The recent incident in which United Airlines used the Chicago Police Department to enforce its corporate policies has already roused plenty of comments. Many have focused on the clumsiness, even callousness of the policy and its later justifications by senior managers. This is missing a more telling point about airline travel today.
In the US four airlines control over 80% of the seats and in many regional markets the competition veers towards a state of monopoly. There is simply no effective competitive controls on what the airlines can charge and under what conditions.
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NSA’s gathering of Meta Data Compared to Corporate Use of Information
In the current discussions of the government’s wholesale seizure of the meta data of our personal digital lives there is regular comparison to the acquisition and use of information about our digital lives by corporations. At the moment corporate use of individual information results in targeted advertising and increasingly location aware targeted advertising through our smart phones. The implicit, sometimes explicit, notion is that we mare so used to corporations gathering information that the NSA is just another corporation, nothing but just a bit more of the same old.
Comparisons Between Corporate Data Gathering and the Government Vacuum Cleaner Are Wrong Headed and Misleading
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There has rightfully been considerable outrage over this week’s revelations that the Federal government has been sucking up information on virtually every aspect of our lives, email, telephones calls, pictures, credit card and banking transactions, and so on. Unfortunately almost all of this discussion is taking place without a useful sense of the scope, scale, and trajectory of the government’s war on terror.
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The political rhetoric of the current moment, chiefly flowing from Republicans, but barely challenged by the Democrats, describes tales of profligate over-spending by the Federal government matched with burdensome taxation. While it is true that Federal spending is higher proportionately than post-WWII norms, social programs are not the source of this over spending. One only has to look back to George Bush’s two terms to see the true sources of the debt.
War, Wars, More Wars
First up are our profligate wars. A recent study at Brown University’s Watson Institute for International Studies finds that since 2001 we have spent between $2.3 and $2.7 trillion on our adventures in Iraq and Afghanistan.All of these dollars are deficit dollars. George Bush did not ask for increased taxes to fund his wars. Barack Obama has not asked for increased taxes to fund his continuation of the Bush wars and now his new war in Libya. The final bills for these wars will reach $3.7 to $4.4 trillion. We are fighting these wars on the backs of our grandchildren and, as is becoming obvious from the disgusting collusion between Obama and the Republicans, on the backs of the poor and the rapidly disappearing middle class. You might think that since these wars are in our national security interests (the rhetoric of all recent Presidents) they would feel it right to ask the American people to sacrifice more than just our mercenary military but also take money out of their pockets. It has been too easy to have the Chinese pay the bill.
Pills, Pills, Drug Companies and the Health Industry
President Bush, aided by the drug industry and health insurance industry, pushed through a new Part D Drug Benefit for Medicare. This was unfunded by new tax revenues. The estimate for 2009 to 2018 is an additional $727 billion
Tax Breaks Everywhere – The Gully Swamper of Them All
Part of the religion of the right is that cutting taxes will increase economic activity and in the end generate higher tax revenues. History has proven this theory to be nonsense. George Bush, aided by members of Congress, both Republican and Democrat, passed enormous tax decreases. These bills with their charming titles, Economic Growth and Tax Relief Reconciliation Act of 2001 and Jobs and Growth Tax Relief Reconciliation Act of 2003, created an enormous windfall for the rich and have not produced any job growth. In fact George Bush’s presidency is marked with the lowest job growth record of any president back to Herbert Hoover. As is demonstrated by the graphic from the Center for Budget and Policy Priorities the tax cuts of the Bush years are the largets single source of debt.
Under Tax – But Are We Over Spending?
With all of the Bush tax cuts (and the extensions by Obama and the Democrats) Federal tax revenues are now 14.9% of GDP. This is roughly 16% lower than the share typical during the post WWII era while Federal expenditures are 24% of GDP. The chart from the National Priorities Project “Federal Outlays and Revenues, 1930-2015” shows the historical trends of revenues versus spending. Note that the projected increases in revenue for 2011 to 2014 are the result of the projected lapsing of the Bush tax cuts. As demonstrated by Obama and the Democrats at the end of 2010, it is hardly a forgone conclusion that this enormous giveaway will not be continued.
The chart clearly shows that overall Federal spending is higher than the post WWII norm. Despite the political rhetoric of the moment, it is hardly shockingly high. This is especially true if you take into account the war spending and outlays for economic recovery during what is now obviously the most serious economic slump since the Great Depression.
The current tsunami of revelations of misbehavior, if not outright criminality, by the banking industry in their pursuit of mortgages gone bad, is further evidence of how fundamentally corrupt and cynical this industry continues to be. On the front end of this global economic disaster the financial system engaged in misleading sales tactics using financial products that were baroque in their complexities. Aided by governments seduced by the siren songs of free market religion and floods of money to grease the ways, the industry expanded spreading its load of debt everywhere. Finally the whole Ponzi scheme collapsed under the weight of its own lust.
Now, in a further display that the people running these institutions have learned nothing, nor been disciplined by either market forces or governments, we are suffering through another round of their arrogance.
