GOOD READ: The Plutocrats and the Placeholder President
- Austerity, Obama-Style
The Plutocrats and the Placeholder President
by ROB URIE
In Quentin Tarantino’s movie ‘Jackie Brown’ the illegal arms
dealer played by Samuel L. Jackson laughs as he recounts the sales
slogan used by the manufacturer of the ‘Tech Nine’ semi-automatic
weapon—“the most popular gun in American crime, like they proud of that shit.” Mere weeks after Barack Obama was re-elected farce is added to tragedy
with his supporters complaining that while the Republican proposal to
cut Federal government spending and social insurance programs is all bluster and misdirection, their guy (Mr. Obama) has a real plan to do so—like they’re proud of that shit. Thanks just the same folks, but I’ll take the fake plan.
The moment when the New Deal as we knew it became history by
bi-partisan consensus was a long time coming. A trans-generational core
of inherited wealth and right-wing cranks has been trying to undo the
New Deal since Social Security became fact in 1935. Ronald Reagan echoed anti-New Deal cries of ‘socialism,’ first as a paid spokesperson of the AMA (American Medical Association) against the implementation of Medicare and
Medicaid, and later through his racist caricature of the ‘welfare queen’ living fat on public largesse. Despite the fact that Social Security is an insurance program paid for by its participants, much the same as
private insurance but without the executive looting, the charge has
always been of an undeserving public sucking on “a milk cow with 310 million tits.”
Democrats first joined the effort in earnest with Bill Clinton’s plan to partially privatize Social Security. The idea was to let our good friends on Wall Street manage a bit of the money for us, for a fee of course. That proposal faltered when Mr.
Clinton was impeached. As was the fashion in European Central Bank
circles in 2009, Mr. Obama took up the torch of fiscal austerity of his own initiative bycreating his very own deficit commission. This should have come as no surprise to anyone paying attention—Mr. Obama publicly stated his intention to ‘fix’ Social Security, Medicare and Medicaid when he allied himself with the Wall Street friendly ‘Hamilton Project’ in 2006.
(In Between Democrats Clinton and Obama came Republican George W.
Bush who also tried to partially privatize Social Security. Mr. Bush
quickly retreated when he saw the depth of political opposition to the
effort. As the saying goes, it takes a Democrat to gut the New Deal).
For the uninitiated, the Hamilton Project is the demon spawn of the
Clintonite contingent of the Democratic Party led by former Treasury
Secretary and disgraced Citicorp Board member Robert Rubin. The kindest
take on the Wall Street lootocracy populating the organization is that
they don’t know how money is created (the U.S. has a fiat currency),
making them morons. The less kind take is that their greed has no
limits. Whichever is more applicable (neither is mutually exclusive), if one group of Wall Street politicos bears responsibility for the
economic catastrophe that an unregulated Wall Street has visited upon
the world in recent years, the Hamilton Project is it.
Never one to let the wish list of the entrenched plutocracy go
unfulfilled, Barack Obama chose Democrat, inheritance baby and Wall
Street ‘welfare queen’ Erskine Bowles, to co-head his (Mr. Obama’s) very own ‘deficit commission.’ Of course Mr. Obama knew nothing of Mr.
Bowles experience leading the earlier effort to (partially) privatize
Social Security when he appointed him to the position. In his speech
welcoming the Hamilton Project into existence (link above), Mr. Obama
additionally described himself as an enthusiastic ‘free trader’
committed to globalization. And of current relevance, he ascribed fiscal ‘discipline’ as the proximate cause of the Clinton economic ‘boom,’
deftly ignoring the greatest stock market bubble (as measured by price / earnings ratio—twice that of 1929) in human history.
One could be forgiven for believing that Mr. Obama, or any other
placeholder Democrat for that matter, has something of a point regarding ‘entitlement’ spending if his words are the only that are listened to.
People in the U.S. are living longer and a strapped citizenry simply
cannot afford the lavish promises made in an earlier age of plenty goes
the toxic bullshit. By leaving out class divisions this formulation
simply furthers the shift in social resources upward from poor to rich.
As economist Paul Krugman has effectively argued, the rich are living
longer and the working class and poor are not. Additionally, unless
those in the ‘gap’ years between the old and new eligibility ages for
Medicare simply forgo health care, the change will force them to
purchase private health insurance under whatever terms the ‘market’ will bear. But of course, private insurance companies always act in the
public interest when people’s backs are to the wall.
At the end of the day this charade is a struggle over social resources. The ‘too-big-to-fail’ guarantee of the banks, which is the only reason why insolvent, predatory Wall Street remains
in business, is an entitlement program for connected bankers—for which
they pay nothing. The bloated, murderous, military industry that lobbies the U.S. into unnecessary wars for their own benefit and that of
corporate welfare receiving multi-national corporations is an
entitlement program. And the aforementioned corporate welfare that
perpetuates the puffy, gray corporate executives behind the ‘Fix the
Debt’ campaign for whom official Washington now apparently works is an
entitlement program. So if we want to have a public ‘discussion’ of
entitlement spending, by all means let’s do so.
And as far as entitlement programs go, government guarantees and
redistribution schemes are only a starting point. As economist Dean
Baker has argued, America’s professional class retains monopoly pricing power for their labor through trade restrictions while the working class has been thrown to the
wolves. The Federal Reserve has spent upwards of four trillion dollars
to entitle the fortunes of the investor class since 2008, returning the
already rich to their former wealth. And corporate executives have
entitled themselves to robber-baron sized paychecks through the
combination of trade policies that have so reduced the fortunes of the
working class, tax abatements that have bled the public weal for some
forty years, and through the financialization of the economy that has
favored, along with Federal Reserve policies, the financial wealth that
executives pay themselves with. All of these and more are entitlement
programs that have redistributed ever more social wealth from the
working class and poor up to the Washington establishment’s beloved
But the trillions of dollars in health care expenditures that we
deadbeats intend to sponge off of the blessedly deserving rich is the
really big money, right? When Erskine Bowles wakes with night terrors,
it is my herniated disk and your gall bladder operation that will sink
the country, right? The U.S. pays 30% – 50% more per person than other
first world nations for health care that is of substantially lower
quality because we have a largely private health care system. Were the
system totally public—Medicare for all, we would realize some material
proportion of these savings and most likely vastly improve the health of the citizenry. Were the monopoly entitlements of doctors and
pharmaceutical companies reduced or eliminated, further cost reductions
would be realized. So quickly, who are the main beneficiaries of
America’s ‘bloated’ entitlement programs?
As Mr. Obama will offer, his proposals include reducing payments to
health care providers and negotiating lower prices for prescription
drugs. However, the private health care system in America is the global
leader in shifting costs to those with the least social power. Cuts in
public payments to private providers have a long history of popping up
elsewhere, as health insurer profits will attest. For instance, Mr.
Obama’s health care ‘reform’ program, the ACA (Affordable Care Act),
requires insurance companies to spend fixed percentages of their revenues providing health care or to rebate the difference to their customers. As corporations constitute the majority of their
‘customers,’ corporations apparently now have an incentive to shop
around for health insurers that provide the lowest proportion of health
care to their employees to maximize the rebates. (The central business
of insurers was already to provide the appearance of coverage without providing actual coverage). And health insurance providers can gain market share, if at lower margins, by doing exactly this. Welcome to America.
Last, any honest discussion of ‘entitlements’ would be to the benefit of America’s poor and working classes. The globetrotting plutocrats
behind current ‘discussions’ see working class product as their due.
This is the very definition of entitlement. We can either disabuse them
of this notion or roll over and play dead. Or better yet, roll over and
Rob Urie is an artist and political economist in New York.
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