Nobody except well paid ideologues are going to be happy that the U.S. is alienating allies who could help and share the burden. Now it will take a change of administration for that to happen.

Stories in the Boston Globe and elsewhere are already charging that this policy, ostensibly to reward Bush's allies among other nations, is more likely to reward only Bush's allies in U.S. business, because the countries excised from consideration are precisely the countries that have companies with the capabilities to compete for major contracts.

Shortly after this Pentagon announcement, another Pentagon office announced that Halliburton, one of the two U.S. companies to benefit most richly from the occupation of Iraq, has overcharged the government for gasoline. Every report mentions that Halliburton was headed by vice-president Cheney.

These reports hurt immediately because they say that things are not likely to get better in Iraq in the future. Other reports dramatized how wrong things are going right now. Besides the guerrilla war and terrorist bombings, the growing suspicion that more civilians are being killed and injured and the charges that information about all of this is being covered up, there was the report that between a third and half of the recently recruited new Iraqi army has quit. We assume this is going to set back the timetable for turning over security and so on to Iraqis.

That's the first set of events. The second set concerns the political opposition. Al Gore, whose timing was suspect in his own 2000 campaign, came up with a thunderbolt of timing and surprise. He unexpectedly endorsed the candidacy of Howard Dean for the Democratic nomination, before even the first caucuses in Iowa let alone the first primary in New Hampshire.

The endorsement by the man who won the popular vote in 2000 is politically powerful, but what's more important is the basis for it. Gore said it was because of Dean's position on foreign policy and the war in Iraq specifically. Until now, the zeitgeist was unsure what issue was going to be emphasized in the election, the war or the economy. Of course they are related and they will both be debated, and no one knows which will be more important to voters ten months from now. But Gore's endorsement put Iraq at the top for the political moment. He emphasized its importance by saying he endorsed Dean now because the issue is so important, Democrats need to be uniting behind one candidate with this message ASAP. And the events described above as the first set, all happened shortly afterwards, making Gore's move not only bold but prescient.

Dean had other good news this week, solidifying his position at the frontrunner. But even if another candidate emerges later, Gore's endorsement has set the bar. And if it happens, this week may have been crucial to ending the Bush reign in 2004.