Time to call again for these institutions to be broken up. They are not serving the basic purpose of a banking system to supply credit. And, even after being bailed out at enormous expense, directly and indirectly to the general populace, they are again displaying utter disdain for the very laws and procedures that make it possible for the system of capitalism to function at all. Time to put some of these bank managers in jail for organizing and directing this massive fraud against the legal system and homeowners. Time to break them up to form a banking system that will both serve the needs of the economy for credit while not allowing any of them to be so large as to threaten the system as a whole.
But, who will do this? Obama’s administration seems strangely silent. But, given the continuing prevalence of Wall St. executives and their supporters in the Federal Reserve and academics in the administration this is not surprising. Similarly, the Congress, both houses, are still amazingly in thrall of the gods of the “free market” religion and money.
Anti-Wall St Does Not Mean Anti-Business
President Obama’s proposals to break up the “too large to fail” mega banks and otherwise reapply the Glass Steagall Act to the financial sector has predictably brought loud complaints that this is populist and anti-business. Even the rhetoric of the reporters and expert talking heads reflects a general bias that anything that we might do to prevent a re-occurrence of last year’s global financial meltdown is anti-business.
How Is It Anti-Business To…. or
Is the New Rule of Banking, “Privatize profits, but socialize losses (risk)”?
As a business person and a citizen I have to point out that having a sector of our economy that caused so much damage to the rest of the economy and citizens continue to conduct themselves in a fashion that is likely to cause a repeat breakdown is not a good state of affairs. How is it anti-business to want to control the gambling addictions of the financial services sector? How is it anti-business to prevent banks and other financial firms to become so large that they can place another call on the the nation’s treasury to bail them out because they indulge another round of gambling with other people’s money through dangerous leveraging? How is it anti-business to want the banking system to perform their primary function that is necessary to make the economy run, that is to take in deposits and make loans? Or, to capture this in a current diddy, we have an economy where for the financial services sector they follow this unique rule of crony capitalism, “Privatize profits, but socialize losses (risk)”.
How Is Gambling With Other People’s Money Good For Us?
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President Obama’s speech on accepting the Nobel Peace Prize on December 10, 2009 has generally been reviewed in the US with much glow about its rhetorical heights and appreciation of its depth of thought. I did not watch Obama give this speech. Instead, I turned to the text which I could read at my leisure and without the speechifying fireworks that Obama has clearly mastered.
Although I seem stuck in a reflexive backward glance towards the eight disastrous years of Bush II whenever I evaluate Obama. I am still amazed at the enormous moral and practical abyss we fell through in those years. Obama brushing his teeth in the morning is reassuring in contrast. Nevertheless, it is worth looking a bit more closely at what Obama did and did not say here. Much has been said of his straight forward assertion that violence is necessary and even useful in a world inhabited by human beings who seem almost genetically predisposed to killing each other off. And, with the invocation of Martin Luther King and the discussion of just war theory, he covers well worn territory, though it is cheering to have a sitting US President talk in this fashion.
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Americans do not like to use the word “empire” in reference to the country’s role in the world. Our Presidents uniformly role out rhetoric that sounds just like Obama’s. Here is a paragraph from his Inaugural speech:
And so, to all the other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born, know that America is a friend of each nation, and every man, woman and child who seeks a future of peace and dignity. And we are ready to lead once more.
This is heart warming. But, turning to some of the facts on the ground, as the generals and policy wonks like to say, we have to note that in just the military dimension alone, there is solid evidence that there is an American empire.
For instance, the US defense budget is not just the largest in the world, our military spending is larger that nearly all of the other countries in the world combined at 48%. See the graph to the left.
Are we really spending all of this money for “defense”? Or is it something else that comes closer to empire that is consuming these resources?
Perhaps another statistic will suggest something further of the scope of our empire. Lets look at the enormous, and growing, array of military bases covering the globe. As the Pentagon’s Base Structure Report shows, we have over 750 military bases outside of the US. Leaving aside our bases throughout Europe, Japan, South Korea, and various islands, new bases are being added in Africa and Central Asia as this is written.
November 1, 2008
So, here I am having coffee and my favorite lunch, a toasted bagel with peanut butter thinking about the approaching election. Finally this will conclude what has been an overly long campaign, but one with enormous pleasures. Assuming that Obama is not just a curiosity to all those throngs at his campaign events, we will have a President who seems bright, competent, and level-headed with an adequate level if toughness. I don’t expect the kinds of policy directions I would like to see. But, after the last eight years, really the last eleven years, just having a competent President not mired in malevolent Millennial daydreams will be a step forward.
Though I am concerned that the present problems facing us may be beyond the present political system to navigate let alone solve.
Just to mention one. Our overseas empire with almost 800 military bases (see the Base Structure Report from the Pentagon for the data) on every continent proves Eisenhower’s point about the military industrial complex, though in truth this confirms what he is said to have wanted to say, “the military-industrial-Congressional complex”. This monster that consumes almost a trillion $s every year (my calculation includes the Pentagon, CIA, NSA, Energy, and other secret intelligence/military enterprises along with the budgets for the War on Drugs and Homeland Security) continues to grow with no evidence that our security is actually improving. To the contrary, it appears that in some quarters our security may be significantly diminished.