Thursday, November 11, 2010

Noam Chomsky: Outrage, Misguided

http://readersupportednews.org/off-site-opinion-section/72-72/3890-outrage-misguided

Outrage, Misguided

By Noam Chomsky
NY Times Op-Ed: November 4, 2010

The U.S. midterm elections register a level of anger, fear and
disillusionment in the country like nothing I can recall in my lifetime.
Since the Democrats are in power, they bear the brunt of the revulsion over
our current socioeconomic and political situation.

More than half the "mainstream Americans" in a Rasmussen poll last month
said they view the Tea Party movement favorably-a reflection of the spirit
of disenchantment.

The grievances are legitimate. For more than 30 years, real incomes for the
majority of the population have stagnated or declined while work hours and
insecurity have increased, along with debt. Wealth has accumulated, but in
very few pockets, leading to unprecedented inequality.

These consequences mainly spring from the financialization of the economy
since the 1970s and the corresponding hollowing-out of domestic production.
Spurring the process is the deregulation mania favored by Wall Street and
supported by economists mesmerized by efficient-market myths.

People see that the bankers who were largely responsible for the financial
crisis and who were saved from bankruptcy by the public are now reveling in
record profits and huge bonuses. Meanwhile official unemployment stays at
about 10 percent. Manufacturing is at Depression levels: one in six out of
work, with good jobs unlikely to return.

People rightly want answers, and they are not getting them except from
voices that tell tales that have some internal coherence-if you suspend
disbelief and enter into their world of irrationality and deceit.

Ridiculing Tea Party shenanigans is a serious error, however. It is far more
appropriate to understand what lies behind the movement's popular appeal,
and to ask ourselves why justly angry people are being mobilized by the
extreme right and not by the kind of constructive activism that rose during
the Depression, like the CIO (Congress of Industrial Organizations).

Now Tea Party sympathizers are hearing that every institution-government,
corporations and the professions-is rotten, and that nothing works.

Amid the joblessness and foreclosures, the Democrats can't complain about
the policies that led to the disaster. President Ronald Reagan and his
Republican successors may have been the worst culprits, but the policies
began with President Jimmy Carter and accelerated under President Bill
Clinton. During the presidential election, Barack Obama's primary
constituency was financial institutions, which have gained remarkable
dominance over the economy in the past generation.

That incorrigible 18th-century radical Adam Smith, speaking of England,
observed that the principal architects of power were the owners of the
society-in his day the merchants and manufacturers-and they made sure that
government policy would attend scrupulously to their interests, however
"grievous" the impact on the people of England; and worse, on the victims of
"the savage injustice of the Europeans" abroad.

A modern and more sophisticated version of Smith's maxim is political
economist Thomas Ferguson's "investment theory of politics," which sees
elections as occasions when groups of investors coalesce in order to control
the state by selecting the architects of policies who will serve their
interests.

Ferguson's theory turns out to be a very good predictor of policy over long
periods. That should hardly be surprising. Concentrations of economic power
will naturally seek to extend their sway over any political process. The
dynamic happens to be extreme in the U.S.

Yet it can be said that the corporate high rollers have a valid defense
against charges of "greed" and disregard for the health of the society.
Their task is to maximize profit and market share; in fact, that's their
legal obligation. If they don't fulfill that mandate, they'll be replaced by
someone who will. They also ignore systemic risk: the likelihood that their
transactions will harm the economy generally. Such "externalities" are not
their concern-not because they are bad people, but for institutional
reasons.

When the bubble bursts, the risk-takers can flee to the shelter of the nanny
state. Bailouts-a kind of government insurance policy-are among many
perverse incentives that magnify market inefficiencies.

"There is growing recognition that our financial system is running a
doomsday cycle," economists Peter Boone and Simon Johnson wrote in the
Financial Times in January. "Whenever it fails, we rely on lax money and
fiscal policies to bail it out. This response teaches the financial sector:
Take large gambles to get paid handsomely, and don't worry about the
costs-they will be paid by taxpayers" through bailouts and other devices,
and the financial system "is thus resurrected to gamble again-and to fail
again."

The doomsday metaphor also applies outside the financial world. The American
Petroleum Institute, backed by the Chamber of Commerce and the other
business lobbies, has intensified its efforts to persuade the public to
dismiss concerns about anthropogenic global warming-with considerable
success, as polls indicate. Among Republican congressional candidates in the
2010 election, virtually all reject global warming.

The executives behind the propaganda know that global warming is real, and
our prospects grim. But the fate of the species is an externality that the
executives must ignore, to the extent that market systems prevail. And the
public won't be able to ride to the rescue when the worst-case scenario
unfolds.

I am just old enough to remember those chilling and ominous days of
Germany's
descent from decency to Nazi barbarism, to borrow the words of Fritz Stern,
the distinguished scholar of German history. In a 2005 article, Stern
indicates that he has the future of the United States in mind when he
reviews "a historic process in which resentment against a disenchanted
secular world found deliverance in the ecstatic escape of unreason."

The world is too complex for history to repeat, but there are nevertheless
lessons to keep in mind as we register the consequences of another election
cycle. No shortage of tasks waits for those who seek to present an
alternative to misguided rage and indignation, helping to organize the
countless disaffected and to lead the way to a better future.

© The New York Times News Service/Syndicate

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